Indigenous and Northern Affairs Committee on Oct. 29th, 2012

[Terry Goodtrack]

That's a difficult question to ask AFOA Canada. Our mission is training and capacity development of individuals, and that's what we do.

That's probably a good question to ask Mr. Calla of the First Nations Financial Management Board.

[The Chair, Conservative, Chris Warkentin]

Thank you very much.

Mr. Bevington, your time is now finished.

Mr. Seeback, we'll turn to you for seven minutes.

[Kyle Seeback, Conservative, Brampton West, ON]

Thank you, Mr. Chair, and thank you, witnesses.

I was pleased to hear you say at the outset that you certainly agree with the goals of this legislation. We heard earlier today—I don't know if you were here—the parliamentary secretary say we're interested in looking at ways to improve the legislation. Of course, some of your comments today are helpful, and I thank you for those.

I have a few questions. First, when you talk about the standards that are set out for disclosure in the legislation, how do you think those compare with the standards of disclosure for other governments here in Canada? Are they the same? Are they different?

[Terry Goodtrack]

What I tried to convey here is that it has to be something comparable. The question becomes what the like entity is. I recognize we're comparing this to other levels of government, but at the same time, we're not recognizing first nations as a government. What would be a like entity to pursue? That's really what I'm trying to convey.

I outlined in my testimony that there are many different models across Canada. Why is this one, which is very detailed, the model chosen? I don't know why.

[Kyle Seeback, Conservative, Brampton West, ON]

I think there are a couple of things you want to talk about. When you say there are two issues of disclosure, I think you mentioned there's disclosure to the Government of Canada, and then you talk about disclosure to members. I'm not suggesting you glossed over disclosure to members, but I can tell you that this certainly is one of the issues. I understand not everybody can read an audited financial statement.

I've said this joke many times, and I'll keep telling it. I'm a lawyer. I don't like numbers. That's why I went into law, not accounting—a fear of numbers. I'd certainly have difficulty understanding certain complex audited financial statements.

One of the things we did hear—we've heard it at committee and we certainly heard it from the minister when he testified—is that individual band members are having great difficulty accessing this information. I know you're saying your members are happy to provide it, but I don't think you necessarily represent all 600 first nations across the country.

We heard from witnesses who said there are veiled threats of intimidation, as in if you ask for this, you're asked if you're looking for housing. We've heard those types of things. Certainly you must agree that this legislation, by requiring this disclosure and that it absolutely be made available for first nations members, including salaries on a separate schedule, is going to fill that information gap.

[Dana Soonias, Chair, Aboriginal Financial Officers Association of Canada]

Mr. Chair, I'd like to thank you for allowing us to present today. On that topic, I think I can give you an example. I come from a community with significant challenges. I'm not going to name the community, but as a member of that community I have issues at times with how that is presented and the reasons the information isn't available.

I think you're going to find different pieces of this legislation impacting these different communities in different ways across the country. Our concern is that it is done—and it is done in a like manner with similar organizations—so that the reporting processes are not increased, but at the same time they are held accountable, as laid out in this legislation.

I think Terry and our members across the country all believe that the core goals of this are justifiable, and we believe that along the way we can find a common ground on this. Those communities are a small percentage, but they are valid: they have those challenges. I myself have had challenges, but that administration changes every couple of years as well, so depending on the administration, that management experience and expertise increases or decreases.

We're looking at building that capacity of those members across the country and holding them accountable.

[Kyle Seeback, Conservative, Brampton West, ON]

I certainly agree that building capacity is important. Once you improve on the financial capacity or the reporting capacity of a first nation, that's going to improve transparency. They'll be able to get reports done. But when I go back to this legislation, I want to keep talking about that.

You're saying you've experienced difficulty. If that information is put out there, that will probably also speed change. I would assume that if somebody is not providing information to members of their community, the reason they're not providing it seems logical to me. Once it's out there, the first nation community is going to say they don't think they want these people anymore, so more disclosure is going to help that transition, would it not?

[Terry Goodtrack]

When you take a look at this issue, and if what you say is.... Again, I know you're speaking of disclosure, but I view it through the lens of accountability, the accountability of the first nation to its members.

When you take a look at it through that lens, in the event that a first nation does not disclose its audit to a particular member, right now that consolidated audit for the federal government is at AANDC. The Montana decision had an effect on it in terms of third-party financial confidential information, but then when Sawridge came around—I'm not a lawyer, but this is my understanding as it's been explained to me by Gowlings: the federal government can disclose it to a particular band member who is their citizen.

