Transcript of Lubicon Settlement Commission of Review Public Hearing - Day Seven

Transcript of Lubicon Settlement Commission of Review Public Hearing, November 03,1992, Edmonton, Alberta

Commission Members Present:

Jacques Johnson
Jennifer Klimek
Michael Asch
Sandy Day
Menno Wiebe
John MacMillan

Commission Members Absent:

Regina Crowchild
Wilfred Barranoik
Theresa McBean
Don Aitken
Normand Boucher
Colleen McCrory

Lubicon Representatives Present:

Chief Bernard Ominayak
Lubicon Community Members
Advisor Fred Lennarson

Others Present:

John Goddard
John Krebes (P.M.)
Bruce Koliger (P.M.)
Bob Sachs (P.M.)

Jennifer Klimek: Good morning. I'd like to reconvene the Commission hearings that were adjourned yesterday. I'd like to invite the people in the audience to have tea and coffee over there. Please feel free to help yourselves. This morning we have John Goddard, who wrote "Last Stand of the Lubicon Cree", to give us a presentation and to answer some of our questions. I won't give much more in my introduction other than John has worked with people of the Lubicon Nation for some time and he has written the book. So I'll turn it over to him for some opening remarks and then we can address some questions to him afterwards.

John Goddard: Thank you very much. I wanted to say first that when I heard about the formation of this Committee, I was very pleased. I know of the background of the panel members and the expertise that you bring to this panel. I want to say also that I feel very privileged to be invited here today.

I think to open what I'll do is -- I have written this book. I don't want to just cover what's in the book. What I thought I'd do to give you a little bit of an overview is just cover some of my own reactions as I went through the experience of meeting the Band first in 1984, the whole process of hearing their story, and trying to check it out, and then being witness to a lot of the events that have happened particularly since 1986, or '87 I guess, when I first decided to really take on the book in a serious way. I will also go into some detail about the formation of the Woodland Cree Band. I was really one of the only outside witnesses to that plebiscite vote. I thought that might be sort of a case history within a case history.

I first met Bernard Ominayak and came across the Lubicon Band in November of 1984, eight years ago, in a church basement in Edmonton. So this is kind of an anniversary for me. I had just become a free-lance writer and had spent a couple of years in the Northwest Territories, based in Yellowknife, traveling through the Northwest Territories and the Yukon, covering Native issues. When I went free-lance, I did not think I would carry on with those issues. I was looking to do something else. It was not really with much enthusiasm that I came to Alberta on my first free-lance magazine assignment. But I was here for Equinox. Almost right away I realized that this was something special. This small gathering in a church basement with quite serious-minded people. It was kind of a special atmosphere with that combination of Bernard Ominayak and Fred Lennarson. Bernard was very, very shy at that time, deferring to Fred Lennarson through most of the speaking. I noticed that as a duo they were -- it was something that I'd never seen before. But what really impressed me was the factual presentation that they made; and I knew that as a reporter I had a real advantage, because a lot of these cases aren't very real documented in an orderly, systematic way.

So that gave me a start. Since that time, I have to say that it has been an incredibly enriching experience for me to have been able to spend time in Little Buffalo, been taken around, spending time on the trapline, getting to know the people there. But of course it's also been a very painful experience as well, watching that community change under the really severe oppression that they've been subjected to since about 1982.

There are a couple of sort of main thrusts I just want to mention that I noticed through their history that I didn't point out specifically in the book. Maybe this shouldn't have surprised me so much, but one of the things I saw at every turn of events was the initiative and inventiveness and determination of this Band. I mean, going right back to the very beginning of the written history. You know they were overlooked by the Treaty Commission in 1899-1900. In the late 1920s people started to look to become part of the treaty, spending a week by wagon going out to places like Whitefish Lake and I guess Ft. Vermillion to get signed up. And then in 1933 a formal written petition to Ottawa to get their rights recognized. And then finally that led to the appearance of federal authorities in 1939 in Lubicon Lake and a recognition that they are a separate Band entitled to these rights to reserve. You know, there's something that really struck me about that in 1984. This is documented in the letters to Ottawa from these federal people. And that is that it is very clear that the Lubicon people are only looking for fairness. They said, "Look, we're getting along well in here. There's lots to hunt and trap. But there are a few old people who could use this treaty annuity and we just want to be recognized to the fullness of our rights." That's how they put it. And at every turn when they were subjected to abuse by authorities or frustrated in their attempts to get those rights recognized, they would come back with these incredible initiatives -- like in 1942 when Malcolm McCrimmon showed up and struck half the Lubicon people off the Band lists. What did they do? Well, the Chief at the time, Joe Laboucan, created a de facto reserve on the land selected for the reserve in 1939 and moved his houses there and had everybody else move there. They built a mission school there. They found their own missionary and moved him there. In the early 1970s when oil development was going to go ahead and it was clear that northern Alberta had the largest oil supply on earth, Harold Cardinal, the leader of the Alberta Indian Association, called it "an obvious and exciting opportunity". and that was the attitude. I sometimes read in the newspapers that Indian people are trying to stall development or hang up these sort of things. But I found this is just not the case. And of course in the 1970s when Peter Lougheed brought his retroactive legislation in to crash that attempt to have aboriginal land rights recognized in northern Alberta before oil development went ahead. Bernard Ominayak took the initiative for the Lubicon Band to get organized internally and to look for outside help, leading to the present circumstances.

I was really into the book when I noticed some of these historic patterns and by 1984, I asked myself, if I were Indian Affairs Minister and coming into office like David Crombie and I had a chance to create the perfect situation, what would I want? What would I like that world to be? It just struck me that what I would really like to deal with was to be able to start from scratch, almost. You know, with a small community that was still culturally intact, still hunting and trapping, with good leadership -- say a younger person who knew some English and could deal with the outside world, but was also a respected trapper and hunter and respected by the Elders, and who would be able to consult with the Elders. And the Elders would be ideally men of initiative and standing and wisdom and still respected by the community. And that would be the ideal situation from a Minister of Indian Affairs' point of view of going about your job. Well this is the Lubicon community of 1984, with that kind of panel of Elders still working the land, still leading their community in the traditional way. This young chief they had actually groomed to leadership -- Bernard Ominayak -- they encouraged him in school, warned him that one day it was going to fall in his responsibility to lead this community in a land rights struggle. And it was just so sad to see that this potential was lost, really the ideal situation. I can't imagine a more ideal situation than dealing with the Lubicon Band in 1984.

There is one other trend I just wanted to point out through this history. Maybe you've noticed it already in the reading of the documents, but there is this other phenomenon of investigators coming onto the scene, not knowing much, not really believing that the Indian complaint was -- I'll say it another way -- believing perhaps that the Indian plight was a bit trumped up. This was certainly the case with Napoleon L'Heureux in the 1930s. He made that reference that he knows those people in north central Alberta are just kind of a rag-tag bunch that used to belong to the Whitefish Lake Band. They are -- I forget exactly the phrase -- but, like drunkards and n'eer-do-wells who couldn't do well in Whitefish Lake. And then when he did actually go to Lubicon Lake for the first time in 1939, he discovered that in fact that was not the case at all, that people were doing well. There were great detailed reports about the fences and well-trained horses and the vegetable gardens and how well they were keeping their houses and how very different they were from Whitefish Lake. Those were the words. So when Napoleon L'Heureux and C. P. Schmidt went in 1939 there was a sort of evolution in their thinking.

And the same was true for Justice C.M. McKeen. He was a guy who in 1943 accompanied Malcolm McCrimmon around northern Alberta and he was kind of set up by McCrimmon. He was allowed to only ask two questions to determine whether or not these people really had legitimate claim to being on an Indian band list. He dug deeper and he read the laws and he looked into the original treaty commissioners' reports and he read the Indian Act and he realized he was being set up, he was being used. And he made a report that said that to the Minister. Then a couple of years later, Justice W.A. MacDonald of the Supreme Court of Alberta went through the same evolutionary process. We don't quite know as much about MacDonald and what he was thinking before or what kind of change in thinking he might have had. But certainly he came out and he looked into that case very closely and tried in his report to reverse Malcolm McCrimmon's decisions. And then of course we have E. Davie Fulton from yesterday. You are familiar with his report. He told me in an interview at the time I was working on the book that he too went through an evolutionary kind of process. I'm taking those words from him, in fact. How, when he first heard the story of the Lubicon case he thought the situation was exaggerated. He didn't say trumped-up, but he thought that the injustices that were described by the Band were exaggerated. And as he looked into it, he realized that this inquiry was going to take longer than he thought. He was going to have to delve deeper than he thought. And through that process he became really quite shocked by what he saw and you heard him speak yesterday about how this case can't be -- let's hope it's not a precedent. Let's hope this case is so unique and so awful that there can't be anything like this in the whole country.

I also went through a kind of evolutionary process as I looked into some of the facts of this case. I looked back on my whole self and think of how naive I must have been, one of my first experiences, just a couple of days after that first Edmonton meeting, I drove up to northern Alberta with Bernard to a meeting with David Crombie, who had just come into office after the first Mulroney election -- to meet David Crombie at a meeting of Treaty 8 Chiefs. Crombie had come prepared and briefed on Lubicon. He had prepared himself to meet privately with the Chief of the Lubicon Cree. He did so. Bernard presented him with 8 points of discussion, which were the basis for the Fulton inquiry. Crombie ended the meeting by saying "I think it's time to make a deal". He seemed very determined and very informed and it seemed like a great start. I remember I was reporting on that meeting for the Globe & Mail and I remember asking Bernard, "What is your response? What is your reaction to this event today?" And he was kind of very calm and low-key about it. He said. "Well. we'll see." I thought. "Gee, this guy's really ungrateful. Here this important man has come up from Ottawa to give him some time and he seems very ungrateful." I now understand a little better why he reacted that way.

So I too have a little different reaction to Ministerial promises and signs that maybe this thing is becoming unstuck, because there have been lots of opportunities where that could have become unstuck and then didn't.

I see I've noted here some of the other occasions with Crombie and of course with the Fulton inquiry which was brilliant and very well done and it was shelved. And then that real high point of the Lubicon struggle where they shut down the 4.000 sq. mile oil field and it led to a meeting with Premier Getty and Getty came out and supported virtually the entire Lubicon package, as far as provincial responsibility was concerned, and endorsed the size of the reserve and the membership question -- two of the key things hanging up negotiations at that time. Things seemed to become unstuck. The Ottawa negotiations where the federal people ratified the land and membership question. And that seemed to go somewhere. And then this whole roll-back which we've seen in the last couple of years. It really diminished some of that hope. I wouldn't say put an end. It's obviously not put an end to the hope or we wouldn't be here.

I want to speak specifically about what happened at the break-down of those Ottawa negotiations. I'm talking about the formation of the Woodland Cree. In the beginning those negotiations seemed to go well. Ivan Whitehall endorsed the Band's membership position. He said that the Lubicons could decide their own membership and accepted the Lubicon band list as valid. He ratified Premier Getty's proposal that it be a 95 sq. mile reserve. There was some progress made on some of the business that's before you now on just what the costs should be of the set-up of the community. Then things broke for Christmas. And after Christmas -- maybe I'm getting the sequence wrong -- but at some point Derek Burney came in and said, "'Look, there will be no compensation in this offer, and as far as economic development, you're just going to have to be satisfied with a little fund that could help you lever regular programs."

Did you have a question about who Derek Burney is? Derek Burney was the Prime Minister's Chief of Staff who was overseeing negotiations in 1988-89....

(change tapes) ...

... We heard yesterday that these negotiations ended in January of 1989 and it led to an offer that was put on the table by Brian Malone, the chief federal negotiator -- an offer that he said the Band could -- that this is a "final take-it-or-leave-it settlement offer" was the way he put it. The Lubicons turned it down. They didn't see that it could lead to any future.

But the federal people were under a lot of pressure at this point. They had to get a settlement. There was pressure from the United Nations. There was pressure from the World Council of Churches. There were international human rights groups getting interested in this case. They really wanted to lay it to rest.

Now I don't know who made the decision. There was a Cabinet committee by this time on Lubicon which consisted of Michael Wilson; Don Mazankowski; Bill McKnight, the Indian Affairs Minister; and Joe Clark. They were overseeing -- not overseeing exactly, Derek Burney was overseeing -- but they were kind of a reference committee. Anything that came up that had to be settled at the political level would go to this Cabinet committee, very highly placed people of course. We don't know who made the decision. But the mandate came down -- and we were getting this from Ken Colby, the chief spokesman for the federal side -- that if a settlement was not possible, that they should look for a mechanism -- I asked Ken Colby what he meant by "mechanism" and he said, "Find some way where even without a settlement, we can deliver programs to help the Lubicon community on the ground, social programs and economic programs." Another way of putting that, a harder way of putting that is that they had a mandate to impose a settlement even if the leadership of the Lubicon people did not endorse this "final take-it-or-leave-it settlement offer".

