Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 1 - Evidence - November 27, 2013
OTTAWA, Wednesday, November 27, 2013
The Standing Senate Committee on Aboriginal Peoples met this day at 6:45 p.m. to examine the federal government's constitutional, treaty, political and legal responsibilities to First Nations, Inuit and Metis peoples and other matters generally relating to the Aboriginal Peoples of Canada.
Senator Dennis Glen Patterson (Chair) in the chair.
[Translation]
The Chair: Good evening, ladies and gentlemen.
[English]
I would like to welcome all members of the public and senators who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples either in the room or via CPAC or the web. My name is Dennis Patterson from Nunavut and I am chair of this committee. Our mandate 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 witness whose can educate us on the topics that are currently of importance to them. These sessions are very valuable in helping the committee to decide what future studies it will undertake in order to best serve the Aboriginal community.
The witnesses today have been invited to provide general background information on the broad question of financing infrastructure on reserves, which could relate to capital projects, schools and housing among other things. This evening we will hear from three different branches of Aboriginal Affairs and Northern Development Canada.
Before hearing from our witnesses, I would like to go around the table and ask the members of the committee to introduce themselves, please.
Senator Moore: Good evening. Wilfred Moore, a Liberal senator from Nova Scotia.
Senator Watt: Senator Watt from Nunavik.
Senator Dyck: Senator Lillian Dyck from Saskatchewan.
Senator Sibbeston: Nick Sibbeston from the Northwest Territories.
Senator Tannas: Scott Tannas from Alberta.
Senator Ngo: Senator Ngo from Ontario.
Senator Meredith: Senator Don Meredith from Ontario.
Senator Wallace: John Wallace from New Brunswick.
Senator Raine: Senator Greene Raine from B.C.
The Chair: Senators, I know you will help me in welcoming our witnesses from Aboriginal Affairs and Northern Development Canada. Mr. Karl Carisse is Senior Director, Innovation and Major Policy Transformation Directorate, and I thank him for accommodating the committee by coming this evening on very short notice. Mr. Carisse is joined by three colleagues: Annie Comtois, Senior Program Manager, Planning, Monitoring and Reporting Directorate; Patrick Haggerty, Senior Policy Manager, Innovation and Major Transformation Directorate; and Paul Schauerte, Senior Policy Manager, Program Design and Regional Partnerships.
Mr. Carisse, the name of your directorate is very inspiring, ``Innovation and Major Policy Transformation Directorate.'' We are looking for ideas for innovation and transformation that can better the lives of Aboriginal peoples. We look forward to your presentation with great interest. No doubt the senators will have questions afterwards.
I understand you have a presentation. Please proceed.
[Translation]
Karl Carisse, Senior Director, Innovation and Major Policy Transformation Directorate, Aboriginal Affairs and Northern Development Canada: Honourable senators, thank you for the opportunity to speak with you today about First Nations community infrastructure.
By supporting First Nation communities in establishing and maintaining a base of infrastructure, it helps ensure health and safety and enables engagement in the economy.
[English]
First Nations are the owners and operators for infrastructure on reserve. Aboriginal Affairs and Northern Development Canada provides financial support and advisory assistance to First Nations in acquiring, constructing, operating and maintaining community infrastructure including: water and waste water systems, schools, roads and bridges, electrification, community buildings and housing, and funding for capacity building for water and waste water operator training.
Aboriginal Affairs strives to ensure that on-reserve community infrastructure is well planned, effectively managed and comparable to what is enjoyed by Canadians living off reserve. The provision of community infrastructure funding to First Nations is based on the Government of Canada's spending power as a matter of social policy. Funding is provided to First Nations through Aboriginal Affairs' Capital Facilities and Maintenance Program. The budget for this program is approximately $1 billion per year and provides three funding streams to First Nation recipients: funding for maintenance and operation of capital assets, which is approximately 35 per cent of the overall budget; minor capital funding for First Nations housing and for construction, acquisition, renovation or significant repair projects valued below $1.5 million — approximately 40 per cent of the overall budget; and major capital funding for specific proposal-driven construction, acquisition, renovation or significant repair projects with a value exceeding $1.5 million — approximately 25 per cent of the overall budget. Regional offices have the flexibility to reallocate between program areas to meet regional priorities.
Aboriginal Affairs currently provides First Nations with up to 100 per cent of the capital funding for the construction of most community infrastructure projects, mainly schools and water projects. First Nations own their infrastructure assets and are responsible for their daily operation and management.
[Translation]
Aboriginal Affairs invests approximately $204.2 million annually to support First Nations in delivering water and wastewater services. Between 2006-07 and 2013-14, the Government of Canada will have invested approximately $3 billion in water and wastewater infrastructure in First Nation communities.
[English]
In response to the 2009-2011 National Assessment of First Nations Water and Waste Water Systems Report, the Government of Canada committed that on-reserve water and waste water issues would be addressed on a priority basis. A risk-reduction strategy, including enhanced capacity building and operator training, enforceable standards and protocols, and capital investments was implemented.
With respect to standards and protocols specifically, legislation was drafted to ensure that First Nations have the same health and safety protections for their drinking water as other Canadians. The Safe Drinking Water for First Nations Act received Royal Assent on June 19, 2013, and came into force on November 1, 2013.
The Government of Canada recognizes the importance of engagement and is developing regulations region by region in collaboration with First Nations, provincial and territorial governments and other stakeholders. Work is already under way in the Atlantic region, and a proposal and supportive resolution have been received from the Assembly of First Nations of Quebec and Labrador.
The regulations will be phased in. This is to provide time for the federal government and First Nations to bring drinking water and waste water infrastructure, capacity and oversight to the level required to meet federal regulations developed under this act.
[Translation]
Aboriginal Affairs provides an annual investment of approximately $200 million per year to maintain and improve on-reserve school infrastructure. Additionally, the government has taken action through targeted investments. Between April 2006 and March 2012, the Government of Canada has provided funding to support the completion of 429 school projects, including 36 new schools and 393 renovations and other school-related projects.
[English]
The most recent targeted investment from Budget 2012 committed an additional $175 million toward new school projects, renovation of existing schools, and innovative and cost-efficient school projects, providing First Nation students with better learning environments. The phased plan for the education infrastructure investments includes investments of $100 million in four top priority schools: Fort Severn, Poplar Hill and Pikangikum First Nations in Ontario, as well as Shamattawa First Nation in Manitoba; construction or renovation of another five high priority, shovel-ready projects to be completed by 2015, which include the already completed Aq'amnik Education Centre at St. Mary's Band in British Columbia, projects at Lax Kw'alaams, Kwakiult and Tl'etinqox-t'in First Nations in British Columbia, and Peter Ballantyne First Nation in Saskatchewan; examining the effectiveness and feasibility of alternative methods of procurement by working with Public Private Partnerships Canada to develop a business case for a public-private partnership for four schools in northern Manitoba with the communities of Bunibonibee, Manto Sipi, Wasagamack and God's Lake; and, finally, an investment of $25 million to support a proposal-based initiative to support innovative and cost-shared school projects.
Aboriginal Affairs recognizes the need for new schools and facilities and renovation and repair of existing facilities. Currently, education infrastructure investments are prioritized nationally to ensure that projects that have the most impact will be given precedence. For example, in September 2013, Cat Lake First Nation, located in northern Ontario, celebrated the opening of the Lawrence Wesley Education Centre. This new fully-equipped school will provide current and future students of Cat Lake First Nation with a safe and welcome learning environment that reflects their unique needs and interests to help them reach their full potential. The new kindergarten-to-Grade 8 facility will accommodate approximately 176 students.
Moving forward, the department is redesigning the school infrastructure program to ensure that future funding is associated with modern industry standards and practices for procurement, construction, operation and maintenance, and that schools remain in working condition for their full lifecycle.
The provision and management of housing on reserve lands is under the jurisdiction of First Nations, with support provided by the Government of Canada through various programs and initiatives. Federal investments to support on- reserve housing needs are provided through Aboriginal Affairs and Canada Mortgage and Housing Corporation. The federal government currently invests an estimated $303 million a year to address housing needs on reserve: $146 million through Aboriginal Affairs and $157 million through Canada Mortgage and Housing Corporation. Aboriginal Affairs provides funding to communities for a range of housing needs, while CMHC is focused on the delivery of specific housing programs for First Nations.
Between 2006-2007 and 2012-2013, the Government of Canada provided a total of $2.3 billion in on-reserve housing support to First Nations, including $1.2 billion provided by Aboriginal Affairs. This funding contributes to an average of 1,750 new units and 3,100 renovations annually on reserve. In addition to annual funding, the Government of Canada has also provided substantial investments in on-reserve housing through one-time funding initiatives. For example, to help address issues of overcrowding and disrepair, $400 million was announced for on-reserve housing between 2009-2010 and 2010-2011 under Canada's Economic Action Plan. Close to 500 First Nation communities benefited from this funding. From Aboriginal Affairs' $150 million allocation alone, over 4,400 units were built or renovated.
