Proceedings of the Standing Senate Committee on
Aboriginal Peoples

Issue 6 - Evidence - Meeting of September 28, 2006 - Afternoon

THUNDER BAY, Thursday, September 28, 2006

The Standing Senate Committee on Aboriginal Peoples met this day at 1:29 p.m. to examine and report on the involvement of Aboriginal communities and businesses in economic development activities in Canada.

Senator Gerry St. Germain (Chairman) in the chair.


The Chairman: Ladies and gentlemen, the Senate Standing Committee on Aboriginal Peoples is authorized to examine and report on the involvement of Aboriginal communities and business and economic development activities in Canada. We are honoured to be here in Thunder Bay.

Senators, we have before us as a panel, Charlie Lauer, Assistant Deputy Minister with the Ontario Ministry of Natural Resources, Dave Laderoute, Manager of the Thunder Bay area team with the Ontario Ministry of Northern Development and Mines, and Lesley Stefureak, Policy Advisor on Aboriginal Issues with FedNor.

Lesley Stefureak, Policy Advisor on Aboriginal Issues, FedNor: I am sitting in for Rob Stinchcombe.

Charlie Lauer, Assistant Deputy Minister, Ontario Ministry of Natural Resources: I am going to go through some slides that begin with the Ontario Ministry of Natural Resources presentation. The Ministry of Natural Resources is the steward of Ontario's forestry, fisheries, wildlife, provincial parks, Crown lands and Crown waters. Ontario is 87 per cent Crown land. Some other provinces might have different ministries for each of those sections; for instance, a ministry just dealing with forestry, or a ministry just dealing with fisheries and wildlife and parks. In Ontario, they are combined into one ministry, the Ministry of Natural Resources. Our vision is a healthy environment through sustainable development.

Our ministry faces a number of challenges and relative to the subject matter here today, often times the Aboriginal community capacity and funding are barriers to effectively engaging and working with proponents or government on the development of projects. Secondly, the differing views between the government and the First Nations on the nature and scope of existing rights or jurisdictional issues will often drive us off the agenda of trying to sort out some economic development opportunities. Often, the discussion is driven off track and taken over by the debate around rights. A third challenge for us is that the one-size-fits-all approach does not always meet the needs of the very diverse Aboriginal communities and natural resources. It is a huge province from north to south. We have very remote communities, we have communities in the developed South, and the resource base is very different in those places.

The next few pages illustrate some of the success we have had in working with First Nations on economic development opportunities. The Whitefeather Forest Land Use Strategy was done with the Pikangikum First Nation, which is in Northwestern Ontario. This is the first ever in Ontario community-led land use planning process with a First Nation community. Through a series of open houses and working with the general public, environmental groups and industry, the community, in cooperation with the MNR have developed a land use strategy for their community. This strategy outlines areas where there will be parks and protected areas, where there would be opportunities for development, whether that is mining or forestry, where tourism activities could occur and where road access corridors would be laid out. The strategy covered areas of cultural significance that need protection. We laid out a land use strategy as a foundation for proceeding with economic development opportunities.

The second is the Anishinabek/Ontario Resource Council. This is an organization of the Union of Ontario Indians, which is the treaty organization that represents the Robinson Superior and Robinson Huron communities. This high- level discussion group talks about broad issues and shares information. It is not designed to address an individual problem at an individual community. If we see the same sort of issue come up across a number of communities, we will talk about some solutions that might be of benefit to their member communities across the province.

The third item is the Anishinabek Ontario Fisheries Resource Centre. Oftentimes, in dealing with First Nations on economic development opportunities, there is great debate about the nature of the biological data and the information that available. Sometimes there is a concern that someone might not believe the numbers that somebody is putting on the table. In this case, the Ontario government has put funding into the Fisheries Resource Centre that employs First Nation biologists and technicians. On behalf of a First Nation community, they actually come out, do the fisheries research work and produce their own data, so that when they come to the table they will be able to have confidence in the numbers, and not have to trust that someone else's numbers are the ones that they have to use.

The next item on the list concerns commercial fishing agreements. We have many of these across the province where we have worked with the commercial fishing industry. Oftentimes government has actually purchased quota from the non-native commercial fishery and provided that quota to Aboriginal fisheries to enhance their economic opportunities.

The next item is commercial trapping agreements. We have trapping agreements with all of the major provincial treaty organizations in Ontario: the Nishnawbe Aski Treaty No. 9, the Grand Council Treaty No. 3, and the Union of Ontario Indians. These organizations deliver all of the administrative services and functions related to the trapping industry such as the issuing of the licences, the education programs around trapping, working with our folks in terms of establishing seasons and quotas, and the assignment of trap lines.

Through Ontario's Environmental Assessment Act, a condition was placed on MNR for forestry activities that require us to negotiate and work with Aboriginal peoples on identifying opportunities that will provide more benefit to them because of forest management activities in Ontario. In 1986, First Nations people harvested about 100,000 cubic metres of wood. In 2003, that allocation was up over 2 million cubic meters and they now harvest over 600,000 cubic metres of that wood. That illustrates another success story.

The next item focuses on Aboriginal youth employment. The First Nation Ranger Program is a cooperative program involving colleges, industry and government. It is run like a summer camp. The initiative is a work camp and Aboriginal work in various resource related activities through the summer and learn about those items. We now have four camps across Northern Ontario and over 100 youth participate in the initiative. The real bonus is that we are starting to see young graduates of that initiative go to college and university resource development programs. That initiative is a real plus for building capacity for the future.

Another success story is the Eagles Earth-Nagagamisis Signature Site, which is a cooperative, with MNR and First Nations. That co-op resulted in a multi-million dollar tourism facility.

Waterpower, the growth in renewable energy and the promotion of additional waterpower development are important items on Ontario's agenda. In our site release strategy, there is provision for preferential weighting for proponents who actively seek and involve Aboriginal partnerships.

The last item on the success list is the federal-provincial CORDA program, in which both Canada and Ontario are putting $500,000 to help promote resource development activities.

In terms of economic development, the first ingredient for success is to focus on practical and realistic solutions. Where we focus on things that we can control and talk about and work together, and set aside the debate about rights and jurisdictional issues, we can have success on the economic development side. Often one of the key things is that we can take the other discussions to an alternative table. That is a key point. Obviously, the First Nations want to continue to discuss those items, but when we are trying to deal just with the economic aspects, it is nice to have another table.

