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.