About this committee report

On 25 February 2021, the Office of the Auditor General of Canada (OAG) tabled an audit report entitled “Access to Safe Drinking Water in First Nations Communities” in the House of Commons, which was then referred to the House of Commons Standing Committee on Public Accounts (the Committee) for study.[1] On 29 April 2021, the Committee held a meeting on this report, with the following individuals in attendance:

• OAG – Karen Hogan, Auditor General of Canada, and Glenn Wheeler, Principal.
• Indigenous Services Canada (ISC or the department) – Christiane Fox, Deputy Minister; Joanne Wilkinson, Senior Assistant Deputy Minister, Regional Operations Sector; Chad Westmacott, Director General, Community Infrastructure Branch; and Jennifer Esdaile, Director, Strategic Water Management.[2]

Background

A.    Access to Safe Drinking Water

According to the OAG, access to safe drinking water “is a long-standing issue in many First Nations communities. [The OAG] previously reported on this issue in 2005 and again in 2011 and provided recommendations to help resolve this issue. Fifteen years after [it] first examined the issue, some First Nations communities continue to experience a lack of access to safe drinking water.

In 2015, the federal government promised to address this long-standing issue. It committed to eliminating all long-term drinking water advisories on public water systems on First Nations reserves by 31 March 2021.”[3]

B.    Audit Objective

The OAG’s audit focused on whether ISC had “provided adequate support to First Nations communities to ensure that they have access to safe drinking water.”[4] The audit covered the period from 1 November 2015 to 1 November 2020 for which the audit’s conclusion applies. However, to gain a more complete understanding of the subject matter of the audit, the OAG also examined certain files from before this period.[5]

C.     Roles and Responsibilities

ISC “helps to ensure that First Nations communities have access to safe drinking water in a number of ways:”

• By providing advice and funding to First Nations to design, construct, upgrade, repair, operate, and maintain water systems;
• By supporting drinking water monitoring to determine whether the water is safe; and
• By providing public health advice when there are concerns about drinking water quality and helps communities address these issues. [6]

Provinces and territories issue regulations that “apply to almost all public water and wastewater systems in Canada and also provide for enforcement when standards are not met. Although provincial regulations do not apply to First Nations communities, [ISC]recommends First Nations communities adhere to the more stringent of federal or provincial requirements.”[7]

The audit also noted that “First Nations are the owners and operators of community infrastructure in First Nations communities, including water infrastructure. [They] manage the construction, upgrade, and day‑to‑day operations of water systems. They also work to ensure that water systems operate in accordance with various standards, protocols, and guidelines, and that appropriate water testing and monitoring programs are in place.

The Chiefs and Councils in First Nations communities issue and lift drinking water advisories. Environmental public health officers provide information on drinking water quality and recommend actions to Chiefs and Councils to help inform their decisions. Environmental public health officers are either employed by [ISC] or First Nations organizations, such as tribal councils.”[8] 

A.    drinking water advisories in First Nations Communities

According to the OAG, drinking water advisories “remained a constant for many communities, with almost half of the existing advisories in place for more than a decade.”[9] 

1.     Indigenous Services Canada Did Not Meet Its Commitment to Eliminate All Long-Term Drinking Water Advisories in First Nations Communities

The OAG found that, at the time of the audit, although ISC “made progress in eliminating long-term drinking water advisories, the department was not on track to meet its 2015 commitment to eliminate all long-term drinking water advisories on public water systems on First Nations reserves by 31 March 2021.”[10]

Christiane Fox, Deputy Minister, ISC, explained that in “November 2015, there were 105 long-term drinking water advisories on public systems on reserves across the country. Since then, 58 long-term drinking water advisories have been added.”[11] As of 1 November 2020, 100 of these advisories have been lifted, and 60 have remained in effect in 41 First Nations communities.[12] Of these 60 advisories, 28 have been in place for more than a decade.[13]

Christiane Fox also stated that “[t]he pandemic has delayed the completion of infrastructure projects across the country, including projects aimed at addressing long-term drinking water advisories.”[14] Furthermore, the department has been very responsive to “band council resolutions to respect the decisions that indigenous leaders have made. That has meant that some of the construction season of last year was impacted. It was impacted not just because of those decisions, which were very important as we face a third wave in this country and [the department has] to be extremely vigilant in how it manage[s] it, but also in terms of just getting equipment in and out.”[15]

However, the OAG found that “in many cases, water system projects were already experiencing delays prior to the start of the pandemic.”[16] 

