Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 44 - Evidence - October 23, 2018
OTTAWA, Tuesday, October 23, 2018
The Standing Senate Committee on Aboriginal Peoples met this day at 9 a.m. to study the new relationship between Canada and First Nations, Inuit and Métis peoples.
Senator Lillian Eva Dyck (Chair) in the chair.
[English]
The Chair: Good morning. Before we begin this meeting, we have some documents in English only that I would like permission from the committee to circulate. Is it agreed?
Hon. Senators: Agreed.
The Chair: They may be circulated, then.
Good morning; tansi. 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 listening via the Web. I would like to acknowledge for the sake of reconciliation that we are meeting on the traditional unceded lands of the Algonquin peoples.
My name is Lillian Dyck, I am from Saskatchewan, and I have the privilege and honour of chairing this committee.
Today we continue our study on what a new relationship between the government and First Nations, Inuit and Metis peoples of Canada could look like. We continue looking forward at the principles of a new relationship.
I will now invite fellow senators to introduce themselves, starting on my right.
Senator Tannas: Scott Tannas from Alberta.
Senator Doyle: Norman Doyle, Newfoundland and Labrador.
Senator Patterson: Dennis Patterson, Nunavut.
Senator McCallum: Mary Jane McCallum, Manitoba.
Senator Christmas: Dan Christmas, Nova Scotia.
Senator Coyle: Mary Coyle, Nova Scotia.
Senator Pate: Kim Pate, Ontario.
The Chair: Thank you, senators.
We now return our attention to our study. We have with us this morning — and we’re very excited to hear from them — from the First Nations Financial Management Board, Mr. Harold Calla, Executive Chair; Dana Soonias, Member of the Board of Directors; and Mark Podlasly, Director of Governance. The floor is yours. I believe, Mr. Calla, you will be delivering the remarks.
Harold Calla, Executive Chair, First Nations Financial Management Board: Good morning, senators. It’s always a pleasure to be here. Thank you for the opportunity and the privilege of appearing. I too want to acknowledge that we are on the Algonquin traditional territory and thank them for allowing us to conduct our business in their territory.
As you identified, I’m joined here today by Mr. Dana Soonias, Member of the Board of the First Nations Financial Management Board, and Mr. Mark Podlasly, Director of Governance for the Financial Management Board. They were both involved in the report on governance that we prepared, which you all have received a copy of. They will be assisting in the presentation of the report and responding to your questions.
We are here today to offer some thoughts you might consider as you write your report on what a new relationship between Canada and First Nations, Inuit and Metis might include.
Over time, there have been many studies and attempts to consider this relationship. The Royal Commission on Aboriginal Peoples, the Truth and Reconciliation Commission, and the United Nations Declaration on the Rights of Indigenous People have, I believe, provided the framework for the conversation and identified the principles and topics that need to be considered.
The real question is this: Are the parties — the Crown, as represented by the federal and provincial governments, and Indigenous people and their governments — prepared to cross the threshold for transformative change as outlined in RCAP, TRC and UNDRIP principles and recommendations? I think that bears repeating. Are we prepared to cross that threshold? If we are, then we must reach a jurisdictional sharing arrangement that recognizes, rather than extinguishes, Aboriginal and treaty rights.
At this time, the government has clearly stated their desire to begin that process. I will say to this committee — and I will say it again, because I have said it often — that these matters are too important to be caught up in partisan politics. My hope is that, as we approach the federal election, all parties can support this opportunity and ensure that we are not stalled for two years while we wait for the coming election and then gear up once Canadians elect a government.
Implementation of the principles of recognition and reconciliation will strengthen the federation as the incremental transition from the status quo to a new relationship takes hold. This initiative will impact all Canadians. It will instill confidence to invest in our economy and will enhance the world’s perception of Canada on many levels.
We also need to recognize that our Indigenous communities are not all the same. Our differences should not be seized upon as a reason to avoid the exploration of a new relationship.
A new relationship is not going to happen overnight. However, if there is going to be transformative change, Canada and the provinces will need to embrace the concepts of sharing jurisdiction and making room at the fiscal table for Indigenous governments. We must determine where exclusive jurisdiction exists and where there is a shared jurisdiction in decision-making, and we must consider when and how differences are recognized and resolved. Investments will be required to allow Indigenous governments the capacity that is needed to engage on a level playing field with the federal and provincial governments.
What we have learned since 2005 with the passage of the First Nations Fiscal Management Act is that Indigenous-led and -implemented initiatives are not only possible, but they’re very successful. Many of you are aware that the government announced last December the opportunity for 10-year grants versus annual funding agreements. I can tell you that 252 First Nations across this country submitted expressions of interest; 176 of those have provided the Financial Management Board with five years of financial statements. We have reviewed 167 of those, and 152 are meeting the financial performance thresholds. That’s a tremendous success, so the capacity that we provide in the engagement with First Nation institutions is, I think, a fundamental reason why we’re enjoying this success.
Investments will be required to allow Indigenous governments the capacity that is needed to engage on a level playing field with federal and provincial governments. I want to repeat that.
The First Nations Fiscal Management Act, the First Nations Land Management Act and the First Nations Commercial and Industrial Development Act were optional approaches for those Indigenous communities who opted to use the tools to move out from under the Indian Act on a sectoral basis. This optionality and this ability for First Nations to move as they’re ready needs to be maintained as a principle as we transition to a new relationship. These tools were designed to support the exercise of jurisdiction, build Indigenous governance capacity and enhance economic development that allows Indigenous communities to become more self-reliant. A new relationship with Canada should, at a very minimum, create the ability of First Nations to become more self-reliant and independent.
Since 2005, we have also seen the benefits of the devolution of program delivery to Indigenous organizations like the First Nations Health Authority of B.C. — tremendously successful, delivering better services at reduced costs. A new relationship must invest in the development of Indigenous institutions that support Indigenous governments. We need to support Indigenous communities coming together to create aggregation in economies of scale. This effort should be guided by the supports that other orders of government within the federation enjoy.
The development of Indigenous institutions is the path we are on today. Governments will need to continue providing leadership and support and will need to remain committed as we contemplate and implement the type of systemic change needed to achieve a new relationship that draws from RCAP, TRC and UNDRIP.
As we journey down this path, we need to be guided. On previous occasions, I have asked this committee to describe what they saw the Indigenous file looking like in 20 years. We have never really answered that question or even attempted to.
What I’m suggesting to you today is that this is the path. You can look at the diagram on page 34 of this report. We have the opportunity to map everything that we’re doing into this approach.
This report provides a holistic view on the scope of the work before us. It identifies the types of topics and the issues that need to be addressed. We have been advised by our advisory group that everyone can see themselves in this report, whether you’re a pre-Confederation treaty, a numbered treaty, self-government, modern-day self-government treaty. Everybody can find themselves in this report.
It is our intention to request of government the resources to move on to phase 2 of this report. During this phase, we would look to expand our outreach and our advisory group, to look at those communities and nations who currently are engaged in self-government or living under a self-government agreement.
This is a historic opportunity, in my view. I’ve been doing this for 30 years now, and I have never had an opportunity to have these kinds of discussions at such a fundamental level. Fundamentally, it is about sharing power and jurisdiction and the terms under which we will do that. You’re going to hear from Chief Commissioner Manny Jules in a little while, and he will expand a lot around the fiscal side of these things, I expect. But we need to be identified as governments. We need title to our lands. We need to have the fiscal capacity to manage as a government, and we need to be supported by the Crown as we transition from a dependency-based economy to a modern-day economy in which we are contributing to the gross national product of this country.
