Federal Court Orders First Nation to Disclose Financial Information it had Withheld From Members

Tuesday, December 2, 2025

In its recent decision in McCarthy v. Canada (Indigenous Services), the Federal Court of Canada ordered Indigenous Services Canada (“ISC”) to disclose to Hans McCarthy, a member of Frog Lake, portions of Band Council Resolutions (“BCRs”) authorizing withdrawals from Frog Lake First Nation’s trust. The BCRs authorized withdrawals to pay the salaries and expenses of Frog Lake’s Chief and Councilors. 

The Court found that information about these salaries and expenses was “public information” to members of Frog Lake because of a law called the First Nations Financial Transparency Act. The First Nations Financial Transparency Act is a law enacted by the Harper government. Its purpose is to “to enhance the financial accountability and transparency of First Nations.” It does this by requiring First Nations to:  

1. Prepare consolidated financial statements annually and have them audited; 
2. Prepare a document entitled “Schedule of Remuneration and Expenses” that sets out, separately, the remuneration paid and the expenses reimbursed to their chief and each of their councilors;  
3. Provide these documents to their members and publish them on their websites. 

The Act creates a variety of remedies in case a First Nation does not comply with its obligations. These include giving members the right to apply to a court for an order requiring the disclosure of this information and empowering the Government of Canada to withhold grants owing to a First Nation until it has complied with its obligations.  

This law was criticized by many as racist and patronizing when it was enacted. However, the Court’s decision is an important reminder that this Act is still in force, and that it gives First Nations’ members a right to see these records.  

While there may have been concerns about transparency in the McCarthy case, this should not be taken as representative of First Nations across Canada. The finances of First Nations across Canada are heavily scrutinized by people inside and outside their Nations. First Nations are subject to myriad reporting requirements, including through their participation in government funding opportunities or their business operations. First Nations’ finances must be transparent to participate in these opportunities. 

Preparing audited financial statements are a basic cost of doing business for First Nations. Many First Nations have rules and practices governing the transparency of these documents and other internal information, including leadership salaries, and make this and other information available to their members online, through Chief and Council meetings, at Annual General Assemblies, and through other means.  

Of course, like any other entities with business operations, First Nations may have to carefully control access to and the spread of certain financial information. This could include, for example, revenues received under impacts and benefits agreements. Often, there are contractual requirements that require First Nations to control access to this information. There are also competitive reasons for controlling the spread of this information, as First Nations’ competitors could use that kind of confidential information to their advantage.