January 2007
Vol. 8, no. 1

As Canada's labour market tightens, employers are scouring many sources in their search for skilled workers. One such source is the Aboriginal population. By the end of 2017, Aboriginal people of working age (15 and older) will number close to a million—about 3.4% of the working-age population overall (Statistics Canada 2005). With anticipated shortages in many areas of the labour force, this growing population may constitute an important pool of labour.

Aboriginal people have a much younger average age than other Canadians and their educational attainment is generally lower. Geographically, they are concentrated in remote areas (some reserves and in the North) and in a few urban centres (mostly Western Canadian cities). They are also less likely to be self-employed. All these factors play a major role in their labour market experiences and are critical to understanding both the challenges and opportunities for their future employment growth.

Over the coming years, the proportion of Aboriginal people in the young adult population (aged 20 to 29) is projected to grow significantly—more than for the same age group overall. Certain provinces will be particularly affected. For example, in Saskatchewan, the proportion of Aboriginal people in their 20s is expected to almost double—from 17% of the Aboriginal population in 2001 to 30% in 2017. Similarly, the proportion in Manitoba, also 17% in 2001, is projected to grow to 23%. These young people offer an enormous potential for increasing Aboriginal people's participation in the labour market, especially in these provinces (Consulbec 2002). The degree to which such provinces can integrate these young people into the labour force will become increasingly important.

How do Aboriginal and non-Aboriginal people compare in terms of employment, occupational distribution, and skill levels. Are gaps between the two closing? Are some segments of the Aboriginal population faring better than others? What is the relationship between educational attainment and labour market success? This article uses the 2005 Labour Force Survey (LFS) to compare characteristics of the off-reserve Aboriginal and the non-Aboriginal populations in the Western Canada labour force. Using the 2001 Census, the labour force situation of the entire Aboriginal population is also presented in an appendix. Where possible, comparisons will be made between the two sources (see Data sources and definitions).

Aboriginal unemployment higher in 2001

In 2001, Aboriginal people made up about 2.7% of Canada's working-age population and about 2.5% of its labour force (see Appendix). Of the roughly 652,000 Aboriginal people aged 15 or over, 61% lived in Western Canada. Nationally, they had lower participation and employment rates (60.6% and 49.7% respectively) than non-Aboriginals (66.1% and 61.8%), and a much higher unemployment rate (18.0% versus 6.5%).

Aboriginal labour market performance varied considerably from one region of the country to another. Provinces with the highest percentage of Aboriginal people—Manitoba and Saskatchewan—had Aboriginal unemployment rates of about 18% and 22% respectively. This was more than four times the unemployment rate of the non-Aboriginal population in both these provinces. Aboriginal unemployment rates were also high in the Atlantic provinces (where the proportion of Aboriginal people is lower), ranging from 20% in Nova Scotia to 32% in Newfoundland and Labrador.

Manitoba and British Columbia led Aboriginal job growth

How have Aboriginal people been faring since 2001? The only source of labour market information on Aboriginal people since the 2001 Census is the Labour Force Survey, which covers only those living off-reserve in Western Canada. This segment is the focus of the rest of the article.¹

Aboriginal people form a significant part of the labour force in Western Canada where the economy, particularly in Alberta and British Columbia, has enjoyed renewed growth in recent years.² This growth was driven by mining and construction in Alberta and by construction, real estate and transportation in British Columbia (White, Michalowski and Cross 2006). Aboriginal employment grew 23% between 2001 and 2005 compared with only 11% for non-Aboriginals. Over the same period, the Aboriginal unemployment rate dropped 3 percentage points while their participation rate rose—particularly among women (Table 1). Although the unemployment gap narrowed, the Aboriginal unemployment rate still remained more than double that of the non-Aboriginal population in 2005.

With its abundance of natural resources, Alberta has led job growth in the West.³ Not surprisingly then, Aboriginal people in Alberta had the highest labour force participation (70.0%) and employment rates (64.1%) and the lowest unemployment rate (8.5%) among the Western provinces. Alberta's economic prosperity benefited everyone as evidenced by its overall unemployment rate of only 3.9% in 2005.

