Thank you to the members of the committee for allowing me to appear again, this time on Bill . As was stated, I am the regional chief for British Columbia and the national portfolio holder for first nations governance at the Assembly of First Nations. I am glad to be joined here today by Karen Campbell, who I work closely with within the assembly.
As I have said here before, and as the committee is well aware, I think first nations are in an exciting period of transition and are moving towards increased autonomy and self-government. This is good for first nations and good for Canada.
Increased autonomy is occurring in those nations that are considering and supporting the foundations of good governance, in order to transition our nations from essentially administering federal programs and services on behalf of Canada, or self-administration under the Indian Act, to self-government, with appropriate accountability to our citizens.
There is no issue that the governing bodies of our nations must be transparent and accountable. The vast majority are, of course, and they continue to demonstrate this to their citizens. In December 2010, the chiefs, in assembly, passed a resolution affirming the commitment to transparency and accountability, in part in response to a private member's bill, Bill .
Chiefs were clear in their assertion that these proposed measures—in Bill —are both heavy-handed and unnecessary, and they suggest that first nations governments are corrupt and our leaders are not transparent and consequently need to be regulated by Ottawa. It is not surprising that many of our chiefs have resented this approach and are turning the lens back on Canada, suggesting that it is Canada that needs to develop more stringent accountability frameworks for their governing bodies, that it is Canada that needs to be held more accountable for the treatment of first nations.
However, rather than getting into an unproductive debate on whose government is more accountable to those whom they are supposed to serve, our collective task is to ensure that all systems of government in Canada are accountable and are meeting certain standards, while understanding that there is more than one way to skin the proverbial accountability cat and, with respect to our nations, to ensure appropriate political, legal, and financial accountability as part of nation-building or rebuilding.
The bigger question before you today is really not about accountability at all; rather, it's about who should be responsible for determining the rules that apply to our governments and our governing bodies. The simple answer is that our nation should be; however, the answer to this question is more complicated, given the evolving relationship in Canada between first nations and the crown under the current Indian Act reality.
On Monday, this committee heard from the minister of AANDC, and my MP, , who was asked if he thought it was appropriate for the minister to be telling first nations how to be accountable to their own citizens. It was pointed out to him that Canada does not do this for other provinces, so why does Canada do it for first nations? In response, the minister suggested that as a senior government, it was the government's responsibility, but added that when a first nation is self-governing, it is different—first nations control accountability themselves.
Herein lies the dilemma for you as lawmakers. Whether it be with respect to financial transparency and accountability, matrimonial property, or safe drinking water, and so on, what rules and laws—if any—should you be making for our people until such time as our nations are once again self-governing? Also, if you do legislate, how do you ensure that such laws are appropriate, have our consent, and support the long-term vision of self-government and do not in fact hinder it?
It is troubling during this period of transition, as we move away from governance under the Indian Act, that the federal government seems to increasingly want to design our governance for us, in spite of the fundamental need for our nations to undertake this work ourselves in order for it to be legitimate. In my own community of We Wai Kai on northern Vancouver Island, when Bill was introduced about a year and a half ago, we had a discussion about it. We had discussions about the piece of legislation addressing only one aspect of accountability. It really highlighted the need for my own community to take back control of the agenda and to establish our own laws with respect to financial administration and accountability to our citizens.
From my work in my own community as a council member, it was clear that it was not well understood among our citizens that in the absence of our nations taking control of our own financial administration and establishing our own rules, there is very little, if anything, governing the financial administration of our nations. There is nothing in the Indian Act, as you know, that speaks to first nations government budgeting processes and accountability and/or reporting to our members on how we invest, borrow, and use our moneys and so on. For sure, when our communities sign funding agreements with Canada, we contractually agree to audits, reports, and so forth, but there is nothing above this or nothing governing our own sources of revenue unless we take control.
As a result of this conversation in my community, we chose to develop a financial administration law, or FAL, under the first nations fiscal management act. Our law is as directed and ratified by our nations, it is far more comprehensive than Bill , and, more to the point, it is legitimate in the eyes of our people. Similarly, for Indian Act bands that have implemented sectoral governance arrangements, the accountability framework is built into those arrangements.
Moving further along the continuum of governance reform, for those former Indian Act bands that are already self-governing, the accountability framework is typically built into the nation's laws, as developed and ultimately approved by their citizens. The accountability framework varies from nation to nation depending on a nation's conventions, types of government structures, and the range of jurisdictions exercised.
What we really need to do is increase the options or the tools for our nations to develop their own governance, including accountability frameworks, so they can build their own future within Canada rather than being legislated from above. We need to speed up this process so that where a nation is ready, willing, and able to proceed with reform, it can move, and Canada does not act as gatekeeper.
