2007 Legislative Session: Third Session, 38th Parliament
SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS
MINUTES AND HANSARD

MINUTES SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS Thursday, April 19, 2007 8:30 a.m. Douglas Fir Committee Room Parliament Buildings, Victoria

The following electronic version is for informational purposes only.
The printed version remains the official version.

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON 
PUBLIC ACCOUNTS

THURSDAY, APRIL 19, 2007

ISSN 1499-4259

[ Page 257 ]

THURSDAY, APRIL 19, 2007

          The committee met at 8:36 a.m.

           [R. Fleming in the chair.]

           R. Fleming (Chair): Good morning, Committee. We'll begin the Public Accounts meeting in a moment. I know that some MLAs are coming from other meetings and breakfast meetings, and they will perhaps miss a minute or two as we start here.

           We have the agenda before us, and the main item of business this morning, of course, is the report of the Auditor General on the treaty process. Then we will move on to talking about retention and disposal of documents, and we'll have a presentation on that.

           Finally, an item that is not on the agenda, and that I propose we go in camera for, is that approximately the remaining five minutes of the meeting would be to give an update to Public Accounts members about the search committee on the Auditor General.

           If there are no additions or amendments to the agenda, I would ask that it be moved for adoption.

           Meeting agenda approved.

Auditor General Report:
Treaty Negotiations in
British Columbia: An Assessment of the
Effectiveness of British Columbia's
Management and Administrative Processes

           R. Fleming (Chair): Okay, item 2. Mr. van Iersel, thank you for being with us this morning. I'll let you introduce your audit team this morning and begin the presentation on this report.

           A. van Iersel: Good morning, one and all. It's a pleasure to be with you again today. Chair, Deputy Chair and Members, we're here today, as you heard, to speak to our November 2006 report on the effectiveness of B.C.'s management and administrative processes as they relate to treaty negotiations.

           With me today are Mr. Russ Jones, sitting behind the laptop; also Ms. Kathy Crawley, who's in the gallery this morning; and Mr. Tin Lok Ng, who is to my right. The latter two are both our project leaders on this particular audit. We also want to recognize some other members of our office who worked on this: Mr. Ken Lane, Mr. Chris Rolfe, Ms. Laurie Selwood and Ms. Charlene Tupper.

           The report was done concurrently with the federal Auditor General. We undertake such concurrent audits from time to time to deal with important issues where we think more than one auditor general perspective is appropriate. That's what we did in this case, as we have done in some other cases in the past.

           We have collaborated with the federal Auditor General, and we released the reports at the same time — which was, as you heard me say, in November of 2006. While we did that, they are in effect two separate reports — one from the federal Auditor General perspective and one from ourselves. If you've had a chance to read the report, though, you will notice that there is a common forward, giving some summary comments from Ms. Fraser and myself.

           We restricted our examination to the provincial government's administrative and management processes and the resources implemented for treaty negotiation and the provision of accountability information to legislators such as yourselves and to the public. Our audit specifically excluded looking at the treaty negotiation process within first nations themselves, and we did not look at the B.C. Treaty Commission.

           We did, however, provide a significant review of the treaty process in British Columbia, including an extensive history, which we hope you found useful.

           The report shows that negotiating treaties is complex and challenging and that the legal, economic and political context is evolving and is a challenging one. Modern treaty negotiations have been much slower than expected. With respect to the administration and management of the treaty process, we observed that although it may be sufficient to move a few treaty tables forward at this time, it also has its significant challenges.

           We further believe that the ministry should improve the quality of the information it's providing to the Legislature and the public on the status of treaty negotiations, given their importance to us all. Some reporting is already done through the Treaty Commission, but we believe more needs to be done through the ministry's service plan and other reports.

           Some of the challenges we see include simultaneously managing the emerging benefit opportunities that exist outside the treaty process; the negotiation of treaties at the same time; potential disruptions from court cases and from changes in political leadership at all levels; and some of the key issues, such as aboriginal title and the recognition thereof.

[0840]

           Based on our findings, we believe that overall effectiveness can be enhanced. It is my hope that our report and its recommendations will end up being the catalyst to the treaty process and make it as effective as it possibly can be for all parties. We also acknowledge that efforts are needed on other fronts at the same time that treaties are being negotiated, such that as much progress as possible can be made for the benefit of all those involved.

           In my view, treaty negotiations do remain an effective means by which parties can resolve their differences and can help narrow the social and economic gaps which currently exist between first nations communities and the rest of British Columbians.

           At this point I would now like to ask Mr. Russ Jones, our assistant Auditor General, to go through our presentation of the findings and our recommendations.

           R. Jones: Good morning. It's my pleasure to be here with you this morning and to provide you with a brief overview of our report on treaty negotiations in the province. What I'm going to do is start the presentation

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with a brief summary of why British Columbia is engaged in negotiating treaties with first nations.

           The overarching reason for entering into treaty negotiations is that where there is no treaty, B.C.'s assertion of sovereignty conflicts with first nations' aboriginal rights and title claims regarding the land that they've occupied for millennia and the resources on the lands that they feel they're entitled to.

           As a result, this has created uncertainty in the management of Crown land and resources in the province. For example, there have been periodic flare-ups in tension between first nations and the province and resource developers. Resolving these issues is critical to land management and the development of natural resources in the province.

           At this point I'd like to take you back in time a little bit and just provide a little bit of historical context on the relations with first nations. The British Crown recognized the interests of first nations in the land through the Royal Proclamation of 1763 in eastern Canada and decreed that first nations should not be disturbed in the possession of their lands and specified that only the government could purchase land from them. This did not extend to British Columbia.

           In the 1850s, however, James Douglas made 14 land purchases on Vancouver Island that were known as the Douglas treaties, which still exist. In 1871, when B.C. joined Confederation, they did not honour the 1763 proclamation, thus ignoring first nation rights, and that's been the case right up to modern times.

           A turning point for the federal government to initiate treaties in B.C. came with the Supreme Court decision resulting from the Nisga'a case. It ruled that first nations title was created by the use and occupation of land prior to European settlement. However, the court couldn't decide on whether first nations title had been extinguished by provincial laws, so B.C. did not join in initially.

