Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 10 - Evidence - December 9, 2014
OTTAWA, Tuesday, December 9, 2014
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, everyone. I would like to welcome all of you and members of the public, who are watching this meeting of the Standing Senate Committee on Aboriginal Peoples either in the room, 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're 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 and more effective collaborative strategies.
We have completed our hearings on housing and we're now focusing our study on infrastructure.
Before proceeding with this morning's testimony, I would ask the members of the committee to please introduce themselves.
Senator Moore: Wilfred Moore from Nova Scotia.
Senator Dyck: Lillian Dyck from Saskatchewan.
Senator Wallace: John Wallace from New Brunswick.
Senator Beyak: Lynn Beyak from Ontario.
Senator Enverga: Tobias Enverga from Ontario.
Senator Raine: Nancy Raine from British Columbia.
Senator Tannas: Scott Tannas from Alberta.
The Chair: Thank you. Members of the committee, please help me in welcoming our first witness. I will say it's a pleasure to see you again, Chief Commissioner Manny Jules, from the First Nations Tax Commission.
Members of the committee were pleased to meet with you informally on our fact-finding mission earlier this year in October, in Kamloops. It's great to see you again. Thank you for coming here. We will look forward to your presentation, which you can expect will be followed by questions. Please proceed.
C.T. (Manny) Jules, Chief Commissioner, First Nations Tax Commission: Thank you very much. I hope those who were in Kamloops had a good taste of our traditional dried salmon, which we call mellts'wén.
Honourable senators, good morning. I am Manny Jules and I am the Chief Commissioner of the First Nations Tax Commission. It is a pleasure to appear again before the Standing Senate Committee on Aboriginal Peoples.
I have always been impressed by the well-researched recommendations this committee has developed and presented with respect to First Nation issues.
My work today is because of my father. He was the chief before me. He had a vision for economic development, taxation, infrastructure and property rights in our community. Whenever I meet with people to discuss First Nations' economic development issues, he would always ask me one question: Do they think like us?
His question is really about strategy. Do others share our strategy that removing economic barriers is the best path towards social justice?
In 2006, this committee released a report about First Nations' economic development called Sharing Canada's Prosperity - a Hand Up, Not a Handout. This report identified a number of our economic constraints and put forward a number of proposals to reduce or remove our economic barriers. When I read that report, it was clear that this committee ''thinks like us.''
Today, I would like to address one of the principal economic barriers facing First Nations in Canada; a lack of business-grade infrastructure. The tax commission has identified three barriers to building more and better First Nation infrastructure.
First, the financing gap. First Nations do not have the same access to infrastructure financing tools as other governments. Other governments use property tax, other local taxes, fees and charges, dedicated infrastructure replacement savings, payment from developers, transfers from other governments and long-term financing. We do not have all of these revenue sources, so we are unable to contribute as much to support long-term financing. As a result, First Nations rely too heavily on transfers from governments to finance infrastructure and, as you know, these transfers are inadequate.
Second, the infrastructure financing Catch-22. Our communities are caught in an infrastructure financing Catch-22. First Nations want to invest on their lands to generate revenues, but they need infrastructure to attract investment. Current infrastructure programs are generally designed to address basic housing and physical infrastructure requirements and does not support land development. As a result, many communities are caught in an economic development trap and are unable to build commercial infrastructure.
Third, the integrated planning and capacity gap. First Nation infrastructure planning needs to reflect their economic strategies, so that this infrastructure supports land development and generated revenues. This is what First Nations want, but do not plan for. Most planning is based on the fiscal requirements to support local housing or health. The result is that our infrastructure does not support local economic and revenue growth and, as a result, our infrastructure gap widens.
However, the First Nations Fiscal Management Act represents significant progress on closing these gaps. First, the Fiscal Management Act and the First Nations Tax Commission has helped many communities implement a number of new revenue options to close the financing gap. Second, the long-term financing can help some First Nations escape the infrastructure Catch-22. Finally, our partnership with the Tulo Centre for Indigenous Economics is providing university-accredited training to start closing the planning gap.
But there is much more we can do. I would like to present four proposals for your consideration.
First, a resource development taxation. There are over $600 billion in proposed resource development projects in Canada. Almost all of these are within our territories and require consultations and, in many cases, our consent. The companies are offering economic benefits in the form of employment, business opportunities and equity. First Nations need a secure fiscal benefit through taxation to build and finance infrastructure. The FMA and FNTC provide a strong regulatory framework to support this concept.
Second, amend the FMA. A review of the FMA was completed in 2012. A number of housekeeping amendments were suggested. A number of First Nations would like to levy user-fees and charges to pay for water and sewer service and infrastructure.
There are common utility charges used by other governments in Canada. One of the proposed FMA amendments would enable user fees and charges, i.e., water charges, utilities and road tolls, to support public-private partnerships.
Third, public-private partnerships and pensions. Infrastructure in Canada is increasingly built through public- private partnerships, PPPs. One example is managed pension funds are contributing to PPP infrastructure programs and projects. First Nations do not have access to this particular source of financing. Our public pension funds do not have the regulatory framework necessary to contribute in a meaningful way to our infrastructure.
And fourth, the Tulo Centre of Indigenous Economics accredited training. The tax commission has worked with the Tulo Centre and Thompson Rivers University to develop and promote university-accredited courses and certificates to First Nations students. In the last five years, 29 courses have been delivered to over 100 students, representing 58 First Nations across the country. These students learn tax administration, integrated planning and land development.
Based on these proposals, the tax commission is seeking support of this committee for four initiatives.
First, the tax commission's work with interested First Nations to develop resource project taxation models that help finance infrastructure.
Second, the proposed housekeeping amendments to the First Nations Fiscal Management Act.
Third, the creation of the necessary framework for First Nations public service pensions and First Nations public- private infrastructure partnerships.
And fourth, providing resources to expand the number of students enrolled in the Tulo Centre of Indigenous Economics' accredited tax administration program to build First Nations' capacity in infrastructure planning and financing.
It is our hope that the Standing Senate Committee on Aboriginal Peoples will include these recommendations in its final report.
The Chair: Thank you very much. Senator Dyck?
Senator Dyck: I'll go later, please.
The Chair: Okay. Maybe I'll take my prerogative. Thank you for that presentation, first of all. I'd like to ask you a question that didn't really come up in your presentation, but I know you're very experienced in this field of infrastructure and revenues. I wonder if you could make a comment on something that has been of interest to the committee, and that is the First Nations Market Housing Fund. It has come up before our committee already, and the fund was predicated on great hopes. Some stakeholders we've encountered have expressed dismay. The fund was established in 2008, and it sought to see 25,000 units built over the course of 10 years. I believe the facts are that, six years later, they have funded 55 homes.
We did hear from the AFN, through Mr. Dinsdale, on November 18, that the First Nations Market Housing Fund is a well-intentioned effort and that its long-term potential has yet to be seen. On the other hand, we hear that the situation, as it is, cannot support a market-based approach to housing as the market simply does not exist.
Then there are the land tenure questions. I would be grateful if you could give us some comments on this fund. Not putting aside your important recommendations, but could you address that, please?
Mr. Jules: Housing is not only a very fundamental part of First Nations' well-being, but it's also an indicator of economic development and growth. You see that with housing forecasts on a national basis. Are the housing prices up? Are they down? It reflects the well-being of the country. It's the single most important investment that an individual and the family will make through their lifetime. So, in effect, their whole savings go into a home. They hope to be able to use that to educate their children, get into business, et cetera. Unfortunately, this program and many others in the past haven't reached the level where I would say that they're successful.
