Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 4 - Evidence - Meeting of September 26, 2006 - Afternoon
SASKATOON, Tuesday, September 26, 2006
The Standing Senate Committee on Aboriginal Peoples met this day at 1:32 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.
[English]
The Chairman: The Standing Senate Committee on Aboriginal Peoples has been authorized to examine and report on the involvement of Aboriginal communities and businesses in economic development in Canada. We have heard witnesses from British Columbia, Alberta, the Northwest Territories and other parts of Canada. Today, we are honoured to be in Saskatchewan.
We have before us as a panel: Lafond Insurance and Financial Services Ltd., represented by President Lester D. Lafond. We also have Saskatchewan Indian Equity Foundation Inc., with Lucy Pelletier as chairperson, and we have SIEF Investment Inc. with Crystal McLeod, Chairman of the Board; and the Sasknative Economic Development Corporation with Greg Fofonoff as CEO.
Lester D. Lafond, President, Lafond Insurance and Financial Services Ltd.: I would like to thank the committee for the opportunity to speak on economic development issues as a First Nations person. I am a proud member of the Muskeg Lake Cree Nation. I am fortunate: I have two sons who are 21 and 19, residing here in Saskatoon.
Economic development activity has been very important to the turn-around of a number of First Nations communities and individuals in the last two decades, especially in Saskatchewan. The focus and importance of business success and First Nations governance has created a synergy which has developed into communities and individuals' desiring to succeed in their endeavours. This has been especially true in the last decade for First Nations economic development.
Besides the economic development success that can be pointed to here in Saskatchewan, one of the greatest achievements has been the employment of First Nations people in these business operations. We can point to such entities as SIGA, Creeway Gas, MLTC and others. The success of hiring and retaining these First Nations individuals indicates a deeper understanding of the adjustments necessary for a work environment. There is a greater propensity for First Nations companies to hire First Nations people. Unfortunately, we have distrust, stereotyping and quite simply racism by non-First Nations employers; I am not generalizing, but it is prevalent enough to impact the hiring of First Nations individuals. Many programs and organizations are trying to address these issues and I compliment them for their efforts.
I have been asked to indicate problems and challenges from a personal perspective. The first would be that borrowing from banks earlier in my life was difficult. As I developed my business it became easier, even when I had to change careers after an accident. I have been in business for nearly 30 years. Up until about seven or eight years ago, the greatest challenge was with First Nations clients believing I was not as capable as a non-First Nations consultant. Not until I had demonstrated continuous success in representing my clients and in developing their business plans and negotiating agreements to implement those plans did this perception end. These challenges originated because not many First Nations individuals were seen to be dealing with banks and insurance companies, operating their businesses, acquiring real estate off the reserve and negotiating agreements to finalize and implement business plans. Overcoming many of these obstacles has brought about the success of my businesses.
The following are my own views on how a First Nations individual can overcome the challenges and be successful in business. Whatever business sector an individual is in, they must be knowledgeable of the clients they will serve and knowledgeable of the sector they are participating in. They must understand their market, common business practices and business practices in the context of clients being on or off the reserve. Of course, you must have a strong background in management practices. It is important to have a general knowledge base, and post-secondary training is helpful.
I would also stress the importance of joining business organizations for whatever sector you are involved in. It is important for the interfacing of individuals and groups, and also for the knowledge you can obtain for your business. Volunteering is helpful. Never be afraid to ask for professional advice.
I was asked to indicate what has helped me to succeed. Maybe I am an anomaly. I am fortunate to have come from the Lafond-Venne clans who are members of the Muskeg Lake Cree Nation. For many generations they were both entrepreneurial individuals and leaders in our community. I had very supportive parents, a father who was very successful in farming, including the establishment of a high-quality Aberdeen Angus herd over the last 50 years. This brought me in contact with many non-First Nations producers from the community at large. I was a 4H member for 12 years, educated in terms of beef production, and met many 4H members throughout Saskatchewan. Of course, I was supported in attaining higher education.
Receiving support in my professional life from my community at Muskeg Lake was very integral to my success. Since 1983, the chief and councillors have allowed me to assist and advise them on their economic development and treaty land entitlement strategies.
We should never underestimate the contribution made by family to the success of a business. Having been blessed with two sons helps me to maintain that drive to succeed. One must put aside the feelings of being humble and put forward the characteristics that are needed for success, such as self-confidence and the ability and desire to make decisions. You must be able to take risks. I grew up as a farmer, so that came very easily to me. I have been told that I show perseverance and tenacity. My farming background gave me the great capacity to work, especially since I started driving a tractor when I was only 10 years old, so a work ethic was ingrained from an early age. I have learned to have self-control and tolerance. I have boundless optimism in this great country of ours when we are challenged. I have always sought experienced and knowledgeable people to give me advice in the specific areas in which I was involved.
I have both inherited and developed over my lifetime leadership skills and a dynamic personality, as reflected by the awards and recognition I have received from different organizations in my community. I have had opportunities to travel across Canada and the United States, looking at both tribal and individual business developments. Many of these trips I paid for myself because I wanted to learn from these visits.
The recommendations I put forward are: support the land settlement process, including more urban reserves; do not select specific sectors to support, since all sectors are important; make sure equity programs are available for both First Nations entities and individuals, since this is vital to the success of First Nations communities and individuals; do not have equity programs that are restricted by job numbers. The need to produce so many jobs for X dollars limits us in Western Canada, especially in the resource sector. For example, agriculture, forestry and mining require high capitalization.
The continued support and development of First Nations institutions in the field of economic development is crucial, such as Saskatchewan Indian Equity Foundation, First Nations Bank, Saskatchewan Indian Institute of Technology, First Nations University of Canada, First Nations Ag Council of Saskatchewan.
Last, develop and create more flexible tax treaties with First Nations governments, such as property and school taxes: consumer taxes that can become revenue to be utilized by First Nations. A level playing field does not exist in Canada because of all the taxes imposed by different levels of government.
Lucy Pelletier, Chairperson, Saskatchewan Indian Equity Foundation Board: Good afternoon, Senate Standing Committee members, distinguished guests and the general public. On behalf of the Saskatchewan Indian Equity Foundation Inc., I am honoured to have this opportunity to give a presentation to your Committee on Aboriginal Peoples this afternoon.
I am a Cree/Saulteaux member of the Cowessess First Nation. I have been serving as the chairperson of SIEF for the past three years. I have an extensive background in community development, having had 25 years of practical experience working at the grassroots level. The purpose of my presentation today is to provide a brief description of SIEF and the role it plays in the Saskatchewan territory and its regional economic development strategies, in addition to providing our insight on the conditions and barriers to Aboriginal economic development. My presentation will focus on the lending aspects of our company and my colleague Crystal McLeod will focus on the investment activity.
Established in 1986, SIEF is one of 59 Aboriginal financial institutions in Canada that provide business loans and services in addition to investment opportunities to First Nations people and communities in Saskatchewan. We are a non-profit class "B" Aboriginal lending institution that manages a loan portfolio of approximately $5 million and an investment portfolio of approximately $8 million. We are an affiliate institution of FSIN and we are owned by its members, the 75 First Nations of Saskatchewan.
In the past five years SIEF was mandated by its members, with the encouragement and advocacy of FSIN, to review and strengthen the economic sustainability of its Aboriginal financial institution. Thus the merger of the Saskatchewan Indian Loan Company, or SILCO, which is an AFI, and Inpro West Investments was completed in 2003. In 2006, the company has emerged with a refreshed corporate image, including innovative governance and operational efficiencies. The merger facilitated renewed spirit as our operations were streamlined, which enabled the company to take a much more active role in developing strategies that build capacity and opportunity for economic growth. Our growth and loan loss ratios over the past three years reflect this accomplishment.
