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37th PARLIAMENT, 2nd SESSION

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

EVIDENCE

CONTENTS

Wednesday, June 11, 2003

1515

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

Grand Chief Chris McCormick (Association of Iroquois and Allied Indians)

The Chair

Grand Chief Chris McCormick

1520

1525

1530

The Chair

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

The Chair

Ms. Pauline Picard (Drummond, BQ)

1535

Grand Chief Chris McCormick

The Chair

Mr. Charles Hubbard (Miramichi, Lib.)

Grand Chief Chris McCormick

Mr. Charles Hubbard

Grand Chief Chris McCormick

Mr. Charles Hubbard

Grand Chief Chris McCormick

Mr. Charles Hubbard

Grand Chief Chris McCormick

1540

The Chair

Mr. Maurice Vellacott

Grand Chief Chris McCormick

Mr. Maurice Vellacott

The Chair

Grand Chief Chris McCormick

The Chair

1545

Mr. Eric Large (Councillor, Saddle Lake First Nation)

1550

1555

The Chair

Mr. Maurice Vellacott

Mr. Eric Large

Mr. Maurice Vellacott

The Chair

Ms. Pauline Picard

1600

Mr. Eric Large

Ms. Pauline Picard

Mr. Eric Large

Ms. Pauline Picard

The Chair

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

The Chair

Mr. Gérard Binet

1605

Mr. Eric Large

Mr. Gérard Binet

Mr. Eric Large

The Chair

Mr. Eric Large

The Chair

1610

Mr. Ken MacLeod (As Individual)

1615

1620

The Chair

Ms. Pauline Picard

The Chair

Ms. Pauline Picard

1625

Mr. Ken MacLeod

The Chair

Mr. Gérard Binet

Mr. Ken MacLeod

Mr. Gérard Binet

Mr. Ken MacLeod

Mr. Gérard Binet

Mr. Ken MacLeod

Mr. Gérard Binet

1630

The Chair

Mr. Ken MacLeod

The Chair

Mr. Fred Lazar (Economist, Schulich School of Business, York University)

1635

1640

1645

The Chair

Ms. Pauline Picard

Mr. Fred Lazar

1650

The Chair

Mr. Charles Hubbard

Mr. Fred Lazar

Mr. Charles Hubbard

Mr. Fred Lazar

Mr. Charles Hubbard

Mr. Fred Lazar

Mr. Charles Hubbard

1655

Mr. Fred Lazar

Mr. Charles Hubbard

Mr. Fred Lazar

Mr. Charles Hubbard

The Chair

Mr. Charles Hubbard

Mr. Fred Lazar

The Chair

Mr. Fred Lazar

The Chair

1700

Mr. Fred Lazar

The Chair

Grand Chief Margaret Swan (Assembly of Manitoba Chiefs)

The Chair

Grand Chief Margaret Swan

1835

1840

The Chair

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

1845

Grand Chief Margaret Swan

Mr. Yvan Loubier

Grand Chief Margaret Swan

The Chair

Mr. Gérard Binet

1850

Grand Chief Margaret Swan

Mr. Gérard Binet

Grand Chief Margaret Swan

The Chair

Mr. Yvan Loubier

The Chair

Grand Chief Margaret Swan

1855

The Chair

Chief Stewart Phillip (President, Union of British Columbia Indian Chiefs)

1900

1905

The Chair

Mr. Yvan Loubier

1910

Chief Stewart Phillip

Mr. Yvan Loubier

Chief Stewart Phillip

Mr. Yvan Loubier

The Chair

Ms. Anita Neville (Winnipeg South Centre, Lib.)

Chief Stewart Phillip

1915

Ms. Anita Neville

Chief Stewart Phillip

Ms. Anita Neville

Chief Stewart Phillip

1920

Ms. Anita Neville

The Chair

Chief Stewart Phillip

The Chair

Mr. Roger Obonsawin (Chair, Aboriginal Peoples Council of Toronto)

1925

1930

The Chair

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

Mr. Roger Obonsawin

1935

Mr. Stan Dromisky

Mr. Roger Obonsawin

Mr. Stan Dromisky

Mr. Roger Obonsawin

Mr. Stan Dromisky

The Chair

Mr. Stan Dromisky

Mr. Roger Obonsawin

Mr. Stan Dromisky

The Chair

Mr. Yvan Loubier

1940

Mr. Roger Obonsawin

Mr. Yvan Loubier

The Chair

Mr. Charles Hubbard

Mr. Roger Obonsawin

Mr. Charles Hubbard

The Chair

Mr. Charles Hubbard

Mr. Roger Obonsawin

Mr. Charles Hubbard

Mr. Roger Obonsawin

1945

The Chair

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

Mr. Roger Obonsawin

Ms. Nancy Karetak-Lindell

Mr. Roger Obonsawin

1950

The Chair

Mr. Roger Obonsawin

The Chair

Grand Chief Francis Flett (Manitoba Keewatinowi Okimakanak Inc.)

The Chair

Grand Chief Francis Flett

The Chair

Grand Chief Francis Flett

2005

2010

Mr. Michael Anderson (Research Director, Manitoba Keewatinowi Okimakanak Inc.)

The Chair

2015

Mr. Michael Anderson

The Chair

Mr. Michael Anderson

The Chair

Mr. Michael Anderson

The Chair

Mr. Michael Anderson

2020

2025

2030

The Chair

Mr. Larry Blain (As Individual)

2035

The Chair

2040

Ms. Nancy Karetak-Lindell

Mr. Larry Blain

The Chair

Mr. Larry Blain

The Chair

Mr. Larry Blain

The Chair

CANADA

Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources

NUMBER 083

2nd SESSION

37th PARLIAMENT

EVIDENCE

Wednesday, June 11, 2003

[Recorded by Electronic Apparatus]

¹ (1515)

[English]

The Chair (Mr. Raymond Bonin (Nickel Belt, Lib.)): The order of the day is Bill C-19, an act to provide for real property taxation powers of first nations, to create a First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority, and First Nations Statistical Institute, and to make consequential amendments to other acts.

We are pleased to have with us by videoconference, Grand Chief Chris McCormick from the Association of Iroquois and Allied Indians.

Good afternoon, Grand Chief.

Grand Chief Chris McCormick (Association of Iroquois and Allied Indians): Good afternoon, and thank you very much.

I'd like to say good afternoon to the members of the standing committee. Thank you for accepting my request to appear before the committee.

The Chair: Thank you for being here.

We will start now for our half hour together. We will invite you to make your presentation, and hopefully you will allow time for questions from members.

Please proceed.

Grand Chief Chris McCormick: I'd like to make a statement based on my experience and involvement with the government's bill.

I do not have much confidence that these proceedings will be in the best interests of our membership or first nations across Canada. But what I would like to enter into the record is a resolution passed at our general assembly. It was moved by Chief Harry Doxtator and seconded by Chief Vernon Syrette.

Subject: Proposed First Nations Governance Act & First Nations Fiscal Institutions Act.

WHEREAS in 1969 the federal government attempted to apply a White Paper on Indian Policy; and

WHEREAS the 1969 White Paper on Indian Policy proposed, among other initiatives, the:

Removal of the legislative and constitutional recognition of “Indian and lands reserved for Indians”;

Ignoring Aboriginal rights and title, and ending the historic treaty relationship;

Breaking up Reserves into fee simple individual allotments;

Imposing provincial laws;

WHEREAS the federal government 1969 Policy of terminating Aboriginal and Treaty rights, as has been revived and is being imposed across the board through the termination, reduction or elimination of essential programs for Indian communities; and

WHEREAS the Aboriginal and Treaty rights of Indian Nations are being curtailed, violated and denied, despite section 35 of Canada's constitution being Proclaimed into law 20 years ago and despite landmark judicial decisions from the Supreme Court of Canada, such as, Delgamuukw; and

WHEREAS the federal government is also posed to impose their 1969 Termination Policy objectives through their legislative agenda, which as a number of components, or parts; and

WHEREAS one part of the federal legislative agenda is the proposed “First Nations Governance Act”, which is intended to violate our inherent right of self-determination and self-government by directly interfering in our inherent internal jurisdiction and key governance areas, such as, legal status, elections, accountability and law enforcement; and

WHEREAS another more devious part of the federal legislative agenda, is the proposed “First Nations Fiscal Institutions Act”, which involves the federal government using the Indian Taxation Advisory Board, and certain Indian “champions”, to promote a municipal model of community development by establishing four national institutions to facilitate the legal release of the federal government's fiduciary obligations, for maintaining Reserve infrastructure and housing, while forcing Indian Bands into applying property, and other, taxation regimes on Reserves, including the issuance of municipal type bonds to maintain infrastructure and housing; and

WHEREAS the four proposed national institutions are:

The First Nations Tax Commission;

The First Nations Finance Authority;

The First Nations Management Board; and

The First Nations Statistical Institute;

WHEREAS the proposed “First Nations Fiscal Institutions Act”, is national legislation, 1) which is based upon a municipal model, as well as, delegated authority, not the recognition of our inherent right of self-determination and self-government; 2) will lead to increased taxation over our members, while likely decreasing federal ongoing obligations and responsibilities for transfer payments for capital projects to our band; 3) will likely lead to assimilation of our Reserves into municipal and provincial taxation and land tenure systems; 4) will likely have a negative effect on our band members for generations to come.

THEREFORE BE IT RESOLVED that AIAI Member Nations gathered in Assembly in Oneida this 25 day of May 2002 hereby opposes and rejects the proposed “First Nations Governance Act” as well as, the proposed “First Nations Fiscal Institutions Act” as a violation of our inherent right of self-determination and self-government;

¹ (1520)

BE IT FINALLY RESOLVED that AIAI Member Nations call on the federal government, and its First Nation “champions”, including the Indian Taxation Advisory Board, to cease and desist all activities to pass this proposed national legislation, and to work with First Nations in a respectful bilateral discussion moving towards the implementation of the Rights based recommendations from the RCAP and Penner Reports.

With that, I'd just like to make the committee members aware of the process that happened at the national level. I think it's quite distinct that the association I work for is not in support of the proposed legislation. From the national perspective, we were at an assembly in Halifax in 2001 and there was a resolution put on the floor to accept this bill. Based on our charter, we need 60% of the chiefs to support a resolution. This was not reached at the assembly, but in support of moving ahead, the invalidation was removed and the people who were promoting the bill were asked to draft legislation and bring it back to assembly for the chiefs to approve. In the follow-up assembly in Kahnawake in July 2002, the legislation was not presented to the assembly for our review, so there was no further resolution, one way or the other.

However, when the documentation regarding the bill finally did come into the chiefs' hands, there was a resolution passed at the assembly by the chiefs that I believe was accommodating. The resolution spoke to the fact that we didn't want to stand in the way of first nations that could derive opportunity from this type of bill. The first nations that would be able to derive opportunity from this type of bill are first nations that have a large presence of non-native business interests living on the reserve. I believe in some cases, in British Columbia, you can have 400 or 500 first nations people who are members of that community and have upwards of over 1,000 non-native business interests and buildings. In those cases, the tax base would be of benefit to the community. I believe there are examples where communities have prospered based on their ability to tax these interests.

However, in our communities and in most of the communities throughout the north, there isn't the base to tax anybody other than our own people, and a lot of our communities have anywhere from 35% to 90% unemployment. So it's not viable in our communities.

The position we took at the national assembly was that if the people who were supportive of the bill wanted the bill to go through, then they should be accommodated, but the bill should specifically list those first nations that want to be part of the bill. Their names would be added to the bill and the bill would be closed; it would be a final document. There would be no opt-in, opt-out clause, which was a component of the legislation.

I believe there has been a precedent set by the federal government in relation to the harmonization tax. That's federal legislation and it applies to only three Atlantic provinces. So I'm hoping there is an opportunity for this to be considered. A precedent has been set and everything seems to be functioning. The Atlantic provinces have obtained what they desired, and the provinces that didn't want to participate in that particular federal legislation are able to exist the way they want to.

¹ (1525)

I would just like to take a bit of time to talk about some of the shortcomings we see in the bill. We feel the first nations with taxation bylaws under section 83 of the Indian Act will automatically be swept under the control of the tax commission and the management board, and then it's almost impossible to opt out.

The tax commission has a veto over any attempt to rescind the property taxation regime. All members of the financial authority must consent before a first nation is permitted to leave. Even if there are better rates offered by other financial institutions, once you're a member of this group, you do not have the option of applying for the lower rate.

We have real concerns about the management board. If a community, for whatever reason, is failing to meet their financial obligations to this institution, the management board can step in arbitrarily and independently and raise the tax rate.

In our discussions, one chief who's a member of the Robinson-Huron Treaty said if there's going to be any authority imposed on communities that are members of the Robinson-Huron Treaty, it will be done by the signatories, the chiefs of those communities that are members of that treaty. They don't see any external body having the authority to supercede chief and council in the communities.

We also feel the statistical institution has the authority to collect first nations data from all branches of the federal government without the consent of the first nations that may be involved. The focus is on the financial management and the local taxation, not on increased fiscal transfers and the resource/revenue sharing.

The assumption of the bill is that the inherent right does not include jurisdiction to pass laws on local financial management, revenue collection, and budgeting. These prejudice all first nations, whether or not they opt in.

The bill also sets a negative precedent in terms of the inherent right and bilateral fiscal relationship. The assumption of the bill is that the inherent right does not include control of local revenue collection on the financial management, and the collection of the revenue must be spent on infrastructure and other matters that would otherwise be the fiduciary responsibility of INAC.

The multi-million-dollar budgets of the institution will be drawn on an indefinite basis from the existing INAC envelope. This represents a perpetual transfer of funds from all first nations to a small number of communities and individuals.

The components of the bill develop a national, as opposed to a localized, model. This is national legislation that requires national support to proceed, and as I've mentioned, that was not sanctioned by all of the chiefs in assembly.

The bill does not address the principal fiscal recommendations of RCAP. There is not even a hint in the institutional package that Canada should increase transfers to first nations. In contrast, over the last couple of years the provinces have made huge financial gains by demanding more money from Canada--the provinces have sucked more money, not more institutions.

The institutional package presented is based on the assumption that increased revenue for first nations should be self-generated through local property taxation and lending based on this taxation. In my view, this is not a realistic option for nine out of ten first nations.

The Penner report recommended a new bilateral fiscal relationship. Increased annual transfers from Canada would be based on all relevant factors and would be determined through a nation-to-nation negotiation. Echoing this approach, the principal fiscal recommendation of the RCAP report was a massive transfer of funds to first nations over a period of 20 years.

¹ (1530)

Just on that, because the other part of this suite of legislation is the claims bill, we don't feel that in regard to taxation there should be any consideration by our communities with regard to implementing a tax system in our communities until our specific and comprehensive claims have been settled by Canada. The specific claims are legal liabilities to Canada until they have been settled.

With that, I think I've made it quite clear that our association is not in support of this bill. The chiefs from our association did support the national resolution calling for a regionalized bill. Hopefully, that will be acceptable to the committee for consideration.

Now I would like to turn the rest of my time over to any questions committee members may have.

The Chair: Thank you very much, Grand Chief, for an excellent presentation.

We will have time for a three-minute round. That means three questions of three minutes. That's the question and the answer.

Grand Chief, I apologize, but if I run out of time, it's you who I will have to cut off. I'll try to do that gently, because I want to allow you time at the end for closing remarks.

Mr. Vellacott, you have three minutes.

Mr. Maurice Vellacott (Saskatoon—Wanuskewin, Canadian Alliance): I'll ask Pauline to start, if that's okay.

The Chair: Madame Picard.

[Translation]

Ms. Pauline Picard (Drummond, BQ): Thank you, Mr. Chairman. Unfortunately, I was unable to understand all your comments, given the problems we had with the audio.

However, I believe I understand you are not in favour of Bill C-19. I would like to know whether you would prefer the status quo, or whether you are suggesting that Bill C-19 be amended. Which do you consider the better option for you?

