Ravi Pendakur, Professor, Public and International Affairs, University of Ottawa Abstract:

In Canada, modern agreements allow Indigenous groups to govern their internal affairs and assume greater responsibility and control over the decision-making that affects their communities. While there has been a great deal of energy expended on negotiating such agreements, there has been less work that assesses the impact of such agreements on economic outcomes (see Aragón 2015, Pendakur and Pendakur 2018). We use difference in difference models, controlling for census year (1991 – 2016) and Census subdivision (city) effects to measure the impact of 7 types of modern agreements on household and community level incomes and inequality. We find that Comprehensive Land Claims Agreements (CLCAs) raise average incomes a lot for Aboriginal households. In contrast, opt-in agreements, which allow aboriginal communities to take control of land or fiscal issues are associated with small losses in average income and no change in average log-incomes for Aboriginal households. This pattern suggests that these opt-in agreements reduce income inequality, by narrowing the distribution of income. The second part of this paper investigates how income inequality at the community-level responds to the attainment of a modern agreement. Communities that attain a Self-Government Agreement, a CLCA or an opt-in arrangement related to land management see a decrease in the Gini coefficient for income inequality of roughly 1 to 3 percentage points. Attainment of modern agreements may also affect inter-group inequality. In particular, Opt-in arrangements are correlated with larger income gaps between Aboriginal and non-Aboriginal households, even as they reduce overall income inequality in a community.