Evidence of meeting #30 for Aboriginal Affairs and Northern Development in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was first.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

3:35 p.m.

Conservative

The Chair Chris Warkentin

Colleagues, I call this 30th meeting of the Standing Committee on Aboriginal Affairs and Northern Development to order.

Today we have the privilege of having before us witnesses from the National Aboriginal Economic Development Board, chaired by Chief Louie.

Thank you so much for coming today. With you are the co-chair and a member. Thank you for being here and joining us. We certainly appreciate it.

I'm certain, Chief, you'll make more in-depth introductions when we turn it over to you. Today we'll hear your opening statement. You've been to committees before and know generally how this works. We'll follow that with questioning.

Colleagues, we want to complete the first part of our meeting by at least five o'clock because there are some things we need to deal with before this weekend. Everyone can make plans to stay here past our time with the witnesses because there's some committee business we need to take care of.

We'll turn it over to you, Chief. We'll have you make your opening statement, and then we'll have some questions for you.

3:35 p.m.

Chief Clarence Louie Chairman, National Aboriginal Economic Development Board

I want to thank you for having us here. We look forward to the discussion and questions after my opening comments.

My name is Clarence Louie. I am chief of the Osoyoos Indian Band in southern Okanagan, British Columbia. Some of you have been to our resort. I thank you for coming there.

I am appearing before this group today as chairperson of the National Aboriginal Economic Development Board. The NAEDB is a federal advisory board created in 1990 to provide strategic policy and program advice to the federal government on aboriginal economic development. The board brings together first nations, Inuit, and Métis people from across the country to advise the federal government on ways to help increase the economic participation of aboriginal men and women in the Canadian economy.

The NAEDB plays a central role in the development of federal policies and programs that increase the economic participation of aboriginal people in this country, including in the areas of job creation, business development, and land management. The board played a key role in the development of the federal framework for aboriginal economic development and continues to advise the federal government on its implementation across the country.

Appearing with me today is Chief Sharon Stinson Henry of Rama First Nation in southern Ontario. Unfortunately our colleague, Chief Terrance Paul of Membertou First Nation, was unable to join us today. Dawn Madahbee, co-chair, is also with me today. We are pleased to provide some information that may assist this group in its study of sustainable economic development and land use.

Today my colleagues and I would like to offer the NAEDB’s views on land and environmental management on reserve. We will also offer some specific recommendations, based on our own experiences as leaders, to improve current federal policies and practices.

In Canada, as in most of the developed world, a secure land base is the foundation of economic development. Land provides equity to allow access to financing for investment and entrepreneurship, provides a revenue base to promote community development, and is a critical input for the development of business opportunities in a range of sectors, including natural resource extraction. The World Bank has noted that real property represents between one-half and three-quarters of wealth in most economies. When governed through effective management and regulatory regimes, land is a primary driver of economic growth.

In Indian country, the story is quite different. On 96% of reserves in Canada, the Indian Act regulates nearly every aspect of community life. It defines who is an Indian and regulates band membership and government, taxation, elections, schooling, title, lands and resources, and money management, among other matters. Its land management provisions play a major role in setting the conditions for business development and on-reserve investment.

Let me provide three examples of the challenges to developing strong and vibrant economies on reserve that derive from operating under the reserve system.

Section 89 of the Indian Act, by explicitly prohibiting the mortgaging of property on reserve, removes one of the key drivers of small business development.

Federal legislation such as the Species at Risk Act sets a different legislative and regulatory environment on reserve than exists on provincial land, increasing the complexity and risk for investors.

Under the Indian Act, land management processes involving common activities such as leasing and registration are expensive, complex, and often extremely slow. This presents significant challenges for large-scale, land-based economic activity, such as major resource development.

There are many more examples like these. Taken together, the negative effects of the Indian Act on land management and economic development result in time-consuming processes. Decisions made on reserve take too long—simple transactions in a normal business climate take up to five times longer in an on-reserve setting—and they require too many approvals, delay investment, and are preventing economic activity entirely.

There is the high cost of doing business. The cost of doing business on-reserve is up to six times more than off-reserve, creating a strong disincentive for investment.

There's an absence of market forces. The Indian Act regime often requires federal involvement in a community’s economic development decisions, interfering with business activity and creating uncertainty.

