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View Pierre Lemieux Profile
CPC (ON)
Minister, I wanted to ask you a question about the Safe Food for Canadians Act, which you presented to Parliament last year. Do you feel the act addresses some of the concerns mentioned in the report?
View Gerry Ritz Profile
CPC (SK)
Yes, it does. It was tabled about a year ago now, and it was passed last fall. What it does is give those inspectors increased powers to ask for documentation in a more timely way. That was the weak link—the days it took XL to actually put the package of documentation together that the inspectors were asking for.
It also demands of all federally regulated industries that their documentation is done in a standardized format that's immediately usable. The inspectors will tell you that when they first started asking for documentation, a lot of it wasn't even held on site and had to be brought in from other offices under the XL umbrella. It was like a patchwork quilt. A forensic detective was almost required to trace down and track how it all fit together. This takes up valuable time. Recalls rely on by-the-minute, by-the-hour documentation to get that product off the shelves and make sure that Canadians are aware of what's out there. The standardized format that's now required under S-11 and the increased powers to demand timely access to documentation make a difference moving forward.
Stephen S. Poloz
View Stephen S. Poloz Profile
Stephen S. Poloz
2013-06-06 8:47
Thank you very much, Chair. It's a pleasure to be here.
Good morning. Bonjour, tout le monde.
The Bank of Canada's commitment to Canadians is to promote the economic and financial welfare of the country. One way that we do this is to communicate our objectives openly and effectively and stand accountable for our actions. Thank you very much for this opportunity to come before you to share the bank's perspective.
Kindly note that today is day four on the job for me. It has been a busy three days. I trust you'll forgive me if there are any details, though, that I haven't yet become familiar with. But that said, I look forward to hearing your views and taking your questions, and I'll answer them to the best of my ability.
The common denominator that ties together all the bank's work is confidence. Through our actions and our words, what the Bank of Canada delivers is, first, confidence in our currency; secondly, confidence in our role as fiscal agent for the federal government; thirdly, confidence in our banking system; and fourth, confidence in the value of money.
This is familiar ground to all of us here today. I don't propose to delve into the details of the bank's functions. Rather, I will discuss the current context in which we are operating and how that is influencing the bank's work of delivering confidence.
It is now almost six years since the start of the global financial crisis. Given the near-collapse of the global financial system and the dramatic plunge in global demand, it's perhaps no surprise that we haven't yet returned to normal economic conditions.
The global economy continues to struggle. Most advanced economies are still facing credit stresses and record-low interest rates. Many central banks continue to use unconventional means to provide stimulus, and governments are doing everything they can to manage their respective debt situations.
Clearly, the global economy is still in recovery. Global economic activity is expected to grow modestly this year before strengthening over the following two years. But this is not a recovery in the usual sense; it's closer to a post-war reconstruction. It will require sustained and focused efforts to rebuild global economic potential.
Allow me to talk about how, in this context, the Bank of Canada delivers confidence. Let me start with confidence in our currency, which for many Canadians is our most tangible work. Every banknote in the wallets of Canadians is the product of specialized and sophisticated expertise. We have nearly 200 people at the bank, physicists, chemists, engineers, and other experts, who design, test, and distribute banknotes across Canada. We also communicate with retailers, financial institutions, and the public, and we work with law enforcement to fight counterfeiting.
The stakes are high when it comes to counterfeiting, not only in direct losses to Canadians but also the loss of confidence it creates in the use of banknotes.
The challenge of counterfeiting is significant. There was a time in 2004, for example, when counterfeiting in Canada was at an historic peak and very high by international standards. I'm sure many of you will remember seeing the signs posted in stores saying $100 or $50 banknotes were not accepted.
The Bank of Canada introduced enhanced security features and worked closely with law enforcement agencies, the RCMP, and the courts, as well as financial institutions and retailers, to bring those counterfeiting rates down, and we succeeded. Even before the introduction of our new polymer banknotes, counterfeiting rates had been reduced by 90%, but it's important to remember that staying ahead of counterfeiters is a constant challenge and we must always be proactive.
That's why the bank launched a new series of polymer banknotes that are safer, cheaper, and greener. They're safer because of sophisticated security features that make these notes very hard to counterfeit and easier to verify. They're cheaper because they last at least two-and-a-half times longer than paper-based notes. This means that fewer notes will need to be printed, making the series more economical. And they're greener, because over the life of the series fewer notes produced means fewer notes transported, and when they do need to be replaced the notes will be recycled right here in Canada. With these new notes, Canadians can have full confidence in their currency.
The second area of our focus is much less visible to most Canadians. As the fiscal agent of the federal government, the Bank of Canada provides advice and administers the government's debt and its reserves and demonstrates global leadership in these realms.
Innovative work is being done, for example, to reduce the reliance on external credit-rating agencies in the management of the government's assets and liabilities. There's a lot of money at stake. In 2012, the bank managed Government of Canada daily cash balances averaging about $17 billion. We also managed on behalf of the government, official international reserves amounting to about $69 billion.
The third area where the bank delivers confidence is in our financial system. As with any plumbing system, we tend to take notice only when things go wrong. Through the crisis and since, the bank's work has meant that the resilience of Canada's payment clearing and settlement system has been maintained at a very high level, ensuring that Canadians can have confidence that the economy is supported by solid financial market infrastructures.
