Public Accounts Committee on Oct. 17th, 2018

[The Chair, Conservative, Kevin Sorenson]

Good afternoon, colleagues.

It's Wednesday, October 17, 2018, and this is meeting number 112 of the Standing Committee on Public Accounts.

We are here this afternoon to consider “Report 5, Socio-economic Gaps on First Nations Reserves—Indigenous Services Canada”, of the 2018 spring reports of the Auditor General of Canada.

We're pleased to have a number of witnesses here on that report, but before we get to that, I would also like to draw attention to our gallery. In our public area today we are very pleased to have a delegation from the state finance accountability committee of the People's Representative Council of Indonesia. I would ask them to stand.

[Some hon. members]

Hear, hear!

[The Chair, Conservative, Kevin Sorenson]

We welcome you here today.

We were pleased to host them at a luncheon yesterday where we heard about their accountability and transparency measures in Indonesia, their committee, as well as a commission that works hand in hand. Around the breaking of bread and while sitting at the table we learned a little bit about their system and they learned about ours.

We're also pleased and honoured to have with us today, from the Office of the Auditor General of Canada, Mr. Michael Ferguson, Auditor General of Canada, and Mr. Joe Martire, Principal.

Welcome.

From the Department of Indian Affairs and Northern Development—

[Jean-François Tremblay, Deputy Minister, Department of Indian Affairs and Northern Development]

It's Indigenous Services Canada.

[The Chair, Conservative, Kevin Sorenson]

Department of Indian Affairs and Northern Development is still the legal name of the department. We are pleased to have Mr. Jean-François Tremblay, Deputy Minister, as well as Mr. Paul Thoppil, Chief Finances, Results and Delivery Officer, Indigenous Services and Crown-indigenous Relations and Northern Affairs.

We also have Ms. Shelie Laforest, Acting Senior Director, Program Directorate, Education and Social Development Programs and Partnerships Sector.

We welcome you here today. We'll open today's meeting by turning the floor over to the Auditor General.

Mr. Ferguson, please.

[Michael Ferguson, Auditor General of Canada, Office of the Auditor General]

Mr. Chair, thank you for the opportunity to discuss our spring 2018 report on socio-economic gaps on first nations reserves.

Joining me at the table is Joe Martire, the principal responsible for the audit.

Successive governments have made numerous commitments to improve the well-being of first nations people, and Indigenous Services Canada is the lead government department responsible for meeting most of these commitments.

In this audit we assessed Indigenous Services Canada's progress and reporting on closing socio-economic gaps between on-reserve peoples and other Canadians. We also focused on whether the department made adequate use of data to improve education programs to close the education gap and improve socio-economic well-being.

We found that the department's main measure of socio-economic well-being on reserves, the community well-being index, was not comprehensive. While the index included Statistics Canada data on education, employment, income and housing, it omitted several aspects of well-being that are also important to first nations people—such as health, the environment, language and culture.

Mr. Chair, to close socio-economic gaps and improve lives on reserves, federal decision-makers and first nations need information about the socio-economic conditions of first nations people and program data that are reliable, relevant and up-to-date.

Indigenous Services Canada requires first nations to provide extensive data about their on-reserve members. The department also obtains data from Statistics Canada, other federal government departments, indigenous organizations and other sources. We found, however, that the department did not adequately use the large amount of program data provided by first nations, or other available data, to measure and report on whether the lives of people on first nations reserves were improving.

For example, the department didn't adequately measure and report on the education gap. Using the education data collected by the department, we calculated that the gap in levels of high school graduation or the equivalent between on-reserve first nations people and other Canadians widened between 2001 and 2016.

We also found that first nations had limited access to the department's education information system and related analysis. Since 2008, the department had spent about $64 million on developing and operating this system. The system was intended to capture and analyze first nations education data to inform decision-making, which first nations could access as well.

