:
Mr. Chair, thank you very much for this opportunity to discuss our office's work related to aboriginal land use and sustainable development.
Related to this topic, in December 2011 my colleagues briefed this committee on chapter 6 of the Auditor General's fall 2009 report, “Land Management and Environmental Protection on Reserves”. Today, I will be focusing most of my comments on chapter 4 of the Auditor General's spring 2010 report, “Sustaining Development in the Northwest Territories”.
With me today is Frank Barrett, the principal responsible for the audit, and Kim Leach, the principal who also worked on this audit.
The federal government has a mandate to promote political and economic development in the Northwest Territories and to protect the environment. Our audit looked at whether responsible federal departments had laid the foundations for sustainable and balanced development in the Northwest Territories. Specifically, the audit focused on whether Aboriginal Affairs and Northern Development Canada, Environment Canada, and Human Resources and Skills Development Canada had adequately implemented key measures to prepare for sustainable development.
[Translation]
These measures included settling comprehensive land claim agreements and self-government agreements; establishing and implementing a regulatory system that protects the environment; and supporting appropriate economic development and skills training programs for aboriginal peoples in the Northwest Territories.
Comprehensive land claim agreements and self-government agreements set out governance rights and the ownership of land and resource rights. These agreements are therefore important for economic development. They help to provide a level of certainty and predictability for business, industry, communities and governments. Almost all of the Northwest Territories either lies within settled land claim areas or is the subject of ongoing negotiations.
[English]
At the time of our audit, four land claim agreements had been finalized. Other land claim and self-government agreements were under negotiation. We found that Aboriginal Affairs and Northern Development Canada had made constructive efforts to negotiate these agreements and had followed the established processes for their negotiation. As well, the department had used alternative approaches when negotiations appeared to be stalled.
While much remains to be done, in our view the efforts to settle land claim agreements and self-government agreements represent a significant achievement and an important step towards sustainable development in the Northwest Territories.
[Translation]
We have also looked at the environmental regulatory system. Protecting the environment is important particularly because aboriginal communities in the Northwest Territories depend on wildlife, water, and land for subsistence and for economic development opportunities.
We examined whether Aboriginal Affairs and Northern Development Canada and Environment Canada had established and implemented an adequate regulatory system in the Northwest Territories. We found that, in regions with settled land claim agreements, there are systems and structures that support land use plans and provide a means of adequate consultation with communities.
[English]
In regions without comprehensive land claim agreements, however, there was uncertainty about aboriginal title to the land, how it might be used, and who should be consulted. Moreover, in those regions without land claim agreements, we noted a lack of specific mechanisms for developing land use plans. Without a formal land use plan, development decisions must be made on a case-by-case basis. Decisions related to project approvals may therefore take longer, because it has not been determined where different types of development should take place and what conditions should be applied.
AANDC also has specific responsibilities for monitoring the cumulative impacts of development. This information is important because it provides co-management boards with environmental information to support informed decision-making on development proposals. Our audit found that 11 years after receiving a mandate to do so, AANDC has not yet put in place a program to monitor cumulative environmental impacts. Similarly, funding for Environment Canada's program that would support cumulative impact monitoring ended in 2007. As a result, neither department has implemented this program.
[Translation]
Our audit also examined skills training and economic development programs for aboriginal communities. We found that Human Resources and Skills Development Canada had established clear objectives and targets for both of their programs that we examined but that Aboriginal Affairs and Northern Development Canada's economic development programs did not have clear objectives and that the department did not monitor its programs' performance or review information reported by funding recipients.
Overall, we concluded that Aboriginal Affairs and Northern Development Canada and Environment Canada had not adequately implemented key measures designed to prepare for sustainable and balanced development in the Northwest Territories.
[English]
We have done other audits that have addressed broad issues around environmental protection and sustainable development that affect aboriginal communities. One issue that we hear about from communities, particularly in the north, is the impact of climate change. In another 2010 audit we examined how the federal government was helping communities prepare for and adapt to climate change.
The federal government has confirmed that climate change is already under way, and its impacts will affect every major economic sector, every region, and many communities. Observed impacts are already under way in Canada's north. We found that while good work was under way in helping community leaders understand the localized impacts of climate change, the demand from across Canada was outstripping the ability of the federal government to keep up.
