Indigenous and Northern Affairs Committee on June 5th, 2020

[The Chair, Liberal, Bob Bratina]

We will get under way now as I call this meeting to order.

Welcome to meeting number 14 of the House of Commons Standing Committee on Indigenous and Northern Affairs.

I'd like to start by acknowledging that I am joining you today from the traditional territory of the Haudenosaunee, Anishinabe and Chonnonton nations.

Pursuant to the order of reference of April 20, 2020, the committee is meeting for the purpose of receiving evidence concerning matters related to the government's response to the COVID-19 epidemic.

Today's meeting is taking place by video conference, and the proceedings will be made available on the House of Commons website.

During this meeting, the webcast will always show the person speaking rather than the entirety of the committee.

In order to facilitate the work of our interpreters and to ensure an orderly meeting, I'd like to outline a few rules to follow. Interpretation in this video conference will work very much like a regular committee meeting.

You have the choice at the bottom of your screen of “Floor”, “English” or “French”. In order to resolve the sound issues raised in recent virtual committee meetings and ensure clear audio transmission, we ask those who wish to speak during the meetings to set their interpretation language as follows: If speaking in English, please ensure you are on the English channel. If speaking in French, please ensure you are on the French channel. As you are speaking, if you plan to alternate from one language to the other, you'll need to also switch the interpretation channel so that it aligns with the language you are speaking. You may want to allow for a short pause when switching languages.

Before speaking, please wait until I recognize you by name. When you are ready to speak, you can either click on the microphone icon to activate your mike, or you can hold down the space bar while you are speaking. When you release the bar, your mike will mute itself, just like a walkie-talkie.

As a reminder, all comments by members and witnesses should be addressed through the chair.

Should members need to request the floor outside of their designated time for questions, they should activate their microphone and state that they have a point of order.

If a member wishes to intervene on a point of order that has been raised by another member, the “Raise Hand” function should be used. This will signal to the chair your interest to speak. In order to do so, click on “Participants” at the bottom of the screen to the left of the language globe, and when the list pops up, you will see next to your name that you can click “Raise Hand”.

When speaking, please speak slowly and clearly. When you are not speaking, your mic should be on mute.

The use of headsets is strongly encouraged. If you have earbuds with a microphone, please hold the microphone near your mouth when you are speaking to boost the sound quality for our interpreters.

Should any technical challenges arise, for example in relation to interpretation, or if you're accidentally disconnected, please advise the chair or clerk immediately, and the technical team will work to resolve the issue. Please note that we may need to suspend during these times as we must ensure that all members are able to participate fully.

Before we get started, would everyone click on their screen in the top right-hand corner and ensure that you are on “Gallery View”. With this view, you should be able to see all the participants in a grid view. That will ensure all video participants can see one another.

During this meeting, we'll follow the same rules as usually apply to opening statements and the rounds for questioning of witnesses during our regular meetings. Each witness will have up to five minutes for an opening statement, followed by the usual round of questioning from our members.

With that, it is time to welcome the witnesses for our first panel.

As an independent witness, we have Jean Paul Gladu.

From the First Nations Financial Management Board, we have Harold Calla, executive chair.

From the First Nations Tax Commission, we have Manny Jules, chief commissioner.

From the Inuit Business Council, we have Kirt Ejesiak, representative.

Mr. Gladu, welcome. You have five minutes to begin your opening remarks. Please go ahead.

[Jean Paul Gladu, As an Individual]

Thank you so much.

Bonjour, everybody.

Thank you to the chair and all the distinguished committee members for inviting me to address you today.

It's not in my script, but a big hello to my friends Manny and Harold. It's great to see you.

I'm speaking to you from the traditional territory of the Mississaugas of the Credit, as well as the Haudenosaunee people. I, myself, am Anishinabe from the Thunder Bay region, Sand Point First Nation. As mentioned, I'm in the process of launching Mokwateh, which is my consulting firm. Mokwateh is my Anishinabe name, which means “bear heart”.

As COVID-19 continues to have many impacts around the globe, I am personally witnessing the business impact. I resigned as the president and CEO of the Canadian Council for Aboriginal Business to head to Fort McMurray to take on the role of CEO at the Bouchier Group, which at the time was one of Canada's largest private sector first nations companies. It was over 1,000-staff strong, of which 43% were indigenous. In March, the company, in response to the current economic climate, was required to reduce to nearly half its workforce, including senior executives. The Bouchier Group also reduced its business services from three to two.