We were initially involved in the development of this concept, and we put forward recommendations that we felt would help to develop a true market-based housing approach on First Nations' lands right across the country. Unfortunately, when you have an approach that says one size fits all, I've got really duck feet. So I have to go to special shoes every time I want to be able to walk. That's the same with this program. When we looked at it, my community is involved in it, but, really, nobody has been able to successfully access the funds. But when you look at the CMHC component, some of you were in Kamloops, and you saw the Sun Rivers development, which developed our land from $6,000 an acre in its value to about three quarters of a million dollars. Million-dollar homes: A lot of band members wanted to be able to move to that development, and they found they couldn't because of CMHC limitations. You couldn't build on your own home because of section 89 of the Indian Act. It took us literally four years for CMHC to change their policy for band members being able to build on their own lands. That's really reflective of the problems that are inherent in this particular approach. You said it very clearly that the hope was to build 25,000 homes; 55 homes were built. The question is why. The real reasons are because of the inherent problems. Why are more homes not being built under the Indian Act? They're one and the same, as far as I'm concerned. You still require the council of the band to agree to backstop the mortgage. The Minister of Indian Affairs has to be involved. Any time you get that, you get limitations on how many homes can be built. In order to have a free-market approach to housing, which I support, you have to be able to empower the individual. That's why I promote the First Nations property ownership concept so that, when a community decides to move forward, they get the underlying title to the land, forever. Individuals would be able to have fee simple ownership over those lands. The band council and the community would continue to have jurisdiction over those lands. Therefore, you would have a true approach.
Even if you talk about matrimonial real property, you can't divide that with this type of approach. So there are many, many problems inherent in the approach that has been taken. Unfortunately, the promise is there, but the promise has yet to be fulfilled.
The Chair: I think the good news is that there is, as I understand it, $340 million in the fund. You've recommended this morning that there be expanded support for students to develop capacity. I'm just wondering if you think that perhaps that fund could be redeployed or better utilized.
Mr. Jules: Obviously, I'm promoting a concept of individual property rights and communal property rights. My first recommendation is that this committee look at that very seriously and support the notion. Second, to utilize the remainder. Not all of the funds, but empower individuals so that they can make choices on their own. Empower them to the extent that they would be able to utilize a portion of the funds as a down payment.
As you know, when you go to the bank, you need some money to put forward as a down payment. A portion of that money could be used for that purpose. You could also use some of that revenue to contemplate better economic development approaches within a housing approach.
Senator Dyck: I want to follow up on what you talked about with regard to individual ownership of land and the community having underlying title. When we were on our trip in B.C., we met with a number of different bands. Most of them seemed to have found excellent ways of getting around the lack of having fee simple. In fact, in Kamloops the problem was created by what could be called ''individual ownership,'' certificate of possession, where one or two band members had certificate of possession that gave them ownership of lands. They benefited enormously well, whereas the community didn't. Now the community benefits because the community can tax that land, although it is owned by one or two people.
You said that it took a number of years for CMHC to change its policy. Did that policy include the ability of the band to tax the land owned under certificate of possession, or was that ability already there?
Mr. Jules: The ability to tax individual band member interests is in the Indian Act under section 83. As a matter of fact, all of the communities have chosen not to implement that jurisdiction over their individual members. So you end up with a situation like Kamloops with certificate of possession holders. The interests taxed are the corporate interests that lease those lands, not the individuals who pay the tax. That levelled the playing field in a way as far as getting monies to provide the services for those developments.
The same is true for Sun Rivers. The community or the band collects lease revenues from the development as well as tax revenues. The individual members up there are exempted from real property tax at this stage. Really, for most communities, until there's explicit ownership, I don't think that will happen.
It also shows you the way forward. Because the land was designated, the individual band councils have jurisdiction over those lands, while allowing the marketplace to operate. The closest you can get to fee simple ownership is a long- term lease rental. In the case of Sun Rivers, it's 99 years with a 15-year build-out. We're pretty much at that stage now. In 50 years or so, you'll reach a tipping point when people will be a little reticent to invest because there's so much left on the lease. Ultimately, in a free-market system you want to change that either with an automatic turnover or another approach.
Again, if a community across the country chooses not to use this as an option, they don't have to use it. First Nations property ownership, as proposed, is optional; it isn't meant to be a case of having to do it. Many ways can be used to approach this issue. In my estimation, looking at the myriad issues facing First Nations, ultimately they have to look at this to empower the individual, because the single biggest contributor to the deficits that First Nations have is the lack of payments from individuals for their homes.
Senator Dyck: When we were on the trip, we also heard from Chief Clarence Louie, who said that a similar model was enacted in the U.S., which was, in his point of view, a dismal failure. He said the reserves became like checkerboards. Pockets of land were individually owned, and it was not a good thing. Therefore, many people would see that as a reason not to move forward.
Mr. Jules: Right.
Senator Dyck: What can you say to them about this model that you propose will work? Is there a model elsewhere that has worked, or has this relatively new model not been tested, so to speak?
Mr. Jules: Clarence is referring to is the Dawes Act (1887) in the United States, which was, in essence, to take away land from the tribes. People said there was too much land under tribal ownership; therefore, let's reduce it. The act reduced the reservations in the United States by thousands of acres. Some of the land was given to tribal members to own in fee simple. Those particular parcels owned by individuals are like night and day compared to tribal ownership lands. In most cases that I've seen, the lands are more productive than lands under fee simple ownership.
The difference is that what I propose is optional and that all of the underlying interests remain with the tribe or the band so it can't be alienated. You have to think about this in terms of a provincial government, so that all of the land will always be held by the band or the tribe. Individuals would be able to have a fee simple ownership over that. They could buy and sell and trade on the market. In essence, that will always be our land because the underlying title and interest will be ours. We will always have jurisdiction over those lands, because as I recommend it's critically important that you have infrastructure dollars, which can't be done by an individual. That can only be done by a community — the collective interest. The collective interest has to come to the conclusion that this is best for the community. It may not be the best for my neighbour, but it's best for us, and we want the ability to make that choice.
We had no involvement in what happened in the United States. It was forced on them. What I propose is optional, so that people make their free and open choice to do this. My belief is that once people understand, you will see a sea change, literally, in terms of how we would be able to move forward, particularly in the area of housing. As you know, if we depend on the federal government for housing, we will never catch up. If you believe the Department of Indian Affairs, it will be 200 years. If it's the AFN, it will be 800 years, meaning we will never, ever build enough homes for our people. That has to be one of our fundamental objectives, not only here but across the country.
Where has it been successful? It's been successful in Canada. The concept of individual property rights has built this country so that we can have, outside of reserve lands, the quality of life that we have. It has built cities, it has built schools, and it has built infrastructure that facilitates the dynamic economy Canada enjoys. That's the deficit we've got on our own lands — the little postage stamps of Indian reserves.
If you're looking at additions to reserve issues, the First Nations Property Ownership, FNPO, initiative would facilitate that because you wouldn't require the blessing of the department to add lands. When the federal government or the Department of Indian Affairs looks at additions to reserves in housing, it's really from the perspective of a liability.
