Indigenous and Northern Affairs Committee on March 9th, 2017

[Arnold Viersen, Conservative, Peace River—Westlock, AB]

One other thing I noticed is that it's not only communities or first nations that are in some level of management. It's also organizations. What would be the reason that you would place an organization under some sort of third party? What would be the need? For me, it's a third party organization that's not directly related to a community. Why would we be giving them any funding if they don't have good accounting processes?

[Paul Thoppil]

Thank you for flagging something that I didn't highlight in my remarks, which is that the default prevention and management policy is to be applied against any organization that INAC transfers funding to. It's not first nations centric. That is based on the Treasury Board transfer payment policy, which is that we have a fiduciary responsibility—

[The Chair, Liberal, MaryAnn Mihychuk]

Very quickly.

[Paul Thoppil]

—to ensure that the recipient has the capacity to take the dollars. However, sometimes those recipients are carrying out essential services. If we don't fund it through them, then how are we going to suffer those community members who have an impact on that? That's the balance.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you. Very good.

The blinking light is just relating the fact that the day has started at the House of Commons.

The question now goes to MP Bossio.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Once again, I thank all of you for being here today and initiating this study.

In September 2016, there was an article released in The Globe and Mail about work that was being done in Thunder Bay involving Crupi Consulting. They committed fraud on $1.2 million of public money for work they were doing with a number of first nations around third party management.

They've been charged and they've been removed from this particular project, but yet they're still on the list to be allowed to continue to apply to future third party management possibilities, or co-management possibilities.

The first question is, how does it happen that they can still be allowed on the list when a Joe Crupi committed this fraud?

[Paul Thoppil]

What transpired in that situation was incredibly tragic. It just shows the fragility of our federal government procurement processes. Notwithstanding the national RFP and trying to get qualified people to go through the gate and the review, we can have somebody who still gets selected who actually undertook something that terrible. It's still on the list and we are engaging with PSPC to take it off the list as soon as possible. As we discovered this situation, we have not actioned any usage of this firm for any other purposes going forward. So while it's unfortunate that they are superficially on the list, there's no utility of that firm benefiting any further.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Is this study looking at this whole model of third party management and the DPMP, and the utility of it in the first place as a model, as to whether it should even be continued or find some other model of accountability?

[Paul Thoppil]

This is where I'm very excited about this pilot project I mentioned in my opening remarks with the First Nations Financial Management Board. It's an example of innovation whereby we are not doing it, but we are working through an indigenous centric institution that has financial street cred and credibility to work with selected first nations that are in third party and want another way out. Five first nations, four in Manitoba and one in B.C., out of the 10 as of this date, have opted to try to go through this pilot project. It's still fairly early on, but I'm very hopeful that this may be an example of another model that you are citing.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

The government provides funding for numerous programs out there. Are you aware of this model existing in a situation for non-indigenous funding, where the government would have this DPMP type of model and would apply a third party management function when a non-indigenous organization is in default or abusing funding parameters?

[Paul Thoppil]

Our policy, as I said in my opening remarks, is a derivation of the Treasury Board transfer payment policy, which all departments that have to transfer funds—whether to indigenous or non-indigenous organizations—have to respect. The issue with first nations communities is that they have to carry quasi-statutory essential services to their citizens. It's not like other situations, where you can flow money through another medium. If a non-indigenous organization were doing something inappropriate, you could just cut them off and then maybe find an alternative. In this situation, it's fairly unique. How else do you flow education, income assistance, assisted living, very standard social services infrastructure elements in order to keep that community going when the governance has fallen—

[The Chair, Liberal, MaryAnn Mihychuk]

Thirty seconds.

[Paul Thoppil]

—or there are financial issues or mismanagement or they are in default in terms of accumulated effect? It's a unique circumstance.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

What levels of funding are available right now? You said there were funding dollars for training. How many dollars are actually there to provide training, and does that meet the need?

[Serge Beaudoin]

The professional and institutional development program that was mentioned earlier is a $9.3-million program. In addition to that, the department for this year has prioritized an additional $4 million that is specifically targeted at communities that have management action plans in place to help them increase their capacity in the areas of governance.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

Is that because of a recognized insufficiency of funds for that need?

[Serge Beaudoin]

It's to make it a priority and to help move communities out of default.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.

Our final questions will be coming from MP Saganash.

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

Thank you, Madam Chair.

I want to comment on my last exchange with Mr. Beaudoin.

I think, at the third level of intervention, it's very cruel to force aboriginal communities to determine where they'll draw resources from to pay for what's happening to them. Most communities already have a lack of income and resources. Even so, they're forced to determine where they'll take money from to pay for the intervention. Strictly speaking, I find this cruel. I really wanted to bring this issue up.

Mr. Thoppil, I was struck by the conclusion of your presentation document, which says

In closing, each of the challenges I have noted reflects a real policy concern in the context of a renewed relationship with Indigenous Peoples that will be important for this Committee to consider.

A number of points were raised in this paragraph. It refers to challenges, policy concerns and renewed relationships with indigenous peoples. We must take all these points into consideration in our report. That's what you're saying. I want you to elaborate on this.

[The Chair, Liberal, MaryAnn Mihychuk]

You have one minute.

[Paul Thoppil]

If we are going to truly move forward in a spirit of reconciliation, respect, and tone of relationship with first nations communities and all indigenous organizations, one can argue that the default prevention and management policy, notwithstanding its derivation from the Treasury Board transfer payment policy, comes across as a.... Some people will say it is a continuum of that colonial way of engagement with first nations. This is where we need to assess whether the current policy is consistent with that.

How do you go about ensuring for the 96% of the population when we're transferring funds for essential services and trying to close the socio-economic gap, the fact there is a financial accountability for the recipient who is receiving that funding? And if they're not doing well, how do we try to do it in a way that is not seen as a colonial way of engagement?

That's our challenge. This is where we're excited about what the committee can do in providing some good suggestions.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you very much.

That concludes our rounds of questioning.

If my list is right, we're looking for four pieces of information from the department.

We have MP Mike McLeod asking on deficits for indigenous communities.

[Paul Thoppil]

Was it deficits on band support funding levels—which is what I thought it was—as opposed to deficits of the organization?

My understanding was you were concerned about the level of deficits on the band support funding aspect of the community.

[Michael McLeod, Liberal, Northwest Territories, NT]

I wanted to know how many communities were in a deficit situation.

[Paul Thoppil]

Overall.