The chart included in my presentation shows loan distribution by industry sector. It illustrates that there are opportunities for further involvement of SIEF and First Nations in growth sectors of the economy. Construction and technology are target areas since they presently make up only 1 or 2 per cent of total investments and we believe we can facilitate further penetration in those industries.
Some of the problems and challenges that we face in respect to regional strategies are that we are the only AFI that exclusively represents and services First Nations and we lack comprehensive regional strategies and economic development framework. This is a result of inadequate financial and human resources, as well as an imbalance of community-based assets. There is a focus on quick-fix, short-term solutions as opposed to long-term, sustainable developments. Strategic regional gatherings would perhaps facilitate opportunities to learn, participate in and build a comprehensive framework. We would recommend that the federal government review the INAC sustainable development initiatives with input from the regions in order to begin building a comprehensive framework. We believe it is important to invest in research, consultation and development as it is a key planning tool in substantiating program or policy changes.
Another of our challenges is that, as a region, it is difficult to create strategies when only 30 to 40 per cent of First Nations can participate, Seventy per cent of First Nations communities are under remedial action with little incentive to change. It is necessary to provide resources to chiefs and councils for training. We would recommend the establishment of a steering committee that will review and evaluate the effectiveness of third party managers. We believe it is necessary to encourage and support capacity-building at the community level.
Due to the impact of treaty land entitlement, First Nations communities will be the largest land owners in the region. It is a challenge, as trustees have been established under the TLE framework, which is resulting in some First Nations, chiefs and councils being left behind in the area of governance and corporate knowledge. This could possibly be solved by educating the chiefs and councils in the area of corporate governance, as opposed to just the accountability principles. We recommend that the federal government provide continuing support and training at the band community level. We would also advise the creation of real estate and property management regimes that would have the ability to look after a First Nations' greatest asset, which is their land. Land can also be used as a leveraging asset for obtaining loans, which is something that is currently lacking.
As an AFI, we lack capital and operating subsidies compared to the CCDFs that operate with government subsidies. The reason for this is the lack of collaboration between government departments that deliver services to the AFIs for the First Nations and Metis components. To solve this problem, it will be necessary to review and make changes that will reflect a more equitable arrangement and also support ongoing operations in a consistent manner. We believe it is important to continue to work collaboratively through the National Aboriginal Capital Corporation Association of Canada to reach an equitable solution.
Aboriginal communities and individuals in this region lack equity for business development and investment. It is unfortunate that the INAC regional opportunities program was eliminated and that no other program replaced it. There needs to be a program developed with criteria that will enhance, shape and mould economic development, and we recommend that the federal government re-establish an equity program that is based on corporate methodologies and successful role models.
Individuals and communities should take time to learn and understand corporate regimes and to build capacity and have patience when investing. They should take time to build sustainable relationships with government and key stakeholders.
The Business Services Office for AFIs was eliminated in approximately 1998 and then re-established in 2005. This resulted in a loss of continuity and an inability to attract qualified human resources. The BSO should be funded as part of continuing core operations for AFIs and not as special initiatives; this is essential for business development. We advise other AFIs to research the benefits of providing support services to their respective communities.
We face challenges with governance and organizational development: One of these is unstable political environments at the community level due to unhealthy fiscal conditions. This is caused by a lack of general business and corporate knowledge and insufficient resources for training and skill development in areas of human and financial resource management. The evolution of self-government needs to be refocused to include resources to assist with basic business and economic development by reviewing the Indian Management Development Program funding, and to build capacity at the political and organizational level.
Approximately 70 per cent of Saskatchewan First Nations are under some type of remedial action with third party managers who are under no obligation to build capacity, and as a result there is no incentive to change their situation. IMDP is only available to Flexible Transfer Arrangement bands as compared to the Comprehensive Funding Arrangement, for which there is a greater need. INAC and First Nations should collaborate in a review of accountability framework, specifically in relation to third party managers. Steps should be taken to ensure that all new chiefs and councils are adequately resourced for training in fiscal management through the accountability framework. There must be capacity-building components built into agreements with third party managers.
The final issue is a shortage of human resources that is created because we lack the opportunity to increase the number of skilled tradespeople. There is not enough training spaces and funding to build skilled labour pools. When there is an availability of spaces, many people are discouraged from taking them because the training allowances are so low and often would result in a substantial decrease in income. We would recommend that every journeyman have at least three apprentices that are funded by the government. There should be a more comprehensive collaboration with external agencies to develop strategies to maximize labour force development.
Our organization is successful because we have a relationship with, and are mandated, by our First Nations communities, and because we are members of the National Aboriginal Capital Corporation Association of Canada. Through that association, all AFIs have access to support, training and other programs especially designed for Aboriginal lending institutions.
We have continued to build and foster relationships with Aboriginal, regional and national governments through FSIN, SNEDCO, ABC, INAC, First Nations and Metis Relations and NACCA. Through the support and advocacy of FSIN, SIEF has been depoliticized, which has resulted in the appointment of a professional board made up of two members from FSIN, two from the business and economic development sector, two from the agricultural sector and one from the banking and commerce sector. We have over 70 years of combined human resource expertise and we have increased our staff complement in the past couple of years. We believe in and practice good governance, and all profits generated by SIEF are returned to the company's loan portfolio to provide greater access to loan capital for our member nations.
Crystal McLeod, Chair of the Board, SIEF Investments Inc.: Good afternoon, ladies and gentlemen and Senate committee members. As chair of the board for SIEF Investments, it is my privilege and honour to be here to speak to you today about SIEF Investments and Aboriginal economic development. I am a practicing lawyer in the City of Saskatoon and have been involved in various aspects of Aboriginal economic development and investments for a number of years. I am from the Yellow Quill First Nation of Saskatchewan.
SIEF Investments Incorporated is a relatively new investments corporation that represents shareholders from the 75 First Nations of Saskatchewan. SIEF Investments has its origins in a numbered company that was purchased by SIEF from the FSIN in 2004. At that time, that numbered company held just a couple of investments. In 2005, SIEF changed the name of the numbered company to SIEF Investments Inc. We continue to transition the operations and functions of SIEF Investments from its parent company and, in time, all investments currently held by SIEF will be transferred to SIEF Investments.
This presentation will highlight all investments held by SIEF and SIEF Investments. The investment objectives and criteria for SIEF Investments is to seek capital growth and revenue from our investments, to realize governance opportunities where there is an equity investment and to create employment opportunities for Aboriginal people. One of the objectives of SIEF Investments is to grow our investment capital from $7.8 million in 2006 to a conservative estimate of $16 million by 2010. This will be accomplished by realizing capital growth in key investments and by leveraging existing capital. There is a chart included with your materials that you may refer to.
Another objective is to maintain and develop strategic investment strategies and partnerships, such as the one that we have with Westcap Management Ltd., which manages Saskatchewan's first and largest provincial labour-sponsored venture capital fund, and Crown Investment Corporation. In the past year, Crown Investment Corporation was seeking a fund manager for the First Nations and Metis Fund and it was determined, through discussions with Westcap Management Ltd., that due to SIEF's relationship with the First Nations communities, its involvement would be a great asset as a strategic partner in the fund. This new partnership will oversee the development of the First Nations and Metis Fund, which will be used to further enhance investment and business opportunities for Aboriginal people throughout Saskatchewan. We will continue to invest in companies in Saskatchewan and Canada that offer benefit to First Nations through employment, board governance, dividends and capital growth.
Another of our goals is to continue to build capacity through good governance, strategic and effective investment policies, ongoing board and employee training and development. We intend to work with and assist various levels of government to ensure that plans for regional and urban Aboriginal economic development are successful.
