Indigenous and Northern Affairs Committee on Oct. 22nd, 2012

[The Chair, Conservative, Chris Warkentin]

Colleagues, we will call this meeting to order. This is the 45th meeting of the Standing Committee on Aboriginal Affairs and Northern Development.

Today we have a panel of four different witnesses representing four different organizations. We will proceed in alphabetical order. We have the Canadian Taxpayers Federation; Colin Craig is the prairie director. From the Frontier Centre for Public Policy, we have Joseph Quesnel, who is a policy analyst. We have, from Patterson Creek Consulting, Mr. John Graham. And from Peguis Accountability Coalition, we have Phyllis Sutherland, who is the president of that organization.

To our witnesses, the standard practice is that we hear from you first. We'll allow you five minutes, to accommodate everyone. We'll give you some leniency, if necessary, to finish final comments. We're hoping we can keep to that general timeframe, and then we'll begin the rounds of questioning. At that point you may be able to expand on some of the points you've made.

We'll turn first to the Canadian Taxpayers Federation, and that's Mr. Colin Craig.

We'll turn it over to you. We'll hear what you have to say, and then we'll proceed through the witness list in alphabetical order.

Mr. Craig.

[Colin Craig, Prairie Director, Canadian Taxpayers Federation]

Good afternoon.

Thank you for the opportunity to speak here today on behalf of the Canadian Taxpayers Federation and our 79,000 supporters nationwide. I'm also pleased to speak here on behalf of the dozens of whistleblowers from aboriginal reserves across Canada who have sought help from our offices over the years and who support this legislation.

On behalf of both groups, I would like to begin with two words: thank you.

Thank you to the Conservative and Liberal MPs who voted in favour of MP Kelly Block's first iteration of this legislation, her private member’s bill, Bill C-575. We appreciate her efforts, as well as the federal government's, for tabling this legislation, and those who voted in favour of sending it to this committee.

Thank you for not turning a blind eye to corruption on reserves. Yes, “corruption” is a strong word, but when a public official takes advantage of the ability to set his or her own pay and to keep it hidden from the public while many band members suffer, there's no better word for it.

Anyone who has spent even a few hours studying this issue will know that reserves are already required to disclose their chiefs' and councils’ pay information to band members. Some chiefs and councillors in Canada are really good about disclosure, but we know from speaking with many grassroots band members that there are plenty of communities that simply keep people in the dark.

We've heard of communities that give audit documents to band members, but the chief and council pay pages are mysteriously missing. In other cases, band members are told to get lost when they ask for the information. Some have even been threatened for having the audacity to ask how much their elected officials are being paid.

Consider a message we received from a whistleblower from the Enoch reserve, just outside of Edmonton. The individual somehow got a hold of their chief's and council’s pay information, which showed that the small community’s chief made more than the Prime Minister.

The note reads as follows:

I am writing this letter out of pure frustration. I live on the Enoch Cree Nation and we should have no problem providing for our people. The problem is the greed of our leadership and the lack of motivation.... The government is far away and state you have to go through the local INAC office, where they refer you back to the leadership. I have requested copies of the budgets for several years from both INAC and Chief and Council and have never received anything.

If you think this is an isolated case, sadly, it is not. The number one concern our offices hear about from grassroots band members is the lack of transparency on reserves.

In 2010 we set up a website—ReserveTransparency.ca—and that site specifically helps to inform band members about their right to information. The site also explains how band members can get chief and council pay information, as well as audit documentation from the federal government, if their bands refuse to provide it.

When we held a press conference to launch the site, I invited Albert Taylor, an 84-year-old elder from the Sioux Valley Dakota First Nation. On the morning of the press conference, Albert mentioned to me that he drove in from Brandon the night before—a two-hour drive—and then spent the night sleeping in his car.

Think about that: why would an 84-year-old man drive for two hours and then sleep in his car to attend a press conference about an issue that some people say doesn’t exist?

Albert, along with many other band members, gave us quotes for the website, talking about transparency problems from their perspective. This is Albert's quote:

In the past I have been threatened and attacked for speaking out and asking questions.

Norman Martell, from the Waterhen Lake First Nation in Saskatchewan, noted the following:

My Band keeps its members in ignorance, no meetings, no committees and no information on band budgets or expenditures. Keeps them in power and free spending for themselves and their supporters.

After news of our website spread, we began getting copies of dozens of e-mails to Ottawa from band members across Canada. They were following the instructions on the site that laid out how they could get pay information from Ottawa if their band office wouldn’t provide it.

