Majority of First Nations fail to submit mandatory financial reports as Ottawa faces questions over enforcement

More than half of Canada's non-self-governing First Nations had failed to submit mandatory audited financial statements by the end of March, raising questions about Ottawa's enforcement of federal financial transparency requirements.Blacklock's Reporter says new figures from Indigenous Services Canada show the department received just 45% of the required financial reports for the 2024-25 fiscal year from the country's 578 non-self-governing First Nations.The figures were disclosed in a departmental submission to the Senate national finance committee following questions about compliance with federal financial reporting requirements.“There are currently 578 non self-governing First Nations, all of which are required to submit annual audited financial statements,” the department stated in its submission, titled Main Estimates.“This requirement along with a schedule of revenue and expenses by activity is set out in their funding agreements with the department.”The disclosure means approximately 55% of the required reports had not been received by the March 31 reporting date.Indigenous Services Canada acknowledged some communities face difficulties meeting their financial reporting obligations, particularly smaller and remote First Nations.The department cited limited administrative resources, financial constraints and difficulties obtaining private auditing services as potential obstacles.“These constraints can affect their ability to provide audited financial statements to their members in accordance with First Nations’ financial administration laws,” the department said.Ottawa also provides funding to help First Nations cover accounting expenses, including annual audits and other professional services.However, the department did not provide a specific explanation for the low reporting rate..The figures were tabled following an April 22 Senate committee hearing at which senators questioned federal officials about the government's failure to enforce financial disclosure requirements.Parliament passed the First Nations Financial Transparency Act in 2013, requiring First Nations to publicly disclose financial statements and other financial information.However, federal enforcement of the legislation effectively stopped after 2015, senators were told.The issue returned to the spotlight following a Federal Court ruling last November 20 involving Alberta's Frog Lake First Nation.The Canadian Taxpayers Federation had challenged the First Nation's refusal to disclose financial records requested by members.The requested information included bank account numbers, budgets, loans, individual employee salaries, payments distributed to members, legal fees and money spent on private corporations.The request also covered internal projects involving land claims research and the development of membership and election rules.The Federal Court upheld the complaint and ordered the disclosure of information.Quebec Sen. Clément Gignac, a former chief economist at National Bank, questioned why the federal government was not ensuring compliance with the legislation.“The law is still in effect,” Gignac told the committee.“The Federal Court gave you 30 days to provide the information.”Richard Goodyear, chief financial officer at Indigenous Services Canada, told senators the department requires First Nations to respond to financial questions under their funding agreements.However, his answers drew criticism when senators pressed him about whether Ottawa was actually enforcing disclosure.“Did you comply?” Gignac asked.“When we receive the financial statements from First Nations, we publish them,” Goodyear replied.Gignac questioned whether the department was doing enough to obtain the missing records.“You did not compel them to publish their financial statements?” he asked.“You can’t post anything if you don’t receive anything. You may publish what you receive, but you do not make it mandatory for all Indigenous communities to publish their financial statements.”“What we receive, we publish,” Goodyear repeated.“I understand,” Gignac responded. “What you receive, you publish, but you hardly receive any of them.”.Asked whether the department intended to address the lack of compliance, Goodyear said officials were reviewing the matter.“We are studying this very carefully to determine how we will proceed,” he said.Ontario Sen. Sandra Pupatello also raised concerns about accountability, arguing financial transparency becomes increasingly important as federal spending grows.“This becomes more of a priority the more that is spent,” Pupatello said. “I think that is really critical.”“There is so much more money that we are spending. We need to be sure the public is confident in how everyone is spending it.”Combined annual spending by Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada totals approximately $36 billion, according to federal estimates.Despite the reporting requirements and the Federal Court ruling, the department has not outlined specific new enforcement measures to ensure all First Nations submit their financial statements.

Majority of First Nations fail to submit mandatory financial reports as Ottawa faces questions over enforcement

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