           Over the years, in their frustration, first nations have used direct action to assert their rights, and in recent years they've escalated that action through more protest blockades and court injunctions. In 1990 PricewaterhouseCoopers did a study that determined that the uncertainty created by the unsettled land claims in B.C. was having a $1 billion impact on the economy, including 1,500 lost jobs in the mining and forest sectors each year.

           Taking all this into account, the provincial government reconsidered their position and in 1990 entered into negotiations with the Nisga'a. In 1990 the British Columbia Claims Task Force came out with 19 recommendations. One of these recommendations was to establish a process for negotiating first nations land claims by the formation of the B.C. Treaty Commission. As a result, BCTC was set up to facilitate widespread treaty negotiations between first nations, B.C. and Canada. For the past 14 years treaty negotiations have been taking place in the province.

           With that brief history, let's move on to our audit and what we looked at, what we found and our recommendations. The purpose of our audit was to assess whether the province had effective administrative and management processes and adequate resources in place to successfully negotiate treaties. We expected that there would be clear guidance provided to negotiation teams; that strategies were in place to identify and deal with barriers to treaty progress, legal rulings and options for change; that adequately trained staff were employed in sufficient numbers to carry out all aspects of treaty negotiation and subsequent implementation of signed treaties; and that the province maintained a good relationship with Canada and the first nations.

[0845]

           We concluded a number of things overall. Using treaties to resolve claims to land and resources had been an expensive and time-consuming process for all three parties. It hasn't been a smooth process. It often raises more questions than it answers. There are large gaps in negotiating positions.

           Treaties do provide a way for some first nations to achieve recognition of their rights and title, although they may not be for everyone. Effective administrative and management processes and resources are concentrated on only a small number of breakthrough tables. These are a small number of tables that the province decided were most likely to be successful in the process; that's what we mean by breakthrough tables. As a result, of the 57 first nations participating in the process, only three tables were close to signing at the time of our audit. This strategy of concentrating on the breakthrough tables is sometimes causing frustration to many others in the process.

           Let's take a closer look at the four key areas that we believe require attention. The first was that treaty negotiations had been slower than initially expected, and we've got two findings here. Part of the reason for the perceived slow progress is that treaty negotiations had evolved as legal, political and economic contexts had changed. Common law is changing, which has an impact on whether parties believe they are better off or worse off entering into a treaty.

           The province had responded with interim measures of an immediate nature to deal with these issues. While these options may provide temporary reconciliation of issues — similar to renting certainty — ultimately, they do not give parties the long-term certainty that treaties offer and in some cases are available to first nations outside the process as well, such as forestry agreements.

           In response to fiscal restraint and to help get the momentum going, the ministry focused its efforts on a few treaty tables that were the most likely to succeed. These treaty tables were given the title, as I mentioned before, of breakthrough tables, and they generally were first nations that required less complex negotiations and had a small number of members in the band. One of the problems with this focus was that the others, which are the majority of the treaty tables, were making very little progress because there was limited provincial presence at those tables. Even progress on the breakthrough tables continued to challenge the ministry because it is a very complex process.

           Our second area of concern was that business has occurred with first nations outside of the treaty process,

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and this could hamper the continuing interest of first nations in the treaty process, as well as contribute to a slower pace of negotiations. The ministry, at the time we did the audit, was working on an initiative called the new relationship policy that offered additional reconciliation options about the use of land and resources both to those involved in the treaty process and to those that were not. The new relationship involves a transfer of $100 million to an independent corporation, as well as many other initiatives, in order to foster economic and social opportunities in the first nation communities.

           At the time of our audit the province was in the process of working out the details and had not determined yet how the treaty process would be supported and complemented by this broad range of options. As a result, until the province clarifies this, some first nations were taking a wait-and-see approach.

           What we recommended was that the ministry, in consultation with first nations, review and revise as appropriate its policy goals and its approach to the treaty negotiation process and in particular determine how the treaty process will be harmonized with the new relationship policy.

           We will deal with our next area of concern in two parts. Both relate to the administration of treaty negotiation process. The first part is about providing negotiators with mandates — what each party is willing to put on the table or offer to the other parties. We found that although the job of providing mandates to the breakthrough tables is getting done, support is not easily available to negotiators working at the other tables. This is particularly troublesome when mandates, for example, in areas such as fishery and forestry are not kept up to date or are not backed up by rationales.

[0850]

           Without new government positions and practices readily available to them or with rationale left undocumented, some negotiators were left without guidance to determine what they could and could not propose to agree to at the tables, and this created bottlenecks.

           We also found that the provincial mandate sometimes presented a barrier to negotiations. An example of this was the exclusion, at the time we were doing the audit, of the issue of self-government from the treaty process. This had slowed progress at the negotiation tables, and for some even had the potential of being a deal-breaker.

           What we have recommended is that the ministry — in conjunction with other ministries involved in the treaty negotiation process, such as Forests and Energy — improve the administration of the treaty negotiation process by reassessing the negotiation strategy of focusing on only a few lead tables and by expediting the mandating process at the Ministry of Aboriginal Relations and Reconciliation and related ministries.

           The second part of this area relates to administration of the treaty process and is about providing the right staff in the right numbers to meet the goal of successful treaty negotiations. We found that negotiators and their support staff are competent and experienced, and that they are devoted mainly to meeting the needs of those few treaty tables close to signing a treaty.

           The problem with this strategy was that it left some tables with the potential to advance waiting in the queue, and that caused them frustrations. This strategy was based on the expectation that the first few signed treaties would pave the way for more to come, facilitating progress — an expectation that was not held by all parties to the negotiation. We also found that there was a shortage of supporting staff in other ministries available to deal with the emerging issues and needs of the process.

           We found that negotiation staff maintained their competency mainly through on-the-job training and mentorship — which was necessary because of their busy, busy travel schedules — and that in its workforce plan the ministry had identified long-term staff shortages within the ministry and within supporting ministries.

           Some facts on this. Within the ministry itself, projections show that 33 percent of its entire staff will be eligible for retirement within the next ten years and that 82 percent of its present chief negotiators and more than half of senior negotiators and negotiators will be in the same position. In supporting ministries — for example, the Ministry of Attorney General, which provides a lot of legal advice — there was a projected retirement of many of their senior counsel that specialize in first nation issues. The loss of that support could materially hinder the treaty negotiation process.