There are inappropriate and outdated rules. Regulations under the Indian Act are cumbersome and complex and have not kept pace with the rapid pace of change in the broader economy.

In 2012 the NAEDB will be releasing the aboriginal economic development benchmark report, the first comprehensive effort to assemble indicators to establish benchmarks for the social and economic well-being of first nation, Inuit, and Métis in Canada.

The report reveals some of the staggering effects of the Indian Act on the economic outcomes of first nations.

First, despite an increase in first nations land used for economic development and the enactment of new legislative tools to overcome the deficiencies of the Indian Act, 80% of the 27,000 aboriginal businesses across the country continue to operate off reserve.

Second, 68% of first nations still have little or no land and resource management responsibility or capacity.

Third, while on-reserve unemployment was 23% in 2006, non-aboriginal Canadians experienced unemployment rates of 6%.

Clearly, first nations that manage their own land under the Indian Act are at a serious disadvantage.

In terms of case studies, the members of our board appearing before you today represent two first nations that have achieved relatively high degrees of economic success, despite operating under the reserve system. Both of us, as well as Chief Paul of Membertou, are completing case studies to help people better understand the impact of legislative and regulatory barriers on economic development. Each case study provides an in-depth analysis of the costs and delays that are created from operating under the existing federal land management system. We would be pleased to share them with the committee for its consideration when they are complete.

These case studies reveal a number of things.

First, the Indian Act makes economic development, and just about any other land-related decision, extremely expensive and time-consuming. Dealing with third parties such as lenders or business partners can also be challenging, owing to the lack of final decision-making authority and certainty.

Second, land transactions under the Indian Act require various approvals of decisions on reserve lands from any or all of Aboriginal Affairs and Northern Development Canada, the Department of Justice, and Environment Canada. Involving the federal government to this degree, which operates far away from the realities of the first nations and is generally risk-averse, compromises our ability to move at the speed of business.

Finally, the Indian land registry is inaccurate, lacks clear standards, and is unable to guarantee certainty of land title for landholders. This is compounded by the fact that the Indian land registry does not have formal regulations that govern the system, that registering certain transactions can take anywhere from months to years, and that the system allows for multiple descriptions and ownerships to be registered against a single property.

Chief Sharon Stinson Henry of Rama First Nation will now speak to her community's case study.

3:40 p.m.

Chief Sharon Stinson Henry Member, National Aboriginal Economic Development Board

Thank you.

Thank you, Mr. Chairman and committee members, for hearing our presentations today. As you've heard, my name is Sharon Stinson Henry. I'm the chief of the Chippewas of Rama First Nation, located in central Ontario. Gchi miigwech for having us here.

It is an honour to appear before the committee, together with Chief Louie, as a member of the National Aboriginal Economic Development Board. Our board chair, Chief Louie, has outlined to you the purpose of this advisory board, so I will move right to my segment of the presentation.

The challenges for first nations in pursuing economic development are well documented and have been the subject of various reports and studies. The barriers to sustainable economic development for first nations remain, despite reports that have clearly identified the barriers, along with recommendations to mitigate or eliminate them.

For example, in November 2003 the Auditor General of Canada issued a report to the House of Commons on economic development of first nations communities' institutional arrangements. The Auditor General reported that first nations continued to face barriers that increased their cost of doing business.

The following barriers were noted in the report: access to natural resources is restricted, which limits first nations opportunities; first nations have difficulty accessing capital necessary for economic development; keeping track of the requirements of different federal government programs is a substantial burden on first nations; federal officials, when reviewing projects, are reluctant to take risks, and in particular, project approval processes do not move at the speed of business; program criteria are difficult to adapt to large-scale, complex economic development projects; Indian Act processes are burdensome; and resources are lacking to build institutional arrangements in a timely way, institutional arrangements being mainly formal and informal organizations and functions that structure economic interaction.

The report noted that the approval times for projects on first nations land were significantly longer than off-reserve development. It cited an example from the study; in this case a project took well over twice as long to complete on reserve compared to development with a neighbouring, non-aboriginal community.

