Madam Speaker, drin queesy shilakat .
I am delighted to speak to Bill C-23 today. There are different views on different aspects of this legislation and there is some lack of clarity in regard to some areas. I hope to quickly get through my speech and then try to add some light to some of the issues that have been brought up, and make sure that people totally understand them and understand why we see, putting all of those issues together, that this bill would be of benefit to first nations people.
I will begin by saying that the bill was started by a group of first nations people. After working with the financial system's institutions, they approached us years ago because they felt they needed these new institutions. We have been working for a long time to bring this issue forward.
My only interest in any of the initiatives that I support here as parliamentary secretary is that of trying to help in conditions for first nations people. If I can be convinced that an initiative will do that, then I will support it. I look forward to listening to the various views on this issue.
I rise to support Bill C-23, the first nations fiscal and statistical management act. The legislation would provide first nations with access to the financing tools they need to promote investment in their communities. This investment will no doubt lead to improvements in the quality of life for residents of these communities.
I believe my hon. colleagues all agree on the clear and pressing need to bridge the economic and social gaps that exist between Canada's aboriginal and non-aboriginal communities. Nowhere are these gaps more apparent than in the lack of capital infrastructure. Many first nation communities lack adequate water and sewage treatment facilities. Other components of basic capital infrastructure, such as roads and power lines, are crumbling or non-existent.
Capital infrastructure is expensive to build and maintain. That is why most municipal and provincial governments finance their infrastructure projects with special measures such as long term bonds and securities. While these bonds may pay low rates of interest, they offer a level of certainty that investors find attractive and, as a result, they will invest in these projects.
First nation communities, however, do not have ready access to the bond markets. As a result, first nations are forced to raised money locally, usually through short term loans that can be relatively expensive. This results in each dollar generated by first nations buying less.
Due to the higher interest rates and transaction and negotiating fees, these communities pay up to 50% more than municipalities or provinces to finance their capital works projects. Consequently, infrastructure projects are either delayed or dropped. Plans for economic and social development stall, and first nations struggle to move ahead.
Bill C-23 aims to breathe new life into these communities. Simply put, this legislation would enable first nations to access capital needed to finance major infrastructure projects by allowing them to issue investment-grade securities, financial instruments similar to government bonds. The first nations that approached us of course found out after years of trying that they just could not do this under the existing financial systems in place in Canada.
The first nations finance authority will play a central role in this venture by pooling the capital requirements of participating first nation communities. By combining the assets and liabilities of all participants, the authority will be able to issue bonds with a credit rating that will attract investors. Discussions with representatives of bond raters and underwriters have indicated that there is every reason to expect that the authority will earn a single A credit rating, which would yield an attractive return for investors, with minimal risk. That is the advantage of combining first nations together in the system: investors will see that their risk is more secure. This is a commonplace activity in financial markets.
Advice on the structure and operations of the authority has been provided by the Royal Bank, the Dominion Bond Rating Services and Moody's Investors Service of New York, key players in both Canadian and international financial institutions. The Municipal Finance Authority of British Columbia has operated effectively for nearly a decade, enabling numerous smaller communities in British Columbia to access debt capital at affordable rates. The Municipal Finance Authority of B.C. has offered to help the finance authority build on this success and minimize investor risk.
As an independent institution, the authority would pool the capital requirements of member first nations and then issue bonds on their behalf so that the persons holding the bond would have less risk because there would be a number of projects involved. Moneys raised would go back to the participating first nations in the form of loans. This process would be strictly controlled through a series of checks and balances.
To become a member of the finance authority, the first nation must have a property tax regime established under this bill and approved by the first nations tax commission. It must also have in place a sound and effective management system certified by the financial management board. Participating first nations must have unutilized borrowing capacity and have a capital infrastructure project approved by the band council and reviewed by the tax commission.
Of course, there is a purpose for all these checks. If we are to convince these Canadian and international investors to invest in these projects, they need to be assured that these checks have taken place, and of course it is great that they would be done by a first nation institution.
I would like to be clear. Bonds issued by the finance authority are based on property tax revenues. There are no provisions in Bill C-23 that would require first nations to use reserve lands as collateral. This is an exciting part of the bill, because anywhere else, including the banks and the financial institutions, they usually would be required to place their land forward. This system is set up very wisely by the first nations, so that it is based only on their future property taxes. They do not have to, under any circumstances, give up their land.
Further, to ensure even greater protection for investors, a minimum of 5% of the value of each bond issue will be kept in a debt reserve fund established by the finance authority. That is just another way of securing things for the investors and it would have a minimum impact on any one first nation that decided to use this mechanism to borrow funds.
In addition, the Government of Canada is committed to contribute up to $10 million to a separate credit enhancement fund, the same fund that was the subject of one of the report stage motions previously before Parliament. The combination of these funds will further support the achievement of the desired single A rating. So once again the federal government will help backstop it, the deposit will help backstop it and, in the long run, the tax regime will help backstop it so that there is no other draw on any first nations assets or land.
All of these measures address only one aspect of the problems facing first nations: that of limited access to capital. To improve the quality of life in first nation communities, aboriginal leaders must also have access to the tools they need to be able to plan effectively. This brings me to the importance of the first nations statistical institute.
Sound planning decisions are always informed by accurate, current statistics. Information on population growth, income levels and property values helps establish government plans and priorities. At present, the quality of first nations social and economic statistics is inadequate. Even such basic statistics as population counts for communities are not reliable. Currently first nations do not have access to the kinds of statistical information available to the majority of Canadians: information on housing, justice, natural resource management, culture, education, employment rates, and health.
The lack of reliable and comprehensive data on first nation communities hinders planning and access to essential economic and social tools. Without reliable comparative material, making accurate assessments of the relative health of any first nation community becomes extremely difficult. Of course these statistics will help first nations when they are applying for program funding. They will have a much better case to make with the availability of these statistics, and we would not be able to say, “no, that is not true”, because the statistics would then be available.
