Proceedings of the Standing Senate Committee on
Aboriginal Peoples
Issue 31 - Evidence - February 13, 2013
OTTAWA, Wednesday, February 13, 2013
The Standing Senate Committee on Aboriginal Peoples, to which was referred Bill C-27, An Act to enhance the financial accountability and transparency of First Nations, met this day at 6:46 p.m. to give consideration to the bill.
Senator Vernon White (Chair) in the chair.
[English]
The Chair: Good evening. I would like to welcome all honourable senators and members of the public watching this meeting of the Standing Senate Committee on Aboriginal Peoples on CPAC or the Web. My name is Vern White. I am from Ontario and the chair of the committee. The mandate of this committee is examine legislation in matters relating to the Aboriginal peoples of Canada. Today, we will continue examination of Bill C-27, An Act to enhance the financial accountability and transparency of First Nations.
This evening, we will hear from two panels, the first comprising financial experts and the second individual First Nation members. Before hearing from our witnesses, I would ask committee members to introduce themselves. I will start with the deputy chair.
Senator Dyck: My name is Senator Lillian Dyck. I am from Saskatchewan.
Senator Lovelace Nicholas: Senator Lovelace Nicholas from New Brunswick.
Senator Sibbeston: I am Nick Sibbeston from the Northwest Territories.
Senator Patterson: Dennis Patterson, senator for Nunavut.
Senator Meredith: Senator Don Meredith from Ontario.
Senator Raine: Senator Nancy Greene Raine from B.C.
Senator Seth: Senator Asha Seth from Toronto, Ontario.
Senator Ataullahjan: Senator Salma Ataullahjan from Ontario.
The Chair: With us tonight from the First Nations Financial Management Board we have Harold Calla, Chairman, and Shayla Point, Senior Manager of Legal and Corporate Services. They are joined by Alan Mak, Principal of Rosen & Associates Limited.
Witnesses, we look forward to your presentations, which will be followed by questions from the senators. I take it you have already decided who will lead.
Harold Calla, Chairman, First Nations Financial Management Board: I wish to thank the committee for giving us the opportunity to appear before you today. I would like to start by reminding everyone that the Fiscal and Statistical Management Act is an optional piece of legislation that was created by First Nations. The First Nations Financial Management Board was a result of that legislation. I remind everyone that it was passed with all-party sup port, in both houses, and that the directors were named in 2007. We became active as an organization at that time.
It was the first time in legislation that, in a shared governance model, an Aboriginal organization called the Aboriginal Financial Officers Association of Canada, together with the Governor-in-Council, appointed three directors to this board. A significant part of the FMB mandate is to establish standards for financial administration laws, financial performance and financial management systems, and to certify, when requested by a First Nation, that they have met the standards.
Our purpose was to create the opportunity to access capital to support infrastructure development on reserves for economic development.
To this point, FNFMB has been working with 66 communities across the country, and there are currently 95 scheduled to the Financial Services Management Act, or FSMA. We have 18 financial administration laws in place and 17 financial performance certificates, and the First Nations Finance Authority has now started, on an interim loan basis, to lend money to First Nations through the initiative.
I would like to comment first on the "why" question that we are all asked. Why are we here talking about this particular piece of legislation? Why is it before you?
We live in an electronic world and nothing has made that fact clearer than the last few months. We live in real time. We are the now generation. Information is now available to anyone who has access to electronic devices. Stakeholders, including members of First Nation communities, want to have access and understand how their interests are being managed. If this information is not being made available, they will look for help.
Where does an individual go if the information is not being provided under the structure that exists today? As wards of the government under the Indian Act, they go to the Minister of Aboriginal Affairs and Northern Development. It is their view that the minister has a duty and responsibility to respond to the requests for information. In my view, this legislation is a response to the view of ministerial responsibility.
The legislation focuses on an audit report and salaries of council. This is an historical reflection, a rear-view mirror snapshot. While this is certainly part of an appropriate accountability framework, it is just that — one part. In last 15 years, the world of accountability has had to be transformed as the need for increased scrutiny became apparent after the accounting scandals and challenges we faced. This has resulted in not only looking at what has happened, but to begin looking at what is happening today, into the future and offering some comment.
The interest and needs of First Nation community members are better addressed through the production of an annual report that not only includes details of the audit but also a qualitative and quantitative look at the now and the future. Good financial management practices are not defined solely by political objectives.
An audit contains notes, and these are generally a clarification of historical information. It does not make qualitative observations or recommendations about the future and the direction that we may want to go.
An annual report would contain part of an audit and provide all stakeholders, in particular the membership, with a more complete picture of the affairs of the First Nation. For those who do not know, I have had the privilege of serving on a number of boards, including CMHC. The reporting we do gives stakeholders the opportunity to look at the organization in a much more comprehensive way than an audit can. I think it is in the interests of all stakeholders, but mostly members, that this kind of report becomes part of their accountability regime.
We need to look at how we can emulate reporting requirements of the private sector and reflect those, and those of other governments, so that First Nations are not being asked to be accountable or more transparent than other orders of government might be in this country.
Our standards respond to what is required from the private sector. Unfortunately, after the snowstorm last week we have a package floating somewhere in space that has all our standards in both languages for you. However, I think we are going back to the Tom Hanks movie because I suspect it is with FedEx on some island. We will send it to you, but we have comprehensive standards available on our website.
The purpose of measures that support financial reporting or being accountable and transparent is to create confidence in all stakeholders that there is financial management capacity and to give an indication of what that capacity is. It is essential that this confidence be present for successful economic and community development. It is always better when stakeholder groups, in the case of First Nation communities, are able to establish an accountability and transparency framework they wish to use for their own community. When they come forward as part of the First Nations Fiscal and Statistical Management Act and we set standards for what the laws might be, they actually develop them themselves and we certify that they meet our standards.
I appreciate that the minister responsible has to respond, but I do not think any of us should be fooled that good financial management and accountability is contained within the four posts of this particular piece of legislation. It is a much broader topic and I realize that is not the purpose of this legislation, but I hope you look beyond this legislation to what is required. You also need to look beyond this legislation to understand what kind of support First Nations will need to develop the capacity to not only create but to sustain certification and good financial management practices.
I think it is our collective objective to reduce dependence and support community and economic development, and it is in Canada's all Canadians' interest to support the capacity that is needed so that First Nations can become part of the economic mainstream. I hope that we make decisions on what reforms are needed to create better opportunities for our community in ways that are inclusive, look at the end objective and understand there have been decades of challenges faced by First Nation communities because they have not been part of the economic mainstream.
I look forward to future opportunities where we will be able to address the much broader issues that face Aboriginal communities that are not contained in audit compliance and a statement of salaries.
Shayla Point, Senior Manager of Legal and Corporate Services, First Nations Financial Management Board: I would like to thank Mr. Calla for giving the opening comments.
We provided several documents for your review in both English and French. I will draw your attention to a memo that is addressed to the Senate committee. A chart appears on the last few pages. The chart itself sets out the specific provisions of Bill C-27 in one column and the next column sets out the specific Financial Management Board standards that relate to legislation that we operate under. It is a comparative analysis of Bill C-27 with the First Nations Financial Management Board standard.
I will not take you through this. It is about 10 pages, but I invite to you look at it and review it. You will be able to see a comparative analysis between Bill C-27 and what our standards call for under the First Nations Fiscal and Statistical Management Act.
We also have a separate document that sets out certain proposals and recommendations that should be considered when you are looking at Bill C-27. They are in French and English, and I invite to you look at them in detail and ask any questions now or after the fact.
The Chair: We will ask questions after Mr. Mak has spoken.
Alan Mak, Principal, Rosen & Associates Limited: By way of background, I am a forensic accountant by trade. I speak from the perspective of someone who has investigated some the scandals that Mr. Calla referred to. I have observed firsthand the consequences of weak accounting systems and the contributions that can be reaped from robust accounting systems. In my opinion, this bill contributes positively to the goals of enhancing financial reporting and corporate governance amongst First Nations.
In preparing for today, I did some research and looked at what others have said about this bill. In my opinion, contrary to what has been claimed, I do not believe this bill creates unusual or onerous reporting obligations when compared to other reporting standards in Canada. For example, it is consistent with the financial reporting and disclosure that is required by various federal and provincial corporation acts, provincial security commissions or stock exchange listing regulations if you are a public company. It also requires information that should be available from basic and robust accounting systems. It is consistent with the principles of stewardship evaluation which allows for members, in this case memberships of the First Nations, to evaluate the management and their stewardship of the resources that have been entrusted to them.
Finally, in my opinion, I do not believe that the reporting requirements will compromise the competitive advantages of First Nations commercial enterprise because the act calls for the reporting of consolidated, GAAP-prepared financial statements. On that basis, the results for revenues, expenses, assets and liabilities will be very highly aggregated and summarized. Frankly, it will be near impossible for anyone to discern the results of specific activities from those statements. The purpose of those statements is to evaluate overall accounting performance.
Having said that, I do have some concerns that I wish to bring to the committee's attention. The first is the use of GAAP, or generally accepted accounting principles, as a standard of reporting. As you may be aware, Canadian GAAP, as it were, was replaced a little over two years ago by international financial reporting standards. When you refer to GAAP in the CICA Handbook, you are actually referring to IFRS, for purposes of publicly accountable enterprises. Having said that, the CICA Handbook, in addition to IFRS, also refers to private enterprise GAAP and public sector GAAP, which is mentioned in the bill. I am aware that some First Nations also report under First Nations GAAP. There are many standards floating out there and if the intention of this legislation is to bring some consistency or singular standard, clarification is required.
It is important to appreciate that GAAP and IFRS, or any other accounting standard that might be imposed here, are not rigid sets of rules. They are not strict prescriptions of what must be done. In fact, IFRS allows considerable judgment on the part of management. An example would be the use of fair value reporting, which is the current value of assets and liabilities as estimated by management, in contrast to historical cost reporting, which is what an entity may have paid for an asset in some past transaction. Of course, if it is current values and estimates, much subjectivity exists and there is a risk of manipulation, which we have seen in our practice.
