Thank you, Mr. Chair.
Our presentation is called “Structural Transformation and Critical Investments in First Nations on the Path to Shared Prosperity”.
First nations communities and individuals are poised to make ever-increasing contributions to the overall economic prosperity of Canada and to their own economies. Fundamental structural change is part of the uncovering of the full potential of these individuals and communities.
Investments in first nations continue to make sense, especially in a climate of fiscal restraint and reductions. Accordingly, AFN recommends that the Government of Canada transform the fiscal relationship through examining existing funding mechanisms and to move forward to change those, based on a set of shared principles: that there be critical investments made in education, infrastructure, and skills development in order to increase productivity and participation in the future economic opportunities; and that there be investment made in safe and healthy communities through supporting overall infrastructure, housing, and health care.
I have some comments on transforming the fiscal relationship. The current mechanisms for funding are inadequate, unsustainable, and too unpredictable to allow for any long-term planning, and also to encourage any long-term investment by external banks and organizations. First nations are the only governments in Canada whose budgets for core and essential services are discretionary and subject to unilateral or arbitrary change. In fact, since 1996 an arbitrary 2% cap has been applied to funding for first nations' core services. Therefore, stable and predictable fiscal transfers, with built-in escalators related to population and inflation, should be used for first nations governments, as they are for other governments. For example, provinces and territories receive a guaranteed annual growth of 6% per year for health services, but that's not the case for first nations.
With regard to investing in first nations education—just by way of background—in Budget 2010 there was a commitment to achieving comparable education outcomes for first nations students. In our view, achieving comparable outcomes requires, at minimum, comparable investments. A funding framework is needed based on real costs, indexation, and appropriate treatment for northern and remote communities, with such a framework being used for a permanent allocation of resources based on standards and real costs. The estimated outcomes of this, as related by the Centre for the Study of Living Standards in 2010, are such that achieving a comparable education outcome could save the government $1.9 billion in a single year by 2026.
In transforming the approach, any action taken should be founded on the set of principles that I mentioned earlier. Those principles would be equity, fairness, security, stability, predictability, and accountability. I want to emphasize appropriate authority, relative autonomy, flexibility, and also an opportunity to have access to external capital.
In terms of opportunities for change, within the current context of the strategic operational review, there are some important considerations that we feel should be borne in mind, especially if we're looking at aligning programming and services across government. We feel that basic services and the elements and costs affecting health and safety should take priority. We also feel that another principle to be included is that community-based services be set as a priority and be guaranteed a sustainable rate of growth in funding. Redeployment of resources should be done in areas of greatest need, and there should be a rebuilding plan to look at refocusing resources and to enable investment in areas of greatest need.
In our view, transforming the approach and doing the critical investments I talked about will achieve both short- and long-term savings, and it will also result in changing the nature of the relationship.
Thank you. Those are my opening comments.