Indigenous and Northern Affairs Committee on May 26th, 2015

[Terry Goodtrack]

The first nations themselves pay for the program, whether it's a designated program, the workshops, or to attend their national conference. The only fund we have that does a significant amount of investing is the first nation market housing fund. They do some capacity-building. They work with the communities and fund...you know, to take our courses.

[John Barlow, Conservative, Macleod, AB]

We've talked quite a bit during this process about some of the unique programs that are available.

Once they have an on-reserve financial manger and administrator who is from that first nation, do you see a payoff, I guess, in the fact that they are making a connection between aboriginal banking programs, TD, and those kinds things? What's the payoff when they go through this program? How does it benefit the first nation?

[Terry Goodtrack]

Well, I think it's the commitment to the community: that's what it is. They go through the program and take pride in the certification; they know they've attained a certain level of knowledge and skill. They then use that knowledge and skill to address the community problems going forward. I think it's certainly quite significant.

Probably one person I would look to in terms of our members is Mike McIntyre from Membertou. He's from that community and he's their CFO. Certainly, with the skill level he has, he comes up with additional opportunities, ideas, and so forth. It ensures, from obviously a financial and management perspective, the sustainability of that community. His advice is certainly well respected within his community.

[John Barlow, Conservative, Macleod, AB]

Does it help—

[The Chair, Conservative, Blake Richards]

Sorry, Mr. Barlow, your time has expired.

I now pass the floor to Mr. Genest-Jourdain, for five minutes.

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

Thank you, Mr. Chair. Good morning, Mr. Faille.

My university studies in company law dealt a lot with white-collar crime and the effect it has on first nations' economic development across the country. As you will see, that will be the focus of my questions this morning.

I understood your presentation completely. The Canadian Council for Aboriginal Business has a program that certifies aboriginal businesses. But there is one aspect that I have a little difficulty grasping. The tax rules apply to status Indians pursuant to the Indian Act. Other than a company owned by one individual, I have difficulty seeing how a company can become certified as aboriginal.

What do you understand by the term “aboriginal business”?

[Maxime Faille]

We have two programs that deal with that. First, a certification program designed for companies that work in close collaboration with first nations. That may include any Canadian company. As for the definition of the term “aboriginal business”, it simply means a company controlled by a status Indian, or someone who is a Métis or an Inuk.

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

So it can be one individual, or several.

[Maxime Faille]

Yes. The company can be controlled by one individual or several. They must be status Indians, Métis or Inuit.

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

Okay.

In your document, you use the phrase “51% or more owned by an aboriginal person”. Are we talking about voting shares as part of the distributed share capital or 51% of the shares issued?

You know as well as I do that the power lies in the hands of those owning the voting shares. That is basically the crux of the issue. North of 50, we see that trick a lot, including in my own community. I feel that it is currently a considerable brake on economic development and progress.

[Maxime Faille]

I must confess that I would have to check that, but, to my knowledge, it means control in the form of voting shares.

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

In the form of voting shares. Okay.

The TD Bank Financial Group has a program called “Aboriginal Trust and Investment Services”.

Mr. Davis, trust accounts are fine, but at what point do they come into play and how relevant are they, for example, in remote communities? What trust services do you offer to communities?

[Clint Davis]

I am not part of the wealth group, but I'm certainly well aware of what trust services they actually provide. Normally trust services are needed whenever there's some sort of land claim agreement or a revenue stream, say, coming from an impact benefit agreement. Basically it's a decision on the part of the community to be able to take that additional money or resource, put it away, and try to figure out exactly how they will spend it. Maybe they'll reserve a portion of that capital as a bit of a legacy fund. In other situations, they may take a small portion of it and spend it on community programs and so on.

We usually are part of the discussion once a settlement has actually been determined. We've then seen on a regular basis that more and more first nation, Inuit, and Métis communities will do an RFP out to all the banks, and we'll bid on that.

So that's part of the process there.

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

When first nations constituents come to my office and tell me that the band council is robbing Peter to pay Paul by dipping into money intended for education in order to fill up another pot with less money in it, my reply is often that a practical solution would be to set up a trust account. Money would then simply go to the intended purpose and there would be no more robbing Peter.

