Bill C-575 (Historical)
First Nations Financial Transparency Act
An Act respecting the accountability and enhanced financial transparency of elected officials of First Nations communities
This bill was last introduced in the 40th Parliament, 3rd Session, which ended in March 2011.
Kelly Block Conservative
Introduced as a private member’s bill. (These don’t often become law.)
Second Reading and Referral to Committee
(This bill did not become law.)
- March 2, 2011 Passed That the Bill be now read a second time and referred to the Standing Committee on Aboriginal Affairs and Northern Development.
First Nations Financial Transparency Act
November 27th, 2012 / 4:25 p.m.
Kelly Block Saskatoon—Rosetown—Biggar, SK
Mr. Speaker, when I introduced Bill C-575, it had become apparent that there were many members in first nations communities who were wanting to access information about the expenses of their chiefs and councillors and how things were being managed in their communities, and they were not able to do so.
As I mentioned, some were given the information; some were outright refused, and others proactively gave this information before it was asked for. I heard many stories from first nations community members about the concerns in their communities, and I continue to receive letters, phone calls and emails from first nation members who are now asking where my private member's bill is and when that piece of legislation will be enacted.
First Nations Financial Transparency Act
November 27th, 2012 / 4:05 p.m.
Kelly Block Saskatoon—Rosetown—Biggar, SK
Mr. Speaker, members would be hard pressed to find anyone who is more aware of the need for and proud of this legislation than I. As my hon. colleagues know, I have been championing this issue for a very long time. It is almost two years ago now that I introduced Bill C-575, the first iteration of today's first nations financial transparency act. I believed then, as I do now, that first nations residents, like all Canadians, deserve transparency and accountability from their officials.
Indeed, more than just saying they are accountable in terms of their salaries and the reimbursement of expenses, these officials need to demonstrate they are absolutely transparent when it comes to reporting their earnings. This is what people in many first nations communities are demanding. That is why I originally brought forward my private member's bill.
In a nutshell, the purpose of Bill C-575 was to ensure that public funds that flow to first nations leaders are publicly disclosed. There is an existing process for band members to request financial information from their leaders. At the moment, if those requests are not met, the Minister of Aboriginal Affairs and Northern Development must step in and release the information.
My bill would have simplified the process, making disclosure automatic instead of going through this time-consuming and onerous process, which puts the minister in an awkward position and which undermines democracy, as first nations members cannot exercise their democratic rights without access to adequate information.
While some chiefs and councillors routinely release such financial information to their community members, unfortunately not all first nations achieve this standard. Those that do achieve this standard recognize the value in ensuring that their decisions and actions are clearly visible for all to see. They respect that their members have a fundamental right to know how public money is being spent. They know this information is vital to making wise, informed decisions about activities in their communities. They also understand that sharing this knowledge encourages an atmosphere of openness and trust between band councils and the community members they serve.
The problem is that not all band leaders see it that way. Current practices are uneven across the country. Some first nations will only release information about spending and the reimbursement of government officials' expenses on request. Others outright refuse to do so. It is precisely because some first nation leaders will not release this information that community members are forced to ask Aboriginal Affairs and Northern Development Canada to provide them with the details on their behalf.
I heard from individual members of first nations communities who complained that their local governments refused to release financial information. They have told me that access to this information is important and necessary for their communities. I know they are not alone in feeling this way. There was enormous support all across Canada for Bill C-575 when it was working its way through Parliament.
Indeed, many first nation band members have been complaining for years about the lack of accountability among their political leaders and their unwillingness to provide details about the band's finances and management.
Jo-Ann Nahanee, an advocate for transparency and accountability, is reported in the press as saying:
...for self-government to be successful, you need to have your members of your community—the participants of your government—be involved by informing them. My band does not do that.
She went on to explain:
There is an underlying fear on the reserve because there is a reliance on chief and council for welfare, for income. You are taking about people in poverty...and they are scared to speak up because they are scared to have these things taken away, so nobody speaks out.
That is just one example. There are similar complaints coming from other corners of the country, such as those brought to our attention by the Peguis Accountability Coalition. The coalition was formed by community members who are frustrated because they cannot access salary or other financial information about their band. They insist that those in power must be held accountable.
I can assure the House I am not implying that all first nations are reporting such problems or that the activities of all band leaders should be suspect; far from it. In fact, I am extremely proud of the many successful first nations in my home province of Saskatchewan whose leaders are wonderful role models in this regard. A perfect example is Darcy Bear, Chief of the Whitecap Dakota First Nation. Chief Bear is one of the biggest proponents of this legislation. He is on the record as stating:
This bill will mean more accountability of First Nation leaders to our people. Transparent and accountable First Nation governments support a strong environment for investment leading to greater economic development”.
Leaders like Chief Bear know that, in addition to better serving their community members, increased transparency and accountability pave the way to greater private sector investment and economic prosperity for first nations. As encouraged as I am by first nations chiefs and councils that recognize this reality, the fact remains that others do not. A sizeable proportion of first nations residents are not satisfied that they have access to the information they need to hold their officials to account. This has been substantiated by research produced by the Frontier Centre for Public Policy. It found that 25% of first nation individuals surveyed as part of its aboriginal governments index say that salary information for public officials is not available to band members. Thanks to the legislation before us, that will soon no longer be the case.
As we are aware, Bill C-575 died on the order paper when the last election was called. However, that may have been a blessing in disguise because its replacement, Bill C-27, builds on my original private member's bill and makes it even better.
While my private member's bill was unable to pass through the House of Commons before the election, by reintroducing it this fall, our government has reinforced its commitment to transparency and accountability at all levels of government. The new first nations financial transparency act would fulfill the 2011 Speech from the Throne commitment to support strong, democratic, transparent and accountable first nation governments by requiring that chiefs and councillors publish their salaries and expenses.
This act goes beyond what I had originally envisioned in Bill C-575. The new legislation would expand the scope of the information to be publicly disclosed over and above the salaries and expenses of chiefs and councillors. This bill also includes first nations' audited consolidated financial statements. This financial information would be made available to community members and the Canadian public on the individual first nation's website or on the website of a tribal council or partner organization. In addition, the audited consolidated financial statements and schedule of remuneration would be published on the website of Aboriginal Affairs and Northern Development Canada once they are made available by the first nation. These steps would ensure that first nation community members have the information they need to make informed decisions about their governments.
