Indigenomics: Harnessing the Strength of an Economic Powerhouse

A Centre for the Study of Living Standards report noted that if Indigenous education and labour market outcomes could reach non-Indigenous 2006 levels, governments in Canada would benefit from an estimated $3.5 billion (2006 dollars) in additional tax revenue in the year 2026. iStock photo

Canada’s Indigenous Peoples have long been viewed in fiscal prioritization less as stakeholders than as a problem to be measured and a socio-economic gap to be closed. Indigenomics Institute founder and CEO Carol Anne Hilton writes that a shift toward constructive Indigenous economic design is long overdue. 

Carol Anne Hilton 

Indigenomics is modern, constructive generative Indigenous economic design. The term was coined as a way of heightening Canadian awareness of the rise of Indigenous economic empowerment. Stretching back into time, from the beginning of Canada until today, Indigenous peoples have been viewed through the problem lens. It is this problems lens that has created the perception of Indigenous peoples as a ‘cost’ or an expense to the financial system. This story has run its course. 

Every day, we are witnessing the uptake of Indigenous economic empowerment as seen through the Canadian media from small entrepreneurs to Indigenous economic development corporations to multimillion- and sometimes billion-dollar nation-based partnership deals across many sectors. It’s time to collectively see Indigenous peoples as having functioning generative Indigenous economies, essentially to shift the lens from problem to opportunity. It’s time to design for Indigenous economic strength. This is Indigenomics. 

Each year, when budget time comes around, Indigenous-focused line items are presented that demonstrate the classic case of “the social cart pulling the economic horse”—an expression of the imbalanced fiscal equation and long-term effects of Indigenous economic exclusion or the systemic dis-invitation to the economic table of this country. This year saw $18 billion in the federal budget identified specifically to “close the Indigenous socio-economic gap.” And while flashy and compelling, there are significant shortcomings to both this language and this approach. In investing heavily in “closing the gap”—is Canada also ready to address the structural inequalities of the income gap between Indigenous peoples and the rest of Canada? Does closing the socio-economic gap also mean enhancing education outcomes for Indigenous peoples? From an economic perspective, it is important to understand that there are dual contrasts at play within this existing socio-economic gap; direct costs to maintaining current poverty levels as well as lost opportunity costs from overall lower productivity. 

With a continuous imbalance between Indigenous social and economic expenditures, piecemealing together a series of annual Indigenous-focused expenditures is not constructive, generative economic design. The socio-economic gap is the effect of economic exclusion. It is time to address the cause. The growth of the Indigenous economy requires structure, resources, investment, tools, institutions and leadership. In 2019, the Indigenomics Institute set in motion the target of an emerging $100 billion-dollar annual Indigenous economy. This target’s objectives are threefold: First, to shift the collective focus toward Indigenous economic strength; second, to establish a performance target, and; third, to help frame a new Canadian reality of Indigenous economic empowerment. 

More than 25 years ago, the 1996 Report of the Royal Commission on Aboriginal Peoples described “the cost of doing nothing”—meaning the cost of failing to fundamentally change federal government policy toward Indigenous peoples, which at the time was estimated to be $7.5 billion annually. This estimate included $5.8 billion in lost productivity and the remaining $1.7 billion in increased remedial costs due to poorer health and increased reliance on social services. This is measuring the effect. 

If $7.5 billion was identified 25 years ago as the cost of failing to fundamentally change federal government policy toward Indigenous peoples, what is that actual amount in 2021? Now 25 years later, by investing 18 billion into the closing of the socio-economic gap, are we truly ready to address the challenges of this time; the structure of Indigenous economic growth and empowerment? It is time to both invest into and measure the cause of Indigenous economic strength. Investing in the socio-economic gap and investing in the structure of Indigenous economic growth and empowerment are two different things. 

Every couple of years, the National Indigenous Economic Development Board puts out a report on the state of the Indigenous economy, measuring the closing of the socio-economic gap, and every couple of years it’s the same story—there has been very little change. It is time to get over measuring the Indigenous socio-economic gap and begin to measure Indigenous economic strength.

A more recent Centre for the Study of Living Standards report noted that if the Indigenous population’s levels of education and labour market outcomes were to reach non-Indigenous 2006 levels, the federal and provincial/territorial governments would stand to benefit from an estimated total of $3.5 billion (2006 dollars) in additional tax revenue in the year 2026. Taking into consideration both fiscal savings and increased tax revenue generation, the government balance would improve by $11.9 billion (2006 dollars) in Canada in 2026. It is estimated that the cumulative benefit for the consolidated Canadian government of increased Indigenous education and social well-being is up to $115 billion over the 2006–26 period.” Truly addressing the closing of the socio-economic gap means building an Indigenous fiscal equation in which the social cart no longer pulls the economic horse. The closing of the socio-economic gap as an end in itself must re-set the fiscal equation of this country, and economic reconciliation must happen on the balance sheet of this country. 

The Okanagan Valley’s Nk’Mip Cellars, in Osoyoos, British Columbia, is North America’s first Indigenous-owned winery. iStock photo

In any post-pandemic economic response, it is essential to highlight the tools or enablers of Indigenous economic growth. Shifting the budget narrative away from “costs” to productive, functioning economies requires a systemic approach and Indigenous economic design. In introducing the concept of an Indigenomics economic mix, 12 levers support the growth and design of the Indigenous economy. These demonstrate functioning areas of increased Indigenous economic activity and identify investment targets. A sample of these Indigenous economic enablers include: equity ownership, trade, capital, infrastructure, clean energy and entrepreneurship. 

The work of the Rising Economy Taskforce in the Victoria region on Vancouver Island through the region’s pandemic response is instructive. Its economic planning brought together more than a dozen sectoral partners, local governments and Indigenous peoples. This economic-response planning group highlighted the need for the Indigenous economy to diversify and increase overall resilience and to begin to take advantage of economic opportunities to better withstand financial shocks. One outcome of this pandemic response planning is the proposed development of a regional Indigenous Prosperity Center as part of the post-pandemic economic response. This prosperity center will focus on an Indigenous-owned and directed Indigenous Economic Development Office for South Vancouver Island to be incubated and spun-off. This initiative sets the stage for regional Indigenous economic design. This is Indigenomics. 

Canada needs an Indigenous-led Indigenous Prosperity Center. The growth and design of the Indigenous economy cannot exist within a government program. It is time to shift our lens from problem to opportunity and understand that the success of the Indigenous economy is now intrinsically linked to the success of Canada’s economy. Indigenous peoples are not a cost to the system, we are an economic powerhouse. 

It is time to start seeing Indigenous peoples as having functioning, generative economies that strategically position Canada economically for a post-pandemic response. As this country faces a significant financial squeeze, one economic imperative is the re-design of Indigenous prosperity. Designing the structure, tools, investment, institutions and leadership into Indigenous economic design are essential especially in a post-pandemic response. Is closing the gap enough or will the establishment of a metric of success for a $100 billion-dollar Indigenous economy better shift the fiscal equation of this country in a time that it needs it the most? Clear tangible structural policy pathways such as the five percent federal Indigenous procurement target can create up to a billion dollars of Indigenous economic activity annually. We are at an intersection—are we going to measure the effect of the lack of Indigenous economic design or create the mechanisms for Indigenous prosperity? 

It is time for modern constructive generative Indigenous economic design. It is time to start measuring Indigenous economic strength. Our shifting economic reality demands it, and our collective future depends on it.  

Carol Anne Hilton is Founder and CEO of the Indigenomics Institute.