PACC Committee Meeting

STANDING COMMITTEE ON PUBLIC ACCOUNTS

COMITÉ PERMANENT DES COMPTES PUBLICS

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, May 18, 2000

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[English]

The Chairman (Mr. John Williams (St. Albert, Canadian Alliance)): Good afternoon, ladies and gentlemen.

The orders for today are pursuant to Standing Order 108(3)(e), consideration of chapter 4, Indian and Northern Affairs Canada, elementary and secondary education, of the April 2000 report of the Auditor General of Canada.

Our witnesses today are, from the Office of the Auditor General, Ms. Sheila Fraser, the Deputy Auditor General of audit operations, and Mr. Grant Wilson, principal of audit operations. From the Department of Indian Affairs and Northern Development, we have Ms. Shirley Serafini, deputy minister, Mr. Dennis Wallace, associate deputy minister, and Mr. Bob Coulter, director of learning, employment, and human development.

Welcome, all.

We'll start as usual with the opening statement by, in this case, the Deputy Auditor General. Ms. Fraser, please proceed.

Ms. Sheila Fraser (Deputy Auditor General, Audit Operations, Office of the Auditor General): Thank you, Mr. Chairman. Good afternoon to you and members of the committee.

On behalf of Auditor General Denis Desautels, who unfortunately had previous out-of-town commitments, I wish to thank you for the opportunity to discuss chapter 4 of our April 2000 report to the House.

This chapter deals with our audit of Indian and Northern Affairs Canada that looked at elementary and secondary education for Indian students living on reserves. The audit was significantly different from most of our audits in that it dealt with the well-being of children, the future of any country. It is therefore especially gratifying to appear before you to deliberate fundamental issues and opportunities available to Indian and Northern Affairs Canada for improvements in education.

The department's mandate for elementary and secondary education stems from its authority and obligations under various statutes, treaties, agreements, and government policy. The department's objective for education is to assist first nations in achieving their needs and aspirations. To do this, Indian and Northern Affairs Canada allocates some $1 billion annually to first nations for elementary and secondary education. This amount does not include additional amounts for on-reserve school construction and maintenance.

Departmental funding is for the benefit of Indian students who live on reserves and who attend either on-reserve or provincial schools. Education for Indian students who live off reserve and attend provincial schools is funded by the provinces. Other arrangements involving Indian and Northern Affairs Canada are in place for post-secondary education, which was not included in this audit.

It is important to note that the department has delegated its authority to first nations and the provinces for the design and delivery of education. Departmental data show that almost 60% of the 117,000 Indian students living on reserves are enrolled in over 450 Indian-managed elementary and secondary schools. About 39% are enrolled in provincial schools, and a small number attend eight schools operated by the department.

Regardless of the approach used, Indian and Northern Affairs Canada retains responsibility for the cost and appropriateness of education. Against this backdrop, we ask the following questions in our audit. Does the department have reasonable assurance that it is meeting its objective for education? Is the department exploiting existing opportunities for operational improvements? Finally, has the department demonstrated accountability for results?

We found, Mr. Chairman, that the department is undertaking several initiatives to help achieve its objective for education. However, the audit disclosed two broad areas that are cause for concern.

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[Translation]

First, there are fundamental issues that have remained unresolved for many years, related to the department's role in education, the need to reduce the educational achievement gap, and the need to develop and use appropriate performance indicators.

The department has not articulated its role in education, despite the fact that it has been devolving education to First Nations for at least 30 years. We believe that a complete articulation of the department's role, consistent with the nature and extent of program devolution, is essential to success and accountability. Clarification of the role is needed so that the department can reasonably determine whether its existing capacity and resources are sufficient to achieve its objective.

The lag in academic achievement of First Nations students behind other Canadians is a serious gap. The dropout rate of Indian students before grade nine is six times higher than that of the Canadian population. The proportion of the on-reserve population with a high school education is significantly lower than in the general population. At the current rate of progress, it will take over 20 years for Indian students to reach parity with other Canadians at the secondary school level. Moreover, it is questionable whether the education received by Indian students meets their cultural needs. In our view, this picture reflects a Canadian tragedy.

The department is not oblivious to the situation; it is aware of numerous studies reported over many years on the state of Indian education. Yet it has failed to take prompt and effective remedial action.

With respect to performance indicators, we found that Indian and Northern Affairs Canada collects some basic data on education such as nominal roll information and other operational statistics. However, it has not developed indicators of performance and of results to demonstrate accountability and to provide assurance that it is achieving its objective.

[English]

The second broad area of concern is the need for operational improvements, including how the department administers education funding. The audit identified a need to gather cost information for comparative purposes and for determining potential problems associated with levels of funding; a need to better manage education funding arrangements by ensuring their existence and use; a need to consult more on curriculum and instruments of delivery to benefit first nations students who have a variety of academic, cultural, and special needs; and finally, a need to obtain and use school evaluations to assess overall school performance as well as specific issues that may apply to a particular school.

In conclusion, Mr. Chairman, the department must significantly increase its efforts to help improve the record of educational achievement by first nations students while addressing their cultural needs. We recognize that resolving the issues will be a challenge. However, remedial action is urgently needed, and the urgency will be intensified by the growing demand on education services because of demographic trends in first nations communities.

In the absence of satisfactory progress, there will be an increased waste of human capital, lost opportunities, a high financial cost in social programs, and a degradation of the relationship between the government and first nations peoples.

We hope that with the committee's agreement and encouragement, the department will expeditiously develop and implement an appropriate action plan for improvement for the benefit of Indian students and all Canadians.

We would be pleased to respond to any questions or comments you might have.

The Chairman: Thank you, Ms. Fraser.

We'll now turn to the Department of Indian Affairs and Northern Development for their opening statement from Ms. Serafini. Ms. Serafini, please.

Ms. Shirley Serafini (Deputy Minister of Indian Affairs and Northern Development): Thank you, Mr. Williams. It's a pleasure to be here today. This is my first opportunity to meet with the committee—

The Chairman: Then welcome.

Ms. Shirley Serafini: —since my appointment last summer as deputy minister of the department. My colleagues, Dennis Wallace and Bob Coulter, and I do welcome this opportunity to address the committee regarding the department's response to chapter 4 of the Auditor General's report.

I'd like to start by assuring the committee that we are determined to act on the Auditor General's recommendations. As we said in our response, we do recognize the need to work with all parties to better articulate our role in education, to develop and use appropriate performance measures, and to strengthen our operational importance. We see this chapter as a very useful tool in furthering the goals of first nations education.

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[Translation]

Our department's responsibilities with respect to First Nations education stems from our authority and obligations under the Indian Act, treaties and government policy.

Simply stated, our role is to support First Nations in providing elementary and secondary education programs and services for their children that are comparable to those offered by provinces and territories; that afford mobility among education jurisdictions; and that qualify students to go on to post-secondary education.

[English]

As well, how we exercise our role has been evolving and will continue to evolve as we move along a continuum from direct delivery of education services by the department, which as the Auditor General's office has noticed is still the case in eight schools, to band-operated schools, which is now by far the vast majority, towards government-to-government relations where first nations exercise jurisdiction for education. This is consistent with the principle of Indian control of Indian education.

That principle is illustrated very clearly in our work on education reform with the Chiefs' Committee on Education of the Assembly of First Nations. Together with them, we agreed upon four priority areas for education programming under Gathering Strength. Those are strengthening management and governance capacity, improving the quality of classroom instruction, increasing parental and community involvement, and supporting the school-to-work transition for first nations youth.

Since then we've invested $10 million in 1998-99, $26 million last fiscal year, and $40 million this year to underwrite more than 200 regionally and locally driven initiatives aimed at increasing the quality of education in first nations schools and the academic achievement of first nations students.

I'd like to stress that education reform is one of the key initiatives of Gathering Strength. The department recognizes that although great strides have been made in recent years in the educational achievement of first nations students, progress needs to be accelerated to close the education gap between first nations and other Canadian students.

That's why we're supporting education reform projects across the country that fall under eight broad themes: special education, language and culture, information technology in first nations schools, parental and community involvement, professional development and training, student retention and achievement, career development and school-to-work transition, and building institutional and governance capacity.

[Translation]

In two weeks we will be co-hosting a national meeting on education—a “visioning” session—involving department officials, Chiefs and educators to build on the initiatives underway across the country and to agree on key elements of a strategic vision for First Nations education. We will continue to work with First Nations to develop and implement action plans, region by region. And because 40% of First Nations children living on reserves attend provincial schools, our provincial partners will also be important players throughout.

