Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 12 - Evidence - March 31, 2015
OTTAWA, Tuesday, March 31, 2015
The Standing Senate Committee on Aboriginal Peoples met this day at 9:30 a.m. to study challenges relating to First Nations infrastructure on reserves.
Senator Dennis Glen Patterson (Chair) in the chair.
[English]
The Chair: I would like to welcome all honourable senators and members of the public who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples either here in the room, via CPAC or the Web. I am Dennis Patterson. I have the privilege of chairing the Standing Senate Committee on Aboriginal Peoples. Our mandate is to examine legislation and matters relating to the Aboriginal peoples of Canada generally.
This morning 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 First Nations reserves, including housing, community infrastructure, and innovative opportunities for financing, as well as more effective collaborative strategies.
We've completed our hearings on housing and are now in the last stages of our study on infrastructure.
Today, we will hear from three groups. Here with us in Ottawa are Tsawwassen First Nation and Muskeg Lake Cree Nation. Tsawout First Nation will be joining us by video conference from Vancouver Island. I would like to welcome you all.
Before proceeding with testimony, I'd like to go around the table and ask the members of the committee to please introduce themselves.
Senator Sibbeston: I am Senator Nick Sibbeston from the Northwest Territories.
Senator Lovelace Nicholas: Senator Sandra Lovelace from New Brunswick.
Senator Dyck: Senator Lillian Dyck from Saskatchewan. Good morning.
Senator Watt: Charlie Watt from Nunavik.
Senator Raine: Nancy Greene Raine from B.C.
Senator Beyak: Senator Lynn Beyak, Ontario.
Senator Enverga: Tobias Enverga from Ontario.
Senator Tannas: Scott Tannas from Alberta. Good morning.
The Chair: Thank you, colleagues. I know you'll help me in welcoming our guests this morning. From Tsawwassen First Nation we'll hear from Colin Ward, Director of Public Services. He's joined at the table by three representatives of Muskeg Lake Cree Nation. They are Aaron Ledoux, Director of Housing; Jamie Arcand, Housing Manager; and Dana Greyeyes, Councillor.
From Vancouver Island via video conference, we welcome representatives of Tsawout First Nation. Our witnesses are Chief Harvey Underwood; Eric Pelkey, Director of Operations; Gwen Underwood, Lands Manager; Stanley Sam, Councillor; Eric Pettit, Senior Project Engineer; Ron Akehurst, General Manager, both of WSP Canada Inc.; and Allan Claxton, Councillor.
Witnesses, thank you for appearing to assist the committee. We're looking forward to your presentations. They will be followed by questions from senators. Perhaps we will begin with Muskeg Lake to be followed by Tsawwassen First Nation and then Tsawout.
Mr. Ledoux, please proceed.
Aaron Ledoux, Director of Housing, Muskeg Lake Cree Nation: Good morning, members of the committee. My name is Aaron Ledoux. I'm from the Muskeg Lake Cree Nation. I have with me today two colleagues from my First Nation: Housing Controller, Jamie Arcand, who will be giving us the hard numbers if we need them; and Councillor Greyeyes, who holds the housing portfolio. They may be called upon from time to time in reference to our year-end numbers, our policy and current undertakings.
Muskeg Lake Cree Nation has a population of 2,102 members, of which 434 live on reserve, which consists of 56 square miles and 136 homes. There are 36 CMHC homes and the rest are band owned. We are an FTA band, which proves the credibility of our organization.
Muskeg Lake Cree Nation is the first reserve in Canada to set up an urban reserve and create business and enterprise for own-source revenue. Muskeg Lake Cree Nation has been the model for other First Nation successes across Canada with establishing the urban reserve.
I will speak to a number of issues that need to be spoken to that are supported by our year-end numbers and projected budgets for next year. I want to speak of things that are positive in our home community. I know that you've heard it all. This is not a complaint session for me, but there are things that need to be addressed. I want to see what proposed solutions are required on behalf of my First Nation.
It is my duty and responsibility to let the committee know our doctrine. It is the Muskeg Lake Cree Nation's position that shelter, housing, renovations and related infrastructure are treaty rights and form part of the federal trust and fiscal responsibility. This position is based upon a special First Nations-Crown relationship dating back to the Royal Proclamation of 1763. Section 91.24 enhances this position in the Constitution Act of 1867 and sections 25 and 34 of the Constitution Act of 1982. This needs to be clarified before I begin our testimony.
The treaty right to shelter is a priority for us. It has been driven into the core of all of our First Nations people since the inception of the treaty. As wards of the federal government and its representative, AANDC, we rely on core funding as the basis of services we provide to our members. These services include but are not limited to housing, renovations, sewer, water and sanitation, as it pertains to this presentation.
Muskeg Lake Cree Nation has two main water treatment plants, state-of-the-art facilities. They were supplied by AANDC and they supply the majority of our members in our core village.
We have two satellite wells that supply different regions on the south end and the north end. The total value of these assets would be close to $4 million, which is a positive in our community.
Muskeg Lake Cree Nation is scheduled in its capital projects planning to receive $600,000 for a waste transfer station. Within the next few fiscal years we are also in line for expansion to our lagoon system. With regard to all these projects, we are given funding through our ACRS report, which is to provide resources to manage and run these facilities. The difference between the actual cost and what is given is what it's causing the stress in our community.
In the past three years, we have not received infrastructure that complements these new water treatment plants and our satellite wells. We're always repairing and replacing infrastructure because of these new upgrades. As far as it pertains to water and service delivery, our actuals were over $250,000 last year. All we were given by AANDC was $27,000. You can see the gross disparity.
With regard to housing, new builds for section 95, in the last five years, we've built 12 new homes and renovated close to 40. These are positives in the community but negative to our financial bottom line.
I stated in my opening statement that we believe that we have a treaty right to shelter. We receive shelter allowance for anything that falls under own CMHC section 95 builds, but nothing for any of our section 95 loans that we have paid out and that have reverted back to band-owned homes.
Phase 1 through phase 4 are adding other costs for renovations because these are loans that have already been paid out and are the responsibility of the First Nation. We believe in Muskeg Lake that this is unfair, that other First Nations in Canada receive a universal shelter allowance. We have to ask the question: Why?
To offset all these costs due to underfunding, Muskeg Lake Cree Nation has to resort to own-source revenue to provide these services to our reserve community members, for example, renovations, safe drinking and potable water, and sanitation. So when we take from our off-reserve businesses and entities to supplement the lack of funding from the Government of Canada and AANDC, it takes away our ability to move forward with other opportunities, for example, with business, youth and sports.
Our solution is that we plan on implementing rent under our new housing policy. We're looking for a break-even number at the end of every year. The problem with the solution is that it is taxing the poorest of the poor. Our on- reserve median income is 13 grand. So you take away $454 and there's not much left over. The off-reserve median income of our own members is $33,000.
That's about all I've got for you today.
The Chair: Thank you very much. We're going to hold the questions until we hear from everybody.
We will now hear from Tsawwassen First Nation and Mr. Colin Ward.
Colin Ward, Director of Public Services, Tsawwassen First Nation: Thank you, Mr. Chair and the committee, for inviting Tsawwassen First Nation. I'm honoured to be here on behalf of Tsawwassen to talk a bit about Tsawwassen's story.
Tsawwassen is a modern treaty First Nation. I'll talk a little bit about what that means because it does explain Tsawwassen's root around how it has addressed some of the infrastructure challenges that it has had. Tsawwassen, like many other First Nations, suffers from a real infrastructure deficit in the form of poorer roads that you would see elsewhere, poorer water connectivity, more insufficient sewage treatment capacity, and those kinds of things. The challenge that infrastructure deficit creates is that it limits the ability to generate own-source revenue through economic development. Tsawwassen's vision has been to generate own-source revenue through economic development to ultimately lead to improvements within the community.
From Tsawwassen's perspective, there have been three key elements to addressing that infrastructure deficit. One is self-government jurisdiction over lands. Another is land tenure and the certainty of land title. The third is partnerships with senior levels of government.
