Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 9 - Evidence - November 5, 2014
OTTAWA, Wednesday, November 5, 2014
The Standing Senate Committee on Aboriginal Peoples met this day at 7:50 p.m. to continue its study on challenges relating to First Nations infrastructure on reserves.
[Translation]
Mary Zlotnick, Clerk of the Committee: Honourable senators, I see we have quorum. As clerk of the committee, it is my duty to inform you that the chair and deputy chair could not be here today for reasons that could not be helped, and I must preside over the election of an acting chair.
[English]
I am ready to receive a motion for acting chair.
Senator Raine: I would like to move that Senator Tannas be named acting chair.
Ms. Zlotnick: Thank you, Senator Raine. Are there any other nominations? Seeing none, I will put the question. It is moved by the Honourable Senator Raine that the Honourable Senator Tannas do take the chair of this committee. Is it your pleasure, honourable senators, to adopt the motion?
Hon. Senators: Agreed.
Ms. Zlotnick: I declare the motion carried, and I invite Senator Tannas to take the chair.
Senator Scott Tannas (Acting Chair) in the chair.
The Acting Chair: Thank you, clerk and colleagues. 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 the room or via CPAC or the Web.
I am Scott Tannas from Alberta, and I'm pleased to chair this meeting on behalf of Senators Patterson and Dyck this evening.
The mandate of this committee is to examine legislation and matters relating to the Aboriginal peoples of Canada generally. This evening we are hearing testimony on a specific order of reference authorizing us to examine and report on the challenges and potential solutions relating to infrastructure on reserves, including housing, community infrastructure and innovative opportunities for financing and more effective collaborative strategies.
Today we will hear our first briefing by government departments on part two of our study, dealing with community infrastructure. We have with us tonight representatives of Aboriginal Affairs and Northern Development, PPP Canada and Health Canada.
Before proceeding to the testimony, I would like to go around the table and ask the members of the committee to introduce themselves, starting to my left with Senator Moore.
Senator Moore: Thank you, chair. Wilfred Moore from Nova Scotia.
Senator Raine: Nancy Greene Raine from British Columbia.
Senator Ataullahjan: Salma Ataullahjan from Ontario.
Senator Ngo: Senator Ngo from Ontario.
Senator Wallace: John Wallace from New Brunswick.
Senator Beyak: Lynn Beyak from Ontario.
Senator Enverga: Tobias Enverga from Ontario.
The Acting Chair: Members of the committee, please help me in welcoming our witnesses from Aboriginal Affairs and Northern Development Canada: Daniel Leclair, Director General, Community Infrastructure Branch; Karl Carisse, Senior Director, Strategic Policy, Planning and Innovation; David Smith, Senior Director, Program Design and Partnerships; and Allan Clarke, Director General, Policy and Coordination Branch. Joining them at the table, we have Greg Smith, Vice President of Finance, Risk, Administration and CFO, PPP Canada; and Sony Perron, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch, Health Canada.
Welcome. The floor is yours. We'll follow with questions from senators. I understand that Mr. Leclair will begin.
Daniel Leclair, Director General, Community Infrastructure Branch, Aboriginal Affairs and Northern Development Canada: Chair and honourable senators, thank you for the opportunity to address the committee and speak today on the topic of First Nation community infrastructure.
Aboriginal Affairs and Northern Development Canada works with First Nation communities to establish and maintain infrastructure on reserves. These activities are fundamental to the functioning of First Nation communities and work to strengthen the health and safety of these communities. Additionally, investments in infrastructure on- reserve also support First Nations in their desire to undertake economic development activities and to more fully participate in the economy. As is clearly stated by almost every major piece of municipal legislation in Canada, safe, healthy, viable communities are fundamental to economic development.
First Nations own the infrastructure that is on reserves. As owners, they are also responsible for the maintenance and operation of these facilities. Aboriginal Affairs and Northern Development Canada works with First Nation communities to provide financial support and advisory assistance 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.
[Translation]
Our common goal with First Nations people is for on-reserve community infrastructure to be well-planned, effectively managed and comparable to what is enjoyed by Canadians living off-reserve. The Government of Canada provides funding for community infrastructure on-reserve to First Nations as a matter of social policy. Aboriginal Affairs and Northern Development Canada administers funding to First Nations through its capital facilities and maintenance program. The budget for this program is approximately $1 billion per year. Funding is allocated for the construction and maintenance of community infrastructure to First Nations through either formula funding or proposal-based project funding or as a combination of both.
While Aboriginal Affairs and Northern Development Canada provides First Nations with up to 100 per cent funding for the construction of most community infrastructure projects, the majority of departmental funding is dedicated to the operation and maintenance of existing assets. Consequently, Aboriginal Affairs and Northern Development Canada is heavily reliant on targeted funding announced in various federal budgets to fund new infrastructure.
[English]
The department invests in four main areas, including water and waste water, education, housing and other infrastructure. Between 2006-07 and 2013-14, the department will have invested $9.2 billion for community infrastructure on-reserve.
Aboriginal Affairs and Northern Development invests approximately $332 million per year to support First Nations in delivering water and waste water services. Between 2006-07 and 2013-14, the Government of Canada will have invested approximately $3 billion in water and waste water infrastructure in First Nation communities.
Funding is not the only answer. One of the key initiatives that Aboriginal Affairs and Northern Development Canada has been working on to improve water and waste water outcomes is the Safe Drinking Water for First Nations Act. This legislation is intended to ensure that residents on First Nation lands have similar health and safety protections for drinking water as other Canadians. The act received Royal Assent on June 19, 2013, and came into force on November 1, 2013. The regulations supporting this legislation are currently under development and will be available for review and comment by First Nations.
Once these water regulations are finalized, they will be phased in over a number of years. This is to provide time for the Government of Canada 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.
With respect to schools, Aboriginal Affairs and Northern Development provides an investment of roughly $160 million annually in funding to maintain and improve on-reserve school infrastructure. In addition, the Government of Canada has worked to improve on-reserve school infrastructure through targeted investments, including the recent investments of $175 million in Budget 2012 and $500 million in Budget 2014.
Between April 1, 2008, and March 31, 2013, 372 education facilities projects, including new construction, additions, renovations and minor upgrades of existing on-reserve education facilities, were completed for a total investment of approximately $613 million.
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 and operation and maintenance and that schools remain in working condition for their full life cycle.
[Translation]
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 Northern Development Canada and through the Canada Mortgage and Housing Corporation.
Aboriginal Affairs and Northern Development Canada provides a capital allocation to First Nations, which they have the flexibility to use to meet a range of housing needs. In 2013-14, this allocation totaled $143 million. The Canada Mortgage and Housing Corporation provides annual funding that is focused on the delivery of specific housing programs, totaling approximately $157 million per year.
Aboriginal Affairs and Northern Development Canada is committed to working in partnership with First Nations and other stakeholders to address housing requirements and ensure that sustainable infrastructure is in place to support current needs and future development.
Under the capital facilities and maintenance program, the sub-program of other infrastructure includes roads and bridges, structural migration, fuel tanks, electrification, connectivity, solid waste and community facilities. Between 2008-09 and 2013-14, the average annual departmental spending to support First Nations other community infrastructure assets has been approximately $427 million.
Connectivity is a key focus within the sub-program. Aboriginal Affairs and Northern Development Canada has been actively seeking partnerships with other government departments, provinces and territories, the private sector and First Nation organizations to enable First Nation communities to be connected to the Internet at the Industry Canada standard of 1.5 megabits per second per household. This has led to seven major regional, provincial, federal and private partnership projects south of the 60th parallel.
Since 2009-10, Aboriginal Affairs and Northern Development Canada has invested approximately $45 million in connectivity infrastructure, leveraging approximately $150 million in other federal, provincial and private funding. The department is working to align federal and provincial, rural and First Nation connectivity policies, programs and future projects to maximize investment and benefits to First Nations.
In general, the cost of infrastructure has the same overall cost drivers as other programs at Aboriginal Affairs and Northern Development Canada. These cost drivers include population growth of on-reserve residents due to high birth rates and inflation.
Part of the solution to limited funding envelopes is to increase the ability of First Nations to raise their own revenues and to make the most of funding that is already available. One way to accomplish this is through the First Nations Fiscal Management Act. This federal legislation, which came into force on April 1, 2006, supports economic development and well-being in First Nation communities by enhancing First Nations property taxation, creating a First Nations bond financing regime and supporting First Nations' capacity in financial management.
There are currently 138 First Nations across Canada scheduled to the First Nations Fiscal Management Act. In June of this year, the Fiscal Management Act regime supported the issuance of a $90 million investment-grade bond, at a rate of 3.8 per cent, competitive with bonds issued by Crown corporations such as Hydro Quebec and large publicly traded companies such as Manulife and Enbridge. Fourteen First Nations from British Columbia, Manitoba, Ontario and Nova Scotia participated in the bond, securitizing their own-source revenues and will use the proceeds to support community infrastructure projects, such as housing complexes and office buildings, among other projects. With a growing awareness of and interest in the regime, we expect that the number of First Nations benefiting from the act will increase in the coming years.
In addition, through the addition to reserve process, particularly in response to legal obligations, such as treaty land entitlement, over one million acres of additional land has been added to reserves since 1992, further increasing infrastructure pressures as this land becomes available for development and community expansion.
