The federal government is taking eight First Nations to court in a bid to force compliance with the First Nations Financial Transparency Act, which became law one year ago.

The FNFTA requires First Nations to submit audited financial statements, along with the salaries of the chief and councillors. That information is posted publicly on the internet. So far, 570 of 582 First Nations have complied, and four others are working co-operatively with the federal government to meet the requirements.

The government has filed applications in Federal Court to force the remaining eight bands to submit financial information for the 2013-14 fiscal year. It has already suspended all funding not related to essential services, such as health and education.

Eriel Deranger

Athabasca Chipewyan First Nation spokeswoman Eriel Deranger says salaries are funded by the band's business earnings, not the federal government. (CBC)

Two of the bands, Alberta's Sawridge and Saskatchewan's Onion Lake First Nation, are in turn taking the  government to court, calling for a stay, or halt to the proceedings.

Their application questions the legality of the FNFTA on the basis that it violates treaty and aboriginal rights as well as sections of the Constitution that ban discrimination and entrench the rights of aboriginal people.

Any action the government can take against the bands is on hold until the application is heard in Saskatoon Federal Court on Aug. 19.

No one from the Sawridge Band was available to discuss the legal action, and the Onion Lake Band declined any comment while the case is before the courts.

In documents filed with the court, Sawridge states that disclosing its finances will place it at a competitive disadvantage, as much of its income is derived from its business holdings.

A similar argument comes from the Athabasca Chipewyan First Nation, which owns 18 businesses servicing the nearby oilsands. The main holding company, Acden, is headquartered in Fort McMurray, Alta., and worth an estimated $250 million. The Athabasca Chipewyan First Nation's chief and council serve as the company's board of directors, said band spokeswoman Eriel Deranger.

She said the band's administration and salaries are paid out of company profits, not from federal funding, which puts the First Nation in a unique position.

"Why are we required to disclose our non-public dollars to the public?" she asks.

"We are not receiving public funding and this could actually be quite harmful to our nation considering most of our funding comes through our businesses."  

The band does use federal money for health and education. But Deranger points out that money is paid not to the band but to the Nunee Health Authority and education funding is paid to the Athabasca Tribal Council.

Sean Jones, a Vancouver lawyer who specializes in aboriginal law, believes bands like the Athabasca Chipewyan and Sawridge have a valid point.

"Because First Nations have commercial enterprises that compete in the commercial mainstream, their competitors and people they're negotiating with would have access to this information."  

Jones expects a complex and lengthy legal battle as the case involves unresolved legal questions, such as whether First Nations were adequately consulted about the requirements, or whether they needed to be consulted at all.

"These are all complicated legal issues that do need to be addressed," he said.