AANR Committee Meeting

Notices of Meeting include information about the subject matter to be examined by the committee and date, time and place of the meeting, as well as a list of any witnesses scheduled to appear. The Evidence is the edited and revised transcript of what is said before a committee. The Minutes of Proceedings are the official record of the business conducted by the committee at a sitting.

For an advanced search, use Publication Search tool.

If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.

Previous day publication Next day publication

37th PARLIAMENT, 2nd SESSION

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

EVIDENCE

CONTENTS

Thursday, June 12, 2003

0910

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

Mr. David General (Councillor, Six Nations of the Grand River)

0915

0920

0925

The Chair

Mr. Maurice Vellacott (Saskatoon—Wanuskewin, Canadian Alliance)

Mr. David General

Mr. Maurice Vellacott

The Chair

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

Mr. David General

0930

Mr. Yvan Loubier

Mr. David General

0935

The Chair

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

Mr. David General

0940

The Chair

Chief R. K. (Joe) Miskokomon (Chippewas of The Thames First Nation)

0945

0950

0955

The Chair

Chief R. K. (Joe) Miskokomon

The Chair

Mr. Yvan Loubier

Chief R. K. (Joe) Miskokomon

1000

Mr. Yvan Loubier

Chief R. K. (Joe) Miskokomon

Mr. Yvan Loubier

The Chair

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

Chief R. K. (Joe) Miskokomon

Mr. John Godfrey

Chief R. K. (Joe) Miskokomon

1005

Mr. John Godfrey

The Chair

Chief R. K. (Joe) Miskokomon

The Chair

Chief William McCue (Chippewas of Georgina Island)

1010

1015

The Chair

Mr. John Godfrey

Chief William McCue

Mr. John Godfrey

1020

Chief William McCue

The Chair

Mr. Maurice Vellacott

Chief William McCue

Mr. Maurice Vellacott

Chief William McCue

Mr. Maurice Vellacott

Chief William McCue

Mr. Maurice Vellacott

1025

Chief William McCue

Mr. Maurice Vellacott

Chief William McCue

Mr. Maurice Vellacott

The Chair

Mr. Gérard Binet

The Chair

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

1030

Chief William McCue

The Chair

Mr. Murray Mollard (Executive Director, British Columbia Civil Liberties Association)

1035

The Chair

Mr. Murray Mollard

1040

1045

1050

The Chair

Mr. Murray Mollard

The Chair

Mr. John Godfrey

Mr. Murray Mollard

Mr. John Godfrey

1055

Mr. Murray Mollard

Mr. John Godfrey

Mr. Murray Mollard

Mr. John Godfrey

Mr. Murray Mollard

Mr. John Godfrey

Mr. Murray Mollard

1100

The Chair

Mr. Murray Mollard

The Chair

Mr. Frank Leonard (Chair, Municipal Finance Authority of British Columbia)

Mr. Steve Berna (Executive Director, Municipal Finance Authority of British Columbia)

1105

Mr. Frank Leonard

The Chair

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.)

Mr. Frank Leonard

Mr. Steve Berna

Mr. Stan Dromisky

Mr. Frank Leonard

Mr. Steve Berna

1110

Mr. Stan Dromisky

Mr. Steve Berna

Mr. Stan Dromisky

Mr. Frank Leonard

1115

Mr. Steve Berna

The Chair

Ms. Nancy Karetak-Lindell

Mr. Frank Leonard

Mr. Steve Berna

1120

Ms. Nancy Karetak-Lindell

Mr. Steve Berna

Mr. Frank Leonard

Mr. Steve Berna

1125

The Chair

Ms. Nancy Karetak-Lindell

The Chair

Mr. Steve Berna

The Chair

Mr. Steve Berna

The Chair

Mr. Steve Berna

Mr. Frank Leonard

The Chair

Prof. Robert Bish (Professor Emeritus, University of Victoria)

The Chair

Prof. Robert Bish

1130

1135

The Chair

Mr. Yvan Loubier

1140

Prof. Robert Bish

Mr. Yvan Loubier

The Chair

Prof. Robert Bish

1145

The Chair

CANADA

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

NUMBER 084

2nd SESSION

37th PARLIAMENT

EVIDENCE

Thursday, June 12, 2003

[Recorded by Electronic Apparatus]

¿ (0910)

[English]

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

We'll resume our work on Bill C-19, an act to provide for real property taxation powers of first nations, to create a First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority, and First Nations Statistical Institute, and to make consequential amendments to other acts.

We're pleased to welcome this morning, from the Six Nations of the Grand River, Councillor David General.

Good morning, Councillor.

Mr. David General (Councillor, Six Nations of the Grand River): Good morning.

Mr. Chair, before I get to the presentation, I'd just like to open by saying this is a band council resolution the presentation refers to. Some of the contents will be reflected in the presentation. Any questions I might be answering later would be answered with respect to my community.

I'll begin, sir. This is the presentation Chief Roberta Jamieson would have presented if we had been able to make the teleconference link this morning. This is her paper. I'm very proud to present it on behalf of Chief Jamieson.

Bonjour. Greetings to the chair and members of the standing committee of the Canadian House of Commons.

We are pleased to place the position of the Six Nations of the Grand River chief in council on Bill C-19 before this committee in the form of a band council resolution.

I regret that the short notice for this presentation did not permit us to have the resolution translated into the French language. I ask that the committee arrange to have this done.

If Bill C-19 is as important as the minister says it is, it is important enough that this committee ensure the proper participation of first nations in its deliberations. Ample notice should be given. An invitation should be sent out for submissions. The committee should schedule hearings in first nations communities, not in hotels in large cities.

Some members can see for themselves the way in which the proposed legislation fits the reality. Just pick 20 first nations at random, and see for yourselves that none of this happened with this important bill.

Although we requested months ago to appear before this committee, I am appearing here on 24 hours' notice. Many chiefs, such as Chief Victor Buffalo of the Samson Cree Nation in Alberta, wanted to appear in person, as called for in the spirit and intent of Treaty No. 6, and wanted to prepare a careful, thoughtful presentation. But he too was given only hours' notice.

Our people would like to be respectful to this committee and its mandate, as we were when it was chaired by Keith Penner in the 1980s. But respect is difficult to muster when this committee shows little respect for our people in not giving us notice and not coming to our communities.

As you will see in our resolution, Six Nations of the Grand River joins the many first nations across the country who oppose the legislation. Despite the efforts to distance Bill C-19 from Bill C-7, the minister himself has said it is part of the same legislative package.

Our problem is not with the institutions; it is with the legislation. It creates institutions whose directors are appointed by and responsible to the Minister of Indian Affairs, accountable to the minister and not accountable to first nations. It makes absolutely no difference that, as the minister says, aboriginal people are on the board. That does not make them first nations institutions.

Our people of Six Nations are people with inherent, historical, aboriginal, and treaty rights to nationhood. If we want institutions, we have the inherent power to create them. We can have institutions that can be subscribed to voluntarily, without any imposition on the rights of first nations, without legislation, without court challenges, much more economically, and without further damaging Canada's relationship with first nations and tarnishing Canada's reputation with the international community.

When we permit governments to take over our powers, we are reinventing colonialism. Bill C-19 offends the nation-to-nation relationship our people enjoy with the Crown. If the committee does not know the history of Canada and the role we played in it, that should be the starting point of the committee's study.

We are told the legislation is optional, but we can cite many examples, such as the alternative funding agreements, which start out by being optional pilots and soon are mandatory. What starts out as optional soon becomes a “one size fits all” approach so often utilized by Indian Affairs.

We oppose Bill C-19 because it advances the assumption that we first nations have very few rights and that federal legislation is required to empower the institutions proposed in legislation. In fact, the institutions do not require legislation; they are already up and running, offices rented, and staff appointed.

We are opposed to the legislation because of the strong flavour of municipal language it uses, representing a very limited view of the rights and distinct place of our people in Canada.

We are opposed to Bill C-19 because it links to the government's larger objective. As the minister told the committee on Monday, Bill C-19 plays a key role within the government's larger strategy, along with the First Nations Governance Act. It is outrageous that the minister could ask this committee, as he did on Monday, why it is that in the 21st century, in such a prosperous country, so many people are caught in the web of poverty and despair. He said it is clearly time for action; the status quo is unacceptable. And what is the minister's solution? It is Bill C-19.

The minister knows very well why there is too much poverty and despair. It is because the federal government appropriated the lands and the resources we offered to share. It took far too much and left us far too little. It is because the federal government failed to pay hundreds of millions of dollars in what by its own admission are lawful obligations. It is because of years of racist policies of chronic neglect, providing provinces with funding and denying us funding by failing in its fiduciary duties and refusing to acknowledge its conflict of interest. It is because we are deliberately excluded from economic development. It is because our schools are underfunded.

For more than a century, the federal government and its systems of Indian agents have had total control over every aspect of our lives in our territories. The spider that wove the web of poverty and despair the minister mentions is the federal government itself. Now it offers to allow us to tax our properties and to mortgage our children's futures on Bay Street.

The institutions set out in Bill C-19 are designed to make it look as though first nations can generate enough revenues to sustain ourselves. We certainly were able to do that before our resources were appropriated, but until the injustice is remedied, that is a false hope. What good is Bill C-19 to Cat Lake, Ontario; to Shamattawa, Manitoba; to Grassy Narrows? It offers false hope, nothing more.

Why, then, is the minister interested in these institutions? As he said to the Senate committee on aboriginal peoples last month, “Are we suggesting that the Government of Canada will continue to pay the whole bill? I do not think that is the intent of aboriginal governments, or of our government.”

The minister's officials told the committee that the cost of the four institutions together would be no more than $10 million. You might ask the researcher of the Library of Parliament to check out the official website of the institutions and report back to you on costs. You will find it well over $25 million annually.

¿ (0915)

The minister told this committee this week that Bill C-19 opens the door for new resources of revenue and improved infrastructure to attract new investment. Surely the committee is not going to take this statement at face value. Where are the economic studies that provide substance to such an assertion?

The experts we have consulted, including Dr. Fred Lazar of the Schulich School of Business at York University, say that the institutions have little power to spur development and will not raise the money the minister claims they will. The minister said that the genesis of the institutions was in 1996, when the AFN passed a resolution in support of developing new fiscal relationships. Please note, however, that Bill C-19 is not about new fiscal relationships. It is about four new federal institutions, which strengthen the federal government's ability to control our rights to assess tax on our lands.

The minister should have quoted the entire resolution setting up the fiscal relationship committee at AFN to work toward fiscal transfers in a manner consistent with the government-to-government relationship and recognition of the inherent rights of first nations. I'm sure the Library of Parliament researcher can supply the committee with the full text of the resolution the minister cites.

That brings us back to what must be our clear or central focus, the focus of this committee: fair and just fiscal arrangements with Canada. Our central focus cannot be tax-based. It is not about our borrowing money on Bay Street to finance our water plants. Our central focus must be on having our fair share of Canada's prosperity, having our fair share of our resources.

Our focus must be on the fiscal arrangements, which do not permit the minister to hold us hostage until we promise we will conform to his demands. Instead we ask that this committee work with us to develop new fiscal arrangements consistent with the nation-to-nation relationships and consistent with the federal government's treaty and fiduciary responsibilities.

We ask this committee to work with us for a just solution to historic inequities. The Penner report and the royal commission both suggest revenue transfer arrangements that are non-racist, non-colonial, non-paternalistic, and that assure our economic future in Canada. As Chief Clarence T. “Manny” Jules told the royal commission in 1993: “We want control of our destiny and a peaceful coexistence with Canadian society. First nations must have an equitable share of land, resources and jurisdiction, and fiscal capability to fulfill their responsibilities as self-determining people.”