The second item is identifying the communities' interests and needs. Our experience is that we achieve the best results at the local level. We have 25 district offices spread all across the province, and people at the local level have regular and informal contact with First Nations people. These people develop a personal relationship and establish some trust, and get to understand the community needs. We find we have our best success at that local level.

The third item on the list is identifying common interests, values and goals. When our people sit down and build a relationship, they find common ground in conserving and protecting the land. They understand that there is common ground in being good stewards of the resource while recognizing the desirability of economic growth. We have had very good success when we find those areas of common interest.

The last two ingredients for success include the requirement for appropriate resourcing to Aboriginal communities to help with that capacity. We need to focus attention on that issue. The last item is that we need federal and provincial coordination and cooperation to make economic development opportunities proceed smoothly.

Dave Laderoute, Manager, Thunder Bay area team, Ontario Ministry of Northern Development and Mines: Thank you for the opportunity to speak today. I represent the Ontario Ministry of Northern Development and Mines.

As is implied by the name of our ministry, we have two major business areas; we have Northern development, of which economic development is an important part and we have mining. Those two business areas are distinct, but they are both included in the same ministry. As Mr. Lauer mentioned, in other provinces you may find those business areas organized somewhat differently.

The Northern development part of our ministry has a mandate to conduct its business in Northern Ontario. Northern Ontario is defined as the area north of the Muskokas. For those of you not familiar with the geography of Ontario, that represents the northern most 90 per cent of Ontario. It is the only part of the Ontario government that is actually organised in a regional way. Northern Ontario, although it is very, very large, actually only includes about 6 per cent of the province's population, just over 800,000 people, and 80,000 of those people are Aboriginal, representing 4.3 per cent of the province's population. Even though the area represents most of the province's land mass, it represents a very small portion of its population. Although the population is widely dispersed, it represents a large proportion of the province's Aboriginal people. That number is based on 2001 census data and it is approximate, because the participation rate of Aboriginal people in the census is not necessarily very high. Anecdotally, I have an employee who was a former band councillor at a Northern Ontario First Nation, who tells me that he estimates the census participation rate in his community in the order of 10 per cent.

Slide number 3 describes our business areas and the work of our Northern development division. We focus on supporting economic development in Northern Ontario and we are involved with things like public infrastructure and transportation through the Ontario Northland Transportation Commission.

The mining side of our ministry manages all of Ontario's mining lands. That part of our ministry actually covers the entire province in terms of mining and certainly supports mineral investment and the development of the province's mineral resources.

There is a considerable interaction between our ministry and Natural Resources Canada. Perhaps a useful way of looking at it is that our mines division administers anything that is in the province's bedrock, and Natural Resources administers anything that sits on top of the bedrock. That is probably a good general way of making a distinction between the two ministries.

Slide number 4 illustrates mineral developments and some of the activities with particular reference to Aboriginal people. We certainly work closely with our provincial partners, for example, Natural Resources and our Ontario Secretariat for Aboriginal Affairs, OSAA. We administer general mineral development programs and services. We have geologists who try to understand the province's geology and communicate that to the mining industry. We have people who administer the province's mining lands, that is staking of mining claims and their administration.

We have a mineral development strategy that has specific recommendations and commitments that address Aboriginal people in the province. As concerns community level engagement and memoranda of cooperation, our folks in our mines and minerals division really try to communicate and build relationships with Aboriginal people and First Nation communities in the province. We conduct forums to give Aboriginal people an opportunity to interact with the professionals from the mining industry.

Slide five speaks to the broader economic development envelope. Again, we administer a wide range of general economic development programs and services, and we do so in partnership with other provincial ministries such as Economic Development and Trade and the Ministry of Tourism. We also work very closely with our federal colleagues at FedNor. We have quite a bit of interaction across with our FedNor colleagues.

When we discuss Aboriginal economic development, we have examples in our Far North Northern Development Advisor. The Far North is defined by the limit of commercial forestry in the province. Almost exclusively Aboriginal people populate the area. They live in the remote communities that are typically accessible only by air or winter roads. It has a low population density and certainly is the subject of increasing interest over its resources and its environmental values.

We do a variety of other specific activities related to Aboriginal economic development. Our Northern Ontario Heritage Fund Corporation is a funding agency for Northern Ontario and has since October 2003, invested over $11 million in 60 projects related specifically to Aboriginal economic development. Many of those partnerships are with FedNor.

Our Northern Development councils are bodies that have been established to give the Minister of Northern Development and Mines advice on Northern issues. They include a significant component of Aboriginal economic and community development.

Slide six speaks to the challenges we meet as we apply those business areas to the province. Some of my comments will echo what Mr. Lauer mentioned previously; communications and mutual understanding are in themselves a challenge because there is a culture gap between non-Aboriginal and Aboriginal people. We work very hard at trying to close those gaps.

We find that the capacity for Aboriginal and First Nations to be involved in economic development activities can be limited. To give an example, hiring a consultant to undertake a feasibility study or help develop a business plan can be an expensive proposition and can stretch the capacity of First Nations to undertake a project. The province is addressing some unresolved relationship issues and focussing on the involvement of Aboriginal people in decisions that affect their lives.

We find that community expectations are important to understand. This does not apply just to Aboriginal communities but non-Aboriginal communities as well. If a community does not understand a mining development, or a forestry development, or a tourism development, it may develop unrealistic expectations about the development. Mr. Lauer touched on this one as well; the relative roles and responsibilities of the federal and provincial governments sometimes can be complicated and can present challenges at times.

Finally, differing views on rights and jurisdictional issues can sidetrack discussions. What starts as a project focused on a particular aspect of economic development can become sidetracked into discussions about rights and jurisdiction.

We learned some interesting and very useful lessons from this study. Meaningful communication leads to informed consultation. It is very important. Communication has to be initiated early in the case of any particular development, and it has to be sustained. It becomes easier as relationships grow, certainly. It is important to nurture relationships. We point out that relationships are with people and with communities, not just organizations. There is sometimes a tendency for both government and the private sector to want to talk to a body or an organization, and we find that the most productive relationships are those that focus on the people and the communities.