Aboriginal people in Manitoba and British Columbia saw the highest growth in employment between 2001 and 2005 (Chart A). Manitoba's growth rate was 30%, five times the non-Aboriginal rate. Although British Columbia's Aboriginal participation rate (66%) was lower than Alberta's, it was up from 2001. By contrast, Saskatchewan continued to have the lowest Aboriginal employment rate (52%), despite a small increase since 2001. In addition, Saskatchewan had the largest employment rate gap in 2005 (14 percentage points compared with 7 for all of Western Canada).

Employment rate gap narrows

The Aboriginal employment rate was 58% in 2005, up from 54% in 2001. Because the rate increased less than 1 percentage point among non-Aboriginals while increasing strongly among Aboriginal people, the gap between the two groups narrowed, particularly for women (Chart B).

Labour force participation rates among men appear to be stabilizing for both populations. The gap, however, decreased slightly for men and much more for women. With rising employment, unemployment rates declined for both Aboriginal men and women in 2005.

Aboriginal education levels improving

The large gap in educational attainment between Aboriginal and non-Aboriginal people has been well-documented. Although Aboriginal people living off-reserve are generally better educated than their on-reserve counterparts, they still lag behind non-Aboriginals.

Western Canadians are increasingly likely to have university degrees—18% in 2005 versus 15% in 2001. During the same short period, Aboriginal people living off-reserve have shown tremendous growth in university education attainment—60% more Aboriginal people now have university degrees (from 5% of all Aboriginal people in 2001 to 7% in 2005).⁴ Consequently, the proportion of Aboriginal people with less than high school education also dropped, from 45% to 37% (Chart C). The proportion with a postsecondary certificate or diploma also dropped slightly for both Aboriginal and non-Aboriginal people.

High school non-completion rates for Aboriginal youth have been a major concern. A high school diploma is generally considered a minimum requirement for most jobs in today's economy. Since 1981, the gap in educational attainment between Aboriginal and non-Aboriginal people has narrowed. Between 2001 and 2005, the proportion of 20-to-24 year-old Aboriginal youth in Western Canada who had not finished high school dropped from 41% to 31% (Chart D). The share of non-Aboriginal youth without high school completion also decreased. The gap between the two youth populations continues to be high at 21 percentage points (24 points in 2001). On the other hand, among persons aged 25 to 54, the proportions with a postsecondary certificate or diploma were very similar for both Aboriginal and non-Aboriginal people.

Postsecondary education beneficial

The likelihood of employment increases and the likelihood of unemployment decreases significantly with more education. This pattern can be illustrated with the off-reserve labour force data for Western Canada (Table 2). Among the least educated (no high school diploma), employment rates were very low in 2005 for both Aboriginal and non-Aboriginal populations (36% and 41% respectively). Among the very well-educated (university degree), Aboriginal employment rates surpassed those of the non-Aboriginal population in 2005—84% compared with 77%.⁵

The effect of postsecondary education on employment is particularly strong for Aboriginal women. With a university education, they had an employment rate 11 percentage points higher than non-Aboriginal women. For men, the difference was only 4 points. On the other hand, among those who did not complete postsecondary education, the gap was in the opposite direction for both women (-11 points) and men (-6 points), indicating the importance of educational credentials for Aboriginal workers. (Ciceri and Scott 2006 found a similar pattern.)

Occupational distribution static

Even though off-reserve Aboriginal people in Western Canada had higher labour force participation and employment rates, and lower unemployment rates in 2005 than in 2001, their occupational profile changed very little (Table 3). Overall, the top three occupations in both years were sales and service (mainly retail sales clerks and cashiers, food and beverage occupations, protective service, and child care and home support); trades, transport and equipment operators (mainly mechanics, contractors, construction trade workers, and transportation equipment operators); and business, finance and administration (mainly clerical workers, and administrative and regulatory workers). These three accounted for almost two-thirds of the off-reserve Aboriginal labour force in Western Canada.

On the surface, the non-Aboriginal labour force showed a similar pattern, with the top three occupations being the same and representing just under 60% of the total. However, non-Aboriginals exhibited some differences within these categories. For example, within sales and service occupations, a larger proportion were wholesale, technical, insurance and real estate sales specialists. Similarly, within the business, finance and administration group, they held a greater share of the professional occupations in business and finance.

