Indigenous and Northern Affairs Committee on Feb. 11th, 2022

[Lori Idlout, NDP, Nunavut, NU]

[Member spoke in Inuktitut, interpreted as follows:]

Thank you.

I will continue to ask Northern Affairs.

In indigenous and Inuit communities, we rely a lot on diesel fuel that damages the environment. The cost of everything is going up while the cost of living is going up and up. I will ask the minister: How are you... Qikiqtaaluk Corporation or Kivalliq Inuit Association when they're working on clean energy. How are you assisting them?

[English]

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

I'm sorry, was that a question for me? I had trouble hearing the translator because it was very low.

[Lori Idlout, NDP, Nunavut, NU]

Just to save on time, I'll just ask it in English.

Indigenous and northern communities' reliance on diesel fuels brings poverty and environmental degradation. Diesel prices continue to rise to the effect of increasing the cost of basic needs.

To what extent has your department engaged indigenous businesses and service providers like Qikiqtaaluk Corporation or Kivalliq Inuit Association's Kivalliq hydro link project?

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

That's a great question. I can tell you that it's in our government mandate to be net zero by 2050. That means we have to get northern communities off diesel. I'm actively engaged in promoting green energy in the north, and we're directly working through CanNorth, through the Infrastructure Bank and through other departments for the Kivalliq hydro-fibre project that would bring hydro and fibre up to the Kivalliq region from Manitoba.

We've invested tens of millions of dollars to work with the Kivalliq corporation, which is Inuit-owned and -led. There's much work to do, but we're committed to the partnership.

[The Chair, Liberal, Marc Garneau]

Thank you very much. That takes up the time.

There is a bit of a problem here with the translation.

Ms. Idlout, your voice and the voice of the translator at the same level makes it hard to understand. Perhaps you may be on the wrong channel. I'm not sure, but we need to look at that. It's hard to hear the translator.

Thank you very much, Ministers, for your presence today. That brings us to the end of our first panel. We appreciate your presence today.

Madam Clerk, should we suspend, or are we ready to move right away into the second panel?

[The Clerk of the Committee, Ms. Vanessa Davies]

We could suspend. We have two of the three panellists ready to go. We have one panellist who's having a little bit of trouble connecting, so if we could suspend for a few minutes, that would be great.

[The Chair, Liberal, Marc Garneau]

Okay, we'll suspend for a couple of minutes and let you know when everybody's online and we can get going.

Thank you.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Madam Clerk.

We'll proceed with panel number two.

Our first witness will be Adam Jourdain from the Corporation développement économique Nikanik.

Mr. Jourdain, you have the floor for five minutes.

[Adam Jourdain, Deputy Executive Director, Corporation développement économique Nikanik]

[Witness speaks in Innu]

[French]

Good afternoon, Mr. Chair, committee members and participants.

First, I want to say that I'm speaking to you from the community of Wemotaci on the ancestral territory of Nitaskinan, whose name means “our land,” which is the territory of the Atikamekw nation. I'm Innu from the community of Uashat mak Mani‑Utenam.

I'm delighted to be joining you today to discuss a topic close to my heart: indigenous economic development. I'm particularly interested in economic development. I quickly realized, during my career, that it's the main tool available to indigenous communities to ensure our emancipation and improve our living conditions and the psychosocial situation of our members. Unfortunately, while the concept of economic development may seem simple and applicable to all, clearly, for indigenous communities, there's still a long way to go. For the next while, I'll focus on the topic of this meeting, which is the barriers to indigenous economic development. That said, I want to start by showing that economic development is possible in the communities.

In 2014, when I arrived in Wemotaci, an Atikamekw community of 2,000 people, to take up the position of executive director of the Corporation développement économique Nikanik, the situation was bleak and we were in a deep hole. For example, there had been no gas in the community for over eight months. The residents had to get their gas in La Tuque, which was 5, 10 or 15 kilometres away. For the community as a whole—which had no development plan, strategy or goals—the annual project amount was about $250,000 and the development budget of $40,000 barely covered my salary. Limited partnerships were in trouble, unemployment was very high and there were fewer than 10 private businesses.

It took the election of a new council with a clear vision for economic development to start the wheels of progress and to launch new projects that mainly addressed the basic needs of the community. We first installed fibre optics to bring us out of isolation, refurbished the gas station to ensure gas supply, and built a business centre for our entrepreneurs. Most importantly, we developed and implemented a realistic recovery plan with clear and achievable goals.

