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Report of the Expert Panel on Safe Drinking Water for First Nations

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V. Regulatory options

With legal research and the results of the engagement process in hand, and having sketched out the elements of an effective regulatory regime, we now consider the options for regulating safe drinking water on reserves. It is imperative that any regulatory framework have a clear and unambiguous legal basis. There are in principle only four possible routes to creating a regulatory framework for First Nations:

• Existing provincial regimes could be used, as "laws of general application";
• Regulations might be passed by Orders in Council under existing federal statutes;
• Parliament could enact a new federal statute; or
• The government could defer to asserted First Nations jurisdiction and customary laws as a basis for a new statute.

Our conclusion, after legal analysis, is that the first two options are not workable.

Pursuing "laws of general application" is too uncertain

If it could be established that provincial laws of general application applied to Indian reserves, legal frameworks would be instantly in place and a great deal of consultative and Parliamentary process avoided. However, in the view of legal counsel to the panel, applying provincial drinking water and wastewater law as a law of general application is "fraught with such uncertainty that it is neither a viable nor effective option."

The reason for the uncertainty lies in the lack of a clear legal basis for determining when a provincial law applies to a First Nations member or organization. Section 91(24) of the Constitution Act, 1867 gives the federal government exclusive jurisdiction to make laws in relation to "Indians and lands reserved for Indians". This gives the federal government the power to make laws that apply to First Nations members, whether on or off reserve, and to reserve lands.

However, provincial law may apply to First Nations in one of two circumstances:

• The law does not relate to "Indianness;" or
• The law applies by virtue of Section 88 of the Indian Act, which applies provincial laws of general application to "Indians," subject to a number of exceptions.

Over the years a number of court cases have dealt with which elements of provincial authority apply to First Nations.

In the first circumstance described above, the courts have found that band council activities related to running local government form an integral part of primary federal jurisdiction over "Indians and lands reserved for the Indians" and that provincial laws do not therefore apply. Since water and wastewater provision is a band council responsibility, this suggests that it might be difficult to use provincial regimes as laws of general application to create a comprehensive regulatory framework for water. It is likely that control of lands and waters on reserve also goes to the heart of "Indianness."

Though some provinces have concluded that the orders of a provincial medical officer of health are enforceable on reserves, a regulatory scheme must address more than imminent public health risks.

The argument for laws of general application is that existing provincial laws and regulations have force on reserves, even though this has generally not been accepted with respect to water. It presumes the universal willingness of provinces to extend their services across the wide scope of water and wastewater regulation, a matter that cannot be taken for granted. Provinces have generally asserted that S. 91(24) frees them from any responsibilities, especially those involving costs or risks, for on-reserve matters.

As to the second, application by virtue of s. 88 of the Indian Act, there is also considerable uncertainty. Section 88 refers only to "Indians" and not to "lands reserved for the Indians." Applying provincial water regimes would certainly have an impact on reserve lands. The lower courts have found that s. 88 does not conclusively extend provincial laws to reserve lands. Legal scholars generally agree. The Supreme Court has never made a determination.

Finally, provincial water laws do not offer the same degree of authority or public health protection across the country, and in general do not cover all the areas mentioned in Chapter IV as essential elements of a modern First Nations regulatory regime.

In summary, the courts might or might not accept that all elements of provincial regulatory water regimes apply to First Nations by either of the permitted routes, provinces might or might not wish to apply them, and provincial laws would require modifications in any case to meet First Nations' needs. This does not provide a strong enough foundation for the creation of an effective regulatory regime.

Existing federal statutes are not equal to the task

While several existing federal acts relate to water and First Nations – the Canada Water Act, Canadian Environmental Protection Act, Department of Health Act, Department of Indian Affairs and Northern Development Act, the Fisheries Act, the Indian Act, the First Nations Land Management Act, and the First Nations Commercial and Industrial Development Act (which is not yet in force) – none provides an adequate platform for comprehensive regulation.

