Learning more about Indigenous economies

Indigenous people in Canada have historically been excluded from many economic opportunities. Colonialism and discrimination have made it hard for Indigenous Peoples to participate fully in the economy. This exclusion has limited the development of Indigenous economies in ways we are still working to understand and address. Even though Indigenous economies have improved significantly by many measures, economic inequalities between Indigenous and non-Indigenous people remain. Consumer prices and business activity are two key measures that economists use to understand the economy, and we lack information about how these are different in Indigenous communities. The Bank of Canada sets monetary policy to control inflation for the whole country, but it is important that we understand how people and regions experience inflation differently, and that includes Indigenous communities.

Learn about some of the challenges Indigenous entrepreneurs can face when they are seeking to connect with customers, suppliers and financial institutions.

Consumer prices on First Nations reserves

The consumer price index (CPI) measures annual inflation by comparing current prices of goods and services to prices a year ago. It plays an important role in the Bank of Canada’s understanding of the economy. We know that prices for goods and services are higher in many Indigenous communities. But we don’t know if inflation—the pace of price increases—is higher on reserves than in other communities. This gap in our knowledge exists because the CPI does not include information about prices in on-reserve First Nations communities. As a result, we don’t know whether the prices in these communities respond to economic forces differently than they do elsewhere.

New data improve our understanding of Indigenous-owned businesses

We know that Indigenous-owned businesses make a valuable contribution to Canada’s economic vitality, but we still have much to learn about what makes these firms distinct. To better understand the Indigenous economic landscape, more than 2,600 businesses owned by First Nations, Métis and Inuit people participated in the first Survey of Indigenous Firms. The results highlighted several significant differences from businesses owned by non-Indigenous people. Indigenous-owned firms are more likely to:

• do business in construction and retail sectors
• be located in rural areas, where high transportation costs could make them more sensitive to price increases for goods such as fuel and food
• have obtained funding from a government program or grant, and less likely to have used a bank as the primary source of funding for their business
• have funded their business through their savings

The survey was part of the Bank’s effort to better understand Indigenous economies, and was conducted in partnership with Global Affairs Canada, the Canadian Council for Indigenous Business and Big River Analytics. The Survey of Indigenous Firms is a step toward better representation, but we need to keep working to obtain more complete data. Indigenous people must be involved in collecting and managing that data. Organizations such as the First Nations Information Governance Centre are leading these efforts. When collecting data, the Centre uses the First Nations Principles of ownership, control, access and possession. These principles ensure First Nations control who can use information about their communities and how they can use it. They also ensure the community has access to the information for its own use.

Building a future of shared economic prosperity

Building and maintaining trusting relationships with Indigenous Peoples, communities and organizations is a guiding principle of the Bank’s Reconciliation Action Plan. And so is thoughtfully listening to and learning about Indigenous ways of knowing and being in the world. In our areas of responsibility, the Bank committed to considering the perspectives and specific economic and financial realities of Indigenous Peoples in Canada. The Bank can play an important role in helping create economic conditions that support the success of Indigenous-led organizations and businesses.