Financial stability at home is necessary, of course, but not sufficient. The crisis made it abundantly clear that the global financial system needed remodeling and the Bank of Canada has been at the forefront of global reform work. Canada has also made good on our G20 commitments. Among other reforms, we have put in place Basel III capital standards ahead of schedule. We have made significant strides on other market infrastructure reforms, which we can address in detail during our discussion.
These are real accomplishments, and our financial system is stronger as a result. But we must not lose momentum, here in Canada or on the international stage. More work is required to end the phenomenon of institutions that are too big to fail, including recovery and resolution plans for banks. And countries need to address the issue of shadow banking to ensure that systemically important financial institutions operating outside the perimeter of regulation come broadly into line with their regulated counterparts.
Finally, confidence is clearly important for the conduct of monetary policy. Monetary policy in Canada is supported by a governance structure that instills confidence and ensures that Canadians, through their government, have a say in setting the monetary policy framework. Importantly, the structure also ensures the independence of the central bank to make the right policy decisions to achieve our inflation target.
Canada's monetary policy framework is a good one. After a tremendous amount of research, Canada adopted an inflation-targeting regime in 1991. Since 1995 the target has been 2%. We recognized at a very early stage that a commitment to hold inflation absolutely steady at 2% was unrealistic. Shocks to the economy must be taken into account, so the framework was designed to keep total CPI inflation at the 2% midpoint of a target range of 1% to 3% over the medium term.
It bears mentioning that this target is symmetrical: we care just as much about inflation falling below the target as we do about its rising above it. The bank raises or lowers its policy interest rate as appropriate in order to achieve the target, typically within a horizon of six to eight quarters. That's about the time it normally takes for policy actions to work their way through the economy and have their full effect on inflation.
Over the past couple of decades the average rate of inflation has been very close to target. Even during the global economic and financial crisis, our commitment did not waiver. The inflation target is sacrosanct to us and has become a credible anchor for the inflation expectations of Canadians.
A key component of the Bank of Canada's inflation-targeting framework is a flexible exchange rate. While the exchange rate is influenced by such variables as commodity prices, relative inflation rates, and relative interest rates, its value is determined in currency markets.
The credibility earned by the bank over the past 20 years allows us to take advantage of the flexibility inherent in this framework with respect to the amount of time it takes to return inflation to target. The recent turmoil tested the limits of our flexible inflation-targeting framework. Nonetheless, the inflation expectations of Canadians remain well anchored, proving that our framework is secure and working. But it also informs us that we need to validate those expectations to maintain our credibility.
This brings me to a discussion of the domestic context. The severity of the global economic and financial crisis meant that the recession it triggered in Canada was different from any other post-war recession. Canada experienced a particularly deep contraction of investment and exports, as business confidence plummeted along with global demand.
In the immediate aftermath of the crisis, stimulative monetary and fiscal policies proved highly effective in supporting robust growth in domestic demand, particularly household expenditures, which grew to record levels. Yet, as effective as it has been, with domestic demand now slowing, the limits of this growth model are clear.
What's less clear is the rebuilding process that underlies the necessary rotation of growth toward net exports and business investment. While the Canadian economy as a whole has recovered from the recession, thanks to domestic demand, the depth and duration of the global recession delivered a direct, sharp blow to Canadian businesses.
In many cases, temporary plant shutdowns were not sufficient to match the fall in demand. Some firms permanently downsized their operations. Others simply closed their doors. Large job losses resulted. In effect, the recession caused a significant structural change in the Canadian economy. The level of our country's productive capacity—in other words, its potential—dropped, as the bank noted in April 2009. Standard macroeconomic models don't really capture these dynamics.
Just as the financial crisis triggered an atypical recession, the recovery cycle is also unusual. The rotation of demand will require more than just the ramping up of production. The sequence we can anticipate is the following: foreign demand will recover; our exports will strengthen further; business confidence will improve; companies will invest to increase capacity; and existing companies will expand and new ones will be created.
In short, what we need to see is the reconstruction of Canada's economic potential and a return to self-sustaining, self-generating growth.
The sequence may already be under way. We are now seeing signs of recovery in some important external markets, notably the United States and Japan, and there's continued growth in emerging market economies. The bank expects that the gathering momentum in foreign demand should help lift the confidence of Canada's exporters. This is critical for Canadian firms to boost their investment to expand their productive capacity.
To conclude, the bank has a role to play in nurturing that process to the extent possible within the confines of our inflation-targeting framework. There is no conflict between nurturing this and our need to get inflation up to the 2% target.
In monetary policy, actions are critically important, but words, too, matter a great deal. We can bolster confidence by explaining the forces at work in our economy, our projections for what's ahead, and our monetary policy response. And we help nurture confidence by listening to businesses, to labour groups, and to industry associations in order to expand our understanding of what's happening in the real economy.
We must always remember that beneath our economic and financial statistics and analysis are real people making real decisions that can lead to bad outcomes as well as good ones. Those decisions are very hard to make at any time, but when uncertainty is high and confidence has not been fully restored, they can be even more difficult. A lack of confidence can mean that such decisions are simply postponed and opportunities are lost.