Board chair Chief Louie has addressed the topic of the First Nations Land Management Act in his remarks very thoroughly; I would add, however, that while there are great opportunities available under FNLMA for first nations to take back rights and responsibilities regarding their land base, the act is not sufficiently resourced.

We have heard from first nations leaders that once they have entered into the First Nations Land Management Act, the federal government does not provide adequate resources to support capacity-building at the first nation level to take advantage of opportunities.

Furthermore, the act should provide first nations with full control over lands and access. For example, the act should ensure that first nations have the ability to charge gate access fees or tolls, etc., for passing over and being on lands that are owned by a first nation.

In terms of case studies, as Chief Louie has noted, the National Aboriginal Economic Development Board has undertaken three first nation case studies. Rama First Nation, my nation, is providing one of these case studies, along with Membertou and the Osoyoos Indian Band.

In Rama's study we are considering the additional costs of first nations economic development through an examination of two key Rama projects. The first one is the development of Casino Rama, Ontario's most successful commercial casino, which is located in Rama First Nation. The second one is our joint venture with other first nation partners in the St. Eugene Golf Resort and Casino of the Rockies, located on the St. Mary's reserve just outside of Cranbook, British Columbia.

Rama's case study has noted several barriers that are inherent in the Indian Act, which I will touch on briefly.

With respect, Mr. Chairman and committee members, the Indian Act is an outdated piece of colonial legislation that does not meet the needs of first nations. First nations do not have an ability to move swiftly in developing their lands as a result of the restrictions that arise under the Indian Act and the red tape that comes with them.

This often renders economic development out of reach for first nations in Canada. One of the most problematic barriers in the Indian Act is the requirement that first nations must first surrender or designate lands before they can be developed. This requirement to give our interests in land over to the federal government in order to develop them is a major problem.

For example, Rama First Nation's development of the highly successful Casino Rama was slowed by the Indian Act requirements to surrender the lands or, more specifically, to “designate” them, which included a requirement to undertake a community referendum. This lengthy and complex process added time and cost to our transaction.

Rama experienced similar challenges because of the Indian Act restrictions on land management in the St. Eugene Golf Resort and casino project. In that project the Indian Act requirements for designations increased the complexity of the transaction because we weren't dealing with the acquisition of fee simple interests in real property, but rather a series of sub-leasehold interests that were ultimately subject to the land leases granted by INAC.

The St. Eugene's leasehold structure also impacted the process by which Rama took security for our additional financial contributions, because Indian Affairs needed to consent to the mortgages that were granted. First nations cannot use their lands as collateral against loans to support economic development, and the federal government does not provide first nations with adequate financial support for economic development.

Rama has felt the impact of these provisions in our economic development ventures. We have noticed that the banks are more concerned about adequate cash flows than assets, when assets are located on first nation reserves. This has resulted in increased costs that for many other first nations would likely pose an insurmountable barrier.

With regard to environmental management agreements, we believe that respect for the environment is central to effective first nations governance. Sustainable economic development for first nations depends on our access to and control over land and natural resources and on a clean and healthy environment.

However, there are few federal regulations in effect to protect the environment on reserves. As a result, residents on first nations reserves do not have the same environmental protection that other Canadians do. The federal government needs to properly resource first nations to deal with our environmental management needs, including providing appropriate financial, technical, and other resources.

With regard to additions to reserves, the additions to reserves process, or ATR, is complicated, time-consuming, and very expensive. As Chief Louie noted in his recent remarks to a Senate committee, ATR is federal policy, not law. This needs to be changed, as Chief Louie noted. The ATR should be replaced with legislation that must be based on the assumption that Canada actually wants to add lands to reserves because it is in the long-term interest of first nations, Canada, and indeed the provinces and municipalities to do so. Not only does the first nation have to deal with the federal government in the ATR process, but we must also engage with local municipalities, which can create additional roadblocks. We need to have processes in place to help us resolve disputes between first nations and our municipal stakeholders.

Our overall recommendations on first nation land management issues are the federal government needs to focus on how it can support first nations in developing their own lands and resources, as opposed to being a gatekeeper that stands in the way of opportunity. We must be creative to find solutions; for example, the crown should provide sovereign guarantees to support development. The federal government must give rights and responsibilities to manage first nation land issues over to first nation leaders and must properly resource first nations to grow their capacity to be effective land managers.

