By Scott Serson
APTN National News
The situation in Attawapiskat shouldn’t come as any surprise to Canadians.
During the press conference on the release of the 2011 Status Report, retiring interim Auditor General John Wiersema: “Government’s progress has also been unsatisfactory in the area of programs for First Nations on reserves. I am very disappointed that conditions on reserves have worsened and are well below the national average. The education gap between First Nations living on reserves and the general Canadian population has widened. Houses are in poor condition, and the housing shortage on reserves has increased. More than half of the drinking water systems on reserves still pose a significant risk to communities.”
Canadians must ask why conditions on-reserve have worsened.
To find a significant part of the answer, they need only look to what First Nations leaders have come to call “the 2 per cent cap”.
In 1996 annual growth in federal transfers to First Nation governments for basic services, such as primary and secondary education, social welfare and child and family services, was capped at an arbitrary 2 per cent per year as a deficit fighting measure.
That cap remains in place to this day long after that deficit was eliminated. As a consequence, funding for those services have not kept pace with inflation and population growth on reserve.
In her May 2006 report, Auditor General Sheila Fraser put it this way: “Funding for First Nations programs has increased in recent years, but not at a rate equal to population growth. Indian and Northern Affairs Canada’s funding increased by only 1.6 percent, excluding inflation, in the five years from 1999 to 2004 while Canada’s Status Indian population, according to the Department, increased by 11.2 percent” (Chapter 5, p 147, paragraph 5.4).
In addition to population growth and inflation, Aboriginal Affairs and Northern Development Canada (AANDC) funding for province-like programs is supposed to reflect benefits and service levels of comparable programs in the provinces. The department tries to meet this standard but, with the cap in place, they are forced to reallocate funds.
In their 2006 Cost Drivers Report, the department calculated that, by 2004-05, they had already been forced to transfer $500 million from discretionary programs like housing to basic province-like programs in an effort to match provincial investments.
Given the deficit-fighting objective of this cap, First Nations had every right to expect that, when the deficit was eliminated, a fair assessment would be done and a new rate of transfer growth established. That didn’t happen.
This treatment of First Nations’ governments stands in sharp contrast to the treatment of provincial governments. There are two primary federal fiscal transfers to support the provinces in their delivery of basic services to their citizens, the Canada Health and Social Transfers goes to all provinces and equalization provides support to the so-called have-not provinces.
By 2009-10, the Canada Health and Social Transfers had increased by 33 per cent over the previous five years. Equalization received increases of 9.9 per cent in 2004-05 and 8.4 per cent in 2005-06 and a growth rate of 3.5 per cent for the subsequent 10 years.
Granted, there have been new federal investments since this cap was put in place. However, many of these investments have been targeted programs, aimed at eliminating backlogs and filling socio- economic gaps. They do not help First Nations deal with population growth and inflation because the impact of those pressures has been greater than the growth in basic federal transfers.
“Throwing money at this problem” will not solve it, but the federal government sitting down with First Nations to negotiate a system of transfers with a fair level of annual growth is a necessary step towards a solution. Until then we can expect to see more communities in crisis like Attawapiskat.
–Scott Serson was a former deputy minister for Aboriginal Affairs from 1995 to 1999. He was also an advisor to former Assembly of First Nations National Chief Phil Fontaine. The views expressed are those of the writer.
—Note. The attribution in the second paragraph has been corrected. The statement was made by John Wiersema, who was the interim auditor general, not former Auditor General Sheila Fraser.