I will now turn it over to Mark to do a short presentation, and then the three of us will take your questions. Thank you.
Mark Podlasly, Director of Governance, First Nations Financial Management Board: Thank you. My ancestral name is Thacha, and I’m a member of the Nlaka’pamux First Nation in south-central British Columbia. My given name is Mark Podlasly. I am the director of governance at the Financial Management Board.
You have the presentation that Harold has shared with you earlier, and on page 34, there is a diagram of a wheel that we had come to after many consultations with our advisory board, with members of Indigenous communities across the country, to try and come up with a plan to assist First Nations who wanted to, on a voluntary basis, exit the Indian Act.
That wheel itself took quite some time. I just want to walk you through how it came to be and explain each of the circles on it, and then show you how it relates to UNDRIP in the implementation of the United Nations Declaration on the Rights of Indigenous People.
A slide presentation has been distributed, which is on the plastic sheet document, and unfortunately the numbers did not print properly on them. I’m starting you on page 6, which is this diagram. It’s the small circle. This will explain how the circle works and came together. We did go through a pyramid format when we started a hierarchy of decision-making and governance with our members, and they did not like that. Pyramids do not build communities, circles do. This is on the sixth page. The circle itself has a number of rings. At the centre of it is the community. We were advised by the Aboriginal governance leaders that the communities in self-determination must be at the centre — not the department, not the Crown, but the communities.
If you flip to the next page, page 7, we define self-determination as outlined in UNDRIP. We framed the determination as three areas: autonomy, the need to control the course of our lives as Aboriginal people; relationships, the need to have positive relationships with other people; and capacity, which is the ability to be effective in dealing with our environments.
If you flip to the next page, to those principles of self-determination we add core functions of governance starting with fiscal in the upper left corner, to nation identity, governance decisions, the ability to have sustainable communities and, of course, the relationship with the Crown. You’ll note that in the development of this, the Crown is considered an equal partner with First Nations and it is not at the centre.
To the next page, please. We define those elements of fiscal jurisdiction, community well-being, with the elements or programs around. This is where Harold had pointed out that all communities in the country can see themselves because all Aboriginal communities in the country have some aspects of these components. It’s when you start to add those components together that you get a holistic view of self-determination.
The next page is an example of one of the communities in the Prairies who identified themselves in those specific areas, but you will notice that they don’t have all the elements. What Harold has pointed out about crossing the threshold to a new relationship is whether Canada and First Nations are prepared to go to the next level to complete self-determination.
The next page: all of this is held together with mechanisms and principles, community planning and institutional support that support the ability of Indigenous communities to exercise that self-determination. With the rest of the country in the discussions that have happened, many of these elements are in place, the principles of engagement of Indigenous people, the mechanisms to provide the financial support and the financial structures to manage the systems. Taken in entirety, you have a model which, for the first time we have found in our discussions across the country, visually represents where First Nations could go in a new relationship based on principles of equality and self-determination.
If you go to the next page, you’ll see a logo of the United Nations, UNDRIP. When we were developing this model, our advisory group was very clear that they wanted us to ensure that the principles developed followed the 46 articles of UNDRIP. If you look on the side to the next page, those 46 principles are grouped together in roughly 12 areas. If you take those 12 areas, you’ll see aspects that imbued all avenues of governance within an Indigenous community, not only in Canada but worldwide. Article 19, free, prior informed consent, is often referenced in our communities as a very important element of UNDRIP, but it’s only one of 46, again in a holistic perspective of what governance looks like at a global standard.
If you take those 46 principles and apply them to the framework that we have outlined in the document, you start to see that this actually accommodates UNDRIP as well as Indigenous communities and what the Government of Canada has stated is their goal in self-determination for Indigenous peoples. If you take those 46 and apply them to the circle in the wheel, you’ll see that they fit exactly into the framework — everything from free, prior and informed consent to issues around health, education, involvement in environmental aspects. That’s where they fit.
This is our charge from the advisory groups, to ensure that this circle fits the communities across the country as well as the principles of UNDRIP on a global sense, so we present to you the framework, which is explained in detail in chapter 3 of the full report that Harold distributed to you earlier. Thank you.
The Chair: Thank you, gentlemen. You have provided us with some very impressive information.
Before we begin with questioning from the senators, I have one quick question for you. You mentioned your advisory group. Is there a list in any of this documentation of who the advisory group was? I think it’s important to know from where the advice comes.
Mr. Calla: Senator, there is. It’s in the full report. You’ll see on page 84 of this report that the members of the advisory panel are identified. It was representative of people across the country from different walks of life in our Aboriginal communities.
The Chair: Thank you very much.
Senator Pate: Thank you very much for appearing and for all of this very helpful information.
In the report, on page 72, you mention that an appreciation of the critical importance of community well-being to self-determination and nation-building has emerged in recent decades. When our committee was travelling in the North and some of the southern communities as well, many communities were interested in concepts such as guaranteed liveable incomes as a means of increasing well-being, particularly, for instance, where elders wanted to be able to take young people out on the land but those young people had to stay in town to look for non-existent jobs in order to be on social assistance. How would you see these concepts meshing, and what funding and governance measures would have to be included as part of a new fiscal relationship between the Crown and First Nations to allow for such examples as a guaranteed liveable income?
Mr. Calla: Thank you for the excellent questions and what you have identified as some of the scope of work of phase 2 of this.
Certainly, a new fiscal relationship is going to be fundamental to this process. There has been an MOU signed between the AFN and the Government of Canada, and that work is progressing. Sustainability and sufficiency of funding is going to be a critical feature that needs to be developed. You will hear, I suspect, from Manny on this next, so I won’t steal his thunder because he is going to come in and speak to that.
Clearly, fiscal powers are going to be necessary to increase the ability of First Nations to support economic development and benefit from the economic development that is occurring. Too often in our traditional territories we see economic development activity drive by our doors, and we don’t get to benefit from that. I think what we will be looking at are the tools that can support economic development. Land management, access to capital and exercising of taxing jurisdiction are matters that we have to fully develop in order to create a new fiscal relationship.
If transfer payments were going to be a solution in and of themselves, it would have happened by now. The deficit is now so significant that transfers can never catch up. I do not believe there is a will to do that, but we do have to create the opportunity for individual First Nation communities and our aggregates to benefit from the growth in the Canadian economy in a substantial way. That’s how I see that happening.
Some of these policy matters that you’re talking about do have to be developed. It’s not for me to say what that solution might be at this point, except to set the table to have the conversation on mandates that are different from the mandates that central agencies have today.
Senator Coyle: Thank you very much for your crystal clear presentation. I look forward to reading this. I am looking forward to going through the detail.
I very much appreciate the way you presented it, showing us that the community has to be at the centre, and I love the way you have not had the Crown here, us there kind of thing. The Crown is one of your relationships. Of course, that’s one of the relationships we are most concerned with here at this table. You have answered, to a certain degree, the question that was fundamental in my mind. You’re talking about crossing this very important threshold and have never been as close as you are now to this threshold, as I understand it and we are with you, as you’re aiming to transition from this dependency base, which has not worked and, in fact, has taken people in the other direction from the one that everybody wants, into a direction of independence and self-reliance.
The Crown, obviously, has a tremendous responsibility here. Part of that is a financial structuring responsibility. Part of it is how the Crown structures itself to interact with you. There are so many ways, as you say, where First Nations communities within the regions in this country want to participate in a different manner in the economic development not just of your own communities but of Canada.
