In this, the second biennial report of the Cree-Naskapi Commission, we review implementation of the Cree-Naskapi (of Quebec) Act¹ since our last report to Parliament in March, 1987.

In our last report, we noted the significance of the Cree-Naskapi (of Quebec) Act as a milestone for Indian self-government². The Act is the first comprehensive attempt to realize Indian aspirations of political autonomy at the community level. The Act and the two agreements which gave rise to it create a new political relationship between the Cree and Naskapi on the one hand and the Government of Canada and the Government of Quebec on the other.

With the Cree-Naskapi (of Quebec) Act, the Cree, the Naskapi and the Government of Canada accepted the challenge of liberating aboriginal people from the Indian Act as a basis of local administration. The demands of this challenge were clearly described by Chief Ted Moses of the Eastmain Band to the Cree-Naskapi Commission's 1988 Special Hearings on Implementation of the Cree-Naskapi (of Quebec) Act:

Self-Government is the will of the people to take charge of their own destiny and manage the affairs of their society in order that they may prosper in a safe and healthy environment now and in the future. It requires from the people, confidence, commitment and hope in a better future. To those charged with making it work, it requires all of that plus dedication and perseverance. To those charged with assisting in its development, particularly its main sponsor, the federal government, it requires understanding, support and diplomacy. It has to do with people and their aspirations.³

This challenge is not an easy one. It is made more difficult by the necessarily complex nature of the Cree-Naskapi (of Quebec) Act and of the issues to which it gives rise. It requires a commitment of resources as well as goodwill. It is, however, a challenge of great importance. It has implications not just for the Cree and the Naskapi, but for all of Canada's aboriginal people.

Because the Cree-Naskapi (of Quebec) Act carries important implications for Canada's aboriginal people, a fair and objective assessment of it is crucial. Judging the Act both in terms of the provisions it contains and in terms of how it has been implemented is very difficult. Providing such an assessment is not within the mandate of this Commission and therefore not the purpose of this report. Our purpose here is to report factually on implementation of the Act: to describe the measures that have been taken, to analyze the difficulties that have been encountered, and to make recommendations as to how implementation can be made more effective. By this process of describing, clarifying andmonitoring, we seek to provide a basis so that those who must judge the Act can do so in a more informed and reasoned way.

THE NATURE OF THE CREE-NASKAPI (OF QUEBEC) ACT

The Cree-Naskapi (of Quebec) Act is the outcome of two agreements, the James Bay and Northern Quebec Agreement⁴ and the Northeastern Quebec Agreement⁵. According to these two agreements⁶, the purpose of the Act is to provide an orderly and efficient system of self-government for the Cree and Naskapi communities within specified geographical territories and legal parameters.

As one might expect, the Cree-Naskapi (of Quebec) Act is complex. Its complexities, however, go beyond its more than 200 sections of wide ranging subject matter. They extend to its constitutional nature, the legal concepts it embodies and its tripartite governmental structure. Identifying these features is important to any appreciation of the Act and to an understanding of why its implementation has not been easy.

The Cree-Naskapi (of Quebec) Act can be seen as the local constitution of the eight Cree communities and one Naskapi community to which it applies. As such, it designates the bands as the principal entities to which all other matters pertain⁷. It then goes on to establish the elements of self-government: legislatures and executives⁸, the electoral process for choosing legislators and leaders⁹, and the scope of local lawmaking authority^l0. It also determines that the Act and laws passed under it take precedence over any conflicting federal or provincial laws¹¹.

A legal concept key to the Cree-Naskapi (of Quebec) Act is that of a corporate entity. In Canadian law, a corporation is an entity which is distinct and separate from those who create it. Thus, the Federal Parliament through the Cree-Naskapi (of Quebec) Act establishes the Cree communities and the Naskapi community as corporate entities¹² over and above their members' legal existences as individual persons. It also determines many of their corporate features, it outlines the conditions of band membership¹³, the objects of bands¹⁴ and their powers, rights and privileges as natural persons¹⁵. The Act provides for the administration of each band corporation: it establishes head offices¹⁶, band councils and chief executive officers. It outlines the conduct of council meetings. The Act also deals with numerous other corporation type matters: the rules and regulations governing elections, annual meetings and special meetings; the engagement of agents, officers and employees of the band; as well as financial administration, audits and borrowing powers¹⁷.

A second legal concept key to the Act is that of rights. The Act determines rights of various types. Some are group rights such as those governing the use and benefit of lands for the community as a whole¹⁸ or a band's interest in minerals and resources¹⁹. Others are individual rights such as the right to vote²⁰ or rightsof residence²¹. Some rights, such as those pertaining to successions, flow from traditions or customary law²²; others, such as those dealing with taxation and seizures, are established by legislation²³.

Finally, there is the tripartite governmental structure of the Act. Three levels of government are recognized in the Act and each plays a critical role in its implementation. The Cree and Naskapi governments are the principal regimes to which the Act is directed. But the provincial and federal governments also bear key responsibilities and obligations. For each level of government, the Act presents special difficulties. For the Cree and the Naskapi, adapting to the Act's legal principles and concepts is obviously an involved process. The federal and provincial governments, on the other hand, must accommodate Cree and Naskapi customs, traditions and history which are barely mentioned in the Act. Further complicating the interaction of the three levels of government are the James Bay and Northern Quebec Agreement and the Northeastern Quebec Agreement. These agreements contain many measures which have a direct bearing on the implementation of the Act. They are at the centre of a number of disputes which have arisen between the Cree and the Naskapi and the federal government.

IMPLICATIONS OF THE CREE-NASKAPI (OF QUEBEC) ACT

Because it is the first self-government legislation in Canada, the Cree-Naskapi (of Quebec) Act has important implications for other aboriginal peoples who wish to exercise self-government. Some of these implications are legal. Interpretations of the Act create important precedents as, for example, in legal cases where the powers of the Cree and Naskapi governments are pitted against the rights of individuals. Similarly, questions concerning application to the Cree-Naskapi (of Quebec) Act of section 35, the treaty and aboriginal rights provision, of the Constitution Act, 1982, have great significance. Other implications relate to matters such as financing or the scope of local governmental powers.

The most far reaching implication of the Act, however, is the success of its implementation: the degree to which self-government along the lines of the Cree-Naskapi (of Quebec) Act can work. On the basis of implementation to date, two points are obvious.

The first is that implementation of self-government can be marred by public disputes and skirmishes. Unfortunately, this is the case with implementation of the Cree-Naskapi (of Quebec) Act. Both the federal government and the Crees have been intent on winning public support for their positions. The federal government, especially, has been aggressive in promoting its position. At times, it appears that federal officials spend more time devising the public relations strategies than they do dealing with the substantive issues. Naturally, the Cree respond by vigorously promoting their position. The result has been strained relations between the parties and a public concerned about the process of implementing land claims agreements. Certainly, such difficulties in implementation discourage other people across Canada in their work on the development of self-government.

The second is that self-government is a costly venture. In preparing our report, we were constantly made aware of the financial resources needed by the Cree and the Naskapi to establish viable, self-governing communities. Housing, roads, water, sewage, administration buildings and equipment, a land registry system, court facilities and police, salaries and training for personnel are all very costly. For most Canadians, these necessities are already in place and funding for their continuation is secure. For the Cree and the Naskapi, and for other aboriginal people, this is not the case. Clearly, a first consideration of any self-government arrangement must be securing the financial resources to pay for it. For some aboriginal peoples, this will be a practical matter; for others it will be a matter of treaty or aboriginal rights.

COMPENSATION MONIES

Of concern to the Commission, in this context, is a widely held misconception that the Cree and Naskapi should pay for these needs using the compensation monies they received under the two Agreements. Suggestions that the "Cree are rich" or that "the Naskapi have money" and that public funding of their activities should be curtailed are ill-founded and must be answered. The compensation monies paid to the Cree and the Naskapi nations were for granting permission to construct one massive hydro-electric project on their territory. The Cree and Naskapi did not give up their entitlement to the benefits received by all Canadians, by all Quebecers or by other Indians. This point is seldom made.

To restore perspective to discussions of Cree and Naskapi entitlement to government programs, we outline as an example the arrangements for those compensation monies transferred to the Cree under the Agreements.

The Cree and Inuit signed the James Bay and Northern Quebec Agreement with federal and provincial governments and with provincial crown corporations. As payment for the use of their lands to build the massive James Bay Hydro-Electric Development Project and for the disruption caused to their traditional way of life, the Cree and Inuit received $225 million. In addition, they received recognition of hunting, fishing and trapping rights, a land regime, self-government and a range of other rights relating to matters such as education and health.

Because there were a number of signatories to the Agreement, it was necessary to outline prior to the signing precisely who would be responsible for paying the $225 Million, how the money would be divided between the Cree and the Inuit and when payments would be made.

Overall, the Cree share of the $225 Million is $136,625,450. This money is payable over twenty years in accordance with schedules set out in the Agreement. As of March 31,1988, the Cree have received $106,988,756. As for who makes payments, the $225 million is divided into three equal parts:

• The first $75 Million is paid jointly by the governments of Quebec and Canada. Of this amount, Canada pays 43.667%, or $32,750,000. The Cree share of the first $75 million is $44,605,225. Of this amount, Canada is required to pay the Cree $19,477,764 over a period of ten years. This has been paid so that Canada has fulfilled that part of its obligations.

• The second $75 Million is paid by the James Bay Energy Corporation. The Cree share is $44,605,225. This amount is paid based on the installed generating capacity of hydro-electric generating stations built in the territory north of the 49th parallel. The total amount is to be paid over a period ending on December 31, 1996.

• The third $75 Million is paid by the Government of Quebec. The Cree share is $44,605,225. These amounts are to be paid over a four year period by the Province of Quebec debentures in the years 1975, 1976, 1977, 1978 and 1979. These mature in twenty years from November 1, 1975, 1976, 1977, 1978 and 1979 respectively.

The management and investment of this money is prescribed by provincial legislation, an Act Respecting the Cree Regional Authority²⁴. Under this act, a Board of Compensation exercises all rights and powers of the Cree Regional Authority for that portion of the compensation moneys received by the Cree.

The Board of Compensation was composed of twenty-two members. Up to October 31, 1987, two members were appointed by the Government of Quebec and one member was appointed by the Minister of Indian Affairs and Northern Development.

A number of restrictions are placed on the use of the compensation money. Of the compensation received, pursuant to section 25.1, 75% must be invested in bonds, debentures or other forms of securities until October 31, 1987. This percentage declines to 50% from November 1, 1987 to October 31, 1997. Furthermore, compensation money must be used for the benefit of the Cree community as a whole and not for the personal benefit of individual Cree beneficiaries. Audited financial statements must be filed annually with the Minister of Indian Affairs and Northern Development for the first twenty fiscal years of the Cree Regional Authority.

Of the compensation money received to date, the Cree have discretion to disburse only twenty-five percent. In practice, they have reinvested 100% of the capital and used only the interest for disbursements. This is made clear in the financial statements of the Cree Regional Authority filed with the Minister²⁵. The Cree recognize that it is essential to place limits on expenditures so that the capital portion of the compensation fund is not jeopardized. For this reason, the Board of Compensation has established, through by-law, a policy outlining procedures for disbursement of a percentage of the interest earned from the compensation monies²⁶.

More recently, the La Grande (1986) Agreement, signed between the Cree and Hydro Quebec, allows Hydro-Quebec to construct and operate additions to the Complexe La Grande (1975) Project. These additions include the La Grande I Project (1986), the La Grande 2A Project, the Brisay Project and the RND (Radisson - Nicolet - Des Cantons Direct Current Transmission Line) Project. As compensation for the impact these additions will have on the Cree bands and the Cree way of life, Hydro-Quebec has agreed to pay $110 Million to the Cree. A separate amount of $2 Million was paid to the Grand Council of the Crees (of Quebec) for costs incurred during negotiations.

