House of Commons Hansard #28 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was environment.


Department of Canadian Heritage ActGovernment Orders

12:35 p.m.

Some hon. members


(Bill C-20. On the Order. Government Orders:)

November 2, 2004--The Minister of Indian Affairs and Northern Development--Second reading and reference to the Standing Committee on Aboriginal Affairs and Northern Development of Bill C-20, an act to provide for real property taxation powers of first nations, to create a First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority and First Nations Statistical Institute and to make consequential amendments to other acts.

First Nations Fiscal and Statistical Management ActGovernment Orders

November 19th, 2004 / 12:35 p.m.

Westmount—Ville-Marie Québec


Lucienne Robillard Liberalfor the Minister of Indian Affairs and Northern Development

Mr. Speaker, I move:

That Bill C-20, an act to provide for real property taxation powers of first nations, to create a First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority and First Nations Statistical Institute and to make consequential amendments to other acts, be referred forthwith to the Standing Committee on Aboriginal Affairs and Northern Development.

First Nations Fiscal and Statistical Management ActGovernment Orders

12:35 p.m.

London West Ontario


Sue Barnes LiberalParliamentary Secretary to the Minister of Indian Affairs and Northern Development and Federal Interlocutor for Métis and Non-Status Indians

Mr. Speaker, it is a pleasure to speak in support of the first nations fiscal and statistical management act.

The Prime Minister has talked about a new and strengthened relationship with the aboriginal peoples and a new approach in resolving lingering and unacceptable disparity in the quality of life of first nations, Métis, Inuit and other Canadians.

The Prime Minister has stated that the challenges faced by the first nations are the biggest challenge facing Canada, and that first nations should participate fully in all that Canada has to offer, and enjoy greater financial autonomy and an increasingly better quality of life.

This bill has to do with meeting our commitment towards first nations. It deals with the work we have to undertake as partners in order to break down barriers to growth, with whatever needs to be done so the first nations have the tools they need for their economic growth and prosperity, with the respect for the diversity of first nations and their ability to find their own solutions and implement them in an appropriate way in their communities.

The proposed legislation would offer to first nations many of the valuable and practical tools that are fundamental to self-reliance and economic growth. If our larger objective is to close the socio-economic gap, it makes sense to see that first nation peoples have the same potential to capture economic opportunities as other Canadians.

This gap is quite real and widens each and every day as economic benefits and opportunities are foregone.

The bill is part of a new approach which holds that first nations must be able to plan and direct their own economies for there to be real economic opportunity and lasting prosperity.

The bill would set up four institutions to help the governments of participating first nations improve the socio-economic conditions of their communities.

The first nations financial management board would give first nations the same access to capital non-aboriginal communities have through the bond market.

The second institution, the first nations financial management board, would certify the credit worthiness of communities interested in gaining access to the borrowing pool.

The third institution is the first nations tax commission. Under the proposed act, this body would perform a role which is expanded from that currently performed by the Indian Taxation Advisory Board. The tax commission would approve the real property tax laws made by the participating first nations.

Under the more transparent property tax system proposed by the bill and with the assistance of the tax commission, participating first nations would be able to strengthen the generation of this local source of revenue and inspire greater confidence in investors and others contemplating the establishment of businesses on reserve.

Finally, the fourth institution is the first nations statistical institute. It would not only help improve the quality and relevancy of information available to deal with first nation issues, but also make sure first nation policy makers can access this information.

The four institutions established by the bill would offer first nations the fiscal tools needed to attract investment, to build infrastructure, to create jobs and to address social issues.

However, I want to stress two extremely important points. First, first nations would be accomplishing these goals on their own terms. As owners of the process, first nations would be able to develop partnerships with other governments and industry in order to strengthen their economies and improve quality of life.

Second, this process is in keeping with the right of the individual first nations to choose these tools if they want to. Even the first nations who support the bill recognize that the real property taxation and borrowing opportunities found in the First Nations Fiscal and Statistical Management Act are not necessarily appropriate for all first nations. Moreover, those who opposed the bill indicated that they did not want to prevent interested first nations from taking advantage of the possibilities this bill offers.

In the same fashion, I want to point out that while the proposed legislation would create institutions of benefit to many first nations, participation in them is completely optional. No one would force any first nation to take part in something that, for whatever reason, it might not choose to do.

First nations have diverse goals and aspirations and the government will continue to respect that diversity.

The Prime Minister and the Government of Canada said that the conditions faced by many first nations communities are one of the most pressing issues in Canada.

The Prime Minister, through the April 19 round table and subsequent meetings, reaffirmed the government's commitment to addressing these issues.

This bill will allow us to fulfill our responsibilities, to respect diversity and choice and to work together by taking specific action to facilitate the achievement of common objectives and the goodwill of all the stakeholders at the table.

I think that this bill will allow us to close the gap that exists between the quality of life in the first nations communities and elsewhere in Canada. It also improves the economic opportunities, there again in view of closing this gap.

We have a long road ahead but we are confident that we are on the right path. We are mindful of the mistakes of the past but full of hope of goodwill and a determination to arrive at a new destination and a better future for all.

I am very encouraged that members in the House will work together to see that these goals are delivered to the first nations. I thank and respect the members for their cooperation herein.

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12:45 p.m.


Jim Prentice Conservative Calgary North Centre, AB

Mr. Speaker, it is my pleasure to rise today, as the critic for my party with respect to aboriginal matters, to speak to Bill C-20, a bill described as the First Nations Fiscal and Statistical Management bill.

I am pleased to indicate to the House that I am speaking in favour of the legislation.

Earlier this week, one of Canada's national newspapers published an opinion piece prepared by Mr. Phil Fontaine, the National Chief of the Assembly of First Nations. While I do not agree with everything that my friend and colleague Grand Chief Fontaine said in the article, there are a number of matters upon which he and I agree which he has stated and which all Canadians should consider.

Canada is a modern federal democracy in which all citizens must bear equally the responsibilities and the privileges of citizenship. Aboriginal Canadians are entitled, indeed expected, to share in the governance of Canada.

