PACC Committee Meeting

37th PARLIAMENT, 2nd SESSION

Standing Committee on Public Accounts

EVIDENCE

CONTENTS

Monday, May 5, 2003

¹

1530

The Chair (Mr. John Williams (St. Albert, Canadian Alliance))

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

¹

1535

The Chair

Ms. Joan Atkinson (Assistant Deputy Minister, Socio-Economic Policy and Programs Sector, Department of Indian Affairs and Northern Development)

¹

1540

The Vice-Chair (Ms. Beth Phinney (Hamilton Mountain, Lib.))

¹

1545

Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian Alliance)

Ms. Joan Atkinson

Ms. Val Meredith

The Chair

Ms. Val Meredith

The Chair

Ms. Val Meredith

¹

1550

Ms. Joan Atkinson

Ms. Val Meredith

Ms. Joan Atkinson

Ms. Val Meredith

Ms. Joan Atkinson

Ms. Val Meredith

Ms. Joan Atkinson

¹

1555

Ms. Maria Barrados

The Vice-Chair (Ms. Beth Phinney)

Mr. Roger Gaudet (Berthier—Montcalm, BQ)

Ms. Joan Atkinson

Mr. Roger Gaudet

Ms. Joan Atkinson

Mr. Douglas Stewart (Vice-President, Policy and Programs, Canada Mortgage and Housing Corporation)

º

1600

The Vice-Chair (Ms. Beth Phinney)

The Vice-Chair (Ms. Beth Phinney)

Mr. Roger Gaudet

The Vice-Chair (Ms. Beth Phinney)

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.)

º

1625

Ms. Joan Atkinson

Mr. John O'Reilly

Ms. Maria Barrados

Mr. John O'Reilly

º

1630

Ms. Joan Atkinson

Ms. Maria Barrados

The Vice-Chair (Ms. Beth Phinney)

Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP)

º

1635

Ms. Joan Atkinson

Ms. Judy Wasylycia-Leis

Ms. Joan Atkinson

º

1640

Ms. Judy Wasylycia-Leis

Ms. Joan Atkinson

Mr. Douglas Stewart

Ms. Judy Wasylycia-Leis

Mr. Douglas Stewart

Ms. Judy Wasylycia-Leis

Mr. Douglas Stewart

Ms. Judy Wasylycia-Leis

Mr. Douglas Stewart

The Chair

Ms. Val Meredith

Mr. Douglas Stewart

Ms. Val Meredith

Ms. Joan Atkinson

Ms. Val Meredith

º

1645

Ms. Joan Atkinson

Ms. Maria Barrados

Ms. Val Meredith

Ms. Joan Atkinson

The Chair

Mr. Roger Gaudet

Mr. Gilles Rochon (Director General, Community Development Branch, Socio-Economic Policy and Programs Sector, Department of Indian Affairs and Northern Development)

º

1650

Mr. Roger Gaudet

Ms. Joan Atkinson

Mr. Roger Gaudet

Mr. Douglas Stewart

The Chair

Mr. John O'Reilly

º

1655

Ms. Joan Atkinson

Mr. John O'Reilly

Ms. Joan Atkinson

Mr. John O'Reilly

Ms. Joan Atkinson

Mr. John O'Reilly

The Chair

Mr. Douglas Stewart

The Chair

Mr. John O'Reilly

The Chair

Mr. John O'Reilly

The Chair

Ms. Judy Wasylycia-Leis

Ms. Joan Atkinson

Ms. Judy Wasylycia-Leis

Ms. Joan Atkinson

»

1700

Ms. Judy Wasylycia-Leis

Ms. Joan Atkinson

The Chair

Ms. Val Meredith

Ms. Joan Atkinson

Ms. Val Meredith

Ms. Joan Atkinson

Mr. Gilles Rochon

»

1705

Ms. Val Meredith

Mr. Gilles Rochon

Ms. Val Meredith

Mr. Gilles Rochon

The Chair

Ms. Maria Barrados

Ms. Val Meredith

Ms. Maria Barrados

Ms. Val Meredith

Ms. Maria Barrados

Ms. Val Meredith

Ms. Maria Barrados

The Chair

Mr. Roger Gaudet

Mr. Douglas Stewart

Mr. Roger Gaudet

Mr. Gilles Rochon

Mr. Roger Gaudet

Mr. Gilles Rochon

Mr. Roger Gaudet

»

1710

The Chair

Mr. John O'Reilly

Ms. Maria Barrados

Mr. Joe Martire (Principal, Office of the Auditor General of Canada)

The Chair

Ms. Beth Phinney

Mr. Douglas Stewart

Ms. Beth Phinney

Mr. Douglas Stewart

Ms. Beth Phinney

Mr. Douglas Stewart

»

1715

Ms. Beth Phinney

Mr. Douglas Stewart

Ms. Beth Phinney

The Chair

Ms. Judy Wasylycia-Leis

The Chair

Ms. Joan Atkinson

The Chair

Ms. Joan Atkinson

The Chair

Ms. Joan Atkinson

The Chair

Ms. Joan Atkinson

The Chair

Ms. Joan Atkinson

The Chair

Ms. Joan Atkinson

Mr. Gilles Rochon

The Chair

Ms. Joan Atkinson

The Chair

Ms. Joan Atkinson

The Chair

»

1720

Ms. Joan Atkinson

The Chair

Mr. Roger Gaudet

Mr. Gilles Rochon

Mr. Roger Gaudet

The Chair

Ms. Maria Barrados

The Chair

Ms. Elaine Johnston (Director, Health Secretariat, Assembly of First Nations)

»

1725

»

1730

The Chair

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CANADA

Standing Committee on Public Accounts

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NUMBER 027

l

2nd SESSION

l

37th PARLIAMENT

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EVIDENCE

Monday, May 5, 2003

[Recorded by Electronic Apparatus]

¹  (1530)  

[English]

    The Chair (Mr. John Williams (St. Albert, Canadian Alliance)): Good afternoon, everybody.

    The orders of the day are the adoption of the third report of the Subcommittee on Agenda and Procedure, the 2003 Canadian Council of Public Accounts Committees, travel agendas and so on--that's the conference to be held in Winnipeg in September--and pursuant to Standing Order 108(3)(e), consideration of chapter 6, “Federal Government Support to First Nations--Housing on Reserves”, of the April 2003 report of the Auditor General of Canada.

    We're going to start with item C, since we have sufficient members to hear testimony, but we do not have enough to pass motions. Our witnesses today are, from the Office of the Auditor General of Canada, Ms. Maria Barrados,Assistant Auditor General, Mr. Joe Martire, principal with the office, and Mr. André Côté, a director; from the Department of Indian Affairs and Northern Development, Ms. Joan Atkinson, Assistant Deputy Minister, Socio-economic Policy and Programs Sector, and Mr. Gilles Rochon,director general, Community Development Branch, Socio-economic Policy and Programs Sector; from Canada Mortgage and Housing Corporation, Mr. Douglas Stewart, vice-president, policy and programs, and Deborah Taylor, director of assisted housing division.

    Later on, before the meeting adjourns, we'll deal with item D, which is, pursuant to a motion of the committee dated February 25, 2003, and to Standing Order 108(3)(e), an update on the non-insured health benefits program of chapter 15, “Health Canada--First Nations Health”, of the October 2000 report of the Auditor General of Canada--refer to committee report 10, 37-1. The witness regarding that report will be from the Assembly of First Nations, Ms. Elaine Johnston, director of the health secretariat.

    Without further ado, Ms. Barrados, over to you.

    Ms. Maria Barrados (Assistant Auditor General, Office of the Auditor General of Canada): Mr. Chairman, thank you for this opportunity to present the results of chapter 6 of our April 2003 report on the federal government's support to first nations housing on reserves. With me today are Mr. Joe Martire, the principal responsible for the audit, and Mr. André Côté, the director. This audit is in support of the Auditor General's priority on aboriginal issues. In December 2002 we published a study on the reporting burden first nations face because of the requirements of four federal organizations. They required at least 168 reports annually.

    Our April report reviewed policy developments and analysed information covering the 10 years since our last audit of on-reserve housing. Over this period we estimate that the federal government invested about $3.8 billion. We also examined the current support for on-reserve housing by Indian and Northern Affairs, DIAND, and Canada Mortgage and Housing Corporation, CMHC. Although the Auditor General is not the auditor of first nations, we seek and take into account their views. Their input was extremely helpful, and we are grateful for their continued support.