Another area that I believe merits the committee's attention is the requirement to audit. While it is a laudable requirement or objective, it is important to appreciate that an audit or financial statement audit may not be what you expect it to be. Quite frankly, the reality is that auditors may not be doing their job. This is something we have seen in our practice time and again. You might expect auditors to go in and look at, on an independent basis, objective evidence, look at source documents, invoices, bank statements and cheques. That may not be the case. In fact, a recent example was revealed in December, which gained much attention. That is not the first time we have come across it. It is a matter we have seen over and over again.
The fact is in our office we have seen that auditors have tended to place more and more reliance on management representations, so auditors seek representation letters from management and rely on those letters perhaps instead of conducting their own independent work. We have seen that more and more. It is a trend that we believe will become more commonplace under IFRS because of the standards that allow management greater discretion and subjectivity in setting the accounting estimates.
In order to address that concern, an obvious remedy would be to tighten up the terms of reference for auditors looking at First Nations accounts. It may be a matter of reinforcing what should be there for auditing standards, but to make clear that the government or this legislation requires auditors to look at source documents and to conduct independent investigations or collect independent evidence to substantiate that audit opinion.
The last area I wish to address is that of the schedule of remuneration and expense reimbursements. As I understand it, the bill calls for an audited statement for remuneration and expenses paid to the chief and councillors of the First Nation. That definition or the scope is different from what is required by GAAP and IFRS. Both those standards recognize that related parties include the immediate family of management. What will happen, as I anticipate, is that there will be a difference between what is reported under GAAP in the disclosure notes or IFRS and what is reported in this schedule of remuneration. Again, the obvious remedy would be to have one standard and perhaps the standard then should be GAAP, which includes in that definition immediate family.
With that, I thank you for your time and welcome your questions.
The Chair: Thank you very much.
Senator Ataullahjan: What is the current state of the financial management practices in First Nations and how many implement standard accounting measures? Do you think this bill will allow First Nations to focus on developing these standards?
Mr. Calla: There is a lot of publicity given to the challenges that some of these communities face, but it is my perspective that many communities across the country do produce unqualified opinion audits. Part of the controversy that is arising is that there is a misconception, as Mr. Mak said, about what an audit provides. Many look at an audit and think it can give them transaction analysis. In some cases, it can, but only in a very large transaction. In most cases, an audit cannot respond to the needs of a community member who is looking for transaction item analysis.
The other thing is that auditing has become very complicated over the last number of years. The standards have changed. GAAP has changed. When I first started working in Squamish, the financial statement that I had to produce did not record assets and liabilities. We found ourselves struggling on how we would recognize those things. If you look at today's international financial reporting standards, we accountants have to study them. We used to be able to just read them and understand them. Now they have to be studied.
What is the information you are really looking to get? That is why we refer to the concept of an annual report as being much more useful as a quantitative analysis of what is going on. Most First Nations in this country do produce adequate financial information. The communities that do not find themselves challenged with human resources and capacities at the community level.
Senator Sibbeston: I will start by saying that I admire you all. You are very sophisticated and knowledgeable in the world of financial reporting. Would you admit to us that you operate and work in a field that is unusual? You are not like the 630 bands in the country that will be affected by this. You are probably in the top 1 per cent or so. You live in a world of accounting. That is where you work and that is where your specialty is.
I say with respect that you come from a different world than most First Nations in the country. Would you comment on that, that your views would be somewhat different than seven-eighths of all the bands in our country that are not very sophisticated? They do well just to provide a financial statement.
Mr. Calla: I appreciate the question. While that might have been the case many years ago, senator, it is not the case today. For small bands, the degree of sophistication you now must have to manage your affairs is not driven by your land base or population size. In many cases, the most significant opportunities will come before communities that do not have large populations. Their need to be able to read and operate in the economic mainstream will require that they become more sophisticated. I do not disagree with you there. There is a level of sophistication.
I am an Aboriginal person from an Aboriginal community. Yes, I did what they said: I went out, got an education and came home. More of us are doing that. The investments you are making in the education of Aboriginal people are producing professionals who are coming home to work.
Yes, it is daunting, just as it is daunting to all Canadians if they want to look at the Auditor General's report or the books of Canada. We have to be careful that we do not put a different standard on our community than we put on the average Canadian.
I agree, and that is why I spoke to the issue of capacity development in my comments. There needs to be capacity development in our communities. However, the opportunity before us, as a result of consultation and accommodation requirements and the $500 billion worth of activity going on in this country that will open the doors for mainstream economic development in our communities, can only be done successfully if First Nations become more sophisticated in their financial management, their understanding and their knowledge. Our job is to help them do that from a financial management aspect.
Senator Sibbeston: Two points have been raised by witnesses who have appeared before us. First, there does not seem to be any disagreement that there needs to be an accounting of monies provided by government. However, the money that First Nations make, other than those derived from government, is getting bigger and bigger. Therefore, there is concern that making this information available to the world could be a business disadvantage to certain First Nations. You covered the point that the requirement to provide information about all aspects of their finances is too revealing and may put them at a disadvantage. Those were the two main concerns that have been expressed to us. Would you say something about that again, please?
Mr. Calla: I would love to.
You make reference to government in your question, and you look at it as the Government of Canada. Respectfully, it is not the Government of Canada. It is a First Nations government who may be receiving transfers as an order of government, just as they develop revenue with their economic assets. Respectfully, as a government, they have the same duty to report the conduct of their management of those assets, just as much as they have to report to Canada on the receipt of transfer payments. You alluded to it, and I thank you for that, because it is a growing area and will become much more significant in the minds of membership about how the management of those significant opportunities is being undertaken. What will the reporting requirement be? How are you managing the collective Aboriginal rights and title of our community?
Senator Meredith: Mr. Calla, I will pick up where you left off. I would like to encourage legislatures to support the needs of First Nation communities as they develop the required capacity to manage their affairs. This investment will pay huge dividends in the long term if the collective objectives reduce dependency and support community and economic development in Canada.
We have heard statistics thrown around about $10 billion in economic opportunities in this country for First Nations, and you just cited $5 billion. The numbers are here or there.
One of the critical things that concerns me is the capacity of some of these First Nations to engage economically and to facilitate themselves within the economy of Canada. I say that, but the opportunity for mismanagement presents itself. How do you propose that this legislation will address that for the smaller ones that do not have that capacity?
Mr. Calla: The issue that you raised is important because we cannot separate what you should be doing based upon the level of capacity you have today. You may have a very small community. For example, the Ring of Fire communities and the oil and gas line communities on the West Coast are small communities with 300 or 400 members, and they are involved in billions of dollars of economic activity as a result of consultation and accommodation. Therefore, we need to provide that capacity, respectfully. It can come through support from the Government of Canada, from the private sector, through impact benefit agreements, but that capacity needs to be provided if we want to expedite the consideration of these issues.
One of the things I learned from the board that I sat on is that Canada does not have the luxury of being the only source of oil and resources in the world. If we do not get ourselves to a point where we are in production and have sales, it will go somewhere else.
This issue of providing capacity so that the duty to consult and accommodate will be there and that the results will actually provide long-term benefits to create sustainable economies where they have not been before is a worthy objective. It is far better to put that money there than into litigation and process. Let us do business.
What is the reality that First Nations face today? Until recently in history, since European contact, they have not been allowed to participate in the economic mainstream. They have not been able to evolve and mature as entities because they have not been involved in it to the same degree as the non-Aboriginal public. We have to make the effort to bridge that gap and we have to make it quickly. We can all have opinions about protests and pickets, but at the end of the day, if it costs us the opportunity, as a nation, to sustain our economy, the investment in creating that capacity so that we can make decisions will, in hindsight, be some of the best money that was ever spent. I suggest to you that we have to address the reality.
Looking at the completeness of the Financial Management Board's body of work, we talk about a law, about developing financial management systems, a financial performance review and compliance reviews by the Financial Management Board to ensure that, over time, these First Nations can stay on the straight path. We have created in that act the ability through the First Nations Finance Authority to access capital and capital markets by issuing our own debentures in a joint and several liability so we can actually make contributions to sustain our economies and not be dependent on government. Government has supported our initiative for 10 years, and it is now starting to pay dividends in terms of First Nations' ability to access capital and more First Nations becoming certified.
The long-term solution is how to support people to get into the mainstream economy. We have an excellent opportunity with all of these initiatives going on. We can engage the private sector in part of the solution. We can transfer skills down into the communities from those private-sector entities, and they are willing to do it.
Senator Meredith: As you talked about private investors, what has been their reaction to this legislation with respect to the quest for accountability and transparency within the First Nations band, over 633 of them across this country, and wanting to get into mainstream economic development? What has been the response from investors to this legislation?
Mr. Calla: I have not heard of any significant responses. I understand what investors are looking for. They want to have credible partners. They want to have some confidence that the regime and activity in that community will not be in upheaval because of inadequate reporting or auditing requirements. They would see it as an ability to instill confidence.
Senator Meredith: In terms of the process of being compliant, what does it take for First Nations to come on board with your management board and ask for your assistance to become transparent and accountable? What is that process like?
Mr. Calla: They must schedule themselves under the act, the Governor-in-Council.
Senator Meredith: Thus far about 98 of them that have done so.
Mr. Calla: Yes. They then engage with us with a letter of cooperation. We start developing a law, and we get five years of their financial statements. We do some analysis, and we consider a performance certificate. They then have 36 months to develop a full-blown financial system, which we certify.
The Chair: Ms. Point, I see that you are Senior Manager of Legal and Corporate Services. Have you had anyone look at this legislation from a privacy perspective?
Ms. Point: Look at the First Nations Fiscal and Statistical Management Act or look at Bill C-27?
The Chair: Bill C-27.
Ms. Point: No, we have not.
Senator Dyck: That was going to be one of my questions, so thank you for asking that, Mr. Chair.
Thank you for your presentations tonight. They were very technical.
As I understand it, we have policies and regulations in place whereby First Nations are supposed to already supply all of that type of information to their band members. It is just not necessarily posted on a website. Is it your understanding as well that the policies and regulations are there now?
Mr. Calla, one of the things you said is, "Why is this legislation before you?" That would be my question. Why do we need this legislation when First Nations already have to supply, to their band members, consolidated financial statements and are also supposed to provide, to their band members, schedules of chief and council salaries and remuneration, depending on the definitions? That information is supposed to already be available, so why do we need this legislation?
Mr. Calla: Because sometimes it is not made available.
Senator Dyck: Right.
