National Post (National Edition)
Obscure committee targets funding coup
Would transform how Ottawa transfers money
OTTAWA • A small committee of federal politicians and indigenous leaders is quietly figuring out how to pull off one of the most radical changes to the way Canada deals with its First Nations since the passage of The Indian Act.
The committee’s objective is to transform the means by which Ottawa transfers billions of dollars a year to the country’s 634 First nations.
If it works, it could be the single most significant thing the Trudeau government will have done for its oft-promised “reset” of the relationship between the Crown and First Nations.
“This is going to be a monumental change in terms of what happens in Canada,” Perry Bellegarde, the national chief of the Assembly of the First Nations, said in an interview. “People are sometimes wary of change but I think this will be in the best interests of Canada as a whole.”
The committee’s work also promises to transform a bureaucracy long set in the way it delivers services, ways recently criticized by Auditor General Michael Ferguson for being too concerned with itself and indifferent to improving the lives of its citizens.
But First Nations themselves may also have much work to do to prepare for that new future.
A National Post analysis of the 2014-2015 financial statements filed by 559 First Nations that complied with the First Nations Financial Transparency Act found that 172 posted financial statements that violated generally accepted public sector accounting standards.
Some violations were relatively minor while others were serious enough that the band’s auditors were unable to provide an opinion about the accuracy of the financial statement.
The Trudeau government suspended the First Nations Financial Transparency Act for the 2015-16 financial year so it is unclear how some First Nations governments will be compelled to improve their financial reporting and controls.
The catalyst for changes in governance and accountability by both the Crown and First Nations could be this little-known committee, known as the First NationsCanada Joint Committee on the Fiscal Relationship, created by a memorandum of understanding signed on July 13 by the Assembly of First Nations (AFN) and the Department of Indigenous and Northern Affairs Canada (INAC).
The committee consists of just four individuals. Bellegarde and David Jimmie, chief of the Squiala First Nation in British Columbia, represent the AFN.
Indigenous Affairs Minister Carolyn Bennett has been a constant member for the government but, despite repeated requests last week, her department could not identify the other government member.
The AFN is hopeful it will be a “senior person” from either the department of finance or the Treasury Board.
At its last meeting, on Nov. 24, Treasury Board President Scott Brison sat on the government’s side but it is not clear if Brison is to be a regular member.
The committee has also brought in experts for advice. Don Drummond, a former deputy minister of finance, joined a recent meeting of the committee. Ferguson, the auditor general, also joined a meeting.
The committee next meets on Feb. 8.
Bennett’s department failed to answer questions last week about the committee’s work, but the AFN says its objectives are threefold:
To find a way to provide each First Nation with sufficient funding;
To make that funding predictable so that a First Nation can make more effective allocation of its resources;
And to build appropriate accountability mechanisms for both Canada and First Nations. The current system, both sides agree, is deficient in all three of those ways.
For example, First Nations have had annual increases in core funding from INAC frozen at two per cent for 20 years even though population growth has been running higher than that. Justin Trudeau, a month after he was sworn in as prime minister, vowed to lift that funding cap “immediately” in his first budget.
That funding cap, though, has not yet been lifted and, at last week’s annual assembly of the AFN in Gatineau, Que., several chiefs expressed frustration that that promise had not been fulfilled.
One of Bellegarde’s chief objectives at last week’s meeting seemed to be managing expectations of frustrated chiefs, trying to show progress while explaining the complexities in what seems like an otherwise straightforward promise from the federal government.
The committee has given itself until Dec. 31, 2017 to complete its work.
That work is expected to create a template for individual First Nations to negotiate a new fiscal framework with the federal government. So, instead of dealing with as many as five federal government departments — each of which may have two, three or more individual funding programs — the First Nation would get a single annual transfer that would represent the entire federal contribution to its operating and capital programs.
To do so, the federal government has to figure out a way for INAC, Health Canada, Public Safety Canada, Employment and Social Development Canada and other agencies to work as a one-stop shop for First Nations. Re-organizing Ottawa’s bureaucratic plumbing makes this a tall order.