Good afternoon, everyone.
I would like to call this meeting to order.
Welcome to the fifth meeting of the Standing Committee on Indigenous and Northern Affairs.
We're meeting to continue our study on barriers to indigenous economic development, and today we have two panels.
On the first panel we have Minister Hajdu, Minister of Indigenous Services Canada, and Minister Vandal, Minister of Northern Affairs.
Supporting the ministers in their appearances today are the Canadian Northern Economic Development Agency, the Department for Crown-Indigenous Relations and Northern Affairs, the Department of Indigenous Services, the Federal Economic Development Agency for Northern Ontario and Prairies Economic Development Canada.
The second panel will consist of Adam Jourdain, deputy executive director of the Corporation développement économique Nikanik,
Dawn Madahbee Leach from the National Indigenous Economic Development Board and Clint David from the Nunasi Corporation.
I want to ask everyone on site to comply with the health measures. We're very familiar with them.
Today interpretation services are available in English, French and Inuktitut. If interpretation is lost, please inform me immediately. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or alert the chair.
For members participating in person, proceed as you usually would when the whole committee is meeting in person in the committee room. Before speaking, please wait until I recognize you by name, and when speaking, please speak slowly and clearly. When you are not speaking, your mike should be on mute.
I'll remind you that all comments by members should be addressed through the chair.
Each minister is invited to speak for five minutes. This will be followed by a round of questions.
The first round of questions will allow members six minutes each. The order and the time for questioning for subsequent rounds will be as follows: Conservative, five minutes; Liberal, five minutes; Bloc, two and a half minutes; New Democratic Party, two and a half minutes; Conservative, five minutes; and Liberal, five minutes. If time expires during the round of questioning, we will complete the order.
I would now like to invite Minister Hajdu to start us off.
Thank you very much, Mr. Chair and members of the committee. This is my first appearance before the committee, and I'm honoured to be here with you.
I'm joining you today from the Robinson-Superior Treaty territory, specifically Fort William First Nation traditional territory. Of course, many contributions were made to this area over generations by Métis people.
One of this government's highest priorities from the outset has been to build a renewed relationship with indigenous peoples in Canada. I'm continuing to build that relationship. I'm prioritizing equity, truth and self-determination as principles that are integral to a strong and healthy relationship.
Indigenous Services Canada works collaboratively with first nations, Inuit and Métis partners across the country. Our goal is to ensure a consistent, high‑quality and distinctions‑based approach to the delivery of services to indigenous communities.
At the heart of our work is the steadfast belief in substantive equality of opportunity and in outcomes. Canada will be stronger when everyone has a fair chance to succeed, and this includes advancing self-determination through strong economic growth and ensuring that business supports are accessible to indigenous peoples.
All communities need a strong economic foundation to grow and prosper, but we recognize that there are extra barriers to indigenous economic development. I'll talk about some of those barriers here today and ways to overcome them because, to work together on solutions, we actually have to understand what the problems are.
What are these barriers? First of all, lack of access to capital is one of the biggest challenges faced by indigenous businesses and can prevent indigenous entrepreneurs from starting or growing businesses.
To improve access to capital, the National Aboriginal Capital Corporations Association administers the aboriginal entrepreneurship program, which provides about $25 million per year of equity capital to enable indigenous entrepreneurs to obtain affordable commercial loans. The aboriginal entrepreneurship program is also supporting the new $150-million indigenous growth fund. This indigenous-led and designed fund is a key economic recovery initiative, which will provide indigenous businesses with a fully independent source of capital.
Indigenous businesses continue to experience negative impacts due to COVID-19 on top of the barriers they already faced before the pandemic began. While the Canadian Council for Aboriginal Business reported last week that the situation is improving, many indigenous businesses continue to have negative impacts.
To fill gaps in the mainstream COVID-19 economic recovery initiatives, our department has provided indigenous businesses with targeted supports throughout the pandemic. To date, Indigenous Services Canada has allocated approximately $890 million in COVID-19 supports to indigenous businesses. This is on top of its regular programming to support economic development and other Government of Canada supports that can be accessed by indigenous businesses through the COVID-19 economic response plan.
One of its COVID-19 business supports is the indigenous community business fund, which provides support to eligible first nations, Inuit and Métis businesses whose revenues have been affected by the pandemic.
In British Columbia, the fund has provided over $2 million of much-needed emergency support to the St. Eugene Golf Resort & Casino, which is owned by five first nations and is located in Cranbrook. This business is a major tourism anchor in the region and employs over 200 people, including many first nations members. Support from the fund helped to cover the fixed operating costs as well as support costs needed to adapt to COVID and to maintain its assets.
The hotel is now preparing to reopen this spring, and although the tourism sector is still in recovery, funding from the indigenous community business fund has helped support this community-owned business and helped the communities retain jobs.
As I'm also the minister responsible for the Federal Economic Development Agency for Northern Ontario, it's very important to me that the regional relief and recovery fund continue to help indigenous businesses and organizations mitigate the impacts and recover from the COVID-19 pandemic. FedNor has played a critical role in providing meaningful support to indigenous clients in their ongoing planning, community economic development and capacity-building efforts.
Indigenous Services Canada has also made investments to help indigenous communities offset own-source revenue losses due to the pandemic. The own-source revenue and indigenous communities initiative has helped to partially offset declines in own-source revenues so that first nations, Inuit and Métis communities can continue to provide core community programs and important services to their members.
Our department has also been very active in working to reduce barriers faced by indigenous businesses when it comes to participating in federal procurement. In August, 2021 we updated the procurement strategy for indigenous businesses and announced a new government-wide mandatory procurement target to ensure that a minimum of 5% of the value of federal contracts are awarded to businesses owned and led by indigenous individuals.
We will continue to work with indigenous partners to develop a longer-term transformative approach to indigenous procurement.
Businesses established in the indigenous community may also face a lack of access to land and proper infrastructure. Indigenous entrepreneurs may have trouble finding physical space to conduct their business and accessing business networks. In addition, they may have unreliable access to electricity and Internet connections. Lastly, they may face challenges in getting goods to market given the remoteness and poor or unavailable road infrastructure. These are complex issues.
