Jean Crowder spoke about First Nations Financial Transparency Act in the House - June 20, 2012

June 22nd, 2012 - 5:10pm

June 20th, 4 p.m.

First Nations Financial Transparency Act



Mr. Speaker, I want to thank the minister for presenting the rationale for the bill. I have three questions for him.


First, in section 6.(1) it indicates that any entity that is controlled by the first nations would be required to disclose. The minister made a comment about the importance of economic development and of course many of these entities are businesses. What is the rationale for perhaps undermining the competitive nature of that?


My second question is about section 11. It indicates that any person, including the minister, may apply to a superior court. Why is that any person beyond a first nation; why is it any person?


The third question I have for him is under section 13.(1)(b). It was interesting to hear the minister say that they want to move beyond paternalism and yet 13.(1)(b) talks about the fact that the minister will have the ability to withhold moneys payable as a grant or contribution to a first nation. My question is: How does that change the paternalistic relationship he referred to in his speech?



June 20th, 4:10 p.m.

First Nations Financial Transparency Act



Mr. Speaker, I rise to speak to Bill C-27, an act to enhance the financial accountability and transparency of First Nations. I will declare at the outset that New Democrats will be opposing the legislation.


I will read from the legislative summary and I want to thank the analysts for the very good work they did in providing a good background on this bill.


 The summary states:


 The proposed legislation...applies to over 600 first nations communities defined as “Indian bands” under the Indian Act, provides a legislative basis for the preparation and disclosure of First Nations' audited consolidated financial statements and of remuneration, including salaries and expenses, that a First Nation or any entity that it controls pays to its elected officials.


 I will come back to the entity because it is an important reason for us to oppose the legislation.


I want to start, though, by reminding the House and people who may be listening about the UN Declaration on the Rights of Indigenous Peoples, which the government indicated it would support and take some steps in implementing it in Canada. Of course, we have seen no action on that.


Article 4 of the UN Declaration on the Rights of Indigenous Peoples says that indigenous peoples, in exercising their right to self-determination, have the right to autonomy or self-government in matters relating to their internal and local affairs, as well as ways and means for financing their autonomous functions. This is an important aspect in that this is about the right to autonomy and self-determination. This bill was not developed in consultation with first nations and it certainly does not reflect that right to autonomy and self-determination.


I will provide a bit of background. When we listen to the Conservatives, sometimes we think that first nations do not do any reporting. I have to point out that first nations governments currently do all kinds of reporting and audited statements.


 I want to refer to a couple of pieces out of the legislative summary. It



 First Nations and the federal government are both subject to various policy-based and legal requirements regarding the management and expenditure of federal public funds...


 Through various federal reporting requirements, First Nations are also accountable to AANDC for the federal public funds they receive.


 In turn, through the annual audit cycle and program reports, AANDC is answerable to Parliament and the Canadian public.


 AANDC's expenditures are listed in the Public Accounts of Canada, as are contribution agreements signed with First Nations.


The summary goes on to talk about current legal requirements and states:


 —the Indian Bands Revenue Moneys Regulations require, in part, that a band's financial statements be audited annually, and that the auditor's report be posted “in conspicuous places on the Band Reserve for examination by members of the Band.


 There have been some questions about the whole issue around access to information, and there is an analysis. I want to touch on one point on the Access to Information Act. This is an important piece of what first nations are being asked to disclose versus what other non-public sector organizations are being asked to disclose.


The summary goes on to state:


 Section 20(1)(b) of the Access to Information Act prohibits a government institution from disclosing financial information provided to it by a third party who consistently treats this information as confidential. In Montana Band of Indians v. Canada...the Federal Court held that First Nations'

financial statements are confidential information within the meaning of section 20(1)(b) of the Access to Information Act, and therefore are not subject to public disclosure. However, in Sawridge Band v. Canada...the Federal Court of Appeal held that these financial statements are not confidential vis-à-vis the members of the First Nations band, since band members may review their own band's financial statements under the Indian Bands Revenue Moneys Regulations.