           We recommended that the ministry, in conjunction with other ministries involved, ensure that there was alignment of adequate resources with the roles and responsibilities needed to support the treaty negotiation process.

           The final area of concern was that there was incomplete reporting to the Legislative Assembly about the successes and challenges of the treaty negotiation process. Specifically, we found that the original estimates for completion times for implemented treaties was unrealistically short, although a lack of tried-and-true benchmarks made success difficult to assess in this area.

           We learned that most treaties in other jurisdictions inside and outside of Canada had been signed many decades ago, even centuries ago, when finding unencumbered land was much easier. However, many look to the Nisga'a first nation treaty as a modern-day benchmark because many of the topics included in that treaty provided potential treaty content for those currently in the process. From start to finish, the modern phase of that treaty took almost 25 years to complete.

           We also found that the ministry was providing some relevant information in its 2005-06 service plan report about the number of agreements in principle it completed compared with the targets it set. It also noted that the federal election had caused delays in the treaty negotiation process. But little else was said about the issues and challenges the ministry was facing as it carried out its part of the negotiation process.

           Although the B.C. Treaty Commission reports annually on some of the successes and challenges of all three parties, we believe that the ministry should do more to meet its accountability responsibilities to the Legislative Assembly.

           We recommended that the Ministry of Aboriginal Relations and Reconciliation report annually to the

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Legislative Assembly and the public on the status of negotiations of all the first nation participants, the barriers that were preventing those participants from moving forward and the efforts made by the ministry to overcome those barriers.

[0855]

           In summary, our four key areas of concern were: treaty negotiations were slower than expected; business occurring outside the treaty process could hamper interest in the treaty process; the provision of negotiators with clear guidance and mandates to the few breakthrough tables was working well for those tables, but the targeted focus of resources burdened the others in the treaty process with many challenges; and finally, there was a need for fuller reporting to the Legislative Assembly and the public on the status of treaties and the issues, challenges and efforts made by the ministry to overcome them.

           R. Fleming (Chair): Thank you, Mr. Jones. I think we should probably go straight to the presentation from the Ministry of Aboriginal Relations and Reconciliation. If Deputy Minister Mr. Brownsey is able to bring his team forward…. I assume there's a slide presentation as well.

           A Voice: Right here.

           R. Fleming (Chair): Excellent.

           Good morning, Mr. Brownsey. Would you care to introduce your team? Then we'll just let you proceed. Questions from the committee will be directed either at the staff of the Office of the Auditor General or your own staff following your presentation.

           L. Brownsey: Thank you very much. It's a pleasure to be here. I thank you for the opportunity. I'd like to introduce the ministry team that's with me: Mr. Julian Paine, assistant deputy minister, and Ms. Barbara Reuther, also assistant deputy minister.

           The ministry is pleased to be here to have an opportunity to present to the Select Standing Committee on Public Accounts the ministry's response to the Office of the Auditor General's report on the province's management and administration processes for treaty negotiations.

           The ministry shares with the Auditor General a common commitment to ensure that the role and the management of our treaty process are as effective as we can make them. We deeply appreciate the efforts of the Office of the Auditor General and feel that the report that he and his staff have prepared will help us assess, as we go forward, the steps that we take to maximize the productivity and the output from our negotiation efforts.

           What I thought I would do this morning is take this opportunity to provide a bit of additional information to help the committee better understand and assess the context around the Auditor General's report and the suggestions and recommendations contained in there, and illustrate briefly some of the provincial responses to the specific findings and recommendations.

           I'm also, of course, happy to follow up with answers to any questions that the committee members might direct towards the ministry staff.

           Just to go over, ever so briefly, some of the territory that Mr. Jones covered, in terms of why we're in the negotiation process. I think it's important to note that there are a number of motivations as to why the province — and the federal government, for that matter — are negotiating treaties. There is a historical context as outlined by Mr. Jones — the unfinished business — that has both, I think, a historical and a moral dimension to it.

           There are also, of course, a number of compelling legal reasons. The courts, in each of their modern-day pronouncements on issues having to do with aboriginal rights and title, have urged the parties to seek negotiated solutions to the issues at hand.

           There is also — and I think this might be right at the top of the list — a very compelling social reason to engage in this work of reconciliation — one of the key mechanisms, of course, being the negotiation of treaties.

[0900]

           That social motivation is about building the capacity of first nations so that they have the economic wherewithal to be full and active participants in the vibrant British Columbia economy and the healthy communities associated with that. We think treaty negotiations are an important tool to deliver that kind of support to the many first nations in this province.

           Lastly, but not by any means unimportant, of course, is the economic reason that Mr. Jones spoke to. The fact is that aboriginal rights — this is the case in British Columbia for the most part, with the exception of the few treaties that have been concluded in historical times and the Nisga'a treaty — are extant but not defined and not well understood by the respective parties. There is a great uncertainty that hangs over first nations' understanding of the use, access and management of natural resources and land — and similarly, the Crown, corporate and community interest in those resources as well. So a large set of reasons by which the province has entered into the treaty process, beginning in the early 1990s.

           As Mr. Jones spoke to in his report to this committee, treaties are perhaps the most comprehensive and most complex form of negotiated agreements, designed to meet the goals of reconciling the interests of first nations with those of other British Columbians.

           They do cover the full gamut of authorities that one might expect, ranging through all of the social sectors — health, education, culture; into the natural resource areas of land, forestry, fisheries; into governance and the nature and structure of first nations government, capital arrangements and fiscal transfers. These are very complex and significant documents.

           British Columbia is no different in the approach that it takes to negotiating treaties than other negotiations across the country. It's a similar negotiating agenda whether the negotiations are occurring in the territories of Canada, as they have in modern times, or in Quebec, as they have in modern times. It's a similar set of negotiating items. Actually, as Mr. Jones has pointed out, it's a similar lengthy period of time, it seems, to reach settlement

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elsewhere in the country as it has proven to be in British Columbia.

           The audit that the Auditor General's office has prepared made key findings in three areas, as has been noted: the pace of negotiations, the administration of the negotiation process itself and reporting on progress to the public of British Columbia through the Legislature. I'd like to comment briefly on each of those three areas, beginning with the pace of negotiation.

