AAND Committee Meeting

STANDING COMMITTEE ON ABORIGINAL AFFAIRS AND NORTHERN DEVELOPMENT

COMITÉ PERMANENT DES AFFAIRES AUTOCHTONES ET DU DÉVELOPPEMENT DU GRAND NORD

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 22, 1998

• 1542

[Translation]

The Chairman (Mr. Guy Saint-Julien (Abitibi, Lib.)): Good afternoon. I call the meeting to order.

Today we will hear witnesses from the Department of Indian Affairs. I would like to acknowledge the presence among us of students from the Forum for Young Canadians. We welcome them. We hope that these hearings will add to your experience. Welcome to you all.

Pursuant to Standing Order 108(2), we are studying Aboriginal Economic Development.

Our witnesses today from the Department of Indian and Northern Affairs Canada are: Mrs. Cynthia Williams, Assistant Deputy Minister, Socio-economic Policy and Programming and Program Re-Design; Mr. Glen Bailey, Director general, Economic Policy and Programming; Mr. Bob Watts, Assistant Deputy Minister, Lands and Trust Services; Mr. James Moore, Assistant Deputy Minister, Northern Affairs; Mr. Bruce Myers, Director, Regional Analysis, Northern Affairs; and Mr. Peter Wyse, Manager, Natural Resources, Lands and Trust Services.

Welcome, ladies and gentlemen. We wish you all a very good day. Do you have an opening statement?

[English]

Ms. Cynthia Williams (Assistant Deputy Minister, Socio-Economic Policy and Programming and Program Re-Design, Department of Indian Affairs and Northern Development): Yes, I do, sir.

The Chairman: Thank you very much.

Ms. Cynthia Williams: Thank you very much, Mr. St-Julien.

I'd like to start by joining in with the chair of the committee in welcoming the participants of the Forum for Young Canadians to this session. It's a particular pleasure for me, since I've had the opportunity in the past to be involved with the forum. Indeed, I was the national president for a number of years. So I think it's terrific that you're here, and I hope you're enjoying your week in Ottawa learning about the parliamentary system.

I'd like to thank the committee members for the opportunity to update you on the policy and programming initiatives that DIAND is taking in support of aboriginal economic development.

[Translation]

It is an exciting time for aboriginal economic development, both in terms of the challenges as well as the opportunities.

There are many formidable challenges which have been well documented by the report of the Royal Commission on Aboriginal Peoples: capacity development needs, including workforce skills and experience, and economic institutions; short falls inequity and debt capital; problems of market access; limited access to lands and resources.

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[English]

These challenges, as the committee members know, are very complex. They vary from community to community and from region to region. The challenges are greatest in the reserve-based communities in Canada, where we find, in taking a look at the nature of economic development in the communities, that most of the businesses are small, micro-enterprises, and they serve local markets for the most part.

Reserve communities as well had unemployment rates up to three times the national rate, and these communities are operating under the Indian Act, which places restrictions on the use of loan collateral, which inhibits access to capital.

Nonetheless, despite the enormity of the challenge, my view is that we have a solid foundation on which to build—the foundation that's been becoming more and more solid over the last decade.

As you know, there are now more than 20,000 aboriginal businesses in Canada. About half of these are in or near reserve communities.

An area where there has been exceptional progress is with respect to participation and attendance at post-secondary institutions and graduation rates. There are now 30,000 aboriginal university graduates in Canada, and an emerging business class in that community. In fact some of the research has shown recently that aboriginal people are participating at a higher rate in business programs than are non-aboriginal Canadians—a very hopeful trend.

As well, when we look at INAC's main estimates for the coming year, I believe there's a hopeful trend in terms of stemming social assistance expenditures and increasing the focus on economic development.

We've seen over the last decade big improvements in community infrastructure, which is necessary to support economic development, and we have seen increasing succes of aboriginal businesses in forming joint ventures.

[Translation]

One of the most promising developments is a growing consensus by the aboriginal community, the private sector, and governments on the "win-win" benefits of working together on aboriginal economic development.

For example, the Joint Economic Development Initiative, or JEDI, in New Brunswick brings together the federal and provincial governments, the private sector, the educational community and aboriginal leaders to make progress on development challenges. Since its inception in 1996, JEDI has launched several partnered initiatives on employment, entrepreneurship and business training in the province.

The Assembly of First Nations national chief, Phil Fontaine, has expressed his interest in working in partnership with business and government, and the AFN is working jointly with us in the implementation of the Gathering Strength Action Plan for First Nations.

In British Columbia, an annual "Business at the summit" Conference is building awareness and consensus between business, government and aboriginal groups on opportunities for economic development cooperation.

Other provincial partnering initiatives in Ontario and Quebec are under discussion.

[English]

In January of this year, the government announced its aboriginal action plan, “Gathering Strength”, which provides a partnership vision for aboriginal economic development and recognizes that the private sector and the provinces are key players in aboriginal economic development.

Under the partnership approach, the federal government's primary role is one of facilitator and advocate—working with aboriginal political and business leaders, other levels of government, and the private sector to reduce obstacles and promote economic opportunities.

Economic opportunites, as I mentioned earlier, occur at the grass roots level. We are focusing our efforts in the partnership approach on building regionally based partnerships that respect grassroots needs and priorities of first nations and Inuit.

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I draw your attention in particular to the theme of supporting communities, people, and economies in the government's action plan and would like to review briefly some of the partnering initiatives being pursued in the area of capacity development, access to capital, market expansion, innovation, and lands and resources.

In the area of capacity development, as a partner and facilitator of economic development, DIAND is continuing our strong focus in this area. By far and away our largest economic development program is our community economic development program, funded at $47 million a year. This provides first nation and Inuit communities with the resources to support community economic development organizations by what we refer to as CEDOs, whose primary objective is to identify and pursue business opportunities. In 1996-97 these organizations assisted in the creation or expansion of over 2,200 businesses and report on creating in excess of 10,000 jobs.

DIAND is also working in partnership to increase the capacity of aboriginal community financial institutions. We're working with Industry Canada, the Department of Finance, and aboriginal developmental lending institutions looking at ways to strengthen their management capacity in government structures.

In the area of access to capital, access to equity and debt capital remains a key obstacle for many first nations and Inuit businesses and communities. This is a need that was clearly articulated in the royal commission report and also in the 1997 report of the task force on aboriginal financing. INAC is pursuing a number of initiatives in this area.

On the question of equity capital to help fill the gap, DIAND has a small equity contribution fund, which can be used to assist in business start-ups and expansions in reserve communities. In 1996-97 every dollar that was invested from this fund leveraged $16 from other sources and resulted in the creation of 1,700 direct and indirect jobs in that year.

On the question of debt capital, we're working again with Industry Canada, the regional development agencies, and aboriginal developmental lending institutions to strengthen the aboriginal development lending network and increase access to developmental capital. As well, we're looking at ways to develop the competitive long-term debt financing instruments for first nation governments. We're also participating with the Canadian Bankers Association and the financial services industry to identify ways to increase access to commercial capital by first nation businesses.