This is important because these court cases indicate that first nations have a right to have this information disclosed to them, but it is not the right of the general public to have access to what could be confidential information.


Under the section titled “Current Policy-Based Requirements”, it states:


 Under the Year-End Financial Reporting Handbook, First Nations must submit to AANDC annual audited consolidated financial statements for the public funds provided to them. These include salaries, honoraria and travel expenses for all elected, appointed and senior unelected band officials. The latter includes unelected positions such as those of the executive director, band manager, senior program director and manager. First Nations are also required to release these statements to their membership.


We already have rules in place that govern the release of this information.

We heard the minister say that this was policy but now the government needed legislation. I would argue that the minister already has the authority, and in fact the minister admitted he has the authority, to request this information when it is not being submitted.


In December 2006, we had a report commissioned by the Conservatives called “From Red Tape to Clear Results: the Report of the Independent Blue Ribbon Panel on Grant and Contribution Programs ”. This report recommended a couple of general principles around grants and contributions, which included:


 1) Respect the recipients—they are partners in a shared public purpose.

Grant and contribution programs should be citizen-focussed. The programs should be made accessible, understandable and usable.


The key thing in that is “Respect the recipients”.


The second guiding principle states:


 2) Dramatically simplify the reporting and accountability regime—it should reflect the circumstances and capacities of recipients and the real needs of the government and Parliament.


Further in the report, the authors specifically dealt with first nations, Inuit, Métis and other aboriginal organizations by saying:


 Fiscal arrangements with First Nations governments are complex, reflecting not only the varied circumstances of the 630 First Nations in Canada but also the fact that payments to First Nations governments are (or ought to

be) more like intergovernmental transfers than typical grants and contributions.


Intergovernmental transfers would actually respect that nation-to-nation status that I believe Canada has agreed to through the negotiation of treaties.


The report goes on to say:


 The panel is of the view that mechanisms other than grants or contributions for the funding of essential services such as health, education and social assistance in reserve communities are needed...


 Then it went on to say that it was outside of its mandate.


The report did say:


 Nevertheless, in all our consultations...we were reminded that the current practice of treating these kinds of transfers to First Nations, Inuit, Métis and Aboriginal organizations as more or less standard contribution arrangements is fraught with problems and leads to a costly and often unnecessary reporting burden on recipients.


I come back to the fact that an auditor general looked at the kind of reporting that was required from first nations communities and, over and over again, the auditor general continued to talk about the fact that first nations were required to do all kinds of reports.


The minister spoke about the Whitecap First Nation, and I will refer to that for one second. It came up in a question. The aboriginal affairs committee was fortunate enough to visit with the Whitecap Dakota First Nation and look at the economic enterprises. The minister has argued that part of this would lead to better economic development. The Whitecap Dakota has a very different take on that, and it has raised concerns with the other entity that I referred to in section 6(1) of the act. There are many first nations like this, but Whitecap is an example of a first nation that has in place stellar reporting requirements.


The letter states:


 —that ensure the members of Whitecap are fully apprised of Whitecap's financial position. In this regard, Whitecap has approved 20 unqualified audits and has implemented a system of public review of the audits. In addition, as you are aware, Whitecap has also created the Whitecap Council Compensation Commission that has the specific mandate of ensuring that the compensation received by the Whitecap Council is fair, equitable and accountable.


 The letter goes on to say that there are some concerns about the fact that salaries or expenses are lumped into a definition of remuneration which would have the potential to mislead people as to what his salary actually was. Of course members in the House have salaries and expenses reported quite separately.


It further states:


 Bill C-27 on the other hand goes beyond the reporting related to funds received from the Federal Government. It would also appear to extend beyond the requirement for public sector reporting under generally accepted accounting principles as consolidated reporting of remuneration would include any business entities controlled by a First Nation.


The minister said that would only be salaries paid by these entities, but why would the federal government be interfering in a business project where a band member would be receiving remuneration from that business entity? If the Conservatives were truly concerned about economic development, they would focus on providing first nations the tools and resources they need to do that economic development, rather than looking at what a chief or council member was paid from another business entity. I am not clear why the minister is thinking that enhances economic development.