[English]

In closing, we certainly recognize the need to closely monitor the results of these initiatives and their collective progress towards a strengthened first nations education system. Improving first nations education is key to improving the quality of life of first nations children and youth, and we are committed to working in collaboration with first nations and provinces to achieve these goals.

Thank you. We would welcome the opportunity to have a discussion with the committee.

The Chairman: Thank you very much, Ms. Serafini.

We'll start our questions with Mr. Konrad, eight minutes for the first round.

Mr. Derrek Konrad (Prince Albert, Canadian Alliance): If you care to take it, I'll let you have it, because I met with officials from the Auditor General's office yesterday. If you want me to proceed, I will.

The Chairman: Well, it is indeed a pleasure that the chairman gets to start off.

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Ms. Beth Phinney (Hamilton Mountain, Lib.): Make sure the timer is going.

The Chairman: Oh, yes, I have to get the timer going.

My first question is for the record. Am I correct in understanding that there is no legal requirement for children of the first nations to go to school?

Ms. Shirley Serafini: No, that's not the case. It's required under the Indian Act.

Mr. Bob Coulter (Director, Learning, Employment and Human Development, Department of Indian Affairs and Northern Development): Under the Indian Act, students are required to attend school from age six to sixteen. Outside of the Indian Act, provincial law would govern the attendance at school.

The Chairman: Now, we enforce our truancy laws, I think, fairly rigorously. I'll refer to exhibit 4.2 of the Auditor General's report, on page 48, where he says that 20% of students eligible to attend elementary schools are not enrolled. Twenty percent. Who's enforcing the law here?

Ms. Shirley Serafini: I think perhaps—and I'm not sure—we may be getting into some technical issues here. There may be a question of those who are required to be there versus those who are eligible. Once you're past 16, you would still be eligible, but you wouldn't necessarily need—

The Chairman: Perhaps the Auditor General's office can clarify, but it says elementary and secondary—20% are not enrolled. You're telling me that they have a legal requirement to go to school. I find 20% are not. Am I getting the message wrong here?

Mr. Grant Wilson (Principal, Audit Operations, Office of the Auditor General of Canada): Mr. Chairman, the 20% is in fact a number that is published by the department as part of the statistics on education. This amount is tracked over a period of time. Whether or not there is a legal requirement, we didn't look into that as the issue.

The Chairman: But you've just heard they're acknowledging that there is a legal requirement. I thought there wasn't. But now I'm apprised by the department that there is and they've accepted that responsibility. Now you're saying their own figures say 20% are not enrolled.

Mr. Grant Wilson: Yes.

The Chairman: Ms. Serafini, what's your response?

Ms. Shirley Serafini: I will have to look into those numbers to be able to explain exactly what that 20% means and get back to you.

The Chairman: Do Mr. Wallace or Mr. Coulter want to amplify? Because if there is a legal requirement to go to school and 20% are not going to school, and you have a responsibility to provide the education, my question is, what's going on?

Mr. Bob Coulter: I think we can look into the question and get back to the committee. We noticed that we don't have comparable numbers for other Canadians. Indeed, it may be, as Ms. Serafini suggested, a difference between eligibility and requirements.

The Chairman: Then let me ask Ms. Fraser or Mr. Wilson why we have “not applicable” in the all-Canadian figure. Do you want to say why you didn't provide a comparable figure?

Mr. Grant Wilson: Yes. We have “not applicable” because provinces don't normally provide that information. We couldn't collect that information. We felt that the amount 20% was an important number. We didn't have anything to compare it against, however. It could be something higher or lower nationally.

The Chairman: So you're saying that all Canadian jurisdictions providing education to our children are not finding out how many kids don't go to school?

Mr. Grant Wilson: Mr. Chairman, no, we're not saying that. We're saying it wasn't readily available.

The Chairman: So you couldn't make a comparison.

Mr. Grant Wilson: We did not make a comparison because it wasn't available.

The Chairman: Also, we do note that the dropout rate before completion of grade nine happens to be 18% for Indians—and I'm using the term that's in your report—and 3% for all Canadians. I presume that's all Canadians except Indians. Or is that 3%—

Mr. Grant Wilson: No, that includes first nations.

The Chairman: The 3% includes first nations.

Mr. Grant Wilson: That's correct.

The Chairman: So if we take that 18% out of non-natives, it's obviously significantly below 3%?

Mr. Grant Wilson: Not significantly below, because the Indian population as a percentage of the total population is quite small.

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The Chairman: It's quite small. Okay.

Well, I hope you can send us a letter, Ms. Serafini—

Ms. Shirley Serafini: I will do that.

The Chairman: —explaining why your department knows that 20% of children are not going to school, and why it would appear.... Are you doing anything about it? You're not aware that you're doing anything about it?

Ms. Shirley Serafini: There a lot of initiatives under Gathering Strength—

The Chairman: Yes, but I'm talking about—

Ms. Shirley Serafini: —in terms of keeping kids in school.

The Chairman: We have a fairly stringent legal system that says if you have truancy, parents have to answer to the courts in most of the land. Does that not apply for the natives too?

Mr. Coulter, you seem to know the legal requirements here.

Mr. Bob Coulter: It's a requirement under the act, yes.

The Chairman: Is it punishable if they don't send kids to school?

Mr. Bob Coulter: I think it provides for a fine for that—

The Chairman: But you don't know.

Mr. Bob Coulter: —but I haven't read the section recently.

The Chairman: That's rather disconcerting.

Paragraph 4.72 of the Auditor General's report says that:

We further observed in one departmental region that a master tuition agreement between the Department and the provincial Ministry of Education had expired in 1992 and had not been renewed.

Is there any reason why?

Ms. Shirley Serafini: Would you like us to respond to that?

The Chairman: Please.

Ms. Shirley Serafini: The reason is that we have been evolving in terms of how things are done in some cases, and in the past in this particular province it was an overall master agreement between the department and the Ministry of Education. Since then there has been movement toward having the agreements at either the school board level or the regional level, between the first nation schools, as opposed to one uniform one. So in fact there are agreements, but it's not one; it's that overall level.

The Chairman: Ms. Fraser, are you suggesting there is a gap here, that it expired in 1992 and has not been renewed? Without quoting verbatim, you give the impression that there is no agreement in place.

Ms. Sheila Fraser: We did find individual agreements, but I would ask Mr. Wilson to comment on that, please.

Mr. Grant Wilson: Yes, thank you, Mr. Chairman.

While there is not a master tuition agreement, we had suggested that to have such agreements would be potentially beneficial. They would include such aspects as setting out the linguistic and cultural aspects relating to the first nations within—

The Chairman: Was there an individual agreement to replace the master one, or was there actually just plain no agreement in place?

Mr. Grant Wilson: There are individual agreements—

The Chairman: Covering all the schools?

Mr. Grant Wilson: That I'm not sure of. I'll just have to give it a few seconds here.

Our concern was that the individual agreements would not necessarily be as comprehensive as an umbrella agreement, so our suggestion was if you combine the umbrella with individual agreements, you'll probably end up with a better understanding of the needs and how you might address those needs.

The Chairman: Thank you.

Mr. Clouthier, please.

Mr. Hec Clouthier (Renfrew—Nipissing—Pembroke, Lib.): Thank you very much.

The Chairman: My apologies. Madam Jennings was first. I thought it was Mr. Clouthier.

Mr. Hec Clouthier: Far be it from me to usurp Marlene Jennings.

Ms. Marlene Jennings (Notre-Dame-de-Grâce—Lachine, Lib.): A very wise man.

The Chairman: Ms. Jennings, eight minutes please.

Ms. Marlene Jennings: Thank you.

I've read with great interest the Auditor General's report and the brief you've just presented, Mrs. Serafini. I'm concerned particularly on one level, which is the devolution of the responsibilities of education the federal government has under the treaties, under the Constitution, under the Indian Act—the devolution to first nations through local agreements with individual first nations. According to the Auditor General's report, there doesn't seem to have been any mechanism put into place to assess the capability of a particular first nation to take on all of the responsibility.

The reason that concerns me is that I know when our third territory, Nunavut, was being put into place and the infrastructure was being built up, there was a program that took place as a result of assessment through the Canadian Management Centre in order to train Inuit to be able to take on that responsibility. It was through a whole plan of action, so it was a whole stage-by-stage implementation, shall we say.

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According to the Auditor General's report, that doesn't appear to be the same role or strategy DIAND has taken. If that's the case, or if that's wrong, please tell me so. Tell me where that assessment has taken place and what model agreements show it has taken place. Don't talk to me about the Mi'kmaq one, because it doesn't appear that an assessment took place. If there was one, the Auditor General doesn't seem to mention it.

