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PACP Committee Report

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GOVERNMENT RESPONSE TO THE THIRD REPORT OF THE STANDING COMMITTEE ON PUBLIC ACCOUNTS

Chapter 3, Inuvialuit Final Agreement of the October 2007 Report of the Auditor General of Canada

ACTION PLAN AND STATUS REPORT 

RECOMMENDATION 1

Indian and Northern Affairs Canada provide an Action Plan to the Public Accounts Committee as per the commitment made to the Committee by 30 June 2008 that describes how the Department will implement the recommendations made in Chapter 3: Inuvialuit Final Agreement of the Auditor General’s October 2007 Report.

We are pleased to report that an updated Action Plan which sets out the actions necessary to meet each recommendation was forwarded to the Committee in August 2008. The initial Action Plan was included in the Departmental response component in the Auditor General Report tabled in October 2007 and noted that Indian and Northern Affairs Canada agreed with all of the recommendations contained in the report. Indian and Northern Affairs Canada will provide the Committee with an update on the status on the report recommendations in October 2009.

RECOMMENDATION 2

Indian and Northern Affairs Canada provide the Public Accounts Committee with a status report on its implementation of the recommendations contained in Chapter 3: Inuvialuit Final Agreement of the Auditor General’s October 2007 Report by 31 March 2009.

Over the past several months Indian and Northern Affairs Canada has made significant progress on many of the recommendations made by the Committee. This response represents the most up to date action taken by Indian and Northern Affairs Canada.

As part of the departmental tracking and reporting system, Indian and Northern Affairs Canada tracks its progress on action plans developed in response to the Auditor General’s recommendations. Indian and Northern Affairs Canada provides, on annual basis, the Auditor General with status of progress on all outstanding action plan items (including those developed in response to the 2007 report on the Inuvialuit).

LAND TRANSFERS

RECOMMENDATION 3

Indian and Northern Affairs Canada provide confirmation to the Public Accounts Committee that the transfer of land for the airport runway has occurred when final approval has taken place and that all of the parties involved in the transfer are content with the arrangements.

When the Inuvialuit Final Agreement was signed in 1984, the airport lands were erroneously transferred and included in section 7(1) of the Inuvialuit Final Agreement as Inuvialuit lands. It was agreed between parties that since these lands are necessary and are being used by Canada, an exchange would occur to compensate the Inuvialuit for this anomaly.

Negotiations have been underway since 1991. In 2005, arbitration was initiated by the Government of Canada against the Inuvialuit Regional Corporation (IRC). In 2007 the parties to the arbitration agreed to put the arbitration in abeyance in order to attempt to reach a negotiated settlement.

In January 2008, Canada (Indian and Northern Affairs and Transport Canada) and the IRC reached a tentative settlement on the airport land transfer. The Parties are engaged in drafting a settlement agreement which they anticipate will be finalized by the fall of 2009.

Once the negotiations and/ the land transfer have been completed, Indian and Northern Affairs Canada will confirm to the Committee its completion by providing the Committee a copy of said agreement.

RECOMMENDATION 4

Indian and Northern Affairs Canada accelerate the development of guidelines to transfer lands to the Inuvialuit to 31 December 2008 and provide the Public Accounts Committee with a copy of the guidelines by that date.

At the time of the effective date of the Inuvialuit Final Agreement, 21 parcels of land being used by Canada (for such activities as research and defence) were encumbered pending completion of Government requirements for the land and its satisfactory cleanup, at which time the parties agreed to have the encumbrances removed so that full control would return to the Inuvialuit. These parcels make up the Annex R list in the Inuvialuit Final Agreement.

In 2003, written guidelines "Steps Required to Terminate and Remove Annex 'R' Reservations or Portions of Reservations as an Encumbrance Against the Title of Inuvialuit Lands” were jointly developed by the Inuvialuit and Canada to be used to guide Government officials in administering their use on the Annex R land. To date, this document guided the Parties in releasing two Annex R sites. Site inspections are underway and it is fully anticipated that at least two more sites will be vetted through this process by summer and fall 2009. As the parties continue to work with the remaining Annex R sites, the step process guidelines will be refined as required to improve their efficacy. 