Of those listed, the Indian Act and the First Nations Land Management Act are the most specific in relation to water and public health matters. The Indian Act authorizes the federal Cabinet to make regulations to prevent the spread of communicable diseases or provide for sanitary conditions, and also allows First Nations to pass by-laws to regulate public wells, reservoirs, cisterns and other water supplies. One problem is that existing legislation does not provide for some of the elements of water regulation discussed in Chapter 4. Another problem is that enforcement is by way of extremely low fines or short prison terms only. There is no scope, on the one hand, for deterring serious violations or, on the other, for imposing culturally sensitive penalties. Finally, this mechanism provides no effective means for regulating the federal government partners.

For those First Nations that opt into it, the First Nations Land Management Act provides tools to manage their land and resources and the authority to provide local services and develop regulations to protect the environment. Here, the problem is that a First Nation must undertake the complicated, time-consuming and costly process of adopting a land code before passing water regulations. Another problem is that this act does not address the capacity gap that some First Nations face. To date, only 36 bands have opted into this act. None has passed a water regulation.

Pre-conditions: Provide resources, discuss and deal with high risks

Eliminating two of the initial options left us with three possibilities: new federal legislation setting out federal standards; new federal legislation referencing provincial standards; or the use of customary law.

Before analyzing these options, it is important to set out the conditions that would have to be in place for any of them to succeed.

The federal government must close the resource gap

First, and most critically, it is not credible to go forward with any regulatory regime without adequate capacity to satisfy the regulatory requirements. While it is tempting to assume that putting a regulatory regime in place would reduce the dangers associated with water systems, exactly the opposite might happen. This is because creating and enforcing a regulatory regime would take time, attention and money that might be better invested in systems, operators, management and governance.

But the problem is more fundamental than the resources that would be lost to creating a regulatory regime. The underlying issue is that federal government has never provided adequate funding to meet the 1977 policy commitment of comparable facilities on reserve and off. If funding were supplemented to cover only the costs of a regulatory regime, the gap would continue.

We therefore see it as a pre-condition to moving forward on any of the viable options that the federal government must finally close the resource gap. It must provide, over a reasonable period of time, the funding needed to ensure the quality of First Nations water and wastewater is at least as good as that in similar communities and that systems are properly run and maintained.

This could be achieved, for example, through a capital plan for the period 2007-2012 that would have the resources to bring all systems up to the intent of the 1977 policy. There would also be a need to provide the ongoing means to sustain effective operation and maintenance of systems.

This raises the question of whether this is the best time to go forward with a regulatory regime. Would it make more sense to first address the long-standing resource gap and the capacity-building needs of many communities, and put off for some years the creation of a regulatory framework? The sector would still have water-monitoring programs funded by Health Canada, as well as standards imposed by INAC through its funding agreements.

There are several drawbacks to this approach. Foremost among them is the need for an arm's-length regulatory body that through regular inspection and compliance work can ensure high standards of performance across the country. The objective view of resources and outcomes across the sector which Parliament could expect of a First Nations Water Commission would help to set priorities and gauge overall funding needs. Simply providing objective information across the sector would help avoid grievances based on perceptions of unfairness. Public health would be enhanced through systematically raising the performance of the systems in greatest difficulty.

As well, a properly designed regulatory regime could actually help build capacity. It is impossible to ignore the strong sense among many plant operators and technical staff of their willingness – even eagerness – to prove that their plants are run as well as, or better than, those anywhere else. Some technical staff have said that an inspection report, with the possibility of penalties, would help to better focus the attention of their Chief and Council on water issues. This underlines that while funding conditions provide some control, they fall far short of regular plant inspections.

Discussion with First Nations is essential

The second pre-condition is the need for the federal government to assess whether it has a legal duty to consult with First Nations affected by any of the three options. This duty, according to the Supreme Court,   [16] arises "when the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal right or title and contemplates conduct that might adversely affect it."

Apart from any legal duty, however, we believe that meaningful discussion between the federal government and First Nations is necessary if any action to improve the safety of water on reserves is to be effective and responsive.

Deal with high-risk communities immediately

Third, any of the options would take time – probably several years – to reach the ultimate goal of safer drinking water for all First Nations. In the meantime, however, many reserve residents face serious risks from the drinking water available to them, sometimes from collective systems but very often from individual wells or other water sources.

