Commodities boom lifts Aboriginal incomes – by Jeremy Torobin (Globe and Mail Blog – June 17, 2011)

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Click here for: TD report on Aboriginal incomes

Anyone who reads the business pages knows that lofty commodity prices have mostly been bonus for the Canadian economy and average household wealth, even if the strong currency that comes with them is a headache for manufacturers.

But here’s a good-news aspect of Canada’s emergence as a globally renowned hotbed for coveted resources that doesn’t get the attention it deserves: Aboriginals are sharing in the bounty, finding jobs more easily and seeing their personal and community incomes grow. Since 2001, thanks to a steady stream of jobs in the oil-and-gas and mining sectors, as well as in construction, total personal income for Aboriginals has grown by an average 7.5 per cent each year, according to a new study from TD Economics.

In fact, TD economists Sonya Gulati and Derek Burleton estimate in their report that the combined income of Aboriginal households, businesses and governments could top $32-billion within five years. That’s more than the combined level of nominal gross domestic product of Newfoundland and Labrador and Prince Edward Island, making Aboriginals a fast-growing consumer market that all Canadian businesses would do well to factor into their marketing plans, the authors suggest.

“Many non-Aboriginal businesses already recognize the contribution that Aboriginal people can make to fill growing labour shortages, especially as the population ages,’’ the authors write. “There is less recognition of the fact that the Aboriginal segment of the overall population represents a rapidly growing consumer market and a potentially lucrative one for Canadian businesses.’’

However, despite evidence that Canada’s poorest population groups are doing better, the shameful gap between Aboriginal and non-Aboriginal incomes persists. When adjusted for the rapid increases in the Aboriginal population, the disparity in living standards compared with the Canadian average has barely shrank at all, the authors note, blaming the “sub-par education attainment levels’’ of Aboriginal people.

“Despite the growing pie, the level of total income on a per-capita basis is not only unlikely to narrow the gap with that of non-Aboriginal people (as measures by nominal GDP),’’ the authors warn, “but it could widen further’’ especially if the commodity boom tapers off. That’s because the gains of the past decade have been linked to well-paying jobs that often don’t require high-school education or portable skills, so when those jobs dry up, there’s little to fall back on.

“Boosting education levels should be an important national priority,’’ the authors write.

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