Public Accounts Committee on March 11th, 2008

[Terry Sewell]

It has been ten years, sir.

[Charles Hubbard, Liberal, Miramichi, NB]

So you have a lot of history.

Mr. Roy, have you had a long connection with DIAND, or have you been moving from department to department?

[Michel Roy, Senior Assistant Deputy Minister, Claims and Indian Government, Department of Indian Affairs and Northern Development]

I have been in the department for six and a half years.

[Charles Hubbard, Liberal, Miramichi, NB]

So we do have some history here at the table this morning.

Thank you, Mr. Chair. I'd like to come back to this later.

[The Chair, Liberal, Shawn Murphy]

Before we go to Mr. Sweet, I'll go back to Mr. Sewell.

In the report, in your response to the auditor's recommendations--following up on the questions of Mr. Wrzesnewskyj--on this whole issue of reasonable share, the undertaking was given by your department that this could be defined clearly by December 2007. Has that been done?

[Terry Sewell]

Yes. In December 2007 we obtained our legal advice from the justice department as to the definition of “reasonable share”. The next step is to consult with the other signatories to the agreement to see how close our minds are on our interpretation of “reasonable share”.

[The Chair, Liberal, Shawn Murphy]

That's not the way I read the response. You made a commitment that you would define “reasonable share” so this thing could move ahead. Now you're saying that all you got was a legal opinion and you're in the dark.

[Terry Sewell]

We have the federal government's view of “reasonable share”,and now we have a responsibility under the land claim agreement to consult with our other partners to come to a mutual conclusion as to the interpretation of“reasonable share”.

[The Chair, Liberal, Shawn Murphy]

Can you file what your definition of “reasonable share” is with the committee?

Mr. Lake has a question, and then we're going to Mr. Sweet, for up to seven minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I have a quick point of clarification to Mr. Wrzesnewskyj's point. He asked about untendered contracts, for an example. Are you saying you can't give an example of an untendered contract, or are you saying there are none?

[Terry Sewell]

I can't give an example.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Can you endeavour to provide us with a list? Is that possible, to go back and actually do some research on that?

[Terry Sewell]

We can look into that, but I'm not sure....

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Okay. Thank you.

[The Chair, Liberal, Shawn Murphy]

Mr. Sweet.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Thank you, Mr. Chairman.

I want to ask Mr. Wernick how long he has been been at INAC.

[Michael Wernick]

It will be two years in May.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Two years. So there is a lot of history that precedes you, obviously.

Maybe I'll stick with this line of questioning. In talking about the contracts, paragraph 3.35, you're hopefully now going to submit a list of those contracts that have gone directly to Inuvialuit. But what are we going to do in the future to assure this doesn't happen? I'm particularly concerned with broad-brush principles that at the time of the agreement weren't fleshed out, so that now, 23 years later, we're actually asking for a legal opinion about what “reasonable share” is. I hope you can see how people would have a jaded opinion about the whole process. Are there specific things we're doing right now to make sure this doesn't happen again?

[Michael Wernick]

Mr. Sewell alluded to a few of them.

I would say a couple of things. One is that INAC doesn't do very much of the procurement. It's either done by Public Works or other federal departments. There's a hell of an information-gathering challenge, which we're trying to get to the bottom of so we can insinuate the Inuvialuit obligations into decisions that are made across the federal government on procurement decisions--many by Public Works, some directly by departments--when they're buying goods and services. We have not done a great job of tracking and tracing that in the past. We'll try to do better in the future. That's the kind of thing Mr. Sewell was alluding to, and I'll turn to him in a moment.

“Reasonable share” is one of those terms that the negotiators at the time agreed to as part of an overall bargain. I would deduce that in 1983 they could not define that there would be a numerical share 20 years or 30 years from now, because there was no way to forecast the economic development. Nobody, in 1983, would have predicted $100-a-barrel oil or what happened in diamonds or whether we'd be buying whatever, so the parties agreed that we will work towards a reasonable share. That's a moving target. We wanted a legal opinion because I don't want to expose the crown to litigation on this matter. If we say there's a certain reasonable share, somebody will go to court and challenge us on it. It's normal due diligence, to make sure we understand what the lawyers think “reasonable share” is.

We may have a view of it. The Inuvialuit undoubtedly have a view of it. We're going to have to sit down and talk to them about it.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Are we trying to avoid in agreements now.... For example, this principle that states “to enable the Inuvialuit to be equal and meaningful participants in the northern and national economy and society” is such a broad-brush statement. Are we at least trying to ask what that means to them, so we have some specific parameters?

[Michael Wernick]

There is a tendency, at the negotiating table, to put aspirational, unobjective language into the agreements, because you are moving from the old relationship, often within the Indian Act, to a new relationship, which is very important for that community. We've just done that with a number of British Columbia communities. It is a modern treaty with the crown. It is extremely important to the aboriginal people in question, so there is a natural tendency to put some language in to characterize the hopes for the future.

I would prefer that we try to dial down the language to something we can track and trace. The most important part is that when there are honest disagreements about implementation issues five years or ten years later, there are more effective dispute settlement mechanisms: implementation panels, implementation boards, greater use of arbitration.

We're not going to have perfect harmony, any more than we would between the Government of Canada and the Government of Ontario. We'll have an ongoing relationship, and we need more effective tools to see if we're on track and to resolve issues when they come up.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

So you've been the deputy minister for two years. You mentioned before that your concern was that a report like this overshadows a lot of the good work that's been done, and I can understand that you'd feel like that.

Has the good work been articulated in the department's performance review in the last two years?

[Michael Wernick]

I'd have to look at that. We're now down to under 30 pages to describe the entire activities of my department. So my guess is it's a very abbreviated reference.

What I'm trying to get on the Internet and into other documents is a much clearer reporting of each of those 21 agreements, what has happened in that area, and what are the things that are underway.

[David Sweet, Conservative, Ancaster—Dundas—Flamborough—Westdale, ON]

Just as a note, we've had a lot of discussions about DPRs here at this committee. The more frank and transparent they are, the less likely thoughts of--how would I say it?--cataclysmic demise would be in the minds of members when we see a report like this, if we know what's been going on in a department.

In paragraph 3.83.... I'm going back to what seems to be a disagreement, and maybe we'll find out where exactly we're at. I might just consume my time; I'm not certain. In paragraph 3.83 it's says:

On the contrary, Department officials have expressed reluctance to monitor and report progress towards achieving the principles of the Agreement. They explained that doing so would imply that an obligation exists, where no obligation is written into the Agreement.

Then, subsequently in the response, you have that INAC accepts this recommendation and will propose performance indicators to all signatories at a future implementation committee meeting, with a view to monitoring and reporting on progress.

So which one is the fact? Is paragraph 3.83 actually where you sit, or is the response to the recommendation where you're really at? And has that been done, now that this is approaching spring 2008?

[Michael Wernick]

I would assume that's a fair characterization of what Mr. Campbell heard from staff when he was interviewing them. I think that the department has probably been trained--due to the fact that we are often sued about implementation issues--to be very, very cautious in accepting something as an obligation, because you might end up in court.

Mr. Campbell and I have agreed that this is not a very productive argument to be having. We accept that the principles are very important to the parties, and we are going to monitor progress against them.