From OLTHUIS, KLEER, TOWNSHEND, L.L.P., 

Taking a second look at those Attawapiskat numbers

Posted on January 18, 2013

by: Lorraine Land, Lawyer at Olthuis, Kleer, Townshend, L.L.P., Toronto

Should Toronto be put under third party management? That community ran a deficit for years, and the combined total of all government spending (federal, provincial and municipal) is $24,000 a year for each Torontonian.

Attawapiskat, on the other hand, which is funded in federal funds mostly by only one  level of government - federal - received $17.6 million in this fiscal year, for all of the programs and infrastructure for its 1,550 residents. That works out to about $11,355 per capita in Attawapiskat.

People often forget, when talking about costs of delivering programs and services to First Nations, that almost all those costs are paid from one pot: Aboriginal Affairs. By contrast, non-Aboriginal Canadians receive services from at least three levels of government.

Here are the total expenditures per capita per level of government for Toronto residents in 2010:

• The 2010 federal budget expenditures were $280 billion or about $9,300 for each Canadian
• The 2010 Ontario budget is $123 billion in expenditures or about $9,500 for each Ontario resident
• The 2010 Toronto budget is $13 billion, or $5,200 for each Toronto resident
• That's a grand total of $24,000 per Torontonian.

Some additional points to consider:

Indian Affairs (now Aboriginal Affairs and Northern Development Canada, or AANDC) has capped expenditure increases for First Nations at two percent a year since 1996. Yet:

• The Aboriginal population has been growing at a rate closer to four percent a year, so per capita support is falling behind.
• In that same period, the number of staff hired at AANDC has almost doubled, from 3,300 in 1995 to 5,150 in 2010.  (Source: Indian Affairs)
• Those salaries plus consultants fees for people like third-party managers come from the program dollars that should go to First Nations.
• Consultants (including lawyers and accountants) receive 1,500 contracts per year from AANDC, worth about $125 million. (This does not include fees that First Nations pay directly using sources other than AANDC funding). (Source:  Toronto Star)
• One of these sets of fees, taken away from other AANDC budgeting and provided instead to consultants, is the payment for third-party managers.
• Another recent and publicly disclosed example of third-party-manager fees is those being paid for Barriere Lake. When the community took political action on some of its issues, Canada imposed third-party management. The accounting firm is paid $600,000 per year, according to Indian Affairs Records. (Source: Toronto Star).
• Almost every time a First Nation goes into third-party management, it comes out with as much debt as it had going in - or more. This is a good indicator that the problem is not fiscal mismanagement, it's the insufficiency of resources to deliver the programs needed.(Source: what we hear and see from our own clients)
• Each First Nation has to file, on average, 160 reports per year to AANDC. The Auditor General  says the problem is not under-reporting, its over-reporting (because of the resources and administration needed to service AANDC's bureaucratic requirements).(Source: Federal Auditor General)
• Costs of living in northern Aboriginal communities are considerably higher than costs in the rest of Canada.  A bag of apples in Pikangikum is $7.65 (versus the Canadian average of $2.95) and a loaf of bread in Sandy Lake costs $4.17 (versus the Canadian average of $2.43). (Source: Canadian Association of Foodbanks). In Attawapiskat, 6 apples and 4 small bottles of juice currently costs $23.50 (Source: CBC).