Indigenous and Northern Affairs Committee on May 15th, 2023

[The Chair, Liberal, Jenica Atwin]

I call the meeting to order. We're going to be tight on time and to try to get back on track here.

Welcome to meeting number 65 of the Standing Committee on Indigenous and Northern Affairs.

We acknowledge that today's meeting is being held on the unceded territory of the Algonquin Anishinabe people.

Our meeting is in hybrid format, pursuant to the House order of Thursday, June 23, 2022. Members are attending in person or remotely using the Zoom application.

The proceedings will be made available on the House of Commons website. For your information, 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 or English. You have the choice at the bottom of your screen or on your console of the floor—no interpretation—English or French. If interpretation is lost at any point, please inform me immediately, and we will ensure that interpretation is properly restored before resuming the proceedings.

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With regard to a 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 November 21, 2022, we are commencing the study of the Office of the Parliamentary Budget Officer's report on the research and comparative analysis of the estimates of the Department of Crown-Indigenous Relations and Northern Affairs and the Department of Indigenous Services.

Joining us today to discuss the report are Yves Giroux, Parliamentary Budget Officer, and Mark Mahabir, director of policy and general counsel for the PBO. Welcome. Thank you very much for joining us today.

You will have five minutes to make an opening statement, after which, questions from the members will follow.

Please begin.

[Yves Giroux, Parliamentary Budget Officer, Office of the Parliamentary Budget Officer]

Madam Chair, ladies and gentlemen, members of the committee, thank you for the invitation to appear before you today.

With me is Mark Mahabir, director of policy and general counsel.

We are pleased to be here to present the findings of our Research and Comparative Analysis Report of Crown Indigenous Relations and Northern Affairs and Indigenous Services Canada, which we were honoured to prepare at the request of the committee.

The Parliamentary Budget Officer supports Parliament by providing independent and nonpartisan economic and financial analysis to parliamentarians. As the legislation states, we provide this analysis for the purposes of raising the quality of parliamentary debate and promoting greater budget transparency and accountability.

Consistent with the PBO's legislated mandate, at the request of this committee, my office prepared an independent analysis of the estimates of the Department of the Crown-Indigenous Relations and Northern Affairs and the Department of Indigenous Services Canada.

Our report presents analysis for the 2015-16 to 2022-23 period. Over this time, financial resources allocated to the provision of indigenous services have increased significantly. To evaluate how effective the organizations providing these services were in using these resources, a quantitative and qualitative approach using publicly available data was employed.

The analysis conducted indicates that the increased spending did not result in a commensurate improvement in the ability of these organizations to achieve the goals they had set for themselves. This was partly driven by the volatility in the departmental result indicators. Many of these indicators were added or removed over the course of the period, preventing results from being collected due to data collection lags. Some indicators lack target values and completion dates altogether. Based on the qualitative review, the departments' ability to achieve the targets specified has declined.

We would be pleased to respond to any questions you may have regarding our analysis or any other PBO work.

Thank you, Madam Chair.

[The Chair, Liberal, Jenica Atwin]

Thank you. You have saved us some time. I appreciate that.

We'll begin our first round of questions starting with Mr. Vidal.

You have six minutes.

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

Thank you, Chair.

Thank you both for being here today and for the work you've done on this.

You quoted from your executive summary the fact that financial resources allocated to providing indigenous services increased significantly over this period of 2015-16 to 2022-23. You went on to talk about the quantitative and the qualitative component of your report.

For a couple of minutes, I want to just drill into the quantitative part, and I'll come back later and hit some of the qualitative stuff.

Just doing a little bit of looking on my own, if you go back to the 2015-16 and a little bit prior to that even, the range of spending on indigenous affairs, which was through INAC back then, was in the range of $7.5 billion to $9 billion over those three years, and by the time we get to 2021-22 that number is about $29 billion. The supplementary estimates (C) for 2023 say that number is $58 billion, and the main estimates for 2023-24 start the process for next year at $49 billion.

In that same time frame, the number of FTEs has increased from about 4,500 to what we're projecting now, about 9,200 for the coming fiscal year.

These are really big numbers and these are really big changes. In the context of the quantitative component of your analysis, can you just speak to the significance or the magnitude of these changing numbers?

Then I have a follow-up on some other parts I want to talk about.

[Yves Giroux]

The increases in the numbers of both departments combined are due to the fact that there has been a reorganization, notably, the transfer of some responsibilities from departments other than the old aboriginal affairs department to the now Indigenous Services department and Crown-Indigenous Relations and Northern Affairs. Notably, the first nations and Inuit health branch, which was in Health Canada, has now been transferred to Indigenous Services, but that's a relatively minor factor explaining the increase in overall funding.