Most of the growth in the off-reserve Aboriginal labour force over the period was dominated by the three largest occupational sectors: sales and service (35%); business, finance and administration (19%); and trades, transport and equipment operators (18%). Non-Aboriginal job growth showed a similar pattern, with the same three being the top contributors to growth. A notable difference, however, was that management occupations, an area with relatively few Aboriginal workers, lost 53,000 jobs.

Aboriginal youth in the labour force

In 2005, almost one-quarter of the Aboriginal labour force in Western Canada was aged 15 to 24 (10% aged 15 to 19, and 13% 20 to 24). This compares with only 16% among the non-Aboriginal labour force (7% 15 to 19, and 10% 20 to 24).

While participation rates for non-Aboriginals aged 20 to 24 fell between 2001 and 2005, they increased for their Aboriginal counterparts, likely as a result of higher education levels (Table 4). In particular, more Aboriginal men 20 to 24 had completed high school than ever before, narrowing the employment and labour force participation gap between the two groups. In fact, the 2005 participation rate for Aboriginal men (82%) was slightly higher than for non-Aboriginal men (81%). In contrast, Aboriginal women in this age group continued to have a much lower labour force participation rate (65% versus 77%)—partly because young Aboriginal women are more likely to be out of the labour force for personal or family reasons.

Aboriginal youth (particularly those 15 to 19) were found mainly in sales and service jobs (cashiers, food service, retail sales, cooks, and food and beverage servers).⁶ This was followed by trades, transport and equipment operators and related occupations (construction trades helpers, labourers and handlers, truck and delivery drivers) and business, finance and administrative occupations (customer service clerks, tellers, receptionists, shippers and receivers), both of which were led by the 20-to-24 segment. The occupational pattern for young non-Aboriginals was similar, except for a higher concentration in business, finance and administration .

Skilled Aboriginal trades workers in high demand

Disparity in educational attainment implies that the skill level (see Data source and definitions) of jobs held by Aboriginal people tends to be considerably lower than for non-Aboriginal people (Table 5). Fewer Aboriginal workers have a university degree, so many professions may not be accessible to them. Indeed, they are under-represented in occupations normally requiring a university education and over-represented in occupations requiring a high school diploma or less. Disparity has widened among the latter group since 2001.

Although Aboriginal numbers are increasing at universities, most of those taking postsecondary education do so at the college or trade level. According to the National Graduates Survey, Aboriginal people accounted for 17% of Manitoba's college-level graduates in 2000, but only 9% at the bachelor's level (Vaillancourt 2005). The proportion of graduates at the college level roughly reflected the proportion of Aboriginal people in the general Manitoban population, while they were under-represented at the bachelor's level. Aboriginal graduates also tended to choose different fields of study-health, parks, recreation and fitness—while their non-Aboriginal counterparts tended to choose engineering technologies. This survey also found that Aboriginal college graduates were less likely to be employed (80% had a job two years later compared with 90% of non-Aboriginal college graduates), and that compared with counterparts outside Manitoba, their earnings were lower. Aboriginal graduates also tended to be less likely to enter their program directly from secondary school. Accordingly, they tended to be older and, at the bachelor's level, less likely to be single and more likely to have children.

Although occupations normally requiring a university education accounted for almost half of total employment growth in Canada between 1991 and 2001, much of Western Canada's job growth in subsequent years has been in occupations normally requiring a college diploma or certificate, or apprenticeship training. Western Canada added 283,000 such jobs between 2001 and 2005, accounting for just over 60% of job growth. Aboriginal people accounted for about 15,000 of these positions—46% of their total job growth during these years. Indeed, about one-third of both Aboriginal and non-Aboriginal people in 2005 were in jobs requiring college education or apprenticeship training. This category includes police officers, firefighters, trade professions, as well as registered nursing assistants.