Indigenous Services Canada also made poor use of the education data it collected to improve education results. For example, the department spent $42 million over four years to prepare first nations students to enter post-secondary education programs. However, we found that only 8% of those enrolled actually completed this preparatory program. Despite these poor results, the department didn't work with first nations or educational institutions to improve the success rate.

Mr. Chair, complete and accurate departmental reporting informs Parliament, Canadians and first nations about the true extent of federal program results and whether progress is being made on closing the socio-economic gap between first nations and other Canadians.

We found that the department did not report on most of the education results it had committed to report on over the past 18 years to determine whether progress was being made to close the gap. For example, it did not report on student attendance or the delivery of first nations language instruction.

We also found that the department's public reporting of first nations results was inaccurate. For example, the department overstated first nations high school graduation rates by up to 29 percentage points because it didn't account for students who dropped out between grades 9 and 11. Moreover, the department's data showed that between the 2014-15 and 2015-16 fiscal years, the graduation rate was improving, but our calculations showed that it was declining.

We concluded that Indigenous Services Canada didn't satisfactorily measure or report on Canada's progress in closing the socio-economic gaps between on-reserve first nations people and other Canadians. We also concluded that the use of data to improve education programs was inadequate.

Our report contains three recommendations aimed at improving Canada's progress and reporting on closing socio-economic gaps between on-reserve first nations people and other Canadians.

This concludes my opening statement. We will be happy to answer any question you may have.

Thank you.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, sir.

We'll now turn to Mr. Tremblay.

Mr. Tremblay, we look forward to your testimony.

[Jean-François Tremblay]

I would like to thank the committee for the invitation to speak here today at your 112th meeting. I would like to acknowledge that we are meeting on traditional Algonquin territory.

I will do something that I suspect is not allowed with the protocol. I will also use this opportunity to remind people who don't know that tomorrow is the one-day fasting day for the Moose Hide Campaign. For those of you who want information about this, there will be people walking around and going to see you on Parliament Hill tomorrow. That's a very good event. It's men standing against violence against women and girls. We encourage you to participate.

I'm joined today by Paul Thoppil, Chief Finances, Results and Delivery Officer, and also by Shelie Laforest, Acting Senior Director, Education and Social Development Programs and Partnerships Sector.

My colleagues and I have carefully considered the spring report on socio-economic gaps and education data for first nations on reserve. I would like to affirm that Indigenous Services Canada agrees with the three recommendations in the report that pertain to our department.

I will go through each recommendation and provide a brief update on our progress, after which I will be pleased to take your questions. But first, let me provide some context to our responses.

The Government of Canada is advancing a renewed relationship with indigenous peoples. We are committed to working with partners to change funding models and create opportunities for first nations to control first nation matters, including education.

This is not a new concept, but it has long been ignored and not implemented appropriately. It's a fact that more than 20 years ago, the the-president of the Saskatchewan Indian Federated College was quoted in the royal commission's report as saying, “Aboriginal education for self-determination, controlled by Aboriginal people, succeeds”. That's what we're trying to ensure.

The Government of Canada is now taking important policy steps, in collaboration with its first nations partners, to support self-determination in first nations education.

Let me now explain our response to each of the three recommendations.

This first recommendation has to do with working with first nations as well as other partners to measure and report on overall socio-economic well-being of first nations on reserve, as well as to look at additional aspects of socio-economic well-being that first nations have identified as priorities. These include language and culture.

I am happy to report that we are doing exactly that. Much of this work is already under way with the Assembly of First Nations and other partners. As a first step and part of our co-development of a new fiscal relationship we are working with the Assembly of First Nations and such other key partners as the First Nations Information Governance Centre on a proposed national outcomes-based framework. I think a draft of this framework has been distributed to you.

Through this framework, we hope to measure gaps in things like living standards, education and health between first nations and non-indigenous people in Canada, so that we can see if we are starting to close these gaps.

The outcomes in the proposed framework are aligned with the United Nations sustainable development goals, which are very comprehensive. Taking a wide view of the kinds of outcomes we want will help us actively engage with indigenous peoples to define measures of success that are meaningful to all parties. This means we can more comprehensively measure progress on numerous aspects of well-being, including language and culture.