I'll deviate from the text only for a minute, to say this is where Six Nations agrees with the proponent of the fiscal institutes. We believe our land, our resources, and our jurisdiction must come before we deal with fiscal capacity. I'll say it again: land, resources, jurisdiction, and then the fiscal capacities. If you don't have the three former, then you don't need to start working with the latter.

And I'll go back to the text again.

We subscribe to that. We ask the committee to work with us to achieve that objective. In the meantime, we ask that the committee do the right thing and announce that it will give Bill C-19 the proper study that it deserves, that it will hear expert witnesses on first nations, and that it will not report back to the House until it can have some confidence in its recommendations.

¿ (0920)

That is the end of the formal presentation that Chief Jamieson asked me to present.

Mr. Chair, questions.

¿ (0925)

The Chair: Thank you very much, Councillor General.

We will have time for a three-minute round.

Mr. Vellacott.

Mr. Maurice Vellacott (Saskatoon—Wanuskewin, Canadian Alliance): Very quickly, David, I appreciate your being here and sharing with us.

Would you be of the view that a scheduling or listing would be acceptable to the Six Nations and others in Ontario, bands you're familiar with? A scheduling or listing, as with the Land Management Act--is that something you would be open to, or some variation of that?

Mr. David General: The Six Nations have rejected all of the legislation, which includes Bill C-19, and we would not be amenable to any amendment.

Mr. Maurice Vellacott: Thank you.

The Chair: Monsieur Loubier.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): I got my answer, Mr. Chairman. I was going to ask the same question to Mr. General.

Mr. General, thank you for your presentation. I'm very pleased that you came this morning. You say you object to Bill C-19, and you seem vehemently opposed. If I understood you correctly, there is no additional provision that could be added to Bill C-19 as an amendment that could satisfy the Six Nations.

In parallel with Bill C-19, we could try to get a clear position from the government so that negotiations on self-government, land claims, compensation for past prejudices and participation in economic growth—in fact, anything that could be granted to a third order of government—could be sped up considerably. If we got that firm commitment from the federal government and the opposition, of course, cooperated on that initiative, based on the conclusions reached by the Royal Commission on Aboriginal Peoples, it would be possible to correct the shortcomings of Bill C-19. Could that not be some sort of starting point?

Furthermore, there would be another condition : ensure that Bill C-7 falls, since it is totally unacceptable. We will fight against Bill C-7 until the end.

If we combine all of those conditions: obtaining a commitment from the government, taking steps such as those proposed by the Royal Commission on Aboriginal Peoples, correcting the shortcomings regarding the independence of institutions and the optional aspect of Bill C-19—in fact, it is not at all clear that it is optional; in my view, you will forcibly be covered by this bill, even if you do not want to be— so basically, if we could correct all that, do you think there would be any hope of reaching some sort of consensus among the aboriginal peoples of Canada?

[English]

Mr. David General: Mr. Loubier, I cannot speak on behalf of the first nations of Canada. I think I can fairly competently speak on behalf of the Six Nations. If you know the history of the Six Nations, you will know that within our territories we have two forms of government. The traditional government provides all the value and guidance that connects us to the land. That's why I always say land is first. And we have an elected council that works with the Crown, accepting the transfers, making things happen within our territory.

The problem--and I have to go back to Bill C-7--is that Bill C-7 does not recognize traditional councils. That is extremely problematical at Six Nations.

Speaking about Bill C-19 in particular, Six Nations is opposed to any form of taxation. We do not want to tax our people. We believe the remedy is within settling outstanding land resource issues. That would be the base of our wealth, I guess you would say, to get on and provide the funds for our infrastructure, things that we want to do in our territory.

I will say that we're no burden on Canada. We don't take taxpayers' money. Whatever comes to Six Nations is due to us because of the huge outstanding amount of money that is owed us for the historical neglect of our treaty relationship with the Crown.

¿ (0930)

[Translation]

Mr. Yvan Loubier: Mr. General, I am very familiar with the Six Nations. In fact, I know you very well and I am always pleased to see you, as well as Ms. Jamieson.

I would like to ask you another question on this topic. There are 140 first nations communities that want to use the institutions specified in Bill C-19. If those communities were to build institutions, in their view, it would be those mentioned in Bill C-19. As you know, those communities agree with Bill C-19, and some of the members have worked on this bill.

If we managed to ensure that Bill C-19 applied only to the 140 communities wanting to use the institutions, that the bill clearly states that it is optional and other formulas—including those already used by the Six Nations—could be used, independently of Bill C-19, would that be a viable alternative?

In other words, the content of Bill C-19 is as if 140 first nations communities had worked together and decided that was the type of institution they wanted for the future, in terms of tax management. The members of the Six Nations, however, are not interested in using those institutions : they are not yours, they are not consistent with your customs, your history and institutions that you already have.

If we allowed you to keep your institutions and told you it was up to you, your band council and elders to decide how you wanted to manage the needs of your members and develop the resources—after a true negotiation on the sharing of natural resources, the royalties and wealth of your territory— would that not be an option? Would that not be a happy medium for those who are opposed to this bill and those who support it?

My objective, if not my dream—after all, everyone has dreams—is to get a widespread consensus among the first nations, as we did to object to Bill C-7. The opposition was virtually unanimous. Right now, those who support Bill C-19 are those who fought against C-7. The ideal would be to reach some sort of consensus that would satisfy everyone. That is my dream and that is why I'm asking you the question.

You know I want to see a consensus, not unanimity. You also know how much I like your people. So I would like to know whether, in your view, “there is a way to meet half-way”.

[English]

Mr. David General: Again, I can only convey what our council has presented in their statement about Bill C-19. It's unequivocally rejected. But I shook the hand of every director of all the institutions and congratulated them on their presentation. They've worked hard. They know what they need for their communities. There probably is a way. I mean, there was discussion about fashioning it to resemble the First Nations Management Act or enlarging, maybe, the Kamloops amendment. They know what's best for their community, and they should not be denied what's best for their community. I wish them every success.

This national legislation, this Canada-wide legislation, does not work for Six Nations. I think Six Nations would probably like to work a little closer to the chest and grow as we can afford it, knowing that every step we take is a solid step and we're not stepping out into the tenuous world of borrowing.

Some people like to do that. Many, many people will not work on a line of credit. When they can afford it, they'll do it. I think that's the sort of comfort that Six Nations has.

One thing that we do have in our territory, Mr. Loubier, our greatest resource, is our people. Our greatest resource is also our location. We're right at the hub of the Golden Horseshoe, very close to Hamilton, very close to Toronto, large cities all around. We send our children to universities to at least a half dozen locations around us. We have tremendous capacity at Six Nations. Our lawyers are coming back. Our teachers are at the level of MAs. We have probably the greatest percentage of PhDs in first nations all across Canada. Six Nations has capacity, and it's for Six Nations to determine when to take these large steps.

You mentioned something like 140 other first nations who want to use the legislation and the institutions for their prosperity, for their dreams and aspirations. But respecting diversity, I want them to know where Six Nations stands, and that's where Six Nations stands.

¿ (0935)

The Chair: Thank you.

Even though I allowed ten minutes for Monsieur Loubier, Monsieur Binet, you have three minutes.

[Translation]

Mr. Gérard Binet (Frontenac—Mégantic, Lib.): Thank you, Mr. Chairman. Good morning, Mr. General.

The committee debated Bill C-7 for hours, weeks, and you were with us for 55 days. On Wednesday, we heard from a group made up of people from different aboriginal communities. I was very impressed by them. Their presentation seemed very well researched and thorough. Some people in the group, who had worked for 10 or 12 years, felt that the bill was promising for the future. After that, during an in camera session, the committee was told it had to exert some pressure, because this bill really comes from the aboriginal communities. Mr. Loubier even told the minister that he had not done any work on this bill. I asked him the question and he confirmed that this bill really came from aboriginal communities and that the measures contained therein were beneficial where they had been applied for several years.

There is no aboriginal community in my riding and I thought there might be some light at the end of the tunnel. If I rely on what I hear from those opposed to the bill and what you said this morning, I think you are in a kind of wait-and-see position. When people have expectations, more often than not, they are disappointed. You do not think this bill is progressive; you find it rather negative. Do you think that waiting to see what the federal government does will really help your communities?

[English]

Mr. David General: I thank the honourable member for the question.

Again, when you talk about 140 or 143 first nations that are supporting proponents of the legislation--and you're very aware from all the testimony that there are something like 633 first nations across Canada--that would leave a difference of just under 500 first nations who are either opposed or just don't have any opinion, or can't use the legislation. Even with that disparity in the numbers, it's definitely not fifty-fifty.

Again, I have all due respect for those people who've worked so hard. Some have worked 15 years. There have been people in our community who had the view that maybe that's the sort of institution we have. There have been people within our territory who believed in that system. And that's good. But again, we're trying to balance our elected council, the council that has the mandate currently, with the traditional council.

Today I can relate to you only that the people of Six Nations cannot use any of the suite of legislation that's being presented to this committee, and to the House and the Senate.

Do I wish there were a way to make things work? Everybody wishes that. I'll go back to the statement that Manny Jules made, and I hold by it. I told Manny this in Squamish--I love this statement. Because this is land, resources, jurisdiction, and fiscal capacity. I think once you start with the one, once you get the land and the resources moving, once we have those, then we desperately need the fiscal capacity. We have the ability within our territory to jump on that train and have it move. But I think it's going to be the land that's going to ignite us.

I'll take you to the other bill, Bill C-6, the claims resolution act. It talks about money. The only remedy is money. For us at Six Nations, it's not just money; it's about land. We're native people because we're connected to the land. Once we're no longer connected to the land, once the land is gone, I'm of the opinion that we're probably no longer native. Money is not all it's about.

¿ (0940)

The Chair: Thank you very much, councillor, for an excellent presentation. We'd ask you to also thank Chief Jamieson for preparing this, and we understand it was on short notice. So thank you very much for participating.

I now invite, from the Chippewas of the Thames First Nation, Chief Joe Miskokomon.

Good morning. Thank you for appearing on short notice also.

We have 30 minutes together. We invite you to make a presentation, hopefully to be followed by questions from members. Please proceed.

Chief R. K. (Joe) Miskokomon (Chippewas of The Thames First Nation): Thank you, Mr. Chair. Thank you, members of the committee, for allowing me to come before you.

My name is Chief Joe Miskokomon. I was a grand chief of the Union of Ontario Indians for four consecutive terms, which equals 12 years. My father started the Union of Ontario Indians 53 years ago. I am currently the chief of the Chippewas of the Thames, and we are signatories to many pre-Confederation treaties in southwestern Ontario. I have been elected as chief for the past eight years, and I served on my council for 12 years previously.

In the 1980s and through the 1990s, I served at the Assembly of First Nations constitutional committee, and I was there for section 35. I was in London, England, prior to the patriation, and I know about all of the discussions that occurred around inherent rights and aboriginal and treaty title.

Our community does not have a property tax law. We are not members of the First Nations Finance Authority. However, I am a member of the advisory panel to the First Nations Financial Management Board. We support Bill C-19, the First Nations Fiscal and Statistical Management Act.

My community is located 25 miles southwest of London, Ontario. For years we have watched the growth of the manufacturing and service sectors. More recently, we've watched growth in the high-tech, health services, and automotive sectors within our region. We have watched as the population has grown. We have watched as residential developments, shopping malls, and industrial parks have sprouted up around us.

