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V. Potential Labour Market Scenarios for Aboriginal Canadians
With Higher Educational Attainment
Earlier research has highlighted the importance of education for the economic success of
the Aboriginal population as measured by increased participation rates, employment rates, lower
unemployment and increased earnings. However, this research has not developed the
implications of better Aboriginal labour market outcomes for the overall labour market as well as
for aggregate output and labour productivity. The next two sections fill this gap and strengthen
the case for increasing the educational attainment of the Aboriginal population. As noted in
previous sections, this is particularly relevant in the context of weak labour productivity growth
and slower labour force growth facing Canada.
In this section, the projections described in the previous section for the overall and the
Aboriginal populations are used to estimate under various assumptions both (i) the share of the
growth in the labour force and (ii) the share of the growth in employment between 2001 and
2017 that can be attributed to Aboriginal Canadians. Finally, we review the changes that already
occurred during the 2001-2006 period.
A. Potential Impact of Increased Participation of Aboriginal Canadians on the
Labour Force
As noted in the previous section, due to demographics, Aboriginal Canadians will make
up an increasingly share of the working age population, from 2.95 per cent in 2001 to 3.37 per
cent in 2017 (Table 10 and Appendix Table 22). However, their importance to the future labour
force depends not only on their share of the working age population but also on their
participation rates. In 2001, the Aboriginal participation rate (61.4 per cent) was 5.2 percentage
points below that of the non-Aboriginal population (66.6 per cent). The report has already shown
that participation rates are higher at higher levels of educational attainment, and also that there is
currently a large educational attainment gap between Aboriginals and the general population.
In this section, we project the future labour force of Aboriginal Canadians based on
different assumptions. The increased participation rate of Aboriginal Canadians is assumed
driven by increased educational attainment as previously documented. The labour market
participation rate, however, is not only affected by increased educational attainment, but also by
employment opportunities. Theoretically, the participation rate of Aboriginal Canadians could
increase, even if there was no change in their level of educational attainment, if labour demand is
strong enough, as we currently see in Western Canada due to the commodity boom.
Although four scenarios were developed, this section focuses on the two limit scenarios
(Scenario 1 and 3). Under Scenario 1, the assumption is that there is no change in the Aboriginal
participation rate. Hence the participation rate of Aboriginal Canadians in 2017 remains the same
as its 2001 level, which is 61.4 per cent.