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37th PARLIAMENT, 2nd SESSION

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

EVIDENCE

CONTENTS

Tuesday, January 28, 2003

1005

The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.))

Chief Matthew Coon Come (National Chief, Assembly of First Nations)

1010

1015

1020

1025

1030

Vice Chief Ghislain Picard (Assembly of First Nations)

1035

1040

1045

Chief Matthew Coon Come

1050

1055

The Chair

Mr. Brian Pallister (Portage—Lisgar, Canadian Alliance)

Chief Matthew Coon Come

Mr. Brian Pallister

Chief Matthew Coon Come

Mr. Brian Pallister

Chief Matthew Coon Come

Mr. Brian Pallister

Chief Matthew Coon Come

The Chair

Mr. Brian Pallister

1100

The Chair

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ)

Vice Chief Ghislain Picard

Mr. Yvan Loubier

The Chair

Vice Chief Ghislain Picard

The Chair

Mr. Pat Martin (Winnipeg Centre, NDP)

1105

Chief Matthew Coon Come

The Chair

Mr. John Godfrey (Don Valley West, Lib.)

Chief Matthew Coon Come

1110

Mr. John Godfrey

The Chair

Mr. Brian Pallister

Chief Matthew Coon Come

Mr. Brian Pallister

Chief Matthew Coon Come

Mr. Brian Pallister

Chief Matthew Coon Come

The Chair

Mr. Yvan Loubier

Vice Chief Ghislain Picard

Mr. Yvan Loubier

Vice Chief Ghislain Picard

The Chair

1115

Mr. Pat Martin

Chief Matthew Coon Come

Mr. Pat Martin

Chief Matthew Coon Come

The Chair

Ms. Nancy Karetak-Lindell (Nunavut, Lib.)

Chief Matthew Coon Come

1120

The Chair

Mr. Charles Hubbard (Miramichi, Lib.)

Chief Matthew Coon Come

Mr. Charles Hubbard

Chief Matthew Coon Come

Mr. Charles Hubbard

Chief Matthew Coon Come

The Chair

1125

Chief Matthew Coon Come

The Chair

1130

Ms. Sheila Fraser (Auditor General of Canada, Office of the Auditor General )

1135

The Chair

Mr. Brian Pallister

1140

Ms. Sheila Fraser

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

Mr. Jerome Berthelette (Principal, Office of the Auditor General )

1145

Mr. Brian Pallister

Mr. Jerome Berthelette

Mr. Brian Pallister

Mr. Jerome Berthelette

Mr. Brian Pallister

Mr. Jerome Berthelette

Mr. Brian Pallister

The Chair

Mr. Yvan Loubier

Ms. Sheila Fraser

Mr. Yvan Loubier

Ms. Sheila Fraser

Mr. Yvan Loubier

Ms. Sheila Fraser

Mr. Yvan Loubier

Ms. Sheila Fraser

1150

Mr. Yvan Loubier

Ms. Sheila Fraser

Mr. Yvan Loubier

Ms. Sheila Fraser

Mr. Yvan Loubier

The Chair

Mrs. Bev Desjarlais (Churchill, NDP)

Ms. Sheila Fraser

Mrs. Bev Desjarlais

Ms. Sheila Fraser

Mrs. Bev Desjarlais

Ms. Sheila Fraser

1155

Mrs. Bev Desjarlais

Ms. Sheila Fraser

The Chair

Mr. John Godfrey

Ms. Sheila Fraser

Ms. Maria Barrados (Assistant Auditor General, Office of the Auditor General )

1200

Mr. John Godfrey

Ms. Maria Barrados

Mr. John Godfrey

Ms. Maria Barrados

The Chair

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

The Chair

Mr. Brian Pallister

1205

Ms. Sheila Fraser

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

The Chair

Ms. Nancy Karetak-Lindell

Ms. Sheila Fraser

Ms. Nancy Karetak-Lindell

The Chair

Mr. Yvan Loubier

1210

Ms. Sheila Fraser

Mr. Yvan Loubier

Ms. Sheila Fraser

The Chair

Mr. John Godfrey

Ms. Sheila Fraser

1215

Mr. John Godfrey

The Chair

Mrs. Bev Desjarlais

Ms. Maria Barrados

Mrs. Bev Desjarlais

Ms. Maria Barrados

Mrs. Bev Desjarlais

The Chair

Mr. Charles Hubbard

Ms. Sheila Fraser

1220

Mr. Charles Hubbard

The Chair

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

Ms. Sheila Fraser

Mr. Brian Pallister

The Chair

Mr. Gérard Binet (Frontenac—Mégantic, Lib.)

Ms. Sheila Fraser

Mr. Gérard Binet

The Chair

Mrs. Bev Desjarlais

1225

Ms. Sheila Fraser

Mrs. Bev Desjarlais

The Chair

Ms. Sheila Fraser

The Chair

CANADA

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

NUMBER 015

2nd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, January 28, 2003

[Recorded by Electronic Apparatus]

À (1005)

[English]

The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.)): Welcome, everyone.

The order of the day is Bill C-7, An Act respecting leadership selection, administration and accountability of Indian bands, and to make related amendments to other acts.

We're proud to welcome today a special guest from the Assembly of First Nations, the national chief, Matthew Coon Come, assisted by Ghislain Picard, vice-chief, and Roger Jones, legal counsel.

Colleagues, the chief has informed me that he has a presentation of approximately 40 minutes, and I think we should allow him that time. What he has to tell us is important and will help us in our deliberations, so I ask you to cooperate. When we get to the question period, as you saw yesterday, if you have a three-minute slot and you ask a two-and-one-half-minute question, it really puts a lot of pressure on our witnesses because it allows them 30 seconds to respond.

No offence to my colleagues, but we are more interested in the answers than in the questions. We'll do our politics somewhere else. The cameras are on, I know, but in all fairness to our witnesses, please ask some very brief questions.

Chief, I invite you to start your presentation.

Chief Matthew Coon Come (National Chief, Assembly of First Nations): Thank you very much, Mr. Chairman and members of the committee.

[Witness speaks in his native language]

We thank you for the opportunity to appear before you again on the matter of Bill C-7, the First Nations Governance Act.

My name is Matthew Coon Come, the national chief of the Assembly of First Nations. With me today is the Assembly of First Nations regional vice-chief for the Quebec-Labrador region, Mr. Ghislain Picard, who will be taking part in the presentation.

I'm also joined by Roger Jones, our senior legal counsel at the Assembly of First Nations, who can assist us in answering any technical questions.

As you know, the Assembly of First Nations is the only national first nations organization that has first nations governments as its members, and those first nations governments represent all of their citizens, wherever they live. This fact was confirmed by the Supreme Court of Canada in the Corbiere case.

The national chief is elected by the designated representatives of the first nations governments. In this way, the AFN is a democratic body; we are not just another lobby group, nor are first nations simply a special interest group.

Section 35 of Canada's 1982 Constitution Act recognizes first nations or Indians as one of three distinct aboriginal peoples. Section 35 also recognizes our inherent aboriginal and treaty rights. This is important to our discussions today on Bill C-7.

Let me state unequivocally that the Assembly of First Nations does not support Bill C-7, nor do we think it can be fixed through amendments. The fact of the matter is that the process from the beginning was flawed, and the so-called consultation process was a complete failure.

There is no reason to proclaim success in consultation simply because the minister declares that technology was used. Consultations through the Internet and 1-800 numbers are totally inappropriate. Many first nations are not on-line, and in any case, these kinds of anonymous consultations are unreliable.

Who knows how many calls to the 1-800 number were from first nations people? Maybe the Internet consultations were a couple of people with a lot of time on their hands. So the figure usually thrown around, of 10,000 people participating in consultations, is questionable at best. A more reliable indicator is the number of people who actually showed up for the community consultations.

On average, less than 3% of any given community took part. I presented statistics and graphics on this matter the last time I appeared on this issue, and I can make them available to you upon request.

In any case, recent statistics indicate there are more than 600,000 first nations peoples in Canada, likely closer to 700,000. Moreover, if the minister claims that 200 first nations communities participated--and such figure is doubtful--the vast majority, if not all of them, rejected the initiative. Consultations do not equal consent.

The Royal Commission on Aboriginal Peoples is the modern defining standard of consultation. No one can argue with that. That is why the RCAP report is widely endorsed by first nations as the model for real progressive change. There simply is no comparison between the RCAP consultations and the First Nations Governance Act consultations.

Bill C-7 merely represents the analysis and speculations of non-aboriginal consultants and the wishful thinking of federal bureaucrats whose objective, it seems, is to maintain a dysfunctional relationship. How else can one explain Bill C-7? Bill C-7 is not about good governance. Just look at the name: “An Act respecting leadership selection, administration and accountability...and to make related amendments to other Acts”.

Bill C-7 is about imposing one perspective on democracy and accountability on a diverse group of more than 50 first nations and more than 633 first nation communities. Why should a system that does not live up to Canadians' expectations of the principles of democracy and accountability work for first nations peoples? We have our own proven traditions of democracy and accountability.

We are fully aware of the significance of this bill being referred to committee after first reading. In theory, at least, it provides Parliament with greater and meaningful opportunity to design and debate the content merits of the bill.

We were also interested observers in the recent debate and activity about restoring democracy and independence to parliamentary committees. Under these circumstances, we fully expect the committee to embrace the opportunity to give the first nations a real voice in this process by listening to them and then reflecting their views in their report and recommendations.

If first nations express loud and clear that they do not support this bill, and if they encourage the committee to recommend scrapping Bill C-7, then that should be your guidance. The usual pressures from the Prime Minister and the Minister of Indian Affairs to force unwanted legislation on first nations should be non-existent.

Prime Minister Chrétien and Minister Nault are both on public record as saying that this legislative initiative need not produce a legislative result if the discussion and the debate determine it is not in the best interests of first nations. So I encourage you to listen and learn as our people speak to you about issues like fiduciary duties, treaty rights, aboriginal rights, and constitutional versus legislative options.

These are not hollow words; they are words that get to the core of the relationship between first nations and Canada. They are fundamental and paramount in the consideration of Bill C-7.

The fiduciary relationship is key. It is not merely about the application of certain words to describe an empty concept. A fiduciary relationship is a trust-like relationship in both the legal sense and the moral sense. It's more than that, but that's one way to understand it. Our fiduciary relationship is between first nations and the government--not the governing party of the day, but the Canadian state. Each and every one of you, as an individual parliamentarian, has an obligation to act in the best interests of first nations peoples on this matter. Your obligations and loyalties are not to your parties or to the government.

As you know, the federal legislative authority being utilized in this exercise in section 91.24 of the Constitution Act, 1867. The specific wording of section 91.24 is that the federal Parliament has legislative authority over Indians and lands reserved for Indians. However, section 91.24 is a legal reality in which first nations peoples had no input. First nations peoples would have rejected any foreign or external legislative jurisdiction being imposed on us and our lands.

In 1981, the Supreme Court of Canada rendered its first judgment on the meaning and significance of section 35 of the Constitution Act, 1982. To refresh your memory, section 35 states: “The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed”.

The case that the Supreme Court of Canada dealt with at the time was the Sparrow case. The court clearly stated that legislative authority had to be exercised in a manner as to avoid infringing on aboriginal and treaty rights. In an earlier Supreme Court of Canada case, the Guerin case, the court held the Crown accountable for failure to act in the best interests of first nations in a land transaction.

A fiduciary responsibility is one where one party, the fiduciary, has the responsibility to ensure that matters are dealt with in the best interests of the other party, the beneficiary. The fiduciary relationship may not mean much to governments rushing to pass legislation, but you ignore it at your peril; it has legal significance.

The Constitution Act of 1867 is clear. Parliament exercises legislative authority. It is not a prerogative of the Crown or the party in power. In our view, all members of Parliament, both the House of Commons and the Senate, have a duty to ensure that any legislative measures being proposed concerning first nations peoples is in their best interests. Constitutional and common law established that obligation.

À (1010)

In 1999, the Supreme Court of Canada issued an opinion in the Reference re Secession of Quebec matter. You may recall that as part of the ongoing debate about Quebec separation, the federal government used its authority to ask the Supreme Court of Canada to consider the right of Quebec secession. The Supreme Court of Canada conducted a hearing on this matter, which Quebec refused to participate in, and issued an opinion.

