Evidence of meeting #50 for Indigenous and Northern Affairs in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was communities.
A recording is available from Parliament.
Executive Chair, First Nations Financial Management Board
I defer to the expert.
Director, Capacity Development and Intervention, First Nations Financial Management Board
Thank you.
I won't give any names as examples, if that's okay, but we're working with a community in Manitoba, one of the flooded communities. There's a big willingness—and that's one of the critical elements that we see as a key to success, the willingness, the tone at the top from the council, from the elders in the community. We start with that. We start with communicating with the community members as well. It's very important that they be aware and onboard with what this new framework is, this new approach. It's important that they understand that we are a first nations organization run by first nations for first nations. That really is what I think we bring to the table, that we can say things to our clients that other institutions such as INAC cannot say.
We then work with them in starting to build the capacity. We start, as Harold said, with processes, governance structures in place. I'm making sure that everyone understands roles, responsibilities, getting a finance and audit committee in place, getting them the expertise that Steve was talking about. That is how we start and then we work through. It's an internal control framework. It's based on best practices, COSO, the Committee of Sponsoring Organizations, and we work through that. There's training, hands on. We have staff on the ground there working with them very frequently. It goes through that process, so there are certain milestones that have to be achieved. We have a work plan, a capacity development plan. That's how we're doing it.
Conservative
Cathy McLeod Conservative Kamloops—Thompson—Cariboo, BC
Okay.
I know I've had this conversation with you before, Manny, but why do you want to call it an aboriginal resource “tax” instead of “dividend”?
Conservative
Chief Commissioner and Chief Executive Officer, First Nations Tax Commission
Obviously taxation is a fundamental jurisdiction, and dividends are something you get with a business agreement with a corporation. Our governments need tax jurisdiction to be able to take care of themselves. Right now there's a complete dependence on transfers from the federal government that will never, ever maintain the quality of life that we're choosing. We won't be able to build business-ready infrastructure. Even with the murdered and missing women inquiry, all of the results of that will require more funding from the federal and provincial governments.
If we had tax jurisdiction within our treaty and traditional territories, we would be able to devise programs that met our own needs.
Liberal
The Chair Liberal MaryAnn Mihychuk
The next questions go to Pierre-Luc Dusseault.
Welcome to our committee.
Pierre-Luc Dusseault NDP Sherbrooke, QC
Thank you, Madam Chair.
Thank you to all our witnesses today.
Let me say first of all that the discussion this morning is productive. It will certainly be informative to the committee. Moreover, it will help the government put words into action and build a nation-to-nation relationship. To do this, the first nations will, however, need greater independence, in my opinion.
Mr. Calla, Ms. Trottier, would you recommend the First Nations Fiscal Management Act of 2005 as a starting point, and then making changes to it?
Or do you think a complete overhaul is needed to modernize the financial management of first nations reserves?
Executive Chair, First Nations Financial Management Board
That is a great question. For many, they'd like a revolutionary approach: let's get rid of the Department of Indian Affairs and let's do all of these things. I think that while that's an emotional response and an ultimate goal, we don't want to set ourselves up for failure.
An important part of this conversation is that we can't wait to move forward until all 634 first nations in this country are able to move forward. Those who are ready have to be allowed to move, and we have to invest in the capacity development of those who are not able to move forward today.
Yes, there has to be a change, but the fundamental change is changing the dynamic of the fiscal financing relationship. I know there are conversations going on now with the AFN—I'm going to some of those this afternoon—around some of these issues. We need predictable, securitizable revenue streams, wherever they come from.
Cathy, in response to your question, we want both dividends and tax. We want equity. We'll buy the equity, but we need to become part of the mainstream.
Liberal
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
On the wealth management issue, you also called it capacity management. With the transfer you receive from government, do you have any capacity to invest and do wealth management, or is it prohibited at that point in time? Are you looking at the right under the law to be able to do that, to do wealth management with the money you receive?
Executive Chair, First Nations Financial Management Board
The money we receive is for programs and services. You can't use it for other than that. There's a whole raft of reporting requirements that are required to the various departments on the use of those funds. We do get some upfront cash to cover expenditures, but it's very minimal. There's really no investment opportunity. There is for your own-source revenue, but not for government transfers. There's not enough.
NDP
Executive Chair, First Nations Financial Management Board
I think we'd like to. I mean, what does reconciliation mean? What is nation-nation going to mean? I don't know what those things are. To me, it has to be a sharing of the wealth in the context that people sought at the time the treaties were signed.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
Maybe part of that would be empowering you to be able to leverage your own taxation—but that's probably a question for Mr. Jules.
I'm wondering if you want to see a similar approach to what we have with the provinces, municipalities, and even school boards. In Quebec, for instance, we receive some invoices from school boards for tax purposes, because they want us to pay taxes. Are you looking at a model similar to that, where your own independent government is able to tax on your land and lever the monies that can be used later, I guess, to do a kind of wealth management?
Chief Commissioner and Chief Executive Officer, First Nations Tax Commission
This government is committed to a new fiscal relationship; it can't be based on program transfers. In order to do that, we need jurisdiction that extends beyond our reserves into our traditional territories and into our treaty lands. That means that both the federal and provincial governments will have to vacate, in an orderly fashion, tax jurisdiction so that our first nation governments can occupy it, with all of the other constraints that go along with good governments—transparency, accountability, having appeal mechanisms, etc. Only when that situation happens will we be able to live on this land getting benefits from business development and empowering individuals to participate in what I call the bounty of the land.
The leadership has to come from the federal government. If they're true to their words in saying that they want a new fiscal relationship, it can't be based on programs, because you can't lever them; you can't get into more economic development.
A good example is the amount of infrastructure that we require on our lands. The total costs range anywhere from $40 billion to $45 billion. There's no way this government or any other government will be able to write a cheque for that. The only way that I feel it will happen is that first nations have the jurisdiction to leverage it on their own, using their own resources and tax jurisdiction to accomplish it. Otherwise we're going to be completely dependent on government forever, and that isn't why we're here.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
What about the possibility of first nations benefiting financially from natural resources development on reserves?
Executive Chair, First Nations Financial Management Board
Maybe I'll start.
May I?
Executive Chair, First Nations Financial Management Board
It's exactly what we're doing in British Columbia with all the major resource development. We've been in the Ring of Fire communities as the Financial Management Board, building literacy to do exactly that. We believe it's from this that the wealth has to come in our communities.
Concerning environmental assessments, the whole process is changing. We've had some great success in this town this week with Environment Canada and NRCan.