Finance Committee on Oct. 5th, 2017

[Bertha Rabesca Zoe, Legal Counsel, Tlicho Government]

I don't have prepared notes. We could have something for the committee in the next while, if we need to.

[The Chair, Liberal, Wayne Easter]

Everything is being recorded in any event, so you're okay there.

[Bertha Rabesca Zoe]

Okay.

My name is Bertha Rabesca Zoe and I'm legal counsel with the Tlicho government. I'm here to talk about self-government funding. As we all know, the Prime Minister has stated that nothing is more important to him than the indigenous people and the reconciliation efforts. He has also said that building nation-to-nation relations is key and front and centre for this government. We applaud the government for that.

The Prime Minister's words are also reflected in the mandate letters that ministers Bennett and Philpott have received. Currently, one that came out with the splitting of the department, the mandate letter to Minister Bennett talks about building capacity and developing a whole-of-government strategy. As land claim bodies, that's something that the Tlicho negotiated. We have a self-government and land claims agreement that has been in effect for 12 years now. We've always talked about a whole-of-government approach to our land claims. We didn't sign the agreement with INAC, but with Canada. In the mandate letter, it says the minister should work with the Minister of Finance to establish new fiscal relationships based on sufficient, predictable, sustained funding. These are the kinds of words that industry likes to hear and work under: predictability and sustainability. We do as well, as land claim bodies.

I bring this matter forward to this committee because you're going to be looking at what should or what could possibly go in this coming year's budget. One of the things that the Prime Minister has been talking about, as well as the minister of Indian affairs—it's a new name now, it's not INAC, it's INAN, I think...acronyms—is gaps. As we all know and as you've been hearing here, there are infrastructure gaps. There are social gaps and housing gaps. There are so many gaps here for indigenous people. We're down here and the rest of mainstream Canada is up here.

Through the financing arrangements we have with Canada, one of the things that we have is an agreement.... The previous government came up with a new funding model. We call it the Valcourt document or the blue book, which is based on the Indian Act model, which we tried to get away from. As you know, this government is committed to doing away with the Indian Act, so since the new government has come into place, the minister has agreed to work with self-government groups across Canada on collaboratively developing a new fiscal policy, which is unheard of. It's a whole new beginning. It's a process that we're very involved in and out of this process, we've come up with a funding model that reflects the real costs of governance.

We've gone through the whole exercise of figuring out how much it would cost for each self-government that's out there in Canada. There are about 20-something self-government groups in Canada. There are four proposals that we've submitted. One is on a new methodology for determining governance funding that determines actual costs for a government. We've worked out a methodology for that and we've submitted some proposals.

The other three proposals are for what we call catch-up funding. One is on infrastructure. When you take over a community in a self-governance situation, you also acquire a lot of assets and liabilities and a lot of these are buildings that you end up owning are dilapidated and unusable, but you don't have a choice. There's a lot of these infrastructure gaps that we'd like to look at, as part of this proposal.

Another proposal has to do with public housing. One of the questions here is about how to be more productive. What would it take for people to be more productive? There are ample studies out there that show that if you improve social housing, you improve a lot of other things that come along with that, so we've put together a proposal on housing.

The fourth proposal has to do with social gaps. This government has been talking about bridging that gap. Social gaps are huge, so these proposals talk about what those gaps are, how to identify those gaps, what our baselines are and what we have in our communities right now. We need to do a lot of work in those areas to be able to say, “Here's the problem and this is the gap, so now what do we do to close this gap and move forward?”

Those are the proposals that we've submitted. Again, I'm not speaking only for the provincial government, but on behalf of all my colleagues who have worked collaboratively with Indian affairs on these proposals that we submitted to them, but the collaborative process itself is going very well. It's a whole new relationship building that this government is pushing and very committed to.