Targeted investments can yield significant economic gains to all parties at the table. In terms of development that Tsawwassen is currently engaged in, for example, senior levels of government in B.C. and Canada will benefit in the form of about $70 million in annual incremental personal income tax resulting from development on Tsawwassen lands. There's also incremental sales tax revenue. The Province of B.C. will receive property transfer tax revenues as well. So significant economic benefit can be derived from the Tsawwassen model.
In terms of Tsawwassen's background, as I mentioned, it's a modern treaty Nation. The treaty was signed in 2007 and became effective on April 3, 2009. The reason the Tsawwassen community chose to go through with the treaty was that it had a very clear vision of pursuing economic development and using revenues generated from that to invest in the education, health and social development of its people. In order to execute that vision, there was a real need to attract private sector investment. So much of what Tsawwassen chose to do under the treaty framework has been around trying to attract private sector investment. I'll speak a little bit about the keys to that, but first I'll give you more background on what a treaty is and what it actually means.
When it comes to the form of land tenure that accompanies a treaty, Tsawwassen is the owner of the land in fee simple. It owns the land in a similar way to how the Crown owns Crown land. Tsawwassen owns the highest estate known in law, which is how the treaty defines it. There are no reservations in favour of either the provincial Crown or the federal Crown. It has that ability to administer its lands as it sees fit.
Another piece of the treaty is self-government jurisdiction. Tsawwassen has drawn down jurisdiction in a number of key areas with respect to land, all with the intent to encourage private sector investment in the community. One key piece of legislation is the Tsawwassen Land Act, which was patterned around the provincial land act. Given the similarity in the way that Tsawwassen owns land, it made a point of developing a law that not only reflected Tsawwassen's features and how it governed itself internally but also mirrored how the province administers its lands.
We also have the Land Use Planning and Development Act, which regulates development on Tsawwassen land — zoning, land-use planning and whatnot.
We have the Community Governance Act, through which services are provided to members and non-members living on Tsawwassen lands and utility fees are charged to pay for those services.
Lastly, there's the Property Taxation Act as well through which Tsawwassen charges property taxes to occupiers of Tsawwassen lands. That will become a key part of Tsawwassen's ability to finance itself over the long term. Once current projects that are underway are built out, Tsawwassen is projecting around $16 million in annual property tax revenue. That should grow to $27 million over the long term.
Those are some of the key jurisdictional pieces and what we've tried to do. Imagine there's an infrastructure deficit on Tsawwassen lands and the size of it is significant. If we are to execute on the vision and generate that private sector investment, we have to make about $110 million worth of public sector infrastructure improvements, and we kind of have to do it all at the same time. While you may not need a set amount of highway capacity or water capacity on day one, you can't build two thirds of a road and then build the remaining third later down the line. You need it all up front.
We're engaged in a significant public sector infrastructure construction project right now with expansion of water mains and connections into the Metro Vancouver water district system. That's about $18 million. We're building a new stand-alone sewage treatment plant at a cost of $28 million. We're expanding Highway 17, which runs through to the ferry terminal in Metro Vancouver. That's about $30 million.
In terms of drainage infrastructure, Tsawwassen is very low-lying as it's right on the Strait of Georgia in the Lower Mainland. Most of the land is about half a metre above sea level, so there's a significant need to ensure that any water moving around the community is handled appropriately. That drainage infrastructure will cost about $10 million.
Of course, significant community amenities will need to be built to ensure that the place remains a great place to live: new rec centres, other facilities of that kind, park space, and whatnot. All told, that's about $110 million, which gets us to the point of how that gets financed.
We've gone about it a couple of different ways. We've developed an offsite levy regulation or development cost charge, as it is often called in other jurisdictions. The intent of that is to try to push as much of that $110 million cost off to the private sector. If the private sector requires infrastructure for growth, then they should pay that cost. However, $110 million is quite significant and you can't push all of that cost onto the private sector without jeopardizing investment in the first place. We've done what we can, but there's definitely a gap.
Certainty of title has been really important in creating the partnerships that are key for infrastructure development. On the public sector partnership side, the certainty of title from the treaty provided the Greater Vancouver Water District with the certainty that they would be able to have comparable rights to their infrastructure on Tsawwassen lands as they would have in any other municipality in the Metro Vancouver region. So Metro Vancouver will be building some water infrastructure on Tsawwassen lands. In the past, the real barrier was how they could be assured of their rights to access in order to maintain their infrastructure. A First Nation couldn't become a member of these regional districts because of issues like joint several liability, and such issues. The treaty resolved that by permitting Tsawwassen to become a member of that water district. The treaty and the land title framework have created the comfort needed to establish some of these key public sector partnerships.
In the private sector, land tenure has been key to attracting private sector financing. Recently, we partnered with Ivanhoé Cambridge, which is developing a significant commercial project on Tsawwassen land. In 2014, it was recognized as the largest single real estate investment in British Columbia valued at about $650 million. It was significant for a First Nation as well as the province. Understanding how Tsawwassen's land ownership model integrates with the provincial land title framework was key for them to be able to get things like the land title insurance they needed to ensure that their significant investment in Tsawwassen lands was not at risk and that they had comfort. Land tenure certainly helped do that.
That said, there is still a gap between what we're able to push off to the private sector and the total cost. There are opportunities that we've explored for financing. The First Nation Finance Authority, which operates under the federal Financial Management Act, has been the avenue that we've been exploring for a number of years, but there have been challenges in securing access. Treaty First Nations, self-governing Nations, don't fall under the Indian Act any longer, so there are some challenges in terms of being able to come under that piece of legislation and benefit from pooled borrowing.
In the absence of that, we've been able to secure a loan with the private sector, with Vancity Credit Union out in Vancouver. We have a credit facility of $40 million, which was a significant achievement, but the rates, while they are comparable to what you can get through pooled public sector borrowing, are a little bit higher. So there's a cost that we will incur as a result of that.
Another approach that we have tried to pursue is to work with senior levels of government to secure some targeted investment through programs like the Building Canada Fund, to secure some support. That support is critical, we've found, because the gap of about $40 million that we're trying to finance is on the margin of being too high. It certainly imposes a lot of risk on our First Nation.
We feel that those targeted investments can be really significant. The returns on that investment are large, and I touched on what those are in terms of incremental property tax, incremental public transfer tax, sales tax and income tax as well.
Thank you very much to the committee for your time. I look forward to any questions you may have.
The Chair: Thank you very much, Mr. Ward.
I'd now like to welcome members of Tsawout First Nation. We're very happy you could join us by video conference, but I would like to ask you to assist us. We're unable to read your name cards at this end, so could I ask you, please, to begin by identifying yourselves? State your name again each time you speak so that our stenographers can create an accurate transcript. I appreciate that.
Mr. Pelkey, please go ahead.
Eric Pelkey, Director of Operations, Tsawout First Nation: I'm Eric Pelkey. I'm the Director of Operations for the Tsawout First Nation.
Before I begin my presentation, to my left is Chief Harvey Underwood. Eric Pettit is on the other side of me. He is going to initiate the presentation. Beside Harvey Underwood is Gwen Underwood, our Lands Manager; Councillor Stan Sam of Tsawout First Nation; and Ron Akehurst, another engineer with WSP.
I'll turn it over to Eric Pettit first, and then I'll go to my presentation.
The Chair: Welcome. I should say it's a real good morning to you on the West Coast. Thank you very much for being here for us so early. It's very much appreciated.
Eric Pettit, Senior Project Engineer, WSP Canada Inc., Tsawout First Nation: Thank you. I'm with WSP Canada Inc., an engineering consultancy that is working with the Tsawout First Nation. We've been assisting the First Nation in the development of their infrastructure assets on the reserve, and there definitely is a significant underfunding from the Crown and from AANDC. In particular, with the presentation, we were looking at an alternative method of providing funding. The current funding flows as grants, typically, from the Government of Canada through AANDC. Because of restrictions over the last decade, it has predominantly been limited in the regions to health-related infrastructure, including potable water supply and sewage treatment, because of the definite shortages of funds. These limits have severely curtailed the growth and opportunities of many of the First Nations on the coast.
