Indigenous and Northern Affairs Committee on Oct. 27th, 2009

[Chris Forbes]

I'll have my colleague, Mr. Keenan, answer that question.

[Sean Keenan]

The increase by 10% was the first increase that had ever actually occurred in the northern residents deduction. That was a decision taken by the government to increase it.

[Dennis Bevington, NDP, Western Arctic, NT]

By the cabinet then.

[Sean Keenan]

Yes, to increase it by 10%.

[Dennis Bevington, NDP, Western Arctic, NT]

Was that a recommendation of your department?

[Sean Keenan]

I couldn't comment on that.

[Dennis Bevington, NDP, Western Arctic, NT]

Okay.

The northern residents tax deduction came in before the GST. Has there been any consideration, with this northern residents tax deduction and the GST, of the impact on northern residents? Of course, in many communities the cost of living is double what it is in southern regions, so the impact on the dollar value of the GST on particular items is double what ordinary Canadians would pay. So in some respects, northerners are taxed on a consumption tax much higher than southerners for the same essential things that provide life.

Was that calculation used in your assessment of the northern residents tax deduction?

[Sean Keenan]

The purpose of the northern residents tax deduction is to assist employers in attracting skilled labour to northern and isolated communities by providing some recognition for the additional costs they would incur. With respect to the GST, the GST credit is available for low-income individuals across Canada.

[Dennis Bevington, NDP, Western Arctic, NT]

At a uniform level. But when you did the calculation to present to the government for an increase in the northern residents tax deduction, you didn't take into account any other factors other than the cost of inflation over that period of time, did you? You didn't include the GST as part of that calculation, did you?

[Sean Keenan]

No.

[Dennis Bevington, NDP, Western Arctic, NT]

Good.

[Chris Forbes]

The GST would of course be included in inflation. Any inflation measures that would have increases, decreases, or changes in direct taxes are in there.

[Dennis Bevington, NDP, Western Arctic, NT]

But remember, the GST was instituted after the northern residents tax deduction was put in.

On the issue of your control over of negotiations on the revenue sharing, why has the finance department refused to include the Norman Wells oil field revenues in these calculations?

[Chris Forbes]

I wasn't aware that we weren't including the Norman Wells revenues.

[Dennis Bevington, NDP, Western Arctic, NT]

It has been a bone of contention between the Government of the Northwest Territories and the federal government for a number of years that the very large revenues the Government of Canada has accrued from the Norman Wells oil field have not been part of the negotiations. The Department of Finance has not put those into the negotiations with the Government of the Northwest Territories for resource revenue sharing.

[Chris Forbes]

I would have to look at that and get back to you. If you're talking about past revenues that have been accrued from different projects, I can certainly look into the situation.

[Dennis Bevington, NDP, Western Arctic, NT]

It's certainly not simply past revenues. The Government of Canada has refused to consider that as part of the shared revenues. I'd like to understand your rationale, so perhaps you could get back to me. It's quite an important item. There have been letters between your department and the Premier of the Northwest Territories over the past number of years.

[Chris Forbes]

I will have to look into that and determine what the question is there. We'll get back to you.

[Dennis Bevington, NDP, Western Arctic, NT]

On the formula financing arrangement, in their submission to the formula financing group that was undertaking the study of this, the territorial premiers suggested there was a need for some cost of service analysis of formula financing rather than simply per capita analysis.

In the Canada health transfer, do you consider the actual cost of providing services to northern communities in relation to the dollars you provide?

[Chris Forbes]

There are two questions there, so I'll try to answer them both.

In the submissions, I think you're referring to the O'Brien panel, which was looking at equalization and the territorial formula financing. The government adopted many of the recommendations the panel made on the territorial formula financing. The fact that we have a unique transfer for the north gives some recognition of the higher costs associated with the north. You can see it in the per capita support that goes to the northern territories compared to the provinces. The territories receive much larger per capita support than even the poorest of the equalization-receiving provinces.

On the question of the Canada health transfer, it is calculated based on a combined cash and tax point transfer. We are moving further toward equal per capita cash across all jurisdictions by 2014-15. That will mean the same dollars per person, with no adjustments for anything other than population.

[The Chair, Conservative, Bruce Stanton]

Very good.

That's about it, Mr. Bevington. Thank you very much.

Thank you, Mr. Forbes.

Now we will go to Mr. Rickford for seven minutes.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Chair, and thank you to the witnesses.