    There are three key areas I would like to touch on briefly in my remarks. The first deals with the need to address the critical housing shortage on reserves, the second the complexity of the current programs, the third areas for performance improvement.

[Translation]

    Housing on reserve is fundamentally different and more complex than housing off reserve. It is governed by the legal framework defined by the Indian Act, which does not provide for activities otherwise taken for granted. For example, it is not possible to take out a regular mortgage from a bank to buy a house on a reserve.

    Numerous studies have called for action to address the shortage of adequate houses on reserves. Yet, despite these studies and a significant investment of federal funds, many First Nations are still facing a critical housing shortage do accommodate a young and growing population.

    The numbers are telling. The shortage of 8,500 houses, which is forecasted to increase by about 2,000 units per year over the next 10 years. Furthermore about 44 per cent of the 89,000 existing houses require renovations.

¹  (1535)  

[English]

    It is difficult for us to assess whether the federal contribution is an appropriate amount, in part because neither INAC nor CMHC have clearly defined what the federal assistance is intended to achieve in addressing the critical housing shortage, nor have they defined the timeframe in which to achieve it. Your committee may wish to seek further clarification from departmental officials on this matter.

    We found that first nations at present have to contend with two federal housing policies and up to five funding and two operating agreements, each having different administrative and reporting requirements. The first nations we visited told us they do not understand why they have to deal with two organizations for housing and find their programs confusing and costly to administer. Our study on reporting requirements identified similar concerns in other federal programs. The two organizations are not always clear about their roles and responsibilities, for example, on who is accountable for allocating CMHC funds to regions. The committee may wish to seek clarification on how roles and responsibilities are being defined, including streamlining programs.

    The audit identified a number of other steps that we believe need to be taken promptly to improve program performance and compliance with authorities. They include developing a strategy and action plan to address the problem of mould, ensuring that all federally subsidized houses meet the national building code, and obtaining the necessary program authority from Treasury Board. We also concluded that parliamentarians have not been getting a complete picture of the housing situation on reserves and the difference the federal assistance is making in addressing the critical shortage of adequate houses.

    Mr. Chairman, that concludes my opening statement. My colleagues and I would be pleased to answer any questions members may have.

    The Chair: Thank you very much, Ms. Barrados.

    Now we'll turn to Ms. Atkinson for her opening statement.

    Ms. Joan Atkinson (Assistant Deputy Minister, Socio-Economic Policy and Programs Sector, Department of Indian Affairs and Northern Development): Thank you very much, and thank you for the opportunity to provide you with some of our views regarding the pressing problem of on-reserve housing.

    With me today is Gilles Rochon, the director general who has responsibility for housing, among other things, in his particular branch, to help answer questions.

    In 1996 we introduced a new housing policy. This policy is based on four key elements. The first is greater first nations control over local policies and programs that meet local needs. The second is increased first nation expertise in regard not only to the necessary skills to build their houses, but also to the skills to manage and administer their housing programs. Third, the policy is predicated on the concept that the responsibility for planning for housing resides primarily in the communities themselves. This increased responsibility for the communities is consistent with the principles contained in the report of the Royal Commission on Aboriginal Peoples. I have to point out that my department's funding was never intended to cover the full cost of building homes, but was provided, as a matter of social policy, to help communities realize their need for decent, affordable housing.

¹  (1540)  

[Translation]

Lastly, the policy recognized that there is a need for better access to private sector financing. We have to encourage communities to seek private sector investments in their housing projects.

[English]

    It's our view that our housing policy is working. From March 1996 to March 2002 the number of houses on reserve has increased from 78,187 to 91,652. However, we have to acknowledge that overall housing conditions in first nations communities remain well below Canadian norms. Many first nations still face a large backlog of substandard and overcrowded houses. It's interesting to point out that 18.6% of dwellings on reserve have more than one person per room, compared to 1.7% in Canada as a whole. Indeed, new family formations are expected to continue at a rate of 4,500 per year for at least the next 10 years, while construction starts have averaged only 2,600 each year over the past five years.

    We are also aware of a growing mould problem on reserves. As is the case with other health problems, mould is not limited to first nations communities, but it does tend to be more prevalent on reserve, because of chronic flooding, overcrowding, inadequate ventilation, and a lack of proper maintenance. Indian and Northern Affairs, Canada Mortgage and Housing Corporation, Health Canada, and the Assembly of First Nations have formed a committee to deal with the issue of mould. This committee has focused on increasing community awareness as to how they can prevent mould, as well as how they can remediate existing problems while preventing them from recurring. Indeed, there is much that individual families can do to prevent mould in their homes.

    On the more positive side, and I believe this is the result of the flexibility that has been provided under our housing policy, some first nations have shown a fundamental shift towards taking ownership of their housing problem and are actively seeking local solutions. A departmental publication, “Setting Our Sights High”, provides some examples of success stories. One such concerns the Mohawks Bay of Quinte First Nation. This community has creatively looked at ways to develop quality housing. By doing this, they have increased the amount of ownership, as well as the life span, of the homes in their community. In fact, the Mohawks of the Bay of Quinte First Nation have become a role model for community housing for many other first nations.

[Translation]

    With respect to longer term solutions, I believe that there is a need to look at innovative ways to use housing as a mechanism to create an economy that supports the local housing market, and allows people that can afford to buy their own homes the opportunity to do so.

    For instance, this year, a limited amount of funds will be used to provide a series of special initiatives to enable more First Nations to “turn the corner” and develop sustainable mechanisms and approaches to address their housing needs. This initiatives would focus on alternative forms of tenure and increased private- sector financing, thereby supporting increased individual responsibility. We must do whatever we can to increase pride of ownership. If individuals have an ownership stake in their house, they are much more likely to properly maintain it.

[English]

    With respect to the Auditor General's report regarding on-reserve housing, it is our assessment that the recommendations contained in the report make sense and will help both Indian and Northern Affairs and CMHC realize some efficiencies in how we deliver and report on our respective programs. Indeed, we are working with CMHC to develop an action plan to address these recommendations.

    In conclusion, first nations housing is a complex issue, and first nations, their members, and the federal government will need to work together in order to address the situation.

    Merci.

    The Vice-Chair (Ms. Beth Phinney (Hamilton Mountain, Lib.)): Thank you.

    You may have noticed that the bells are ringing. We'll have a vote about five after four. I think we'll have the first questioner.

    Ms. Meredith.

¹  (1545)  

    Ms. Val Meredith (South Surrey—White Rock—Langley, Canadian Alliance): Thank you very much, Madam Chair, and thank you for appearing.

    I have experience with aboriginal housing. I spent 15 years in northern Alberta, where we had Métis communities as well as reserve communities. So I'm very aware of the issues with aboriginal housing. I'm really interested in your looking towards a shared responsibility with private partners. How are you going to reach that when there's no land ownership involved on reserves? Where is the benefit for a private corporation or private entity to get involved in housing costs?

    Ms. Joan Atkinson: Since reserves are located on crown land, they're not subject to mortgages. However, the department does have a ministerial loan guarantee program for qualified borrowers. That provides security to the lender in the event of a default. Under this program first nations are required to state that they will assume responsibility for repayment of the loan should the minister be required to make any payments under the guarantee. More and more communities are using this program to develop creative lending schemes, such as revolving loan funds, and indeed, there are an increasing number of private lending institutions that are prepared to make mortgage funds available, even without a ministerial loan guarantee. So we have seen some first nations communities that have been able to engage with financial institutions to provide loans to their members.

    Ms. Val Meredith: Would these--

    The Chair: Sorry, Ms. Meredith.

    Ms. Val Meredith: You're breaking my whole train of thought here.

    The Chair: I sincerely apologize.

    If I may, we have a quorum, and we have some motions we want to get passed. One is on the third report of the steering committee and says the committee shall hold meetings on chapter 4 of the April 2000 report of the Auditor General, “Correctional Service Canada--Reintegration of Women Offenders”, chapter 5, “Citizenship and Immigration Canada--Control and Enforcement”, chapter 6, “Federal Government Support to First Nations--Housing on Reserves”, and chapter 7, “National Defence--Environmental Stewardship of Military Training and Test Areas”. Is that agreed?