Mr. Calla: The status Indian — the band member — then looks for some means to get access to it. Because of the relationship that Aboriginal people have with Canada, they turn to the federal government and the minister. That is why we have this legislation, in my view.
Senator Dyck: Yes, I agree.
As I also understand it, the same remedies or penalties that are in this bill are available to the minister. If you ask the minister for help and the minister undertakes a process, that process is already there; it is just not there as a piece of legislation. There is really no difference. I do not know if you are able to answer the question. I, myself, am wondering why we need this bill when everything is there already.
Mr. Calla: Respectfully, I am not sure how the department works and what it does. That is a question that, unfortunately, the minister would have to answer.
Senator Dyck: Following up on the idea of own-source revenues and band-owned entities, someone said that that type of information should be provided and is significant information that should be available to the band members. I agree with that entirely. Should that type of information necessarily be made available to the general public? For instance, with respect to salaries, should the salary that a chief and council member might get from a band-owned business also be made available to the public? I guess that comes back to privacy questions.
Mr. Calla: It is a band-owned business of a government; let us accept that point first. This is a government that is engaged in economic activity that is producing an income. They are paying people's salaries. Even in the private sector, in publicly traded companies, all of this information must be made available. I do not see that as being an infringement at all. I think it is being accountable; it is being transparent.
I do not believe that on a consolidated basis there is going to be a significant risk of being compromised commercially. Every other commercial enterprise of significance has to do it. As far as I know, RIM, Apple and Microsoft produce statements. Yes, there are challenges, and neither you nor I can foresee what they will be in the future. However, I think the reality is that, as governments, you have a responsibility to your citizens to provide information, and band-owned businesses are operated by governments.
Senator Dyck: When you say "government," do you mean —
Mr. Calla: First Nation governments.
Senator Dyck: When you say the information should be released to its citizens, do you mean to its band members or to the general public?
Mr. Calla: Respectfully, we call it the moccasin telegraph at times. When you produce a financial statement to a member, it is public. Making it available, having it there, puts it in the public domain, and that is a consequence of being a government.
Senator Dyck: That may be true. I am not sure whether it is exactly the same, but I will not argue the point.
I will move on to a slightly different but related topic. The bill is touted as a vehicle, in some ways, to promote investor confidence. I am wondering, with respect to the idea of having consolidated financial statements on the web, whether it would not be even more advisable to have those things available on a confidential basis — confidential disclosure versus web exposure. In your mind, it sounds like there is no real difference.
Mr. Calla: I do not think it is appropriate that they not be posted. It is activities of government. The Government of Canada does it. First Nations are governments. We do have a constitutionally protected right to self-government. They should be responsible.
Senator Dyck: As the critic, I am allowed one final question here.
Both of you brought up the idea of scandals and accounting problems, and we know they are out there. There always will be situations where there are First Nation governments that are not going to comply. How is this bill going to make them comply?
Mr. Calla: It is not optional.
Senator Dyck: No, it is not optional. However, the same remedies in the bill are available to the minister now, and there are still — I do not know how many — bands that do not comply. There is no new remedy that I can see. Do you see a new remedy?
Mr. Calla: I see that there is a clear requirement through a piece of legislation in Parliament, not through a policy or procedure in the minister's office.
Senator Dyck: Mr. Mak?
Mr. Mak: I believe that it does provide a further obligation to comply simply because it is a matter of shedding light on the financial affairs of a First Nation. Even though some might not be inclined to comply, this obligation is now legislated, and there is the very fact that, if they do not, there are consequences. Being required to follow GAAP and having to be audited, with the limitations that I pointed out, still creates a threat, if you will. On that basis, I think it does improve corporate governance.
Senator Dyck: The minister said they would never use the final threat.
Senator Meredith: Mr. Calla and Mr. Mak, we have heard that these consolidated financial statements, if they are published, will put potential businesses at risk in terms of competitiveness. Do you subscribe to that? Explain in terms of how the statements are published to protect the details of the operation one line item in terms of, for example, repairs or equipment purchases.
Mr. Mak: As I mentioned, consolidated GAAP financial statements or IFRS statements are highly aggregated. Generally speaking, you would not see a line such as repairs and maintenance, marketing, advertising or even telephone expenses. You would see "operating expenses." Keep in mind that that would then include federal funded revenues, the own-source revenues and activities, all mashed together.
On that basis, with this level of aggregation, I simply do not believe that the details would be available to compromise any sort of competitive advantage.
Mr. Calla: You asked the question about competitiveness. On a specific activity, no; a consolidated financial statement will reveal the strength of the financial position of the entity. You cannot deny that. That will have consequences potentially.
Senator Meredith: What are some of those consequences?
Mr. Calla: Someone looking at a consolidated position who is not seeing the financial strength that they might like to see in a partnership will not participate in it. They will not even engage in conversation about it because it will be made public on the Web and they will make their own judgments without even engaging the First Nation community. That can be a consequence here.
Senator Seth: What kind of information relating to First Nation finances would you make possible to give confidence to a potential investor?
Mr. Calla: I think investors are looking for your ability to sustain your responsibilities in the partnership. If you are in a partnership in which a cash call triggered, do you have the potential to respond to that cash call? Do you have the ability to participate in the acquisition of debt for a project? Do you have a balance sheet strong enough for you to participate fully as a partner? That is the kind of information people are looking for.
Senator Seth: How often is it provided?
Mr. Calla: It is provided generally in the business negotiations that take place between the partner and the band.
Mr. Mak: Further to that question, we are talking in generalities. As Mr. Calla pointed out, the consolidated financial statements would be the first step in evaluating a commercial relationship, but the reality is, if the partner chooses to move forward in issuing debt or lending money or investing, they will be demanding much more specific financial information. For example, in a debtor relationship, consolidated statements do not mean anything because it is not a legal entity. You cannot attach a claim to its assets. They would be looking at the specific assets and liabilities of the party with whom they are contracting.
Mr. Calla is correct that the consolidated financial statements will provide a first impression, a general impression of the overall economic strength of the entity, but that is just a first step and much more will be demanded.
On that basis, it is the specifics that would matter to the investor. That is not available in these statements.
Senator Munson: I have a question to clear up a few things. Mr. Calla, did your organization have any input into the development of Bill C-27? I think you said something along the line of no. If it is no, would you like to have had input into Bill C-27?
Mr. Calla: We provided suggestions quite along the lines that Mr. Mak was saying. I would prefer to see the definition of "income" more closely match GAAP or IFRS in the private sector. Again, we did not want to go through all the suggestions we have made, but if you go back to that table, we suggested amendments to certain things that brought them in line with GAAP, FMB standards, in something that would be I think more relevant in the long term.
We did not engage in a discussion in the development of legislation, but through these opportunities and opportunities when it was in the House of Commons, we have made our suggestions known.
Ms. Point: To be clear, we appeared before the House of Commons in October of 2012 and presented a very similar letter to the one that you have received. It is titled "Bill C-27, First Nation Transparency Act." It sets out four different proposals. You have it in your materials in French and English. We provided those in October 2012 and none of those proposals were accepted.
Senator Munson: Do you like this bill?
Mr. Calla: It is not a question of liking the bill. The minister has a responsibility. Regardless of who is in power, the minister has to respond to that responsibility. This is their choice to respond. I would prefer that everyone would have passed the financial administration law and produced an annual report much more comprehensive than what you have in this bill. I appreciate the sensitivities in how this bill was designed to respond to a limited set of issues that are being faced. We would like every First Nation in this country to have a full-blown financial management system, financial administration law, and to get their financial performance reviewed on a periodic basis. That is what this fiscal management act does.
Senator Munson: On your website, the message from the chair states that the First Nations Financial Management Board has been working with INAC and exploring possible synergies which exist between Financial Management Board standards and general assessment criteria to determine whether Financial Management Board certification can serve as a proxy in INAC's risk assessment. Does this mean that in the future any funding provided to First Nations governance will first require Financial Management Board certification?
Mr. Calla: It has not and does not. I will say that starting last year those First Nations that were certified were asked by the department to give verification of their certification, and our certification, according to the one committee that communicated with us, did act as a proxy for their evaluation process, but there was no intention to require everyone to come to the Financial Management Board to be certified. Those that do, in our discussions with the department, have successfully seen the department accept that our certification could be used as a proxy.
Senator Munson: Mr. Mak, First Nations governments that are opposed to this legislation have stated they may file legal action because Bill C-27 interferes with their right to govern themselves. Should this occur, a great deal of taxpayer and First Nations peoples' monies will be spent fighting a battle that has already been fought and won in Federal Court — for example, Montana v. Canada — yet is not being recognized by this legislation. What would you recommend as a solution to solving issues with the few First Nations governments that do not comply with their citizens' rights to financial information?
Mr. Mak: With respect, sir, I am an accountant and that sounds like a legal and social policy question. I am not sure I can answer.
Senator Munson: There are a lot of accountants who have views.
Mr. Mak: That is on accounting matters, sir. I am not sure I can answer that question.
Ms. Point: I will take a stab at that. I am a lawyer by training and I am a member from the Musqueam First Nation. I had the pleasure this morning to hear my regional chief, Jody Wilson, speak at the AFOA conference in Toronto. Some of her comments resonated with me.
The difference between Bill C-27 and the First Nations Fiscal and Statistical Management Act is that the legislation that we operate under is optional. When a First Nation enters into our process, it is because they want to. When a First Nation enacts a law on its own accord, it legitimizes that law. It is more meaningful for that community. They take ownership of it.
When you provide a piece of legislation and say it is mandatory, it is not going to be received the same way by a First Nation, by community members, as when the elected chief and council opt into a regime. Will there be legal challenges? I could imagine that there will be.
Senator Raine: We do not see Bill C-27 as being very complex, but obviously it is posing difficulty for some people in the community. Coming from the financial administration community, we thank you very much for sharing your expertise.
My question concerns self-governing First Nations. I understand that all self-governing agreements require financial information disclosure. Are any of the recognized self-governing First Nations certified by FNFMB? Are they generally involved?
Mr. Calla: They would like to be. A self-governing or treaty First Nation is not an Indian Act band after that, pursuant to the legislation they pass. They are outside of the Indian Act. Our legislation is designed to deal with Indian Act bands. There is a provision to bring someone in under regulation, a self-governing or treaty First Nation, and those who have signed recent treaties are starting to look at those matters now. We do not yet have a regulation for either one of those.
