$12M in funding still being withheld from First Nations

Forty-three First Nations are waiting on the Liberal government to release more than $12 million in funding which was held back by the previous government under a controversial law that requires bands to post financial statements online.

The Liberals "were very clear prior to the election," they would repeal and not enforce the First Nations Financial Transparency Act (FNFTA) sayslawyer Robert Hladun, who represents Saskatchewan's Onion Lake Cree Nation.

He claims the First Nation has had $1.6 million held back over the last two years money used to support over 800 employee salaries and access to housing.

"Each day that these funds are being withheld programs and services are being effected." saidHladun.

Law defied, millions withheld

UndertheFNFTA,First Nations can have funding withheld if the they fail to post full financial audits on theIndigenous and Northern Affairs Canadawebsite.

Aboriginal leaders have called the legislation prejudicial because it requires reporting of non-taxpayer supported streams of income. First Nations claim that informationis already provided to government, and that publicizing itviolates treaties as well as protections toprivacy underthe Charter of Rights and Freedoms.

CBC News has learned that shortly after the first deadline to comply passed a year ago, the Conservative government froze $4.3 millioninfunding.

Documents obtained throughAccess to Information requests contain letters sent to51 First Nationslast year.

Theyinclude warnings of courtaction andabreakdown of which funds would be frozen.For some First Nations, it was aslittle as $399, forothers as much as $277,516.95.

Aroundthe same time the governmentalso announced it was taking six First Nations to court, including Onion Lake, in an attempt to force them to comply.

Initially some of thatmoney was paid outas some First Nationscame into compliance with the act.

However in the year sincethe department says theamount of funds frozen hasgrown to approximately$12.1 million, while the court case has stalled.

Many stillnot complying

As the fall election sawthe Liberals replace the Conservatives in power, theFNFTAtook a beatingin court.

Onion Lake won astayof proceedings against the government, when a federal judge ruled the former aboriginal affairs minister Bernard Valcourtfailed to consult First Nations on the legislation.

Thatrulingeffectively stalledthe enforcement of the act in the courts, and the government is notpursuinglegal action against any of the 43 First Nations which are currently not in compliance with it.

The law, however, remains on the books. It's not clear what will happen next.

Department officials have said the money is sitting, waiting to be released.

Hladunconcedes the law can't be changed over night. Buthe says releasing the money would be a good start.

"We've written, there has been no response, that is concerning at this point," he said.

In a statement, thenew federalIndigenousAffairs Minister Carolyn Bennett said she disagrees with the act, and is willing to work with First Nations on a resolution.

Meanwhile Justice Minister Jody Wilson-Raybouldtold reporters in Ottawa that the act ispart of a suite of First Nations legislation that is under review.

"We'll look at all pieces of legislation as they impact indigenous rights," she said.

So far there are no commitments to release the frozen funding.