I am here today in front of this committee for one reason. I am here to convey to you our frustration in watching opportunities pass us by. We are sick and tired of high unemployment. We are tired of being economically disadvantaged. We are sick and tired of being marginalized. We have land, and we have access to transportation systems. We have a skilled labour force, and we have access to international markets.

To compete for investment, we need competitive infrastructure. This means high-speed Internet. This means waste-water systems and management. This means potable water. This means natural gas. We need to provide basic security for our economic investment. Our investment climate needs to be certain, stable, and more importantly, more competitive than our neighbours'. We can be more than landlords by collecting rent. We can act like governments and collect property tax.

This is why I support Bill C-19. It provides us with the prerequisite for modern economics. It means the potential investor will view opportunities on our land equally to how they view opportunities off our land. It means that in the future, opportunities will not pass us by.

I know the effort required for economic development. I was there every step of the way and saw the dream of Casino Rama become a reality. Property taxes are much more common than you think in Ontario. Many communities already collect payment in lieu of property tax from utilities like Ontario's Hydro One. This includes some of the opponents of Bill C-19.

Bill C-19 is not only about building our institutions of government; it is about exercising our inherent jurisdiction as a government. It has been proposed and developed by first nations and will be implemented by the first nations. Bill C-19 is not related to Bill C-7. There are and always have been five different principles between the fiscal institutions and the governance initiative. There is a difference in scope of application. The governance act will apply to all first nations; Bill C-19 will be optional.

The proponents of the legislation are different. The governance act is an initiative led by the Department of Indian Affairs. The Fiscal and Statistical Management Act is a first-nation-led initiative. And I'm proud to be one of those leaders.

¿ (0945)

The implementation plans for the two pieces of legislation are different. The federal government will likely impose Bill C-7 on first nations, while Bill C-19 will be implemented by first nations.

The objectives of the two pieces of legislation are different. Bill C-7 is reportedly about accountability and the implementation of the Corbiere decision. We want to promote and improve investment opportunities.

The origin of the two pieces of legislation is different. We started almost twenty years ago with the Kamloops amendments. They started Bill C-7 after the 1999 Supreme Court decision on Corbiere.

Bill C-19 is clearly optional. We can choose to use it or not. The law-making powers of Bill C-19 are permissive. In Bill C-19, you may make laws. We may request support. We may seek financial advice. In fact, the word “may” appears 93 times throughout the proposed legislation.

I support options. I support those first nations who wish to develop their economics through access to resources. I support those first nations who want to rely on the fiduciary and treaty obligations of the federal government to develop their economies. I hope they support our aspirations as well.

Despite this, I'm aware of the debate about the optional nature of the bill. Opponents of Bill C-19 are not convinced that this is optional; therefore, to provide greater certainty, they are recommending that a schedule of first nations who are ready to use the fiscal and statistical institutions now be attached to the bill. As more first nations opt in or opt out, this schedule would be amended by Canada. The opponents have suggested they could support Bill C-19 with such a schedule attached.

Amending the schedule creates undue cost to us. Look at the poor experience in amending a similar list attached to the First Nations Land Management Act. Over 100 communities want to join; only 15 have been allowed in per year. Some of those communities will have to wait more than seven years for application.

It has been suggested that an order in council procedure is quicker than returning to Parliament. An order in council requires extensive bureaucratic consultation. They require numerous briefing notes, and at the end of the day it is still an order in council from the federal government.

This perpetuates federal control over first nations jurisdiction. We have worked too hard to become this independent. The schedule is redundant in clearly optional legislation. A schedule bypasses community processes and forces first nations to decide whether or not they are in or out.

There are no schedules attached to any other federal legislation in Canada. Most importantly, a schedule would mean lost economic opportunities for those of us who would have to wait for Canada before we can use the institution.

To attempt to build consensus, however, I believe we can accommodate a list within the current framework. In particular, I would like to propose that under clause 32 we add two subclauses:

32.(3) The first nations that have a law made under subsections 4(1) or 8(1) in force shall be listed in the schedule maintained by the commission.

32.(4) A copy of this schedule shall be published at least once in each calendar year in the First Nations Gazette

This proposed amendment is a mutual gain. Clearly a list will be established of first nations who have passed laws under section 4 of Bill C-19. This list will be published annually within the First Nations Gazette.

¿ (0950)

This list will positively and clearly identify which first nations are within Bill C-19. This list will be controlled by the first nations institute and not the federal government. This will ensure that opportunities are not lost. This will ensure that first nation jurisdictions are protected. This will preserve the optional nature of the legislation.

The First Nations Gazette is our method of listing our laws. It has already published over 500 of our laws. I anticipate that one day it will contain all our laws, just like the Canada Gazette.

I would also like to propose two other amendments. From what I understand, these amendments were previously suggested by Vice-Chief Satsan on Monday. To clarify the independence of the institutions, I would like to add the word “independent” to the ninth “Whereas” clause in the preamble. It would now read:

Whereas, by 1999, first nations and the Government of Canada recognized the benefits of establishing independent statutory institutions as part of a comprehensive fiscal and statistical management system;

Finally, I would like to request that a non-derogation clause be added immediately following clause 2 and before part 1 begins. It would read:

For greater certainty, nothing in this act shall be construed as to abrogate or derogate from any existing aboriginal or treaty rights of the aboriginal peoples of Canada under section 35 of the Constitution Act, 1982.

I am confident that with these proposed amendments we have tried to reach a consensus on this bill among first nations. I hope that with these proposed amendments you will be able to demonstrate that you have listened. We want to work together with all first nations and Canada. Our new partnership doesn't just mean a partnership with the governing parties; it means a partnership of first nations and Canada.

I urge you to support Bill C-19. Complete your committee work quickly. Pass this bill through the House before the House recesses for the summer. Send us the signal that the whole Parliament supports first-nations-led initiatives. Send us a signal that times have changed.

Thank you very much. Meegwetch.

¿ (0955)

The Chair: Thank you very much.

Chief, you have made three suggestions that I think should not go unnoticed. For the public hearing part of our work, we don't need a quorum. A quorum is nine. If there's any way we can put our minds together and put on paper the three suggestions that you have, I would like to see every member get it, because some are not here but will be here for clause-by-clause. So I think it would be important that everybody has that on paper. If it's possible, it would be very helpful.

Chief R. K. (Joe) Miskokomon: I'd be more than happy to provide those amendment suggestions, Mr. Chair.

The Chair: We thank you very much.

We can have a round of five minutes.

Monsieur Loubier.

[Translation]

Mr. Yvan Loubier: Thank you, Mr. Chairman. Thank you, Chief Miskokomon.

I was going to ask you the same thing as the chair, namely that you give us your amendment in writing on the list published in the First Nations Gazette. I also wanted to ask you a question, but not necessarily on the nature of your amendment. This is not the first time I have heard the suggestion of creating a list of first nations that could participate and those who could not.

Just like you, I have come to the conclusion that in a context where everything can change quickly—some first nations that would not want to resort to the institutions provided for in Bill C-19 today might want to do so tomorrow morning— managing such a list is extremely difficult.

Secondly, as you said, that perpetuates the minister's power, in that it is still up to him to grant you or refuse you a status that would enable you to use the institutions.

My concern goes beyond that. Bill C-19 stipulates that section 83 of the Indian Act, which provides for land tax collection, would be replaced by the provisions in Bill C-19. If that is the case, it is no longer quite true that Bill C-19 has an optional character to it. If section 83 is eliminated and the provisions of Bill C-19 apply, that means that any time a first nation implements a tax measure, it will automatically be subject to the provisions of Bill C-19. In other words, this optional trait exists as long as the first nations do not introduce tax measures. But as soon as tax measures are implemented, the provisions of Bill C-19 apply.

I wonder whether, besides your amendment concerning the list and management of the list by institutions belonging to the first nations, it would not be a good idea to include a provision stipulating that despite the fact that section 83 of the Indian Act is gone and because the provisions of Bill C-19 would normally apply to first nations that introduce tax measures, it is possible, for the first nations, to resort to institutions other than those proposed in Bill C-19. Do you think such an amendment could satisfy the first nations that are less keen on Bill C-19?

[English]

Chief R. K. (Joe) Miskokomon: Our position is, first of all, we don't want to impose issues on first nations that are not prepared to pick them up. We recognize that in many instances this proposed bill will likely not affect many first nations in terms of their ability to access property tax, but we have the ability to provide a service, a service in terms of giving financial advice and fiscal management of some resources, if in fact they so choose.

It's accurate that clause 83 will be replaced. Recognizing that, we're caught in a very difficult position: Do we stay with status quo, or do we attempt to build institutions that would recognize all the things I have previously mentioned?

À (1000)

[Translation]

Mr. Yvan Loubier: Excuse me for interrupting, Chief Miskokomon. I was not talking about maintaining the status quo. If section 83 of the Indian Act disappears, the first nations who do not want to automatically be subject to the institutions in Bill C-19 must be given the option of having other institutions, if Bill C-19 really is to be optional. In that case, we could talk about choices for the first nations.

I am not talking about the status quo. If a first nation introduces tax measures, it can choose institutions other than those in Bill C-19. That is not the status quo; we would be taking into account their ways of doing things, their customs, their traditions, their method of governance. I presume you would not be opposed to that type of suggestion.

[English]

Chief R. K. (Joe) Miskokomon: No, absolutely not.

If there are other proposals that other first nations wish to advance, by all means, that is their option; and if those ones fit them, by all means.

[Translation]

Mr. Yvan Loubier: Perfect. Thank you.

The Chair: Thank you, Mr. Loubier.

Mr. Godfrey.

[English]

Mr. John Godfrey (Don Valley West, Lib.): Thank you, Chief, for coming.

I would like to ask a few questions, because we're really trying to satisfy ourselves that we're getting both sides of the story. I wonder if you could deal with a few criticisms we've heard of the bill, if I just asked you the following things.

Some critics have suggested, in the first place, there's no evidence to show that the first nations, outside of a very few, support the proposed legislation. How many first nations do you think support this legislation?

Chief R. K. (Joe) Miskokomon: Well, let me restate that question, perhaps. I'm actually wondering how many first nations understand the proposed legislation. That would probably be the better question.

I think people become very defensive once they hear that taxation may be implemented by first nations. Everything stops at the word “taxation.” It automatically jumps then to the imposition of property tax against our own residents, to personal income tax, and to other forms of taxation. As I've heard other witnesses say, how do you tax or how do you get money from a stone?

That is not the idea of this bill, and I don't believe some people have represented this issue accurately.

Mr. John Godfrey: I just ask you, then--because I know we have only five minutes--about three other criticisms that have been made of the bill. The first one is that it offends the nation-to-nation relationship with the Crown; secondly, it violates the inherent right of first nations to self-government and self-determination as recognized by section 35; and thirdly, it's a municipal approach to first nations governance. So on those three things--nation-to-nation, inherent right to self-government, and municipal--what would you say to people who make those criticisms?

Chief R. K. (Joe) Miskokomon: I don't believe it violates. I believe it's an exercise of government. I believe when first nations people develop strategies and attempt to develop institutions for greater certainty, certainty within the business community....

As the honourable members know, when we try to borrow money, for example, or we try to gain investments in the community, there's always the question of certainty by the business community. I think this provides assurance to the business community that their investments are secure and safe.

We've tried for a number of years in my own community to attract industry and economic development. We cannot do it on the current fiscal transfer relation that we have with the federal government. It is completely inadequate, and we have no way other than that to generate dollars.