Our government is working closely with indigenous people and organizations across the country to address the root causes of these barriers and to improve overall economic networks.
Thank you. It's good to be here.
I'm speaking to you from my constituency office in Saint Boniface—Saint Vital in Winnipeg, homeland of the Métis Nation on Treaty 1 territory.
Thank you for inviting me to appear today to discuss indigenous economic development.
I'm joined by Paula Isaak, president of the Canadian Northern Economic Development Agency; Serge Beaudoin, assistant deputy minister of Northern Affairs; and Mohan Denetto, executive advisor for Prairies Economic Development Canada.
As , I had the opportunity to listen to indigenous partners tell me about the barriers that they face in terms of economic development.
Access to skills development and educational opportunities is often limited by infrastructure, connectivity, housing, and so on. Our government continues to make progress in eliminating many of these barriers. I'd like to provide a few examples.
Access to high-quality education for young people is critical not only to individual success, but to local economies and Canada as a whole. This is an issue that's personal to me from my days as a Winnipeg city councillor where I led the development of the aboriginal youth strategy, which was the first of its kind in Canada, and as a social worker and youth worker with the Mamaweyatitan Centre in downtown Winnipeg.
We're making new investments in education in the north. We've provided funding to construct a new science building at the Yukon University and to transform Aurora College into a polytech university as a well as investing $13 million for the Dechinta Centre for Research and Learning. I have also announced a task force on post-secondary education, which will provide recommendations on ways to close the gaps in education and skills development that exists between the north and the south.
CanNor has been particularly important across the territories for indigenous businesses. Over the last three years, CanNor has provided over 60% of its funding to indigenous recipients. In Nunavut, CanNor has invested in small-scale fisheries development projects, working in partnership with the hunters and trappers associations. The project supports exploratory inshore fisheries research to develop community-owned commercial fisheries in three hamlets.
In the Northwest Territories, we have invested in the Cheetah Resources Nechalacho rare earth demonstration project, which supports sustainable resource development in collaboration with the Det’on Cho corporation, which is the economic arm of the Yellowknives Dene First Nation.
In Yukon, we're supporting a local indigenous-owned company, Grandma Treesaw's Bannock and catering services, in a one-year project to export dry bannock mix to the United States.
Our government is working with partners to manage and remediate northern contaminated sites that will promote employment, training and business opportunities for indigenous nations and northerners.
Indigenous businesses in the prairies face unique challenges. We are delivering investment programs to foster economic growth and prosperity. The indigenous business development services, IBDS, provides early-stage support for new and existing indigenous entrepreneurs and business organizations.
The Arctic Gateway Group in Manitoba is helping maintain operations of the Hudson Bay Railway located in Churchill, Manitoba. Approximately 70% of their employees are indigenous.
Recognizing that there is much to be done, we know that economic diversification and innovation are key elements to resilience and reconciliation. To achieve this, indigenous partners have to be at the table. This is why we have launched the Arctic and northern policy framework. Together, we're developing long-term opportunities to protect the north's rich natural environment, build healthier communities, respect the rights and interests of indigenous peoples and support a diversified, sustainable and dynamic economy for the north and the Arctic.
Once again, thank you for the opportunity to appear before the committee.
I'll be happy to answer your questions.
Qujannamiik. Merci beaucoup. Thank you.
Good afternoon, witnesses, and thank you, ministers, for agreeing to appear before the committee today on this very important topic. As we've heard at committee and as you've pointed out in your remarks, we can never truly achieve reconciliation with indigenous people without addressing economic reconciliation.
So let's start there. We've had witnesses in the last little while tell us more about that in our first study, and how there needs to be a focus on the indigenous economy, procurement, business programming and access to market.
With that in mind, Minister Hajdu, when we're talking about business recovery programs and the aboriginal entrepreneurship program, according to your departmental results report document released earlier this month, your departmental goal was to increase indigenous businesses created and/or expanded by a modest 2%. It was missed by minus 6.92%. I do note that, under the explanation, the net number of businesses created may still show a decline due to closures of many indigenous businesses, but it is expected to rise again as some of these temporary measures are lifted.
With that in mind, Minister, can you tell us when your government will finally have a plan in place to end federal mandates and restrictions so that indigenous businesses can recover and thrive?
Another area of concern, Minister, with respect to data, appears in the results in the percentage of first nations communities where non-federal government revenues represent 25% or more of total revenues. Your target of at least 18% is dramatically exceeded by 49%, which is quite the accomplishment, until you read the actual caveat, which states:
Due to gaps regarding available data and still-evolving impacts of COVID-19; a random sampling has been issued to generate an estimate
Given that sampling has been used to generate that estimate and the difference between this figure and the target.... First of all, I don't think the results are very clear.
Factoring out that the targets to be achieved in the future of 35% or 49% were either not met or available, when are we planning to fix this massive gap, which would then reduce a barrier to indigenous economic development?
Thank you to the two ministers for joining us. I really appreciated the presentation. It was very informative and interesting, for sure.
I've been involved in indigenous issues for most of my adult life, trying to deal with the situation in the community I live in and the communities across the north when it comes to quality of life. I was attending tribal council meetings when I was 17 years old. Some of the issues that we're talking about now are issues that I was talking about then.
A lot of effort has been made to bring back what was lost. We now have 14 tables in the Northwest Territories that are talking about land claims, land tenure, self-governance and compensation. It's all important stuff and we need to right some of the wrongs that were happening to us. We've also made a lot of progress on resource revenue sharing and on mandatory process participation. It's all important stuff.
However, we needed some changes to be made. I was really happy to see the new self-government fiscal policy come into play. It was done in a collaborative approach with indigenous people and it's a good document.
I wanted to ask the minister if she could tell me how that document—they call it the “green book”—covers economic development and how that's going to benefit the indigenous people.