The reason I share this story with you is that there are numerous indigenous businesses of significant scale and capacity that depend on the oil and gas sector in Alberta, British Columbia and Saskatchewan that have also been significantly impacted. Thousands of indigenous people have been laid off, unfortunately. However, there is hope, hope to bring some of those impacted workers back to the field, working for their community economic development corporations and other indigenous companies.

The Government of Canada recently transferred $1 billion in grants under the site rehabilitation program. Unfortunately, there was no mention of targeting some of those resources to the highly capable indigenous companies, unless, of course, the wells fall within a reserve, but I understand that's a small fraction of the work to be done. We can and must do better.

One of my proudest moments when I was at the helm of the CCAB was all the research and advocacy work that we did in procurement and program development to help support the government's commitment of a 5% indigenous business target within the federal supply chain. I know that the new CEO, Tabatha, and her team are still working hard on this file.

My friends, here is the “can and must do better” part.

When it comes to the $1-billion transfer, this is simply a missed opportunity for the federal government to add to the bottom line of its own 5% target. The Alberta and federal governments must circle around on the distribution of these resources to ensure that as many indigenous people as possible can get back to work. A minimum target of a 5% spend in the oilfield rehabilitation program—better known as the orphan wells—must be set. It's not only the right thing to do, it also just makes business sense.

Shifting gears, I would like to commend the current commitment to the National Aboriginal Capital Corporations Association to support its network of aboriginal financial institutions, which, of course, will ultimately support our indigenous entrepreneurs. This was overdue. As I have described, there is another echelon of first nations, Métis and Inuit businesses with larger balance sheets that could effectively use a larger fund to support them through these difficult times to help ensure that they emerge ready to continue contributing to our economy.

My friends, there is so much uncertainty when it comes to infrastructure projects in this country, particularly linear projects. All I have to say is Wet'suwet'en. I believe the federal government has an important role in empowering an indigenous economy through the establishment of an indigenous infrastructure fund. There are numerous examples in this country where indigenous economic development corporations have raised hundreds of millions of dollars on their own to become equity partners in major projects. A federal backstop similar to Alberta's indigenous opportunities fund would do much for the economy and, just as importantly, the certainty of our country.

Meegwetch.

[The Chair, Liberal, Bob Bratina]

Thanks very much, Mr. Gladu. You were well on time. I appreciate that.

Now I'd like to welcome, from the First Nations Financial Management Board, the executive chair, Harold Calla.

Please go ahead for five minutes.

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

Thank you for the opportunity.

First of all, I want to thank all of you for your efforts during this crisis. The COVID-19 pandemic is a worldwide challenge that is going to create something we define as the “new normal”. The roles of government, the private sector and international relationships, both at a political level and an economic level, are under a microscope.

Let us take this opportunity to recognize that this is an opportunity for Canada as a federation to reinvent itself, to move beyond the status quo and create a more inclusive, stable and representative society, a society that recognizes that a pandemic has existed in our communities since contact and not just with the COVID-19 crisis, a society that recognizes this pandemic existed and will not end until there are systemic changes in our relationship with Canada.

We are here today to discuss how we can support the recovery from the effects of COVID-19 while moving forward with a plan to bring life to UNDRIP. I hope we come to understand how linked these two matters are.

I will remind you that the Fiscal Management Act was passed in 2005, with all-party support, during a time when Canada had a minority government. It is designed as optional legislation, with indigenous governments declaring their interest to participate. The optional approach, I believe, does respond to the spirit and intent of UNDRIP. We agreed at the time the legislation was passed that it was time not only to focus on social issues, but also to focus on indigenous economic inclusion and recovery.

In some of the materials we have provided today—and some that we unfortunately couldn't get translated but will send to you—you'll find a letter that was sent by the First Nations Tax Commission, the First Nations Finance Authority and the Financial Management Board to the ministers of Finance, Indigenous Services and Crown-Indigenous Relations. It lays out a series of opportunities for Canada to consider that will not only respond to indigenous community COVID-19 needs, but also see our communities contribute to the overall recovery efforts.

The Financial Management Board has recently undertaken some analysis of the overall economic activity that shows what our communities currently contribute to Canada's gross national product. You have been provided with this analysis in French and English. For the 75 communities that are clients of the FMA, which we picked at random, you may be surprised to learn that the contribution annually is in the billions.

It is always best when we consider decisions where accurate data is available. We hope that our suggestion that a first nations statistical institute be established under the FMA, as it once was, is accepted.

