Indigenous and Northern Affairs Committee on April 6th, 2017

[The Chair, Liberal, MaryAnn Mihychuk]

I call the meeting to order.

We are here to talk about default prevention and management policy. I would like to, first of all, acknowledge that we're on unceded Algonquin territory, particularly at a time when Canada, from all parts of it, is starting to understand the truth, and to work through reconciliation. Thank you so much for coming.

Pursuant to Standing Order 108(2), the motion adopted on February 21, 2017, the committee resumes its study of default prevention and management policy. This morning we have two groups for the first panel, the Swampy Cree Tribal Council from Manitoba, and Andrew Yesno from Matawa First Nations Management.

Welcome. The way that it works is that each group gets 10 minutes to present, and then there is a series of questions afterwards. One of the two groups will take the first round.

Chief, welcome.

[Grand Chief Nelson Genaille, Grand Chief, Swampy Cree Tribal Council]

[Witness speaks in Cree]

[English]

I acknowledge you. I'm the chief from the Sapotaweyak Cree Nation. I'm also the grand chief of the Swampy Cree Tribal Council. My community is on the Treaty No. 4 territory.

My grandfather was a headman, so we sort of know the first instincts about entering into the treaty. It was the white person bringing what was promised.

A lot of time has passed. I'm here with my fellow chief from the north, Mathias Colomb Cree Nation.

There are two stories as to how we got to be where we are. My story would take a long time to understand. There's the story of the colonizers when we entered the treaty, and what the true intent of it was supposed to be.

Default management—it's not our way. Our default management was living off the land and continuing to live off the land. We're still two worlds apart. From my understanding, from my headman and my grandfather, it was to allow people to come into our territory to exchange, provide, and give us hunting stuff—nets, traps, shells—and to continue and to allow you to be in our Sapotaweyak territory.

Management is a little unique to us. From our understanding, annual contributions are given to us as grant money for the resources extracted from our territory. There should be no management services with regard to what's in default and what's not in default. We should be the ones sitting here and asking you, “What are you doing to our land? What's the remediation doing to our land?” We should be doing that, but I guess we have to follow this way of government, Canada's corporation, in exchange for what we could do.

As the grand chief of the Swampy Cree Tribal Council, I'm a person elected by a grassroots people. I'm on my second term. My predecessor is sitting beside me. Chief Arlen Dumas was there before as grand chief. They are to help and assist communities that are not reporting correctly or not reporting on time. This is what happens to us annually.

When we do general reporting, on social services for one thing.... I used to be a welfare administrator in my community. We were given an annual budget. It's supposed to be a dollar-per-dollar ratio. I'm being advanced the money to distribute. That's doing my job. I work alongside my provincial counterpart. Working with them, we collaborate on what's eligible and what's not eligible. At the end of the day, my counterpart, who works for the town, doesn't have to comply with anybody, under the province. It is a provincial act.

It's the same thing with the O and M services in the communities. Twenty years ago, in 2006, they stopped. My community didn't stop growing. Already 20 or 21 years now have passed. I'm still using the same numbers from back then.

In essence, why are we underfunded? That's the first question. Why are we underfunded? I should be asking you that question.

As a business in Sapotaweyak Cree Nation, we expanded our economic development using TLE. Now as a community, I get the benefit. But I had to explain to the previous government what I wanted, which is economic development, to prosper and to develop businesses outside my territory.

On the reserves currently, what we call my community, it's still housing. I'm housed on this surveyed piece of property, not for me to come out but to live in that little settlement. This is not what my grandfather envisioned. My grandfather envisioned us continuing to live off the land, so that we wouldn't be dependent on anybody. That's what my grandfather wished for me.

A lot has changed in regard to providing services—technical services, advisory services.

As grand chief of the Swampy Cree Tribal Council, I used to see economic activity to provide external services to the member bands of the eight communities we service. In 2014, that was downscaled to a bare-bones $500,000 to deliver the same programs and services to the communities that required help. You can't do it, physically. My staff had to do double duty, but there were limits to what they could achieve. That's a method of trying to fail. You don't prescribe that to somebody just to watch them fail. Here I was thinking that we'd be contributing to the economy of Canada.

