A financially stable and “debt free” MNO:

A remarkable turnaround achieved—together

President LipinskiMétis Nation of Ontario President,
Gary Lipinski

“For the MNO to grow and expand its operations, we need to strengthen our financial management and administration.” — MNO President Gary Lipinski, May 6, 2008

Dear MNO Citizens,

As my term as President is coming to a close, I want to provide Métis Nation of Ontario (MNO) citizens with an update on the current state of MNO finances and provide a wider perspective so we can all appreciate what has been accomplished in this area by working—together.

When I became President in May 2008, one of the more daunting challenges the MNO faced was the financial state of the Métis Nation. The MNO had amassed a cumulative debt of $4.2 million, and we were under third party managment.  This debt was largely made up of repayment amounts owing to government based on a series of audits that had been completed on the previous administration, covering the years 1999 to 2003, as well as the MNO’s failure to properly file and pay various taxes, including, source deduction for employees.  

Some of our vendors, including, the expense claims of MNO citizens who were all volunteers, had not been paid for over a year. Many MNO citizens will remember the state of affairs first hand. Simply put, we were in dire financial straits, which led us to postponing the 2008 MNO Annual General Assembly (AGA) because we were operating on fumes.

We could have tried to continue to keep up ‘business as usual’ by denying the results of those audits until we were likely forced into bankruptcy. Instead, the MNO’s newly elected leadership made hard financial decisions, developed a credible plan and turned things around. 

I will always be grateful to the then Ontario Minister of Aboriginal Affairs, Michael Bryant, who committed to working with me—as a newly elected President—to keep the MNO afloat. Personally, I, along with other members of the MNO Executive, had many sleepless nights back then on whether we could make payroll from week to week, or even keep MNO afloat. 

However, with the support of a strong Provisional Council of the Métis Nation of Ontario (PCMNO), a strong administrative support team, including, Chief Operating Officer (Doug Wilson), and, the will of MNO citizens, we turned things around.  Today, the MNO is regarded as one of the most accountable and financially stable Métis governments throughout the Métis Nation and amongst other Aboriginal governments.  

We now have strong financial policies and accountability systems in place, we pay our bills on time, we adhere to approved budgets, we report to our citizens in a timely manner, and, we live within our means. 

That said, the adage that a people who don’t remember the mistakes of the past will repeat them is worth keeping in mind. We will not be able to advance Métis rights or expand services to Métis citizens if we do not stay the course when it comes to keeping our financial house in order. 

The gains the MNO has made over the last eight years flow from being a credible partner that is financially responsible and keeps it word. We must not return to the old way of doing business.

Reigning in the deficit

Some of the results achieved through the support and effort of our citizens, elected leadership at all levels of the MNO and our administration includes:

The MNO has been able to eliminate its cumulative 2008 deficit (as set out in its 2008/09 financial statements that were approved by the MNO Annual General Assembly) and create a surplus (i.e., assets minus liabilities). As of March 31, 2015, the MNO’s cumulative surplus was $0.5 million versus a $3.5 million deficit in 2008/09 – an improvement of over $ 4 million in the last 7 years.  

 

Turning the Deficit around

A major reason why the MNO now has a surplus is because we have significantly reduced the debts owed to: the Canada Revenue Agency (CRA); the Ontario Government for the Employer Health Tax (EHT); Service Canada; and Health Canada; all of which totalled $4.6 million in 2008.

Essentially, before 2008, funds being received were not directed to paying these necessary taxes and debts as required. By not paying these amounts, however, it did not mean the debts disappeared. It just meant that these amounts steadily increased and would have eventually pushed the MNO in bankruptcy if not addressed.

As at March 31, 2016, both the CRA and EHT have been fully repaid and only $494,000.00 remains owing to Service Canada and Health Canada. The negotiated repayment plans will see these debts fully extinguished by March 31, 2018 if not sooner.

Implementation of financial policies and procedures

In November 2009, the PCMNO adopted and implemented stringent Financial Policies and Procedures. This put an end to the “old way of doing business” in the MNO once and for all. 

However, these policies only work if there isn’t political interference in day-to-day operations. While the MNO’s elected leadership sets these policies, MNO staff must be responsible and able to implement these policies consistently, without fear of political reprisals, and they must be applied equally to all.       

In addition to implementing necessary policies, the MNO Finance Branch, after an in-depth third party analysis, was doubled in size, and, now has two Certified Accountants and six other trained and qualified staff in place. With a solid Finance Branch and the right systems, the MNO now has the ability to effectively report to a myriad of funding agreements (i.e., over 140 annually) each with different accountability requirements.

Doubling MNO revenues in less than a decade

Growth in MNO Revenues

Since 2008, the MNO’s revenues, including, funding received by the Métis Voyageur Development Fund, has more than doubled—from around $15 million in 2008/09 to around $30 million in 2014/15.

In the same period, the number of contribution agreements between the MNO and funders increased from 37 to 141—representing a 281% increase.