It sounds a little far-fetched, but we can trace the events. Two weeks after those negotiations ended, Brian Malone was in northern Alberta talking to a man named Henry Laboucan in a hotel in High Prairie. Malone was with a man named Fred Jobin, who was also a part of the federal negotiation team and now post-negotiation team. Now the question is what did Brian Malone have on his mind at that meeting? We know two things. We know that Henry Laboucan had applied some time earlier for something called land-in-severalty. This is a kind of obscure Treaty 8 clause that allows -- I think this was a rare thing in any treaty. Treaty 8 has it and Treaty 10, and I think it was because some of these Bands, some of the people were so spread out across the north that it allowed for a family group to have a small family reserve separate from the main reserve if they wanted to, if they elected to. It would be calculated at 160 acres per person. And the only case in which this had come into reality -- the only place I know of anyway -- was at Grouard which was where Henry Laboucan lived near Lesser Slave Lake. So Henry knew about this and he wanted land-in-severalty. He considered himself a Lubicon member but he didn't want to live in Lubicon territory. He wanted to stay in Grouard and have his own family reserve. So he had been petitioning Brian Malone about this during negotiations. And Brian Malone told him to get lost. He didn't tell him that, he just didn't return his phone calls. But in one of his other telephone messages, Henry Laboucan also said that "I know" -- I better get these words rights -- "I know of a majority of Native people who are not really excited about the Ominayak deal." Well, my guess is that this is what Brian Malone's interest really was -- "a majority of Native people who are not really excited about the Ominayak deal". And that this is what drew Brian Malone to northern Alberta, the possibility of starting talks with a majority of Lubicon members who were disenchanted with the Lubicon leadership and who might -- I don't know, maybe overthrow the Lubicon leadership. If there was a majority that would be pretty easy. Or anyway, a group of people certainly worth talking to in Brian Malone's mind.

Okay. So on February 10th, 1989, when that meeting took place in High Prairie, Henry Laboucan showed up with 7 others. Brian Malone was there representing the federal side with Fred Jobin. Now of those 8 people, Henry Laboucan was the only person recognized as a Lubicon person at that time. Of the 506 Lubicon members that were accepted by Ottawa at those negotiations, only Henry Laboucan was on that list. Now there is a little different version by the federal people. They said on some previous lists there were 4 others -- 4 of the other members present were on previous Lubicon lists. I have never been able to verify that such a list existed. What I do know is that besides Henry there were only two others who were actually recognized by Ottawa as being Indians. We get a little further insight into what Brian Malone's plans were at that meeting by a memo he wrote to Ottawa. In it he wrote and talked about "coordinating dissenting interests" in the Lubicon Band.

Two weeks after that meeting a petition arrived in Ottawa addressed to the new Indian Affairs Minister Pierre Cadieux from two of those people who had been at that meeting with Brian Malone. It was written in the hand-writing of one of the members -- Melvin Laboucan -- and it was not just written in his hand, but all the signatures to it were also written in Melvin Laboucan's hand. Usually a petition is signed by all the individual members who endorse it -- in this case it was a list of names in Melvin Laboucan's hand-writing. The petition was kept secret and the fact that it was all in Melvin Laboucan's hand-writing was not made clear by the federal spokesman Ken Colby. He just said that these people had come forward, that they were a dissenting group at Lubicon Lake. He called them a "faction" within the Band that wanted Bernard Ominayak to accept the federal offer. This was how this was represented. Pierre Cadieux accepted this petition as legitimate, even though only one person has signed it. He offered right away to pay for a lawyer to help that group.

A couple of weeks later, April 17th, again in High Prairie, Henry Laboucan showed up to meet Brian Malone and Fred Jobin with 7 other people, not the same 7, not exactly the same 7, but still the same number of people. Henry Laboucan at that point was dumped. It was -- I'm kind of reading Brian Malone's mind here again -- he has never agreed to give me an interview. He's promised several times but has always canceled at the last minute. He's been uncooperative with the whole process, something I know the panel is familiar with as well. Henry Laboucan was dumped. He was, I guess, considered of no more use to the federal people. In other words, it was not Henry Laboucan's interests that Brian Malone had in mind. It was the federal interests and Henry Laboucan no longer served them. Henry Laboucan still lived in Grouard and still wanted land-in-severalty.

I should mention also that this land-in-severalty business was suspicious right from the beginning because the federal Justice Department has been fighting land-in-severalty issues in northern Alberta. There are cases going on now where the federal Justice people are fighting people who are applying for land-in-severalty. So there was just no degree of sincerity to begin with in trying to look after Henry Laboucan's interests that I can see.

Anyway, after this April 17th meeting two of the members from that group -- not Henry Laboucan obviously -- flew with Malone in a private plane to Edmonton where they met a lawyer from Calgary named Bob Young whose services were being paid for by the Indian Affairs Department. Bob Young agreed to represent this, what was being described as a dissident faction of the Lubicon Band.

Well, you can imagine that this was now in the press, with lots of stories about it and a lot of public discussion and certainly some pressure on Chief Ominayak to respond in some way. So he did. He called an election to see if there really was the majority of dissenting interests that the federal people were speaking about. In the election, which I attended, there was an overwhelming and unanimous vote to re-elect the Chief and the Council. So that put that issue partly to rest.

However, the federal effort continued. It continued by about 3-fold. There suddenly were people from the Indian Affairs Department from Ottawa in northern Alberta helping to recruit people, sign up people. The biggest part about this is that really in all these discussions -- the federal people, the provincial people have always been telling the Lubicons that "you are jacking up your numbers. " That's what this whole membership question was about. "You are inflating your numbers, your membership figures. You don't deserve that much land because you are only half the number of people that you say you are." And then suddenly the federal people are saying, 'Well, gee, we agreed to 506 in Ottawa but maybe there are more. To be fair to the Indian people, to be fair to all of the Lubicons, we should get out there and verify them and help them to gain Indian status."

I'll just sum up what happened in the next few months. This recruitment drive went on in earnest. There were meetings, after meeting, after meeting. There is a sort of sub-department of the Indian Affairs office in Ottawa that looks after membership, the Registrar's office. And it's main job in the last few years has been trying to deal with the people, deal with women and descendants who have been cut out of Indian status because of that -- you know, if they married a white person -- anyway, they had a right to join back -- so the whole membership section has had a huge backlog of cases. They dropped those cases. Put all their attention -- we know this from internal comments from that department -- dropped all those cases to give priority to those becoming Woodland Cree band members. In other words, they weren't recruiting these people any more to try to challenge Lubicon leadership. What was happening, what was evolving was the intent to create a second Band to lay claim to Lubicon territory and then negotiate with the federal government to get a settlement, which turned out to be quite similar in terms to the "take-it-or-leave-it" offer.

I've just got some notes here -- in record time, numbers kept a secret, membership kept secret. Anyway what we saw of the negotiations was Brian Malone sitting opposite Bob Young, and some Woodlanders selected to accompany Bob Young to these negotiations.

If that were not outrageous enough there was then this whole cooked-up plebiscite, a vote held of all the Woodland members to try and give legitimacy to the creation of the Woodland Cree Band which by now every Native organization in the country was denouncing. I followed this plebiscite business very closely. I was in Cadotte Lake during the vote itself. I was the only reporter actually on the ground during that process. Others were covering it by phone. There are certain regulations in the Indian Act to cover the conduction of this sort of plebiscite. The voting list has to be posted publicly, and it was. I didn't get a copy when I asked at the Indian Affairs Department, but I was able to go out to public places and verify that there was a legal list of 268 people. I should say also that the logistics challenge for this plebiscite vote was enormous for the Indian Affairs people, a real headache. It was being conducted by Indian Affairs directly, handled out of the Edmonton office, overseen by Gary Pouters ostensibly as the local person and his official subordinate in this case was Sheila Carr-Stewart. There's some evidence that Fred Jobin was also directly involved although he denies this -- Fred Jobin being one of the negotiators in Ottawa and since reassigned to an education portfolio.

Well by now, the federal people had recruited people from all over northern Alberta. As you know, there are really 7 isolated communities in northern Alberta -- there's Lubicon Lake, there's Cadotte Lake, there's Trout Lake, there's Peerless Lake, there's Loon Lake. Sandy Lake, there's a couple of other lakes, Chipewyan Lake -- with unsettled land rights. And a lot of these people have moved around and found their land rights never addressed. They found themselves in other parts of northern Alberta, so it was some of these people that the feds had picked off and signed up to the Woodlanders. I have a lot of sympathy for these people even though they were really screwing up the Lubicon case. They had legitimate land rights that had not been settled and should have been. And here were some people finally paying attention to them, signing them up, getting them treaty status, Indian status, that they had never had recognized. So of course the federal people were able to draw a lot of members into this. The problem now for the federal people was that they were dispersed all over northern Alberta. So they set up 4 polling stations -- one in Edmonton at Canada Place, one in Slave Lake, one in Peace River -- all these outside of Lubicon territory -- and one in Cadotte Lake, which is the neighboring community to Little Buffalo. I was at the Cadotte Lake polling station in the Band office, which was a trailer provided by the Indian Affairs Department. What I found that day was people coming in one end of the trailer, in the door, walking along the trailer corridor past me. There was a table set up like the federal people usually set up tables with scrutineers. Roger Cardinal, again an employee from the Indian Affairs Department in Edmonton, sitting there officiating on behalf of the federal government and people of Canada, one of those aluminum ballot boxes on the table in front of him. Another Indian Affairs employee sitting beside him to help out. And then the person was given a ballot. There was one of those little cardboard screens where people marked their secret ballot, and then they would come around again to put the ballot in the box. They were then given a coupon -- this from a Woodland Band member -- a coupon that they took across to the opposite wall and a check was made out for each voter for $50.00. Everybody who voted got $50.00. Another part of this deal was -- I should mention that this was justified as travel expenses. But I said, "Gee, here's John Halcrow paid $50 for travel expenses and he lives just down the road. He walked over here. What kind of expenses did he have?" "Well, you know, if you give travel expenses to some people, well we have to be fair to everybody so we don't get in trouble." Well, I was just talking to a guy who was coordinating the rides to the polling booth. He said he had 100 drivers in all sections of northern Alberta to drive these people to the polls at the expense not of the voter. Remember, these kinds of incentives had to be quite extraordinary to get a population of disparate people who have no previous affiliation to this creation of the Woodland Cree and who were really not in the habit of voting in any sort of election, let alone a plebiscite that they might not understand. This deal was not explained during the referendum. There was no legal text. There was no text at all available to these people. So this was "travel expenses" -- $50 to everybody who voted.

As an extra incentive, the understanding was made clear to everybody that if the vote was "yes" -- it was a private secret vote, we know that -- but if the vote was 50% or more yes, everybody in the Band would get $1.000. So if you were a man and a woman with 7 kids, you would get $9,000 for a yes vote. So there was the incentive to go to the ballot box in the first place and an incentive to vote yes.

The vote went 98.5% in favor... (change tapes) ... maybe I should speed this up a little bit. I'm taking a long time with it. I just really wanted you people to be aware of the details of this thing and about how this thing was rigged, $50 and $1,000. Did I mentioned the voters' list has 268 names on it? It turned out there were 268 people who voted. I said, "Gee, that's 100% voting turnout." They said, "No, actually it wasn't 100% voter turnout. There are now 309 voters." I asked, "How did you get that?' Another guy standing near me said, "Yeah, how'd you get that? Last night I had the list and there were only 295?" This list was growing during the plebiscite itself.

And the real sad part of this story is that a few days later people found out that this $50 and $1,000 per member would be counted as income to anybody receiving welfare, which is about 90% of these people. And that their welfare payments would be cut off until that sum, that lump sum they were paid for this vote, was paid back. So that what happened was the original money -- let me just go back to a detail in the federal offer that's really significant. They ended up with about 700 members. But they said only 300 and some would be counted for land purposes. So they got a square acreage for half the people. The other people weren't entitled to land. They were certainly entitled to be part of this Woodland deal but they weren't entitled to land so the reserve would only be so much. And then for economic development money, the federal government would pay for a certain amount of land at $50 an acre which created a fund -- the exact figures are in the book. I can't recall them now -- this created a fund of something like several hundred thousand dollars. Of course it reduces the size of the reserve, but it created a fund and it was from that fund that these people were paid for voting and voting yes, and then that money was then taken away out of their welfare payments. So the federal government was actually buying their vote with economic development money. And then you had this just awful situation where after the celebration of this deal going through -- there was a big party, you can imagine, these people did consider that their aboriginal birth right had been settled, and there was something to celebrate here after 50 years of waiting. After the party, they realized that they had spent their grocery money for the next 2 months and they showed up at the Band Office at Little Buffalo asking if the Lubicon people could help them out.

