Public Accounts Committee on June 4th, 2024

[The Chair, Conservative, John Williamson]

If you could keep it brief, I'll allow one more brief question, Mr. Desjarlais,

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Oh, sure.

I have no further questions, but I do want to thank all the witnesses for this important work. It was a difficult process to get this meeting called, and I want to just thank all my colleagues, including our chair, for allowing me the opportunity to have this important study investigating this.

Special thanks go to the grand chief of the treaty territory I occupy in Alberta. It means a lot to me that you were available for this.

Thank you very much.

[The Chair, Conservative, John Williamson]

You are very welcome.

I want to thank Grand Chief Thomas, Chief Haymond, Chief Mitchell and Chief Peters for their testimony and participation today in relation to the study of “Report 2: Housing in First Nations Communities”. If you have additional comments that you'd like to make to the committee, please do so through the clerk. We'll, of course, consider it, as we will your testimony today.

I'm going to now suspend this meeting for about five minutes to give everyone a chance to stretch their legs. Then, we'll come back with our next witness.

This meeting is suspended for five minutes.

[The Chair, Conservative, John Williamson]

Welcome back.

Pursuant to Standing Order 108(3)(g), the committee is resuming consideration of report 2 of the 2024 reports of the Auditor General of Canada, entitled “Housing in First Nations Communities”, and referred to the committee on Tuesday, March 19, 2024.

I'd like to welcome our witness, who is joining us virtually. Mr. Michael Wernick is the Jarislowsky Chair in Public Sector Management at the University of Ottawa.

Mr. Wernick has indicated that he has no opening remarks, so we're going to proceed to questions here.

I will note that, of course, Mr. Wernick is a former deputy minister of Aboriginal Affairs and Northern Development and also served as Clerk of the Privy Council.

Mr. Wernick, we thought you would be an ideal witness to come in to talk about this issue. I'm sure you are well aware, from the Auditor General's reports, that this is an issue that has dogged several governments over many, many years. We're looking for your insight on why that might be and for suggestions or clues on reforms that might provide some solutions and insight.

[Michael Wernick, Jarislowsky Chair in Public Sector Management, University of Ottawa, As an Individual]

Thank you, Mr. Chair.

I'll just thank you for the invitation and say that the only reason I didn't prepare a statement was that I wanted to maximize the time for dialogue with the committee. This is my sixth appearance at a House of Commons committee since I retired from the public service. I'm always happy to help a parliamentary committee with its important work.

[The Chair, Conservative, John Williamson]

And we appreciate that. Thank you very much.

I'm going to now turn things over to Mr. Nater.

You'll have the floor for six minutes, please.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you, Mr. Chair.

Chair, through you, thank you to Mr. Wernick for joining us virtually here this afternoon on the Auditor General's report.

Obviously, from your experience, we're looking at about a decade and a half, give or take, between the Privy Council Office and as deputy minister at what was then Aboriginal and Northern Development Canada. I want to start to focus first around your time as Clerk of the Privy Council and a phrase that became popular in government, “deliverology”.

At the time, I think there were many of us who saw deliverology as a bit of a tagline that really didn't amount to much. With the benefit of hindsight always there, there was an article in The Globe and Mail from March 2020 that said, “To anyone who has worked in government, the whole concept of ‘deliverology’ smacked of warmed-over administration theory repackaged by former bureaucrats-turned-consultants seeking to monetize their insider knowledge of the public service.”

That, I suspect, may describe Mr. Matthew Mendelsohn, who took the lead on this within government.

Obviously, Mr. Mendelsohn was the guy who drafted the Liberal Party platform in 2015 and then was brought into the Privy Council Office. Personally, I think it is of concern from a partisanship perspective to bring in an individual with clear ties to the governing party, but I will leave that there and focus specifically on the concept of deliverology for this time period.

At one point, there was a mandate letter tracking of the commitment specifically to indigenous people related to that. When the tracker was abandoned, about half were incomplete, but you were a strong supporter of this idea of deliverology. One quotation I saw was in this article from the CBC, which quoted you as saying, “You should try to find ways to measure whether or not you're succeeding. It's a very good discipline, I think, and it will lead to better government.”

Also, in a speech you gave in October 2018, you said, “There is a lot at stake in getting this right. Trust is also going to be stress-tested in an election year where there is plenty of space for us to be communicating with Canadians about policy, legislation, and programs and services. The basic tenets of deliverology are at the core.”