If you don't have that as a mechanism, why not? If you do have it, how well developed and well tested is it? What kinds of audits are you doing to ensure that the assessment that took place was accurate? What kinds of mechanisms do you have—there are a lot of questions, I understand, but you're going to have a lot of time to answer them—built in to catch problems as they arise, before they become too widespread and affect the good delivery of programs? That's one aspect.

The other aspect is quite short, and I think you could probably answer this very easily. I know, as a result of my personal experience, that the lack of education that is culturally appropriate and sensitive can have a great negative impact on an individual's capacity to successfully complete that educational program. We see it every day in the grade schools, the high schools, the CEGEPS, and the universities.

The Quebec Bar Association and the Canadian Bar Association came out with a study on the effects of that on visible minorities, with recruiting into the law schools, graduating out of the law schools, etc. So what efforts has DIAND taken to ensure—even when it is devolving and has a responsibility to ensure that the quality of education meets the provincial standards—that the mechanisms and content of those programs are culturally sensitive?

Ms. Shirley Serafini: Those are large questions. I'll start, and then I will ask my two colleagues to add to it.

In terms of dealing with the first question about the kinds of funding arrangements, I think it's important to understand that it's not one size fits all. In fact it's something that's been evolving since the 1970s. Back in the 1970s, and I guess into the 1960s, we basically delivered everything directly. Then we started to move into devolving things.

The first kinds of funding arrangements we had were very prescriptive. They stipulated in detail what would be done, how it would be done, and the expenses that would be reimbursed. That was very consistent with the thinking, “This is a very first step, so we will take tiny steps, and that's how we will deal with it”.

In 1983 there was an all-party parliamentary commission on Indian self-government, known as the Penner report. It was quite highly critical of those kinds of funding arrangements. It noted that first nations were allowed very little decision-making authority, and there was a high administrative burden with those kinds of arrangements, of course, in terms of program delivery.

In 1986 we secured cabinet and Treasury Board authority to move to what are known as alternative funding arrangements, and then flexible transfer payments in 1989. Those permit more streamlined funding arrangements, with greater local decision-making and accountability. They focus more on what is to be delivered, as opposed to how. But they certainly stress the accountability of the first nations governments to their members, as well as the continuing accountability to the government for the funds that are used.

Ms. Marlene Jennings: Ms. Serafini, I apologize, but I am going to interrupt you, because you're not quite addressing the issue. I have a seven-year-old daughter. At some point I want her to be able to make reasoned and informed decisions. At seven years old she has a certain capacity. I'm not going to ask her, for instance, to negotiate a mortgage loan at the bank, because she does not have the capacity to do that. However, I may decide she has the intelligence to do that at age 16, for instance, the legal age where she actually can, or 18, when she can actually do it on her own, if she has been taught X, Y, and Z elements to be able to do that.

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So when you are deciding to negotiate these alternative funding sources and devolve, is any assessment done to determine what capacity the community has to deliver on that? If they don't have the capacity in a certain area, you just build in failure for them.

Ms. Shirley Serafini: What I was giving you was a backdrop for saying we work with the first nations to determine the most suitable financial arrangements for them, at the stage they are at. We have a more restricted one-year agreement for some. For others that have been on that for a while, have a good track record and have shown they're able to manage, we move into these more flexible five-year agreements.

Also, under Gathering Strength, we have a whole focus in our programming on capacity-building, to provide the kind of training the first nations public service is looking for in a whole lot of areas.

Ms. Marlene Jennings: Okay.

Ms. Shirley Serafini: Do you want to add to that?

Mr. Dennis Wallace (Associate Deputy Minister, Department of Indian and Northern Affairs Canada): Ms. Jennings, most of the school transfers occurred some number of years ago now. For example, in Alberta it was mostly in the period from about 1986 to 1989.

I'm familiar with the process at the time. It involved the superintendent of education for the department and their staff working with the communities to ensure they had an education capacity in place. That was normally an education committee. It normally involved some training for a committee and the development of parents' committees.

Through that a transfer occurred. In a number of instances too, with the agreement of the first nation, there were arrangements with local school boards to provide other support, such as psychometrists, psychologists, and special education. It depended on the geographic location of the community. So that's on your first point, with respect to transfer.

The second point is with respect to evaluation. That has evolved over time, but currently the requirement is that every five years an evaluation is performed. The way we approach it varies across the country. We're going to move to a common system. Now, particularly in British Columbia, there's a process whereby a pool of funding is established and first nations apply. They're resourced for those evaluations to take place. That covers things like the certification of teachers and various other assessments on performance in the classroom. I think that captures your second point.

Another important point is governance. In that respect, on an annual basis the Department of Indian Affairs is somewhat unique in the federal government insofar as we require an annual audit to determine the fiscal well-being of the first nation.

I won't speak at length, but you've raised an issue about what we would call second-level services. That's what you would experience through a board of education providing specific services to first nations. We're beginning to find those developing as well. Manitoulin Island is an example, and some other locations, such as Manitoba.

The Chairman: Thank you.

Ms. Shirley Serafini: Sorry, could I just add something?

The Chairman: Briefly.

Ms. Shirley Serafini: I just want to finish off, because I thought the last part of your question dealt with the question of cultural sensitivity and what we're doing with that.

We provide resources for curriculum development, aboriginal language programming, and professional development related to that, in order to make sure there is that capacity in the schools.

The Chairman: Do you have a comment, Ms. Fraser?

Ms. Sheila Fraser: Yes. I'd just like to add that under the funding agreements there is an evaluation of capacity, which is done through self-assessments. The first nations fill them out and they are intended to evaluate their capacity. The difficulty we found was that many were missing and they weren't followed up on.

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There is the second issue, the evaluation of schools. Schools are to be evaluated every five years. Again, as we note in our report, many of the evaluations are not done. When they are done and there are recommendations, there is no system to ensure that the recommendations are implemented and that there's monitoring.

A final point, in regard to those students who live on reserve and attend provincial schools, is that the department does not obtain evaluations of those schools.

The Chairman: Thank you, Ms. Fraser.

Mr. Clouthier, please.

Mr. Hec Clouthier: Thank you very much, Mr. Chair.

Ladies and gentlemen, let's face it, with regard to our aboriginal and first nations communities, in my estimation we're in a crisis. It's a real conundrum. There are some very big problems out there. I don't have all the answers on how to fix it, that's for sure. One thing I do believe is that it has to happen with the youth. I'm not wiping off the aboriginals, the first nations people, who are my age—I have reserves in my riding. I'm just saying it's going to be very difficult to change the abhorrent conditions they, for whatever reasons, find themselves in.

I mean, we can lay blame here, there, or everywhere, and turn around and blame the provincial government, the federal government, the aboriginals, the non-aboriginals. Listen, it has to end someplace. I believe our best opportunity is with our youth.

I would like to ask the DIAND officials.... Shirley, you touched on it. I think I know where my colleague Marlene was coming from on the educational system. If we're going to teach these kids and they're going to have to make a very great contribution, not only to their own culture, but probably more importantly to the Canadian fabric, what percentage of the actual schooling, the education they receive, would be dedicated toward learning their language, their customs, their heritage? Do you know what the breakdown is there?

The Chairman: I forgot to mention, Mr. Clouthier, we're now on to the second round, and it's down to four minutes. But we'll maybe go to five, because we don't have too many members here today.

Mr. Hec Clouthier: Okay.

Ms. Shirley Serafini: I don't have a percentage on that. I don't think we have that figure. But I would note that what we require at the schools is to meet provincial standards in terms of the math curriculum, the English curriculum, and the science curriculum so that the kids can go on to post-secondary education. The cultural programming is in addition to that; it's on top. So it's not instead of, it's—

Mr. Hec Clouthier: Would the majority of the young children in these schools know, be cognizant of, or speak their language?

Ms. Shirley Serafini: It's going to vary for the 600 first nations across the country. In many cases, yes. I don't know that we actually have the numbers. In other cases they will be delivered in English or in French.

Mr. Hec Clouthier: Okay.

Mr. Dennis Wallace: If I might add, Mr. Clouthier, in some parts of Canada the issue is rather one of English as a second language, because the first language is that of the community itself, whether it's Cree, Ojibway, or Ojicree, particularly in northwestern Ontario, parts of northern Alberta, and parts of Quebec. So in fact the language is preserved there, and the challenge is working in English or in French as the second language in the classroom.