I phoned up Garry Wouters after this and said, "Garry, you're in charge. Do you think that this really is the way that things should be done here?" He said he had no complaints from anybody and if I had some complaints why didn't we have breakfast together. I said, "Mr. Wouters, I'm not a citizen coming to complain. I'm a reporter asking you for some sort of reaction here." He never did seem to get that. He just said that we could be friends and talk about this and if I had some substantial matters to discuss he would consider them.

I mentioned that I was reporting some of these details for the Globe and Mail. The first story about the vote and the $50 and $1,000 I filed with the Globe and Mail the next day. It made page 1. When I found out about the welfare money being put off, I filed a second story and it was given prominent display above the fold on page 4 during the week. Not a single leader in Canada that I know of -- besides Ross Harvey from Edmonton here who I contacted for comment during the writing of these articles -- had any reaction. Nobody stood up and said this is unacceptable. There just wasn't one single person who was ready to stand up and say there was something wrong here. And of course this Woodland Cree business went through.

We're at 11:00 here and I know it's time for a break. It's when we broke yesterday. Let me make just some short comments here.

I had a personal experience with Garry Wouters last year when my book had just come out and I was doing a tour. He posted a memo -- and maybe I'll save this until after the break, but I just want to mention it -- he posted a memo saying that nobody was to speak to John Goddard any more. I was kind of black-listed. I can discuss that later.

One other general thing that I might just mention and if there's any questions about this I can answer them. My latest work has been in Southeast Asia. I spent about a month 2 1/2 years ago in Sarawak, in a special part of Sarawak called Penan Territory. This is one of the last nomadic jungle peoples on earth. There is now technology to log deep into their territory. It's quite hilly and steep in places, but they now have the technology to really get at that primary rain forest that is their territorial homeland. I went in there, up river in small canoes, and saw these people being pushed out of their territory, relocated in areas that are already cut, secondary forests, in longhouses which they are not accustomed to -- longhouses are a traditional type of house for other tribes in Borneo -- built by the government at government expense, put in these longhouses to live on welfare. And I thought, "Wow, where have I seen this before -- native people being pushed off the land into government built settlements to live on welfare. This really reminds me of something."

Last summer I went to a territory called variously West Papua or Western New Guinea or Irian Jaya -- it's a province of Indonesia on the west side of the Island of New Guinea. There this process is taking place too. The Indonesian government has a law -- I mean, not a law but a stated policy, a development policy -- of getting tribal people off the land into government settlements to live. While they don't exactly say it, to live on welfare. That seems to be the deal. So you can see these patterns all over the world and they're very similar. And when human rights groups go to these places, international rights groups make presentations to the United Nations, it is always called crimes against humanity. What is happening in the Penan Territory are crimes against humanity. And what is happening at Lubicon Lake are crimes against humanity. I know Mr. Fulton said yesterday we must be moderate in our language, but we must understand that these are crimes. These are crimes being committed by Garry Wouters who broke the law in this referendum. They are crimes against humanity being committed by Brian Malone and Bob Coulter at Indian Affairs in Ottawa and Fred Jobin here. I'm not saying that our efforts should be on locking these people up or that the focus should be on bringing them to justice. But certainly some kind of process has to be found where these people are out of the way.

I saw this -- I'll be brief here -- I saw this new federal offer, so-called new federal offer. The first thing I noticed is that it was an "improved" offer -- $73 million now up from something else, one of the big items there was $10.5 million for the value of the reserve land. You know, we heard Mr. Fulton saying that was preposterous. The reserve land is a legal right of these people. How can a price be put on it and -- I knew instantly this was a trumped-up offer. That this offer was not part of a sincere effort to reverse some of these trends that I'm watching over the last 8 years, but it was part of the problem, part of the same process, part of the same criminal process to do these people damage.

You talked about the precedent yesterday. You know, that being fair to the Lubicon people would set a precedent. Or giving in to the demands of the Lubicon people would set a precedent. And I thought, what is the precedent. Well, yeah, the Indians of Canada have been fucked for 200 years and being fair to them might set a precedent. And so that's the precedent we're talking about. The precedent would be fairness.

I just note here that Mr. Fulton said yesterday we should deal with this case on its merits and not think in terms of trying to solve all of the world's problems but look at this case on its merits and try to decide what was fair. So I'll just leave it rest there and let people take a break.

Jennifer Klimek: Thank you John. We'll have about a five minute break and then come back and address some questions to you.

Jennifer Klimek: (inaudible -- What were some of the sources in your research?)

John Goddard: Yes, there is a reference to that in the book acknowledging some sources. One of the reasons that I decided to go ahead with the book was that there was just so much documentation. Where the documentation started in terms of the Band's history was through the Indian Association of Alberta. In the 1970s they had a unit called the Treaty and Aboriginal Rights Research unit. This group was looking not only at the Lubicon claim but some of the other isolated communities in north central Alberta and I suppose research in other areas as well. I see Michael Asch and he probably knows a lot more about it than I do. But that created a library of documentation -- missionary records to some extent -- although I know that Fred Lennarson did a lot of archival research on the missionaries himself through the Archbishop's residence library in McLennan. But really the core material was from the TARR research and that was organized for the Band by Fred Lennarson and Terri Kelly, and to which I was given full access. It was a real gift. You can imagine just being given access to this stuff. It was wonderful. Instead of having to go through the archives myself -- which would have been impossible anyway, because the Indian Affairs Department by the time I came along had cut off access to the public to those papers. The same with Rene Fumaleau as a matter of fact. He now says that those documents, the days when he did his research for -- Michael, what was the title of Fumaleau's book?

?: "As Long as This Land Shall Last."

John Goddard: "As Long as This Land Shall Last", thank you very much. He now says that he was allowed to look through cardboard boxes full of stuff. And now all of that material -- I suppose not all but I think he said a large amount of that material is now inaccessible to the public.

So there was the TARR materials. There was the McLennan archives. A lot of this stuff I witnessed myself. That's why I chose the Lubicon Cree story and the Woodland Cree story. I witnessed a lot of these events.

I did that magazine article in 1984-85. And then I started on the mailing list so I was still following it. And then in February of 1986 there was a hearing of the Standing Committee on Aboriginal Issues on Lubicon. James O'Reilly was there. Fred Lennarson was there. Bernard Ominayak was there. Edward Laboucan, who I believe you heard from, was also there. And E. Davie Fulton. It was quite an extraordinary evening one week night in Ottawa. And the place was just packed. Every Department in the government seemed to have a representative there. It was just an electric atmosphere. People standing all along the walls. All the chairs filled. And Fulton, I remember at that time, his report had been shelved by then and Roger Tassé had been named the new federal negotiator and had rolled back some of the progress that Fulton had made. And Fulton said "I think these people should be invited back to the negotiation table and not the ultimatum table." So very strong statements from Fulton at that time. And I thought, well, there's a book possibility here. I didn't have any money at first, but Fred Lennarson and Bernard Ominayak were going to Europe and I said, "Gee, you think if I get some money together that I could follow you along on this trip?' And they agreed that would be all right. I'm just mentioning this because it was the eyewitness part. I wanted to get a sense of just how significant this case was. And I went to Europe. There was this conference in Vienna with scholars from all over Europe and academics who were very well informed -- not just about the Lubicon case but some of the big cases in the United States. Also, by that time the Olympic boycott had started, which I was very skeptical about in the beginning. But I saw that there was momentum here. That this was a movement that was being formed. And that this was a very significant event in the history of the country. And that I was kind of given this opportunity to witness the process of an aboriginal society negotiating with a modern western democracy their aboriginal rights. And I thought I wanted to get in on that process.

I don't think I'm answering this question very well.... I should say something about the federal side too, because I tried -- David Crombie I felt would be open to seeing me. He wasn't. I wrote him -- I made a couple of phone calls and then I ended up writing him a letter. I originally went to Bruce Rawson, the Deputy Minister. He referred me to Crombie. Crombie referred me back to Bruce Rawson. Bruce Rawson referred me to Bob Coulter. And I have managed some conversations with Bob Coulter over the years. The latest was about this Woodland Cree plebiscite. He said everything looked on the up and up to him. And there was some -- I guess for a year and a half or something, I was in regular contact with Ken Colby, the federal spokesman. But even at one time with him, he tried to cut me off. He was starting to spread rumors -- I got this from a newspaper reporter in Alberta who I won't identify because it's not necessary -- that I had misquoted Ken Colby in the Globe and Mail, that he had said the opposite. Ken Colby seemed to be smearing my name around in Alberta in this way. So I protested that and came up with transcripts of some of these interviews from which the quote originated and sent them to Brian Malone, who I guess referred them to the Minister's office. They came back with the fact that it was not proper that I was cut off in this way. So in trying to deal with the federal people -- the condition was mostly if you wanted to have a cozy breakfast to discuss your complaints, then we'll talk, but otherwise you can forget about getting much information out of the federal government.

I think I also itemized in the acknowledgements and sources section that Brian Malone set up several interviews with me -- one I can remember in particular set up months in advance. It was to be -- I forget the exact circumstances, but it was after some event that was going on. It would be in this month generally, and we'll nail down the date a little later. And I said fine. And then he said it would have to be in Edmonton and I said, "Gee, you're in Ottawa an awful lot. I'm in Montreal. Why can't we do it in Ottawa?" No, it would have to be in Edmonton. And he named four people that he wanted present. This had to do with the Woodland Cree. He wanted Woodland members there. He wanted Fred Jobin there. He wanted a lot of people there. So it would have to be in Edmonton. I said fine to all these conditions. And then a couple of weeks before when I was trying to nail down the exact hour to book a flight, he canceled. And that was not just a single incident. He was doing it all the time. And then he finally agreed to have some written correspondence with me if I would write him and he would reply like three months later. But I did get some valuable material that way. He didn't know that I had so many pieces and so some of the pieces he supplied were pretty useless on their own, but they fitted very nicely with some of the other material.

Jennifer Klimek: Thank you. I'd like to open it up to the other Commissioners.

Menno Wiebe: Since your fact gathering, particularly on eligibility for membership, having documented the up and down moves by various federal authorities on recognizing and then canceling eligibility -- since the documentation in your book, "Last Stand of the Lubicon Cree", do you have any further information about moves for discrediting or awarding or recognizing the membership of the Lubicon people?

John Goddard: You know, one of the first things I noticed in this new federal offer that you're considering is that the membership question has been rolled back. In other words, at Grimshaw in October '88 Premier Getty in a very carefully worded way that didn't directly contradict the Lougheed policy on Lubicon membership, he indirectly recognized a membership of about 500 Lubicon people -- just if you work out the square acreage of the reserve he was prepared to accept. And that translated during the Ottawa negotiations of December '88, January '89 into a ratification by the federal people of a membership of 506. I see in the latest offer that all that progress has been rolled back. They are going back to a position...

Menno Wiebe: Could you interpret the rollback for our enlightenment?

John Goddard: Well, they have reneged on that understanding that the Lubicon membership is of the order of 500 and the other implication that the Lubicon people have the right to set their own membership. The list of 506 people that the Lubicon side brought to the Ottawa negotiations was accepted by the federal people without "let's look into this more deeply and find out if somebody's grandfather accepted scrip and doesn't qualify under our rules," which were at various times seen as illegitimate rules anyway. So they accepted -- in a way -- accepted that the Lubicon people had the right to set their own membership and they accepted the number which was given to them. Now what Tom Siddon is saying is that the Band does not have the right to set its own membership. They can put forth a list and Tom Siddon or his assistants, will check every name, check into the background of every person, and what they've done in the past is just look for excuses to deny people Indian status with this. The Alberta government had it down to 9 people at one time, and they weren't even sure about the 9. So this is a real, real set-back in the process that Siddon has reopened the membership question.

Menno Wiebe: From your observations, do see this reneging on the part of the Minister of Indian Affairs as threatening the agreement reached thus far regarding the 95 square miles?