If aboriginal Canadians are to be equal citizens, also bearing the hopes and dreams of this country upon their shoulders, then they must bear equally the responsibilities of governing this land and, concurrently, they must enjoy the full benefits of Canadian citizenship, including the protection of the Charter of Rights and Freedoms.

As Chief Fontaine has observed, aboriginal people will only be self-sufficient and free and able to rely upon themselves, if they are free and able to make their own choices. For reliance upon the choices that others make for any of us, is a denial of the status of citizenship.

Over the past many years in Canada, the meaning and the scope and content of aboriginal self-government has been much debated. The debate has for the most part been a civil one, even as it has been marked by a decided lack of consensus on many fundamental matters. However, both aboriginal and non-aboriginal Canadians need be reminded that although we may not always agree upon the scope and content of governance rights, virtually all Canadians share a desire to see aboriginal Canadians as equal partners in this marvellous country.

The Indian Act is both archaic and anachronistic. Frankly, it has no place in the Canada of tomorrow. It has not yet been replaced by a modern legislative framework only because we have struggled as a nation in our attempts to define a replacement.

The issues to be sure are complex, involving questions which strike to the heart of our polity, issues pertaining to the application of the charter, the distribution of government jurisdiction within our federal system, the incidence of citizenship, the correlative rights and expectations, which we demand of one another as fellow citizens, and the distribution of resources. These would be difficult questions among citizens who share common values and histories and origins. They are all the more difficult when one factors in the rich and diverse mosaic of Canada's aboriginal people; Inuit, Métis and over 600 distinct Indian first nations.

As Grand Chief Fontaine observed this week, people need control over their own lives and the chance to reap the benefits of their own labours. They do not flourish when denied the right to decide for themselves how they will live.

In this respect, Grand Chief Fontaine's comments echo those that one would find, for example, of the economist and philosopher F.A. Hayek in The Road to Serfdom . I have long held the view that the modern struggle of Canada's aboriginal people has been less a struggle with other Canadians than it has been a struggle against the collectivist tyranny of the Indian Act.

My position in respect of self-government and that of our party is clear. The Indian Act and related legislation must be replaced by a modern legislative framework which provides for the devolution of full legal and democratic responsibility to aboriginal Canadians for their own affairs within the overall constitutional framework of our federal state. Such legislative reform should be pursued following full consultation with first nations, with the objective of achieving a full and complete devolution of democratic authority that is consistent with the devolution of other decision making responsibility within our federal state.

Aboriginal Canadians, like other Canadians, are entitled to enjoy democratic control over their own affairs within a legislative context that ensures certainty, stability, respect for the rule of law and which balances individual and collective responsibility.

Aboriginal communities must have the flexibility to determine for themselves whether and how free market principles, including individual property ownership, should apply on reserves. This devolution should be accomplished in a manner which takes into account the cultural and linguistic diversity of Canada's first nations. Within the context of the Canadian Constitution, we should be prepared to make flexible accommodations for the protection of language and culture within self-government agreements.

I return then to the legislation before the House. It must be noted at the outset that this legislation originates not with the government, but rather with a group of visionary aboriginal Canadians who have fought for their vision of self-government and who have persisted in the face of considerable difficulty.

I make reference today to Manny Jules of the Kamloops First Nation, Chief Strater Crowfoot of the Siksika First Nation, Chief Tom Bresette of the Kettle and Stoney Point First Nation, Deanna Hamilton of the Westbank First Nation, and Harold Calla of the Squamish First Nation.

These men and women and the extraordinary team of people who have worked with them are fighting to ensure that their first nation communities have access to practical levers of self-government. Their vision is one of economic progress, of prosperity, of infrastructure development, of economic development, economic opportunity and social progress. The self-government which they fight for is predicated upon the hard work associated with citizenship: the installation, for example, of community infrastructure, the responsibilities of debt service, the administration of a property tax system and the building of fiscal, managerial and financial capacity.

The legislation would provide concurrently and balances the interests of the federal Crown, and contains provisions which would provide protections for the position of taxpayers commensurate with that of other taxpayers in our federal system.

The legislation would allow for all of these things, and it would do so without derogating from the debates which we will have in the years ahead regarding the full scope and meaning of self-government, or the scope and content of section 35 rights under the Constitution. The legislation would allow each first nation in Canada to decide themselves whether they wish to undertake this responsibility.

For my part, I fear the endless opacity surrounding the self-government debate. The many issues surrounding self-government and the meaning, the scope and content of that term will be resolved in the same way that we have resolved other difficult Canadian problems, in an evolutionary manner such as this, building upon success and responding to the distinctive needs of our diverse community. We will progress cautiously and with full regard to the intended and unintended consequences of our journey. It has always been this way in Canada and it will likely always be this way.

In closing, let us move forward. The legislation may not be the panacea for all the difficult questions surrounding self-government, but it is this. It is start and if we adopt it, some of the first nations in this country will be closer to the economic independence and the self-sufficiency of which Grand Chief Fontaine has spoken.

First Nations Fiscal and Statistical Management ActGovernment Orders

12:50 p.m.


Bernard Cleary Bloc Louis-Saint-Laurent, QC

Mr. Speaker, the content of Bill C-20, vital to the establishment of a new financial relationship between the first nations and the Government of Canada, has fuelled indepth discussions for about 20 years now.

Already in 1983, the report of the Special Committee on Indian Self-Government, the Penner report, had recommended that the financial relationship between the Government of Canada and the first nations be redefined. It concluded that based on a series of failures by the trustee for Canada's Indians in the new to them area of economic development, major changes needed to be made in first nations financial management.

Later, in 1996, the final report of the Royal Commission on Aboriginal Peoples recommended a full review of the financial relationship between the federal government and aboriginals. The proposed initiative focused on redefining this relationship within a broader context based on first nations self-government.

