Nation takes a leap of faith with trust monies

A Saskatchewan First Nation is about to become the first First Nation to have sole control over money Ottawa holds in trust for it.

In a referendum held June 28, members of the Kawacatoose First Nation voted 1,009 to 201 in favour of opting into the First Nations Oil and Gas and Moneys Management Act. There were 1,988 eligible voters. The referendum had to pass by a double majority, with the majority of electors voting and the majority of those voting in favour.

Membership has 30 days to file an appeal. If an appeal is not filed, Ottawa will begin the process of transferring Kawacatoose First Nation’s capital and revenue moneys to a trust or bank account that will be administered and managed solely at the discretion of the First Nation.

Future capital and revenue moneys collected or received by the federal government on behalf of Kawacatoose First Nation will also be transferred. Ministerial approval under the moneys management provisions of the Indian Act will no longer be required.

“It has been three years to get the referendum phase,” reads a Facebook page operated by the Kawacatoose First Nation.

Adopting the Management Act allows a First Nation to pursue economic development and investment opportunities without having to wait for the federal government to take the time-consuming steps necessary to release funding or to refuse to give the go-ahead for a project selected by the First Nation.

“It was a bit of a bureaucratic exercise for them and (there) would be some delays and if you’re making investment opportunities, you don’t want delays.  It’s probably more about time and efficiencies and that sense of control when you want the moneys,” said Jodi Woollam, spokesperson with the Saskatchewan regional office of Aboriginal Affairs and Northern Development Canada.

A fact sheet developed by AANDC states the act “allows First Nations to be accountable to their memberships, and gives them the flexibility required to respond rapidly to community needs thereby enhancing the quality of life on-reserve.”

A financial code developed by chief and council and ratified by the membership establishes the accountability of how the revenue will be held, managed and expended.

While the act specifies oil and gas revenues, Woollam says the First Nation will have control of all revenue and access to all monies held in trust by Canada.

Through the act, a First Nation also has the option to manage and regulate on-reserve oil and gas. Kawacatoose First Nation did not exercise that option.

“The moneys management section of (the act) appears to be directly addressing First Nations’ moneys management concerns; however, it remains unclear whether First Nations see the program as the most appropriate solution to current regulatory issues for oil and gas management,” notes an Aboriginal Affairs summative evaluation.

AANDC identifies a number of shortcomings to the act: “lack of an enforcement mechanism, loss of federal fiduciary responsibilities, environmental liability, the complexity of oil and gas regime and lack of community capacity.”

In fact, AANDC conducted pilot projects prior to 2010 with the Blood Tribe and Siksika First Nation, both in Alberta, and White Bear First Nation in Saskatchewan for the oil and gas and moneys aspect of the act, and moneys portion only with Frog Lake First Nation, also in Alberta. However, the oil and gas pilots were cancelled and Frog Lake withdrew.

Since the pilots were cancelled, four additional First Nations began the process for moneys management and all are at various stages of the five-step process.

The act came into force in 2006 and, according to the AADNC summative evaluation, the act “can be viewed as supporting capacity development along the governance continuum, which may ultimately lead to comprehensive self-government arrangements.”

There is no opt out clause once the legislation has been passed.