There is an overwhelming infrastructure deficit in our communities. This deficit has not been and will not be addressed under the current government policy and approaches. We are proposing the creation of an optional first nations infrastructure institute that can support communities in the design, development, financing and maintenance of infrastructure. We propose a model that includes public-private partnerships that can design, build, operate and create economies of scale through aggregation at a regional level.

Over the last 20 years, I have observed that governments like to invest in infrastructure as a vehicle to support economic recovery. Indigenous communities could benefit from being included in these initiatives.

You have also been provided with a paper, in English, from B.C. first nations on what they see as a foundational building block to a new fiscal relationship. The cornerstone of this is increasing the fiscal powers available to become more self-reliant and to be able to address their own community needs.

Communities that have opted into the FMA are already doing some of this, but we need a seat at the fiscal table with Canada and the provinces. We have demonstrated, through the Fiscal Management Act framework, that we have the capacity to support communities and effectively manage increased fiscal powers. Those communities are using these to gain access to capital markets and secure private investment in our communities to meet the challenges we are facing as a result of the pandemic, including COVID-19.

We need to support building capacity in our indigenous governments, and FMB can help with financial administrative governance through our financial management system certification. This system was developed by the Financial Management Board, which aligned its approach with the international control framework known as COSO, a framework that was established after the economic and capital markets collapsed in 2008.

We also believe that an optional shared services platform, as proposed by FMB, would support capacity and create economies of scale that would reduce the cost of and to government of doing business. These investments would support economic recovery and reduce risks, and this would benefit all Canadians.

Canada is using its fiscal capacity during the COVID-19 pandemic to support Canada and Canadians and making enormous investments not seen in my lifetime. Canada did something similar in 2008. It worked then, and it's going to work again.

Let us be sure that when history looks back at how we responded to this crisis, history will see that indigenous people and their governments were not left behind. We can and should continue to move forward with rights recognition and reconciliation, and allow these initiatives to contribute to the recovery that we are all looking for.

Thank you.

[The Chair, Liberal, Bob Bratina]

Thank you.

Madam Clerk, we're having a technical issue. I'm not understanding how it affects the meeting. Can you please explain?

[The Clerk of the Committee, Ms. Evelyn Lukyniuk]

It has been resolved. The phone lines were reversed. Everything is good now.

[The Chair, Liberal, Bob Bratina]

Good. We'll carry on.

From the First Nations Tax Commission, we have the chief commissioner, Mr. Manny Jules.

Welcome. Please go ahead for five minutes.

[C.T., Manny) Jules (Chief Commissioner, First Nations Tax Commission]

Thank you, Mr. Chair.

Good morning. My name is Manny Jules, chief commissioner of the First Nations Tax Commission, one of three institutions created by the First Nations Fiscal Management Act. I was also chief of the Kamloops Indian Band in British Columbia from 1984 to 2000.

Thank you for this opportunity to address the Standing Committee on Indigenous and Northern Affairs as part of your study of the government’s response to the COVID-19 pandemic. Today I wish to discuss our proposals to help indigenous economies recover and emerge stronger out of the COVID-19 pandemic.

The history of indigenous peoples and pandemics has not been good. They have been used as opportunities to reduce our place in Canada and the national economy. My presentation would not be taking place were it not for past pandemics. From first contact to the 1862 epidemic in British Columbia, smallpox created the opportunity for colonization and the creation of Canada. This soon reduced our status to dependants governed by the Indian Act and the Department of Indian Affairs. It provided the opportunity to legislate us out of the federation and the economy, because it was thought that smallpox would ultimately eliminate indigenous peoples.

Despite these efforts, we were resilient. Secwepemc leaders presented a proposal to then prime minister Sir Wilfrid Laurier in 1910 with many of the same elements I am presenting today. As my ancestors said then, we want to be partners in this land. We want to be like brothers and sisters. We will make each other great and good. In other words, give us the same opportunities as other Canadians and we will contribute to the strength and growth of this federation.

As it has been for many indigenous leaders, renewing our place in the federation and economy has been my life’s work. This is why we built the First Nations Fiscal Management Act. As the most successful first nation-led legislation, today there are 300 first nations using the FMA.

Their economies and revenues were growing. They were building more economic infrastructure. Their credit ratings were rising. It was a model to bring us back into the economy and then federation. Then COVID-19 happened—but lessons were learned from previous pandemics, and this time we were ready.

