First Nations Financial Transparency Act

An Act to enhance the financial accountability and transparency of First Nations

This bill is from the 41st Parliament, 1st session, which ended in September 2013.

Sponsor

John Duncan  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament has also written a full legislative summary of the bill.

This enactment enhances the financial accountability and transparency of First Nations.

Similar bills

C-575 (40th Parliament, 3rd session) First Nations Financial Transparency Act

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from Parliament. You can also read the full text of the bill.

Bill numbers are reused for different bills each new session. Perhaps you were looking for one of these other C-27s:

C-27 (2022) Digital Charter Implementation Act, 2022
C-27 (2021) Law Appropriation Act No. 1, 2021-22
C-27 (2016) An Act to amend the Pension Benefits Standards Act, 1985
C-27 (2014) Law Veterans Hiring Act

Votes

Nov. 27, 2012 Passed That the Bill be now read a third time and do pass.
Nov. 26, 2012 Passed That Bill C-27, An Act to enhance the financial accountability and transparency of First Nations, {as amended}, be concurred in at report stage [with a further amendment/with further amendments] .
Nov. 26, 2012 Failed That Bill C-27 be amended by deleting Clause 13.
Nov. 26, 2012 Failed That Bill C-27 be amended by deleting Clause 11.
Nov. 26, 2012 Failed That Bill C-27 be amended by deleting Clause 1.
Nov. 22, 2012 Passed That, in relation to Bill C-27, An Act to enhance the financial accountability and transparency of First Nations, not more than one further sitting day shall be allotted to the consideration at report stage of the Bill and one sitting day shall be allotted to the consideration at third reading stage of the said Bill; and That, 15 minutes before the expiry of the time provided for Government Orders on the day allotted to the consideration at report stage and on the day allotted to the consideration at third reading stage of the said Bill, any proceedings before the House shall be interrupted, if required for the purpose of this Order, and in turn every question necessary for the disposal of the stage of the Bill then under consideration shall be put forthwith and successively without further debate or amendment.
June 21, 2012 Passed That the Bill be now read a second time and referred to the Standing Committee on Aboriginal Affairs and Northern Development.

Report StageFirst Nations Financial Transparency ActGovernment Orders

November 20th, 2012 / 5:15 p.m.

NDP

Dennis Bevington NDP Western Arctic, NT

Mr. Speaker, I agree to a certain extent. Consultation is important but it is also important to recognize the fundamental principle that this is a government to government relationship. The Government of Canada does not consult with the government of the Northwest Territories and tell it what its transparency arrangements are going to be.

What are we speaking about when we speak about government to government relationships? First nations that accomplish the work for themselves, that develop their own systems of transparency, are going to be the most successful ones. That is simply the case. We need to throw off the shackles that exist between the federal government and first nations in a proper and respectful fashion.

Bill C-27 goes in the wrong direction. It goes in another direction, which is simply going to increase the aspects of what we do not want. That is the problem we have with the bill. It is a problem that the government has to recognize because it has a number of other bills coming forward that are going to do the same thing, that are going to create the same problem with the relationship between the federal government and first nations.

Report StageFirst Nations Financial Transparency ActGovernment Orders

November 20th, 2012 / 5:20 p.m.

NDP

Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, it gives me great pleasure to speak to the bill again.

At the outset, Bill C-27 remains largely unnecessary. It in no way addresses the multitude of better known, long-lasting and long-standing problems that persist on many first nations. The bill would create an unnecessary reporting mechanism that would rely on a form of communication that really would not reflect the way most people in these communities go about talking to each other or learn about their relationship.

Bill C-27 is overly punitive and amounts to a waste of valuable and much needed funds by duplicating efforts and increasing the bureaucratic burden on those first nations that do not already have self-governing regimes. It would set the course for costly legal battles and would ignore the advice of the Auditor General to reduce the reporting burden placed on first nations. It would add to that reporting burden at the same time the government handcuffs the participants by reducing the abilities and effectiveness of those bodies that assist with first nation governance.

Everyone in this place is aware of the failings of the Conservative government that claimed it would be more transparent and accountable than its predecessors. The Conservatives have learned that it is not as easy as it sounds, yet they are demanding what they cannot do themselves of our first nations.

In fact, the bill would impose standards greater than those applied to politicians in many other elected jurisdictions in a way that would create more bureaucracy without really increasing accountability of first nation governments to their communities.

The question that begs to be asked is this. Why is this being done now?

We might hear about a handful of overpaid band politicians. However, this is not the norm and any assumptions that are drawn from those stories are often based more on opinion than fact.

