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.

First Nations Financial Transparency Act

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I wonder whether the hon. member recognized and took note of the supreme irony of introducing a bill on the very day that the Parliamentary Budget Officer has to sue the government in order to get basic information on which all of us rely in order to make informed decisions in this place. Is it not hugely ironic that a bill that is designed for transparency and accountability for some people does not apply to the government?

We have the Office of the Parliamentary Budget Officer, created and given a mandate by the Conservative government in the first bill that it came in on, and when the Parliamentary Budget Officer asks for basic information from 80-some departments and agencies, which is their spending plans going forward, more than 70 of them just blow him off on the instructions of the Prime Minister. It appears that there is accountability for some but not for the Conservative government. How ironic is that?

I just wonder whether the hon. member would consider moving an amendment and that the amendment might be that the accountability in this bill be paralleled by accountability by the Government of Canada, and that we have the same transparency in the Government of Canada that is expected in this bill.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, as my colleague was talking about the issue, the word that popped into my mind was “hypocrisy”. That might be an applicable term in the particular situation as he described, which I thought was a fair assessment. When we have the Parliamentary Budget Officer asking for more transparency and accountability and the government saying no, there are some problems with consistency.

There are many examples we could use but I will use the $16 orange juice example, which is a relatively inexpensive one. However, we could go to the other extreme. How many of us are familiar with the F-35? We are talking about billions of dollars in this case and the government does not provide any information that is credible or legitimate to the public. We still do not know how much or how many F-35s we are talking about. Those are basic questions and yet the government has failed to be accountable on that issue and has failed to be transparent in terms of what has been done on that particular file where we are talking about billions of dollars.

I think there is a lot room for improvement with this bill, especially if the government wants to be consistent in what it would oblige our first nations to do.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, the hon. member's speech has brought to my mind the discussion that took place in 2004-2005 that ultimately led to the historic Kelowna accord with aboriginal people in this country. It involved 18 months of detailed consultations with five national aboriginal organizations, 30 different departments of the federal government, 10 provinces and three territories. It was a very successful and cordial effort at bringing people together to find common solutions.

Kelowna touched upon housing, water, education, health, economic development and, most critically apropos the subject tonight, it talked about governance, accountability and transparency. Work plans were put together in all of these areas for the Government of Canada, the provinces, the territories and aboriginal organizations to move forward together, and those work plans were fully funded.

The point is that under the area of governance, accountability and transparency, the idea had emerged from the former chief of the Assembly of First Nations for a first nations auditor general to pursue this notion of accountability, transparency and good governance in terms of the operations of all first nations across the country.

I wonder what the hon. member thinks of the idea of a first nations auditor general, who would be trained and developed by the Auditor General of Canada. What about that idea to improve the transparency among first nations in this country?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the question illustrates something I was attempting to emphasize earlier, the fact that many different leaders within the first nations and aboriginal communities have fantastic ideas that would really make a difference. The idea of a first nations auditor general came from that leadership and was supported by the Liberal Party of Canada. That idea would be of great benefit, and I understand that is going to be one of the amendments. That is why I say the government needs to have an open mind on this issue. Such an amendment would really make a positive difference.

With regard to the Kelowna accord, I cannot help but think about how massive a project it was to bring all the stakeholders together to develop that plan. The Paul Martin government ultimately pulled it all together. I am sure it saddens many individuals, even many of my colleagues, to see that plan flushed down the toilet by an insensitive, uncaring Conservative government that did not see the value of working with our first nations people and aboriginal leadership, because we would have answers to many of today's problems if the Kelowna accord was still with us.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Mr. Speaker, the hon. member touched on the theme that a failure to lead by example is a failure to lead. He touched on several instances of the government failing to lead by example and, therefore, failing to lead. For example, he touched on the notion that while the Conservatives espouse accountability for others, they seldom impose accountability on themselves. Several instances were mentioned, but I would like to point out some others.

