THE STANDING SENATE COMMITTEE ON INDIGENOUS PEOPLES
EVIDENCE
OTTAWA, Tuesday, October 18, 2022
The Standing Senate Committee on Indigenous Peoples met with videoconference this day at 9:01 a.m. [ET] to examine the federal government’s constitutional, treaty, political and legal responsibilities to First Nations, Inuit and Métis peoples and any other subject concerning Indigenous Peoples.
Senator Brian Francis (Chair) in the chair.
[English]
The Chair: Honourable senators, [Indigenous language spoken]. Good morning.
I would like to begin by acknowledging that the land on which we gather today is the traditional, unceded territory of the Algonquin Anishinaabeg people, whose presence here reaches back to time immemorial.
I am Mi’kmaq Senator Brian Francis from Epekwitk, also known as Prince Edward Island, and I am the Chair of the Committee on Indigenous Peoples.
I would like to welcome the senators who are participating in this meeting: Senator Arnot from Saskatchewan, Senator Boniface from Ontario, Senator Coyle from Nova Scotia and Senator Lovelace Nicholas from New Brunswick.
Today we are resuming our study into the federal implementation of the Cannabis Act as it is related to Indigenous people. I would now like to welcome our witnesses. We have Chief Darcy Gray from Listuguj Mi’gmaq First Nation and Dwayne Nashkawa, Strategic Advisor for the Nipissing First Nation. Thank you both for joining us. You will each have five minutes to provide opening remarks, and we will subsequently move to a question and answer session of roughly five minutes per senator.
On a technical note, I would like to ask the witnesses joining remotely to keep their microphones muted at all times, unless recognized. Should any technical challenges arise, please let the clerk or the chair know as soon as possible. I would also like to remind everyone that the Zoom screen should not be copied, recorded or photographed. However, official proceedings can be shared via the SenVu website.
With that out of the way, I would now invite Chief Darcy Gray to give opening remarks.
Darcy Gray, Chief, Listuguj Mi’gmaq First Nation: Good morning, senators. Nice to see you again. [Indigenous language spoken]. Good morning to you all, members of the Senate committee. It is an honour to speak with you today about our recent experiences with cannabis in the community of Listuguj.
My name is Darcy Gray. I am the Chief of the Listuguj Mi’gmaq First Nation. I have been Chief of Listuguj since 2016, right around the time that the legalization of cannabis in Canada was getting serious.
It is also important to understand where Listuguj is situated geographically. We are located in Gespe’gewa’gi, the seventh district of Mi’kma’gi, which includes the Gaspé Peninsula and northeastern New Brunswick. Put another way, we’re located on the Quebec side of Chaleur Bay and the Restigouche River across from Campbellton, New Brunswick. We operate and tend to work on both sides — in both provinces — quite frequently.
With respect to our history and involvement with cannabis, we participated in three different consultations regarding cannabis with the task force at Health Canada and with the governments of New Brunswick and Quebec. Each of those conversations tended to centre around health and well-being, safety for consumers, concerns around access by our young people and trying to make sure that things are done in a safe way. These were certainly things that we could agree with at each of these consultations. However, I think the emphasis seemed to be more about the average Canadian rather than those in First Nations communities.
At each of these meetings, I also made certain to speak of the economic opportunities that existed. It did not seem to be a conversation that was being had with First Nations in my experience and in the consultations that I participated in. This was despite the commitment to relations with First Nations being the number one priority at the time. Essentially, we seemed to be an afterthought and something to be dealt with once things were set up and the market secured by others. We recognize the familiar patterns of systemic exclusion, especially once it was clear that the provinces would be regulating distribution.
At the Quebec consultation, we pushed for something along the lines of what became section 62 in their Cannabis Regulation Act, which allows for agreements to be signed between First Nations and the province. However, there may be a fundamental world view issue that is prohibiting this from happening. I can get into that later.
We also invested in a company that was setting up in our region. The investment was in a licensed producer that provided a multitude of opportunities for the community, including jobs for our community members and potential spin-offs. We believed that this would help us connect our community efforts to be participants in the cannabis market with point-of-sale dispensaries in Listuguj. We trained people in regulations and in horticulture. We had over 70 people from the community work in all aspects of the operations from growing and quality assurance to HR, working in supervisory roles as lead growers and setting up other growth facilities.
