Indigenous and Northern Affairs Committee on May 3rd, 2023

[The Chair, Liberal, Jenica Atwin]

Good afternoon. Welcome to the 62nd meeting of the Standing Committee on Indigenous and Northern Affairs.

We are holding our meeting today on the unceded territory of the Algonquin Anishinabe Nation.

Today's meeting is taking place in a hybrid format, pursuant to the House order of Thursday, June 23, 2022. Members are attending in person...

There's a point of order.

[Lori Idlout, NDP, Nunavut, NU]

The English translation is not coming through.

[The Chair, Liberal, Jenica Atwin]

Is the interpretation service working now?

Right. Thank you very much.

Members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons' website. Just so that you are aware, the webcast will always show the person speaking rather than the entire committee.

For those participating virtually, I would like to outline a few rules to follow.

You may speak in the official language of your choice. Interpretation services are available for this meeting in French, English and Inuktitut. You have the choice, at the bottom of your screen, of floor, English or French. Please select your language now. If interpretation is lost at any point, please inform me immediately and we will ensure it is properly restored before resuming our proceedings.

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With regard to the speaking list, the committee clerk and I will do the best we can to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on April 19, 2023, the committee is continuing its study of the subject of Bill C-45, an act to amend the First Nations Fiscal Management Act.

Today we welcome the honourable Marc Miller, Minister of Crown-Indigenous Relations.

Thank you so much for being with us today.

We also have officials from the Department of Crown-Indigenous Relations and Northern Affairs: Philippe Bertrand, manager; Christopher Duschenes, director general, indigenous institutions and governance modernization; Andrea Dixon, senior policy officer; and Karine Tremblay, senior policy analyst. We also have, from the Department of Justice, Andrew Ouchterlony, legal counsel.

Minister, you will have five minutes for your opening remarks. The floor is yours.

[Marc Miller, Liberal, Minister of Crown-Indigenous Relations]

Thank you, Madam Chair.

Kwe Kwe. Tansi. Unusakut. Good day to you all.

Before I begin, I want to acknowledge our presence on the unceded territory of the Algonquin people. As well, I want to thank MP Schmale for the recent motion in the House to move things along. It's truly appreciated from this side of government.

Madam Chair and honourable committee members, thank you for inviting me today to provide an overview of Bill C-45, a legislation that would amend the First Nations Fiscal Management Act. The legislation, as you know, seeks to support indigenous self-determination and economic reconciliation.

The FNFMA supports communities in exercising jurisdiction of their financial management, property taxation and local revenues, and in financing infrastructure and economic developments. The proposed amendments to the legislation before the committee for study were co-developed by the first nations-led institutions established under the act: First Nations Tax Commission, First Nations Financial Management Board, and First Nations Finance Authority, in addition to the First Nations Infrastructure Institute's development board.

Since coming into force in 2006, the First Nations Fiscal Management Act has considerably increased the welfare as well as the economic and community development and self‑determination of over 350 participating first nations in the country.

As the leaders of the institutions told you on Monday, the amendments proposed in bill C‑45 seek to eliminate certain impediments to the economic development of indigenous communities with the goal of increasing the support and tools given to participating communities in the area of fiscal and infrastructure management.

The most important aspect of bill C‑45 is the fact that it creates a new entity, the First Nations Infrastructure Institute or FNII, which will help first nations and other interested indigenous groups, including Métis and Inuit partners, by providing them with the necessary tools, competencies and best practices to assert their jurisdiction in the area of infrastructure and asset management.

The Infrastructure Institute will help participating indigenous groups plan, acquire, own and manage infrastructure on their land.

You heard on Monday from Allan Claxton and Jason Calla of the first nations-led development board and technical working group for the First Nations Infrastructure Institute, or FNII. They have set up pilot projects across Canada that have helped to identify different service requirements to inform development of processes, standards and organizational designs for the FNII. It will, for example, support infrastructure services transfer to new indigenous organizations like the Atlantic First Nations Water Authority.

Another one of those pilot projects is with the Chippewas of Kettle and Stony Point First Nation in southern Ontario. Through this project, the first nation is developing a feasibility study, business case and procurement options for water and waste-water assets. They are also developing a financial model that incorporates First Nations Fiscal Management Act tools that can be used for cost recovery to support water and waste-water treatment projects and infrastructure projects, which are so crucial to economic development and to the well-being of their communities. The work is supporting Kettle and Stony Point's community vision for wealth creation, focusing on the creation of an economy for the community and its members to build housing, education and recreation spaces.