I'm going to give it to my fellow chief, Chief Dumas, to provide a supplementary commentary to our issue at hand.

[Chief Arlen Dumas, Chief, Swampy Cree Tribal Council]

Thank you very much, Grand Chief, and my thanks to all of you for inviting us to be witnesses.

I'm Chief Arlen Dumas from the Mathias Colomb First Nation.

I took the liberty of listening to all the other witnesses and presentations given here in front of this committee. I would like to sum up of those comments.

The message we'd like to deliver today is that this intervention policy is a punitive measure. It's all about control and has nothing to do with transparency or accountability. The further the government chooses to go along this line, the more harm it does to the communities from a first nations perspective. I take a look at my community. We are survivors of this intervention policy. It was initiated because of government interference and the government's opposition to the different stances we had taken as a community and as a nation in Manitoba and in Canada.

Because of that, we were reprimanded and subjugated for a decade. With that happening, as a fairly young leader in my community, I can tell you that from the day I was born until 2000 there were never any suicides in my community. We were forced into intervention in 1998, and we had our first community suicide in the year 2000. After that, we had a rash of them.

I was raised in a very opportune time when I was able to go to school and have these wonderful opportunities bestowed upon me. When I left my community, there was a great sense of hope. When I returned home in 2002, you could feel the despair in the air, simply because of this false narrative that we were unable to manage our own affairs. We went from being the beacon in the 1980s and early 1990s to being people who couldn't manage their own affairs, according to a false narrative perpetuated by the governments of the day. Essentially, that's what I'm here to present today, and I'll respond to some questions later.

I feel that in this co-management and intervention, a lot of focus was put upon third parties, but it doesn't a matter, because the second you move into this paradigm, it's a punitive experience. It will dictate whether or not you can complain about your contribution agreement, whether or not you can choose a different financial analyst, or whether you can complain that your population formulas were frozen from 1982.

In 1982, my community's population was 1,000. We're now well over 3,500 members, with the same amount of money. The issue is the chronic underfunding. It's not lack of reporting, transparency, or leadership. The fact is, we're chronically underfunded in all aspects of our community funding. In the time that we were in co-management, we didn't build houses and we weren't able to develop our infrastructure. In fact, the rules and mechanisms that exist within that infrastructure were very punitive to our communities. Once we get out of co-management, we hear that our lift stations have not been maintained for 10 years, that our infrastructure hasn't been maintained for 10 years, and so on and so forth.

It's also how the programs are laid out. We might get $300,000 to work on our housing stock, but then we're told we're not going to get any more money until that's paid off. My resources are already so slim. I ask how I'm going to do this, and they tell me I just can't manage my affairs. That's the reality of the issue.

I'm not sure how much time I have, but I'm looking forward to your questions a little later.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you, Chief.

That takes up the first 10 minutes and now I'm moving it over to Andrew and it's your turn to present.

[Andrew Yesno, Manager, Financial Advisory Services, Matawa First Nations]

Good morning, everyone. Thank you very much.

Meegwetch, Madam Chair, for the opportunity, and committee members for allowing us to be here today.

My name is Andrew Yesno, and I am the manager of the financial advisory services for Matawa First Nations Management based out of Thunder Bay. I've been there since 2015. I'm a member of the Eabametoong First Nation and a former bank manager of that first nation as well.

Matawa First Nations is a tribal council. We have nine member Ojibway and Cree communities. We provide a variety of advisory services and program delivery to our members. We are committed to quality assurance and are responsive to our communities' needs. We have embraced a quality management system, which we continually monitor and try to enhance. We are ISO 9001:2008 registered, and with this system it promises that we provide quality, accountability, and transparency through our enhanced planning, our policies, procedures, and processes, along with appropriate documentation and resources.

In my particular department, financial advisory services, we are available to help provide our member first nations management or leadership in administration by delivering governance and financial advisory services. These services provided include working with the band, finance and program managers, and various administrative staff, and we try to address their financial needs, personnel management needs, governance needs, and to assist where we can in capacity development. We assist them with policy development, financial planning, and try to give them the support we can for the preparation of funding proposals for different community-driven initiatives not of our own.

We maintain a collection of resources, and we continually update them, on governance, management, documentation, template codes, policies, procedures, work instructions, and basically information on best practices.

