Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 10 - Evidence - Meeting of June 14, 2005
OTTAWA, Tuesday, June 14, 2005
The Standing Senate Committee on Aboriginal Peoples met this day at 9:39 a.m. to examine and report on the involvement of Aboriginal communities and businesses in economic development activities in Canada.
Senator Nick G. Sibbeston (Chairman) in the chair.
[English]
The Chairman: Welcome to our witnesses. We are studying the economic involvement of Aboriginal communities in economic development activities in Canada. We began our study hearing academic witnesses, and officials from various departments have come before us, too. In the next few meetings, we will begin to meet with Aboriginal leaders. On Wednesday night, we are meeting with AFN and the Metis people. We are trying to cover the topic in a general way and get as much information as possible. We welcome you today, and we look forward to the information you can provide our committee. Please proceed.
Mr. Marc Brooks, Director General, Economic Development Branch, Socio-economic Policy and Programs Sector, Indian and Northern Affairs Canada: Honourable senators, it is a pleasure to be here. I will clarify one point: our economic development is under what is known as the Indian and Inuit Affairs Program.
I would like to speak about the efforts within Indian and Northern Affairs Canada (INAC) in bringing First Nation and Inuit communities into the mainstream Canadian economy. While I will focus mainly on successes within these communities, it should be noted that significant barriers also remain to increasing these communities' participation in the economy. I will speak to some of those challenges.
Since my colleagues left will address the North, my comments will focus primarily on economic development in First Nations communities south of 60.
To give some context, most reserve communities are fairly small. In 2001, 37 per cent of First Nations had on- reserve registered Indian populations of 250 people or fewer, and 61 per cent had populations of fewer than 500 people.
While relatively few First Nation and Inuit communities have fully realized their economic development aspirations, their governments are actively engaged in finding ways to increase employment and attract and retain investment.
In response to working with various communities, Indian and Northern Affairs Canada's economic development programs expanded significantly over the period 2000 to 2005 as we develop new programs focused on economic infrastructure, equity assistance or developmental equity assistance for businesses, and resource development negotiations.
Indian and Northern Affairs Canada's economic development programs generally provide funds to community governments so that they can deliver economic development services. These include but are not limited to the identification of economic opportunities, support for enterprise and community planning, assistance in accessing private capital, provision of relevant technical expertise, market research, and licensing and permitting for such things as forestry quotas.
INAC has redesigned its economic development programs based on two major program evaluations and a report of the Auditor General that was to have been tabled in November 2003. I believe it was actually tabled in February 2004. The changes were also undertaken in response to significant engagement of First Nation and Inuit economic development practitioners, and those changes came into effect on April 1, 2005, through the renewal of the department's program authorities.
Through our new, redesigned programs, there are greater opportunities for communities to leverage social policy instruments, such as capital and housing programs or social assistance payments, to assist in a holistic development of the community economy. In this regard, we will support activities such as human resource planning to meet upcoming and forecasted demands, initiatives to enhance community economic development capacity, and provision of technical and advisory service to community members.
In terms of increased opportunities for First Nation and Inuit communities, it has been the policy of this government since 1996 to recognize support for Aboriginal business as a national objective integral to the promotion of industrial and regional development. INAC has consistently played a strong advocacy and facilitation role for the Aboriginal business community through the Procurement Strategy for Aboriginal Business as well as through the industrial and regional benefits policy for major Crown projects.
For example, in 2003, a total of 8,156 federal contracts worth approximately $487 million were awarded to Aboriginal firms. It is interesting to note that three-quarters of those contracts were awarded on the open market, which means that they were not opportunities that were restricted or set aside. That is a testament to how much Aboriginal business capacity is increasing; Aboriginal businesses are able to compete successfully in the competitive Canadian industry.
Since 2000, under our economic development programs we have invested $254 million on various projects in First Nations and Inuit communities. Those investments have helped leverage in excess of $1 billion in project funding from sources other than Indian and Northern Affairs Canada, including other levels of government and the First Nations and Inuit communities themselves.
Partnerships are important for overcoming barriers to economic participation. Most of the physical barriers can be eliminated with investments in economic infrastructure. For example, joint federal, provincial and First Nations financing was used for the Tuck Inlet road project in northern B.C., which will provide the Lax Kw'alaams community with an all-weather road connection to other communities in the northwest of the province. We finance access to lands and resources through working with departments such as Fisheries and Oceans to transfer fishing licences under the Aboriginal Fisheries Strategy. We also fund timber licences to sustain sawmills, as in the case of the Meadow Lake Tribal Council and the Little Red River Cree Nation from Alberta.
In terms of the way ahead, while some First Nation communities have devised strategies to overcome impediments to their development, still many challenges, often related to the Indian Act and/or its regulations, persist in keeping the majority from achieving their development vision.
In this regard, you have already discussed Bill C-20, the First Nations Fiscal and Statistical Management Act. This act establishes the First Nations Finance Authority, which will facilitate the ability of First Nations to access funding for the economic infrastructure necessary to connect reserve communities to adjacent opportunities. There is also the First Nations Land Management Act, which supports community economic development as it allows First Nations communities to design their own management regimes for lands and resources.
In addition to those acts, INAC is currently developing a legislative initiative to bring greater clarity and certainty to the regulatory environment for major projects in reserve communities. This increased certainty will do much to strengthen investor confidence and generate downstream investment.