Looking forward, Aboriginal Affairs is committed to continue working in partnership with First Nations and other stakeholders to address housing requirements and to ensure that sustainable infrastructure is in place to support current needs and future development. Aboriginal Affairs has been actively seeking connectivity partnerships with other government departments, provinces and territories, the private sector and First Nation organizations to enable Aboriginal communities to be connected to the Internet at the Industry Canada standard of 1.5 mbps, or megabits per second, to the household. This has led to seven major regional, provincial, federal and private partnership projects south of 60.
Since 2009-10, Aboriginal Affairs has invested approximately $45 million in connectivity infrastructure, leveraging approximately $150 million in other federal, provincial and private funding. Moving forward, Aboriginal Affairs is seeking to align federal, provincial, rural and First Nation connectivity policies, programs and future projects to maximize investment and benefits to First Nations.
For example, the Northwestern Ontario Broadband Expansion Initiative is a project that will provide fibre optic connections to 26 First Nation communities in rural and remote areas of northern Ontario. This is a joint initiative across several federal departments, the province, the Nishnawbe Aski Nation and Bell Aliant. This broadband project is the largest and most complex public-private First Nation connectivity initiative in Canada. To date, over 1,700 kilometres of fibre optic has been deployed and, given favourable weather conditions in the next months, it is expected to be completed by September of 2014.
[Translation]
Aboriginal Affairs undertakes or oversees several inspection processes of publically accessible buildings in support of its mandate to develop healthier, more sustainable communities, as well as to help safeguard significant federal financial investments in infrastructure in First Nation communities.
While Aboriginal Affairs does not have a legal obligation to complete inspections on-reserve, the inspection results are beneficial to plan future investments, ensure assets on-reserve are being managed and maintained safely and effectively, focus training activities, monitor the use of funding, and report to Parliament and Canadians.
[English]
A new Storage Tank Systems for Petroleum Products and Allied Petroleum Products Regulations came into force in June 2008. Aboriginal Affairs has identified 1,471 non-compliant essential community-owned fuel tank systems on reserve across Canada and has received funding to help address this challenge. Beyond this, the department will continue to look for funding plans or options to assist First Nation communities in upgrading their essential tanks.
As a whole, infrastructure has the same overall cost drivers faced by other Aboriginal Affairs programs, including the 2 per cent departmental escalator cap applied since 1997-98; population growth of on-reserve residents due to high birth rates and inflation. However, there are cost drivers unique to infrastructure. All capital assets need to be replaced at some point, which increases financial pressures. Additionally, there is an increased asset base requiring operation and maintenance funding.
Currently, some infrastructure on reserve has a reduced life cycle due to lack of code compliance, insufficient maintenance or operation and maintenance funding because it is redirected to address other needs. Moreover, the infrastructure project cycle is four to five years, requiring planning and dedicated funding to achieve results. Lastly, many reserves are in remote locations with limited access, which increases costs related to shipping material and lengthier construction cycles.
The Government of Canada is investigating new approaches to building and maintaining First Nations infrastructure. Some of this work revolves around ways to finance infrastructure. Unlike municipalities, cities and provinces, Aboriginal Affairs works with First Nation communities to pay for the cost of community infrastructure over the one- to two-year construction period. Most jurisdictions spread the cost of an infrastructure asset over its useful life. It is our belief that the prudent use of finance will help the department and First Nation communities to more quickly and cost effectively address the infrastructure gap on reserve.
Aboriginal Affairs has experimented with project financing in the past, but a formal approach has never been developed. For example, in the mid-1990s, the department worked with the Kasabonika First Nation and the Royal Bank of Canada to structure a deal where funding for a school was advanced by the Royal Bank of Canada and repaid over five years. Part of the cost of the loan was repaid using funding saved from not needing to send students to the nearby communities of Kenora and Sioux Lookout.
The Attawapiskat, Kashechewan and Fort Albany First Nations were connected to the provincial grid in 2003. The $55.6 million Five Nations Energy project was made possible by a 10-year funding stream provided by the department. It was determined that the department would have spent more than $55 million over an 18-year period maintaining the diesel generation facilities in these three communities. This project supplied the three First Nation communities with a superior level of service and will save the department funding in the years ahead. It would not have been possible without the use of private financing.
The use of financing itself will not solve the infrastructure gap on reserve. Financing must be used strategically in situations that provide value for money when all costs are considered, including interest. Situations where the use of financing may be prudent include: time-sensitive opportunities to partner with provinces or municipalities; undertaking large projects that are difficult to work into the long-term capital plan due to size but would pay back over time; and projects that utilize both government and First Nation own-source revenues.
In Budget 2010, the Government of Canada committed to review the current approach to financing infrastructure and improve the life cycle management of capital assets in partnership with First Nations. Since that time, the Community Infrastructure Branch has been working to identify ways to enhance First Nation community access to institutional and social finance sources through the existing network of Aboriginal capital corporations, the First Nations Finance Authority and the First Nations Financial Management Board.
The First Nations Finance Authority and the First Nations Financial Management Board are institutions created under the First Nations Fiscal and Statistical Management Act. They were established to provide First Nations with access to bond market financing.
The borrowing system created by these institutions is very similar to the one used by most Canadian municipalities and provides low-cost financing that requires a relatively small government guarantee. The long durations and low interest rates offered by bonds make them much more suitable than bank loans for infrastructure projects.
We are working with First Nation communities that have indicated a willingness to pledge own-source revenues to infrastructure projects and encourage them to work with the First Nations Finance Authority to obtain the lowest possible borrowing rates.
Aboriginal Affairs is also working closely with Public-Private Partnerships Canada to explore the feasibility of using public-private partnerships to deliver First Nations infrastructure. Public-private partnerships are long-term partnerships between the private and public sector for the delivery of infrastructure services that, more often than not, include a financing component.
Several projects have been considered, but two are currently being developed aggressively. We are working with the Atlantic Policy Congress and the 33 Atlantic First Nation communities to determine if a public-private partnership for water and waste water services is feasible and will provide value for money. This project could see a private sector company upgrade and manage all water and waste water assets over several years. The private sector consortium will be contractually bound to provide water and waste water services that meet the needs of the communities.
In Manitoba, we are working with four northern First Nation communities to determine if it is feasible to enter into a public-private partnership project for school facilities.
Aboriginal Affairs is also exploring reforms to the infrastructure programs on reserve, focused on transferring responsibility for the management and delivery of infrastructure to First Nations through a framework of strong capacity, coordinated and responsive funding, comprehensive legislation and streamlined and coordinated service delivery.
[Translation]
Aboriginal Affairs aims to ensure that on-reserve community infrastructure is well-planned and effectively managed, and is committed to working with First Nations and other stakeholders to ensure sustainable infrastructure and healthy communities.
[English]
I appreciate the opportunity to speak before the committee today on this most important issue, and we welcome questions from the honourable members. Thank you.
The Chair: Thank you very much. I believe you've also managed to come up with a table that was requested at the last meeting, which gives an overview of capital community infrastructure spending —
Mr. Carisse: Correct.
The Chair: — over the last number of years. Thank you for that.
Mr. Carisse: You are welcome.
Senator Tannas: Thank you, Mr. Carisse, for your presentation, which was great.
On the First Nations Finance Authority, maybe you can tell us how long it has been operating, how many loans have been made and what the dollar value is of outstanding balances as of right now.
Patrick Haggerty, Senior Policy Manager, Innovation and Major Policy Transformation Directorate, Aboriginal Affairs and Northern Development Canada: I am trying to see the year they were established. The First Nations Finance Authority and the other organizations as part of that package were developed several years ago. They are still getting themselves organized for certifying First Nations communities. I heard recently they're looking at February for an initial bond offering of $100 million to $150 million, but as yet they have not financed any projects using bond market financing.
Senator Tannas: Would the 150 be for projects that they've got requests for or just to get a pot of money to then entice people to apply?
Mr. Haggerty: I'm not aware of all the projects they have in the pipeline, but I know that a number of projects are ready to accept money right now. I don't know whether it would take up the entire $100 million to $150 million at this point.
Senator Dyck: My question is supplemental to that. You were speaking about working with First Nation communities that have their own source revenue to go through this First Nations Financing Authority. Do you have a number of First Nations lined up now ready to go? Could you give us an indication of how many would be interested in taking that route?
Mr. Haggerty: We have one community right now through the innovation envelope for school money that was provided in Budget 2012. There's one community interested in building a school and they have approached the First Nations Finance Authority to borrow the portion of the money that they are putting into the project.
Senator Dyck: This really is new then.
Mr. Haggerty: It is pretty new.
The Chair: To assist us, could you describe the First Nations Financing Authority in a little more detail?
Mr. Haggerty: The First Nations Financing Authority issues bonds to the marketplace and distributes the proceeds of those bonds to certified First Nation borrowers. There's another organization called the First Nation Fiscal Management Board that certifies the ability of the First Nations to pay back that funding, but the FNFA is the organization that borrows the money en masse and then distributes it to the First Nation communities and receives the regular payments.
The Chair: What's its structure and relationship to the department?
Mr. Haggerty: It's totally arm's length from the department.
Mr. Carisse: It's created by the act.
Mr. Haggerty: Yes, it's created by the act and managed by our governance branch within Aboriginal Affairs.
