Today the federal government revoked the sovereignty of the Attawapiskat First Nation. Attawapiskat has been in a state of emergency for the last two years, but an appeal to the media by their NDP MP caused the government to act.
Attawapiskat is one of the few bands that posts their financial statements online. I actually just finished a course in reading government financial statements, so I skimmed through them. It turns out that First Nations financial statements are a lot more complicated than, say, the financial statement for the Government of Canada. Here’s a long blog post discussing the problems with First Nations financing with references to Attawapiskat. I wrote up a post with what I thought was the smoking gun but then I realized I had misread the statements (and hid my previous post because it’s embarrassing).
The trick with First Nations funding is that the federal government gives them a bunch of payments earmarked for certain areas of expenditure. This is similar to health transfers to the provinces – I’d argue that both violate the Constitutional sovereignty of these governments. The education situation in Attawapiskat is too complicated so let’s look at the housing fund:
| 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | Total | |
|---|---|---|---|---|---|---|---|
| Revenue | $1,030,063 | $980,862 | $1,695,751 | $1,454,647 | $4,397,906 | $2,031,007 | $11,590,236 |
| Borrowing | -$324,812 | $558,398 | $360,037 | $2,779,900 | $566,638 | -$458,026 | $3,482,135 |
| Transfers | -$150,754 | $573,230 | $1,918,715 | $3,314,028 | $295,924 | $710,631 | $6,661,774 |
| Total revenue | $554,497 | $2,112,490 | $3,974,503 | $7,548,575 | $5,260,468 | $2,283,612 | $21,734,145 |
| Administration | $106,396 | $150,552 | $270,080 | $157,560 | $134,301 | $403,342 | $1,222,231 |
| Capital | $120,245 | $838,788 | $1,543,110 | $5,174,832 | $781,981 | $499 | $8,459,455 |
| Program delivery | $179,296 | $988,475 | $1,119,308 | $1,004,161 | $15,385 | $60,512 | $3,367,137 |
| Wages and benefits | $183,546 | $781,114 | $1,216,672 | $1,518,307 | $1,318,281 | $1,374,128 | $6,392,048 |
| Write-offs | $435 | $435 | |||||
| Total expenditures | $589,918 | $2,758,929 | $4,149,170 | $7,854,860 | $2,249,948 | $1,838,481 | $19,441,306 |
| Surplus | -$35,421 | -$646,439 | -$174,667 | -$306,285 | $3,010,520 | $445,131 | $2,292,839 |
The obvious question is why the hell is a housing fund spending so much on wages, “program delivery” and administration, and so little on capital? Are these euphemisms for repairs or fraud?
The huge jump in spending in 2007 was the year before a new chief and council got elected, which doesn’t make that much sense. The financial statements don’t say where the transfers come from (I believe it’s another Attawapiskat fund), but a big transfer in 2009 got spent on some kind of capital. Then a huge increase in government funding for 2010 didn’t get spent on anything.
Attawapiskat’s financial statements don’t make enough sense to say whether there is mismanagement but I’m skeptical of any organization that has so much variance from year to year. Most organization’s financial statements show steady operational expenses with occasional capital purchases. Insofar as protection of the citizens of Attawapiskat outweighs their right to self-governance, I support the federal takeover of their government. But why didn’t someone at Indian Affairs see this coming a long time ago?
This is interesting and useful analysis, Jared. As you said, not at all like anything I’ve read in the mainstream media.
A technical question, not really about the main point of your post. You said:
Is the difference between what authority the Attawapiskat had and what they have now enough to qualify as a revocation of sovereignty? In other words, were they legally able to exercise sovereignty before now?
Define “sovereignty”.
I intended that statement to get attention rather than being particularly meaningful. As the Âpihtawikosisân blog argues (and you can see quite viscerally in the Schedule of Programs), federal government funding is diced so finely into specific program areas that council’s only real choice is whether or not to spend it (and in Attawapiskat’s case they chose not to). The federal government does the same thing with health transfer funding to provinces.
First Nations do have full sovereignty over their own revenue (although the Indian Act makes it hard for them to generate any). The Attawapiskat’s main source of own revenue is Casino Rama, which they’re putting in a separate fund. The last time they reported on that fund was 2009, but it has accumulated a few million since then.