As a result of this plan, I'm proud to say that we turned things around and helped improve the living conditions of a number of community members. Today, we're talking about $182 million in projects, a $300,000 economic development budget, an ever‑increasing number of stable jobs, 32 private entrepreneurs and a lower unemployment rate. The recovery plan has enabled us to dream big and prove to everyone that, despite lingering prejudices, we can carry out major projects.

Since today is mainly about the barriers encountered, I'll list a few things that, in my experience, hinder economic development in our communities.

The 10% capital investment needed for any new project in an indigenous context is a federal and provincial requirement that doesn't really take into account the financial capacity of communities and individuals. In terms of the search for funding from private institutions, with some exceptions, they're still wary of our organizations.

The administrative burden of the Quebec and Canadian governments is a real obstacle that compromises the fulfillment of many opportunities. Workforce training programs aren't adapted to the realities of potential workers. The remoteness of the communities leads to additional supply costs and inequalities among communities in terms of access to funding programs and allocated amounts. Natural resource development is inequitable.

My time is limited to five minutes, which is really too short.

I'd be happy to clarify each barrier during the round of questions.

I'll conclude by reminding you that we, the indigenous people, have a rich history of trade relations that goes back to well before the arrival of the first Europeans on our lands. We must reconnect with our past instincts and build what I'll call the “Indigenous People Inc.” of tomorrow. However, to do so, we must identify and overcome all the barriers that stand in our way. To this end, governments, financial institutions, civil society and all other entities involved must become facilitators and real partners. This is in everyone's interest.

Tshinashkumitin.

[The Chair, Liberal, Marc Garneau]

Thank you, Mr. Jourdain.

I'll now pass the microphone to Dawn Madahbee Leach.

You have five minutes, Ms. Leach.

[Dawn Madahbee Leach, Chairperson, National Indigenous Economic Development Board]

[Witness spoke in Ojibwa and provided the following text:]

Aanii - Biidaabin dezhnikaaz, jiijaak dodem, mnidoo mnising ndoonjibaa.

[English]

Meegwetch and thank you for allowing me to speak with you today on the barriers to indigenous economic development.

I'm the chair of the National Indigenous Economic Development Board, which is a ministerial-appointed, non-political organization mandated to provide advice to the federal government on issues related to indigenous economic development.

The board was established in 1990 and is comprised of first nations, Inuit and Métis business and community leaders from across Canada. To help inform your work, I invite you to check our board's website, which includes our series of national indigenous economic progress reports. Our next report will be released in 2023.

I also invite you to review our board's report entitled “Reconciliation: Growing Canada's Economy by $27.7 Billion”, as well as the 2019 OECD report on linking indigenous peoples to regional development, and the upcoming national indigenous economic strategy for Canada. If these reports were implemented, many of the economic barriers would be addressed.

All Canadians have become more aware of the truth of Canada's treatment of the indigenous peoples of this land. While the effects of colonialism have been devastating to the social, physical and mental health of our communities, one of its most nefarious objectives was the deliberate exclusion of indigenous peoples from sharing in the wealth of this country.

I cannot stress strongly enough that indigenous populations continue to face deeply rooted systemic and institutional barriers embedded in the Canadian legal, education, health, governmental and economic landscape.

For Canada to undo this damage, it must be understood that achieving reconciliation will not be possible without vibrant indigenous economies, characterized by economic self-sufficiency and socio-economic equality with the rest of Canada.

Studies show over and over again that when indigenous communities prosper, so do the regions around them. Look at the recent reports outlining the billions in annual indigenous contributions to the economies of Atlantic Canada, Manitoba and Alberta. If indigenous peoples had the same education, income and employment levels and business opportunities as those experienced across Canada, the GDP would increase by $30 billion to upwards of $100 billion annually.

In addition to the reports already mentioned, the NIEDB is recommending solutions that can pave the path to economic reconciliation.

One, ensure that the implementation plan for the UN Declaration on the Rights of Indigenous Peoples Act is co-developed with indigenous people.

Two, formally recognize our jurisdiction and the legal frameworks we are developing to control and participate in development in our territories.

Three, support the development of indigenous-led institutions to help build indigenous economic capacity, share leading practices, and deliver programs and services. Work is already under way for institutes for community infrastructure and indigenous business procurement.