We heard of several of these through the engagement process, including Pikangikum in northwestern Ontario, Pabineau in New Brunswick and Kitcisakik in Quebec's La Vérendrye Park, the last of which does not rely even on wells but on taking lake water in pails. It is important to deal with these and other anomalous situations as soon as possible, which might entail Ministerial support for rapid action by the existing task teams currently struggling with these systems.

Once these urgent situations are dealt with, adjustments to current processes would be in order, including:

• adding individual systems, which represent a largely unknown but potentially large source of risk, to the federal risk assessment system, and acting to manage those risks;
• Investing in technology and support systems that allow remote monitoring of community systems; and
• Building stronger technical support networks and better governance capacity.

Such focused steps take into account the water-related risks for all First Nations residents, not just those on community systems, and respond to the root causes of many waterrelated problems. This will help to fix the most serious problems, lowering the over-all risks to First Nations residents, as quickly as possible.

Three potential routes

Having set out the pre-conditions that would need to be in place, what might each of the possible options look like? All three provide the advantage that action would not be confined to what is allowed under the Indian Act. From that starting point, this section first provides an overview of how new federal legislation might work, and the advantages and drawbacks of that general approach. It then looks in more detail at a key element of new legislation: whether this would reference existing provincial water regimes or would instead provide for federal standards and enforcement. It then analyzes the option of working from customary law. Finally, it compares each of these options in terms of timeliness, consistency, acceptability and other criteria.

New federal legislation: an overview

Creating a regulatory regime through new legislation would provide the opportunity to set out clearly the roles and responsibilities of all parties involved in providing water and wastewater services on reserves. The framework would provide for both an independent regulatory body and an appeals process.

It should be designed to give First Nations with differing capacities time to prepare for a formal regulatory regime.

The legislation and regulations should also set requirements for the construction, at a minimum, of individual systems, and should reflect the further work recommended in this report on the obligations of band councils and the federal government as, respectively, landlords and landowners where individual systems are concerned.

The preamble to the statute would make clear the intent to apply customary law in statutory interpretation wherever it was not inconsistent with the basic goals of the legislation.

For ease of administration, the act would be implemented uniformly wherever the necessary capacity to meet its requirements existed within an individual First Nation. There might be the possibility, however, for a one-way opting-in process for certain sections, starting with the roles and responsibilities of the players, operator certification, facility design and operating standards, and standards for drinking water quality. Either way, the legislation would have a strong enabling character.

The advantages of enacting new legislation:

• If executed properly, it would result in state-of-the-art regulation that would be fair, objective, effective and respectful of First Nations customary law.
• Through respect for customary law, it would provide a bridge to principles and practices ultimately defined by First Nations themselves.
• Its incorporation of customary law would also create a framework that would likely be attractive to self-governing First Nations.
• It would lead most quickly to the creation of a regulatory body that could, among other duties, provide an independent view of the resource commitments required of the federal government and other parties.
• A statutory basis for expenditures would strengthen the arguments of the Minister and department in government-wide allocation decisions.
• By providing greater certainty about regulatory standards and enforcement around water and wastewater, and helping to ensure adequate resources, it would put in place a pre-condition for many economic development opportunities.
• It would respond in the most immediate fashion to the criticisms of the Auditor-General.

The drawbacks of enacting new legislation:

• It would be subject to all the usual problems of drafting and tabling new legislation and seeing it through to passage, proclamation and the making of regulations.
• Although the quickest response to the criticisms of the Auditor General, it might not be the most direct route to safer drinking water.
• If executed improperly, it could do more harm than good by imposing more bureaucracy and more costs on a system already overburdened with both.
• The time and effort needed to consult, draw up legislation and implement the resulting framework could lead to loss of focus, conflicts of objective, or both. The process might take attention of all players away from critical infrastructure needs.
• Success would require strong continuing leadership, especially within the federal government, given its lead role in this option.
• There is a risk that by proceeding with legislation that incorporates customary law, it might be seen as a template for other issues relating to self-government.

A further concern is that financial authorities might mistakenly see this as a precedent for direct federal funding of other water responsibilities, such as in national parks or on military bases. These facilities, however, do not engage solemn fiduciary obligations.

Reference to provincial regimes or a new federal regime

New federal legislation would could either invoke provincial water-quality requirements by reference or set out a national framework of requirements.

