Doug Cuthand, The Leader-Post Published: Monday, April 30, 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 the latest budget. The document warns the minister of the damage that a two-per-cent cap on First Nations' funding has created, including the cumulative effect that is seriously impacting the health and safety of First Nations people. The internal memo outlines the shortfall and the need to respond with a budget increase consisting of a $500- million, one-time payment and a $50-million increase annually thereafter. Budget increases for Indian Affairs were frozen at two per cent annually in 1997. The rate of population and price increases has increased four per cent annually for the same period. Indian Affairs receives an annual budget of about $6 billion or, as the report points out, four per cent of total federal expenditures. The result of this budget freeze is that certain statutory budget items have grown in size and because of the budget cap they have had to come from other budget items. For example, in 2005, tuition agreements with provincial schools increased $100 million. This is a statutory item and must be paid. In order to pay this increase and others, non-statutory items such as capital and housing were decreased with $334 million coming from capital and $81 million from housing. The report also mentions that First Nations have coped with the shortfall by limiting growth in various areas, including First Nations' staff salaries and benefits. Nothing was mentioned about the salaries and benefits of Indian Affairs' staff. However it is pointed out later in the report's appendices that First Nations' employee benefits are funded at 12.5 per cent compared with 20 per cent for Indian Affairs' employees. The memo warns the minister that the price of maintaining the cap includes: The erosion of on-reserve infrastructure, health and safety issues, risk of legal exposure and the inability to maintain provincial standards. Only 23 per cent of the budget is "discretionary," which means that it can be allocated to different budget 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, programs that are "transformative" or designed to improve socio-economic disparities such as post-secondary education, housing and economic development are considered discretionary and are being cut back. This means that the department budget is becoming basic maintenance and not developmental. The report states that the Northern Affairs branch of the department 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 new 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 required in First Nations communities. By reallocating funds the following has resulted: Capital is down $293 million, housing is down $81 million, income assistance is down $51 million and post-secondary education is down $31 million. This is a sad reflection of how a people have to bear the brunt of funding cutbacks at a time when there have been 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 what the sorry state of First Nations' finances are. When the folks at the colonial office get worried, then we know we are in real trouble. The attachments to the report are dated Feb. 2, although the report itself isn't dated. I spoke to Diedrea McCracken, the minister's spin doctor, and she told me this was an old document presented to the minister when he took over the portfolio. If this is the case, then two budgets have been presented and the minister still hasn't acted on his officials' advice. In any event, the advice given from the report for a one-time increase of $500 million and regular annual increments of $50 million were not followed in the current year budget. - Cuthand is a Saskatoon freelance journalist. © The Leader-Post (Regina) 2007 |