John Goddard: I don't know if recently he has made any comments directly on the reserve size. I do know that in the past two or three years, comments like that have come up every once in a while. Brian Malone who is still the federal negotiator made a speech in Europe, in Cambridge, England, two days after the Woodland Cree plebiscite. And in that speech to an international conference of lawyers he said that the membership question of the Lubicon Band would have to be looked at now that the Woodland Cree group has been formed because he thought that some Lubicon members had signed up with the Woodland Cree and that would reduce the numbers so that the land question would have to be re-opened. Ken Colby has said things like that in the past as well. Tom Siddon, to my knowledge, has not addressed that question, but the implication is there certainly.

Menno Wiebe: I have another question if I may. You, in your observations and writings, have made some incisive and far-reaching comments that implicate the Lubicon people as well as other peoples. What has been the response to the publication, "Last Stand of the Lubicon Cree" from Lubicon people or neighboring people?

John Goddard: I haven't had a lot of reaction. Fulton said yesterday actions speak louder than words. I haven't had a lot of mail on it, but once the book had gone to the press, and just a little before the book was available in the book stores, I sent galley proofs to Bernard Ominayak. He had a chance to read it on his way to Japan. I was able to get the copy of the galleys to him before that trip. He read through the book at that time and when I did my national book tour last November and came to Edmonton, Bernard invited me to go to Little Buffalo -- I had an extra day -- he was in Edmonton anyway for some other engagements. We drove up together. There was a meeting called at the community hall there. A kind of a feast was prepared, moose stew and bannock. People had gone to a lot of preparation. At that gathering a number of people stood up. Another thing that was quite unusual about this to me was that in the meantime Bernard had got a box of 20 books and I guess had taken them up a couple of weeks earlier. Had not opened them. I guess they were stuck under a bed or something and saved these as an occasion for me to open up the box and to present the book to the community at this ceremony. I was very touched by that. Anyway, I did that. I held the cover up and there's a kind of a background picture of Edward and Summer Joe Laboucan on the cover. They were very excited and there were public speeches made. I remember Edward Laboucan particularly saying, "Now I realize why you were coming around so much and bothering us with all these questions." I found out -- maybe the box was opened, because I know that John Simon Auger had read it. He had been down to Edmonton on that trip to pick up the books and he had read it and was very complimentary, recommending it to people. Nothing that I've heard from the Lubicon people themselves has indicated to me that they feel that I've misrepresented the case. And I've just been very warmly received by the Band in response to the book.

The Woodland Cree chief is not quite so warm in his reception towards me. This is not so much on the book. It's the reporting I did during the Woodland Cree plebiscite. He was a little embarrassed that some of this stuff came out.

Menno Wiebe: I'd like to ask -- it was going to be my second question -- if there had been any negation of your findings or disowning of the data that you have presented. I think you've answered that.

John Goddard: I wish there would have been. There's lots of times where I couldn't believe the material myself. I mean, that was one of the big struggles. I think for about two years I struggled to believe this material myself. It just did not conform to my view of the country. It kind of ripped me apart at some levels. And lots of things I was afraid to say because I thought surely I'm wrong. And somebody is going to prove it wrong and that I'll have to dig up other evidence. But nothing. There's no response. The Globe and Mail articles on the plebiscite. I outlined the Woodland Cree case in Saturday Night Magazine and Tom Siddon wrote a very weak reply that had no substance at all. That was a further shock that there's just no defense on the part of the federal authorities for what they've done here. I don't see much sign that they're willing to rectify it.

Menno Wiebe: A final question here for me. You make reference to your learnings of happenings in Asia with some parallels in the development process. Would you have a recommendation to this Commission about drawing some parallels with exploitations happening in other countries in regards to Native peoples?

John Goddard: You know, I found it helpful in my whole understanding of this case to go to the Penan jungle and watch those people being forced from the land. I mean, some of the images come to mind as I'm speaking. People lolling about these longhouses, destitute, no future. I mean, it's just pathetic. It just helped me to see that this sort of thing does go on in the world and it helped me to ask the question -- is there any reason why it should not have happened in Canada. Are we any better people? This is a question that Canadians find really hard to face. We like to think of ourselves as good people and upstanding people and fair people and sympathetic to Native issues and Native rights and so forth. I think part of the big problem is just facing the fact that we have some inadequacies here. I find it hard to explain. Because on one level every Canadian knows that Indian people of this country are getting screwed. Everybody knows that. And that they're marginalized, they live in terrible conditions, and that all the programs that this new federal offer is trying to impose on the Lubicon people have failed everybody. Everybody knows that on one level. And yet on another level we have to kind of maintain this belief in ourselves that we are good, that we are better than other North Americans, there never was a war against those Indians, and that we're essentially good hearted and we're doing it right. So I know that that's the struggle I had. I'm embarrassed by that moment when I asked Bernard how come he's not more grateful that David Crombie would come all this way to see him. I'm embarrassed by that, but I just mention it as part of what I had to go through myself to try to understand what was going on here.

Menno Wiebe: Thank you very much.

John Goddard: If I can just take a moment, something's come to my attention here. Sam Sinclair has very kindly provided a letter that he received in the mail. It's dated October 28th. It must have come in the mail one or two days ago. I'll just read it out. It's a short letter and bears directly on this whole discussion of the Woodland Cree that I went over this morning.

The letter is from Tom Siddon.

"Dear Mr. Sinclair:

Thank you for your letter of August 11, 1992, requesting the establishment of a new Indian Band to be known as the Kee-sip-igamahic Band."

Here's the good part.

"The limited resources of the Department of Indian Affairs and Northern Development restricts the creation of new Bands to situations meeting the current policy on creation of new Bands. I'm enclosing a copy of this policy for your information."

And then he sums it up.

"The creation of a new Band will only be considered where such action would not result in additional funding requirements, including those relating to the provision of Departmental programs, acquisition of land, capital construction and the development of local services. Normally the existing Band to which the proposed members of the new Band now belong is expected to share its land and financial resources with the newly formed Band. It will therefore be necessary for your group to arrange to share land and other assets with an existing Band. Should you require further information." etc., etc.

So under this policy that Mr. Siddon outlines, the Woodland Cree Band could not have been created.

Michael Asch: I wondered about a few things, John. You say that you didn't have much of an opportunity to speak with government officials but you didn't mention much about whether you had any opportunity to speak with provincial officials. Did you?

John Goddard: Yes, I did. They were a lot more helpful. But even then it was tough. Remember Milt Pahl? He came into the discussion yesterday with E. Davie Fulton. He's the guy who just unilaterally decided that Fulton was no longer relevant. I called that guy and called him and he couldn't comment because there was a legal case on, which was true only in a very abstract sense. Then there were other excuses. I tried again in Ottawa. He was at a First Ministers meeting in Ottawa that was part of that process of aboriginal rights conferences on the Constitution. I sent him notes all day saying that I wanted to speak to him. He wouldn't reply. Finally at the end, when the meeting broke up, I just jumped over the barricades and marched right to him and confronted him face to face and he said of course he'd be willing to give me an interview. I said. "Okay, right now." And we sat down. He sat in Lougheed's chair and we conducted the interview for about half an hour as the sweepers swept up around us. So I did get these interviews. I went around to mainly the Departmental level, not so much the Ministerial level. I did talk to Boomer Adair. That was more of a confrontation than an interview. Jim Horsman also gave me an interview. So I did have access to some there and a lot of the Department heads and people who were directly connected to the provincial end of things. It was a mixed thing, but I did get through with some effort. People did talk to me and I got a lot of information like that.

Michael Asch: Did you have any occasion in these conversations or in any of the other information that you had, to look into the rationale behind the retroactive legislation?

John Goddard: The rationale?

Michael Asch: Or any discussion of it?

John Goddard: No. I think that decision was made at a very high level by Peter Lougheed and by Howard Irving, who's now a judge on the Court of Appeal. He was Peter Lougheed's legal advisor at that time on aboriginal affairs. Howard Irving was also the lawyer that was involved -- he goes right back to the retroactive legislation but then all the way through to the injunction hearing before Justice Forsyth and the appeal. He was a very prominent player. Also in that whole effort to create a provincial hamlet at Little Buffalo. Howard Irving was behind all of that. Howard Irving would not agree to an interview and Peter Lougheed would not give me an interview. Now I did not try as hard with those people as I did with Milt Pahl. I was determined to get to Milt Pahl because I knew eventually if I tried hard enough I could probably get him. But Peter Lougheed and Howard Irving during that period in particular -- they were just not commenting on Lubicon at all. Nobody could get to Peter Lougheed on this. So I went through a kind of formal process of asking them for interviews, but I did not really determinedly track down those people. I had to, in a sense, concentrate on what I thought was possible. So to answer your question -really, no, the retroactive legislation, I really covered that more from what happened rather than try to get inside the minds of the lawyers who did it -- which is dangerous territory anyway. I had to really watch myself because of the legal problems I might have created for myself by taking on...

Michael Asch: On the federal level, did you ever have the opportunity at any point along the way to have the kind of discussion in which someone might explain to you in a non-formal way their own concerns, their own views about what was going on?

John Goddard: You know, I kept having fantasies about this. Remember when I created the fantasy if I were Indian Affairs Minister what would he the perfect situation? I kept thinking, what would be the perfect situation sitting down with -- I imagined some off-the-cuff bar room encounter with David Crombie or somebody very close to him. I couldn't quite imagine that situation with Bruce Rawson, who is much more official. But you know, just somebody, because I thought there's got to be sore people around who have a human understanding of this situation who would like it to go better than it's going and could explain what the real concerns were of the federal government and what was putting them off about it. What was raising their resistance to seeing that this case was really resolved? That situation just never arose...

(change tapes)

... there was one case where the spokesman for Jim Horsman -- I did have, now that I think about it, that got very informal. Barb Deters. I don't know if you know her but she was the spokesman for Jim Horsman who was at one time in charge of Native Affairs after Milt Pahl. She was a very approachable kind of earthy type who wasn't afraid to show emotion, show feeling for this thing and was involved with the Ft. Chip settlement and was proud of having Indian friends and wearing Indian-designed clothing and so forth. She talked to me about going to Lac Ste. Anne for that annual event. She called me up one night, the night before I was to leave Edmonton, quite late at night. And we had a discussion. But it just kind of roamed around. I started taking notes as we talked so that it wasn't exactly the situation that you're asking about. I did feel that she was still a spokesman for Jim Horsman and that it would be valuable for me as a reporter to make this kind of interview, really, rather than just -- with her I wasn't comfortable about making it a totally casual kind of thing. She just kind of roamed around from -- like these swings of feeling sympathy and "No. I can't believe what you're saying about the" -- what was the event at that time? I'm not recalling this exactly, but there was some -- "I can't believe that part about the..."

Fred Lennarson: As I recall, John, it was to the effect that "you may think this is terrible and awful and so on but maybe it serves the government's purpose".

John Goddard: Oh yeah, and "I can't believe that part about a master strategy". You know, how I talked about getting Indians off the land into these government built settlements and the programs that were coordinated among about four different departments to create that provincial hamlet. It was beyond her imagination. She said she sat in on lots of high level meetings and just can't imagine the kind of Machiavellian thinking that might go into such a program. However, she wouldn't be privy to those kinds of meetings. That's why I mentioned that this must have taken place at a very high level.

Michael Asch: After all the work that you'd done and all the difficulties meeting, do you have any ideas... as to what might be happening behind some of this?

John Goddard: I've thought a lot about it. And I changed my mind an awful lot too. Because sometimes I'd think -- okay, one of my theories is that this is an unconscious process. That we are going about this whole thing in a kind of delusion that we really are sincerely trying to help Native people. That maybe it's out of ignorance or maybe it's out of being more informed but -- I mean, I had to ask myself is it possible that the federal people when they went about creating the Woodland Cree really believed that they were serving the Native interests? Did they really believe that the Lubicon leadership was obstructionist and that these people really deserved to have the kinds of social programs other Native people have and it is our responsibility in looking after Native rights in this country that these people have those programs delivered? Every time I approached that and tried to be really generous in my appreciation of that situation, I was always, you know -- I still was not able to justify the actions, like breaking all the rules and buying votes and leaving people just destitute. That was the problem. Every time I tried to go through the scenario that these people are acting basically out of good will and trying to live up to their responsibilities, there would always be some problem with that theory down the line. How could they not know? This is their job to look after Native rights. This is their responsibility. And they are not living up to those responsibilities and they are breaking the law in doing it. I would like to believe that there's lots of people in Indian Affairs who want to see things go well. But I don't know. There's just a real problem when you look at the facts in this case. It's a real problem.