Our current status right now is that five of our first nations are remote communities. They are accessible only by air or by a continually unreliable winter-road seasonal network. Six out of our nine communities are currently under default management. In previous testimony that I've read it's been said to this committee many times what the reasons are, the factors, and my colleagues here mentioned as well why this has occurred. They are remoteness, lack of own source funding, lack of capacity and its development, the reporting burdens, lack of financial literacy, and of course overall, woefully inadequate funding. The list can go on and on.

Communities that fall under default management are faced with a heavy burden and that includes the additional costs of an RAA or a third party manager, and that stretches out what's already a thin band of support funding. Our particular communities of Matawa surround an area commonly referred to as the “Ring of Fire”. It's been described as one of the most promising mineral development opportunities in Ontario in almost a century. The estimates have suggested that within this area lie a multi-generational potential for chromite production, as well as significant production of nickel, copper, platinum, and other precious metals.

Faced with such enormous potential development with figures in the billions, it's clear that our communities need to have the capacity to move forward to be able to deal with this, if we are to have an active role in proceeding. We lack the expertise and are insufficiently funded to get it. Until then our communities will continue to engage both the province and federal government for solid commitments and adequate funding to see our nations become prosperous.

As a tribal council, as mentioned we have also seen our funding cut. In 2014 the previous federal government changed its policy surrounding first nations tribal councils funding and cut core funding to services being provided to the communities such as financial advisory services, in the thinking that other national organizations would be there to fill in the gap such as AFOA, or FNFMB. In our region, although attempts were made, that has never really materialized and the void is still there.

It's our organization's position that tribal councils have always been underfunded, right from the start. We have always argued that as tribal councils, we were doing the work of three to four bureaucrats for every one tribal council staff member that INAC had before this program even began.

The current system has been a failure. First nations across Canada are spread out over large geographic territories. Many are remote, and this is not adequately addressed in the current funding model. Five out of our nine communities are remote. Return airfare costs range from $420 return to fly to our closest community to over $1,200 to fly to our farthest. It's inconceivable that we are expected to deliver proper services equally to our members when faced with the costs of travel in the north. The formula does not work for tribal councils such as ours.

We feel that member tribal councils should be directly involved and properly resourced to provide training right at the community level. This will require adequate resourcing for both tribal councils and first nations. The current tribal council funding program was created over 35 years ago. Federal programs typically undergo program review every five years. Despite a major review of the program in 2002-04, the tribal council funding has not undergone any significant modifications since 1986, with the exception of the significant cuts in 2014-15.

It's our belief that a new review should be conducted, taking into account the modern challenges and complexities that face tribal councils across Canada. It should not be an INAC-led, top-down approach, but should be in collaboration with existing institutions, tribal councils, and at the grassroots level, hearing from the communities themselves.

Thank you, Madam Chair, for your time.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.

Thank you very much for your insightful words and the description of your communities.

We'll open up the session to questions from the members of Parliament. The first round goes to MP Michael McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Madam Chair.

Thank you to the presenters. I come from the Northwest Territories, and I work a lot with the band councils. Even to this day, as an MP, I have a lot of discussions with the aboriginal population in my riding. I was very happy to hear your presentations. At the same time, I can relate to your situation. Almost every band council in my riding is in a deficit situation, unless they're in a land claims...have settled land claims and self-government.

I certainly agree that the funding was insufficient right from the start. I worked as a band manager way back. At that time there were two pots of money, one for core funding and one for the band manager. When we'd get together, it was a standing joke that our salaries were more than the core funding. Over the years I watched the funding cuts happen, and they pretty much brought any council business or activities to a standstill. They were barely able to keep the lights on. I met with one of our chiefs yesterday. He talked about one of our band councils being $750,000 in deficit, with just no way out. It's a similar situation to almost every other band council in the north.

I want to poke at this a little bit, at the root cause. We talked about insufficient funding, but maybe that was the case all the way through. We didn't have tribal councils in deficit situations, even though when we first started the funding was insufficient. What are maybe some of the causes of that? Is it maybe because of financial administration? Could it be that we don't have the resources within our funding to properly manage and report, with the large amount of reporting that's required? As well, Chief Dumas talked a little bit about the inability to participate in economic development.