We also established our own cannabis law consistent with our inherent right to self-determination. Our cannabis law was developed through community feedback over several months, and was brought to a community vote and passed. We had community members set up shops in the community under temporary licensing conditions while we continued to work on clarifying regulations in the community.
We also approached Health Canada and the Quebec government to work on establishing an agreement to link together the investments and the capacity of our community to operate and manage in a good way, with entrepreneurial spirit and, most importantly, to be able to address the concerns around well-being, safety and health in our community.
In the interim, though, our dispensary owners have demonstrated commitment to operating in a safe manner. They are doing quite well and seem to be successful in their operations. Anecdotally, they have shared that the black market sale of cannabis is no longer operating in Listuguj and the region. There is still work ahead to improve, of course. We continue to explore how we can make things safer.
How can we ensure profitability for the community and dispensary owners? We can eliminate some of the concerns and uncertainty around access and transportation of product. This is all work that we tried to engage in. But six years later, we are still on the outside looking in in many aspects despite putting in place many pieces to ensure our participation in the industry. Systemic barriers remain in place. Our best efforts, and those of other nations, seem to be falling on deaf ears, especially when it comes to working with the Province of Quebec. This systemic exclusion brings with it significant concerns as it sends the message that our health and well-being are of lesser importance.
Meanwhile, recent news throughout the industry — as currently constructed — is that it seems to be floundering and asking for relief in some way, reduced regulations, tax breaks and greater advantages. Meanwhile, we’re still pushing for inclusion and a better way forward.
I will leave it at that for now. I thank you for your time and the opportunity to share our experiences with you all.
The Chair: Thank you, Chief Gray. I will now invite Dwayne Nashkawa to give his opening remarks.
Dwayne Nashkawa, Strategic Advisor, Nipissing First Nation: [Indigenous language spoken]. Good morning, everyone. My name is Dwayne Nashkawa. I’m pleased to be here today to share some insights on the Cannabis Act from the perspective of Nipissing First Nation, or NFN. I’m originally from Saugeen First Nation in southern Ontario, and I’ve been employed as the CEO at Nipissing First Nation from 2004 until November 2020. More recently, I’m in the role of strategic advisor to the chief and council. We’re located on the shores of Lake Nipissing in northern Ontario at the crossroads of the Trans-Canada Highway between Highway 17 and Highway 11.
My role here is to support the governance and decision-making processes, as well as community development initiatives. I have been involved with the development and implementation of the Nipissing First Nation cannabis law since 2017.
We began developing the law when it became clear that the criminal cannabis laws would be changing in Canada. We did not want to become trapped in jurisdictional limbo as Canada and Ontario sorted out the legal status of cannabis for our territory, nor did we want larger cannabis businesses of questionable origin coming in to dominate our community cannabis retail environment.
However, we also didn’t want to be ruled by an outside government that didn’t have our goals and priorities at heart. In addition to regulating the sale, production and cultivation of cannabis in our territory, NFN has successfully pursued self-government in a broad range of areas including land management, elections, fisheries management, financial administration, education and, most recently, as a signatory to the Anishinabek Nation Governance Agreement.
As we began developing our cannabis laws in 2017 and 2018, Nipissing First Nation Council held a number of consultations with our citizens related to their concerns as cannabis was on the cusp of legalization. Those concerns included preventing the sale and use of cannabis by our youth, ensuring that sales of cannabis would be restricted to areas away from our villages and settlement areas, ensuring that the supply of cannabis entering the community was safe, ensuring that suppliers of cannabis to the community were reputable and securing the ability of the Nipissing First Nation membership to fairly participate in the emerging market.
Once we developed and passed our cannabis law in July 2019, we actively pursued an agreement with the Government of Ontario to harmonize our law to ensure that community requirements to ensure safe supply were met. Prior to passing of this law, NFN placed a moratorium on any cannabis retailing in the First Nation. That was the only way we could control the entry by market players that were not from the community.
Our law requires that local vendors obtain a business licence from the First Nation to operate a store on the First Nation. A condition of this licence is that the vendor become an authorized cannabis retailer with the Government of Ontario. This was an effort to ensure that the source and safety of supply were met and community priorities were considered. There were no other options for us at the time to meet those standards that the community had set. Presently, there are four retailers operating on the First Nation who have met this standard and who are licensed by the chief and council.