We recently put in a sewer that we financed ourselves, from the first nation. It cost us over $1 million to service 15 homes, and we were only able to finance it on a seven-year bank rate. Consequently, we have to squeeze our own internal budgets to make up approximately $150,000 a year to service those homes--which do need servicing.

When you think about that and then compare that to trying to attract industry--heavy industry, commercial industry--into an area, those numbers increase exponentially, and consequently we cannot afford that.

So I believe it doesn't affect the nation-to-nation relations. As a matter of fact, I think it complements, because now we are exercising, as a nation, an inherent right to participate in governance and enact governance as we see fit, and to create economic opportunities within our community.

À (1005)

Mr. John Godfrey: Thank you very much.

The Chair: Thank you very much.

We have two minutes for closing remarks.

Chief R. K. (Joe) Miskokomon: I would simply like to say to the members that I believe that while there is this great debate that continues on among the 635 first nations of Canada, obviously we are not all going to be in harmony with approaches. I believe our end results that we all think and envision and dream of are there. The approach and the path through the woods is different for each of us.

We have to have consideration to the opponents of this bill, and I would hope that at some point in time they too would advance initiatives that would secure their economic prosperity within their communities and regions.

With that again I say meegwetch. Thank you very much.

The Chair: Thank you very much. That was an excellent presentation.

I now invite, from the Chippewas of Georgina Island, Chief William McCue.

Welcome, Chief. I think everybody knows the routine now at this place. We have 30 minutes together. We invite you to make your presentation, which will be followed by questions from members.

Please proceed.

Chief William McCue (Chippewas of Georgina Island): I'd like to thank the committee once again for giving me the opportunity to appear before you. It was an honour to appear before this committee several years ago when we were passing Bill C-49, the land management act.

I'm the chief of the Chippewas of Georgina Island. It was the first community in Canada to pass a land code under the First Nations Land Management Act. I'm here to speak on the benefits of the land management act as well as how Bill C-19 would enhance our community's benefits for development.

Our community passed its land code in 1996. It is working very well for our community. It is helping us improve the way of life for our people.

I'm here to speak to you on the problem of scheduling. The First Nations Land Management Act, when it was originally applied, was to be optional legislation. But with pressure from the AFN and some first nations across Canada, we were forced to attach a schedule that limited it to 14 communities. Our experience in the land management act is excellent. Our experience in scheduling is very poor.

After the act was passed, more communities across Canada wanted to join. They had seen the benefits of having legislation that enabled their communities to move forward in areas of self-government. Some communities have been waiting now for five years to join. I guess it's the old adage that if you see somebody who has something and it's working well, you want it, and that has been the case for us. I'm very glad we were one of the first ones through the door to have this legislation.

It was only a few months ago that the minister opened up the act to allow more communities to come in. We have 18 new communities that have come in, but we have over 70 at the door waiting to join the legislation. The process to be added as a signatory to the framework agreement and then to be added to the act is long and cumbersome. It involves the community making a decision to proceed in passing a band council resolution, our first nation resolution. It involves consultations with the lands advisory board, and confirmation with Canada, the INAC bureaucracy, that they be added where issues such as costs are considered. This involves internal briefings and processes for approval before the minster's office and a technical amendment to the act.

Once the bureaucracy has been satisfied, the political process begins. This means cabinet time, and if it is not a priority, it can take months or years for communities to be added to the schedule. In our experience, with the support of government, it has taken many years to amend the schedule. An unsupportive government would of course take much longer.

À (1010)

In hindsight, we should never have agreed to a schedule. We have learned our lesson with schedules. I'm requesting that the committee consider this when they are going through the clause-by-clause study of the bill.

I'm not trying to force my will on any other communities across this nation. I respect the autonomy of each first nation in Canada, and I agree that first nations across Canada should respect the autonomy of those who want to move forward.

I believe that those who have the vision to move ahead with their communities and aren't afraid to take the chance should be allowed to take that chance. Those who are sitting on the fence and watching should not be locked out because of the fact that some are moving forward. They should have that option. As I said, I had communities come to me shortly after our code was passed saying “How can I get into this?” I said “Where were you when we needed support?”

This is something that I believe will be beneficial. Bill C-19 will work hand-in-hand with the First Nations Land Management Act. It's not only about the taxation regime, which will mean economic benefits for our community. The statistics will also help our communities.

The allowance for borrowing for infrastructure will go a long way to help develop our communities that have land codes and want to open up our first nations for cottage development. I have some 500 cottages on my first nation. This is a benefit that can be enhanced with Bill C-19, because our community is presently in the process of looking at the taxation area.

I'd like to take this opportunity once again to thank the committee for its time. As I said, it's good to be back in front of the committee. I appreciated the support we had with Bill C-49, and I thank the committee for its time today.

À (1015)

The Chair: Thank you very much, Chief.

I'm almost tempted to do a friendly survey in the room. I spent so many days and nights with everybody in the room opposing a piece of legislation, I'm wondering, if I'd ask those who are in favour of this piece of legislation to raise their hands, would I know that everybody here is in favour? I think the ones who are opposing have left us. I may not be correct, but it's probably an encouraging situation for us who would like to see this done before summer recess.

Mr. Godfrey.

Mr. John Godfrey: Thank you, Chief, for coming.

I guess my first question, because you started with the whole scheduling issue, is what do you think motivates the people who propose this? As you've described the unfortunate experience with land claims or the land settlement, what do you think motivates people to still propose scheduling based on the unfortunate experience you've described?

Chief William McCue: I think it's the fear of the government itself, the fear of not knowing what is going to happen. But I have seen the benefits of what has happened when you take that chance and you move forward in legislation for your community, and doing what's best for your community. Attaching a schedule to this act, I believe, would deter or hurt those who are sitting on the fence.

There's a lot of misconception or misinterpretation of the bill and how it could help people, and that happened with us in Bill C-49. There was a lot of misinterpretation of how the bill was going to be enacted. And once people saw how that was enacted, they wanted the benefits of that, and they couldn't get them. I believe that is the same kind of misinterpretation of scheduling in this bill.

Mr. John Godfrey: So scheduling actually works against the best interests of those who would join.

I guess my final question to you is simply to ask if you could give us a bit of a sense of Georgina Island and what kinds of things you need more financial authority for, how your past experience has worked by moving forward, and what you expect in the future if this legislation gets passed.

À (1020)

Chief William McCue: I can give you one scenario that is relevant right now for our community. We are looking at building an arena. Our community is an island community in Lake Simcoe, and although we're 50 miles north of Toronto, we're an isolated community. We have to travel by boat to get to our community, and during the winter months we travel across the ice. We have lost quite a few of our members to that lake over a period of time.

Now we have the opportunity to build an ice hockey rink, an arena for our first nation. But we don't have all the financing in place. We do have lease money, as I said, and we do have roughly 500 cottagers who are in our community. Our community members all have children who play hockey or take part in sports, but unfortunately the arena is on the mainland, and times for taking your children across are 5 a.m. or 6 a.m. As anyone knows who has children in sports, kids start at 6 or 7 in the morning for hockey, and there's no safe means of transportation at that time. That is why we wanted to build an arena in our community.

If we see the opportunity here to be able to borrow against our taxation dollars, so we can construct this arena and do a service for our community, that would help us. It would be one of the benefits.

Also, we have infrastructure in the roads area that we are doing, but we are using our own funding. We're borrowing from the bank and then paying back over a number of years. That could be better developed through infrastructure and borrowing off our management board, because we had to wait several years before the bank would actually agree to loan us the money, even though we had a substantial surplus in our audits. We were one of the communities in Canada that had a positive cashflow in our audits.

The Chair: Thank you very much.

Thank you, Mr. Godfrey.

Mr. Vellacott, five minutes.

Mr. Maurice Vellacott: Thank you.

Do you anticipate being in under the FNFA very quickly, given the kind of fiscal track record and prudent fiscal management you have? The recommendation was that the members would be required by legislation to demonstrate a five-year history in successfully collecting property taxes, or other comparable indications of fiscal restraint. So do you think you will be applying to the FNFA, and be under it really quickly?

Chief William McCue: It is my hope for our community.

As I said, we are presently developing a taxation bylaw. We charge our cottagers user fees, and through our own financial management over the past five years we have had surpluses within our audits.

I should hope that we would be applying to the board to be in the FNFA once it is up and established.

Mr. Maurice Vellacott: Right.

For how many years have you been successfully collecting property tax revenues? How long have you been collecting property tax revenues?

Chief William McCue: We haven't been collecting them.

Mr. Maurice Vellacott: You haven't?

Chief William McCue: We do collect tax revenues from the utilities, which I would say we have collected for seven years. We are presently doing a taxation bylaw to collect from our cottage holders in the community.

Mr. Maurice Vellacott: So from your discussions with the present corporation, is it your understanding that this suggested requirement of a five-year track record in collecting property tax revenues would not apply to a lot of the bands, that they would be in sooner than that, or that it would not be a requirement?

À (1025)

Chief William McCue: I couldn't speak on that aspect of the bill.

As I said, I could speak on my own behalf, because of our track record and the fact that we have been in the taxation business for about seven years now collecting taxes from utilities. I can speak only to the benefits of that to Georgina Island.

Mr. Maurice Vellacott: The recommendation of RBC Capital Markets was that it be on property tax revenues, not necessarily utilities, and so on. I don't know where they will all go with that one.

You are obviously optimistic that you will be getting in right away and will not have a five-year wait, because you are now drawing up your tax regime. So you want to be in, and you think you'll be in, and you have a reasonable belief that you will be in right away, with no five-year wait.

Chief William McCue: I would hope so.

I cannot speak for the authority, but one of the requirements was sound financial management, which we have had in the clear surplus in our audits over the past seven years.

Having said that we have sound financial management, I would say, yes, we would be allowed into the borrowing fund.

Mr. Maurice Vellacott: I appreciate what you are saying, William.

In a lot of situations, people can have reasonably sound financial management, but if they don't have the collateral in other ways, that management doesn't necessarily rate in terms of getting money and lending of dollars to them, and so on.

I wish you well, and I appreciate your comments. I wasn't here for all of them, but I gather that you were not approving of a scheduling or listing. We will read or follow that carefully in the Hansard record as well.

Thank you.

The Chair: Mr. Binet.

[Translation]

Mr. Gérard Binet: Do I have the floor?

I would like to make a few comments, mostly with regard to the previous speaker, Mr. Miskokomon. When I was asked to be part of the Standing Committee on Aboriginal and Northern Affairs and Natural Resources, some former committee members told me I was going to hear a lot about the past. This morning, I am hearing about the future. That is very pleasant and very refreshing for my ears.

I would like to make another comment. I lost my father young and I have often listened to the advice of people older than myself. Imagine, for example, that you were on a motor boat. You look ahead of you, the scenery is beautiful. Occasionally, it is good to look behind you to see which direction you are headed in. The most important thing is to look forward, and that is what I heard most today.

We spoke about options. I can tell you that after choosing air conditioning for my car, I can no longer live without it. I am sure that Bill C-19 represents an option that other communities will not be able to live without in the future.

Thank you.

[English]

The Chair: Ms. Karetak-Lindell.

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

It's very nice to see you, Chief. I'm very honoured to have been to your community and seen some of the work you have done.

You talked a little bit about the cumbersome procedure for people waiting at the door with the First Nations Land Management Act, but I know there were some communities that also asked to be taken off that list, and I believe that has created another cumbersome administrative procedure for people.

On a previous bill, we also kept hearing that we have to take more things away from being controlled by the government, or Governor in Council, and give them to the people. Yet with the scheduling proponents, they want to give something back to the government, give it back to Governor in Council, so I'm getting a little confused.