The government has a 10-year, $2.2 billion program to clean up contaminated and abandoned mines throughout the north. Significant investments have been made and will continue to be made. The programs are intended to ensure that the lands and the waters are remediated and are healthy for future generations. When the mines are cleaned up, it's incumbent on us to ensure that the jobs, the procurement and the benefits of the cleanup go to indigenous nations in and around the mines and to other locals who live in the north.
Over the last couple of years, you and I, and who has done a tremendous job on this, have formed a very good partnership with the Yellowknives Dene for the Giant Mine remediation. It was really one of the saddest parts of Canadian history, where the land was mined and the arsenic was simply thrown all over the land and the water and ingested by indigenous peoples. It's a very sad part of Canadian history, which was, frankly, ignored for too long.
We're no longer ignoring it. We're at the tables with the : me; you as a local MP; and most importantly, the Yellowknives Dene. Speaking as one person, one MP, I won't be satisfied until the Government of Canada issues an apology to the Yellowknives Dene.
We're working in partnership. There's great local leadership with you and the Yellowknives Dene. We're going to continue working with the Minister of Indigenous Services, the and the on this very important program.
We have a number of programs that are really targeted at removing those barriers to economic development. There's the entrepreneurship program. We have a community opportunity readiness program, as well as the strategic partnerships initiative. We have a number of programs, really, with the goal of increasing economic activity in indigenous communities in a distinctions-based way.
I would say that the 5% target for the federal government will increase that economic activity by mandating that these government departments procure their goods and services from indigenous-led businesses. As Minister Hajdu noted, 32 departments are part of phase one. As of April 1, 2022, they will be required, and it will be publicly available information, to procure for their department at 5%. Then, over the next three years, we will onboard other departments. At the end of that process, all departments will have that 5%, and we should see an increase in opportunity.
Right now, it is a barrier. It is a challenge. Sometimes we want to hire indigenous businesses, and because they're not on a standing offer, barriers are created that we just need to remove. I think that 5% will really help us get there and make some progress.
I want to thank the ministers and all their support staff for being here with us on a Friday afternoon. I get the sacrifice of that.
I want to follow up a little bit on the conversation with Minister Hajdu.
In your opening comments, you talked about communities needing a strong economic foundation in order to grow and prosper. You talked about advancing self-determination through strong economic growth. Yet in the Speech from the Throne, and in the mandate letters of both yourself and , the only reference to anything on the concept of economic growth, or supporting indigenous people from an economic perspective, was the reference to the aboriginal entrepreneurship program. I've had several conversations with national indigenous organizations, and, frankly, they were quite concerned about this.
In my vast knowledge of two and half years around the Hill—that's a joke, by the way—one of the things I learned is that if things aren't in the mandate letters, if they're not in the Speech from the Throne, then you start to question the level of priorities.
I'm just curious. Economic reconciliation was really left out of all of those documents. How much of a priority is this, really, for the government?
We all know it's a universal principle that the key to a better life is a better education. Unfortunately, for indigenous nations and peoples, because of the effects of colonization and the government policy of beating the Indian out of the person, there have been horrendous effects that have affected education attainment.
As Minister of Northern Affairs, I know our government is committed. First, we've invested tens of millions of dollars through budgets in the past few years. There's been $13 million over five years for the Dechinta Centre for Research and Learning and $26 million over five years for a new science building at the Yukon University.
As important as that, about a year ago, we launched an independent task force on improving post-secondary education in the north, which was part of budget 2019. We have representations from all territories in the north, including the Arctic, northern Manitoba and, I believe, northern Ontario. Their goal and their mandate is to do consultations, talk to the public service, talk to the educators and really give our government some recommendations on what we need to do to improve post-secondary education outcomes in the north. However, it's hard to separate post-secondary from elementary education, because if you don't have a good base, then you're not going to have a good post-secondary system, so it's all connected. In order to have a good base, you need to make sure society is delivering good social determinants of health.
One thing that's apparent is the use of technology. If this pandemic has taught us anything, it is that we need to connect the country. We have a very ambitious universal broadband fund. We want to get 100% of Canada connected by 2030, I believe. That connectivity is so important for education, but also for health, for long-distance health care, which could be very valuable, and for commerce and business. That's something that we're depending on now.
You asked about the aboriginal youth strategy in Winnipeg. That was quite a few years ago. The main idea was that the city of Winnipeg's workforce was aging. We had an aging workforce on this side, and on the other side we had young indigenous people, the fastest-growing population in the city of Winnipeg. We needed to connect the two through mentorships, training programs and co-operative working arrangements, including education systems. I'm a bit out of the loop now as to where that is, but at the time, it was something that landed positively. It's something that our country needs to be doing.
I think the real difference for indigenous businesses is that oftentimes they have a much more fragile financial footprint. That's why our department invested almost $900 million—correct me if I'm wrong, Deputy Fox—to support indigenous businesses through COVID-19.
Just like every other business, we knew that the more businesses that could be supported through a variety of different public health measures, the more they would come out strong at the end, and sustain that economic footprint in communities and regions that really struggle to get those footprints in place to begin with.
For example, one area in which I can say that indigenous people were maybe overrepresented or, at least, were very significantly impacted was the tourism sector. Many indigenous communities have a strong tourism aspect to their economic development. Of course, tourism was significantly impacted through COVID-19.
