Public Accounts Committee on Feb. 12th, 2009

[The Chair, Liberal, Shawn Murphy]

I will at this point in time call the meeting to order.

I want to welcome everyone here. Bienvenue à tous.

This meeting, colleagues, is called pursuant to the Standing Orders to deal with chapter 4, “First Nations Child and Family Services Program, Indian and Northern Affairs Canada”, of the May 2008 report of the Auditor General of Canada.

We have with us today the Auditor General, Sheila Fraser. She is accompanied by Assistant Auditor General Ronnie Campbell and Jerome Berthelette, principal. We have the accounting officer from the Department of Indian Affairs and Northern Development, Michael Wernick. He is accompanied by Christine Cram, assistant deputy minister of education and social development programs and partnerships sector, and we have Mary Quinn, director general of the social policy and programs branch, and Odette Johnston, director of the social programs reform directorate.

On behalf of everyone on the committee, a very warm welcome.

We are starting a few minutes late. We apologize. We had a vote in the House.

We will move right to our opening comments, and I turn the floor over to you, Ms. Fraser.

[Sheila Fraser, Auditor General of Canada, Office of the Auditor General of Canada]

Thank you, Mr. Chair.

We thank you for this opportunity to discuss chapter 4 of our May 2008 report on the first nations child and family services program.

The audit work for this chapter was substantially completed in November 2007, and we have not conducted any further work.

With me today, as you mentioned, are Ronnie Campbell, assistant auditor general, and Jerome Berthelette, principal, who are responsible for this audit.

The audit examined how Indian and Northern Affairs Canada manages its first nations child and family services program. My colleague, John Doyle, the Auditor General of British Columbia, conducted a concurrent audit covering child welfare services for aboriginal people in British Columbia.

Mr. Chairman, some of the most vulnerable children in Canada are first nations children. At the end of March 2007, there were about 8,300 on-reserve children in care. This represents more than 5% of all children living on reserves, and this percentage is almost eight times higher than the percentage of children living off reserves who are in care.

A 2003 study found that the higher incidence of child neglect occurring on reserves is largely attributable to poverty, inadequate housing and substance misuse by child caregivers. This indicates that the problems that result in children being taken into care cannot be resolved solely by child welfare services.

In 1990, the federal government adopted a policy requiring that child welfare services provided to first nations children on reserves meet provincial standards, be reasonably comparable with services for children off reserves, and be culturally appropriate.

In 2007, INAC provided 108 first nations agencies $180 million for their operating and administration costs. These agencies provide a varying range of child welfare services to about 442 first nations. This funding also included the costs of services provided by provinces on reserves.

The same year, INAC spent an additional $270 million to cover the direct costs related to children placed in care by first nations agencies and provinces.

Mr. Chair, our audit found that the department does not know whether the services being provided are reasonably comparable and culturally appropriate services because it has not defined these key terms of the policy.

Furthermore, the department does not sufficiently take into account provincial standards and other policy requirements when it establishes levels of funding for first nations agencies on reserves. Its funding formula dates back to 1988 and has not been significantly changed since then to reflect variations in provincial legislation and the evolution of child welfare services.

In addition, the funding formula leads to funding inequities because it assumes that all first nations agencies have the same percentage of children in care, which is 6%, and that the children all have similar needs. In reality, the percentage of children in care, as well as their needs, vary widely. As a result, some children and families are not getting the services they need.

Mr. Chairman, in 2007, through federal, provincial and first nations cooperation, the funding formula was revised in Alberta. This revision links the funding provided to first nations agencies in Alberta to provincial legislation. When fully implemented in 2010, the formula will provide 74% more funds for the agencies' operations and prevention services.

While this is encouraging, we found that the new formula does not address the inequities of the existing formula. It still assumes that a fixed percentage of first nations children and families need child welfare services. Agencies with more than 6% of their children in care will continue to be hard-pressed to provide protection services while developing family enhancement services.

In our view, the funding formula should be more than a means of distributing the program's budget; it should take into account the varying needs of first nations children and communities.