In another 2010 audit we looked at the capacity of the federal government to prepare for and respond to oil spills from ships. Last week the Auditor General was in Iqaluit and heard from their public accounts committee about their concerns around the possible opening of the Northwest Passage and the implications of an oil spill in the north.
Finally, we have also audited different aspects of freshwater management. In 2005, and again in our 2011 follow-up audit of programs for first nations, we found that drinking water quality on reserves was significantly worse than what was found in most Canadian communities.
[Translation]
I should point out that these audits to which I refer are over two years old and we have not looked at these issues since then.
[English]
Mr. Chair, that concludes my opening statement. We'll be pleased to take questions from honourable members.
Thank you.
Tansi, bonjour, bon après-midi, and good afternoon.
I would also like to honour and acknowledge that I have been invited to the traditional territory of the Algonquin people to make this submission.
Thank you for the opportunity you have extended to us to appear here today.
I am Lucy Pelletier, a member of the Cowessess First Nation within the Treaty 4 territory within the province of Saskatchewan. I serve as the chairperson of the board of directors of the National Aboriginal Capital Corporations Association, otherwise known NACCA, in addition to serving as the chairperson of the Saskatchewan Indian Equity Foundation. Accompanying me today are Ian Donald, our interim CEO, and Kevin Schindelka, our director of corporate development.
Our first point is on the aboriginal economy. Many aboriginal communities are now beginning to capitalize on the emerging opportunities provided by court judgments, land settlements, new revenue sources, the new economy, resource development, and export markets. They are also adapting mainstream business practices to their own values and cultures in order to create jobs, grow incomes, and generate wealth for their community.
This is being reflected in the rapid growth of entrepreneurship and aboriginal businesses, which in turn is generating increased demand for both debt and equity capital. More varied types of financing are also being required as individual aboriginal businesses grow larger and progress through their life cycles. In addition to more traditional term financing, there is increasing demand for seed capital and youth entrepreneur loans, larger term loans, operating loans, surety services, quasi-equity or subordinated debt, and equity financing.
Our second point is on aboriginal business clients. However, the characteristics of many of these aboriginal businesses continue to present difficult challenges to most sources of capital. For example, they are predominantly small and medium-sized enterprises, or SMEs. Whether these are mainstream or aboriginal businesses, SMEs, for financial institutions, generally represent relatively higher transaction costs and the perception of higher risk resulting from their smaller size and their more limited management capacities. These factors are often accentuated by a relative lack of equity capital and an overreliance on debt financing.
Aboriginal businesses often present additional financing challenges resulting from social and economic development factors. These can include even more limited management capacities than their mainstream counterparts, less familiarity with commercially oriented debt management practices, and a greater proportion of early-stage businesses.
Finally, on-reserve businesses present further challenges related to section 89 of the Indian Act, which include differing commercial cultures, fewer incorporated businesses due to the tax-free status, a greater focus on the recurring natural resource sectors, and more limited market opportunities for remote locations.
In regard to aboriginal financial institutions, Canada’s network of aboriginal financial institutions, or AFIs, is the primary source of developmental financing and management support services across Canada for those aboriginal businesses that cannot secure such financing from mainstream financing institutions. The network has evolved over time and currently comprises aboriginal capital corporations, aboriginal-controlled community futures development centres, aboriginal-controlled business development centres, and privately capitalized aboriginal developmental lenders. Of the 60 AFIs comprising the network, 53 are members of NACCA and represent first nations, Inuit, and Métis communities in each of Canada’s provinces and territories.
Each AFI is unique with respect to its structure, capacities, performance, client focus, services, and the territories it serves. All AFIs are fiercely independent and accountable to their own community. Their community roots give them a unique ability to place more reliance on community-based creditworthiness assessment to supplement deficiencies in their clients’ financial situations. This results in a very high acceptance rate for new accounts and relatively good loan performance. Through ownership of their AFIs, aboriginal communities have been able to exercise control over the decision-making process and thereby generate the culturally sensitive change that will have the greatest impact on their communities.
