Indigenous and Northern Affairs Committee on April 23rd, 2009

[The Chair, Conservative, Bruce Stanton]

Good morning, colleagues, witnesses and guests. In this 15th meeting of the Standing Committee on Aboriginal Affairs and Northern Development today, we will be examining the Auditor General's report.

So this morning we have the Auditor General, Ms. Fraser, to discuss her report.

Madam Fraser, welcome to our committee. We'll be discussing your report this morning, of course, and in the course of your opening comments you can introduce your assistants who are with you here today. You'll have roughly 10 minutes. You're the only presenter this morning, so if you need a little extra time, that's perfectly acceptable. We'll then go to questions from members.

Members, I would like us to go until about 10:45 this morning, because we have about 15 minutes of committee business to wrap up before we finish at 11 o'clock.

Madam Fraser, the floor is yours.

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

Thank you, Chair.

We appreciate this opportunity to discuss chapter 4 of our March 2009 status report, entitled “Treaty Land Entitlement Obligations”. I'm accompanied today by Ronnie Campbell, assistant auditor general, and Frank Barrett, principal, both of whom are responsible for our work on aboriginal issues.

Treaty land entitlement agreements between the crown and first nations set out how the government will provide land to first nations that it failed to provide in accordance with historic treaties. The fulfillment of treaty obligations extends beyond the promise of land. Treaty rights are recognized and affirmed in the Constitution Act and, as such, are constitutionally protected.

Our office first examined the government's fulfillment of treaty land entitlement obligations in 2005. These obligations include the conversion of up to 1.4 million acres in Manitoba, and up to 2.7 million acres in Saskatchewan, to reserves once they have been selected for conversion. That audit specifically examined Indian and Northern Affairs Canada's progress in converting land selected under these agreements to reserve status in those two provinces. The audit also examined whether the department was managing the conversion process in a way that was consistent with its legal obligations to first nations.

The 2005 audit found a number of deficiencies in the department's management practices for meeting its obligations, such as inadequate planning and an absence of targets for land conversion. The audit found that these deficiencies limited the department's progress in converting lands to reserve status, in particular in Manitoba. Our 2005 audit found that about 58% of acres selected by first nations in Saskatchewan had been converted to reserve status, while only 12% of these lands had been converted in Manitoba. In that audit, we made eight recommendations, most of which focused on the need for the department to improve its management practices. The department agreed with our recommendations, and in 2006 the Minister of Indian Affairs committed the department to converting 150,000 acres of land in Manitoba to reserve status in each of the following four years.

Our recent audit examined the department's progress in converting land to reserve status and in implementing the recommendations from our 2005 report. We found that Indian and Northern Affairs Canada had made significant progress in converting land selected by first nations to reserve status.

Since 2005, the Department has converted over 315,000 acres to reserve status in the provinces of Saskatchewan and Manitoba. This represents a 42% increase in land conversions in just three years. In Manitoba alone, over 227,000 acres have been converted to reserves since our last audit.

This follow-up audit also found that the Department has made efforts to improve its communications with First Nations and work more closely with them on plans to convert outstanding land selections. However, our 2009 audit also found that Indian and Northern Affairs Canada has not made satisfactory progress toward implementing several of our recommendations for improving its management practices to meet its obligations to First Nations, in particular in Manitoba.

For instance, in that province, the Department has not developed a plan that outlines how it will manage its operations to process outstanding selections within a reasonable period of time. It has also not tracked processing times, and could not demonstrate that these times have improved over the last three years.

The continuing management weaknesses identified in this follow-up audit are of particular concern, as they relate to treaty obligations that Canada incurred more than a century ago. Our audit found that over 430 selections representing close to 650,000 acres of land remain to be converted in Manitoba. In Saskatchewan, over 700 selections representing 451,000 acres remain to be converted. Our audit concluded that without sustained management attention to correct the weaknesses we have identified, the department risks being unable to sustain its progress in converting land to reserve status.

We understand that you may also wish to discuss recent audits we have undertaken that focus on Indian and Northern Affairs Canada's responsibilities in Canada's north. In recent years we have conducted three audits in this area.

In November 2003, we reported on the department's progress in transferring federal responsibilities to the north. This audit found that the department's performance on implementation of both the Gwich'in and Inuit of Nunavut land claims left considerable room for improvement. We found the department's processes for managing its responsibilities under these agreements to be incomplete. They lacked clear milestones and feedback mechanisms to assist in meeting its obligations. Most notable was the department's focus on completing specific activities required in the land claim's implementation plans, rather than on respecting the spirit and intent of these agreements.

