The federal government could withhold money from the Waskaganish band or freeze its funds because the band diverted money intended for housing renovations into covering its out-of-control deficit.
The band got $1 million from the federal government in a 1997 deal on the express condition it goes to housing renovations. But $450,000 was put toward the band’s run-away debt.
The band’s total debt isn’t known, but it is $6.3 million in the hole just in its “special projects fund” (see sidebar).
Malcolm Moses, band treasurer, reportedly argued that if nothing was done about the run-away debt, Indian Affairs could step in and put the band under trusteeship.
But the diversion of the funds isn’t likely to make Indian Affairs any happier. Officials said bands must respect their side of the deal if funds were meant to go to housing. Otherwise, the federal government could take action, according to Bruce Labrador, a housing analyst at Indian Affairs.
“What I do in general, if we have confirmation funds were redirected to something else, is we would have to intervene and freeze the money in question,” said Labrador. “We would be withholding funds for subsequent years.”
How serious was (or is) the risk of trusteeship? Some wonder if Moses’ statement wasn’t perhaps just a scare tactic for taking the housing money because of pressure from the band’s auditors.
Moses was on leave and unavailable for explanations. His replacement, Kathy Black, refused to comment. Chief Billy Diamond didn’t return phone calls.
Residents of 69 old homes in Waskaganish have patiently awaited the renovations for many years.
The cedar and white-siding homes, occupied mostly by Elders and young families, are up to 25 years old and badly in need of repairs.
They have damp and moldy basements with a thin concrete floor and plywood walls. Water leaks in the spring-time. The mold sometimes smells up the whole house, and this is causing health problems for some residents. The houses are also drafty. Some have rotting walls.
But the band’s debt has soared so high, growing by over $1 million in just the last year, the renovations got sacrificed.
The community was never consulted about the move and only found out later what happened. Many residents were dismayed.
“That’s not right. It’s more important to renovate those houses,” said a man who’s lived in one of the white-siding houses for 19 years. “To me, it’s time to be repaired now. It’s really bad now. In some of the houses you can smell the mold. It’s not good for young kids.”
The diversion of the funds seems like a snub to the Cree Regional Authority, which secured the money in August 1997 after years of difficult negotiations with Ottawa.
At the time, the CRA sent a letter to the bands saying: “It is important that allcommunities keep a clear and separate accounting of these amounts in your financialstatements… Funds cannot be reallocated to another purpose but
rather, must be used for the specific purpose provided.”