At which times do you want your own control over things and at which times do you want the government to take it back? I want to get your comment on that.

À (1030)

Chief William McCue: I think those who requested coming off the Bill C-49 list did so because their community had not voted in favour of it, after having gone through the whole process. They had to be taken off the community list.

As for wanting to be on it, and when to decide to take advantage or not to take advantage of it, the communities should have that option. But if there is a gatekeeper at the door, then that option is not there for them; they would not be able to take advantage of the benefits other communities would have within this country.

I'm very glad you had the opportunity to visit my community, but I apologize for not being there when you were there. I was probably here. I think that was when we were doing Bill C-49.

As a general rule, first nations want more involvement at the chief and council level, and less federal government involvement rather than more—at times.

My community is presently involved in negotiating a self-government agreement, along with several other communities. There are areas that require government involvement, such as under the Constitution and federal laws, but there are areas in which communities require more grassroots development. Our code, or gchi'naaknigewin, which is the word for “constitution” in our language, was developed by our elders, our youth, our women, and our grassroots membership. Those are the times that communities need the involvement of their people--when it reflects on their benefit, those are the times they do need greater capabilities for making their own laws.

The Chair: Chief, thank you very much. That was very informative and very helpful.

Our colleagues have said that they will look at the blues, because there is an issue you addressed that will be very helpful to at least one of my colleagues.

Thank you very much.

We will now go to our Vancouver videoconference. We welcome, from the British Columbia Civil Liberties Association, the executive director, Murray Mollard.

Welcome. We invite you to make your presentation, and hopefully it will be followed by questions. Please proceed.

Mr. Murray Mollard (Executive Director, British Columbia Civil Liberties Association): Thank you.

I'll give you a brief introduction to the B.C. Civil Liberties Association.

We're in our 40th year as an organization. We're celebrating our 40th year this year.

We have a wide mandate, but essentially it is to protect the rights and freedoms of British Columbians and Canadians with respect to activities by government, activities by private institutions, etc. We work on a variety of issues--freedom of expression, freedom of association, religion, privacy, anti-discrimination, and of course principles of democracy, which is what I'm going to talk about today--that are important to the association.

I thank you for the opportunity to speak. Of course it was arranged with some haste, and I'll be interested in hearing from some of the members, perhaps the chair, a little bit of an explanation as to why this was arranged so hastily. I may have some comments about that. I think it touches on some of the themes I have to present this morning.

I want to start out by making very clear what the B.C. Civil Liberties Association's stance has been with respect to aboriginal self-government. We are very much supporters of the concept of aboriginal self-government. We supported the Nisga'a Treaty. We opposed the referendum on aboriginal rights and treaty-making in British Columbia. We are supportive of the ability of first nation communities to impose taxes as a means for economic development.

What is clear with respect to aboriginal self-government is that without some economic authority and some economic means to develop their communities, the principle of self-government and the ability to govern their own matters is somewhat meaningless. I think those are important points to make with respect to our association's viewpoint on that.

To move to the major theme I want to present to the committee today, as we move to more and more realization of the concept of self-government within treaties and within local band communities, there are issues that I think need to be faced with respect to the rights of non-aboriginal people to participate in decision-making where there are matters that directly and significantly affect them.

This issue really came before us in the context of the heated controversy at Musqueam. As we started to look at the facts there--and quite frankly, we're no expert on the facts there--we decided it was important to step back and ask some larger questions about the principles that are going on here, whether it be with respect to taxation authority, whether it be with respect to authority to manage and develop lands, or all the sorts of questions that governments must take into account and make rules about when they actually govern.

It's not only in the context of band councils under the Indian Act, of course, but with respect to aboriginal jurisdictions that are created through treaty-making as well.

So what I want to do, and perhaps someone there can confirm whether or not this committee.... As part of my request to appear before the committee, I sent in a position paper we prepared in December 2000 called “Democracy and Aboriginal Self-Government: Considering the Rights of Non-Aboriginal Residents in First Nation Jurisdictions”. I'll be referring to that, and I hope the committee members have our paper. If you do not, I'd like to know that so I can send it to you as soon as I've finished meeting with you this morning.

Let me take you to that position paper, and then I'll go through some of the major principles. Perhaps the chair can tell me whether the members have our position paper.

À (1035)

The Chair: I'll ask the clerk if we received it.

It has been received but not distributed. It's being translated.

Mr. Murray Mollard: All right. I would ask that it be distributed as soon as possible. I understand there may be some time limitations here, and we'll maybe have a chance to talk about that, but let me go through it for you in a very cursory way.

The second principle in the paper states: “People who live in aboriginal jurisdictions, but are not band members, have no right to membership in the aboriginal political community”. That is, they do not have the same types of claims that, obviously, the aboriginal people themselves have with respect to self-government. In other words, it is not one person, one vote--which would be the norm in the larger Canadian community--because of the very unique jurisdiction we are creating and that exists and to which there is a legitimate claim within aboriginal communities.

À (1040)

I wanted to convey that non-aboriginal people who aren't members of the aboriginal community have no right to membership within the aboriginal political community per se. In other words, there is no right to one person, one vote, as there would be in the larger Canadian political community context.

However, we do say that residents of aboriginal jurisdictions have a right to participate meaningfully in decision-making regarding matters that significantly and directly affect them. We say that Canadian citizens who are not members of an Indian band or first nation have a right to participate in government decisions that affect them in aboriginal jurisdictions because they retain some significant degree, though it may be necessarily attenuated in aboriginal jurisdictions, of their sovereign status throughout Canada.

The right of citizens to participate meaningfully in decision-making is a fundamental characteristic of Canada's democracy. I want to elaborate to some extent on that point.

First of all, for our association, each and every individual within Canada, regardless of being aboriginal or non-aboriginal, is collectively but individually a sovereign citizen. In other words, you, our elected representatives, are but the means by which we, as individual Canadians, as sovereign citizens, are in a sense ruling ourselves. We rule ourselves. That's the principle in a democracy. We have various means by which we do that, but ultimately, those are simply methods by which we give meaning to the wishes and the voices of individual Canadians.

Let me elaborate on this point about what we claim is a right for non-aboriginal people to participate meaningfully in decision-making that significantly and directly affects them.

I recognize that for aboriginal people--and I've had the opportunity to, for example, meet with the Indian Taxation Advisory Board and some of the chiefs involved with that organization--the claim we are making here is a bit of an anathema to them, and they haven't yet really realized, I think, the true concept of self-government. I am coming before you and before them and saying that once you do actually obtain such authority, you have to actually share it with non-aboriginal people. This may be a bit galling to them, given that they haven't by any means achieved their goals, but I think it's something that has to be put before them squarely now to consider, as any government must consider, how to include the interests of people they govern over. So let me elaborate how we justify our claim that non-aboriginal people have a right to participate meaningfully in governance, even in aboriginal jurisdictions.

We consider two justifications for the claim. First of all, one concept depends on fairness. As people subject to rules, non-aboriginal people should be able to participate in those decisions that affect them, because giving them a chance to participate will promote greater social harmony. We rejected this argument because it really relies more on the wisdom of permitting non-aboriginal participation than on any sort of principle claim. Furthermore, fairness only really requires due process protections, such as the right to make submissions, the right to some sort of appeal mechanism, rather than the right to sit at a table where decisions are actually made and to be participating fully in those decisions.

We prefer a stronger justification that begins with the premise that non-aboriginal and aboriginal people alike, despite differences, share common citizenship in a larger political community, that is, Canada. Aboriginal self-government, obviously, though claims to it predate Canadian sovereignty, really remains part of and subject to Canada's constitutional structure. We recognize that as a democracy, Canada and all Canadians, whatever our ancestry or heritage, are self-governing people.

There are a variety of sources that reflect this justification. I think the Charter of Rights and Freedoms enshrines a variety of democratic rights that give life to the concept of us individually and collectively as a self-governing people.

À (1045)

The Supreme Court of Canada, in the reference regarding the secession of Quebec, stated the values and principles of free and democratic society, including, among other things, faith in social and political institutions that enhance the participation of individuals and groups in society.

I want to also point out that even the Royal Commission on Aboriginal Peoples recommended that the interests of non-aboriginal people be respected when establishing first nation governments, by permitting participation in governance. I'll take you to a quote from the royal commission. Recommendation 2.3.16 states:

When Aboriginal people choose to establish nation governments,(a)The rights and interests of residents on the nation’s territory who are not citizens or members of the nation be protected.(b)That such protection take the form of representation in the decision-making structures and processes of the nation.

It is not merely the ability to make representation “to” a governing structure, but actually representation “in”. That's from the royal commission.

I want to also refer to comments by commissioners Dussault and Erasmus to this House of Commons Standing Committee on Aboriginal Affairs that help to explain this position.

I believe it was Mr. Dussault who said this:

On aboriginal lands, if there are to be extended lands, as Georges said, people are marrying out in the proportion of 50%, but in addition there are likely to be more and more non-aboriginal people living on those lands.

I think that's the reality, to some extent, for economic development.

We're very clear that these people, even with a nation-based model of self-government, should be given a right of representation, of influence, if they are going to be taxed and subjected to the laws on these territories.

So the royal commission was very clear about including the interests, in a real and meaningul way, of non-aboriginal people in decision-making.

It's also worth noting that the Nisga'a Treaty itself enshrines the principle of participation, at least with respect to Nisga'a public institutions—for example, schools, health, or police boards—if they are established.

In sum, the British Columbia Civil Liberties Association believes that self-governing aboriginal authorities must also respect the rights of minorities within their jurisdictions. That's the starting theme I want to come to this committee with today; then I'll touch on the relevance of these points to the bill you are considering now.

I will say, though, that we recognize there's a very serious conundrum here where non-aboriginal people actually outnumber aboriginal people within a jurisdiction. If you take Musqueam, for example, or you take West Bank near Kelowna, for another example, it's not possible to have the normal notion of democratic principles—i.e., one person, one vote—respected. That is because to respect them would essentially undermine the ability of the aboriginal community to govern itself.

What the reality will have to be is that there be some measure of asymmetrical power-sharing, such that you can preserve the aboriginal community's ability to overrule or outweigh the non-aboriginal interests. There are objections to that, as to its somehow being not meaningful for non-aboriginal people, but that's just not the fact.

We know that minority parties throughout democratic history in Canada can have a significant influence on the outcome of laws and rules. We've seen that in your own Parliament in Ottawa. We recognize that there is going to have to be some asymmetrical representation for non-aboriginal people in order that they don't outweigh the aboriginal ability to govern themselves.

I want to go now to the act itself. I have to admit I have a prior draft version, and I'm not actually certain whether the bill that's been introduced is reflective of it, so you'll have to stop me if I'm quoting clauses that don't exist or have been amended after the bill was introduced. I apologize for this, but partly it has been in the haste of trying to prepare for this in the less than half-day I had. I'm dealing with a bill that was in a sense a draft bill, but that's what I'm going to deal with, so let's go to that.

À (1050)

What I'm looking for in the First Nations Fiscal and Statistical Management Act is some elucidation and some bringing to life of the principles I have just enunciated; that is, that there is an opportunity for meaningful participation by non-aboriginal people with respect, in this context, to taxation authority, and in two ways. One is with respect to rules regarding the creation of assessment rules, tax-rate rules, etc.—the collection side of taxes, in other words—but also on the expenditure side; that is, after moneys have been collected from various residents subject to the band—

The Chair: Mr. Mollard, the bill doesn't address those issues. The bill doesn't address the issues you just mentioned. Could we just go to questions? There are only ten minutes left, and members would like to ask you questions.