Our investment portfolio right now consists of a fairly large investment with the First Nations Bank of Canada. SIEF is a major shareholder in this full-service national financial institution. That institution was developed in 1996 by First Nations for First Nations, and it has operations in eight communities with four full-service branches. The bank plans to raise capital and complete the transition of the bank to Aboriginal shareholders and move into new markets across Canada. Several new branches are planned in the next few years.
We also have an investment in Big Sky Farms Inc., which is a pork producer located in Saskatchewan, and at the moment we are seeking to realize a payout on this investment. Another investment is in SIEF Real Estate Holdings. The primary holding is the new office that SIEF built in 2006 that houses SIEF and generates a lease income from other tenants. As well, we have some GICs and bonds; at a very recent strategic investment planning meeting it was decided that these funds would be invested in the near future in various sectors in Saskatchewan.
With respect to factors that have made SIEF Investments successful, I concur with everything that Lucy Pelletier, my colleague, has already set out and I will not repeat what she has said but I wish to add five points.
For First Nations to be able to participate in economic development, Canada must deal with existing social, health and housing issues. It is difficult for individuals and First Nations to be involved in economic development when they are overwhelmed with basic survival issues. I would like to refer you to page 1 of our local newspaper, the Saskatoon StarPhoenix. It describes the situation in some of Saskatchewan's First Nations communities.
Separation of business from First Nations politics is a key factor, even down at the band level. Having a board structure for a company like SIEF Investments that has the necessary skills, education, diversity and capacity to act on behalf of a First Nations investment company is necessary.
Continued success and growth will depend on future government support at all levels. It is our recommendation that the federal government not only continue to support SIEF Investments but expand its support to give SIEF Investments the opportunity to build capacity and leverage existing capital. Such funding would allow for continued growth through training and business development that would assist SIEF Investments in capitalizing on various opportunities: for example, funding to establish an investment symposium, to network more extensively, to develop marketing materials and strategies, to develop internal structures such as a website and brochures, and to train and employ more Aboriginal people such as an investment manager, which is greatly needed. For SIEF Investments to continue to grow, it is important that we are not undercapitalized but that we have the necessary resources available.
In closing, I would state that SIEF Investments should be considered a role model for any First Nations business entity that wishes to enter the field of investments. SIEF Investments is always willing to share its knowledge and lessons learned with any Aboriginal or governmental group seeking information on our operations and what makes us successful.
Greg Fofonoff, CEO, Sasknative Economic Development Corporation: Honorable senators, I would like to thank you for the opportunity to provide information to the committee about the operations of Sasknative Economic Development Corporation, or SNEDCO, which is the Aboriginal capital corporation that services Metis businesses in the province of Saskatchewan. It is not my intention to provide comprehensive information on the complex issue of economic development. There are other elements of that such as skills training and education that are very important for participation in economic development by the Metis. I will focus on SNEDCO as a business development agency serving Metis business in Saskatchewan.
I understand that there are 59 Aboriginal financial institutions in Canada. SNEDCO is one of these and has been operating since 1987. Our purpose is to use business as a key to returning the tradition of pride and self-sufficiency to Metis people.
New business ventures are being launched by Metis people in many different areas and our mandate is to assist these businesses with financing for start-ups, purchase or expansion of viable Metis-controlled small businesses in Saskatchewan.
In 1987, we were capitalized with a $5 million economic base through the Native Economic Development Program, which is now known as Aboriginal Business Canada. In the period between May, 2002 to April, 2003, we received an additional $1.5 million in loan capital.
Since our beginning in the fall of 1987, we believe we have had a tremendous impact on the Metis community. We have disbursed 1,054 loans totalling $24.4 million to 582 Metis-owned businesses. These businesses have created or maintained employment for approximately 1,730 Metis people in Saskatchewan.
Our success is our clients' success. Obviously, with our capital base, we would not have been able to continue unless the vast majority of the loans were repaid. The base funding from Aboriginal Business Canada, the federal government, has been reused/recycled several times. There is a chart in the written presentation that shows the capital received and the loans we have disbursed.
The continued assistance of the Aboriginal Business Canada program over the years is important to us so that we can continue to grow our capital base and assist other small businesses. We have three main programs: Aboriginal Capital Corporation; a Small Business Loans Program which has been around since 1987 and provides up to $250,000 per applicant; a Metis Youth Business Program which we began in June, 2005 that assists Metis youth aged 18 to 35. We also have a Business Advisory Services Program which was available from 1992 to 2003 when it was no longer funded. However, in 2005 we again received funding for this program through Aboriginal Business Canada.
Currently we have 72 loans outstanding for a value of $2.7 million. Our Business Advisory Services Program, which was mentioned by Lucy Pelletier, the chairperson of SIEF, has been very successful in the periods that it was funded. Under that program, we participated in and assisted clients with 759 business plans. The project financing associated with those business plans was over $34 million. That is also an important aspect of the corporation.
I have always felt that the money provided has been returned directly to the coffers of the federal and provincial governments. Even a fairly modest business with perhaps a payroll of $1 million returns in the neighbourhood of $250,000 in payroll deductions alone. Although taxpayers' money was used to fund our operations through Aboriginal Business Canada, a large amount in taxes has been paid by clients. In some years, in fact, the case could be made that those tax payments have easily exceeded what we received in funding from the federal government.
In my recommendations I have taken, I think, a narrower view than some of my colleagues at the table who have mentioned some different aspects of economic development.
The continued support of Aboriginal Business Canada is important to us and to all the Aboriginal capital corporations. Most would have similar stories to mine, and I view that program as important. We serve the Metis population in Saskatchewan. Statistics Canada put this number at 43,695 in 2001. They live in all areas of the province with perhaps a greater concentration in Northwest Saskatchewan where there are communities that are predominantly Metis. The rest are in urban areas and throughout the province.
Some of the challenges and the reasons that SNEDCO exists is that very many of the Metis people applying to SNEDCO have the following characteristics: The very few clients who have cash equity usually have less than $5,000, which may be sufficient for small projects but not for larger businesses. They do not have financial planning and bookkeeping skills or knowledge, although most of them do have knowledge or skills related to their proposed business. Many clients do not have a source of outside income such as employment income or a spouse's income, or wealth to cushion a downturn in business. Those clients who do have this resource have a greater chance of success. Not many of our clients have had previous business experience. For those reasons, there is very little chance of our clients' obtaining financing from a bank or credit union.
The main recommendation I would make, from my standpoint as CEO of Aboriginal Capital Corporation of SNEDCO, is the continuation of the Aboriginal Business Canada Program, which I understand is currently under review with its operating authority set to expire in March of 2008.
Senator Peterson: Mr. Lafond, I read somewhere that when First Nations people are successful within their own community, they are not viewed as a role model; they are actually looked at disdainfully, and viewed as being like the white community. Do you concur with that opinion? Do you see that happening?
Mr. Lafond: Yes, I did experience that when I was younger. It is not as prevalent today but it still exists. Communities are more successful when they have developed from a governance perspective and community-based visionary positioning and have their economic development strategies in place, which is the case in my community. That leads to success in community development and allows for individuals being supported financially and otherwise. I come from a community that has now evolved beyond that point. That attitude existed in the 1960s and 1970s. I am thankful that it does not exist today, so that my sons will not be treated in the same way as I was.
It is important to understand that progress in economic development goes hand-in-hand with governance. The strength of our government is as important as the strength of our economic development success.
Senator Peterson: You stated that young First Nations people have difficulty finding employment because of stereotyping. Now that there is a lack of skilled tradespeople, would this not be a time when we could overcome that?