In conclusion, honourable senators, Indian and Northern Affairs Canada is committed to the continued sustainable development of First Nations communities. Through investments in capacity, economic infrastructure, and clear and coherent legislative initiatives, we are working to equip and empower First Nations and Inuit to achieve their developmental goals.
Ms. Leslie Whitby, Acting Director General, Natural Resources and Environment Branch, Northern Affairs Program, Indian and Northern Affairs Canada: Honourable senators, I will be making this presentation with the input of my colleague Ms. Mimi Fortier, who is the director general of the oil and gas branch. Both of us work primarily, but not exclusively, in the northern territories.
Through the Department of Indian Affairs and Northern Development Act, the Minister of Indian Affairs and Northern Development is the lead federal minister in the North. His responsibilities are delivered primarily through programs and services offered in two general areas. One is supporting northern political and economic development through the management of federal interests, so that we have a federal mandate in the North, and the second is promoting sustainable development of the North's natural resources and northern communities. That is more akin to what you see in provinces.
The Northern Affairs Program has a number of programs and functions that, while not solely directed at Aboriginal business in the same way as those Mr. Brooks mentioned, do assist in their development. I would like to separate those functions into two areas: expenditure programs and resource management. Three expenditure programs contribute to Aboriginal businesses. They are the cleanup of contaminated sites across the North, INAC's response to climate change, and research into northern science and contaminants. In addition, we have programs to look at resource management for the oil and gas industry and the mining industry.
First, the Northern Contaminated Sites Program has the largest single annual budget. In 2004-05, some $75 million was spent in the North. Since the early 1990s, we have spent approximately $230 million in the northern economy on the cleanup of former military sites, distant early warning sites across the North, and abandoned contaminated mines. The program is designed to provide social and economic benefits from project activities to Aboriginal and northern communities, usually communities close to the sites we are working on. The projects provide jobs and purchase services from Aboriginal and northern suppliers.
For example, the cleanup of the Resolution Island former military site, located about two hours from Iqaluit out in the bay, is one of our largest cleanups. That project has been contracted to Qikiqtaaluk Corporation, an Inuit-owned company. In 2003, 91 per cent of the 78-person workforce was Inuit and they received $1.7 million in salary payments. In addition, sales by local businesses amounted to about $12 million in support of the cleanup.
The second function is related to climate change, an area in which we work both in northern Canada and across the country with First Nations. We look at the deployment of energy efficiency and renewable energy programs in Aboriginal communities and at how these communities take on the development of these businesses. We provide about $8 million a year through the Aboriginal and Northern Community Action Program to promote new energy technologies and measures.
One of our most successful projects is with the Hupacasath First Nation, which is close to Port Alberni on Vancouver Island. They are building a small micro-hydro project in their traditional territory close to their reserve. The benefits will include about $3.6 million for 80 person-years for the construction phase of this development and about $1.1 million for16 person-years in long-term jobs for operation and maintenance.
The third expenditure program is the Northern Science and Contaminants Research program, which amounts to about $4.4 million annually. It studies the health risks of contaminants in northern air, which usually do not originate in the North but come from around the world and accumulate in the natural ecosystems in the North, which are the sources of food of Aboriginal peoples. Aboriginal organizations receive funding from this program to develop their own capacity to do research and to explain to their communities the implications of these contaminants for the health of the population. They have ongoing, long-term studies that follow the health of the communities.
The minister, under the resource management part of his portfolio, issues oil and gas rights on Crown lands across the North, including in the Northwest Territories, Nunavut and the northern offshore. Under the Canada Oil and Gas Operations Act, companies seeking authorization to undertake exploration and development activities must submit a benefit plan to Indian and Northern Affairs Canada for approval prior to undertaking exploration or production activities.
Each benefit plan sets out a company's policies and programs to provide employment and training opportunities for northern and other Canadians and full and fair access on a competitive basis to contract opportunities in the North. Companies are expected to look first to the residents and businesses in communities close to their activities while implementing these plans. In the Northwest Territories and Nunavut, the population of most communities is primarily Aboriginal peoples, and most businesses are Aboriginal-owned. Thus, Aboriginal people and their businesses are the primary recipients of the opportunities made available under many of the benefit plans.
Two factors that have greatly assisted in the development of both employment and business opportunities, particularly in the mining sector in the Northwest Territories, are the impact and benefit agreements and the associated socio-economic agreements. The impact and benefit agreements, sometimes known as participation agreements, are usually negotiated voluntarily between the local Aboriginal organizations and communities and businesses wishing to operate in their traditional territory or in the land claim areas, as the case may be. There is no legislative base requiring an impact and benefit agreement, but the federal government strongly recommends that companies enter into negotiations with the affected Aboriginal groups in order to reach the agreement before they start their activities.
Socio-economic agreements are required by the Government of the Northwest Territories to ensure that the non- affected communities in the territory also benefit from the resource developments. They include much the same things as the impact and benefit agreements, but encompass the entire population of the territory.
The department provides funding to Aboriginal peoples to establish and expand businesses to provide goods and services in the North. You heard Mr. Brooks talk about that. In some cases, joint ventures have been established between northern Aboriginal companies and more experienced service companies from southern Canada, to the benefit of all.
For example, the Inuvialuit have a longstanding joint venture, Akita-Equtak, with Akita Drilling, one of Western Canada's foremost oil and gas drilling contractors. When it became evident that there would be an increase of oil and gas exploration in the delta in 2000, the Inuvialuit sought funds from Indian and Northern Affairs Canada to acquire new heavy-duty Arctic drilling rigs in order to enter into this joint venture.
