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Income disparity between Aboriginal Canadians compared to the rest of Canada.





Word count: 1244


Income Disparity in Canada.

The Aboriginal people of Canada include the Inuit, Metis and the First Nations. While these three communities have relatively different characteristics, the level of economic disparity of these communities with other Canadian nationals is quite high. This high-income disparity level arises from many factors that continue to affect the social and economic life of the aboriginals. The reluctance of the indigenous population in Canada, for example, to conform to the contemporary practices such as the participation in the wage economy was one of the critical factors that greatly impacted their economic status. The research paper explores some of the variables that may have contributed to the poor income distribution among these indigenous communities.

Differences between the Aboriginal and other Canadians

There are significant variations between the Aboriginals and the rest of the Canadians in terms of their cultural, social and economic way of life. The Aboriginals espouse for a communal lifestyle where the community is regarded as the fundamental units of living whereas people in the western society prefer an individualistic lifestyle. Ownership in the aboriginal communities is also communal while in modern societies, ownership is often the reward for hard work. The familial structures in the aboriginal communities is also extended whereas in western societies most are nuclear family structures.

Apart from the social differences there are also outstanding economic disparities between the aboriginal communities and the Canadian population. Education, for example, is mostly perceived to be a preserve of the western society and the aboriginal Indians do not duly believe in the modern education system. It is thus worth noting that this poor uptake of the education system has led to the subsequent reduction in their employment rate (Pendakur & Pendakur, 2007). Since a majority of these individuals remain unemployable, their economic situation continues to worsene over the years. These stark differences are compounded by numerous variables such as location, education, gender and health.


The living conditions between the aboriginal and the rest of the Canadians differ immensely. The aboriginal people mostly live in the northern region, rural areas and on reserves. While there has been numerous improvement in the living conditions of these indigenous individuals, similar problems still persist. According to Louie et al. (2015), the aboriginal people live in poor housing conditions with a significant number of them living in overcrowded homes while others live in houses that need repairs.

The aboriginal people in Canada who move to the urban areas face a lot of challenges that affect their socio-economic lives and this often leads to a reduction in their income. Peters (2002) argues that while being an aboriginal and living in urban areas is perceived to be exclusive, the urban areas present special challenges to these individuals. They will always face issues dealing with unemployment, a limited access to services and the issue of inadequate housing. Those aboriginals living in the urban areas will have more chances to access better economic opportunities than those living in reserves. However, the non-aboriginals will always have better lifestyles than their counterparts. This is due to the prior exposure to educational qualifications which most indigenous people do not have. The location of the aboriginals will thus play a fundamental role in determining their income.



There are numerous educational disparities between the aboriginal and the non-aboriginal residents of Canada. The employment system has shown that both indigenous and other Canadians had an increase in their wage returns following the attainment of higher education (Rolfe & Windle, 2003). While there are numerous disparities in the attainment of education between these two groups of people, education is not sufficient to explain the high-income disparities between them. The earnings for those who have completed a bachelor’s degree negates the view that aboriginals have lower incomes due to poor access to educational facilities.

The on-reserve male students were found to have incurred a higher return on earnings that those of British descent but they still reported lower incomes. In the case of the females, only off-reserve women who were registered had lower return on their earnings in comparison to British females with degrees. It is imperative to deduce that all the groups including the aboriginal people and those of British descent gain an economic benefit from education. The gains received from the increase in earnings of the aboriginals is, however, not sufficient to close down the income disparity between the two groups.


According to Wilson and Macdonald (2010), women from First nation, Inuit and Metis communities are among the poorest in the country. This view is adopted from the assertion that sexism exists in the aboriginal people as it also does in the non-aboriginal societies. However, there has been a significant progress in the educational attainment and subsequent employment incomes of women of indigenous descent. Farahnakian (2015) claims that there are two variables that distinguish between the income disparity of aboriginal women and men. These include education levels and marital status.

Women that successfully completed their bachelor’s degree got 80% more income than the women who do not have a degree in comparison with 65% for males. Wilson and Macdonald (2010) assert this view by arguing that an aboriginal woman with a degree will earn $2,471 more than her non-aboriginal counterpart. Marital status also brought about differences in income distribution among these two groups with aboriginal men who are married raking 15% higher wages than the unmarried males and other females (Farahnakian, 2015).


The social and living conditions of the aboriginal people especially on-reserves are some of the main factors affecting their health. The Aboriginal Peoples Survey reported that only 50% of aboriginal women reported to having good or excellent health in comparison to 58% of males and 62% of non-aboriginal women. 31% of these women were also likely to report the occurrence of chronic conditions in comparison to 24% of males. The poor health among these indigenous people is one of the factors contributing to income disparities as these health issues reduce the productivity of the aboriginals.

Possible solutions

Income disparities between the aboriginals and the whites in Canada could be reduced through assimilationist policies. These are legislations made by the government with the aim of integrating the aboriginals into the white society. It was done through some methods such as banning the traditional ceremonies that they carried out, prohibiting the wearing of traditional clothes and silencing some of the tribe’s spiritual leaders among others. this method seeks to offer a contemporary way of life to the aboriginals with the hope that they will be absorbed into the white population. These policies won’t, however, reconcile the injustice that the aboriginals have undergone through the hands of the colonialists.

The poor distribution of resources is also a critical problem that hinders economic development among aboriginals. Efficient redistribution of resources should be initiated through institutional development, capacity building and accountability in governance. The aboriginal people are a significant part of the Canadian population and offering them similar access to resources as others will improve the country’s economy. The Truth and Reconciliation Commission has played a significant role in unifying the aboriginals to the other country through its recommendations. It addressed the education and subsequent income disparity, an end to physical and sexual abuse and a revamp of the country’s judicial system among other solutions (Niezen, 2013). While these recommendations are essential in improving the welfare of indigenous people, it is necessary to offer them economic tools so as to empower them.



Armitage, A. (1995). Comparing the policy of aboriginal assimilation: Australia, Canada, and New Zealand. UBC Press.

Farahnakian, A. (2015). Gender Wage Gaps among Aboriginals and non-Aboriginals in the Canadian Labour Market (Doctoral dissertation, University of Ottawa).

Louie, C et al. (2015), The Aboriginal Economic Progress Report 2015, The National Aboriginal Economic Development Board

Niezen, R. (2013). Truth and indignation: Canada’s Truth and Reconciliation Commission on Indian residential schools. University of Toronto Press.

Pendakur, K., & Pendakur, R. (2007). Minority earnings disparity across the distribution. Canadian Public Policy, 33(1), 41-61.

Peters, E. (2002). 2 Aboriginal People in Urban Areas. Urban affairs: Back on the policy agenda, 45.

Rolfe, J., & Windle, J. (2003). Valuing the protection of aboriginal cultural heritage sites. Economic Record, 79, 85-95.

Wilson, D., & Macdonald, D. (2010). The income gap between Aboriginal peoples and the rest of Canada. Ottawa: Canadian Centre for Policy Alternatives.






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