Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 3 - Evidence - February 5, 2014
OTTAWA, Wednesday, February 5, 2014
The Standing Senate Committee on Aboriginal Peoples met this day at 6:45 p.m. to examine and report on the federal government's constitutional, treaty, political and legal responsibilities to First Nations, Inuit and Metis peoples, and on other matters generally relating to the Aboriginal Peoples of Canada.
Senator Dennis Glen Patterson (Chair) in the chair.
[English]
The Chair: Good evening. I would like to welcome all honourable senators and members of the public who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples, either here in this room or via CPAC or the web.
I am Dennis Patterson from Nunavut, chair of the committee. Our mandate is to examine proposed legislation in matters relating to the Aboriginal peoples of Canada generally. In order to understand the concerns of our constituents, we regularly invite witnesses who can educate us on the topics that are currently of importance to them. These sessions are valuable in helping the committee to decide what future studies it will undertake in order to best serve the Aboriginal community.
Most recently, we have been holding briefings where witnesses have provided background information on the broad question of financing infrastructure on reserves, which could relate to capital projects, schools and housing, among other things. Lately we've been focusing on housing.
This evening, we'll hear from a frequent guest before this committee, the Office of the Auditor General of Canada. The Office of the Auditor General monitors many issues relating to Aboriginal peoples, including housing on reserve. Its June 2011 report noted that housing conditions on reserve continue to worsen, sadly. This is of great concern to our committee, and we are anxious to receive further detail and learn more from our witnesses tonight.
Before proceeding to the testimony, I would like to go around the table and ask the members of the committee to please introduce themselves.
Senator Moore: Wilfred Moore from Nova Scotia.
Senator Watt: Charlie Watt from Quebec.
Senator Raine: Nancy Raine from British Columbia.
Senator Tannas: Scott Tannas from Alberta.
Senator Ngo: Thanh Hai Ngo from Ontario.
Senator Beyak: Lynn Beyak from Dryden, northwestern Ontario.
Senator Wallace: John Wallace from New Brunswick.
The Chair: I'm pleased now to welcome our witnesses from the Office of the Auditor General of Canada: Mr. Michael Ferguson, Auditor General of Canada; Mr. Jerome Berthelette, Assistant Auditor General; and Mr. Frank Barrett, Principal.
Mr. Ferguson, we look forward to your presentation, which will be followed by questions from the senators. Please proceed.
Michael Ferguson, Auditor General of Canada, Office of the Auditor General of Canada: Mr. Chair, thank you for this opportunity to discuss housing on reserves, particularly with respect to what we reported in Chapter 4 of our 2011 Status Report, Programs for First Nations on Reserves. With me today is Jerome Berthelette, the Assistant Auditor General responsible for the Aboriginal file; and Frank Barrett, the Principal responsible for the audit.
I should note that our audit was substantially completed on November 1, 2010, and we have not audited any actions taken since then.
[Translation]
Our 2011 audit followed up on a wide range of previous audits affecting First Nations. It identified some progress in implementing some of our recommendations. Overall, however, we concluded that Indian and Northern Affairs Canada (now Aboriginal Affairs and Northern Development Canada), the Canada Mortgage and Housing Corporation, and Health Canada had not made satisfactory progress in implementing our recommendations.
Conditions generally did not improve for First Nations in each of the areas we audited and in some cases became worse. For example, the education gap widened the shortage of adequate housing on reserves increased, the presence of mould on reserves remained a serious problem, and administrative reporting requirements remained burdensome.
[English]
With respect to housing, we audited the government's efforts to address housing shortages on reserves and its efforts to address housing in need of major repairs. In a 2003 audit on the subject, we noted that Indian and Northern Affairs Canada estimated a shortage of about 8,500 housing units and that about 44 per cent of the existing housing required renovations. In our 2011 audit, we re-examined the extent of the housing shortage and the number of houses in need of significant renovations to protect the occupants' health and safety.
We noted that investments in housing had not kept pace with either the demand for new housing or the need for major renovations to existing units. According to unaudited data provided by the department, the housing shortage on reserves worsened since our 2003 audit because of increases in the demand for housing, the number of housing units having to be replaced, and the number of units requiring significant renovations for health and safety reasons.
[Translation]
At the same time, since 2003, the average cost to build or renovate each house rose significantly. In the 2008-09 fiscal year, new houses constructed on reserves amounted to only 30 per cent of the existing houses that needed to be replaced.
We also audited what the government has done to address the problem of mould in houses on reserves. The department has identified the main factors contributing to mould in housing as a lack of proper care and maintenance, inadequate air circulation and ventilation, poor site selection and drainage, overcrowding, and improper construction. For several years, mould contamination has been identified as a serious health and safety problem in First Nation communities.
[English]
In our 2003 audit, we found that Indian and Northern Affairs Canada, the Canada Mortgage and Housing Corporation, and Health Canada had organized and were participating in a committee to address the mould problem. In 2008, after consultations with First Nations, the three organizations developed a National Strategy to Address Mould in First Nation Communities. Since the adoption of the strategy, the organizations had worked to increase awareness of the causes of mould on reserves and to provide more training for addressing the problem.
In our 2011 audit, we found that progress was still not satisfactory. Despite having developed a strategy, we found that the three organizations had not allocated additional funding to address mould, determined the magnitude of the problem, estimated the costs to remediate existing mould, completed most items in the strategy, or met the strategy's timelines. As with other subjects we audited, we found that progress toward improving housing on reserves was not satisfactory.
[Translation]
Mr. Chair, as a preface to our 2011 audit, we identified what we believe are structural impediments to making significant progress toward improving conditions in First Nations communities.
We identified the following four impediments: lack of clarity about service levels, lack of a legislative base, lack of an appropriate funding mechanism, and lack of organizations to support local service delivery.
[English]
We believe these structural impediments severely limit the delivery of public services to First Nation communities and hinder improvements in living conditions on reserves. In October 2011, the Deputy Minister of Aboriginal Affairs and Northern Development called this preface ``the best piece of analysis on First Nations issues in decades.''
This committee may wish to ask officials at Aboriginal Affairs and Northern Development Canada whether their views regarding the structural impediments remain unchanged and what the government would need to change, including directions, policies and legislative reforms, in order to address these structural impediments.
[Translation]
The committee may also wish to ask the three organizations involved with housing on reserves what progress has been accomplished since our 2011 audit to address the housing conditions, shortages and mould issues on reserves.
Mr. Chair, this concludes my opening statement. We would be pleased to answer the committee's questions. Thank you.
[English]
The Chair: Thank you.
This is a challenging area. Your report is candid, which is appreciated. It seems to note unsatisfactory progress on the part of the federal government with respect to implementing recommendations made by your office. In 2006 and 2011, the reports noted the government response as unsatisfactory or generally unsatisfactory.
Over the years that your office has been monitoring federal program delivery to First Nations, have you gained any insight into why progress has been unsatisfactory? If so, could you share those observations with this committee, please?
Mr. Ferguson: I will say a couple of things myself and then I'll turn to Mr. Berthelette to expand.
We recognize that this is obviously a very complex area. In the preface to the 2011 report, as I said in my opening comments, we stood back and looked at various audits that we had done over the years to try to determine what the impediments were. We identified the four impediments that we listed in that preface.
I think I'll turn it over to Mr. Berthelette to provide more information for your question.
Jerome Berthelette, Assistant Auditor General, Office of the Auditor General of Canada: Mr. Chair, as the Auditor General has stated, the area is very complex. If there had been easy solutions, they probably would have been found by now. These issues go back a long time, and they're not going to be easily overcome.