If Canada insists on pursuing and passing Bill , notwithstanding the strong objections of many first nations leaders, there are some specific questions that must be answered and responses that are needed for problems that have been identified with it. On this note, it is unacceptable that there have not been any consultations—that I am aware of—with our first nations on this bill.
First, I would like to reiterate the commitment to accountability and transparency demonstrated by first nations. Most of the accountability measures in the bill are similar to those found in any first nations constitution or its laws. In fact, first nations are already required to report on matters covered in the bill, through contribution agreements with the federal government. Whether an Indian Act band or not, our nations follow the handbook respecting public sector accounting, as prepared by the Canadian Institute of Chartered Accountants.
This does not negate the fact that there are serious issues with how this bill has been drafted, specifically, one, in the treatment of government business enterprises; two, in disclosure to non-members; three, on enforcement of provisions; and four, on conflict with other statutes and first nations law-making authorities.
First, while public sector accounting standards do deal with government business enterprises, Bill seems to go further by adding definitions of “consolidated financial statements” and “entity”, as well as its own interpretation of what it means for an entity to be controlled by a first nations government under subclause 2(2). It is not clear what the intention is here. Why not just make the public sector accounting standards apply? We would like clarity, and we need to ensure that this bill does not inappropriately modify the rules that currently apply to other governments in Canada with respect to government business enterprises
Second, a bigger but related issue for many of our first nations is the proposed new disclosure requirements, which would require the audited consolidated financial statements of each first nation to be made public by posting them on a website. This is not the case today unless a nation has chosen to do so. There is, of course, no concern where those receiving the audited consolidated financial statements are our citizens. This is, however, not the case where there is a requirement for public dissemination.
This is a material departure from what was proposed in Bill and the precedent set under the first nations fiscal management act. For some first nations, and in particular those with significant government business enterprises, this poses a number of concerns.
As we understand, Chief Darcy Bear will be here to speak about those concerns and potential amendments to this bill.
Third—and I'm getting close to finishing—with respect to enforcement, the provisions seem costly, and it's mostly unnecessary legal proceedings wherein the minister is authorized to apply to superior court for enforcement. Within their own accountability frameworks, first nations use different enforcement mechanisms, including the first nations law that my community has developed. These include calling community meetings, internal appeal processes or other alternative dispute mechanisms, as well as, in some cases, recall provisions for officials who breach a nation's law. Where outside courts are used, our nations may choose to use a superior court. In some cases, it is a provincial court or the Federal Court.
Fourth, with respect to the conflict of the laws, the bill correctly does not apply to first nations that are self-governing. However, it appears, perhaps unintentionally, that it does apply to first nations with financial administration laws made under the first nations fiscal management act. To have Bill apply will create issues if there is ever a conflict between a FAL and the bill. Politically, it also sends the wrong message to a first nation such as my own, which has developed a financial administration law, that it will still be regulated by Her Majesty. Nations that have enacted FALs or land codes need to be recognized and respected for the hard work they have done, which represents a level of community engagement resulting in political legitimacy of their institutions and their laws. It should be made clear what happens in the event of a conflict between the proposed legislation and any other federal legislation or laws of a first nation developed in respect of the sectoral governance initiative.
Finally, I want to remind the committee of work that was conducted by the AFN and the Government of Canada in 2005, the “Accountability for Results” initiative. This led to promising work that was halted in 2006. As part of this initiative, the AFN and Canada agreed to a number of common principles for furthering the accountability relationship. These were: one, the primary accountability is to our citizens; two, for policies, programs, and services to first nations, the primary objective is to improve results for first nations citizens; three, accountability is a shared responsibility, a mutual responsibility; four, there is a shared vision of adopting and adapting the five principles for accountability of the Auditor General of Canada as part of a collaborative process to develop a new model accountability for results that support the aspirations of communities while assuring everyone has effective management of resources.
In light of the reviewed commitments for actions stemming from January's crown-first nations gathering, particularly the review of financial arrangements as part of pursuing a renewed relationship, there is an opportunity to revisit and move forward on these principles as we support our nations. The solutions that are working are being found by working together, by creating the space and tools for communities to rebuild and to move beyond the Indian Act, to decolonize, and to rebuild government.
I would urge you to pursue approaches that truly support first nations governments. One proposal, as directed by our chiefs, is to create an office of the first nations auditor general.