Funding is, of course, not the only issue. Ensuring the protection and well-being of children requires that INAC, the provinces, and first nations agencies have a clear understanding of their responsibilities. Up-to-date agreements are essential. We found that INAC had no agreements on child welfare services with three of the five provinces we covered in our audit. Even when agreements are in place, INAC has limited assurance that services delivered by first nations agencies comply with provincial legislation and standards.

Finally, we found that INAC has little information on the outcome of its funding on the safety, protection, or well-being of on-reserve children. It does not know whether its program makes a positive or significant difference in the lives of the children it funds.

The large percentage of first nations children in care calls for all the parties involved in the child welfare system, including first nations and provinces, to find better ways of meeting their needs. It also calls for better coordination between INAC programs, and between them and those of other federal departments.

We are encouraged by the fact that INAC agrees with our recommendations. In a number of its responses, it set out what it intended to do. I am pleased that departmental representatives are here today, and I assume they will be able to provide you with more information on progress to date and future plans.

Mr. Chair, that concludes our opening statement. We would be pleased to answer any questions that committee members may have.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Ms. Fraser.

We're now going to hear from the deputy minister and accounting officer for the department, Mr. Michael Wernick.

[Michael Wernick, Deputy Minister, Department of Indian Affairs and Northern Development]

Thank you, Mr. Chair. Thank you for the invitation to appear before the committee.

You've already introduced my colleagues who work in this area. We have the complete array of ADM, director general, and director, who can help me with questions from the committee.

I welcome the opportunity to bring your members up to date on our efforts to improve first nations child and family services on-reserve.

Since the Auditor General's report of May 2008, we have been working with provinces and first nations to improve child and family services for first nations children. I can assure committee members that we recognize the seriousness of the matters raised in her report. We are committed to building healthier, stronger first nations families and are particularly concerned with the safety and well-being of first nations children.

Drawing from the report, I'd like to briefly remind the committee how the first nations child and family services program works. My department doesn't work alone, of course. Provinces have complete legislative jurisdiction over child welfare, both on and off reserve. In some cases, provinces choose to delegate the authority of their child protection ministers to first nations child welfare agencies and first nations staff.

My department provides funding to first nations, their child welfare agencies, and sometimes to the provinces to cover the costs of child welfare services on reserve, including the costs related to children brought into care. The budget for this program, as the report notes, has grown. In fact, it has more than doubled from $193 million in 1996-97 to approximately $465 million in 2007-08.

In recent times, Budget 2006 provided additional resources of $98 million over five years for the implementation of a new prevention-focused approach starting in Alberta. Budget 2008 provided an additional $115 million over five years to implement the same prevention approach in Nova Scotia and Saskatchewan. The investments in Alberta, Nova Scotia, and Saskatchewan are important, and they reach about 36% of first nations on-reserve children in care. Building on this momentum, Budget 2009 just recently added $20 million over two years to work on implementation of the prevention approach in additional provinces. We look forward to further initiatives later this year.

Through these more recent investments, a number of tripartite frameworks have been concluded. Tripartite means ourselves, the government of the province, and first nations entities. In June 2007, the first tripartite framework was reached with the Government of Alberta and treaty first nations in Alberta. Subsequently, tripartite frameworks were reached with the provinces of Nova Scotia and Saskatchewan in July 2008. For the first nations child and family services program, these agreements will lead to more clearly defined policy and accountability requirements, as the agencies develop business plans and describe how these will be implemented.

While work is under way on program renovation and a shift to the prevention approach, we are simultaneously working on another track to strengthen program management and accountability. The only way forward on both tracks is through partnership with willing partners, the provinces, and first nations--who share our goal to strengthen child welfare services.

By way of a very brief progress report, we've been able to completely update the program authorities in 2007. We've updated the reporting guide to require business plans for agencies entering into the prevention model. We've revised program reporting requirements and drafted performance indicators that we're now discussing with our partners. We have worked closely with provinces to ensure that the agencies do meet provincial legislation. We considerably increased compliance activities last year and this year.

I would like to note that the department's internal audit process requires, at my direction, mid-year and year-end follow-up reports. As Mr. Campbell will know, as he attends our audit committee as an observer, we put all internal audit findings and all Auditor General chapter findings on a reporting-back cycle.

