Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 12 - Evidence - March 10, 2015
OTTAWA, Tuesday, March 10, 2015
The Standing Senate Committee on Aboriginal Peoples met this day at 9:30 a.m. to study challenges relating to First Nations infrastructure on reserves.
Senator Dennis Glen Patterson (Chair) in the chair.
The Chair: Good morning, colleagues. I would like to welcome all members of the public who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples either here in the room or via CPAC or the web.
I'm Dennis Patterson from Nunavut. I have the privilege of chairing the Standing Senate Committee on Aboriginal Peoples. Our mandate is to examine legislation and matters relating to the Aboriginal peoples of Canada generally.
This morning we are hearing testimony on a specific order of reference authorizing us to examine and report on the challenges and potential solutions relating to infrastructure on reserves, including housing, community infrastructure and innovative opportunities for financing, as well as more effective collaborative strategies.
We've completed our hearings on housing and are now focusing our study on infrastructure, although we recognize that the two issues often overlap. Today I'm pleased to hear from four witnesses, representing three organizations. They are Fiscal Realities Economists, Corix Group of Companies, and Thunderbird Commercial Insurance.
Before proceeding to the testimony, I would like to go around the table and ask the members of the committee to please introduce themselves.
Senator Moore: Wilfred Moore, Nova Scotia.
Senator Beyak: Lynn Beyak, Ontario.
Senator Raine: Nancy Greene Raine, British Columbia.
Senator Enverga: Tobias Enverga, Ontario.
Senator Tannas: Scott Tannas, Alberta.
The Chair: Thank you. I know the committee will help me welcome our guests this morning: Mr. André Le Dressay, Director, Fiscal Realities Economists and Tulo Centre of Indigenous Economics; and Mr. Owen Matheson, Vice- President, Business Development, Corix Infrastructure, for the Corix Group of Companies. Joining them at the table, representing Thunderbird Commercial Insurance, we welcome Malcolm Smith, Partner; and he's accompanied by independent consultant John Kiedrowski, President, Compliance Strategy Group. Compliance Strategy Group and Thunderbird Commercial Insurance often work in partnership on First Nations and Mr. Kiedrowski has kindly agreed to answer questions. Welcome back to the committee, Mr. Kiedrowski.
Mr. Le Dressay, perhaps we'll begin with you, then proceed to Mr. Matheson and Mr. Smith. We look forward to all of your presentations, which will then be followed by questions from the senators. I would like to acknowledge Senator Lillian Dyck, deputy chair of our committee.
Please proceed, gentlemen and thank you.
André Le Dressay, Director, Fiscal Realities Economists and Tulo Centre of Indigenous Economics, Fiscal Realities Economists: Honourable senators, good morning and thank you for this opportunity to appear before the Standing Senate Committee on Aboriginal Peoples to discuss how to improve First Nations housing outcomes and access to long-term infrastructure capital.
My name is André Le Dressay and, in addition to being the director of Fiscal Realities Economists, I'm also the director of the Tulo Centre of Indigenous Economics, which is affiliated with Thompson Rivers University in Kamloops, British Columbia.
I've had the pleasure of reading your interim report on these matters. You are asking some good questions. Why are we not making more progress to improve Aboriginal housing and infrastructure? What are the causes of policy failures? How do we build a foundation for more success?
You have collected important information about housing and infrastructure gaps between Aboriginals and other Canadians. As you point out, the current policy approaches will never close those gaps. You have identified important root causes of the problems. First Nations laws, policies and procedures are missing. Administrative capacity needs to be developed to deliver policy change. More fiscal resources and powers are needed to raise the quality of services and infrastructure to national standards.
It is good that the committee's next report will be about specific achievable recommendations. Once again, you are asking good questions. What changes will work? How does Canada support effective Aboriginal policy change?
For these questions, I hope some of our research and work is helpful to you. The Tulo Centre provides two university-accredited certificate programs in First Nation Tax Administration and First Nation Applied Economics. These are the first of their kind in Canada, and we believe in the world.
Twelve of our courses have original curriculum. They are based on a 20-year economic study on the causes of First Nations' poverty. Over 100 students have taken some of our courses. A few weeks ago, we released a free open textbook for students and universities who want to learn and teach from our work. It is available at Tulo.ca.
One of the chapters focuses on the requirements to support residential markets on First Nation lands, another on improving First Nation property rights and another on building better infrastructure. I hope this resource is helpful to you in your work.
With respect to housing, we have gathered anecdotal information that the market value of our Certificate of Possession First Nations home is significantly less than a comparable home off reserve lands. We have found examples where a CP home has sold for about 10 per cent of comparable property value in a neighbouring jurisdiction. Think of how much home equity you would have if you could only sell to other senators.
This lack of equity has dramatic consequences. It prevents business start-ups. Imagine how many First Nations entrepreneurs have been thwarted by not having access to home equity. It has been estimated that about 50 per cent of business start-ups are financed by home equity.
A lack of home equity prevents savings. It prevents the cycle of wealth generation that every other Canadian takes for granted. Consider how many First Nations youth have to start from scratch because they don't receive bequests of home equity like other Canadians. The current market-based housing program does not generate home equity for First Nation participants. First Nations continue to forgo the benefits of home ownership that other Canadians enjoy.
We have found that lease hold developments on reserve have equal or higher market value to comparable lands off reserve. To provide our favourite examples, an acre of land in Westbank First Nation sold for approximately $10,000 in 1989 and today this same acre is leased at over $1 million. In Sun Rivers in Kamloops, an acre sold for $8,000 in 1996 and today that same acre leases for about $700,000.
How did this happen? It was not magic. It was a simple recognition that First Nations market institutions were largely removed by the Indian Act and that First Nations have to legislate their way back into the economy.
The proof is that the costs of doing business on some of the best located First Nation lands are four to six times higher than off First Nation lands. This is one of our research results that this committee has cited in one of your previous studies.
Market economies need a legal and administrative framework that supports property rights, facilitates trade and provides investor certainty. They need a stable fiscal framework that pays for quality services and builds competitive public infrastructure. Our research suggests it could be up to four times harder to finance infrastructure on First Nation lands. The study of the framework that supports markets is called institutional economics. It is supported by a substantial literature. It is the basis of a recent bestselling book, Why Nations Fail.
West Bank and Kamloops restored their market institutions and the predictable market results occur. Building the legal, administrative and infrastructure framework to support markets is what our courses are about at the Tulo Centre of Indigenous Economics. It is the purpose of the textbook that we wrote.
A question you might ask is if it is so easy, why hasn't it happened more often? Implementing change is hard, time consuming and expensive. It took years and millions of dollars for Westbank and Kamloops to complete their work. What can we do to reduce these costs and time?
Last year, we looked at 15 proposed First Nation policy changes during the last 20 years or so, from the proposed Charlottetown Accord to the proposed First Nation Education Act. These changes were not successfully implemented but others, such as the First Nations Lands Management Act and the First Nations Fiscal Management Act, did create positive changes.
Based on this research, we observed that successful Aboriginal policy changes have four elements. First, they are First Nation led. Second, they are optional. Third, the changes are implemented by First Nation administrations and institutions. Fourth, other governments have the political will to support the change even in the face of opposition. I hope any changes this committee recommends will meet this test.
Our role at the Tulo Centre is the third requirement for effective change. We are a First Nation institution that helps First Nations implement change. We focus on capacity development. By this I mean the development of specific skills that help First Nations administrations implement changes, such as passing laws using modern legislative frameworks like the First Nations Fiscal Management Act. We help students to effectively communicate an agenda that promotes higher property values to chief, council and membership. We teach students how to build administrative and tax systems that support residential and commercial developments and finance services and build infrastructure.
In closing, here are four recommendations that I encourage the committee to support and include in its final report. First, the First Nations Fiscal Management Act was passed in 2005. Amendments have been suggested to increase participation, raise investor confidence and improve administration. The fiscal management act helps First Nations finance infrastructure. This committee should support amendments to this legislation.
Second, many First Nations are suggesting that they should receive a fiscal benefit from resource development in Canada. Many recent reports have suggested greater resource revenue sharing with First Nations. This committee should support fiscal options that provide stable revenues to First Nations to close the legal, administrative and infrastructure gaps.
Third, only an effective First Nation housing market will ever close the gap between First Nation housing demand and supply. First Nation homeowners must have equity and value in their homes. This can only be accomplished with tradable and secure property right and registry systems. This committee should encourage more leasehold housing developments and this committee should recommend the First Nation property ownership option being proposed by some First Nation leaders.
Finally, this committee should promote options such as the Tulo Centre of Indigenous Economics certificate programs that build the necessary capacity within First Nations to implement your recommendations. Thank you.
The Chair: That was excellent, sir. Thank you.
Owen Matheson, Vice-President, Business Development, Corix Infrastructure, Corix Group of Companies: Good morning. Thank you for the invitation to participate in this national study. My name is Owen Matheson and I'm the vice-president of business development for Corix Infrastructure.
Corix is a complete, vertically integrated Canadian utility company specializing in water, wastewater and energy utilities. We have offices across Canada and the United States, and our vertical integration allows us to offer customers a complete utility services package, from products to equipment, to operation and maintenance.
Our primary shareholder is the British Columbia Investment Management Corporation or bcIMC. Based in Victoria, bcIMC is one the largest institutional investors in Canada with gross assets under management of more than $114 billion. This solid financial foundation provides Corix the scale, the resource and the capital to successfully partner, execute and deliver all types and sizes of utility projects across Canada.
