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

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III. What we heard

lthough the period of time available to engage First Nations and others on regulatory options was short, we found the responses and input invaluable. Appendix D provides the dates and locations of the nine public hearings held across Canada.

Some of the issues that were raised touch on matters that might be regarded as outside our mandate, if it is narrowly defined as assessing options for regulating water quality on reserves. We feel, nonetheless, that they need to be mentioned because of the consistency with which they were raised across the country.

Finally, we discovered a great diversity of opinion on the subject of regulation – sometimes even within the same First Nation organization – through the hearings. We caution that the points that follow should be regarded as broad generalizations, even if they do fairly represent what we heard.

The obstacle is seen as inadequate resources, not lack of regulation

The most insistent theme we heard from First Nations was that the core problem was inadequacy of resources: mainly in terms of funding to run water and sewage systems, and in many places in terms of long waiting lists for capital funding. To a lesser degree, a shortage of trained people to run systems was a concern, as was the need for better understanding of water system governance at the Chief and Council level.

At the heart of this problem, of course, is the economic capacity of First Nations communities in general. While low or uncertain incomes are a characteristic of many small and remote communities in Canada, the situation is much worse, on average, among First Nations. In the longer term, greater economic capacity was seen as the best way of giving local communities the power to determine, themselves, how to organize and run their water and wastewater systems. In the places where this has already happened, the results, in terms of local capacity, sense of ownership and empowerment, are impressive. In the near term, however, the economic reality for most First Nations is that the current reliance on INAC must continue.

Under current policies, INAC funds 100% of the capital costs of water and wastewater projects, with the allocation process varying from region to region. In the case of water projects, public health risk is a key factor in making allocation decisions.

Once a system is running, INAC funds roughly 80% of the operating and maintenance (O&M) costs, with the community responsible for the remaining 20%. This is in line with INAC policy that it pays a percentage of the O&M costs of some assets, up to 100% in the case of schools.

While the O&M funding is generally based on a formula as opposed to actual costs, there is considerable variation across the country in how the base O&M amount for water and wastewater systems is calculated and even what percentage INAC provides.

The previous chapter provides details of the shortfall on the capital front. For communities, the impact is felt through rationing of capital funds and long development times for new projects or needed enhancements.

First Nations presenters also emphasized that for many communities, finding the funds to cover the portion of O&M not provided by INAC is a serious hardship. INAC, for its part, acknowledges that the funding formula may need updating. It has been topping up the O&M program through enhanced funding for operators (in large part to help communities meet a recent new INAC requirement that operators be certified).

In face of these funding shortfalls, a regulatory system was seen as secondary by many officials, both elected and technical staff, in the First Nations. There was a concern that the added bureaucracy and compliance costs would come at the expense of urgently needed operations and maintenance, capital and training dollars. Regional officials from both INAC and Health Canada tended to share this concern.

Funding arrangements do not always support the lowest life-cycle costs

The water treatment plant that is the least expensive to build may be the most expensive to run, and vice-versa, especially where the quality of the source water is poor. This puts a further strain on capital funding. An additional complication is that INAC pays all of the capital costs of systems, but only a portion of ongoing O&M costs. These factors open the door to the possibility of trading off lower initial costs for higher ongoing ones, which increases the cost of a system over its life cycle.

Whether a bias toward higher life-cycle costs has actually had an impact on funding decisions was hard to ascertain. We did hear these concerns from both First Nations and respected consultants in the water sector. On the other hand, we were impressed with the efforts of officials in some regions to maximize the value of scarce resources and get communities the plants they needed, even if this meant higher up-front costs. At the other extreme, part of the criticism coming from the Office of the Auditor General was that plants were built on occasion to a higher standard than needed.

The extent to which all of these outcomes, good or bad, seemed to depend on individual efforts and regional variation, as opposed to a clear departmental policy of minimizing lifecycle costs, was troubling.

Processes do not always support efficient and effective solutions

On the planning, budgeting and procurement front, there appear to be inconsistencies among regions and between the regions and headquarters that stand in the way of the most effective allocation of funds. As well, the need to ration capital and the perverse incentives built into the system tend to discourage parties from fully sharing information that might result in better solutions. There does not seem to be the capacity, in many instances, to get the greatest benefits possible from the procurement process, and work needs to be done to update tendering procedures. Institutional and economic barriers too often stand in the way of solutions such as regional consolidation or shared management services.

