Indigenous and Northern Affairs Committee on March 23rd, 2017

[The Chair, Liberal, MaryAnn Mihychuk]

I'll call the meeting to order.

Welcome, everybody.

I acknowledge, given that our Prime Minister and the people of Canada have called for a process of truth and reconciliation, that we're on the unceded territory of the Algonquin people.

I wish to welcome you to our standing committee as we hear about the management of our communities and how we can benefit them, and an old system of default management commonly known as third-party management.

I do want to thank all of you for travelling here to present before us. We're honoured.

Pursuant to Standing Order 108(2) and the motion adopted on February 21, 2017, the committee is resuming its study of default prevention and management policy. We have three presenters. The first presentation will be for 10 minutes by the First Nations Tax Commission, Clarence T. Manny Jules, chief commissioner and chief executive officer.

Welcome. Bonjour.

[Clarence T. Jules, Chief Commissioner and Chief Executive Officer, First Nations Tax Commission]

Good morning. I'm Manny Jules, the chief commissioner of the First Nations Tax Commission. Thank you for this opportunity to appear before this committee. Your study on INAC's default prevention and management policy is important and timely.

This government has committed to a new fiscal relationship that provides stable revenues to our communities, and improves infrastructure services and outcomes. Strong financial management, transparency, and accountability are key elements of a new fiscal relationship.

As you know, I've been working toward a new fiscal relationship for over 40 years. I was co-chair of the national table on fiscal relations from 1998 until 2001. We have always known that a new fiscal relationship needed first nations institutions. That is why we advanced and implemented the First Nations Fiscal Management Act also known as the FMA.

That act was passed in 2005, and it created four institutions to support a new fiscal relationship, one of which was the First Nations Tax Commission. One of the other institutions created was the First Nations Financial Management Board. It's chair, Harold Calla, has done a great job of building that institution for accountability and management. I know that his observations and work will be extremely valuable to your study.

However, I want to focus my comments on the first objective of your study, issues and challenges that affect financial management in our communities. It is important, because I believe you're asking about the root causes of our financial management issues.

To begin, the foundation of all governments is land and tax jurisdiction. The methods used to apply these fundamental jurisdictions determine economic success or failure. When these jurisdictions are used, they create governance and public institutions that grow economies to the benefit of all citizens. Trust then rises in government and institutions. When they are used to benefit some but not all citizens, economic disparity rises and trust in government and institutions declines. As stated in a recent book, the use of these jurisdictions is why some nations fail while others succeed.

First nations people had these jurisdictions before contact. There was no requirement for a royal proclamation or treaties if indigenous populations didn't have title and tax jurisdiction. We used these jurisdictions well. It has been estimated there were more numerous than Europeans at the time of contact. Of course, the introduction of guns, germs, and steel, per the book title of the same name, changed that.

Colonization took our land and our tax jurisdiction. As stated in 1841:

The Indian occupies valuable land unprofitably to himself and injurious to the country. He gives infinite trouble to the government and adds nothing either to the wealth, the industry, or the defence of the Province

It ultimately resulted 35 years later in this passage that remains in the Indian Act today, that reserves are:

a tract of land, the legal title to which is vested in Her Majesty.

We fought to get our land back. In 1910, my ancestors, the chiefs of the interior tribes of British Columbia, wrote the following to clarify their land claim position:

We stand for the obtaining of a permanent and secure Title (to be acknowledged by the government as such) of our ownership of our present reservations, and of such lands as may be added thereto.

Canada became frustrated with our efforts to raise money by collecting taxes, so in 1927, the Indian Act was changed to take away our tax jurisdiction. It said:

Every person who...receives, obtains, solicits or requests from any Indian any payment...for the purposes of raising a fund or providing money for the prosecution of any claim...shall be guilty of an offence...

The express purpose of these policies was to create dependency. As the following quote from Hansard in 1918 indicates:

Well, the Indian may be satisfied and he may not. My personal view with regard to the Indian is that he is the ward of the Government, and being a ward he is bound to accept the treatment given him.