This unique blend of vertical integration, ownership and decades of experience has allowed Corix to partner and provide sustainable solutions for First Nations communities from coast to coast.
Each First Nation is unique and through collaboration and understanding we build potential partnerships based on trust, respect and friendship. Through this process we have learned from First Nations and all Aboriginal peoples that we've had the opportunity to work with that there are several key areas that must be addressed in these partnerships in addition to sustainable utility solutions: capacity building, training, education and jobs.
We have come up with a regional model — a partnership, if you will — that not only addresses some of these concerns but also provides the potential for a generational, recession-proof business, owned and operated by the First Nation community and generating revenue for the First Nation community.
In this partnership model, Corix takes the lead in setting up and running the regional utility. Corix trains, educates and builds capacity within the First Nation and slowly over time transfers the running of this ownership fully to the Nation. Corix is still available after the transfer for oversight and other roles as the community sees fit. Corix sees this as a long-term partnership. For example, we have arrangements, agreements and partnerships in place to provide utility services to First Nation communities that are as long as 114 years. We see our partnerships as long-term commitments.
In putting these partnerships together, there is a tremendous effort required from both sides. A certain momentum is gained and a friendship is built, but there are challenges. There is a time and resource commitment — time to understand the needs and specifics of the opportunity and its options, but also time to understand the community and what they deem is important, and time to build trust and respect in order to form a successful and lasting partnership.
As well, there is a challenge of chief and council turnover through the election process, establishing clear communications, the security around revenue collections, and general risks and the mitigations around those risks. But the biggest hurdle and challenge still remaining is funding. We can't tell you how many times these partnerships have been formed, momentum built and then everything stops in its tracks because funding isn't available. I personally have seen this happen many times.
I believe we live in the greatest country in the world, and all Canadians — Aboriginal and non-Aboriginal — should have access to clean and safe drinking water and sustainability utility infrastructure. We believe we have a solution through our regional utility model that can start to address some of the First Nation infrastructure issues and concerns, where the private sector working in partnership with the First Nation and in collaboration with the government can make a unique difference. I must say this isn't a typical P3-type formula.
In closing, I would like to thank the committee for their time and the opportunity to share in some of our experiences in an effort to finding solutions for the First Nations and all Aboriginal peoples, including the Metis and the Inuit's infrastructure issues and concerns.
The Chair: Thank you very much. That was also very impressive.
Malcolm Smith, Partner, Thunderbird Commercial Insurance: Good morning, senators. Thank you for allowing me to speak this morning.
I don't want to mitigate what anyone else or government says, but nothing happens without insurance. Just get that one straight. Nothing goes on; you can't buy anything or do anything without insurance. I just wanted to throw that out there.
I got involved with First Nations insurance back in 2002 with Skeetchestn First Nation, which is close to where Senator Nancy Greene Raine lives. I visited that community and found out that they were paying 10 times what they should be for insurance, not getting the proper coverages and not receiving any kind of services. At the time, Aon Reed Stenhouse had a really good program, so I started selling insurance in 2002 and by the end of it I had 37 First Nations communities in B.C.
I decided I really wanted to help, so I was involved with ICAB, the Industry Council for Aboriginal Business, and Aboriginal Financial Officers Association. I did seminars for CANDO and the FOA. In 2008 I was involved with NACO trying to get bonding for First Nation Aboriginal contractors who were trying to get work. There would be lots of work but they couldn't bid on it because they couldn't get bonding. We tried on that, but the NACO summit self- destructed so we never really did get bonding in place.
You have my notes and I don't need to read them, but I want to talk about the community asset program because that's really the number one program that pretty much every community in Canada has. There's a lot of talk that they don't have insurance, but they do have insurance and it covers a wide gambit of coverages from property coverages, which is housing, infrastructure, directors and officers, boilers and machinery, auto, their police forces and their fire departments. There are insurance programs out there. There are four main programs out there that do insure both the community assets, as well as any economic development, such as a lot of communities have fire stations, gas bars and convenience stores, and quite a few have some sort of gambling casinos, VLTs. All these need to be insured by insurance. CMHC will not provide funding for housing without insurance in place. So we're constantly, as a First Nation broker, providing certificates and insurance to CMHC.
We talk about capacity. My partner is Mi'gmak. He's 31 years old. He's got a degree from Cape Breton University and he's taken all the insurance courses. There are only, I would say, five First Nation people in the country — in the whole country — who are involved with insurance and, as I started by saying, nothing goes on without insurance.
There is a huge opportunity for capacity building in insurance, so that someone in First Nations understands insurance and purchases it, because if you're a typical First Nation of any kind of size, like Membertou or Osoyoos, they're probably spending $400,000 or $500,000 a year on insurance. If they're spending that on insurance, then they will not have that for funding housing, social programs, education or anything else because they're spending it on insurance.
One of the challenges we've had as an insurance broker is getting data: finding out the construction details; going through the houses and making sure we have the proper information on the water pressure; all the infrastructure that's involved that's insured. Brokers are competitive, so they don't share information.
One the things I started doing, that no one else was doing, there's a thing called an ACRS Report. I don't know if anyone is aware of it. It's an Asset Condition Reporting System report and it's produced to help First Nations provide funding for infrastructure. Well, most of these First Nations don't even know they have the report, and we have a difficult time going out to get this report that would help us do underwriting. We could do a better job of underwriting and give better premiums, because if an underwriter doesn't know something then they will add 30 per cent right on the top because they don't know. It's risk. That's what they're insuring.
I think $20 million or $22 million is spent on ACRS reports. The insurance industry doesn't have access to it and there is no national database. It's all worked in a vacuum. All the data collected on all the repairs needed to be done, the construction details, it just goes to the individual and it never goes into a central data bank, so the insurance industry has no access to that information. If we had that information, we could do a much better job.
Thunderbird is aboriginally owned, but we work with a managing general agent that is also aboriginally owned that offers a program offering all those coverages, such as property and liability. We've been doing risk assessments, like going into the home and taking a look at the dryer that is stacked with lint and is a fire hazard. Electricals: if we could just get into the houses, as the insurance, and get information on the construction details, then we would be able to do a better job of underwriting. It's the lack of information that really is a huge detriment. It costs insurance companies a lot of money and raises premiums because we don't know.
There is a thing called the Fire Underwriters Survey. Every municipality has it and they check the water pressure, the fire trucks and the training. They go through the municipality and everything about that fire department is scrutinized and it's given a rating from 1 to 10. That doesn't work on First Nations. You might have a beautiful fire truck that only goes out once and twice a year, so it doesn't have a lot of kilometers on it, but the FUS will say you have to have a new truck every ten years. This could be a beautiful new truck, but it won't fit into FUS. So there is no mechanism to allow insurance companies to rate First Nations so that they could set up the premiums.
One the things I wanted to talk about — obviously this is regarding funding for infrastructure. I have a perfect example. One of our clients in New Brunswick had a huge flood loss last year because they were looking at trying to get infrastructure money for drainage. Well, it cost the insurance company $1.5 million to rebuild all the houses that were flooded out, and now this year on renewal, premiums go up $200,000. Now that $200,000 can't be spent on education and on all the other social services. It's not that insurance companies are saying, "No, don't pay us the premium'', but I'm here to try to help First Nations lower the cost of insurance. A lot of these fire losses that cause death and injury — are heartbreaking and I'm sure you hear about it on the news all the time.
There's the infrastructure relating to water and sewer, which Owen talked about, which is what everybody thinks about. But if you think about it, in Eastern Canada, almost all the homes have oil tanks. We had one oil tank leak at Membertou. It was $200,000. They had to lift the house to get the oil out from underneath because they had the old steel oil tanks. The community doesn't have the money to replace them. There are infrastructure needs out there that are not the clear ones of water and sewer, but they are just as important and it could cost. If you're spending $200,000 on one repair for one oil tank, well, on a reserve you could have 400 or 500 oil tanks. I write about that in my speaking notes.
There really is only one way to lower insurance costs, and that's to stop having losses. The lower the losses, then the lower the insurance. You can come up with a lot of different models and I'll touch on them, but the number one way to reduce insurance is to lower losses and it also reduces bodily injury and death.
I've listed a few and I think the biggest thing is loss control. With our risk assessment, we'll go in and look at the oil tanks and look at the lint, but it costs money. We're cutting back on the risk assessments because we're paying for it; the broker is paying for it. We're trying to do as much as we can. But if there was some mechanism, if ACRS was broader, if there was a mechanism to go out and do these risk assessments, then we could lower the costs of insurance — and the losses and damage. The family was out of that house for a year. Now they're living with other families, so there are two families living in another house. You're putting so much pressure on the housing.
The other thing I wanted to talk about was an alternate method. We speak about Kamloops. All Nations Trust Company is owned by 32 First Nations and they've just opened up their own brokerage, on reserve at Kamloops Indian Band. They're trying to be the broker, so they can control the risk and do the risk assessments to lower costs. I think that's a model that Chris Pegg from Coast Salish Insurance, who worked closely with me on Cowichan Tribes, is involved with and it's a model that could work. If they develop enough premiums, they could put that premium in and they could set up their own insurance company or a reciprocal.
In closing, I guess the biggest thing we need is capacity for education on insurance for First Nations. I'm just throwing that out, because I've been mentoring myself. I think it's something that needs to be looked at. It's not really something that you can do in the committee, but it's something when you're out talking to people, to think about it or even talk about. No one talked about insurance, even though none of these things go on without insurance. I took my business degree at Acadia University. I talk about Acadia now, but we never talked about insurance. There needs to be more education for First Nations. Every reserve should have someone who knows about how to buy insurance and what they need in insurance.