Capacity building is necessary on both sides, not just for Aboriginal communities, but also for the government and for the private sector to be able to participate collectively in economic development activities. It is very important to make commitments and follow up on them, because this helps address the issue of community expectations.

Finally, it is important to be patient and not give up. Along the way, everybody will occasionally make mistakes and one has to appreciate that progress in many cases can be incremental, it will occur, but it will not necessarily occur with the speed that everybody involved would like.

On the last slide, we suggest that investments for community infrastructure, and particularly winter roads or all- season roads, are important to support economic development in the Far North.

Communities would benefit from assistance to participate in economic development that includes funding to support capacity, to be involved, and actual direct funding for development.

We think it is particularly important to invest in Aboriginal education, particularly kindergarten to Grade 12. It is important to invest in skills development to assist Aboriginal people to participate in development activities. A recent report from the Caledon Institute speaks to Aboriginal achievement in post-secondary education.

Mary Ellen Ripley, Acting Manager of Program Delivery for Northwestern Ontario, FedNor: Mr. Chair, it is good to be here this afternoon. I just want to pass my regrets from Rob Stinchcombe, the manager for the Northwest unit and the sector. There was a loss in his family this week. He was looking forward to this discussion and open conversation about how we are involved with working with Aboriginal peoples and other funding agencies to promote sustainable economic development within the communities. Lesley Stefureak will elaborate on our policies.

Ms. Stefureak: I have been with FedNor for five years, and I focus primarily in program delivery and now in policy development for the Aboriginal portfolio. In the past, I worked in the Nishnawbe-Aski Nation territories, so if you find that I am drawing on examples from there that is why.

On behalf of FedNor, I appreciate the opportunity to update the committee on the activities of FedNor and the various initiatives in which we have been involved. I am going to be brief, and I hope that there is time for ample questions later.

We are a part of Industry Canada and we are responsible for economic development in Northern Ontario. At this time, we are responsible for delivering three programs that include the Northern Ontario Development Fund, the Eastern Ontario Development Fund, and the Community Futures Program. For the purposes of your interests, I will focus on the Community Futures Program and the Northern Ontario Development program. I will be happy to take questions about the Eastern Ontario Fund if time permits.

The Northern Ontario Development Program supports six key areas in our corporate business plan: community economic development, innovation and technology, telecommunications, infrastructure and applications, trade and tourism, human capital, and business financing. Over the past five years, for Aboriginal projects, we have had the opportunity to partner and contribute approximately $52 million, over those six target areas. Mr. Lauer highlighted the Whitefeather Forest Initiative. FedNor has been a partner during the six years of that initiative. That project began to develop and assess the forestry potential in the Whitefeather forest area with the Pikangikum First Nation. This initiative has developed to the point where the land use strategy, as indicated, has been approved by the Ministry of Natural Resources, and continues to develop towards a sustainable forestry licence. It is a great example of a First Nation taking a community development approach. They have a vision, and are really taking the investment, engaging federal and provincial, and private sectors partners to make that vision come true.

A key factor in FedNor's partnership with the Whitefeather Forest initiative is the community involvement in driving the vision to economic sustainability for their community. This First Nation has been particularly innovative in developing another partnership with another First Nation, Wabigoon Lake Ojibway Nation, to plan the production and marketing of value added forest products. They are focussing on a forestry licence and diversifying the opportunities in their vision. We look forward to and continue to support the ongoing success in the implementation of this initiative.

Another long-term investment that FedNor has made is with the Kasabonika Lake First Nation and their prospects in renewing their economy around mineral development. This First Nation is located on a greenstone belt, and their traditional territory is identified as having mineral potential from iron ore to diamonds. The community came together and developed a vision for economic renewal based on opportunities and value added. FedNor went to work with Kasabonika Lake First Nation on a community based approach to economic development, specifically to support a mentorship project developing First Nation expertise to sustain business ventures related to mineral development. An example is expediting services such as prospecting, fuel provision, and accommodation for prospectors and so on. This is another good example of how the federal government and the province have really partnered to support a First Nation in its resource development initiative. We have worked very closely in both of these initiatives with both the Ministry of Natural Resources and the Ministry of Northern Development and Mines. Our support has provided expertise to facilitate the First Nation to negotiate annual memorandums of understanding with national and multi- national corporations such as De Beers and Goldcorp to continue their ventures.

In this fiscal year, FedNor is focusing the community economic development initiatives and efforts to be more proactive and strategic, focusing on three priority areas in the CED area that will hopefully set the intent to result in long-term economic benefits and wealth creation. The priority areas are community strategic planning, implementation of community plans, and community economic infrastructure.

FedNor is responsible for delivering the Community Futures Program throughout Ontario. There are 268 national Community Futures Development Corporations, and FedNor is responsible for 61 in Ontario. We now have full coverage in Ontario with 24 in the North and 37 in the South. There are five Community Futures Development Corporations in Ontario that service Aboriginal peoples exclusively. They are the Nishnawbe-Aski Nation Development Fund, the Waubetek and Wakenagun on the James Bay Coast and Tecumseh and Two Rivers. They share a mandate to provide strategic community planning, repayable financing, and a variety of business services for small to medium enterprises and social enterprises. For each dollar invested by CFDC, an additional $1.38 is leveraged from other sources. There has been great success in the program through the investment fund, and of course, we provide the operating dollars for these organizations. There is also a strong partnership talking about investment between the CFDCs and Aboriginal capital corporations. We work closely with Aboriginal Business Canada, and coordinate our efforts in maximizing access to capital for Aboriginal organizations. Our officers work closely with the Community Futures Development Corporation to encourage innovative approaches to enhance economic development initiatives. A particular example of partnering between FedNor and an Aboriginal CF is providing additional resources for First Nations in their catchment area. FedNor provides additional expertise for resource development initiatives, whether tourism or mineral or forestry initiatives, but providing extra access to expertise.