On March 24 the FMA institutions wrote to the federal government warning of the pending public health, economic and fiscal calamity facing our communities and governments. On April 9 we sent another letter, this time to propose a two-part strategy: first, immediately help impacted first nations replace forgone fiscal revenues so they can maintain services during the emergency phase of the pandemic; and second, implement an indigenous economic recovery strategy using the FMA to enhance the Canadian economic recovery strategy.

As a short-term measure, we proposed that a first nations tax deferral loan program be established and that first nation debenture payments for this year be made by the federal government. This would help communities replace lost revenues so that they can better meet public health requirements.

We also presented a four-part indigenous economic recovery strategy: expand the First Nations Fiscal Management Act to include the First Nations Infrastructure Institute, which will certify shovel-ready economic infrastructure projects much faster; monetize existing federal infrastructure transfers so that more infrastructure can be built sooner; expand indigenous fiscal powers to include sales, resource, tobacco, cannabis, excise and income taxes to support greater resilience; and expand the mandates of the FMA institutions so they can provide more statistics, services, support and capacity to all interested indigenous governments and organizations.

This strategy will provide the foundation for a stronger indigenous investment climate. It provides a framework so that indigenous communities can have the same opportunities to participate in the recovery strategy as other Canadians. We have been working for the past two months with the federal government on this strategy and are hopeful that the necessary legislative changes we have proposed are accepted and presented to Parliament this fall.

We hope that this committee will continue to support our work and ensure that there are no delays.

Thank you very much.

[The Chair, Liberal, Bob Bratina]

Mr. Jules, thank you so much. You were right on time.

We'll move to our next speaker, Kirt Ejesiak, a representative from the Inuit Business Council.

Please go ahead for five minutes.

[Kirt Ejesiak, Representative, Inuit Business Council]

Good morning, Mr. Chairman. Thank you for allowing us the opportunity to speak.

My name is Kirt Ejesiak. I'm with the Inuit Business Council of Nunavut. My background is in public policy. I've gone to the Kennedy School at Harvard. I've worked as a chief of staff for the Government of Nunavut at the premier's office. I've worked also at the local level with small organizations to help build capacity. I've run a business for 25 years. My role really is to be the interim director of the new organization, the Inuit Business Council, to address some of the shortfalls in providing assistance to Inuit businesses.

I'm here today to speak about some of the challenges we've seen and some of the issues that have come up during the COVID crisis: namely, the programs that exist for Canadians, many Inuit businesses are not eligible to receive. One example is the Canada emergency business account that the government has set up to help businesses. These programs unfortunately are not available to many small Inuit businesses.

What we request is consideration of a northern CEBA program, which would allow the same opportunities for Inuit business owners to access a line of credit that is interest-free until 2021, but we request that the lines of credit be increased to $250,000, really to address some of the unique challenges that we have in the Arctic. What I mean by that is we often have to purchase goods and ship them in the summer season to allow for a year's worth of goods to be sold. We have to take advantage of the short summer season. In essence, we're trying to purchase all our goods for the entire year, hence the request for a large program such as a northern CEBA.

Second, we encourage governments across the north to purchase goods and services from Inuit-owned businesses. I think the federal government has been very responsive. We commend it for making changes to programs, but we encourage the government to spend locally as much as it can. The current procurement system is not really conducive to this type of crisis. It favours large, long-established companies from outside the north. We request that the government look at providing a unique COVID response to procure services locally.

Third, I'm speaking today really as a small business owner. We're not a grand organization. It's really small business owners who have banded together to address our specific needs. I've been involved in national organizations for a long time, but I think what's lacking is the supports for small organizations that want to be the voice for, in our case, small Inuit businesses. We would request that the committee recommend support for organizations such as ours, specifically organizations that would allow a seat at the table when crises happen, when discussions are happening related to procurement and related to large megaprojects in our indigenous communities.

To be specific, for us, we would request funding. I would say $1 million is really our initial ask, if the committee were to recommend support as part of the COVID response. It's important that our voices are heard, and we need to foster a way for organizations such as ours that come together. We're really an ad hoc group and we want to make sure that our voices are heard during the COVID pandemic and other crises that happen in our communities.

In closing, Mr. Chairman, we appreciate the opportunity to speak, and we hope this dialogue will continue as we get through COVID.

Thank you.

[The Chair, Liberal, Bob Bratina]

Thank you very much, Mr. Ejesiak.

Now we go to six-minute rounds of questioning.