Perhaps I could get you to expand on some of these issues, starting with Mr. Yesno.

[Andrew Yesno]

Like you mentioned, from the beginning the funding has been inadequate, but the burden that is put on our communities, our tribal councils, has increased and grown. The world has evolved, and we've had to go along with it, but staying with the same small pot of money, we are expected to do more with less.

Thinking back to when I was a band manager, asking INAC for assistance was so complex and we had so few employees. We asked if they would be able to transfer funds directly to education rather than flow through the band. They said, “We're not your accountant. You do that”. I said, “You've cut our funding. We don't have the capacity to do that on top of everything else you're asking us to do”. The response was, “Well, there are cuts everywhere”. Basically, they said to suck it up. That kind of attitude just doesn't go well. We need to be able to work together from both sides.

The amount the funding has increased is just minuscule compared to what the needs are and what salaries are. We want to hire competent staff. We want to have CAs and a CFO to be able to have confidence that we can do the work and the reporting that's needed.

We have CMHC these days. We have first nations and Inuit health. There's education funding. There's provincial funding transfer payments. It just goes on and on, and we have the same small band staff.

[Michael McLeod, Liberal, Northwest Territories, NT]

We'll move on.

Mr. Dumas.

[Chief Arlen Dumas]

I'd like to reiterate a couple of my other statements. It's a fact that we are chronically underfunded. As I said earlier, in 1980 our population was just 1,000 people. Now we have 3,500 and the same annual budget to administer all of our programs in the community. Our social program alone has a budget of $6 million a year. We're permitted one and a half people to administer a $6-million budget. If you were to take a look at a different organization that had a $6-million annual budget to operate, you'd be surprised to see how many finance people it would take to efficiently manage that amount of money.

It seems that all of these initiatives come from a wrong-minded approach, and the reality is that we're underfunded and understaffed.

[Michael McLeod, Liberal, Northwest Territories, NT]

We're running out of time, so I just want to quickly move into—you're here now—what you would recommend the government do to change this.

[Chief Arlen Dumas]

Get rid of this policy and give people—

[Michael McLeod, Liberal, Northwest Territories, NT]

Which policy?

[Chief Arlen Dumas]

The intervention policy. Also give people adequate funding to administer what it is we need to do. Cease with the lack of transparency talk. Cease with the mismanagement talk and come to the truth of the matter. If everybody had had full disclosure back in 1982 when communities started negotiating education agreements and health agreements and the federal government at the time had said, “Okay, this is what it's going to cost you to operate, and this is what we're going to give you”, we'd all be in a far better place. We would have invested in our economies. We would have participated in the surrounding economies, like we're displaying today. But instead of doing that, people said, “Well, if you can't manage your funds, then you're unable to do it”, but nothing could be further from the truth.

The fact is that there have been co-managers and intervention for the last decade, and we've had these alleged experts managing our affairs for the last decade, and we're still not any better. This is a testament to the fact that it's a wrong-minded approach, and it won't work. Only we know what needs to be done, so we may as well be allowed to do that.

[The Chair, Liberal, MaryAnn Mihychuk]

You have 20 seconds.

[Michael McLeod, Liberal, Northwest Territories, NT]

One of you could perhaps give us your recommendations.

[Andrew Yesno]

I'd echo exactly what Chief Dumas said, but I'd also say that you need to do a thorough review of tribal council funding and the way that is set up. It hasn't been done. There have been reports and recommendations made over the last 30 years on how to change it, but no modifications. None of them have been adopted. We have to take a fresh, new look at it.

[The Chair, Liberal, MaryAnn Mihychuk]

Thank you.

Questioning now goes to MP Viersen.

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

Thank you, Madam Chair, and thank you to our guests for being here today. This is an important topic.

At the last meeting, I said that it seems as though, if you trip the wire of entering into the first levels of default prevention management, you begin the long process of circling the drain to ending up in third party management and you therefore never even get out of it. The last witness we had here talked about their tax bill. It started out at $214,000, and because the third party managers never paid it, it's now nearing $1 million. Because they don't control it, they can't even pay that tax bill if they want to, so there are definite problems here.

