Infrastructure is not just about bricks and mortar. Ageing, inadequate and poor infrastructure can have significant negative effects on the social and economic outcomes of communities. In this respect, infrastructure is about meeting the most basic needs of individuals, families and communities – putting a roof over a family’s head and making sure that they have clean
drinking water. The Standing Senate Committee on Aboriginal Peoples (the committee) began hearing from witnesses about housing and infrastructure needs on reserve in November 2013. The study included visits to communities from coast to coast to see first-hand the challenges and best practices relating to housing and infrastructure.
In February 2015, the committee tabled an interim report on housing which highlights severe housing shortages and overcrowding; poorly constructed housing that is in serious disrepair; and barriers which First Nation members and communities confront as they try to find innovative solutions to meeting their housing needs. The committee heard that the funding that First Nations communities receive from Aboriginal Affairs and Northern Development Canada (AANDC) is insufficient to properly maintain a community’s housing stock. Some First Nations have supplemented this funding by charging rent for housing, but many others
do not have the human resource capacity to initiate or manage a rental regime, are unwilling to implement a rental regime, or are in communities where this is not financially feasible.
The committee identified the need to examine current initiatives to addressing housing on reserve. For example, although the $300 million set aside by the federal government in a trust fund for the First Nations Market Housing Fund in 2008 was expected to result in 25,000 new homes in 10 years, the most recent data provided to the committee was that 99 homes had been built by May 2015.
This report makes recommendations to address some of these housing challenges, including:
- Removing the 2% cap on annual increases in departmental funding so that funding for housing and infrastructure can keep up with population growth and inflationary pressures;
- Putting in place the necessary measures to ensure that First Nations have the human resource capacity to manage their housing stock and to adopt and enforce building codes; and
- Re-evaluating, strengthening and expanding existing programs such as the Ministerial Loan Guarantee and the First Nations Market Housing Fund to make sure that these programs actually result in more homes for First Nations people.
Since the autumn of 2014, the focus of the committee has been on community infrastructure – roads, water systems, schools, bridges, and community facilities. Infrastructure deficits are not unique to First Nations communities, but the magnitude of this deficit on reserve is particularly striking. Visiting First Nations communities, the committee saw first-hand over-flowing sewage lagoons and communities with boil-water advisories which had been in place for over a decade.
Unlike other levels of government, which finance infrastructure by borrowing in the bond market and by raising tax revenues, First Nations governments face unique barriers in their access to capital for infrastructure. Those who do not have own-source revenues are forced to apply for funding through AANDC for infrastructure projects, and to wait until funding becomes available. First Nations who have own-source revenue sometimes build their own infrastructure, like schools or community buildings, by resorting to conventional loans with banks on far less favourable terms compared to their municipal or provincial counterparts.
In this report, the committee emphasizes the important role that economic development can play in helping First Nations communities meet their infrastructure needs. Lack of funding for basic infrastructure – such as roads, and water and wastewater services – is currently limiting the ability of First Nations to build much-needed housing. Similarly, the lack of infrastructure makes it difficult to take advantage of economic development opportunities. The committee recommends that additional support be
provided to First Nations so that they can prepare comprehensive community plans which will allow them to benefit from economic development and plan for the housing needs of their communities.
The committee recognizes that federal government funding alone will not allow First Nations to meet these infrastructure needs. The federal government currently provides funding for infrastructure on a cash-based, current-year funding basis. It is impossible to catch up on the infrastructure deficit in First Nations communities in this way. The committee has heard from a broad spectrum of witnesses, including First Nations communities and financial institutions, that the federal government could make more
progress on addressing infrastructure if it could help First Nations leverage financing. The committee is recommending that AANDC work with First Nations organizations to create a Ministerial Loan Guarantee program for First Nations infrastructure and housing on reserve, which would make it possible to securitize a substantially larger amount of financing dollars than annual AANDC funding allocations, thereby spreading the cost over the life of the asset.
First Nations communities are diverse; the tools to address their requirements must reflect this diversity. The committee’s recommendations reflect this diversity, ranging from removing the 2% cap on annual increases in funding at AANDC, building First Nations capacity to manage housing, facilitating the ability of First Nations to prepare comprehensive community
plans which facilitate economic development, and introducing mechanisms to allow First Nations to leverage financing. The committee hopes that the recommendations in this report provide options that can support First Nations communities in their ongoing efforts to meet their housing and infrastructure needs.