In Alberta, the need for skilled workers is so critical that the provincial government is promoting the trades, particularly among Aboriginal youth (Jacobs 2006). According to the Alberta government, some 1,100 Aboriginal people (on- and off-reserve) were apprentices in 2006, up dramatically from 200 four years ago. The Construction Sector Council and the Aboriginal Human Resource Development Council of Canada are also forecasting shortages. Since more than 62,000 construction workers across Canada are expected to retire within the next 10 years, the shortage could represent a major opportunity for Aboriginal youth, irrespective of where they live.

Summary

Historically, Aboriginal people have not fared well in the labour market as lower educational attainment has channelled them into less skilled jobs. They also have higher unemployment rates. Labour force indicators from 2001 show that living in more remote locations has been a factor—Aboriginal people living on reserves had an unemployment rate of 27% in 2001, nearly four times that of Canada as a whole.

The good news is that Aboriginal people are starting to benefit from the increasingly tighter labour market conditions, particularly in Alberta and British Columbia. In fact, labour-force participation rates for Aboriginal people living off-reserve surpassed those of the non-Aboriginal population in both Calgary and Vancouver in 2005. Employment among Aboriginal people in the West rose 23% between 2001 and 2005, versus only 11% among non-Aboriginals. In addition, their unemployment rate dropped 3 percentage points, the improvement in education levels likely being an important factor. In fact, while only 7% of working-age Aboriginal people had a university degree, those that did were even more likely than non-Aboriginals to hold a job in 2005 (84% versus 77%).

The proportion of Aboriginal people living off-reserve in Western Canada who work in occupations requiring college, trade or apprenticeship training (such as trades and construction) has grown over the last few years. Such skills, particularly in the primary industries, can be easily applied anywhere in Canada, and as such may be one of the keys to employment mobility, particularly for more remote areas. With on-reserve populations expected to increase and housing shortages forecast, the establishment of trade education programs in these locations could be particularly relevant. Nevertheless, in 2005, one-third of the Aboriginal labour force in Western Canada was employed in occupations requiring only a high school education.

The evidence concerning Aboriginal people's labour market outcomes in Western Canada shows that progress is being made. Nevertheless, substantial gaps remain between the Aboriginal and non-Aboriginal populations. For example, young Aboriginal women (20 to 24) who live off-reserve continue to have lower rates of labour force participation and high school completion than their non-Aboriginal counterparts. Secondly, the employment gap remains high in cities such as Regina and Saskatoon, which are home to a large portion of the Aboriginal population. In spite of these challenges, current trends seem to signal improvement in the labour market performance of Aboriginal people.

Appendix

Table A1 Aboriginal population 15 and older

In 2001, the majority of the Aboriginal population lived in Western Canada (61%) while 20% lived in Ontario.

Provincially, Manitoba had the largest share of Aboriginal people (11%); Nunavut led the territories (80%).

Yukon had the largest share of North American Indians (85%); not surprisingly, Nunavut had the highest percentage of Inuit.

Alberta had the largest share of Métis (45%). (Table A1 Aboriginal population 15 and older - Table)

Table A2 Area of residence

Twenty-eight percent of Aboriginal people lived on reserves in 2001. (Table A2 Area of residence - Table)

Table A3 Population by age

The Aboriginal age distribution is considerably younger than the non-Aboriginal.

Thirteen percent of the non-Aboriginal population was 65 and over compared with only 4% of the Aboriginal population.

In contrast, one-third of the Aboriginal population was under 15 compared with only one-fifth of the non-Aboriginal population. (Table A3 Population by age - Table)

Table A4 Top 10 Aboriginal occupations

The most common occupational category for Aboriginal men in 2001 was construction trades—7.4% compared with only 4.1% of non-Aboriginal men. Such jobs include plumbers, carpenters, painters, and shinglers. Just under one-third of Aboriginal men in these occupations lived on-reserve and were younger (37) than their non-Aboriginal counterparts (40).

The most common occupations for Aboriginal men on-reserve in 2001 were in the forestry, mining, fishing, and oil and gas extraction industries. Such jobs include logging machinery operators, oil and gas drillers, and trappers and hunters.

The most common occupations among Aboriginal women in 2001 were clerical, which include general office clerks, data entry clerks, library clerks, letter carriers, and bank and financial clerks. Although 13.4% of Aboriginal women were found in these occupations, slightly more non-Aboriginal women had jobs in this area (14.7%).

