First Nation suing Ottawa for $30M
Community claims feds and third-party managers breached their duty
JOANNA SMITH OTTAWA— A Quebec aboriginal community is suing the federal government and two third-party managers for $30 million in damages, claiming they have suffered irreparable harm while being kept in the dark about their financial situation.
Algonquins of Barriere Lake First Nation is one of 28 communities that have yet to submit its financial information to be posted online as required by the First Nations Financial Transparency Act, which resulted in Ottawa withholding funding for non-essential services as a sanction.
The community argues, in a statement of claim filed at the Ontario Superior Court in Toronto last Friday, it was unable to comply because the federal government and Hartel Financial Management Corp., which has been its third-party manager since April 1, 2013, has not provided the band council with all the information it would need to do so.
“Accountability and transparency is a two-way process,” Tony Wawatie, interim director-general of Barriere Lake, in a phone interview Tuesday.
The office of Aboriginal Affairs Minister Bernard Valcourt disputed that part of the claim.
“It is our understanding that the First Nation has been provided with all the necessary documents to prepare their audited financial statements. As this matter is before the courts, it would be inappropriate to comment further,” said the statement emailed by his director of communications, Andrea Richer.
The lawsuit names the federal government, Hartel and its former third-party manager, BDO Canada, which held the contract from March 1, 2010 to March 31, 2013 as defendants in the lawsuit.
The statement of claim alleges breach of fiduciary duty, breach of contract, interference with economic relations and negligent misrepresentation and also asks for an injunction from the court to end the third-party management agreement between Hartel and Aboriginal Affairs.
None of the allegations has been tested in court.
The statement of claim notes the Aboriginal Affairs department first appointed a third-party manager to oversee its spending in 2006 and that third-party managers have since collected approximately $6 million in fees over that time period.
“These are monies that would otherwise be payable to Barriere Lake, for the benefit of the community,” says the statement of claim, which notes the community has a housing shortage and high unemployment.
A lawyer for Hartel said it was too early to comment and a lawyer representing BDO did not respond to a telephone message Tuesday.