So if you build a home on reserve, that isn't a $100,000 investment; that's a multimillion dollar investment because then you've got to put in water, a road, hydro, sewers. You have to be able to educate those people. All of those issues are inherent when you look at that issue, but from our perspective — the First Nations perspective — when I look at a home, I look at shelter. I want to be able to pass that on to my family. I want to be able to use that so that I'm less dependent on anybody else, and I shouldn't have to ask permission to do that.
The Chair: You spoke about amendments to the FMA. And we heard from Ernie Daniels just last week, who I'm sure you're familiar with, that amendments be considered that would allow for leveraging resource revenue streams, participating in large-scale resource projects, multi-year funding agreements with AANDC.
There was discussion about consensus being sought on amendments with the department within these weeks. Could you tell the committee, in order to implement your proposal for optional First Nations property ownership, what changes you would like to see the committee recommend? Is it clear how this could be put in place, other than a broad recommendation to the department? What's the vehicle for implementing this option?
Mr. Jules: What we're proposing at the tax commission is pretty straightforward. We want to be able to add the law- making powers for fees and charges, so that would be added to an ability to leverage and put in place infrastructure. We want to be able to amend the notice requirements, very simply. These are, as we say, housekeeping measures, but one of the most important is non-pooled borrowing so that individual communities would be able to borrow themselves as opposed to pooling with all the other communities. It is very straightforward.
How this links to our proposal for a tax on the resource developments is critically important. That's the most important component that we have just come forward with. As I mentioned in my brief, there are over $600 billion of developments that are waiting and in most cases, First Nations will have to be consulted. What's being offered right now is equity, consultation funds, those kinds of things. I'm proposing that the provincial governments right now give resource revenue sharing, and in my community that means — I don't know if you had a chance to look at New Gold, the partnership we have there — it's about 38 per cent. We're saying the provincial government should allow First Nations to occupy that for tax jurisdiction. If you have a resource revenue agreement, you can't lever that. You can't go to the bank.
I'm a very practical person. When I look at developing economies — and you must be able to look at all of the issues — it's a very fundamental question. Can I go to the bank with this? With a resource revenue sharing agreement, you really can't because the provincial government can change that. But if you have tax jurisdiction you can go to the bank and say this is how much money we're going to be getting over the next 10 years. First Nations look at all of the other communities along linear pipeline routes, they look at wellheads, taxes that are being collected by provincial governments, mines, and they see the net benefit going to every level of government other than ourselves. So this has to be a method that First Nations must be able to employ in this country.
It would mean some substantial changes in approach. It means that we have to be part of the economic union of this country. That's where I propose we have to head.
When you look at that in conjunction with the concept of First Nations property ownership, it fits like a glove. The more jurisdiction we've got over our lands outside of the federal government's hands, the more jurisdiction we have, the better off we are to make decisions at the local level that impact our lives. And then we can add lands, if there are willing partners, with the provincial government, our neighbours, the municipalities, the counties and regional governments as well.
The Chair: Thank you. Senator Moore, you had a supplementary question arising from this?
Senator Moore: Yes. Thank you, Mr. Jules, for being here. Good to see you again.
You said in your brief to us with regard to the First Nations Market Housing Fund that it took four years to get CMHC approval to permit a person to build on his own land. I don't know if you were part of that discussion. Why did it take four years?
Mr. Jules: I was referring to the Sun Rivers development in Kamloops and so we designated lands for residential purposes.
Senator Moore: On the reserve.
Mr. Jules: On our reserve, we have a 99-year lease with a 15-year build-out. Because the Indian Act doesn't require the jurisdiction required for that development, we included a lot of those in the head lease. Once we got into that development and the individual band members saw the quality of development that was being built, they said, ''I want to build up there. I want my homes to be the same. I want that level of service.''
They came forward to the band council. The band council said, ''Well, of course I'm going to support you.'' They went to CMHC and they said because of the Indian Act, in particular, section 89 of the Indian Act, we can't seize these lands and therefore we can't loan the money because this is an individual band member from this community who wants to build on his own lands, but having said that, we are limited because of the potential liability. So we said, look, if individuals want to be able to build on their own lands, they should be able to do that. And the journey to change that policy took us four years. Initially, CMHC didn't want to entertain it, and fortunately we had an individual that was on the board of directors who took up the cause. And even at that, it took four years to change that particular approach. As far as I'm concerned, that's reflective in the market-based housing approach because of the policies that are inherent in that development. The same as the housing problems are inherent in the Indian Act.
Senator Moore: With regard to the Indian Act, you just said that they're reluctant to do it because of potential liability. What is that?
Mr. Jules: It means that if we lend somebody $250,000 to build a home and he refuses to pay it, how am I going to get it? Section 89 could potentially preclude us from seizing that asset.
Senator Moore: In the event of a default of payment by the First Nations person who built the home on the reserve land.
Mr. Jules: That's right. Therefore, when you have that issue, you need to have somebody else backstopping that loan, whether it's the band council or the minister.
Senator Moore: Can I ask a couple of questions with regard to the Sun Rivers development?
The Chair: Go ahead, but move fast.
Senator Moore: It was a 99-year lease to a developer, right? It's that developer who pays taxes, not the homeowners?
Mr. Jules: No, the developer has a head lease and then you've got subleases, and it's the individuals with the sublease who pay the tax. If there are common areas, the developer pays that tax.
Senator Moore: What happens to the development at the end of 99 years? Who owns it?
Mr. Jules: Unless the band agrees to renew it for an additional 99 years, that lease would lapse and the land would return to the band.
Senator Moore: Including the houses on it?
Mr. Jules: That's right. I was the chief at the time the development happened, and one of the key factors was trying to develop Sun Rivers so that it would outlast 99 years, so we had to put in place proper building codes. Most communities across the country don't have building codes, so it's enforced on an ad hoc basis but you have to have the legislation to go forward. We built that in to ensure that the houses were built to a very good standard. Then, as I mentioned, there's a tipping point where money is going to be invested and if you want that to continue you have to extend the lease.
Senator Moore: Thank you.
Senator Enverga: Welcome. My question has been answered. I missed you on our last trip to B.C. but I tasted your dried salmon and it was really great. Thank you for that.
Mr. Jules: Good.
Senator Enverga: When we were in B.C. we had a few push backs on private ownership, basically. How will it affect your proposals? Would it be a hindrance or a push back for you?
Mr. Jules: The proposal, as I mentioned, is enabling. It's optional. When you say ''optional'' that means people have a choice. As all of us know, Parliament and your time is very tight and usually you have one kick at the can to get the legislation. If you move towards specific legislation, that would undermine the notion of optional.
What I'm proposing is optional so that communities can make an informed consent to move forward. If a community doesn't want to or chooses not to, that will be their prerogative. Then ultimately, just like taxation, when I first got into tax, we estimated that seven communities would come forward with taxation. There are 160 communities. That speaks for itself.
Senator Beyak: My questions were answered in your response to Senator Moore. However, you mentioned in your presentation the Fiscal Management Act had helped when it came in and the tax commission. For the benefit of the people at home, could you tell us a little bit more about the tax commission?
Mr. Jules: I always mention my dad because of the tax commission. He was chief in the 1960s and he led us down the path of doing our own developments and taxation was a fundamental part of that. He met with some of our lessees in 1965 to have snow removal, and in order to get the snow removed and water systems built we realized we needed the tax revenue to do it. That took us 25 years. We initially had to amend the Indian Act so that we could assume the tax jurisdiction to tax other interests.