Payment under the La Grande Agreement is made in two forms: $95 Million in two series of Hydro Quebec bonds, which mature in 1996 and 2006, and $15 Million in cash. The $15 Million cash is to be paid on the date that Hydro-Quebec awards a contract for work on the RND and LG 2A projects or thirty days after Certificates of Authorization for the two projects have been issued under the Environmental Quality Act²⁷. The La Grande (1986) Agreement provides for creation of the James Bay Eeyou Corporation to manage the funds set out in the agreement and to make disbursements according to a Cree Inter-Band Treaty²⁸. The James Bay Eeyou Corporation has adopted a disbursement policy to manage the compensation money received under the agreement.

In considering the monies transferred to the Cree under these agreements, it is important to note that according to the James Bay and Northern Quebec Agreement, and according to the preamble to the Cree-Naskapi (of Quebec) Act,²⁹ the Cree continue to be entitled to the rights and benefits of all other citizens and of all other Indians of Canada. In recent years, the Board of Compensation has made numerous financial contributions in areas such as housing and infrastructure, community development, socio-economic development and has supported local and regional organizations. Cree financial statements clearly demonstrate that compensation money has been used to meet what the Cree regard as obligations of the Government of Canada.

MANDATE OF THE CREE-NASKAPI COMMISSION

The Cree-Naskapi Commission was established by the Cree-Naskapi (of Quebec) Act as an independent body to monitor the implementation of self-government under the Act³⁰. The Commission is the first such body in Canada. With some pride, the Commission believes that it has demonstrated modest successes in carrying out its task. But it has also been impeded in its work by its own limitations. These limitations arise largely from the fact that its mandate is restricted to matters enumerated in the Act. Indeed, this mandate so limits the Commission that it cannot examine issuesdirectly related to the James Bay and Northern Quebec Agreement and the Northeastern Quebec Agreement, except to the extent that they are related to the implementation of the Act. This limited mandate diminishes the Commission's effectiveness.

Issues of health and education are a case in point. Because health and education are dealt with under the Agreements and under provincial legislation and are not addressed in the Cree-Naskapi (of Quebec) Act, the Commission cannot deal with them. According to Chief Walter Hughboy of the Wemindji Band, there have been instances where problems concerning the jurisdictions and responsibilities of Cree bands and the Cree Health Board could have benefitted from examination by the Commission^3l. Similarly, the Cree School Board in its report to the Special Implementation Hearings asked the Commission "to ensure that performance of obligations by Canada for education services are carried out...."³² Because education is not addressed in the Act, the Commission has been unable to respond in these situations.

The Commission believes there is evidence to warrant both an extended term and an expanded mandate for its work. This was a common theme in every presentation to the 1988 Special Implementation Hearings. The Grand Chief of the Cree, Matthew Coon-Come, stated:

We would like to see the Commission take a more vigorous role in the implementation of self-government. As a neutral body, with the ability to walk in both camps, the Commission is unique in being in the position to facilitate contact between the Crees and both the provincial and federal governments.³³

Speaking of an extended term for the Commission, Chief Walter Hughboy of the Wemindji Band stated that a Commission which holds the Cree councils accountable may be needed for the next decade. Such a Commission, he said, could provide guidance and act as an ombudsman on Cree affairs.³⁴ Chief Henry Mianscum of the Mistissini Band³⁵ and Chief Abel Kitchen of the Waswanipi Band also called for an extension beyond the five years provided in the Act. Chief Kitchen said: "I wanted to state for the record that it is my hope that this forum will continue for the immediate future, in light of all the unresolved issues relating to the Cree-Naskapi (of Quebec) Act."³⁶

Calls for an expanded mandate for the Commission included that of Chief Ted Moses of Eastmain who asked that the Commission's mandate be expanded to include both the James Bay and Northern Quebec Agreement and the relationship between the federal and Cree governments. He pointed out that "the James Bay Agreement has many fundamental aspects of self-government that are not necessarily written in the Cree-Naskapi (of Quebec) Act."³⁷ Chief Mianscum of the Mistissini Band stated: "We also would like to see the Commission be mandated to review the James Bay and Northern Quebec Agreement. As you know, probably 70% of that Agreement hasn't been implemented."³⁸ John Mameamskum of the Naskapi Band praised the Commission for the way it has utilized its investigative powers. He also favoured "a wider mandate for the Commission under the Cree-Naskapi (of Quebec) Act so that it could take up its own investigations and issue reports which could facilitate the implementation of the Act and bring about improvements to it."³⁹ Other calls for change were more sweeping. Philip Awashish of the Grand Council of the Crees (of Quebec) asked that the mandate include all matters directly affecting self-government such as education, health and social services. "They are cornerstones to self-government and self-determination and are essential parts of the regime established by the James Bay and Northern Quebec Agreement and support the principles of the Cree-Naskapi (of Quebec) Act."⁴⁰

Presenters also recommended an expansion of the Commission's reporting procedures and powers. Grand Chief Matthew Coon-Come called for the Commission to report to a Standing Committee of the House of Commons. Parliament should refer the Commission's biennial report to a Standing Committee, he said, and the Commissioners should be invited before that Committee to answer questions on it.⁴¹ Philip Awashish said:

We see that, if the report of the Commission can be forwarded to a Standing Committee for review or presentation, the Commission itself certainly should have a role in it. We don't particularly see the Commission reporting to a Standing Committee itself, as it reports to Parliament, but the Parliament itself must be able to deal with all its report more effectively through Standing Committees. We certainly do hope that the Standing Committee will consider in the future reports from the Commission because we are disappointed in the manner that the report itself was dealt with through the whole Parliamentary process.⁴²

Finally, Chief Billy Diamond of Waskaganish asked that the Commission mandate and powers be expanded to include the power to call witnesses. "The Commission should have the authority to call witnesses and should have the authority to subpoena documentation from various departments involved in the implementation of the Cree-Naskapi Legislation."⁴³

The Cree-Naskapi Commission itself has no reluctance in assuming an expanded role to help facilitate the task of implementation of the Cree-Naskapi (of Quebec) Act. The Commission feels that its restricted monitoring and reporting mandate does not allow it to take a more active and useful role in promoting implementation. That the Commission can be effective in such an expanded capacity has been demonstrated by recent events. In March, 1988, at the request of the Honourable William McKnight, Minister of Indian Affairs and Northern Development, and Cree Grand Chief, Matthew Coon-Come, the Chairman of the Cree-Naskapi Commission, Mr. Justice Rejean F. Paul, supported by Cree-Naskapi Commission staff, served as an interimmediator in the negotiations over a number of difficult issues concerning a question of Cree beneficiaries, the funding of past capital, and operations and maintenance costs, and the instatement of the Ouje-Bougoumou Cree as a band under the Act. The success of these negotiations supports the view that the Commission can take a much more active role in securing a satisfactory implementation of the Act.

In 1986, we reported on major issues involved in implementation of the Cree-Naskapi (of Quebec) Act. In reviewing implementation two years later, we find that many issues are yet unresolved. Still, there have been substantial advances - particularly with respect to financial disagreements - and it is important to record this progress.

ACCOMMODATING TO SELFGOVERNMENT

We noted in 1986, the Cree and the Naskapi were having difficulties in accommodating to Cree-Naskapi (of Quebec) Act self-government. These difficulties arose largely from their unfamiliarity with the new systems.⁴⁴ As a result, they approached self-government carefully. In 1988, to some extent, we find that this unfamiliarity and caution persist. Chief Robbie Dick of the Whapmagoostui Band noted the problem and its possible consequences:

The general band membership is not fully apprised of the changes from the Indian Act system to the Cree-Naskapi (of Quebec) Act. It comes as no surprise since the majority of our members were born into the Indian Act system and that is what they had been accustomed to, but, of course [they] never fully accepted it. The changes are so great as to render confusion in the community as to who has authority and what roles the Band Council and Administration have under the Act. If this situation continues it can only give rise to community dissention and frustration in growth.⁴⁵

Clearly, band members require more detailed explanations of the Cree-Naskapi (of Quebec) Act than have been available to date.

According to the Cree and the Naskapi, the federal government too has had difficulties adapting to the new system. For instance, Chief Abel Kitchen of the Waswanipi Band, said:

The Department of Indian Affairs and Northern Development continues to send us information on changes to the Indian Act, with no explanation how this relates to the Cree-Naskapi (of Quebec) Act. We have no problems with changes if it improves the Indian Act. The civil servants do not seem to be aware of the difference between the Indian Act and the Cree-Naskapi (of Quebec) Act and are not oriented to dealing with the dynamics of the Cree-Naskapi (of Quebec) Act.⁴⁶

As well, Grand Chief Coon-Come spoke to the Special Implementation Hearings of the federal government's resistance to self-government. The federal government, he said, has not yet established a proper way of dealing with Cree self-government "and has still not provided the resources or mechanisms which would permit the Crees to implement self-government as provided for in the James Bay and Northern Quebec Agreement and the Cree-Naskapi (of Quebec) Act."⁴⁷ Chief Ted Moses of Eastmain put the matter more sharply:

The Agreement and Cree-Naskapi (of Quebec) Act are like a marriage contract, a promise of an endless productive relationship. It seems that the Government or certain elements in the Department take the view that this is a divorce contract. How can any negotiation process work with such diametrically opposed view-points.⁴⁸

In this context, the Cree and the Naskapi continue to ask, as they did in 1986,⁴⁹ for changes in the structure of the federal government to deal with the Cree-Naskapi (of Quebec) Act and the Agreements. Chief Ted Moses of Eastmain told the Special Hearings that changes are needed to improve Cree-Canada relations. He asked for the removal of all self-government responsibilities from the Department of Indian Affairs and Northern Development. "There are simply too many vested interests," he said, "in the old ways on the one hand and emerging new policies about theoretical self-government arrangements on the other hand. The Cree-Naskapi (of Quebec) Act is continually caught in a cross fire between the two."⁵⁰ Chief Henry Mianscum of Mistissini said that both a federal and a provincial office should be established to deal with all Cree files. Such offices would help ensure that action on Cree requests for programs and services was taken⁵¹ Chief George Wapachee of the Nemaska Band said that Canada lacks the policy and structure to deal with the Cree-Naskapi (of Quebec) Act because it has experience only in dealing with the Indian Act. "The government has not made any effort to adjust or adapt to the Cree-Naskapi (of Quebec) Act, rather their response has been to ignore the Act and their responsibilities under it;..."⁵² Chief Abel Kitchen of the Waswanipi Band called for sweeping reforms in the federal structure, particularly in the Department of Indian Affairs and Northern Development. He said that his people view the federal government, through the Department of Indian Affairs and Northern Development, as a protector or trustee for native people. In light of this, he stated that the federal government must redefine its mission with respect to the Cree and Naskapi of Quebec. The Chief continued, " we feel that Indian self-government; the power to govern themselves, and a government-to-government relationship is one answer. This will imply the reduction or disappearance of Indian and Northern Affairs."⁵³

TRAINING AND PERSONNEL

In 1986, we noted that training personnel for the new roles required to operate local governments was a major problem for the. bands⁵⁴.Presentations to the 1988 Special Hearings indicate that this problem continues. Prior to the signing of the Agreements and passage of the Act, the federal government had done little to prepare the Cree and the Naskapi for their new responsibilities and duties. Following passage of the Act, the federal government's administrative support through the Indian Act system was almost immediately phased out. To fill this gap, local communities had to look elsewhere for training and support to equip local personnel with the skills for administering community affairs. While most communities appear to have made progress in this area, much remains to be done.⁵⁵

Many bands reporting to the Special Hearings cited their lack of the financial resources to provide such training as the source of the problem. In most communities, education and training are already major expenditures. While bands reported that their people are using their limited training resources effectively,⁵⁶ there are two significant demands that need to be met. The first demand is for training of new staff. To date, training has been directed only to those people who inherited responsibilities or were hired as a result of implementation of the Act. Currently, however, communities are functioning with insufficient staff and training is required to fill new positions. Thus, funds to train new staff were a common request. The second demand is for training of young people. By providing training for local employment and responsibilities, bands hope to keep young people in their communities. Retaining young people this way, they feel, will contribute to the growth and prosperity of the community. The Commission believes that the development of community-oriented training and skills development programs would be a significant measure. It would provide relief for over burdened band training budgets, address immediate needs for new staff and provide promise for the future.

