Indigenous and Northern Affairs Committee on May 29th, 2007

[The Chair, Conservative, Colin Mayes]

We'll open the meeting of the Standing Committee on Aboriginal Affairs and Northern Development of Tuesday, May 29, 2007.

Committee members, you have the orders of the day before you. Today we'll be studying the main estimates of 2007-08, votes 1, 5, 10, 15, 20, 25, L30, L35, 40, 45, 50, 55, and 60 under Indian Affairs and Northern Development.

I call vote 1.

Today, appearing before us we have the Honourable Jim Prentice, Minister of Indian Affairs and Northern Development. As further witnesses, from the Department of Indian Affairs and Northern Development we have Michael Wernick, deputy minister; Peter Harrison, senior associate deputy minister; and Jim Quinn, chief financial officer.

Welcome.

Mr. Minister, would you like to open with some comments?

[Jim Prentice, Conservative, Minister of Indian Affairs and Northern Development]

Thank you, Mr. Chairman. I would be pleased to do so.

I'd like to say good morning to you and to the members of the committee. Thank you very much. I look forward to our dialogue here today.

I thank you for the opportunity to discuss the main estimates of the Department of Indian Affairs and Northern Development with you and your colleagues this morning. I'm grateful for the attention this committee has given to my department's agenda over the past year—I guess to our collective agenda. I appreciate your consideration of these important issues, including post-secondary education and housing, as well as legislative initiatives such as Bill C-34 and Bill C-44, which are now before the committee.

I know we all share the same objective, which is to say improving the quality of life for aboriginal people and northerners.

You heard from Indian and Northern Affairs Canada's accounting officer, Deputy Minister Michael Wernick, a short time ago regarding the department's supplementary estimates. I would like to speak today in the context of this year's main estimates, the next step in the financial planning cycle, and we are determined to move forward to make a real and positive difference in the lives of aboriginal people and northerners.

The current 2007-08 main estimates include $6.3 billion for our department. This represents a net increase of $36 million from 2006-07.

One point I would like to emphasize, particularly for Monsieur Lemay, is that the main estimates are of course simply the first step in the fiscal cycle, the starting point. They do not include resources that will be allocated through supplementary estimates.

Mr. Chairman, funded by the main and supplementary estimates, we are determined to move forward in clearly defined ways through approaches and initiatives that will effect real change in aboriginal communities and furthermore will give aboriginal people the tools and organizational structures they need to take charge of their own future.

I have felt, from the time I became the minister, that we need to effect structural reforms, in particular to protect women and children and to ensure that women are in a position to move forward and advocate on behalf of their children.

First, we need to effect structural reform to protect women, children and families. Whether the reform is legislative, as is the case with the repealed section 67 of the Canadian Human Rights Act, or a change in policies and programs, we must ensure that aboriginal women, children and families have the same rights and have access to the same quality of services as all other Canadians.

Our continued work to address the issue of matrimonial real property and our recent partnership with the Province of Alberta and Alberta first nations to implement a new approach to child and family services are recent examples of new and innovative thinking, new approaches to the existing challenges in first nation communities. I'm confident that, working in partnership with the provinces, territories, and aboriginal groups, we can build on successes such as these.

Second, we have to consolidate economic development tools to obtain the maximum efficiency from our programs and services, and so that we can enable first nations to take charge of their own economic development. That is why the Aboriginal Business Canada program and the National Aboriginal Economic Development Board were unified under my department in December 2006. This is an important initiative, and there will be more said about it in the future. It is one of the important structural changes that needed to be made to ensure that the department has the tools to deal with economic development, which I think we all would agree is a significant part of the way forward.

Furthermore, under the aboriginal workplace partnership initiatives, we have formalized partnerships with local governments, influential businesses, and trade unions to promote the employment of an aboriginal labour force. I'm especially proud of the agreements that have been signed in the past several months, agreements such as those with Siemens Canada Limited in Saskatoon, the City of Edmonton, the Calgary Health Region, the Nova Scotia Nurses' Union, and the Nova Scotia Trucking Human Resource Sector Council. All of these agreements will bolster the number of employment opportunities available to aboriginal people.

