44th Parl. 1st Sess.
May 3, 2023
- 04:35:34 p.m.
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Thank you, Madam Chair.
Kwe Kwe. Tansi. Unusakut. Good day to you all.
Before I begin, I want to acknowledge our presence on the unceded territory of the Algonquin people. As well, I want to thank MP Schmale for the recent motion in the House to move things along. It's truly appreciated from this side of government.
Madam Chair and honourable committee members, thank you for inviting me today to provide an overview of Bill C-45, a legislation that would amend the First Nations Fiscal Management Act. The legislation, as you know, seeks to support indigenous self-determination and economic reconciliation.
The FNFMA supports communities in exercising jurisdiction of their financial management, property taxation and local revenues, and in financing infrastructure and economic developments. The proposed amendments to the legislation before the committee for study were co-developed by the first nations-led institutions established under the act: First Nations Tax Commission, First Nations Financial Management Board, and First Nations Finance Authority, in addition to the First Nations Infrastructure Institute's development board.
Since coming into force in 2006, the First Nations Fiscal Management Act has considerably increased the welfare as well as the economic and community development and self‑determination of over 350 participating first nations in the country.
As the leaders of the institutions told you on Monday, the amendments proposed in bill C‑45 seek to eliminate certain impediments to the economic development of indigenous communities with the goal of increasing the support and tools given to participating communities in the area of fiscal and infrastructure management.
The most important aspect of bill C‑45 is the fact that it creates a new entity, the First Nations Infrastructure Institute or FNII, which will help first nations and other interested indigenous groups, including Métis and Inuit partners, by providing them with the necessary tools, competencies and best practices to assert their jurisdiction in the area of infrastructure and asset management.
The Infrastructure Institute will help participating indigenous groups plan, acquire, own and manage infrastructure on their land.
You heard on Monday from Allan Claxton and Jason Calla of the first nations-led development board and technical working group for the First Nations Infrastructure Institute, or FNII. They have set up pilot projects across Canada that have helped to identify different service requirements to inform development of processes, standards and organizational designs for the FNII. It will, for example, support infrastructure services transfer to new indigenous organizations like the Atlantic First Nations Water Authority.
Another one of those pilot projects is with the Chippewas of Kettle and Stony Point First Nation in southern Ontario. Through this project, the first nation is developing a feasibility study, business case and procurement options for water and waste-water assets. They are also developing a financial model that incorporates First Nations Fiscal Management Act tools that can be used for cost recovery to support water and waste-water treatment projects and infrastructure projects, which are so crucial to economic development and to the well-being of their communities. The work is supporting Kettle and Stony Point's community vision for wealth creation, focusing on the creation of an economy for the community and its members to build housing, education and recreation spaces.
The establishment of the FNII and the success of Kettle and Stony Point are further supported by other amendments put forward in Bill C-45.
The First Nations Tax Commission's mandate would be modernized to better support first nations with their local revenue systems, to strengthen education and capacity supports, and to offer advice to self-governing first nations and other levels of government.
Meanwhile, the First Nations Financial Management Board, which helps first nations strengthen their local financial management regimes and borrow money, would see its mandate expanded so that they could offer services and certification standards to new clients, such as tribal councils and health or education authorities.
The last amendment I'd like to highlight would enhance data collection to enhance the institutions' capacity to support evidence-based planning and decision-making.
The amendments proposed in bill C‑45 are a tremendous opportunity for indigenous institutions to broaden and reinforce their mandates in order to reduce hurdles and improve access to capital and revenues, all the while supporting communities in their efforts to seek out and pursue economic development opportunities.
I look forward to answering your questions.
With that, I'm really looking forward to the questions from the committee.
Meegwetch. Thank you. Merci.
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- 04:41:59 p.m.
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This is a super important question.
I think you do have communities in Canada that have dedicated revenue streams that they would perhaps want to secure and pledge for a larger contribution of capital in order to build projects in their communities and perhaps outside their communities.