The Chair: Is there a board and a corporate structure?
Mr. Haggerty: Yes.
Senator Watt: I have a supplementary question to Senator Patterson's.
I would imagine those are guaranteed by the Government of Canada. Is it the Department of Indian Affairs guaranteeing them?
Mr. Haggerty: I'm not too familiar with the exact structure of the guarantee mechanism. Some federal money is guaranteeing the bonds, but it is not a 100 per cent guarantee.
Senator Watt: Would you be able to provide that information to us at some point?
Mr. Haggerty: Yes, we can provide that information.
The Chair: I should say that we have invited the First Nations Financing Authority to become a witness before the committee.
Senator Meredith: Good to see you and your team, Mr. Carisse.
In looking at a couple of comments you made with respect to the investment of water by the government on First Nations reserves, you talked about operator training, enforceable standards and protocols, and capital investments that were implemented. Others have appeared before this committee and talked about the number of water advisories. Ms. Comtois, you might be able to comment on this as well in terms of the tracking.
In the last year or so do you have a record of the number of advisories issued and, given the amount of money invested, whether that investment has caused a considerable reduction in safety in terms of the request for boil water treatment on reserves, whether there's been a considerable improvement in that regard? There was talk about the operators not staying on the job to ensure there is proper monitoring. Can you give us an update as to how that is going with respect to the amount of money that has been invested?
Mr. Carisse: In regard to drinking water advisories, Health Canada keeps track of that. I can't remember the last count. We can definitely provide that. We get it on a monthly basis from Health Canada. I believe we're still averaging somewhere around 100 or 120, but we will provide the numbers. I think they have been fairly stable.
The one thing to remember with drinking water advisories is that they actually show the system is working. In our building at 72 Laval in Gatineau we had a drinking water advisory today. That means the system is properly working. For whatever reason, if there is an issue with the water, you address it.
The difficulty is comparing what's happening on reserve and off reserve. We do a very good job at tracking the drinking water advisories, whereas off reserve you don't necessarily get all that information. There have been studies in the past where on an ongoing basis there are over a thousand drinking water advisories across the country.
Is it comparable? I believe the drinking water advisories Health Canada tracks are the ones that are on five connections and above. You might have a small drinking advisory that will be considered as one, which affects just a few families, or it can affect a larger population in the community. However, we will definitely get back to you on those numbers.
More importantly, with the investment we have seen the number of high-risk systems start to go down for both drinking water and waste water systems. With the funds we have there is a priority ranking framework of where to go, where to make those investments and where the needs exist. By doing that we can start addressing to see where there is a high-risk system where investments should be made first.
Investments are not necessarily on infrastructure itself. The national assessments showed that 60 per cent or 70 per cent of the risk involved in delivering drinking water or treating waste water is actually human related, so it's proper monitoring, proper operating and proper maintenance of those systems. Those are things we can start addressing right away. This goes into your next question, senator, about trainers.
I know we have more trainers now that are out there doing the Circuit Rider Training Program. That's going well. What we're seeing with that program is there are actually more certified operators.
It's always difficult to keep some certified operators within the communities. We've talked about this in the past. They get their certification, they're at a level 2 or level 3, and there's an adjacent or bigger city centre close by that's looking for operators so sometimes they're attracted there.
Paul Schauerte, Senior Policy Manager, Program Design and Regional Partnerships, Aboriginal Affairs and Northern Development Canada: We have seen an increase in qualified operators. In the early years we did see that issue of turnover approaching 20 per cent, 25 per cent, as operators got trained up and moved off reserve to industry and whatnot, but overall we have seen an increase in qualified operators from 51 per cent to 60 per cent since the 2009-2011 national assessment came out. That applies to waste water operators as well. We have seen retention increasing and the level of qualified operators increasing as well.
Senator Meredith: Ms. Comtois, did you want to comment as well?
Annie Comtois, Senior Program Manager, Planning, Monitoring and Reporting Directorate, Aboriginal Affairs and Northern Development Canada: No, I think they provided the information that I have right now. Yes, the risk level has been decreasing and we have better results with the Circuit Rider Training Program.
Senator Meredith: Mr. Carisse, I want to ask a question with respect to education. You talk about the amount of money that has been invested in the education system on First Nations reserves and off reserves as well. How do you go about prioritizing the needs? It's critical that we consider education as a top priority for all, especially our youth. I'm curious as to how that is geared so there are appropriate resources being put towards this very important, fundamental issue of development.
You talk about the education of a child. I'm curious as to how that is prioritized in terms of, say, 600 bands across the nation. How do you ascertain those requests and how are they placed in order of severity in terms of what needs to be done, in terms of school development, teacher hiring, program management and so forth?
Mr. Schauerte: I will be happy to speak to that one. I can certainly speak to how we prioritize funding towards the renovation or new building of capital assets.
When you're moving into prioritization in terms of programming, teacher retention, that kind of thing, that would fall upon our education branch within the department to speak to those items, but when it comes to infrastructure, education infrastructure, it starts with every First Nation expressing their need for either a new school or renovations to their existing school through their five-year capital plans. We'll take those in in each region and compile them up, and they ultimately come into what we call our national infrastructure investment plan.
Within that, we identify all the school projects that have been identified by First Nations, and then we run them through another assessment tool, a school priority ranking framework, that takes a look at very specific criteria in order to arrive at a national schools list that we can fund starting from highest need to lowest.
We look at items such as health and safety requirements, overcrowding within existing facilities, issues of geography and remoteness. It's a question of do they have other school facilities that they can attend or are they so remote that they have no other options available to them? There are issues of design, prioritizing education facilities for elementary students over secondary, and then as well as looking at partnerships, aggregation of facilities between communities and the like.
They all get assessed through those criteria, and we build a national schools list. It's updated every year, and whenever we have available funding, we start working off of that list.
Senator Meredith: For example, let's say you have 20 schools. They have varied needs. Are there pupils within those schools that have to be addressed? Do you allocate temporary resources that touch those 20 schools, because again they're impacted in some way so that the education of those students isn't — they're being impacted. However, there is some sort of stopgap being used while you get to the major infrastructure that needs to take place.
Mr. Schauerte: Yes, and I could provide an example. The Pikangikum First Nation in northern Ontario lost their school to a fire back in 2007, I believe, and we are building them a new kindergarten to Grade 12 school, very large for approaching 1,000 students, but immediately following the fire, we put in a number of portable units. They're much larger prefab units that can hold a number of classrooms. We got those up there shortly after the fire, within a matter of months, so that their school year wasn't disrupted. They're still using those portables now as we work through their new school project.
In cases like that where they may lose a school or partial function of a school, we do work with the community to identify alternative resources, such as portables, to provide them a venue to continue with their educational programming in the interim while we address their longer-term needs.
Senator Wallace: Mr. Carisse, I was interested in your comments around public-private partnerships and the opportunity that that may present. I take it from your comments that there has not been a public-private partnership introduced yet on reserve lands in Canada; is that correct?
Mr. Carisse: That's correct, not yet.
Senator Wallace: I guess not unlike a number of other communities that are looking at P3s for water and waste water services and what benefits that might bring, are any community models being looked at in Canada where P3s have been used to address water and waste water needs of communities that could be used as a template for use on reserve?
Mr. Carisse: I think the one good example would be maybe about more than water. It would be for schools that have been done in Alberta, but maybe there's water also in —
Mr. Haggerty: Yes. That was the first one that came to mind. We've been working quite closely with the Alberta government to explore how they have successfully managed to procure four rounds of schools using the P3 model. We also work very closely with the Crown corporation PPP Canada to learn as much as we can from them on their experiences with other jurisdictions in Canada.
Most of the projects they have experience with are single jurisdictions and with First Nations communities. In order to get the projects large enough to really attract the interest of the private sector, we often need to bundle them. So that's quite unique in the First Nations world. We're working through that with P3 Canada to try to develop projects that are acceptable to the marketplace.
Senator Wallace: I'm aware that schools have been built with the P3 model, and I think in Nova Scotia some years ago there was some success there, but now in particular with water and waste water, which is a huge issue not only on reserves but elsewhere. Being from New Brunswick, I know that the city where I live outside of Saint John just committed some $250 million to a P3 model. My understanding was that that would be the first example of a potable water project adopting a P3 model.
I just say that from the point of view that if it's that new to the rest of Canada for water and waste water use, how realistic is it that that model will be used on reserves where there are other complications and issues? I thought maybe I was missing something and maybe there is a model in Canada where that has been successful.
So I understand the schools, but water and waste water in particular, if there is anything you can tell me —
Mr. Haggerty: It's going to be a challenge. The P3 model is relatively new to Canada. It's new to the world. Canada is a leader in moving these P3 models forward. Jurisdictions in Alberta and in B.C. have used P3 models for water and waste water, and other jurisdictions have tried them. So we are trying to draw on as much of P3 Canada's experience they have gained in their fairly brief existence.
Senator Wallace: Mr. Carisse, you mentioned fuel storage tank systems in your comments and I know from past experience that those can be a major problem, the leaking of underground storage tanks and the problems those present to communities. Trying to re-acclimate those areas can be extremely expensive and difficult. How big an issue is that on reserves? Are you dealing with situations where there are individual storage tanks for each housing unit, or are there situations where there may be an underground system that is piped to individual homes? Just give me a sense of how serious an issue is that on reserves.