A PROCESS OF MEDIATION AND NEGOTIATION

From the signing of the two Agreements and passage of the Cree-Naskapi (of Quebec) Act, the Cree and Naskapi have pursued the implementation of self-government with determination. Critical to this implementation has been the provision of federal funding so that their governments can provide programs and services at the local level. As we reported in 1986, the Cree and the Naskapi expected that the federal governments would provide adequate funds to meet community needs. This expectation was based largely on a financial agreement known as "the Statement of Understanding" signed with the federal governments in 1984. Since 1984, however, relations between the federal government and the native governments have been plagued by disputes over the interpretation of the Agreements, the level of financing necessary for implementing local government and the reluctance of the federal government to honour its commitments under the Statement of Understanding. At times, these disputes have overshadowed all other relationships between the governments.

In our 1986 report, we identified the need for a mechanism of implementation and recommended the appointment of a Special Representative of the Prime Minister's Office as a key element of this mechanism. This representative was to have direct access to the Prime Minister and the Cabinet. As a consequence of this access, the Special Representative would possess a government-wide mandate to represent Canada's interests in dealing with the Cree and Naskapi. Furthermore, we suggested that this representative not be an official of the Department of Indian Affairs and Northern Development.⁵⁷

In June 1987, the Honourable Bill McKnight, the then Minister of Indian Affairs and Northern Development, appointed Mr. Andrew Croll to negotiate with the 17,000 Cree, Inuit and Naskapi beneficiaries of the James Bay and Northern Quebec Agreement and the Northeastern Quebec Agreement. Mr. Croll was to work towards finding workable solutions to the issues between Canada and the other signatories to the Agreements (including Hydro-Quebec and the Government of Quebec). In making the appointment, the Minister stated: "The benefits provided to date have resulted in significant improvement in the standard of living of the native communities affected through the construction of housing, health facilities, schools and the provision of municipal and social services." He noted that the responsibility for administering these services has been transferred to the native populations since the agreements were signed in 1975 and 1978 and concluded that he was "hopeful that the government's commitment to finalizing this historic agreement will result in an early and fair resolution of any problems in the implementation of Canada's first, moderm native land claim agreement."⁵⁸ In March,1988, with the agreement of the Cree, the federal government appointed Justice Rejean F. Paul, Chairman of the Cree-Naskapi Commission, as interim mediator.

A supplementary presentation tabled by federal officials at the Special Implementation Hearings specifically noted that the appointment of Mr. Croll and the establishment of a mediation-negotiation process are a direct response to the recommendation for an implementation mechanism in our 1986 report.⁵⁹ In his appearance at the Special Hearings, Mr. Croll was more precise in describing his role in this initiative. He said:

Who does speak for all of Canada on these important matters? Well, to draw a road map, the Cabinet of Canada is responsible for the implementation of these Agreements. The Cabinet has assigned this responsibility to Cabinet Minister McKnight who is responsible for all of Canada for these responsibilities. And Minister McKnight has assigned to me the direct responsibility to continue negotiations on the Government's behalf. There are sixteen agencies and departments that are involved in the delivery of the James say and Northern Quebec Agreement and I want to tell you that I speak for, on behalf of all of the sixteen departments and agencies that deliver funding and services to the native people.⁶⁰

In entering negotiations following this initiative, the Grand Council of the Crees (of Quebec) identified four priorities: beneficiary lists, operations and maintenance funding, capital funding and recognition of the Ouje-Bougoumou Cree. We will deal with the first three of these issues in this chapter. Because of its complexity, we will deal with recognition of the Ouje-Bougoumou Cree separately in the chapter which follows.

THE BENEFICIARIES ISSUE

The beneficiaries issue centres on the federal government's use of Indian Act membership lists instead of the list of beneficiaries under the Cree-Naskapi (of Quebec) Act for making financial allocations for federal programs and services. Such use of Indian Act lists has a significant effect on the amounts a band receives. As Chief Ted Moses pointed out, "approximately 10% or 40 people in Eastmain are recognized as beneficiaries and are, therefore, band members. But they are not registered as status-Indians according to the Department."⁶¹ Chief George Wapachee indicated a similar effect for the Nemaska Band . He stated that the Indian Act list contains the names of 229 members, whereas there are 400 beneficiaries under the Cree-Naskapi (of Quebec) Act in his community.⁶²

The Cree bands have consistently pointed out that this practice denies them funding to which they are entitled. At the Special Implementation Hearings, the Cree-Naskapi Commission gave its assurance that it would work hard to ensure that "federal authorities accept the point of view that a Cree beneficiary is a Cree beneficiary and not differentiate band members in a list somewhere in the Department of Indian Affairs."⁶³ Following negotiations on this point during the mediation-negotiation process, federal officials conceded that the choice of lists does make a difference to the level of funding awarded. They agreed that, in future, the beneficiary lists will be used to make decisions.

Despite the resolution of this dispute, the Commission believes the issue of beneficiaries may still cause problems in the future and that the next occasion may not invite such quick resolution. The potential for future dispute lies in section 5 of the Cree-Naskapi (of Quebec) Act which suggests that Indian Act lists of the Cree and Naskapi may be of some significance.⁶⁴ While it is not clear that such a situation will arise, we believe that if it does, beneficiary lists and not Indian Act lists should be applied in determining government obligations to the Cree and Naskapi. Relations between the Cree and Naskapi and the federal government are now determined largely through the Agreements, and under the Agreements the beneficiary is the unit that identifies Cree or Naskapi individuals. Furthermore, under the Agreements, the collective unit, the band, is identified as an entity made up of beneficiaries, not Indian Act Indians. Therefore, the beneficiary is the primary entity to whom individual rights pertain. The beneficiary also defines the collective unit which governments must acknowledge in carrying out their obligations.

In addition to such legal issues concerning lists, there is a more practical matter which requires attention. it appears that band lists, whether maintained locally or by the federal government, are not strictly kept. In addition to this need for accurate and up to date lists is the problem of individuals who while residing in one community appear on the list of another.These needs to standardize the beneficiaries registration system and to take into account residence are real and urgent.

OPERATIONS AND MAINTENANCE FUNDING:
THE STATEMENT OF UNDERSTANDING

In our 1986 report, we described in detail a dispute surrounding a financial agreement entitled "the Statement of Understanding."⁶⁵ The Statement of Understanding was negotiated by the Cree and the Naskapi and the federal government prior to passage of the Cree-Naskapi (of Quebec) Act. It was to transfer operations and maintenance funds from the federal government to the band corporations so that the Cree and Naskapi could implement the new Act. The Statement was signed on August 9, 1984, by the then Minister of Indian Affairs and Northern Development, the Honourable Douglas Frith; by former Grand Chief of the Crees, Mr. Billy Diamond; and by Chief Joe Guanish of the Naskapi Band. For the Cree and the Naskapi, the statement was a critical precondition of their supporting the proposed Cree-Naskapi (of Quebec) Act. As we described in 1986, the central issue surrounding the Statement of Understanding was whether or not it was binding on the Government of Canada. The Cree and Naskapi were always convinced that it was. The Department on the other hand took the position that because the statement never received Treasury Board approval, it was not. In a letter to Grand Chief Ted Moses, dated October 23, 1986, the Honourable Bill McKnight, Minister of Indian Affairs and Northern Development stated:

Your advisors know and, I hope, will have informed you that the Memorandum (the Statement of Understanding) is not viewed by the Government of Canada as a legal obligation but we have, to the maximum extent possible used it as a guideline in our financial relations.⁶⁶

In our 1986 report, we stated that we believe that the Statement was binding and that the federal government should act in accordance with it.⁶⁷ As Grand Chief Coon-Come, stated to the 1988 Special Hearings:

We need not remind the Commission that in its Report of March of 1987, [i.e the 1986 Report of the Cree-Naskapi Commission] the Commission essentially concluded that the Government of Canada had acted wrongly in regard to funding arrangements with the Crees, both as a matter of law and as a matter of equity.

The Commission basically upheld the Cree position that there should be a formula based on the elements contained in the Statement of Understanding, that payments should be made immediately to the Crees to relieve the hardships and that the Government should negotiate in good faith the terms of an agreement respecting the funding formula and revenue shortfalls.⁶⁸

Christopher Napash of the Chisasibi Band explained to the Special Hearings that the Statement of Understanding comes closestto reflecting the actual costs of running a local administration.⁶⁹ In its statement to the Hearings, the Grand Council of the Crees (of Quebec) explained the importance of the Statement of Understanding to Cree acceptance of the Cree-Naskapi (of Quebec) Act.

Planning for all aspects of Cree local government has been rooted in the assumption that funding would be forthcoming which would enable the band managers to discharge their functions and responsibilities, exercise their powers and provide band members with the essential programs and services described in the Cree-Naskapi (of Quebec) Act. This was the principal mandate given to the group which drafted the Statement of Understanding.⁷⁰

Mr. Andrew Croll, the Federal Negotiator, told the Hearings that he found the Cree concerns "completely justified" with respect to the Statement of Understanding. He said:

The Commission's report also expressed concern about the way the Government was dealing with questions of the Statement of Understanding and the annual funding formula for the Cree and I have to admit that when I looked at this situation, I found that many of the Cree concerns were completely justified and as a result, one of my first tasks was to prepare, what I believe, is a reasonable proposal to the Government on this issue and this proposal has now been presented to the Cree negotiators.⁷¹

In March, 1987, in pursuit of a remedy on the Statement of Understanding, the Cree initiated court proceedings to sue the federal government for over $40 million. During the period under dispute, the federal government continued to transfer up to $12 million per year to Cree governments. The Cree took the position that under the Statement of Understanding Canada owed them additional costs averaging about $4 million per year. The monies they sought were to finance self-government in their communities. In July, 1988, as part of the negotiations started in March, 1988, with Justice Paul acting as interim mediator, an agreement was reached. Central to the agreement was a $16,939,775 cash settlement. The specific terms under the agreement include the following:

• The Cree Regional Authority and eight local Cree governments received nearly $14 million to support self-government under the Cree-Naskapi (of Quebec) Act.

• Prior to this settlement, the Cree received $2.9 million to settle a dispute with Canada involving adjustments to four years of transfer payments which had been used by the Cree to offset costs of municipal services such as fire protection, public health, road maintenance, and maintenance of public buildings and facilities.

• The Cree acknowledged that the payments involved in the agreement would constitute final settlement of all past, present or future claims against the federal government with respect to operations and maintenance funding for the period, April 1, 1984 to March 31, 1989.

• The Cree were to file in court a discontinuance of the suit and each party was to pay its own costs.

• The Cree and the Government of Canada agreed to negotiate a five-year financial agreement to cover operations and maintenance funding for the period, April 1, 1989 to March 31, 1994. This agreement would supersede any other arrangements between the governments for operations and maintenance funding for this period. Should an agreement on this five-year funding arrangement not be reached in a timely fashion, the then Minister of Indian Affairs and Northern Development, Mr. McKnight, outlined the arrangements which will be in effect until an agreement is reached.