    (Motion agreed to)

    The Chair: For the CCPAC 2003 conference there's a motion that the chair of the committee be authorized to seek the authority and the necessary funds to permit up to seven members of the Standing Committee on Public Accounts and three staff members of the committee to travel to Winnipeg, Manitoba, to attend the 24th annual conference of the Canadian Council of Public Accounts Committees from September 14 to 16, 2003, and that the members attending the conference utilize their air travel points to travel to the conference. Is that agreed?

    (Motion agreed to)

    The Chair: The third is that the travel budget in the amount of $12,777 to attend the 24th annual conference of the Canadian Council of Public Accounts Committees from September 14 to 16, 2003, in Winnipeg, Manitoba, be adopted. Is that agreed?

    (Motion agreed to)

    The Chair: Thank you.

    Ms. Meredith, again my apologies for interrupting.

    Ms. Val Meredith: Thank you.

    If you're looking at private partnerships and you have found some reserves where this is in fact happening, I would have to suggest that it's probably only with those reserves where there is economic development, in other words, there is revenue coming into the reserve, a potential cash flow, if you will, that there's some security for the private lenders. This is obviously not going to work on reserves where there's no economic development, where there's no creation of wealth, where they're totally dependent on the largesse of government. Those reserves, because there's no land ownership, still would be in a position where private partnerships are not going to work. Your policy, if I understood correctly, is not intended to ever cover the full cost of housing, but is merely to help them purchase it. How are you ever going to make up for the deficiency in housing if there's this spread?

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    Ms. Joan Atkinson: The existing policy was not meant to cover the cost of a house for every member in a first nation community. What we ask first nation communities to do, and what we help them do, is develop a community plan that looks at their housing needs and their other infrastructure needs and at ways in which whatever sources of revenue they may have, including the money that comes to them from the department and money they may be able to obtain through CMHC programs, can be used to support both the building of new houses, if there's a need for new houses in their communities, and the maintenance and upkeep of existing houses. The notion is that first nations communities use the funds they receive from the department to support their housing needs, but in the context of a plan that looks at needs they have coming in the future for their housing, needs to maintain their existing stock of housing, and needs for maintenance and upkeep, whatever funds may be available to assist them in doing that.

    Ms. Val Meredith: With that in mind, I get back to the criticism the Auditor General has placed on the table, the complexity of the housing program, the horrendous amount of paperwork they have to go through, the number of agencies they have to deal with. That in itself is a costly process. Has the department looked at reducing the onerous paper trails and tracking, not to say some isn't necessary, but to get rid of the duplication and make the process less complex and as efficient as you can?

    Ms. Joan Atkinson: We have agreed with CMHC that we'll enter into a memorandum of understanding to look at ways in which we can streamline our respective programming with regard to on-reserve housing and may be able to avoid duplication or overlap or increase our ability to present a comprehensive view to first nations and reduce duplication for first nations. On the other hand, the variety of funds that may be available to first nations communities for their housing does provide them with a certain amount of flexibility in how they can use those funds to meet their housing needs. So the trick, I think, for us is to ensure that we have programming that makes sense, that tries to reduce any duplication or overlap, but provides first nations with flexibility to use different approaches to obtaining the funding required to meet their housing needs. That's the challenge for us in working together with our partners, CMHC in particular.

    Ms. Val Meredith: Who is ultimately responsible for meeting the national building standards? Is it CMHC? Is it Indian Affairs? Is that your part of the program? Who is responsible for making sure the money is actually going into building these homes at a standard that's acceptable, rather than being used for other purposes outside housing, but channelled through the housing budget?

    Ms. Joan Atkinson: It is the responsibility of the first nations communities to ensure that the houses being built in their community meet national building standards. As part of the terms and conditions applied to the funding arrangements we have with first nations communities, we do require, as I mentioned, the submission of a community plan and appropriate monitoring and inspection.

    Ms. Val Meredith: Have you ever enforced that? Do you find on some reserves that the money's not being appropriately spent, that there's a deficiency regarding the building code, and that they lose their funding? Do you ever enforce those conditions you place on them?

    Ms. Joan Atkinson: There are different approaches, depending on the nature of the difficulty in the first nation community. Obviously, as a first step, we wouldn't want to talk about withdrawing funding. When we determine that the reports we require for the funding arrangements are not being submitted in a timely way or are deficient in identifying that they've met the terms and conditions of the funding arrangement, the first step is to sit down with the chief in council and the band administration and look at why the reporting has been deficient. What are the issues? Are there things the department can do to help support the remediation, if you will, of the particular gap we find in the reports that have been sent? If that doesn't work, there are other interventions we may need to make, all the way up, if necessary, to third-party management. But obviously, we don't go there first. We sit down with band administration and chief in council and try to identify the gaps and see what we can do to support them in filling those gaps.

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    Ms. Maria Barrados: If I could make a quick reference to the report, one of the concerns we have is that the community plans were in fact not used as intended, they weren't used in the budget allocations, they weren't used to do monitoring. It is a concern that these instruments be used as was intended.

    The Vice-Chair (Ms. Beth Phinney): Thank you.

    Mr. Gaudet, we'll give you three minutes now, and then the rest when we come back after the break.

[Translation]

    Mr. Roger Gaudet (Berthier—Montcalm, BQ): Thank you Madam Chair. If I turn to the main points, it says in paragraph 6.4:

6.4 Parliament is not receiving a complete picture of the housing situation on reserves and what is actually being achieved with departmental and CMHC funds. Better information about on-reserve housing costs, program performance, and results is also needed, both to help the department, CHMC and First Nations make informed decisions about the allocation of funds and to strengthen accountability to Parliament and to First Nations communities.

    My question is for Ms. Atkinson. Why was there no agreement before legislation was released, why did you not reach an understanding between the department, the First Nations and the Canadian Mortgage and Housing Corporation? I don't understand that because everybody agrees that nothing is being done. According to paragraph 6.4, shouldn't you be reaching consensus before coming out with legislation? Things would go better if that were the case.

[English]

    Ms. Joan Atkinson: As I indicated, we are, in responding to the Auditor General's report, looking at ways we can improve and streamline the relationship between CMHC and Indian and Northern Affairs, so that we can clarify any areas where it is not clear regarding our respective programming and areas where we can take steps to ensure that it's clear to first nations what are the respective responsibilities of each of the departments and agencies.

[Translation]

    Mr. Roger Gaudet: A little bit further on, in paragraph 6.9, it states:

Indian and Northern Affairs Canada, Canada Mortgage and Housing Corporation and Health Canada have responded.

    Everybody is in agreement, but nothing is getting done. I find this difficult to understand. Everyone is in agreement with respect to the strategies and the on-reserve housing conditions, but nothing is being done. Over the past 10 years, we have spent billions, $3.8 billion. Is everyone talking to each other or is everyone talking to himself, each in his own silo?

[English]

    Ms. Joan Atkinson: If you're referring to the reporting requirements to Parliament, part of our discussions with CMHC will be looking at where we currently provide our reports and how we provide our reports. We do feel we are giving information to parliamentarians at the moment, but in the context of our action plan, we will look at ways we can perhaps provide better information to parliamentarians about moneys spent in programs on housing.

    I don't know whether my colleague from CMHC wants to comment as well.

    Mr. Douglas Stewart (Vice-President, Policy and Programs, Canada Mortgage and Housing Corporation): We certainly agree with the department that there are some things we can do to improve our reporting, and we're fully committed to giving you the information you require. As she said, we are working together to address some of the concerns in the report.

º  (1600)  

    The Vice-Chair (Ms. Beth Phinney): Thank you very much.

    We will be back as soon as we've voted, so please wait here.

º  (1600)  

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    The Vice-Chair (Ms. Beth Phinney): I'll bring the meeting back to order.

[Translation]

    Mr. Gaudet, you have five minutes.

    Mr. Roger Gaudet: We will come back to this later on.

[English]

    The Vice-Chair (Ms. Beth Phinney): Okay.

    Mr. O'Reilly.

    Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): Thank you very much, Madam Chair, and thank you very much to the witnesses for appearing.

