OTTAWA -- The Metis National Council is paying a numbered company owned by its Manitoba affiliate "more than it should" to rent office space, the federal government was told in a draft of an audit conducted in 2012 .
The finding -- which the council vehemently disputes -- raises fresh questions about an organization that receives millions of dollars in federal funding.
It also comes to light at a time when federal officials in Ottawa are cautiously watching a court case unfold that could give the Metis a major stake in aboriginal politics.
The matter dates back to December 2011, when the council moved into a new office in downtown Ottawa.
Ontario property records show the owner of the building is 6106111 Manitoba Ltd., a numbered company that bought the building in October 2011, less than two months before the council moved in.
Manitoba corporate documents show the company has two shareholders: the Louis Riel Capital Corp. and the Metis Economic Development Organization. Both are affiliated with the Manitoba Metis Federation, which in turn is one of five governing members of the Metis National Council.
The company has four directors, all of whom are connected to the Manitoba Metis Federation or its affiliates. None has responded to requests for comment.
According to a copy of an auditor's draft report obtained by The Canadian Press, a branch of Aboriginal Affairs called the Office of the Federal Interlocutor allowed the council to sign a lease with the numbered company, on two conditions.
"It is our understanding that prior to signing a new lease, the MNC sought OFI's permission to sign a lease with a landlord with which it (has) a relationship through one of its (governing members)," says a draft report by Hallux Consulting.
"OFI concurred under the proviso that the rent would be based on market rates and would be no more than what the MNC had been paying."
But Hallux told the department in 2012 that the council is paying roughly the same amount of money now to rent a smaller space. Not only is the new location smaller, the auditor said, but it is also a lower class than the Class A space the council previously occupied in a downtown office tower.
"We also believe that the MNC is paying more than it should for the space it is occupying," says the Hallux report.
Council president Clement Chartier has yet to respond to a list of questions sent by email. Vice-president David Chartrand, who is also head of the Manitoba Metis Federation, challenged the Hallux findings.
The new office, which measures 5,000 square feet, is actually larger than the old one, Chartrand said. He said he did not know the size of the old office.
The numbered company knew the council planned to move out of its old office space when it purchased the building, Chartrand said.
"Of course we knew. And that's why we did comparables," he said in an interview.
"But at the end of the day, we had an opportunity to look at investing and say, 'Now why would we not try to use our Metis economic arms out there if they're interested in looking?'
"Opportunities existed, and we took advantage of that opportunity."
Hallux spoke to a property manager who looks after other units in the same complex as the council and consulted a brochure from a real estate company that was selling the building a few years earlier to determine if the rent was reasonable.
The council pays $44.40 per square foot per year, according to a copy of the lease agreement provided to Hallux. However, some slightly smaller units in the same complex were being rented at $30 per square foot, Hallux says -- 30 per cent less than what the council pays.
"The MNC's current basic rent is higher that what we would have expected based on the comparators," says the report.
Chartrand said he disagrees.
"It's identical costs to the previous building that we had. Identical," he said. "It didn't change a dime."
In November 2012, the council fired back in a lengthy rebuttal to the Hallux report, criticizing the work of auditor Elizabeth Buckingham. She has said she carried out her duties following the applicable standards and can substantiate her observations.
Aboriginal Affairs Minister Bernard Valcourt's office repeated its earlier statement about the council, urging it to continue "taking the necessary steps to strengthen its financial accountability to its members and all Canadians."
The Public Accounts of Canada show that between 2002 and 2013, the council has received more than $17 million from the federal government.
The Metis stand to become a powerful force in aboriginal politics, depending on the eventual outcome of a long-standing court battle.
The Congress of Aboriginal Peoples and several Metis and non-status Indians took the federal government to court in 1999, alleging discrimination because they were not considered "Indians" under a section of the Constitution Act.
Last year, the Federal Court recognized them as "Indians" under the Constitution, a ruling largely upheld earlier this year by the Federal Court of Appeal.
