REALIZACIÓN DE LA OBRA FINAL.

Now that we have established base case scenarios for projections of both Aboriginal and non-Aboriginal populations, we need to establish base case economic projections in line with these population estimates. These projections will provide a benchmark against which to

measure the potential contribution of Aboriginal Canadians to the overall economy. As discussed earlier, Dungan and Murphy (2007) from the Institute for Policy Analysis of the University of Toronto provide projections for many economic variables up to 2025. Moreover, we already established that their population projections are in line with those of Statistics Canada used in this report. Thus, these economic projections will be adopted as the base case scenario for this report. In this section, we review in more detail their projections for key labour market outcome indicators as well as for GDP, employment, and labour productivity.

Dungan and Murphy project a total population increase of 16.0 per cent between 2001 and 2017, a 0.93 per cent annual average growth rate. The working age population is projected to increase at a slightly faster rate of 1.17 per cent per year over the 2001-2017 period, a total increase of 20.5 per cent. Finally, the authors expect the labour force to grow only slightly slower, at 1.13 per cent per year or 19.8 per cent over the period (Table 14). This represents an additional 3,185,000 workers in the labour force in 2017 compared to 2001.

2001 2017 % change, 2001-2007 Average Annual % Change Total Population 30,974 35,916 16.0 0.93

Working Age Population 24,444 29,451 20.5 1.17

Labour Force 16,111 19,296 19.8 1.13

Participation Rate 65.9 65.5 -0.6 -0.04

Unemployment Rate 7.2 6.2 -13.9 -0.93

Employment Rate 61.1 62.8 2.7 0.16

Table 14: Institute for Policy Analysis Population and Labour Market Outcomes Projections to 2017

Source: Dungan, Peter and Steve Murphy (2007), Tables 1b and Table 2

Of course, with the labour force growing marginally slower than the working age population, the participation rate is expected to fall slightly from 65.9 per cent in 2001 to 65.5 per cent in 2017. The unemployment rate is also expected to decrease, from 7.2 per cent in 2001 to 6.2 per cent in 2017. This one percentage point decrease in unemployment rate over the 2001- 2017 period is sufficient to counterbalance the small decrease in participation rate, leading to a

1.7 percentage point increase in the employment rate, from 61.1 per cent in 2001 to 62.8 per cent in 2017.

Real gross domestic product (GDP) in Canada in 2001 was $1,038.7 billion (1997 dollars), and it grew to $1,189.8 billion in 2006. The rate of growth of GDP is projected to increase until 2010, reaching 3.0 per cent that year, but should then gradually decrease to reach 2.2 per cent in 2017. In 2017, real GDP is projected to be at a level of $1,564.4 billion (1997 dollars), a total growth of 50.6 per cent over the 2001-2017 period or 2.59 per cent on average each year (Table 15).

Due to projected increases in both the working age population (20.5) and the employment rate (2.7 per cent), the level of employment is expected to increase 23.7 per cent between 2001 and 2017, from 14,946,000 persons in 2001 to 18,486,000 persons in 2017. This translates into a projected annual average growth rate of 1.34 per cent for the 2001-2017 period.

2001 2017 % change, 2001-2007 Average Annual % Change GDP (billions of chained 1997 $) 1,038.7 1,564.4 50.6 2.59 Employment (in thousands) 14,946 18,486 23.7 1.34 GDP per Worker (chained 1997 $) 69,496 84,628 21.8 1.24

Labour Productivity per hour n.a. n.a. 24.5 1.38

Average Real Wage per Worker n.a. n.a. 25.5 1.43

Source: Dungan, Peter and Steve Murphy (2007), Tables 1b and Table 2

Table 15: Institute for Policy Analysis Economic Projections to 2017

GDP per worker is the ratio of GDP to employment. Hence, the growth of GDP per worker is projected to be 1.24 per cent per year over the 2001.2017, which represent the residual GDP growth not due to increased employment. Another measure of productivity, labour

productivity per hour, is projected to grow slightly faster than GDP per worker, with an average annual growth rate of 1.38 per cent. This implies that the projected amount of hours worked by each worker should decrease slightly between 2001 and 2017. Finally, real wages generally increase in line with productivity. In their projections, Dungan and Murphy (2007) project a 25.5 per cent increase in real wage per worker between 2001 and 2017, a slightly larger increase than that of labour productivity (24.5 per cent). This slight divergence suggests that the authors believe the share of labour in GDP in Canada will increase over the period. This is not surprising since the share of profit in GDP in Canada were at an unusually high level in 2001. A

V. Potential Labour Market Scenarios for Aboriginal Canadians

With Higher Educational Attainment

Earlier research has highlighted the importance of education for the economic success of the Aboriginal population as measured by increased participation rates, employment rates, lower unemployment and increased earnings. However, this research has not developed the

implications of better Aboriginal labour market outcomes for the overall labour market as well as for aggregate output and labour productivity. The next two sections fill this gap and strengthen the case for increasing the educational attainment of the Aboriginal population. As noted in previous sections, this is particularly relevant in the context of weak labour productivity growth and slower labour force growth facing Canada.

In this section, the projections described in the previous section for the overall and the Aboriginal populations are used to estimate under various assumptions both (i) the share of the growth in the labour force and (ii) the share of the growth in employment between 2001 and 2017 that can be attributed to Aboriginal Canadians. Finally, we review the changes that already occurred during the 2001-2006 period.

A. Potential Impact of Increased Participation of Aboriginal Canadians on the