On my first panel of questioners, I have Mr. Schmale, Mr. van Koeverden, Ms. Bérubé and Ms. Gazan.

Jamie Schmale, you have six minutes. Please go ahead.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Thank you, Chair.

Thank you, witnesses, for your testimony. It's greatly appreciated. I might start with Mr. Calla if I could, quickly.

Mr. Calla, what is the value of the economic activity created by the 75 communities included in your analysis?

[Harold Calla]

The value is in the billions. What we have done is we have taken the revenue streams that have been presented in financial statements. The Financial Management Board receives five years of financial statements from about 280 clients across the country. What we have begun to do is an analysis of those, because I don't think this information is widely known by anybody: What is the value of the economic activity in first nation communities and how would you measure that? When you get to the point that it's a billion dollars a year and you look at how you monetize that and ask what is the impact, that's really what our intention is.

We hope that in the future we will be able to do all 300 communities that we have financial information for. It really points to the need for a statistics institution to be able to provide this kind of data and information. We were quite surprised, in the 75 communities that we picked at random, by how big it was, and I don't think that many of us really understood that and understood that the first nation economy plays a lot of value in the gross national product of Canada and surrounding regional economies.

It's in the billions, Mr. Schmale.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Oh, I can imagine. Will you be doing further analysis and data collection? If the answer is yes, when once completed, would you be able to submit those results to this committee?

[Harold Calla]

We are currently undertaking for all of the clients we have now a full analysis of what they're doing. I expect it's going to take about six weeks. When we're finished, we will produce a report similar to the one you received today that would include everybody, so yes, we will.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Mr. Calla, what proposals have you suggested that Canada offer to indigenous governments and businesses to combat the effect of COVID-19? Has there been a response from the government?

[Harold Calla]

I think what we're looking for is a recognition that indigenous governments are probably more at risk than others. They need to be able to sustain themselves and to find that they're not so burdened at the end of this that they can't continue to exist, so support for maintaining their operations I think is critical. The other thing we've looked for is recognition of own-source revenue as it has contributed to indigenous governments to support their programs and services.

I think these are significant issues that need to be dealt with and need to be considered. The challenge we've seen at the moment, and from many of our clients who have spoken to us, is that many of the programs are outside of.... They're not able to access them, at least immediately, and it takes a considerable effort to get Canada to review its approach and to include first nation communities. This needs to be considered right out of the hopper.

Manny has spoken about the need for tax relief. We have shovel-ready projects for infrastructure. These are the kinds of things that involve a lot of money, but more importantly, I think, we need to be in a position where we continue to build the capacity in first nation communities and to put more communities in a position where they can access private capital to meet their needs.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

Maybe I will go to Mr. Jules.

Chair, before I do, how much time do I have left?

[The Chair, Liberal, Bob Bratina]

You have three minutes. No, I'm sorry. You have two minutes.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

I liked the three minutes answer.

Mr. Jules, why hasn't the First Nations Tax Commission's proposed tax deferral loan program been announced by the federal government? I know that you wrote a letter on that to the minister.

[C.T. (Manny) Jules]

Well, we don't know. We've done our work. We've been waiting patiently for a response. There's been a lot of concern expressed to us from a lot of first nations right across the country.

As you know, Jamie, tax money goes to help provide for public health services. It offsets expenditures that the federal government really makes, so it's critically important that we get an answer, and very soon.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

What recommendations would you like the House of Commons Standing Committee on Indigenous and Northern Affairs to make to help first nations governments recover from COVID-19?

[C.T. (Manny) Jules]

In a nutshell, I believe we need increased fiscal powers. Right now we're completely dependent on the federal government. Ninety per cent of all of the revenues come from the federal government and that has to ultimately change if we're to be able to look after ourselves. That's something our ancestors talked about in 1910, and so if we don't have greater tax powers....

You can see that unfolding on a daily basis with the Prime Minister's daily announcements. All of that is a result of the fact that the federal government has a tax rating, provincial governments and municipal governments have a tax rating, but first nations by and large don't. If that doesn't fundamentally change, we will find ourselves continuing to be completely dependent on the federal government and not being able to prepare ourselves for the next pandemic that ultimately will happen.

[Jamie Schmale, Conservative, Haliburton—Kawartha Lakes—Brock, ON]

You want more local control. I guess that also leads to more resilience for these indigenous communities.

[The Chair, Liberal, Bob Bratina]

Thank you. We're right at time. Thank you so much.

We will go to Mr. van Koeverden now for six minutes.