To give you another example, this government allocated $300 million in budget 2007 for the establishment of the first nations market housing fund. This fund will enable first nation families and individuals to purchase, build, and renovate on-reserve housing that meets their specific needs and tastes. I think everyone in the room is familiar with the fact that a key aspect of this is the leverage that is available from the $300 million, leverage that would be in the nature of four or five to one. So it's not simply $300 million; it accesses private mortgage capital in excess of $1.5 billion, which will be available over time for first nations housing.

The program is expected to help finance the development of approximately 25,000 new housing units over the next 10 years, but the First Nations Housing Market Fund will not only encourage housing development, it will also help first nations people living on reserve to obtain bank loans, build equity and generate wealth through home ownership.

Third, there is a desperate need to address the existing approach to the resolution of aboriginal land claims. I'm happy to point out that there have been some marked recent successes. The Nunavik Inuit Land Claims Agreement, for instance, was signed in December of last year, resolving this country's last major Inuit land claim, Bill C-51.

Bill C-51, which ratifies this agreement, has recently been introduced in the House, and last year three treaties were also initialled in the province of British Columbia. These were the first to be initiated under the B.C. treaty process. However, much more needs to be done.

I know all of the members here today are eager to discuss these plans and to address the current untenable situation presented by the specific claims process. Although I'm not in a position to elaborate at this time, I'm pleased to note that we have committed to and intend to announce a new approach to the resolution of this long-standing national issue.

Fourth, we have to work to enable the participation of aboriginal people in major resource development opportunities. The close proximity of our first nations communities to resource development presents opportunities, allows people to participate in these projects in a meaningful manner, and to share in the social and economic benefits that are generated by these initiatives.

I know we've all seen examples of this sort of success in the past. I observed that in the context of Voisey's Bay, for example, close to 50% of the workforce at that facility are first nation citizens. If you go to the diamond mines in the Northwest Territories in the Tlicho area, you'll find that, as I recall, in excess of 30% of the people working at those facilities are first nation citizens.

So we are making progress.

This government recently passed regulations under the First Nations Commercial and Industrial Development Act that will enable the Fort McKay First Nation, in partnership with Shell Canada, to develop a multi-billion dollar oil sands mine in northern Alberta. This is the first initiative of its kind. The project will attract investors from around the world and create hundreds of meaningful, well-paying jobs for community residents.

And we have also dedicated $500 million to the Mackenzie Valley Socio-Economic Impact Fund. Committed in budget 2006, this fund will assist those communities whose development is affected by the proposed Mackenzie gas project, should the project proceed.

Fifth, my colleagues, we continue to work forward addressing the residential schools matter. I'm pleased to report to the committee that the Indian Residential School Settlement Agreement has received final court approval, and now former students and their families must choose whether to stay in the agreement or remove themselves from it. All parties to this historic agreement have agreed to a fair resolution of this sad legacy and chapter in the history of our country.

Our new government recognizes the importance of achieving a fair and lasting resolution of the Indian residential schools legacy and of moving forward in partnership with aboriginal communities across Canada. You will be aware that in my early months as minister, I brought the closure, along with Minister Oda, to the negotiations surrounding the Indian residential school settlement. That's also why we supported the motion for the House of Commons to apologize for the legacy of the Indian residential school agreement. The apology took place a month or so ago.

We are moving forward with the implementation of the agreement at this point, potentially as early as September of this year, once the opt-out period is finished. In particular, we look forward to the important work of the Truth and Reconciliation Commission, which is an element of this historic agreement and which will provide a complete historic record of the unfortunate legacy of which we speak.