Mr. Bob Coulter: If I could add to that just briefly, Mr. Chairman, I'm encouraged to note that a number of provinces now recognize aboriginal languages for full credit on par with other language and social programs in the schools. I think that's a very encouraging trend we're seeing really picking up across the country.

Mr. Hec Clouthier: I have one short question. I'm going to go to Sheila.

Sheila, have you done an assessment or a comparative study? I know about 60% of the first nations children go to schools on the first nations Indian reserves. Roughly 40% go the public institutions or private ones. Do you have an assessment or comparison of the number of those students who would go on to university, or have you ever done any comparative studies on the educational standards of the students that would graduate out of the reserve schools compared to the students who would graduate out of the public schools?

Ms. Sheila Fraser: No, we haven't done any kind of study like that, Mr. Chair. I don't know if the department has that information. We do know the department has indicated that there are 27,000 students in post-secondary education. Post-secondary education was not a part of this audit. But we do not know how many of those 27,000 came from on-reserve schools or provincial schools, nor what kinds of post-secondary institutions they are in.

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Mr. Hec Clouthier: Do they have a choice, or in some instances, because of geographics, they couldn't do it? You know, if I had a young son or daughter on a reserve, would I have the choice of saying I want to send them to the reserve school or the public school?

Ms. Sheila Fraser: Yes, if there was a choice available to you. It may be that because of distances—

Mr. Hec Clouthier: That's what I mean, geographics—

Ms. Sheila Fraser: —and geographics, you don't have a choice.

The Chairman: Perhaps we could ask Ms. Serafini to give a brief response. I noticed you were nodding your head, but nodding just doesn't quite get on the record.

Ms. Shirley Serafini: No. And if I could suggest, it depends on where you live. In many cases there would be a choice. Some parents will send their kids to the off-reserve school, others will have them in the on-reserve school. We don't, as well, have overall statistics in terms of that relative success, but that's certainly one of the avenues, in terms of developing performance indicators for the future, that we will want to work on with the first nations.

The Chairman: Thank you very much, Mr. Clouthier.

Mr. Konrad, please, four minutes.

Mr. Derrek Konrad: Thank you. It's 10 or 15 here, however.

Where will I begin? In 1999, in the provincial auditor for Saskatchewan's fall report, he states that studies show the number of vulnerable children is increasing faster than the number of school-age children. This creates a lot of difficulties in funding for school boards, since the amount that is paid to school boards is fixed at the end of September. After that point, when students change schools, whether they move in from reserves or move between school districts, funds are not available, putting an increasingly heavy burden on local taxpayers. This is creating problems. It's been brought to my attention a couple of times now in my own riding. I'm attempting to get further information on this, and as I do, I'm sure I'm going to keep finding the same things.

The department of education in the province has explored the feasibility of setting up a comprehensive monitoring system to track student movement through the school systems, but they have difficulties: a lack of compatible computer equipment in schools; a lack of common software at school divisions; and insufficient time in the schools to administer such a system. Is the Department of Indian Affairs prepared to give some help to the provinces to enable this to happen?

Ms. Shirley Serafini: I have not seen this study you're quoting, so it's certainly something we would need to look into.

Mr. Derrek Konrad: Will you?

Ms. Shirley Serafini: My answer would be that with respect to the funds we have for education, the first priority has to be in terms of the quality of the education services for the first nations in the reserve schools. As well, what we do with the provinces is of course that tuition payments are paid for the students who are going to off-reserve schools.

Mr. Derrek Konrad: Well, I can say that kids like this tend to have kids like this, so we're not going to address it in terms of what the province can possibly do when their budget is based on so many dollars per child. When you have high-cost children, somebody has to provide the funding to address their needs, and I want to know if the department is going to help out the provinces. This is surely not limited to Saskatchewan; this has to be a problem right across Canada with all provinces. Are you telling me you've never heard it before?

Ms. Shirley Serafini: No, I'm sorry, I said I wasn't familiar with that particular report you were quoting.

Mr. Derrek Konrad: But you are familiar with the problem?

Ms. Shirley Serafini: There's a whole area I think you're getting at, which is the need for special education services. Certainly that's an area—

Mr. Derrek Konrad: This is not special education. This is tracking.

Mr. Dennis Wallace: If I might pick up on your point, Mr. Konrad, you're right, there are systems among provincial governments, first-nation-operated schools, and the Government of Canada, with cut-off dates normally for when children appear in the classroom and whether in fact a tuition will be paid for that particular semester. In the past we have had a very good tracking system among us.

I think what you're observing is something that has occurred. It's just been reported to me that, for example, in British Columbia we've moved to a common identifier code so that between the province and first nations we're able to track students. Quite clearly, this is an initiative we need to move across the country.

• 1620

It's equally a challenge for first nations if children from the provincial system move to on-reserve schools. They would face the same dilemma. There's quite a bit of population surge back and forth. It's a two-way street.

Mr. Derrek Konrad: But is the Department of Indian Affairs prepared to work with the province to get this set up? As I said, it still comes down to a matter of money, who is going to supply it, who is going to set standards, and those types of things.

Mr. Dennis Wallace: If I might, in the case of Saskatchewan, I think that would be a very good task for the education committee that exists between the Federation of Saskatchewan Indian Nations and the Province of Saskatchewan.

Mr. Derrek Konrad: Thank you.

The Chairman: Thank you, Mr. Konrad.

Ms. Jennings again, and then Mr. Richardson.

Ms. Marlene Jennings: Let Mr. Richardson go first, because I've already had a turn.

The Chairman: Okay. Mr. Richardson.

Mr. John Richardson (Perth—Middlesex, Lib.): Thank you very much, Mr. Chairman.

I have a series of quick questions.

A billion dollars is money that's put forward by the federal government, and its expenditure is determined by those people who are running the schools. Could you tell me the amount of money we spend on provincial schools vis-à-vis those schools that are on Indian reservations? Could you tell me that allocation differential or the relationship there?

Mr. Bob Coulter: Mr. Chairman, I don't have the exact number with me.

Mr. John Richardson: I'll let you round it up. I don't want you to be that perfect.

Mr. Bob Coulter: The proportion of students attending provincial schools is roughly 40%, and it would be roughly 40% of the budget. I've seen the numbers, and it's roughly in that range. The figure $390 million comes to mind.

Mr. John Richardson: So it's 40%.

Mr. Bob Coulter: Roughly.

Mr. John Richardson: I think a tracking mechanism was mentioned. If some people move from one province to another and want to move to one of the schools that is under the Department of Indian Affairs, they just phone the school and their records are forwarded. They're then enrolled in that school, and they're paid for by the Department of Indian Affairs. I'm talking from province to province now. Is that correct?

Mr. Bob Coulter: Usually when a family moves onto a reserve the school arranges for the transfer of the student's records to the new school.

Mr. John Richardson: There must have been some increases in the achievement levels of the students from the Indian bands. I visited a couple of them here in southwestern Ontario. I'm impressed, quite frankly, by the behaviour of the students in those schools and by the cleanliness. But I have never heard anything about their achievement level. I can look at their behaviour level, which is good and compares well with those in the secular schools.

Mr. Bob Coulter: I think that between 1988 and 1998 the number of students who stayed consecutively in school increased by about 36%.

Mr. John Richardson: I think I've probably run out of time.

The Chairman: You still have a minute and a half, Mr. Richardson, so you can continue.

Mr. John Richardson: Thank you.

I think DIAND handles everything up to the secondary school graduation. But when we get to the post-secondary or tertiary level of education, do they still get the support from DIAND to get further education at a vocational school, a community college, or a university?

Ms. Shirley Serafini: We have a program to provide support for post-secondary education. Its budget is about $293 million a year.

Mr. John Richardson: That's impressive. Would you have any idea what the number grossed up would be on that tertiary education?

Ms. Shirley Serafini: We know that there are 27,000 enrolled in post-secondary education at this point, which is double what it was ten years ago.

Mr. John Richardson: That's very commendable.

Mr. Dennis Wallace: If I might, Mr. Chairman, I'd like to pick up on one of Mr. Richardson's points, which I think is quite important.

We can look at Kahnawake in Montreal. When there's access to work, there's a good economy, good housing, and good government in a community, there also are good education programs. The language of business is the Mohawk language. It's very much a part of the school and of the government. I think that's an indicator to support the comment you made.

• 1625

The Chairman: Thank you very much.

Ms. Jennings, please.

Ms. Marlene Jennings: Thank you.

I'm glad you mentioned Kahnawake, Mr. Wallace. It's on the other side of my riding. Part of my riding, the city of Lachine, has historically had links, whether it be trade or otherwise, with the community at Kahnawake.