We have had some success with an interim agreement with the Government of Ontario that addressed operational issues for our entrepreneurs while ensuring access to that safe supply. While there are still a number of jurisdictional issues that remain outstanding as well, to this point the Government of Canada has not participated in any of these discussions with us.
After more than a year of operations under the NFN cannabis law, we reached out to our retailers to consult them on their operations and how the law was working for them. Some of the things we heard from the member retailers included that supply issues were inconsistent in Ontario. There were order mistakes and unjustified penalties for late orders. All of our vendors have to order their product through the Ontario Cannabis Store. There is no mechanism in Ontario to order directly from a licensed First Nation retailer. Every retailer has to go through a centralized supply. There are a lot of issues with that as the market finds its feet.
First Nation retail supply does not seem to be a priority or of equal value. Licensing fees were very high for First Nations where start-up capital was much more difficult to secure than off reserve. We have been able to manage these issues, but only with significant effort and significant work with the Government of Ontario. We believe federal support on this issue will help our retailers succeed in the long-term.
Some issues that we’re concerned with from a jurisdictional perspective include the right to trade with licensed First Nation producers who are producing a safe supply of cannabis, recognition of our right to govern economic development in our territory and entrenching the ability for our citizens to participate in the cannabis economy. Too often, we’ve been left in a precarious position when there are market opportunities. We’ve seen this for 150 years. We’ve witnessed our local convenience store owners — prior to the legalization of cannabis — being labelled as criminals for selling tobacco and gasoline. We want to be free of those sorts of labels.
In short, we want recognition of this right to participate in the economy, free from reprisals and on a fair basis with a level playing field. We also want the legal basis to work with other First Nations on a system of larger, collective self-regulation for recreational cannabis so that we can provide our retailers with a framework free of provincial regulatory priorities and utilization of rules that makes sense to First Nations.
Finally, we would like recognition that our unique position in Canada not be viewed as an unfair advantage when we participate in the economy. For too long there have been unfair barriers to entry and participation when it comes to building our local economy.
I thank you for the opportunity to be here today and to share our thoughts on this. Meegwetch.
The Chair: Thank you, Mr. Nashkawa.
We will now move to questions from senators. I will start with the first one.
I am wondering if you could both share with me your experience on your revenues from cannabis on your reserves. How is it allocated to the full community, and, if so, how is the revenue used?
Mr. Gray: Mr. Nashkawa, do you want to go first?
Mr. Nashkawa: Sure. At Nipissing First Nation, there are four licensed retailers. They are all private entrepreneurs. We have a mechanism within our law to collect a community benefit fee from those retailers.
The council has elected not to enforce that at this time to allow the vendors to get their feet under them. They have all made substantial investments in meeting the standards that the community has set and that the Ontario retailing license requires. There are a lot of costs for security, safety and other things. We wanted to give them a chance to get some cash flow going.
The real benefit to the broader community is that those four stores are successful. They cater mainly to the off-reserve population, not so much on reserve at all. The real benefit for the community is the number of jobs that they have created and the opportunities that they are looking at to diversify their businesses. Some have invested in convenience stores or gas stations, which is where we are seeing this positive spiralling effect of that.
Mr. Gray: For us, it is a very similar situation where the dispensaries are privately owned. The owners of these dispensaries seem to be doing quite well. That takes some of the dependency off of the government to provide jobs and opportunities. They are creating their own opportunities. It is important that we continue to support their entrepreneurship.
We had implemented licensing fees. Those fees were set aside for recreational opportunities for our young people in the community. We’re looking at developing a way of systematically giving back to the community as well, much as we do in other operations like fisheries and forestry.
We are hoping that that can offset any operational deficits or help reinvest in priorities that the leadership thinks are important, such as youth opportunities or elders repair programs for housing in the community, things like that. That is what we’re targeting with those opportunities.
The Chair: Thank you both.
Senator Lovelace Nicholas: Thank you for being here this morning. My question is for both of you, if you would like to make a comment.
As Chief Gray said, the federal and provincial governments are trying to prevent Indigenous people from excelling economically. Do you think that is true?
Mr. Gray: I think that the systems have been set up in a way that works against us. If you were to compare that to fisheries and our experience where it is our right to go out and fish, but we have to buy our way back in, I think that is an unfair approach.
I commend the Standing Senate Committee on Fisheries and Oceans report Peace on the Water that identifies it as a problem. We see the same thing here in cannabis. Mr. Nashkawa spoke to it. It has been our experience.
