Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 9 - Evidence - December 13, 2011
OTTAWA, Tuesday, December 13, 2011
The Standing Senate Committee on Aboriginal Peoples met this day at 9:31 a.m. to examine and report on the federal government's constitutional, treaty, political and legal responsibilities to First Nations, Inuit and Metis peoples, and on other matters generally relating to the Aboriginal Peoples of Canada.
Senator Gerry St. Germain (Chair) in the chair.
[English]
The Chair: I would like to welcome all honourable senators and members of the public who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples, either on CPAC or on the web. I am Gerry St. Germain from the province of British Columbia, and I have the honour of chairing this committee.
The mandate of this committee is to examine legislation and matters relating to the Aboriginal Peoples of Canada generally. In order to understand the concerns of our constituents, we regularly invite witnesses who can educate us on the topics which are currently of great importance to them.
These sessions are invaluable in helping the committee decide what future studies it will undertake in order to best serve the Aboriginal community. This morning we will hear from one department, the Office of the Auditor General of Canada. The Office of the Auditor General has conducted a number of audits on Aboriginal issues over the past 10 years. In order to assess the government's progress in implementing its recommendations, the Office of the Auditor General released a follow-up audit and the findings are set out in chapter 4 of it is 2011 June status report on programs for First Nations on reserves.
Unfortunately, the OAG noted that conditions are generally not improved for First Nations reserves in the areas examined. They are here this morning to tell us in some detail about their findings.
[Translation]
Before hearing from our witnesses, I would like to introduce the members of the committee who are here this morning.
[English]
Members of the committee, please help me in welcoming our witnesses. From the Office of the Auditor General, Mr. Ronnie Campbell, Assistant Auditor General; Mr. Jerome Berthelette, Assistant Auditor General; and Mr. Frank Barrett, Principal. Good morning, gentlemen.
As usual, we look forward to the explanation of your findings of your June 2011 report. Your presentation, I am sure, will be followed by questions.
[Translation]
Ronnie Campbell, Assistant Auditor General, Office of the Auditor General of Canada: Thank you for this opportunity to appear before the committee to discuss audit work we have completed related to the federal government's actions regarding First Nations. With me today are Jerome Berthelette, Assistant Auditor General, and Frank Barrett, Principal.
Over the past 10 years, the Office of the Auditor General has audited a broad range of services and federal activities affecting First Nations. Earlier this year, we published our most recent report on programs for First Nations on reserves. In this audit, we followed up on the government's progress towards achieving the commitments it made to address significant observations and recommendations from seven of our previous reports, issued between 2002 and 2008.
[English]
We focused on the areas of education, water quality, housing, child and family services, land claim agreements and reporting requirements.
We noted in our recent follow-up report that some progress has been made in implementing some of the recommendations. Overall, however, we concluded that Aboriginal Affairs and Northern Development Canada, the Canada Mortgage and Housing Corporation and Health Canada have not made satisfactory progress in implementing our recommendations. In some cases, conditions have worsened since our earlier audits. For example, the education gap has widened, the shortage of adequate housing on reserves has become more acute, the presence of mould on reserves remains a serious problem, and administrative reporting requirements have become more onerous.
Although these federal organizations have made efforts to implement our recommendations, the results have not led to significant improvements. This situation has led us to consider some of the causes that have inhibited progress on these issues.
In a preface to the audit, we identified four structural impediments that we believe severely limit the delivery of public services to First Nations communities and hinder improvements in living conditions on reserves.
The first impediment is a lack of clarity about service levels. The federal government, mainly through Aboriginal Affairs and Northern Development Canada, supports services such as education and drinking water on reserves that are provided by provincial and municipal governments off reserves. However, it is not always clear what the federal government is aiming to achieve because it does not define what type or level of service it is committed to supporting.
The second impediment is the lack of a legislative base. Programs delivered on reserves are often designed and delivered based on federal departmental policies. Unlike provincial programs, there is no legislation supporting programs on reserves in such key areas as education, health and safe drinking water. As a result, the services delivered through these programs on reserves do not always have well-defined roles and responsibilities, eligibility criteria and other important program elements. There is also often a lack of clarity about federal responsibility for funding these services.