The opinion is interesting reading, and I would encourage you to review it, but the point I want to highlight is that the court addressed the significance of the patriation of the Canadian Constitution and the transformation of the Canadian system of government. Let me read a portion of that opinion:

...with the adoption of the Charter, the Canadian system of government was transferred to a significant extent from a system of parliamentary supremacy to one of constitutional supremacy. The Constitution binds all governments, both federal and provincial, including the executive branch.... They may not transgress its provisions...

What does this mean? It means the government cannot continue to act arbitrarily and unilaterally in dealing with first nations' interests. The government must act in accordance with the Constitution Act of 1982 so as not to infringe on aboriginal and treaty rights, and must act in the best interests of first nations people. With respect to Bill C-7, it is obvious the government is acting contrary to the law. So it is the responsibility of this committee and all parliamentarians, individually and collectively, to safeguard and promote respect for the Constitution and the common law, which includes avoiding infringement of aboriginal and treaty rights and acting in the best interests of first nations peoples.

On February 28, 2002, 11 months ago, I appeared before this committee on the invitation to address the government's legislative initiative on first nations governance. I know some of you were there. At that time a bill had not yet been produced. The minister and his department were still working towards the development of draft legislation. In June 2002 the minister tabled the legislation as Bill C-61. That turned into Bill C-7, because Parliament was prorogued and a new session started with the presentation of the Speech from the Throne. Back on February 28, 2002, I advised this committee that the first nations governance legislative initiative was a bad idea. It was procedurally flawed, the issues to be addressed were flawed, and the approach of separating first nations governmental administration from other important matters, like health, resources, treaties, land, was flawed. To be blunt, we saw another disaster in the making. With Bill C-61, now Bill C-7, our fears are a reality.

As I said earlier, Bill C-7 is the cumulation of a predetermined outcome. If you really want to know what the motivation and the objective of the government is in this legislative initiative, I would direct you to the Department of Indian Affairs website. There you will see a list of research analysis and discussion papers prepared by non-aboriginal consultants. I see on your schedule that you will be hearing from one of them, Professor Brad Morse, formerly chief of staff to the former Minister of Indian Affairs, Ron Irwin. I hope you will question Professor Morse about whether the advice given to Minister Nault included the political strategy to undermine first nations leadership and the communications strategy to manufacture supportive, although uninformed, media and public on the issues of transparency and accountability concerning first nations governments.

Our understanding of the consultants' work is that recent case law, such as Corbiere, has determined the Indian Act is discriminatory and cannot be sustained, so remedial measures are required to address the interests of the government, instead of interests of first nations. Second, the report on accountability established the public's right to know what government does and how it spends public funds as a modern trend. First nations fully support these principles, but in this instance it is being quoted as good governance practice. In reality, the government is making greater public participation in the process of governance the means to download responsibilities and to offload bureaucratic costs. If you compare the consultants' work with the ministerial mandate and the end product, Bill C-7, you'll see for yourself the continuity and the consistency I speak of.

À (1015)

As in the past, this legislative initiative is dressed up and sold as a solution to the Indian problem.The biggest Indian problem is unilateral policy and law-making, which continues to threaten Indian people as a subject matter. Based on my previous statements about your obligations as parliamentarians, I urge you to examine the background thoroughly so you can undertake a proper examination of the bill and issue the proper advice to the rest of your parliamentary colleagues.

As you may be aware, shortly after Bill C-61 was tabled the Assembly of First Nations held its annual general assembly in Kahnawake, in July 2002. With the benefit of having reviewed and analysed the proposed legislation, the AFN soundly rejected it as a non-starter.

I will table some of our documentation in that regard, and I'm sure you will be receiving plenty of it from other witnesses in the coming weeks. Again, I encourage you to read and consider it thoughtfully. You will notice a lot of similarity in the analysis assessment for first nations and their lawyers from across the country. It's not merely rhetoric; the concerns and fears are legitimate.

The Minister of Indian Affairs has repeatedly stated that the legislative initiative will not affect aboriginal treaty rights. Despite these assurances, the minister could not convince his cabinet colleagues to include a non-derogation clause in the bill. All too often the government underestimates the effects of their laws and policies in their capacity and others' capacity to handle the financial and administrative implications of these laws and policies.

A concrete example of this was Bill C-31, which was an amendment to the Indian Act in 1985 concerning the elimination of the express discrimination against Indian women who married non-Indian men. First nations governments, our women and children, have all paid the price for a legislation that was enacted without any thought to implementation issues.

In our view, this kind of work has not been undertaken for Bill C-7, and if so, not thoroughly. It is not a good idea to guess at the implications, whether as to the cost or legal effect. Due diligence, fiduciary duties, and constitutional duty require that the government should be satisfied, based on thoroughness of examination and analysis, that the examinations have been done and that disaster will not materialize.

We firmly believe that fairness in this situation dictates that the federal government should have and must undertake analysis on the possible infringements of aboriginal and treaty rights based on established common law. The courts have clearly stated that not all first nations have the same aboriginal rights and treaty rights. The courts have stated that such matters can only be addressed by a proper examination of the facts relating to each group. This means that an examination of history, customs and traditions, and relationships is a necessary undertaking to promptly determine each group's aboriginal and treaty entitlement.

It is not up to first nations to undertake such assessments; it is federal legislation being driven by the federal government, and it's up to them to satisfy themselves and first nations that the infringements are not being legislated. In that regard it would be advisable for the committee to commission its own legal analysis with an independent lawyer or firm.

Our own analysis concludes that Bill C-7 does indeed violate aboriginal rights, and the clearest example is in the area of elections. There is existing jurisprudence that recognizes leadership selection as a custom or practice integral to a first nations society. Ironically, the federal government loathes having the courts involved in resolving these kinds of issues, but surely that is exactly where these matters will end up.

In fast-forwarding repairs to first nations governance, the federal government is sending an open invitation to the courts to fix another legislative problem. First nations are already preparing legal action, and the Federation of Saskatchewan Indian Nations has filed a claim based on the anticipatory breach on treaty rights. If one of the supposed goals is to stem the tide of litigation and stop the courts from writing your policy for you, you may find that instead you're opening the floodgates.

À (1020)

We also maintain that any proper assessment on cost implications and administrative implications on first nations should start with an assessment of current first nations capacities. Are first nations currently equipped to handle existing governmental administrative requirements? Is there an administrative and organizational base that can be built upon? If not, what is the requirement? If so, what is the level of increased duty and responsibility that can be sustained?

The Auditor General recently issued a report that was highly critical of the reporting requirements imposed on first nations governments by various external governmental departments and authorities. She stated, “We estimate that at least 168 reports are required annually by the four federal organizations that provided the most funding for major federal programs”. That's 168 reports. This means first nations, even those with only a couple of hundred people and limited resources, are forced to file an average of three reports per week, with all the attendant time and costs involved. Is someone saying we are not accountable?

The Auditor General's report is another wake-up call concerning the inappropriate expectations placed on first nations governments by an external and distinct authority. One of the observations in the Auditor General's report about Bill C-7 was: “This act could change the way first nations are required to report; however, it did not form part of our discussions with first nations and is not considered in this study”. Does the First Nations Governance Act change the way first nations are required to report? No. The First Nations Governance Act is completely contrary to the findings of the Auditor General. Instead of streamlining, the FNGA will merely add more bureaucratic red tape.

I am pleased to hear that the committee has invited the Auditor General to present her findings and views about the matter and to engage her in a discussion. The Auditor General prepared her study by working with first nations to get a real understanding of the reality our governments face. Had the minister really talked with our people without any preconceptions, he would have come up with a better solution to the “Indian problem”. As a committee, you have an opportunity to do this too.

I would also encourage the committee to undertake an examination of the federal government problem in handling first nations affairs. Good governance for first nations should start with a plan to get the government out of the business of running the lives of first nations people. We organized the federal system to accommodate a respectful, constructive, and mutually beneficial government-to-government relationship with first nations governments.

I'll say here that a respectful and government-to-government relationship should not require first nations governments to appear before parliamentary committees. There need to be consultations and discussions based on intergovernmental processes and structures. The inadequacies present in first nations governance are a direct result of federal policy and law and federal administration.

Perhaps what we need to look at is the federal government problem. Nothing in Bill C-7 is directed at fixing the federal government problem. Why is that? Many of the special investigations and examinations of the so-called Indian problem have pointed out that government's handling of Indian affairs has been destructive. On January 7, 1998, the Government of Canada presented in this building its response the report of the Royal Commission on Aboriginal Peoples. Gathering Strength—Canada's Aboriginal Action Plan continues to be the official federal government response to RCAP and its new policy statement to deal with aboriginal peoples.

In the government's own literature, the Gathering Strength policy and strategy is described as being "based on recognizing past mistakes andinjustices; commencing reconciliation, healing and renewal; and building a jointplan to support economic development and strong sustainable Aboriginalgovernments. "

Bear with me as I read the statement of reconciliation, identified as a key achievement in the long-term plan. These are words that are meant to guide the entire federal government, and they are worth stating for the record:

Attitudes of racial and cultural superiorityled to a suppression of Aboriginal culture and values....We must recognize the impact of these actions on the once self-sustainingnations that were disaggregated, disrupted, limited or even destroyedby the dispossession of traditional territory, by the relocation of Aboriginalpeople, and by some provisions of the Indian Act. We must acknowledge that the result of these actions was the erosion of the political, economic and social systems of Aboriginal people and nations.

À (1025)

In renewing our partnership we must instead continue to find ways in which aboriginal people can participate fully in the economic, political, cultural, and social life of Canada in a manner that preserves and enhances the collective identities of aboriginal communities and allows them to evolve and flourish in the future.

I know people joke and refer to Gathering Strength as “Gathering Dust.” Sometimes, as the saying goes, we laugh but we may not cry. Our people believe in the primacy and honour of the spoken word. We believe in honouring our commitments. We took those words to heart when they were spoken, and we look forward to a new era.

Tell me, where in Bill C-7, and the process that created it, is the recognition of past mistakes and injustices? Where is the reconciliation, the healing, and renewal? Why do we find ourselves in the current environment of mistrust and conflict between first nations peoples and the government, generated by the Minister of Indian Affairs and Northern Development's unilateral, adversarial approach. What happened to the partnership approach? Where in Bill C-7 is the preservation of collective identities of first nations communities? Bill C-7 is another expression of the racial and cultural superiority of the proponents of the bill.

At one point the bill states: “Whereas representative democracy, including regular elections by secret ballot, and transparency and accountability are broadly held Canadian values....” The bill then proceeds in great detail to impose such values on first nations peoples. What about first nations values of inclusiveness and consensus? Without question some of our traditional first nations governments practised superior standards of democracy, standards that ensured that the interests of the members of the community--men, women, children, and nature--were reflected in their structures of government and in their decision-making. Some of our nations choose leaders by community consensus, which goes beyond the secret ballot, one-person one-vote system. When the chiefs of Ontario have an election, the candidates stand around the drum and their supporters line up behind them. How much more open and transparent can you be?

Also, remember that Indians were not allowed to participate in Canada's representative democracy until 1961.

I would also like to share with you our view that the current parliamentary committee system leaves much to be desired. As you recall, Bill C-6 was studied by this committee for a mere three weeks in November and December 2002. Our presentation notes our concern, which has to do with the process, but I won't read that.

Despite this reality, the federal government has shown its willingness to use and bastardize the Canadian system to achieve its own objectives. Does imposing an unwanted legal regime on first nations peoples constitute democracy and good governance by the federal government? I say no. It merely confirms the power imbalance. The royal commission report has many recommendations about how to correct this imbalance. It is doubtful that first nations have any lessons to learn from the federal government about democracy and good governance.

With that, I'll turn over my presentation to Ghislain Picard.

À (1030)

[Translation]

Vice Chief Ghislain Picard (Assembly of First Nations): Honourable committee members, Mr. Chairman, now it is my turn to greet you.

So what is good governance?

Nations and governments are always striving for good governance. First Nations are no exception. As the world evolves and as peoples advance, so too will the measures required for good governance.

We cannot assume that the answer or solution lies in building on a faulty foundation of sand. According to the preamble of Bill C-7, the existing band council system of First Nations delegated administration was never designed to provide effective tools of government. Yet, in essence the proposed First Nations Governance Act merely continues and further entrenches the same ineffective self-administration regime.

Why does the federal government assume that the same old tired processes and ideas are going to produce different results? The “one-size-fits-all” approach does not work. The government has been trying that for more than one hundred years—why has it taken so long for the lesson to sink in?