From earlier presentations that the Senate committee has heard, predominantly from Robert Scott Serson, the former deputy minister of AANDC, more than $1 billion has been reallocated from infrastructure-related funding in the last 18 years. I'm going to quote Mr. Serson from his testimony:
With so many dollars being reallocated from infrastructure funding to make up for the shortfall in monies for basic services, there are precious few funds available for those First Nations that don't have significant own- source revenues to advance economic opportunities and to build necessary infrastructure to support modern and sustainable community economies for their citizens. Adding to this challenge is the inability of many First Nations to access investment funds that are available to non-indigenous governments and corporate entities.
This funding shortfall that we're suffering forces many of the First Nations to defer and delay repairs and upgrading to their critical infrastructure, such as sewer and water systems. We get into a circle where the lack of critical infrastructure forces the First Nations to postpone development opportunities of subdivisions, which then restrict the availability of on-reserve lots for residential development for their own band members and commercial areas for economic development.
Going around in the circle, due to this lack of development opportunities, the First Nations encounter difficulties in obtaining capital project funding because AANDC is looking for the First Nations to provide significant First Nations contributions due to the shortfall of infrastructure funding. This circle comes back around again where they miss out on the capital funding.
We're looking at an alternative strategy, hopefully, that considers investment from AANDC, not just grants. In relation to that, we are looking at the opportunity for development cost charges.
Development cost charges are instituted on a provincial basis under a local government act in most of the provinces in Canada. But the Tsawout First Nation, under the First Nations Land Management Act and the First Nation taxation authority, will have the ability to create DCCs and is looking at that opportunity at this time. These monies would be collected from land developers to offset some of the infrastructure expenditures that are incurred to service the needs of new development. This helps provide a method to finance capital projects related to roads, drainage, sewers, water and parkland. The DCCs allow money to be pooled from many different developers so that the funds can be raised to conduct the necessary services in an equitable manner. The First Nation can be considered to be the coordinator of the capital program and the administrator of the funds available.
What we're looking at with the DCCs would be that the First Nation would construct the primary core infrastructure necessary for development, with the financial assistance of AANDC. Based on their particular infrastructure requirements, some of the necessary infrastructure capacity would be funded by grants, as it is servicing existing First Nation needs. The additional capacity that is generated for economic development and future growth would be funded by AANDC, and DCCs would be created to recover those costs.
In the future, as the development, growth and economic development occurs, the First Nation would collect the DCCs from the developments, which would then be returned to AANDC in accordance with their funding agreement. This return on investment to AANDC would permit them to reinvest in other First Nations.
As mentioned by some of the previous speakers, the problem of obtaining significant capital investment for major projects on a reserve is limited by the borrowing capacity of many of the reserves. Tsawout First Nation is currently looking, as a draft master plan, at development, but there are really three critical aspects that the First Nation is looking at. Sewage treatment, road access and water supply are the critical elements necessary for any economic development.
The reserve is currently transected by Highway 17 and limits access to the reserve, and they are no longer allowed to construct a grade access to access their properties, so highway access to develop these lands will be by means of a grade-separated overpass with an estimated cost in excess of $25 million. We are talking in the range of probably $30 million for this overpass.
The necessary spine of sewer, roads and water within the area for economic development is in the order of $5 million. The Tsawout First Nation is the owner of a sewage treatment plant that was originally constructed in 1972. It is showing its age and is looking at a $7 million upgrade on the treatment plant to meet the new WSER requirements, as well as hopefully to be able to provide a disinfected effluent which would allow for shellfish recovery in their traditional waters, and eventually the harvesting of traditional shellfish, which is currently restricted by the pollution from not only their own sewage treatment plant, with lack of disinfection, but the local capital regional district sewage plant, which also does not disinfect its effluent.
While they can look at investment from the private sector, they are limited because no private sector investor can come up with the $40-million-plus to be the first one in, and latecomer agreements traditionally have been non- functional because of the fixed time. So we are looking at development cost charges, DCCs, as being an opportunity for AANDC to invest in the First Nation, not just grant funding.
An example of the Tsawout First Nation initiative that we're looking at will be presented now by Chief Harvey, I believe.
Mr. Pelkey: I will be presenting on behalf of Chief Harvey Underwood. I'd like to follow up on Eric Pettit's presentation.
The Tsawout First Nation has a strategy for economic growth, self-reliance and sustainability. To provide a compelling case for B.C. and Canada participation with the Tsawout Initiative, an economic sustainability strategy through financial support for the Tsawout Crossing, an overpass connecting reserve lands to the island economy.
The Tsawout First Nation has embarked on an aggressive strategy for economic development and self-reliance, and to succeed, major community infrastructure is required.
In 2001, with the completion of the Highway 17 improvements, the Tsawout were cut off from effective access to highly developable commercial lands. The cornerstone of our community strategy is the restoration of Highway 17 access. Without this linking of our undeveloped 250 acres of community lands, no development can occur.
Tsawout is negotiating with the Province of B.C. for access to our lands to the cost of $29 million. With the Highway 17 overpass, Tsawout lands will become a major Victoria region economic and job generator for years to come.
The Tsawout main village is located 15 minutes north of Victoria on the east side of the Saanich Peninsula. The village area is accessed via Highway 17 and Mount Newton Cross Road. Our 600-acre reserve has a population of 2,000, including non-Natives, living on the reserve, of which 870 are band members.
In the 1850s, Tsawout became a signatory to the Douglas Treaty agreements signed by First Nations with the colony of Vancouver Island. There is a map attached. These agreements were intended for the continuation of our economies into the future.
Within our reserve lands there are single-family residential, modular homes, band administration and some commercial developments such as restaurants, RV parks and gas stations.
Saanichton Bay and the surrounding waters have historically been and continue to be significant to the Tsawout. The bay provides shelter from the prevailing southeast gales of winter, a year-round source of food, and plays an integral role in the Tsawout economic, social and spiritual life. For these reasons, Saanichton Bay was one of the main village sites of the Saanich people, and it is why the Tsawout First Nation is here today.
The Tsawout will achieve economic growth in a sustainable manner. Just as the land and surrounding waters have sustained the Tsawout historically, they will continue to do so into future generations.
To this end, we are on a strategic planning process to capitalize on the regional economic opportunities such as retail, lodging, marinas, RV parks and residential development. However, some economic opportunities are very evident now and Tsawout intends to capitalize on the jobs and cash flow resulting from the development.
What follows now is an overview of the first phase of our strategy, the Jesken Town Centre. Included is a map of the proposed concept master plan of the development of the Tsawout land.
The 32-acre Jesken Town Centre will feature 250,000 square feet of contemporary retail space. This project will be anchored by a combination of large-format retailers, complemented by small and mid-sized tenants. The $77 million project incorporates the best practices in planning, merchandizing, public spaces, landscaping and environmental management.
New job creation: Approximately 600 full- and part-time operational jobs, a 60/40 split, will be created, with an additional 1,000 to 1,200 work years for the town centre and the crossing.
Cash flow from the PST is estimated to be $5.6 million annually. PST paid during the construction is estimated to be $3 million. Note that while the Tsawout First Nation will receive much of the $4 million GST, it will circulate back into the regional economy. There is a solid and proven project team with participation of experienced developers. Over the 10-year development operational period, in excess of $100 million in taxation will be re-injected back into the Tsawout and B.C. governments.
The Tsawout are in negotiations with major residential developers for 1,500 residential units. The Tsawout lands have a stunning ocean-front presence. A resort hotel, campground and marina are under feasibility reviews for the beachfront. Modest business commercial and light industrial land is available on Saanich Peninsula. Market and financial research will identify these opportunities. The Tsawout have beautiful developable lands on other Gulf Islands that may have tourism and resort opportunities.
We will apply to the New Building Canada Fund for a contribution of $12 million, representing 43 per cent of the Tsawout Crossing project, costing $28.8 million. This capital cost may be lower with future product refinement.
In addition, Tsawout invites the B.C. Ministry of Transportation and Infrastructure to explore participation with the remaining $4.8 million. This does not have to be a financial contribution. All additional infrastructure servicing for the Jesken Centre is the responsibility of the Tsawout First Nation and developer sources.