Ekati in the Northwest Territories, the very first of the diamond mines, is another recent example. Kete Whii Limited, which is owned 50 per cent by Dogrib Trustco, 25 per cent by Deton'Cho Corporation and 25 per cent by Densoline Corporation, became equity partners in the purchase of two ore haulers and the construction of the maintenance building at the site. They have two nine-year contracts with BHP Billiton to maintain the land and the road and haul ore from Misery Pit to the Ekati processing plant. The contract is worth $32 million and employs 24 people.
In doing this work in the North, we have looked with companies and Aboriginal organizations at some of the impediments to greater Aboriginal participation. For simplicity, we have narrowed the impediments down to inadequate levels of education, insufficient training, and inadequate work experience. These are barriers to both government and companies, and we are working together to try to overcome them.
For example, most companies do provide adult education on site. In the example of Resolution Island, we brought Nunavut Arctic College onto the site to train and license people in the use of heavy equipment when it came to light that without that licence they were not able to work on the site cleanup. They learned reading, writing and mathematics. Under many of the impact and benefit agreements, the companies also provide university scholarships for Aboriginal students.
Experience has shown that the petroleum and mining industries recognize the importance of involving Aboriginal and northern residents in their employment, training and business contracting opportunities. Aboriginal and northern residents have demonstrated their willingness to respond positively to the benefit opportunities and to perform well as trainees, employees and business suppliers. Most opportunities and contracts are being awarded on the open market. In the end, all parties, including governments, acknowledge the benefits of our shared responsibility.
The Chairman: I have a question for the witnesses: are you each in the highest position of your division?
Mr. Brooks: In terms of economic development for the Indian and Inuit Affairs Program, I am the director general responsible. I report to a senior assistant deputy minister. My overall responsibility is to the deputy and associate deputy minister.
The Chairman: Ms. Whitby, are you acting in your position?
Ms. Whitby: Yes. Most of the expenditure programs we talked about are my responsibility. We have directors general in the regions as well, and we all report to an assistant deputy minister.
The Chairman: I sense that you are not particularly familiar with the details in your presentation. For example, you said that companies provide on-site adult education courses to enable employees to learn. Do companies in the North provide on-site education courses?
Ms. Whitby: I do not know that every company does on-site education but many do as part of agreements that they sign with the government. Resolution Island is probably the first, large-scale example that we undertook, for which I was responsible. We brought Nunavut Arctic College in to do the training and a science and technology group from Alberta for the training and licensing of the heavy equipment operators.
When the weather was not conducive to working, people spent their time learning. Many of them finished with certificates. The large diamond mines currently underway have basic and advanced education courses for apprentices. Mr. Voutier is more familiar with the oil and gas industry.
The Chairman: I was under the impression that only large companies had sufficient resources to offer such courses. Many companies operating in the North are small or medium-sized and do not have the necessary resources. Some committee members have been to Yellowknife and the diamond mines and have seen evidence of employee training, which is positive. I was unaware that the practice went beyond the diamond companies and some oil and gas companies to other businesses in the North.
Ms. Whitby: Our primary responsibility is in resource management. Over the last few years it has become the norm for agreements to include this practice. I know that some logistics and supply companies undertake training for employees, but those businesses are much smaller.
There is a general recognition by the territorial governments that employees need those skills. Many joint projects are being developed between the territorial governments and Human Resources and Skills Development Canada.
The Chairman: In another statement you said that, in addition, companies provide numerous scholarships each year to encourage Aboriginal students to stay in school. I would like you to qualify that. The message sent by that comment is that every company in the North is providing scholarships and many opportunities. Could you qualify that?
Ms. Whitby: I do not know how widespread that practice is. About two years ago, 52 students from the Dogrib area were on scholarship outside the territory. Those scholarships were provided under the agreements that the Tlicho communities made with the two diamond mines, Diavik Diamond Mines Inc and BHP Billiton. The chief expressed concern about finding jobs for those highly trained students when they return. I believe that three years before that, four students were in university on scholarship. Our experience is in the resource sector, and we would have to look at statistics across the territories to know how widespread the practice is.
The Chairman: The comments are specific to the diamond mine industry. We are aware of the Dogrib scholarships because we have had a great deal of contact with the Dogrib community over the past few months regarding their land claim. Their involvement and new-found status are evident at the diamond mines. More than 200 Dogrib students attend school in the south to receive a good education and training that is very much restricted to the diamond mines.
Saying that companies provide numerous scholarships gives the impression that this is a common feature of companies operating in the North. I think you need to qualify the comment so that people do not think that every company provides scholarships and everyone in the North receives scholarship opportunities. Is your presentation realistic? Is it truly that good in the North?
Ms. Whitby: I limited my presentation to resource development companies and departmental programs. I did not speak to all businesses in the North. Mr. Voutier can provide information on the oil and gas industry.
Mr. Keltie Voutier, Senior Policy Advisor, Northern Oil and Gas Branch, Northern Affairs Program, Indian and Northern Affairs Canada: I am with the Northern Oil and Gas Branch of Indian and Northern Affairs. I report to Ms. Mimi Fortier, who is the director general of the branch.
Our group is comprised of 14 people who manage rights issuance, royalty collection and policy development for the entire northern oil and gas sector. We have hands-on involvement with the companies and deal with them on a daily basis, as well as Aboriginal groups and territorial governments.
