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I open this meeting of the Standing Committee on Aboriginal Affairs and Northern Development on Monday, May 29, 2006.
Committee members, you do have your orders of the day before you. The main purpose of this meeting is to hear from witnesses. From the Office of the Auditor General, we have with us Sheila Fraser, Auditor General; Ronnie Campbell, Assistant Auditor General; and Glenn Wheeler, Principal.
From the Department of Indian Affairs and Northern Development, we have Paul LeBlanc, Senior Assistant Deputy Minister of Social and Economic Policy and Regional Operations Sector; Caroline Davis, Assistant Deputy Minister, Corporate Services; Mary Quinn, Director General, Strategic Policy, Devolution Branch, Northern Affairs.
We also have with us, from the Department of Health, Ian Potter, Assistant Deputy Minister, First Nations and Inuit Health Branch.
Welcome to all, and thank you very much for appearing before this committee.
We'll begin with a statement from the Auditor General, Sheila Fraser. Welcome.
We thank you for this opportunity to present the results of our audit on the management of programs for first nations included in our status report. As you mentioned, I'm accompanied by Ronnie Campbell, Assistant Auditor General, and Glenn Wheeler, Principal, who are responsible for this work.
[Translation]
Once a year, I prepare a report for Parliament called the Status Report. This report focuses on what the government has done to address recommendations made in a selection of previous performance audits, and assists parliamentarians to hold the government accountable for its stewardship of public funds.
[English]
Since 2000, I have issued several chapters on programs and services for first nations. We conducted this follow-up audit to provide a comprehensive assessment of the government's overall progress in responding to our previous audits, but also to identify reasons for progress on some recommendations and a lack of progress on others.
We followed up on seven audits completed between 2000 and 2003--audits that examined housing on reserves, health care, comprehensive land claims, economic development, third-party intervention, the food mail program, and reporting requirements for first nations. Federal organizations agreed with most of our recommendations and had committed to taking action. Overall we found that the federal government's progress has been unsatisfactory.
[Translation]
Today, I would like to focus on three issues that are important to the health and well-being of First Nations people, and that require particular attention. They are: mould contamination in houses on reserves; monitoring of prescription drug use; and the review of major entry points for the food mail program.
Problems with mould exist in many on-reserve houses, and mould contamination has been identified as a serious and growing health and safety problem. In our initial 2003 audit we noted that the three responsible organizations — Indian and Northern Affairs Canada, Canada Mortgage and Housing Corporation, and Health Canada — established a committee to address the problem.
In this audit, we found that despite the activities of the committee, no federal organization has taken responsibility for assessing the full extent of mould contamination and developing a strategy or action plan for addressing the problem.
Mr. Chairman, you may wish to ask the government to identify a lead organization to take responsibility for addressing the problem of mould in on-reserve houses, and to provide your committee with an action plan and timetable, and then regular progress reports.
[English]
The second issue is prescription drugs. Through its non-insured health benefits program, Health Canada funds prescription drugs for first nations people and for Inuit. First nations are concerned about the misuse of prescription drugs, and the problem is magnified by significant differences in health standards between first nations people and the rest of Canadians.
In audits as far back as 1997 we reported that the department was slow to intervene when potentially inappropriate use of prescription drugs was observed.
In our 2000 audit, we found that Health Canada had updated its review protocol for drug use to better identify and follow up on cases that suggested misuse of prescription drugs. This protocol involved following up with clients, physicians, pharmacists, and professional bodies and had some positive impact.
But the department stopped this protocol, because management was unsure of the appropriateness of gathering this information without either a legislative mandate that would explicitly allow for this type of analysis or client consent, which would grant permission to the department to analyze private health information. In 2001, departmental officials informed the public accounts committee that within the year they expected to resume this analysis for 70% of clients after it had received their consent.