Bill C-20 that we are talking about today follows on Bill C-115, commonly referred to as the Kamloops amendments, that was passed in 1988. This first legislative measure extended the taxing powers of first nations under the Indian Act to their interests in conditionally surrendered and designated lands. It stated that this land could continue to be part of the reserves and allowed first nations to adopt by-laws to levy property tax on that land.

The conditional land surrender process was abandoned and replaced by a land use designation process to accommodate leasing arrangements. Thus the former surrendered lands which by definition were excluded from reserve status have become designated lands. Consequently, when land is surrendered conditionally or designated, none of the band's interests are surrendered and the land keeps its reserve status.

Bill C-115 has opened the door to establishing a new financial relationship between the first nations and the Government of Canada. By making the above-mentioned changes, Bill C-115 made legislative changes that have twofold results: they have helped clarify the power to levy tax on reserve land by first nations governments by increasing their tax power.

I would like to emphasize that the financial institutions in the bill before us, Bill C-20, are a national initiative of the Indian Taxation Advisory Board and the First Nations Tax Commission. The first nations financial management board and the first nations statistical institute have been added so as to make up the institutional framework required to support bond issues by the First Nations Tax Commission and attract investment in the lands of first nations.

The first nations financial institutions project has been developed to this stage thanks to the national table on fiscal relations , which was set up in 1999 by a memorandum of understanding between the Indian affairs and northern development department and the Assembly of First Nations. First nations representatives throughout Canada, and officials of the finance department of Canada, Statistics Canada, Health Canada and the Canada Customs and Revenue Agency were part of these discussions.

At this time, these institutions are being set up under the guidance of two first nation councils and two first nation advisory committees.

After the Kamloops amendments, in 1988, a number of events strengthened the support for the restructuring of financial relations between the first nations and the federal government, including the finance ministers conference on Indian government taxation, in 1991, the Charlottetown accord, in 1992, and the final report of the royal commission, in 1996.

In 1991, the Department of Finance undertook a review of its policy on Indian taxation and, in 1993, made public the Working Paper on Indian Government Taxation.

In 1995, the First Nations Financial Institute was created by the Westbank First Nation. It was then federally incorporated. The objective was to provide investment opportunities to first nations in order to ensure long term financing of their public debt.

In 1995, a round table of representatives from the Department of Finance and the Assembly of First Nations led to the adoption of a resolution on taxation.

The Chiefs' Committee on Fiscal Relations was created two years later to review fiscal relations between first nation governments and the federal government. It recommended the establishment of first nation financial institutions.

In 1999, the Assembly of First Nations expressed its support for this initiative when participants in its annual general meeting supported the creation of the First Nation Financial Administration, and the creation of the Indian Taxation Advisory Board to establish the First Nations Tax Commission.

In December of the same year, the agreement proposed the creation of a national round table on financial relationships, with the objective of establishing solid bases for these relationships through an exchange of information, capacity building and the establishment of benchmarks.

In 2000, the Assembly of First Nations maintained its support for the creation of the First Nations Statistical Institute and the First Nations Financial Management Board. The general assembly then passed a resolution supporting the recommendation by the chiefs' committee regarding the establishment of the four new first nations financial institutions by federal legislation. The legal validity of this resolution was questioned, since some people thought that it had not received the support of 60% of those present.

Moreover, the bill now requires that each first nation wishing to avail itself of this legislation be added to the schedule. This requirement is intended to clarify which First Nations are governed by the legislation.

Even after all these amendments, which correspond largely to their demands, the chiefs of the assembly of first nations of Quebec and Labrador refused, last week in a special assembly, to endorse the bill until there is a debate in the Assembly of First Nations.

The Bloc Québécois has decided to maintain its support for Bill C-20 because we sincerely believe that the legislation will be of benefit to a number of first nations in Quebec. To be strong, Quebec must have strong first nations with flourishing community economies.

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1 p.m.


Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I am pleased to have the opportunity to bring the views of the New Democratic Party caucus on Bill C-20 to the House of Commons at this stage.

I will note first of all that this is a repeat for me; this is the third incarnation of the bill, let me put it that way, that I have spoken to since I became the aboriginal affairs critic for our party.

First Nations Fiscal and Statistical Management ActGovernment Orders

1 p.m.

An hon. member

It's déjà vu all over again.

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1 p.m.


Pat Martin NDP Winnipeg Centre, MB

As my hon. colleague says, it is déjà vu all over again. I do not mind doing that because frankly I believe that with each incarnation the bill does in fact begin to take a form that we in the New Democratic Party caucus can work with.

We had a great number of reservations about the previous incarnations. We were not at all satisfied with Bill C-23 when it came before the 37th Parliament. I believe we have articulated those views and voiced them. They exist on the record. I do not think I have to belabour the point here today to make it abundantly clear that we rejected the first nations governance act as it was and we rejected this bill because it became part of that suite of bills which was known as the first nations governance initiative. We thought the timing was poor, the treatment of it was poor, and the content of the bill was poor. I suppose one could say we were critical of just about every aspect of that bill.

However, I do recognize the advantages of components of Bill C-20. I recognize that the finance authority borrowing pool idea could be advantageous for smaller communities that may benefit from sharing the risk and the lending or borrowing ability with other larger, more stable and established first nations.

I point out that this is an idea that finds its origins within the New Democratic Party, in fact, with members of Parliament from British Columbia who worked very closely with the provincial government and B.C. municipalities to form the B.C. Municipal Finance Authority, which in a similar way gives strength to those smaller communities that may in fact be able to borrow money at a better rate and get a better bonding rating in their efforts to finance economic development initiatives in their communities.

Another aspect of Bill C-20 is that it seeks to create another fiscal institution called the tax commission. When we are dealing with first nations taxation, we are dealing in this case with the rights of first nations communities to tax, for instance and perhaps, property owners who may be renting or leasing property from them. I think sometimes in terms of cottage property in some areas.

However, there is another issue of first nations taxation that we should comment on today. While I have the floor I wish to draw the attention of the members here to a recent change in the way the government treats first nations in terms of taxation and that is as it pertains to post-secondary students.

