PACC Committee Meeting

STANDING COMMITTEE ON PUBLIC ACCOUNTS

COMITÉ PERMANENT DES COMPTES PUBLICS

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 24, 1998

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[English]

The Chairman (Mr. John Williams (St. Albert, Ref.)): Good afternoon, ladies and gentlemen. I'd like to call the meeting to order. Today, we have, pursuant to Standing Order 108(3)(e), consideration of chapter 14—Indian and Northern Affairs Canada, Comprehensive Land Claims—of the September 1998 report of the Auditor General of Canada.

Our witnesses today are: Mr. Denis Desautels, the Auditor General of Canada; Mr. Grant Wilson, principal, audit operations branch of the Auditor General's Office; and Mr. Ted Bonder, director, audit operations branch.

From Indian Affairs and Northern Development we have: Mr. Scott Serson, the deputy minister; Mr. Greg Gauld, director general, comprehensive claims branch, claims and Indian government sector; and Mr. Terry Henderson, director general, claims implementation branch, claims and Indian government sector.

We'll start with the opening statement by the Auditor General, Mr. Desautels.

Mr. Denis Desautels (Auditor General of Canada): Thank you very much, Mr. Chairman, for this opportunity to present the results of our audit of comprehensive land claims in our September 1998 report.

The subject of comprehensive land claims, Mr. Chairman, is a very significant and complex topic to many Canadians. The stakes are high from moral, legal, social and economic perspectives, and the impacts of settled and unsettled claims can be far-reaching.

At the time of our audit, 12 settlements had been reached between 1975, when the first one was finalized, and 1997. Indian and Northern Affairs Canada plans to spend $262 million on comprehensive claims in 1998-99. The settlements involve 48,000 aboriginal people, full ownership of over half a million square kilometres of land, direct payments by the Government of Canada of almost $2 billion, and various rights and obligations of the parties, with attendant costs.

Although these settlements are very significant, they may reflect only the tip of the iceberg. And this is because there are over 200 first nations that have actual or potential land claims and treaties still under discussion or to be addressed.

The challenges to successful settlements are indeed enormous. They involve very complex issues, and they require the goodwill of several parties and many non-parties to a claim.

But I believe that negotiating fair settlements is far preferable to the lingering threat of, or actual, litigation. I also believe that the nature of the relationship between first nations and the government will, in large measure, reflect the way in which settlements are reached and outcomes are achieved.

[Translation]

Mr. Chairman, with respect to the September 1998 report on comprehensive land claims, there are a few highlights that the committee may wish to consider. First, the audit was performed in the context of the department's objectives to provide certainty and clarity to titles of ownership and use of lands and resources through negotiated settlements, thereby encouraging socioeconomic development.

In this regard, the audit focussed on the department's role and sought to identify opportunities for improvement in the way claim settlements are reached, implemented and reported.

We found that certainty achieved under settlement agreements can mean different things to different parties. The risk is that the parties may have agreed on the negotiated outcomes, but have different expectations of the benefits and obligations set out in the signed agreement.

In addition, the audit found that, first, more rigour is needed, to enhance the effectiveness of the settlement process, in determining financial amounts, land transfers and other considerations that are ultimately included in a final settlement agreement. Next, the department needs to act on its commitment to explore methods other than the surrender or extinguishment of Aboriginal rights or titles that would provide clarity, stability and certainty through negotiated claims settlements. Third, implementation of final settlement agreements needs to be improved and timely evaluations should be performed and implementation results reported.

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Furthermore, one must question why, notwithstanding the complex issues, it has taken or will take 20 years or more to settle some claims. In my view, protracted settlements do not contribute to cost effectiveness and may result in less desirable outcomes for all concerned.

Although the audit recommendations are directed primarily to the department, a consistent, cooperative effort by all parties is needed in order to achieve the necessary goals and to achieve them in a fair and expeditious manner.

[English]

In its published response to the audit, the department did not explicitly address the audit recommendations. Consequently, there's no commitment to specific remedial action against which it can be held accountable.

The department suggests that under its current comprehensive land claims policy of 1986 things have improved, and therefore the audit observations apply to approaches used prior to that date.

However, I wish to bring to the committee's attention that the audit included the review of settlements reached under the current comprehensive land claims policy as well. Further, because some claim settlements have taken 20 years or more to reach, and all are still being implemented, the audit issues need to be addressed regardless of which policy the department wishes to apply.

In its testimony before the Standing Committee on Aboriginal Affairs and Northern Development on November 3, 1998, the department indicated that it was preparing an action plan which will allow for consultation with key partners to address the audit recommendations. The department also acknowledged the challenges that it faces.

I believe this is a step in the right direction. Appropriate effort will be needed to ensure that the challenges are met and suitable results are obtained. With the encouragement of the committee, I am hopeful that improvements will be made.

It would be most useful to hear from the department today as to what we can expect to see from this action plan. For example, how will it address the issues relating to certainty, rigour, implementation, and length of time to settle a claim? Will the plan include components for these areas? Your committee may wish to request the action plan in order to follow the department's progress in addressing the audit recommendations.

Mr. Chairman, my colleagues and I would be pleased to answer the committee's questions.

The Chairman: Thank you, Mr. Desautels.

And now we'll turn to Mr. Scott Serson, the deputy minister for the Department of Indian Affairs and Northern Development, for his opening statement.

Mr. Serson.

Mr. Scott Serson (Deputy Minister, Department of Indian Affairs and Northern Development): Thank you, Mr. Chairman.

With the release of this year's Auditor General's report, we've looked back at our progress during the past 25 years of treaty-making. As Minister Stewart noted in the House of Commons, we don't have the process perfectly worked out yet, but we feel we are making progress.

Today I'd like to talk about some of the elements we are looking at in our action plan in response to the Auditor General's recommendations.

The Auditor General has recognized that negotiating treaties in the 1990s is a challenge and that all participants in the treaty process are accountable for the results, but that the length of time required to conclude treaties is too long.

On the other hand, there is no clear guideline on what the ideal timeframe might be. New leadership, court rulings, and other events can cause unavoidable delays.

With our partners, we are exploring ways to accelerate the treaty negotiation process in the context of an overall review of changes being considered as a result of last year's Supreme Court decision in Delgamuukw.

[Translation]

The capacity of some Aboriginal groups to conduct negotiations while at the same time undertaking other responsibilities, such as consultation initiatives in regard to land and resource development, has been raised by the Auditor General, the British Columbia Treaty Commission and others.

We are working with Aboriginal groups to address this issue. An arm's length panel to review this question has been established in the context of the British Columbia Treaty process and similar initiatives may be considered in other regions. This is consistent with the approach of the Gathering Strength initiatives, announced by Minister Stewart in January 1998.

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[English]

One of the primary objectives of land claims negotiations is to achieve certainty in the area of land and resource ownership. In the 23 years since the first modern treaty was concluded, I am not aware of any successful litigation—based on assertions of aboriginal rights and title—in areas where land claims agreements are in place. On this basis, the department is optimistic that the legal certainty provisions developed with the advice of the Department of Justice have been effective.

The Auditor General has nonetheless expressed concern about the amount of litigation in regard to aboriginal issues. In some cases, lack of clarity in treaties or the delay in the negotiation of implementation plans has indeed led to disputes.

Treaties negotiated prior to 1986 did not include implementation plans, but since that time the federal government has insisted that these plans be completed before a final agreement is approved. We have also negotiated implementation plans after the fact with two of the four beneficiary groups of the pre-1986 treaties.

[Translation]

A rigorous regime of implementation monitoring and reporting on implementation plans is also in place. A consolidated annual report for public distribution and tabling in Parliament is prepared on the implementation of each completed treaty. Nonetheless, the department continues to work with other parties to enhance implementation practices.

[English]

In the north, it was very difficult to put a price on land and natural resources, but south of 60° there are more reference points available for estimating the monetary value of land. We intend to continue our efforts to find more precise ways to measure the value of treaty components during the negotiation process. For example, we now commission valuation studies when resource potential in a claimed area appears to be significant.