We have been fighting for our lands and tax jurisdiction ever since, and we've had a number of victories: the Supreme Court recognition of our rights and title in several decisions, including most recently the Tsilhqot’in decision; the 1982 Constitutional recognition in section 35; the United Nations Declaration on the Rights of Indigenous Peoples; the 1988 amendment to the Indian Act; the passage by Parliament of the First Nations Land Management Act in 1999; and the passage by Parliament of the First Nations Fiscal Management Act in 2005.

It is clear that this government wants change. Last month, the Minister of Justice and Attorney General of Canada, the Hon. Jody Wilson-Raybould, said the following at a conference here in Ottawa:

As a government, we recognize that the fundamental purpose of section 35 is reconciliation of the prior occupation of Indigenous peoples with Crown sovereignty. And we are fully committed to fulfilling the constitutional promise made to Indigenous peoples in 1982...reconciliation actually requires laws to change and policies to be rewritten...if we are to get rid of the Indian Act, we need to determine how First Nations transition away from band government to something which is reflective of the proper title and rights holder...Only Indigenous peoples can determine their institutions and shape their future.

The Minister of Justice is right. She is also wise enough to know that this change will be hard. We need to overcome historical mistrust. We need to convert our rights and title to governance, institutions and jurisdictions. We need to rebuild our governments and our nations. Most importantly, we need to restore the foundations of governments and economies: our land, our tax, our jurisdictions, our institutions.

Over time, our fundamental jurisdictions have been legislated away, and they must be legislated back. We know how to do it. When the First Nations Fiscal Management Act was implemented in 2007, we were unsure how successful it would be. Fast forward 10 years, and over 200 first nations are now using the FMA. It is now the most successful indigenous-led, optional jurisdiction initiative in Canadian history. The FMA works.

It works because we led and designed it. It works because it expanded our tax jurisdiction. It works because it provided us access to capital just like other governments. It works because it grew our economies. It works because it built our capacity, and proved that we can exercise our jurisdiction on our lands. It works because it provides the necessary first nations institutional bridge to restore the jurisdictions that were taken away.

Just as important, it works because parliamentarians, like the members of this committee, in the past listened. They heard our petitions and engaged our vision. They tested our reason. They read and challenged our technical presentations. They confirmed our resolve, and then, in the end, they made legislative changes. This is what reconciliation looks like.

As the Prime Minister has said:

If we are to move forward in the nation-to-nation relationship, we have to try new things, to take risks even. Some of what we try will work, some of it won't. Some of it will work for some nations, but not others. But we can't be afraid to try. Part of rebuilding trust, includes being willing to try together.

Therefore, the key to improving financial management in our communities is to build on this successful model. This parliament must restore the jurisdiction that previous parliaments legislated away.

I look forward to working with you to erase this past injustice. Accordingly, I have seven recommendations to accomplish this.

First, Harold Calla is the chair of the First Nations Financial Management Board. His recommendations to prevent defaults and improve financial management must be implemented.

Second, we need more tax jurisdiction. Our communities have asked for a better version of the first nations goods and services tax, the aboriginal resource tax, and tobacco tax jurisdictions.

Third, we need a revenue based on a fiscal relationship, not one based on government transfers. First nations do not more dependency.

Fourth, we need to expand the First Nations Management Act to include our new tax and financial management jurisdictions, and to remove the constraints of the Indian Act.

Fifth, we need two new fiscal management act institutions. We need to have the first nations statistical institutions focused on a new fiscal relationship, and a first nations infrastructure institution that helps first nations build more cost effective and sustainable infrastructure.

Sixth, our land must be registered in our own land registry system. We need title to our lands. Interested first nations need the proposed indigenous land title legislation and proposed first nations land title registry.

Seventh, we need the capacity to implement our jurisdictions in a manner that grows our economies, and we need an excellent first nations public service. We need to expand the access to education and training at the Tulo Centre of Indigenous Economics.

