Indigenous and Northern Affairs Committee on Oct. 17th, 2012

[The Chair, Conservative, Chris Warkentin]

Thank you very much.

We'll now turn to Mr. Bevington for five minutes.

[Dennis Bevington, NDP, Western Arctic, NT]

Thank you, Mr. Chair, and thank you, Ms. Wilson-Raybould.

I'm very pleased to have an opportunity to question you on this particular issue, because of course there are some troublesome parts to the basic philosophy of this bill, as you've outlined.

I asked the minister how he felt the relationship was between first nations and his government, and it was government to government. I don't know whether he would qualify that as between self-governing entities and those that don't have self-government. Are we still talking about a government-to-government relationship? I believe that would be the case.

Is that the feeling of AFN, that regardless of self-governing agreements, this is a government-to-government relationship?

[Jody Wilson-Raybould]

I believe we're seeking and want to embark on a government-to-government relationship. Solutions exist—solutions that were outcomes expressed in the first nations-crown gathering—whether it be in education, financial arrangements, supporting first nations governments, or looking at an ultimate resolution of the land questions for comprehensive claims. We have the opportunity to work in partnership to develop options or solutions, as opposed to options that are imposed upon other nations or another government.

First nations are in the process of building our governments and are certainly looking for partners to share in our collective vision of improving the lives of our people. I think that's the objective and interpretation we had coming out of the first nations-crown gathering. The objective is still to work with the Prime Minister and this government to do just that.

[Dennis Bevington, NDP, Western Arctic, NT]

Do you feel that the philosophy of this endeavour by the federal government has taken you any further along the road to government-to-government relations?

[Jody Wilson-Raybould]

I have had the opportunity to speak, at various committees over the years, to various pieces of legislation, as I mentioned, whether it's this, or matrimonial property, water, or otherwise, which have sought to tinker with the Indian Act or the relationship we had. For most of our first nations, it is a ward-type relationship between our nations and the Government of Canada.

What we are seeking as first nations, in supporting or building partnerships with other governments, is to be supported in our nation-building efforts.

I was going to mention this in my comments, but right now, what doesn't exist in Canada is a mechanism to support our nations when we're ready, willing, and able to move beyond the Indian Act, based on our own timeframes and priorities and the will of our citizens. There is no mechanism to allow us to do that right now, short of a court decision or short of interminable negotiations with the Government of Canada through a treaty process, or, if you're lucky enough, bilateral government negotiations with the Government of Canada.

In looking at all of the legislation that's introduced. However well-intentioned, how can we quarterback all of that legislation? What's the fundamental nucleus or core of all that legislation? It's rebuilding governments. It's supporting our governments in the realization of our objectives.

We continue, and we will continue, to come back to this table to have conversations about legislation that's introduced without our input. What we are seeking is how, as partners in the first nations-crown gathering, we can sit down with the national chief, the national executive, and most importantly our chiefs, our individual communities, and our citizens, and support our nation-building efforts in a partnership that respects that government-to-government relationship.

[Dennis Bevington, NDP, Western Arctic, NT]

I guess I have trouble with the “well-intentioned” part of your statement, because when I look at this, I see it as a duplicate form of legislation that really just serves as fodder for a political base. I don't really find it useful at all. Quite clearly, there are other motivations at work here, and I really don't appreciate them, speaking as a representative of many first nations constituents. I find that this piece of legislation is as you say it is, but I won't give you “well-intentioned”.

[Jody Wilson-Raybould]

There are varying perspectives in terms of the intention of this legislation. Certainly there is a perspective out there that the reality of having to disclose own sources of revenue will, in turn, as revenues increase, decrease federal transfers. That's a reality and a perspective on this piece of legislation.

One other thing to say, and it's sort of in response to your comments, is that for first nations that are approaching or going down that road of self-government, having consolidated financial statements and disclosing revenue or investments does, for the most part, actually recognize and expose the reality of what our first nations are having to bear in terms of supporting our own governments beyond the federal transfers we get, which are inadequate. And it creates that reality of what it actually costs to finance first nations governments. That's another way to look at it.

Certainly there is a mistrust that exists out there and a definite need to create mechanisms that will put back in place the trust that is waning with successive legislative initiatives, which continue to be introduced in isolation of our first nations.

[The Chair, Conservative, Chris Warkentin]

Thank you very much.

We'll turn to Mr. Clarke now for the last five minutes.