NACCA's national office is increasingly developing its capacity to enhance the institutional capacity of each member AFI to support its AFI membership, much like a credit union central works to support individual credit union members. In this context, it is providing an ever-expanding range of targeted and often customized support services, including program administration, customs training, best practices, loan management systems, new product development and testing, research and analysis, performance measurement systems, and communications strategies.
In terms of financial performance, each year AFIs provide approximately 500 new business start-up loans and 700 expansion or modernization loans, totalling $100 million, to aboriginal small businesses. This financing assists these small businesses to create or support the equivalent of nearly 4,000 full-time jobs. Since 1985, AFIs have received a total of $235 million from the federal government in contributed and repayable loan capital. During that period, they have provided over 36,000 loans, aggregating over $1.5 billion dollars, and over $1.2 billion of these loans have now been repaid. The overall AFI loan loss experience is approximately 6%, which compares very favourably to the 13% experienced by the Canada small business financing program. At March 31, 2011, the consolidated AFI loan portfolio comprised some 4,000 loans valued at $238 million.
In terms of strategic priorities, NACCA's current strategic plan for the period of 2012 to 2014 is based on four priorities that are intended to enhance our service to our aboriginal business clients and, by extension, to the greater aboriginal economy. These are as follows: one, increasing the financial viability of AFIs; two, improving AFI access to loan capital; three, developing the capacity, skills, and professionalism of AFIs; and four, enhancing AFI services to respond effectively to the changing needs of our business clients.
In this context, NACCA AFIs are encouraged by AANDC's increased focus on aboriginal economic development issues, particularly the small business development component as expressed in the new federal framework. We believe this framework could greatly assist us in achieving our four strategic objectives and have been approaching these priorities through two complementary, parallel activity streams: one, the joint AANDC-NACCA program renovation working groups and committees developing new programming approaches, operating concepts, and implementation plans for consideration by ministers and central agencies; two, independent NACCA-led initiatives developing complementary programming. AANDC staff will participate where appropriate and when available.
I’d like to briefly summarize the approaches currently being undertaken within these two activity streams.
Number one is increasing the financial viability of AFIs. This priority focuses on ensuring the financial sustainability of AFIs engaging in pre-commercial developmental lending to a geographically dispersed clientele despite the challenges of higher operational, lending, and capital costs, and the provision of associated advisory and support services required.
The primary issue here is that the overall financial model for AFIs is unsustainable. AFI lending costs comprise 10% for administration, plus 6% for losses, for a total of 16%, versus loan portfolio revenue of 9%. This leaves an unfunded gap of 7%.
Discussions with AANDC officials to date have focused on addressing this shortfall by establishing a performance-based allocation program to offset the AFI lending cost shortfall as well as by restructuring current AANDC loan capitalization programs to better respond to the reduced liquidity of AFIs that has resulted from this flawed funding model.
Number two is improving AFI access to loan capital.
To date approximately 90% of the AFI loan capital has come from the federal government, with the remaining 10% coming from the private sector. However, based on the increase in demand for AFI loans over the past decade, AFIs will need to secure an additional $100 million to $150 million in loan capital over the next decade. Since the federal government cannot reasonably be expected to support this level of funding on an ongoing basis, new approaches targeting much greater participation by aboriginal sources and the private sector must be launched as soon as possible.
Initiatives currently being addressed with AANDC include enhancing AANDC's loan capital interest rate buy-down program, refining the loan loss reserve approach, and establishing and capitalizing a NACCA treasury function to attract wholesale capital.
Internally, NACCA will be examining the use of bonds, debentures, and other innovative financial instruments; structuring syndication frameworks; and developing methodologies for liquidity pools.
Number three is developing the capacity, skills, and professionalism of AFIs. This priority is intended to further the AFIs' strategic focus on sound operating standards and on building a capacity equivalent to the credit union central within the AFI network. NACCA member AFIs have already developed a number of tools to enhance AFI operations—for example, a risk-measurement tool for AFI loans, a performance-measurement database and related monitoring reports, and a number of custom on-site, distance, and accredited learning programs.
During the strategic planning period, collaboration between NACCA and AANDC should result in enhancement of the governance and capacity-building elements of AANDC's Access to Capital program and development of a comprehensive performance measurement framework for AFIs.
