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]

Tuesday, June 8, 1999

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[Translation]

The Chairman (Mr. Guy St-Julien (Abitibi—Baie-James—Nunavik, Lib.)): Good morning everyone. Here is our order of the day:

A. Pursuant to Standing Order 108(2), review of the administration of leases under the Indian Act.

B. Pursuant to Standing Order 108(2), crisis in the emergency medical evacuation system in the North.

Today, we will be hearing from two groups. During the first hour roughly, we will have the Musqueam First Nation. The second hour we will spend with representatives from the Nunavik Regional Board of Health and Social Services. To begin with, Chief Ernest Campbell will make a statement.

[English]

Monsieur Campbell.

Chief Ernest Campbell (Musqueam First Nation): Thank you, Mr. Chairman.

My name is Ernest Campbell, Chief of the Musqueam Indian Band, and I'll let my delegation here introduce themselves.

Mr. Andrew Charles (Elder, Musqueam First Nation): My name is Andrew Charles and I'm an elder of the band.

Mr. Lewis Harvey (Counsel, Musqueam First Nation): My name is Lewis Harvey, and I'm the general counsel for the band.

Mr. Jordan Point (Councillor, Musqueam First Nation): My name is Jordan Point. I'm a councillor for Musqueam Indian Band.

Ms. Allyson Fraser (Councillor, Musqueam First Nation): My name is Allyson Fraser, and I'm a councillor for the Musqueam Indian Band.

Mr. Nolan Charles (Councillor, Musqueam First Nation): My name is Nolan Charles, councillor, Musqueam Indian Band. Thank you.

The Chairman: Do you have a statement?

Chief Ernest Campbell: Yes, thank you, Mr. Chairman, just a brief history of the Musqueam Indian Band.

As you're aware, we're situated in British Columbia. If you don't know where Musqueam is, you will know where the city of Vancouver is. It sits on a portion of our traditional territory.

The Musqueam Indian Band is about 1,000 strong there. We're situated close to the mouth of the Fraser River. Traditionally, the Musqueam were hunters, fishermen, and warriors. We are rich in history; we are rich in culture. The Musqueam are a very proud people. We've been there since time immemorial. We haven't come from any other place; we've always been there.

We have a presentation to read, Mr. Chairman. For any questions afterward, in regard to the leases or legalities of it, we have our legal counsel here. For any questions you may have about the scenario or the history of leases since their inception—and we talk about going back to the 1950s and early 1960s—I have an elder here. Andrew Charles will be more than willing to answer any of those questions. Any other questions will be taken by any of our councillors or myself, Mr. Chairman.

First, I'd like to thank you for giving us the opportunity to come here today to give our presentation on leased reserve Indian lands.

On March 10, 1999, this committee resolved to undertake a review of the administration of leases under the Indian Act and to examine best practice approaches.

Musqueam welcomes the opportunity to make this presentation. While there has been a lot said about the situation involving the Musqueam Park subdivision on our reserve in Vancouver, not many have sought out our views. We welcome this as an opportunity to present what we hope you will agree is a fair account of the facts.

I might add, Mr. Chairman, that parcel A, the one that's getting all the publicity here, is a portion of leased lands in our community. We have a parcel B that is for single-family units, and there are about 150 or 175 units in that one. Parcel A has approximately 75 units. We have Shalimar Place, with townhouses. I don't know the exact figure; it has numerous rental units there that the Musqueam Indian Band owns right now. We have the two golf courses situated on our reserve, the Shaughnessy golf course and the Eaglequest golf course, that are all under long-term leases. This is just a small portion of that, Mr. Chairman.

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With regard to the area in question that we refer to as parcel A, we are still involved with the tenants before the courts, Mr. Chairman. The Supreme Court of Canada is considering applications for leave to appeal. Because the matter is still before the courts, care must be necessarily taken with what is said here today. Likewise, we're not here to discuss what positions we might take with our tenants, if there are any other negotiations that might take place, Mr. Chairman. We've already gone through lengthy, time-consuming negotiations prior to having to go to the Federal Court for a judgment on the rental issue. So we've gone through that process already, Mr. Chairman.

Our purpose in coming here is, one, to clear up any misunderstandings you may have obtained from the inflammatory media coverage that occurred during January and February of this year, and, two, to answer any questions you may have.

Musqueam's main reserve, IR No. 2, consists of 416 acres in the southwestern part of Vancouver on the north bank of the Fraser River. Our land is some of the most valuable in the city. To generate revenue for the benefit of our membership in the period from 1958 to 1973, we agreed to the leasing of a number of areas of the reserve. Two of the leases are to golf courses and two are to the residential subdivisions, Musqueam Park and Salish Park, to which I referred earlier, Mr. Chairman.

The Musqueam Park subdivision is a high-class 75-lot residential subdivision. It was developed in 1965, using 99-year leases. These leases are not prepaid. Annual rents were fixed at low fixed annual amounts for the first 30 years. In 1995 the rent review terms of the lease called for an adjustment of the rent to a fair rent, which the lease defined as 6% of current land value. From 1995 onward, the rent will be adjusted to 6% of current land value at 20-year intervals.

In 1973 we surrendered another parcel of our reserve for the Salish Park subdivision. This residential subdivision is located next to Musqueam Park. The main difference for the Musqueam Park subdivision is that the Salish Park leases are 99-year prepaid leases.

Who owns the reserve? You may be aware of the answer to this question, but the answer is, we do. Some people seem to think that Indian reserves are just another kind of federal crown property. They are wrong. While the government can be charitable with other kinds of crown property, it cannot give our reserve lands away for less than market value.

In fact, when we successfully took the Federal Court to the Supreme Court of Canada in 1984, in the last suit over the sweetheart lease it granted to the prestigious Shaughnessy Golf Club, the government argued that we had no legal right to our land. The government lawyers argued that the government could do with our land what it wanted and that we had no legal right to complain. Believe it or not, they went so far as to say that the government could put a garbage dump on our reserve if they thought it would be for our use and benefit.

As a result of the Supreme Court of Canada's decision in this case, Guerin v. R., it is now settled that the crown holds a legal title to the reserves under a trust-like judiciary duty to the band for whose exclusive use and benefit the reserve is set apart. If the government breaches its duty, the courts can order it to compensate the band in damages.

Musqueam beneficially owns our reserve land, and we are entitled to receive the benefits of that ownership just like any other owner. The crown is under a judiciary duty to ensure that we do.

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What is a lease? A lease is a contract between a landlord and a tenant. Under the contract, the landlord/owner grants the right of exclusive possession and quiet enjoyment of land for a defined term, in exchange for which the tenant is required to pay rent and maintain the premises in good repair and otherwise comply with the terms of the leasing contract. The tenant's interest in the land created by the lease is called the leasehold interest. The landlord's interest is called the reversionary interest or reversion.

These two interests can be separately sold or assigned. The sum of the market values of the landlord's reversion interest and the tenant's leasehold interest should equate to the market value of the freehold interest in the land. If the lease rent is lower than market rent for similar property, the tenant's leasehold interest will have a positive value. If the lease rent is the same as market value, then the tenant's leasehold interest will be zero. There is, therefore, an inverse relationship between the lease rents and the market value of the tenant's leasehold interest. An increase in lease rents will result in a corresponding reduction in the market value of leasehold interest.

Leases can be short or long term, and the rents can be payable periodically throughout the term or prepaid at the beginning of the lease.

As mentioned, the Salish Park leases are 99-year prepaid leases. During the initial years, leasehold interests of this kind have a value that is close to that of the fee simple interest in the land.

On the other hand, the 99-year Musqueam Park leases are not prepaid. Annual rents are payable. During the first 30 years the rents were set at low fixed amounts in the order of $300 to $400 a year. The gap between the lease rents and fair market rents widened as land values appreciated during the first 30 years. Because the lease rents were lower than market rents, leasehold interests in Musqueam Park were being bought and sold for substantial prices.

Long-term residential leases, while common in England, are comparatively rare in this country. There are other examples of long-term residential leases in Vancouver, but this form of tenure is not well known in the market and may not be well understood by some of the house-buying public. For example, a significant number of Musqueam Park tenants purchased assignments of their leases and paid amounts of up to $585,000 as recently as 1992, with just three years to go before the rents were scheduled to be adjusted to market rates. The house on that particular lot had an assessed value of $170,000. Given that the rents were about to be adjusted to 6% of current land value, one has to question what this purchaser was paying the other $415,000 for. That kind of price would only have been justified if the lease were a prepaid lease like those in Salish Park.

