Indigenous and Northern Affairs Committee on Feb. 15th, 2022

[The Chair, Liberal, Marc Garneau]

I call this meeting to order.

Welcome to meeting No. 6 of the Standing Committee on Indigenous and Northern Affairs.

Before we get started with our panel of witnesses, I want to apologize for our being late. We had to vote.

We're continuing to meet to study barriers to indigenous economic development. Today we have two panels. On the first panel, we have Darrell Beaulieu, CEO of Denendeh Investments Incorporated; Chris Googoo, CEO of Ulnooweg Development Group Inc.; and Grand Chief Jerry Daniels of the Southern Chiefs' Organization Inc.

In an hour, we will welcome our second panel of witnesses.

We welcome Thomas Benjoe, president and CEO of File Hills Qu'Appelle Developments; Andy Moorhouse, vice-president of economic development from the Makivik Corporation; and Carlana Lindeman, education program director for the Martin Family Initiative.

You all know the health measures to be taken during our meeting. I hope that you will all follow them.

We all—as you know by now; I don't have to repeat it—have a certain process for going through these meetings. Please raise your hand if you want to speak, and wait until I acknowledge you.

Madame Clerk, I understood this morning that we would not have Inuktitut translation today. Is that correct, or has that been rectified?

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

No, that's correct. We don't have Inuktitut translation this week.

[The Chair, Liberal, Marc Garneau]

Okay. We have English and French. You may use whichever one you wish. If there is a problem, please let me know as quickly as possible so we can address it.

Each organization will begin with a five-minute statement, and then we'll get into the first period of questions, which will be one six-minute question period for each of the parties. We'll then get into the second round.

Without further ado, I would like to invite Monsieur Darrell Beaulieu of Denendeh Investments Incorporated to take the floor. You have five minutes, sir.

[Darrell Beaulieu, Chief Executive Officer, Denendeh Investments Incorporated]

Thank you, Mr. Chair.

Thank you to the standing committee for inviting me to make a presentation.

I'm speaking to you today as the president and CEO of Denendeh Investments Incorporated, which is the business arm of the 27 first nations of the NWT, and as the spokesman for the NWT indigenous leaders economic coalition, which represents all the indigenous people in the NWT—Dene, Inuvialuit and Métis—who have come together to improve the economic conditions in our communities, looking at the overall well-being of the NWT.

I've been involved in economic development in the NWT for over 30 years, and I have seen first-hand the barriers to indigenous economic development. I would like to take this opportunity to provide some possible solutions.

Indigenous corporations and businesses in the NWT want to be major players in resource and infrastructure development. Existing funding programs have not been effective in stimulating the economic needs of the north. To make a difference and to be effective, capital for equity to leverage financing must be readily accessible and managed by existing indigenous economic institutions based in the north, thus creating partnerships with governments, indigenous business and private equity.

You need a stable, recurring revenue stream, accessible capital and a cash-flow mechanism for investment in indigenous economic development in the north rather than the existing proposal-based funding models that are not dependable and clearly do not provide for capacity and stability to take advantage of opportunities. Our experience is that opportunities that do come are mostly swept up by southern-based businesses that already have ready capital and take induced benefits and profits out of the territory, thus leaving a recurring vacuum in their wake.

Indigenous people in the NWT receive less funding than our southern counterparts for economic development, because our funding goes through CanNor—that's the Canadian Northern Economic Development Agency—and the Government of Northwest Territories. Furthermore, the north is not always eligible for funding that is available through national indigenous organizations.

Most federal and territorial programs will not fund salaries but will provide funding to hire consultants and contractors. This does not contribute to local capacity; it results in community economic leakage.

The federal transfer payments account for about 85% of total Government of Northwest Territories revenues. To access this territorial funding for economic development, indigenous governments, their corporations and businesses must apply to the GNWT. Their projects and initiatives may not be supported if they do not fall under the GNWT mandate, even though they reflect indigenous priorities.

Currently the NWT experiences a critical lack of energy, communications and transportation infrastructure. This contributes to the high cost of living. Without this strategic, wealth-generating infrastructure, valuable northern resources are stranded.

Indigenous roles in the northern economy are critical in terms of benefits to the north, investor confidence, regulatory stability and implementation of the recommendations of the National Indigenous Economic Development Board, the Royal Commission on Aboriginal Peoples the Truth and Reconciliation Commission and the current economic reconciliation process discussions.

The development of corridors for the national, provincial and territorial economies should be indigenous-driven, -developed and -designed. Routes should be selected, owned, operated and maintained by indigenous people in partnership with governments and industry.