Would you propose a solution? Default management is in every government ministry. I know back home there is a county near my riding where the Ministry of Municipal Affairs stepped in and removed the entire county council and then starting managing that particular county because there were significant issues there. The basic policy is that if money is not being managed or if services are not being provided, those kinds of things, that is essentially a tripwire for any level of government.

Now you're saying that you don't have enough funding, and that definitely could be the case, or in your case, with one and a half people to manage $6 million, it could definitely be.

Would you agree with me that there should be some sort of accountability structure? I'll go back one step further to something I call the golden rule. The golden rule typically means to treat others as you would like to be treated. However, I like to say the golden rule is that he who holds the gold rules, essentially. When that happens, the person holding the gold is going to say, we're not appreciative of the way this is being managed and we're going to pull it back and put in a different method. That's what's happening here.

What would be your solution? The rules are always there for the anomaly, right? When everything is going well, everything is going well. When you enter into default management, you begin the long process of circling the drain.

What would you propose? We all have to admit that, at some point, if somebody is being fraudulent or something such as that, we have to take care of that. We need to take care of that. We're not saying that's always the case, but if that is the case, we need to be able to take care of the fraud that's happening there. One of the tripwires is that the auditor has flagged concerns about the financial statements, right? That could be flagged because he suspects that there is fraud. Rather than putting you into default management, what would your solution be to say, we suspect fraud in this particular area, so how do we bring that to light and find out where that fraud is taking place?

That rule is now happening and we have a whole bunch of communities falling into default management, not for fraud but for another thing. However, we still need a rule to deal with fraud.

[Chief Arlen Dumas]

I'm not sure what your question is, but I would like to answer it because you triggered a statement that I'd like to respond to.

Fraud is a very specific thing and I would encourage anybody who discovers fraud to persecute that person to the fullest extent of the law. However, the reality of the issue is that from a first nations perspective we have to audit ourselves. We have to report ourselves many times over, and if you're going to compare apples, you may as well compare apples, not oranges. Municipalities and provincial budgets are far different from ours, right? If we're going to compare things, we need to compare them to the truth of that, to that extent.

In my opinion, fraud is fraud and that should be prosecuted.

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

I apologize if I triggered something. That's not the intent here.

What I'm getting to is that we need a policy of some sort. What sort of policy would you design?

We're going to hear from Charmaine Stick right after you guys. Maybe it's even a local band member who says, “Hey, something is going on and we want some resolution here”, or “Education services are being provided in this community and are not living up to the standard”. If somebody wants to change something, often in most communities there isn't an alternative. There isn't a second school that you can send your kids to. There's one school. What would be your alternative to default management?

One alternative that I would think of is a voucher system. If people are saying that this wire has been tripped, rather than putting the money into the band council or into third party management, can we put it directly in the hands of the people in your nation?

Have you thought at all about what would be the alternative?

[The Chair, Liberal, MaryAnn Mihychuk]

We only have time for a short response of one minute. Go ahead.

[Grand Chief Nelson Genaille]

It's a historical treaty answer to the question. As I mentioned before, my grandfather entered the treaties, right? When we did that, we put the onus on Canada and on Her Majesty to look after the best interests of our resources. When you look at default management, I look at who we vested our interest to: the Queen and with Canada. When I look at the big deficit of Canada, you inherit that deficit. It seems like you're not able to support and accommodate our growth and interests.

As a community, I'm an Indian Act chief. My audits are all good, excellent audits, but I don't get the recognition to say that I'm doing a good job. It comes down to the fact that I have been there for a long, long time. Section 74 does that. It strips you away to do that. A person who is certified to be an account manager becomes chief, then two years later, they're gone. He was a good Indian Act chief, but in the best interests of 74, he got removed.

When you look at better management services, I have a business in an urban setting. It's a business and I make a lot of money from that business. I don't see anybody coming back to me and saying to the town of Swan River, we're providing back and we're giving back. I don't see that happening. When I see a community defaulting and a co-manager taking over the interests of that band, they're not going to get out of it. You're going to sink deeper and deeper in that hole.

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

Yes. We've established that—

[The Chair, Liberal, MaryAnn Mihychuk]

We're over time. Sorry.