    I have three areas I want to touch on. One is the Mohawks of the Bay of Quinte example. Is the chief elected by the population of the reserve or is it an appointed chief? That seems to make a big difference.

    Will the bill that's presently before the House in committee, Bill C-7, address the problem from the Auditor General's point of view? Madam Barrados stated very early on that they do not audit the books. I didn't get whether it was the Assembly of First Nations or all first nations?

    And the other one is to the assistant deputy minister on first nations housing. It seems this problem manifests itself and there seems to be more decay every year in native housing on any of the reserves I've visited that are run by traditional chiefs. I wonder what you consider to be the problem there? I wanted to specifically deal with the First Nations Governance Act, Bill C-7.

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    Ms. Joan Atkinson: Perhaps I can start by saying, based on the research we've done on which communities are successful in their housing programs, we do find that where there is strong governance, communities have had more success with their housing programs. When I say strong governance, we've tended to find that where there is a housing authority, for example, that has been established by the first nation community and that housing authority makes decisions on allocation of funds and allocation of housing and is very much involved in the development of the community plan, that seems to be one of the factors that leads to success. Where the policies of the community themselves and of the chief in council are well documented and where that's readily apparent to community members, that seems to be a factor as well. And when houses are being built, when houses are being inspected, and so on, where the householder is very much involved in that process, that seems to be one of the factors that leads to success with the housing programs in those communities.

    With regard to the Mohawk chief, I don't know. We can let you know whether that is a traditional chief or a chief who has been elected.

    Mr. John O'Reilly: And as far as the audit of the books is concerned, Madam Barrados?

    Ms. Maria Barrados: We are not the auditors for first nations, as I stated in our opening statement, and we're not seeking to be the auditors for first nations. We do feel, however, it is important that when we do our work, we consult with them, because the programming and policies we audit have a direct and clear impact on them. Bill C-7 doesn't change the relationship of the Office of the Auditor General with first nations.

    Mr. John O'Reilly: Okay.

    In the area I live in we have a number of councils and bands, and they seem to be very successful, so it's hard for me to criticize what's going on, but having gone through the Nisga'a hearings in British Columbia, I certainly found out that there are some people who aren't that happy. In my own area we had an amalgamation that eliminated 77 councillors in 16 wards and a mayor, and I found, as a member of Parliament, that this made it so much easier for people to make an application. Instead of 19 or 20 applications for a candidate, you get one, and it's professionally done. So I wonder if the example of the Mohawks in the Bay of Quinte is a model most bands should look at. I would guess that strong governance wouldn't sit with the one reported chief who makes $371,000. I would think this is probably someone who isn't accountable to the people. This is strictly political. You don't have to answer any of this. I don't want you to get you into any more trouble than I'm in sitting in on the hearings right now on Bill C-7.

    I suppose general amalgamation and accountability is what is really lacking. Having visited the reserve in Labrador, I found that it was just totally inadequate, very poor governance. In fact, almost no one there could give us any coherent answers as to how they did their books or how they did their housing or how they ran their school system. We found it to be a total state of depression. So I was hoping that somewhere along the line the example given in certain areas would be followed in other areas, and I suppose that is what we're talking about, certainly for applications under Canada Mortgage and Housing. As a real estate broker for over 30 years, I found that some places are very efficient if you know how to apply, and if you don't know how to apply, you end up in piles of paperwork. Is that part of the problem with trying to deal with native bands?

º  (1630)  

    Ms. Joan Atkinson: First of all, in respect of the Mohawks, we are clearly looking for best practices we can promote with other first nations communities. There are lessons to be learned, we think, for first nations communities from those communities where there has been success, and that was really the intention of the publication I mentioned in my opening remarks, which is a publication that describes a number of communities and specifically outlines the steps those communities have taken with regard to obtaining private financing, for example, how they've been able to use ministerial loan guarantees, what they've set up in infrastructure within the community in regard to housing authorities and so on, as a way of trying to promote best practices and different ways of looking at the issue, with the hope that this will be useful for other first nations.

    As to the difficulty of building capacity in first nations communities, in the housing area, as well as other program areas, the department does take steps and is working on trying to support the building of capacity within first nations communities to take on responsibility for governance and so on. One of the areas we are working on is encouraging aggregation, that is, the coming together of a number of communities. We have organizations, such as tribal councils, that bring together a number of first nations communities, and tribal councils provide services to numbers of first nations communities. We're currently reviewing that program on a number of different fronts, but clearly working towards aggregation of first nations communities, so that they can come together and, through economies of scale, pool resources, get better quality of service, better professional services, with a number of communities working together, as opposed to single communities struggling with trying to do these things on their own. So that is another thrust in the housing area, as well as other program areas.

    Ms. Maria Barrados: We certainly agree with the notion of trying to promote best practices. I think that's a very constructive thing to do.

    I would like to reinforce the comments Ms. Atkinson's made on the issue of capacity. It is an area that really does need some clarification, because the department isn't always clear as to whether they are a funding agency or they're there delivering a program. That means there are some serious questions for them about what it is they're trying to do and whether they have the required capacity in place in people and resources to follow through whichever way they want to go and the way they're going to deal with developing capacity, which is very uneven among first nations. Some are some very capable and, as you yourself said, there are some that really need support.

    The Vice-Chair (Ms. Beth Phinney): Thank you very much.

    Ms. Wasylycia-Leis.

    Ms. Judy Wasylycia-Leis (Winnipeg North Centre, NDP): Thank you, Madam Chairperson.

    I'd also like to thank the Auditor General's staff and the departmental staff for appearing before our committee today.

    I must say at the outset, I find the response by the departmental officials very disturbing, almost surreal. We've had a very clear report from the Auditor General, probably one of the most critical we've had in a number of years and very precise on the deplorable housing conditions on reserves right across this country. The response from the department today is almost as if this problem doesn't exist, or it's not our problem, it's somebody else's problem. The first question I have to Joan is, have you read the report of the Auditor General?

º  (1635)  

    Ms. Joan Atkinson: Yes.

    Ms. Judy Wasylycia-Leis: So how can you, in your response to this committee, simply give us some straight numbers on total increase in houses from 1999 to 2002, when that's precisely the situation the Auditor General calls to task? I want to refer you to paragraph 92, which says that kind of information does not tell the whole story. The Auditor General's analysis shows that “the average number of houses constructed since adoption of the policy in 1996 actually declined by 30 percent.” I just want you to read that and comment on it and really get down to the issue at hand, which is the fact that there is a critical shortage. The Auditor General has said there's a 8,500 shortfall in houses right now, and 44% of 89,000 existing houses are in deplorable state of repair, needing renovations. You don't say a word about that, but you give us your line that the housing policy is working. If it's working, how is it working?

    Second, you've given us a pass the buck response. You point to one community and say, they're taking ownership, they're doing community-based activities, and isn't this great? I would suggest the first responsibility is with the department. If on-reserve housing is not part of your department's jurisdiction, whose is it, and how are we going to ensure that we eradicate third-world conditions in this country?

    Ms. Joan Atkinson: We acknowledge that there's a housing shortage, and in my opening comments I did make reference to the fact that we know there is a backlog of housing. We also acknowledge that there are real problems out there with overcrowding, mould, and other conditions and situations in first nations housing. So I don't think we are trying to hide those problems, and the Auditor General has clearly identified those problems in the report.

    We do believe, however, housing is a shared responsibility and first nations communities have the responsibility for determining what their needs are with regard to housing in their communities and looking at ways they can try to address their housing shortages and the upkeep and maintenance of their housing. We support them, obviously, by trying to develop the capacity, as the Auditor General's report has noted. And as Ms. Barrados has said today, we provide support and assistance in trying to build that capacity within first nations communities. We try to provide appropriate funding and appropriate programs that allow them to identify sources of private sector financing and other sources to help them build housing and use housing as a way of economic development in their communities.

    It is complicated, and as has been pointed out by Mr. O'Reilly, different communities are at different stages and have different capacities to do this. Part of our dilemma, I think, with housing is to ensure that when new housing stock is built in the communities, there is an ongoing maintenance program in place to ensure that the investment that's been made in building those new houses pays off, or is sustained at least, so those houses can remain in good shape. We do that, for example, with the mould, looking at how we can educate householders on ways to prevent mould in their housing. We know mould is a problem for many of the first nations communities, but mould is eminently preventible. We are working with CMHC and first nations to try to identify ways we can increase awareness among the first nations communities on how individual householders can take steps to try to prevent mould. We know part of the mould is caused by overcrowding. That's part of community planning, the way they will identify new housing starts and deal with overcrowding in their housing.

