It is an excellent point, as my colleague says. The auditor general said that the department does not know how much money is being spent by the first nations on education because it gives block funding to the first nations, who then provide education. The department has the responsibility to provide that education money, but it does not know how much money is ending up in education. It may be ending up in welfare. It may be ending up in someone's pockets. It may be ending up somewhere else because the department does not know how much money is being spent on education.
The report covers a number of horrifying things. In paragraph 4.72 the auditor general writes:
We further observed in one departmental region that a master tuition agreement between the Department and the provincial Ministry of Education had expired in 1992—
This is the year 2000. That was eight years ago. The agreement had expired. No one had really bothered to do anything about it. They just wrote the cheques and carried on.
What about things such as special needs? We are concerned about special needs. However, the department does not know whether special needs students are being appropriately identified or assisted. Special needs students are those who are psychologically disadvantaged or who have learning disabilities. We agree with that, but because of the reported lack of diagnostic expertise on the reserves, the auditor general believes that the potential for under and over identification of these students is high.
In addition, the department does not know whether all funding provided for diagnostic and remedial services is actually used for this purpose. The department does not know. In one region this amounts to $581 per student. Take note of the $581, per student year, for all students. Furthermore, the department does not know the length of time the students are maintained in special needs status. This makes it more difficult to identify opportunities for improved services in another region, where costs range from $2,047—remember that I said it was $581 in one region, and now it is up to $2,047 in another region—to $65,650 per special needs student, and there is no process or mechanism to ensure that the students' needs are being served.
I have a problem with these kinds of numbers. In one region special needs students are getting $581 and in another region they are getting $65,650 per student. Should we not be asking the question, what is going on? There was no process or mechanism to ensure that the students' needs were being served.
The Minister of Finance collects taxes and he gives the money to the Minister of Indian Affairs and Northern Development, and the minister does not have a clue about what is going on in his department. We know what happens with the minister of HRDC. We have said many times in the House that she does not have a clue, and now the Minister of Indian Affairs and Northern Development obviously does not have a clue.
What about the lack of education funding agreements? I mentioned one region that did not even have one. In one region they noted 244 instances where they expected to find agreements between first nations or the department and provincial educational authorities to cover student enrolment in provincial schools. However, the department was able to identify agreements in only 58 cases. There were 244 instances where they expected to find them, but they only found them in 58 cases. Further, the department did not know whether any agreement was in force in 128 cases, and determined that no agreements existed for the remaining 58.
What is going on, Mr. Speaker? Do you not think we are entitled to ask legitimate questions about what is going on? Does the department know what is going on? Or, should it just admit that it does not know what is going on?
Our first nations are at the bottom of the economic and social ladder in the country. We surely have some obligation to help them take their place in the economic society we have built and to provide some prosperity for them.
Native people watch the television ads which sell everything from soup to nuts, cars, TVs, television programs and so on, but they cannot have those things. All they have is a welfare cheque that we hand out because they do not have the education required to take a job, which would provide meaning in their life, which would provide purpose in their life, which would motivate them and give them the ability to understand this complex world. If they could acquire that education they could work with computers, such as we have in front of us. Native people cannot do that. The department does not even know if they are going to school.
Paragraph 4.2 of the auditor general's report indicates that the percentage of natives who are not enrolled in elementary or secondary schools is 20%. The figure is not available for all Canadians. The dropout rate before completion of grade 9 in native schools is 18%. The figure for all Canadians is 3%. The percentage of youth between the ages of 18 and 20 who left school totals 40% for natives, 16% for all Canadians. Of youth between the ages of 18 and 20, only 30% of natives graduated from school, compared to 63% for all Canadians. The population with the least high school education amounts to 37% on reserve and 65% for all Canadians. Only 30% of the native population graduates from high school and it costs taxpayers $1 billion a year. Only 30% succeed in meeting the basic fundamental requirements.
The minister does not have agreements with the school boards. The minister gives block funding to the bands and does not ask them to account for the money. Agreements expire and he does not follow up on them. Kids are dropping out of school and he does not know how many. The department is a disgrace.
The Minister of Finance stood in the House on February 28 and said that the government was going to tax Canadians. The government continues to tax Canadians so that money can be given to the Minister of Indian Affairs and Northern Development, who in turn does not know what he does with it. He has no clue. Unfortunately, he is not the only one.
In the news the last couple of days we have heard much about the scientific research tax credit. The idea was to motivate Canadian companies to do research and development, and a tax credit would be provided to them because this was good for Canada. It was good for Canada. We got an extra $50 million punch out of it. The bad news is, it cost $2 billion to get the $50 million punch. For every $40 spent, we received $1 back. Where is the logic?
I do not know where the logic is, but I do know that in 1997 the Minister of Finance had an evaluation in front of him, telling him that for every $40 spent the government would receive $1 in return. The minister kept the study under wraps. In 1997, 1998, 1999 and again in 2000 he stood in the House and said “We are providing value for money for Canadians”. In the meantime, for every $40 the taxpayers put into this program, they got $1 back. I cannot understand it.
How bad is it? Let us take one particular claim as an example. It was a complex claim. Why? The taxpayer did not provide a lot of documentation to say what he was trying to do.
Revenue Canada sent in the auditors who spent 10,000 hours looking at this claim. The average person works about 1,700 or 1,800 hours a year; throw in some overtime and call it 2,000 hours a year. That was five years of auditors' time on one claim. There are 16,000 to approve. When are they going to finish? They spent 10,000 hours on one claim.
They had to get some scientific expert advice. They spent $300,000 of taxpayers' money to get a professional opinion on this claim because it was not well justified. The claim finally went through process. They said that the particular claim was entitled to tens of millions of dollars. We are not sure how many tens there were. Presumably somewhere between $20 million and $100 million is what was paid out. In the final review they scratched out the millions and doubled it for no particular reason.
Let us look at the rationale. This is how crazy the rules are and how the taxpayer gets taken to the cleaners.
The subcontractor did the research and development. He put in his claim and got his refund of tens of millions of dollars. It was in the bank. He sold the R and D to the main contractor who said “This is research and development done in Canada, send in the claim”. He got it again. The rules allowed him to get it again. The reason it was doubled was it had to approximate the claim by the general contractor.
Even though the subcontractor was audited and all the information in its own files said that the subcontractor was entitled to so much money, the main contractor had approximated and exaggerated the claim. It was “unable” to verify that because the main contractor did not have the files. They were in the subcontractor's office which had been audited by Revenue Canada but Revenue Canada said it could not look at the file a second time. Knowing full well it was paying out too much, it had to go with the main contractor's estimate and exaggeration.
The taxpayer paid and the Minister of Finance did not even blush when he stood in the House and said he needed $165 billion to run this country. I know and members know he could do it with a lot less.