Mr. Lafond: Absolutely. We have a situation where there is a great demand for workers in the business communities. However, there is a disconnect because of the skills differential between what is required and what is available. The other factor is fiscal. If you are talking about First Nations members coming in from First Nations communities to Saskatoon, the simplest things are being overlooked and I am dealing with some other organizations in trying to address that. For example, an individual may come into Saskatoon. He has a job, but he has to put up two months' rent, and he has to live for two weeks before the first pay cheque arrives. He is just coming off welfare and does not have an extended family who can assist financially. These are the kinds of issues that we need to address.
I have seen tremendous change in the last 25 years that I have been in the city of Saskatoon. In some ways, Saskatoon is an exception to other cities: it seems to be more cosmopolitan and less given to stereotyping. That does exist but it is less of a factor here than in other communities such as Prince Albert, North Battleford, Yorkton or even Regina. The opportunities are there but there is no question that there is a huge shortage of skills amongst First Nations people, and that is a major problem.
Senator Peterson: Ms. McLeod, does SIEF Investments make direct investments or do you provide funding to the First Nations Bank of Canada which makes the investments?
Ms. McLeod: We make investments directly on behalf of the Aboriginal shareholders who are the 75 First Nations of Saskatchewan. SIEF Investments will invest capital directly for their benefit. Lucy is here on behalf of SIEF, which is a lender; it is a "B" lending institution. There is a difference.
Senator Peterson: Is SIEF and First Nations Bank one and the same?
Ms. McLeod: We invest in First Nations Bank as a shareholder. SIEF Investments is a major shareholder in the First Nations Bank of Canada.
Senator Lovelace Nicholas: My question is: On a scale of one to ten, how many women are accessing your funding?
Ms. Pelletier: Are you asking how many of our clients are female?
Senator Lovelace Nicholas: Yes. On a scale of one to ten, how many is it, would you say?
Ms. Pelletier: I would say about six.
Senator Lovelace Nicholas: That is good to hear. Mr. Lafond, you mentioned that you found it difficult to get financing for your business. Could you tell us why that was? It appears to me that only First Nations will finance First Nations.
Mr. Lafond: First of all, I am talking about 30 years ago when I started out. Since then I have been involved in numerous organizations, particularly in agriculture, and we have been working with banks since 1978. What had the greatest impact on the banking community in Saskatchewan was our treaty land entitlement settlement in 1992. When you announce the transfer of a half a billion dollars to First Nations members, it attracts their attention and they actually listen, and since then they have been aggressive in changing their policies to deal with First Nations business and individuals on reserves.
Senator Hubley: Mr. Fofonoff, you mentioned a small business loans program and a youth loans program. I wonder if you would describe for me how these differ from other types of loan programs?
Mr. Fofonoff: The youth loans are at a slightly lower interest rate than our small business loans, and we have a dedicated officer to work with the youth both pre-loan and post-loan to assist in the sustainability of the business.
In terms of our small business loans, is your question how does this differ from loans offered by conventional financial institutions? I think it is a matter of how we are positioned. We like to refer to ourselves as a developmental lender. When we examine a loan opportunity, we pay attention to some of the same criteria that the banking world does, such as equity and security, and management. We also go a step further and say if the business is viable, can we live with what would be viewed as a shortfall in security or equity because there is a good indication that the business has the cash flow to support the loan and support a wage to the owner, et cetera? In some ways, you could say we take more risk but I like to say we take more time, in some cases, and try to set up the project in such a way that it has as much assistance as possible to be successful, even if that takes more time than it would with a loan application made to a conventional institution. I think our difference is that we basically have positioned ourselves as a developmental lender.
Senator Hubley: You mentioned that it may take a little longer. Do you offer assistance to the small business loan applicant? Before you answer that, does "youth" refer to age or to business experience?
Mr. Fofonoff: It refers to the ages for which that program has been designed: 18- to 35-year-olds. We do have business advisory services to provide some extra assistance in the pre-loan stage, to assist with business planning and in some cases to assist with access to other programs such as Aboriginal Business Canada or, in this province, the Clarence Campeau Development Fund, which is an equity program. This gives the business a greater chance of success.
In some cases, clients approach us with a proposal when it is not at a developed stage, and whereas at a bank that might mean it would be turned down without some additional information, we will try to do an assessment, and if the initial assessment is favourable then we will try to move forward with it, even though that does have a cost to us in terms of staff time.
Senator Hubley: In your presentation, you mentioned the characteristics of some of the Metis people who borrow from you. Can you share with us how you think those should be addressed, or does it fall to the financial institution to assess those and to make a successful or unsuccessful loan accordingly?
Mr. Fofonoff: With reference to those characteristics, there is a program in place at Aboriginal Business Canada that can assist with that but it is either sectoral or age-based in many cases, so it is not available for every client. I did mention the Clarence Campeau Development Fund that receives provincial funding and can address the equity issue, even though in some cases it is kind of a blended product; it is a zero-interest subordinated debt.
In terms of the lack of financial planning and bookkeeping skills, that can be partially addressed by some time spent with our Business Advisory Services Division. In other cases, in terms of the broader picture, support for institutions that provide business training would be useful in that respect.
The thing about the outside income, basically, is that more business development will create more wealth for families. I was in developmental lending with the Community Futures organization prior to my joining SNEDCO. One of the biggest differences is that even though the clients approaching Community Futures developmental lending agency, of which I was in charge, may have some of these characteristics, often their families could back them to a greater extent than what is available in the Metis and First Nations communities. Although the applicant does not have much money, there may be a relative with resources who can assist with equity, or in the case of a downturn in business.
Senator Dyck: Thank you for your excellent presentations this afternoon. Mr. Lafond, you were saying that one of the big initiatives here was the treaty land entitlement agreements. What would you say is the reason for the success of TLE in Saskatchewan? Why are we one of the provinces that has been successful in negotiating quite a high percentage?
Mr. Lafond: I have been known to have a sense of humour, but I will be careful. Maybe it was the good government in Ottawa.
I was asked by the business community to give a speech about two weeks after the signing of that agreement. One of the things I said is that 27 First Nations signed that agreement. Unfortunately, in 5 to 10 years there will not be 27 successes. It is to be hoped that more than 20 of them will be successful to varying degrees. As we see it today, that is the case.
There are other aspects that we should keep in mind. That agreement provided the opportunity to buy a community-based land base and the ability to use the balance of the cash for investment and community development. With respect to my First Nation, we acquired land, and we also voted the balance of our trust monies in perpetuity to be used for the benefit of our community. That kind of vision and leadership is what will sustain our future. We have been here for many thousand of years. We wanted Muskeg Lake members to be here for many more thousands of years, and that is what we are planning for.
As we continue to make investments, we make Indian Crown corporation investments and we support our individuals whether in Saskatoon, Prince Albert, Wetaskiwin, Edmonton, or wherever they are located; we assist them professionally and financially in business development.
One other thing I said at that time is that this opportunity we have with this large sum of money available to us, is our last kick at the can to be successful.
Another aspect is the partnerships that have been developed in the resource sector, such as sharing of a resource or sharing in the employment opportunities. Those agreements are important, for instance with tribal councils on behalf of their member First Nations, and through them individuals gain the opportunity to become business owners. This kind of packaging of opportunities has been successful in Saskatchewan.
Senator Merchant: I know that the availability of infrastructure is very important for economic development of an area. In the more remote areas of Saskatchewan, how should the federal government decide whether they should get involved in the development of infrastructure? Does broadband help those areas? Can you describe for us what is happening as far as economic development is concerned in the more remote areas of Saskatchewan?