Indian and Northern Affairs Canada will apply lessons learned in this exercise to fine- tune the "Steps Required to Terminate and Remove Annex 'R' Reservations or Portions or Reservations as an Encumbrance Against the Title of Inuvialuit Lands"  to serve as a guideline for other federal government departments.

CONTRACTING OBLIGATIONS

RECOMMENDATION 5

Indian and Northern Affairs Canada provide the Public Accounts Committee with a copy of the updated Treasury Board Contracting Policy and that INAC provide an explanation of how the updated policy reflects the obligations stated in the Inuvialuit Final Agreement in its annual report on this Agreement.

In Indian and Northern Affairs Canada’s response to the Auditor General report it was noted that INAC was part of an interdepartmental working group established by Treasury Board Secretariat for the development of amendments to the Treasury Board Contracting Policy, which will update the process for government procurement in the context of comprehensive land claim agreements. The amendment has clarified departmental responsibilities for monitoring and reporting requirements of Crown procurements undertaken in regions covered by comprehensive land claim agreements, including the Inuvialuit Final Agreement.

Contracting Policy amendments were approved on June 19, 2008 and as per the Committee’s request, a copy of the updated Treasury Board Contracting Policy is attached (Appendix I).

It is anticipated that the updated policy will strengthen Canada’s ability to meet its contracting obligations as set out in the Inuvialuit Final Agreement as well as all other comprehensive land claim agreements.

Further to Recommendation 5, Indian and Northern Affairs Canada will work with the Inuvialuit to develop an explanation of how the updated policy reflects the obligations stated in the Inuvialuit Final Agreement for inclusion in the Inuvialuit Final Agreement Annual Report of 2008 – 2009.

RECOMMENDATION 6

Indian and Northern Affairs Canada work with its partners in the Inuvialuit Final Agreement to clearly define “reasonable share” by 31 December 2008 and provide a copy of this definition to the Public Accounts Committee.

Where the Inuvialuit are capable of supplying goods and services on a reasonable basis, the Inuvialuit Final Agreement commits the federal government to providing the Inuvialuit with a "reasonable share" of non-public contracts awarded within the Inuvialuit Settlement Region. This concept is undefined in the Agreement and the Parties have yet to reach consensus on its interpretation. However, the Parties have agreed to discuss "reasonable share" and have noted that reaching an agreed upon definition will take months of collaborative discussions to ensure all parties are satisfied. Once there is agreement as to the definition of “reasonable share”, Indian and Northern Affairs Canada will ensure that the definition is shared with all federal departments to guide them in their contracting work in the Inuvialuit Settlement Region.

RECOMMENDATION 7

Indian and Northern Affairs Canada ensure that the untendered contracts awarded under the “reasonable share” provision of the Inuvialuit Final Agreement be priced in a similar manner to other untendered contracts by including this in the definition of “reasonable share”.

Indian and Northern Affairs Canada will take this recommendation into consideration, and examine its viability. Indian and Northern Affairs Canada will be working with affected departments and agencies as well as the Inuvialuit to the Inuvialuit Final Agreement to develop a definition of "reasonable share" and endeavour to include this recommendation in those discussions.

ECONOMIC MEASURES REVIEW

RECOMMENDATION 8

Indian and Northern Affairs Canada include in its annual reports on the Inuvialuit Final Agreement a status report on the progress of the economic assessment and, once the assessment has been completed, status reports on the response to issues raised in the assessment.

Section 16 of the Inuvialuit Final Agreement sets out measures to support full Inuvialuit participation in the northern Canadian economy, and the Inuvialuit integration in Canadian society through development of an adequate level of economic self-reliance and a solid economic base. In that section, the Parties are committed to a review as to the progress against these objectives starting in 2000 and every five years thereafter. The first review was completed in November 2001.

The Parties agreed that the first review process had not been as useful as anticipated and agreed to forgo the second scheduled review. In 2007, the Parties established an Economic Measures Working Group to work towards advancing the objectives of the section. In this context, the Parties agreed to jointly undertake an assessment of the economic development opportunities in each of the Inuvialuit communities and examine the effectiveness of government program support for these opportunities. The Parties expect this first phase to take approximately 18 months with the second phase continuing an additional year. 