           The finding of the report that has been prepared is that modern negotiations have been slower than was expected. It certainly has been slow. In 1993 when the leaders of the governments of the day — the provincial government and the federal government — met with the first nations leaders in the longhouse in the Squamish lands to celebrate the act that established the British Columbia Treaty Commission, which kicked off their exercise, then Prime Minister Mulroney and Premier Harcourt predicted that the work would all be done by the turn of the millennium.

           That obviously hasn't happened. In fact, we fall short of that expectation. In its 2002 review of the British Columbia treaty process — the review by the Treaty Commission — the statement that was made was: "Our expectations for comprehensive treaties were unrealistic. We tried to accomplish too much, too fast."

           The report goes on to state that there are far more first nations negotiating treaties than was contemplated when the process was designed. I'd like to just illustrate a bit on that point, because I think it's quite critical to the findings of the Auditor and the commentary about the pace of the negotiations.

[0905]

           The British Columbia Treaty Commission Act and the task force report that led to the establishment of the commission make it very clear that the first nations will organize around the political entities as they see fit. What has emerged is that many first nations have chosen to come forward into the treaty negotiations along the lines of Indian bands as opposed to tribal associations or larger aggregations or perhaps as opposed to the historical gatherings that define the Salish Nation, for example, or the Haida Nation, the Carrier-Sekani or other tribal affiliations.

           We have a situation where we have upwards of 40-plus negotiations occurring in the province representing many more first nations than that. The original conception was that the negotiations might be driven more around the historical tribal affiliations, but that has not proven to be the case. That obviously adds a significant complication and complexity to the effort.

           The negotiation agreements themselves, as I've indicated, are highly complex and cover a broad range of issues. Each of those issues has some very significant interrelationships between them, as well as the relationships that extend from the possibility of an agreement with the first nation through to neighbouring local governments and to the two senior public governments.

           The engagement in such a complex set of negotiations has obviously required all parties to build capacity at a variety of levels. That has been a fairly significant challenge for our first nations and, frankly, for the public governments as well.

           Mr. Jones, in his report to this committee, spoke about one initiative that the province has taken recently in terms of addressing capacity more generally in first nation communities in the establishment of an independent fund that is managed by first nations leaders to build the wherewithal so that the technical expertise to consider and strike agreements and arrangements — either within the treaty process or outside of the treaty process — on complex matters such as forestry or land management or health authorities becomes resident in those communities, as opposed to a fairly heavy reliance on bringing in outside expertise to support the first nation itself.

           The progress and pace has also been affected by the elections that occur, by necessity, amongst all three of the treaty partners. The federal election has been referenced already, obviously provincial elections, and the first nations have elections as well. Many of their electoral cycles are two-year cycles, which causes quite a constant need to deal with potential change amongst one of the treaty parties.

           Of course, as has been mentioned already, legal issues are a very important consideration at the treaty tables. As the jurisprudence changes as a result of various cases that have gone to trial and have been pronounced upon by the courts, adjusting and changing the nature and the way we must look at issues of aboriginal rights, so too does the need to consider and adjust the approaches brought to the negotiating table. Several of the cases have been extremely profound in terms of the shifts that they have brought — the Haida case and the Taku case in particular.

           R. Fleming (Chair): Could you wind it up, please?

           L. Brownsey: I will. Thank you.

           The next finding that….

           G. Gentner: A point of order, Mr. Chair, if I may. We have a limited time here today. We're out at ten o'clock, and there are some very important questions on a very important subject that should be raised here. If I look at the presentation before us, we're probably not going to be able to enter any questions until it's time when we have to recess or adjourn. I bring that to the Chair's attention.

           R. Fleming (Chair): Thank you. I've just signalled to the deputy minister to proceed to the end of his presentation quickly, if he could.

[0910]

           L. Brownsey: Thank you, Mr. Chair. Members, I'll do so.

           The next finding has to do with the possibility that work outside of the treaty world is providing perhaps an impediment. The ministry and the government feel it's important that there be a broad range of tools that the first nations can access as they seek to reconcile their needs. We do agree with the recommendation of

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the Auditor General that these various tools would be harmonized, and we're working with our first nations partners to do so.

           Similarly, in terms of the recommendation that we work with first nations leaders to review the policies that we bring to the table, we have struck a very intensive engagement with the First Nations Leadership Council, where many of these items are on the agenda, and we are proceeding along that conversation to work to adjust policies as appropriate. Similarly, the negotiation process evolves, as well, accordingly.

           I'd like to speak briefly about the issue of breakthrough tables. The breakthrough table matter was raised by the Auditor General's report. I'd like to note that the province did not choose to proceed in this manner strictly as a result of financial imperative. We felt that it was important to look for the best opportunities where success might be had and to pursue that with the belief that success there would translate into success in other situations, in other negotiations.

           Lastly, the issue of reporting about the progress to the people of British Columbia through the Legislature. We do provide reports in our service plan. As has been noted, the British Columbia Treaty Commission reports with the tabling of its annual report to the Legislature.

           The ministry is currently examining options to enhance the reporting on progress with respect to the treaty process within its service plan and would expect that in our next service plan to the Legislature, there will be a more fulsome commentary on progress made in treaty negotiations.

           I'd like to just conclude by thanking the committee for this opportunity, and we welcome any questions that might come forward.

           R. Fleming (Chair): Thank you, Mr. Brownsey. We'll go to committee members' questions now.

           G. Gentner: Just for the record, with what was relayed in the news today, I think it's absolutely unjustifiable that the Treaty Commission will now be interfering with the decision of the Lheidli T'enneh and the election process. I hope that the ministry will have a full explanation as to why this interference is occurring.

           I would like to talk primarily about how agreements outside negotiations will affect the treaty tables and ultimately the treaty itself, which was raised by the Auditor General. The Auditor General mentioned:

           "We have noted that in the absence of treaties, other options have evolved to deal with questions related to aboriginal rights and title, although in many cases these solutions are temporary. Both audits noted that some court decisions may make litigation a more attractive option than negotiation. A rising number of contracts between first nations and the federal and provincial governments, municipalities, and private companies were observed."