When you hear Musqueam Park tenants complain that their leasehold interests have plummeted in value from what they paid for them...the sad reality is that they paid more than they should have. Someone buying a leasehold interest in the early 1990s should not have paid a price that was significantly greater than the value of the improvements on the land. While one can have sympathy for the Musqueam Park tenants who paid too much, please remember that Musqueam did not receive the inflated purchase prices these tenants paid, and Musqueam did not in any way cause their difficulties. Perhaps they were unsophisticated. Perhaps they had bad advice from their legal and real estate advisers. We don't know what went wrong. But one thing is certain; we did not cause their problem, and it is not reasonable to now ask us to accept a lower return on our lands to compensate them for the problem we never caused.

What are the advantages to leasing? From the point of view of the tenant, a lease offers a price advantage as compared with purchasing a conventional fee simple. When a lease is not prepaid, it also provides a financing vehicle. The tenant does not have to pay for the land up front. He pays for the land in rent payments during the term of the lease.

From the point of view of the landlord, a lease generates rental revenue and at the end of the term the land comes back. From our point of view, however, our reserve land base is much more than just an income-producing capital asset. It is the place where the Musqueam people have lived for thousands of years. If we were simply to sell this land in a few generations, Musqueam would cease to exist as a distinctive people. That is why we and most other bands never sell reserve lands.

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How were the Musqueam Park rents set? The rents were set by the terms of the lease contract that was signed and agreed to by each of the tenants at the time they acquired their leasehold interest. The leases say that the annual rent for the 20-year period beginning in 1995 is to be the fair rent for the land. The leases define the fair rent as an annual, clear, total rent that represents 6% of the current land value. The lease rent formula specifies that the land value is to be determined on a number of assumptions, but essentially the land is to be valued as though it is unapproved and in the same state it was on the date the leases were made in 1965.

The leases require negotiations with the tenants to determine the fair rent. They go on to say that if the parties cannot agree, then the issue is to be settled by the Federal Court of Canada.

We tried to negotiate a fair rent with the tenants. I won't go into the details of the negotiations, but it is clear we were not making progress. The tenants offered an average of $6,000 a year. I just want to add, Mr. Chairman, that I was on the negotiating committee, and the only offer I heard at the committee stage when we met with them was $5,000 a year.

Our appraisals indicated that the rents should be in the order of an average annual rent of $30,000 a year. Ultimately we invoked the dispute resolution in the leases and initiated proceedings in the Federal Court of Canada in June 1996. We could not allow rent negotiations to drag on, because the leases do not contain a requirement for interim rent during negotiations or for interest on overdue rent.

The average annual rent set by the trial judge was about $10,000 a year. He arrived at that result by lopping off 50% of the land value to take account of what was called the reserve factor. We successfully appealed that reduction to the Court of Appeal, which handed down its judgment in December of last year. As a result, the average annual rent now is $22,800 or $1,900 a month. This is based on an average current land value of $380,000 per lot—serviced land value of $600,000 per lot, less a $220,000 deduction per lot for the cost of services.

The tenants have said they can't afford to pay these rents. They have told your committee that Statistics Canada information indicates that they have an average income of only $38,000 a year. They have told us the same thing. When they did, we pointed out this average was derived from the whole of the Musqueam reserve, which includes about 600 band members, many of whom are on social assistance and have little or no income. We note that the average annual income for the Dunbar-Southlands neighbourhood of the city, which includes the reserve, is about $70,000. Of course, we have no means of verifying or refuting their claim. But one thing is clear; the rents under the leases are to be determined by the reference to the land value, not the ability to pay. That's the way land rents are generally determined.

We did not unilaterally set or, as the media is fond of saying, demand these rents. The court set the rent required by the terms of the lease contracts after hearing evidence of market values in the area. While these rents may seen high to someone not familiar with the high land values on the west side of Vancouver, in an area that the court described as one of the most desirable areas of the city, they are not out of line. We know that because we own a townhouse complex next to Musqueam Park in which we are renting our units for approximately $2,500 a month or $30,000 a year.

Who manages the leases on our reserve lands? For technical legal reasons, because the federal crown holds the legal title to reserve lands, leases are granted by the crown after the band has consented in a special process to designate the land for leasing. That is why the Musqueam Park leases show the crown as the landlord. The crown was and still is the landlord under the leases.

Under section 53 of the Indian Act, leased lands are to be managed by the minister or a person appointed by the minister. On October 6, 1980, the minister appointed the Musqueam Band Council to manage our own reserve lands that were designated for leasing purposes. This was an early step in a process described as devolution and more recently as returning self-government to bands. We were one of the first bands to obtain this authority. Now, instead of having to rely on department officials, who are often subject to pressures from constituents of the minister with more political influence than us, we can rely on ourselves. We think we have exercised this authority responsibly. We think we have a better concept of our own best interest than any official of the department, no matter how well-intentioned, and history tells us they are not always well-intentioned.

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The tenants complain that they were unaware that this was done. They say they should have been consulted. Frankly, we have to ask, what are they complaining about? Whether a department employee collects their rent or an employee of the Musqueam Indian Band does should be a matter of no concern to them. They have to pay the same amount of rent regardless of who collects the rent. Perhaps they think they could have prevailed on the department to accept a lower rent than called for under the leases. If so, they do not understand that the days when the department would lease Indian lands at bargain basement prices came to an end when the courts ruled that the Government of Canada could be sued by bands for breach of fiduciary duty.

What are the taxation complaints from the tenants about? I'll address the taxation issue briefly, but I first make the point that the taxation issues are irrelevant to the lease rents issue. The tenants have complained that taxes have doubled since Musqueam took over taxation authority over its reserve lands. The fact is the tenants have never paid any more in taxes than they would have paid had they remained subject to the taxation jurisdiction of the City of Vancouver.

The tenants also complain that their properties are assessed by reference to off-reserve fee simple values and not by reference to the value of their leasehold interests. That is true, but it's also true that this is the way in which leasehold interests in crown lands are assessed everywhere in the province, whether on or off reserve. This is the same way these properties were assessed when they were subject to Vancouver's taxation jurisdiction. It's been done this way for at least 50 years, all over the province.

Further, the tenants are receiving municipal services that are as good or better than when they were subject to Vancouver taxation. It should also be mentioned that the assessments are done by the same B.C. assessment authority that does assessments elsewhere in the province.

The tenants also complain that they don't have the right to run for office or vote in elections for the Musqueam Band Council. They retain rights to vote in Vancouver municipal elections and provincial and federal elections, but they cannot participate in the political life of our community. We think that is for obvious reasons. However, they are protected by law from unfair treatment. Our taxation bylaws and rates have to be approved by the minister, and the proof is in the performance. Their tax rates have never been higher than what they would have been had they remained subject to taxation by the City of Vancouver, and their services have been as good or better.

Does the federal government have a role in finding a resolution to the Musqueam Park problem? We have never said that the government should bail out the Musqueam Park tenants. If the government wishes to offer some kind of compensation to the tenants, and that is not done at our expense, then it's the government's business. We do have some difficulty with the notion that Musqueam should do the very thing that the government is unwilling to do. If there is a flaw in the leases, as Ms. Findlay told you, which you think may merit some compensation, that flaw was not created by Musqueam. We did not negotiate these leases. That was done by the Department of Indian Affairs.

If anyone should be compensated by the government for the Musqueam Park leases, it is the Musqueam Indian Band. The rents we were receiving up to 1995 were unconscionably low. In 1965 inflation had been averaging 2% a year for the previous 20 years. Why did the government lock us in to rents that increased at an average uncompounded rate of only 1% a year during the first 20-year period?

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What can be learned form the Musqueam Park situation? We're not sure of the answer to this question. The media and some politicians have been quick to accuse us of greed, bad faith, and all kinds of things. Frankly, it's been a bit hard to take, and even harder to understand. It is ridiculous to suggest that the Musqueam Band membership should subsidize the housing costs of persons who are financially far better off than us.

We have not acted unreasonably. We have tried to be fair. We have abided by the terms of the leases, even when they were demonstrably unfair to us. We have abided by the judgments of the courts, even when we lost. We have offered to consider proposals from the tenants. They have made none. We have offered to provide them with time to pay their rent. They have not responded.

We have tried to maintain an honourable approach. We didn't engage in an exchange of insults with the tenants who went to the media and said things about us that were untrue. For example, a number of tenants appeared on television, through the paper, in the radio—the whole media—and quoted me as saying I said they could eat grass. I noted that this allegation was repeated again when a representative appeared here and Ms. Findlay did nothing to let you know that I've never made this statement, even though she was so advised on at least two occasions.

On a couple of occasions we had meetings. Our band office representatives were there, and Ms. Findlay was there with a couple of other representatives. I made it clear to her at that time that I never made this statement. They accepted my understanding. They accepted at the time that I didn't, but they continue to say this.

While we don't understand the basis for their complaints and the criticisms we have faced, we are sure of one thing. We have every right to expect fair market rent, just as any other landlord in similar circumstances would expect.

I think if you look at the City of Vancouver, Mr. Chairman, they're probably one of the largest landlords in the province. They have similar leases. It's common practice all over the world. I think the federal government had a similar lease in one of the parks, in Banff or wherever, where the same situation happened. There wasn't the same media frenzy, or outburst or protest, that has been directed to the Musqueam Indian Band.