In October 2021, the NWT business and political leaders representing the Dene, Métis and Inuvialuit directed a letter on their behalf be sent to Prime Minister Trudeau requesting $100 million for the coalition. He responded very swiftly, directing his ministers to work with us. Unfortunately, to date, there's been no contact.

In terms of some of the recommendations I'd like to go over, barriers to indigenous economic development—

[The Chair, Liberal, Marc Garneau]

Would you wrap it up, Mr. Beaulieu, please.

[Darrell Beaulieu]

Okay, thank you.

We hope to end the economic inequities facing indigenous communities to achieve true economic reconciliation and to become major drivers in the NWT economy. There's a requirement for adequate resources to develop land use, economic and mineral policies to facilitate the free, prior and informed consent to help address the regulatory roadblocks.

We need to empower indigenous governments and businesses to lead northern infrastructure and resource development by providing adequate funding to the NWT indigenous coalition. The key is going to be investments in significant projects in the NWT required to build and create a sustainable economy.

Lastly, I'd like to reinforce the expedition to changes to the First Nations Fiscal Management Act and to expand First Nations Finance Authority services directly to the corporations and organizations that belong to indigenous governments, as the FNFA does finance equity.

I'd like to thank you for that.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Mr. Beaulieu.

The second speaker is Grand Chief Jerry Daniels.

Chief, you have five minutes.

[Grand Chief Jerry Daniels, Chairman, Southern Chiefs’ Economic Development Corporation, Southern Chiefs' Organization Inc.]

[Witness spoke in Ojibwa]

[English]

Thank you for the invitation to appear as a panellist to present the following opening statement regarding the very important and long-standing issue of barriers to economic development.

My name is Jerry Daniels. I'm the chairman of the Southern Chiefs' Economic Development Corporation, and the grand chief of the Southern Chiefs' Organization in southern Manitoba. We represent 34 first nations as the Southern Chiefs' Organization, totalling approximately 81,000 citizens and about 10% of the total first nations population in all of Canada. The Southern Chiefs' Economic Development Corporation was launched in 2018 with the long-term purpose to help enhance and strengthen the economic base of the 34 first nations that make up the membership of the Southern Chiefs' Organization. The Southern Chiefs' Organization was founded in 1999 and, as I said, represents 34 first nations from Anishinabe and Dakota backgrounds.

The Southern Chiefs' Economic Development Corporation, SCEDC for short, represents an opportunity for us to participate as full, equal partners in private enterprise across Manitoba. It is an opportunity to help us move from poverty to prosperity and it is an integral component of building wealth in the first nations communities of southern Manitoba.

My message is clear: the south needs to be open for business, and we are absolutely committed to that. The creation of the SCEDC is an important step in taking back economic sovereignty for our communities. The eagle was chosen as the logo for SCEDC to reflect the importance of a strong economy as a messenger of hope and prosperity. The philosophy of SCEDC is that we are stronger and better together, meaning that we value all elements of good business and fair partnerships, because when we work together, we can build a stronger economy for all our peoples.

Currently, indigenous businesses, communities and people in Manitoba contribute more than $9.3 billion annually to the Manitoba economy. Please see the report “Indigenous Contributions to the Manitoba Economy” that was published in January 2019. This report describes the importance of the indigenous community for business, government and household spending in the Manitoba economy. Despite this, the first nations people who make up the vast majority of the indigenous population in Manitoba are the least involved in business and industry participation that creates wealth for its citizens.

We believe that the long-term path to economic reconciliation will be focused on the components of building wealth. One of the key components is active and meaningful participation in the economy through sustainable and viable business development. We can no longer be shut out of the economic opportunities that this country's wealth has been built on, nor can we settle for less than full, long-term and equal partnership in those current and future business opportunities all around us. They are important and vital. If we don't build first nations wealth, very little will improve and the gaps in the standard of living will continue to be very unacceptable for our population.

Regarding the gaps, several years ago, the Department of Indian Affairs did a nationwide human development index study. The findings were clear and not surprising. The HDI for first nations in Canada was the lowest of any identifiable group in the entire country, and the first nations in Manitoba had an HDI among the lowest of any other first nations in Canada. Unfortunately, very little has been done to improve this situation over the last 15 to 20 years.

In order to encourage first nations wealth building, thus significantly reducing the inherent and long-term gaps in Canadian society, I will briefly discuss a few of the key components of the barriers required to be addressed.

The first is poverty and lack of equity. While these two are not necessarily the same, they do tend to go hand in hand. The cycle of poverty must be broken through education, training, business opportunities and proper housing. These are some of the key components that must change.