In our view, a more logical approach to designing and implementing good governance is to abandon what does not work in favour of finding examples that work. Take those useful examples and adapt them to the realities of First Nations communities.

The traditional customs and practices of a good governance among First Nations societies themselves need to be a source of information.

A more useful mandate for this committee would be to investigate and consider the work that has been done globally on good governance and determine its appropriateness in the First Nations context. Indeed, we would encourage this committee to undertake such an examination in any event.

Having information about variations on good governance and strategies to achieve it would provide the committee with a standard to measure Bill C-7 as to whether or not it would do anything to advance good governance in First Nations communities.

So when it comes to indigenous nations, what is deemed “good governance” may bear little or no relationship to the world view of the people being governed. Instead, it may only reflect the needs of the State to address social, economic or political needs of its own.

Before one can fully appreciate the perspective of First Nations, it is necessary to have at least a rudimentary understanding of the historical relationship between Canada and First Nations.

The Royal Commission on Aboriginal Peoples (RCAP) describes four stages in the relationship between Aboriginal peoples and non-Aboriginal people in Canada. The first was preliminary contact.

Basically, the commission speaks to the early period following contact where our governments and the settlers dealt with each other as relative equals, as sovereign nations. This is when many of the treaties were signed.

Now, the relationship in the treaties never changed. What happened is referred to in RCAP as the Gradual Domination by Non-First Nations people.

First nations declined in population and power because of death from disease, warfare and genocidal practices. The colonizers increased and came to dominate, taking over First Nations lands and resources, pushing First Nations peoples to reserves and instituting policies and laws aimed at assimilation and termination. The treaty relationship was ignored, but the treaties were still in place.

I would like to note that the RCAP also recognized a fourth stage, one we had hoped to be into by now, called: Renewal and Renegotiations—a turning point when first nations peoples become revitalized, when we would all take a critical look at our relationship with an eye towards renegotiation and renewal based on recognition, respect, sharing and responsibility.

In any case, the best-documented stage in the relationship is settler domination. Indigenous nations were weakened in all aspects and the relationship of relative equality between sovereign entities became one of domination.

As a result, the debate and the implications of colonizing laws and policies took place without the participation of the vary nations whose partnership was originally sought and welcomed by both England and France.

À (1035)

The original constitutional arrangements practically ignored First Nations, except for giving Parliament legislative authority over “Indians and lands reserved for the Indians”.

Once we were important partners and allies, and suddenly we were seen as little more than administrative irritants, a barrier to the construction of a new colonial empire, built on the lands that our ancestors had shared.

In administering “Indians and lands reserved for the Indians”, the federal government controlled virtually every element of the life of First Nations peoples, including their methods of governance.

The Indian Act has been the primary legislative expression of governance of First Nations in Canada for over a century.

In keeping with the view that indigenous people were “uncivilized”, the objective of the Indian Act administrative system were to isolate indigenous people from civilization, and to gradually assimilate them into civilization through programs aimed at changing the culture, economy and lifestyle of First Nations people.

The Indian Act redefined in racist terms the many diverse nations of indigenous peoples in Canada, dividing settlements into bands of Indians, and using the percentage of Indian blood, marriage and paternity to determine Indian status and membership.

The governance systems established under the Indian Act were principally intended to enable the Canadian officials to delegate some of their administrative duties to the Aboriginal peoples.

The elected councils system was introduced in 1869, a provision that was replicated in the subsequent versions of the Indian Act. This imposed a system of external control onto our internal governments, in which the colonized applied the rules and structures of the colonizer.

The new system was not modeled on the governing practices of our nations; it mirrored the values and aspirations of the colonizing nation. And we have quotes in support of our interpretations.

But for any of our nations, the system was foreign, imposed, and did not reflect the diversity of our people and our traditions.

First Nations people have voiced concerns about the government policies relating to governance for many years. In fact, in 1895, the Department of Indian Affairs had to unilaterally draw up a list of bands to be governed by the act because First Nations, given the choice, refused to adopt the elected council system.

It became standard practice to pressure, cajole or entice indigenous people into adopting the legislative policy by the most efficient means possible.

At the other extreme, Indian agents could prevent bands from holding elections if they felt they were not sufficiently advanced. Studies show this practice was fairly routine, particularly in more remote communities.

In other cases, bands were surprised to learn that in accepting an elected system, they were considered to have abrogated their treaty.

Even with the institution of elected councils systems, life chiefs frequently retained influence. Traditional forms of government continue to retain a certain authority in a number of our communities.

The point is that Aboriginal culture has demonstrated its resilience in the face of repeated assaults perpetrated on it through laws and programs.

The Penner Special Committee on Indian Self-Government and the Royal Commission on Aboriginal Peoples both agreed on a key feature of successful self-government: any movement towards self-government must begin with the First Nations themselves.

As a starting point, the RCAP suggests that there are three potential models for Aboriginal self-government—the nation-based government, popular government and the community of interests government. The Penner Committee recommended that the band begin by defining its membership, which would then adopt a constitution that would be recognized under federal legislation.

The RCAP saw nation rebuilding as an essential first step for First Nations government. The RCAP and the Penner Report cite the need for First Nations to have flexibility in implementation and a solid economic and financial base, including access to lands and resources.

À (1040)

Bill C-7 flies in the face of history and all the current thinking on real self-government.

Contrary to the Royal Commission on Aboriginal Peoples, the Penner Report and other studies, Bill C-7 takes a prescriptive approach to first nations government. It leaves little discretion to the band and a great deal of discretion to the Minister.

The First Nations Governance Act doesn't even deal with membership and citizenship, a fundamental feature of governance. Instead, it focuses on enacting codes that address elections, band administration, financial management and accountability.

It doesn't deal with meaningful law-making. First Nations do not see self-government as the right to make laws on garbage pick-up or keeping dogs on a leash.

And there is no mechanism for enforcement. If there are no regional courts, then provincial courts become the only option. This is going to add to the burden on the provincial courts in terms of time and resources. Have the provinces been consulted about whether they're willing and able to assume this added burden? As far as we know they have not.

And of course, bands only have two years to enact all these codes. I already mentioned the Auditor General's study that said band governments are “over-burdened” and have to file on average 168 reports a year—or on average three reports a week.

These are the same people who are going to have to scramble to develop codes, get technicians and lawyers and policy people to make sure they are compliant, inform their community and get community approval. All this while the clock is ticking.

And for those bands—likely many—that can't get everything done in time, then they'll have the “default codes” imposed on them. Once again, it's a return to the “one-size-fits-all” approach that never works.

It is not clear to us how Bill C-7 is supposed to be good for our people and our governments.

A lot of our leaders hear echoes of the Bill C-31 debacle in this process. Bill C-31 was called an Act to amend the Indian Act. It was enacted in 1985 as an attempt to bring the Indian Act into conformity with the Canadian Charter of Rights and Freedoms.

Bill C-31 gave bands two years to enact membership codes. Failing that, they would fall under the Indian Act default membership provisions.

A lot of bands were already struggling financially, and were worried that Indian Affairs wouldn't provide adequate financial support for the influx of new members.

Still, many communities rushed to adopt codes that later proved to be cumbersome, costly or open to legal challenges. The department provided incentives to develop codes, but when legal challenges came up the department was nowhere to be found and very few bands received any assistance to deal with these challenges.

Another question before us is not just “what is good governance?”—it is “who defines good governance?”. The Penner Report and the report of the Royal Commission on Aboriginal Peoples recommended that the fundamentals of governance be left to the First Nations.

This is definitely a big issue and we should get rid of the expectation that there is a quick and easy fix. First Nations will need time and support to sort out issues that are going to arise.

According to the Royal Commission on Aboriginal Peoples, governance is dependent on power, legitimacy and resources in order to be sustainable.

It is these very communal values that make our nations unique. Social theorists can debate the meaning of community, but any self-defining community based on national identity provides a potential source of common values.

À (1045)

The interference practised under the law in the affairs of the governing members of the First Nations has influenced the point of view of some other members. But if governance is based on a process of self-regulation rather than on regulatory institutions, the governance of First Nations can only be re-established through an internal debate that will redefine the common sui generis values.

I will let our national chief conclude.

[English]

Chief Matthew Coon Come: Thank you very much.

The effective tools for governance can only be determined with a clear vision of governance. If governance is an expression of the values and choices of individuals and their society, first nations governance should be founded in the values, traditions, and practices of indigenous nations themselves. This perspective has been advanced by the Royal Commission on Aboriginal Peoples, by the Special Committee on Indian Self-Government, and by the pleas of our people over the past hundred years.

History shows that the federal government can impose policies against the will of first nations, but only at great human and financial cost. Simply because you believe that a particular course of action is in someone's best interests does not make it right. Our history is littered with people who knew what was in our best interests. We can see the legacy: the Indian Act, residential schools, forced relocations, social and economic breakdown—the problems we are trying to deal with here today.

Imposing Bill C-7 or any one-size-fits-all approach on all first nations is doomed to fail. First nations have no desire to implement the bill. Some are lacking the capacity and resources. Most of our first nations want a real progressive approach to self-determination. Why has the government spent more than $15 million on failed consultations and who knows how many millions more on lawyers and consultants, and wasted of a great deal of political goodwill with first nations on a process that no one wants?

Our people are committing suicide and are living in over-crowded, deteriorating shacks while the minister writes provisions for more reporting. They turn on the tap for a glass of water and risk poisoning themselves, and the minister comes to their community to hold consultations on election codes. Ten thousand of our young people are stuck on waiting lists because they want to go to university but they can't get funding. That's the workforce of the future. They want to improve their life chances and contribute to Canada's economy, but the minister says to wait a little longer while he finishes the section on legal standing and capacity.

Not only does the governance act not address any of these priorities, it's going to create more hardship. It's going to further taint federal-first nations relations by going against the thrust of virtually every previous study and report that involved first nations. I have to say, not just as a national chief of the Assembly of First Nations but as a human being, that I cannot understand why this minister is so dogged and determined to force on first nations something that absolutely no one wants. He says some people support it. He must be referring to the people who work for him.

I have no doubt that if the AFN supported Bill C-7, the minister would be waving that support like a banner across the country. Because we reject and oppose it, he now refers to the Assembly of First Nations as simply a lobby group. When the chiefs unanimously rejected Bill C-7, he cut our funding by half and 70 employees had to be let go. I suppose we now have to anticipate another budget cut this fiscal year, because our position hasn't changed. Our presentation gives you our opinion of the actions of the minister, so I'll skip that provision.

The past history, recent experiences like Bill C-31, and the Corbiere election amendment show it is extremely difficult and dangerous to try to implement large-scale changes en masse. Both of those examples show that two years is nowhere near enough time. First nations and the federal government need adequate time to plan and prepare for these kinds of fundamental changes.

I would encourage you to look at our alternative approach to governance, the first nations plan. It allows for long-term, fundamental change, but begins by rebuilding our communities and strengthening our citizens. In other words, we don't have to wait for full nation-building before addressing the urgent priorities related to health, housing, education, and training. In fact, we have to start there.

Ministers will come and go. National chiefs will come and go. The issue of real self-government for first nations will not go away. Our people will not go away, we will not disappear, and we will not assimilate. Our young people are learning their traditions. They're learning that they are first nations people. They're not turning their backs on their community or their culture. They're facing the future.

We want to work with Canada. The minister has tried to dismiss our opposition by saying of the AFN that it's our job to say no. Well, give us something to say yes to. Sit down with the Assembly of First Nations and first nations citizens from across the country. Let's have a constructive dialogue. Talk to us at the outset. Don't come to us after you've already made the decision and then act hurt or angry when we don't rubber-stamp your flawed idea.

À (1050)

The last time I appeared before this committee to explain why we opposed Bill C-6, the claims body bill, a member of the government told me that it's better to do something than nothing. But not if that “something” is going to create more turmoil, more court cases, more ill will, and, worst of all, more missed opportunities. I'm ready to endorse an approach that recognizes our true place in Canada and our place in the Constitution of this country. I'm ready to applaud an approach that is built on partnership and driven by respect. I'm ready to roll up my sleeves and dive into a process that builds healthy and viable first nations, and healthy and strong first nations citizens. I'm ready to join hands and start a new relationship that gives our children hope and our people opportunity. Is Canada ready? Are you ready?

