Indigenous and Northern Affairs Committee on May 29th, 2024

[Lori Idlout, NDP, Nunavut, NU]

I asked you about the external audit that will happen.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

Can I answer?

I wrote down what you said in your preamble. You said nutrition north is not alleviating poverty. I'm saying that to alleviate poverty, you need a societal effort from the federal government, provincial government, territorial government and municipal government, as well as the private sector. The private sector has a huge role to play.

That's all I'm saying. I'm not trying to be rude. I'm just trying to point out—

[Lori Idlout, NDP, Nunavut, NU]

Can you answer my questions about the external audit? When will that start?

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

First of all, the internal review has already started. Val Gideon has already mentioned that. We have external researchers who are already on it.

I think there are five external research projects that are looking at the subsidy, including Galloway's. She was on APTN and, I believe, The Fifth Estate did a report. I've spoken to her—

[Lori Idlout, NDP, Nunavut, NU]

You're not answering my question, so I'm going to interrupt you.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

I'm trying to answer your question.

[Lori Idlout, NDP, Nunavut, NU]

I don't have enough time to hear you rambling. Obviously, reconciliation is not important to you. You know, as an experienced minister—

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

That's not a fair statement, MP.

[Lori Idlout, NDP, Nunavut, NU]

—that we each have six minutes. When we ask you specific questions, you should be answering our specific questions.

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

That's not a fair comment you made.

[Lori Idlout, NDP, Nunavut, NU]

For example, I want to talk about TB. You committed to working with ITK in 2018 to eliminate TB in Inuit communities by 2030. Since that announcement, there have been three new outbreaks in Pond Inlet, Naujaat and Pangnirtung, yet your government has not announced new funding to make sure TB can be eliminated. With the clock ticking, ITK requested $131.6 million over seven years from budget 2024, but nothing came.

How do you plan to make sure this government helps eliminate TB in Inuit communities?

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

I'm working closely with ITK, Minister Hajdu and Minister Holland on alleviating tuberculosis by 2030. It was a commitment we made. We're working hard to keep that commitment, and that has not changed one per cent.

[The Chair, Liberal, Patrick Weiler]

Thank you, Ms. Idlout. That concludes our panel of questions.

I want to thank Minister Vandal for being back at committee—I understand it's been three times in the last three weeks—as well as the officials for being here to answer on the estimates.

Before we suspend this meeting for our next panel, we have some business to attend to, which is the votes on the estimates. I want to move to that, as long as folks are ready.

Shall the following votes, less the amount voted in interim supply, carry?

CANADIAN HIGH ARCTIC RESEARCH STATION

Vote 1—Program expenditures..........$33,006,666

(Vote 1 agreed to on division)

DEPARTMENT OF CROWN-INDIGENOUS RELATIONS AND NORTHERN AFFAIRS

Vote 1—Operating expenditures..........$1,972,347,839

Vote 5—Capital expenditures..........$75,000

Vote 10—Grants and contributions..........$8,908,436,755

Vote L15—Loans to Indigenous claimants...........$25,903,000

(Votes 1, 5, 10 and L15 agreed to on division)

DEPARTMENT OF INDIGENOUS SERVICES

Vote 1—Operating expenditures..........$2,583,434,729

Vote 5—Capital expenditures..........$6,385,586

Vote 10—Grants and contributions..........$18,337,731,120

(Votes 1, 5 and 10 agreed to on division)

Shall I report the votes on the main estimates to the House?

[Some hon. members]

On division.

[The Chair, Liberal, Patrick Weiler]

That settles it.

We are going to briefly suspend while we have our next panel of witnesses take their seats.

[The Chair, Liberal, Patrick Weiler]

I'd like to call this meeting back to order.

Welcome again to meeting number 110 of the House of Commons Standing Committee on Indigenous and Northern Affairs.

Pursuant to Standing Order 108(2) and the motion adopted on Wednesday, April 10, the committee is meeting to continue its study of tax revenues from businesses on first nations territories.

I would like to welcome our witnesses.

We have, on behalf of the First Nations Financial Management Board, we have Mr. Harold Calla, executive chair, joining by video conference. Representing the First Nations Infrastructure Institute, we have Allan Claxton, the development board chair. On behalf of the First Nations Tax Commission, we have Mr. Clarence “Manny” Jules, the chief commissioner; Mr. David Paul, deputy chief commissioner; and Chief Derek Epp, on behalf of his nation.

We will be giving each organization five minutes for their opening remarks.

We can start with the First Nations Financial Management Board.

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

Thank you for the opportunity to speak with the committee today—

[The Chair, Liberal, Patrick Weiler]

I'm sorry, Mr. Calla. We need to pause for one second.

You have my apologies, members and witnesses. We're going to have to suspend for a short moment to do the sound check.

[The Chair, Liberal, Patrick Weiler]

I will bring us back to order here.

[Harold Calla]

I would like to start by thanking you for this opportunity to speak today. This is a critical study, and I'm pleased that the committee is undertaking the work.

I'd like to start by asking a foundational question: Do you accept that Indian Act bands are governments within the federation of Canada? If you do, then, as governments, first nations are entitled to the same revenue-raising tools and powers that other orders of government have available to them as they provide services for their communities. This is a central element of UNDRIP: self-government.