[Rob Clarke, Conservative, Desnethé—Missinippi—Churchill River, SK]

Thank you, Mr. Chair. Thank you, Chief, for coming here today.

One of the interesting things I want to mention, being first nations myself and also a former RCMP member, is that I've seen the best of first nations and the worst of first nations in releasing information to their band membership. Speaking now as a member of Parliament, but as a first nations band member, I hold my chief and council accountable. With over 50% of first nations living off reserve, communication—letting the band membership know what's going on, what the financial statements are on a year-to-year basis—is very difficult. That information has to get out.

What I see here, and in my past, is that first nations don't have that opportunity where the chief and council refuse to release that information to the band membership. I've seen access to information requests throughout my career, and some of the reserves refuse. That comes under section 10 of the Indian Act, in which the reserves have full control of their band membership.

One of the interesting parts about this is that in order for band members to make an ATIP request for the financial transcripts of a first nations community, they have to release their identity to the chief and council, and they have a fear of reprisal for asking for that information. That's everyday life for first nations membership. There are communities out there that do that, and there's a fear of reprisal.

There are a lot of good first nations out there. We're going to be hearing witness evidence to this.

Chief, you're spearheading and leading an initiative called, “The governance tool kit: A guide to nation-building”. Can you tell us about how the subjects of transparency and accountability are handled on your website?

[Jody Wilson-Raybould]

The reality is very different in every single community across the country. We are as diverse as we are similar, to great degrees, in terms of our objectives, which are to improve the lives of our people and to share our experiences.

You referenced the tool kit we have developed at the B.C. Assembly of First Nations. The objective behind that tool kit, in terms of transparency and accountability.... There's a chapter in the tool kit that speaks to financial administration.

The premise of the tool kit is not to tell a nation what is the best thing for that nation to do, based upon the collective experience I have as the regional chief—absolutely not. What it does and why it has been so successful is it tells the story of what our nations are doing. It tells it from their perspective, whether it be under the FSMA or under self-government arrangements and the provisions that have been negotiated therein. In terms of financial administration, there are limited provisions available to create bylaws under the Indian Act. It provides the options for first nations to choose to celebrate the successes of others and adopt them into their own communities, or to create alternatives or options for other people.

I think the point of the tool kit, much like the point of the work that first nations are doing, is this: how can we develop tools or mechanisms to assist first nations in re-establishing their own governments? Certainly we're not saying that one thing is better than the other, but we need to ensure that we provide all of the options for the first nations to choose what's best for them, and not another government to do that for us.

[Rob Clarke, Conservative, Desnethé—Missinippi—Churchill River, SK]

Chief, no disrespect, but you're seeing first nations communities and leadership already providing this information to Aboriginal Affairs, correct?

[Jody Wilson-Raybould]

Correct.

[Rob Clarke, Conservative, Desnethé—Missinippi—Churchill River, SK]

Is it inappropriate, do you think, for that information to be released to the band membership in another manner, either through a first nations organization or through Aboriginal Affairs? There's no financial burden to overcome for that individual reserve to adhere to that. That's the question I have for you.

[Jody Wilson-Raybould]

I think it goes to the diversity that exists within our communities, beyond what's reported or the negative perspectives of certain first nations communities. Communities are doing that. In my own community, right across my province, we come together annually at band meetings—if that's what you want to call them—and have discussions around it. I know financial statements are available in my own community; they're available if you want to go in and ask for them. Yes, there are challenges with some leadership, but that exists in every government. Disclosure of financial information or transparency and accountability exists within the Government of Canada, as it exists within some of our first nations, as it exists within other nations in the world.

The difference is that another government doesn't tell other governments what to do about it, but it supports. If that's the partnership role we have here in Canada between first nations and other governments, it's to support our nations in developing those mechanisms that are appropriate to our individual communities, and not exaggerating something that simply doesn't exist.

[The Chair, Conservative, Chris Warkentin]

Thank you so much. We do appreciate it. We have unfortunately run out of time.

We want to thank again Regional Chief Jody Wilson-Raybould, as well as Karen Campbell, for joining us this afternoon.

We'll now suspend, colleagues, for just a few minutes to bring our next set of witnesses in.

[The Chair, Conservative, Chris Warkentin]

I call this meeting back to order.

For our second hour we have witnesses here from the Whitecap Dakota First Nation. We have the privilege of having Chief Darcy Bear here, along with Murray Long and Lisa Dunville.