Mr. Lafond: With respect to infrastructure, the government has recognized it as a requirement, whether it is for First Nations reserves in urban centres or rural areas. Unfortunately, they have not been consistent in terms of financing. We had substantial amounts of money provided by INAC for this region. However, recently it has been drastically cut so that there is now very little available for infrastructure development; for instance, in some communities it would not even be 20 per cent. When you have that kind of inconsistency, it is very difficult to promote economic development in these remote communities.
Senator Merchant: If there are viable economic opportunities available, do you think First Nations have a responsibility to have some kind of a plan to convince the federal government that it is worthwhile to assist with infrastructure in those remote areas?
Mr. Lafond: Absolutely. These are not projects that would be funded 100 per cent and there is an inherent need for First Nations to assess these opportunities and make sure that what they propose will be successful before they invest.
The Chairman: We have discussed previously the shortage of people trained in skills such as carpentry, plumbing and other trades, and we have this tremendous resource of young Aboriginal people. Is there any focus, Ms Pelletier, on attempting to convince the Government of Saskatchewan that they should be attempting to stream people into these trades at an earlier age rather than trying to train everybody in a profession?
Ms. Pelletier: You can see from my presentation that our investments in the construction area represent a very small percentage of overall investment; this is a reflection of the lack of skilled tradespeople. I agree that as well as people with professional qualifications, we need tradespeople because they are the heart of a community; they are important for community development and they sustain communities in the area of economic development because they attract projects and they have the ability to develop infrastructure. With the new labour force development strategies that have been devolved to the bands in the last couple of years, there is an opportunity to create a regional strategy in relation to those who are migrating from reserves to urban centres for employment. As Lester mentioned, they require assistance with that transition from one community to another, and welfare no longer provides that assistance. From the get-go, they have no competitive edge. Training in trades is essential to creating quality opportunities for employment.
The Chairman: Is there an opportunity at the reserve level for that kind of education? The reason I raise the topic is that I had a partner in a construction business who was a master plumber from Germany. He was very proud of this and told me that a master plumber in his community had the same status as a doctor. I think that we must start thinking along those lines here. If we do not, the void will not be filled.
I would like to thank all of you for your presentations and for responding to our questions. If any of you have information that you feel the committee should know about that you did not get an opportunity to present today, please let us know about it.
Honourable senators, I must ask you for special consideration. With us is Marianne Ironquill Meadmore, who has asked for three minutes to present a recommendation for our committee to consider. I must have your approval for her to be at the table. Is it agreed? It is unanimous.
Marianne Ironquill Meadmore, as an individual: As I only have three minutes, I will go straight to my recommendations. My topic is foetal alcohol spectrum disorder. When you are discussing economic development, this is something you need to consider since there is the possibility that many First Nations people will be incapacitated by FASD and not able to assist in economic development, or even be employed. You must be aware of what FASD is and how it may affect communities.
One of my recommendations is that native people have to understand what it is so that they can work with and around FASD to be successful in economic development, in health, in all of the things that keep our reserves peaceful. Currently, there are 32,500 large research studies on the Internet but, for some reason, people do not know about them and there is a gap in practical knowledge that we can work with on the reserves. FASD has to be taken into consideration in everything we do.
FASD affects all humanity; all children who have been subjected to alcohol during pregnancy will be born with FASD. However, it is 10 times worse for native people because of our residential school experience. When our people left the residential schools, they hit the bottle for some reason, more than anyone else. Other people were also drinking in some situations and that was producing FASD children too, but for First Nations people it was much worse, and we have almost lost a generation because of that.
When a woman drinks in the first two weeks of pregnancy, perhaps she does not know she is pregnant and has a couple of powerful drinks. That can cause facial deformities in her baby and will certainly create dead cells that will never grow again. Even drinking occasionally during pregnancy will cause this to happen. The synapses may grow crooked so that, in severe cases, reasoning will never develop; without reasoning, how can you do anything? You cannot learn a skill or become a dependable employee.
I used to teach this subject to community health workers and I asked them: of the people they worked with, how many did they believe had FASD. They said 100 per cent. These are people who work with affected families every day. Obviously, this impacts greatly on communities in all aspects. I am aware of some prominent First Nations leaders who have FASD.
There is no treatment for FASD, which is why I say we may have lost a generation.
The Chairman: Thank you, Marianne, for taking time to be here with us, and if time permits during the course of our studies, possibly we may see you again since FASD covers every aspect of life for First Nations people.
Our next witnesses are from the Saskatchewan First Nations and Métis Relations, and from the Aboriginal Human Resource Development Council of Canada.
Richard Gladue, Assistant Deputy Minister, Saskatchewan First Nations and Métis Relations: Welcome, Mr. Chairman and members of the Standing Senate Committee on Aboriginal Peoples. I would like to thank you for your visit and I appreciate the opportunity to present the position of the Government of Saskatchewan on Aboriginal economic development.
In Saskatchewan we are very aware of the importance of economic development as it relates to First Nations and Metis peoples, and we are working very hard in this area. Aboriginal people, as you know, are more economically marginalized, unemployed or underemployed than non-Aboriginal people. Unemployment and underemployment are related to unhealthy lifestyles, substance abuse, dependency on social assistance and involvement with the justice system. Much of this relates to the subject that Ms. Meadmore just spoke about. FASD is a challenge that we face in many of our communities in Saskatchewan and across Canada, and it concerns us greatly.
As you have already heard, the Aboriginal population in Saskatchewan is young and growing; there is a huge demographic shift happening in this province. People are migrating in great numbers to urban areas. From what I understand, it is somewhere between 45 and 55 per cent. The Government of Saskatchewan is working to build a future of hope in Saskatchewan so that no one is left behind and our young people remain and build their future here. Aboriginal economic development is key to the future of Saskatchewan.
I am a former tribal chief of the Meadow Lake Tribal Council, I held that position for 25 years and was involved in several economic ventures. I am also keenly aware of the value of development from a First Nations' perspective. I have been a deputy minister since January of this year.
When employment and business development opportunities for First Nations and Metis people are created, it leads to improvement in the socioeconomic conditions I referenced. Aboriginal people benefit, and the province and Canada both benefit. With this in mind, the provincial government's next major economic summit, which will be held in early 2007, will be an Aboriginal economic summit. We discussed at length whether it should be called a summit as in many respects it will be a symposium, which is defined quite differently from a summit. In partnership with Aboriginal leadership in Saskatchewan, we are inviting leaders from across the nation.
The Government of Saskatchewan already has several initiatives in place that will improve the lives of First Nations and Metis peoples. The best example I can give you is our gaming partnership with the FSIN that has resulted in several profitable casinos operated by First Nations. These casinos provide valuable economic and social benefits to First Nations and Metis peoples and, indeed, to all of Saskatchewan.
Earlier this year, two new programs were introduced that were targeted to bringing Aboriginal people further into the economic mainstream. A $5 million First Nations and Metis Economic Development Program was initiated by the Department of First Nations and Metis Relations. Also, a $20 million First Nations and Metis Fund was established by the province's Crown Investments Corporation. Applicants are required to target key strategic growth sectors such as energy and mining in order to maximize results.
I will focus a few more specific remarks on the program of the Department of First Nations and Métis Relations. This program provides grants as seed money to individuals as well as organizations, such as bands and Metis groups, to buy, set up or expand Aboriginal-owned businesses. In this program, we work in partnership with the Saskatchewan Indian Equity Foundation, a First Nations organization whose chairperson, Lucy Pelletier, addressed you earlier, and the Clarence Campeau Development Fund, which is a Metis organization. Both these organizations assisted in developing the program and are responsible for much of its administration.