What we are asking band councils to do is only what municipal, provincial and federal governments are already doing. They would retain all the rights and responsibilities they currently have. For example, the act would not set salary levels for chiefs and councillors. Decisions such as these would remain the responsibility of the first nation. It would be up to communities to determine the appropriate level of remuneration for their officials. All that Bill C-27 would change is that this information would be publicly disclosed to ensure that community members have the information they need to decide if levels of compensation are reasonable and justified.
All members of first nations have a right to know how much their chiefs and councillors are being paid. It is this knowledge that helps eliminate controversy over compensation and focuses the public discussion where it really belongs: on fundamental quality of life issues such as housing, health care and education. All Canadians, not only members of first nations communities, should be able to access detailed information on how much first nations chiefs and councillors are being paid. Accountability is a fundamental principle of Canadian political life that we all know to be true. This is the basis of laws that legislatures across Canada have passed to clarify how much elected officials and senior executives in governments earn each year.
All other levels of government across Canada, including ours, have also established rules to fully disclose the amount and nature of expenses being reimbursed to elected and unelected officials of government. We in this House abide by such rules. Therefore, we are certainly not asking anything of first nation leaders that we do not expect of ourselves.
Another major element of Bill C-27 is that it would ensure we achieve the goal of greater transparency without increasing the reporting burden for first nations. The bill would simply make public some of the documents that are already being prepared by first nations for submission to Aboriginal Affairs and Northern Development Canada as part of their obligations under their funding agreements.
As proud as I am of my earlier efforts to address these issues in the last Parliament, I have to admit that the new legislation before us is even better than Bill C-575. Bill C-27 would ensure that the remuneration and expenses paid by a first nation to its political leaders would be disclosed. This includes individuals working in their capacity as chief and councillors, as well as their personal capacities, for instance, if they are also employees or contractors with the first nation.
The act would also ensure that a first nation's audited consolidated financial statements and schedule of remuneration and expenses would be disclosed to the public. It would ensure that this information is posted, both on a first nation website and on the Aboriginal Affairs and Northern Development Canada's website for a minimum of 10 years.
The bill would have improved enforcement powers. It contains a provision that would guarantee a first nation member, a member of the general public or the minister could apply to a superior court for an order requiring the council of a first nation to publish the information. In addition, in cases where first nations are not compliant, the minister would have authority under the act to assess remedies that exist in grant or contribution funding agreements with the first nation. These range from requiring the first nation to develop an appropriate action plan for disclosure, to withholding funds from a grant or a contribution or terminating a grant or contribution agreement.
These mechanisms are already available to the minister under the funding agreements. However, with greater powers being placed in the hands of first nation members, we would expect these mechanisms would only be used as a last resort. Indeed, there is no need for it ever to come to that. All the band councils need to do is release the basic information that all other governments across the country already do.
As I have noted, many first nation leaders currently provide such information because they know it is in the best interest of their community. They recognize it is good for public relations and building trust between electors and their governing officials. They understand it is good for business, as successful communities like Whitecap Dakota First Nation, in Saskatchewan, have proven. Ultimately, they realize it is good for democracy. Indeed, it is vital to ensuring that the democratic rights of first nations people are upheld.
It is beyond me why anyone, aboriginal or otherwise, could possibly have a problem with this legislation. First nations members who have been calling for these improvements would undoubtedly like to know the answer to that too. Actually, I am sure they would prefer that we simply pass this legislation so they can get on with building strong communities and stronger economies.
I urge all hon. members do just that and vote with us to make Bill C-27 the law of the land.
First Nations Financial Transparency Act
November 27th, 2012 / 1:20 p.m.
Francine Raynault Joliette, QC
Mr. Speaker, for the past few months, I have been working very closely with the Manawan Atikamekw community in my riding to help it resolve a very difficult situation.
Like all reserves, Manawan has serious problems that will not be fixed with the wave of a magic wand. I could talk from now until morning about the needs of the first nations that I have heard from.
However, I wish to use my time wisely, so suffice it to say that what they truly do not need is Bill C-27. First nations do not want it and really do not need it because it is unjust, useless and contradictory. The Conservative government is so obsessed with its ideological agenda and so bound by its narrow-mindedness that I am tempted to believe it does not understand how unjust this bill is.
In January 2012, the Prime Minister said that he wanted to work with first nations during the Crown-first nations gathering. How can he unilaterally impose such a despicable bill mere months after making that statement? Either he is incompetent or he is ignorant.
The dictionary defines “co-operation” as “the act of co-operating, of participating with others in a task”. For the benefit of the hon. members opposite, here is the definition of “other”: “separate in identity or distinct in kind”. Clearly, alas, the Conservatives understand neither of those two words. So, for their information and for the general edification of all, here is the definition of “coercion”: “to force or constrain”, as in the sentence: “Bill C-27 is introduced in a spirit of coercion and with no regard for co-operation”.
Let me be perfectly clear, I am in favour of transparency. But, since this bill claims to be strengthening it for the first nations' benefit, why does the government make it possible for any Canadian to take advantage of it? The bill allows anyone to get up any fine morning and say that, since aboriginal people are bound by legislation, let us ask for an order that allows us to see their salaries. At that point, it is no longer transparency, it is prying.
To understand the government's action, we have to realize that Bill C-27 comes from Bill C-575, which grew out of a spurious story from the Canadian Taxpayers Federation. It is fine to listen to civil society lobby groups, but you also have to be honest enough to look at the facts before giving in to oversimplification.
This bill would never have seen the light of day without the endless repetition of the erroneous information that first nations' chiefs make more than the Prime Minister. That malicious rumour, racist in the strength with which it was spread, morphed into a bill with no regard to the facts: the average salary of a chief is $60,000 and councillors earn around $30,000. That is nothing to get into a panic about.
I imagine that actual facts about first nations have little importance in the eyes of the Conservatives, just like facts about climate change and the state of this country's democracy. When they are asked questions, all they do is trot out the same meaningless comments, like an old broken record.
If this bill served any purpose whatsoever, we could agree that we need to review how to implement it. But that is not the case. Bill C-27 is completely useless—as useless as the earth is round, as truly as ice melts, unless of course, its real purpose is to harm first nations. That would not be surprising, since that is precisely what the Canadian government has been trying to do since it was created in 1867.
