Shining a light on First Nations’ finances, and moving ahead

Median chief’s tax-free salary: $62,210

There’s something about the federal government’s new law forcing First Nations to reveal more about their local finances—especially how much chiefs and councilors are paid—that doesn’t entirely sit right.

After all, among the 582 bands across Canada subject to the First Nations Financial Transparency Act, many languish in poverty, face crushing addiction levels and the violence that goes with alcohol and drug abuse. They endure seeing their kids attend poor schools, while too many of their families live in broken-down houses.

So when critics accuse the Conservative government of cynically trying to deflect attention away from these urgent problems, by emphasizing instead how much Aboriginal politicians earn at the local level, they might well appear to have a point. And yet—no matter how much Canadians who genuinely hope for better days for First Nations might prefer to focus on more pressing concerns—the financial details exposed to the glare of public scrutiny by the new law are impossible to ignore.

Consider two communities. Up in the Northwest Territories, the chief of Fort Good Hope’s K’asho Gotine Dene collected a salary last year of $39,670, not much more than the average local band member’s earnings of $31,749. But in another northern First Nation, the Sheshatshiu Innu of Labrador, the chief’s base salary was $173,704, while the average band member earned just $14,215.

Critics of the transparency law complain that it invites exactly this sort of comparison, between First Nations with different histories and economies. No doubt dissimilar circumstance should be taken into account. Still, if I were from Sheshatshiu, I’d want to know more now about how they run things in Fort Good Hope.

But I don’t live on any reserve, as has been pointed out to me. During the past few months—as financial documents for hundreds of First Nations were being posted, one by one, on the Aboriginal and Northern Affairs Department’s website—I called many band offices (for this story) to ask about their figures. Often I wasn’t able to get any answers, occasionally was granted a frank interview, and now and then was told only band members had any right to ask about band finances. On that last point, I think there are two problems.

Firstly, these Aboriginal communities get millions in funding from Ottawa for band administration, health, education, housing and more. That they are fully entitled to the money (in fact, they probably should get more for, in particular, running schools) hardly means Canadian taxpayers don’t also have a legitimate interest in how federally supported bands are managed.

Secondly, band members themselves are far more likely to see clear numbers when we all do. Some First Nations leaders have protested that their own members already had the right to ask for band financial details, including what chiefs and councillors make, before the new law was imposed. But having to ask, especially in a small community, can be intimidating.

And it’s apparent that band members have, in at least some cases, been surprised by figures they’ve only learned about because of the transparency law. For instance, Chief Jim Boucher of the Fort McKay First Nation, up in oil sands country north of Fort McMurray, Alta., collected a salary of $644,441 last year. Realizing this and other financial details were soon going to become public under the new law, the band decided to explain the numbers to its members at a quarterly meeting last July.

I asked George Arcand Jr., Fort McKay’s chief executive officer for administration, how that went over. Arcand told me that “policy on chief and council salaries” generated a lot of interest.  “Obviously,” he said, “there’s some community members who are not totally happy.”

Yes, obviously. The average income of a Fort McKay band member is $64,832. Not bad. But the chief makes about ten times that, before expenses. Now, his generous pay is possible because of what are called “own-source revenues”—profits from band-owned businesses related to the nearby oil sands, not federal transfers. No matter where the money originates, though, it’s got to be good for Fort McKay locals to know what their elected leaders are making.

Nobody should imagine the huge salaries chiefs and councillors in some Alberta oil-patch bands pay themselves are typical. (Check out the full, searchable database we’ve created here.) Here at Maclean’s, we estimate the median salary nationwide for a chief at $62,210. Keeping in mind that on-reserve income isn’t taxed, that’s equivalent to about $80,000 in taxable income.

I’d say that’s a little high for politicians leading communities that often have populations numbered in the hundreds. Mayors of comparably sized towns generally make less—a contrast First Nations leaders groan about, claiming chiefs shoulder bigger responsibilities than mayors. That’s debatable. In any case, of the 531 bands that have so far complied with the law, 229 pay their chiefs a base salary of between $50,000 and $75,000.

Those aren’t headline numbers, so that large middle-of-the-pack group likely has little to worry about from closer scrutiny. For those paying less, the attention must be welcome. On the other hand, I expect many of the 167 chiefs who pulled down six figures, taking into account salaries and expenses, will have to answer some probing questions from their own communities. Any future pleas from them for more federal money for vital services will be harder to sell.

Then there are the roughly fifty bands that haven’t yet complied with the law. Some are defying it, others pleading for more time to get their books in order. Aboriginal Affairs Minister Bernard Valcourt threatens the recalcitrant bands with cuts to funding, although he says money for essential services like education and health won’t be held back.

Of the better than 90 per cent of First Nations that have filed their disclosure reports, some look downright frugal, some profligate, and most somewhere in between. How can it possibly be a bad thing for Canadians, especially Aboriginal Canadians, to be able to study that range, and debate what’s reasonable based on solid numbers?

That debate must ultimately play out most vigorously at the local level. For First Nations whose elected politicians are fairly paid, moving on to concentrate on urgent social and economic challenges should now be that much easier. For bands whose chiefs and councillors make too much, it’s time to cut those salaries and clear away a distraction from the real work at hand.

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