This shows that the Tsawout First Nation wishes to embark on a course of economic sustainability for our Nation. What Eric Pettit has presented here is a way that AANDC can participate with the Tsawout First Nation and other First Nations in creating a fund of reinvestment in infrastructure by providing a way of circulating funds to the First Nations and then having funds returned to an AANDC fund that can be used with other First Nations. This is an example of a project that could benefit from such a plan.
Thank you.
The Chair: Thank you very much, and thanks for sending the PowerPoint ahead. It has been very useful.
Since we've just heard from Tsawout, this proposal you have developed under the First Nations Fiscal Management Act and the First Nations Land Management Act to levy DCC, which is a development cost charge, I'm wondering if that's been done elsewhere, to your knowledge?
Secondly, how is this proposal being received by AANDC? I think you're working with them on this proposal, and it would require an investment by AANDC. Can you tell us how those discussions are progressing, please?
Mr. Pettit: As far as we know, no DCCs have yet been created by a First Nation. They are done under the local government act in B.C. In fact, B.C. is one of the leaders in development cost charges. Most of the other provinces in Canada also have provisions under their local government acts for development cost charges. This is a new process, and Tsawout is on the path of developing the necessary laws.
As a whole, while we have not spoken directly with developers here relative to the First Nation development, developers in B.C. are very familiar with development cost charges and are used to paying that as they go in with their development. They are basically paying back for the critical spine infrastructure that was created.
We have a meeting actually tomorrow with AANDC to discuss this very matter, so I don't have any feedback from them at this time for you.
The Chair: Thank you very much.
Senator Dyck: My supplementary question is directed to Muskeg Lake Cree Nation. You have had an urban reserve for I think about 25 years now.
Mr. Ledoux: Pretty close.
Senator Dyck: Have you instituted anything that could be considered similar to this development cost charge?
Mr. Ledoux: I know that we pay taxes to the City of Saskatoon, but we do get rebates from our businesses. We have two gas stations that are both on reserve land, CreeWay West, CreeWay East.
As it pertains to the DCC, development cost charge, I do not believe that we have that. All I know is that we get rebates.
Senator Dyck: Could you say a little bit more about what the rebates are?
Mr. Ledoux: That would be the fuel and tobacco rebate that we get back.
Senator Dyck: It's mainly to do with tax revenues, then.
Mr. Ledoux: Roger that.
Mr. Ward: I wanted to add from Tsawwassen's perspective that we do have a DCC structure in place. We call it off- site levies, but it's the same thing as a DCC. It's a little different than the route that Tsawout is proposing, which makes a lot of sense, but it's a different legislative framework. They would be doing it under the FMA and the FNLMA, whereas we have that authority under the treaty to do that independent of those entities. I just wanted to point out that it has been done in a First Nation context and it can work, but there is a gap. Tsawout's proposal on how to address that gap is very interesting and it's important to contemplate that they are advancing.
Senator Enverga: Thank you for your presentations. We have learned a few things and gained a lot of insight.
My first question will be for Mr. Ward of Tsawwassen First Nation. Prior to the comprehensive land agreement signed in 2009, the First Nation was under the Indian Act's land management system. From your experience, what are the main differences between the land management system under the Indian Act and your comprehensive land claims? Can you please give us more details?
Mr. Ward: Certainly. There are a number of differences, and one is on how the interests in land on Tsawwassen First Nation land exist from a legal basis.
One of the most significant changes on the effective date was the transfer of land from the province and the federal government. Provincial Crown land was transferred to Tsawwassen, as well as the former reserve lands were also transferred to Tsawwassen. Those ultimately were registered on the effective date in the provincial land title office pursuant to the provincial Land Title Act of B.C.
The province amended their Land Title Act to accommodate treaty First Nation interests in land. That was a really substantive change in how our interests were perceived. People are familiar with the provincial Land Title Act in B.C. It is a very strong act and strong land title system. People can have comfort that they know the nature of the interests that exist. They know how they can secure rights, like covenants or easements. They know how secure the title is and that kind of thing. That was a real significant change.
From our perspective, integration with the provincial land title framework was a benefit, and the process to get there actually was critical. On the treaty effective date, over 6,000 interests were registered in the provincial land title office. It is a very small reserve, but it's in an urban environment, so a lot of interest existed over the lands. All of those had to be resurveyed prior to the effective date. It was a time-consuming process.
Tsawwassen, like other First Nations, had boundary issues and disputes between members, interests over the lands and those kinds of things that create uncertainty, and uncertainty, of course, is not what the private sector really wants.
The process of registering lands in the land title office is a process where you essentially are cleaning up titles. You are sitting down with individual members and resolving boundary disputes and resurveying the lands and getting clean title, so to speak. That is one significant difference that has made the land base more attractive to development.
The other is on the governance side and the ability to move very quickly under a self-governing framework and pass laws around land management in a way that gives the private sector — again, for us, it is a lot about private sector partnerships and attracting that investment. The speed with which you can move in the treaty framework versus the Indian Act governance framework is very noticeable. You can move from law development through to ultimate enactment of the law. Of course, the enactment of that law does not need ministerial approval, so the pace at which you can address issues and establish frameworks is quite significant.
I think those are two of the largest benefits from the post-treaty land management arrangement.
Senator Enverga: Has that improved your situation, or has it created more challenges?
Mr. Ward: It has very much improved it. Prior to the effective date, in Tsawwassen there wasn't a lot of land owned by the Nation or band land, so to speak. A lot of the former reserve was held by individual members with certificates of possession. However, those members weren't able to develop their lands. The regulatory frameworks that Tsawwassen had in place weren't sufficient to deal with the infrastructure deficits.
We transitioned to the post Indian Act world, and we have two commercial developments with a combined value of about $750 million. We have three industrial developments that are under agreement to lease, one of which is a partnership with Port Metro Vancouver and the Canada Border Services Agency, CBSA. We're adjacent to Delta port, so there is a container examination facility being developed on our industrial land base. Also, 42 new residential homes have been built within the first six years of the treaty. So the change and the pace of change are very significant. From my experience, we would not have been able to achieve that under the Indian Act framework.
Senator Enverga: Would you recommend comprehensive land management to other First Nations?
Mr. Ward: It's a challenging question. Every First Nation does have to think about it. Certainly we recognize that we are in an urban environment, which creates a certain set of opportunities that maybe other First Nations might not have. However, we certainly have seen the benefits of self-government. So regardless of approaches, as long as a First Nation understands their opportunities and where they want to go in a post-treaty environment, then we think treaties can be a successful way of addressing a lot of challenges for First Nations.
Senator Enverga: Could other First Nations comment on that and make the most of comprehensive land management in your areas? How would it help? What challenges would it make for you? Would you be able to comment on that? My question is addressed to everybody.
Mr. Ledoux: Could you repeat the question?
Senator Enverga: It looks like there is success with respect to the comprehensive land claims that Tsawwassen has created. What do you think about it? How is it applicable to your First Nation?
Mr. Ledoux: On our First Nation, in our urban setting, we have 35 acres of reserve land of which we have only 13 left undeveloped. In terms of own-source revenue and generating new money, it's good for us, but like anything else, it is infrastructure and capital dollars that we need for reinvestment. So it could work for us. At the same time, when we are getting revenue from our resources in the city and then bringing it back to our home community to offset lack of funding, there is not much room for economic development.
The Chair: I'll just ask a supplementary question of Mr. Ward. Senator Enverga was asking about the benefits of getting out from the Indian Act, but you did say, I believe, that opportunities for finance under the First Nations Fiscal Management Act were now not available to you because you don't fall under the Indian Act. Have you ruled out being able to access the financing opportunities from the First Nations Fiscal Management Act? Is that off the table now?
Mr. Ward: No, it's not off the table. Section 141 of the act includes a regulation-making power, which can bring treaty Nations, self-governing Nations under the act and enable participation in the FNFA pool borrowing structure. It's actually a very complex problem to figure out how a treaty Nation can integrate through this regulation-making power.
We have been working with the federal fiscal institutions — the First Nations Tax Commission, the First Nations Financial Management Board and the First Nations Finance Authority — as well as AANDC and B.C., in our case, to try to figure out a way that we can make it work.