In summary, here are some of the key factors in our programming and our partnerships with First Nation proponents. Number one, it must be a community driven commitment. The two examples of Pikangikum and Kasabonika are great examples. The community drives them, and we respond to what the community identifies as its needs. There must be a willingness to take a high risk in partnerships with for-profit enterprises. If there is a long-term benefit, there must be the willingness to support that initiative. A key point for success is collaboration between First Nations, other government and industry partners. There must be a long-term relationship between First Nations and funding partners. Other panellists have mentioned how the federal and provincial governments work together.

A constant challenge that I hear is that they have a long-term vision but have to apply to different government agencies, year after year after year. It is a challenge to keep the momentum going while convincing the authorities that it is a long-term investment. You have to be there from day one and the results might not materialize for five years.

Another primary challenge is continual support for training and capacity building. There is a very able and willing work force within First Nations that needs support in developing necessary skills to make the types of examples that I outlined sustainable and successful. Within FedNor we are working with colleges and universities in Northern Ontario to explore innovative approaches to increasing the access to education.

One example is that FedNor has worked with a number of Aboriginal partners to implement high-speed Internet to communities. This was seen as a critical piece to the use of information and communication technology applications that will ensure capacity at the community level. I see there is a real gap there. We see these long-term opportunities, and the training needs to start now so we need support to implement those applications.

In conclusion, FedNor works closely with our First Nation partners and has a unique bottom-up meets top-down approach to community economic development, which ensures that national initiatives are delivered in a way that is tailored and adjusted to partners' needs.

Senator Sibbeston: Mr. Lauer, I take it you are the highest representative of the Government in Ontario here today before us?

Mr. Lauer: Yes, I would say so.

Senator Sibbeston: This morning we heard from Deputy Grand Chief Terry Waboose, who informed us that the Aboriginal people need to be involved in economic development. He informed us that in order to develop they need to have recognized and ensured jurisdiction with a provincial-territorial like governance authority. He was talking about Nunavut, and the things that have been achieved by Aboriginal peoples through the land claims process that happened in the Northwest Territories, the Yukon, to people like the Nishnawbe. He referred to land claims that have provided for lands, and control over resources and money. Secondly, he talked about our constitutionally recognised and court tested rights in the land.

Right off the bat you said 80 per cent of Crown land, and they would argue with you that it is not necessarily all Crown land, it is their land in part. Thirdly, he talked about wanting self-government.

Aboriginal people in other parts of the country have achieved these things and it is the kind most modern, most up- to-date recognition and provision given by governments to Aboriginal people so they can succeed in their futures. It is nothing more than just what non-native people have in the country in order to succeed.

When they talk about these necessities to their future growth and expansion and survival, are these things attainable? I ask that question because obviously they will need to deal with the federal and Ontario government. From your perspective, are these things attainable at all, or are they just kind of wishing and it is going to come to naught and never, never occur?

Mr. Lauer: That is a nice easy question to start with. First, just to be clear, yes, I am the highest-ranking Ontario person here today. I am a bureaucrat, not a politician. As I described in my remarks, in the bureaucratic system and the current Ontario laws and understandings, we are trying to work through and ensure economic development opportunities as best we can. As I said, oftentimes the jurisdiction question gets in the way. Some choose to set it aside, others do not. As a bureaucratic organization, we are bound by the current laws and policies interpretation. Virtually all of Ontario is under treaty. There are some exceptions, I will say that, and there are some comprehensive land claims in Ontario, but by and large all of Ontario is under treaty. Ontario's interpretation of the treaty is that the land was ceded with certain rights afforded to the First Nation people. That is the framework within which I am trying to work, and we, as a bureaucracy, are trying to work, and trying to find opportunities where we can create opportunities.

I mentioned a few things, for instance, commercial fishing; we are and have for many years been purchasing quota from non-native fisheries and providing that to First Nation communities so that they will have an opportunity to develop a viable business. Similarly, in the forestry side of things, indicated in some of the numbers, we see how the allocation of forestry opportunities to First Nations has grown. In the past, we allocated most of the wood to large companies, and over time, we have been trying to move away from that practice. Those things are all things that we are working at without bumping, or trying not to bump up against the question of jurisdiction. We are trying to work within that framework. There are on-going discussion and past attempts with provincial, federal and tripartite organizations to address that question further. However, in terms of what we can do today, we are working within that sort of circumstance right now in Ontario.

Senator Lovelace Nicholas: Do you have any First Nations people working in your ministry?

Mr. Lauer: Yes, we do.

Senator Lovelace Nicholas: What per cent are women?

Mr. Lauer: I do not know the answer to that question.

The Chairman: Do you know what per cent is Aboriginal in your departments?

Mr. Lauer: I do not know.

Mr. Laderoute: On behalf of the Ontario Ministry of Northern Development and Mines, yes, we also have Aboriginal people working in the ministry. In fact, one of my employees is an Aboriginal person. Like Mr. Lauer, though, I do not have specific numbers available.

Senator Hubley: Mr. Lauer, I want to clarify something on your slide covering your successes. You talk about developing partnerships — the ministry has developed partnerships with different areas — and you have worked on different projects. Has there been an economic spinoff from any of those partnerships and relationships that you have built here?

Mr. Lauer: Yes, absolutely, in terms of employment and businesses flourishing.

Senator Hubley: Is the commercial fishery one of those areas where you have seen advancement in economic development for the Aboriginal?

Mr. Lauer: Yes, there has been tremendous growth in the Aboriginal commercial fishery in Ontario.

Senator Hubley: Has that benefited the Aboriginal peoples?

Mr. Lauer: In terms of employment and economic opportunity, yes, I would say so.

Senator Hubley: Do you have any numbers to support that? Do you do any follow-up or does that perhaps fall to somebody else?

Mr. Lauer: I do not have those numbers with me today, but we have numbers, not unlike forestry: the number of kilograms of fish harvested and those sorts of things. The economics of how you do the multiplier is not necessarily our business, but we can provide that kind of information in terms of total harvest and those sorts of things. Again, there would be multiplier factors.

Senator Hubley: I have one other quick question. We have seen great successes in Aboriginal businesses since we have started our study. We can point to one, two, three, four, five of the things that they identify. The vision is important. That vision needs to be followed up with leadership, usually with community or several councils coming together. The recognition of need for expertise around their vision meant sometimes hiring outside of their community. Partnerships were probably really important. Then we go to training and infrastructure.