The third impediment that we identified is a lack of an appropriate funding mechanism. The federal government uses contribution agreements to fund the delivery of core programs on First Nations reserves. Many contribution agreements must be renewed yearly, which can cause disruptions and uncertainty for First Nations in their ability to provide core services to their members. Contribution agreements often focus on activities rather than on results and may not include service standards. As a result, it is often unclear who is accountable to First Nations members for improving outcomes or achieving specific levels of service.
The fourth and last impediment I would like to discuss is the lack of organizations to support local service delivery. There are often no organizations in place, such as school boards, health services boards and social service organizations, to support local delivery of programs and services. In contrast, provinces have established such organizations. Aboriginal Affairs and Northern Development Canada has started to work with groups that represent more than one First Nation, but much remains to be done.
[Translation]
In this audit and other audits, we have found that conditions on reserves lag behind conditions off reserves. Changes are needed if First Nations are to experience more meaningful outcomes from the services they receive. In our view, real improvement in the living conditions on First Nations reserves will depend on many factors. These factors include addressing the structural impediments we identified in the preface to our chapter.
The federal government cannot put all of these structural changes in place by itself. Federal officials must work with First Nations, who themselves would have to play an important role in bringing about the needed changes.
[English]
Mr. Chair, we also recognize that the changes required will not happen overnight. Solutions will take many years to fully implement, and they will have to involve many parts of government and include political leadership and the will to make necessary changes to policies and legislation.
The committee, in its work, may wish to ask Aboriginal Affairs and Northern Development Canada for its views on the structural impediments we identify in our chapter, as well as what the department needs and what changes have to happen, including political direction, policies and legislative reforms, before First Nations communities experience conditions on reserves comparable to conditions elsewhere in Canada.
I should note that our audit was substantially completed on November 1, 2010. We did not audit actions taken since then.
Mr. Chair, that concludes my opening statement.
The Chair: Mr. Campbell, when you are doing your audits and you are working with First Nations, the question of capacity comes up. You are saying that the federal government cannot put all these structural changes in place by itself, and federal officials must work with First Nations. Is there the capacity there due to the educational standards in some of the more remote areas? I am not speaking generally. There is leadership, and several First Nations in the country are doing extremely well, and some are doing well. There are some that are not going anywhere at all. Have you done any valuation on the capacity of the people there? When we studied safe drinking water, the Circuit Rider program, they were having trouble finding people with the educational level to take that training. Basically, I am wondering whether your department has done a capacity evaluation as to meeting up with the educational requirements required to do some of this work with government officials.
Mr. Campbell: In several of our audits over the years, we have touched on capacity. It is a very real concern. One comment I made in my opening statement was that these changes will take time. They are not going to happen overnight. I also said the government needs to work with First Nations to help make all this happen.
I should have made the point that all of those four pillars go together. I do not think we will solve those problems by dealing with any one of them. One of the pillars is the support of organizations, organizations like school boards and health boards, which in and of themselves would help drive up that capacity. Yes, capacity is a very real issue.
Senator Meredith: Mr. Campbell, there have been seven reports since 2002-08. The recommendations were on water, housing, education and health. One question I wanted to put to you today is about housing. We see what is happening in Attawapiskat and the situation there that is just deplorable. You are not the first one who has mentioned something about CMHC to this committee. Why is that structure not in place? We look at subdivisions going up across this country. The private sector is greatly involved. Why, in your opinion, has CMHC or the leadership not taken that type of approach? The rest of Canada is being built up, and these reserves are not treated the same way.
Mr. Campbell: To take a step back, things are quite different on Indian reserves from the rest of the country by virtue of the Indian Act and all that that entails. The question of private ownership is one that may already be becoming a bit of a solution in some communities — a small number. It may be a solution that policymakers may look to take further advantage of.
As legislative auditors, we stay out of politics and policy as much as possible. This audit report goes right up to that line, basically saying that what is in place today is not getting the results that people want — that anyone wants. If we continue doing the same things, we will get similar results. We make reference in the chapter that basically it is now over to political will, which is not our field, and making of policy and legislation, which is not our field.
Certainly I would think that if government went at this and worked with First Nations, it is quite possible that some of things you suggest may be part of the solution. Some forms of private ownership or quasi-private ownership might be part of that. Certainly the Indian Act and the fact that the Crown has held those lands in trusts for First Nations has been a barrier to that. I think people need to look outside the box and find ways around those barriers.
Senator Meredith: Others have commented both privately in conversations and publicly with respect to the lack of accountability on the part of those who receive these homes and that they are looking to the government to fix everything and there is not that sense of ownership. Do you think the leadership is doing enough to encourage some sense of responsibility on the part of those individuals who are given these homes?