Currently, some infrastructure on-reserve has a reduced life cycle due to lack of code compliance and insufficient maintenance. Additionally, many reserves are in remote locations with limited access, which increases costs related to shipping material and creates lengthier construction cycles.
[English]
Aboriginal Affairs and Northern Development Canada is exploring new approaches to building and maintaining infrastructure on reserves.
Some of these activities focus on ways to finance infrastructure. Aboriginal Affairs and Northern Development Canada works with First Nations to fully pay for the cost of community infrastructure during the one- to two-year construction period. Most jurisdictions, such as municipalities and provinces, spread the cost of an infrastructure asset over its useful life. It is our belief that these types of financing practices can be leveraged to help the department and First Nation communities quickly and cost-effectively address the infrastructure gap on-reserve.
Financing must be used strategically in situations that provide value for money when all costs are considered, including interest and costs to operate and maintain the asset over its full life cycle. Aboriginal Affairs and Northern Development Canada has been working to identify ways to enhance First Nation community access to institutional and private sector sources through the existing network of Aboriginal capital corporations, the First Nations Finance Authority and the First Nations Financial Management Board, as well as through the growing trend in social finance.
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.
Further, Aboriginal Affairs and Northern Development Canada is working with many partners, including the Atlantic Policy Congress of First Nations Chiefs Secretariat, on the First Nations Clean Water Initiative. This project is in the early stages of implementation and is exploring the feasibility of a public-private partnership to provide water and waste water services to 31 First Nation communities located in the Atlantic region.
This project would see the creation of a central water authority, which would assume the responsibility and liability for the provision of water and waste water services to all participating communities. The water authority would also develop the offering to the private sector to upgrade and manage all water and waste water assets over several years through a P3 arrangement. The private sector partner would be contractually bound, under the oversight of the water authority, to provide water and waste water services that meet the needs of the communities.
Although the project must overcome a variety of hurdles, including Indian Act restrictions, it is offering a significant insight to the interplay between the community development needs of communities and the legislative framework under which these communities operate.
[Translation]
Aboriginal Affairs and Northern Development Canada is working with First Nations to ensure that on-reserve community infrastructure is well planned, effectively managed and supports safe and healthy communities.
I appreciate the opportunity to speak before the committee today on this important issue, and would welcome questions from the honourable senators.
[English]
Greg Smith, Vice President of Finance, Risk, Administration and CFO, PPP Canada: Mr. Chair and honourable senators, thank you very much for inviting me to speak with you today. I'm pleased to be here on behalf of PPP Canada to answer any questions that you may have with respect to the use of public-private partnerships, or P3s, and how they can be utilized by First Nations to help meet their infrastructure needs.
[Translation]
Governments across Canada are pursuing new ways of getting the best result for their infrastructure dollars. Many have recognized the value of engaging private sector expertise.
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P3s are a long-term performance-based approach to procuring public infrastructure, where the private sector assumes a major share of the responsibility in terms of risk and financing for the delivery and the performance of the infrastructure, from design and structural planning, right through construction, to long-term maintenance. This means that governments do not pay for the asset until it is built, and a substantial portion is paid over the life of the asset only if it is properly maintained and performs according to pre-established standards.
Financing a P3 is not funding a P3. All public infrastructure is funded by the public sector through general tax revenue or user fees.
It is important to understand that P3s are not always the right solution. They are a tool in the tool box to deliver public infrastructure investment Canadians need. When applied to the right projects, they can provide many benefits, including greater value for money for taxpayers, on-budget and on-time delivery of public infrastructure, greater accountability and performance standards, greater consideration for the whole life cycle of a project, and fiscal planning certainty.
PPP Canada works closely with provinces, territories and municipalities and First Nations to ensure that, when appropriate, P3s are used to produce value for Canadian tax dollars.
We are a Crown corporation that was established by the Government of Canada in 2009 to improve the delivery of public infrastructure by achieving better value, timeliness and accountability to taxpayers through P3s. This infrastructure model has been successfully implemented throughout Canada by all levels of government.
Our focus is on building procurement knowledge and capacity among federal departments and on leveraging greater value for money from federal investments in provincial, territorial, municipal, and First Nations infrastructure through the P3 Canada Fund. It is a $1.2-billion fund, which was just renewed this year. It's a merit-based program with the objective of supporting P3 infrastructure projects that achieve value for Canadians, develop the Canadian P3 market and generate significant public benefits.
First Nation communities are eligible to receive funding under the P3 Canada Fund. Because a P3 procurement differs from a traditional procurement, we recognize that not all eligible recipients, including First Nations, may have experience with the P3 model, experience that is required to develop a project on their own.
We also recognize that Canada's private sector has, over the past 10 years, developed an in-depth knowledge and understanding of P3s. To ensure that all of our eligible recipients, including First Nations, are a strong counterparty to the private sector, we reach out to First Nations with P3 potential and advise them throughout the project's development and the procurement process.
Because Aboriginal Affairs and Northern Development Canada is primarily responsible for funding First Nation infrastructure, we work closely with them to advance First Nation infrastructure planning.
We are currently involved in two projects that are creating a direct economic benefit to First Nations.
Most recently, the government announced its support for the Kokish River Hydroelectric Project through a P3 Canada Fund preferential loan of up to $12.94 million. This low-interest loan is the first of its kind in Canada and will help the Namgis First Nation build equity in the 45-megawatt run-of-the-river hydroelectric development located within Namgis territory. The infrastructure is producing electricity for sale to BC Hydro under a 40-year electricity purchase agreement. A portion of that revenue generated each year will be redirected into a Namgis community benefit fund.
We are also involved in the Iqaluit International Airport Improvement Project, which began construction this past summer. The Government of Canada has committed an investment of $77.3 million towards this project. It is the largest public building project ever constructed in Iqaluit and a major project for the Government of Nunavut. Once it is completed in 2017, it will provide improved accessibility to Nunavut and attract private investment to the region.
Also providing economic benefit to the region is the requirement in the project agreement for the private partner to hire Nunavut Land Claims Agreement beneficiaries during both the construction and the operations phase. This will support the government of Nunavut in building an experienced, trained and accredited labour force.
Earlier this year, the terms and conditions to the P3 Canada Fund were modified. The language around First Nation communities is now broader, and it mirrors that of the New Building Canada Fund. Starting in the spring of 2015, Inuit communities will be eligible to apply for funding under our round seven.
That concludes my comments. I look forward to any questions.
The Acting Chair: Thank you, Mr. Smith.
[Translation]
Sony Perron, Senior Assistant Deputy Minister, First Nations and Inuit Health Branch, Health Canada: Mr. Chair and honourable senators, thank you for the opportunity to address this committee this evening.
[English]
The important work that this committee is undertaking focuses on the issues surrounding on-reserve infrastructure, including innovative opportunities for collaboration and financing in this regard.
With this in mind, my role here today is to discuss Health Canada programs and services and how they relate to this theme.
Through the First Nations and Inuit Health Branch, Health Canada provides or funds health programs and services to address the significant health risks faced by First Nation and Inuit communities and individuals. This work is carried out in collaboration with key partners, including provinces and territories that are the provider of insured health services to all Canadians.
Health Canada also works in partnership with First Nations and Inuit with the goal of supporting effective, sustainable, culturally appropriate health programs and services that contribute to improved health outcomes for First Nations and Inuit. Health Canada is working with other jurisdictions on innovation to modernize and transform the way health services are delivered. Health Canada is committed to achieving a fully integrated, sustainable health system for First Nation and Inuit communities that gradually adds more community level e-health services, to enable front-line health care providers to use innovative technology to improve health care delivery and outcomes.
In support of this work, Health Canada continues to invest in the development and implementation of telehealth and video conferencing technology to support medical consultations, diagnosis and treatments. This includes recent investments through Economic Action Plan 2013 to improve the quality of health services in First Nation communities by building on Budget 2008 investments for 200 telehealth and video conferencing sites to better support health care.
As a result of these investments, approximately 90 per cent of First Nation health facilities have high speed or broadband connectivity. Over 200 telehealth and video conferencing sites in First Nation and Inuit communities now offer a range of electronic health services such as tele-psychiatry and psychology.
Regarding facilities, Health Canada provides First Nations and First Nations and Inuit Health Branch staff with the space required to safely and efficiently deliver health care services in First Nation and Inuit communities. Through contribution agreements, Health Canada provides funding to eligible recipients for the construction, acquisition, lease, expansion and/or renovation of health facilities, staff residences and operational support buildings as well as the provision of security services.
Currently, Health Canada supports 734 First Nation health facilities, including nursing stations, health centres, health offices, treatment centres, staff residences and operational support buildings through capital contributions. A long-term capital plan is in place to manage existing infrastructure within available resources and to provide prioritization criteria for capital project consideration and approvals.
In addition, preventive and corrective measures are carried out to enable First Nations to improve the working conditions for health facilities staff and to maintain or restore compliance with building codes, environmental legislation and occupational health and safety standards.
Health Canada also has an environmental health role and provides advice, guidance, education, public health inspections and recommendations to First Nations and their leadership to help these communities manage public health risks associated with the environment. Its environmental health officers, EHOs, gather data required to analyze what steps can be taken to promote public health in First Nation communities.
Some EHOs are employed by Health Canada while others are employed by First Nations or tribunal councils. All the EHOs working in the First Nation communities must have a certificate in public health inspection in Canada. EHOs visit First Nations to complete inspections and investigations and provide education and training sessions. Routine activities are delivered pursuant to community work plans agreed upon by EHOs and chiefs and councils each year. Other activities are carried out and completed upon request by First Nation chiefs and councils.