¹ (1535)

[English]

Grand Chief Chris McCormick: The best solution, in my mind, would be to localize the legislation so that the legislation would include the specific first nations that want to be part of it, and that the opt-in clause is dropped--for instance, that Kamloops and Westbank, or whatever other first nations are supporting this, be given the opportunity and that their names be included in the legislation, and that's what goes forward. The opt-in, opt-out clause would have to be dropped. That has support from the national chiefs in assembly, and to me, that would be the best way to go.

We don't want to be stopping first nations that can benefit from this legislation. We just don't see putting in national legislation that has no benefit for first nations that do not have that type of economic base or presence of non-native businesses to be able to set up a tax foundation in our communities. You can't get blood out of a rock.

The Chair: Thank you.

Merci, madame Picard.

Mr. Hubbard.

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

Good afternoon, Chief.

With the concept of other people having properties on reserve--buildings and so forth--do any of the first nations that you're associated with have such situations, and if they do, do they attempt to request payment or taxation of those buildings on an annual basis?

Grand Chief Chris McCormick: Thank you for the question.

The process we have for communities that have minimal non-native interest and the approach we have taken in our communities is that they are charged rent for their use of the buildings that are on the reserve. The reserve owns the buildings and they rent the buildings out. That's the method by which we receive just payment from their presence on the reserve and the economic opportunities they have for being there.

Mr. Charles Hubbard: To exaggerate a little bit, let's say Wal-Mart wants to make a large complex, as another company, not Wal-Mart, did in Millbrook, and they offer a chief and his council the idea that they would make this economic or commercial enterprise there. You say you would charge rent rather than a tax on their property, being on your land over a period of time.

Grand Chief Chris McCormick: No, you asked me what was the procedure in first nation communities that are members of our association.

Mr. Charles Hubbard: Yes.

Grand Chief Chris McCormick: The approach has been that they stay away from the idea of a tax on reserve. We believe we've paid our taxes. The approach they take with non-native interest on the reserve is that presently they charge rent for the presence there.

Mr. Charles Hubbard: So you're saying it should be written in the legislation which first nations would be part of Bill C-19.

Rather than being able to opt in on their own, they would have to come back to Parliament to have another first nation, or whatever, added to the list that might be created as a result of the bill passing, we'll say, this fall or this summer.

Grand Chief Chris McCormick: I think that's fair. I think the chiefs that were in assembly were quite cognizant of the resolution that was put to the floor, and I think 95% of the delegates accepted the resolution. So if first nations are made aware that they have this one opportunity to opt into this legislation, then the chief and the council in their community can make a decision as to whether they want to be part of this legislation or not, and if they have a timeframe, then the responsibility is on them. That way you have respect for chief and council in the communities. If they say they don't want to be part of the legislation, then they've made a decision that they feel is in the best interest of their community, and I believe that should be respected by this committee and Parliament.

¹ (1540)

The Chair: Thank you.

Thank you, Mr. Hubbard.

Mr. Vellacott, you have three minutes.

Mr. Maurice Vellacott: Thank you very much, Chris. It's good to see you again.

I think you made your point clear--as have numerous others to different ones of us, and I think to the committee as well--that the schedule or the list would be the best way to go.

There's obviously some misunderstanding, because my understanding is that under the First Nations Land Management Act we had the initial 14 first nations and the additional ones coming on. It's not a requirement for it to come through Parliament; it's a Governor in Council issue.

I think Mr. Bellegarde yesterday was making the point....

In fact, it's section 45 in the First Nations Land Management Act. So I don't know what the dilemma is. It doesn't have to come through Parliament, so why are people fretting the fact that it's going to take a long time to come through this sometimes dysfunctional place called Parliament? Personally, I can't understand or see the problem.

The other point is made by those who are really pushing and promoting Bill C-19. Mr. Jules has made the point that some of these groups in the First Nations Land Management Act are tied up for four years or longer. What's that about? Are you aware of situations that can't get into the First Nations Land Management Act? It's an act of the Governor in Council. So is this to say the cabinet is a little bit resistant or dragging its heels at letting others in? Why is it taking them four years?

Grand Chief Chris McCormick: I'm not sure of the complications of that particular situation. It may be the way the bill is written up and the provisions for the requirements of membership, but as I'm saying, in our assembly, the national assembly, this has been an ongoing discussion. It has been to several of our national assemblies, and as I explained, at the one in Halifax there was a provision that the fiscal relations committee of the AFN continue to work on draft legislation but that the legislation had to come back to the chiefs in assembly for their approval.

When the bill was introduced, the chiefs were aware of the content of the bill. They've made an attempt to accommodate the first nations that want to be part of the bill. I think they have the capability, the experience, and the knowledge to decide whether they want to be in the bill or not, and given that opportunity, they can say whether they want to be or not. Then that should be the close of the bill.

It's all we're requesting, that--

Mr. Maurice Vellacott: Right, and I think there's some misinformation. Clearly what it reads here in regard to section 45 of the First Nations Land Management Act, which is an approach in the way of scheduling, is what many are suggesting to us with respect to the FNFA and Bill C-19. So I guess I and the parliamentary secretary will have to have a discussion, because I don't see the issue that it's not going to have to go through and be at the vagaries of Parliament shutting down or at the behest of Parliament; it's a Governor in Council issue of adding those names. That doesn't seem like a tremendously complicated process to me, and they can get on very quickly at such time as they chose to.

But in the meantime, you list them and deal with that and provide the reassurance to those who are not comfortable with the way they're shunted by way of an opt-in, opt-out kind of thing.

The Chair: Thank you, Mr. Vellacott. That completes your time.

Grand Chief, we would like you to use the last three minutes for closing remarks, whichever way you choose.

Grand Chief Chris McCormick: I would just like to thank the committee. I think I've been as clear as I can be regarding our association's position. It has been at two assemblies. We have been monitoring and speaking with parliamentarians and senators about this bill. We've been joined by first nation representatives from across the country in our lobby. I think the chiefs have put their minds together and have come up with a good solution, and all I ask is that you respect what the chiefs are saying on behalf of their communities.

You can also meet the wishes of the communities that do want this bill; pass the bill with their names in it and everybody will be happy, and it will be something that everybody can live with.

Thank you very much.

The Chair: Thank you very much, Grand Chief.

We apologize for the sound problem. We're told it's because the sound is coming through the Internet--imagine--and we're having a problem. The future ones are coming through telephone lines, so we'll see if it goes better.

We are now going from London, Ontario, to Edmonton. In Edmonton we have, from the Saddle Lake First Nation, Councillor Eric J. Large.

Thank you very much. We have half an hour together. We welcome you. We'd like you to start with your presentation, and hopefully in the half hour you would allow some time for questions.

Please proceed.

¹ (1545)

Mr. Eric Large (Councillor, Saddle Lake First Nation): Thank you.

[Witness speaks in his native language]

The approximate literal English translation of what I said is, “I salute you, the Queen's young men, today. I anticipate the success of this, which we are going to discuss.”

Dear Honourable Bonin, first of all, I would like to thank you and your committee for hearing my presentation on Bill C-19, the First Nations Fiscal and Statistical Management Act.

Secondly, this presentation I am making on behalf of the Saddle Lake Cree Nation is not to be construed, interpreted, or translated as consultation for the passage of Bill C-19. I am expressing my first nation's concerns with the proposed intent and potential impacts of Bill C-19, which I will attempt to briefly outline.

I will introduce myself and my nation. Honourable members of Parliament, my English name is Eric J. Large. I am an elected member of the great Saddle Lake Cree Nation in my fourteenth year on the council, including a three-year term as chief from 1992 to 1995.

Saddle Lake Reserve No. 125 is approximately 70,000 acres of park and agricultural land situated in the west-central part of Treaty 6 territory in western Canada. The Saddle Lake Cree Nation is comprised of approximately 8,000 members of the amalgamated bands of Chief James Seenum Pakan and Chief Little Hunter Onchaminahos, who signed Treaty No. 6 on September 9, 1876 at Fort Pitt. Chief Chief Bear Ears Muskegwatic and Chief Blue Quill adhered to the same treaty shortly thereafter.

As proposed in part 1 of Bill C-19, “First Nations Fiscal Powers”, Saddle Lake Cree Nation does not permit any body or commission of any other government to determine its fiscal powers, let alone raise the issue of taxation. We already have a fiscal relationship based on Treaty 6 whereby in exchange for the sharing of the topsoil of the land with the settler government, our signatories agreed at the treaty negotiations to coexist in peace. Through this relationship, the Crown in right of Great Britain and Ireland—and by extension the Crown in right of Canada—is obligated to fulfill all promises it made to her Indian allies and their descendants, including the provision of fiscal and other resources. This understanding of the obligation of the Crown to her said Indians included exemption from all taxes.

Bill C-19, through the creation of the tax commission, will severely limit and erode this special arrangement. Our people today believe it will gradually open the door for all sorts of taxation on reserve, including property taxes, school and hospital taxes, and personal income taxes on our first nations citizens. It would be open season for third-party interests to begin encroaching on our remaining lands and resources, while the federal government would gradually allow the infringement of our treaty and constitutionally protected rights.

With the formation of the First Nations Finance Authority, first nations will be offered the option of raising their own moneys to finance their infrastructure and public works. However, only first nations with excellent credit ratings will qualify for this funding pool, leaving many unable to access it. Also, according to informed sources, investors in the large bond and debenture markets do not invest in small amounts in the range of $20 million, but in the $200 million range and higher. It is understood that the first nations pool may not come close to that high level, thereby resulting in less money to access.

Here again, the Crown is gradually eroding its treaty and constitutional obligations to provide the necessary capital to ensure that the public works and infrastructure on reserve protect the health and well-being of first nations peoples, through assuring high-quality drinking water, safe roads and buildings, sewer systems, and landfill sites.

¹ (1550)

With the First Nations Financial Management Board, another multi-layered costly bureaucracy will be created from which ostensibly first nations will seek advice on better management practices. However, the access to this board will also enable first nations to continue a relationship of dependency and paternalism. It will not serve the first nations such as Saddle Lake who already have the confidence and proven track record in managing their own affairs in a manner that meets or exceeds standard management practices.

In Saddle Lake we have many continuous reports. Management systems are in place in various service programs, and policies and procedures are adhered to and accepted by our staff and the people of our nation.

The creation of the fourth institute under Bill C-19, the First Nations Statistical Institute, enticingly offers first nations the opportunity to collect, compile, and analyze more data, information, and statistics. However, it does not logically follow that more of the same will result in increased funding necessary to improve the deplorable living conditions of first nations peoples anywhere.

The information gathered is supposed to be used by first nations to justify further funding from the various government departments. Many first nations presently use Statistics Canada data and data from various federal departments, but the first nations don't necessarily receive additional funding for much needed services in all areas: public works, education, health, social development, administration, policing, economic development, employment, tribal justice, child welfare, etc.

Furthermore, first nations have already been studied and analyzed continuously since their discovery in 1492. Numerous governments, agencies, royal commissions, and institutions have collected and compiled statistics on first nations peoples from our cradle to our grave. Supporting statistics, notwithstanding their perceived utility, are often superceded by the government of the day's fiscal and monetary policy. That is, if economic uncertainty prevails, a policy of fiscal restraint may take effect.

I submit that all of the energy, planning, commitment, and financial resources that the above four proposed institutions would require would be better spent in providing for the much needed services directly at the first nations level.

Honourable members of Parliament, with all due respect, I am ordering you to reject this Bill C-19 legislation because it fails to include a non-derogation clause on our treaty and constitutional rights, the consultation process is flawed, and the fully informed consent of Saddle Lake Cree Nation has not been obtained.

Lastly, I am wisely advising the federal government, which you represent, that it would better utilize its efforts and resources in recognizing Saddle Lake Cree Nation's self-determination by supporting its efforts at nation building and economic development, its demand for adequate land and resources, and by the Crown's honouring its treaty and constitutional commitments.

Thank you.

¹ (1555)

The Chair: Thank you very much, Councillor.

We will now go to a first round. I think we'll only have time for one round of five minutes.

Mr. Vellacott.

Mr. Maurice Vellacott: Thank you. Thank you so much for being with us.

This is something about which I don't know if you've had discussions with other of your colleagues and leaders, but there's much made of the fact that this is opt in or opt out, or it's optional. That's true to a certain degree, but there are about 103 bands, as I understand, that are already doing some form of taxing. With Bill C-19, if my understanding is correct, section 83 of the Indian Act is gone, which is the basis and the authority for those 103 first nations to tax.

When this bill comes into effect, if they want to keep taxing—if they're happy with continuing to do that in their reserve situations—they have no option at all; they have to go into Bill C-19. The only way they could not would be to say, “We're going to drop taxing altogether”, or something of that kind.

If these 103 bands are carrying on with taxation—that's one-third of the 600-plus in the country—they have no choice but to come under Bill C-19. If you call that a “choice” or “optional”, then some of the people who are making much of the optional nature of it have a rather different definition of what “choice” and what “options” mean from what we have. There's clearly no option for those people: they're either into Bill C-19 or they drop their taxing altogether.

Do you have some comments with respect to that? Would you agree with my assessment there? Would you agree with what I've said and my assessment of it?

Mr. Eric Large: I'm not sure if I can agree, but I can try to comment a bit.

Earlier I mentioned that aspects of this legislation are an enticement for first nations to take up the offer of the government to do their own fundraising, but letting the government off the hook, as it were, in meeting its constitutional—in our case, treaty—obligation to continue to provide, as adhering to treaty.

A lot of people don't understand the treaty relationship. It obligates the Crown to provide for the health, safety, and general well-being of the said Indians pertaining to that treaty.

Unfortunately, some of the first nations have not been able to come to terms in negotiating a treaty with the Crown. They are in a disadvantaged position, in my view. Hopefully, what they do does not apply nationally. I suppose it's their option to go into that type of arrangement, but as for us, according to our customary practices and the teachings of our elders, the treaty or treaty understanding is a priority.

Mr. Maurice Vellacott: I appreciate that. I guess my view as a committee member here is if this is good for first nations and they want it, I would be supportive of it. But given the fact that many have reservations about it, I don't want us to be under any delusions. My bigger concern is more important, that we not be under a certain deception that there's this glorious and wonderful opt-in provision when in fact there are some qualifiers to it—and some pretty specific ones—for those nations that are already taxing.

The other thing I have a concern about is that I don't understand what's at issue. Maybe the government would support it if they understood that with schedules listing the different ones, there are not really major obstacles or insurmountable barriers to getting into this hereafter; it's a Governor in Council decision.

If they have concerns about the ability of their own cabinet people to move agilely and take in those new ones that want in at points down the road, as soon as they qualify, then that's a different issue and a different concern, but it would seem to me we shouldn't have a problem that way.

The Chair: Thank you, Mr. Vellacott.

Madame Picard.

[Translation]

Ms. Pauline Picard: Thank you, Mr. Chairman.

Mr. Large, I fully understand your concerns. You believe the government will withdraw from the treaties and agreements it has with the communities. However, everyone agrees that to achieve full self-determination you have no choice but to develop your natural wealth. Of course, you will have to have the financial tools to do so.

Don't you believe that Bill C-19 could provide the financial management tools you need for this?

º (1600)

[English]

Mr. Eric Large: It's a good question. I would say not necessarily. We see it from a different point of view. There are a lot of conditions. I mentioned one: a first nation has to be in good credit standing. I'm not sure how many stars. Is it a triple rating, or triple credit, or close to that? How many? I'd like to know what percentage of first nations are in that category and how many first nations are in third-party management. That I don't know, but it's an enticement.

As for the aspect of economic development, we agree with that. It can be done through tax exemption. Most first nations are almost like a little dot in the whole scheme of economic activity, nationally or internationally. They don't have enough clout to go big time.

Aside from that, there's also capacity building, supporting of institutions internally, on reserve, that encourage institutional...I hate to use that word—our own institutions of governance. They're all linked. It's not just economic development.

We all know that governments, and investors especially, want stable political climates in communities before they invest. So there has to be support for our own institutions. For example, in the area of governance—I mean the internal structure of government on a reserve, the chief and council, their administration, their tribal justice system, all of that, and their support for youth, children, elders—all that has to be internally linked before economic development. Also, I forgot to mention the most important ones: an adequate land base; access to mines, minerals, and resources; and traditional gathering areas.