The days of the federal government designing and imposing its ideas on our people should be gone. Let's banish the Indian agent and share the pipe that consecrated our treaties. This bill must die. We need to give life to section 35 and other historic treaties and rights. Let's walk down a new road to a new horizon.

With that, Mr. Chairman and members of the committee, I thank you very much for your patience. Meegwetch.

À (1055)

The Chair: Thank you very much.

Colleagues, we have 35 minutes left. The first round will be a three-minute round. The official opposition gets four minutes. I urge you to ask short questions, clear questions. Whenever you take too much time to ask your question, it's really unfair to our witnesses, our guests, and to our colleagues who will not benefit from their expertise.

Therefore, Mr. Pallister, four minutes.

Mr. Brian Pallister (Portage—Lisgar, Canadian Alliance): Thank you for that reprimand in advance, Mr. Chairman.

Some hon. members: Oh, oh!

Mr. Brian Pallister: National Grand Chief, it is good to see you again, sir.

Could you explain why the minister yesterday in his testimony made the statement that you were in support of this legislation.

Chief Matthew Coon Come: When this process began, we impressed upon the minister to meet with the executive committee so we could hear from the horse's mouth what this process would entail. We thought it would be an opportunity to go down a path where there's real partnership and real joint initiative. We found out the minister is only interested in four areas: elections, band administration, financial management, and accountability.

We wanted to deal with membership . We wanted to deal with the implementation of section 35. We wanted to maintain the spirit and intent of our treaties. I thought if we're going to talk about governance, let's begin with real nation-building. Let's begin with section 35, not section 91.24. So when we went down that path, we found out that this is not what he had in mind. There was no room for a change of heart, even though in the consultations he did a poll. The poll came back saying our people were interested in the issues of health, education, and implementation of our treaties. Governance was way down at the bottom of the scale. We thought he wanted to listen and learn from our people. People spoke. They didn't want to talk about amendments to the Indian Act; they wanted to talk about nation-building, trade implementation, to talk about bread-and-butter issues.

Mr. Brian Pallister: So that statement was incorrect?

Chief Matthew Coon Come: I'm surprised the minister would make such a statement given that for the issues we wanted to talk about there was no room, no flexibility. Of course, when we took it back to our chiefs and told them that we tried to include other ideas but the minister is inflexible, our people consequently rejected it. So isn't that democracy, that we have the right to reject?

Mr. Brian Pallister: Yes, it's clear that you're not supportive of the legislation. I wanted to address that because I share the concern, which I think you've expressed very well, that any legislation built on the foundation of a disrespectful relationship is very difficult legislation to see supported in the long term.

Do you plan on launching a challenge? One of your member organizations, I believe the Saskatchewan chiefs, have already indicated they will launch a challenge on the basis of the fact that the consultation process was flawed from the very beginning. Do you see this challenge as one that you're going to engage in as an organization nationally as well?

Chief Matthew Coon Come: We certainly support the Federation of Saskatchewan Indian Nations, who are taking the lead in filing a court case against the anticipatory breach of fiduciary responsibilities of the Crown. We support that, yes.

Mr. Brian Pallister: Okay.

Chief Matthew Coon Come: I have a point of clarification, Mr. Chairman, on the question that was asked by Mr. Pallister. I believe the ministers actually advised that the national chief support ratification of the Canadian Human Rights Act on the Indian Act.

The Chair: You have 45 seconds.

Mr. Brian Pallister: I have only a brief time, sir. I wanted to say that we share your concern when the minister wants to advance with legislation that will encourage bands to have powers that they don't appear to want, based on your testimony, and that will require resources. His estimate was over $100 million for enforcement officers and redress officers on each band level. Many of the people we speak to from first nations communities are much more concerned about the quality of water, housing, and very serious issues.

Do you share the concern that this is a misallocation of resources and the higher authorities of aboriginal people are not being addressed as a consequence of this legislation?

Á (1100)

The Chair: Thank you. We're over the 45 seconds.

[Translation]

Mr. Loubier.

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Thank you, Mr. Chairman. I will go on in the same vein as my colleague. When the minister appeared yesterday he quoted the Nisga'a chief, stating that the chief had told him that if a bill like C-7 had been tabled when the self-government negotiations for the Nisga'a had started, it would have opened things up and even improved the framework for discussions and the process. I would like to hear your comments on the minister's claim of what the Nisga'a chief said, because I was quite surprised by what I heard.

Vice Chief Ghislain Picard: In my opinion, that is what the minister said all through the process. We have been going from one meeting to another for two years now, with the same agenda, which is the legislative process of the federal government being led by the Minister of Indian and Northern Affairs. And then each time we come back with very clear positions from our assembly which is that the process is going down the wrong path because at the outset—and we have pointed this out in our presentation—it does not take into account the consideration of the present government, the consideration that, since 1987, the process must be undertaken on a joint basis with equal participation of the First Nations and the federal government. So, in our opinion, if the process, at the outset, is leading us down the wrong path, then that will also be how the result will turn out.

Mr. Yvan Loubier: I have another question, Mr. Chairman, if you do not mind. There is an agreement in principle between the First Nations of Mashteuiatsh, Essipit, Betsiamites and Nutashquan. Mr. Picard, you probably have better information on that agreement than I. In the essential principles of that agreement, there is the matter of the self-government of First Nations.

I would like to understand how Bill C-7, were it to pass, could restrict or even put an end to the efforts that were made to come to that agreement in principle to ensure self-government with all the conditions that could serve as a good starting point for the First Nations concerned. How could the bill slow down or even annihilate the self-government efforts in the context of that specific agreement?

The Chair: In 30 seconds.

Vice Chief Ghislain Picard: The reality is that the minister's argument is that finally, when we were at a bargaining table to negotiate that kind of agreement, we were circumventing the amendments on the Indian Act and that, finally, is another tactic to, once again, widen the gap between those who support and those who don't support his legislative process. I think that is all there is to be said about that; it is one of the minister's tactics.

The Chair: Thank you.

[English]

Mr. Martin.

Mr. Pat Martin (Winnipeg Centre, NDP): Thank you, Mr. Chair.

Thank you for an excellent brief. It will certainly form the foundation of many of our remarks from here on in.

I have three quick points. You can answer any of the following, I suppose, because we're so limited in time.

First of all, the Royal Commission on Aboriginal Peoples listed areas of core aboriginal jurisdiction, which include government institutions, elections, economic details, and taxation. Is it your position that Bill C-7 trespasses on areas of core aboriginal jurisdiction?

Secondly, the Senate is developing an omnibus bill to delete the non-derogation clause from all pieces of legislation dealing with aboriginal issues. Do you see this as part of a larger package to diminish it? As you say, all the issues systematically diminish a number of things that you've raised. Are you concerned with the Senate's new omnibus bill to delete non-derogation clauses?

You did mention that Bill C-7 does not have a non-derogation clause. We have certainly noticed that in recent bills the non-derogation clause language has been diminished.

Thirdly, it's your position that Bill C-7 should not be amended and should be withdrawn altogether. Would you be willing to come to the table if the minister showed the fortitude to actually admit that this thing is off the rails and should be withdrawn? Are you willing to sit with the minister and develop a new act perhaps based on the first nations plan that you made reference to?

Á (1105)

Chief Matthew Coon Come: On the first part, we always supported the Royal Commission on Aboriginal Peoples on the core functions. I think that should be implemented. It's an area where we could really start to deal with the first nation initiatives that start from the grassroots levels with respect to customs, values, and traditions. That was the intent of the core areas. Given the resources, I think we can go down that path.

We are very concerned about non-derogation. We have so many agreements, never mind the non-derogation clause we're asking for within Bill C-7. The James Bay and Northern Quebec Agreement has a non-derogation clause. Almost every agreement and contract that you signed with first nations people has a non-derogation clause that relates to a derogation or an abrogation of aboriginal rights and treaty rights. We're very concerned about this attempt to remove it from that area. I think in some cases you cannot remove it without the consent of the parties that are involved. Certainly, we'll deal with that when it comes.

We stand ready to sit down with the federal government, the government of the day, whoever it may be, and go down the path of doing something that we have never done before. Those recommendations come from previous studies, commissions, etc., that we referred to in our report. We stand ready to say that this is what we want to deal with, let's tackle this. Together we can do it.

The Indian Act itself is minor. The Indian Act will be there probably until we're all gone from the face of the earth. We should work towards dismantling it so we can be empowered and make those decisions for ourselves. We need to find a way to be able to coexist and have a real partnership relationship rather than an adversarial approach.

The Chair: Thank you very much.

Mr. Godfrey.

Mr. John Godfrey (Don Valley West, Lib.): I'm still a little confused, starting with what Mr. Pallister asked you. The minister yesterday described the relationship with first nations in this way:

We have sought to enter into real dialogue with first nations people.

Let me give you one example. As many of you know, after we began the initiative, the Assembly of First Nations asked to us stop so we could accommodate some of their concerns. We had already offered the AFN a major role in designing the initiative, as well as the consultation process. Our offer was declined.

Even so, I agreed to this second opportunity for dialogue and for improvement. By November 2001--after three months of special dialogue and negotiation--the entire National Executive of the AFN and I reached an historic agreement. We had no abstentions and no objections. Then, as you all know, the agreement collapsed a few weeks later. A minority of First Nations Chiefs voted against the National Executive's work plan.

Is that a fair characterization of what happened?

Chief Matthew Coon Come: When the minister announced the consultations, he talked about governance. In our minds, governance deals with many areas, but when we sat down with him—and it's normal that we should sit down with him to find out what his ideas are—it was not what we thought. It was elections, band administration, financial management, accountability. We want to deal membership, we want to deal with implementation of our treaties, we want to deal with lands, we want to deal with our territories, etc.

We realized that we could not convince the minister to make any amendments. He had a one-track mind: “This is what I'm going to do. If you don't agree with me, that's fine, but I'm still going to go ahead and do it.” Those aren't negotiations, not a give-and-take. If he had maybe said, “We'll deal with accountability somewhere else, as well as the elections, and you guys....” That's a real give-and-take. We could then come in and say we want to deal with membership and we want to deal with citizenship because they're important in terms of the services and programs we can provide to our people who live off reserve or are caught up in the middle of cracks and don't know which agency is going to provide services for them.

Having taken that initiative in trying to make changes, of course, we had nothing to give to our members, because it was the same thing with the minister. We couldn't change his mind. We went back to our people and told them we tried but the minister was not willing to move. Of course they rejected it. When the chiefs reject it, isn't that democracy?

Á (1110)

Mr. John Godfrey: Thank you.

The Chair: We'll begin a two-minute round, starting with Mr. Pallister.

Mr. Brian Pallister: When was the last time you met with the minister?

Chief Matthew Coon Come: I talked with the minister just before Christmas and probably in November.

Mr. Brian Pallister: How would you describe your relationship with the minister?

Chief Matthew Coon Come: I think our relationship is cordial, but I think he has a one-track mind and is not flexible. We try to seek solutions and partnerships. I don't know when the government gave him the authority not to follow “Gathering Strength”, working within partnerships. I think his actions speak loudly in terms of his attitude toward the first nations people of this country.

Mr. Brian Pallister: One of the concerns we have with the model the minister is advancing, sir, is that it essentially promotes the concept of 600-plus separate service delivery mechanisms. I know many of your bands have told me that they've engaged in cooperative development of institutional, professional services together with one another. Do you think that's a very real possibility if we proceed with this act?

Our concern, of course, is that because the act is predicated on the assumption that each band will have the power to have its own ombudsman—Mini-Me ombudsmen similar to the ethics counsellor the Prime Minister hired to give him advice—chiefs are put in an untenable position of having to appoint someone to be a redress officer and to then take their advice or not. Do you share the concern that we should be moving toward a more cooperative, more collegial approach to delivering services so that we can get away from the politics of service delivery in child care, health care, housing, and so on?

Chief Matthew Coon Come: Bill C-7 does not deal with real governance. It does not even deal with good governance, capacity-building, and providing resources in order to really create good governments and to be able to have economically self-sufficient communities.

We support addressing health issues, education, child welfare, and lands, of course. This legislation maintains the stranglehold that the minister has on our people and only gives us authority on reserves and does not recognize our jurisdiction over our territories that are larger than those reserves.

[Translation]

The Chair: Thank you.

Mr. Loubier.

Mr. Yvan Loubier: I would like some clarification on something you said to me earlier, Mr. Picard.