In April 2005, we reported on Indian and Northern Affairs Canada's development of non-renewable resources in the Northwest Territories. This audit concluded that the department was not adequately managing its responsibilities for approving the development of non-renewable resources in the Northwest Territories. The department failed to provide public boards playing a key role in the development of these resources with adequate direction and the appropriate management foundation necessary to carry out their responsibilities.

In October 2007 we reported on the Inuvialuit Final Agreement. We found that the federal government had not met some of its significant obligations under this agreement, often because it had not established the necessary processes and procedures, or identified who was responsible for taking various actions. The audit also found that 23 years after the agreement came into effect, Indian and Northern Affairs Canada still had not developed a strategy for implementing it and had taken no action to ensure that progress toward achieving the principles of the agreement was monitored.

Mr. Chair, some of our observations in both the Treaty Land Entitlement and Northern audits highlight the importance of critical factors that we identified in our 2006 Status Report. In that audit, we identified seven factors that appeared to have been critical in implementing our recommendations. The presence of some of these factors enabled the successful implementation of our recommendations. The absence of some of these factors hindered the implementation and, in turn, impeded significant change in the lives of First Nations people and Inuit.

The seven critical factors we identified in 2006 were: the need for sustained attention on the part of senior management to effect lasting change; the importance of coordination among federal organizations delivering similar programs; the need for meaningful consultation with First Nations; the value of developing capacity within First Nations communities; the importance of establishing First Nations institutions; the potential for conflicting roles of Indian and Northern Affairs Canada in its relations with First Nations; and the necessity for an appropriate legislative base for First Nations programs.

Our experience in conducting audits of Indian and Northern Affairs Canada has shown us the importance of these factors in ensuring success of first nations programs.

This concludes my opening statement. We will be pleased to answer any questions committee members may have.

Thank you.

[The Chair, Conservative, Bruce Stanton]

Thank you very much.

We'll now go to questions from members, beginning with the Liberal Party and Mr. Todd Russell.

[Todd Russell, Liberal, Labrador, NL]

Thank you, Mr. Chair.

Good morning, Ms. Fraser, and to Mr. Barrett and to Mr. Campbell. I'm glad to have you here. I want to thank you for your ongoing work, particularly on this file.

You did mention a number of different audits you conducted, and I want to refer to one from last year, which is the first nations child and family services program. I want to particularly focus on your comments about the funding of services under this particular program. In your audit, when you talk about funding you say the funding program is inequitable, you say the funding formula is outdated, the formula leads to funding inequities, the formula is not adapted to small agencies, and the program funding is not properly coordinated. All of this, I guess, is against a backdrop of over 8,300 first nations children in care. There is no doubt, when we talk about inequities from your report and from many reports, that the funding of family and child services on-reserve does not meet the standard of those off-reserve. They do not receive adequate funding.

You also make the point here that in Alberta they're negotiating a tripartite enhanced prevention approach and that, when fully implemented in 2010, this is going to increase the funding maybe by 74%. You also make the point that even that increase may not be adequate to meet the needs.

So that's Alberta in 2010, and we have a hell of a lot of other provinces besides Alberta.

Just recently the public accounts committee commented on this particular issue and basically made the point, well, we already have provincial standards in place; why doesn't the department adopt those provincial standards and then adequately fund them? The response from the department was, no, we're really not going to go to that approach; we're going to look at the Alberta model and see what happens with the Alberta model and maybe look at negotiating other agreements across.... So we're looking at 2010, then a further rollout of these tripartite enhanced prevention approaches.

I don't see our getting there quickly enough to help save the lives of children. What's your sense about that? Is there a better approach to achieving the objectives of this particular program?

I would also like your comments on this. As with many programs, there's no legislative mandate or approach to it. Would it be far better to have legislation in place that clearly outlines roles and responsibilities, deliverables. We talk about accountability all the time. Wouldn't legislation help from an accountability perspective and also hold the government to greater account, and not on a wing and a prayer sometimes, in trying to deal with crises?

I want your comments on that because I think it's a hell of a blot. I don't give a damn what colour of government we have in our country; something needs to be done.

[Sheila Fraser]

Thank you, Mr. Chair. If I could, I'll spend a couple of minutes just explaining some of the problems with the funding formula.

