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After a fraught year in the ongoing Canadian project known as reconciliation, Ottawa is capping 2017 with exactly the kind of idea that could lead to a new and better relationship between Indigenous peoples and the federal government.

Jane Philpott, the Minister of Indigenous Services, announced Dec. 6 that First Nations with solid financial track records will be eligible for stable and guaranteed 10-year funding, and that they will not be required to account to Ottawa for the money.

Instead, tribal councils will be answerable to their communities under mechanisms that are still to be negotiated. Among the possibilities is one where First Nations would be required to set specific targets – in education and health outcomes, for instance – and then report to their members on their progress.

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It's an idea whose time has come. In taking this step, Ottawa is saying, finally, that First Nations will manage their affairs autonomously, instead of being treated as financial wards of the state that have to continuously apply for the funding they need to survive.

Under the current system, Dr. Philpott says First Nations must submit an average of 130 reports to Ottawa every year in order to qualify for continued funding. And not just to one department but to more than half a dozen, including Indigenous Services, Health Canada, Justice, Public Safety and Employment, and Social Development Canada.

In the new order, those communities will be given a lump annual amount based on their needs. The amount will be guaranteed for 10 years, with indexation, and will be handed over – no questions asked – once an agreement is in place.

A similar funding system used for a First Nations reserve in Newfoundland is widely credited with helping the reserve turn itself from an impoverished outpost into a well-managed community that has full employment for its 787 on-reserve members.

It is easy to imagine why. Having predictable funding, rather than a hodgepodge of different monies from multiple federal envelopes, should allow for better planning by First Nations leadership. They will also have more time to focus on their communities, because they should be less bogged down with the bureaucracy that currently exists.

Some will grumble about Ottawa giving money to First Nations with what appears to be less accountability than before. There are Canadians who rightly question why their tax dollars produce few positive and tangible results on some remote reserves, where poverty is high, far too many young people drop out of school, there is no potable water and housing conditions can be abominable.

The former Conservative government of Stephen Harper played into those worries when it passed a law requiring chiefs and their councils to submit audited financial statements and details of their salaries to Ottawa, which in turn posted the numbers on a public website.

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Insisting on transparency and accountability is always a good thing. The Trudeau government has stopped enforcing the Harper government law (a law we supported) and is instead putting its faith in First Nations members to hold their leaders accountable for spending the money wisely.

Some will see this as risky, but there is a precedent for it.

Ottawa transfers billions of dollars to the provinces and territories every year, and most of it comes with either no strings attached, or with minimal conditions such as meeting a basic national standard.

The federal government reports to Parliament on how much it is transferring, and the provinces and territories report to their own legislatures and to their citizens on how the money is spent. It falls to Ottawa to ensure that basic federal standards and conditions are met.

The new funding system proposed for First Nations is similar, at least in theory. As such, it appears to be a workable example of the Trudeau government's oft-stated, but never clearly defined, goal of establishing a "nation-to-nation" relationship with Indigenous peoples.

After the numerous miscues involving the investigation into missing and murdered Indigenous women this year, and the absurdity of a Toronto school board banning the word "chief" from the titles of its employees (no more chief financial officer!), this is a tangible, measurable and grown-up approach to reconciliation.

Editor’s Note: A Friday editorial on First Nations funding referred to the First Nations Financial Transparency Act. The Liberal government stopped enforcing the Act when it took power in 2015, but that Act has not been repealed as stated in the editorial. Also, the editorial incorrectly said the announcement was made Wednesday when in fact, it was announced December 6.
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