It is fair to say that it is more complicated under treaty in part because of the nature of self-government. One of the provisions of the treaty, while it provides jurisdiction to exercise property tax jurisdiction, we have to exercise that jurisdiction through a shared agreement with the province.
The First Nations Finance Authority relies on securitization of property tax revenues to pay for public sector infrastructure. So what we are trying to do is marry a federal structure with a structure that's exercised through agreement with the province, and how would the First Nations Financial Management Board, in the event of a default, be able to come in and exercise federal jurisdiction in this sphere of provincial and First Nation jurisdiction.
It is complicated. We feel like there is a solution out there and have been working with the institutions and federal and provincial governments to advance that solution. So it's not off the table, but it is complicated.
The Chair: Thank you very much.
Senator Tannas: Thank you folks for being here today. I've got a whole bunch of questions, but I'm going to focus for a minute on Muskeg Lake Cree Nation and the question around the development of residential properties.
Tsawout First Nation mentioned that 1,500 houses in a residential community are on the drawing board. What would be the ownership structure for those people? Is it a lease? Can you describe that for me?
Mr. Pelkey: The 1,500 units that we are talking about are in a residential development. We're talking about a possible mixture of band and long-term lease housing to support the economy of Tsawout First Nation.
Senator Tannas: Thank you. That answers that question.
To the folks from Muskeg Lake Cree Nation: Your 35 acres in the urban reserve, is any of that for residential development either for band members or for people in Saskatoon? If not, has there been any thought to incorporate that into your remaining 13 acres.
Mr. Ledoux: Negative, senator. We have been zoned as industrial.
To speak of our other successes, we have bought property and gone through Saskatchewan Housing Corporation. We set up 10 rental properties in the Town of Blaine Lake. We have an operating agreement that we have to follow for 10 years, but we are looking at home ownership after the fact. There is that success.
We have two lakes that are being developed. We've got our own land code and we are looking for long-term leases under the First Nations Land Management Act as well.
Senator Tannas: So your members currently can effectively get ownership of their own place, build their own home and so on; is that right?
Mr. Ledoux: Yes, that's the importance of what I brought to the table earlier about the universal shelter allowance, which would allow us to collect the revenue. It would be cheaper. I could give them the house for $1 if we had a universal shelter allowance. I could take everybody living in a section 95 house, take a universal shelter allowance on my band-owned units and create sustainability. That's the word I'm looking for.
Senator Tannas: With your indulgence, you mentioned up front — and this is something we've heard before in various sections of the country — that it's your belief that there is a treaty right to housing. You cited the Royal Proclamation and the two iterations of our Constitution, but you didn't name a treaty. What treaty is it?
Mr. Ledoux: We are under Treaty 6.
Senator Tannas: But is it Treaty 6 where this position flows from?
Mr. Ledoux: Yes, I actually believe it flows from Treaty 4, but it's like anything else; we have the "medicine chest'' in Treaty 6 and it flows to other numbered treaties as well.
Senator Tannas: I just wanted to be clear. In your view, it's not the Constitution or the Royal Proclamation. It's your specific treaty right.
Mr. Ledoux: Roger that.
Senator Tannas: Thank you very much.
Senator Lovelace Nicholas: I've been on this committee for 10 years. In all the hearings, we hear that it is always lack of funding. Because of lack of funding, the communities are poor and they can't meet the needs of their community members. What would change this attitude of government about lack of funding? How can we change this problem?
The Chair: Were you directing that question to anyone?
Senator Lovelace Nicholas: To Tsawwassen and whoever else wants to answer.
Mr. Ward: It is a challenge. I don't know if I have a good answer for the challenges on a national scale because they are so diverse depending on location, of course. Potentially, especially those First Nations that are on the cusp of being able to develop economically and become more self-sufficient, there is often a bit of the chicken and egg problem. It's related to infrastructure, so if you can get over that hump, you can then start to collect property taxes, generate lease or own-source revenues from the lands, or other kinds of revenue. There needs to be an up-front targeted investment, whether that's the approach that Tsawout talked about. This is only specific to those Nations who are closer to economic development than maybe some of the others, but that sounds like an interesting option.
When trying to address our infrastructure gap, we applied to P3 Canada, for example. The challenge, despite the fact that our total infrastructure gap is $110 million, is that you have to apply for one project. One project was $30 million, but that was too small for the scope of what they generally get involved in and, because there's not a public sector financing component that you can displace with private sector financing, it created this challenge. Maybe there are opportunities to tweak existing programs that fit better with First Nations and can leverage private sector investment for a targeted, up-front investment to get First Nations over the hump and to a point where they can develop own-source revenue and become self-sufficient. That certainly wouldn't help all First Nations, but it would help a number of them that are a little more prepared for economic development.
Mr. Pettit: I'll add to what Mr. Ward said. It's a critical investment in critical infrastructure, and timing is the key component. Many of these projects get stalled because the financial process through AANDC to obtain funds for capital infrastructure is so restrictive that private developers can't wait and will go to other locations where land is a surety and timing is more financially viable for them.
It's critical that the process be such that the investment can construct these primary capital infrastructure assets prior to the developers coming in. In the case of the Tsawout First Nation with the overpass off the highway, the capacity and the sewage treatment plant, once that infrastructure is in place, a developer can come in and pay back to AANDC those funds that are under the development cost charges, DCCs. They will have the surety that they're not going to wait for five years for funding and that the projects are already in place.
Senator Lovelace Nicholas: All this is good to hear. Because of your location, you can become self-sufficient, but communities in remote areas are very poor and there's no room to expand or to partner up with other companies in such places. With the lack of funding, remote communities have a lot of problems because of their location. What would you suggest for them?
Mr. Pelkey: What we're talking about is not just DCCs, as there still remains the opportunity for grants to communities that don't have the possibility for economic growth. The reinvestment fund that we're talking about is not strictly a reinvestment fund because it creates the opportunity for grants under that system. It would be a combination of grants and DCCs so that the money can continue to be circulated back through AANDC to create the opportunity to fund those First Nations that don't have any economic opportunities.
Senator Dyck: That is an interesting suggestion, Mr. Pelkey, that grants would be included somehow. I wonder if you could explain how that system would be set up so that First Nations in remote areas could apparently have greater access to money because the department would have more grant money available. Is that what you're saying?
Mr. Pelkey: Yes, that is what we're saying. There still remains the opportunity for grants under the AANDC system and the DCCs create an opportunity to regenerate funds back into that fund, which would create more opportunities for grants for First Nations without any economic opportunities. It's still something under discussion.
The Chair: Tsawout has meetings going forward with AANDC on the DCC concept. Chief Underwood and colleagues, I wonder if it would be possible for our committee to follow up with you after this meeting to be updated on how those talks are progressing. We'd like to keep in touch with you on that, if it's agreed.
Harvey Underwood, Chief, Tsawout First Nation: Yes, we would like you to follow up on that. We have a meeting with John Dwyer from AANDC tomorrow morning, and I believe Eric has a meeting with Indian Affairs also tomorrow morning on a different matter regarding development. I would appreciate it if you would follow up on that.
The Chair: We will do so.
Senator Dyck: My first question is to Tsawout First Nation. You talked about the creation of a revolving loan fund within the Department of Aboriginal Affairs. Could you expand on that idea a little and tell us what would be involved and whether the revolving loan fund would be available to all First Nations regardless of their land management system?
Mr. Pettit: I think the premise is that we recognize that the federal government has budgets and is trying to maintain financial stability with the funds that are flowing out to the First Nations. What we're looking at is to, by investing rather than granting, if we sat there and said we had a billion dollars to go out this year, instead of giving away a billion in a grant structure, look at $700 million going out in grants and $300 million going out to support DCCs. That $300 million will then start to flow back to the government as development occurs. So what we're doing is actually reducing the demand for grants for those lands that have the ability so that those First Nations that do not have economic opportunity have more grant funds available to them.
Senator Dyck: My second question is a more general question that can be answered by any of our witnesses this morning. It is to do with what are called Indian monies. We heard, I think it was last week, that retained within the Consolidated Revenue Fund are monies that are received from revenues that individual First Nations had generated. There's a pool of money. I don't know how big it is. It's increasing every year, yet it doesn't seem that anyone has access to it. I'm wondering if any of the witnesses here this morning have any knowledge of how they could get at that money to increase their ability to develop their economies? Do they have any information that could be useful about how to access that money for borrowing?