Mr. Campbell: We do not audit First Nations or the leadership. Overcrowding is a huge problem in many northern communities, and I think it has been demonstrated that when you put 14 or 16 or 17 people living in a small house, it will not be well maintained, and you get all that humidity there and the mold. There are some inherent issues there. I have not seen cases where people deliberately mistreat their houses. They just do not have enough places to sleep. In previous audits, we have talked about the quality of the construction. That has certainly been one thing. In some communities out West, there is a concept of 99-year leases where some communities, First Nations, have been able to get beyond what they have seen as that barrier to ownership on reserves and have been able to get into leases and some economic development. That would not help some of the more isolated communities. It is time, if I may be so bold, for politicians and policymakers to think outside the box to work with First Nations and to come up with something completely different, because this is not working.
The Chair: Those are encouraging words, Mr. Campbell.
Senator Patterson: I was struck in your presentation this morning about your identification of the lack of a legislative base as a big impediment to the efficient delivery of public services to First Nations; that the department's responsibilities and roles are not defined; that there is no mechanism for predictable, stable funding; that contribution agreements are, year to year, uncertain devices; and that there are no organizations supporting local service delivery.
We have just done a study of First Nations K-to-12 education and I think those were four reasons why we recommended that there should be a legislative base. Perhaps we should have quoted your report in our report, but it had an uncanny resemblance to our recommendations in our study, namely, that there be a legislative mechanism.
I would like to turn to health, safe drinking water and housing. Did I understand that you believe there is a legislative vacuum with regard to those areas as well?
Mr. Campbell: In the case of water, that has been a significant problem. Although there have been some improvements since our initial audit, I think about 50 per cent of the water systems on reserves put people at risk. Legislation is working its way through the system, but it will need to be followed by regulations and then funding will have to be sought before that is implemented. That certainly is an encouraging development over the last few years. Many of the health programs that we have audited over the years in relation to First Nations are driven through policy and guidelines. Sometimes it is quite ad hoc; something comes up, there is an issue and bureaucrats deal with it as best they can.
As a general principal, legislation is a much better base for program design and delivery, because legislation is thought through by people who are elected and provides guidance and parameters to the bureaucrats who are implementing it so that they do not have to make it up as they go along.
Senator Patterson: As someone who studied law, I often think that too many people are eager to rush in and say that we have a problem; pass a law and that will fix it. Laws require the support of those who are governed. I am not always eager to rush into law making to deal with problems. I think you are saying here not only that legislation is needed in areas like water, and perhaps health, but also that it cannot just be legislation for the sake of making legislation. It must include a certain funding mechanism.
In our report, we recommended that a formula be developed, probably through regulations in the case of education, and that there be an authority created locally, or at least identified, and that the services be defined. I believe you are suggesting it be put into the legislation so that it is not subject to the whim of bureaucratic policies that can change unaccountably and according to who might be in office in the bureaucracy.
You are saying that legislation, if it is going to be considered in an area like health, should address these four criteria if it is going to work. Is that correct?
Mr. Campbell: I would agree with that. Those four structural issues that we identified all have to go together.
The honourable senator makes a good point in that we are not advocating legislation for the sake of it. Certainly, if the government is going to legislate in areas affecting First Nations, history has shown us that it needs to be done carefully and thoughtfully and in concert and cooperation with First Nations. It must be legislation that they see as helpful, useful and practical.
When we do audits and stand back, we ask ourselves: How do other people do this? Certainly the province of Ontario, the provinces of Quebec or Alberta, or whatever part of the country, would not have an education system without either an education act or a health act. That is how we do things. How do we regulate water in Ottawa? We have legislation; we have standards. We have regulations and people who monitor that. If there is a boil water advisory in downtown Ottawa, it will be all over the front page of the papers. Yet that happens every day in Aboriginal communities. It is not legislation for the sake of it, but legislation is a good underpinning for any program design, I would say.
Senator Ataullahjan: Your audit focuses on programs for First Nations on reserves. However, we have learned that there is a large movement of Aboriginal people off reserves to urban areas in particular. Has the OAG examined any key issues concerning Aboriginal peoples living off reserves, especially in urban areas?
