From Raw Materials to Production Lines: Indigenous Manufacturing in Canada

The decline of the free-trade consensus has wrought upheaval in the global economy. Tariffs have imposed significant damage to markets across the globe and has left world leaders scrambling to restructure their economies with the aim of minimizing the disruption. Not everything has been unfavourable, however.

One industry that has enjoyed talks of resurgence is manufacturing. It remains a pivotal yet often under-celebrated arena within Canada and in particular for the Indigenous business landscape. For Indigenous entrepreneurs seeking to scale operations, develop supply-chains and participate in asset-based industrial value creation, manufacturing offers both meaningful opportunity and unique barriers.

The Scale and Scope of Indigenous Manufacturing

The manufacturing sector accounted for about 21% of Indigenous-owned businesses in 2019 according to the Canadian Council for Aboriginal Business (CCAB). Meanwhile, data from Statistics Canada shows that in 2020 there were about 39,290 jobs held by Indigenous people in the manufacturing sector. These figures signal that manufacturing is a meaningful part of the Indigenous economic profile, not only in services but in goods-production, fabrication, processing and supply-chain roles, among others.

From Asset Ownership to Export Potential

Manufacturing offers distinct advantages for Indigenous enterprises. It allows for ownership of assets and infrastructure, enabling a shift beyond service-based models into equipment, production lines, inventory, and exportable goods.

Through supply-chain integration, Indigenous manufacturers can connect with larger projects in energy, mining, and infrastructure as subcontractors, fabricators, or local production nodes. Manufacturing also promotes regional employment and capacity building, as plants located in or near Indigenous communities can generate local jobs, apprenticeships, and economic multipliers.

Moreover, the sector presents export potential. While Indigenous firms currently export at lower rates than non-Indigenous firms, manufacturing provides a tangible path toward goods-based exports. According to a joint report by the CCAB and Global Affairs Canada, Indigenous-owned SMEs exported at a rate of 7.2% in 2020, compared to 12.1% for all Canadian SMEs.

Overcoming Structural Barriers to Growth

Despite this promise, several structural constraints limit the growth of Indigenous manufacturing. The sector’s capital-intensive nature poses a challenge, as manufacturing typically requires substantial upfront investments in equipment, facilities, specialized labour, and certification, among other things.

Moreover, many Indigenous businesses rely primarily on personal savings rather than bank loans for start-up capital; moreover, accessing capital is a well-document barrier for Indigenous entrepreneurs. Further, automation raises uncertainty about the prospects of manufacturing for gainful employment in Indigenous communities. About one-third of jobs held by Indigenous workers are in industries highly susceptible to automation, manufacturing included.

What’s more, logistical barriers, particularly in remote or northern communities, lead to higher freight, utility, and connectivity costs, which reduce competitiveness. Economies of scale play an important role in mass-manufacturing, the structural isolation of Indigenous communities presents a significant challenge to this end.

Yet, these challenges need not overshadow the opportunity. As Canada rethinks its industrial base and supply chains in a shifting global economy, Indigenous manufacturing stands as both a symbol and a strategy for inclusive growth. With targeted investment, partnerships, and supportive policy frameworks, Indigenous manufacturers can help anchor regional economies and contribute to a more resilient and equitable industrial future for the country.