When the office put together this 2011 chapter, it took a look at the previous audits that we had presented to Parliament. We did a review of those, and we tried to determine what the themes or the threads that ran through each of these audits were and whether there would there be some way that we could help Parliament to understand what the issues were. In approaching this particular audit, my colleagues Mr. Campbell and Mr. Barrett had a discussion about what is different between the on-reserve situation and the off-reserve situation. Why is it that the on-reserve situation is the way it is and why is it so different than off-reserve? Why is it that the housing situation is so bad? Why is it that there are issues with respect to drinking water in First Nations communities? Why is it that these things are so different? Why is education so poor? When we thought about that, we said, ``This should not be the situation.''
The office looked at the provincial situation and, through this analysis, came up with these four impediments. When you look off-reserve, when you look in the provincial domain, where the provinces are responsible for the delivery of these types of programs, you see that there is clarity about service levels. You talk about education. There's a certain clarity about what is required from the education system. What do children need in terms of their education?
When you look at the provincial system, you also see that there is a clear legislative and regulatory regime in place. Anybody who wants to know what is required of them can go to the legislation, to the regulation and to the officials who support the implementation of the regulations and the legislation and get answers. What is required of people is fairly clear.
We also noted that when the province puts in place a particular program, whether it's education, child and family services, social assistance, funding goes with it. There is dedicated funding that goes with these programs.
If I talk a little bit about housing for a second, you will note that the housing funding within Aboriginal Affairs and Northern Development is not dedicated funding as such. From time to time, that funding can be used for other purposes. As we noted in our 2013 chapter on emergency preparedness, when there is a requirement for additional funding to deal with emergency preparedness, some of that additional funding will come out of capital. While these things may happen at the provincial level, the one thing that we know is that when your children go to school, there will be teachers because there will be funding to support the teachers.
Finally, when you look at the provincial system, you will see that there are organizations that support the delivery of programs in the urban setting, in the provincial setting. There are NGOs. There are school boards. There's a health system. There's a school system. These support the delivery of the programs. When you look on-reserve, if I take education as an example, I think Aboriginal Affairs has found that what you have is a schoolhouse system. You have a number of individual schools. You do not have, for the most part, an education system supporting the teachers and students in those schools.
It is through that comparison between the on-reserve situation and the off-reserve situation that I think my colleagues came up with these four impediments. By asking the question, ``Why is it different?'' they looked at a province. They found what was there, and they said, ``If you're going to be effective in delivering the same sorts of programs on-reserve, then you should probably have the same sorts of approaches.''
I hope that answers your question, Mr. Chair, or helps to.
The Chair: I think that's very helpful. I'd like to ask you one follow-up before I turn to my colleagues.
As a committee, we have been examining this question of housing. We've been examining the question of building codes that came up in your report, the concern about the absence of building codes. We've been looking at the issue of mould. We've been looking at the quality of inspections of housing being built. We've found a complex system involving CMHC and AANDC.
One thing that seemed to come up as a problem, as a barrier to government departments demanding accountability — and this came from some of the officials — was the sense that we're dealing with a sovereign government. We respect the First Nations government, and so if they don't have a building code in place, for example, it's not our place to demand the kind of support that you've just described as present in provinces.
I'm just wondering whether, in your work, you've come across this issue and whether you'd have any comments on the fact that out of respect for First Nations governments, government departments delivering public money tend to back off. Would you have any comments on that?
Mr. Berthelette: Mr. Chair, I probably have three comments on that issue.
In terms of the demands from the government, we did a study of the reporting burden on First Nations. It's clear from that that the various government departments can and do require reporting and accountability from First Nations by means of the reporting requirements associated with the grants and contribution agreements and that First Nations do, to the best of their abilities, respond to those requirements. I don't think the governments are loath to try to put in accountability requirements. That's one point.
The second point I would make is that in the work we have done with First Nations, we have not, in our interactions with the chiefs and councils and the communities, ever heard a chief tell us that they are not in support of accountability. They've never said that to us. In our study of economic development of First Nations communities and institutional arrangements, that was a critical part of that particular audit. We noted that the First Nations communities do put in place accountability regimes. In some communities, they do separate the politics from the economic decisions. They're aware of accountability regimes, and they're quite prepared to put them in place and, in many First Nations, have put them in place.
When we talk about accountability in this particular case, both the government and the First Nations need to go back to first principles and try to understand what it is that they are both committed to trying to accomplish. What they are both committed to trying to accomplish is to make sure the First Nations have the homes that they need in order to have good lives, because the home is the basis of a good life in a community. If there's a good home, there's going to be a good life. They're both committed to that.
What the parties have to do is sit down to determine what it is in their conversations that drives them apart. I don't think the issue is one of accountability as such. In some cases, it is a situation of trying to understand what motivates the First Nation in terms of the approach they take. In some cases, the First Nation is motivated by the concept of the treaty right, and that influences how they approach this topic. However, in most cases, even in those communities where they talk about the treaty right to health, it does not stop them from using their own resources to put in housing. It doesn't stop them from using the departmental resources to support housing or going to the private sector to see what can be done to support infrastructure.
I think there is a common goal here, and if we could somehow get the two parties to talk about the common goal, maybe we could avoid this discussion about the imposition of accountability frameworks. No one, of course, wants something imposed, but if they can agree about what is required, then that will facilitate moving ahead.
Sorry for the long answer, Mr. Chair.
The Chair: No, that was very helpful. Thank you.
Senator Raine: Thank you for coming. I know it will be a very interesting session tonight.
One of the things that keeps coming up in my mind, and I'm sure I'm not alone in that, is I don't understand the parameters of what we call the treaty right to housing. Can you explain in a way that a layperson can understand? Is the treaty right to housing included in every treaty? Was the housing meant as it was when the treaties were signed, or how does that translate into what is meant today?
Obviously, when we look at the figures, we are so far behind in providing enough housing that if we are ever going to catch up, and if we have this obligation to catch up, we need to find different ways to do it.
First of all, I would like to understand what our obligation is, as Canada, having signed the treaties.
Frank Barrett, Principal, Office of the Auditor General of Canada: I'm happy to take that one. Thank you for the very interesting question.
We point out in paragraph 4.35, when we first start talking about housing, our very first line gets at the member's question: ``. . . the federal government takes the view that it does not provide housing support on reserves as a result of legislative or treaty obligations. . . .'' In our view, that's where a lot of the confusion begins. It's not a question of there being a signed treaty right on this. It's an evolved program and sense of policy. But what that led to, when we talk about structural impediments, is that it's unclear what the legislation is, which then begs the question: What service levels are appropriate for the federal government to be funding?
When you have First Nations basically raising concerns about not having adequate funding for adequate programs, it's very obvious in terms of what's being constructed. The question comes back to: What is the federal government committed to doing? What is it obligated to do? Those questions have not been resolved, and I think it's a very fair point to say that's where the confusion on this begins.
Senator Raine: That's the way I understood it, too. Having gone down that path of understanding, I then ask: Does an Aboriginal person living off-reserve have the same right or entitlement to housing, having this not being legislated but being expected, as someone living on-reserve? Is there a danger that we may encourage people to stay in a very remote community without much opportunity because they will get free housing?
I find that to be a conundrum. A good friend of mine once said that reserves are both fortresses in terms of protecting you from having hardships but also prisons in that once you start to go down that path, you may not be able to escape it.
In terms of housing, it's particularly troublesome to me, because the reading I'm doing says there is no HVAC system designed to deal with minus 40 degree or 50 degree temperatures, and then we're surprised there is mould.
That is a roundabout question, but maybe you could comment?
Mr. Ferguson: I will start with a general comment and then turn it over to Mr. Berthelette to see if he has anything else to add.
In the work that we have done, and in particular in the audit chapter that we mentioned today that we did in 2011, we haven't done that comparison between on-reserve and off-reserve.
I think, though, all of the work that we've done and the preface we had where we identified the four impediments does make it obvious that whatever framework is in place is going to impact on people.