It’s a huge question and you have already answered some of it, but our interest is this piece, the Crown, our responsibility here. Can you tell us whether you are foreseeing any particular obstacles? What are the possible difficulties that you may be encountering between where we are today and where, through this plan, you want to go? If you could let us know where some of those possible problem points are, then we can understand better what we can do.
Mr. Calla: I will attempt to and would invite others to join me.
I think developing trust and incrementally building that trust, because there isn’t any at the moment, is going to be critical. We need to sustain the initiatives that we have begun to undertake. The development of First Nation institutions needs to continue. This government has determined that it will separate the department into two, and then Indigenous Services Canada would eventually sunset, I think was the word that was used. What does it sunset into? It must sunset into First Nations institutions.
We need to have the patience to develop the capacity of our governments, and we need to allow for the creation of aggregates of First Nations to be able to support the capacities that they need. The prime example I will refer to is a topic that I have discussed here before, and that is The First Nations Major Projects Coalition that started out in British Columbia and now has 47 members in five provinces. Building those kinds of capacities to engage at a technical and administrative level on some very complicated subjects is going to be absolutely critical. Shared services provided to First Nation communities on an aggregated basis is going to have to be invested in by government.
I think the more fundamental problem is going to arise over the concept of shared decision-making and shared jurisdiction. When I look at the thresholds that have to be crossed, the fundamental one is: Will Canada and the provinces come to the table with First Nations and come to some consensus on how we will look at those matters?
I have seen, again from the Major Projects Coalition, how shared decision-making can work. I don’t know the last time they were here, but they have developed, for example, an environmental stewardship framework, developed by First Nations and applied, a topical subject for these days. Those are the kinds of shared jurisdiction and support for that that needs to be in place for First Nations and Indigenous communities to have confidence that this is not repackaging the status quo. This has to be about shared decision-making.
I would like to think that governments can take the lead and not continue to depend on the Supreme Court of Canada to give us some scope of what that is. It does take bold leadership. We need to be in a position where we can identify to Canadians why these things are important and why they benefit, not just our Indigenous communities. The social cost of poverty is not something this country can continue to afford, and we need to address those issues in our communities.
Senator Coyle: Thank you.
Senator Tannas: Thank you for being here. As always, your presentation and materials are invaluable and clear.
I noticed that when you look at the UNDRIP Canadian context by First Nations with the big checkmark and the wheel that shows where the various articles are, the institutional support has zero relevance to the UNDRIP articles. Mr. Calla, you mentioned that we are on a path of supporting and building institutions. Is that something that those who were busy in New York crafting the UNDRIP articles didn’t recognize in other Indigenous societies around the world? Is this something where we’re unique, and, therefore, that’s a good or bad thing?
Mr. Calla: We’re way ahead of the curve in Canada on this. In fact, we just returned from Stanford University. The Hoover Institution had a conference where we were talking about many of these things. It was interesting to see the reaction to the pace of development in Canada around Aboriginal issues. I was finishing my presentation, and one of my colleagues from California just said, “I’m depressed.” I thought, “Oh, oh, what have I done? Who have I offended?” He said, “No, I thought we were always so far ahead, and I just realized we’re so far behind.”
Canada is leading the world in this area, and we should take confidence from that. There are a lot of people looking at us from Australia, New Zealand and Central and South America.
When Canada removed its objection status to UNDRIP, the people at the UN who were most excited were the Indigenous communities of Central and South America because they felt that the mining companies that were down there conducting themselves in a way that wasn’t inclusive of Indigenous communities would now have to be dealt with.
Canada is way ahead of the curve on many of the issues, but in some cases it’s not. We’re starting to identify some areas where we can improve. There’s a lot of effort and work that will be required by Indigenous communities, and that work is building comprehension and knowledge. It is building systems of governance and building an ability to feel confident to carry yourself in the world. That’s going to take investment. That’s where the Crown can play an important role. It is supporting government in the resources required to build that capacity in our First Nation communities.
We have enjoyed that to date. Over the last 10 years, quite frankly, we’ve enjoyed that support. It’s been considerably advanced with this current government. It needs to be applauded, and it needs to continue because we are getting the results that I think we need.
Mr. Podlasly: I have one other thing to add to that as well. When you pointed out on the diagram that institutional support did not have specific into the circle, if you look forward, there are elements in that quadrant. UNDRIP is a global document that sets out principles for engagement with Indigenous people. It does not set out specific programs or institutions. That is up to the jurisdiction of the nation state and the Indigenous people. As Harold pointed out, Canada is on the front of this curve at the moment. How that comes together will be a Canadian solution worked out with Aboriginal people to match the principles of UNDRIP.
Senator Tannas: I wanted to ask a couple of questions with respect to the wheel because I think this is terrific. Number one is, can you imagine any Indigenous government in Canada rejecting this wheel as somehow not reflective of the state that they would like to move to? In other words, have we perhaps found something where there could actually be consensus all across the country, from all corners, as a starting point? If not, what percentage do you estimate or know won’t agree with this and want to do something different?
This leads to my second question. In order to get to the state you talk about, it is clear to me that this is not a government thing. This will be a constitutional thing. This will require referendum. This will require the support, through a vote, of the 95 per cent of people in this country who are not Indigenous. Therefore, we are going to need all efforts, clarity, behind the movement to get this done. Do you view it that way, that a government can just do this and the next government can repeal it, and we can carry on with forwards and backwards? Or is this something, in your view, that has to be Canadians and Indigenous people together saying yes to something and moving it forward such that it cannot be broken?
Mr. Calla: Wow. I thought we were past constitutional discussions.
To answer your first question, the advisory group that we engaged saw themselves in this. Part of what we would like to do in phase two is to expand the scope of that outreach and engagement with many others. I don’t know how many will support it and how many will oppose it. The only thing I know for sure is it will have both. I think that that is a reality.
To your second question, I remember, in British Columbia, when Gordon Campbell was elected premier, that we held a referendum. I’m not a fan of referendum on minority rights. I don’t think it’s an appropriate measure. I think Canadians elect a government, and it is the responsibility of that government to conduct itself in a way that responds to the Constitution of this country, which says that there are Aboriginal rights, treaty rights and a right to self-government. It’s up to the parties and their supports to determine what that is from time to time.
I would like the Constitution to have been more specific. It was not possible then, and I’m not sure how practical and possible it is to look at a constitutional amendment today. Those concepts have been floated in the last couple of years, and they haven’t been well received. I think we can look at some forms of legislative pieces that can support this but, at some point in time, it’s the will and intent of people and governments that are going to determine whether or not these things come to pass. So, yes, a constitutional amendment would be something that, had it happened way back, would have been helpful. I think what we got was perhaps all that was achievable in that day.
I think we can work within the existing structures now to achieve further objectives, and I think we have to. We have to have a tolerance that this has never been done before. Not everything that’s going to happen is going to work out perfectly, and we have to have the ability to be flexible and nimble as we move forward, but always moving forward in a way that looks to eradicate the poverty and social challenges that our communities face, and other communities in this country, to promote the development of an economy and good governance and to be a model, quite frankly, for the rest of the Indigenous world to be able to follow.
I think that can be done within the existing structures. Certainly the Fiscal Management Act, the Land Management Act and the Commercial and Industrial Development Act are all pieces of legislation that could, I suppose, by some other order of government, come in and be thrown out the door. The probability of that happening is slight because of the demonstration of why it’s been successful. What we want is success, and we can create that success through a dialogue and through legislative pieces that define responsibilities. The purpose of legislation is for each of us to understand where our responsibilities begin and where they end, and I think we can achieve that.