Not only is this department responsible for first nation, Inuit, and northern issues, I'm also the federal interlocutor for Métis and non-status Indians. My official work with Métis and non-status Indians and urban aboriginal people is to assist them in realizing their full economic and social potential. In this capacity, we recently announced a refocused urban aboriginal strategy in Edmonton, concentrating on job training and entrepreneurship for the nearly 50% of aboriginal people who live in cities and towns across the country.

The approach to the urban aboriginal strategy is based upon a focus on the larger metropolitan centres--12 in number, as I recall. The strategy unites federal, provincial, and municipal governments as well as aboriginal communities and organizations and invests $68.5 million over five years to improve life and employment skills, to promote entrepreneurship, and to provide support to aboriginal women, children, and families.

Mr. Chairman, you and your colleagues are quite aware that the north is an important part of my mandate. Canada's New Government is committed to working with Canada's three northern territories to develop the north's natural resources, and create jobs and prosperity for northerners and indeed for all Canadians.

The north holds a significant percentage of Canada's energy resources. They present an immense opportunity for exploration and development--investment for generations to come. Resource-based projects in the north include diamond mines, oil and gas exploration, and other mining activity. They've contributed to increased economic growth in the north over the past number of years.

This economic growth, besides being the means of improving quality of life for northerners, also serves to bolster Canadian sovereignty in the north, raising the profile of Canada. As an Arctic nation, we must do what we can to ensure that the current boom in the north continues, to the benefit of northerners and other Canadians alike.

The International Polar Year, 2007-08, was also launched on March 1. This will be another enabler of growth and development in the north. We expect that the research by Canadian and international scientists, funded through the International Polar Year program, will lead to new knowledge, environmental, health, and economic benefits to Canadians in the north and across our nation.

The two key themes for International Polar Year science—climate change impacts and adaptation, and the health and well-being of northern communities—will be important to many nations, given the global effects of climate change.

In closing, I feel it is essential to note that while funding is a crucial element in the success of our programs and initiatives, it is not the only significant factor. I have said before that continuing to fund existing programs without considering their validity or efficiency is not good enough. We must continue to consider whether the means by which we currently deliver services is truly producing the best results for aboriginal peoples and northerners. The funding provided in the main estimates is essential to maintain and advance programs to improve the quality of life for aboriginal people and northerners.

I welcome any questions or comments you may have.

Colleagues, I welcome any questions or comments you may have. It is a pleasure to be here. I know that we have a reservoir of knowledge at this table concerning aboriginal and northern issues, and I look forward to an opportunity to discuss this.

Thank you.

[The Chair, Conservative, Colin Mayes]

Thank you, Mr. Minister.

We will begin our questioning with Anita Neville.

Madam Neville, please.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you, Mr. Chair.

Minister, thank you very much for being here. We particularly appreciate that you've given us the full two hours today.

I have many, many questions, so I will begin and see how far it takes me.

My first question is related to the overall departmental spending and your priorities. On separate occasions I've heard you say the total aboriginal spending is $9.1 billion, $10 billion, and once, even $11 billion. I haven't heard a consistent message. The one message I have heard from you, and you've reiterated it today, is that the spending your department has committed is enough for aboriginals.

To my mind, the numbers that have been cited have been misleading and certainly lack clarity. The distinctions between all aboriginal spending and first nations spending is certainly blurred. The report we're studying today shows that departmental estimates are just over $6.3 billion.

Are you willing to identify the disaggregated figures for us so that people can understand the distinctions? Can you tell us how much the department is spending and how much will reach first nations communities, aboriginals on and off reserves, the Inuit, and the Métis? Then I have several other questions.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

I'd be pleased to do that. We can work through that in an orderly way. I think we would all agree that it is sometimes difficult in the context of a thirty-second period in question period to convey the complexity of all of this.