Michael Asch: I'm asking you this because one thing that we're going to be trying to do is figure out some kind of an approach that will help. And so that's why -- that's the basis for my asking, so I can get a sense. We haven't heard -- now it looks very clear that the federal government isn't going to come. It's very clear that the provincial government isn't going to come. So we don't really have a way of finding these things out.

John Goddard: Yeah, that's the same problem basically that I faced.

Michael Asch: Right. You spent a lot more time trying to work through all this stuff than we'll ever be able to do. So it's on that basis that I asked you the question, to try and figure out, is there an approach that can be used?

John Goddard: Well, I'll tell you that I took the trouble to come out here from Montreal because I'm hoping this Committee can help. I saw your credentials. I saw the cross~section of society that is represented in Alberta. And to me this represents a substantial hope for the Lubicon people in a landscape where there really isn't much else. I have taken the effort to make my views known for whatever they're worth -- and I know you're talking to a lot of other people -- because I guess a couple of other things have come to my mind. You know, with this whole referendum experience people voted no and the interpretation of that is that they're sick of the politicians and we're going to do something about it. This doesn't exactly follow, but in my mind, "Let's do something for ourselves then and take some action." So this citizens' committee, this cross-section of Alberta society, it seems to me, there are possibilities there of taking this out of the hands of the politicians and the bureaucrats who have been at this so long in an atmosphere that is increasingly poisoned and a citizens' committee which does not have the same vested interests as somebody like Ivan Whitehall, who set his legal strategy in 1975 and has a personal career interest in not just all of a sudden reversing it; or the interests of Brian Malone who is -- well, there's no need to point out these people and what they might be thinking. I think that you are in a position to really look at these facts head on and deal with them head on and make a pronouncement on behalf of the citizens of Alberta. I think if I were on the panel that's what I'd think of myself as. That I am representing the people at a time when the people are sick of politicians.

I believe that a resolution of this case does serve the people of Alberta and the people of Canada. When I outlined the pattern of initiative of this Band all through history, going for treaty rights, setting up a reserve even when they weren't recognized, welcoming oil development as long as their land rights were recognized and they could prosper from that investment and then mounting this incredible international campaign through 12, 13, 14 years of just incredible oppression, that is really beyond my imagination. What if in 1994 the people of Alberta made an investment in that community instead of Novatel or something like that? I mean, I think there is a kind of racial problem to get over and that dealing with this issue is a smart investment and would profit everybody. There's just no question of that in my mind. And yet a sort of easy way of thinking about it or a common way of thinking about it is that -- or how people express it -- is that this is not just a percentage of revenues from the territory going back to local people but it is tax payers' money coming out of our pockets and being given free to people who don't work very hard. And that's just an awful travesty in itself.

Jennifer Klimek: Are there any further questions from the Commissioners? John, we'd like to thank you for your time today. The hour's gotten late and we very much appreciate your taking the time to come out to Edmonton and once again, thank you on behalf of the Commission. I'd like to adjourn the meeting until 1:30 this afternoon.


Jennifer Klimek: We'd like to reconvene the afternoon meeting. We'd like to welcome Mr. Krebes and Mr. Koliger who have done an independent cost assessment, I believe, and I understand they both have a presentation to make. Perhaps you could start out by giving us a little bit of background as to what your task was and how you came about it. If you could give your presentation, then we'll open up the floor to the commissioners for questions.

Bruce Koliger: Bruce Koliger. I'm with Koliger Schmidt, architects and engineers. My colleague here is John Krebes of Butler, Krebes and Associates. I'll briefly describe a little bit about our firm and what our terms of reference were and pass the mike over to John so he can do the same. Our intention then was that I would present the methodology and the results of the study which we prepared and then John will make a similar presentation. If at any time during that presentation you have any questions, don't hesitate to interrupt and we'll deal with them as they come up.

Our firm was selected initially by the Lubicon Lake Indian Nation to prepare this study and concurrence was achieved with Indian Affairs that we do this work. The terms of reference were prepared based on proposals made by our firm and discussions and negotiations between the two parties, which essentially in our case consisted of looking at the lists of facilities that had been prepared by both the Lubicon Lake Indian Nation and the government of Canada and preparing current cost estimates for those facilities. Our mandate was not to comment on the nature of the facilities or to deviate in any way from what had been proposed by either party. So essentially all we were doing was costing what each party had proposed.

I'll give you a little bit of background on our firm and our qualifications in this area. We are a multi-disciplinary firm with specialists practicing in the areas of architecture, structural engineering, mechanical engineering, cost control and building sciences. Our clients include governments at various levels including city, provincial and federal and some of Canada's largest developers in the commercial field. In the course of events as we develop projects for other clients we prepare cost estimates using in-house specialists like quantity surveyors and others, and so essentially our task in this case was rather than a single building for a client which we would normally undertake, was to look at all of these facilities in total. John?

John Krebes: As Koliger Schmidt was, we were retained by the Lubicon Nation through a contribution agreement with Indian and Northern Affairs to provide a community plan and a capital development plan for the development of a community to accommodate the Lubicon Indian Nation. The assignment included consideration of demographics, site investigations, development of servicing concepts and the associated cost estimates for the community.

Butler Krebes and Associates has been providing civil engineering and land planning services to clients in Alberta since 1968. Many of our clients are small communities, municipalities, Indian Bands and Metis settlements in northern Alberta. Our fields of expertise include land evaluation; feasibility studies; site master planning; land development; water supply, treatment, distribution and storage; waste water collection and treatment; solid waste disposal systems; fire protection systems; road and pavement design with particular emphasis on remote municipal systems. We have been involved with a number of Native communities in the province providing services through from initial planning to feasibility studies, pre-design, design, and services during construction. An example of some of these are as follows:

Ermineskin reserve -- we prepared a long-range capital development plan and previous to that we provided engineering services for a sewage disposal system.

Horse Lake reserve -- we conducted a village development study.

Meander River reserve -- we provided civil engineering services for a water and sewer system and for their roads.

Saddle Lake -- we developed a long-range village development plan.

Whitefish -- we also conducted a long-range capital development plan.

Kehewin -- we provided engineering services for a water supply and distribution system.

North Tallcree -- a water supply feasibility study.

Paul Band -- a water and sewer extension.

Sucker Creek, Sunchild, Whitefish Lake -- we provided civil engineering services.

We believe that this background provides us with a solid understanding of the cultural and location factors that impact planning of communities for indigenous people in northern Alberta. At the same time our extensive involvement with this type of project has given us a good working knowledge of the nature of the operations of Indian Affairs. In selecting Butler Krebes and Associates for this assignment, the Lubicon Nation and Indian Affairs have expressed a confidence in the experience and integrity of the firm to provide an independent and impartial assessment of the infrastructure required to develop the community.

That's about it as far as the background and experience is concerned.

Bruce Koliger: You earlier referred to us as independent cost consultants. I think I want to put a codicil on that a little bit. To the extent that this study included access to documents prepared by both parties and to research documents of the Lubicon Lake Indian Nation, we can argue it probably could be more appropriately described as a third-party evaluation of costs since it wasn't totally independent of work done by others. Our evaluation does not include the estimated costs for infrastructure. That's in John's report. Nor does it include the costs of vehicles, machinery, equipment and so on.

I mentioned earlier that there were two lists that we were asked to cost. The first list shown here is the Lubicon Lake Indian Nation proposals. It includes a section on community construction, commercial construction and agricultural construction. The government of Canada proposal includes community construction items only. For comparison the numbers in each case correspond to similar types of facilities on both lists.

I want to go through the methodology and the organization of the report. It's fairly lengthy, although a large part of the report is repetitive in nature as it deals in a similar stricture with each facility. The material in the bulk of the report is organized showing project descriptions, summary estimates, and building type cost models.

What we've done is prepared a written scope of work for each facility to the extent that that could be defined at the present time. The size and nature of each building proposed, as I explained earlier, has not been adjusted with one exception that I'll deal with later. In other words, we simply took the proposals from both parties as we found them. We expanded on them in the programmatic sense to provide further definition of building types, but if a specific area was specified by either party we didn't deviate from the total area. So that the size of each building is consistent with that which has been proposed by either the government or the Lubicon Lake Nation.

I should make a note on one of the elements, which is a relatively important part of the costs, which is furniture and equipment for each facility. Because the nature of the study did not involve extensive programming or consultation with the parties, we simply used the figures that each party contained in their estimates for furniture and equipment. So if the government, for example, would carry 10% of the school estimate for furniture and equipment we used that number. In the case of the Lubicon Lake proposals, we used the numbers that had been carried in their 1988 proposal. We adjusted them for inflation to January 1992 dollars.

Each cost estimate included basic costs for the building, site work, furniture and equipment and an allowance for architectural and engineering fees. We have a section on building type cost models for each project type. The models are identified by name, the place that they were originally constructed, the year of construction and a brief description including construction in the area.

The kind of estimates that we're doing are referred to as class "D" estimates and this is something that is going to come up from time to time in my presentation. Class "D" estimates are largely based on costs of other buildings of a similar type. They include in this case projects which were actually tendered, some designed by our firm, some designed by others. They also include published cost models. In each instance, because many of these projects were not tendered in the current time frame it was necessary to adjust those costs to 1992 dollars. The base that we used for our estimate was January 1992. So for a model that was constructed in '88 or '87, for example, we applied cost factors to adjust those costs to current levels. We have utilized in doing so a cost index published by Hanscomb's called Yardsticks for Costing. It's a national publication which has several base cities across the country. In Alberta the base city is Calgary. So in the first instance we adjusted costs to a Calgary base, January 1992. In addition in most instances the model that was being used was not exactly the same size as the proposal of either party and so it was necessary to do a further adjustment using cost modifiers based on size that are produced by the R.S. Means company which is an international cost consulting firm, the basic premise being that larger buildings are less expensive to construct than smaller ones of a similar type.

Location where any one of the models was constructed also has an impact on costs, and so it was necessary to adjust those models again to initially the Calgary base and then later adjusting those numbers to the Lubicon Lake site itself.

This is an example of the basic project sheet prepared for each project. This is an example of one of the school options for the government of Canada proposal referred to as Option A, 450 residents.

I should note, by the way, that the government proposal was structured on the basis of options A and B for 3 population scenarios. A population of 300, 500 and 700, with an assumption that 90% would live in the community; hence, 270, 450 and 630 were the numbers that were based for sizing these facilities. In this instance the size of the facility was determined by the federal government at 2,365 sq. meters and these were the facilities that were intended to be included, including the number of students it was intended to accommodate.

This is an example of the building cost model that was used, which happens to be one of the projects that we have designed -- Aurora Elementary School constructed in Drayton Valley tendered in December of 1991 and currently under construction. The cost of the project, the size of the project, a brief description of that project and then the adjustment. In this case, to 1992 dollars required no adjustment. The building size had to be adjusted by a factor of 7% because the government proposal is smaller than the school that we used with a location factor to Edmonton dividing by 9%. In other words, Edmonton is less expensive than Drayton Valley. We made building quality adjustments in certain instances, and in this case, for example, allowing for an emergency generator for the school and another interior finishing material. This is typical of the models that we've used and the way they are structured.

In each instance those models were summarized in a table. We looked at the average cost of those models and the median costs. In this case we looked at 7 different models for the school. We noted that the range from the lowest cost school to the highest cost was 16. 5% and that the maximum deviation from the high or low school was 8.5% to the average and 10.6% to the median. That deviation is well within the range of a class "D" estimate, which is considered to be plus or minus 20% accuracy. We selected in this instance a rounded median value of $1,270 per sq. meter and in each instance we made decisions whether to go with the average or the median based on various assumptions which we have stated in our report. So the selected 1992 Edmonton based price per sq. meter was $1,270 per sq. meter for the school.

We've then taken those numbers and we used a factor of 30% to adjust the Edmonton-based cost to the Lubicon Lake site. And I'll be discussing later how we arrived at the 30% number. We've added a factor for site work, and in this instance because site work for public schools is typically fairly limited with playgrounds provided by way of a public reserve, in this instance we've added another 5% to bring it up to Indian Affairs standards which would typically include a track and all the other facilities that you would associate with a school of this type. We've carried in this instance 10% for furniture and equipment in accordance with the government of Canada proposal and we've carried an estimate of basic and additional fees and expenses for architectural engineering services based on our Alberta fee schedules. The total rounded off to $2,111 per sq. meter at the Lubicon site.

In the final analysis, the application of the proposed area times the unit price of $2,111 yields the cost of the building.

So the entire project, the bulk of it is consisting of models of this nature addressing each of the facilities on the list and organized in the same manner. Are there any questions at all so far?

