Indigenous and Northern Affairs Committee on Oct. 15th, 2012

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

My thought, Minister, is just to repeat what first nations are saying to me.

[John Duncan, Conservative, Vancouver Island North, BC]

There is nothing in this bill that other governments don't require, and there is nothing in this bill that isn't already being reported. In some cases, those who are reporting publicly are already reporting more than what we are asking for. Just out of self-interest, they have decided they wish to do that.

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

Can you tell me why you didn't consult with first nations before you tabled this bill, and also on the proposed education bill? People are very upset.

You said you had reset the relationship with first nations, and you're raining down this legislation without consultation.

[John Duncan, Conservative, Vancouver Island North, BC]

I can tell you, Carolyn, that there is no education legislation. I have put this in writing. We are going to engage in intensive consultation before there is any first nations education legislation.

I've already responded to your questions about why this bill is before the House of Commons and I think my explanation was quite clear.

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

My colleague mentioned the Montana decision, and it's very clear that the Access to Information Act does not require it to be subject to public disclosure. The chief and council must report to their bands, not to the public.

Could you tell us again, how do you think—as my colleague asked—it's any different now from when it was before the courts? Do you think this bill will satisfy the courts? What has changed from the last time this went to court?

[The Chair, Conservative, Chris Warkentin]

I do apologize. There is only time for about a 20-second response, but if somebody has that, that would be....

[John Duncan, Conservative, Vancouver Island North, BC]

Once again, I'll defer to Karl to give a 20-second response.

[Karl Jacques]

I'll try my best.

Again, just to situate the Montana decision, it was based on an access to information request. Once the information is published, the Access to Information Act doesn't apply any more, so that information becomes public. There is no confidence, no disclosure that could be made, because it's already out there.

[The Chair, Conservative, Chris Warkentin]

Thank you very much.

We'll turn now to Mr. Rickford for seven minutes.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Chair.

Thank you, Minister, for being here today.

Minister, in your presentation here today I think it was pretty clear what the audited consolidated financial statements would include for a band, and we know them to be things that are currently already reported on.

With specific reference to chief and council, salaries, wages, commissions, bonuses, fees, honoraria, dividends, monetary and non-monetary benefits would be reported. In fairness, the issue that has come up is with respect to a scenario in which the expenses of the said first nations leaders have to do with a band-owned or band-operated business, or to the extent that a council member is involved in a business.

You've suggested a strong willingness to address any residual issues if there are any. Can you characterize for us what they would have to report on the audited consolidated financial statements as a result of these businesses?

[John Duncan, Conservative, Vancouver Island North, BC]

Yes, I can.

As I've said, this information is already provided in their consolidated financial statements to the department, and the standard with respect to what information is provided in these statements is determined by generally accepted accounting principles. I'm not an accountant, but there are generally accepted accounting principles; there is a handbook. My colleague, I'm sure, could define it quite well.

Information that would be disclosed in the schedule to the financial statements—and this is the salary portion—includes the salaries, wages, commissions, bonuses, fees, honoraria, dividends, and any other benefit the chiefs or councillors are receiving. The expenses of first nations leadership, such as transportation, accommodation, meals, and hospitality, would also be reported. They would be required to disclose remuneration paid to them by any entity controlled by the first nation. If a member has a private business, that's not included.

This reflects current practice, as first nations are already required to report the remuneration and expenses paid to chief and councillors separately as part of their requirement under the current funding agreements with the department.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Minister.

It's safe to say that remuneration earned from band-owned businesses, then, is captured in those consolidated financial statements. Can you explain why remuneration from entities controlled by first nations is covered in this bill?

[John Duncan, Conservative, Vancouver Island North, BC]

I can, and I'll probably get Andrew to round it out because of his detailed knowledge.

The purpose of this clause is to capture the schedule of remuneration, any monetary or non-monetary benefits earned by first nations elected leaders as a result of their activities as leaders of their communities. Many first nations establish corporations that are partially or wholly owned by the first nation. Often chiefs and councillors serve as directors of band-controlled entities and may receive per diems or expenses or some other form of remuneration. Given that the band is the owner of the corporation, and the corporations may be sole-source providers to the band, it is appropriate that members be provided with an accurate and complete picture of the remuneration received by elected leaders.

Did you want to add anything to that, as the CFO for the department?

[Andrew Francis, Director General, Corporate Accounting and Material Management, Chief Financial Officer Sector, Department of Indian Affairs and Northern Development]

Mr. Chair, the minister did a very good job in responding to that question, but just to be more specific on first nations in general, when they do their financial statements they follow a common government reporting model, which is there to structure the way any government would do the bare basics, in terms of GAP.

Within that model...and I think the businesses you referred to would fall under government business enterprises. Those are the types of businesses that could roll up under a government entity and that are the most like a private entity. For instance, they're a bit separate. They'll service outside clients, beyond the first nation. There will be a separate legal entity. There are a bunch of accounting considerations to be given as to what would be considered a government business enterprise. When those are consolidated, the bare minimum requirement is to consolidate them on the equity basis, which basically means the net loss or profit is just brought into the equity portions. When the first nation reports on those subsidiaries, they don't report the books for that company within the financial statements.