The department meets all the usual requirements in terms of disclosure to Parliament. As well, annual reports on implementation of each settlement agreement provide useful summaries of most settlement and implementation expenditures.

However, our aim is that our operations be transparent, and we are prepared to undertake a review of our disclosure of financial cost projections and reporting related to claims in order to determine whether we can improve its informative value while still retaining clarity.

[Translation]

The first comprehensive five-year review has just recently been completed for the Gwich'in Agreement signed in 1992. An evaluation of the "economic measures" provisions in the 1984 Inuvialuit Agreement is about to begin, as is a five-year independent review of the Nunavut Agreement, which includes an impact evaluation.

However, the Auditor General's report indicates that we should be conducting more widely-ranging evaluations of treaties. A study of the impacts of treaties negotiated in the 1970s and 1980s, taking into account all relevant factors, would be a major undertaking, but must be considered.

[English]

The Auditor General, in his 1998 report as well as in previous reviews, has identified a number of concerns about how we can conduct the complicated business of treaty negotiations. We will work closely with the Office of the Auditor General to further develop our action plan to address the recommendations of the report. I welcome any comments the committee may wish to make as well.

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All of these contributions will help us to work more effectively to settle comprehensive land claims in the interests of aboriginal peoples and all Canadians.

Thank you very much, Mr. Chairman.

The Chairman: Thank you, Mr. Serson.

Now we'll turn to Mr. Mayfield for eight minutes.

Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Thank you very much, Mr. Chairman.

I'd like to begin, sir, by thanking the Auditor General and his colleagues and Mr. Serson and his colleagues for attending today.

I was interested in the comments you both made as we began this session. I wouldn't want to put words in the Auditor General's mouth, but if I did detect some frustration as he talked about accountability, I can assure you that there's plenty of frustration for everybody.

I think of the situation in my own constituency, where negotiators talk to their regional advisory committee people and those conversations seem to be little more than lip service after the fact and these people do not feel frustrated. I'd like to say that the frustration goes not only to non-aboriginals but to the core of aboriginal communities themselves.

As we begin to talk about accountability, reference has been made to your department appearing before the committee on aboriginal affairs to discuss comprehensive land claims. In that meeting, I believe, it was mentioned the department is preparing an action plan. Also, the Auditor General has made reference to a plan.

I want to ask the departmental officials the following questions about this plan. When will it be completed? When will it be implemented? Who are your partners? Who will the department consult with? What targets do you have for completing the plan and for implementing the measures of that plan in order to address the Auditor General's concerns and recommendations? Finally, will you provide Parliament, and specifically this parliamentary committee, with those plans that you are developing?

Mr. Scott Serson: That is going to be a process that's going to take some time, Mr. Mayfield, because we will have to discuss with our partners. In the comprehensive claim process, that discussion includes first nations groups and provinces and territories that are at the table with us. But I don't think we should take too long in doing this. If we can arrange the necessary consultations and consult with the minister and make sure she's on side, I'm aiming for some time early in the new year—February or March—to get a draft. I certainly have no problem with sharing the results of our consideration with this committee and I don't think the minister would.

Mr. Philip Mayfield: Going a bit further with respect to that, in the Auditor General's report, in 14.89, it's mentioned that apart from the costs of the financial compensation components, other costs have been identified, but “only on a piecemeal basis, or not at all”. The Auditor General itemizes these somewhat:

those involved in reaching a settlement, the potential value of transferred land ownership and access rights, consolidated costs of other federal departments involved in the claims process, costs of various projects under implementation plans and responsibilities under the agreements, and costs of resource and revenue sharing.

The Auditor General mentions that perhaps actual costs may not be realistic, but that there should be estimates and that these estimates should be provided by your department. I was wondering whether or not your department would provide this cost information to Parliament and, again, specifically to this committee, as it has been outlined by the Auditor General.

Mr. Scott Serson: Again, I'm not sure if we've had a chance to look at this list of cost areas, Mr. Mayfield, or to look at issues like the cost of gathering this kind of data. I'm going to turn this over to Mr. Gauld, who has been thinking about it, and see what his reaction is.

Mr. Greg Gauld (Director General, Comprehensive Claims Branch, Claims and Indian Government Sector, Department of Indian Affairs and Northern Development): I think we certainly would like to make the costs available.

There are different categories of costs. There are the straight cash costs, which can include implementation costs as well as the actual settlement costs. Those costs are generally made available.

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When it comes to the costs of other assets that are included in a settlement, assets such as land or resources, in the earlier treaties, when we were working in the north, this was a difficult thing to establish, because there was no market. These things weren't bought or sold. There was no way to establish a market value for these things.

Now, as we work south of 60° in the provinces, we are able to get at least notional values, and we get studies done. In fact, under the cost-sharing agreement with British Columbia, we put a notional value on such assets in British Columbia. Elsewhere, we have some studies done which can give us very approximate figures. Sometimes there are large orders of variability in these.

Mr. Philip Mayfield: I think the Auditor General recognizes that—

Mr. Greg Gauld: Yes.

Mr. Philip Mayfield: —and he does mention estimates. But would you be willing to put together those estimates so that we could have a look at them?

Mr. Greg Gauld: It may be very difficult to do that retroactively for the claims that were settled in the north, but we have those estimates for the ones that are being settled south of 60° at the moment. We have the Nisga'a agreement, and those numbers are available.

With respect to some of the other costs the Auditor General was referring to, like the costs of negotiating and the costs of implementing by various departments, that's one thing we're reviewing. We're reviewing how we can disclose those costs and gather those costs, particularly when they relate to other departments. So those costs are not readily available at the moment, but certainly the numbers for the cost of the Nisga'a agreement can be made available.

Mr. Philip Mayfield: Okay.

In paragraph 14.65, the Auditor General makes several recommendations that are intended to produce improvements in the process of reaching settlements. These can be detailed:

ensure that adequate rigour is always applied in determining the nature and the amount of assets that are included in final settlements;

obtain an overall assessment of the intended agreement from the Department of Justice before the government signs it;

together with other parties to a claim, expedite the claims settlement process, in a cost-effective way.

I want to know if the department has been able to monitor this progress, identify the problems, and report the achievements? Could you detail in your recommendations how they will be implemented?

Mr. Scott Serson: Are you asking if we will try to respond to section 14.65 and deal with these?

Mr. Philip Mayfield: Yes.

Mr. Scott Serson: Yes, we will address them.

Mr. Philip Mayfield: And will we, as a committee of Parliament, have a chance to see that?

Mr. Scott Serson: Subject to its review and release by the minister, I don't see why not, Mr. Mayfield. I don't want to make a firm commitment, because this will be a report to her, but I think we should probably be able to come back to the committee with our response, as we have on other occasions.

Mr. Philip Mayfield: Okay. I have one last brief question. In looking at paragraph 14.87, we see that the Auditor General again makes several recommendations aimed at the implementation phase of the land claims settlements:

ensure that agreed-upon implementation plans contain adequate details regarding time frames, project costs, and cost sharing;

address issues relating to fragmentation, completeness and timeliness of reporting;

perform periodic evaluations of settlement implementation on a timely basis.

Could you respond in detail to these recommendations of the Auditor General, indicating how and when they might be implemented?

Mr. Terry Henderson (Director General, Comprehensive Claims Branch, Claims and Indian Government Sector, Department of Indian Affairs and Northern Development): If I may, Mr. Mayfield, I'll take that. At present, in fact, with the parties to a land claim agreement, we do negotiate a fairly comprehensive implementation plan that speaks to the who, what, how and how much of implementation and the various activities the parties feel are necessary to fulfil the obligations of a land claim agreement.

The Auditor General has raised questions about the level of detail. We are certainly prepared to go back and look at the guidelines we use for the preparation of implementations plans, but any of these implementation plans must of course be negotiated by all of the parties. Whatever federal guidelines we might have, we still have to sit down, using that as a baseline, and then work with the parties to determine what is legitimate content for the implementation plans.

