Indigenous and Northern Affairs Committee on March 9th, 2017

[Romeo Saganash, NDP, Abitibi—Baie-James—Nunavik—Eeyou, QC]

In these cases, the community may be forced to take the money from the post-secondary education funds, for example.

[Serge Beaudoin]

The community is responsible for deciding where to take the money from. However, it can't take money from funds for essential services. Normally, the money should come from the band council's funding.

[Romeo Saganash, NDP, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Is there an agreement that the money must not come from funds for essential services?

[Serge Beaudoin]

Yes.

[Romeo Saganash, NDP, Abitibi—Baie-James—Nunavik—Eeyou, QC]

I have one last question.

Mr. Thoppil, you said that you're dealing with a number of challenges. You didn't have time to reach that part of your text, but I want to hear more about how you're overcoming these challenges.

[Paul Thoppil]

Thank you very much for asking the question, because I didn't get a chance to finish my remarks.

I started my opening remarks saying these challenges aren't new. We started with a policy in 2008. We did a review. We updated it in 2013. Four years later we are now reviewing it again because we do need to review to update it, based on what we're hearing from communities. Yes, through the discussions with the Assembly of First Nations, we're trying to see what we can do to fix it and hopefully make it even better. In the interim, there are actions we can take. We are not sitting still because we want to do what we can. It's very interventionist when a community is under third party. We don't like that.

For example, we are doing a pilot project with the First Nations Financial Management Board. We have given them, through some identification of some flex funds within our department, funds to work with five willing first nations under third party to get them out of third party, as opposed to our doing it or doing it through the traditional way. We are hopeful that may be a more sustainable way going forward.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.

Our questions are moving to MP Massé.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Madam Chair.

I want to thank the witnesses for participating in the committee's work.

I'll continue along the same lines as my colleague, Mr. Saganash.

In your opening remarks, you indicated that the default prevention and management policy was an area of concern for the department. I want to hear your comments on the department's concerns regarding this policy.

[Paul Thoppil]

Our view is that our legislative mandate is to try to reduce the socio-eonomic gaps faced by communities. It's very hard to accomplish that when we have this irritant in the relationship with the community, which is the default prevention and management policy. How do we make that policy less of an irritant so we can concentrate on what Mr. McLeod said, which are the underlying root causes?

When you have that level of low noise out there, it takes away from what the minister is very focused on, the development of a comprehensive community plan where you get the whole community to engage in it, and then we can invest according to what the community wants. When you're in a level of default, then there's a level of irritation whereby the first nations community doesn't necessarily want to move forward in partnership with us in a productive way to deal with that, funding levels aside. That's just one issue.

We also have to acknowledge that, notwithstanding the recent progress in third party from 15 now down to eight by the end of April, a number of first nations have been in third party or some level of intervention for way too long. There is a systemic issue and we need to figure out the underlying root causes. Maybe it's band support funding, maybe it's the overall level of funding. Why are some first nations not able to get them totally out? Why have them in there? We have one first nation that's been in since 1998. That very much concerns me; they have essentially, through those years, given up, and they've become used to having somebody manage their affairs. We need to stop that.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Mr. Thoppil, how are you engaging with the communities on these lists through your work? As you said, some communities have been in default since 1998. What's the department's engagement with the communities in terms of trying to understand and solve problems? It's 2017, and these problems have existed for a long time.

[Paul Thoppil]

This is where the department benefits from regional offices across the country, whose sole job is that day-to-day relationship. There is not a day that goes by without some degree of communication between that first nations community and our regional office, and they are working valiantly every day to figure out a management action plan and a go-to to get them out.

Some of it requires investment and some of it is just acknowledgement by certain leadership that they've got to move forward. Some of them just need technical capacity that they can't find within the community. Each situation is very different; that's why it requires some degree of triage.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

I want to go back to the policy review the department plans to do. What are your key goals? What's your game plan? What's your time frame for achieving the goals of the policy review?

[Paul Thoppil]

Obviously, a measure of success is that we don't have any degree of intervention at all. I take Ms. McLeod's point on the trends. We, in our job in the finance part of the department, together with my colleagues in the regional office, are looking at the state of the trend, our dashboard, of level of intervention continuously, and then we have a conversation about why certain things are happening. Are we not proactive enough? Is that regional office not being proactive enough, or what's the issue with that first nation in particular?

That's a continuing monitoring role that we're playing because that is our measure of success in the end, the reduction. We want first nations to govern themselves, take accountability for themselves, and essentially move to a healthy, well community, and we don't want to be part of that.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Okay.

I'll repeat the second part of my question. What's your time frame for the policy review? How much time are you giving yourself to carry out the work?

[Paul Thoppil]

Sorry for giving a partial answer.

We determined that our deadline for finishing the report for the minister and the Assembly of the First Nations would be the end of this year.

This new fiscal relationship, for which the default prevention and management policy is part of what I would call rubric of financial management policy.... Embedded in the new fiscal relationship is a pillar of mutual accountability. What is that level of accountability that first nations governance is going to have in terms of community members on things like performance outcomes on programs, financial accountability, and so on? What is the duty of Parliament and the Government of Canada in terms of accountabilities to the first nations communities? That's one of the elements of it, and the default prevention and management policy has to be taken into account in that frame.

[The Chair, Liberal, MaryAnn Mihychuk]

You have forty-five seconds.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

I won't ask my other question, because it requires a fairly detailed answer.

Thank you.

[The Chair, Liberal, MaryAnn Mihychuk]

The questioning now moves to MP Yurdiga.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

I thank the department for joining us this morning.

According to the department's presentation, approximately 140 first nations and first nations organizations are currently under some sort of default management, so I'd like to concentrate on the third party managers. What criteria is used to assess and select third party managers for inclusion on the list of pre-qualified third party managers? How are they pre-qualified to actually be managers?

[Paul Thoppil]

We go through a national RFP process. That's public and it's embedded in that RFP in the statement of qualifications that we are seeking in terms of making them eligible to be part of that standing offer. We can table that with the committee so that you can see that as part of your study to assess whether those qualifications are adequate or not.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

Thank you.

What is the average cost of employing co-managers or third party managers, and what is the difference between a co-manager and a third party manager?

[Paul Thoppil]

Again, that speaks to the level of intervention. Co-management means that the adviser is working in partnership with the community, whereas third party is, as we said, the most interventionist, whereby, effectively, an outsider or the adviser is running the community financially. The two are very different because, on the co-management, the first nations governance is still actively working but just has to have a check-off with the adviser in terms of what it wants to do. That's why we, in the level of intervention, try to go that way as much as we can to avoid third party to the extent that we can, because we don't want to be in the situation of running their affairs.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

What mechanisms are in place to monitor third party funding agreement managers? How do you monitor their progress?

[Paul Thoppil]

That is one of our challenges. I don't think that we do a very good job of assessment. We try to do so as part of the reviews of why a first nation under third party management as long as it is. If we feel that, in fact, the third party manager is at fault, we will get rid of that third party manager and bring in a new one. We do a review, but is it as robust as we'd like it to be? Probably not.

[David Yurdiga, Conservative, Fort McMurray—Cold Lake, AB]

It's quite concerning that a lot of these first nations have to go through this process. What steps are needed for them to emerge from third party management?