Recommendation

In light of these issues, the OAG made the following recommendation:

Indigenous Services Canada should work with First Nations communities to strengthen efforts to eliminate all long-term drinking water advisories and prevent new ones from occurring.[17]

According to Christiane Fox, initiatives “are well under way to address the 52 remaining long-term drinking water advisories in 33 communities.”[18] Furthermore, “[l]ong-term solutions are under way in all cases where interim measures were put in place to provide communities with clean drinking water as soon as possible.”[19] She added that “[i]t can’t be about the federal government coming in and giving solutions or prescribing one particular system over another. It has to be about partnership and about indigenous leadership making decisions that are best for their communities.”[20]

According to its action plan, ISC committed to resolving “long‑term drinking water advisories in effect on public systems on reserve since November 2015” by 2023–2024.[21] To that end, the department will work “with First Nations to invest $309 million towards projects to address all remaining LT [long-term] DWAs [drinking water advisories] on public systems on reserve” by March 2022.[22] As part of another commitment, the department will also “track ST [short-term] DWAs, and support First Nations to address these advisories before they become long-term.”[23]

2.     Deficiencies for Some Water Systems Had Not Been Addressed

Long-Term Solutions Not Fully Implemented

According to the OAG, “although interim measures provided affected communities temporary access to safe drinking water, long-term solutions were not expected to be completed for several years. Of the 60 long-term drinking water advisories that remained in effect as of 1 November 2020, 16 (27%) were being addressed through interim measures. According to [ISC], long-term solutions for these systems were in various stages of implementation and were expected to be completed between 2021 and 2025.”[24]

Recommendation

Consequently, the OAG made the following recommendation:

Indigenous Services Canada should work with First Nations communities to implement long-term solutions to ensure that water systems in First Nations communities provide ongoing access to safe drinking water.[25]

According to its action plan, the department “will continue to work with First Nations to implement projects that address the long-term water needs of all communities affected by LT DWAs since 2015.”[26] These sustainable solutions must be implemented by March 2026. In the meantime, the department “will continue to support the AFN-led engagement process for the co‑development of a long-term strategy to ensure that drinking water systems are sustainable (Expected Completion: March 2022).”[27] The department will also support “the co-development of a long-term strategy for water and wastewater infrastructure (Expected Completion: Winter 2022-23).”[28]

The Committee understands that infrastructure problems can sometimes take time to resolve. Nevertheless, it intends to follow up on improvements to sustainability issues for drinking water systems in First Nations communities on an annual basis and therefore recommends:

Recommendation 1 – on resolving long-term drinking water advisories and implementing long-term solutions

That, by 31 March 2022, Indigenous Services Canada provide the House of Commons Standing Committee on Public Accounts with a complete plan on its long-term strategy to ensure that drinking water systems are sustainable, including objectives, results and deadlines. Both the plan and the findings on progress must be done in collaboration with First Nations communities. Results will include: a) the amounts invested to resolve long-term drinking water advisories; (b) the current number of long-term advisories; and (c) the current number of short-term advisories. Reports should also be provided by 31 March 2023, 2024 and 2025. In addition, a final report should be provided by 31 March 2026 that outlines the long-term solutions that were implemented in all communities impacted by long-term drinking water advisories since 2015.

Recurring Drinking Water Advisories

The OAG noted that between 1 November 2015 and 1 November 2020,

“of the 100 long-term drinking water advisories that were eliminated between 1 November 2015 and 1 November 2020, 5 affected systems had subsequent advisories that became long term. For example, 1 First Nations community had a long-term drinking water advisory in effect since 2001. The advisory was eliminated in 2019 after repairs were made to the treatment plant and distribution system. Yet, less than 2 months later, a subsequent drinking water advisory was issued. This advisory was still in effect on 1 November 2020.”[29]

“19 water systems had recurring short-term drinking water advisories that when combined, lasted for longer than 1 year. For example, 1 community had a short-term advisory for 363 days, followed less than 4 months later by another short-term advisory that lasted for another 325 days. For the residents of this community, the impact of these recurring short-term advisories could be as disruptive as a long-term advisory.”[30]

Condition of Water Systems Not Improved

According the OAG, in 2019–20, 43% of systems were still rated as high or medium risk, the same percentage as in 2014-15. According to the department, “high- and medium-risk systems can have major deficiencies that need to be addressed. If these deficiencies are not addressed, First Nations communities may not have reliable access to safe drinking water.”[31] Christiane Fox stated that the percentage of high-risk (as opposed to high- or medium-risk) systems was “close to 20% at one point, based on our risk assessment system. In 2019-20, that percentage was between 14% and 15%. The number of systems that were high risk has been reduced.”[32]