I have a hard time, Mr. Chairman, feeling that had it not been the Musqueam or any other first nation in that situation, or if it was just another developer, this would have happened. Would the government have set up these committees and reviewed the situation? There was no hollering and screaming about the unjust rent we were receiving for the first 20 or 30 years. Nothing. We lived by it and we honoured it, and we expect people to do the same.

We come out of here, Mr. Chairman, out of respect for the system and for yourselves.

In closing, as I mentioned earlier, Mr. Chairman, if you have any questions, we have some of our delegates here who I'm sure will clear up some of the misunderstandings or whatever that you want to have cleared up.

That is the written presentation we have, Mr. Chairman and committee members. If you want to ask some questions, as I mentioned earlier, about legalities, leases, taxation, we have our lawyer here, and if the questions are on the scenario at the time they started, I have an elder here. Council members are willing to answer your questions if they can.

I thank you again, Mr. Chairman.

The Chairman: Thank you for your statement, Chief Campbell.

I'll start with Mr. Scott.

Mr. Mike Scott (Skeena, Ref.): Thank you, Mr. Chairman, and thank you for that presentation, Chief Campbell.

I would like to start by asking when Salish Park was developed. That was a prepaid lease situation. When was that developed?

Chief Ernest Campbell: In 1973.

Mr. Mike Scott: Was the band involved in the negotiations for the prepaid amounts?

Chief Ernest Campbell: Yes.

Mr. Mike Scott: And what were the prepaid amounts?

Mr. Andrew Charles: They varied according to the location of the lot. I believe they varied between $40,000 to $60,000 per lot.

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Mr. Mike Scott: So $40,000 to $60,000 on a—

Mr. Andrew Charles: No, it depends on the location of the lot. On some lots the prepaid lease was valued at $40,000 and paid accordingly. Others, depending on their location, were valued at $60,000 and paid accordingly.

Mr. Mike Scott: Okay, we'll take the higher value then—$60,000—but that was for the entire term of the lease?

Mr. Andrew Charles: For 99 years.

Mr. Mike Scott: On an annual basis, at 8% interest, that would be $8,000 a year—something along those lines. I'm trying to get a comparison. If you have a prepaid situation on one side, and I appreciate that these two properties are virtually side by side, if I understand it right—I'm trying to get an understanding of the value of those prepaid leases on an annual basis to see if there is any way to compare it to Musqueam.

Mr. Andrew Charles: I think, sir, if you were to draw those comparisons you would have to go back to 1973 and forecast future values. But those future values have incremented appreciably over the following years.

Mr. Jordan Point: If I could interject, the issues are separate issues. We have a head lease...if we're dealing with Musqueam Park and parcel A, the rents there, in defining the fair market rent, are defined as 6% of the current market value. That's how those rents were determined. You asked who negotiated those in parcel B. The band did. But the department negotiated parcel A.

Chief Ernest Campbell: I think you're comparing apples and oranges here. If you look at what we did with parcel A in 1973 and again in 1980, the Musqueam Indian Band approached the tenants in parcel A to go under a similar lease arrangement. The opportunity was there due to the financial situation of the Musqueam Indian Band at the time. You have to look at the financial situation at the time for parcel B, the need to get money up front due to the fact that we're in a financial crunch. One of the reasons was the terms of parcel A. We were getting peanuts. You can't compare the lease of parcel A and the prepaid leases. They are there. That's done. You can't use one to justify or not justify the other, I don't believe.

Mr. Andrew Charles: The upshot from the prepaid lease is that the money the band received, which was over $4 million, had appreciated over a period of time based on interest accrued. That, in essence, adds to the value of the lease. One cannot unilaterally make a decision by comparison when dealing with a prepaid lease and an annual lease.

Mr. Mike Scott: I'm trying to get at the fact that they're both 99-year leases. One was prepaid and one was on a renewable basis. I'm trying to see if there is any way of comparing at all.

When was the last sale of a house on Musqueam?

Chief Ernest Campbell: In the parcel A in question?

Mr. Mike Scott: Yes, to a non-band member.

Mr. Andrew Charles: We've kept track of that, and there haven't been many signs out on the road saying there were houses for sale.

Mr. Mike Scott: People I talked to, the leaseholders, indicated that there have been no house sales since about 1995 to non-band members, simply because they can't sell them. Some of the leaseholders have actually said they have offered to the band—and I would ask you to either confirm this or not—to walk away from their properties and leave the band with the improvements that are there right now, provided the band would terminate the lease. Is this something the band would be prepared to do as an option for some of the leaseholders? They are saying they're prepared to walk away from their properties and call them zero value, regardless of what they paid for them, as long as their obligations—

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Chief Ernest Campbell: As far as an official request to council, I'm not aware of anybody offering to do that officially, at a meeting or through the council, the Musqueam Band.

Mr. Lewis Harvey: I've heard statements, such as Mr. Scott just referred to, made by various of the tenants in the media. Whether that's extravagant rhetoric or really meant, I don't know. I can say that there has been no formal proposal, to my knowledge, from any tenant to simply walk away from their leasehold interest.

On the other hand, it is fair to say that with the negative publicity the tenants have generated themselves, for the most part, the market has been rather leery about going and purchasing from a group of people who are saying they're being mistreated by their landlord.

The Chairman: Thank you, Mr. Scott.

Mr. Bryden.

Mr. John Bryden (Wentworth—Burlington, Lib.): Thank you.

If you look at the record, when the residents appeared I made the observation very forcefully that we live in a society in which, when you make a bad investment, you usually bear the consequences of that bad investment. So I accept your presentation as far as I can see, unless there's something untoward that I'm not seeing. It would appear to me that you've acted in the way in which you ought to have acted. As you point out, it's too bad if the tenants paid too much money at one point or another and they have to take a loss.

On the other hand, people who are in a situation where they have made a mistake and are facing a serious financial loss are to be understood to try to do anything in their power to get compensation or partial reparation from their own mistakes. So it doesn't surprise me in the least that the residents should be trying everything in their power to cut a better deal, or whatever.

In the context of that, can I ask you, hypothetically, if parcel A was razed to the ground tomorrow, flattened to the ground, and the tenants were all gone, do you think it's possible to develop that land to produce, say, a greater income than what you would be able to get from the 1995 post-rent agreements?

Chief Ernest Campbell: Yes, you're correct. We've had appraisals done on that portion of the land, and it's valued at anywhere from $40 million to $60 million. If you went to higher-density housing or any other project...oh yes.

Mr. Jordan Point: If I could interject here, I think one thing that's important for the committee to keep in perspective and to recognize here—and I've read some of the record, not only from here but also statements from the House—is that the Musqueam issue is often referred to as a problem and a controversy. We don't view it in that light. It's simply a landlord-tenant issue.

What is happening is it's being clouded with issues like Bill C-49, taxation, and treaty. Those are separate issues. If you look at it strictly as a lease issue, as we do...we do not go to the tenants and talk about our treaty issues or our Bill C-49 issues and mix it all in there. So I think it should be kept in that context.

In reading some of the record, I noticed there was a mishmash of alarmism and fearmongering about taxation issues and Bill C-49 and expropriation issues. Those are different. They might affect it in some regard, but we conduct business in a business-like manner. When those issues come to the forefront of the tenants, we will advise them and we will take care of business in that manner.

Mr. John Bryden: I take the point. As a matter of fact, I took the point earlier when the chief said if it weren't that this involved an Indian band, this kind of controversy wouldn't be involving the federal government, save for the fact that the original lease, which is causing all the problem, was negotiated by the federal government, so there is some distant responsibility.

That doesn't get around the problem, though, that the people entered into these lease agreements with their eyes open. Just as I don't think the federal government should expect to pay for all the damaged condos that were built in Vancouver—there is now a $1-billion price tag—I don't expect the federal government should intervene here.

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Having said that, however, and taking your point that this is a business situation, a landlord-tenant situation, it would appear to me that this situation could be resolved if the band saw a future profit in acquiring those lands very shortly and giving the residents some compensation to be gone. Has that actually been dealt with or considered, or have you talked to people informally?

Chief Ernest Campbell: I will briefly answer your question, but I want to get back to what you said in regard to the government, that possibly people make bad business decisions, bad investments, and so on, and seek compensation, somebody to bail them out. We're no different. We made a bad business venture in Celtic Shipyards. I think we sunk in about $5 million there, which we ate, so to speak.

We attempted to go to the Province of British Columbia and the federal government for some help in keeping that operation going, because we were employing a considerable number of band members there. I think there was a fund—I was just asking—which was not a grant but a loan from the federal government. I think it was $900,000 or something. When we went into bankruptcy in that business, I think the federal government was the first one there saying, we want our money.