Mr. Campbell: No, the Auditor General of Canada audits the federal government. When people move off reserve and move into cities and towns, often they are accessing provincially run and developed programs in provincial jurisdictions, so we have not done any work in that area recently at all.
Senator Ataullahjan: You outlined several issues of Aboriginal people on reserves, for example, the education gap, water quality, insufficient and unsafe housing. For the purposes of this committee, and for our studies in the future, are there any issues that are more pressing than others?
Mr. Campbell: That is a good question.
The Chair: I never thought I would see you pause, Mr. Campbell.
Mr. Campbell: You keep bringing new members to the table, Mr. Chair.
That is the question. My view would be to focus on those impediments. That is what I would strongly recommend. I have been here many times and I have spent the last decade auditing in that area. We audit each of those programs and we have asked government to fix each of them. I am now of the view, as is our office, that we can carry on doing that and will still get the same results.
It is the four structural impediments that really need to be tackled. Rather than just focusing on housing, you need to look at the question of legislation, statutory funding, secondary and tertiary support organizations. Those are the things that we all benefit from in our daily lives when we put our children into school and we go to hospitals and clinics and all those things. That is the area that we would encourage politicians and policy-makers to focus on, to think outside the box and push that further down the road. As auditors, we have taken it as far as we can. This is the accumulation of 10 years' work, and we are basically saying you cannot get from here to there. That is a great question, but I would focus on those four areas. To focus on any one of them over the others would probably be a mistake. They go together.
Senator Raine: I agree that the existing way that we deliver service to First Nations is not working. The saddest thing is when you look at the population growth in young people and recognize that, without education, without the tools, they are really condemned to live in the same situation, which is why we felt very comfortable in recommending major changes in education.
Looking at the rest of the situation, I am interested in the lack of clarity about service levels. When treaties were first signed, it was a very rural population, and there was an expectation of being looked after. In hindsight, I think it is safe to say that many people feel that, in looking after people, you take away their ability to look after themselves, and there are a lot of ramifications with that.
I know that we have organizations in our country that can manufacture and deliver emergency housing all over the world. We have some very good companies that do this, and they export emergency housing to harsh climates. I keep thinking that maybe we really do have to step back and ask what kind of housing we are going to provide for in really remote areas. Should it be very basic shelter, but then give the people who live there a housing allowance if they wish to travel elsewhere for employment or for education and have that done at an individual level? It would be almost like a portability of an assistance program, because you have special entitlements as First Nations.
Would there be a possibility if you were doing that to set up some kind of organization so that it could be tracked? Maybe it is done as a pilot project. I think individual responsibility for looking at where they want to go and where they want to live rather than sort of being trapped to stay where they are might be something to look at. Have you ever thought of something like that, or would there be a possibility to do something like that?
Mr. Campbell: Again, this is another challenging question. You are well down the policy road now. Whether that would work or not would require some study and evaluation and certainly some considerable discussion with First Nations. When we talk about treaty, those treaties were signed between the First Nation and the Crown, and I think now there is the suggestion of exploring a different relationship and dealing with people as individuals as opposed to the First Nation itself. It is a complicated area.
I would say that whatever will work will not be easy, so it will not be something that immediately everyone will say yes, that is a great idea, because if it were that easy, I am sure that these ideas would have be found before. Where policy ideas will be challenging for some of the parties, I would encourage discussion with First Nations. Talk that through and have that as something they see value in as opposed to something that gets done to them. Some would revert back to the treaty.
Senator Raine: A wise First Nation leader once told me that reserves are both a prison and a fortress. They protect you from having to deal with doing it on your own, but, on the other hand, they sort of hold you back.
I guess my hope is that, as we, hopefully, deliver better education and better ability for people to move where they want to move to fulfill their dreams, we will not hold them back. A mechanism that allows some portability would be something to look at.
Have you had a chance to look at the recommendations that we made in our study that was released last week?
Mr. Campbell: I am glad I got asked that question. Yes, I did, and I thought that it was extremely insightful and thoughtful, and that your committee should be congratulated for that piece of work. Then I realized that one of the reasons I liked is that it is quite similar to the work that we had done. I looked at it again last night, and I think your committee was right on the money.
Senator Raine: In our report, we recognized that all First Nations are different across the country, and some of them already have the second level services starting to evolve and, in fact, they are very strong in some cases.