For example, the Prime Minister's Office itself refuses to divulge key pieces of information on decision-making. In fact, the chief of staff to the Prime Minister has to exempt himself, and we are not really sure exactly what he is exempt from and what he is allowed to participate in, because of a very convoluted tree—well, a shrub—of conflict that exists within the Prime Minister's Office.

I would ask the hon. member this: does he feel as though the government is leading by example or not leading at all?

[The Speaker, Conservative, Andrew Scheer]

The hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I believe the government is very lacking in the area of leadership on the whole aboriginal file and that the member is right in his assertion that government does need to give more attention to the file.

I cite Attawapiskat as an example. When it came to the floor of the House as an issue, the leader of the Liberal Party or the Liberal Party critic went out to check it out first-hand and to meet with individuals. Where was the government?

There could be other issues around it and so forth, but what I believe Canadians want to see, generally speaking, is a government that cares. I do not believe the government has been successful in demonstrating that it genuinely cares about the aboriginal community by taking the actions necessary to—

[The Speaker, Conservative, Andrew Scheer]

Resuming debate. The hon. member for Bonavista—Gander—Grand Falls—Windsor.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I was reading through the legislative summary for Bill C-27, an act to enhance the financial accountability and transparency of first nations. I want to thank Tonina Simeone and Shauna Troniak at the political affairs division for doing this superb legislative summary. Sometimes we do not give enough credit to our people at the Library of Parliament, and they deserve it.

For the sake of a bit of history, let us take a look at the legislative summary and its discussion of this particular piece of legislation. At one point it states:

First nations bands are subject to certain financial disclosure requirements under the Indian Act and related statutes and regulations. In particular, section 69 of the Indian Act provides that the Governor in Council may, by order, permit a First Nations band to “control, manage, and expend” its revenue, and may issue regulations giving effect to that permission. Accordingly, the Indian Bands Revenue Moneys Regulations require, in part, that a band's financial statements be audited annually, and that the auditor's report be posted “in conspicuous places on the Band Reserve for examination by members of the Band”.

The preface here from some of the debate seems to be that there is not enough accountability, or practically no accountability, when it comes to this, but as the legislative summary points out, there is a degree of transparency here that we must acknowledge before we advance into this debate.

It also talks about federal access to information and privacy legislation setting additional statutory rules respecting disclosure of first nations bands financial information. I mention two sections in particular, section 19 of the Access to Information Act and paragraph 20(1)(b) of the Access to Information Act.

With respect to the current policy-based requirements, the summary states:

The majority of funding arrangements between Canada and First Nations are in the form of fixed-term contribution agreements, under which First Nations must satisfy certain conditions to ensure the continued payment of federal funds. Requirements for financial reporting are also set out in AANDC’s Year-end Financial Reporting Handbook.

Once again we see a layer of transparency involved here that must be acknowledged before we advance into this debate.

I will now talk about some of the criticisms that I have with this bill and how the bill can be fixed.

In the spirit of things, let us face it, we all want transparency in the House. This is sometimes followed, and as my hon. colleague from Winnipeg North pointed out, sometimes it is not, or at least it is talked about but is just not followed to the letter of the law.

The summary continues:

Under the Year-End Financial Reporting Handbook, First Nations must submit to AANDC annual audited consolidated financial statements for the 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 executive director, band manager, senior program director and manager. First Nations are also required to release these statements to their membership. In particular,

section 6.4.1 requires First Nations to disclose, both to their members and to AANDC, compensation earned or accrued by elected, appointed and unelected senior officials; and

section 6.4.2 stipulates that the amounts of remuneration paid, earned or accrued by elected and appointed officials to be disclosed “must be from all sources within the recipient’s financial reporting entity including amounts from, but not limited to, economic development and other types of business corporations”

The summary continues:

Reporting and disclosure requirements are further set out in various provisions of First Nations funding agreements, which must be read in conjunction with the Year-End Financial Reporting Handbook.