Turning quickly to the area of market expansion, in this area we're working again closely with our colleagues in Industry Canada and in Foreign Affairs and International Trade, with aboriginal business and trade associations and with the provinces to expand market opportunities for aboriginal business.

The government's procurement strategy for aboriginal business is building awareness with aboriginal suppliers. It's promoting joint ventures between aboriginal and non-aboriginal businesses and it's resulting in increased aboriginal participation in the federal procurement markets.

In trade and tourism, DIAND is also supporting capacity development of an aboriginal tourism Team Canada and the launch of an aboriginal trade entity in close collaboration with other federal agencies and businesses.

In addition, we're lending support to various regional trade promotion events involving provinces and aboriginal business associations. For example, this coming May there's a major conference in Vancouver, under the rubric of business at the summit, looking at these various issues.

In respect to innovation, the whole question of innovation in process, product, and marketing is important for all businesses. This is particularly true for first nation businesses and communities that are dependent on the natural resources sector.

In an earlier presentation to the committee, Mr. Bob Dickson from Aboriginal Business Canada provided the committee with an update on innovation support activities by Industry Canada.

For its part INAC is working with the aboriginal tourism Team Canada on the development of niche aboriginal tourism products, quality standards and marketing strategies, and with Natural Resources Canada and Industry Canada on improving access by aboriginal business to innovation support in the natural resource sector, including in the traditional economies of trapping and wild food harvesting.

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Another key area of partnership concerns improving aboriginal access to lands and resources, another area flagged in the report of the Royal Commission on Aboriginal Peoples. My colleague, the assistant deputy minister of lands and trust services, Mr. Bob Watts, would like to say a few words on that subject.

Mr. Bob Watts (Assistant Deputy Minister, Lands and Trust Services, Department of Indian Affairs and Northern Development): Thank you.

Another key partnership area concerns improving aboriginal access to lands and resources. As you know, lands and resources are important for our first nations. For many communities, they offer the primary and sometimes the only vehicle for economic advancement. DIAND has recognized this fact in many of its programs.

The resource access negotiation program funds first nations to develop on-reserve resources; enter into co-management arrangements with provincial and territorial governments; and to acquire off-reserve management and harvesting contracts and other arrangements.

In addition, the first nations forestry program funds first nation initiatives to develop their capacity to manage reserve resources and participate in forest-related businesses. This program is delivered in full partnership with first nations.

For the future, we envisage an expansion of the resource access negotiation program beyond merely negotiations. We shall continue to look for opportunities to support expansion of resource co-management arrangements, and we will increase equity contributions available for resource sector business development. A prime example of this is the North of 51 strategy, as presently being negotiated in northern Ontario.

Fundamental to those initiatives is the training and capacity building and technology transfer that is inherent in the agreements. We've begun a process with the Assembly of First Nations and its regional affiliates to identify capacity-building needs in first nation communities, in order that those communities can better manage their own lands and resources.

One aspect of the Indian Act that has been put in place to protect both Indians and Indian land has also been, we believe, a detriment to economic development. This detriment has resulted in administrative cost and time delays in selling reserve lands, leasing lands, and disposing of natural resources. It also limits the opportunities for individual first nation members to mortgage the land they hold under certificates of possession. We are working with the Assembly of First Nations and its affiliates through the lands and trusts services sector plan to look at the adequacy of the Indian Act and some of the regulations that flow from the act and to see whether or not there's opportunity or changes in those areas or in administrative policies to better manage first nation lands.

One proposed initiative that has been under development for some time is a first nation land management act, which will remove first nations from some of the most archaic portions of the Indian Act and return control over those lands to those first nation communities.

Thank you very much.

Ms. Cynthia Williams: Mr. Chairman, I know some of the committee members also have an interest in economic development issues in northern Canada. My colleague Jim Moore, who is the assistant deputy minister of the northern affairs program, is here to say a few words on our initiatives in that region of Canada.

[Translation]

The Chairman: Thank you, Madam.

Mr. James Moore (Assistant Deputy Minister, Northern Affairs, Department of Indian and Northern Affairs Canada): Thank you, Mr. St-Julien. I would like to begin with an initiative that could in our view improve economic development in the whole territory and, we hope, amongst aboriginal communities.

[English]

Last February 24 the Honourable Paul Martin tabled his budget plan for 1998, and he announced that the federal government, in partnership with northern governments and other northern economic stakeholders, both aboriginal and non-aboriginal alike, is committed to developing a modern economic strategy for the north, a strategy that would recognize the dynamics of the north and the need to establish a more diversified economy.

The northern affairs program sector of Indian and Northern Affairs will coordinate on behalf of the federal government the preparation of this strategy. During the course of this work, we expect to engage and cooperate with and obtain the expertise of a number of federal departments. But perhaps more importantly, we'll cooperate with and gain expertise of governments in the north and as well of a wide range of stakeholders both in the private and public sectors.

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We expect that this strategy will be driven, or led, for the most part by northerners primarily out of our Yellowknife offices together with the GNWT regional offices in Whitehorse, and in turn in Iqaluit in the eastern Arctic.

We would see the strategy being very much regionally tailored. It will be adapted, we hope, to accommodate varying economic circumstances across the three regions in the north: Yukon, NWT, and the new territory of Nunavut, which is soon to be.

As you probably are aware, the percentage of population that's aboriginal-based in those three territories varies widely. It's from about 25% to 30% in the Yukon to as high as 50% in the western NWT. Of course, the majority, which is more than 80%, come from the territory of Nunavut, which is soon to be.

In the north, north of 60 degrees generally, we have a mandate that's somewhat different in the department from that of south of 60. We are still very much in the business of managing natural resources in the north. We hope that by being positioned in a mandate and in a situation where we do have those responsibilities, we can work closely with our stakeholders. Perhaps we can make some improvements not only in the resource management regimes, but by stimulating some economic development activities through changes that we can make in managing those regimes.

We're sure that we will be urged as we proceed in developing this strategy to facilitate a much more accelerated development of the resource base in the territories. We're presently at a very early stage of the development of the strategy. We're beginning to identify and arrange exploratory discussions with our key aboriginal public and private sector partners. We would hope to have a framework ready for ministers in fall 1998. Perhaps it might slip into winter 1998.

I think that's all I wanted to say vis-à-vis the development of the strategy, but I did want to add just a couple of comments perhaps to give committee members a flavour for some of the more significant activities north of 60 that are ongoing right now that are very much a part of stimulating the economy in the north.

I won't go on at length, but I'll just give you a couple of examples. There's the diamond play in the western arctic. The Broken Hill Proprietary Company mine in NWT has concluded a socio-economic agreement with the Government of the NWT. They've also concluded impact benefit agreements with at least two aboriginal groups in the area. In fact, they're working with four aboriginal groups.

