moved that Bill C-27, An Act to enhance the financial accountability and transparency of First Nations, be read the second time and referred to a committee.
Mr. Speaker, as we all know, good governance is the cornerstone of healthy and progressive societies. It is a prerequisite to achieving both social and economic success, so today I am proud to speak in support of new legislation that will foster strong and accountable first nation governments.
With this proposed legislation, community members will know what their leaders are being paid. As well, they will have clear information about the financial decisions made by their leaders so that they can make informed decisions about the future of their community at community meetings and elections.
This transparency will also provide potential investors with the confidence to enter into economic development investments with first nations. Economic development brings jobs and revenues that the community can then use to invest in activities, programs and infrastructure to improve the well-being of all its members.
Under this proposed legislation, first nation governments will be required to prepare consolidated financial statements and post them on a website each year, along with the salaries and expenses of the chief and councillors. This will provide easy access to important information about the first nation by its members and by entities interested in working, investing or partnering with the first nation.
Before I elaborate on both the necessity and the benefits of the first nations financial transparency act, I would like to assure my hon. colleagues that what we are asking of first nations is nothing more than we ask of ourselves.
Nothing better exemplifies our commitment to openness than the way we disclose salaries of elected officials paid from the public purse, everyone from the Prime Minister and members of cabinet to members of Parliament. All of us as parliamentarians fully disclose our salaries and special allowances to the public. Canadians can easily find all of these facts and figures, since the Federal Accountability Act also increased the public's access to information about government activities.
The Government of Canada posts its financial statements on the Finance Canada website. Individual federal departments and agencies disclose travel and hospitality expenses for executives on their websites as well.
We are not alone in making such information available to the public. Most provinces and territories release such information. Salary levels for members of their legislatures as well as supplementary amounts paid for taking on additional duties are posted on their websites, and in some cases, such as Manitoba and Ontario, public sector compensation in excess of $50,000 and of $100,000 respectively is also disclosed to the public.
Many municipalities across Canada post their financial statements and disclose information about compensation to their employees on the Internet as well.
While many first nation governments have put in place sound accountability practices that ensure transparency, there is no legal requirement for them to release this information to community members, and many do not. While many governments in Canada post this information on the Internet, recent research by my department found that as of February 2012, only a limited number of the more than 350 first nations that have their own website have done so.
Clarity about government expenditure and results is vitally important to securing public trust. Visible evidence of effective first nation accounting practices would reassure community members and potential investors that first nation leaders are spending their community funds prudently and appropriately.
Under current funding agreements, first nations councils are already required to provide my department with audited consolidated financial statements and schedules of remuneration for all elected officials, so we are not creating additional paperwork that would add to their reporting burden.
At the moment there are no statutory or regulatory guidelines related to transparency for first nations governments; consequently, community members cannot easily hold their leaders to account. The manifestation of democratic rights that other Canadians take for granted is not in place for many first nation members.
Currently the only recourse for community members who are denied access to a first nations audited consolidated financial statement is to appeal to the Department of Aboriginal Affairs and Northern Development. We receive many complaints.
Some first nations do not willingly release such information when requested. In these cases, the only option for complainants at the moment is to bring the issue to my attention. The Minister of Aboriginal Affairs and Northern Development has sole authority to compel a first nation to release financial information. This puts me in the position of perpetuating a sense of paternalism that both first nations and our government are working to overcome.
As it is now, when first nation members raise concerns about the non-disclosure of financial information, we respond. My officials work with the band governments to have it released, and if these efforts fail, the department then provides the information directly to the individual member who is requesting it.
The current system is unnecessarily complicated and, quite frankly, undemocratic. It is entirely reasonable for first nation members to expect their governments to meet the same basic accountability standards as other governments in Canada.
I have no doubt that most first nations strive to be accountable to their members and to the federal government. Some first nations go to great lengths to inform members and the public about the operations of their governments, displaying the information on their community websites or posting it in band offices. However, others have not developed and adopted accountability practices. This erodes the stability of their governments and communities. It also tends to undermine Canadians' confidence in first nation governments generally.
