Prime Minister Stephen Harper says First Nations communities must develop "strong, accountable" systems of self-government in the long run, as Ottawa grapples with a housing crisis in the remote First Nations community of Attawapiskat.

Local leaders in the Northern Ontario town of 1,800 declared a state of emergency about a month ago, as winter moved in and some residents were living in unheated tents, while many others suffered in crowded, substandard housing.

The crisis has propelled the issue of living conditions in First Nations communities onto the national agenda, and will likely be a hot topic during scheduled talks between the Crown and aboriginal leaders on Jan. 24.

On Friday, Harper was asked by reporters how he sees Ottawa's relations with the First Nations community evolving.

"I think the long-term goal of everybody is to have strong, accountable systems of self-government for aboriginal communities," he said at an event in Burlington, Ont.

"I think we all realize we're not going to get there in one giant leap, but I continue to look forward and continue to enjoy working with Chief Atleo and other communities to move us in that direction," he told reporters.

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Harper's comments came a day after he met with Atleo, who called the upcoming meeting with aboriginal leaders an opportunity.

"We can perhaps consider this moment and the idea of us gathering as a moment to reset the relationship between First Nations and the federal Crown," Atleo told the prime minister Thursday.

Federal intervention

Ottawa has placed Attawapiskat under third-party management, meaning that the community's finances have been taken out of the hands of the local band council.

The government says its top priority is to ensure that residents have adequate shelter for winter. But federal officials also want to know how $90 million directed to the community since 2006 has been spent.

What's third-party management?

The federal government has put Attawapiskat First Nations under third-party management. Here are five things to know about the government's intervention policy and Attawapiskat.

Aboriginal Affairs Minister John Duncan has said that appointing an outisde manager allows Ottawa to take immediate action to address the housing crisis and health and safety issues.

But the intervention has angered the chief of Attawapiskat, who called it "mere political deflection."

In a statement issued Thursday, Chief Theresa Spence said, "It is incredible that the Harper government’s decision is that instead of offering aid and assistance to Canada’s First Peoples, their solution is to blame the victim."

"This rationale is mere political deflection as the conditions cited by the department are present in numerous other First Nations communities," said the statement from the chief.

Emergency response

Duncan said that on an emergency basis "there is adequate clean, dry available shelter with running water and electricity available in the community." A healing centre, sportsplex and other buildings could house people in need of shelter "today," he said on Thursday.

The healing centre, however, is about five kilometres out of town on a rough road, the CBC’s Adrienne Arsenault reported from Attawapiskat, and the building does not have running water or phone lines.

"When that statement was made yesterday, people here in Attawapiskat said, ‘Today? Really?’ It is a lot more complicated than just saying there is a building, there are people, put them in, let’s go, we’re done," Arsenault said. "You are dealing with elderly people and children, and this will take some time."

Spence said a government official had interrupted an emergency planning team "in the midst of implementing a strategy to assist people living in tent frames and shacks" to tell them about the management change.

The council alleges that third-party managers in other First Nations in Canada "are allowing similar conditions to exist while offering little or no [aid]."

For almost 10 years, the band has been under co-management, an administrative system in which the department of Aboriginal Affairs and Northern Development (AAND) and the band agree on a co-manager who is paid by the band and gets signing authority for all accounts containing AAND funding.

Under third-party management, all funding goes through a manager appointed by the department to administer it. The manager, whose salary is paid by the band, decides which band staff are required to run its programs and services.

The band's co-manager, Clayton Kennedy, has acknowledged being in a romantic relationship with the band's chief, Spence. But he has denied there is any conflict of interest.

Debate over funding

Spence said the funding the community receives leaves residents "well below the poverty line" and that the First Nation had "completed all of the necessary reporting requirements" for Aboriginal Affairs.

"If the government of Canada wishes to re-examine the audits previously accepted by the department, the First Nation will welcome, and co-operate fully with the exercise, and the true costs to operate in a remote northern environment will be quantified," she said in a statement.

Spence also noted that a diamond mine is located about 90 kilometres west of Attawapiskat on traditional lands.

She described the mine as "the pride of the Canadian and Ontario governments, as well as De Beers Canada."

"While they reap the riches, my people shiver in cold shacks, and are becoming increasingly ill, while precious diamonds from my land grace the fingers of Hollywood celebrities, and the mace of the Ontario legislature."

With files from The Canadian Press