Also, if hearing about something is excuse enough to set the wheels of change in motion, I invite the government to recall how often we have heard about the challenges related to poverty, inadequate housing, substandard education opportunities, mental and physical health and so many more significant well-documented problems that persist in far too many first nation communities across Canada. I invite the government to find some resources to address some of those arguably more urgent issues.

I also invite the government to recall that only work done under the broader concept of full consultation is bound to succeed. If the government works in isolation, ignores its duty to consult, or only listens to the opinion of those who support its opinion, it will be spinning its wheels.

From the outset, we know that there is a problem because the intention of the bill is to duplicate something that already exists. Anyone watching Parliament today might be tempted to think that first nations report nothing about the funding they receive or on the salaries and compensation provided to their leadership when in fact the opposite is true.

First nations produce year-end reports that include annual audited consolidated financial statements for the public funds provided to them. These reports include salaries, honoraria and travel expenses for all elected, appointed and senior unelected band officials.

First nations are also required to release statements to their membership about compensation earned or accrued by elected, appointed and unelected senior officials and the amounts of remuneration paid, earned or accrued by elected and appointed officials, which must be from all sources within the recipient's financial reporting entity, including amounts from economic development and other types of business corporations.

Let us remember the June 2011 findings of the Auditor General which stated that despite repeated audits recommending numerous reforms over the last decade, the federal government had failed abysmally to address the worsening conditions for first nations.

That report tells us that the money just is not flowing to the problems and that it is not for lack of audits or reporting processes. The Auditor General pointed out that the reporting burden on first nations had actually worsened in recent years despite the fact of the office's repeated calls to reduce the reporting burden.

Worst of all, the findings showed how many of the reports were not even used by federal government departments and were not serving anything but bureaucratic processes. They are white elephants and the government is eagerly seeking to increase them.

In this respect, we have a government that is all about creating more burdensome red tape to go along with the handcuffs it is putting on first nations communities, communities that rely on the services of tribal councils, the First Nations Statistical Institute and the National Centre for First Nations Governance to assist with many items related to governance.

Consider the way the government has attacked tribal councils on one hand and created a great deal of work that those councils are uniquely positioned to assist with at the same time. The cuts to funding in this area show that the government is not working from a coherent plan. There is no playing to strengths or even acknowledgement of interplay between variables. In fact, cuts to the tribal council funding program mute the significant assistance that tribal councils could provide bands that will be forced to comply with the technological bureaucracy the bill sets in play. That program funds tribal councils so they can provide advisory services to their member first nations and to administer other Indian and northern programs.

Let us remember that tribal councils are institutions established voluntarily by the bands. In 2006-07 the program funded 78 tribal councils that served 471 first nations for a hair less than $45 million. That is not an excessive amount of money for the work these councils do. It is nowhere near the amount the government flushes down the drain for self-congratulatory advertising.

Consider the work tribal councils do. Five advisory services have been devolved to tribal councils: economic development, financial management, community planning, technical services and band governance. It is only reasonable to expect these cuts will affect the output of many first nations. Certainly, the work tribal councils on advisory services dovetails with the demands that Bill C-27 places on first nations. Be it technical services, financial management or band governance, tribal councils had an important role to play in this process. However, the government saw fit to claw back those budgets ahead of this bill.

We understand there is not an infinite amount of resources. That is why the New Democrats would never make the kinds of cuts and demands that the government has and pretend that one does not affect the other.

It is no secret that many first nation communities are not as well off as most non-aboriginal places. We know that almost a third of first nation households struggle to get by on less than $20,000 a year. We know that number is growing, which is to say, it is not going in the right direction. This is a significant problem and the government's answer seems to be to pile on in terms of the amount of money a community now has to spend reporting on how it spend its money. It sounds absurd. That is because it kind of is.

Consider that first nations are already subject to various policy-based and legal requirements regarding the management and expenditure of federal public funds. If these new requirements did away with those, or streamlined them, it might make more sense. Instead, this is just the creation of more red tape for first nations.

The New Democrats remain convinced that changes to how audited statements are made public does not require heavy-handed legislation. Any changes deemed necessary could be a requirement of funding arrangements that the department would have each first nation government sign.

We are concerned that Bill C-27 not only ignores the simple solution, but is overly punitive as well. Bands that do not comply with the demands of the bill can have their funding withheld or have a funding agreement terminated by the minister. How will that improve education, housing or the infrastructure challenges that many of these communities face?

