Federal government rewards chiefs, First Nations bands for lack of transparency

On Friday, the federal government chose to lift sanctions and restore salaries for the 43 First Nation chiefs that were not complying with the First Nations Transparency Act and withholding basic financial information from their members and the Canadian public.

The First Nations Transparency Act requires chiefs to publicly release the band’s audited financial statements as well as chief and councillors salaries, thereby informing First Nations members how their band finances are managed and informing Canadian taxpayers how their tax dollars are being spent.

Carolyn Bennett, the minister of Indigenous and Northern Affairs Canada (INAC), stated that her government won’t enforce the First Nations Transparency Act in part because a) it requires communities to disclose proprietary information for band-owned businesses and b) it’s unreasonable to ask communities to post audited financial statements online when many do not have internet access.

However, the minister’s department addresses these two issues on their website. INAC states that “the legislation does not require businesses owned by the band to publish their own detailed financial statements” and “in situations where a First Nation cannot post on their own website or a First Nation organization's website, they can meet the compliance requirements by asking [INAC] to post their audited financial statements.” In other words, two of the primary reasons the minister cites to walk away from the transparency initiative have already been addressed.

Further, with an increase in federal transfers to First Nations communities, this type of transparency and accountability is needed now more than ever. The federal government alone spends more than $10 billion annually on aboriginal issues and spending per First Nations person in Canada rose more than 880 per cent over the past 60 years. In comparison, spending per person on all Canadians rose by 387 per cent.

And as the federal INAC department states, until the First Nations Transparency Act was enacted, “First Nation governments operating under the Indian Act were the only governments in Canada that did not have a legislated requirement to make basic financial information public.”

In 2012, Phyllis Sutherland, an advocate of the First Nations Transparency Act, testified before parliament that “[access to information] forms from [her] and from other band members have been ignored; requests for information have also been ignored by trustees of [their] treaty land entitlement; and members are subjected to intimidation tactics such as fearmongering, public attacks, and attempts to destroy a person's credibility.” The First Nations Transparency Act has allowed citizens like Phyllis Sutherland to access basic financial information on how their band finances are managed.
 
And the Act is having real impact in First Nations communities. For example, members of the Shuswap First Nation in British Columbia became aware of excessive spending, unexplained expenses and a chief’s salary in excess of $200,000 a year due to the release of audited financial statements. In light of this information, the community decided to not re-elect their chief of more than 30 years. Elsewhere, in Opaskwayak Cree Nation in Manitoba, band members want answers after audited statements showed a net increase in debt to $6.2 million from $5 million within one year.

Most First Nations governments have complied with the transparency legislation. More than 530 First Nations have publicly released their salaries and audited financial statements. As for the remaining 43 chiefs that have withheld basic financial information from their members and Canadians, their lack of transparency will now be rewarded by the federal government with the reinstatement of their salaries and administration budgets, which total more than $12 million.

It is unclear why the chiefs of these 43 communities are choosing to withhold this information from their electorate and Canadian taxpayers. Perhaps they are afraid of the power of their electorate to set matters right once informed about the facts. Regardless, by lifting salary sanctions on these 43 communities, the federal government is supporting chiefs who are withholding basic financial information from its members and the Canadian public.