º  (1640)  

    Ms. Judy Wasylycia-Leis: Fair enough, everybody recognizes that there are responsibilities on the part of first nations communities and people living on reserves, but you haven't answered yet the question about the responsibility you have for inspection, for ensuring that the money you spend goes where it's supposed to, and you haven't addressed the Auditor General's concerns with respect to those issues. Why can't CMHC tell us where the money for dealing with mould has gone and what the results are? Why don't CMHC and the department provide inspections to ensure that building code standards are met? What about the responsibility of the department and of the corporation for this problem? Let's stop passing the buck and talking about education and what we can do on reserves. First let's talk about what you can do to ensure that your obligations are met.

    Ms. Joan Atkinson: Since you raised CMHC's responsibilities, I think I'll turn it over to my colleague from CMHC initially.

    Mr. Douglas Stewart: I want to make it clear that to obtain funding for CMHC's housing programs, it is a requirement that housing be built either to the national building code or to the code the band has adopted for its own purposes. So the housing we fund must meet a code.

    Ms. Judy Wasylycia-Leis: But it's your responsibility to ensure inspection and that the standards are met. You're the funder, you're in partnership with the first nations communities, you have some responsibility to work with first nations communities to achieve those objectives.

    Mr. Douglas Stewart: Yes, you're absolutely right.

    Ms. Judy Wasylycia-Leis: And the Auditor General says you don't seem to know where the money is going and what's happening. So what are you saying to answer the Auditor General's concerns in this regard?

    Mr. Douglas Stewart: We know where the money is going. On the question of--

    Ms. Judy Wasylycia-Leis: Where is it going then?

    Mr. Douglas Stewart: I can provide a detailed--

    The Chair: Perhaps you can just give a summary to the committee, send it on to the clerk in the next couple of weeks.

    Thank you very much, Ms. Wasylycia-Leis.

    Ms. Meredith, we're now into the second round, four minutes, please.

    Ms. Val Meredith: Thank you, Mr. Chair.

    I want to continue where my colleague left off. I just heard you mention a building code a band has adopted as its own. Are you telling this committee a band can adopt a building code that falls short of the national building code or a provincial code?

    Mr. Douglas Stewart: They could, but if they were looking for CMHC funding, they would have to meet the requirements of the higher code, in this case the national building code.

    Ms. Val Meredith: What if they were to seek Indian Affairs funding? Can they get Indian Affairs funding with substandard building codes?

    Ms. Joan Atkinson: They are required, under the terms and conditions of the funding arrangements we have for housing, to meet national building code standards as well.

    Ms. Val Meredith: So for the most part, if they're using CMHC funding or Indian Affairs funding, they are building to a national building code.

    I want to go back to something the Auditor General's report pointed out, I believe, that community housing plans are developed, but they're not followed. The community housing plans would probably indicate where schools are supposed to be, where houses are supposed to be, roads, infrastructure, that sort of thing. I would assume that when you go through that process, there is an intent to form a viable community with all the aspects of what it takes to have a community be successful. Is economic development part of that community plan? And what guarantees are there that the community plan is going to stick around through a change of band administration?

    There's a third question I'm going to throw in. You talk about the responsibility of the homeowner to maintain and you see that as an important part. I don't disagree with you, but how can you hope a person's going to look after a piece of property when they have no ownership of it and when there's a concept out there that the government will replace it if something happens to it? When they have no ownership, how can you expect them to be responsible for it?

º  (1645)  

    Ms. Joan Atkinson: The plans are generally multi-year plans, plans developed over the longer term, over the life of more than one administration possibly. In order to get good community planning, you need to look beyond the first year.

    On economic development, we are trying to assist first nations in building comprehensive community planning capacity in those communities that would be inclusive of economic development, infrastructure, housing, social programming, education, lands management, and all the other elements of community planning. We're not completely there yet, it's obviously an objective towards which we are working. Where economic development is a part of a community's planning, obviously, they look at that in the context of their housing needs, their other infrastructure needs, and what's possible in using own-source revenue and revenue coming from economic development opportunities, increasing their housing stock, increasing the money spent on maintenance, and so on.

    As to how you develop a sense of pride, if you will, in housing when people don't necessarily own their homes, I go back to the work we've seen in some of the communities where they've developed best practices, trying to increase that sense of ownership by securing private sector funding, by having revolving loan funds, by taking initiatives that really give the householder a sense that they have a stake in this house.

    Ms. Maria Barrados: I have a quick comment on building codes. Our issue is not that there aren't requirements to have the houses built to code, but that there isn't assurance from the department and CMHC that it is being build to code. It's not so much who should do it, but that we feel the funders should have some kind of assurance that what has been funded was built to code.

    Ms. Val Meredith: On ownership, you can come up with ownership plans to give them pride, but if somebody has a home and looks after it, there's no guarantee that the chief of the day is not going to take that away from them. There's no guarantee that if they put money into fixing it up, there will be anything there for them. That's what I mean by ownership. There's no control on that individual.

    Ms. Joan Atkinson: Again, I go back to the comments I made about governance. In those communities where we've seen some real successes we tend to see a housing authority in place that is separate from the political level in those communities, where decisions are made on how the money is allocated.

    The Chair: I'm not sure if that was a yes or a no.

[Translation]

    Mr. Gaudet, you have four minutes.

    Mr. Roger Gaudet: Thank you, Mr. Chairman.

    What are the exact responsibilities of Mr. Rochon, who is in charge of the Community Development Branch, Socio-Economic Policy and Program Sector. What are his duties and responsibilities with respect to the housing crisis?

    Mr. Gilles Rochon (Director General, Community Development Branch, Socio-Economic Policy and Programs Sector, Department of Indian Affairs and Northern Development): As regards community development, I am responsible for developing policies and programs in the area of education, infrastructure, housing, and support for Amerindian leaders.

    With respect to the housing program, I am responsible for defining the general framework of the policies for the implementation of a housing program in the reserves. Our regional offices implement the program. The Department of Indian Affairs and Northern Development is a very decentralized department. Our regional colleagues, who are in contact with the various communities, are the ones who enter into funding agreements through which money is given for housing.

º  (1650)  

    Mr. Roger Gaudet: Thank you. Let's take a look at the main reports that have been published since 1983. If we compare the first report from 1983 to that of 2003, we can see that there are not too many differences. If I understand correctly, we have discovered what the problems are, but, in 20 years, we have not come up with any solutions. Why have we not found those solutions? We know what all of the problems are. They are the same problems that we saw in 1983. We all know what the problems are and we are unable to find solutions despite all the money that has been invested.

[English]

    Ms. Joan Atkinson: We referred to the 1996 policy, and we do think it has been making some difference in addressing the problem of housing, but that's not the only thing we need to continue to work on with first nations communities to try to resolve the problem of housing. Obviously, where communities have economic development potential and opportunities, we find they are better able to deal with their housing shortages and the resources required for housing, so we need to continue to work on assisting in creating economic development opportunities for first nations. As we've discussed, we need to continue to work on developing capacity within first nations communities to do the kind of comprehensive community planning we talk about. It's an ongoing process, it's an ongoing set of issues, and an ongoing set of responses on the part of the department to try to deal with them.

[Translation]

    Mr. Roger Gaudet: I hope that you can find some real solutions. We all know what the problems are.

    I would like to ask Mr. Stewart a question. I come from the municipal world and I have worked in banks and in credit unions. Usually, when we loan money, somebody will do some checking. When the Canada Mortgage and Housing Corporation loans money, they do some checking to ensure that everything is in compliance with the rules and, in particular, the building code. You are the main agent, you endorse the loans and no one checks the infrastructure of First Nation houses. In my opinion, that is unacceptable.

