Indigenous and Northern Affairs Committee on June 5th, 2020

[C.T. (Manny) Jules]

What happens when you have tax jurisdiction.... You can see it clearly with the federal government's announcements on a daily basis. They can do that because they have the best credit rating in the country. That's why municipal governments are going to the federal government asking for programs. That's why small businesses are going to the federal government asking for programs, and indeed the provincial governments.

This goes right to the heart of the fiscal makeup of Canada. One of the problems we have as first nations is that we're not part of the fiscal makeup; we're part of the dependancy that's been brewing in our communities as a result of colonization.

When we talk about a credit rating, we've demonstrated through the First Nations Finance Authority that we can go to the international bond market using our own tax credits, using our own business acumen to get the bonds and debentures. We've been very successful at that. We've received over $900 million since 2007.

There are successes, but the basis of those successes has been jurisdiction.

[Jaime Battiste, Liberal, Sydney—Victoria, NS]

Mr. Calla, I see you have your hand up. Do you want to add to that?

[Harold Calla]

Yes, I do. Thank you.

I think the fundamental challenge we face in our relationship with Canada is that we're seen as a program; we're not seen as a government. We're seen as part of a 12-year cash flow cycle. We need to get to the point where not only the departments that report to you, but Finance and Treasury Board and the PMO start to recognize us as governments that require jurisdiction, that require a seat at the fiscal table, so that we can leverage—as we've proven we can do through the First Nations Finance Authority—those secure revenue streams to support our own needs. If—

[The Chair, Liberal, Bob Bratina]

We're at time right there. Thank you.

I apologize, Ms. Gaudreau; you have the floor for two and a half minutes.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Excellent.

Mr. Jules, you spoke briefly about the four distinct phases of the economic recovery. I'd like you to go over them again.

We'll proceed quickly, and I'd like to hear what each of the witnesses has to say about these four stages.

Let's start with you, Mr. Jules.

[C.T. (Manny) Jules]

One of the things we need, fundamentally, at the ask, is jurisdiction. In order to pursue that jurisdiction, we need a legislative mandate from the federal government. In that way we would be able to begin to look after ourselves. That's the basic problem that we have in our communities: We're completely dependent on the federal government. We're completely dependent on the provincial governments for their infrastructure, i.e., hospitals.

In order to change that, what the FMA institutions are asking for is greater autonomy, greater jurisdiction through the First Nations Fiscal Management Act.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

You spoke about transfers and broadening the reach. You also referred to other parts of your recovery plan. Can you tell us a bit more?

[C.T. (Manny) Jules]

Yes. I talked about expanding the First Nations Fiscal Management Act to include the infrastructure institute. That's critically important because if we can't build stuff on our own, we're going to be completely dependent on somebody else. Right now, with the Department of Indian Affairs, when they build infrastructure, you end up caught in negotiation for 10 years and you build one water system. With a first nations infrastructure institute, instead of building one water system for potable water in one community, we could be looking at building a hundred. With health care, we could be building a hundred facilities as opposed to one-offs in each of our communities.

When we're saying we want to monetize federal transfers, right now there's no way to monetize the federal transfers for capital projects on reserves. If the federal government monetizes, that means a greater number of resources that would be at first nations' and the federal government's disposal to build infrastructure, not only for our community needs but also business-ready infrastructure, which is critically important. We need to expand the fiscal powers so that we get the tax revenues that are being raised in our communities.

As an example, for the 109 first nation communities that are collecting about $70 million in real property tax, the federal and provincial governments are collecting $750 million more than the first nations. They're collecting taxes in terms of resource development, tobacco, cannabis, the excise tax, the income taxes, all of those are going right now to the federal and provincial governments. What we're saying is that, if there's a true fiscal relationship, we should be the jurisdiction to collect those resources.

[The Chair, Liberal, Bob Bratina]

Thank you very much. We're at time allotted.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Since we're out of time, may I ask the witnesses to nod if they agree with Mr. Jules' statements?

Gentlemen, do you agree?

[The Chair, Liberal, Bob Bratina]

There's one thumbs-up, two thumbs-up, and now you have three.

Ms. Gazan, please go ahead for two and a half minutes.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair.

I just want to start out by thanking Mr. Jules for his observations about the limitations that are contained in the Indian Act. I agree. I think this racist policy needs to be replaced with human rights.

How do you believe that the full adoption and implementation of the United Nations Declaration on the Rights of Indigenous Peoples would help assist indigenous businesses in the future, particularly should we experience future pandemics?

[C.T. (Manny) Jules]

And we will. History has demonstrated that. Even though as first nations we've lived through many pandemics, this is another one and we will face one in the future. If we're not ready, through having greater fiscal powers, we're going to be in the same situation.

How I interpret the United Nations Declaration on the Rights of Indigenous Peoples is that it gives us a way forward so that we can begin to legislate our way back into the federal and provincial economies, and therefore the national economy and global economy, to be able to take care of ourselves, our families, our elders, our youth, our children and the future generations.

[Leah Gazan, NDP, Winnipeg Centre, MB]

I believe Jean Paul would also like to comment.

