Economic and Social Reports
Indigenous employment and income in indigenous-owned businesses: A comparative analysis
DOI: https://doi.org/10.25318/36280001202600100002-eng
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Introduction
Indigenous-owned businesses are a growing and important component of Canada’s economic landscape. These businesses not only contribute to entrepreneurship and community development but also serve as important sources of employment for Indigenous people.Note Understanding the extent to which Indigenous-owned businesses employ Indigenous workersNote is important for assessing labour market inclusion, economic self-determination and the role of Indigenous entrepreneurship in supporting equitable growth.
This study represents a novel contribution to the evidence base. Statistics Canada first helped close a critical data gap by developing a framework to identify Indigenous business owners and Indigenous-owned businesses (Gueye et al., 2022; Gueye, 2024). Building on that foundation, the present analysis extends the work to fill another gap, providing data on Indigenous employment within Indigenous-owned businesses. While the Labour Force Survey and the Census of Population contain information on Indigenous employees, they do not offer a breakdown by ownership characteristics of businesses. By linking ownership and employment data, this study provides new insights into how Indigenous-owned businesses contribute to Indigenous employment and income outcomes.
This linkage provides policy makers with evidence on how Indigenous-owned businesses differ from non-Indigenous-owned businesses in their workforce composition and employment income. By showing how Indigenous employment shares and incomes vary across ownership types, regions, sectors and firm sizes, the analysis helps governments and Indigenous organizations better understand the contexts in which Indigenous-owned businesses contribute more to labour market inclusion. These insights can inform policies that support entrepreneurship, address income disparities and strengthen Indigenous economic participation.
Acknowledgements
The author would like to thank Mohan Kumar, Amélie Lafrance-Cooke, Hyunji Lee, Ryan Macdonald, as well as reviewers from the Congress of Aboriginal Peoples, for their helpful comments, and Statistics Canada’s Strategic Analysis, Publications and Training team for assistance with the release process.
Data sources and methodology
The analysis draws on linked administrative and survey data, including the Canadian Employer–Employee Dynamics Database, the Business Register, and Indigenous identity variables derived from the Census of Population and the Canadian Community Health Survey. Additional methodological detail on the linkage and identification strategy is provided by Gueye et al. (2022), who outline approaches to linking survey and administrative data for Indigenous ownership identification, and by Gueye (2024), who extends the framework to refine and improve the accuracy of Indigenous ownership assessment. Together, these studies provide the basis for the present analysis, ensuring methodological consistency across data sources.
Following Grekou et al. (2018), Indigenous-owned businesses are defined as businesses where more than 50% of ownership shares are held by individuals identifying as Indigenous. Indigenous employment is measured by the proportion of employees within these businesses who self-identify as Indigenous. In both cases, Indigenous identity is self-reported or imputed when missing.Note
Descriptive statistics are reported for sectors using the North American Industry Classification System (NAICS), by province or region, and by firm size, based on the number of employees. The dataset allows for cross-tabulations to explore patterns of Indigenous employment and income, as well as identity alignment between owners and employees.
The sample is restricted to private businesses with at least one employee. Businesses in public administration and those with missing NAICS codes or location information are excluded, as are cases where owner or employee characteristics (e.g., Indigenous identity, gender, age) are not available. These restrictions ensure that the analysis focuses on the private sector, where ownership and employment dynamics can be ascertained or imputed.
Higher representation and income for Indigenous employees in Indigenous-owned businesses
Indigenous-owned businesses employ higher shares of Indigenous workers than non-Indigenous-owned businesses across sectors. The difference in the share of Indigenous employees between Indigenous-owned and non-Indigenous-owned businesses ranges from 13.4 percentage points in manufacturing to 20.8 percentage points in agriculture, natural resources and utilities (Table 1).Note
| Share of employees | Average employment income | Relative difference | ||||
|---|---|---|---|---|---|---|
| NIOB | IOB | Difference | NIOB | IOB | ||
| percent | percentage points | dollars | percent | |||
| Notes: NIOB refers to a non-Indigenous-owned business, and IOB refers to an Indigenous-owned business. Agriculture, natural resources and utilities refers to agriculture, forestry, fishing and hunting (North American Industry Classification System [NAICS] 11); mining, quarrying, and oil and gas extraction (NAICS 21); and utilities (NAICS 22). The Atlantic provinces include Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick. The territories include Yukon, the Northwest Territories and Nunavut. "Relative difference" is calculated as follows: (average employment income in IOBs – average employment income in NIOBs) / average employment income in NIOBs.