Do you offer services like that? Do you think it would be possible to turn everything over to an independent administrator who would guarantee the final destination so that people could be sure that the money would be applied to the area for which it was originally designated?

[Clint Davis]

Normally what would happen is that we would serve as a corporate trustee, so you'd actually have independent trustees who would serve as a part of the trust agreement. In some instances, you may actually have someone representing council and so on. I actually think the creation of a trust is exactly what you've just stated, so it avoids this political interference that actually happens, and in many instances it demonstrates a very responsible approach to financial management across the country.

I could be wrong, but I believe that in some instances where there is a land claim settlement the need for a trust is actually a part of that particular agreement. I don't think you can just try to give it over to a community and then people will be able to spend it any way they can. In my own community, in fact, in Nunatsiavut, we have five trusts, of which four manage resources.

I'm a trustee myself and another acts as a bit of an overseer for our economic development corporation. We have a small amount of money in it, and we actually engage in more social activities, but it's also the sole shareholder for our economic development corporation at the same time. It's a tool that we utilize across the board in my own community. We're from the far north, too, so we've probably addressed some of the questions you've asked.

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

Thank you.

Mr. Faille, do you have anything to add on that?

[Maxime Faille]

I would just like to confirm that, under the vast majority of land claim settlements, the government has insisted that trusts be set up. It may be different in each community. So you can obtain the services of a corporate trustee or you can set up a community trust, or you can do a bit of both.

The advantage of a community trust is that it encourages capacity development in a community. The members of the community are involved in setting up and managing the trust.

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

Thank you.

[The Chair, Conservative, Blake Richards]

Thank you.

We'll now have Mr. Dreeshen for five minutes.

[Earl Dreeshen, Conservative, Red Deer, AB]

Thank you very much, Mr. Chair.

Thank you for being here, gentlemen. This is very enlightening.

I'd like to talk about the education aspect of this and the aboriginal youth. As we all know, they are the future of our labour force. When we are talking about businesses that are taking place on reserve, I suppose the way I look at it is that we have this great pool, this collateral that they could be using, and the training is a major aspect of it.

I'm wondering if that's really what we're looking at. Is it to try to make sure that there are jobs for people on reserve? Or are we simply saying “here are some opportunities and as soon as you're trained you're heading out the door and you're going someplace else”? Is that a bit of a focus as far as aboriginal businesses on reserve go? Are they looking at that as a source for being able to use their people who are there? Or are they simply looking for dollars and cents and not utilizing it to its advantage?

[Terry Goodtrack]

I would hope and I think that it's both on reserve and off reserve, right? Certainly, for the multiplier effect, there has to be a certain amount of dollars going around in the economy, and creating that aboriginal economy I think is an important factor in the communities that are larger. I think that trying to figure out how it would work with smaller communities is certainly a challenge.

But I would certainly hope.... For the youth, I think the education part is important. The financial literacy part that we're working on is certainly important, as is providing those incentives, whether they be for going to university or college or for operating a business. I think those are all very important things. But I would hope that the scope and the focus are both on reserve and certainly off reserve.

[Earl Dreeshen, Conservative, Red Deer, AB]

So when people have gone through your program, the plan, the hope, and the desire of course would be that they would then be able to come back, use the skills, and then be able to develop, whether it be on their own reserve or someplace throughout the country.

[Terry Goodtrack]

Yes. That's right.

[Earl Dreeshen, Conservative, Red Deer, AB]

The other question I wanted to ask about was on the best practices that you've seen as far as the transfer of authority from third-party management back into the community is concerned.

We had talked about the fact that it takes some time and there's a transition, but are there some best practices you can mention, different ways of doing it whereby maybe if all the communities that were in third-party management were to try to focus on a certain direction, it might be a little smoother in that manner?

[Terry Goodtrack]

Yes. I can't really focus to one or two, but certainly in the upcoming year one thing that we're working on at AFOA Canada, in concert with Aboriginal Affairs, is that we're going to select a tribal council where there are a number of first nations that are in some sort of default and see how we could work with them over a number of years to provide not only the training but also a coaching part, as I call it.

So you have a coach who you personally can rely on for the day-to-day sorts of issues. There's the issue of your getting get trained but not necessarily applying it. So it's the coaching part that I think is key.

It's a pilot to see how that might work. It's not a one year thing, but certainly over a few years to try to address that issue.