You are right, the economic possibilities that exist within a community can have a great impact on how successful the educational programs are.

I understand that economic development may not be part of your mandate. However, there are linkages. I'd like to know what, if anything, is being done to spur economic development within communities. That is an incentive for kids to remain in school and for the schools and the authorities that have the control of the pedagogical content to make sure that it's responsive to those employment needs, for instance. What kinds of mechanisms exist to try to make those linkages?

Ms. Shirley Serafini: Certainly building the economies in those communities is one of the major priorities of our department. In fact, earlier today our minister announced—he's at an economic development conference in Winnipeg—that he's basically doubling the funding we're putting into economic development projects. He's adding another $75 million to the present $80 million.

We support that through a number of initiatives, in terms of equity support for small businesses, getting participation in large economic development projects, etc. There's a whole range of programs there. Those are the things we're doing directly on the economic side.

Within our work in terms of education reform, there has certainly been a thrust under the Gathering Strength initiative. We have a public handout showing the kinds of things we're pursuing about career development and school-to-work transition to make students aware of what's possible, such as co-op education.

Ms. Marlene Jennings: So you are supporting those kinds of programs in the high schools.

Ms. Shirley Serafini: Yes, we are.

Ms. Marlene Jennings: Are there any programs where the students actually go and work for a day? I know that the Bank of Montreal has developed a program, which started in Montreal and now has branched out across Canada, for the visible minority communities. They recruit students, and those students actually work a day in the bank under the tutelage of an employee. They provide them with support. It has existed for a number of years now, and it has been a real success. Most of those kids end up becoming high achievers and going on to post-secondary education. Some of them have been hired back by the bank as part-time employees while they're continuing their education. Are there programs of that nature that are being supported by DIAND?

Ms. Shirley Serafini: Yes. Through the youth employment strategy we're spending $24 million a year, which is in addition to the elementary and secondary education program budget, on cooperative education, summer career placements, youth business, and work experience, those kinds of activities.

Mr. Dennis Wallace: If I might respond to Ms. Jennings, I can give you two very quick specific examples of that, which might assist as well.

The first example is that in Alberta, with the Athabasca Tribal Council working with the Syncrude group, there's an arrangement in place where youth who are able to achieve the training requirements that would meet the job needs of Syncrude are assured of a job. We have an agreement of $250,000 a year. This is in year two now. It's a partnership between the Syncrude group of companies and the Athabasca Tribal Council on education. It's very effective.

The second example is the Frontier School Division in Manitoba. That's provincially operated, but predominately there are aboriginal children attending. They're able to come down to Winnipeg, among other cities in Manitoba, and spend a week in a career experience. When I was with the Canadian Grain Commission, we had children working in our laboratory for a week to try out non-traditional occupations in science. So it is being done.

• 1630

The Chairman: Thank you, Ms. Jennings.

Mr. Konrad, please, for four minutes.

Mr. Derrek Konrad: Thank you.

Since you were just mentioning economic development as part of the role of developing a good education and you just announced the $75 million spending initiative, I note from the Auditor General's report here, as background, that one of the things really lacking in the education area is statistics. Do you keep statistics on the success rates of jobs? It seems to me I read a statistic that said 75% of the businesses you're funding have one or fewer employees. How you can have a business with fewer than one employee is beyond my ability to understand. Do you keep statistics, not just on the grants given—remember the TJF thing we're just in the midst of looking into and the Canada Jobs Fund—but do you know what the success rate is of these jobs?

Mr. Dennis Wallace: You're referring, Mr. Konrad, to—

Mr. Derrek Konrad: To the $80 million and all the other money and any aboriginal initiatives under the TJF and all the rest. Do you know how many jobs are created and what the costs of the jobs are? Do you have those kinds of statistics?

Mr. Dennis Wallace: We do not have them here, but under the programs we have, such as the Opportunities Fund, we can speak to the employment level that generates the nature of the project, the contribution we've made, and the leverage we've achieved. If you wish, that's information that's readily available to you.

In fact you are correct; there are in excess of 20,000 new business start-ups. They may be small businesses because they're in small communities, but in fact the success rate is higher than it is for most other kinds of business start-ups across the country.

Mr. Derrek Konrad: Thank you. Going back to your statement here, a mountain of studies has been done, twenty years' worth of studies, and nothing has been done with them.

I see somehow you've managed to cram three years into two years in the first line of the last paragraph on page 1 of your report, if I know what year we're in here, but you have 200 regionally and locally driven initiatives aimed at increasing the quality of education in first nation schools. That sounds good. Are you now keeping records and statistics? That's the first part of the question.

The second part of the question is, are you using any of the studies that were created in the first twenty years, when nothing was done with them, to develop these 200 regionally and locally driven initiatives?

Mr. Bob Coulter: On the twenty-odd studies that are mentioned in the Auditor General's report, those studies were prepared under the auspices of the Manitoba education agreement and were for the most part internal studies to the Assembly of Manitoba Chiefs.

Subsequent to those studies, the first nations have founded in Manitoba a Manitoba education resource centre. By using Gathering Strength resources to provide common services, they're actually addressing through the resource centre most of the common service issues—special needs, etc.—that were identified in those studies. So I think it's fair to say the studies that were done over the period of ten years or so have had a direct impact on the resource centre, which has now been implemented—

Mr. Derrek Konrad: You didn't answer my other question.

Mr. Bob Coulter: —and which is now providing common services to each of the first nations. So some economies of scale for services have very much come out of that.

The Chairman: You said he hadn't answered one of your other questions, Mr. Konrad?

• 1635

Mr. Derrek Konrad: I asked if you're keeping statistics now on the $10 million, the $26 million, and the $40 million used to underwrite the initiatives. Are you keeping statistics on what is happening in those 200 initiatives, which the Auditor General can actually read, find out, and report on in the next Auditor General's report?

Mr. Bob Coulter: We have descriptions of each of the 200 projects that have been initiated with those resources under Gathering Strength. It's a bit early to look at the results, but we do have numbers on the schools and students being affected, and we're very hopeful that the results of those initiatives are going to be reflected in the kinds of performance measures the Auditor General is suggesting we need.

The Chairman: Ms. Sgro.

Ms. Judy Sgro (York West, Lib.): When was the last time the auditor's department did a report on this department? This is something you're doing on a regular basis, I assume, for all of the departments. When was the last time an audit was done on this particular department?

Ms. Sheila Fraser: We tend to do about one audit per year on DIAND. It could cover different programs and different sectors, but there's generally one audit per year on DIAND.

Mr. Grant Wilson: If I might add something, the last time we looked at education for Indian Affairs was thirteen years ago.

Ms. Judy Sgro: It was thirteen years ago?

Mr. Grant Wilson: For this program.

Ms. Judy Sgro: It was this program I was concerned about. So it was thirteen years ago.

You've made a whole lot of recommendations in the report. What mechanism is there going to be to follow up on those recommendations? I'm not sure. Excuse me for not knowing the process here well enough yet, but you've made your recommendations. Who follows up on those recommendations, and at what point does a report come back as an ongoing report, so that whatever department they are going to follows up on those things?

Ms. Sheila Fraser: As part of our ongoing process of audit, we do follow-ups generally two years after an audit has been published. In some cases the time may vary, depending on initiatives that may be going on in the department, but generally in two years we'll go back to see what action the department has taken on our recommendations.

The Chairman: Also, the report tabled by this committee in the House, where we ask the department to respond within 150 days, is a public report of course, and that's part of the Auditor General's follow-up review as to the implementation of any recommendations by this committee.

Ms. Shirley Serafini: To complement that at the department, when we get these recommendations either from the Auditor General or from our internal audit, for that matter—we have an audit and evaluation committee in the department—the responsible parts of the department have to develop management plans, we have to approve those in our audit and evaluation committee, and then we track the follow-up in terms of action on those recommendations.

Ms. Judy Sgro: Do you report back to any of the committees in particular on the action plan and how it's going?

Ms. Shirley Serafini: If we were requested to, we would. Certainly the Auditor General would be asking, when they come back for their periodic follow-up, “What have you done?” So that would be how we would use it.

Ms. Judy Sgro: Thank you.

The Chairman: Thank you, Ms. Sgro.

Do you receive from first nations specific financial statements regarding this particular program, on how the money is spent and so on?

Mr. Dennis Wallace: We receive an audit. As I mentioned earlier, the Department of Indian Affairs and Northern Development is one of the departments in the Government of Canada that requires annual audits. In those audits there would be a revenue and expenditure statement as well as schedules that would account for contributions from the Government of Canada to the Department of Indian Affairs and Northern Development and how in fact they were used.

