Fort McKay First Nation chief made $644,441

A Maclean’s investigation reveals that six-figure chiefs’ salaries are not uncommon
110612- Ron Giesbrecht, Chief of the Kwikwetlem First nations talks about the Native artifact found during a BC Hydro excavation near Minnekhada Regional Park last week. CREDIT: Lisa King/Tri-Cities Now
Lisa King/Tri-Cities Now
Chief Ron Giesbrecht, of the tiny Kwikwetlem First Nation in B.C.’s lower mainland, took home $914,219 for a year’s worth of work. (Lisa King/Tri-Cities Now)

Chief Jim Boucher has been the top elected official of the Fort McKay First Nation, up in oil sands country north of Fort McMurray, Alta., for more than two decades. He collected a salary of $644,441 for the year that ended last March 31.

Even by Alberta boom-town standards, that’s a pretty hefty paycheque. And, as with all income claimed on reserves in Canada, it wasn’t subject to income tax. Boucher’s community is small. As of last summer, Fort McKay had a registered population of 396 on its reserve, with another 430 members living elsewhere. The nearby Regional Municipality of Wood Buffalo, which includes Fort McMurray, has a population of more than 100,000—and pays its mayor $127,671.

Boucher’s pay also stands out among chiefs across Canada. Of 327 bands who had filed salary disclosures by last week under the federal government’s new First Nations Financial Transparency Act, only Ron Giesbrecht made more more—$914,291 as chief of the tiny Kwikwetlem First Nation in British Columbia.

Still, Maclean’s found that six-figure chiefs’ salaries are not uncommon—35 of the 327 bands whose disclosure documents we reviewed paid $100,000 or more to their chiefs. If expenses and other band remuneration is added to those base salaries, the number who cost their communities $100,000 or more climbs to 105, not far below a third of them. A full story on what we found, with reaction from several chiefs—including some who make a lot less than the norm—is here.

Giesbrecht’s astonishing 2014 pay, which made headlines and caused controversy when it came to light last summer, was mostly a one-time bonus. Boucher’s remuneration, however, represents what he and his fellow councillors at Fort McKay evidently believe is fair as an ongoing policy, given the band’s unusually high revenue from its oil-sector service businesses.

While Boucher was not available to answer questions, George Arcand Jr.,  Fort McKay’s chief executive officer for administration, explained the band’s position on salaries in a phone interview. This is an edited version of that conversation:

Q Can we start by making sure we have the number right? Chief Jim Boucher’s salary as chief of the Fort McKay First Nation last year was $644,441. Is that just his base salary for being chief, with nothing special added in?

A Except that in Fort McKay’s situation our chief and council sit on a number of boards. They are paid as chief and council, and we pay, sometimes, expenses on the board side, but essentially they are not paid any kind of stipend to sit on those boards. So the chief and council salaries cover their business activities and acting on boards of directors.

Q Do you actually produce oil?

A It’s all related to activities in the Fort McMurray area. Essentially we have two divisions. We have our Fort McKay group of companies, which has a number of contracts with the industry throughout Fort McMurray. And then we have a joint-venture side, which has a number of joint ventures, ranging from owning camps to oil rigs. So we don’t actually do oil production, but we’re involved in the service industry.

Q Your chief’s salary stands out. How do you justify it?

A Our chief is our senior spokesperson at all of our negotiations. He’s our spokesperson for public relations for our companies. He also sits on the boards of directors of our companies that determine business direction. On a percentage basis, 70 to 80 per cent of the activity he undertakes is solely on the business of the First Nation.

Q So you’re framing it that he should be seen more as a business leader than as a local politician?

A That’s how I’m framing it, yes.

Q How much revenue does the band pull in from its businesses?

A In [fiscal 2014] upwards of $70 million.

Q And that compares to about $2.5 million you receive in federal funding, is that correct?

A Right.

Q How is the chief’s salary set?

A At the end of the day, the chief and council have a policy for salaries. That policy is disclosed with the community. Chief Boucher is at the higher end of that particular scale. He’s been chief for 22 years and it brings his salary up to that level.

Q It goes up every year?

A We try to [review] it annually, but we’ve been doing it every two years or so. The policy itself is reviewed and adjusted upwards or downwards. Part of our policy indicates that chief and council salaries won’t exceed three per cent of our total revenues.

Q Is the salary level already widely known in your community, or does the new federal transparency law mean it will come as a revelation?

A We’ve found this year, because of the new act, people are much more interested. At our last quarterly general meeting, which was in July, we disclosed a big part of the audit, and the policy on chief and council salaries, just to let the community know this is going to be public now and people are going to obviously have some concerns.

Q What’s the reaction been?

A You know, obviously, there’s some community members who are not totally happy. But by far there are a lot of community members who are open to the idea that Fort McKay operates on a different type of system. A lot of our activities are around business, and we need to compensate our people who run our businesses and operate the First Nation in a fair fashion.

Q I think a lot of Canadians would expect salaries in an oil-boom area to be a bit higher than elsewhere. But I understand the mayor of the municipality that includes Fort McMurray, which is a bit south of Fort McKay, makes a bit more than $125,000. Is that a fair point of comparison?

A Not in our situation. As an example, the chief is chairman of our group of companies, and their activities were well over $100 million.

Q Your community also gets about $2.5 million year from the federal government. Do you think you should be constrained in what you pay your officials by the fact that you collect that federal funding?

A Federal transfers are based on treaty. So whether Fort McKay is making a lot of money or not, there’s still an obligation by the federal government to continue funding particular programs: education, health and so forth. But this community has decided that no federal money will go to chief and council. Part of their policy clearly identifies that all the money that comes from federal resources goes back into the community.

—with files from Nick Taylor-Vaisey