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Context: Subject Matter of Bill C-45, An Act to amend the First Nations Fiscal Management Act (INAN) - May/1/23

Mr. Gary Vidal (Desnethé—Missinippi—Churchill River, CPC)

03:52:17 p.m.
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Thank you, Chair. Thank you, everybody, for being here today and for the work that you've been doing with your own respective organizations to move this legislation forward. I think everybody agrees that there are very good components to this legislation and that it's going to make a big difference in the lives of people across the country. Mr. Daniels, I want to start with you for a minute. You and I started having a conversation about the concept of monetization way back in 2021. I know that seems like forever ago with COVID and all that stuff in between, but we started the conversation back in 2021. We talked about all kinds of things, like how the multiplier effect of leveraging could create upfront investments to really work at closing the infrastructure gap. We talked about the fact that inflation didn't allow the increase in capital grants that are provided at, say, a 2% per year increase to keep up with inflation. We talked about own-source revenue definitions and how the expansion of those could actually lead to more opportunity to leverage some of those revenues to attack that infrastructure deficit. Today, in one of the presentations, it was already mentioned about the report on barriers to end indigenous economic development and how this committee unanimously endorsed the idea of testing this concept out with a pilot project of some kind. Could you expand on that just a little bit? Just take a couple of minutes and talk about how this concept of monetization is really a huge opportunity to close that infrastructure gap in indigenous communities.

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Mr. Ernie Daniels

03:54:01 p.m.
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Thank you for that question, Mr. Vidal. We really believe that the monetization of government transfers, be it a new source of funding or an existing source of funding, will really be a big game-changer when it comes to closing this infrastructure gap. I actually became aware of a report that was done just recently by AFN and CIRNAC together that indicated this infrastructure gap is at $349.2 billion. That's a staggering number. There's no way this government, which is funding infrastructure right now, will be able to do that in the next few years without an innovative solution. I really believe that the concept of leveraging means we can build more today than tomorrow with tomorrow's inflated dollars. Inflation does really eat away at funding amounts that are static. In the recent budget we requested a budget ask of $200 million to start the monetization project, and $200 million annually over a 20-year period would create in excess of 12,000 homes, for sure. That makes a big difference on our reserves. Also, on replacing diesel generators, the idea of monetizing existing expenditures on diesel would almost be cost-neutral to replacing the diesel generators that exist in our communities right now. Those are a few examples. We didn't get the budget ask. We will continue to do that. I'm sure at some point in time that monetization will happen, but I just don't know when. The concept is sound. It works. Every other government does that.

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Mr. Gary Vidal

03:56:21 p.m.
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I'm sorry, but I don't mean to cut you off. I'm going to run out of time, and I want to sneak one more question in for you, Mr. Daniels. I'll come back to the other members in a later round. In those conversations you and I had, you also talked to me about the fact that in the regulations, the Minister of Indigenous Services could have undertaken a pilot project without a change. We didn't need this legislation for that to happen—the provision in regulations was already there. I know this conversation has been happening since at least 2020. It's identified actually in the departmental plans of CIRNAC starting in 2020. It's there in 2021, and again in 2022. We've been talking about this for three years, and now it's finally coming to fruition here, which is good news—don't get me wrong. Can you maybe speak to how the lost time of three years is impacting the ability to close that gap, based on the rise of inflation and some of those challenges we face? If we had started three years ago, we could have built lots more homes, if I'm understanding your approach here. Would you agree?

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Mr. Ernie Daniels

03:57:23 p.m.
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Yes, I would agree with that. The concept of time and money is that it only goes one way. The value of your dollar goes down every single year.

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Mr. Gary Vidal

03:57:35 p.m.
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Very specifically, what kinds of challenges does that create for the communities, for the people on the ground? Can you speak to the challenge that this lost opportunity has created in the last several years?

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Mr. Ernie Daniels

03:57:50 p.m.
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The challenge is that the social problems still exist. Overcrowding in homes creates a multitude of problems. The social problems are still there and will still continue. The population growth in our communities is growing faster than the Canadian average, so that problem is not going to go away. We need better air ventilation in our schools for our schoolkids. We need proper water, more water, rather than all the boil advisory notices we get every year. It's those types of issues that will be dealt with. It will create employment. It will create an economic impact that I strongly believe Canada as a whole will benefit from, not only the first nations.

