CSLS Releases Study on Estimates of the Human Development Index for the Canadian Territories and Provinces: Alberta Ranks First

The Centre for the Study of Living Standards today released a major study entitled “The Human Development Index in Canada: Estimates for the Canadian Provinces and Territories.” The report is posted at http://www.csls.ca/reports/csls2012-02.pdf

This is the first study that has developed estimates of the Human Development Index (HDI) for the provinces and territories that are consistent with the official HDI estimates for Canada produced by the United Nations. Key findings from the study are highlighted below.

In 2011, Alberta ranked as the jurisdiction with the highest HDI in Canada, closely followed by Ontario, the Northwest Territories, and British Columbia. Nunavut ranked last, and Prince Edward Island second last.

The HDI is based on life expectancy, average years of education attainment, expected years of education, and Gross National Income. For both life expectancy and average educational attainment, British Columbia ranked first among the 13 provinces and territories and Nunavut ranked last. For expected years of schooling, Quebec ranked at the top and Nunavut came in last, while for GNI per capita, Northwest Territories was in first place and Prince Edward Island was in last place.

In 2011, Canada ranked sixth out of 187 countries in the HDI, behind Norway, Australia, United States, the Netherlands and New Zealand. This ranking however hides considerable differences within Canada. The top four jurisdictions in Canada would rank third in the international rankings, between Australia and the United States and the Netherlands. Nunavut, with the lowest HDI among the 13 provinces and territories, would rank 38th internationally and second lowest Prince Edward Island 24th.

An analysis of the growth rate of the HDI over the past decade gives a different story than the level of the HDI. Low ranked Nunavut fared best, with the HDI advancing at a 0.54 per cent average annual rate between 2000 and 2011. It was closely followed by Newfoundland and Labrador at 0.48 per cent. In contrast Ontario had the slowest growth in the HDI of any jurisdiction in Canada (0.25 per cent per year), closely followed by Alberta and British Columbia (both at 0.26 per cent).

The report provides a comprehensive picture of developments in life expectancy, average education attainment, expected years of schooling, and Gross National Income per capita for all provinces and territories over the 2000-2011 period.

For further information, please contact:
Andrew Sharpe
Executive Director
Centre for the Study of Living Standards
710-151 Slater Street
Ottawa, Ontario K1P 5H3
613-233-8891
Andrew.sharpe@csls.ca

The Centre for the Study of Living Standards (CSLS) is a national, independent, Ottawa-based not-for-profit research organization Its primary objective is to contribute to a better understanding of trends and determinants of productivity, living standards, and economic well-being in Canada through research.

The Importance of Aboriginal Education

Throughout the month of October the Vital Signs Canada blog will feature guest bloggers who are experts on various aspects of community vitality. Today’s contributor is Dr. Andrew Sharpe, Executive Director of the Centre for the Study of Living Standards.

Canada’s Aboriginal population is in crisis. In 2007, the National Council of Welfare concluded that, “To date, no governmental response has made major inroads into the issues” faced by Aboriginal people. Improving the social and economic well-being of the Aboriginal population is not only a moral imperative; it is a sound investment which will pay substantial dividends in the coming decades. Aboriginal education must be a key component in any such effort.

In recognition of the educational challenges facing Canada’s aboriginal population, the Vital Signs initiative led by Community Foundations of Canada this year selected the aboriginal high school completion rate as one of the 10 core indicators to be used in the Vital Signs reports released by 16 community foundations across the county. The objective of this article is to highlight some of this key facts and issues related to aboriginal education, building on research that the Centre for the Study of Living Standards has conducted for Indian and Northern Affairs Canada (Sharpe et al, 2007 and Sharpe et al, 2009).

The importance of the Aboriginal population for Canada and the Canadian economy is best exemplified by these key observations:

• In 2006, the Aboriginal identity population made up 4.0 per cent of the Canadian population, with 1,311,200 persons.
• The Aboriginal population is much younger than the average Canadian, with a median age in 2006 of only 26.5 years, compared to 39.5 years for all Canadians.
• Aboriginal Canadians aged 15 and over have a much lower educational attainment than their non-Aboriginal counterparts with 43.7 per cent not holding any certificate, diploma or degree in 2006, compared to 23.1 per cent for other Canadians.
• As a result, the labour market outcomes for Aboriginal Canadians are significantly inferior to the Canadian average. In 2006, Aboriginal Canadians had lower incomes, a higher unemployment rate, a lower participation rate, and a lower employment rate.
• Aboriginal people with a high school diploma or higher had significantly better labour market outcomes, both in absolute terms and relative to non-Aboriginal Canadians than those who did not.
• In 2026, using the medium growth projection for Aboriginal and the General population, the Aboriginal population is projected to make up 4.6 per cent of the Canadian population.