Negotiations on the new five-year funding agreement are expected to follow.

The Statement of Understanding has been the subject of difficult negotiations for over four years. During that time, failure to agree on the Statement has been a major impediment to successful implementation of the Cree-Naskapi (of Quebec) Act and a source of strained relations between the native and federal governments. The July, 1988 agreement now resolves the issue for the initial five year period between 1984-1989 and, as Chief Cree Negotiator, Roderick Pachano noted, will help to re-establish a "relationship of trust and co-operation between the Crees and the Government of Canada."⁷² The lessons learned from this experience are important for any future self-government arrangements: financial arrangements - must be settled in advance of implementation and must be clearly articulated in the implementing legislation or self-government legislation.

CAPITAL FUNDING

With respect to capital funding, a dispute has arisen between the Cree governments and the Department of Indian Affairs and Northern Development involving more than $15 million.The dispute centres on capital allocations made by the Department to the Cree bands in 1987-88 and 1988-89. Under contention are three issues:

1. the Department's use of Indian Act membership lists in determining allocations.

2. the deduction of education capital funds from the allocations; and

3. the deduction from allocations of costs incurred by the Department in providing electricity to certain Cree bands.

Negotiations on these issues have taken place, off and on, since March 30, 1988. As we reported above,⁷³ the first issue, the use of Indian Act membership lists, has been resolved.

In their position, the Cree state the following:

1. The Department's use of Indian Act lists rather than beneficiary lists to determine allocations is depriving the Cree of about $1 million per year. The Cree point out that this practice ignores Canada's obligations under the James Bay and Northern Quebec Agreement and that a 1985 Treasury Board decision provides "sufficient authority for [the Department] to recognize the beneficiary population in their calculations."⁷⁴ They also point out that the Department's allocations are based only on resident individuals and do not include groups living off Category IA lands while waiting for housing.

2. The Department is deducting close to $3 million from Cree allocations to pay obligations to the Government of Quebec which funds the Cree School Board. The Cree claim that this is not in accordance with the terms of educational provisions in the James Bay and Northern Quebec Agreement nor with past departmental practice. They cite a letter signed by Assistant Deputy Ministers John Tait and Donald K. Goodwin on January 25, 1983 which confirms "proposed funding for housing and infrastructure without reference to education capital funding."⁷⁵

3. The Cree say that the Department deducted $290,000 in 1987-88 and is proposing to deduct $559,000 in 1988-89 from capital allocations to cover costs of electricity provided to some bands. This electricity must be provided, the Cree claim, because Canada has failed to carry out provisions of an electricity agreement between Canada, Quebec, and Hydro Quebec. They say that these amounts should be borne by the Department and not charged to the Cree. The Cree also claim that Canada, in disregard of the Wemindji Electricity Transfer Agreement⁷⁶ which states that Cree funding would not be affected, is charging an additional $350,000 per year to the Cree capital allocation.

The federal government's position as stated by its negotiator Andrew Croll⁷⁷ is as follows:

1. Canada and the Cree have agreed that any allocation should be made on the basis of beneficiaries.

2. The Cree received a special allocation for the years 1982 to 1989. This allocation provided them with housing, infrastructure, and education capital. Since the Department of Indian Affairs and Northern Development was dealing with a special situation, it created a separate region for the Cree in 1987. According to Mr. Croll, the Department does not intend to exercise any discretion within this region. It intends to transfer all the funds allocated to the region directly to the Cree Regional Authority.

   The capital allocation for the Cree includes an amount for education, which in other regions is discretionary depending on need. During the past five years, approximately 40 per cent of the non-residential capital allocated to other Indian bands has been spent for education. In the beneficiary based capital allocation of $24,152,422 to the Cree, there is a notional $6,278,000 which is available for education. This is 40 per cent of the beneficiary based non-residential capital allocation of $ 15,695,000.

   According to Mr. Croll, the Cree contend that they are entitled to the same allocation as other Indians and that this allocation contain a similar portion for education. The Cree also claim, he says, that they are entitled to an additional allocation for education. If the Department were to agree with the Cree, Mr. Croll contends, the Cree would receive twice as much for education as other Indian bands. For the Cree to ask for such additional education capital, he says, is "double counting." "Canada will not do this."

3. The Wemindji Electricity Agreement provides for payments to the Wemindji Band of $1,100,000 per year. For this amount, Wemindji provides power to the Band. Included in the amount is $350,000 for electricity capital. Capital for electricity is also included in the general capital allocation that the Cree receive every year. Mr. Croll states, however, that Canada is not going to pay for the same thing twice. There are two ways to correct this, he says. Either reduce the payment under the Wemindji Electricity Agreement by $350,000 or reduce the overall Cree capital allocation by $350,000. Since Wemindji has a specific agreement requiring a payment of $1,100,000, the Department has reduced the general Cree capital allocation by this amount. Not to do so, he says, would again be double counting.

The Commission is presently considering a complaint by the Cree on matters concerning capital contributions. It is therefore inappropriate for us to make any specific comments on these issues at this time. Suffice it to say the issues are not simple. Much historical and background information must be considered to even begin to appreciate the precise nature of the dispute and to make determinations on a just and fair resolution.

NASKAPI NEGOTIATIONS

Capital funding and operations and maintenance funding are pressing issues for the Naskapi as well. On April 21, 1988, the federal government appointed Harold Ashenmil as the mediator on issues arising from the Northeastern Quebec Agreement. On March 9, 1989, it was announced that an agreement-in-principle sets out the following:

• Canada develops with the Naskapi an implementation structure and process that ensures continued compliance with the Northeastern Quebec Agreement and provides for the resolution of future disputes.

• Canada makes a one time ex-gratia payment of $1,516,000.00.

• Canada provides operations and maintenance funding of $1,259,888 for the next five years starting in 1989-90, and adjusts this base year amount annually according to Treasury Board approved indices.

• Canada provides capital funding of $836,000 for the next five years starting in 1989-90 and adjusts this base year amount annually according to Treasury Board approved indices.

• Canada agrees to negotiate a further five year capital funding agreement on the expiry of the five year capital funding agreement referred to immediately above.

The Ouje-Bougoumou Cree are a group of approximately 350 people who live in the Chapais-Chibougamau region of Northern Quebec. Prior to the signing of the James Bay and Northern Quebec Agreement, the Ouje-Bougoumou have sought recognition as a distinct Cree band. Since 1984, they have been negotiating to be instated as the ninth Cree band under the Cree-Naskapi (of Quebec) Act. In March, 1988, these negotiations, which involve the Ouje-Bougoumou, the Government of Canada, the Government of Quebec, Quebec Hydro and the Grand Council of the Crees (of Quebec), became part of the mediation-negotiation process with Mr. Justice Paul acting as interim mediator.

The attainment of band status under the Cree-Naskapi (of Quebec) Act is an urgent matter for the Ouje-Bougoumou Cree. Because they have no legitimate band status, the Ouje-Bougoumou have no reserve. As a result, regular programs and services of the Department of Indian and Northern Affairs are not available to them. Since the 1940's, their community has been displaced several times by mining and forestry developments. Currently, they live in what have been described as "deplorable" conditions.⁷⁸ They lack education and health facilities and are in serious risk of an epidemic. There have been outbreaks of tuberculosis.⁷⁹

In their presentation to the Special Implementation Hearings, the Ouje-Bougoumou pointed out that although they are nominally beneficiaries of the James Bay and Northern Quebec Agreement, their benefits under the Agreement and the Cree-Naskapi (of Quebec) Act have been minimal. They claimed that "many of the people who choose to reside 'off reserve' do so for a variety of very legitimate reasons, and making these choices should not severely jeopardize their standard of living...."⁸⁰ Beneficiaries should not be denied rights and services, they said, if they do not live on Category lA lands. They continued: "The case of the Ouje-Bougoumou Cree is perhaps the most extreme example of the paradox of being a beneficiary of an Agreement to whom few benefits have been extended."^8l The Ouje-Bougoumou Cree said they look forward to the day when they are declared the ninth Cree band and when construction begins on the development of their new community.⁸² Only then will they be able to take full adv antage of the self-governing powers of the Cree-Naskapi (of Quebec) Act.

It is important to understand the crucial roles that must be played by the Government of Quebec and the Government of Canada in the recognition of the Ouje-Bougoumou Cree as a band. Quebec must set aside Category I lands from Mistissini Band lands and allocate funds for education and health under the James Bay and Northern Quebec Agreement. From Canada must come recognition of the Ouje-Bougoumou as a band, amendments to the Cree-Naskapi (of Quebec) Act and allocation of funds for establishing the Ouje-Bougoumou community.

THE ROLE OF THE QUEBEC GOVERNMENT

In November 1985, responding to repeated requests by the Ouje-Bougoumou Cree for federal recognition, the Minister of Indian Affairs and Northern Development, David Crombie, wrote to the Quebec Government and asked it to set aside Category I lands from the Mistissini Band lands. Recently, great progress was made. In a letter to Chief Abel Bosum of the Ouje-Bougoumou, dated September 14, 1988, the Honourable Raymond Savoie, the Quebec Minister of Native Affairs, stated that the Quebec Government had approved the principle of granting the Cree of Ouje-Bougoumou some 167 km2 of Category I lands and some 2145 km2 of Category II lands north of Lake Opemisca and of subtracting these lands from the lands of the Mistissini Band.⁸³ In a letter of the same date, Mr. Savoie informed the then federal minister of Indian Affairs and Northern Development, the Honourable Bill McKnight, of the land transfer to the Ouje-Bougoumou Cree. He said that Quebec accepted the principle of transferring to the Ouje-Bougoumou Cree the Category I and Category Il lands and that it was now up to Canada to officially recognize the ninth Cree band of Quebec and implement a process to establish the new village. Mr. Savoie went on to say that Quebec was ready to contribute "financially to setting up this village on the basis of what it has so far done for the other Cree villages, that is 25% of the construction costs for the school and the teachers' residences and 100% of the construction costs for the dispensary and the residences for nursing staff."⁸⁴

As a result of Quebec's initiatives, Mr. Bentley Mianscum, speaking on behalf of the Ouje-Bougoumou Cree, was able to report to the Special Implementation Hearings that the Ouje-Bougoumou had successfully reached an agreement with the province on the issue of selection of a site for the new community and the configurations of the various categories of land. As for the federal government, however, Mr. Mianscum said that while the government seems willing to recognize the Ouje-Bougoumou as a band, "it has done very little to give substance to those expressions." He continued, "Nor has it provided much in the way of resources to assist us in preparing ourselves for either the negotiations or for the actual work related to the construction of the community."⁸⁵

THE POSITION OF THE FEDERAL GOVERNMENT

The position of the federal government, as of November 3, 1988, with respect to its role in the instatement of the Ouje-Bougoumou Cree was stated in a letter from the Federal Negotiator, Andrew Croll, to Mr. Roderick Pachano, Chief Cree Negotiator for the Grand Council of the Crees (of Quebec). Under the federal proposal, Canada offers, as expeditiously as possible, to create a new Ouje-Bougoumou Cree band under the Cree-Naskapi (of Quebec) Act and to pay $300,000 towards the cost of a site study for a new community. This will be done on condition that these actions do not create any obligations on the part of Canada to make further capital contributions. In addition, it agrees that as soon as the interim land transfer for the community is complete, Canada will make an interim contribution of $10,000,000 to the capital cost of the new community. Any further contribution from Canada to the capital cost of the new community will be from existing Cree capital program funding and will be adjusted to include the increased beneficiary population resulting from creation of the Ouje-Bougoumou community. The federal position also states that the new Ouje-Bougoumou band will have the same rights and obligations under the James Bay and Northern Quebec Agreement and the Cree-Naskapi (of Quebec) Act as the other eight James Bay Cree bands and that the Cree must agree that Canada has discharged all its past, present and future obligations with respect to recognition of the Ouje-Bougoumou band and the construction of its community.⁸⁶ This offer was refused by the Cree.