With respect to the agreement with the Innu, you said that since the beginning of the negotiation, the First Nations in question have been exempted from the potential effects of Bill C-7, because the agreement is about their self-government—namely, the establishment of their own institutions, with executive, legislative and judicial powers.

You say that because of these two provisions, the Innu involved in these negotiations would be exempted from Bill C-7, but that it could apply if, somewhere along the line, the agreement were not ratified.

Vice Chief Ghislain Picard: Yes, if there were not a conclusive agreement for the Innu, Bill C-7, which amends the Indian Act, would apply to them once it came into effect.

Mr. Yvan Loubier: In other words, in spite of the fact that the treaty states its intention to respect current institutions and rebuild the First Nations, as you mentioned in the case of C-7, if a treaty is not signed before Bill C-7 is passed, all the efforts made to reach an agreement in principle with the Innu will be completely wiped out once this bill becomes law.

Vice Chief Ghislain Picard: To our knowledge, according to the Department of Indian Affairs' own estimates, there are at least 100 negotiation tables throughout the country. Some agreements have been signed, others not, but this would mean that the legislation would not apply to certain communities or groups of communities.

I think there is an important point we should stress in the comments made a little earlier regarding the minister's attitude. At some points we spoke about the group of organizations. I think that has been our objective throughout the exercise. I am referring to our region in particular, where we are involved in a process designed specifically to give a little more strength and weight to regional aboriginal institutions. What we found out quite recently is that these processes no longer have much worth or meaning. I think this fies in the face of our understanding of governance or what governance should be.

The Chair: Thank you.

[English]

Mr. Martin.

Á (1115)

Mr. Pat Martin: Thank you, Mr. Chair.

Chief Coon Come, there have been serious allegations of retribution against those who would not cooperate with the implementation of Bill C-7. You mentioned that your own organization saw its budget cut 50% at the very time when you raised opposition to Bill C-7. The Native Women's Association of Canada wouldn't cooperate, so a new native women's association was formed and funded. And I have a list of others. Do you see a direct connection to a heavy-handed, vengeful minister who will reward those who will play ball with Bill C-7 and punish those who won't cooperate?

Chief Matthew Coon Come: I see the minister not respecting the elected leadership, creating new entities with people who agree with him, and punishing those who are opposed to him, rather than working toward building relationships and giving us the financial and human resources to be able to work together to resolve the real governance issues.

It's sad to say it, but he's behaving like the old Indian agents: “I know what's good for you. This is what I'm going to do. If you don't like it, tough. If you don't want to talk to me, I will create an entity”—which he did with the native women's association—“and I'll talk to them. I'll talk to people I want to talk to.”

I have no problem with you talking to whoever you want, but I think you have to respect the leadership that is there and you have to be able to try to work together.

Mr. Pat Martin: At the very time when the most complex amendments to the Indian Act in fifty years have come along, you have been forced to lay off seventy people, many of whom are experts and authorities on the subject. Would you agree it's tantamount to sending somebody into court and then denying them access to legal services needed for them to be able to defend themselves properly?

Chief Matthew Coon Come: Well, it certainly feels that way; we didn't have a right to vote, and now it's being reintroduced. The minister now will have a final say over who the elected officials will be. All the registers and the bylaws will be in the office of the minister. He's strengthening his stranglehold on our people, saying he knows what is best for us, rather than working with us, rather than working toward a real joint initiative and partnership.

The Chair: Thank you. You will have an opportunity for closing remarks.

Having allowed the last question and last response, I'm sure I will never be accused of censoring the members. That's one thing I will keep in my favour.

Ms. Karetak-Lindell, for two minutes.

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

One of the purposes of the act is stated as being “to provide bands with more effective tools of governance on an interim basis”. Do you not feel that the tools being introduced here could be a starting point for some of the bands in order to get the effective tools? I'm referring to the land management that we passed some time ago in Ontario.

I remember quite a few bands were quite skeptical about how much change that management would provide for them by way of becoming a little more financially independent. Now, a few years later, more bands are willing to try that option that was introduced.

Specifically, what particular tools do you feel are not effective that are being introduced in this legislation?

Chief Matthew Coon Come: I always thought the whole Indian Act was interim, until the time we implement our treaties. Build upon that relationship; implement the spirit and intent of our treaties; give us the tools.

The Royal Commission on Aboriginal Peoples recommended setting up a governance institute. That governance institute was supposed to look at models of governance, not at the issues of accountability, elections, and all that, but at the real governance of how we can build our institutions, our political institutions, and allow the first nations to decide what is best for them, because one-size-fits-all will not work. Therefore, we thought we had a governance institute, and then the minister cut the funding.

That was supposed to look at different models of governance, because there are 50 first nations in this country. The Crees are different from the Mohawks. The Mohawks are different from Haida and the hereditary system of chiefs in B.C. So we thought we had a system in place, some recommendations that we could build upon. But then the minister said no, he wanted to deal with purely administrative matters.

Even in this, he does not deal with real capacity-building, with real resources, with real training to be able to build upon that.

When we negotiated the replacement of the Indian Act, of the Cree-Naskapi Act, we made sure there were financial provisions. We would not accept the legislation without a financial authorization by Parliament to ensure that this was implemented. We made sure that there was certain development of manuals, of accounting principles, and so on, of how we're going to account for the money. We need to build the capacity to be able to train our people.

Right now, with this, you call it interim; I don't call it interim. This should deal with land. Land is not dealt with in the First Nations Governance Act.

Á (1120)

The Chair: Thank you.

Mr. Hubbard.

Mr. Charles Hubbard (Miramichi, Lib.): Thank you, Mr. Chair.

Very briefly, Grand Chief, we certainly find ourselves sometimes being directed by sources outside our own control. Sandra Lovelace was one in question. Again we have the decision of the court in terms of electors, who can vote, who the members are.

You referred to membership and your own position in terms of membership. I wonder if you might give this committee a brief description on membership, as seen by the AFN.

Chief Matthew Coon Come: Very simply, I think the basis of self-government, the principle of the right to self-determination, to establish your own political institutions, means to me that you have authority to determine what your membership is and to be able to develop those guidelines. I think it's the first nations government that should determine that, with their members, just like the Government of Canada determines who are Canadians and who should be allowed to be a Canadian, and so on, who should immigrate to Canada.

I think we as first nations could do that. We want to deal with that issue. The membership issue is one of the issues we highlighted when we talked to the minister about this governance act.

Mr. Charles Hubbard: Do all your members agree with the Lovelace decision, and why did that have to go outside Canada?

Chief Matthew Coon Come: I think there are times when, unfortunately, we have to go outside of Canada, go to the international forum and use the international instruments to put pressure on Canada so that it can be reminded that it is violating basic, fundamental human rights, and that those rights are universal. Consequently, we have to go outside.

Mr. Charles Hubbard: And all your members agree with the Lovelace decision?

Chief Matthew Coon Come: Of course. The Lovelace case, as you recall, had to do with the Indian Act, which discriminated against a woman who married a non-Indian man and lost her status.

I'm very familiar with the Cree-Naskapi Act itself, which replaced the Indian Act. I was one of the principal negotiators. We dealt with membership questions: Let the members decide who their members are. We created forms of how to do that and who the beneficiaries of those agreements will be.

The Innu will have to deal with that in regard to the agreement they signed. They have to deal with the beneficiaries.

The Chair: National Chief, thank you very much for your presentation. We will have five minutes for closing remarks from you.

Before we go to your closing remarks, I just want to say on behalf of the committee that this committee is very serious about the work that has been assigned to it by the Speaker of the House.

In your presentation you spoke of historical events that do affect the work that we have to do. I want to make it clear that this committee is not a committee of the government, or of the minister, or of the Prime Minister. This is a committee of the House of Commons. A bill has been assigned to us. We don't view this bill as a bill belonging to the government, the minister, or the Prime Minister. It's a bill that belongs to the House of Commons.

Some people will be telling us in the next nine weeks that we should scrap the bill. My colleagues are aware that the only way to scrap this bill is to vote against all of 59 clauses when we go to clause-by-clause. That's how you scrap a bill. We can't just say we're not dealing with it. We have been assigned a responsibility by the House of Commons. Therefore our job will be to look at every clause and try to find ways to make life better for the people who are affected by it. So we will focus on that responsibility, not to say that the other historical events and other effects are not important. They are. But we do have the job to do, and we will do it.

I should say this committee spent three months last spring, before the bill was written, to educate ourselves on the history and the bill. Now we will be spending the next nine weeks, almost full time.... For four of those weeks we will be travelling four and five days a week, and one of the weeks it leaves a Sunday, which is six days a week.

So we will give the respect and attention that this bill deserves, because we think it's very important. We want to commit to you that we will do that.

And I now invite you to present your closing remarks.

Á (1125)

Chief Matthew Coon Come: Thank you very much, Mr. Chairman and members of the committee.

I want to dispel this notion that first nations are against accountability or not accountable for the funds that are allocated to us. I want to show you an example of a contribution agreement. With all the funds that have been allocated to the first nations in any organization, we always have a contribution agreement. That contribution agreement outlines the areas that we're going to have to live up to.

It's actually called “Accountability Framework”. This is a legal contract. And it talks about transparency. It says, and I quote:

maintains financial records and prepares financial statements in a manner permitting the preparation of the Audit by the Council

It talks about financial statements, and I quote:

annual audited financial statements prepared in accordance with the Year-end Reporting Handbook as amended from time to time. Upon the written request of the Minister, a copy of the annual audited financial statements shall be made available to the Minister.

It talks about budgets. It says:

The Council shall have a budget in place for the term of this Agreement that includes the allocation by the Council of funds transferred under this Arrangement for the provision of programs and services to its [Band] Members.

It talks about conflict of interest. It says:

The Council shall develop, implement and maintain conflict of interest guidelines

And it outlines the minimum.

It talks about the council, and I quote:

The Council shall approve all sources of compensation for elected and staff officials from funds, including salary, honoraria, per diem and maximum levels of compensation which may be secured by an individual by virtue of holding office.

It talks about loans. It says:

its loan policy is in writing and available to its [Band] Members upon request;

It talks about disclosure. It says:

The Council shall make the following information available to its [Band] Members upon request, and at no charge beyond the reasonable cost of reproducing the document.

It talks about budgets, including the auditor's report. It talks about policies, guidelines, written services, standards, eligibility criteria, and any other documents provided for in this agreement.

It talks about redress, and I quote:

clearly defined and impartial dispute resolution mechanisms for initiating, presenting and resolving disputes including an opportunity for all parties to be heard

So this is a standard agreement. We are not against accountability. We already signed contracts with the federal government on any allocation of public funds, with outlines of what those will be.

So we're not against accountability. We are, I think, the most accountable. Did you know there is one band, former Chief Ron Ignace's community in Kamloops, that passed a bylaw that if the chief and council in their budget show a deficit, they all have to resign? Would you resign if your budget was in a deficit?

You can ask me that perhaps at the year end for the AFN budget, but that's another story.

I think our position is very clear. Treaties are good; First Nations Governance Act, bad.

Thank you very much.

The Chair: Thank you very much.

We will not suspend the proceedings. We will go directly into the next portion of our meeting, the public hearing. We invite our next witnesses to approach the table, please.

We welcome to this session of our meeting, from the Office of the Auditor General of Canada, the Auditor General, Ms. Sheila Fraser. Welcome.

Ms. Fraser is accompanied by the Assistant Auditor General, Ms. Maria Barrados, and Principal, Jerome Berthelette.

I welcome you, and I ask you to make your presentation. I think you saw the format. Before the last session, I should have mentioned that when we say that it's a three-minute round, it's three minutes for a question and an answer. If the questions are three minutes, you should bootleg it on the next answer, if it's important for you to respond. That's the trick.

Some hon. members: Oh, oh!

The Chair: So I welcome your presentation.

Á (1130)

Ms. Sheila Fraser (Auditor General of Canada, Office of the Auditor General ): Thank you, Mr. Chair. I will do my best to get the answers in.

We thank you for inviting us to appear today to discuss the work of our office that may be relevant to your review of Bill C-7.

With me today, as you mentioned, are Maria Barrados, Assistant Auditor General, and Jerome Berthelette, Principal, who are responsible for our work on aboriginal issues.