Most of the increase in funding relates to the agenda of the current government, which has made a point of increasing funding for services and programs related to indigenous/aboriginal Canadians.

That's the main factor. We could drill down into specific programs, but I think that's probably not what you want me to talk about—

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

I would love to do that, as an accountant, to be honest with you, but I don't think I have time for that in my six minutes, so let's move on a little bit.

There was a fellow by the names of Ken Coates. I know we're all familiar with Ken Coates. He's a distinguished fellow and director of the aboriginal peoples project at the Macdonald-Laurier Institute, and he's a Canada research chair in regional innovation at the University of Saskatchewan. I think most of us in the room would consider him a relatively non-partisan voice on these issues. We've had him at committee a few times, representing different people here.

He wrote an article in August 2022, which was just a few months after he released a report. His article was specifically in response to your report. He said:

Put bluntly, Canada is not getting what it is paying for—what’s worse, the massive spending is not improving lives in Indigenous communities.

He went on to say that Canadians believe:

If Canada spends billions on Indigenous affairs, it must mean that we care deeply about First Nations, Métis and Inuit peoples. But it does nothing of the sort. While headlines emphasize dollar amounts, the statistics that tell the actual story of Indigenous well-being—around employment, health, housing conditions, suicide rates, violence and imprisonment, language, cultural revitalization—are much more sombre. When spending vast sums fails to make a substantial difference in many communities, the federal response is too often to double down and spend even more, in the absence of understanding what actually works to improve the lives of Indigenous peoples.

My question is really quite simple. Do you agree with that assessment? He was responding to your report.

As a follow up, is this common to other departments, or is it unique to CIRNAC and ISC?

[Yves Giroux]

In short, based on the performance indicators that we have analyzed in our report last year, I would tend to agree with Mr. Coates. What we've seen seems to be consistent with his comments, or at least, what we see in terms of performance indicators certainly does nothing to disprove his comments.

As to whether it's common among departments, I would say that it's not common to see a level of increase of that magnitude that is not accompanied by a significant improvement in performance indicators. What we have seen though are performance indicators that are attained or met about 50% of the time. That is not uncommon, but it's usually not accompanied by such a significant increase as we have seen in the area that we are studying today.

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

Thank you.

I just have a little window to ask one last question. There's an editorial that was published just shortly after your report. You are quoted as saying, “While its increases in funding have been well-intentioned, the Indigenous bureaucracy has had trouble matching spending increases with assessing its performance on how it spends the money.” This is a little bit of a follow-up to what I just said. Can you just flush that out a little bit? What did you mean by that when you were quoted as saying that?

[Yves Giroux]

If I remember correctly, I meant that the government has increased spending significantly. That's probably an understatement, but it seems difficult to have the bureaucracy spend, and spend it wisely, at the same rhythm as the government. There seems to be a lag between the investments that are announced in May by the government and the capacity of the bureaucracy to deliver, to get results for the target populations at the same rhythm as we see the increase in funding.

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

Thank you.

[The Chair, Liberal, Jenica Atwin]

Thank you, Mr. Vidal.

Now we'll move to Mr. Aldag for six minutes.

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

Thank you, Chair, and thank you for being here today.

When I read the report, one of the things that jumped out at me was in the conclusion, where you noted that “We must stress again that the differences in spending and human resources levels reported in this research were compliant with the supply process and the budget.” To me, that says that although there's increased spending, it's within the allotments that have been given by the federal government.

I'm also wondering about the indicators that are reported. How many of them are voluntarily set by the department? Are any of them legislatively mandated? I worked previously in the federal public service, and I know that some departments and agencies have things that have to be done within mandated, legislated time frames. Do either of these departments have those legislated, or are they all voluntary?

[Yves Giroux]

I think the majority are voluntary, but maybe Mark knows if some are legislated. I don't remember any of the performance indicators being legislated.

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

We've also seen over the last period that between 2015 and 2023 is when a lot of this work was evaluated. There have been a lot of changes, not only the splitting of the department and the adding of the indigenous health services, but our government also came in with very ambitious goals to do more on reconciliation than any government has done in the history of this country. I think we've heard this time and again. When I go out to meet with indigenous communities, they say that this Liberal government has actually been the most progressive in helping to advance issues that have existed since the beginning of our country.

We're seeing increased investments to try to make progress on these things. I also think that we're probably going to see some slippage in voluntary timelines as the government says.... I was involved with Parks Canada, where we were doing things like establishing national parks, which are really hard to have hard time frames for. I would think that with these departments, where they're involved in things like land claims and reconciliation and relationship building, there are a lot of conversations and there are not hard timelines. You can project that we're going to have x number of land claims settled or other things done within five years, but if things don't come together, that's not going to happen. There would have to be flexibility, I would think, in being able to slip....