You indicated that maybe some people would decide to stay on reserve versus off reserve, or maybe they would make other choices. I can't speak to the exact choices people would make, but I think you can see from the fact that there are obstacles, and people are living within either a legislative or regulatory framework, people will make personal decisions based on that type of framework. It doesn't matter whether you're dealing with First Nations issues or any other issues. People will always look at that type of framework to see how it affects them and then make their decisions.
I will turn it over to Mr. Berthelette to see if he has anything else to add.
Mr. Berthelette: The Auditor General has provided a very good response in terms of what motivates people to stay on or not stay on reserve. I'm not certain housing is the key factor in why people would stay on reserve. There are a lot of other reasons, including cultural, language, family and the connection to that particular territory.
In the off-reserve situation, Aboriginal people have, similar to the on-reserve situation, access to not-for-profit housing. They have access to supports to acquire rental housing or to buy homes. There is a structure off reserve that is available not only to First Nations people but to all provincial residents. That same structure doesn't really exist in the on-reserve community. We don't have the non-governmental organizations to help support the community and the development of housing. While there is access to rental housing, not-for-profit rental housing, through CMHC, the amounts available to individual communities are relatively small, and it is difficult for them to put together enough housing to make a dent in the housing situation on reserve, whereas off reserve there are a number of other alternatives, including general rental housing.
In terms of the on-reserve and off-reserve situation, we should look at what the off-reserve situation is like and see if lessons can be applied to the on-reserve situation to assist people in acquiring houses.
Senator Tannas: I'm curious about the shortfall. We've heard two numbers. AANDC estimates around 40,000 houses, and the Assembly of First Nations says it's closer to 80,000 houses. I note that in 2003 you audited a number, and you had unaudited numbers provided by the department, it sounds like, in 2010. One of the things we will need to do, I suspect, is to try and come up with the number, as depressing as it may be.
I would be interested to know anything you could tell us about the methodology you used to test what this shortfall was back then or what you might suggest we look at to try to come at the number and how we might test both people's theories of what the shortfall is.
Mr. Barrett: I'm happy to address the member's question.
I guess a couple of things. First, you're correct. In 2003, we identified there being on-demand housing on reserves of 8,500. We're saying it was over 20,000 by the 2008-09 fiscal year. In terms of housing requiring major renovations, it was just under 17,000 in 2003-04 and it was going upwards to close to 24,000 in 2008-09.
We didn't do a thorough audit of all INAC numbers, but we looked at the numbers they provided us and their methodology for how their numbers were gathered. As I recall, there was an issue of looking at all of the First Nation reserves. In effect, each band chief and council would retain records of those families waiting and looking for housing and the houses that were very much overcrowded. They were providing lists to INAC, and INAC had their own vetting process, and those were the numbers we used.
Senator Wallace: Gentlemen, over the past couple of months that we've had these hearing, what has struck me in all of this — and, Mr. Berthelette, you alluded to it in your comments — is that there is no shortage of people concerned about the problem. In the federal government, we have Aboriginal Affairs and Northern Development Canada, Health Canada, the CMHC, and the chiefs and councils obviously have their hearts and souls into this. Despite that, with all the brain power and knowledge those groups have, we have these problems.
With respect to the question that Senator Tannas asked about how the shortfall has been identified, it takes me back. As I listened to all the witnesses, my sense is there is a lack of precision in the expectation of how the issue is going to be addressed.
We had witnesses in earlier this week from Health Canada and spoke to them about the mould problem. We asked them if there was any progress. ``Well, that depends on how you define `progress.''' I guess you'd have a baseline to start with. You can't tell if progress is occurring if you don't know what you're measuring that against.
In the same sense, dealing with it in a broader sense with this housing issue, to me it would seem to make sense that on a reserve-by-reserve basis, the housing needs of each of those reserves would be identified; a plan would be put in place for each reserve for so many units to be built each year of certain quality, size and so on; and the funding that would be required to do that. It may be that it's a 5- or 10-year plan.
I think that seems logical, but I haven't gotten the sense from the witnesses that that type of — I would say — simplistic planning is in place. So it's a long build-up.
In your audit, have you found in place that type of planning and detailed preparation to properly address the issue? And is it in place with regard to each of the reserves?
Mr. Ferguson: I will start, and then I will ask Mr. Barrett to clean up after me again.
With this type of issue and with the question that the previous senator asked, the first starting point to try to get to at what is the shortfall is that there has to be good data. We are talking about a lot of reserves, many of them remote. The very first question for the department is: How good is your data and how good is your data on a reserve-by-reserve basis?
As Mr. Berthelette said earlier, if there were easy solutions to this, they would have been found by now. The problem, in a general sense, is all of those impediments that we listed, and it's not easy to overcome those impediments.
But what does need to happen is the type of — you called it ``simplistic,'' that type of approach to certain specific issues. Let's try to get some knowledge, data and understanding about certain specific issues, and then maybe we can figure out a way to improve those. It's just going to have to be incremental improvements as long as all of those larger obstacles remain in place.
I will stop there as a general comment and see if Mr. Barrett would like to add anything in terms of the audit.
Mr. Barrett: I would point out the situation with mould in terms of what we commented on in the 2011 report. There you had a situation where the strategy was in place, where information was going out, but there was no actual funding in the strategy for mould.
But we also noted that the government had other programs — remediation programs and so forth — where they were providing funding for renovations. Even though they had this strategy for mould, which wasn't funded to provide grant money, and they had this other grant money, they weren't tracking what renovations were addressing mould. So the government is left with not knowing the extent to which the renovation money is attacking the mould problem. The point made that we have to measure and monitor is absolutely right.
To speak against myself in a very little way, there is also a point to be made that it's not a fixed number. For instance, you have 650 residents for this reserve, and right now you're short 122 houses. If you build 10, then next year you need 10 less.
It doesn't work that way because typically there are a lot of residents who live on and off reserves, and the more houses built could also say to them, ``Well, there is room for me to come home to the reserve I want to be on,'' so they might attract more. It's not exactly a fixed, static number.
The point that there absolutely has to be measurement and objective analysis of what's being done is very important.
Senator Wallace: Along the same lines, Mr. Ferguson — perhaps you said it — there is no dedicated funding for this to solve the housing shortage; it's part of general revenue, and I guess the chiefs and councils decide where it is to be spent.
What would your thoughts be on the creation of a dedicated fund to specifically address the housing shortage issue and that it would be the only matter that the funding could be put to? There would be accountability measures from the chiefs and councils back to the funding department to ensure that if the plan is to fund whatever number of housing units, then that is what the funding is being directed to. As the funding is advanced, the progress of the plan is followed.
Mr. Ferguson: It's hard for me to say exactly whether they should have a dedicated fund or not.
One of the impediments that we identified was a lack of certainty in the financing mechanisms and that you would find more certainty at the provincial level. I will ask Mr. Berthelette to help out on this, but something that provides more certainty, whether it's a dedicated fund — I'm not sure if that's exactly where you would go.
The other thing you always have to be careful of with things like dedicated funds — I've seen it happen a number of times where a dedicated fund is established — is that there's a certain amount of money, and after a certain amount of time — and I know with housing that would be a long time — perhaps not all that money can be spent on that particular issue anymore, but it can't then be transferred to another issue. They then end up finding a more expensive solution to that other issue. Something like a dedicated fund or something that provides certainty would be a good first step, but you always have to make sure there is some flexibility in those arrangements so that when you look at what the funding overall is achieving, it's achieving it on the best value for money.
Senator Wallace: You can't look at it in isolation.
Mr. Berthelette: Mr. Chair, I absolutely support the points being made in this conversation between the honourable member and the Auditor General. What is required is a straightforward, simple approach to dealing with the issue.
When it comes to numbers, whether it's 40,000 or 80,000 or 100,000 housing shortage, we could start by picking a number that can be addressed, that both sides are prepared to address, put a plan in place to do it and identify the funding to support that plan. That would certainly go a significant way to helping address the issue. Perhaps by doing that, we could put aside for a little while the discussion about the treaty right versus whether it's just a policy issue. I think the solution the honourable member suggests is an appropriate solution in this case.