You talk about organizations to support local service delivery. Obviously, as a nation, all of the resources that we have to be used by governments come from taxpayers or resource revenues. We generally are delivering services at a provincial level, and there is a big reluctance on some First Nations to deal with provinces. How important do you think it is to break down that resistance and to have these local service deliveries not duplicate existing provincial and regional structures?
Mr. Campbell: Again, it is a tricky road. Obviously, there are different parties with different views. I am sure provincial governments would have their concerns about offloading by the federal government, and certainly First Nations have told us in the past that they are concerned about the sense of dump and run.
That being said, when you look at many of the services over which the federal government has jurisdiction, authority and obligation to provide to First Nations are provincial-like. For example, chair, we found the service and the expertise in that area rests in provincial organizations. One would say the same for education and health, all of those, the expertise is there. There is great value to be had in some of those tripartite agreements, and we have seen the rolling out of changes on child and family services based on the negotiation of tripartite agreements between First Nations, the federal government and individual provinces. The key to that is to ensure that it is done in a way that First Nations are comfortable that it is not being thrust upon them and it is something they can benefit from.
Senator Raine: There is a big difference between remote and close-in communities. Where I live, the city of Kamloops delivers a lot of different services on reserve, but it is a negotiated agreement, and they are not doing it at the cost of the taxpayers of the city of Kamloops. The federal government, through the First Nation, is funding those services, but it is done efficiently, and that is in everyone's interest.
Senator Demers: Last week, Senator St. Germain had some members of his committee in a press conference, and I thought you gave hope, senator. You along with Senator Dyck were well prepared, and hope is the most important thing for those people.
Attawapiskat should never have happened. I get confused by what I have been told and the picture I see in front of me. They have been given a lot of money for those things not to happen, but they did happen.
You mentioned some things yourself and Senator Meredith mentioned certain things as well. You have to have structure, accountability, leadership and someone taking charge. We talk about education and giving money, but somewhere someone has to take charge. In the time I have been here, we keep skating in circles instead of going in a straight line north south.
It is the most confusing thing I keep hearing — accountability, but no structure and no leadership. There has to be some leadership somewhere. We met some Aboriginal people who are solid leaders. Maybe you could answer me so that I could eliminate some of those thoughts in my mind?
Mr. Campbell: I want to be clear that in the course of our work, we have not visited Attawapiskat, so none of my comments should be seen to be reflecting that particular situation.
Certainly, in the course of our work — and I would encourage Mr. Berthelette to help me out with this — we found many First Nations communities that are struggling. I come from a small place in Scotland where everyone knows everyone. The last thing you would want to be there would be the policeman, trust me, because people hold grudges that go back centuries.
I cannot imagine what it would be like to be a chief or elected official in one of those many Aboriginal communities that are hurting and struggling, where there will never be enough housing for everybody. I cannot imagine the phone calls and the visits to the office from people pleading for help from a chief who is unable to give it. It must be soul destroying. This is a leader who would not be the one that would have set those budgets.
Therefore, to answer the questions of why do we not have more money to do this or why cannot we build more houses, the political leadership is not in a position to answer those questions. They are in a position to try to do the best they can for their community. It is not a job that I would ever wish for. My heart goes out to all the folks that try to do the best for those communities. It cannot be easy.
Senator Meredith: You talked about the legislative framework that has to be put in place, and you are not advocating the legislation for the sake of legislation. However, we see corporations tying their investments to a return, results.
In your report, you indicate that the government has always said they are a primary funder; they do not deliver services as a primary function. Would you say that it is time that we tie funding to results in terms of the results that are delivered on these reserves?
Having spoken to the leadership in terms of them being more accountable for the dollars that they are issued, I understand that some of these reserves are very heavy in administration and that ties up a lot of funding that could potentially be going toward services. Can you elaborate on that for me?
Mr. Campbell: Again, I would have no view on the administrative structure within First Nations organizations because we do not audit them. Certainly, there has to be a focus on results. I think that the use of contribution agreements between federal bureaucrats and First Nations bureaucrats does two things: It focuses on activities, and it focuses the accountability of the relationship between two sets of bureaucrats.
When we talk about a legislative base, statutory funding and identify what those service levels should be, one of the follow-ons from bringing those all together should be a much clearer accountability, I would hope. One of the first things is identifying with clarity what those service levels should be.
If you take child and family services, for example, the program as designed and funded by Indian and Northern Affairs at the time was quite different from what was being delivered in the provinces. The focus was on intervention, as opposed to prevention. I do not think one could say that would have been the fault of the band council or the chief. That is the way the program was designed.