Economic development is not just about large-scale development by the first nation; it is also about supporting our first nation entrepreneurs in pursuing their goals.

There is ministerial control over the lives of first nation members under the Indian Act from cradle to grave. This needs to change. The Indian Act barriers to individuals developing their land on-reserve are similar to barriers for first nation development, and these must be addressed.

Lack of natural resources revenue sharing is a critical issue for first nations in economic development. Resource revenue sharing with first nations must be fair and appropriate. There are first nations living in poverty while multinational corporations benefit from their lands.

Finally, the process to resolve land claims, be they comprehensive claims or specific claims, is too slow. There is much work to be done to eliminate these barriers.

First nations in Canada have much to offer as we build a stronger nation. Together we can do this. However, we require respect and support. Let us walk together to make Canada stronger and more competitive as we move forward into the 21st century.

Again, gchi miigwech. Thank you for the opportunity to address you today.

3:55 p.m.

Chairman, National Aboriginal Economic Development Board

Chief Clarence Louie

Thank you, Mr. Chair.

Can I have Dawn speak to the benchmarking report?

3:55 p.m.

Conservative

The Chair Chris Warkentin

I'm just going to jump in here.

Colleagues, we have significantly exceeded the time we usually allocate. I think it's probably our desire to continue to hear the testimony. I want to get your approval, and then we'll continue. I think your testimony today is more important than our questions, because you'll answer many of our questions before we ask them.

Thanks for the testimony. Sorry for the interruption.

3:55 p.m.

Chairman, National Aboriginal Economic Development Board

3:55 p.m.

Dawn Madahbee Co-Chair, National Aboriginal Economic Development Board

Thank you very much.

I'm very honoured to be able to have this opportunity to speak about aboriginal economic development in Canada and the work that we've been doing as a board to provide recommendations to the federal government.

I work with an aboriginal financial institution that services 27 first nations in northeastern Ontario. I've been doing this for the past 24 years, so I have a pretty good idea as to the challenges and the opportunities faced by aboriginal people throughout our region.

We work with all three heritage groups: first nations, Métis, and Inuit. We have an Inuit business project in our area of northeastern Ontario.

I'd like to describe the work we're doing as a board. Chief Louie referenced the benchmarking report we've been working on. In that report we wanted to take a picture of where aboriginal economic development is today. Through that report we're hoping to measure the progress over time and determine where the gaps are in aboriginal economic development so that we can better advise the federal government on how to address those gaps.

Our work demonstrates there has been progress in the past few years. I was speaking with my colleagues here this morning about the fact that even 10 years ago we wouldn't have had the Spirit Ridge Resort in Osoyoos. We didn't have the conference centre in Membertou First Nation. A lot of the other projects that we see, like the developments in the far north 10 years ago, are all recent. This is how quick the progress has been, but there's still a long way to go.

This report also shows that while there has been progress, aboriginal people are still at the bottom of the social ladder. We still need the programming and support that can help aboriginal people take advantage of the opportunities that are out there in terms of major resource development, in terms of developing the land bases they have right now, and to take advantage of the market opportunities that do exist. Those programs are really critical to our people across Canada.

There's a strong willingness by our people not to rely on government programming. As the communities progress, I know there is less reliance on the programs out there, but help through economic development programming is very critical to our people.

My family and I grew up with social supports. As the oldest of nine in my family, I'm happy to say we all completed post-secondary education and now have jobs and contribute to the community. I think this is an example we can take forward if we focus on economic development and education.

The benchmarking report looks at that. As we measure it over time, I think it's going to tell us where we need to go and what we need to do. Right now it does show that progress is being made, but we still need the supports of the federal government's economic development programming.

As we go forward, there are going to be a lot of changes in the next 10 to 15 years based on those programs. I feel at least half the first nations in Canada would benefit from the continuation of these kinds of supports, but we do need additional supports.

One of the things that our board is looking at is doing some work on major resource development and best practices. We think that will be important. We've already done a lot of work on recommendations on financing first nations infrastructure. There's a wealth of knowledge around our board table that brings these recommendations forward for consideration, and we'd be happy to share those with you. On our website we'll be posting a lot of the work we've done.