Senator Christmas: Thank you again, Mr. Calla, for being here, and thank you for the amazing amount of work that you’ve done on this topic. It’s been very refreshing. It’s been very clear. It’s also very educational. If you ever decide to develop posters of some of these medicine wheels, let me know. I’d like to post all kinds of them.
Mr. Calla, you asked a very pointed question at the beginning of your presentation. If I got it correctly, you said: Are the parties prepared to cross the threshold of transformative change? In answering one of my colleagues, you mentioned that trust is going to be critical, and where I assume this trust has to happen is when we talk about shared jurisdiction and shared decision-making.
My first question, Mr. Calla, is this: How do we build that trust? How can the two parties — or, if you add the province, the three parties — begin developing that bridge of trust so that we can allow this transformative change to happen in Canada?
Mr. Calla: I think through incremental successes. People have to see it on the ground and it has to have a positive impact at the community level. If we’re talking about a new fiscal relationship, that work that’s being undertaken now needs to continue, and it has to result in the ability of First Nations communities, at their community level, to see that there are results. They say all politics are local. At the end of the day, our chiefs and councils are local politicians, and they need to be able to demonstrate that this is successful.
I think it also comes from a willingness to share in the growth of the Canadian economy and government revenues. This was discouraging: I was in the Senate when there was a debate on the cannabis bill, and the topic that afternoon was why isn’t there any sharing. There was a huge opportunity for it to be demonstrated that First Nation communities can, as part of a new fiscal relationship, share in the wealth that’s been created by governments in this country. It was a failed opportunity. At the end of the day, that’s what it comes down to: Where are the resources going to come from?
Incremental successes will build confidence, and I think we want incremental approaches. I don’t know how many times we tried to hit the home run, and it hasn’t really worked. We need to be able to make the adjustments and correct the challenges we face. That’s why institutional supports are so critical. I look at the work of the Indian Taxation Advisory Board and the First Nation Tax Commission as classic examples of the kinds of supports that are necessary to ensure that jurisdiction is being managed in ways that create confidence in our Indigenous governments. We need those kinds of supports to be able to do that.
If we do those kinds of things, then people in our communities begin to see that they’re not abandoning their Aboriginal and treaty rights and they’re no less Indian because they’re engaged in activities as a modern-day government. I think that will help, and it will come exponentially. When the Fiscal Management Act was passed, it was not anticipated that 250 communities would be part of it, which is the case today. When opportunities are before communities and they say the tools that we’re developing can be used to benefit their communities, they will move forward.
Senator Christmas: Once we continue this journey of shared jurisdiction with the Government of Canada and with the provinces and territories, one of the impressions that I receive is that those governments feel they will lose something, that they are threatened by our laws. It seems those other parties get uneasy when we talk about shared jurisdiction.
You mentioned that Canadians as a whole can benefit from this model that you have outlined, and I think it’s important for Canadians to understand and appreciate that they are also winners — not only Indigenous peoples and Indigenous communities, but Canadians as a whole are also winners in this model. Can you explain how Canada wins and how the provinces win once this model is implemented?
Mr. Calla: There are two ways in which they win. One is simply to have done the right thing. We’re in this circumstance not by our own design. We’ve been put there, and it has to be changed. I think that’s one of the biggest benefits.
More importantly, if we want to prosper in this country, to sustain our standard of living, we need to be an attractive place for investment and human resources, and I think we don’t have that right now. The Government of Canada found itself in the position of having to buy a pipeline in order to confirm and create certainty for that project to proceed. The private sector was not going to invest in it.
We have recently seen an LNG project proceed in British Columbia. It could have happened six years ago.
Uncertainty is being created without the willingness to come to the table to acknowledge shared jurisdiction, and solutions that were found in the Major Projects Coalition could enhance economic development opportunities for the provinces and local regional economies. That’s how Canadians can benefit. We can start making contributions to the gross national product instead of an increased cost in the social net. We can reduce the tragedies in our communities — the substance abuse, the suicides — that are not just impacting our communities but impacting the non-Aboriginal communities around us in those rural areas. I think that’s how Canadians can benefit, and I think they will find that their regional economies will be successful.
I agree with you because I was speaking to the Union of B.C. Municipalities in September and talking about additions to reserves, and a guy came up and said, “It’s a tax loss. We’re losing tax money.” I said, “Please, it wasn’t your land to start with. It’s unceded traditional territory.” I said, “Who do you think we’re going to get the services from? Do you think we’re going to build a police department, a fire department and water sewage treatment plants in some of our communities? We’re going to buy the services from you. We can create aggregations. We could actually maybe help one another reduce the cost of service provisions by coming together.”
It’s that kind of imagination that we need to create. We’ll be talking about an infrastructure institution. We need to look at different procurement models, the modern way of doing business, and we need to support the jurisdictional base for that to happen.
Senator Christmas: Thank you.
Senator McCallum: Thank you for your comprehensive presentations and all the work that you’ve done. It’s very encouraging for me to see.
My question is also the same as Senator Christmas’ about whether the parties are prepared to cross the threshold, but my question is about the government.
When I look at the communities and how fast they’re moving forward, they’re regaining many of the teachings they’ve had and regaining their spirituality. We will get it back eventually. One of my elders, Betty Deer, had said something when we were looking at issues of consent, and this would have been about 15 years ago with the consent form. I said to her, “Oh, sometimes I get so scared.” She said, “My dear, don’t be scared.” She said, “When it’s time for our people to move, they’re going to move so fast.” I keep that in mind.
The concern I have is that we can be well prepared to move ahead, but because we don’t live alone in this country any more, with all the interrelated realities that we have, how do we engage the support of government when they have not been prepared to meet us at the table? They have the right words and they have the principles, but a lot of it is still being done unilaterally. My concern is that we can move, but this will keep on. It’s because of the power imbalance, but also the politics, the partisan politics. What are the recommendations that you would make to this committee on how we can help move this process forward?
Mr. Calla: Crystal ball. The first thing is I remember the Squamish Nation’s late Chief Joe Mathias saying to me, “You have to go to the table.” The first thing as Indigenous people is we have to accept the offer to come to the table to have the discussion, and we have to prepare ourselves to go to that table. If you don’t go to the table, there’s no imperative on the part of government to do anything other than the status quo, so we have to go, and we have to present our position, not the position of bureaucracy or the government, but our own position. We need to have the capacity to be able to do that.
When I talk about First Nation governments having available to them the same capacities as other governments within confederation, that’s what’s lacking at the moment. Many of our communities find themselves so preoccupied with managing the delivery of programs and services that they don’t have the opportunity to look at the big picture of what governance is and what could be. We have to provide that. What this report and others that will follow it hopefully lead to is an identification of those tools that are needed to provide and build that capacity for us to function as a government. I think that’s first and foremost what we have to do.
I think education is going to be key. I think there’s some good work being done by organizations like the Aboriginal Financial Officers Association that need to be supported and continue to develop literacy, and not just in our communities. I know there’s a financial literacy initiative for all Canadians. I think that also has to have an Aboriginal component to it.