An address of many of the Attawapiskat criticisms: http://apihtawikosisan.wordpress.com/2011/11/30/dealing-with-comments-about-attawapiskat/
@Kyla: The National Post syndicated the Âpihtawikosisân article. As I said in my post, it’s an interesting discussion of First Nations funding issues in general, but it didn’t look at the Attawapiskat financials that closely and it’s full of errors. For example, Section 61(1) of the Indian Act doesn’t have paragraphs a to k, the quoted text isn’t in the Act and that’s a misreading of the intent of that section.
“Insofar as protection of the citizens of Attawapiskat outweighs their right to self-governance, I support the federal takeover of their government. But why didn’t someone at Indian Affairs see this coming a long time ago?”
That’s probably because, as the Auditor General has pointed out its June 2011 report on program funding for First Nations Aboriginal Affairs doesn’t properly monitor it’s programs, their results, and nor does it have clear goals set for what those programs are meant to achieve. As someone who’s studying Aboriginal law presently, though I’d have to dig the relevant passage out later as I do not have the book here with me, one author described the Indian Act as legislative and administrative fossel based on mid-twentieth century assumptions about administration that has not kept pace with developments in Canadian law since then. (Including delegation of power.)
Also while you raise a valid point about the fluctuation in the finances, without more I’m really leery about the idea that this indicates misfeasance on the part of the band’s government given what a mess the situation is. For example, among the issues facing Attawapiskat…
“But Spence says it can cost as much as $250,000 to build a house in the community, which is 500 kilometres north of Timmins, Ont., a few kilometers inland from James Bay, and relies on a winter ice road or expensive cargo flights to bring in materials and contractors. To meet all of its housing needs would take $84 million and federal approval to transfer new land to the reserve so a new subdivision could be built.”
The new subdivision being relevant because a persistent problem is the growth of the Aboriginal population and money allocated to First Nations not keeping pace with that.
Also what financial documents are you assessing? You say that the financial statements don’t say where the transfers come from and yet the 2007 consolidated financial statement lays out where it comes from on the sixth page.
Another reason I’m leery, is well…the history of Aboriginal policy and white attitudes towards the First Nations is so steeped in paternalism and wrong-headed assumptions, why does anyone assume in the first place that the band government is involved in fraud when the evidence is manifestly insufficient to establish that? It’s well established that third party management ends up hosing First Nations big time. It’s also clear that even if the band council is completely honest, the money going to Attawpiskat is manifestly insufficient to meet their housing needs alone. And yet Ottawa’s first reaction was to accuse the band government of mismanaging the money and impose a third party manager?
“For example, Section 61(1) of the Indian Act doesn’t have paragraphs a to k, the quoted text isn’t in the Act and that’s a misreading of the intent of that section.”
Well she screwed up on getting the section right the quoted text is in the act. It’s just that it is section 64.
Ugh, I screwed up the URL code and there’s no way to edit it… :-/
@Adam: I think I fixed it. Let me know what the changes should be if not.
@Jared: TODO: We should allow posters to edit comments.
Thank ye kindly for the edits good sir.
@Adam: You could be right that chaotic government funding explains some of the chaotic band financial activity. My intention was to assess the claims made by opposing political parties that the financial mess was either entirely the band council’s fault or entirely the government’s fault. I think I’ve presented a tiny bit of evidence that the truth lies somewhere in the middle.
I’m not looking at the Consolidated Financial Statements, I’m looking at the Non-consolidated Schedule of Programs, specifically the housing program. The finances are so chaotic that I have to dive down to that level of detail to start to figure out what’s going on (which explains why all the journalists and politicians clearly don’t know what’s going on).
You’re right that in Schedule I it does lay out where the Appropriations and transfers are coming from: they’re being moved in and out of specific housing projects and something called the “revolving housing fund”, the value of which is undisclosed. This can be explained either as contractors mismanaging construction projects or the band mismanaging construction funding, but either way it’s an argument in favour of greater financial controls.
I agree with you that the government’s entire relationship with First Nations is problematic. But within the current framework, I see evidence of mismanagement. I think imposing a third party manager is a reasonable response within the current framework, and hopefully the government will begin overhauling the system so these sorts of things don’t happen in the future.