Other than that, I think I've pretty much covered off everything I wanted to say and the rest is in the notes. I look forward to your questions and thank you for allowing me to speak today.
The Chair: Thank you very much. I think these have all been very useful presentations for us. I thank you all for the thought you've put into your presentations and advice to us.
John Kiedrowski, President, Compliance Strategy Group, Thunderbird Commercial Insurance: Good morning, senators. The presentations by André, Owen and Malcolm covered most of the points that I wanted to raise, especially on insurance, but I'll be brief.
I want to focus on one issue that I came across in my research on housing and that is individual insurance cost is anywhere between three and, some are saying as high as, four times higher than off-reserve insurance premiums. Malcolm alluded to some of the issues relating to loss cost factors and that if the insurance company can't understand the value, then they're going to increase the cost. I want to go into some of the other details or examples of why we found the cost for insurance considerably higher on reserve than off reserve.
Again, Malcolm talked about the lack of hard data. There really is no data that the insurance industry and even people trying to do home assessments can rely upon. The ACRS report is very limited. Information on it is hard to access. Most insurance companies have to go and do their own data collection. The data collected by the housing inspectors isn't really shared with insurance companies, so there's a real void in trying to understand what's happening in terms of the housing structures and the age of the houses.
The other challenge, as talked about, is the whole lack of building codes and fire codes. If they're not being built to codes, then you can be assured that the insurance industry will not put a low premium on those types of homes and that's the biggest concern. Homes aren't being built to code or being inspected. Band councils act as landlords. They own the homes and, as a result of that, they need to minimize their own risk as landlords by doing inspections and making sure everything is working properly but that doesn't really happen. We've been strong advocates of home maintenance programs and only a few of the communities have jumped on such a program, where they go in and assess these homes, again, resulting in lower insurance costs.
The last one is the whole issue of heating and insulation of heat sources. We've had a number of fire deaths recently and a lot of the heat sources that are being installed as aftermarket after homes are being built are not inspected and these are a major cause of many of these recent fires we're seeing right now. Then there is a fire cost that will impact insurance.
Those are my comments. I think we'll probably get more value from the questions and use them to respond accordingly. Thanks, senator.
The Chair: Thank you very much, Mr. Kiedrowski.
Senator Enverga: Thank you for the presentation. My question is about insurance. I've heard so much about that. Who puts insurance in place for the communities? Is it the band manager or chief, or the whole council?
Mr. Smith: That's one of the biggest challenges. There is no one normally on a reserve who has any background in buying insurance. Sometimes it will be a band manager or a housing manager or a capital manager or a CFO. Depending on the size of the community, it really involves someone who knows nothing about insurance. It's just only one of the things that show up on their desk.
The problem is that, rather than going out for a competitive bid if they're not comfortable with insurance, what they will do is go with what they have because that's what they know. If they try to venture to get another broker to get a better price with better coverage, what if they make a mistake? With the political situation, it could cost their jobs.
A lot of times the person who is buying the insurance has no experience in buying insurance and there is no dyed-in- the-wool method. You have to go to the band administration to find out who buys insurance and sometimes no one knows. I found that a lot of times it's the person that's on the third party doing the insurance. There is no advantage for them. They just don't want to be bothered so they just stay with what they've got. It's more work and they don't want to do the extra work.
As a broker trying to get new business, the only way we've been able to grow our business is that my partner is Mi'kmaq. He coaches six hockey teams and, on every reserve we go to, he recruits hockey players so we talk to chief and council. The chief and council get a hockey player, and we get to go in and present to chief and council and ask them to at least let us quote. That's all we want, just let us quote so they can compare to what they have.
The toughest job as a broker is getting in the door to do a competitive quote. Everybody keeps their information, so you don't have any information. They won't give you the losses. That's the problem. There is no set person, so you have to go into every community and dig. It's a real challenge.
Senator Enverga: According to André, there's an educational system that we can probably address. Is there a way you can connect with each other?
Mr. Le Dressay: I think so much of what happens, which Malcolm is referring to, is confidence. A lot of First Nation administration staff members don't have the confidence to deal with a market type situation such as a competitive bid with respect to insurance. What we're observing from some of our students is that you're seeing them becoming more confident and it gives the chief and council the confidence to actually turn to someone and ask what this means. Can you do a due diligence and do a competitive bidding process? Those are basic skills that haven't been developed in some administrations. I believe it was Owen or maybe it was Malcolm who said that these skills are not being taught in schools and that's something we're trying to address in some of our programs.
Senator Enverga: How successful are you with insurance? You must have some successes before you. What do you think made you successful on one end?
Mr. Smith: It's like anything. I got into it because I really wanted to make a difference and that's why I set up the Membertou brokerage and then we sent up Thunderbird three years ago with a Mi'kmaq partner to build capacity. When we go in, we go in together and we're there to help. It's all about your attitude and it's all about trust. It really is. It's a trust and we've grown our business through trust. The foundation of success in dealing with First Nations is developing a trusting relationship and it's not just about me, it's about us moving ahead and improving both sides. The success we've had is because of our relationship and going in with the right attitude.
Senator Enverga: Do you have any thoughts about this?
Mr. Kiedrowski: Again, we have identified that there's a need for capacity for people to understand how to purchase insurance, how to run procurement and how to go out for tender. As part of the housing, we tried to get a couple of the communities to go out to tender and, as André said, it's really about confidence. They don't know how to go about doing a tender and they're comfortable with the status quo. While they might be paying an enormous amount of money, it's really hard to get outside of status quo because it's a comfort level.
Again, from my knowledge and I think André said, nobody is teaching courses, even AFOA, the administrators and financial officers, I believe there is no course in how to purchase insurance.
Mr. Smith: When I was in B.C., I worked with Mike Mearns, executive director of AFOA B.C., quite closely and I ran a seminar every year for the AFOA in B.C. on insurance. I used to call it Insurance 101. I walked them through all the different coverages, said hear is what you should be looking for, and here is the kind of cost of things. When I was in B.C., I used to do an annual seminar on buying insurance, but since I've moved to Halifax the AFOA really haven't been able to organize anything along the lines of doing a seminar again. It might be something I should start looking at doing again.
Senator Enverga: As you underwrite communities, do you believe that vacant homes are a factor for why you will have difficulties?
Mr. Smith: The issue of vacant homes is a problem right across Canada. A lot of times you will have a schedule and, if you don't go out and look at every house, take a picture of every house, then the house has become basically unlivable so no one is living in it. There's still rent being charged on it, I guess, or whatever happens and it's just left. A lot of those are still on the schedule and they burn down. That just drives the insurance costs up.
For vacant homes, the insurance companies make us go out and take a picture of every single house, front and back, so we know whether it's being lived in and the condition of the homes.
Maybe no one has mentioned it or maybe nobody wants to mention it, but one of the biggest problems with maintenance of homes, other than the building code issues that John has addressed, is residential schools. You had kids who went into a school, they came back at 19 and they didn't know how to paint, do a roof or fix plumbing. They knew nothing about houses and they couldn't teach their kids anything about houses. The things that I learned when I was a kid, like how to paint and put in new flooring, they didn't learn and they don't learn and they don't know.
There's a huge education component that still needs to happen to teach First Nation community members how to maintain their homes. There's junk and propane tanks in the front and, as I said, a dryer vent that hasn't been cleaned out. There are all sorts of little things when I was growing up that I learned as a kid, but they don't learn since the parents never learned because they were in residential schools. They did not have the skills to teach their kids. We have to talk about that, because that's a part of the situation.
Senator Moore: I would like to follow up on Senator Enverga's question with regard to who can buy insurance. If I'm on a First Nation reserve and have a certificate of possession of my house, can I go and insure that, or do I have to go through the band council?
Mr. Smith: Actually, this is part I did not even address. A certain amount of social housing goes under the band policy and is owned by the band, and then there are quite a few homes individually owned on certificates of possession. That is, I think more than anything, the biggest challenge to get insurance for, because if the community has $500,000 worth of premium, many insurance companies are interested in coming down the road and at least talking to you. If you have one house, it's hard to get insurance for individuals, and the FUS rating is part of it. The municipality is either a 1 to 10, and the insurance company knows how to rate it. When you're on reserve, they have no idea of what your fire protection is and whether there's a hydrant.
It is the individual, the CP holders. You want to develop equity in the homes. There are quite a few communities in B.C. where instead of having just rent they have a mortgage so after so many years they own their home, but then they have to try to insure it.
I have tried to come up with a program where the band sets up the certificate of insurance and each individual owner gets insurance, but the biggest challenge is getting individual homes on reserve insured.
Senator Moore: Don't they have to have insurance to get the mortgage?
Mr. Smith: If it's through the community, a lot of times the community will give them the mortgage, but there's no bank or financial institution that will provide a mortgage without insurance. That's a very good question, and it is a real challenge.
Senator Raine: Because of the issue of maintenance of homes, do you think there would be an impact if there are more homes and more private property on reserves where there's true ownership of homes by the individual?
Mr. Smith: My own personal feeling is that's the only way to go, because if you don't own it, you don't care about it as much.
I'm trying to think of the name of the community in Barriere that has a strict policy. You pay a mortgage and, after you have paid off that mortgage, you own your home; but if you miss three payments in a row, then you lose it. Very few communities are that strict. Quite a few communities have rent that they do not charge because they can't charge it and then they don't want to do anything, so a lot of rent doesn't get paid. Then there's no money going into the band administration office for repairs because they are not collecting rent because there's no ownership. I think home ownership is the key, but I think education on how to maintain that home is also important.
