Indigenous Services Canada (ISC) is making good on its notice to collect over $12 million from Saskatchewan’s largest First Nation organization following a forensic audit of its spending. The department first released details of the KPMG audit in September 2025, revealing troubling questions about how leadership at the Federation of Sovereign Indigenous Nations (FSIN) was handling federal funds intended for specific programs. At the time, the KPMG auditor found the FSIN could not adequately justify how it spent the vast majority of the $47.1 million in transactions from ISC’s program funding over a five-year period, though the outstanding amount was later whittled down through a series of appeals and disputes. Now, after nearly a year gently asking for its money back, the ISC appears to be taking the gloves off. In a letter to the FSIN executives Wednesday, Director General Rob Harvey revealed the sharp outlines of his department’s teeth. Harvey formalizes the outstanding $12.4 million in transactions as “a debt owing to the Crown,” warning ISC will begin withholding any current and future funding to the organization to offset the debt if the FSIN did not pay in full by Nov. 13, 2026. “I understand the ISC confirmed the conditional release of funding in the letter on September 22, 2026. However, now that the debt has been formalized, ISC may use any funding owing to the FSIN as set off to the debt,” the letter read. “Canada will be formalizing this debt via a statement of claim.” Not to be outdone, the FSIN responded late Wednesday with its own threat of legal action. “While ISC considers its process concluded, the FSIN strongly disagrees and does not accept the decision nor the financial amount of $12,376,807.40 being claimed as ineligible and as such, has commenced legal action,” the statement from FSIN said. The FSIN claims that in a line-by-line discussion in June, the organization had earned a major concession from the ISC’s negotiation team that wasn’t included in the final tally. The issue centred on money given to the FSIN to purchase and distribute PPE to its 74 member First Nations amid the COVID-19 pandemic. In the meeting, FSIN alleges the ISC negotiation team “confirmed that all PPE purchases, comprising almost $8 million of the $12.376 million, were substantiated as purchased, delivered and removed from the list of ineligible or questionable expenditures.” “We are surprised that this would be added back on despite the ample evidence provided and the advice of their own ISC staff,” the FSIN said. The remaining $4.4 million, according to FSIN, is “mainly related to administration fees for which ISC has failed to produce policies to support their position.” The FSIN also takes issue with the ISC’s use of the media to apply pressure. “Throughout this process, FSIN staff has dealt directly and professionally with ISC rather than attempting to negotiate these matters through the media, despite Minister Mandy Gull-Masty only communicating to FSIN through the media after numerous attempts to.” In a statement, FSIN Chief Bobby Cameron says the ISC may see this matter as concluded, but for him it’s not over yet. “We remain confident that when this matter is subjected to a fair and independent review, that all expenditures will be proven eligible and the allegations proven false.”