However, more needs to be done and we are looking for leadership and support from the federal government in taking a much more proactive and substantive role both on and off reserves in Saskatchewan, and to honour the spirit and intent of the Kelowna First Ministers Meeting on Aboriginal Issues held in November of 2005. At that meeting the Premier of Saskatchewan, Lorne Calvert, said:
As Canadians, surely we can no longer settle for two Canadas, one for the affluent and one for the impoverished; one the envy of the world and one more closely resembling the Third World; one Canada bringing us hope and one battling despair. Whether we are federal, national, provincial or Aboriginal leaders, we must do more, we must do it better and we must do it now, and we must do it together.
Among other things, the Kelowna Accord increased expectations for concrete economic action. It is recognized that the current government, which was elected after the First Ministers Conference, may not feel bound by its results and wish to pursue a different strategy or process. However, regardless of its decision, Aboriginal economic development will not be denied. It is one of the centrepieces identified as requiring improvement by all governments at all levels.
Aboriginal economic development cannot be considered in isolation; it has to be connected to education and training, as well as labour force attachment and development. Clearly, a multi-disciplinary, integrated and coordinated approach across sectors is required. To achieve this, governments and organizations at all levels must work together. It is also imperative that the federal government set aside its traditional jurisdictional position that it only assumes fiscal responsibility on reserve. Treaty and Aboriginal rights are portable and do not end at the boundary of a reserve. The same must be said of First Nations economic development. We urge the federal government to demonstrate leadership in partnership with the Government of Saskatchewan and Aboriginal organizations to develop Aboriginal-specific programs on and off reserve.
As a first step, we recommend that the federal government restore funding to the programs that were cut in INAC's budget. INAC, along with Aboriginal leadership, must decide whether to bring back previously cut programs or establish new ones. The Government of Saskatchewan would be pleased to offer assistance in this regard. When additional federal funding is provided, it is important that Saskatchewan receives a fair share.
We also call on the federal government to fulfil its most important commitment to this province and exclude non- renewable resource revenue from the equalization formula. We want an equalization program that is adequate, responsive and fair to the people of Saskatchewan and to all Canadians. We believe that such a program would have a tremendous financial benefit to the people in this province. Aboriginal people are very much a part of that. It would result in more funding for Saskatchewan that, in turn, would be used to bolster high priorities.
A particular point I wish to make is that because of the huge migration off reserves into urban areas, we have a lot of financial pressure in Saskatchewan to be able to provide the services required. Having said that, whatever programs are developed must be targeted. We know that when federal and provincial Aboriginal economic development programs are too general, they tend to be under-utilized. In many cases, Aboriginal people cannot take advantage of these programs because they do not have the cash or equity necessary to even apply. The problem is compounded by the fact that reserve land and non-removable chattels on reserves such as homes and businesses cannot be repossessed under federal law. Banks and other lending institutions are reluctant to provide loans if individuals do not have assets as security. We urge the federal government to exercise more leadership. Aboriginal people and all Canadians will benefit as a result.
I would like to thank everyone. I look forward to your report. I welcome your questions.
Kelly Lendsay, President and CEO, Aboriginal Human Resource Development Council of Canada: Welcome to Saskatchewan. I grew up in this great province and I have had the opportunity to travel and work with First Nations, Metis and Inuit people across Canada, because we have a national mandate. I have a background steeped in economic development. I worked with Senator Dyck at the University of Saskatchewan where we helped to found the MBA specialization in indigenous business management, which was the first of its kind in North America.
I could speak to you about the challenges of markets and interest rates and those types of things. However, today what I want to do is focus on two things: People, the human capital side of economic development; and I would like to shine a light on the importance of trades and apprenticeships. My message will be around developing innovative partnership strategies for human resource and economic development.
I used to be very involved in swimming, and I was the lifeguard champion for Canada in the mid-1980s. If we wanted to train to people to swim, should we throw them all in the shallow or the deep end? I think you would agree that you would need to assess people's skills and you would say that some people should be thrown in the shallow end, some in the deep end, and others might be in chest-deep water. What do we do with Aboriginal people? We throw everybody into the shallow end. We always start at the lowest denominator, but I have seen across Canada a vast range and diversity of Aboriginal skills, talent and initiative.
What I learned through swimming is that you need to take a very pragmatic approach to how people acquire skills, otherwise they will drown. You need a coordinated approach, and certified teachers and examiners. If the Olympics were economic development, the goal is to win. In much the same way, we are competing with the world for skilled people.
I think we need to have the same pragmatic approach to how we equip our Aboriginal practitioners and our economic development officers in their ability to build partnerships. Unfortunately, that is not what is happening in Canada. Our approach to developing the Aboriginal labour market has been described by private sector members as disorganized, fragmented, with no communications plan and no coordinated strategies. As a result, we are missing many people, and people are drowning as a result of this lack of good coordination.
The council's experience in working with a number of partners across Canada has led it to conclude that the key to successful economic development is the alignment and integration of human resource strategies. They must be developed as part of economic development initiatives. There are two unique features of human resource strategies that would support economic development initiatives. The human resource strategies must reflect partnership-designed tenets that are driven by coordinated private sector and community based interests. Also, they should incorporate a sectoral approach including expertise, targets and accountability.
In 2006, the Workplace Partners Panel report, Skills and Skill Shortages: The View of Business, Labour and Public Sector in Canada stated that well over 50 per cent of public and private sector managers and nearly two-thirds of private and public sector labour leaders described the skill shortage as a serious problem for the Canadian economy and labour market. The issue of skill shortages ranks as the number one issue among Canada's public sector managers and third among the private sector managers.
With the exception of private sector managers, a majority of labour leaders and public sector managers in western provinces said that hiring Aboriginal people was "somewhat important" or "very important" in meeting their skill needs. What should be of concern to all of us here is the relatively large proportion of private sector leaders, 50 to 60 per cent in each of the western provinces, who felt that hiring Aboriginal people was not important in meeting their organization's future labour and skill requirements.
Despite some breakthroughs, there are still troubling indications that negative attitudes towards Aboriginal people continue to persist. A recent poll by the Canadian Centre for Research and Information on Canada revealed some disturbing insights into how non-Aboriginal Canadians view their fellow Aboriginal citizens. Over 20 per cent of those polled felt that, "Relations between Aboriginal and non-Aboriginal people were deteriorating." What is really alarming is that over half of the respondents felt that Aboriginal people were as well off, or better off when compared to other Canadians. This perception is strongly refuted by UN indices that indicate that Canada's Aboriginal peoples would rank 43rd in the world in terms of economic conditions.
Does this negative attitude towards the Aboriginal labour markets and people transfer to Aboriginal entrepreneurs and Aboriginal economic development? I do not know the answer to that question. Are Aboriginal owners and companies and their respective labour forces viewed as serious solutions to many economic opportunities?
These findings suggest that there is still a disconnect, and our council has been focussing on how to correct this disconnect. We have adopted a very simple approach: we considered how to match supply and demand. Economics 101 is always about matching supply and demand. We have learned that it is not that easy. It is not just a matter of aligning supply and demand; you must actually connect them, and to do that you need more than market forces: you need active change strategies. You must start relationships, build partnerships and work towards shared outcomes.
As I said, the private sector has trouble connecting to the Aboriginal labour market and economic opportunities and, more important, they do not understand how to align their investments in ways that will make a difference. What is needed is a Canada-wide framework for labour market measures and pan-Canadian/pan-Aboriginal approaches that respect First Nations, Metis and Inuit peoples. This suggestion is not popular among Aboriginal leaders who want to see very specific strategies developed for each of their constituencies.
