Indigenous and Northern Affairs Committee on March 1st, 2011

[The Chair, Conservative, Bruce Stanton]

Good morning, members, witnesses and guests.

This is the 50th meeting of the Standing Committee on Aboriginal Affairs and Northern Development. Pursuant to Standing Order 108(2), we will be studying the specific claims tribunal process.

This will be our first meeting on the study of specific claims, and in particular, claims that exceed the threshold that was specified in the specific claims policy and law, that being $150 million. As I say, this will be the first of our meetings on this particular study.

Members, before we proceed, I just want to let you know that we do have a fair bit of committee business today. The agenda will show that we have the first hour set aside for our witnesses. I do think we can probably go a little beyond that first hour if necessary, but I will want to leave at least 45 minutes for our committee business. We will proceed accordingly.

With that, I would like to welcome Colleen Swords, associate deputy minister with the Department of Indian Affairs and Northern Development.

If Ms. Dupont arrives in time, perhaps you can introduce her at that time, Colleen. Then we will go to our next witness.

We'll take each of your presentations in order, and then we'll go to questions from members.

Ms. Swords, please go ahead with your presentation for up to 10 minutes.

[Colleen Swords, Associate Deputy Minister, Department of Indian Affairs and Northern Development]

Thank you, Mr. Chairman.

Good morning, members of the committee.

It is a pleasure to be here, and I thank the committee for the opportunity to contribute to its study of the Specific Claims Tribunal process and the process for addressing specific claims with a value above $150 million. I am hoping that my colleague, Anik Dupont, will join us shortly.

I have a brief opening statement, after which we would be happy to answer any questions the committee may have.

As you are aware, the specific claims process is a dispute resolution option available to first nations as an alternative to litigation. The primary objective of the process is to discharge outstanding lawful obligations to first nations through negotiated settlement agreements.

The Prime Minister announced the Justice at Last initiative in June 2007. This initiative launched a fundamental reform of the specific claims process and was intended to correct a perceived conflict of interest in the process where the government both assessed and decided the disposition of claims. Justice at Last was also meant to correct process deficiencies that had, over time, led to the accumulation of a large backlog of unresolved claims.

The cornerstone of the Justice at Last initiative was the Specific Claims Tribunal Act, a federal statute jointly developed with the Assembly of First Nations and pursuant to which the Specific Claims Tribunal was created. The tribunal is fully independent from the government. It has the authority to make binding decisions with respect to the validity of specific claims and to make financial awards up to a maximum of $150 million. The tribunal resolves concerns about the perceived conflict of interest in the process.

The tribunal will provide first nations with a final and binding decision with respect to the resolution of their grievances when it has not been possible to reach a negotiated settlement. The tribunal offers a final step in the alternative dispute resolution process.

As an independent body, the Specific Claims Tribunal is responsible for developing its own rules and procedure. The Government of Canada provided comments on the draft rules of practice and procedure that were made available by the tribunal and participated in a meeting of the rules advisory committee that was convened by the chairperson of the tribunal in October. I'll defer further comment on the tribunal to my colleague from the Ministry of Justice.

The specific claims policy and process was not designed to deal with exceptionally large-value claims. The Justice at Last initiative recognized that specific claims valued at more than $150 million involve a level of complexity and fiscal significance that warrants a different type of consideration. The process for addressing large-value claims is essentially the cabinet process. Claims valued at over $150 million require the minister to obtain a discrete mandate prior to being accepted for negotiation.

With respect to potentially large-value claims that were accepted for negotiation prior to Justice at Last, discussions with first nations continue. I want to emphasize at this point that there are very few large-value claims. A careful review of our inventory of specific claims reveals no claims with a potential value over $150 million other than those currently in the process.

In keeping with the November 2007 political agreement between the Government of Canada and the Assembly of First Nations, senior officials from the department met with representatives of the Assembly of First Nations to discuss the large-value claims process on a number of occasions during 2009, and also participated in a think tank on the subject sponsored by the AFN.

The views of the AFN, of first nations, and of their legal representatives are well understood by the Government of Canada.

Funding for the settlement of specific claims and awards made by the tribunal is accessed through the $2.5 billion specific claims settlement fund. This was established as part of the Justice at Last initiative. The settlement of large-value claims, that is, claims over $150 million, is not sourced from the settlement fund, but rather from the fiscal framework.

In closing, I would like to provide you with a summary of the progress being made to resolve the backlog of claims that had accumulated prior to the Justice at Last initiative. As of October 16, 2008, when the Specific Claims Tribunal Act came into force, a total of 541 claims were under assessment and a further 144 claims under negotiation. By February 15 of this year, 2011, the backlog of claims under assessment had been reduced to 270 claims and the backlog of claims remaining in negotiations totalled 90.