           When you go into Sheila Fraser's commentary, it's far more explicit regarding the same thing. The report from the Auditor General discusses both audits, and it's referenced as well. The federal government suggests that there are a growing number of contracts involving first nations inside and outside the treaty process.

           Some first nations have signed partnership agreements with companies wanting to exploit resources in their traditional territory. Many of these arrangements bring operational certainty over the management of land and resources in claimed areas and imply that aboriginal rights and title exist without defining them.

           There is an uncertainty made here….

           R. Fleming (Chair): You're getting to a question, Member?

           G. Gentner: I'm getting to a question. The question….

           J. McIntyre (Deputy Chair): If I understand correctly, you are reading from the federal report?

           G. Gentner: I'm reading from both the federal and the provincial audits. The provincial Auditor General referenced both in his foreword.

[0915]

           J. McIntyre (Deputy Chair): Yes, but the federal report is outside the scope of this and outside the terms. We're here to discuss the provincial Auditor General's report.

           R. Fleming (Chair): I'm not going to get into wild interpretations of where a member might be providing context for the question, and the member has said he's getting to a question.

           J. McIntyre (Deputy Chair): Well, then at least get to a question, please.

           G. Gentner: There is a comparative analysis. All analyses are comparative. To look at what the federal jurisdiction has said is somewhat different, but on the same track as what the provincial Auditor General has said.

           The question is simply this. How independent is treaty-making when, in fact, the process is skewed with these side deals? I know, for example, with the Tsawwassen situation there was a deal made with B.C. Rail, a deal that was done by the Vancouver Port Authority, which in the end pointed to the need to take further agricultural land out of the ALR…. That was way back in 2004.

           To the Auditor General, the question is again simply this. How will agreements outside of negotiations affect the treaty tables and ultimately the treaty itself, and does this not put the process in doubt?

           A. van Iersel: As has been said, this was one of the areas of interest to our office in terms of the potential concerns. Let me say that we understand the reasoning behind some of these side agreements, if I could use that terminology. We're concerned in regards to how those side agreements fit into the overall treaty process and their impact on that. In the discussions and the interviews that we did, concerns were raised by some

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parties about that relative to treaty and whether or not it created a disincentive to participate in treaties.

           To summarize, we understand the reasoning for them and the need, in certain cases, to have such arrangements. But we did recommend, as part of our first recommendation, that the ministry work with the other participants to ensure that these arrangements were in the broader context of treaty-making.

           In particular, the new relationship was trying to knit these all together so that there was a more consistent plan regarding treaty negotiation and relationships with first nations moving forward. We understand their existence, but we're concerned that in some cases they could be a disincentive and a drain on resources relative to other work that had to happen.

           M. Polak: Touching on that…. It is always a challenge to juggle the competing demands of outright legal negotiations and the need to move forward with respect to relationships and building capacity generally.

           In light of comments from the member down the way and the concern expressed in the report — and also by the member — around the impact of side agreements, is it not fair to say — I guess to the Auditor General — that regardless of our natural interest in settling and bringing closure to land issues, somewhere in the mix there has to be a recognition that the higher moral and ethical imperative is found in the efforts to build some capacity, to improve the social cohesion for aboriginals and indeed to see all these efforts operating under that guidance?

           If we're thinking about the 30,000-foot view, it's really about doing the right thing and finding the ways to do that. Is that a fair characterization of how we ought to look at this, in your view?

           A. van Iersel: To that question, I should make it clear that as an audit office, we certainly agree with the aims of the ministry and with what has been stated this morning by the deputy minister in terms of the aims of the treaty process and the other processes that are currently outside of treaty. We've mentioned the gap between first nations communities and the rest of the province in terms of how those need to be addressed. We see treaty as one of the valid ways in which that is done, and we certainly agree with the comment regarding the need to build capacity in those communities and to help move forward in some kind of permanent way.

[0920]

           Here our focus is on the process of treaty-making, the administration related to treaty-making and how that could be improved. It's not a disagreement with treaty-making in that sense.

           B. Ralston: In the report it talks about the new relationship and its relationship with treaty-making. I think all of us are familiar with the new relationship as enunciated by the government and its broad declaration of intention. Would it be fair to say that that declaration has raised expectations at the treaty table, but because there is not a clear definition of what the new relationship might imply for the treaty process, it is generating some of the frustration and some of the delay?

           I'd ask, first, for a comment from the Auditor General on that general proposition and, secondly, from the deputy minister — and bearing in mind that he's the senior public servant, not the political leadership of the ministry: what direction has been offered in terms of attempting to define the new relationship in a way that will assist treaty-making?

           A. van Iersel: If I could go back to recommendation 1. Again, if you have the reports before you, it's on page 12. We've said that the provincial government, in consultation with first nations, should review and revise as appropriate its policy goals and approach to the treaty process and, in particular, harmonization with the new relationship.

           At the time that we did our audit work, the new relationship was just evolving in regards to what it meant. It came, as you've already heard this morning, in 2005. One of our recommendations in terms of trying to improve the process is that the treaty-making, the other financial and business arrangements that are being entered into, be put in proper context within the new relationship such that all parties better understand what is to happen, under what vehicle and for what purposes.

           I think at this point I would recommend we perhaps hear from the deputy minister in regards to how that is moving ahead.

           L. Brownsey: The question of whether the new relationship is an impediment or not — or created an incentive or disincentive — was certainly one that many of the treaty-negotiating first nations raised and one that the provincial government proceeded to deal with in the three agreements that recently have come to a conclusion at the negotiating table. In any event, all of it contained provision that concluding a treaty does not preclude the first nation from availing themselves of initiatives that might come forward from the new relationship.

           For example, the first nations health plan that was agreed to in November of last year. We want to make sure that a treaty first nation has an opportunity to access any of the provisions or initiatives that might come forward under that and similarly across the broad sector.

           While the new relationship still is in some form of definition, we want to make sure that first nations are not feeling that concluding a treaty is going to deny them access to anything that might come from that, and we have formally written that kind of commitment into the treaty agreements.