Internally, NACCA will be expanding its custom training products, enhancing its AFI loan management systems, developing a structured database for best practices and critical standards, and developing generic personnel and financial administration manuals for its members.
I too would like to acknowledge the traditional territory of the Algonquin Nation, particularly the Pikwàkanagàn, whose traditional territory we are now meeting on. My thanks to them. I would also like to thank the standing committee for the invitation to be here.
With me is Brad Young. He is our senior policy adviser, and I am the executive director of NAFA, the National Aboriginal Forestry Association.
First I'll tell you a bit about NAFA.
We are a non-governmental first nation-controlled organization focused on research and advocacy activities in the forest sector. We advocate for policy frameworks that address aboriginal rights, values, and interests leading to a more equitable sharing of benefits from the forest resources of this vast land we call Canada.
We wish to contribute to the goal of building an aboriginal forest-based economy. We recognize that an aboriginal forest-based economy cannot be achieved in isolation from the broader forest sector or from the economic realities facing all forest industries in Canada; we do, however, have circumstances, challenges, and opportunities unique to the aboriginal forest sector.
The term “aboriginal forest sector” is probably one you have not heard frequently, or possibly ever before, yet it is probably one the oldest economic sectors in North America, predating the arrival of Europeans and others. For multiple generations, aboriginal people have depended on forests for food, shelter, medicine, and a wide range of forest resources to produce goods and materials, thereby sustaining their livelihood and culture.
For aboriginal people, forests today are every bit as important as they were centuries ago. We have to recognize the significance of forests to future generations of aboriginal people and the potential they offer for the socio-economic advancement of aboriginal communities. It is important, therefore, that the aboriginal forest sector be considered a contemporary concept and an integral component of Canada's economy.
In our work at NAFA with first nations, we have found it necessary to differentiate the aboriginal forest sector from the broader forest sector in Canada. What is different about the aboriginal forest sector is that our forest values with respect to forest land and resource use does not mirror those of the dominant forest industries. Also, the form of business ownership and forest management governance is community-based rather than controlled by multinational corporations. Statutory and jurisdictional arrangements with respect to our forested lands, though largely inadequate from a management and development point of view, are specific to first nations. The focus of aboriginal forest-based development is on smaller-scale operations and value-added products and services rather than the mass production of commodities. Finally, there are niche markets for aboriginal-produced forest products that differ from those of large forest companies.
My purpose in emphasizing that the aboriginal forest sector is different is to point out the need for specially focused programming, policy, and institutional support to advance the aboriginal forest sector. The federal and provincial governments provide access to forest resources for the broader forest sector and have helped to support the forest industries in many ways. Programs like the pulp and paper green transformation program, the Canada wood export program, and others have been a means by which the federal government has invested hundreds of millions of dollars over the past few years in forest products development and in the industries that produce them. The aboriginal forest sector, however, receives no such recognition and support.
Considering that the federal government has constitutional responsibility for Indians and lands reserved for Indians and that 80% of first nations communities are located in forest-producing areas of the country, creating the conditions for aboriginal forest development should be a priority. The new federal framework for aboriginal economic development does not reflect this as a priority.
Despite the lack of attention to the aboriginal forest sector as an important segment of the economy, aboriginal people are gaining prominence in forest sector activity. Through court decisions, land claim settlements, and increased access to provincial forest tenures, aboriginal people in some parts of the country now have access to resources in significant volume, warranting new approaches to support the diversification of the aboriginal forest sector.
To advance the aboriginal forest sector and its diversification, policy and program support is needed in the following areas: capacity development support to first nations governance to enable effective, sustainable forest management at the community level; human resource development in professional and technical skill areas related to forest-based development; investment capital, of course; forest research and research and development support with respect to forest land management and forest product development; marketing and market development support for existing businesses and new entrants to the sector, which would advance the aboriginal causes in the sector; and institutional arrangements with respect to management of the forested land base, which would enable forest resource access and effective land use consistent with community values.
Now, concerning the aboriginal land base that is potentially available to aboriginal people for forest sector activity, there are basically three categories of land: provincial crown lands, treaty settlement lands, and Indian reserves. These three categories of land each come with different jurisdictional arrangements.