The New Democrats do not see the need to divert more money to a new level of bureaucracy to reproduce much of what has already been done in a new or novel format. We understand there can be problems associated with reporting on the website that are not apparent to anyone. As someone who represents a northern rural constituency, Internet connectivity is not always possible. In fact, it is enough of a challenge to get service to relatively accessible areas like Manitoulin Island, so we can see that website reporting could become a hurdle some bands might not easily jump over, especially those in more remote areas.

Report StageFirst Nations Financial Transparency ActGovernment Orders

November 20th, 2012 / 5:30 p.m.

The Deputy Speaker

There will be five minutes of questions and comments when the debate resumes.

The House resumed from November 20 consideration of Bill C-27, An Act to enhance the financial accountability and transparency of First Nations, as reported (with amendment) from the committee, and of the motions in Group No. 1.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

The Speaker Andrew Scheer

There are five minutes left for questions and comments for the hon. member for Algoma—Manitoulin—Kapuskasing. The hon. member for Winnipeg North.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I have a question in regard to the whole issue of aboriginal discussions. We have seen a number of bills that have been brought into the chamber related to that particular issue and we have consistently told the government that there needs to be a lot more consultation prior to introduction of legislation.

To what degree does the member feel that, prior to the bill actually being drafted, there was adequate consultation done on behalf of the government?

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

NDP

Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, it is evident there has not been enough consultation done on this legislation or any legislation for that matter that the government has introduced that would impact first nations.

We believe there are already sufficient reporting processes in place, talking about Bill C-27, and funding agreements could be modified to address any worst case scenarios that arise. The government should have drawn up Bill C-27, as the member says, with full consultation with first nations, which would have made the bill more complete and legitimate than it is. It should have consulted, reflected on the advice of the Auditor General and kept the pressing needs of Canada's first nations communities in mind as it determined its legislative priorities. That would have served all involved much better.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

NDP

Jean Crowder NDP Nanaimo—Cowichan, BC

Mr. Speaker, does the member see problems ahead for the tribal councils and other national aboriginal organizations with the funding cuts if Bill C-27 gets passed, and the kinds of supports offered to tribal councils, in particular, and first nations governments in terms of reporting?

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

NDP

Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, I know my colleague from Nanaimo—Cowichan is a very hard worker and understands the first nations issues.

If the bill does pass, there will be a major impact on our first nations with those cuts. It will impact on the ability of first nations to comply with the legislation that the government is putting forward.

I just received a copy of a newsletter from one of my first nations indicating that “The Resound is now going into its 11th year of production. Our paper is sent to citizens of our community living away from home, as well as our local residents. We have grown support for our paper today, and our paper enjoys 90% approval rating from our citizens when it comes to receiving timely information from the administration and council. We are a very transparent and accountable community. This is something Minister Duncan will be happy to hear”.

They do not support Bill C-27. This is from Chief Shining Turtle. I know the minister is very well aware of Chief Shining Turtle.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

The Speaker Andrew Scheer

I will remind the member not to use proper names of our colleagues. Even when quoting, members are still not allowed to do that.

The hon. member for Newton—North Delta.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

NDP

Jinny Sims NDP Newton—North Delta, BC

Mr. Speaker, I thank the member for her very thoughtful speech on this legislation that talks a lot about accountability, a topic my friends across the aisle do not know too much about.

As the member travels around her province and meets with many people from the first nations communities, what kind of concerns is she hearing?

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

NDP

Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, the concerns I hear are not about the fact that the members are not getting information about the financials. They are saying that they need affordable housing, that they need their water issues addressed, that they need their education issues addressed, which is important, and that they want consultation from the Conservative government when it comes to legislation that would impact on their community. They do not want MRP. I know the minister has received over 14,700 emails from Chief Shining Turtle on the issue of MRP. I can tell members that first nations are very passionate about being able to govern their own communities.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:05 a.m.

Simcoe—Grey Ontario

Conservative

Kellie Leitch ConservativeParliamentary Secretary to the Minister of Human Resources and Skills Development and to the Minister of Labour

Mr. Speaker, Bill C-27 would strengthen transparency and accountability by requiring that the audited consolidated financial statements and schedules of remuneration and expenses of a first nation be shared with the members of each first nation community, as well as the general public.

I know the committee made amendments to the bill, which helped to clarify this point. However, I feel it is important to discuss the motivations behind the specific reference to band entities in Bill C-27.

The consolidated financial statements of a first nation include the financial statements of the entity that, according to generally accepted accounting principles, are required to be consolidated with the first nation and to be presented as a single economic entity. It is, therefore, necessary to ensure clarity around what constitutes an entity for the purposes of this act. “Entity”, for the purposes of this bill, is defined as a corporation or partnership, a joint venture or any other unincorporated association or organization. As an example, a band-owned business would be considered an entity under the proposed act.