Ms. Stefureak, your presentation gave me the impression that perhaps you were closer to the ground up than the top down. What facilities do you have? Having seen potential, where can you go for all those other necessities to make that project or that community initiative come to the fore?

Ms. Stefureak: That is a challenge. If I put my program delivery hat on, in both the examples I profiled, I encourage the proponent to bring all the provincial and federal partners together as well as industry support to discuss the project, the vision, partnerships and the ultimate outcome, to see who can fit where in their programming.

More often than not, the nice thing about FedNor's programming is that we are flexible. We try to fill whatever need is there, if it is within our terms and conditions. We have had great success partnering with the province, Indian and Northern Affairs Canada and Aboriginal Business Canada. I think it is important to have everybody at the same table.

For one of these potentially large projects and opportunities, I recommend that the proponent work jointly with all the possible agencies in funding if there is the opportunity, rather than applying to every organization because that is a challenge.

Senator Hubley: We heard some concern about — I do not want to use the word discrimination — scepticism on behalf of Aboriginal groups that would like to have more of a welcoming than they receive when it comes to provincial and federal governments. That seemed to be one issue they felt was an impediment to their success. Can you comment on that? I do not know what kind of a comment I am looking for, but I am looking for sensitivity to the concern that Aboriginal businesses may feel this scepticism, and your role in dispelling that.

Ms. Stefureak: My role in dispelling that, and I think our organization's role, is the support we provide for the Aboriginal community through Aboriginal futures development corporations. For instance, because the geographic area is large, it is a challenge. However, individuals can contact Aboriginal organizations that are supported by FedNor to provide business development or community planning support. In terms of contacting government organizations, we also have identified leads in our organization that work specifically with Aboriginal communities, First Nations and Aboriginal organizations. Those people are identified and any calls or inquiries are directed to those people. Then we do our best from that.

Mr. Lauer: As I mentioned in my remarks, our best success seems to be at the local level. We have offices all over Ontario, in Red Lake, Sioux Lookout, Marathon, and in small communities close to First Nation communities. We build up that relationship by living and working together, and over time we build that trust so hopefully there is not that sense or feeling of scepticism when someone walks in the door, because the relationship has been developed and built up over time.

Senator Peterson: You indicated that jurisdictional disputes impact on the possibility of economic development with the First Nation people. Does that impact include traditional lands as well?

Mr. Lauer: Help me with your definition of traditional lands?

Senator Peterson: I think it has been defined as where they are, where they have settled, where they have been a part of, rather than the larger areas that are put into treaty rights, which still have not been solved yet, but they are in one traditional area. Does development impact them more so than if there was something done over here?

Mr. Lauer: From the legal basis in Ontario, there is reserve land, which is clearly identified, and there is Crown land. Often a reserve will say this is our traditional area which spills onto Crown land. That is their area of concern more often than something outside of that traditional area, no doubt about that. That does become the subject of a debate.

From a legal standpoint, though, generally in Ontario, and again there are a few exceptions, those traditional areas are not legally Aboriginal lands. They are an identified area of interest, which we would obviously take into account in the consultation process and the development process.

Senator Peterson: I understand a lot of the northern reserve land in Ontario is developed by the private sector. In those particular areas, is the private sector encouraged to engage with the First Nations to be a part of the solution rather than risk court challenges?

Mr. Lauer: In Ontario there are legal requirements to do that under our Canadian Environmental Assessment Act. For instance, with a forest company, when they develop a forest management plan, they have to go through a legal planning process. That planning process clearly outlines the requirements to consult with First Nations and discuss with First Nations as they develop forest management plans. Our legal set-up also provides for development of a customised consultation process with the First Nation. If they do not want to participate in what I call the standard consultation process, our process outlines the provision for a customized consultation process. Term and condition 34 outlined in my comment was a legal requirement for the Ontario Ministry of Natural Resources to negotiate and work with First Nations to help achieve a more — I believe the words are — equitable share in the economic benefits from forestry in Ontario. Those sorts of legal provisions are in Ontario.

Senator Peterson: Getting back to the resource base again, the province receives the taxation revenue from that. Has there ever been any discussion about allocating a small portion of that revenue to affected people for future economic development?

Mr. Lauer: That is on the table all the time. First Nations have raised that issue many times, whether it is forestry, mining, or any of the resources in terms of a resource-benefits-sharing or revenue-sharing stream. To date, Ontario has not gone there, but my understanding is that it is clearly on the table and actively being discussed.

Mr. Laderoute: If I can add to that, with respect to the private sector, and particularly as one goes farther north in Ontario, beyond the limit of commercial forestry, mining becomes the predominant resource activity. Our ministry, in partnership with industry organizations such as the Ontario Prospectors Association and the Ontario Mining Association, have worked hard for a number of years now to encourage mining companies to engage First Nations, as I mentioned during my presentation, early on in the process, and to keep them engaged. The Ontario Prospectors Association, for example, has developed a code of best practices for prospectors. Many activities conducted by these companies would not trigger an environmental assessment, for example, until much further along in the process if they are only staking claims or prospecting: very low level geological exploration. We have worked hard to encourage mining companies to do an environmental assessment. Mining companies themselves are also becoming proactive. For example, a mine in Northern Ontario has an agreement in place with several First Nations regarding employment and so on.

Senator Dyck: I have a short follow-up question on the jurisdictional issues and traditional land addressed by my colleagues on this side of the table. You said in some cases — the Whitefeather Forest Initiative I think was an example — you could set aside the jurisdictional issues and then proceed. Is there something unique to that situation that allowed that project to proceed, and what factors allow you to set aside those issues and proceed with economic development?

Mr. Lauer: In Ontario, what drove the Whitefeather Forest Initiative and Pikangikum was a forestry opportunity. In Ontario today, there is a line three quarters of the way up the province where beyond that line, legally no forest activity is allowed. There is no environmental assessment coverage that permits forest activity to occur. The Pikangikum First Nation is north of that line. South of that line, virtually all that land is divided up into areas that are licensed to forest companies. The situation that allowed us to end up with what has been a fabulous land-use process with a First Nation is that none of the resource is allocated to someone else already. In the southern two-thirds of the province, over the last 100 years, most of that resource has been allocated to someone else, to a big forest company or whatever. In the Pikangikum situation, the unique thing was that we were north of that area. The resource has not been allocated. We worked with the community. I can show you the map, which was their traditional land use area that they identified. Then we worked together to say where parks and protected areas would be and where the development would be. We will work towards licensing so they can do harvesting and those sorts of things. The key in that project was there was no previous allocation of resource. We can do this in the far North. In the South, we have a problem because resources have already been allocated and it is more difficult.