Right now, the vast majority of first nations and aboriginal people and companies involved in forest sector activity operate on crown land. Stated another way, aboriginal forest resources development occurs in the traditional territories of first nations in accordance with provincial tenure systems or through contracting with forest companies.
Though reluctantly, some provinces are engaging first nations through consultation processes, resulting in an increased number of aboriginal-held forest tenures. Forest tenure is becoming an acceptable interim measure to aboriginal and treaty rights recognition for some first nations.
Currently first nations collectively hold across the country approximately 13 million cubic metres of timber. In some parts of the country, the issue is becoming market access for aboriginal producers, considering that the forest industries in Canada are experiencing a long-term downturn as a result of their decreased competitiveness at the global level.
With respect to forested land under the jurisdiction of first nations that have settled land claims or have entered into modern-day treaties, land management regimes addressing forest management are being implemented. There are, however, only a handful of such cases, and where this is occurring, it is normally the practice to adopt provincial standards. As you know, most land claim settlements have occurred in the northern regions of the country, where commercial forestry is not prevalent. Thus, we don't have a great deal of experience in terms of forest management through land claims and treaty land settlement agreements.
The reserve land base falls under federal jurisdiction, specifically under sections 93 and 57 of the Indian Act and the Indian timber regulations made pursuant to those sections. The inadequacy of this management regime has been described in numerous studies and reports, including the Royal Commission on Aboriginal Peoples in 1996, and by the Auditor General on at least three occasions since 1986.
The forest management regime provides authority not to first nations but to the Minister of AANDC, and only for the cutting of timber. The forest management regime does not address environmental or sustainability issues, nor does it call for forest management planning on the part of first nations. The result has been overharvesting, lack of reforestation, inadequate site tending, and overall mismanagement on Indian reserve lands.
In 1996 NAFA proposed a first nation forest resources management act as optional and alternative legislation to the Indian Act. This is much like the First Nations Land Management Act. Our legislative proposal, however, encountered major stumbling blocks, particularly those centred around federal liability for the past mismanagement of reserve forests and also the cost of forest land rehabilitation.
The primary reason Indian reserve forests have not garnered much attention lately has been the reduced demand for timber by the large forest industries. It has been said by certain parties that on their own, Indian reserve forests are small, and the majority do not contain merchantable timber in volumes sufficient to support any notion of a viable forestry operation.
This is not our view at NAFA. Our view is that Indian reserve forests should be models of sustainable forest management practices in Canada, despite their small size. This should begin with forest management regimes that value uses other than timber and enable first nations to innovate and combine reserve land resources with those acquired otherwise, such as forest tenure from the provinces.
To conclude, we feel it is important for the federal government to acknowledge the aboriginal forest sector, its needs and potential. The federal government could play a key role in implementing measures to support the aboriginal forest sector. In the broader forest sector, the federal government is responsible for issues of importance to the national economy, including trade and international relations as well as federal lands and parks, and it has constitutional, treaty, political, and legal responsibilities for aboriginal peoples and their interests.
The federal government has jurisdictional responsibility for “Indians, and lands reserved for Indians”, a fiduciary obligation for the good management of first nations interests, and a constitutional duty to protect aboriginal treaty rights and in some circumstances to accommodate aboriginal treaty rights. Despite this responsibility, the federal government has been quite silent on the relationship between aboriginal rights and interests and forest management in Canada. Supporting the aboriginal forest sector would be thinking outside the box and would be considered a proactive approach to many of the aforementioned issues.
Thank you very much.
:
Thank you for that question.
I guess I'm a bit younger than Harry, as any of you can see. When I went to university, I went into the governance path, but many of the colleagues I went to school with were going to school to be RPFs. In the forest sector, because of the political tug and pull over the forest provincial agreements and land claims, a lot of my colleagues went into the “chief” business instead of going into the RPF business, and overall we're winning some of these arguments.
Now, as Harry says, we have millions of cubic metres of annual allowable cut a year on a national basis. We have done some forecasting on large niche markets that first nations could participate in. One market we're analyzing right now, certified wood products, is in the range of about $24 billion a year. Canada's percentage of that is about $7.8 billion. There's a really good opportunity to grow that $7.8 billion by about 50% if we could just get some capital into first nations businesses and get our RPFs, our technically savvy business-oriented youth, out of the political brinkmanship game and into the economic development nation-building game.