As you may know, aboriginal issues are one of five strategic priorities guiding the work of my office. They are amongst the most significant and complex challenges facing Canada today. While our work is concentrated on the government programs influencing the social, economic, and environmental challenges of aboriginal communities, our methodology does incorporate the perspectives of the first nations.

We value the opportunity to appear before this committee to share our perspective based on the audits and studies we have carried out in recent years. We have provided a handout summarizing that work. We understand that the committee is particularly interested in our views on financial management and accountability.

Mr. Chair, a long-standing concern of my office has been better financial management in government. We have developed an approach or model describing the key elements needed for effective financial management. Although our model was designed for federal departments and agencies, we believe its elements are relevant to your deliberations on the financial management provisions of Bill C-7. Financial management is an important part of delivering programs and services and exercising stewardship over the resources provided to fund them.

[Translation]

We recognize that not every organization has the same capabilities for financial management. However, some basic elements apply to a wide range of organizations, including First Nations. These include: establishing and communicating a clear vision of the organization's strategic direction; establishing a framework to manage and control any risks to the achievement of the organization's objectives; managing and protecting the integrity of financial information; presenting that information for accountability purposes; and managing and directing resources economically and efficiently to achieve objectives.

Ultimately, we believe, the key to effective financial management in an organization is a supportive climate or culture that is reinforced by appropriate rewards, recognition and sanctions. A supportive climate includes sustained leadership, shared values, and a shared commitment and purpose. Achieving the financial management objectives of the proposed legislation may take some time. Many First Nations may need to develop stronger financial management capabilities to respond fully to the intent of the legislation.

The majority of First Nations communities (61%) have fewer than 500 residents. Many communities (21%) are located in isolated and remote areas. In addition, each community has its own culture, traditions and level of economic development. The financial management capabilities they need vary. Any general framework for all would have to be flexible enough to accommodate these differences while maintaining the basic elements.

Á (1135)

[English]

In 1996 my office studied first nations' perspective on their accountability relationship with the federal government. A strong theme that emerged in that study was the need to align the administrative capacity of first nations with their responsibilities for program delivery so that band councils could be more accountable to their band members. The first nations also viewed their accountability to the federal government as a two-way relationship, with federal organizations also accountable to them.

First nations lack some of the capacities and powers of governance that are available to other governments in Canada, and they also lack the same requirements for transparency.

Our audit work in Indian and Northern Affairs Canada found a need to improve the mechanisms for complaint and redress as an element of accountability. At the same time the view of first nations that their accountability relationship with the federal government is a reciprocal relationship is an issue that the department needs to address.

A recent study by my office found that federal organizations have placed on first nations a heavy burden of reporting. In the large volume of reports that the federal government requires annually--in fact, it is at least 168 reports for each first nation--there is a good deal of overlap and duplication. Most of these reports are not used effectively by the federal organizations that require them. We have concluded that the resources consumed by the reporting system could be put to better use.

Bill C-7 increases the requirements for band councils to report to their members, but it does not change the reporting requirements that exist in funding agreements between first nations and federal organizations. Many of the provisions of funding agreements, including requirements for transparency and for audits of financial statements, have been incorporated in this bill and will have the force of law.

[Translation]

Mr. Chairman, the present reporting system is not sustainable. We recommended that the federal government review the reports it requires from First Nations and drop those that are unnecessary, streamline the body of programs that at present are narrowly defined, and allocate program responsibilities better among federal organizations. The government agreed that such a review is needed in conjunction with its current review of program authorities that is to be completed by 2005.

Several federal organizations provide support to Aboriginal peoples. Four of those organizations provided 95% of the federal funding to First Nations in 2001-02: Indian and Northern Affairs Canada, 67%; Health Canada, 19%; Human Resources Development Canada, 5%; and Canada Mortgage and Housing Corporation, 4%.

The roles and responsibilities of the ministers, their departments, Crown corporations and other federal entities in helping First Nations improve their financial management and accountability need to be clear.

[English]

Finally, the two-year timeframe that the bill provides for implementing financial management and accountability codes may be difficult to achieve for smaller first nations that lack administrative capacity.

In conclusion, Mr. Chair, while it is not our role to comment on the government's legislative proposals, in areas where our work has enabled us to develop expertise, we are pleased to share what we have learned.

We plan to carry out further audits and studies as part of the priority I have placed on aboriginal issues, and we would be happy to hear any suggestions your committee may have on future work we should consider.

I thank you, and we would be pleased to answer any questions the committee may have.

The Chair: Thank you very much.

The first round will be a five-minute round. Therefore, the official opposition will get seven minutes.

Mr. Pallister.

Mr. Brian Pallister: Merci.

Thank you very much, Ms. Fraser, for your report.

You have alluded to, in your previous report just released, the onerous administrative requirements placed on band administration, involving 168 reports per year, and in some cases even more than 200, I think you said. For any of us who have ever tried to do our own income tax return, we might consider the burden we're putting on local band administrators.

That said, the major observation in your report that struck me was the fact that most of this information really isn't used. It's ignored. If we can't get accountability out of 200 reports a year, why would 210, 220, or 250 actually get us accountability?

I want to focus less on Ottawa imposing accountability and more on how local people can make their governance models work more effectively for them. Our major concern is that the financial reports be understandable to local people, that they be comprehensive in nature, and that they be accessible without necessarily having to go through the chief's office to get them. Could you comment on those three expectations? We will be addressing these, of course, through amendment and various mechanisms. But I'd like to hear your comments on these three concerns.

Á (1140)

Ms. Sheila Fraser: As Auditor General I am obviously very concerned about accountability and transparency. Those are two fundamental values we hold very dear.

In the study we did, we concluded that when you took the program in and of itself, the accountability provisions would appear to be appropriate and the information being asked for was not necessarily excessive. It was when you put the whole package together that it became a burden.

One of the main conclusions as well is that the federal government should be using the same kind of information the first nation would be providing to its own members and that there should be better consultation between the government and first nations to see what kind of information the first nation itself uses to manage, what would be appropriate for its band members to have, and that should form a basis of the accountability back to the federal government. One good example was requirements for financial statements. The federal government requires from a first nation five different kinds of audited financial statements. I think we could all agree that one should be able to cover the needs of the various people.

So I think it's more a matter of integrating, of dealing with this issue horizontally, rather than on a very specific and more narrow program focus.

Mr. Brian Pallister: Thank you for that observation. When we have 13 different government departments and in many cases each band has to comply with all those various requirements, it seems to impose an onerous burden.

I'd like to touch on the issue of redress. You've emphasized in your comments today, and in previous remarks you've made, the importance of redress and appeal mechanisms. We're very concerned that under this proposal redress mechanisms that might well work for the majority of bands will work very badly for others because the redress officers, as they are called in this bill, would be appointed by the chief and council themselves.

Do you have any suggestions on another model that could be pursued that might create a greater likelihood of something of a barrier or, I should say, an arm's-length situation opposed to a chief appointing a redress officer? Many of the chiefs I've spoken with laugh at that proposal. Could you propose any other alternative?

Ms. Sheila Fraser: I don't know, Mr. Chair, that it would be appropriate for us to be proposing models. We can indicate to you some of the concerns we have noted in our previous work and some of the concerns we've heard as well from first nations. I would ask Mr. Berthelette to elaborate a little bit on that.

Mr. Brian Pallister: If you could, yes, because clearly we're all concerned about making sure we propose models that have the potential to work not just in ideal theoretical situations, but on first nations themselves.

Mr. Jerome Berthelette (Principal, Office of the Auditor General ): Redress mechanisms and dispute resolution processes are important for communities. They help to maintain peace and peaceful relations, help to resolve disputes, and help the community to move on when they have problems.

The mechanism proposed in the act suggests that chief and council should be able to appoint somebody or a board. It also suggests that communities can get together and develop redress mechanisms at a higher level. The act seems to be trying to be flexible in terms of providing to their communities some opportunities to develop dispute resolution mechanisms that go beyond simply a chief and council appointing somebody.

Á (1145)

Mr. Brian Pallister: That's very fair, but theoretical proposals about cooperation that involve giving away powers tend not to work very well. This is why I'm asking you if you think another model—for example, a regional model wherein various bands would come together to appoint a redress officer, thus creating something of a separation between the administration and its own redress officer—might work better. Don't you think it's just common sense that such a model would work far better? I understand the act suggests cooperation, but, come on. In reality, I don't see that likely happening.

Mr. Jerome Berthelette: I'm not sure such a model can't work for the communities. They do come together on a number of different issues at tribal council level, at the regional level, and at the national level, to address different issues. I think the communities should be given the opportunity to do this--

Mr. Brian Pallister: Isn't there a fundamental difference, sir, between appointing an officer who will criticize your own actions and coming together for shared lobbying activities? These are two very different categories of activity.

Mr. Jerome Berthelette: Most governments end up appointing individuals to resolve disputes for them, whether they're judges appointed by government or ombudsmen appointed by government. All governments do that. We might want to give the first nations the opportunity to make those decisions themselves.

Mr. Brian Pallister: With 600-plus different redress officers, do you consider that there's a cost-benefit issue here?

Mr. Jerome Berthelette: Clearly there are going to be cost issues and cost-benefit issues, but you also have to take a look at the types of disputes that communities are going to have to deal with. Not all of them are going to be costly disputes or require costly mechanisms to be resolved.

Mr. Brian Pallister: The appointment of an officer, getting the office space, and so on, are very expensive.

The Chair: Thank you. That completes your time.

[Translation]

Mr. Loubier, five minutes.

Mr. Yvan Loubier: Good morning, Ms. Fraser.

I would like to ask you a question about the 168 reports you mentioned that the Department of Indian Affairs requires First Nations to submit. Have you assessed the cost of administering and managing these forms? You seem to be saying that it would be preferable to use the resources to provide direct services for the people in question, but do you have any idea how much it costs to administer all these reports?

Ms. Sheila Fraser: No, Mr. Chairman. We consulted a number of First Nations communities when we did our study. We know that they have staff working full-time to prepare these reports, but we did not calculate what would be the optimum situation or how much they are spending at the moment to do these reports. I think that in light of the number of reports and the fact that there are many overlaps in various reports, it is clear that the system could be simplified and the reports rationalized.

I must also emphasize that we dealt with only four departments—the four main departments. We did not deal with all the reports that the First Nations have to submit.

Mr. Yvan Loubier: So tremendous resources are used in managing these 168 reports. In Bill C-7, we are asking the First Nations to devote considerable resources to building an acceptable democratic system—under unacceptable conditions, in our view, but as imposed by Bill C-7. That would mean that as things stand at the moment, such a requirement would overwhelm the First Nations, because they do not have enough resources to deal with the already heavy administrative burden.

Ms. Sheila Fraser: It should be mentioned as well that the First Nations get financial support to prepare these reports.

Mr. Yvan Loubier: Yes, but if they do not get any additional financial support...

Ms. Sheila Fraser: There is a cost to the government to support all the administrative work that will be required. One of our concerns is whether all the costs have been determined properly, and whether all the implications for the First Nations of complying with all these requirements have been taken into account. Before going forward with a reporting system which essentially re-establishes what is done at the moment, it would be advisable to simplify and rationalize...

Mr. Yvan Loubier: At the moment, there is no extra funding available to help the First Nations meet objectives such as those set out in Bill C-7. We can expect that they will not be able to afford to do anything at all.

Ms. Sheila Fraser: I think that it will be very difficult and, as was already mentioned, a number of First Nations are not able to do that right now; they need help to be able to meet their obligations under the act.

Moreover, there is some question about the two-year period. It is not clear that two years will be long enough. The committee might want to check with the department about the action plan and see whether they have done a good assessment of what will have to be done to provide help to the First Nations that need it.

Á (1150)

Mr. Yvan Loubier: Since we are talking about accountability, Auditor General, I would like to thank you for your report on the Davis Inlet community. I would like to know, given that this community has moved and we have been told that measures will be implemented in the form of programs to reduce social inequalities, multiple addictions and so on, whether you intend to present another report on the new situation regarding Davis Inlet and its residents.

Ms. Sheila Fraser: We generally do follow-ups to the audits that we carry out. To my knowledge no follow-up has been planned for the coming year in the case of the Davis Inlet audit, but we might include it in our work plan for upcoming years.

Mr. Yvan Loubier: As things stand and in view of what you have said about that community, do you believe that the measures taken up to this point to move the residents and integrate them into their new environment are enough to at least get the process of rehabilitation started?