Senator Raine: Are they recognizing that the standards and procedures you have developed are designed for First Nations?
Mr. Calla: Yes, they are. In fact, the Sliammon community, which will begin treaty implementation over the next few years, is going to engage with us shortly to develop their financial administration law and become certified as they prepare for treaty implementation.
Senator Lovelace Nicholas: From what I understand, First Nations already submit reports and audits on a daily basis. At one point we were told that they sit on the shelves of Aboriginal Affairs and are not even being read. Would Bill C-27 not add more burden on the First Nations?
Mr. Calla: Respectfully, I do not believe so. We are obligated to produce an audit at this point anyway. Good governance practice dictates that what they receive, compensation and how they travel are matters that should be revealed to the public. I do not believe this puts an additional burden on First Nations. It is something that, as governments, they should be doing anyway.
Senator Lovelace Nicholas: I feel it does because they are already reporting. It already takes a lot of their time and now they have to do another report.
Mr. Calla: With respect, senator, it is not another report. It is taking a copy of one they should have already produced.
Senator Lovelace Nicholas: I believe they already produce it.
Mr. Calla: They do.
The Chair: For clarity, they produce it and this would cause it to become public.
Mr. Calla: Yes.
Senator Patterson: I would like to ask Mr. Mak if he could outline his qualifications, his experience auditing in First Nations communities, perhaps some of the challenges he has seen and how Bill C-27 might help address that.
Mr. Mak: I am a chartered accountant in Ontario. I am a chartered business valuator in Canada, a certified public accountant in the State of Illinois, a fellow certified public accountant in Hong Kong, a chartered global management accountant — which is a U.K. and U.S. designation — and a certified fraud examiner.
My experiences in dealing with First Nations are, unfortunately, matters of litigation and are subject to confidentiality unless they are publicly reported cases. However, oftentimes in our office we are approached by members of First Nations with requests to investigate suspected wrongdoing by the leadership. On that basis, I believe there is an appetite by memberships to become engaged in this process. They are asking questions and there is already an interest, if not a level of sophistication, which exists within the membership for financial information.
I am not sure that Bill C-27 necessarily adds a burden to the financial reporting, but I believe the existence of that obligation will create a greater sense of accountability by the leadership, particularly with respect to the schedule of remuneration and expenses, and especially if we expand the definition to be consistent with GAAP and IFRS to include immediate family members as opposed to just management. I think that will create a spotlight, if you will, and create the accountability that our office sees memberships demanding.
Senator Patterson: There is reference to generally accepted accounting principles in the bill. Do I understand from you, Mr. Mak, that with the evolution of IFRS the GAAP are changing and could allow for catching possible loopholes like related party payments?
Mr. Mak: They have changed and clarification is required because when you refer to GAAP in the handbook, you are looking at different forms of GAAP and what we have seen in practice, which is First Nations GAAP, so some degree of standardization is required.
There is a possibility that loopholes will be exploited. In fact, in my practice we see these loopholes being exploited daily. It is a danger to assume that imposing these standards will create a rigid and strict set of rules that everyone must follow, but nevertheless it is a step forward, especially with the schedule of remuneration. It is certainly an expansion of the current obligations.
Senator Patterson: You said you had experience with business deal making. Did I understand that?
Mr. Mak: Transaction work?
Senator Patterson: Yes.
Mr. Mak: Yes.
Senator Patterson: Mr. Calla has spoken about it, but could you elaborate a little bit on your assertion in your opening remarks that the reporting requirements do not compromise competitiveness for First Nation government- owned enterprises?
Mr. Mak: The premise of that statement is based on the fact that we are talking about consolidated financial statements, which combine public source funding and own source funding and all the activities undertaken by a First Nation. If you take different numbers from different places and add them all together, the details of any one activity would be very difficult to discern.
As Mr. Calla said, it is unlikely it is discernible at all unless we are talking about large transactions or massive forms of activity. For example, if a tribe undertakes to make a new investment, in the year following the increase in assets and liabilities may imply that it is attributable to that one activity. However, it will not be separately highlighted in the statements. If there is concern about individual activities being undertaken that people are uncomfortable disclosing, I do not think, practically, the risk is there.
Senator Dyck: Oftentimes band members apparently cannot get information with regard to businesses. Will these consolidated financial statements give them the type of information they need to determine where the money is going if they have several band-operated businesses? Will they be able to track it through those consolidated statements, or do they need more?
Mr. Calla: I think they will be able to track trends. They will not be able to find, in an audited consolidated financial statement, the details of those business operations. Those business operations themselves will have financial reporting requirements. That is why I keep referring to an annual report, not just an audit. An audit is contained in an annual report, but the annual report will describe the activities you are referring to.
The Chair: I want to thank each of you for your presentation. It was very technical but very helpful to us all, and I wish you well in the rest of your evening.
Senators, our second panel is made up of two witnesses appearing as individuals. We welcome Beverly Brown, a member of the Squamish First Nation, and Michael Benedict, a First Nations tax consultant.
Please proceed with your remarks.
Michael Benedict, First Nations Tax Consultant, as an individual: I would like to begin my testimony by saying thank you to the committee chair, Senator White, and all committee members for giving me the opportunity to tell my story and voice my concerns regarding the lack of accountability and transparency within certain First Nation governments and my support for the proposed First Nations financial transparency act, Bill C-27.
My name is Michael Paul Benedict. I am an Abenaki citizen, member of the Odanak First Nation, situated in what is now called the province of Quebec. I am currently the spokesperson for the Coalition of Abenaki Citizens for a Just, Transparent and Accountable Abenaki Government. I am also a former employee of Assembly of the First Nations of Quebec and Labrador Secretariat, and the Canada Revenue Agency.
From January 2000 through April 2011, for over 11 years, I was employed by the AFNQLS as a fiscal adviser. In March 2005 I was appointed as the Quebec regional representative of the CRA's First Nations Advisory Committee by AFNQL Chief Ghislain Picard and then Minister of National Revenue the Honourable John McCallum. I retired from the AFNQLS in May 2011.
Please note that my testimony is not in any way intended to diminish or negate the Government of Canada's fiduciary, legal and moral obligations towards the First Nations of Canada. I also acknowledge that there are First Nation governments across Canada that have adopted their own legislation promoting and ensuring financial accountability and transparency, such as the Sawridge First Nation Financial Administration Act.
My support for Bill C-27 stems from the lack of First Nations legislation within the Odanak First Nation and numerous other First Nations governments situated across Canada.
I would like to inform committee members that there is an elected representative of the Odanak Band Council, a councillor named Réjean O'Bomsawin, a member of the Coalition of Abenaki Citizens, who has been actively promoting accountability and transparency within the Odanak Band Council but who has been repeatedly isolated, segregated and excluded from Odanak Band Council decisions by the chief, other council members and even the Odanak band office's general director.
In 2006, Alanis Obomsawin, an internationally acclaimed Abenaki film and documentary maker, producer, and recipient of the Order of Canada, who is employed by the National Film Board of Canada, released her documentary entitled, Waban-Aki: People from Where the Sun Rises. This is a documentary of the Abenaki people of northeast North America. My father is one of the Abenaki citizens appearing in this documentary. Alanis is my second cousin; her mother Mirya was my great aunt, my grandmother's sister. When this documentary was released, Alanis asked for my opinion on the film. I told her that I believed all her films and documentaries demonstrate the plight of the First Nations in Canada and how our people were abused, victimized and denied the right to live on their lands according to their customs and traditions by European and Canadian governments. I continued by stating that her documentaries tell only one side of the story.
The other side of the story is the abuse that First Nation citizens and governments inflict on themselves. I affirmed that, yes, we were abused, we were victims, but today we also have the power to remove ourselves from situations of abuse, to remove ourselves as victims. I suggested to Alanis that she make a documentary showing how our people have become mired in jealousy, envy, addictions, all sorts of dysfunction and, consequently, continue the cycle of victimization ourselves. Alanis seemed appalled at my suggestion, stating that she would not air our dirty laundry in public. I told her that if we do not face our problems of corruption and abuse head on, the non-First Nations media would do it for us. I went on to say that the negative media attention First Nations receive is largely due to all the secrecy that revolves around First Nations governance and First Nations band administration.
On March 17, 2005, the Odanak Band Council held a public meeting to inform Abenaki of Odanak citizens that public money coming from the education budget, and possibly other sectors, had been misappropriated for personal use by several employees of the Odanak government. We were informed at this meeting, prior to verification or audit, that charges of fraud were pending.
At the time this scandal was made public in Odanak, I was employed with the AFNQL Secretariat as fiscal adviser to the chiefs of Quebec. Also, Alanis was filming her documentary, Waban-Aki: People from Where the Sun Rises, at the same time.
On March 22, 2005, the accounting firm of Samson Bélair/Deloitte & Touche, situated in the city of Trois-Rivières, Quebec, was retained to perform an audit of the Odanak Band Council. The audit was completed, and the Odanak chief and councillors were given a copy of the audit report between May 2 and May 6, 2005. On May 17, Quebec regional representatives of Aboriginal Affairs and Northern Development Canada met with the Odanak chief and council to discuss the findings of this audit report. Although one of the councillors, Ms. Claire O'Bomsawin, had promised to make this audit report public, on May 27, 2005, during an Odanak Band Council public general assembly, Chief Gilles O'Bomsawin, who is now deceased, announced that the audit report would not be made public. He informed us that the employees were dismissed from their jobs, and this was punishment enough. One of the employees fired was his daughter. He also announced a restructuring of the Odanak band office and its administrative services to prevent such a scandalous situation from occurring again. However, as of today, I am unaware of any Odanak Band Council policies put in place to prevent such abuse. I have never seen the chief and councillors' job descriptions, and when I asked for a copy, none of our leaders were able to tell me that such documents exist.
Concerned Abenaki citizens in attendance at this meeting asked if the employees that misappropriated the public money would be required to reimburse the Odanak Band Council. The chief and councillors answered no. They once again reiterated that losing their jobs was punishment enough.
I was outraged, as were my daughter, Veronique, and other Abenaki of Odanak citizens. How could our youth continue to trust in their elected officials and government employees?