Thank you for coming. We appreciate having you here in Ottawa. The last time we saw you folks was in your community. We want to thank you for hosting us when we were there. About half of our committee was there, and we appreciated that and look forward to coming back again someday.

Today, we'll run things as we usually do. We have your opening statement, Chief. We'll turn it over to you for about 10 minutes, and then we'll begin our rounds of questioning.

Thanks so much.

[Chief Darcy M. Bear, Chief, Whitecap Dakota First Nation]

Thank you so much, Chris, and my thanks to the committee.

I'm here to speak on behalf of my community, Whitecap Dakota First Nation. I'm not here to speak on behalf of any other first nation, just so that's clear. I'm also going to share our experience, as it relates to the Whitecap Dakota First Nation.

I'm going to have to take you back in time a little bit, take you back to November of 1991, when I was first elected by my community. When I was first elected, our community didn't have a dime in the bank. We had a large overdraft and a stack of payables. Back then I was 23 years old. As a young man looking at our community, I had no clue of the financial state of affairs of our community, because our chief and council were not sharing financial information with the members. That very first day I was elected there were two choices. The first choice: “Who needs this? I may as well walk away and forget about it.” But as leaders, as you all know, as you are elected, when there are challenges, we have to accept those challenges, find solutions, and go forward.

The first thing we had to do was ascertain the amount of debt we actually had and how much of this debt was real. Then we had to create a financial management plan and approach a financial institution for debt consolidation. But at the time we were on the brink of having a third-party manager come in to our community. One of the biggest problems for first nations is a lack of professional capacity, because of the way our communities are funded, through band support funding. A lot of our communities are funded and we have financial clerks. But a financial clerk cannot keep pace with the onerous reporting requirements of the federal government.

So I convinced the federal government to do something different: let's hire a professional accountant for Whitecap; in year one you pay 100%; in year two, you pay 75%, we pay 25%; in year three, we go 50-50; in year four, we'll pay 75%, you pay 25%; and in year five we're going to take over the position. They approved that and the rest is history. Third-party managers don't want to work themselves out of a job. They don't want to see the first nations build any capacity. Therefore, the model that we created back then worked for us.

The biggest key to moving forward in any kind of development is to get your financial house in order. That's not just for first nations communities; that's for any organization, any business. If you don't have your financial house in order, you don't have any credibility.

I can tell you today that we've had 21 consecutive unqualified audits. We are in the black. We can share our audit with anyone. We share it with our community members, we can share it with the financial institutions, and we can share it with businesses. We can create partnerships, because they have the confidence that Whitecap has a good financial track record. That's very important, if you want to talk about nation-building. If we don't have that credibility, how can we move forward as a nation?

There are many challenges that we face as first nations communities. Look at the Indian Act itself. The Indian Act is 136 years of oppression. It was never a piece of legislation that was created for us to have hope and opportunity and be a part of the economy. It was meant to segregate us from society, keep us out of sight and out of mind. I say to the business community, if you look at the Indian Act and apply it from a macro perspective to all of Canada, how far behind would our country be compared with the world economy? I say that seriously.

When you go back to the perspective of our first nations communities—having this piece of legislation put on our lands and segregating us from society and not being part of the economy—it has created so many challenges going forward. If you look at economic development, the key is real estate development. We didn't have a land tenure structure and we couldn't move at the speed of business. Under the Indian Act, if we wanted to have a leasehold interest, we had to do a land surrender. From the land surrender we had to create a head lease and there had to be ministerial approval. But this new legislation, the First Nations Land Management Act, has enabled us to self-govern our lands, open our doors for business, create a land code that's ratified by our people, and move at the speed of business.

When people are looking at the business environment, they also are going to want to look at the financial record of that community. It's no different from an investor going around the world and looking at different countries and asking, “Am I going to invest there? Is there leadership, stability? What kind of governance structure do they have? What is their financial track record, etc.? What kinds of laws do they have?” It's a similar thing when you're investing on reserve.

Since we've introduced the First Nations Land Management Act, and of course going forward with our financial track record, we've been able to move from a 70% unemployment rate to 4.1%. We've had over $100 million in investment to date. We recently announced a hotel project that will be going into our community, and it's going to create another 150 jobs. It'll be open in the summer of 2014, so if you're ever travelling and you want to come out to our community, we'll have a place for you to stay. Adding those 150 jobs takes us up to 830 jobs.

