Thank you very much, Mr. Chair.
Over the last few weeks, the committee members have heard from a number of witnesses who have shared a variety of perspectives on Bill C-27. These presentations have been reviewed, and this afternoon, I would like to address some of the issues and comments that emerged.
To begin with, this afternoon I would like to remind the committee of the overall objective of Bill C-27, which is to enhance the financial accountability and transparency of first nations.
As the committee has heard from witnesses, first nations governments are certainly seen as governments by their own members. They are to be treated as governments for the purposes of financial reporting, as you have also heard from the Aboriginal Financial Officers Association.
As we all know, governments in Canada, whether federal, provincial, or municipal, must adhere to legislation that ensures that financial statements of the government and its entities, including those regarding the remuneration paid to its elected leaders, are shared with the public—governments, that is, with the exception of first nations governments, which operate under the Indian Act.
Bill C-27 will simply address this gap. In doing so, this bill also addresses a situation in which the lines of accountability between first nations councils and their own members are also blurred.
As the minister stated in his opening remarks to this committee, if a first nations member cannot access the financial information relating to his or her band, that individual can ask the department to release the information, and each year, Aboriginal Affairs and Northern Development Canada receives requests such as this from first nations individuals looking for basic financial information relating to their community.
They should be able to have access directly from their band. Although, as the minister indicated, the department does not formally record statistics on the number of requests we receive, some of our regional offices have as many as 25 to 30 such requests each year. Legislation that ensures this information is easily accessible to everyone will remove the minister and the department from the equation in all of these cases, thereby promoting more direct lines of accountability between first nations leaders and their members. In short, Mr. Chair, this bill aims to shift the accountability bargain between first nations governments and their communities.
In addition to requests for documents, the department receives formal complaints regarding the potential mismanagement or misappropriation of band funds and remuneration of officials. Since January 2011, there have been approximately 250 such complaints. There are also more serious allegations of criminal wrongdoing with respect to financial management.
This is not to suggest in any way that first nations are mismanaging their finances, or are not accountable to their members. In fact, there are many examples of first nations—some of whom you have heard from as witnesses over the last few weeks—who are not only meeting the basic expectations, but also exceeding them.
Unfortunately, however, many remain who are not, as these requests and complaints demonstrate. With greater transparency provided by this bill, many of these requests and complaints would likely not be necessary, as information would be readily available to the public.
The transparency around publication of remuneration and expenses will remove the speculation that currently exists and dispel the rumours around the salaries of first nations leaders. This bill would also mean that first nations individuals would no longer feel intimidated, in a manner graphically described to you by the representatives of Peguis Accountability Coalition and others, in challenging their governments on how their money is being spent or simply asking for copies of a band's financial statements.
The transparency as a result of this bill will advance the discussion around accountability between a first nations chief and council and its members. This bill would also mean that all Canadians would see the reality of how first nations governments are funded. As Jody Wilson-Raybould stated in her appearance before this committee, and I quote: ...having consolidated financial statements and disclosing revenue or investments does, for the most part, actually recognize and expose the reality of what our first nations are having to bear in terms of supporting our own governments beyond the federal transfers....
This would promote the kind of public discussion about the ways in which first nations governments can be supported in the future.
As another of your witnesses, John Graham of Patterson Creek Consulting, pointed out, “...public policy is always better if there is essentially good information.” While this information is currently provided to my department, it cannot be shared in a meaningful way to promote this kind of open discussion.
One important element needing to be underscored is that this bill would address the existing gap in transparency without increasing the number of reports a first nation must produce. This committee has heard about the reporting burden that first nations continue to face. The minister, during his appearance before the committee, described the efforts the department has taken in recent months, and will continue to take in the months ahead, to reduce this burden. It is therefore critical that the approach taken to ensure financial transparency of first nations government does not add to this problem.
Mr. Chair, this bill does not add to the problem. Instead, this bill simply ensures that some of the critical documents already submitted to the department as part of the first nations funding agreement are made available to the public. Some of your witnesses—for example, Mr. Harold Calla—from the first have suggested that other documents, such as annual reports, would be more appropriate to be publicly available. Certainly there is nothing in this bill that precludes doing this.
While first nations are not currently required to prepare annual reports to the department, many first nations do prepare them and share them with their community members. Nevertheless, applying this approach to all first nations would represent, for many, an increase to the number of documents they are required to produce.
However, Mr. Chair, I must advise that the department is examining ways to move forward on an approach that can be characterized as “one application, one agreement, one report, and one audit”. This approach would involve transforming the department's transfer payment system to ensure that it focuses on the recipient, reduces administrative burden, and integrates sound management practices. Specific elements of this work include continuing the advancement of our approaches to risk management; exploring opportunities to develop common, simplified transfer payment administration systems; standardizing contribution agreements among federal departments; and having a common reporting framework and single-recipient audits. Bill C-27 would complement this work.
Mr. Chair, Bill C-27 may be seen by many progressive first nations as an opportunity to put in place or expand upon their own practices, which aim to enhance overall accountability of their government. In this way the bill serves as a catalyst for change in many communities, which will lead to greater confidence in first nations governments. Greater confidence and transparency result in increased opportunities for flexible, multi-year agreements, which come with opportunities for streamlined reporting.
Finally, Mr. Chair, much has been said about the treatment of band-owned businesses in this bill. To be very clear, the intention of the bill has always been to put into legislation the same practices with respect to the treatment of band entities as are currently in place in the funding agreements. It is important for the users of financial statements, especially first nations members as owners of those businesses but others as well, to see summary statements that capture the activities of their government.
While we would encourage first nations to provide as much detail as possible to their membership about the specifics of band-owned entities, the overall objectives of the bill do not require it. The financial information of those entities that are considered to be part of the first nation's overall economic activities will be aggregated. We believe this will be enough, albeit a minimum.
Both the determination of which entities are to be included and the manner in which their financial information is presented will be established not by the department but by the standards set by the Canadian Institute of Chartered Accountants, as well as by those of the Public Sector Accounting Board. This ensures that the same standards that apply to businesses owned by other governments in Canada will apply to first nations governments in precisely the same way.
The challenge, however, has been to find language that balances both the need for precision in legislative drafting with accounting concepts that are both complex and dynamic.
We understand that the committee has received suggestions from witnesses with respect to how these provisions could be made clearer, and we look forward to seeing the results of your consideration of this matter.
I would now be pleased to answer your questions. Thank you, Mr. Chair.