Those impact benefit agreements would result in significant spin-off benefits, including employment. In some cases, there would be other kinds of benefits for these groups as BHP develops their mine and goes into full-fledged production, which in fact will occur in fall 1998. This company alone has committed to spending about 28% of its total procurement bill for construction materials in the north and contracts that go to northern-based companies. Their total business expenditure is about $150 million so far. So there's a tremendous opportunity just with the diamond play alone.

The second mine that will be coming on stream is called Diavik Diamond Mines. It has just recently completed its project description and permits application. It spent about $80 million on pre-development work to date, which has meant an infusion in the local economy. They have signed cooperation agreements with the Dogrib Treaty 11 Council and the North Slave Métis Alliance. They hope to begin production in their mine three years downstream, but they will be employing about 600 individuals during construction. A significant number of those jobs would go to aboriginal individuals in the area. And again, they will be spending a tremendous amount of money on construction materials as well.

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I have just one more example, if I may. The Nunavut construction company in the eastern Arctic is owned by Nunavut-wide and Inuit-owned Nunasi Corporation, as well as by several regional Inuit-owned development corporations. They've been contracted by the federal government to build, own and then lease back to the government new housing and office space. They began their work in 1997, about a year ago. They're on target with expenditures of about $20 million, with 106 out of 125 construction employees who are Inuit.

Those are just a few examples of some significant economic development activities north of 60.

[Translation]

Thank you very much.

The Chairman: Thank you, Mr. Moore. Mrs. Williams, please.

Mrs. Cynthia Williams: To conclude, Mr. Chairman, I would like to thank the committee for this opportunity to present an update of our department's contribution to the economic development elements of the government's action plan on aboriginal issues.

As you can see, many things are happening. We are encouraged by the increasing involvement of businesses, provincial and territorial governments as partners.

[English]

The partnership approach is providing good opportunities to reduce barriers and to facilitate access to opportunities, particularly at the regional grassroots level. We're very encouraged by the increasing involvement of business and other levels of government. We're pleased that economic development has become the key focus of this committee's work. Mr. Chair and members of the committee, we look forward to your report and to your recommendations.

[Translation]

Thank you.

The Chairman: Thank you, Madam Williams.

Before we go to the first round of questions I would like to explain to our young students that our committee is presently comprised of 16 members, many of whom also sit on other committees or at the House. As you know we have a lot of work at this time. Before we start we will go around the table to allow members to introduce themselves and tell us which region of Canada they represent.

Mr. Konrad.

[English]

Mr. Derrek Konrad (Prince Albert, Ref.): My name is Derrek Konrad. I'm a Reform MP for Prince Albert constituency, which is in Saskatchewan. It's John Diefenbaker's old riding.

Voices: Oh, oh.

[Translation]

Mr. Claude Bachand (Saint-Jean, BQ): My name is Claude Bachand and I am a member of the Bloc Québécois for the riding of Saint-Jean, 25 miles south of Montreal.

[English]

Mr. Gordon Earle (Halifax West, NDP): My name is Gordon Earle. I'm the member of Parliament for Halifax West in Nova Scotia.

Mr. Bryon Wilfert (Oak Ridges, Lib.): I'm Bryon Wilfert, the Liberal member of Parliament for the riding of Oak Ridges, which is Richmond Hill, Whitchurch-Stouffville, and northern Markham.

Mr. John Finlay (Oxford, Lib.): I'm John Finlay, vice-chair of the committee. I'm from the riding of Oxford in southwestern Ontario.

[Translation]

Mr. Bernard Patry (Pierrefonds—Dollard, Lib.): My name is Bernard Patry and I am a member for the riding of Pierrefonds—Dollard in the Montreal area. I am also parliamentary secretary to the minister of Indian and Northern Affairs.

The Chairman: My name is Guy St-Julien and I represent the riding of Abitibi, in the largest of the 10 provinces. I maybe the only Quebec MP coming from north of 60. In my riding there are 40 Inuit communities, 8 Cree communities and 3 Algonquin communities. The riding covers an area of 802,000 square kilometres with a population of 96,000. Thank you.

We can now go to the first round of questions and we will start with the opposition.

Mr. Konrad, go ahead.

[English]

Mr. Derrek Konrad: Thank you. I'll try to make it fast.

In government for natives, we have DIAND and AFN. In Saskatchewan we have FSIN. In my own riding, I have the Prince Albert Grand Council, bands and individual natives. That's a lot of government. Do you work strictly with AFN, or are there agreements with all levels?

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Ms. Cynthia Williams: There are agreements with all of the levels you've mentioned, right to the local band. We have work under way with the AFN particularly focusing on some of the national issues, especially access-to-capital issues, trade-related issues, issues that operate at the national level. Then at the regional level, each of our regional offices has an ongoing partnership with the political organizations and government organizations in that region. In the case you mentioned it's the FSIN on the Saskatchewan-wide level and then the grand councils at a sub-regional level, to the local band level, where some specific programs like the CEDO program I mentioned is delivered.

Mr. Derrek Konrad: We were just discussing the Nunavut bill, and I wonder if there are any plans to reduce the size of DIAND to take up the slack in the extra expense of managing and implementing an entire new territory. If so, what are your planned reduction targets for that area so that the funds will be used for other purposes?

Mr. James Moore: Thank you for the question. We're currently looking at the structure and the number of staff we would need to ensure that we had a reasonable DIAND presence in the new territory of Nunavut. It is likely that if there's to be an increase in the size of the regional office in Iqaluit—and I will predict that there will be—it will be attained from existing resources. In other words, we would take some resources that are currently resident in Ottawa in the Nunavut secretariat support area and as well resources that are currently managed out of the Yellowknife office but delivered in Nunavut and incorporate those into the regional office.

So the short answer is we're going to do this without any significant incremental increase in funding.

Mr. Derrek Konrad: Thank you.

Do I have any time left?

[Translation]

The Chairman: Yes, you have one minute left.

[English]

Mr. Derrek Konrad: I will turn it over.

[Translation]

The Chairman: Thank you, Mr. Konrad.

Mr. Bachand.

Mr. Claude Bachand: I have a question for Mrs. Williams. I understand that the social assistance budget is presently at $656 million, which is a reduction of $15 million. I always ask the minister when he comes to our committee if it wouldn't be possible to reverse the programs, i.e. to give the $656 million from social assistance to economic development and to provide $15 million for social assistance. I was told that it wasn't possible.

Since the social assistance budget is lower couldn't those $15 million be allocated to economic development, which in my opinion would accelerate the transition of people to self-sufficiency? Can you do that during the year or are the envelopes closed?

Could you, at the end of the year, say that the 15, 20 or $30 million saved on social assistance could be allocated to economic development? My objective is always the same, i.e. to increase the rate at which Aboriginals are cutting their dependency to social assistance.

Mrs. Cynthia Williams: I thank you for that question, Sir.