Not surprisingly, the only people in Canada who seem to oppose this bill are politicians, but the bottom line is that this is Canada and it’s 2012. Politicians, regardless of race and level of government, should have to disclose their pay to the public. Full disclosure will help everyone sort out the bad apples from the good ones.

Placing the information on the Internet will especially help band members, as it saves them the awkward conversation that comes when they walk into a band office and have to talk to the chief’s relative or friend who works there and ask them for the chief's pay information. Allowing them to access this information on the website will be in their best interests. Disclosure will help taxpayers off reserve know more about how public funds are being spent on reserves as well.

In terms of amendments to this bill, we recommend four for implementation.

First, post the audit and salary information for reserves going back five years. Ottawa already has this information, so it would be easy to do.

Second, put all audit documents online, not just annual audits. When audits are conducted for flood funding and other purposes, people often want to see that information too.

Third, clarify with reserves that totals reported in the travel column should reflect travel expenses, such as hotel bills and air fare, not paying people to attend meetings off reserve.

Fourth, ensure that the funds chiefs and councillors receive for sitting on tribal councils, provincial bodies, and other band partnership entities are reflected in pay amounts disclosed to band members.

In conclusion, we are pleased that Parliament is no longer turning a blind eye to these issues.

Thank you for considering our input.

[The Chair, Conservative, Chris Warkentin]

Thank you, Mr. Craig.

We'll now turn to Mr. Joseph Quesnel for five minutes.

[Joseph Richard Quesnel, Policy Analyst, Frontier Centre for Public Policy]

Good afternoon, ladies and gentlemen.

Thank you for the opportunity to address Bill C-27. I rise in support of this bill, but will express some concerns later.

My name is Joseph Quesnel. I'm a policy analyst of Métis descent with the Frontier Centre for Public Policy, an independent western Canada–based think tank.

I'm lead researcher on a project that we call the aboriginal governance index, or the AGI, which is an annual consultation of average first nations members in the prairie provinces on their perception of the quality of governance and services in their communities. This past year's AGI reached over 3,000 average residents on more than 30 first nations in Alberta, Manitoba, and Saskatchewan.

The AGI seeks an understanding of the views and expectations of first nations people about what constitutes good, effective governance, and provides an assessment of the extent to which those expectations are being met.

The highest-scoring bands in our index are the most transparent and adopt the practice of posting financial information, including salaries, online already. The best bands adopt open-book policies where members can view any information from the band office at any time. I'm familiar with many of these communities.

We have been surveying members since 2006, and it is clear, despite the policies in place, that the disclosure of salary and financial information is still absent in many communities. This is why we support Bill C-27 in providing a legislative base for these policies, not just policies, and some enforcement mechanisms to make the policies real for members.

We argue that first nations should not have to wait for local leadership to grant transparency that citizens should already be receiving. We also believe that band members feel they shouldn't have to wait either. First nations, despite their unique cultures, have clear expectations about governance. They desire and expect highly transparent local governance.

Our prairie-based data confirms this observation. When asked whether they thought all residents should be able to learn how much money is paid to band chief and council members, 77% of all respondents said definitely, yes; only 9% of respondents said this information should definitely not be fully available to anyone who wants it. These are randomized surveys of people from all factions on first nations.

When we asked if in practice everyone in the community who wants information is allowed to learn how much money the band chief and council earns, we were encouraged to find that 35% of respondents told us that the information is definitely available to everyone. However, a troubling minority of 25% gave the opposite answer; that is, the information is definitely not available.

The public disclosure requirements imposed by Bill C-27 would advance transparency in the communities where it is not already practised, which is what we're trying to do. Average members are victimized within a system they did not create, and find themselves unable to change it. They have no well-funded lobby groups. With some exceptions, first nations citizens often lack major independent media sources that can scrutinize band affairs. First nations citizens should not have to pay for ineffective checks and balances on many first nations. We feel that Bill C-27 would fill that gap.

Having this information posted online could also help avoid conflicts in some first nations. Increasingly, communities are resorting to confrontation where disclosure is not forthcoming. A few years ago, members from the Sioux Valley Dakota Nation, a Manitoba band near Brandon, Manitoba, operating under a custom election and band constitution mandating financial disclosure, demanded full financial disclosure from their chief and council when it was not coming, and they had to actually physically confront the chief and council to get that information. Luckily, in that situation it worked out. Other communities must resort to Federal Court, which is very costly and divisive in the community. This information being available would potentially avoid these kinds of situations.