As you are aware, the Specific Claims Tribunal sets out three-year timeframes for the assessment and negotiation respectively of specific claims. There is every expectation that by October 16, 2011, the minister will have advised all first nations with backlog claims in the assessment stage of the specific claims process of a decision on whether to accept their claims for negotiation. Plans are also in place to ensure that tables that are nearing completion are appropriately mandated to secure settlement agreements.

Since April 1, 2010, this fiscal year, 12 specific claims have been settled at a value of almost $507 million, which is the most money that's been paid out in a single fiscal year since the inception of the policy.

While significant progress has been made, a great deal of work remains to be done, and we expect the coming year to be very busy before the middle of October of this year. We will be continuing to strive to address the backlog of claims and maintain an efficient, effective, and fair process to respond to and resolve new claims.

Thank you very much for your time. I welcome the opportunity to respond to any questions you may have.

[The Chair, Conservative, Bruce Stanton]

Thank you, Ms. Swords.

We will now welcome Pamela McCurry, Assistant Deputy Attorney General in the Aboriginal Affairs Portfolio at the Department of Justice, as well as Deborah Friedman, General Counsel and Director of the Specific Claims Section, also in the Aboriginal Affairs Portfolio at the Department of Justice.

I think Ms. McCurry is going to go ahead.

We'll go ahead with our presentation and then go directly to questions from members.

Ms. McCurry, go ahead.

[Pamela McCurry, Assistant Deputy Attorney General, Aboriginal Affairs Portfolio, Department of Justice]

Thank you, Mr. Chair, and thank you for the invitation to appear before you today.

Appearing with me, as you've said, is Ms. Deborah Friedman, who is the general counsel for the specific claims group of the Department of Justice and the legal services unit at INAC.

The Department of Justice and the Department of Indian Affairs and Northern Development are key partners in implementing Canada's Specific Claims Action Plan, known as the Justice at Last initiative and undertaken in June 2007. Implementing that plan has been and remains a priority for the Department of Justice.

I'd like to briefly do three things: first, tell you about the role of the Department of Justice in the establishment of the Specific Claims Tribunal, including the appointment process; second, update the committee on our department's efforts to clear the backlog of specific claims; and finally, give you an overview of some of the internal process efficiencies we've put in place to speed up the process.

As my colleague, Ms. Swords, has said, the Specific Claims Tribunal is the cornerstone of the Justice at Last initiative. It is an independent federal body, composed of judges, and it has the authority to make final and binding decisions on Canada and first nations on the validity of specific claims that have not been resolved through negotiations. The tribunal can award compensation to a maximum of $150 million.

Most recently, on November 26, 2010, the Minister of Justice announced the appointment of the current members for a further five-year, three-year, and one-year term respectively. As well, the minister announced the addition of three justices to the roster of Superior Court judges who may be appointed to the tribunal at a later date. These are: Mr. Justice W. Larry Whalen, of the Superior Court of Justice of Ontario; Madam Justice Barbara L. Fisher, of the Supreme Court of B.C.; and Mr. Justice Paul Pearlman, also of the Supreme Court of British Columbia.

I'd like to take a moment to comment in greater detail on the judicial appointment process of the Specific Claims Tribunal members. The Minister of Justice, of course, plays an important role in the appointment process. However, the selection of judges to be members of any tribunal must be consistent with constitutional principles around judicial independence. Chief justices alone are responsible for all matters touching on the judicial functions of their courts, including direction over the assignment of judges. This principle also applies to decisions regarding the assignment of judges to acting capacities other than as judges of their courts and includes judges sitting as members of the Specific Claims Tribunal.

The chief justices must be free to decide which judges will be available to hear tribunal matters. In doing so, they take into account the overall priorities of their courts and their assessment of the experience and capacity of individual members of their courts. As well, in order to protect their security of tenure, individual judges must also consent to any proposed appointment to a tribunal.

In the case of the Specific Claims Tribunal, it's important to note that the political agreement signed by the Minister of Indian Affairs and the National Chief of the Assembly of First Nations provided that the national chief “will be engaged in the process for recommending members of the Tribunal in a manner which respects the confidentiality of that process”. This political agreement was negotiated under the auspices of the Canada-AFN joint task force.

The intention of the commitment was to publicly signal that the views of the national chief on the qualifications of potential tribunal members would be taken into consideration, but the ultimate decision in relation to the appointment of tribunal members remains that of the Governor in Council. I want to make it clear that the provision in the political agreement in no way compromised the integrity of the appointment process. This issue was raised by the chairperson of the tribunal in his annual report, and it has been satisfactorily addressed with the tribunal members by the Minister of Justice.