[English]

I find and my colleagues find the notion is that inversing the welfare budget and the economic development budget is the goal we're in search of. It's the goal we're after. I'm really pleased in looking at this year's numbers, where we see the small increase on the SA budget of about $15 million, to be able to report that at the same time the economic development budget is growing by about $15 million. I hope this is a trend that can continue into the future.

Part of my job is on the economic development side, but it's also on the social assistance side. As you may know, in the action plan “Gathering Strength” there is a commitment to reform the welfare system. As we look at doing that we have very much in mind using those SA dollars in more innovative and creative ways to enable us to use that money to support people getting off welfare and into jobs and employment opportunities.

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At the macro-level, converting welfare expenditures into economic development expenditures is exactly what we would like to do. Even en route to that, as we look at welfare reform, let's look at using the welfare dollars to support the active measures, the investment in training, the creation of job opportunities that will enable people to move off permanently and into productive employment.

I might say that this is a goal that is shared with our partners in first nation communities. We're working very closely with the AFN on welfare reform, and they share exactly that goal of long-term reduction in welfare dependence.

[Translation]

Mr. Claude Bachand: I will come back for the second turn.

The Chairman: You still have some time but we will add it to your second turn.

Mr. Claude Bachand: Since my second question is a little longer, I will wait until the second turn.

The Chairman: Thank you.

Mr. Earle, please.

[English]

Mr. Gordon Earle: Thank you, Mr. Chairman. I have a question for Cynthia Williams.

On page 4 of your presentation you mentioned the expansion of 2,200 businesses. You said this gave rise to around 10,000 jobs. Would those jobs be full-time, part-time? Are they sustainable jobs that would continue on and create some meaningful employment, or are they just sort of a one-shot thing?

Ms. Cynthia Williams: The number comes from the report that is provided to us annually by the CEDOs at the community level.

They're a combination of full-time and part-time jobs. They are jobs that are created in relation to the CEDOs' work, which is in business expansion and start-ups. So they're jobs that are related to the business activities.

Are they long-term jobs, or are they sustainable jobs? That, of course, is tied to the viability of the business. We hope, and I'm sure the community hopes, that they are indeed long-term jobs. Even in cases where they're not, I would say that one of the things that's really important is that they're giving people job experience. So ideally they're permanent jobs. When that's not the case, hopefully they are a trampoline or a bridge to permanent employment.

Mr. Gordon Earle: Would that answer apply to the same thing on the next page, the 1,700 direct and indirect jobs in the year mentioned there?

Ms. Cynthia Williams: These are jobs that are created through the opportunity fund. Again, in that case we go back into the communities and ask for reports on the performance of those businesses one year later.

I think that in his presentation to the committee Mr. Dickson mentioned that the failure rate among aboriginal businesses is lower than the failure rate nationally for businesses. So that leads us to be hopeful that they're ongoing, continuous work. Again, in instances where they're not, we hope that people are acquiring skills that will help them move to the next employment.

Mr. Gordon Earle: The next question then is for the gentleman who spoke about lands and resources. You mentioned the management of first nation lands, and you're talking primarily about forests, and so forth. Is there any strategy for crown lands and are any negotiations taking place in light of the recent court decisions concerning harvesting of trees on crown lands, or are you dealing primarily with first nation lands? I'm trying to sort out—

Mr. Bob Watts: I could answer part of that. Thank you for the question.

The first nation forestry program deals with both lands on reserve and the development and cultivation of those forests. It also allows first nations to enter into negotiations with potential partners in the private sector and provinces in terms of the development and co-management, or joint venture development, of lands off reserve. So it serves two purposes: some of these are crown land, and some may be other types of private land that are adjacent to reserve communities.

Mr. Gordon Earle: With regard to mining, you mentioned mining and the strategy in the north. Are there any royalties involved in terms of the mining activity? Do the aboriginal people receive anything in the way of royalties, ores or minerals that may be on lands that are aboriginal lands?

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Mr. James Moore: For north of 60 the royalty sharing is between the territorial governments and the federal government.

For the most part, the benefits for the aboriginal groups accrue through the exploratory work and the production work that goes on by the mine hiring aboriginal people, perhaps through joint ventures with aboriginal-based businesses, etc.

Mr. Gordon Earle: But is there any specific training for aboriginals other than labour work in the mines? Would there would be any training so that they may eventually end up being key players in the mining industry?

Mr. James Moore: Absolutely. For the diamond industry, as an example, training is taking place at almost all stages in both the exploration and the production part of the mining operations. This includes sophisticated downstream activities related to the sorting and valuing of diamonds.

So there is a lot of concern and attention being paid by the industry. This is through ensuring that there's a good spectrum of training available so that you can in fact ensure that you have aboriginal participation at all sorts of levels in the industry.

I would just like to correct my earlier response. The other point is that I hadn't thought of the fact that where you have a land claim settlement, there may well be sharing of royalties with aboriginal groups.

Mr. Gordon Earle: Thank you.

The Chairman: Mr. Finlay.

Mr. John Finlay: Thank you, Mr. President.

In several places in your presentation, for example on page 1, you mention the Indian Act and prohibitions on the use of loan collateral inhibiting access to capital. Then it's mentioned again on page 5 with respect to financing instruments for first nations governments, and so on. I understand that's one of the hold-ups from involving our banks or other Canadian investors in aboriginal enterprises. Can you update us on that? Should we be doing something with the Indian Act?

Voices: Oh, oh.

Mr. John Finlay: We tried to do something a couple of years ago, and we managed to do something. But we have to have some cooperation from the first nations on some of these things. Where does that stand?

Mr. Bob Watts: Thank you for the question. That's a very leading question for someone who's in charge of most of the Indian Act on a day-to-day basis.

The Indian Act is definitely a prohibition against development. There is some good news, though. In partnership with first nations, a number of banks have either formed joint lending institutions or are examining other financial vehicles that would allow mortgage-like vehicles to be developed for both housing and business purposes on reserve. There are several examples in southern Ontario where this has happened. It's not widespread, but hopefully it may become a trend.

Over the last several years we have worked with a number of first nations to develop the first nations land management act. It's a proposed act that we hope will be able to move forward some time in the very near future. It will exempt those first nations from the parts of the act that basically put the control over land in our hands. They'll be exempted from that. That control will be put in the hands of the community.

I think that the opportunity for full-scale revisions of the act and its associated regulations is still some time off. Self-government agreements that are being negotiated address some of these issues directly. So there's hope in terms of those agreements.

We've also entered into a nation-wide process with the Assembly of First Nations and its regional and local affiliates to look at both statutory and regulatory changes that first nations would promote. We would jointly develop these, and hopefully bring them forward to update the Indian Act, or exempt communities from some of those parts of the act that are really prohibitions to any sort of development.

Mr. John Finlay: Thank you.

You've mentioned these first nations land management acts. Do we actually have some in force, or would they have to go through Parliament?

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Mr. Bob Watts: That act would have to go through Parliament. It's been jointly developed with first nations over the last several years. They went through processes with their communities to develop codes and to work with financial institutions in terms of the development of those codes to assure there's some comfort there. But that hasn't come to Parliament.