The establishment of the FNII and the success of Kettle and Stony Point are further supported by other amendments put forward in Bill C-45.

The First Nations Tax Commission's mandate would be modernized to better support first nations with their local revenue systems, to strengthen education and capacity supports, and to offer advice to self-governing first nations and other levels of government.

Meanwhile, the First Nations Financial Management Board, which helps first nations strengthen their local financial management regimes and borrow money, would see its mandate expanded so that they could offer services and certification standards to new clients, such as tribal councils and health or education authorities.

The last amendment I'd like to highlight would enhance data collection to enhance the institutions' capacity to support evidence-based planning and decision-making.

The amendments proposed in bill C‑45 are a tremendous opportunity for indigenous institutions to broaden and reinforce their mandates in order to reduce hurdles and improve access to capital and revenues, all the while supporting communities in their efforts to seek out and pursue economic development opportunities.

I look forward to answering your questions.

With that, I'm really looking forward to the questions from the committee.

Meegwetch. Thank you. Merci.

[The Chair, Liberal, Jenica Atwin]

Thank you very much, Minister.

We'll now proceed to our first round, beginning with the Conservatives and Mr. Vidal for six minutes.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

Thank you, Chair.

Thank you, Minister.

It is a good day today when we all agreed to move this legislation forward in the House just before we entered today. I think that's a good thing.

Minister, you and I have spoken on several occasions over the last three and a half years about different pieces of this legislation. Personally, I think the concept of monetization is a very positive step for reconciliation across our country.

Mr. Daniels from the FNFA on Monday obviously agreed, and I know you know where I'm coming from here. What he said was, “We really believe that the monetization of government transfers, be it a new source of funding or an existing source of funding, will really be a big game-changer when it comes to closing this infrastructure gap.” He went on a little bit later in our hearing on Monday to say, “I'm sure at some point in time that monetization will happen, but I just don't know when. The concept is sound. It works. Every other government does that.”

Can you just clarify for the committee whether Bill C-45 actually includes government transfers in the context of the “other revenues” component of that, in the context of what Mr. Daniels is asking for? Also, could you answer Mr. Daniels' question as to when this concept of monetization will be available to be utilized by their organization across the country?

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

This is a super important question.

I think you do have communities in Canada that have dedicated revenue streams that they would perhaps want to secure and pledge for a larger contribution of capital in order to build projects in their communities and perhaps outside their communities.

Just to be clear, it's not the ambit of this particular bill to address the borrowing pools that would be available for monetization or other forms of securitization. That said, the policies and tools do exist within the current confines to proceed on that basis; it is just a question of financial dedication of funds and appropriation to the proper borrowing pools to allow communities to use that type of leverage for their own development of their own communities.

Chris may have some complementary information with respect to that. This is work we need to continue with the stakeholders to move forward. We are supportive of it, but we need to have a serious conversation about the borrowing pools and the access to capital that underpin them.

MP Vidal, unless you have a question you want to ask, Chris may want to complement what I just said.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

Sorry, I think I will move on. That's fair, and I appreciate your response.

In that context, again, I want to follow up a little on what Mr. Daniels talked about in the context of this concept.

If we can get this concept up and running fully, he put it into the comparison of how many houses we could build, how many water treatment plants or recreation facilities, etc. I have some examples in northwest Saskatchewan that you and I have talked about in the context of investments in an oriented strand board mill, where that equity investment would create significant dividends for 12 first nations in northwest Saskatchewan down the road.

If we can get these things going sooner rather than later, for so many people in a riding like mine, which is 70% indigenous, in northwest Saskatchewan, we can create the opportunity, create the jobs, create the economic prosperity that comes with this stuff. It is a way we're going to solve many of these infrastructure challenges. We know the gap is great. I know you've talked about it lots of times.

I just implore you and the department to say that we need to move on this. Capital streams are going up 2% a year or something like that. Inflation is going up. Pick a number at this point. We're losing ground on these things. I would just implore you to say that this is such an important concept. I think it could be a very big part of the solution. Obviously, the folks in the First Nations Fiscal Management Act organizations would agree with that.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Absolutely. I think we have to understand the premises and the conclusion, obviously, to try to state something that makes sense with respect to monetization. It's not the be-all and end-all, but certainly it is a lever that we're not using or having communities use to the full extent that they could, given the current model.

