A new report suggests First Nations in Canada could add as much as $1 billion to their collective economy if they focused on buying supplies from Indigenous companies.

The report, released Thursday from eSupply Canada, found 396 First Nations in Canada spent $504 million on materials and supplies in 2023, but “the bulk” of spending went to non-Indigenous businesses, causing “economic leakage.”

Economic leakage rates vary by community, but the report suggests it ranges from 25 per cent in West Nipissing, Ont. to more than 77 per cent among First Nations in Saskatchewan.

"When I served as an elected member of council at my First Nation, I saw millions of dollars leave the community to big box retailers," Steven Vanloffeld, founder and CEO of eSupply Canada, said in a news release on Thursday.

"The 'Buy Indigenous' strategy aims to recapture that loss of capital by empowering First Nations to source their (materials and supplies) from fellow community members, enabling their territory to generate and maintain income within the community."

Of the $504 million spent on materials and supplies annually, the report suggests a shift to “Buy Indigenous” would add between $750 million and $1 billion to the First Nations economy due to a “multiplier effect.”

“When the additional First Nation revenue is re-spent on other goods and services produced by First Nations, total income increases by the initial amount plus the re-spent amount,” the report states.

“By diverting spending away from external suppliers to First Nations suppliers, First Nations can increase own-source revenue, strengthen their economies, and build internal capacity.”

The report notes that doing so is easier said than done, however, as many First Nations face the “absence of business infrastructure, limited property rights, and systemic barriers to wealth accumulation” that force communities to look outside for goods.

“Effectively recapturing lost revenue involves examining the areas and quantifying the amount of leakage, identifying specific goods and services contributing to the outflow, and implementing local business strategies to provide those services within the First Nation,” the report states.


eSupply Canada analyzed total revenue, total expenditure, and total spending on M&S by communities across nine regions for which there are adequate data. The data were extracted from the publicly available First Nations Profiles on the Indigenous Services Canada website. Dollar values are adjusted to 2023$ using the Consumer Price Index. Our sample of 396 First Nations, or just under 63 per cent of all First Nations, is the largest sample available. Every First Nation for which information of M&S expenditure is available has been included in the sample.