Mr. John Finlay: We haven't seen one yet. This committee hasn't worked on it.

Mr. Bob Watts: In the previous government there was a bill in the House. It died when the election was called.

Mr. John Finlay: But it seems to me that might be a key to really freeing up credit and advancing the whole economic development activity of first nations. Or am I being too optimistic?

Mr. Bob Watts: No, I think it's a very important key, in terms of freeing up land for economic opportunity, giving comfort to financial institutions, and instilling pride in the community in terms of management of their own lands.

Mr. John Finlay: I have one other question. We've heard a lot about micro-credit in developing countries, and so on. Is that available, or has any work been done on that with respect to home-grown native businesses or...?

Mr. Glen Bailey (Director General, Economic Policy and Programming, Department of Indian Affairs and Northern Development): I might respond in part to that. A number of mechanisms do provide.... There are some youth entrepreneurship micro-credit facilities. Aboriginal Business Canada has been doing some work on that, and we've done a project with the aboriginal capital corporations, which provide developmental lending or a mechanism for small-enterprise youth funding. Then, of course, there is the opportunity fund and the work that Aboriginal Business Canada does.

In terms of your earlier question, I might also refer to the task force on aboriginal financing. In its recommendations there was a question of whether there should be a kind of voluntary opting-out clause.

So I think this is an issue that is being discussed and approached within the aboriginal community. There's talk about this being something that might be.... I wouldn't say there's necessarily a consensus right now, but it's something people are looking at.

Part of the work we've been doing during the financing forum discussions that we've been having at a very technical level with the banks showed two things. The first is that banks are increasingly looking at the relationship they have with borrowers. So while physical asset security continues to be an important issue for them, they're also looking at the relationships they are establishing with the band councils, the development corporations, etc., as an important element of their risk assessment.

The other thing we've been doing is trying to clarify a number of the mechanisms under which the department and the government, either in terms of the administration of the Indian Act and how that affects issues the bank is looking at.... We've been developing some products. We hope that in a number of months these will be available to bank managers at the local level so they will understand better what these documents are and what they mean to them. It will give them better certainty and understanding of the risk when they're taking a look at particular proposals. The banks are finding that very useful.

Mr. John Finlay: Thank you.

[Translation]

The Chairman: Thank you, Mr. Bailey. Before we go on to the second round, I would like to ask Mrs. Karetak, who has just arrived, to introduce herself. Today we have as guests some students from the Forum for Young Canadians. They come from all regions of Canada and all the members introduced themselves. Would you do the same, please?

[English]

Mrs. Nancy Karetak-Lindell (Nunavut, Lib.): I am the member of Parliament for Nunavut, which will be the new territory, come April 1, 1999.

Even though I'm one of the smallest members here, I have the largest geographical riding.

Voices: Oh, oh.

Mrs. Nancy Karetak-Lindell: My riding is almost 200,000,000 square kilometres. If you want to look that up in the map of Canada, it covers a big chunk of Canada.

A voice: Nearly one fifth.

[Translation]

The Chairman: Thank you, Madam.

Mr. Konrad, you have seven minutes.

• 1630

[English]

Mr. Derrek Konrad: Thank you. I'm not sure I can use up seven minutes, but we'll see.

My first question is about procurement, here on page 5. It talks about building awareness, promoting joint ventures, aboriginal participation, joint supplier development initiatives, and increased aboriginal access, all of which are good ideas. Are you doing that by basically legislating people into these things? Are you encouraging it by funding, or a mix, or how is that done?

Ms. Cynthia Williams: Glen may want to add some comments to what I have to say.

We have in place the government's policy on aboriginal procurement, which has been in place since 1996. It provides that where there is a government contract that is valued at more than $5,000 and where it's designed to provide benefits or services to a primarily aboriginal population, that contract should be set aside for competitive tendering by eligible aboriginal firms.

There is a provision in the policy that an eligible aboriginal firm can include a joint venture. One of the really positive developments from the procurement policy has been the increased number of joint ventures that we see. The policy defines an aboriginal firm as having 51% or more aboriginal ownership.

So we have the policy in place. You asked if it is legislated. No, it's not legislated, but DIAND has a responsibility to champion the policy across the federal government. So we've been working with departments over the last two years to assist them, provide guidance to them as they set an annual plan for their procurement strategy. Beyond that, we've been working with the departments to assist them in identifying contracts that are indeed providing primary benefit to an aboriginal population.

It is a new policy, so there was a lot of building to do. It was new ground for a lot of departments, and the first year was spent in explaining the policy to the departments. But I'm happy to say we're now into the second year, and departments are gaining a lot more experience.

There are several very positive experiences at the departmental level. In fact I'll be chairing a meeting in May that will be the first opportunity for all the ADMs of the departments to come together, share experiences, learn from each other, and so on. That's on the government side.

On the aboriginal suppliers' side, we've also spent a lot of time working with the aboriginal suppliers to assist them in developing the skills and capacity to access the government world. It's a pretty complicated world that used to involve the open bidding system, which we've discovered requires a fair bit of investment just in developing the skills to read the contract, see what it's about and understand what the government procurement rules are.

Again, one of the results over the last two years has been an increase in the number of suppliers departments have become aware of, but an increase in the number of aboriginal businesses who see opportunity now. They might see their first market opportunity being to access the government contract. It gives them the experience in contract performance and then strengthens their ability to access other procurement. So that has been the focus of our work to date.

You might say in the case of DIAND, as to one of the results, before the procurement policy was in place our own department was purchasing about $4.5 million a year from aboriginal suppliers. We are now purchasing in the vicinity of $25 million a year. So the strategy has really been a challenge to us, an opportunity for us to become a lot more familiar with the aboriginal suppliers who are out there. For a department like DIAND, where indeed we're in the business of serving aboriginal people, we think this is a very positive development.

Mr. Derrek Konrad: I have another question. It concerns the access to communities that you were discussing earlier. How do you determine....? I'm from Prince Albert. The city of Prince Albert is also in my riding. It's a city of 40,000 people. The highways are crumbling going up to it from the east. I happen to live 85 miles east, and I know what it's like. Also, there were four railroads—it was a fairly major rail route there—and all of a sudden we've lost three railroads and the fourth one has been sold to Omnitrax because of lack of business. So now they're down to one railroad and nobody's happy about that. This is a city of 40,000.

• 1635

Just northeast of the community I happen to live in, about 80 miles of road goes to a community of 1,000. They just built a $6 million bridge over the Saskatchewan River to access this community of 1,000.

Can you tell me what criteria you use? Is it population-based? Is it economic activity that's already there, or is it activity that you think might happen? What are the criteria? What is the cost-benefit ratio? How do you determine when you're going to maintain 100 miles of road to a community of 1,000 or down to 200 or 300 people?