[Member spoke in Inuktitut as follows:
ᖁᔭᓐᓇᒦᒃ, ᑖᓐᒧᑦ ᐊᐱᕆᒋᐊᖅᐸᓪᓕᐊᖅᖃᐅᔭᒃᑲ ᑲᔪᓯᒋᐊᑐᐃᓐᓇᕐᓗᒍ, ᐱᒋᐊᖅᖃᐅᒐᒪ ᓲᕐᓗ ᓄᓇᖃᖅᖄᖅᓯᒪᔪᐃᑦ ᐅᑭᐅᖅᑕᖅᑐᕐᒥᐅᓪᓗ ᓄᓇᖏᑦ ᐅᖅᓱᐊᓗᖕᒥᑦ ᐊᑐᐃᓐᓇᓲᖑᖕᒪᑕ. ᑕᒪᓐᓇ ᐅᖅᓱᐊᓗᒃ ᐊᒃᓱᕉᑕᐅᑉᓗᓂ ᐊᒻᒪᓗ ᐊᕙᑎᑦᑎᓐᓂ ᓱᕋᒃᑎᕆᕙᒃᖢᓂ, ᐅᖅᓱᐊᓗᒡᓗ ᐊᑭᑦᑐᕆᐊᖅᐸᓪᓕᐊᑐᐃᓐᓇᕐᒪᑦ. ᑕᒪᒃᑯᐊ ᐊᑭᑦᑐᕆᐊᖅᐸᓪᓕᐊᑎᓪᓗᒋᑦ, ᐊᐱᕆᔪᒪᕙᕋ ᑖᓐᓇ ᒥᓂᔅᑕ ᖃᓄᑎᒋ ᐱᓕᕆᐊᖃᓲᖑᖕᒪᖔᑦ ᓄᓇᖃᖅᖄᖅᓯᒪᔪᐃᑦ ᓇᖕᒥᓂᖁᑎᖏᓐᓂᑦ, ᓲᕐᓗ ᑕᒪᒃᑯᐊ ᐱᓕᕆᔩᑦ ᖁᓪᓕᒃᑯᑦ ᐅᕝᕙᓘᓐᓃᑦ ᑭᕙᓪᓕᕐᒥᑦ ᑲᑐᔾᔨᖃᑎᒌᒃᑯᑦ ᐱᓕᕆᐊᖃᕋᓱᒃᑎᓪᓗᒋᑦ Hydro Fibre Link-ᒥᑦ ᑕᐃᔭᐅᔪᒥᓐ.
[Inuktitut text interpreted as follows:]
I will continue to ask Northern Affairs.
In indigenous and Inuit communities, we rely a lot on diesel fuel that damages the environment. The cost of everything is going up while the cost of living is going up and up. I will ask the minister: How are you... Qikiqtaaluk Corporation or Kivalliq Inuit Association when they're working on clean energy. How are you assisting them?
[Witness spoke in Innu as follows:
Kassinu etashiek. Niminueniten anutshish kashikat tshetshi imian, tshetshi uauitaman ne ka ishpipinitakan shuniat.
[Innu text translated as follows:]
Greetings to all of you.
I am pleased to have the opportunity to speak about economic growth.
Mr. Chair, committee members and participants, first, I want to say that I'm speaking to you from the community of Wemotaci on the ancestral territory of Nitaskinan, whose name means “our land,” which is the territory of the Atikamekw nation. I'm Innu from the community of Uashat mak Mani‑Utenam.
I'm delighted to be joining you today to discuss a topic close to my heart: indigenous economic development. I'm particularly interested in economic development. I quickly realized, during my career, that it's the main tool available to indigenous communities to ensure our emancipation and improve our living conditions and the psychosocial situation of our members. Unfortunately, while the concept of economic development may seem simple and applicable to all, clearly, for indigenous communities, there's still a long way to go. For the next while, I'll focus on the topic of this meeting, which is the barriers to indigenous economic development. That said, I want to start by showing that economic development is possible in the communities.
In 2014, when I arrived in Wemotaci, an Atikamekw community of 2,000 people, to take up the position of executive director of the Corporation développement économique Nikanik, the situation was bleak and we were in a deep hole. For example, there had been no gas in the community for over eight months. The residents had to get their gas in La Tuque, which was 115 kilometres away. For the community as a whole—which had no development plan, strategy or goals—the annual project amount was about $250,000 and the development budget of $40,000 barely covered my salary. Limited partnerships were in trouble, unemployment was very high and there were fewer than 10 private businesses.
It took the election of a new council with a clear vision for economic development to start the wheels of progress and to launch new projects that mainly addressed the basic needs of the community. We first installed fibre optics to bring us out of isolation, refurbished the gas station to ensure gas supply, and built a business centre for our entrepreneurs. Most importantly, we developed and implemented a realistic recovery plan with clear and achievable goals.
As a result of this plan, I'm proud to say that we turned things around and helped improve the living conditions of a number of community members. Today, we're talking about $182 million in projects, a $300,000 economic development budget, an ever‑increasing number of stable jobs, 32 private entrepreneurs and a lower unemployment rate. The recovery plan has enabled us to dream big and prove to everyone that, despite lingering prejudices, we can carry out major projects.
Since today is mainly about the barriers encountered, I'll list a few things that, in my experience, hinder economic development in our communities.
The 10% capital investment needed for any new project in an indigenous context is a federal and provincial requirement that doesn't really take into account the financial capacity of communities and individuals. In terms of the search for funding from private institutions, with some exceptions, they're still wary of our organizations.
The administrative burden of the Quebec and Canadian governments is a real obstacle that compromises the fulfillment of many opportunities. Workforce training programs aren't adapted to the realities of potential workers. The remoteness of the communities leads to additional supply costs and inequalities among communities in terms of access to funding programs and allocated amounts. Natural resource development is inequitable.
My time is limited to five minutes, which is really too short.
I'd be happy to clarify each barrier during the round of questions.
I'll conclude by reminding you that we, the indigenous people, have a rich history of trade relations that goes back to well before the arrival of the first Europeans on our lands. We must reconnect with our past instincts and build what I'll call the “Indigenous People Inc.” of tomorrow. However, to do so, we must identify and overcome all the barriers that stand in our way. To this end, governments, financial institutions, civil society and all other entities involved must become facilitators and real partners. This is in everyone's interest.
[Witness spoke in Anishinaabemowin and provided the following text:
Aanii - Biidaabin dezhnikaaz, jiijaak dodem, mnidoo mnising ndoonjibaa.
[Witness provided the following translation:]
Hello. My name is Sunrise. I come from the Crane clan. My homeland is Manitoulin Island in the traditional territory of the Anishinabek Nation.
Meegwetch and thank you for allowing me to speak with you today on the barriers to indigenous economic development.