While EHOs can help to identify potential public health risks in First Nation communities and provide recommendations on how to correct them, chiefs and councils are responsible for addressing the recommendations provided.
While Health Canada is not responsible for the provision of housing on reserves, the department plays a supportive role to protect public health. Health Canada carries out this role through the First Nation Environmental Public Health Program. The objective of this program is to identify and prevent public health risks that could impact the health of First Nation community residents and to recommend corrective action to reduce risks.
These are the three areas where Health Canada invests or works toward improving infrastructure in First Nations communities.
I am here and available to answer your questions if you have any. Thank you very much.
The Acting Chair: Thank you very much, Mr. Perron. That's it for presentations. We'll go to questions.
There is one question, if I may take the prerogative while we're canvassing for questions, that I'd like to ask Mr. Perron.
Are there any instances currently in Canada where the provincial health systems either have been subcontracted by Health Canada or contracted directly by the First Nations for delivery of health?
Mr. Perron: Thank you for the question. I would say the model and role of Health Canada in the provision of health services throughout the country varies depending on the region and depending on the history. I will give you a couple of examples.
When Newfoundland joined Canada, they were already providing primary care on reserve, and they do continue right now. So Health Canada provides and funds public health services in addition to the primary care services provided by the province. In some locations the primary care services are collocated with the public health and are two different jurisdictions providing the services.
In other provinces, there is no example where Health Canada or the federal government will have contracted to the province, but there is an agreement in Manitoba, for example, I think it's the 64 agreement where the territory was divided between provincial services for primary care and federally funded services. In order to deal with the geography of the territory, there was a rational way to organize the work. In Manitoba you will find different types of arrangements, and this is called the 64 agreement where the province has taken the role in some parts of the province and the federal government is supporting the services in other parts of the territory.
In the West, a year ago B.C. First Nations took on the responsibility of provision of all health services in B.C. So there was a transfer from the federal government to the First Nations Health Authority, so we don't even have an office with them anymore. We are working with them as a partner, so the partnership between the federal government and the First Nations remains. There is a variety of models, but everywhere the federal government remains active in supporting the services. But you will find in several places in the country a program from the provincial government in the same facility as programs and services funded by the federal government. I hope this is helpful.
The Acting Chair: Are you finding that there is more change to come? You mentioned significant change just in the last year. Would you be willing to speculate on whether that model will find its way elsewhere?
Mr. Perron: I think the long-term goals around First Nation and Inuit health are built around integration of services and devolution wherever possible. We are trying to support initiatives where they are available to advance this work, and integrated service is better. We don't want to create a silo. It is important that someone who needs services can go from the services they receive on-reserve and can go in the provincial system after to receive insured services and have a continuum. So there is some progress. Sometimes this is done at the regional level between the regional health authority and the First Nations Aboriginal health authority, so there are promising situations.
I think the B.C. example is one. We don't have anything in the works at this time at that level, but we are supportive of any initiative that helps to better integrate the service because it leads to better services for people.
The Acting Chair: Quite right.
Senator Raine: We recently travelled to the West Coast and visited the Ahousaht First Nation, and they were explaining they had a problem because they didn't have any health care. I think they had a small clinic, but they didn't really have any major facility in their community, and to get from there to the nearest hospital, there was a broken link. No funding was available, and they were on their own to go from their dock, because they're only accessible by water, to the dock at the other side, and then an ambulance would pick them up.
In terms of connecting from the First Nation facilities to the regional health facilities, is that a possibility of something that will fall through the cracks, or how will you deal with that linkage?
Mr. Perron: Thank you for the question. I think geography often causes a lot of difficulties, and there are a number of measures in place that try to deal with this.
First, part of the programming that we have at Health Canada is the Non-Insured Health Benefits Program that does fund medical transportation. So this doesn't remove the geographic barrier, but it does help on the financial side to organize transportation to give better access to insured health services.
Depending on the location of the community and the level of isolation, there are remote, isolated, and very isolated communities. So the level of services that is funded and available in each community depends on the geographic location. If there is road access, or no road access, it is a fly-in community. I briefly mentioned the facilities we are funding, so some communities will have a nursing station. Most of the time, a nursing station will provide 24-hour, seven-day-a-week access to a nurse for primary care services and other health services. The communities that are very isolated will have that level of support.
Communities that are in a remote location will have more services in the arena of public health — for immunization services, for example — and we will help with transportation for people to access the provincial health services when there is road access or through other means.
In the example that you point out, I don't know that community specifically, but each community is positioned differently in terms of the level of services maintained in the community, depending on their geographic location and the level of accessibility to other provincial health services. If you want, I would be pleased to look at that specific case and tell you what the classification is and the level of service we are providing in that community.
Senator Raine: I would like you to get back to us with some information on that, because these people were having a real struggle to pay for the gas for the boat to take the guy who had a badly broken leg across to the hospital, and you said the uninsured health benefits will cover ambulance. If it's not an ambulance, because it's just a boat, will they cover that?
Mr. Perron: Yes. We cover mileage, meals —
Senator Raine: If you could send me the information, that would be helpful.
Mr. Perron: Probably through the clerk we can get the exact name of the community. I do not know this, but we will do the follow-up.
Senator Raine: Ahousaht First Nation. The nice thing about being on this committee is we do get to travel to First Nations across the country. Not all of them, of course, but we went to one that was very intriguing in the Northwest Territories. When you flew in, there was a nice little town laid out. When we got there, we found that on one side of the street they were First Nation and on the other side of the street they were Metis. If they are First Nation and get sick, they are flown to Edmonton; if they are on the other side of the street, and they're basically all in the same community, they have to take the bus.
Is that something your department looks at in making sense out of a situation like that? It's a remote community.
Mr. Perron: The provision of health services north of the sixtieth parallel is fully devolved to the territorial government. We do not provide direct health services, except in health promotion services. We do fund some services at the community level. Health Canada is less active in the territories.
However, the Non-Insured Health Benefits Program that I referred to before remains available for First Nations people and Inuit people. Wherever they live in Canada, they are eligible for the medical transportation funding and the other benefits that are covered by that program. This will not apply to Metis people.
The current program is defined as a program that has eligibility of space based on First Nations status recognition or Inuit recognition.
Senator Raine: And that, of course, will be a whole other question. Thank you for your replies.
Senator Enverga: Thank you for the presentations.
About safe drinking water, we were in one of the First Nations in Maniwaki, and according to the chief, there is some uranium in the water. What's happening right now is they're delivering water by bottle. Are there any plans ongoing to make sure that they have clear water and proper infrastructure? Have you heard about this place?
Mr. Leclair: Like I mentioned in my introductory remarks, we are providing financial support to First Nations in water respectively; they are doing the testing and we are providing the training.
My colleague Mr. Smith is from the community you are referring to, and he's also responsible for the water program. I will ask him to go into more specifics.
David Smith, Senior Director, Program Design and Partnerships, Aboriginal Affairs and Northern Development Canada: Maybe specifically to Kitigan Zibi, there is a plan to address safe drinking water for that community. The community is receiving bottled water.
In the last years, there has been an investment in the urban core of the community where the department supported funding for pipe water and waste water services, and a five-year plan was put in place. They've developed this plan with our regional office in Quebec, and the plan is moving forward.
Senator Enverga: That's good. On another note, with regard to the bonds, who governs the bonds? Who do you sell them to? It's not clear enough for me. Can you explain more about how you use the bonds in the funding of infrastructure?
Allan Clarke, Director General, Policy and Coordination Branch, Aboriginal Affairs and Northern Development Canada: I work in the lands and economic development sector of the department. I think you're referring to the First Nations Fiscal Management Act.
Senator Enverga: That's right.
Mr. Clarke: One of the things we're doing in our sector is looking at some of the impediments to economic development, including that access to capital is very difficult for First Nations. Some of these issues are related to the Indian Act itself, and some people have described the Indian Act as the most successful piece of anti-business legislation ever devised, and many people would agree with that.
What we're trying to do within the sector of economic development, we're looking at models that we can get First Nations the level of jurisdiction that other communities in Canada might be expected to have. When you look at something like the First Nations Fiscal Management Act, it provides jurisdiction to First Nations to collect property tax and other local revenues. That regime is governed by the First Nations Tax Commission, who approves local revenue laws to raise this kind of taxation. In turn, it creates the financial management board, which certifies First Nations financial capacity to ensure that they have the appropriate financial administration laws and procedures.
With that, the First Nations Finance Authority can in turn accept First Nations that are collecting tax and other source revenues, and are certified by the financial management board. They can accept them into a borrowing pool and, like other municipalities in Canada, can go to the bond market to raise money based on their revenue streams.
So the First Nations Finance Authority issued their first bond — or debenture — back in June, about $88 million and with relatively favourable terms to First Nations. When you're going to be examining or reflecting upon innovative financing models, I think the First Nations Fiscal Management Act represents a very innovative financing model for First Nations.
Senator Enverga: But who funds the bond?
Mr. Clarke: Investors. They go into the capital markets and raise money based on the revenues that are earned by First Nations. So they're securitizing their revenues and they will issue a bond, and a number of different financial capital markets invested in that bond. On their own revenue streams, they were able to raise, independent of government, $88 million.
Senator Enverga: But can anybody buy that bond, or is it just the First Nations?
