Increasing Market

In 2006, the first of the baby-boomers turned 60, opening a yawning divide in Canada’s workforce between current needs and available skills. In the same era, Canada’s Indigenous population was cited as growing six times faster than the non-Indigenous population.

The TD Bank estimates that the current gross domestic product of the Aboriginal market today is 26 billion and by 2016 the Indigenous market in Canada will represent 32 billion in combined income across households, businesses and governments. If achieved, the total Indigenous income would be greater than the level of nominal GDP of Newfoundland, Labrador and PEI combined. 

According to a study released by the Centre for the Study of Living Standards, if Indigenous people in Canada reach the same education and employment level as non-Indigenous people, our country’s GDP would increase by $401 billion by 2026.

The purchasing power of Indigenous people is expected to increase four fold as education and employment outcomes continue to trend upwards.

The size of resource projects that could be developed on or near Indigenous lands is estimated to be just over 600 billion.

According to the Canadian Council for Aboriginal Business (CCAB), and Environics Research, Indigenous self-employment and entrepreneurship is on the rise. There are more than 37,000 First Nation, Métis and Inuit persons in Canada who have their own businesses, a significant increase of 85 percent since 1996. In addition, growth can be attributed to the increased longevity and entrenchment of Aboriginal Economic Development Corporations. Seventy-two percent of Indigneous economic development corporations have been around for 10 years or longer; the average length of operation is 18 years. The majority (68 %) are small businesses (i.e. based on the Industry Canada definition of less than 100 employees). Close to half (46 %) had total sales revenues of $5 million or more for the previous fiscal year.

Many larger companies in the electricity and renewable sector implement supplier diversity programs to realize concrete supply management goals such as cost reduction and innovation. In addition to this overall trend the business case for Indigenous procurement within the resource sector is partly driven by legislation. The Supreme Court of Canada decisions in 2004 (Haida and Taku River) were a major step forward for Indigenous communities. The Court established that governments have a legal obligation to consult with Indigenous Peoples about possible resource developments where required, and to accommodate potential adverse impacts.

The unique interests and constitutional rights of Indigenous communities support the rationale for businesses in the electricity and renewable sector to develop strong business relationships with Indigenous communities, relationships based upon trust and respect to achieve common goals. Good relations with Aboriginal communities can assist with faster regulatory approvals by reducing potential delays due to objections from Indigenous communities and the avoidance of legal challenges. Costs associated with projects generally escalate when there is uncertainty regarding the timeline of approvals. Timely approvals mean improved certainty of project schedule and therefore reduced costs.

Increasingly, when making procurement supplier decisions, companies are utilizing a total cost of ownership (TCO) approach. The TCO approach moves companies away from making short term price based decisions, towards a more strategic approach of measuring all the costs and benefits of a firm’s relationship with its suppliers.

While not a sole driver, increasingly studies are showing that shareholders, employees and the consumers care if companies support good causes. For example, these groups may be concerned about a company’s stand and practices with regard to environmental stewardship or social justice. Developing harmonious relationships with Indigenous communities and contributing to their social and economic well-being is seen to be important by these audiences.

Companies must be viewed as supporting the communities they work with, through long-term practices and strategies that involve social responsibility. In tandem with their adoption of Indigenous procurement practices, many companies in the electricity and renewable sector (i.e., make investments in the education and health of Indigenous communities). All of these efforts together help build a company’s reputation and positioning within the Indigenous community. A total enterprise approach to building Indigenous relations is the best way forward and this means that Aboriginal procurement is just one part of a much larger strategy aimed at developing positive Indigenous relations.

Embarking on inclusive Indigenous procurement requires the concurrence of several layers of decision makers within large companies both vertically and horizontally. The leading companies in the resource sector, for example, have adopted complex strategies supported by policy statements that affirm a company’s commitments to work closely with Indigenous people, businesses and communities. The adoption of enterprise-wide Indigenous workplace inclusion strategies, policies and practices require effective human resource strategies and actions in order to guide company-wide efforts in support of Indigenous workplace inclusion.


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