DISAGREEMENTS OVER THE FEDERAL POSITION

The federal government's position as stated above is at the centre of two serious disagreements.

The first disagreement concerns the government's refusal to cover the full cost of the site study. In his role as interim mediator, Judge Paul has in a letter, dated November 22, 1988, to Mr. Croll stated the estimated cost of the study will be well over $675,000. With respect to the federal government's agreement to pay only $300,000 of the study, Judge Paul points out that federal authorities had promised to pay for the study in its entirety, including an assessment of environmental repercussions.⁸⁷ Here Judge Paul cites a letter, dated July 26, 1985, from Mr. Bruce Rawson, former Deputy Minister of Indian Affairs and Northern Development, to Mr. Eric Gourdeau, Assistant Secretary General of the Executive Counsel of SAGMAI (Secretariat des Activites Gouvernementales en Milieu Amerindien et Inuit).

The concept of establishing a distinct Cree Band of Chibougamau on Category I lands in the James Bay area received an important stimulus when your Prime Minister wrote to Chief Abel Bosum on April 10th saying that Quebec was ready to approve the transfer of lands. My Minister and Mr. Levesque agreed in April 1985, when they met in Toronto regarding aboriginal rights, that it was time to recognize this band. The Honourable Mr. Crombie said the same thing before the Standing Committee of the House of Commons on Indian Affairs and Northern Development on May 21 st, 1985. My representatives have had a few preliminary exchanges with the Crees and started to consider the necessary amendments to the James Bay Agreement and to the Cree-Naskapi (of Quebec) Act, and to other legislative and federal documents, for the establishment of a new Cree Band. We will also provide financing for a site study (including an assessment of environmental repercussions) to help the Crees of Chibougamau select a site for their new community. and to determine the configurations of the construction.⁸⁸(Emphasis added)

The second and far more crucial disagreement arises from the fact that the federal government insists that costs of establishing the new community be shared on a three part basis. In press documents issued on November 4, 1988, the government states: "Canada has already offered the other parties to finance one third of the costs of establishing the new community, to a maximum of $8 Million."⁸⁹ In a back-grounder released at the same time, the government clarifies: "The parties with financial obligations to the Ouje-Bougoumous are the Government of Quebec, Hydro-Quebec and the Grand Council of the Crees (of Quebec)."⁹⁰ In addition, according to the Cree, the government insists that this financial dispute be settled before it grants band status to the Ouje-Bougoumou Cree. In replying to the government's position as stated in Mr. Croll's letter of November 3, 1988, Roderick Pachano writes:

Since the Quebec Cabinet decision of August 31, 1988, you have attempted, on behalf of Canada, to make formal recognition of the Band conditional upon an agreement as to the financing of the new Cree Community and you have attempted to treat the financing question in a manner different from the financing of the other eight Cree Bands of Quebec.⁹¹

Here Judge Paul, acting as interim mediator, has argued that there has never been any suggestion that the cost of establishing the Ouje-Bougoumou community be shared or that financial arrangements for establishing the community must be settled before the Band is recognized. In response to a position taken by Mr. Croll during negotiations that the Cree had an obligation to use some of their compensation monies to establish the new community for the Ouje-Bougoumou, Judge Paul stated "[as] a matter of principle, the Federal Authorities (or anyone else except the Crees themselves) have not a word to say about how the Crees should use or do not use their compensation money."⁹² Judge Paul continues:

During the negotiations, there was an openness on the part of the Provincial Authorities and the Crees to discuss and, to a certain extent, enter into negotiations over the financing of the construction of the new Ouje-Bougoumou Village, providing that there is a legal recognition of the Ouje-Bougoumou Band. This legal recognition was never tied to an agreement on the costs that Canada, Quebec, Hydro-Quebec, the Crees and any other parties should share in this construction process. The position put forward at the negotiations sessions by Andrew Croll that costs be shared in thirds by the province, non-government entities and the Crees was immediately challenged by everyone present...⁹³

The Judge's position in the mediation-negotiation process is clear: the federal government must recognize this ninth Cree Band immediately, without condition, before negotiations on the financing of the new village begin. The amendments to the Cree-Naskapi (of Quebec) Act, he said, should be ready. The former Minister of Indian Affairs and Northern Development, Mr. Crombie, stated clearly that his officials were working on these matters as early as 1985. In a letter to the Honourable Pierre Marc Johnson, Premier of Quebec, dated November 14th, 1985, Mr. Crombie states:

My officials are already in the process of amending the Act revising the federal financing conditions. Without doubt, in the months to come, we will have to work closely together on the amendments to be brought to the territory and the Agreement itself.⁹⁴

Moreover, the Judge insists that Canada's commitment to the Ouje-Bougoumou Band go back to Mr. Crombie's letter, cited above, and to a letter from the Prime Minister, the Right Honourable Brian Mulroney, to the then Grand Chief of the Crees Ted Moses, dated August 15, 1985. Mr. Mulroney states:

The forthcoming inclusion of the Chibougamau Crees within the Act warrants individual consideration, particularly as to the intention of Quebec concerning a grant of land, the necessary Cabinet authority to create a new band and the resultant amendments to the Act. In this regard, I would repeat Mr. Crombie's commitment of support on this matter.⁹⁵

At this point, the position of the Cree seems firm. Mr. Pachano has stated to Mr. Croll:

We do not see any merit in continuing discussions with you unless and until you have firm directions to confirm, without preconditions, that the Federal Government recognizes the Ouje-Bougoumou Cree community as a Band and will take the formal legal measures required to effect this for all legal purposes.

We believe that the Government of Quebec shares our view of this matter.

Consequently, we shall await the outcome of a meeting between Minister Savoie and the person appointed Minister of Indian Affairs and Northern Development after November 21.

We also would inform you that the question of recognition must be settled before Christmas, failing which the Ouje-Bougoumou Crees intend to take strong measures to assert their rights.

In these circumstances, we see no utility in proceeding with the proposed meeting November 23, 1988.⁹⁶

On March 1, 1989, the Federal Negotiator Mr. Croll transmitted a revised offer to the Cree. The principal points in the federal offer appear as follows:

• Canada shall undertake, as expeditiously as possible, to introduce amendments to the Cree-Naskapi (of Quebec) Act and together with the other signatories of the James Bay and Northern Quebec Agreement, amend the Agreement that will recognize the Ouje-Bougoumou as the ninth Cree Band under the Act and as a Band with rights and obligations under the Agreement; and

• Canada shall pay to the Cree through a four year payment schedule the sum of Fourteen Million Five Hundred Thousand Dollars ($14,500,000.00) as a full and final contribution to the capital cost of the construction of the Ouje-Bougoumou community.⁹⁷

At the time of this writing, the Commission has not been advised of the Cree response to this most recent federal offer.

We view this issue as currently the most pressing and urgent matter concerning Cree, federal and provincial relations. There is no question as to the issues and goals. What is required is a genuine and concerted effort to do what is right and just. Such an effort should guide negotiations so as to bring about a happy conclusion to the matter. The appointment of a mediator with the singular task of bringing the parties to an agreement is not an unreasonable expectation.

CORPORATIONS

As we noted in our introduction, the "corporation" is an important legal concept under the Cree-Naskapi (of Quebec) Act.⁹⁸ According to the Act, bands exist as corporations and as such are the legal entities on Category IA lands to which the Act applies. The concept of "corporation," however, has even further application for the Cree and the Naskapi. Under Quebec municipalities law, each community is designated as a village corporation on Category IB lands.ln addition to this, there are within the communities corporations which deal with matters such as housing, construction and economic development. It is of this second and third category of corporation that the Cree and Naskapi want recognition.

In its presentation to the Special Implementation Hearings, the Mistissini Band spoke of difficulties it was having as a corporation under provincial law and under the James Bay and Northern Quebec Agreement. According to Chief Henry Mianscum, the Band asked the provincial government to provide funding for the Corporation of the Cree Village at Mistissini:

The Mistissini Band has approached the provincial government for many other forms of funding pursuant to the [James Bay and Northern Quebec Agreement] and to meet various social, community and economic development needs. There appears to be a void at the provincial level as to who and where the responsibility of the Crees rests.⁹⁹

Chief Mianscum continued: "The provincial government does not recognize the rights of the Crees and is only willing to look upon legally defined responsibilities."¹⁰⁰

A second issue raised by Chief Mianscum concerned taxation. Under section 188 of the Cree-Naskapi (of Quebec) Act, the property of an individual Cree or Naskapi beneficiary registered as an Indian under the Indian Act or the property of a Cree or Naskapi band (in essence the band corporation) is exempt from taxation. Chief Mianscum pointed out, however, that other Cree corporations do not have the benefit of this tax exemption. He argued that housing, construction, and economic development corporations are extensions of band corporations and therefore should be given the same treatment. Chief Mianscum noted that:

The Income Tax Act provides that subsidiaries of municipal corporations are not taxable. The contention of the band is that MISTCO [MISTCO VENTURES INC., the Band's economic development corporation] and its related companies are a subsidiary of a municipal type corporation, the Mistissini Band Corporation. The need is for a favourable interpretation by Revenue Canada of these regulations.¹⁰¹

The Commission has been advised by government officials that pursuit of tax questions must be made by means of direct representation through Revenue Canada.

THE ENACTMENT OF LOCAL BY-LAWS

Under the Cree-Naskapi (of Quebec) Act, the Cree and Naskapi governments have powers to enact by-laws. While the governments have passed significant by-laws to implement administrative structures and procedures, their use of legislative power in other areas has been minimal. Presentations to the Special Implementation Hearings clearly point to insufficient funding as the reason for this.

A particular problem is the lack of adequate legal services. Most governments-be they federal, provincial or municipal-have the support of an experienced legal services department to advise them on the drafting of laws. The Cree and Naskapi governments do not have the support of such services and this deficiency prevents them from developing needed legislation. The bands realize that drafting poor legislation creates problems. Poorly formulated laws are vulnerable when their validity is challenged in the courts. A similar problem is the lack of resources to prosecute violators of local laws. This discourages law-making even when there is a pressing need for regulation. Thus, a basic need that many bands identified is resources to develop the expertise to draft sound local legislation and to prosecute violators.

A case in point is local law-making in relation to application of the Canadian Charter of Rights and Freedoms, especially where individual rights are concerned. A number of bands want to deal aggressively with widespread alcohol abuse in their communities and would like to implement a complete prohibition against the use of alcohol on their Category IA lands. The prospect of challenges to such a prohibition based on the Charter of Rights and Freedoms has discouraged them from doing so. Some communities have even made specific recommendations to the federal government that it amend the Cree-Naskapi (of Quebec) Act to supplement existing alcohol bylaw powers. While it is not clear that such amendments to the Act are necessary or that they would achieve the desired results, the ability of bands to assess these hard legal questions would provide them with greater direction in their use of legislative powers.

The financing of local legal services is closely connected with the administration of justice and is dealt with in more detail in Chapter 6 of this report.

JURISDICTION AND PROCEDURES

A number of matters raised by bands and the federal government-at the Hearings relate to the jurisdiction of band governments and the procedures and regulations involved in passing by-laws.