To help engender confidence, an active engagement with Canadians must be a cornerstone of the policy of the Bank of Canada, not least of which is a continuing dialogue with this committee.
With that, I thank you for listening and I would be pleased to take your questions.
Merci.
View Shelly Glover Profile
CPC (MB)
Thank you, Mr. Chair.
I want to welcome you too, Mr. Poloz.
I found the look back to your early years to be incredible. I feel that Canadians watching us and listening to you are going to be very happy to see who the new governor of the Bank of Canada is. Thank you; your personal and professional story is very impressive.
I do want to take a moment, Governor, if you would allow me, to go back to your opening statement. On page 3, you make a comment in your statement that we have made significant strides on other market infrastructure reforms, which we can address in detail during our discussion.
I'd like to give you that opportunity, if you'd like, to address what you said in your opening statement.
Stephen S. Poloz
View Stephen S. Poloz Profile
Stephen S. Poloz
2013-06-06 9:53
Thank you.
Thank you for your other comments.
Yes, most of what we've talked about this morning has been about the economic cycle, what the crisis did to us, and what the recovery's looked like so far and what we hope it will look like as it further progresses.
On the other side of this is a global imperative that we modernize the global financial architecture. It's just like an old building: it did well and then along comes an earthquake that was totally unexpected—off the Richter scale if you like—and proved to be almost too big to handle.
The financial sector most importantly is a global marketplace, so all of this needs to be fully coordinated at the global level; hence, the activities of the Bank for International Settlements, and the FSB, which Governor Carney heads up at this point. So that gives us the opportunity to all talk about what are the needs, to agree on principles, and then everybody does the same thing, so that we get a level playing field. It's a very important ingredient.
Since then, there's been a massive strengthening in capitalization. Most countries and certainly most banks—all of our banks—are way ahead of schedule in this. So a significant increase in capitalization, an increase in liquidity requirements that go beyond this.... If you ask me if the banking system today in Canada or globally is stronger than it was back in 2007, absolutely it is. It's more resilient today than it ever has been. Still there is work to be done, and it's a very active area.
In particular, we haven't yet found a full-fledged remedy globally for the too-big-to-fail problem, which is very important. If you have an institution that is likely to fail, it is infectious, and it infects your entire system. It therefore leads authorities to do a bailout to protect the system. We saw that a few times during this crisis.
The idea then is to create an infrastructure that allows us not to have that—what we call bail-in—or resolution plans, or both. If you have a full plan of how a particular institution would be resolved if it ran into those kinds of problems, then you just tell everybody it's happening, and then it doesn't infect the rest of the system. That's a very simplistic way to summarize it. It's a very complex issue because financial systems vary a lot around the world. Again, we're looking for the level playing field where everybody can do the same thing. So it will be ongoing, but I'm very encouraged by that progress.
Brian David
View Brian David Profile
Brian David
2013-05-28 8:47
Sge:no swa:gwego. Bonjour. Good morning.
The Chair: Good morning.
Mr. Brian David: Coming from Akwesasne, we are a community of about 16,000. If you're not aware, our community is divided by the international border and a provincial line. For this very reason, in the early 1990s we negotiated a protocol agreement with Canada to deal with some of the unique features and issues that come up as a result of these multi-jurisdictional areas.
We've been an active participant in the discussions that have taken place over the last several years surrounding the development of federal legislation to address the safety of drinking water for first nations. Last year the Mohawk Council of Akwesasne provided oral and written testimony on Bill S-8 before the Standing Senate Committee on Aboriginal Peoples.
Regarding first nations' views on the expert panel, unfortunately, this has not continued with the drafting of the Bill S-8. We feel there was a lack of consultation and accommodation. I think this is a feature of the shortcomings that we hope to raise with the committee today.
As I've mentioned, we've reached milestones with Canada in self-government negotiations— first with the protocol agreement, then with active negotiations on lands and [Inaudible--Editor]...sectoral agreement. We have an agreement in principle on governance and relationships. We're actively involved in a negotiating mode with Canada for self-government.
I have mentioned before that we have in place a protocol agreement as a background. As an annex to that agreement, in the area of water and water regulation, it's already there. This particular act supersedes and oversees that, which causes great concern to us. The land and sectoral agreement that we're negotiating would encompass many of the issues that are currently being addressed in federal legislation. It is and always has been our opinion that the water quality standards can be established by first nations, that first nations who have the capacity to develop their own regulation and have a tradition in that, should do so. But they should do so in a manner that's not inconsistent with the standards set federally or provincially. All that is to be done should be left to the first nation. It has to be done that way because we all come from different and unique situations across the country.
One issue of particular concern has to do with the derogation clause, clause 3, within Bill S-8. It abrogates and derogates aboriginal and treaty rights to the extent necessary to ensure the safety of drinking water on first nation lands. We take strong exception to clause 3, as it intends to derogate from the existing aboriginal and treaty rights of aboriginal peoples guaranteed under section 35 of the Constitution Act, 1982. Aboriginal and treaty rights are inherently protective of the natural world, including waters. They're based on living in peace and harmony with our surrounding environment. The waters are viewed as bloodlines of our earth, our mother, and our survival depends on ensuring the health and safety of the waters. There is no need for a derogation clause that would take away these rights; they are inherently protective of the waters, and thus to the health and safety of our peoples.