The expenditures directed to aboriginal people by the Government of Canada in 2007-08 total $10.2 billion. In addition, there are the dollars that will be expended on the Indian residential school settlement agreement, which I did not put into the $10.2 billion figure. We can talk separately about those. An additional sum in excess of $2.2 billion will be spent on the residential school settlement agreement.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

I'm aware of that.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

Dealing with the $10.2 billion, it might assist you if I pointed out how this breaks down across the Government of Canada. Indian and Northern Affairs Canada is $6.7 billion, which is 65% of that total. Health Canada is $2.1 billion, which is 21% of that total. CMHC is $300 million, which is 3% of the total. HRSD is $400 million, which is 3.7% of the total. Other departments and agencies are $500 million, which is 4.6% of the total.

Then, in addition to that, you have dollars being expended now that were included in budget 2006, which have been allocated to this fiscal year. You recall there were significant dollars for housing, for example. The portions of those for this year, if included, amount to another $300 million or 2.4%.

That is the total of the $10.2 billion and where it is found across the Government of Canada. I think that's a partial response to your question. In terms of expenditures on reserve, $7.4 billion of the $10.2 billion is allocated to programs and services for first nations citizens living on reserve, and that equates to per capita spending of $16,500 per citizen based on an updated estimate of the population of on-reserve Canadians of 448,000 people.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Can I interrupt you? Is that direct money to the community or does that include administrative costs in your department? I'm interested in knowing what individuals receive, Minister, please, or what communities receive. I want to know whether the figures are calculated in that $16,500, because it's a different perception.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

If you look at the grants and contribution vote on what you have in front of you, $5.2 billion is the direct grants and contributions that are made. That's not the sum total of the expenses.

But back to your point, of the $6.3 billion that is spent, 82% of that, or $5.2 billion, is administered directly by the bands, the first nations themselves.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Minister, you identified very clearly in your document that your priorities are women and children, and I think no one can disagree with you. How we get there is a matter of discussion and sometimes disagreement. My question is, in determining the priorities for aboriginal Canadians, why are you not addressing the concerns they prioritize, that they come forward with and say are their immediate issues? Why are you determining the priorities rather than allowing them full and proper participation in the establishment of those priorities?

[Jim Prentice, Conservative, Calgary Centre-North, AB]

I wouldn't agree with the premise of the question. We've been working together with first nations leaders responding to the very issues that have been brought forward, and I can tell you that in the course of the last month alone I've met with the chiefs of the Union of Ontario Indians and the Federation of Saskatchewan Indian Nations. This weekend I met with the First Nations Leadership Council in British Columbia--

[Anita Neville, Liberal, Winnipeg South Centre, MB]

I'm aware of that.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

In all of these areas, we are responding directly to the current concerns.

In terms of women and children in particular, when I became the minister I made it quite clear that the child and family services side of the department required serious renovation, and we set about doing that. We have this spring rolled out, first in Alberta, what has been called the early response model. It is a complete restructuring of the child welfare authorities under which this department operates. It is a reform that has been required in this country, really, for at least 25 years, and this is the government that's actually doing it, and we're making the investments.

It has been brought into place first in Alberta, with the unanimous consent of every single first nation in Alberta plus the Alberta government. We're now engaged in discussions with other provinces and first nations who want to move forward. I met with representatives of the provincial government in Saskatchewan and the FSIN. This is their number one priority, and we're working together with them to move forward immediately. We're moving forward similarly, in the next very short period of time, with British Columbia.

So that's an illustration of what is clearly the number one priority amongst first nations in that part of Canada, which is child and family service authorities and the large number of kids in care, and we are moving forward on their priorities.

I add to that a similar approach on education. When I became the minister...it is clear to me, I think clear to all of us in the room, that we're not making the strides on aboriginal education that we need to. We therefore developed, in concert with the Government of British Columbia and first nations, on a voluntary basis, a new approach to education. We are now in the process of taking that same approach forward, working with other first nations and provinces that want to implement that same approach.

So we are responding directly on the issue of women and children to the priorities of first nation citizens. On other issues requiring structural change, such as matrimonial property—

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Am I out of time?