I'm going to take my seven minutes probably to speak mostly with you, Mr. Thompson. I appreciate your words today, and I'm going to try to go a little bit more into the specifics because I feel, respectfully, that you understated the important role that you do play in northern regions. It's just an amazing job, not just coordinating with other departments like INAC and, in my case, coming from the great Kenora riding, FedNor. HRSDC has to always have its finger on the pulse of what's happening with respect to the activities of other departments, but growth and diversification within the economies in those regions.... In the great Kenora riding we have 25 isolated communities, and we've come to understand, particularly quite recently, that priorities moving forward with respect to first nations communities deal with making sure they have the skills capacity to complete significant projects going on in their communities. So now through SLAAMB, which you may very well be aware of, out of Sioux Lookout, there is a great opportunity to account and reconcile for decades of carpentry work done by first nations in their own communities and actually get important tickets for that. I applaud HRSDC's role in that.

Furthermore, there was a recent announcement through the community adjustment fund in Pikangikum, where we're setting up classrooms and training people, with partnerships in a regional college, in an effort to ensure they have the best chance at full participation in an extraordinary forestry initiative that is indeed, beyond harvesting and diversification, into value-added deals with forestry management, tourism, and wardenship of historical lands, not just for the nations, but that contain a lot of important information as to the history of that forest in northwestern Ontario.

So with that as a preamble, and recognizing the important social and labour market investments that you make, and by way of example in the great Kenora riding, we're focusing, as the chair pointed out earlier, on economic development in the north. And I always qualify that. My riding is also on the shores of Hudsons Bay, very much north but within another jurisdiction.

I would like it if you could describe in a little bit more detail how you have been and will continue to be that focal point for coordinating and responding to the role of other departments. I know, like in my riding and the territories, you are interested in the skills development not just for first nations people but for another catchment or constituent as well. How will you continue to play an important coordinating role with other departments in some of these initiatives? And take the time as well to refer, if you would like, to specific first nations skills and employment partnership programs that you have in mind.

Thank you.

[Paul Thompson]

I'd be happy to respond to that.

I think you're speaking to two major issues here: one, the importance of coordination of investments, and the other, making sure those investments are actually aligned with local needs and priorities. Those are both huge priorities for us. We're not just doing skills development for the sake of skills development. It's skills development with a purpose that's aligned with broader strategies.

In terms of coordination, we've been working particularly closely with our colleagues at Indian and Northern Affairs in all their domains, but most recently with an intensive focus on the economic development framework that they've been bringing forward, so that the significant skills investment that the government is making is actually aligned with and supportive of the business and strategic investments coming out of economic development, and you can get the synergy and the connection between those.

We've been coordinating at a national level. We have a coordinating committee of assistant deputy ministers, but that coordination falls through into the local level through the federal and territorial councils that exist. More recently, as I noted in my remarks, there's a new player to the game too, with CanNor. So now there are three partners collaborating closely in better understanding the challenges and coordinating the investments to meet them.

On the issue of aligning to local needs, you spoke about some of the projects in your riding. We've been an active player in some of those, with the Whitefeather project. That's quite a successful and positive project. But there are projects like these across the north. I'm hesitant to say our department is at the focal point of all the planning; we're trying to facilitate the partnerships. Through programs like ASEP, we actually create a new partnership that brings together all levels of government and the local employer to have an impetus on its own to plan and meet the needs. Within the Northwest Territories we have three very exciting projects: one with the Deh Cho first nation around construction and petroleum exploration; one with the Mine Training Society in N.W.T. with the major players in the diamond mining industry, which is giving very specific job opportunities to aboriginal people; and one with the Inuvialuit in the Mackenzie Delta and Beaufort Sea on construction and transportation. All of these have specific job targets. We have similar projects in the other two territories as well.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Thompson. I just have one minute left. This may be more of a comment than a question.

You mentioned Canada's economic action plan as being an important source of new resources for some of these programs. I just want to point out that I think that the MPs, particularly in northern ridings, can play a really important role in helping to coordinate these activities, at the very least by being sensitive to what's going on in the communities, what their priorities are, and some of the broader regional economic development strategies moving forward. Canada's economic action plan has accomplished two important things in that regard. First of all, we have identified some of the basic infrastructure components of different communities that they require to be able to be sustainable and have capacity for growth. Second, giving communities an opportunity to make adjustments, whether it's diversification within a sector or....

I'm sorry. Am I being cut off?

[The Chair, Conservative, Bruce Stanton]

We're over time. There's time for a short response to that, but could you complete your question?