I'll show you one further example which deals with housing, and that's probably relevant to one of the issues that I'm going to raise later. In this case housing was based on conventional stick-built wood frame, the kind of housing you see constructed in Edmonton. This again is the Indian Affairs proposal, or rather the government of Canada proposal for 450 residents. Using a Department formula they derived a need for 120 new houses with a total area of about 92.9 sq. meters each, which is about 1,000 sq. ft. Now this proposal, as was the Lubicon proposal, was based on the notion that 30 houses would be relocated from the existing settlement to the new settlement, so in the final analysis the proposal as it was structured by both the Lubicon and the government would have been a certain number of new houses plus 30 relocated and renovated houses.

Again, as was the case with the other projects, we looked at a number of cost models, we determined an average and median cost for those models which are actually very close, and selected a rounded value of $700 per sq. meter to which we applied the various set of factors identified earlier. In this case we've used the 30% adjustment for Lubicon Lake as we have for all of the projects. We did not carry an allowance in this instance for architectural and engineering fees because our assumption is that in this instance arrangements would be made with a house builder to provide both design and construction of these units as is typically the case.

The cost of the housing using those factors was determined to be approximately $84,000 for a unit of 92.9 sq. meters, or 1.000 sq. feet at the Lubicon site.

One of the models that was utilized in this instance was a model from the Department of Indian and Northern Affairs cost reference manual. This is a manual which includes examples of buildings of different types that they use internally to establish a reference data base and therefore proposals for various communities. In this case it was a three bedroom bungalow built at Saddle Lake for $65.000 in 1984.

We talked earlier about location factors for converting Edmonton-based costs to the planned construction site and you'll note that I used a figure of 30%. Obviously the geographic location of the Lubicon Lake site will have an impact on costs. One is looking at shipment of materials and equipment and, more importantly, and a fairly significant portion of the cost is that given the location of the site, its distance from Peace River, a construction camp will have to be established yielding costs somewhere in the neighborhood of $80 per person per day for accommodation in the camp. When you add that to the cost of labour, you find that a very significant percentage is added to the cost of labour on a site like this, and that combined with shipping costs and so on yields a figure of about 30%. It has to be said that the magnitude of the impact of costs will to some extent be dependent on market costs at the time these projects are tendered. In other words, projects on a location like that may be less attractive in an instance where the market is fairly busy and the contractors have the option of addressing their needs for a volume of work with work in a major center like Edmonton or Calgary, for example, as opposed to a more remote location. To some extent, we noted that this category needs to be addressed to some extent under risk factors, which is something I will be talking about momentarily.

In order to derive the 30% figure we looked at a number of different sources. Alberta Public Works, for example, uses a factor of 25% for the Peace River area, which includes Peace River itself and the surrounding communities. We also looked at Alberta Education's support prices for schools in remote locations. Currently, for example, the factor for the town of Peace River is approximately 15% more than Edmonton itself. Our experience has been that contractors working in this area typically have to source most of their staff from Edmonton, that there isn't a wide availability of workers in the Peace River area who are not otherwise employed. So while motel accommodation is locally available, as I've noted, the Lubicon Lake site is too far in terms of driving time and distances to really consider that option, and so we looked at the development of a construction camp.

Our estimate of camp accommodation as opposed to alternate arrangements in the town of Peace River we believe will add from 6-9% to overall building costs. And that additional travel and shipping costs may add again something in the order of 5-6%. We concluded that the Lubicon Lake site, then, as compared to Edmonton, will probably range from 26-30% of Edmonton-based costs. We've also talked to general contractors who have been active in that area and other similarly remote communities who suggest that location factors for Lubicon Lake ought to be in the range of about 30%. We also looked at the Department of Indian and Northern Affairs cost reference manual methodology that they use in determining these factors and found that considering all the issues that they address that we're also looking at a number that's fairly close to what we already determined -- and that's 29.5%.

So in conclusion considering all the sources and different ways of coming at this problem, we determined that 30% would be an appropriate number.

One of the issues that had been addressed in the government of Canada proposal is escalation. By escalation we mean increasing costs of construction over a period of time. Both proposals are predicated on the notion of a 5-year construction process. This is an example taken from the Lubicon proposal, which may ultimately not be the schedule that's utilized, but this is what was initially proposed for the years of construction for various buildings. By taking that schedule and applying inflation factors to those numbers we determined an overall escalation factor to be applied to these prices over the five year period.

We used a number of sources in determining what these escalation rates ought to be and I want to explain what two of these are. One is the CPI with which you're probably familiar. It's a publication of Statistics Canada. It measures the Consumer Price Index. The other was the document I referred to earlier which is Hanscomb's Yardsticks for Costing published by Southam Business Communications; and we have cost trends from Hanscomb's Yardsticks for Costing from January 1973 to January 1992. The CPI index is based on an average annual index from 1973 to 1991. The Yardsticks for Costing varies from April in its earlier years to January most recently. So these numbers are slightly out of sync, but they're essentially comparable. We used projections for the period 1992-1997 based on the last federal budget which saw projected increases in the CPI of approximately 2% per year.

This chart shows the Consumer Price Index in red and shows Yardsticks for Costing in blue. You can see what's happened over the period 1973 to 1992. By and large construction costs largely fall on the general curve of the CPI.

Now, I should explain a little bit about how the construction costs are derived. Those are average unit costs that are developed by that firm on a yearly basis. They also do a quarterly analysis of unit costs as well for a particular building model. This is an average of the unit cost increases for all construction materials used in nonresidential construction in Canada and adjusted for each Province, in this case Calgary. Now although the construction curve generally falls on the CPI, this is not to suggest that they're related but simply indicate that the factors that create one curve tend to impact on the other as well. But what you'll also notice is that the CPI increases at varying rates, not always the same rate, but always increasing. In fact, going back to our records we found only one instance where the CPI had decreased since those figures were kept back in the 1920s. The one year was during the depression. Otherwise, even during recessionary times the CPI increased, even at a modest rate. What happens with the construction industry is it's very responsive to market conditions. So you see in here during the 70s and up until 1982, the construction index is climbing at a slope that approximated the CPI but started pulling away during the boom years. During the recession of 1982 construction costs dropped substantially from January 1982 to '83 and continued its downward trend until 1985 at which time there was a substantial adjustment in one year which got back on the CPI curve. That adjustment was nearly 20% in a one year period. It deviated slightly from the CPI curve dropping or leveling off a little bit, climbing back on the curve, starting to go above the curve which might have suggested this kind of thing happening again, but of course we were then hit with the current recession and costs have dropped once again until as you see, as of January 1992, the Yardsticks for Costing curve was slightly below the CPI. If one were to extend this graph to figures based on tendering being experienced now, we'd find that this is going down even further. Virtually every major project that our firm has tendered since January has been 15-20% below budget. What this does mean though, based on historical evidence. is that at some point this is going to correct itself. We can reasonably expect, on the basis of, that it will at least reach the CPI curve again if not exceed it. The curve beyond this in the future, as I mentioned, is based on the last federal budget with increases in the CPI of somewhere in the neighborhood of 2% a year or slightly less. I think in fact this year the actual increase is falling below projections, which suggests probably a stable construction climate for some time particularly given the fact that the market is currently very depressed.

Just for your interest, these are the figures from Yardsticks for Costing published for 6 major Canadian cities -- Montreal, Winnipeg, Ottawa, Calgary, Toronto, Vancouver -- and you can see how Calgary has performed compared to the rest of them, generally speaking peaking and climbing more during the boom years and taking a greater fall when the recession hit. Currently what you can see is that Alberta has dropped slightly, Toronto has taken a deep plunge and Ottawa, interestingly enough, doesn't seem to suffer the same problems from year to year as the rest of the provinces, being fairly steady, exhibiting neither major increases nor major drops.

We included a further chart simply to indicate that the deviation in Alberta isn't entirely due to something like the impact of the CPI. As you can see, generally speaking during this period from 1978 to 1992 the CPI for Canada as a whole, for Calgary, Regina and Vancouver, it generally follows the same curve, although Calgary's was slightly higher during those boom years.

You may be wondering why this issue was addressed in this kind of detail. It relates to the nature of the proposals of both parties we're dealing with, and expectations that both parties might have as to what construction costs might actually be over the five year period following settlement. In the instance that one might have considered estimates to be perhaps on the generous side, one has to consider that the current deviation in construction costs that I mentioned, with projects coming in 15% and 20% below budget, is a temporary anomaly that is going to correct itself in the same way as it did in 1985 when I mentioned a 20% increase in one year. So the significance of these charts is that although current construction markets are depressed, one can't expect that these are going to remain so for certainly not the duration of five years that's planned, and in fact, whether or not the construction market improves in terms of a volume of work, there will undoubtedly be a correction in pricing in any event because when contractors are bidding for cash flow, ultimately they face a point in time at which some contractors will become insolvent or bankrupt. And then they will start raising their prices. And so whether the volume of work increases or not, construction costs are bound to rise. So our expectation for the purposes of this study and in terms of planning for escalation of construction costs was that the construction curve would again intercept the CPI curve and that we could reasonably expect that at least over a five year period, construction escalation would equal the projection of the CPI. Are there any questions so far? Did any of that make any sense to you?

This isn't part of the report but I've included it anyway because it's illustrative of what I'm going to talk about now. Someone is buying a doll house for their child and the caption is "That for pure realism. the price includes cost overruns and schedule slippages".

Which brings us to the topic of contingency and risk. Typically at the outset of a design project, consultants carry a contingency, what we refer to as a design and pricing contingency, that allows for the simple fact that in the early stages of a project you don't have a specific set of drawings from which you can derive an estimate. In this case, we have no drawings whatsoever. We're simply looking at the size of a particular building, the type of building, and we're comparing that to other buildings of a similar type -- what we referred to earlier as a class "D" estimate. It's standard procedure for the Department of Indian and Northern Affairs to carry a contingency but their use of the contingency is somewhat different. They carry it as a construction contingency to allow for unforeseen things occurring during the construction period.

The Department also carries an element called risk. The potential accuracy of an estimate at any stage varies depending on the amount of information you have. At a class "D' estimate, as I said earlier, it is considered to be plus or minus 20%. That's a reflection of what we in the industry would consider the tolerance of the estimate. The government uses the terminology risk, and under Treasury Board regulations, they are required to carry an element for risk in their budgets -- a kind of a "What is the worst sort of thing that could happen?" And that's to be carried in the budget for that project.

As I mentioned, class "D" estimates are based on an order of magnitude estimate. They're based simply on other types of buildings, without reference to the details of particular buildings that might be constructed at Lubicon Lake. The other levels of estimates -- class "C", "B" and "A" -- are the kinds of estimates that one would prepare as drawings are being prepared leading up to a class "A" estimate just prior to tender. The Department's cost reference manual deals with the various levels of estimates and defines class "D" as a preliminary estimate which, due to little or no site information, indicates the approximate magnitude of the cost of the proposed project based on the clients' broad requirements. This overall cost estimate may be derived from lump sum or unit costs for a similar project. It may be used to develop long-term capital plans and for preliminary discussion of proposed capital projects.

The Department's manual carries a chart which suggests what the magnitude of the risk element might be at various levels of the estimate. You can see at class "D" it's fairly high, ranging from 10% to as high as 75% of the estimate. It declines as you approach class "A" which is typically prepared just prior to tender when you have a fairly good idea of what the construction market conditions are because you're in that time frame and when drawings and specifications are complete. Naturally if you look at an estimate and you say that it has a risk of 75%, all credibility in the estimate is destroyed. So it would be rare that one would consider carrying a risk of that magnitude.

The Department document defines what kinds of risk that they consider. Some of these are, for example, the quantity and quality of pre-engineering information; for example, the lack of detailed soils investigation. One might discover conditions when you're actually building are different from the soils tests that were previously taken, and so this might lead to higher than expected construction costs. Things related to tender and construction schedules, and probably the most difficult to pin down is the construction market. They give an example here of other major construction projects starting at the same time and at the same area which might reduce competition in the bidding, and they note the oil boom in Alberta being an example.

As I mentioned earlier, even within the market, for the province as a whole -- which is a macro-market -- you need to look at micro situations. And if contractors are finding that they're not terribly busy, but they're busy enough with work in major centers, you tend to find construction costs for work in more remote locations tends to go up at a greater rate than one would normally expect just by looking at escalation alone. In other words, the desirability of the project is going, to some extent, affect the kind of bidding you get on the project, the number of contractors bidding due to the desirability of that project to those contractors and therefore the cost.