Mr. Clarke: No. The finance authority is offering the bond up into the capital markets so any number of different sources of investors can buy the bond. It could be pension funds. It could be banks. It could be a whole series of different people. It's a bond rated by a bond-rated agency and, in turn, people are buying it like they would any other bond that's issued by the Municipal Finance Authority of British Columbia, for instance. It works much the same way as it does in provincial jurisdictions.
Senator Enverga: I was surprised the first time I heard about this bond.
Senator Moore: Thank you, gentlemen, for being here.
Mr. Leclair, I want to ask a couple of questions with regard to the Capital Facilities and Maintenance Program. We're advised there are three funding streams under it. One is for operations and maintenance, and minor capital is generally formula-driven, established by using a formula that considers multiple variables such as population and geographic remoteness and provided under terms set out in the funding agreement. Formula driven: What is the formula, who does that and what involvement do the First Nations have in establishing that formula?
Mr. D. Smith: The CFMP, the Capital Facilities and Maintenance Program, is divided into three groups. One is the major capital, the O&M and the minor capital. This formula is population-based. It's the number of residents who live on-reserve. Many elements are considered within that given formula: where the community is situated, whether the department divides the communities into four zones. The southern communities would be in zone 1 and the fly-in communities would be zone 4. There are different measures to define the different zones in the communities.
All these elements are taken into consideration — population, where the community is situated — and they receive their core funding, the core envelope, based on this formula. Chief and council have the ability to determine where these funds will be invested.
For projects that are major capital, the community will do a First Nations Infrastructure Investment Plan, which is a five-year plan. When there are funds that are targeted, such as Budget 2012 for water and waste water, they would submit it within their plan, their priorities. The department would evaluate each one of these projects in collaboration with the regional office and First Nation community, and then they would be prioritized based on a ranking system. A ranking system speaks to health and safety and other important elements, and then communities are supported with funding to address some of these important projects. That would be a quick, high overview.
Senator Moore: On major capital projects, they're proposal-driven and based on the national priority's ranking framework. What is that, and who decides that? This framework prioritizes capital projects with immediate health and safety impacts. Who strikes this framework, and who decides on the priority of projects?
Mr. D. Smith: Again, the tools are developed in collaboration with First Nations technical groups, regional offices. It is based on elements, such as health and safety, to support these communities in addressing some of the important issues on reserves.
Senator Moore: What role or input do the First Nations have in pushing the projects that are a priority to them?
Mr. D. Smith: Every First Nation community has a representative from the department, and they work in close collaboration in identifying their community priorities. Community priorities are put in place or integrated into the First Nation infrastructure plan, which is a five-year investment plan. Again, these projects are ranked, once they're integrated into the plan, for potential funding based on a priority ranking. For example, for water and waste water they would need to be ranked through the priority ranking system for water and waste water projects. Based on the available funds, funds would be allocated to the projects that require immediate health and safety investment.
Senator Moore: You say that each First Nation has a rep who would consult with them?
Mr. D. Smith: The department does work with each one of the First Nation communities on putting in place a First Nations Infrastructure Investment Plan.
Senator Moore: It's interesting because upon visiting a number of reserves recently, we heard many of them haven't seen a department official, whether regional, national or immediate vicinity office, sometimes for years. I find your comment interesting.
With the First Nations Infrastructure Investment Plans, there are three categories: community, regional and national. It says the regional-level plans are developed by the department after validating community-level plans against program criteria and planned allocation of resources going to departmental priority rankings.
For the program criteria, is there any consultation with the First Nations in trying to establish those criteria, or are they developed in the department and passed on to them?
Mr. D. Smith: In 2007 we did the national assessment that identified the situation in First Nation communities regarding water and waste water. Consultations or discussions were held with regional First Nation organizations. It was agreed upon by the different stakeholders or representatives to put in place criteria for future investments. The elements that were identified were health and safety, assuring longevity of the asset, operator certification and other elements.
Based on those criteria, a national ranking tool has been put in place for water and waste water, and every project that is submitted is passed through this tool to ensure that it does respect the criteria that were predetermined by the different stakeholders.
Senator Moore: Are you saying that the First Nations are involved in establishing the criteria?
Mr. D. Smith: I'm saying that many First Nations are, or their respective technical groups.
Senator Moore: We're told that your department tracks the ongoing condition of assets carried out at least once every three years under the Asset Condition Reporting System, ACRS. The results of these inspections include lists of needed maintenance work and repairs, cost estimates of repairs and estimated remaining life of the assets.
Who does those inspections, and how often?
Mr. D. Smith: The annual inspections are done on a three-year life cycle. For example, if you go to the region of Alberta, there are 45 First Nation communities. They would be divided into three years, so every community would be visited on a three-year cycle. The analysis or the inspections are done by qualified inspectors.
In the case of Alberta it is a technical group called TSAG, and it has the mandate from the regional office to support the First Nations in doing the asset condition reports of public assets on reserves and to support the communities. In the case of water, for example, there is the Circuit Rider Training Program, which is a mentoring and training program. They have that mandate.
They work in very close collaboration with the technical folks, technical operators in the First Nation communities, in trying to address the non-compliance. They give them the necessary mentoring and capacity required to assure proper investment that is required to address the non-compliance.
Senator Moore: So once every three years, every band is visited?
Mr. D. Smith: Unless we were told not to visit the community.
Senator Moore: Told by whom?
Mr. D. Smith: By chief and council.
Senator Moore: Does that happen very often?
Mr. D. Smith: No.
Senator Moore: How many times would that happen?
Mr. D. Smith: I wouldn't have the history of that, but I've heard in the past that there may have been a community that would prefer that this did not happen.
Senator Moore: But not very often?
Mr. D. Smith: Exactly.
Senator Moore: The people who do the inspections, Mr. Smith, who are they and what are their qualifications?
Mr. D. Smith: If we come back to water, for example.
Senator Moore: Water and housing. I'm really interested in the housing part because that's a key part of our study here. Some of the things I saw and heard aren't quite meshing with what you're saying has been going on. So I'd like to know who they are and what their qualifications are, sir.
Mr. D. Smith: The department doesn't inspect private homes on reserve. The department does support public assets. So we would do inspections of schools, water and waste water plants, fire halls, band council and other assets.
Senator Moore: Does that include the CMHC homes?
Mr. D. Smith: No, that would be a CMHC program.
Senator Moore: So you don't inspect those homes, and you don't inspect private homes?
Mr. D. Smith: Exactly.
Senator Wallace: Mr. Leclair, you reminded us that 100 per cent of the funding for the construction of most community infrastructure projects is provided by your department and that most of that funding is dedicated to operation and maintenance of those assets as opposed to new capital construction, and that for new capital construction you require targeted funding that would be provided in federal budgets.
In fulfilling the obligations that your department has, how serious a difficulty does that present for your department? The fact that you do not have, on an annual basis, certain funding that would be available for new capital construction. We understand from what we've seen that there is a serious deficiency in the infrastructure across the country in our First Nation reserves. What type of a problem, if any, does that present for your department in not having consistent funding each year for capital projects?
Mr. Leclair: It's a very good question. First off all, First Nations are not different from municipalities or provinces. For example, the overall volume or number of assets that provinces or municipalities have is what was built in the 1970s or the 1950s. If we compare schools, for example, the school I went to when I was a kid was built in the 1950s.
The overall budget is significant, close to $1 billion, so this is significant. I think they are not really different from any other institution. For example, a lot of dollars go to maintenance.
With regard to the capital, to answer your question, for example, for schools, we had some announcements in two, three years. That, in a sense, helped us to basically fulfill our mandate, and in fact we did fulfill our mandate.
The challenge of that phase, and again this is not particular to the department, is that it's difficult to do a long-term plan. So we know a big portion goes to the maintenance and operation, so that leaves less money in relation to the previous question with regard to the investment plan. If you know that you have a five-year plan that will cost whatever number of billions, but in fact you can only count on a two- or three-year planning figure with regard to the money that you know for sure will come, that creates a challenge with regard to the planning.
I want to mention again that this is no different from a lot of other organizations, either within the federal government or outside the federal government.
Senator Wallace: Why wouldn't your department have long-term capital plans for these infrastructure needs, long- term capital plans for schools, water and sewage facilities, roads and health services facilities? I understand you have to have a plan before you can begin to determine how you're going to fund it and what the capital requirement will be, but from what you said, your department doesn't have those types of capital plans. Why would that that be?
Mr. Leclair: Maybe I was not clear with my response. First of all, as I mentioned, the infrastructure is owned by the band and council. Like any other organization, we facilitate the development of the investment plan, the First Nation investment plan.
As Mr. Smith responded in answer to a previous question, the First Nation works with a representative of our department in the regional office to develop their infrastructure plan. After that, the plan goes within the regional plan, and finally we do a national roll-out of that plan.
We do have a five-year plan. Some people will say that it will probably be better to have a 20-year plan. Again, if you are in the private sector, some will plan for 20 years. We want to improve that, and we are working with our colleagues in the region and also with our colleagues in First Nations — from the technical group or from the First Nation themselves — to try to better plan for a longer period.
I think this is one of the subjects you're studying. There's not only planning for what you think you have but also planning with what is available to tap into opportunities like what we have, for example, in the P3 or other collaboration that we can do.
To answer your question, there is a plan. It's a five-year plan. If we can do better planning, for sure, and we are working to improve our planning process in collaboration with First Nations.