When we talk about self-government situations or land claim agreements, there are 4,000 citizens and we own 39,000 square kilometres of land surface and subsurface. That's about half the size of Nova Scotia. Those are the kinds of relationships that we have with Canada, in terms of treaty building and building those kinds of relationships that deal with jurisdiction, resources, lands, access, and industry. Industry is very crucial in our territory and we have relationships with industry. We have IBAs and other arrangements as well. Our businesses are very dependent on that.

We did a study on our land claims and the impact on the northern economy about four years ago. The study said that we've contributed about half a billion dollars to the northern economy through our land claim agreements. Even by themselves, land claim agreements are crucial to the economy of the north, and to capacity building, and all of those things that come along with that. Self-governance is also crucial because in order to be adequately funded, we need to be productive in our involvement in nation building, not only for ourselves, but for the north, as well as Canada.

My submission today has been to make you aware that there are these proposals that have been submitted to Indian affairs and we hope to have them included in the 2018 budget. We're really hoping that the self-government funding model would be put in this year's budget.

That's my submission.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Bertha. If you could send us that social housing proposal, it would be helpful as well.

We're turning to the Dene National Chief, Mr. Erasmus. Welcome.

[Chief Bill Erasmus, National Chief, Dene Nation]

Mr. Chairman, thank you for the invitation to attend the proceedings of the standing committee.

I'm the national chief for the Dene Nation, but also the Assembly of First Nations' regional chief for the Northwest Territories, so I have a number of hats that I have to wear.

Actually, a lot of what I will say this morning will complement what Ms. Rabesca Zoe just commented on. There is an Assembly of First Nations-Canada fiscal relations table that was set up approximately a year ago and the whole initiative is designed to look at the funding arrangements between first nations and the crown. As you're probably aware, we don't entirely know how much money is annually set aside for us. It is commonly called Indian money that comes from the Treasury Board, which essentially comes from the wealth of the land, not from taxpayers' dollars. The difficulty is that we don't know exactly how much money is set aside each year and then we don't know where the money goes. We know some of it goes to the provinces, some to the federal government, some to the territorial governments, and then some to ourselves.

Part of the exercise is to look at that and help to streamline those dollars to our communities, so that we get the dollar value for the money that's supposed to be allocated to us. That whole exercise is in play. There was a recent announcement that you may have caught this summer between the AFN and the Indian affairs department where they announced that they're going to initiate the ability for our people to carry over surpluses from now on. What has happened over the years is that we're never able to carry over surpluses, so you find that, at the end of the fiscal year in March, everyone is trying to spend because they don't want to send money back to the federal government.

That'll provide more stability, security, and long-term financing, so that we're able to carry on our own affairs in a much more comfortable way. That's one of the recommendations. There should be a lot more. Right now, there are engagements taking place across the country with that committee. We will have one later this month, here in the north, and we'll bring our concerns forward at that.

A part of this is also related to the relationship we have with the territorial government. As you're probably aware, our people have relocated into communities in the last 40 to 60 years and prior to that, the territorial government assumed authority over our programs and services. Therefore, in competition with the federal government, there's always somebody taking care of our affairs except us. The Tlicho government is really the only government in the north that is governing themselves. That is only four communities out of 30, so the great majority of us don't have that ability to govern ourselves, although we're trying to strengthen this government-to-government relationship that we have. Since the territorial government assumes that authority without our agreement, it makes it very difficult for us to plan and to make our own communities function the way we went them to, so that's an ongoing struggle that we have.

One of the good things that is also happening with this government is that they've agreed to have a federal policy and legislative review that you're aware of. It is headed by Justice Minister Jody Wilson-Raybould and a number of other ministers. They're looking at old policies, practices, and legislation, like the Indian Act, and they want to come up with new ways of dealing with us.

We're quite pleased to see that because we've just recently gone through this whole exercise of devolution in the Northwest Territories. It was not planned out well. It was forced upon many of our communities. We want that as part of this review because to date, there are at least 15 or 16 communities that have not agreed to the devolution of authority from the federal government to the territorial government. The big reason is that these people are all at negotiating tables and are trying to work out a political and fiscal relationship with the crown, so that whole body of legislation has to be reviewed as part of this.

