Aboriginal Advancement: Lost in Accountability

Increasing the demands for ever more reporting only undermines the legitimacy of First Nations leaders
Aboriginal Advancement: Lost in Accountability

By Russell A. Evans and Steven E. Salterio

It is a small Canadian town, somewhat off the beaten path, of nearly one thousand people. Parents and children gather at the only local community centre to attend art classes, drink coffee, and socialize. The adults smile and laugh as their children splash paint onto previously pristine white canvasses. Conversations abound regarding the latest community gossip. The residents are content, engaging, and personable. The town has all the amenities it needs including a combination gas bar and convenience store, a small manufacturing company for jobs, and a paved road for year-round access in a very cold climate.

On the surface, this community looks and acts like any other small town in Canada. But appearances can be deceiving.

This is the picture of a typical First Nations community – a band reserve. In common with many small communities, over half of those who are raised here will need to leave their homes and families for a better life in a larger city. What is different from that typical small community is that more than half of the children living here will not finish high school. If they stay, they are three times more likely to be unemployed. They will experience exposure to addiction, disease, unclean water, inadequate housing, and isolation at dramatically higher rates than the typical small town resident.

To add to this misery, their elected officials have to spend the majority of their working hours completing mandatory government reports, on average a report for almost every working day. With the limited administrative capacity found in any such small Canadian town, it is not surprising that with these government reporting demands, elected officials and their administrators have little time or motivation to respond to the needs of community members.

It is not as if this excessive accountability is a new development. The 2002 Auditor General’s report found that the average First Nation community in Canada was required to complete 168 reports for the federal government annually. Revisiting this administrative burden in 2011, the Auditor General found no improvement.

Financial Transparency Act

Yet in 2013, instead of relieving the reporting burden for these communities, in a fit of pique that may have had more to do with the Idle No More Movement than good governance, a 169th report entered the picture for First Nations communities in the guise of the First Nations Financial Transparency Act. Its explicit purpose was to raise accountability of First Nations, as if the first 168 reports were not enough, by requiring 581 First Nations to publicly post their audited financial statements and the salary information of the Chief and council to the Canadian government’s website.

Further, the penalty for noncompliance was to have the funds for reserve administration be withheld – the very funds needed to bring the bands into compliance. Being the pragmatic bureaucrat that he was, former Aboriginal Affairs Minister Bernard Valcourt suggested a way for First Nation reserves to continue to operate; in a media interview, he noted that funds for social and educational programs would continue to flow as block grants and could be readily diverted to the band administration. Astonishingly, this suggestion was made in the context of an Act of Parliament whose alleged purpose was to create greater accountability of leaders to the people of the First Nations communities.

Self-determination will never be achieved if excessive accountability demands continue to reduce the political legitimacy of First Nation governments, especially in the eyes of their own people

Accountability, be it in the corporate or not-for-profit world, has been called the “buzzword of our time.” Yet accountability is based on the legitimacy of those calling for the accounting. In the world of democratic institutions, it is the people who call their elected officials to account. But in the strange world of First Nations funding in Canada, it is the federal government, through the latest iteration of its Indian Affairs department, that requires these 169 accountability reports. It is little wonder that First Nations leaders fight, through federal court cases, the imposition of more and more accountability to federal bureaucrats. Each new report reinforces government paternalism that only hinders the advancement of First Nations toward sovereignty status.

Treating band governments like mini-municipal governments is a 1970s idea that some saw as an interim step on the road to full self-government for First Nations communities. But in the 40 plus years since these local service delivery agreements started, fewer than two dozen First Nations groups have achieved self-government status. Self-government, while not perfect, moves the First Nations communities along the road to a return to “nation-to-nation” status with Canada, as defined in the 1763 Royal Proclamation, in court decisions, and indeed in the Constitution of Canada.

Communities Take Second Place

Calls from the federal government for the increased accountability of band leaders to their local communities via the imposition of more and more reports to the government has just the opposite effect. Government funders are such powerful external stakeholders that First Nations leaders are compelled to meet their accountability demands before anyone else’s, including their own community’s. The combination of government legislation and paternalistic treatment has created an “accountability regime” which diminishes the legitimacy of First Nation governments, treating them as bureaucratic subordinates rather than sovereign equals.

As band leaders struggle with these reporting requirements to keep basic services coming to their communities, each added focus on satisfying federal government demands reduces the time and attention these same leaders can give to finding better ways to deal with local challenges. This has sparked tension within Indigenous communities leading to the withdrawal by many of their support for local democratic processes.

Excessive calls for accountability also create a climate of animosity and mistrust within the general population of Canada, reinforcing the misconception that First Nations are incapable of governing themselves. Self-determination will never be achieved if excessive accountability demands continue to reduce the political legitimacy of First Nation governments, especially in the eyes of their own people.

Achieving First Nations sovereignty begins with demonstrating the ability to self-govern. Government paternalism, hidden in the form of rhetoric about increased financial accountability, only hinders the advancement of First Nations toward sovereignty status. If advances are not made, we will only see the continuation of the long, unhealthy relationship between Canada and its Indigenous population. If this toxic atmosphere of accountability pushes sovereignty for First Nations further and further out of reach, then the threat to our peaceful coexistence, First Nations and others, increases greatly. 

Seeing calls for greater accountability as leading to the reduction of government legitimacy is such a paradoxical idea that it is easy to see why it has been missed. Let us hope that the new government in Ottawa will not repeat the mistakes of the past and take actions that will restore accountability of First Nations leaders to their people as a first step towards true reconciliation between our peoples.

Russell A. Evans is a PhD candidate in accounting and Steven E. Salterio is professor and director of the CPA-Queen's Centre for Governance, both at Smith School of Business. An abridged and edited version of this essay originally appeared in The Globe and Mail.

Further Reading

The Indian Act, 1985, I-5

Indian Act colonialism: A century of dishonour, 1869-1969

The governance and fiscal environment of First Nations’ fiscal intergovernmental relations in comparative perspectives

Seven questions about First Nation accountability  

The myth of the First Nations Financial Transparency Act


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