Bill C-27 is calling on first nations to be even more accountable. They are already accountable to Aboriginal Affairs and Northern Development Canada. Is there any point to producing reports that no one reads? No.
It is a fact that the documents produced by this legislation will serve no practical purpose. The reason is quite simple: the public service has no interest in the documents that are already produced. First nations are already sufficiently accountable and the government must stop treating them like children.
Among the needs of aboriginal people are things like education, health care, food, housing, social services and clean drinking water. Bill C-27 must be considered in light of the Auditor General's conclusions in June 2011. The AG reminded us that despite the repeated audits recommending many reforms over the past decade, the government has failed miserably to address the worsening living conditions of first nation members. However, I suppose that will not mean much to a government that is currently being taken to court by its Auditor General.
Once again, this would all seem like a pathetic joke if Bill C-27 at least had any consistency. However, this bill is so poorly put together that it is hardly worth mentioning.
Since coming to power, the Conservative government has done its utmost to steer clear of transparency. It no longer answers journalists' questions, no longer provides information to the Auditor General, and it has cut important audit positions. Then, it dares to ask first nations to do more than other Canadians, when they have neither the expertise nor the means to complete so much paperwork.
This bill is so contradictory that it even breaks other laws. Can we truly allow a bill to trample other laws so easily? Or will the Conservatives perhaps tell us that aboriginal peoples do not have the same rights as others?
I know that we are repeating ourselves, but I think what we have to say is worth repeating again and again. Although the stated objective of Bill C-27 is to enhance the transparency of first nations members, its scope is much broader because it requires the financial statements to be put up on first nations' and the AANDC websites, and permits anyone, not just a first nations member, to ask a superior court to disclose financial statements and salaries.
I will say it again: Bill C-27 is unfair, useless and contradictory. But given that we can say the same thing about the government, I do not expect it to change its mind. Therefore, I have this to say to my aboriginal sisters and brothers: the NDP will work with you to improve your self-governance and to help solve problems that are really affecting you.
First Nations Financial Transparency Act
November 27th, 2012 / 12:40 p.m.
Niki Ashton Churchill, MB
Mr. Speaker, I thank the hon. member for raising a critical point on consultation. We are seeing a complete lack of appropriate consultation on one piece of legislation after the other. That speaks to the Conservative government's lack of desire to properly consult with first nations people, which is really a step backward.
I would like to read into the record the Assembly of First Nations report on this issue:
If the issue were only of transparency then, perhaps, the bill would be fine. But, as we have described, the issue is not so simple. [The precursor] Bill C-575 favours the further transfer of accountability away from First Nations, thereby only further entrenching the Indian Act and strengthening the Department of [Aboriginal] Affairs' role in this regard. This is not a solution, it is a short-sighted reaction to alarmist headlines—in fact, it takes us backwards.
The Assembly of First Nations has indicated, both on Bill C-575 but also in terms of Bill C-27, that this is the way backward. When the Assembly of First Nations says that, we do not need any clearer indication as to what is wrong with the government's practices. I am proud that we in the NDP stand with first nations and with the Assembly of First Nations.
First Nations Financial Transparency Act
November 27th, 2012 / 11:40 a.m.
Blake Richards Wild Rose, AB
Mr. Speaker, I am pleased to rise to speak on this piece of legislation today.
There are those who argue that it is not necessary to enshrine transparency and accountability in legislation governing first nations' financial transactions. Those people appear to be content to let band officials decide whether they want to make available to members the information about how community funds are spent. They seem willing to leave such decisions to chance. Complaints by some first nation residents about their community leaders certainly seem to verify this observation, at least in certain cases. Nonetheless, I remind the House that we have heard disturbing tales about abuses of power.
For example, the Quebec resident Michael Benedict is a member of the Coalition of Abenaki Citizens for a Just, Transparent and Accountable Abenaki Government. He reported that:
My spouse and I have been harassed, my house vandalized and members of our local accountability organization have been intimidated for speaking out.
He went on to say:
Local elected officials were afraid we would empower Abenaki citizens to take a stand against abuse of power, misappropriation of public money and unavailability of information. C-27 will help improve transparency.
We have heard similar concerns in other parts of the country as well. For instance, Bev Brown of the Squamish First Nation has said:
When grassroots people request financial information from band council they are often threatened with support cuts from the band and are shunned in the community....
Like Michael Benedict, she believes that:
C-27 will help band members because it will allow them to view the material online and anonymously.
The problem boils down to this: Even though community members may ask for details about the remuneration of their chiefs and councillors, unless their leaders choose to release this information, there is no guarantee they will ever see it.
Now, one should not jump to the conclusion that this is the norm. Certainly, many first nations make every effort to provide this information to their community members. The Mohawk Council of Kahnawake, which is forthcoming with this kind of financial information, is a case in point. There is no question that some band councils display these records on their websites while others provide details in householder mailings or post them in their bands' offices. For that, they should be commended.
However, it appears that this is not the practice followed by all. The fact is that every year the federal government receives complaints from first nation residents that they cannot find out what the salaries of their chiefs and councillors are, or the specific work they do to earn their pay. Nor is there any accountability regarding reimbursement of expenses for activities that sometimes are a complete mystery to community members. In fact, many first nation members do not get to see the community's audited consolidated financial statements at all.
In those cases, everything may in fact be above board and the salaries or other financial compensation being paid to first nation leaders may well be worth every last penny. However, unless the books are open for the community members to judge, there is simply no way to know if that is true.
Testimony at the Standing Committee on Aboriginal Affairs and Northern Development, of which I am a member, addressed the legislation earlier this fall and suggested that the examples I have cited are not isolated ones. Research data from the aboriginal governance index presented by the Frontier Centre for Public Policy indicates that 25% of first nations fail to provide financial information regarding salaries and expenses to their band members.
Admittedly, this is not the majority, but I am sure that all parties would agree, or certainly should agree, that one in four is very high. Indeed, even one such incident is one too many in a country that prides itself on being a democracy.
While compensation disclosure is basic information that is freely and easily available in all other jurisdictions in Canada, too many of the country's first nation leaders still refuse to make it available to their members. This is despite the fact that our country's chiefs have acknowledged the need to be more forthcoming.