The AFNQL proclaims that "all decisions must now be taken considering the impact on the next seven generations." However, the AFNQL admits that there is a lack of coherence amongst the chiefs — its members. It recognizes that each individual First Nation's jurisdiction and authority stems from that First Nation. This is stated in the 26 principles of peaceful coexistence adopted by the assembly of chiefs on May 19, 1998. Therefore, no sanctions are undertaken by the AFNQL against a First Nation that abuses its citizens' civil and/or human rights and brings shame on the assembly of chiefs through its actions. The AFNQL really missed the boat on this one.
The employees that were fired never admitted their guilt and even undertook legal proceedings under the Canada Labour Code to prove they were unjustly dismissed from their jobs. They argued that the Odanak Band Council did not have a policy in effect preventing employees from using public funds for personal use. They won their case and were compensated for lost wages and salaries. Some of them are employed today in a First Nations public education institution in Quebec.
On June 6, 2005, following my advice and encouragement, Veronique, my daughter, sent an access to information request to INAC's Access to Information and Privacy Coordinator, Ms. Marie Dauray Chartrand, at the Gatineau, Quebec, office. On or about July 7, 2005, Ms. Dauray Chartrand responded, stating that because First Nations governments — band councils — do not fall under the provisions of the Access to Information Act or the Privacy Act, she could not comply with her request. In fact, INAC never requested a copy of the audit report from the Odanak Band Council because, as mentioned in the documents I submitted to Senator White and to other senators earlier, INAC's initial review had shown that there was no indication that the Odanak Band Council was not complying with the terms and conditions of the funding arrangement signed with Indian and Northern Affairs Canada.
Although I do not have a copy of Ms. Dauray Chartrand's reply, I do have the envelopes in which she acknowledged and replied to Veronique. I gave INAC's reply back to my daughter because I feared that if I kept them and my files were confiscated, the Odanak chief and council would find out that my daughter made an access to information request and would cut her post-secondary funding. I am sure you could easily search INAC's archives, with the dates and names I provided, to find a copy of this response. I have been informed that this was attempted and that the documents from eight years ago no longer exist in the archives of Indian and Northern Affairs.
Please note that if this audit report had been made public, Abenaki of Odanak citizens would have known the severity and the extent of lost revenues, the responsible parties and the course of action that would guarantee that justice would be served.
At the time this occurred, my daughter Veronique was the Quebec representative for the Abenaki Nation on the First Nations of Quebec and Labrador Youth Council. Therefore, she was actively involved in promoting the engagement of the youth of the First Nations in Quebec in different arenas, including financial and fiscal. Today, Veronique has obtained her bachelor's degree in business administration and works for an off-reserve company.
Chief Gilles O'Bomsawin, who is now deceased, sent two more letters to AFNQL Chief Ghislain Picard requesting that I be silenced. One letter is dated July 15, 2005, to which I responded in a letter dated July 20. There are copies included with the substantiating proof I submitted to the committee.
Chief O'Bomsawin sent a final letter, this time addressed to me but sent to the head office of the AFNQL, dated November 22, 2005. It stated that I had crossed the line and that we were now at a "point of no return." He was outraged that I had publicized, via a Google group dedicated to Abenaki of Odanak citizens, the airing of a news broadcast on the APTN television network on Wednesday, October 19, 2005, regarding the financial scandal of the Odanak First Nation. I was the one who prompted the reporter at APTN to investigate this story.
Finally, as an employee of the AFNQL Secretariat and a participant in numerous AFNQL chief's assemblies, I have witnessed first-hand how many of our First Nations leaders use their power to control their citizens and to hold them hostage by refusing access to information, services and funds should they speak out against corruption and abuse. I watched helpless as they used public money for their own political gain without consequence. They take refuge in their cries for sovereignty and autonomy, often using them as a smokescreen enabling them to avoid public scrutiny.
During a subsequent Odanak band public general assembly held in the spring of 2006, Abenaki citizens and residents of the Odanak First Nation were informed of the outcome of the audit report and of the consequences to the fired Odanak government employees. Alanis Obomsawin and I were both in attendance at this meeting. Alanis publicly said that it is now time to forgive and forget, to let our community heal and to move on. I spoke out and said that no one had admitted that there was any wrongdoing or accepted any blame. How can we move on knowing no one has admitted their guilt and that no measures have been put in place to prevent this from happening again?
Alanis spoke again and said that she has travelled throughout First Nation communities across Canada and that this situation is commonplace. In my closing remarks, I added that because financial abuse and corruption go on in other First Nations communities or even within non-first Nation governments — the Gomery commission had just finished its inquiry — we as Abenaki people should do the same. I could not and I cannot accept financial irresponsibility, corruption and abuse based on the fact that it has become commonplace in today's society.
As of today, following this Odanak band general public assembly, my cousin Alanis has not spoken to me, and that has been over six years.
I have contacted numerous First Nation and non-first Nation journalists and media seeking their interest and willingness in writing and publishing articles on First Nations corruption and financial mismanagement, without success. Due to the complexity and legal issues surrounding First Nations autonomy and sovereignty within Canada as well as the legal, fiduciary and moral obligations of the federal government towards the First Nations, journalists seem to be reluctant to tackle these contemporary First Nations issues. It is similar to the proverbial "white elephant" sitting in front of the television that no one wants to admit is actually there.
Despite the annual budgets allotted to First Nation governments by the federal government, living conditions on reserve seem to, in some instances, get worse. Hundreds of thousands of First Nations citizens live in dismal conditions of poverty, physical and moral decay, while a class of profiteers who manage and govern many of their communities live in luxury. These abusive leaders have total immunity and live without fear of consequence. They are assisted by a veritable industry of Aboriginal poverty dominated by lawyers and consultants who advise them on the best way to extort money from the federal government.
Aboriginal Affairs and Northern Development Canada, formerly known as INAC, has a track record of wilfully turning away from clear abuses of financial, electoral and environmental mismanagement amongst First Nation governments, despite cries for help by the latter's citizens, probably due to the fact, as outlined above, that First Nations leadership cry that their sovereignty and autonomy have been violated. Due to legal and moral obligations, requests for information to Aboriginal Affairs and Northern Development Canada by First Nations citizens about their respective First Nation are generally redirected to that First Nation government, which has refused information in the first place, even if that information is supposed to be legally and publicly available. No wonder First Nations citizens are disgusted and disillusioned with the current system.
I have brought my concerns on numerous occasions to my former employer, AFNQL Chief Ghislain Picard, and voiced my concerns over the years to numerous other chiefs of the First Nations of Quebec. However, because the AFNQL recognizes and upholds local First Nations autonomy and sovereignty, it seems as if my concerns, my cries for justice, integrity and honesty on behalf of First Nations leaders and governments have fallen on deaf ears.
I am a founding member of the Coalition of Abenaki Citizens for a Just, Transparent and Accountable Abenaki Government because of my experience as outlined above and due to the fact that I have encountered great difficulty in obtaining the complete financial information of the Odanak First Nation, to which I am entitled as a member and citizen.
I returned to live in my community of Odanak in the summer of 2009 after an absence of about 25 years. Upon my return, due to my background as a former employee of the Canada Revenue Agency and the Assembly of First Nations of Quebec and Labrador Secretariat, and my advocacy for financial accountability and transparency, my spouse and I were harassed, my house was vandalized, and members of the coalition were intimidated.
In numerous public general assemblies I have spoken out against such abuse. I regularly requested that our leaders invite and include Abenaki of Odanak citizens, wherever they may live, in the decision-making process of our community. My efforts and those of coalition members have been met with fierce opposition.
It became apparent that local elected officials are afraid that we will empower Abenaki citizens to take a stand against abuse of power, misappropriation of public money and unavailability of information relevant to the daily activities and operations of our local government.
From my perspective, the proposed First Nations financial transparency act does not go far enough in establishing consequences and penalties for non-compliance. This legislation also lacks a section or sections requiring that First Nation governments adopt fiscal and financial policies that deter and hopefully prevent abuse and corruption. As it is now with the Canadian Human Rights Act, following the repeal of section 67, it is my opinion that all federal legislation — for example, the Access to Information and Privacy Acts, codes of conduct and ethics for public servants, et cetera — should automatically apply to First Nations citizens and governments where no equivalent First Nations legislation and/or policies exist.
In the absence of legislation created and enacted by the First Nations protecting their citizens against financial abuse and mismanagement, the proposed First Nations financial transparency act is a step in the right direction. In light of the above, I and the Coalition of Abenaki Citizens for a Just, Transparent and Accountable Abenaki Government support Bill C-27.
The Chair: Thank you, Mr. Benedict.
Beverly Brown, Member, Squamish First Nation, as an individual: My name is Beverly Brown, all rights reserved by the authority of Bev of the Brown family. I need to make a correction here. My name is spelled B-e-v-e-r-l-y; last name Brown.
I am a descendant of the Homulchesen and the Skoumish people. I come from what is known as the Squamish Nation, which is located in North Vancouver, straddled on West Vancouver's border. I am here to make a verbal statement today and at a later date will provide a written submission and specifics on the Squamish Nation. To whom do I address this?
The Chair: To myself.
Ms. Brown: Could I get your contact information after?
The Chair: Yes. I will give it to you at the end of the meeting.
Ms. Brown: I am obviously here to support Bill C-27 due to the lack of transparency and accountability of chief and council from the Squamish First Nation.
A little history: We, the people of the Squamish Nation and all other nations here, have never signed nor ceded our land, resources, assets or people. We are the owners of those lands, and those are the lands of our grandchildren and our future generations. All that is attached to it is our responsibility to care for in a good way. We are not talking about them; we are protecting them. It is our obligation and our duty, and I am here today to speak on behalf of those from the past, some from the present, and those yet to come.
Although we do not have a treaty like other nations across Canada, we do have what is called an amalgamation agreement, which was drafted by an Indian agent from the AANDC, formally INAC, which, by the way, was a fraudulent signed document that was not in agreement with nor provided approval by the people. We have written evidence that we will submit at a later date.
This is not the first time that we, the people of the Squamish Nation, have been here in the Senate to express our displeasure with our chief and council, who regularly make laws without our agreement, authority or consent. In 1999, two of our members, Wendy Lockhart Lundberg and Velma Baker — this is Velma. She used to do a lot of the advocating in our community and asked me to come on board to help out with things in the community because there were improprieties. They were also here at the Senate expressing opposition to Bill C-49. I believe that was in 1999, and those are in the minutes of the Parliament here.