Mr. Kiedrowski: There are some communities that we've also been working with, with the First Nations National Building Officers Association, that before a home is given to somebody to rent they must take a home maintenance program. It's very few and far between that do that, and those communities that demand that program, their homes are maintained quite well and they also do a full inspection about a year or year and a half after to make sure things are still being properly repaired or kept up. That's really more the exception than the rule.
Senator Dyck: Thank you for your presentations this morning, gentlemen. My first questions will be for Mr. Le Dressay.
You talked about the value of a certificate of possession, and you're saying that in some cases it can be sold for about 10 per cent of comparable value in a neighbouring community. Could you give us an estimation of how prevalent that is compared to communities where the value might be equivalent to a neighbouring constituency?
Mr. Le Dressay: Market value is determined by some pretty simple factors; one is demand. The thing about a certificate of possession home is that it can only be sold to other band members, and so the demand for the home is significantly lower and, as a result, values can be lower. So if you have larger markets, you're going to have higher values.
There are First Nation communities that have thousands of members and so as a result you can you can have higher certificate of possession value numbers, and there are First Nation communities that have very few members and they have very low certificate of possession market values.
That particular quote is based on something in the city of Kamloops compared to the Tk'emlúps First Nation, which is right beside the city of Kamloops. There's a river separating the two. A certificate of possession home on a one-acre lot sold for $40,000. The comparable home in the city of Kamloops, which was a comparable home but not a comparable property size, was $380,000. That's one example of 10 per cent of the value, and that's not a small First Nation. There are about 1,000 members.
That's where the numbers come from. The important factor to consider is what else contributes to market value. It's not just the size of the market. As the other gentlemen here have been saying, it's also information; it's also the legal framework; it's building codes; it's investor certainty; it's the administrative capacity to purchase insurance. All of these public sector services increase market value, so it's both the private side of the equation, which is demand and supply, and there's also the public side. You have two significant issues to be resolved in order to raise market values.
I provided some information of First Nations who have done that. When you look at leaseholds, which are available to a much larger market, the market value goes up. I happen to live on reserve. I live in Sun Rivers; I know that my utility provider is Corix. The market values there are as high as or higher than the city of Kamloops. What's different? Good infrastructure, good local services, legal capacity, everything is done through a very strong development agreement. So it's possible to solve these problems, and I think that's something for the committee to consider.
Senator Dyck: Our committee traveled to B.C. last fall and we did visit Tk'emlúps and Westbank First Nation. We were able to see what happened with Westbank First Nation with their A-to-A leasing and the developments that facilitated.
What were the main policy changes that allowed communities like Westbank First Nation to successfully engage in increasing their housing and increasing the value of their properties? Would they be things like the First Nations Fiscal Management Act and the First Nations Land Management Act? What are the key features that allowed them to participate in increasing the wealth of their First Nation through development of their housing market?
Mr. Le Dressay: I could list five things that are absolutely key. Number one, property rights certainty. What you have in Westbank is a much higher level of property right certainty and tenure certainty than in other First Nations. The leasehold tenure is 99 years and there are renewal clauses within their leases. That creates a lot of tenure certainty.
The other thing have you is market familiarity. When people go to do business with Westbank First Nation, they can purchase something that they can't purchase in many other First Nations, and that's something called insurance. You can purchase a type of insurance that I don't know if you can purchase at any other First Nation — title insurance — in Westbank First Nation because the market has certainty. All of a sudden, now you've got market confidence that occurs.
In addition to that, you have a very extensive legal framework. The Westbank First Nation passed 35 different laws, first under land management and then under their self-government arrangement, which created certainty with respect to local services, infrastructure and fire protection. All of the things that people are talking about here that are missing, they have filled in those gaps. That's what I'm saying. It's not magic that makes the values go from $10,000 an acre to $1 million an acre. It's getting the legal framework, building good infrastructure and having administrative capacity. There are solutions to that, and that's what our education program really focuses on.
One example that I know our students really like is to go through the Westbank example step by step by step. What laws need to be developed? How they can be developed? They find that very valuable. Hopefully, they take it back to their communities, and that's where the process begins.
Senator Dyck: If I could ask one more question, in your recommendations you were suggesting that this committee should support amendments to the First Nations Fiscal Management Act. Do you have any specific suggestions as to what those should be that you could submit to us?
Mr. Le Dressay: In 2011 or 2012, there was a report that was done for Parliament and the Senate suggesting some amendments, and I believe some of those amendments are administrative in nature, just to make it easier to participate in that piece of legislation. Some of them improve investor confidence so that, when financing is done through the First Nations Finance Authority or certificates are issued by the First Nations Financial Management Board, those processes happen more quickly and it provides more investor confidence. Some help to expand the revenue potential to finance infrastructure. For example, right now, local governments have the power with respect to fees and charges, and grants in lieu of taxation. Those powers aren't in the Fiscal Management Act. Those powers would give First Nations more opportunities to finance infrastructure. I don't think they're significant amendments, but they are things that would streamline it and make it easier to participate.
Mr. Kiedrowski: If I can just add to Mr. Le Dressay's earlier comments, he mentioned the four key points of moving forward on infrastructure. I think a really big challenge when it comes to housing infrastructure is governance removing the politics from infrastructure and housing demands. If you look at Westbank, Kamloops, Whitecap — all of the communities that are really moving forward — they have removed the politics from housing. It's not based on voting. It's not based on trying to figure out their next move politically. They are able to sidestep that, move beyond that and do well.
For communities that I believe are sort of stuck in the mud in trying to move forward, the big P is stopping them. It's preventing them from moving forward, and I see that time and time again with communities trying to move in terms of building permits or trying to move forward on any housing. It's the politics on how they're going to get their next vote.
Senator Tannas: A number of my questions have already been answered, but maybe I'll just add one question to the points that were posed by Mr. Smith. To anybody on the panel, it doesn't sound like there is a risk management best practices for First Nations government kind of handbook or, better yet, maybe a certification process that could go with an insurance program that would give a better rate if these things were accomplished by a First Nations government as they go to look for insurance.
As we go forward, as we look for solutions, one of the things that will have to come with dollars will be assurances that some of these critical elements are being put in place, everything from governance to things like risk management, building codes and so on.
I'm wondering, Mr. Le Dressay: Would the Tulo Centre be a place that could develop something like that — a certification program or a set of best practices that could be published and people could focus on? Is that something that you can do so that we don't have to leave it all to our friends at AANDC to cook up?
Mr. Le Dressay: One of our courses is all about debenture financing, so we have a whole process by which credit ratings are established and what you have to do in order to manage the risks associated with credit ratings. But I think there's another potential avenue to address your particular concern.
Senator Dyck asked the question about the Fiscal Management Act. One of the institutions in the First Nations Fiscal Management Act is the First Nations Financial Management Board and one of the critical services that they provide is certification services. One of the issues that Mr. Smith has mentioned is the difficulty in having third-party assessments done. I think there's a real potential to look at that particular institution as an opportunity with respect to risk management, whether it's risk management with respect to fire protection or risk management with respect to debenture repayment. All of those risk management issues arise, and I think there's an institution in place that may be something that the Senate could consider as a possible avenue to address that.
Mr. Kiedrowski: You hit the nail on the head, and this actually formed the relationship between Mr. Smith and me. This is how we actually started to talk about this whole thing on risk management. The challenge that Mr. Smith and I really found is that, not only is it trying to understand risk management, risk control, risk mitigation within First Nations, but even people in INAC and CMHC don't understand these concepts. We try to talk about a few steps in terms of educating government officials what risk is, how to move forward, how it should be done and then slowly go to band councils, talking about procurement and all of the issues related to risk. We've had an extremely difficult time getting any buy-in on the word "risk.'' They don't want to take the risk on risk, basically. It's really frustrating because everything boils down to risk control or risk mitigation. It's a real challenge moving the government officials on risk, let alone First Nations. Anybody off reserve fully understands these issues from a business point of view, but, from a government and First Nations' perspective, it's pretty archaic thinking right now.
The Chair: On that note, Mr. Kiedrowski, I'm just wondering — and you've had some experience in infrastructure projects, as have maybe two other panel members — would you have any comments on the capacity in AANDC to properly oversee infrastructure on reserve?
Mr. Kiedrowski: I'll take the first; I'm sure I'll have a comment. I think the challenge is for AANDC to oversee it, maybe best as observers to help to move the process forward. I think there's a real void there in terms of understanding and their expertise on that.
I know from my years of working with First Nations national building officers on the area of housing that there's a void right now. Outside of FNNBOA, there is no national group that has really taken on the infrastructure/housing mandate. There's AFN, which is really more of a political organization, which has challenges trying to make institutional change. I think that's what we're trying to do. We're trying to move and create institutional change, so there's a real void. To have government to try to stickhandle that, I think more so as an observer, there's a big void there.
I know FNNBOA has been advocating in terms of moving forward on national housing to take the lead on it, and we're in the process of trying to put a business case to do that. That's ranging from working with capacity and trying to work with communities in terms of planned reviews. In my earlier presentation, we talked about the role of tele- inspections and using cameras to do remote inspections to help build that capacity. We're working on that process now. From a housing side, I believe in a third party with Indian and Northern Affairs and, even, to a certain extent, CMHC working to help to build that.
Mr. Smith: When a First Nation builds housing, there are a few larger ones that have their own construction departments that can build their houses, but very often they get contractors in to build houses, and the contractors will build substandard housing, and the First Nation has no recourse really to go back after those contractors. So a lot of times they will have to give up and get another contractor.