As well, band-owned entities must come within these disclosure requirements. According to a 2011 study by TD Economics, economic development corporations are one of the fastest-growing components of the emerging aboriginal economy. If proprietary information is protected, as the minister has reassured us here, band-owned entities should be included in this.

Increasingly in our surveys we are hearing more and more complaints from average band members about lack of information about band-run entities, especially those run off reserves, such as gas bars and casino revenues. People want to know where the money's going and how much people are making. It's important to get the complete picture of how band entities are helping or hindering indigenous progress, and that includes financial information.

In terms of some specifics on the bill itself, members must have access to real enforcement, which in this case involves a superior court. Perhaps this committee could explore using first nations-led independent dispute resolution mechanisms or community ombudspersons for this role, instead of more costly and divisive litigation. That's just something to think about.

Lastly, under the administrative measures—this is more of a question—I'd recommend the language be altered, if I'm correct on this, to require the minister to develop an appropriate action plan before proceeding to any kind of denial of funds to a community. As is, the language, as I'm reading it, reads that the minister could proceed directly to withholding the funds as one of his or her options at the get-go.

I think this would place the government in a potential confrontation with the first nation government much too easily. We don't want to get into a situation like in Attawapiskat, where the courts ruled that Ottawa prematurely adopted punitive measures before exhausting more cooperative measures. We'd encourage that, a more cooperative relationship, perhaps even working towards incentivizing disclosure as another remedy.

On that note, thank you for your attention. I look forward to your questions.

[The Chair, Conservative, Chris Warkentin]

Thank you, Mr. Quesnel.

We will now hear from Mr. Graham.

[John Graham, Senior Executive, Patterson Creek Consulting]

Thank you very much, Mr. Chair.

I think everybody has a small PowerPoint that I've prepared, so I'll just go down these six points.

The first point is that accountability appears to be a universal norm of good governance. I have never seen, in any measure of good governance, anyone dispute the notion that accountability should be right up there. Certainly in the aboriginal world, the Royal Commission on Aboriginal Peoples, the National Centre for First Nations Governance, the Harvard Project on American Indian Economic Development in the United States—all of these organizations mention and highlight accountability as a measure of good governance.

Increased transparency, a key ingredient to accountability, is a trend affecting all institutions, and by that I mean in the private sector, in the NGO sector, in the charitable sector, of course, as well as in the public sector.

The second point is that despite heightened attention to accountability, complexities abound in any government in trying to realize sound accountability. One of the problems, and there are several in trying to actually implement good accountability, is essentially trying to have a good accountability story based on results. Accountability used to be focused on propriety—propriety in expenditures of money—but now accountability has clearly moved into the results arena, and that is a much more difficult, much more challenging accountability story to present.

The third point is that this, trying to have a good accountability story, is especially true for first nations, given the highly dysfunctional first nations governance system. This system is a significant barrier to realizing improved levels of well-being in these communities. I won't go into these dysfunctions, but I'm happy to answer any questions about them.

Point four is that achieving governance reform has proved to be an uphill struggle across the world, with one notable exception, at least, which may have relevance for first nations. Again, I won't go into this, but this evidence is really based on the World Bank, which monitored some 200 countries across the world over a 10-year period. Over that time, despite billions of dollars being spent on trying to improve good governance, it concluded that the overall quality of governance in these countries, on average, had not improved. That's over a decade.

Because of this record, and because Bill C-27 is a very modest initiative, expectations about what it might achieve in the way of better governance should be equally modest. Trying to effect good governance is a very difficult undertaking, especially if you're looking for sustainability, and that is clearly the key.

Finally, one important issue, and perhaps the elephant in the room, is own-source revenue. Getting better information on own-source revenue is reason enough to support the bill. The reason I say this is that I think public policy is always better if there is essentially good information. Issues around funding and funding modalities, which are a centre point in most of the relationships with aboriginal peoples and their government, the federal government, often revolve around money, and therefore having some better sense of own-source revenue has to be a good thing, I think.

I'll conclude on that note and pass it to our colleague, Phyllis.

[The Chair, Conservative, Chris Warkentin]

Thank you, Mr. Graham.

We'll turn to Ms. Sutherland.

We do apologize. Your mike wasn't working, so we had to ask you to change seats. That's the reason, if colleagues were curious about that.

We'll turn it over to you now for five minutes.