We're not going to come to you and ask for money or tell you how to allocate it, but there needs to be a realignment. There's a reason the federal government allocated monies to our people, from the early days. It's a federal commitment. It's an ongoing commitment from the Treasury Board. We need to straighten out the process, so that funds are given directly to our people and there is no more middle man, whether the allocation is done through the Department of Finance, or Indian affairs, or the provinces or territories. The arrangement needs to be with us. If you can help to understand that, it may take some work with—is it the Auditor General's office? I get mixed up with the titles. In any case, a number of departments will need to work together on this.

Those are the comments I wanted to make. I'm also quite pleased to have you in the north. .

[The Chair, Liberal, Wayne Easter]

Thank you very much. We're certainly pleased to be here because there's nothing like being on the ground. I wish we could be a little further out of Yellowknife, but we don't have the time.

I'd like to thank all of you for being witnesses.

We're only going to have about five minutes each for the rounds of questioning because we have to be over at the legislature and we have a couple of open-mike presentations.

Go ahead, Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chairman, and thanks to everybody for their presentations.

We probably need a few more days to talk about all the different subjects that have been raised today. However, I'm very happy that the finance committee is here. I think this is their first visit to the north. There's a lot of interest and time is limited.

I'd like to make a couple of points.

Billy, I'll just let you know that I think the indigenous affairs committee is coming north in two weeks from now. It'll be a good opportunity to raise some of the issues.

A very important issue we have is the way that money flows to the north. It's not a straightforward system. There's a lot of finger pointing going on back and forth between the federal government and the territorial government on indigenous responsibility. The mandate for indigenous affairs stops at the border. We don't live on reserves. As you know, we have public communities and that really poses a lot of challenges. We need to figure out how this money flows to us, if it does, and if we're on par with everybody else. This is a subject I've raised many times.

Bertha, to the point that you raised on the land claims agreements, they've been doing some really good work and I'm glad that you're moving forward.

I'm trying to get an understanding of how much money we're talking about. With the 20 groups moving forward on their various proposals, what should this committee expect as a lump sum that you would like to see in the 2018 budget?

[Bertha Rabesca Zoe]

In the methodology that we worked out, there is some basic stuff that's required for governance, such as staff, to operate as a government. I'll set the context in terms of self-governing groups. There are about 11 in the Yukon and then in the Northwest Territories, there's ourselves and Deline. In B.C., there are some as well, such as the Nisga'a, Tsawwassen, Maa-nulth, Westbank, as well as others. Some of these are smaller than the Tlicho, so then you get problems related to aggregation. Some of the communities are single communities. For instance, the Tlicho were a regional self-government, so we have four communities. These things all need to be factored in.

For governance, we're looking at roughly between $4 million and $5 million for each community. These numbers are based on the costing exercise that we did.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you.

Mr. Chair, I have one more quick question both for John/Jack and Tom regarding how we make the north a better place to invest. We talked about some of the suggestions, like the mineral or infrastructure tax credits. We also recognize that our north is still very pristine. There is not much in terms of infrastructure investment. Regarding transportation, especially airports, they are still too small. Most of the communities don't have roads.

When I raise the issue of making the north a better place to invest and I start suggesting tax credits, it's always flagged. “Do you want tax credits or do you want infrastructure or are you asking for both?” Of course, I'd love to have both, but if it was a toss-up and if there were a choice, where would we go? Where should we be leaning? Is it on the infrastructure side or on the tax credit side?

[A voice]

Infrastructure, for sure [Inaudible—Editor]

[Michael McLeod, Liberal, Northwest Territories, NT]

Maybe you could say that into the microphone—

[Gary Vivian, President, Northwest Territories and Nunavut Chamber of Mines]

I'm Gary Vivian.