In terms of economic activity and growth in the territories, it is fair to say that the players currently driving the economy are the mineral sectors and not just the diamond mines. Other exploration companies in the North are staking lands and trying to find discoveries of base metals and diamonds. In addition to that, the oil and gas sector is extremely active right now, primarily in the Mackenzie Delta, the Beaufort Sea and the southern Mackenzie Valley. We are talking about very large companies, and I will be specific to the oil and gas sector.
The cost of drilling a typical gas well in the western sedimentary basin in southern Alberta would be on the order of $1million or $2 million. When you move that into the southern Mackenzie Valley, the cost jumps to $10 million or $12 million because of the cost of moving supplies and equipment to remote locations. When you get to the Mackenzie Delta, those costs jump to $25 million to $30 million. When you get to offshore, for example the Beaufort Sea, those costs can quickly jump to $50 million or $60 million.
The last round of economic activity in oil and gas exploration was funded largely by government grants. Companies are up there now investing their own money. They do have deep pockets and are big players. They have the choice of investing anywhere in the world, but they are up North now because it is the right time to be there.
I cannot say categorically that they all provide scholarships as a matter of business, but we do have ample examples. I have a press clipping with me in which it is stated that Paramount Resources has been providing scholarships to keep kids in grade school. I have other information that Esso provides scholarships to high school students in Norman Wells to keep them in school. Companies do this because they realize it is good business.
Increasingly, you see that oil companies are becoming energy companies. They are adopting methods of sustainable development. They understand that investing in the environment and in the people who are there is not just good for the environment and the people, it is also good business.
As part of their benefit plans, they are required to provide training and opportunities. They do that because it is cheaper in the long term to train someone who is from the North, whether from an Aboriginal community or a northern community. It is much better to train those workers and have them living in the communities they come from than to bring in other workers. It is a matter of a standard of business.
ConocoPhillips, for example, has a small brochure outlining how they try to integrate economic considerations based on the bottom line with investing in the social infrastructure in the communities in which they operate. In this case, it is the tar sands project, but it is up North where there is a significant component of Aboriginal communities. At the same time they are investing in the environment. At the end of the day, they find that the footprint on the environment and the impact on society and the bottom line all tend to move the same way.
In a very broad sense, that is a perspective from the oil and gas side of our organization.
Senator Watt: Does Indian and Northern Affairs not still have a role to play in issuing work permits, leasing lands, and things of that nature? In a sense you are laying out certain conditions that those companies have to follow in relation to Aboriginal people.
Mr. Voutier: Yes.
Senator Watt: By saying that, perhaps all companies should be encouraged to look at the situation not only in the short term but in the long term. I refer to the implications attached to climate change and other factors.
There is also the possibility for the educational sector to develop apprenticeship programs. Thirty years ago there used to be such opportunities within the Department of Indian Affairs. I am not sure whether those opportunities still exist today. I know for a fact that that program that worked, because I went through an apprenticeship program to acquire mechanical engineering. We took our practical in the North and our theory down south. If apprenticeship programs do not exist today, I recommend them as one area that should be developed.
You should also be laying out certain conditions when dealing with companies that have an interest in the North. I refer to companies that drill for oil or mine for diamonds. They should be encouraged to make some long-term investment rather than just looking at it as a short-term investment. That would benefit Aboriginal people a great deal.
Perhaps I should allow you to respond to my first points before I move on to the northern strategy aspects. I am from Nunavik, not Nunavut. As such, I wish to highlight for you how important it is for Nunavik to be included in this northern strategy. I will get into that after. Perhaps you can respond to the points I have raised.
Ms. Whitby: Mr. Chairman, I will respond first concerning what happens in the territories.
We now issue many permits in partnership with boards of public governance. We do not generally attach socio- economic conditions to a land-use permit, which is where an impact and benefit agreement comes into play.
Sometimes there are what we call environmental agreements. If there is a large area we would like to address that has been identified through the environmental assessment process or the land and water board process, then we can put that into an environmental agreement. It is in those agreements that you could see negotiations to develop training and procurement from local businesses.
On apprenticeship programs, senator, you are quite right. That is why these days most of those programs in the territories are run through the college system. We brought Nunavut Arctic College onto Resolution Island so as to give people on-site access to the program. We try to do as much of that as we possibly can. We have seen a large increase in the number of people who have those skills, along with the certificates to demonstrate that they have them. We have used them extensively. They are very useful.
Mr. Brooks: Senator Watt, concerning apprenticeship, the majority of skills development work is the province of Human Resources and Skills Development Canada. I have an organization called the Aboriginal Workforce Participation Initiative, whose main role is to work with major employers on the private side primarily to prepare the workplace to attract and to retain Aboriginal workers. We take an inventory of the skills that are needed. We also look at the goods and services side, because not everybody wishes to be an employee; many people have their own business. There is a large amount of entrepreneurial development in the Aboriginal world.
Our aim is to assist Aboriginal companies to break into working with private sector companies. We work closely with the Aboriginal Human Resources Development Agreement holders. I refer primarily to the skills training funds that are allocated from Human Resources and Skills Development Canada down to various Aboriginal works. We work closely with the holders of the agreements and the community economic development organizations to help put training plans together. We do this so as to focus on some of the opportunities that exist, such as apprenticeships. We also work closely with many of the provinces. We have several agreements signed with Alberta, which is a prime example when we talk about the resources sector, especially the oil and gas sector in the Fort McMurray area. They are crying for skilled labour. Thus they are interested in how to tap into the Aboriginal talent pool that exists there.