There are some communities that don't have the good fortune of having those revenue streams or sources of income that they could then leverage into larger forms of financing. The basic premise of what is being advanced is that the current grant model that the federal government puts forward is not enough to close the gap in the period of time within which we all aspire to close it. There are other levers that we also have to examine, whether that's within the Infrastructure Bank, better access to equity as opposed to simply getting debt, looking at the grant model or looking at how it serves communities, especially those in the most need.

But clearly—it's a long way to go to agree—I will agree with you on that point. We have to fully understand what particular stream of money it is that people are wishing to pledge against a larger set of a financial commitment. That is not entirely clear all the time in these discussions, but it is a very important one to have, because not all revenue streams can be subject to what these institutions are looking for.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

Do I have time for another really quick question?

[The Chair, Liberal, Jenica Atwin]

You have 15 seconds.

[Gary Vidal, Conservative, Desnethé—Missinippi—Churchill River, SK]

In an interview with Paul Wells back in February, you talked about economic reconciliation in terms of how it can become a catchphrase. Can I just ask you what you meant by that?

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Absolutely. That will probably take more time than the time allotted.

I think we've had a nasty habit in government of picking winners and losers in indigenous communities. When you talk about economic reconciliation, often it has become an opportunity to ignore the elephant in the room, which often is the federal government not paying its long-overdue debts, the failure of which has caused the socio-economic gaps. Trying to plug that gap with new financial instruments without addressing the underlying causes of that socio-economic underdevelopment is, I think, a warning to us all because we've all been guilty of it.

My only point is that you can't walk into the most prosperous community in Canada and say this model needs to apply everywhere else in Canada. I think that is a warning to all of us when we try to use indigenous communities to augment our own political positions.

That was the long explanation.

[The Chair, Liberal, Jenica Atwin]

Thank you, Mr. Vidal.

We'll move to Mr. Aldag, for six minutes.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Minister, welcome. It's great to have you here. This is the first time since I've joined the committee that I've been able to be here with you present. It's great to see you.

Welcome to the officials, and thank you for also being here today.

Because I'm fairly new to this committee, I'd like to start with a bit of a high-level question, just to get your thoughts on why this piece of legislation is important to reconciliation in Canada. We've heard that the act itself has been in place since 2005. Now we're in 2023 and we're putting forward a number of amendments. Why is it at this point in time that this legislation is needed? Could you give us a sense of that? Particularly if there are others who are new to the table or watching who may be interested in why this legislation is before the House, it would be great to hear from you on that.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Thank you. It's an excellent question.

Even though it is relatively recent in the arc of legislation that deals with indigenous communities, it has been and still is seen as one that is very progressive: namely, in what we aspire to be as a country, which is in a position of equals with indigenous communities.

One of the first things you see when you talk about that position of equals is the reality of the socio-economic gaps that have put us and particularly the Government of Canada in a position of power. You talk about nationhood, and “nation to nation” presumes a relationship of equals. When that socio-economic relationship isn't the case, it creates the outcomes that we are seeing today.

A lot of these pieces of legislation were put forward by very progressive members who were indigenous and had a vision of how their own communities, in the circumstances of being subject to the Indian Act, could get out of some of the more onerous and heavy provisions of the act and take control over their assets and over the future of their peoples. They were put in place with that spirit in mind, whether those were views on how you would get revenue from your own ability to tax or on the availability of capital. We know that in our history indigenous communities have had less access to capital than non-indigenous communities.

All these instruments were put in place with that in mind, but things have changed quickly in the last 20 years. For example, there have been demands—and I think one of the key pieces is the infrastructure institute—to have a centre of excellence for how infrastructure is built in communities and run by indigenous peoples. Also, there are some changes to the legislation that are the result of advocacy over that period of time and, very recently, in particular when it comes to the 350-plus communities that are scheduled. Not all those communities availed themselves of every instrument under this suite of legislation, but it does represent a real consensus among indigenous communities that have signed on as to what is needed to reform it and get more access to capital through some of the legislative changes.

One of the important ones I would highlight, which we're still working on, is that we have a set of modern treaties and relationships and we need to make sure they have full access to all the levers that exist under these tools.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Thank you.