The little problem we have is accessing our own moneys—they're in Ottawa—because there are too many restrictions in the Indian Act. There's oil and gas. There's not just the Indian Act; there are also other acts: the Indian Oil and Gas Act and regulations; the Financial Administration Act. There are a lot of obstacles and criteria before we access money sometimes—even our own money that's supposed to be held in trust there in Ottawa.

[Translation]

Ms. Pauline Picard: I have one last question. Were your communities consulted before Bill C-19 was formulated?

[English]

Mr. Eric Large: As far as I know, we weren't consulted.

[Translation]

Ms. Pauline Picard: Thank you.

The Chair: Thank you, Ms. Picard.

Mr. Binet, you have five minutes.

Mr. Gérard Binet (Frontenac—Mégantic, Lib.): Thank you, Mr. Chairman. Good afternoon, Grand Chief.

We have now been focusing on aboriginal affairs for 15 months, I believe. Is that correct, Mr. Chairman?

The Chair: The study of Bill C-7 alone took 16 weeks.

Mr. Gérard Binet: I'm talking about all aboriginal issues. Our committee deals with natural resources, aboriginal affairs and northern development. For a little over a year now, we have been focusing on aboriginal affairs.

Yesterday, I was extremely encouraged by the people I met who were in favour of Bill C-19. In their eyes and words, I saw very encouraging signs for the future. The adage “what you think about, you become” applies very well in their circumstances.

After all those meetings, some of which were for Bill C-7, I have started to wonder whether your opposition to this bill was based solely on your mistrust of the government.

º (1605)

[English]

Mr. Eric Large: I can't really speak directly to the bill itself. It's not of our making, of first nations making, especially Saddle Lake. It's the federal government's initiative, the government in power at this moment.

I can only say our first nation is still desirous for the Crown to honour its treaty and constitutional obligations. That's about all I can say. I don't know how to explain this. Even at that, there's some optimism. We still trust the Crown to live up to its treaty and constitutional obligations. It was always there. There's no question. Our treaties cannot be eroded by mere legislation that some other group may desire for whatever short-term benefit, or perhaps long-term benefit, as they see fit in their region or locality.

But to make this legislation nationwide in scope and say it's the best thing that has ever come out of the government, and to have people make a sales pitch, as it were, for it, that I can't control. I can only speak for our membership over here.

[Translation]

Mr. Gérard Binet: However, Grand Chief, this bill does not come from the government. It really was formulated by aboriginal communities. I have even asked the minister whether he worked on it. It turns out that it really is a bill formulated by aboriginal people.

So I wonder why your attitude towards this bill is based on your mistrust of the government. I would like to know whether you really do not want this bill, or if your opposition to this bill is a way of expressing your fears that the government will not fulfil its obligations.

[English]

Mr. Eric Large: I don't believe I said we had a lack of trust. I was raising concerns, or trying to raise concerns, with the proposed intent and potential impacts of Bill C-19 on my first nation here in western Canada.

The Chair: Merci, Monsieur Binet.

Councillor Large, we invite you to make closing remarks at this point.

Mr. Eric Large: I don't have any, Chairman Bonin. I wish to thank you once again.

The Chair: We wish to thank you very much. Thank you, sir.

Now we go from Edmonton to Parliament Hill in room 253-D. I invite Ken MacLeod to please come forward. Mr. MacLeod is a former inspector of municipalities for the B.C. Ministry of Municipal Affairs.

Welcome, Mr. MacLeod. We invite you to make your presentation. We have 30 minutes together. Hopefully, you will allow some time for questions.

º (1610)

Mr. Ken MacLeod (As Individual): Thank you, Mr. Chairman.

I was just giving a copy of the outline of my remarks for translation. It may help, but I'll improvise a bit on the way as well.

I'd like to begin by thanking you and the members of the committee for the privilege of attending today. My presentation is going to be drier and a bit more technical than some of the presentations you've heard up to this point, but I hope it won't be so dry that it obscures my support for the bill. I want to affirm that at the outset.

I recognize that the main financial accomplishments of Bill C-19 are the establishment of practical systems of taxation and capital borrowing; however, I've examined the bill from a more general perspective.

I tried to pose to myself the question: how does Bill C-19 contribute to improved financial management in participating first nations? The method of answering that I employ is to present a checklist of financial management criteria and examine Bill C-19 against those criteria.

I should also mention in advance that I say very little about the statistical institute, not because I have any doubts about its value, but merely because I possess no relevant experience there.

So let me run through this. It's a bit list-like, maybe even list-less, but it's the list of relevant factors. I call them the factors contributing to successful financial management at the local level. By “local”, I mean either a first nation or it could be a municipality. And lest there be any concern on the ground that I'm inferring that we're municipalizing first nations, that's not the case. The comparison I'm making does not mean that first nations are, or need to be, identical in all respects with municipalities, especially in the area of their constitutional status. I'm simply saying there are many functional similarities, and to the extent that first nations are like municipalities, they can be well served by institutions based on municipal models.

First of all, I'm going to talk about the internal factors that contribute to successful local financial management. By “internal”, I mean residing within a first nation. You need, obviously, a policy-making apparatus that can deliver clear and resolute policy direction. This exists already, and will continue to exist regardless of whether or not the governance legislation is implemented.

Bill C-19 has the potential to improve the quality and depth of policy-making. As well, a local authority needs an administrative apparatus. This already exists, of course, and will continue in some form regardless of whether or not the new governance legislation is implemented.

Bill C-19 has a potential to improve the quality and depth of policy-making. At the local level, one needs a body of rules and practices that are relevant, fair, and clear. Bill C-19, and especially the provisions in it dealing with the Financial Management Board, the First Nations Finance Authority, and the First Nations Tax Commission, contains many requirements for the preparation and documentation of laws and reports by those first nations that opt in.

At the local level, one needs commitment to sound financial management by both policy-makers and by administrative staff. The notion of codifying commitment is a difficult one, but I think that commitment is part of the spirit of Bill C-19. It's certainly evident in the position taken by many of the speakers who are proponents of it.

One needs as well at the local level administrative capacity and competence through adequate resources, training, and professional direction. This largely refers to the quality of the administrative personnel, their systems, and their equipment. Bill C-19 should influence and encourage the development of such qualities.

At the local level it's necessary to have a complement of services whose delivery justifies the need for revenue, helps to quantify the need for revenue, and requires proper financial controls and records. This already exists and is reinforced and rigorously defined by the lawmaking provisions of Bill C-19, as well as by the provisions that spell out the powers of the Financial Management Board and the First Nations Tax Commission.

º (1615)

Finally, at the local level one needs a revenue base consisting of one or more revenue sources, some of which may be general and some of which may be matched to particular services, a revenue base that is sufficient in the aggregate to fund services and capital obligations, that is administered fairly and effectively, and that is supported by proper financial controls and records. Other features of the revenue base could be a sound and realistic budget and/or financial plan, timely monitoring of procedures for identifying deviations from the budget and the financial plan, and effective procedures for a timely response to deviations.

Again, much of this already exists, but it will be reinforced and more rigorously defined by the provisions of Bill C-19 dealing with lawmaking, with the Financial Management Board, and with the First Nations Tax Commission.

Now I'll go on to talk a little bit about the external factors that contribute to the success of local financial management. By external factors I mean largely in this case the powers residing with the institutions that Bill C-19 creates. So one of the things you need is a common body of rules, standards, and performance expectations to serve as the framework for the policies, rules, and administrative practices at the local level.

The rules must be clear, fair, and relevant, not only to the communities themselves, that is, the first nations, but also to external investors, external lenders, taxpayers, and so on. The rules and standards should in some fashion be linked to professional organizations and their standards where that's relevant. A good deal of Bill C-19 is devoted to this. You could look at, for example, clauses 8 to 13, 27, 33 and 34, 47 and 48, and 53 and 54. So there's a lot of work there.

The external environment should also contain capacity-building programs that afford technical advice and models, training, mentoring, and sufficient resources. This is another area of emphasis in Bill C-19. You could look, for example, at clause 27 or clause 47.

One also needs at the external level, the institutional level, thorough scrutiny of policies, practices, and records. That's the foundation for both the advisory and the approval activities of the institutions. It's a core activity under Bill C-19 and it serves the interests not only of the first nations communities, but also their taxpayers, lenders, and the fellow members of the borrowing pool. Again, you can look in clauses 31 and 48 for some of the relevant powers.

The external level should also be capable, or the institution should be capable, of providing advice directed toward local authorities. It's preferable to have advice rather than to have intervention, and certainly preferable to withholding approval. The ability to use advice or persuasion is implicit throughout the bill.

The approval process is an important part of the bill as well. I'm speaking here, for example, of approval of bylaws, first nations laws in the financial sphere. It's integral to the success of this kind of endeavour because capital markets insist on various types of protection. Also, an approval system is present to protect borrowing pool members and can be a preventive measure, making intervention unnecessary. So this is another core activity of Bill C-19, which establishes a logical sharing of approval responsibilities among the Financial Management Board, for instance, clause 8; the First Nations Finance Authority, for example, clauses 74 and 77; and the First Nations Tax Commission, for example, in clause 4.

º (1620)

As well, and as a sort of last resort, intervention involving the assumption of local powers by regulatory appointee is part of the protective package for lenders and for the borrowing pool. This consists of scrutiny, advice, approval, and then ultimately intervention if necessary.

The availability of remedial measures is as important as their use. Nevertheless, interested parties, borrowing first nations, lenders in the market, must believe that intervention will be used if the situation—and this is an extreme situation—such as default or misapplication of laws warrants. Again, you can look at a number of clauses of Bill C-19 that provide multiple entry points in case intervention is necessary. Clauses 50 and 51 are the main areas where you'll find them.

To conclude the initial portion of my remarks, I think Bill C-19 is technically sound. I think it has the potential for outstanding success. Of course, I use the word “potential”, and the potential has to be realized through implementation. I'm confident that successful implementation can be realized, and the two grounds for my confidence are, first, the bill, to a great extent, imports and adopts successful models; and second, the committee has seen the calibre and the commitment of the involved leaders who have appeared before you, and that also is grounds for confidence.

Thank you, Mr. Chairman, for your attention.

The Chair: Thank you very much for another excellent presentation.

We'll do a five-minute round.

Madame Picard, cinq minutes.

[Translation]

Ms. Pauline Picard: Thank you, Mr. Chairman.

Mr. MacLeod, we have heard witnesses who were in favour of this bill...

[English]

The Chair: Mr. MacLeod, the way those things are rolled up is a decision of the committee.

We'll start the clock again.

Madame Picard.

[Translation]

Ms. Pauline Picard: Good afternoon, Mr. MacLeod.

You used to be a municipal inspector with the British Columbia Ministry of Municipal Affairs. I would just like to ask you, out of curiosity, whether you worked in aboriginal communities.

We have heard many witnesses who were in favour of this bill, particularly first nations from British Columbia. It seems that the British Columbia first nations, for whom C-19 would be an advantageous bill, would benefit more than others and have already achieved a form of self-determination.

In fact, they are in a position to develop their natural wealth and are already on the financial markets. Opponents to Bill C-19 express a fear that C-19 would bring them no benefits. Since they are not in a position to develop their natural resources, they are afraid of being obliged to accept the bill, and that the federal government—particularly Indian and Northern Affairs—will then withdraw from its responsibilities towards aboriginal communities.

In order to benefit from Bill C-19, do aboriginal nations have to be financially independent?

º (1625)

[English]

Mr. Ken MacLeod: Thank you very much.

I'll begin by saying, yes, I was the head of the municipal affairs department in B.C. for a number of years. We had no jurisdiction over aboriginal communities, but I and members of my staff did on occasion work on special projects, such as the Sechelt legislation, etc.

I don't have much knowledge of what you might call the universe of first nations across the country. I do know that within British Columbia there is a range of more or less prosperous, and larger and smaller, first nations. It may well be that there are more of the richer and larger first nations in B.C. than elsewhere, but I couldn't give you facts and figures on that.

Your question as to whether Bill C-19 leaves some of the smaller first nations out in the cold I think really misses the point of the bill itself, which is to provide those who choose and are able to make use of its institutions the ability to do so. I've seen nothing in Bill C-19 that withdraws resources from first nations who do not use the bill. To have drawn that conclusion, one would have to read between the lines with more depth and imagination than I have.

[Translation]

The Chair: Mr. Binet, you have five minutes.

Mr. Gérard Binet: Thank you, Mr. Chairman.

Good afternoon, Mr. MacLeod. I'm very happy to be speaking to you, for the good reason that I was a mayor before I became a member of Parliament. I therefore have a very good grasp of municipal issues. During my four years as mayor, I merged four communities. I have therefore had experiences that may somewhat resemble the experiences we are seeing within aboriginal communities.

Bill C-19 will give those communities that want it the opportunity to take control. I find that a very good thing. I would even say I am very excited about it.

We have heard the comments of a number of chiefs. They say you can't get blood out of a stone because there isn't any there. Have you assessed the 630 communities to see which of them are in a position to collect property taxes and which have no chance of doing so? Did your assessment show that a number of communities could collect property taxes?

[English]

Mr. Ken MacLeod: I haven't reviewed the statistics in detail, but during the course of these hearings I've heard that the potential number of participants in taxation and/or capital borrowing could amount to several hundred...200, give or take....

[Translation]

Mr. Gérard Binet: In your view, are there really any communities that have no power, that have only rock and absolutely nothing to develop? Out of those 630 communities, are there 300 or so in that position, or are we talking about a very few?

[English]

Mr. Ken MacLeod: Again, I have to confess ignorance.

I don't have clear information in my mind on how many of the 600-plus first nations in Canada have what level of population, what level of income, and what level of tax base.

I'm afraid I'm not an expert in those matters.

[Translation]

Mr. Gérard Binet: Thank you.

[English]

Mr. Ken MacLeod: You mentioned les fusions, but I gather that les défusions is now the order of the day in Quebec.

Is that correct?

[Translation]

Mr. Gérard Binet: I was a part of the only municipality that was merged without being designated, and without anyone contesting the merger. We had a plan and a vision. That is what I saw in this bill yesterday. I am certain that the measures in this bill will be a success.

º (1630)

[English]

The Chair: Merci, Monsieur Binet.

Mr. MacLeod, we invite you to make closing remarks.

Mr. Ken MacLeod: Thank you, sir.

I will just reiterate some of my reasons for supporting the bill. I consider the bill to be useful, to use a pedestrian word but one that's quite high praise from a bureaucrat. I think the bill will be effective because it's practical; it's no more complicated than it needs to be.

It has good prospects for success. It satisfies real needs and will be demand driven in most respects. It was developed and supported by capable and committed community leaders.

So I thank you for your attention.

The Chair: We thank you for appearing, especially on short notice, as we thank all others. It's not always easy to respond so quickly. We see the expertise that you possess, and your presentation will be very helpful to the committee. So we thank you very much, Mr. MacLeod.

We now go from room 253-D on Parliament Hill to Toronto, where we will hear from an economist with the Schulich School of Business, from York University, Fred Lazar.

Thank you very much, Professor. Welcome.

We want to thank you for accepting our invitation, especially on such short notice. We have 30 minutes together. We invite you to make your presentation, and hopefully you will allow some time for questions.

Please proceed.

Mr. Fred Lazar (Economist, Schulich School of Business, York University): Thanks very much for the invitation. It's again an honour to be able to be before the committee and express my views. I'll try to keep my comments as short as possible; nevertheless, it will probably take about five or ten minutes.

I am adamantly opposed to Bill C-19, so I want to make that clear from the outset, but let me put this into context.

According to an INAC backgrounder on this particular bill, the proposed institutions are intended to provide first nations with access to capital markets available to other governments. They are also intended to strengthen further the first nations real property tax system and provide greater representation for taxpayers. They are intended also to develop appropriate financial standards and increase financial management capacity. Finally, they are intended to fill the current gap in first nations statistics.

All of that sounds like a good idea, so what are the problems? Why am I opposed?

Well, the federal government, in my opinion, wants the first nations to impose property taxes and eventually income taxes on the reserves in order to put an end to the right to tax exemption and to enable the federal government to back out of its financial obligations to the first nations. Own-source revenues provide the escape route for the feds from their financial commitments.