The MNO’s increased credibility in the eyes of government has led to multi-year contribution agreements, which were never possible previously and that allow MNO to deliver key programs and services to citizens across the province in health, education, training, etc. Over the last eight years some of these agreements include:

  • In 2010, the MNO entered into a five and half year Aboriginal Skills and Employment Training Strategy (ASETS) agreement with Services Canada for $30M to support the work of the MNO’s Education and Training Branch. In these negotiations, the MNO was able to secure the full Ontario Métis allocation that was previously lost prior to 2008. After the original agreement expired, it has been renewed on an annual basis.
  • The MNO now enjoys an “evergreen” Aboriginal Healing and Wellness Strategy agreement (i.e., does not require annual renewal) for $8.7 million a year to support the work of the MNO’s Healing and Wellness Branch;
  • The New Relationship Fund agreement supports the work of the MNO Lands, Resources and Consultation Branch, MNO Community Councils and MNO Regional Consultation Committees. The initial five year agreement provided $2.1 million a year. It was renewed in 2014 for four years at $2.2 million annually; and
  • Since 2011, a ten year, $30 million agreement with the Ontario Government for the Métis Voyageur Development Fund (MVDF) has provided $3 million a year to support Métis entrepreneurship and investment in Ontario’s resource sector.

Timely payments to MNO citizens, community councils and vendors

Since 2008, the MNO has significantly reduced the delay in making payments to our vendors, community councils and our own citizens. For example, on average, trade payables are paid in less than 30 days. This is a significant change in the day-to-day realities from the old MNO.

This flows from the fact that the MNO is now able to effectively manage its cash flow because its spending is based on approved budgets and it effectively reports to funders so payments are not withheld or delayed. These improvements are also due to the fact that MNO now employs project and fund accounting and more sophisticated financial tracking software.

Today, any delays in payment are mostly due to a lack of adequate financial reporting (i.e., expense claims not being properly completed and coded, receipts not being provided, etc.), rather than the MNO not having money in the bank.

Increasing financial support to community councils

Prior to 2008, the MNO did not provide any ongoing financial support to MNO community councils and their important work. Councils had to rely entirely on the good will and efforts of volunteers. In 2008, the MNO’s new leadership identified being able to at least provide some capacity support to councils as a priority.

Through the MNO’s New Relationship Fundagreement with Ontario, over the last four fiscal years, $1.6 million hasbeen dedicated directly to community councilsto support their work at the local level and MNO has a full complement of highly educated and skilled staff working directly with councils on consultation relatedactivities. In addition, through this consultation work, the MNO now has various agreements with industry that provide additional ongoing funding to Councils.

While not nearly enough, this injection of at least some resources has helped community councils play their key roles in MNO self-government. It is hoped that as additional business opportunities come on line through Infinity Investments more streams of revenue will be directed councils.

Putting in place the building blocks for economic self-sufficiency

While the MNO has enjoyed considerable success entering into funding agreements with other parties, these still leave the MNO dependent on outside governments and third parties. As I stressed at the 2013 AGA, self-government is not something that someone else gives you. It is something you must build yourself.

It is for that reason that one of my proudest moments as MNO President and as a citizens was when the 2013 AGA unanimously passing the MNO’s first Law—the MNO Prosperity and Self-Sufficiency Law—which sets out the structures that will move the MNO towards economic self-sufficiency. This Law provides the foundation for real economic self-sufficiency—not just political rhetoric.

The passage of the Law came on the heels of an announcement with the Minister of Energy just prior to the 2013 AGA that the MNO with its investment partners had won 50+ long-term, green energy contracts through the Ontario Power Authority’s (OPA) Feed-in Tariff (FIT) program. The contracts pointed to the kind of economic opportunities that the MNO could now build upon.

Since being awarded these contracts, the MNO’s partnership with Carbon Free Technologies through MNO-Brightroof Solar Limited Partnership has flourished. These projects have made the MNO a sought after partner in the solar business that are putting the MNO on track to someday turn profits from these projects over to our Métis government, unencumbered from the requirements of outside government and agencies.

The Law also established Métis Infinity Investments, which will allow the Métis Nation to pursue even more economic opportunities in the future.  In the past, Métis businesses were often on the outside looking in while other businesses or Aboriginal communities secured opportunities. Now, we have our own business arm to pursue opportunities free from political interference. Already, Infinity Investments has secured significant contracts with other partners and will develop those, which will eventually result in even greater revenue streams for MNO.    

Our financial credibility, solid reputation, Economic Prosperity Law, Infinity Investments and MVDF are the necessary building blocks for us to achieve real economic self-sufficiency and self-government as contemplated in the Statement of Prime Purpose. I look forward to seeing others take us to the next level in the years to come.

The way ahead:  We cannot go back to the old ways

As you can see, through our collective sacrifices and efforts over the last eight years, we have achieved previously unimaginable results. However, while we have achieved an amazing turnaround, we must be vigilant to not fall back into old habits. We owe it to our children and grandchildren that they inherit a debt-free MNO!

While financial issues are often not as exciting as Métis rights, I truly believe they are fundamental to self-government. Self-government comes from the MNO’s legitimacy in the eyes of our own citizens—not from others. If we cannot properly manage our financial affairs, how can we say we are self-governing?  Poor financial management breaches the trust our citizens have in the MNO.  We must never breach that trust.

As MNO President, I am extremely proud of the financial state of affairs we are handing over to the next administration.  I want to thank the PCMNO and the MNO Executives since 2008.  Change starts at the top. While saying “no” is not always politically popular, these individuals made hard choices to ensure the MNO was protected into the future. I also want to thank community councils for their sacrifices, the MNO’s staff and administration as well as all citizens who gave solid direction to tackle these issues at repeated MNO AGAs.  We did this—together!

Gary Lipinski
MNO President

Published on: April 25, 2016

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