I would remind my hon. colleagues that the Assembly of First Nations' chiefs passed a resolution at their special chiefs assembly in December of 2010 regarding financial disclosure. They affirmed the need to publicly release information regarding salaries and expenses to their members. They also agreed to make financial information available via the Internet, where applicable.
Just over half of the more that 600 first nations have their own websites. However, to date, very few have actually posted salary and remuneration information on the Internet. This does not suggest that all of the others have anything to hide, but it does confirm that good intentions do not automatically translate into good results. The current voluntary approach clearly does not always satisfy first nation members' right to know.
The assurance of a transparent, accountable, local government is the minimum that first nations members should expect in a democracy like ours. What first nations residents deserve and want is transparency and tangible information from their elected representatives when it comes to such issues.
Bill C-27 would ensure there are written, legal and binding guarantees that financial information will be freely and regularly released by first nation governments to local residents. The legislation would remove any opportunity to leave financial disclosure open to interpretation. It would put an end to the questionable practices of some leaders who think they do not need to account for their salaries and expenses, or for the way financial decisions are made. First nation governments are the only governments in Canada that do not currently have a legislated requirement to make this basic financial information public. The bill before us is designed to address that gap.
Once passed, the act would require all first nations not under a self-government agreement to publish the salaries and expenses they pay to their chiefs and councillors on an annual basis. This means that they would need to disclose things like wages, commissions, bonuses, fees, honorariums, dividends and any other financial or non-monetary benefits they may receive. The entire remuneration received by chiefs and councillors would be disclosed, not just a portion of their remuneration paid for from funds transferred by Aboriginal Affairs and Northern Development Canada. The proposed act also stipulates that information must be provided about spending related to transportation, accommodations, meals, hospitality and other expenses. I would note, however, that Bill C-27 would focus only on the political leaders of first nation governments. It would not apply to their appointed officials or senior staff.
The proposed legislation goes further than Bill C-575,, the private member's bill on which it is based. My hon. colleagues will recall that it died on the order paper when the last election was called. The new bill builds on the basic tenets of that earlier legislation, but goes further. Under Bill C-27, Aboriginal Affairs and Northern Development Canada would also be required to publish the audited consolidated financial statements, as well as the schedule of remuneration for elected officials, for first nations all across Canada, as soon as the information is available.
It is expected that these records would also be made available in band offices, as well as be posted on their websites. As I know, not every first nation has a website. The community could request that another organization, such as a tribal council, a first nation organization, or even Aboriginal Affairs and Northern Development Canada itself, post the information on its behalf.
In addition, the new act would require that audited consolidated financial statements of first nation governments be prepared annually and disclosed to community members and the general public. The audited consolidated financial statements would include information related to any entities that, according to generally accepted accounting principles, are to be consolidated with the financial statements of the first nation, such as band-owned businesses.
Before anyone suggests that this could hurt those businesses' competitiveness, let me set the record straight. Bill C-27 would not require each individual business owned by the band to publish its detailed financial statements. All that is asked for is the publication of audited consolidated financial statements of the first nation as a whole. This would include entities that, according to accounting rules, are consolidated with the first nation, including band-owned businesses. This is simply standard accounting practice. These same principles and rules already apply to government-owned businesses all across Canada.
It is important to recognize that these statements are highly aggregated. Consequently, they would not be required to reveal any proprietary information that would undermine the competitiveness of a first nation's business or that of its partners. In fact, in response to concerns raised by witnesses appearing before the standing committee, the language of the bill has been amended to ensure it matches this spirit and intent.
I also want to be very clear about something else. We are not trying to create extra paperwork or to add red tape that might deter communities from attracting business development. Bill C-27 has been crafted so that no new reports are required. I repeat, no new reports are required. Do not forget that first nations are already required to produce annual consolidated financial statements audited by independent accredited professional auditors. As well, schedules of remuneration and expenses for the chiefs and councillors are a condition of their funding agreements with the federal government.
All that will change once the bill becomes law is that first nations will be legally obligated to share this information with the members of their bands. As I have already noted, many first nation elected officials already practice transparent and accountable reporting of their actions. Indeed, this is a requirement of self-government agreements, which explains why communities with signed agreements would be exempt from the act. However, those who have yet to demonstrate openness and willingness to be accountable to their communities and members must be held to the same standard and that is what the first nations financial transparency act would ensure.
Any concerns that first nation members have about how their communities' moneys are managed can be addressed if first nation governments meet this new accountability standard. This legislation is a win-win-win, no matter how one looks at it. Most essential is that Bill C-27 would make sure that first nation residents have access to the necessary information to make sound decisions about their leadership and their community's future. This goes to the very heart of a democratic society.
Equally important, it would enhance the confidence of all Canadians in first nation governments. Perhaps most promising is that his act would ensure potential investors that they can safely enter into joint financial agreements and business undertakings with first nations. This could lead to social and economic improvements in the lives and livelihoods of first nation members. When businesses create those kinds of opportunities, it opens up many new prospects for first nation members. It provides jobs and economic opportunities, which could make a real difference in many of these communities.
As the Winnipeg Free Press stated in an editorial about Bill C-27 on November 23:
The transparency law may not spark a revolution, but it will certainly enhance accountability and could lead to demands for more reforms, which are desperately needed to raise the living standards of Canada's first people.
That, at the end of the day, is really what the bill is all about. It would provide the legislative foundation upon which to build strong communities and strong economies to create a better quality of life for people living on reserve. What we are talking about here are those opportunities, the business prospects, the economic growth and the jobs that could be created. First nation members, indeed all Canadians, need Bill C-27. This legislation would ensure that first nation community members can count on law and reason, rather than passion, when it comes to good government. They would have written assurance that they can hold their leaders to account.
Frankly, I cannot fathom why there would be any opposition to this reasoned and reasonable legislation. I, for one, am proud to stand behind this progressive act that would put an end to practices that are all too often denying first nations people the same access to fundamental financial freedom as other Canadians. The first nations financial transparency bill would guarantee that first nation residents would enjoy the same democratic rights as all other Canadians.