Mr. Philip Mayfield: Sure.

The Chairman: Thank you, Mr. Mayfield.

Mr. Myers, eight minutes.

Mr. Lynn Myers (Waterloo—Wellington, Lib.): Thank you very much, Mr. Chairman.

If I may, I'll go to 14.63 of the Auditor General's report. I was interested in the fact that he said lengthy negotiations could impact cost-effectiveness and that, in fact, the outcomes could fall short as a result. Could you comment on that?

Second, there's a list in 14.63 of three items that are specifically pointed out, and I wonder if you could comment on each of those as well.

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Mr. Greg Gauld: We're certainly concerned about the length of time it takes to do treaties. Although in some cases it has taken up to 20 years, if we look at the most recent one, the Nisga'a, since B.C. came to the table, it's really been 8 years, though, so we are getting a little better. You have to recognize as well—I think the Auditor General has recognized this—that there are at least three parties at the table and no one party has control over the process; it is a process of negotiation among equal parties.

In terms of the three points raised in 14.63, in regard to “no overall plan”, this was certainly the case before 1986. Since 1986, we now begin the process with a framework agreement, an agreement among the three parties that sets out a schedule, the roles of the parties, all the process information. Sometimes these get out of date as the process goes on. There is usually an ongoing attempt by the parties to set new targets as they go along, and we try to monitor these. But it's certainly true that we don't meet all the targets, because this is a complicated process and a lot of intervening events can disrupt it. We will be focusing on that to see how we can better respond to that observation.

In regard to the established procedures not always being followed and negotiations deviating from established mandates, certainly, where there's a deviation from mandates we have to, at some point, seek approval from cabinet for those deviations, because our mandates come from cabinet. Where there are deviations from original procedures, they usually have to be agreed to by the three parties. If there's no agreement, the parties won't deviate. It is a pretty organic process, as you can imagine, between three parties who often have quite different cultures, quite different backgrounds and different ways of operating.

Mr. Lynn Myers: Do you see a change recently or is this still an ongoing problem? How do you assess it?

Mr. Greg Gauld: We're gaining more experience, many of the aboriginal groups we're dealing with are gaining more experience, and the provinces where we deal now are gaining experience. There was certainly less experience 10 years ago in British Columbia, and there was less experience in Newfoundland and in Quebec. We're all gaining experience as we do this. There's room for improvement and we're constantly looking for that.

Mr. Lynn Myers: I want to go to implementation plans, if I may. As I understand it, after 1986, implementation plans were required. I wonder what the status of those plans is, and if, in fact, they're forthcoming. What's happening in that area?

Mr. Terry Henderson: Indeed, since 1986, all land claim agreements that have been completed have been accompanied by an implementation plan. In fact, they are not just implementation plans from the federal government's perspective, but are implementation plans negotiated with all parties.

There were four beneficiary groups or three agreements that preceded 1986. We've been successful with two of the four beneficiary groups in going back after the fact and negotiating implementation agreements. We did that with the Inuit of James Bay and the Naskapi of James Bay. There are still two implementation agreements or plans that elude us at this stage of the game, but we have made efforts to bring the other parties to the table. To date, we have not been successful.

Mr. Lynn Myers: Mr. Chairman, I was interested in their report on plans and priorities for 1998-99.

You indicated that negotiated settlements to land claims create a climate that promotes economic development. Could you share with us what those things are?

Mr. Greg Gauld: Perhaps I can give a good example. One that's fairly recent and goes back about a year now is the Voisey's Bay development, where there was probably Canada's largest mineral find of the century. INCO had purchased the rights and undertaken the development. They were running into issues with the aboriginal groups there and felt that lack of progress on land claims was in fact a major factor that was holding up their ability to develop.

About a year ago, there was a very intensive 14-day session with the Newfoundland government and Labrador Inuit, where we cracked the spine, if you will, of that settlement and agreed on many of the major features there. In fact, there was a headline in the papers in Newfoundland following that, in which the president of INCO, I think, applauded the governments and the aboriginal groups for having dealt with that issue. And that issue is not really a key issue in holding up that development. That's certainly one example.

Mr. Lynn Myers: That is exactly it: it's one example. Do you systematically do it for all settlements?

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Mr. Greg Gauld: We try to go in and deal with claims in a way that will make it easier for resource development to go on. In some cases, resource developments are going on while we're negotiating claims—certainly the BHP development, the diamond mine in Northwest Territories— But with some of those groups, there were already claims processes underway, and they contributed to building a relationship that allowed reasoned negotiations to go on among the parties—the aboriginal groups and the company—to resolve difficulties there and reach agreement so the project could proceed. And that one is proceeding.

Mr. Scott Serson: Increasingly, Mr. Myers, our message to industry is that when they are undertaking developments on the traditional territories of an aboriginal people, they must, in a respectful way, if they want to be successful, begin their dialogue with those aboriginal peoples early, keep them informed of what's going on, and, if possible, make them a part of that development, give them a stake in that development. That's what we've seen. If we look across the country, that does work, as it seems to have done in BHP.

Mr. Lynn Myers: Is this the kind of information reported to Parliament through performance reports or by another means?

It seems to me that it's important to know these kinds of results and this kind of information. I wondered if you had some sort of mechanism to report or if you were planning to do so.

Mr. Scott Serson: We haven't really given it a great deal of thought, Mr. Myers. It's the kind of situation Greg is talking about. I suppose we could work on areas where we have intensive land claims negotiations underway. Otherwise, it's a wide variety of dialogue with developers that takes place, not only at my level, but at all levels in the organization, right across the country. Unfortunately, often we only get called when issues get to a tense situation.

The Chairman: Thank you, Mr. Myers.

Mr. Scott, we're moving into the second round, so it will be four minutes.

Mr. Mike Scott (Skeena, Ref.): Thank you very much, Mr. Chairman.

Mr. Serson, can you confirm for the committee that a fellow by the name of David Osborn— And I'm not sure if he's still connected with the Nisga'a agreement, but he was the lead federal negotiator at one point. I'm not sure whether he was a salaried employee or a contractor, but the information I have is that he was paid $372,000 in one year for his services. Is that correct?

Mr. Scott Serson: Mr. Osborn was the chief federal negotiator for a period of time. He was a contract employee. I can't confirm that number, Mr. Scott. I'd have to check on it.

Mr. Mike Scott: Well, let me help you out. It was broadly publicized in British Columbia and I never saw the department take issue with it, so I have to assume it's correct. I'm sure that if you don't know the exact number, Mr. Serson, you would know that this is at least in the ballpark. Do you think this is defensible?

The Chairman: Well, I think the first question is, is it in the ballpark, Mr. Serson? Do you know that?

Mr. Greg Gauld: I think it could be in the ballpark.

Mr. Mike Scott: Okay. Is it defensible? Can you stand up in front of Canadians and say that this is a wise expenditure of their money?

Mr. Scott Serson: Well, I can say that there are times when the federal government has sought out experienced private sector negotiators to undertake negotiations. And to get a good private sector negotiator, one sometimes has to pay those kinds of dollars. Now—

Mr. Mike Scott: That's more than double what the Prime Minister makes, Mr. Serson.

Mr. Scott Serson: I understand that, but I am sure there are a lot of negotiators in the private sector who make that or more, as you know, Mr. Scott.

Let me complete this by saying that we are conscious of these costs and that in the department we have been trying to do more with public servants as negotiators. We are trying to minimize our use of these high-cost negotiators.

Greg, I don't know whether you want to add anything, but in general, I think that's—

Mr. Mike Scott: Since I have a limited amount of time, I have more questions I would like to put to you. Can you confirm that the lead negotiator right now for at least the Nisga'a treaty and, I believe, for other treaties as well, is a fellow by the name of Tom Malloy?

Mr. Scott Serson: Yes.

Mr. Mike Scott: Is Mr. Malloy a contractor or an employee?

Mr. Scott Serson: A contractor.

Mr. Mike Scott: Do you have any idea of what his billings would be on an annual basis right now?