Further, the federal government does not intend to give up its ability to control how money will be spent on reserves, even as it contributes less to the first nations.

It's useful to review this act within the context of the Government of Canada's approach to the implementation of the inherent right for and the negotiation of aboriginal self-government as outlined about eight years ago by then Minister of Indian and Northern Affairs Ronald Irwin.

According to the minister at the time:

Aboriginal governments and institutions exercising the inherent right of self-government will operate within the framework of the Canadian Constitution.... The inherent right of self-government does not include a right of sovereignty in the international law sense, and will not result in sovereign independent Aboriginal nation states....

Aboriginal governments and institutions must also be accountable to Parliament for funding provided by the federal government as a result of self-government agreements. Specifically, financing agreements must provide for a mechanism enabling Parliament to assess the extent to which public funds have contributed to the objectives for which they were voted.

All participants in self-government negotiations must recognize that self-government arrangements will have to be affordable and consistent with the overall social and economic policies and priorities of governments, while at the same time taking into account the specific needs of Aboriginal peoples....

In this climate of scarce resources it will be particularly important for governments to work together to harmonize funding and program and service delivery arrangements, thereby ensuring the most efficient and effective use of these resources. The government believes that, wherever feasible, Aboriginal governments and institutions should develop their own sources of revenue in order to reduce reliance, over time, on transfers from other governments.

In other words, the federal government views the exercise of negotiating self-government agreements as one whereby the federal government will relegate first nations to a status somewhere between municipalities and provinces.

Secondly, the devolution of spending responsibilities will be accompanied by no increase in federal spending; however, as the first nations become more self-reliant on own-source revenues, the federal government will reduce its contributions--all in the name of fiscal responsibility.

º (1635)

Thirdly, the first nations will be held accountable to the Canadian Parliament for their expenditures as long as there are transfers from the federal government.

So we have taxation, devolution, and control, which is the essence of this proposed bill, all wrapped up in the federal government's limited and historically and legally incorrect view of aboriginal self-government.

What are the advantages of fiscal independence? There are two, although only the first is highlighted by the federal government. The advantages are, one, first nations governments will have more flexibility in spending money in their respective priority areas; and two, the first nations will be less susceptible to pressure from the federal government as a result of the feds controlling the purse strings.

If the federal government recognized the legitimate sovereignty of first nations and fully compensated them for its breach of fiduciary responsibilities and its violation of the sovereign rights of first nations through the unilateral enactment of the Indian Act, the federal government would commit itself through legislation to transferring billions of dollars annually to the first nations.

What should be the starting point for determining the amount of the annual transfers? A review of the various historical treaties can lead only to the following conclusion: the first nations never gave up the land to the original white settlers or later to Canada. The first nations view of the verbal commitments made by both sides was that the lands were to be shared so that both groups could live and prosper together. This implies, at a minimum, that the first nations should have received at least half of the revenues and wealth generated by the land and the resources on or below the land.

In other words, the supposed advantages of taxation and fiscal independence, as suggested by this bill, would quickly melt away if the federal government honoured its commitments to the first nations and paid rightful reparations for its breach of what were fraudulently misrepresented treaties. Of course, all these transfers, since they represent money rightfully owed to the first nations, will not come with any controls by the federal government.

The real goal of the federal government, in my opinion, in promoting taxation on reserves and supposed fiscal independence is to set the stage for cancelling all tax immunity and for shifting more of the financial burden for social and economic programs onto the first nations and their people. Own-source revenues will lay the groundwork for the full taxation of Indians and the gradual reduction in federal spending on first nations health, education, social assistance, economic development, and infrastructure initiatives.

Now let's turn to the claim that this bill will provide first nations with access to capital markets available to other governments.

Economic development has to become the priority of all first nations governments. However, is securitization of tax revenues a necessary component of an economic development strategy?

The federal government sees securitization of tax and other long-term revenues as a means for the first nations to build up the infrastructure on reserves. Once more, securitization is seen as a means to devolve certain responsibilities to the first nations, but without commensurate compensation from the federal government.

Inadequate infrastructure, a legacy of inadequate funding by the feds, will be rectified by the first nations funding these investments using largely their own money, generated through taxation of property and eventually incomes on reserves, or current transfers from the federal government.

Undoubtedly there is a need for significant investments to upgrade the infrastructure on reserves, but the onus remains on the federal government to fully underwrite these costs.

The pooling of property tax revenues, as proposed in this act, will provide little comfort to the debt-rating agencies, and the amounts involved will be unattractive to most financial institutions. In other words, pooling of property taxes would not attract the attention of Bay Street.

º (1640)

The other dangers from being lured by the seductiveness of low-cost capital via securitization are that this would reinforce the trap being set to control financial affairs on reserves, accelerate the demise of tax immunity for first nations citizens, and put the first nations on a par with municipal levels of government.

If there is any merit in any part of this bill, the first nations can act unilaterally and independently to create what is useful and needed. They do not need to be led and controlled by the federal government.

The fine print in Bill C-19 screams out control. The proposed bill highlights the potential for control over almost all financial affairs on reserves. It appears to be the Trojan Horse to enable the eventual takeover of all spending decisions on reserves by the independent institutions to be created by this act.

The federal government has made it quite clear in the past that it sees self-government for the first nations as a limited exercise in which the harmonization of laws, standards, and regulations would be based on the primacy of the existing federal and provincial rules. This act is consistent with this view. By accepting this act, the first nations would be implicitly accepting the federal government's limited view of self-government.

Now my conclusions.

INAC has admitted that there might be a legal basis for the inherent right of self-government for the first nations, and these rights might even be enforceable through the courts. However, INAC, and hence the federal government, would prefer negotiations to define the scope for self-government. In effect, the federal government wants self-government to be constrained by the existing legal structures in Canada and it also wants to dictate the rules for self-government. Canada does not envision or desire self-government to result in true sovereignty. Rather, Ottawa wants self-government to be arranged as a paternalistic structure, as evidenced in this act and in the First Nations Governance Act.

But sovereignty, in the fullest sense of the term, is essential for the long-term economic and social development of the first nations. The Royal Commission on Aboriginal Peoples argued:

Compared with outside decision makers, Aboriginal leadership is more likely to have the commitment required to make development initiatives succeed and to mobilize the support of its communities.

In other words, first nations must assume complete responsibility and control for their economic development. This requires sovereignty.

Stephen Cornell and Joseph Kalt have stressed that sovereignty, nation-building, and economic development go hand in hand. Without sovereignty and nation-building, economic development is likely to remain a frustratingly elusive dream.

Furthermore, the dismal track records of the federal government in both regional economic development and first nations economic development do not provide any comfort in believing that Ottawa is capable of dealing with these problems. Money alone is not sufficient. In the case of the first nations, self-government and the financial capacity to govern are the prerequisites for development.

In order to start exercising sovereignty rights, the first nations collectively should begin to develop the governing capacity needed, and this capacity might even include some of the institutions proposed in this act. But creating the organizations that will be needed by first nations governments does not require the approval of the federal government. The creation can and should be handled independent of and in lieu of any federal legislation, which will only serve to ensure ongoing control by Ottawa and maintain the first nations as a subservient level of government within Canada.

There's nothing in this act that requires federal legislation. The first nations can select the few aspects that have any merit and develop the institutions and the rules, including the tax system, themselves and so ensure the autonomy of these institutions and of first nations governments.

There is no disputing that the first nations must be in control of their destiny, regain the rights to resources, expand their land bases, and continue to receive reparations from the federal government to support economic development initiatives, including education, health care, infrastructure, and social programs. There's also no disputing that economic development is necessary if the first nations are to take advantage of their sovereignty and their peoples are to flourish.

º (1645)

The bottom line, however, is that this proposed act will do nothing to enable the first nations to exercise their inherent self-government rights and their sovereignty, nor will it do anything to spur the development of first nations communities and economies.

Thanks very much.

The Chair: Thank you very much, Mr. Lazar.

We will proceed to a round of five minutes.

Cinq minutes, Madame Picard.

[Translation]

Ms. Pauline Picard: That was very interesting, Professor, but we should have had your presentation in advance. If you had provided us your brief, it would have been better because you said so much. As a professor, you know that what is taught is not necessarily fully absorbed. However, I did retain the salient points of your presentation.

I am very sensitive to the situation of the first nations. I should tell you that I don't much like the French term “reserve”. People are parked in the reserves, and it has become a word I find very difficult to hear. I look forward to seeing the first nations achieve full self-determination. I can say that, but I do have some questions.

Yesterday, we heard a number of witnesses. I don't know whether in your brief you made a distinction between Bill C-7—the First Nations Governance Act—and Bill C-19. I did not really hear you make a distinction between the two bills in your brief. I apologize if I failed to understand you well enough. Now, we are talking about Bill C-19. The first nations who appeared before us yesterday said they had worked on the bill for 10 years until it could be introduced. That is the bill we are now studying. As far as I can tell, the government did not interfere. The bill was really formulated and developed by the first nations. I know that some communities are opposed to the bill today. But this bill is not a creature of the government.

A few moments ago we heard Mr. MacLeod, a former municipal inspector with the Ministry of Municipal Affairs. He said he could see nothing in this bill that would allow the government to withdraw from its responsibilities.

I am a member of this committee, and I genuinely want to support the first nations. What would you do in my place? Do we keep this bill as it is, or do we amend it? And if we amend it, how do we improve the living conditions in communities so that communities can finally achieve full self-determination?

[English]

Mr. Fred Lazar: There are several questions you have asked, and they're all very good questions.

First of all, on the distinction between this bill and Bill C-7, one has to view them as a package. One is not really independent of the other. Their intent as expressed by the government is to change the relationship between Ottawa and the first nations and to try to create the foundation for the first nations to improve their own economic well-being. Those are the stated objectives for both.

This particular one tries to expand and clarify property taxation, create institutions that will enable first nations to borrow against these revenue sources, and create other institutions that will monitor the spending on reserves.

The problem with all of these...and again, you have to look at a wider context—what the government says the objectives are, and the historical relationship and historical intent of government. These bills must be looked at within that historical relationship and intent.

When one does that, one recognizes that it basically tries to do what was stated in the 1969 white paper, what was done in the Nielsen task force, and even what predated the 1969 white paper. In essence, it tries to relegate reserves to municipal status. Secondly, it tries to reduce—minimize—the federal government's obligations and transfers to the first nations—basically shove them aside, get them off the backs of Ottawa. That is the longer-term intent. That is the sort of longer-term historical relationship within which these two bills must be reviewed.

º (1650)

The Chair: Thank you, Mr. Lazar. The five minutes are up.

Merci, Madame Picard.

Mr. Hubbard, for five minutes.

Mr. Charles Hubbard: Thank you, Mr. Chair, and good afternoon, Fred.

I've asked this question before and I think I had the answer last time. In terms of being associated with a very outstanding school of business and York University, is this a separate venture you're on, or is it associated with the school and the university?

Mr. Fred Lazar: I wish it were associated. I'm making some efforts for them to do things in this area. It's really the people at Osgoode who are more heavily involved in these issues and matters than anyone at the Schulich School.

Mr. Charles Hubbard: So your interest in first nations government, economy, society, and all that is more of a hobby, or are you employed by a group that is associated with this?

Mr. Fred Lazar: Am I employed by a group? No. Am I doing some work for a first nations company? Yes--to look at taxation issues.

My interest here really stems from two activities: one when I was involved in some of the final stages of the negotiations for Nunavut, and now from some of the work I did in taxation, when I started looking at the history of the relationships between Canada and the first nations.

Mr. Charles Hubbard: We had people yesterday like Manny Jules, Chief Tom Bressette, Harold Calla, and Ms. Hamilton who were here after 10 years, 15 years of trying to bring these efforts toward a conclusion, and there are about 100 or more first nations apparently who want them. You seem to want to throw cold water on all of this.

What is your perspective? Have you ever heard of the work of Manny Jules, Ms. Hamilton, or Harold Calla? Have you looked at their efforts and seen their aspirations?

Mr. Fred Lazar: Yes, I have looked at it. I also attended the AFN special meeting in November, where there was a vote on this. The vote was overwhelmingly against this particular act and the governance act.

With regard to the work of these individuals, I think they've been dead wrong from day one. As for it taking a long period of time, check into the role of INAC in the background. But it's taken an even longer time to resolve land settlement disputes.

Mr. Charles Hubbard: As a business professor, do you not see the need for first nations to have control of some of the resources that are on reserve and the fact that non-native people might want to put establishments there to provide revenues? You used the word “taxation”. Chief McCormick used the word “rent”. But you know, first nations have access to other resources besides the fiscal exchanges between our levels of government. Do you not see any need for some program to try to use those resources to enable first nations peoples to improve their economy and their living conditions?

º (1655)

Mr. Fred Lazar: Yes, but I go back to square one, and that is to start with the treaties, ownership of the land and resources. If you go back and study this and you understand the history and the culture, the conclusion one has to reach is that the lands were intended to be shared. If first nations had received from day one their fair share of the wealth, we wouldn't be here debating this. There would be no poverty in the first nations. Their economic status would be far superior to what it is today.

So what we're dealing with here are band-aid solutions that avoid addressing the key questions.

Mr. Charles Hubbard: But let's be philosophical for a minute. Rather than having less than 1% of the lands, if they had 50%, wouldn't this legislation be good to manage and try to control those resources on that 50%? Would it be good legislation?

Mr. Fred Lazar: If that were the case and they were truly sovereign nations, then what right would Canada have to enact legislation that dictates what they should or should not do on their lands in their nations? That's the fundamental disagreement I have with this act. It presumes that these are not sovereign nations, that they are wards of the state, and that really continues the Indian Act legacy.

Mr. Charles Hubbard: Do I still have time?

The Chair: You have 30 seconds.

Mr. Charles Hubbard: So with this, Professor, you're advocating or saying to our committee that in terms of this country, which no longer would be a country, there would be maybe 600 or 700 independent, sovereign nations. Is this what you're saying?

Mr. Fred Lazar: It wouldn't be that number. Remember, the 630 bands are the creation of the Indian Act. There would probably be a much smaller number of true first nations, and there would be a way for those first nations to collaborate and work among themselves, and in addition work with Canada to share the lands, share the wealth. There is more than enough land and wealth to go around. What we have to do is find a way to honour those treaty obligations and ensure the first nations have their fair share.

The Chair: Thank you, Mr. Hubbard.

Mr. Lazar, you have three minutes for closing remarks.

Mr. Fred Lazar: Let me just go back to some of the original questions that were asked.

What advice would I give on this bill? Amendments just miss the point. Are there some good features in the bill? Yes, there are, and those good features will be recognized by the first nations and can be adopted by them unilaterally. There is no need to impose legislation to tell first nations what is good for them and what is not.

This delusion that trying to expand the scope of property taxation and hence leverage these revenue sources by issuing bonds backed by these revenues is somehow miraculously going to improve the welfare of the people and spur economic development is entirely misleading and entirely ignores how the financial markets operate. Bay Street will not be interested in issuing bonds backed by property tax revenues. They are very interested in issuing bonds backed by transfers from the federal government. But again, this legislation is not required for the first nations to raise the capital that's necessary. What you need to do is change or scrap the Indian Act.

(Applause)

The Chair: Thank you very much.

I will have to insist that the applause in the room cease immediately. We're very tight on time and we're taking away time from our witnesses when we interrupt. So I ask you to cooperate on that issue.

Thank you very much, Mr. Lazar.

» (1700)

Mr. Fred Lazar: Thank you.

The Chair: Now, from Toronto we go to Winnipeg, and from the Assembly of Manitoba Chiefs we welcome--

A voice: I'm sorry to tell you the presenter from Winnipeg has been delayed in traffic and should be here in about 20 minutes.

The Chair: Okay. We have an hour together. We will have to start the clock now, because we will be interrupted for a vote. Hopefully we'll have at least a half hour left when they get there.

We will suspend until they appear.

Thank you.

» (1700)

¼ (1833)

The Chair: We can resume our public hearings on Bill C-19. We have with us, from the Assembly of Manitoba Chiefs, the grand chief, Margaret Swan.

Is Mr. Harper with you, Grand Chief?