They collected a petition identifying that the people of the Squamish Nation had no idea what their leadership, chief and council were doing and presented this information to the Senate with the intention of sharing those facts.
The Squamish Nation chief and council told the Senate that we, the Squamish Nation people, agree. I am here today to put on the record that we, the people of the Squamish Nation, do not agree and have not agreed to the proposed legislation and those that followed. The Squamish Nation chief and council have provided the Senate with misleading information and have committed contempt of the House of Commons, and this is a crime.
The Senate failed to obtain proper consent or approval from the people of the Squamish Nation as well. All of this has been done privately between the government and chief and council, without the people. This type of trickery has to stop. This needs to be regulated and proper consent, authority and approval obtained from the people — all people in each nation, not just the Squamish Nation.
Much of what has been done was done before I was born. I have recently gotten involved in the community. I was asked to join and help with our fight against the land code. The land code was defeated in a vote with 808 Squamish Nation people saying no.
We have been trying to address internal issues. I have asked the leadership directly and indirectly, with no answers. I have been asking the same questions others within my nation have been asking for over 30 years. We, the people of the Squamish Nation, deserve to get answers to our questions and know where the funds go.
For the record, I would like to request full disclosure, a demand made to you in your personal, public and private capacities, in your fiduciary trustee capacities of the Indian estate trust for the tribal people. I also request a full audit by a neutral third party, chosen by membership from the Squamish Nation, to its people to be done immediately, provided to each person on or off reserve and placed online for all to see. We deserve to know what businesses we own and operate and whose names those business are in. The few I found were in individual names, which make them the proprietor of the business while in office and long after their term is up. This practice needs to be regulated by the government and the Crown. These businesses need to be in the Squamish Nation's name and clear trust agreements in place with annual dividends from each business distributed equally to the people.
This unregulated business creates clear divisions within our own communities and it creates an "us and them" situation. It is the rich and the poor, the haves and the have-nots. You get the idea. For each band-owned business, we deserve to know who is on the board of directors and what their salaries are. We have never been told who is on the board of directors and suspect that many chief and council members are wearing more than just their elected position. We also suspect that they sit on the boards of the businesses we own and operate under the Squamish Nation's name and collect salaries for those positions, in addition to their council position. We believe these should be transparent and they should be held accountable, by law, for any decisions made.
We also deserve to get the finances for each corporation, specifically true figures and not gross misrepresentations of finances that do not have enough detail to be meaningful and are so vague that give the illusion of transparency while hiding secrets in plain view.
I would like to put on the record that the people of the Squamish Nation have never been invited to an annual meeting or been provided the right to vote for the direction of the company as per government regulations. These businesses are privately run by chief and council and are unregulated by the government and the Crown. This practice needs to stop.
In addition, I have been regularly requesting information on salaries, travel, honorariums, et cetera, with no response. This needs to be addressed by AANDC immediately. We deserve to know what our chief and council pay themselves, their travel, honorariums, et cetera, because it comes out of our own-source revenues. We, the people of the Squamish Nation, have never been told directly the true revenue figures. What is provided to AANDC, chief and council and membership is all different. The Squamish Nation leadership, chief and council, our elected officials, brag to the media about our own-source revenue flow and the public knew our own revenues before we did. We only know what they disclose publicly.
If we truly gross $60 million in our own-source revenues, why is the Squamish Nation cutting jobs, programs and services to people? Why are they blaming the government for cuts when our own-source revenues are estimated to be in the $60 million range? Why are distributions and shares so low?
In addition to the Squamish Nation band-owned businesses, there is also the issue of community economic development initiatives — taken up with all First Nations, like the Squamish First Nation — with the government and its corporations across Canada. Agreements have been made for our lands, resources, assets and people without the proper consent of the people of the Squamish Nation and all other nations across Canada.
The government and the Crown, in plain view, are using the federal board known as chief and council to convert our lands, resources, assets and people, and this is wrong. It goes against the duty of the Crown vis-à-vis our relationship. We have a de facto treaty-like relationship. This is in an international context, not a land claims policy. In that context, you have to conduct yourself in a certain way. You are not to dispossess us of our lands directly or indirectly. You used to do it directly with Indian agents, for example, with the amalgamation agreement — which is a fraudulent document — and for other treaties that are also fraudulent.
What we are seeing and what we know is under way is occurring indirectly through your legally incorporated entities, including modern-day treaties, land codes, designations, impact benefit agreements, protocol agreements, memorandums of understanding, accords, accommodations, et cetera. You must stop this. It is your duty to regulate these companies.
If you fail to put it in check or fail to listen to what I am saying today to you, the government representing the Crown, you are part and parcel of the conspiracy to convert our lands, resources, assets and people. You are working to completely strip the Indians of the lands and resources in the Squamish Nation as well as others. Our inherent rights are linked and tied into our lands and resources. You are trying to strip that away and leave us with what, a right to vote in a municipal election? No, not without our specific consent. Asking our federal boards — i.e., chief and council — is not our consent.
When you act on that and put in place those fancy contracts and say you do not care what they misled you on, or when you put in place incremental treaty agreements, accommodations, et cetera, we know what you are doing. We are not stupid. It is wrong. I am here to put you on notice to tell you it is not going to work. You cannot achieve this without having us agree to this, and we do not. I put on the record that we do not agree to this and our future generations do not agree to this, because I now speak for them. My duty today is to speak for those who cannot speak for themselves, for the next generations and those to come. I do not stand here alone when I say this.
I want to help you understand the consequences of what your government and Crown are doing and are involved in. I want to help you understand the consequences you likely do not appreciate. They are very severe for the country. It is not just us that are at risk. The consequences are most severe for you because if you undermine our relationship, if you proceed with the conversion of our lands, resources, assets and people, then there are consequences for Canada as a nation. These consequences are on Canada's financial viability, economic security and stability, and that is not a threat; it is the reality of being an unconstitutional and unlawful nation. There are laws in place. Are we run by the rule of law or not? You will need to review what I give you in my written submissions and think seriously of what I am saying today because that is the question you face now, not the future generations. This is on you.
Is this going to be a lawful country or not? Are your relationships going to remain lawful with indigenous nations? This is your choice and you decide the future of all Canadians today.
I have some recommendations for Bill C-27 I would like to make. I undertake to provide these following recommendations to you in writing at a later date.
One: I suggest that the Queen acknowledge her duty to the Indians and her part in the drafting and passing of this piece of legislation. She is in a protectorate role and is not to survey the Indians' land, resources, assets or people in any way. She needs to remember we are her allies. She is not to convert our lands, resources, assets or people, directly or indirectly.
Two: In addition, I also suggest that the Senate and the House of Commons of Canada fulfill their duty. May I remind you that you still need to get meaningful approval and consent from all people; not just a few. When I am talking about the people I mean the grassroots Indian people, not the federal board, chief and council and their say-so. You have a due diligence to meet, so please meet it.
Three: I suggest that Canada be a lawful country. For this country to be lawful, you must respect our relationship and must stop facilitating the conversion of our lands, resources, assets and people vis-à-vis the Crown, the government and your corporations, including the federally appointed boards known as chief and council.
Four: I suggest that the transparency and accountability also apply to the Queen, the government, corporations, as well as the board, chief and council.
Five: I suggest that this piece of legislation also include all First Nations, including the modern day treaty First Nations. Without this kind of tool in place, there will be no accountability or transparency in place for those grassroots people, and this would be a gross injustice.
Six: I suggest that the fee be removed for people who request the financial disclosure. Most grassroots First Nations, as you well know, do not have the high-paying jobs to pay a fee to request their finances. It is their finances; give it to them.
Seven: Court remedies need to be readdressed. Again, grassroots First Nations do not have access to large amounts of funds, so making it a stipulation to bring our matters to the Superior Court if our chief and council do not provide the finances puts grassroots people at a disadvantage. This is a gross injustice; please remove it. This should be free for all people from all nations.
Eight: The request from grassroots people for their finances should be easy, accessible and anonymous and provided directly to the person requesting it without charge.
That is what I have thus far and will make written submissions at a later date.
Senator Ataullahjan: I was going to ask you about the transparency and accountability issues that you have in your communities, but I think you already answered that question: There is no transparency and there is no accountability. In your opinion, you state that this is true of other First Nations too, communities across Canada, that there is no transparency or accountability. Have you encountered any communities that have positive transparency and accountability, and what has been the benefit to these communities?
Mr. Benedict: Are you addressing your question to either one of us?
Senator Ataullahjan: Yes.
Mr. Benedict: As Fiscal Adviser for the Assembly of First Nations for Quebec and Labrador Secretariat, I have visited practically the majority of the First Nations communities in Quebec. I have visited numerous First Nation communities across Canada and the United States. The majority do not have transparency or accountability.
There are the positive exceptions where we see band-owned businesses that are run on a community basis that give a certain amount of power and input and collaboration from the citizens themselves into the decision-making process that guides these businesses and this community development.
In Quebec, one of the communities that I could probably specify would be the Innu or Montagnais community of Essipit, which is about 45 kilometres going east from Tadoussac, Quebec. Since around 1999-2000, Essipit has had great tourist economic development. They have established condominiums on the waterfront, whale-watching tours, restaurants and so on. These are community-owned businesses where all the community members benefit from this development. It is a small community of about 400 on-reserve members.
The Chair: We will try to keep the answers a little shorter. There are a number of questioners, and I would like everyone to have an opportunity.
Mr. Benedict: To be specific and straightforward, there are not that many communities that would have transparency and accountability that I could cite.
Senator Dyck: First, I would like to thank you for your testimony this evening. It sounds like you are in very difficult situations, and I recognize it takes a lot of courage to come forward and present this information.
You have had, in both instances, long-standing problems. In one case, if I could quote from your material here, Mr. Benedict, you say that "Aboriginal Affairs and Northern Development Canada . . . has a track record of wilfully turning away from clear abuses of financial, electoral and environmental mismanagement amongst First Nations governments." There is a role of both chief and council and the department in terms of the long-standing problems that probably both of your First Nations have had. My understanding is, according to the regulations and policies that are in place in the department now, that First Nation bands are supposed to supply chief and council salaries and consolidated audited financial statements to band members. The department is supposed to enforce that. In your case you are saying that is not happening.