The next follow-up report on this chapter will be presented at my audit committee, which has external members, in April, just before the one-year anniversary of the report to Parliament. I will be pleased to share the results of that follow-up report with this committee at this time, if you're interested. We will be discussing its contents with the Office of the Auditor General and my external audit committee members before finalizing it.

We want to make sure that changes we're making are meeting real needs of children in care and their families. Child welfare requires the very active involvement of all partners: families; first nations governments; child welfare agencies on and off reserve; as well as federal, provincial, and territorial governments.

In that same vein, members who were here during the last parliamentary session will know that M-296, Jean Crowder's motion on Jordan's principle was adopted by the House of Commons, in December 2007, with the support of all parties. The federal government is implementing Jordan's principle, with the provinces, so that the needs of children are addressed first.

By taking a partnership approach, INAC can support services that are provincially comparable and culturally appropriate, in keeping with the needs of communities, and putting children first.

Any further questions about what we've done and what we intend to do as we move forward would be welcome.

Thank you, Mr. Chair.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Wernick.

Just before we go to the first round, I want to point out that this audit was from the May 2008 report, and probably a lot of the work was done close to two years ago. You might want to question the officials from the department as to what has been done since then.

What I'd like to do, colleagues, is adjourn this portion at 5:15 and then deal with just the minutes of the steering committee and the motion from Mr. Christopherson so we can conclude at 5:30.

The first round is seven minutes.

Mrs. Crombie.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you both for your comments.

I just wanted to reflect how tragic I think this audit is, because it deals with some of the most vulnerable of our society, not only children, but aboriginal children, and how their needs are not being met.

Despite, as you point out, the $465 million spent, there still seems to be a lack of funding. But fundamentally, what there seems to be a lack of more than anything else are controls and accountability--accountability on how the funds are spent--and we know that.

I'd like to start my questions by asking about the funding formula, which was designated, as we know, in 1988 and really hasn't been modified since. We have no idea if the program funding has been allocated equitably. The formula is based on the potentially out-of-date assumption that 6% of on-reserve children are placed in care, but there could be wide discrepancies today; children in care could range vastly.

My first question is on why the formula hasn't been changed since 1988.

Secondly, why isn't the funding based on estimated needs or actual operating costs?

Why isn't it in line with provincial legislative standards, so we know better what the needs are?

Fourth, is the statistical formula an appropriate method for determining funding levels?

Finally, how does the funding compare with the funding for family service agencies for non-native children?

[Michael Wernick]

I'm not sure I caught all the questions, so we'll come back to them.

I'll turn the formula question over to Ms. Cram.

I think the point I'd like to register, very briefly, is that the program prior to 2006 had a fundamental policy flaw, which is that it was biased toward taking kids into care.

The formula isn't really the most important issue, in my view. What we had was a system that basically provided funds for kids in care. So what you got was a lot of kids being taken into care. And the service agencies didn't have the full suite of tools, in terms of kinship care, foster care, placement, diversion, prevention services, and so on.

The new approach that we're trying to do through the new partnership agreements provides the agencies with a mix of funding for operating and maintenance--which is basically paying for the kids' needs--and for prevention services, and they have greater flexibility to move between those. We don't want the agencies biased toward taking kids into care. We want them to make the judgments in the communities about the best interests of the child. That's why we put such an emphasis on the prevention thing. We're trying to do a very fundamental policy renovation and remove the systemic bias.

One of the reasons the costs grew so much in the 1990s is that the system had a tilt toward taking kids into care, which is precisely the most expensive part of the whole system; it can run over $90,000 to $100,000 per child per year. If you get the kids earlier, it's actually cost-effective, as well as in the best interests of the child.

I'm not denying or negating the importance of the question about the funding formula, which I'll have to ask Ms. Cram to help me out with, but I did want to get across that we're trying to give the agencies the tools on the ground to deal with case management more effectively.