Despite our best efforts to ensure that we can participate in this industry in a safe and good way, that our participation is regulated, that we’re looking out for safety and well-being, that avenue for participation is not there.
Our biggest barrier right now I would say is the Quebec government in wanting to ensure that they have a monopoly on this. If they are the only path to “legal” distribution — and “legal” in quotes — how do we get there if they just continue to push that conversation down the line?
Mr. Nashkawa: I would say that our experience in Ontario has been somewhat different in that the Ontario government was open to speaking with us. We were fortunate that we approached them at the right time.
The challenge is that I do not think there is a good grasp of the jurisdictional issues that are at play here in terms of governance of our own economy and regulating our own businesses on reserve. To make our regime work, we effectively had to adopt most of the elements of Ontario’s regime. We view this as an interim approach that provided security for those who were making the investment.
Honestly, our main goal was to make sure that the supply was safe and that the actors in our community were from our community and not from outside, coming in and being involved in different activities. For us, we went in that direction because we were prevented from working with federally licensed First Nation cultivators where we could trade directly with them. We had to go with the only game in town. I think we have made the best of it.
Are we satisfied? I would say not really.
Senator Lovelace Nicholas: Thank you for your answers. In your view, what supports do First Nations require to participate in the cannabis market?
Mr. Gray: If I could, I think the access to cannabis is safe, and safe cannabis that is recognized as legal. I think Mr. Nashkawa hit on a good point of jurisdictional concerns here. We would love to set up nation-to-nation trade agreements with licensed producers or producers who are recognized under Indigenous law and create opportunities. There has been a lot of talk around a “Red Market.” I think that that could be a really good path forward for a lot of Indigenous communities across Canada.
Mr. Nashkawa: I think that to achieve something like that, we have to have a higher and more meaningful level of engagement from the federal government because a lot of these issues cross provincial boundaries. If we wanted to work with Chief Gray at Listuguj, many of the systemic barriers prevent us from doing that. I think that it is only the federal government that could facilitate and support the firm establishment of those relationships.
There has been a lot of messaging about a high level of engagement with First Nations on cannabis, but, honestly, beyond the initial round of PowerPoint presentations and group meetings, there has really been almost an entire absence of meaningful dialogue for two or three years now on the federal side to the point where we don’t even know where anything stands at NFN. So we have been compelled to shift our focus just to supporting things to get them established. Now that they are, we really are quite intent on shifting our focus to those jurisdictional issues.
Senator Lovelace Nicholas: All right. Thank you for your answers.
The Chair: Thank you.
Senator Boniface: Thank you both for being here. I will direct my first question to Mr. Nashkawa, if I can. I am a senator from Ontario. I know your community well. I’m from the city of Orillia. I have been in your community a number of times.
I am interested in terms of the number of cannabis stores that are licensed across Ontario. I am hearing from entrepreneurs in our area particularly that there are too many licences, which is creating significant issues for organizations to keep their stores afloat. I am just wondering what you are finding from a competition level, say from North Bay given that you are close to North Bay, and how that is affecting the ability of your entrepreneurs to get up and running.
Mr. Nashkawa: Thank you for the question. I think that it is a really important one. I think we were lucky in that a few of our vendors were very well organized and got out of the gate very quickly. They got out of the gate more quickly than a lot of the competition in North Bay. They were able to build a customer base, but that was only because we were actively on the radar of the Ontario government and pushing them on the licensing side. Initially, Ontario ignored First Nations and actually overlooked them with their lottery process. That was the type of systemic issue we had to overcome from a competition perspective.
Now, I think there are between 12 and 15 stores in North Bay alone. North Bay is a small community of about 50,000 people, and we have four on the First Nation. They have managed to hold it together. I’m not sure if they are all going to make it through. Same with North Bay, honestly. There is definitely an issue of an oversupply of retailers.
It has been a challenge. We addressed that directly with the Government of Ontario in our negotiations with them, and that we had to see some of the barriers to entry come down for First Nations if we were going to be able to participate meaningfully in the cannabis economy.
Senator Boniface: Thank you for that. You share a view that I think I am hearing across Ontario. I am interested in what your observations are so far in your competition with the black market. Can either of you make a comment about that?
