Indigenous and Northern Affairs Committee on May 28th, 2009

[Steve Berna]

No. We're subject to the rules under our act, which was created and which calls for an audit by an independent audit firm.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Okay. I'm just surprised that you'd go to 30 initially and that you wouldn't go to 20.

[Steve Berna]

That's not our number; that's from the banking syndicate. We have supplied letters to the Minister of INAC, and it's also based on feedback from the investors about what they're comfortable with. Thirty times is not unusual. The MFA is up to 70 to 80 times right now.

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

I'm staying on the side of prudence, these days especially.

I'm involved with a small foundation. It's possibly one of the very few foundations in the country that hasn't lost a single penny in this last year because we're not into anything risky. So that's my nature. When you're starting out, I would have thought that if you were going to err, you would err on the side of prudence. I would have thought 20 would have been a good place to start. But that's just my opinion.

[Steve Berna]

The 30-times leverage is not something that would happen in year one. If we received $100 million, it's most likely we would borrow $200 million to $300 million in the first year, a factor of two or three times.

The second year, depending on client demand, we might end up with $400 million or $500 million. So the $3 billion would be developed over probably a five-, six-, or seven-year period. It would not happen in year one. Market confidence would allow it to grow as the years progress.

[The Chair, Conservative, Bruce Stanton]

Thank you, Mr. Bélanger and Mr. Berna.

Mr. Lévesque, go ahead, please.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Thank you, Mr. Chair.

Ladies and gentlemen, I'm going to give you time to put on your headsets.

Mr. Chair, I hope you haven't started your stopwatch.

[Deanna Hamilton, President and Chief Executive Officer, First Nations Finance Authority]

Sorry, I apologize.

[The Chair, Conservative, Bruce Stanton]

Of course. Bien sûr.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Can you hear the simultaneous interpretation?

[Deanna Hamilton]

Yes, thank you.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Mr. Chair, the FNFA is a non-profit corporation, isn't it? You are protected by a federal statute. Do you have an obligation to prepare an annual report?

[Steve Berna]

Yes.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

You aren't required to publish it on the Internet.

[Steve Berna]

The obligation is not there, but we do it anyway, for transparency sake. It is fully accessible on our website.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

I checked your site. You produced annual reports from 1995 to 2002. Those reports are available on the Internet. There have been no reports since 2002. Is there some reason why you've done that? Does that undermine your funding efforts?

[Deanna Hamilton]

We posted it up until then because we were in the process of approaching legislation. It will be posted. In fact, I will certainly look into that upon my return and see why it hasn't been.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

To what extent do you represent the first nations of Quebec?

[Deanna Hamilton]

We are working with a gentleman who is very fluent in French and has been working with the French first nations. I am very happy to say we are finding an awful lot of support there, especially for the other source revenues. The other source revenues are something I think first nations right across this country are willing to put up and be able to leverage.

I just want to tell you how excited I am that finally first nation governments will have the same opportunity as other governments in Canada to be able to do exactly what their neighbours do for the same advantages.

[Steve Berna]

In 2008 and 2009, our year-end that just finished, the focus was on the 52 first nations that were doing property tax. The first nations in Quebec aren't interested in that.

What we have done since April 1 this year is put into our budget and our agenda for this year a focus on the other revenue streams. When the Quebec first nations learned that the other revenue streams were not a method of forcing them to do taxation, but were allowing them to build their economies on their own terms with their own revenue sources, they agreed to allow us to look at their financial statements, the same as they did in the Atlantic area. There are five of them. And they've also agreed to provide letters of support, should we ask for it.

So last year, property tax; this year, other revenues. And Ontario and Quebec have become interested this year because the agenda is not tax-based this year.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

If I understand correctly, before this year, the first nations of Quebec, and perhaps those of Ontario as well, didn't work together with you.

[Steve Berna]

That's correct, because the focus was at that time property taxation. They were not interested in property taxation. The moneys we received this year allow us to focus on the other revenues, which is where their economies will be built from.

[Yvon Lévesque, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Do you have to have an agreement with the AFNQL, for example? Does every nation do business with you? Or is it the association of first nations from a given area that does it?

[Dr. Tim Raybould, Senior Policy Advisor, First Nations Finance Authority]

Thank you very much.

By way of answering your question, and also focusing on the north, there are many first nations and aboriginal groups across Canada who can use the First Nations Finance Authority. Some of the focus originally was on property tax because a number of first nations are collecting property tax. That's not the case in Quebec; I think there are only one or two first nations that are collecting property tax in Quebec. But the objective of the organization, and particularly for communities that have self-government of land claims agreements--so it's important in northern Quebec--is for communities that have stable revenue streams to be able to leverage those revenue streams in a safe way in a manner that is consistent with how other governments raise revenues for their public purposes. So we see the Quebec first nations as being integral and apart.

But to answer your question, no, we don't need a territorial or provincial organization to support the FNFA. It's national in nature by the legislation.

[The Chair, Conservative, Bruce Stanton]

That's all the time we have. I'm sorry. Thank you very much.

Merci, Monsieur Lévesque.

Now we'll go to Madam Crowder.