It states:

Section 2.4.3 provides that Council must prepare consolidated financial statements, to be audited by an independent auditor, and delivered to the Minister within 120 days of the Council’s fiscal year end.

Section 3.1 provides that Council must make available the consolidated audited financial statements, including the auditor’s report, to First Nations members upon their request.

Section 2.2.3 provides that the Minister may withhold funds otherwise payable under the agreement if the Council fails to provide to the Minister the audited financial statements required under the agreement.

Once again, there we find a situation where there is a layer of transparency that does exist, perhaps, in many cases—a level of transparency that the government can aspire to in certain instances, as the member for Winnipeg North—

[John McKay, Liberal, Scarborough—Guildwood, ON]

Dream on.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Dream on I shall, as we all do. If there were not a certain degree of dreamers, then we would not be here.

The summary continues:

In 2008, AANDC advised funding recipients that, effective 1 July 2008, funding arrangements would be amended to include audit clauses.

It goes on to say:

When a First Nation community is unable to meet the terms and conditions set out in funding agreements, AANDC may intervene to address this deficiency

Therein lies some power for the department for this situation.

I have some more background information regarding Bill C-27.

While First Nations receive funding from several federal organizations, the majority of federal funding is administered by AANDC. In 2011–2012, Parliament approved approximately $7.4 billion in appropriations to AANDC to support the provision of such services to First Nations communities as education, housing, social support and community infrastructure.

This certainly was the focal point of a debate that took place in the House, given the situation in Attawapiskat. The situation and argument were degraded to the point where there were many false claims. Many people were using it for political purposes from all corners of the House, and some of it was just blatantly false. That is the unfortunate part of it, because if we get into that part of debate within the House, then we lose sight of coming up with the best solution.

First Nations and the federal government are both subject to various policy-based and legal requirements....

Through decisions of the band council, management of council affairs, delivery of programs and services, and disclosure of annual financial statements, First Nations generally are accountable to their community membership for the use of public resources.

Again, this is from the legislative summary put out by the Library of Parliament.

Through various federal reporting requirements, First Nations are also accountable to AANDC for the federal public funds they receive.

In turn, through the annual audit cycle and program reports, AANDC is answerable to Parliament and the Canadian public.

We get ourselves into this situation. When we had a private member's bill the last time, the principles that surrounded the bill were certainly those accountability and transparency. Therefore, in principle, of course we support that.

Whether the government is practising what it preached many years ago, such as the Federal Accountability Act, remains to be seen. We will leave that to the electorate to decide.

However, in that debate on the private member's legislation, falsehoods were put out there that there was a degree of unaccountability that really did not exist. In other words, the impression was given to us that there was no accountability whatsoever. That is not the case.

If we are going to enact legislation here, Bill C-27 would go further than what that private member's legislation was about to do, to the point that it would put many bands and their money, in the sense of the corporations, in a bad place. It would put them at a disadvantage in many cases.

What is dispersed to the public could be used against them, but not in a political way, such as by calling a talk show or downgrading a particular community.

However, let us say that a band wants to invest. It is incorporated and it pays salaries. It invests in its people and in infrastructure to help develop its young people to become entrepreneurs, or lawyers, or doctors, all surrounded by an idea within a band that it will invest in something for its future. There are business plans, audited reports.

However, if all that is dispersed to the public, even members of the government have to admit that it would put first nations at a disadvantage. Therefore, without particular amendments, the legislation would become something that could be used against their future ability to improve their communities and their bands, to improve and educate their young, to be a part of global commerce and to identify themselves as world players on the stage, and they certainly can be.

Let us take a look at the communities in northern Quebec that protested against major hydro projects. They went down the Hudson River to make their point, and they made a very good point. Since then, protests have been followed by action, action followed by investment and investment followed by smart, educated young people in aboriginal communities. The average age is very low in aboriginal communities, to the point where we have lots of young people who would benefit greatly from the investments of some of these band communities.

