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Getting rid of sexism in Indian Act to cost taxpayers $407-million annually: PBO

By Jolson Lim      

Under the latest version of the bill, the PBO estimates 670,000 additional First Nations persons are eligible to register for Indian status and that 40 per cent of that total could be expected to register.

Crown-Indigenous Relations Minister Carolyn Bennett, pictured before Question Period on Nov. 1, has said the passing of S-3 is the first step of a two-step process that continues with a consultation to begin next year.
The Hill Times photograph by Andrew Meade

The latest iteration of legislation expanding Indian status eligibility to all Indigenous women and descendants who previously lost it or did not qualify would cost the federal government an additional $407-million each year, according to an assessment from the Parliamentary Budget Office (PBO) released Tuesday.

The PBO also estimated that one-time administrative costs could total roughly $71 million under the latest form of Bill S-3, which was amended by the Senate on Nov. 9. The $407-million figure takes into account program service levels and tax exemptions for new registrants.

However, the PBO, a non-partisan officer of Parliament tasked with assessing government finances, said its estimates of the financial impact of the legislation is “subject to a high degree of uncertainty” because of imperfect evidence provided.

Registration rates, administration plans, and long-term migration patterns are among the evidence listed by the PBO as uncertain. “The full annual costs will not be realized until eligible persons are registered, which will take many years,” the report states.

The PBO estimates that under the Nov. 9 revisions, which essentially restores the expanded scope of people qualified for Indian status if Bill S-3 passes from a June 1 Senate amendment, approximately 670,000 additional First Nations persons eligible to register for status. The number reflects people of First Nations ancestry who self-report as such and are not already registered.

Under this scenario, the report noted, that about 270,000 additional eligible persons or 40 per cent of newly-eligible individuals are expected to register. The percentage is based on a variety of social, cultural and historical considerations.

The report assumes that Parliament will proportionally increase funding for benefits provided to status members to maintain current service levels. The PBO noted that the benefits provided under the Indian Act to status members, consisting of mainly health and education funding, are expected to $1,311 per year for each registered person.

The report also assumes that Parliament will also proportionally increase funding funding for programs provided on reserves to maintain current service levels and that income tax revenue lost to status Indian-specific tax exemptions will also increase proportionately.

These program and tax expenditures cost an average of $18,433 per year for each resident on reserve, consisting primarily of education, healthcare, income assistance, and the tax exemption for income earned on reserve, the report noted. For each new registrant, a loss of approximately $322 per year in income tax revenue would be lost.

Independent Senator Marilou McPhedran (Manitoba) and Liberal MP Robert-Falcon Ouellette (Winnipeg Centre, Man.) requested that that PBO study the costs of the proposes changes set out in Bill S-3, along with the financial costs associated with the amendment made by the Senate and the House of Commons.

The most recent version of Bill S-3, amended by the Senate for the second time on Nov. 9, could restore Indian status to Indigenous women who lost it due to marrying a non-status man prior to 1951—the year the Indian register came into effect—and their descendants.

The Nov. 9 version is a compromise between the House and Senate, which entails studying granting status to women and their descendants from 1876 to 1951 by launching consultations. However, no firm deadlines have been set on consultations, and as previously reported by The Hill Times some Indigenous Senators and advocates have objected to Bill S-3’s latest form.

The June 1 amendment expanding the scope of eligibility to the 1876 date was subsequently reversed by the House later that month.

Liberal members in the House wanted Bill S-3 to apply only to those affected from 1951 to 1985. The PBO estimated that the the bill, as initially proposed or amended by the House is estimated to be $19 million in upfront administrative costs and an additional $55 million per year to maintain program service levels and tax exemptions.

The PBO report, in its estimates, assumes that the latest version includes the June Senate amendment on scope. The latest version of Bill S-3, “essentially restored the key changes made by the Senate” in June, but “delayed the coming into force of those changes until a date to be fixed by order of the Governor in Council,” the report states.

Bill S-3’s history marked by delays and disagreements

Bill S-3, An Act to Amend the Indian Act (elimination of sex-based inequities in registration), was introduced in the Senate in 2016 in response to a Quebec Superior Court decision which held the act’s registration provisions around who is an Indian discriminates against the descendants of Indigenous women.

Under the current wording of the Indian Act, First Nations women lose their status if they marry a non-status individual. Descendants of that specific status- and non-status unions are often prohibited from claiming status through the current complex system of criteria, which formed the issue at the centre of the Quebec court decision.

Bill S-3 would restore rights and benefits to First Nations women and their descendants born before the Charter of Rights and Freedoms came into force in 1985. However, a major area of disagreement between the House and Senate has been to what year back should the bill cover, which has caused the bill to be tossed around both chambers

The Liberal government introduced Bill S-3 in the Senate in the fall of 2016 to expedite passage, with it enshrining status onto to women who lost theirs since 1951. However, some Senators wanted Bill S-3 to cover all the years since 1876, the year in which the Indian Act was passed.

Crown-Indigenous Relations Minister Carolyn Bennett (Toronto-St. Paul’s, Ont.) said in May that such an amendment, “absent adequate consultation and without knowing the practical implications beforehand,” would be irresponsible and therefore wouldn’t be able to accept a change.

In June, the Senate deferred a final vote to the fall, ignoring the court-ordered July 3 deadline for amending the Indian Act. The government had to request a deadline extension from the courts and the new deadline is now Dec. 22.

The new deadline gave the government time to commission demographer Stewart Clatworthy to study how many people could be affected by restoring status to all First Nations women and their descendants back to the 1869 date.

Based on 2016 census data, the study projected that the number of Canadians entitled to Indian status would grow by from 905,095 to 1,652,140, based on the number of non-registered Indigenous individuals who are not currently registered for Indian status. Up to 2.2 million people would be able to qualify for Indian status for those who report North American and/or Métis, but not ethnic origin, if the law were to be interpreted very broadly.

Mr. Clatworthy noted in his report, which was tabled in the Senate on Nov. 7, that his estimates were based on those entitled to registration and that the actual number of people who would actually seek and qualify for registration would be quite different.


The Hill Times

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