Many of the first nations that we visited, these were business partnerships.

A private sector company works with a first nations company in a business partnership relationship, and some of these businesses may not want some of this information published for competitive reasons. Therefore, I would urge the government to take a hard look at this.


It was also interesting to hear the minister talk about openness and accountability. In his speech he said, “open accountable government is a stable government”. The Conservatives are setting up a double standards. On the one hand, they are saying that first nations have to do more, report more, be more open and accountable, despite the fact that they file almost

200 reports every year to the federal government. The Auditor General has identified that. On the other hand, they will not come clean when it comes to releasing their own facts and figures about the budget implementation act, Bill C-38, its costs and what the impact will be on that. In fact, in an article dated June 19, the PBO said that the Conservative government was fighting him on access to information. He said that government-wide budget cuts would impact federal agencies.


If open and accountable government leads to stable government, why is this government not willing to cough up the facts and figures itself? Why does it have two different standards?.


Further on in this article, Mr. Page said, “What does this even mean?

Someone has to explain that to me. Does he mean”, referring to the Minister of Foreign Affairs, “we're having too much impact?” He goes on to say:


 Well I ain't apologizing for that. I'm not apologizing for the work we did on the F-35s, on crime bills, or on the fiscal sustainability reports. Those are all papers the government has not produced, that I produced with help from a group of people you could fit around two dinner tables.


 For months, Page has been asking for detailed information on the Conservatives' plans for implementing $5.2 billion in government-wide cuts.

Although the overall figure was revealed in the March budget, Canadians remain in the dark in terms of how the cuts will affect programs and services they use.


 Page published a legal opinion this week, solicited from a leading constitutional lawyer, that concluded that 64 agencies were withholding information and breaking the law by denying the information.


Later in this article, “Following Page's initial request for information, only 18 of 82 federal organizations came through”.


Surely anybody who is looking at this information would recognize that we have an inequality and an injustice here. On the one hand, the federal government refuses to tell Canadians about the taxpayer money it is using.

It is refusing to give that information through the Parliamentary Budget officer. On the other hand, the government is saying that first nations have to be subject to a different set of rules that the government itself does not respect. Why would they ask anybody in the House to support that bill?


There are a couple of other points I want to raise on this issue. I refer back to the Auditor General's report of 2002, entitled “Streamlining First Nations Reporting to Federal Organizations”. According to the legislative summary for this bill, this 2002 Auditor General's report:


 ...described existing federal reporting requirements as a “significant burden” on First Nations communities. It estimated that an average of 168

reports—200 in some communities—are required annually by the principal federal bodies that provide funding to First Nations for the delivery of various programs and services. The report suggested, among other things, that federal departments and agencies better coordinate their reporting requirements by streamlining their program authorities, thereby reducing the number of audits and reports required of First Nations.


The legislative summary goes on to say:


 In a December 2006 status report on the management of programs for First Nations, the Auditor General found that meaningful action by the federal government was still needed to "reduce the unnecessary reporting burden placed on First Nations communities.” Noting that AANDC alone obtains more than 60,000 reports a year from over 600 First Nations, the report concluded that the resources devoted to the current reporting system could be better used to provide direct support to communities.


Surely, with 60,000 reports and the authority that already resides with the minister, there is sufficient reporting going on. I would refer back to the report from the independent blue ribbon panel as well, which also highlighted the excess reporting required from first nations, Métis, Inuit and other aboriginal organizations.


Again, nothing has happened with this 2006 blue ribbon report. Nothing has happened in terms of looking at the nation-to-nation relationship. Nothing has happened in moving toward intergovernmental transfers instead of the grants and contributions process that is in place.


There is no doubt that at times community members have difficulty in getting the information they need, but the minister has already acknowledged that he does have the authority to get bands to release that information. The question again becomes one of why the minister does not exercise his authority.