Mr. Carisse: It's a mixture of both. For the individual home, for most I don't think the tank size goes with the regulations, but for a lot of these communities that we deal with, especially the more remote ones that rely on diesel, they have what they call tank farms. This is when it gets to be complicated.
Ms. Comtois: The regulation that was passed in 2008, that was implemented in 2008, only affects a larger tank, so it's for housing tanks. That regulation would not apply, but bigger tanks, yes. We received funding in Budget 2011 to help First Nations bring their tanks into compliance with the new needed regulations. We received $44 million from the government to address the highest needs.
As Mr. Carisse said in his speech, we identified 1,471 what we call essential community-owned tanks. Those tanks are the ones that are really essential for a community, so tanks for schools, a water treatment plant or the tank farms, which are the only source of energy for a community or would provide fuel for fire trucks, for example. That would be the only way to get it. That's the one that we really focused on. We're supporting First Nations with that.
We're also working with Environment Canada. Yes, it's an issue, because sometimes when you remove a tank or change it to bring it into compliance, you realize the site is contaminated. This is another sector in the department that deals with contaminated sites, but it's something we also have to take into consideration when we deal with the issue of fuel tanks.
Senator Wallace: Is contamination from storage tanks a significant issue on reserves? It can run into a lot of money to correct that, but is it a big issue on reserves?
Ms. Comtois: I would think so. Again, we are not necessarily the lead on contaminated sites in the department, so I don't have all the numbers. We could probably get back to you on that.
Based on my knowledge, yes, a lot of contaminated sites on reserve are due to leaking fuel tanks; not all of them, especially south of 60. In the North, it's a different situation with the big mines and things like that. But yes, fuel tanks are one of the causes for contamination.
Senator Wallace: Yes. You contaminate the ground water and then you've got a problem trying to provide potable water. One problem builds on another. Thank you very much.
The Chair: Did you have a short supplementary, Senator Meredith?
Senator Meredith: Yes. That was my ninth question on my list, chair. But Senator Wallace has asked a question with respect to P3s.
Mr. Haggerty — and maybe you can comment Mr. Carisse — with respect to the value that the government sees these P3s would bring about of there being some sort of quantitative data in terms of savings to the government with respect to inviting the private sector to come in and partner in terms of resource extraction, and then also the vehicle for economic development, can you provide a quantitative number with respect to the number of people employed, as well as the economic dollars that would arrive from this? I know you indicated that it's fairly new. I am quite familiar with a conference that I was to have attended earlier this year in Trinidad and Tobago, as the Caribbean is looking at how they can begin to look at partnerships, to look at resource sharing, as well as extraction, again for creating jobs.
Could you comment quickly on those two things, as Senator Wallace has raised them?
Mr. Carisse: On the P3s themselves, since we don't have one that's actually going right now to see on the economic development side and what kind of employment, it is kind of difficult to give numbers. The idea, though, what we face — and the same in Trinidad and Tobago and other countries around the world right now — is that there's such an infrastructure gap. Canada will say off or on reserve. If you have someone from the Federation of Canadian Municipalities coming in, you'll see that off reserve, the infrastructure gap is there, just like it is on reserve. So we have to come up with tools to address that gap. Just looking towards government for federal funds will never address that gap.
It's one of the reasons why the Atlantic Policy Congress is willing to explore the possibility of a public-private partnership with us. Knowing full well that it is new and that there may be risks associated with that one, we're doing something new for the first time. There are many needs in the communities right now. There are some new infrastructure upgrades that need to be done, and they do realize the limited budget of government.
If we can look at doing something and bringing the private sector in to try to address it, if you can plan out a P3 over 25 years, you address the infrastructure issues in the first 5, let's say, and then you keep providing the adequate O&M for the remainder and the industry takes care of the proper operations of the water and waste water. They are paid on that to make sure that they are providing; there are standards and guidelines that they will need to meet to get to their payments.
That is one thing, I think, that the chiefs are really interested in. It's that share of the risk that the liability would actually go towards a third party that would take that on. It is a shared risk. So there are many benefits. We unfortunately don't have those kinds of numbers yet.
In partnerships, however — and I mentioned it quickly in my speech — the work we did with Bell Aliant, they did a piece on how much employment was created by that infrastructure build or that broadband build in northern Ontario. I'd have to ask Bell, but I'm pretty sure they'd be okay to share this with the committee. They were able to employ people from the communities themselves to go out and help them out. There were trackers that were involved and other people to go and see where best to do that line for the broadband. They were basically going out into the bush; there was nothing. I think they were able to look at the shorter-term benefits of those people that are hired for the actual construction, but then there's also going to be some very long-term benefits with broadband, starting with folks that can actually run the broadband. You can have maybe even some Internet service providers, the micro ones, in communities that can help out, but it's also all the benefits that you'll get afterwards once you're connected to a good level of broadband and Internet, the e-commerce and e-health and everything else that gets involved.
I can see that the Bell Aliant piece would be useful, if we could share that, to give you an idea of numbers.
Senator Meredith: Thank you.
Mr. Haggerty, do you want to comment?
Mr. Haggerty: One other thing I'd like to add with regard to the public-private partnerships is that at the base of any decision to move into a public-private partnership is the assessment of value for money. That's essentially comparing the cost of doing the project traditional to the cost of doing it as a public-private partnership. If it does not show that the public-private partnership will provide better value for money, then we will not proceed on that basis. As a result, a public-private partnership takes a lot longer to develop because there are a lot of things to check out ahead of time, a lot of numbers to run to make sure that it provides value for the communities and for the taxpayers.
Senator Moore: Mr. Carisse, I have a number of short questions in going through your brief.
The Chair: Short questions are good.
Senator Moore: Thank you, chair.
At the bottom of page 7, you talk about the new school at the Cat Lake First Nation. Was that built to code, and will it be mould free?
Mr. Carisse: For schools, any project that's over 1.5 million becomes a major project, and the department is much more involved in those projects. So, yes, working with the First Nation, it's still the First Nation's infrastructure. They take care of the bids, but we're involved. It's also the name of those contractors and the companies that win those bids to build those schools. They have to follow standards. They have to follow the building codes, the fire codes. So, yes, it will be built to code; and as long as it's well operated and maintained, and the department provides 100 per cent of the cost for proper operations and maintenance of those schools — of any school — it should be free of mould.
Senator Moore: In the next paragraph, on page 8, you say that moving forward, the department is redesigning the school infrastructure program and they want schools to remain in working condition for their full life. When did they start to respond to this condition and start to redesign schools so that they'd meet code and take into consideration other factors? Is that just a recent development, or when did that start?
Mr. Schauerte: The department historically has always approached every project as a one-off traditional design and then build. What this was referring to is more how the department is approaching its role as a funding agency and adviser to First Nations on the construction of schools, because for many communities this happens once in a generation. In studying others, such as the Government of Alberta, we find new ways to approach the procurement and construction of school facilities, trying to move away from traditional design-bid-builds to looking at the use of design builds or public-private partnerships, the use of financing, but trying to modernize the way we approach procuring and funding schools.
Senator Moore: Has this approach started in the last 5 years, 10 years, 2 years? What is it?
Mr. Schauerte: I think we really started to examine this issue in earnest about five years ago, and we're starting to finally gain traction on the issue, I'd say, within the last couple of years.
Senator Moore: When you talk about the school remaining in working condition for its full life, are we talking the usual 35 to 50 years life for a building, or what are we talking about here?
Mr. Schauerte: Any schools that we're looking to build within the last year or so, we try and stipulate that it should have a 40-year life cycle. That's for a steel structure; if it was wood, it would be different.
Senator Moore: On page 9, you say that between 2006-07 and 2012-13 there was $2.3 billion in on-reserve housing support and $1.2 billion from Aboriginal Affairs. The funding contributes to an average of 1,750 new units and 3,100 renovations annually on reserve. Are you saying that we are building 1,750 new units each year?
Mr. Carisse: That is correct.
Senator Moore: Is that right? Each year? And we're renovating 3,100 each year?
Mr. Carisse: On average, self-reported, yes.
Senator Moore: At the bottom of the page you say that close to 500 First Nations benefit from this funding from Aboriginal Affairs: $150 million allocated alone, and that over 4,400 units were built or renovated. What was the split? How many were builds and how many were renovations?
Mr. Carisse: I don't have that number here. but I can provide it to the committee.
Senator Moore: I guess this is a given, but I should ask you to get it on record. With regard to the broadband expansion to northern Ontario, which I think is very exciting, would the nations ask Bell to come in and do a survey as to the need and then work toward the location of the structures to provide the service? How does that work? Does Bell look around and try to put together a cluster? How does that happen?