Mr. Ledoux: I believe that the Indian monies that we have in our province are basically from CEOP. I've never heard of the term "Indian monies,'' but if we're looking for money to borrow or to move forward with a project, we usually do a CEOP application, either that or we apply back to our CDCs, which are casino development corporations, under SIGA.
The Chair: Could you expand on the CEOP?
Mr. Ledoux: That's the Community Economic Opportunities Program.
Senator Dyck: Is that a provincial program?
Mr. Ledoux: I believe it's federal.
Senator Dyck: Federal?
Mr. Ledoux: Yes.
Senator Dyck: And the other was casino money.
Mr. Ledoux: Yes, CDCs. I believe that the breakdown in Saskatchewan is that 50 per cent stays in SIGA for operations, salaries, et cetera. Twenty-five per cent goes back to the province, and 25 per cent goes back to the CDCs, which is given out to First Nations that are part of that CDC on a per capita basis.
Mr. Ward: I'm not familiar with the term "Indian monies'' and how that might exist in Tsawwassen.
On the question of own-source revenue and how that can be used to secure financing, when we went to get the private sector financing that we had to get, we showed our whole financial plan, which included an illustration of projected own-source revenue streams. Own-source revenue for Tsawwassen — but that's specific to Tsawwassen — was helpful in trying to secure financing.
Senator Dyck: Chief Underwood, do you have any comments with regard to Indian monies, any information?
Mr. Underwood: I've never heard of it in this part of the world here.
Senator Dyck: Thank you.
I think that's it for my questions. All the others I had have already been asked.
Senator Raine: Thank you very much. It's very interesting to hear from three very different First Nations that are all facing a lot of challenges with the infrastructure gap.
I appreciate the information you've already given us. I'm just curious when you talk about a chicken and an egg situation when you're getting started into economic development of First Nation lands. What was your experience in doing your master plan, your development plan? What resources are available through AANDC for the support of developing a good plan? If you don't have a good plan, you can spin a lot of wheels and go sideways quite quickly. I'm really unclear as to what kind of resourcing is available for planning in the beginning. If all three could answer, I'd really appreciate that.
Mr. Ward: Thank you for the question. We certainly agree that good planning is critical to understand the infrastructure that's required, but there is a gap. From our perspective, we've experienced a gap in funding to actually fund those comprehensive plans that you would expect to see in a municipal setting.
We passed a land use plan that became effective on the effective date, and that started at a high level to identify land uses in various areas of the Tsawwassen lands: industrial here, residential here, commercial here, agriculture there. This was the first step.
From there, there's more detailed planning — rainwater management plans, detailed neighbourhood plans, industrial lands master plans, which are expensive. Those all took place in the post-treaty environment. We were able to get some funding for the rainwater management plan through the First Nation Infrastructure Fund, but that was it.
What we have used to do that planning work to get us to the point where we can then get over this hump is to rely on what's called, in our context, time-limited treaty implementation funds. They weren't really intended for this purpose, but we've had to draw down on that to be able to set the table for economic development.
Under our fiscal financing arrangement, the transfer funds that we receive that are specific to lands and self- government are approximately $1 million annually. Our costs for lands management and development are closer to $5 million. There's about a $4 million gap in terms of funding and actuals.
We had to look at it and say, "Can we handle that gap and get to a point where we can attract that own-source revenue to move forward and deliver on that vision that the community had?'' That vision was the whole reason for entering into the treaty. The leadership of Tsawwassen had to make that call, and we hope to be able to execute on it.
But there certainly was a gap in terms of support. We were able to use this treaty implementation fund that was stand-alone to plug that gap. That wasn't the intent of the fund when it was set up, but that was just the fiscal reality we found ourselves in.
Senator Raine: Thank you.
Mr. Ledoux: In terms of funding from AANDC, we get a five-year capital plan. Like I mentioned earlier, we got the water treatment in year one, the satellite station in year two. In year four, we have the lagoon expansion, et cetera, and then we apply for major capital again. We are funded by AANDC to do up the community plan, and we follow that in terms of what's going to happen on reserve.
When it comes to off-reserve dollars, we move as the revenue flows from our businesses to be able to step ahead and create opportunity.
Senator Raine: Do you have a master plan for the development of the reserve and the urban reserve?
Mr. Ledoux: Absolutely.
Senator Raine: And that was funded by your own sources?
Mr. Ledoux: For off-reserve, that was funded through our own-source revenue. On-reserve was funded by AANDC.
Senator Raine: So there are planning dollars available from AANDC.
Mr. Ledoux: Yes, and we usually do that through our tribal council. We're a member of the seven-Nation tribal council, the Saskatoon Tribal Council. Their technicians come out, and they are paid on our behalf from AANDC.
Senator Raine: Are they doing actual land use planning or are they just doing infrastructure needs planning?
Mr. Ledoux: No, they do both. For us, for capital planning, it's based on what we can provide. We know that we're getting a transfer station. It's a $600,000, one-time hit from AANDC, but we know we're going to need probably $1.6 million, so we have to fill that gap.
Senator Raine: So that's more in terms of your infrastructure needs capital planning.
Mr. Ledoux: Roger that.
Senator Raine: But do you have an ability to plan so that the actual development of your community makes sense on a long-term basis with your people's vision?
Mr. Ledoux: Yes, absolutely.
Senator Raine: Thanks.
The Chair: Senator Raine, were you looking at Tsawout?
Senator Raine: Yes, please.
The Chair: Mr. Pelkey.
Mr. Pelkey: We were able to access $190,000 through AANDC to develop what we call the Tsawout Initiative, which we described earlier. This was developed under the flagship of AANDC of economic opportunities on reserve lands. They funded us to develop this concept master plan to bring in engineers, such as we have here, and other experts with regard to infrastructure needs on the reserve. We were able to access some money from AANDC and combine it with our own-source revenues to develop this concept master plan for infrastructure development on our reserve.
We have other sources. I'll turn it over to Gwen Underwood to explain that.
Gwen Underwood, Lands Manager, Tsawout First Nation: We have access to the First Nations Market Housing Fund. Any First Nation in Canada can apply to that fund. They're currently funding us for a land use plan, which we get input on from our community. Any First Nation in Canada can apply to that First Nations Market Housing Fund to get support and dollars for consultants, like land use planners, or lawyers for developing laws.
We're under the First Nations Land Management Act. We don't have a turnkey operation when you get into the land code, so you basically use your own-source funding to develop your laws.
The First Nations Market Housing Fund has allowed us to accelerate that process a little bit because they're providing us with some funds for the land use planning and developing some laws along with that.
Senator Raine: Great. Thank you very much.
The Chair: Ms. Underwood, would you be able to comment on the main differences between being under the First Nations land management regime and the Indian Act land management system?
Ms. Underwood: I guess the main difference for us is we have local government authority here. The council can make the final decision. It's a lot more expedient that way. We actually come back to this gap again, which Colin Ward was talking about, the need for an influx of capital infrastructure funds. We're sort of on the cusp right now of becoming self-sustaining such that we require that big cash flow up front to fund our infrastructure. Once we actually get under way, I think our First Nation will be more able to stand on our own two feet and provide jobs to our community.
I think the main difference is that we have local decision making, and it's a lot more expedient.
The Chair: Thank you very much.
Senator Moore: I want to thank all the witnesses for being here this morning. My first question is for Mr. Ledoux.
In your presentation, you said that you receive nothing for any of your section 95 loans that you've paid out. How many houses are involved in that?
Mr. Ledoux: Our housing stock is 136, of which 36 are CMHC. So there are 100 band-owned homes that we receive no shelter allowance for.
Senator Moore: You say other First Nations across Canada receive a universal shelter allowance, and you ask why. How did that come about? Was this by way of agreement? Are you the only one in Canada not getting a shelter allowance? What's the situation there?
Mr. Ledoux: The implication there, senator, is that just the Prairie provinces that are funded under the shelter allowance. I couldn't go back to the agreement, and I can't tell you why.
