Aboriginal Advancement: Lost in Accountability

Increasing the demands for even more reporting only undermines the legitimacy of First Nations leaders.
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. The town seems to have all the amenities it needs, including a combination gas bar and convenience store, manufacturing jobs, paved roads and year-round access, despite its remoteness and harsh climate in Canada’s North. 

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

This is the picture of a typical northern First Nations community — a band reserve. In common with most small Canadian communities, more than half of the people raised here will leave for better lives in larger cities. What differs from the typical small community is that more than half of the children living here will not finish high school. Those who stay are three times more likely to be unemployed. They will be exposed to addiction, disease, unclean water, inadequate housing and isolation at dramatically higher rates than the typical Canadian small
town resident.

To add to the misery experienced by most, local elected officials have to spend the majority of their working hours completing mandatory government reports, on average a report for almost every working day of the year. With the limited administrative capacity found in any such small Canadian community, and with the focus on meeting heavy government reporting requirements, it is not surprising that elected officials and their staff often have failed to meet the needs of their community members.

Excessive accountability demands are hardly a new development. The 2002 Auditor General’s report found that the average First Nations community was required annually to complete 168 reports for the federal government, just to keep funding for basic services flowing to their bands. Imagine 168 accountability reports for a community of less than 1,000 people, located far from any major population centre and facing social and educational challenges on par with many Third World countries. A decade later, the Auditor General revisited this accountability-reporting overload and found no improvement.

The 2002 Auditor General’s report found that the average First Nations community was required annually to complete 168 reports for the federal government, just to keep funding for basic services flowing to their bands.

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 was introduced in the form 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 non-exempt First Nations to publicly post audited financial statements and Chiefs’ and band council members’ salaries to a Canadian government website.

Failure to comply with this 169th report was enforced by the threat of withholding band administration funds – the very money needed to bring bands into compliance. With astuteness worthy of Machiavelli, former aboriginal affairs minister Bernard Valcourt disingenuously suggested that First Nations divert funds from social and educational programs to the band administration. Astonishingly, this suggestion was made in the context of an Act of Parliament, the alleged purpose of which was to create greater accountability of local First Nations leaders to their own community members.

Accountability is only as strong as the legitimacy of those calling for the account. In the world of democratic institutions, for instance, it is the electorate who call their governments to account. But in the strange world of First Nations governance in Canada, it is the federal government, not the local electorate, which controls all aspects of these 169 accountability reports. As a result, each new report reinforces federal government paternalism and hinders the advancement of First Nations toward sovereign status. It is little wonder then that First Nations leaders continually fight the imposition of increased external accountability to federal bureaucrats by launching civil court cases.

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 reports have had just the opposite effect. So powerful are government funding agencies that First Nations leaders are compelled to meet their accountability demands before meeting the needs of their own communities. The combination of government legislation and historical paternalistic treatment has created an “accountability regime” that diminishes the legitimacy of local First Nations governments, treating them as bureaucratic subordinates rather than sovereign equals.

As band leaders struggle to meet the reporting requirements that keep basic services available to their communities, each new demand further reduces the time and attention these same leaders can devote to solving local challenges. This has sparked tension within indigenous communities and has led many members to withdraw support for the local democratic process.

Excessive calls for accountability have also created 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 likely never be achieved if excessive accountability demands continue to reduce the political legitimacy of First Nations governments, especially in the eyes of their own people.

Attaining First Nations sovereignty begins with the demonstration of an ability to self-govern effectively and efficiently. This demonstration cannot occur as long as government paternalism, through its demands for financial accountability, continues to limit the power of First Nations to make decisions. If advances are not made, we will only see the continuation of the long, unhealthy relationship between Canada and its indigenous population. 

Fortunately, the new Liberal government that took office in November has already made positive advances in Canada’s relationship with indigenous people. As of Dec. 18, 2015, the Department of Indigenous and Northern Affairs “stopped all discretionary compliance measures related to the First Nations Financial Transparency Act; is re-instating funding withheld from First Nations under these measures; and is suspending any court actions against First Nations who have not complied with the act.” These government actions were followed by the announcement in the March 2016 budget of $8.4 billion in new federal funding for aboriginal initiatives over the next five years.

Although these announcements, in and of themselves, do not solve First Nations governance concerns, they do provide evidence that the new government in Ottawa is attempting to not repeat the mistakes of the past. Let us hope it realizes that progress requires more than just money and words. It will take long-term and strategic action to restore the accountability of First Nations leaders to their own people and achieve a genuine reconciliation between our peoples.

Smith Business Insight published the original, unabridged article at ssb.ca/insight.

Russell Evans

Russell Evans doesn’t mind when his family calls him a “professional student”. He’s followed an eclectic route, having already acquired a diploma in electrical engineering, an undergraduate degree in kinesiology, an MBA, and an MSc in Management from Smith in 2010. Now, he’s in the home stretch of completing his PhD under the guidance of Smith accounting professor Steve Salterio.

To say that he has persevered in overcoming obstacles would be an understatement. In his family, he’s the thirteenth of fourteen children, raised near Temiskaming in Northern Ontario, and a member of the Matachewan First Nation. His first seven years were spent in a house with no running water and dirt floors in some of the rooms. 

“I never thought university was an option for me,” Russell says of being the only member of his family to have made it to university. He had done well in high school and credits his guidance counsellor and volleyball coach for encouraging him. “He said, ‘If you don’t go to university, it would be a sin,’ so I applied to three universities, thinking I’d like to become a phys-ed teacher.” 

It turned out that his interests lay elsewhere. A stint in the oil patch out west brought him in closer contact with a local First Nations band council, where he observed first-hand the power imbalance between the local indigenous people and the big oil companies. After returning to Ontario, he completed his MBA at Brock University, graduating just in time for the onset of the recession of 2008. He’d enjoyed his roles as Research and Teaching Assistants and decided to continue his studies by pursuing his MSc in accounting at Smith. That path has led deeper into academia, and his ultimate objective now is to land a faculty position in accounting following his doctoral graduation, expected in 2017. 

His thesis proposal was approved in late March and Russell is now consumed with conducting primary research in First Nations communities in Northern Ontario. His dissertation is focused on accountability relationships between indigenous communities and the Government of Canada. “No one has ever examined this from the perspective of the people who are living in this environment,” Russell says. “I hope that the results will have an impact beyond the boundaries of these communities, that perhaps it will lead to greater understanding of the detrimental effects of the current system.”