Ottawa asked to account for $10 billion (in trust accounts on behalf of aboriginal people). A.J. Jamieson.
First Perspective, April 2000 vol 9 no 3 p1,4 (English)

On the heels of Human Resources and Development Canada's billion dollar funding fiasco First Nation bands are asking the federal government to explain what happen to more than $10 billion in trust accounts managed by the federal government on behalf of aboriginal people.

Indian trust accounts are a little known aspect of federal responsibility and the court actions from across the country, turn the tables on the financial accountability issue.

Instead of questioning Aboriginal leadership about federal funding, Ottawa is now being asked to be fiscally responsible and Ottawa's management practices are also being scrutinized

The lawsuits are based on six court actions since 1996 from across the country. "It's a major concern," said Dennis Whitebird, a regional chief with the Assembly of First Nations.

Whitebird said the lawsuit underscores the need for an overhaul of the paternalistic trust account system. He predicted more court actions as more bands scrutinize their financial relationship with Ottawa.

The Canadian government has acted as a trustee since 1867 for native adoptee, minors, and mentally incompetent individuals as well as for bands with royalties from oil, mineral, or natural gas revenue.

Whitebird said there are many examples of mismanagement of Native trust accounts by Indian agents, including using trusts to buy farm equipment or services for reserves.

"The Department of Indian Affairs used trust accounts to pay off health services which they should not have been doing because the money was held in trust," he said.

When Parliament introduced the Indian Act in 1876, it legislated Indian Affairs as the agency that would manage nearly all aspects of the lives of Indian people in Canada, including their financial affairs and trusts.

Indian Affairs maintains two types of trusts.

One is for First Nations bands and usually involves a band's revenues from land transactions or oil and royalties.

The other involves trusts for certain individual Indians, such as minors, mentally incompetents and adoptees.

These accounts in band and individual trust funds total $1.05 billion. White bird and Hatfield said Ottawa and Canada's First Nations bands are now working toward amending the section of the Indian act concening the trust account system.

Whitebird said the aims is to give management control of trusts to First Nations bands for self-administration.

'I'm sure that when First Nations communities administer their own trust accounts, they'll probably access better dividends on their money," Whitebird said, noting that a few bands have already negotiated self-management of trusts accounts.

Acting director general of the revenue registration and band governmance section of Indian Affairs, Ray Hatfield said he could not discuss details of cases before the courts. The department oversees Indian trusts. Hatfield said the areas of contention revolve around disputes on trust account interest rates, entitlement, distribution or claims that funds were not received.

Six Nations Director of Land Claims Research, Phil Montour confirmed Monday he is aware of the suits but said the Six Nations of the Grand River is not part of that series of lawsuits.

He added that outstanding trust account claims by Six Nations will be addressed over the coming months as the federal government and the band develop a process to negotiate requests by Six Nations for an accounting of the community's assets.

Six Nations initiated a court action in 1995 against the Ontario and federal government requesting an accounting of it's assets. Those assets are believed to be from land sales, surrenders, and leases supposedly held for the benefit of people of the Six Nations by Canadian governments.

The Six Nations were given about 950,000 acres of land for it's military support during the American Revolution and the war of 1812 in the Haldimand Deed. The Six Nations currently control less than 5 per cent of the original land base.

Montour said the Six Nations trust accounts are all pre-confederation (1867) and the community had been involved in the federal specific claims process but because the process would not hear pre-confederation claims the community was forced to take the governments to court in 1995.

He added that the he feels negotiations between Canada and Six Nations over Six Nations assets will at first have to address areas amounts of Six Nations land that have had little or nothing paid on them.

"Then we'll look at how much was paid, if it was, and ask what happened to it," explained Montour. "Then we'll want to find out about assets that should have been paid but weren't,"

Montour says the negotiations will look at "creative solutions" that may see agreements that include the provision of health care, for example rather than be reimbursed for missing or unaccounted for trust funds.

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