Many of the members may not be aware, but a fundamental change is taking place. For the first time ever, the tuition given to first nations students and their cost of living allowances and so on will be taxed. Thus, in my view, first nations will be able to send fewer students to university because those students have to pay income tax on these student loans and student cost of living allowances given to them by their communities so they can seek post-secondary education.

I raise this because even though there was a huge protest from the Assembly of First Nations, this will be implemented in the next taxation year. This is a shot across the bow on treaty rights, because by the Government of Canada saying it is going to start taxing student allowances it is also saying that it does not see post-secondary education as a treaty right. It sees it as a policy.

The government is trivializing and reducing the fiduciary obligation under aboriginal treaty rights to provide education per se. Nowhere in the Constitution and nowhere in any treaty does it say “education meaning kindergarten to grade 12” is a treaty right. It says “education” is a treaty right. This is a shot across the bow by the government to start to tax those benefits. I am very critical of this.

I want to recognize and pay tribute to the efforts of aboriginal students right across this country under the guidance and leadership of Algonquin College counsellor Kimberley Smith Spencer, who is also the president of the Ontario Native Education Counselling Association. She and a bunch of committed activists and students have developed a petition of 11,000 signatures of people across this country who think it is fundamentally wrong to make this policy shift and start taxing tuition fees and living-out allowances of first nations students, because the predictable consequences will be that there will be fewer first nations students in post-secondary education. It is as simple as that. What a glaring contradiction.

I met just last week with the Minister of Indian Affairs and he itemized for me what his main priorities would be for this parliamentary session. Let us guess what they were. Post-secondary education was number one and housing was number two. Those were his main priorities.

At the same time he is stating that post-secondary education is his main priority, his government is starting to tax this benefit that used to enjoy a tax free status so that first nations students could get the post-secondary education they needed and so that communities could build the administrative capacity they needed.

We all know that the way to go from poverty to the middle class in one generation is through education. Is there anybody here who does not agree that the most important thing we could possibly do as first nations communities are welcomed into the mainstream of Canada is to help them educate a generation of capable, competent and suitably skilled students with graduate certificates from post-secondary institutions?

I cannot help deviating from the topic in this way because we are called upon today to make a speech about the creation of a brand new first nations tax commission and one cannot mention first nations taxation without noticing this glaring contradiction in the policy of the government. It is like having an elephant in the bedroom and trying to pretend it is not there. I cannot not talk about what the government is doing regarding the practical problems that first nations students face.

I know of many communities and I will mention one. Chief Moses Okimaw spoke to me from God's Lake in northern Manitoba. He said his community can only afford to send a few students per year out for post-secondary education.

My time is almost up, but I will just illustrate the scope and breadth of the problem. Yes, post-secondary education is granted to aboriginal people as a treaty right. We view it as a treaty right; the government apparently views it as a policy decision. But it is a bit of a Catch-22 when there is not enough money within the community to send more than a couple of students per year. And now it is taxed. If a student is given $10,000 a year for a living-out allowance for school and has to pay taxes on it, that leaves the student with $5,000 or $6,000 to actually spend. Fewer students will be able to go to school by virtue of this policy shift. I believe it is completely contrary to the government's own stated goals and objectives.

It is completely contrary to all the romantic and flowery language we hear from the Prime Minister all the time that this is the generation of social justice for aboriginal people. If that were true, we would not see a policy direction like this as it pertains to education. The most effective tool to fight poverty in aboriginal communities is to put forward a generation of aboriginal kids who are trained and skilled and have the administrative capacity to lead their people out of poverty and into the mainstream of Canada.

I recognize, pay tribute to and celebrate the actions of the students who are sending this message to the Government of Canada. I know they have brought 11,000 signatures in a petition today, which I will be proud to table in the House of Commons at the earliest opportunity. I know that the people of Canada want the government to listen to this common sense and reasoning.

First Nations Fiscal and Statistical Management ActGovernment Orders

1:10 p.m.


Lloyd St. Amand Liberal Brant, ON

Mr. Speaker, I rise to address the House in support of the first nations fiscal and statistical management act.

First nations have long sought access to the fiscal and statistical tools available to other governments, the tools with which to operate on a more equal footing within the greater Canadian economy. I want to emphasize again that today these same tools are readily available to governments and businesses which operate outside of Canada's non-aboriginal community, tools which might often be taken for granted.

The first nations fiscal and statistical management act is a key milestone along a path toward ensuring first nations have access to these tools, a path which began some 16 years ago.

In 1988 this Chamber witnessed a rare event, a first nation led amendment to the Indian Act that was targeted at improving first nation access to economic development. Prior to the amendment, neighbouring municipalities would collect property tax from non-Indians living on reserve. As a consequence, many first nation communities were losing these property tax revenues, moneys which other governments would normally use to provide services and build their economies. The loss of these revenues spelled lost economic and employment opportunities and lost opportunities to improve the quality of life on reserve.

Happily, the 1988 amendment received all party support, and all who voted for that amendment to the Indian Act would be pleased to know that it did indeed create opportunity, a foundation from which to build.

For example, in 1989 the first nation led Indian Taxation Advisory Board was formed in order to help first nations build effective, real property tax regimes. In 1995 the First Nations Finance Authority Inc. was established and has worked since then to help first nations effectively invest their revenues earned from a variety of sources.

Bill C-20 draws heavily from the research and experience of both the Indian Taxation Advisory Board and the First Nations Finance Authority Inc. It builds from lessons learned and seeks to provide additional tools which first nations would likewise use to build their economies and ultimately improve the quality of life of their members. Therefore it too deserves our support.

The first nation real property tax system has provided local decision makers with increased financial flexibility, flexibility being but one tool that has been used to improve community services and help build local economies. Building on that foundation of success, the bill offers to first nations that choose to participate many of the valuable tools that are fundamental to self-reliance and economic growth.

The transparency and high standards of financial management and decision making supported by the bill would offer investors the certainty they seek to invest in first nation communities. If our larger objective is to close the socio-economic gap, it makes sense to see that first nation people have the same potential to capture economic opportunities as do other Canadians.