Did you have a question?

John MacMillan: Like your yardage prices on your risk factor, were they based on what you could get for a yard of dirt moved to Calgary for say $1 a meter? We'll talk meters, not yards. I guess we'll talk meters. Is that the same factor you'd use in Cadotte Lake?

Bruce Koliger: No. As I indicated earlier, when we looked at factors for the location at Lubicon Lake, we were considering 30% over and above Calgary based prices. The location factor is different from the risk factor. When I talk location factor, that's an estimate of the additional costs involved in -- soils moving might not be a good example -- but the cost of shipping materials and assembling components on site. When I'm talking about risk, what I'm talking about is the tolerance of the estimate. In other words, if I give you an estimate you have to accept that there's some risk in that estimate. What is the tolerance of the estimate? What is the likelihood that the actual cost will come within a certain percentage of that estimate? And that's what we're talking about when we talk about risk. So we're saying at the class "D" level, the estimate has a plus or minus 20% risk. And that history will show that by and large, a properly done class "D" estimate will yield an actual project that is within 20% of that estimate plus or minus.

John MacMillan: That's on your building and your materials. I'm talking about yardage -- on ground dirt preparation, for example.

Bruce Koliger: Well, when we're looking at 20% risk we're looking at the overall project.

John MacMillan: Even on ground preparation?

Bruce Koliger: We're looking at the total. It's an average. Obviously certain parts of the project are not as risky as others. If you're looking at soils conditions, naturally soils conditions may amount to more than 20% of the cost of the foundation themselves, for example, but if you look at the percentage the foundations represent of the whole -- let's say the risk was 50%, for example, or even 100%, you're talking about a large percentage of a smaller number. On the average, what we're saying is that it's wise to carry a 20% risk element at this stage of the estimate.

John MacMillan: That would be based on your water table level in the different areas?

Bruce Koliger: That would be based on the fact that at the moment we only have preliminary soils investigation, with a few holes drilled in several locations but none of them specifically drilled at the site where any one building might actually be constructed. Based on your question, you obviously realize that soils conditions can vary widely even within a couple 100 feet. So that could have a significant impact on the cost. Now ultimately if the project proceeds to further design, other soil tests will be taken, as you approach class "A" estimates just prior to tendering, you should know what the soils conditions are at your specific location.

John MacMillan: What I was concerned about was the drying factor -- like in the Prairies where there's no trees and the drying factor, dirt and clay in the bush -- there's quite a difference. Going back to your water table level, if you're going to dry your soil, 20% isn't very much money.

Bruce Koliger: No, it isn't on the foundations themselves. But it's a fairly substantial amount of the overall project. And I should note further that we addressed this particular issue. All of the major buildings that could utilize that kind of a system were designed on piles with structural floors as opposed to slab on grade, for example. So the cost estimates for the school were predicated on a structural floor with pilings so you're not depending on the bearing capacity of the soils or the fact that they might swell heave and retreat, to affect the design of the floor slab.

The government notes that local contractors may not be available; the utilization and logistics for outside contractors could result in higher costs. In the Peace River area there aren't a substantial number of local contractors that could necessarily handle all the aspects of construction at this site. So this is an issue.

They talk about non-quantifiable items. Examples of such risk include two items that probably wouldn't apply to the project but a third which does. The contractors may charge a premium to accept a local labour contract clause, which means stipulating a certain percentage of local people being employed on the project.

As I noted earlier it's standard industry practice to carry design and pricing contingencies. At the class "D" estimate stage we carry a 10% contingency. That contingency typically declines as we approach tendering at which time it's replaced by a 2% or 3% construction contingency. So we start with 10% and it declines. The government suggests in their manual that contingency should be in the order of 10% for Departmental projects. They're talking construction contingency only. But however you define it, we're both looking at a 10% contingency.

In the case of risk, as I noted risk is a government term -- when we talk to clients about the variabilities in estimates we don't talk in terms of risk, we talk in terms of tolerance-- but they're essentially describing the same thing. Except in the case of Treasury Board requirements, they're required to carry a number in the budget for risk.

I mentioned that order of magnitude estimates are class "D" estimates which are considered 20% plus or minus. This is based on industry standards and confirmed by the R.S. Means Company which is an international group of cost consultants and publishers.

Now I've noted also that there are numerous additional factors which serve to complicate this particular exercise, including the location of the site, the time frame that we're talking about in constructing this community over five years, the fact that we think that we're emerging from a recession, and the methodology to be employed in seeking contract bids which in all likelihood will include some kind of local labour clause. These aren't factors that you'd normally have to consider in an environment such as Edmonton. And we note as well that the impact of any of these factors is in many ways very speculative -- they are factors which are beyond our control, and beyond the government's control, and the Band's control -- these are things that are going to happen due to events that we can't always foresee and can often not predict.

What we've concluded in the final analysis was that we would carry a 10% contingency on the estimates and at a minimum, a 20% risk. But we note that there are other considerations involved. One is the local labour clause. The extent of local labour that will be available or imposed on these projects hasn't been defined, but a reasonable allowance, we believe in this case, based on our past experience and talking with general contractors who've worked in these conditions, would be an allowance of about 2% of the project cost. Now obviously that can vary depending upon the number of people that are involved locally and the experience of the contractors involved in these types of systems. But that's a fairly modest percentage and fairly consistent with the government's estimate which is about 1.5%.

We are carrying a 30% factor, as I mentioned earlier, for escalating costs from Edmonton to the Lubicon Lake site. And we've noted in the report, this is a very soft number and it's highly dependent on the construction market at the time. For example, when work is in short supply, construction workers are more willing to relocate where the work is and make less demands in terms of accommodation, subsistence, travel expenses, and so on. But if, for example, as I indicated earlier, most of the construction workers are sourced from Edmonton or other locations like Calgary or other major centers, if they're busy on other locations they may put a higher premium on their time, which means they may ask for travel expenses in and out every couple of weeks and this sort of thing, which could impact on that factor. We're not maintaining it must be increased for those purposes, but this is a risk factor that needs to be considered.

Jennifer Klimek: Mr. Koliger, if I may interrupt at this point, we are on a bit of a tight time line here and I was wondering if -- I think we've got the gist of how you've done this -- if you've got much left maybe you could give us the summary portion of it.

Bruce Koliger: No. I'm going to make you sit through all of it ... No, as a matter of fact I was just about at the conclusion of this particular section.

What we have concluded in the final analysis was that we would carry a 10% contingency and a 22% risk.

I'm leading into a discussion of the cost summaries, which I'm sure is what you're interested in but which won't mean much without the background that I've just given you. As I indicated, there were a number of proposals that we had to consider. There was the one list from the Lubicon Lake Indian Nation, and essentially six different proposals from the government for the three population scenarios and Options A & B relating to the size of the school and other facilities. Again our dollars are January 1992 constant dollars. The corresponding Lubicon Lake Indian Nation estimates were in 1988 constant dollars. The most recent government of Canada estimates were in 1992 constant dollars, and we've shown them on the summaries.

I mentioned earlier that we did not deviate generally from the proposals of either party except in one particular area, and this is in regards to the housing. It was predicated in both proposals that 30 units would he relocated from the present site to the new location. These would be relocated and renovated. We expressed some concern about that approach during the conduct of our study, and by agreement of both parties, we were retained to conduct a preliminary investigation of existing housing at Lubicon Lake and to look at the potential costs involved in renovating them and relocating them. It was our conclusion that it would not be a cost-effective approach given the condition of the current housing. This is not because the housing has been abused by any means. But simply due to the fact that the budgets that were available when these units were constructed -- which I understand ranged to as little as $20,000 for some units -- was not sufficient to construct dwelling units that meet the national building code, and that they're deficient to such an extent that relocating them and renovating them and adding on to them to bring them up to an expected average size and to construct basements for them and so on would not be cost effective.

Briefly I'll just tell you what the condition of the units is. The thirty units were to be drawn from a group of 38 that were built in the last 12 years. One quarter of those units are only 576 sq. feet in size while the remainder are 864 sq. feet. To give you an idea of what those sizes mean, 576 sq. feet is smaller than a typical one bedroom apartment that you'd find in Edmonton. None of the houses have indoor plumbing. The smallest units consist of a kind of a living-dining-kitchen area plus 2 bedrooms and a utility room. The largest units have 3 bedrooms. There's a small electrical service. Light fixtures generally consist of bare lightbulbs. Heating is provided by means of wood stoves or space heaters, none of which consists of a modern hot air residential system. There's no mechanical ventilation provided and humidity levels are very high. All of the units are built on crawl spaces. None of them have basements. The siding is pre-finished wood siding, not very attractive. Destructive investigation was not conducted on the units to determine how the interiors of the walls were actually constructed nor how they were bearing up under the high humidity levels. There is a possibility there's been some deterioration of the structural elements but that's not obvious from a visual inspection. Shingles are of low quality. They are already curling on the houses that were first constructed. The living room windows are fixed in wood frames, others are low-quality plastic sliders, they leak, and the houses are reportedly cold and drafty -- which interestingly enough is a fortunate occurrence because of the lack of combustion air for the heating devices. The only combustion air that is available is leakage into the houses through the windows and doors. Had it not been for the case that the combustion air is provided in that manner, we might have had instances already of people being asphyxiated as a result of downdrafting or backdrafting down the chimneys. The interior finishes are of poor quality, poor quality flooring, poor quality carpet. The millwork is very low quality throughout. As we've noted, all of the units fall short of even the most minimal standards that are generally accepted for housing in Canada, including the Alberta Building Code of 1990. In addition, obviously, relocating them, upgrading them, increasing them in size and constructing basements would be fairly expensive. We've determined in the final analysis that to bring the smallest units up to 1,000 sq. feet would represent a cost of about 83% of the cost of new construction. The larger units would take about 76%. And if you're looking at conversion to larger units of 1,200 sq. feet the numbers are even higher -- 90% and 84%. On that basis we concluded that the investment in relocation and renovation would not be a wise investment. We have recommended that all houses be constructed new, which is a deviation, as I indicated, from both the Lubicon and the government proposals and, as a result, we have developed costs for new housing only as opposed to the renovation option.

This cost summary is based on the Lubicon Lake Indian Nation proposal. This column shows our figures of January 1992 costs. These show the Lubicon Lake Indian Nation figures which are 1982 costs. This column shows the difference in those costs and this shows the percentage difference in those costs. So you can see if you look at the subtotal of community construction, for example -- which is the school, housing, basic facilities, band office, community hall and so on -- our estimate is something in excess of $38 million versus the Lubicon estimate which is just over $24 million. Our estimate for commercial construction is approaching $3 million. The Lubicon estimate was just under $2 million. Agricultural construction, our estimate is $1.2 million. The Lubicon estimate was $850,000. The bottom line total constant dollars -- our estimate is roughly $42 million versus $27 million for the Lubicon estimate. Now of course you have to consider that we are comparing estimates that are 4 years apart. Ours are 1992 and the Lubicons' are 1988. To the Lubicon estimates -- if you wanted to convert those numbers to 1992 costs -- Hanscomb's Yardsticks for Costing would indicate that you would use approximately 17.25%, which represents the increase in costs on an overall unit basis from January of 1988 to January of 1992. What in fact happened was that costs rose to about 1990 and declined slightly since then. So if you look at the difference between these two numbers you're seeing a difference of about $15 million or almost 57% between our estimates and the Lubicon estimates. And the 57% would be reduced as the result of applying the 17.25% to the Lubicon estimates. There would still be a substantial difference.

In addition the Lubicon estimates did not contain anything for risk or contingencies, which is a substantial portion of our estimate. As you can see here, for these two items we carry in the neighborhood of $13. 5 million for those two items which were not included in the Lubicon estimates at all. We've also carried an escalation factor of about $3.6 million which is based on our average estimate overall, based on that schedule I showed you earlier.

The net result is that our estimate of the Lubicon list of facilities is approaching $60 million versus the $27 million the Lubicons carried in their estimate of 1988. The difference is over $32 million or 120%. In other words, our numbers are more than double what the Lubicon carried for the same list of facilities four years ago.

I won't go through all the government's scenarios...

Michael Asch: Excuse me. I'm wondering if you can turn back to that other one for a second. I think maybe I misunderstood something. There may be some kind of a technical problem here. I'm just comparing L10, the fire station, and it looks to me -- well, with any of the others in the community construction column -- and then the same thing with L21. It looks to me that in both of those cases, we have the Lubicon Lake proposal being larger than your estimates. And in the other cases where that's the case, you show a parenthesis and then a minus. In that particular case you don't. I'm wondering if that's just a technical glitch.