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Mr. Michael McLeod

03:59:42 p.m.
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Thank you to all the presenters for being here and for the work they've done on this issue. My question is for Ernie Daniels. Ernie and I go way back. He's from the Northwest Territories. I wanted to hear his view on how important the FNFMA, in this proposed legislation, is to reconciliation. How does it fit with the whole concept of economic reconciliation?

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Mr. Ernie Daniels

03:59:42 p.m.
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Thank you for that question. It's a really good question. I think it fits, because all the amendments that are part of Bill C-45 have a direct impact on first nations communities, especially services to communities. We would hope that infrastructure, especially with the First Nations Infrastructure Institute coming on, will help communities to plan and build the proper infrastructure they need and with the costs associated with that. That definitely will be a benefit, for sure. The more infrastructure we can get into our communities, like health services and health and community centres, those things will benefit our communities. In terms of reconciliation, I think it's empowering our communities to do things on their own terms and on their own time. I believe that's the whole benefit of the FNFA. It's a voluntary process as well. I strongly believe that when first nations are in control of when they do their assets, when they do their economic development and when they choose to do certain things, such as developing a property tax system, all those things are, to me, true reconciliation. Thank you.

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Mr. Michael McLeod

04:01:25 p.m.
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Earlier, I saw the work that happened on the Salt River First Nation reserve and the beautiful building there. Every community in the Northwest Territories and every nation wants one now. It's modern and really nice. Of course, the reality is that we don't have a reserve in every community. We have only two small reserves in the Northwest Territories. How do we work this piece of legislation or the system to include modern treaty holders and self-governing nations who are looking at significant investment in the area of infrastructure over the next while?

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Mr. Ernie Daniels

04:02:13 p.m.
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That's a good question again. There was availability in part of the existing legislation to develop a regulation for self-governing first nations. This work is actually going on right now. I think we're getting closer to having that completed. That regulation, I believe, is in section 141. It's really close to being finalized. The other thing, especially for the Northwest Territories, is that these sets of amendments right now actually are looking at expanding eligibility. This would be for not-for-profit organizations that are providing services to first nations. Up in the Northwest Territories, we do have a few not-for-profit development corporations that are doing economic work in our communities. I could see that the amendments and the regulations that would need to be done shortly afterwards would do that. As it exists right now, a number of communities in the Northwest Territories have actually expressed interest in the act and the work we do under the act. As a matter of fact, this morning I have an invitation to go and speak in the Northwest Territories about how more communities in the Northwest Territories and more first nation bands can get involved in becoming part of this work under the FMA and actually end up financing different projects. I think there is a benefit. It's happening slowly. Hopefully, these sets of amendments will lead to more involvement and more economic activity from the first nations in the Northwest Territories.

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Mr. Michael McLeod

04:04:21 p.m.
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I have one last question. You've stated that this is optional legislation. We both know that there are some parts of the country that still can't take part, which is being worked on. Could you point to some reasons that first nations in the south who can opt in are choosing not to opt in? Would there be any reasons that stand out?

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Mr. Ernie Daniels

04:04:52 p.m.
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That's a good question. Believe it or not, in this day and age, with this legislation getting royal assent in 2005, there are still some first nations that are not aware of what we do under the act. Other than that, there are first nations that feel they don't have the revenues or the wherewithal to join this act. Once they find out, and once they see that other similar first nations have actually gone in and have actually borrowed, the interest happens. A few of them, some nations, like to work on their own. Some are just learning about it, and some are actually seeing the benefits of joining and want to join now. It's going to take some time. We have 342 scheduled to the act, which is a high number. It's really a good number in itself. If you grouped 342 municipalities together to take advantage of an act like this, they would gladly do so. I think we would like to see more first nations join, of course, but from my knowledge, from what I hear, those are some of the reasons why.