As I have already mentioned, many first nations already provide this information to their members. It is the same kind of information that is available to citizens across Canada. Certainly here in the House as members of Parliament and in the other place, our salaries are disclosed through the Parliament of Canada Act and through the Salaries Act. That legislation lays out a transparent formula that calculates our salaries and provides for the publication of those details, both for regular incomes and for special allowances that are added to the salaries of MPs who take on extra responsibilities. It is also subject to conflict of interest and ethics legislation.
The Government of Canada is not, by any means, the only jurisdiction that requires this disclosure. Many provinces across Canada require similar transparency and accountability. There are examples from Newfoundland and Labrador. That province has the Financial Administration Act, which permits the provincial legislature to table public accounts each year. In Prince Edward Island and New Brunswick there are similar laws as well.
Ontario, Saskatchewan and Alberta all have legislation governing the duty of municipalities to prepare and publish annual financial statements. Territorial governments also hold themselves to this standard. The Government of the Northwest Territories makes its annual financial statements readily available on its website. The Government of Nunavut, through its Financial Administration Act, requires the government to publicly account for its expenditures for the previous year by laying the public accounts before the legislative assembly.
Precise wording of transparency and accountability legislation obviously varies from province to province, but the fact remains that almost all Canadian taxpayers have a guarantee in law that they can access the basic financial information they require to hold their elected representatives accountable for their decisions and their actions. I think that is only to be accepted in a democracy.
The first nations financial transparency act would guarantee that first nation residents would enjoy the same democratic rights as all other Canadians. Bill C-27 would be good for first nation communities, it would be good for business and it would be good for democracy. For all these reasons, I encourage all parties to give the proposed legislation their full endorsement.
First Nations Financial Transparency Act
November 27th, 2012 / 10:15 a.m.
Greg Rickford Parliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development
Mr. Speaker, thank you for this opportunity on behalf of the constituents of the great Kenora riding to speak, hopefully, for the last time to this piece of legislation before it moves on to the other place and receives royal assent.
I am proud to rise today to once again explain the need for Bill C-27 and to talk about its many benefits.
Before I do, as a member of the Standing Committee on Aboriginal Affairs and Northern Development, I want to thank all those who appeared before the committee during recent hearings. Their contributions have made this legislation better and stronger.
The committee heard from a number of witnesses, both aboriginal and non-aboriginal, who spoke to the need for Bill C-27. They recognized that increased transparency and accountability will empower first nation members and their governments.
As do all Canadians, first nation community members want assurances that public funds are being used to improve their communities. They expect and deserve sound management practices from their elected leadership, as well as access to the information necessary to ensure that these leaders are acting in their best interests and priorities. Bill C-27 simply puts in place the same types of rules with respect to financial transparency that already apply to other levels of government in Canada. Why should first nations expect or have anything less?
Further, publicly accessible information will also boost investor confidence and create a better business environment for private sector investment on reserve. This will inevitably lead to increased economic opportunities that will help to create the conditions for healthier and more self-sufficient first nation communities.
Chief Darcy Bear of the Whitecap Dakota First Nation said it best when he stated:
You drive through my community, you'll see all the paved roads, paved streets, the good quality of life that my people, my members enjoy.... That's what good accountability brings to a community.
It is worth noting that the bill is entirely consistent with the resolution passed by first nation leadership at the Assembly of First Nations' Special Chiefs Assembly in December of 2010, where the chiefs committed to “Choose to lead by example and demonstrate to other orders of government processes for accountability”, which included:
Itemizing and publicly disclosing salaries, honoraria and expenses associated with the operations of Chief & Council;
Ensuring information about community finances and decision-making is easily accessible, and available via the internet where applicable.
That sounds a lot like the wording, spirit and intent of the bill.
Currently, there is no legislative requirement for transparency and accountability from first nation leadership. Under current funding agreements, first nation community members can ask for band-related financial information from their elected leaders, but there is no legislated obligation on the part of the administration to release it. We know that many first nations are already making their financial information public voluntarily. We appreciate that. I think it goes to reducing the amount of suspicion and political turmoil at the community level. However, not all first nation communities are doing this.
When individuals are refused information from their band council they often come to the Department of Aboriginal Affairs and Northern Development Canada to ask for the information to be released to them, as we have heard from various witnesses appearing before the standing committee. Some regional offices of the department receive as many as 25 to 30 informal requests each year from first nation members seeking this basic information, which would be readily available to any other constituent or any other Canadian in any other jurisdiction
At committee Phyllis Sutherland, president of the Peguis Accountability Coalition, told committee members about her community. They were unable to access salary and other financial information about their elected band officials. She in fact cited several cases where members were subject to intimidation. She insisted that this type of intimidation must stop and that those in power must be held accountable.
Similar concerns were raised in testimony by Joseph Quesnel, a policy analyst with the Frontier Centre for Public Policy. He presented research data culled from the Aboriginal Governance Index developed by the centre, which revealed that 77% of the first nation members surveyed agreed that salary information for elected officials should be made public and be accessible. However, 25% say this information is not available to their band members.
In addition to the requests for documents, the department also receives allegations and complaints regarding potential mismanagement or the misappropriation of band funds and remuneration of its elected officials. Since January 2011, there have been 1,450 such complaints.
The important point is not how many requests the department receives each year for salary information—although there are many—it is the fact that from this government’s perspective, even one request is one too many. Members must go to the department for information that should be coming directly from their own first nation. The minister would prefer not to be involved in issues that should be resolved by the community itself.
Bill C-27 removes the minister from the equation by ensuring this financial information is easily accessible to everyone who wants it. It creates a direct line of accountability between first nation leaders and their members.
The concern about accountability extends beyond government and first nation members to investors who might be deterred by a lack of reliable financial data. Bill C-27 would help address this problem by requiring first nation governments to publish annual audited consolidated financial statements, as well as a schedule of chiefs' and councillors' salaries, remunerations and expenses. Clear and consistent publication under Bill C-27 would provide potential investors with a snapshot of a community's financial situation and may lead to further opportunities for partnership and investment.
There has been misinformation spread about the bill by the opposition who opposes our government's efforts to support economic growth, investment and job creation through more accountable and transparent government. I would like to take this opportunity to clear up the misconceptions and explain what Bill C-27 would do.
First, the legislation would not set salary levels for chiefs and councillors. It would remain the first nation's responsibility to set the appropriate level of remuneration for its elected officials. The proposed act would simply ensure that financial information is disclosed to the public. This would provide band members with the information they need to hold their leadership to account. They can then use that information to determine whether funds are being spent for the benefit of the community and whether compensation levels are reasonable and appropriate.