Senator Wallace: Correct me if I'm wrong, but the five-year plan is not an across-the-board plan covering all of the reserves across the country. Five-year plans exist in respect to certain reserves where the chiefs and band councils have worked in conjunction with you to develop it for their particular reserve; is that correct?
Mr. Leclair: I will ask my colleague to correct me if I'm wrong, but to get access to the money for a community infrastructure program that we are funding for the 14 categories of assets of community building, they need to have projects in their plan. I'm responsible for south of 60.
Maybe Karl can correct me, but I would say probably all First Nations do have an investment plan. Again, get rollout in the original one and after that at the national level, at the headquarters. We do the national plan, and that plan is available.
Senator Wallace: That really gets to the root of my question. I'm just trying to get a sense of how widespread these long-term infrastructure plans are across the country. There are examples of it, but I'm just wondering, what's the gap? Is there a significant gap and is that something we should be focusing on? Obviously, to fund projects, you have to have a plan. We know that. I'm just trying to get a sense from your experience of how widespread these long-term infrastructure plans are in the reserves across the country.
Mr. Leclair: To answer your question, from my observation after a year and a half in that job, basically we are dealing with some communities that are very small. If you have a school, for example, it's a complex asset. If you have a water system, it is complex to manage and operate. This is why our colleagues in the region work with First Nations. When we ask the First Nation to say how much it could cost in the next five years for their system, sometimes First Nations that are very small and remote don't necessarily have the capacity. As Mr. Smith mentioned, we also have programs to build capacity, to ensure that a First Nation that has a lower capacity will not be disadvantaged compared to another community that has a huge capacity in engineering.
Senator Wallace: I had some other questions, but I'll go to a second round and let my colleagues have a chance.
Senator Beyak: Thank you, gentlemen. We hear conflicting reports on actual infrastructure needs. Some people say that the demand for housing is outpacing the capacity. Others say there are 300,000 Native people, say, in Ontario, 260,000 living off-reserve. We hear from some that that's by choice, that they want to live off-reserve and that we should be putting more money towards social programs off-reserve. We hear from other people that no, they want to go back, but there's no housing for them. Can you comment on some facts? Would you have the facts and be able to verify any of that for us?
Mr. Leclair: Again, housing is private. The housing is owned by the band and council or by individuals, so this is self-reported. We at headquarters don't have it very solidly, or we're not that sure about all the data we receive. Some First Nations decide not to report. Housing is complex, and I'm sure you discovered that. There are the First Nations that own their own houses. When they get insurance, the value of the house, because of proximity to an urban centre, is high. In a remote and fly-in community, they are not necessarily as in good condition. Having said that, there are some First Nations that are remote, and I had the pleasure of visiting Muskrat Dam, and the houses there were in very good shape. It was a fly-in community.
To answer your question, I think this is the challenge. We're looking forward to your recommendations, because this is a complex issue. It's not something that we can say we will approach with only one tool. We are working on different tools, from access to capital and the First Nations Market Housing Fund with our colleagues from CMHC. We are also working with the First Nations to try to formulate plans for social housing. We do provide assistance on the shelter allowance. We are trying to basically look at all the tools that are available.
One of the major challenges also with regard to housing is the renting regime. When we came in the spring, some of the First Nations, the band and council, decided not to charge the occupant. From my point of view, if they're not charged for their house, first of all, you cannot get the money. From discussions with some chiefs across the country, they would say it's not only about the fee that you charge. If you don't own your house, you may not be so keen to maintain it, but if you own the house, maybe there is more maintenance. Again, I don't want to generalize, because some houses, the owners are maintaining them. That creates a lot of complex challenges for us.
Senator Raine: We have lots of questions, so we're probably going to jump all around. We've been focusing on housing to date, but of course you can't build housing without infrastructure, and it's a real chicken-and-egg situation.
Mr. Leclair, you mentioned at the end of your presentation that although the project must overcome a variety of hurdles, including Indian Act restrictions, it is offering a significant insight to the interplay between community development. That was to do with the water authority. Can you be more specific on the Indian Act restrictions? If there are these restrictions, can you see any way to get around them or to change them?
Mr. Leclair: Thank you very much, senator. I will ask my colleague Karl to comment because he's in charge of the project.
Karl Carisse, Senior Director, Strategic Policy, Planning and Innovation, Aboriginal Affairs and Northern Development Canada: Thanks for the question, senator. There are a number of issues with the Indian Act that prohibit some of the projects we'd like to put forward. It makes it difficult. Mr. Clarke alluded to the act earlier and how it's difficult to do economic development. It's also difficult for certain public infrastructure, including housing.
For housing, for instance, and why it's difficult for communities to go and get a mortgage, section 81 of the Indian Act prevents the seizure of assets on reserve. Even if you should have a dual-income family in a community trying to go to the bank to get a mortgage, it can make it difficult for a bank to agree because it cannot go and seize the asset should there be default with the mortgage.
We are looking at various ways of trying to go around that. There have been some examples. For instance, the Kamloops band has a housing subdivision that was done by doing a land designation process, which designated the land. That process is like a partial surrender of that land but, by doing so, they were able to get people to come and live on the reserve and actually be able to get mortgages without ministerial loan guarantees. We're looking at trying to do similar things in other communities, including a residential clause within a bylaw so that the members of the community can actually access loans like that or go to the bank and try to go around the ministerial loan guarantee.
It's difficult. That act is from 1876. It's archaic. It's like a time machine. When you walk into a community, we're back in 1876. We're trying to promote with our colleagues at PPP Canada some modern ways of procuring infrastructure using a base from 1876, so it makes it difficult.
For the water authority in the Atlantic, we're working with the Atlantic Policy Congress. The 33 communities there are still willing to move forward. We're in a process. Just as an update from the last time I was here, about 22 communities now have passed band council resolutions to keep wanting to explore this possibility of doing a water authority in a public-private partnership. We're hoping we'll get some more BCRs coming.
The issue is that for a water authority to be credible and to be able to be operational, they need to have access to the infrastructure. As Mr. Leclair mentioned, the infrastructure belongs to the community. If you have a water authority that will become a utility, they need to own that infrastructure. Therefore, we'll have to go and designate the land where that water infrastructure is. The above ground will actually be partial surrender, a land designation. Then we'll actually have to do permitting for all the in-ground infrastructure. You do not need to have full access to that infrastructure, but you do need to have access should there be a breach in one of the pipes for water and waste water.
This is what we need to establish at that water authority level so they can really control all the water and waste water infrastructure in all those communities that will be part of the initiative. We need this because the idea, at one point, once that water authority is established, is for that water authority to be able to go on the market and to try to do a public-private partnership to bring a partner in. The beauty of this is that then we have the financing and it's possible to get all the infrastructure brought up to par, to meet standards within the first, let's say, three to four years, and then you have ongoing maintenance of that infrastructure for the next 25 to 30.
Going back to an earlier point about infrastructure, the need is great, whether it's housing or water. This committee made a report back in 2007 in regards to water, and we did follow through on both recommendations: one for a needs assessment for water, and then for actually developing legislation and regulations for drinking water and waste water.
Because of that needs assessment, or the national assessment, we were able to get not a precise number but a good idea of the scope of what the need is out there, and it is in the billions of dollars for water. You would need to almost do a study like that to try to find out what the need is for housing. We have differing numbers, as you know, from the department. We've tried, from what First Nations have provided, self-reporting, and then what you will hear from the Assembly of First Nations and the studies that they did — I mentioned this at an earlier time when I was here, but the number was great. Can we put a number on it right now? We have about 30,000 or so. I think the AFN went up to 80,000 or thereabouts.
So we know it's a very big problem. The big difference too is for the water infrastructure and for schools, the department provides 100 per cent of the capital for that infrastructure. We only provide a subsidy for housing. Even at that, we're already removed a little bit more from how we deal with the major infrastructure in regards to water and to schools.
Back to your question, there are ways around the Indian Act and how we can work around that, but they're very difficult. Those land designations, the department I think does about — I don't even know if we would go up to 10 a year. We'll be looking to do 33 at the same time, looking at somewhere around 60,000 voters to designate all that infrastructure for the water and the waste water for the APC project we're doing in the Atlantic. It's possible. We know the solutions, but it's going to be a little bit difficult to do it.
Senator Raine: Do you think there's any way we could do a legislative change of the Indian Act to allow surrender for common infrastructure to make it easier?
Mr. Carisse: I'm sure there could be ways to make it easier, but I think at one point what you're missing in a lot of communities is the advantage of time that municipalities had and developing municipal acts and moving towards that. You have this over generations, over a hundred years of municipal acts that were built and the way that a municipality was run and managed, or a city, and the type of planning that's done, which was a very different approach on reserve. Not to say that legislation could not help, but we'd have to pinpoint what exactly the issues are that we would try to fix with another piece of legislation or regulations derived therefrom.
Senator Raine: Because it seems to me that if you're doing something for the common good, like providing clean, healthy drinking water and waste water treatment, it's in a completely different category than surrendering reserve land for private sale.
Mr. Carisse: That's right.
Senator Raine: This is for the common good. Maybe that's something we should be looking at in our study. Thank you very much.
Senator Ngo: Thank you, gentlemen. I would like to pursue the questions raised by Senator Moore. Senator Moore says that we, the committee, visited a number of First Nation communities across the country, and we heard many remote and northern communities say that officials from the regional office rarely, if ever, visit their communities. Therefore, they do not have a strong sense of the challenge that various communities face.