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Mrs. Marilène Gill (Manicouagan, BQ)

04:06:32 p.m.
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Thank you, Mr. Chair. I'd also like to thank all the witnesses who are with us today. We're having very interesting discussions on a number of fronts. Many of those present worked on the early version of Bill C‑45. I invite them to share their comments and answers with us, if they wish. Mr. Daniels, you talked about one of the major amendments to the First Nations Fiscal Management Act, the expansion of the meaning of “borrowing member”. I'd like to know why that meaning was limited in the first place. Was it simply because the act was new? Also, while Bill C‑45 will broaden that meaning, do you think it's broad enough or could it be broadened even further?

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Mr. Ernie Daniels

04:07:49 p.m.
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I believe there will be an opportunity to open up more to other indigenous groups, such as Inuit and Métis. I think that's the next logical step in this. Right now, I do believe that getting the not-for-profit organizations that are providing services to communities will definitely be beneficial. For example, in B.C., the First Nations Health Authority would like to undertake an infrastructure program. They may be already doing that, but there's a need for health centres all across the province. I can see that being the same for other provinces in the country as well. In some cases, another possible group that could access, or be eligible later on, would be first nations collaborating together on a single project, operating from a not-for-profit basis, of course. I'd like to see that myself. I think that the first nation groups were the first groups that actually started working on legislation like this. It started in B.C., and Harold or Manny could probably answer that a bit better than I can because I came in later. I came in in 2011, and they were there from the start.

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Mrs. Marilène Gill

04:09:34 p.m.
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Indeed, this includes Inuit and possibly Métis. Similarly, why was no consideration given to including other indigenous groups in the definition of “borrowing member”? Perhaps they were, but I wasn't involved in the initial discussions. Why is this definition not further broadened through Bill C‑45?

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Mr. Ernie Daniels

04:10:07 p.m.
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That's very good question again. I think that when we start amendments, it takes a lot of time and effort to get things moving forward. We would like to see the eligibility expanded to Inuit and Métis, but we have to work with our counterparts at the federal government, which is CIRNAC in this case. Sometimes amendments go forward that they want to support. Also, they could have reasons why we're not working on Métis and Inuit right now. Like I say, I am positive that will be forthcoming. I'm sure about that. I will leave my comments at that.

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Mrs. Marilène Gill

04:11:06 p.m.
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I know we're running out of time, so this may be my last question. It may overlap with previous questions. I'd like to know whether expanding the definition of “borrowing member” would put pressure on the First Nations Finance Authority itself, since it could force it to expand its service delivery. At the same time, it obviously increases the possibility of different groups and different nations borrowing funds. Would that put pressure on the authority itself, or will you receive additional funding to help you in your mission? Furthermore, could there be increased competition so that the pie would be shared among more people rather than among the members of the same group, as was the case before? This isn't an opinion; I'm really asking in good faith.

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Mr. Ernie Daniels

04:12:21 p.m.
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Thank you for that question. First of all, the act is a voluntary act. Those organizations would request to work under the act. With regard to competition or more lending groups, I would imagine you're talking about sharing the pie. I always go back to letting the choice be with the first nations or the entity that's borrowing to see what type of financing would be most suitable for them. I think there is a lot to go around. With first nations, we mentioned a $349.2-billion infrastructure gap. I can imagine that gap is pretty big for Inuit and Métis as well. I was at a conference a few weeks ago, and I heard that the Inuit infrastructure gap is about $60 billion.

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Ms. Lori Idlout (Nunavut, NDP)

04:13:52 p.m.
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[Member spoke in Inuktitut, interpreted as follows:] Thank you, Mr. Chair. Thank you to all of the witnesses for your testimonies. You testimonies are very important. First of all, to each of the witnesses, can you share your thoughts on Bill C-45? It is simultaneously being created and the federal government is codeveloping this act with you. I'd like to understand a bit more about the process. Was it good for you? Was it satisfactory for you? The other question I would like to ask you is whether you would want to make further amendments to the content of the Bill C-45. Each of you can respond.

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The Chair (Mrs. Jenica Atwin (Fredericton, Lib.))

04:15:04 p.m.
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That's for whomever would like to start.

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