Second, I want to make clear that the act would not require individual businesses owned by the band to publish their detailed financial statements. Rather, Bill C-27 would only require the publication of the first nation's audited consolidated financial statements. These financial statements would include any entities that, according to generally accepted accounting principles or GAP, are to be consolidated with the first nation in its financial statements, including most band-owned businesses. However, information relating to government business enterprises would be highly aggregated and would not be revealing any details that would undermine the competitiveness of their businesses.
I want to underline that this is a standard accounting principle. This rule applies to all other government-owned businesses across Canada. We are not asking anything different of first nation communities than we do of any other business or community in Canada.
As members of Parliament, we all fully disclose our salaries and special allowances to the public, as required by the Parliament of Canada Act and the Salaries Act. Not only that, but the Federal Accountability Act of 2006 has also increased the public's access to information about its government's activities and those of its members. Anyone interested in any of this data can find it without even asking. Similar laws are in place at the provincial and territorial level and most of those governments have adopted legislation requiring municipal governments to make these documents public as well.
Equally important, there is nothing in this legislation that would create any additional paperwork for first nation governments. They already produce consolidated financial statements each year, which are audited by independent accredited professional auditors. It is a requirement of their funding agreements with Aboriginal Affairs and Northern Development Canada.
The legislation simply ensures that some of the critical documents which are already submitted to the department as part of a first nation’s funding agreement are made publicly available. This bill does not ask for anything new, except greater transparency to members.
To be clear, all that Bill C-27 would do is to require first nation governments to meet the same standards. They are the only governments in Canada that do not currently provide this basic level of information to the public, and this bill would fill that legislative gap.
As members can see, we are not proposing radical measures, nor are they onerous in terms of their additional reporting requirements. We have made every effort to make it easy for first nations to comply with this law.
It has been pointed out, for example, that not all first nations have websites. However, the bill fully addresses this point. A first nation will not be required to have its own website as a result of the legislation. If a first nation is not able to publish the information electronically itself, it can ask another organization it is a member of to post it on the community's behalf. Alternatively, the first nation could ask Aboriginal Affairs and Northern Development Canada to post the information on its behalf.
Of course, it is important to recognize that having these documents published on a website does not fulfill a first nation government's obligation to make copies of financial statements available to its members. Again, many of them already do this by either distributing printed copies to households or making information available in band offices. We heard at committee instances of where a number of communities actually host a forum, somewhat akin to an annual general assembly of its members, where they review these documents.
I also want to reinforce that there have been numerous opportunities to discuss and improve this legislation, first in the context of private member's Bill C-575 introduced in the previous Parliament, and now in the context of Bill C-27.
Over the course of the committee's review of the bill, we heard concerns about how certain sectors of the text might be interpreted. These concerns focused on the language of the bill in two key areas: first, the need to report information relating to remuneration and reimbursement of expenses separately; and second, the treatment of band-controlled entities. I am pleased to say that we have listened to the concerns raised by first nations and have introduced amendments to clarify the relevant language of the bill to address these concerns. That is a process that took place at committee.
With respect to the reporting of remuneration and expenses, the original text of the bill combined the concepts of salaries and expenses into a single definition of remuneration. Although it was not the intention of the bill, we heard from witnesses that this could be interpreted to suggest that these two amounts could be reported and disclosed to the public as one aggregate figure. To make things clearer and for greater certainty, the amendments split these two concepts into two separate definitions for the purposes of the legislation, and the schedule of remuneration has been re-named in the text of the bill to “schedule of remuneration and expenses”.
As it relates to the treatment of band-owned businesses, the intention of the bill has always been to put into legislation the same practices with respect to the treatment of band entities as are currently in place in the funding agreements. We believe it is important for the users of financial statements, especially first nation members, to see summary statements that capture the activities of their government and elected officials.
The entities to be included and the manner in which their financial information is presented will be determined by the standards set out by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants. This will ensure that the standards applying to businesses owned by other governments in Canada will also apply to first nation governments in precisely the same way.
The government worked hard to find language that strikes a balance between the need for precision and certainty in legislative drafting and complex accounting concepts. At committee we adopted an amended definition of consolidated financial statements that makes these points clear. These improvements resulted in some other small amendments but do not detract from the original intent of the bill. The only thing that has changed is the wording, which has been adjusted for clarity, greater certainty and to eliminate any confusion.
First nations people have been waiting a long time for the measures proposed in Bill C-27. They should not be asked to wait any longer for this bill to come into effect.
It was first introduced on November 23, 2011, and there has been ample time devoted to discussing views and concerns regarding this legislation. It was debated for almost six hours during second reading debate before being referred to committee, which met seven times to study and discuss Bill C-27.
During that time the committee heard from 21 witnesses from 13 different organizations. These witnesses came from a variety of organizations including the Assembly of First Nations, the Canadian Taxpayers Federation, the Aboriginal Financial Officers Association of Canada, and representatives from individual first nations communities.
During report stage, the House spent over six hours of debate on this bill. The NDP has had no less than 20 speakers, yet we heard no new issues raised by the opposition in all that time. In fact, one thing that we did hear was one member from across the way saying that he wanted to see one rule for all. It is great news that a member from the NDP would say that, because that is exactly what this bill strives to accomplish.
For this legislation to apply in the next fiscal year, it must come into force on or before March 31, 2013. This legislation is long overdue and will bring first nation governments in line with virtually all other governments in Canada. Our government believes that first nations people have waited long enough. We think this legislation should apply to the next fiscal year, 2013-14. This means that the publication of first nations' financial statements and salaries and expenses could occur as early as July 2014.
I am very proud of this legislation. I believe firmly that first nations deserve and expect the same level of transparency and accountability as all Canadians. The first nations financial transparency act would make that happen.
Bill C-27 will also reassure potential investors that they can safely enter into joint financial agreements, joint ventures and business undertakings with first nations. The resulting jobs and economic growth will contribute to social and economic improvements in the lives, the livelihoods and the communities of first nation members.
In short, Bill C-27 is a landmark bill that is worthy of the support of all parties. I urge all members of the House to give it their full support and vote unanimously in support of this bill.