Mr. Murray Mollard: Sure, go ahead. Maybe that's my problem, that there really isn't enough inclusion of the representations of non-aboriginal people.

I'd be happy to answer questions.

The Chair: Mr. Godfrey.

Mr. John Godfrey: Mr. Mollard, just to make sure we're all literally operating on the same page, I don't know whether what you have before you as the text—our says “First reading, December 2, 2002”—is the same version.

Mr. Murray Mollard: I don't have that.

Mr. John Godfrey: Let me just go to the principles you raised, because I think they're important ones.

À (1055)

Mr. Murray Mollard: Sure.

Mr. John Godfrey: As I understand it, what we're dealing with is different classes of rights for people who pay property tax, classes that are based on their residency. By analogy, I have a house in Nova Scotia, but I don't live in Nova Scotia. I can't vote municipally, I can't vote provincially, I can't vote federally, but I do pay taxes and I have the right to appeal my taxes. The whole issue, I guess, for me as a person who pays property tax on that house in Nova Scotia is whether there is due process. In some way, are my interests as a property owner and a taxpayer represented, so that I can feel I can get my voice felt? The same would be true, by the way.... I have German neighbours who aren't even Canadian citizens and who are in the same category—who pay taxes, and so on.

Based on the experience we've had with ITAB we have incorporated into Bill C-17 the following things: a statement of purpose, a provision that would allow first nations to enact bylaws addressing taxpayer interests, and the representation for taxpayer interests on the commission itself—this is the new First Nations Tax Commission. If that's the case, and it is the case, do you think those particular provisions represent a significant advance on the current situation and that generally speaking taxpayers would be sufficiently represented--that there would be due process, just as would be the case for me with my house in Nova Scotia, or as any other non-resident taxpayer has some method to defend himself?

Mr. Murray Mollard: Sure, let me answer that.

I think it's important to note, and I tried to make the distinction to you earlier, that there's a difference between due process--that is, the right to an appeal when you think you've been unfairly assessed for your taxes--and the actual creation of the rules about taxation and about how, for example, through creation of a budget, you're going to spend that money.

It's fair game for the local aboriginal communities to create some rules around residency requirements so that it's not just an absentee property owner who gets the actual, real ability to meaningfully participate in decision-making. Let's assume you were in Nova Scotia and actually did live there, that you were very much a part of that community and weren't just an absentee property owner. That's what I'm speaking to, I think: the ability for those people not merely to, as in this bill—at least the version I've read—have an opportunity to, for example, come before the council to make a submission, as I'm doing in a sense, but actually be at the table where you are and participate in the decision-making around those rules.

That's the fundamental distinction I'm making, and I don't think the bill goes nearly far enough in that way.

Mr. John Godfrey: Let me use another analogy. In Toronto there are a series of islands, and there are a number of people who are resident on those islands who been there for years and have long-term leases, but they don't own the land. Their rights are limited, because they knew when they went there that was the deal, that they would never own that land. Their rights are not as extensive as people who actually have total rights over their houses. The people there always knew where they were resident. Presumably they said, “Well, it's like living near an airport or anything else. This is a condition I accept, caveat emptor.” Why would they expect the conditions to change simply because they don't like them now?

Mr. Murray Mollard: I presume those leaseholders and indeed the people who don't own property in the municipal areas actually have the right to vote—albeit with some limitations on residency—and the right to stand for elected office. In other words, they have a right to participate meaningfully in the decision-making; they're not excluded from the political decision-making community.

I think that's what we're talking about here. When we're creating aboriginal jurisdictions, we want to be very careful about simply creating a whole new series of structures that exempt fundamental principles of democratic participation. That's what I think we're talking about; it's not just a matter of caveat emptor.

Mr. John Godfrey: I guess if you're a foreign resident with property in Toronto or any part of Canada you don't have full participation in all of the things that might affect the way the money gets spent or gets collected, but you understand that, because you're not a citizen of that particular community. So—

Mr. Murray Mollard: Yes, I agree with you, but aboriginal communities are still part of Canada, and indeed are subject to all constitutional limitations and rights in Canada. We are all Canadians; that's the starting point and principle I adhere to.

If you're interested in reading a fairly elaborated version of our position paper, you're right that residency in and of itself doesn't give right to a political claim for participation. Take, for example, landed immigrants, who can live here for years but can't vote. So I take your point.

But the starting point is the realization that, number one, we are all Canadians. So unless you're truly contemplating creating an aboriginal jurisdiction that is absolutely foreign in nature to Canada, then I think your argument holds weight. But clearly it's not. It's still subject to the charter, as the creation of a treaty among different levels of government. So I think that's the distinction.

Á (1100)

The Chair: Thank you very much.

We invite you to make your closing remarks.

Mr. Murray Mollard: I was going to go through the bill, but quite frankly, even the draft of the bill I have—which is probably not much different, if at all, from your bill—is deficient in diverging significantly from the principle that Canadians, regardless of where they live in Canada, have an opportunity to participate meaningfully in decision-making that directly and significantly affects them. It's not enough to simply have due process with respect to tax appeals, and it's not enough to be given notice about a bylaw. There must be some more significant accommodation for meaningful participation. Indeed, you'll see that in the Nisga'a Treaty, for example, and you'll see in the Royal Commission on Aboriginal Peoples the recognition by commissioners that those principles were included.

Of course, all of this is subject to the realization that meaningful participation by non-aboriginal people should not undermine or outweigh the ability of aboriginal communities to ultimately be the masters in their own house.

Thank you.

The Chair: Thank you very much.

Now we'll go from Vancouver to Victoria.

We welcome, from the Municipal Finance Authority of British Columbia, the executive director, Steve Berna; and the chair and mayor, Frank Leonard.

Welcome. We invite you to make your presentation, which will hopefully be followed by questions. Please proceed.

Mr. Frank Leonard (Chair, Municipal Finance Authority of British Columbia): Good morning. I'm Frank Leonard, Mayor of Saanich and chair of the Municipal Finance Authority of British Columbia. I chair a board of trustees of 10 elected officials in a board of 35 in total, who represent communities throughout the entire province.

We operate as a collective or cooperative in which all municipalities in British Columbia participate. We act as a bank or credit union for them in terms of investments and borrowing. We find that it has been a tremendous advantage to us in keeping our costs down. We borrow with the strength of our triple-A credit rating, which we've earned over a period of years. It gives us quite a bit of clout in the marketplace. Whether the community is 500 people or 500,000 people, it benefits from the strength of our financial credit rating and power in the market.

We have been an adviser to the First Nations Finance Authority for many years, or since its inception. We pride ourselves as perhaps a bit of a mentor to the organization, giving them advice along the way and acting as a consultant to them as they've worked through to this point in time. Should the legislation introduced by you folks pass, we have agreed to again act as a consultant to them.

I'll let Steve Berna, our executive director, outline for you what sorts of services they would require, and what we could provide them as a consultant.

Mr. Steve Berna (Executive Director, Municipal Finance Authority of British Columbia): Good morning. My name is Steve Berna, and I'm the executive director of the Municipal Finance Authority of B.C.

The First Nations Finance Authority is really tailored after our model—albeit changing it a little bit for their own special circumstances and legislative needs. We see our own role—which we've been playing for about ten years—not only in the area of the back office, but also in providing support, but not decision-making. Decision-making will be solely for the First Nations Finance Authority's board of directors or staff. So we're in the back a little bit, but at the same time we provide a service.

The most prominent position of the FNFA will be in the area of raising capital for projects, whether they be roads, sewer, or water. Again, we will provide a consultation service; they can bounce ideas off us, but the decision-making is theirs. We will do the accounting for them, because they do not have staff right now. We'll also do the administration, the collection of moneys, the issuing of cheques on the bonds to the different first nations, and also look after the investments. The investments will come along, and will build up to pay off the debt over time. It is something we've been doing for 33 years. There are also a couple of special funds they'll set up to protect and enhance their credit rating, which we'll also administer.

Probably the most important one at the start is software, which is very expensive, as you're probably aware. Our system is designed to parallel the First Nations Finance Authority's. So right now, we'll just make a copy of our software, transfer it onto our home system in their name, and run it that way.

So we provide them with back-office support, consultation in some regards, and administrative services in regard to investments and invoicing.

Á (1105)

Mr. Frank Leonard: We were going to stop there, and thought that it might be more helpful to answer questions. We're certainly open to anything you'd like to pose to us.

The Chair: Thank you very much.

Do you have a question, Mr. Dromisky?

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): Could you give us some idea of a membership in British Columbia that belongs to this administrative unit?

Mr. Frank Leonard: Every local government in British Columbia is a member. The municipalities come together in what's known here in British Columbia as regional districts, and then each regional district becomes a member of our board, which makes up 35. The larger regional districts of Greater Vancouver and Greater Victoria have more than one representative. So that's why we have a board of 35, and then from the 35 we elect 10 trustees.

Every municipality, regional district, town, and village uses the Municipal Finance Authority for their borrowing requirements. The City of Vancouver does do a small amount of borrowing on their own in order to keep their own triple-A credit rating, which is a sort of prestige item for a major city like Vancouver. But again, most of their borrowing goes to the regional district for sewer and water and other infrastructure, so we do that for them. We also do the borrowing for TransLink, the transit and SkyTrain system in Greater Vancouver. We borrow for their emergency communications, called ECOM.

We do the borrowing for special agencies or companies that are being set up now by municipalities. We're their bank and finance company.

Mr. Steve Berna: In order to understand why B.C. is a little different.... If you don't live in B.C., if you live in another province, you probably think, why do I not hear this in my own province? In the late 1960s, B.C.'s municipalities were having real problems raising money at decent interest rates for their capital projects. So they approached the Province of B.C. and asked if they could borrow as part of the government. The B.C. government said at that time they did not want the municipal debt on their books and told them to go do their own thing.

Their own thing in 1971 was that all of them signed a document that said they would work together and create their own bond bank--which is us--to do the capital financing for them. So when you hear about this thing, I think it's a little different in B.C. It's different because politically, in 1971, municipalities made a decision.

Ontario's municipalities made a decision to work separately, so they're different from us. Alberta's provincial government agreed the municipalities could borrow through the province, so they're a little bit different, too.

So we're different for a reason, but it's worked for 33 years, and we've had a triple-A credit rating for 23 of those 33.

Mr. Stan Dromisky: Now, clarification is required here. Are the first nations communities part of this network you're talking about?

Mr. Frank Leonard: No, they are not. They're a stand-alone entity, and we have simply acted as a mentor or adviser to them.

Mr. Steve Berna: Ten years ago, our first step in this process was to get first nations to start working together. Working together is never easy, because you have positions of trust and a history of individuality that you have to overcome.

So we opened up one of our voluntary programs called the pooled investment funds, or mutual funds for investments. At that time we were partnering with the first nations for them to be able to come in and use these pools. The investment opportunities were such that the management costs were very low, so the return you got on your money was better than you could get individually.

So for ten years we've been building up a trust of having them work together, but that's the only area we tie into right now. It's voluntary. Debt borrowing is not through us. Leasing is not through us. It's strictly investments right now.

What we're talking about is copying our model, which as I said has had a triple-A since 1980, and tailoring it to the needs of the first nations right now.

Á (1110)

Mr. Stan Dromisky: So what you're really telling me is you're providing consultancy services and guidance and information, educating individuals from first nations groups who are interested in this model and have specific goals they're hoping to achieve.