If the existing provincial water laws already recognize and affirm aboriginal and treaty rights consistent with section 35 of the Constitution Act, 1982, the federal water legislation proposed for first nations should be consistent with both the protections afforded in the Constitution Act, and the provisions within provincial water laws that recognize those rights. It is strongly recommended that clause 3 of Bill S-8 be rewritten so that it is consistent with the Constitution Act and provincial water laws, with wording along this line:
For greater certainty, nothing in this Act or the regulations is to be construed so as to abrogate or derogate from any existing Aboriginal or treaty rights of the Aboriginal peoples of Canada under section 35 of the Constitution Act, 1982.
I'll now turn this over to my colleague, Mr. Jim Ransom.
Jim Ransom
View Jim Ransom Profile
Jim Ransom
2013-05-28 8:53
My name is Jim Ransom. I serve as the director of Tehotiiennawakon and oversee the environment, economic development, and emergency measures for the Mohawk Council of Akwesasne. I'm going to address in particular clauses 4, 5, and 6 in Bill S-8. They really represent the heart of Bill S-8.
While we support safe drinking water with appropriate standards, we cannot support the way Bill S-8 is written. In regard to developing standards, we have prepared a proposal to develop our own water and regulatory framework. We have submitted it to Aboriginal Affairs and Northern Development Canada.
It is comprehensive and will meet and exceed the requirements in Bill S-8. It has been prepared in cooperation with the Provinces of Ontario and Quebec. Building relationships around common interests and ensuring safe drinking water for all peoples is important to us. We actually have letters of support for our approach from the Ontario Ministry of the Environment and from the Quebec Ministry of the Environment.
However, the approach we've taken is not envisioned by Bill S-8. Clauses 4, 5, 6, and 7 put us to the back of the regulatory bus. Subclause 5(1) deems us owners of our water systems but fails to recognize our authority to self-regulate those same systems. Instead, it transfers liability without consideration of the condition of the assets being transferred to us, and it sets us up for failure without adequate resources to ensure transferred systems are safe and can be maintained.
Bill S-8 recognizes provincial water laws, but not first nation water laws. Clause 6 allows the Minister of Indian Affairs and our Minister of Health to enter into agreements made under the regulations “with any province, corporation or other body” and related to “administration and enforcement of regulations”, but it doesn't do the same with first nations.
To address these concerns, we offer the following recommendation: that clauses 4, 5, and 6 be amended by including first nations as entities that can be conferred legislative, administrative, judicial, and other powers necessary to effectively regulate drinking water systems and wastewater systems. In other words, don't just make us owners: give us the responsibility to regulate our own systems. The development of regulations must be done with the active involvement of first nations and should have room for recognition of first nations' jurisdiction and authority.
The last concern we have with Bill S-8 is in the sense of how it confers to the provinces jurisdiction over first nation water systems. In doing that, it doesn't consider the reality. Provincial water laws were developed for a different audience. They were developed for their own municipalities. They were not developed with first nations in mind.
For first nations, we have unique circumstances that are not considered by the provinces. We have cultural traditions that are not considered. We have operators in our communities who in many cases have not been trained to provincial standards.
Also, how you deal in remote communities with on-reserve water and wastewater systems is totally different from how you would deal with it in, say, Toronto or Ottawa. That's not being considered.
For us in particular, we're in two provinces. If you're going to confer and delegate down to the provinces, which province? That's a question that we have in particular.
We feel that the legislation can be enhanced by including provisions that allow first nations who have the abilities to develop their own regulations—or groups of first nations working together—to self-regulate. That's the direction the provinces are going in right now because of budget cutbacks. They're trying to get out of the regulatory business. And suddenly in Ontario you're giving them 133 first nations that they will now have responsibility for, with no resources.
We've spoken with them. They're not ready to take on that burden. But we are, because we see it as a responsibility.
With that, I'll turn it over to my colleague Micha Menczer.
Micha Menczer
View Micha Menczer Profile
Micha Menczer
2013-05-28 8:59
Thank you.
Good morning. My name is Micha Menczer, and I am the legal counsel for the Mohawks of Akwesasne.
I will be brief. There is a written presentation in the kit that goes into more detail, but I want to address some of the proposed solutions from Akwesasne. My colleagues have addressed some of them. I want to highlight two areas.
There is a copy in your kit of a political protocol that was entered into between Akwesasne and Canada in 1998, and renewed recently in 2012 for 10 years. This protocol really recognizes the multi-jurisdictional nature of Akwesasne and the problems this creates for the community, both international borders and interprovincial borders. One community, so many jurisdictions, hard to govern, both for the Mohawk Council and for external governments.
It also recognizes a commitment to look for innovative and new solutions that will address this unique situation. There is no other first nation in Canada with these circumstances.
You hear a lot of things in the press about Akwesasne. For those of you who have been there, you'll know it's a very strong community, a well-governed community, and this protocol recognizes it. How does this relate to the bill?
The other piece I want to comment on is that in the spring of 2012, Akwesasne and Canada's chief negotiators signed two agreements—an agreement in principle on lands and estates, and an agreement in principle on governance and relationship. Those are also excerpted in your kits.