The Minister of Justice therefore received the views of the AFN on the qualifications and experience of potential tribunal members, and he shared them with the chief justices of the relevant courts. The chief justices subsequently provided the Minister of Justice with the proposal of names of those to serve on the tribunal. Ultimately, the minister made recommendations to the Governor in Council, who is, as I mentioned, under section 6 of the act, the person actually empowered to make the appointments.

As you can see, the appointment of the members of this tribunal was a complex and time-consuming process that involved a number of steps and important considerations. Once the members were appointed, the tribunal became a fully functioning, independent administrative body. Neither government nor any other institution can tell the tribunal how to conduct its business.

Under the Financial Administration Act, the registrar of the tribunal carries out the functions of a deputy head of the registry and, as such, is responsible for the overall management of tribunal operations and budget, under the direction of the tribunal chairperson. The registry is a federal government department that reports through the Minister of Indian Affairs to Parliament. This is the usual reporting process for federal boards and tribunals and does not compromise the independent nature of the tribunal.

The tribunal has consulted with the Department of Justice regarding matters of administration. For example, in July 2010, we met with the chairperson to hear concerns about operational issues. Justice was able to suggest approaches that would assist the tribunal in a manner that was appropriate in light of its arm's-length relationship with us.

The tribunal is a statutory body with the power to make its own rules of process and procedures. That said, pursuant to a political agreement between the AFN and the Minister of Indian Affairs, officials from the Department of Justice and the Department of Indian Affairs worked together with the AFN to prepare a joint submission on the proposed rules of practice and procedure. This submission was provided to the tribunal in December 2009.

The tribunal members of course published their own version of the rules of practice and procedure in June 2010. Canada, through my office, was one of 11 stakeholders that provided comments to the tribunal. These 11 stakeholders later formed an advisory committee, which met with the tribunal members in October 2010.

Following these meetings, the tribunal released a final draft of the rules. The draft sets out a flexible process, and it also makes reference to practice guidelines, which to our knowledge have not yet been developed. The Department of Justice has offered assistance to the tribunal as part of the advisory committee if there are any further discussions on the development of these practice guidelines.

The tribunal is now working closely with the legislative drafting section of the Department of Justice to finalize the rules for publication in the Canada Gazette, part II. It's expected that the rules will be in place shortly and that first nations will be in a position to file claims with the tribunal by the end of April 2011.

I'd like to now speak very briefly about the progress of the Department of Justice in clearing the backlog of specific claims in the inventory. This is of course an integral component to the success of the Justice at Last initiative.

As you've already heard, the Specific Claims Tribunal Act sets out strict timeframes for Canada to assess and respond both to new claims and to those claims that were in the inventory at the time the legislation came into force. At that time, there were 541 claims in the inventory, many of which were waiting for the Department of Justice to provide legal advice.

I'm very proud to report that we have made significant progress, and that as of February 2011, the Department of Justice has only 95 legal opinions to prepare in respect of claims in the backlog. In other words, we've cleared approximately 80% of the backlog that had accumulated over 30 years.

In order to achieve this success, the department recognized that we needed to do more than receive new resources. We needed to change our approach. We worked closely with the Department of Indian Affairs to identify opportunities for reducing the volume of materials reviewed and to ensure that the packages were complete with documents before they were submitted to the department for review.

We also implemented a number of internal process efficiencies aimed at reducing the length of time it took us to prepare legal opinions. We structured work teams in order to leverage knowledge and expertise, we bundled similar types of claims, and, where possible, we prepared foundational legal opinions respecting those groups of claims.

Most significantly, the Department of Justice developed a streamlined process for providing legal advice on smaller-valued and less complex specific claims and provided that within no more than 20 working days. Considering that a large percentage of the claims in the inventory are of a smaller value, use of this expedited process has had a tremendous impact on our success.

For more complex claims with an anticipated value that is of larger value, but under $150 million, the department continues to prepare a standard legal opinion; however, this work is now being done within 60 days. This is a significant reduction in time compared to a period in which opinions took sometimes several years to complete.

There is still much work to be done, but the department is dedicated to ensuring that all remaining backlogged claims receive a legal assessment and put the Minister of Indian Affairs in a position to respond before the three-year statutory time limit.

I'd like to turn very quickly to the department's role in respect of claims that are valued at over $150 million. When a claim is filed with the Minister of Indian Affairs and Northern Development, the size of the claim is not always known. The Department of Justice is asked to prepare a legal opinion pursuant to the specific claims policy on whether an outstanding lawful obligation exists. Where the size exceeds the limit of the policy and the tribunal's jurisdiction, meaning it's valued at over $150 million, following a legal opinion having been given, we continue to play a supporting role in cabinet's consideration of these claims.