There are other acts of the federal Parliament that impose provincial statutes by making reference to them. An example is the Indian Oil and Gas Act. Regulations under this statute, dealing with the exploitation of oil and gas resources on reserves, provide for the application of "all provincial laws applicable to non-Indian lands that relate to the environment or to the exploration for, or development, treatment, conservation or equitable production of, oil and gas and that are not in conflict with the Act or these Regulations."

Referencing provincial regimes could unequivocally impose provincial standards and requirements on First Nations water and wastewater systems on reserves. A related but different question is who would then enforce those requirements. This would no doubt be decided on a province-by-province basis: there may be some provinces that would want to take on this enforcement role, presumably on a cost-recovery basis, and others that would not; and there may also be some provinces in which First Nations would not wish to be subject to provincial enforcement. In these latter cases, the First Nations Water Commission would have a direct enforcement, as opposed to simply oversight, role.

Looking at both of these issues, referencing provincial regimes provides a number of advantages:

• It would use existing legislative infrastructure at the provincial level, in the form of detailed standards and requirements for most elements of a regulatory framework, rather than having to create such an infrastructure at the federal level.
• By virtue of relying on standards developed for different parts of the country, it would provide regional flexibility.
• Where provincial enforcement was accepted and provided, it might save on costs and capacity-building needs by extending existing arrangements and, more broadly, by widening the scope of cooperation and trust between provinces and First Nations.
• It would ensure uniformity between reserve and non-reserve communities, which is particularly useful in such matters as source protection and municipal service agreements.
• It would invite but not require provincial involvement.

Against this are a number of drawbacks:

• No provincial regime includes all the elements of good practice, outlined in Chapter IV, that First Nations will aim for.
• Provincial standards are not uniform across the country, and the existing regimes are at seriously different stages of completeness, quality and modernity, as they are mostly the products of historic accretion rather than systematic design.
• Elements of some provincial regimes may conflict with First Nations' selfgovernment objectives or with s. 35 rights.
• It may be difficult to set up provincial enforcement in many cases, for the reasons outlined above.
• While the preamble to the federal statute would set out the importance of customary law, it is not clear how this would work, in practice, where provincial requirements must be met – and even less clear how enforcement would mesh with customary law.
• Where provincial enforcement is used, it is unlikely to provide for culturally sensitive penalties.

The First Nations Water Commission would provide the means to mitigate some of these drawbacks. For example, it could have an important role where the second drawback is concerned, through ensuring that enforcement services were provided by a contracted organization or, if necessary, through its own offices. It might also be involved in helping provincial authorities and First Nations communities to adapt provincial regimes, to the extent possible, to customary law and traditional practices. This potentially larger and more complex role for the commission, however, speaks to the difficulties and uncertainties inherent in referencing provincial laws.

If instead the federal government opted for a new federal statute with uniform standards and national enforcement, the drawbacks of attempting to rely on provincial regimes would disappear. Instead of referencing provincial regimes, the legislation would, through its regulations, prescribe the elements of the regime described in the previous chapter, drawing wherever possible on the best practices outlined there. There are clear advantages to this route:

• It would provide the opportunity to draft a model statute that would raise the bar not just for First Nations but also for the nation as a whole. The federal government could provide a regulatory framework that was better than any now in existence, a matter of pride for First Nations and for the federal government in its presentation of Canada internationally.
• An integrated approach might well be less expensive than the piece-by-piece adoption of provincial standards.
• It might be more acceptable to First Nations. While support for either a provincial or federal regime was evident through the engagement process, those preferring the federal route were in general strongly opposed to being bound by a provincial regime. On the other hand, those favouring the use of provincial standards generally did so for reasons of convenience, not because they rejected the idea of a federal regime.

While there may be a concern that setting federal standards would reduce regional flexibility, there is no reason why these standards could not have built into them methods for dealing with the widely varying circumstances of First Nations across the country.

The downside, of course, is that the federal government could also be raising the bar for itself in respect of its other water management obligations in national parks, on military bases, and so on. But this would be true to a degree with any option, and is probably overdue anyway.

Start with customary law

The engagement process underscored the pervasiveness of a strong traditional stewardship role for First Nations where water is concerned. This option would respect and build on that role from the outset.