We are trying to work on the periphery as part of economic development, recognizing that we do not have the main responsibility for it.
Senator Watt: Before I go on to the northern strategy issue, I would like to respond to the question of environment land use planning. You can take it one step further to include social impact, because social impact and environmental concern are interconnected. Certain specific agreements, such as the James Bay and Northern Quebec agreement, the Inuvialuit agreement and the Nunavut agreement, have a tendency to separate the two and put each of them into a little box. It has to be understood that they go together. I think you are definitely in a position at least to make some recommendation to industry to look at laying out the possibility or even the conditions by working closely with land use planners. Several land use planning committees exist now under the modern treaty agreements.
Mr. Voutier: In terms of the oil and gas sector, we manage rights issuance on an annual basis. We offer up Crown land for companies to bid on for exploration purposes, but prior to putting land out for bid, we consult with all stakeholders — Aboriginal communities, territorial governments and other interest groups — to see if there are social, economic, cultural or archaeological concerns with the lands that companies want to bid on. In many cases, lands are not put open for bid because they are a value to Aboriginal communities or other northern communities for hunting purposes or cultural reasons and so on. We do try to take that into consideration.
Senator Watt: On the question of the northern strategy, I would like to point out what was said at the roundtable held about two weeks ago at the cabinet level. One of our representatives, Pita Aatami, the president of Makivik Corporation, indicated that Makivik should directly participate when there is a discussion on the northern strategy. I would like to put some meat around that, if you would allow me.
Makivik, as you know, is sort of a mother corporation and there are many subsidiaries underneath the mother corporation. We own two airline companies. I am glad to be able to tell you that we have not received one penny from the government to assist the survival of those companies. We are making a good profit.
First Air flies from east to west and north to south, all the way to the Yukon. We are the major air carrier in the Arctic aside from Canadian North. I do believe that we carry much more and are more active in the Canadian North. That is one of the reasons we have to be part of the northern strategy. We need to know what is being planned and where the government is going with various industries so that we can get prepared to carry the customers where they need to go. That is one aspect of it.
The other aspect, which is also of a great deal of interest to Nunavik, is the fact that climate change is here. It will not disappear. It will not retreat. It will get worse and worse. I think we all know that. At the same time, opportunities have arisen on account of that. The Northwest Passage, for example, is a route that will be adopted very soon — perhaps sooner than expected. I will not be surprised if we Canadians get caught with our pants down when the Americans start transporting their goods from the other side. We have a great deal of interest in wanting to know what is happening. Preparations have to take place in regard to the ports if that route is taken immediately.
Climate change also has to be taken into consideration because the water is rising and the permanent ice is melting. For those reasons, there must be a thorough scrutiny of what is going to happen down the road. Scientific information as well as traditional know-how will be needed. We can contribute.
At the same time, we want to ensure that when the economic opportunity comes along, we are not left on the sidelines watching ships pass by through the North and watching that economy skip by. For that reason, we definitely have to be part of that northern strategy.
I would like to go a bit further on that. You should bring up with your superiors the possibility of soon striking a committee to deal with the whole business of alternate routes for shipping, if we do not want to get caught with our pants down.
It is also important to us as Nunavik people and as an airline carrier that there are already airline companies operating and flying directly over the Arctic rather than following the traditional line of airline transportation. At this point, the only limiting factor is the lack of navigation availability, from satellites, for example. Again, we have an interest there as an area of potential investment. Makivik is a business organization with subsidiaries, so we have a great deal of interest in that area.
We have already begun to dialogue with the Russians about a joint Canadian-Russian venture that would flow over the Arctic between North America and Siberia.
We have a great deal of interest in those areas, and I wanted to make sure you take note of that. It can only be beneficial to both sides if we work together in that field.
Ms. Whitby: May I respond to your comments on climate change? I mentioned during my presentation that we have a program called the Aboriginal and Northern Community Action Program. Most of that has to do with mitigation, energy efficiency, and technological change, looking at diesel communities and their emissions and how to make them more resilient at a time when the costs of energy keep increasing. That program is deployed across the country, so it is in northern Quebec.
Also, we are beginning to work with Aboriginal leaders such as Sheila Watt-Clouthier in looking at what needs to be done to adapt to the coming changes. Even if controls are put in place, the changes will keep accelerating. There are tremendous implications for people who live off the land. We are looking at what business opportunities there might be, but we are also considering how to protect community infrastructure from melting permafrost and rising water levels and examining the risks associated with the changes in animal migration patterns.
We started that work about two years ago with the Arctic Climate Impact Assessment, when we began to see what the science was telling people. That document also contains a lot of traditional knowledge of northern Aboriginal people.
We are at the point now of trying to document what needs to be done and to develop the type of programs northerners would like. ``Northerners'' include Inuit from northern Quebec and Labrador and Aboriginal peoples from across the country. That work is underway. We are hoping to have a draft that is done collectively not just by government but also by Aboriginal organizations and territorial governments and scientific institutes in the North. We are hoping to have a document ready by December that will address many issues. What do we do about the Northwest Passage? When is the ice predicted to move out, and what is the economic implication of that?
The Chairman: Senator Peterson is anxious to ask questions. We will return to you, Senator Watt.
Senator Watt: I would like to ask about emissions and other environmental issues.