Senator Dyck: If we can lease land to companies, is there a way of saying you can recognize traditional land — traditional from the First Nations' perspective — almost, not like a lease, but as provisional ownership or provisional lease to use that land?

Mr. Lauer: For some of the lessons we learned and some of the activity that has gone on with the Whitefeather Forest Initiative, we are examining ways that we can move that experience to other parts of the province.

The Chairman: I would like to thank our witnesses for their answers to our questions. Unfortunately, as I have said before, time is our greatest enemy, and we must roll on.

Senators, our next witness is Byron LeClair, Economic Development Officer with the Pic River First Nation.

Byron LeClair, Economic Development Officer, Pic River First Nation: Senators, welcome to the Robinson-Superior Treaty area. It is always important from my perspective, when we have visitors from out of the area, to let them know that they are within the Robinson-Superior Treaty area, an area that I am a member of.

I thank you for your invitation. It is truly an honour to speak here. I think it reflects 20 years of hard work and experience that the Pic River First Nation has been engaged in, to be called before such a committee to present.

The Pic River First Nation is essentially located between Thunder Bay and Sault Ste. Marie on the North shore of Lake Superior. We have a thousand members in the Ojibway Nation, and around us we have an abundance of hydroelectric opportunities, forestry opportunities and tourism development.

Our involvement with economic development began 24 years ago in 1982 with the creation of the Pic River Development Corporation, a community development corporation owned and operated by the members of the Pic River First Nation. We began small. In our first year of operation we signed a third party contract to deliver firewood to local mills, and we proceeded to lose a half million dollars. It was an expensive lesson, a lesson that took a number of years to recover from.

From then we have grown: we hold three sustainable forestry licences for three different areas. We have an allocation on a fourth area. In total, Pic River Development Corporation has some 200,000 cubic metres of fibre allocated to it for the purpose of harvesting each year. We own two cable television companies, one in the Pic River First Nation and the second one in Chapleau, Ontario. We were the first community between Thunder Bay and Sault Ste. Marie to have high-speed Internet access delivered to the residents of the community. We have national and provincial fire services contracts: we provide fire suppression manpower, both to the province and to Canada. All in all, on an annual basis we create and maintain some 200 jobs.

Specifically with regard to hydro development, our experience began in 1987 with the development of the Black River Hydro Station. Black River is a 13.5-megawatt generating station that produces electricity for sale into the grid. It was developed under the old power purchase agreements with Ontario Hydro prior to the deregulation of the Ontario market.

Our next experience began was the KMG Power Corporation, which was a 5-megawatt generating station. Those two projects cost a combined $34 million to build. They are now built and operating, so we are not talking about concepts, we are not talking about pilot projects; we are talking about real and sustainable projects.

Our third undertaking, the Begetekong Power Corporation, is a $60 million hydroelectric development employing some 75 people from the region. When created, or when operating it will generate 23.5 megawatts of electricity again for sale into the grid.

These three projects combined represent $95 million in capital projects and offset 162,000 tonnes of CO2 emissions per year.

As a result of our involvement in these projects, Pic River has established a long-term non-governmental source of revenue with 50-year lifecycles, and 25-year power purchase agreements.

We are able to reinvest into community priorities, which have included the creation of a women's crisis home, our own housing program, the development of a youth centre, and a sustained near-zero unemployment rate for a number of years.

Factors that have contributed to the success of the Pic River First Nation were, first of all, access to Crown resources: in particular, emphasis on Aboriginal participation dating back to 1986, by the Ontario Ministry of Natural Resources.

A policy has been restated in the ministry today, a new site release policy. One of the primary areas of evaluating proposals for site releases is to look at the Aboriginal participation content. The ministry has been really good in terms of ensuring that local First Nations derive some benefit from the hydroelectric facilities in their traditional territory.

Obviously, one of the other factors that contribute to the success of the Pic River First Nation is normal market indicators. In Ontario, 25,000 megawatts of existing generating capacity will need to be replaced over the next 20 years. Recent support for renewable electricity in Ontario has been exhibited by provincial requests for proposals. We were one of the first hydroelectric projects selected at Umbata Falls under the new marketing process, and we were proud last November to sign a contract with the Ontario Ministry of Energy.

Obviously, willing partners for a lot of non-native companies is a new form of doing business. We would not be successful had we not been able to find new partners willing to take risks and willing to get used to the difference in cultures.

I am a small town boy. I grew up on a reserve and have lived there all my life. Our partners are from Montreal and there is what I would term, not a clash of cultures, but a learning process involved. It would not have been possible to undertake our new development had we not had a partner willing to go through that period of learning, that period of cultural exchange in which both parties come to understand each other and respect each other's desires. Our partners have demonstrated patience with respect to First Nation governance processes.

In addition, federal environmental review processes have been streamlined recently. We used to deal with several different departments concurrently. Now, under the Canadian Environmental Assessment Agency, those processes have been streamlined. We deal with one agency. The agency coordinates the federal response to all our developments. That has been a remarkable breakthrough in terms of developing these projects.

Some of the challenges that we have faced with respect to development: One of the first and fundamental challenges that we faced when we looked at any development, not so much now, but in recent history, is a sense of disbelief by the Department of Indian and Northern Affairs when it comes to the involvement of the First Nations as equity partners in hydro development. When we developed the Wawatay Generating Station, which was a $24-million development with our partners from Toronto, we made an application to the department for funding to sustain our involvement in that particular development. It was an application for a small amount, $50,000, in the context of a $24-million project. You see the disparity.

I remember to this day, the review officer at the department looking at our non-native partner and asking our non- native partner, is this real? Always, people have looked to our partners or to people other than us to ask if the opportunity, the ability to develop these projects, was real.

