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Study on Challenges and Potential Solutions Relating to First Nations Infrastructure on Reserves

Study on Challenges and Potential Solutions Relating to First Nations Infrastructure on Reserves

Study on Challenges and Potential Solutions Relating to First Nations Infrastructure on Reserves


Published on 11 March 2015
Hansard and Statements by Senator Lillian Eva Dyck

Hon. Lillian Eva Dyck:

Honourable senators, I rise today to continue the debate on the eighth report of the Standing Senate Committee on Aboriginal Peoples, entitled Housing on First Nation Reserves: Challenges and Successes, tabled in the Senate on February 17, 2015. This report is comprehensive and provides a lot of information about the complexity of issues related to safe and adequate housing on reserves. The report encases what the committee heard and saw, as straight and forthright as we could make it.

During the first phase of the study that focuses on housing, the committee held 21 meetings in Ottawa and one day of public hearings in Thunder Bay. We travelled to 16 First Nation communities in Nova Scotia, Quebec, Ontario and British Columbia and heard from over 40 individuals and organizations. The report is divided into three parts. The first part outlines the current state of housing on reserves, offering a statistical, jurisdictional and legal framework for housing on reserves. The second part outlines what the committee heard, and the third section outlines what the committee found.

In my speech, I will highlight three areas of the report that I think are particularly important. They are funding for First Nations, Indian Act barriers, and fire safety and services.

First of all, with respect to funding levels, virtually every witness told us that the funding levels that bands receive as contribution agreements from Aboriginal Affairs are inadequate.

As Harold Calla from the First Nations Financial Management Board told the committee:

The problem or overarching issue in addressing the on-reserve housing and infrastructure gaps is the fact that there is just not enough money. You can slice it and dice it however many times you want, but when you throw two dollars up and it lands on the table, unless there is divine intervention, it’s still two dollars. Money is going to be needed to address this issue.

In our report, we note:

Witnesses have pointed to a number of financial pressures which have contributed to this situation, including the 2% departmental escalator cap, inflation, the remoteness of many communities, and the population growth on reserve.

For example, Sandy Lake First Nation, located in northern Ontario, said there has been no change in their funding over 30 to 40 years, despite a three-times bigger population.

Honourable senators, the funding formula used by Aboriginal Affairs is inadequate and outdated. In their written brief, the KI First Nation stated:

The funding source expects us to build seven to eight buildings on $383,388. That was the price 40 years ago. They maintain that we can do it for that price [now].

Honourable senators, inadequate funding to a band leads to debt — debt that increases over the years — which then leads to departmental oversight and eventually may lead to third-party management. We all know third-party management ends up costing a lot, and, sadly, it seems that, in most cases, the First Nation does not gain the knowledge of how to manage their financial affairs better.

But, honourable senators, if there’s not enough money there in the first case, how can they be expected to balance their books? Even with the best manager, what can they do if there’s not enough money to cover all their expenses in the first place? It’s a no-win situation.

For those First Nations who have no additional source of revenue, the picture is dismal. Their costs go up, but their funding doesn’t increase. They seem to be caught in a vicious cycle, with ever-increasing loads of debt.

Honourable senators, part of the funding problem arises from the 2 per cent escalator cap put on First Nation funding from Aboriginal Affairs in 1997. Since then, the funding for First Nations has not kept pace with either inflation or population growth.

Chief Jonathon Silvestre of Birch Narrows First Nation explained this problem very clearly. He told the committee:

We have received $113,367 for the last 20 years. That has not been indexed to inflation, which, if you peg it at 1.5 per cent conservatively, is only worth $84,741 today.

Eighty per cent more people and 25 per cent less money; how do we overcome these obstacles?

He went on to say:

Just to meet the minimum change due to inflation, our band-based capital should be increased to $152,689, based on inflation at 1.5 per cent for 20 years, which is a 34.7 increase.

Further, the band-based capital should be increased by 80.7 per cent to reflect increased population over the same period, for a new total of $275,773, a $162,106 increase or 143 per cent over our current funding of $113,364. This is just to bring our housing up to the national code and maintain it into the future.

Let me repeat that: Birch Narrows First Nation currently receives annual funding of $113,000, but it should be $275,000 to account for inflation and population growth, a remarkable difference.

Honourable senators, in addition to imposing a 2 per cent escalator cap on funding to First Nations, Aboriginal Affairs has reduced the amount of money available for infrastructure by its internal reallocation of funding for infrastructure to social and educational programs. Aboriginal Affairs’ own numbers show that, over the last six years, approximately $505 million in infrastructure dollars has been transferred to social, education and other programs, to try to fill the shortfalls in those areas.

Honourable senators, half a billion dollars earmarked for infrastructure for First Nations were diverted elsewhere in the past six years. Clearly, there is not enough money in the Aboriginal Affairs budget to adequately fund First Nations and the so-called “robbing-Peter-to-pay-Paul” strategy is not a viable solution.

Honourable senators, I’d like next to say a few words about barriers to housing that arise from the Indian Act. To call the Indian Act outdated, archaic and patriarchal is almost cliché. While some people think that the Indian Act creates barriers for bands who want to develop more homeownership on reserves, in our study we found that wasn’t really the case. First Nation communities had found ways to get around these so-called barriers.

Section 91(24) of the Constitution gives exclusive authority to the Parliament of Canada for Indians and lands reserved for Indians. Laws must first be passed by Parliament in regard to land use and tenure on reserve before First Nation governments can make their own decisions about the use of their own lands.