I would encourage you to continue to visit first nations communities directly to understand how their governments are struggling with and addressing the constraints under the Indian Act, and how those communities are moving beyond it and are accomplishing this by taking a classic community development approach. They are the ones who have the solutions, and I urge you to consider how you can support those mechanisms. Instead of further sandbagging or shoring up the archaic and inadequate framework that is the Indian Act system of governance, such an approach lets us build a bridge together and support first nations in the work towards self-determination and what I hope is our collective vision for Canada.
Thank you so much, Chris, and my thanks to the committee.
I'm here to speak on behalf of my community, Whitecap Dakota First Nation. I'm not here to speak on behalf of any other first nation, just so that's clear. I'm also going to share our experience, as it relates to the Whitecap Dakota First Nation.
I'm going to have to take you back in time a little bit, take you back to November of 1991, when I was first elected by my community. When I was first elected, our community didn't have a dime in the bank. We had a large overdraft and a stack of payables. Back then I was 23 years old. As a young man looking at our community, I had no clue of the financial state of affairs of our community, because our chief and council were not sharing financial information with the members. That very first day I was elected there were two choices. The first choice: “Who needs this? I may as well walk away and forget about it.” But as leaders, as you all know, as you are elected, when there are challenges, we have to accept those challenges, find solutions, and go forward.
The first thing we had to do was ascertain the amount of debt we actually had and how much of this debt was real. Then we had to create a financial management plan and approach a financial institution for debt consolidation. But at the time we were on the brink of having a third-party manager come in to our community. One of the biggest problems for first nations is a lack of professional capacity, because of the way our communities are funded, through band support funding. A lot of our communities are funded and we have financial clerks. But a financial clerk cannot keep pace with the onerous reporting requirements of the federal government.
So I convinced the federal government to do something different: let's hire a professional accountant for Whitecap; in year one you pay 100%; in year two, you pay 75%, we pay 25%; in year three, we go 50-50; in year four, we'll pay 75%, you pay 25%; and in year five we're going to take over the position. They approved that and the rest is history. Third-party managers don't want to work themselves out of a job. They don't want to see the first nations build any capacity. Therefore, the model that we created back then worked for us.
The biggest key to moving forward in any kind of development is to get your financial house in order. That's not just for first nations communities; that's for any organization, any business. If you don't have your financial house in order, you don't have any credibility.
I can tell you today that we've had 21 consecutive unqualified audits. We are in the black. We can share our audit with anyone. We share it with our community members, we can share it with the financial institutions, and we can share it with businesses. We can create partnerships, because they have the confidence that Whitecap has a good financial track record. That's very important, if you want to talk about nation-building. If we don't have that credibility, how can we move forward as a nation?
There are many challenges that we face as first nations communities. Look at the Indian Act itself. The Indian Act is 136 years of oppression. It was never a piece of legislation that was created for us to have hope and opportunity and be a part of the economy. It was meant to segregate us from society, keep us out of sight and out of mind. I say to the business community, if you look at the Indian Act and apply it from a macro perspective to all of Canada, how far behind would our country be compared with the world economy? I say that seriously.
When you go back to the perspective of our first nations communities—having this piece of legislation put on our lands and segregating us from society and not being part of the economy—it has created so many challenges going forward. If you look at economic development, the key is real estate development. We didn't have a land tenure structure and we couldn't move at the speed of business. Under the Indian Act, if we wanted to have a leasehold interest, we had to do a land surrender. From the land surrender we had to create a head lease and there had to be ministerial approval. But this new legislation, the First Nations Land Management Act, has enabled us to self-govern our lands, open our doors for business, create a land code that's ratified by our people, and move at the speed of business.
When people are looking at the business environment, they also are going to want to look at the financial record of that community. It's no different from an investor going around the world and looking at different countries and asking, “Am I going to invest there? Is there leadership, stability? What kind of governance structure do they have? What is their financial track record, etc.? What kinds of laws do they have?” It's a similar thing when you're investing on reserve.
Since we've introduced the First Nations Land Management Act, and of course going forward with our financial track record, we've been able to move from a 70% unemployment rate to 4.1%. We've had over $100 million in investment to date. We recently announced a hotel project that will be going into our community, and it's going to create another 150 jobs. It'll be open in the summer of 2014, so if you're ever travelling and you want to come out to our community, we'll have a place for you to stay. Adding those 150 jobs takes us up to 830 jobs.
We are also looking at building a business park, and with that business park, the manufacturing sector.... Working with the local businesses, we did a feasibility study. We have about 30 businesses that actually want to relocate to Whitecap. Again, that's another 300 to 400 jobs there. So within the next five years we'll have over a thousand jobs.