Ms. Sheila Fraser: Mr. Chairman, I cannot really answer that question; I would prefer to give my opinion when we do an audit and I have data in hand. Unfortunately, we will not be examining all those aspects.

Mr. Yvan Loubier: Thank you, Madam.

The Chair: Thank you, Mr. Loubier.

Ms. Desjarlais.

[English]

Mrs. Bev Desjarlais (Churchill, NDP): Thank you very much for being here today.

I'm going to start off by asking this question, and hopefully you can give me some kind of an answer. Regarding the 61% of first nations that have fewer than 500 residents, roughly what is the budget they work under that you would have had to do an overview of, or have you done that?

Ms. Sheila Fraser: I'm afraid we don't have that kind of information.

Mrs. Bev Desjarlais: Okay. The reason I'm asking is that I believe it does tie into some of the discussions we're having.

Once the First Nations Governance Act was introduced and there was objection from a number of first nations over it, I found that numerous first nations in my riding became under third-party management. As a result, I did some investigating and found that the Government of Canada has no tendering process for the third-party management of first nations budgets. It's just sort of handed out here and there. Contracts are signed, and in some cases, in first nations with very limited funds, and I mean very limited funds, up to $30,000 a month was being paid to accounting firms to do the third-party management--up to $30,000 a month.

In those cases, most band employees had been fired or let go because the third-party manager was taking over, so dollars that were going into local economies were no longer going there.

Have you done any investigation into the third-party management process and costing?

Ms. Sheila Fraser: Mr. Chair, the question is pertinent. We are actually going to be reporting something on third-party management this year, in December. So at that time, if the committee finds our work of relevance, we would be pleased to come back to discuss it.

Mrs. Bev Desjarlais: Just to follow on that, it was also indicated from accountants I then spoke to around different communities that it's an absolute windfall for an accounting firm to take on third-party management, because it's pretty much free and easy money. They don't operate under the same guidelines for providing the service as they would if they had another client, like a business client, where you'd only charge so much, where you'd give them a package deal. In the areas of first nations third-party management, it's top dollar for everything that's coming out of the first nations' budgets.

So I certainly look forward to your comments in December. I think it will be a real eye-opener for Canadians to see exactly what has been taking place.

One of the other comments that has been indicated in regard to the First Nations Governance Act is that the government has indicated a costing of about $110 million. But there's concern, through the AFN and first nations in general, that the cost is going to be that much greater and they don't have the funds, to the point that they're actually foreseeing another gun registry type of cost incurred.

I'm curious; from your knowledge and background, does $110 million seem like a reasonable costing for what's being proposed here?

Ms. Sheila Fraser: Thank you, Mr. Chair.

First of all, I'd like to thank Ms. Desjarlais for her concerns. We will take note of her concerns in our work on third-party management.

As to the cost estimate, I have no basis on which to.... We haven't seen a plan. We haven't seen how that would have been developed. That might be something the committee would wish to discuss with the department, how it has gone through that estimate and what actions it believes are necessary in order to support first nations.

Á (1155)

Mrs. Bev Desjarlais: Actually, it was good to hear you emphasize as well that the smaller first nations would have a hard time, because Grand Chief Coon Come certainly indicated that was going to be a problem as well with the two-year, because then the automatic default codes come into place. With your supporting the position the Grand Chief mentioned, one would wonder why the government would do that if it really is working in a cooperative process with the first nations.

Ms. Sheila Fraser: You would have to ask the department.

Mrs. Bev Desjarlais: Thank you.

The Chair: Mr. Godfrey.

Mr. John Godfrey: Welcome.

First, do you yourself view accountability between the department and first nations as a two-way street, as reciprocal?

Second, do you think that the very complexity of the reporting regime you've described--168 reports per first nation--gets in the way of reporting to the populations of the first nations, that it, in itself, is an obstacle, never mind the governance part?

The third question is, which comes first? Is it getting the governance right, simplifying the reporting regimes--are they sequential, are they parallel--and can you have a good, effective governance structure if one party is obliged to do that and still maintain all of this other stuff, the other reporting regime? Will, in fact, the reporting regime, if not attended to at the same time or before, continue to get in the way of transparency, accountability, and good governance?

Ms. Sheila Fraser: Those are very interesting questions, Mr. Chair, and I may ask my colleague, Dr. Barrados, to help me on some of them.

I think, yes, the accountability is reciprocal. I think there are responsibilities on both parties, and there should be some form of accountability back and forth. How that takes place obviously is where the difficulties and the complexities come in, but in many of the audits we've done, when we look at some of the responsibilities of the federal government, be it in education or in other areas, there is a lack of performance measures, a lack of real evaluation of results. And I think that kind of accountability is required when we're spending the sums of money we do, when we're dealing with people's lives. So, yes, I would say there should be reciprocity.

In terms of the complexity of the regime, as I mentioned earlier, when you look at it in isolation, program by program, it makes sense. What is being asked for does not appear to be excessive. If we had looked in isolation at a program, we probably would have asked for that kind of accountability. But it's when you put it all together.... And I think that's one of the challenges in government, how to deal well with horizontal issues, not just by slices, and how to build a mechanism.

As I mentioned earlier, I think it's important that you involve the communities and the first nations themselves in defining how they manage their programs, what information they give to their people, and then, using that, supplement the accountability back to the funder, if you will.

On your last question, I would hope that it would be in parallel, but I think in many of these processes it takes time to do it well.

Perhaps Dr. Barrados might like to add a couple of comments.

Ms. Maria Barrados (Assistant Auditor General, Office of the Auditor General ): I would like to add, on the accountability, that we've spent a fair bit of time in the office thinking about getting a more modern, contemporary definition of accountability, because it's generally thought of as a very hierarchical relationship. Somebody tells you what to do and you have to report back. We published that in our last report in December. We worked up a definition that essentially says what accountability is about, that it is based on an agreement that defines the expectations, defines what is to be achieved and how it is to be reported. Fundamental to its working is that you have to have an agreement on those accomplishments and expectations. Otherwise, you'll continue to have difficulty getting an accountability relationship to work.

Â (1200)

Mr. John Godfrey: In other words, reciprocity.

Ms. Maria Barrados: Yes.

Mr. John Godfrey: So the very way in which you negotiate accountability can affect the outcome of it. It cannot be imposed.

Ms. Maria Barrados: That's correct, and our thinking on this actually shifted a lot as a result of the work on accountability that the Auditor General described. We spent a lot of time with first nations communities, asking them how they felt about accountability. They were all for it. It's just that when you start putting it into a hierarchical structure, it becomes a problem.

The Chair: Thank you.

Mr. Pallister, for five minutes.

Mr. Brian Pallister: Your predecessors, of course, have made similar comments about the difficulty of knocking down stovepipes in government and trying to coordinate the missions of various departments effectively. I think this is particularly relevant here, because this legislation proposes to limit the degree to which a minister can intervene. However, it essentially limits that intervention to financial issues. My concern is that this may lead to an exacerbation of many of the problems that have led to third-party management being invoked in the past.

I'm glad Bev raised the issue of third-party management. It's relevant to Manitoba, of course, where half our bands are in co- or third-party management. Saskatchewan as well is especially affected.

The present approach on third-party is that the third-party managers appointed by INAC don't third-party-manage health money, they don't third-party-manage Canada Mortgage and Housing Corporation issues. So you have stovepipes on third-party management, too. You can have a band with three different third-party managers, right?

Wouldn't it be better if we got our act together on this third-party management thing now and just said there should be one third-party manager appointed, and that this third-party manager has to work together...? I know I'm going to be accused of gross oversimplification on this proposal, but wouldn't it make more sense for a band to have one third-party manager they could deal with and for government to have one third-party manager in place, rather than this little entourage situation?

Ms. Sheila Fraser: As I mentioned, Mr. Chair, we are doing some work on this and will be reporting later in the year. I can't give much of an opinion based on any facts right now, but it would seem logical on the face of it. I do understand that. You're right. Each department names its own third-party manager as needed, but we will obviously look at that question when we deal with this issue.

Mr. Brian Pallister: That's fair enough, because we're talking about governance here. We're talking about transparency, accountability, and all these things. Surely it's going to be very difficult to achieve, for example, relatively uniform standards in terms of the production of audited financial statements across the country, when we can't even get our act together in terms of our departments here.

Ms. Sheila Fraser: As I said, the issue again is that if you take each program individually, it all makes sense. It's how the programs are structured. Are they so narrow that they become a whole lot of programs that are all managed individually? How do you manage that horizontal issue? I would hope the government has indicated that there is an issue that they want to address, and I would hope they will move forward in trying to simplify and rationalize some of this.

Mr. Brian Pallister: The trouble with this one is the simplified argument that the government has been making so far: that they're going to be tough on bands, in that there are going to be audited financial requirements that are darn well going to be coming in, and that the money is going to be cut off if the audits are not coming in. This kind of argument doesn't hold any water. Enron would have never happened if all it took was an audited financial statement, right?

I'm more concerned that local people have easy access to understandable financial statements. Again, I want to ask you for suggestions on how we might empower local people better through this legislation.

Ms. Sheila Fraser: Mr. Chair, I think the underlying issue of all that is capacity. Do the first nations have the capacity to do it? When we talk about very small communities and the many communities that are in remote and isolated regions, there is a real challenge to have the capacity there to do all this work. I think that's an issue the department should consider.

Mr. Brian Pallister: There's a big issue, too—and the chairman tells me I have one minute, so I'll try to make it really quick and give you a chance to respond—

The Chair: That's a minute for the both of you.

Mr. Brian Pallister: A lot of the band leaders are telling me they're really concerned about their own-source revenue. They're very reluctant—Denis Desautels made reference to this in the past—so own-source revenue is not included in a lot of the financial records. Transparency therefore is inhibited and there's no understanding of what the federal government's going to do with all that information. There is a lot of misunderstanding, depending on whose perspective we listen to. How are we going to get comprehensive, audited financial statements that are worth anything for band members to look at if they don't include all sources of revenue?

Â (1205)

Ms. Sheila Fraser: I think the point you've made is that the council should be accountable to its members above all. In order to do that, there should be complete—

Mr. Brian Pallister: Of course, they're afraid their other revenues from government will be reduced if they include the information, so whose best interests are they serving by including the information? Do you follow the line?

Ms. Sheila Fraser: Well, I'm a great believer in transparency, so—

Mr. Brian Pallister: I'm a great believer in understanding the consequences of transparency. I think the chiefs would like to know what those consequences are.

The Chair: Thank you very much.

Ms. Karetak-Lindell.

Ms. Nancy Karetak-Lindell: I want to take my question a little further back than where Mr. Pallister went.

We all talk about financial statements being the end-all in terms of how they relate to accountability, but I come from communities that really have no idea how to interpret financial statements. Until you get to a point where people can ask the right questions—I've worked in the accounting field, and I'm sure you understand where I'm coming from—everything can look very good unless you can determine that the expenses for something are very high when compared to what the projected ones were for the year.

It's good for us to talk about all this, but unless there are people who are able to ask the right questions and get easy information, how do we deal with the other part? Matthew Coon Come talked about capacity-building. How do we get people engaged in that public accountability part?

I see it in my communities all the time. Every hamlet council has to produce financial statements every year. But when you have a council of nine people and only one person might understand a bit about financial reporting, the chief executive officer can sit there and make everything look very good if people don't ask the right questions. So I want to get to how you work on that part of public engagement.

We can report all we want, but unless we have people who are able to ask the right questions that translate into day-to-day realities for the people, I don't think this will be any more of an improvement.

Ms. Sheila Fraser: Mr. Chair, I think Ms. Karetak-Lindell has made an excellent point. If I was a little cynical, I would say it's not just in certain small, remote communities that people don't ask questions. When we look at some of the scandals that have gone on in the private sector, a lot of people weren't asking the right questions there either.

I think it really is a question of building a capacity of knowledge and an understanding of that knowledge. I don't think it's realistic to expect communities to do it themselves. They need to have help to do it. How that comes about probably has to be developed in collaboration with the communities, because they are at very different states of development. Some communities are very advanced in this and would be models for any community, whereas in others it is more recent. The communities themselves have to get involved and perhaps learn from each other, too, in terms of how they progress in this.

But I think it's an excellent point. It's not a set of financial statements that's going to solve this.

Ms. Nancy Karetak-Lindell: Thank you.

[Translation]

The Chair: Mr. Loubier.