Four, support the network of aboriginal financial institutions with capital to support the growth and expansion of the indigenous business sector, increase employment and provide housing mortgages, and help alleviate the backlog of indigenous housing that currently exists.

Five, increase funding for indigenous economic and business development to 10% of total federal spending on indigenous peoples, in part to make up for past funding shortfalls and to recognize the fact that each dollar spent on indigenous economic development leverages important community and social benefits and enhances regional economies across Canada.

Finally, implement the soon-to-be-released national indigenous economic strategy for Canada, which is a collaborative effort involving more than 20 national indigenous organizations. This strategy is our vision for economic reconciliation and is built upon the four strategic pathways of people, land, infrastructure and finance. The strategy includes calls to economic prosperity that speak to all levels of government, corporate Canada, small businesses, all institutions across the country and our own people.

In conclusion, you have an opportunity to help remove the impediments to indigenous economic inclusion. In addressing the solutions offered, your work requires addressing the disparities of the past, a change of mindset, the political will and real financial investment, which we know will benefit all of Canada.

Meegwetch. Thank you.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Ms. Madahbee Leach.

The third speaker will be Mr. Clint Davis, from the Nunasi Corporation.

Mr. Davis, you have five minutes.

[Clint Davis, President and Chief Executive Officer, Nunasi Corporation]

Thank you, Mr. Chair; and thank you, members of the committee.

It's a real honour to be here, and certainly in the presence of my dear friend Dawn Madahbee Leach as well, and Adam. You did a great job.

I'll begin by giving you a bit of a background on Nunasi Corporation and then I'll speak to three barriers I see that continue to impede the growth of indigenous business and communities.

In terms of personal background, I am Inuk, Inuit from Labrador and it's an honour for me to lead Nunasi Corporation, which is a storied Inuit corporation, over the last two years. Nunasi is a Nunavut Inuit birthright corporation, owned by two regional Inuit associations and one Inuit regional development corporation. This structure ultimately means that Nunasi is owned by all the individual beneficiaries under the Nunavut agreement, one of whom I think is actually on this committee right now.

It has a very interesting story. In fact, it's the oldest Inuit development corporation in the country. It was started in 1976 by the Inuit Tapirisat of Canada, now ITK, as a vehicle to ensure Inuit participation in the economic opportunity that was expected once Inuit land claims were resolved. It was involved in a variety of different business activities from various industries and some of these operating companies are still around today—in particular, Nunasi's investment in the medical accommodations that are located in Ottawa, Winnipeg, Edmonton and Yellowknife. These facilities, known as “largas”, provide culturally appropriate and safe lodging for those Nunavummiut who require medical treatment in southern hospitals.

Nunasi today is focused on health services, to build on the success of those largas; energy, which includes a focus around the development in renewable energy for Nunavut; infrastructure; transportation; and federal procurement.

Now I'll share with you some of my thoughts on some of the barriers. One is access to equity capital. Indigenous and Inuit business look very different today than even just 20 years ago. The rights that are crystallized in modern land claim agreements, along with the recognition of indigenous rights through successful court challenges, have led to greater engagement of indigenous communities in development activities on traditional lands.

Phrases such as “the duty to consult” and “free, prior and informed consent” have become common parlance in some industries. Impact benefit agreements have created significant value for indigenous communities, including training, development and employment, along with procurement. Some projects are providing opportunities for indigenous communities and development corporations to actually participate in the ownership of the project or a major asset.

Too often, communities just don't have the financial capital to stand shoulder to shoulder with their partner. Traditional lenders generally do not provide loans for equity, so the community will have to either pass on the opportunity or receive support from the partner or another source at a price that is often considered expensive. I think there's a real opportunity for federal Crown corporations and other institutions to provide this capital through a loan mechanism at a reasonable rate. This would enable the community to participate in the opportunity and benefit from the financial upside earlier in the process.

On social procurement, on January 31 of this year, the federal government announced that Nasittuq, a majority-owned Inuit company, was successful in winning the contract for the operation and maintenance of the north warning system. This contract is valued at nearly $600 million for seven years, and if the extensions are awarded, the contract has the potential to be $1.3 billion. The Inuit shareholders of Nasittuq include Nunasi, as well as the regional development corporations across Inuit Nunangat. It's great news for Nunasi and our colleagues, and frankly, it's an example of economic reconciliation at work.