The question I'm going to raise has three parts. First, under what circumstances does regional office staff travel to communities? What is the role of the regional office staff in the administration of the infrastructure program on the reserve? Do they have a process? How does the regional office have input on policy initiatives from the community they represent, if they rarely or ever visit the communities?
Mr. Leclair: I will try to answer the majority of your question. I may look to my colleagues to help me.
I think it's not just travelling to First Nations. Travelling is one way of going to see, but there are other means to basically try to get the same outcome. I know my colleagues in the region are travelling, and maybe they've been travelling less, but I don't know the specifics. On that, what I can offer is I can come back and check whether we have any statistics. I don't if we have any statistics on whether that decreased or not. That's the first point.
With regard to the question about the role of infrastructure, it's linked with the question where I referred to the investment plan.
Let's assume a community needs to develop their plan. They know their colleagues, and they know who to talk to in the regional office. I and my team here, we are at the headquarters in Gatineau. We have in each regional office — and I'm responsible, as I mentioned, for all the regions south of 60. We have some community infrastructure colleagues who are closer to the First Nation and who implement the program we are dealing with at the headquarters level.
One of their roles is to assist the First Nation in helping them to build their capacity. If I use the example of the investment planning, if they have to do the annual planning, they will either visit or, I would suspect, talk over the phone or through email and try to see basically how they can update their plan to get access to the funding that we have provided. Because, again, the way we provide and allocate the funding is through the investment plan on an annual basis, and we have a five-year window.
Their role, first of all, is to get input from First Nations. They are experts in the field. We have engineers. I mentioned during my last time here that we have more engineers in the regional office than we have in the headquarters. For example, if I use the engineer in Toronto, the engineer in Toronto and Thunder Bay will work with the technical group from the First Nation or from the regional group and try to see what could be done with regard to, for example, a water project. So they would get some input, but they would work with the First Nation leadership to build the capacity or to develop the plan with them.
I was mentioning 14 categories of assets, so it could be more closely supported. This is a more complex asset. If it is not complex, they will provide basic leader training, or they will facilitate training with regard to either managing or fulfilling their different plans, et cetera.
Mr. Carisse: I think the only thing I could add on that final point of your question, senator, is in regards to policy. The way the department — I wouldn't say rule of thumb, but mostly the policy work is done at headquarters. The delivery arm is in the regional offices, a lot more in regards to infrastructure. They're the face of the department. They're the face definitely for the Capital Facilities and Maintenance program, as Mr. Leclair was saying.
When it's time to develop policy, for instance — and I was here in the past with regard to the Safe Drinking Water for First Nations Act — the policy was being led by headquarters. But obviously we work with the regional offices and get input from them, at the same time as they work with First Nations communities. Then, when it's time to do greater engagement, often it's the headquarters that is leading the engagement, but with the help of the regional offices to bring First Nations communities to those sessions in the region.
This is how we try to get the voice of First Nations in any type of policy development. It's always difficult. For the chiefs I've talked to in the past, they would much rather appreciate that we go to each and every one of those 630 communities that are out there to discuss with them directly, at their community level, with their band council and their membership.
I understand that concept and the view of that nation-to-nation relationship, but we can't do it that way. It's just cost-prohibitive and time-prohibitive.
So what are the next alternatives and how best can you do engagement? For us, what we work on in infrastructure, we not only have to go and talk with the leadership, which we absolutely have to do, but we also want to hear from the technical folks from the communities. For water, it was water treatment plant operators that we wanted to listen to and to hear from.
It kind of breaks down that way with regard to the policy and the operational for initiatives.
Senator Ngo: The remote communities, if you don't visit them, how do you get the input?
Mr. Carisse: It is a struggle for the remote communities on a number of fronts, including trying to get there for the regional offices and the amount of times they could go. In the past it may have been done more often, and I think maybe this is the echo of what you're hearing when you're visiting the communities and what the reality is now. As Mr. Leclair said, we'll look into it to see whether it is less or not, but I'm assuming that's probably one of the issues that you're hearing.
The regional offices, if we look at the process we were talking about earlier in regard to their infrastructure plans, the community builds it at the community level. The region will try to provide as much assistance and capacity development as they can, and those plans are sent to the regional office. Based on that and the available funding is when the regional office has to come up and make some decisions based on health and safety and priority ranking frameworks on which water treatment plant or which upgrade goes forward. Do you do this road project over that project? You have to make it fit into the available funding.
It's not necessarily just a funding issue, but we have a certain envelope, and that's the amount we can spend on a yearly basis. We want to make sure the funding is provided to where there is the greatest need in regard to health and safety first and foremost.
Senator Ngo: If that's the case, then you say that the remote communities in the northern territories will be left behind.
Their living conditions are not acceptable. I don't know what the regional office should do or visit them or what, but when the committee visited those communities, their living conditions are not up to par or the standards other Canadian people live in.
Do you have any suggestions, anything you can do for those remote communities?
Mr. Carisse: We don't want to give the impression that they are left behind. They submit their plans just like any other community. We work with them as much as possible. We are actually trying to do as much as we can for these communities. As you saw when you did your travels, often they are the ones that are in greater need.
Some communities are looking for tools to access more financing and funding to try to do some interesting initiatives in regard to economic development, et cetera, but there are others that are not there. They need support, and those are the ones that we have to support the most. Whether there's a physical presence or not, we'll have to look into it, but I can assure you that the department is there working with them.
We're doing an initiative right now with some northern communities in Manitoba to try to address their school issues. It's been a struggle for them. The infrastructure is a lot pricier when you get in those remote communities. We have to bring material up winter roads, which brings up the cost. In some communities in northern Ontario their winter roads haven't opened in the last two years, not even for commodities. They are on diesel generators, and we had to fly in the diesel to these communities. That's all they have right now as a source of energy, and we have to keep that going, but it comes at a premium.
It is a struggle, but I can assure you that we are working with these communities to try to find the best way possible to solve them.
There is one good project I should mention for at least the ones in northern Ontario. For those communities to be able to be connected, yes, there are roads, but there is also connectivity. We did a close to $90-million project with Bell Alliant in the province of Ontario to bring fibre optic cabling for Internet to 22 communities in northern Ontario. It's with projects like that that if there's less of a physical presence, well, they're getting great Internet now with fibre, so they can at least have a presence via the Internet.
I think those are some of the solutions that we should be working with. Not just within the federal family, but at that point, we were working with the province and with private industry, with Bell Aliant that put in $25 million for that project.
Mr. Leclair: I don't want to repeat myself, but this is a challenge if we compare with off-reserve. Any remote and small communities have similar challenges. Before Mr. Carisse responds, I just want to say there is a way of visiting, but there are other means, such as connectivity.
If I could share my personal experience, I'm spending a lot of my time in a day more on the remote communities. Of course the needs are greater, but I want to reassure you, senator, that our attention is there.
We use the example of the school Mr. Carisse mentioned. We are working with four communities up North, remote communities, fly-in communities, basically to improve the situation, but the challenge we're facing is like any organization. It is the particularity of Canada. We are spread out, and we have some small, remote communities on- reserve and off-reserve.
The Acting Chair: Thank you. Maybe just I'll take the prerogative to ask a couple of questions just to make sure I've got this right.
Senator Moore asked about criteria and how you assess things, formulas. Is there anywhere, either in infrastructure or in housing, the monies that you parse out, where you consider the capacity of the community by virtue of their own- source revenue versus none? Is that a factor in anything, in either of those pools of capital or money that gets spent?
Mr. Leclair: If I use the example of the school with the Budget 2012 allocation of $175 million for the three years, what we decided to do is to put, I think, $25 million for innovation, and on that what we're trying to discuss with some First Nations that do have the capacity and want to test a new way of doing business is to use their own money. I know for sure — and maybe, Mr. Smith, you can add on that — we did some projects where First Nations communities decided to put their own money with regard to the infrastructure project to ensure that they got the project.
Having said that, we need to be careful. We cannot use all the allocation, because if you do that, we may end up helping only the ones that do have a good source of revenue. So we need to strike a balance, but to answer your question, absolutely. We are trying to look at all the options we have.
At the end, we want to do more. I'm repeating that to my team all the time that our role is to ensure support to First Nations to deliver and to manage more infrastructure for the same dollar amount. This is why I think that work that you're doing is with innovation, because I don't think we will have in Canada all the money we need to fix the overall infrastructure challenge that we have either on First Nations, in municipalities, in provinces. Therefore, we need to be better in basically managing what we have, and also for the new ones, to work with partners like the private sector and others that have an interest to work with us.
Senator Enverga: Let's talk more about the public-private partnership. From your view, how important is this for you with regard to your programs? Are there any infrastructure-related projects that are best suited for such partnerships? Is there anything you can suggest that we should be working on or any good model that you can say?
Mr. G. Smith: The example that's been talked about, the APC project in Atlantic Canada, that's a project where the attempt is to try to bundle 31 or 32 communities and their individual infrastructure needs into one huge procurement.
In our analytics, to decide whether or not there's value in the transaction as a P3, we compare the P3 procurement to what the traditional procurement would be for those assets. What you're trying to do is transfer to the private sector a lot of the risk that you would otherwise retain in a traditional procurement. Transferring construction risk, timing risk, inflation risk, the design mistakes, you transfer all those over to the private sector.