After going through this process three times and having generated enough electricity to meet the residential needs of some 30,000 homes in Ontario, that is a question we should no longer need to answer. I think we have demonstrated that First Nations communities have the capacity and capability of taking on these types of developments in an independent fashion. It is always frustrating when you deal with the departments and that is one of the first questions from them.

In addition, I remember a time when I met the Minister of Indian Affairs and we were seeking support from the ministry to buy out one of our partners in one of our first developments. It was not a large application in the context of the value of the project. For a $24-million project we were looking for help in securing $2 million in equity financing that would have resulted in the First Nation owning 100 per cent of that particular development. However, the minister's response to our community, and I am quoting him, was, ``I will not let you make a bad decision for your community.''

That opportunity passed us by. Had the minister and department taken the initiative and provided us with the resources we needed to buy out our partners, our community would have received $8.1 million in dividends since 1997. It would have resulted in three permanent jobs, and it would have been a platform for major economic projects without government funding. It would have put our community on a financially self-sustaining basis in which all of our go- forward activities were self-funding.

As well, another challenge is the scaled-back federal support for green energy projects beyond what is known for the Wind Power Production Incentive, WPPI, program. Under the Liberal government there was an announcement. We expected an unveiling of the renewable power production incentive project, which would have acted as an incentive to involve other forms of renewable electricity, small hydro development, biomass and technologies like that.

Third is the loss of Aboriginal training dollars in Ontario. The department invests hundreds of thousands dollars in our community a year to educate people in university. Over the course of the last ten to fifteen years, those people have gone on to study social programs, business programs, engineering programs and things that we need in to sustain our operation. As First Nation communities, it is one thing to build these projects, but my desire is to see our community take people that we educate and bring those people back and put them in charge of running these multi-million dollar facilities. That is something that does not happen easily. It requires training and support programs.

Ontario First Nations have lost $10 million in training dollars to other provinces as a result of census data. In the context of a large federal surplus with respect to training, someone told me that the figure was upwards of $40 billion: $10 million to train these people in highly skilled technical jobs, which will result in long term permanent employment, is not a lot of money. When the benefits for a community such as ours are considered, it does not seem like a difficult thing for the federal government to do.

I was asked to make some references: I think I just started. I would like to see the department restore major economic development project funding administered by Indian and Northern Affairs Canada or Aboriginal Business Canada. I am not asking for the department to provide us with full project funding, but enough to sustain First Nation equity participation in conjunction with traditional financing. I think we have established a track record now of being able to borrow from commercial lenders a bulk of the resources required to build and operate these projects.

As well, we wait eagerly for the rollout of environmental support programs like the renewable power production incentive program that was announced under the previous government. We are proud as Canadians to take leadership roles in the international forum on many different levels, and we must commit to a leadership role when it comes to the environment.

I know in Ottawa there is a debate regarding the value of the Kyoto accord and the principles involved. To me it is a no-loss scenario to invest in Kyoto. If global warming is real and we do nothing, we all lose. If global warming is real, then adopting the Kyoto measures is the proper thing to do. However, and this seems to me the fear when you talk to policy-makers and decision-makers, if global warming is not real and we invest so much money and resources into doing something, what we are investing in making our planet cleaner, we have supported the development of new industry, and we have thrust Canada forward as a major player in renewable energy technologies. To me, we do not lose.

As well, I would like to see an Aboriginal set-aside program for the purchase of energy. In many jurisdictions like Ontario, Canada has the ability to manage its own power purchasing. Buying power from First Nation producers is good business. It gives value back to Canada in terms of electricity, electricity that it already buys by default. If you buy your power from Ontario Hydro or Ontario Power Generation, OPG, it supports First Nations. This can be done through the bidding process of Public Works and Government Services Canada.

In 2001, we approached the PWGSC with a plan to sell them our renewable energy certificates, green power. At that time I had a vision. I thought it would be a great idea if one day the Prime Minister or somebody at the House of Commons could flick the switch at the House of Commons and proclaim to the world and the nation that the power being supplied to the Hill was power produced by First Nations: power that was produced by renewable technology, was non-polluting, and that saves our planet. That would have been incredible. We did not get the contract, so we did not go forward but I think the principle is still there.

Finally, I think that Canada should restore Ontario's trade deficit. Again, the question of course is rhetorical; where is the federal surplus? What is Canada doing with the Employment Insurance contributions of employers and employees if they are not being used for training? In the face of this surplus, what does an additional $10 million for the Province of Ontario represent: not very much.

Along that same line, I think that Canada must stop the practice of downloading or making third party program delivery agreements with outside agencies. What I have seen — it is my own personal experience — is that First Nations are having difficulty increasingly in accessing EI training programs that are readily available to any other Canadian. This process of handing over EI programs to third party delivery agents has made, in our case, and I will give you a specific example, a targeted wage subsidy program a difficult thing indeed.

That concludes my remarks. I extend to all the people I present to an opportunity to come to the Pic River First Nation and see firsthand what we have accomplished in Pic River. I think it is a remarkable story that not too many people hear about. Certainly, it is a model that can be used in other communities.

The Chairman: On all your funding, your financing on the ownership of your three power projects, are they all partnered with non-Aboriginals?

Mr. LeClair: Yes: We have used three different models: Limited partnerships with one partner — Regional Power, which is owned by Metropolitan Life, is our partner on our first development. For our second development, we went with a limited partnership that involved 13 independent investors from Southern Ontario. It is a difficult monster to try to manage: keeping 13 minds on the same track has been difficult. Our third model is a limited partnership formed with Innergex from Montreal.

Senator Sibbeston: Our committee, of course, is studying what I call the phenomena of Aboriginal people in business. We have crossed the country thus far in the west and we have seen pockets of real success. In trying to determine why some Aboriginal people are successful, there appears to be different elements and different situations. In some situations Aboriginal people are close to big centres such as Vancouver, like Squamish and West Bank, where Aboriginal people are in strategic locations close to urban centres. Another area where Aboriginal people have been successful is in resource development, because land claims are finished. As an example, in the Northwest Territory they are able to use their money and also their control and ownership of lands and surface resources to their advantage. I would be interested to know, from your standpoint particularly, what are the elements that enabled you to succeed while others were not able to? Maybe discuss some of these factors: leadership, closeness to a resource, closeness to the possibility of hydro or other things such as a vision.