Mr. Carisse: It was very complicated, but I am happy to say we pulled it off — a perfect alignment, to tell you the truth. Bell had some antiquated satellite systems up there so they knew they had to rehabilitate those systems, knowing full well that broadband is much better than satellite. But there was no business case for Bell, being a private company, to do this knowing full well that for the government it would be well worth these remote communities having access to broadband. At the same time, we had a program called First Nation Infrastructure Fund, which was project-proposal base, and broadband was one of the categories. At the same time, Industry Canada had a rural broadband program with funding for connectivity, so it all kind of blended in. As well, the province was also willing to look at broadband in that area, eventually bringing its closer to the Ring of Fire.
They knew that there be development in the Ring of Fire area eventually as companies going there would want access to broadband. It really worked out. It took a lot of working with the different partners. Obviously, the communities of the Nishnawbe Aski Nation and the Wabun Tribal Council were on satellite. You can do a lot with satellite but not as much as you can do with fibre optic. They were on board because they wanted this; Bell was there; and the province was on board. We worked with Industry Canada and Health Canada also.
Senator Moore: Who initiated the idea? Was it Bell because they had to do something with their gear?
Mr. Carisse: It came from both sides. I think it was the communities first. This started about five years ago before all the programs were there.
We did a big investment in Saskatchewan. SaskTel brought broadband to all First Nation schools in Saskatchewan. It was SaskTel that approached the department and said they were doing a major fibre optic build in the province to connect schools off reserve. They approached us and asked if it would be an opportunity that the department would get involved with. We definitely did. We didn't do something intricate with financing, but we were able to put that funding over five years working with SaskTel. If it weren't for their big investments off reserve, we would not have been able to do it just for the community. We see that partnership starting to happen.
Senator Moore: Ms. Comtois, the bottom of page 12 of your brief — and Senator Wallace led into this — is about the 1,471 non-compliant essential community-owned fuel tanks, and Aboriginal Affairs has received funding to help address this challenge. How much funding? What are we looking at in terms of per unit? Are you looking at cleaning this up over many years? If I so, how many? How many dollars do you have now to help with that program?
Ms. Comtois: As I mentioned, Budget 2011 provided some funding. I said $44 million but we actually received $45 million from the budget over four years. The department also committed their own funds towards this initiative. Overall, the funding will be $79.5 million between 2011-12 and 2015-16. That is what we are doing right now to support the work on those essential fuel tanks. That is across the country.
Senator Moore: Across the country; okay.
The Chair: I appreciate your precise question, Senator Moore. It gives everyone else a chance.
Senator Meredith: Back to the connectivity issues, you mentioned 26 First Nations being connected. How many First Nations are not connected right now? Why are we not utilizing more satellites, repeaters and receivers to connect these communities rather than trying to put in fibre optics?
Mr. Carisse: Almost every community in the country is connected to a certain extent. I have to say that Industry Canada has their definition of ``broadband,'' which is 1.5 megabits per second to the household. Certain communities could still be on dial-up or satellite, and technology keeps changing for satellite. They can get better and better with more bandwidth. The problem with satellite is latency issues. With some uses of broadband, especially Health Canada and e-health, you need quite a bit of bandwidth in the community to take full advantage. In remote communities, if we can prevent the young and the elderly from leaving the community for a routine check that could be done at the nursing station via broadband, it would be to everyone's advantage. You cannot necessarily do that with satellite all the time.
We know full well that fibre optics for communities in the North will not go to all of them for some time to come. If you can connect some to fibre, it also opens up more bandwidth from the satellites to those other communities that remain on satellite.
You have to look at the opportunities. There is no way that the department on its own can do a major fibre optic build. With our priority ranking framework, as Mr. Schauerte mentioned earlier, it is difficult to put a fibre build in there with potable water and with schools. What should come first?
There's a great opportunity for broadband in northern Ontario. I don't have all the numbers, but if I remember, Bell was putting around $25 million on the table, the province about $35 million, and the federal government came up with the rest. You take advantage of this, and it is to everyone's advantage.
On a health and safety issue, can you put that against water and waste water? You can maybe with health and safety, but it gets difficult. You also have to see the advantage of taking it when an offer like that is put on the table. Broadband will always beat satellite; that is the way it is. However, some communities will remain on satellite. If we can open up more bandwidth to them and with technology changing, there should be opportunities to get good bandwidth and access.
Senator Sibbeston: The process that our committee is undertaking in terms of finding out about housing on First Nations reserves involves the gathering of facts like we are doing and getting information from you. We will hear from Aboriginal leaders, perhaps visit some reserves and eventually come up with recommendations as to what would improve the situation.
What is your feeling from the government side? Would you be bold and truthful enough to tell us what needs to be done from the government side? Is it better programs and more money? Alternatively, when all matters are considered, is the solution for First Nations to make big improvements and changes and become more efficient, and so forth, to improve? Do you think the solution is primarily in the hands of First Nations?
Mr. Carisse: I have to say that the solution is always in the hands of First Nations. Certain communities out there — and you will get a chance to talk maybe with chiefs like D'Arcy Bear from Whitecap Dakota Sioux — are doing tremendous things with their communities. If you get the opportunity, go and see that community. There is a lot to be said about geography — location, location, location. It is difficult to have economies or much employment if you are a remote community. For a lot of these communities that are doing well right now, you can key into governance for sure with the leadership, especially with the long-time leadership. It's difficult for a lot of communities, especially if you look at some of our infrastructure projects that easily go over two years. When there is a turnover of leadership in certain communities, it becomes very difficult. If you look at that, the governance is very important.
On the infrastructure side — and we've talked about this before — looking at different tools that can be out there to make it more comparable on reserve than it is off-reserve, municipalities have a lot of different tools at their disposal that do not exist for First Nations with respect to financing and municipal acts. Municipal acts started in the 1800s and have kept changing with time. We're still dealing with an Indian Act from 1876. We want to see modern tools and do infrastructure the way it's happening off reserve in 2013, but you're going back to an act from 1876. So there are some issues there in regard to land and how that is being used. There are different initiatives right now to look at that, which touches on the housing.
It's tough to say where you pinpoint. The infrastructure is all intertwined. I believe housing is the number one issue that a lot of chiefs would mention regarding the need for infrastructure, but in housing you need water. It doesn't necessarily have to be piped water, but you do need potable water and accessible drinking water for the community and to treat the waste water. You need to get a road to that house; you need to have electrification or energy. This is how everything gets intertwined.
I think infrastructure codes would be very important. We were talking earlier about schools. We will have industry come in and build a school, and they're bound by their contract to build that school to code. We provide enough O&M to maintain that infrastructure to code. It's a different situation with housing. How can we fix that?
I would love to say there is a silver bullet and if we fix that, if we do this, everything will change. We have to look at it on a lot of fronts, including governance. I don't think anything can be imposed either by the department or by government. This has to really be done working with the grassroots, with First Nations, to see what they think and where the chiefs and leadership think we should be going.
Senator Sibbeston: I think Canadians don't know a great deal about the issue. Housing is pretty fundamental to everybody. You acquire a house and you borrow money. You have a mortgage on our house and you work all your life. After 30 years, your mortgage is paid off and you enjoy that for a while and then you die. That's the Canadian story.
In terms of First Nations, what is the story? It's unlike a normal Canadian story in terms of the way they acquire a house. Can you tell us, for instance, how Aboriginal people acquire a house and what's involved? Do they pay taxes? Do they pay for all the services? Maybe you could help us understand the situation.
Mr. Carisse: You'll hear from some folks, like the Aboriginal Financial Officers Association, that there is a lack of financial literacy in many communities and, as a result, there is obviously not as much home ownership and there is lack of rental regimes involved in communities. It's the complete opposite with respect to the number off reserve in regard to rental regimes, home ownership and social housing. When you get into communities, it's exactly the reverse. For most communities it's band-owned housing. It's a very different situation. In order to get housing in certain communities, it's up to decisions by made by chiefs and councils. Some communities have decided that would be off the community. They have their own housing authority to do that, but for someone who lives in a community and wants to go off reserve and borrow funding to have their own mortgage, it's not easy right now. Those are the tools that are missing. For some community members who are wilfully employed, they do want that and they're looking for that opportunity.
We have the First Nations Market Housing Fund. We had our colleagues from Canada Mortgage and Housing Corporation here yesterday to talk about that fund. It would be a good idea for the committee to have some folks here from the fund itself to have a discussion with you. It has not received the numbers that were anticipated, but, again, it's so different that I think it took a bit of time to get going. It may be on the cusp right now of people looking into this more. Once people get into that and then get into mortgages and doing financing — the more you see this, the more you're going to get communities that will want to jump into that. They will start seeing a difference in their communities and financial literacy will start happening at that point.
That would build into what we talked about earlier, namely, economic development; the Canadian way, I guess. If you're going to start your small little company, it starts with what you own. For most people, it's their home that they can use for collateral as their asset. You can't do that for many communities right now, but it's changing.
There are communities out there that are difficult. Some housing has been built for more of an economic development venture like Sunridge, in Osoyoos, which is a beautiful development. There are communities really moving forward and looking at some home ownership. If you go to Kahnawake and Wendake, they have that already. It could be interesting to get some folks from those communities to come in to talk about their experiences and how they managed to get there.
We have had folks come to talk to us about Wendake. They told us it was a journey of 30 years to come to where they are now. It takes time. If we look at that experience and try to replicate that somewhere, hopefully we can save some time and help other communities get there.