Thank you.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you very much.

We're going to move on to our second presenter, Mr. Harold Calla, executive chair of the First Nations Financial Management Board. With him is Suzanne Trottier, director, capacity development and intervention, who is a Métis from Manitoba.

Harold.

[Harold Calla, Executive Chair, First Nations Financial Management Board]

Thank you Madam Chair.

Thank you for giving us the opportunity to appear before you.

I want to remind everyone, because sometimes we forget, that this legislation, when it was passed in 2005, was passed with all-party support. This is not a partisan issue. We've never come to these committees and not made people aware of that. We have some real issues—you all are familiar with them, and we don't need to repeat them here—and they require some attention.

Intervention is a symptom of a whole array of problems. This situation is not going to be solved overnight. The reality is that our communities became frozen in time. We were divided up into 633 Indian bands from among the nations that we had. It's now a problem that you have to deal with. Part of the challenge we're seeing in British Columbia and other places is the desire to reconstitute those nations, to get some critical mass.

Intervention comes about as a consequence of not being allowed to engage in the economy, to grow, to be in business, and of not having government powers. I think it's really important that you understand that this is what I mean when I say we became frozen in time. We became wards of the government in a dependency-based economy, and we've been fighting since the 1960s to move away from that.

Now, I'm an accountant by training and a member of the Squamish Nation in Vancouver. I understand the need for good financial management, but I also understand, quite frankly, that if you don't develop capacity in the areas of economic development and start talking about wealth management, you are not going to be successful. The cycle of dependency continues.

The challenges that you're going to hear about from the people who are going to speak to you later facing those who become involved in trying to support these communities are very difficult. We do not want to become better managers of the poverty that exists in our communities; we want to be in a position to share the experiences we all have from our communities and provide them to those who haven't had the benefit of that experience because of their location.

We're in a unique time in this country in which the northern communities have the opportunity, through their engagement in the major resource development that's contemplated in this country, to be the beneficiaries of a wealth transfer. We need access to the capital markets. You're going to hear from Steve about that. That's a fundamental issue.

I always like to ask: does anybody ever think there's going to be enough transfer funding to take care of the issues? I was at the Senate committee last year. Housing and infrastructure need between $20 billion and $30 billion. Where is all of that money going to come from, if we don't engage the private sector, if we don't engage in business and economic development? To do so, we have to be credible partners. We have to be credible governments; we have to be able to manage wealth, manage debt, and understand and communicate with our people.

A lot of what we do—and Suzanne does a great job of this—is building financial literacy in these communities. I always tell the story about my coming many years ago to Ottawa and having to leave on a Sunday. We were at a family gathering, and I said, “Auntie, I have to leave; I have to go to Ottawa to talk about fiscal relations.” My great-aunt turned to me and said, “Which one of our relations is named 'Fiscal'?”

[Voices]

Oh, oh!

[Harold Calla]

That's where we're starting from.

Why is financial management important? Minister Bennett came to me over a year ago and asked, “Will you help us look at intervention?” I said we will, but only if it involves capacity development; only if it involves our being able to get those communities through the door to certification and access to capital; only if it means that you're going to invest resources to allow them to develop community and economic development plans and will not be punitive towards those who opt in.

What we have today is a challenge, which you'll hear of next. How do you get out of third-party management? You use discretionary money to offset the deficits until the financial ratios look good. That's the first thing.

What has to happen is that the whole system has to change within the department, and people have to be empowered. The system has to change. The ratios have to change. We have to start looking at different ways in which we're going to achieve this success and this turnaround, and we should not force everybody to wait until we have somehow found the cash to balance the deficit and then start. We have to start from the very beginning.

We're enjoying success in the pilot projects that have been supported by this government. That is telling us what path to move forward on. It's about working with the private sector, working with the people you're going to be hearing from next. And it's about developing the means for capacity development and the means to provide an opportunity for many to get access to the centres of excellence capabilities they can't now access.