Ms. Cynthia Williams: I don't know the specific road you're talking about, so I don't know if it's all DIAND-funded or whether it's a provincial road, but I can say that in the case of major capital investments by DIAND, there is a process in place at each regional level. Capital plans are prepared, and any major capital initiative has to work its way onto the regional plan. The regional plan assigns priorities to different initiatives.

There are always lots more things that need to be done than there is money to do them, so decisions have to be taken and priorities set. The capital budget of course doesn't just include roads. It also includes things such as schools, water and sewer—municipal-like services on reserve. So the capital plan addresses all of those issues.

In each case an assessment is done that determines where in the order of priorities a particular initiative would come. Again, I can't speak to the specifics of the case you mentioned, but the assessment would take into account as many factors as possible. So economic development proposals would be a part of it, but they wouldn't be the only part. It would also have to do with other activities going on in that community. And, for example, is there alternative access to that community or is this the only road in? That sort of thing. Those plans are set regionally.

Mr. Derrek Konrad: The thing we're finding now of course is that everybody from the little community drives out, because it's so easy now, rather than staying there and shopping in the community. Now they come down to Nipawin and Prince Albert and places like that. It seems to have worked a little bit the wrong way.

Ms. Cynthia Williams: Well, I hope it means businesses drive in too.

Mr. Derrek Konrad: The point is that as we develop, sometimes it goes the wrong way. When you go to these things, are you sure there's going to be a maintaining and building up of what's there?

Ms. Cynthia Williams: Well, we certainly try to take all those considerations into account, both the access out and, importantly, the access in. As I said, we hope as many businesses find it attractive to locate closer to the reserve community, given the possibility of—

Mr. Derrek Konrad: I just have one more question, if I have time, please. It concerns the type of economic development that's being done.

What percentage would be tourism-related within what you're doing, how much industrial, how much forestry, and how much mining? Do you have a figure that says so many dollars, or total dollars and percentage, or something to that effect?

Ms. Cynthia Williams: I haven't calculated that number per se.

Mr. Glen Bailey: We haven't done a sectoral breakdown. I would say that in the Opportunity Fund—and this is kind of off the top—about half of the projects, if not more, are related in some way to the resource sector. In particular when you're dealing with the on-reserve population and starting up new businesses, then you're often dealing with the more remote areas, in which case the resource sector is very important.

• 1640

Not necessarily DIAND but Aboriginal Business Canada have made tourism one of their areas of priority, so they're doing quite a bit, and we're also working with them in that area. One of the projects we did in Six Nations is the Woodland Cultural Museum, which is an important drawer in of people to the Six Nations Reserve. It's a lot of school tours and tourism and they're working with the City of Brantford in trying to develop a tourism package that draws upon the advantages of having the reserve there and being able to talk about the aboriginal history of Canada.

[Translation]

The Chairman: Thank you, Mr. Konrad.

I have a special favour to ask. Mr. Wilfert would like to ask questions and I wondered if you would mind.

Mr. Claude Bachand: Is that usual?

The Chairman: No, Mr. Bachand.

Mr. Claude Bachand: You're asking me to make an exception?

The Chairman: Yes, if you would.

Mr. Bernard Patry: I think it can be allowed.

Mr. Claude Bachand: Well, as I am a generous soul, I grant you that permission, Mr. Chairman.

The Chairman: Thank you, Mr. Bachand.

Mr. Wilfert, go ahead.

[English]

Mr. Bryon Wilfert: Thank you, Mr. Chairman, and I thank my colleague.

Mr. Claude Bachand: You're welcome.

Mr. Bryon Wilfert: Sorry, ladies and gentlemen, I was away, but as the chairman said, they don't provide you roller skates in this business.

The last comment you made was quite interesting, because it ties in with what I was going to ask. You mentioned the City of Brantford and about tourism, and throughout the presentation read about, particularly as we know from the “Gathering Strength” document that Tom talks about, local grass roots, the building of economic development activities at the grass roots. We turned to one of my favourite themes, and that is of course the role of municipal governments as economic generators and of course the centre for aboriginal municipal affairs in Ottawa that was established in conjunction with your department and the Federation of Canadian Municipalities. As the past president of that organization, I want to underline very strongly the need for collaboration, particularly between aboriginal groups and organizations and municipal governments and the fact that we know there are many best practices out there.

You just highlighted one in fact in the minister's own riding, which indicates that there are great success stories out there. When we talk about economic development we talk about the provinces, we talk about a region and we dance around but we don't really mention the fact directly. Constitutional niceties aside, the fact is that if you want to develop strong partnerships, those that have the database in terms of the needs and communities are obviously those economic development departments or those municipal centres that know what the needs are. There are many practices, including in places such as Saskatchewan, British Columbia, etc., where these are going on.

My question basically is to what extent have you been involved, to what extent are you being involved at this point, and what do you see as the opportunities for the future in this regard?

Ms. Cynthia Williams: Mr. Chairman, perhaps I could speak to the institutional relationship with the Canadian federation and Glen might speak to some specific initiatives with municipalities.

We were very delighted to see the initiative taken by the federation a year and a half or so ago to set up a particular stream of activity to promote aboriginal municipal relations. I was very pleased that one of my own staff members has gone over to work on that very subject at the federation so it provides an ideal opportunity for us to explore those opportunities and establish bridges in our initiatives.

I should also underscore the very point you're making. We mentioned earlier that so many of the business opportunities—and businesses in first nations are small businesses—are serving local markets. The relationship with the adjoining communities is critical and there are all sorts of examples that underscore that, how a good working relationship between the first nation community and the municipal government produces win-win situations. A number of examples come to mind on that sort of issue. We're very pleased that the Federation of Canadian Municipalities has identified this as a priority and we look forward to working with them on that.

Mr. Glen Bailey: I just want to mention that there is an association called CANDO, which has been providing support to the community economic development officers based in aboriginal communities. One of the things they did with some support from us was to develop a certification program with a number of community colleges across Canada.

• 1645

I was in Edmonton recently talking with the person in charge of that, and I was told that there is a similar association of municipal economic development officers for whom there is no such training program. They are in discussions now to see how that particular program could be adapted and used for those municipal economic development officers. That is an interesting example of the kinds of linkages being developed.

This is an area where we've also been talking with our colleagues in Agriculture Canada in terms of looking at the rural partnerships. They are also looking at this whole issue of how you can build win-win. One of the things they've been doing is sponsoring a series of rural fairs. We've been encouraging them to try to find ways in which the rural fairs can involve the communities together so that they start to take part in this and see themselves with a more holistic kind of perception.

Those are the kinds of opportunities that we see and that we're hoping to build upon in the future.

The Chairman: Mr. Moore.

Mr. James Moore: Thank you, Mr. Chairman.

I would add that in the north, whether in the Yukon or the Northwest Territories—and I expect the same is true in the soon to be territory of Nunavut—the economic development being generated there is being done in strong partnerships with communities and municipalities right across the north. In the western Arctic, for example, the territorial government has positioned economic development officers in each of the municipalities and communities, so there is a very strong linkage in the north as well.