If you have a discussion about focusing on results and what the best outcomes are for those children, then you start to learn from the expertise that is available in the provinces. You see what is happening now, where the federal government's programming has changed and the funding is now focused much more on prevention; they are now beginning to talk about results and intended outcomes.
I would agree that is where the discussion needs to go.
Senator Meredith: My final question centres around economic development. In terms of someone who is an entrepreneur, I have run a company now for over 20 years and have seen the fact that we need to become more entrepreneurial. I love your line about thinking outside the box. I believe it is time that we literally blow this up and start afresh because it has not worked.
People's lives are at stake here. They are Canadians, and this committee has been very passionate about seeing change come to the lives of First Nations people. It is time; the time is ripe and it is important that we progress.
Looking at the opportunity, especially for our youth, to begin to develop a better quality of life for themselves through entrepreneurial skills and taking on a leadership role with respect to economic development, can you comment on that?
Maybe Mr. Berthelette or Mr. Barrett can speak to that with respect to what needs to happen for these youth to see light at the end of the tunnel?
Jerome Berthelette, Assistant Auditor General, Office of the Auditor General of Canada: We did a bit of a study on economic development on reserves a number of years ago. We identified that economic development is fundamental if you want to change the economic and social circumstances on reserves.
There are clearly some structural barriers to economic development on reserves, particularly with respect to education and training. The ability to access the various opportunities out there are dependent on education and training, and the education has not provided the sort of skills that the individuals need in order to access jobs. Also, the training programs need to be tied to the economic development going on around the community. Often there is not a direct link between what they are being trained for and what the economic development opportunities are.
There is a second issue, which is economic opportunity while economic development is taking place around the reserves. There is a lot of economic development going on in the northern parts of our provinces and the First Nations want to participate in that economic development.
We have talked to chiefs who have expressed a keen interest in participating in that, but they want to do it on terms that are helpful for the communities. They want to ensure environmental protection processes are put in place to protect their environment and their traditional territories. They want to ensure that there are agreements between them and the companies that are conducting the economic development — putting in the mines, taking out the resources. They want to have a relationship with the companies.
I think what we need is for the First Nations, the companies and the federal and provincial governments to sit down and discuss how we structure that relationship, how we incorporate the First Nations leadership into economic development and how we incorporate First Nations into economic development.
Far too often, the chiefs have told us that they feel they are on the outside of this process and they have to bang on the door in order to get in. That should not be the case. I think a process that brings all the parties together would be a good step in terms of helping move economic development along, helping to provide the First Nations individuals with the work that they are looking for.
Senator Meredith: On the side of economic development, we heard that if economic development begins on these reserves, approximately $10 billion a year could be generated in B.C. alone. However, my sense is that the leadership is not getting their fair shake when these resources are being developed. That is, the revenue share is not there in terms of some good proportion, say a 60-40 split or something that would allow them not to be so dependent on government funding but to be able to utilize the resources that they are getting from the reserves with these mines and other companies that are coming in. Can you comment on that?
Mr. Berthelette: We have heard from the chiefs that in some cases, that is so; they do not feel that they are being heard or that they are getting the opportunity to sit down and discuss the impact of the economic development and how they can participate in it and set up a relationship with the companies to help make the project a success. That is true.
Senator Patterson: Your recommendations today have focused on the federal government and that is appropriate; it is your mandate to federal departments and programs. You identified four impediments that require action by the federal government.
The federal government is easy to criticize and I think the Department of Aboriginal Affairs and Northern Development is often a favourite whipping boy. I think another tough job is being the minister of that department as well as being a local chief, as Mr. Campbell described.
You have undoubtedly audited bands which have been in third party management and financial difficulty. We have been focused in recent weeks on this whole question of third party management in Attawapiskat. Do you think there is a need to take a close look at the department's financial intervention policy and its application in communities experiencing difficulty? Do we need to study how the federal government measures performance, progress of services and programs for First Nations by those First Nations? Do we need to review the adequacy of our checks and balances to ensure adequate performance — and, I know you do not audit First Nations — in the way they are audited; that is, the question of forensic audits. How should we follow up on your Auditor General's recommendations? It is a sensitive area, but is it one that could benefit from further study?
Mr. Campbell: I had a couple of thoughts on this.