The bill would assist first nation communities to borrow on the bond markets, facilitating their access to low cost capital for infrastructure development, thereby attracting needed investment to first nation communities. The bill would also provide first nations with access to the statistical information they so badly need to make strategic planning decisions.

This strategy is consistent with the new approach, which holds that for there to be real economic opportunity and lasting prosperity first nations must be able to plan and direct their own economies. To this end the bill would establish four national institutions that would assist those first nations that choose to participate in accessing and utilizing the fiscal and statistical tools that all other governments in Canada use to address the well-being of their communities.

The First Nations Finance Authority would provide a means for first nations to pool borrowing requirements and raise capital on the bond markets by securing property tax revenues. The strength of joint borrowing should produce a marketable credit rating. It is estimated that through the FNFA, first nations could raise $12 million of private capital over the first five bond issues.

As my hon. colleague, the Minister of Indian Affairs and Northern Development, indicated earlier, gaining access to the bond markets would lower the cost of borrowing for first nations by some 30% to 50%. For first nations this would mean that every dollar raised through property taxation has more purchasing power in terms of capital infrastructure development.

The second institution, the first nations fiscal management board would not only certify the high standards of financial management of first nations that wished to gain access to the borrowing pool, it would also be able to provide the same service to non-participating first nations that seek to borrow from other sources. Any first nation, whether it is participating in the taxing or borrowing regimes established under the bill or not, would be able to approach the board for advice and guidance on any issues of financial management.

The third institution is the first nations tax commission. This body would establish the standards for the first nation real property tax system established under the bill and approve property tax laws made by participating first nations. This institution would assist participating first nations to strengthen their property tax system, one that is much more complete and transparent, one which provides greater certainty to taxpayers and potential business partners and investors. Transparency and consistency are essential tools necessary for building strong economies. These tools help to build investor confidence and attract private capital and partners.

The fourth institution, the first nations statistical institute, would collect existing data from a variety of sources to develop a complete, relevant and accurate statistical profile of first nations across Canada.

Currently, first nations do not have at their disposal the basic statistical information available to the majority of Canadians, a situation that hinders their planning and hinders the ability of first nations to make the most of economic opportunities. Information available through the statistical institute would support local decision making, which would ultimately lead to improving the socio-economic conditions on reserve.

Each community will decide if and when it will participate in the opportunities presented. The bill simply provides tools for those who would choose to use them.

The time is now for proceeding with this legislation. The time is now to support those first nations that would use the bill to attract and sustain community investment. The time is now to take another important step toward sustainable, self-reliant first nations governments. The time is now to give first nations access to these tools: flexibility, fiscal certainty, transparency, consistency, strong financial management, access to capital and reliability of data, tools that non-aboriginal communities have long taken for granted.

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1:20 p.m.


Jeremy Harrison Conservative Churchill River, SK

Mr. Speaker, I rise today to speak in support of Bill C-20, the first nations fiscal and statistical institutions initiative. The act would provide for real property taxation powers of first nations, create a first nations tax commission, first nations financial management board, first nations finance authority and a first nations statistical institute, as well as making consequential amendments to other acts.

The bill was tabled in the previous Parliament as Bill C-23 but was not passed before dissolution. The purpose of the act is to create the above-mentioned institutions with the intention that those institutions provide first nations with the tools needed for economic development primarily by facilitating access to capital markets for much needed infrastructure development.

We should make no mistake that infrastructure development is sorely needed on first nations right across the country. I know this first hand. In my riding of Desnethé—Missinippi—Churchill River there are over 30 first nations and 108 separate reserves. Many are in desperate circumstances with incredible and severe problems. Any access to additional tools for economic development and improvements to infrastructure are a positive thing.

The four institutions that would be created by this act are designed to provide participating first nations with the tools they need to build stronger local tax bases, infrastructure and economies. Economic independence is intended to be pursued by improved access to private capital.

Participation will be restricted to ensure that only those first nations that have demonstrated the requisite managerial and financial capacity will have access to the borrowing capacity of these new institutions. The first nations financial authority will allow participating first nations, like local governments, to raise long term private capital at preferred rates for infrastructure development. They will do so by securitizing a portion of their potential real property tax revenues generated under the bill. It is estimated that $120 million in debt financing will be raised over the first five bond issues. These funds will allow first nations to develop infrastructure that supports business and investments.

At this point I would like to stress that the legislation does not provide federal government credit backing or guarantees and that borrowing participation is voluntary, as are the advisory services. First nations choosing to participate in the first nations finance authority will pool together their capital. The FNFA will act as a central borrowing authority by selling bonds on the strength of the first nations collective credit. They will attempt to achieve an A credit rating.

The qualifying and participating first nations will be required to guarantee one another's debt. The finance authority will establish eligibility requirements, issue first nations debentures and re-lend the proceeds to those first nations participating in the borrowing. In concert with such borrowing, the on reserve property tax system will be gradually expanded to provide debt service cash flow. The result will be to provide qualifying first nations with the comparable credit for infrastructure expansion to that available to municipal authorities elsewhere in Canada.

The second new institution that would created under the act, the first nations tax commission, is essentially the natural evolution of the current Indian Tax Advisory Board. The ITAB has worked to build awareness of the real property tax system and provide the tools for its implementation. The FNTC will have the authority to approve first nations tax bylaws, a power that is currently exercised by the minister alone. The FNTC will also provide sample bylaws, training, education and an alternative dispute resolution process to prevent and resolve disputes.

At present, 100 first nations levy property tax, collecting $44 million annually from 28,000 taxpayers. The FNTC will be responsible for the development and regulation of first nation property tax systems. It will assume responsibility for the approval of bylaws, ensure compliance and provide dispute resolution mechanisms for on reserve taxation, providing an alternative to the Indian Act property tax system.

Another new institution mandated in the bill is the creation of the first nations financial management board. The initial task of this new institution will be to provide the independent and professional financial management assessment services required by participating first nations. It will provide professional advice to those first nations that have entered the FNFA borrowing pool and provide training and services related to policy development for all first nations.