Senator Peterson: In your presentations you rightly indicate the importance of economic development in the North. Yet, it is my understanding that under program review INAC reduced its economic development budget by some $300 million. Is that correct? If so, what impact will that have on your ability to deliver your programs?
Mr. Brooks: The envelope I am responsible for was reduced. The figure of $300 million is not accurate, although it will eventually be $300 million. We will lose $29 million from our envelope per fiscal year. Over five years, that adds up to $150 million. Taking the leverage factor into account, it amounts to in excess of $300 million. We did lose funding under expenditure review. The economic development envelope within INAC is one of the few areas considered discretionary, as opposed to the non-discretionary fiduciary responsibilities that we have. As honourable senators know, all federal departments had 5 per cent of their discretionary budgets reallocated to the centre for higher priorities. Our department had very limited options and it was decided that the economic development envelope would be reduced by $29 million after three fiscal years.
Our department used to be active in what was called developmental equity assistance, which provides matching funds for First Nation and Inuit entrepreneurs to enter into business ventures, co-ventures or co-joint ventures. We have retreated from that area. Having said that, Aboriginal Business Canada does take care of Aboriginal business activities more on a pan-Aboriginal basis than a distinctions-based basis, that being First Nations and Inuit.
Senator Peterson: I think it is wrong to make cutbacks that will affect the entrepreneurship of Aboriginal peoples as they are trying to get ahead by making strategic alliances. It makes no sense to me to cut that funding. I understand that your funding was cut, but there must be other areas that could have taken the hit more easily than this area.
We were told in other presentations that 11 federal departments are involved in supporting Aboriginal programs and that they administer about 26 programs. Is this the most effective way? If those programs are just for economic development, that seems very confusing.
Mr. Brooks: We originally operated eight programs under the economic development envelope. We have reduced that number to two as a result of the Auditor General's review of our economic development activities. The Auditor General said that we had too many programs, which made it confusing for the participants. We understood that, so we did our own rationalization.
You are correct that there are activities involving other departments, although many of the other activities are sector-specific. For example, the Department of Fisheries and Oceans has activities that are quite technical in approach, as does Natural Resources Canada in the forestry area.
At the Aboriginal roundtable on economic opportunities led by Industry Canada, we will reconstruct an Aboriginal policy framework in Aboriginal economic development. The purpose of that is to find the best way to reposition the plethora of programs that exist to make them easier to apply for and work with.
Senator Peterson: In anticipation that the Mackenzie Valley pipeline project will go ahead, are you taking any preparatory steps to ensure that Aboriginal peoples will be able to participate fully? As was said earlier, skilled trades people will be required. Will we get ahead of the curve and try to ensure that they will be ready?
Mr. Brooks: I will address that in part and then turn to Mr. Voutier for more specifics.
We have provided quite a bit of support to the Aboriginal Pipeline Group that was originally putting the activities together in the Northwest Territories. Their activities included community consultation and pre-positioning work, that is, learning what opportunities will be coming up and how to get ready for them. Much of the advance work has been done.
Mr. Voutier: The Aboriginal Pipeline Group has a one-third interest in that project and obviously they will derive economic benefits as it proceeds. In addition, the project will require the regular socio-economic impact assessment. That one has 20,000 pages, I believe; it is very detailed. The implications of that project for economic opportunities for Aboriginal communities are being addressed through that process.
In addition, as we move from regulatory review into the construction phase, the companies will be required to submit development plans, including benefit plans. The regular processes will apply, and I am confident that the opportunities you think should be provided for Aboriginals and northern communities will be there. I agree with you on that.
Senator Léger: I understand from what I have heard that the first priority is the economy, with human resources coming after. We need money to live, but the human aspect should always have equal status. Not everyone has the talent or the interest to be a mechanic. You referred to the need for training programs for Aboriginals to operate the giant trucks, which I was stunned to see in Yellowknife. Be it technical studies or carpentry, it takes a lot of time to learn those skills.
I believe that human aspects should be included in discussions on tangible aspects. When companies present projects, the human aspect should always be considered, because their success will depend on the happiness of the employees. There is a strike in the school system right now. The first thing that will be cut is extracurricular activities. Instead, if math and science were cut off for five or six weeks, things would change quickly. That speaks to the human aspect of the situation, and it is the same in business.
Do you face barriers when trying to do the work required of your position with INAC because of departmental policy or elements of the Indian Act? Is there anything we can do to help you?
Mr. Brooks: Thank you, senator, for the interesting question. I will be careful of the way I respond because I am not ready to retire.
As I mentioned in my presentation, the department is working on some legislation through another organization to circumvent the Indian Act. The Indian Act currently puts constraints on communities. Until that is resolved, we need measures to encourage communities to position themselves to take advantage of economic opportunities. This committee could help by supporting the department in the same way that it provided support in respect of the First Nations Land Management Act and the First Nations Finance Authority.
We appreciate that there is no panacea to solve the problems of all communities From the perspective of the department, there will always be a need to provide support. Much of the support under the current programming is the support needed to develop community capacity, which is human resource capacity, to enable communities to develop joint ventures with companies without hiring outside, expensive resources. The basic goal is to provide communities with the resources they require in order to have skilled people capable of attracting the needed investments. Those resources may be human capital, social capital or investment capital.