In the Indian Act we can tax ourselves but we can't tax the developments on our lands, so the purpose of the Indian Taxation Advisory Board was to do that. Then we realized we needed to be able to use the tax revenues to lever it to put in infrastructure, and that's how the FMA was developed. That was passed in 2005 and implemented in 2007.
First Nations didn't want the minister to be able to do that. We wanted to set up our own national institution to help us with standards, help us resolve conflicts and that's how the tax commission was developed.
Senator Beyak: Thank you very much.
Senator Wallace: Mr. Jules, as you well know, the First Nations Fiscal Management Act states that the purpose of your commission is to promote understanding of the real property taxation systems of First Nations. I'm wondering how you would describe the general level of understanding of the real property taxation systems among First Nations communities and the opportunities that that taxation could present.
Mr. Jules: I basically personify tax. When I walk into a room, people say, ''Oh, there's the taxman.''
Senator Wallace: We picked up on that.
Mr. Jules: That's the first thing. It's true whether I walk into a room of chiefs or a room of individuals. When you start talking about tax, of course it's always about me. Well, how is this going to affect me? Then it's education. I start telling people in traditional times we shared, and not only that, it was a communal obligation to share, which is what we're talking about in this particular case. Taxation is all about sharing the revenues so that we can all have a better quality of life. Without tax jurisdiction you can't have economic development; if you can't have economic development then you're going to be dependent on somebody else. Taxation is something that I say you can't split the hair of with self-government and jurisdiction and well-being.
Senator Wallace: Is the general level of understanding among First Nations communities consistent with yours? They may not know the taxation issues in detail as you would obviously, but are you starting at ground zero here?
Mr. Jules: As I mentioned, when I first started doing this we thought a few communities in British Columbia would do this and there are over 160 communities coming forward. There are still a substantial number of communities that have to come forward to get the vast majority of First Nations communities. Those who are opposed to tax oppose it on the basis of philosophy.
When I first started as a young council member about 40 years ago I would go back and tell my dad, ''Dad, we're saying the same things. How come we can't agree?'' He said, ''Son, it's philosophy.'' And the biggest hurdle that I have to overcome is the philosophy that says we shouldn't do something that isn't what they perceive as our way. Many individuals, because they are related individually, when they think about tax they think that's going to impact them and that's a slippery slope. Even though you're talking about taxing corporate interests it will ultimately affect them.
Again, it goes to individual property rights. You can't tax somebody who doesn't own their own land; therefore, individuals in 100 per cent of the cases aren't taxed by their own community because they realize you don't have the same kind of ownership as somewhere else.
A lot of it is education. A lot of it is seeing because we come from an oral tradition. Lots of people come to Kamloops, they look around and they say, ''Well, this isn't so scary. Maybe I'll contemplate it.'' It has been word of mouth. It has been visiting communities and we go back many times. We don't just go once, we have to visit many times and it isn't just the band members, it's also the residents who are impacted and the corporate citizens that are also impacted and the local governments, and indeed the provincial government. It's education with all of the groups that we're engaged with.
Ultimately, at the end of the day, you must be transparent and accountable. That's one of the reasons I talked about the First Nations Gazette at our last get-together. It's critically important that people know what's going to happen, because if you just spring it on them of course there's going to be a reaction.
Senator Raine: It's always an education to listen to you, Chief Commissioner Jules. I think most Canadians haven't really thought about the impact of not owning your land and not being able to set up things like tax regimes so that you can fund the services you want for a common community.
You mentioned in your opening remarks that there is a planning and capacity gap. When I look at many First Nations, it's fairly easy to say there isn't really a plan for the use of the land in the best way that everybody has come together and agreed on. It just sort of grew.
I'm not sure about the rest of the country, but I know in British Columbia First Nations have Certificates of Possession that somehow they have, and I've never been able to understand how that started, how that works. Could you give us a short history of the Certificates of Possession and the impact of those certificates on moving forward with property ownership? Would somebody automatically get ownership of their CP? Is that fair for those who don't have CPs?
Mr. Jules: The short history is really a little bit longer than just the short period in time. The Indian Act, of course, had its roots in Upper and Lower Canada. Around 1836 there was a decision made that Indians would never be able to have title to their lands, that the title to the lands would always be vested ultimately in Her Majesty.
By the time the Indian Act was developed in 1876 that was an integral part of the Indian Act, so you get the words ''Indian reserve means a tract of land set aside for the use and benefit of a band of Indians.'' It's clear that in this case the federal government owns the land, but it's set aside for Indians' use and benefit, meaning that we can use it as long as it's to our benefit.
Then you've got the development of individual ownership, and in my view, in traditional times we always had individual private property rights. If you tried to go into my home in traditional times, you would find out immediately who owned that, and it wouldn't be you.
When you move forward, that went through a number of changes, Red Ticket holders, et cetera, and then location tickets, I should say, and then in the 1950s there was a program to have community development plans. In my community, that took from 1956, and that's when the Certificates of Possession were — the Indian Act was amended. You could get a Certificate of Possession provided you had a comprehensive community development plan, and individuals were allowed to have ownership.
Our community took from 1956 to 1958. After 1958, we agreed with the community plan and Certificates of Possession were allocated. That still gives you the ability to use and benefit from the lands, but you don't own it, meaning as a practical person, you can't go to the bank with that.
With private property rights, again to reinforce it, the underlying title would always be vested. In my case, the Kamloops Indian Band would be able to recognize those who already have Certificates of Possession as a fee simple holder.
We have already been discussing how those who don't have CP lands would be able to benefit from private property rights, and that means opening up more lands. It means getting more access to revenues, that we can put infrastructure into those lands, expanding our water system, expanding the road network, expanding sewer systems, hydro, those kinds of things, so that individuals would be able to plan for a better future for themselves.
When you look at the amount of Certificates of Possession nationally, with Indian reserves right across the country, that number is 55,000 people. So immediately you would be able to enhance the individual's access to the capital market by 55,000 individuals. That's 55,000 families. I don't know how many individuals a nuclear family average would be, but it's substantial.
When we talk about planning, that means that communities have to be able to plan for the future. Right now, a lot of times it happens, as you say, on an organic approach. This happens because, well, I started doing this. A lot of times that isn't to the highest and best use.
What I propose is trying to utilize the lands that we've got to their highest and best use. That means getting the best use for that land with the highest return.
Senator Raine: Zoning.
Mr. Jules: All of those are requirements of a government. You have to balance the responsibilities of the government with the responsibilities of the individual, and when you meld the two, that's when you get economic clout.
The Chair: You started off describing the Indian Act concept of land at the beginning as the Crown always retained the title. You're taking us up to today, to your proposals that First Nation people had the concept of private ownership and it should continue, but ultimately the title will vest not in the Crown but in the band.
Mr. Jules: Yes.
The Chair: Not to be simplistic, but does the band replace the Crown in the ultimate title, and is that the security that those who criticize this approach would have, that just like the Crown ultimately vests title even as land changes ownership off reserves, that the band ultimately retains that title regardless of how ownership changes?
Mr. Jules: Putting aside the constitutionality of how the lands would be vested, that is the concept. It would be akin to the Crown in right of the First Nations, just like you have the Crown in right of the provincial governments, the Crown in right of the federal government. Until there's a constitutional change, we're going to be stuck with 91 and 92. Under that, though, you've also got section 35, which now has got Tsilhqot'in. There are two questions that I had as a result of the Tsilhqot'in court decision.