The final new institution that would be created under Bill C-20 is the first nations statistical institute. This organization is intended to provide statistical data and analysis of the social, economic and environmental conditions of first nations. It will supplant Statistics Canada in the development of statistical information, support borrowing, credit rating, property taxation and provide information for marketplace investors. It is intended to address the current lack of capacity of first nations to maintain statistical systems needed to match their growing local decision making responsibilities.

I must admit that I have some problems with the creation of this institution. This institute will clearly duplicate the services that are supposed to be supplied by Statistics Canada, a federal agency that receives $600 million per year in funding.

Why does this institute have to be created? The answer is not entirely clear, but to me it would seem to indicate a failure on the part of StatsCan to keep adequate information on first nations across the country.

Although I have stated that I support this bill, I also am somewhat worried about the costs associated with the creation of the new institutions I have talked about. It is estimated that the cost over the first five years will be $67.3 million. This is based on a start-up of $9 million and operational costs over the five year period of $58.3 million. The objective of the financing authority is to be self-financing. I sincerely hope that this is the case. There are also opportunities for some cost recovery with the other institutions, although break-even, by even the best estimates, will occur in 2010.

Another concern I have is that this bill may also underscore a trend we are starting to see develop, namely, a schism between have and have not first nations. Only time will tell in this regard.

It cannot be stressed enough that this bill is an initiative of first nations leaders from across the country. These leaders are seeking the gradual removal of their communities from the Indian Act. They blame much of the on-reserve poverty, joblessness, and the minimal wealth creation on the poor quality infrastructure and institutional limitations of the Indian Act.

Mr. Manny Jules, spokesperson for the first nations fiscal institutions initiative, has said:

This legislation is the bedrock on which you can break the dependency cycle. The creation of the First Nations Tax Commission, First Nations Finance Authority, First Nations Financial Management Board and First Nations Statistical Institute will provide the information, certainty, a regulatory framework, confidence and infrastructure required to attract investment to First Nation lands.

The hallmark of this bill is its optional nature, which recognizes the diversity among first nations. This legislation will apply only to those first nations that have chosen to access the full range of services offered by the institutions in the areas of property taxation and financial management. Solid capacities in these areas are essential for the future of first nations from coast to coast.

First Nations Fiscal and Statistical Management ActGovernment Orders

1:30 p.m.

Notre-Dame-de-Grâce—Lachine Québec


Marlene Jennings LiberalParliamentary Secretary to the Prime Minister (Canada—U.S)

Mr. Speaker, I rise today to speak in support of Bill C-20, the First Nations Fiscal and Statistical Management Act.

As the Prime Minister said in reply to the Speech from the Throne, and I believe my hon. colleagues will agree, the urgent need to reduce the gap in the development opportunities between the first nations and other Canadians is clearly felt. Canada and the native people recognize that to be able to find a good solution to this situation, it is important to obtain complete statistical information as soon as possible.

Moreover, the main government activities like economic development, social programs, fiscal planning and public accounting all require accurate and relevant statistics. While more and more first nations get ready to take on the responsibilities of self-government, the first nations governments need complete and easily accessible statistical information to be able to take the best decisions possible for their communities.

This bill seeks to establish a first nations statistical institute to give decision makers and first nations citizens better access to the statistical information they need. This institute would take numerous practical actions to meet their needs.

First, the institute would help any first nation interested in meeting its need for local data for the purpose of research, analysis, and eventual decision making. The institute would be in a position to find, analyze and deliver statistical information that would be accurate, complete and appropriately tailored to the specific requirements of the communities or individual groups of first nations.

The first nations would thus have access to the same basic statistics as most other Canadians: statistics on housing, justice, natural resource management, culture, education, the working population and health, to name but a few.

Second, the individual first nations have difficulty setting up and maintaining the statistical systems they require in order to meet their responsibilities and their growing accountability obligations in decision making. These decisions affect the delivery of day to day essential community services, as well as the planning of major development projects.

The proposed statistical institute would help the first nations to develop the necessary ability to use the statistical information and create local information systems in order to better administer programs and funds. By improving the quality of statistics and their comparability with data from other sources, the institute would ensure that the first nations had the necessary statistical tools to help them become more autonomous.

Comparative statistics are essential to community planning and will be needed to attract private investment. It is important for both the first nations and potential investors to have this type of information, since it provides a specific picture of the situation of the first nations concerned and its economic growth potential. WIthout reliable comparative figures, it is extremely difficult to make any precise assessment of the situation of a first nation.

The institute would also have an important role to play in the rationalization of important information on the first nations now in the possession of the federal government.

Among the roles of the institute would be to access information contained in these data bases in order to provide the complete picture of Canada's first nations to which I have already referred. To that end, it would work in partnership with the first nations and the government in order to detect and remedy any shortcomings in the statistical information concerning the first nations, for the mutual benefit of the first nations community and the government departments and agencies.

More specifically, the institute will play a key role by integrating the first nations' perspective in the analysis of the data kept by various federal departments. This will help develop policies and programs that target more accurately the needs of first nations people. This will not only improve the accuracy and current level of information relating to first nations but, by increasing the level of confidence and by demonstrating the importance of quality information, it will also encourage and support the exchange of information between first nations and the federal government.

We must clearly show that the role of the statistical institute will not duplicate that of Statistics Canada but, rather, that it will complement it. For example, the institute will be in a good position to advise Statistics Canada on how to better represent first nations in the national statistical system, and it will also help it develop data collection tools and techniques that reflect and respect first nations' customs and culture. This means that many other first nations would be encouraged to participate in the data collection activities undertaken by Statistics Canada.

Moreover, first nations have numerous information needs that are not covered by Statistics Canada's mandate. The statistical institute will be in a position to identify these needs and will meet them by finding an appropriate source of existing data or by undertaking, alone or in partnership with first nations or statistical organizations, the collection of such data.