Mr. Gray: For me, it was a comment that came to light in speaking with our dispensary owners about a month ago. It was something that from the outset we wanted to discourage — any black market involvement in the community. Our dispensary owners have taken up that challenge. For them to share anecdotally — I mean, it is hard to get evidence, of course — that the black market has essentially been shut down where some of these people who had been operating in the region are going to them and asking them to buy their product because they cannot move it anymore.
To us, that is encouraging because we know it is a safer product that is being sold in the dispensaries in the community. I think that as we tighten that up and do better, we can ensure a safer supply to community members.
We have about 13 retailers right now that supply people that travel as far as 300 or 400 kilometres to come here. I think we are doing a pretty good job here of helping out in eliminating the black market.
Senator Boniface: Mr. Nashkawa, do you have a comment?
Mr. Nashkawa: That was the primary concern from the community when we consulted them. They didn’t want to see that type of market established at Nipissing First Nation. They wanted to make sure that the supply was safe. The rationale for keeping the stores away from the main villages was because most of the customers come from off the reserve, as Chief Gray notes. They didn’t want suppliers they didn’t know anything about coming into the main villages, and they didn’t want all the traffic from the customers putting pressure on those small communities.
We are fortunate that most of our villages are on the shoreline of Lake Nipissing, and Highway 17 runs through the First Nation — Trans-Canada Highway. That’s where we restricted these stores. We zoned that area so that they had to operate along the highway corridor. That kept some of those elements out. So there were some practical elements, but also by compelling our vendors to be licensed under NFN law and then compliant with Ontario’s law, that was an effort to keep those elements out.
Our vendors have told us when we surveyed or met with them that they felt very secure in the way their businesses were operating. They didn’t have the pressure that some people in other First Nations had to purchase from certain suppliers and that sort of thing. They had a lot of concerns about the Ontario Cannabis Store and the supply from Ontario, but that’s another issue.
The long and short of it is that we have been fairly successful in meeting those main objectives of security of supply, keeping it away from youth and knowing where the supply comes from. The vendors are pretty happy with that.
Senator Boniface: Thank you.
Senator Coyle: Thank you very much, Mr. Nashkawa and Chief Gray. It is wonderful to have you with us at the Indigenous Peoples Committee.
I want to probe a couple of areas. The first is one that both of you have mentioned, which is the industry as a whole and the opportunities within the industry for Indigenous communities in Canada. It is this concept of the “Red Market” and building a nation-to-nation, or even inter-nation, business.
Could you talk with us, first of all, about what you see the big opportunity being? I know that both communities we’re talking about here have done a lot and have developed some good economic opportunities and safeguards within this first phase of cannabis legalization, but I hear frustration in both of your voices, particularly around jurisdictional issues — provincial, federal, et cetera.
What do you see the big opportunity being across the country and for your communities? What are the main barriers you see that we need to address? Also, if you have any ideas on how to address those, we would like to hear them.
Mr. Gray: The biggest picture or the highest perspective is the jurisdictional aspect of it and recognizing that we would prefer to manage our own affairs. Mr. Nashkawa spoke to there being a jurisdictional limbo and the need to address that. That’s probably the biggest or highest level and the biggest opportunity. We want to make sure that our communities are safe, but that we are also participating in a good way so that if we are engaging in the market, we can set up, say, craft grows or production operations in the community and around the community. If we’re doing that, we can regulate and make sure it’s done in a safe way. We can trade between communities and we can trade between nations.
Looking at the facility we invested in, we don’t have the amount of capital to create a 400,000-square-foot indoor facility. As a community, we can’t do that on our own, so we have to find other ways to work together and support one another in the development. It creates opportunity, the potential for wealth and an opportunity to do this for ourselves by ourselves. That creates a lot of pride in the community.
There is a tremendous ripple effect that comes from that. But I think it starts from that jurisdictional aspect, taking on that responsibility and then working together as governments towards prosperity.
Mr. Nashkawa: Just to build upon Chief Gray’s comments, the one piece that often gets overlooked — because it’s not the most glamorous or exciting piece of all of this — is that in order to build an effective environment for the business to flourish, we have to create the conditions that allow us to regulate the market on our own terms and not having to adopt provincial standards that may not make sense for us to trade among ourselves. We have been trading with each other for millennia in this part of the world, and now we’re being told “you can’t do this” and “you can’t do that.”