The Minister of Aboriginal Affairs recently received cabinet approval, and we are beginning final negotiations this summer. That agreement will recognize Akwesasne's jurisdiction over water and wastewater regulation and standards. Under clause 14 of the bill, upon completion of that agreement the bill would not have application to Akwesasne unless they sought to be on the schedule, as you are aware.
So how do we address these unique circumstances of multi-jurisdiction in Akwesasne? In terms of our recommendations in this area, there are two things.
First, under subclause 5(4) of the bill, there can be a regulation made exempting a first nation for all, or parts of, the bill. Our recommendation—it's in the submission—is that because of the fact that it is multi-jurisdictional, and as Jim has mentioned and as the written presentation goes on to explain, you can't have Ontario and Quebec in each part of the community looking for a consistent system. So we're looking for a concurrent development of a regulation under subclause 5(4) that would set out the regime for Akwesasne—the only one in Canada that is unique in this way.
The second element is that other bills you have—for instance, Bill S-2, dealing with matrimonial and real property—have a transition period when talking about first nations with land codes, to develop their laws before the bills click in. Even the first nations governance act of 2002, which was flawed in many ways, had an interesting provision in, I believe, clause 34 that allowed a three-year period for nations in the process of concluding final self-government agreements to be exempt from the application of the bill, to allow those agreements to be finished and ratified.
We're looking for the same thing in this legislation for Akwesasne. We're entering into final negotiations this summer. Actually, I'm going to a meeting tomorrow with the federal negotiators, where we're going to set the timetable for this.
It doesn't make sense to do that work, have the bill apply, and then un-apply. So we're looking for, similar to what you have in Bill S-2 and similar to the concept that was in the governance act, a three-year transition period to allow us and Canada to complete this work that will give recognition to Akwesasne's jurisdiction.
There is a lot more in here, but another element is that Akwesasne has been recognized by Canada, by Liberal governments, by Conservative governments, as unique through the political protocol, and needing to find solutions. There is a demonstrated capacity. There is a first-class facility. When Minister Duncan was minister, he visited the community and commented very positively on what it was like. The Grand Chief has invited your committee members to come down and see it for yourself.
So there is capacity, and there is a legal basis, based on the self-government agreement negotiations nearing conclusion, and the political protocol to look at this differently.
That's what we're asking.
Charles Weaselhead
View Charles Weaselhead Profile
Charles Weaselhead
2013-05-28 9:03
Thank you.
[Witness speaks in Blackfoot language]
Good morning, Chairman, and members of the standing committee. On behalf of the Blood Tribe, thank you for the opportunity to address you on Bill S-8.
As you know, the Blood Tribe has a population of just under 12,000 on a huge tract of land, so Bill S-8 will affect us not only with regard to our constitution but also in the way the bill is delivered through regulations in our community.
The Blood Tribe, of course, has expressed concerns with this bill, through submissions and representations, from its inception as Bill S-11. Unfortunately, these efforts have not met the intended goals as the existing legislation, Bill S-8, will not provide safe drinking water for first nations peoples. Bill S-8 will put in place a legislative framework that will place the responsibility and liability for safe drinking water systems on the shoulders of the first nations chiefs and councils without giving them the financial resources and the capacity to carry out the responsibilities. Appendix A shows the amount of resources required to make sure we come up to speed with what is necessary for safe drinking water and wastewater management.
By transferring the liability to the first nations, Bill S-8 absolves the federal and provincial governments of liability. We do not see this as the proper exercise of the federal crown's fiduciary duty to first nations, a duty that has been recognized by the Supreme Court. Bill S-8 will not provide safe drinking water to first nations communities. It will only saddle first nations government with a responsibility that they do not have the resources to carry out. When they fail to carry out that responsibility, they will have broken the law and will be subject to punitive measures under the law. That is the situation that will be brought about by Bill S-8.
Earlier, I spoke to Bill S-11, and that was specifically what was stated in there, that the number one priority was to provide the necessary resources before regulation or legislation was set out. How does this scenario bring about safe drinking water for first nations communities? How is this the solution for the desperate and deplorable state of drinking water for first nations communities which has drawn worldwide attention?
In May 2003, Indian Affairs' own assessment of water and wastewater systems in first nations communities found that 75% of first nations water systems in Canada posed a risk and required a massive investment, having been neglected for decades. In 2006, the expert panel on safe drinking water for first nations, commissioned by the federal government, found that the primary issue was insufficient resources for first nations water systems and recommended that adequate resources be a precondition to any legislation. That is spelled out clearly in appendix A of the submission by the Blood Tribe.
The expert panel realized that a regulatory regime would not address the situation. Creating and enforcing a regulatory regime would take time, attention, and money that might be better invested in systems, operators, management, and governance.
In 2007, the Standing Senate Committee on Aboriginal Peoples in its final report on safe drinking water for first nations recommended that the resource gap for first nations water systems be addressed first as a precondition to any new legislation, and that first nations be consulted about the development of new legislation.