[Kyle Seeback, Conservative, Brampton West, ON]

Doesn't transparency aid accountability? Isn't that the way the two things go? I understand what you're saying about accountability, but transparency seems to be a cornerstone of accountability. That's where I see the legislation being helpful on that lens. Do you not agree with me on that simple aspect of it?

[Terry Goodtrack]

Well, accountability is very complex. You can't really view accountability unless you view some very key items: the definition of responsibility, the definition of an authority, the definition of legitimacy—and then accountability.

When you think of it, if a first nation government has a whole pie of responsibility, but the authority that's delegated to the government, by the government—because it's a delegated model—is a slice of that pie, what are they actually accountable for? It's that mismatch that really throws things out. What I believe first nations governments are trying to do is respect these key principles that we all cherish, but implement them in their own ways.

When you look at accountability between a first nation and its citizens, you have to look at different items. One is certainly the notion of what I call public service: that of transparency, of disclosure, of redress. But then you have to look at another point, which is performance. How are you actually performing? What are those indicators? The financial one is part of that, the financial reporting, but also just as important is the notion of professionalism, that of ethics. So when you take a look at a broader framework, you have to look at the key elements, the key indicators, the key definitions of responsibility, authority, and legitimacy, and then look at accountability and at designing that accountability framework around it.

[The Chair, Conservative, Chris Warkentin]

Thank you very much.

We'll turn now to Ms. Bennett for seven minutes.

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

Thank you very much.

Thank you, too, to our witnesses.

Like many members of the committee, I think we are quite astounded that this is the first time you're getting to comment on this bill. You are the people who have exactly the expertise that would be required to get the bill right or to answer the question of whether this bill is necessary at all, which is I think where you were coming from, and again, who the accountability is to.

When the minister was before us, he did admit that he hadn't consulted between the private member's bill of Ms. Block and this other bill that seems to be much broader, with many unintended consequences around own-source revenue. Again, on the accountability, I think even Darcy Bear, in his testimony here, said that the accountability should be to the members of the band, particularly on own-source revenue, not to Canadians writ large.

I guess I'm just astounded that people like you and your organization weren't consulted before this was tabled. I hope you will be consulted on what it seems will be proposed government amendments, but have you looked at the proposed amendments that the Whitecap Dakota chief and council have put forward? Would those amendments deal with some of the concerns that you've highlighted today?

[Terry Goodtrack]

Yes, I've reviewed Chief Bear's amendments. This is where we're trying to say at AFOA Canada that those are very important issues and amendments that Chief Bear has outlined—definitely.

One thing you have to do with this legislation is step back and look at it through different lenses, one of those lenses being accountability, as you mentioned—accountability to whom and for what. The notion of consolidated audits gets very clear when you look at it through that end.

On the notion of comparability, as we've mentioned, comparability to like entities is what we're asking: not to do anything more, not to do anything else, but to like entities. If that comparability is to governments, then why aren't we putting in the bill the word “government”?

You can take a look at the Public Sector Accounting Handbook, as mentioned earlier by the Auditor General's office. He said that there are definitional issues, which is right. First nations aren't part of the common government reporting handbook, but the year-end reporting handbook states that for the purposes of accounting, first nations are government. It doesn't even say that in the CICA handbook, but it says it through this secondary document.

Keep in mind that at AFOA Canada we did recommend that. We recommended that, but it's still not a definition, because in this legislation first nations aren't considered governments.

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

As a government, in this legislation—just like the current government here federally has some laws saying that it’s supposed to be transparent—if it isn’t transparent, then the citizens have the opportunity to replace it with a government that is.

Is that not what governments do?

[Dana Soonias]

Yes, that's right. That's correct.

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

A top-down approach to “thou shalt” in a democratic government. Is that what you, in your experience, would see?

If a government refused to disclose to its citizens, then at the next election, the citizens have the chance to replace that government. Right at the moment, they also have the chance to go to the minister and ask for the audited statement. Is that correct?

[Terry Goodtrack]

Yes, that's correct. That's the essence of political accountability, right? People vote for who they put in government.

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

Has it come to the attention of your association the tsunami of complaints that chiefs and council are refusing to give their community members the information requested? In his opening testimony, the minister gave the number of around 200 or so. Does that sound about right?

[Terry Goodtrack]

When I look at the notion of 200—you sit there and you look at numbers. Numbers are one of these really interesting things, because you can see them from very different perspectives.

The way I see it, you sit there and say there are 250 complaints. All right. There are 704,000 first nations people in Canada, so that's less than one per cent. On reserve it's 403,000, and that's still less than one per cent.

