Public Accounts Committee on April 27th, 2026

[Michelle Kovacevic]

I suppose that question is directed at me, isn't it?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Yes, it is.

[Michelle Kovacevic]

Thank you for the question.

I would say two things.

First, we are transparent about all the funds we spend. Our audited financial statements are available on our website. You can clearly see the expenses and determine, for example, whether the funds were spent wisely or if there are any surpluses.

Furthermore, I completely agree with you, Mr. Lemire. We must focus on the most vulnerable, smallest and most isolated communities, because it is harder for them to access services. Moreover, the risks are enormous.

I believe we have already begun to gradually adjust our approach to spending. Instead of using a generic form—that is, a form that specifies exactly where various funds must be spent—we are focusing on isolated communities. We are allocating additional funds for factors such as the remote location of certain communities, because we recognize the importance of strengthening the capacity to provide the necessary services to these communities.

I don't have the answer, but I do believe we have to start somewhere. We have to acknowledge that there are risks, especially for small communities. We need to work with indigenous peoples, including first nations, to determine what communities need in order to meet expectations.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Despite two decades of audits, access to clean drinking water remains a problem. The government has invested $6.3 billion so far, but let's look at what the 2025 budget says. That's where the numbers speak loudest. We are in a situation where the urgency is recognized. We are in a situation where I myself collaborated with the current Minister of Employment and Families, when she was Minister of Indigenous Services, to draft a bill on access to clean drinking water. There was broad consensus on that bill. It would have been easy to reintroduce it in this Parliament. The Prime Minister promised that the government would introduce a bill on drinking water this spring. Obviously, nothing has been tabled yet. What we see is that there is zero funding for 2025–26. The $2.3 billion in funding will not begin until next year.

Will the government finally take action to honour the Prime Minister's promise, or is a Liberal Prime Minister's word worth nothing?

[Michelle Kovacevic]

In budget 2025, as you said, we announced $2.3 billion. I believe it starts next year because we already have enough money for this year. I think that's great because we can continue our efforts. We've already had some successes. We may not have targeted the funds perfectly, but still, there have been some successes.

As for the bill, I am not the government. I am the deputy minister. All I can say is that the Prime Minister has announced that the government intends to introduce a bill on drinking water this spring.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Meegwetch.

[The Chair, Conservative, John Williamson]

Thank you very much.

We're beginning our second round, which will consist of five members with various times.

Mr. Deltell, the floor is yours.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Thank you very much, Mr. Chair.

Good morning, colleagues.

Ladies and gentlemen, welcome to your Canadian Parliament and to the Standing Committee on Public Accounts.

I cannot say enough how proud I am to have the Wendake indigenous community in my riding. I have had the good fortune and privilege to represent the Wendat for nearly 18 years. I first did so at the National Assembly and now I represent them here.

When people talk about the first nations, often it is with a very condescending tone. They are very sensitive to the concerns of the first nations. They are always full of good intentions, and they love to talk about lofty principles, but the results are not there. If we had to find a prime example of how, over the past 10 years, the Liberals have been all talk and no action, we could unfortunately point to the issue of the first nations. Let us recall what the government said 10 years ago. There is no relationship more important than the one with first nations. Here we are, 10 years later, in a situation where we have nearly doubled the budget without achieving meaningful results for first nations.

According to the Auditor General's report, Indigenous Services Canada's spending increased by 84%, rising from $13 billion in 2019–20 to $24 billion in 2023–24. Despite these funding increases, the Office of the Auditor General found that overall results still left much to be desired.

I just want to point out that we're talking about $24 billion here. That's a lot of money. Sometimes it seems like they have lost their sense of scale. We all remember the famous $16 glass of orange juice. Here, we're talking about $24 billion, and the results aren't there.

Deputy Minister, how do you explain that?

[Michelle Kovacevic]

It's the same answer I gave earlier. There have been successes, but they may be coming about more slowly than we'd like.

I agree with the Auditor General's findings. We need to change our relationship with indigenous peoples so that we can find solutions together. Furthermore, we need to better organize our approach and better focus our efforts to achieve results more effectively and more quickly.

There are successes, though. It's just that it takes an effort to get there.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

Madam Deputy Minister, first of all, I would like to thank you very much for your excellent French.

However, my congratulations end there, because you are simply repeating the same refrain of the past 10 years, namely, that it is time to take action, that the situation needs to be improved, and that you are working hard. Less than two minutes ago, you said that you would soon have a bill on drinking water. It is 2026 and there are first nations that do not have safe drinking water.