I think that is a great challenge. Harry was quite diplomatic in presenting the facts on what goes into the non-first nations forest sector. We did a quick analysis of that. Harry mentioned a figure of hundreds of millions, but we zeroed in on a more accurate number: about $1.1 billion of government funding went directly into forest products such as the FPAC system, FPInnovations, and controlled wood. That's great for that segment of the forest sector, but on the other side, while we have land claims being negotiated and economic development that could be happening in the first nations hinterland, there's very little policy support and governmental support for that side of development. I think that's a great waste of economic effort and human talent.
I think that would be an area of focus, and we're ready to play a role there. There's a new generation coming on board, and we are looking for partnership from the Government of Canada.
:
It's been of critical interest for a lot of remote first nations communities.
There's some very good work out of Confederation College here in Ontario, looking at a template-type operation of a one-megawatt bioenergy wood pellet cogeneration system, which they're actually building right now. It's under construction there at Confederation College.
One of the things they want to do is pull in these remote first nations and say, “Look, feel, see, touch. Look at our financials. Look at the metrics. Look at our supply chain. Copy it. Go to a financial institution. Get the trades people in place, and build it in your communities, if the metrics work out.”
When you start looking at the possibility there, you look at the critical role of the preliminary front-end research and analysis, and then the gentle hand of government playing a supporting role, so it's of critical interest. It's an overall national strategic consideration as well.
We've also received requests from, of all places, remote first nations indigenous people in Russia, as a part of some of our international work, saying, “We know that you Canadians have a lot of really good technology. We know that your remote first nations are starting to take a look at bioenergy. We know that some”—I think it's six first nations tenures in Ontario, the larger ones—“will be first nations pellet plants in the bioenergy complex.” Other countries are looking at us.
It's a matter of imagination and of will coming out of committees like this, and through the government, to start activating some of these initiatives. We look for your support to follow up on it.
Thank you for the question.
:
Thank you, Mr. Chairman.
I'd like to thank the witnesses for meeting here this afternoon.
My question is for the National Aboriginal Forestry Association, and then I'll probably segue to all of you near the end.
I come from northern Saskatchewan, where timber harvesting is very prominent. We're seeing that the market is fluctuating through some very tough times and is trying to make ends meet. In northern Saskatchewan we have a large aboriginal population of Métis and first nations. We have a couple of examples of forest industries; NorSask is one, owned by Meadow Lake Tribal Council.
In that area, forestry is really almost the driving economic hub, and we see development also taking place in natural resources for oil sands. We see other opportunities up north in rare earths and a number of other things. However, I'll basically focus on forestry.
Patuanak, a small and remote first nations community with not a very good road going in or coming out, has developed a bridge into some very pristine virgin timber. It hasn't been accessed before. We've seen the first nation community actually take the initiative to harvest the resource there.
Now I'm wondering about economic development. We see the woodland caribou strategy coming forward, and I see how the opposition is pushing for that woodland caribou strategy. We see how the David Suzuki Foundation is utilizing the website by inappropriate means through the submission process.
What I'm really getting at is that under the woodland caribou strategy that's being finalized here—I think the submission deadline was February 22 or 23 of this year—I wonder how the strategy for your area will be affected. We see northern Saskatchewan being focused on by the woodland caribou strategy as the incubator for the recovery process—just northern Saskatchewan—but it's going to affect Alberta, Manitoba, Quebec, and areas over into Newfoundland and Labrador as well. Right now, it's Saskatchewan that's going to be facing the test, I should say.
Looking at this and wildlife habitat protection initiatives, I'm wondering how the aboriginal communities are going to derive an economic benefit from the forest resources that surround them. What type of consultation are you doing with the aboriginal and first nations communities to promote economic development?
:
Thank you. You share the frustration, right? There are too many people, too many good questions. We'll have to have some of them back again.