I think there is room for both a national framework that supports regional market strategies and economic development, and one that would address a number of the problems facing both the supply and demand side partners by ensuring that there is an effective communications strategy linking Aboriginal employment practitioners and human resource leaders, and it would link to literacy and other essential skills. There would be the development and use of national and sub-sector labour market information. There would be development and delivery of industry certification programs which could raise skill and competency levels and ensure mobility of workers, which is a major issue. It would identify and measure Aboriginal recruitment, retention and advancement, and would transform workplaces to employers of choice for Aboriginal people. It would also increase our understanding of Aboriginal employee engagement. It would improve coordination among all the stakeholders, industry and the education system. It would establish and document national labour market practices in mining and how we can transfer that knowledge to other industries.
I will give you a very practical example: I said that I wanted to shine a light on the area of trades and apprenticeships. We began our work in 1999 after the release of a watershed report called Making it Work: Aboriginal People in Trades. As a result of that report, a project was established in Alberta called the Alberta Aboriginal Apprenticeship Project, which was targeted to certify 180 apprentices. After four years, they have surpassed that target and have certified 262 apprentices. We asked the operators of the program in Alberta if they would be prepared to share their knowledge, insights, databases and videos, and build a network with other partners, and they said that they would. When British Columbia wanted to start a similar program, we brought in the people from Alberta to share what they had learned. There followed similar projects in Ontario, Nova Scotia, Manitoba and Saskatchewan that are leading to real training and employment solutions.
In British Columbia, we brought all the supply side together, the Aboriginal communities that had control of training and employment dollars, and asked how much each spent on trades and employment. In total it was $5 million annually. They began to see that this gave them power to get the attention of government and of industry. They could coordinate their investments so that instead of 10 communities each developing their own database, they could have one provincial database. They discovered the synergies and economies of scale that could be created by a coordinated, partnership approach.
Industry loved it. They said, "Does that mean that it will not be necessary for me to talk to 10 different Aboriginal groups? That I can talk to one window?" I like to call it a bay window because it has three panels to represent First Nations, Metis and Inuit, and they can all see themselves through this window that is an Aboriginal window.
In 2004, we hosted the first ever Western Canadian Trades Forum where we brought together 150 experts in the area. A year go, we received $2.6 million for HRSD to expand this partnership-building.
What I envisage for the future is that we can take this sectoral approach around trades and apprenticeships and apply the same principles to health care. We could have an integrated and linked Aboriginal labour market and economic strategy for health care and other sectors of the economy.
It will be difficult; if it were easy, it would have already been done. Ms. Meadmore, who presented before us, talked about children with FASD. It is easy to talk to you about Aboriginal talent but it is estimated that, in Quebec, 52 per cent of children have FASD. The issue of multi-barrier clients is exactly the reason we need this coordinated approach. How can we find opportunities to build and share knowledge amongst this growing network? Whether it is labour mobility, FASD and these types of issues, these are national issues that need a national framework. If we can accomplish this, the Aboriginal economy could actual be a model for how Canada could operate as a better, more efficient labour market and economic system.
In closing, I will say that I believe the adoption of a sectoral approach to human resource and economic development must be supported by the appropriate sectoral expertise. We need to coordinate sectoral partnerships involving employers, governments and Aboriginal communities. I would recommend that the federal government fund the light machinery to do that type of thing, and together the partners, by aligning their investments, can make a significant contribution to Canada's social, economic and community development. The time to focus our efforts is now.
We have heard over and over again about the Aboriginal baby boom. Canada's ability to sustain productivity depends upon successful economic development initiatives that do incorporate a comprehensive human resource strategy.
Senator Peterson: Thank you for your presentations. You mentioned that in a poll that was conducted, 60 per cent of the private sector said that Aboriginal people are not important in meeting their employment needs. Was that poll conducted in Saskatchewan?
Mr. Lendsay: It was conducted in Western Canada. Every Western province reported that 50 to 60 per cent of private sector leaders said just that.
Senator Peterson: Their lack of knowledge is astounding. Where do they think they will get employees from?
Mr. Lendsay: This is exactly what we find. The poll was in 2006. I should forward the Workplace Partners Panel report to your committee. I am a director with the Canadian Apprenticeship Forum and we know that we need immigrants in this country, since we will be in a net negative growth rate by 2020. I hear people speak about immigrant strategies when literally across the street are First Nations, Metis and Inuit communities. That is the disconnect.
A few weeks ago, The Globe and Mail reported on what we call a Workforce Connect that we did for Safeway, where we bring private sector and Aboriginal communities together. We have done them in five provinces to date, and this particular one was in Vancouver. As The Globe and Mail reported, Safeway went to Vancouver, met with people from the Aboriginal communities and in two weeks they hired 26 Aboriginal people from Sto:lo Nation to work at the Safeway in Chilliwack. The writer of the article noted that the manager from Safeway had to go to Vancouver to learn that the Sto:lo Nation was seven kilometres away. That is Canada. Rather than debating the merits of that situation, I think we need to ensure that people become connected. However, it is taking a concerted communication strategy to awaken private sector leaders to the Aboriginal baby boom.
The Chairman: In your presentation, Mr. Lendsay, you talk about the Canadian Armed Forces Recruiting Centre. Yesterday we were in La Ronge and one of the elders spoke of his career in the Air Force. I am Metis, and I left home at a very young age and joined the Air Force. I got a trade and then became a pilot. The elder had done the same thing and you could see that the skills he had developed in the military helped him to become a major contributor to his community.
Is an effort being made to encourage young Aboriginal people to join Canada's military? There are many tremendous opportunities in the military. I was fortunate to experience being an airman and an officer, and it certainly assisted me in my business career. I would like to know if a concerted effort is being made to encourage young Aboriginal people to consider this as a way of life. I think you can enrol for three years and then you can go back home and use your talents to become a leader.
Mr. Gladue: I can speak from my personal experience, since my son spent nine years in the Armed Forces and has recently joined the RCMP. The FSIN has encouraged young people to join the Armed Forces through the Bold Eagle program held annually in Saskatchewan. In fact, that is what led to my son enrolling. There is a tremendous push for them to join either the Armed Forces or the RCMP.
Here in Saskatchewan, there is a tremendous amount of energy being spent by the RCMP to recruit Aboriginal people, many of whom are then assigned to urban communities that have a cluster of First Nations reserves. In particular, there are examples in the south where there are huge reserves, and they are trying to put Aboriginal officers in those places.
When I was in Meadow Lakem we did a study to try and encourage some career paths for our people to take. There are difficulties because of the way the on-reserve education system is funded. We found that most children are behind in maths and sciences, which prevents them from following many career paths. The way that most federal funding mechanisms are set up on reserves means that they cannot afford to include science and maths programs in the curriculum, and for many careers these are requirements. When my son joined the military he had to upgrade his education in some areas. There are certain hindrances there to the advancement of young Aboriginal people.
We also found that the off-reserve education system had a higher success rate because it is supported by a stronger infrastructure, especially in maths and sciences. It seems to be easier to encourage young people off-reserve. A lot of young people have to move off the reserve in order to pursue career choices. In some cases people move off the reserve because of the lack of housing. However, they are usually at the low end of the socioeconomic scale in urban centres. These are very challenging issues to address.
Currently, the provincial government is reviewing the Kindergarten to Grade 12 system, or K to 12, in Saskatchewan. The aim of the partnership we have with FSIN is to study and improve standards in the K to 12 system on and off reserve and that is happening right now. There is a partnership between the provincial government and FSIN to review and improve those standards. One of the problems they will face is with the different funding mechanisms on and off reserve. The continuum of K to 12 and how it is connected to post-secondary education is very important, I agree with Kelly.