We are also looking at building a business park, and with that business park, the manufacturing sector.... Working with the local businesses, we did a feasibility study. We have about 30 businesses that actually want to relocate to Whitecap. Again, that's another 300 to 400 jobs there. So within the next five years we'll have over a thousand jobs.

We continue to move forward. It is because of our financial track record that we're moving forward. If we were not accountable to our people or willing to share our audits and our financial standing with our partners, we wouldn't be able to move forward.

I'll give you an example. Rob Clarke's first nation, Muskeg Lake, is one of the partners on our golf course. When we were looking at that project we looked at selecting first nations that also had comparable strong financial track records to ours, and the first nation we recognized was the Muskeg Lake First Nation, which actually has land in Saskatoon. It had a strong financial track record going forward, over 500 employees on their land, and extensive experience in economic development, so we wanted to have them as a partner.

The other partner we talked with at the time was Chief Harry Cook of the Lac La Ronge Indian Band, who owns Kitsaki Development Corp. Back then they were doing over $75 million worth of business, and they're doing $100 million now. It's another strong community.

So together, collectively, we developed the Dakota Dunes Golf Links. When we were doing our business plan and our pro forma income statements, we had originally expected a loss in year one, the second year we were going to break even, and in year three we were going to be profitable. We have been profitable since day one, and this is year seven.

We were originally planning on paying off our debt in 12 years; we have done it in six years. Again, that's about working together with other strong first nations that have the same principles of accountability to their membership, and that's what this is about.

We certainly do support the bill. Originally, when it was rolled out by Kelly, it was Bill C-575. We have no issue as far as being accountable to our members. We do share our audit with our members annually. Also, when it comes to the salaries of the chief and council, I'm going to tell you one thing. About six years ago we actually went on an exercise, again in partnership with the federal government, of creating a salary grid, not only for our council but for all of our employees and staff. If you look at the demographics in Canada, you have an aging workforce and everybody is competing for skilled human resources. We want to ensure that we're paying our staff appropriately, so that people aren't poaching them—that's what happens if you're not paying your staff appropriately; people will come in and offer them more than you're paying and they'll take them away.

Fortunately, and this is because of our financial track record, we have been able to generate a lot of our own-source revenues, so we can top up salaries and make sure we can be competitive. A good example would be water treatment operators. They have to be certified. In order to hire a certified operator.... Right now, Aboriginal Affairs only issues $25,000. You can't pay anybody $25,000 and get a certified operator. The going rate in Saskatchewan, if you look at SaskWater or other municipalities, is a minimum of $50,000 plus benefits. We have been able to top that up, so we are able to ensure that our certified water treatment plant operators stay in our community.

These are some of the things that our financial track record has enabled us to do.

As far as the salaries of the chief and council, we actually have a chief and council compensation commission in our community that's made up of our membership. They set our salaries; we don't set our salaries.

One of the things that we do not agree with in regard to the bill itself, the current wording, is that we don't want it to scare business away. We don't want this bill to have a different set of accounting standards from the private sector off reserve.

We have recommended some wording changes to make sure this bill does not scare businesses from first nations lands, because that's not what this bill should be about. This bill should certainly be about accountability and transparency, but it shouldn't be a whole new set of accounting rules for first nations communities or for the private sector. If they're going to come on to our reserve, they should be treated as if they were off reserve, using generally accepted accounting principles. That's very important.

Similarly, in the bill it talks about remuneration and expenses, and it ties them together. Again, that is not fair. It's inconsistent with the government's definition regarding remuneration, where your flights.... If you fly around, that's not your salary. Why would they want to incorporate that as part of our salary? That has to be separated, and we made that very clear in the recommendations.

I believe Murray has given the clerk some of the recommendations we're making to separate remuneration from expenses, because they're not the same.

If you're staying in a hotel, or if you're flying, or you have other transportation costs, they shouldn't be considered as part of your salary. Certainly, it's not for any of you. You don't have to experience that, so why would you impose that on first nations leaders? That certainly has to be corrected.

With regard to the Income Tax Act, when it comes to flights, transportation, meeting expenses, and so on, those expenses are not considered as part of your personal salary under the Income Tax Act. Again, that's another act of the federal government. You have to be consistent, when you're moving bills forward, that you're also following your own rules when it comes to personal income under the Income Tax Act and when you're following generally accepted accounting principles. That's the only way we're going to be able to move this bill forward, and that's the only way you're going to get support from Whitecap.