Too often when we get outside of our communities we don’t want to talk about Indigenous communities or Indigenous issues, and I think Canadians have to become more aware of what the circumstances are and, in particular, how we could benefit as a country if we had a revitalized Indigenous economy, because we had one. We had one, and that’s what was taken away from us. That’s what the Crown did, and the Crown has got to be part of the solution to bring it back. Part of that, I still say, is crossing that philosophical threshold that this is about shared decision-making, shared jurisdiction and shared fiscal resources. This is not about a transfer system that is dependent on the generosity of parliamentary appropriations; we have to move beyond that. There will always be transfers, and they’re important and they need to be legitimate, but we need to be able to grow the Canadian economy in our traditional territories and share in the resources that are being taken from our traditional territories, and that comes through sharing of fiscal powers and the jurisdiction over how those resources are harvested and what the cumulative environmental impacts are going to be with that.
The Chair: We only have about three minutes left. We have two more questioners, Senator Patterson and then Senator McPhedran.
Senator Patterson: This is great stuff, and I think it’s very timely for our study. It’s always great to have you back before the committee.
I’ll try and ask a very short question. I like what I hear here, and I think we should support phase two vigorously. I think you’ve approached this very effectively. If you don’t mind me mentioning, we also have a promise of a rights framework, a major commitment by the Prime Minister, and I understood that was to develop a new way in which Canada would engage with First Nations respecting their rights. Does that fit in with what you’re doing, or are you going to overtake that initiative?
Secondly, I have to find myself wondering about the Crown-Indigenous Relations initiative. We have some briefings on the efforts being made in that area and some successes, but you’re dealing with Indigenous Services. That’s the ministry that supported your phase one. I guess I’m just wondering if you would have some comments on that. Are you tied in with CIRNA and with the rights framework, or should we focus on phase two?
Mr. Calla: You raise an interesting question, because the question has been posed to us as institutions, which of the two departments should we fall under. What we’ve said is we fall under both. We provide capacity development to look at institutional development to support service delivery, but as we’ve said, we want to be part of the future, not part of the past. Part of the future is Crown-Indigenous relations. I see this work not overtaking the rights and recognition framework. I see this supporting it.
In the absence of that legislation, it provides us the basis to continue the work. I don’t want to be held up in this process while we wait for some legislative piece. We have people in the communities who need support right now. We need to advance this agenda. I agree that there should be a legislative piece, but I do not want to find this work stalled because we’re not able to reach a consensus on what that legislation should look like.
We can do this work to help support the implementation of that body of work whenever it comes down, and we will keep our eye on it. But, in my belief, our institutions support Indigenous communities. It’s not up to us to tell government how they want to organize themselves. They have made some decisions. But our responsibility to our community is to support those communities in their interaction with whichever federal department they are involved in. We have actually informed both ministers, as institutions, that we have a role to play with both of them and want to continue to support both of them as departments in achieving their objectives.
Senator Patterson: How can we help? You have an ambitious end goal for phase two of March 2019, which would see this work done before the next election. How can we help you move this forward?
Mr. Calla: Well, you’re helping us by receiving us here today and allowing us to present on this, to create some awareness of this body of work and this opportunity that is before us. I think that’s critically important. Parliamentarians do talk to one another in here, and I think it would not hurt for the Senate to be able to say to government, “We like what we saw. This is a good thing. We hope you continue it.” I think that’s an expectation that we would welcome, you being able to say that.
Where this gets resourced is a matter for government to sort out. Whether it’s ISC or CIRNA, we don’t really care. We just need to be in a position where this work, which we believe has value, can continue and support the other processes that are involved — the AFN and Government of Canada MOU on a new fiscal relationship. This body of work can support those initiatives. Certainly the sustainability and sufficiency of funding is critical to the success of these things. We sit at those tables. I’ve now been invited to sit as part of the advisory secretariat on fiscal relations with Canada and the AFN. We are engaged and the institutions are engaged with these groups to create this coordinated effort.
The Chair: We have gone over our time, and we have another witness. I’m sorry, but we will have to end the questioning here. On behalf of the committee, I would like to thank our witnesses this morning for appearing before us and providing us with the documentation of the work they have done so far.
We now have our second witness this morning, from the First Nations Tax Commission, Chief Commissioner Manny Jules. You have the floor, Mr. Jules. Following your presentation, there will be questions from the senators.
C.T. (Manny) Jules, Chief Commissioner, First Nations Tax Commission: Thank you. For over 40 years I’ve been coming to this little town, and I feel we’re just getting to the hump.
One hundred years ago, we had veterans fight in the First World War, and previous to that in the Boer War, and then in World War II. That’s why I’m wearing this lapel pin today, to honour them. I would like all of you, as senators, to call on their spirit to be with us today and remember that all of the veterans who fought — and many died in those conflicts far away from home — did so without Canadian citizenship. We weren’t recognized as Canadians until 1958. As we deliberate and talk about the future, the past informs us and allows us to be able to move forward, knowing that we have their strong spirits with us.
Honourable senators, good morning. I am Manny Jules, Chief Commissioner of the First Nations Tax Commission, although perhaps one day it will be “taksis commission.” As I said to this committee the last time I was here, the word for “tax” in our traditional Chinook trade language is “taksis.”
I want to deviate a little bit from my speech. I have before me a translation of the Kamloops Wawa, Chief Louis’ and Chief Chelahitsa’s trip to Europe. When the eating was done, Chief Louis wanted to see all of his people in the catechism house. The catechism house was built by taksis, and it was also the centre of our political activity in our communities. He spoke to them about how he wanted to go with the priest abroad to see the Pope. All the men thought well of this and helped him out, with one tonne of hay per man, all together 30 tonnes.
That’s important because it demonstrates the fact that our people shared. The trip wasn’t just about to visit the Pope; it was also to stop here in Ottawa to talk about the land question, and also to stop in London to meet with the King.
On the way, Chief Louis thought there would be lots of deer travelling from Kamloops to Revelstoke, and he was always asking for the train to stop. It was 8 o’clock in Kamloops, but 9 over here. The sun, the moon and the stars rise here one hour before they do in Kamloops. Then we were hungry and we went to a car where food was given to us. There were lots of plates. Two spoons, two knives and three forks per person. Chief Louis said, “Well when, I get back home, I’m telling my wife she should put out two spoons, three knives and three forks for me to eat with, and then I’ll be a big chief.”
In London, they tried to visit King George, but of course he was away hunting. Chief Louis ultimately wrote King George a letter saying he understood it completely, that the chief would be hunting, because he did the same thing. They also visited the museum in London, and they saw every kind of bird and animal. Chief Louis saw the coyote there, and the coyote is our teacher. He was brought down and sent by the old one, the Creator, to make things right for us, to learn how to live on the land. He was laughing at the coyote in the middle of London. He couldn’t believe it.
He also visited Fort William, and then from Montreal — I forgot to mention this part — he stopped to visit the birthplace of the Beatles in Liverpool. He went to the Eiffel Tower. One of the chiefs didn’t want to go up because it was too scary. He went down to visit the Pope to enlist him to support us in our struggle for land rights and title. That’s very true for the Mi’kmaq as well from down east, with the papal treaties.
I want to thank you for this opportunity to appear as a witness before this committee as part of your examination and report on a new relationship between Canada, First Nations, Inuit and Metis people. Before I begin my address, I want to take a moment to provide you with an update on the commission’s work on the cannabis file.
On February 28, I appeared before the Standing Senate Committee on Aboriginal Peoples as part of your study on the Cannabis Act. At that time, I expressed my concerns that our tax jurisdiction was not considered in the legalization of cannabis. I also pointed out that we had asked this to be considered before the Cannabis Act was introduced in April of 2017.
As you know, on June 6, 2018, Ministers Philpott and Petitpas Taylor wrote to this committee to address the concerns raised about Bill C-45. Among other things, the government committed itself to discussing cannabis revenue-sharing and taxation arrangements with the tax commission.