Source: Canadian Employer–Employee Dynamics Database. |
||||||
| Sector | ||||||
| Agriculture, natural resources and utilities | 4.9 | 25.7 | 20.8 | 34,900 | 44,200 | 26.6 |
| Construction | 4.3 | 24.8 | 20.5 | 42,300 | 45,000 | 6.4 |
| Manufacturing | 2.6 | 16.0 | 13.4 | 38,600 | 41,300 | 7.0 |
| Wholesale and retail trade | 3.7 | 19.0 | 15.3 | 28,100 | 36,000 | 28.1 |
| Transportation and warehousing | 2.9 | 21.3 | 18.4 | 41,100 | 49,500 | 20.4 |
| Finance, insurance, real estate, rental and leasing | 2.4 | 23.1 | 20.7 | 39,900 | 53,000 | 32.8 |
| Professional, scientific and technical services | 1.9 | 22.4 | 20.5 | 50,700 | 68,300 | 34.7 |
| Business, building and other support services | 3.4 | 20.1 | 16.7 | 26,000 | 34,500 | 32.7 |
| Educational services | 2.7 | 23.3 | 20.6 | 34,900 | 35,600 | 2.0 |
| Health care and social assistance | 2.6 | 18.0 | 15.4 | 37,900 | 80,000 | 111.1 |
| Information, culture and recreation | 3.4 | 19.6 | 16.2 | 25,500 | 50,300 | 97.3 |
| Accommodation and food services | 4.6 | 18.3 | 13.7 | 15,700 | 18,200 | 15.9 |
| Other services (except public administration) | 3.7 | 23.4 | 19.7 | 33,700 | 46,100 | 36.8 |
| Business location | ||||||
| Atlantic provinces | 4.5 | 19.3 | 14.8 | 28,300 | 40,700 | 43.8 |
| Quebec | 1.6 | 12.1 | 10.5 | 32,200 | 44,800 | 39.1 |
| Ontario | 2.2 | 15.8 | 13.6 | 34,100 | 51,100 | 49.9 |
| Manitoba | 11.3 | 30.5 | 19.2 | 29,700 | 37,000 | 24.6 |
| Saskatchewan | 10.6 | 31.6 | 21.0 | 28,500 | 33,000 | 15.8 |
| Alberta | 5.3 | 25.0 | 19.7 | 35,900 | 51,100 | 42.3 |
| British Columbia | 4.7 | 20.8 | 16.1 | 33,700 | 49,200 | 46.0 |
| Territories | 19.9 | 63.2 | 43.3 | 33,300 | 37,900 | 13.8 |
| Employment size | ||||||
| 1 to 4 employees | 2.5 | 31.8 | 29.3 | 33,800 | 49,300 | 45.9 |
| 5 to 9 employees | 3.8 | 22.3 | 18.5 | 31,100 | 42,100 | 35.4 |
| 10 to 19 employees | 4.0 | 18.9 | 14.9 | 31,500 | 41,400 | 31.4 |
| 20 to 49 employees | 4.1 | 16.8 | 12.7 | 32,500 | 40,700 | 25.2 |
| 50 to 99 employees | 3.9 | 15.5 | 11.6 | 32,800 | 39,000 | 18.9 |
| 100 or more employees | 3.2 | 7.8 | 4.6 | 35,200 | 53,000 | 50.6 |
For example, in construction, Indigenous-owned businesses employ Indigenous workers at a rate of 24.8%, in contrast with 4.3% in non-Indigenous-owned businesses. Manufacturing shows a similar disparity, with Indigenous employment shares of 16.0% in Indigenous-owned businesses, compared with 2.6% in non-Indigenous-owned businesses. A similar pattern is observed across service-producing sectors. In wholesale and retail trade, Indigenous employees account for 19.0% of employees in Indigenous-owned businesses, compared with 3.7% of employees in non-Indigenous-owned businesses. In accommodation and food services, the difference remains significant, with 18.3% in Indigenous-owned businesses versus 4.6% in non-Indigenous-owned businesses.
Similarly, the average employment income of Indigenous employees is higher in Indigenous-owned businesses than in non-Indigenous-owned businesses.Note In health care and social assistance, the income of Indigenous employees in Indigenous-owned businesses averages $80,000, more than two times higher than the $37,900 in non-Indigenous-owned businesses. The gap is lowest in educational services, where Indigenous employees earn on average $35,600 in Indigenous-owned businesses and $34,900 in non-Indigenous-owned businesses.
With the exception of educational services (2.0%), construction (6.4%) and manufacturing (7.0%), the average employment income of Indigenous employees is at least 15.9% higher in Indigenous-owned businesses than in non-Indigenous-owned ones. The income gap exceeds 25% in 8 of the 13 sectors. These results show that the higher average income recorded in Indigenous-owned businesses occurs across all sectors and is not just the result of the types of sectors in which Indigenous-owned businesses operate.