There are even some large communities — I know Akwesasne had a bunch of houses built. The contractor did really lousy work, disappeared, gone, and they were left with several houses unbuilt and no recourse to go after the contractors.
There is a process there that needs to be refined, along with the certification program. Maybe we need a list of approved contractors across the country who have been certified, as John says, so the First Nation knows if they get this contractor the work will be completed and done properly to code. There are contractors that are venting the bathrooms and dryers into the basement. Mould, right? It's a rework process for them.
There are a lot of things going on that are just wrong done by non-Aboriginal contractors building housing on reserve. No one has really addressed that, so I thought I would throw that out. It's not an insurance issue, but it's sad to see when it happens.
Mr. Matheson: From a utility infrastructure perspective, there definitely is a role for AANDC, for Aboriginal Affairs, and I see it more as oversight, as the ability to look across the country where infrastructure dollars are going to be spent. But there has to be some collaboration there with the groups that are close to these Nations, to the groups that have been working with them and finding solutions.
When these partnerships are put together and the bond around what is trying to be accomplished is in place, it often then stops with funding, with the process. When we talk about some of these larger projects outside of Aboriginal communities, the process takes years. In some of these communities they don't have years. They are they in trouble now and, to look at what the overall oversight would be of these communities, we need to look at them as living and continually update them but to have a perspective and bring experience, whether it's private sector or other experience, to it to show where they should go and how some of these monies should be allocated because there is a limited amount. It also opens the door for other forms of funding to come forward outside of the federal government.
Senator Moore: Mr. Smith, you cited examples where there's no recourse for a First Nation against, say, a non- Aboriginal contractor who does inferior work. A lot of times the money comes from the department or from CMHC, so how is it that there's no term of contract that they have to build to a certain standard, code, otherwise they'll be penalized or there will be recourse? How is that? Why is there no recourse? Isn't there some kind of a contractual arrangement put in place when they start?
Mr. Smith: John would be able to address this better than I would. I'm coming strictly from an insurance viewpoint.
In some of these situations there are no contracts. They just say they know this contractor; there's only a limited number to ask; and basically they get the money and they go ahead and —
Senator Moore: I know, but they get the money, and they get the money from the department or CMHC in a lot of cases. So the person who gives the money, shouldn't somebody be putting that in place and telling the band that this is a requirement?
Mr. Kiedrowski: The band has put together a housing plan and they approach either section 95 or section 10 for funding. When the monies are transferred to the band, there is an agreement with the band council because they are the authority with jurisdiction. It is the responsibility of the First Nation to ensure that those homes are built to National Building Code and all the standards. It's stipulated in an agreement as part of the agreement of transfer of funds.
What basically happens is very seldom contracts are tendered. They hire their relatives; they hire contractors that aren't really qualified and there's no contract. In many cases, the contract has been written by the contractor that you can't sue the contractor. They're really nice agreements. So there is really very little recourse.
Again, it's back to the whole issue of capacity and risk and risk mitigation and risk control. They should procure procurement on those homes; they should tender those homes; they should have proper contracts. There should be some recourse for First Nations to go after those contractors, and many of those safeguards do not exist.
Senator Raine: I just wanted to go back to comments on the lack of information that makes it difficult for the insurance business and the ACRS which stands for what?
Mr. Smith: Asset Condition Reporting System.
Senator Raine: So that is lodged in Aboriginal Affairs and that system does exist, but you're saying that system could perhaps be expanded to provide value to First Nations across this country in tracking the assets that they have in a way that allows them to go out and tender for insurance. Could you elaborate a little bit on that? If you could redo it, what would you do?
Mr. Smith: This is something John and I have talked about extensively and actually made some presentations to them on trying to look at this ACRS report, instead of having us as an insurance industry go out and do a full assessment and then having them go out. They only look at capital assets. They don't do everything. They'll do the band administration, the hospital, the clinic, some of the infrastructure, the pumps, and that's it.
Then they will provide a report stating what repairs need to be done, what needs to be replaced, and in the report they list a hundred repairs that will never happen. This is usually done by an engineer at $1,000 a day, and they focus on this very little narrow piece of the pie, yet someone has flown or driven out to do this report. In my experience, most of the people I have talked to have never looked at the report and some can't even find it.
In Quebec I have a community we've been insuring for five years. It's a huge community, and they don't have an ACRS report and they can't find one, and that information is kept just for that community. It's not put in a central database, so no one can access that information.
My thought, and this is something John and I have talked about, is why not have someone go out and do the whole thing — not just the capital assets but look at the whole community — and then do a total risk assessment. If you're going out anyway, let's do it all. You don't really need an engineer. You might need an engineer once in a while, but you certainly don't need an engineer all the time. Someone could be trained. There could be a training program through FNNBOA or someone else to go out and certify and do risk assessments.
In fact, we've done some risk assessments just us as brokers, and we brought in one of the FNNBOA representatives for Atlantic Canada to do those risk assessments. They looked at flooding, so they looked at the flood map for a 100- year flood plain. They looked at forestry encroachment and made sure there was a buffer in between. They looked at oil tanks. They looked at all the risk management factors and went through and measured all the buildings because we couldn't get an ACRS report.
Money is being spent on this. Maybe we could look at that program, change it and evolve it into a risk assessment asset report. I'm saying I don't think in many cases ACRS is giving the value back to government that it needs, and certainly that information is lost. It just seems silly that all this money is being spent on an ACRS report and there is no central database in this day and age.
Senator Raine: What is the reason or intent for having the ACRS report?
Mr. Smith: To back the funding up, to provide the wherewithal to say here is what we need and here is a list of all the things we need to get repaired, so this is the money we need. If I'm getting it correct, it's used to get funding for repairs and for capital improvement.
Senator Raine: So this is a design by the ministry or by AANDC to help them decide where their limited capital funds go? Who needs it the most?
Mr. Kiedrowski: That's correct. It would be interesting to ask AANDC exactly how ACRS is used but, from my understanding of it, it has limited use because once the information goes in, it's almost like an inventory control. It's costing, again to my understanding, $18 million to $20 million a year in the program.
This is a prime example of something that should be absolutely privatized, put out and have a better data collection, probably at substantially much less than the $20 million. That data could be used for insurance purposes or for utility purposes. It could be used for many of the gaps that we talked about and trying to understand infrastructure. We put together a proposal to talk about that.
I think that the challenge is trying to pull out AANDC on a baby that belongs to AANDC and the regions that they're not interested in touching. It's a nice program for people that work on it.
Senator Raine: Did you say you had put a proposal in to them?
Mr. Kiedrowski: We went and talked to them about trying to pull it out and moving it towards letting the insurance take it on or working in a partnership.
Mr. Smith: It was about three years ago.
Mr. Kiedrowski: Yes. The challenge was for having some of the bureaucracy to release or let go of a program that was ingrained in their systems.
Senator Raine: So, you would go at it slightly differently. Private sector would go at it as, "We're going to go in and do an assessment and monitoring, and we need to provide this information for a variety of reasons — insurance, replacement of assets, repairs.''
Mr. Smith: More comprehensive.
Senator Raine: More comprehensive. If you did that, do you think with the $20 million budget that's spent on it now you could pull together a national, useful database of information?
Mr. Smith: We actually worked with ClearRisk, a company out of Newfoundland. I personally spent, and never was remunerated for it, probably a month of straight time just looking at it, working with the risk management, so that you could take an iPad to the reserve, take a picture with the iPad and put in the information, and it would automatically be captured in a database. That database was so dynamic that you could add different factors depending on region. Right now, the ACRS are regional. There is Ontario ACRS. Obviously Quebec doesn't seem to have ACRS, but it could be easily done. Once the software was done, with the technology, I could do it with my iPhone.
Mr. Kiedrowski: In addition, Senator Raine, there is also data collection on housing conditions. If you look at all the data collection in First Nations, you have ACRS and you also have a housing conditions report. You have one that CMHC will hire. You also have housing conditions reports being submitted to Indian and Northern Affairs. You have all these monies going forward to data collection. If you can streamline all this data collection, move it into one central place, and make it available and transparent, then everybody will have access.
Right now, CMHC reports just recently are being shared with INAC and vice versa in terms of housing conditions. I know the FNNBOA guys do that constantly. They are submitting reports. There is a slew of information being collected, and it needs to be more streamlined and centralized and made accessible so people in insurance can use it or people trying to do housing estimations.
There is an insurance database. If you get in a car accident and try to jump and go to another car insurance firm, they know exactly what's happened. They know any claims to your houses. But similar systems don't really exist in First Nations. There's no data collection, so it's really hard to make any estimations.
Senator Raine: I'm thinking the budget is probably sufficient, but it could be spent in a way that makes it a lot more useful, so that when you go back again to the individual First Nations and First Nation people who are trying to get insurance, this would decrease their costs of insurance.
Mr. Smith: Yes. A lot of times with these ACRS reports, the engineers will go to the community and they don't even talk to anybody. They don't even ask them anything. They just go in, do their shtick and leave. There's no engagement whatsoever. They don't even know the ACRS guy was there and did the report, which is —
Mr. Kiedrowski: And on the ACRS report, they may make recommendations on what changes need to be made in terms of repairs to the capital side, so it would be the schools and the band houses, but the communities don't necessarily have to respond to those repairs.
Senator Raine: You mentioned that this could be done by private sector business providing this service to the budget of Canada, which would help First Nations move forward in their infrastructure and housing. Would that be a better way of doing it, rather than lodging it in the ministry of Aboriginal Affairs and Northern Development Canada?