I'm the chair of the National Indigenous Economic Development Board, which is a ministerial-appointed, non-political organization mandated to provide advice to the federal government on issues related to indigenous economic development.
The board was established in 1990 and is comprised of first nations, Inuit and Métis business and community leaders from across Canada. To help inform your work, I invite you to check our board's website, which includes our series of national indigenous economic progress reports. Our next report will be released in 2023.
I also invite you to review our board's report entitled “Reconciliation: Growing Canada's Economy by $27.7 Billion”, as well as the 2019 OECD report on linking indigenous peoples to regional development, and the upcoming national indigenous economic strategy for Canada. If these reports were implemented, many of the economic barriers would be addressed.
All Canadians have become more aware of the truth of Canada's treatment of the indigenous peoples of this land. While the effects of colonialism have been devastating to the social, physical and mental health of our communities, one of its most nefarious objectives was the deliberate exclusion of indigenous peoples from sharing in the wealth of this country.
I cannot stress strongly enough that indigenous populations continue to face deeply rooted systemic and institutional barriers embedded in the Canadian legal, education, health, governmental and economic landscape.
For Canada to undo this damage, it must be understood that achieving reconciliation will not be possible without vibrant indigenous economies, characterized by economic self-sufficiency and socio-economic equality with the rest of Canada.
Studies show over and over again that when indigenous communities prosper, so do the regions around them. Look at the recent reports outlining the billions in annual indigenous contributions to the economies of Atlantic Canada, Manitoba and Alberta. If indigenous peoples had the same education, income and employment levels and business opportunities as those experienced across Canada, the GDP would increase by $30 billion to upwards of $100 billion annually.
In addition to the reports already mentioned, the NIEDB is recommending solutions that can pave the path to economic reconciliation.
One, ensure that the implementation plan for the UN Declaration on the Rights of Indigenous Peoples Act is co-developed with indigenous people.
Two, formally recognize our jurisdiction and the legal frameworks we are developing to control and participate in development in our territories.
Three, support the development of indigenous-led institutions to help build indigenous economic capacity, share leading practices, and deliver programs and services. Work is already under way for institutes for community infrastructure and indigenous business procurement.
Four, support the network of aboriginal financial institutions with capital to support the growth and expansion of the indigenous business sector, increase employment and provide housing mortgages, and help alleviate the backlog of indigenous housing that currently exists.
Five, increase funding for indigenous economic and business development to 10% of total federal spending on indigenous peoples, in part to make up for past funding shortfalls and to recognize the fact that each dollar spent on indigenous economic development leverages important community and social benefits and enhances regional economies across Canada.
Finally, implement the soon-to-be-released national indigenous economic strategy for Canada, which is a collaborative effort involving more than 20 national indigenous organizations. This strategy is our vision for economic reconciliation and is built upon the four strategic pathways of people, land, infrastructure and finance. The strategy includes calls to economic prosperity that speak to all levels of government, corporate Canada, small businesses, all institutions across the country and our own people.
In conclusion, you have an opportunity to help remove the impediments to indigenous economic inclusion. In addressing the solutions offered, your work requires addressing the disparities of the past, a change of mindset, the political will and real financial investment, which we know will benefit all of Canada.
Meegwetch. Thank you.
Thank you, Mr. Chair; and thank you, members of the committee.
It's a real honour to be here, and certainly in the presence of my dear friend Dawn Madahbee Leach as well, and Adam. You did a great job.
I'll begin by giving you a bit of a background on Nunasi Corporation and then I'll speak to three barriers I see that continue to impede the growth of indigenous business and communities.
In terms of personal background, I am Inuk, Inuit from Labrador and it's an honour for me to lead Nunasi Corporation, which is a storied Inuit corporation, over the last two years. Nunasi is a Nunavut Inuit birthright corporation, owned by two regional Inuit associations and one Inuit regional development corporation. This structure ultimately means that Nunasi is owned by all the individual beneficiaries under the Nunavut agreement, one of whom I think is actually on this committee right now.
It has a very interesting story. In fact, it's the oldest Inuit development corporation in the country. It was started in 1976 by the Inuit Tapirisat of Canada, now ITK, as a vehicle to ensure Inuit participation in the economic opportunity that was expected once Inuit land claims were resolved. It was involved in a variety of different business activities from various industries and some of these operating companies are still around today—in particular, Nunasi's investment in the medical accommodations that are located in Ottawa, Winnipeg, Edmonton and Yellowknife. These facilities, known as “largas”, provide culturally appropriate and safe lodging for those Nunavummiut who require medical treatment in southern hospitals.
Nunasi today is focused on health services, to build on the success of those largas; energy, which includes a focus around the development in renewable energy for Nunavut; infrastructure; transportation; and federal procurement.
Now I'll share with you some of my thoughts on some of the barriers. One is access to equity capital. Indigenous and Inuit business look very different today than even just 20 years ago. The rights that are crystallized in modern land claim agreements, along with the recognition of indigenous rights through successful court challenges, have led to greater engagement of indigenous communities in development activities on traditional lands.
Phrases such as “the duty to consult” and “free, prior and informed consent” have become common parlance in some industries. Impact benefit agreements have created significant value for indigenous communities, including training, development and employment, along with procurement. Some projects are providing opportunities for indigenous communities and development corporations to actually participate in the ownership of the project or a major asset.
Too often, communities just don't have the financial capital to stand shoulder to shoulder with their partner. Traditional lenders generally do not provide loans for equity, so the community will have to either pass on the opportunity or receive support from the partner or another source at a price that is often considered expensive. I think there's a real opportunity for federal Crown corporations and other institutions to provide this capital through a loan mechanism at a reasonable rate. This would enable the community to participate in the opportunity and benefit from the financial upside earlier in the process.