The Chairman: No, my question was on this particular program. I'm not talking about the financial transfer arrangements or umbrella agreements.

Mr. Dennis Wallace: That would include education.

The Chairman: But do you have a specific, dedicated report on education and the financial information regarding that?

Ms. Shirley Serafini: Many of the first nations do report their revenue and expenditures on a program basis, and that would include the elementary and secondary education. Some go further and provide detail on—

The Chairman: Are they available to be made public?

Ms. Shirley Serafini: Our overall consolidated audits are not made public.

The Chairman: I know. I asked about this one.

Ms. Shirley Serafini: Well, it's embedded in those consolidated audits.

The Chairman: Okay.

Ms. Shirley Serafini: That's one of the things that is currently.... As you know, the minister has indicated an interest in working with the first nations and the CGA to find a way of raking those out. So that's under discussion.

• 1640

The Chairman: As you know, it's the Montana case that prevents this from being made public. I would hope, as I recommended last year when DIAND was before our committee on the FTAs, that you would specifically build into the FTAs that there be no private money commingled with the financial statements, thereby that these financial statements can be made public. Do you think that's possible?

Mr. Dennis Wallace: The intent is to develop schedules that would show federal contributions and how those funds were used.

The Chairman: Would these be public documents?

Mr. Dennis Wallace: I believe that was the comment of the minister in appearing.

Ms. Shirley Serafini: That would be the intention. Then we would be over that constraint of the Montana case in terms of making that part of it public.

The Chairman: Okay.

In section 4.48 of the Auditor General's report, he says:

In another region, where costs ranged from $2,047 to $65,650 per special needs student, there was no process or mechanism to ensure that student needs were being served.

Do you just write cheques as requested? On what basis would you question $65,000 per special needs child? We're not talking here about an identified special needs child who must be extremely and severely handicapped. We're talking per special needs student. That's everybody from mild disability to extreme disability. That's $65,000. Don't you question that type of expenditure?

Mr. Bob Coulter: Mr. Chairman, I believe these numbers are for children with very severe learning and medical disabilities.

The Chairman: Mr. Wilson, is that correct?

Mr. Grant Wilson: That would be correct, Mr. Chair. The issue was that the department didn't have a mechanism to ensure that the needs were being served. The issue was not whether the $65,000 was appropriate, but rather, having provided the $65,000 for this requirement, whether in fact the special needs were being met. It's an issue of information back to the department and whether the department requires or asks for that or is necessarily concerned about it.

The Chairman: Well, $65,000 per year would be more than one person totally and absolutely dedicated to helping that student. That hardly seems to be education. It sounds like it's perhaps nursing assistance or qualified medical assistance. Are you talking about a dedicated teacher per person?

Mr. John Richardson: There are children with strong needs. It happens in every city in Canada.

Mr. Grant Wilson: Mr. Chair, this particular instance is a special needs student.

The Chairman: Okay.

In section 4.64 you say “It is noteworthy that education funding and costs may be different from each other,” but in your comment in the margin you say “The Department does not know how much money is being spent by First Nations on education” because under other agreements they can siphon the money off into different programs.

Education is an important thing. I pointed out at the beginning that 20% of the students are not going to school even though they have a legal requirement to go to school. Now you're granting money to these first nations to educate children and you don't know where the money's going.

Ms. Shirley Serafini: This comes back to the question we were talking about earlier about how our funding arrangements work. They allow for flexibility for the first nations to move funds around. In some cases they move money into education more than in other cases. If there is more than they need there in a particular year, they have the flexibility to move it into other areas. What they are required to do with the funds we provide them is to live up to the standards that are required, i.e., to provide education with qualified teachers at a standard that is comparable to the province.

The Chairman: It's fairly obvious from the report that this is not being done, and yet we do not have transparency. We don't know where the money's going. We vote for it in this Parliament for every other department and there's complete and absolute transparency as to where the money goes. There's accountability back to this place as to how the money has been spent. But in DIAND it disappears into a black hole and we find that there's no transparency. These financial statements are not available to the public; they are precluded from publication.

• 1645

We are voting money for education in DIAND, and by your own admission, it's ending up somewhere else and we don't know about it. This is not good governance. The Montana case has been around for over 13 years now and you're not building into the FTAs, the financial transfer agreements, that private money must be excluded from public money and public money reported on an open and transparent basis. I think you have a fundamental responsibility to do that for this House. Because you don't, we find these kinds of reports coming forward. This is a fairly damning report, an extremely damning report, in my opinion.

Ms. Shirley Serafini: Excuse me, Chairman. As I was saying earlier, in fact that question of separating the funding is something we are currently working on. It's not that easy to do, to disentangle things. We're working on it with the first nations and the certified general accountants in terms of looking at whether there are different ways that we can report these things and break them out. So the work is underway to address that concern.

The Chairman: It seems perfectly feasible for everybody else. I don't know why it wouldn't be feasible for the first nations, especially since the FTAs are all subsequent to the Montana case of 1980-88.

Madam Fraser.

Ms. Sheila Fraser: Mr. Chair, I'd just like to add to this that we do not have an issue in the report on the transfer of funding between programs necessarily. We think the department should know how much first nations are spending on education and they should have that information available to them.

The Chairman: Then I think it should be made public, too.

Mr. Konrad.

Mr. Derrek Konrad: I want to follow up on what the chairman just said. The budget for Indian education is $1 billion, give or take a few million, right? You have 20% of the kids not in school. Shouldn't the budget be reflecting the number of kids in school? In other words, shouldn't taxpayers get a $200-million annual tax break for the kids not being educated or shouldn't the department get those kids in their desks, in their schools, and make it a priority?

Mr. Bob Coulter: The funding is allocated on a per-student basis roughly comparable to the costs incurred locally in provincial school systems, with a small amount of additional funding for aboriginal curriculum development in languages. The amount of money that's provided is based on the number of students who are actually in the school system, rather than on a total population.

With the provinces, for example, we generally pay a set amount for each student who lives on a reserve and attends a provincial school. If the students aren't attending, we're not paying those bills. So the $1 billion equates to the number of students rather than the potentially eligible population.

The Chairman: If you don't mind, I would ask a clarification question there. You pay the provinces for the number of native children attending a provincial school. You pay the first nations based on the number of children on the reserve, less the number who are attending the provincial school.

Mr. Bob Coulter: The agreement is very slightly—

The Chairman: But is that the basic concept?

Mr. Bob Coulter: The basic concept is that we provide funding for all of the students who live on the reserve and the first nations enter into agreements with the local school boards for those who attend provincial schools.

The Chairman: Okay, it works the other way around. You pay the first nations based on the number of children on the reserve, all of them, and then the first nations pay the provincial authorities for the number who attend the provincial school.

Mr. Bob Coulter: That's generally how it works.

The Chairman: Was it 40% or 60% who attend the provincial school?

Ms. Shirley Serafini: Forty.

Mr. Bob Coulter: Forty.

The Chairman: So 40% go to the provincial schools and you're paying the reserves for the other 60%, albeit 20% are not going to school. Therefore, you're paying—if my math is right—50% more per student in school on the reserve because you're funding the ones who don't go to school.

• 1650

Ms. Shirley Serafini: No.

Mr. Bob Coulter: No.

The Chairman: No? Have I got it wrong? Where am I getting it wrong?

Mr. John Richardson: You have to go to school to get it.

The Chairman: No, they don't.

Mr. John Richardson: Yes, they do.

The Chairman: Okay, let's get the question.

Mr. Dennis Wallace: Each year, Mr. Chairman, we conduct a nominal roll, or a nominal roll is conducted by the first nation, which has to set out the number of students who are in attendance. This is a document that's used for determining how much resourcing that community will receive. In fact we do compliance reviews on it, and you've seen evidence of that in the media from time to time.

The Chairman: My first point was that you pay the reserve based on the number of eligible students on the reserve.

Ms. Shirley Serafini: No.

Mr. Dennis Wallace: No.

The Chairman: So that is not correct.

Mr. Dennis Wallace: No.

Ms. Shirley Serafini: No, the number of real students.

The Chairman: The number of students who are actually going to school.

Mr. Dennis Wallace: Who are in the classroom.

The Chairman: And if they're going to the classroom in a provincial school, the first nation pays the province; if they go to a classroom on the reserve, they keep the money and provide the service.

Ms. Shirley Serafini: Yes.

The Chairman: So you're not paying for those not in school.

Mr. Dennis Wallace: No.

Ms. Shirley Serafini: Correct.

