There are four main players involved with the Financial Transparency Act: Aboriginal Affairs and Northern Development Canada (and its Minister), First Nations leaders, First Nations members, and the general public. The Act has both unified all four in the name of accountability and financial transparency, and it has also divided AANDC and leaders, leaders and band members, and band members and AANDC. The general public, whom the Act is supposed to benefit, often understands the least of the four about the complicated situation.
Part 1 is available here.
Hardball or blackmail?
2014 saw more political and media attention for the Act. In November 2014, the Canadian Taxpayers Federation published a release stating 509 of the 582 bands in Canada had disclosed the required financial information.
“It’s unfortunate that some chiefs and councillors are holding out and putting their desire to keep their pay details hidden ahead of the well-being of the people living in their communities,” stated Colin Craig of the CTF. “We would like the federal government to indicate which bands have refused to disclose their information versus bands that are disorganized. And we expect appropriate action to be taken.”
The release mentioned two chiefs who respectively were paid $800,000 and $200,000.
The Assembly of First Nations published a release in December. It stated the median salary for First Nations chiefs across Canada was just under $65,000, and over 88 per cent of First Nation chiefs had salaries below $100,000.
In spite of the wording changes from the Bill to the Act, accusations of discrimination and double standards continued.
Shiri Pasternak of Ryerson University wrote that since federal transfer payments are the main source of income for programs and services for many First Nations, pulling funding can result in “starve-or-submit” scenarios.
“What Canadians should know is that anger over the First Nations Financial Transparency Act is not about chiefs afraid to get their hands caught in a cookie jar. Rather, this piece of legislation is only the tip of the iceberg in a pattern of financial abuse by the federal government.”
Pasternak wrote about Thunderchild First Nation being put under third-party management for not signing a Contribution Funding Agreement for 2014-15.
According to a backgrounder on the Thunderchild website, “Contribution Funding Agreements are a means by which the federal government, through Indian and Northern Affairs Canada, transfers funds to First Nations for programs and services within a legal framework. Without a CFA, INAC is unable to transfer funds.”
The backgrounder states Thunderchild leadership was unhappy with the CFA being amended by AANDC without consent from the First Nation year after year. Wapass also stated in an affidavit that he was concerned, in 2013, with unilateral decision-making without consultation, wider discretion being given to the Minister, and “a wholesale agreement on future Federal Acts that have not come into effect.”
Rather than renegotiating terms of the 2014-15 CFA, Thunderchild didn’t sign it. Consequences for not signing the CFA included AANDC withholding certain funds, and third-party management.
Third-party management is, according to an INAC backgrounder, “a temporary measure to ensure the continued delivery of programs and services to community members, and is applied by the department only as a last resort.”
The third-party manager is an external accountant that bands must pay for, often for hundreds of thousands of dollars a year, to make financial decisions, including paying down debt.
Pasternak describes third-party management as the “most advanced stage of an intervention policy designed to help bands manage and administer funds when they are at risk of deficit.”
Pasternak said imposing third-party management onto First Nations has been used in certain cases for “fiscal coercion and blackmail.”
Onion Lake Cree Nation, headed by Chief Wallace Fox, also didn’t sign a CFA for 2014-15.
Meanwhile, as 2014 progressed, First Nations were sent reminders by Minister of Aboriginal Affairs and Northern Development Bernard Valcourt to release their financial information in accordance with the Financial Transparency Act. Thunderchild and Onion Lake refused.
According to a backgrounder explaining the situation to Thunderchild people, Thunderchild received a letter from Aboriginal Affairs (letters were sent out starting on Oct. 27, 2014) that failing to comply with the Act would result in the government requiring First Nations to develop an action plan, names of non-compliant First Nations would be published online, and funding, including for non-essential and essential services, would be withheld. The former was to be withheld on Nov. 26, 2014, while the latter was to be on Dec. 12.
Essential services, according to the Thunderchild backgrounder, include things such as education, health, water, sanitation, Child and Family Services, and housing. Non-essential services include band support funding, band employee benefits, band-based capital, as well as others.