One of the things I noticed when we had the panel here on Monday was that many of the progressive councils or bands you mentioned that were drivers behind this were from British Columbia, an area I come from. I was really pleased to see that the first nations in British Columbia were at the forefront of this.

We heard from one of the witnesses on Monday about how we need to have instruments that allow the nations to work at the speed of business. That was a theme that came up. One of the issues, as I understand it, is that the legislation is an important first piece but there are regulations will need to follow in order to fully implement the suite of tools that are available here.

In that spirit of operating at the speed of business, could you give us some reassurance or a sense of what that looks like? Once we get the legislation in place, how long will it take to fully implement the other pieces that will be needed to allow the participating nations to avail themselves of the tools they have?

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

It's an excellent question. I'll answer it partially and then defer to Chris.

We've seen that one of the biggest points of advocacy we hear from communities is the functional inability at times to have their bylaws enforced. In this piece of legislation, there is a suite of bylaws, for example, that will allow communities to have bylaws that have teeth and to therefore access the capital that is needed and have those relationships with communities that they don't have, or that their non-indigenous partners take for granted. That allows folks to move at the speed of business when it comes to some of the regulations when they are going to be fully in place.

Do you want to speak a bit about that, Chris?

[Christopher Duschenes, Director General, Indigenous Institutions and Governance Modernization, Department of Crown-Indigenous Relations and Northern Affairs]

Thank you, Mrs. Chair.

Thank you, Minister Miller.

The legislation does provide for the provisions for regulations to be created. One of the very interesting and big successes of the legislation is that since it was enacted, there has been more and more interest in joining into the legislation, which then results also in the need to create more regulations specific to those target groups that are expressing interest. Modern treaty holders and self-government communities are the ones that have expressed from the very beginning the most interest in getting in on the act.

Creating those regulations is a long and complicated process. We have made great headway recently on those regulations. There will be more regulations created in the future. We hope that in relatively short order those regulations will be in place. That was precipitated by two first nations in your province, so the regulations will be very specific.

One of the challenges on the regulatory front is that each time they are created, they have to be tailored very much to the situation at hand, so our colleagues at Justice have done yeoman's work with the province and with first nations in doing that tailoring to make sure it's legally sound and implementable, but it is a slow process.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Thank you so much.

[The Chair, Liberal, Jenica Atwin]

Thank you, Mr. Aldag.

Mrs. Gill, you have the floor for six minutes.

[Marilène Gill, Bloc, Manicouagan, QC]

Thank you, Madam Chair.

I would like to thank the minister and his team.

I have many questions, as always.

The first question is about economic reconciliation for all. I asked the question last Monday. First nations can participate in the First Nations Fiscal Management Act, but not Métis and Inuit nations. We're not there yet. I was wondering where the difficulty lies in those cases.

What is planned for the future? I'm not asking for a complete timeline, but I would like to know what the possibilities are for those nations over the next few months and years.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

Given that participation isoptional, it will be up to those nations to decide. Historically, this type of legislation has stemmed from our relationship with first nations and not with the Inuit and the Métis.

The federal government has only recently recognized the Métis. That means that their access to capital is even more recent. The Métis have their own financial institutions and know what they want to do. If they want to be part of the system, we will welcome them.

As to the Inuit communities, I do not foresee any obstacles, apart from two or three challenges due to the necessary coordination between the legislation and modern treaties. There's nothing insurmountable there. Political factors could come into play. There is no legal obstacle stemming from the act as it stands.

[Marilène Gill, Bloc, Manicouagan, QC]

Thank you.

I also have a question about first nations.

As you stated, participation is indeed optional. Up until now, 348 nations have participated, unless I am mistaken. You also spoke of hurdles that keep certain nations from participating or mean that they don't get the results they might have expected.

Will the proposed amendments to the First Nations Fiscal Management Act eliminate the hurdles for the nations that are hesitant to participate or would like to do so, but are not able to? Once again, I do know that participation is optional.

[Marc Miller, Liberal, Ville-Marie—Le Sud-Ouest—Île-des-Soeurs, QC]

I can only presume that that is indeed the case, obviously, because the nations are the ones who do the work and who have highlighted the existing hurdles. Out of the 348 nations, only 77 have had access to capital, which translates to about $1.6 billion. That is the clear objective of the act as is stands.

My answer is therefore a simple yes.