Bill C-27—Notice of time allocation motion
First Nations Financial Transparency Act
November 22nd, 2012 / 11:05 a.m.
Ray Boughen Palliser, SK
Mr. Speaker, two years ago, the member for Saskatoon—Rosetown—Biggar introduced her private member's bill, Bill C-575, to increase financial transparency and accountability for first nations across Canada.
This legislation is long overdue and I am pleased that the government is now taking the appropriate action by moving time allocation on the bill to ensure that first nations have access to the basic financial information of their elected officials.
The opposition has been trying to argue that there has been no consultation on the bill. As stated earlier, it is exactly because of the complaints of first nations members that this legislation has been introduced.
Could the Minister of Aboriginal Affairs and Northern Development comment further on why this legislation is so important to first nations?
Motions in Amendment
First Nations Financial Transparency Act
November 20th, 2012 / 11:30 a.m.
Ray Boughen Palliser, SK
Mr. Speaker, there was a lot of discussion about the bill in the previous Parliament, when it was Bill C-575. At that time, the House prorogued and the bill was not passed. It has been brought forward again in this Parliament. There has been quite a bit of consultation with chiefs who appeared before the Standing Committee on Aboriginal Affairs and Northern Development. There have been opportunities for dialogue, discussion and some debate. If we look back on the record, we will find that there has been a fair number of hours spent on the bill. Is it enough? Is it ever enough? All bills could enjoy more debate and dialogue if there were only more time.
Motions in Amendment
First Nations Financial Transparency Act
November 20th, 2012 / 11:20 a.m.
Ray Boughen Palliser, SK
Mr. Speaker, I thank you for this opportunity to explain how Bill C-27 would improve sound fiscal management when first nations empower community members to hold their leaders to account.
To begin, I would like to respond to the hon. member's first motion to delete clause 1 of Bill C-27, the first nations financial transparency act. The clause reads: “This Act may be cited as the First Nations Financial Transparency Act.” Essentially, the member's motion goes to the very heart of Bill C-27, so I would like to speak about the purpose of this legislation and why it is necessary.
In accordance with the provisions in their funding agreements, first nation governments are already required to provide to Aboriginal Affairs and Northern Development Canada audited consolidated financial statements and a schedule of remuneration and expenses of all elected officials. These agreements also require that the audited consolidated financial statements be made available to first nations membership in the communities. These agreements do not, however, stipulate the manner or timing of disclosure.
Many first nation governments have put into place sound accounting practices that ensure transparency and help to build confidence among members and other stakeholders. Many prepare annual reports that are distributed to members' homes or made available in board offices or posted on the first nation's website. Many first nations governments strive to be accountable to their communities, their membership and to the federal government for the funds they receive.
Why then is the bill necessary? Some first nations governments have not yet consistently adopted these practices. As a result, questions occasionally emerge about the financial decision of first nations leaders and how first nation moneys are being spent, questions that can undermine the confidence of the public in all first nation governments, including those who are working hard to be transparent in their leadership.
Ensuring the public disclosure of financial information would help clarify the actual situation. By explicitly stating the expectations of first nations in law with respect to accountability for the financial management of their governments and transparency in the remuneration and expenses of their leaders, a minimum standard would be established and many of the aforementioned inconsistencies would disappear. Greater transparency of financial information and remuneration and expenses would remove the speculation that currently exists and dispel the rumours around the management of funds by first nation government and the salaries of first nation leaders.
The bill would ensure that first nation community members have the information necessary to make informed decisions about their leadership and are better prepared to hold their governments to account.
The bill and the easier access to financial information it promotes would also support better policy development as it relates to first nation peoples. As John Graham of Patterson Creek Consulting, one of the witnesses who appeared before committee, pointed out, “public policy is always better if there is essentially good information”. While this information is currently provided to the department, it cannot be shared in any meaningful way to promote this kind of public discussion.
The public disclosure of financial information of first nation governments would also increase the confidence of potential investors. With more complete and accurate information about potential partners, investors would be in a better position to make informed decisions about investment opportunities, possibly contributing to improved economic well-being of first nation communities.
Most of the issues surrounding the bill were aired or debated in the context of private member's Bill C-575 in the previous Parliament. It also echoes the commitments made by the Assembly of First Nations chiefs-in-assembly in their December 2010 resolution. In it, the chiefs say they:
Choose to lead by example and demonstrate to other orders of government processes for accountability, including...Itemizing and publicly disclosing salaries, honoraria and expenses associated with the operations of Chief & Council' [and] Ensuring information about community finances and decision-making is easily accessible, and available via the internet where applicable.
The government is not only confident that the bill will be supported by most first nations members seeking to improve the transparency and accountability of their band governments, but also that first nations' elected officials will welcome the bill as an important tool to demonstrate how they are accountable to their members.
To summarize, Bill C-27 is a necessary piece of legislation and I support it fully. I therefore do not support the motion currently being considered.
This necessary and advantageous legislation fulfills the commitment of the government in the 2011 Speech from the Throne. Not only is this a promise fulfilled, it is also an important step forward strengthening governance at the community level, another in a series of building blocks brought forward by our government to support economic and social development in first nations.
This is indeed a worthy cause and is clearly necessary legislation, deserving of all-party support. I urge my hon. colleagues to back Bill C-27 to ensure that first nations members enjoy the same opportunities as all other Canadians.
To appreciate the importance of this legislation, we first need to acknowledge that the current system fails to meet the transparency test. It is no secret that there have been reports of questionable financial practices in some first nations and that community members cannot get answers to their questions about these practices.
There is also no question that in some instances there appears to be a genuine need for greater scrutiny of how public funds are being spent. We have heard complaints by first nations members who were unable to access information about spending in their communities. They want to know how their chiefs and councillors are spending band funds and the salaries of their elected officials publicly disclosed. The problem is not necessarily what first nations leaders are being paid, but the fact that their community members have no way of knowing what the compensation really is. Neither do community members currently know how such decisions are arrived at.
With any other level of government, a number of factors determine the level of pay and benefits for officials. These include such things as the nature of their responsibilities and duties, the size of the community, the complexity of operating the community and the level of its revenues.
In some situations, first nation budgets are almost entirely reliant on federal tax dollars. As part of the funding allocated to first nations every year, a portion is an unconditional grant known as band support funding. This money is intended to help cover costs such as salaries for elected and non-elected officials, telephones and fax machines and other office equipment.
