Where does the money go?

Ever wonder where the money earmarked for First Nations goes? Tired of having your tax dollars squandered?

Would it surprise you to learn that of the "estimated $8 billion in spending on policies and programs relating to aboriginal people in 2003-2004, approximately $5.36 billion were allocated to First Nations in grants or contributions, or just over $7,200 per person."

Compare this to $14,900 the government spends per non-native person living in Ottawa. (Amounts vary by community because of provincial and municipal funding.)

The Assembly of First Nations has pulled together a funding primer to help us understand where the money goes and who spends what. A link to the full report is below.

1) What is the money for?

"The majority of funds that actually find their way to First Nations through grants or contribution agreements are related to the provision of basic services such as health, education, roads and drinking water, to name a few of the most significant. The provision of these services is intended to be comparable to what non-aboriginal Canadians already receive from the federal, provincial and municipal governments. However, as the Prime Minister has admitted, the Federal Government is not meeting this standard.

"It is the responsibility of the Federal Government to provide these basic services to First Nations because the Crown has created laws that allow and require the Federal Government to do so, and laws that prevent First Nations from doing so unless that authority is delegated from the Crown."

2) Where does the money go?

"In order to understand these numbers better, it is critical to understand the reason for this spending; its intended purpose. To assist the reader, the following categories apply to the funds that are spent by DIAND on the Indian and Inuit Affairs Program (IIAP): comparable services (79%); lawful obligations (12%); and, self-government (2%). The remainder goes to the Northern Affairs Program or to pay for regional direction and administration."

3) What are the government's lawful obligations?

"International and domestic law defines the obligations of the Government of Canada in general. The obligation of the Federal Government to First Nations has roots that are widely varied and dating back several hundred years. They arise from sources such as the Royal Proclamation of 1763, from the Constitution Acts of 1867 and 1982, from treaties between the government and First Nations, and from the decisions of Canada’s own courts.

"...the lawful obligations the Crown owes to First Nations take various forms, but they stem from four broad categories of obligation: comprehensive claims; specific claims; treaties; and, litigation."

4) What is a comprehensive claim?

"Comprehensive claims arise where the Crown has not signed a treaty with a First Nation. The Crown’s obligation arises from the Royal Proclamation of 1763. This Proclamation requires that First Nations be undisturbed in the enjoyment of their lands unless and until they sign a treaty with the Crown. Where a First Nation has never signed a land treaty with the Crown, the First Nation holds unextinguished aboriginal title to the land and has the sole legal right to possession and occupation of their traditional land."

5) What is a specific claim?

"Specific claims are even more varied, but always arise where the Crown has breached the Indian Act, a treaty or other agreement."

6) What is a treaty obligation?

"Treaties are agreements signed between the Crown and a First Nation and could relate to any variety of issues from land use to the use of natural resources, to the provision of services by either party. The debt the Crown owes is the enforcement of an ongoing promise under the terms of a treaty."

7) What's a litigation obligation?

"Litigation creates an obligation in the way with which many Canadians are familiar. Someone, in this case a First Nation, can sue the Crown and, if they win, the Crown owes them compensation such as money, or the return of land, or the provision of a service. The costs of the court case as well as the compensation ordered represent the lawful obligations arising from litigation."

8) Why aren't these obligations begin met?

"It is an unfortunate but undeniable fact that, historically, First Nations could not rely on the media and public support to compel governments to resolve injustice against them. A lack of broad understanding of the issues throughout the general public and a lack of interest in the mainstream media still renders public sentiment a tool that is only rarely of use to First Nations. The courts were no help as it was illegal for First Nations individuals to raise funds for land claims until relatively recently." [I highlight this last point as being one that most non-Natives are unaware. Imagine this: you are living in your own country and it's against the law to obtain legal representation to argue your side of a legal dispute. That was a fact of law for First Nations.]

"The Federal Government has taken an approach to resolving its lawful obligations that costs First Nations and the Canadian public large sums of money and produces no benefits to either
group..."

The Myths

1) What's the issue?

"For the past few years, as legitimate public demands for responsible spending by government have increased, some have chosen to paint funding to First Nations as a key part of the problem.
It is said that the funding is either:
• extravagant—growing rapidly and exceeding need;
• misused—lacking accountability and subject to malfeasance; or,
• squandered—spent without purpose or result.

These myths are spread by critics who balk at the $8 billion budget..."

2) Is the budget extravagant?

"To reflect what is actually spent on people, numbers must be adjusted for inflation and population increases over time. When that is done, the total budget for Indian and Northern Affairs Canada (DIAND) is shown to have decreased by 3.5% since 1999-2000. In fact, the per capita figures would be even lower if the funds that go to others than First Nations were also factored into the calculations. As discussed earlier, other recipients include Inuit programs, DIAND administration, other government departments, other levels of government, and
non-governmental organizations."

3) Is the budget mismanaged?

"Among the 557 audits conducted by DIAND of First Nations financial management in 2002-03, auditors found only 16 cases (less than 3%) where it was necessary to register an adverse opinion or denial of the band council’s financial statement. The reasons for some of these opinions are as simple as a lack of adequate documentation for some transactions or a departure from generally approved accounting procedures.

"According to a member of the Standing Committee on Aboriginal Affairs and Resource Development, that committee estimates that 96% of First Nations have no accountability issues at all, meaning that they are fully compliant with a set of rules and regulations that greatly exceed those under which private enterprise operates."

4) Is the money being squandered?

"Certainly, one can not argue that meeting lawful obligations is squandered spending. No matter how those funds are in turn used by recipients, the money is legally owed by the government and, therefore, must be paid out to the rightful party. As noted, funding for comparable services represents the vast majority of spending.

"... these funds could be spent with greater effect [see: The Way Forward]; that integrated and streamlined processes could improve observed results. However, these services are part of the fundamental infrastructure meant to keep communities alive and, perhaps, to help them thrive. As such, they can not be reduced from what is already demonstrated to be an inadequate level."

The Way Forward

"... the Federal Government states that funding to First Nations is intended to provide comparable services, meet lawful obligations and support self-government.

"However, the funds that First Nations currently receive are insufficient to achieve
the goals for which they are intended.

"Waste is not the issue; process, sustainability and jurisdiction are the issues."

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Stay tuned for The Way Forward on Monday.

I hope this gives everyone food for thought. Please check out the full report at: Federal Funding to First Nations: The Facts, the Myths and the Way Forward

Colleen