Senator Moore: Thank you, gentlemen, for being here. This is such a complex issue, I don't know where to start asking questions.
I find point 11 interesting, Mr. Auditor General. In October 2011, the Deputy Minister of Aboriginal Affairs and Northern Development Canada called this preface ``the best piece of analysis on First Nations issues in decades.'' That's flattering for a department, but in 2011 he finally woke up to those points? I can't believe that. You reported on all those things in the past. It's like all of a sudden, ``Oh, it's there, and now it's good.'' I don't understand why those things wouldn't have been the focus of the department all along — the lack of housing, the mould, the lack of a building code and enforcement of building code, CMHC ensuring code compliance was outside its mandate. We've had different witnesses here. Keith Maracle, a seasoned building inspector, told us about the issues.
Who is in charge? Somebody has to take the responsibility. When you're doing your audit, do you try to ascertain who is responsible for these various disciplines within funding, whether it's Health Canada, CMHC or the department? Somebody has to be responsible for these things. The buck stops there. Then you start to build proper systems so that the maximum benefit can be obtained with the taxpayers' money. I don't understand how no one is responsible.
In the parliamentary note we have here, it says in 2006 your report found that in regions that you examined, the department and CMHC indicated that national building codes were being met. Do you remember what regions you looked at? This was in 2006, Mr. Auditor General. Maybe one of your assistants can help. Was that a national thing, or was it just in a certain region?
Mr. Ferguson: I don't have that information with me right now. We can get it.
The frustration that you are expressing, we feel the same frustration within our office. We do a number of audits on different issues related to this file. In this particular preface, we tried to look back and summarize it. Let me make sure I put on the record that that preface was done before I got to the office.
Senator Moore: We know.
Mr. Ferguson: In terms of the deputy minister's comments, I think what he was getting at was that the preface, in a short number of pages, crystallized the issues down to those four main impediments to help people simply understand what that challenge is.
I think we all feel the frustration. In the office with Mr. Berthelette and everybody else, we have the discussion: If we are going to do an audit on something in this area, what can we audit that can help and what recommendations can implemented to then help improve the situation, at least marginally? In the preface, we identified four large impediments, and those are the systemic issues that need to be dealt with. In the meantime, it's all about a matter of trying to look at it from the ground up and asking what things can be done just to try to improve this, at least on the margins if we can't improve it overall.
Senator Moore: My point is I don't know why the deputy minister or his department would need you to tell him that. That is what their job is. This is where their focus should be. How long has the Indian Act been in place, and other agreements? They have to be told and, in 2011, the light goes on: There's a best piece of analysis? Well, come on. I don't understand that.
I want to go back to one of the items, this matter of mould. That goes back to quality of construction and building inspection. When you're looking at this issue with regard to housing on reserves, did you get into that? Who is setting the standards? Senator Raine has talked about this. You can't build a house for Nova Scotia that can be the same construction as minus 40 degrees here. Do you get into that kind of detail as to the quality and who is controlling it and who is trying to maximize the life of that dwelling? Who is doing this? It's clear to me that these departments are all operating in separate silos.
Mr. Barrett: If I could offer a couple of comments to the honourable senator's questions, first of all, we're looking at the federal government and federal activities, and they're funding things through contribution agreements. The contribution agreements may say we want to see that certain things are being done, reporting back, and we speak about the reporting burden elsewhere in the report. In essence, with no legislative base, and with the federal government not in effect holding itself accountable for the delivery of the service, in essence, it becomes up to each First Nation to decide what it is they're doing, again often without the supports in place that you may have.
If I may also offer a comment on the deputy minister's reference to our report: I do remember those hearings. That was before a Public Accounts Committee hearing. I think the point was that in 2006, we had both identified several recommendations that had been implemented and many key recommendations that had not been implemented. Then we identified, in essence, some barriers or some critical factors to implementing these recommendations.
Senator Moore: You mean the four impediments?
Mr. Barrett: Exactly. They were, yes, similar to, but a little broader. The four impediments I believe are more fundamental.
We came back in 2011 and we saw again some of the recommendations were implemented and some key ones were not. What all of that left one with was that even when the government is doing those things that make sense to do and making a difference, they're still at best treading water. They're not really improving the yardsticks much because, in essence, these impediments prevent real change from happening. I believe that was why Mr. Wernick saw this being as an extremely valuable piece, because these things have to be fixed all together as opposed to just running after and building an extra 10 houses here or doing something else.
Senator Moore: If I may comment, Mr. Chair, it seems to me the key is the legislative base. I don't care what you're doing; you've got to have that somehow. I don't know how, given the discussions about treaties, entitlements, rights, on and off reserve, and in and out of the act, but that has to be standardized to give everybody a fair shot and a fair opportunity to have a decent home and the fundamentals, like running water and washrooms. Some of the stories we hear are tragic. If we don't have those kinds of fundamentals, I don't know how anything can be properly addressed, even incrementally.
The Chair: We have a challenge.
Senator Sibbeston: I sometimes think and conclude when we deal with issues on a national level, as we do with housing for First Nations in our country, that it's such a big subject and in some respects frustrating.
My experience in the Northwest Territories is that I spent six years as an MLA. When I went to communities and identified problems of people living in tents and inadequate housing, I brought them over to Yellowknife and spoke about them and took pictures of them. I really banged the table, and government responded.
Over the course of years and decades, the housing situation in the Northwest Territories — and Senator Patterson can attest to that in Nunavut — has become pretty good for people in the North.
In the South on First Nations, it seems that it's such a big problem. What can we do? How can our Senate committee make a difference in attempting to ameliorate the problem? I've always said that in politics you never get anything done by speaking softly or writing nice letters. You have to bang the table. You have to be really determined.
As a Senate committee, we're being paid to try to do something useful for the people of our country. What can we do that will get the attention of the government to do something really substantial? That's what we have to deal with. As the Auditor General said, investment in housing has not kept pace with demand. The mould was identified in 2003. In 2011, they report that progress is not satisfactory. Three departments are dealing with it; and number 9 here shows five points that need to be done. Then the Auditor General talks about the structural changes and impediments that exist in the way of forging ahead and dealing with housing.
What can we do? The answer seems to be to really identify. We've heard from a lot of witnesses and invariably it is the responsibility of Aboriginal Affairs. They're primarily responsible for providing houses. We need to identify the problem and make a real strong report to the government so they do something.
Does anybody care? Does anybody in government care about the problems? I get the feeling when you deal with Aboriginal Affairs that their lifeline is 20 years. If you say something today, it will take 20 years to happen. That's the timeline. People are comfortable. Nobody gives a shit; nobody cares.
You have offices full of government people, and what do they do? Does anybody care? Does it matter to them? We need to do something revolutionary and remarkable in order to get the attention of government, the Prime Minister and the minister and see whether something can be done. I think that's within the realm of possibility. That's what I like to think we could do.
My life is the politics of efficacy. The politics of senators is nothing. You talk and nothing happens, particularly if you're in the opposition. If I make a motion, you guys can outnumber me because you're worried about offending the government. There's that element.
We need to work cooperatively to see what we can do. We need to take the advice of the Auditor General and their reports and do something substantial. Give it to the Prime Minister and the minister and ask for an accounting. Ask them to do something real and have them report back in a year, two years or three years. That's the only way that I think we'll be able to make an impression or somehow or another earn the money that we make. Otherwise, it's just talk and nothing comes of it — it's meaningless.
I urge our committee to do something substantial and make a really good report with recommendations that are very clear and strong, with the hope that something real can happen about housing on First Nations in our country.
That's my feeling. I come from the North, and I've just been in some communities, where life is good. In coming back to Ottawa, I ask: What am I doing here? Can I do something that will result in something positive for people?
There comes a time when you go through the exercise and nothing happens. You say, ``I'm just wasting my time; I could have a better life living in the North.'' I sometimes think that.