In his speech, of course, the minister indicated that exercising that authority is paternalistic. However, it is a bit odd that on the one hand he is saying it would be too paternalistic for the minister to require the reports that are already in the policies under AANDC, while on the other hand the Conservatives have included an administrative measure in Bill C-27 under proposed paragraph 13(1)(b) that the government could:


 withhold moneys payable as a grant or contribution to the First Nation under an agreement that is in force on the day on which the breach occurs and that is entered into by the First Nation and Her Majesty in right of Canada as represented by the Minister, solely or in combination with other ministers of the Crown, until the First Nation has complied with its duty


 If that is not paternalistic, I do not know what is.


It sounds to me that on the one hand the minister is saying that he does not want to interfere, but on the other hand, he is making sure that he could interfere with proposed paragraph 13(1)(b).


Another question I asked the minister was on proposed subsection 6(1), which



 The First Nation must annually prepare a document entitled “schedule of remuneration” that details the remuneration paid by the First Nation or by any entity that it controls, as the case may be, to its chief and each of its councillors, acting in their capacity as such and in any other capacity, including their personal capacity.


The minister indicated that this was just about whatever this entity may pay a chief and councillors. However, that is not as clear as it could be, and it still does not solve the issues around the impact this may have on business relationships.


In sum, there are a couple of very key points in this piece of legislation that certainly raise concerns.


The minister mentioned the Assembly of First Nations in one of his responses. Back in January 2006, the Assembly of First Nations put together an “Accountability for Results” position paper. It outlined a number of principles that, working in conjunction with the federal government, would have helped bolster the accountability and transparency piece.


Part of that was based upon work that the Auditor General had done, which set out five principles: clear roles and responsibilities, clear performance expectations, balanced expectations and capacities, credible reporting, and reasonable review and adjustment.


The Assembly of First Nations and chiefs across this country have indicated a willingness to work with the government on accountability measures, but again, how were first nations included in the drafting of this piece of legislation?


In conclusion, on June 15 there was a press release from the minister saying that the government was strengthening fiscal management and accountability.

This press release would indicate that the government already has the power to do many of the things that are included in this legislation, so the big question then becomes why the legislation is needed at this point in time.


It sounds to me as though it is continuing to play a game, saying first nations are not responsible and are not accountable. That is just simply not true.


Rather than bringing forward this piece of legislation that does not address some of the underlying problems with lack of adequate funding and lack of ability to develop some of that capacity, the government brings forward a bill that continues to play to a stereotype in this country.


I urge all members in this House to oppose the legislation.



June 20th, 4:30 p.m.

First Nations Financial Transparency Act



Again, Mr. Speaker, that is just misleading. First Nation chiefs and councils already are required to provide that information. Under the Year-end Financial Reporting Handbook, first nations must submit annual audited consolidated financial statements for the public funds provided to them, and that includes salaries, honoraria and so on.


Section 6.4.1 requires first nations to disclose, both to their members and to AANDC, compensation earned or accrued by elected or appointed officials and by unelected senior officials.


Section 6.4.2 stipulates that the amounts of remuneration paid, earned or accrued by elected or appointed officials to be disclosed must be from all sources within the recipient's financial reporting entity, including...some other things.


Clearly there are mechanisms already in place, and the minister himself indicated that he has the authority to require bands to release this information. I know that many band members do have access to those audited financial statements, and they do include salaries, honoraria and expenses that are paid to their chiefs and councils. The mechanism is already in place.



June 20th, 4:30 p.m.

First Nations Financial Transparency Act



Mr. Speaker, in 2006 the Assembly of First Nations put together a detailed position paper that outlined some of the key principles—principles that were actually developed by the Auditor General—that would have set the table for a respectful relationship and dialogue. The Crown-First Nations Gathering in January would have been an opportunity to kick off a committee of representatives from the Assembly of First Nations and the government to look at implementing some of the principles in that 2006 position paper.


We know that many times the government has switched to terms of “engagement”

rather than “consultation” because consultation includes the notion of free, prior and informed consent. Without those elements of free, prior and informed consent, there is not true consultation, and there has not been true consultation on Bill C-27.



