First Nations Specific Claims—Indigenous and Northern Affairs Canada

Opening Statement to the Standing Committee on Public Accounts

First Nations Specific Claims—Indigenous and Northern Affairs Canada

(Report 6—2016 Fall Reports of the Auditor General of Canada)

15 February 2017

Michael Ferguson, CPA, CA
FCA (New Brunswick)
Auditor General of Canada

Mr. Chair, thank you for this opportunity to present the results of our audit on First Nations specific claims. Joining me at the table are Jerome Berthelette, Assistant Auditor General and Theresa Bach, Director, who were responsible for the audit.

The federal government has long acknowledged that it has not always met its obligations to First Nations under historic treaties or properly managed First Nations’ funds or other assets. In 2007, the government committed to a new process, called “Justice at Last”, which was aimed at resolving long-standing grievances more quickly, fairly, and transparently—preferably through negotiations. Resolving specific claims would provide justice for First Nations and certainty for government, industry, and all Canadians.

Our audit examined whether Indigenous and Northern Affairs Canada, the department primarily responsible for implementing the new process, adequately managed the resolution of First Nations specific claims. The audit focused on whether

• First Nations had adequate access to the specific claims process,
• claims were resolved and documented in line with selected aims of “Justice at Last”, and
• results of the specific claims process were reported publicly and completely.

We interviewed officials in the Department of Justice Canada, the Specific Claims Tribunal, several First Nations, and organizations representing First Nations to get their perspectives on how well the new process was working. However, we did not audit the performance of these organizations.

Overall, we found that Indigenous and Northern Affairs Canada did not adequately manage the resolution of First Nations specific claims as envisioned under the new process. For example, more claims were to be resolved than received each year. We found that the Department achieved this objective in only two of the eight years since “Justice at Last” came into force. Furthermore, the Department had stated that every reasonable effort would be made to achieve negotiated settlements, and that the vast majority of claims that entered negotiation would likely be resolved by a settlement agreement. However, we found that among the claims that entered the negotiation process, more claims were either closed by the Department, or ended up in litigation, than were resolved through negotiation.

We also found that the Department’s reforms of the specific claims process were not developed in consultation with First Nations, and that the reforms introduced barriers that hindered First Nations’ access to the process and impeded the resolution of claims. These barriers included certain practices that did not encourage negotiations, such as

• “take it or leave it” offers for claims that the Department deemed to be valued at under $3 million,
• significant unilateral cuts in funding to First Nations claimants for claims preparation and negotiation, and
• very limited use of mediation services and information sharing between the Department and First Nations.

The Department also did not use available information and feedback to improve implementation of the specific claims process. This information included concerns raised by First Nations and organizations representing First Nations about how the Department was implementing the new process. It also included information and feedback from the Specific Claims Tribunal decisions, most of which were in favor of First Nations.

With respect to public reporting, we found that the Department’s public reports were incomplete and did not contain the information needed to understand the actual results of the specific claims process. For example, the Department publicly reported that the 2007 reforms were a success. However, we found that most of the settled claims used to support this assertion were already either resolved or almost resolved before “Justice at Last” was implemented.

According to the 2015-2016 public accounts, the government has acknowledged a liability totalling at least $4.5 billion for approximately 500 specific claims where the Department has assessed an outstanding lawful obligation for the Crown.

We are pleased that the Department has agreed with all 10 of our recommendations and is preparing an implementation action plan.

Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the Committee may have. Thank you.