Recently, the national engineering assessment of first nations drinking water systems, commissioned by the federal government, found that a $4.9-billion investment is required to ensure that first nations peoples get the same level of drinking water services that are available to other Canadians. Of that, $162 million is needed in Alberta and $30 million is needed in the Blood Tribe. The United Nations has recognized a human right to safe drinking water. Without the required $4.9 billion investment in first nations water systems, this bill will violate our human rights for safe drinking water.
The national engineering assessment also found that in Alberta 64% of water systems cannot afford qualified operators. Only three out of 82 first nations water systems are operating without risk. Some 26% of first nations water systems are high risk, deliver inadequate water supplies, and need immediate corrective action.
These reports, panels, and committees on first nation drinking water systems all come to the same conclusion: only resources will ensure the safety of first nations' drinking water. Legislation cannot create safe drinking water. How can anyone, in the face of credible expert advice, pass this legislation? The $4.9-billion shortfall needs to be addressed. That is what will begin the process of ensuring the safety of water for our first nation communities.
As far as legal rights are concerned, it has been said that the bill is not about rights. That is not true. Safe drinking water for our people is our priority, and always has been. However, Bill S-8 not only fails to provide for safe drinking water, it also gives rise to serious legal issues that need to be addressed. These include no consultation.
Canada is legally required to meaningfully consult with the Blood Tribe whenever it contemplates action that may adversely affect our constitutionally protected aboriginal and treaty rights. Given that the bill provides for the derogation of such rights, Canada's duty to consult has been triggered; however, there has been no consultation with the Blood Tribe.
As far as our band council authority goes, the Blood Tribe council has authority under the Indian Act to pass bylaws dealing with the construction and regulation of wells, cisterns, reservoirs, and other water supplies. The bill provides that the regulations may prevail over any of our laws, including any that we make under the Indian Act respecting these matters. This bill amounts to regulations having the ability to usurp our statutory authority to make these laws.
The expert panel on first nations drinking water did an independent legal analysis of section 35 rights and concluded that there was a sound, legal basis for first nations' right of self government over water in our communities. Canada has refused to consult with us about the implications of Bill S-8 in this regard.
As far as third-party powers are concerned, the bill provides for the conferring of very broad legislative, administrative, judicial, or other powers on some unknown third party, who can, among other things, appoint an unidentified person or entity to manage our drinking water system. Essentially, it could punish us if we failed to adhere to the regulations, through the imposition of fines or imprisonment, or both. The bill further allows this third party to seize and detain things when verifying compliance with the regulations, and to obtain warrants to search places.
On imposition of liability, the bill provides authority to deem us to be the owner of a water system that is not ours. As a result of being deemed an owner, we would consequently possess certain liabilities that we would not otherwise have. At the same time, the bill makes provision for extensive liability protection for third parties and federal and provincial representatives.
On the matter of the UN Declaration on the Rights of Indigenous Peoples, Canada has endorsed that declaration, which states that legislation of this nature must be developed with the free, prior, and informed consent of indigenous peoples. A half-day engagement session on the legislation does not meet this obligation.
Where do we go from here?
We have sent out a profile of the Blood Tribe in appendix A, which is attached to this submission. You will see that we are obligated, through our tribal principles as expressed in Kainayssini, to protect our rights. What Bill S-8 proposes will adversely impact our rights. We are therefore opposed to it for these reasons. We are not opposed to safe drinking water or wastewater management. That must be at the forefront.
For these reasons, as well as the underlying and fundamental reasons we have mentioned above, we do not believe that amendments alone can remedy the problems inherent in this bill. We are of the view that Bill S-8 ought not to proceed at all, because Canada has not discharged its legal duty to meaningfully consult with first nations, including the Blood Tribe. Canada cannot continue to act in disregard of its duty.
We are of the further view that prior to this proposed legislation moving forward in the House, meaningful consultation should occur. We therefore recommend that this bill not be passed or enforced until such consultation has taken place. Additionally, any proposed solution to the issue of safe drinking water, whether by legislation, policy, or otherwise, ought to ensure that practical solutions are provided so that our people ultimately have access to safe drinking water. That ought to be the focus of any action Canada takes, rather than on violating our rights and imposing a paternalistic and punitive approach to the problem.
Our submission does not constitute consultation. We respectfully submit our concerns about Bill S-8 to the Standing Committee on Aboriginal Affairs and Northern Development. On behalf of the Blood Tribe chief and council, thank you for giving us this opportunity to provide the Blood Tribe's submission.
View Jean Crowder Profile
NDP (BC)
Thank you, Mr. Chair.
I want to thank each and every one of you for coming before the committee.
I would like to be able to say that I had some confidence that the committee would be able to amend the bill, but I have to say that my experience over the last two years has been that, almost without exception, any attempts to amend legislation that comes before here has not been voted on by all members of the committee. The opposition has attempted to change these bills, and we've had very little success.
We've been hearing consistently about issues around jurisdiction, the non-derogation clause, liability, consultation, and resources. That's been a consistent message around what's wrong with this bill.
Chief Twinn talked about ending up in court. I have a recent article here that says by 2012, the total legal fees for Aboriginal Affairs will exceed $110 million. So the government is prepared to put money into fighting these cases instead of making sure the legislation is correct.
I think Chief Weaselhead asked a very important question, that given everything we've heard, how can we pass this legislation?