Just so you all know, the Tsilhqot'in were awarded Aboriginal title to the lands, and when you look at the amount of land that they've got under Aboriginal title, it's still smaller than the Yakama reserve, still smaller than the Colville reserve, still smaller than a lot of the reservations in the United States, and it's subject to laws of general application, meaning provincial laws still apply. But there were two questions I had immediately. First, did they claim any Shuswap land? Fortunately, they didn't.
Second, can they take that Aboriginal title to the bank? Again, I come back to that question. In my analysis, they can't, because even though they have title, it's subject to laws of general application. They have to go to a place that will recognize just their title. The title that they have overlaps provincial laws, provincial lands, and you have to bring certainty to that.
I believe that the concept that I've brought forward in First Nation property ownership would fit in that particular situation as well. You could have the Crown in right of Aboriginal title under section 35 apply, if you wanted to do that, but I believe that in order for certainty, we have to have the federal government involved because of 91(2), (4), the powers that are invested under the Canadian Constitution, and in a lot of cases we're going to have to deal with the provincial governments, because you're going to want to add lands to your land base, and you have to have an orderly assumption of those land rights.
Senator Raine: It's very interesting hearing you refer to the recent Tsilhqot'in decision. In your analysis of that, though, would the ability for them to do resource development taxation on their traditional lands apply?
Mr. Jules: In my discussions with the provincial government, the provincial ministers, one of the first legislative amendments that the B.C. provincial government was going to pursue was an amendment to the Forest Act to allow for concurrent jurisdiction over those lands.
In order for the Tsilhqot'in to occupy the lands absolutely, there has to be an orderly vacating of the provincial jurisdictions. That would have to be replaced by their inherent laws, but you have to codify that as far as I'm concerned. When people come in they have to be able to see it, read it and it has to be promulgated much the same way as other laws are across the country.
The Chair: Chief Commissioner Jules, thank you very much for a stimulating and thought-provoking presentation and discussion.
Mr. Jules: I just want to say one thing: All the best for the New Year.
The Chair: Our next witness is joining us via video conference from the Federation of Saskatchewan Indian Nations, Kevin McLeod, Director of Housing, Economic and Community Development Secretariat.
Thank you very much for joining us this morning, Mr. McLeod. We hope this will make up for us running out of time the last time, when you journeyed here to be with us. It's sometimes difficult to manage the work we have to do with the time allotted.
I'm very pleased that you were able to join us again this morning. We look forward to your presentation, which you can expect will be followed by questions from the senators. Please proceed.
Kevin McLeod, Director of Housing, Economic and Community Development Secretariat, Federation of Saskatchewan Indian Nations: Thank you, Mr. Chair. Thank you for the opportunity to present again. I know you'd mentioned something after I was there a couple of weeks ago, but I wasn't expecting something so quickly, to be honest, but I know how it works. I appreciate the opportunity to be able to participate via teleconference as well. It makes things a little easier.
When I was last in Ottawa, my goals stand. The idea was to bring forward the easiest thing, in my opinion and experience, that would create the biggest impact in housing for First Nations people, both in communities and individuals. In my presentation today, I'd like to reiterate some of those points and maybe get into more detail on some of them, if that's okay.
In general, because I'm kind of a one-man show here at the FSIN as far as housing goes, I am kind of limited in the kinds of projects that I can pursue. Generally speaking, what I do is geared toward self-determination and eventual First Nations control of delivery and administration of funding and programs.
To that end, the three major things I'm working on now are developing a provincial technical service provider, similar to Ontario First Nations Technical Services Cooperation and TSAG in Alberta. Another thing I'm working on with one of the tribal councils is a housing authority to cover nine First Nations.
Again, as mentioned in my last presentation, this housing is a business initiative which was started by Ken Jacobs in Ontario, specifically as it relates to governance and administration of housing programs.
I believe that people rise to the occasion: not necessarily rise to the situation but to the occasion. Right now, there's not much occasion in the First Nations country and Saskatchewan and the Prairies for housing. There's just no money. We have a lot of young people. A lot of people are interested in building trades, but there's no money. It's very difficult to make a living in housing. Most bands have between 800 and 1,500 members on reserve, and it's difficult to even hire someone full time to do housing administration. Generally it falls to the portfolio councillor. Therefore, it's difficult to get people very excited.
CMHC is gearing toward compliance. Again, it's hard to get someone excited about basically being a delivery agent for someone else's program. There's not a whole lot of ownership of that program or a lot of recognition of the community's values within the regulations of the program. It's difficult to get people interested in taking things over and wanting to do the best thing for the community if it's perceived as being not of the community or for the community.
Then we get to the other side of existing housing programs, and that's the amount of capital contributions made by Aboriginal Affairs. There's really not a whole lot there for communities either.
The formula generally is about $400,000 for every thousand band members on reserve, once you're paying insurance, and there's some fire protection fees. Once you pay for an administrator, if the community feels it can afford one, generally there's probably two or three renovations that you can plan for. Other than that, the rest of the money is generally spent on emergency repairs due to the age of some of the homes.
In Saskatchewan, what we call INAC or band homes, generally the oldest ones were built in about 1986. Right now, there's basically no income coming in to repair these homes. This creates inequality among tenants on reserve. If you're in a band home, generally you're employed, but you have no way to own the home. If you put in a renovation request, you're generally at the bottom of the list. Generally you've got elders or older people on social assistance who are in INAC homes. Most bands eligible for section 95 will put their SA clients in section 95 homes. The working people in section 95 homes will not pay rent generally because working people, co-workers in band homes are not required to pay rent.
This goes back to the 1996 housing policy. When it was enacted, there was a provision for shelter allowance. If a First Nation would enact a rent regime, again it goes to a he-said-she-said kind of thing or he-said-he-said, depending on who you talk to. When the policy was enacted, there were First Nations in Saskatchewan who were interested. Some were not. But when it came time to actually enacting the policy, apparently First Nations were told there was no funding available to cover the rent portion of shelter allowance for SA clients in band homes. Since then, it's kind of just year over year. Things have piled on. Now we're in our current situation.
This will be exacerbated over time, too, because we've got section 95 units. The first phases that were committed back in the early 1980s are starting to come off their subsidy. They're starting to mature. From national numbers, we're looking at about a 4:1 ratio, so about four units coming off of subsidy for every new unit being committed. Right now those units that are receiving shelter allowance, it's not really going to increase the amount of SA paid out if that remains. Generally the subsidy portion of section 95 is responsible for the loans, so that kind of cancels each other out. It does put First Nations on the hook for all of these homes that are coming off a subsidy with no means to collect rent on them.
As mentioned in my background information, I got into housing through developing a homeownership program for my community. I've seen the benefits of it, and I'm a believer that private homeownership is a positive thing for communities, where people have the ability to do so. It's not for everyone. It's not going to solve every problem. In some communities, full take-up might only be 30, 25 per cent, something like that, as opposed to some of the Mohawk communities, where it's pushing 85 per cent, or B.C. communities, where numbers may be similar. The fact is that it gives people something to work towards. Again, this is people rising to the occasion.
