Dysfunctional governance: eleven barriers to progress among Canada's First Nations.

Author:Graham, John
Position::FIRST NATION GOVERNANCE - Company overview

The blizzard of media stories in late 2011 on the sorry housing conditions in Attawapiskat in northern Ontario, followed by the extensive coverage of the Crown-First Nations Gathering in Ottawa in January 2012, has focused attention on what is surely Canada's most pressing social policy challenge: how to deal with the plight of highly distressed First Nation communities.

Aboriginal and non-Aboriginal commentators alike made reference to Sheila Fraser, the former Auditor General of Canada, who during her ten-year tenure directed some 31 audits on Aboriginal issues. Reflecting on this experience in her final report and subsequent public addresses, she noted that "what's truly shocking ... is the lack of improvement. Last year, Indian and Northern Affairs Canada reported that between 2001 and 2006 there was little or no progress in the well-being of First Nations communities. In a wealthy country like Canada, this gap is simply unacceptable." (1)

Fraser was referring to the Community Well-Being (CWB) Index, developed by researchers at Indian and Northern Affairs Canada, which uses census data and is based on four factors: education (high school and university), housing (quantity and quality), labour force (participation and employment) and income (total per capita). Figures 1 and 2 compare the 2006 CWB scores for First Nation communities with those in the rest of Canada. The sizable gap in the CWB scores between the two sets of communities--on average about 20 points--is immediately apparent. This gap is particularly pronounced in the prairie provinces: in Saskatchewan, for example, the average gap is 28 points, roughly 40 per cent higher than the national average. In addition, the range and dispersion of well-being scores is much greater among First Nation communities, indicating more inequality among these communities than in the rest of Canada. A large percentage of First Nation communities (close to 40 per cent) have CWB scores lower than the worst-off non-First Nation communities.

The results from the 2006 census were less than encouraging about progress toward closing this well-being gap. (2) The good news is that the CWB scores for a large majority of First Nations (64 per cent) were either stable or improved over the 2001 to 2006 period. Nonetheless, scores for 36 per cent of First Nations declined, compared to only 10 per cent of other Canadian communities. Perhaps most disheartening is this finding: the gap in community well-being between First Nation communities and those in the rest of Canada has widened, not narrowed, since 1996. In 1996 the average gap was 17 percentage points, in 2001 it was 16 points, and in 2006 it was 20 points.


The widening CWB gap is particularly perplexing in light of the number of new initiatives affecting First Nations over the ten-year span. These include significant increases in funding in several program areas (such as water and waste water, housing, education, economic development and residential school healing); the settlement of numerous specific and comprehensive claims; new self-government initiatives (Nisga'a Treaty, First Nations Land Management Act); the development of a multitude of new, First Nation-controlled institutions (such as the National Centre for First Nations Governance); and the adoption of new legislation to remove barriers to economic development and improve financial management (such as the First Nations Fiscal and Financial Management Act). It is also noteworthy that the federal government annually helped roughly 25,000 First Nation individuals and Inuit pursue postsecondary schooling over this time period--surely a significant contribution toward the goal of achieving enhanced community well-being.


Given all of these initiatives, why is the CWB gap widening instead of narrowing? In this essay I make the case that a highly dysfunctional First Nation governance system is a significant brake on achieving better results for First Nation communities. This dysfunctional system may not be the sole reason for a widening CWB gap: some argue that a 2 per cent cap on annual growth of most federal program expenditures is an important contributor; others point to geographic isolation and the lack of economic opportunities; still others argue that the cumulative and ongoing legacy of colonialism is the key explanatory factor. But poor governance is surely a major culprit. In my judgement there are 11 elements of the First Nation governance system that, when combined, produce a degree of dysfunction in governance that is unmatched in any other jurisdiction in Canada.

  1. First Nation governments are huge, perhaps the largest local governments in the world

    The governments of these communities are likely the largest local governments in the world as measured by per capita expenditures. Table 1 indicates that per capita expenditures are roughly ten times those of the average Canadian municipality.

    Given that First Nation governments have a much greater set of responsibilities (approximating those of a province, a school board, a health board and a municipality combined), these comparisons are hardly surprising. Admittedly, the large size has some advantages. For one thing, First Nation governments are major employers, an especially important factor for those in remote locations. (3) But large size brings political risks, particularly in situations where the government is the "only game in town."

  2. First Nations governments lack the array of checks and balances that governments in other parts of Canada face

    International evidence suggests that countries ranking high on governance indicators have relatively balanced systems--they have a robust and effective government sector balanced by an independent system of justice, a strong private sector, independent media and an active and large set of voluntary organizations (civil society). Such organizations cover all aspects of society, from sports clubs to service delivery agencies to church groups to public policy advocacy groups. These latter groups are important in watching governments carefully and raising alarm bells when they appear to stray.

    First Nation governance systems lack this balance. The executive and legislative functions are fused in chief and council and there is no official opposition to hold the government to account. And not only are the voluntary and private sectors (4) underdeveloped, but there are few independent review mechanisms like ombudspersons, First Nation-run courts, auditing agencies or ethics commissions. Finally, media in First Nation communities--typically community papers or radio stations--are run by the First Nation itself or some other First Nation regional body and are not independent of First Nation governments.


    This lack of balance threatens accountability, heightens risk should the government not perform, has governments undertaking activities (like running businesses) that traditionally fare poorly, and creates "in" and "out" groups (often defined by family affiliation). The "outs" have few options other than to blame and complain.

  3. The number of politicians per capita knows no parallel in Canada and many are full-time and salaried

    The Indian Act (section 74.2) states that the council of the First Nation shall consist of one chief, and one councillor for every hundred people, with the number of councillors being no less than two nor more than 12. The Indian Act also allows a First Nation to choose a custom election process where this 1-to-100 ratio can be altered. Whatever the route, because First Nation populations are so small, the number of politicians per capita is always much larger than in any other jurisdiction in Canada. Moreover, it is my experience that the positions of chief and councillor are usually full-time jobs with full-time salaries. A variation with small First Nations, which may not be able to afford to pay salaries for every councillor, is allowing full-time employees of the First Nation to sit on council. This variation, not permitted in other Canadian jurisdictions, creates its own set of problems.

    Given the incentives at play, it is no surprise that elections are hotly contested. (5) Coupled with short election cycles (the Indian Act calls for elections every two years although the custom election option can vary this), the results are often...

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