I only have five minutes, and that includes your response time, so I'll ask my question. In the preamble, it says that the Minister of Health and the Minister of Aboriginal Affairs “have committed to working with First Nations to develop proposals for regulations”.
I think you're all aware that regulations are developed outside of the scope of oversight from Parliament and from this committee. What would you like to see in terms of a process? How would you define a process that says “working with First Nations to develop proposals for regulations”? What would that look like?
Chief Twinn.
Roland Twinn
View Roland Twinn Profile
Roland Twinn
2013-05-28 9:34
I do believe we have to develop a table where we can have some actual negotiations, not just input. We need to be able to have some input into what these regulations are so that we can have a grasp of whether or not we can comply with them.
First and foremost, without any resources given to the Sawridge First Nation, I find it very odd that any regulations could apply to us. We do not run a water treatment plant. I'm sure a lot of smaller first nations out there don't have water treatment plants.
How do you expect us to comply with any regulations when we have nothing to regulate? We have no resources to develop any capacity. You want me to be responsible for safe drinking water when the Town of Slave Lake runs the water treatment plant in its entirety. If somebody gets sick, they're not going to sue the town. This absolves the town, the municipalities, and the provincial and federal governments of liability, and throws it squarely on my shoulders. I don't see how that is constitutionally right. Does that not breach my Charter of Rights and Freedoms in terms of undue persecution? I don't think it's possible....
I'll just leave it at that.
View Ray Boughen Profile
CPC (SK)
View Ray Boughen Profile
2013-05-28 9:40
Thank you, Mr. Chair.
Let me add my word of welcome to the panel for taking time out of your busy day to consult with us. We appreciate your involvement and expertise.
Speaking of expertise, given your expertise on water and waste management, are you willing to participate in discussions to develop regulations and share your best practices so that other first nation communities can benefit from your experiences? I would welcome any of the panel responding to the question.
Dorothy First Rider
View Dorothy First Rider Profile
Dorothy First Rider
2013-05-28 9:40
Good morning, everyone. I'm Dorothy First Rider from the Blood Tribe. To address your question and going back to the previous question regarding our regulation, the regulations have to respect the jurisdiction of first nations. We have to understand and appreciate the fact that the first nations are under-resourced.
Most first nations do not have the capacity to be able to begin discussing regulatory frameworks. I believe some first nations, such as the Blood Tribe, are entering into water management discussions with the Province of Alberta. They will be entering into discussions on the jurisdictional and the regulatory framework within the parameters of the existing reserve.
Our first nation, for example, has 548 square miles with 1,600 existing residences. We have five major communities on the reserve. It is going to cost us $30 million to bring up to speed the wastewater and water treatment plants for each of those communities, and approximately $78 million for the next 30 years for the continued operation, maintenance, and upkeep of those water and wastewater treatment facilities. So before we can begin to explore or discuss the regulations, we need to be able to address the capacities of each of those first nations and then amend those regulations to meet the needs of those first nations from now and into the future.
Christopher Devlin
View Christopher Devlin Profile
Christopher Devlin
2013-05-28 10:10
Thank you. I note that it's already past six or seven in Victoria, so I'm fine at this point. It's not quite as early as the last time.
Our comments today are really focusing on the non-derogation clause of the bill, but I want to start by saying that it is critical that there be safe drinking water on reserve. The CBA supports that. The bill, by design, is a framework bill; it's enabling legislation for subsequent regulations. That's fairly obvious, and there's a great deal of flexibility in the bill, particularly with respect to subclause 4(1), subclause 5(4), and clause 7. I'll be coming back to that at the end of my opening comments.
Our concern—and this survives from the previous iteration of the bill, BillS-11—is now with clause 3 of Bill S-8. That's where there's this exception or ability of the regulations to derogate and abrogate the aboriginal rights protected by section 35 of the Constitution Act to the extent necessary to ensure the safety of drinking water on first nation lands.
Our simple point to the committee is that we don't believe this is necessary and we don't believe it is required for the bill to be effective as it's drafted. We don't see anything that suggests that it's necessary for the bill to be implemented, and we also question whether it's constitutionally valid to have this kind of language in the legislation. When we made previous submissions, we have talked about the test for infringement that was set out by the Supreme Court of Canada in the Sparrow decision. I'm sure you've heard testimony about that. It does place safety and conservation of resources at the top of the priority list when one is looking at potential infringements, and then you go down in order after that, to the provision of sustenance and ceremonial and traditional practices for first nations, then to commercial rights, and finally to other kinds of users of resources.
I want to dwell on that for a little bit, because inherent to aboriginal rights and to treaty rights is the safe exercise of those rights, which is something that may have been missed by the drafters of the bill. Safety and the preservation of resources are actually inherent, and the courts have discussed this in a variety of contexts, to the exercise of aboriginal rights. Most of the time the courts have discussed it in the context of hunting. You can't hunt in an unsafe manner. You can't shoot from your pickup truck on the side of the road. You actually have to engage in safe hunting practices, and I think with respect to any aboriginal rights involving water and water management, those have to be exercised in a safe manner.
So we really see this qualification as being unnecessary, because inherent to aboriginal rights and treaty rights is safe management, ensuring the safety of the resource so that it is managed and applied in a safe manner.