[English]

    Mr. Douglas Stewart: I should make some comments about our role with respect to inspection and monitoring. With new housing, during the construction period it is necessary for these houses to be inspected a number of times to ensure that they are meeting the requirements of the code. After they are built, we periodically visit the band to look at the quality of those houses again. So we are always keeping track of the condition of those houses. As well, we require financial statements from the band on a yearly basis. So we monitor the capacity of the band to maintain those houses regularly. There is a fairly comprehensive monitoring program in place for the houses we have funded, as well as an inspection process for ensuring that they're built properly in the first place.

    The Chair: Thank you, Monsieur Gaudet.

    Mr. O'Reilly.

    Mr. John O'Reilly: Thank you very much once again, Mr. Chair.

    In the granting of funds to first nations, what effect has the introduction of casinos had, or has that has not come into the equation yet? In my area there are Casino Rama, Scugog, and others that have become extremely rich, filthy rich, because casinos are made for people to lose their money, contrary to what some advertising says. The effect is that these bands are right off the radar screen as far as funding is concerned and have absolutely no interest in dealing with CMHC or anyone else--they don't have to. They look after their own funding and they look after basically everything. Who is monitoring this? How does the government adjust funding levels to some very wealthy bands, when you're dealing with things that have happened in the past, when you're auditing and so forth? Has that come into the equation yet?

º  (1655)  

    Ms. Joan Atkinson: The short answer is no. The funding allocation is largely on the basis of on-reserve population.

    Mr. John O'Reilly: So these bands that are extremely rich are still getting funding they don't need?

    Ms. Joan Atkinson: Funding is provided, as I said, on the basis largely of on-reserve population, and own-source revenue is not considered in that equation.

    Mr. John O'Reilly: Some of these casinos are turning over $250,000 every six months to the township they are located in, even though they're being run by bands that are not on reserve land. If there's that kind of money, and that's a small percentage of it, and the Ontario government is getting a larger piece of that, who audits this? Is it entirely up to the Province of Ontario, is up to the bands? How does anyone account for exactly where that money goes and where it comes from? Where does it fit into the equation of funding? Because obviously it's supposed to be self-financing.

    Ms. Joan Atkinson: The department audits bands against the terms and conditions of the funding arrangements we have with them.

    Mr. John O'Reilly: Are you indicating that I am out of time?

    The Chair: No, you have a minute left. I wondered if you wanted Mr. Stewart to answer the question as to what happens about the code for houses if there's no CMHC involvement. Mr. O'Reilly pointed out that a lot of these houses are built with their own money, and CMHC is not involved and Indian and Northern Affairs are not involved. Who would make sure they're up to code? I think that was Mr. O'Reilly's question.

    Mr. Douglas Stewart: In those cases it would be up to the band to make sure the houses were built to code.

    The Chair: Thank you.

    Mr. John O'Reilly: Thank you for that, Mr. Chair. You did a good job.

    The Chair: Did you still have another question?

    Mr. John O'Reilly: No, that's fine.

    The Chair: Okay, thank you, Mr. O'Reilly.

    Ms. Wasylycia-Leis.

    Ms. Judy Wasylycia-Leis: Thank you, Mr. Chairperson.

    I'd like to go back to the first main issue raised by the Auditor General, the critical shortage of housing on reserves across this country. What is the plan of the federal government to address that critical housing shortage? Is there an amount you've identified that is required to at least stop the hemorrhaging of the system and to stabilize it? If so, what is that amount and what timeframe do you have in mind?

    Ms. Joan Atkinson: Our base budget for housing is $137 million annually. We have at various times been able to put additional moneys into housing at the end of the year for emergency housing situations as they arise, so the actual amount spent in a given year may vary.

    Ms. Judy Wasylycia-Leis: That's the amount that really hasn't changed substantially over the last decade, despite the growing problem and despite the increase in the population on reserves. So what are the plans of the government to get out of that rut? Obviously, money needs to be increased and there has to be a serious discussion with first nations communities on how to resolve this problem. So I'll go back to the question: what's the plan for new funds and new funding arrangements with first nations communities?

    Further, what are the department's plans to conduct a policy review that involves first nations communities in this whole area of crisis in housing?

    Ms. Joan Atkinson: I absolutely agree that we need to continue to engage with first nations communities towards resolution of the housing problem. A lot of the consultation with communities does take place at the regional level, because a lot of the problems in housing are very localized. We have, as we said before, some communities that are doing extremely well with their housing, and we have other communities that are not doing as well. So a lot of the consultation with first nations communities, as Monsieur Rochon has pointed out, takes place between our regional officials and those first nations communities.

    The plan is to continue to work on those areas and help first nations communities develop the capacity and the expertise and the economic development opportunities that will allow them to take ownership and responsibility and to obtain additional funding through private sector partnerships and others to better their housing conditions. In areas where communities are further behind in their ability to take advantage of those economic development opportunities, we will look at ways the available funding we have for first nations housing can be used to deal with the most urgent and pressing of those emergency situations.

»  (1700)  

    Ms. Judy Wasylycia-Leis: Is the department prepared to sit down with first nations communities and really address this issue of jurisdiction? You've said today it's not the job of this government to ensure that every member of a first nations community has access to decent housing, despite the Indian Act, despite the first nations' belief that the federal government has a responsibility. Are you prepared to sit down and resolve this issue? Is the government looking at a policy to accept responsibility for housing in first nations communities? Without some action plan, it almost seems, as I've said before at this committee, a dump and run approach. I worry that there's no will on the part of the federal government to take up the responsibility that's so self-evident.

    Ms. Joan Atkinson: We do not consider housing as a treaty right per se, as many first nations do. We provide support for housing on reserve as a matter of policy, not as a matter of legislative obligation or as an obligation under existing or historical treaties. Where there is a very difficult housing situation, we work with those communities at the regional level to try to identify with them, within available funding, how we can allocate resources most appropriately to deal with, as I said, the most urgent and pressing situations.

    The Chair: Thank you.

    We'll just have a quick round here, and I'll try to shepherd us around so that everybody gets another two or three minutes or so.

    Ms. Meredith.

    Ms. Val Meredith: Thank you, Mr. Chair.

    So $137 million a year is budgeted for building new homes every year.

    Ms. Joan Atkinson: That's for housing generally, so new homes, repair, and maintenance.

    Ms. Val Meredith: How many houses are taken off the inventory each year?

    Ms. Joan Atkinson: I'm not sure. Can you answer, Gilles?

    Mr. Gilles Rochon: We receive activity reports from each of the first nations on an annual basis, and those reports are sent to our regional offices. We don't have an annual count of all those.

»  (1705)  

    Ms. Val Meredith: Could you provide to this committee a breakdown of the number of houses you would consider, from these reports, to have been taken off the inventory list, what we might call disposable housing?

    Mr. Gilles Rochon: Sure. We know there are approximately 2,600 new homes built each year.

    Ms. Val Meredith: For $137 million, but you're saying some of that is for maintenance, some of it is probably for subdivision development, changing sewers and water. Would that go into there as well? If they got a new water system in the community and started hooking everybody up, would that be part of the housing budget?

    Mr. Gilles Rochon: Some of that money may go for connecting houses to the water and sewer system.

    The Chair: Ms. Barrados has a point.

    Ms. Maria Barrados: They're quite correct in describing the flexibility of those funds, but when we talk about the support for housing, we add in the social assistance money that goes for housing and some additional money that comes via the infrastructure program, and we also look at the money that comes from CMHC. So to really get a picture of how much is being spent on housing, you'd have to look at all those things together. Our concern remains what the government in total, with all that funding, is trying to achieve.

    Ms. Val Meredith: And it's more than the $137 million?

    Ms. Maria Barrados: That's right.

    Ms. Val Meredith: Do you know how much more?

    Ms. Maria Barrados: We've made estimates, and that's how we derived that $3.8 billion.

    Ms. Val Meredith: A year?

    Ms. Maria Barrados: For ten years.

    The Chair: So that's $380 million a year, on average, for housing. Okay.

    Monsieur Gaudet.

[Translation]

    Mr. Roger Gaudet: Thank you, Mr. Chairman. I would like to ask two brief questions, one which is intended for Mr. Stewart.

    There are many kinds of houses. There is a model in [Editor's note: inaudible], in Ontario, and that works well. Elsewhere, however, we find houses worth $40,000 that require $45,000 worth of repairs. That means that inspections are not being done on an everyday basis. Conditions are deteriorating a great deal. How often do you inspect these houses?