While it is impossible as well as inappropriate to set out in detail how this might proceed, it could begin with First Nations working together to develop a base of customary law upon which to construct a regulatory regime. The starting point might be to draw up common general principles through a Canada-wide process. The traditional views and practices of specific First Nations might then be woven in. The Elders' Councils of the AFN and other political organizations would likely have a central role in advising in these areas.

An analysis of the resulting base of customary law against relevant provincial, territorial and federal standards and legislation could then follow. The analysis could look for potential synergies, as well as conflicts, between customary law and that of other jurisdictions.

The next step – not a simple one – could be to determine how best to proceed from the body of customary law to detailed water-quality standards, operating procedures, operator certification needs and all the other elements of a modern regulatory regime.

The final step, to provide a clear legal basis, would be for the federal government to enact new legislation enshrining the regulatory framework developed by First Nations.

The advantages of starting with customary law:

• It should have the greatest likelihood of gaining widespread acceptance among First Nations.
• It is the approach that most immediately reflects greater autonomy, the value of customary law and the realities of increasing self-government.
• Actions would not be confined to what is allowed under the Indian Act.
• It responds to the criticism of the Auditor General by beginning a process that would ultimately result in a regulatory framework, even if more slowly than the previous option.
• It might ultimately result in the creation of a regulatory body that could provide an independent view of federal government's funding.

The drawbacks of starting with customary law:

• Creating the regulatory regime would depend on what might become a timeconsuming process of developing a base of customary law.
• As with the first option, there would be a risk of loss of focus or the need to address other urgent priorities, although in this case the risk would apply to First Nations, which would be leading the process.
• It is uncertain whether First Nations have both the capacity and the resources needed to handle this, along with their many other responsibilities.
• A greater dependence on customary law might make consistency with the regulatory regimes of neighbouring communities less likely.
• There is a risk of the federal partners in water quality stepping back from their responsibilities while First Nations worked out a regulatory approach.
• Getting from general principles and specific practices to the detailed, often highly technical needs, of an effective regulatory framework might be difficult and possibly contentious.

A variation on this option would be to recognize First Nations' jurisdiction over water from the outset. This was an approach advocated by the Assembly of First Nations of Quebec and Labrador. A possible first step would be for the federal government to cede jurisdiction and ownership of on-reserve streambeds, lands, and other water resources to First Nations by statute. It would then be up to First Nations to develop a regulatory framework that could have customary law as its basis.

The perceived advantage of this approach – that it would recognize First Nations' jurisdiction – is also the source of its major drawbacks. Each of Canada's hundreds of First Nations would gain jurisdiction over its own water resources before a regulatory framework was in place. While there might be a strong incentive for communities to work together on a regional basis to create regulation, as they do now on many other matters, there would be no assurance that this would happen. Timing and consistency would become far less certain, and locally developed frameworks could potentially run up against competing provincial rights.

There are further problems with ceding jurisdiction as an initial step. It would create a class of assets (water and wastewater systems) used in activities over which the federal government had no jurisdiction. This would further complicate the important issues of federal liability and fiduciary responsibility. It would significantly complicate funding arrangements. It would make the role of public health professionals more complex and might make it difficult to provide water system workers with occupational health and safety protection.

The intent of this option is valid, but in our view a better route would be to work on creating a framework under current jurisdictional arrangements. Then, as First Nations achieve self-government, there would be regulatory arrangements in place for water that recognized and reflected unique First Nations conditions and that they could choose to adopt. (And likely would: It is worth noting that all self-governing First Nations in the Yukon have chosen to be regulated by the territory's water regime instead of developing their own.)

Comparing the options

The table below compares each of the three viable options against four criteria: whether it would be equal to the demands of regulating a modern water system; how quickly it might be put in place; whether it would support national consistency; how acceptable it might be to First Nations; and how complex it would be to develop, administer and enforce.

	New statute,single regime	New statute, provincial regimes	Customary law, then statute
Provides all elements of a modern water regime			Uncertain
Achieves solution in a timely fashion		Uncertain	Uncertain
Assures consistency across Canada
Minimizes complexity to develop & administer
Minimizes complexity to develop & administer

The analysis shows that both a new federal statute creating a single water regime, and using customary law, are reasonably strong options across the board. The major proviso regarding customary law is uncertainty, both in terms of how to get to a comprehensive modern water regime, and how long the process might take. Enacting federal legislation that would reference existing provincial regimes appears to be a weaker option owing to gaps and variations in those regimes, the complexity of involving another level of government, and lower acceptability to many First Nations.