The most common occupations among Aboriginal women living on-reserve in 2001 were in child care and home support. Aboriginal women on-reserve were also highly likely to be secondary or elementary teachers or counsellors.

Research has shown that many people on reserves would prefer to have a job close to home rather than a better job somewhere else (EKOS 2004). Although Aboriginal youth were more likely to prefer the best job available, those aged 25 to 44 had the greatest preference for staying close to home, as did those who had a college level education. Indeed, the emotional support of family was considered an important factor in the choice of employment, a sentiment that increased with age and education. (Table A4 Top 10 Aboriginal occupations - Table)

Table A5 Top 10 occupations, 15 to 24 year-olds

The most common occupations for Aboriginal youth were in sales and service, accounting for almost 1 in 4 jobs held by this group. Other common jobs were clerical, trades and cleaners. Non-Aboriginal youth showed a similar pattern.

Among Aboriginal youth on-reserve, jobs in child care and home support as well as education and social services were also prominent.

Sales and service jobs were common among Aboriginal youth of both sexes. Trades, labourer, and primary industry-related occupations were more common among young men, with the latter being particularly important for those on-reserve. Clerical, child care and home support, education and social service, and secretarial jobs were more popular among young Aboriginal women, with the latter three areas being relatively more plentiful among those on-reserve. (Table A5 Top 10 occupations, 15 to 24 year-olds - Table)

Table A6 Hourly earnings of employees

Aboriginal employees earned less on average than their non-Aboriginal counterparts ($14.20 versus $15.50 per hour).

These average hourly earnings mask important distributional differences. For example, 1 in 4 Aboriginal employees earned less then $10 per hour, compared with only 1 in 6 non-Aboriginal employees.

Only 29% of Aboriginal employees earned $20 or more per hour, compared with 40% of non-Aboriginal employees. (Table A6 Hourly earnings of employees - Table)

Table A7 Labour market rates by province, age and sex

In 2001, Aboriginal people made up about 2.7% of Canada's population and about 2.5% of the labour force.

Aboriginal participation and employment rates (60.6% and 49.7% respectively) fell short of the non-Aboriginal rates (66.1% and 61.8%), and their unemployment rate was much higher (18.0% versus 6.5%).

In Manitoba and Saskatchewan, the provinces with the highest percentages of Aboriginal people, Aboriginal unemployment rates were 18.2% and 21.6% respectively. These were over four times the non-Aboriginal rates.

Aboriginal unemployment rates were high in the Atlantic provinces (where the proportion of Aboriginal people is lower), ranging from 20.4% in Nova Scotia to 31.9% in Newfoundland and Labrador.

Despite the greater likelihood of Aboriginal people being unemployed in Atlantic Canada, their labour force participation was on a par with non-Aboriginals, and in some cases higher.

In contrast, some provinces and territories such as Saskatchewan and Nunavut had a high level of Aboriginal unemployment, as well as a low labour force participation.

Aboriginal men had the highest unemployment rate in 2001, at 20.6%. This was higher than the rate for Aboriginal women (15.3%) and three times the rate of non-Aboriginal men (6.7%).

Aboriginal women, while faring better than Aboriginal men, still faced an unemployment rate more than twice that of non-Aboriginal women (6.3%).

Young Aboriginal men (15 to 24) had a particularly difficult time finding work; their unemployment rate was 26.3% in 2001. Although youth traditionally have higher unemployment rates than the core working-age population, this rate was more than twice that of young non-Aboriginal men.

Young Aboriginal women also faced higher unemployment than their non-Aboriginal counterparts—22.2% versus 9.9%.

The employment rate was only 37.7% among the on-reserve Aboriginal population—almost the same as in the 1996 Census. More than one-quarter of the Aboriginal population 15 and over lived on reserves in 2001, and this is expected to grow to 40% by 2017 (Statistics Canada 2005).

