Thunderchild 2 – Take the Power Back

by reconciliationproject

My last post was about the Thunderchild case – a case which holds that even if First Nations were financially self-sufficient, failure to agree to any terms and conditions (and funding) from the government of Canada would result in third party management.

It’s an odd finding, since the power to place a First Nation in third party management usually arises from a contract between that First Nation and the Crown. Thunderchild First Nation protested terms within its funding agreement it didn’t agree with by failing to sign the funding agreement. The Federal Court held that even in absence of a contract, the government of Canada has the power to impose third party management on a First Nation.

This post is about a possible strategy First Nations, even those currently in third party management or co-management, might consider in order to mitigate the impacts of third party management. Many First Nations complain, rightfully, that being placed in third party management removes a substantial amount of decision making from the First Nation council and places that control in the hands of an administrator, often remote from the community, which is not accountable to the community.

It’s a pretty simple strategy, actually, but before I go there, it’d be helpful to provide some clarity about third-party management and its relationship to governance. Third party management is less about governance in the context of self-government and law-making and more about governance in the context of administration.

This is important because many important decisions at the community level are essentially administrative in nature. Moreover, many of those decisions are left to the discretion of the First Nation. Those decisions, even if discretionary in nature, must still be consistent with the law.

A consolidated funding arrangement provides funding, and includes terms and conditions on how that funding is to be administered. However, funding arrangements are not exhaustive, particularly where the terms and conditions of program and service delivery on reserve are concerned. For example, First Nations cannot discriminate in the delivery of programs and services (for example, by engaging in gender discrimination,

I would suggest that the terms and conditions of a consolidated funding agreement couldn’t violate, or be interpreted and applied to violate, say, the Canadian Human Rights Act. The same could be said for any other number of federal laws and regulations. It really doesn’t matter whether the party responsible for administering the program or service is a third party administrator or a First Nation government.

There is another source of potential laws which could seriously reduce the discretion provided to administrators of First Nations funding – First Nations by-laws developed under s.81 of the Indian Act. I wrote an earlier post ( on a private member’s bill to repeal section 82 of the Act (which gave the Minister a veto over First Nations laws). I can say now that I was dead wrong and my concerns about the s. 81 repeal (that the Crown would reinsert the Minister’s veto power) were apparently unfounded. This might be very good news for First Nations finding themselves in third-party or co-management situations.

It’s helpful at this point to stress that third party management relates only to administration of First Nations government operations. It doesn’t strip First Nations of law-making authority.

Until the repeal of s. 82, that would’ve been an insignificant distinction, since the Minister was able to effectively prevent any First Nations from exercising law-making authority. With the repeal of s. 82, the distinction becomes critical.

While First Nations in third party may not be able to control administration of programs and funding, they are able to pass s. 81 by-laws. There is nothing preventing a First Nation in third party, particularly one such as Thunderchild, from passing First Nation laws which require certain conduct from First Nations programs. Indeed, a legislative (or even regulatory) base for programs, services and operations while rare on First Nations issues, is not uncommon at all in social, economic or environmental policy.

When I first thought of this tactic, I was thinking about laws which would require some minimum level of service for programs and services. Alternatively, I was wondering about laws and regulations which would govern the conduct of administration in dealing with programs and services (how the housing list is maintained for example).

The simplest and most brazen law would be one which requires First Nations Administration (whether controlled by the First Nation or not) to seek the consent of the Council prior to making changes in how programs and services are delivered. Me, I’m not a big fan of that one for two reasons. First being its too brazen for me. I don’t think it’s particularly helpful for First Nations to try to use laws to directly circumvent contract terms which they themselves have already agreed to (this is why Thunderchild presents a good test case for this strategy – it disagreed with the terms). The same holds true for service delivery: I don’t think a First Nation law, mandating no boil water orders in the next 5 years would be particularly helpful. Mainly because the law would be applicable to the First Nation (not the funder). A law could state; however, that the First Nation’s public works department has to allocate its resources based on need (need defined by the technicians, by established criteria or both).

Second, if you step back and think about it, First Nations laws on administration offer First Nations an opportunity to divorce administration (programs, services and benefits for individuals or sub-communities) from more legislative and political aspects of governance. A very long time ago, I took a course on Nation Building with these guys, and it struck me that its generally a very good idea to remove politics from business development and administration of programs and services (ie – that these should be managed independent of Council, but should be accountable to Council). This already happens for almost all First Nations, the existence of a law really just formalizes the arrangement.

In fact, I believe there are several First Nations which don’t rely on government funding and which do use independent authorities (which many First Nations do) for delivery of programs and services. Using laws to govern that relationship might be redundant for these First Nations from a governance standpoint, but would nonetheless be helpful in terms of reducing the amount of control the government imposes on them through providing funding to those independent bodies.

Moreover, I find that Chiefs already have enough to worry about in terms of managing ‘political’ issues – negotiations with the government, legislative issues and responding to concerns from their constituencies. It’s a lot to ask to add the need for detailed knowledge of departmental funding policies, program and services criteria, human resources issues, etc.

Such separation would also definitely remove the sting of third party management, especially for First Nations such as Thunderchild, who’s great crime appears to be they are unwilling to enter into contracts that they find unacceptable – and are simply unwilling to accept government funding at any cost.

Further development of First Nations laws provides a means for increased control over programs and services on reserve and could serve as a counterbalance to the apparent tyranny (I don’t have experience with them, but it sounds pretty bad to me) of operating under existing funding arrangements.

It also provides a means for First Nations to formalize what for many are likely existing accountability mechanisms for administration, to regulate the conduct of administration and to formally separate administration of funding, program and service delivery, and leadership.

It does not decolonize First Nations governments. In fact, this strategy uses what for many is a colonial instrument, the Indian Act, in order to exert more control over how programs and services are delivered – to counterbalance the unsavory terms of funding agreements. Finally, such laws would need to be carefully drafted and could pose implementation challenges – particularly if the intent is to compel greater funding (an outcome I find extremely unlikely, at least based on the strength of such a law alone).