[English]

    Mr. Douglas Stewart: It is true that there are many houses on reserve that have deteriorated to the point where they need renovation. I should point out that we operate a renovation program, called the residential rehabilitation assistance program, on reserve, and bands can make use of this program to obtain subsidy funds that will help them to renovate those houses into acceptable shape.

[Translation]

    Mr. Roger Gaudet: Thank you. My other question is for Mr. Rochon. It is not long.

    Is it possible that, in some communities, when the inspection is made to determine whether or not the water and sewage has been hooked up properly, that there is neither water nor electricity in the house? What do you if the power is two kilometres from the house, if you discover that the house may have all of the electrical wiring, but that the power isn't reaching it?

    Mr. Gilles Rochon: As I said earlier, departmental employees do not carry out the inspections. They are done by First Nations' employees, who are hired by the tribal councils.

    Mr. Roger Gaudet: Yes, but you should not allow that to happen. Imagine a house that has the plumbing required for water and sewage, the cable and wiring for electricity, but the power doesn't get to the house, there is no water and the plumbing is not hooked up to the sewers. That's a problem. I understand that these people are hired by the First Nations, but something is missing, right? Where I live, socio-economic and community development involves looking after the people, their welfare and their quality of life.

    Mr. Gilles Rochon: I would think that the situation that you alluding to is an exception. In most communities where we install sewage and water systems, there is electricity. You no doubt have a specific example in mind, and we would like to know exactly where this is occurring.

    Mr. Roger Gaudet: We will provide you with this information later on.

»  (1710)  

[English]

    The Chair: Okay.

    Mr. O'Reilly.

    Mr. John O'Reilly: Thanks, Mr. Chairman.

    In chapter 6 the Auditor General recommends the streamlining of program structure and delivery, and we're talking about a 1996 policy that was not harmonized with a policy brought down in the eighties. I would like to ask the Auditor General's department exactly what the specifics are of the streamlining you recommend. I've read some of what's in here, but I didn't see how any of that would streamline it, so I wonder if you can expand on that a little for me.

    Ms. Maria Barrados: One of the observations we make towards the end of the chapter is that the department hasn't gone back to examine the authority structure. They have a program that is currently operating under the new policy, but the old authority structure is still there. So we're recommending that they clearly fix that authority structure, and in doing that, there is an opportunity to bring these things together. In addition to that, there has to be a logic to why you have a department and a crown corporation and what it is you're presenting to first nations. We at the Office of the Auditor General don't get into machinery of government issues. You can have two organizations work it out so it looks seamless; it has to look seamless to the recipients.

    Did you want to add something there?

    Mr. Joe Martire (Principal, Office of the Auditor General of Canada): If you look at it from the point of view of the first nations, and your typical first nation maybe has about 200 people, you get a sense of the complexity of it. As has been mentioned, the 1996 policy doesn't apply to all first nations, there are still some under the old policy, so in effect, you have two policies and five funding agreements within those two policies. On the CMHC side, you have two operating agreements and two programs. So when you have a typical small community, it's very daunting for them, and they've told us that from their point of view, it's very complex, it's very confusing, and they don't understand why they have to deal with two federal organizations.

    The Chair: I don't think I could understand it either, Mr. Martire.

    Ms. Phinney.

    Ms. Beth Phinney: I'd like comments on accountability. Do you think it's efficient, do you think it's sufficient, and is the new bill going to help in making it more accountable? Okay, we'll go over and build this house, but if it needs renovations, it's their job to look after the renovations--I don't know who's responsible. Who's accountable for the $80,000 that was spent on that house? If somebody applies for the money for renovations, does somebody actually go in there from CMHC and see whether that renovation was done on that house or the money was sent to the chief for something else? That's the kind of thing I'd like to know, and whether the new bill will help.

    Mr. Douglas Stewart: I'll leave the answer on the new bill to my colleague, but with respect to CMHC programs, we are accountable for the expenditure of public funds. With respect to the RRAP program, we do inspect the house beforehand to make sure it meets the requirements for the program and is eligible for funding, and we inspect after the renovations have been done to make sure the money has been spent on that for which it was provided.

    Ms. Beth Phinney: We have a large number of reserves across Canada, some, as you were saying, with only 200 families on them. You've got that many inspectors going out across Canada?

    Mr. Douglas Stewart: Actually, we don't have that many inspectors.

    Ms. Beth Phinney: Then how do you inspect before and after?

    Mr. Douglas Stewart: One of the initiatives we have been engaged in is the development of a first nations inspection service. Part of our job has been to transfer our inspection expertise to the first nations themselves, and I believe close to 90% of inspections on reserve are now performed by first nations housing inspectors.

»  (1715)  

    Ms. Beth Phinney: From the same reserve.

    Mr. Douglas Stewart: They would be working not for that reserve, but probably for the tribal council in most cases.

    Ms. Beth Phinney: Thank you.

    The Chair: Thank you very much.

    Ms. Wasylycia-Leis.

    Ms. Judy Wasylycia-Leis: Mr. Chairperson, I think we should invite these witnesses back again. We've only begun to touch the tip of the iceberg with this issue, I think we have a lot more work to do, and I don't want to cut into the time we have for Elaine Johnston.

    The Chair: We will discuss that at the steering committee when it meets next.

    I have a couple of questions. In your opening statement, Ms. Atkinson, you say, in your view, your housing policy is working: “From March 1996 to March 2002 the number of houses on reserve has increased from 78,187 to 91,652”, and yet there are 4,500 family formations expected every year. So in the next seven years there will be about 30,000 new families, and you've only got 16,000 to 17,000 new homes. You're falling behind, so tell me how your policy is working.

    Ms. Joan Atkinson: As we said here and in response to a number of other questions, we believe the policy is being effective in providing first nations communities with the flexibility to determine how best to meet their own housing needs, providing them with the ability to tap into sources of revenue and income beyond what the government has provided to try to deal with their housing needs and their housing difficulties.

    The Chair: I would have expected you to say that, rather than taking credit for 16,000 to 17,000 new houses when 30,000 are required.

    The day the report came out I asked the minister about this issue and he said, but they can get financing; we want them to start borrowing their own money. How can someone on a reserve get a mortgage on a property he doesn't own?

    Ms. Joan Atkinson: A number of communities have succeeded in providing the kinds of guarantees that would satisfy financial institutions, and their members are indeed able to get mortgages from financial institutions off-reserve.

    The Chair: Is that in every province, or just in some provinces?

    Ms. Joan Atkinson: I don't have the number of communities off the top of my head.

    The Chair: Presumably it's got to be within the law. Is this federal law and not provincial law?

    Ms. Joan Atkinson: In obtaining a mortgage, it would be, I guess, provincial law.

    The Chair: So this meets provincial legal requirements in every province?

    Ms. Joan Atkinson: Where the first nation community is able to use the funds they have available to them to provide guarantees, financial institutions have been willing to provide those sorts of mortgages.

    The Chair: My question was, is it available in every province?

    Ms. Joan Atkinson: Do we have the answer to that question?

    Mr. Gilles Rochon: As far as I'm aware, yes, it is.

    The Chair: Perhaps you could confirm that.

    Ms. Joan Atkinson: We will confirm that.

    The Chair: In paragraph 80 the Auditor General says:

We expected that the Department would have clear authority governing the housing program and would comply with it. However, we found that the existing authority had ambiguities and that the Treasury Board had not approved program terms and conditions resulting from the 1996 policy.

So you are having a hard time following your own Treasury Board policies. How do you expect the reserves to carry through on all this paperwork, burdensome inspections, and so on if you're not following through on your own?

    Ms. Joan Atkinson: As the Auditor General has pointed out in her report, we need to do a better job of clarifying our policy and authorities for the housing program, and we intend to do that as part of our action plan in following up this audit.

    The Chair: Ms. Meredith's point was that home ownership is a great thing, people take pride in ownership. In the United Kingdom, when Maggie Thatcher sold off hundreds of thousands of public housing units, she unleashed a huge economic boom in home renovation--new carpets, new doors, paint, double-glazing windows, driveways, you name it--because people now had something that was theirs. I can't believe you're not addressing that issue raised by Ms. Meredith, that people everywhere around the world love to have pride of ownership, and we've denied it to them. What's your answer? Why are we denying them the pride of ownership?