Mr. Greg Gauld: I don't think I have the number, but we could give it to you if you would like it.

Mr. Mike Scott: But you would agree with me that it would be in the same ballpark as the $372,000 for Mr. Osborn? It has been reported that Mr. Malloy's billings on an annual basis are about the same.

Mr. Scott Serson: Yes.

Mr. Greg Gauld: Yes.

Mr. Mike Scott: I think the committee should know this.

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Can you tell us what the total annual cost of the entire B.C. treaty process is on an annual basis, including salaries, consultants, travel, phones, fax? You must have a sort of global—

Mr. Greg Gauld: Yes. The federal share, including our contribution to the British Columbia Treaty Commission, which includes our contribution to funding for further negotiations with the first nations there, comes to about $21 million a year.

Mr. Mike Scott: Okay. And you've no doubt had an opportunity to analyse what the Auditor General has said about the lack of timelines and about the lack of a budget in terms of what the overall negotiating costs are going to be outside of what the actual cost of resolving the land claims would be. There's no budget for the negotiating itself, for the negotiating cost.

Mr. Greg Gauld: Yes, we have budgets for our negotiating costs.

Mr. Mike Scott: Could you tell us how much you think it's going to cost to negotiate land claims in British Columbia?

Mr. Greg Gauld: Into the future?

Mr. Mike Scott: Yes. That's what I meant by budget.

Mr. Greg Gauld: I'm sorry. No, I don't have a budget projection into the distant future.

Mr. Mike Scott: I have more questions, but I see that the chair wants to move on.

The Chairman: Yes. We'll hopefully come back to you, Mr. Scott.

Mr. Mahoney, four minutes.

Mr. Steve Mahoney (Mississauga West, Lib.): Just to pursue that, I guess the obvious question is, do you have any job openings?

Some hon. members: Oh, oh.

Mr. Steve Mahoney: Where do you seek out your arbitrators and negotiators? Is this part of a panel or is it just by reputation? How would you find an individual who is qualified to negotiate Nisga'a, for example?

Mr. Scott Serson: For Nisga'a—Greg can add more detail, perhaps—Mr. Malloy had a proven track record. He had already settled one comprehensive land claim in the north, so he had a track record of success. And this was an important claim. It made sense to assign him to it.

But as I said, we look both internally and outside. Sometimes there are senior public servants who we feel have the right set of talents to be assigned to this, and obviously, they make public service salaries. But where we can't find senior public servants, we turn to the private sector and we look for a variety of sources.

Greg?

Mr. Greg Gauld: Yes. The network of people active in this area—people who have experience in this sort of work—is fairly well known to those in the business. We look for people who have experience in this and related areas. When sometimes they don't work out, there are changes. Among our chief federal negotiators at the moment, there are some former senior public servants who have worked in this area, both at the provincial level and the federal level.

Mr. Steve Mahoney: So they'd be highly familiar with the issues.

Mr. Greg Gauld: Yes. This is a fairly complex and technical area.

Mr. Steve Mahoney: The initial impression of justifying a fee like that is perhaps a little negative, but I wonder if the special knowledge— You wouldn't simply take an arbitrator out of the labour movement or something like that.

Mr. Greg Gauld: No.

Mr. Steve Mahoney: Is it because of the uniqueness of the nature of the negotiations? Is that really the justification for it? And would there be any sense in having a group of people like that on a permanent staff job? Is that something you've looked at?

Mr. Greg Gauld: People like labour negotiators?

Mr. Steve Mahoney: No. Like your negotiators. In other words, you would build up a federal team of negotiators as opposed to independent contractors.

Mr. Greg Gauld: Oh, on-staff negotiators.

Mr. Steve Mahoney: Yes.

Mr. Greg Gauld: It's something we could look at. We're always looking at the balance we have there. There are pretty demanding requirements on a chief federal negotiator. As well as the requirements for the knowledge, the experience, and the presence at the table in negotiating skills, these people are on the road a lot. It can be pretty high-stress stuff, like labour negotiations where people are working day and night for weeks on end in very high-pressure situations. Many of them have several files at different ends of the country.

Mr. Steve Mahoney: Maybe I could just go in another direction here. I was in B.C., actually, when the Nisga'a agreement was signed, and I was quite impressed at the communication plan—or what appeared to be a communication plan—because there are some people in Victoria who are calling for, I guess, a referendum in the province on it, not the least among them the provincial Liberals.

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It was important to get the right information out. I was quite impressed at the communication efforts, which put out the amount of money involved and laid out the tract of land, the justice system and the self-government aspects of it. It was very concise and very clear, and I'd like you to tell me that you all had a hand in doing that, but I don't know if you did. Did you?

Mr. Greg Gauld: Yes, certainly, there was a tremendous effort around the initialling of the Nisga'a agreement. A lot of people mobilized on very short notice to turn out a lot of information for the public in order to keep people informed about what was in the final agreement.

Mr. Steve Mahoney: Are you monitoring the success rate of that communications plan in terms of polling or exit polling, if you will, or after-deal polling or whatever you want to call it? I'm trying to get an idea of whether it's working or not.

Mr. Greg Gauld: I am aware that a lot of other people are certainly doing polling. This is being reported in the media. In fact, we've seen support for the Nisga'a agreement grow over time, and we've certainly seen a clear sign of support from the Nisga'a people themselves, when they ratified a few weeks ago.

Mr. Steve Mahoney: It was over 75%, wasn't it?

Mr. Greg Gauld: Yes. We're quite happy with the level of public support.

Mr. Steve Mahoney: You did a good job on the communications. I was most impressed.

The Chairman: Thank you, Mr. Mahoney. Mr. Mayfield, four minutes.

Mr. Philip Mayfield: Thank you very much.

Well, it's interesting to hear that a chief federal negotiator is worth twice the salary of the Prime Minister.

As you were talking, I was thinking about a meeting we had in one of these regional advisory committee groups in central British Columbia last summer. One of the things that concerned me was about the people who were speaking to the negotiators. They would say, “These are things we would like you to take to the table.” The response would be, “Well, we can't do that, because it wouldn't be accepted. It would just be rejected out of hand.”

So my question to the chief federal negotiator was, when you go to the table, what do you have in mind? What is your mindset? What position do you have when you go to the table? Even more surprising to me was his response that in fact he has no mindset and no position, that he's there simply to listen to the position of the other side of the table and develop a position out of that. It doesn't strike me as being terribly professional—-or that demanding—to sit and listen and formulate a position out of what the other side is asking for. I'd like to hear your comments on that.

Mr. Greg Gauld: Thank you, Mr. Mayfield.

This may well depend on what stage the negotiations are at.

Mr. Philip Mayfield: This is right at the beginning.

Mr. Greg Gauld: Yes, particularly right at the beginning, we often have a series of exploratory discussions with the other side, with everybody listening—in general terms—to what the other side can give or might be seeking. This is really essential to the formulation of the mandates—

Mr. Philip Mayfield: But, sir, not everybody is listening.

Mr. Greg Gauld: —that we seek approval of.

Mr. Philip Mayfield: As you go to the table, you hear one side of the table say, very clearly, “These are the demands we have and this is what we want.” You hear the chief negotiator saying to those he claims to represent, “We can't take your position because it wouldn't be accepted, but we will listen to the other side and formulate a position out of what they say.”

So it's not as though everybody is sitting around listening. It is as though everybody is interested in only what's happening— Now, the sad part of this is that the majority of complaints coming to me about these negotiations are coming from aboriginal people, because they're well into the negotiations now, and they're very unhappy with the results. Can you comment on that, sir?

Mr. Greg Gauld: Yes, I certainly can. The first stage in negotiations is reaching a framework agreement, which has two purposes. It's an agreement that sets out the process all the parties will agree to follow, the rules of play, disclosure agreements, all these sorts of things, and it sets out the subject matters for negotiation later.

The second and ancillary purpose of that stage is really this “feeling out” of the interest of each side and us gathering together and speaking to third-party groups as well as to the aboriginal groups to get a sense of what the expectations are and what people are looking for. We then measure this internally against our policies and prepare mandates for our negotiators for the second substantive phase, which is the negotiation of the agreement in principle.