Senator Moore: I guess you probably have gone to the department and made your case.
Mr. Ledoux: Absolutely.
Senator Moore: And what was the answer?
Mr. Ledoux: We're in negotiations. We try not to overstep our boundaries in terms of jurisdiction. We have what's called the Federation of Saskatchewan Indian Nations, which is a treaty organization that moves on these specific issues.
Senator Moore: Is that organization the entity that's pushing the case with the department?
Mr. Ledoux: Yes. I believe Kevin McLeod spoke here as the director of housing from FSIN. That was his major push, universal shelter allowance.
Senator Moore: Mr. Ward, you're the director of public services. How long have you been at this job and what are your qualifications? What's your background? You sound pretty informed.
Mr. Ward: Thank you. I've been with Tsawwassen since 2008, so a year prior to the treaty coming into effect. When I started there, I was helping to develop the policy content for Tsawwassen's legal framework that it enacted on the treaty effective date. My background is in public policy. I have a master's in public policy from Simon Fraser University.
Senator Moore: Thank you.
In your remarks, you talk about the P3 Canada Fund and that the program does not seem to fit First Nations' needs. The Tsawwassen First Nation applied for support for its new sewage treatment plant but was denied support, in part because the $30 million cost was too small to meet their criteria in the fund. But you've outlined in very good detail the other infrastructure needs for the Tsawwassen First Nation people for the development to proceed. Could you not add some of those items in with the sewage treatment project to get to the number that would be appealing to the P3 formula so you could get funding? Have you tried that?
Mr. Ward: No. Our understanding was you had to apply for a discrete project, so we couldn't wrap up two, three or four different projects together in the application. That was our understanding, anyway. The short answer to your question is no.
Senator Moore: I expect that would be one of your recommendations, would it, to our committee?
Mr. Ward: Yes, there could be some tweaks made.
The other challenge we saw in trying to understand the P3 process is that generally, as part of this process, you have to do a business case analysis to show value for money in the P3 route versus the non-P3 route. That works for provincial and municipal governments because they're swapping out public financing for private financing and then transferring the risk to the private sector. If the quantification of the risk is higher than the cost of the increased financing charges, then it works from P3's perspective and they'll fund it.
The challenge for First Nations is often you're not in a world where you can substitute out public sector financing because you're not able to get it in the first place.
Senator Moore: That's right.
Mr. Ward: There are two challenges with the funds as it pertains to First Nations. One prescription could be, as you say, looking at the broader scope of all infrastructure that a First Nation has to do to encourage development and bundling more than one project. That could be one prescription, but I'm not sure exactly how the value for money calculations, which is a criteria of that P3 fund, fits in the First Nation context.
Senator Moore: Maybe all the projects wouldn't work, but I bet some would.
Mr. Ward: Some may work, yes.
Senator Moore: I have one more question for the Tsawout people. With regard to the proposal for development, which I think is very exciting, there is a need for road access.
Last October, we visited the Tsartlip First Nation in Saanich, and they had a similar situation. Colleagues who were there with us will recall that they needed a road access so they could proceed with a good development plan. Have you thought about joining forces in trying to get the funding for that through P3 Canada or some other funding agency? You're both being stymied by the same type of obstacle. If you could put your heads together or your application together, would you not be better off? Are you aware of their situation, and could you do that or have you thought about doing that?
Ron Akehurst, General Manager, WSP Canada Inc., Tsawout First Nation: I do most of the engineering for Tsartlip First Nation as well as Tsawout. I know that they have hired a planner to look at their community and how they would access various parts of the community, but I'm not aware of any of the specifics of that application.
Now that you mention it, I'm sure that we could get together on that. I can talk to Tsartlip any time about that and see if there is any commonality that we can call up to try to get these projects going.
Senator Moore: I have been listening to your presentation this morning and thinking back to that visit. It just seems to me it would be worth a look.
Anyway, thank you very much.
The Chair: Thank you, Mr. Akehurst.
Senator Sibbeston: As I sit here listening and seeing the bands that are before us, it's obvious that many of you are very developed and advanced. You are certainly not like a typical band up in the North or in the northern parts of the province. Particularly the Tsawwassen, you are in a strategic location along the shore in Vancouver, so your development and your future lies in developing that. You are unique in that regard.
As you develop and as you accomplish your goals, would you say that more and more your dependence on the federal government and AANDC becomes less, and you are more into the private enterprise, private industry, private business world to meet your long-term goals?
Mr. Ward: Yes, I think that's a fair comment. I know that it is a strong location from a strategic perspective today. There are challenges that come with it from the development that has happened around the First Nation, which has impacted traditional activities. I know many members, including the chief, remark on how their ancestors chose that location wisely.
We do see reliance on federal transfers for supporting core programs and services declining over time, and that is a goal of the Nation. The community does want to be self-sufficient because then it opens up more flexibility to make changes to programs such as income assistance or increased education programming to its members and really invest in the social capital of the membership and over time hopefully address what currently exists, which is a socio-economic gap between members and non-members. In the long term, given the realities of funding constraints that exist and challenges in getting funding transfers to meet needs, our approach is strategically to try to use private investment to address those needs in the future.
Senator Beyak: Thank you very much for your presentations, gentlemen. I wonder in these last two projects if there has been any discussion with the B.C. government about providing the overpasses. It would seem to me that that would be a provincial government job on a major highway like that.
Mr. Ward: I will let Tsawout speak to the overpass. We also have highway improvements that are provincial government. We have had conversations around the provincial government funding some portion of the highways. However, their perspective has been that those improvements wouldn't be necessary if Tsawwassen wasn't driving the need for it. So we are improving their highway currently. I imagine that the others are in the same position.
We have had conversation through the New Building Canada Fund, trying to work with both the province and the federal government to support at least one of these many infrastructure projects. Specifically for us, the one we have tried to work in partnership with the province and federal government on is our water main expansion and integration into the system there. We are trying to work collaboratively with the province.
Senator Beyak: Thank you very much.
The Chair: Did Tsawout wish to make a comment on that?
Ms. Underwood: We have been working with the province for over 50 years trying to get funding for that overpass. More recently, our counsellor Allan Claxton met with the province, along with some of our consultants, and presented the Tsawout Initiative that you have in front of you.
We are still in talks right now with the province, and we still feel that they need to come to the table because a promise was made to the Tsawout First Nation when they went through our reserve that they would be providing us access. We feel that we have a strong development plan that could support that overpass, or what they call an underpass, I guess. We are still in talks with the province right now.
Senator Beyak: Thank you very much.
Senator Enverga: From what I've heard today, all of you have big plans for your First Nations. My question is more general question.
As you develop your First Nation lands and become self-sufficient in the next few years, you also know that there are a lot of First Nations that have difficulties because of their geographic location. If I may ask, do you think it's fair? Let's say that your First Nation is much improved or self-reliant. Would it be fair to maybe channel the funding more to the poor First Nations or the ones who need it the most? Would it be fair, do you think, for everybody?
Mr. Ward: To a large degree, currently, we stated that that's the framework, particularly as it pertains to infrastructure because the focus is on health and safety, and generally the health and safety priority issues exist in those poorer communities. We have a perspective, particularly as it relates to infrastructure funding, that that is what exists currently, in our view.
It's a challenging question because statutory responsibilities still exist, but, generally, Tsawwassen is looking to move away from reliance on those federal transfers. Federal transfers will decline over time through own-source revenue clawbacks under an own-source revenue agreement. When those monies come back, they come back to AANDC, and they can reallocate those dollars elsewhere. The structure contemplates that taking place.
Mr. Ledoux: As far as it goes for the FTA dollars, I don't think Muskeg Lake Cree Nation could ever get away from that transfer. For example, reserves that are potash rich or oil rich have a real, true source of revenue coming in. Based upon the size of our band and the needs, there is absolutely no way that we can ever get away and be self-sustainable.
Senator Enverga: But would it be fair if First Nations give away grants to poorer First Nations?
Mr. Ledoux: One of the sore spots I have in my life is, straight across the board, the NRTA under which this government transferred all our natural resources to the province. So with potash sharing or at the RMs, they have way more access to more funds and a sustainable future, but at the same time they have to rely on those dollars. We don't get anything. The only revenue we get is from this department.
