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From Winnipeg Free Press ...

Feds warned on native funding - Spending cap is eroding services, minister warned in pre-budget briefing document

Sun Apr 8 2007 - Paul Samyn - paul.samyn@freepress.mb.ca
 
OTTAWA -- Indian Affairs Minister Jim Prentice's department issued a pre-budget warning that a growing cash crunch for basic services is shortchanging the country's growing First Nations population.

Federal documents obtained by the Free Press show departmental officials red-flagged the long-term impact of a two-per-cent cap on funding increases that has resulted in less money for capital projects like schools, housing and welfare.

The tracking of the cumulative effect of the government's failure to keep up with both inflation and native population increases shows that funding for basic services is down six per cent in real terms from 1996 to 2006.

And that shortfall, the department says, comes with a price:

• erosion of on-reserve infrastructure;
• health and safety issues;
• risk of legal exposure;
• inability to match provincial standards.

According to the department, maintaining a two-per-cent cap on funding increases results in a $50-million shortfall each year, whose cumulative impact is now more than $300 million less in real terms.

The warnings issued in November 2006 and February 2007 follow a secret memo to Prentice that was prepared for him when he took over the department after the Tory election win in 2006.

"Numerous policy and program pressures are beyond the capacity of the substantial $6-billion departmental budget which primarily funds provincial-type services for northerners and First Nations on-reserve communities,'' says the three-page briefing for Prentice.

Prentice has been under fire from aboriginal leaders in two successive budgets. The first Tory budget essentially gutted the $5.1-billion Kelowna accord for aboriginals, while natives barely merited a mention in the second budget with only $370 million in new spending over three years announced. Prentice's budget will rise by less than 0.6 per cent this year to $6.3 billion.

Prentice has repeatedly argued after the Mar. 19 budget that total government spending on aboriginals will top $10 billion this year -- which he says is $1 billion more than the Liberals ever spent.

Prentice spokeswoman Deirdra McCracken said the documents reflect a long-standing cap on funding increases that began while the Liberals were in power. But McCracken said more money will not solve the problems facing First Nations and that Prentice is looking at structural changes to improve their lives.

"What Minister Prentice has said from the beginning is that the solution to improving the lives of First Nations is not pouring more money into the top of the funnel," she said.

However, Liberal native affairs critic Anita Neville said Prentice is misleading Canadians by rolling in money spent on native land claims and other legal obligations to reach his $10 billion spending total.

Neville (Winnipeg South Centre) said the documents make clear the extent of the real problem facing First Nations, which Prentice is not prepared to admit to or take deal with.

"The bureaucracy is giving him the real picture and what he is doing is not responding,'' Neville said.

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Breaking down the numbers - HOW has Indian Affairs dealt with a two-per cent cap on funding increases? 

Departmental documents show reallocation has been a key part of the coping strategy with the following basic services seeing the following cumulative reductions by 2005:

• capital is down $293 million
• housing is down $81 million
• income assistance is down $51 million
• post-secondary education is down $13 million.

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From Saskatoon Star Phoenix

Unrealistic funding cap hurting First Nations
Doug Cuthand, The StarPhoenix
Published: Friday, April 27, 2007

There is a "secret" document circulating that shows the federal government knew about the state of First Nations living conditions and budget shortfalls prior to its latest budget.

It warns the minister of Indian Affairs about the damage that a cap of two per cent on First Nations funding has created, including the serious cumulative impact it has on the health and safety of people. The internal department memo outlines the need to respond with a one-time payment of $500 million and an annual budget increase of $50 million thereafter.

Budget increases for Indian Affairs were limited to two per cent a year, starting in 1997. The rate of population and price increases has been four per cent annually for the same period. Indian Affairs receives an annual budget of about $6 billion, which, as the report points out, is four per cent of total federal expenditures.

As a result of the cap, certain statutory budget items that have grown in size have to be covered by diverting money from other areas. For example, tuition agreements with provincial schools increased $100 million in 2005. This is a statutory item that must be paid. But in order to pay this increase, money had to be taken from non-statutory items such as capital and housing spending.

The report also mentions that First Nations have coped with the shortfall by limiting growth in various areas, including staff salaries and benefits. Nothing was mentioned about the salaries and benefits of Indian Affairs staff. However, the report's appendices noted that First Nations' employees benefits are funded at 12.5 per cent, compared to 20 per cent for Indian Affairs employees.

The memo warns the minister that continuing with the cap is costly in terms of eroding on-reserve infrastructure, deteriorating health and safety of people, risking legal exposure and making it hard to maintain provincial standards.

Only 23 per cent of the budget spending is considered "discretionary" -- meaning the money can be allocated to other items. The bulk of the department's budget consists of "transfer payments," or money for provincial-type services such as child and family services and education.

Also considered discretionary and being cut back are "transformative programs" such as post-secondary education, housing and economic development, which are meant to improve socioeconomic disparities. This means that the department's budget is focused on basic maintenance, not development.

The report also notes that the department's northern affairs branch is unable to respond to pressures of economic growth and resource development.

There are funding pressures associated with "extraordinary" items such as the "Kashechewan emergency." In addition, over the past five years the department has had to reallocate funding to cover federal government priorities such as the environmental cleanup of contaminated sites.