Grand Chief Margaret Swan (Assembly of Manitoba Chiefs): No, actually, Mr. Harper is not with me. I am here to do this presentation myself.

The Chair: Thank you.

We have half an hour together. You may proceed. I think you know the routine, so you can make your presentation. Hopefully, there will be time for questions from members.

Please proceed.

Grand Chief Margaret Swan: Absolutely.

Thank you very much, again, for this opportunity, Mr. Chair. I apologize for being late. I can't claim Indian time, because I'm not Indian; I'm first nations.

First of all, I want to start off by saying and making it very clear that first nations in Manitoba, and Canada as a whole, have decided to oppose this bill as it is. I want to make it abundantly clear that our organizations in Manitoba support and recognize the diversity of nations in Canada. For this reason, we support any region or first nation that may want a legislative authority to carry out their governance initiatives.

The resolution at our November 2000 assembly clearly states that we, the chiefs in assembly, respect the right of these and other first nations to make their own local and regional agreements, but not in the context of national legislation. The reason for the rejection of this legislation is that this legislation will put us in shackles once again and further remove us from exercising our inherent right to self-government, to self-rule.

The second point I want to make is with respect to the consultation process, which was inadequate. There were people who were not being impacted by this legislation who have been consulted. This legislation is going to seriously impact on our people on a daily basis. The fact of the matter is, if you ask a chief or an average citizen on any first nation if they have any knowledge about this bill, clearly, they will tell you they do not. The response will be of ignorance, ignorance in that they do not have any knowledge of this bill. This is clearly very wrong.

I also want to state that if you want to properly consult a people, you must first deal with the basic needs issues with respect to housing and employment. Again, I will state that our history as first nations in this country is different from Canadians', and that has to be taken into serious consideration.

Finally, to have a government engaged in a video conferencing scheme at the eleventh hour in order to try to meet the legal requirements on consultation on this particular bill is not being honest or forthright with the people of Canada and its democratic institutions. The process and the negative impacts of this legislation will eventually bring dishonour to the Crown. I believe the approach on this legislation, and on Bill C-7, is a continuation of a colonial process that the government has always carried on to try to control our people.

This leads me to other points I want to make about Bill C-19. Let me start by saying that the wording, the language, and even the concepts in this legislation, are very disturbing and intrusive to our people, and this abrogates from our constitutionally protected right to be self-governing. When Canada imposes its authority and its institutions on us, it will not work. History cannot repeat itself. I would question, has the government not learned anything from the history of this country when it comes to our people? If it were not for government policies, we would not be in the dilemma, the crisis, we're in today.

I sincerely believe that in order for first nations governance to work, it must be designed by first nations for first nations themselves. There must be a sense of ownership and pride in these institutions, and we must be involved. Again, I'll emphasize, first and foremost, that in order for us to be effectively involved, we must deal with the basic needs issues; again, I will refer to housing.

As we know, there will be four institutions introduced by this legislation: the First Nations Tax Commission, the First Nations Financial Management Board, the First Nations Finance Authority, and the First Nations Statistical Institute. At the outset, I want to say that these institutions will further undermine our legal right to be self-governing.

¼ (1835)

It is unacceptable and it will meet opposition by the chiefs who know their constitutionally protected rights. I look at the taxation piece. Those are your systems; those systems are not ours. We want treaty implementation. We're not going to continue to adopt your systems, whether it has to do with taxation or otherwise.

If I understand the operation of the First Nations Finance Authority, I believe it will have the effect of reducing Canada's fiscal obligations to first nations. It's more or less a scheme of getting out of first nations business. Under this institution we note that the first nations will be borrowing from their own future revenues in order to finance capital infrastructure projects, which, in eventuality, diminishes the fiduciary obligation of the Canadian government to its first peoples. This is of serious concern to me.

I also want to make reference to the tax commission as envisioned by this legislation. The fact that we, as first nations governments, have to seek permission for approval of our annual budgets of expenditures and how we are to spend our own resource revenue is totally unacceptable. I believe this infringes on our right to govern ourselves and administer our own resource revenues. Here again, the constitutionality of this legislation comes into question because of infringement.

Another matter is the authority of the tax commission. It would seem the bylaw authority of section 83 of the Indian Act is now being passed on to the tax commission. From all indications, it will have sweeping powers to approve and even amend first nations tax bylaws if they are under third-party management. Again, I'll say, those are your systems. Why should we adopt them? Your systems don't work for mainstream Canadians, let alone us, and obviously, again, we cannot allow history to repeat itself over and over again.

I also want to point out that there is an assumption that first nations have agreed to have an institution that will oversee the financial management and administration of first nations governments. This legislation empowers the First Nations Financial Management Board to manage those first nations who have defaulted under their regime. This board, in essence, can impose co-management or third-party management on first nations. I have concerns about this as well, because currently there are accounting institutions that are big supporters of the Liberal Party of Canada that are awarded contracts.

Last, I do not agree with the collecting and sharing of information, especially as it pertains to our people. This is what the First Nations Statistical Institute purports to do. I know the control should be under strict control of a first nations institute that is not bound by federal legislation.

I conclude that Bill C-19 for certain will delimit and define our aboriginal and treaty rights as recognized under the Canadian Constitution. I also make my point again that in order for first nations governance to work, it must design its own governance structures and institutions, without adopting your systems. Imposing governance structures and institutions is unacceptable. I believe this legislation and Bill C-7 impose too much on first nations, and I personally do not think it's healthy for the Government of Canada to continue to oppress first nations and impose their prescriptions on first nations people.

Again, in closing, what we want is treaty implementation. We have eleven treaties that were signed in this country. I urge the Government of Canada to look at those historic agreements, specifically as they relate to our natural resources. If you honoured those agreements and shared the $700 billion that you generate from exporting natural resources that we never gave up the rights to, we wouldn't have the housing crisis we have in our communities. We'd be well on our way to healing our people from your policies, like residential schools.

Again, I thank you very much for this opportunity, and I'm now open four questions.

[Witness speaks in her native language]

¼ (1840)

The Chair: Thank you very much, Grand Chief.

We'll do a five-minute round.

Monsieur Loubier, cinq minutes.

[Translation]

Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Good afternoon, Grand Chief Swan. I am happy to see you here today. I have several questions for you.

First of all, you say that Bill C-19 is completely unacceptable to you. The bill could be amended, particularly to reflect the views of first nations who do not want use the institutions described in the bill. Some first nations—140, if my memory serves me—say they would like to establish the institutions described in Bill C-19, while others do not wish to use them. We could draw up a list of the first nations who could use the institutions, and a list of those who would not use them, without prejudice to those who would not use them. This has already been suggested as a possible amendment.

Would this sort of amendment make it easier for you to accept the bill, and lead to greater consensus among first nations?

¼ (1845)

[English]

Grand Chief Margaret Swan: I'm sorry, but I wasn't sure if you were hearing me.

At this point in time, I guess we are not even interested in amendments because we were not involved in a proper consultation process when it came to this whole area. Of course, if some first nations want to develop in these four areas, that's their option, but why should this become across-the-board legislation?

I also want to point out that we will ensure that this matter comes up at our next national assembly in Edmonton next month. We've had some discussions on this issue at our tables already. Clearly, this suite of legislation is unacceptable to first nations peoples and leaders.

[Translation]

Mr. Yvan Loubier: Grand Chief Swan, Mr. Jules recently appeared before us. He is a member of the first nations, and was part of the group of first nations members who worked on Bill C-19. He told us that, unlike what the minister had previously said—Bill C-19 was formulated by members of the first nations, for the first nations. He said that the bill could be fine-tuned to ensure that any first nation who wanted to opt out of the institutions provided for in the bill could do so without prejudice.

I agree with your statements that negotiations on self-determination must be speeded up, and measures to share wealth and royalties for natural resources must be complied with. I have always been among those who believed we have to move forward, and quickly. This is exactly what the Royal Commission on Aboriginal Peoples, the Erasmus-Dussault Commission, urged us to do.

With Bill C-19 amended as I suggested, and with faster negotiations on self-determination, could we not achieve one small step forward? That is my question.

[English]

Grand Chief Margaret Swan: First of all, I would tend to disagree that this was developed by first nations. Some were involved, but again, there was not enough consultation.

Any system that's imposed is just not going to work; that's the reality. So I can't support any legislation that is imposed. There has not been adequate consultation with our people.

Again, I can't emphasize enough—with treaties as well. How can you consult with a people effectively and efficiently when in fact they haven't had their basic needs met? Housing is a very good example. That's our reality.

The Chair: Merci, Monsieur Loubier.

Monsieur Binet, cinq minutes.

[Translation]

Mr. Gérard Binet: Thank you, Mr. Chairman.

Good afternoon, Grand Chief Swan. Yesterday, we met a number of witnesses who were in favour of this bill. I heard my opposition colleague tell the minister that he had absolutely no involvement in this bill. I asked whether this was true. We can now see that this is really a bill formulated by aboriginals.

I have the impression that you said the bill was formulated by the government. Did you know that this bill had been formulated by aboriginal people?

¼ (1850)

[English]

Grand Chief Margaret Swan: First, I was aware this was developed with some input from some aboriginal people, just as other bills in the suite of legislation have been. That's been a reality. I believe there has been more involvement from B.C.

With respect to B.C., they're in a different situation from other first nations across the country; they don't have the same treaty status that, let's say, the first nations in Manitoba have.

So I'll again say, why would you take this through the legislative process to make it work? There are other ways of doing business and clearly and sincerely involving our people in leadership. In some ways, it's like you put the cart before the horse; you cannot consult with people if you can't even meet their basic needs. You have to do that first and foremost.

Does that answer your question?

[Translation]

Mr. Gérard Binet: In your view, is this due to a lack of consultation, or to a lack of confidence in the government?

[English]

Grand Chief Margaret Swan: Well, I guess those two go hand in hand. When there's lack of consultation, of course, you're going to have lack of confidence in government. When your government is always using a paternalistic approach and imposing whatever it chooses to impose on one's people, then there is lack of confidence. When you look at this suite of legislation, that's been a fact from the get-go.

In fact, to move its agenda forward, the government has, in my opinion, even created two more organizations to effectively divide and conquer our leadership and our people. We used to have one national chief in the country, who we recognized as our prime minister, but when this suite of legislation is being looked at, all of a sudden we now have two national chiefs, according to the Government of Canada. But for first nations, it's clear that we only have one.

So as I said, when you talk about lack confidence in the government, that's a part of it. I suppose the lack of confidence comes from the lack of properly consulting with and working in sincere partnership with our governments.

I hope that changes in February 2004 in a very positive way.

[Translation]

The Chair: Thank you, Mr. Binet.

Mr. Loubier, do you have any other questions?

Mr. Yvan Loubier: No, I do not.

[English]

The Chair: Thank you very much, Grand Chief. We invite you to make closing remarks. You have about 10 minutes—if you want to use them.

Grand Chief Margaret Swan: I will talk to you about the history of Canada for the next five minutes.

I think one of the very important things that is really lacking in this country is proper education when it comes to the history of Canada as it pertains to first nations. Number one, one of the things taught in our public schools is that Christopher Columbus discovered us or this land in the 1400s. Clearly, that's not true; we were here from time immemorial. These were always the lands of our ancestors.

I guess, secondly, we were never a conquered people. The fact is we signed treaty agreements with your ancestors, sir, to live in peace and harmony in this country and to share the wealth of this land and its resources.

I'll also refer to treaty implementation. We are always asking, and have asked now for the last 130 years, for your government to honour our treaty agreements. Treaty 1 was signed in Winnipeg, or at Lower Fort Garry, just outside of Winnipeg, in 1871. I don't understand why this should be a fight. As the descendants of the original landowners, all we are asking for is that your governments honour those treaties and share with us the wealth of these lands we're entitled to—and specifically, as I stated earlier, when it comes to the sale of our natural resources. Out of $700 billion worth, you give $7 billion to our governments, the 630-some first nations across the country. About 80% of that stops within the government's own bureaucracies, like the Department of Indian Affairs and Northern Development.

So we're asking for treaty implementation. If you provided us with the revenue generated from the exportation of those resources, we could adequately meet the basic needs of our people with respect to housing. As well, we could find creative ways of dealing with the damage caused by the government's policies when it comes to the residential school era and the adoption of our children. We can find ways of healing ourselves.

Again, all we're asking for is fairness. Help us to work our way out of the misery that so many of our young people live in. Some of us work hard just to ensure that the next generation is healthier and more empowered than my generation and those before me.

Gitchi-Meegwetch for your time. I thank you for this opportunity. May the Creator guide you in making the right decisions—decisions that are fair and just for all of us.

Thank you.

¼ (1855)

The Chair: We thank you very much, Grand Chief Swan. Thank you.

We now go from Winnipeg to Vancouver.

We welcome from Vancouver the Union of British Columbia Indian Chiefs, whose president is Chief Stewart Phillip.

We have an hour together, so we invite you to make a presentation, and hopefully you will allow some time for questions.

Please proceed.

Chief Stewart Phillip (President, Union of British Columbia Indian Chiefs): Good afternoon, members of the committee, staff, and observers. I have asked to appear before you today in order to correct the testimony given by Herb Satsan George during his appearance before your committee on Monday, June 9, 2003.

Due to the shortness of notice to appear, my presentation will not be too long. I do have two documents to attach to my submission that I would like to appear in the official record. I will be referring to these documents further in my presentation.

First of all, let me introduce myself. I am chief of the Penticton Indian Band, which is a member community of the Okanagan Nation. The Okanagan Nation is comprised of seven communities in total, with a population of approximately 5,000. I'm also president of the Union of B.C. Indian Chiefs, the oldest political organization in British Columbia. Our organization was formed to combat the 1969 white paper on Indian policy and to advance the recognition of our aboriginal title and rights. The UBCIC represents 60 first nations communities. For your information, the vast majority of our membership is not in the B.C. Treaty Commission process and is not represented by the First Nations Summit.

In order to correct the inaccuracies from the testimony of Satsan regarding the Assembly of First Nations' decision-making process on the proposed First Nations Financial and Statistical Management Act, I am providing a copy of a letter I sent to Satsan on March 10, 2003. This letter chronicles the internal AFN process that has led to the rejection of Bill C-19 by the Assembly of First Nations. My letter contains the details, so I will not go into it too much here, except to highlight a few key points.

The AFN fiscal relations committee, which included Herb Satsan George and Manny Jules as its co-chairs, had three conditions to fulfill as a result of the AFN Halifax annual general assembly decision regarding what is now before us as Bill C-19. Based upon mandates given to the AFN fiscal relations committee by chiefs in assembly dating back to 1996, any proposed legislation had to be judged by guiding principles and conditions set out in those resolutions. Bill C-19 fails to meet the conditions set out in various AFN resolutions, including the AFN Halifax resolution.

A special AFN assembly was convened in Ottawa in November of 2002 for the chiefs in assembly to take a decision on the First Nations Financial and Statistical Management Act. The AFN special assembly rejected the contents of what is now Bill C-19 in its entirety. At a subsequent AFN confederacy meeting held in April 2003, a resolution was duly adopted removing both Herb Satsan George and Manny Jules as the co-chairs of the AFN fiscal relations committee. As far as I am concerned, both Satsan and Manny Jules are acting on their own, without any national mandate from the Assembly of First Nations.

Last Monday, Satsan testified before this committee that Bill C-19 is supported by the First Nations Summit, the Union of Ontario Indians, the Atlantic Policy Congress, and those first nations with property tax bylaws. He was playing the numbers game about the level of support for Bill C-19 among first nations. The fact of the matter is that it is a minority of first nations across the country that support Bill C-19, not the majority, as some would have you believe. I know there are chiefs with taxation bylaws that do not support this bill. I know there were chiefs from the Union of Ontario Indians and the Atlantic Policy Congress that voted against the contents of Bill C-19.

½ (1900)

I recommend that instead of rushing through with this bill, proper hearings should be held across the country so that a true reflection of first nations opinions are heard from, not just from those individuals with a vested interest in the four institutions that are the subject of Bill C-19.

