Mr. Speaker, I thank you for this opportunity to explain how Bill C-27 would improve sound fiscal management when first nations empower community members to hold their leaders to account.
To begin, I would like to respond to the hon. member's first motion to delete clause 1 of Bill C-27, the first nations financial transparency act. The clause reads: “This Act may be cited as the First Nations Financial Transparency Act.” Essentially, the member's motion goes to the very heart of Bill C-27, so I would like to speak about the purpose of this legislation and why it is necessary.
In accordance with the provisions in their funding agreements, first nation governments are already required to provide to Aboriginal Affairs and Northern Development Canada audited consolidated financial statements and a schedule of remuneration and expenses of all elected officials. These agreements also require that the audited consolidated financial statements be made available to first nations membership in the communities. These agreements do not, however, stipulate the manner or timing of disclosure.
Many first nation governments have put into place sound accounting practices that ensure transparency and help to build confidence among members and other stakeholders. Many prepare annual reports that are distributed to members' homes or made available in board offices or posted on the first nation's website. Many first nations governments strive to be accountable to their communities, their membership and to the federal government for the funds they receive.
Why then is the bill necessary? Some first nations governments have not yet consistently adopted these practices. As a result, questions occasionally emerge about the financial decision of first nations leaders and how first nation moneys are being spent, questions that can undermine the confidence of the public in all first nation governments, including those who are working hard to be transparent in their leadership.
Ensuring the public disclosure of financial information would help clarify the actual situation. By explicitly stating the expectations of first nations in law with respect to accountability for the financial management of their governments and transparency in the remuneration and expenses of their leaders, a minimum standard would be established and many of the aforementioned inconsistencies would disappear. Greater transparency of financial information and remuneration and expenses would remove the speculation that currently exists and dispel the rumours around the management of funds by first nation government and the salaries of first nation leaders.
The bill would ensure that first nation community members have the information necessary to make informed decisions about their leadership and are better prepared to hold their governments to account.
The bill and the easier access to financial information it promotes would also support better policy development as it relates to first nation peoples. As John Graham of Patterson Creek Consulting, one of the witnesses who appeared before committee, pointed out, “public policy is always better if there is essentially good information”. While this information is currently provided to the department, it cannot be shared in any meaningful way to promote this kind of public discussion.
The public disclosure of financial information of first nation governments would also increase the confidence of potential investors. With more complete and accurate information about potential partners, investors would be in a better position to make informed decisions about investment opportunities, possibly contributing to improved economic well-being of first nation communities.
Most of the issues surrounding the bill were aired or debated in the context of private member's Bill C-575 in the previous Parliament. It also echoes the commitments made by the Assembly of First Nations chiefs-in-assembly in their December 2010 resolution. In it, the chiefs say they:
Choose to lead by example and demonstrate to other orders of government processes for accountability, including...Itemizing and publicly disclosing salaries, honoraria and expenses associated with the operations of Chief & Council' [and] Ensuring information about community finances and decision-making is easily accessible, and available via the internet where applicable.
The government is not only confident that the bill will be supported by most first nations members seeking to improve the transparency and accountability of their band governments, but also that first nations' elected officials will welcome the bill as an important tool to demonstrate how they are accountable to their members.
To summarize, Bill C-27 is a necessary piece of legislation and I support it fully. I therefore do not support the motion currently being considered.
This necessary and advantageous legislation fulfills the commitment of the government in the 2011 Speech from the Throne. Not only is this a promise fulfilled, it is also an important step forward strengthening governance at the community level, another in a series of building blocks brought forward by our government to support economic and social development in first nations.
This is indeed a worthy cause and is clearly necessary legislation, deserving of all-party support. I urge my hon. colleagues to back Bill C-27 to ensure that first nations members enjoy the same opportunities as all other Canadians.
To appreciate the importance of this legislation, we first need to acknowledge that the current system fails to meet the transparency test. It is no secret that there have been reports of questionable financial practices in some first nations and that community members cannot get answers to their questions about these practices.
There is also no question that in some instances there appears to be a genuine need for greater scrutiny of how public funds are being spent. We have heard complaints by first nations members who were unable to access information about spending in their communities. They want to know how their chiefs and councillors are spending band funds and the salaries of their elected officials publicly disclosed. The problem is not necessarily what first nations leaders are being paid, but the fact that their community members have no way of knowing what the compensation really is. Neither do community members currently know how such decisions are arrived at.
With any other level of government, a number of factors determine the level of pay and benefits for officials. These include such things as the nature of their responsibilities and duties, the size of the community, the complexity of operating the community and the level of its revenues.
In some situations, first nation budgets are almost entirely reliant on federal tax dollars. As part of the funding allocated to first nations every year, a portion is an unconditional grant known as band support funding. This money is intended to help cover costs such as salaries for elected and non-elected officials, telephones and fax machines and other office equipment.
In addition to federal transfers, a number of first nations generate some of their own revenues through band-owned businesses or funding arrangements with other orders of government. This extra money can be used in a variety of ways, including paying higher salaries for elected officials.
There is no reliable way for first nation members to verify they are getting value for money. That is why Bill C-27 is essential. It will enable first nation citizens to confirm whether the compensation levels of their leaders are reasonable and proportionate to the required duties and responsibilities.
All other Canadians are able to hold their leaders accountable in this way. The same standard should be guaranteed in law to first nations members. If the first nations financial transparency act is passed, it will guarantee these standards.
In conclusion, the first nations financial transparency act will enhance financial accountability and transparency. It will require the proactive disclosure of audited and consolidated financial statements, enabling first nations members to see first hand how funds received by first nations have been spent.
This necessary and advantageous legislation fulfills the commitment by this government in the 2011 Speech from the Throne. Not only is this a promise fulfilled, but it is also an important step forward in strengthening governance at the community level, another in a series of building blocks brought forward by our government to support economic and social development in first nations.
This is a worthy cause, and clearly this is necessary legislation, deserving all-party support. I urge my hon. colleagues to back Bill C-27 to ensure that first nations members enjoy the same opportunities as all other Canadians.