I know this is a long preamble, but I'm getting to it.

I want to turn specifically to deliverology as it relates to Indigenous and Northern Affairs Canada. In a 2017 internal audit report from Indigenous and Northern Affairs Canada, they wrote, “Senior Management has taken steps to support a transition to the Policy on Results and 'Deliverology', recognizing the transition presents a unique opportunity for INAC to improve performance measurement effectiveness and to support a performance measurement culture in the Department.”

All of this lengthy preamble has been to say, would you agree that deliverology has failed in this case to actually see results, specifically on first nations housing? All this focus on deliverology, all this focus on finding results, seems to have all been lip service, seems to have all been talk, when in reality nothing was achieved. When we're focused on a comment like this from Indigenous and Northern Affairs Canada, making this transition, but then seeing results after results after results in 20 years—we're talking 20 years and no results on first nations housing—wouldn't you say this was, in a sense, a lost three or four years, in which we focused on deliverology but didn't actually achieve anything?

I'll turn to you for a comment after my lengthy preamble.

[Michael Wernick]

I think I would stand by my comments. Certainly in terms of accountability to Parliament, it's very important to define the objectives you're trying to achieve and then try to figure out how to measure them, and then organize your data collection and your reporting and accountability mechanisms around that. If that methodology wasn't the right one, then you should still be seeking that kind of learning software in the way the state operates.

I would say the lesson of the last 20 years is that pouring money into issues without structural reform will not really change fundamental trajectories. I joined Indian Affairs in 2006, and after nine years of the Harper government and nine years of the Trudeau government, my biggest disappointment is that the Indian Act is still there. I would hope you would all make a commitment that the next parliament, the 45th Parliament, is the parliament that repeals the Indian Act. That is one of the fundamental issues that's obstructing progress on first nations communities.

I'd be happy to go into the specifics of the obstacles to first nations housing on reserve, if you would prefer, but I think my message to you is that you cannot get the results you're looking for with the legislation and the structures of government we have in place now. Now is the time for deep, profound structural reform.

[John Nater, Conservative, Perth—Wellington, ON]

I'll get back to the concept of structural reform in a future round.

In the 30 seconds I have left, I want to know if you have a recollection of the mould strategy that was originally brought forward in 2008. At some point after that, it stopped being used. When we questioned the department, they seemed to have no recollection of when, why or through what means that stopped.

Do you have a recollection of why the 2008 mould strategy came into disuse at some point post 2013?

Do you have any recollection on that?

[Michael Wernick]

No, I'm afraid I have no line of sight on why that would have happened. I think it leads to the issue of enforceable building codes, which perhaps we can come back to.

[The Chair, Conservative, John Williamson]

Thank you.

That is your time, Mr. Nater.

Following Mr. Nater, we have Ms. Khalid for six minutes, please.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you very much, Chair.

Thank you, Mr. Wernick. We meet again after many years and in similarly hot circumstances, I would say.

I'm quite intrigued by your track record of working with different governments, etc. I really want to talk about housing and how climate change impacts indigenous communities, specifically with respect to housing.

Perhaps you can help guide us, given your vast experience on this.

What were the biggest challenges in addressing the first nations housing gap when you were the deputy minister responsible?

Do you think those issues are still alive and well today? What can we do to eradicate them?

[Michael Wernick]

I think the fundamentals underlying this issue are the same ones my predecessors had. They are the same ones that my successors have. The fundamentals are broken. Until Parliament gets around to changing legislation and structures, the department is pedalling into the wind, trying to get results with a very poor tool kit.

If you go through a few of them, I mean, for the on-reserve population, which is about half of Canadian indigenous people, the setup is communal land tenure and social housing. It's what some people have called socialist economics and socialist outcomes, but I won't get political there.

Because of the Indian Act, everything is a workaround. It's a workaround land registry. It's a workaround for mortgages, which you heard about, because you can't put up the same kind of security for mortgages. It's a workaround for secure tenure, which is called certificates of possession. There's almost no private insurance market. There's almost no private sector that builds and manages properties. There's very little multiple-unit housing. It's almost all single-family dwellings. There's almost no tapping into the capital markets.

You know, my truth to power message to you and to the Auditor General is that there will never be enough taxpayer money to get where you want to go. You have to tap into capital markets, like the rest of Canadians.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Mr. Wernick, do you think we have made progress over these past eight years on this file?

