Public Accounts Committee on June 4th, 2024

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

That's where we fundamentally disagree. That's an assumption, Mr. Wernick. That's an assumption by Sir John A. Macdonald and the great minds with whom you seem to share your perspective that Parliament is supreme in these decisions, when, as a matter of fact, if it's a partnership that's nation-to-nation, why would Parliament have these kinds of ludicrous powers?

[Michael Wernick]

Are you suggesting that Parliament would cede all of its law-making powers and its power of the purse to approve the allocation—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I'm saying that it never had those powers.

[The Chair, Conservative, John Williamson]

I'm afraid that is the time.

Turning now to Mr. Stewart, you have the floor for five minutes, please.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you, Mr. Chair.

Mr. Wernick, I heard you talking about an idea that would place most of the housing programs under one roof. I believe you stated that you believed it would be possible that if you built one Crown corporation, it would in fact solve many of the problems that are faced by indigenous people today.

Obviously, you were deputy minister for a long time, and that didn't get done, so I'd like you to explain why that didn't get done when you were deputy minister and why, if it got done today, it would make a difference?

Thank you.

[Michael Wernick]

Deputy ministers don't get to change the structures of government; only Parliament does, so it would take a piece of legislation to create that Crown corporation. It is not about government control. As I said, it could be with substantial first nations governance. You could have a board of directors named by first nations people.

I just think it's a better model than the department pushing contribution agreements, which is what we've done for the last 50 years, with limited results.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Is it fair to say that you've shared that idea in your role as deputy minister with the current government, which has been in place for the past nine years?

[Michael Wernick]

I've had no contact with this government since I left five years ago.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Five years ago, but that's not my question. With all due respect, you were a deputy minister, and as a former minister in New Brunswick, I can tell you that deputy ministers have a wish list, sometimes 20 or 30 years long. They march them into your office as soon as you get there, knowing that you might be just a little bit green and naive and that you might bite the bullet on something they've been trying to get done for decades.

In the first four years of your being a deputy minister while this administration was in power, how did they sit with your Crown corporation idea? Who did you take it to? Who turned it down? Who was against it? Why?

[Michael Wernick]

I'm sorry. I was a deputy minister under the Harper government. All of my years were with Stephen Harper's government. My ministers were Jim Prentice, Chuck Strahl, John Duncan and Bernard Valcourt. We were busy with other things.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Okay, I'm going to stop you there. The reason I asked if it was Trudeau's government is because you said you hadn't spoken to this government in five years, so you're telling me you never once brought this Crown corporation idea to the current administration? That was actually my question.

[Michael Wernick]

No. In 2017, the government had already reached a political agreement with the Assembly of First Nations that led to the split of the department. The creation of a split department, with Indigenous Services on one side and Crown-Indigenous Relations and Northern Affairs Canada on the other, was something that the Assembly of First Nations had been promoting for quite a while. There had already been a political decision to make that change in 2017.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

I appreciate that, so do you believe that the Assembly of First Nations' idea was a poor idea?

[Michael Wernick]

I think that it's 2024 now, and it's worth taking a look, six or seven years later, after the split in the organization. I'm sure that it's accomplished some positive things. I think bringing health into Indigenous Services was a good idea, but it has its limitations, because it's still a department pushing the contribution-agreements model, and—

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

All right, thank you for that. It's my floor.

[Michael Wernick]

—the steps that Sheila Fraser put forward have not been met.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you for that once again.

I left the room for a moment, and as I came back in, I heard one of the MPs criticizing me for saying that the Indian Act brought both positives and negatives. If that Liberal MP represented first nations at the length I have, he would know something. Despite the imperfections of the Indian Act—and it was done in 1876 by Alexander MacKenzie, a Liberal prime minister—he would know damn well that first nations are scared to have that opened up, because they're scared of government always taking something from them.

It's not perfect, and don't criticize me if you don't know the file. You're better off shutting your mouth if you don't know anything about it.

Here's what I would say to you, Mr. Weiler—and listen closely. You're the government. If you want to get rid of the Indian Act, you open up and get rid of it. Let's see you do that. You have the power. You're the governing party. Let's see you finally change the name.