We take those mandates to cabinet to get them approved so that we're sure all government departments and ministers are backing them and are comfortable with them. Then our negotiators go in and table positions.

But we do not table positions in the absence of having some sense of the interests of the third parties and the public and some sense of the interests and the objectives of the aboriginal party.

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There's really an essential first listening stage so we can formulate reasonable mandates that are compatible with government objectives and will respond to the needs of the others who have an interest in the negotiations.

Mr. Philip Mayfield: And these are negotiators who have been involved in negotiations across the north and the Yukon, and have come to British Columbia, and are still at this point?

Mr. Greg Gauld: Yes. In the north, we are beyond that stage. We are in agreement—

Mr. Philip Mayfield: But these negotiators have gone through the process in the north.

Mr. Greg Gauld: But when they are in B.C., you have to remember that the BCTC process, as such, didn't start up until about 1994 or 1995.

The first stage was to sit down with the aboriginal groups, the first nations there, and work out framework agreements. Now we have framework agreements with the vast majority of the groups in that process, and we're just beginning to get into the substantive agreement-in-principle negotiations with them at this point.

Mr. Philip Mayfield: And framework agreements have been negotiated, they're in place, they're at the table, and the negotiators are still saying to people they claim to represent, “We cannot take your position to the table because it would not be accepted.”

Mr. Greg Gauld: I can't speak to what a particular negotiator has said, but there may be some positions expressed by third parties—

Mr. Philip Mayfield: I'm sure you understand my frustration, sir.

Mr. Greg Gauld: Yes.

The Chairman: Mr. Finlay, four minutes.

Mr. John Finlay (Oxford, Lib.): Thank you, Mr. Chairman.

Mr. Serson, I'm looking at the first page of your comments. I need some help with the last two points. It concerns your comment that “one of the primary objectives of land claim negotiations is to achieve certainty”, as the Auditor General said. I guess that's acceptable. It doesn't seem like it will always be achieved. However, you said:

In the 23 years since the first modern treaty was concluded, I am not aware of any successful litigation—in areas where land claim agreements are in place—

Mr. Scott Serson: I qualified that with respect to aboriginal title.

Mr. John Finlay: That's what I need to understand: “based on assertions of aboriginal rights or title”. And then you say:

On this basis, the department is optimistic that the legal certainty provisions—developed with the advice of the Department of Justice—have been effective.

When you say you are “not aware of any successful litigation”, I presume you mean litigation by a band or a first nation that has settled a claim and wants to change something in that claim.

Mr. Scott Serson: With respect to land title.

Mr. John Finlay: With respect to land title.

Mr. Scott Serson: Yes.

Mr. John Finlay: All right. Then I have a couple of questions.

We've talked a lot—and I've had a lot of interest from B.C. and other places in my other role as vice-chair of the aboriginal affairs committee—about how the Delgamuukw decision seems to have made some change there. Do you expect some litigation on the basis that our aboriginal knowledge, our aboriginal remembrance, our aboriginal history of what lands we occupied, was not taken enough into consideration in the 20 years when we were negotiating this claim?

It seems to me it's quite possible that, despite your optimism, some court might say that there wasn't quite as much certainty as we thought. Therefore, I'm not sure your term, “successful litigation”, helps.

The Chairman: Mr. Finlay, is your question basically this: are these land claims that were finalized truly finalized or, in light of recent court decisions, are they no longer finalized? What's your opinion?

Mr. John Finlay: Mr. Chairman, you ask that question and it's a good one, but the Auditor General expressed concern about the amount of litigation in regard to aboriginal issues. Now, does that mean that the Auditor General doesn't think there's been enough?

On one hand, we have some—I don't know how much—but it's never been successful from the Indian affairs department's point of view. The Auditor General says he is concerned about the “amount” of litigation. I would think that means there's been too much. So I'm at a loss to know if—

The Chairman: First, we'll ask Mr. Serson to tell us about land claims and whether they are final, and then we'll ask the Auditor General if we're getting too much litigation.

Mr. John Finlay: Thank you.

Mr. Scott Serson: Let me clarify what I was trying to say. The Auditor General said he was concerned about the question of certainty, and in my remarks I tried to use a yardstick to ask if that is a legitimate concern. What I did—and I didn't say it was absolute—was to say that I wasn't aware of that and that we haven't gone back and done a thorough analysis.

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But what I was trying to say is that on the issue of aboriginal title and rights, I do not believe we have had any successful litigation in any area where we have a modern treaty or a modern land claim. That doesn't mean there hasn't been litigation. There has been litigation on questions of implementation, etc. But on the question of certainty, which is the question of, “is the land title and the rights issue clear?”, I was using that just as a yardstick to say—

The Chairman: Mr. Finlay's question was prospective rather than retrospective.

What do you think in light of the Delgamuukw case?

Mr. Scott Serson: Mr. Chairman, I don't know whether I should offer an hypothesis on that.

The Chairman: Okay. Now—

Mr. John Finlay: I understand your point now.

The Chairman: —the Auditor General and his question.

Mr. Grant Wilson (Principal, Audit Operations Branch, Office of the Auditor General of Canada): Yes, Mr. Chairman, when we talk about the issue, certainty as a general sense is not strictly limited to litigation, that is, we're not questioning that there has been certainty established with respect to rights to land—at least to this point in time. But the lack of litigation to date over title may not be too surprising given the relatively short time span, for instance, of the settlement of most claims.

However, we know, for instance, that the Cree of James Bay and northern Quebec have commenced litigation relating to numerous provisions of their agreement, including those relating to aboriginal and treaty rights. So the issue is one that's broader than the legal interpretation of certainty, as Mr. Serson had indicated, where you end up with different people believing different things about the same agreement and you end up with implementation problems. As he rightly indicated, there has been litigation in this area. Ultimately that leads to dissatisfaction.

We're concerned about the broader question: is certainty really being enhanced? Is uncertainty being minimized? Obviously it will never be eliminated. Is it being minimized to an extent that the intent of the agreements, that is, economic development, the well-being of aboriginal peoples, and better understanding of individuals, will occur?

The Chairman: Thank you, Mr. Wilson.

Mr. John Finlay: Maybe we'll have to take more time, sir, to do it right the first time.

The Chairman: Back to Mr. Scott for four minutes.

Mr. Mike Scott: Thank you.

Can you confirm that the cost for implementation on the Nisga'a treaty is a minimum of $30 million? I'm under the impression that there has been a commitment made to the Nisga'a people already by the federal government for a payment of $30 million over a period of a couple of years.

Mr. Greg Gauld: Yes.

Mr. Mike Scott: And that's outside of the $190 million that's been committed within the treaty itself. These are additional funds.

Mr. Greg Gauld: Yes. It's about $30 million for transition costs, implementation costs.

Mr. Mike Scott: Given the Auditor General's criticism that there are no budgets, you would at least agree with me that if it's going to cost $30 million to implement Nisga'a and you extrapolated that number across the province, given the aboriginal population and the number of treaties, we would be looking at something in the area of $1.5 billion for implementation alone for treaties in British Columbia?

Mr. Greg Gauld: One, I don't think it's possible to do a straight-line extrapolation. It depends on the size of the group; it depends on what they have to implement.

Nisga'a is a rural, isolated group. There are particular aspects of that which enter into the implementation costs. If you were to deal with a smaller group in an urban area, it could be quite different.

Mr. Mike Scott: Given the fact that there are about 5,000 Nisga'a and about 130,000 aboriginal people living on reserves in British Columbia, or given the fact that if you want to go on a treaty-by-treaty basis there are at least 50 more treaties to be negotiated, I think the extrapolation wasn't that far off. I'm not sure how many aren't in negotiation that could be there. That's the sort of number we don't have an answer for.

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But it's very clear that these are big numbers. If, for example, you take the Nisga'a treaty as having a value of $500 million according to the federal and provincial governments and you extrapolate those numbers, the treaty process in British Columbia at the end of the day—in my simple little mind—is going to be about $15 billion.