In response to Mr. McLeod's question, certainly industry would be more interested in infrastructure rather than tax credits, if we had to make that choice. We see that as the quickest way to increase investment in both territories.

[The Chair, Liberal, Wayne Easter]

I didn't quite hear the answer. In both territories...how did you respond to that?

[Gary Vivian]

My answer to Mr. McLeod's question was that infrastructure would be the critical component, if we were putting tax credits and infrastructure on the table. We would choose infrastructure every time. It's the quickest way to increase investment in both territories.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Kelly.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you.

We had a number of really good, quite targeted, and specific recommendations from just about everybody. That is very helpful for the committee's work.

I want to talk about the carbon tax. Mr. Wever, you have made some strong points. Observers have noted that many of Canada's most vulnerable people will be among those who will be affected most by this carbon tax, as it comes into force and the effects are felt. The carbon tax makes food, home heating, and transportation more expensive.

Nowhere will these things be felt more acutely than in the north. We've heard every witness, in one way or another, touch on the challenges of living in remote areas and how much more expensive everything is because of the infrastructure challenges and deficiencies. We heard this morning about a jar of jam that costs $2-and-something in Ottawa and—I can't remember the figure, whether it was $10 or $12—it was $12 there. Is there any spare room for additional cost of living imposition in the north?

[Trevor Wever]

I would say no. I think things are stretched as far as they can be, plus some. Everybody in the north is resilient. If you throw us in the dirt, we'll always find a way to get it done, but if we are burdened with a form of carbon tax, that revenue has to go back into supporting greener technology or some realistic alternative for residential and commercial use.

One of the reasons it costs so much for transportation in the north is that our airports are aging. They don't support newer airplanes. In many communities, the only way to get consumables in and out is by air. There's a reason we're still flying around 60-year-old jets that burn tons and tons of gas and even in some airports, you can't get in with a jet.

As for the main economic drivers with the three operating diamond mines, they're producing their own solar and wind power. They're building their own roads. They're doing what they can, and then to throw on a carbon tax.... For one operating mine alone, from what I understand, over 10 years, it's going to add an additional $13 million in operating expenses to their mine. They can't pass that on to the customer. The pie is the same size no matter how you slice it, so if you're going to start chipping away at it, they're going to.... They need to manage their business as best they can too, so the other option is to start pumping more rock through the mill, get it out as quick as you can, and shut the lights off as quick as you can.

There's another project close to Yellowknife that's near to becoming a reality. Their biggest challenge right now is a sustainable electrical energy source. The grid here right now won't support it. They need about 50 megawatts of power. Wind or solar energy doesn't give them the initial bump they need when they turn the switch on for all their big electric motors. There's a tremendous amount of untapped hydro power in the region. Just south of the lake, the Taltson hydro project could quite easily be tapped into the North Slave grid through about 300 or so kilometres of new line. That would instantly give that project the electrical power they need, plus it would take a lot of the communities downstream off diesel and give an additional backup source for Yellowknife.

[The Chair, Liberal, Wayne Easter]

Before I go to Mr. Dusseault, Mr. Erasmus wanted in earlier on Michael's question about how to make the north a better place to invest, I think it was.

Go ahead, Willy.

[Chief Bill Erasmus]

Thank you.

Thank you for that information about the discussion that will take place in a couple of weeks.

You hit the nail on the head. As treaty Indians in the north, the difficulty is that we're treated differently than the people in the south. It's primarily because, for most intents and purposes, we're not on reserve lands. The reality is that our rights are mobile across the country, but if it's a question of property rights, then let's deal with that. If it's a question of the Indian Act, then let's deal with that. We're the only people in the country who need a public government and are unable to govern ourselves.