           R. Fleming (Chair): Follow up?

           B. Ralston: Yes, I might. One of the goals of the treaty process and one of the benefits that it offers — and certainly that's been the expectation and the goal

[ Page 264 ]

right from the beginning of the process in the early '90s — is that it offers finality. Then the economic relationships that might flow from that proceed in a legally certain climate.

           This is again to the deputy minister. How does one reconcile that expectation and that goal of legal finality with that relatively open-ended commitment — however generously it may be characterized — to allow any nation that concludes a treaty to still benefit from the further evolution of the social and legal environment of British Columbia in the years to come?

[0925]

           L. Brownsey: In fact, I would perhaps challenge the assertion that the treaty is meant to deliver finality. I think the treaty is meant to deliver predictability and certainty to all the members that sign to the treaty. But like any arrangement between governments or between organizations, there needs to be an opportunity for that to evolve as circumstances do change over time, and the treaties do allow for that kind of evolution.

           There are, however, a number of provisions in the treaty that do provide certainty so that the parties have a clear understanding about how, in particular, the resources and the lands can be used and accessed — and that more clarity is brought to the issue of undefined aboriginal rights so that all parties have a similar understanding of how those rights, now treaty rights, will bear upon their interactions particularly on the land base.

           R. Hawes: I want to go to one of the points in the ministry response that I think touches on the new relationship and the effect it may have. That's where it says: "Building a relationship allows incremental progress."

           I guess I'll preface it by saying that it just seems to me that anyone who thinks that magically there was going to be a bunch of treaties suddenly start to happen very quickly maybe hasn't been on the Earth long enough. There have been a couple hundred years of bad feeling and a poor relationship, I guess, with the aboriginal community, which aren't going to just magically go away in a few short years.

           I guess my question would be: the new relationship, as it relates to the strategy of incremental treaty-building…. Does that fit in with that strategy and a recognition that this is going to be a long, slow process that requires building trust that has not been there? I guess my question would be then: with the new relationship, how does that allow the rebuilding of trust, and is that going to help in the end with treaty-building?

           L. Brownsey: I think you have articulated the new relationship perfectly. It is designed to put forward increments that the parties can agree upon and build the confidence that results from agreements.

           We also need to recognize that approximately one-third of the first nations in the province have chosen not to negotiate treaties. We certainly need a series of initiatives to work with those first nations as well.

           There is clearly a recognition that it'll be many, many years before treaties cover the entire mapscape of the province, and we can't sit and wait until the treaty comes from the mount. We have to get on with business and the business of collaboration. The new relationship is about bringing forward that trust on an incremental basis around reconciling the interests of aboriginal rights and those interests of the Crown.

           I would agree with the member's assertion.

           J. McIntyre (Deputy Chair): This may be looking at it in a different way, but I totally appreciate the Auditor General's comment in the beginning that this has been more time consuming and more costly than originally anticipated. We sort of discussed perhaps different reasons for that.

           I guess one of the questions to the Auditor General is: did you examine or contemplate examining the costs of not engaging in the treaty process? I know the figure of $1 billion was cited in the presentation, but that was way back in 1990 or something like that. I guess really the question is: would you clarify? Is there any contemplation that the costs would actually outweigh the benefits?

           A. van Iersel: As Mr. Jones said this morning, we did look at the original assessment of the costs of not having a treaty. That was only a minor part. The billion-dollar figure from PwC only refers, in my understanding, to one part of the B.C. economy. It has always been our understanding that the benefits from treaty settlements are potentially far greater than that, and that was an annual figure.

[0930]

           In our minds, we're not disputing that there are significant benefits from treaties. We wish to see treaties concluded as much as the participants themselves do, but we didn't do a detailed analysis in terms of the impacts. We didn't update anyone's review regarding the B.C. economy. We accept that having treaties is beneficial, but we didn't do any empirical work.

           R. Fleming (Chair): I have a question for our witnesses, which is around the report's discussion area on the breakthrough strategy. The Auditor General discussion on that section suggests that it really is a strategy that was born out of the fiscal core review of 2001-2002, and it was a strategy that concentrated on fewer negotiating tables — mainly, as a practical response to the reality that there were far fewer resources in the ministry to do anything, rather than as a deliberately crafted policy strategy.

           There's also some discussion in there about how that's been detrimental since 2001-2002. Another part of the criticism for the slowness of treaty negotiations was the effect of the mail-in referendum. So if I could maybe get a comment on that in the context of…. And have it come back to the funding, to see whether the Auditor General and the government are looking at the funding challenge and trying to get momentum again in the treaty process.

[ Page 265 ]

           Also, I think that since this report was issued, we have had one of the breakthrough tables to a full vote — the Lheidli T'enneh treaty. That has not been successful at this point. So I'm wondering if there is a re-evaluation of both the resources and the breakthrough strategy to try to get treaty negotiations in B.C. get momentum behind them.

           A. van Iersel: In effect, what you're speaking of relates to our second finding in the recommendations. We did say that there should be a reassessment of the negotiating strategy relative to focusing on just a few breakthrough tables. We also said that there needed to be, as was communicated by Mr. Jones, a review of the mandating process. We understand clearly the rationale behind breakthrough tables from a policy point of view in terms of trying to create precedents for others to follow, trying to focus your limited resources on a few tables, trying to get some breakthroughs.

           However, in our audit we found that that also has a negative consequence in regards to those that are not yet at the breakthrough level. As a result, there is a potential there to cause some further concern regarding the attention that's paid to the breakthrough tables versus the other tables and also with respect to the mandate discussions that might be happening in one case and are not necessarily going through to the other tables. So that is a concern when you focus on….

           Our recommendation to the ministry and to the government was that that needs to be reconsidered in terms of: have you got the right number of tables? Is it effective? How do you keep all the other parties interested and involved?

           We were hearing there was some frustration, by that particular strategy, from those that were not there. In regards to the motivation behind the breakthrough tables, it has always been our view that it was partly related to policy and also partly related to the restraint program of a number of years ago. That's in this report.

           The consequence of doing that — I really don't have a comment on in regards to what it would otherwise have been. But obviously, when you focus on a few tables as opposed to all of them, that may challenge the progress that you otherwise would like to make.