[The Chair, Conservative, Colin Mayes]

Yes, you're out of time.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

Fortunately, we have two hours.

[Anita Neville, Liberal, Winnipeg South Centre, MB]

Thank you.

[The Chair, Conservative, Colin Mayes]

Maybe we can continue on that question in the next round.

Mr. Lemay, please.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chairman. I would also like to thank the minister and his team for being here today.

Minister, I would like to begin by drawing your attention to the presence of Mr. Ghislain Picard, Regional Chief of the Assembly of First Nations of Quebec and Labrador. He is accompanied by a number of young people, parents and children—not all of whom fit into this room—who are concerned about the education available to first nations people, particularly in Quebec. With your permission, this is a subject that I will return to in a few moments.

Minister, I have here a document. There is no way that you cannot be familiar with it, as it comes from your department. It is called "The Funding of Basic Services for First Nations: Cost Indicators, Annex F, Consolidation Report, November 2006".

The document states—and I will quote it to avoid any ambiguity—that even with budget 2007-2008, there would still be an annual shortfall of $938 million just in terms of what is needed to ensure equality of services. I will not go into all the details, I imagine that you are familiar with the document. I find this situation extremely worrying.

I read your presentation and was struck by a comment that you made on page 27. You said: "I have said before that simply continuing to fund existing programs without considering their validity or efficiency is not good enough."

As the presenter of a well-known Quebec television show would say, now for the killer question. Minister, are you freezing first nations funding while you study the validity and efficiency of existing programs? It seems to me that you are. I hope that you will tell me that I am mistaken. This is not about political point scoring, I am concerned about the education available to first nations people. How is it that since 1998—and here I point the finger of blame at those seated to my right—the first nations funding formula has never factored in the cost of equipping schools with IT resources? In plain English, there is not a computer to be seen. How is it that our young first nations students do not have computers in their schools?

There is also the matter of the cost of running school libraries—there's no money for libraries. I have seen that with my own eyes in Pikogan, in my riding, and in Timiskaming First Nation. I have seen for myself. Furthermore, no provision is made for professional development training. Why is that? There is no provision for extracurricular activities such as sport and recreation.

[The Chair, Conservative, Colin Mayes]

Mr. Lemay, you have three minutes for an answer.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

My question was clear, and it calls for a clear answer.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

Thank you, I greatly appreciate your questions—and there were many!

Let me deal first with the issue of the expenditures and the document of November 2006, to which you're referring.

This refers to certain basic services that are provided by first nations and funded in part by the Government of Canada. What that does not reflect are the additional investments that this government has made. They do not reflect, for example, the $300 million included in budget 2006 for off-reserve housing; nor the $300 million in budget 2006 for northern housing; nor the $150 million, additional, in budget 2006 supplied to education, family services, women, children--those kinds of issues--nor does it include the $300 million applied to on-reserve funding for a private housing initiative this year. All of those are incremental to and in addition to what you're speaking of in terms of the Government of Canada's programs and services.

So you need to look at the overall picture, which is a $10.2 billion envelope of program and service expenditures, the vast majority of which is administered to on-reserve citizens and the vast majority of which is administered by first nations themselves.

In terms of education, there's much we could say about education, and one could go back to the era of the residential school situation. In the time since then, the Government of Canada has been working towards a system in which there are individual funding arrangements for individual first nations. The Government of Canada essentially puts forward $1.667 billion per year towards education. Of that, $1.123 billion is expended on elementary and secondary education; $314 million, as you know from your study, on post-secondary education; $229 million on other issues, which includes special education and also administration.

The dollars that are being expended are, in total, expended on about 125,000 children in schools. If you do the math, you'll see that this works out to something in the neighbourhood of $10,000 per student, in terms of actual dollars that are provided. The comparison that many people make is to what is being spent in the provincial school system. It is roughly comparable. It is slightly less than in some provinces, slightly more than in others. With some of the provinces, like Alberta, which are extremely well funded, it is difficult to keep up. By and large it is a fair comparative expenditure.