So I urge all members here to take this matter seriously and do something drastic, revolutionary and very strong so that something real can happen. We can't be nice anymore. We have to be strong and determined and earn our pay.
The Chair: Thank you for the reflection. The Auditor General put it more diplomatically, but it's a frustrating file to work on. You expressed it well, Senator Sibbeston.
Senator Watt: Thank you for your presentation.
This issue keeps coming back over the years since I've been in the Senate. There's nothing really new to me in what I'm hearing — the predicament of the communities on reserves. I have been involved with those First Nations and the Inuit over a number of years, even before I came to the Senate. We dealt with housing issues in the North from the northern perspective. We had to quickly realize at the time when we were dealing with housing issues that the Department of Indian Affairs, per se, as an agent of the government, had no expertise with regard to housing and construction. For that reason, we had to come up with a solution, or what we thought was the best solution at the time, even though the question of jurisdiction was problematic — whether you ride on the question of jurisdiction, which has been off and on by First Nations, the Inuit and the media; and whether we should take that seriously and take it into consideration for future negotiations and get the provincial government involved in the deliberations with the Inuit.
I believe that concept can be put in place absent any provincial jurisdiction. From time to time I also hear that First Nations don't want anything to do with the provincial level of jurisdiction. They would rather remain under federal jurisdiction, even though they are not specialized in the fields of health, education, housing and municipal services.
In a sense, I believe that Aboriginal people have created some problems ourselves. We came to realize that leading up to 1975. When there was an opportunity to try to harness what is new to us and the problems we have always faced, we made sure that we included every aspect we had dealt with in our lives and tried to put it under a so-called treaty, put it under the umbrella of that treaty, so that the question of a jurisdictional matter will never be raised again. You can sit down with the two levels of government, which have their own jurisdictions, federal and provincial. You can actually get them to sit down together and negotiate it out. I do feel we are at that stage right now because we have not seen a solution, even though, a number of times, we said that we will eventually find a solution. I don't think we will find a solution if we keep the provincial governments out of the picture because of the developmental needs of the communities.
If the First Nations are still hung up on the fact that they don't want to go under the provincial jurisdiction in certain areas, they can always build in the safeguard through negotiations. Medicine, education, housing and the services they normally receive from the Government of Canada have to be on the table. Everything has to be put on the table to be able to rectify the problems we have been facing over a number of years.
I have a question surrounding that issue for the Auditor General. Have you put any thought into what I'm talking about in your deliberation? I felt, when you were making your presentation, that I understood your presentation but that it was a very clever — if I'm using the word properly — very soft approach that you have taken, knowing that the First Nations never want to go under the provincial jurisdiction. You didn't address that, but you addressed it in another form. I wonder if you could respond, if I make any sense at all.
The Chair: I think that might have been what Mr. Berthelette was referring to when he said that off-reserve have a whole network of supports.
Senator Watt: Yes. Sometimes, Mr. Chair, when we talk, we talk around and dance around the issues, not the really tackling the issues. That's what I'm trying to bring to the table here, so we can be more focused.
Mr. Ferguson: Just a couple of comments, and then I'll turn it over to Mr. Berthelette as well. My comments may go all over the place as well.
Before I took this job, I was Deputy Minister of Finance for the Province of New Brunswick. I can tell you that there's frustration on the part of people within provincial governments trying to understand their role in terms of what the federal government does on this file, what the First Nations do, what the provinces do. I don't know to what extent the committee has spent time trying to understand the concerns and frustrations of the provinces in that as well.
You talk about bringing the provinces in as part of the negotiations, but there was also some conversation about this committee. Again, I don't know if you spent some time trying to understand the issues from the perspective of the provincial governments, but if you haven't spent a lot of time on that, that might be something worth doing.
We are obviously known as the Office of the Auditor General of Canada, but we also have a role as the Auditor General for each of the three northern territories. We do at least one performance audit in each of the three northern territories, so we will look at an issue. For example, we did one recently on education in Nunavut. We look at that issue. We prepare a performance audit, and we report that to the legislature in Nunavut.
In that type of case, it's not nearly as frustrating trying to deal with these issues because we're looking at an issue and it's in a particular area. We know who's responsible for it; we know who to report it to; we know what they're supposed to be doing. It's no different really than a reporting a performance audit to the House of Commons Public Accounts Committee. It's no different to my role when I was Auditor General in New Brunswick. We reported to the legislature; you knew who you were reporting to. They're dealing with housing, education and all of those same issues, but it's very clear who has that responsibility.
Maybe I'll turn it over to Mr. Berthelette from there.
Mr. Berthelette: Mr. Chair, I would strongly support the Auditor General's submission to the committee that you may want to consider speaking to some provincial people because therein lies a considerable amount of expertise in the area of housing and infrastructure and those issues that the committee is studying at the moment.
I would also say that they can be an important part of the solution without imposing provincial jurisdiction on the First Nations. If the First Nations need advice in terms of education, housing or whatever service is being discussed or under consideration by a First Nation, there is expertise within the province that can help them.
If I can make a comment on Senator Sibbeston's intervention, I think this committee can play a very important role. Let me start with this: I would never underestimate the ability of the Senate to influence public policy. The fact that you are holding these hearings has already brought to the public's attention issues around housing. There are people who follow the committee's work, read the blues, read the evidence that is presented, consider the debate that you undertake and are particularly interested in the reports that you present because you can present a non-political, non- partisan overview of the situation that can be of help, not only to the government but also to the First Nations.
I think both parties would benefit from having another non-partisan point of view. The Auditor General presents a non-partisan point of view. You could present a non-partisan point of view. To the extent that the points of view converge, it may be persuasive in terms of making change.
I would strongly support you continuing your work in this particular area, and I would strongly support you presenting a report on this particular area and involving, as you have, the First Nations and also the provincial reps because you are uniquely positioned to bring the parties together through your report and your work.
Senator Watt: Understood. It is always better to try to deal with things when everybody else is very familiar with how they work. When you don't have an idea of how it works, it's very hard, and it takes time, energy and money. We don't have the resources, the right kind of people in the department or the money that is needed on a regular basis.
I wanted to make one point clear here because I don't want you to misunderstand what I'm saying. We did find a solution, but there was always a problem. You would find a solution, and there was always another problem that arose. As Inuit, we came up with a formula with CMHC, involving the provincial government. We have to negotiate with them every now and then in terms of requirements. Requirements become an issue every five years, for example. You have to set up a table and deal with those things. Even if you have that, there's still a problem. The big problem I see is on the reserve because I think there is a lack of understanding and of communication between the leaders of the First Nations and the Government of Canada and probably also the provinces.
How can we be effective as senators? I'm an independent senator, so I would like to use that as a way to try to advance and create interest amongst all parties, to get them together in one room, set up a table. Even if you have to put a sunset clause in it and say, ``You have so much time to start and I want you to finish this.''
We've been dealing with this housing problem. I have been here for 30 years, but that's all I've been hearing. I would like to be able to leave before 30 years and say that at least I put a little input into this ongoing problem that we've been facing for a number of years.
Senator Moore: Related to the building code, in this report it says in 2006, after you looked at certain regions, you found that the department and CMHC indicated that national building codes were being met, but we heard evidence to the contrary from people on the ground. If CMHC is showing building code compliance is outside of its mandate, how would it know? Why would it be looking?
If you haven't, I suggest it would be good if you could take another look at building code compliance, and if you have an update, you could provide it to our clerk.
If it's not something you're looking at, why not? Do you think you might want to, because it seems to be at the root of — some of the evidence we heard here was so awful in terms of sometimes they do one building inspection, not the required three or four. The contractor hires the inspector. There is no semblance of true responsibility as is known in the construction industry nationally.
I mean, even if we could get a handle on that. We have to start picking off some of these issues and get some standards that are adhered to by everyone.