In the absence of Cree and Naskapi government jurisdiction on Category II and III lands, the Chisasibi Band urged the establishment of a political process to ensure Cree and Naskapi input into and benefit from regional development on Category 11 and Category III lands. ¹⁰²

In its presentation, the Wemindji Band dealt with the problem that key areas of local government lie outside the Cree-Naskapi (of Quebec) Act. As their chief, Walter Hughboy, pointed out, under Canada's constitution, health and education are provincial matters. The James Bay and Northern Quebec Agreement and the Northeastern Quebec Agreement are consistent with the constitution. They establish Cree and Naskapi regional bodies for health and education under provincial law, with powers, duties and responsibilities which exceed those of provincial boards. Chief Hughboy suggested that under this scheme the provision of services and the development of policies and standards was too far removed from the communities to ensure their meaningful application. He also suggested that the regional boards themselves were too overburdened and lacking in resources to be effective in the communities. The boards' resources are consumed, he said, in maintaining themselves as functional bodies with little left to respond to community needs.¹⁰³

A number of bands recommended a review of the quorum requirements for passing by-laws dealing with certain matters. They argued, for instance, that the quorum required under the Act to pass a borrowing by-law is too high. (Twenty per cent of community electors must be present). Often, bands find it difficult to convene the required number. Eligible voters may be on hunting or trapping excursions, may be apathetic to the issue, and so on.¹⁰⁴

With respect to Cree-Naskapi (of Quebec) Act regulations, the federal government reported progress in two areas. The Cree-Naskapi Band Election Regulations were approved and registered on June 9, 1988. The regulations establish procedures for the election of council members of the bands and determine terms of office. The regulations also prohibit acts that are detrimental to the conduct of free and fair elections. The regulations, with the exception of provisions respecting free and fair elections, have no application if there is a band election by-law in force.¹⁰⁵ At present, all nine bands have such election by-laws.

In addition, initial drafts of the Cree-Naskapi Special Band Meeting Regulations and Referenda Regulations have been prepared. Final approval of these regulations by the federal cabinet is expected by March 31, 1989. These regulations will establish procedures for calling special band meetings and referenda, for conducting meetings and referenda, for voting at them and for preparing and keeping records of votes taken. Again, these regulations will apply only if, at the time of the calling of a special meeting or referendum, there is not in force a local by-law dealing with such matters.¹⁰⁶

ADMINISTRATION

The ability of bands to financially support their local government administrations is fundamental to the implementation of Indian self-government. The resources to do this must be generated either internally, by the community, or externally, from the federal and provincial governments. As we noted above, the Cree and Naskapi reached an understanding about such financing prior to passage of the Cree-Naskapi (of Quebec) Act.¹⁰⁷ Without this agreement, the Cree and Naskapi would not have supported the Act.

The difference between administration under the Indian Act and self-government under the Cree-Naskapi (of Quebec) Act is dramatic. Self-government, we now know, requires start-up costs not anticipated or planned prior to the implementation of the Act. For example, prior to 1984, under Indian Act administration, it was usually officials of the Department of Indian Affairs and Northern Development who were ultimately responsible for administering band programs and services. Transferring from this kind of administration to self-government involved extra costs. There were costs of employee training which arose because the new local administrators had not been trained in public administration. Similarly, the economies of scale which were available to a large organization like the Department of Indian Affairs and Northern Development often did not apply to the communities when they delivered programs and services. The communities had to bear such costs on their own. As a result, adequate funds were not available and the communities faced serious frustrations as they attempted to provide even the most basic services. As the Chief of the Mistissini Band, Henry Mianscum, told the Special Hearings:

The ability of a nation to meet its governing responsibilities is critically associated with the financial resources available. The needs and responsibilities of the Cree Bands are evolving and affecting change throughout the process. The role of the local band corporations is continually expanding...In the eyes of the local band members, it is the responsibility of the local band corporations to address all needs of the people...The crucial link which is consistently missing is the financial resources to respond to member needs.^l08

Because financial needs were not completely fulfilled, it was difficult for the communities to meet the day-to-day operating and maintenance needs for community infrastructure and facilities. For future agreements, the bands say, essential costs must be provided for by the federal government.

This point was echoed by many presenters to the Special Hearings. The then Chief of the Nemaska Band, George Wapachee, questioned the seriousness of the federal government's intention to implement the Act. The communities, he said, were forced to use their own funds to pay for federal obligations under the Act, "contrary to Section 2.12 of the James Bay Agreement." In some cases, staff were laid off; in others, programs could not be completed.¹⁰⁹ Chief Henry Mianscum of Mistissini told the Commission that the various levels of government need a better understanding of their responsibilities under the Cree-Naskapi (of Quebec) Act. The decisions of some federal officials on financing Cree and Naskapi governments, he said, seemed to be based on the notion that the Cree-Naskapi (of Quebec) Act had set the communities adrift and apart from federal responsibility.ln fact, under this Act and under the Agreements the communities are still entitled to benefit from federal and provincial programs.¹¹⁰ The Waswanipi too were critical of the lack of sufficient funding to meet their needs. Said Chief Abel Kitchen: "The business of setting up local governments, as defined under the Cree-Naskapi (of Quebec) Act, must be given a chance to develop with limited frustrations and clear funding arrangements with the federal government.¹¹¹

The most fully documented account of the problem was furnished by Mr. Charles Bobbish of the Chisasibi Band. He cited non-implementation of the Statement of Understanding as having created major problems for his community in setting up its local government. The Band had no resources to improve town maintenance, especially the water and sewage services with which there are serious problems. Construction personnel were overworked because the Band was unable to hire additional plumbers and was forced to layoff the carpenter's helper. The Band was unable to rehire a Benefits and Financial Counsellor to fill a position identified in the original Band budget or hire an executive secretary for the Director of Operations and the Town Manager. Because they were unable to hire a Town Manager, extra burden was placed on the Maintenance Supervisor and town administrators who had to do all of the planning and administrative work. Due to budget restrictions, the band was not able to computerize its operations. As a result, workers had to do large volumes of work manually, without any salary increase. Finally, the Band was unable to give a standard yearly raise to its employees - all staff are still at last year's salary levels - and had to decrease Band Councillors' honoraria. Said Mr. Napash:" I would like to see the reaction of the government if it did not give itself and its bureaucracy a raise at each fiscal year.¹¹²

It is beyond the scope of this report to deal with Quebec Indian relations connected with implementation of the Cree-Naskapi (of Quebec) Act. However, presenters to the Special Hearings stated that there have been problems involving the provincial government as well and suggested that all three levels of government would benefit from discussions.¹¹³ Chief Henry Mianscum proposed that federal and provincial officials be brought to the table to analyze "evolving needs" with the goal of "alleviating the problems between the parties."¹¹⁴ Clearly, such discussions would have to deal with financing the municipal type operations of Cree and Naskapi governments.

BUDGET

The Report on self-government tabled for the Department of Indian and Northern Affairs by Mr. Andrew Croll stated that the approach to financial control and accountability under the Cree-Naskapi (of Quebec) Act "recognizes accountability to Parliament for use of public funds." The report continues:

The scope of the... powers of financial administration permits the Minister to become directly involved in the expenditure of monies, and the financial activities of local governments, only when the financial affairs of the band corporations are in 'serious disorder'. Otherwise, the Minister's role is restricted to one of reviewing the annual budgets and financial statements.¹¹⁵

The report states that the bands have been providing audited financial statements each year and that these are reviewed. It notes, however, that not all bands have been providing annual budgets to the department. This was later clarified by officials of the Department of Indian Affairs and Northern Development who stated that all budgets were received, though not always on time.¹¹⁶

THE LAND REGISTRY SYSTEM

The Cree-Naskapi (of Quebec) Act requires the establishment of a local land registry system which is to be controlled and supervised by the Minister of Indian Affairs and Northern Development.¹¹⁷ Such a system is essential on Category IA and lA-N so that each band may have reliable records of all its lands and its rights with respect to them. In addition, a band's granting of property rights to an individual is legally dependent upon the registration of those rights in the land registry. The importance of a land registry system to self-government was emphasized to the Special Hearings by Chief Billy Diamond of the Waskaganish Band:

A land base and the monitoring and the administration of a land base is very necessary in The development of self-government. It provides a sense of reality that self-government is taking place. The lands surrounding Waskaganish are not small lands. These are huge tracts of land that are the size of the cities of Ottawa and Montreal. And huge tracts of land need administration and management and need zoning for any reasonable order of economic development to take place. ¹¹⁸

Maintaining a land registry system is costly and complex. A record keeping system has to be developed, offices have to be established and officials have to be trained. In addition, day to day maintenance of the system has to be supported. In our 1986 report, we noted that the federal government had made initial grants of $2000 to each band for office furniture.¹¹⁹ Since then, the government has approved the Land Registry Regulations.¹²⁰ Implementation of a land registry system, however, is far from complete. For communities, training of local land registrars is an outstanding issue to be settled with the federal government. Many communities reported that the land registry is a high priority and that failure to implement it successfully will significantly delay development. Chief Billy Diamond explained that for the Waskaganish Band the absence of a full-time land registry officer and a workable land registry system severely impedes self-government. "In the land registry system we have not been able to tran sfer as a local government any land for the purpose of education, for the purpose of health or any land for recreation and parks or any land for residential purposes."¹²¹ Chief Diamond went on to explain that Category l-A lands are huge tracts of land which should both yield natural resources and provide enjoyment of the community. "Yet," he said, "we cannot set aside or zone any land until that particular land registry system is in place."¹²²

The Commission notes that requirements for a land registry system are outlined in the Cree-Naskapi (of Quebec) Act and specified in its regulations. More over, the Commission believes that it is not enough for the government to establish the framework for a system and expect it to work. Land registry is complex and must be carried out fully and properly from the outset of self-government. In the case of the Cree and the Naskapi bands, a system should have been established fully at the outset of implementation. Now, the need is critical. The Commission therefore believes that the land registry system must be implemented immediately, with proper training.

LAND REGULATIONS

The federal government reported that the Cree-Naskapi (of Quebec) Act Band Expropriation Regulations have been drafted in consultation with the legal representatives of the Cree and Naskapi bands. These regulations establish procedures for expropriations by the bands, for community purposes or community works, of Category IA and IA-N lands or the buildings on them. The federal government through Orders-in-Council expects final approval of these regulations in the near future.¹²³

CESSSION OF LANDS

The Cree-Naskapi (of Quebec) Act allows bands to cede Category 1A and 1A-N lands only to the province of Quebec and even then only in accordance with very specific regulations. The strictness of the Act on this point is designed to protect the collective interest of band members in these lands. In their presentation at the Special Hearings, the Ouje-Bougoumou Band. Their spokesperson, Bentley Mianscum, told the Hearings:

We also mentioned to you previously the difficulties associated with cessions of land when they involve obligations, protocols, or agreements between or among Cree bands. Such cessions were not anticipated in either the James Bay and Northern Quebec Agreement nor the Cree-Naskapi (of Quebec) Act...the land which will form the basis of the Ouje-Bougoumou land regime will come out of the Mistissini land holdings. This is a much different situation than that contemplated in the legislation.¹²⁴

The Ouje-Bougoumou recommended, therefore, that procedures be included in the Act to allow the transfer of lands between the Cree bands "without weakening the intent of Part IX of the Cree-Naskapi (of Quebec) Act, which we interpret as providing some protection in the event of contemplated expropriation, or cessions for development uses.¹²⁵

The Commission recognizes that most Cree bands would not favour an amendment to the Act which makes it easier to cede lands generally. Furthermore, because the Quebec government has agreed to set aside lands for the Ouje-Bougoumou Cree, it may be that no such amendment will be necessary (though, as we pointed out above, ¹²⁶ specific amendments will be required for the new Cree community to be recognized under the Act).

The administration of justice is one of the essential functions of government. Each government in Canada, whether it be federal, provincial or municipal, has varying elements of legal and judicial services: a legal department to provide advice and draft laws; a police force to enforce laws; prosecutors to advocate the government's case; courts to try offenders; and institutions to deal with convicted offenders.