The department was able to obtain consent for only 25% of clients before stopping this effort in 2004. That same year, we reported that the number of clients obtaining more than 50 prescriptions over a three-month period had almost tripled compared with what we found in our 2000 audit.
In this audit we found that after five and a half years Health Canada finally resumed its detailed analysis of prescription drug use, but it is unable to identify reductions in inappropriate use that are the result of its intervention. The audit also found that the department still has not sought legislation for its non-insured health benefits program. If consent has not already been obtained, the department's approach is to seek consent case by case before informing health providers or pharmacists of concerns about possible misuse of prescription drugs.
Mr. Chair, you may wish to ask the department to provide your committee with a detailed report setting out its current approach to addressing this serious issue and progress reports identifying reductions in inappropriate use that are the result of the department's intervention.
[Translation]
Finally, the federal government's food mail program subsidizes the costs of sending nutritious perishable food by air to Canada's North in an effort to increase the level of nutrition in the diets of northerners.
In 2002 we reported that 140 communities were eligible for this program in the three territories and in parts of northern Labrador, Quebec, Ontario, Manitoba, Saskatchewan and Alberta. Program users in these communities must arrange with wholesalers to send eligible food to Canada Post facilities at one of the 20 designated entry points. Canada Post then assumes responsibility for flying the perishable food to the community within 48 hours.
In our 2002 audit we found that departmental officials, northern merchants, and consumers have suggested that access to more southerly entry points would have a positive impact on both the quality and choice of food and on the time it takes to transport it. However, at that time, no systematic review had ever been done by Indian and Northern Affairs Canada to assess the locations of entry points. We recommended that the department undertake such a review to determine whether changing entry points would make the program more effective.
In this audit, we report that still no comprehensive review has been done. Instead, the department reviewed only one of the program's entry points and it has no immediate plans to review any others. Mr. Chairman, you may wish to ask the department what actions it has planned.
[English]
Mr. Chair, I would now like to turn your attention to the work that we did to understand why some recommendations were implemented and others were not. We identified seven factors that appear to have favoured the implementation of recommendations. Absence of these factors seems to have hindered their implementation and impeded significant change in the lives of first nations people.
We found that federal organizations were more likely to have made satisfactory progress if programs and initiatives were well coordinated, received the sustained attention of management, involved meaningful consultation with first nations, considered the capacity of first nations to carry out programs in their own communities and worked to increase this capacity, and established and involved first nations institutions to carry out program goals.
Further, ensuring that programs and initiatives are based on appropriate legislation helps to clarify roles and responsibilities, eligibility issues, and other program elements.
Finally, we found that the different roles of Indian and Northern Affairs Canada are a critical factor that may have caused an erosion of trust between the department and first nations over time. The department's different roles create at least the appearance of a conflict between its fiduciary responsibilities for first nations and its obligations to act on behalf of the crown.
[Translation]
In my view, ensuring that these factors are fully considered when adjusting existing programs and implementing new ones will make a significant difference in the life of First Nations people.
Mr. Chairman, you may wish to ask the government how it intends to ensure that these critical factors are considered as it moves forward in delivering programs and services to First Nations people.
[English]
Mr. Chair, that concludes our opening statement. We would be pleased to answer any questions committee members might have.
Thank you.
On the first question, concerning the government's response, this is the response that was confirmed at the time when we went to print, from the deputy minister, which we presume reflects the current government's response to this. We have done no work vis-à-vis the Kelowna accord. We would only look at implementation of things like that, or effects after the fact. So I'm really unable to answer if any of the factors that we note in the report as contributing to success are present there or not, because we haven't done any work on it.
On the proposed legislation, on Bill C-2, you are correct. We appeared, we made some comments about overall how some of the provisions in that proposed legislation would apply to us as an office. One of the provisions would give us the mandate to be able to audit recipients of grants and contributions who had received over one million dollars, and that would, of course, include first nations. There's a specific exclusion for self-governed.... There's a very limited number who would be excluded under that. We tried to explain to the committee studying it how we would implement that provision if it were to become law, that we believe it is the responsibility of the government and the government departments and program managers to ensure that the funds transferred as grants and contributions go to the purposes for which they were intended, and that is not ultimately a responsibility of the external auditor of the federal government.