The result of this cap on spending is that the budget is woefully inadequate to respond to the basic services First Nations communities require. The following is the result of reallocating funds: Capital is down $293 million, housing is down $81 million, income assistance is down $51million and post-secondary education is down $31 million.

This is a sad reflection of how some people are made to bear the brunt of funding cutbacks at a time of budget surpluses.

This report did not come from a group of disgruntled political leaders. It came from within the department, by the very bureaucrats who administer Indian programs. They know from the inside the sorry state of first Nations finances.

When the folks at the colonial office get worried, then First Nations know we are in real trouble.

The attachments to the report are dated Feb. 2, although the report itself isn't dated. Diedra McCracken, Indian Affairs Minister Jim Prentice's spin doctor, told me that this was an old document presented to Prentice when he took over the portfolio. If that's the case, two budgets have been presented without the minister responsible acting on advice from his officials.

In any event, the report's call for a one-time increase of $500 million and annual increases of $50 million were not followed. Instead, there was a miserly increase of $370 million in new money, which is to be spent over three years. There was $300 million for a housing trust, but even its administration is yet to be worked out. This was a bright spot in the budget and a welcome change from band-owned housing.

Prentice was running around the hinterlands this month, generously announcing money for capital projects. Among the announcements was $14.5 million for Saskatchewan alone. In light of the fact that close to $300 million was taken from capital spending last year, it appears that Prentice was bribing us with money we rightfully should have got in 2006.

Most of the funding went into constituencies held by opposition MPs. Strange, that. Maybe it's starting to dawn on the government that the aboriginal vote means something.

But this issue cannot be dismissed as merely partisan. The cap was put in place under the Liberals and continued by the Conservatives. Both have some explaining to do.

We have First Nations in debt and under-funded today. It's time to take a serious look at providing adequate funding for First Nations and not place us in a position where our leaders have to beg for basic services.

Press Release ...

Manitoba Chiefs Respond to Prentice's Threats

"Indian Affairs Minister Threatens Forensic Audits if First Nations Speak Out"

Winnipeg, MB-Grand Chief Ron Evans of the Assembly of Manitoba Chiefs spoke today at a press conference in response to Indian Affairs minister Jim Prentice, who wrote to the media threatening First Nations with forensic audits if they publicly and legally expressed concern over the Federal Budget.

"We thought freedom of speech was a right all Canadians enjoyed. According to this government, we were wrong," said Evans.

Evans said that the First Nations in Manitoba are appalled with the recent federal budget which not only excluded First Nations but ignored the Kelowna Accord of 2005 completely.

He pointed out that despite meeting with every level of government, and reaching agreements with governments and lawmakers, governments continually ignore their own agreements.

Evans said that "on Kelowna, not only did we all agree but Brian Mulroney, Steven Harper's advisor, is in full support of the accord. He's the one that said 'We've existed for 140 years and we have this shameful situation… and why? Very simple: we stole their land.'"

The Grand Chief announced that he called an emergency Executive Council of Chiefs yesterday and that due to the serious nature of the federal budget, the meeting was opened to all First Nation Chiefs and Councils from the 64 First Nation communities in Manitoba.

The meeting, held at Winnipeg's Radisson hotel, was called on short notice. Attendance was strong, despite the fact that many who came had to take expensive flights due to the lack of winter roads this late in the year.

At the meeting, the Chiefs of Manitoba talked about the fact that the spotlight is now on Manitoba as it was them that Prentice threatened directly in his letter to the media. "With First Nations groups across the country watching to see what will do, Manitoba Chiefs must take the lead," said Evans.

Under the direction of its Executive Council of Chiefs, Evans announced that he as Grand Chief would be implementing the following:

1. The Assembly of Manitoba Chiefs is mounting an election strategy encouraging First Nations people to vote in all federal, provincial and civic elections. With the First Nations population growing at double the pace of the rest of the country, Evans said that "we have a voice and we will use it."
    
2. "Like every other Canadian, we spend money," said Evans, "So we will involve the businesses we support in a rally to be held at the Manitoba Legislature on April 25, 2007."
    
3. Evans pointed out that according to the Supreme Court of Canada, treaties must be respected, and that since First Nations own much of the land that provides the natural resources Manitoba depends so heavily upon, the group would begin strategizing on how to use its economic leverage effectively.
    
4. Evans also stated that he would be reaching out to the international community, pointing out that the UN index tells us that Canada ranks in the top 10, but First Nations in Canada rank 63rd.

Evans also pointed out that in Minister Prentice's letter to the media (Winnipeg Free Press, March 29, 2007), he said he would be willing to sit down and talk with AMC representatives. Evans said he invited the Minister to do so in a letter on March 22 but got no response. Evans said he will invite him once again to an AMC Special Assembly in Sioux Valley on May 8-10, 2007. Evans added that the Executive Council also directed that the AMC look at ways to make the government accountable for treaty compliance for Manitoba bands by using its own forensic auditing system.

Evans wrapped up his comments by adding that "freedom of speech and the tradition of civil disobedience are peaceful responses to the government from its people. We are lawfully doing our part. When will the government do the same?"

Nakina Sankar
Director of Corporate Communications
Assembly of Manitoba Chiefs
204-799-6493
nsankar@manitobachiefs.com.

Click here to view video of chiefs' presentation

Click here to read Chief Terence Nelson of Roseau River First Nation comments concerning the INAC Minister