The proposed legislation's desire to be more accountable and transparent is wonderful. It is what every organization, whether government, NGOs, or business corporations should aspire to. These great ideals of what we consider to be transparent are what any company should aspire to so that others are not held at a disadvantage. However, with Bill C-27, let us be careful with what it would do.

If we go after the ideal of transparency, we may overreach to the point where it becomes a disadvantage and would work against the future plans of a band or community that wanted to better itself and invest in its social structures, not just business investments, but in the infrastructure of the community.

We are sent here to do the mature, decent examination and analysis of policy within the House. Following the House, the bill would go to committee where it would face more scrutiny, and that is where the amendments would come into play. We hope in this situation, despite the fact that there is a majority government, the Conservatives will practice what they used to preach and do this in a reasonable way.

There are certain elements of governance that the Conservative government feels should not be as transparent, whether that is for national security or in certain interests of our nation. In many cases I agree, but in many cases I do not. We agree that there are certain amounts of information that should not be disclosed to the public. Therefore, would the Conservatives not agree that amendments should be considered honestly and openly to attain the best legislation?

We can have the best legislation that would do two things. First, and most important, it would provide that transparency, which, in principle, I support. Second, with amendments, it would create responsible legislation so communities would be able to invest in their future and their children.

There are many aspects of the bill that we could speak about that go beyond what was debated in the last session of the House on the private member's legislation. A private member's bill usually does not go in-depth like government legislation does. When there is a full department behind it, that makes the legislation larger. However, Bill C-27 overreaches in many areas.

Let us take a look at the consultation process, which is also involved in this situation, and another problem that the government has put forward. This is not just about legislation from Aboriginal Affairs and Northern Development Canada. I will use Fisheries and Oceans Canada and the copyright legislation as examples to illustrate my point about consultation.

When consultation is done, it has to be done both ways. It goes there and it comes back. The message is there and the message has to come back. In many situations that message did not come back from the base degrees by which we set legislation.

Therefore, what the consultation process brought forward was not one that I would consider to be beneficial to the debate within the House. Despite what the Prime Minister has said about recent Crown-First Nations Gathering resetting the relationship, the Conservative government has shown a total disregard for the rights of indigenous people.

The Supreme Court of Canada established that both federal and provincial governments had a duty to consult aboriginal people before making decisions that might adversely affect their aboriginal rights and, in some circumstances, accommodate aboriginal people's concerns.

Further, let us not forget what the United Nations Declaration on the Rights of Indigenous Peoples, which Canada signed, obliges Canada to obtain “free, prior and informed consent of the indigenous peoples” for matters affecting rights, territories and resources.

Let us go back to the resources aspect again. Coming from Newfoundland and Labrador, I can honestly say an investment in a resource certainly provides employment and more money in the coffers for provincial governments and therefore a better ability and more capacity to deliver social assistance programs when needed, as well as health care spending and education spending, the primary spending goals.

Looking at this in a particular way, we can see that the consultation process, when it comes to the resources aspect, did not bear fruit in the sense that if a particular band or community, or in other situations a province, invests in these resources, it has to be able to partake in the world of global commerce. As members know, when investing in larger resources, the world is where the market is. It is no smaller than that. Whether it is minerals or gas and oil, the world is certainly the ballpark we play in when it comes to investing in our resources.

This legislation will put some of these investments at a disadvantage because some of this information has to be dispersed to the public.

The expenditures and the direct subsidies into particular communities is a principle which we can agree on, but in this situation the government needs to take a second look at some of the changes that are necessary within this bill.

The Conservative government is imposing major changes to first nations financial reporting requirements, with no significant prior consultation with those who will have to implement these changes. Again, we go back to the idea of the consultation process. Certainly, we do not live up to that standard.

Let me repeat what is said in the United Nations Declaration on the Rights of Indigenous Peoples, “free, prior and informed consent”. That does not mean they have to put out a press release to say what they are doing. It means consent, meaning that there is a two-way flow of information, communication. I think it went one way, but the way it came back was not satisfactory to this debate. It is certainly not germane to this debate.

