Federal Indigenous spending almost tripled to projected $32 billion—but modest improvement in Indigenous living standards due to unrelated federal child benefit

An Avalanche of Money: The Federal Government’s Policies Toward First Nations

• Since 2015, the federal government has significantly increased spending on Indigenous Peoples.
• The annual Indigenous budget has almost tripled from 2015 to 2025, growing (in nominal dollars) from roughly $11 billion to more than $32 billion.
• In addition, class actions have been settled without litigation, with estimated liabilities reaching $76 billion in 2023, while specific claims have been settled at a rate four times higher than by the previous government, leading to a significant transfer of land and money to First Nations.
• From 2016 to 2021, the gap in Statistics Canada’s Community Well-Being index, which measures the socio-economic well-being for communities across the county, between First Nations and other Canadian communities was reduced from 19 to 16 points. This reduction was due chiefly to an increase in reported income of First Nations people living on Indian reserves.
• Closer analysis shows that this increase in income was due mainly to the Canada Child Benefit (CCB), introduced in 2016. First Nations people benefit relatively more from this new program because they have lower incomes and more children than other Canadians.
• First Nations’ Own Source Revenue derived from business activities is increasing less rapidly than government transfers, making First Nations more financially dependent on the federal government.
• Simply increasing money transfers to First Nations does not necessarily produce improvements in measured well-being.
• Improvements in well-being can come from general policies, like the CCB, that are not targeted at First Nations.