Supporting regulation and capacity to create effective regulation is really important. On the heels of that comes aligning the thinking among the enforcement community, be they our own people — our own enforcement officers locally — or the police services. We have to make sure that everybody is willing to enforce our laws.
Then the third piece is the adjudication of that. When someone is offside, how do we reconcile that in the community? How do we restore balance? We have our own approaches to that, but if we need to, we also need the court systems to understand how our laws work as well.
There are all of these pieces that really — and this is not just a cannabis thing. This became quite evident during COVID when we were trying to keep our communities secure and safe, and we had no support to do it from the law enforcement community.
We need to align thinking to create a proper regulatory environment because too often people still see our communities as a place where they can do whatever they want. It’s not our own people who think that way, it’s people from outside our communities who come in and think that way. They think it’s the place where they can go and manipulate things, do what they want and carry on business in a way that maybe doesn’t even respect our community’s values.
Regulation, enforcement and adjudication are going to be key components of making a system work for us.
Senator Coyle: I have a supplementary.
Particularly when we’re looking at really changing the conversation and putting the First Nations communities in the driver’s seat in the various ways you have talked about and also supporting you in order to have the capacity you would like to have — not only to be in the driver’s seat, but to maximize and optimize the opportunities related to the legalization of cannabis — with last year’s passing of the law that implements the United Nations Declaration on the Rights of Indigenous Peoples, or UNDRIP, I’m curious if either of you see the implementation of UNDRIP assisting your communities in achieving the kinds of things you’re both talking about here in terms of the legalization of cannabis, optimizing opportunities and improving the whole regulatory environment?
We’re now in the process and are seeing how that law will have an impact on Canada’s other laws and in how Canada relates to its Indigenous peoples.
Mr. Nashkawa: I always have trouble speaking ahead of a chief. Sometimes they are worried because when I start, they don’t get a chance afterward.
There are things that can be done. Through this review of the Cannabis Act and as to the entire new context of UNDRIP, I can honestly say that I don’t recall us talking about that at all in 2016 or 2017. We were raising it, but it wasn’t reflected in what was brought forward in terms of the Cannabis Act. Certainly in Ontario, I do not see that is at all in play.
How does UNDRIP help us change the way we think about these laws over time? I think governments should be looking at passing laws that create space to make the accommodations that Chief Gray and I have raised this morning. How can we create those accommodations and support the exercise of our right to govern our economy, be it cannabis or fisheries or in any other space?
UNDRIP pushes legislators to do more and we’re hoping that we will start to see more of that now. Certainly, our chiefs are advocating quite strongly in that regard. That’s the main point I want to make is that there is that active role that governments have to play in supporting that active exercise of rights. Cannabis is a great opportunity to do that. It’s relatively new and still in quite an embryonic state, so we think the opportunity is still here to do that.
Mr. Gray: Just to pull from what Mr. Nashkawa is sharing, he mentioned the work in fisheries. Both of our communities, Nipissing First Nation and Listuguj Mi’gmaq government, have done some tremendous leading-edge work around fisheries and governance. Those provide an example and a way forward for how UNDRIP could be implemented and how our right to manage our own affairs could be recognized and implemented at the ground level.
One of the drawbacks I see in the discussion is that right now it is at the federal level, but the provincial level is not necessarily at the same space or mindset. If distribution of cannabis is still dependent on the provinces or still being regulated and determined by the provinces, we are no better off. If they refuse to recognize UNDRIP, we are no better off.
Senator Coyle: It sounds to me like it’s also a parallel with some of the issues in certain provinces around the child and family issues and jurisdiction over those. Looking where there has been some progress, what can we learn from them in those areas — as you said with fisheries — and what could possibly be applied here to the cannabis industry? Yes, there is a lot of work to be done at that level as well. Thank you for pointing that out.
Mr. Gray: That’s a perfect example.
The Chair: I’m going to jump in with a question that I think, Chief Gray, you touched on earlier. In your opinion, why has start-up capital for First Nation retailers been so difficult to secure?
Mr. Gray: I know initially banks, lending institutions or potential funders recognizing that cannabis was something they wanted to be part of was prohibitive, or you had to go to perhaps lending institutions of lesser repute that would drive up the borrowing cost or the percentages. It made it really hard for people to participate in that market or get involved in the market unless, of course, they already had money.
