Bill C-27 (Historical)

First Nations Financial Transparency Act

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

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

Motions in Amendment

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I would like to ask my hon. colleague about the clause that allows the minister to arbitrarily withhold funding from a first nation.

We know that last January the Minister of Aboriginal Affairs and Northern Development cut off education dollars to children in Attawapiskat to punish the community because it would not agree with the third party manager. The Federal Court found that the community was completely justified in opposing the third party management. The accusations made by the Minister of Aboriginal Affairs and Northern Development and the Prime Minister against Attawapiskat were completely unfounded.

The issue of using children and education dollars as hostage would be illegal in any system of government anywhere except, it seems, with the federal government relating to the treatment of first nations children.

What does my hon. colleague think this allows the minister to do now, if he is given carte blanche power to cut off money, whether it is for children, health care or social services?

[Carolyn Bennett, Liberal, St. Paul's, ON]

Mr. Speaker, I agree with the hon. member. It is unacceptable to cut off education money or anything else. This carte blanche to the minister is wrong.

As the hon. member has pointed out many times, the former minister of Indian affairs, Chuck Strahl, said very clearly that the kinds of failed policies of third party management needed to be replaced. When the government got into trouble in Attawapiskat, it pulled the failed policy out of its back pocket and imposed the third party management and then lost in court.

This refusing to consult and “see you in court” mentality is absolutely destroying the relationships with first nations in Canada.

[Kyle Seeback, Conservative, 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.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, I listened with a lot of interest to my colleague's dissertation on public accountability. If the Parliamentary Budget Officer was listening to his comments on the open accessibility and transparency of his government, I wonder whether he might have choked on his ham and cheese sandwich, if that was what he was eating for lunch today.

Could my hon. colleague truly stand in the House and claim that the government is a model of accountability and accessibility? Further, how can he and his government hector and cajole other organizations that are trying to do their own due diligence and already have in place adequate and thorough transparency and accountability methods?

[Kyle Seeback, Conservative, Brampton West, ON]

Mr. Speaker, perhaps my colleague did not hear me at the start when I said that if one has the law on one's side, one should argue the law. If one has the facts on one's side, one should argue the facts. If one does not, one should bang one's fist on the table and shout.

The member cannot even ask a question on the legislation before us. He has abandoned all hope of opposing it because he know it is the right thing to do. What does he talk about? He makes some vague reference to non-accountability.

Mr. Speaker, your salary is posted. It is public, disclosed, as is mine. That is not what is happening on every first nation. If the member had taken the time to look at the legislation before he asked the question, he would know that is what it is about. Financial transparency is not happening, which is why we have put this legislation forward.

[Steven Fletcher, Conservative, Minister of State (Transport)]

Mr. Speaker, I wonder if the hon. member could take a moment to elaborate on this. We heard a member from the Liberal Party talk about the Kelowna accord. I actually have never seen a copy of that so I do not know if it even exists. The Liberals never put it in the budget. It shows a disrespect to first nations that a member would raise it.

Also, with transparency comes accountability and with accountability comes better use of taxpayer money, which is really what is funding most of what we are talking about. Could the member talk about accountability and taxpayer money as opposed to first nations?

[Kyle Seeback, Conservative, Brampton West, ON]

Mr. Speaker, the amazing thing I have experienced, after being here for only a little over a year and a half, is how members of the Liberal Party seem to have all the answers now that they are not the government. They could have fixed everything if they had only had one or two more years, or another month. That is all they needed in order to solve all the nation's problems. They had all these great ideas. It is amazing. In 13 years they could not do these things but suddenly they have all the answers.

My colleague makes the very important point that transparency leads to good government. A fundamental part of transparency for first nations members is understanding their community's financial situation. How do we know how our government is doing if we do not know how any of the money is being spent? We in Ottawa have that accountability. We have the Parliamentary Budget Officer. We release a budget. We study the estimates in every department. This leads to good government.

That is what we are looking for in our first nations communities. We want a good level of transparency so they can deliver good government. If they are not delivering good government, the people will now know. They will have the wherewithal to understand the financial status of their community and decide they may need to make a change if things are not being run properly. That is exactly what this legislation is for.