Can you tell me, from your experience and your relationship with specific first nations or first nations in general, what level of success they have been able to achieve or claim or...? Well, not really to achieve, but what is your assessment of what they are doing with the first nations?

Mr. Steve Berna: B.C.'s first nations are extremely well organized. You probably can't say all of them are, but there's a large handful out there already starting to do partnerships with municipalities in the way of sewer or water projects. The Kelowna area is a really good example of that. There is pent-up demand, because when you can't have economies of scale on projects--in other words, you're borrowing one year at a time--you can never complete projects that are really economically based. It's not like starting a project and completing the whole thing.

What we're seeing right now is B.C.'s municipalities are starting to partner with the first nations. One of our regional districts, which is a geographical area, has just admitted a first nation as a member. It's the first time I've heard of that, and it's starting to grow.

When you take a look at the first nations we're talking about that will make up the First Nations Finance Authority, as I said, they're extremely well run administratively. Also, they're collecting property taxes from individuals who have leased houses on their land. The partnering for the investments was a first stage.

Probably the best thing you can say is bankers are relatively risk averse, and I don't think anybody will argue with that, but when you take a look at the interest and the expressions of desire from the bankers to become what you would call the buyers of the debt of the First Nations Finance Authority, that's probably a good indication that this is a good idea, because if the bankers didn't step up to the plate and say they're interested in participating, you probably would sit back and ask what's wrong with this. But the bankers are lined up to do this, and when a banker lines up to do it, they buy the debt. They guarantee a price to the first nations, and then the risk of selling it is strictly the banker's. So if the bankers are willing to take that risk, they have done their homework and are pretty assured that this is going to fly.

Mr. Stan Dromisky: We're quite aware there is very strong support among the first nations people in British Columbia for Bill C-19. Can you give us any guidance regarding this bill, where it can be improved, for instance, or any weaknesses within it that you have detected in light of your experiences and the processes that are involved in your province?

Mr. Frank Leonard: What works for us is the relationship among municipality and regional districts. Mayors like myself carry the credit rating on our shoulders, we're so proud of it, and we know it works because we work together. We're as strong as each of us together as a group, and when one of our members is having a bit of trouble--and there have been resource towns in British Columbia that have had some challenges--we know we need to help them out. We've had Bull Rivers and Tumbler Ridges, and we've had to help them restructure their debt.

The point I'm making is that the legislation is modelled very much after our model. What makes it really strong is the camaraderie and commitment we have as a group to make it work and to make sure the moneys stay to our benefit, not on the international market where somebody is making an excess profit off our borrowing needs.

Á (1115)

Mr. Steve Berna: First of all, in regard to weaknesses, I don't see any. I think this bill has been extremely well researched and written up.

There are two areas that really make it actually stronger than what we started off with in 1971. First, you have what's called a debt reserve fund. It's a fund of money stuck aside so that should a first nation not repay their debt--principal or interest--you pull moneys out of this fund to pay the bond holder. So the bond holder is never negatively impacted. We put 1% of our moneys aside right now. Bill C-19 is saying put 5% away. So right away the slush fund to protect the bond holders is that much stronger than what we have right now.

Secondly, when we started off, we let every municipality into the Municipal Finance Authority, and we started off with a single-A rating. We had from 252 people in the town of Silverton up to Greater Vancouver, which has over two million. So that gave us strength, but at the same time, it didn't pick the cream of the crop of all the municipalities.

The First Nations Finance Authority has benchmarks, and it's like a high jump. If you can get over that high jump as a bar, then you're admitted into the group. They're going to be picking basically the best-run, best-administered bands out there right now. We didn't have that choice. And I think that alone will stand them in good stead, because there's something that others have to shoot for to get into it, and the ones that do get into it are going to be the strongest ones.

The Chair: Thank you, Mr. Dromisky.

Ms. Karetak-Lindell.

Ms. Nancy Karetak-Lindell: Thank you.

Thank you for your intervention.

In some previous presentations we were told it wouldn't really mean that much to very small communities, because they didn't feel this was the avenue they could use to leverage more funds.

The other comment we heard was that this was not the way to go for the communities. They could do much better, and Bay Street would not be interested in these types of ventures.

I'm just interested in your comments.

Mr. Frank Leonard: The MFA of B.C. has shared its model with other jurisdictions across the country--Ontario school boards, other municipalities, and in Quebec. Quite often they don't take up the offer because they like their independence, but you do pay a price for independence.

Our members as a group have decided we'd rather save money than each go to New York and make a presentation to the rating agencies, do our own bonds, and have that kind of activity. As a group we're borrowing at triple A; we're borrowing very close to the price the provinces themselves are paying for their borrowing. Our group pays less than some provinces, actually. That's because we work together.

If the small communities needed to borrow $1 million, there's no way they could borrow so close to.... We're at less than 6% right now on long-term borrowing. So they take advantage of the larger municipalities. In Greater Vancouver, as a group, they carried some of the smaller ones in past years. Right now most of the borrowing is in Greater Vancouver, so they're taking advantage of the group as well.

I actually believe that some other organizations across the country--municipal mostly, and sometimes school boards--don't take advantage of it and they pay a price for their independence. They're paying more to borrow money because they want to be able to do their own presentations, write their own cheques, and make their own presentations. You give that up by being part of a group, but you can save a lot of money.

Mr. Steve Berna: To give you an example of the dollars we're talking about, it took us ten years to go from a single A to a triple A. When you hit the status of even double A or triple A, as you move up the benchmark.... Right now we are three notches above the largest bank in Canada, the Royal Bank, on the credit rating scale. That's fairly important, because when we lend money, whether it's to large or small, they all get the same rate, at below bank prime. Leasing right now is 1% below prime. Our other programs of lines of credit are 1.25% below prime.

You can't access that if you're a small band, but as Chairman Leonard said, you do give up some independence. There's a bit of a trade-off. But when you look at it numerically and you're below prime and the best you can get at a bank is prime, then something is going right.

Á (1120)

Ms. Nancy Karetak-Lindell: For a small community of say 600 people or 500 people--because I know some of the communities are very small--what would be the scenario for them, for example? Maybe that would help explain what it means in everyday language for communities. I represent small communities, and sometimes we get the general picture, but we don't know what it means to really come to the table and go through the process.

Mr. Steve Berna: It means a few things. As I said, our smallest community is 252 people, and we probably have a couple of dozen below 600. They get the same rates as the larger ones; there's no discrimination on rates.

The one thing you will really find as a small community is you do not have the technical expertise or the manpower to do a lot of analysis for yourself or look up information on financing. A good part of what staff does in the office is work with the smaller communities to come up with game plans—and we don't charge for this, it's just what we do—whether it's financing game plans, whether it's talking to the mayors and councils and explaining the programs and how they work and their benefits, whether it's acting in place of a consultant. Sometimes we'll sit there and look at their numbers and put them together for them so they have a five-year or ten-year plan, and that's not something they can usually do individually. When you take the numbers out of it and just look at what's offered, you're really sharing ideas also.

Some of the items we've put together for them are through travels around our province. About a third of my time is spent travelling on the road. When you do that, you soon learn what other towns, councils, and mayors have come up with as game plans when they are challenged, either economically or in other ways. When travelling, I'm not only listening to what's happening in their area, but I'm also sharing ideas.

So you have the support of a staff that's technically strong that you might not have yourself if you're small. But you really do get an interplay of ideas, and that means a whole lot when you come up with a game plan to try to meet challenges.

Mr. Frank Leonard: Maybe I could give you a specific case of a fire truck; that's quite common for small communities. Fire trucks cost in the hundreds of thousands of dollars now. A small community on their own would have to go into the marketplace, go to the bank or credit union and ask how much they would have to pay to borrow this money, and negotiate their own terms. In many cases they were paying double-digit interest rates.

Being part of our organization, a municipal council passes a bylaw that says “we're going to borrow this much money for a fire truck and we're going to take 15 years to pay it off”, and that's the only decision they have to make.

They then send the bylaw down to us, and twice a year when we go to market we pool it with all our other requests. So whether it's the tens of millions of dollars being spent in Greater Vancouver or tens of thousands of dollars in the small community, we pool it all together into one borrowing request and borrow it near the rates the provinces are paying.

That small community really only has to make the one decision to take advantage of a financial system that is as strong and big as anything else in Canada.

Mr. Steve Berna: Another example might be investment of moneys. A lot of first nations are coming into moneys, or have moneys already. I don't know how many of you have personal mutual funds, but if you take a look at what you're charged for managing your mutual funds, it ranges from 2.75% on equity funds to 0.5% on money market items. Working together, we have a group in Vancouver—Phillips, Hager & North, who are the dominant investment managers in B.C.—who charge us five one-hundredths of one percent for managing the moneys. So even the small communities get the expertise of the largest fund manager in B.C., but they get it at the cheapest rate possible.

Businesses look at opportunities. It's a lot easier to make one call in Victoria on the MFA than it is to make 210 calls to every municipality in B.C. It's really a portal that helps decrease costs on either investments or the debt side. Numerically speaking, costs come way down.

Á (1125)

The Chair: Continue.

Ms. Nancy Karetak-Lindell: Thank you very much. It helps us a lot when we're looking at a bill like this. We read through it, but it's sometimes difficult to transfer it to day-to-day life. I appreciate your doing that for us. Thank you.

A voice: You're very welcome.

The Chair: I would like to ask you what the percentage of loss is on bad debts or loans. I think for the banks it is around 2%; you will know what it is for the banks.

Mr. Steve Berna: In 33 years we've never had one, not one.

The Chair: I'm glad I asked the question.

Mr. Steve Berna: And it's not just because we're sitting back and they're such wonderful people; it goes to the checks and balances you put in place that make sure.

When you walk into a store, the first thing they do is check your Visa card or Mastercard to make sure you have the borrowing power to buy what you want to buy. Every municipality in B.C. has a Visa limit or borrowing power also when they produce their bylaws. If they're trying to exceed that limit, they are stopped.

You have in Bill C-19 the equivalent of what's called an inspector of municipalities, or a person who sits there and asks: “Can the municipality or first nation repay this? Do they have the borrowing room? And what do I know that's working in their area for or against them right now as advantages or challenges that may cause them to not be able to repay this?”

With the checks and balances we have right now—which are even stronger in the bill you see before you; ours were written 33 years ago, and if they were written today, maybe they'd be a little different—we've never had one default or even a late payment, in 33 years.

The Chair: That's very good news. After we get through with Bill C-19, I hope we can all get together and start another institution to allow us to buy insurance at reasonable rates. I think you people could do that. We donated billions of dollars to the Americans for the disaster of 9/11, but now we're paying again through our insurance premiums.

The people in this room and the people on videoconference are the ones who could put this together. I would certainly participate, after the bill I received this week for my insurance.

I want to thank you very much. It was very helpful. Certainly the committee will be able to remind other members of the committee, when they try to put some amendments that could be detrimental, of the good reasons why the bill should be respected the way it is, with amendments that are constructive but not political.

Thank you very much.

Mr. Steve Berna: Thanks very much for this opportunity.

Mr. Frank Leonard: It was our pleasure. Thank you.

The Chair: Thank you.

We will stay in Victoria for the next witness.

We're happy to welcome Professor Emeritus Robert Bish, from the University of Victoria.

As they open the door behind you we can see there is sunshine in B.C. It must be a beautiful day. It's 8:30 there.

Prof. Robert Bish (Professor Emeritus, University of Victoria): It's a nice morning, but we're predicting a little rain for this afternoon.

The Chair: Oh, well, we need some of that.