First nations have already demonstrated that they generate greater and better outcomes in delivering programs and services to our communities when we exercise fiscal powers to raise revenues, rather than being funded through federal grants. The pay-as-you-go system that we are dependent on today is far removed from what any other level of government would accept. The status quo is holding indigenous people back from closing socio-economic gaps, reducing the cost of poverty and building economic success.

The 2003 Harvard project on American economic development looked at why some nations break free from poverty and others do not. They found that they do not build success on the basis of natural resources, education or even geographic location, but rather because they're able to exercise their rights to self-government within the capacity to govern themselves through strong institutions.

This is what the fiscal management act institutions provide. The financial management board supports nations to build their administrative, governance and financial management capacity to support their jurisdictions through the First Nations Tax Commission.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Chair, I must let you know that the sound cuts out during the French interpretation.

[The Chair, Liberal, Patrick Weiler]

Mr. Calla, we're going to have to briefly pause while we have this looked into.

Please continue.

[Harold Calla]

Okay. I'll start again.

Thank you for the opportunity to speak to the committee today. This is a critical study, and I am pleased that the committee is undertaking this work.

I will start by asking a foundational question: Does Canada accept that Indian Act bands are governments within the federation of Canada? If Canada does, then as governments, first nations are entitled to the same revenue-raising tools and powers that other orders of government have available to them as they provide services for their communities. This is the central element of UNDRIP: self-government and reconciliation.

First nations have already demonstrated they generate greater and better outcomes in delivering programs and services to our communities when we exercise fiscal powers to raise revenues rather than being funded through federal programs. The pay-as-you-go system that we are dependent on today is so far removed from what any other level of government would accept. The status quo is holding indigenous people back from closing socio-economic gaps, reducing the cost of poverty—

[The Chair, Liberal, Patrick Weiler]

Mr. Calla, I apologize but we're still having some issues here. I think we're going to have to reinvite you to come to committee. Hopefully, we can have it sorted out by then. I really appreciate your patience as we have gone through this.

We will be moving on to Mr. Allan Claxton, from the First Nations Infrastructure Institute.

[Allan Claxton, Development Board Chair, First Nations Infrastructure Institute]

First of all, I would like to thank you for having me here this evening. It's an honour to be here to make this presentation.

My name is Allan Claxton. I'm a member of the Tsawout First Nation. I was the chief of my community for 20 years and a councillor for approximately 10 years, so I spent a lot of my time serving my community.

Tsawout is located about 10 kilometres north of Victoria, beside a community known as Central Saanich. Recently I led the development of the First Nations Infrastructure Institute, also known as FNII, with chief commissioner Manny Jules and the First Nations Tax Commission, and a great technical team and development board. We are hoping it will be up and running soon as the demand is high for infrastructure in all first nations across this country.

I am honoured to be here today to speak in support of this motion. First nations fiscal powers are important to Tsawout and they are important to increase the potential value of FNII. We were the first community south of 60 to implement the first nations goods and services tax, or FNGST, in 2006. Our FNGST story is particularly relevant to this committee and to FNII.

I was the chief of my community at the turn of the century. As did many first nations, we lacked the resources to build the type of community health and recreation facilities that other Canadians take for granted. Our community strongly believes that health and success are strongly linked. For as long as I was chief, we wanted to provide recreational and team sport opportunities for all of our community but especially for the youth, the future of our community.

Since we didn't have the necessary resources for this type of major infrastructure upgrade, my good friend Manny suggested that we explore implementing the first nations goods and services tax. For 14 months we had family and community meetings, led by me and Manny, to discuss implementing the GST. These were not easy meetings, but for those who don't know how the GST works, here is a quick overview.

First, when a first nation passes an FNGST law, the GST ceases to apply on that first nation's lands. Second, the federal government cedes some of its GST room to first nations but not enough. I will get back to that point in a moment. Third, it applies to all people—members and non-members, status and non-status members—consuming goods and services on the participating first nation's lands.

As this committee knows well, convincing anyone to pay tax is not easy. It was important for us to show the benefits to the community and to earn their trust that we would follow through and deliver, and we did. We received community support and implemented the FNGST in 2006. The next year the federal government lowered the GST rate, which meant we received less GST revenue. Many of my members were furious at me. How dare I lower the GST rate without talking to them? Fortunately, I was able to survive the political anger that comes from lowering taxes.

We used our GST revenues for long-term financing, and in 2010 we finished our new health building, gymnasium and all-weather sports fields. They are a source of pride and improved health for our community, but we need to do more. We have to upgrade much of our infrastructure to support economic growth and public services in our community and the region. To start with, we need to fix the first nations GST revenue-sharing approach. This tax room should be fully ceded to first nations.

We estimate our gross annual GST collected from the sale of lands to be $5 million. If we apply the current revenue room-sharing formula, then the federal government keeps $1.5 million of this and our annual first nations GST revenues are $3.5 million.

I'm not sure what the federal government does with its revenues, but with this extra $1.5 million we could finance $20 million to build and improve regional waste-water treatment systems, we could upgrade our roads and buildings, or we could extend our infrastructure to support more investment. This would mean better environmental services in our community and potentially more regional economic growth, including badly needed housing starts.

My rhetorical question to this committee is simple: You have all supported the development of the First Nations Infrastructure Institute, for which we are grateful, but don't you think that with FNII and more fiscal powers first nations would be better able to close our massive infrastructure gap?

My answer to your motions is just as rhetorical.

Yes, we need to provide first nations excise tax powers for fuel, alcohol and tobacco. Yes, we need to add casino and ATM GST to the FACT tax—