Whatever route is taken, improve processes now

Both a regulatory regime and the funding needed to close the existing resource gap – which is a pre-condition to any of the three options – must be seen as only two elements in a broader strategy to improve water management and public health.

Other elements would include greater efforts to build and use capacity and to make better use of existing resources. All players – First Nations, their political organizations, federal departments and provinces, potential private providers of capital and services, and First Nations' technical and health organizations – need to work together in a formal, ongoing framework to find solutions to the resource problems.

The federal government and First Nations partners should take steps to pare away bureaucracy, collaborate with provinces on tri-partite harmonization, and both simplify and update procurement procedures. Over time, First Nations should take on an increasing share of the activities directly related to planning, procuring and gaining approval for plants.

As well, the federal government and First Nations need to act to provide proper assurance that systems serving individual houses (or a small number of connections) are, at a minimum, built to acceptable standards, while working to better understand and deal with federal and band responsibilities for these after they are built.

Conclusion

Ensuring safe drinking water involves much more than setting standards and requirements. In some ways, this is the least important aspect of water system safety. The really critical element is the capacity of facilities and operations to meet the standards. Safe systems are built on the dedication of operators, the support they get from system managers and owners, the professionalism and integrity of consultants and contractors, and understanding by everyone – from builders and designers through to the final consumers – of what is needed to make and keep water safe. Each of these elements depends on human and economic resources.

Through even a brief engagement process, the dedication, even passion, of many of those working in the First Nations water sector was very clear. This included both technical and elected officials in First Nations and umbrella organizations, as well as many of the federal officials who work with them. It also extended to many of the private sector companies who help to design systems and get them built. Clearly, the human capacity has been established in many places and it is growing.

Of course, on-the-ground challenges remain, in the form of councils that do not give water issues as high a priority as system operators feel they need, or systems with high staff turnover, or water monitors who may not be as diligent as protocols require. But these problems are well-known among First Nations participants: indeed, it was precisely these people who would raise them at the hearings – and then hasten to explain what they were doing to solve them.

The problem that none but a few exceptional communities has been able to solve, however, is that of economic resources. The ultimate solution will come when First Nations across Canada develop the capacity to control their own economic destiny. In the meantime, however, they must continue to look to the federal government to meet basic needs. In the area of water and wastewater systems, resources have not been adequate, and the resources made available have not always been used as effectively as they could be.

Since 1996, spending on water and wastewater systems on reserves has ramped up considerably. The time has come for one last big push. After this, capital spending can ease back to the levels necessary to meet new standards, accommodate population growth, and maintain the existing stock. The spending should be seen as an investment – not just in healthier First Nations communities, but in trained workers and the kinds of business activity that depend on safe, high-quality infrastructure.

This investment will also yield dividends by supporting the development of a comprehensive and modern regulatory framework, to support the goal that people living in a First Nations community benefit from the same level of protection as those living in any other community. To be effective, the framework must:

• help to achieve the most efficient funding arrangements;
• be binding on all of the parties involved in the First Nations water sector, including the federal government;
• be based on best practices from within Canada and other jurisdictions for setting standards and requirements;
• provide for appeals against orders and decisions, and investigation of complaints;
• encourage the sharing of information and success stories within the sector to build capacity, and with the broader community, both on and off reserve, to build trust; and
• use information, inspection and enforcement sensibly, as tools to improve performance rather than to penalize those lacking the capacity to perform.

This report offers three possible routes to achieving these ends. It will now be up to the Minister of Indian Affairs and Northern Development, working with First Nations and other partners in the water sector, to determine how to move forward. In closing this report, we reach back to its opening: may these discussions and the action arising from them help to achieve the gains for human life and the natural environment that follow from uniting wisdom and technology.

Footnotes

16. Haida Nation v. British Columbia (Minister of Forests), [2004] 3 S.C.R. 511 (S.C.C.) at para. 35.(return to source paragraph)

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