We have seen the same flawed approach on drinking water and matrimonial real property, with no discussions on the specifics of the bills with stakeholders before that legislation was tabled.

When the Prime Minister announced major changes to our pensions, he did so to a foreign audience. It was never discussed in the campaign itself. There was no consultation process.

On the existing reporting burden, Bill C-27 would do nothing to streamline the current overwhelming reporting burden, especially for small first nations with limited administrative capacity.

Coming from a riding that has over 200 small communities, the burden for administrative purposes weighs heavy. For those who live in a town of only 20 or 30 people and who are required to do report after report, it gets tiring after a while. I am not saying they should not do it, but at least the government could provide the capacity to help these people fill out these reports in a timely manner, in a way that is efficient and accurate.

In her 2002 report, the Auditor General recommended that, “The federal government should consult with First Nations to review reporting requirements on a regular basis”. That is sadly not within this legislation.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, I would like to ask my colleague a question.

We are talking about transparency, but above all, about good governance. At least I hope the government's intention was to improve governance. We know that the Conservatives eliminated the funding allocated to several institutions that had been helping first nations improve their governance. Two examples are the First Nations Statistical Institute and the National Centre for First Nations Governance. Perhaps the government now realizes that it made a serious mistake by eliminating funding to these institutions, and now it is trying to fix those mistakes. On the other hand, I have a feeling that what the government really wants is simply to control everyone and everything around it.

I wonder if my colleague could comment on the elimination of funding to first nations groups.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, my colleague brought up a point I did not get to in my speech. I am glad she did. I almost feel like she read my speech beforehand.

I want to talk about the statistical aspect. It is a good illustration of what I talked about earlier in my speech, the lack of information and the two-way flow of communication. Again, I go back to that UN declaration which called for informed opinion, decisions made for first nations that are informed. “Informed” and “consent” require two-way communication. If we cancel programs, such as the statistics that are gathered and acquired for fundamental decision making, then we are not that informed.

For example, we go to a foreign body, such as the United Nations Assembly, we sign agreements, then we come back and cancel the statistics program that gives us all that vital information on which we are basing these decisions. Ergo, we could go somewhere else, preach, come back and practise something entirely different.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I want to pick up on the point the hon. member was making that a lot of these smaller nations, aboriginal groups, have a limited capacity to fill yet again another report. We hear this not only from aboriginal communities, but also from NGOs. Even among NGOs, there is layer after layer of reporting, even when applying for a simple grant, to the point where they simply give up and walk away.

People would be interested to know that 60,000 reports are already being filed. I do not know how many reports we need after 60,000 reports. If we add yet another layer, and we are already going under water with the limitation of our capacity to file the original 60,000 reports, how effective would the so-called bill on transparency and accountability be?

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, my colleague has a valid point. I remember dealing with an organization in my riding. One of the gentlemen there called it “regulation creep”. Basically, he was tired of being regulated to the point where he was constantly filling out these forms that in many cases he felt he has done before. Sixty thousand reports is an illustration of just what kind of a burden is being put on these smaller communities. The administrative capacity for many of these places just cannot keep up.

However, let us look at the example of the Atlantic Canada Opportunities Agency. The government recently cut core funding to regional economic development boards. Our opinion of the boards may vary, but their function was a good one. Full-time employees on the boards used to help out smaller communities with administrative capacity. They would help them file applications or audit reports, and help them fill out activities reports that were required of them.

That is certainly what is needed here. Imagine the extra amount of capacity that is needed just to provide the information required of the smallest bands and communities with the passage of this bill. It is a situation where I suspect that they would be forced into doing something because the outcry is just way too much. The reason why there is an outcry is because the people who are complaining about it are saying that, had they come to them before the legislation was introduced, they might have been able to do something about it or had an answer.