In closing, the Department of Justice remains committed to the successful implementation of Justice at Last to the benefit of first nations people and all Canadians.

Thank you very much for this time. I welcome the opportunity to answer any questions of the committee.

Merci.

[The Chair, Conservative, Bruce Stanton]

Thank you very much, Ms. McCurry.

Now we'll go to questions from members. We're going to begin with a seven-minute round, starting with Mr. Bagnell.

Go ahead.

[Larry Bagnell, Liberal, Yukon, YT]

Thank you, Mr. Chair.

Thank you for being here. That was pretty helpful information.

This study is primarily on claims over $150 million, so I assume that most of the questions will be on that. I have a couple of questions on the ones under, though, because you did talk about those as well.

I'm getting some mixed messages on the numbers of claims that are left. The national summary of status report of two weeks ago suggested that 529 claims are left; 360 are in assessment and 169 are in negotiation.

Ms. Swords, I think you just said that 270 are under assessment and 90 are under negotiation, which is over 150 less than those statistics.

Can you...?

[Colleen Swords]

Certainly, Mr. Bagnell, but first perhaps I could introduce my colleague Anik Dupont. She is the director general of the specific claims branch, treaties and aboriginal government sector, and she is an expert on all of the numbers.

I believe you'll find that the difference in the numbers is accounted for by the fact that I was talking just about the backlog that was in existence in October 2008. We still get new requests for specific claims consideration. I think the numbers you were referring to earlier would include the entire backlog plus the new ones that have come in.

I can ask my colleague to verify that.

[Anik Dupont, Director General, Specific Claims Branch, Department of Indian Affairs and Northern Development]

No, that's exactly it.

At the time the legislation came into force, we had over 800 claims in total. Our goal was, of course, with the three-year timeframes, to reduce the inventory. We always report on the backlog claims, but since the legislation came into force, there's been 109 new claims.

[Larry Bagnell, Liberal, Yukon, YT]

I think you referred to 12 that had been recently settled for $507,000 or something, which works out to about $42,000. Is that the average claim? For those, would that be the average amount of a settled claim?

[Colleen Swords]

That's million: it's $500 million.

[Larry Bagnell, Liberal, Yukon, YT]

So it's $500 million for 12 claims?

[Colleen Swords]

Yes, that's right.

Some of them would be larger than others. They are quite variable in the amounts, so you can't really say there's an average. I think there is one that's under $3 million or $4 billion, and then there's one that's over $100 million. They do vary in amount.

[Larry Bagnell, Liberal, Yukon, YT]

You're talking about the ones that are over $150 million, then?

[Colleen Swords]

No, no; for the ones that we've settled for the $500 million, I think most of them are under $150 million, or they fall into the $150 million category.

[Larry Bagnell, Liberal, Yukon, YT]

Okay, but if you divide the number of projects, I think it works out to some $40,000, on average.

[Colleen Swords]

I'm sorry, I'm not sure I know what you're dividing.

[Larry Bagnell, Liberal, Yukon, YT]

If you take the number of settled claims and you divide the total money spent, what is the average amount, just roughly?

[Colleen Swords]

Well, over $500 million worth of claims have been paid out this fiscal year, since April 1, for the 12, so I'm not sure how you'd get $43,000.

There are 12 claims that have been settled for over $500 million this fiscal year. It's very difficult to do an average, because some of them are quite small in relative terms and some of them are larger.

We can get you a complete list of each one, if you'd like.

[Larry Bagnell, Liberal, Yukon, YT]

Okay.

But at those types of rates, it looks like...and there's only $250,000 a year in the budget, right?

[Colleen Swords]

No: $250 million.

[Larry Bagnell, Liberal, Yukon, YT]

Oh, $250 million a year; right.

[Colleen Swords]

It's $250 million a year for 10 years, but there's the possibility of rolling it forward. Through supplementaries, if we haven't used an amount in a year, we seek approval from Parliament to carry it forward to a year when there would be more settlements. That's what we have done this year.

[Larry Bagnell, Liberal, Yukon, YT]

Right.

If all the claims were settled at the present rates, roughly when would they all be settled?

[Colleen Swords]

That depends very much on how the claims end up getting settled. If they're settled through negotiations, there is the three-year time period for assessment and then there is the three-year period for negotiation.

[Larry Bagnell, Liberal, Yukon, YT]

No, I'm just saying at the rates they're going now.