What you want to try to do, you want them to have enough financing at risk, so they have to go out to the marketplace and source financing to finance part of the capital cost of that asset, and that's going to cost more than what you could borrow on yourself as the Government of Canada. The value in the transaction is that the value of the risk that you transfer is more than the additional cost of the financing of the transaction. So that's the model that we work with.
So that project right now, it's taken them some time to get over the governance hurdle where they now have this water authority that looks like it's going to come together and everybody wants to participate. If you don't have the governance right and you don't have the land acquisition in place, those will be impediments to going into the market place as a P3. We're about to start the analytics to compare the traditional procurement against this bundled P3 procurement. If there is value in the transaction, then hopefully the project will proceed.
Senator Enverga: Has there been any independent analysis of the advantages and disadvantages of this kind of partnership? Are there any findings that we should know about?
Mr. G. Smith: Our role within the federal family is to understand the advantages and disadvantages of the P3 model. We do a lot of analytics on every project that comes in, whether it comes into the P3 Canada Fund from applications from territories, provinces, municipalities or First Nations. We also do the same analytics within the federal family. For instance, we're very active with Public Works and with Infrastructure Canada on the new bridge in Montreal; so we have that dual role.
Senator Enverga: What are the common advantages for the private sector and for the bands?
Mr. G. Smith: Well, I'll talk about P3s in general. There is an advantage when you compare a traditional procurement to P3 procurement. You're using whole life cycles, so you're looking at financial models that are 25 to 30 years long. You're bringing that financial analysis back to using net present value techniques to look at what the value of that transaction is in today's dollars between the two alternatives. If it's cheaper to do it as a P3 in net present value, then the delta between that and traditional would be the value in the transaction. We will only recommend transactions that have value for taxpayers in doing the P3 model.
We suppose that it's 15 per cent to 20 per cent of public infrastructure where the model probably makes sense. It really starts to drive value when you're in large complex projects, like this APC project would be. Typically, north of $100 million in capital cost tends to be sort of the sweet spot where the model can drive value for money.
Senator Enverga: Let's say a First Nation requested a project to build infrastructure or a house. Do you check to know whether there's an agreement with this First Nation, such as a treaty, that pertains to the federal needs that we can provide? Have you checked for anything that we could verify to make sure this particular community has a treaty or agreement with the federal government to do this or that?
Mr. Leclair: First, the house belongs to the band and council or the owner; so we don't necessarily check that. For the infrastructure projects that we finance, I refer to the overall asset. To ensure that the project gets financed, they need to put it on the investment plan. The investment plan is where they work with the original colleague to see that the project is eligible. If the project is not eligible, it will not make it on the plan and, therefore, will not be rolled out. I can check your question specifically, about the check they make, but I rely on my colleagues in the regions to know whether the project is good or valuable and meets the criteria for the specifics.
Senator Enverga: I would be happy to receive those details so we can verify the needs.
Senator Wallace: Mr. Smith, the P3s have been used throughout the country as a means of funding the construction of highways, water and sewage projects and schools in non-reserve situations. As we move along with this work, we've talked about what solutions could satisfy the infrastructure shortfall that seems to exist on reserves. The ability of P3s to fill some of that gap is appealing. It's private sector money, and that private sector contribution would be appealing.
I realize you have one particular project where you, Mr. Carisse, have described bundled procurement. That sounds very good, but in terms of sewage systems, schools and other water projects, do I understand you to say that unless the projects were at least in the amount of $100 million, a P3 probably wouldn't be appropriate?
Mr. G. Smith: That's a great question. I just want to clarify a couple of things that you've said. First, the private sector doesn't fund public infrastructure. Part of the beauty of the P3 model is that private sector investors invest in the consortia that will manage the project. You then have additional due diligence from people who finance the project. Public infrastructure is always funded by the public. I just wanted to clarify that.
Second, you mentioned leasing $100 million. It's not a form of lease. The ownership of the public infrastructure stays on the financial records; and the ownership remains with the procuring public authority, whether it's a First Nation or a province or a municipality. The associated liability with the future stream of servicing that asset is a liability as well on the balance sheets of the procuring jurisdiction. There's no leasing involved.
I did say that in our experience, if the capital cost of whatever the asset is, a water plant or a school or a hospital, is north of $100 million, there's a lot of appetite in the money markets for investing in P3s. It's easier for the financing to come to the transaction. It's a little more difficult for $50 million to $100 million, but we're doing those; but that's the reality of what's acceptable to the marketplace.
Senator Wallace: Realistically, on a reserve-by-reserve basis to meet the needs of one reserve, it would seem that $50 million to $100 million range would probably make a P3 inappropriate to fund.
Mr. G. Smith: It would make it difficult. I can tell you that we did a small waste water plant in Lac La Biche, in northern Alberta, as a P3. It was difficult because it is remote, but there was value in the transaction, and the P3 Canada Fund funded it. I think it was around $12 million to $15 million. So it is possible. You may not get the financing in place, but it could be a letter of credit that the operator has to provide as security, or performance bonds, or a combination of the two. The best security is having money at risk. Letters of credit and performance bonds can work as well in small projects.
Senator Wallace: As Mr. Carisse described, P3s would be better suited where you have, as you referred to it, a bundled P3 procurement where a number of First Nations wish to come together collectively.
Mr. G. Smith: Yes, because a lot of the value in the transaction is the integration that the private sector can do between design, construction, and maintaining that asset over the long term; and you also get the synergies they could provide.
In a bundled 31 or 32 plants in Atlantic Canada, the long-term maintenance could be managed in a different way by the private sector and they could get the inefficiencies of having redundancies in different places. I'm just giving out examples, but that's the beauty of the P3. You just throw it to the private sector and let them do what they're good at and try to figure out solutions. I'm just giving you some examples of the kinds of things that they do to become more efficient and integrate the components of the project better than we typically can do in the private sector on very large complex projects.
Senator Wallace: Realistically, would P3s have any potential to fund school infrastructure on reserves?
Mr. G. Smith: Absolutely. That's a provincial jurisdiction so they're not available for our fund, but we are looking at some school projects with Aboriginal Affairs. Again, it could have a bundled school project.
Senator Wallace: Exactly.
Senator Raine: I'm going to jump from the East Coast to the West Coast now. Mr. Clarke, I will direct this question to you.
We visited a reserve in British Columbia, right on the edge of Saanich, which is a very nice suburb of Victoria. Driving into the reserve, on one side of the street there were beautiful homes, probably $500,000-type homes; on the other side was the reserve with virtually no development there. We got into the community. They were really struggling. They had great dreams, and they have huge potential for economic development, but they know they need to do a master plan for the development of their reserve before they start. They were running into some really weird problems. There was a right-of-way through the reserve that had been established in 1898 for a road that never got built, but because it was alienated as a right-of-way, it was totally interfering with their ability to do anything. They don't have any own-source revenue or economic development, and they could not get funding from AANDC to hire a consultant to do a master plan exercise. Yet, you look at where they're located and the opportunity they have, it's unbelievable. But they can't get started because what they need isn't in the formula.
Can you comment on that? I think it falls into economic development. Could we offer them any hope as to where they could go for some help?
Mr. Clarke: The answer to that is twofold. One is the funding. There are programs that support the communities to undertake economic development projects, do some economic development planning and even some land use planning. I'm not familiar with the details of that particular community, but we can look into it and see exactly what the situation is, when it comes to applying for programs.
Senator Raine: So there is a pool of funding for economic development master planning?
Mr. Clarke: We do manage a couple of programs that would seem to support that type of thing.
The other thing with respect to economic development, I mentioned the Indian Act earlier; in terms of looking forward and looking at the big picture, what we find, and it would apply to communities that are small or large, you look at the differentiation across Canada amongst these communities. There's a whole bunch of different factors that come into play when it comes to whether communities are successful or not. The greatest impediment is the Indian Act; all roads point to the Indian Act. It may not be a question of we need to dismantle the Indian Act, but rather I think where we have been successful is building some off-ramps to the Indian Act. Essentially, what the Indian Act doesn't do is confer jurisdiction to First Nations to act in the manner that some of my colleagues are talking about: municipalities or other local governments.
For instance, we have had success, I mentioned the First Nations Fiscal Management Act earlier, where Canada has conferred jurisdiction around a number of different things that allow First Nations to raise money in the capital markets, like any other government is able to do. We've also been successful — and this might refer to Saanich and that community — with the First Nations Land Management Act, which essentially allows First Nations to opt out of the sections of the Indian Act that relate to managing their land. That is really allowing First Nations to move much more at the speed of business. The Indian Act designations and all this, approvals by the minister, are very cumbersome, costly and time-consuming, and often by the time all this stuff is done, the economic opportunity is lost.
There are some other areas, too, where we probably could do more thinking. There are provisions around, for instance, Indian monies in the Indian Act, which essentially means that First Nations have to ask Canada to use their own money. They have to apply and get permission from the Minister of Aboriginal Affairs to have access to money that is collected on their behalf by Canada, held in trust in the Consolidated Revenue Fund. Right now there's about $800 million sitting in the CRF collecting 2.5 per cent interest. We can certainly do a calculation on what that money would be worth. If you were able to, let's say, securitize it like in the nature of the First Nations Finance Authority, you could probably generate $1.7 billion in leveraged financing over the course of 30 years if you're able to activate the money that's being collected or that's sitting in the Consolidated Revenue Fund.