I can report that the tax commission has since been in discussions with officials from the Department of Finance to address the issues I raised in February. We first met in early September and we are continuing to meet.
The tax commission is working towards a model whereby a First Nation can receive a share of the revenues generated by the taxation of cannabis. We’ve made the point that we need these revenues as much, or more, than provincial governments. We also have to provide many of the same services. If we don’t receive a share, it will exacerbate the disparities that already exist.
I also hope that we have learned from our experience with tobacco taxes. The federal government’s decision to deprive First Nations of the opportunity to share in tobacco tax jurisdiction led to the sale of unmarked cigarettes, which caused substantial revenue losses for all governments. It has compromised our ability to put in place a regulatory system that protects children. It has compromised product and health standards, and those outcomes are in nobody’s interest.
If there is a fair tax jurisdiction and revenue-sharing mechanism in place, then there will be less incentive for so-called grey markets to develop on reserve lands.
First Nation tax jurisdiction and excise tax revenue sharing has been one focus of our discussions with officials at the Department of Finance. Enabling tax and regulatory powers for interested First Nations has been another focus of these discussions. We are reviewing options and making suggestions.
I have also engaged with officials from Health Canada, and I will be meeting with these officials later today to discuss the commission’s views of an appropriate framework for public safety and health on-reserve.
The commission believes it will be important for both Health Canada and Department of Finance officials to receive a broad enough mandate to help us deliver a comprehensive First Nation cannabis revenue, tax and regulatory system. I am hopeful that the Senate will support our approach.
This revenue-sharing and taxation model is important, but it needs to be considered within the context of a larger issue, that being a new fiscal relationship with First Nations.
Let me be clear: When I talk about a fiscal relationship, I’m talking about more than just a system of government grants. I’m talking about a fiscal relationship in the same sense that federal and provincial governments have. It is the arrangements by which governments assign tax room to one another and sort out who pays for what service.
We need to consider all these elements because we need a new fiscal relationship that discards once and for all the idea that First Nations must today, and for all time, sit down with unelected government officials to negotiate all their government priorities and funding amounts.
We also need to discard the idea that our revenues must ultimately be at the discretion of other governments. A new fiscal relationship must give us revenues that are secure, and it must reduce the scope of funding agreements so that we can move forward with more decision-making closer to home.
That is why I want to call these new revenues to develop what I call a First Nations jurisdiction account. This account would have three important attributes: One, it would fund service and replace transfers; two, its revenues would not be subject to unilateral clawbacks; three, the services it funds would be outside the purview of other governments. That would be consistent with the intended meaning of self-determination or nation-to-nation relations.
Clearly, that would be a real change, but it is not without precedent and it is not unproven. We have shown this in the way forward when we developed the First Nations Fiscal Management Act. It established for us a way to receive revenues but also to use these revenues outside of the Indian Act. Under the FMA, there were no departmental funding officers demanding reports, or determining our priorities, or deciding what was and wasn’t worth funding. They didn’t exercise discretion over how much revenue we received.
That proved to be a successful model in many different ways. Today, there are almost 270 First Nations participating in the FMA. They have developed these revenues well beyond what was originally anticipated. Many of them have become major contributors to their regional economies, with greatly improved infrastructure and services.
The FMA established other useful precedents that would apply to the jurisdiction account. We established a system of third-party verification and enforcement. We built this from the nations on up. However, and I think my colleague Mr. Calla may have already spoken to you about this, it was developed because our members and taxpayers wanted this level of accountability, and we know that third-party assessments are an essential element of good government.
I hope we can build on this by supporting the development of a sound access-to-information policy for the institutions created by the First Nations Fiscal Management Act. The tax commission has proposed amendments to the Access to Information Act, which is currently being studied by another Senate committee, and I am hopeful that our amendments will be accepted.
The fiscal relationship I am talking about allows First Nations to take greater control over their revenues. It gives them a better stake in the success of their regions. It allows them to take responsibility. In fact, it is consistent with best practices for government that have been established all over the world. I would add one more thing: It establishes a true nation-to-nation framework.
This model will allow us to gradually and sensibly dismantle the Indian Act. We will create revenue room. We will create enabling legislation that allows First Nations to take full responsibility where it makes sense to do so. We will use supportive institutions to support them. Taken together, these steps will gradually replace the federal department of Indigenous affairs.
This has become possible because of your strong support. I look forward to continuing our excellent working relationship so that we can develop a First Nation cannabis revenue tax and regulatory framework by April 2019.
Let’s not stop there. Let’s commit ourselves to developing a jurisdiction-based fiscal relationship option for First Nations. Let’s commit to expanding our taxes with powers to include tobacco, GST and resource taxes. Let’s build an infrastructure institution and other institutions to replace Indigenous affairs.
Let us continue to creatively destroy colonialism through First Nation legislation and institution innovations. Let’s build a better and more inclusive federation that finally includes our governments.
Let’s do all of this in the spirit of my predecessors, who said in the memorial to Prime Minister Laurier more than 100 years ago, “We must help each other to be great and good.”
Thank you.
The Chair: Thank you. We will now open the floor to questions from senators.
Senator Coyle: Thank you for being with us, Mr. Jules. That was again an inspirational as well as very informative and highly aspirational — which is always good to hear — presentation.
I would love to hear more detail about the First Nations jurisdiction account. That’s a novel and interesting vehicle that is being suggested here. Could you give us a little more detail on that? Also, while you’re doing that, could you perhaps make reference to the First Nations Fiscal Management Act and any lessons that may have been learned, because I know that didn’t happen overnight and it is still happening in terms of uptake, et cetera, that could apply to what you’re proposing here.
Mr. Jules: I’ll start with the First Nations Fiscal Management Act. Its genesis started in British Columbia in the 1960s, when communities were struggling to get tax jurisdiction over our lands. That included the communities of Kamloops, Squamish, West Bank, Sechelt and Musqueam. That ultimately led to all of the pieces of optional legislation that are before Parliament today, not only the tax jurisdiction but the First Nations Financial Management Board, the First Nations Finance Authority and First Nations Land Management board. All of these initiatives started because we wanted to have jurisdiction and take control of our lives.
The other thing that is really important to consider is the recent court case on Mikisew Cree, where Parliament has jurisdiction over these matters and we have to be able to participate in the parliamentary legislative process, one of the most important processes. If we didn’t catch the cannabis legislation through the Senate, that opportunity would have been missed. So all of these are lessons that we have to move forward with, and we can never forget the past.
What is important is we have to recognize Parliament’s very important role, the Senate’s important role and also the important role, which, to me, is the most important, the optionality that First Nations want to be able to put forward. We want to be part of the federal framework, not isolated from it.
When I talk about the question of the jurisdiction fund, I believe it is the way forward to deal with tax jurisdiction. Right now, as I mentioned in the paper, as we begin to move forward, it should be on the basis of having greater and greater tax jurisdiction. Those monies should be put into a fund that we can begin to look after ourselves. One of the concepts is being able to revenue share, developing our own equalization formula within that pocket of money, so that we can help those communities that are less advantaged and those that are even more advantaged.
One of the examples is Squamish. When you look at the needs of their infrastructure, it’s in the range of $245 million. That can’t happen by a cheque from the federal government or indeed the provincial government. The only way that will be achieved is through greater and greater tax jurisdiction and taking on the responsibilities. When you think about that number, think about the revenues that that community generates for the Lower Mainland. Then you translate that to every community that we’re working with right across the country. Indeed, our communities generate more in tax revenues for the federal and provincial governments than is given back to us by programs and program delivery.