[Andrew Cash, NDP, Davenport, ON]

Mr. Speaker, I am wondering if the hon. member realizes that there are already policies in place that require first nations to submit to the Aboriginal Affairs and Northern Development Canada annual audited consolidated financial statements for public funds provided to them. These include salaries, honoraria and travel expenses for all elected, appointed and senior unelected band officials. The latter includes unelected positions such as those of the executive director, band manager, senior program director and manager. First nations are also required to release these statements to their membership. That seems pretty thorough to me.

[Kyle Seeback, Conservative, Brampton West, ON]

Mr. Speaker, if first nations are already doing all of this, then their number one argument that this is such a burden has now evaporated. Number two, why do they not post the information? That is what this legislation would do. They should deliver it to their members, not just to AANDC.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Speaker, my speech in this House is a continuation of my previous speeches, which have been gradually bringing to light the government's interference in first nations' socio-economic issues. I say “gradually” because I sometimes talk about fairly obscure notions, and I understand that Canadians, in general, sometimes have difficulty following what I am saying. That is why I am bringing these issues to light gradually.

Based on my short experience here in the House and my experience with community management organizations and my band council, it is clear to me that the Conservatives are allowing a major problem to go unresolved. Despite the adversity that communities face, which is often fuelled by government initiatives that have been implemented over the past 200 years, the first nations have shown resilience and ingenuity. They have found ingenious ways of rising to the challenge and establishing an underground economy. I am not using the term “underground” in the sense of “hidden” or “secret” but in the sense of “unconventional” in that the communities have tried to penetrate markets and have developed tactics that are significantly different from the economic expansion observed throughout the country. It is a slightly different way of doing things, and that is also my approach. The whole context is different. As a result, the Conservatives and previous governments have often tried to underhandedly eradicate these innovative initiatives.

We are facing the same type of scenario here. The proposed legislative initiative and amendments are trying to underhandedly eradicate innovative initiatives, even if the interests of first nations members are technically being put first. I would like to address this issue in more depth later. Although we are trying to put beneficiaries—community members who will benefit from the availability of financial information—first, given what is happening, we see that the true beneficiaries are not first nations members but certain other groups here in Canada. These groups have even positioned themselves within the committee. When this subject was addressed in committee, some lobby groups spoke up. I still have doubts in this regard since it seems as though the Conservatives are trying to please a very specific segment of the Canadian population.

Much like the comments made during committee hearings about the disclosure of First Nations' financial statements, this type of legislative initiative appeals to the lowest common denominator and fuels the reactionary fringe groups that exist in Canada.

I will give a very concrete example of a reactionary fringe group. I often tend to rely on the empirical. When this issue was studied in committee, we heard from a number of witnesses, including the Canadian Taxpayers Federation. In a rather direct, even abrupt manner, as that is my style, I questioned the witness who had quite simply been proactive and decided to appear as a witness with the consent of the Conservatives on this committee. He came to tell us that his organization would be supporting and backing this bill because there should be public disclosure throughout Canada of the financial statements and documents of corporate entities that are jointly operated by band councils. I questioned this witness and simply told him that the last time the terms “taxpayers” and “Indians” had been used in the same sentence, they had been uttered by a white supremacist in my riding. Such people do exist in Canada. We cannot ignore this reality.

This discussion could easily be hijacked. For that reason I asked the witness how he proposed to ensure that the discussion and the interest he was showing that day would not be hijacked by one of these fringe groups. I am not saying that these groups are in the majority across Canada; however, they do exist. The last time I heard about taxpayers and Indians was when a white supremacist asked me why Indians do not pay taxes. That was confrontational. What I was asking was how can we ensure that this discussion will not be hijacked because it could fuel rather extremist arguments.

What I am trying to prove is that the Conservatives are attempting to please a very specific segment of the population, not necessarily the extremist groups. However, it is a widely held view.

People who are perhaps only minimally informed about the ins and outs of the taxes paid by aboriginal peoples may justify themselves and justify the energy devoted to this kind of initiative by saying that everyone will benefit from this information. But in fact, and officially, the Conservatives announced that it was the members of the first nations who were trying to lighten the burden that ultimately rests on the Department of Indian Affairs and Northern Development when the members of the communities decided simply to circumvent their band council and go directly to the department. It is laudable to want to shift the responsibility for being accountable to the community leaders. However, doing it in a roundabout way is not. This pretext has been used to require disclosure of financial statements of a sort that does not apply Canada-wide.