Canada’s representative on the Inuvialuit Implementation Committee will ensure that progress on this important initiative is included in the Inuvialuit Final Agreement Annual Report and will ensure that issues raised in the second phase of the project are analysed and addressed as is appropriate.

MONITORING ACHIEVEMENT OF PRINCIPLES

RECOMMENDATION 9

Indian and Northern Affairs Canada report on the progress made in achieving the Inuvialuit Final Agreement’s principles in its annual report on this Agreement.

Indian and Northern Affairs Canada in its response to the Auditor General committed to working with its Inuvialuit Final Agreement partners to develop performance indicators with a view to measuring progress towards meeting the principles of the Inuvialuit Final Agreement and reporting that progress in the Inuvialuit Final Agreement Annual Report.

An Impact Evaluation of Comprehensive Land Claims, which examined four agreements – the NQA (Naskapi), the Inuvialuit, Gwich'in and Sahtu, was approved by the Departmental Audit and Evaluation Committee in February 2009.

The evaluation addressed six broad issue areas corresponding to anticipated outcomes of the agreements - fulfillment of Comprehensive Land Claims Agreement terms; clarity and certainty; enhancement of working relationships;

stable and predictable environment for economic development; meaningful and effective voice for Aboriginal people in decision making; and community social and cultural well-being.

Key Findings

The evaluation supports the following positive conclusions:

  • The basic elements of the agreements are in place with land and financial transfers completed on schedule;
  • Agreements have succeeded in bringing clarity and certainty to the settlements areas in terms of land ownership, access and regulatory requirements for development;
  • Land claims settlements have contributed to a positive environment for investment;
  • Settlements have enabled Aboriginal groups to position themselves to take advantage of development;
  • Settlements have had a positive impact on the role of Aboriginal people in the economy of the settlement areas and their relations with industry; and
  • Aboriginal groups now have a meaningful and effective voice in decision making on land and resource management.

However, the evaluation also noted that:

  • only modest gains were achieved in areas of income, employment, education and housing in the settlement areas since the agreements were put in place.
  • there has been insufficient funding to address the costs as well as the organizational and training requirements associated with the increase in consultation and resource management in the settlement areas.
  • there has been a lack of targeted development and training opportunities in the north.

Although Canada believes that progress towards these Principles is the responsibility of both parties to the claim and while the agreement is an important tool, it is only one of many contributing factors towards the attainment of these principles; however, Indian and Northern Affairs Canada will work with the Inuvialuit Final Agreement Implementation Committee to seek agreement on including results from the impacts evaluation in the Inuvialuit Final Agreement Annual Report as well as agreement to use baseline data from the indicators used in the evaluation to measure progress made in achieving the Inuvialuit Final Agreement’s principles.

ACCOUNTABLITY

RECOMMENDATION 10

Indian and Northern Affairs publish its own annual report in a timely manner detailing its progress in the implementation of the Inuvialuit Final Agreement even if it does not have information from the other organisations involved in the Agreement. This annual report should also document which partner organisations have not provided information in time to be included in the report.

Indian and Northern Affairs Canada agrees with the Committee and Auditor General’s observations that in order for annual reports to be a proper and effective accountability tool they must (1) be produced in a timely manner, and (2) they must focus on results. However, Indian and Northern Affairs Canada differs on the need to produce a separate annual report without the input from the Inuvialuit, Government of the Northwest Territories and the Government of Yukon, as this would run contrary to the cooperative relationship among the Parties to the Inuvialuit Final Agreement.

Indian and Northern Affairs Canada is aware that current processes in place to complete annual reports requires strengthening and is taking steps with our partners to enhance the quality and timeliness of  all outstanding annual reports for the Inuvialuit Final Agreement as well as those for other claims.

RECOMMENDATION 11

Indian and Northern Affairs Canada include a link in its Departmental Performance Report to an online report that includes details of its own results-based performance in the implementation of comprehensive land claims agreements.

Indian and Northern Affairs Canada is currently in the process of developing a more robust monitoring and reporting system pertaining to the implementation of agreements.

The enhanced monitoring and reporting system will be updated in the summer of 2009 and the system will be fully populated by the fall of 2009.  The system will support reporting against key implementation performance indicators noted in Indian and Northern Affairs Canada’s Departmental Performance Report. This provides for enhanced transparency and accountability as to the implementation of federal responsibilities.