In addition to federal transfers, a number of first nations generate some of their own revenues through band-owned businesses or funding arrangements with other orders of government. This extra money can be used in a variety of ways, including paying higher salaries for elected officials.
There is no reliable way for first nation members to verify they are getting value for money. That is why Bill C-27 is essential. It will enable first nation citizens to confirm whether the compensation levels of their leaders are reasonable and proportionate to the required duties and responsibilities.
All other Canadians are able to hold their leaders accountable in this way. The same standard should be guaranteed in law to first nations members. If the first nations financial transparency act is passed, it will guarantee these standards.
In conclusion, the first nations financial transparency act will enhance financial accountability and transparency. It will require the proactive disclosure of audited and consolidated financial statements, enabling first nations members to see first hand how funds received by first nations have been spent.
This necessary and advantageous legislation fulfills the commitment by this government in the 2011 Speech from the Throne. Not only is this a promise fulfilled, but it is also an important step forward in strengthening governance at the community level, another in a series of building blocks brought forward by our government to support economic and social development in first nations.
This is a worthy cause, and clearly this is necessary legislation, deserving all-party support. I urge my hon. colleagues to back Bill C-27 to ensure that first nations members enjoy the same opportunities as all other Canadians.
Motions in Amendment
First Nations Financial Transparency Act
November 20th, 2012 / 10:50 a.m.
Kyle Seeback Brampton West, ON
Mr. Speaker, I have been listening this morning to the debate on the motions brought forward by the NDP members. I am surprised they are trying to delete the important accountability clauses that are contained within the legislation. I am not surprised at the Liberal Party, which goes further. It wants to delete every single clause in the bill. Accountability and the Liberal Party generally do not go hand in hand.
When I went to law school, we were told an old joke. It was: “If you have the law on your side, argue the law. If you have the facts on your side, argue the facts. If you don't the facts and don't have the law, bang your hand on the table and shout louder”. That is what we are hearing from both of the opposition parties today. They do not have the law on their side, they do not have the facts on their side, so they bang their fists on the desk and argue about process. That is what they are left with.
They are going to say there was not enough consultation. That is not true. They know it is not true. In fact, the great member for Saskatoon—Rosetown—Biggar had extensive consultation on her Bill C-575. It was through the consultation with first nations that she brought forward the first incarnation of this legislation on financial transparency. There has been extensive consultation on this legislation.
In fact, it is first nations that want this to happen. I sat in committee and heard the stories from members of our first nations who said that when they had asked for information, it was not produced and they had been subject to intimidation and threats just for asking for the information. That is not acceptable.
By deleting clause 11, which is one of the proposals by the NDP, we would remove a very significant piece of accountability that is in the legislation. Section 11 states:
If a First Nation fails to publish any document under section 8, any person, including the Minister, may apply to a superior court for an order requiring the council to carry out the duties under that section within the period specified by the court.
How can anyone be opposed to that? It is an accountability mechanism that will be there for first nations in order to compel their council to produce information. How is someone against that? If a council is not publishing the salaries and remuneration of chiefs and councils and there is a mechanism here that is going to help them get that information, how can people in that small corner of the House stand and say that they are against it? I do not understand. The purpose of the clause is to ensure that anyone could require a first nation to publish this information. It provides an avenue of redress for first nations.
We have also heard that many first nations have made complaints directly to the minister. The opposition parties say that is a perfect system, that they should just make the complaint to the minister and have the minister answer that question. That is not about transparency or accountability. The accountability has to come from the first nation itself, and a lot do it. I do not want to be accused of standing and saying that none of our first nations communities provide this information. That is not true. Many of them do a fantastic job of providing the information to their members and being accountable to their members for the money that is spent. That is not what the legislation is designed to get at. There are some members, some communities, that are not providing this information and that is what the legislation targets.
First nations residents deserve and expect transparency and accountability from their elected representatives when it comes to these issues. In fact, in December 2010 the Assembly of First Nations passed a resolution at its special chiefs assembly, affirming the need to publicly disclose salaries and expenses to their members. They also agreed to make this financial information available on the Internet, where applicable. Nearly two years later, just over half of the more than 600 first nations have a website. Of those that have a website, less than 20 had posted their salary and remuneration on the website and on the Internet.
This proves in and of itself that voluntary compliance is not the answer. We also know that complaining to the minister is not the answer. We want to give the power back to first nations community members to get this information so they do not have to go down those roads. Bill C-27, the first nations financial transparency act, would guarantee that all first nations members would be able to hold their elected governments to account.
In addition to the informal requests from the members to the minister to get the information, the department also receives formal complaints regarding the potential mismanagement or misappropriation of band funds and remuneration of officials. This legislation would ensure that the information would be easily accessible to everyone and it would remove the minister from the equation in many of these cases. That would promote direct lines of communication and accountability from first nation leaders to its members because it would take the minister out of the equation. It should not be a triangular approach where a first nation member complains to the minister's office, which then goes down and asks the first nation to produce it and the first nation then moves it across to the member. It should be a direct approach from a member directly to band council.
I want to make this clear as well. This is not to suggest that first nations are mismanaging their finances or are not accountable to their members because in many cases there are many examples of first nations that are doing exactly that. With the greater transparency that is offered here, many of the complaints to the minister would actually not continue because they would have the necessary information.
I listened to the member for Nanaimo—Cowichan. She suggested that producing a financial statement was not the answer because it would not state how many houses were built or what progress was made on the school, and that is true. The financial statement will not say that. However, imagine trying to understand what is happening with the finances in a community without the financial statement, the salary, remuneration and benefits of the chief and council. It is a logic first step. Once people have the financial statement and know the remuneration, they can question where all the money went. For instance, if all this money had been received, why were houses not built?
It is false for the New Democrats to suggest that this is not the answer. It is the first logical step toward putting the power back into the hands of the people. That is what good accountable government is all about. We have that kind of accountability at the federal level. Our public finances are absolutely disclosed. Individuals can make all kinds of requests for information. However, that is not what is happening with our first nations.
I am proud to stand today in support of this legislation, not only because it is good legislation but because I personally heard the stories at committee of community members saying that enough was enough, that they needed help and they needed the problem solved.