Mr. Speaker, for the sake of all of us, and for our listening audience, I want to do a quick review of what the first nations fiscal and statistical management act is all about.
The act creates four institutions: the first nations financial authority; the first nations financial management board; the first nations statistical institute; and the first nations tax commission.
The finance authority, known as FNFA, would issue bonds and provide low interest, long term debt financing for capital projects by collectively guaranteeing the credit worthiness of participating members. The majority of first nations bands will not be able to meet the FNFA membership criteria. For those few bands who qualify to be participants, they must use FNFA financing, even if a more competitive rate were available.
It is also noteworthy that the FNFA is not actually expected to break even until the year 2010. There is no indication to this point as to how much it will cost to set it up and operate it. That is always a concern to members of all parties and especially to those on the opposition side when we have seen the billion dollar boondoggles and a gun registry with escalating costs. Therefore, when these bills come up with no dollar figures in terms of what is required to fund it, we obviously have concerns.
It is likely that members who participate in the FNFA will not be eligible for funding from INAC or infrastructure programs. That is a bit of a concern obviously. The financial management board would provide financial services to first nations and also issue certificates to members that qualify to participate in the FNFA.
Although the priority of the first nations financial management board would be to develop and provide services to first nations and to issue these certificates, its real priority would be that of developing financial management standards to support a comprehensive system of accountability. The FMB, the financial management board, has failed to provide its operating budget estimate. Again, we are left in the dark on the costs.
At present, the Department of Indian Affairs provides professional financial services to band councils. With implementation of the FMB, those services will no longer be required and therefore INAC should save some expenditures by way of that.
The first nations statistical institute would gather and analyze data specific to first nations communities. In the very first three years alone, the FNSI is expected to cost some $13 million. It simply duplicates the services that are already provided by Statistics Canada. Too much of this goes on within government bureaucracy. They overlap and compete in claims in terms of information provided and so on. We do not think that is a good thing in this case either.
The Canadian Alliance does not support allocating resources that create a separate race based institution and we think there is some duplicity in creating this institution.
By creating the FNSI for gathering of statistics, the government is diverting resources that could address some of the other urgent priority needs of first nations populations across the country. There are health and educational needs. In fact, we were in committee this morning and heard how bands were taking resources and diverting them into other areas, away from education. Maybe that is because of the limited resources, at least that would be the explanation of some. We know education is foundational and basic. It is the biggest and most important priority in terms of the development of capacity within first nations communities. Therefore we are not okay with the diversion of funds off into other areas by way of creation of this duplicating body called the FNSI.
The act also proposes to create a taxation oversight body, known as the first nations tax commission, that would grant bands approval to enact property tax systems on reserves.
The FNTC would replace what is currently known as the Indian Tax Advisory Board which has been in operation since 1989. The FNTC would be comprised of six first nations commissioners, three non-native commissioners and a head commissioner. As it is with the FMB and the FNFA, again there is no indication as to what the costs will be for this body or how it will be funded. It concerns us that for three of the bodies thus far there has been no indication of the costs or how they will be funded.
The cost of the first nations tax commission should be maintained by its members. The Canadian Alliance supports efforts that will sustain the economic viability of first nations through the generation of own source revenue. We want to see more of that. Surely, when people generate more of their own revenues, greater accountability sets in and greater answerability is required.
The bill under discussion today would provide limited benefits to a small number of first nations communities at what we think will be a rather substantial cost because a lot of detail has not been provided to us. Our only surmise is that this will be a rather costly kind of proposition.
The bill would authorize first nations communities to tax, borrow and gather data at the expense of other priorities. I know firsthand from reserves in my province and in my constituency that those priorities are health, education and social services.
It is fair to say that infrastructure conditions on reserves are really deplorable. First nations leaders and grassroots members will agree with that. It is wonderful to see that there are exceptions but, regrettably, some reserves have third world conditions which must be addressed as part of INACs approach to economic development.
Supporters of the bill defend, in particular, the first nations finance authority bond issuing scheme by comparing it to the province of British Columbia's successful financial administration act which allows municipalities to collectively guarantee one another's credit worthiness. That would be done among bands, so to speak.
However there is a crucial difference, in that cities can guarantee their bonds with hard collateral assets, whereas section 89 of the Indian Act prohibits bands from leveraging their hard assets as collateral. It is banned, forbidden, verboten. There is a problem with this. It is not a fair comparison at all. It is not analogous to B.C.'s successful financial administration act.
Bonds would receive an investment grade ranking, not because credit agencies have faith in the self-generated earnings of Indian bands, but rather because they have faith in the continued transfers from the government. That is a somewhat depressing thought. We believe that bands should, over a course of time, be able to generate enough earnings on their own.
In order to become borrowing participants in the first nations finance authority, bands would need to meet certain financial criteria. Very few bands across the country are able to fulfill those requirements. The ones that can will already be in a competitive financial position. Bill C-19 does not really help the vast majority of bands in Canada.
The first nations statistical institute would duplicate the work already done by INAC and Stats Canada. Taxpayers should not be expected to fund yet a third set of conflicting and competing data. The primary object of creating FNSI was to provide the necessary data to help formulate first nations community policies. However, rather than creating an entirely new and duplicitous agency, the same objective could be achieved by increasing the accessibility, the accuracy and the transparency of some of the existing data being provided by the other body.
By creating this agency, the Liberals would be once again creating separate race based institutions that fail to provide relief to community members who need it most. For these and other reasons stated today, we cannot be supportive of the legislation. We do not think it is the way to go at this time.