When I think about these issues, I’m constantly asked, “How are you going to help this community that is a fly-in community? How are you going to help this community that isn’t like a Squamish or a West Bank or Kamloops?” The only way to begin to ultimately do that is to look at us as I started to think about after the failed Charlottetown Accord. In Charlottetown, what happened is that we reached an impasse and we couldn’t move forward. Out of that, I started thinking about, “Well, maybe we should consider ourselves like an eleventh province, so that we can begin to move forward.” That doesn’t mean that individual First Nations can operate based on their own sovereign jurisdictions. It means that we pool that sovereignty so that we get the biggest bang for the buck, and we can then begin to help one another.
One of the biggest lessons I learned over the last little while was my visits to the United States and this whole notion of domestic sovereignty. What you have in the United States are various classes of tribes. You have Foxwoods, which generate a billion and a half dollars a year, and half or an equivalent amount goes to Connecticut. In North Dakota, you have the tribe of Mandan. Fifty per cent of their oil revenues goes to the state. At one of the meetings I was at, I was sitting beside a representative of the governors of the states. I asked that individual, “Would the federal government in the United States ever pass legislation to allow exclusive tax jurisdiction on tribal lands?” The simple answer was “No.”
When individuals promote domestic sovereignty, that isn’t the answer. The answer is through enabling federal legislation based on our hopes and aspirations so that we can clear the path and help First Nations at all levels of development.
Senator Patterson: Thank you very much. It is always a pleasure to have you with us, Mr. Jules.
I’ve got some very brief questions. You talked about the negotiations with the Ministry of Finance and gave me a bit of hope that you’re making progress. I know you’re about to have another meeting. I wonder if you can give us a little sense of the flavour of these discussions. Are you optimistic that there’s going to be a way forward?
Second, if I may put a couple more short questions about this, there is a new fiscal relation group with AFN that is interfacing with Canada. Are you part of that? Is this all considered in the work on a new fiscal relationship beyond the excise taxes?
Finally, if you can make a breakthrough with excise tax revenues, as we had hoped when we studied Bill C-45, do you see those excise tax revenues being monetized to meet some of the infrastructure needs on reserves? I guess I’m really feeling that we’re behind in this. I read a news story this morning about the significant revenues that are flowing to governments since October 17, and you’re trying to catch up and we’re behind you. How is it going?
Mr. Jules: We had a request on October 17 from a community down east in New Brunswick asking to publish their law in the First Nations Gazette. The reason they did that is because there’s no other place that communities can look to, other than their own institutions, to promulgate their laws.
Unfortunately, as I mentioned in my brief, there were significant opportunities on the part of the government to accommodate First Nation jurisdiction, and that didn’t happen. But having said that, with the support of the Senate, the chamber of sober second thought, we’ve now got life where before we didn’t. I think that’s a critical component of the discussions that we’re having with the Department of Finance.
We reached out in June. We had an informal meeting over lunch with one of the representatives of the Department of Finance. We set up a series of meetings starting last month, in September. The first meeting was laying out really the promise of what a new fiscal relationship could be.
The concerns that the Department of Finance had were, first, the integrity of the tax system. I made it very explicit that we were here meeting with the Department of Finance to ensure that the integrity of the tax system was still there. Our message was that we want to be part of the tax system.
What we were saying is that, at that point, we recognized that we weren’t going to amend the Excise Tax Act to have explicit tax jurisdiction passed on to First Nations, but what we were clear about is that we wanted the same revenue-sharing agreement that the provinces have got. That’s in both areas. That is on the consumption area, on the excise tax sharing, as well as on the manufacturing aspect. Those two have to be included together, because without the two, you can’t move to the jurisdiction account that I was talking about earlier. One is for local issues so that communities are in a position to deal with the issues hands-on in their local community. The other is where I hope that we would be able to use the revenues to have and develop our own equalization formulas, being able to use the First Nations Finance Authority so that we can lever it to have greater and greater infrastructure built, and as well to encourage real private-public partnerships on reserve lands, because there’s no way that any government at this stage can write a cheque for $45 billion. That can only be done through an orderly approach and a step-by-step approach.
Senator Patterson: My other question, if I may, was we hear about a new fiscal relationship initiative. Can you —
Mr. Jules: I’ll back up. I didn’t quite finish with the second part, which was the discussions with the Department of Finance.
I believe those discussions have been very productive. Not only will we be talking about the excise potential of cannabis, we’re also talking about the excise potential of tobacco, which is unprecedented, and gasoline. Under gasoline, what happens with the excise tax now is it’s the Department of Indian Affairs who determines which infrastructure projects that money will go to. The level of discussions that we’re having with the Department of Finance are unprecedented. It’s been very cordial, and I believe we’re going to make substantive progress over the next short while.
For a while, they didn’t believe that I was advocating that we do this in a very tight timeframe. When you’re talking with government about April 2019, well, you have to be able to not only to move at the speed of Parliament, but you have to be able to move at the speed of business.
With the other discussions, it’s a wide-ranging discussion including income taxes and including the Aboriginal resource tax, which I believe is critically important. If we had an Aboriginal resource tax in place now, major projects would be more easily achievable. All of them. It just continues on and on, and it boggles the imagination that we’re confronted with this notion that we’re going to lose something when, in fact, if we have a true fiscal relationship, that’s going to change the dynamic of this country. It will be like adding another jet-propelled engine. I always mention that fact.
I was at a Walrus forum here last week in Ottawa. One of the gentlemen was standing up and saying, “When I first started doing this, imagine we were dealing with the iPod.” I said, “Well, imagine us. We’ve been dealing with these issues since the telegraph.”
It was because of the support of the AFN committee that we were able to have a seat to lay out our proposal to the Department of Finance, so I want to acknowledge the AFN in its support on that basis.
The other aspect, of course, is that Finance deals with one aspect, which is the tax jurisdiction. The second component, which is critically important, is Health Canada and making sure we have the regulatory regime at the local level. The key elements there are First Nation cannabis regulatory laws to ensure product quality; First Nation distribution systems and stamps to certify product quality; and First Nation cannabis tax jurisdiction over sales, licensing, excise tax sharing to provide resources for regulation, health and safety and infrastructure. First Nation cannabis tax sharing proposals will reduce grey market sales and youth consumption. First Nation institutional support for interested First Nations will ensure that their cannabis jurisdiction and First Nation cannabis system will be implemented efficiently and effectively.
One of the things we have to again look to the United States for is prohibition. We’re still today dealing with laws that are still affected by the lifting of the ban on the sale of alcohol. We’re in this game for the long haul. There will be legislative changes. If we get the legislative changes that are going to be required by April of next year, we will indeed be able to catch up.
Senator Patterson: Thank you.
Senator Christmas: We’re pleased to see you here again, Mr. Jules.
I really appreciated the update you shared with the committee on your negotiations with the Department of Finance. I think some of the answers you already provided my colleague answered some of the questions I had. The one thing I want to find out specifically is this: In your negotiations with the Department of Finance, is the whole issue of regulatory powers for First Nations and taxation on the table as well?
Mr. Jules: All of those aspects have to be on the table if we’re going to achieve a true fiscal relationship. You have to break it down into a couple of different components. One of them related to cannabis obviously has to include the Department of Health. That’s why we’re going to be engaging with them this afternoon. In terms of our discussions with the Department of Finance, the whole approach is based on the notion — which we’ve been discussing for many years in our communities — of what is a fiscal relationship. It has to include all of the jurisdictions that are in place now.