So, yes, we've attempted...and we never got any bailout whatsoever. So nobody's alone; we're there too.

Now, your question was what, were there negotiations?

Mr. John Bryden: Even though, let's suppose, they have no right to compensation, have you considered, or would you consider, compensating those residents in some reasonable way, a negotiated way, for the benefit of getting them off that land shortly so that you can develop it for a higher return? Has that been in the cards for negotiation?

Chief Ernest Campbell: No, not really. We have been accused of that. We've been accused of raising these rents astronomically, so they campaign that we want them off. That's what we've been accused of, that we've been in some secret rooms conniving and scheming of ways to do it. But we haven't. We have not had one official or any type of meeting attempting to get the tenants out of there.

You see, we always maintain that lease; we honour it and we respect it, and we expect that everybody else is going to honour it also. So, no, we had no reason to believe we had to have meetings in order to buy them out, get them off, compensate them to leave.

We've been approached by the Shaughnessy Golf and Country Club for the same thing. They wanted to talk about some arrangement that could be made where we could buy them out of their lease and relocate them for a longer term in another place.

No, we haven't discussed that at any length whatsoever. But if the federal government were to come up and say, we owe you compensation, if they're willing to put money up and support Musqueam and come up with funds to buy them out, I'm sure we would look at it.

To answer your question, no, we haven't sat down and discussed anything of that nature.

Mr. Andrew Charles: I want to reflect back in time to the relationship between the federal Government of Canada and first nations. Part of the scenario deals with the lease granted to the Shaughnessy Golf and Country Club.

On October 6, 1957, the Musqueam Indian Band held its surrender. This was the first time the members of the Musqueam Band actually got wind of a surrender for purposes of leasing land to non-Indian people. The council at that time had knowledge, but not the band.

Mr. Anfield noted, when he wrote a letter to Mr. Langley, the club president:

I would not hazard a guess as to how long it would be before we could say yes to your club. Go ahead with your application. It must be months at least. It may be longer. If word got out to the Indians of the possibility of your application, it would make the matter that much more difficult.

• 1155

When the Musqueam Band voted on October 6, 1957, at their surrender meeting, they were called forward to make their X alongside their respective names. The Indian agent marked while the band member held the tip of the pen. What happened is that my name was there, the Indian agent held the pen like this, and I had to hold the tip of the pen to mark yes. I'm not lying. There are people who are still alive who did exactly the same thing as I did at the surrender meeting.

I want to expand just a little further here. With regard to the Block Brothers lease of parcel A, which is in question here at this table, the original concept of developing a non-Indian residential lease was conceived by Bob Kelly and Associates. The Department of Indian Affairs was influenced by Block Brothers, and Bob Kelly and Associates were bought out by Block Brothers. This kind of information was not known to the Musqueam members until the surrender meeting that was held for that purpose. First nations were denied the engagement of legal services and independent land appraisers in those years, and that leads right up to the point where Block Brothers got their lease for parcel A from Indian Affairs.

The Chairman: Please be very short, Mr. Bryden.

Mr. John Bryden: Chief, my comments were not to suggest in any way that the band was trying to deliberately break the leases. I just want you to be clear on that point.

The Chairman: Thank you.

Monsieur Bachand.

Mr. Claude Bachand (Saint-Jean, BQ): I just want to tell you that the Block Brothers don't have anything to do with the Bloc Québécois.

Mr. Gerald Keddy (South Shore, PC): It sounds as if they might.

A voice: If it is, it's very distant.

Some hon. members: Oh, oh!

[Translation]

Mr. Claude Bachand: I simply want to say that I, too, did appreciate your presentation immensely; you have answered many of my questions.

Mr. Chairman, I was a union staff member and a negotiator for 20 years and I always try to find a way to get out of a situation without losing face. I always try to find a win-win settlement.

I will visit the Musqueam reserve, probably towards the end of July, in order to meet both parties. Meanwhile, I do have a few questions to ask you.

Let's say that I want to lease some land on the reserve. It is a well-known fact that this is a very important and highly desirable land because it is in a very sought-after area of Vancouver. If I settle on some land right beside it that I decide to lease, will I pay roughly the same price as if I leased a land from you? This is my first question.

[English]

Chief Ernest Campbell: Right now we'd probably be paying the same price.

[Translation]

Mr. Claude Bachand: And I will pay the same price?

Chief Ernest Campbell: Yes.

Mr. Claude Bachand: If I am not mistaken, some people who have been living on this land for a long time, who have enjoyed the usufruct of this land, of the area where they happen to be, were not paying the same rent as their neighbours. Their rent was cheaper than their neighbours' rent.

• 1200

[English]

Mr. Andrew Charles: That's right.

[Translation]

Mr. Claude Bachand: You say in your brief that in 1965, because inflation had been averaging 2% a year for the previous 20 years, the government agreed to increase rents by 1% every year, which is far from enough. Is this what you are saying?

[English]

Chief Ernest Campbell: Yes.

[Translation]

Mr. Claude Bachand: Therefore, shouldn't you be getting some federal compensation? This compensation might help you find a middle ground with the tenants that could result in an out-of-court settlement between the parties.

The federal government might say “We have made a mistake. We gave you a 1% annual increase for many years. We realize that you must have lost money because you should have been getting an increase of 2% and even 3% as there were some periods of very high inflation after that. We are now ready to give you some money so that you may come to an agreement with the non-Indians.” Do you think this would make sense?

[English]

Chief Ernest Campbell: I couldn't speak for the federal government. But if they come by and want to talk compensation for past injustices or whatever and to compensate the Musqueam Indian Band for the low rental of the first 30 years, which I think is what you're referring to, and then try to accommodate the tenants for a lower rent.... If they want to do that....

I think you have to come from a Musqueam perspective. As I mentioned earlier, we honour contracts and our leases. If the government wants to pay a fair rent, fine. I don't want to be too blunt, but I really don't care who pays the rent. But somebody has to pay the fair rent.

If the federal government wants to compensate somebody or, as the tenants say, bail them out if they can't afford the high rent, then I think it's only justifiable that they compensate the Musqueam Indian Band for the very low rentals in the first 30 years. That would have to come from the federal government. If they wanted to do something, we would sit down and talk. But who pays us isn't the important thing. It's us getting the fair rental that's owed to us.

[Translation]

Mr. Claude Bachand: What I meant to say, Mr. Campbell, is that opposition members can do that kind of work. They can ask the government to recognize its liability for the leasing of lands at ridiculously low prices for many years and that money would be used to find a middle ground for both parties, the tenants and the landlord.

Mr. Campbell, can you assure me that the present price, the price set for the administration of the lease, doesn't include any catching up. You did not take into account the first 30-year period when you set the rents, figuring that you had some catching up to do and that you would make people pay a higher rent to recoup the money you should have been paid.

[English]

Chief Ernest Campbell: I think there have been statements made through the media and everything that we're out for revenge and we're going to get them or we will get them in this lease. No. We've acted honestly and above-board. We've gone through the process of negotiation. We've attempted to do so in good faith and according to the lease. We did it in a business-like manner, Mr. Chairman. Everything was above-board and all the legalities and everything else were there. We've done it in an above-board and honest way and in good faith. We've gone through the process to the best of our ability.

[Translation]

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

[English]

Mr. John Finlay (Oxford, Lib.): I have just a couple of points, Chief, and it has been very interesting so far.

First of all, since Mr. Bachand excused himself, my name is spelled correctly here. The lady with reference here has a “d” in her name. And since I have a brother and a son and two grandchildren in west Vancouver, north Vancouver, I don't want to get on the wrong side of this issue.

• 1205

Mr. Gerald Keddy: I thought she was your sister.

Chief Ernest Campbell: We have relations also in north Vancouver, in the Squamish area.

Mr. John Finlay: Parcel A, parcel B, and two golf courses. This Shaughnessy Golf and Country Club, is that one of the golf courses?

Chief Ernest Campbell: Yes.

Mr. John Finlay: And the other one is...?

Chief Ernest Campbell: Eaglequest, they call it now.

Mr. John Finlay: Eaglequest. That's a lovely Indian name.

Chief Ernest Campbell: We didn't name it, though.

Mr. John Finlay: With respect to 1973, when the Salish Park leases were put up for sale and sold on a 99-year basis, as Mr. Charles was saying, for $40,000 to $60,000 a year, I understood you to say that the opportunity was given to the parcel A landowners, leaseholders, to in effect buy up their lease for 99 years and pay up front for it.

Chief Ernest Campbell: Yes, that's true. They had the opportunity. And I mentioned earlier that we attempted to negotiate that due to the financial constraints we had in Musqueam in 1973 and 1980. That was presented to the Federal Court and they accepted that. We had to prove that we attempted to negotiate in good faith prior to our case being heard in the Federal Court.

Mr. John Finlay: Did any of the Musqueam Park leaseholders take advantage of that opportunity?