On social procurement, on January 31 of this year, the federal government announced that Nasittuq, a majority-owned Inuit company, was successful in winning the contract for the operation and maintenance of the north warning system. This contract is valued at nearly $600 million for seven years, and if the extensions are awarded, the contract has the potential to be $1.3 billion. The Inuit shareholders of Nasittuq include Nunasi, as well as the regional development corporations across Inuit Nunangat. It's great news for Nunasi and our colleagues, and frankly, it's an example of economic reconciliation at work.
The federal government has made a commitment of 5% to help expand indigenous business, which would represent over $1 billion annually. While the commitment has been made, I strongly encourage the government to move quickly towards implementation and to use the distinctions-based approach to ensure Inuit businesses benefit.
I would also recommend that the federal government consider creating incentives for federally regulated companies to develop robust procurement policies for the benefit of indigenous business. As we've seen in this country, the more successful procurement processes are normally in those companies in the resources sector, which really makes sense when you consider the nature of their business, operating in traditional territories.
However, these best practices should extend to other companies in different industries. Indigenous businesses are diverse, and if given the opportunity, they will meet the procurement needs of these companies.
The last thing, Mr. Chair, I want to comment on is the investment in infrastructure.
In October of 2020, Nunavut Tunngavik Incorporated in Nunavut released the “Nunavut Infrastructure Gap Report”. The report highlights deficits in such infrastructure areas as water, housing, broadband, reliable energy and so on.
The community needs these basic elements of infrastructure to create an environment that is conducive to entrepreneurialism and that can attract investment. There were no cost estimates associated with the Nunavut report, but the most recent funding announcement by the federal government of $4.3 billion indigenous community infrastructure fund, from which Inuit received over $500 million, is certainly a step in the right direction.
However, a 2016 report by the Canadian Council for Public-Private Partnerships identified an infrastructure deficit for first nations only at $30 billion. Seven years later one can only assume that this number is also higher.
Just recently the Inuit Tapiriit Kanatami has calculated that it would take over $3 billion to meet Inuit core housing needs.
So, when you take into account the numbers on housing alone and you add the infrastructure deficit with the first nations, it's easy to assume that the infrastructure deficit for indigenous communities in general is probably closer to $60 billion to $70 billion.
If we want to break down barriers for indigenous economic development, we need to ensure that communities have the conditions that will create a well-functioning economy, and that starts with infrastructure.
Thank you for your time today. I look forward to your questions.
Let me just say what a pleasure it is to listen to this powerful and inspiring testimony from our witnesses.
I'm so glad that you have been able to give your time to us today.
I represent a rural riding in northeast Alberta, and I'm very proud to represent all of the constituents in Lakeland, including nine first nations and Métis communities, which I work with on a regular basis to try to figure out real, tangible ways that we can do things exactly like the things we are talking about today. Of course, it won't surprise you that nearly every community in my region, in that part of Alberta, has a long history of private sector proponent partnership, partnerships with academic institutions and all levels of government to responsibly develop the resources in that area, primarily oil and gas and heavy oil, and they are also the leading contractors and business owners certainly in the service supply area of the industry throughout the region.
I'm always looking forward to hearing testimony like yours as to how we can continue to advance on economic reconciliation. I am inspired by the communities that I represent. They create jobs not only for their own communities but for people all around their communities throughout the region and throughout the province.
I am seized with many of the challenges that you've talked about. These are, primarily, access to capital, capacity building in communities so that they can effectively participate in the regulatory process, and the necessity for the Crown to meet their obligations for two-way dynamic consultation with indigenous communities rather than just checking it off on a list instead of sending a decision-maker to the table, certainly as the last witness was talking about, to rapidly meet the basic infrastructure challenges that hold back indigenous communities.
Adam, I think you wanted to get into this a little bit more. Maybe I'll do a two-for-one and then each of you can address these questions in turn.
I would just love to give you the opportunity to expand in specifics on two fronts. One is recommendations to deal with the risk aversion of the Crown or the government, rolls upon rolls of red-tape barriers that can be reduced, and the other is more specific recommendations for access to capital.
I'll first answer your second question.
Tools already exist. The First Nations Financial Management Act enables us to override the Indian Act, but only financially. In Wemotaci, we decided to adhere to this legislation, which enables us to obtain capital, but only through the First Nations Financial Authority. We then have access to cash flow that helps us develop certain projects, as a result of favourable interest rates. Our most recent interest rate was around 2.3%.
It should be noted that banking or financial institutions are still reluctant to give us funding, even though we've adhered to this legislation. We must always provide justification, which constitutes a barrier. However, we have excellent viable projects that meet the goals of our community.
It's very challenging if the interest rates are close to 7%, 8% or 9% for certain projects. It was already a major barrier to the development of communities, especially remote communities such as Wemotaci.
I hope that I've answered your question.
I'd be happy to speak to your two questions as well.
It was really great to hear my good friend Harold Calla speak about the balance that has to be played between the government's fiduciary responsibility and the fact that there's a lot of risk aversion. One of the things that I feel can help to address that is the path to supporting the development of indigenous institutions. We need to be responsible for our own activity and our own actions.
I really feel strongly that the supports need to be there, as I mentioned in one of our recommendations, to support indigenous-led institutions and centres of excellence. I think those are really critical ways to help remove the issues around the government being worried about the risk of some of the decisions they make. I think our own people are prepared and we have the capacity now to address areas and make those decisions ourselves. I would strongly support that devolution of programs and services and the resources, the full amount of resources necessary, to support indigenous institutions.
I spoke about, and we heard earlier about, the idea of an indigenous infrastructure institute. I think that's really critical as well to addressing the areas of our needs.
In respect to access to capital, I think a couple of things need to be understood. We have a really great success story in Canada that other countries don't have, and that's the aboriginal financial institutions. Those institutions should be supported. No other country has the types of institutions that we have, but they're limited in their capacity. Most of them can provide loans of only up to $300,000 for one project. Well, one piece of equipment costs that. You can't even build a decent building for that amount of money anymore.