Welcome, Professor. We invite you to make your presentation. We have 30 minutes together, and hopefully you will allow some time for questions. Please proceed.

Prof. Robert Bish: Thank you for inviting me.

I've been retired now for five years, but I still do a little work. I'm an economist, and I've never done any work for first nations by marketing what I do, because I'm basically a local government specialist. I do local government finance. I wrote the book, Local Government in British Columbia, and did a real analysis of amalgamation issues for C.D. Howe.

I have been asked to do some things for first nations. It started way back in 1986, when, because of my local government finance skills, Manny Jules asked me to analyse how much revenue was coming off reserve lands in British Columbia through the taxation of leaseholds by non-native governments. That study was in 1986, and was part of the input to Bill C-115 that led to the taxation.

On other projects, in 1993 I wrote the proposal for the First Nations Finance Authority because I was firmly convinced we needed a co-op structure like our Municipal Finance Authority, rather than federal loan guarantees, if we were looking at more self-government in the future.

I also did a big project for the Donner Foundation, where we took Yukon natives to Alaska to learn about the results of the Alaska land claims settlement. It was really interesting. I don't know if you followed the Yukon land claims settlements, but some of those Yukon natives really blew a lot of money right away. We learned during that project that it's best if natives, rather than white consultants, tell other natives what to do.

I'm also occasionally called in to do seminars on how small governments work for treaties.

My aboriginal work is only about 10% of my academic work. I'm one of two Canadian economists in the who's who in economics that specializes in federalism and sub-national governments. My work on local government is translated into French, German, Italian, Japanese, and Chinese, and that's my real specialty.

As I look at this legislation, I think it's designed to solve two problems. The first problem is that first nations need to be able to get income from their leasehold lands, and that means development. Some of that development depends on infrastructure, which in the rest of the world would be financed by local government revenue sources, such as property taxes.

Some of that requires borrowing--debt finance. We have a couple of dilemmas with that. One is that most investors don't like leasehold lands. In North America, the only places where it's common to make big investments on leaseholds are Hawaii and Maryland. We just don't have that kind of structure.

So first nations have a real problem getting investors on their lands. The investors are looking at the long run, and they're really sensitive to stability, security, and being treated fairly, especially when they have no formal voice in the first nation government.

Issuance of debt is the same. It's not just the initial borrowing. There's a secondary market for debt instruments, so if you buy some debt for 20 years because you trust a first nation and something goes wrong in 10 years, you can't sell that. Bondholders don't like that either.

So we have problems where leasehold lands are sensitive, and the worst of it is that if any one of the first nations really screws up and makes a mess of it, that reputation affects investors on any other lands. That's why we need a regulatory structure to control taxation and debt issuance.

I'm firmly committed that the people with the biggest stake in that regulatory structure are the first nation landholders themselves. They're the ones who are going to either successfully lease their lands or not. They're the ones who have the best and biggest stake in being sure proper regulations are in place.

The solution to me is pretty obvious. The benefit of a federal system is that we have multiple governments within that system. We can define the jurisdiction; we can define a regulatory structure that spans a multiplicity of local units, or small units, and that's our regulatory structure. I think we're going to have some real problems if we get first nations going off on their own doing taxation and debts. Philosophically, I'm not opposed to the inherent rights movement, but in a practical sense, as a local government finance person, I worry about it.

Á (1130)

Many of you may not be aware that small governments can't get bond ratings; they can't borrow in the institutional market. When I did my study of the First Nations Finance Authority in 1993 for Westbank Band--that was a while ago--most municipalities in Ontario did not have, and could not get, a bond rating.

Other provinces solve that by the provincial government doing all the borrowing on their behalf. Others, like British Columbia, solve it with a co-op, like the Municipal Finance Authority.

So we need a regulatory agency. I don't think there's any question about it. The lack of a second level of aboriginal institutions to which an individual aboriginal person can appeal when they have a problem with their first nation government is ultimately essential for first nation self-government.

We have that. In our municipalities in British Columbia, if a citizen is unhappy, they can go to the Inspector of Municipalities. They can go to the ombudsman. They can go to the Judicial Review Procedure Act, which is a very inexpensive court process.

You must have accountability, and I think ultimately that accountability has to come from a second level in first nations. This legislation provides a start toward that in the finance area.

My second concern is that if we do get these treaty settlements that are coming, like in the Yukon, like in B.C.--we hope we'll get some more besides Nisga'a--and we have some first nations people go off on taxation, we have some risks for everybody else.

The First Nations Tax Commission and the First Nations Finance Authority are going to have to do two things. One, they're going to have to become a brand that investors understand, investors either in leasing land to build things or people who want to buy bonds. Two, there is a sentence in the legislation to propose education, and I'm convinced we really do need to create a community of tax policy experts who are first nation members in the first nation community. They will be the logical people, then, to go to when a first nation wants to enter into taxation, whether it's under the tax commission or under inherent self-government. So I think that's critical.

When we were in the Yukon, we took groups of 15 Yukoners to visit Alaskan native villages, both successes and failures. Believe me, since the Berger commission report so long ago, the second generation of enterprises run by Alaskan natives, not the ones who relied on white consultants, have been incredibly successful in many of the areas, especially southeast and for the Inuit. When those natives could explain to Yukoners what you did or did not do, the attention span was much greater. I just think we need to get, within the native community, tax policy experts.

We now have bands here in B.C. moving into sharing other revenues, besides the property tax. We have a commitment in some of the treaties that they give up tax immunity and move into tax sharing in other areas. I just think that's critical in the long run.

We have a problem in the universities. When I went to school in the 1960s we could actually study taxation and tax law, tax policy, and tax accounting all in the same classroom. Now, with specialization, that's divided between law schools, accounting programs, economics departments, public administration, and so on. We found that the best place to start. And several times now--five times, I guess--I've been asked by the Indian Taxation Advisory Board to offer courses in property taxation. We think the First Nations Tax Commission may be the best place to start that.

I think this legislation is a step on the way to true native self-government, where native organizations are responsible for themselves. They need economic development. What better way than being able to lease their own lands for economic development, use property tax revenues for services and infrastructure, and use the leasehold revenues for other benefits to band members.

It fits in a federal system. I have 35 years of experience looking at small governments and federal systems, and this is a step on the way. I don't think we're quite ready for little autonomous governments in property taxation and debt finance. We need the kinds of cooperative arrangements this legislation provides for.

I would like to see a transition where the minister doesn't quite have as much authority, because I do think the natives have the biggest stake in it, but it's a good step along the way.

Thank you. I've left most of the time for any questions and comments.

Á (1135)

The Chair: We thank you very much. Yes, I'm sure there will be questions. That was an excellent presentation.

Monsieur Loubier.

[Translation]

Mr. Yvan Loubier: Thank you, Mr. Chairman. Professor Bish, I really enjoyed your presentation. Since I have always been interested in tax matters, I paid particular attention to your comments, especially the last ones.

You said there ought to be a transition period or method that would not grant as many powers to the department. Could you expand on that and tell us how Bill C-19 could be improved to reach that transition objective that you referred to?

Á (1140)

[English]

Prof. Robert Bish: We have a puzzle, because the courts have definitely given the minister fiduciary responsibility for first nations. That means there really is a stake for the taxpayers in Canada, for the minister, and for the Department of Indian Affairs.

I'm a small-government person. I do not have a great deal of faith in large bureaucracies, no matter how well-intentioned the people. I can still remember, when taxation started, the number of hours I spent on the phone with INAC officials, trying to explain to them how property taxes worked in British Columbia. They just had no experience with it.

The people who really had a stake in it and who really learned fast were, frankly, native tax administrators. If you look at the care with which Squamish Band in West Vancouver, which now gets about $5 million or $6 million a year in property tax revenues, went into taxation, how careful they were, how concerned people like Harold Calla were with the care so that their leasehold values weren't reduced, and then you look at the problem with the types of assessments used on Musqueam Band, which radiated across the province and stopped some big projects on other bands, I became convinced that the natives knew more about this than the people in INAC. Yet we are partly in a parliamentary system where the minister has a lot of responsibility.

So I hope we're moving toward really recognizing that these regulatory agencies of natives have the biggest stake in this, but I don't see legally at this time how to get rid of the minister's role and maintain the regulatory system where we don't have a bunch of first nations going off on their own to do what they want. So we're stuck here as to how to get started.

The ITAB started with members who were non-natives who were taxation experts. Now we're down to just natives.

We're into this 15 years. We're into the proposal for the First Nations Finance Authority 10 years, a full decade. So we're between a rock and a hard place. That fiduciary responsibility is there, but frankly, I'd rather have the first nations insuring themselves. That's why I like the co-op, not backed up by the federal government but by the tax base of the other first nations.

[Translation]

Mr. Yvan Loubier: Thank you, Professor Bish. What you had to say was very interesting and I noted all of that. Thank you.

[English]

The Chair: Merci, Monsieur Loubier.

Does anyone else have any questions?

There being no further questions, we invite you to make closing remarks if you have anything to add.

Prof. Robert Bish: I'm basically a local government person and I've spent 35 years looking at small governments. Most of the last two years have been in Guyana, South America, helping strengthen local governments for the Inter-American Development Bank. The best systems, very frankly, are those in which the people who make the decisions see the costs of errors and see the benefits of doing it right, and they're the first nation people with their own lands. However, the reputational effect of making a mistake in bond markets or in leasehold lands by small governments is so severe that they're interdependent. So they have the biggest stake in seeing that other first nations don't make mistakes. Therefore, I think they're the most appropriate regulatory agency, and that's the way federal systems work. It doesn't really work very well when you're getting money from somebody else and then spending it for local benefits.

The best example I know of in that regard is school finance here in British Columbia. The province has taken over school finance totally. School boards have essentially become lobbyists to the provincial government for more money. Their local taxpayers no longer have a voice.

Surveys from the United States show that when local taxpayers don't have a voice, they lose interest. So what we have in B.C. is the average taxpayer, unless you have children in the school, doesn't pay any attention because it doesn't affect them in their pocketbook.

This is a structure where we have a lot of experience with trying to finance the infrastructure in small governments. The property tax is the least volatile tax compared to income, sales, and other excises. It's the tax that bond institutions are used to evaluating. The co-op model of reinsuring each other is the most successful model in Canada, because, remember, the MFA in B.C. has a triple-A rating with all the bond agencies, and last time I looked, even Alberta didn't have that. So we have a system that I think is the way to proceed with the financing of infrastructure for leasing. When INAC doesn't provide the money, as it does for residents, this legislation is a step on the way. And until we resolve this fiduciary responsibility issue, I don't really think we can get rid of the minister's role.

That will conclude my closing remarks. Thank you for having me.

Á (1145)

The Chair: Thank you very much.

Because this is our last witness, I'd like to say I'm very impressed with the participation and the skills and knowledge of all our witnesses.

I was a young politician many years ago on school boards and municipal councils, and there was an old-timer in our town who eventually ended up as mayor. I always resented paying consultants, because in Ontario we had a saying: “No study, no money”. So regardless of whether we needed a study or not, we did one. And he always said a consultant is a person who borrows your watch and then tells you what time it is. So my answer to my friend when I get back home is “Frank, I guess you get what you pay for, because there are some excellent consultants.” I think you're one of them, and there were many who appeared before this committee. I'm very impressed.

Thank you very much for your assistance, everyone.

Colleagues, amendments have to be in by 5 o'clock tomorrow. They will be distributed to all offices of members of the committee at 9 o'clock Monday, and at 3:30 on Monday we will go directly to clause-by-clause.

The meeting is adjourned.