Dangerous decision

Page 5

Dear Editor:

Re: Article in April 2005 edition of Windspeaker-"Creditors can seize band funds-court."

The Assembly of Manitoba Chiefs (AMC) believes the McDiarmid Lumber case is not about First Nations' ability to follow corporate law. The implications of the case are more far-reaching than might first appear and could have grave consequences on First Nations communities.

The AMC can state with confidence that 99.99 per cent of First Nations will not and do not renege on their responsibility when it comes to band debts. There are numerous examples in Manitoba of First Nations with good fiscal management.

God's Lake First Nation entered into a series of contracts with McDiarmid Lumber for the provision of goods and services for approximately $620,000. McDiarmid Lumber imposed interest at a rate of 19.56 per cent. At the time they sought judgment the debt had risen to approximately $1,233,000. The band attempted to negotiate a deal to pay the entire principle amount and a more manageable amount of interest. McDiarmid Lumber refused to accept.

The garnishment order affected the entire Comprehensive Funding Arrangement's ("CFA") monthly allocation to God's Lake First Nation, leaving the community with no funds to manage the reserve and maintain services to its members. The Manitoba Court of Appeal's decision will have disabling effects on First Nation communities across Canada, affecting their ability to operate and even exist.

The Court of Appeal's decision was predicated very much on selected case law which narrowed the scope of section 89 and 90 of the Indian Act, the sections which protect First Nations from such disabling garnishment orders. God's Lake First Nation, with the support of the Assembly of Manitoba Chiefs, maintains the position that funding earmarked for the well-being of our communities by way of CFAs reflect the federal government's responsibilities and are protected from garnishment. The CFAs are the mechanism in which the federal government can meet its treaty obligations, such as the provision of educational services to band members. The funds received through CFAs, albeit held in off-reserve banks, are deemed to be situated on reserve by virtue of section 90(1) of the Indian Act which states "personal property purchased ... or moneys appropriated by Parliament for the use and benefit of Indians or bands, or given to Indians under treaty or agreement ... shall be deemed always to be situated on a reserve."

The Supreme Court of Canada will now be asked to determine whether the Manitoba Court of Appeal's narrow interpretation of the applicable sections in the Indian Act and existing case law are accurate or agree with the Manitoba Court of Queen's Bench's reasoning. In the end, God's Lake First Nation and the Assembly of Manitoba Chiefs do not dispute a debt is owed and should be repaid, however it should not be done in a way that causes undue hardship to the people of God's Lake First Nation and, ultimately, other First Nations in Canada.

Grand Chief of the Assembly of Manitoba Chiefs

Dennis White Bird