Look at the name of it even: “Indian Act”. It's 2024, and we still have that name, and you're over there criticizing? Talk to some first nations people and you'll realize there's a great fear in terms of what actually happens when that gets opened up in this country.

How much time do I have, Chair?

[The Chair, Conservative, John Williamson]

Fifteen seconds.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

That's all for me. I hope he will educate himself accordingly. Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much.

Turning now to Mrs. Shanahan, you have the floor for five minutes.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you, Chair.

It's interesting where we're going in this meeting, but it's a good exercise to look back at, I guess, the near past of the last 20 years and what could have been done and what should have been done but was ultimately not done.

Mr. Wernick, given your experience with both governments during that time, can you point to any particular time or decision that would have changed the trajectory of the outcomes for housing for first nations vis-à-vis how the federal government approached resolving this problem?

[Michael Wernick]

Casting my mind back, the one significant thing in the housing area was the First Nations Market Housing Fund, which was created by former minister Flaherty in the budget of, I believe, 2008. It might have been 2009—you could check on that. It was designed with first nations advice and input specifically to try to access capital markets and create something closer to market housing conditions as an experiment.

It's still there. You can google and look up the First Nations Market Housing Fund. They have made progress in some communities.

As I said, the First Nations Land Management Act is really important, because it gives communities complete control over land use, zoning and how the land in their communities is going to be used. Take-up of that has been really important. We tried to remove barriers to make that more accessible.

There was specific legislation passed by Parliament back then to allow the property development at Squamish Nation in British Columbia, using something called FNCIDA, which is an acronym for the First Nations Commercial and Industrial Development Act. That made the housing development in Squamish—which is still a work in progress—at least possible.

Workarounds and attempts to create paths out of the Indian Act and create better models have been introduced by every government over the last 40 years.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you for that.

I think that's what a number of members here found very interesting about the testimony that we heard from Chief Haymond in the last panel.

Chief Haymond testified that they were able to get a good portion of their capital to finance the institution through bond markets. I think there's something there. I think that's worthwhile exploring, because, as we all know, housing and land are assets, and assets have value that can be financed.

Indeed, looking at this from a social finance point of view and reinvesting in the communities, are these models that you're familiar with?

Are these things that came across the table when you were in office?

[Michael Wernick]

Absolutely.

Again, these are workarounds. There have been attempts in some communities to access this. The First Nations Finance Authority is an attempt to do that. There are attempts to use ministerial guarantees. You use the Crown as the backstop for the loan by a first nation.

It is the first nation that's doing the building, doing the contracting, hiring the architects and hiring the contractors and the firms. This is a real struggle—truth to power—because these are often small communities, small governments and small staff. These are hard things for the City of Montreal or the City of Lethbridge; it's very tough on a first nations community to deliver this.

Most communities will always need some kind of partner to work with, and, unless there's going to be a turning off of the tap of taxpayers' dollars, somebody has to manage the flow of taxpayers' dollars from Parliament to these communities, which is why I think we should try. If you just keep trying the same model and you're not getting better results, you should at least try a different approach.

The difference is that you're having a lively political debate about the cost of mortgages for young families in Canada. Underneath that is the assumption that almost everywhere in the world and everywhere else in Canada, housing and infrastructure is largely debt-financed. It's not cash up front. The only people who pay cash up front are Aboriginal Affairs, Indigenous Services and maybe the Saudi Arabians. Everybody else uses some form of debt financing to build assets with a long life. Infrastructure and housing would fit in that, including power grids, water, waste water, Internet connections and so on.

We did a lot that we could on a cash basis. We did a very innovative market finance deal in northern Ontario that you're probably familiar with, the Watay Power thing, which brought electricity to about 20 communities in northwestern Ontario. It will come online this fall, which I'm very pleased to see.

That's the direction to push in. It's not just pouring more money into the broken social housing model; it's trying to find ways to access private capital markets and get two to one, three to one or four to one leverage—whatever Parliament is able to provide.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Wernick.

I'm going to now begin our third round. I think I'm going to have truncated rounds of four minutes and two minutes.

Mr. Melillo, you have the floor for four minutes, please.