While there have been very slow increases in education to close the gaps, they still exist. We need to help the reserve schools to become among the best funded and resourced, with the best teachers available. We also need to address the housing shortages. Long-term business opportunities in industry also need to be supported. Government and first nations can creatively address these shortages as quickly as possible. Long-term loan guarantees to first nations and first nations businesses for capital projects, including housing, may help this crisis.

In short, the basic standards that are accepted for the majority of Canadians must be the minimum standard for first nations. If we collectively want to address the core issues and close the gaps, basic infrastructure like health care, roads, airports and water all fall into this category, along with housing shortages.

[The Chair, Liberal, Marc Garneau]

Chief, you have about a minute to finish.

[Grand Chief Jerry Daniels]

Okay.

Equity is important because without it the individual, community or business development corporation has an infinitely more difficult time in starting and sustaining a path to wealth creation through economic development.

Access to capital remains a barrier. In addition, we need to establish a pure equity fund. Access to capital—grants and low-cost debt—especially for large economic ventures in various industries such as a host of clean energy initiatives, mining, resource development, food security, infrastructure and more remains very difficult to secure. It's very difficult in the current capital resource economy for first nations to enter, and for many decades we've been behind, through a blockade on first nations' ability to meaningfully participate in the agricultural sector. It has been very difficult for us to engage because of the capital required and the bureaucratic interference in first nations' ability to enter these now very capital-intensive economies.

Land conversion for reserve status is a huge part of that. The isolation and lack of infrastructure are hugely important to that.

Procurement opportunities still remain abysmal when it comes to first nations. Regardless of the policy direction that's given through Ottawa, it is not always benefiting the first nations that really need to be given the opportunity to have investment in our communities.

[The Chair, Liberal, Marc Garneau]

Thank you, Grand Chief. Perhaps you can expand on that in the question part.

[Grand Chief Jerry Daniels]

I will. Thank you.

[The Chair, Liberal, Marc Garneau]

Now I invite Mr. Chris Googoo, who is the chief operating officer of the Ulnooweg Development Group.

Sir, you have five minutes.

[Christopher Googoo, Chief Operating Officer, Ulnooweg Development Group Inc.]

[Witness spoke in Mi'kmaq and provided the following text:]

Wela’lioq iknmuioq kis luwistun. E’m kiskuk teluisik Sipekne’katik District. Wutan Millbrook First Nation, Mi’kma’ki.

[Witness provided the following translation:]

Thank you for allowing me to speak. Today, I am in the Sipekne’katik District, the community of Millbrook First Nation, Mi’kma’ki.

[English]

I’d like to thank you for allowing me to speak to you today on barriers to indigenous economic development. I am the chief operating officer for Ulnooweg, an aboriginal financial institution serving the needs of the Atlantic indigenous community.

Ulnooweg’s inception dates back to 1985. It's one of the first aboriginal capital corporations to receive capital. Its history of 35-plus years is a testament to resilience and innovation in indigenous economic development. In its original directive, Ulnooweg was mandated to address a very broad mandate during the early years of community development: to promote the economic and social welfare of our members; to support training and education and research assistance for employment opportunities; and to provide support for benevolent and charitable enterprises and to organizations and corporations engaged in assisting the development, both economic and social, of our members.

Our first two decades of existence focused on promoting economic welfare—pigeonholed by government programming with an unfulfilled community mandate specifically to address the area defined as “developmental lending”, to this day limited on maximum lending limits by program constraints.

Ulnooweg’s path to innovation began in 2004, as it realized the unmet need for capital beyond developmental lending but below the risk tolerance of mainstream institutions.

Our chair, Chief Terrance Paul of Membertou, stated in his address to the Atlantic chiefs in 2007 that in order for us to catch up with the Canadian economy, we need access to larger amounts of capital. We need financing for our community and economic infrastructure for housing, developing our fishery and forestry resources, and for business development. At the present time, we just do not have access to the capital we need. If we do not act now to lay the foundation of our own institutions to take advantage of our collective spending power, then the benefits will continue to flow out of our communities.

Ulnooweg developed a comprehensive feasibility study to establish its own Atlantic financial institution to address this gap. The market demand study led us to continue our search for innovative ways to address the capital needs of our first nations governments in Atlantic Canada.

In 2005 the First Nations Fiscal and Statistical Management Act came into effect. It was a framework built around utilizing revenue in the form of property tax and leaseholds on reserve lands to use as security for a loan from the FNFA. The immediate problem recognized by the Atlantic first nations was their own lack of property tax and leasehold revenues. Because of our prior in-depth work on the market demand study, with over half of Atlantic first nations, we were able to support the efforts of FNFA’s case to recognize own-source revenues, inclusive of revenues from gaming, fishery and other business-related activities.