Chief Ernest Campbell: Very few, if any, responded to take us up on the offer. I don't have the statistics, but maybe somebody else here has that.

Mr. Lewis Harvey: Mr. Finlay, I can give you some information on that.

In 1980 the band, suffering under the low rents that were then in effect, sought to fix things from its point of view by offering to the tenants a proposal to prepay the leases. Letters were sent out to every tenant in Musqueam Park, seeking to know what their level of interest would be in entering into that kind of negotiation. The band advised them that at least half of the tenants would have to be interested to justify the appraisal costs that would be required to undertake that kind of negotiation. We got back responses from about 25% indicating some level of interest. Because there wasn't a sufficient level of interest displayed, that never took place.

During the negotiations for the 1995 rent this subject came up, and Mr. Al Hunter, who was on the Musqueam Park tenants negotiating committee, in commenting on that, said basically “We would have been crazy to give up the low rents we were paying then, in 1980, and agree to pay a prepaid amount”. He probably has a different view of that today, but that's what happened in 1980.

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

The Chairman: Mr. Keddy.

Mr. Gerald Keddy: Thank you, Mr. Chairman.

I'd like to quickly thank the Musqueam Band members for coming today. It was an excellent presentation. I think it explained things exactly as they should have been explained: from a business point of view. It's a business dealing between two business people, one person with a product to sell and one person who's interested in purchasing that. Whether it's a product or a service, it really doesn't make much difference.

My one question is just to follow up a little more on what Mr. Bachand had to say on the land values. I think there's been entirely too much rhetoric and too much emphasis put on the fact that somehow first nations land isn't worth as much as fee simple land that sits alongside it. If you took a property in Musqueam Park and could physically remove that property and set it down in a fee simple area across the reserve line in Vancouver, the value of that property.... I don't agree with the idea that the value changes, that it's somehow different in one area or the other. I can tell you that fundamentally. And you had to pay rent on that property, or you were leasing that property in another area. That rent is consistent, whether it's in Musqueam Park or whether it's in Vancouver. I'd just like a little more exploration. Have you done any numbers or studies on that?

• 1210

Mr. Lewis Harvey: The rents that have been determined did take into account the values of properties in the area. I'm sure it comes as a shock to people who live in places where the land values are not as extreme as they are in Vancouver, but this is what properties rent for in that area. If you're interested, I could provide you with examples.

Mr. Gerald Keddy: Well, I didn't pay that much for my house.

Mr. Jordan Point: I have a follow-up, just to give you a perspective. There's a corner lot about 500 yards away from my house, at Dunbar and 51st. I know this because my brother-in-law was looking into purchasing it. He eventually purchased in north Vancouver. He was looking at a corner lot for sale there. They wanted $650,000, and that was a small little house built in the 1950s, old. He asked about renting, and they were renting it out for $2,200 a month.

Mr. Gerald Keddy: Yes. The other area I want to explore just a little is that whole principle of the prepaid leases. Are there any prepaid leases in Musqueam Park?

Mr. Lewis Harvey: None, no.

Mr. Gerald Keddy: So they're all on an annual lease.

Mr. Lewis Harvey: That's right.

Mr. Gerald Keddy: And everyone is aware that the annual lease doesn't include the difference in a prepaid—I want to make sure I have this right—and an annual lease. Your prepaid lease you pay all up front for 99 years. So essentially you take a mortgage out on your home and you pay that off to the bank, whereas on an annual lease you're making the payments to the lessor, which would be the Musqueam Band in this case. So it saves that person the cost of going out to the bank, finding the collateral, and borrowing the $600,000 or the $400,000 or $300,000 or whatever the property is worth. So there's an advantage in the annual lease. You're still signing a 99-year term, but you don't have to put your money up front.

Mr. Lewis Harvey: Exactly.

Mr. Gerald Keddy: Thank you very much.

The Chairman: Thank you.

Nancy.

Mrs. Nancy Karetak-Lindell (Nunavut, Lib.): Thank you.

It's always very interesting to hear another side of a story when you're sitting in my position, because we don't have the opportunity to know firsthand of every issue that comes before us. To hear two sides of a story always puts into balance what we hear if we hear only one side of a story.

The last time this issue came before us I didn't ask very many questions, because I don't know the issue as well as people who live in B.C. When the tenants came before us, at the very end I did ask questions, but I wasn't very satisfied with the answers I received.

I don't know if you've read the questions the members asked at that meeting, but my question was “Didn't you at any time feel that somebody else was getting a raw deal when you were paying only $300 a year for a lease?” They were very competent people; they were real estate people and lawyers before us. I asked, “Didn't you, in your opinion, feel that somebody was getting a raw deal in this situation you're in?”

They said that the tenants were the ones who put all the money in the improvements, so they felt they were doing everyone a favour by doing the improvements on the land. Also, they said the band was given money up front, and that should have been enough. Those were the responses I got. I just wanted to hear your side, maybe the other side of those responses.

• 1215

Chief Ernest Campbell: In regard to your comment or the question about their not considering that somebody else was getting a bad deal—in this case it would be the Musqueam Indian Band—no, I don't think they did. I think they knew what they were doing.

I think, if you recall, when they were approached to enter into a different arrangement or a prepaid lease, they stated they'd be crazy to do so, they were getting such a good deal now. Their comments were, oh, that was good at the time, or it might have been good the first year.

The chief at the time, Willard Sparrow, retained a Professor White from the University of British Columbia to look at the report and give a report on it. He mentioned that it was a bad deal for the Musqueam Indian Band. I think he attempted to urge the Department of Indian Affairs at that time to give him ample time and opportunity to do a final report prior to bringing the lease arrangements down to the Musqueam Indian Band, which they didn't do. So that's what happens.

I'm trying to think of your other question, but.... Go ahead.

Mr. Lewis Harvey: Maybe I can respond to that. Yes, there was money paid up front by the developer to the crown for these in benefit of the band. The amount of money that was paid up front was not the $200,000 number that was stated to you. It was, I believe, if my memory serves me right, in the order of $130,000.

I think the answer to the point raised by Ms. Findlay takes two parts. First, essentially her answer was that a deal's a deal. You would be expecting tenants in their situation back in the early part of the lease to live up to a very onerous standard to require them or expect them to pay more rent than was required by the terms of the lease. And that's fair. Of course, the Musqueam are applying the same principle today.

The second point is yes, the improvements and services that were put into the land were not paid for by the band. On the other hand, the rent that is being charged now is not calculated on the value of those improvements or services. It's based strictly on the land value, which is what Musqueam contributed.

Mrs. Nancy Karetak-Lindell: Thank you.

The Chairman: Monsieur Scott.

Mr. Mike Scott: I'd like to address the issue of taxation for a minute. I know it's not directly related to the leases, but indirectly it is. Of course, the leaseholders have been telling us that the property taxes have gone up substantially since 1991 when the band took over the property taxation. I'd like to ask you if you agree with the principle that residential property taxation should be tied to services provided. Do you think that's a principle in property taxes, or do you think property taxes are applied for some other purpose?

Mr. Lewis Harvey: I wish that when I sent my cheque to the Receiver General of Canada I could rely on such a principle.

Mr. Mike Scott: Sir, you don't pay your property taxes to the Receiver General; you pay them to the municipality you live in.

Mr. Lewis Harvey: There is no such principle that is applicable, Mr. Scott, in municipal government anywhere. There is no legal nexus between the amount of property tax you pay and the kind or quality of service, if any, you receive in return.

Mr. Mike Scott: I just seek your view on that.

The tenants are also saying, they agree, that they're paying similar property taxes in relation to surrounding properties. They're also making the point that the band, in collecting these property taxes, is not providing a school service, for example. Forty percent of the property taxes in surrounding freehold residential properties are collected for school purposes. But the band is not providing a school service, nor is it in turn advancing any moneys to the province in aid of the education of children living in Musqueam Park.

Mr. Lewis Harvey: Let me respond to that. But first let me respond to a point you made earlier, Mr. Scott, which is that.... And by the way, the tenants have not said that the taxes have tripled since 1991, as you just indicated. The claim that's been made is that they've doubled.

• 1220

Mr. Mike Scott: I don't think I said anything. I just said they've gone up substantially; I didn't say tripled.

Mr. Lewis Harvey: I think you said tripled, but whatever you said, they have been making that claim. If you will look to the level of the increase in taxation in the city of Vancouver generally, over the same period of time, you'll find exactly the same increase. So it's misleading to simply bandy about numbers like that without referencing it to proper comparables.

Dealing with your point on the education tax, prior to the advent of taxation by first nations, the taxes that were collected from leasehold properties on reserve had two components. One was a school tax component, which went to the provincial government; the second was substantially the amount that went to the local municipal government. When the province vacated the taxation field, the whole of that tax room, if I can call it that, was opened up to first nations. I think you will find it to be a fairly general sentiment amongst municipalities that they do not want to have neighbouring governments operating tax havens and drawing development and business activity away from their municipality. It's not healthy.