The Chairman: Any comment, Mr. Serson?

Mr. Scott Serson: I can't verify that. I don't know how Mr. Scott arrives at that.

Mr. Mike Scott: Since the department can't give us or won't give us any— I'm not convinced that the department doesn't have its own internal information and projections, which it will not share with us. I'd like to know whether in fact that's the case. And I'd like you to answer that question.

Mr. Greg Gauld: I'm not aware of an internal projection of the costs of settling all the claims in British Columbia.

One aspect that should be noted, though, is that there are costs and there are also benefits. There are benefits through certainty in the economic development and voidance of issues that will otherwise occur—

Mr. Mike Scott: Sir—

Mr. Greg Gauld: —and also the increasing self-reliance of individuals who—

Mr. Mike Scott: But with respect to those benefits, that's a political argument that we're having right now. And you know that the forest industry people in British Columbia just recently said they don't see any economic benefits in this treaty and they're very concerned. There's no certainty as far as they're concerned. The mining industry has privately told me the same thing.

So that's a political argument that we'll have. I don't accept that. What I'm trying to do is to get at the cost. We'll leave the discussion on benefits to another day. What's the cost of this? If you dispute my numbers, I'd like to see yours. My numbers are $15 billion to resolve claims plus $1.5 billion for implementation—plus who knows how much for negotiations? We don't how many more years this will take. We've spent $90 million so far and we have nothing.

The Chairman: Let's have a response from Mr. Serson.

Mr. Scott Serson: My only quick response, Mr. Scott, is that we haven't done those projections. That's not to say that in regard to those projections we won't eventually turn to them and ask those questions, but to start making those kinds of projections on the basis of one treaty would not be reasonable, to my mind. We have a lot more work to do in British Columbia until we know— We have one group in the northern part of the province, and we're going to go into urban areas. There is a variety of factors that is going to be important in making those projections.

The Chairman: Thank you, Mr. Scott.

Mr. Serson, I'm looking at the opening statements. You talk about the difficulty in determining the value of land in certain areas. I'm wondering how you involve the value of land in these settlements. I think of Voisey's Bay, for example. A few years ago its value went up many thousandfold because of what we found there. And in regard to diamonds in the Northwest Territories, the value has gone up manyfold because of what we found there.

Had we settled these treaties before we found these minerals, the settlements would have been vastly different. Why are we trying to evaluate these pieces of land and bring them into land settlement claims when we know that if we find something like Voisey's Bay or the diamonds in Northwest Territories that whole calculation is likely right out the window?

Mr. Scott Serson: I'm not sure what you're suggesting, Mr. Chairman.

The Chairman: For example, had we settled the land claim title in Voisey's Bay before they made the discovery, the settlement would have been peanuts compared to what it is going to be now.

Mr. Scott Serson: Yes.

The Chairman: That would have caused the whole agreement to be reopened and renegotiated. You're saying it wouldn't have?

Mr. Scott Serson: No. An agreement is an agreement.

The Chairman: Therefore, you're saying that for land in Voisey's Bay, which is extremely valuable because of its mineral content, which we now know is there, we're going to make a huge settlement to the people in that area. But we're going to make a minimal settlement to someone else who does not have minerals in their land?

Mr. Scott Serson: But we have to look at the situation. If you ask us, Mr. Chairman, there are risks on both sides when we make land selection.

The Chairman: I know there are risks on both sides, but I'm saying that if you find that some land is extremely valuable from our economic point of view, we have to pay a large settlement.

Mr. Scott Serson: Oh, I see. No. We factor the value of the land into the settlement.

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The Chairman: But I'm trying to find out how you factor in the value of the land, because obviously in Voisey's Bay we're paying a huge amount of money—perhaps rightly so—because of the value of the land. Or are you just taking the surface value of the land?

Mr. Gauld, you're shaking your head.

Mr. Greg Gauld: Maybe I can explain. The basic principle of treaties is that they're forward-looking. We don't go back and try to assess what the value may have been of the aboriginal rights of a particular group. We work on the general basis of a fair and comparable package for groups settling across the country.

Now, in establishing that package and the value of the package, it is important for us to have the best idea possible of what the components might be worth so that the overall package value is comparable in some sense, including the non-monetary aspects, to settlements arrived at in other parts of the country—so that there is fair treatment of groups.

A group that happens to be sitting on a vastly richer piece of land won't necessarily get a settlement that is richer than that of another group in the country, but the value of that land may determine the amount of land which goes into that settlement. It's also a trade-off here. There is the value of the land that goes to the aboriginal group, which may change over time and become more valuable or less valuable. There's also the value of land that is freed, then, from claims of aboriginal rights, which is available on a more certain basis to other parties. That value may go up or down over time as well.

Mr. Scott Serson: That's a principle. Mr. Chairman, in our policy, overall fairness of settlements must be ensured.

The Chairman: Well, I'm not sure that I understand your definition of fairness, because land value, to me— If you're talking about the mineral rights that may or may not have been discovered, it will change the land, and you've already acknowledged that you haven't given us a definitive answer as to whether these treaties can be opened again, even though you feel or hope that they are final.

I turn now to the article within The Globe and Mail a couple of weeks ago regarding the Hobbema reserve in Alberta—which is not too far from my area—and the fact that they already have oil rights and so on and are an extremely rich reserve because they have all this money flowing to them. And yet, some of them are absolutely and totally destitute. What provisions are you building into these treaties to ensure that everybody participates in the wealth of the reserve, not just some?

Mr. Greg Gauld: In the traditional historic land claims, there were settlement trusts set up to ensure that the money was used for the benefit of the beneficiaries, whether it—

The Chairman: But that obviously doesn't work in Hobbema.

Mr. Greg Gauld: No. Hobbema, I think, is an area covered by historic treaty, which is probably a turn-of-the-century treaty. I'm not sure which one—

The Chairman: From 1870, I believe.

Mr. Greg Gauld: It's Treaty No. 6 in Hobbema. Those were six- or seven-page treaties, which didn't contain the precision, the guarantees and the safeguards that current modern treaties contain, so I can't really speak to that. I'm not sure what provisions, if any, were in there.

The Chairman: Getting back to Mr. Scott's—

Mr. Greg Gauld: In modern treaties, we do have provisions to ensure safekeeping and fair use of the assets.

The Chairman: Do you also ensure that there is transparency of the accounting and accountability of the government of the reserve so that financial statements are published to ensure that everybody is held accountable?

Mr. Greg Gauld: Certainly as a result of the more modern treaties since 1995, we also negotiate self-government, and part of the treaty will be the self-government provisions and a constitutional requirement for the aboriginal government to have a constitution. We would have certain requirements of that constitution. In fact, they are requirements similar to the principles that you're stating—transparency and accountability to the members of that aboriginal—

The Chairman: So why can't we get access to financial statements?

Mr. Greg Gauld: I beg your pardon?

The Chairman: Why can't we get access to financial statements of these reserves?

Mr. Greg Gauld: When you're speaking of reserves, you're speaking of groups under the Indian Act regime. They are not the groups that are under modern treaties. There are no reserves in any of the modern treaties, so if you're speaking of bands on reserves, it's the Indian Act.

The Chairman: So you're saying that you're renegotiating that whole thing and you're bringing transparency and accountability into play as well?

Mr. Greg Gauld: Where we are negotiating new treaties and self-government treaties, we are bringing transparency and accountability into them.

The Chairman: You also negotiated a settlement in my constituency at the Alexander reserve, where they were given $10 million to buy up some surrounding farmland. There was a vote on the reserve. My constituents around the reserve were extremely upset that they were never even consulted in the process until it was a fait accompli, and I had to have two town hall meetings to ensure that the people were fully informed about what was transpiring.

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And I think we had a commitment out of the negotiators that from then on they would ensure that the people in and around the reserve were fully informed of what was going on, because they're going to have their farms bought up and so on with taxpayers' money.