Despite its fundamental role, the administration of Justice is almost completely absent in local government as defined by the Cree-Naskapi (of Quebec) Act. It is the James Bay and Northern Quebec Agreement and the Northeastern Quebec Agreement which deal with justice and they, to a large degree, designate it a provincial matter. In this respect, they follow the constitutional division of powers under the Constitution Act, 1867 which assigns the administration of justice to the provinces.

According to community submissions to the Special Implementation Hearings, the administration of justice under this arrangement is not working. With respect to each aspect of the adminstration of justice, problems have arisen to the point where the overall situation is intolerable.

LEGAL SERVICES AND LAW ENFORCEMENT

As we described in Chapter 4, ¹²⁷ band governments are not equipped with legal services departments. As a result, they do not have easy access to legal advice on the scope and degree of their legislative powers, technical assistance in drafting laws, and agents to prosecute violators of the laws that do exist. Chief Ted Moses of the Eastmain Band described the dilemma this way: "... what's the point in having a by-law if you can't enforce it... you certainly put the whole question of self-government in a situation of uncertainty."¹²⁸

The enforcement of laws is as problematic. One of the problems here is an illogical division of legislative and enforcement responsibilities as a result of the Act and the James Bay and Northern Quebec Agreement and the Northeastern Quebec Agreement. Chief Henry Mianscum of the Mistissini Band explained the problem this way:

The local police forces are funded by the provincial government through the Sûréte du Québec. This funding is not provided directly to the Band but to the local Cree Village Corporations who are responsible for the provincial lands under the provincial jurisdiction Category IB and II lands. It is rather difficult to comprehend the need to administer the local police through a third party corporation when the local band corporations are responsible for the establishment of local by-laws and these by-laws are enforced by a different entity.¹²⁹

In addition to this jurisdictional problem, the communities also spoke of insufficient manpower, delays in training officers and difficulties in equipping local police forces.¹³⁰

LOCAL COURTS

The availability of a court system is another major concern. Under the existing system, a travelling Provincial court visits each community. In some cases, the visit is regular, in others it is not. The judge hears cases involving federal and provincial laws and regulations and Cree or Naskapi by-laws and a legal aid defence counsel is available. The travelling prosecutor, however, has not always been disposed to prosecuting local by-laws. This travelling court has, since August 22, 1988, suspended its travel into some communities.The itinerant Provincial Court Judge, Honourable Judge Coutu, refuses, and rightly so, to hear cases in those communities which lack proper court facilities. As a result, persons with summonses to appear in court must in some cases travel hundreds of miles.¹³¹

The Cree and Naskapi have always sought a comprehensive change in the justice system. They want a system of permanent local courts based on traditional native dispute resolution systems. Their rationale is that their people will have greater respect for a system which they perceive to be their own. Chief Billy Diamond of the Waskaganish Band described the need for a comprehensive justice system in the community:

First of all, I think you need some physical facilities. Whether you have it in the police station or whether you have it in the proposed community centre or in a facility.You need a court system that the people will respect...You are talking about having a facility where you can have an audience, where there is actually a court in place so that young people and old people can see. You are also talking about a system that works on a daily basis, where there is involvement of court workers, probation officers, people to do the follow-up and monitoring and counselling of the offenders.¹³²

SENTENCING AND INCARCERATION

The issue of sentencing and incarceration was raised with the Commission, especially as it applies to young offenders. At present, communities are not equipped to deal with offenders who are sentenced to serve a period of incarceration in an institution. As a result, such offenders are sent to a non-native community. According to Chief Hughboy of the Wemindji Band such local offenders "normally get sent down to Val d'Or, and when they come back they're worse off..." "What we recommend, he said, is that the incarceration could be done in one of the Cree communities..."¹³³

The Commission is not insensitive to concerns that may arise following our intervention into an area that may be viewed as being outside of our immediate mandate. Nevertheless, the Commission feels it must address itself to those issues that are raised by the communities in the course of its report preparation. Indeed, in a broader context, issues relating to the administration of justice and aboriginal peoples has been and continues to be the subject of much scrutiny across Canada. The Commission believes that these matters deserve special attention in the case of the Cree and Naskapi. The Commission, therefore, makes a recommendation concerning the administration of justice in the final chapter of this report.

For self-government to succeed, native communities must have sufficient jurisdictional authority to determine their own destinies. For the Cree and Naskapi, the Cree-Naskapi (of Quebec) Act, the James Bay and Northern Quebec Agreement and the Northeastern Quebec Agreement provide this authority. However, political autonomy is not enough; there must be economic strength as well. If self-government is to achieve longterm success, native communities must have sound economic bases. They must be strong, viable and independent economically, as well as politically. Chief Joe Guanish of the Naskapi Band stated the point this way:

Self-government is also meaningless without an economic base, for the personal and collective growth that self-government is intended to permit and inspire can never be achieved among persons dispirited by poverty and unemployment.¹³⁴

Successful economic development, however, requires a partnership. Economic development must be directed by the Cree and Naskapi nations under the guidance of their elected governments. The nations must base this development upon a realistic appraisal of their natural resources and upon the optimum use of their human resources. Combined with the leadership of the Cree and Naskapi nations, however, must be the program resources and expertise of the federal and provincial governments. Only with the participation of local, federal and provincial governments can economic development succeed. Because the need for economic development is urgent, both federal and provincial governments must acknowledge their role in this partnership and give immediate priority to assisting Cree and Naskapi governments develop strong local and regional economies.

During the Special Implementation Hearings, most presenters told the Commission of the urgent need for economic development. Among the issues they raised were the following.

CONTROL AND COORDINATION OF ECONOMIC DEVELOPMENT

A number of bands were concerned that many decisions about economic development were made outside of the region, with little or no consideration of local realities and with little or no input from the communities.¹³⁵ Bands recommended that the resources of the economic development program of the Quebec region of the Department of Indian Affairs which may be attributable to Cree and Naskapi projects be transferred to the Cree and Naskapi local governments.¹³⁶

Bands also pointed out that because of a lack of coordination, economic development activities sometimes conflict. For example,unplanned forestry operations have had detrimental effects on hunting and trapping in the Waswanipi area.¹³⁷ Clearly, self-government must include the capacity to plan and coordinate such activities. Cree and Naskapi local governments need greater control over the activities on Category II and III lands which affect the livelihood of their communities.¹³⁸

CONDITIONS FOR ECONOMIC DEVELOPMENT

A second area of concern is the conditions and measures needed to allow and encourage economic development. Perhaps most significantly, economic development requires the existence of an adequate infrastructure of roads, utilities and services. At present, the infrastructures in the communities are only partially in place. As a result, development is delayed and the day when the Cree and Naskapi communities can achieve economic self-sufficiency is postponed. Although there have been marginal improvements in the past three years, the lack of adequate infrastructures is much as it was in March, 1985 when the then Grand Chief of the Crees of Quebec spoke to the Standing Committee on Indian Affairs:

The Cree goal is economic self-sufficiency with a viable local economy. The vast potential can best be exploited by the permanent population. Consider such sectors as forestry, mining, tourism, industry and commerce, and you will begin to recognize the significance of the future development in the Cree territory.

It is difficult, however, to realistically contemplate development in any of these sectors without a significant economic infrastructure...

[Such] economic infrastructures, taken for granted in the south, are universally provided by government, not by the private sector. Why are these facilities not available in the north?¹³⁹

Another matter which has a significant bearing on economic development in the territory is the ability of the federal and provincial governments, through southern and urban oriented bureaucracies and administrative structures, to appropriately assess and respond to Cree and Naskapi initiative in a timely fashion. Needless to say the bureaucracies are far removed from the communities. Furthermore, special considerations are likely to play a significant role in the decision, but may be hard to appreciate and measure in the early stages without the benefit of on-site assessments and direct communications by all parties involved.

The timeframe surrounding the receipt, assessment and determination of economic development assistance by federal and provincial agencies can be lengthy. For example, the Waskaganish Economic Development Corporation submitted a project to the federal Native Economic Development Program to establish a shopping centre in Waskaganish. Although $1,150,000 was approved during the fiscal year 1987-1988, conditions were attached which resulted in partial funding being released by government only in February 1989. The remaining funds are yet to be released by the government.

Many bands commented on specific sectors of the local economy such as forestry, tourism, small business and traditional pursuits. Their comments suggest that both a review of economic potential and a sound regional economic development plan are needed. Perhaps most importantly, resources are needed to get development started.¹⁴⁰

In this context, it is important to note that a number of structures and business enterprises aimed at economic development are currently in place in Cree and Naskapi communities. The most significant of these are the James Bay Native Development Corporation and the Naskapi Development Corporation which were created by the James Bay and Northern. Quebec Agreement and the Northeastern Quebec Agreement respectively. These two corporations were intended to play a major role in stimulating economic growth and stability in the Cree and Naskapi communities. Questions as to how successful they have been are beyond the mandate of this Commission, however, the vital link between self-government and economic development prompts us to suggest a review of both the work of these corporations and of the larger economic situation.

LACK OF FEDERAL FUNDING

Evidence presented to the 1988 Special Hearings clearly shows that the Cree and Naskapi communities do not have adequate resources to develop community infrastructure, community housing and capital projects. The main source of the problem is insufficient federal funding. Executive Chief, Philip Awashish, of the Grand Council of the Crees (of Quebec) told the Hearings:

Needless to say, insufficient and uncertain funding over the past four years has meant that the Cree bands have been unable to budget effectively, and unable to provide the minimum level of essential public services contemplated in the James Bay and Northern Quebec Agreement and the Cree-Naskapi (of Quebec) Act. ¹⁴¹

The Cree communities have fallen seriously behind in meeting housing needs. A population explosion has resulted in a crisis-level housing demand that the Cree are not able to fulfil.

Diminishing northern housing subsidies and current policies of Central Mortgage and Housing Corporation's social housing program are also significant factors. Chief Ted Moses of Eastmain, among others, noted that funding for Cree housing was cut from 120 to 78 units, thereby increasing a critical shortage.^l42

Housing issues are not exclusive to the Cree and Naskapi. In December 1986, the Assembly of First Nations through resolution established the A.F.N. Task Force on Housing. The terms of reference state that the primary purpose of the task force is to develop First Nations solutions to housing program and policy issues. ¹⁴³

Of equal concern is the lack of financial resources necessary to provide community infrastructure and capital projects. Chief Henry Mianscum of Mistassini said:

When the Cree-Naskapi (of Quebec) Act was passed, the government should have been obliged to provide proper band administrative offices, municipal garages, warehouses, heavy equipment and proper office equipment to the bands. The absence of these necessary tools has placed a constraint on the implementation of the Cree-Naskapi (of Quebec) Act...ln review of past unfulfilled obligations of the [James Bay and Northern Quebec Agreement] respecting capital funding, we must ensure that Section 28 be honoured according to the specific legal provisions and in accordance with the spirit and intent of the James Bay and Northern Quebec Agreement. ¹⁴⁴

Chief Billy Diamond of the Waskaganish Band stated that:

Capital funding is required to provide new infrastructure and a new road system and local development right at the village level...We need to develop new lots. We need to develop new roads. We need to develop new water systems and there is no funding right now for that. There is none available and I believe that it is one of the most urgent things that the Commission has to look at.¹⁴⁵

SPECIFIC CONCERNS

The Chisasibi Band reported that lack of adequate capital funding would have severely hampered community growth and development had the Band not invested its own money in municipal works. Chief James Bobbish told the Commission that, to date, the Band has spent over $6 million for municipal and community services. "The Band has had to use its compensation monies and other local resources for these works," the Chief said:

It was understood by the people that the compensation monies were to be used for the enhancement of the community and the development of community programs rather than for essential municipal services that would otherwise be funded by the governments...the community of Chisasibi is not unsatisfied with the work that is involved in implementing the Cree-Naskapi (of Quebec) Act but we are greatly concerned about having the resources to make the necessary adjustments and to exercise the rights that are stipulated in the Act.¹⁴⁶

The Mistissini Band wants the cost of replacing log housing paid for by the federal government. In this context, Chief Henry Mianscum asked for "a renewed Capital Funding arrangement" with the bands based upon "yearly capital requirements for housing and infrastructure." Such an arrangement should be related to needs and not be tied to the "subjective" criteria of available monies. "This capital funding agreement", Chief Mianscum said, "should specifically recognize the role of community capital project management responsibilities resulting from the Cree-Naskapi (of Quebec) Act and provide adequate monies to achieve these ends."¹⁴⁷

Further to the issue of capital projects, Chief Mianscum also asked the Commission "to inquire into the issue of explicit legal responsibilities for the funding of community centres and fire fighting equipment pursuant to Section 28 of the James Bay and Northern Quebec Agreement..." On the magnitude of the need for infrastructure, Chief Mianscum said"... the community has no available infrastructure lots and will require approximately ten million dollars to construct the necessary repairs and renovations to past [Department of Indian Affairs and Northern Development works in the community of Mistissini."¹⁴⁸

The then Chief, George Wapachee, of the Nemaska Band cited the problem of obtaining Ministerial guarantees for mortgages.