We also mentioned—you are correct as regards first nations—that we have had discussions with the Assembly of First Nations and others, and there was a meeting with government officials to discuss the possibility of the creation of an auditor general for first nations. It is at the very early stages, still at the point of discussion, though there has been an agreement to try to work more substantively on it. There are, of course, major issues around the mandate. If such an office were created, what sort of mandate would they have? How would that office deal with the 630-some first nations? That's one of the major issues that has to be researched, in addition to a number of others. So it's still at very early stages.
And on the last issue, there are two areas where we are very reluctant to give comment: one is on policy, of course, and the other is what we call machinery of government. So government can organize itself as it wishes, and the Auditor General is very reluctant to talk about that. But when we see a case like this, where there are conflicting roles, where the department is on the one hand providing services, is the object of lawsuits, is negotiating treaty claims, it can create, as we've mentioned, at least the appearance of a conflict. The relationship between government and first nations absolutely has to be built on trust, and some of these conflicting roles, we believe, can damage that relationship. So we were trying to make the point that government, in either renewing its programs or bringing in new programs, certainly needs to consider this and whether there are better ways of doing things to try to avoid that appearance of conflict.
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It's a good piece of information for me to have.
I'll ask two questions and then I'll get out of the way and let you respond. In your report, you indicated the funding gap: that population growth was approximately 11.2% and I believe the funding has only increased by 1.6%. In a press release from the Assembly of First Nations, they indicated that since 1996 there has actually been a 2% cap on funding increases for Department of Indian Affairs core programs.
A week and a half ago we had a presentation from the department that talked about the significant demographic growth. These were the department's own statistics, and it was for a variety of reasons. So when you addressed that gap, I wonder if there were concrete recommendations aside from only increasing the funding that could be made to the department. That may be policy, so it may be outside of what you could do.
The second thing I wanted to ask you about was around consultation. Out of the seven factors identified, you talked about meaningful consultation. I know that's been the subject of a number of court cases. In your view, are there elements of meaningful consultation that need to be considered, and was that reflected in this report in terms of consultation from first nations, Inuit, and Métis communities?
Thirdly, do you look at timeliness in terms of government response? In previous reports you talked about comprehensive land claims taking 29 years to settle. I don't think we've seen significant reductions in the speed of response from the department and from the government in terms of addressing some of these critical issues.
I wonder if you could address those three things.
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Just to follow up with that, the Auditor General's report is a good tool, of course, and it sometimes does drive improvements in the lives of aboriginal people. I know you have certain parameters you have to work within, but I think it's important that there's also a holistic view of what the department is responsible for and what the Government of Canada is responsible for.
You see where I'm coming from. If your recommendations strive.... And we will certainly do what we can to move some of your recommendations forward and hold the government to account, whether it's for mould in houses or the food mail program, but if you have to wait five years for another audit to come out on other aboriginal people.... This is only one tool, I realize that, but I would just like to stress that it is important in the lives of aboriginal people.
I have just two other questions. Have you done any assessment of the impact of litigation versus negotiation on the quality of life of aboriginal people? I was an aboriginal leader for ten years. I've often found that the Department of Indian Affairs can be very litigious. I understand fully your comment about the conflict that aboriginal people sometimes have; they say, “You're supposed to be to helping me, but at the same time you're forcing me to go to court to defend my rights and interests”.
Aboriginal organizations dole out tens of millions of dollars for litigation and lawyers, while we're not addressing what we should be addressing, which is housing, non-insured health benefits, and those types of things.