In some cases, there are models in this province where they are decentralizing trades into the high schools. I was taking notes this morning of the questions the senators were asking around keeping children in school at the K to 12 level. Many of these children become very bored and they drop out. In order to keep their interest in school, some of the schools are trying to decentralize trades training into the K to 12 system. We have to drive the system so that it is career oriented and has relevance to students. It will take a partnership between federal and provincial governments to make this work.
I have met with some of Kelly's colleagues to discuss a Provincial Workforce Council. That is a council that we have just set up here in Saskatchewan which involves federal officials. Basically, we are embarking on a coordinated approach. It is called SIDU, and it was set up to start a partnership and dialogue between federal and provincial governments. It operates under the Saskatchewan Development Union and Vice-Chief Lonechild is very much involved in it. We are trying very hard to create partnerships and have dialogue with regional federal and provincial counterparts.
Those are some of the initiatives we have undertaken in this province to address labour force development. I am sorry to be so long-winded, senator.
The Chairman: If somebody becomes an established tradesperson, they often become entrepreneurial. Whether they are Aboriginal or non-Aboriginal, there is an entrepreneurial pride factor that develops that could generate economic development in their home communities.
Senator Hubley: You have just touched on a subject that I think is really important to all Canadians, and that is education. It has been mentioned during our hearings that education is, indeed, the key to economic development, and it is the most productive investment any government can make in the future of its people and its country. There are many models for this. One is the Irish experiment, where they made a concerted effort to fund post-secondary education as a method of turning around their economic situation, and they achieved their goal a hundredfold.
What role do you think we should recommend that the federal government should take in that respect? The underlying element in most of the presentations we have heard is that there is some degree of lack of expertise and a need for the upgrading of skills. I think we are approaching this problem from the wrong direction. It should all be part of the educational system. We should not be waiting until we realize that we need some skills and then try to train people and, to do that therefore, we need to look for funding and partners.
There are two words that, as a society, we should never use when we speak about our education system or our young people and they are "failure" and "dropout." We are just not doing our job if we are using those two terms.
Could you give us some idea as to how you see the federal government assisting in this respect?
Mr. Gladue: That is a very big question with many layers. I alluded to the K to 12 system on reserve. Funding is based on the nominal role, and when you do that and you have a shrinking population, your funding is cut back. At the same time they must compete with the off-reserve system for teachers, which perhaps means that you end up with people who have less capacity.
What the federal government can do is review the policy side of that and consider implementing a strategy that actually examines what is happening in the off-reserve education system. Infrastructure is also a problem. There are many very beautiful schools on reserves, some are $12-million schools; unfortunately, a lot of them are half empty. There should be nothing preventing any student in the province from attending an off-reserve school. I think we are trying to achieve the same thing, particularly in a population as small as Saskatchewan's.
Partnerships have been created in school divisions across the province because of the way the legislation is set out. Through these partnerships we can discuss costing and infrastructure. There are things that both the federal and provincial governments can do, and they need to have that dialogue. The federal government's policy restricts what these partnerships can do.
The second issue in K to 12 is that perhaps we could look at labour force requirements, and how labour force and career requirements can be built into the K to 12 system, particular in Grades 6 to 12. This would fit into a framework such as Mr. Lendsay spoke of where certain things could be decentralized. The province is currently engaged on some of that in urban centres. I believe that can be done as a partnership on reserve because, in speaking to many people in the communities, I find that they think we should decentralize the trades programs and those things that are fundamental to the labour force.
We have identified the key elements in the labour force in Saskatchewan and that is how we have set up our economic programs, much of it is in the resource sector and related to trades. One of our major concerns is that many of our young people are leaving this province, and if we cannot keep our young people that will certainly affect the economy of Saskatchewan and Western Canada. I think there are elements to which the federal government can contribute around their funding and policy regimes in the K to 12 system.
Mr. Lendsay: I think the first question in relation to education should be to what should we benchmark our standards? I think we should use international standards. Canada's educational standards have been slipping. I think we should look at the standards that are being set in education by the OECD countries. You referred to Ireland, and I think that is a very good example of investment in a 20-year plan; they were in collapse, and their debt-to-GDP ratio was one of the highest in the world.
I would recommend that the federal government invest in education. If you review the year-over-year spending on education in the federal budget, it has decreased all across Canada. A choice has been made to redirect a lot of spending towards health care and defence. Serious consideration should be given by the federal government to making a larger investment in education.
Mr. Gladue mentioned the curriculum. I think we need to be innovative with curriculum and use Aboriginal schools and institutions in cities and on reserves as incubators to try integrating the trades and apprenticeship programs inside the school system, beginning with Grade 7. That is what Denmark has done. They are called production schools. Channelling students does not mean that they are channelled forever; it mererly assists by providing choices, and they can make other choices and career changes in the future.
We must consider how we can integrate curriculum as well as industry knowledge into the education system, in addition to using information technology. We must really look at the roles of the federal and provincial governments. We have devolved education and training to the provinces but we continue to face national challenges. There used to be national standards which meant that there was greater consistency in education. When an employer hired somebody with Grade 12, he knew what that meant. That no longer exists. The interface between the federal and provincial governments in regards to education and training needs to be re-examined and made a national productivity agenda item.
Senator Sibbeston: Mr. Gladue, you mentioned two programs that your department has recently instituted, which are obviously aimed at getting more Aboriginal people involved in businesses. Is there a recognition of Aboriginal people as private entrepreneurs as opposed to band-owned companies and corporations? I see in Saskatchewan that much of the activity in places such as La Ronge and Meadow Lake involves the band doing business on behalf of the collective. In other parts of the country we see more individuals involved in business. I know there is a world of difference. I always think that band-owned corporations are a way for native people to become involved in business, but it is not necessarily the most efficient way It is much like a committee doing the work. It is never as efficient as one or two persons doing it themselves. I wonder if your department is conscious of the difference between private entrepreneurs as opposed to collective corporations?
Mr. Gladue: Our program applies to private individuals. In terms of La Ronge and MLTC or PAGC or STC, those tribal councils work with huge regional projects. Out of those regional projects have come private spin-off opportunities that individuals can pursue, and they can apply to our program for funding. We certainly cannot fund the million dollar projects; we refer those to ABC, which is one of our partners. They will take a look at those huge projects and then make the call on whether to move something to us. We stretch our resources as much as we can but the majority of the people who apply to our program are private, and they are usually spin-offs of the bigger, regional initiatives that happen in the kinds of organizations that you mentioned, senator.
The Chairman: If there are no further questions, I would like to thank both of you gentlemen for being here today and enlightening us on some of the actions that should be taken. I hope that the federal government will take heed of the report that we will be producing as quickly as we can.
Mr. Lendsay: Richard and I have a gift for all of you. One of the things that the Government of Saskatchewan has assisted in producing is a booklet called Guiding Circle. It assists both youth and adults to discover themselves in order to shape their career paths. This little booklet was developed with the help of researchers from the University of British Columbia, Dr. Norm Anderson, Dr. Gray Poehnell and Dr. Rod McCormick, and it has been a resounding success. There are several good stories in our newsletter about how a mother used it with her autistic child, how a homeless person used it to get a job, how it helped people enrol in university. We want to present these to you for you to pass on to your children and grandchildren. It is for both Aboriginal and non-Aboriginal people, and we would be interested in the feedback that you receive.
This booklet is now being sold in seven countries. We have done some training programs in Australia and they want to adopt it as a tool for all its indigenous people. However, I cannot persuade Indian Affairs to put this into every school in Canada. That reflects the lack of coordination that exists here. I think it also relates to issues around FASD that were earlier addressed by Ms. Meadmore. We need better coordinated mechanisms.
On behalf of the Government of Saskatchewan and the Aboriginal Human Resource Council, we want to present one of these booklets to each of you.
The Chairman: We appreciate that.
The committee adjourned.