That formula was 20 years old and had not been modified in 20 years. It is, as I say, formula-based, so there is a presumption that a certain percentage of children and families will require this care throughout the various communities. We note in the report, of course, that the percentage varies significantly. I think the base was 6%, and we saw in some cases that the communities actually went up to 23% or 28% of children and families who actually needed these services. So if they're only receiving based on a formula of 6%, there's obviously a gap in that.

One of the other difficulties that arise from the formula is that it hasn't been adapted to take in new services and new kinds of services, so while provincial agencies and governments have gone much more toward preventive services, those were really not being funded under the funding formula. What was being funded, in fact, was taking children into care. So one has to question it. We make the comment that there are so many children in care. Well, that's perhaps a consequence of the way the funding is done. If you can't get preventive services and the only way you can provide services is to take them into care, it's perhaps not surprising that there are so many being taken into care.

I should point out as well that the department's policy is that these children and families should receive comparable services. They've never actually defined what they mean by comparable services. But we would sort of interpret that to at least look at what the services are that are being provided by the various provinces in this area.

There is clearly, in my mind, an underfunding in the program, and I think the agreement with Alberta shows that quite starkly when the funding is going to go up by 74% or 75%.

Some of the services are already provided by provincial agencies. In those cases the federal government will pay, if you will, the bill from the provincial agencies. So they will fund at that higher level. It's when it's first nations agencies that they fund at a lower level. I think it raises a lot of questions. It's not surprising that these agencies are struggling to deliver the services if they're being funded so much less than their provincial counterparts.

The departments certainly should have the information to be able to do the comparison with provincial, asking what the provincial rates are in the services, because in many cases they are actually paying those. We didn't find that they had done that kind of analysis and we would have expected them to do that.

As for the legislative approach, that is one issue we have raised. Most of the programs are based on policy. Very few have an actual legislative base to them. In almost all of the audits we do, the question always comes up of roles and responsibilities. It's a question of who is actually responsible for what, and what level of service should the federal government be providing. So if there was more clarity around that, I think that would also help. But then of course the resources have to be commensurate with that responsibility.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Russell.

We'll now go to Mr. Lemay, of the Bloc Québécois.

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

Ms. Fraser, thanks to you and your team for being here.

I read your opening statement, Ms. Fraser, and I have a question about it. You say, “The seven critical factors we identified in 2006 were: ...” and then you enumerate them. You seem to restrict them to the relations the government must have with the northern aboriginal communities. Shouldn't that apply to all the files the department handles, whether it be those concerning land claims or those involving northern development?

[Sheila Fraser]

It applies to everything.

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

All right. So my perception was correct.

Ms. Fraser, I read your document. We were also given a document entitled, “Road to Improvement: The Review of the Regulatory Systems Across the North”. It's the department that prepared it. I was wondering whether you were aware of it. In 2007, the minister appointed Mr. McCrank to conduct a study. This is what's called the McCrank Report. I would understand it if you hadn't read it, but someone on your team may be aware of it.

[Sheila Fraser]

My colleague probably is.

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

Do you believe that the McCrank Report and the responses that the department could give to it might be able to respond to the concerns you have regarding the department's actions in the North? I don't know whether my question is clear.

[Ronnie Campbell, Assistant Auditor General, Office of the Auditor General of Canada]

That's a difficult question because the McCrank Report doesn't really talk about that problem.

He doesn't really talk about the problem that we're trying to resolve. It's as if everyone knows what the problems are with the regulatory regime and he's developed some proposals to improve it.

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

I don't mean to interrupt you, but I believe you're absolutely right: the seven factors are real.

The second factor talks about “the importance of coordination among federal organizations delivering similar programs.” We have a serious regulatory problem. I was wondering whether the McCrank Report could, at least in part, respond to those remarks, which I think are appropriate.

You can give me an answer later; I don't need an answer today.

[Ronnie Campbell]

We haven't really looked at that report. We're aware of it and we've discussed it with the department. We will be looking at it as part of future audit work, but we haven't really looked at it in detail.

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

I know you're going to conduct other evaluations because a lot of things are going on in the north. May I suggest that you consider this report in your next evaluation? I sincerely admit I find it very hard to see how the department will be able to implement this report and how much time it will take. After three years, I still have some doubts about that. What do you think?