Maybe I can make a suggestion: that in the future, one area that could be looked at is how the process itself is really having an impact. I believe that this relationship issue is foundational and fundamental to how well we're going to do in the future with our aboriginal peoples in Canada. Has any assessment like that been done?
:
Mr. Chairman, thank you, and thanks to Ms. Fraser for being here.
I'm totally convinced that everybody who sits around this table has the best interests of our aboriginal peoples at heart, and that's why we've chosen to serve on this committee.
I certainly agree with Mr. Lemay that we don't want this report and its good recommendations to simply sit here gathering dust and come back to it five years from now to find that nothing has been done.
As I look through the number of issues you identified here, on 15 of which you felt there was unsatisfactory progress, there's obviously a failure to comply with some of the recommendations. My question would be, is it just a failure, is it a reluctance, or is it even possibly a resistance to comply on the part of management?
As I look at a number of the issues here in the appendix, chapter 5, item 15.71 referring to Health Canada, telling us that this measure in terms of assessing prescription drug misuse is not feasible and couldn't be implemented, I don't know all of the nuances behind that answer, but it strikes me as a strange comment in a recommendation that was made.
In addition, on page 4, item 12.121, it states that the small amount of additional information gained from changing its systems would not be worth the investment. And you could go on down that page; there are three others identified on that page.
You indicate that special attention by management is one of the key factors in addressing these issues. My question is, how can we as a committee ensure that management continues to give the kind of sustained attention to these issues? Secondly, if you have time to answer this question, you've identified 15 shortcomings--again, in terms of identifying and addressing all 15, we may get to those--but if we had to prioritize three of them, are there three that would rise to the top? You may not be prepared to answer that today, but it would be helpful for me if, in the future, we could have those prioritized.
Thank you.
Obviously, the work of the committee really gives life to our work when committees prepare reports and table them in the House or when they ask government to respond, when they ask government for action plans and regular follow-up reports. Those are the kinds of things we're suggesting in our opening statement that you might want to consider. So if the committees help us as well to do the follow-up, I think it helps to focus attention.
On the three issues, we have identified three that we think are very important to the health and well-being of first nations people.
In terms of mould in housing, a lead department should be identified and be responsible for developing a strategy and an action plan. I could go so far as to say that it could be tabled with the committee.
On the second one, the prescription drug, perhaps Health Canada could provide you with an update of what they're doing and what sorts of actions they're taking and, again, have regular reporting.
On the food mail program, the government should actually indicate what their plans are for a program that is very important to providing fresh food, nutritious food, to people in the north, which otherwise would be exorbitantly expensive.
Those are the three that we thought were the most significant.
:
Thank you, Mr. Chairman.
In 2002, we audited the number of reports which a typical first nations community had to produce in the course of one year. We noted that four departments required at least 168 reports annually, five of these being audited financial statements. The requirements appear reasonable when one looks at each program in particular, but when you add all of them up together, it no longer makes any sense.
We also examined the analysis departments did of these reports and we noted that they did not use all of the information. Often in our audits, we have criticized the government because it did not carry out adequate analysis.
We feel that the system should be simplified. There should be more coordination, and programs should be simplified. But there should at the very least be coordination. We are talking here about approximately 600 first nations. It should be relatively easy to coordinate information needs.
Moreover, you must understand that the penalties imposed on first nations who do not produce this information are very severe. If they do not produce financial statements, their funding is cut. So they produce the information. However, as most of these communities have few members, this is a heavy administrative burden.
It would be appropriate to simplify the system and see what information the government needs, but, first and foremost, what information the community needs. It could use the information for its management and this would also be useful to the government. Consequently, we think that there should be a way of simplifying the whole system.
:
Thank you, Mr. Chairman. Ms. Fraser, thank you for being here.
As you will have noted, there is a first nations group with us. For 25 years, these people have been trying to obtain decent services. Today, they are still grappling with unthinkable conditions.
Since I have very little time, I would like to put a certain number of questions to you consecutively about the departments involved in Indian affairs. You may answer me afterwards.
