Mr. Speaker, before I launch into my speech, there are a couple of points that the parliamentary secretary raised that I have to comment on. First of all, part of the problem the House is facing is that the Conservative government fails to recognize a government-to-government relationship. That is a fundamental principle underlying the opposition to this particular piece of legislation.
The member talked about consultation. However, if the Conservatives truly support the UN Declaration on the Rights of Indigenous Peoples, which they claim they do, they would look at section 19 that talks about free, prior and informed consent. First nations from coast to coast to coast are saying there has not been free, prior and informed consent on this piece of legislation.
There is another point around this. I would absolutely agree, everyone in the House agrees and first nations agree, that there does need to be accountability and transparency. However, it is how it happens that is critical to this conversation. We have seen the government, once again, unilaterally impose its vision of what accountability and transparency looks like.
The parliamentary secretary quoted a 2010 resolution from the Assembly of First Nations. I want to quote from a paper from 2006, where the Assembly of First Nations was calling on the Conservative government to work with first nations from coast to coast to coast in developing this kind of accountability and transparency. The Assembly of First Nations had a detailed position paper, which also included the suggestion that:
[First nations-led and first nations-specific institutions] will be needed, as First Nation citizens must be empowered to hold both their local governments and the Government of Canada to account. Such institutions include an Ombudsperson's office, so that individuals have a trusted venue to pursue accountability concerns outside of either the local or federal governments. They would also include a First Nations Auditor General who could both provide ongoing advice to assist FN governments in providing accountability and, at the same time, improve accountability by exposing problems and recommending solutions.
In 2006, first nations had a solution to deal with this. Six years later, we do not have to be dealing with a piece of legislation that is being unilaterally imposed by the Conservative government.
I am not going to go over the full details of the bill because we have now spoken about it a number of times in the House. However, the bill would essentially require audited annual consolidated financial statements; a separate annual schedule of remuneration which would include what is paid to the first nations, and any entity controlled by the first nations, its chief and each of its councillors; an auditor's written report respecting the consolidated financial statements; and an auditor's report respecting the schedule of remuneration.
Also, as members have already pointed out, there are some punishments if there is a failure by the first nation to comply, such that any first nation member may apply for a court order to the Superior Court; any person, including the minister, may apply for a court order to the Superior Court; and, the minister may develop an appropriate action plan to remedy the breach, which could include withholding funds or terminating a funding agreement.
I neglected to say at the outset that we will continue to oppose the bill rigorously. We did propose a number of amendments to try to improve the bill, including deleting some of the more egregious clauses, but those amendments were not supported.
In an article from iPolitics entitled “...the government's hollow embrace of transparency” the author says that “...its call for greater financial disclosure rings hollow coming from a government which is failing the transparency test itself”. Of course, it was welcomed to hear the parliamentary secretary talk about embracing the one rule for all. Perhaps the government will now cough up details on some of these following items that have been identified.
The article goes on to say:
Unfortunately, back in Ottawa, the federal government is also proving to be far more opaque than accountable.
In 2011...the interim auditor general, blasted the Conservatives for spending on the 2010 G8/G20 summit. Quoted in the National Post, [he] said: “Rules were broken. Lawyers could have an interesting debate as to whether any laws were broken.” [He] criticized the government for having no supporting documentation for the selection of 32 projects in the [gazebo] riding.
In 2012, Auditor General Michael Ferguson took the government to task over its failure to disclose the true cost of purchasing 65 F-35 fighter jets. According to Ferguson, the cost of acquiring the planes over their 20-year life cycle was not $15 billion, as the government claimed, but $25 billion.
That estimate was closer to one made in 2011 by Parliamentary Budget Officer Kevin Page. After Ferguson's report, Page told CBC Radio’s Evan Solomon that it appeared that one set of books was available inside the Department of National Defense, while another was presented publicly by the government “for communication purposes.”..
Page, of course, made more headlines this week when he filed a reference application with the Federal Court of Canada to gain access to details of the federal government's austerity measures, which have so far been denied to his office.
This is the context we are working in. On the one hand, the government is saying to first nations chiefs and councils that they must be more accountable than almost any other government in the country. On the other hand, it will not produce basic fundamental documents to tell the Canadian public how it is spending its money. It seems to me that this inconsistency needs to be addressed before we move forward with Bill C-27.
I want to quote a law professor. I know many will be interested in this because she is not just a law professor, but former chief Judith Sayers. She is the national aboriginal economic development chair and the assistant professor of business and law at the University of Victoria. Also, she was formerly a chief of her nation. Therefore, she has a very good grasp of the situation that is facing first nations.