The second point is that because the governmental unit involved is smaller and because reserves have been historically underserviced, if I can put it that way, there is a genuine need to access that tax room to upgrade services. When you drive onto a reserve located in a municipality...you'll probably notice that in many reserves the pavement disappears once you cross the reserve boundary line.

So yes, your point is accurate that the rates of taxation that are being assessed by the band are comparable with the city and the city is remitting part of that to the province for education purposes. But so what?

The second point I would make, and it may not be a point that your committee has been advised of to date, is this. Surprisingly, education services are not provided to first nations children in the province of British Columbia, or indeed in any province in Canada, as a matter of right. What is required is that the federal government has to kick in—I think it varies from province to province—about $5,500 per capita before the provincial school system will allow access to their school programs for native students. So when you ask, must we in first nations pay nothing at all for education, the answer to that is no, because there is a substantial contribution to provincial education budgets that comes from the federal Department of Indian Affairs. In B.C. it's about $5,500 per capita per native student; it may vary in other provinces.

Mr. Mike Scott: Is Musqueam then transferring back some of the tax they're collecting to the federal government in aid of paying for the education of the Musqueam children?

Mr. Lewis Harvey: Why should they pay twice?

Mr. Mike Scott: I'm just saying that because you said the federal government is paying, but the Musqueam Band is actually collecting the money.

Mr. Lewis Harvey: No, they're not. I can't think of why they would. One of the points I made earlier was that there is a need to access this tax room to upgrade service levels that have historically been underserviced on reserve. If that's an objective, why would you transfer it back? It makes no sense.

Mr. Mike Scott: I think the argument you were advancing is that the federal government was having to pay for education of Musqueam children because the province wouldn't pay. So the federal government is actually paying for the cost of that education. On the other hand, it's the Musqueam Band that's actually collecting property taxes from the Musqueam leaseholders.

• 1225

Mr. Lewis Harvey: I think you're under a fundamental misconception, Mr. Scott, in thinking that somehow the provincial taxation scheme that exists outside of the reserve must necessarily be imprinted on the scheme that is in place on reserve.

Mr. Mike Scott: What I'm getting to really, Lewis, is that property taxes, as much as you may disagree, are tied to services. If you look at any property taxes in Canada, municipal property taxes, city property taxes, they are tied to services. In the community I live in, Terrace, the community at the end of each year sends out a disclosure of how they spent my property tax money and everybody else's. Some of it goes to providing roads and some of it goes to providing water and garbage pick-up and a whole range of things that municipalities provide. But by law they have to make that disclosure to me, and by law they cannot run either a surplus or a deficit. You know that as well.

Mr. Lewis Harvey: It's the same as the Musqueam.

Mr. Mike Scott: But the people who are paying property taxes on Musqueam have no access to the band's financial records and have no idea—

Mr. Lewis Harvey: Who told you that?

Mr. Mike Scott: The leaseholders.

Mr. Lewis Harvey: We just sent out.... Allyson can respond to that.

Ms. Allyson Fraser: We've just sent out the audited budget to the taxpayers. We have recently had a meeting with them to go over the budget, for acceptance. The leaseholders meet with a taxation advisory council that consists of parcel A residents, parcel B, as well as council members, to review these issues so that it's accepted by them as well.

Mr. Mike Scott: So you are making complete—and have been year after year—disclosure to the leaseholders as to what their property taxes were actually paying for.

Ms. Allyson Fraser: That's right.

Mr. Lewis Harvey: Absolutely.

Mr. Mike Scott: That isn't the information I have.

Mr. Andrew Charles: I think your assumptions really are unfair. You have decided that you're going to support an element of this particular so-called problem, when we come to you thinking you are going to be an unbiased person to look at the reality of what's happening here and then make an educated decision, a well-informed one, not on a biased basis but one that represents your honour as a representative of this country.

Chief Ernest Campbell: I think what we could do, Mr. Chairman, in response to any questions Mr. Scott has in regard to the taxation, is give him a full package. As has been mentioned, we have a taxation advisory committee in Musqueam consisting of Indian Musqueam Band members and the lessees in our community.

When we talk about taxation, I want to point out one thing, if I may, Mr. Chairman, and Lew mentioned it. When you come to the reserve boundaries, whether you're in a province, a municipality or a city, everything stops. The pavement stops, the water stops, everything stops. We have dirt; we have dusty roads, things of that nature.

I'll tell you one thing. Prior to our having a taxing authority in our community, the City of Vancouver up to that time took millions and millions of dollars out of taxes coming from the Musqueam Indian Band leased lands. Not one cent went into our community to upgrade our living conditions out of our tax dollars. You should remember that.

Mr. Andrew Charles: We had to pay for the amenities made available to Salish Park. Fortunately, through rather skilled negotiations on our part, we were able to be reimbursed for a portion of the cost from the City of Vancouver, because they were collecting taxes. It was a tax-rich area subsidizing the tax-poor area, as you well know exists in every civilization.

Mr. Jordan Point: On another issue of taxation, a province subsidizes municipalities; they don't do that to reserves. We don't get any subsidy for roads, sewer services, or that kind of thing. Municipalities get that from their province. So it's a balance.

The Chairman: Thank you, Mike.

Mr. Bryden.

Mr. John Bryden: It was ever thus in Canadian history down through the centuries. It was always the aboriginal people who have been called upon to be generous when there's a conflict. It seems to me you're back there again.

• 1230

My reaction to all this is that there is some federal government responsibility in the sense that the federal government negotiated a lease that was injurious to the band and now is injurious to new tenants who bought unwisely into leasehold properties that now they're going to lose significantly by. It seems to me, in the end, if I may say so.... As a matter of fact, let me put the question. Regardless of what the courts determine, is this not an issue that's going to drag on for years if the leaseholders continue to dig in their heels? Will it not continue to cost the band substantial moneys and unearned income?

Chief Ernest Campbell: We won't know that until we've invoiced them, until we don't receive any rent, and how much who pays and who doesn't. You must remember that both sides are waiting for leave to appeal this to the Supreme Court of Canada.

It possibly could. I don't know.

When you mention whether the federal government would come in and compensate Musqueam for the first 30 years of low rent and bail out the tenants if they feel it's too high.... We don't feel it's too high; we feel it's fair. That's entirely up to the federal government. The only thing I can go by is that the Honourable Minister of Indian Affairs, Jane Stewart, said she's staying out of the rental issue in Musqueam now.

It could drag on. I don't know. I have to rely on people to live up to the lease agreements they sign. As I mentioned before, if they don't, we would have to handle it in a business-like and professional manner, as a landlord-tenant issue, and we will take the appropriate steps to do this.

Mr. John Bryden: My point is simply this. In any landlord-tenant agreement across the country, within a group, if the tenants are difficult, it is often at great cost to the landlord. It is very, very difficult to evict tenants. It's very, very difficult to collect money. All I'm suggesting to you is that surely if there is an opportunity to resolve this situation, regardless of who's in the right, surely it is in the best interests of the Musqueam Band to see that happen.

Mr. Lewis Harvey: If I might respond, Mr. Bryden, the band, from the very first, has communicated to the tenants that the band is open to receiving proposals. That was done in early January. Another letter was sent out to all tenants in February, and more recently it was done at a meeting that occurred with representatives of the Musqueam Park tenants on March 31. We have not yet received any kind of proposal.

When I spoke to Ms. Findlay most recently, following the March 31 meeting, to ask whether they were going to be providing us with some kind of proposal, because she had indicated that they would be, she said no, and the reason was that it was difficult for them to make any kind of proposal until legal certainty is achieved in the courts. The kind of proposal they might make, if they get leave to appeal to the Supreme Court of Canada, might be very different from the kind of proposal they would make if they don't get that leave to appeal.

That's the long-winded answer. I think until there's certainty on the legal front, it's very difficult to conduct a negotiation when the range of annual rents is somewhere between $10,000 and $22,800. It's a bit of a crapshoot.

Mr. John Bryden: Finally, Mr. Chairman, I would just like to indicate my intention to move a motion that will be a recommendation that this committee would perhaps like to debate. But I'll leave it for now because we have to go on to another set of witnesses.

[Translation]

The Chairman: Yes, indeed, we are running short on time because the delegation from Nunavik is waiting. I know that we need a quorum to move a motion, but...

[English]

Mr. Mike Scott: A point of order, Mr. Chairman. Could Mr. Bryden tell us whether he intends to move this motion today?

Mr. John Bryden: I'll move it at the next opportunity, but we don't have a quorum, Mr. Scott. But I'm happy to discuss with you the nature of the motion.

The Chairman: Thank you very much.

• 1233

• 1240

[Translation]

The Chairman: We will now go on to our second order of the day:

Pursuant to Standing Order 108(2), crisis in the emergency medical evacuation system in the North.