The Financial Management Board has supported the capacity development of 31 communities in the northern energy corridor in British Columbia. It has has been supported by the government, by the previous government, and continued by this current government. What we've been able to do is to bring together increased capacity for those people who are already involved, who are being consulted on how they would respond to these energy projects and what they would do with a $40-billion project. There's a huge difference in the capacity that's required to do those things, and part of the challenge that many of our communities face is their discomfort in how to even approach these issues. You just back away. We all suffer: Canada suffers and our first nations' communities suffer when that happens.

Part of the solution that you're going to discover here is the need to invest in capacity development. I appeal to you to not be swayed by the notion, “Well, you want more money. It's at an increased cost.” You're going to face increased costs if we don't do this, because the cost of the social net is going to go up. We can't build healthy communities on the backs of welfare and shelter allowance. We need to build communities that can engage in the mainstream economy, that can contribute to the mainstream economy.

Think for a moment, and look at the gap that exists between aboriginal and non-aboriginal communities. As we develop wealth, where are we going to spend it? We're going to spend it in our communities. Who is going to benefit from that? Every Canadian.

Yes, there are some pretty significant issues. There are some policy issues within the department that they're willing to work at, and we're starting to work with them, but this concept of institutional development in an optional way has to become the model that we move forward with.

I think this paternalism—perhaps well intended by the Indian Act and the Department of Indian Affairs—and paternalistic attitude have to change. We have to build on developing our institutional infrastructure. We have to have our equivalent to your central agencies. We have to be able to talk to the Department of Finance, to Treasury Board, to the PCO. We have to be in those arenas to talk about the solutions, and first nations institutions are the best way for that to happen.

I really appreciate the support that we've been given to engage in this pilot project. We think it will become a model for the future, and we hope that you will, too.

Thank you.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you very much.

Our third presenter, from the First Nations Finance Authority, is Steve Berna, chief operating officer.

It's all over to you, Steve.

[Steve Berna, Chief Operating Officer, First Nations Finance Authority]

Thank you, Madam Chair.

Committee members, thank you very much for your time this morning.

My presentation is going to focus on up-front safeguards. The First Nations Fiscal Management Act is a modern-day equivalent to what provinces and municipalities have enjoyed for a long time.

Chartered banks, when they lend money, lend it based on a collateral approach. The problem with collateral is that it is a post-problem solution. In other words, something occurs to a first nations budget, either through overspending or a default on a loan, and then the collateral comes on.

When the First Nations Fiscal Management Act was created, it was the result of a desire that first nation chiefs, councils, and members set up a solution whereby safeguards would be put in place before problems occurred. My presentation is going to focus on what we've established by way of up-front safeguards, so that intervention is not needed and economic growth can occur.

Our mandate under the First Nations Fiscal Management Act is to create a structure that allows first nations communities from coast to coast to voluntarily put up their hand and get scheduled according to the act. When that occurs, they have to knock on Harold's door first. There's a process before they can become a member and there's a process for acquiring loans. The reason for this is that we borrow as a pool. Right now there are 207 or 211 first nations, depending on how many are pending, and that's fully one-third of the first nations across Canada who say they would like to use this model. The approach is that every first nation that joins has to meet the same high-jump requirements. They have to meet certain financial ratios and economic ratios; they have to have budget, finance, and audit committees; and they have to maintain surpluses, or close to surpluses, as we monitor them each year.

There's a process to becoming a member. This is a holistic approach. We don't just provide a loan and hope it gets repaid. It's a holistic approach to take communities and improve their internal capacity, to monitor them, and to provide safeguards on loans going forward.

We do not work in a vacuum at FNFA. All of our processes are vetted by rating agencies prior to loans going out. You've probably heard of Moody's and Standard & Poor's. The loans are vetted by our own legal counsel, who has to give an opinion on the loans. They are vetted by our banking syndicate's legal counsel. The banking syndicate is the six chartered banks and the capital markets divisions of those banks. The loans are also vetted by investors.