On page 178 of your report, you mention the existence of entry points for a nutritious food aid program. You indicate that “based on the results of pilot projects underway in three communities, it is exploring the merits of program amendments [...]”. However, the department only reviewed one of the program's entry points.
I arrived Friday evening from Nunavik, and I took a photograph while I was there of a turkey that weighed approximately 15 pounds. It wasn't my picture, it was a real turkey. Do you know that the price of that turkey was $81? It's hard to believe! And still today, people are asking questions about food aid and the sending of nutritious perishable food by air. Think of rotting mushrooms or rotten head lettuce that sells for $3.59. And that food isn't even edible.
Next, when I read your report, I believe I understood that you were attempting to convince the government to centralize services offered by the Canada Revenue Agency, Heritage Canada and Health Canada within a single department. In matters of revenue, we know that the Inuit are taxpayers. Each hunter is an entrepreneur who provides food to his fellow citizens. However, he cannot deduct his expenses, as opposed to ordinary entrepreneurs.
Ms. Fraser, have you noted a real will on the part of the government to broaden the Canada Post Food Mail Program, as well as the assistance to regular carriers, that is to say the boats that bring goods to the Inuit? There may be aid at the present time, but it is not sufficient. It might be good to recommend that we help them a bit more.
I'm anxious to hear your reply.
:
Thank you for the question.
In terms of what the department is doing on the food mail program, as the Auditor General indicated, her office first recommended in 2002 that we review the entry points, and at this point the report is indicating that we've so far reviewed only one entry point.
In 2002 we indicated we would review entry points on a case-by-case basis.—that's where we saw evidence of situations that concerned us about the quality of the food, or in which the ability to reduce prices because of the program was perhaps not being passed on. We indicated we would review entry points on a case-by-case basis, but we also indicated that our priority really was around the base budget for the program.
The funding of the program hasn't changed since 2002 and 2003, but the costs of the program go up because it's being used and because of such things as fuel. As the AG's office said, look at those costs and look at the entry points as one area to see what can be done about the costs.
What we've concentrated on is the pilot projects that were mentioned. The reason we're working primarily on the pilot projects at this point is to get more evidence to allow for evidence-based decision-making on the base budget of the program. Our sense is that once we have an idea of how the program can be more sustainable in terms of funding, then we can look at other issues, such as entry points, nutrition education, and retail promotion, because you could get the food up there, but if there aren't related programs or initiatives around it showing people about the food—what to do with it, and how it's displayed on shelves—it's.... There are a couple of things to be looked at in the program.
What we're doing, in a nutshell, is to take the results of these three pilot projects and take the results of a review of the entry point at Churchill, and we are developing a package of options for it. This will advise the minister on how he wishes to move forward on the program.
I think you're referring to a contract we're in the process of providing to a private organization. There is a current contract right now, which is being operated by a company called First Canadian Health, and it provides the processing of the pharmaceutical and dental benefits the government pays for. It's a fairly large contract, in the hundreds of millions of dollars, and it follows the procedures the government and the Department of Public Works have set out for major government contracts. Those are that the government should get value for money, an efficient service, and the provision, which is in the Public Works guidance or procurement, that when a contract is primarily targeted at aboriginal organizations, there is a provision within that contract for an aboriginal benefit. There are two provisions in that policy. One is called the “set aside” in which the contract can only be competed by firms that are aboriginal-owned. And the second is a provision that allows for the contract to specify certain benefits that whoever wins a contract will have to provide to aboriginal people.
In examining that--and the government has not made its final decision with respect to how to proceed with that contract--we have been conducting information sessions with corporations that may be interested in bidding. What we have observed is that given the specialized nature of this contracting business, there are very few aboriginal-owned corporations that are able to do this. The current corporation that does it, First Canadian Health, has a large subcontract with another corporation, ESI, which does much of the work.
