The aboriginal economy: Larger and more dynamic than you probably think

A cheechako once asked me why First Nations weren't more involved in the business community in the Yukon. I pointed out that he flew here on Air North, partly owned by the Vuntut Development Corporation.

A cheechako once asked me why First Nations weren’t more involved in the business community in the Yukon.

I pointed out that he flew here on Air North, partly owned by the Vuntut Development Corporation. He could have stayed at the First Nation-owned Yukon Inn. The deck he was standing on was built with lumber from Dakwakada’s Kilrich division and, when the Yukon weather changed in five minutes, we could go inside and look through my Northerm windows (also owned by Dakwakada).

More examples came to mind. My wife and daughter had just had their hair cut in Waterfront Station, which is partly owned by First Nations development corporations through their stake in Northern Vision. First Nations own around one-third of this local real estate company, according to a report in the Yukon News. If my cheechako friend ordered a BLT sandwich at the Edgewater, High Country or Gold Rush hotels, a share of his bill would eventual make its way to First Nations shareholders.

You can get a loan or open a small business account at First Nations Bank. You can listen to CHON FM. If you look at your cellphone bill, there might be a First Nation involved. Dakwakada owns a chunk of Latitude Wireless.

I am sure there are even more examples I have missed.

The spotlight this week might be on high politics, thanks to the annual meeting of the Assembly of First Nations. But it is worth taking a moment to consider how far and how fast aboriginal business has come in recent years.

The economics team at TD Bank have put out a series of thoughtful reports on the subject. They estimate that the total pre-tax income of aboriginal households, businesses and governments will be $32 billion by 2016. This would be bigger than the combined economies of Newfoundland and PEI.

And the aboriginal economy is growing fast, with the 2016 estimate almost triple the 2001 figure of $12 billion.

Importantly, the fastest growing part of this projection is aboriginal business. According to TD, 40 per cent of aboriginal pre-tax income comes from business. And business income in 2016 is estimated to be bigger than transfers from federal and provincial/territorial governments, which are expected to grow slowly over the next five years due to the fiscal pressures those governments are facing.

When you put all of this in a historical perspective, it is quite remarkable. Imagine if you could hop in a time machine at the MacBride Museum and go back to Second and Main around 1950. I suspect the facts from today would astonish everyone, including both 1950s Main Street merchants and their aboriginal customers of the time. Even Yukon News readers who can remember the 1970s probably find it a big change.

Going deeper into business income, nine-tenths comes from aboriginal development corporations; only one-tenth from independent aboriginal small business. This relatively small role for independent small business is a major difference compared to the rest of the Canadian economy.

There are still many significant challenges holding back aboriginal business success. More work still needs to be done on things like education, access to capital and community capability building.

In the long run, however, the sky is the limit. A whole new generation of aboriginal young people is growing up, and they have as many business role models as non-aboriginal youth. There are also some great programs that weren’t available to their parents.

Consider the Ch’nook Initiative, founded by the Sauder School of Business at UBC. It offers an Aboriginal Management Certificate, which includes classic business topics such as marketing, accounting, organizational behaviour, supply chain and process improvement. Ch’nook also has programs aimed at aboriginal high school students, such as the Fort Nelson Secondary program that includes business training for aboriginal students sponsored by some big global oil companies active in the region.

When the Assembly of First Nations next holds its annual meeting in Whitehorse in a decade or two, I’m sure they’ll find even more Yukon First Nation business success stories. I can’t predict what they’ll be. First Nations entrepreneurs will figure that out.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. You can follow him on Twitter @hallidaykeith