[Phyllis Sutherland, President, Peguis Accountability Coalition]

Thank you for having me here today.

I am here to talk about financial accountability and transparency. I would like to start by looking at the issue of access to financial information and our experiences. First, we support the legislation, Bill C-27, based on the fact that every first nations band member has a right to access financial information and it should be given in a reasonable timeframe. Information should be provided free of charge, and penalties should be put in place if first nations do not comply.

I will tell you our experience and the reality of trying to access information. ATIP forms from me and from other band members have been ignored; requests for information have also been ignored by trustees of our treaty land entitlement; and members are subjected to intimidation tactics such as fearmongering, public attacks, and attempts to destroy a person's credibility.

We make a number of recommendations. The legislation must have statements that include the protection of individual freedom to access financial information without persecution from the chief and council. An annual audit should be distributed no later than 120 days after the end of the fiscal year. The federal government should be present during the presentation of annual audits. A framework for financial information should be created that is accessible on the website and is easily understood by band members.

We have looked at chief and council remuneration and income from other sources. We support legislation that will put into law the requirement that chief and council be held responsible to fully disclose sources of income, not only from the band, but from other sources. We call for a full disclosure by all federally funded organizations in regard to honorariums, travel, bonuses, and per diems paid to chief and council. Chief and council should be held responsible to disclose all expenditures made on their behalf. Failure to do so should be classified as red-collar crime.

On the issue of band council resolutions, BCRs, in 2009 the chief and council signed a BCR that stated that other sources of income were to go to band support, but the evidence says otherwise. This form of corruption has to stop.

We have looked at the subject of remuneration of boards. Boards are all appointed by the chief. The injustice is that the chief controls all of these boards on the reserve.

Accountability must include proper expenditures of federal funds that are allocated for band programs. The minister must ensure that education and housing moneys are spent for intended purposes. The chief and council, according to the last audit, took over $2 million of education funding to offset the band's deficit. Once the audit comes in for this year, it's going to show I think that the band took over $4 million.

Our first nations people do not have a redress mechanism in place to call for accounting of expenditures of education and housing moneys. First nations people do not have a redress mechanism in place to question and change this practice. We call for a national, federal hearing on the treatment of first nations people by their government, chief and council.

We call for national, federal public hearings to provide an opportunity for first nations to voice concerns.

We have looked at the use of band funds for partisan politics. The chief on our reserve used band funds to pay a personal legal bill in the amount of $22,772.76. Court costs were paid on behalf of members who stole furniture during the 2007 election. In 2008, a position was made up for a Peguis School Board trustee that added $26,000 on top of her salary as trustee. There is no evidence of any work done. Federal funds were used for personal media coverage to promote the chief. Legislation should be enacted to make it illegal to use band funds for these types of political favours. This type of spending is clear malfeasance and should be treated as such.

There needs to be accountability in the election process for chief and council. Electoral officers should be appointed by a third party who has no vested interest.

I will now summarize financial matters and transparency issues.

Presently, in many situations, there is no voice for the grassroots people. There needs to be an advocacy group that they can enlist for help in calling for financial accountability and transparency.

The chief uses band funds to persecute/prosecute his own people. First nations people do not have the funds or the ability to defend themselves because in most cases they have lost their jobs for speaking out.

Those who agree with the chief's leadership are well taken care of. In some cases, they have salaries or honorariums from three or four different sources. One example is former Councillor Lloyd Sinclair, who collected a yearly salary of $64,000 as the arena manager, even though we've had no arena since March 2007, when it burned down. He also sits on various boards and as a trustee on our TLE and our surrender claim.

Lawyers and consultants are charging the band exorbitant fees. This type of corruption must stop, and those in power must be held responsible for the blatant misuse of federal funds. It has been the practice of Aboriginal Affairs to allow first nations to pay back funds that were deemed to have been misspent. In the end it is the people who are powerless, who end up feeling the brunt of the mismanagement of funds.

Leadership has to be held accountable.

Thank you.

[The Chair, Conservative, Chris Warkentin]

Thank you, Ms. Sutherland.

I was remiss in not thanking each and every one of you for coming. We understand, Ms. Sutherland, that you had a two-hour drive before you caught the plane this morning in Winnipeg and that it's been quite a feat to get here.

We do want to thank each one of you for taking time to be here today.

We're going to begin the rounds of questioning with my colleague, Mr. Genest-Jourdain, from the NDP for the first seven minutes.

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

Good afternoon, Mr. Craig.