Therefore in considering how to proceed, one of the options we've put out for getting feedback from industry was the possibility of requiring something like a 20% benefit to aboriginal people from that contract, but that the bidders would not necessarily be corporations that were owned by an aboriginal person or persons. That is what we are in the process of doing at the moment.
:
I'm pleased to answer that.
The issue that was raised with you by the Canadian Dental Association has been resolved, in that the $800 cap has been removed. It was removed in July 2005. So we no longer have a financial limit on pre-approvals. Like almost every dental plan, there are some procedures that do require pre-approval, but there is no financial limit any more.
With respect to audits, the program we operate has no co-payment and no participation fee from the individuals. This is a policy that the government has accepted. In managing the process, though, it does put a higher degree of scrutiny on the shoulders of the payer, which in this case is the government. When we've discussed this approach with corporate private sector organizations, in terms of managing a program like this, they would see the same requirements of management review and audit.
We have tried to work very diligently with the regional dental associations to come to an arrangement--and we actually have a variety of different types at work--so that we can do them in collaboration, if that's possible.
In our audits, we do not look at the question of the professional competencies. We only look to see that the procedures for which the government is being billed were actually required and were performed.
Thank you to Ms. Fraser for appearing before the committee. May I take this opportunity to also thank you for coming up to my riding last summer, because we always say you can read all about the north, but you have to experience it to fully understand the points we're trying to make. So I appreciate that.
I have two areas of concern, some of which I know has been covered by other questioners. My two areas are the non-insured health benefits program and the food mail.
The non-insured health benefits process at times seems to be a bit of an impediment in procuring prescription drugs. It is just so cumbersome for pharmacies, and I know some medical offices actually refuse to take patients who have to submit claims to the non-insured health benefits program, and that then limits the number of doctors or dentists we can access, because they just don't want to deal with trying to get money from non-insured health benefits.
I have also had people, especially nurses in remote communities, tell me of the length of time they have to wait for the approval process for a drug that has been prescribed but is not on the approved list. Because we have no pharmacists in many of these communities, the waiting time is increased by the time it takes. Once the approval process is completed, they have to fly the drug to the community. So a patient could go for weeks without getting the actual prescribed drug.
I don't understand. I use non-insured health benefits, along with my other plan. For one plan, claims are submitted by Internet, but for the non-insured one, there has to be a paper submission. So for these two different medical plans, one just goes automatically from a doctor's office and the other one has to be done by paper submission. I'm wondering if that's one of the options we have to streamline non-insured health benefits, and maybe Mr. Potter can help answer this question.
We seem to experience so much difficulty in dealing with that cumbersome process. There has to be some way of streamlining, as you say, the way of submitting claims, because I do know for a fact that some offices are very reluctant to take a patient if they know that they're going to have to deal with non-insured health benefits.
I'll let you answer that one, and then I'll get to the food mail one.
We agree absolutely that this is one of the most critical success factors. I think in every audit that we have done, as I mentioned, we have received excellent cooperation from first nations communities. We have tried to show examples of where programs are being implemented successfully and where the first nations, in many cases, have even done innovative practices to try to improve the program. In housing, for example, I remember in a report there were examples of communities that had started almost a rental program; others had tried to get funding themselves to increase the stock of housing. On economic development there were are also good examples. I can think of communities that have a 20-year plan and they know exactly where they are in their 20-year plan.
There are a lot of good examples out there, but it's important that the overall capacity, even though there are those examples, be raised. I think we have to realize that many of these communities are very small. To do the delivery of all these programs is very onerous for a community of 200 or 300 people when you have to be responsible for education, social welfare, health. The skill set that is required to deliver these programs is varied and often very specialized.
I'd say we've seen a number of good examples. I think every report will talk about them, but I think there has to be recognition that the capacity overall needs to be strengthened if we expect these programs to be delivered successfully.
I don't know whether the department would like to add anything more.