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.