The other piece—and if you want to touch base on that, I'd like to—is that I wonder about extenuating circumstances. We had COVID hit during this time period that you've looked at. I know one of the conversations that I often have is that our government said that within our first mandate in the 42nd Parliament we would end all boil water advisories. There has been significant progress made on those, and again a lot of money has been spent. During COVID, many first nation communities had some of the hardest lockdowns in the country. They were saying, “For the protection of our community, we do not want outside contractors coming in.”

In your report, when you get into the quantitative data, did any of those kind of extenuating circumstances get looked at? I would think the last three years we've come through have probably caused some delays in achievement of goals, not only in these few departments but also probably across the federal public service.

[Yves Giroux]

That's a good point.

We flag in our report that some of the ability to meet the departmental results indicators are more difficult when it comes to indigenous, self-determined services, meaning services that are determined by the indigenous communities themselves. In these areas it's much more difficult for the departments to control the attainment of the targets they have set for themselves because they're dependent in good part on the indigenous communities themselves. We have flagged that it's not entirely within the control of the departments to reach these targets.

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

Can you comment on the extenuating circumstances such as COVID? Did we see the same kind of delays happening, not only in these departments but also in other departments you've looked at, because of, frankly, what the world went through over the last couple of years?

[Yves Giroux]

It's an issue that we obviously all went through. We didn't adjust some of the targets to take into account COVID, but it's understood. It's widely known that we went through COVID. Depending on the specific indicators, there could be some extenuating circumstances—COVID—that could apply in some instances, but probably not in all. It's left to the good judgment of those who read the reports to determine whether COVID is a circumstance that warrants some forgiveness for some of the indicators or not.

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

The report is very factual, but I found it, frankly, to be a bit cold. We had other things happening. The discovery of the missing children in Kamloops is the first example, and that has played out. Again, I don't think any Canadian should be surprised because we've known for generations from indigenous peoples that their children were taken, lost and never came home.

This was something that happened in this time period that got national attention. Again, it caused more investment and resources, but also, I would think, the department has paid attention to it. I didn't see that kind of reflection in here. It is a very tragic human, story, yet this is very accountant-focused. I would like to have seen some sort of narrative, but maybe you don't do that in your reports. That was another observation on the report.

[Yves Giroux]

That's a very good point, sir.

I'm an economist by training, so I tend to stick to the facts to the extent possible, but that's a very valid comment.

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

I'm out of time.

Thank you.

[The Chair, Liberal, Jenica Atwin]

Thank you, Mr. Aldag.

Ms. Bérubé, you have the floor for six minutes.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Thank you, Madam Chair.

I wish to thank the witnesses for being here at committee.

Mr. Giroux, in your report you said that there are still discrepancies between actual and planned spending, owing to structural changes at the two departments. You also said that those structural changes were not the only reason for the discrepancies in spending, which could be attributed to “reasons unrelated to the structure of the departments.” Could you elaborate on those reasons? What are they?

[Yves Giroux]

Thank you very much.

When I hear the report being quoted like that, I think an explanation is warranted because it far from being clear when read like that.

When the report says there are structural discrepancies between actual and planned spending—and the same thing applies to the number of people employed in the department—, that is because the departments table their departmental plan before the start of the year. Since the budget is usually tabled after the plan, there are often surprises and the departments need additional funds for spending that was not planned when they tabled their plan.

The government offers a wide range of services for indigenous, Inuit and Métis persons. As a result, the initial plan is often changed to reflect new priorities or additional investments that announced in the budget or outside the budget, such as during the fall economic update or in separate announcements. That is what we were referring to in the report when we used that phrase which, I admit, is not very clear.

[Sylvie Bérubé, Bloc, Abitibi—Baie-James—Nunavik—Eeyou, QC]

As to the reasons unrelated to the structure, when you say that the departments make adjustments after the government has tabled the budget, what criteria do you use in according funding?

[Yves Giroux]

The government makes those decisions. The departments draft their report on the basis of what they know, whether their report on plans and priorities, their departmental report or their departmental plan. They usually draft it in January or February and table it in March or a bit later, but before the budget is tabled. Should the government decide, during budget proceedings, to make additional investments, that is not reflected in the departmental plans.

As to the criteria we use to determine whether there is a significant discrepancy, we used a ratio scale. That shows us whether actual spending is very close to planned spending, or if it is far off, by what percentage. We did not use specific criteria, such as a 5% or 10% deviation. We showed this on a graph and also presented it in a few tables.