Mr. Kiedrowski: This would be a prime example of privatizing data collection, absolutely. It would almost be a showcase. It would be such a simple process to do that, because you have the insurance industry right now trying to develop their own systems to go forward. Malcolm and I were looking at methodology in terms of data collection. They are actually going out to collect data. Then you have the housing guys collecting data, and the ACRS data. If you take the $18 million, $20 million or even $15 million, and I think it's a secular pay scale, I'm sure you can collect that type of data with people physically going in for a much substantially less cost and better data.
Mr. Smith: And one thing that is really missing is there is no fire data. There hasn't been anyone collecting fire data on reserve on what burns down since 2003, I think. I was trying to find some figures. You have claims on reserve, and there is no national database for claims that go on reserve. If there is a fire here, insurance companies don't know.
My biggest challenge as an insurance broker is getting a loss run, because the previous broker won't give it to you and the insurance companies won't give you a quote without it. That is our biggest challenge, because there is no database.
Senator Raine: Could you explain this to me, just to be clear? How does this work for non-Aboriginal communities off reserve, for regular municipalities, regular houses? Where does the data sit?
Mr. Smith: If a house burns down, an insurance adjustor goes out and they record it and it goes into an insurance database.
Senator Raine: And all insurance companies have access to that database?
Mr. Smith: Yes.
Senator Raine: Are there any privacy issues on that?
Mr. Smith: It's not individual homes. It's data on fires. If you have a car accident, people know about your car, as John said. The insurance industry is like a lawyer. They have to keep privacy and have to follow PIPA, I think it is, as well as anyone else. But if you have a fire, they know. They can check it and say this address had a fire.
Senator Raine: When that comes down to personal privacy issues, if there have been lots of fires in your houses, now you will have trouble getting insurance.
Mr. Smith: Yes, as well you should.
Senator Raine: You become more responsible in that case.
Mr. Smith: Of course. You're held responsible for what you do. Just like if you have a claim on your car. If you smash up your car, you will have to pay more for insurance.
Senator Raine: I guess the biggest thing you mentioned was because these are unknown, because this data isn't available, the cost of insurance is way up. What percentage did you say it would be?
Mr. Smith: It could be up to 30 per cent. There is a buffer that underwriters use. The thing is, if you have good data, the insurance companies are more comfortable with giving you a good rate. If they don't know, they won't even quote if you don't have a loss history, and, if it's iffy, they'll add up to 30 per cent or more — sometimes doubling the rates — just because they don't know. There is no way you can find this information. That's the biggest problem.
Senator Raine: You mentioned that in First Nations such as Membertou and Osoyoos, it is half a million dollars a year spent on insurance?
Mr. Smith: Just on the property, casualty, community program insurance. That's not individual homes and that's not their health insurance. That's just the property and casualty insurance. It might be a little less for Osoyoos because they don't have auto. Auto is done by ICBC, so it wouldn't be part of the program. But Membertou, if you looked online which is public information, I would be surprised if they weren't spending at least $450,000 on insurance, because they also have a fishing fleet they insure as well.
Senator Raine: But those two First Nations have good systems in place for purchasing insurance.
Mr. Smith: Yes.
Senator Raine: If you would take a comparable First Nation that doesn't have the systems in place?
Mr. Smith: The property insurance would go up. Instead of paying a 28-cent rate per $100,000, they would be paying at 62- or I've even seen an 80-cent rate. It's also predicated on losses.
Senator Raine: Thank you very much. We have some good information there.
Senator Dyck: I think you answered my question anyway. I was surprised when AANDC appeared before us when they were talking about the ACRS assessments and that they didn't include houses within their assessment. It seemed to me that when you look at the assets of a community, of course, houses are a big part of the community, in addition to the public spaces, like schools and so on.
My question would be: Do you think, if you were to improve and privatize it, that houses should be included? It sounds like you're saying it should be because it's currently being done by CMHC.
Mr. Smith: If I could. If you go a typical reserve like Akwesasne — and I'm just shooting because I haven't done it in a while — but there was $80 million in capital assets, like buildings, schools and I think it was $130 million in houses. Just to give you some terms of reference.
Mr. Kiedrowski: I think —
Mr. Smith: It's 65:35. I think it's in there.
Mr. Kiedrowski: That's right. I think the challenge, the original intent of ACRS, if I know a little bit of the history, is it was really as an inventory on their capital expenditures from AANDC. It hasn't evolved at all and it hasn't really changed. I believe they were trying to change just when we gave a presentation as an opportunity to say, look, here's an option to look at ACRS, privatize it, move it out, include housing data, include other sets of data sets in there and you can do it for substantially much less than you're doing it for now. That fell upon deaf ears. They weren't interested in that at all.
Senator Dyck: Just to follow up, you were talking about fire prevention and I'm wondering how would that be done? Do private companies that do this, would they normally include that in their assessment? Would they do the fire prevention data collection?
Mr. Smith: Sure. For fire departments, when we do up an application, we look at the fire department, how many volunteers they have, access to water. I think I mentioned it in my speaking notes. Without water, you have to tank it in, so the insurance companies rate a community. If they don't have good fire protection, then the rates go up. It would be the property rates that are really affected by that.
The other thing — and I just briefly touched on it — there are some opportunities for fire suppression that are not even being looked at. If you don't have the volunteers right there, by the time you get to the fire it's too late. There is a thing called the Dry Sprinkler Powder Aerosol coil, called a DSPA that could put out a fire. They throw it in. I worked for two years with the P.E.I. Fire Commissioner and they proved that these things work. It kills the fire. It gives time to the fire department, so it cuts down on all the water losses.
Our brokerage was giving away these little things that you stick in your hood vent above your stove. If you have a fire on the stove, it pops right down. We were giving those out, trying to think of ways to lower losses.
There is some innovative fire suppression, other than going in with a hose. Because some of the biggest damage is caused by water, and fire departments are reticent to use something like a DSPA because they don't get to charge in with the hose and do their thing.
It's the gospel truth. We gave every fire department in P.E.I. two of them. I thought it was a great thing to do and they wouldn't even use them. All you have to do is pull the spring. I threw one in and it puts the fire out, but they wouldn't use them because that's not what they do. If every RCMP officer that shows up to a fire — and they have to for forensic protection — had a DSPA in the back of their car, then they could throw it in. There is no risk or very limited risk. The training program takes two minutes, and you could really mitigate fire damage, not only for First Nations, but for anyone. On a First Nation where you have two or three community members that each had one of these DSPAs, at least no one is going to die and it would certainly mitigate the damage. All I'm saying is there are some alternatives out there that are not even being explored. This has been approved by the National Fire Prevention Association and a test has been done for ships, by the government, with using DSPAs.
Senator Dyck: Well, in addition to collecting the data on fire safety and prevention on First Nation reserves, I think it's of great value to know where resources are needed. Insurance rates may go up, but in addition, it would provide an inventory of where the needs are the greatest,because of course, at this time of year, on First Nation reserves and elsewhere, there are fires occurring and children are dying. We don't know what measures are in place across the country. Could that be used as an argument to set up this centralized, coordinated, more comprehensive database?
Mr. Smith: Definitely. The fire department information would be a key part of that risk management and risk control.
Mr. Kiedrowski: I know a couple of weeks ago, one of the First Nation leaders talked about the failure of data collection and standards. I know, in terms of data collection, right now there's very little data on fires being collected and, not defending the bureaucracy, but who is going to take this on? If you move off to a third party, again here's another opportunity. They can collect housing data, ACRS data, fire data and fire information at the same time, because there is an incredible void out there. It's time to address it because not only is there a need for insurance, but there are no benchmarks. You don't know how far you're moving forward.
Mr. Smith: When I'm doing an assessment on a community that doesn't have their own fire department and they're doing it for a municipality, I spend a couple hours on the Internet trying to find out information about the local fire department so I could send it in with my application. I need to know what types of fire trucks they have, how old they are, how many calls they have a year, what is their area, and how fast they get there. There's nowhere to find that, so I'm on the Internet trying to use Google and Facebook to try to find information for an insurance application for a First Nation.
Mr. Le Dressay: If I could just add one thing. The senators are asking some very good questions, and I think you really have to get to the nub of the information system that you're referring to here. Off First Nation lands, the nub is the land title system, and that is the basis by which you integrate all your databases. That's where financing, insurance and utilities occur. That's the nub of the database by which you integrate with all the other databases.
So the key infrastructure that you have to look at, if you're thinking of significant changes, is the Indian Land Registry. That's the one that you would want to look at and see how it could be modernized to be more like a title system, so you could integrate all of the type of databases that are being referenced here.
The Chair: Thank you. I don't know if this question has been answered and I don't know if you can answer it, Mr. Smith, but some First Nations do not have access to insurance coverage because of the land title — the ownership issue that you described. Do you have any idea what is the overall percentage of First Nations that don't have access to insurance coverage?
Mr. Smith: See, that's not been my experience. I know there are places — the really remote areas — and I don't deal a lot way up North. The farthest North I've done is Tagish or Tlingit First Nation for their insurance. I met with the Innu on Monday morning in Sheshatshiu. I went up to quote on their insurance. They had insurance for some of their larger commercial buildings, but not for their school. They didn't insure it. They figured if it burned, I guess they would get another one. I don't know. I couldn't speak to that.
Their deductible on their housing was $250,000 for their insurance, so they could get insurance and there was some limited coverage. But if a house burns down, with a $250,000 deductible, you don't have any insurance. That's extreme. Most communities do have insurance. The problem is they're spending so much money on it.