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    Ms. Joan Atkinson: I think we're trying to increase the pride of ownership. Part of the intent of the 1996 policy is to provide flexibility to those communities to build that capacity and arrange for private sector financing or provide financing themselves to members of the community through things like revolving loan funds, so that they can, indeed, start to build that pride of ownership in their communities.

    The Chair: Well, I think you need to be a little bit more aggressive.

    Monsieur Gaudet

[Translation]

    Mr. Roger Gaudet: I would simply like to ask that Mr. Rochon provide me with the report on the cases that I have mentioned. This situation apparently happened in Mattawa and Wabaseemong.

    Mr. Gilles Rochon: Did you also say Mattawa?

    Mr. Roger Gaudet: Mattawa.

[English]

    The Chair: Now we'll have closing comments from Ms. Barrados.

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

    We are pleased by the positive responses we have got from the department and CMHC. We are looking forward to the specifics of an action plan, which is in the process of being developed. The real test in all this is to get some clarity as to what success will be, so that both the department, for their own management process, and parliamentarians will be able to understand when something has succeeded. The future demands in this area are huge. It's a very important area and has very significant social consequences for first nations people.

    The Chair: Thank you very much. I thank you all.

    Now we're going to bring forward Ms. Elaine Johnston, the director of the health secretariat for the Assembly of First Nations, to give us a report. Welcome, Ms. Johnston. You are indeed privileged to be able to speak to the public accounts committee as a response to a report we have tabled in the House of Commons. I believe this may be the first time someone has been able to respond to a report of this committee other than the government, the House of Commons, and the departments themselves. I don't think the committee wants to make a habit of this, but they did want to hear from you.

    Without further ado, I turn it over to you to present your written report.

    Ms. Elaine Johnston (Director, Health Secretariat, Assembly of First Nations): Thank you.

    Good afternoon, honourable members of the standing committee. I appreciate this opportunity and the exception that has been made. I give you greetings on behalf of National Chief Matthew Coon Come and Vice-Chief Charles Fox. I want to acknowledge the territory of the Algonquin people on which these great Houses of Parliament sit and acknowledge all of our ancestors.

    Thank you for this opportunity to speak to you today about the concerns of our constituents regarding the non-insured health benefit consent form. I am Ojibway Pottawatami from the Serpent River First Nation here in Ontario and a registered nurse by profession.

    First I will provide you with some background on how the non-insured health benefit consent initiative came about. In 1999 Justice Canada determined that because of the absence of specific statutory authority or the written informed consent of the client, the non-insured health benefit program would be forced to limit drug utilization reviews. Health Canada learned that the transfer of NIHB client data for reimbursement under the program also violated legislative requirements. In 2001 Health Canada First Nations and Inuit Health Branch was summoned before the House of Commons public accounts committee to respond to questions surrounding the death of a NIHB client. A coroner's inquest into the death of Darcy Ironchild revealed that physicians prescribed and pharmacists dispensed to him over 300 prescriptions of various mood-altering drugs within a 12-month timeframe.

    Federal legislation was enacted last year to govern the flow of personal information through electronic means. The Personal Information Protection and Electronic Documents Act now requires the written informed consent of individuals whose personal data will be transferred through electronic means. In September 2002 the First Nations and Inuit Health Branch unilaterally introduced the NIHB consent initiative for a 12-month introductory period. During this period of time first nations clients were to be introduced to the consent form and not required to sign until September 1, 2003. Client access to benefits was not to be affected. Despite the assertion of First Nations and Inuit Health Branch officials that clients would not be affected, first nations have reported from across the country that clients are now being forced to sign NIHB program consent forms at point of service, or no service will be provided. This has led to mistrust and confusion on the part of both providers and clients. Providers are informing us that their provincial legislation requires them to get informed consent from clients, and this NIHB consent form is not conducive to getting this informed consent. The providers feel their liability as professionals is at stake.

    According to Health Canada, on September 1, 2003, the NIHB program consent initiative will be implemented as a legal requirement to meet recent federal privacy legislation. It is anticipated that after this date, should clients not agree to sign the consent form, they will be permitted a last chance dispensing of a benefit. Beyond this, should the client still not agree to sign the consent form, they will be forced to purchase the benefit on their own. Many first nations people in this country are the poorest of the poor and can scarcely afford to purchase the bare minimum of food, clothing, and shelter. This raises the question of the federal government's liability should a first nation client refuse to sign the consent form and his or her health is compromised, perhaps leading to death.

    According to Health Canada First Nations and Inuit Health Branch, written blanket consent would also enable the managers of the NIHB program to process claims for provider reimbursement, as to pharmacists, and to monitor drug usage patterns. The monitoring or drug utilization reviews would indicate and allow for appropriate intervention where inappropriate prescribing, use, and dispensing of prescription drugs occur. As a cost-benefit management tool, First Nations and Inuit Health Branch also conducts analysis on the data generated by first nations clients who use the program.

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    Before Health Canada can move ahead with legally and unilaterally implementing this consent form, there are several key concerns that remain unresolved. First nations people have voiced their concerns over the prescribing patterns of providers, that is, physicians, the dispensing patterns of the pharmacists, and the potential abuse by clients. They understand the need for developing a consent form, but the problem is that the NIHB consent form is too broad. Health Canada has not articulated in a clear and informed way what information will be collected or how it will be used and disclosed. First nations have demanded that their personal information be respected and protected. In particular, first nations leaders continue to convey concern over both the absence of measures to deal with the effects of over-prescription and the potential harm to treaty, aboriginal, and human rights.

    First nations concerns about informed consent have also not been addressed. There are first nations members who do not understand or comprehend the English language. This alone is cause for concern and raises the question of government liability and responsibility to get informed consent.

    The Assembly of First Nations, during the annual general assembly held July 2002 in Kahnawake, Quebec, adopted resolution 15/2002, entitled “Non-insured Health Benefits Consent”. The resolution called for a halt to the consent process and for first nations technicians to explore and develop alternatives and options to the NIHB client consent form that meet legislative requirements and respect treaty rights. In response to the July resolution, the Assembly of First Nations caucus and the NIHB joint technical working group held a meeting, which included two professionals, Dr. Joe Kaufert, clinical consent expert with the University of Manitoba, and Dr. Charles Weijer, bioethics expert with Dalhousie University. The foundation of this exercise was a literature review undertaken by the AFN health secretariat. The product of this exercise is the strategic action plan on NIHB consent. The action plan formed the basis for a strategy to develop options for consent, including prevention of prescription drug misuse.

    I have given to the clerk a draft of a simple consent form to meet legislative requirements, and I've also enclosed Dr. Kaufert's and Dr. Weijer's papers on consent.

    In short, first nations oppose the use of a blanket consent mechanism, but are supportive of a simple consent form for reimbursement that will protect and respect our personal information. First nations support respectful interventions for the safety of first nations clients. We have discussed with professional providers mechanisms to accomplish this.

    Independent scholarly analysis on the present NIHB program consent materials identifies serious concerns that consent acquired may not be informed consent, but coerced consent, because of withholding of benefits . The Privacy Commissioner concurs with our concerns and is willing to work with both the Assembly of First Nations and Health Canada to address our collective concerns and needs. First Nations and Inuit Health Branch is asking for a lot of trust in how the information will be used and disclosed without proper mechanisms to ensure that this occurs. The government has a sacred trust, which needs to be honoured in this area.

    I would recommend that the First Nations and Inuit Health Branch work cooperatively with the Assembly of First Nations to look at alternatives to a blanket consent form and consider the simple consent form submitted by the Assembly of First Nations as an alternative. Narrow the scope of information required on a consent form. If consent is to be meaningful, purposes must be set out in such a way that a person can reasonably understand how the information will be used or disclosed. The First Nations and Inuit Health Branch should look at developing a schedule for pain medication for drug utilization reviews and, with the Assembly of First Nations, look at other options in the collection of personal information on the consent form for purposes of the drug utilization reviews.

    I thank you for the opportunity to present our statement to you. I apologize for not having it for you in advance and in French for our colleagues.

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    The Chair: Thank you very much, Ms. Johnston.

    As we agreed, there will be no questions on this statement. We thank you for making it.

    The meeting is now adjourned.