The Chair: I think we want to try to look at those best examples.
Senator Raine: My first question is about the design of schools. Many of these schools are being built for relatively small communities. If you think of a school as being occupied with children from 9:00 to 4:00 and then the building sits there, is work being done to design a school as a community facility to be more than just education for children but ongoing life education and recreation facilities, as well as community libraries and community connectivity facilities? Are we still designing schools as schools only, or are we moving into schools as the heart of the community?
Mr. Schauerte: Certainly our approach over the last number of years has been exactly on this path of working with First Nations to look at their needs. If they don't have any other facilities that would meet those needs of a community centre or as a gathering place for the community, they turn to the school facility to do that.
While we have our school space accommodation standards that sets out, given your student population, what we will provide funding for to build that school, we often work with First Nation communities to go beyond that and work in partnership to expand kitchens so that they become community kitchens. These facilities are usually open well beyond the school hours of 9:00 to 4:00. They're used in the evenings for other education and for community gatherings, and they are used on weekends. There is definitely high-volume usage, and it goes well beyond just education.
We do try to work with First Nations to meet their needs and what they're working for. We're working with Health Canada as well, with their Head Start program for daycare services, to build them right into the school facilities. We are trying to find new ways to approach the building of schools and to ensure that they meet the community's needs.
Senator Raine: When you're designing them, then, in terms of their operation and maintenance, is it done by the school committee or school board? How is it administered when it starts to move beyond just the education department or the education delivery? How is that operated?
Mr. Schauerte: It's operated by the community. If the community has an education authority, they will be the ones responsible, but often it's working with chief and council; with the principal for the school. It would be very community based on how they would approach it. It's their facility, owned and operated by the community, so they would determine its use and who will have access.
Senator Raine: I'm aware that there are health issues on reserves, with rising rates of obesity, diabetes and those kinds of problems. It's not just on First Nations reserves but all across our country.
Are we building adequate physical recreation facilities to ensure that the kids will get the right physical activity during the day? I am thinking especially in areas where the weather is difficult in the wintertime.
Mr. Schauerte: Historically, there may be cases where a school may have been too small and they would not have built a gymnasium, but our standards for funding dictate that if we are to build a school in a community, regardless of its size, the school will have a gymnasium for the students to play. When we do the landscaping and site development around the school, we ensure there are adequate outdoor play structures, baseball diamonds and running tracks, all with the mind of encouraging physical education within the communities.
Senator Raine: Diverting a little bit from the school situation, if you look at a school as the heart of a community oftentimes, I know we are talking now about going to different models of accommodation, of housing. If you are going to have start-up homes — that is, apartments — and then seniors' housing, will they be located near the schools so they can have easy access without transportation difficulties? Are they getting into the planning that allows it to work, so that if a kid wants to play baseball and the school bus hasn't taken him home and he can't play, he is not somewhere a long way away?
How is the planning? Infrastructure isn't just bricks and mortar; it's putting a plan together so the community can grow logically and efficiently. Is that happening?
Mr. Schauerte: Historically, reserves were developed with no use of centralized planning that no one would understand living off-reserve in cities such as Ottawa or any town. That is changing. We are starting to see a number of communities moving toward the idea of community planning and master community planning in terms of laying out a community. When they are building new subdivisions, they are trying to keep them more compact, which brings down cost for services, building them closer into the core of the community, so that, as you say, they have access to the community facilities, the school, the community centres and the recreation facilities.
I would say it is still in its relatively early years, the idea of it. The department, through our lands and economic development sector, has been working with First Nations to advance those initiatives around centralized land use planning and bringing in modern technologies such as geographical information systems to help them plan and visualize how their community can build. There are a number of initiatives the department has been undertaking.
The Chair: This may be a tough question, Mr. Carisse, but we have covered quite a broad spectrum of activities in the department, and thank you for this overview. In your mind, would you have any advice for the committee about priority issues with respect to infrastructure that we should focus on?
Mr. Carisse: I would have to say that the big issue comes down to money and infrastructure financing and how we can do it differently. With the money that is right there, I am sure there are ways we can stretch it more. This touches on a lot of aspects.
As I mentioned earlier, you look at municipalities and municipal acts and how they access bond markets through the province, et cetera. We have tools like the FNFA that are starting up, but infrastructure financing is really key. If you can crack that, it touches on water and schools; it could be roads and bridges; connectivity touches on a lot of fronts. I think that housing has to be a priority.
My personal view is that we have made many great strides. Legislation and regulations have come out in the last number of years regarding water and waste water. There has been a national assessment and we know more of what the need is out there. We have a good idea — good or bad — of the risk systems that are there. We have a good way of training the operators.
I think we are doing well also with schools. There is an act being proposed, as you all know, in regard to education. We have a priority ranking framework. We are starting to build. What is the need for schools? We are getting additional funding.
Housing is one of those issues, the one that I have to say government is — at least the department is a bit more hands-on but a bit more hands-off, whereas it's more of an allocation to two thirds of the communities out there. It's a funding allocation. It's not over $1.5 million as a major project where the government will play more of an assistance role. I think lots can be done, more on housing. Financing and housing would be two key areas, and housing would include the codes as well, making sure that housing is built to code and maintained to code.
The Chair: That's very helpful. Thank you.
Senator Tannas: This has been interesting. We talked both today and the last meeting about infrastructure deficits. I believe in this idea that what gets measured gets managed. Actually, as we were talking, I think we learned there's roughly a hundred thousand housing units on reserve and the document here says you're building 1,750 new ones and renovating some old ones, which is good, but 1,750 new per year. That's 1.75 per cent, yet I think Aboriginal population growth is faster than that.
Another great saying, of course, is that when you want to get out of the hole, you first have to stop digging. Would it be fair to say that we are widening this deficit in housing? I would be interested in your comment on that, but also, can you tell me if there is any kind of measurement that you are doing around infrastructure or that somebody is doing around infrastructure deficits in each of the areas?
Mr. Carisse: In regard to the widening, the gap is getting bigger and it's the same off reserve, so we have to come up with a solution. With the population growth there may be more people coming onto reserve. If you build that fabric in the community of new schools, of some better infrastructure, you actually may get some people who want to get back to the community.
Then it goes into what types of schools do you build and can the water treatment plant take it? Do you have enough energy? It goes into the housing again. It's all intertwined.
Right now, though, to try to fill that gap, it's mostly based on social housing and the allocations that the communities receive. This is why, if we can come up with the tools to make it more accessible for First Nations in the community to do the rental regimes, that's actually another point, but to actually get into having mortgages, et cetera, like the market housing fund, that will help promote that it's not just social housing. There are people who might want to have their own homes and purchase their own homes.
The rental regime is another thing. Few communities actually have rental regimes. To me, there is a real benefit to promote the rental regime, to use the funding that comes through the community from rental regimes, that they could reuse those funds afterwards to help their own housing. It is a vicious circle when it doesn't happen. I understand the situation and chiefs will say there are so many priorities on their shoulders that they have to prioritize, and I agree, but it's a bit of a Catch-22. If you don't start, you don't reap the benefits of having those rental regimes.
For the infrastructure deficit, the one we have done recently was on water and waste water where we did the national assessment. It came out and said that about a $1.2 billion was needed right away to meet the standards, and for growth another $3 billion or so. Again, the numbers are plus-minus a certain percentage. The idea is that there is a big deficit out there in water. We have not done such a precise needs assessment for other infrastructure the way we have done it for water and waste water, though. Based on what is reported from First Nations and their infrastructure plans, we do have an idea of what the needs are, but the national assessment, the difference is, we actually went into the communities to actually assess. It wasn't just self-reporting. It was very proactive or active going into the communities to assess the needs.
Senator Tannas: Right, and you have the same criteria.
Mr. Carisse: Across Canada, yes.
Senator Raine: You've mentioned ``rental regimes'' a few times now, and I'm not sure I completely understand what you're talking about. Could you give us an explanation of how it would work?
Mr. Carisse: Basically, in many First Nations, the residents of the homes do not pay rent. They are in the homes. The allocation comes from chief and council. No rent is being paid, so no money is being generated, no revenue. It is not back to the department. There is no revenue going back to the governing body, if it was in a municipality or province or whoever. This would be going back to the community itself to try to do something with those funds to help the housing.
A shelter allowance is provided. I think it is about $125 million a year that the department provides for a shelter allowance through the income assistance program. But that shelter allowance doesn't necessarily go automatically to rental regimes and to rent. Again, it gets to the First Nation and to chief and council in their block of funds, and they have priorities. They may decide to prioritize into water or different infrastructure, different needs in their community. That is the issue with rental regimes, that is it is just not there.
Then you get back to the issue we were talking about earlier about financial literacy and that whole idea of paying rent. If you start doing that, you also build what I see as a sense of ownership with not just the house that you have been given but the home that you are living in. It is a great big mindset difference. You are paying rent and you are in this home, and then I think you would start taking a bit more advantage of taking care and improving the house and the lot that it is on. You don't necessarily see that in many communities right now.