Recommendation

Thus, the OAG made the following recommendation:

Indigenous Services Canada should work with First Nations to proactively identify and address underlying deficiencies in water systems to prevent recurring advisories.[33]

According to its action plan, ISC “will continue to work with First Nations to conduct performance inspections of water systems annually and asset condition assessments every 3 years to identify deficiencies. The department will proactively work with communities to address those deficiencies and prevent recurring advisories.”[34] To that end, the department intends to continue “to work with First Nations to advance [operations and maintenance] policy reform as part of broader work towards an asset management approach (Expected Completion: Summer 2022).”[35]

Therefore, the Committee recommends:

Recommendation 2 – on detecting and proactively correcting problems

That, 30 September 2022, Indigenous Services Canada provide the House of Commons Standing Committee on Public Accounts with a report on the measures taken to detect and proactively correct the underlying deficiencies of water systems.

B.    Operations and maintenance funding

Operations and maintenance expenditures include those for:

Operations – “the services performed, materials needed, and energy used for the proper day-to-day functioning of a water system. This includes water system operators’ salaries, water treatment chemicals, and electricity costs.”[36] 

Maintenance – “routine maintenance and repairs on a water system to preserve it in as near to its original or renovated condition as is practical.”[37]

According to Christiane Fox, the department spent $338 million for operations and maintenance in 2021 and by 2025, it will spend about $400 million per year.[38] 

1.     Outdated Funding Formula and Policy

The OAG noted that ISC “allocates operations and maintenance funds according to a formula and a policy. The formula calculates the overall estimated costs required to operate and maintain water systems. The policy dictates that the department will fund only 80% of these calculated costs. First Nations are expected to cover the remaining 20% through sources such as user fees.”[39] As such, the OAG found that the funding policy and formula “did not reflect First Nations’ needs.”[40]

For example, the “formula, which dates back to 1987, was updated annually for inflation but did not keep pace with advances in technology or the actual costs of operating and maintaining infrastructure.”[41] Furthermore, it “did not consider the condition of the infrastructure as determined in annual risk assessments or information about planned maintenance activities. This meant that water systems in greater need of maintenance did not necessarily receive more money from the formula than other systems.”[42]

According to the OAG, “the department’s operations and maintenance policy had not been updated since 1998. According to the department, because the formula was outdated, it did not provide the full 80% of costs required by the policy. In addition, many First Nations struggled to provide the remaining 20% of operations and maintenance costs.”[43]

In Budget 2019 and the Fall Economic Statement 2020, “the department committed targeted operations and maintenance funding for water and wastewater systems.”[44] This additional funding was intended “to ensure that, going forward, First Nations would receive 100% of operations and maintenance costs as calculated by the existing formula.”[45] According to Christiane Fox, by 2025, “ISC will have increased the annual funding it provides first nations to support the operation and maintenance of water and wastewater systems by almost four times.”[46]

According to the OAG, given “that the department had not updated its operations and maintenance funding policy or updated the formula used to calculate operations and maintenance costs, it was unclear whether the announced funding increases would be sufficient to allow First Nations to operate and maintain their water infrastructure. The department was working with the Assembly of First Nations to update the operations and maintenance policy.”[47]

2.     Challenges in Retaining Water System Operators

The OAG noted that “the salary gap for water system operators continued to pose problems for First Nations communities. According to a 2018 departmental study, the salaries of water system operators in First Nations communities were 30% lower than their counterparts elsewhere. This salary gap contributed to problems in retaining qualified water system operators.”[48]

On this issue, Christiane Fox added the following:

We have a program here at [ISC] Canada called the circuit rider training program—namely, how do we actually develop the skill set within communities to develop a workforce that can do that very important operation and maintenance? Through that program, we try to develop that skill and capability and provide the tools required for communities to manage their projects.[49]

Recommendation

Consequently, the OAG made the following recommendation:

Indigenous Services Canada, in consultation with First Nations, should make it a priority to

• identify the amount of funding needed by First Nations to operate and maintain drinking water infrastructure
• amend the existing policy and funding formula to provide First Nations with sufficient funding to operate and maintain drinking water infrastructure.[50]

In response to this recommendation, ISC intends to, beginning in 2021–2022, develop a new operations and maintenance funding methodology to better reflect its actual costs and support its capacity to implement a new operations and maintenance policy and advance this policy “as part of broader work towards an asset management approach  (Expected Completion: April 2023).”[51]

Therefore, the Committee recommends:

Recommendation 3 – on operations and maintenance funding

That, by 30 April 2022, Indigenous Services Canada provide the House of Commons Standing Committee on Public Accounts with a report outlining the progress made to its funding policy and formula, including salaries, for operating and maintaining drinking water infrastructure in First Nations communities. A final report should also be provided by 30 April 2023.