Mr. Ferguson: We'll certainly take your comments under consideration.
I will ask Mr. Barrett whether there is anything he wants to say in terms of the building code issue as we found it in the audit that we did previously.
Mr. Barrett: In the 2006 audit, as I recall, we did take a sample of inspection reports and saw some of them were being met. That's not to say they are being met everywhere comprehensively, that there are regular inspections. It is not that there is no information available, but it wasn't comprehensive.
Senator Tannas: I'm always inspired by Senator Sibbeston. He mentioned trying to find a bold solution.
We had a chap, clearly a First Nations leader but who is also the chair of the First Nations Financial Management Board. This fellow and his organization are there, first of all, to vet First Nations that may be far enough along to borrow money and to borrow money in the capital markets. To date they have certified about 35 First Nations out of 617. This is kind of the elite 5 per cent of First Nations in our country that have good governance, clean and spotless audits, and a number of benchmarks for excellence. That group is now in a position where they are going to start doing some pooled borrowing in the capital markets. They have obtained tentative ratings from some of the rating agencies, and they are moving along a track towards being able to borrow money for themselves.
Surpluses are another thing. I mean just good financial management where they are running surpluses. Some of them have significant own-source revenue, but some of them have less and are actually making it work, but they are credible.
The suggestion that this fellow came up with was if the government can't see their way clear on housing — and it was interesting, because he also said that in that elite group, they still have housing problems, housing shortages. His suggestion was that that group could be an excellent test group through a funding agreement that we could provide that said, ``We agree to elevate your capital budget by X amount over the next 30 years,'' and because the capital markets are sufficiently confident in this group, they could take that as a surplus that they don't currently have, and they would lend against it. For example, $100 million a year over 30 years could be monetized at today's rate. They could take $2.5 billion, or whatever the math works out to be on a discount basis back to today, and it becomes a big number that they could apply to the housing situation today.
I think that's an interesting idea. I'm little bit nervous about it, but with a group of entities that have done so well and are so clear on how they are managing things, we've got to listen to it. These are the best-run outfits.
My question is, and it's a little bit of accounting advice that I would be looking for: How would that get treated vis- à-vis a government today that makes a 30-year commitment? Would that have to get booked? I'm a businessman, so I know my auditors would say, ``I'm sorry, you have to book that all today, and you can't spin that out.'' It's a liability today, and in government accounting, I think it has to be booked today, but I would be interested to know is that a solution, if we got excited about it, that might get shot down somewhere because of accounting treatments?
Mr. Ferguson: Never underestimate the ability of accountants to shoot down wonderful schemes.
Before you asked the question, it was going through my head that you're getting pretty close to a liability on the part of the government.
The trouble with these things is you can always arrange them such that it's not a liability on the part of the government, but as soon as you do that, you're probably adding more risk on the side of whether it's actually going to be received or not. So with the lending organization, the more risk there is, the higher the rate of interest they will charge. That's always the problem with these types of things: On the one side, to get the best borrowing rate, you want to minimize the risk; on the other side, to ensure you don't have a liability, you want to maximize the risk. Trying to find the sweet spot between those two that results in one being able to say, ``Yes, I'm going to get this,'' and the other being able to say, ``No, I don't owe it,'' always creates interesting issues for us as auditors of a set of financial statements. So it is something we'd have to be very careful with.
Senator Tannas: We've seen it before; farm credit comes to mind. There is a little premium on their paper because there is an implied, but not a real, guarantee from the government behind that. Is that right? There are a number of similar situations that we currently have; is that fair?
Mr. Ferguson: I can't speak to any specific situation, but certainly, yes, I know there are instances where, even though a government — whatever government is the funding source — the lenders perceive there to be risk on the part of the recipients. I can't speak specifically to farm credit or anything else, but those types of situations definitely exist.
One other comment you made early on in your question was the fact that even in the well-managed First Nations, there are still housing shortages. We're all also very aware that even provinces struggle with housing. We can always hope we can make these issues go away, but to be realistic, it's not like we're going to make housing issues go away. But the goal would at least be to try to make the issue not worse on the First Nations than it is in the provinces.
Senator Tannas: Good point.
The Chair: There is a legislative base for the First Nations Financial Management Board. That's one of the impediments that the Auditor General addressed, so we are looking at that as a vehicle.
Senator Beyak: Thank you very much, gentlemen, for your presentation. You have answered a question for me. Over these last two months, the inconsistencies are glaring. It doesn't matter which witness comes. Some praise some First Nations that are doing well; some tell us about corruption, fraud, waste and duplication. We have never been able to figure out why the inconsistencies exist across Canada, from province to province and from territory to territory.
Finally, your structural impediments have helped to explain to me why this is happening, but I still don't know the solutions. There is revenue from so many sources: the feds, the provinces and casinos. There doesn't seem to be a shortage of money coming in, but it doesn't seem to go where it is needed.
I've lived in the North now for many decades. We have 52 First Nations reserves north of me. The housing has been abysmal in some of the reserves all the time I have lived there, and others are just beautiful. I don't understand it. I know it is band councils part of the time. There never seems to be a shortage; it's always quantity and quality. There is lots of quantity, but we're not getting any quality. The money pours in, but it never seems to make life any better after all these decades.
As auditors and having seen so much of that, do you have any solutions we could focus on? It's like a household budget. You have so much coming in and so much going out. I know how much I have coming in, how much is going out and how much is left at the end.
This seems like such a huge problem. I do not know where to start. There is so much coming in and so much going out, but it never gets any better.
Mr. Ferguson: My comments are more again from my past in New Brunswick. It's important to remember that there are 600-odd First Nations across the country. In New Brunswick, there certainly are some First Nations that are able to generate their own revenues through various sources and others that are not.
When you look at it across the whole system, you might be able to say — and I don't know — there is this amount of money going in, so you would think you could get this amount of something coming out for that money. But a lot of the reality is that when you divide it up or look at it by individual First Nation, the realities of each First Nation are quite disparate between the ones able to generate a lot of revenue and the ones that are not.
I will ask Mr. Berthelette to pick up on that.
Mr. Berthelette: I absolutely support the Auditor General's comments. I would note that many First Nations communities have a population of 500 people or less. When you have a population of 500 people, you have about 200 adults, so there are some capacity issues within communities. As a result, when you go back to our structural impediments, the lack of organizations to support service delivery becomes crucial when there is a lack of capacity for these very small communities.
In addition, I would say that there isn't going to be one solution to resolve the issue of housing and infrastructure on reserves. Senator Tannas has mentioned that my friend Mr. Harold Calla was here. His board is one of a number of institutions that the federal government has supported through legislation and funding that are there to provide this support to First Nations so they can achieve their particular goals. They're able to bring together a number of First Nations and take advantage of the efficiencies that come with bringing together First Nations.
One of the solutions could be this notion of pooling the resources and using those pooled resources to fund some communities. It may not work in some communities, and we'll need to find other solutions for those particular communities. That gets a little complicated for them when, as the Auditor General mentioned, you have a pot of money for capital and it has to be divided up among 600 communities very quickly. Some witnesses may have told you, but by the time you get to a community of 400 or 500 people, they might be able to build one house with the money that actually makes its way to the community. In that situation, we may need to look at some other solutions for them, especially if they are isolated and don't have a strong local economy.
I have a great deal of time for Mr. Howard Calla and his organization. If there was something this committee could do to put that forward in your report as a potential solution, along with some others, that would go a long way to develop traction in this area and help Harold and his organization make some progress.
Senator Raine: Could you comment on the value of private property ownership on reserves and its future, not just ownership in terms of the land itself but maybe through leasing and lending to mobile home owners, homes that could be moved if they wanted to? Would it be possible, through any of the programs that we have, to lend to people for mobile homes?
Mr. Berthelette: The whole issue of private property on reserves is a very complicated issue and it's probably one that I will stay away from, as such, a discussion about private property. I will leave that to the committee to talk to the First Nations about.