One thing I found in La Ronge, my community, was that once people understood that they had the option to own a home, they changed their mindset. A story I like to tell: The first privately owned home built on La Ronge, the workers showed up the next morning, and it smelled like gasoline inside the home. The neighbours came out and said, ''Yeah, kids were messing around.'' They couldn't find a match to light it. Another person came out and started berating the workers for thinking they were special or better for building a ''mansion'' on the reserve. Then the first person who came out basically shut the other one up, said, ''Hey, you could do it too if you wanted.'' That worked, just that light bulb going off that now there's opportunity. Living on the reserve doesn't mean you have to live a certain way. That's kind of the impression that's given with the way things are right now. I see the options for shelter allowance as a way for people, communities to take ownership of their housing programs and begin to develop homeownership options so that people have the ability, if they don't want to pay rent, to own a home.
The numbers I've done, you're looking at probably $350 a month. That's the minimum revenue contribution for section 95, and that's what Indian Affairs pays right now for shelter allowance on section 95 homes. That's versus $50 for a lease fee per month, give or take, and $100 a month for insurance. It's very easy to see that it's cheaper to own a home, a band home, than to rent one. In La Ronge, probably 70 per cent of the activity in homeownership has been on the transfer of band homes into private ownership, which is taking what is a band liability — something that's not funded, there's no income to keep up those homes — and turning them into a private asset with the stroke of a pen, just with setting up a land lease and providing proof of insurance. That's what it is. People can go to the bank with a band guarantee and renovate the home as they wish, not just related to health and safety, as with the CMHC's RRAP program.
The thing about shelter allowance is there is some resistance to the idea of universal rent. There are several reasons for that, but I honestly think it's because people haven't really looked at who would really be affected. We've got two kinds of homes on reserve. You have the band homes and the section 95. People in section 95, people on social assistance, they wouldn't be affected at all by universal rent. Their shelter allowance is already covered. Working people, they already know that living in a section 95 home has a rent requirement. If working people in band homes are required to pay rent, this removes this excuse that there will always be a minority of people who will refuse to pay rent in section 95. It's difficult for a First Nation to enforce it in a lot of cases because it is just an unequal situation if the people in band homes aren't required.
The band home side, working people, I think if there's universal rent, because it's cheaper to own a home, you would see the majority of them become homeowners. This would be a huge boost to developing homeownership. The people on social assistance, they wouldn't be affected at all by universal rent except that the band would now have resources to be able to repair their homes.
It was mentioned the last time, the people who would be most affected by universal rent would be a minority of people in band homes who are working but are the working poor. I'm not trying to minimize this, but if it's cheaper to own a home than to rent one, I see this as still a good option for the vast majority of people.
What does this leave us with? It's not money to build homes. We've seen this in the evaluation of shelter allowance as it relates to on-reserve housing. This is an INAC report from August 2011. It's not money to build homes but is money to repair and maintain the existing stock. Like I said, we say we're about 11,000 units short in Saskatchewan. Certainly we're sitting at minimum double occupancy compared to the provincial average in Saskatchewan, which is about 2.5. There's a huge need for new units. Section 95 is not meeting that need, not by a long shot. Only about 25 per cent, if that, 20 per cent of bands are eligible for new units and receive commitments. We're looking at an average of about 100 units per year in Saskatchewan. This has been going on for about seven years, so a lot of bands are just falling further and further behind when it comes to housing.
But the thing is, we need to start looking at quality of life here, I think. The demographic realities in Saskatchewan, on the Prairies in general, are going to be very difficult to ignore. We have to look at what the endgame is. What are we trying to create by chronically underfunding core programs, key programs like housing? It's very difficult for anyone to improve their lives if they're just trying to survive. If you have ten people in a home designed for four people, there is a lack of privacy and increased wear and tear on the home. It's not that homes aren't built properly; it's just that they're built properly for three or four people, not ten to twelve, eight to twelve people, which is not uncommon. A home will simply not last as long under those circumstances, whether or not it's built to code.
The thing is that we need to look at this from an overall standpoint. Yes, it's an additional cost shelter allowance to actually fund the rent portion of shelter allowance. The power bill, the utility bills, that portion is already covered in Saskatchewan, but the rent portion isn't, just to be clear. It is an additional cost but again we need to look at this in the context of what other programs are spending to cover problems that are caused by poor and overcrowded housing in the first place. To me, this is a very simple and good question to ask, considering that all these departments are coming from the same place. It's one government. We have Health Canada, CMHC and Aboriginal Affairs all playing a role in housing on reserve, but the programs don't really talk to each other and they're very much operated in silos.
Even though we have liaison committees and that sort of thing at the AFN, it doesn't change the fact that there's really not a whole lot of real cooperation or I would say transparency with regard to providing input in actual program design. I don't know; it's like that elephant thing. You have five blind guys each touching part of the elephant and none of them can figure out the big picture. That's kind of the way I view housing on reserve right now.
We provide input in forums like this, which is very welcome, but at a certain level, the input stops and then we receive the next iteration of the experiment on policy or programs, whatever seems to suit the day.
This may sound a little negative, but what we see is that there appear to be changes for the sake of convenience of government instead of actual concern for the results of the end user, for the person on the ground. I would suggest that because of these demographic pressures, we already see the rate of incarceration of First Nations youth, missing and murdered Aboriginal women, the rate of drug use and suicide, all of these things.
If we continue on the present course with an average age of 20 years old, we're looking at probably over 30 per cent of the population in this province will be First Nations in another decade or 15 years. What will we end up with? These are key questions. That's a very key question. I realize I'm biased, working in the field of housing, but to me this seems to be borne out by initiatives off reserve, such as this Housing First initiative to do with homelessness and the fact that it's been recognized that unless you deal with someone's housing situation first, they will have a difficult time making improvements in any area in their lives.
To go back to the beginning, to me, the rent portion of shelter allowance would have a lot of effects far beyond just band homes, to the housing programs on First Nations. It would have a marked effect and improvement in people's lives in that they would live in better homes. This is all in policy. It exists in policy right now; it's just that it's not funded. This portion of the policy is not funded in the Prairie provinces.
The last part is that there is money available, in my opinion, to facilitate this, and that's through the First Nations Market Housing Fund. Personally, I feel there is a role for government to play in promoting home ownership on reserve. We're not as far along as some of the B.C. bands, as Mr. Jules alluded to. We're not there yet. There's one First Nation in Saskatchewan that does have a sales tax implemented on reserve, but that's a non-treaty band, close to an urban area. For most First Nations, they have a lot bigger fish to fry before that will even become a concern.
The First Nations Market Housing Fund is just not doing the job. For the sake of disclosure, I did work at the Market Housing Fund from 2008 to 2010 when it first started. Very quickly, it was clear that the benefits from the credit enhancement that were supposed to happen were kind of articles of faith in that the lenders would either share lower interest rates or take on a greater portion of risk sharing. We didn't see that happen. Maybe it has happened for some communities, but by and large, the communities on the Prairies haven't seen that happen.
Where is the greater need? At this point, I would argue that to really support home ownership, it may seem counterintuitive, but let's look at beefing up the social assistance budget. It would have an immediate effect on home ownership.
I said, too, that we're looking at $17 million as the estimate I've heard on what it would cost to fund the rent portion of social assistance in Saskatchewan. That's not going to happen overnight. There will be some people who jump on it, and there will be a few who will lag behind. I would say that $300 million would be plenty to do a pilot project on this for the Prairie provinces and maybe other regions who haven't fully implemented as well.
We'll see where it ends up. What's the alternative? We see where things are going. It's just going to be more of the same.
The Chair: Could I ask you to wrap up, please, Mr. McLeod, so we have an opportunity for some questions?
