Trudeau Under Fire Over Pace of New Indigenous Funding

(Bloomberg) -- Six months after his debut budget, Prime Minister Justin Trudeau has delivered just one percent of his hallmark funding commitment for Canada’s indigenous communities -- a pledge that had been lauded as a milestone.

In his March 22 budget, Trudeau committed C$8.4 billion ($6.5 billion) in funding over five years for the country’s indigenous population, aimed at reversing a long-widening gulf in living standards that has been condemned by the United Nations.

The funding was aimed at addressing chronic shortfalls in indigenous infrastructure and education funding. Trudeau has said repeatedly the country’s most important relationship is the one with its indigenous people, but disillusionment is brewing.

“The C$8.4 billion that was announced has not yet gone out to the communities,” Perry Bellegarde, national chief of Canada’s Assembly of First Nations, said in an interview. He called the pace of funding “frustrating” and said impatience is growing among indigenous people.

“I was very happy with the C$8.4 billion,” he said. “But if it’s not being implemented, what’s the point?”

Spending Rate

Trudeau’s debut budget forecast C$118.6 billion in cumulative deficits over six years in a bid to stoke growth by cutting taxes for middle-income earners and boosting transfers to families with children, the elderly and the unemployed.

The first-year government hasn’t been quick to get money out the door. In the first three months of the fiscal year that started April, Trudeau Liberals spent 22.8 percent of all budgeted program expenses, according to monthly spending data released by the finance department. That’s below an average 23.4 percent in the last two Conservative budgets under former Prime Minister Stephen Harper.

Trudeau’s budget included a total of C$1.5 billion in new indigenous funding for the 2016-2017 fiscal year. Of that, C$1.2 billion is managed by Indigenous and Northern Affairs Canada. As of Sept. 20, the department had firmly committed C$551 million through funding agreements and actually delivered a total of C$84 million -- representing one percent of Trudeau’s full five-year pledge.

‘On Target’

The government disputes there are any delays. The funding is “definitely on target,” Paul Thoppil, INAC chief financial officer, said in an interview.

Any new government funding needs to go through a deliberate set of steps to ensure the money is properly spent, Thoppil said. That includes a call for proposals, fair and equitably funding decisions and then negotiations on individual, specific funding agreements.

“Recipients always want money faster. That’s primarily a makeup of the lack of funding that existed over the years,” Thoppil said. “The department is acknowledging the need and we are moving as fast as possible while respecting financial authorities to get the money to them.”

Energy Projects

Indigenous support is a critical component for major energy projects in Canada, with groups divided on proposals.

Trudeau will soon decide Kinder Morgan Inc.’s Trans Mountain pipeline expansion, Petroliam Nasional Bhd’s Pacific NorthWest liquefied natural gas project and Enbridge Inc.’s Northern Gateway project. A group of First Nations chiefs signed a pact Thursday to work to stop Canadian oil development. One of Trudeau’s indigenous lawmakers, Robert-Falcon Ouellette, has also spoken out against the prime minister’s decision to allow a hydroelectric dam to proceed over indigenous objection.

Trudeau hailed his funding commitment for indigenous communities when speaking to reporters Wednesday. “The fact of the matter is that no government in history has done more for repairing the relationship with indigenous Canadians, and indeed investing in positive outcomes for indigenous Canadians and their communities,” Trudeau said. “We are the first to say there is always more to do.”

--With assistance from Theophilos Argitis To contact the reporter on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net. To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Chris Fournier, Stephen Wicary