To address this issue, Bill C-23 would establish the first nations statistical institute. The institute would provide first nations with the statistical information needed to plan successfully. It would work directly with aboriginal organizations and government agencies to help first nations identify and meet their information needs. The institute would also play a vital role in assisting first nations to build their capacity to understand and utilize statistics. Thus, first nations would be able to improve their accountability and decision making capacity.
It is important to note the valuable contributions that the statistical institute would make to the property tax and borrowing regimes established by this bill. First nations would benefit from statistics on residents and commercial enterprises on reserve in determining whether to proceed with the implementation of a property tax regime, which of course is totally optional. No one has to get into property taxes if they do not want to. I think there are about 98 first nations to date that have chosen to have a property tax regime and another 14 or so are waiting for this bill. No one has to if they are not interested in doing so. The statistical institute will certainly help those who choose to do it.
First nations would benefit from stats on residents and commercial enterprises on reserve in determining how to proceed with this property tax system. Further statistical information is a required element in the development of the capital projects which underlie the issuing of first nations bonds by the finance authority.
By encouraging first nations to use and thus understand the value of stats, the institute will also encourage first nations to participate more fully in national statistics programs. This will help ensure that the Government of Canada has the statistical information needed to develop and implement efficient policies. In this way the statistical institute will complement the role of Statistics Canada. For me it will be very helpful in lobbying for first nations programs and the resources required if I have these more detailed statistics.
I am convinced that Bill C-23 contains the checks and balances needed to protect the investors, to convince them to invest in first nations and to ensure that first nations can develop their economies. By establishing effective statistical and fiscal institutions, Bill C-23 will lead to significant improvements in the quality of life of residents of first nations communities. I am speaking of the ones that have asked for this bill. Of course other first nations communities are working on other initiatives in other areas and lots of other work is being done by the department in those areas. By providing the community leaders with the tools they need, the legislation will draw more first nation communities into the economic mainstream and clearly all Canadians stand to benefit.
As I said at the beginning, I have tried to dialogue with people to understand some of the concerns they might have had about this and I want to speak informally to try to address some of those concerns.
First, as we know, the Prime Minister held a summit a couple of weeks ago to talk about a new way of doing business. In particular he emphasized the fact that first nations ideas were not just coming from the various parties in Ottawa, but from first nations people. That is what is very exciting about this bill.
We were approached by certain first nations people. Lots of others do not have an interest in this and it is of course totally optional. This idea has come from first nations people. When the first nations people presented the major concerns, as per the Prime Minister's relationship with them, he has taken those concerns and put them in the amendments.
There are two major concerns. First, some people suggested that they are collecting property taxes now and they do not want to change that. They want to keep the Indian Act the way it is. They do not want to be forced into the new regime and some of the elements about which I have talked today. Those provisions were left in the Indian Act. People who want to continue collecting property taxes under the Indian Act may continue to do so. It is staying the same. The new first nations that decide they want to collect property taxes can do so under the Indian Act, if they so choose. As I have said, it is totally voluntary.
The other thing we did in response to the feedback from some first nations was made it totally optional. First nations do not have to participate in this under any circumstances if they do not want. It is not a requirement. Some first nations came to a spot where certain financial institutions in the modern world economy of financing would help them. They asked us to put institutions in place that they could use and anyone who wanted to could use.
Under a new relationship, when first nations people bring something forward, and many first nations have supported this, it is hard to tell them no, we cannot give them this tool, if it is totally optional.
I want to clarify that the $10 million, which I spoke of earlier, from the Government of Canada is not a guarantee. It is a one time contribution. The government does not backstop this institution. I explained in my speech the number of items it would backstop.
This is just one of many bills we have brought forward since the summit. As the House knows, from my perspective land claims and self-government are ultimate goals. They are very successful in my area. We have tremendous efforts going on in that area to complete those as quickly as possible. There is $226 million of extra money in this year's estimates so we can keep moving ahead as quickly as we can on land claims and self-government and the ultimate goal for those first nations that want to move ahead in that manner.
The estimate is that this could take many decades to cover everyone. Some first nations have chosen to have these institutes so they can move ahead in this area. That is why the bill goes along with all the others. We have just passed the Westbank self-government and we are in the process of debating the Tlicho self-government and land claim, which of course is a high priority.
For other first nations, property taxes may be the last of their problems at the moment. They want clean water, sewers and food. They need economic development. They want to get the governing and basic needs in their community taken care of.
There are many programs in the department for those first nations. In the estimates there is an increase of $400 million for other programs to provide for those basic services. That is obviously not forgotten. It is a very big need for which I will continue to push.
There is some suggestion that there are no other options. People have to get their lands assessed if they want to get loans. Nothing could be farther from the truth. This is totally voluntary. First nations have different ways to get loans. They can go to the bank. First nations can set up their own institutions. They can do what everyone else does to get loans. They would not have to do anything under the bill because it is totally optional.
However, the first nations that have come forward have financial institutions, have property tax bases and want to move ahead in managing them themselves. They want institutions governed by first nations people. Those first nations found that they could not get the type of bonding they wanted at a certain level. Therefore, they asked the government to put this process in place. That is why we are proceeding this way today.
The last thing is this is not only for a select few. It is not just for big cities. There are many first nations in rural areas with very little assets. They would like to or are participating in tax collection. If there is any way we could improve it, we would, but we have had improvements since the 1990s in development with advisory boards. These institutions are not in place now, but there are advisory boards of first nations people to help advise on each institution.
That is why there has been so many years of work on this. In my opinion this is why it would be great if we could proceed at this time. Massi cho ;
Gunalchese