Another point we wish to make is that we do not accept the myth that Bill C-19 is separate from Bill C-7, the First Nations Governance Act, or Bill C-6, the Specific Claims Resolution Act. By Minister Nault's own admission, these three bills constitute a suite of legislation. In fact, on this point I refer you to a June 1 statement by Mr. David Nahwegahbow, a former co-chair of the Aboriginal Peoples' Commission of the Liberal Party of Canada regarding Jean Chrétien's legacy of betrayal and broken promises.

Mr. Nahwegahbow, who is a lawyer, states, and I quote:

Every piece of policy and legislation (Jean Chrétien) has brought forward regarding the first nations people, the federal government policy, FNGA, the Specific Claims Resolution Act and the First Nations Fiscal and Statistical Management Act has been a violation of promises (Jean Chrétien) made to first nations during the 1993 election.

For the record, and to refresh your memory, I'm providing the committee members with a copy of Mr. Nahwegahbow's June 1, 2003 statement and the 1993 Liberal aboriginal platform.

As for the contents of Bill C-19, it is our submission that legislation, especially national legislation, is not necessary for these four institutions to function. The Indian Taxation Advisory Board and the other boards are already in existence and operating, as far as we know. Any legislation should not be national but should have a schedule listing those first nation communities that want to alter their relationship with the Crown based upon such legislation.

As Ontario Vice-Chief Charles Fox stated in his testimony before this committee, and I quote:

The bill has nothing to do with the real first nation agenda. Federal transfers have to be increased and the resources of the traditional territory have to be shared. The tax and borrow religion of the bill misses the mark completely. It lets the federal government off the hook and will only serve to deepen the problems of first nations in the long run.

I urge the committee to reject the bill in its entirety. Window dressing amendments, such as non-derogation clauses, are beside the point. I urge the minority of first nations that support the bill to go back to the drawing board and develop local models. It is against first nation law to impose this model on the unwilling majority of first nations.

We agree with the position of the Chiefs of Ontario, as expressed by Vice-Chief Fox.

In closing, let me say that the Union of B.C. Indian Chiefs stands behind the AFN position to reject in its entirety Bill C-19, and we are putting your government on notice that, if passed, we will challenge the suite of legislation, including Bill C-19.

I will close by thanking the committee for the opportunity to express our views on this matter on such short notice and will now entertain any questions you may have.

½ (1905)

The Chair: Thank you very much, Chief, and we thank you for accepting on short notice. We understand how difficult it is.

We can start with a 10-minute round.

Dix minutes, Monsieur Loubier.

[Translation]

Mr. Yvan Loubier: Good afternoon, Chief Sanderson. We had the opportunity to meet recently in Kenora, and it was a very interesting encounter.

I would like to ask you a question on Bill C-19, because positions on Bill C-7 are very clear. When we fought our battle against Bill C-7, a battle that has not yet ended—it was clear that the bill was infringing on the fundamental rights of aboriginal peoples, and keeping the first nations in a state of infantilization. The bill was—and still is—highly prescriptive. We hope that one day it ends up on a high and dusty shelf, exactly where it belongs.

Bill C-19 provides for institutions, on which a number of first nations members have already worked. For several days now, we have been hearing testimony from some of your members who worked on Bill C-19, and who defend it with great enthusiasm. Of course, you are opposing C-19 with great enthusiasm, but I am wondering whether there could not be some way—I have just put the same question to Grand Chief Swan of Manitoba—to improve the bill, so that the first nations who want to use the institutions can—that is, those who are in a position to use them because they have achieved a structure and a tax base. Is there not some way we can improve the bill?

We could of course get rid of section 83, and replace it with an opt-in, opt-out clause. When taxation laws and measures are imposed, there has to be a point of reference. Bill C-19 would be that point of reference. Is there some way we could take out the bias with one or two amendments that you would find satisfactory, and that would enable you to support the bill?

½ (1910)

[English]

Chief Stewart Phillip: The short answer is no. However, I will take this opportunity to say that I recognize and respect that a tremendous amount of hard work has gone into the formulation of these bills and a tremendous amount of work has been done by both Herb George and Manny Jules to bring this legislation forward.

I also respect the 90 communities out of 633 native communities that have an interest in this legislation. There's no question that their taxation bylaws and their taxation regimes provide those opportunities to take advantage of such legislation.

The Union of B.C. Indian Chiefs does not take issue with that. What we do take issue with is that this legislation should have been framed in a similar way to the First Nations Land Management Act, since that legislation applies specifically and precisely to those first nations that may avail themselves of those opportunities under that legislation. We suggest the same framework should be used for the fiscal legislation so that those communities that do have taxation bylaws and can utilize this legislative initiative to advance the socio-economic interests in their communities should have that opportunity to do so. But it should not involve the balance of first nations in Canada, that number in the neighbourhood of 550.

[Translation]

Mr. Yvan Loubier: Chief Sanderson, if we could prove to you that, with several amendments to Bill C-19, we could get the exact results you want— that is, that the 140 communities who wish to opt in would not be penalized, and the others, the more numerous communities who wish to opt out would also not be penalized—would you feel you could support it? The bill would then be genuinely optional. A community that passed a tax law would not be automatically subject to the bill, since section 83 of the Indian Act would be repealed. If we could prove that to you, would you change your mind and be a little more enthusiastic about Bill C-19?

[English]

Chief Stewart Phillip: First, with the greatest respect, Mr. Loubier, it's Chief Phillip, not Chief Sanderson.

Secondly, again, the short answer is no. We believe this legislation has to be repackaged and reframed to be specific to those first nations that have the fiscal infrastructure in place to take advantage of this proposed legislation.

[Translation]

Mr. Yvan Loubier: I apologize, Mr. Phillip. I was thinking the name Phillip, but I said another name. I thank you for your answers.

[English]

The Chair: Ms. Neville.

Ms. Anita Neville (Winnipeg South Centre, Lib.): Thank you, Chief Phillip. I appreciate your presenting before us on such short notice.

I was advised that the Union of B.C. Chiefs, when it was formed in 1969, had as one of its founding principles the support of the formation of institutions to help first nations in government. You're opposing this legislation, and I'm wondering if this is not contrary to one of the founding principles.

Chief Stewart Phillip: No. Again, with the greatest respect, we don't see it that way. The Union of British Columbia Indian Chiefs, like many provincial-territorial organizations, basically came into existence overnight in the aftermath of the announcement of the white paper policy in 1969.

The organization has dedicated the last 30-some years to protecting and defending the rights of our first nations people. We also, of course, seek to achieve a just resolution of the outstanding land question in British Columbia. We take the view that any legislative initiatives and so on must meet the standard of recognizing our constitutionally enshrined and judicially upheld rights, must come from us and must be widely supported.

In this case, although this particular piece of legislation is vigorously and energetically supported by those communities that have taxation bylaws in place, the vast majority of our first nations communities across this land are nowhere near enjoying the circumstances where they have a taxation base.

The vast majority of our communities are remote and do not have the opportunities available to some of the communities that are more urban based or enjoy a close proximity to larger centres and are therefore attractive to locate businesses on, and so forth.

½ (1915)

Ms. Anita Neville: Perhaps I could follow up on that. I've not visited your community, but I am familiar with the area. I understand that you've had your own challenges financially. I've also been advised that the City of Penticton collects millions of dollars from your own community. Would it not be advantageous to you and your residents if you had the opportunity to collect this revenue?

Chief Stewart Phillip: I must say that this has been a topic of discussion in our community for many years. Certainly, our current council and previous councils have been aware of this fact--certainly since the Kamloops amendment--and have discussed and debated this issue and have taken the view that they do not want to involve themselves in a taxation bylaw regime at this point in time.

There are many concerns we have around that issue. One of them was recently manifested in the debate and the dispute that erupted within our neighbouring first nations community, namely the Westbank First Nation, where there was opposition to their local self-government referendum.

There are approximately 8,000 non-native residents residing on that first nations community land base. They were seeking an injunction to stop that particular self-government agreement before, based on discriminatory charges that those who do not pay tax are allowed to vote on such measures whereas the 8,000 people who do pay tax are not allowed to vote. The fear that many first nations communities have is that at some point in time this will find itself before the Supreme Court. It will be a charter issue in argument. The outcome will be that non-native residents residing on first nations community lands will in fact be afforded the privilege of voting and holding public office.

Therefore, there are a number of reasons that some first nations communities will not enter into taxation bylaw arrangements.

Ms. Anita Neville: Would that be true for your community, the reason you have articulated?

Chief Stewart Phillip: Although the proximity between our first nations community and our neighbours is geographically quite a short distance, the economic circumstances and the land are completely different. We have what appears to be a large land holding, but 97% of it is straight up and straight down. It's mountainous, and the lands that have some potential for development, unfortunately, are laced with rights of way, transmission lines, abandoned rail lines—nonetheless, the right of way is still a matter of dispute—airports, river channels, highways, and what not.

It goes back to that fundamental issue: do you have those opportunities available or do you not? What we're saying is the vast majority of first nations communities do not have those kinds of taxation opportunities available, and I suggest if they did, there would be more than 90 communities that are involved in taxation bylaws.

The vast majority of first nations communities are very remote and isolated. That's why you're hearing in a number of representations and presentations that we seek accommodation of our aboriginal title interests and an equitable share of the resources located within our traditional territories. To us that's the answer to the appalling socio-economic conditions in our communities.

½ (1920)

Ms. Anita Neville: Thank you very much, Chief.

The Chair: Thank you, Ms. Neville.

Is there anyone else?

Therefore, Chief Phillip, we invite you to make closing comments. You can take all the time you want.

Chief Stewart Phillip: Once again, I would like to thank the committee for entertaining our presentation.

I want the committee to be left with the impression that we understand and respect the tremendous amount of work that has been accomplished by those first nations communities that do have taxation bylaws and are availing themselves of those opportunities and have shown some remarkable results. We understand their energetic and enthusiastic support for this particular piece of legislation.

What we're saying very clearly is they should be afforded the opportunity to have this legislation in a form that meets their needs, but it should not be national in scope. It should be within the same style of framework as the First Nations Land Management Act. That's the message, hopefully, that we're bringing forward.

My closing thought is that the reconciliation between the Government of Canada and provincial governments and first nations people is no easy accomplishment. It's going to take time. It's going to take genuine consultation. It's going to take a genuine and real partnership. To date that hasn't happened, unfortunately. We've been sideswiped by political expediency and this notion of a legacy on the part of our current Prime Minister.

I'm optimistic that this climate and conditions will change in the near future, not only on the government side but also on our side. I think that new dynamic will bring about opportunities for the kind of consultation we require to be able to jointly develop legislation that will in fact be enduring and accomplish the objectives we're setting out to accomplish. With that, I thank you for your time.

The Chair: Chief Phillip, we thank you very much.

Now, from Vancouver we go back to Parliament Hill, with the Aboriginal Peoples Council of Toronto. We are pleased and honoured to receive their chair, Roger Obonsawin.

We welcome you, Mr. Obonsawin. You know the routine. We have half an hour together. We ask you to make a presentation, and hopefully you will allow time for some questions. You may proceed whenever you're ready.

Mr. Roger Obonsawin (Chair, Aboriginal Peoples Council of Toronto): I'll take a bit of water first.

[Witness speaks in his native language]

Good evening. I want to first of all thank the committee for allowing me to make a presentation this evening. It is short notice, and it will be a short presentation, but I appreciate the opportunity.

I'd like to start by asking a very simple question. What would have happened if instead of signing treaties with Europeans coming to this land, indigenous nations had passed a white settlers act to dictate the relationship between our nations and immigrants? How would that have been received? Inevitably, the results would have been armed conflict.

While there were some conflicts, the Royal Proclamation of 1763 established a peaceful process called treaties to define how lands and resources would be shared. Where there were to be inequities in economic opportunities for aboriginal peoples, an annuity system was established.

There were no agreements with our people to pass legislation—namely the Indian Act—to control and govern our lives. While treaties should have been the starting point, the Indian Act was implemented. This was never discussed with our ancestors, and most of our people were not even aware of its coming into existence.

I contend that the legislation now being proposed by Minister Nault, including Bill C-19, is just the last series of unilateral, almost dictatorial actions to continue to exercise federal control over our lives and push our people into a corner in order to allow the federal government to get out of its obligations to first nations peoples.

Will this legislation help us get out of poverty? No. Will it help us gain more control over our economies? No. Will this legislation allow us to gain control over our lands and resources in order to increase our revenues? No.

What then will this bill do? Bill C-19 will push us closer to municipal status, particularly in relation to taxation. The bill will undo our tax exemption and lead to expansion of taxes in areas other than property. It will therefore diminish our governance and lead to municipalization of reserves.

In addition, property taxation restricted to reserve lands could lead to court rulings against first nations claims related to off-reserve territory, since the newly minted property taxation system does not include these lands. The courts would very likely rule that by only applying taxes on reserves, first nations have relinquished their claims on off-reserve territory.

This is further aggravated by the fact that the new taxation system is now based on residency rather than citizenship, so that non-natives with businesses on reserve are taxed. We're taxing citizens other than our citizens, and the reverse can happen.

As municipalities are well aware, property taxes are the most restrictive form of taxation and a very limited way of raising revenues for governance and infrastructure development. They're in Ottawa all the time complaining about that. What's going to be different with our property taxes?

Let us look at the net financial gains to first nations through property taxation. Since 1987, a period of fifteen years, approximately $200 million has been collected on first nations properties. Last year the amount was approximately $1.6 million.

½ (1925)

In comparison, if we look at lost revenues to first nations because of the failure to index annuity payments, we find that those annuity payments alone would total $300 million in one year. These funds could have been used for infrastructure development, for governance, and for economic development.

With a new tax base, Canada will most likely reduce transfer payments for infrastructure development, thereby getting out of its fiduciary obligations, without developing alternative ways of generating revenues.

It is my understanding that Dr. Fed Lazar of the Schulich School of Business has already outlined the revenue-generating limitations of the legislation. I will therefore not belabour the point.

My contention is that Canada, through this legislation, is saying it will not honour the commitments made through the treaties and will extricate itself from future obligations without developing viable alternatives.

All the things the minister says will be accomplished by Bill C-19 can be accomplished without controlling federal legislation. Why do first nations need federal legislation to develop their own financial institutions?

In my early years, which was quite a few years ago—and Mr. Bonin probably remembers this—I lived in a predominantly French-speaking section of Sudbury, the Flour Mill. My father was involved in the establishment of the caisse populaire. I was so proud in my first year of school when he started giving me an allowance and paid five dollars for my share in the caisse populaire. That was my bank. I was only six years old, but that was my bank: I had a share in the bank! Yes, there is federal legislation to regulate banks, but the French did not need special legislation based on race to establish or control their own financial institutions.

I caution the government against the imposition of this bill, because it will inevitably lead to the imposition of a non-optional chartered lands management regime where fee simple lands will be used for collateral. A similar system established on first nations lands in the United States in the 1950s and 1960s led to the loss of millions of acres of those lands to non-native interests. That legislation was withdrawn in 1970.

Bill C-19 will not result in the generation of sufficient resources to help first nations get out of poverty. Why, therefore, is so much money being invested in the development of this legislation for trivial financial benefits?

I cannot agree with the principles of Bill C-19. Should this committee propose any amendments to the bill, then you're only putting lipstick on a pig. No matter how you try to embellish the package, it is still a pig underneath.

I can only conclude that the real reason Bill C-19 and other legislation is being passed is to allow Canada to get out of its obligations under the treaties and the Royal Proclamation of 1763.

Let's get back to the treaties. Let's get back to resource-sharing, to look into how we can truly share in those resources, not tax the poorest people without the revenues to support their governance, as provincial governments have. It will only aggravate the situation more, but more importantly, it will inevitably hurt the relationships between Canada and first nations for many, many years.

Thank you very much.

½ (1930)

The Chair: Thank you very much, Mr. Obonsawin.

We can have five minutes or even go to seven-minute rounds. Who will go first?

Mr. Dromisky.

Mr. Stan Dromisky (Thunder Bay—Atikokan, Lib.): Thank you very much, Mr. Chairman.