Mr. Bryon Wilfert: I believe very strongly in working together and that win-win is possible. It's critical that we don't treat separate entities, but we are looking at building those bridges. If you can do it on the ground floor, I think you can do it anywhere.

[Translation]

Thank you, Mr. Bachand.

The Chairman: Thank you, Mr. Wilfert.

Mr. Bachand.

[English]

Mr. Claude Bachand: I was going to follow up on Mr. Konrad. I was afraid for a moment that you were suggesting cutting the road or blowing the bridge so that economic development would be promoted in the only community. I am reassured now.

[Translation]

I would like to talk about economic development. I feel that there one aspect of it is too often ignored. We often talk about economic development generated by the private sector, but I would like to ask my first question on economic development that is linked to the public sector.

Among the many possible examples, I would like to mention Nunavut—that we discussed this week—where there is a proposal to create some 600 to 700 jobs around the new legislative assembly that will open on April 1, 1999. There will be training for those jobs. I find that 600 to 700 jobs is an important contribution to a region such as Nunavut because it can promote buying. People should start spending more and that could give rise to new businesses to serve the consumers needs. So it is an important aspect.

I also would like to know what is your department strategy on the fact that more and more governmental responsibilities are being transferred to Inuit or native communities since there is a movement towards self government. It is something very important and I would like to know if the department has developed a strategy to encourage that transfer of responsibilities.

Obviously we must be careful not to go to the extreme by creating an excessive bureaucracy, as we have seen in the federal government, so that the public sector becomes larger than the private sector. There are limits.

I know that for remote communities in particular, all program decisions were made in Ottawa. Now that we are decentralising those programs more public sector jobs will be created in those communities.

With regards to Nunavut, the plan is also to decentralize government, which means that those jobs will be spread out throughout the territory and so will the wealth. So I would like you to explain what kind of strategy you are developing for this investment in the public sector.

• 1650

I now have a few questions on the private sector. Mr. Moore, you mentioned diamond mining as an example. Let me give you the example of Voisey Bay. A little distance away from it, there is an Innu village called Davis Inlet. Earlier, you talked about joint-venture and co-management opportunities with private businesses on lands claimed by Aboriginals.

Something really shocked me when I went there. I was there twice. I saw that people were asking for $80 million in order to move the town to a more livable spot. At the same time, there was Voisey's Bay, where billions of dollars were being traded through the stock market and none of it was going to the aboriginal. Can the Department of Indian Affairs do anything to bring private businesses to share their benefits through royalties, jobs or otherwise? What means do you have at your disposal to convince business to share the wealth, particularly where there are land claims?

[English]

A witness: Thank you, Mr. Chairman. I would be pleased to address that as it relates to the north. My colleague, Ms. Williams, might want to address that for south of 60 degrees.

First, with respect to economic development that results from the establishment of a public government, and by virtue of the fact that the government of Nunavut will be recruiting some 600 employees over the next two to three years, indeed, the model for the government is to quickly decentralize a lot of those employees to the surrounding communities so that not just Iqaluit benefits from the development. I could not agree more. I think that is a form of economic development that is real and necessary in the case of Nunavut, and there will be almost immediate spin-off economic impacts in those communities. It is not just limited to the employment of individuals. We have to build office space and housing and other forms of infrastructure to accommodate the numbers of employees. So there are additional linked and spin-off benefits there.

As it relates to utilizing and encouraging the private sector with respect to economic development, in some ways we are very fortunate, particularly in the western Arctic with the diamond play, that aboriginal communities are in the forefront. The territorial government and other public institutions have encouraged the industry to make sure aboriginal people benefit from the exploration and development of the resource. There is proof positive that this is in fact occurring. So that too is a viable instrument and in many cases it appears to be working quite well in the north.

The other point I wanted to raise about Nunavut is that we have a target, through a training program, of recruiting 50% Inuit employees through all levels of the public service. That is being done through the effort of Inuit people to avail themselves of training opportunities and learning opportunities. But it too has been supported by the federal government, and that too generates a form of economic development in the north.

Thank you, Mr. Chairman.

The Chairman: Merci.

Ms. Cynthia Williams: I would like to comment on the south of 60 degrees. I agree with the member, absolutely. Government is a major employer in first nations communities, and it is very important to consider the jobs represented by the public sector in those communities. That will continue to be the case.

Our analysis.... You asked what our strategy is. On the one hand it is to continue to ensure that people working in the first nations governments have the skills and capacity to pursue their careers there—I might say especially the importance of ensuring that in the public service in first nations communities there is the capacity for sound economic planning. So I want to begin by agreeing with you on the importance of the public sector, particularly, as you noted, in rural and isolated communities.

• 1655

That said, as we look to the future, our analysis suggests the growth area in first nations economies is in the private sector. Governments have been developed over the past number of years, and it's been essential for first nations communities to have strong governments and to have the capacity there, but as we look to the future we look to opportunities for wealth creation and sustainable economic develop. Our view and the view of first nations is that has to come through further development of the private sector, and that's why that is our focus for the future.

[Translation]

The Chairman: Thank you, Mr. Bachand. Thank you, Madam.

We will now go to Mrs. Karetak-Lindell for have five minutes. She will be followed by Mr. Earle who will conclude.

[English]

Mrs. Nancy Karetak-Lindell: Thank you.

As Mr. Moore was saying, it is true that a lot of the economic development we hope to see will come from the Nunavut government and the employees. When you create more jobs in a community you have demand for more services, and one of the services that I hope to see is banking services. I have only one bank in each of the three regions that make up Nunavut, and long-distance banking is not at the stage yet where everyone uses the services. Most people don't deal with banks, so they have a hard time understanding a lot of the initiatives about capital and all that.

Leading up to access to these initiatives, I'm always concerned at the community level about the access to these intiatives. I don't think we make it easy enough for people to access these funds. So how do people access government initiatives? Do they use territorial government departments? Is there a way of getting information out so that people know what initiatives to apply for through which organization?

As well, a couple of organizations in my riding were sending letters to the Minister of Indian Affairs. They were trying to put in a request. That went through my office also, with a copy to our office. Many aboriginal initiatives are difficult for Inuit organizations and companies to access because they're geared more toward for first nations communities. What has been done about that letter to the minister asking that there be Inuit-specific initiatives within the funding that is available to aboriginals?

Thank you.

The Chairman: Mr. Moore.

Mr. James Moore: Thank you, Mr. Chairman. I'll at least try to address the first question.

There are a number of sources or insitutions that can be accessed in Nunavut by the communities for economic development purposes. As you know, funding is available in Nunavut through four Inuit-owned community economic development corporations. Each of the four is in a different community. One is located in Iqaluit, another in Rankin Inlet, and another in Cambridge Bay. The fourth, which covers all of Nunavut—in other words, it has Nunavut-wide interest—is located in Cambridge Bay as well. Generally speaking, these community economic development corporations deliver help in areas such as the development of business and training plans and accessing business development financial capital.