I will point out that there is at least one, maybe two, private-property-equivalent examples that exist on reserve. One is the certificate of possession, which is as close as you can get to a fee simple in some communities. As the honourable senator mentioned, the other is long-term leasing.
So there are some equivalents to private property, and those could be another solution to help deal with the situation with respect to housing on reserves. We would add it to what Harold Calla's group would do — private property equivalents and the supports for those, section 95 and CMHC. We could end up with a menu of solutions whereby a First Nation looking at the menu would be able to draw it down to those that best suit their situation.
I would encourage the committee to look at a number of different solutions for this particular issue.
Senator Raine: Would there be any programs now that would provide housing subsidies or funding for the purchase of a mobile home by an individual?
Mr. Berthelette: I'm not sure about the particular mobile home, but I know that the Department of Aboriginal Affairs does have a ministerial guarantee program that can be used by individuals in a community, and is supported by the band, that allows them to actually, using their funds, purchase housing. That's another solution, and it's another example that the committee may want to pursue a little more closely.
The Chair: That has been very helpful. Thank you, Mr. Berthelette.
Senator Wallace: An issue that obviously ties in directly with this housing problem or challenge is the provision of potable water and waste water systems. I'm wondering, Mr. Ferguson, in your audit work, if you have had an opportunity to look specifically at those issues as they would relate to the on-reserve issues. If you have looked at that, did you come to any conclusions as to what progress, if any, is being made in addressing those issues?
Mr. Ferguson: Yes, we have in the past looked at some of those issues. I will ask Mr. Barrett to speak specifically to what we found.
Mr. Barrett: We looked at it in 2005. We have a follow up in this report itself.
There are a couple of important points going back to those structural impediments. When we looked at it previously, we were saying there was no legislative base for who is responsible for making sure water quality is right. When we did our follow up in 2011, we ended up saying ``satisfactory progress'' at the time with respect to the legislation being passed, a legislative base for water quality. At the time, there was no law passed with a legislative base for water quality, but we were saying the work had been done in 2010. So we were able to say from a bureaucracy perspective, if I can put it that way, they had done everything they could to move the bill forward. Of course, what we saw more recently, this past June, is that it has now been passed into law. There is an example where, incrementally, things could happen. We haven't gone into what's in the new law, but the point is they are starting to create a legislative base there. Of course there are other areas where the ``satisfactory'' was less positive.
Senator Wallace: From the audit work you did in identifying that as an issue, the infrastructure for potable water and waste water systems, is that a significant issue or significant problem on reserves?
Mr. Barrett: Yes is the short answer, in terms of the monitoring that was going on and the inspections that were being done. There was another significant area where most Canadians, a lot of Canadians, will take their water quality for granted, and on a large number of First Nations we were seeing substandard water quality.
Senator Wallace: If those two issues — the handling of waste water and potable water systems — have not been addressed, it becomes difficult. How do you deal with the housing issue when you haven't got the basic needs for the house in a suitable fashion?
Mr. Barrett: It's another issue.
The Chair: I would note that we now have a legislative base for water, and this committee approved that bill, although it's in its infancy as far as implementation is concerned.
Senator Watt: Other than what I have already said, I don't really have that much to add, other than to suggest something this committee should possibly look at. In terms of reserve locations, their distances are not all the same. Some are in isolated communities. Some are close enough to what you might call a civilized city and have access to roads. If a proper inventory could be done in conjunction with the work that we're doing as a committee, we might be able to identify reserve communities that are close enough to access hardware rather than taking imported materials from a distance to their reserve. If we do a proper inventory, we might be able to find that local material exists that could be used. Two things are lacking. One is the hardware, and the other is the money to purchase the hardware. This is another way of trying to help the committee come up with possible solutions so the community can help itself, to start thinking along the line of it becoming a little more independent from the government.
I wonder whether the Auditor General and his people would support something along that line, this movement toward helping yourself. I think it's very heavily needed.
Mr. Ferguson: As I said earlier, this is a complex area given the types of challenges that some of these First Nations face, whether it's the fact that it's 500 people or they're isolated or have no access to roads. There are many challenges that face some of these First Nations. Quite frankly, obviously, those challenges just add to the difficulty in trying to find solutions.
I will ask Mr. Berthelette to add to that.
Mr. Berthelette: Again, Mr. Chair, I would say that this is another solution that's on the menu of solutions. I remember visiting a community in Saskatchewan, and I can't remember the name of the community but I was there on another audit. As we were going through the community, you could see that there were what they called the Indian Affairs houses, but there were also these log houses. The community had gone into the forest, cut down the trees and built these houses themselves. You could see the pride that was in those houses, and you could see they were well built, that they had been there for quite a while and that they were in excellent shape. Using local materials is a solution. The thing I remember, though, was the chief telling me that they were unable to continue to do that because there was something about, and I do not know which department, a funding requirement that didn't allow them to continue to build log homes.
As you're doing your work in this area, you may want to explore with the First Nations what impediments within the funding programs that are currently available stop them from being able to use local materials. What prevents them from doing a good job in terms of providing the homes they are looking for?
Senator Watt: I think that's very good information.
The Chair: That leads me to a practical question for us. Your office visited selected First Nations reserves in your June 2011 report to obtain their perspectives, just as you discussed now. This is for the benefit of our committee, because we will want to do some travelling as well. Could you explain how you selected First Nation communities that you visited and how you went about that?
Mr. Ferguson: I will ask Mr. Berthelette to give you the details, but you referred to this report. In our most recent report, we also reported on emergency management on reserves, and we visited reserves there. We're doing one now on policing on reserves, and we're visiting another series of reserves there. I'll ask Mr. Berthelette to talk a little bit about how we decide which First Nations to visit.
Mr. Berthelette: Mr. Chair, we came to that decision through a variety of means. Once we determine what we're going to audit, we use our own knowledge. I have visited quite a few communities in my years with the Auditor General's Office and during my years with the First Nations Inuit Health Branch, so I have a sense of what's going on in the communities. Because I'm in Ottawa, I'm not always up to date and so we talk to the folks who work at the AFN — the bureaucracy — and ask them for advice about which communities are good examples to see with respect to an audit.
We talk with the provincial-territorial associations, the Assembly of Manitoba Chiefs, the Federation of Saskatchewan Indian Nations and the B.C. association to get their perspective on communities that they think could be useful to us.
We also talk to folks like Harold Calla and other individuals who have in-depth knowledge of what is going on in the communities. From these different sources, we identify the communities we're going to visit.
I would also add — and I don't want to leave them out — officials at both Aboriginal Affairs and Health Canada. They also have a pretty good understanding of what's going on in the communities, and their perspective is always helpful.
The Chair: That's helpful to us. Thank you.
Senator Ngo: We have listened to different panels give us very different views on the housing shortage. We know that AANDC provides around $1 billion per year in funding for infrastructure of all types for First Nations. According to the witnesses, there's always a shortage of about $3 billion to $5 billion and they cannot keep up. Who is responsible for ensuring that the funding is going where it's needed so that the infrastructure needs of First Nations communities are met?
Mr. Berthelette: Mr. Chair, the responsibilities are generally set out in the grants and contributions agreements. They will state the amount of money that will be provided to a community and how the funding should be allocated according to the agreement.
Have I answered your question, senator?
Senator Ngo: Is the person who receives the funding responsible, or is the AANDC responsible for ensuring that the funding goes where it's needed?
Mr. Berthelette: The AANDC is responsible for ensuring that the programs and services that they are mandated to support are divided up, if I can put it that way, into the contribution agreements to the various First Nations. They're also responsible for ensuring that the contribution agreements are clear about where the funding is going and how it can be used. They're responsible for receiving a report back from the First Nation in terms of how that funding was used and, ultimately, reporting back to government and Parliament on the use of that funding.