For the past two years we have had a lot of difficulties in securing the necessary Ministerial guarantees from the Departments which would normally be required to obtain the mortgages for our housing programs...ln the meantime, Cree funds are being used to 'bridge finance the 'foot-dragging' tactics of the Department on our Housing program which have caused severe cash flow problems for us.¹⁴⁹

The issues relating to such capital expenditures are complex and deserve more detailed examination than we can provide here. Moreover, subsequent to the Special Implementation Hearings, the Cree identified capital funding as an important and urgent matter for special consideration by the Commission. Because of this request, we consider it premature to comment further on these issues at this time.

Our first biennial report was submitted to the Minister of Indian Affairs and Northern Development in March, 1987. The report focused on three topics: the development of Cree and Naskapi local governments under the first Indian self-government legislation in Canada; problems and disputes concerning fiscal relations, in particular, disagreement over a financial arrangement between the Cree, the Naskapi and the federal government known as the Statement of Understanding; and Cree and Naskapi and federal government relations in a post Indian Act era.

Our report was made more significant by circumstances at the time it was submitted. Nationally, the aboriginal peoples of Canada were awaiting the final constitutionally guaranteed First Ministers' Conference on Aboriginal Constitutional Matters which was to deal with entrenchment of aboriginal self-government in the constitution. Further more, there was an impending lawsuit by the James Bay Cree to secure a judicial declaration that the Statement of Understanding was a binding funding agreement. The constitutional conference, the lawsuit and our first report together served useful purposes. They drew attention to and increased understanding of the movement toward aboriginal self-government. However, despite the clearly articulated aspirations and aims expressed in these endeavours, the situation remained the same: Canada's aboriginal people were left with only unfulfilled promises and expectations.

Despite these disappointments, Canada's aboriginal people continue to strive by means of negotiation, litigation or protest to assert their treaty and aboriginal rights. The Lubicon people in Alberta, for example, have recently arrived at a partial settlement with the Alberta government on historical entitlement and rights. The Gitskan/Wet'su'wetan are currently engaged in an extensive and possibly precedent setting court case, based on aboriginal title, concerning their aboriginal ownership and control of a vast territory in Northern British Columbia. The Innu of Labrador, by protest and civil disobedience, are drawing national and international attention to their situation and aspirations.

While some Canadians may see these efforts as a threat to the constitutional and legal framework of Canada, aboriginal peoples view them as necessary steps to ensure their survival as distinct peoples in the larger context of Canadian society. For aboriginal peoples, it is important that Canadians realize that such efforts should not be viewed as attempts to radically alter the national legal and political system. The experience of the James Bay Cree and the Inuit demonstrate this point. Instrumental in their progress was litigation in the early 1970's to secure recognition of rights to lands, self-government and appropriate federal andprovincial obligations in the James Bay region. By negotiations, made necessary by the James Bay Hydro-Electric Development Project, the Cree and the Naskapi together with the federal and provincial governments realized fundamental legal and political principles of aboriginal rights. This was no small accomplishment given the issues and the often polarized positions that both sides took during the negotiations. To some extent, the Cree and Naskapi took a leap of faith, based on trust and confidence in the Government of Canada. They put into practice concepts and principles advocated by aboriginal peoples across the country and gave form and substance to a vision of their destiny. In doing so, they demonstrated great courage and leadership.

The danger today is that Canada's aboriginal peoples and the Government of Canada are growing further apart in the way they see fundamental concepts and principles of aboriginal rights and self-government and that this growing separation will bring to future generations dispute and conflict. This is true both nationally and for the Cree and the Naskapi. Despite their success in taking the first steps in establishing aboriginal rights and self-government, the Cree and Naskapi are a frustrated people who continue to endure tremendous burdens and responsibilities. What is needed in their case is an active and long term commitment from Canada to the goals embodied in the James Bay and Northern Quebec Agreement, the Northeastern Quebec Agreement and the Cree-Naskapi (of Quebec) Act.

The national importance of such a commitment cannot be stressed too greatly. The two Agreements and the Cree-Naskapi (of Quebec) Act, although applicable to a specific people and territory, have continuing implications for other aboriginal peoples.Whenever Canada addresses aboriginal rights, aboriginal title, treaty rights or self-government, accusations of ambiguity or vagueness arise. Such accusations cannot be raised where Canada's obligations are set out clearly as they are in these documents. This does not mean that the Cree, the Naskapi or the Government of Canada must demonstrate through strict proof the precise meaning and extent of each provision of the Agreements and the Act. Rather, it means that the Cree, the Naskapi and the Government of Canada have clearly articulated a goal within a specific framework concerning the future of the Cree and the Naskapi people, and further, that this goal must be supported by arrangements for financial and human resources to meet practical needs and fulfil reasonable expectations for development and growth. This is the message that was clearly expressed to the Commission during the preparation of this report and the message the Commission itself came to understand during its involvement in the mediation-negotiation process. It is also the message which will have greatest meaning to Canada's other aboriginal peoples.

Barring a dramatic change in the relationships involving the Cree, Naskapi, Quebec and Canadian governments, the Cree-Naskapi Commission is willing to assist in realizing the goals of the Agreements and the Act in any way it can. To this end, the Commission makes the following recommendations.

RECOMMENDATIONS - PART 1

The Commission recommends:

that implementation of the James Bay and Northern Quebec Agreement, the Northeastern Quebec Agreement and the Cree-Naskapi (of Quebec) Act be pursued concurrently with a common goal, and from within an implementation framework which is mutually acceptable to all parties.

In this report, we have described the issues that confront the Cree, the Naskapi and the Government of Canada with respect to implementation of Cree and Naskapi self-government. The agenda of this implementation is far from complete and, as we have pointed out, in a number of areas implementation of the Agreements has a significant bearing on implementation of the Cree-Naskapi (of Quebec) Act. As a result, successful resolution of issues can only be accomplished when negotiations and arrangements encompass both the Agreements and the Act.

We have also noted that significant progress has been made in developing Cree and Naskapi self-government and in establishing relations between the Cree and Naskapi governments and the Government of Canada. Nevertheless, problems and disputes persist over the financial support needed for local governments to function effectively. Where such support is lacking, it is the individual community members, those the least able to deal with the inadequacies, who are most directly affected. Thus, along with a concurrent and comprehensive approach to the implementation of self-government comes the need for the re-establishment of a Government of Canada and Cree and Naskapi mandated structure and process to deal with the evolving and developing Cree and Naskapi communities. Such a structure and process must recognize the dynamics of the Agreements and the Cree-Naskapi (of Quebec) Act which are entirely inconsistent with the Indian Act approach that the Government of Canada continues to follow, to some degree, in its dealings with the Cree and Naskapi.

For this reason, the Commission adheres to the recommendation made in our first report ¹⁵⁰ that a special process be established through the appointment of a Special Representative of the Prime Minister's Office to oversee the implementation of Cree and Naskapi self-government. The concept of the Special Representative serving in a mediator's or ombudsman's capacity is now supported by recent events. As we have described in this report, the Chairman of the Cree-Naskapi Commission, acting outside the legislated mandate of the Commission, served as an interim mediator in a series of difficult negotiations. Despite the interim nature of the appointment and the Chairman's restricted powers to deal with problems, this initiative generated substantial results. Furthermore, the federal government's negotiator, Mr. Andrew Croll, assured the Chairman during the course of negotiations and in his presentation to the Special Implementation Hearings ¹⁵¹ that he has the confidence of and mandate to represent several federal Ministries. Similarly, the Cree leadership and their principal negotiators speak with a comprehensive mandate from the Cree people. Clearly, a structure and process are evolving. What is needed now is to complete and formalize them with an independent representative who can directly and effectively influence the outcome of negotiations and implementation. In selecting such a representative, the Government of Canada should take into account the recent history of negotiations and implementation, the complexity of the issues involved and the sometimes entrenched perspectives and positions of the parties involved.

Canada's commitment to such a measure can be demonstrated by agreeing to the following principles:

1. that the mandate of the Special Representative be jointly developed and endorsed by all parties;

2. that the description and criteria for selecting a candidate be developed jointly; and

3. that, as a minimum, the Special Representative possess sufficient authority to prepare reports and make findings on the matters in which he is involved.

The unique situation of the James Bay Cree and the Naskapi, requires such a special measure to effectively deal with the complex and difficult political, economic, social and cultural issues. At the same time, the concept of a Special Representative may provide a model for an alternative form of dispute resolution along lines recommended in other reports such as the Coolican Task Force Report on Comprehensive Claims or the Canadian Bar Association Report on Treaty and Aboriginal Rights.¹⁵² While the success of such an initiative cannot be guaranteed, its implementation would represent a bold attempt at dealing with the traditional problems of aboriginal and treaty rights in a modern way.

RECOMMENDATIONS - PART 2

The Commission recommends:

that those involved in the implementation of the Cree-Naskapi (of Quebec) Act and the James Bay Agreements establish a common fiscal statement stating the costs of implementation. The statement should cover both past and anticipated expenditures. It should be the basis for all future negotiations.

The Commission's involvement in the Cree and Federal Government mediation-negotiation process and its own information gathering have revealed a recurring problem of establishing accurate figures on the expenditures and entitlements involved in implementation of the Agreements and the Cree-Naskapi (of Quebec) Act. Clearly, each party has its own sets of figures and uses them as the basis for its positions. Nowhere is this more evident than in the statements made to the Special Implementation Hearings concerning the degree of implementation of the Agreements. The Federal Negotiator, Mr. Croll, told the Hearings, "Most important among those facts is that more than 80% of the commitments made by the Government of Canada have been implemented since the agreement was signed in 1975."¹⁵³ On the other hand, Chief Henry Mianscum of the Mistissini Band told the Hearings, "(We) also would like to see the Commission be mandated to review the James Bay and Northern Quebec Agreement. As you know, probably 70% of that Agreement hasn't been implemented.¹⁵⁴ "This is perhaps an extreme example of such divergent claims, however, it illustrates the difficulties that have arisen in establishing figures on the fiscal arrangements under the Agreements and the Statement of Understanding.

This recommendation is not made in a passing manner. Consider the importance and complexity of the funds being negotiated. They include monies directed to capital developments, basefunding for the Cree and Naskapi governments, compensation funds and monies passing through the Quebec provincial treasury as health and education contributions. All have a bearing on each party's portrayal of the fiscal circumstances that require consideration. A common set of figures would provide a solid basis for eliminating the misconceptions that a