You can show a hard number, but what percentage are we're dealing with? Is it doubled up—the numbers? We don't know. Is it all from one community? We don't know. I couldn't tell that from the testimony. It may be. I don't know.

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

He didn't seem to have the answers.

[The Chair, Conservative, Chris Warkentin]

Thank you, Ms. Bennett.

We'll turn now to Mr. Clarke, for seven minutes.

[Rob Clarke, Conservative, Desnethé—Missinippi—Churchill River, SK]

Thank you, Mr. Chair.

I'd like to thank you, Mr. Goodtrack and Mr. Soonias, for attending here.

Actually, it's kind of ironic that Soonias is your last name, as it means “money” in the Cree language, and here we are talking about first nations transparency and governance, and about money, trying to be good government and trying to make first nations accountable in terms of how the money is being handled, for one.

Mr. Goodtrack, having a first nations background myself, coming from Muskeg Lake First Nation in Saskatchewan, and, too, having a background in the RCMP, I have seen the worst of the worst and I have seen the best of the best in terms of transparency and accountability. Some try but don't succeed. Others just blatantly reject all notions of being transparent and being accountable.

I find that very frustrating, with today's technology. For instance, in my first nation community of Muskeg Lake, they do their yearly report on their band website. They take added measures to have a meeting on their first nation community with their band membership. I live off reserve, and I don't have access. But they also try to make arrangements to meet with individuals in Saskatoon, Edmonton, and Prince Albert to tell them what is going on with the financial aspect of the day-to-day business on the first nation lands and the money spent.

I understand that the Aboriginal Financial Officers Association started back in 1999. You currently have 1,500 members, with 136 aboriginal certified financial managers. But there are 633 first nations out there. It's a tough void to fill and to get the proper training, for one.

I was reading an article from the Globe and Mail, going back to February 26, 2012, where it quotes you as saying that your members were fine with Bill C-27, the First Nations Financial Transparency Act. It quotes you further:

“We're all for that,” he said. “We believe in accountability.”

I agree with that sentiment, but you look at issues, and....

I've had to investigate first nations reserves. It's not fun, for one, trying to understand the practices and the.... I'm not an auditor. I'm not a profound...to say I'm good at it, but to look at financial audits....

But I look at an incident in the interior of British Columbia back in 2004, 2009, with the Anahim First Nation. Over five years, an amount of $284,000 in wages and bonuses and contract fees was spent by the chief; $111,000 was spent on wage reimbursements for travel, some without proper documentation; $28,000 was paid to relatives of the chief; $21,000 was used in band funds for the chief and council to purchase vehicles; and $10,000 in rental fees was paid back for the rental of the vehicles that the band purchased, back to the council.

This is where I'm coming from. You mentioned, and it was already mentioned by Mr. Seeback, that you have first nations individuals coming forward asking for the information that the chief and council have refused to release. They try; they go through the access to information and privacy acts. But under section 10 of the Indian Act, they have to release their identity.

They're afraid for their well-being, for their safety, because of reprisals—such as for homes—or repercussions through other measures—such as for potential jobs—or their family could be punished, or there could be physical challenges to their safety.

I look at this and I.... It's confusing. This is a very, very sensitive issue where, yes, your testimony here today could hopefully add some insight.

In what ways, if any, might Bill C-27 modify existing first nations accountability relationships?

Hopefully, I can get some clarification on that.

[Terry Goodtrack]

That's essentially what we've said, that you have to view it through the lens of accountability—to whom and for what—and ensure you're comparing apples with apples.

When you speak to the notion of disclosure of salaries, honoraria, travel, and that kind of stuff...what I tried to convey in our testimony is that if this act is going to go forward, just ensure that it's comparable.

I certainly think that what Muskeg Lake First Nation did was excellent. That was their choice. It wasn't an act that was imposed upon them; that was their choice.

We had 1,671 members at March 31, 2012, and 472 certified aboriginal financial managers across this country. We're certainly not in every community, but what we try to do is to invite people into our association—like-minded people, volunteers—who are interested in improving financial management capacity and management abilities in their communities.

Thank you.

[The Chair, Conservative, Chris Warkentin]

Thank you very much.

Mr. Clarke, there is 30 seconds left, if you want to use it.

[Rob Clarke, Conservative, Desnethé—Missinippi—Churchill River, SK]

We're all accountable. As elected leaders we have to be accountable to the band members as well. They're struggling out there to get the information, to make the right decisions, and to keep leaders accountable. That's the hard part. It's not being met.

What would you recommend for those individuals or chiefs and councils who aren't complying and releasing that information to their elected band members? What do you recommend to those out there who are frustrated?