Mr. Benedict: It is not just a question of salaries and wages. As we can see what is going on right now in the Senate as far as expense accounts — and I am citing this just because it is a current fact — the expense accounts form a major part of an elected official or representative's income. On that side of it, there is no accountability, so I could see that my chief would earn, say, $60,000 a year, but how much is he actually earning when he is travelling outside the community; and as I mentioned in my brief, we do not have their job descriptions, so on how many committees is he supposed to represent us? How is he supposed to represent us? Where is he supposed to travel to do that, and what benefits from his representation do our citizens receive? That kind of financial accountability does not have much to do with his wages.
Ms. Brown: I have written and asked my band council directly for that information. I have never received it. I also requested that information from the B.C. region AANDC and received no response. I was stonewalled and told to go back to chief and council for that information. I then spoke to the MPs and MLAs in North Van/West Van. In fact, West Vancouver did not answer — MPs or MLAs. However, in North Vancouver I met with Naomi Yamamoto and Andrew Saxton. I brought my concerns there, and as far as I know, they have not brought my concerns here to the house, even though I have written and went to meet with them. Even with that, I received no disclosure about any of the finances. Then I got in touch with Colin Craig at the Canadian Taxpayers Federation. He has been trying to assist, and still we are being stonewalled.
What is in place currently is not working. We are not getting anything.
Senator Dyck: To follow up on that, it seems to me from what I have read that the department has ultimate control because they control the funding that an individual First Nation gets. Therefore, if the First Nation is not providing information or 30 years down the road has not presented to the department the proper information, then something is clearly wrong.
Ms. Brown: I think, though, when talking about it, we should distinguish between federal funds and own-source revenues. They can declare on federal funds but not our own-source revenues, and those are the ones we are not getting disclosure on, just to be clear.
Senator Dyck: Those are covered too, provided that there is permission from the band, is what it says under the regulations.
Ms. Brown: Yes.
Senator Meredith: Thank you, Mr. Benedict, for your courage. Given the personal nature of you coming forward and speaking about this with respect to your band and the lack of transparency and accountability to the people in your nation, I applaud you for doing so because it takes a lot of courage.
Ms. Brown, with respect to the request and the fact that you have seen your elders go forth and carry this fight, and now you have picked up the torch, I commend you for that.
With respect to the information that you have requested, can you go into detail as to what some of that information is with respect to the own-source revenues and what has not been provided to you as you make these requests?
Ms. Brown: In terms of own-source revenues, with the businesses, they are often just listed in the financials by a number, and I have tried to research those numbers. I have gone to Service B.C. to research it, and what I got from them was a printout of who was on title for owning that business. It had no name of the business, did not say what the nature of the business was; and it had two names. Nowhere on that piece of paper did it say that this business was in trust for the Squamish Nation. In fact, the actual mailing address was for two people. I do not want to name names; I think that would be inappropriate, but there were two names and mailing addresses for them and no finances, no board of directors, nothing. There was absolutely nothing, and you cannot determine where the business is actually located. The information was only a mailing address.
In terms of own-source revenues, if we own businesses then we should be provided with information. There is legislation in place for businesses. The government has legislation in place to regulate corporations. They are not being regulated on our own-source revenues or the businesses that we own and operate.
I have never attended a meeting for each of the businesses that we own. I have never voted. I have never received a share from each individual business. We are not even privy to any of that. We should have regular votes and a say in the direction of a business we own and operate. Therefore, it is not being regulated within the nation and outside by the government.
Senator Meredith: What is the population of your nation?
Ms. Brown: The Squamish Nation has a population of about 3,600 members.
Senator Meredith: You talked about resources being cut. You indicated that with regard to government funds the band leaders are saying, "We can no longer afford this because there are cutbacks in government funding," yet they are making, you say, in excess of $60 million own-source revenue. However, youth programs or things to do with building the community and capacity in the community are being cut back.
Ms. Brown: Yes, they are. They are cutting jobs, programs and services and blaming the government. They are saying it is because the government cut. However, if the government cut, use our own source revenues and continue to provide the service to the people; they still need it. They still need programs and services, and they still need jobs.
While they are cutting all these things, we have an influx of money coming from community economic development agreements like the forest and range agreement. That was never declared in our finances. We just had a new accommodation that is estimated to be worth over $130 million that is supposed to be split between the Tsleil-Waututh First Nation, the Musqueam First Nation and the the Squamish First Nation. Again, it is not declared in our finances. Why are you cutting if you have this influx of big cash coming in? It does not make sense to me.
Senator Meredith: Mr. Benedict, with respect to your harassment, have authorities investigated that in any way? What has been the outcome of that?
I know that is a difficult situation for your family — your daughter is involved or was involved — but it has to be traumatic for you with respect to dealing with the situation and trying to represent your nation.
Mr. Benedict: In 2010, the police chief of Odanak was involved with an incident with the chief where the chief used his authority to intervene in a police situation with his daughter.
In my situation, I made three complaints to the police on my community. They investigated. They found the guilty parties that vandalized my house. However, because the way the vandalization was done and the harassment using cellphone burners and stuff like that — there was no concrete evidence — they said the prosecutor would not prosecute and would not go further with that. I contacted the prosecutor myself; he had never heard of me.
The case stayed at the local level and never got out of my community. They seized all my firearms when I took a lawyer. Three months later, they called me to say, "We tore up the papers, Mr. Benedict. Come and pick up your firearms. No problems here. We can resolve it at the local level."
I received two demand-of-retraction letters regarding my comments. One was from the chief and one from the chief of police. I have opposed retracting any of my comments, and it never went to court; they never followed through.
Again, it is intimidation. They want to see if I back down once they throw the lawyers and police at me. So far, it has not worked.
Senator Lovelace Nicholas: Thank you for your presentations. As a band member, I can relate to your presentations. You are very brave and I thank you.
Were you consulted on this legislation?
Mr. Benedict: In a direct way, no, I was not. However, because I am involved with fiscal relations and taxes as a tax consultant, I was informed of this legislation from the start, and I took an interest in it from the start.
Ms. Brown: By the band, I was not. I got involved with Colin Craig and I had seen Bill C-27, which is what I was going to see the MPs and MLAs about, because I was in support of it because it meant that the finances would be online and provided to membership. However, I was never consulted by the chief and council.
Senator Lovelace Nicholas: There was consultation from the government?
Ms. Brown: No.
Mr. Benedict: Never.
Senator Patterson: Ms. Brown, I would like to ask you about your recommendations. You were concerned about the fee required to obtain what I believe are paper copies of statements. The bill does require the publication of the consolidated financial statements, statements of salaries and expenses on the web, either on a band website, if the band has one. I am presuming the Squamish Nation, with all its money, would have a website. For First Nations that do not have websites or do not have Internet connections, we have been told that the department would post the information on its own website.
Everyone is connected now via the Internet. That is free. Is that at least some comfort to you that you could get it without paying money, even if it is not a hard copy? I suppose you could maybe print your own hard copy using the Internet. Is that of some help?
Ms. Brown: I have access to the Internet, but we are talking about grassroots people on the reserve who are living on $510 a month. They cannot access it. First, they cannot access the computer and have Internet. They probably do not have a computer, and they cannot pay for the fees. Even if you were charging for just the paper, they could not pay for it. That would be unfair because lots of them are on welfare.
Senator Patterson: I hesitate to summarize your eloquent statements, but I think that you believe that the law represents some progress. I think your submission is that it does not go far enough, but do you agree that it is a step in the right direction?
Ms. Brown: Of course I do. I believe that anything that makes this information public is a step in the right direction. What we are doing right now is status quo. You are doing this piece of legislation because you are forced to; AANDC is probably inundated with complaints by lots of First Nations. We are not the only one; there are lots. They are just unnamed — they do not have any faces today.
Senator Patterson: Mr. Benedict, you wrote to the chair of this committee and said that, in your point of view — and I think in your statement — the bill does not go far enough in setting out sanctions in the event of non-compliance with the bill. We have been told that in some quarters the sanctions are already too much. Could you elaborate? What would be the further sanctions that you would like to see put in place?
Mr. Benedict: For non-compliance, the principal sanction that I understand is within the power of AANDC is to withhold funding. Eventually, it can go to court proceedings and they can pursue a First Nations government that does not comply with the legislation. However, it does little to respond to the citizens, the grassroots people in the community, who are seeking to understand how their finances are being managed and spent, and how they are being represented by their First Nations council.
In my mind, the sanctions, for one, would push a First Nation that is in non-compliance to immediately have remedy situations in place. If it is a question of not making financial information accessible via the Internet or in any form, I suggest that there be an automatic legal letter of obligation pushing the band to publicize that information, especially to those individuals who have made the complaint in the first place.
Second, I believe there should be sanctions, not just monetary ones, on a First Nations government and its capacity to administer public funds if it cannot comply with legislation that is for the benefit of the citizens. It would not be to shut down a band council, because you would be penalizing the citizens themselves for services, but it would somehow jeopardize the leadership's capacity to continue managing the band's funds.
I previously spoke with the director of the elections directorate at INAC about getting involved in fraudulent activities when it concerns elections. I mentioned in my brief, the one I did not read but submitted to the committee, that the current chief of my First Nation has been found guilty, pled guilty, to selling contraband cigarettes while he was chief. Because this is not a criminal offence and he paid a fine under summary conviction under the Tobacco Tax Act of Quebec, Indian and Northern Affairs Canada could not intervene and could not ask him to step down. This was brought to their attention — I brought it to their attention, as did journalists — and nothing could be done.
This same chief, who has been re-elected three times, owns approximately 75 per cent of the businesses in our community right now. Much of the money from the band council has been used in developing these businesses and claimed as creating jobs for the employment of Abenaki citizens on reserve, and that is false. When we bring this information to light, again, as I mentioned in my brief, we are turned back to the band saying that Indian and Northern Affairs Canada or Aboriginal Affairs and Northern Development Canada cannot intervene in this situation because it is a local matter, and therefore you have to take it up with your council.
The chief and council hold the authority, hold the purse strings and can use the finances of the band, as they have done in my specific case, to intimidate and engage in legal activities against those who try to denounce them.
The Chair: I am going to have to keep you to responding to the question. I appreciate that you are very passionate about this and I appreciate hearing about it, but we will not hear the rest of the questions answered.
Senator Munson: I am under the impression that legislation does not cover the issues of how many committees a chief or a council member can sit on or how often they travel. Should the legislation include that?