Senator Enverga: How about the Tsawout First Nation?
Mr. Pelkey: We're looking at trying to remove ourselves from the equation by economic sustainability within our community. We feel that if there is more economic opportunity for our First Nation to participate in the economy, it really removes our First Nation from the continuous need of funds being injected by AANDC. If we are able to create the economic infrastructure within our community to be self-sustaining, then we actually remove ourselves from the equation of reliance on AANDC funding for everything. That is our goal. I know that's not the same as many First Nations in Canada, but I think that the ones that have that opportunity should have the opportunity to pursue it in order to lessen the reliance on AANDC funding for all of our infrastructure needs.
Senator Tannas: Mr. Ward, in the property development that you're doing, everything that gets handed over or sold is fee simple; is that right?
Mr. Ward: No, and that's an important point to clarify. By the Tsawwassen government's own volition, we have chosen to restrict the transferability of the fee simple interest, so it will be a leasehold economy as well.
The Ivanhoé Cambridge mall, for example, is a 99-year leasehold interest that they have purchased and are willing to invest a significant amount of money against, so we've seen very little resistance from the market to that.
Our membership was quite clear that even though the jurisdiction runs with the land and if a non-member happened to owned fee simple, the jurisdiction would still run with the land. They wanted to ensure that as the development took place, the land was still owned by either the Nation or by an individual member. There was integrity to the land base in that sense.
Senator Tannas: Very interesting. Thank you, I'm glad I asked that.
For the folks representing Muskeg Lake Cree Nation, can you tell us about the urban reserve? How did it come about? Why did it come about?
Mr. Ledoux: The urban reserve came about because of the treaty land entitlement of sections of land that we never surrendered. The reserve was a lot bigger, and the federal government gave us a one-time payout of $6.8 million, I think. We took some of that money and bought land within the city of Saskatoon and went through the process of making it an urban First Nation.
Senator Tannas: What was the thinking behind that decision? What was the plan for that land?
Mr. Ledoux: I think I was about 14 years old, back in the day. I couldn't tell you. I could tell you that it was a great move on behalf of our leadership to think that far ahead because now we are starting to see fruition from it.
The land was always zoned industrial. A lot of First Nations are following our model in Saskatchewan, buying up land in and around the cities and following our plan. It's a great revenue maker; it's a good thing. I can't speak to what the thought process was behind it.
Senator Tannas: What order of magnitude of own-source revenue would be coming from those lands today?
Mr. Ledoux: We do have our own land code as well under the First Nations Land Management Act, and we have fee-for-service. It's more or less business offices, and we're actually in the process of building a new office space. So everything that we have, we have a waiting list for. The majority of our revenue comes from that, and we have other TLE lands in and around farmland.
From our gas stations, we pull in about $1.2 million each, and we reinvest the majority of everything into developing the rest of the land. But we take back a lot of that revenue to the home community to offset, because the biggest employer is the band. We have 130 positions out there.
The Chair: Under the First Nations Fiscal Management Act, do you have the option in Muskeg Lake of levying property taxes?
Mr. Ledoux: Yes, we do.
The Chair: Can you describe what decisions you have taken in that connection?
Mr. Ledoux: I couldn't speak to that. We do have a lands guy, but he was away at a conference before we came down here, so I was not able to get the information on that.
The Chair: Maybe you could kindly let the committee know whether you have a property tax regime. That would be appreciated.
Mr. Ledoux: Okay.
Senator Raine: I have a supplementary question for Mr. Ward. When you got self-government and you put in your land title system, how did it work with the CP holders? Are they restricted in any way of selling their now fee simple land?
Mr. Ward: Yes, the CP interests were replaced with what is called "Tsawwassen fee simple interest,'' and there is a restriction. That Tsawwassen fee simple interest is registered in the provincial land title office, but the state of title certificate that a Tsawwassen member holds says that that member holds this land in fee simple, and it then says subject to Tsawwassen First Nation laws. There is a notation on title that links to the Land Title Act of B.C. There is a provision in Schedule 1 of the Land Title Act of B.C. where if a First Nation elects to restrict transferability, there is a requirement to have a certificate of transfer that's signed by the First Nation which confirms transferability of the transferee. The land title office will not register a transaction of Tsawwassen lands unless it's accompanied by a certificate of transfer. It's actually quite an elegant and efficient way of enforcing the restriction on the transferability.
We have this check-in role where if there is a transfer of fee simple, they need to come to us. We confirm their membership or eligibility under our law, and we sign off on it, provide that to the land title office and then they can complete the transaction.
Senator Raine: Through that mechanism, then, the CP lands are not being sold to non-members of Tsawwassen?
Mr. Ward: They are not. While they are not entitled to sell the fee simple to the open mark market; there's a restricted market for the fee simple. Pursuant to our laws, they are entitled to lease up to a 99-year term with no approvals required from Tsawwassen First Nation or consent from B.C. or Canada.
That decision to remove community approvals on an individual member leasing was a policy choice of the Tsawwassen government and has been important for encouraging their own economic development with their lands.
Senator Raine: I'm sure you're familiar with Manny Jules's proposal for fee simple. In a way, this is a similar regime that's in place.
Mr. Ward: There are a lot of similarities. Our perspective on that proposal is that land tenure and fee simple ownership are one piece. The other side that's equally important is the ability to have the jurisdiction as well, and we would certainly be interested in what that proposal looks like. We're sort of past that point, but the jurisdiction is what enabled Tsawwassen to say, "We want the fee simple. We want to own the lands, but we don't want it to be transferred externally. We want to restrict it.'' They had the jurisdiction to make that decision. Jurisdiction was important from a community buy-in perspective to the whole treaty process, the ability to make those choices.
I don't know the details of that FNPOI, First Nations Property Ownership Initiative, but one of the things we benefited from was integration with an established land title framework. The province recognizing First Nation title and fee simple was very significant. We realized immediate benefits with that arrangement.
If you are setting up a separate land title system that cuts across a pan-national system, it might take a bit of time to develop investor confidence that this title system is in fact credible. You can rely on the interests registered there and invest against those interests. Those kinds of things might take time.
From our perspective, we realize it may not be popular with a lot of First Nations to integrate in with the provincial framework, but that certainly has been beneficial to us.
Senator Dyck: I want to follow up on something that Mr. Ledoux said when he was answering a question from Senator Enverga. He was talking about own-source revenue and that the money transferred to First Nations from the federal government is somewhat equivalent to resource revenue sharing. I'm wondering if anyone has looked at the equivalency of that in terms of dollar value and whether or not you have considered pitching the idea that if you were given a share of resource revenues, then that would replace federal transfer agreements.
Mr. Ledoux: We're definitely looking at it. Again, that speaks to a treaty issue, which is something that would be under the FSIN's jurisdiction.
When it comes to own-source revenue, I'm not sure which formula that the department uses to be able to come down and tell us, "This is how much money you're going to get this year.'' In terms of that, we have a soft number here. I think we get about $6.2 million from the federal government every year, but our actuals are $10.5 million. We actually bring in about $4 million of own-source revenue from outside projects.
Senator Dyck: I know there is an oil and gas act. I don't know the exact title or even necessarily what it does, but I'm wondering if you have looked at whether under that act you are able to access some of the resources from oil and gas development on your own land or even on provincial land?
Mr. Ledoux: We do not have any oil or gas caches within our own lands. I don't know if we are looking to buy more shortfall acres. I know that we have a lot of money to buy more land. I believe that we were looking in the Swift Current area to purchase land just for that purpose, but it's something that has to be strategic.
We talked here, and Colin spoke to taking it out of the membership's hands. Everything we do, we have to go through our membership first before we make purchases like that. We are very democratic and open that way to make sure we are meeting the needs of our community.
The Chair: Hearing no more questions, I would like to sincerely thank all of you. This has been a most informative panel for us, and we really appreciate the effort you have put into your presentations.
I'd like to thank you all on behalf of the committee, and especially to Chief Underwood and his team for getting up so early this morning to join us. It has been very valuable.
(The committee adjourned.)