In her letter to the standing committee of November 20, 2012, she says:
To ensure First Nations members get copies of financial statements, provisions to do that could be placed into these funding agreements between AANCD and the First Nation.
She is proposing a solution instead of Bill C-27. She is proposing that this clause be inserted into these agreements. She also said:
There could also be a process put in place that if a First Nation did not provide their members with Financial Statements within 120 days of the year end, that the members could go to the auditor’s office and receive copies. The First Nation would be required to put this in the letter of engagement with the auditor and compensate the auditor for costs of making copies of the audit. Legislation is not required to do this when agreements have dictated First Nation/AANDC fiscal relationships and this can continue to be the tool that can accomplish this.
She goes on to say that passing the law to make first nations provide their financial statements to their members is “not a step toward self governing Nations nor does it make them accountable, it only makes them compliant”. This is a key point because the government continues to claim that there will be a miracle that will occur when first nations are required to post their consolidated financial statements, that all of a sudden economic development will occur and there will be lots of accountability. That is simply not the case.
Ms. Sayers goes on to say that part of the problem with the bill is that it is not just money from the federal government, but from the first nations own source revenues, such as grants from organizations, provincial governments and any other entities.
The Federal Government does not have jurisdiction over moneys received from other sources and cannot compel the First Nation to be providing this information to the public.
She is outlining a legislative authority regarding providing financial statements and legal entities to the public. She says:
It is my submission that the federal government does not have authority to legislate with respect to any corporation, society or other legal body incorporated under provincial laws to provide financial statements to members of the First Nation and more problematically, to the public at large.
Then she quotes section 91(24) of the Constitution Act, which gives authority to the federal government over Indians and lands reserved for Indians.
The proposed Bill C-27 claims authority over an “entity” which means a corporation or a partnership, a Joint Venture of any other unincorporated association or organization. Any “entity” that is incorporated under provincial laws whether it is a Corporations Act or Societies act or Cooperative becomes a legal entity, an entity that cannot be considered an “Indian” over which the federal government has no jurisdiction.
That is an important point because the government is now stepping into territory that many first nations feel they have absolutely no authority over. She continues:
If First Nations are incorporating their businesses using provincial law as most do, the Federal government cannot then override the provisions of the provincial law.
Provincial Laws do not require that financial statements go to anyone other than the Directors and Shareholders of the corporation. In BC shareholders access to financial information is subject to the terms and conditions of what is set out in the articles of incorporation of the company. So in the instance where the members are shareholders, or have a trustee that holds the shares for them, the financial statements will be available to the members to see by virtue of provincial law.
It would be my submission that the Federal Government cannot define consolidated financial statements of the First Nation as “those of any entity that it controls that are presented as those of a single economic entity” if those entities are a legally incorporated society/corporation/cooperative, partnership, joint venture under provincial law.
I reiterate the fact that the government is now requiring the chiefs and councils to provide any income from these entities and that these entities would be aggregated in the consolidated financial statement. This associate professor of law is claiming that it is overstepping its jurisdiction.
In her conclusion, Ms. Sayers says:
I respectfully submit to this committee that Bill C-27 is not needed and if it does proceed to law, must be fully overhauled to narrow it to areas where the federal government has jurisdiction. First Nations will be challenging this legislation in court regarding this issue and since AANDC spends more than any other federal department on legal fees, this does not seem like a desirable course of action.
That is an opinion that the legislation is not required and oversteps federal jurisdiction.
I want to make a couple points about the testimony in the committee meeting of Wednesday, October 24, of Mr. Harold Calla, the chair of the First Nations Financial Management Board. He raised a point about audits, which is important. He says:
First of all, an audit is a look at history. It's a reactive statement, and it's not designed to be proactive in informing and supporting future decisions. While an audit is a necessary and important part of the overall financial management system, there are many other elements of a financial management system that should not be lost in this discussion.
All orders of government are accountable. Within the federal system, the need for an increased emphasis on oversight within budgeting and forecasting has been recognized as a best practice with the establishment of a parliamentary budget officer. This is an example of an evolving world and perspective of what practices and standards should become as part of the overall financial management system. Good financial management practices should not be defined solely by political objectives. Good financial management should be driven by the needs of all stakeholders and should inform them.
In the case of first nations, this should include the financial results of the transaction activity it undertakes for the delivery of programs and services that a first nation is mandated to deliver. Although an audit does contain notes, these notes are generally a clarification of financial facts. An audit does not make qualitative observations or recommendations, nor does it give a clear indication of future direction.