[Michael Wernick]

I read the Auditor General's report. I think she's kind of mixing up stock and flow a little bit. The graphs she chose to present are eye-catching, but they're percentages.

My understanding, and you can certainly correct me, is that they're percentages of a growing stock. This is what I mean by pedalling into the wind. You are chasing a rising population and you are chasing rising costs.

The unit cost of each dwelling is going up. It's a market that faces exactly the same issues that you do in your constituency. There's a shortage of skilled trade workers. The cost of input is going up. You get fewer units of housing for the dollars that are allocated by the finance minister, which is why you're going to have to lever taxpayers' money to get access to capital markets.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you for saying that.

Do you think that climate change has impacted the cost of housing? If so, how so?

[Michael Wernick]

It's affected everybody's cost of housing, certainly in terms of energy inputs, the cost of building materials and that sort of thing. I think it would be just as it is with other Canadians.

It'll depend a bit where you live. There's kind of an assumption that all first nations communities are remote and in the north, but the largest communities are places like Six Nations, Akwesasne and Kahnawake near Montreal, and so on. There are issues around floods and fires facing first nations communities, just as there are in other communities.

One of the big legislative gaps that you could do something about is that there are no enforceable fire codes on reserve. That could be fixed.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

That's a really good point.

I would ask you, then, are there any innovative first nations-led projects that you think the government should be looking at to make sure we are addressing all these challenges?

[Michael Wernick]

I think that's more for the policy committees, the aboriginal affairs committees of the House and the Senate. I left 10 years ago, so I'm not completely up to speed, but I know that many communities have very entrepreneurial chiefs and councils. I think you heard from some of them earlier today, as I understand it. They are doing their best with workarounds. They are trying to find ways to have proxies for mortgages and proxies for rental schemes and proxies for user charges and so on. They're all workarounds, because the fundamentals are unsound.

The three biggest workarounds that Parliament gave first nations are the First Nations Market Housing Fund, which I think you should take a look at; the First Nations Finance Authority, which is a small outfit that does start getting into bond and debenture issues; and the First Nations Land Management Act, which is a way to get out of the Indian Act and take control over zoning and local land use.

None of those are used by a majority of first nations. They're “opt in”, not mandatory. They're a path out of the Indian Act, but almost 30 years later the take-up is disappointing.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you so very much, Mr. Wernick, for all your service over the majority of your life and also for being here today. I really appreciate what you've had to contribute.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you, Ms. Khalid.

Ms. Sinclair‑Desgagnés, you have the floor for six minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

Mr. Wernick, you were Deputy Minister of Aboriginal and Northern Affairs Canada from May 2006 to July 2014. This Auditor General's report, as well as previous reports, demonstrated that there had been very little, if any, improvement in housing in indigenous communities during your time as deputy minister.

You then served as Clerk of the Privy Council from 2016 to 2019. The Auditor General's report that has just been published and is being studied today indicates that there has been very little improvement, if not a deterioration, in the housing situation. Let's think in particular of those that were in need of major repairs.

Yet billions of dollars have been invested.

You were Clerk of the Privy Council. Don't you think there are some important lessons to be learned, by this committee and others, about what needs to be done today to solve this problem? This one probably stems, once again, from an error in the federal government's approach or vision of indigenous people.

[Michael Wernick]

Back when I was the deputy minister of this department, it was organized differently. Now it's two separate departments. Jim Flaherty was Minister of Finance then, and the budgets I had were about a third of what they are now.

I think one of the lessons of the last decade is that this government has almost tripled spending on services for indigenous communities. Yet improvements are very slow in coming. This suggests that something is missing, and that far-reaching structural reform is needed.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Yet you were one of the people who didn't believe that the Indian Act—just using that name horrifies me—needed to be changed.

Don't you think we should simply get rid of this law and that it should no longer exist?

What do you recommend so that we see change?

[Michael Wernick]

At the time, the conditions weren't in place. They still weren't when the important Crown-First Nations meeting was held in January 2012. Indigenous politicians were not in favour of taking this step.

We're now in 2024, and I'm absolutely in favour of such a move. The time is right. I believe that after the next election, the elected government will be able to pass a bill simply stipulating that over the next 10 years, the Indian Act will be withdrawn.

I want to be very clear on that. There's no reason the next Parliament, after the next election, could not pass a bill—you're the only people who get to legislate—that says 10 years from coming into force, the Indian Act is repealed. That would force everybody into a decade of hard work on the exit strategy.