The federal government spends over $32 billion annually on Indigenous issues across Canada, yet most First Nations today are failing to comply with the First Nations Financial Transparency Act, passed in 2013. This is not surprising, as the Justin Trudeau government stopped enforcing the law when it came to power in 2015.
The legislation requires chiefs and councillors to publish annual audited financial statements, including their compensation and expenses, to ensure taxpayer money is used properly. It gives the government discretionary power to withhold or terminate payments to bands that fail to comply.
Compliance Has Plummeted
Currently, 59% of First Nations groups receiving federal funding are not completing the required financial audits, with virtually no consequences. A decade ago, compliance was nearly 100%.
Tom Flanagan, co-author of a Fraser Institute report released Friday, stated: "Financial transparency and accountability are paramount in any government to ensure honesty, which is exactly what the act was meant to achieve within First Nation communities."
Government's Explanation
The Liberal government says it has opted for "a nation-to-nation relationship based on respect, cooperation and the recognition of rights" with the aim of "supporting First Nations-led accountability, rather than government-imposed requirements." This despite numerous cases of band members seeking information on band finances due to suspected corruption.
In the real world, the idea that recipients of taxpayer money should be free from legal requirements to publicly report how they use it is another example of federal dysfunction in dealing with First Nations.
Proposed Solution
Flanagan suggests amending the legislation through a process led by First Nations people so that "it better suits the level of increased investment and funding First Nations of Canada have been receiving from government." Under the Liberals, however, chances of that happening are slim.