We have a whole process with checks and balances prior to our board's even putting up their hand and having a unanimous vote on whether a loan goes out. That's what I mean by a holistic approach. We make sure everything is okay and then give a loan. We do not take collateral, by the way. We focus on up-front safeguards and work from there. It's a different approach, but it's a modern-day approach.

We have mechanisms to establish safeguards to prevent loan defaults. Our board is made up of chiefs or councillors from seven different provinces, and they must be unanimous in both accepting a member and in approving a loan. Having a unanimous board requirement means that up-front safeguards must be very strong.

We have over 200 first nations. There's very strong support in the west. The idea was centred in the west originally and fluctuated through there. Since 2012 , when first nations were allowed to use their own revenue sources to support loans, growth has been from Alberta eastward. We now operate in 8 out of 10 provinces—we have none in Newfoundland, and none in P.E.I. We have one territory in the Northwest Territories. So it's fairly well distributed.

The acceptance of the First Nations Fiscal Management Act is increasing, not only in terms of numbers—69 in 2012, and 207 at the end of 2016—but also in terms of the rate of increase, which is growing. This is presenting us not only with a happy story but also with challenges on our staff to accommodate as they line up in front of the door.

Page 6 has a breakdown of our loans right across Canada since 2014. The first nations we have lent to have used their own monies. I want to make sure that's clear. These are not monies from Canada that have been leveraged into loan; these are their own-source monies. Where they have needed community priorities to be completed, they have looked at their budgets and worked with us to make sure their own monies can support these loans going forward.

Page 7 is a summary of what they've done with the monies we have lent. As of right now, we have lent $343 million. There's another $77 million pending, and that's in the last two and a half years. There have been 71 new houses built and 30 remediated, and that's with their own monies. They have built a new school rather than wait for Canada to find the cash, pay as you go. They've built wellness centres, recreation centres, administration buildings, paved roads, etc.

With a lot of these communities, if you look at them today, as a result of their own monies being leveraged through the First Nations Fiscal Management Act, they're starting to look like towns. That's the whole goal of this.

The other objective is economic development. Where they're seeing economic projects they can participate in, they are also borrowing for those purposes. We have done five green energy projects: run of river, solar, and wind projects. Mashteuiatsh in Quebec has participated in the largest wind project in Canada, and we lent money for that about four months ago. The projects are not just for infrastructure or buildings, but also for economic development, which then can be leveraged into future loans.

There was also a purchase of land. When we lend for land, there are no restrictions on the community. They can go straight into putting it into reserve status. If a bank lends, they put a collateral against it and it is tied up. It cannot be added to reserve. That's one of the reasons we do not take collateral. There are safeguards in place, but there are also benefits in place.

On page 9, if you ask where the first nations get their monies to leverage, each province has revenue-sharing agreements with the communities within their provincial boundaries. We contacted each of those provinces a number of years ago and asked if they would be willing to work with us to set up a structure for loans that would help prevent loan defaults. Each of those provinces put up their hands and said yes, we will, because the monies will then be spent back in their provinces for their projects.

It's a simple program. Where the first nation used to receive money directly from the provinces, the provinces have agreed to take those monies. The first nation has sent them a letter requesting that they do that and transfer those monies directly into a trust account. That trust account is run by a Canada-wide organization called Computershare, and Computershare does two simple things with the monies. They ask FNFA what is required to pay the loan—this is an upfront safeguard—and we get the money to cover the loan payment. The balance within 48 hours is transferred back to the first nation to spend it however they want under their budget. It is called a revenue intercept approach. It was agreed to by Bay Street and Wall Street; it was agreed to by investors, and it was agreed to by first nations.

Now with regard to the benefit of that, if you go to page 10, these types of revenues that are intercepted can now be leveraged. FNFA sends a letter to each chief and council that outlines, based on each community's revenue streams, what amount they can borrow. That letter is like a line of credit. Chief and council then know under the safeguards upfront that they can spend to meet community priorities up to their borrowing capacity. This allows them not just to do one year at a time, but to do multi-year planning and multi-year projects.