It is particularly important to support the real property tax and financing regimes established under the bill. Statistics on residents and commercial businesses on reserves would be useful to first nations to determine whether they should implement a real property tax regime. Moreover, statistical information is an essential component in the development of capital projects through the issuance of first nation bonds by the tax commission.

I will conclude by saying that there is an essential need to create the first nations statistical institute. This institute will provide first nations with statistical information that is adapted to their needs. It would work directly with first nations, first nations' organizations, and in partnership with the government and statistical organizations, to provide a complete, accurate and relevant picture of first nations in Canada.

I urge hon. members to support this bill. I thank all members for their attention.

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1:35 p.m.


Lloyd St. Amand Liberal Brant, ON

Mr. Speaker, I rise on a point of order with a brief point of clarification on the finance authority. I have now been provided with the correct figure. It is estimated that through the first nations finance authority first nations could raise $125 million of private capital over the first five bond issues, not the $12 million mentioned earlier.

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1:40 p.m.


André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Speaker, I am also pleased to rise in this debate on Bill C-20, an act to provide for real property taxation powers of first nations, to create a First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority and First Nations Statistical Institute and to make consequential amendments to other Acts.

I will read the summary of the bill to revive the interest of my colleagues and of listeners:

This enactment strengthens first nations’ real property tax regimes andcreates a first nation bond financing regime, and creates four institutions tosupport those regimes, to promote first nations’ economic development and tostrengthen first nations’ statistical capacity.

This is the purpose of Bill C-20 which is before us today. At this time, we support referral of the bill to committee. We tend to approve of this legislation, even though we have to say it is defective in some ways.

Bill C-20 will make it possible to create an environment that will help first nations achieve self-sufficiency. As sovereignists, we believe that self-sufficiency can only be achieved when a nation owns and controls all its economic levers. We have talked about this issue quite often. When it comes up here, we are very happy to be able to support it.

Of course, we are concerned with the self-government claims of the aboriginals. We repeatedly supported the right to self-government for aboriginal people and, of course, we are pursuing this approach. We believe that this bill will allow first nations to have access to financial tools that other levels of government are already using, if only to have access to the financial market.

First nations will thus be able to participate in a significant way in their economy and to encourage private investments on their lands, which is now more difficult. First nations, which seek to borrow funds to build their community infrastructure, have to deal with transaction costs, processing delays and interest rates that are much too high or even prohibitive.

A backgrounder produced by the First Nations Fiscal Institutions Initiative says this:

A dollar of first nation tax revenue buys 30 to 50 percent less in capital works than that of other governments. The problem is principally rooted in the legislative and institutional framework.

According to first nations who support this legislation, it is 10 times more difficult to build a first nations economy than any other in Canada. This is because some lands do not have services, investors are uncertain and the cost of starting a business is still too high.

As well, according to these first nations, it is the Indian Act that, for 130 years, has prevented first nations from creating their own institutions and participating in the economy.

We hope this bill will help correct the situation and, to repeat what my wise colleague from Louis-Saint-Laurent said a few moments ago--and I have often said how wise he is--to be strong, Quebec must have strong first nations with flourishing community economies.

This is exactly what our dear colleague has said. I repeated what he said because I thought it was very important to mention it. We are sometimes asked what an opposition member can do. That happened to me during the electoral campaign in a debate organized for the public. The chief organizer for the Liberal candidate asked me “What are you going to do in the opposition benches?” In fact, we are preventing the government from just going ahead and adopting any bill they want that does not meet the needs of those concerned by this legislation. Why do I talk about it? Because before this bill was tabled today, we have seen Bills C-23 and C-19 that were not acceptable. These are the two bills that had to be amended to produce Bill C-20.

As I was saying previously, many factors explain why we rejected former Bills C-23 and C-19, as did the first nations. We had concerns about the fact that the First Nations Fiscal and Statistical Management Act could work against aboriginal rights and reduce the federal government's fiduciary obligations toward the first nations. We were also concerned that the institutions would only serve a few first nations. We also had other concerns.

Naturally, the Bloc Québécois expressed its concerns and apprehensions during the debate on these previous bills. The work accomplished by the opposition and the first nations has paid off—and that is my answer to the man who had come to me with this question—because Bills C-19 and C-23 were unacceptable. As I said, they were eventually amended so as to become Bill C-20 before us today, which is a much better bill.

I must point out that two very important changes have been made to the bill. First, a schedule was added to ensure that the legislation applies to those first nations who wish to participate, because participation is optional. Second, a non-derogation clause was included to protect the aboriginal rights and treaty rights of all first nations.

These changes ensure consistency with the Charter of the Assembly of First Nations as well as the principles of self-determination, the approach taken by the first nations, and the optionality provided for in recent resolutions of the Assembly of First Nations, which were passed, if memory serves, in Saskatoon and ratified again in Charlottetown.

Notwithstanding these improvements, the Bloc Québécois will remain alert. Of course, we will examine the bill based on certain fundamental principles.

First, does this bill protect the right of first nations to self-determination? Will it be beneficial to first nations, particularly to those of Quebec? Will it protect the rights of, and obligations towards, first nations who are not part of the legislation? Will it help to address the fiscal imbalance for the first nations who use this legislation?

More importantly, the Government of Canada must not use Bill C-20 to opt out of its trust responsibilities towards aboriginal people. We know that it is always the government's job to address inequality between aboriginals and non-aboriginals.

With these concerns in mind, the Bloc Québécois will make sure that Bill C-20 really give the first nations access to tools that other levels of government already have in order to take a more active part in their economy.

First Nations Fiscal and Statistical Management ActGovernment Orders

1:45 p.m.


Carol Skelton Conservative Saskatoon—Rosetown—Biggar, SK

Mr. Speaker, the underpinning idea behind the legislation is that economic development and the improvement of the quality of life on the reserves requires a generation of revenue, the ability to raise capital, through much needed capital works, in a commercially acceptable manner with first nations being directly involved in the process.

It is the initial step in self-government of being in charge of one's destiny and being responsible for their own economic development. It is a first step. There is a much bigger journey that must be taken for the first nations to truly arrive at self-government. As Bruce Standingready of the White Bear First Nation put it, “You can only eat an elephant one bite at a time”.