We now welcome the chairman of Makivik Corporation, Pita Aatami, and the mayor of Kangiqsualujjuaq, Maggie Emudluk.

From Nunavik, we have Mr. Jean Dupuis, chairman of the board of directors of the Nunavik Regional Board of Health and Social Services; Mr. Bob Davis, president of First Air; and Peter Horsman, president of Air Inuit.

[English]

Mr. Aatami, you have a statement.

Mr. Pita Aatami (President, Makivik Corporation): Thank you, Mr. Chairman. I'll just make a couple of corrections in your opening remarks about my being the chairman of Makivik. I am the president of Makivik Corporation. I know it's hard to pronounce Kangiqsualujjuaq, so I'll forgive you for pronouncing it the wrong way. And Maggie forgives you also.

Thank you very much for—

[Translation]

The Chairman: Before you start, I want to tell Maggie how much we admire her for the very hard work she did when the avalanche happened in her community. She is the mayor of the community where there were so many deaths.

Madam, you have earned our respect. Members of the committee lived through this tragedy with you. It is a great honour to have you here, but at the same time, this is a sad situation because of Sarah's death last week after a fire. This is the reason why people form Nunavik are with us today.

[English]

Mr. Aatami.

Mr. Pita Aatami: Thank you, Mr. Chairman. As I was about to say, I am Pita Aatami, the president of Makivik Corporation, representing the Inuit of Nunavik. As you can see on the map here...we brought a map along to give you an idea of where we are situated.

Why are we here today? We've appeared before the standing committee before on the same issues, but since we had a crisis in our region, it was for me a trip I didn't want to have to take. Unfortunately, I had to come down to try to get the message across one more time.

We had a meeting this morning to discuss the tragedy we had in one of our communities. I believe you were getting newspaper clippings of what happened in one of our communities. That's the reason why we're appearing in front of the standing committee one more time.

Before I start, when we did appear in the past in front of the standing committee, we did talk about our issues. You made the right moves. You came out with recommendations. Unfortunately, they haven't been implemented. So we're hoping today that you can use your clout to get implemented what was recommended by your report.

My statement will be short and sweet. As I said, the reason I'm here is because of a tragedy. Where we are located, there are no roads leading to our region, so everything relies on airplanes. In order to go to one of our communities, we have to fly by airplane, and if there is a medical emergency in one of our communities, an airplane is like our ambulance.

Here, when there's an emergency you call an ambulance and it's there within a few minutes. In our case, when there's an emergency we have to call for an airplane. In some cases, because of the regulations that have been imposed on us by Transport Canada, we can't meet the demand when there's a medical emergency in one of our communities. So we're here today to see if there could be a special clause put in place by Transport Canada, so when there's a medical emergency, our pilots—depending on that person's capability, if he or she can fly or not—can pick up that person.

• 1245

A person was burned 10 kilometres out of our community, and there was no way they could be picked up because of the duty time regulations that had been put in place in October 1996. Ever since then, we've been trying to get a clause put in there for medical emergencies. Until now we haven't been successful.

It's unfortunate it had to come to this and a tragedy occurred. Maybe there is a chance now we will be heard and some changes will be made. But until then we have to keep lobbying to get these changes. We can't do it without your help. So we're here today in the hope that you can make the changes, because it just takes common sense, as a person.

Take yourselves, for example. If your mother, sister or daughter were dying, what would you do? Maybe this person would still be alive if we didn't have this regulation. These are the kinds of cases people have to take into account when there are no roads leading to any of our communities. Inuit are hunters and often have to rely on bringing food to the table from the land. It's not as if we can just have a farm or go to a supermarket like people do in the south.

I'm trying to make it very short and I'm trying to make it clear to you that there has to be a change in the transport regulations that were put in place in 1996, to have a clause for medical emergencies. As I said, people in the south take ambulances for granted. If an ambulance is one minute or two minutes late, somebody causes an uproar. In our case, because of this duty time regulation, we couldn't get there for hours because we didn't have pilots.

Somebody might ask why we don't just get more pilots to offset this, but it's not that simple. We're a business. We have an airline and we're trying to service the north, but at the same time we can only go so far. If I have standby pilots doing nothing, who's going to pay for that? So it's a complicated thing, but this problem could be solved just by adding, say, a good Samaritan clause in there.

As I was saying earlier, I was going to make it short, but once you have a quorum, I hope you'll make the motion you were ready to make earlier about the previous committee people who were here.

So thank you very much. I'll turn the mike to Jean Dupuis.

Mr. Jean Dupuis (Chairman, Nunavik Regional Board of Health and Social Services; and Director, Nunavik Operations, Air Inuit): Thank you, Mr. Chairman.

On June 1 in Nunavik, in Kangiqsualujjuaq, there was an incident where an elderly woman was badly burned, with third-degree burns from head to toe. I am the chairman of the Nunavik Regional Board of Health and Social Services. It's really difficult for me to answer why it took almost 12 hours before we were able to bring a physician to the side of this elderly injured woman, and why consequently it took almost 24 hours before we were able to get her to a specialized centre for burned people in Montreal.

It's difficult to say, but it was due to the existing regulations of Transport Canada that control and limit the duty time pilots are able to fly. This is the third time we have brought this issue to this committee. We've been raising it with Transport Canada as well. But it's been difficult for us to get a rapid intervention or consideration to what we are asking, in order to prevent similar situations from happening.

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What happened in Nunavik last week was predictable, and it will surely happen again. The very next day there was another Medevac call that we were not able to answer with the local company.

There is a national committee and group of interested parties who work in the aviation sector that has been looking at this issue, but it's a much too heavy process that is taking way too long. We would like the federal government to take a leadership role and to ensure that Transport Canada authorities recommend that a waiver with very specific criteria be put in place for Nunavik. As Mr. Aatami said, we have no alternative in Nunavik but to use air carriers. After darkness we can only use aircraft; we cannot use helicopters. It very much restricts our capability to intervene and to bring medical care to people in need.

I'll read you a paragraph of my letter I sent last week to the Honourable Jean Chrétien, our Prime Minister:

...we have been making representations to Ottawa for some time now, but to no avail, about the negative impacts and risks of deaths this regulation can increase in our region. Nunavik has no road network and air transportation is our only means of providing emergency medical evacuation services. We are sure that present regulations can be amended to permit well controlled and well managed procedures for those operations in our regions. It is not a canadian way of life to let people suffer while our expert resources stand-by as spectators.

In the case of Sarah Ningiruvik last week, Mrs. Ningiruvik suffered greatly before passing away, and I think everybody in Nunavik really feels for this person and her family.

So we request that this committee do what is necessary to make sure the Government of Canada takes the necessary actions.

I would also like to ask that the two documents I tabled be included in the minutes of today's meeting. Thank you.

[Translation]

The Chairman: Thank you, Mr. Dupuis. Do you want the letter to the Prime Minister to be included also?

[English]

Mr. Jean Dupuis: Yes, please.

[Translation]

The Chairman: Do members of the committee agree that Mr. Dupuis' letters be included in today's minutes and proceedings? Agreed? Thank you.

[English]

Ms. Maggie Emudluk (Mayor of Kangiqsualujjuaq): Thank you, Mr. Chairman.

First of all, having personally experienced the tragedy of the avalanche on January 1 in which 25 people were injured, I could just imagine what would have happened if we had had no airline pilots available that morning or that night. Another tragedy happened last week. How many more tragedies are we going to see before this government takes any action?

I think it's totally unacceptable, and we need results as soon as possible. We're talking about lives here. We're part of this country, and I think we need the same basic services everyone else is getting down here. So I really hope your committee will take this seriously and bring it to the right people so that they can act quickly, and hopefully results will come in.

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Right now the people of Nunavik are waiting on you. They're waiting on the government to take this very important action. So we hope to see positive results in the near future.

Thank you.

The Chairman: Thank you, Madam Emudluk.

[Translation]

We will now hear Peter Horsman, president of Air Inuit, and Bob Davis, president of First Air.

[English]

Mr. Peter Horsman (President, Air Inuit): I thought I might show you on the map exactly the technical aspects of the incident on June 1. This is the northern third of Quebec, from the 55th parallel north. There is a health centre here, a hospital, but with restricted capabilities, and another one here in Kuujjuaq. Serious medical cases are evacuated south from here and here on the Challenger jet by the Government of Quebec.

On the evening of the occurrence, the community in question was right here. We were unable to send an airplane from either the ground here or Kuujjuaq. Another airline in Kuujjuaq was unable to go. We called another airline here, First Air, which was unable to go for crew duty time. Borek Air was unable to go, and Air Baffin was unable to go. Another airline, down in this area, was called and they were unable to go. So it wasn't really just a question of the one airline; it was all airlines within a thousand miles.