• 1700

There are two other smaller DIAND aboriginal economic development support programs available. One is the opportunity fund, and the second is the resource access negotiations fund, RAN. They can be accessed by contacting the DIAND regional office in Yellowknife.

As well, Inuit and Nunavut can deal with Aboriginal Business Canada, a program of Industry Canada. I don't have a lot of information on that but we could try to get that for you.

There's also a federal small business development program called the Community Futures program, which is used across Canada, including Inuit communities.

And then there are a range of programs that are also available through GNWT. I don't have details or specifics with me, but I will undertake to provide them.

Thank you, Mr. Chairman.

The Chairman: Merci, Monsieur Moore.

Ms. Cynthia Williams: I'd like to assure the member I will look into the status of the letter and advise your office about it.

[Translation]

The Chairman: Thank you, Madam.

I now give the floor to Mr. Earle, and then we will end with Mr. Finlay.

[English]

Mr. Gordon Earle: Thank you, Mr. Chairman.

We spoke earlier about the economic development strategy for the north, and you talked a bit about the mining activity there. I asked a question about royalties. I'm wondering if there is any way the royalties from the mining activity can be shared so some of that goes back into the aboriginal communities, other than simply through jobs. In other words, can the royalties be used to address some of the major concerns around health, housing, and whatever other problems there are?

I'll throw in another part to that question. As a part of the strategy for the north, are any efforts being made to clean up some of the contaminated sites left over from previous industrial efforts there?

Mr. James Moore: Thank you, Mr. Chairman.

There may well be other approaches or avenues available on resource and revenue sharing with aboriginal groups. It's in its early stages, but we are exploring, with the territorial government, innovative approaches to resource sharing in a way that would have spin-offs for aboriginal groups. It's much too early to say whether in fact we can demarcate a point of departure and indicate that we have a new strategy. We are looking at it.

Secondly, it's too early to determine whether contaminated sites and spending in that area would constitute part of the economic development strategy for the north. I say that because a lot of the priorities will be determined once we've had a chance to dialogue with our partners in the north, but I can tell you that it could well be an area where additional expenditures could be directed as part of an economic development strategy. Past experience has shown that there has been a significant spin-off effect on jobs in that area.

Mr. Gordon Earle: I'll just finish with this. The reason I asked the question, I guess, is that I think history has shown that quite often we take advantage of resources in an area and the real benefit or the sustainable benefit of those resources ends up going out of that area, either through the private companies or into the government coffers, and is used for other purposes. I think we're at a stage in development where we're early enough into this that we could offset that kind of activity and make sure economic incentives available from the resources actually get put back into the area so that the people can benefit from them.

I also feel it's very important that we deal with the mess that has been left there from the uranium mining and things like that, and in a way such that we're not going to have one legacy left over and then just move on and find something happening further down the road. I think it's pretty important to have that dialogue early on in this if we're going to be true partners.

Thank you.

The Chairman: Monsieur Finlay.

Mr. John Finlay: Thank you, Mr. Chairman.

We know that youth unemployment is an issue across the country, but it's also a major issue on reserves. Some programs were mentioned in your presentation, Ms. Williams. Could you review what measures you are taking to address this, particularly?

• 1705

Ms. Cynthia Williams: I appreciate the question. As we think about sustainable economies for the future, we have to be investing in the workforce that's going to run those economies, so a really important focus of an economic development strategy, in our view, is investing in youth and in the skills development of youth.

As you say, the challenge facing youth on reserves is an immense one. The unemployment rate's running two and a half times the national youth unemployment rate, which we know is higher than the national unemployment rate. It's a formidable challenge.

That said, there are some bright spots to which I referred in the presentation, particularly participation in post-secondary studies. Recent statistics released by StatsCan last week again remind us and all Canadians of the direct link between education and employment success. The unemployment rate among graduates with university degrees is much, much lower than for people who haven't completed school.

On that score, looking at the performance in first nations communities over the last two decades, the numbers I think are fantastic, rising from less than 1,000 graduates in the early 1970s to now close to 30,000 graduates of university programs.

Specifically with respect to youth programs in place in DIAND, we were very fortunate to be able to participate in the government's youth employment strategy, which was announced in 1996. Programs took effect in 1997. We have put in place three programs through that strategy, and I'd like to mention them briefly.

One is encouraging and supporting schools in first nations communities to set up co-op programs. The co-op programs in the school systems across the provinces have had terrific success, and we wanted to make that kind of success available to first nations communities as well. The programs started just last year, and already 129 schools are participating or are setting up co-op programs so that when students graduate from school, they will graduate with a CV and some job experience. It will also help them make some choices about their careers.

As well, for the younger children we have put in place, with some support, summer science camps. We know more students need to be studying the maths and the sciences to support economic development in communities. Again there seems to be a direct link, and participation of first nations students in post-secondary programs in those areas has been proportionately lower. We're looking to help first nation address this, and we've been doing it through the initiation of science camps.

We also have a program that is a first job experience program for students leaving school. This mirrors the government's Canada-wide program along the same lines. One of the biggest challenges for young people is to get that first job experience. Similarly, one of the most devastating experiences for a young person is to not get that experience. Being able to respond quickly after graduation is important, so we have a program in place now that supports job placement and wage subsidy. As I say, it closely tracks the national program.

Overall, in these programs that were introduced just over a year ago, 15,000 first nations young people have participated. This says to me there was a real eagerness to participate in these kinds of programs by first nations communities. In all cases we secured the funding and identified the program areas, but it was up to the first nations communities to access the money and to put the actual program in place. We're very hopeful that we can continue to have a strong focus on investing in youth in the coming years.

Mr. John Finlay: I have a short follow-up question.

I've read what the researchers prepared for us, and it talks about first nations and Inuit communities and organizations. Are any of these programs, such as science camps, open to any students, not just aboriginal students but some who might be in another community close by, or are they all strictly first nation programs?

• 1710

Ms. Cynthia Williams: This money is to support the first nation students, but some communities have responded to the science camps by supporting their students in accessing some of the mainstream programs.

A number of universities across the country, for example, now run summer science camps, but the experience in the first nation communities has often been that it costs more money to get children from the reserve community to the university base. There are also a variety of other reasons why first nations participation was lower.

While there are some programs on reserve, and there are some very interesting programs in that stream, there are others to which the community has sought access. Of course, there's a benefit to all participants, to both the first nation participant and the non-first-nation participant, who has the opportunity to meet someone they might not otherwise have spent part of their summer with.

[Translation]

The Chairman: Thank you, Mr. Finlay.

Thank you gentlemen for your excellent knowledge of these issues. Madam Williams, I would like to thank you also for the excellent command you have of your area and of aboriginal projects and their economic aspects. I want to commend your leadership.

Thank you, gentlemen.

Mrs. Cynthia Williams: Thank you very much.

The Chairman: We will now take a break for a couple of minutes and then we will continue in camera.

Thank you very much.

[Editor's Note: The meeting continues in camera]