In fact, the main barrier in the Indian Act is at section 29, which states that reserve lands are not subject to seizure under legal process. What this means is that lending money to a band member creates a high level of risk for a bank because, if the mortgage on a house is overdue or somehow defaulted, the reserve land cannot be seized by a bank or other lending institution. In other words, under normal circumstances, a band member would have a hard time getting a bank mortgage for a home on a reserve. The Indian Act and the Constitution Act tie the hands of First Nations when it comes to their own decision making with respect to the use and tenure of reserve lands.

However, bands have gotten around this problem in the Indian Act by using leasehold agreements in which the homeowner has title to the lands for a defined period of time.

One example of this creative option is the A-to-A leasing model currently operating on the Westbank First Nation in British Columbia. This First Nation has used 99-year leasing for commercial development and is now using the same 99-year lease for homeownership. A band member who has a land allotment may lease the allotment to himself or herself and obtain a mortgage from a bank for the lease. In the event of a default, the bank may seize the lease. The bank would then own the use of that land for the remainder of the 99-year lease while the ultimate title of the land still remains with the Westbank First Nation. This is a creative way to create a marketable interest in the land whereby banks may offer mortgages to First Nation members.

Another example of a First Nation that has overcome the land-seizure barrier of the Indian Act is the Lac La Ronge Indian Band in Saskatchewan. Lac La Ronge First Nation expanded upon the leasing idea by forming agreements with the Royal Bank of Canada and the Bank of Montreal. The band council itself formed an agreement with these banks to create a mortgage fund to provide a first guarantor for the loans. Additionally, it came to an agreement with the First Nations Market Housing Fund in 2009 to act as a second guarantor. These arrangements make homeownership and mortgages possible on their reserve.

The other way around the Indian Act is through the First Nations Land Management Act. Under this act, First Nations develop their own land code, and the land provisions of the Indian Act no longer apply to them. We saw some First Nations who operate under the First Nations Land Management Act on our trip. Currently there are over 50 First Nations operating under the act, and this act allows First Nations to have enacted their own zoning and residential land use laws.

However, many First Nations consider the aspect of the Indian Act where reserve lands cannot be seized and they are set aside for the band only not as a barrier but as a positive aspect of the Indian Act because it ensures that reserve land is safeguarded for the communal benefit of band members as a whole and is not broken up by pockets of private ownership. For example, information provided to the committee from the Ojibways of the Pic River First Nation stated that “the overriding principle is the preservation of the land base for future generations. Without our land we lose our community and our identity.” This community has looked another other models of land tenure that allows shared land to behave like private property but in a way that is protected.

Honourable senators, the third aspect of our report that I would like to discuss is fire safety. In our report, we noted that the fire death rate on reserves is 10 times higher than in the rest of Canada. A number of witnesses drew a link between overcrowding, the state of housing on reserve and the large number of fire deaths in First Nation communities. There are a number of factors that explain the complex nature of fire services and their delivery on reserve.

John De Hooge of the Canadian Association of Fire Chiefs explained that on-reserve First Nation residents have a combination of factors that create a difficult circumstance in providing adequate fire services. Factors such as remoteness; lack of fire resources, both capacity and equipment; lack of applicable standards and codes; inadequate fire safety inspection; and inadequate fire safety education for residents all contribute to this enhanced risk. Mr. De Hooge said:

If people don’t have their own fire-escape plan, their own smoke alarms, fire extinguishers and what have you, if they believe that the fire service will be there to rescue them, in many cases that is not the case, because the way building materials burn today, as rapidly as they do, if you aren’t educated, if you haven’t taken your own preventive measures, the risk of injury and loss of life is significantly increased. Education is a key element in saving lives and property.

Perhaps the most heartbreaking testimony came from Richard Kent of the Aboriginal Firefighters Association of Canada, who told the committee:

I do fire investigations in my area, and it’s very unfortunate when I come to my conclusion on how the fire started, that a basic home fire inspection beforehand would have stopped that fire. The fire would not have happened had we had someone to go in to do a basic home fire inspection.

The tragic death of two children in a house fire on a northern Saskatchewan reserve recently has received a lot of news coverage. There has been finger-pointing and blaming as people try to figure out why this has happened. People are trying to understand what went wrong and to figure out what could have prevented the deaths of these two children and seven other children who have died in house fires on reserves in Saskatchewan in the last year and two months.

In some First Nation communities, honourable senators, we saw homes that have boarded up windows and doors and are in dire need of repairs. Such homes are firetraps. More funds are needed to repair or build homes that are safer for First Nation families.

Honourable senators, this is an interim report. Our committee decided to wait until we heard as much evidence as possible before we made our recommendations; however, there are some recommendations embedded in the evidence that are clear nonetheless. The evidence that we received and the homes that we saw on reserves documented the wide spectrum of housing challenges and successes. We saw communities that resembled well-to-do off-reserve communities, and we saw communities that were in dire need of decent, safe homes for their band members.

The challenge for the committee will be to do justice for those First Nation reserves who face the biggest challenge of not having enough federal funding and not having any other source of revenue. Those First Nation communities who do have their own-source revenue and who are better off financially may be able to leverage opportunities to advance their housing and infrastructure even further, but the poorer First Nations won’t be able to do so.

The challenge for our committee will be to figure out how to find recommendations to break the vicious cycle of underfunding, increasing debt and severe housing problems on the poorest First Nation reserves.

Honourable senators, I would like to conclude my remarks on this report by thanking all the witnesses that appeared before the committee, the witnesses and the communities that welcomed us on our travels, all committee members that were part of this report, and our capable staff members that supported and continue to support us in our work.

As an addendum, I would like to acknowledge the work and valuable input of Senator Charlie Watt on the committee. His name was inadvertently left off the copy of the report that was tabled in this chamber. His name has been added to the online version of our report. However, I put these remarks on the record for our esteemed colleague Senator Watt.

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