Just to be clear, it's not the ambit of this particular bill to address the borrowing pools that would be available for monetization or other forms of securitization. That said, the policies and tools do exist within the current confines to proceed on that basis; it is just a question of financial dedication of funds and appropriation to the proper borrowing pools to allow communities to use that type of leverage for their own development of their own communities.
Chris may have some complementary information with respect to that. This is work we need to continue with the stakeholders to move forward. We are supportive of it, but we need to have a serious conversation about the borrowing pools and the access to capital that underpin them.
MP Vidal, unless you have a question you want to ask, Chris may want to complement what I just said.
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- 04:44:55 p.m.
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Absolutely. I think we have to understand the premises and the conclusion, obviously, to try to state something that makes sense with respect to monetization. It's not the be-all and end-all, but certainly it is a lever that we're not using or having communities use to the full extent that they could, given the current model.
There are some communities that don't have the good fortune of having those revenue streams or sources of income that they could then leverage into larger forms of financing. The basic premise of what is being advanced is that the current grant model that the federal government puts forward is not enough to close the gap in the period of time within which we all aspire to close it. There are other levers that we also have to examine, whether that's within the Infrastructure Bank, better access to equity as opposed to simply getting debt, looking at the grant model or looking at how it serves communities, especially those in the most need.
But clearly—it's a long way to go to agree—I will agree with you on that point. We have to fully understand what particular stream of money it is that people are wishing to pledge against a larger set of a financial commitment. That is not entirely clear all the time in these discussions, but it is a very important one to have, because not all revenue streams can be subject to what these institutions are looking for.
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- 04:46:39 p.m.
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Absolutely. That will probably take more time than the time allotted.
I think we've had a nasty habit in government of picking winners and losers in indigenous communities. When you talk about economic reconciliation, often it has become an opportunity to ignore the elephant in the room, which often is the federal government not paying its long-overdue debts, the failure of which has caused the socio-economic gaps. Trying to plug that gap with new financial instruments without addressing the underlying causes of that socio-economic underdevelopment is, I think, a warning to us all because we've all been guilty of it.
My only point is that you can't walk into the most prosperous community in Canada and say this model needs to apply everywhere else in Canada. I think that is a warning to all of us when we try to use indigenous communities to augment our own political positions.
That was the long explanation.
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- 04:48:34 p.m.
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Thank you. It's an excellent question.
Even though it is relatively recent in the arc of legislation that deals with indigenous communities, it has been and still is seen as one that is very progressive: namely, in what we aspire to be as a country, which is in a position of equals with indigenous communities.
One of the first things you see when you talk about that position of equals is the reality of the socio-economic gaps that have put us and particularly the Government of Canada in a position of power. You talk about nationhood, and “nation to nation” presumes a relationship of equals. When that socio-economic relationship isn't the case, it creates the outcomes that we are seeing today.
A lot of these pieces of legislation were put forward by very progressive members who were indigenous and had a vision of how their own communities, in the circumstances of being subject to the Indian Act, could get out of some of the more onerous and heavy provisions of the act and take control over their assets and over the future of their peoples. They were put in place with that spirit in mind, whether those were views on how you would get revenue from your own ability to tax or on the availability of capital. We know that in our history indigenous communities have had less access to capital than non-indigenous communities.
All these instruments were put in place with that in mind, but things have changed quickly in the last 20 years. For example, there have been demands—and I think one of the key pieces is the infrastructure institute—to have a centre of excellence for how infrastructure is built in communities and run by indigenous peoples. Also, there are some changes to the legislation that are the result of advocacy over that period of time and, very recently, in particular when it comes to the 350-plus communities that are scheduled. Not all those communities availed themselves of every instrument under this suite of legislation, but it does represent a real consensus among indigenous communities that have signed on as to what is needed to reform it and get more access to capital through some of the legislative changes.
One of the important ones I would highlight, which we're still working on, is that we have a set of modern treaties and relationships and we need to make sure they have full access to all the levers that exist under these tools.