Our role is to provide resources for setting the pre-conditions in a community. Since we stopped the developmental equity aspect, we have been working on setting the physical and social infrastructure of a community to attract and retain investment. We know that governments of all levels will never have enough money to invest in the various opportunities. For example, how do we provide the resources so that one-third ownership can be applied to the capital markets to access investment capital? In respect of the pipeline, we provided funding so that they could hire the financial expertise to prepare the business plan to access the financial markets of Wall Street and Bay Street. We will always require some form of program support to deal with the activities and to set the conditions to help communities take charge of their own economic destiny.
Ms. Whitby: I have worked in northern Canada since 1974 and have watched the cycle of the economy change, even since coming to the department 11 years ago when there was little economic development. We are dealing with something different, so it would be helpful if the committee could continue to communicate what it is like for people at the community level. Senator Peterson wondered how people in the communities deal with so many government departments and programs.
Regarding climate change, we have an agreement with colleagues in other departments with similar programming to use one window into all Aboriginal communities. In that way, communities know that they deal with either the department or an intermediary. We have a system of energy pathfinders who work at the community level to bring all federal programs together. For example, they look at how to share best practices from one community to another. People at the community level ask about that, so we produce documents that share the story from community to community.
In the federal government, we work at such a broad, high level that we do not understand how a community makes a decision and how can it change its relationship to energy in an effective way that contributes to climate change solutions and deals with adaptation. It is important to understand the best way for government or business to deliver a program. That information would be helpful and I will look for it in the report of the committee.
Senator Léger: You mentioned the communication of information. That is where the greatest need is. You said that it is difficult for communities to understand all the separations of government. We do not know what the communities' various perceptions are of all that is happening in government. Education in the community is necessary, but information on the communities must be communicated to government first and then people in the communities must understand what government is doing.
Senator Watt: You mentioned the programs under Natural Resources and Environment Branch in respect of climate change. Is there a fund solely for scientific purposes for finding a solution to the climate change problem? Are monies available to begin the installation of devices in furnaces, diesel motors in plants, outboard motors, aircraft and snowmobile engines? Is the department ready to begin implementing new technology? The technology has been developed but has not been advertised publicly.
Ms. Whitby: We have the monies for that and are ready to go. We work across the country through a third-party technical organization that we referred to as the energy pathfinders. There are pathfinders in Quebec and in Nunavut.
Senator Watt: What is that?
Ms. Whitby: They are usually technical organizations that work with the communities on behalf of the department. Generally, a community would begin with an energy plan looking at the community's relation to energy, how it uses energy, where the energy sources are, what individuals can do and what the community can do collectively. We are able to access funds from a variety of different departments to help with retrofits or grant systems for the home energy guide for a community that wants to put energy efficiency into its homes.
Many communities are looking at the use of small, renewable energy resources for hydro and wind energy on traditional territories that would provide a source of income over time for a community. We have windmills in Eskasoni, Nova Scotia, that have been funded through a combination of the programs Mr. Brooks and I are responsible for and private sector equity. These communities are raising funds to run businesses on behalf of their communities. Our program provides up to $250,000 for the communities to develop their capacity and their business plans so that they can then go to the equity markets. The funding we provide is not sufficient to put up the entire windmill, but it does supply enough to do training and to make a business case. The communities doing that are on an equal footing with any other community in Canada.
Senator Watt: Could the program funds also be applied to the water problems we face everywhere in the North? If verification equipment is put together by a scientific community and is proven to be of use, would the department be prepared to go forward with something that is now just in the experimental stage? Do they have money for that?
Ms. Whitby: I would have to look at the specific case.
Senator Watt: Could you provide us with information on some of these programs so that we can study them for ourselves?
Mr. Brooks: We will do that. We have a water strategy. I will inquire of one of my colleagues and provide the information to the committee.
Senator Watt: Do you feel there is sufficient engine room to deal with that? When I use the term ``engine room'' I am talking about having enough people to make the decision as to which direction to take. Do you have mechanics in place now in your department?
Mr. Brooks: I am not the technical expert on this subject matter.
Senator Watt: Sheila Watt-Clouthier is my sister. She is a member of the environmental group. I do not know what her exact role is with that group.
Are there mechanics in place to execute the decisions, such as spending $250,000 now? In relation to environmental matters and climate change, thus far there has been much talk but no action. I have lived in the North and I witnessed that on a daily basis.
Ms. Whitby: Our program is only two years old. It was announced in August 2003. We do not have mechanics on staff. That is where we use third-party Aboriginal technical services. In Ontario, we use the Ontario First Nations Technical Services Corporation. In northern Quebec, we are using Inuit Tapiriit Kanatami. We have supplied funding for them to hire the expertise on staff to assist them. We have provided the Assembly of First Nations with that technical capacity as well. It is a very technical business. It has always been the communities that make those decisions.
Senator Watt: Who are these technical people you speak of? Are they inside government, outside government or third parties? Who are they? What authority do they have?
Ms. Whitby: I will have to look at what authority they have. They are outside technical organizations. For example, Ontario First Nations Technical Services Corporation works with all the First Nations in Ontario to build schools. They provide that expertise to the communities. I am not sure how they are funded. I can find out for you.
Senator Watt: If I could have more information on those programs, I would appreciate it.
Mr. Brooks: We will find that information for you.
The Chairman: We have undertaken this study because we are pretty excited about the things that are happening among Aboriginal people throughout our country. In our travels and from our own experiences we see that there is something happening among Aboriginal people. They are becoming involved in economic development. In a sense, they are becoming involved in the life of our country.