There is much to be done, but this legislation is a good first step. There are many steps yet to be taken.

My colleague from Souris—Moose Mountain took the opportunity to meet with Chief Standingready of the White Bear First Nation in his constituency, and with Bruce Standingready, the nation's technical adviser. He was impressed with their current development in governance, the operation of the White Bear Lake Resort, the Bear Claw Casino and the integration and cooperation with the community of Carlyle.

The White Bear First Nation is willing and eager to take charge of its own destiny and to participate in the development and the use of its natural resources to better the life of its people, on and off reserve.

On the reserve there are many basic issues, like housing and infrastructure. Housing starts are not on schedule, and more than one family is residing in the same house because funding and resources are not there. Infrastructure, like sewer, water, electricity, is vital to enhance the quality of life and to improve the prospects for increased economic development and employment.

The bill would provide the fundamentals and a powerful option for first nations seeking to move forward to have a greater autonomy in terms of determining on reserve priorities and opportunities. It would be optional and it would not derogate aboriginal or treaty rights of the first nations people of Canada.

The mechanics are established through three branches related to the fiscal side and one to the statistical side. The three branches are finance authority, financial management board and a tax commission. They are all geared to provide the capacity to raise much needed finances at the best rate of interest on the long repayment term and without mortgaging our first nations land.

The whole concept depends initially on the ability of the first nations to raise money by taxation of land, interest and rights, the taxation of business activities and the imposition of development costs, just like any other municipality can. This ability, in and of itself, would be of marginal value to first nations if the rest of the concept were not implemented. A typical local community, for example, can raise $6 million in infrastructure from $1 million in annual tax revenues.

A typical first nation must commit three times as much revenue to finance the same amount of infrastructure. This problem is compounded by the fact that governments use their infrastructure to entice investors to build residential, commercial and industrial development on their land.

It is said, a typical community will entice $5 million in private investment for every $1 million of infrastructure. For example, in my province, in the city of Estevan, investors need sewer, water, power, lighting, paving and streets, and that is every community in Saskatchewan.

Finances can be raised only at good rates for long terms on financial markets when the investors are satisfied that moneys lent are commercially safe and secure. To be satisfied of that, they need to be assured that the basis for sound practices are in place at the government level. The bill addresses that.

The local first nations propose a tax law that must be approved by the tax commission, which will only approve it if the first nations community has a certification from the First Nations Financial Management Board. The tax commission promotes a common approach to taxation nation-wide and ensures the integrity of the system. It enables the first nations community to administer the taxation system and develops training programs for the first nations community. Additionally, they reconcile taxpayer interests with the responsibilities of chiefs and councils to administer first nations affairs.

Under clause 5 and clause 10, a budget must be presented for expenditures of revenues with the assurance that a borrowing member will not authorize expenditures of local revenues beyond the budget. There is a provision for audit and for assurance of the integrity of the system.

The financial management board is established and has two particularly important functions. It provides assessment and certification services respecting a particular first nations financial management and financial performance. It manages compliance and has the power to provide co-management or third party management should circumstances require.

The finance authority under clause 57 is a non-profit corporation and it raises the funds. Under clause 74, its responsibility is to secure for its borrowing members through the use of collective property tax revenues into the future, long term financing for capital infrastructure, lease financing of capital assets, as well as short term financing to meet cash requirements. The authority is allowed to issue security bonds and debentures, and to set interest rates, including repayment terms.

It is by these mechanisms that first nations will be able to access national and international financing, not altogether different from municipal government. It models on the municipal finance authority of British Columbia that has 30 years of success and a high credit rating. It is based on the power and concept of pooling borrowing requirements. It is also a leveller.

Smaller and less economically developed first nations receive the benefit of a larger borrowing pool and the ability to borrow at lower rates. Pooled revenue streams from a number of participating first nations will be used to repay the bond holders. The participating first nations are anticipating an A credit rating and that without pledging first nations land.

With respect to the statistical branch, one can argue we presently have Statistics Canada with a cost of millions of dollars. It might be a duplication however. Much can be said that Statistics Canada is not now providing the type of first nations statistics that will be required. The idea has merit. Chief Tom Bressetti stated:

First nations are beginning to realize how important statistics are and how they influence the delivery of programs and services in First Nations Communities. They are important for funding arrangements, fiscal transfers, policy development and infrastructure development. Community leaders will be better equipped to plan and forecast community needs and the community will be in a better position to encourage economic development and investment.

Chief Manny Jules said:

This will provide the tools they need to build their own economies...It represents a positive step towards a better future. It will provide economic growth on First Nations land.

Other sources of revenue may be added to the stream besides property tax, such as resource rents, government infrastructure payments, casino revenue and grants.

I will close with this comment by Harold Calla:

Like all communities in Canada, First Nations have a right to create good lives for their people...the right to be able to plan for the future, to direct how their money is to be spent and to put in place a system of financial management that will provide a foundation for their children and grandchildren.

Its a real step towards placing control over the financial futures of [First Nations] communities back into the hands of First Nations.

That is why I feel this legislation is an important step and why I will support it.

First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Is the House ready for the question?

First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

Some hon. members


First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

The Acting Speaker (Mr. Marcel Proulx)

The question is on the motion. Is it the pleasure of the House to adopt the motion?

First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

Some hon. members


First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

The Acting Speaker (Mr. Marcel Proulx)

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Aboriginal Affairs and Northern Development.

(Motion agreed to and bill referred to committee)

First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.


Paul MacKlin Liberal Northumberland—Quinte West, ON

Mr. Speaker, I believe that if you seek it you would find unanimous consent that we see the clock as 2:30 p.m.

First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Shall I see the clock as 2:30 p.m.?

First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

Some hon. members


First Nations Fiscal and Statistical Management ActGovernment Orders

1:55 p.m.

The Acting Speaker (Mr. Marcel Proulx)

Therefore, the House stands adjourned until Monday next at 11 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 1:58 p.m.)