Senator Raine: Your office has noted that using contribution agreements to fund program delivery to First Nations is problematic for several reasons, one being that the agreements often need to be renewed on an annual basis. If you're planning for infrastructure, that makes planning very difficult. Because funding from the previous year must be reviewed before a new agreement can be approved, there are often gaps in funding for several months.
I understand why we have to have funding agreements, but in terms of infrastructure and planning for the growth of a community, when the community is trying to make a plan and decide where they're going to build the housing and do it in a logical way, having to wait for the annual grants can't possibly work. Do these challenges apply to housing? I know they apply to other types of services.
Mr. Berthelette: Mr. Chair, we have commented on the use of grants and contributions, and the honourable senator has noted what we have said about them. It can be problematic, and I'm sure there are situations in which this impacts housing on reserves.
Aboriginal Affairs has been taking steps to address that particular issue by signing five-year agreements with First Nations and, through that process, giving the First Nation more say about how the money will be spent. Over five years, they will have a certain annual payment to the community, and the community will be able to determine its priorities and budget the money accordingly.
There have been some moves in terms of trying to address that, but the grant and contribution system works well in a situation where the government wants to make a contribution to an organization that's trying to do something, and the government is one contributor of a number of contributors, including the organization. I'm not sure it works as well in a government-to-government relationship. As you are examining this issue, you may want to pursue whether there might be other options available to Aboriginal Affairs or other options that can be used to deal with the funding issue to have more of a government-to-government approach. I'm not sure that it will be ``the'' solution, but it could be one of the solutions that could be made available.
Senator Raine: Are there any examples that you could give us of similar situations? I guess in some of the federal- provincial transfers you have certain kinds of long-term arrangements as well. This is probably where the First Nations Financial Management Board could play a role. Then you would know they have earned the right to long-term committed funds. Would that be a solution?
Mr. Berthelette: Absolutely. I think Harold Calla and his group could be helpful in providing some assurance that a long-term agreement would be in the best interest of the community.
In addition to the federal-provincial transfers, there are provincial-municipal supports. There are provincial school board supports. There's also the treaty situation in which, according to the treaty, certain monies are provided to the treaty First Nation.
There are a number of examples of ways in which this could be accomplished.
Senator Raine: Obviously, going forward there are also resource revenue-sharing opportunities. Will these streams of revenue potentially coming to First Nations allow them to expand their opportunity to borrow and get caught up on the housing shortfall?
Mr. Berthelette: Mr. Chair, I think the revenue-sharing agreements that are being put in place have been of tremendous assistance to the communities and have provided them with a private source of funding that they can use without the limits that come with governmental funding. While I have very limited information about those particular situations, what I have seen in those communities that have them is that they have put them to a number of different uses. I would not be surprised if they have also put them to addressing their housing and infrastructure issues.
Senator Moore: Mr. Berthelette, you may be the one to answer this, and it follows along the question of the chair. You mentioned how you selected the First Nations communities that you visited. Is there a list of them in the 2011 report? If there is, did you make numbers of the needs in the various communities in terms of housing — what you found in terms of how many, what was needed, how many needed a lot of work, how many needed a bit of work? Would it be useful for us to visit the same reserves and do some type of comparative look so that we would have some benchmarks, at least on the basis of those communities, from which to form recommendations or the basis for a solid report from our own experience, building on what you might have found in your investigations and visits?
Mr. Barrett: I'll take a stab at answering the senator's question.
We don't normally publish a list of which First Nations we visit with each of our audits. We do try to get out and see a range, and on an audit like this, there would be a different range.
As Mr. Berthelette has suggested, I too have had the opportunity to visit dozens of First Nations through the various audits that we've done. Personally, I would suggest it's more valuable to first ask, ``What are we trying to find out?'' For example, the answer may be, ``What's the range of housing?''
I can tell you that a couple of years ago we visited — not specific to this audit — some of the communities in northern Ontario. We were looking for several different things. We were looking at their houses, and some of families invited us into their houses to take a look at what was in the houses. Quite honestly, it was heartbreaking. It was very sad. Beautiful people, very nice families, but you're literally looking through holes in the floor at dirt underneath and wires sticking out. You would say it was a fire hazard by any stretch of the imagination.
The point is that, if housing is what's interesting, I would take another example, a First Nation in the North Vancouver area, where they have beautiful housing and rent it out to the community and to the public and it's a source of revenue. Their First Nation has a very well-run administration and very good housing. To get an understanding of the housing situation in First Nations, talking to the various organizations that Mr. Berthelette alluded to and making sure one gets the ``word pictures'' of these different types of scenarios really informs decision makers like you in terms of saying, ``This is the scenario before us.'' I think that would be very valuable.
Senator Moore: Did you visit some of the most remote communities, as well as, say, Squamish, where Mr. Calla is from, which is apparently very well run? Did you visit the whole range, Mr. Barrett?
Mr. Barrett: We did over the course of time. What I was referring to in northern Ontario were all fly-in communities, very remote. Of course, to build a house in that environment, getting the materials there is a daunting task.
Senator Beyak: Thank you very much, Mr. Barrett. That kind of addressed the frustration that I feel living up there and seeing the huge discrepancies between some of the communities. It's very enlightening of you to speak of that.
Do you have any solution for it? I agree with you that the committee could go out, look at all the areas across the country, try to find out what bands are doing well and what bands are not doing well, and see if we can somehow find a standard that we can recommend for the whole country. I don't know if that's simplistic, but there has to be a better way. I talk to the women and the kids, and they see TV. They see the malls. They just want to get their nails done and their hair done and live in the real world. They don't want to live 60 miles north of the tree line with bad water and nothing to do but sniff gasoline. There has to be a better way with all the money that we have at our fingertips to make things better. I just don't know how. Thanks for addressing the frustration.
The Chair: I think you've described the challenge to us very well, senator.
If there are no more questions, before we adjourn, I'd like to take the chair's prerogative. I've been thinking about the impediment that you identified — the lack of a legislative base. I know that's all about the lack of clarity that you've described in this area. I've been reflecting. We recommended a legislative base on education because there are provisions in the Indian Act on education, and we felt that there was not a clear accountability. However, with respect to housing, I don't think there's a word in the Indian Act about housing. You've actually stated, if I understood you correctly, that the federal government, the Department of Aboriginal Affairs, did not acknowledge — and please correct me if I've misstating this — their responsibility for housing. They are paying significant monies towards housing and there are programs, but I believe you said that they didn't acknowledge they had a responsibility for housing.
Do I have that right? Perhaps I don't. Did I misstate your comment, sir?
Mr. Barrett: Only very slightly. I would just go back to the words that we have in the report, where we say:
The federal government takes the view that it does not provide housing support on reserves as a result of legislative or treaty obligations.
It's not saying we don't have any responsibilities, and it's certainly not saying we don't provide any funding. It's saying there's no legal obligation to do so, and there's nothing written in a treaty that would require us to do so.
The Chair: This is what leads to your pointing out the lack of legislation as an impediment.
Mr. Barrett: Exactly.
I would make one more point related to another section of this report, when we speak of child and family services. That's another whole area where we've pointed out lack of legislation causing lots of problems. Comments have been made that provinces are in this business, and the federal government by and large isn't. The expertise is there. We weren't saying in the report that everything was working great there, but we did note that in several provinces the federal government entered into these tripartite agreements. They're still in the game working with First Nations. You have First Nations working with the government, working with the provinces, meeting provincial standards, with services delivered by provinces. Of course, a lot of the costs for the federal government went up because now they had to meet provincial standards.
Mr. Berthelette spoke of different tools in the toolbox, and I'd say don't ignore this tool in the toolbox as well.
The Chair: I'm confident I speak for the committee in saying that your contributions and responses to our questions are indeed very helpful to us in this challenging work we've undertaken. On behalf of the committee, I would like to thank you all for being here tonight. Thank you very much.
(The committee adjourned.)