We continue to move forward. It is because of our financial track record that we're moving forward. If we were not accountable to our people or willing to share our audits and our financial standing with our partners, we wouldn't be able to move forward.
I'll give you an example. Rob Clarke's first nation, Muskeg Lake, is one of the partners on our golf course. When we were looking at that project we looked at selecting first nations that also had comparable strong financial track records to ours, and the first nation we recognized was the Muskeg Lake First Nation, which actually has land in Saskatoon. It had a strong financial track record going forward, over 500 employees on their land, and extensive experience in economic development, so we wanted to have them as a partner.
The other partner we talked with at the time was Chief Harry Cook of the Lac La Ronge Indian Band, who owns Kitsaki Development Corp. Back then they were doing over $75 million worth of business, and they're doing $100 million now. It's another strong community.
So together, collectively, we developed the Dakota Dunes Golf Links. When we were doing our business plan and our pro forma income statements, we had originally expected a loss in year one, the second year we were going to break even, and in year three we were going to be profitable. We have been profitable since day one, and this is year seven.
We were originally planning on paying off our debt in 12 years; we have done it in six years. Again, that's about working together with other strong first nations that have the same principles of accountability to their membership, and that's what this is about.
We certainly do support the bill. Originally, when it was rolled out by Kelly, it was Bill C-575. We have no issue as far as being accountable to our members. We do share our audit with our members annually. Also, when it comes to the salaries of the chief and council, I'm going to tell you one thing. About six years ago we actually went on an exercise, again in partnership with the federal government, of creating a salary grid, not only for our council but for all of our employees and staff. If you look at the demographics in Canada, you have an aging workforce and everybody is competing for skilled human resources. We want to ensure that we're paying our staff appropriately, so that people aren't poaching them—that's what happens if you're not paying your staff appropriately; people will come in and offer them more than you're paying and they'll take them away.
Fortunately, and this is because of our financial track record, we have been able to generate a lot of our own-source revenues, so we can top up salaries and make sure we can be competitive. A good example would be water treatment operators. They have to be certified. In order to hire a certified operator.... Right now, Aboriginal Affairs only issues $25,000. You can't pay anybody $25,000 and get a certified operator. The going rate in Saskatchewan, if you look at SaskWater or other municipalities, is a minimum of $50,000 plus benefits. We have been able to top that up, so we are able to ensure that our certified water treatment plant operators stay in our community.
These are some of the things that our financial track record has enabled us to do.
As far as the salaries of the chief and council, we actually have a chief and council compensation commission in our community that's made up of our membership. They set our salaries; we don't set our salaries.
One of the things that we do not agree with in regard to the bill itself, the current wording, is that we don't want it to scare business away. We don't want this bill to have a different set of accounting standards from the private sector off reserve.
We have recommended some wording changes to make sure this bill does not scare businesses from first nations lands, because that's not what this bill should be about. This bill should certainly be about accountability and transparency, but it shouldn't be a whole new set of accounting rules for first nations communities or for the private sector. If they're going to come on to our reserve, they should be treated as if they were off reserve, using generally accepted accounting principles. That's very important.
Similarly, in the bill it talks about remuneration and expenses, and it ties them together. Again, that is not fair. It's inconsistent with the government's definition regarding remuneration, where your flights.... If you fly around, that's not your salary. Why would they want to incorporate that as part of our salary? That has to be separated, and we made that very clear in the recommendations.
I believe Murray has given the clerk some of the recommendations we're making to separate remuneration from expenses, because they're not the same.
If you're staying in a hotel, or if you're flying, or you have other transportation costs, they shouldn't be considered as part of your salary. Certainly, it's not for any of you. You don't have to experience that, so why would you impose that on first nations leaders? That certainly has to be corrected.
With regard to the Income Tax Act, when it comes to flights, transportation, meeting expenses, and so on, those expenses are not considered as part of your personal salary under the Income Tax Act. Again, that's another act of the federal government. You have to be consistent, when you're moving bills forward, that you're also following your own rules when it comes to personal income under the Income Tax Act and when you're following generally accepted accounting principles. That's the only way we're going to be able to move this bill forward, and that's the only way you're going to get support from Whitecap.
Certainly we're supportive of the actual principle of accountability and transparency, but we want to make sure that this bill is not going to scare away businesses from our community. You have the private sector off reserve and they have certain reporting requirements, but if they go on reserve and they have to disclose their competitive information to all of their competitors, they're going to say they don't want to go on reserve, that it's not right for them. We need to make sure it doesn't happen to the businesses coming to Whitecap.
We did support the original bill. The only issues we had, as I said, were about remuneration and expenses, as well as the level playing field for businesses.
Those are my opening comments.