I cannot really speak to Attawapiskat and a couple of the ones up North. I've been in B.C. and I've been to a lot of communities in other areas, but I haven't been to real northern ones except for Taku River Tlingit and Sheshatshiu.
Senator Beyak: Thank you, gentlemen. This has been so informative. We are lucky to have your expertise here today.
I was an insurance and real estate broker for 35 years up in a remote area surrounded by First Nation communities. My late husband Tony and I had a tourist resort, as well, which was always hard to insure, so I appreciate what you're saying about the need for a database. It's crucial to any kind of real estate or insurance.
I listened carefully to you, Mr. Matheson, because we hear from so many witnesses that there is consultation, collaboration, projects going through — whether it's housing or utilities — and then the funding stops. Either someone is offended because they weren't brought into the consultation process, or one group is taking money from another group to fund something different. I don't understand how we solve that, but we do hear it much too often, and I'm sorry that you've experienced it as well.
Finally, Mr. Le Dressay, I was so moved by your comments about confidence and trust. We had a young chief here a few weeks ago, brand new. He was so excited about his reserve, but he recognized the challenges, too, and he didn't have a clue where to go or who to talk to about anything — insurance, governance or running the council.
My question would be to all of you. With your vast knowledge, can you see a need for some sort of national blue ribbon commission? Our committee is studying housing and infrastructure. Other committees are studying education and governance. Can you see a better way forward? What we've been doing for decades isn't working in any capacity, and I would love to hear your comments on whether there's something we could be doing differently that you've seen from your work in your different fields.
Mr. Smith: There are a couple of good organizations out there. I think the AFOA tends to have a good group of seminars. You could maybe partner up with an organization similar to the AFOA to work with education. Obviously, I've got this narrow box and there's so much more to be covered off, but they call it the "general theory.'' If you get really confident in one thing, it tends to spread over other things you do. I think the AFOA would be a good one to have a national program on insurance and purchasing procurement on insurance. Other than that, John has some comments and I'm sure the other panellists do.
Mr. Kiedrowski: I was giving a presentation on building codes and fire codes and trying to wave the pompoms to encourage them to come forward. The councillor, who was an incredibly interesting man, had a construction company. He was really bright, just an amazing individual, and he pulled me aside and said, "What about me?'' I said, "What about you?'' He said, "What about me? Who is training me? Who is giving me the understanding? Who is going to give me the capacity so that I understand how to better move forward on my issues?''
I was taken back a bit because I never thought about it until it was raised. He was saying, "Nobody was telling me, as I was elected to help move forward, that I don't have the capacity. Yes, I might have some staff, but I don't know what I need to do as an elected official on how to move forward.''
I've raised this time and time again. To go to a blue ribbon commission, I think there's enough out there they could easily tap, and it's forming partnerships and trying to coordinate a lot of the issues. There are a lot of good organizations out there that can deliver such programs.
I even put forward that when elected officials get elected, have them come in and talk about their roles and responsibilities, seminars on what bylaws are, how to move forward, and the challenge that Owen talked about, about how that impacts moving forward.
Again, you raise these and it's hard to get traction. It's hard to get buy-in. I think the challenge is when you mention the word "capacity,'' it's a vague terminology. When you mention capacity from a governance side, they see money. Well, it does take money, it takes knowledge and it takes time, and that seems to be lacking, I think, in the last few years on this in trying to move forward. I think everybody is stuck in mud and they are their spinning wheels.
Mr. Smith: To follow up on what John says, I was on the executive of the Industry Council for Aboriginal Business. We set up a program where an executive would spend a week on reserve and go to chief and council meetings, and the chief would go back and spend a week in the boardroom. That was one of the ways we were thinking about it. It was mostly developed towards economic development, so that they could see why a business corporation makes those decisions, and the executive could see why chief and council make the decisions they do, so there is better collaboration and it's all about education. I thought that was a great program.
I know there are some mentoring programs out there for young business people. They mentor with an older person.
The insurance industry is a huge industry and it's not just selling property and casualty. Every community has group benefits. There is adjusting and a lot of things. Perhaps there is some way to set up a mentoring program where the insurance institutes get together to help educate First Nations on insurance. There's a lot of education that goes on, but there are no First Nations involved. They'll have lawyers and social services, but nobody knows anything about insurance.
Mr. Matheson: Working with First Nations is unique, and it's not like working with non-Aboriginal communities. Businesses seem to have found a way to do this, and you can't do it that way anymore. It's an old-school approach. We have to be working in collaboration, and we have to be working with and building trust and respect with each Nation that we want to work with. It's not a matter of coming in, putting something in place and leaving.
I'll give you a for-instance. The Neskantaga in northern Ontario had a water treatment built 22 years ago. It's a vicious circle when you think about how this works. They had a need. They had to get money. They had a plant built, and that's where it stopped. So two years after the plant was put in, it didn't work anymore. They're back on boiled water, and they have this investment sitting there rotting. Twenty-two years later, they're now trying to figure out what to do. They went through the process as they're supposed to; they shortlisted groups; and those groups have now proposed. They're going to take those proposals and try to get funding. Nothing is guaranteed. You have a community where the only way to get there is ice roads and in by plane. They don't have water.
We can't do it how we used to do it. There has to be a mechanism in place in order for us to consistently work, create relationships and build friendships, because that's what this is about. This is long term. This isn't a two-year assignment. These are decades' worth of partnerships, the way we see it, and I don't know how else you do it. If you're going to build capacity, you can't do it in a couple of years. Certified operators in these plants have to have a specific amount of hours, training and book education, and they have to pass exams.
We have to change the way we're looking at this. When talking about AANDC, it has to be revamped. It has to be looked at differently. The old process that was working doesn't work on the ground any more.
One last experience: We have relationships with different people in the agency and we talk to them on a regular basis. I was talking to them about this model that we had put together. This is a living model, it has holes in it and we keep going to chiefs and councils across the country asking for their input. They keep giving us input, they want to work with us, and we are working together. I was told directly off the record: "Don't bring this to us. We want to hear directly from the chiefs. If you can convince them, we'll talk to them.''
That's part of that old process, and the old process, as I said, worked, but it needs to be changed. You have companies out there with the know-how. You have companies out there with the time and they want to make this work. You have companies out there that have spent years building these relationships, and they want to deliver to these communities — communities of 60 people or 600 or 6,000. It just has to be changed.
Mr. Le Dressay: I'm just going to add a few little points to everything that has already been said that might be helpful in your question. Obviously, it's the question. Everyone is frustrated. Why aren't the policies working? What can we do that will work? That's why I just want to reiterate the little four-part test I discussed earlier. When you look at all of the options that are in front of you — and you'll have lots of good recommendations to consider — consider this test: First, is it proposed by a First Nation? Is it First Nation-led? That leadership is so important to actually advance it. That's how the particular initiative is going to actually be implemented, because it will be led by a First Nation.
The second thing and this is equally as important — is it optional? Are you suggesting that everyone do this, or are you suggesting that you have this choice to do this? You have to respect First Nations' right to self-determination and everyone's right to self-determination. That's another important feature.
The third test that you should consider is: How will this change be implemented? Is there an institutional framework that develops capacity? Is there the ability to take that administration capacity that has to be changed and actually implement that? Is there a First Nation institution that can actually help to implement that change? You have lots of good institutions to consider in terms of implementing that change.
The last thing about the test that I think is very important is what this committee does. This committee provides other parties with the political will to move forward, so that your good research becomes the justification for why a particular policy change is being made and it gives the public confidence. If there's public confidence, there is potentially funding that will flow and resources that will flow. I think that this committee offers an important element of change.
I know that sometimes we look at various policies and say that they haven't performed as well as we would like and ask how we change them. There's something for all of us to do to better that and improve that.
Senator Beyak: Thank you very much.
The Chair: Thank you very much. I'm glad we heard again from you, Mr. Matheson.
We heard from the Lac la Ronge Indian Band and Birch Narrows First Nations, and they stated that, as a result of annual payment cycles for government funding, it was difficult to plan long-term for infrastructure development. You've got some long-term relationships you've described for water and waste-water infrastructure. Was this business of year-to-year funding a problem that you were able to overcome?
Mr. Matheson: The monies, from year to year, available to some of the Nations is troublesome in many ways. The partnerships that we've built and the direction that we took was that any monies that the First Nation can put their hands on through grants or whatever get put into the model, and I'm talking specifically of a utility model. The rest of the funding, in many cases, either comes from a developer, if it's an area such as Sun Rivers, and a group like Corix, who is actually running and maintaining the infrastructure and the utility.
We don't want to turn that off. We want to use that funding when it's available, but we cannot count on it. We cannot believe it's going to be there year to year. So we have come up with an approach that allows it to be put in when it comes and, if it's not there, we can still move forward.
These agreements we have in place are of many, many years. The one I was speaking of is 114 years in Kamloops, at Sun Rivers, with the Tk'emlúps band, and it's a 99-year agreement with a 15 year build-out. So, there's a developer involved in this for 15 years, and then there's Corix. Corix will work with the First Nation for the rest of those 99 years, once it's built out.
So, yes, the funding is an issue, but rather than letting it be an issue that stops progress and stops these Nations from moving, we are using it where it's available and then augmenting it with our private sector dollars in the utility model, which is very transparent and which is something that we explain completely to our partner. We budget every year for the maintenance and upkeep of these facilities That we're able to run as typically any municipality would run within the First Nation.