Mr. McLeod: Yes, for sure. I'll just bring up one more thing, and that is that housing is a business initiative.
One of the things identified in the shelter evaluation report was that the money used for shelter allowance goes into renovations, into materials and labour costs. This is an economic development opportunity for young members and for bands who want to move to a fee-for-service type arrangement. Housing is a business initiative right now. There was a push to take it nationally. I believe it's only being acted on in Ontario, maybe Alberta. As I mentioned, I had 14 bands interested a couple of years ago to move forward with this. The strict model of housing as a business has to do with revolving loan funds. These are good things, but where it starts with housing as a business is the administration and the governance aspects, enacting policies and coming up with things like rent regimes, so there is this income that bands can plan on for the future.
These things are working in concert together. Yes, I'm advocating now for this housing as a business to be looked at nationally, as a way to increase First Nations self-determination in housing programs, definitely so.
In short, self-determination is the goal. We would like to have some real discussions on the future, where we see things going as far as outcomes with programs. We know that social development funding, including shelter allowance, is being looked at nationally, and we also know through AFN that Aboriginal Affairs has not been completely clear where they're going with this. Rather than bringing up the low points — the Prairies are definitely low points, as far as being underfunded for the rent portion — my concern is there be an attempt to maybe knock down the high points, bring everyone down a little through tightening up of policies and programs.
To me it would be a shame if First Nations on the Prairies, in Saskatchewan, were denied that opportunity to benefit from this program in the way that other provinces have, since 1996 and the new policy.
The Chair: Mr. McLeod, thank you. You've given us a new angle on this problem, and I thank you for that. The deputy chair, Senator Dyck, has the first question.
Senator Dyck: Thank you, Mr. Chair. Thank you for your presentation this morning, Mr. McLeod. You covered a lot of territory in a short amount of time.
You said there's a move afoot to consider housing as a business, and there are some advantages to that. You mentioned that your home community is La Ronge, which I believe is probably one of the communities that could be perhaps cited as a model of best practices in Saskatchewan in terms of their moves afoot to increase private ownership to 70 per cent, as I think you said.
Has the model in La Ronge allowed the La Ronge band to access any additional capital in order to increase the money that they have available to build infrastructure? Has that allowed them to move forward in other ways, other than just building the homes?
Mr. McLeod: Not in infrastructure. That's still considered a responsibility of Indian Affairs through their capital budget. Actually, La Ronge is running out of lots now. It's funny you mention that, senator. There are survey plans for new subdivisions, but due to the strains on the capital budget, those new subdivisions have been shelved for the time being.
There has been access to new sources of funding as far as our partnerships with lenders go. The members have opportunities to access private capital to build homes in the form of loans, and that has certainly helped. At the end of two building seasons, there was an additional million dollars put into the community through loans. Indian Affairs did provide us with seed money to start a revolving loan fund. That still works very well, to be honest. But for infrastructure, unfortunately, no, it hasn't led to anything new.
Senator Tannas: Welcome, Mr. McLeod. It's me, your inept chairman from when you were here last time that sent you away with only five minutes. We're glad to have you back today. Thank you for your presentation.
I get a sense, just looking at you on the video, that we're getting a report from a very weary soldier who has worked hard on this issue, so thank you for giving us the benefit of your experience and your wisdom.
What percentage of homes would you estimate in Saskatchewan today would be like that home that you described on La Ronge, where the person built it, paid for it and is living in it independently? What percentage of the homes on reserve would fit in that category?
Mr. McLeod: I would say less than 1 per cent, to be honest. In La Ronge right now, I don't know the latest. I would have to guess — it's probably 100 or 120 homeowners in total. It's not quite 70 per cent; it's more like 70 per cent welfare in La Ronge. You're looking at maybe five, six or seven communities who are in various stages of implementing private home ownership programs on reserve, and there's probably another equal amount, five, six or seven communities, who are moving towards developing home ownership programs. La Ronge would lead the way as far as numbers, due to the fact we rolled the program out officially in 2005-06. I would say it's less than 1 per cent at this point. That is changing, but for now it's very small.
Senator Tannas: Regarding one of the ways in which you see us being able to unlock potential, you mentioned the need for subdivisions and more lots in communities and there's no infrastructure there. Is that because there's demand for private ownership or because we need more lots because there are more people, there is overcrowding and that sort of thing? Do you have any sense that in the private ownership initiatives or momentum there are obstacles that we need to knock out of the way, other than creating more lots?
Mr. McLeod: Certainly, the capital budget is a big thing. Our capital budget for Saskatchewan is something like $22 million, and there is over $200 million in projects that have been approved but are shelved. There's a huge need for infrastructure on reserve.
As far as barriers, shelter allowance would allow existing homes to become privately owned, so in that sense you could increase the numbers of privately owned homes exponentially without any increased demand on the capital budgets as far as new lots go.
An advantage to private ownership for new homes is that you can finance the infrastructure as well. In La Ronge, where I'm from, for every lot you build, you have to hack out trees, haul out rocks, bring in fill and build roads because it's bush and forest, different from the South, certainly. Even meeting in the middle for areas where, if you designated certain areas for private homeownership, just allowing people to put in their own water, sewer, power and that kind of thing would be a huge help.
For capital budgets, yes, there is a huge need.
Regulatory, in Saskatchewan, we don't have the number of certificates of possession as in B.C. and Ontario. There are a couple of bands with CPs. Give it to veterans returning from World War II, but very much in the minority. It's common band land for the most part, and land leases work just fine. The banks have accepted them. We've got a template here we first developed in La Ronge, and I make that available to all the bands in Saskatchewan. It's something that's easily adaptable; it's nominal cost, and it seems to work. It does the job very well.
Regulatory, going forward, in the short term, honestly we have most of the tools we need.
The Chair: Mr. McLeod, you described how in La Ronge you took what I think you described as a band liability and turned it into an asset, setting up a lease with band members who could afford to pay rent, and you also mentioned a band guarantee. You just talked about a template.
For my benefit and maybe the committee, could you tell us what the steps would be to make this happen? I'd also be interested to know the nature of the ownership that you described. Is that something that can be inherited or passed on by the person who paid the rent and acquired that form of ownership?
Mr. McLeod: I'll answer your second question first. Generally lenders would like to see a term of a lease five years longer than the term of the loan; so generally 29-year leases, some are looking at 49-year leases. Once those loans expire, the owner of the home has the first right of renewal. They can will them to family members, sell it to another member; but, in general, ownership is determined by the community, and generally that's members only, and 18 years or older, transferable as the owner sees fit.
Steps of ownership: Ownership is really not that different on reserve and off. You need your land tenure. If you need financing, you need that security on the loan and that regulatory environment to spell out what goes on in the case of default or what the bundle of rates with ownership entails.
As Mr. Jules was talking about, section 89, certainly that's an issue. The fact that a First Nation has to use their own credit to back a member can be prohibitive. I'm working with a band right now. There are members who want to own their own homes, but the band isn't in a position to be able to back loans for more than one or two members, which really limits the potential.
I don't know what the option is. Obviously, it would be better if members had an ability to go to a lender and be able to back loans using their own credit and not rely on the band. The fact is designating land, which is popular in B.C. for resort communities, may be an option.
Right now, the way things are, it's the difference between a personal unsecured loan with an unaffordable interest rate or requiring that a band has sufficient financial capacity to back loans for a number of members to make the program viable for all.