One of the questions that was asked earlier on to Mr. Calla was about the constitutionality. We’re probably not going to get to the stage of a constitutional amendment in our lifetime, so what we will have to achieve is greater and greater certainty through legislation. When we talk about the Constitution, that’s a complex area, but it’s one that, in my view, is simple. Do we want First Nations, Inuit and Metis to be part of the Canadian federation or family? The obvious answer is yes, and so how do you achieve that?
One of the things that’s been happening in my discussions is particular interest from provincial governments. Provinces want to know what’s happening. They want to be able to deal with their own legislative uncertainty. Next week I’ll be meeting with the Ontario government, a representative of the Attorney General and the Deputy Minister of Finance, to talk about cannabis and tobacco. Ultimately, it’s how do you deal with the ring of fire? It isn’t through simple resource revenue sharing. It has to be through a mechanism whereby First Nations would be able to partake, through jurisdiction, in the wealth and bounty that’s locked up there.
Brian Pallister — who many of you know as a colleague when he was a member of Parliament — has asked me to meet with his top civil servant in Manitoba. Why? Because what’s happening in Manitoba is they’re placing dialysis machines on Indian reserves, and it’s because of this whole notion of federal-provincial off-loading.
What is really interesting for me is one of the latest Parliamentary Budget Officer reports wherein he specifically mentioned Manitoba and New Brunswick as possibly going bankrupt within the next generation. Again, the fundamental reasons for that are the underlying issues of First Nations. When you talk about Manitoba, that’s a Western issue, but by extension it’s a national issue that has to be addressed. The only way, ultimately, is by recognizing that First Nations have to be a fundamental power within the framework so that we can pursue issues like a new fiscal relationship and so that we can have jurisdiction when it comes to health and welfare related to ourselves. If we don’t do that, then the stake of the federation itself is in jeopardy.
Senator Christmas: What I appreciate about your approach — and it’s similar to what Mr. Calla mentioned earlier this morning — is that this approach is going forward on the basis of shared jurisdiction, shared decision-making and, in this case, shared revenues.
I love the concept of the First Nations jurisdiction account. Maybe the words threw me off because I’m not familiar with them, but your third point made it clear that these account funds would be outside the purview of other governments. Could you elaborate and explain how that jurisdiction account would be outside of federal-provincial?
Mr. Jules: What happens right now is that even on reserve lands, you have the federal government saying that you have to have a royalty account for oil and gas, for timber, for gravel. Despite the fact that there’s been court cases about it, it goes really to the heart of what is a fiduciary responsibility. This notion that we’re always going to be treated as children has to be cast aside. The only way you can begin to do that is by taking on real jurisdiction. That’s the fundamental basis of the jurisdiction account. It implies that we’ve got jurisdiction and that we’ve got the wherewithal and the institutional support to look after ourselves, interdependently. This doesn’t mean we will be running off and dealing with accounts in the Caribbean. This means that we’re going to be investing those resources in our communities.
What has always been interesting to me is that we always invest in pension plans and life insurance plans. None of those major industries invest in our lands. All of them were looking off-reserve. Why? Because there is greater certainty to invest off of reserve lands than on. What we want to be able to do is stand up our people and communities so that they can begin to have the jurisdiction and be able to deal with these issues.
The other fundamental premise of the jurisdiction account is that we have to be able to have exclusive jurisdiction over it so that we can begin to look after ourselves, and not a bureaucrat in Victoria or Ottawa or Edmonton or wherever the case may be.
Senator Christmas: Thank you. I’m glad you make the distinction with the trust accounts that Indigenous Services manages on behalf of First Nations. Thank you very much.
Senator Tannas: Thank you for being here, Mr. Jules.
I want to go back quickly to Bill C-45 and the excise tax discussions. You referred to them at one point as discussions and at another point as negotiations. I view “discussions” as you haven’t arrived at the will to do something; and “negotiations” are where there is a will and you’re just haggling over the terms. Are you at negotiations or discussions? I think it’s brilliant to have a deadline, because otherwise it will just be discussions. I know you’re an optimist, and I love that. Are you negotiating and there is a will on the other side to do something, or do you sense you’re still in discussions?
Mr. Jules: I want to reiterate one of my comments: The commission believes it is important for both Health Canada and Department of Finance officials to receive a broad enough mandate to help us develop a comprehensive First Nations cannabis revenue tax and regulatory system, and I’m hopeful the Senate will support our approach.
The reason for that is that at the level of discussions we’re having with Finance, there is no real mandate at this point. In order to have a mandate, they have to receive that through the minister.
Senator Tannas: I would tell you, sir, that a number of senators — I don’t want to say “gave up,” but took a leap of faith that the government would deliver this. I think you have the full support of the Senate that this is a negotiation, not a discussion; and that if it turns into a discussion, we’ll hear from you in May of 2019, whereupon we consider what action we can take in the Senate.
Mr. Jules: I am an optimist. The signals we’ve received from the Department of Finance are that they want to resolve these issues. Believe me, if this doesn’t happen, you’re going to hear about it way before May or April. Thank you, senator.
The Chair: Thank you. I want to just follow up on that to be clear. It was this committee that brought forward the issue that the excise tax revenue sharing was not included in Bill C-45. We got a commitment from the government that they would work towards repairing that, fixing it, because it was a lost opportunity. From what you’re telling us, you’re in what we hope are negotiations. In your presentation, you mentioned that you’re hoping there will be a First Nation cannabis revenue tax regulatory framework by April 2019. I do believe the committee would support that.
We also heard from Minister Blair and Minister Philpott, I think about two weeks ago, at which point this was brought up again, and we then decided we would invite the Minister of Finance to the committee, so we should be able to follow up directly with the committee.
I believe that we are all working towards a goal to see something by April of 2019, even if it is just the cannabis piece itself. You were talking about cannabis, tobacco and gasoline. Were you anticipating the extension of that would go into some kind of action by April 2019, or are you anticipating it would be focused on cannabis?
Mr. Jules: As you can tell by my presentation, I have a terrible imagination, and it isn’t bound by just a couple of things. It’s bound by the world. My view is that when you have the opportunity to have that level of discussion, which doesn’t happen very often, you have to plant the seed of optimism in those discussions.
A key part of it is Health Canada as well. I met briefly with the gentleman last week here in Ottawa, and I will be meeting with him this afternoon for about an hour. From our brief discussion, he was very happy at the level of thought that we’ve been pursuing in terms of the rules and the regulatory regime where, ultimately, the legislation will have to rest.
The partnership, ultimately, is the Department of Finance on the tax component. It’s relatively simple. It will be legislative amendments so that we can be part of the excise tax sharing formula. First Nations were left out of that, as we mentioned. Then with Health Canada, it’s going to be how do you develop all of the rules and regulations that would apply on reserve lands and, potentially, even off those lands as well?
I believe that the message I’ve got is that they got the message from the Senate, and we’re using that, obviously, in our discussions. I am hopeful, though, that in our deliberations with Finance, as a policy objective, that Finance, for the first time, will include tobacco and will include gasoline, ultimately.
The Chair: On behalf of all the members of the committee, I would like to thank you, Mr. Jules, for appearing before this committee and updating us on the progress that has been made, and also informing us of what might be coming in the future. It looks very exciting.
Mr. Jules: One more thing: Just before Christmas, each of you senators will get a copy of this incredible story.
The Chair: Thank you.
(The committee adjourned.)