           L. Brownsey: What we're witnessing now in many of the negotiating tables is that the work that was done at the lead tables is now being used very extensively across the entire treaty front. As I said earlier in my comments to this committee, the motivation as I understood it was to seek opportunity. Despite your correct notation that at one of the breakthrough tables the vote was negative, we have nevertheless seen a growing interest in utilizing the work that was there. In fact, the ministry budget, recognizing that there is perhaps more opportunity to be realized, has increased this year to seek realization of that.

           R. Fleming (Chair): I just have one other short question, which is to do with recommendation 3. It's one, I think, of interest to this standing committee and others.

[0935]

           It is that the Auditor General suggested that the reporting to the Legislative Assembly on treaties is not adequate, it's not regular, and it's not robust in terms of the performance measures. There is a reporting of the number of agreements-in-principle compared to targets set by the ministry, but there is no full reporting on the status of other negotiations. There's no discussion of issues and challenges in the treaty process, and, I suppose, it deprives the Legislative Assembly members of regularly looking at efforts to overcome the barriers to success. This report suggests that there are many.

           I wonder if both the Auditor General and the ministry, subsequent to this report, have discussed how reporting might become more regular and more useful to MLAs and to the public.

           A. van Iersel: This is one of our recommendations — to look at the level of reporting and the type of reporting that's done by the ministry. It is my understanding that the ministry intends to do just that.

           To acknowledge what reporting there is, the B.C. Treaty Commission, as you heard earlier this morning, already does reporting on this, and the ministry does some reporting in its service plans. We think, though, that that reporting could be more robust in terms of keeping members of the Legislature more up to date in regards to the status of those negotiations, the issues that are being phased in the types of negotiations, what is happening there, and what efforts the ministry is making with regards to overcoming some of those issues and barriers to the process.

           We have to recognize, however, that there will be some information that does have to be protected in regards to the detailed negotiations, so we're not recommending that level of disclosure. But we think legislators would benefit from a better understanding of what the issues at the tables are, what efforts are being made to address them and what we can expect to see going forward.

           L. Brownsey: As I've already indicated to the committee, the ministry is looking at how to develop a more robust reporting, and we'd be happy to have further discussion with the office of the Auditor General on that.

           R. Fleming (Chair): Committee, I have four people on the speakers list, and we have about 12 minutes at the most to complete this section so we can vacate the room for estimates. I will go to first-time speakers.

           J. Rustad: It's good to know that we only have 12 minutes. I'll keep this quite brief.

           We've spent about $260 million on the treaty negotiation process since its beginning, if I remember those numbers correctly. To the Auditor General, the question I would have is…. We have been focused over the last number of years on trying to get some success with a smaller group of tables. That seems that's the government's focus — on trying to actually build some success to build upon.

[ Page 266 ]

           What do you think the difference might be, from a financial perspective? You can't speculate on whether it would be successful or not, but from a financial perspective, if that process had started from the beginning — if we had been focused, at the beginning of the treaty process, on trying to make some successes that we can build upon in the continuation of the treaty process as opposed to the shotgun approach of trying to do them all at once that was taken back when this process was started….

           A. van Iersel: Thank you for the question. Again, I'm going to go back to what I believe I said earlier today, which is that we do understand, in our office, the motivation behind the breakthrough tables in terms of trying to create those precedents.

           Our recommendation is more around: have we got the right number of participants at those breakthrough tables? Also, how do you keep all the others involved, in regard to those that aren't at those tables?

           It's not that we're recommending a shotgun approach. Our recommendation asks the ministry to revisit how the current process is going in terms of the breakthrough tables, how they're managed and how they could potentially be expanded. We're not recommending that we start negotiations in this area at all the tables, but it does mean that if anyone is excluded out of the core group, you need to find an effective way of keeping them engaged, informed and willing to go forward as those more central discussions happen, which goes back to another recommendation that we made in regards to mandates — that discussions and information about mandates be better communicated to all potential participants.

           This is not dealing with, as has already been noted today, the 30 percent by population or 40 percent by bands that are not in the process at all by their own choice.

[0940]

           J. Rustad: In terms of following up on that, the question I had was more around the fiscal perspective. If there had been focus as opposed to the approach that was taken, do you think there would have been less money spent, or do you think those dollars would have been more effectively spent — perhaps the better way to put it — in terms of trying to move this process forward?

           A. van Iersel: That's a very difficult question, Chair, that would cause me to make a certain number of assumptions that I couldn't do.

           R. Sultan: I am intrigued by the statement on page 26 of the Auditor General's report commenting on the evolving state of negotiations having not yet produced a signed treaty. A summary of what the Auditor General's team heard from the first nations representatives says, on negotiation funding: "Accumulation of higher negotiation loans than expected has become one of the greatest obstacles to progress in treaty negotiations. It puts first nations at a disadvantage since governments are not under pressure to close negotiations."

           With that perspective, I turn to the service plan of the ministry. I note that the total resources allocated go from $36 million in '06-07, $55 million in '07-08, $61 million in '08-09, and falling back to $49.5 million in '09-10. We see a 50-percent increase planned for next year and another 11-percent increase for the year following.

           I guess I have two questions. Do these resource summaries in the category under negotiations include the loans to first nations?

           L. Brownsey: No, they do not. The loans are between the first nations and the government of Canada.

           R. Sultan: I see. Thank you for that clarification.

           Do you have any further comment on their perspective on the impact of loans and, obviously, our rising resource commitment at least?

           L. Brownsey: I think the issue of debt is a very real issue for many first nations, as the negotiation process extends and loans have to be secured to enable the participation. There is, I think, a legitimate concern and risk that at some point the debt load will be sufficient that it will call into jeopardy the utility of the deal itself.

           G. Gentner: I want to address what's not in the AG's report. It briefly mentioned the notion of consultation or the lack of. But there's no mention here of the consultation with communities outside the first nations — municipalities and regional districts — the change of industrial taxes, loss of surrounding land, the lack of consultation with other first nations adjacent to settlement territories, the lack of consultation of the UBCM.

           Would the Auditor General like to comment?

           J. Rustad: I'm just wondering whether the question is relevant, given the topic that we're here to discuss. It's outside of the…. How do you discuss something that's not in the report as opposed to what's in the report? I just wanted to ask that in terms of a point of order.

