Mushkegowuk Council facing financial crisis as INAC withholds First Nation housing funds
Aboriginal leader says millions withheld by feds from Kashechewan housing project
September 18, 2008
TORONTO — An aboriginal tribal council in northern Ontario that has waited a year for millions of dollars in promised funding from Ottawa to rebuild homes fears bankruptcy, says the region's grand chief.
The Mushkegowuk Council, which governs seven northern First Nations, has been quietly awaiting about $2.5 million to cover the remaining costs in an extensive housing project in the community of Kashechewan that started in 2005.
But patience has grown thin for Grand Chief Stan Louttit, who saw a sudden and poorly explained halt of the funds in September 2007.
His council tapped into its reserves to complete the $13-million project by winter last year, and members have become frustrated because no more expected cash has arrived to replenish the coffers.
"You hope and you have faith that (the government) will come through honourably like other people will do, like us - we did our part," Louttit said. "But there comes a point when it becomes ridiculously slow."
Funding was initially agreed to during the height of media attention on Kashechewan, which was stricken by severe flooding three times within 18 months, resulting in several mass evacuations of its Cree population.
A sewage backup at the reserve's water treatment plant had left 60 homes contaminated, prompting Health Canada to designate the residences uninhabitable.
Vowing to help the community, the federal government pledged funds to the council so it could administer the project and ensure that renovations would be completed.
"There was never any budget set up, there was never any contract set up, but due to the emergency nature of the situation, we all agreed that we should keep going on this immediately," Louttit said.
At first, funds flowed every other month to the council, which is also tasked with providing education, health, youth services and other regional programming.
Louttit said about $11 million was received from Indian and Northern Affairs until last September, when the ministry began questioning how the money was being spent.
The council agreed to open its books and underwent a lengthy auditing process.
"They found out that in fact, Mushkegowuk Council was a good organization that knows how to run things," said legislature member Gilles Bisson, who represents Timmins-James Bay.
"But then, (they're) still, with a fine-tooth comb, picking at things ... they're trying to find ways to not flow the money."
Louttit said the council is now financially strapped and having difficulty covering other costs, such as those for school boards and a housing project in Fort Albany.
The last time he spoke to someone from Indian Affairs was at the end of August, Louttit said, at which time he was told the department would be seeking legal advice on the situation. He hasn't been able to reach anyone since then.
"I'm at a loss for what the rationale is for not paying us what we feel they owe us," Louttit said, describing the council's financial situation as "crippling."
"We want the money that is owed to us so we can carry on with our business."
A letter from Indian Affairs to the council, sent in August, concluded "the absence of well supported documentation raises doubts about the validity of some of the expenditures claimed and we therefore recommend that (the council) improve its financial practices."
Louttit questioned this finding and said Indian Affairs has refused to provide further answers or share the conclusions provided to the department in the independent audit.
The council has endorsed resorting to a legal challenge if necessary.
Citing respect for ongoing discussions with the council, Indian Affairs spokeswoman Margot Geduld said it would be inappropriate to comment.
"But I can tell you we're committed to continuing to work with the (council) to ensure quality tribal council advisory services are provided to the First Nations," she said.