The federal government has made a commitment of 5% to help expand indigenous business, which would represent over $1 billion annually. While the commitment has been made, I strongly encourage the government to move quickly towards implementation and to use the distinctions-based approach to ensure Inuit businesses benefit.

I would also recommend that the federal government consider creating incentives for federally regulated companies to develop robust procurement policies for the benefit of indigenous business. As we've seen in this country, the more successful procurement processes are normally in those companies in the resources sector, which really makes sense when you consider the nature of their business, operating in traditional territories.

However, these best practices should extend to other companies in different industries. Indigenous businesses are diverse, and if given the opportunity, they will meet the procurement needs of these companies.

The last thing, Mr. Chair, I want to comment on is the investment in infrastructure.

In October of 2020, Nunavut Tunngavik Incorporated in Nunavut released the “Nunavut Infrastructure Gap Report”. The report highlights deficits in such infrastructure areas as water, housing, broadband, reliable energy and so on.

The community needs these basic elements of infrastructure to create an environment that is conducive to entrepreneurialism and that can attract investment. There were no cost estimates associated with the Nunavut report, but the most recent funding announcement by the federal government of $4.3 billion indigenous community infrastructure fund, from which Inuit received over $500 million, is certainly a step in the right direction.

However, a 2016 report by the Canadian Council for Public-Private Partnerships identified an infrastructure deficit for first nations only at $30 billion. Seven years later one can only assume that this number is also higher.

Just recently the Inuit Tapiriit Kanatami has calculated that it would take over $3 billion to meet Inuit core housing needs.

So, when you take into account the numbers on housing alone and you add the infrastructure deficit with the first nations, it's easy to assume that the infrastructure deficit for indigenous communities in general is probably closer to $60 billion to $70 billion.

If we want to break down barriers for indigenous economic development, we need to ensure that communities have the conditions that will create a well-functioning economy, and that starts with infrastructure.

Thank you for your time today. I look forward to your questions.

Nakurmiik.

[The Chair, Liberal, Marc Garneau]

Thank you, Mr. Davis.

We'll now proceed with the first round of questions.

Mrs. Stubbs, you have six minutes.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair.

Let me just say what a pleasure it is to listen to this powerful and inspiring testimony from our witnesses.

I'm so glad that you have been able to give your time to us today.

I represent a rural riding in northeast Alberta, and I'm very proud to represent all of the constituents in Lakeland, including nine first nations and Métis communities, which I work with on a regular basis to try to figure out real, tangible ways that we can do things exactly like the things we are talking about today. Of course, it won't surprise you that nearly every community in my region, in that part of Alberta, has a long history of private sector proponent partnership, partnerships with academic institutions and all levels of government to responsibly develop the resources in that area, primarily oil and gas and heavy oil, and they are also the leading contractors and business owners certainly in the service supply area of the industry throughout the region.

I'm always looking forward to hearing testimony like yours as to how we can continue to advance on economic reconciliation. I am inspired by the communities that I represent. They create jobs not only for their own communities but for people all around their communities throughout the region and throughout the province.

I am seized with many of the challenges that you've talked about. These are, primarily, access to capital, capacity building in communities so that they can effectively participate in the regulatory process, and the necessity for the Crown to meet their obligations for two-way dynamic consultation with indigenous communities rather than just checking it off on a list instead of sending a decision-maker to the table, certainly as the last witness was talking about, to rapidly meet the basic infrastructure challenges that hold back indigenous communities.

Adam, I think you wanted to get into this a little bit more. Maybe I'll do a two-for-one and then each of you can address these questions in turn.

I would just love to give you the opportunity to expand in specifics on two fronts. One is recommendations to deal with the risk aversion of the Crown or the government, rolls upon rolls of red-tape barriers that can be reduced, and the other is more specific recommendations for access to capital.

[Adam Jourdain]

I'll first answer your second question.

Tools already exist. The First Nations Financial Management Act enables us to override the Indian Act, but only financially. In Wemotaci, we decided to adhere to this legislation, which enables us to obtain capital, but only through the First Nations Financial Authority. We then have access to cash flow that helps us develop certain projects, as a result of favourable interest rates. Our most recent interest rate was around 2.3%.

It should be noted that banking or financial institutions are still reluctant to give us funding, even though we've adhered to this legislation. We must always provide justification, which constitutes a barrier. However, we have excellent viable projects that meet the goals of our community.

