Backgrounder - First Nations Financial Transparency Act

Complaints from community members and recent media attention have highlighted the lack of availability of financial information in some First Nations, particularly in regards to the salaries and expenses of chiefs and councillors.

In October 2010, a private member's bill, C-575, was introduced in Parliament aiming to "enhance the financial transparency of First Nations governments." It would have ensured the public disclosure of the remuneration paid by a First Nation to its chief and councillors by requiring that the information be published. The bill passed at second reading and was referred to committee in March 2011, but died on the Order Paper with the dissolution of Parliament.

In the 2011 Speech from the Throne, the Government committed to "support transparency for First Nation communities by requiring chiefs and councillors to publish their salaries and expenses."

The proposed legislation would address the issue of financial transparency for First Nation leaders by expanding the scope of the information to be publicly disclosed beyond the salaries and expenses of chiefs and councillors to include a First Nation's audited consolidated financial statements.

In accordance with provisions in their funding agreements, First Nation band councils are already required to provide Aboriginal Affairs and Northern Development Canada with audited consolidated financial statements and a schedule of salary, honoraria and travel expenses for all elected band officials. This proposed legislation would ensure that these statements are made available to the First Nation members in their communities and the public through posting on a website. This will help First Nations by supporting reductions in the reporting and bureaucracy requirements surrounding funding agreements. Transparent and accountable First Nation governments also create a better environment for private sector investment which could lead to greater economic development opportunities and improve the quality of life for First Nation communities.

On November 7, 2012, the Chair of the House of Commons Standing Committee on Aboriginal Affairs and Northern Development presented the Committee's fourth report, reporting Bill C-27, First Nations Financial Transparency Act, with amendments.

The amendments adopted provide greater clarity to those parts of the bill dealing with the treatment of band-owned businesses and the presentation of separate figures for remuneration and expenses paid to chiefs and councillors.

On December 13, 2012, the bill received 2nd reading in the Senate and was referred to the Standing Senate Committee on Aboriginal Peoples.