Highest Indigenous employment shares in the territories and the Prairie provinces
Across regions, Indigenous-owned businesses employ Indigenous workers at higher rates than non-Indigenous-owned businesses, with the largest differences observed in the Prairies and the territories. In Saskatchewan (31.6%), Manitoba (30.5%) and Alberta (25.0%), Indigenous employees account for at least one in four employees in Indigenous-owned businesses, compared with substantially lower shares in non-Indigenous-owned businesses (10.6% in Saskatchewan, 11.3% in Manitoba and 5.3% in Alberta).
The territoriesNote show a similar pattern, albeit stronger, with Indigenous employment in Indigenous-owned businesses reaching 63.2%, compared with 19.9% in non-Indigenous-owned businesses. The Atlantic provinces,Note Quebec, Ontario and British Columbia show lower Indigenous employment shares overall, but the ownership differential remains significant. Indigenous-owned businesses have Indigenous employment shares between 12.1% and 20.8%, compared with 1.6% to 4.7% in non-Indigenous-owned businesses.
Regardless of where businesses are located, Indigenous employees earn more on average in Indigenous-owned businesses than in non-Indigenous-owned ones, indicating that the income advantage is also not limited to specific regions. However, the income differential is smallest in areas where Indigenous employees already represent a relatively large share of the workforce.
In the territories ($37,900), Saskatchewan ($33,000) and Manitoba ($37,000), the regions where Indigenous employment shares are highest, the average income of Indigenous employees in Indigenous-owned businesses is 13.8% to 24.6% higher than in non-Indigenous-owned businesses. In other provinces, the gap ranges from 39.1% in Quebec to 49.9% in Ontario. These regional comparisons point to a potential ownership effect; Indigenous-owned businesses employ more Indigenous workers and tend to pay higher average incomes to Indigenous employees relative to non-Indigenous-owned businesses operating in the same provinces and territories.
Indigenous employment in Indigenous-owned businesses drops with firm size, but remains higher than in non-Indigenous-owned ones
The relationship between firm size and Indigenous employment in Indigenous-owned businesses reveals an inverse relationship, with Indigenous employment shares declining as firm size increases. In Indigenous-owned businesses employing one to four employees, 31.8% of employees identify as Indigenous. Indigenous employees account for 22.3% of employees in Indigenous-owned businesses with five to nine employees. The share of Indigenous employees drops to 15.5% in Indigenous-owned businesses with 50 to 99 employees and declines further to 7.8% in medium and large Indigenous-owned businesses (100 or more employees). By contrast, non-Indigenous-owned businesses employ Indigenous workers at a lower rate across all size categories (2.5% to 4.1%).
Average employment income for Indigenous employees is higher in Indigenous-owned businesses than in non-Indigenous-owned ones across all firm size categories. The income advantage is most pronounced among the smallest and largest businesses. In fact, Indigenous employees earn on average $49,300 in smaller Indigenous-owned businesses (one to four employees), 45.9% more than in similar non-Indigenous-owned businesses ($33,800). The average income of Indigenous employees working in larger Indigenous-owned businesses ($53,000) is 50.6% higher than in larger non-Indigenous-owned businesses ($35,200). It is worth noting that the gap narrows in other firm size categories but remains significant.
These patterns indicate that Indigenous-owned businesses, particularly smaller ones, are associated with higher representation of Indigenous workers. Indigenous-owned businesses tend to employ higher shares of Indigenous workers and offer higher average incomes, making them important places where Indigenous people work and earn income. However, the smaller share of Indigenous employees in larger firms suggests that this pattern is less pronounced as firm size increases.
Employment and ownership by distinction group
The linked data also allow Indigenous ownership and employment to be examined by Indigenous distinction group (First Nations, Métis and Inuit).Note This breakdown provides insight into both intra‑group employment, where Indigenous-owned businesses employ workers from the same identity group, and cross‑group employment, where Indigenous-owned businesses employ Indigenous workers from other groups.
| First Nations | Métis | Inuit | |
|---|---|---|---|
| percent | |||
| Notes: "First Nations," "Métis" and "Inuit" refer to the single identity population. The observed patterns are descriptive and should not be interpreted as evidence of preferential hiring or causal effects.
Source: Canadian Employer–Employee Dynamics Database. |
|||
| Share of Indigenous employees | |||
| Ownership type | |||
| Non-Indigenous-owned | 1.9 | 1.4 | 0.1 |
| First Nations-owned | 16.1 | 3.3 | 0.4 |
| Métis-owned | 5.8 | 15.2 | 0.2 |
| Inuit-owned | 4.0 | 3.0 | 43.1 |
| dollars | |||
| Average employment income | |||
| Ownership type | |||
| Non-Indigenous-owned | 28,100 | 39,200 | 31,600 |
| First Nations-owned | 43,300 | 39,400 | 27,300 |
| Métis-owned | 25,400 | 55,800 | 35,600 |
| Inuit-owned | 28,500 | 47,800 | 38,500 |
Indigenous employees are more represented in businesses owned by their own distinction group
Among First Nations-owned businesses, 16.1% of employees identify as First Nations, compared with 1.9% in non-Indigenous-owned businesses (Table 2). Similarly, Métis workers make up 15.2% of employees in Métis-owned businesses, while they make up 1.4% of employees in non-Indigenous-owned businesses. Inuit-owned businesses show the most pronounced intra-group representation, with 43.1% of employees identifying as Inuit, compared with 0.1% of employees in non-Indigenous-owned businesses.
