By. Michael Marion
DOI: 10.57912/28138007
Ethnic Native Americans are, on average, most likely to live in poverty, be unemployed, and have a median household income of $25,000 less than their non-Hispanic white counterparts. The First Nations of Canada face a similarly bleak economic reality: a group making up 5% of Canadians only accounted for 2.2% of GDP in 2023. Integrating Indigenous peoples into their respective national economies is a steep challenge after centuries of mistreatment, but - like most things on this continent - can be more wholly addressed through Canadian American cooperation. The upcoming 2026 USMCA review presents an opportunity. Encouraging Native American and First Nations economic prosperity is imperative for broader North American economic flourishment.
Indigenous peoples have historically been viewed as impediments to further development by Washington and Ottawa. In the U.S., westward expansion starting in the 17th century pitted white settlers against tribes; fierce “Indian Wars” were fought as Americans gradually beat back numerically small but warfare-adept Indigenous peoples. The violence that characterized this process was less prevalent in the Canadian equivalent, yet both governments often resorted to signing later-reneged treaties with tribes. A brutal process of forced eviction from ancestral lands, placement on geographically isolated, opportunity-barren reservations, and attempted assimilation through residential school systems dealt severe blows to Indigenous societies. The legacy of these policies stubbornly lingers today: tribes traditionally reliant on bison for subsistence and trade “have between 20-40% less income per capita than the average Native American nation” after a federal campaign to eradicate the hulking animals. For economic purposes, the worst anti-Indigenous legislation came in the form of restricting the development of tribal property. In Canada, the Indian Act made reservation lands unable to be used as collateral, mortgaged, or “pledged to non-band members.” Their property was also officialized as crown-owned, creating a lengthy buying/selling process. U.S. Indigenous peoples are worse off: though the 1988 Indian Gaming Regulatory Act (IGRA) established a tribal economic backbone, on top of property limitations, tribes cannot collect tax revenues. Poor infrastructure and high prices of goods afflict both communities, contributing to excessive living costs.
There have been past calls for an Indigenous Chapter of the USMCA, primarily to recognize the role of Indigenous peoples in protecting the environment and ensure their hand-crafted goods can cross the border duty-free. However, these measures need to go further. “Progressive trade” is more encompassing than simple acknowledgments and trade policy: it includes promising to repeal outdated restrictions on Indigenous land use (the collateral issue), establishing a body under the treaty responsible for tracking and growing Indigenous trade, and the creation of cultural exchanges between tribes for educational purposes. Encouraging cross-pollination of knowledge and unleashing Indigenous entrepreneurial spirit through following property self-determination go together. By adding an Indigenous aspect to free trade, Canada-U.S. economic cooperation would deepen and spread its benefits to another population segment. The 2026 USMCA would be the start of this process, particularly in the U.S.
Why should Indigenous economic prosperity be a priority? First, it needs to be viewed through a financial lens over the moralized perspective Indigenous disadvantage is typically cast under. In Canada, if the income, employment, and educational gaps between First Nations and the average Canadian are closed, an estimated $27.7 billion would be added to the national economy. Sectors like mining, natural gas, and logging could all see sustainable investment if First Nations can take out loans at competitive rates; there are currently 475 natural resource projects across First Nations territories, amounting to $545 billion in capital.
Tribe-owned ventures already have a history of success, taking NorSask as an example. The forest product company is exclusively owned by the Meadow Lake Tribal Council and employs over 100 people; their sawmills rank in the “top quartile for quality, productivity, and safety.” Even better, all earnings are reinvested into the community to fund social programs and infrastructure. In the realm of energy, the Enbridge pipeline deal saw 23 Indigenous entities gain partial ownership of a natural gas pipeline running through Northern Alberta. This cooperation model could easily be emulated by fossil fuel projects across the continent, at least compensating tribes for disrupting their traditional lands. 80% of renewable energy projects in Canada have some form of Indigenous ownership. Given the inherent environmentalism of many Indigenous cultures, green technology is the perfect field to combine customary respect with economic productivity.
In the U.S., tribes generated around $17.7 billion in total tax revenue through gaming alone in 2019. If even a fraction of that made its way into the hands of underfunded tribal authorities, the notoriously horrendous medical, financial, and social services on reserves could see an influx of investment. Other tribal-owned enterprises include those in manufacturing and forestry: clearly, there is an immense private initiative among this group of Americans, but red tape is a significant barrier to further investment. A USMCA pledge to empower Indigenous economies would not only grow the $9 billion in regional spillover benefits produced by gaming operations but reduce overreliance on this industry and foster economic prosperity in often isolated, rural localities.
Amid rising tensions between President-elect Trump and the U.S.’s two USMCA partners, an explicitly bilateral Indigenous Chapter under the FTA may be an opportunity to test a hypothetical strategic cooperation agreement between the U.S. and Canada. The incoming Trump administration’s main grievances surrounding the treaty - border security and narcotics smuggling - are overwhelmingly concentrated on the Southern Border; take illegal migration, for instance, where in 2023, U.S. Customs encountered 7,000 illegal crossings on the northern border compared to hundreds of thousands on the southern. Economically, the USMCA has done little to spur Canadian trade with Mexico: Canada-Mexico total trade amounted to $49.7 billion in 2022 compared to a monumental $960 billion with the U.S. Under a potentially erratic Trump presidency 2.0, hinging Canada’s most vital trade relationship on a third actor with a far more controversial back-and-forth with the U.S. is strategically and fiscally irresponsible. Revising the USMCA to sufficiently account for these two different realities will take time - a situation which may be better suited to two separate bilateral approaches - and witnessing increased cooperation and trade between Native American tribes and First Nations would be a springboard for serious future talks.
In 2024, the biggest drag on further economic development among Native Americans and First Nations is outdated legislation restricting access to financial resources, notably loans at competitive rates and limiting true tribal land ownership. An Indigenous Chapter of the USMCA is imperative to addressing these issues, including pledges to adjust respective laws surrounding reservation land, streamline the property transaction process, and eliminate all duties on Indigenous-made goods crossing the border. This could also be the chance to test what a theoretical bilateral U.S.-Canada trade agreement could look like, a move that would recognize the unique issues that define U.S.-Mexican relations over an increasingly dysfunctional trilateral approach. Like the U.S. and Canada, Native Americans and First Nations have a place in a dynamic North America.