In all, we aim to have co-developed baseline data on socio-economic gaps within three years so that we can start to systematically measure and report on our progress.

Central to this reporting will be to work together at every stage—from defining mutually meaningful indicators, to integrating first nations knowledge and perspectives into the narrative. We are committed to a respectful process and to taking the time to get it right.

I will now turn to the second recommendation, which has to do with collecting, using, and sharing data on education with first nation partners in order to improve education results for first nations people on reserves. The department agrees with this recommendation, and we are already working hard to implement it.

Indigenous Services Canada has invested in relationships with first nations to manage education data. We are collaborating on pinpointing meaningful education results that could replace what we currently measure. We are also in a paradigm shift towards first nations control, which means that first nations will be the ones collecting meaningful data to report to their communities and that the government will be in the loop.

We know that strengthening first nations' data governance capacity is key to this work. That is why, as part of the new fiscal relationship, as I mentioned earlier, measures are planned to support the design of a national data governance strategy for first nations.

We have also been working with first nations partners to co-develop a new K-to-12 education policy, which will guide the development of regional approaches and include mutual accountability and improvements in data collection, use, and sharing. In December 2017, the Assembly of First Nations ratified our joint policy work, which reflects the aim of first nations control of first nations education. There will never be a "one size fits all" solution for first nations education. This is why we are working to strengthen regional approaches. A recent and bold example is the tripartite education framework agreement in British Columbia, which we see as our mile zero for this kind of collaborative regional work which is more comprehensive.

In developing regional agreements with first nations and other partners, we can all be on the same page for what we measure and how, as well as for interpretation going forward.

I will now turn to the third recommendation, which is about the integrity and accuracy of reporting on education results for first nations. Indigenous Services Canada agrees with this recommendation. As I mentioned, our education transformation work involves agreeing with first nations on ways to promote complete and accurate results. In terms of reporting on graduation rates, the department was always very clear on what we were measuring or reporting on. The Auditor General did not dispute the data but did propose an alternate approach.

I agree it is a complex situation, as each province measures graduation rates differently. Some do it over three years or over four years.

Others will give fewer years. It really varies from place to place.

In addition, as you know, in the case of first nations, many students may go from the reserve system to an off-reserve system.

This mobility should be taken into account if we want to measure results appropriately.

Our education transformation work will include an updated results framework and consequential adjustments to the education information system, or its successor. This will go a long way towards addressing the auditor's concerns.

In sum, Mr. Chair, my department welcomes all of the recommendations of the Auditor General and is well on its way to a new approach on education for first nations that will address the concerns around data and socio-economic gaps.

I thank the committee members for their attention.

We now welcome your questions.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much, sir. Thank you to all.

We'll now move into our first round of questioning. It's a seven-minute round, and it will be a split with Mr. Arya—

[Chandra Arya, Liberal, Nepean, ON]

Apparently, it's only me.

[The Chair, Conservative, Kevin Sorenson]

Mr. Arya, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Mr. Chair.

I would like to thank the witnesses for appearing here and making their statements.

My first question would be for the Auditor General.

Mr. Ferguson, you have made recommendations and you heard the response from the department. Are you satisfied with the response?

[Michael Ferguson]

That's always difficult to say, because until we actually see the changes that they are talking about, it's hard to say whether they are going to make a difference or not.

I think in this report, we've seen that successive governments over the last 20 years have said they are going to make changes, and we keep coming back and seeing the same issues. I can't disagree with anything the department is planning on doing. I think what we need now, though, is a way of making sure that it's done and not waiting for us to come back and do another audit in another five years' time to find out it hasn't been done.

[Chandra Arya, Liberal, Nepean, ON]

Yes, that's quite interesting, Mr. Ferguson. In 20 years, you keep reporting, and the department comes back with the same thing, saying they are going to improve, that they are going to make changes, but there's no result to see.