These disparities suggest that Indigenous-owned businesses tend to employ higher shares of Indigenous workers, particularly within their own distinction groups.Note
Cross‑group employment is also present. For example, First Nations-owned businesses employ some Métis (3.3%) and Inuit (0.4%) workers, and Métis-owned businesses employ some First Nations (5.8%) and Inuit (0.2%) workers. Although these shares are smaller than intra‑group employment, they show that Indigenous-owned businesses contribute to broader labour market inclusion beyond their own communities.
Income is highest when employees and owners share the same Indigenous identity group
Indigenous employees earn the highest incomes when employed in businesses owned by members of their own distinction group. For instance, First Nations employees earn more on average in First Nations-owned ($43,300) businesses than in Métis-owned ($25,400), Inuit-owned ($28,500) or non-Indigenous-owned ($28,100) businesses. Similarly, average employment income for Métis and Inuit is highest in businesses owned by Métis and Inuit, respectively.
These findings indicate that Indigenous-owned businesses employ higher shares of Indigenous workers across all distinction groups and provide higher average incomes, although the magnitude of the income advantage differs by group. The variation among groups highlights the importance of considering Indigenous identity groups when assessing labour market inclusion and income outcomes.
The intra-group employment alignment may also reflect community-based hiring practices, cultural affinity and geographic proximity to Indigenous populations. Indigenous-owned businesses may operate in regions where individuals of the same identity group constitute a large share of the local labour force (for example, First Nations-owned businesses located on or near reserves, or Inuit-owned businesses operating within Inuit Nunangat). In such settings, hiring from the surrounding workforce is likely to result in higher same-identity employment shares, even in the absence of identity-based hiring decisions
Differences in average income by employee identity within ownership groups may similarly reflect structural factors rather than differential pay practices. Higher average income among same-identity employees may be associated with differences in occupational roles, tenure or firm-specific experience, particularly where founders, family members or long-standing employees occupy managerial or supervisory positions.
Conclusion
This study provides new evidence on Indigenous labour market outcomes by linking business ownership with employee characteristics. While existing sources, such as the census or the Labour Force Survey, report Indigenous employment by various individual characteristics, they do not distinguish between Indigenous-owned and non-Indigenous-owned businesses, nor do they provide detailed firm characteristics. By examining these dimensions, the analysis sheds light on the patterns of Indigenous-owned businesses in supporting Indigenous employment and higher income.
The study shows that, across sectors, provinces and firm sizes, Indigenous-owned businesses employ higher shares of Indigenous workers compared with non-Indigenous-owned firms. Furthermore, Indigenous employees earn higher average incomes in Indigenous‑owned businesses. A clear within‑group income advantage emerges: Indigenous employees achieve the highest average income outcomes when employed in businesses owned by members of their own distinction group.
These findings indicate that Indigenous‑owned businesses are associated with higher employment shares and higher average incomes for Indigenous workers, reflecting descriptive patterns, which highlight the relevance of Indigenous-owned businesses to inclusive growth. At the same time, the lower employment share in larger firms shows that these patterns are less pronounced as firm size increases. Understanding these patterns may help inform policies aiming to support Indigenous entrepreneurship, strengthen income equity and ensure that the benefits of Indigenous ownership extend across the full scale of the economy.
Author
Bassirou Gueye is with the Economic and Social Analysis and Modelling Division, Analytical Studies and Modelling Branch, at Statistics Canada.
References
Grekou, D., J. Li, and H. Liu. (2018). The Measurement of Business Ownership by Gender in the Canadian Employer–Employee Dynamics Database. Analytical Studies: Methods and References. Statistics Canada Catalogue no. 11-633-X – No. 017. Statistics Canada.
Gueye, B., A. Lafrance-Cooke, and J. Oyarzun. (2022). Identifying Indigenous Business Owners and Indigenous-owned Businesses. Analytical Studies: Methods and References. Statistics Canada Catalogue no. 11-633-X – No. 045. Statistics Canada.
Gueye, B. (2024). Indigenous-owned businesses in Canada, 2005 to 2021. Economic and Social Reports. Statistics Canada Catalogue no. 36-28-0001. Statistics Canada.
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