The Chair: I'm glad you were able to hear Mr. Jules' presentation. He mentioned the possibility of having the First Nations Market Housing Fund available for down payments. Do you have any comments on that?
I'm pleased you've had some experience working with that organization through the years.
Mr. McLeod: Thank you. I came up with an idea for Saskatchewan of an equity fund, just to make loans more affordable, and certainly that would cover the down payment portion as well. My understanding of the $300 million from the Treasury Board is there are some strings attached to it. One of them is the money cannot be loaned out and that it had to be invested in public instruments.
It's not a bad idea to make loans directly affordable. I think an equity fund is something that would go a long way towards increasing numbers. Whether it would make it more affordable in terms of bands, I'm not sure. Like I said, it might make it more affordable for individuals, but for bands we're still required to guarantee the loans. I'm not sure how much that would expand things necessarily.
The fact remains, the best way I see to increase the numbers of private homeowners on reserve right now is to enact universal rent and that's that shelter allowance portion. You'll see a lot of those band homes currently being lived in by working people. A lot of them would become privately owned very quickly.
Obviously, it's something Mr. Jules and I agree on. Something needs to happen with the fund. It's not doing the job as it is.
Senator Enverga: Thank you for that presentation. It looks like there's huge interest in private home ownership. How much of the population is receptive to this? Do you have a lot of requests?
Mr. McLeod: I do, yes. As far as percentage, I think the 2006 census gave a potential homeowner pool of about 30 per cent of on-reserve population. That's low in some communities, high in others; it's not a bad number at this point.
Yes, people are receptive. We have a lot of inertia in communities right now as far as the way things have been. The fact is the more communities that start homeownership programs, the more communities become interested and we have to be willing to let this grow organically. Quite often we see two-year programs from government, maybe thee- year programs, but what we really need to gauge the success of anything are five-year programs and initiatives. In Indian country, two years is far too short to gauge anything properly.
Senator Enverga: On another note, you mentioned there's a lot of building trade workers that are willing to work and do their job so it will help the economic development of the community. Did I hear that right?
Mr. McLeod: Yes.
Senator Enverga: I was just thinking, because Saskatchewan has been hiring a lot of temporary foreign workers, have they showed willingness to work in another part of Saskatchewan so they can contribute back to their band? Is there such a possibility for this community?
Mr. McLeod: I'm sorry, senator, are you referring to the temporary foreign workers who are working on reserve?
Senator Enverga: It's more like there are a lot of temporary foreign workers in the province itself from what I hear, especially in agriculture, which we've been dealing with before. Have they thought about working there and bringing the economic benefits back to the band? Have you seen something like this in the First Nations?
Mr. McLeod: I personally haven't seen temporary foreign workers on reserve at this point.
Senator Enverga: No, I mean there's a lot of job opportunities in some other parts of Saskatchewan. Have the members been interested in those, so they can bring back the economic benefits?
Mr. McLeod: That's an interesting point. Most people with good jobs off-reserve end up supporting their families on reserve. That's very common, to the point where people with good credit and good jobs — and this is true — end up being lifelong renters. It's difficult to save money for a down-payment because they're sending money back for their parents, siblings, cousins, and so forth. That's a good point. It's very common.
The Chair: Mr. McLeod, I think this would probably be the last question. I was intrigued by your description of various government departments involved in infrastructure and housing. You talked about what I think that we've heard described as the silo approach and the need for transparency and cooperation. I wonder, with your experience, if you've had any thoughts about how that should change, whether there should be more of a one-window approach, whether you'd recommend the committee make recommendations in this connection?
Mr. McLeod: Thank you for that. There are very good people working at CMHC, Aboriginal Affairs and Health Canada, but it seems their marching orders are very specific and relate to within their own departments or agencies. When you start looking at what's best for people on the ground, instead of what's best for administration and what's expedient and works for their departments — this is public service. That's what these people are doing. I don't mean to preach or sound preachy, but let's serve the public. We shouldn't necessarily just be beholden to the conveniences of the administration, especially when, in my opinion, the stakes are incredibly high for the future of Saskatchewan and the Prairies in general and just with our demographics of First Nations. It's a critical time. The decisions that we make or don't make now will have key impacts ranging for at least a couple of generations. We have to be willing to face that honestly because it's not going away.
Yes, recommendations: programs need to work together. If there's going to continue to be an approach where various departments are responsible for one area on reserve, then departments and programs need to talk to one another. They need to fit the outcome for people on the ground and for those responsible for administering these programs in the communities. They need to be coherent, cohesive and something that they can put into a community- based policy and delivered effectively.
Senator Raine: It's really great that you were able to come back again. You paint a picture that is very challenging and there are some institutional blocks that need to be changed. I'm wondering if pulling together the good people, as you say, at Aboriginal Affairs, Health Canada and CMHC, to sit and investigate ways to have the outcomes that are required, if you can see that as step one in streamlining the process. But the other question I wanted to ask is that you said that in no uncertain terms home ownership is the way to go for the future. Right now, with the lack of a rental regime, obviously some reserves have rental regimes and some don't. You said we should think about enacting universal rent to fund the shelter allowance part of social assistance. I didn't quite understand how you would envision that.
Mr. McLeod: Right now, the way it is stated in policy, Aboriginal Affairs will pay the rent portion of shelter cost, if there's a proof of shelter expenses, so like a rent receipt, a lease agreement or something like this, and if there's a policy that has steps that the band can take for nonpayment of rent. The shelter costs that are paid for by Aboriginal Affairs deal with utility costs for people on social assistance. Basically, to enact universal rent in your housing policy manual instead of having two policies to do a CMHC and band homes you could just have one as far as rent collection goes. So it is that rent is this much and it's due here. There are certain rights and responsibilities of the tenant and likewise for the First Nations. It's like standard rental agreements, which exist everywhere.
There would likely be an increased need for administration for the band. Increased revenue would certainly go to offset that. Even in my band, there's not universal rent, but section 95 rent collection is quite high. It fluctuates every month. The only reason it's high is not because there's a rent collection policy in place but because there are people there whose job it is to go and collect rent. Because we're a large band, we have the ability to hire someone to do that, without this income from shelter allowance. It's kind of like a Catch-22. Without the increased revenue from shelter allowance there may not be the administrative capacity to actually collect rent. At La Ronge, it's a monthly thing. The amount of rent collected fluctuates, but there is that understanding. It does not happen overnight. This is why I go back to the thing; people rise to the occasion and right now there's not much occasion. There are very few resources in the system when off-reserve housing is an economic driver, it's a multiplier. On reserve we have a massive need and opportunity but there's just no money there. We need a kick-start to get things going.
As far as bringing together people from the various departments, as a step one, I agree that it's certainly necessary. We need people who have some authority to make decisions. That's one thing that First Nations get frustrated about, sometimes, is that we meet from representatives from the departments, who don't have the authority to actually make decisions.
I agree that that would be a good first step, with the caveat that there are actually some decision-makers at the table. Thank you, senator.
The Chair: Maybe this committee can bring them to one table in a panel. I'm just thinking out loud here. Mr. McLeod, thank you very much and I'm really glad we were able to bring you back through video conference. It has been very helpful and stimulating to us and, as I said, at the conclusion of your presentation, I think you've given us some new approaches that we've heard for the first time here: creative use of the shelter allowance and liberating a number of homes, residences towards home ownership creatively. This has been very useful.
Thank you again. Thank you, colleagues.
(The committee adjourned.)