Mr. Le Dressay: Could I just add one thing to that? Typically, long-term infrastructure off First Nations lands is financed from six sources. The one that we're focusing a lot of attention on here is other governments. For example, provincial governments will contribute to local government infrastructure quite often, but the other sources that are often used are local taxes, like property taxes, development contributions, development cost charges and things like that. There will be reserves. There will be savings that they will contribute, and there will be debentures that will be provided as well.
So, when you look at long-term infrastructure on First Nation lands, almost all of those sources of revenues are missing except for other governments. So, if you want to have a comparable model — and that's what the purpose of the Fiscal Management Act was, to give First Nations those other revenue sources — you still have a problem with infrastructure. It's called the infrastructure trap, and it's a development trap that not just every First Nation but every developing Nation faces. In order to build infrastructure, you need revenues and, in order to get revenues, you need infrastructure. So you have this trap that all developing Nations and First Nations are in.
How do you break that trap? The only way can you break that trap is with an initial infusion of money dedicated to infrastructure, but a certain type of infrastructure, the type of infrastructure that leads to economic growth, because economic growth generates revenue and revenues allow, in that cycle, the next time it goes around, for the particular community or government to pay for the infrastructure.
It's really important, and I know the question was asked earlier about Aboriginal Affairs' contribution to infrastructure planning and whether there's a role for a third party. I think that's why there may be a role for a third party, because Aboriginal Affairs' incentives are not necessarily towards economic growth. Quite often, their incentives are toward Her Majesty protecting against liability issues. So you may have a third party that may be interested in looking at infrastructure projects that actually promote economic growth, because that's how you create the prosperity cycle that allows communities to grow. I think there may be something for you to look at in that regard, as well.
Mr. Matheson: I do agree with that and I'll add one more thing to it.
Many First Nations don't pay for water or for waste-water services, if they happen to have that type of infrastructure or a suitable infrastructure in place. If we look at a regional model, First Nations bordering non- Aboriginal communities can work very well together. In this model that we're looking at that we have built, we believe that, working with the First Nation, we can create a rate base with the non-Aboriginal communities, who are already paying for water and waste-water, who don't have certified operators, who have failing infrastructure. They can be supplied and serviced from this First Nation-run business.
So, you're right that there has to be capital put in. For the capital to be put in, there has to be a mechanism for it to come back out again and that's rate base.
The other comment I'll make is this: If, on the First Nation, in the community, we create jobs, we create careers operating these plants, would the First Nation itself then be willing to pay for a water-supply service or a waste-water supply service? It doesn't have to be exactly the same as the non-Aboriginal community, but the point is that we can provide a company that's recession-proof. It's generating revenue for the First Nation to do other things with, to put towards housing and other issues.
So there is a way to do this and it just means a slightly bigger picture, looking outside of just one First Nation. Maybe put two or three Nations together and two or three non-Aboriginal communities together. This is doable, and there are many situations and circumstances throughout Canada, specifically in Northern Canada, where this can be done. We're working with some of these communities now to put it in place.
Where we stumble comes back to funding. Not all of the capital can be put in by the private sector. We want to do this in partnership.
We talked earlier about the responsibility and accountability to building this thing from an insurance side, the accountability to how you live and to make sure you have insurance or can get insurance. It works the same way with a utility. We want to create a business, a sustainable solution for these communities. We can work with the non- Aboriginal communities as neighbours in good standing and actually deliver these services.
The Chair: What about in remote communities that don't have the proximity to a municipality?
Mr. Matheson: There are two different instances. In the Northwest Territories we've just finished putting in 10 water treatment facilities, regionally located. We're talking severe temperatures, they're operated remotely, and I think it's once every six weeks somebody is on site. The water is trucked and delivered to these communities. Now they actually have clean, safe drinking water, and we're doing the training so that these communities actually are building capacity. That's an example of 10, as far away as Tuktoyaktuk. We're in the Far North.
When we look at something a little closer, maybe northern Ontario, and we have a First Nation that's looking for a water treatment facility, which I've mentioned, they happen to be located in the Ring of Fire. Those mining companies aren't utility companies. They don't want anything to do with their utilities. They just want it to run and run well.
What if we have a company that's First Nations led that can actually do that? Now you're creating opportunity in these remote locations around industry that's up there. Not every location works, but many do.
Mr. Le Dressay: If I could add one thing to Owen's comments, some of these communities are near resource development. They have made agreements with these resource companies, but there are two parts to those agreements and it's the second part that's important to what Owen said there.
The first part of those agreements is generally economic. It's about employment, it's about business opportunities, sometimes it's about equity in the particular resource, but there's another part to these agreements that should be considered and it's the part that all other Canadians enjoy. Whenever there is resource development in Canada, we get those economic benefits but we also get fiscal benefits. We also get significant tax resources that are generated from those resource developments in the form of royalties and all the other taxes, and those tax revenues are used to provide a lot of Canadian infrastructure, our social programs, et cetera. First Nations quite often forgo those fiscal benefits.
It's important to consider the opportunities. I know some people have talked about revenue sharing and other people have talked about taxation. How do First Nations better participate in resource development in their areas? Those revenues provide the mechanisms to improve things like infrastructure, local services and all of those other things we've talked about today. That's just one thing in response to the comment about the North.
The Chair: Thank you very much.
Mr. Matheson, will your company's website give us some examples of those communities that you've developed these partnerships in, or could we ask you to provide those examples to the committee?
Mr. Matheson: I would be happy to provide them, and there's also information on our website. I will provide the work we've done with numerous First Nations across the country, the type of work we've done and the locations, obviously. If there's anything else I can provide, just let me know.
The Chair: Thank you. In your opinion, should other private companies be developing First Nations-specific models in an effort, as Corix has done, to realize these unique challenges facing First Nations?
Mr. Matheson: I think as many companies as possible should do it. There is a responsibility we have. We need to be able to supply this type of infrastructure regardless of where it is. It can't always be about the bottom line. It has got to be about looking after people as well, and if we can come up with a solution that works for everyone then that's what we want to do.
The reason Corix, I believe, is able to do this is because of the vertical integration of our company. I believe we are the only utility company in Canada that offers all the pieces. I'm not suggesting that it has to be a one-stop shop. That's not my point. But because we have all the different components, from the equipment to the systems, to the products that are required, to the engineers, to the ability to operate and maintain and even inject capital, we're able to look at this in a unique way.
Now, we could, and other companies can, partner with other groups. This comes back to the time commitment. Corix has invested, like many of the different groups working with First Nations, many hours. As I said, it's not about the bottom line, it's about trying to get something done that needs to be accomplished.
The large P3s, they work; they're proven. We've got dozens and dozens of them across this country, but we're talking about a hundred million plus assignments. We're talking much smaller assignments here in remote locations.
I would hope that other companies, not just utility-wise but other companies, come together and try to find solutions. I know the model we've been working on we've been working on for years. It actually started on the back of a napkin in a conversation with chief and council and we came up with a concept. That concept has grown over the years, trying to get input from everybody we can talk to. So, yes, I hope they would.
I believe that not only should they, they had better, because there is that much work to do that one company or a group of companies can't do it all.
The Chair: Thank you very much.
Senator Dyck: Mr. Matheson, the model you describe sounds too good to be true. I don't mean that as a criticism. It sounds wonderful, but I'm always skeptical. I think some First Nations are probably skeptical because of the relationships they've had with other companies or the government. You must have developed a lot of trust.
You make it sound as though the First Nation is going to profit from this. What does Corix get out of it? You clearly must make a profit out of it. You can't just be doing it out of the goodness of your heart or the sort of moral obligation about what you feel should be done to help First Nations take over their own infrastructure and earn money from it.
Mr. Matheson: That's a question we've received from many chiefs and councils across the country.
Senator Dyck: No doubt.
Mr. Matheson: If I may, picture a rectangle with a line from the top left to the bottom right of that rectangle. The bottom axis is time. On the left-hand side you have Corix; on the right-hand side you have the First Nation. Corix supplies the resource, the capital, the know-how and the experience initially. For this example, we'll say it's 100 per cent and the First Nation is supplying 0. Over time we build capacity, we train, we educate and we transfer over the operations and ownership of that company. By the time we reach the bottom, Corix has 0 per cent involvement and the First Nations has 100 per cent. Over a period of time, that company transfers to be First Nations-owned and operated and generating revenue for that First Nation or that region, depending how that model and partnership is put together.
Initially, the money that Corix puts in at the front end has a return, and the return comes back through the rates and different mechanisms. It's very transparent and everything is explained.
You're right, we're the private sector and we need to make money at what we do, but it's not about making money forever. This is about a transition, and this is what's unique about this model. Nobody else is looking at it this way, and many other companies can't do it, because they don't know how or they're not willing.
Corix can make a little bit of money over a period of time and the First Nation can generate revenue day one, depending on how we build the partnership. As we build their capacity, their increase in revenues continues to go up and ours continues to go down until we've determined whatever that is. Depending on the capital investment, it could be 10 years, it could be 20 years, it could be 114 years. It could be whatever is deemed important by the community, the First Nation itself, and what works as far as the model and the numbers put into it. There is also the expandability of whether you're going to get into waste-water with water, and into other energy solutions for the community, as well.
I hope that answers your question.
The Chair: This was a most informative and stimulating panel. I feel confident in saying, on behalf of the committee, thank you very much to you all for assisting us in this important work we're doing.
Colleagues, this room is needed in about half an hour and it has to be set up. I'm sure you want to talk to the witnesses, but may I suggest you go into the anteroom so this room can be set up for the next venue.
Thank you.
(The committee adjourned.)