Mr. Yvan Loubier: Mr. Chairman, as you know, I am new to this committee; that said, I am becoming less new and I am learning every day both through my own efforts and through what goes on in the committee. But there is something that I have noticed since the beginning, which is that there is a tendency to make it seem that First Nations are the only ones guilty of poor management, lack of transparency and accountability and fancy accounting. People on both sides of the table seem to forget that every year Ms. Fraser and the other auditors general that have preceded her, including Mr. Desautels, have given flagrant and conspicuous examples of government practices involving bad management.

For lack of transparency, one has only to think about how employment insurance has been managed over the years. Your predecessor was highly critical of the government on that issue. We saw how important accountability to the government was in the sponsorship file. A good example of careful management of public monies is gun control. As for fancy accounting, we are told all sorts of stories every year about the surpluses expected for the current year. As a result, we have no idea what the government could do if it used the real numbers.

It gets a bit tiresome to see some people—especially Alliance members but also certain Liberal MPs—give the impression that the First Nations are the only ones guilty of poor management and lack of transparency. Maybe we need to look in the mirror and realize that our own practices, which some of our members consider exemplary, are not quite so perfect. There is a need for change in some areas.

In your latest report, I admired the fact that you raised the issue of the 168 forms that need to be filled out in order to get funding. Those are examples that people understand. Those 168 requirements come not from the First Nations but from the federal government. So the government should stop holding itself up as an example. We cannot serve as a model and simply reproduce the things that we do not do well.

I would like to know whether, in the period since publication of your report, which contains recommendations on simplifying those forms—sending answers quickly by e-mail, for example—you have felt that the four departments in your sample were reacting positively to these changes or whether they were refusing to take this matter seriously and were trying to maintain a system that is suited to the needs of the bureaucrats.

Â (1210)

Ms. Sheila Fraser: Thank you, Mr. Chairman.

To begin with, I agree that we cannot assume that all First Nations are alike and that they do not know how to manage their money. I have visited communities that could serve as good examples to non-native communities, where accountability is concerned. It was wonderful to see.

In my opinion, we need to recognize that these communities are all quite different from one another, which is the case of all communities in Canada.

Regarding the latest report, published in December, the departments have told us that they acknowledge the problem. I feel that there is a willingness to take action and that they will begin looking at the situation as part of the program review that I spoke about in my opening remarks.

Of course, as I already mentioned, we follow up on our recommendations. So we will working with them to set an appropriate deadline and then we will go back to see if anything has really been done.

Mr. Yvan Loubier: To come back to my question about Davis Inlet, when do you think you will present another report? I have the impression that one year should be enough to be able to see whether integration has been successful and to see what resources are still needed to address the many problems involving addiction and general social issues.

Ms. Sheila Fraser: I cannot promise you that we will be looking into this issue. I know that my staff would certainly not like me to make such a commitment. But I can tell you that the issue will be examined seriously when we plan for next year.

The Chair: Mr. Godfrey.

[English]

Mr. John Godfrey: I've been reflecting on what you said, and I find it very helpful, the whole question of reciprocity, respect, and so on. I guess this is a question that may or may not give you some bragging rights, but I'd like to know if the committee can learn from you, or maybe even the minister can learn from you, in terms of how your office actually undertook its own recent first nations study. Before you did it, with whom and how did you negotiate it?

Ms. Sheila Fraser: Thank you Mr. Chair.

As the committee is probably aware, I have absolutely no mandate vis-à-vis first nations. My department can only audit the Department of Indian and Northern Affairs and the other departments concerned. We basically can audit the cheque going out the door and the information coming back in.

But over several years, particularly after the accountability study, we began to develop a very good relationship with first nations. It was a cooperative effort. We asked them if they would cooperate with us in doing the study. So it was strictly voluntary on their part.

I believe we have always had a very good reception from first nations whenever we have asked them to participate with us in any kind of work. In this particular study, we wanted to do it from a different viewpoint, to take the community viewpoint and ask how the federal government and the requirements are viewed from their point, rather than taking the federal government's position. In fact, I have a couple of panels of senior advisers to help in determining issues that we should look at going forward, and we have now established a panel on aboriginal issues, comprised of leaders across the country who will give us advice on areas that particularly concern them, where they think we can have a role to play, obviously respecting the mandate that we have.

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Mr. John Godfrey: I draw from this that it is possible to have a constructive, working, respectful relationship on difficult and contentious issues if you go at it the right way.

Thank you.

The Chair: Mrs. Desjarlais.

Mrs. Bev Desjarlais: Following along that line, I'm glad to hear that's the way you proceeded, because it emphasizes again Chief Coon Come's position that first nations want accountability and aren't afraid to have the Auditor General of Canada's office go in there and prove that this is how things are going. Certainly, in my view, that has worked to their advantage, so it's great to see that emphasized again.

When you were doing that audit--and you've mentioned that each of their financial statements is different for different programs--specifically through, say, the health side of it, where the funding was coming from health, was it found that there were problems from the first nations side, or was it from the way the money came down from the federal government?

The reason I'm asking is in regard to a situation we had in Manitoba, where it appeared that money had been misdirected from, say, the deputy minister or somebody, or a regional director's office. Was there any kind of investigation that way?

Ms. Maria Barrados: Thank you, Mr. Chairman.

We didn't look specifically at the issue in Manitoba, but prior to that, we had done work in the department on their management of grants and contributions, and we had raised concerns about the department not being sufficiently vigilant in its management.

In the reporting study we did, we again looked at all the programs, those big four programs. Health was included. We asked the communities what kind of reports they had to fill in, how they coped with filling in that report, and we actually sat down with them and had them show us these reports.

On the health side, there was a lot of difficulty because they were just in the process of changing the terms and conditions of the contribution agreements. People didn't really understand what they were supposed to be doing. Because of the situation in Manitoba, the controls had become a lot tighter. People weren't sure what this was about. Even the regional people didn't realize what was really expected. So there were a fair number of difficulties just because of all these changes that were going on.

Mrs. Bev Desjarlais: Again, I think it emphasizes your point that there should be a process that's pretty much the same for all departments--

Ms. Maria Barrados: And that people understand. There has to be that discussion and you have to take the time, because people in the community are not on the level of people in the bureaucracy. They don't understand the terminology, they don't understand the code, nor should we expect them to. They're quite receptive if you're willing to take the time.

Mrs. Bev Desjarlais: Thanks very much.

The Chair: Mr. Hubbard.

Mr. Charles Hubbard: Thank you, Mr. Chair.

I have just a very brief comment. I know both Bev and John have brought forward some concerns here--and certainly, Bev, we're aware of those concerns.

But one of the problems that many bands face, many reserves, is that the system they work under is a single year of business, and with that, they have no long-term planning. They have little opportunity to divert money unless they get another sector of their budget into great difficulty. I would just ask, in terms of the idea of a code and being able to look at this bill in terms of enabling our people to have long-term planning, would it not be to their benefit and a benefit to their relationships with various levels of government?

Ms. Sheila Fraser: Thank you, Mr. Chair.

I think it's an excellent point that has been raised. I would, if I might, extend it even further and say that even government departments would probably benefit from having longer-term funding and longer-term certainty about what they were able to do and not do.

One audit that the committee might be interested in, which we will be coming out with this spring, is on housing. Without giving away what was in that, I think the funding issue was of course a big concern. It's hard to do long-term plans, be it housing or anything, if you don't know year to year what funds you're going to be allocated.

Â (1220)

Mr. Charles Hubbard: Thank you, Mr. Chairman.

The Chair: There's interest in two more questions. Are there more than two members who wish to put a question? No.

Then we will have a three-minute round for Mr. Pallister and Monsieur Binet.

Mr. Brian Pallister: There's a double-edged sword in what Mr. Hubbard has just talked about. Of course the benefits are to long-term planning, but in Manitoba we've found that, with the push that the government has advanced to push powers down to the bands and with the latitude it has given them without perhaps the preparatory skills and experience, half our bands are now in co-management and third-party. Would you like to comment on that situation? That's the reality of advancing a block envelope of funds to a band that hasn't had the opportunity to have that experience of management before.

Ms. Sheila Fraser: I would just repeat that I think the real issue is capacity. Government has to help the first nations develop the capacity to manage well. We should strive to have no bands under third-party management.

Mr. Brian Pallister: Exactly.

The capacity issue is relevant here because, apart from any sort of repeat of previous policy—which this act does a lot—the major changes it makes are the imposition of law-making powers, enforcement powers, and redress powers—those three categories—yet each of those things certainly would require some capacity to manage and to implement.

The minister yesterday referred to $110 million. I've read different accounts in which he has referred to that as the transitional funding support for bands to implement new codes, but yesterday he referred to it as an annual thing.

Earlier, you addressed the need for cost-benefit analysis. You do repeatedly, of course, and you mentioned that other departments could answer this question better, but surely you must be concerned that there has been.... We have no indication of any kind of pricing that has happened here, or of any kind of commitment that the government has made in reference to long-term support for these new positions and responsibilities it is now downloading onto bands. Surely you must be concerned about that.

Ms. Sheila Fraser: Given the stage at which this legislation is at, it isn't a concern to me yet. It will be when government or parliamentarians have decided what the policy decision is on all of this. I would think the committee might want to ask what plan has gone in, especially given the two-year timeframe. What plan is there? Have they analyzed how many communities could actually meet these requirements and what is taken to get it there? That would be one of the decisions the committee and parliamentarians would have to make.

Mr. Brian Pallister: You would think that would be part of being transparent and accountable in your own management, wouldn't it?

Ms. Sheila Fraser: Sure, and it's part of the analysis of putting legislation forward.

Mr. Brian Pallister: Yes, exactly.

Thank you.

[Translation]

The Chair: Mr. Binet.

Mr. Gérard Binet (Frontenac—Mégantic, Lib.): Welcome, Ms. Fraser. I am pleased that you are here today. I represent a region where there are no native communities.

Last Sunday, I met a good friend who has left the region to work in a financial institution that deals with native communities. Knowing that I was a member of the Aboriginal Affairs Committee, she mentioned that education was really what was needed to help these communities manage their money. She gave me the example of a seven-million dollar project that ended up costing $13 million. And there were really no consequences!

Do you have any oversight? If they have the authority to get financing, they can also end up in a financial mess. Do you have any role in overseeing these financial institutions?

Ms. Sheila Fraser: No, Mr. Chairman. I have no mandate where First Nations are concerned. All we can do is to audit the federal government's finances and check the reports and information provided to the government concerning the funds that these nations received. Most First Nations have their own auditor and their own financial advisors, I hope. We have no authority and no mandate where First Nations are concerned.

Mr. Gérard Binet: Thank you.

The Chair: Ms. Desjarlais.

[English]

Mrs. Bev Desjarlais: I want to make this comment most importantly to clarify the issue of the third-party managers, because I agree with you ultimately that we shouldn't be in that situation at all.

To comment on the situation, I believe it was in Ontario that the minister put a first nation in third-party management. They challenged it in court and were found to be correct, that they never should have been put in third-party management. Rather, it was the minister's will that put them there, and they shouldn't have been there. So I think the bill would probably increase some challenges that might be there, with the minister having power that he probably doesn't control adequately.

Now, you went in and did your study with the cooperation of first nations, without this new bill that's before us. There was nothing to restrict you when you had that cooperative approach with the first nations to ensure accountability. It wasn't as if this bill was necessary to ensure that accountability.

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Ms. Sheila Fraser: No, it was strictly voluntary on their part, just as first nations have cooperated on the housing audit that we're doing, and on other audits. We have found that they have been very cooperative with our office over many years.

Mrs. Bev Desjarlais: Thank you.

The Chair: Mrs. Fraser, you administered your time so well that you're probably the first witness I didn't have an opportunity to cut off. You might have had an opportunity to share all you wanted to share, but there are a few minutes left. If you have any closing remarks, we would appreciate them. Before you start, though, I'd like to thank you and your colleagues very much for appearing.

Ms. Sheila Fraser: Mr. Chair, we'd like to thank you and the members of the committee for inviting us to appear today and for the confidence you've shown in the work of the office. If some of the audit work and studies that we do in the future are of interest to you, we would hope we could come back before the committee to talk. If there are any issues that the committee thinks are relevant and that we should consider in our planning, we would also be more than happy to hear from you.

Thank you very much.

The Chair: Thank you very much, colleagues. We'll see you at 3:30.