That said, the minister earlier commented that there were a number of financial statements that are already in the public domain. A number of those go beyond the requirements of transparency of the bare bones of GAP, which is interesting.

[Greg Rickford, Conservative, Kenora, ON]

Do I have more time, Mr. Chair?

[The Chair, Conservative, Chris Warkentin]

Well, I think it's over, just because if you ask a question you'll be out of time, so we'll turn now to Ms. Hughes for five minutes.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Thanks very much.

I find it interesting that we're talking about accountability and transparency. It's something we haven't seen much of lately.

You talked about ongoing requests from band members as what enacted this, but you said that you don't have numbers. If we only went by ongoing requests and looked at the ongoing requests for funding for education or parity for the child care workers, those haven't been acted on, yet we choose this one here.

I want to clarify something. You've often used the word “clarification” as opposed to “amendments”, so I just want to make sure that the word “clarification” means that you're open to amendments and that you will certainly make some amendments to this document.

In addition, the AANDC website says:

The Tribal Council Funding program funds tribal councils to provide advisory services to their member First Nations and to administer other Indian and Northern Affairs programs. Tribal councils are institutions established voluntarily by bands. In 2006-07, the program transferred $44.9 million to 78 tribal councils serving 471 First Nations. Five advisory services have been devolved to tribal councils: economic development; financial management; community planning; technical services; and band governance.

Can you tell me how the announced cuts to tribal councils' funding will affect the ability of smaller bands to meet the requirements of this legislation?

[John Duncan, Conservative, Vancouver Island North, BC]

Thank you for the question.

On the question of clarification, yes, to clarify, I mean that it will require amendments to clarify.

On the question of tribal councils, one of the things that became very clear—more clarification here—is that we had not actually looked at the overall spending for our aboriginal regional organizations or our tribal councils for essentially three decades.

We did that; there's been a lot of change during that timeframe and there's been a direction towards more and more community-based decision-making.

In terms of the ability of small communities to meet the intent of this legislation, I don't think there's any question that they can meet the requirements of Bill C-27 because essentially they already are, as I've said in my remarks.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

If financial management and band governance advisory services were devolved to tribal councils, why were they not consulted about this proposed legislation when it was introduced as well? There's no consultation with the first nations, there's no consultation with the tribal councils, and I know that the tribal councils are pretty up in arms with respect to the cuts. I know that Chief Shining Turtle certainly has been sending you quite a few e-mails on this, as have other chiefs, and I'm wondering why they weren't consulted either.

[John Duncan, Conservative, Vancouver Island North, BC]

If you look at the fact that we are the senior government in the country and have budgetary obligations that are basically universal and flow to the provinces, to the territories, and to all kinds of organizations, when we went through an essential budgetary exercise, my prime responsibility as minister was to ensure that community-based services were unaffected. We ended up with the second-lowest reduction in funding of all federal government departments. That is testimony to the fact that we have a strong commitment to our responsibilities in aboriginal affairs and in northern development. This is not a question that belongs in any area other than decision-making that must be taken by a senior level of government, and I think we did it quite responsibly.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

I just want to make a statement here. It's with respect to the fact that the aboriginal communities are already underfunded. They shouldn't have been cut at all.

[The Chair, Conservative, Chris Warkentin]

Ms. Hughes, your time is up. We were just giving time for the minister to finish in response.

Having cut him off, I will now move to Mr. Wilks for his five-minute round.

[David Wilks, Conservative, Kootenay—Columbia, BC]

Thank you, Chair. Thank you, Minister, for being here today.

Before I get to my questioning, I just want to say that as a former mayor, I fully understand the full disclosure of financials. Sometimes when they are done—in fact, all times when they are done—they resolve many problems before they become problems. Certainly, the burden placed on elected officials is minimal, is expected, and is certainly not intrusive.

Having said that, will the proposed legislation create any additional paperwork for first nations?

[John Duncan, Conservative, Vancouver Island North, BC]

No. This bill will not create additional paperwork.

This whole question of reporting burden is actually an interesting question. We, as a department, have been looking at earlier criticisms from the Auditor General and others about the level of reporting burden that was in existence before this legislation ever came along. We have launched a reduced reporting initiative. That started in fiscal 2010-11. Informal usage of reports at that time was actually quite a gargantuan number. It was 4,800 reports. At the end of fiscal 2011-12, the number had fallen from 4,800 to 800, which is a reduction of more than 80%. Formal reports have been reduced from 141 to 111 in that same timeframe.

In addition, we have pilot projects in 10 communities where, rather than reporting to the department, the community reports directly to its own citizens. My department extracts from those reports the information we require internally. There has been actually quite a bit going on to reduce the reporting burden.

A year ago, we standardized the reporting of the annual consolidated financial reporting.

Am I correct, Andrew?

[Andrew Francis]

Yes, you are.

Before we had an extensive year-end reporting manual. I wouldn't say that it was overly repetitive, but we did bring it down to what was absolutely necessary for capturing some of the programs to ensure that we could go back to Treasury Board, for instance, and say that terms and conditions were met. There has been a lot of energy and creativity to find, look at, and experiment with ways to reduce the reporting burden.

As the minister said, we have some pilots going on right now, and our task has not ended. We continue to further explore ways of reducing the reporting burden.