A Nov. 25, 2014 Toronto Star headline stated Ottawa was playing hardball.
On Nov. 26, Valcourt publicly said that funding for non-essential services would be withheld. Funding for essential services would not be withheld.
Lawsuits resulted nonetheless.
On Nov. 26, Onion Lake began legal action against the Government of Canada “for damages and injunctive reliefs against the Crown based on allegations of Charter based discrimination, failure to consult, a breach of fiduciary duties and a breach of promises made by the Crown in Treaty 6,” Dr. Judith Sayers writes. The legal action also challenged the Act’s constitutionality.
“What they’re after is to divide our people, to create that dissension amongst our people,” Fox said at a press conference that day in Edmonton.
He offered a brief history of the government failing to live up to treaty obligations.
Fox said salaries of Onion Lake’s administration were disclosed through the band’s budget process in which they were presented to members, and administration didn’t receive federal government contribution monies for chief and council’s salaries.
On Dec. 3, 2014, Thunderchild was in court challenging third-party management. Fox was in attendance.
On Dec. 8, 2014, Valcourt released a statement saying “legal action is underway for five First Nation governments that indicated their intention not to comply with the Act,” including Thunderchild and Onion Lake.
At a press conference on Dec. 9, 2014, at an Assembly of First Nations meeting in Winnipeg, First Nations leaders spoke.
“Both my membership on and off reserve know exactly what I make as a chief,” said Wapass, adding Thunderchild uses own-source revenue in paying band leadership’s salaries and travel. Wapass said Thunderchild produces an annual report which can be accessed on a members-only page on its website.
Pam Palmater of Ryerson University also spoke. She said Stephen Harper’s “greatest weapon is if he can turn First Nations citizens against their own leaders.
“You take all the power away from the leaders, you make the leaders stand out there by themselves and a single chief cannot win this war.”
Palmater called the possibility of withholding such funding a “historic move.”
In February 2015, Judge George R. Locke ruled the application for judicial review (which Thunderchild was seeking) regarding the First Nation being put under third-party management, should be dismissed. Thunderchild filed an appeal March 19, 2015.
In August 2015, Harper set the federal election date to be Oct. 19.
The 2014-15 financial statements from First Nations were due in late August. Media attention regarding the Act increased again.
Earlier that month, a hearing took place in Saskatoon in which the Crown and the First Nations argued their cases regarding legal action toward the five First Nations. The five First Nations argued for “a stay [a halt] to the government’s legal proceedings while they challenged the Act as unconstitutional and in violation of treaty and Aboriginal rights,” according to lawyer Rangi Jeerakithil.
In October 2015, Justice Robert Barnes “ordered that Canada must end its legal efforts to make the First Nations disclose their finances under the Act, pending the final outcome of their challenge to the Act.”
The Liberals won a majority government shortly before the decision. On Dec. 15, 2015, new Minister of Indigenous and Northern Affairs Carolyn Bennett issued a statement in which court actions by the department against First Nations that haven’t complied with the Act would be suspended, and funding withheld under the Act would be reinstated.
The non-essential funds withheld by the government of May 14, 2015, according to an affadavit by Fox, was $1,034,018. The funds were for employee band benefits for 800+ employees, and in Sayers’ words, “disrupted funding for the occupation of 15 houses on the reserve.”
Thunderchild, meanwhile, was no longer under third-party management as of 2016.
The Act remains law
However, courts have not ruled on the constitutionality of the Act, and if it violated Aboriginal and treaty rights.
In 2016, Charmaine Stick of Onion Lake Cree Nation, along with the CTF, launched a court application to get Onion Lake to reveal financial information according to the Act’s requirements. Stick was on a hunger strike in 2014, protesting Fox’s re-election as chief, and financial transparency. Stick is related to Fox.
Onion Lake sought a stay.
A decision was reached in summer 2017. Justice B.A. Barrington-Foote ruled Onion Lake had 30 days to disclose financial information.
According to Barrington-Foote’s decision, Onion Lake permitted Stick to read the consolidated financial statements at the band office. But “it has repeatedly refused to deliver copies of the documents specified in s. 7(1) of the Act to her, and has failed to post those documents on the internet.”