Members of first nations are ultimately the owners of any businesses owned by their band and, as a result, should have a right to know what the values and activities of those businesses are. Although some first nations may be reluctant to provide the full picture of their financial results for competitive reasons, it is important for the users of financial statements, especially first nations members, to see summary statements that capture the range of activities of their government.

Bill C-27 would require that an aggregate summary of the values and activities of the businesses that are consolidated into the financial statements of the first nations be published. This does not mean, however, that each individual business owned by the band would need to be publishing its own detailed set of financial statements. Instead, it is only the consolidated financial statements of the first nation to which the bill would apply. Any information concerning businesses would be highly aggregated and, in most cases, should not reveal any proprietary information.

AFN regional chief, Jody Wilson-Raybould, raised concerns about the inclusion of band entities in Bill C-27. She said during her appearance at the committee that was studying this bill:

...while public sector accounting standards do deal with government business enterprises, Bill C-27 seems to go further by adding definitions of “consolidated financial statements” and “entity”, as well as its own interpretation of what it means for an entity to be controlled by a first nations government under subclause 2(2). It is not clear what the intention is here. Why not just make the public sector accounting standards apply? We would like clarity, and we need to ensure that this bill does not inappropriately modify the rules that currently apply to other governments in Canada with respect to government business enterprises.

Once again, I know that the committee made amendments to the bill that address this point and improve the language. However, I want to be clear and bring to the attention of the House that the bill does not intend to seek to put into place the same rules that apply to businesses owned by other governments in Canada. These rules are developed not by the government but by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants, which are referred to in the bill.

The new language used to define “consolidated financial statements” reads as follows:

“consolidated financial statements” means the financial statements of a First Nation—prepared in accordance with generally accepted accounting principles—in which the assets, liabilities, equity, income, expenses and cash flows of the First Nation and of those entities that are required by those principles to be included are presented as those of a single economic entity, as if the First Nation were a government reporting on its financial information.

This definition includes a specific reference to the fact that the preparation of financial statements is to be done, not in accordance with the rules established by the government but by generally accepted accounting principles. These principles include the public sector accounting standards demanded by Ms. Wilson-Raybould. This would ensure that the same standards that apply to businesses owned by other governments in Canada would apply to first nations governments in precisely the same way. Furthermore, this definition also makes it clear that first nations are to be treated as governments in the manner in which their financial information is presented.

The intention of this bill has always been to put into legislation the same practices with respect to the treatment of band entities that are currently in place in the funding agreements. It is important for the users of financial statements, especially first nations members as owners of those businesses but other users as well, to see summary statements that capture the activities of their government.

While we would encourage first nations to provide as much detail as possible to their memberships about the specifics of band-owned entities, the overall objective of this bill does not require it. The financial information for those entities that are considered to be part of the first nations overall economic activities would be aggregated. We believe this will be enough, albeit a minimum.

Bill C-27 may be seen by many progressive first nations as an opportunity to put into place or expand upon their own practices that aim to enhance the overall accountability of their government. In this way, the bill would serve as a catalyst for change in many communities which would lead to greater confidence in many first nations governments.

The challenge has been to find language that balances both the need for precision in the legislative drafting with accounting concepts that are both complex and constantly evolving. I congratulate the committee on finding solutions that skilfully strike a balance.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:15 a.m.

NDP

Mathieu Ravignat NDP Pontiac, QC

Mr. Speaker, I listened very carefully to my colleague's speech and I note that one issue has not been addressed on the other side of this House. How can they be so sure that there is a problem? From the outset, they have taken a pejorative view of the whole matter. In my riding, the first nations make a huge effort to be transparent and accountable to their members.

First Nations Financial Transparency ActGovernment Orders

November 23rd, 2012 / 10:15 a.m.

Conservative

Kellie Leitch Conservative Simcoe—Grey, ON

Mr. Speaker, I think we all know that there are many examples of first nations that are only meeting these basic transparency requirements and expectations of a government but actually exceeding them. We should applaud those first nations for doing so.

However, the movement forward with Bill C-27 is about the governments. We want to ensure that governments are fair and transparent with the individuals they deal with, just like every other government, including the Government of Canada. We expect the same of provincial governments.

As I said before, there are many examples of first nations that not only meet these basic requirements but actually exceed them. We should applaud those first nations and encourage them to all meet that same bar.