Estimating the Regional Economic Impacts of First Nation Spending in Saskatchewan, Canada

Abstract

It has been suggested that provincial and national multipliers may provide incorrect estimates of the economic impacts when examining distinct communities. Using data collected from a comprehensive survey of household spending on two First Nations in Saskatchewan, Canada, we use Input-Output models to refine regional multipliers for these distinct populations. We also estimate the rate of economic leakage and the economic impacts of First Nation spending. Results indicate that economic leakage rates for First Nation economies is roughly 90 percent; meaning that 90 cents of every dollar spent by First Nations for goods and services occurs off-reserve. Using our new multipliers, we find that First Nation spending contributes over $741 million to Saskatchewan's GDP, creates approximately 11,244 full-time jobs, and leads to an estimated increase of over $462 million in labor force income for the province. If policy makers intend to build on-reserve economies, strategies must be found to recapture off-reserve spending by providing comparable on-reserve goods and services. In the absence of on-reserve economic development, First Nation economic growth will likely remain stagnant with few wealth generating opportunities and lower standards of living for First Nation members.