Certainly we're supportive of the actual principle of accountability and transparency, but we want to make sure that this bill is not going to scare away businesses from our community. You have the private sector off reserve and they have certain reporting requirements, but if they go on reserve and they have to disclose their competitive information to all of their competitors, they're going to say they don't want to go on reserve, that it's not right for them. We need to make sure it doesn't happen to the businesses coming to Whitecap.

We did support the original bill. The only issues we had, as I said, were about remuneration and expenses, as well as the level playing field for businesses.

Those are my opening comments.

[The Chair, Conservative, Chris Warkentin]

We'll open it up to questions now. Thanks so much, Chief.

We'll begin with Monsieur Genest-Jourdain, for seven minutes.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Thank you.

Chief Bear, a few minutes ago, I asked the witness before you a question and she suggested that I ask you. So that is what I am going to do now.

The question deals with a community's economic initiatives, in other words, a company that a community may wholly or partly own.

As you see the legislation we are studying today, what will be the impact of the disclosure of financial information about a commercial entity owned by a community or jointly owned by a community and a private company? What would be the effect of making a company's financial information available to the general public in this way?

[Chief Darcy M. Bear]

If you don't mind, I'll refer this question to Lisa.

[Lisa Dunville, Chartered Accountant, Whitecap Dakota First Nation]

Sure. I'll just rephrase what I understood. I'm sorry, I was having problems with my earpiece.

The question was, basically, what are the effects of potentially having private enterprises disclose their information publicly?

The issue comes down to the fact that there is no other requirement for any other private entity in Canada right now to publicly disclose, for example, executive compensation, as a public company would. The requirements of generally accepted accounting principles that apply to governments right now are very specific, that they specifically exclude government business enterprises. For that reason, under generally accepted accounting principles, you don't want to have a comingling of requirements under private enterprise and public governments that are publicly accountable.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Thank you.

I am going to share my time with my colleague, Ms. Duncan.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you.

It's nice to see you again, Chief Bear. You were before us earlier in the year. We always appreciate your interventions. You're a very pragmatic chief.

There was a report by the Auditor General in May 2006 that raised a concern, not with the fiscal practices and reporting by first nations, but with the Government of Canada in its overloading onto first nations the duty to report. They found that the Government of Canada had been unsatisfactory in responding to its recommendations to improve and reduce the reporting requirements for first nations.

You raised a really good point, Chief Bear, where you seem to be agreeing with the presentation by the Assembly of First Nations that what the first nations are asking for is not always to be treated as one-size-fits-all, and not to immediately intervene if problems arise or if you've got fiscal problems or accounting.... There can be other arrangements made rather than sending in third-party management.

I'm wondering if you could speak a bit more to that. Do you think there should be greater flexibility for first nations in resolving these fiscal matters, rather than taking a more heavy-handed approach and simply going to third-party management, or, in the case of this bill, should first nations complain that they aren't being provided the information, that the funds could be seized from the first nation?

[Chief Darcy M. Bear]

Again, as I said in my opening comments, I certainly don't speak for other first nations. I can speak on behalf of my community and our experience, and in my opening comments that's what I was speaking about.

Twenty-one years ago, when I was first elected, there was no accountability, no transparency, and that was very unfortunate.

I'm not going to be in this role forever, and I want to ensure that future generations, regardless of the change in chief and council, and my community members will continue to have disclosure. I think that's very important, that our young people coming forward can see our audits. After I'm gone.... We have an election coming up this year in November. If I'm re-elected I'll put in another four years, but I think that's it for me. I'm going to be finished after that. Once I'm gone and walk away, I want to ensure that the future chief and council share information with our young people, so they'll know exactly what they're getting themselves into.

I know I can leave that for them within the next four years and leave our community with a strong balance sheet. However, we've seen time and again that because of a leadership change, the community has actually crashed. You can have a first nation with good leadership, moving things forward, and all it takes—it's easy to spend money, anybody can spend money—and bang, it goes down. Then what happens?

So I think it's important that we have some kind of mechanism in place, but we need to make sure that there are corrections to this bill that address the concerns we have, so we're not scaring away business. We have no problem disclosing our salaries and no problem disclosing—

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Chief, have you put in place measures similar to those the regional chief mentioned for her first nation? Have you put in place measures to require the disclosure of information to your members?