The rate of population growth in many First Nations is much higher than in the rest of Canadian society. This, combined with INAC policies for sizing systems, has resulted in some systems being undersized as soon as they are commissioned. Such stressed systems are difficult to operate safely. From an economic perspective, an unexpected increase in population can render a plant obsolete, and in need of costly upgrading, before the end of its planned service life.

All of this speaks to the need to improve business processes and planning, and to develop a more objective and efficient process for allocating funds. The goal should be to ensure that the lowest life-cycle costs, not lowest initial cost, and value for money are the criteria for decisions.

Capacity is growing

There has been much progress towards achieving consistently safe drinking water in First Nation communities, in most places by building local and regional First Nations capacity. Any new regulatory system – indeed, any new water initiative – must recognize, support and promote this progress. The key is to capture the best and seek to make it universal: sharing information, experiences and success stories would go a long way toward overcoming the regional variations in capacity that we perceived. This has already started, for example, among the circuit rider training groups, which recently held their first annual conference. Such gatherings and other ways of sharing knowledge should be encouraged and funded by the federal departments involved in the First Nations water sector.

Views about standards and regulatory frameworks differ considerably

Every regulatory framework has two distinct aspects: setting standards and enforcing them. In Canada, the water supply and sewage treatment of almost every community is regulated by a provincial or territorial government. Each province and territory has been involved in setting the Guidelines for Canadian Drinking Water Quality, and most use these to determine what is acceptable drinking water quality. They also cover other aspects of water safety in their legislation, and carry out enforcement of the entire water-quality regime.

We heard a wide variety of views in our hearings about both the standards to be adopted for First Nations and the regulatory authority that would provide enforcement:

• In some parts of the country – notably British Columbia – some technical and even elected officials stated that participating in the provincial regime and accepting provincial enforcement would be both achievable and appropriate.
• Other participants in the engagement process accepted the concept of the provincial requirements but not provincial enforcement.
• Some thought, at least in principle, that the federal government should cede jurisdiction and ownership and leave matters up to the individual First Nations.
• The remainder believed that only a national regime and national enforcement would be acceptable.

Among those who favoured a nation-wide enforcement framework, some made it clear that only a First Nations regime would be acceptable to them.

Those who focused on the shortage of resources expressed concern that any regulatory regime would simply create an additional strain on an under-funded sector at this point.

Enforcement would need to apply to all participants in the sector

The First Nations water sector comprises not just the First Nations that govern, manage and operate water systems, but also INAC, which makes funding (and by extension, design) decisions, Health Canada and other federal authorities.

We heard many examples, backed by third-party validation, of facilities that could not meet regulatory standards because the design did not meet current needs. In these instances, asking the local community to bear the costs of regulatory failure would be unfair and would not achieve safe drinking water.

It was the view of many presenters that all parties, including the federal government – whose honour and fiduciary obligations were at stake – needed to be regulated with the same hand.

Solutions will need community-level acceptance

Any regulatory scheme that fails to win community acceptance will not be successful or sustainable, regardless of funding. Major routes to acceptance will be through clear respect for customary law; by involving those who will be affected by decisions in the decisionmaking process; and by crafting solutions that can bridge to self-government.

At a more local and operational level, it is critical to establish and maintain pride in safe drinking water throughout communities. Training for Chief and Council on water issues, and their roles and responsibilities, is just starting to be explored in some regions and needs to be broadened and made consistent. Other measures that build respect for operators as key links in the public-health network, including adequate compensation, will also be useful.

Traditional attitudes towards water are holistic and spiritual

As we noted in the introduction, it is risky to treat First Nations as a homogeneous group. If there was one area, however, in which attitudes were widely shared, it was traditional beliefs and attitudes towards water. In addition to sustaining life itself, water was traditionally a means of transportation, or a source of food, or both, for every First Nation and remains central to the lives of many communities today.

The pervasiveness of this traditional view of the value of water and the related stewardship role for First Nations gave us a strong sense of how the goal of achieving safe drinking water on reserves should be pursued.

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