It would be great and it would be ideal if there were people around—

Mr. John Bryden: On a point of order, Mr. Chair, could I ask the photographer to respect the committee hearings and perhaps desist for a little while? It's very difficult to follow what's being said when I have a photographer flashing photographs in my line of vision.

[Translation]

The Chairman: John, I'm sorry but I should have informed the committee. I gave him permission to take pictures for the newspaper and for Makivik Corporation of Nunavik. They don't get to appear before a committee very often.

[English]

Mr. John Bryden: That's fine, but as a former journalist, I think he's taken quite enough photographs.

Mr. John Finlay: That's right.

Mr. John Bryden: He should learn to use a fast film rather than a flash.

The Chairman: Okay, thank you.

Peter, go ahead.

Mr. Peter Horsman: It's a question of context. It's a question of the number of medical evacuation flights. There are probably four a month from this health centre, and maybe another three or five a month from the other one here. There isn't sufficient volume to come anywhere near paying for a crew's salary, let alone buying an aircraft.

Air Inuit has operated there for over 20 years, with 250,000 flight hours and a million passengers, and we've never hurt anybody. We feel we are qualified to participate more significantly in the decisions about the evacuations in the area.

In our view, the CARAC working group is too slow. In this particular case we're requesting that a waiver be issued very rapidly under tightened technical conditions.

It's currently legal, for example, to fly single-engine IFR anywhere in this area in the wintertime. We could do it cheaper and do it that way, but we feel it's too dangerous. We don't see any aircraft flying to England with one engine. We want to maintain a twin turbine two-IFR pilot with tightened provisions and control provisions, be allowed to assess the condition locally, and go in the case of extreme emergency.

The second element is, as was suggested to me by one of the members who has departed, that we just hire more pilots. We don't have the money for that. We were close to getting it, and NAV CANADA came by and picked it up.

So that's another way to approach it, to perhaps look at our area as part of the north of 60 degrees area, which is exempt until November next year, and perhaps we can make some contribution there. But to get back to the central point, it is critical and it is life-threatening, as we have mentioned in our documents over the last 18 months.

Thank you.

The Chairman: Thank you, Mr. Horsman.

Mr. Davis.

Mr. Bob Davis (President, First Air): As a quick point, I'd like to make it clear to the committee that the request being put forward here to have a waiver or some type of operation specifications to allow medical emergency flights in the interim while the CARAC process takes place is not commercially driven. The amount of business that in particular Air Inuit will receive by being able to do this is extremely limited. So this is not a commercially driven request. This is not a make-or-break situation for the company. It is simply to be able to complete a very few number of Medevac flights that are necessary, and without which, unfortunately, people are suffering.

I'll defer to Pita.

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The Chairman: Mr. Pita Aatami.

Mr. Pita Aatami: As I said in the beginning, we were going to make it short and sweet. I think it's very clear to everybody what we're after today. I don't think even any questions should be asked. I think it should just be implemented; get some kind of waiver to provide what we're looking for.

If anybody would like to ask questions, I'm ready to answer them if I can.

[Translation]

The Chairman: Thank you. We will now go to questions.

Mr. Scott.

[English]

Mr. Mike Scott: The only thing I'd like to know is how, without a quorum, can we pass a motion? I defer to you, Mr. Chairman, but it seems to me these people have made a very strong case. It's obvious that regulations that may work in southern Ontario or southern British Columbia don't work very well up in the north, and something needs to be done and it needs to be done now. How do we do it?

Mr. John Bryden: Perhaps I may suggest, Mr. Chairman, that before the end of the week you can arrange to call a very quick meeting in which we can discuss this motion and perhaps another motion, just so we have quorum. We can probably do it all in about 20 minutes.

What I suggest, Mr. Scott, is that the chairman himself might be interested in framing the appropriate motion in this case, because he knows the situation so well.

Mr. Gerald Keddy: Mr. Chairman, I'm just shocked that we don't have the ability to take a Medevac flight at any time, regardless of how many hours the pilots have been flying that day. I would have argued, if someone told this situation to me, that you can work extra hours, a pilot anywhere in any country, for Medevac reasons. I'm totally amazed that they can't.

Obviously, if you have a pilot who just came in from a Medevac and there's suddenly another one and they needed to go out again, then maybe you would have to say no. But within reason, so what? I'm surprised. I can't believe it.

Mr. Pita Aatami: It is the case. That's why we're here today.

Mr. Gerald Keddy: I understand that. I'm very shocked.

Mr. Pita Aatami: A couple of years ago there was an incident and a lot of questions were raised. Was that pilot capable? Was he too tired to fly off and try to pick up a person who was sick? That's why they came out with this regulation. We understand that the regulations are there to protect the people, but as we said, do it within reason. We wouldn't send off our pilots unnecessarily, if they're too tired or something.

I'll give you an example. These duty time regulations that were put in place—you can only be on duty for 14 hours and you can't fly more than 8 hours. So if you get up and are on duty starting at 7 a.m. and it's 12 p.m. but you haven't flown yet, that isn't taken into account. Maybe between 7 a.m. and 12 p.m. you had a nap or something, but you were still considered on duty. So with these regulations, there should be some judgment calls. In our case, there should be judgment calls.

Bob, you wanted to add something.

Mr. Bob Davis: In the past, up until December of 1996, there was a provision in the law to allow for flights for humanitarian reasons based on a judgment call by the company. With the introduction of the new CARS regulations in December 1996, a reverse onus was put on both the company and the pilot, in the law, that says the company shall not plan a flight and a pilot shall not accept a flight. Consideration has been given by our companies to just do the flights anyway. Unfortunately, however, our insurance and whatnot would not be applicable to that flight.

What's happened is that, yes, quite a long time ago there were some accidents involving Medevac flights. Some of the laws are appropriate to restrict some companies from going overboard as far as pilot fatigue and whatnot. So we certainly agree with some laws being in place to restrict flight and duty time, because there are people who will push the limits. However, for a properly managed company, with the proper training programs and controls in place, we see no reason why an operations specification could not be given to specific companies who are properly managed and have a full infrastructure to run the company.

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I hope I've answered your question.

Mr. Gerald Keddy: The other question, just quickly, is how many a year on average?

Mr. Peter Horsman: Roughly 200 to 250 flying hours from both of those locations in the whole top third of Quebec. I'd emphasize what Bob just mentioned, that Air Inuit is a very conservative company. We've declined going single engine, and the excerpt that I think has been passed out to you with the highlighted area indicates that the Medevac accident rate is lower than the 1993-1995 average accident rate for all Canadian registered aircraft. This is Transport Canada's recent documentation saying it is safer than what is already recognized as an inherently safe national aviation system. I don't perceive it, and I don't speak for any area other than Nunavik and Air Inuit, as being on the cutting edge of heroic suicidal aviation activity.

Mr. Gerald Keddy: Thank you.

[Translation]

The Chairman: Thank you. Before giving the floor to Nancy, I want to say that there is a crisis every time an accident happens in Nunavik. When all MPs are in Ottawa and want to help people from other countries as they did when it was decided to send F-18 jets to Kosovo, it takes all of 18 seconds to press a button and help foreign countries. When it is inside our own country, in Nunavik, you need months if not years to make things happen. We should have a special meeting this week. Mr. Bryden wants to table a motion. Go ahead, John.

[English]

Is that okay for that meeting?

Mr. John Bryden: Oh, yes. I don't need to propose a motion for it, do I?

The Chairman: No.

Mr. John Bryden: I think we're all agreed.

The Chairman: For the special meeting this week, what day do you prefer?

Mr. John Bryden: Can you do it on Thursday?

Mr. Mike Scott: Thursday is our normal day.

The Chairman: At what time on Thursday?

Mr. Gerald Keddy: We've got a committee meeting.

Mr. Mike Scott: No, we don't.

Mr. John Bryden: Don't we have one at 6 p.m.?

Mr. John Finlay: Have it in the morning.

The Chairman: Do you want it in the morning?

Mr. John Bryden: At 11 a.m.

Mr. Mike Scott: Or 9 a.m. might be even better.

Mr. John Bryden: It will be a quick meeting—at 9 a.m. or 11 a.m.

The Chairman: I'm on duty, but I can get off. But 9 a.m. would be better. Why not?

Mr. John Bryden: Let's do it at 9 a.m. and then we'll be done.

The Chairman: Gerald, 9 a.m. How about you, Nancy?

Mrs. Nancy Karetak-Lindell: I can't be here.

The Chairman: Okay.

Thank you very much. Pita, excuse me, do you have a statement for the end?

Mr. Pita Aatami: I would just like to say thank you for giving me this opportunity one more time to make a presentation to the standing committee. As I said earlier, the report that came out with your recommendations was greatly appreciated. I also would like to put on record that whatever was passed to you from Air Inuit be put on the record as being passed to the standing committee.

Once more, thank you very much for this opportunity.

[Translation]

The Chairman: Are we all agreed to include this in the proceedings? Thank you very much.

The meeting is adjourned.