In our community, I would like to see — I think Mr. Nashkawa mentioned it — that fair participation for all where you don’t have to already have a lot of money to get involved in the industry. This is an opportunity for new people, new entrepreneurs to get in. I think going forward that economic development supports around these types of opportunities could really make a difference for everyone in our communities.
Mr. Nashkawa: Yes, I would echo that sentiment. The reality at Nipissing here is that those that got in through our licensing regime really had their own resources to bring to bear. There weren’t mainstream lenders that they could go to build their business. They have a lot invested in these businesses here. They have taken on a lot of risk. Now we want to create the conditions for them to get a return on that risk.
It’s a huge barrier to entry. In some respects, I think that’s worked. It’s kept the competition out locally for these vendors and it’s good for them, but from an equity perspective, it’s a real challenge. People who don’t have the resources really just don’t get a chance. They may have the license, the will and the ability to pull it off, but they can’t access the capital to get started. Now with the level of competition that has emerged in our region, I would question how worthwhile it would be to — it’s certainly a lot riskier than it was two or three years ago.
The Chair: Thank you both for that.
Senator Arnot: To both witnesses, I say thank you for coming today and enlightening us.
There is a strong common denominator in a number of witnesses — and I believe it’s corroborated by these two witnesses that have come before us today — that there is a definite issue around the recognition of First Nations jurisdiction with respect to cannabis and it’s creating that lack of recognition as an impediment to fair competition and success in the marketplace.
I believe these witnesses are asking that the federal government take a lead role in brokering cooperation and recognition from not only the federal government, but also the provincial governments to remove those barriers and those impediments.
To me, I think there is a lot of evidence that indicates that the fundamental problem has all the appearance of elements of long-standing systemic and institutional racism and that maybe the report that this committee writes should point that fundamental wrong out in no uncertain terms. I’m wondering if the witnesses have any comment about that.
I think both of you have commented on it already really, but I’ll ask them for any comments they might have.
Mr. Gray: I would say that’s been our experience — and not specific just to this industry, but just about any industry where it becomes a jurisdictional battle. Or if we go out and say we want to increase our participation in forestry, natural resources or fisheries — whatever it may be — the intervention may not be to deny us that right or access, but the market gets shut down or it gets deemed illegal. In essence, shutting down all opportunities.
I think you hit the nail on the head. That’s not a new phenomenon, and Mr. Nashkawa mentioned it earlier, 150 years at least. If you look at our fisheries and the denial of our people first off to access fisheries and then to participate in the market opportunities that fisheries provided here in the Gaspé region with salmon, it’s not a new problem. It’s something that is ongoing, but I think we have both spoken to the fact that there is another opportunity here for something different.
I thank you for your comments and putting it out there the way you did.
Mr. Nashkawa: I would also like to thank you for raising this because this is exactly what the train that we saw coming in 2015, 2016 and 2017 where this market was going to emerge very quickly and we were going to get steamrolled again if we didn’t really actively promote our interests here. This was something we had to be quite deliberate about internally. It was a dilemma even in our consultations with our community members.
They wanted the community to be safe, but they saw this was coming. Once the market was saturated — and I would argue we are pretty well there now — there weren’t going to be these opportunities anymore. We were really frustrated because we were quite vocal with both the federal government and the provincial government about the role we wanted to play in the industry. We saw tremendous barriers to entry on both the cultivation and the production side — not just financial, but from a licensing perspective and everything else. That quickly became quite a challenging space to be in and we decided it was too risky.
On the retailing side, we saw Ontario proceed with its licensing regime without even giving First Nations a thought. Quite literally, it was the advocacy to the finance minister’s office in Ontario by our chief and some direct dialogue with the finance minister that started to change the conditions in Ontario because nobody thought about us. It wasn’t the case where we wanted a privileged position. We just wanted a seat at the table. Once again, as has been the case with forestry, fisheries or any resource extraction industry, it was a battle to say, “We’re here. Our people deserve an opportunity to participate in the benefits of this.”
We have always endured the costs of development, but we haven’t participated meaningfully in the benefits of that development. We were quite concerned about that again.
The Chair: I have a question for either of you. Do you have any recommendations related to sharing excise tax revenues collected by governments?
Mr. Gray: For us, we haven’t had those conversations or internal dialogue. We have been more concerned with how we ensure consistent access to safe product and finding a way for us internally to develop a system that at least supports our community.