Do you have a commitment now to ensure that people around a reserve who may be affected by negotiations are fully informed and perhaps even have their opinions sought as we have a vote on the reserves?

The Chairman: Do you want to come to the table and introduce yourself, please?

Ms. Paulette Panzeri (Director, Negotiations Directorate, Specific Claims Branch, Department of Indian Affairs and Northern Development): My name is Paulette Panzeri. I'm with the specific claims branch in the Department of Indian Affairs.

The claim to which you're referring is a specific claim. It was a treaty land entitlement that is a fulfilment of a historic treaty, in this case, Treaty No. 6, in which the first nation didn't receive the amount of land that it was supposed to under the terms of treaty. Part of the specific claims policy is that, generally, third-party interests won't be affected. In this particular case, which was a tripartite negotiation with Alberta, Canada and the first nation, Alberta has responsibility under the—

The Chairman: My question was, are you going to involve the local people?

Ms. Paulette Panzeri: If I could just finish— It's a tripartite negotiation in which Alberta has responsibility as well. I understand that there were two town hall meetings in which Canada and the provincial negotiators were involved. Land that would be purchased under the terms of settlement would be purchased on a willing buyer/willing seller basis. It is our practice in negotiations to talk to the surrounding municipalities and constituents of MPs and MLAs in the area, just so they're aware of what process is happening. But certainly, in that sort of policy, people aren't dispossessed.

The Chairman: I appreciate they're not dispossessed, yes, but they were certainly quite upset at the lack of involvement in the process.

We'll now turn to Mr. Mahoney.

Mr. Steve Mahoney: I just wanted to follow up. This is not an analysis of Nisga'a, but since there were a lot of questions about it— You talked about benefits. My understanding—correct me if I'm wrong—is that there is a real tax benefit in this treaty, if not immediately, then down the road, in that the Nisga'a people will in fact become full taxpayers under the terms of the agreement.

And I wonder if my understanding is accurate and if we have other treaties where we have achieved that level of success. Just let me add that the reason I ask it is that the one question I think non-native Canadians always have difficulty with is this one: why don't native Canadians pay any share of the tax burden? So it seemed to me like this was a fairly major item for Canada to negotiate. Am I reading it correctly?

Mr. Scott Serson: First, Mr. Mahoney, I want to say that I think it would be unfair if we didn't say that native Canadians do pay taxes. They're exempt from taxes on money earned on the reserve, but otherwise they are taxpaying citizens.

I'll go to Mr. Gauld with your specific question.

Mr. Greg Gauld: The Nisga'a have agreed, as part of the overall settlement, to give up their tax exemption with regard to both transaction taxes and other taxes, including income tax in general. There is a transition provision for this set out in the treaty; it will take place over a period of time. And there will be, in that sense, a level playing field. They will pay taxes like their neighbours.

There is a provision in the Yukon final agreement as well, where Yukon first nations will give up their tax exemption.

Mr. Terry Henderson: It actually entered into effect on February 14, 1998, but there was a remission order in place with respect to income tax, so income tax will begin to be collected on January 1, 1999, from all status Indians in the Yukon.

Mr. Greg Gauld: And I should point out as well, for instance, that the Inuit traditionally pay taxes, the Inuit in Quebec and in Labrador and in the north. The Innu in Labrador, with whom we're already negotiating, pay taxes already.

Mr. Steve Mahoney: Obviously there are a lot of misconceptions on that particular issue. I've been approached in the past by people in the building material business who claim that certain reserves get an unfair advantage in that they can sell tax-free, basically, off the reserve, whereas these businesses selling building materials in a neighbouring town would not be able to do that.

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That's just a reality of that particular situation, but I wonder if there's a compendium or a list or some kind of communication vehicle that you could get to members of this committee and to all MPs about that information so we could share it with our constituents.

Mr. Scott Serson: We could have a look, Mr. Mahoney. It's probably more Revenue Canada's business than it is ours, per se, but we could have a look and see.

Mr. Steve Mahoney: Either way, it's kind of our business.

Mr. Scott Serson: Yes.

The Chairman: Thank you, Mr. Mahoney.

Mr. Scott.

Mr. Mike Scott: Thank you, Mr. Chairman. Maybe I could direct this question to the Auditor General.

Are you aware that the department is intending to reopen and renegotiate treaties outside of British Columbia, where there are no treaties at the present time?

Mr. Grant Wilson: No, Mr. Chairman, we're not aware of that.

Mr. Mike Scott: Oh. Well, I think you heard from the previous conversation that this is in fact the direction the department is taking. That was confirmed to me in a committee meeting here about two weeks ago; departmental officials confirmed that. I'm kind of surprised that they haven't made you aware of it.

The Chairman: Mr. Scott, perhaps we could just get confirmation from Mr. Serson, because we don't have that testimony on the table here.

Mr. Mike Scott: Okay. Maybe I could ask Mr. Serson. I thought he confirmed that a few minutes ago, but I'll redirect to him.

Can you confirm that you are in fact signing memorandums of understanding— For example, can you confirm that you are signing with Treaty No. 8 right now to reopen that treaty and renegotiate it?

Mr. Scott Serson: Treaty No. 8 is a unique circumstance. I'll ask Greg to speak to it, Mr. Scott.

Mr. Greg Gauld: At the moment, we are negotiating with the Treaty No. 8 people in the Northwest Territories. There are very specific reasons for doing this. There is certainly a assertion on the part of the aboriginal groups—and some evidence—that Canada may not have fulfilled, for various reasons, certain key treaty obligations up there, such as the provision of reserves—for various reasons, and in part because they weren't requested.

In order to deal with that, we have two vehicles. One is through specific claims. Another vehicle is through negotiating a modern treaty which would pick up and provide some continuity with the old treaty, but which would be implementable according to present conditions. You have to remember that Treaty No. 8 was negotiated in 1899. In fact, the centenary will be next year. This was a policy decision taken some time ago under a previous government, which has been continued.

Mr. Mike Scott: Would you not agree, then, that if you are in fact opening up Treaty No. 8 for discussion and negotiation there's going to be a tremendous amount of pressure placed on the department to renegotiate other treaties?

In fact, if you look at the treaties that were arrived at in the Northwest Territories, in the Yukon, and now in British Columbia with the Nisga'a agreement, would you not agree that aboriginal people in other parts of Canada are going to look at those treaties and say there's so much disparity between what the Nisga'a got, for example, and what they have in their historic treaty, that their historic treaties don't make sense? They're going to say, “We either have to renegotiate or take the department to court to arrive at parity with the people who negotiated modern treaties.” Do you not agree that's possible?

Mr. Scott Serson: To be perfectly honest, Mr. Scott, I doubt that. If you're talking about the historic treaties, then I acknowledge that we have a problem. There is a very fundamental difference of view between ourselves and first nations about what those treaties meant. We continue to search for a way in modern society to bridge those two realities and to find a new relationship.

My feeling is that aboriginal peoples who have negotiated treaties are very committed to the basics of those treaties. As the Auditor General has pointed out, we get into difficulties where we haven't been clear on the terms and the nature of the implementation. That's where we're being taken to court. I don't think that anybody has come to us and said, “open up the treaty”, per se.

Mr. Greg Gauld: There are provisions in all treaties, of course, that where all parties agree, they may amend the treaty. Those are normal provisions, because circumstances 100 years from now may change. Maybe some need to do this—that all parties can agree on—but there's no guarantee to any party that they can get a reopening.

The Chairman: Thank you, Mr. Scott.

Mr. Mayfield?

Mr. Philip Mayfield: I just have a couple of questions and then a final one to the Auditor General, Mr. Chair.

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In the latest performance report that just came out, on page 45 there's a heading,“How Does This Achieve Value for Money?” In a highlighted box, you begin by saying, “Negotiating claim settlements is a very sound investment of time and resources”. The question I have is, inasmuch as you are unable to really talk about the amount of money that's going to be spent in these settlements, how can the minister who signed this off say that this is a “sound investment”? You must have some rationale for saying that. Could you tell me what that is, please?