Given these observations, Canada’s Aboriginal population could play a key role in mitigating the looming long term labour shortage caused by Canada’s ageing population and low birth rate. The potential contribution of the Aboriginal population to Canadian labour force and employment growth could be even larger than predicted by simple demographic trends because their participation and employment rates currently lag far behind the Canadian average. Indeed, if Aboriginal participation and employment rates reach 2006 non-Aboriginal levels by 2026, it is projected that the Aboriginal population will account for 19.9 per cent of labour force growth and 22.1 per cent of employment growth over the 2006-2026 period. In other words, if in 2026 Aboriginal people experienced the same labour market outcomes as non-Aboriginal people did in 2006, the Aboriginal share of the Aboriginal population to the Canadian labour force would nearly double by 2026. This equates to nearly 200,000 additional productive Canadian workers.

Given that educational attainment is one of the key driver of participation and employment rates, there are clear incentives for the Canadian government to make Aboriginal education a priority. If in fact Aboriginal education were not prioritized, the drag on Canadian productivity caused by below average Aboriginal education will grow as the Aboriginal population’s share of Canada’s labour force increases over time.

CSLS research has concluded the following.

• Education is by far the most important determinant of labour market outcomes, and also plays a preeminent role improving social outcomes.
• Given the demographic structure of the Aboriginal and non-Aboriginal people, Aboriginal people will undoubtedly play a significant role in shaping the economic future of Canada, and in particular that of the Western provinces.
• As a result, if businesses are to thrive in the environment of limited labour supply that is currently developing in Canada, they will need to integrate an increasing number of Aboriginal people into the labour force. If these individuals do not possess the necessary skills, businesses will suffer.
• In addition, the long-term fiscal impact for governments of better education and better social outcomes for the Aboriginal population are massive. If government want to deal with looming fiscal issues, addressing the pressing needs of Aboriginal today may be part of the solution.
• Finally, increased education can have dynamic effect on the leadership capacity of the Aboriginal community and therefore may underestimate the contribution of increased education of Aboriginal Canadians to future output and productivity growth. Better educated Aboriginal Canadians will be more effective leaders and thereby provide better direction for the economic development of Aboriginal communities.

Investing in disadvantaged children is one of the rare public policy with no equity-efficiency tradeoff. Increasing the number of Aboriginal Canadians who complete high school is a low-hanging fruit with far-reaching and considerable economic and social benefits for Canadians.

The key message is clear: investing in Aboriginal education will not only benefit the Aboriginal population itself, but will also benefit Canadian governments and businesses, and, by extension, the entire Canadian population. Increased output will drive up productivity which is the key driver of our standard of living. Furthermore, decreased government cost and increased government revenue will provide Canadian government with the fiscal flexibility needed to cut taxes, increase services or reduce debt.

References

• National Council of Welfare, (2007). “First Nations, Métis and Inuit Children and Youth: Time to Act” available online at http://www.ncwcnbes.net/documents/researchpublications/ResearchProjects/FirstNationsMétisInuitChildrenAndYouth/2007Report-TimeToAct/ReportENG.pdf
• Sharpe, Andrew, Jean-Francois Arsenault and Simon Lapointe (2007) “The Potential Contribution of Aboriginal Canadians to Labour Force, Employment, Productivity and Output Growth in Canada, 2001-2017,” CSLS Research Report No. 2007-6, November. http://www.csls.ca/reports/csls2007-04.PDF
• Sharpe, Andrew, Jean-Francois Arsenault, Simon Lapointe and Fraser Cowan (2009) “The Effect of Increasing Aboriginal Educational Attainment on the Labour Force, Output and the Fiscal Balance, ” CSLS Research Report No. 2009-3, May. http://www.csls.ca/reports/csls2009-3.pdf