Senator Raine: We are talking about two things really. One is people have become expectant of having a home provided to them at no cost to themselves, which is not the case in most places in the world, but more so, it is like ``I am entitled'' without ``I am obliged or it is my responsibility to look after it.''
Mr. Carisse: Correct.
Senator Raine: Whereas if you had a regime in place and you were not looking after it, you could be evicted, and the next person on the list wanting to look after it better could have an opportunity for a home. Something like that?
Mr. Carisse: That is it.
There are communities, though, that do have their rental regimes in place. It is going well. Being a housing manager in a community would not be very easy. I think it would be to the advantage of the committee to hear from some of the housing managers in the communities about the issues they deal with.
I think the ones where it is working well are also where you have an actual housing authority where it was a decision by chief and council that they will not be part of the housing process. They would leave that to an authority outside of chief and council. Even if it is an allocation of housing, it is depoliticized completely. It is based on needs. I think that is the best practice as well. The rental regimes have to be something to be discussed.
Senator Raine: Going further, of course, it is the opportunity to have your CP, certificate of possession, for the piece of land, and then invest in or build your own home, which you eventually could own. Then you have an asset that you could borrow against and pass on to your children, et cetera. We really have been denying that to First Nations citizens.
Mr. Carisse: That is right. I believe there is a great want out there, probably more than we anticipate for those who would want to have that in their communities.
The Chair: Mr. Carisse, could you give us some locations where the rental regime and the housing authority are in place?
Mr. Carisse: Yes.
Senator Dyck: I do not think I have asked a question yet, have I?
The Chair: Briefly, but by all means, you have the floor.
Senator Dyck: Thank you for your presentation tonight. You came very quickly, and I thank you for the table that you provided.
I will go to my big question. You had some very interesting examples. You brought up the Whitecap Dakota First Nation, which is an example of a First Nation that has done amazingly well in the last few years.
I was thinking about housing and building. I know that a couple of programs in Saskatchewan have started different training programs at the University of Saskatchewan where they are constructing houses. They transported them to Cumberland House or someplace like that. Mount Royal High School, which we visited in our education study, had a construction facility. They may be somehow linked with a First Nation as well. There is starting to be these educational programs.
You talked about how you needed money and different ways of financing to kind of lever more money, but I'm thinking you need more than that. You need the financial, you need the department, you need industry, and you need training. The First Nation is in the middle, connected to all four bodies. The Whitecap Dakota First Nation has that. They have training now, I think with Boeing. There is a program set up with the Saskatchewan Indian Institute of Technologies to train people on the reserve. They have financing. They have department money. This is a whole new initiative that they are starting.
I am wondering if you could apply that to housing, because that is a need for pretty much every First Nation across the country. Is there a way that you could involve the training facilities with the department and with an industry — the construction industry, I guess — and with a bank and they can all get together. How does that sound?
Mr. Carisse: I think that sound goods. It is very close to what we are doing with the Circuit Rider Training Program, where we are bringing people for water. I mentioned this in the past. We have been looking at that for schools. We could definitely look at something like that for housing.
The way we were thinking about this a few years ago was to have a Circuit Rider Training Program for public works in general. A lot of communities may have John or Janet who is a happy level 2 certified operator and they want to stay in their community and are doing great with water, but they need a housing manager. There is maybe not enough housing to warrant a full-time housing manager, but they need assistance there. It may be something completely different in another community where they have a great housing manager but for some reason are lacking with their water. If we had a tool that we could provide to communities and tailor it to their needs, that would be helpful.
Senator Dyck: You also brought up in one part of your presentation the idea of proposal-driven projects and whether this could be that kind of thing where there is a special pot of money to draw in the different partners to start something, and you could do one or two or however many are necessary to start it as a way of testing it out.
Mr. Carisse: Yes. I think it is a great idea.
The other thing we are looking at — and this touches on it — is hubs. I think where you do have a hub, such as the Ontario First Nations Technical Services Corporation or the Technical Services Advisory Group in Alberta, to provide technical capacity. They can build that capacity there and really provide that to their members. There are tribal councils that can do that as well.
We also know there are some organizations out there, and we are working with the Atlantic Policy Congress at this point in regard to developing water regulations, but also on the public-private partnership. They are looking at creating not with them but a water authority somewhere in the Atlantic, and they would be taking care of the water needs and the demands out there. There are definitely some possibilities.
I think some communities will struggle for a while because of sheer numbers. If it is a small community of 300 people, you probably will not get a housing manager, a lands manager, your treatment plant officer. There has to be an aggregate somehow that you can go to in order to get the expertise that you may not be able to get within your community.
Senator Moore: I have a question for Mr. Haggerty to confirm something, and then one for Mr. Carisse.
With regard to the First Nations Financing Authority, I think you said that it has been in existence for a number of years. It went to the bond market and raised $150 million. Is that in the bank somewhere?
Mr. Haggerty: It's my understanding that this February, early the next calendar year, they will be issuing a 10-year bond in the range of $100 million to $150 million, so they do not have access to that money yet.
Senator Moore: Oh, it hasn't happened yet.
Mr. Haggerty: No. That's my understanding.
Senator Moore: So how long has it been in existence?
Mr. Haggerty: I don't remember the exact year that they were established; 2007, I think.
Senator Moore: So they're just now getting around to going to the bond market. Why just now, if there's an apparent need for funding? We've heard that. We've just heard from Mr. Carisse that financing is a big issue. How is it that you're just going to the bond market in February of 2014?
Mr. Schauerte: If I may, senator. I have a bit more history on this file.
When the act was created, it required a number of months just for the set-up of the act and to create the institutions. It took a few years just to create the institutions — the First Nations Tax Commission, the First Nations Finance Authority and the other institutions. Once they were created, they had to start then going out and identifying communities that may be eligible to come under the First Nations Finance Authority. It's not as simple as ``You are eligible; you are in.'' You have to go through the fiscal management board, through a rigour of assessment to ensure that you're viable as a community to enter into the bond market. There's a role for the tax commission in terms of understanding your ability to levy taxes within the community.
Each of the communities that expressed interest in joining the FNFA had to jump through a number of hoops in order to get there. They expanded what was an eligible source of revenue for a First Nation looking to join the FNFA. Originally, it was own-source revenue. It's expanded to sources of funds that come from the federal government, for example.
All of this has occurred, and its culmination has led to the fact that they're just getting to a bond issuance at this time.
Senator Moore: But the First Nations aren't party to the bond issue; it is the authority, isn't it?
Mr. Schauerte: No, on behalf of the First Nations.
Senator Moore: But the authority goes and raises the money, and then the First Nation would come to the authority and say, ``I have a project and I'd like to apply.'' Is that how it works?
Mr. Haggerty: Essentially, yes.
Senator Moore: I keep hearing ``financial literacy.'' What about insurance with regard to mortgages or the financing that might happen under the First Nations financing agency? Is that obtainable? Is it something that CMHC is involved in? How does that work? I expect that one of the conditions you would have to be able to say to the financing agency is, ``Yes, I've got insurance on this.'' Is that obtainable? I realize some of these nations are remote and that some may not be, but is that an issue?
Mr. Schauerte: Insurance certainly is an issue on reserve. There is a lack of use of insurance on reserve. Historically, as the department moved out of its pre-devolution where it did own assets, there was no need for insurance; the government self-insured the assets. As we have moved through devolution over the past few decades, there has been an effort to bring insurance on to reserve for various assets, both homes and public infrastructure.
As you noted, senator, rightfully, some communities, whether they're remote or they have high incidences of loss of asset or something, they've almost become uninsurable; very difficult to obtain insurance. We've been trying to work on this issue with First Nations, exploring with First Nations and the insurance industry to explore ways to encourage greater use of insurance on reserve, both for homes and for public assets.
One of the keys we do note is an aggregation of assets, trying to pool assets. The more assets you have, the more you can bring high-risk communities together with low-risk and blend that cost across multiple communities.
We know the insurance industry at large is very interested in entering into the on-reserve market, but they're very hesitant. It's a lack of knowledge issue, and there are only a very few insurance companies that have a historical background or relationship with communities enough to feel comfortable. But there are even cases such as the Membertou First Nation, in the Atlantic, creating their own insurance industry, which is that's another encouraging initiative.
Senator Moore: So is it a matter of the leadership in the First Nations? Does most of the leadership understand that an insurance capacity, to be able to insure their assets, is an advantage and can lead to securing financing and bettering the community? This financial literacy thing bothers me, and I want to know: Is this something that has to be worked on or is it understood by the leadership?
Mr. Carisse: I think there is some awareness around that that would help. But I think for some First Nations, it's just the premiums that they are looking at that are so high. For chief and council, they have to weigh: Where do you go with the funds? They know that even though there's no insurance, should an asset like a school — or something happens, the government will be there again for 150 per cent of that school. It's not what we'd want to see, but right now, with the pot of money that the chief and council get, all the priorities they need to do — and they are working with the fire underwriter surveyors. There are certain things that a community can do to actually lower their premiums, and it doesn't take that much. Some people think you need to have your hydrants and a high-pressure system. You don't. You can have a pumper and a couple of water tankers and a volunteer fire department, and you can actually get those rates going down.