I'm interested in the rationale you and a couple of others have given regarding the rejection of this bill. About the concept that was being presented—for instance, “Ottawa wants to get us off their back”; “Ottawa wants to get rid of its financial obligations to the native communities, eventually getting to the point where they don't have to give us a cent”—I don't know. Do you know of any community in Canada that has a taxation system right now that does not receive any money, directly or indirectly, from Ottawa? There is no such thing in Canada—none.

I don't care whether it's Toronto, Vancouver, Edmonton, Lethbridge, Saskatoon, Thunder Bay—it doesn't matter: moneys keep coming constantly, for all kinds of reasons, whether it be through pension plans, whether it be through all kinds of other tax benefits, whether it's through income tax plans, social security plans, whether it's through infrastructure projects for new sewers or a new arena or hospitals and everything else. There's a steady, steady flow of moneys from Ottawa directly, and indirectly through provincial governments as we give transfer grants. There is always money flowing.

So why is this concept being presented to the native population, that the reason this bill is being and should be rejected is because Ottawa wants the native people to get into a position where Ottawa will no longer have to give any money whatsoever to the native communities? Why?

Mr. Roger Obonsawin: First of all, Ottawa does have a responsibility for transfer payments and for equalization payments and, yes, for certain services. That's not the issue.

The issue is that in order to operate a governance structure and to develop economically, the Natural Resources Transfer Act transferred those resources and control of those resources to the provinces. Those were, in many cases, our resources. Why aren't those funds—our fair share of those resources—flowing to the native communities? That gives you your base for your governance. That's how the provinces were able to establish their governance, and following that they established taxation; otherwise, people would have been taxed inordinately.

That is the issue. And that's the issue that needs to be discussed, not looking at how we can get into a system before we even start looking at how those revenues are going to be shared. That can give the base for true governance and it can give the base for economic development. From there, then you look at what the sharing arrangements are, whether it's transfer—

½ (1935)

Mr. Stan Dromisky: That's not answering the question. Why are you people saying we are going to cut off funds—“We hope you get to the point that you have raised enough money on your own property, and we're going to cut off all funds from Ottawa”?

Mr. Roger Obonsawin: Because it's already starting to happen. In education and health there are cutbacks, and in the non-insured health benefits.

Mr. Stan Dromisky: Well, there are cutbacks everywhere, all over the country. Every community suffered cutbacks. Every human being in this country had to take some kind of blow. Some cut was made for every single human being and every corporation and every company and every institution and every association—everything that was receiving money from Ottawa. Do you know what I mean?

Mr. Roger Obonsawin: Yes, I understand very well what you mean.

Mr. Stan Dromisky: The Department of Indian and Northern Affairs is the only department in Ottawa that had an increase in its budget every single year.

The Chair: Mr. Dromisky, we'll give our guest an opportunity to respond.

Mr. Stan Dromisky: Yes, I'm sorry.

Mr. Roger Obonsawin: Well, in addition, our population is increasing at a higher rate than the general population. It is a population that's in poverty; the standard of living is nowhere near that of the national population, and then we're expected to add to that. Also, there were treaty obligations, including for health and education. So those are our understandings or our perspective.

Instead of looking at how to reinforce those obligations, we start looking at how to tax yourselves so we can pick them up.

Quite frankly, there is no trust between the Department of Indian Affairs and Northern Development and our communities. That trust was lost a long time ago, which has been stated over and over again.

I will refuse.... Personally, I never accept moneys from Indian and Northern Affairs Canada. That makes me free; I don't have to worry about them cutting off my funds. That makes me free.

But our communities don't have that luxury. There have been recommendations to take negotiations for any of these issues outside of the department and to set up a separate minister of state to start real negotiations, because it has been a history of control and misuse in the way the funds are allocated. Often those funds are obligations under the treaties; that's the problem.

We have to break away from that. It has been recommended by the royal commission and the Penner report, but we're still not breaking from that. As I said before, how can you negotiate with your jailor the conditions of your release, your freedom? It's not possible. You set up a system to do that, one that is separate from withholding funds and saying, “Unless you negotiate the way I want you to negotiate, we're going to withdraw those funds”. It doesn't work.

Mr. Stan Dromisky: I think you answered my question beautifully and hit the nail on the head when you referred to the absence of trust.

The Chair: Thank you, Mr. Dromisky.

Monsieur Loubier, sept minutes.

[Translation]

Mr. Yvan Loubier: Mr. Obonsawin, I will ask you the same question I have asked others. I am trying to see how we can improve this bill instead of setting it aside and starting all over again.

In your view, is there any way we could improve this bill? If the bill became genuinely optional, if section 83 of the Indian Act were repealed and the first nations were not mandatorily subject to Bill C-19 each time they passed laws, either property laws or tax laws, would you be prepared to support the bill? Is there no way we could improve these measures in the bill?

Bill C-7 was a different matter. I am still convinced there is no way of improving that bill in any way. But do you not feel there is something we could do to improve C-19?

½ (1940)

Mr. Roger Obonsawin: Chief Phillip said that there should be an opt-in clause for people who wanted to use Bill C-19.

I am skeptical about it. It started with the Chartered Lands Act. That was supposed to be optional as well. When the bands are out of money, it remains the only choice they have. They do not choose that option because they want it, but because they are forced into it.

The department is not honourable in this respect. I will repeat what I have said in English, because it is difficult to translate.

[English]

You can't make any amendments, as they will just be putting lipstick on a pig. It's still the same package and you can't beautify it.

[Translation]

The principles in the bill are not acceptable.

Mr. Yvan Loubier: Thank you.

[English]

The Chair: Mr. Hubbard.

Mr. Charles Hubbard: Thanks, Mr. Chair.

I'm just not seeing how all of this fits together.

Mr. Obonsawin, according to this, you're from the Aboriginal Peoples Council of Toronto. Do you live on reserve or off reserve?

Mr. Roger Obonsawin: Both. I have a business in Six Nations and also in Toronto, and I work with a lot of first nation reserve communities.

My reserve is in Quebec. I am Abenaki.

Mr. Charles Hubbard: As a successful businessman, you have created wealth. We have representatives here from a number of first nations on reserve who want to create wealth for their communities. Why would you, as a successful businessman, giving your location as the city of Toronto, dealing with aboriginal peoples apparently off reserve, want to deny them Bill C-19, which would establish institutes by which they could generate wealth to improve things for people living on reserve?

I'm a bit perplexed on this. This thing about lipstick on a pig, that was a comment that didn't fit very well with me in terms of your interpretation of the legislation.

The Chair: I will interject, because in the presentation of Mr. Obonsawin, I didn't sense that the intent was to deny it to others. He did say there was no trust. He gave a lot of other reasons why he could not support it.

I have to make that clear for the record. In all fairness, I did not sense that the intent was to deny it to others.

Mr. Charles Hubbard: Maybe he could explain his position.

Mr. Roger Obonsawin: About the lipstick on a pig, economists use that all the time. That's how you package--

Mr. Charles Hubbard: I've never heard of that.

Mr. Roger Obonsawin: My work since 1969 has been both on and off reserve. The thrust of my company is economic development for aboriginal people through taxation. Most of the money I'm making I'm spending fighting the federal government in courts on these issues. Fortunately, I'm still able to have a decent income from that. Much of that additional income goes back to our employees.

We have over 1,000 employees across Canada. Many of them live on reserve; others live off reserve. There is a growing off-reserve population who feel they still have links to the reserve communities, as Corbiere defines. So there is an obligation.

Many of our people who are in some cases working in an urban area and getting tax-free benefits send some of that money back to their reserve. They have an obligation—in a way, an expectation on their part. If you go off the reserve and you are doing well, you are expected to provide back home. One of my employees, for instance, helped her mother buy a home on the reserve. That is an expectation.

So it's hard to distinguish between on and off reserve. Aboriginal economies are not economies based on whether it's in Toronto or in Six Nations; it's an economy of nations.

In Toronto, we have the largest accumulation of aboriginal nations of any other city in Canada, and many of them still have links to their reserve communities. So I'm not comfortable in making the distinction here.

What I have found in my experience is, as a company, I've been able to do more economic development in communities than the millions of dollars that are being spent in the handouts and in payments, because there are no strings attached. I've been very successful. So that is the principle I start from.

½ (1945)

The Chair: Ms. Karetak-Lindell, you have five minutes.

Ms. Nancy Karetak-Lindell (Nunavut, Lib.): I have one short question.

In the testimony from some supporters of the legislation, they talked about how they could take their contribution from INAC and leverage it and increase it to do more things for their community. They felt that this legislation was one of the only ways they could do that, because most small bands cannot go to the bank and get that kind of credit.

When I heard that, I felt that this legislation, because most people for it said it was optional, was at least a step for some communities to start working on their own, and as with other legislation, we have tried to state that these are not taking the place of any self-government negotiations. These are interim steps to help communities get on the road to doing more for their own.

Mr. Roger Obonsawin: I'm not criticizing those communities that decide to go with Bill C-19 because they feel it's their only option. All I'm saying is there are other options available for true economic development. Taxation is not the option. In fact, it works against economic development.

So let's even the playing field, and then maybe we'll talk about taxation. Until then, I'm really not comfortable in getting into taxation systems, because you're ending up taxing the poorest, and I'm not prepared to do that.

Ms. Nancy Karetak-Lindell: In that leveraging, I didn't think it was direct taxing of their residents. I thought they were taking that as an investment and getting a bank to use that as collateral, not direct taxing per se of each individual person on the reserve, out of their paycheque or whatever method you would use.

Mr. Roger Obonsawin: I talked to many native people both on and off reserve, and I haven't found one who believes it will stop with property taxation of non-natives. The precedents are set, the structures are in place, and if you're lacking revenues, that will have to start in any case, especially if there are limitations to what the federal government or other governments can put in. So in that respect, it's a real bind to be in.

All I'm saying is this is not the way to go at this time. It may be in the future. But you're setting precedents in that you're taxing other citizens. It's based on residency, not on citizenship.

If you're a nation...if I work in Canada and I go to France for three months and work in France, and then I go to another country and work for three months, taxation comes back to Canada. It's based on citizenship, not residency.

By setting up a residence-based taxation system on a reserve, the die is cast. Of course, we'll say, now you have territory off reserve; how do you generate revenues for those companies that are off reserve? No, you don't have the jurisdiction to do that, because you can't tax.

So it's not as simple as it seems, and it's a precedent that's very dangerous to get into.

½ (1950)

The Chair: Thank you very much, Ms. Karetak-Lindell.

Mr. Obonsawin, before I ask you to make closing comments.... I think both our fathers worked together to establish caisses populaires in Sudbury. I think you still keep contact with Sudbury, so you are probably aware there are 12 caisses populaires Desjardins in Sudbury.

Even not speaking of Bill C-7 or Bill C-19, I say that francophones in northern Ontario exist today because of those institutions. So without getting into the debate about these institutions, I always encourage and appreciate seeing first nations establishing institutions, because that's how they develop the volunteers like your dad and my dad, who taught you a lot and taught me a lot, and maybe that's why we are where we are today. But it's because of those institutions, so I always encourage that. Without those institutions, how can we survive?

It's nice to see you, and I invite you now to make closing comments.

Mr. Roger Obonsawin: Just to leave my comments on that, the difference I see, because of the years of the Department of Indian Affairs doing everything for native people, is that there is still a hesitation to take a risk.

If you get into economic development, it's inevitable. The more you put structures in place for people, the less they feel there's a risk. At some point you have to go on your own and start setting up your own structures and take those risks. You're going to learn from your failures, and you'll benefit from the results.

To me, yes, this has been developed with a very sincere group of people who are trying to do that, but it's still hedging your bets by relying on the federal government and its legislation and structures. We could do much better on our own. It would give us much more pride and dignity to do that.

Thank you very much.

The Chair: We thank you very much. We really appreciate your participation, especially on short notice.

Now we are moving on to Winnipeg, with the Manitoba Keewatinowi Okimakanak Inc. If I mispronounced that, we may end up somewhere else in Canada.

We'll take a break for a few minutes until that is set up.

½ (1954)

¾ (2002)

The Chair: We're returning to Bill C-19, and we are joined, from Winnipeg, by the Manitoba Keewatinowi Okimakanak Inc.

Grand Chief Francis Flett, is that you I see on the screen?

Grand Chief Francis Flett (Manitoba Keewatinowi Okimakanak Inc.): That's me.

The Chair: Accompanying the grand chief is Michael Anderson, research director.

We have half an hour together. We invite you to make your presentation, and hopefully you will allow some time for questions from members.

Please proceed as soon as you are ready.

Grand Chief Francis Flett: Okay, I'll get right into it, since we have only half an hour. I think everybody has a copy of our submission there.

The Chair: We didn't receive your submission, no.

A voice: It was faxed to the clerk some time ago--within the hour, certainly, given the manner in which we've assembled this.

The Chair: If it was within the hour, the clerk was not at her office; she's here. So we'll listen to your submission and I'm sure tomorrow morning we'll get a copy of it.

Grand Chief Francis Flett: We will go ahead.

I am the grand chief of the 30 first nations we represent at the Manitoba Keewatinowi Okimakanak Inc. We'll get right into our presentation.

Prior to the tabling of Bill C-19 on December 2, 2002, the Minister of Indian and Northern Development, the first nations of Canada, and the Government of Canada expressed an interest in establishing a new fiscal relationship between first nation governments and the Government of Canada based on the principles of flexibility, fairness, choice, certainty of government service delivery comparable to other jurisdictions, economic initiatives, and efficiency.

The new relationship should reflect equitable sharing of the revenues derived from treaty lands and natural resources as well as those lands and resources to which unresolved aboriginal title applies.

First nations have also indicated that any new fiscal relationship must be in keeping with the constitutional and legal framework, including the establishment of the Supreme Court of Canada with respect to treaty interpretation, aboriginal rights, and aboriginal title.

First nations and Canada previously agreed, as recommended in the 1983 report of the House of Commons Special Committee on Self-Government and the final report of the 1996 Royal Commission on Aboriginal Peoples, that new fiscal relations be jointly derived through the mutual consent of first nations and Canada.

Manitoba Keewatinowi Okimakanak Inc. continues to be supportive of the objective of establishing new fiscal relationships between first nation governments and the Government of Canada. It is with regret that MKO must advise this committee that the mechanism proposed under Bill C-19 does not reflect the principles of flexibility, fairness, choice, certainty, economic initiatives, and efficiency. It does not reflect an equitable sharing of revenues derived from lands and resources, and it does not reflect the constitutional and legal framework.

MKO represents 60,000 treaty first nations who are members of our 30 northernmost Manitoba first nations. The combined traditional territory of Manitoba Keewatinowi Okimakanak first nations is over almost three-quarters of the lands and waters of the province of Manitoba.

The MKO first nations entered into treaties described and known as Treaty 4, 1874, the Qu'appelle Treaty; Treaty 5, 1875, 1910, the Winnipeg Treaty; Treaty 6, 1876, the treaties at Forts Carlton and Pitt; and Treaty 10, 1906 to 1908.

Today, the MKO organization is represented by a depiction of the treaty medal provided by Her Majesty and treaty commissioners as a symbol of the sacred relationship that persists between our nations and Her Majesty. The treaty medal clearly depicts a treaty commissioner entering into first nations land as a guest to negotiate and enter into treaties, to meet and make an agreement with the leadership of the government within the homelands of first nations.

¾ (2005)

The treaty medal represents our joint commitment to nation building and objectives of sharing peace and goodwill, a relationship founded on principles of mutual faith, recognition, honour, and respect.

I will turn this over to Mike, because I'm really having a hard time seeing what's written here. My vision is kind of blurred.

I will turn it over to Mike to finish the rest of this.

¾ (2010)

Mr. Michael Anderson (Research Director, Manitoba Keewatinowi Okimakanak Inc.): Thank you, Grand Chief.

Mr. Chair, members of the committee, although you can see us brightly, it is actually quite dim in this room. We'll try to proceed as best we can.

To summarize some of the remaining parts of the submission, it's been noted that the treaties contain within them references to fiscal relations even in their original form. Of course, in the numbered treaties in Manitoba, one of the primary forms of fiscal relations appears clearly as the livelihood rights appearing in harvesting rights--hunting, fishing, and trapping. It's interesting that in the 1999 Marshall decision, the Supreme Court of Canada commented on fiscal relations in the context that would have been understood at the time of the original treaties. They said:

The trade clause would not have advanced British objectives (peaceful relations with a self-sufficient Mi'kmaq people) or Mi'kmaq objectives (access to the European “necessaries” on which they had come to rely) unless the Mi'kmaq were assured at the same time of continuing access, implicitly or explicitly, to a harvest of wildlife to trade.