Although population growth was strong among working-age Aboriginal people, both on- and off-reserve, employment increased more rapidly among those living off-reserve. Those on-reserve may be disadvantaged in terms of employment prospects, given remote locations and limited access to education, training, job market information, and child care (EKOS 2004). Indeed, more than half had not completed high school in 2001, compared with 44% living off-reserve and 31% of non-Aboriginals.

Aboriginals living on-reserve experienced higher unemployment—about 1 in 4 of those in the labour force in 2001. The rate for Aboriginal people living off-reserve was much lower at 15.4%, but still more than twice the non-Aboriginal rate (6.5%). (Table A7 Labour market rates by province, age and sex - Table)

Notes

1. In 2001, Aboriginal people living off-reserve in Western Canada accounted for 43% of the total Aboriginal population in Canada and 70% of the Aboriginal population in the West.

2. In 2005, Aboriginal people made up 8% of the labour force in Manitoba, 7% in Saskatchewan, and about 3% in Alberta and in British Columbia.

3. Alberta is in the midst of the strongest period of economic growth ever recorded by any province in Canada's history. Its total GDP rose 43% between 2002 and 2005 and showed no signs of slowing down in 2006. Most of this increase reflects the soaring price of oil and gas exports, which have led to expanded business investment in pipelines as well as non-residential (office buildings, petrochemical plants) and residential construction (Cross and Bowlby 2006).

4. In absolute terms, the off-reserve Aboriginal population with a university degree in Western Canada grew from 14,000 to 22,000.

5. For the 25-to-54 core working-age group, the employment rate of university-educated Aboriginal workers still surpassed that of their non-Aboriginal counterparts, although the difference was considerably smaller (89% versus 86%).

6. Full-time students looking for full-time work were removed from the unemployed category. The census and the LFS treat students in the labour force differently. The census removes only high school students from the unemployment category, whereas the LFS removes both full-time high school and university students looking for work.

References

• Ciceri, Coryse and Katherine Scott. 2006. The Determinants of Employment Among Aboriginal Peoples. Paper submitted to the Policy and Research Coordination Directorate, Strategic Policy and Planning Branch, Human Resources and Social Development Canada. 53 p.

• Consulbec. 2002. Connecting the Dots: A Study of Perceptions, Expectations and Career Choices of Aboriginal Youth. Prepared for the Aboriginal Human Resources Development Council of Canada.

• Cross, Philip and Geoff Bowlby. 2006. "The Alberta economic juggernaut: The boom on the rose." Canadian Economic Observer. Vol. 19, no. 9. September. Statistics Canada Catalogue no. 11-010-XIB. (accessed January 10, 2007).

• EKOS Research Associates. 2004. Fall 2003 Survey of First Nations People Living On-reserve. Final report. Prepared for Indian and Northern Affairs Canada. Ottawa. 78 p.

• Guimond, Eric. 2003. "Fuzzy definitions and population explosion: Changing identities of Aboriginal groups in Canada." In Not Strangers in These Parts: Urban Aboriginal Peoples. David Newhouse and Evelyn Peters (eds.). Policy Research Initiative. p. 35-49.

• Jacobs, Mindelle. 2006. "Poor education has domino effect." Edmonton Sun. March 2, 2006.

• Statistics Canada. 2002. 2001 Census Dictionary. Statistics Canada Catalogue no. 92-378-XIE. (accessed January 16, 2007).

• ---. 2005. Projections of the Aboriginal populations, Canada, provinces and territories, 2001 to 2017. Statistics Canada Catalogue no. 91-547-XIE. (accessed January 10, 2007).

• Vaillancourt, Chantal. 2005. Manitoba Postsecondary Graduates from the Class of 2000: How Did They Fare? Statistics Canada Catalogue no. 81-595-MIE. 74 p. (accessed January 10, 2007).

• White, P., M. Michalowski and P. Cross. 2006. "The west coast boom." Canadian Economic Observer. Vol. 19, no. 5. May. Statistics Canada Catalogue no. 11-010-XIB. (accessed January 10, 2007).

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Author
Jacqueline Luffman is with Dissemination Division. She can be reached at 613-951-1563. Deborah Sussman is with the Labour and Household Surveys Analysis Division. She can be reached at 613-951-4226. Both can be reached at perspectives@statcan.gc.ca.

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