Thank you very much, Mr. Chair.
It's been one of those days, so I do apologize for the ten minutes that I kept you waiting.
I'm pleased to be joined by Karl Jacques, who is from our justice department; Brenda Kustra, the DG for governance with my department; and Andrew Francis, who is CFO in corporate accounting for the department.
I'm happy to speak to Bill C-27 and to respond to your committee's questions. As I indicated when Bill C-27 was first introduced last fall, the First Nations Financial Transparency Act is one of a series of initiatives that will help to build stronger, more self-sufficient first nations communities. It complements Bill S-6, the First Nations Elections Act. Both are important pieces of legislation that will strengthen transparency and accountability in first nations governments and will help to empower first nations people.
The first nations residents want and expect transparency from their elected representatives. Like all Canadians, they want assurances that funds are being used to improve their communities' quality of life and economic opportunity. We believe that first nations citizens should have access to the financial statements of their governments and information on the salaries of their elected officials, as do other Canadians.
Democracy depends on citizens being able to call their elected leaders to account to ensure they represent the community's best interests. Under current Indian Act policy, first nations community members may ask for financial information relating to their band. However, the first nation is currently not legally required to release this information. As a result, each year my department receives requests from first nations individuals looking for this basic information, which we believe they should be able to access directly from their band. I would much prefer not to be the middleman in responding to these requests.
Mr. Chair, Bill C-27 would directly address this issue by requiring first nations governments to publish annual audited financial statements and a schedule of the salaries and expenses of their chiefs and councillors. This would ensure that first nations community members have the necessary information to make informed decisions about their governments. It is important to note that this bill would not set salary levels for chief and councillors, rather it will remain the responsibility of the first nation to set the appropriate level of remuneration for elected officials. Bill C-27 will simply provide for the public disclosure of financial information that would allow the membership to decide if levels of compensation are appropriate.
A real or perceived lack of transparency and accountability from first nations leaders can also erode investor confidence and impede a community's ability to take full advantage of economic development opportunities. Ultimately, this delays or destroys job opportunities and economic progress for the first nation community and its members. On the other hand, we know that increased transparency and improved financial reporting leads to increased investor confidence and ultimately a stronger economy. That is why it is essential that such information be easily accessible, not only to first nations residents, but also to the broader Canadian public.
The publication of financial information will make it easier for analysis and comparisons to be done by a wider group of people, including academics, the media, economists, investors, and the general public, as is the case with information provided by other governments in Canada.
A question that came up during second reading of this bill was whether the public disclosure of financial statements of band-owned businesses would undermine their competitiveness. The simple answer to this is no. Bill C-27 would not require each individual business owned by the band to publish its detailed financial statements. Instead, Bill C-27 would require the publication of the audited consolidated financial statements of the first nation as a whole, which would include any entities controlled by the first nation, including band-owned businesses. I emphasize that this is in accordance with generally accepted accounting principles and rules that already apply to government-owned businesses across Canada. These statements are highly aggregated and should not reveal any proprietary information that would undermine their competitiveness.
We are reviewing the language of the bill and are receptive to clarification, consistent with matching the spirit and intent of the bill.
I also want to take this opportunity to be absolutely clear on the fact that this proposed legislation would not create any additional paperwork for first nations governments. They already produce audited consolidated financial statements each year, which are audited by independent, accredited professional auditors, as a requirement of their funding agreements with my department. This bill is not requiring anything new.
Similarly, what we are asking of chiefs and councillors is no different from what we ask of ourselves as parliamentarians. For example, the Government of Canada posts its financial statements on the Internet, and all of us, as members of Parliament, now fully disclose our salaries and special allowances to the public, as required under the Parliament of Canada Act and the Salaries Act. Canadians can easily access this information and more, since the Federal Accountability Act has increased the public's access to information about government activities.
Provincial and territorial governments have adopted similar practices, and the vast majority of them have legislation that requires municipal governments to make these documents public as well.
In short, first nations governments are the only governments in Canada that do not currently have a legislated requirement to make basic financial information public. This bill proposes to address this gap.
Now, many first nations are already posting their financial statements. I'm familiar with a number of first nations that are practising financial transparency and accountability. However, not all first nations communities have taken these steps. This bill will ensure that all first nations citizens can expect the same access to financial information in their communities.
As an example, since the private member's bill on this issue, Bill C-575, in the last Parliament, my department has been monitoring how many first nations post their financial information on the Internet. In March 2011, for example, 291 first nations had community websites, and only 13 of these disclosed salary and/or honoraria information. In September 2012, there were 403 first nations with websites, and 19 of those disclosed salary information. This demonstrates that a growing number of first nations see the benefits of being open about this information.
We expect that once this bill becomes law, and posting financial information becomes the norm for first nations, as it is for all other governments in Canada, many first nations will not only meet the expectations of the legislation but will surpass them. These are the communities that will benefit most from this legislation.
Mr. Chair, Bill C-27 fully addresses the point that not all first nations have websites. A first nation will not be required to have its own website as a result of this bill. If a first nation were not able to publish the information electronically itself, it could ask another organization to post it on the community's behalf. Alternatively, the first nation could ask my department to post the information on its behalf. However, we should be clear that having these documents published on a website does not fulfill a first nation government's obligation to make copies of financial information available to its members. Although we continue to make progress on increasing Internet connectivity in first nations, many first nation members still do not have easy access to the Internet. As a result, first nations will need to find ways to make this information available to their members who do not have Internet access. Many already do this either by distributing printed copies to households or by making the information available in readily accessible locations in the community, including band offices.
As I mentioned at the outset, my department receives many requests each year from first nations members seeking assistance in obtaining basic financial information from their own government. First nations citizens should not have to go to the minister for this information. It would be more appropriate for first nations citizens to obtain this information directly from their band councils. This bill would provide first nations with the tools they need to access this information and ultimately lessen my role as the minister, which is consistent with my desire to lessen ministerial intervention in what should be community-based decision-making.
Mr. Chair, this bill does not propose radical measures. They are the minimum that citizens should expect in a democracy. First nations residents have the same expectations in this regard as other citizens, other Canadians.
Bill C-27 will result in increased public trust, both from community members and Canadians at large. This will translate into increased business opportunity. This bill will help to assure potential investors that they can safely enter into joint financial agreements and business undertakings with first nations. This will contribute to social and economic improvements in the lives and livelihoods of first nations members.
Mr. Chair, I'm happy to have had this opportunity to speak to the committee. Bill C-27 is a landmark bill that is long overdue. It will bring many benefits to first nations communities and encourage self-sufficiency.
I would be pleased to answer questions at this time.