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- 04:52:12 p.m.
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It's an excellent question. I'll answer it partially and then defer to Chris.
We've seen that one of the biggest points of advocacy we hear from communities is the functional inability at times to have their bylaws enforced. In this piece of legislation, there is a suite of bylaws, for example, that will allow communities to have bylaws that have teeth and to therefore access the capital that is needed and have those relationships with communities that they don't have, or that their non-indigenous partners take for granted. That allows folks to move at the speed of business when it comes to some of the regulations when they are going to be fully in place.
Do you want to speak a bit about that, Chris?
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- 04:55:24 p.m.
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Given that participation isoptional, it will be up to those nations to decide. Historically, this type of legislation has stemmed from our relationship with first nations and not with the Inuit and the Métis.
The federal government has only recently recognized the Métis. That means that their access to capital is even more recent. The Métis have their own financial institutions and know what they want to do. If they want to be part of the system, we will welcome them.
As to the Inuit communities, I do not foresee any obstacles, apart from two or three challenges due to the necessary coordination between the legislation and modern treaties. There's nothing insurmountable there. Political factors could come into play. There is no legal obstacle stemming from the act as it stands.
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- 04:57:38 p.m.
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I can only presume that that is indeed the case, obviously, because the nations are the ones who do the work and who have highlighted the existing hurdles. Out of the 348 nations, only 77 have had access to capital, which translates to about $1.6 billion. That is the clear objective of the act as is stands.
My answer is therefore a simple yes.
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- 04:58:39 p.m.
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There are a large number of communities listed in the schedule, but not all of them are. Some communities see the act as colonial. Some communities have another vision of their self-determination, and others are experiencing difficulties that keep them from participating.
We will indeed have to keep up our efforts to be as inclusive as possible. I think the leaders of these organizations would be the first to say so.
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- 04:59:25 p.m.
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Not to my knowledge. But they might have been consulted through the band.
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- 05:00:01 p.m.
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It's mainly hurdles in terms of flexibility. The act still had a lot of impediments that gave more authority to the federal government. Now the communities will have more flexibility, more room to manoeuver in seeking access to capital.
More services will be provided. Institutions are taking a closer look at the consultations that we have done over the past few years and aim to make changes in keeping with the needs of communities who want better access to capital.
Bill C‑45 gives rise to tremendous hope. The communities have been waiting for it for a long time now, and I would be thrilled if you could speed up its passing. I know that the Senate will also have a say, but we would be most grateful.
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- 05:01:51 p.m.
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I apologize. I'm not getting the English.
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- 05:01:57 p.m.
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I hate to make you repeat it, but I wasn't getting anything.
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- 05:02:06 p.m.
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I can't tell the committee what to do, but I hope she has her time.
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- 05:03:42 p.m.
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Thank you, MP Idlout.
It's important to take a step back when we talk about this suite of legislation. It is only part of the conversation, for sure. Even the discussions on monetization are ones where certain communities would benefit from it and, clearly, others might not.
The way the government has dealt with infrastructure gaps in the past has been insufficient. When it has, it was typically through a grant model. When you're talking about the vast sums of money that are needed to close that infrastructure gap, the reasoning you have heard from a number of officials is that the grant model is not sufficient. I don't know that to be the case. When you look at the suite of tools that exist for indigenous communities to access capital, we certainly have to have an equal amount, if not more than what non-indigenous communities have, particularly given the Government of Canada's direct obligation to close those socio-economic gaps, and our existing fiduciary duties.
We have seen in the last couple of budgetary cycles vast amounts of infrastructure monies. In the case of your constituency, and the people you serve, MP Idlout, that work will transform some communities, but there is so much more to do, whether it's redoing the infrastructure in Iqaluit for the water, or whether it's getting the housing built. I spoke to the premier about that yesterday. These are all things that, if we relied solely on the institutions supported by this legislation, would never happen. You need direct support from the Government of Canada in making sure that actually gets done.