Ms. Brown: I would feel better if it covered own-source revenues, but within reason. I do not think they want the government regulating everything. I think they want to have something to themselves.
If there were some policies in place, internal/external controls to ensure there was no impropriety, to me as a person of the Squamish First Nation, and I am sure others would agree, we would like some checks and balances. Right now we have none, so it is pretty much a free-for-all.
Senator Munson: Yesterday, Chief Twinn of the Sawridge First Nation seemed to imply that this bill is overkill. From his perspective, in listening to what he had to say about his annual $80,000 salary, which is public, the accountability to his First Nation is wide open and transparent. In terms of accountability, he is accountable to his nation and is prepared to go anywhere, probably even to your First Nation, to say how it works in Alberta. Why do we have this — I forget how he termed it — big brother, big White brother, big White father, White-father-knows-best kind of attitude, which continues to be seemingly out there?
I do not know how it got to this in your First Nation, but from his perspective it would be better if he and others he believes they are so accountable could bring those best practices to your First Nation and be done there without having White-father-knows-best involved in your livelihood and lives.
Is that an option, governing yourselves and being transparent yourselves and opening it up with best practices and ideas from another First Nation as opposed to having INAC telling you what to do and how to do it?
Ms. Brown: Currently the Squamish First Nation is under the Indian Act under its own custom. We do not have a constitution, which means we have no policies in place. Basically they make it up as they go along and it works in their favour whenever they want it to be in their favour.
It is like me asking for the salaries. Can I get the salaries and travelling honorariums? They say, no, it is none of your business. It comes out of our own-source revenues and we are not giving it to you. Then they will say go to INAC, and INAC will send us back to them. It is just back and forth.
I think for our people I would like to have checks and balances in place, and it needs to be regulated like everything else. There is no municipality, no district in Canada that is unregulated. If you go to the District of North Vancouver you can see all the finances. Everything is open. With mine it is not. I feel there needs to be some checks and balances in place at this time. I do not know that I want it to be long term, and perhaps there is another way to look at it, but I feel like Bill C-27 is a step in the right direction.
I think, though, it is the own-source revenues and the businesses that we are having trouble with because there is no accountability to the people. We do not know what businesses we are running or what the businesses do.
The other thing about the businesses is why are they not training and employing people? We have 3,600 members: Employ our people and create a community that is self-sustaining and self-sufficient. Do not hoard that money.
What they are doing now in my community is taking businesses from our people. They have taken two of the RV parks, which is community economic development, and saying we are taking this in the best interests of the nation. One was to build a development in Park Royal and the other to do whatever it is they feel is in the best interests of the people.
There are no checks and balances in place and I think that there needs to be something at this time. Maybe later, if it is regulated properly, they can work on a better relationship for business where that is concerned.
Senator Raine: Ms. Brown, you mentioned that you cannot get financial reports right now, yet you alluded to the finances several times. Have you been able to get some kind of financial information from your First Nation, even though it has been difficult?
Ms. Brown: Yes. I got finances off the AANDC website for the federal funds. In terms of own-source revenues, we do get finances but they are not the true figures.
The ones we have received are different from the ones provided to AANDC, and they are different from the ones that chief and council have. I received that anonymously from someone in the community. They are all different. They never match and it is never the same. When you are looking at services provided to the community, including the ones that come from the districts of West Vancouver and North Vancouver, like sewage and garbage, even the police service, we are paying those districts for those services, yet those are not in our finances. They are in the finances of the districts of North Vancouver and West Vancouver.
There are improprieties and nothing is matching. I do not feel like it is enough. They are providing the bare minimum, and it is not even meaningful.
Senator Raine: Mr. Benedict, if this legislation goes through and you then begin to receive a clear picture of the finances of your First Nation, do you think that will change how people elect their leadership? You said your chiefs and council have been elected three times in spite of what you consider to be impropriety.
Mr. Benedict: It will influence people. What will have to happen, once the legislation has been adopted, is that the grassroots be informed of what it means, how it applies and that they use it. I think we mentioned before how grassroots people tend not to get involved, or they do not question or participate out of fear of reprisals or losing services. That needs to change. They need to use the tools that are there. I see this as being a positive step, and it will have an influence once the people know how to use it.
Ms. Brown: I agree with Mr. Benedict: If you are able to provide the finances, it will provide some transparency and accountability where it lies. When you are in that position as an elected official, then you should behave as such and provide us with that information. The districts and municipalities do it all the time, and it is the same with the provincial and federal governments.
Senator Dyck: I know that some First Nation bands have leadership that could be called, perhaps, corrupt or abusive. My main difficulty with this bill is that I do not see how it will make those kinds of leaders comply. I think they will do the same thing. They will get the letter that says they must comply, and they will say, "So what. This bill does not contain any new tools, and if those tools do not work now to make me comply, then they will not make me comply just because I get a letter." How can you convince me that it will make them comply?
Mr. Benedict: What I believe is the response from Aboriginal Affairs and Northern Development Canada once they receive complaints under the bill. Once the legislation is in place, there will have to be teeth behind it. As far as I can understand, the bill will be federal legislation, which means that Aboriginal Affairs and Northern Development Canada will be the watchdog. I have submitted complaints on previous situations, and I did not receive support, any action or any implication. I was sent back to my band. This opens the door a crack. I do not believe this bill will do much either, but it depends on how it will be used and how it will be responded to on the other side.
Senator Dyck: On the other side, meaning?
Mr. Benedict: The federal government's response to our complaints.
Ms. Brown: I agree with Mr. Benedict. I agree that it will have an effect. I agree with you as well that not all those who have improprieties will comply. I do not believe it will change everything. However, even with that, if they did receive a letter requesting that information and if it is not provided, they will cut this or cut that. The court remedy is a little excessive. It needs to be just enough to have compliance, and if you have non-compliance, then there has to be some kind of consequence.
In terms of the consequences for not complying, this bill does not go far enough if there is impropriety within the nation. If you commit a crime, you do the time. That is what I was taught and that is what I live by. I follow that rule of law. Why should someone in an elected position be any different or be above that law? If you commit a crime, even white collar crime, you should be held accountable.
Senator Patterson: I am sure you are aware, and Ms. Brown indicated, that there is a provision in the bill for any person to apply to a court for an order requiring the council to carry out the duties under the section within a certain period, and there are consequences for not obeying a court order. Do you think that might be of some use in compelling people to honour the obligations under the statute?
Ms. Brown: I would hope so. I do not know if it would go far enough, though.
Mr. Benedict: Ms. Brown mentioned access to finances to bring people to court. Many of the grassroots people do not have the financial means to engage in litigation. I believe that under this specific law it would be the responsibility of Aboriginal Affairs and Northern Development Canada to use the legal provisions in the name of the citizens of the community.
If you permit me, I would like to touch on Senator Munson's comments about First Nations that say they are transparent and accountable. They ask why this bill should be adopted and why they should have more legislation. The question is: Will this legislation do anything for our grassroots citizens and the communities? In my paper I mention that there are First Nations that have adopted constitutions and legislation, including legislation on disclosure of financial information. However, most First Nations have not done this.
When we bring this up, even in my First Nation, I have pushed our council many times to set up committees to work on setting up our constitution and developing our financial legislation and regulations; but they do not do it. Recently, we had an amendment to the Indian Act in Bill C-3 that allowed an increase in First Nations membership. In my community, that translated to 313 new members within the past year and a half since the legislation took effect. We total about 2,400 band members in my community, and only 375 to 400 live on reserve. We have over 2,000 members off reserve, mostly in the United States, Ontario and all around Quebec. To include these individuals and get them involved in what is going on with the finances is very difficult. It would be up to the band to publicly say that these people are members of the band and are entitled as citizens to find out how we administer monies that belong to them. Instead, the bands close it off. They do not want to give this information out. We have a public website. I have requested that our website be open to our members off reserve so they could access the information on the band. I have been refused many times.
The Sawridge First Nation is a great exception and a great example. I wish that other First Nations would voluntarily do this. However, the legislation is on the table because they are not doing this voluntarily and there are too many cases of abuse.
Senator Meredith: What I am hearing from both of you is that you support this bill, but it does not go far enough. Clause 8(1) states:
A First Nation must publish the documents referred to in paragraphs 7(1)(a) to (d) on its Internet site, or cause those documents to be published on an Internet site, within 120 days after the end of each financial year.
Clause 8(3) states:
Publishing any document on an Internet site is insufficient to discharge the First Nation's duty to make copies of it available to its members who request that document.
You are saying that even though these clauses are in the bill, it is highly likely that the leadership will basically say they do not really care about what this legislation says; they are not going to comply, forcing the members to have to spend money from their own pockets to fight this in court in order to get that information.
Ms. Brown: We are already forced off the reserve to seek assistance from other areas, such as AANDC and our MPs and MLAs. It should not have to be that way.
Senator Meredith: What recommendations would you say need to be here in terms of enforcement of this legislation? That is the critical question. If we are studying this bill and it is going to go forth and pass but it does not have the remedies to justify the membership, then it is futile.
Mr. Benedict: The balancing act has to be analyzed between the rights to sovereignty and autonomy of a First Nation and the rights of its citizens for civil and human rights — that they are not abused, not misled and not lied to. That balancing act means again our great father, the federal government, coming to step in and to take over because the band is not doing its job.
When we look internationally at what is going on in the Middle East, we have countries that decide to get involved because the weaker countries and Third World countries need the help. You come in, you give them the tools that they need, the military support, and they start defending themselves.
Senator Raine: You have given us a good example of the challenges that are being faced by some First Nations across the country. Of course, we have seen that many First Nations across our country run their affairs in a very straightforward, transparent and accountable way for their citizens and they seem to be able to attract investment and move forward. If this legislation is enacted, do you think it will help those First Nations that are struggling?
Mr. Benedict: Yes, I do.
Ms. Brown: I would hope so.
Senator Ataullahjan: We heard from a previous witness that financial statements should be made available only to members of First Nations. Do you agree with that, or do you think they should be made available to the general public?
Mr. Benedict: I have specified in my document that we have to remove the shroud of secrecy. Why should it be secret? I do not see that anything should be hidden in finances if they are managed properly. No.
The Chair: I want to thank both of you for coming this evening. I appreciate your presentation. I know it is late. I appreciate your candour.
I want to thank all the members of the committee as well.
(The committee adjourned.)