It's very challenging if the interest rates are close to 7%, 8% or 9% for certain projects. It was already a major barrier to the development of communities, especially remote communities such as Wemotaci.

I hope that I've answered your question.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you.

I would invite the other witnesses to comment as well.

[Dawn Madahbee Leach]

I'd be happy to speak to your two questions as well.

It was really great to hear my good friend Harold Calla speak about the balance that has to be played between the government's fiduciary responsibility and the fact that there's a lot of risk aversion. One of the things that I feel can help to address that is the path to supporting the development of indigenous institutions. We need to be responsible for our own activity and our own actions.

I really feel strongly that the supports need to be there, as I mentioned in one of our recommendations, to support indigenous-led institutions and centres of excellence. I think those are really critical ways to help remove the issues around the government being worried about the risk of some of the decisions they make. I think our own people are prepared and we have the capacity now to address areas and make those decisions ourselves. I would strongly support that devolution of programs and services and the resources, the full amount of resources necessary, to support indigenous institutions.

I spoke about, and we heard earlier about, the idea of an indigenous infrastructure institute. I think that's really critical as well to addressing the areas of our needs.

In respect to access to capital, I think a couple of things need to be understood. We have a really great success story in Canada that other countries don't have, and that's the aboriginal financial institutions. Those institutions should be supported. No other country has the types of institutions that we have, but they're limited in their capacity. Most of them can provide loans of only up to $300,000 for one project. Well, one piece of equipment costs that. You can't even build a decent building for that amount of money anymore.

So additional capital is really important. We know the success of these aboriginal financial institutions, which have been able to invest $3.3 billion into the Canadian economy through investing in indigenous businesses and helping with the start-up of new indigenous businesses. We have capacity. We'll need that to address the whole procurement issue and to address the contracts we're talking about to reach that 5% procurement target. We need more indigenous businesses and to help build them up so they can compete effectively for a lot of those contracts.

Plus, we need—

[The Chair, Liberal, Marc Garneau]

Thank you. We have to go to the next speaker.

[Dawn Madahbee Leach]

Okay. Sorry.

[The Chair, Liberal, Marc Garneau]

No problem. Thank you very much.

Next we have Mr. Weiler.

You have six minutes.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Mr. Chair.

I'd like to thank all the witnesses for joining our committee meeting today and just for the fascinating testimony already.

First, Ms. Madahbee Leach, just building on what you were mentioning before, one of the solutions you identified with regard to the economic barriers currently in place right now is to formally recognize indigenous jurisdiction and legal frameworks. I was hoping you could elaborate a little bit more on this point, in particular on the importance of self-government agreements and what type of change that would drive for economic reconciliation.

[Dawn Madahbee Leach]

I can give you one really good example in my own area. The first nations have collaborated to develop a legal framework on aquaculture in our region. For example, we have indigenous-owned aquaculture operations, but we also have non-indigenous aquaculture operations. Previously, before we had this framework, there was no reporting or monitoring provided to the indigenous communities, who rely on the water resource around us. By having these legal frameworks in place, we were actually benefiting from the social licence that we offered to those operations in our area.

One of the things this framework will do is to have the first nations that are impacted in any developments, including our own aquaculture businesses, issue the licences. We've been working very closely with the first nations, as well as the Province of Ontario and Fisheries and Oceans Canada, to have this legal framework recognized. I'll tell you that it's very complementary to existing legal requirements at the provincial and federal levels. It's really helping to include indigenous people in activating our jurisdiction and our authorities in this area.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

That's a very fascinating point.

One of the other items you mentioned is co-developing the action plan on implementing UNDRIP. I'm curious how you see those two aspects kind of fitting together, where you can have multiple orders of government being able to partner on issues just like that.

[Dawn Madahbee Leach]

I think it's a co-operative approach that we're looking at. When we look at co-developing the implementation plan for the United Nations Declaration on the Rights of Indigenous Peoples Act, it's really important that we be involved in that.

There are 13 references to economic development in the declaration, but there's nothing really specific on it, so the national indigenous organizations have talked with each other about how we can activate and unlock the potential of indigenous economic development by helping with the co-development and making sure that we're included in the Canadian economy at the level that we should be. I think that's really important and critical to moving forward.

We have a lot to offer, and I think the national indigenous economic strategy that I spoke about will be helpful to that exercise.