We know there is still a need for that support. We talked today about resource development; corporate Canada is now saying they'll give us some up-front money to start building that capacity, but we still need somebody to negotiate that up-front money for the kind of capacity we need to develop and help us communicate that. Just that start is still needed. I think that as we go forward, we'll be able to give you more information on that.

As an aboriginal financial institution in Canada, I'm proud to say we're one of the success stories of the whole network across Canada in helping develop the almost 30,000 aboriginal businesses that exist in Canada. As we go forward, I'm hoping that the role of the aboriginal financial institutions will grow in helping finance first nation infrastructure and build that capacity in the major resource development we need to progress and take us forward.

That's where I'll leave my comments for now, to leave some time for questions.

Thank you very much for this opportunity.

4 p.m.

Conservative

The Chair Chris Warkentin

Thank you.

4 p.m.

Chairman, National Aboriginal Economic Development Board

Chief Clarence Louie

Just to understand the process here, do we have until five o'clock?

4 p.m.

Conservative

The Chair Chris Warkentin

Yes, we do. We certainly want to hear you at least complete your remarks. I think you have some additional comments to make.

4 p.m.

Chairman, National Aboriginal Economic Development Board

Chief Clarence Louie

Let me just wind up with some recommendations.

4 p.m.

Conservative

The Chair Chris Warkentin

I think it's more important that we hear your testimony. There will be questions, but you may answer many of them in your final remarks.

4 p.m.

Chairman, National Aboriginal Economic Development Board

Chief Clarence Louie

We have been giving recommendations to government for years; in fact, we just met with Indian Affairs this morning.

On the First Nations Land Management Act, you heard from Robert Louie a few weeks ago. We support that program. There is a backlog of first nations lined up to get involved in that program, but of course, like everything else, it comes down to money and funding. We've asked the minister to further resource that initiative so that if first nations want to get out from under the Indian Act and are ready to manage their own land, they don't have wait for five or ten years.

The other aspect is environmental management. I don't know where the SARA legislation came from. It came within the last decade or so. I can only speak from the Osoyoos experience, but I hate that act with a passion. I hate dealing with CWS.

The Department of Indian Affairs should not think that CWS recommendations and authority over our land are more important than the people who have lived on and grown up on that land for thousands of years. I tell the CWS representatives that they are phony environmentalists. That's what I call them. I tell them, “Do you want to know who's at risk? Do you want to know what species is at risk? It's the first nations people.”

We're the ones who have been at risk for 200 years in this country. The statistics prove that, the suicides prove that, the incarceration rates prove that, and then they come to our reserve and tell us what we can and can't develop?

We just went through a lease with the oldest person on our reserve, an 86-year-old woman. It's the only piece of land she has, and it's been in her family for generations. These phony environmentalists came and cut her lease. They took away her beachfront because of the Species at Risk Act.

In Osoyoos we look right across the fence and we see these non-native people dealing with greasewood, or whatever it's called. They can go there and bulldoze it over. In fact, we took pictures of a non-native developer bulldozing over greasewood on his property, yet CWS tells us.... He's right across there; you can grab a stone and chuck it like that, but they tell us we can't do what he's doing. He can develop his land, but we can't develop ours.

The off-reserve environmental standards should at least be the same as they are on reserve. We don't need this other layer of CWS interference. The Species at Risk Act does not apply to provincial land but to federal lands, and it is stopping development as we speak right now.

I had another landowner who wanted to put in a vineyard. He needed 20 acres of his land. Vincor Canada was going to lease his land. CWS came in and cut his property by five acres because they said there is some endangered bird there.

The economies of scale killed that project. Vincor needed 20 acres to make it worthwhile to have the tractors, equipment, and staff there. The five acres of cottonwoods where CWS said there was an endangered bird—which he, as the landowner, has never seen—killed this project. Vincor walked away.

He phoned me up last year and said, “I want to hire a bulldozer and bulldoze over those trees.” I said, “J.R., you should have done that before the CWS people came in there.” He hired a bulldozer and bulldozed over what CWS said was habitat his family had to set aside for the rest of the country without even being paid for it. That's the other thing under this SARA legislation: they take away reserve land—the little land we have to develop and make a living off of—they tell us to leave it alone, and they don't give us a dime for that.