Mr. Grant Wilson: No.

The Chairman: Am I correct in that, Mr. Wilson?

Mr. Dennis Wallace: And neither do we pay, Mr. Chairman, for first nations students where their families live in an urban setting. They would be the responsibility of a provincial government. So those are for members on reserve.

The Chairman: I'm glad to get the correction.

We're getting rather informal here. Ms. Jennings.

Ms. Marlene Jennings: Yes. I'm glad you were able to clarify that for the chair of the committee. It appears that the funding for education of first nations students is no different in terms of the basis on which the funding flows from what it is in the non-aboriginal schools. My daughter's in school, and I know that in about the month of October they send home notices saying “Please have your child in school on Monday, October 2, because we will be taking roll call for the provincial government's statistics, and that will determine the funding that will flow to the school board and then from the school board to the school”. So it's exactly the same system DIAND is using that the provincial government, at least in the province of Quebec, uses. And I would assume it's probably the same in the other provinces and territorial governments.

Let's try to mine another area, now that we've clarified the confusion in the chairman's mind on that issue.

The Chairman: There's no confusion in my mind.

Ms. Marlene Jennings: Everybody else seemed to be clear.

To come back to the issue of culturally appropriate educational programs, you do have funding for that. In terms of the development of the pedagogical content and the tools that are used, I know for instance in Quebec it's the educational ministry or department that actually develops the so-called pedagogical tools and then they stream it down to the teachers and the teachers may have a little bit of latitude as to what content they can use, but it's pretty much set out. So if the ministry or department hasn't taken the effort to develop culturally sensitive tools, forget about it in the school unless you have some super-dedicated teacher who's prepared to put in 100-hour weeks to develop their own tools and still meet the provinces' standards.

How does that happen in on-reserve schools, where the schools are actually, through agreements with the first nation, in the hands of the first nation on the reserve? How does that happen?

Mr. Bob Coulter: In most of the provinces, at least the western provinces, they're developing parallel aboriginal content in programming that can be delivered.

I think you make a very good point that it's a major effort in all schools in Canada, on reserve and off reserve, to meet the provincial curriculum and to try to do cultural educational programs, and language education on top of that is a challenge. And I think the solution that's emerging is really a dedicated curriculum approved by provincial ministries, through which the core curriculum is contained, but in a culturally appropriate context that the ministry and first nations have developed for that purpose. It's really encouraging to see that work going on.

• 1655

Ms. Marlene Jennings: And is DIAND assisting, either through expertise you may have developed, or through networks you may have developed where the expertise exists, or through funding or through all three, the first nations to be able to develop that curricula that is independent yet at the same time approved by the provincial authority in education?

Mr. Bob Coulter: We do provide some funding to first nations for cultural development. We also have a small program that resources cultural education centres, which do a fair amount of work on cultural and curriculum development.

Ms. Marlene Jennings: Thank you very much.

Mr. Bob Coulter: Thank you.

Ms. Shirley Serafini: I have two examples. In Nova Scotia the Mi'kmaq and in Alberta the tribal chiefs have been working with the education ministries in those two provinces to design aboriginal language and cultural curricula for use in both the first nations and the provincial schools.

Ms. Marlene Jennings: Great. Thank you.

The Chairman: Mr. Konrad.

Mr. Derrek Konrad: Thank you.

If I may, I want to get to the part of the report that deals with students in post-secondary education, because the department seems to make much of it.

First, how do you know there are 27,000 students in post-secondary education? Is it because you're paying the bills for 27,000 students?

Ms. Shirley Serafini: Yes. But there may well be more.

Mr. Derrek Konrad: Secondly, how do you know whether they graduate or not? Do you simply stop paying bills, or do you have statistics on graduates so that you know what the success rate is of this post-secondary training?

Mr. Bob Coulter: We have some statistics on graduates and fields of study. I don't have them with me, but we could make them available.

Mr. Derrek Konrad: Would you, please?

Mr. Bob Coulter: Certainly.

Mr. Derrek Konrad: You might as well make them available to the committee.

Ms. Sheila Fraser: Mr. Konrad, I'd like to add a point of clarification: that the funding for post-secondary students, while it is not covered in this audit, goes as well to first nations, and it's first nations who then fund the students, not the department that funds them directly.

Mr. Derrek Konrad: I have an aboriginal niece and a nephew who are taking post-secondary training, so I know that. Thank you, anyway.

I think that's all I wanted to know about it. Thanks. I'll pass for now.

The Chairman: Thank you, Mr. Konrad.

In the Auditor General's report, paragraph 4.74, it says:

For example, as of December 1999, 17 provincial school districts in one region reported that 23 First Nations were not paying tuition costs as agreed. The outstanding amount was $6.3 million.

Who has the money? Have you paid it to first nations and they have not passed it on, or do you still have the cash?

Ms. Shirley Serafini: There have been disputes about—

The Chairman: But who has the cash?

Ms. Shirley Serafini: I think in most cases, nearly all cases, the funding goes to the first nations, as we explained, and then the first nations enter into the agreements with the provinces.

The Chairman: So you're saying they have the money.

Ms. Shirley Serafini: In some cases there are disputes. For example, a first nation might dispute the enrolment figures or the amounts that are being charged per student. In fact, in one or two cases the first nations are taking it to the courts. So it's not a matter necessarily that they're just saying they won't pay. They're disagreeing about the amount and are working that out.

In B.C., I think it is, we worked out between the province and the first nations, and through their school association, a dispute resolution mechanism to deal with it when there are these kinds of differences.

The Chairman: Ms. Fraser, do you have anything to add to this?

Ms. Sheila Fraser: Mr. Chair, I'd like to add that this goes back to the question we raise—and I think several of the questions that have been asked previously—that the department has to define its role, how much of a role and what type of role it plays in education. Is it simply a funding mechanism? Does it get involved in developing curricula? Does it get involved in resolving disputes? There needs to be clarity and an articulation of the role of the department, because it is not consistent across the regions.

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The Chairman: Yes, and this is one region. This isn't a band here and a reserve there and a disagreement somewhere else. Seventeen provincial school districts in one region have this problem. I'm fuzzy, but I think $6,000 per student per year is roughly what it takes to educate a child in a Canadian school. So if my math is right, we're talking about 6,000 children in dispute, for $6.3 million. That's if they didn't go to school at all and the province said they want to get paid for them, to add up to $6.3 million.

It seems you have a fairly laissez-faire attitude of just writing the cheques and saying “It's all your responsibility.” The province is saying they want some money, and you just keep sending more cheques. Have you looked into this issue?

Ms. Shirley Serafini: Actually, as I understand it, the situation now is that out of the 600 first nations across the country, less than 10% have any kinds of provincial tuition payment disagreements right now. So it's important to put it in perspective.

The Chairman: That's 60.

Ms. Shirley Serafini: It's 46 out of 600 first nations. I don't have the number of students. I have it in terms of the number of first nations.

The Chairman: Yes, and 23 are all in one region. So half of them are all in one region.

Ms. Shirley Serafini: Those don't seem to be the current figures. This might have been at the time when the Auditor General did their report, but as I understand it, that isn't the situation now.

The department's view is this is something we would like the first nation to sort out with the province. We do get involved in facilitating that, helping that to happen, and trying to get to the bottom of what the difference is. If there are cases where a first nation is in third-party management—i.e., they're not managing their own funds—then of course the funds will get directly delivered to the provinces.

The Chairman: So the fact that the cash is sitting in somebody else's bank account in a non-transparent environment is not going to cause a loss to taxpayers?

Mr. Bob Coulter: Mr. Chairman, might I just add something to Mrs. Serafini's comments?

The Chairman: Yes.

Mr. Bob Coulter: The $6.3 million identified in the region was in September, at the beginning of the school year. With some mediation that the department in part arranged, the number is now down to $1.6 million in that province, involving two first nations and one school board. Those first nations are disputing that amount in court.

The Chairman: Yes, but my question was, because the money is now sitting in a non-transparent environment, is there any danger that the taxpayer is at risk here?

Mr. Dennis Wallace: The department, through the audits we conduct, knows the status of the funds at the end of the fiscal year. If there's a dispute, the department more often than not is contacted by the Ministry of Education or the local school board. We also engage or intervene in the course of a year as well.

So there are audits. We do know what the status of the funding is.

The Chairman: Okay, let me ask the question again then. In a non-transparent environment, is there still any potential loss to the taxpayer, of having to pay twice if the provincial school board wins and says “You owe us” and the money isn't available? Because the money is in a non-transparent environment, we can't find out, as parliamentarians, what the situation of that money is. So specifically, is there any potential loss to the taxpayer because it's in a non-transparent environment?

