Thank you, Mr. Chair. I thank the committee for the opportunity to appear here today. I'd also thank the Algonquin Nation for allowing us to meet here on their unceded territory.
My message for you today is that investing in first nations, Canada's youngest and fastest growing demographic, makes economic sense for Canada. Many studies have demonstrated how closing the gap in socio-economic outcomes for first nations people would benefit Canada's economy. Most recently, a 2016 report from the National Aboriginal Economic Development Board has estimated that benefit at $27.7 billion per year, or 1.5% of GDP.
We have provided the committee with copies of the AFN's pre-budget submission for 2018 which shows how to help make that gap closure happen. The numbers you see are large and, perhaps, surprising at first, but so are the gaps that we need to close. If eliminating those gaps is an economic benefit and the human cost of maintaining them is clearly unacceptable, then one must react with surprise, not at the numbers in our submission but, rather, at the fact that this gap has yet to be addressed.
Each of the items in our submission is important. The gap in child welfare funding, for example, has been the subject of three orders from the Canadian Human Rights Commission, and I'd be happy to address questions about any of those. However, I want to focus my remaining time on the section that we called “Investing in First Nation Governments”.
Canada tells us that the 2% cap on annual increases to first nation budgets has been lifted, and we are very pleased to hear that. But the areas identified under that heading—band support funding, minor capital, operations and maintenance, and administration of income assistance—have yet to see an annual increase of more than 2% since 1997.
The cumulative loss against inflation and population growth in those areas over 20 years is equal to the $9 billion identified in our submission for 2018-19.
This is what it will take to redress the damage done, to build capacity in first nations governments as the Indigenous and Northern Affairs Committee of the House reported in its default prevention and management study in June of this past summer. Perhaps most importantly, this capacity is needed for effective administration of the programs and services that will help close the socio-economic gap between first nations citizens and other Canadians to give effective use to the significant investments that we have seen in budgets 2016 and 2017.
The AFN is working with the Government of Canada on options for a new fiscal relationship between Canada and first nations governments. At the core of that work is the need to treat first nations governments as governments, so that they can deliver results for their people, so that they can close the socio-economic gap that exists between first nations citizens and the rest of Canada.
In order to support this, we must build the administrative and financial management capacity in first nations governments that has been negatively affected by the underfunding of the past 20 years. Eliminating the socio-economic gap will provide a net economic benefit to Canada and it will save lives.
Overcoming 20 years of neglect will cost $9 billion, and we urge you to recommend that investment.
Wela'lin.