[Ronnie Campbell]

Most of what Mr. McCrank is proposing would require changes to some of those land claims agreements, which are constitutionally protected.

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

You read it and you understood.

Ms. Fraser, I listened to what you said and I've read a lot. I told you I did my homework. Whether it's the Liberals or the Conservatives who are in power, the problem dates back a number of years. Some agreements and treaties are signed and binding on the Crown. Don't worry, in Quebec we can resolve a lot of things, but, for the moment, we are in Canada.

The problem that arises is that, currently, agreements and treaties have been signed. You say that, since 2005, the department has not accounted for all the time it devotes to converting lands into reserves. These are commitments.

What can we do to force the government to comply with those agreements?

[Sheila Fraser]

I think that's an excellent question. The government signs agreements and seems to think it has succeeded, whereas that's just the start of a process. That's a major problem.

On a number of occasions, we've noted that there was no plan to implement the commitments. We even had a major debate with the department to tell it that it should not dwell on the objectives of the agreement but rather on specific conditions.

I'll give you the example I always cite. An agreement was reached in the north to increase the number of aboriginals working in the service sector. One of the conditions of that agreement was that a meeting would be held every year to assess the progress made. We asked them what progress had been made and how they had gone about evaluating it. They told us that their commitment was to hold one meeting a year. We won't get far with an attitude like that.

The Inuvialuit agreement was signed 26 years ago and there are still lands that have not been transferred and others that have been transferred inappropriately. The agreements are not well administered, and the managers don't pay enough attention to them. In many cases, there is no plan accompanying the treaties.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Lemay.

Now we go to Madame Crowder for seven minutes.

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

Thank you.

Thank you for coming before the committee. I apologize for being late. Unfortunately, I was meeting with citizens from Garden Hill about the death of a child.

In preparation, I went through the report. Since 1998 we have had a litany of failure on the government's part--it doesn't matter which government--to meet its obligations. In the most recent report, under the treaty land entitlement, you talk about the disparities between Manitoba and Saskatchewan, for example.

Earlier, in response to Mr. Russell's question, you also touched on funding. I know that you appeared before the Senate committee last night, and one of the questions that came before you was roughly around why the department isn't able to deal with this.

Funding seems to be a constant thread, whether we're talking about health care, treaty implementation, education, or water. It doesn't matter what it is. I think there's an acknowledged disparity between what first nations receive versus what Canadians off-reserve receive from municipalities or provincial governments or their federal government.

In your view, is it possible to get a reasonable estimation of the funding that would be required in order that first nations would receive funding comparable to what Canadians off-reserve receive?

[Sheila Fraser]

I think it is a responsibility of the department and the government to know the level of services that they should be providing. Regarding child and family welfare or education, if they have made a policy decision to give comparable services, they should know what that level of service means and what that translates into, and they should be able to cost that. We have never seen that being done.

I said last night at the Senate hearing that I think if that exercise were done, we would probably all be shocked at what the gap is. We don't often talk about funding, and it's kind of unusual for the Auditor General to be talking about funding, but it's becoming very clear that it is a major issue in this department. In some of the reports, we mention that the first nations population is growing by about 10% or 11% a year, and funding is growing by 1% or 2%. Just on the face of it, the disparities are likely to get greater.

The department should be able to say, for each service they provide, what the level of service is, what the service standard is, and how much that costs. They can easily get the comparatives from provincial governments, or municipal governments, or whoever else provides those kinds of services.

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

So would there be a role for the Auditor General's department in that? Could we request the Auditor General's department to do that, in the absence of the department doing it?

[Sheila Fraser]

We were actually talking about that last night. We've done a number of audits on specific programs. I think we have to think about our approach going forward, and maybe by continuing to do these specific programs we aren't getting at the real issues. We are raising issues, obviously, in specific programs, and we are making recommendations, but we have to do something broader. Is it some kind of funding comparison like that? Is it looking at management frameworks and structures? I think we have to try to dig deeper into why we are seeing the same problems coming up consistently.

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

When you mentioned funding, you also talked about the department's funding. Are you suggesting not only that the first nations are underfunded but that the department itself is underfunded in terms of its attempt to deliver?

[Sheila Fraser]

Well, yes and no. When we talk about funding, we're talking about both. If you have an expectation about what the department should be doing to meet land obligations, or provide education, or do the monitoring to ensure that the services are being...it takes people, and it takes management oversight of all of that. I suspect the department itself is underfunded as well.