...If the law is prepared to supply the deficiencies of written contracts prepared by sophisticated parties and their legal advisors in order to produce a sensible result that accords with the intent of both parties, though unexpressed, the law cannot ask less of the honour and dignity of the Crown in its dealings with First Nations.... The trade arrangement must be interpreted in a manner which gives meaning and substance to the oral promises made by the Crown during the treaty negotiations. The promise of access to “necessaries” through trade in wildlife was the key point, and where a right has been granted, there must be more than a mere disappearance of the mechanism created to facilitate the exercise of the right to warrant the conclusion that the right itself is spent or extinguished.

Similar to the language that appears in the Marshall decision, recommendation 2.3.19 of the Royal Commission on Aboriginal Peoples states:

Financial arrangements provide greater fiscal autonomy—

[Technical difficulty--Editor]

The Chair: Can you hear us in Winnipeg?

¾ (2015)

Mr. Michael Anderson: Oh, yes.

The Chair: Good.

I don't know if you were aware at what point we were disconnected, but....

Mr. Michael Anderson: I heard a beep. Had I completed the—

The Chair: At the beep. Would you start over from there, please?

Mr. Michael Anderson: Had you heard my comments on the royal commission's recommendation?

The Chair: Yes, we did.

Mr. Michael Anderson: I think it was about halfway through. I'll start there again.

So I've reviewed what the Supreme Court had to say about Marshall, about the obvious intent of the treaty and financial relations between the Crown and first nations treaty signatories. I pointed out that recommendation 2.3.19 of the Royal Commission on Aboriginal Peoples states:

Financial arrangements provide greater fiscal autonomy for Aboriginal governments by increasing access to independent own-source revenues through a fair and just redistribution of lands and resources for Aboriginal peoples, and through the recognition of the right of Aboriginal governments to develop their own systems of taxation.

The treaties in Manitoba reflect the solemn commitment and faith of first nations to jointly enter into nation-building with Her Majesty's government for as long as the sun shines, the grass grows, and the rivers flow. This commitment incorporates the obligation to renew, develop, and evolve our nation-to-nation relationship as time goes by. Our joint commitment to nation-building is not frozen at one moment in history. It must be understood in its contemporary form as events take place and as our respective nations grow.

Establishing new fiscal relationships that are based on the principles of flexibility, fairness, choice, certainty, economic incentives, and efficiency, and which provide for an equitable sharing of land and resource revenues and which are in keeping with the legal framework in respect of treaty interpretation, aboriginal rights, and aboriginal title is consistent with the terms of treaty and the promises of the treaty commissioners.

Establishing new fiscal relationships through mutual consent is also consistent with upholding the honour and the fiduciary duty of the Crown. It is possible for such arrangements to express our enduring treaty relationship in a contemporary form while reflecting changing events and the evolving needs of our respective nations.

A 1999 memorandum of understanding between the Assembly of First Nations and Canada—and, of course, as the committee may well know, its several departments of the federal government—to examine possible new fiscal relationships and arrangements through a joint process included a national table on fiscal relations.

The Assembly of First Nations provided its support for efforts directed at the development of new fiscal relations though its Resolution 5/96 and Resolution 49/98. That provided a continuing mandate for the assembly supported by the Manitoba Keewatinowi Okimakanak first nations to work on a contemporary reflection of these fiscal relations that in their root are contained within the promises made in treaty.

However, in November 2002, after the draft proposal for the original legislation was presented as a consultation draft, the AFN chiefs in assembly rejected, by Resolution 30/2002, the proposition that the consultation draft of the potential federal legislation establishing four institutions through what was described then as a fiscal and statistical management act should be generally applicable to all first nations in Canada. Also, at the same time, the AFN chiefs in assembly endorsed Resolution 31/2002 providing that the AFN chiefs in assembly, pursuant to the principles of autonomy and diversity in the Assembly of First Nations charter, respect the right of these and other first nations to make their own local and regional agreements, but not in the context of national legislation.

Of course, MKO first nations leadership participated in these discussions and in the resolutions that arose from the special assembly last November to consider this bill.

Despite the concerns of the Assembly of First Nations, of course, the minister tabled the bill, as described by the grand chief, on December 2, 2002, to create the First Nations Finance Authority, the First Nations Tax Commission, the First Nations Financial Management Board, and the First Nations Statistical Institute.

MKO supports recognition of the autonomy of each first nation to determine whether the provisions of the proposed First Nations Fiscal and Statistical Management Act are applicable to the circumstances of that first nation. But MKO will not support any federal legislation that seeks to impose a system of financial arrangements upon a first nation, or otherwise infringe the authority of a first nation, including those first nations presently exercising financial authority, including taxation, for example, under sections 83 and 84 of the Indian Act.

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Consistent with continuing Crown policy, as established by the royal proclamation, the Supreme Court of Canada has recognized that a central purpose of the treaties is to reconcile the original aboriginal title to lands, waters, and natural resources of what is now Canada. The significance of establishing new fiscal relationships that reflect both our continuing commitment to nation-building and Crown policy cannot be overstated.

In the new MKO, it's regrettable that the national table on fiscal relations was unable to arrive at proposed legislation that addressed the objectives of the chiefs in assembly as presented in resolutions 5/96 and 49/98. As a result, Parliament must now proceed cautiously in order to protect and fulfill the nature of our joint treaty relationship.

In order for our treaty relationship and our joint commission to nation-building to thrive and evolve in contemporary terms, it is essential that the Crown implement each of its commitments with integrity and honour. As part of these commitments, it is also essential that new fiscal relations are established based on the principles that we have described before--flexibility, fairness, choice, certainty, economic incentives, and efficiency. They should reflect an equitable sharing of revenues derived from treaty lands and natural resources, as well as to those lands, as the grand chief mentioned, to which an unresolved aboriginal title applies. First nations have also indicated that any new fiscal relations must be in keeping with the constitutional and legal framework.

With respect to Bill C-19 and the proposed establishment of an independent claims body, MKO first nations recommend, first, that since Bill C-19 affects the treaty relationship and the honour of the Crown, as well as the inherent treaty and aboriginal rights of first nations, this committee should ensure that all first nations and first nation organizations who desire to appear before this committee are afforded the opportunity to do so.

At its root, while it's a management issue in some respects, and the four institutions that are referring to specific functions are mentioned, again the treaties themselves create a fiscal relationship between Her Majesty and first nations. Essentially, it is about resources and revenues and economic well-being, so any first nation that feels their interests are affected must be offered the opportunity to appear before this committee.

The committee should report and recommend that the House of Commons re-examine Bill C-19 in light of and in comparison with the 1983 report of the House of Commons Special Committee on Indian Self-Government, the Penner report, and of course the final report, with its comprehensive recommendations regarding fiscal relations, and the 1996 Royal Commission on Aboriginal Peoples. Also examine the direction of the AFN chiefs in assembly with respect to developing new fiscal relations set out in resolutions 5/96 and 49/98, because even though there have been comments made regarding the current support for the existing legislation as presently tabled, it's important to remember that the leadership of first nations in Canada supported a contemporary initiative to examine new fiscal relations across a broad sector of issues.

The third recommendation of ours is that the committee report and recommend that government renew its commitment to a joint first nations-Crown initiative intended to develop new fiscal relationships that are based on flexibility and fairness, those things the Assembly of First Nations indicated in its resolutions that do reflect an equitable sharing of revenues derived from treaty lands and natural resources, as well as lands to which an unresolved aboriginal title applies, and to ensure that they're in keeping with the constitutional and legal framework, including that established by the Supreme Court of Canada in respect of treaty interpretation, aboriginal rights, and aboriginal title.

Our concern is that although the Assembly of First Nations and MKO accept the policy of first nations determining their own future as first nations, which of course flows directly from the sovereign aspect of first nations in entering into a treaty and in terms of the recognition and affirmation of the inherent right to self-government, as protected in the Constitution and recognized by the current government, it's important that legislation considered by Parliament does not result in the imposition or infringement of existing authority and future authorities.

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For example, I note that in its analysis of this bill, even the Library of Parliament points out that the numerous first nations who have existing section 83 and section 84 taxation authorities will find themselves automatically falling under the proposed legislation, if it comes into force. That's on page 26 of the Library of Parliament's analysis. This applies to numerous first nations—although there are two in Manitoba, one of which is an MKO first nation, the Opaskwayak Cree Nation....

In addition to that type of direct imposition and infringement of existing authorities, the bill, under “First Nations Fiscal Powers”, also places an additional infringement on those first nations who fall under the First Nations Land Management Act. If they establish “rules and procedures respecting revenues from natural resources”, they are not able to pursue or develop law in respect of that under subclause 3(2), “unless those rules and procedures have been approved by the First Nations Financial Management Board”.

So although the extensive preambles to the bill appear to indicate that the bill is entirely a matter of opting in, or something that an individual first nation may choose to apply to itself if, in its wisdom, it deems the precise structure of the legislation to be of interest and value, there are in fact sections of the bill that impose federal authority on existing first nations government authority under both the First Nations Land Management Act and sections 83 and 84 of the Indian Act.

We see it as somewhat ironic that those first nations who may be viewed by government as being the more advanced or progressive find their existing authority directly infringed by the legislation were it to go into force. For example, I refer to a first nation like Opaskwayak, which has long been a 53-60 first nation, managing its own lands. It has been deemed by a tax court to be progressive enough to be a municipality for the application of federal tax law—not under any self-government legislation, but for tax law application only. The result was that the proceeds of all of its economic development entities, the Kikiwak Inn, the Paskwayak Business Development Corporation, and so forth, are all tax exempt in accord with the Indian Act and the promises of treaty.

It is precisely for those reasons that MKO has recommended a renewal of the commitment to examine the form of fiscal relations to ensure that the objectives of first nations are met and that existing authorities are not infringed. Were the latter to take place, it would be a breach of the existing commitments of government to many first nations who have taken advanced steps, and it would also be an infringement of the section 35 rights to self-government—in terms of any existing or future taxation regimes established by first nations within their own territory, as well as any fiscal relations that may arise in the future, particularly in respect of resource revenue-sharing within our territories.

As the committee may know, the three-quarters of Manitoba covered by the traditional lands of our first nations is primarily in the north. It is the primary area where the wealth of Manitoba is derived, from minerals, hydro power, and forestry.

Pursuant to the treaty, the objective of the treaty was to share those resources. And following the natural resources transfer arrangement and others, the existing fiscal relations and commitments were modified by that legislation—and certainly by the way governments interpreted it—to the point that first nations are excluded in many cases from even accessing those types of resources. Clearly, the intent of these types of financial structures are to provide for financial stability and certainty, and for the ability of first nations governments to manage resources—and not within the vision necessarily presented in the bill, but in terms of the objective of first nations governments.

In order to achieve that objective, arrangements need to be arrived at to acknowledge the original intent of treaty and the sharing of resources, to revisit the mechanisms providing for that sharing, and to ensure that new fiscal relations are established.

Those are my comments at this time, Mr. Chair.

Thank you.

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The Chair: We thank both of you very much.

That really completes the time, so we thank you very much for your presentation.

We now move from Winnipeg to Victoria.

For the benefit of committee members, in Victoria we'll be hearing from Larry Blain, who is a managing director with RBC Capital Markets.

We welcome you, Mr. Blain, on the shortest of short notices. We appreciate your accepting our invitation, and we invite you to make a presentation and to allow some time for questions.

Please proceed whenever you're ready.

Mr. Larry Blain (As Individual): Thank you very much.

I should start off by saying that I am no longer managing director of RBC Dominion Securities. I worked with the Municipal Finance Authority when I was with Dominion Securities, and through them with the First Nations Finance Authority. In January of this year I left Dominion Securities after 20 years and I am now the CEO of Partnerships BC, which is a crown corporation of the province of B.C. I'm no longer in the financial business, but my views have not changed, of course.

My association on this issue goes back quite a few years. In my relationship with the Municipal Finance Authority of British Columbia we spent a lot of time talking with, and getting established, the First Nations Finance Authority, and we have given this issue a lot of thought. Over the last two or three years, while the legislation was being developed, we advised the First Nations Finance Authority on the financeability questions. We looked at the structure in great detail, we wrote a couple of reports, and we went with the First Nations Finance Authority people down to the rating agencies a couple of times in New York and listened to their responses as the structure was laid out for them.

We came to the conclusion, and the rating agencies corroborated it, in regard to the FNFA structure that if the procedures are carried out the way we understand they would be carried out, it would be an investment grade credit, meaning you would be something above single A low or better. And if it is an investment grade credit, then the bonds that are issued with that credit rating would be fairly readily placeable into the Canadian capital markets because there's a very deep market for such securities.

The key to the whole thing to us was that it was modeled in an analogous fashion to the Municipal Finance Authority of British Columbia itself. I'm not familiar with the briefings you have had today already or the discussions from people, so I hope I'm not going over material twice for you. The MFABC is a triple A credit rated entity, which is separate from the Province of British Columbia. Its credit rating is based on a number of key factors. One is that it's a collective credit; it's a joint and several obligation of all of the different local governments in British Columbia. It's collective in the sense that it's the common credit rather than the credit of any particular local government that makes it work.

The MFA also has the ability to levy taxes in the event that they are in danger of imminent default or something like that. If they needed more money to raise debt service, they could assess taxes across all of the local governments of British Columbia. In fact, the City of Vancouver is the only local government in British Columbia that is not a member of the MFABC; it borrows in its own name. But at the same time, if a levy is required across all of British Columbia it would include the City of Vancouver as well. It's a total collective credit.

The third aspect is that there's a debt reserve fund. In other words, in the event that there's a cash problem, a liquidity problem, and they can't make payments on the debt service obligations on outstanding bonds, there's a fund available that's held by the MFA, and that will be available in the first line of defence, or while you're trying to get a levy set or something like that. There's a cash reserve there to meet that service obligation.

I understand you had Ken MacLeod speaking earlier today. Is that correct? He was the inspector of municipalities in B.C. I presume that what he would have been saying to you is that the basic structure within the local government system in British Columbia is very analogous to what's in the FNFA, which is that you can only borrow if you borrow within certain room, that you have a certain amount of borrowing room as defined by the assessed values of all your properties. As long as you stay within that room, it becomes very conservative in terms of the ability to raise property taxes and pay the debt service.

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Obviously I'm open to any questions you have, but on balance we thought it was a very financeable credit, and we wrote a couple of reports for the entities that said this was our view as a company, RBC Dominion Securities.

Thank you.

The Chair: Thank you very much, Mr. Blain.

We go to questions from the members.

Ms. Karetak-Lindell.

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Ms. Nancy Karetak-Lindell: Thank you.

One of the earlier witnesses tonight stated they didn't think that Bay Street or any of the other organizations that are interested in lending money would be interested in this type of financing. I wanted to hear what your comments would be on that.

Mr. Larry Blain: The contentious point then is not whether the bonds could be sold, but more would they receive the credit rating I indicated. If they had a credit rating that was investment grade, meaning triple B high, or single A low, or higher, then there's absolutely no question in my mind whatsoever about those bonds being placeable in the Canadian market. There's no question about that whatsoever.

What we could debate is whether they would achieve such a rating. I think if they follow the kind of structure we followed with the Municipal Finance Authority, which is triple A, and has the same principles in checks and balances...we were very confident that it would achieve a rating like that, and the rating agencies themselves were confident that we would achieve a rating like that. So I suppose I'm more optimistic.

The Chair: Thank you very much. Do you have closing remarks?

Mr. Larry Blain: No, I don't. That's it.

The Chair: There are no more questions, no closing remarks.

Thank you very much for your contribution. It is very helpful.

Mr. Larry Blain: My pleasure. Thank you very much.

The Chair: Colleagues, this completes this session.

We could extend. With unanimous consent we could do a lot of stuff around here, but we don't have a quorum.

The meeting is adjourned.