How does that get done? It gets done through consistent investments from the Government of Canada and making sure we are closing those gaps in the way the Inuit Nunangat policy tells us to behave, which is in co-development and in the spirit of self-determination. That requires constant co-operation with, in your case, NTI and the Government of Nunavut. We have good relationships with them, but we know the money is still needed out there. It will have to come through grant models. Leveraging the Infrastructure Bank is one aspect. Opening up some flexibility in terms of the availability of capital is another one. We have taken some small steps in that regard.
Given the seriousness and the importance of that gap, we have to have all options on the table. This will play its part, I think, and a very important part, but it is very much only one part of the conversation.
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- 05:07:25 p.m.
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I think there are probably a number of reasons, which I probably won't do justice to. I alluded to it a little when I answered MP Gill's question. There are some communities that don't feel they should be subject to this type of regulation from the Government of Canada, regardless of the potential benefits it offers. There are perhaps others that don't feel it's for them for a variety of reasons. There are probably others that are still not comfortable or have challenges with capacity in even getting to the table.
I think that is where Indigenous Services and Crown–Indigenous Relations play very important roles in working with communities. Those are often the stories of the have-nots. I have no particular answer to offer you, but as you can see in the number, it is not an exclusive club only for the haves. I've had conversations with leadership in these groups where they have engaged with communities that are not part of this or not scheduled, and they are eager to help and get out there.
For lack of a better word, I think there is a convincing job to do for those communities that are hesitant. I don't want to speak on their behalf, because I know that there are a variety of reasons. There is some work to do to gain more acceptance. I think because the previous legislation was seen, in that context, as heavy-handed, this will open the door to more of these conversations, but when you look at those that are scheduled and then those that have accessed capital, from 348 to 77, there is a gap there that is still to be addressed within the current group of scheduled ones as well.
I wouldn't say that for everyone in this group everything is rosy, because it isn't, but again, I do persist in thinking that this is an extremely important suite of legislation that is important to get passed and modernized, even though it's a piece of legislation that's only 20 or so years old.
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- 05:10:41 p.m.
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I guess it's a combination of things. Building the case has been an important aspect of this. In my capacity as the current indigenous services minister, I met with a number of the proponents. They made their cases convincingly.
In the context, and looking at the priorities we had over that period, I know that a lot of you guys would say that there was a whole heck of a lot of money going out there during that time, but it was to deal with a once-in-a-lifetime, let's hope, pandemic. It is always an issue of priorities. It was very hard, actually, to get infrastructure builds done with communities shut down. That is just a fact. It is particularly a tribute to a lot of the communities that lifted their boil water advisories during that period of time in terms of the efforts that were put in to get stuff done.
Yes, there are priorities. Yes, there is getting the business case across the line and prioritizing that as part of the budgets in question. When it comes to the infrastructure institute and these institutions, there is a general perception that they are west coast-led, and I think—
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- 05:11:59 p.m.
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That's fine. I appreciate that. I did want to give you a suite of answers that were helpful.
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- 05:13:18 p.m.
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When we talk about the agreement with Grassy Narrows, it was really important to sign it and commit to building a mercury treatment facility—not just a mercury treatment facility, but a new water plant. There was over $80 million put on the table to build and operate the facility, without counting the new water plant. That's a lot of money. It took a pretty innovative approach with the community at the time to get that across the finish line.
What we've seen clearly—without speaking of the discussions that are ongoing, because those are discussions being led by Minister Hajdu—is that there has been an increase in the cost of building materials. The process that was put in place is one—
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- 05:14:16 p.m.
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Yes, there was a 12- to 18-month window once the agreement was signed in which there were feasibility studies and full costing to be done. I think we're at a point now where we've seen cost increases. That is something on which I'll defer to Minister Hajdu's good leadership to get across the finish line.
The point to take away from this is that we're committing to making sure that the folks at Grassy Narrows get the justice they deserve.
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