Mr. LeClair: We have been blessed in Pic River with a stable council. Our chief before the last election held the position for nearly 35 years, and he provided the vision. I talk to our Chief often, and he tells me that it is akin to making stone soup. I think we are all familiar with the tale of making soup from nothing to end up where we are at. He is much more in tune with how the community has developed for the last 50 years.

I think most fundamental to Pic River was addressing and dealing with social problems, particularly alcoholism and drug abuse. One thing I did not mention was that we built a holistic healing centre in our community that provides the community and the regional healing services. As my chief has put it many times, it takes a sober community to make proper decisions. I think that is one of the fortunate things our community learned early on. Generally speaking, many of our members have been sober for 30 years, and it took that first step to get where we are today.

Pic River First Nation is 800 acres in size, so I could throw a stone from one end of the reserve to the other, or I like to think so. However, when we leave the reserve boundary, we function like any company. We are able to exercise certain policies within the province, certain rights that have been contemplated and decided upon by the Supreme Court, to leverage our position into a number of resource development projects.

One of the largest changes occurred seven years ago. We are beside one of the largest gold deposits in Canada: the gold fields are an enormous development. During the peak period they employ some 2,000 people. None came from Pic River. For 20 years that was the status quo.

Our ability to meet with and discuss with business leaders on a one-to-one basis and develop that rapport, that relationship that you require to engage in some business practices, resulted in a change, and it took an American coming up here to manage the mine to make a change. He employed overnight almost 25 people based upon the relationship our chief and I were able to establish. I think rapport goes far.

We are in the middle of nowhere. Marathon is not a large community. The economic activity is resourced based, resource extraction. So much of our relationship begins with confrontation. It begins with our assertion of our right over the rights of Canadian companies who seek to exploit resources within our traditional territory. By the same token, we make that leap. We understand that government does not stop, industry does not stop, and at some point in time, compromise is required. Once we can get that to process and we are able to negotiate either revenue sharing or job creation projects, that step is a large leap forward.

When I look at other First Nations, they are challenged with getting out of that role of confrontation: with reaching compromise, and with working with either our corporate neighbours or even community neighbours as well. It is daunting and I think it all starts with leadership.

Senator Peterson: Thank you for your presentation, Mr. LeClair. You have done a tremendous job. I am interested in your power station. I presume, since you said the reserve is a little over a section of land, they are not located on it?

Mr. LeClair: No.

Senator Peterson: Where are they located? Are there open requests for proposals, RFPs, that you compete with? Are they publicized?

Mr. LeClair: Our first project, the Black River Generating Station, the $24 million development that I told you about, was a province-wide RFP. Our history began in hydro with an invitation from the Minister of Natural Resources to sit on a review panel to decide upon which company was to be awarded the right to develop. Our chief at the time, Chief Roy Meaniss, made the statement, ``I am not going to review the project: I am going to develop the project.'' We competed with 15 other companies in Ontario for the right to develop a site that was three miles from our reserve boundary. We competed against them and we won the bid to develop the project. It has been operating for 16 years. Once we leave the reserve boundary, we function like any other company. That is essentially how we got there.

Senator Peterson: You are an active partner in all these projects?

Mr. LeClair: More so now. For Umbata Falls, for example, we are the 51 per cent owner of a $60-million project. We were passive with our first development. As I put it, we learned to crawl with our first, to walk with our second, and we are now off and running with our third development.

Senator Peterson: When selling to the grid, is there a base price, a floor price, and then you go there and get out into the market?

Mr. LeClair: When we sell into the grid, the rates for the first projects were set by Ontario Hydro. It does not exist any more, but anyways, they set the price. We went through a process of evaluating the cost of developing the site, and simply made a business case whether or not it made sense to go ahead with construction.

In Ontario now, the RFP process is a competitive process. We compete against other companies when the RFPs are announced. For the first RFP for Umbata Falls, we submitted, along with I think almost 22 other submissions, a rate for the electricity sold. We were the second lowest bidder for the supply of electricity into the grid.

That being said, one thing that really gets to me is how our process, or the product that we produce, renewable electricity, is watered down compared to what I call brown generators. The price of developing hydroelectricity on the Crown resources of Canada is not the same as putting up a smoke stack and burning coal. You do it a lot cheaper with coal. We have been actively involved in the process of valuing the product that we produce now and bidding it when competitive processes arise.

The Chairman: Thank you very much, Mr. LeClair, for appearing before us today. I am from the province of British Columbia, and originally from Manitoba. This is really a part of the Aboriginal business opportunities for our Aboriginal peoples in B.C. As a matter of fact, my golfing partner is working with the Yale Nation which is in the Fraser Canyon on a project like this. It is encouraging to see that the Aboriginal community is able to capitalize on these opportunities.

If there are no other questions of Mr. LeClair, we thank you again, sir, and wish you continued success. Hopefully we can take up the invitation to visit.

Mr. LeClair: I am in the book and on the net.

The Chairman: You are in the middle of nowhere though.

Mr. LeClair: That is right.

The Chairman: I have flown over the country as a pilot a lot and I know where it is.

Mr. LeClair: We have had opportunities to bring communities from all across Canada — First Nations from the Yukon, from B.C., and the James Bay Cree — to our community to see how to do hydro. I was floored when that happened. It is a different type of technology, and I think if we can bring in people from the Yukon and Davis Inlet, we can bring in people from Ottawa.

The Chairman: After meeting people like you in the Aboriginal community, anybody who says there is not a lot of hope for our Aboriginal people is absolutely wrong. You are doing good work, God bless you, and carry on.

Mr. LeClair: Thank you.

The Chairman: That ends our hearings in Thunder Bay. We have heard excellent witnesses, and I want to thank all of the staff again who have made this trip such a success. I also wish to thank all committee members for their cooperation with the chair.

Senator Sibbeston: When we get back to Ottawa, let us not get bogged down. We need to continue the study. I also think it is important that we keep traveling across the country. We have to keep this process going because it is so exciting.

The Chairman: I have had private discussions with senators, and we will maintain the momentum. We will work diligently to produce a concise, precise report as quickly as possible so that our Aboriginal peoples will benefit hopefully from our recommendations. We must ensure that the government listens to us. Thank you.

The committee adjourned.

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