My first question may come across as somewhat off-putting, but I still have to raise the issue with you, Mr. Craig.

The name of your organization is the Canadian Taxpayers Association, after all. I would like to know whether you took steps to prevent small reactionary groups from taking up your statements today or using the eventual documents put out by your organization.

I'll give you a specific case. The last time the words “taxpayer” and “Indian” were uttered in the same breath, it was a white supremacist speaking. I would like to know whether, being fully aware of the fact that targeted groups sometimes repeat certain statements, you made an effort to ensure your words and interests today would not be twisted.

I would like to ask you something else, Mr. Craig.

I have your financial statements here. I know you are a private organization. When I looked at your financial statements, I did not see any names as far as compensation paid to employees goes. There is no identifying information, and even less on exact amounts.

I am not sure if you're aware, but under this bill, private entities within the communities will have to provide much more detailed information, including identifiable information. Obviously, your organization isn't willing to do that, since that information does not appear in your statements.

Are you aware of this situation?

[Colin Craig]

Thank you for the question. You've given me a number of points to respond to.

I think there are two parts to why this legislation is very important. First of all, grassroots band members across the country have been asking for this. They want to be able to access this information anonymously.

The second part, of course, is that taxpayers would like to see this information too. The stories we've helped uncover over the past few years are not new. They are responses you would see in comments on online stories across the political spectrum, whether it's the CBC, the Globe and Mail, the National Post, Sun News, whatever. The comments on those sites are based on frustration, because for decades taxpayers have heard stories about corruption on reserves and far too often Ottawa has turned a blind eye to it. So many people were pleased to see that legislation was coming forward to finally deal with the situation.

It's not only important that band members be able to have access to this information, but also that taxpayers have access to it, so that when they hear a chief or councillor on TV asking for more money from Ottawa for this, that, or the other reason, they can do a little research on their own and take a look to see what's happening in that community. How are the funds being spent? Is this one of the communities where the chief and council are making more than the Prime Minister of Canada? If it is, I think a lot of taxpayers would say it's a load of baloney to start throwing more money at that community until it cleans up its own act. If it's not, if it's an open and transparent community where the chief and council are busting their butts to deliver really good services for their people, then I think taxpayers living off reserve would have more interest in potentially supporting some kind of additional funding for those communities.

To address your third point about our organization, there is information on our website about remuneration, in terms of how much people make by different pay category. What I would note very loudly and clearly is that we do not receive a cent of government funding. We never have; we never will. In fact, when I indicated that I would accept the invitation to come here to speak, we were offered compensation to pay for my flight, hotel bill, food, etc., and we turned that down. We're one of the few organizations in this country that regularly refuses those offers from the Parliament of Canada.

It is a little different when you're talking about public funds and how public funds are being used. We expect full accountability that way. It's a totally different kettle of fish.

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

How much time do I have left?

[The Chair, Conservative, Chris Warkentin]

You have about two and a half minutes.

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

Mr. Bevington, I will now turn it over to you.

[Dennis Bevington, NDP, Western Arctic, NT]

I'd like to refer to the statement by the minister a couple of meetings ago. I asked him if he believed in a government-to-government relationship between Canada and first nations. He said yes.

I'd like to ask you individually, do you believe that the relationship between the Government of Canada and first nations is government to government? A yes or no would be fine.

[Colin Craig]

We would support what the treaties note, and that is that people on reserves are to abide by the same laws that everyone else does in Canada.

[Dennis Bevington, NDP, Western Arctic, NT]

Do you believe in a government-to-government relationship between Canada and first nations?

[Colin Craig]

It depends on how you're defining “government”, but we do support that reserves are—

[Dennis Bevington, NDP, Western Arctic, NT]

Mr. Craig, I don't have a lot of time here for these questions.

[Colin Craig]

I'm just finishing my response. You asked me a question.

[Dennis Bevington, NDP, Western Arctic, NT]

I asked for a yes or no answer, and I would appreciate that because time is very limited. I only have about one minute.

[Colin Craig]

I was just taking my lead from watching question period and seeing how some politicians react.

[The Chair, Conservative, Chris Warkentin]

Mr. Bevington, if we can get an answer, there will possibly be time for a follow-up question.

[Dennis Bevington, NDP, Western Arctic, NT]

I want to ask all four.

[John Graham]

Of course it's a government-to-government relationship. What else is it? I'd just say that the relationship between the various governments can be quite different. It doesn't have to be a relationship that is uniform across all the governments.