Page 11 is a summary of what this looks like. I have one more page after this. Right now, the provinces—and some little bit from Canada—send $70 million into the trust account. We keep about $11 million of that. The other $59 million goes back to the community to spend how they want, but when you have a coverage ratio of 7.14 times—in other words, seven times more money being intercepted than needed to pay the loan—that upfront safeguard of revenue intercept means no loan defaults.

We have been operating loans for five years now and have never had to call upon Harold's shop for help.

On the last page, we lend at below the bank prime rate. By having these safeguards up front, we do not have a profit motive. Our loans are actually a rates below what the banks' best customers get at prime.

We also have long-term programs that allow the loans to match the maturity of the assets. You have a process whereby the loan is being paid over the asset life. This is a modern-day solution, but one set up to meet the needs of first nations to allow them to grow and also to ensure that there are no problems once the loan is given.

Thank you, Madam Chair.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you. That's fascinating.

Now we're going into the rounds of questions. I'm going to ask members to try to be specific about whom you're asking. The first round of questions goes to MP Massé.

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

Thank you, Madam Chair.

Thank you, everyone, for participating in the work of our committee.

I'll be asking my questions in French.

As I said, I am very pleased that you are taking part in our work today, which is very important. The default prevention and management policy was implemented to address major financial management issues for first nations communities.

To help us mere mortals, can you tell us, based on your experience, what are the three main problems that first nations communities face in the management of their financial resources?

This is for Ms. Trottier or Mr. Calla.

[Harold Calla]

Go ahead, Madame Trottier.

[Suzanne Trottier, Director, Capacity Development and Intervention, First Nations Financial Management Board]

First, we see that the communities do not have enough funding. This makes it very difficult for them to avoid defaults. They actually have to use their own funds to pay the third-party manager. It is very difficult.

Second, it is often the case that isolated communities have problems in other areas. That could mean health problems, or problems between an elected council and a cultural or hereditary council.

Third, these communities do not have access to training to develop their skills. They do not have the necessary funding.

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

Thank you, Ms. Trottier.

What is the reason for this lack of funding?

This matter was raised in previous testimony. The lack of funding that is mentioned often is a basic problem.

Is the lack of funding due to the government not transferring the funds or not transferring enough?

Is it related to the ability to generate sufficient revenues?

I am trying to understand what the underlying problem is.

[Harold Calla]

I think we need to recognize that we have the fastest-growing demographic in the country. Fiscally, we have been in a period of restraint in this country. Funding levels have not kept pace. There hasn't been any economic development.

Many chiefs and councils find themselves stretched to the limit. They face many difficult decisions no different from the kinds of decisions you have to face, and they have to make decisions not in Ottawa, but in their communities. Is it health? Is it housing? What do you do?

There is insufficient transfer funding, absolutely, but more fundamentally, there aren't the incentives and the opportunity to generate own-source revenue, to generate tax revenue.

We have to look at this solution from two lenses. One is, yes, there does need to be an adjustment to transfer payments—there is no question about that—but just as important, we need to deal with issues like additions to reserve. Why does it take forever? Get these lands into reserve and allow communities, particularly many of those that have TLE lands, to put those lands in urban centres to work. We need to be in a position where the concept of bringing taxing jurisdiction into communities is becoming more of a reality in an expanded way. These are pretty fundamental discussions that need to take place. There are many elements to the solution, if I can call it that, and we say yes to increased transfer payments, particularly to invest in the capacity development that's required so that they're in a position to understand how to engage in the economy.

We're in a unique position in the financial management board, because we have five years of financial statements for about 100 first nations in this country. To give the certificate to that first nation so they can go to Steve, we have to issue a financial performance review. We see a lot. In particular, we really need to help communities that have not been exposed to business opportunities before and support them in developing that own-source revenue. That's what I think is the ultimate solution here.