Fox had said in the 2014 press conference Onion Lake administrative staff overlooked band members who examined the documents in case the band members had questions, because the information is complicated.
In the most recent case, Onion Lake didn’t argue “on constitutional grounds, but applied for a stay on the basis that this proceeding raises issues that are already before the Federal Court,” wrote lawyer Scott Kerwin.
Barrington-Foote also noted the progress regarding the case to determine if the Act was unconstitutional and in violation of treaty and Aboriginal rights.
“Despite the passage of almost two and a half years since the action was commenced, discoveries have not yet been scheduled.”
Onion Lake appealed Barrington-Foote’s ruling.
On March 26, 2018, a decision was reached by the Court of Appeal for Saskatchewan in which Onion Lake was ordered to give copies of its audited consolidated financial statements and the schedule of remuneration of the chiefs and councillors, to Charmaine Stick.
In a Dec. 2017 document on AANDC’s website called “A New Approach: Co-Development of a New Fiscal Relationship between Canada and First Nations,” plans are underway to “co‐develop an approach to repeal the First Nations Financial Transparency Act in 2018 and replace it with a co‐developed mutual accountability framework supported by First Nations Institutions‐led audit and statistical functions.”
2018
Harrison Thunderchild said he was met with skepticism from band members when they found out he was working with the Canadian Taxpayers Federation.
“‘It’s the taxpayer federation, what are you doing with them?’” Thunderchild said.
Thunderchild said it’s a myth First Nations people don’t pay taxes.
“We’re all taxpayers,” he said, adding “we’re all treaty people.”
Todd McKay of the CTF said First Nations must be accountable with the community’s money.
He said the CTF filed an access to information request to see what funding was withheld. He said the withheld funds were “a very small part of the overall situation.
“Certainly there was a lot of fear-mongering that it might be associated with really important priorities like health and education,” McKay said, adding recreation to the list.
“It wasn’t, it was administrative money. It was a tiny fraction of the overall funding that went to these First Nations, and ultimately what they needed to do was show their own band members what they were doing with the money.”
Regarding AANDC stating essential and non-essential funding would be withheld in October and November 2014, and Valcourt saying on Nov. 26 only non-essential funding would be withheld, McKay said:
“From my point of view it’s always interesting to see what politicians say. It’s much more interesting to see the documents as to what they do.
“When you look at the actual documents, nothing in the neighbourhood of essential was touched, and again it comes back to the basic, fundamental premise, why not open the books? If these bands were concerned about the welfare of their people they should be concerned about providing transparency to ensure the money is going where it needs to go. So it really does come back to them.”
The possibility of withholding funding remains law.
“You have to look at everything on a case by case basis,” McKay said. “Even now, when the Trudeau government refuses to enforce the law, or even respect First Nations traditions, still the vast majority of bands are complying because most bands have nothing to hide. They’re happy to provide that disclosure.”
McKay said the debate surrounding the Act is interesting.
“But the reality is the Transparency Act provides the legal mechanism for people like Charmaine Stick [and Harrison Thunderchild] to ensure they have the same rights to know what’s going on with the community’s money just like you and I have when we Google up how much the mayor is getting paid.”
Thunderchild said the respect he received from the CTF was second to none, and since going public with his concerns, has received support from First Nations members and leaders across Canada, along with the general public in Saskatoon.
“If you believe in something, stand tall, shoulders back, chest out and be proud of what you believe in and stand steadfast, do not compromise,” Thunderchild said, adding he grew from the experience.
Thunderchild said posting financial information to the internet should be done using common sense.
“We follow law,” Thunderchild said. “Sure there’s some common sense stuff you can’t release [if] you’re in a competitive investment situation, […], and you don’t want your competitors to find the specifics of your approaches and that. There you draw a line. You can’t just go and post everything that comes to you on that. Sometimes you hurt the situation.”
After several inquiries to Thunderchild First Nation and Onion Lake Cree Nation, the chiefs did not comment. The online version of the story will be updated if the News-Optimist receives responses.