The other point that I want to bring up is that because this is framework legislation, we don't have the regulations in front of the committee. We don't really know what they're going to be. I did mention that it's a very flexible bill and that the bill anticipates a variety of regulatory regimes across the country. There could be one uniform regulation. There could be a multitude of regulations—we don't know at this point. And for us, that raises a concern or there being not only a multitude of federal regulations but also the potential for the incorporation by reference of provincial water regimes in lieu of federal regulatory regimes. We're not sure of the degree to which those provincial regimes will honour the section 35 rights of the first nations in question. Those provincial regimes have not been developed, frankly, with any reference, for the most part, to section 35 rights, and so it's quite an open question on how that is all going to interrelate.
Here I think of Chief Roland Twinn's earlier comments. He was anticipating the potential for significant litigation. I think there's a real risk of that here, particularly when we're thinking about the derogation of the section 35 rights by referentially incorporating provincial water management regimes.
I think the ideal way to proceed is to develop regulations on a case-by-case basis with the affected first nations regarding safe drinking water on their particular reserves. Then regulations are drafted specific to those first nations, whether it's the first nations that were here today or other witnesses that you've heard from.
To do all of that does not require the derogation clause or the exception at the end of clause 3 of the bill.
I'll leave those as my opening comments.
Ramani Nadarajah
View Ramani Nadarajah Profile
Ramani Nadarajah
2013-05-28 10:17
Thank you, Mr. Chair and members of the committee.
My name is Ramani Nadarajah, and I am counsel with the Canadian Environmental Law Association.
CELA is a non-profit, public interest organization that was founded in 1970. It's an environmental law clinic that provides legal services to low-income people and disadvantaged communities by undertaking litigation and law reform to strengthen environmental protection.
We agree that improved access to safe drinking water is urgently needed in many first nations communities. The need for an appropriate regulatory regime for water and waste water in first nation communities has been highlighted in numerous reports, which I believe have been alluded to by previous speakers.
CELA has reviewed the bill and we believe that for the bill to achieve its goal of ensuring safe drinking water for first nations communities while protecting aboriginal and constitutional and treaty rights, three key issues need to be addressed.
First, constitutionally protected aboriginal and treaty rights need to be afforded protection under the bill. Second, a multi-barrier approach for first nations water resource management should be incorporated in the bill. Third, first nations governance structures need to be respected.
I am going to deal with the first issue now, which I think the Bar Association has already addressed, the issue of non-derogation in clause 3. CELA notes that the Supreme Court of Canada has already established the test for infringement of protected aboriginal and treaty rights for legitimate legislative objectives under the Sparrow decision. Given the existing jurisprudence on this issue, the limiting section in clause 3 of the bill is unnecessary, in our view.
Consequently, as we noted in our brief that was submitted earlier, our position on this issue is similar to what was addressed before. We don't think that particular section is necessary, but we also note that if there is a non-derogation clause, we submit that the one included in Ontario's Clean Water Act, which was designed for the protection of the sources of drinking water, is the most appropriate provision.
That provision simply reads as follows in section 82 of the Clean Water Act:
For greater certainty, nothing in this Act shall be construed so as to abrogate or derogate from the protection provided for the existing aboriginal and treaty rights of the aboriginal peoples of Canada as recognized and affirmed in section 35 of the Constitution Act....
The second issue the bill needs to address is to provide a more detailed provision about how to improve water resource management on first nation land. To a great extent, the bill's implementation will be dictated by the content of its regulations. However, we note that the list of regulation-making powers provided in clauses 4 and 5 of the bill fail to clearly ensure a multi-barrier approach for first nation drinking water systems, as recommended by the Walkerton and North Battleford inquiry reports.
A multi-barrier approach would require the following: reliable certification of labs; clear oversight and reporting responsibilities; clear delineation of the roles of health and environment water officials, including first nation officials and their governments; reporting of adverse events; delineating responsibility for responding to adverse events, and clear protocols; public involvement of community members, disclosure and transparency; means of receiving expert third-party advice, such as in Ontario through the Ontario Drinking Water Advisory Council; and outlining of resources and funding mechanisms, including for remote and small systems; and providing for infrastructure planning over time. CELA admits that a multi-barrier approach needs to be incorporated into the bill, otherwise it will remain simply as vague enabling legislation.
Finally, CELA admits that there needs to be recognition and protection of first nations' rights over the governance of water on reserve lands. In this regard, we have concerns about paragraph 5(1)(b) of the bill. That paragraph states that the regulations may “confer on any person or body any legislative, administrative, judicial or other power that the Governor in Council considers necessary to effectively regulate drinking water systems and waste water systems”.
The generic nature of this clause is a concern, given that the expertise and professional qualification of “any person” is undefined. That provision has the potential to result in possible loss of first nations' ability to control and manage their lands and water systems.
In addition, we note that clause 7, which is the conflict clause in Bill S-8 , provides that regulations may prevail over laws or by-laws made by a first nations to the extent of the conflict in respect of protection of drinking water.
Both of these clauses, in addition to clause 3 that I discussed earlier, have the potential to undermine the right of first nations to self-govern. Therefore, the committee should consider revisions to these provisions to ensure that this is not the case. Those are all my submissions, subject to any questions you may have.
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