The other thing is that there's an absence of an economic plan. There really is no economic plan in Canada that we can call a Canadian economic plan. There are none in the provinces or territories. We need to develop a plan, much like we need to develop an environmental plan. Everything's proposal driven. If you look at the tar sands, which is south of us, we're downstream from all that. It's all proposal driven and 100% of the proposals that have been submitted have been approved. There's no future planning. It's just proposals. We need a plan and that plan needs to include first nation economies. What are the economies of the first nations? In the early days, there was a huge reliance on the fur trade. There's a huge transition now, but we need to look at that and work together with these gentlemen here and the other people around the table. It's a small population in the north. We need to use the dollars, so that it reaches all of us.

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

I would also like to thank the witnesses for their presentations.

I will unfortunately not have the time to address a question to each and every one, but I appreciated their presentations nonetheless. I also appreciated your claims to self-governance as well as your desire for greater control over your territory's finances and its programs intended for linguistic minorities.

My question deals with mines. On the issue of infrastructure, there is a chart that surprised me quite a bit, the one that shows the lives of mines here in Nunavut. I am trying to square the massive infrastructure investment required for these major projects with the fact that, for the most part, they are rather temporary and span a fairly short period.

A bit earlier, officials from the Government of the Northwest Territories spoke of a project that was meant to transport electricity to a mine, only that mine had all but run dry by the time everything had been approved. I would like to know what the best solution would be to an issue such as this. These projects are time-limited and yet require costly public infrastructure projects to be carried out.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Vivian.

[Gary Vivian]

Mines do have a finite life. There's no doubt about that, but we consider the exploration and mining industry to be a renewable resource. We don't consider it a non-renewable resource.

Building a road infrastructure, for example, from Yellowknife to Grays Bay on the Nunavut coast would open up a significant territory, which would affect the mines that operate now. What it doesn't include is....

If you think back 25 years ago, there wasn't even a diamond found in Canada. That's how technology has changed. Needs change. When you have that infrastructure to open up significant areas for exploration, it brings significant investment into the community.

It's not just that mines are finite; what it does is turn over exploration opportunities, which we like to call.... Mining is a renewable resource.

Just like Con and Giant, which were based in Yellowknife for 65 years, there is probably a good opportunity for more resources around Yellowknife now. We see TerraX looking at the Yellowknife greenstone belt.

Mines can be a renewable resource, not a non-renewable resource, because exploration and technology change. People's thoughts change about how mines can be found and what minerals become a sought-after commodity.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

An excellent response, indeed. It could also potentially serve as a vector of new development in the future.

The YWCA mentioned how difficult and costly it is to travel between communities. As concerns womens' groups and other groups that fight for social justice, is the current funding consistent with the reality of the situation in the Northwest Territories and the distances involved?

You gave the example of women that require two plane trips to be able to leave their community and find shelter. Does the funding you are given reflect these realities, and if not, do you believe it should?

[Caroline Wawzonek]

I apologize, but I am going to answer you in English.

You'd be hard pressed to find a social justice organization that doesn't suggest they should have more funding. Realistically, as far as funding allocations go, it's an industry. The non-profit industries always operate on a very narrow margin, and that's even more acute in the north, where, as Mr. Wever has already said, you sort of make it work.

Absolutely, if there were more funding that was reflective of the fact that some of the organizations in the north are servicing a population that is extremely disparate, that the programs we're delivering aren't simply being delivered in a large centre or in a large or a single community but into smaller communities—then that would provide that opportunity for travel.

I will give you a specific example with respect to the shelter network that we're currently chairing. In order to bring the five shelters together, it's $10,000 to get everybody into the city for a week. That's the only opportunity to provide meaningful training that is then able to be taken back to these small communities where these projects can be delivered. I know that some of the other groups in town, for example, the Native Women's Association, face a similar challenge, that when they want to bring their membership together for a week of training or participation or development or growth, again, the simple costs of bringing people together are into the tens of thousands of dollars for a week of training. I assume, being that you are all present here, that you can experience the difference that it is to sometimes sit in a room together.

The short answer is that funding that is reflective of the geographic impact and the lack of infrastructure alternative—we have to fly—would certainly make a difference in terms of developing capacity in these organizations.