In addition, such cases give potential investors reason to hesitate when debating whether to enter into business arrangements with first nations. Before signing a partnership, the private sector wants assurance it is dealing with a reliable and reputable government. If there are doubts, a business may well decide against a joint venture, denying communities the possibility of new jobs and increased prosperity.
Our government is committed to putting in place the legislative frameworks that will foster strong, self-sufficient and accountable first nation governments. We also want to provide the information to first nations members that is available to other Canadians. This will help to build stronger relationships and ultimately create a healthier environment for investment and economic development.
We have developed Bill C-27 in fulfilment of our pledge in the 2011 Speech from the Throne. It will fill the current legislative gap and rectify the many shortcomings I have outlined.
The first nations financial transparency act builds on the excellent work of my colleague, the member for Saskatoon—Rosetown—Biggar, whose former private member's bill, Bill C-575, was introduced in the fall of 2010 to enhance the financial transparency of first nation governments. It called for the publication of information regarding chiefs' and councillors' pay.
Bill C-27 goes further. It expands the scope of information to be publicly disclosed to include first nations audited consolidated financial statements. The act would entrench in law a financial accountability framework for first nations consistent with the standards observed by other governments across the country.
A further improvement is the clear requirement that first nations adopt the rules established by professional accounting bodies, such as the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants.
Effective the first financial year after the act comes into force, first nation governments would be required to prepare audited consolidated financial statements and post them on a website each year along with the salaries and expenses of their chief and councillors.
First nations would have 120 days following the end of the financial year to post this information either on the first nation's website or the website of a tribal council or partner organization.
Audited consolidated financial statements and schedules of remuneration details for more than 600 first nations would also be published on Aboriginal Affairs and Northern Development Canada's website.
Easy access to this important information would ensure fairness and accountability, something community members quite rightfully expect.
Apart from making financial information readily available to community members, it would also simplify the process for potential investors to acquire the information they need to make business decisions. Data collected from first nations would also be posted on our departmental website. This would allow firms to go to a single source to compare one community with another when considering a potential joint venture.
Another new requirement under Bill C-27 would give first nation members better remedies if their governments fail to honour their obligation to open the books to the public.
If a first nation does not post the required financial data as required, anyone would be able to apply to a superior court to compel the first nation to publish the information. Once the information is released, it would also be posted on my department's website. This provision would allow a first nation member to hold the leadership accountable.
First nations governments have long advocated for more flexible funding arrangements. They want greater autonomy in allocating the money received under federal funding transfers. This legislation would build upon and recognize the capacity of first nation governments, enabling them to demonstrate that they are accountable governments that respect the basic principles of financial transparency.
This would be a key factor for my department in determining which communities are the best candidates for more flexible funding options. Building upon a first nation's demonstrated abilities and increased accountability, there would be greater opportunities to move from contribution funding to grants in some areas of programming.
I should point out that these same accountability requirements already apply to first nations that have signed self-government agreements. For example, the Tsawwassen First Nation Final Agreement requires that the first nation develop a financial administration system with standards comparable to those generally accepted for governments in Canada. The Nisga'a Financial Administration Act stipulates that the first nation make its financial statements available for inspection by members, including posting the statements on the Internet.
Because self-governing first nations are already demonstrating this high standard within the context of the self-government agreements, they are exempt from Bill C-27.
When first nation governments manage their finances in line with practices in other jurisdictions, it instills confidence in the business community and can provide economic development opportunities in the community. An open, accountable government is a stable government, removing uncertainty that might discourage investment.
This is being proven repeatedly in communities with settled land claims and self-government agreements. Increasingly, they are entering into joint ventures with the private sector to create jobs and generate economic growth in their communities. We are confident that Bill C-27 would help to make this happen in a broader way.
This proposed act would guarantee to community members as well as other levels of government, the business community and all Canadians that first nation governments are effective and transparent in their business dealings.
Once Bill C-27 becomes law, first nations citizens would be able to participate more fully in the democratic process, receive information they require and have the assurance of redress where required.
In conclusion, I am asking all parties to stand behind this very necessary and overdue legislation.