83
these two comparisons follows from the interaction effect between improved educational
attainment and improved labour market outcomes.32
This shows that the effect of education is more important if it is accompanied by
improvements in the labour market outcomes of the Aboriginal population. Thus, we can
consider that the isolated effect of education in the case where labour market outcomes remain
unchanged is a lower-bound estimate while the isolated effect of education when labour market
outcomes variables for Aboriginal Canadians to reach parity with that of other Canadians is an
upper-bound estimate. Of course, these estimates do not differ dramatically from each other
since they both embody only the impact of an increased in educational attainment. A summary of
the impact of increased educational attainment is shown in Table 24.
D. Complete Catching-Up in Educational Attainment - Scenarios 7 to 10
In the previous sub-section, the assumption was that Aboriginal Canadians by 2017
reached only the mid-way point between their 2001 educational level and the 2001 educational
level of non-Aboriginal Canadians. In this sub-section, the more optimistic assumption that
Aboriginal Canadians close the gap in educational level that separated them from the general
population in 2001 is made. In practice, the shares in each educational category for Aboriginal
Canadians in 2017 are assumed to be equal to those of non-Aboriginal Canadians in 2001.
Four scenarios are considered in which the educational profile of Aboriginal Canadians in
2017 is assumed to be the same as that of non-Aboriginal Canadians in 2001. Notwithstanding an
additional increase in non-Aboriginal educational level between 2001 and 2017, parity would be
reached in 2017 and the 2001 gap eliminated. These four scenarios mirror those of the previous
section. In Scenario 7, educational attainment is the only variable improving for the Aboriginal
population. Scenario 8 adds the assumption that employment rates reach the 2001 level of the
non-Aboriginal population. In Scenario 9, employment rates are kept constant, but the average
employment income of each education group reaches parity with the non-Aboriginal incomes in
2017. In the last scenario, all three variables improve. Scenario 10 is thus the best case scenario
in this report.
i. Total Effect
Under Scenario 7, total GDP in Canada in 2017 is estimated at $1,701 billion ($2001),
increasing at a rate of 2.71 per cent per year. Employment in Canada is projected to increase to
18,552,801 persons in 2017, which translates into an annual average growth rate of 1.36. Finally,
labour productivity in 2017 is $91,648 per worker, with a growth rate of 1.33 per cent per year
on average.
32 This can be explained intuitively with an extreme example. Let‘s assume Mr. X who lives in Canada and Mr. Z
who lives in Haiti are both projected to increase their level of educational attainment in the future. Intuitively, the
impact on output in absolute term will be larger for Mr. X than for Mr. Z because of greater employment
opportunities and higher average employment income in Canada compared to Haiti. Even though the relative effect
will likely be much larger for Mr. Z, the value of additional output produced by Mr. X will be larger. A simple
numerical example is presented in Appendix Table 57.