           R. Fleming (Chair): Perhaps that was an unfortunate preamble, Mr. Gentner.

           G. Gentner: I'm asking the question: why isn't it in the report?

           R. Fleming (Chair): The question was around local government and it not being commented on, although I recall some references to it in the report. Do you have a comment to the member's question, Mr. van Iersel?

           A. van Iersel: We did look at whether there was consultation, but we did not specifically evaluate it.

           B. Ralston: One of the things that is mentioned in viii, described as the evolving context, is that as the treaty process has proceeded somewhat slowly, the number of interim agreements on various resource issues — for example, I believe there are about 130 or so forestry accords — has proceeded much more quickly.

[ Page 267 ]

           My question is to the deputy minister. What effort is there to ensure a relative consistency between these agreements, given that they impact upon the ultimate shape of a potential treaty? Some legal commentators…. I'm thinking particularly of a lawyer in Vancouver who specializes in this kind of negotiation, who has commented publicly that it's making the legal climate even more uncertain, because there is great disparity, or perceived disparity, between the richness or lack thereof of these interim measures.

[0945]

           That's the first question: what effort is the ministry making to ensure consistency between those agreements? The second question is: if there is inconsistency — and this is mentioned in the Auditor General's report — what is the likelihood that litigation becomes more attractive than treaty-making?

           L. Brownsey: Mr. Chair, Member, the interim agreements that you refer to, specifically the forestry agreements, are designed to reflect the particular nature of the first nations interest in their territory. There could be significant variation between the nature of the agreement as per the size of the community, as per the size of their territory and the level of resource exploitation, for example.

           We want to make sure that as we move forward on these interim agreements or any of the treaty agreements, we're not locking into a one-size-fits-all here. In fact, the courts have directed us that that is an inappropriate approach to take. Perhaps that answers the first part of your questions, and I have to confess I've forgotten the second element of your question. Perhaps you could remind me.

           B. Ralston: In viii, at the outset of the report, both audits noted that some court decisions may make litigation a more attractive option than negotiation.

           I'm wondering: in that evolving context where treaty-making and whatever it's undefined relationship with the new relationship is become increasingly unattractive, does that increase the likelihood that there will be further litigation as a way to resolve these disputes? In other words, we'll be back to basically pre-1990, where litigation was the only avenue of resolving these kinds of big questions about aboriginal title.

           L. Brownsey: I think you really highlight the importance of putting interim measures in place so that there is confidence and trust built up over time. That leaves negotiation and agreement as the most attractive option as opposed to litigation. In the absence of any agreement, I presume litigation becomes more attractive — hence, the need and the move towards interim measure in support of the long-term goal of treaty-making.

           R. Fleming (Chair): Members, we have come to the end of the time that we have possible for this. Normally, we would entertain a motion to adopt the report and its recommendations. I think we will want to have further discussion and deliberations on those recommendations at the next meeting of the Public Accounts Committee, so it would be appropriate to ask for a motion to adjourn debate at this time. Then we can return to a motion on the report and some final deliberations.

           G. Gentner: I'll so move.

           Motion approved.

           Interjection.

           R. Fleming (Chair): I think a motion would start a brand-new speakers list, and that would take some time. I don't want to curtail debate….

           Interjection.

           R. Fleming (Chair): Very well. Thank you very much to our witnesses this morning for being here and for presenting other perspectives on the report.

           We will very quickly move on to call Mr. Mitchell forward on the issue of retention and disposal applications from the public documents committee. Good morning, Mr. Mitchell.

[0950]

Records Retention and Disposal

           G. Mitchell: Good morning, Chair. Thank you for the opportunity to present the public documents findings. As you know, the committee, pursuant to its obligations under the Document Disposal Act, reviews all submissions for our recordkeeping retention schedules within the government and its agencies. My colleagues and I have reviewed 16 separate schedules, which we have presented to the Clerk's office for your review.

           I would like to highlight four areas that are quite significant. One is that within this collection of schedules, you will find a major streamlining of recordkeeping practices relating to the human resources component of the government. It's the first major rehaul of recordkeeping in that area in at least 20 years. I think it bodes well that both the central agencies and all of the ministries have participated in making changes across the board in a very consistent manner.

           The other is that there are several schedules relating to general housekeeping practices and cleanup, most significantly a review of how the legal discovery program in government is working, primarily for tobacco litigation. They streamlined that as well as some records retention for what we call non-primary-responsibility offices — i.e., for duplicate copies.

           Then we have seven new records schedules from agencies, which would include emergency health, police services, gaming, natural resource authorization processing and liquor distribution.

           I am prepared to answer your general questions on these, and I will take any specific questions under advisement and reply back to the Chair.

           R. Fleming (Chair): Thank you, Mr. Mitchell. Questions from members?

[ Page 268 ]

           R. Sultan: I would just like to ask a very general question. Are there any really severe crisis-level problems with record preservation today in the British Columbia government?

           G. Mitchell: As chair of the committee, we have received no indication of that. As your provincial archivist, I would say that electronic records…. As we discussed previously, we continue to build a solid framework for that. I believe we have that in hand.

           J. Rustad: I'm wondering — this is another pretty general question: in terms of archives, do you work closely with the library that we have in the building here, in terms of what may or may not be of an archived nature that should be necessary or should be looked at within the actual library facility?

           G. Mitchell: We have maintained a close relationship with the Legislative Library, from which, in the beginning, half of our library collection came. However, the two mandates of our repositories differ.

           We collect archival records and historical papers, whereas the Legislative Library collects records relating to governance and some of the history of the province that focuses mainly on servicing the members of the assembly. In that regard some of their materials may have import to the history of British Columbia, and we do discuss how we should protect those records. But with the two mandates, we have not consolidated our approach within the province to collecting government publications. They collect the majority. I collect those that come to us through the recordkeeping practices.

           R. Fleming (Chair): I would ask for a motion to adopt resolutions 1 through 16.

           A Voice: So moved.

           Motion approved.

           R. Fleming (Chair): We were going to try to provide an update on the Auditor General search. We will do that to committee members by e-mail. You should have received one yesterday, as well, telling you where your subcommittee is at in the process.

           Thank you very much, everyone. If I could have a motion to adjourn.

          The committee adjourned at 9:55 a.m.

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