Mr. Calla went on to talk about an annual report. As he has pointed out, a consolidated financial statement is a retrospective. It talks about the money that has been spent in a bunch of different categories, but does not talk about the results that have been achieved with that expenditure of money. The government claims that it will open up economic opportunities, but that kind of analysis must be done about where money is spent and what results are achieved in order to get that financial snapshot.
One of the issues absent in the bill, and has been absent largely in the discussion, is what kinds of resources the federal government is providing to first nations in order to help them with capacity building. We have recently seen cuts to tribal councils and other aboriginal organizations, which are the very organizations that provide some of the capacity building and support. On the one hand, first nations would be required to do something in addition to what they already do. On the other hand, the government has cut the very services and program supports that could help them develop the economic capacity, which everybody knows is a step toward lifting first nations out of poverty.
Mr. Calla further says:
The purpose of measures that support financial reporting or being accountable and transparent should create confidence in all stakeholder groups in the financial...capacity of the entity and give an indication of their fiscal capacity. It is always better when stakeholder groups, in this case our communities, are able to establish the accountability and transparency framework that they wish to establish for their community...
It is best if communities pass their own laws and agree to independent oversight by third parties. This is the concept developed by the First Nations Fiscal and Statistical Management Act, and it is currently being explored by 58 of the approximately 100 first nations that have become scheduled under the act.
Once again, there are first nations that do an exemplary job and there are organizations that support this.
I want to quote Jean Paul from the Membertou First Nation who attended the same meeting. He says:
All the information required by the new act is already being provided by the first nations in Canada to AANDC, as per their existing funding agreements over years and decades. Only last year the issue was pushed to the forefront, and now a bill will require all first nations to comply or...AANDC will release the information, and as a last resort, all funding will be stopped.
Mr. Paul raises the question about whether anybody has examined the implications of taking funding away when many first nations are delivering essential services to their communities, which include water, housing, education and so on. That question also has not been addressed.
In an email from AFOA Canada, which again provides support to the financial officer, it says:
Having said all this, the overriding issue here is that only by stating the words “First Nations” within the proposed Bill C-27 and defining these words as per the Indian Act, the government is signaling out a specific group of Canadians. This is of concern because of the increased financial level of reporting and accountability required which includes the schedule of salaries, honoraria, travel and other remuneration. More is being asked of First Nations than other groups of Canadians. If First Nations are not recognized as governments, why are we even comparing them to other governments? And even if they were recognized as Governments in legislation (which they are not), there is a higher standard required upon First Nations within this Bill.
It is interesting because the parliamentary secretary and others have talked about the fact that this is the same standard that is applied to everybody. I will quote from the conflict of interest code for members of the House of Commons. Although we do have to declare if we have an interest or if we receive remuneration from another organization, under the content of our disclosure, it says “the source and nature, but not the value, of the income, assets and liabilities referred to in the Member’s statement filed under section 20”.
When it comes to contracts or subcontracts, it describes the subject matter and nature. It says, “The following shall not be set out in the summary: a source of income of less than $10,000 during the 12 months before the relevant date”. Once again we have a situation where first nations will be asked to report in a way that members of the House of Commons are not asked to report.
In an analysis that the Assembly of First Nations did on Bill C-27, it indicated that there were several provincial governments in Canada that did not have the same kind of reporting requirements.
Nova Scotia's summaries of expenses of ministers are located at the Legislative Library for public viewing. The Government of Northwest Territories only publishes travel expenses of ministers and does not require salary disclosure of elected officials or senior public servants. Neither Yukon nor Prince Edward Island disclose salaries of elected officials.
The claim that first nations would have to comply with what every other level of government in Canada does is simply not true.
There have been issues raised around privacy. When the privacy commissioner came to the aboriginal affairs committee on October 31, she raised four key questions that needed to be answered. One was the measure demonstrably necessary to meet a specific need? Two was it likely to be effective in meeting that need? Three was the loss of privacy proportional to the need? Four was there less a privacy invasive way of achieving the same end?
This is a serious matter because we are asking first nations chiefs and councils to report in a way that many other entities are not required to report. Those four fundamental questions around privacy were never effectively dealt with. It was outside the scope for the privacy commissioner to make comments on particular legislation before the aboriginal affairs committee, but those are very serious issues that need to be addressed.
The fact that there has not been an appropriate consultation, that there are some serious questions that the consolidated financial statement, by including entities that are band owned, oversteps the authority of the government, that the privacy issues have not yet been adequately addressed and that the issues around the capacity building are not addressed in helping first nations ensure that they have the capacity to provide this information to their members, none of these issues are addressed adequately. Based on this, the New Democrats will oppose the bill at third reading.