I think this is the awareness that needs to be done, and I think it's also some of the tools that we could use. At one point in Ontario, off reserve, the province was working on something for their rural municipalities. I think it was with the Ontario Fire Marshal. But it was a tool such as that.
So if you're in a municipality, you would plug in what you had in your community and it would tell you, like a guide on what you should do as improvements within your community to try to lower your insurance rates to work with fire underwriter surveyors. So there are those opportunities, but I think this is how we can help them build that.
Senator Moore: So do you have a list or some figures, some statistics that we can look at showing insured communities or facilities within First Nations? Do you have anything like that? I almost feel like we're starting new or something here.
Mr. Carisse: We can look into it. Offhand, I don't know if we have any type of information like that, but we can look in with our regional offices to see if they know of any communities or some best practices that are out there.
Senator Moore: Because that gets into mortgages. It gets into understanding what a mortgage is. It gets into defaults, foreclosures. So people have to understand the fundamentals.
Mr. Carisse: Correct.
Senator Moore: It is the same with the rental stuff. What is a lease? If you don't pay, you're evicted. Do we have numbers on that kind of situation, or is this all new?
Mr. Carisse: No, we would not. You may have to go to individual communities to get some of those numbers.
Senator Moore: I understand.
The Chair: Given the mention of your regional offices, I wonder if you could give to the committee an outline of the structure of your Community Infrastructure Branch. Obviously, you have a headquarters. What role do the regional offices play in capital infrastructure? I think we need to understand how decentralized it is and what the roles of the regions are, please.
Mr. Carisse: Sure. At headquarters, we are more, I guess you could say, the policy end to come up with the standards, the programs, the management accountability frameworks, et cetera. For each piece of asset, we do have a sort of standard. Mr. Schauerte mentioned earlier the school accommodations standard. If you are going to build a school, what is the price per square metre that we'd be looking at? What kind of rooms would we be looking at within the school?
Our regional offices are really more the delivery arm of the program. We are basically set out the same way throughout the department for the various programs. You have a regional office in each province, in each territory, except for the Atlantic. So for the four provinces, there is one regional office, which is in Amherst.
For this program specifically, because it's a capital facilities and maintenance program, it's an on-reserve program. It doesn't go to Nunavut, where there are no First Nations on reserve, nor is it in N.W.T. There are a couple of communities and a couple of reserves in N.W.T., such as K'atl'odeeche and Salt River. They get their funding through devolution in the GNWT.
The presence is mostly south of 60, but we do have a few communities in the Yukon, especially those not under self- government. There are still three communities there where you will see a presence of the capital program.
The regional office is the delivery agent for the program. On a yearly basis, the First Nations do a First Nation investment infrastructure plan to decide where the billion dollars will be spent. It goes through the regional offices, which it puts into a regional plan. There it's based on what Mr. Schauerte was talking about earlier, which is the priority ranking requirement for all the pieces of infrastructure. Then it gets to headquarters, where we also have national priority ranking frameworks over the general one for all assets. Specifically, we have one for schools, one for water and one for a few tanks, so we can prioritize across the country.
At one point every region could do different school projects, but we realized that with the need that's out there we wanted to make sure that nationally those schools that were in most need, the water that was in the most need, broader projects and for fuel tanks, would get the funding. Essentially, we brought that back because of the health and safety issues involved with those asset categories.
That's pretty much on a high level how the capital program works and the division between headquarters and regional offices.
Senator Meredith: Mr. Carisse, with respect to asset inspections, how often are they carried out? Probably Ms. Comtois can answer that with respect to whether there is something we should be focusing in our report as we look at codes because that keeps coming back up.
On page 13 you indicate that currently some infrastructure on reserves has a reduced life cycle due to lack of code compliance, insufficient maintenance, or operation and maintenance of funding being redirected and addressed to other needs. How often are these carried out to ensure that the codes are being met? Is that something on which we should be focusing? In our study, how could this committee look at ensuring that funds are locked for identified needs so they're not redirected to other areas? Possibly chief and council thinks there are other priorities but, again, it affects the health and well-being of the First Nations people. Would you elaborate on that for me?
My other question goes back to broadband competition amongst Bell, Rogers and TELUS. What kind of mechanisms are we looking at to ensure that we have competition and there is not this monopoly on certain communities by one major player in Canada? If you want to elaborate or provide us more information on that I would appreciate it.
In an era where we have increased competition and where we want to ensure that communities not suffer as a result of one company saying they don't want to make that investment, what is Aboriginal Affairs doing to potentially invite, in a P3 scenario, other interested parties or smaller companies that are start-ups that have some cutting-edge technologies and ties into the satellite network?
I disagree with you somewhat with respect to satellite technologies. Now we have so many satellites in space that are beaming back, with dish television and so on, and companies are going to that and there are so many subscribers. There are technologies out there that could be employed to address some of these remote communities. I think we're doing a disservice to First Nations if we're not ensuring that they're connected economically in terms of economic development and e-commerce. Some products that are being developed on these First Nations could be sold through websites and so forth. We need to look at that. Please elaborate on that for me.
Mr. Carisse: In regard to asset inspections, we have an asset condition reporting system under which, on a three-year cycle, all the publicly funded assets in every community are inspected by qualified assessors. They go into the water treatment plants, the schools and they will also go into community buildings, et cetera. Wherever the department has put funding towards a public asset they will go in on a three-year cycle.
This is one of the ways we can see whether the O&M is properly being applied, whether the asset is being properly maintained and whether there is any deterioration. However, on a yearly basis there is a performance assessment on water, which is a little bit different. It does not go into the detail of engineering, but you get folks going in to ensure that the system is performing and they'll look at the books to make sure that good drinking water is coming out of the system.
To ensure that the funds are locked, it goes into chief and council. By coding we're able to determine exactly what money goes into what community for what purposes. It's a bit different on the receiving end for the First Nation because they do receive a block of funds and consider the priorities of the chief and council when deciding where they want to put that funding.
I don't disagree. There are areas such as water for the O&M especially. I think it's a disservice to the community if the money doesn't go there and the assets start to deteriorate. That being said, I am not a chief, I am not in the chief's shoes, so there are priorities that they have to fit everything against. I think it would be good to listen to leadership and their views on that. We're working in Ontario on how we can ensure that.
Mr. Schauerte: An inspection will identify a deficiency quite well, but historically, if no one acted on that deficiency, the report was put on a shelf and we would see the same deficiency three years later when we looked at the asset.
How can we influence behaviour and action coming out of an inspection? We're starting with our Ontario region and the First Nations there to change the tools we use and the dialogue we have on an annual basis with the First Nations to have more follow-up once an inspection is done and those deficiencies are noted. We will now expect to see those deficiencies listed as capital projects on the First Nation's next capital plan when it comes forward the next year and that they devote funding to it. It can't just sit on an unfunded column. We will expect them to start identifying funding to it, on top of other priorities.
We're hoping that over time we can start to change the behaviour and make it more common. Once they have that report in hand and they're looking at the deficiency, it is hoped that they will recognize what they have to address over the coming 12 months to ensure their facility stays in proper working order.
Mr. Carisse: In regard to monopoly with telecommunication companies, the issue we face with a lot of these communities, such as in northern Ontario, is that there is no competition. It was Bell Aliant and that's it. If there is competition, definitely, it's for the benefit of the department and for government, but also for the benefit of the communities to get that competition. However, in certain areas there just is not that competition. It does not exist. For northern Ontario, it was Bell Aliant that we could work with. Thankfully, Bell Aliant came forward with money on the table to make that project happen.
I agree with you in regard to the satellites. There will be some communities on satellite for a very long time. The difference with fibre is that it's scalable. Once it's in there they're saying you're good for the next 20, 30, 40 years possibly, whereas with satellite you were always limited to the amount of bandwidth and there are latency issues.
That being said, technology is changing. I've heard recently about different types of radio waves that they would like to use to try to access communities, not just on reserve but off reserve too, and that it's a certain bandwidth that is not being used right now. We keep looking at technology, and as with any piece of infrastructure that gets into communities, feasibility studies are done.
For the schools, or for water, or for band council offices, we look at connectivity. What is the possibility? What works for connectivity? We are approached often. We are approached by either a telco or a First Nation. We try to work out a deal with the different players that are there, but if we can have competition, by all means.
The Chair: I will ask the deputy chair to have the last word tonight.
Senator Dyck: I was expecting you were going to do it.
The Chair: I will wrap up.
Senator Dyck: Again, I thank all the committee members and our panel, especially, for presenting us with a whole host of information and some interesting ideas. Thank you for that.
The Chair: I would like to echo that, too. This has been a very useful overview. I think we managed to cover all the many subjects that you raised in your introduction, and I will echo Senator Dyck that everyone's contribution was very helpful.
I will just inform members that we do have a meeting on Tuesday, and I understand we have lined up the First Nations National Building Officers Association and the National Aboriginal Economic Development Board. Some of the other organizations that have been mentioned tonight have been given invitations. I should also let the committee know that there will not be a meeting on Wednesday of next week.
Thank you, witnesses, and thanks, everyone, for your great questions.
(The committee adjourned.)