I want to commend the forest association. You definitely sound like the wave of the future. I have to speak for my colleague Mr. Bevington; his number one interest is in looking for cleaner sources of local-sourced fuels for the north, such as wood pellets. He is the member for the Northwest Territories. It's very interesting. It certainly is something that sounds like it's well worth pursuing, and not necessarily just in the form of what we're doing here. I am hoping that soon we'll be able to move to the second phase, where we're going to be looking at the potential for development and benefit to first nations communities from developments on their “traditional lands”.
I share some of the concerns of Mr. Clarke, although possibly not for the same reasons, about the level of engagement of first nations peoples in discussions about conservation areas and the setting aside of areas. Definitely when we're setting aside large tracts of forest land—and I've mentioned this previously in committee meetings—negotiations between certain industry sectors and the environmental community, or with other levels of government, are not complete unless they've also included the first nations' interest at that table. I know there have been some issues expressed by some of the first nations, particularly in northern Ontario, that the agreement for setting aside the area for the protection of the boreal forest didn't necessarily include them adequately.
On the other hand, we have to look at how we can't end up with development scenarios where we're serving the needs of one first nation or the preservation of a species at the risk to another first nation, and that's certainly what's happening with the woodland caribou, where essentially both federal and provincial governments appear to be writing off the herds in Alberta to enable the oil sands development, which is potentially putting at risk developments for first nations in northern Saskatchewan and over to Manitoba and so forth. It's very important that when we're talking about economic development into the future and conservation strategies, we make sure that first nations' interests are at the table. I'm finding it very helpful to discover your association and to learn more about it. I hope that we can follow up more and I look forward to any further information you can provide.
Certainly one of the waves of economic benefits for first nations for the future is getting into the alternative energy future. One previous witness said they've been frustrated that they haven't been able to process the addition of lands to their reserve. They had an agreement with a company to put in place a solar farm, so we need to be making sure that our government institutions are actually supporting the innovative initiatives of the sector moving forward.
I don't know if you wanted to elaborate a bit more on whether you're finding that government agencies and so forth are seeing that your entity is an economic opportunity for first nations.
First of all, you're quite right. We said in the 2009 audit, on which my colleagues were here before Christmas, that because of regulatory gaps on reserves, there's a considerable amount of confusion. We quoted a first nation chief from Ontario who said that for dumping, landfill, incineration of garbage, waste water, sewage, and other areas it was vague and uncertain which regulations applied and which ones did not.
We also said, in the 2010 audit, that there were responsibilities of the government in enforcing the regulations they knew to be in place, including in the Indian Act and others. They were supposed to have a compliance rate of 60% of inspections for regulations that were in place. We pointed out in our audit that it was 13%. That's what the average rate was. We asked the department if they knew their compliance rates, and they said that they did not.
We pointed that out. We issued a report in the fall of 2011, just about two months ago, looking at enforcement at Environment Canada, NEB, and Transport Canada.
This is just to say that this is an issue that is not unique to first nations reserves or to the Indian Act application of that law. We pointed out that enforcement issues across the board are difficult. We made recommendations on a number of areas. If inspectors find a problem, they should go back and make sure that it's fixed.
We've pointed out in numerous audits the problem of enforcement of the laws that are there.
Commissioner, in your 2010 audit you talked about land use plans. You also mentioned that there was very little in the Indian Act that provided authority for first nations to begin to plan the use of their lands in terms of commercial, residential, etc.,
We also found that the First Nations Land Management Act came into effect in 1999, yet none—not a single one—of the environmental management agreements have been concluded with first nations.
My question to you is this: what are the challenges? Why has that not been concluded with first nations? What is there preventing this from occurring?
Then you have this double standard. You have modern treaties, such as those we are having in B.C. now, that are comprehensive and that give a lot of authority for management of resources, land, governance, and land management regimes, etc., to those modern treaty holders.
In fact, I would love to go into the issue of the Enbridge pipeline; I won't, because it's not valid here, but there you go.
As well, first nations are talking about the use of their land, etc., so you have these two sets of existing standards. What prevented any first nations under the old regime, under the Indian Act, to be able to effectively get themselves an EMA, and why is it that we have these two standards when you have people who have full authority over the use of their land? What can we do to rectify that? It sounds to me as though it puts one group of aboriginal communities at a total disadvantage.