Bruce Koliger: No. The Lubicon proposal was for a combined fire station, police station and courtroom.

Michael Asch: I see. So Lll is a different item?

Bruce Koliger: Lll in the Lubicon estimate, these were combined, which isn't obvious until you look further in the book. So our estimate is still higher. In the case of L21 -- that's true. Our estimate was less than the Lubicon estimate in that one particular instance.

This is a comparison of our estimate on the government's list for the 450 residents, caption A. Again, the first column are our numbers, the 2nd column is the government of Canada's numbers, the 3rd column is the difference, and the last column is the percentage difference.

You can see our estimate for community facilities was $19.6 million. The government's estimate was about $14.2 million. The difference is $5.4 million or 38%. A large portion of that difference is in the housing. If you look at some of these other numbers, our school estimate is about 12% higher than theirs. We were substantially higher on the teacherages and the housing; within almost 18% on the Band office; within 21% on the community health unit; much higher on temporary staff accommodations, which I'll get to in a moment. We were actually a little bit less on the vocational training center and on the fire station. Overall a 38% difference. But as I indicated, of the $5.4 million difference between our estimate and the government's, almost $4.2 million of that, or about 80% of it, is in the housing alone.

On housing the government figure, as I indicated, was based on the relocation of 30 units, so their estimate was less for that reason. In addition, the government number doesn't represent an actual estimate of construction costs. Rather what it reflects is the government program offering. In other words, this is how much their programs indicate that they will offer for the houses, rather than as an estimate of what the actual cost of construction is.

Jennifer Klimek: Mr. Koliger, I have one question for you. I'm not quite understanding the constant dollars versus the current dollars. When you have 1988 constant dollars, does that mean that's dollars as they're worth today or what they were worth back in 1988?

Bruce Koliger: Constant dollars refers to what they were worth in 1988. In this case, both of these were done in 1992 constant dollars. Current dollars are the dollars at the time when one expects the project will be constructed.

Jennifer Klimek: So in the Lubicon case, when you brought them up to current dollars, that would have been using their requirements in today's dollars?

Bruce Koliger: That's right. Similarly what we're looking at here is 1992 constant dollars. The government's are also done in 1992 constant dollars.

So as I indicated the basic differences is in the housing and teacher accommodations. There is a significant difference in temporary staff accommodation, although the overall dollars aren't a lot. The temporary staff accommodation is for administrative members to reside on site during the construction period.

The overall difference as I mentioned is 38%. However, we've applied contingency and risk to all of these items. The government has not. The government has looked at contingency and risk on certain items and not on others. The net result is that what appears to be 10% and 20% is actually about 8% and a little less than 15% if you consider the overall sub-total.

Escalation in the government's is a little higher than what we had predicated as a percentage. They were proposing 9.55%. In reality again they did not apply that to all of these items, and therefore the actual percentage escalation is about 7.48%.

The bottom line is that we're suggesting an estimate approaching $28 million versus an estimate approaching $19 million for the government, with a difference of $9 million. Again. the bulk of the difference is in the housing.

Now there are several other scenarios. and I'm sure you'd really like me to go through all of them, but I'll just show you one more because I think it's relevant, and that's the 270 scenario.

In the 270 scenario, our estimate bottom-line is $19 million roughly versus $13 million for the government, a difference of about $6 million. Again, the bulk of the difference is in the housing.

Jacques Johnson: I've understood you very well when you said the government was not really considering, in terms of the housing, the real costs. They were just saying we're offering say $5 million to build what is really market value around $10 million roughly. Did you question them about the rationale of this and how they expect anybody to build $10 million worth of houses with only $5 million?

Bruce Koliger: This was a subject of discussion but as I've indicated to you when we talked prior to today's presentation, we're not representatives of either the Lubicon Lake Indian Nation or the federal government nor are we members of the negotiating team. I would have to decline to answer that and refer that question to the Lubicon negotiators who may wish to address that.

Michael Asch: Just to be clear again. What question were you asked to answer with this?

Bruce Koliger: We were asked to cost the government list and the Lubicon list of facilities and we deviated from that with respect to the housing. with general agreement, I should say, of both parties. The government funded, through a contribution arrangement, a further study of the existing housing at Lubicon Lake, and as a result, while both parties have costed the housing on the basis of a certain number of renovated and relocated units, we costed them on the basis of new units only.

Michael Asch: Then basically, you concluded that each side costed too low by some significant factors?

Bruce Koliger: That's right.

Jacques Johnson: Perhaps it's the same sort of question that I just asked and you don't have to answer, but at the same time, I would like to know how was your report received by the Lubicons and the government?

Bruce Koliger: Again, I think you'd have to refer that question to the Lubicon negotiators.

Jacques Johnson: That's what I thought you'd say.

Michael Asch: Was there any discussion about use of local labour, meaning the Lubicon themselves, as an issue regarding costing?

Bruce Koliger: Not prior to the completion of the report. Obviously, I think both parties, including the government and the Lubicon Lake Indian Nation, would like to see as much local labour content as possible. That's only reflected in the estimates through the additional 2% we carried for local labour costs. So our assumption is that to the extent that that labour is available, it would be utilized.

John MacMillan: You've got 25 items here for the Lubicon and you've got 10 for the government. Is that the way both parties set it up?

Bruce Koliger: Yes.

John MacMillan: In other words, the government is saying that 10 items is all they want an appraisal on?

Bruce Koliger: That's all that was in their proposal.

John MacMillan: So in the actual figures then, the Lubicons are really low on a lot of their estimates then, aren't they?

Bruce Koliger: Yes.

John MacMillan: I think you've done a real good job. I clearly understand it. The only thing I was concerned about is the drying factor of the ground works which we didn't go through, or the road building or water and sewage systems.

Bruce Koliger: No. John will be addressing those in his presentation.

John MacMillan: All right.

Jennifer Klimek: Thank you Mr. Koliger. We may have some more questions after Mr. Krebes gets through with his presentation. I think we'd like to take about a 5 minute break just to stretch and then we can carry on.

Jennifer Klimek: I would like to reconvene the meeting and I'd like to turn it over to you, Mr. Krebes, for your presentation and then we can ask any questions if we have any. Thank you.

John Krebes: I won't be quite as detailed in my description of our work as Bruce was, so if you have any questions at any time, please don't hesitate to interrupt.

First of all, I'd just like to touch on our approach to the assignment and the standards that we used.

The terms of reference for our assignment was to prepare a land use plan including a site inventory and assessment of land suitability through the use of aerial photographs, on-site reconnaissance and geo-technical information provided through a detailed geo-technical investigation. A hydro-geological study was also conducted initially to establish the viability of ground water as a water source for the reserve. However this was subsequently ruled out because of the results which we obtained. It was also necessary to identify Band goals and needs, consider soil types, vegetation, drainage, climate, circulation, environmental sensitivity and capability. In order to develop the community infrastructure plan, Butler Krebes did consult extensively with the Lubicons and outside agencies to define a community that would meet the long-term needs and aspirations of the residents. The population base which we used for our study was 450 people. Local input was also sought through numerous meetings with Band Elders as well as on-site reconnaissance.

Based on the input provided and the use of available mapping and aerial photography, a plan was developed which could be economically implemented. In general the standards selected conform to the same level we would recommend to any community initiating development in northern Alberta. The plan included the determination of a feasible water supply, sewage collection and disposal, definition of road corridors and length, power and gas concepts and fire-fighting requirements. Alternate concepts for each system were developed and analyzed after which an overall servicing plan was prepared in order to allow us to develop project level "C" cost estimates. In comparison to the costs that Bruce developed, which are class "D", our costs were based on more detailed site investigation and research, so they're considered more accurate than the class "D" estimates.

Where options for servicing included non-standard options, preliminary benefit cost analyses were done to establish the most feasible long-term option. As an example, based on this type of analysis, the option of a small diameter water main to deliver water to the rural area was recommended over the option of hauling water by truck. On the other hand, the option of a low-pressure sewage system for the rural areas was not recommended based on the same type of analysis.

In regards to the costing parameters, infrastructure costs for municipal and franchise services were developed on the basis of specific elements dedicated to serving the community as planned. Cost estimates were prepared on a unit cost basis using mainly Butler Krebes cost files for the area, Alberta Transportation and Utilities, contractors and supplier sources, as well as power and natural gas companies providing those services in the area. The unit prices included an allowance for unique considerations of the site, such as transportation for gravel and so on, as well as verifying amounts to provide for development of a local labour pool which can be utilized in the future development of the community. All of the estimates included a contingency allowance, provision for feasibility studies, design, supervision and project management. Band administration and quality control, as well as specific training where required -- for example, the water treatment plant -- were also included.

The summary of our costs based on the 450 population and the standards developed are as follows, and these are broken down into major groups:

First of all, roads: the estimate for roads includes 27.3 kms. of a 9-meter wide access to the provincial highway system, which would be graded and groveled to a standard that would allow the placement of a paved surface in the future. Also included are 29 kms. of an 8-meter wide collector road graded and groveled to a standard which would permit all-weather school bus access. As well we included 13.9 kms. of 7-meter wide residential access road. The configuration provides for access to highway SR686 in two directions from the community core area, thus giving alternative access in case of emergencies. The total cost for roads is $11,400,000.

Secondly, the water supply system: water supply estimates provide for a water treatment plant at Fish Lake and a pipeline from the source to the core area. Distribution in the core area would be to normal rural community standards including fire protection. Distribution in the rural area would be through small diameter mains to cisterns with re-pressurization being required in each house. The treated water reservoir and distribution pumping would be located in the core area. The total cost for the water system is $6,400,000.

Thirdly, sewage disposal: sewage disposal would be through a lagoon located south and east of the core area. The location avoids discharge to the Lubicon Lake and discharges downstream of the community development into a tributary of the Lubicon River. Sewage collection in the core area would be through a conventional gravity system with transmission to the lagoon by lift station and force mains. Rural sewage collection would be by means of trucks from pump-out tanks. The sewage would be hauled to the lagoon for treatment. Soil and water table conditions preclude the use of septic tanks in the area. The total cost for the sewage system is $2,300,000.

Fourth, solid waste disposal: solid waste disposal has been estimated on the basis of incineration since the initial soil survey indicates that soil conditions are not favorable for the development of a landfill. The total cost for the incineration system is $161,000.

Fifth, franchise utilities: power, gas, telephone have been estimated on the basis of information supplied by the operators in question and the total franchise utility costs are estimated to be $3,400,000.

Sixth, public works equipment and firetruck: estimates for the public works equipment are based on the anticipated requirements for the continued operation of a road, water and sewer network as planned in this described area. The total cost for public works equipment is $1,500,000.

Seven, planning studies and management: this estimate is included to cover a detailed community plan, analysis of energy options for community buildings, studies and surveys, survey control and miscellaneous studies. The total cost is $600,000.

Eight, the airstrip: it is proposed that an existing, abandoned airstrip at the northeast corner of Lubicon Lake be upgraded to allow light aircraft access for emergency use. The total cost for up-grading of the airstrip is $160,000.

Nine, TV dish and transmitter: the isolation of the community means that satellite receivers will be required to provide good TV programming. It is anticipated that this can best be achieved through development of a local cable system. The total cost for this is $250,000.

The overall total cost for infrastructure, therefore, to accommodate a community with a population of 450 people is just over $26,000,000.

That basically concludes the estimates for infrastructure. We have a further breakdown in our report, as you can see. For further information in that regard, it's a matter of just checking that chart for that purpose.

Jennifer Klimek: Are there any questions from any of the Commissioners?

Michael Asch: On what basis did you decide that you would use gravel roads as a form of road surface rather than anything else? I mean, I'm just curious as to why you decided -- on what basis did you make the determination -- or did someone give you those specifications out of which you derive?

John Krebes: No, not other than this is a common method that's used, as I said, for a community of that size. Again there is an allowance for the ability to allow for paved surfaces in the future. But the gravel is something that is commonly used.

Jennifer Klimek: Any other questions from the Commissioners? Thank you Mr. Krebes. I think your estimates here are very useful. And to you, Mr. Koliger. They'll come in handy for our evaluation. I'd like to thank you both for your time today in bringing this information and submitting your reports to us as well.

I'd like to thank the people who showed up today. We're not sure when our next hearings are. We will be advising you through the media and if anybody wants to call either Jacques or myself, we'll advise you of the next step. So I'd like to adjourn the meeting for the day. Thank you.

Go to: Transcript of Lubicon Settlement Commission of Review Public Hearing - Day Eight