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

Thank you.

Maybe I'll ask you one last question, Mr. Calla. You've mentioned many times that capacity development is one key component. I would like to hear more from you in the minute we have left. Explain to us a little more what you mean by that. What is needed more concretely in terms of capacity development?

[Harold Calla]

Structure: how do you make business decisions? I had the great opportunity to serve on the boards of CMHC and FortisBC. You need that corporate structure. You need to understand it. We often refer to it as moving to process-based decision-making from personality-based decision-making, so that you have the checks and balances that are needed.

Human resources in and of itself is a challenge for many communities. We go through our certification processes, and they will get through them, but you can't just walk away from them, these communities in the north, once they're certified. I've spent a lot of time with these communities in the northern corridor just in discussing this. How do they engage in a conversation with Shell Canada? What do they need to do? What kind of capacity do they need?

We've been supported by government in doing some of this work. We've created a coalition, and that coalition is providing tools to the 31 communities instead of those 31 communities each trying to do it themselves. That's what we mean by capacity.

When we look at this solution, some of that aggregation has to be part of the policy changes that are made—the ability to aggregate.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.

Our questioning now moves to MP Cathy McLeod.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Madam Chair.

Thank you to all the witnesses, and thank you to all your organizations that are doing really great work out there. We appreciate that.

We know we have a system that is not working. We've heard some great suggestions, and I'll ask each of the witnesses a particular question. If you were to say that there was one short-term recommendation you would want to see in our report, and one longer-term one, what would they be?

Perhaps I'll start with Steve and work my way down.

[Steve Berna]

Let's start with Harold and you can work your way up.

[Voices]

Oh, oh!

[Steve Berna]

Sorry.

[Harold Calla]

I think the most important thing is to recognize that there's got to be change. I say that and it doesn't seem like a lot, but it is the most fundamental problem when you get in here, and it's not just change in this room, but change within central agencies in this city. There's got to be change, there has to be investment in that change, and it has to be done through first nation institutions.

[Clarence T. Jules]

There are a number of recommendations I could make, but my focus is on land and taxation. The first thing is to pass a piece of legislation to recognize our own title to our own lands, which are now held by Her Majesty. In that way, we would have an orderly expansion of our land base.

The other thing we have to be able to look at is an aboriginal resource tax so we can share in the bounty of all the tax revenue that's collected within our treaty and traditional lands and be able to build infrastructure on our own without dependence on the federal government.

The third item is the creation of a first nations infrastructure institute. One of the problems we have in building infrastructure is complete dependence on the federal government for its building and ongoing maintenance. If we had an aboriginal resource tax, we would be able to fill in that function as well.

Training obviously is an important component of all of this. That's why I recommend looking at the Tulo Centre of Indigenous Economics. We need a trained, professional public service.

[Steve Berna]

I'm going to take a bit of a different approach. In the short-term, right now, we have 207 or 211 first nations. That means there are another 400 first nations that are not part of it. The geography or land base in Canada is huge. The ability to travel to communities within our budgets is limited. I really think you need some kind of forum, either provincially or federally organized, where you can educate the communities that there is a new process, because 211 first nations have heard it and some 400 still need to hear it. Then they can make choices on whether they like the new path or not. There are definitely safeguards that not only protect the community members when the current council is in power, but when there's a change those safeguards stay in place for subsequent councils as well. Then you don't need intervention.

In a long-term approach, I think communities need qualified chief financial officers, because they are not like municipalities that simply collect taxes, pay the bills, and look after infrastructure. First nations are getting into economic development, and that is a whole different set from what an accountant needs. You need a chief financial officer.

So what is needed is education on what is possible as a change, and let's find a way to get qualified CFOs in their communities to make decisions going forward.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you.

My next question is for Mr. Calla. You talked about your pilot projects. Can you use an example and tell me what you're doing and how you're getting to where you need to be?