So additional capital is really important. We know the success of these aboriginal financial institutions, which have been able to invest $3.3 billion into the Canadian economy through investing in indigenous businesses and helping with the start-up of new indigenous businesses. We have capacity. We'll need that to address the whole procurement issue and to address the contracts we're talking about to reach that 5% procurement target. We need more indigenous businesses and to help build them up so they can compete effectively for a lot of those contracts.
Plus, we need—
In particular, when I'm talking about access to capital, yes, it would be in the form of loans, but it would be specifically for equity.
I just wanted to make a really quick comment on access to capital. In the past, we've seen challenges whereby there are too many communities and development corporations. Even today, there are still challenges for individual indigenous entrepreneurs having access even to debt capital. That's why the AFIs that Dawn talked about earlier are such a fundamental part of the ecosystem to support indigenous business, but they do still have caps. That's a huge challenge.
I think there's a tremendous opportunity there, but not necessarily for the creation of a new Crown corporation. The Business Development Bank of Canada is a perfect example. It has provided a very robust indigenous banking unit, following along the lines of what you see with TD Bank, Bank of Montreal, RBC and CIBC. I think they've done a great job in terms of providing that debt capital to communities and development corporations and even taking on additional risk to support entrepreneurs.
Now, as we move into that bigger realm of having communities looking at participating in large-scale projects or even medium-scale projects, that kind of capital on the equity side is critical. This isn't a brand new thing. This is something that has actually happened in another jurisdiction, namely in Ontario through the Green Energy Act, which I thought was just an absolutely brilliant program. It was the initiative on the part of the Government of Ontario to ensure that it was going to have indigenous engagement with green energy projects. It provided a guarantee to enable financial institutions to lend equity for first nations and Métis to participate. I think something like that would be an incredible opportunity.
Kwe, utshimau Jourdain.
I'm pleased that all the participants here today can shed more light on how to remove barriers to first nations economic development.
Mr. Jourdain, I'm glad that you're here. I admire and appreciate you. I was pleased to hear you speak about Indigenous People Inc. You're an example of empowerment.
You spoke about the situation as it stood in 2014, when you arrived, and the situation as it stands now. You have very concrete and long‑term experience with economic development. We rarely hear from people who are really on the ground. We had ministers here earlier, of course. That said, you're adding to our discussion today.
You said that your speaking time was too short. I would have liked you to elaborate on the issues that concern the federal government. I'm thinking in particular of geographical remoteness, which is a reality for the Atikamekw people, but also for the communities in our area, on the north shore. You referred to the community of Uashat, in Sept‑Îles, which makes up 15% of the city's population. This figure keeps growing, obviously. We could also talk about the community of Chisasibi. This is also the case in Abitibi. In short, all communities are affected.
I'll let you talk about this issue, Mr. Jourdain.
, Mrs. Gill.
For any economic development project, whether it involves building a gas station, homes or buildings, we are at a disadvantage from the get‑go—that's for sure. The costs of transportation and materials are exponentially higher. From the outset, undertaking a project in the community of Wemotaci or Chisasibi, or on the north shore is more expensive than it would be in Montreal or Ottawa, say. That is the reality.
I also mentioned the red tape. We have to submit application after application, and it's a very long time before we here back from departments. It's a constant waiting game, so we miss out on incredible opportunities because we don't have all the tools we need. We need funding support and programs to operate properly and carry out construction projects, whether oriented towards economic development or housing.
At the end of the day, we are dependent on the federal apparatus. Is it possible to decentralize some of that authority? That is the question we should be asking.
Down payments are another factor. In our community, people practically live below the poverty line, even if they work for the council. Someone talked about housing earlier. It's impossible for people in Wemotaci to buy a home because the materials are unaffordable. People can't afford to build a $250,000 home.
We need to think about things differently, and indigenous communities have to be involved in the process, not just Ottawa. I always point to the fact that some indigenous communities are close to urban centres, while others are quite remote. They are two completely different worlds. When the time comes to hand out funding, that reality has to be understood and taken into account.
[Member spoke in Inuktitut as follows:
ᖁᔭᓐᓇᒦᒃ ᐃᓘᓐᓇᓯ ᖃᐃᒐᔅᓯ ᐅᕙᑦᑎᓐᓄ ᐅᓂᒃᑳᕆᐊᖅᑐᕐᓗᓯᓗ. ᑕᒪᔅᓯ ᑐᓴᕐᓂᕆᓵᖅᐸᓯ. ᐃᑲᔪᖅᑐᐃᓐᓇᐅᑦᑎᐊᕐᓗᓯᒡᓗ ᐅᓂᒃᑲᐅᓯᕆᓵᖅᑕᔅᓯᓐᓂ. ᓄᓇᓯ ᑯᐊᕈᕇᓐᑯᓐᓄᑦ, ᑭᓕᓐᑦ-ᒧᑦ ᐊᐱᕆᓂᐊᕋᒪ. ᑖᓐᓇ ᖃᐅᔨᒪᔭᑦᑎᒍᑦ ᐊᐱᕆᔪᒪᒐᒃᑭᑦ. ᓄᓇᖃᖅᖄᖅᓯᒪᔪᐃᑦ ᐱᓕᕆᐊᑦ ᐅᕝᕙᓘᓐᓃᑦ ᓇᒻᒥᓂᖁᑎᓖᑦ ᐃᓱᒪᒋᔭᐅᔭᕆᐊᖃᕐᒪᖔ ᐸᕐᓇᐃᕙᓪᓕᐊᑎᓪᓗᒋᑦ ᐅᕝᕙᓘᓐᓃᑦ ᐱᓕᕆᐊᖃᕋᓱᒃᐸᓪᓕᐊᑎᓪᓗᒋᑦ ᑲᔪᓯᑎᑦᑎᕙᓪᓕᐊᑎᓪᓗᒋᑦ. ᒪᕐᕉᖕᓂᑦ ᐊᔾᔨᒌᙱᑦᑐᓂᑦ, ᐱᖃᑖ ᓄᖑᓱᐃᑦᑐᖅ ᖃᐅᒻᒪᖅᖁᑏᑦ, ᐊᒻᒪᓗ ᐱᖃᑖ ᑐᓴᐅᒪᔪᓕᕆᔨᔾᔪᑏᑦ ᖁᒻᒧᐊᒃᑎᑦᑎᓯᒪᔪᓂᑦ ᑖᒃᑯᐊ ᐅᑭᐅᖅᑕᖅᑐᕐᒥᑦ ᐊᑐᖅᑕᐅᔭᕆᖃᓪᓗᐊᑕᖅᑎᓪᓗᒋᑦ ᐃᓛ ᐱᖁᑎᕐᔪᐊᑦ ᐱᑕᖃᐅᑦᑎᐊᖏᑉᐸᓪᓕᐊᓂᖏᓐᓂᑦ ᐊᒻᒪᓗ ᐊᕙᑎᑦᑎᓐᓂᑦ ᓴᐳᑦᑎᓇᓱᒃᐸᓪᓕᐊᑎᓪᓗᑕ, ᓇᓗᓇᐃᕆᔪᖕᓇᖅᐱᖅᖃᐃ ᑖᒃᑯᐊ ᒪᕐᕉᒃ ᐅᖃᐅᓯᕆᓵᖅᑕᑦᑎᓐᓂ ᒥᒃᓵᓄᑦ
[Inuktitut text interpreted as follows:]
Thank you, all of you.