C.     Regulatory regime for safe drinking water

Ongoing Work on a New Legislative Framework

The OAG found that “a regulatory regime was still not in place 15 years after [the OAG] first recommended it. Although the Safe Drinking Water for First Nations Act came into force in 2013, no supporting regulations were developed.”[52]

Karen Hogan, Auditor General of Canada, added the following:

The act … is rather short. That’s the legislative framework, and the regulations are really how you operationalize that. They will set, then, the minimum standards, the minimal threshold for water. They will set defined service levels, defined accountabilities when something goes wrong, such as who needs to take action. It’s really how you operationalize the legislative framework that’s outlined in the act. That’s the fundamentals. That’s needed because first nations communities need that hook, like every other community, in order to make sure that they know what level to target and what to do when those standards aren’t met. It is just a fundamental way to give the same protections that the rest of the country has.[53]

Recommendation

Therefore, the OAG made the following recommendation:

Indigenous Services Canada, in consultation with First Nations, should develop and implement a regulatory regime for safe drinking water in First Nations communities.[54]

According to the OAG, ISC “acknowledged the importance of a collaborative approach that recognizes First Nations’ rights to self-determination. The department told [the OAG] that it was working with the Assembly of First Nations to co-develop a new legislative framework.”[55]

According to its action plan, ISC “will co-develop a legislative framework through a Joint Working Group. Approval of legislation is required, to enable development of a regulatory framework (Expected Completion: December 2022).”[56]

Therefore, the Committee recommends:

Recommendation 4 – on developing and implementing a regulatory regime

That, by 30 April 2022 at the latest and by 30 April on an annually recurring basis thereafter until the adoption of a regulatory regime for safe drinking water in First Nations communities, Indigenous Services Canada provide the House of Commons Standing Committee on Public Accounts with a report on the ongoing negotiations with First Nations communities to develop and implement this regulatory regime.

The Committee concludes that Indigenous Services Canada did not provide enough support to First Nations communities for them to be able to access safe drinking water. Karen Hogan, Auditor General of Canada, stated that she was “concerned, and honestly disheartened, to find [herself] reporting a long-standing issue that is still not resolved. Access to safe drinking water is a basic human necessity.”[57]

First Nations communities will not be able to reliably access safe drinking water as long as deficiencies in water systems are not addressed, adequate operations and maintenance funding is not defined or delivered, and a regulatory regime is not implemented. An ongoing partnership with First Nations is needed in order to identify and implement sustainable solutions to unresolved problems and remove barriers to reliable access to safe drinking water.

Safe drinking water is a basic necessity for First Nations communities, and ensuring that they can access it is crucial. Therefore, the Committee has made four recommendations to that end.

Table 1—Summary of Recommendations and Deadlines

Recommendation	Recommended action	Deadline
Recommendation 1	Indigenous Services Canada (ISC) should provide the House of Commons Standing Committee on Public Accounts with a complete plan on its long-term strategy to ensure that drinking water systems are sustainable, including objectives, results and deadlines. Both the plan and the findings on progress must be done in collaboration with First Nations communities. Results will include: a) the amounts invested to resolve long-term drinking water advisories; (b) the current number of long-term advisories; and (c) the current number of short-term advisories. In addition, a final report that outlines the long-term solutions that were implemented in all communities impacted by long-term drinking water advisories since 2015 should be provided.	31 March 2022 31 March 2023 31 March 2024 31 March 2025 Final: 31 March 2026
Recommendation 2	ISC should provide the Committee with a report on the measures taken to detect and proactively correct the underlying deficiencies of water systems.	30 September 2022
Recommendation 3	ISC should provide the Committee with a report outlining the progress made to its funding policy and formula, including salaries, for operating and maintaining drinking water infrastructure in First Nations communities.	30 April 2022 Final: 30 April 2023
Recommendation 4	ISC should provide the Committee with a report on the ongoing negotiations with First Nations communities to develop and implement a regulatory regime for safe drinking water in First Nations communities.	30 April 2022, then 30 April on an annually recurring basis thereafter until the adoption of a regulatory regime