Mr. Greg Gauld: As I mentioned earlier, in many cases these agreements have cleared the way—or dealing with these rights through a treaty has cleared the way—for major economic developments. One that I didn't mention earlier, and should have mentioned, of course, is the first modern treaty, the James Bay agreement, which opened the way for the development of hydroelectric potential in James Bay. That's a clear case: without it there would not have been that economic development.

I think we're certainly seeing that obstacle being dealt with in the Voisey's Bay case and in others. There are many more minor economic developments where it's important to bring some certainty as to title and rights, so that people know when they go in and plan an investment there is some certainty they will have those rights that are required to proceed with the investment.

Mr. Philip Mayfield: I hesitate to ask because I've heard so many departments come and say that this is what they're going to do, but do you have an intention or a plan to develop these kinds of budgets for the costs and the benefits so that Canadians can have a look and see what's involved?

Mr. Scott Serson: There are a variety of issues, and I think for some of them we need to go back to the Auditor General and get a clearer sense of what he thinks would be wise. The one thing I take from his report is that we should be doing an evaluation of the costs and benefits of individual treaties, and that's a recommendation we take seriously and we believe we should be looking at. I don't know what the costs of those kinds of evaluations are going to be, so I hesitate to make a commitment to that here today, but I think it's one of the positive suggestions or recommendations in his report.

Mr. Philip Mayfield: One little other area of accountability that I'd to touch on is in the Auditor General's report. It mentions that before the settlements are signed off on, what we might have expected, which is a review by the justice department, has not taken place. Is this an oversight? Is this planned? I would think the justice department would be a partner right up there in the lead with you on this. How could that not have taken place?

Mr. Scott Serson: Mr. Mayfield, this is one that puzzles me, and again, we're going to have to talk to the Auditor General about it. Maybe it's a difference of perspective. Our view is that the justice department is with us every step of the way. In fact, when we go to cabinet for final approval of an agreement like the Nisga'a agreement, the agreement is there attached to the document, and all central agencies turn to the justice department and ask, “Do you agree? Do you have any problems with this agreement?” If the justice department were to say no, the document wouldn't go ahead to cabinet.

So from that point of view, we believe the justice department is on side and is part of the process every step of the way. The Auditor General seems to be saying that he would like the security of seeing a kind of an overall assessment on file. I think we need to talk to him about why he sees that as necessary and what it adds to that already very comprehensive cabinet process. We're prepared to look at it, but the justice department is there every step of the way.

The Chairman: One last question, Mr. Mayfield.

Mr. Philip Mayfield: I'd like to just ask the Auditor General about that and about another thing that would perhaps cover more of the scope of my questions this afternoon.

In beginning your report, sir, in 14.25, you observe that the federal government largely controls the approach used for the settlement of claims.

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However, in paragraph 14.24, you say with respect to land claim negotiations that the government has financial, technical and legal resources available to it that are greater than those of many aboriginal communities. And you mention in 14.26 that the department must represent all Canadians, yet it has certain responsibilities towards first nations. Then you conclude in 14.26 by saying that “it may be optimistic to expect all parties to conclude that the process and outcomes” of land claims negotiations “were fair”.

Given this, sir, how can the current land claims process produce outcomes that are going to be satisfactory to all the parties?

Mr. Denis Desautels: Mr. Chairman, the issue that we raise in our chapter, particularly in 14.26 and the paragraphs around that, deal more with the perception of fairness by the parties. We would, I guess, conclude that if different parties sign an agreement at the end of a long process, it's because they're convinced, in the end, that it's fair.

But there is a perception that in getting there the resources available to each aren't equal, and I guess DIAND has to do whatever it can to make sure that perception is minimized. I know DIAND provides resources to the first nations to do their research and argue their cases. I think what we're talking about here is a question of making sure that the first nations are convinced that the help they're getting is sufficient to argue their case in front of a fairly powerful party.

It's more a question of perception and basically a suggestion that everything be done to make sure that perception is minimized.

Mr. Philip Mayfield: Could you just clear up the question that I asked about the justice department's involvement, sir?

Mr. Denis Desautels: In the chapter, we do give examples of some difficulties that have been noted by the justice department before an agreement was finalized. If you look at paragraphs 14.53 to 14.57, we do give some evidence of that.

We're quite ready to discuss this further with the department if it isn't clear, but I think what it comes down to is that these negotiations, as we've all said, can be very protracted and can last a long, long time. And over the course of time, there can be all kinds of different people involved in the file, both within DIAND and with respect to the people coming in from the justice department.

So I guess what we're arguing for, because of the length of time and the different parties involved, is a precaution at the very end for a final checkpoint, to make sure that there's full agreement by the justice department on whatever has been done up to that point. We give examples where this hasn't been done and where it has led to some difficulty, but we're quite ready to discuss this further with the department if it's not clear.

The Chairman: Thank you, Mr. Desautels.

Mr. Philip Mayfield: I'd like to thank all the witnesses, Mr. Chairman.

The Chairman: I just have two little questions, one to Mr. Serson.

You mentioned that you really don't have a figure down the road as to how much this is going to cost us, but I think in the public accounts it's about $6 billion to $8 billion for claims that have been quantified so far, and there are hundreds more to come down the pike. Don't you think it would be beneficial for Canadians if you gave us some idea of what it's going to cost us?

Mr. Scott Serson: I think in responding to Mr. Scott I said that we have to continue to work on that kind of figure, probably by regional area, Mr. Chairman.

The Chairman: The other point I want to make is that you tell you us you feel these agreements are final—full and final and fixed and everything else—but you are certainly less than confident in light of the Delgamuukw case that these cases cannot be reopened, and I was disappointed to find that you would suggest otherwise.

Mr. Scott Serson: I'm sorry.

The Chairman: And I know you didn't answer the question, but are we sure that these agreements are final, even in light of changes in Supreme Court decisions?

Mr. Greg Gauld: Yes. It's our assessment, with the justice department, that such is the case.

The Chairman: Okay. That's what I wanted to hear.

Mr. Scott Serson: I thought we were talking about anticipated litigation across the country, Mr. Chairman. I apologize.

The Chairman: My question was, can we expect a challenge based on the Delgamuukw decision by the Supreme Court such that these agreements are reopened? That was my question.

Mr. Greg Gauld: No.

Mr. Scott Serson: We don't believe so—for the modern treaties.

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Mr. Greg Gauld: And the litigation that the deputy minister is speaking about is litigation from groups who are not the parties to a settlement, in almost all cases that we're aware of at this point—based on Delgamuukw.

The Chairman: We'll now turn to the closing remarks by the Auditor General, please.

Mr. Denis Desautels: Mr. Chairman, in our chapter, as you know, we raised a number of issues that were discussed today. I'm quite happy that they were covered today, but I think three of the areas that we raised have to be pursued further.

There is the question of disclosure of all of this activity to Parliament. I think if you look at some of what's being published through the estimates and through the performance reports there's good information, but this is an area which is constantly evolving. I think there's room for keeping up with the latest activity. Given the importance of this, I would say that we have to work harder on better disclosure of this activity to Parliament.

I believe there is also a need for greater rigour in the negotiations, particularly with respect to the utility of the land that is subject to the negotiation.

Finally, the third very important point is the whole issue—which a number of members brought up—of the economic development possibilities, and an assessment at some point, over a certain period, over a certain part of the country, of the results of the settlement of these claims.

We don't want to be difficult about this. We'd like to be reasonable, but I think members have expressed today the curiosity about what the benefits are. And I think we heard right away that there are very clear benefits here and very clear benefits there. I think it shouldn't be too difficult to put together a meaningful story for members of Parliament.

Those are three areas that I would hope would be picked up in the action plan that the department has indicated it would prepare, and I think that should be the basis for following up on the recommendations we made and on the discussions at this hearing.

The Chairman: Thank you, Mr. Desautels.

There will be a steering committee meeting immediately, so I will ask for the room to be cleared fairly quickly, please, and I'll ask the members of the steering committee to remain.

The meeting is adjourned.