I come from a part of our country in the Northwest Territories where Aboriginal people are faring reasonably well. There has been a lot of positive development, and not only politically. Aboriginal people have been given many opportunities. As a result of land claim settlements, the Aboriginal people are involved in northern society in a meaningful way. I am not talking only about political involvement as members in a legislative assembly or as senators but also about participation in all the various institutions of society. There is an Aboriginal presence in CBC in the North. It is pretty exciting to see that happen.
I am not as familiar with the situation in the south. In our travels I have seen pockets of Aboriginal peoples beginning to take an active part in industry. You see that in places like Westbank and Vancouver. It is exciting.
It is important that people get training and then find jobs. However, it is just as important that those people become involved in the next level of economic opportunity as business owners and participants. It takes much more skill and commitment, but it is beginning to happen. That is what we are trying to focus on, to capture. We are interested in knowing what factors lead to Aboriginal success. Is it governance? Is it institutions that are set up? Is it a strong sense of cultural identity? Is it leadership? Is it location? All those factors have a bearing on Aboriginal success.
It is interesting to note that most of the progressive Aboriginal people we have encountered are getting away from the effects of Indian and Northern Affairs. That is positive. When people become independent, when they are stronger and better educated, they are able to proceed on their own merits.
If we were to analyze all these events, would we find that Indian and Northern Affairs has had a hand in their progress? Or are people getting on their feet in spite of Indian and Northern Affairs? You may not have had a chance to consider these things. That is where we are coming from. Our study is focusing on the phenomenon of Aboriginal people getting on their feet. It is exciting. It is happening in many instances. I do not know whether it is just that it has taken all these decades to get Aboriginal people up to the level of education and work experience where they are able to take part. We see the involvement of the Tlicho, the Dogrib and the Dene in the diamond mines.
I do know that while the initiative and aggressiveness of the Aboriginal people are a factor in opening the doors, the companies are not simply allowing Aboriginal involvement out of the goodness of their hearts. They are being pressured. They are being forced, in a sense. As well as the Aboriginal people's willingness to be involved, we need the big companies to be open, to have a social conscience, to recognize that Aboriginal people need to be involved. There is a labour shortage, and it is in our best interests to train the Aboriginal people and have them participate. I am aware of the involvement in Fort McMurray of people like Dave Tucker and others. Somewhere along the line, companies have decided to engage with Aboriginal people. The participation of Aboriginal people and the openness and commitment of large companies to have Aboriginal people involved and to participate in their economic projects is wonderful.
That is what we want to get a handle on and write down so that it can be useful to government and industry. Eventually, we hope to describe the basic factors needed for Aboriginal people to be successful. There must be leadership, a strong cultural identity and land tenure. It helps tremendously when you own land and you have some control or power over the land, which you can use to negotiate with companies and government. There is also location. We want to identify the factors that lead to success.
At the same time, we can look at areas and pockets in our country where Aboriginal people have not succeeded. Why do we have our Davis Inlets? Why is it that communities struggle so much? They are inundated with alcoholism and apathy, and there is no interest in forging ahead. They are basically a beaten people. Governments must say, ``What can we do to help these people? What can we do to get these people out of this malaise and make them successful?'' It seems to me that that is the challenge for government. Foremost, people have to lift themselves. Government people are being paid good money to be of assistance, so there is some responsibility on the part of government.
We are trying to be of service to our country, in a sense, to government, to First Nations and Aboriginal people, as well as to the general public. We need to be of assistance, to provide information and shed some light on this whole issue of Aboriginal people's involvement in economic development. Do you have any response to what we are trying to do?
Mr. Brooks: I appreciate the enormity of the task you have undertaken. I look forward to seeing your report when it comes out. There is no such thing as a magic prescription. We know that. Each community is different and will progress differently along its economic development continuum.
Among the more successful communities I have worked with that do not have land tenure, that is, whose land claim has not been settled with the department, one important factor, though by no means the only factor, contributing to their success is that they have moved ahead despite not having land tenure, owing to strong leadership by community members, not only from the economic perspective but also from the socio-economic perspective. There are many communities where a lot of healing must take place.
We do appreciate that there are communities advanced along the continuum. Chief Clarence Louie from the Osoyoos band is quite a successful entrepreneur in his own right as well as a very good community leader. He has said to me over and over, ``I am looking forward to the day when I can say to Indian Affairs, `Sorry, guys, I don't want you anymore.''' I can say good-naturedly that look I forward to that day also; it will be very nice.
Senator Watt: It will probably never happen.
Mr. Brooks: I pray that it does one day. There are many communities that do not. With the community capacity model that we use in community economic development, we work with communities to empower them and to develop the capacity to take care of what we refer to as economic governance. Even if a community does not have self- governance in terms of an agreement or a signed land claim, it will have control of its own economic governance. That is the approach we are taking.
We work closely with First Nations and Inuit practitioners in the field. There are many best practices and good activities out there. Unfortunately, in the press we seem to hear about only the negative and never the positive. There are extraordinary events happening in all parts of the world.
I will refer to the Membertou First Nation in Sydney. Sydney brings to mind Cape Breton and the economic problems in the region. Yet, Membertou First Nation is actually becoming a net employer for people from Sydney and surrounding areas. That is the type of activity that should be celebrated and shared with Canadians.
The Chairman: If there is nothing more, I thank you very much for attending and giving us the information you have. Eventually, we will have a report that we hope will help you in your work.
The committee adjourned.