Let's not forget that 10 years ago, the guy from Papineau who was Prime Minister kept lamenting the situation, stressing how important it was to him. He said it made no sense that a G7 country wasn't capable of providing water to the first nations. Now, 10 years later, you're saying the same things all over again.

Why isn't this working?

[Michelle Kovacevic]

Would you like an answer?

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

I think so. In fact, it's not so much me who wants an answer as it is Canadian taxpayers, who have just contributed $24 billion of their tax dollars to first nations. I don't know anyone in Canada who is against first nations. We all want to help them. We all want to be partners in prosperity. However, after $24 billion and 10 years of talk and rhetoric, the tangible results aren't there. Why?

[Michelle Kovacevic]

I don't want to repeat what I've already said. I know it's frustrating. That said, we need to put plans in place that we will develop together with first nations. We need to look at what has proven effective and what works in remote communities. We need to change the way we approach issues like these.

When it comes to the $24 billion in spending, we need to remain transparent so we can show the public how we allocated the funds and what we've accomplished. Even if the results aren't quite what we'd hoped for, there are still results. We will continue to try to improve things and remain transparent about what we are doing.

[Gérard Deltell, Conservative, Louis-Saint-Laurent—Akiawenhrahk, QC]

I think I've said all I have to say about the rhetoric of the past 10 years, which you keep repeating. That's unfortunate, Ms. Kovacevic.

There's something else I'd like to mention. Earlier, you talked about the siloed approach, the fact that people don't talk to one another.

In fact, my question is more for Ms. Hogan.

How is it that, with spending to the tune of $24 billion, people are unable to communicate with one another? How is it that we have such a siloed approach, where the right hand doesn't know what the left hand is doing, and the man on the right doesn't talk to the woman on the left, who is doing other things? How is it that people work in isolation when they're spending $24 billion in tax dollars?

[Karen Hogan]

In my opinion, the problem isn't that people within the department don't communicate with one another or aren't aware of what the other side is doing. Rather, the problem is the siloed approach that's taken when it comes to providing first nations with access to funding or engaging in discussions.

For example, there is one group that handles one type of service and another group that handles a different type of service. If someone is seeking funding for drinking water infrastructure, they have to contact that team to submit an application. However, if it involves a school or a different type of infrastructure, they will most likely need to contact a different team, since it falls under a different program.

It is this siloed approach that makes things very difficult. We often hear this feedback from indigenous communities. The process is cumbersome and time-consuming for them. They need more support from the department to access funding.

[The Chair, Conservative, John Williamson]

Thank you very much.

Up next is Ms. Tesser Derksen.

Go ahead, please, for five minutes.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Thanks very much, Mr. Chair.

Thanks to our guests today.

I think you can sense some frustration, and I'm sure those working in the department are frustrated as well. I have no doubt that your jobs would be much easier if we could solve this problem, particularly with respect to what my colleague said about the drinking water advisories.

I was in Calgary in June 2024 for the Federation of Canadian Municipalities conference when I was a municipal councillor. We heard the previous prime minister speak, and he was asked questions from the floor about drinking water advisories, so it has been an ongoing conversation. Conversation is great, but we need results, of course.

I'd like to ask about how the advisories work, because I think there might be a perception that when there's an advisory, it gets solved, it gets taken off the list and we're one down, and then we keep chugging along until we're at zero. In fact, my understanding is that new advisories can pop up depending on what the situation might be in a particular community. It might be that you get a step ahead, but then you take a step or two backward in another first nations community.

Could I ask the department to comment on how that tends to play out?

[Michelle Kovacevic]

I will start and then flip it over to Mr. Bergeron, who knows that kind of detail better than I, for sure.

I would remind members that a long-term drinking water advisory is something that's been in place for a year, while a short-term one is less than that. You're quite right that it's dynamic. Things lift every single day. There's a sitrep; we'll lift one here and then we'll have a new one there.

Right now, on the long-term drinking water advisories, of which there are about 40, about half of those are related to infrastructure issues: There's a deficiency in the infrastructure in the water system capital itself that needs to be improved. The other half of the advisories are more related to operations. For example, the person monitoring the water has left the job, and there's a hole, so something goes wrong in testing.

They're very different in terms of why these reasons come up.

I'll pause there in the interest of time and ask Curtis to add some more.

[Curtis Bergeron, Director, Strategic Water Management Directorate, Department of Indigenous Services]

It's a continuous evolution of supports towards infrastructure and, as the deputy mentioned, operations and maintenance funding. We are seeing results: 97% of water systems are producing water that meets Health Canada guidelines, which is good.

As you mentioned, once an advisory is lifted, the support does not stop there. Our regional offices continue to provide supports both for infrastructure and for capacity, and they work with every community to make sure that long-term, sustainable solutions are in place.