The first part of Senator Patterson's question was about changes that would have to happen within First Nations communities. The senator is right; we do not audit First Nations communities.
Clearly, our audit report is saying that what is in place now is not working. We are effectively suggesting that the government change that relationship. You cannot have one party change a relationship if the other party did not make changes. We looked at that in our report, namely, that First Nations will have to change some of the things they do and how they do them. I gave the example of legislation. If we expect Parliament to legislate, then clearly First Nations have to be at the table and be part of that so it will work for them.
In terms of auditing in detail in communities, I would respectfully suggest that perhaps the committee might want to invite officials from Aboriginal Affairs and Northern Development Canada because they do quite a lot of audits of the nature that the senator was asking. Perhaps that would be a good basis for you to begin that type of discussion to see what they already do. I am sure some of it will not be public, but I am sure you will have a good discussion with them on that.
In addition to that, we did some work a number of years ago on third party management. If you wanted further elaboration on that, Mr. Berthelette can elaborate further.
Senator Patterson: I would like that.
Mr. Berthelette: I can refer the honourable senator to an audit that was tabled in November 2003 on third party management. I can quickly take the committee through our findings.
The Chair: Do you have a document that you could leave with the committee?
Mr. Berthelette: I have the chapter here, but the chapter is located on our website. We can send you a link.
There are three levels of intervention. There is the remedial management plan. An independent co-manager is hired by the First Nation and works with the chief and council to manage the First Nations' funding. The highest level of intervention is the appointment of the third party manager. We focused on third party management.
First, we found that the hiring of the third party manager is by way of contribution agreement and is paid for out of the operations money of the reserve. We noted that because they used the contribution agreement process, the actual hiring of the third party manager was not an open and transparent process. Most of the hiring that we saw take place was by way of a phone call from the regional office to one of a number of third party managers that the regional office had done business with before and who had some experience in terms of third party management. There were no public tenders and no criteria for selecting third party managers.
A new policy was put in place for the hiring of third party managers. We looked at some of the issues with respect to it and we noted that there was a lack of First Nations' input with respect to establishing a list of third party managers, not the hiring of a third party manager for a particular situation. According to this new policy, they were going to put together a list of third party managers. We thought it would be a good idea if they sat down with the chiefs in the region and, together with the chiefs, went through a process to actually develop the list of third party managers.
We noted that third party managers' performance was not being assessed. We expected to see more rigorous monitoring and assessment of the performance of third party managers. The department essentially focused on the ability of the third party manager to reduce the debt. There was no exit strategy and no focus on the part of the department on the capacity development that should have gone on in the community by the third party manager. If you are going to have an exit strategy, and if you will leave the First Nation in a better condition in terms of better management of the finances, then the third party manager should be working with the community, chief and council included, developing that capacity. That was not being monitored.
Those were really the key points in terms of third party management. Their focus was on debt reduction and not on capacity development.
Senator Lovelace Nicholas: As long as I can remember, grassroots people have always asked for accountability from chiefs, but no one ever listened. The Department of Aboriginal Affairs and Northern Development used to be Indian Affairs. We used to go to local Aboriginal Affairs offices and protest. We did whatever we could do, but no one would listen. They just brushed us off. I am glad that the issue of accountability has been brought up.
Senator Meredith: I have a quick comment and question for Mr. Berthelette with respect to third-party management. Since that report, to your knowledge has there been any improvement with respect to the exit strategy time frames of these individuals brought in? Are they in place for three months or six months? Has there been anything since that report?
Mr. Berthelette: We have not followed up on that audit, so I cannot answer the question.
The Chair: I thank Mr. Campbell, Mr. Berthelette and Mr. Barrett for their excellent presentation and forthright answers to questions.
I have a sad commentary: Mr. Campbell is leaving his position. I have been on this committee for about 19 years; and we will miss you, Ronnie, if I may call you that.
Mr. Campbell: You certainly may.
The Chair: You have presented before us many times and your presentations and responses have always been excellent. I understand that Mr. Berthelette will replace you. We look forward to working with him. As you go forward, Mr. Campbell, continue your good work. You have done a lot of good work for Canada, and we appreciate it.
Thank you for the kind comments you sent our way with regard to our most recent study on education. I honestly still believe that it is the most important aspect impacting our Aboriginal people in Canada.
Senators, we will suspend for five minutes, after which we will go in camera for discussions on future business.
(The committee continued in camera.)