Financial institutions act divides chiefs

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Is it "from us?" Is it part of the governance package or not? If so, why is the national chief supporting it?

Those are the key questions First Nations leaders and their political staff are grappling with now that the First Nations Fiscal and Statistical Infrastructure Management act has been made public. The questions, some sources say, could cause an enormous problem for the Assembly of First Nations (AFN) because they point to some impropriety in passing at least two resolutions at recent AFN meetings.

A draft of the act was revealed on Aug. 15. Robert Nault, the Minister of Indian Affairs and Northern Development, and Manny Jules, chairman of the Indian Taxation Advisory Board, hosted a press conference to introduce the bill and announce that public consultations would soon begin.

Both men spoke strongly in support of the proposed legislation that would create four financial institutions that will expand First Nation taxation powers.

"The Fiscal and Statistical Management act is a First Nations-led initiative," said Jules, a former chief of the Kamloops Indian Band. "It is approved and supported by the Assembly of First Nations and the national chief. First Nations collecting taxes and their taxpayers support it, because it will provide more transparency and certainty in the First Nations tax system."

The claim the bill is "First Nation-led" is based on a resolution passed in 2001 at the AFN annual general meeting in Halifax.

But, "There was a serious procedural problem with the vote on the resolution, " wrote then Grand Chief Larry Sault of the Association of Iroquois and Allied Indians(AIAI) in a letter to AFN-British Columbia Vice Chief Herb George and Manny Jules shortly after the meeting.

"A vote was required given the controversial nature of the institutions initiative and its likely effect on rights and jurisdiction (article 2.6 of the AFN Charter). According to article 8(1) of the charter, a positive vote of 60 per cent of the First Nations in attendance was required to ratify the resolution. At the time of the vote, there were at least 121 First Nations in attendance; 68 voted in favor of the resolution, 28 voted against, and 25 abstained. In other words, there was a positive vote of no more than 56 per cent of the First Nations in attendance," Sault wrote.

"The chairperson ruled that the fiscal institutions resolution would be suspended or tabled, pending a ruling by independent legal counsel by July 30."

Eventually a deal was worked out, one that hinged on a promise that no bill would be passed into law until it was returned to the chiefs-in-assembly for approval. There was no mention of that promise during the press conference on Aug. 15.

There has been a curious silence since the bill was unveiled. Chiefs that political observers would expect to hear from on the issue have said nothing. No statement or comment was released by the AFN to mark this significant development.

Under promise of anonymity, a couple of sources are speaking to Windspeaker. A former high-ranking AFN official said the national chief has already endorsed the fiscal institutions plan. His lack of comment either for or against it on Aug. 15 is unusual, and is probably linked to an uneasiness about the faulty resolution.

An AFN insider said the most vocal chiefs who are aligned against the financial institutions initiative would love to attack the resolution that is being used to sell it as an "Indian-driven" initiative. But they don't want to draw attention to the fact that the Ottawa resolution rejecting the First Nations governance act was also open to question because voting rules weren't followed to the letter.

Sault's successor, Grand Chief Chris McCormick, carried on the AIAI's objections to the fiscal institutions bill.

"If we're sovereign nations, and we're always referring to ourselves as sovereign nations, how come we're going over to the government to say, 'Can we? . . . Cant you put this through in egislation so we can do it?' To me that's an assimilation process," he said.

He repeated concerns that the AFN resolution endorsing the initiative was improper.

"The resolution didn't meet the technical requirement of the AFN constitution. It was passed on a decision by the chairman. It was a clear violation of AFN meeting proceedings," he said.

He pointed out that the fiscal institutions initiative was discussed at the AFN meeting in Kahnawake in July and the chiefs did not endorse it there.

"This was raised at the recent AFN meeting. They were looking for support, but that didn't happen. The chairman cut off the debate because there was no clear support for the report that was done by B.C. regional chief Herb George and Manny Jules. There certainly wasn't clear support for the fiscal institutions initiative. The first time it got through, it sort of slipped through, I guess. But this time it ran into a more solid object," the grand chief said.

Jules has argued that First Nations that allow non-Native individuals and businesses to use their land should be free to tax those people. McCormick doesn't think taxation is the only way to deal with that situation.

"Why don't they just charge rent? Why does it have to be a tax system? They say you can opt in. But if it's legislated and it's a national act, there isn't any alternative. You either do that or you don't. I don't see why we as sovereign peoples are going to a colonial government to put in place institutions that we have the ability, the knowledge and the human right to do on our own."

The minister and Jules believe the bill will be a great thing for Native people.

First Nations, Nault said, "need better tools to raise money, to create an economy, and to build their government. They need the powers that every level of government in Canada already has and takes for granted. These powers help build businesses, roads, houses and communities. You can't run a sustainablegovernment without these tools and it i high time First Nations had access to them."

Nault has no doubt that the financial institutions act is part of his governance package, something the chiefs-in-assembly have rejected on several occasions.

"We recently introduced a First Nations governance act to build a bridge to self-government. The Specifics Claims Resolution act was also introduced in the House of Commons. This legislation will establish an independent claims centre to address past wrongdoings and settle uncertainty over land ownership. This will open the door to more investments from the private sector. The benefits from investments will multiply and mean more job opportunities, more choices, and a better future for the next generation of First Nation children," he said. "Taken together with this package, the four institutions we are announcing today will have the stature, the stability and credibility required for strong fiscal management by First Nations. For First Nation people, the First Nations Fiscal and Statistical Infrastructure act will mean that decisions about where private money comes from, and how it is spent, will be made in the community by the community. The act will pave the road to economic development ... in other words, self-determination."

Jules also sees the institutions that would be created by the act to be the key to a more prosperous future for his people.

"For the last 130 years, our institutions have been legislated away. And this begins the process of legislating our way back in," he said. "To get to this point, however, we have had to overcome a major hurdle. The fear of change has trapped us in a vicious cycle of poverty, transfer dependency and leads to poor quality services and poor infrastructure. Which leads to little private investment and that leads to low incomes and the need for more transfers.

"First Nations are missing something that other governments are so familiar with, that they don't even notic that we don't have them. We are missing what evry other government has, our own public institutions. Where would you be if you did not have a good transportation system? Inadequate water and sewer systems? Where would you be if there was no reliable statistical information about you and your community? What would you do-what would that do to the valuing of your property? What you take for granted we are trying to build."

During a press conference after the announcement, Jules said "One of the big problems we face continually is the fact that we don't have access to public venture capital.

"When you look at reserves and their neighboring communities, the evidence is right before you-lack of sewer, lack of water, lack of proper roads. Without that kind of infrastructure you can't facilitate economic development and economic growth in our communities. Those fundamental institutions are going to be required for us to be a full partner in Canada's economy. That lack of involvement is costing some $9 billion collectively. Four billion because of disservice and poverty and $5 billion because of the under-productivity of this country. That has to change."

The Indian Affairs minister rejected suggestions that the federal government is trying to push this bill through so it won't be on the hook for the costs of improving the infrastructure in First Nations communities.

"This is not about reducing our fiduciary obligation, it's about giving powers to communities to make their own decisions in order to build governance structures that every Canadian takes for granted as it relates to their own government," he said.

The minister said the new institutions will allow First Nations to do more with the money they have.

"It's my understanding that it costs about 14 to 15 per cent on First Nation money to go out and borrow money, whereas other levels of government can get the same out in the market bonded at four or five per cent. That's just the cost of doing b