Sometimes there are interim solutions that get put in place so community members can have access to water quickly. At the same time, the plan, the funding and actions are in place for those long-term solutions.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

Okay.

Can we talk about the increase in funding that has not necessarily borne the positive results one would hope for that amount of money?

With respect to infrastructure in the drinking water advisories in particular, how important is funding versus, or together with, the dialogue we have with the first nations communities themselves about monitoring? I understand they are responsible for actually deciding whether or not the advisory should be lifted in conjunction with Health Canada standards.

We have the funding on one side, and we have the actual standards on the other.

[Michelle Kovacevic]

That's super important.

On the idea of standards, obviously you need something to compare to and something to strive for to hold people to account in the overall system. That's clear.

Funding is important. Who am I to say, “Oh no, we don't need funding”? Of course we need funding. For example, the $2.3 billion that the government announced in budget 2025 will enable Indigenous Services Canada to continue with 800 projects to fix deficiencies in infrastructure or to build new and add about 250 more projects.

Funding is important when you clearly just need capital money. You need the system to be there, and you need that asset to be up to snuff, for sure.

You're quite right that it's not just funding. It is the education. It is understanding. It is the willingness. It is making sure that there are capacity supports in place, including when you have to recognize risk, to ensure there's succession planning behind you. If you know you're moving on as a worker, it's about wages. How much are nations paying folks to do these kinds of jobs? Is it a viable line of work?

There are all kinds of exogenous factors that are important. That's why, as you said, the dialogue is certainly clear with our partners to ensure the funding for any support we may give actually leads to solutions and outcomes, hopefully more so than what we're seeing today, although there have been some pretty significant examples of progress.

[Kristina Tesser Derksen, Liberal, Milton East—Halton Hills South, ON]

I was talking about different first nations communities having different needs, and I want to talk about one of the barriers that the Auditor General mentioned in her report, particularly the passive and siloed approach to supporting first nations.

I understand the report found that the application-based support models tend to favour communities with greater administrative capacity—in fact, you mentioned this in your previous answer to my colleague—and this unintentionally reinforces existing disparities.

I think it's important that we ask you what steps you're taking at Indigenous Services Canada to level that playing field. Equity is very important between the different groups and communities that might be remote, might have more administrative challenges or might lack different resources in administration. In fact, Ms. Hogan said we have to meet them where they are and not presume that there is a standard level of administrative capacity or sophistication.

How do we tailor that approach given the different communities we might be encountering?

[Michelle Kovacevic]

There are probably a lot of answers to that, but maybe I will draw on our experience with child and family services for first nations. There are some pieces of work there that are very important.

If we talk about the increase in expenditures over the last decade at Indigenous Services Canada, one area that had tremendous growth was first nations child and family services. In 2015-16, our budget was not even $700 million, although that's a lot too. This year, it will be around $4 billion annually. Why is that? Mind you, we are under the jurisdiction of the Human Rights Tribunal. Nonetheless, the funding Canada is investing in first nations child and family services now has prevention at the forefront, and there's a per capita set amount for all kids, irrespective.... Right there, we know we have a protected amount of money per child for prevention.

Much of the programming going out to either first nations or FNCF child welfare agencies is actual-actual cost. Whether you're a small agency or a large agency—obviously, the small agencies have economies of scale issues and whatnot, so it costs more—we pay the rightful cost you need. It's not a formula-based approach, which would likely shortchange the small communities.

There are also services that have a remoteness quotient. If you're a smaller community or agency working in the north of a province or territory, for example, there's an additional sum of money plus additional supports so you can deliver those services for your children.

All of this is to say that it's changing the way we fund. It's changing the way we have that conversation about what folks are supposed to do with that money and what kinds of results we're going to see.

I'm not sure if that answers your question, but it shows that there are some best practices in place right now that we can look to as we try to change, going forward.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Lemire, you have three minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Ms. Kovacevic, you've heard me speak many times about the importance of having programs that are developed by and for first nations. The Yänonhchia’ initiative is an excellent example of this.

However, even today, we are still discussing housing strategies for indigenous peoples in urban, rural and northern areas. In total, a combined $8 billion was announced in budgets 2022 and 2023, but, in reality, the money often stays in the coffers.

These initiatives developed by first nations can also generate expertise and knowledge that can be transferred to other communities. This can lead to sustainable self-governance by first nations, enabling first nations members—despite the Indian Act—to feel a sense of ownership over their homes.

I see nothing but benefits in these initiatives compared to current strategies, which, as we can see, still place first nations under guardianship.

Will you provide Yänonhchia' with the requested funding? Could we get a commitment from you to that effect?