Ms. Shirley Serafini: I think—

The Chairman: Yes or no?

Ms. Shirley Serafini: No, because the disputes get sorted out over time. It's like when there are transfer agreements between federal and provincial governments, and things are being billed back. It sometimes takes a long time to actually work out exactly what the final amounts are, but they get sorted out.

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The Chairman: But when the final amount is worked out, and I'm just going to make the assumption that the money is owed to the provincial school board, is the money still available to pay?

Ms. Shirley Serafini: Yes.

Mr. Dennis Wallace: If you're implying there could be a deficit in the first nation and it would be unable to pay, the department would work out a recovery plan with the first nation. The obligation would be met and the department would recover any funds that were outstanding from the operations of the first nation. We would account for it.

The Chairman: It wouldn't be the first time there was a deficit in the first nations. Then again, through the lack of transparency, which bothers me greatly, we really can't assess the situation.

Ms Jennings.

Ms. Marlene Jennings: Considering that we're going to talk about deficits within the first nations, why don't we look at 4.80, which talks about a deficit reported by a first nation? It triggered a review that disclosed there was a tuition overbilling by a provincial education authority to that first nation of close to $1 million. So I think it works both ways.

The issue should be whether or not there are proper monitoring mechanisms in place that will cover, so if there's overbilling to the first nation, it's discovered quickly and in a timely fashion, and can be recovered in a quick and timely fashion. If there is underbilling, that can also be discovered. That should be the issue.

The way the questions have been posed makes it seem like the negligence has all been on the side of the capacity of the first nations, whereas in the same report there appears to have been negligence on the part of the provincial authorities at times. Their own billing mechanisms were not adequate, and transparency can leave much to be desired on that level as well.

The Chairman: Thank you for bringing that point out, Ms. Jennings.

Ms. Marlene Jennings: I've made my point. Thank you.

The Chairman: Mr. Konrad.

Mr. Derrek Konrad: Thank you.

With regard to what Ms. Jennings had to say, that's exactly why the transparency needs to be there, in my opinion.

Mr. John Richardson: Both ways.

Mr. Derrek Konrad: Don't interrupt me when I'm trying to say something here. I'm making the point and you're trying to interfere.

The point is that it's still the taxpayer who is at risk; it doesn't matter which way the wrong billing goes.

I want to go back to 4.66, where it states:

We also observed that current methods used to allocate funds from the Department's headquarters to its regions are based largely on information that was developed at least 15 years ago.

You're talking about methods and information. Current methods are based on old information. Did the Auditor General find any signs of life on gathering information that was up to date that they could begin to use for making these transfers?

Ms. Sheila Fraser: To our knowledge, there has been no review of the funding mechanisms, so there is no analysis to determine whether they are still appropriate or not.

Mr. Derrek Konrad: But are we talking about statistical data here, or are we talking...?

Ms. Sheila Fraser: It's the formula used to allocate the funds to the various regions. The issue is that some regions may have changed circumstances, and may be getting inappropriate funding.

Mr. Derrek Konrad: Did you find a lot of variation across Canada in the amount that was paid by first nations for funding in provincial schools?

Ms. Sheila Fraser: I'll ask Grant Wilson to respond to that.

Mr. Grant Wilson: We have some funding numbers for the three regions we looked at. But when we talk about fifteen years, in terms of the allocation, there are two steps in the allocation process. First, headquarters determines, through the 15-year-old formula, what moneys will go to what regions. Based on that, the nominal roll is used to calculate how much per student, and so on, based on the provincial rates.

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Of course, provincial rates will change. I'll give you an example. For the Ontario region, the funding allocation per student is about $7,800; for the Manitoba region it's $7,600; and for the B.C. region it's $8,100. Those figures are based on quite a complicated formula, realistically. Those are the numbers that pop out that are provided.

When we raised the issue about the allocation to regions, it was because situations may have changed, as Madam Fraser has indicated. There may be more or less rural-urban mix, less remoteness, more roads, and so on. So that might make a difference in the long run, as to a reallocation. Obviously, if moneys stayed the same, some first nations would receive more and others would receive less.

Ms. Marlene Jennings: It's really sensitive.

Mr. Grant Wilson: I know. It becomes a real problem.

Mr. Derrek Konrad: Thank you.

Ms. Serafini, are you planning to act on this information that's been brought to your attention on the dated information?

Ms. Shirley Serafini: I note that the data is, as I said, 15 years old, so that funding formula goes way back. I guess our sense is that things haven't changed all that much, in terms of remoteness factors, roads, and size of schools. But it is something that, in the context of moving forward, we will certainly want to look at to see if there is a fairer allocation.

Bob.

Mr. Bob Coulter: As you said, the main drivers in the formula stay the same. The principal driver is teachers' salaries, and that is an element. The amount has changed. Teachers' salaries are in the formula, as well as heat, light etc. Those are the elements that have remained.

There is some adjustment for remoteness when roads, etc., are built. In the overall scheme of things, one or two communities wouldn't affect the allocations that greatly, when the main drivers are teachers' salaries, heat and light, etc.

The Chairman: At the beginning I asked about the legal requirement. I would like you to write the committee a letter telling us what the legal requirement is for first nations children on reserves to attend school, and the penalties for not doing so. If there is a penalty for not doing so, with 20% not attending school, perhaps you can tell us why you haven't applied the law.

You also mentioned that you take the Auditor General's report seriously. I see in 4.90 there are quite a number of recommendations. I'm not going to bother reading them all, but what the Auditor General feels are major issues that need to be addressed are lack of education on funding agreements, resolution of agreements in dispute, lack of written criteria for the selection of education funding agreements, and so on. There are other recommendations throughout the report.

I would like to see the majority of these recommendations, if not all of them, implemented by the time we get a two-year review by the Auditor General. I'm sure if they are not implemented you'll be able to supply the Auditor General with a full rationale as to why you disagree. Perhaps, Ms. Fraser, we can expect to see these rationales in the follow-up report, because education of our next generation of children is vitally important.

When I read that 20% are not going to school and have a legal requirement to go to school, what hope do they have of making their way in this highly complex technological society we now have? As a government, we have a responsibility to teach all Canadians, and we fail Canadians if we fail to teach the kids.

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So I would hope that you take this issue very seriously and that in the follow-up review we'll see a marked improvement both in the monitoring and the accountability, because it doesn't matter if it's education of children or the Minister of Finance handling a $160 billion budget, accountability is fundamental to ensuring that results are achieved. You have an obligation to ensure these results are achieved. And as I said, I can't speak strongly enough against the lack of transparency, because the financial statements and reports from the first nations are not made public.

We spend $1 billion in education, about $4 billion or $5 billion in total that disappears, and there's absolutely no accounting back to this House as to how, or on the quality of what we get for the amount of money we spend. I think that needs to be addressed, but that's a slightly different issue.

Are there any other questions, or will we wrap this up? Mr. Konrad.

Mr. Derrek Konrad: I was just reading the Indian Act a little bit while the discussion was going on here, and I know there's a requirement for truant officers.

Do bands have actual truant officers? Do you know of any that do, or does the funding to provinces also include funds for truant officers? Is that part of the formula?

Ms. Shirley Serafini: We'll have to get back to you with details.

Mr. Dennis Wallace: Each first nation is different.

Ms. Shirley Serafini: That's right.

The Chairman: They'll return the information.

Ms. Shirley Serafini: We'll respond to the question the chair asked us to get back on.

Mr. Derrek Konrad: Thank you. I don't think I have anything to add. Thank you.

The Chairman: Ms. Jennings, do you have any more questions?

We will now have some closing remarks from the Deputy Auditor General.

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

We would like to say that this is a very complex and difficult issue. It is not going to be resolved quickly. We are encouraged by the response of the department to this audit, but we strongly believe the department needs to clearly articulate its role and it also needs to develop an action plan with target dates, integrating all the various initiatives it is undertaking.

The Chairman: Thank you very much.

So there's the Auditor General's indication, Ms. Serafini, as to what they would like, and as I say, two years from now we'll be discussing this issue again. And for the benefit of the kids, we hope it's a good report.

Ms. Shirley Serafini: As I indicated at the outset, we also take this very seriously. We look at this as a constructive help. And with the kinds of initiatives that are underway with first nations and the provinces under Gathering Strength, we think we will be able to really show a lot of progress and improvements that will address the kinds of concerns that have been raised and do need to be addressed, absolutely.

The Chairman: We appreciate those positive words.

The meeting is adjourned.