Let us take the example of a private economic entity, a clearly defined corporate entity in Canada. It does not have to disclose its financial statements. However, with the initiative as it is proposed here, a corporate entity or a company that was operated jointly, or as a joint venture, with a band council would have to make its financial statements available to the public, and this would be a first.

I would note that the rule in Canada is that all laws and bills have to apply generally, uniformly and without distinction all across Canada. In this case, some companies in the communities will be forced to disclose their financial statements, and this is pretty deplorable and subject to challenge from a strictly legal point of view. Personally, I would challenge it, and there is a very good chance that will be done in the near future.

What has been called the aggressive challenge by outsiders to the communal dynamic, in support of the disclosure of the consolidated financial statements and independent revenue sources of the first nations, is enough in itself to call into question the goals and the intended beneficiaries of this bill.

Although the bill is officially an attempt to shift the burden on band councils of transmitting financial information to the members of the communities, what is really happening, and what I am afraid of after hearing what the groups who expressed an interest in this said in committee, is that this information is being hijacked by or directed to very narrow, very specific lobbies here in Canada. The disclosure is intended to make a segment of the public happy, for very partisan purposes. We have seen this in the past, and it has become the trademark of the Conservatives. Bills and initiatives are often hijacked in order to advance an agenda, a hidden agenda in this case, since there are very specific groups that will ultimately benefit from the disclosure of this information, which was initially intended to be communal and limited to the members of the communities, that certainly being a laudable goal.

And that is my submission.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the member's comments and the amendments being put forward.

One of the most significant concerns that I believe all Canadians would share is that there is an obligation to work in good faith with first nations leadership when bringing forward legislation that would have the impact that this legislation would have on first nations communities. That should be done out of respect. We in the Liberal Party have argued that we need to work directly with first nations leadership to assist in ensuring they are playing a leadership role when it comes to bringing forward legislation such as this. It would appear as though there has been very little, if any, consultation on this legislation. From what I understand, there definitely has not been consensus or thorough consultation.

I wonder if the member would comment on the importance of consulting prior to even introducing legislation of this nature and whether he believes that enough consultation was done on behalf of the Government of Canada.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Speaker, I thank the member for his question. Some ideas were shared at a supposedly historic meeting in January—a meeting to which I was not invited; I ended up out on the sidewalk. Ideas were shared at this meeting, but it was all rhetoric to put on a show for the cameras.

As the member mentioned, there has been little consultation with the first nations on this very specific piece of legislation, the proposed amendments. Long before a consultation is planned, it is important to inform the community. There must be public information sessions, since the literacy rate is rather low. In the communities near me, the literacy rate is around 48% for adults.

It takes a grassroots effort. People must be informed of the ins and outs of these measures before a consultation can be planned. But in this case, there was no public information session or consultation. It is a unilateral initiative. We are starting to get used to this, since it seems to be the Conservatives' overall strategy. But it is a bit more obvious when it comes to “Indianness” issues.

[Greg Rickford, Conservative, Parliamentary Secretary to the Minister of Aboriginal Affairs and Northern Development]

Mr. Speaker, I thank the member for Manicouagan for his remarks. I visited his riding a few years ago when we made an announcement there.

I am wondering about something. He focused on a single witness. But there were many others, including ordinary people, the grassroots, as he said. People in the community said many times that they did not feel safe asking for financial documents in certain circumstances. I think it is important to allow public access for the residents of a given community.

Did he understand what the ordinary people in these communities had to say about being reluctant to ask for these financial documents during a forum with their community? I think that is a legitimate question.

[Jonathan Genest-Jourdain, NDP, Manicouagan, QC]

Mr. Speaker, I thank my hon. colleague for the question, and I agree with him. Indeed, there can be some problems. Given the overcrowding that exists in these communities, tensions can mount. I agree with that point.

Here, however, it is not a question of accountability to community members. The Conservatives are using an underhanded tactic to make this information available to the broader Canadian public. That is the problem.

I fully support the idea of sharing financial information with community members, in order to show that everyone's hands are clean. That is the bill's objective. However, ultimately, this is an underhanded way to please certain small, specific groups of Canadians, by allowing financial information on the corporate activities of private enterprises to be released to the public, in order to reinforce a negative image and demonstrate that aboriginal communities in Canada are guilty of poor management. That is more or less how this will be interpreted.

[Ray Boughen, Conservative, 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.