I said, “J.R., you bulldoze that over. I don't care what the government says. What are they going to do, put you in jail? You bulldoze it. As soon as you bulldoze it over, I want to go down there. I'll stand by that pile of what these phony environmentalists call “ habitat”, and I want a picture with you there.”

The next time CWS comes on our reserve, I'm going to say they didn't protect that environment. This is what they caused the landowner to do. He lost the livelihood he would have had with his own vineyard. He was so mad he bulldozed it over.

We did take that picture.

The Species At Risk Act, if it's going to apply on reserve to native people, should apply off reserve to the non-native people as well. I'd say we should get rid of the damn thing.

The other thing is additions to reserves. I phoned Indian Affairs today and gave them heck again because of the slowness of the additions to reserves process. According to the old documents, people thought the Indians were doing nothing with their land and the settlers needed it more, so in 1915 the Joint Reserve Commission came in and cut back almost every Indian reserve in B.C. They took away our best farmlands. The land of the Osoyoos Indian Band follows the rocks in the south end of our reserves. This was done so that the non-native people could have our best agricultural land. Now every first nation, when they settle a land claim, wants additions to reserves.

In the treaty land entitlement process in the Prairies they are creating urban reserves, and I'm sure they're upset about the length of time it takes to get the additions to reserves process done. Our people are living in poverty. We can't be waiting. Maybe here or in the provincial government, where people have the luxury of a middle-class income, there's no urgency to this stuff, but for the poor people, it's urgent. We don't want to be raising our kids on welfare.

I get a chance to speak at corporate events all over this country. I'm in Saskatoon next week. I always ask the non-native people in the room, “How many of you have ever been on welfare? Put up your hands. How many of you have ever had to stand in a welfare line? Put up your hands.” In conference after conference, most white people in the room don't put their hands up, yet at native meetings, 80% of the people put up their hands. There's an urgency to this stuff. Maybe for middle-class and upper-middle-class Canada it isn't urgent, because they're doing okay and they have that middle-class lifestyle, but our reserves don't have it. That's why we need the government to speed up the additions to reserves.

For most first nations in this country, it's the first time they're ever going to have a chance to get developed land near highways. They were shut out during the settlement of this country. The best lands, province after province, went to the settlers, went to the pioneers. That's what happened across this country. It's documented and recorded. Those are facts. We need this additions to reserves process to get off of its comfortable rear and get going.

I've been saying for decades that most people with any level of experience would realize that the formula for the $10 billion or so being spent each year on aboriginal programs has never worked. The formula has existed for 100 years, with 96% to 98% on social spending and only 2% to 4% on economic development. It will never work. I keep on telling that to government year after year. We have to change that formula. We need more money for economic development, unless we're going to always have this dependency relationship. That formula has caused a dependency relationship in first nations.

Every time there's an election, I tell native youth that we have to start electing our leaders in the same way the non-natives elect theirs. You know how non-native people elect their leadership in every municipality and every province, federally and provincially? It's based on the economy. When there's double-digit unemployment, non-native people are up in arms and ticked off, yet across this country, most first nations are sitting there with Great Depression unemployment rates.

At its height during the Great Depression, unemployment was around 30%. That was the Great Depression, yet today in this country—under the Conservative government, under the Liberal government, for the past 100 years—in 2012 most first nations are sitting there with unemployment rates that exceed 30%. That's a fact in this country. A big problem is the formula, the ten-point-whatever billion dollars being spent on aboriginal programming.

We have to make the economy the number one issue. The economy is always the number one issue to non-native people; I want to see the economy be the number one issue for native people.

If we can reduce all the social service spending, all this heartache spending, all this aches-and-pains spending, you would see investment like you see in Sharon's first nation or mine, which is contributing multi-millions of dollars into the economy. You wouldn't see—I keep on having trouble saying that word—Attawapiskat.

4:10 p.m.

Conservative

The Chair Chris Warkentin

It took me three weeks to learn to pronounce Attawapiskat correctly.

Chief, I don't want to interrupt—

4:10 p.m.

Chairman, National Aboriginal Economic Development Board

Chief Clarence Louie

This is the final point I want to make before we get to questions.