Did you have a chance to look at this draft national outcomes-based framework reporting timeline?

[Michael Ferguson]

No, we haven't looked at that. It was after our audit.

[Chandra Arya, Liberal, Nepean, ON]

Maybe later on we would like to have your input on that.

Mr. Chair, my next question will be for Mr. Tremblay.

Mr. Tremblay, we hear the Auditor General saying that the department has been receiving recommendations from the Auditor General for 20 years and the typical response is that, “Yes, we agree. Yes, we are going to change. We are going to do it,” but year after year they have not done it. Why do you think that is?

[Jean-François Tremblay]

It's different, and I know for some of you it's like a broken record, and the department always says they agree with the recommendations. You want that to be more than an act of faith. You want to see results and you want to see changes. I think in what we have on the national outcomes, for example, we didn't wait for the results from the Auditor General's report.

To put it in context, the community well-being index was developed at the beginning of the century, to be honest. That was a time when the HDI was really popular internationally. You remember people were proud that Canada was scoring and ranking very high at the time. Some first nations, including the national chief at the time, said that Canada was not doing that well because there was a huge gap on reserves. People in the department at the time decided to ask if they could measure something comparable to the HDI that would allow them to see how we perform on the first nation side. That's what the community well-being index was.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Tremblay, actually, my point is that I've been on this committee for the last three years and we have gone through numerous Auditor General reports, but this is the first time I'm seeing the Auditor General saying that with a particular department this has been happening over a period of 20 years.

Is there anything unique with your department to explain why this is not getting done?

[Jean-François Tremblay]

It's being done. Let me come back on this. We have now an outcomes-based draft that is more comprehensive than the community well-being index on that. It's too early to know exactly what it's going to end up with, but this is a major step if we succeed in doing that.

On education, we've known for years. You talked about 20 years. I will talk about 50 years, if you want. The education system on reserve has been underfunded for years, and we know that. The education system on reserve has been a tool of colonization in this country since the Indian residential schools, and it's a reality. We have been also responding to that with a series of long programs that were all different, with different accountability structures. For the first time in this country we have been able to engage with first nations through a co-development approach, and in 14 months ended up with a financial formula for the education system on reserve that is actually equity-plus, which is comparable to the province in which they live, but at the same time, includes more to address specific needs of their community. That has never been done. We're addressing something that is essential.

On the colonization side, there have been attempts in the past but this is the first time that we're going this far. We're going with regional agreements with first nations, with school boards. We have created two school boards in two years. It's changing.

[Chandra Arya, Liberal, Nepean, ON]

I apologize. I have limited time and I have a few more questions to ask.

[Jean-François Tremblay]

Sorry.

[Chandra Arya, Liberal, Nepean, ON]

You mentioned there has been underfunding, but let's come to the ones where a lot of money has been invested. For example, the Auditor General mentioned that since 2008, over the last 10 years, the department has spent $64 million on developing and operating the education information system and related analysis. He says that the first nations had limited access to it. We have invested a significant amount of money here.

[Jean-François Tremblay]

We have invested money in this for 633 different communities in the country. The reason we invested this money at the time was that most of the information we were getting from first nations was by paper, and it was a program. It came like that, and the questions on how you collect and how you use that money, that data was not necessarily well done. It took time to get the system in place. The system is now running. We started having discussions and we exchanged a lot of information with first nations. We're also going now with pilot projects where first nations would have direct access to the data. If you look at our statistics, you see we now have more than 45% of the first nations, which is an increase of 300% of them, that are filling out their forms directly on the Internet. There is a lot of progress in collecting data. It took time, but we're getting there.

[Chandra Arya, Liberal, Nepean, ON]

But it's still 45% after so many years.

Once again, with respect to the funding and the announcement we have made, the Auditor General says that $42 million has been spent over just four years to prepare first nations to enter post-secondary education programs. Only 8% of those enrolled actually completed this preparatory program.

[Jean-François Tremblay]

Yes.