Go ahead, Mr. Gladu.

[Jean Paul Gladu]

Thank you very much.

The other thing is that we can't ignore the power and influence of the private sector. When we talk about supply chains, etc., Canada could be looking at rewarding those good actors that are working with our indigenous businesses and communities. CCAB has the progressive aboriginals relations program and I know the team is working on PAR for government. If a company comes with those great practices to support indigenous partnership, that's the kind of company that should be awarded federal contracts, not the ones who don't.

[Leah Gazan, NDP, Winnipeg Centre, MB]

Thank you very much.

[The Chair, Liberal, Bob Bratina]

Mr. Ejesiak also had his hand up.

[Kirt Ejesiak]

Manny, the Inuit support UNDRIP 100%, and we echo those sentiments.

I completely agree with JP. I think it's important that our communities be given the opportunity to bid on some of the work that's happening in our communities. It just makes sense. I think that's where we ask the committee to recommend some of these major changes. It's going to take time, but I think we need to do it now.

[The Chair, Liberal, Bob Bratina]

Thank you very much.

Mr. Zimmer, it's your turn. I know there were some technical issues. Can you hear me?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Is the sound good now? [Technical difficulty—Editor]

[The Chair, Liberal, Bob Bratina]

Well, I'm going to let you start, but we may have to interrupt, because it would be a breach of parliamentary privilege if we weren't able to conduct a proper translation.

I'm going to have to intervene at this point.

Mr. Schmale, could you offer to substitute for Mr. Zimmer while we continue to work on his technical issue?

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

Thank you, Chair. I'll ask a few questions, if I could, until Mr. Zimmer gets better connected.

Mr. Calla, about 30 minutes ago you touched on how the status wasn't working. Each and every one of you has touched on it in some way. Let's talk more about the financial relationship with first nations communities to allow them to succeed as communities. Let's expand on that. We can open the floor and hear what people have to say.

[Harold Calla]

Thank you.

I'm an accountant by training, for those who don't know. I came back to my community in 1987 and realized that we were all about program management. We weren't dealing with anything else. We didn't have any capacity. We didn't have any revenue streams. We couldn't go to the bank and borrow money. We couldn't respond to our needs. I started to realize very quickly that after however many years of the Indian Act, the relationship with Canada was not getting better. The gap was widening.

I had come from the private sector, and I realized very quickly that government was never going to be the long-term solution and that we needed to be able to have access to re-engage in the development of an entrepreneurial class within our society of indigenous communities to put us in a position where we would start to generate revenues for ourselves.

I think we got sidelined with the Indian Act. We weren't allowed to evolve or emerge as a government or as people, so all of a sudden it's become such a huge problem and nobody knows what to do. We're constrained by this notion that it has to happen within a fiscal budget with the federal government. That has to change to a recognition that we have to have private sector investment. We have to create a fiscal capacity in first nations to be able to go to the investment community and secure investments so the things we need can be provided for in an orderly way at a time of need and paid for just like other orders of government do.

With the creation of the First Nations Fiscal Management Act, we now have the mechanisms to support capacity development in our communities through the First Nations Financial Management Board and financial management systems. We can manage the tax system through the First Nations Tax Commission and we can go to the capital markets through the financial authority once we have secure revenue streams. We're now using our own-source revenue in that process as well.

Therefore, the mechanism is there. It's proven itself. You heard from the First Nations Finance Authority not long ago. They're shortly going to be at the billion-dollar range of funds raised and they got a AA credit rating. We've proved that it works, so my question to you is, what's the problem?

Let's get on with it. Give us these revenue streams, get government out of the way and allow us to manage ourselves. That takes a philosophical change at the government level and at the bureaucratic level.

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

Okay, let's talk abut the off-ramp. Where do we get started? Is it in bits and pieces? Is this all at once? For those are on the status quo and are a little hesitant about taking that off-ramp, how do we do this?

[Harold Calla]

Mr. Chair, I think too often we find ourselves saying that unless we get all 633 first nations on side, we can't do anything. I think we have to recognize that we have to move forward with those who have capacity and are willing to engage in the development of the capacity to move forward.

What we have seen as a result of the activities since the First Nations Fiscal Management Act was passed is that as people see success around them of people who have engaged, they want to follow.

Soon you're going to see a documentary that's been produced by the Financial Management Board that lays out some of the challenges that we've faced historically and the successes that we've enjoyed as a result of the Fiscal Management Act. You're going to see examples of communities that have taken these tools and developed an independent self-reliance and found a way to get out of the social spiral they're in and educate their kids and give their kids an opportunity.

It comes from fiscal capacity and it comes from leadership having some hope that they can do the things they need to.

There have been some good things that have been done recently. Certainly, the move to 10-year grants was a good one. We need to move with legislative reform to the Fiscal Management Act, create a statistics institute, create an infrastructure institute and provide long-term funding from the federal government.

We're not going anywhere and the federal government is not going anywhere. It's silly for us not to engage in accessing the capital markets to respond to our needs, and doing it on an optional basis with those first nations that are ready. We cannot expect everybody to move in lockstep.