June 20th, 4:35 p.m.

First Nations Financial Transparency Act



Mr. Speaker, I fail to see how simply requiring first nations—who, by the way, already do all this reporting—to continue to do this reporting is going to contribute to an enhanced capacity for economic development.


If the government was serious about developing capacity, it would have gone back to the AFN paper, which recommended the development of tools needed by both the Government of Canada and first nations to be able to apply the Auditor General's five principles fully and effectively to all policies, programs and services aimed at first nations. This would include the tools needed by first nations governments to provide responsible and accountable government for their constituents. If the government was truly interested in economic development, what it would have actually done is help develop the tools to build capacity.


 I appreciate the parliamentary secretary's comments about the committee.

Its members do work very effectively together. At committee we have been hearing witnesses involved in economic development say that leadership and first nations' ability to have those tools and develop that capacity is very important. That would have been a better focus for us: to work with first nations in developing those tools and that capacity.



June 20th, 4:35 p.m.

First Nations Financial Transparency Act



Mr. Speaker, over the past year we have had a report on first nations education commissioned by the government in conjunction with the Assembly of First Nations that highlighted the desperate straits of many schools on reserve. It was no surprise to anybody.


There was the crisis in Attawapiskat around housing.


A national survey was just released on the state of health and the social determinants of health in many first nations communities. It talks about drinking water, education and food insecurity.


We have amazing documentation showing what the problems are but we lack the political will to move forward in addressing these serious issues.


First nations, Métis and Inuit are the youngest and fastest growing population in Canada. They are the workforce of the future. It is incumbent upon all of us in the House to invest in them. It is an investment in the future and an investment to ensure we have the skilled labour force that Canada needs to take itself forward on the international stage.



June 20th, 4:55 p.m.

First Nations Financial Transparency Act



Mr. Speaker, I would like the hon. member for St. Paul's to comment on a couple of things.


She mentioned in her speech about the volume of reporting that is already in place that requires chiefs and councils to reveal their salaries, honorary expenses and audited financial statements. I wonder if she could comment, first, on the reporting that is already in place and why it is not sufficient.


Second, the government claims that somehow or other Bill C-27 would enhance economic development. I wonder if she can see any way this would enhance economic development.



June 20th, 5 p.m.

First Nations Financial Transparency Act



Mr. Speaker, I just have a follow-up question.


The parliamentary secretary talked about getting the bill to committee where we would have an opportunity to examine best practices on accountability and how different first nations governments had set up their practices around reporting expenses and salaries. I wonder if the member could comment on the fact that we could do this without legislation. The committee could undertake a study to look at best practices.


As I mentioned earlier in, 2006 the Assembly of First Nations put out a position paper around some of the proposed principles and practices. I wonder if the member could comment on that aspect of it.



June 20th, 5:10 p.m.

First Nations Financial Transparency Act



Mr. Speaker, it was interesting to listen to the member say that we could not object to the facts. There is a fact I want to put before the member.

She talks about how all this could be accessed on websites. According to the First Nations Regional Health Survey, only 51% of first nations have Internet access and that drops to 36% in homes where the income is under $25,000. Therefore, effectively, a significant portion of first nations will be unable to access the information via the Internet anyway.


 It is also interesting that she says the Conservatives do not want to force people to go to the minister to get the information, but they have no problem with forcing people to go to the courts to get the information, which is far more expensive and time consuming.


The member mentioned the Whitecap Dakota. She was quoting some support for the bill, but I wonder if she could comment specifically on Whitecap Dakota's two concerns.


 One is with the entity, which is under clause 6(1) in the act. That entity is defined as a business, corporation or whatever. Chiefs and councils would have to report under this legislation, and Whitecap Dakota specifically had serious problems with that. It said that public sector reporting should be different from business reporting.


 The second concern Whitecap Dakota raised was with regard to treating expenses as lumped in under salary. It asked that those expenses and salary be treated separately.


Could she comment on entities and expenses?