[Christine Cram, Assistant Deputy Minister, Education and Social Development Programs and Partnerships Sector, Department of Indian Affairs and Northern Development]

We currently have two formulas in operation. We have a formula for those provinces where we haven't moved to the new model. Under that formula, we reimburse all charges for kids who are actually in care, and that's why the costs have gone up so dramatically over time.

There were comments made about the fact that under the old formula there wasn't funding provided to be able to permit agencies to provide prevention services. That's a fair criticism of the old formula.

Under the new formula, as the deputy was mentioning, we have three categories in the funding formula. We have operations, prevention, and maintenance. So those are each determined on a different basis.

The 6% is a portion of the operations funding. I know the Auditor General has expressed concerns as to whether that 6% is sufficient.

There is also funding for prevention. In fact, I think it's been mentioned that when the new approach is completely implemented in Alberta, there will be an increase of approximately 74% in the funding they will get.

On maintenance, we look at what the previous year's amount was for maintenance. So in Alberta, where we've implemented the new formula, we looked at what the kids-in-care percentage was for maintenance and then provided that amount.

We want to see how it works in Alberta. It was a tripartite negotiation, trying to match up with what the province does, and working with the first nations as well. We are planning to do an evaluation of that in 2010-11, when it's had a chance to operate. Should we find that the formula isn't working appropriately, we would, of course, consider changing it.

[The Chair, Liberal, Shawn Murphy]

I'm just going to interrupt here.

I want to remind witnesses just to direct your answers to the questions. Keep the answers relevant to the question, please.

And perhaps to the questioners, too, keep the questions succinct and precise.

There's a minute and a half left.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you.

Just on the last part of my long question, how does the funding compare with funding for family service agencies for non-natives?

[Christine Cram]

I'm sorry, but we don't know the answer here now.

When we worked on the tripartite framework, we dealt with the province to try to offer the same kinds of services by providing funding necessary for those.

But I don't personally have those data right here.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Okay, I'll try to squeeze in one more question quickly. Why doesn't the federal government, through INAC, place requirements or criteria on the funding and better monitor the results?

[Christine Cram]

I'm sorry, are you asking us what we are doing to better monitor results, etc.?

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Why don't you place requirements and criteria on the funding and then monitor the results?

[Christine Cram]

Well, we do. We have funding agreements and there are criteria in the funding agreements.

It's true that we need to improve how we are monitoring results. We request reports from the recipients of the funding agreements, but we need to make improvements.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

What are the outcome indicators?

[Christine Cram]

Children in care is a big outcome. We use children in care as one of the outcome indicators, but with the introduction of more prevention, we need to find better indicators reflecting the efforts made in prevention. So we're working on performance indicators now with the other parties.

[The Chair, Liberal, Shawn Murphy]

Thank you, Ms. Crombie and Ms. Cram.

Madame Faille, sept minutes.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Thank you, Mr. Chairman.

The communities are currently facing many challenges. I took specific note of the recommendations made by the Royal Commission on Aboriginal Peoples and of the report that it tabled. Moreover, I worked for Indian and Northern Affairs Canada in 1989.

Since the report was tabled, how much money and how many human resources were committed to this program? The report from Canada's Auditor General stated that no one managed the program on a full-time basis. How do you rate the progress that has been made? How do you go about measuring the improvements in the communities, if there are any? Tell us when was the last time that the department met with representatives of the aboriginal community, of provincial authorities or of the most seriously-affected communities, and tell us if these issues were raised at that time.

[Michael Wernick]

Let me answer the easier questions.

In the department, we have about 30 persons, along with 10 persons in Ottawa and about 20 in the regions. The report states that there is a shortage of full-time management personnel. We have solved that problem. Ms. Johnston, who is sitting next to you, is the one in charge of the program; she is a specialist in that field. We have about 475 resource persons, over and above the investments made in the three last budgets. We could calculate the total amount in terms of financial resources.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

How much does it cost to manage this program?

[Michael Wernick]

The department's management costs cover almost exclusively the wages of the 30 public servants.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

What about the other meetings?

[Michael Wernick]

I did not catch all your questions.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

When were the last meetings between the department and provincial authorities held? Were these issues raised at that time? When did you have meetings with the first nations or with the most severely affected communities?