The federal government's proposed First Nations Governance Act is a small step forward in amending the discriminatory Indian Act. On the surface, the draft legislation would appear to be a welcome change as it establishes new rules for band elections and financial accountability, and defines legal capacity for native bands. But, closer examination of the legislation reveals there is no requirement for native governments to hold elections, or report on the progress of federally funded programs. Furthermore, there is "limited liability" for a band government's legal capacity.

Predictably, native leaders oppose the reforms arguing a lack of consultation. It is ironic since it was native leaders who refused to take part in the federal governments attempt to consult natives. The federal government went ahead without the native leaders and spent $10 million to discuss governance issues with approximately 10,000 "grassroots" natives. And let's not forget this is draft legislation; the consultation process and cost to taxpayers aren't over.

In fact the federal government has established a House of Commons Committee to make substantive amendments to the legislation. The Committee will be holding cross-country public hearings this fall.
The effort and cost may be in vein. The Queen will be visiting Canada in September, causing the House of Commons to shut-down. As a result, all bills on the order paper cease to exist. The government will have to reintroduce the draft legislation in November or January.

Assuming the draft legislation won't die on the order paper, the proposed leadership selection criteria for native councils will put the power in the hands of those that require it - the native people. No longer will a chief have an opportunity to manipulate nominations or the eligible voters list. A band employee will no longer be subject to dismissal when a new government is formed simply because they may hold an opposing view. However, none of these new found liberties for native Canadians are worth much if elections are not guaranteed.

Currently, over 7 billion federal tax dollars are spent each year on aboriginal affairs. Under the existing Indian Act there is no requirement for native governments to reveal their financial records to their members, let alone the federal auditor general or to taxpayers. The proposed legislation will require native governments to provide their audited financial statements to any person who requests a copy. Assuming "any person" means any Canadian taxpayer the accountability is significantly better than what taxpayers were provided with before - nothing.

That said this level of accountability is not enough. Native bands still will not be required to report on the progress of federally supported - i.e., taxpayer funded - programs. Without annual audited progress reports, taxpayers will not be able to evaluate how well their money is being spent.

The proposed legislation provides legal certainty on a native bands legal capacity to sue or be sued, to contract or to borrow. However, the proposed legislation will not replace section 89 of the Indian Act, which makes it very difficult for a business/investor to sue a native band.

Section 89 protects native property and assets located on reserves from any process of garnishee, execution or attachment for debts, damages and other obligations, including taxes, however justly due and owing.

The proposed legislation is an improvement. However for true progress to occur, the final legislation must close section 89 loopholes, guarantee band elections will take place and make native governments accountable to all Canadians.