I know there has been some dialogue on that at the chief’s committee on cannabis, but we haven’t gotten together in a little while. I don’t know if Mr. Nashkawa has additional comment, but, for me, we haven’t gotten there yet.
Mr. Nashkawa: We’re sort of in the same position. We have been quite focused on getting our small cannabis economy supported and supporting these entrepreneurs. That said, those are revenue streams that, again, we have been compelled to collect on behalf of government through gas sales, cannabis or other things. However, we have never realized any benefit from that.
The things that we have mentioned this morning along the lines of regulating, enforcing laws and creating a regulatory system are going to cost money. We have seen some First Nations try to do this on their own and the tremendous challenges that they have in sustaining the development of a regulatory regime. With the proper resources, and if sharing of those excise taxes provide that, then that provides a continuous base of revenue to do that kind of work.
We cannot expect First Nations to take on the entire burden of creating a regulatory regime and funding it while the benefits that accrue through an excise tax, and otherwise, accrue to other governments. I don’t think that’s inherently fair.
The Chair: Good point. The floor is still open for another few minutes.
Senator Boniface: Mr. Nashkawa, this is to you because I’m more familiar with Ontario, but I welcome a comment from the chief as well. How was your policing augmented in order to work within the community as a result of the legalization?
Mr. Nashkawa: This is a really important question. I think it merits a lot of consideration.
I have been quite frustrated with the disconnect between our First Nation policing services and our own law making in First Nations. We are a land management First Nation. We exercise our own authority over our own lands. We wrote our own fisheries law, and we govern our fishing on Lake Nipissing. Honestly, when it comes to law enforcing our own laws, we have been frustrated at every turn by our own police service. I’m not trying to discredit them, but they tell us, “We don’t have the regulatory framework to enforce your laws. We’re taking risks personally, as officers, if we go out there and enforce NFN’s law.” Yes, we can create laws — and this is why we worked so hard to keep those elements out of the community who weren’t from here — but enforcing those laws has been a really challenging experience. That has to change. Maybe we are starting to see conversations about that. I think COVID has moved that along.
We could spend a day here just talking about the frustrations of getting our own laws enforced. They have no problem enforcing Ontario laws or federal laws, but they effectively won’t enforce a First Nation cannabis law. However, they will go along to keep the peace while someone else does the work. That’s not what we envisioned First Nation policing to be. I’m a student of First Nation policing. I remember when these police services were being developed in the 1990s what the intent of them were and what the reality is now. It’s a far cry from the original vision that our chiefs had in the 1970s and 1980s for First Nation policing.
Senator Boniface: Thank you. Any comment on that, chief?
Mr. Gray: Our experiences are very similar. We, too, have our own First Nation policing in Listuguj. When it comes to developing our own laws — and we have several — for the police, it’s probably not in the standard training manual. There is an educational aspect to it. We have recently added bylaw enforcement and some local measures that we can take while we work on establishing protocols with the judicial system nearby to try to divert some of these issues back to the community, whether that be through restorative justice processes or whatnot.
We recently signed an enforcement protocol regarding the fisheries and our lobster fisheries so that in working with Fisheries and Oceans Canada, we make sure that if it’s an issue with the community member under our own fishing regimes that matter is deferred to the community. That’s the type of thing that we need to set up in other regards, namely, those types of protocols and keeping things in the community to be dealt with by the community.
As Mr. Nashkawa has said, as we take on more and more jurisdiction, responsibility and accountability, the funds to do so aren’t necessarily there. We continue to stretch our resources further and further as we take on more. I can remember when legalization was first being discussed, we had tremendous concern for the increased demand that would be placed on our police forces without additional funds to do the work. Thankfully, we have increased our funding through negotiation, but I don’t know if it’s enough to keep pace with the increased demand.
Senator Boniface: I think we would also find across the country that First Nation police services are significantly underfunded compared to their municipal and provincial counterparts. Even if you get an equal increase, you’re still further behind in terms of your capacity to serve the community. Thank you both for your answers.
The Chair: Thank you for that, Senator Boniface. The floor is still open. As there are no questions, the time for this panel is now complete. I wish to thank Chief Gray and Mr. Nashkawa for meeting with us today. We appreciate your testimony.
Our next meeting on this topic is tomorrow, Wednesday, October 19, at 6:45. We will be hearing from the Royal Canadian Mounted Police and various government departments.
(The committee adjourned.)