Those are some examples where we are acting and we see that more effort or investment in some of these off-ramps is useful. There are other opportunities that we'll probably be exploring as well. The last thing I would mention is the growth of some of these regimes as well.
Right now there are 138 First Nations scheduled as part of the FMA. Forty-five have certification from the financial management board and about 38 are part of the borrowing pool.
The financing that was raised in June was for 14 First Nations. There are still a number of First Nations that have borrowing room and have the ability to also raise some money in the capital markets.
The objective of these institutions is to have about 100 more members over the next five years. Again, conservatively, that could generate about $800 million in additional financing.
If you're looking at some alternatives to raising money that would be complementary to some of the work being done in the infrastructure branch and perhaps ways of leveraging some of the other instruments, whether they are P3 or other things, there is potential for capital if we are a bit more creative about what we're doing.
Senator Raine: You're pretty optimistic then with the changes that have come about in the last few years and the different tools that are now there, that we can use the capital funds from non-government sources to help catch up with First Nation needs?
Mr. Clarke: My opinion on that is probably not relevant, but there are opportunities. The gap is huge. You visited the communities. The gaps are huge, but there is potential and opportunity to at least move the yardsticks a bit.
Senator Raine: You mentioned that 100 per cent of the infrastructure need is available for financing by AANDC, but in this letter, one person said: "One thing I failed to mention in my presentation is the fact for sewer and water AANDC funds 80 per cent of actual costs paid to the local municipality, and our nation is expected to raise 20 per cent of our annual costs, which is $500,000. So it's very difficult to catch up . . ."
So if they are entering into agreements with neighbouring municipalities to provide them services, AANDC only pays 80 per cent. Is that true?
Mr. Leclair: That's a good question. I said in my opening remarks, up to 100 per cent, and the percentage varies depending on the asset. For example, for recreational, this is 20 per cent. Schools are 100 per cent. Water is 80 per cent. You're absolutely right. This is a system that was established. I just want to say to all the senators here that we are looking at that. We are anxious to see the results of your study and we also look at ways to improve. One way is to question ourselves about what should be the right percentage. Should it be 80 per cent for everybody or just for certain communities? We are not there yet. As we speak right now, the percentage that we are funding varies between the types of assets.
Senator Raine: But if you don't have your own-source revenue, then, you need to steal from another pot to build your infrastructure and it just doesn't get built.
Mr. D. Smith: When we speak of 80 per cent, we're speaking of operation and maintenance costs. What we've seen in some First Nation communities, the community might decide to cover that 20 per cent through a water fee. Again, that's a decision of chief and council to take. They might also decide to take some of their own-source revenue to cover that 20 per cent. Again, that's a chief and council decision.
I imagine in that letter it's a municipal agreement with the neighbouring municipality for services. There the department would cover 80 per cent of the O&M for that. The community would need to cover, for water and waste water, that delta, which is 20 per cent. When we look at operation and maintenance of the school facility, the department will cover 100 per cent of the cost.
When we speak of assets, such as building a major capital project, the community will need to respect what we call our level of service standard. We'll work with the community for feasibility, get a proper scope of what is needed, ensure that it respects a level of service standard, and then we'll support funding for that major capital investment at 100 per cent. It's the operation and maintenance cost that varies.
Senator Moore: Thank you. I've been asking, gentlemen, about the input in responding to the needs and priorities of the First Nations when you establish these programs. I want to mention a couple of things that we came across when we were visiting some reserves. In one situation, they had a diesel storage tank that was leaking and a new one was delivered. This is in a remote situation. But the plumbing, couplings and other pieces needed to remove the old one and put the new one in place weren't included, and they couldn't get the parts.
In the second situation, there was an ACRS report requiring a band to spend a couple hundred thousand dollars on road signs, but the roads themselves were barely passible. The homes were rife with mould, where the money could have been better spent. Who decides that? Who is listening to the band in those situations?
Mr. D. Smith: Again, the ACRS will give you the condition of the asset. For example, the road, there's a technical road expert who will do an analysis of the condition of the existing public roads in the community and they will give a report to chief and council. The chief and council will also get a report for the condition of their school, the water and waste water plant and the other public assets in the community. Chief and council will take the decision as to where they will invest their core funding of operation and maintenance, in which asset they prefer to invest.
Senator Moore: They didn't want to put the money into road signs because they know it can be better used in other areas, so are they forced to do that because somebody wrote a report down South? Who is responding to the obvious need?
Mr. D. Smith: Chief and council have the ability to determine whether or not they invest their core funding in roads or in the mould situation.
Senator Moore: We were told that didn't happen. I'm wondering, will the situation ever be that if that band doesn't put the money where we're telling them, they're not going to get the rest of their money for something else? We're going to hold back on something else, unless they do that first? Would that situation ever happen?
Mr. D. Smith: I can't say it would never happen because I'm not informed of that specific situation, but I can say if it is targeted funding — but there is no targeted funding for roads.
Senator Moore: These are road signs in a remote area. It's just bizarre.
Mr. D. Smith: A road sign? Sorry.
Senator Moore: Not on the road. They would love to have it on the road. The roads were barely passible in a vehicle, honestly.
Mr. D. Smith: Sorry about that.
Senator Moore: No problem.
Mr. D. Smith: Again, if it's in their core funding — if the community gets the core funding, chief and council decides where the investments are made.
Senator Moore: They were told they weren't allowed to and they had to spend it on signs, which was frustrating.
Mr. Leclair, in your report you said that through the addition to reserve process, over a million acres of additional land have been added to reserves since 1992. We visited some reserves, and the bands had applied for additions to the reserves because they had planned residential and commercial development and they couldn't get the transfer done. I think in one situation we were told it's been 30 years so far.
If you can't answer it now, maybe you can file an answer with the clerk. I'd like to know what the process is to have lands added to a reserve and what the inhibitions or obstructions are to doing that. I couldn't believe it when the chief said it's been 30 years.
Mr. Leclair: In my remarks, my point was just that with regard to the size of the reserve that has increased, there's more infrastructure and therefore more demand.
I will turn to my colleague Mr. Clarke to explain the process because this is not under my responsibility.
Senator Moore: You can send a brief.
The Acting Chair: Would you mind, Mr. Clarke? I'm conscious of time, and I want to wrap things up here. Could you give us a briefing on that specific issue in writing for the committee to look at? Would that be all right?
Mr. Clarke: Sure. There is material and some work has been done and some proposals are in place around accelerating the additions to reserve process.
Can I just say one thing in response to the comment around who decides? I go back to the First Nations Fiscal Management Act. Part of the narrative around conferring jurisdiction is also building institutional capacity.
One of the values of the First Nations Fiscal Management Act regime is that we have through legislation created First Nations-led organizations like the First Nations Financial Management Board and the First Nations Tax Commission, whose job it is to manage, with First Nations themselves, the powers that are conferred by these pieces of legislation.
Part of the quid pro quo or part of the balance of conferring the jurisdiction is also providing the support for institutional capacity. I think that's really part and parcel if you're going to build some of these off-ramps to the Indian Act and apply some of the same types of models to other things we do — maybe even infrastructure, I don't know — where you have that balance of conferring jurisdiction and building the institutional capacity. Public servants in Ottawa are making decisions around how people are living their lives in some remote community.
The Acting Chair: Thank you. This has been tremendous. As you can see — and I'm sure you've seen this before — when you let senators loose to ramble around the countryside, we're going to come back with some specific issues that we need answers on.
Senator Raine asked about the particular plight or trouble that the folks near Saanich are having in just getting going in what seems to make so much sense. We'd like to ask you, if you could, to follow up and provide us with an answer of why they can't get where they want to go or what you were able to do to help them on the road. That would make us feel better.
There are a couple of other things that I just wanted to leave you with as well and ask for you to follow up on with us.
You heard a couple of senators speak about community visits by AANDC staff, and that was a common theme. It wasn't just one or two. It wasn't even in one little region. We heard it both in British Columbia and in Ontario. So I think it would be worthwhile for you and for us to understand what the story is, what the situation is. Have site visits become something that isn't done for a reason? If so, what's the reason, and what has transpired over the last few years that would make the memory in the communities such that they just say they don't see you?
Second, there was, in a number of places, from people we thought would know, a perception among community leaders that a significant percentage — half — of the budget spent on First Nations never leaves Ottawa.
What I would like to ask, so that we can have it on the record, is specifically about the breakdown of the total expenditures, the money that "never leaves Ottawa," which is spent on administration or specific initiatives that are administered centrally — such as residential school settlements, the kinds of things that are here and find their way out — but there are people and it's all mingled. How much is directed in financial transfers with no people attached to it — no one studying it or looking at it, overseeing it or deciding whether or not — and how much money is actually released to the First Nations?
If you could put it in those kinds of buckets, which I think you can do, it would be helpful not just for us but for all of the stakeholders that we get that clear. Because it was —
Senator Moore: Admin charges.
The Acting Chair: Exactly. We'd like to see that in a very clear and transparent way. I think we would then undertake, as part of our follow-up, to make sure that gets directed back to the folks who told us otherwise.
Those are some things for you to take away, if you wouldn't mind, and get back to us on. I want to thank you for your participation here today and for your patience with us. We're asking all kinds of questions and jumping all over the place because we're very engaged on this issue. We're looking to make impactful recommendations when the time comes. We're looking for innovative solutions that will be helpful to everybody. You've given us lots to think about.
With that, we'll adjourn.
(The committee adjourned.)