In 2007, in collaboration with the Atlantic policy congress of chiefs, the fishery business development team was created to address the development of the indigenous fishery sector in Atlantic Canada, its success leading to the creation of similar services in the Pacific and on northern coasts.

As our search to find innovative ways to address the access to capital needs continued, we became familiarized with the philanthropic sector, eventually identifying that our review and presentation of band-audited statements back to local chiefs and councillors, under what we now call our “community financial review” process, could be defined as charitable work. This led to the establishment in 2014 of the Ulnooweg Financial Education Centre, a charitable organization providing government financial literacy.

Our work also identifies the lack of infrastructure to accept philanthropic dollars, as first nations have never been automatically legislated to be recognized as organizations doing the work of public bodies or governments, as municipalities have been. Our work has continued to include supporting communities to gain their qualified donee status under our charity at no cost to the bands.

As we increase our efforts to support the growth of indigenous businesses, we also realize that we severely lack capacity in the technology space. Efforts for increasing procurement participation, for example, identify very low or non-existent capacity to bid on opportunities in this space or to participate in employment opportunities. Our path leads to establishing inroads into the innovation ecosystem to start identifying our needs, leading to a concerted effort to provide STEM education to indigenous youth P to 12, inspiring the next generation.

Building bridges with philanthropy has also led to Ulnooweg establishing its own charitable foundation, the Ulnooweg Indigenous Communities Foundation.

Its recent announcement of a $15-million, five-year grant from the Mastercard Foundation is a testament to its innovative approach to advancing indigenous economic development, not only through the lens of business and economic development, but inclusive of education, health, recreation and community development as per its original mandate.

This can also be seen in its history of institutional development, incubating critical institutions by providing financial administration services for self-governance including the establishment of the Made-in-Nova Scotia Process, which became the Kwilmu'kw Maw-klusuaqn organization involved in treaty rights implementation. Today we are not only administering the collective commercial enterprise of the first nations bands, but we're also in the development stage of supporting the creation of a Nova Scotia Mi'kmaq-owned health authority in supporting health transformation.

Ulnooweg's innovative approach has required increased financial support to the operations as it has grown from an organization of six persons to well over 65 today and still growing. The lack of operation support for capacity development as part of institutional growth is a common problem amongst indigenous communities throughout the country, as has been identified in the development of national institutions like the FNFMB as well.

Thank you.

[The Chair, Liberal, Marc Garneau]

Thank you very much, Mr. Googoo.

We'll now get on with the first round of questions.

It's Mr. Shields from the Conservative Party for six minutes.

The floor is yours.

[Martin Shields, Conservative, Bow River, AB]

Thank you to the witnesses today. I appreciate your excellent presentations.

Let's start with the far north and the first presentation.

Sir, you mentioned that funding programs are a non-starter to begin with. Would that be true?

[Darrell Beaulieu]

Yes, the funding programs in the north are like more programs designed for communities and municipalities. For example, the Canadian Northern Economic Development Agency provides funding directly to the government of those territories and municipalities and various program dollars for the communities.

[Martin Shields, Conservative, Bow River, AB]

They're programs in the sense that you apply for a program and you receive funding. Does that also lead into the situation that you refer to as contractors and consultants? You can't have people there, so the funding allows you to basically get southern consultants and contractors.

Is that an issue you're referring to?

[Darrell Beaulieu]

That is also an issue with southern contractors and consultants. There are some based in the north.

I wanted to get focused a little bit more on the programs. With programs, the most you can apply for is $15,000 or $25,000. With the coalitions initiative and the strategic planning, you can't build an economy on $15,000 to $25,000 a year.

[Martin Shields, Conservative, Bow River, AB]

In a sense, the base funding is not there to develop what you need to do for economic development. Is that what you're suggesting?

[Darrell Beaulieu]

Yes.

[Martin Shields, Conservative, Bow River, AB]

It's the finances coming north as well as the people being employed in the north to make those decisions. Is that what you're asking for?

[Darrell Beaulieu]

Yes. There has to be some adequate financing. Part of that is looking at some investment dollars for infrastructure. Once that's in place, that can be used to leverage private equity and be able to start looking at a planned economy versus the reactionary economy that we've experienced in last 20 to 30 years.

[Martin Shields, Conservative, Bow River, AB]

Right, thank you.

For the diamond mining, of course, you seemed to be well connected. I think I have a couple of diamonds with polar bears on them that probably came out of significant development to do that mining.

[Darrell Beaulieu]

Yes, I'm not sure if I sold you those diamonds but....