Thank you for coming here to speak to us about your program. It is very helpful to know more about your organization.
I will ask Nunasi Corporation, to your knowledge, what indigenous-led initiatives or businesses should be considered and included in the planning, servicing and delivery of renewable energy projects in the north, which is very critical for a green transition? We need clean energy in the north because we lack infrastructure. Can you talk about renewable energy projects in the north?
for the question. I apologize on the missed interpretation there, and I appreciate the follow-up.
Very quickly, I think that, when we talk about the transition to green that is happening within this country, the reality of Nunavut and the reality of Inuit Nunangat are probably not necessarily fully considered. We have, obviously, very different construction time frames, very different climate realities, very different geography and so on, but that doesn't mean to say that we should not be given that opportunity to participate in renewable energy. Some of that activity has been taking place right now.
The Government of Canada has provided some reasonably decent approaches through NRCan on what to do in terms of some funding support for capacity building and so on to try to support the development of green energy. In many cases like this, Ms. Idlout, what you will see is a rash of applications coming into a program and all of us trying to fit within a certain deadline, again not necessarily considering the reality of the north.
I think what would be incredible would be to see the federal government pull together its current dollars around green energy as it pertains to the north and have a fund that has a high level of flexibility that would enable indigenous organizations and Inuit organizations to be able to apply. The fund should have a much longer time frame to ensure that those dollars go to fundamental projects that can really be successful.
I want to get down to a granular level, because here we have lofty conversations, which is great, because we are the parliamentary committee and we talk about leveraging equity and procurement contracts and fiduciary duty, but for someone like me who is not an economist, sometimes it doesn't mean that much.
I want to ask about Labrador generally. If you can apply it to Nain, that would be great for me because I worked for three years in Nain. I thought Nain was a fantastic community. I really love Nain. I was a doctor there. But I know there wasn't a lot of economic prosperity in Nain. There wasn't a lot of business. There wasn't a lot of employment.
As our colleague on this panel from northern Quebec has said, the cost of everything up there is much higher. When I look at Labrador and all your communities that are scattered along the shore with no roads between them, and where the cost of everything is really high, I wonder how they can and would economically prosper.
Could you bring together all the things you've said about economic development and the barriers to economic development, and tell me about it in Labrador, specifically, if possible, in northern communities up at the top, Nain, Hopedale, Davis Inlet. What has gone right, what hasn't gone right, and what are your hopes? If you can't apply it up there, just tell me about the other communities in Labrador.
You can't get more granular than that to try to get right down at the community level, so I appreciate the question.
As you can imagine, there are over 50 Inuit communities across the country. All of them are isolated, except in the northern part of the Northwest Territories. Virtually all of them are on diesel with no access, for the most part—if you take out Tuktoyaktuk—or very limited access to road infrastructure and so on.
In terms of the business activity that we see for Inuit communities, it relies on whether there is going to be an application for federal contracts and federal procurement. In some instances there are, when you take into account some of the larger centres of Inuit communities across Inuit Nunangat, including Iqaluit, and even Nain, for that matter, where you do have a federal presence. The fact that we just won the north warning system contract is an example of being in the territory and the region and having that business opportunity and business success.
The other piece that is pretty critical is that element of infrastructure and the need for critical infrastructure. Despite the fact that we don't have roads that connect, we need that additional infrastructure around deepwater ports, as well as airlines and necessary airstrips to ensure that we have that flow of goods and services.
The Internet is becoming this ubiquitous thing around the world that so many of us take for granted, but for Inuit Nunangat, it's not a reality. Let's be honest, depending on the types of services or goods that you provide through indigenous business, the Internet can be critical. The pandemic demonstrated how this level of business activity can take place virtually anywhere. We can be sitting in our pajamas, ordering things and receiving them.
The fact that you don't have quality telecommunications and Internet, as Ms. Idlout was talking about earlier, something like that—even though it may sound a little lofty—would have a profound impact on individual small businesses and even the development of corporations in those particular regions.
That's a good question.
When I arrived, in 2014, economic development in the community of Wemotaci was at its lowest level, so we decided to do something about it. The bias against our community was hurting our ability to get projects off the ground. When we put forward our first projects, we would get laughed at during our presentations, even though the projects were well-thought-out and supported by business plans prepared by experts and reviewed by us. It was a very tough time.
Over the years, we gained credibility with federal and provincial institutions, and even financial institutions. Now, when we propose projects, we are taken seriously. We are professional in what we do, and we put together high-quality documentation.
Regardless, bias and fears persist. That's clear even from the interest rates financial institutions offer us. There is still some trepidation, even when the project is sound.
Here's the question: what happens when a non-Indigenous person and an indigenous person bring forward the same project? Are they treated the same? The two realities are entirely different. Let's tell it like it is.