One of the challenges we do face is the large cost of capital investments in remote communities for the construction of schools. For a school that might typically cost $9 million or $10 million to build in southern Canada, in Ontario or Quebec, costs are running at $20 million to $30 million in northern communities, especially communities where everything has to be brought in on winter roads. We continue to wrestle with those issues.

I've made it very clear that education is a priority. There are no funding cuts to education. That is not the case. There's no funding being stopped to education authorities. Rather, we're trying to work forward with the British Columbia model, taking it to other provinces, Quebec included, because it is first nation driven. It will create a school system with the support of first nations that will work hand in hand with the adjoining provincial school system to give first nation children the opportunities they need.

Mr. Lemay, I agree with your sentiment that nothing we do is more important than education.

[The Chair, Conservative, Colin Mayes]

Thank you, Mr. Minister.

Madam Crowder, please.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Thank you, Mr. Chair.

Thank you, Minister, for coming before the committee today.

I also want to acknowledge the elders, chiefs, and young people who came here to bear witness today. It's an important event for people to come to hear about the issues that the Canadian government is discussing.

When you came before the committee back in 2006, I raised the issue of the funding for the B.C. Treaty Commission. In the estimates for 2006-07 there was a specific line for funding for that of $0.2 million, and I couldn't find it in this year's estimates. I just want to confirm that funding for the B.C. Treaty Commission process is still there.

I also want to come back to education. You have publicly stated your commitment to the importance of education. As you know, this committee looked at post-secondary education, but there are a couple of things on which we need clarification.

There's a well-acknowledged 2% cap that's been in place since 1996. The Auditor General herself has pointed out that on-reserve population growth is far above the Canadian average. In the cost drivers project that the department put together, they said funding shortfalls needed to be met for education around internal reallocation of resources. They said that expenditure for instructional services for students in provincial schools was growing at twice the rate as the same expenditure for band-operated schools. They said the socio-economic influences are often not taken into consideration, so the real costs for remedial programs related to basic skills, nutrition programs, extracurricular programs associated with sports and recreation, and after-school programs that enhance the school experience are not taken into consideration. I know that the lack of progress on the band-operated funding formula is causing great distress amongst communities across this country.

In addition to that, in the estimates for 2006-07--and I realize these are estimates--when you look at the funds allocated for education activity, in 2006 they projected spending $1.66 billion. The projection for 2007-08 was about $1.8 billion, but when we come to the figures in the actual 2007-08 estimates it's $1.67 billion. So it seems that in 2006-07, when the estimates were created, they projected an increased need, yet it dropped fairly significantly when the actual estimates were put forward for 2007-08.

In addition, you raised the issue that an average of $10,000 goes to a band for the education of children on reserves. I know that a number of band-operated schools don't get anywhere near the $10,000; some are getting $7,200 or less. In many rural and remote communities that additional money required to operate in a rural and remote community.... I have a study done through the First Nations Education Council that says provinces all across Canada actually recognize these differences and fund anywhere between $10,000 and $21,000.

So I guess there are two questions. First, given that in 2006-07 the government projected spending $1.7 billion and it's actually come down substantially to $1.6 billion, what has changed? We know the need has increased. What is the government doing to address the very serious needs in rural and remote communities due to the gap in funding between what the government is providing and what the province is providing? Perhaps you could also answer the question on the B.C. Treaty Commission.

[Jim Prentice, Conservative, Calgary Centre-North, AB]

Thank you for those good questions.

On the B.C. Treaty Commission and the $0.2 million, I'm not sure which line entry you're referring to, but it doesn't matter. The important point is that we just recently advanced the annual allotment to the B.C. Treaty Commission, which, as I recall from memory, was about $35 million. And we carry on with the B.C. treaty process, which is fully funded right through to 2009.