SONGHEESSONGHEES NATION NATION

20152014 Annual Annual Report Report CONTENTS

 LEKWUNGEN LAND AND PEOPLE

 GOVERNANCE

 ADMINISTRATION

 PROGRAMS AND SERVICES

 ECONOMIC DEVELOPMENT

 2015 FINANCIAL STATEMENTS

2 Nation of the Lekwungen People is a Nation on Southern , BC. The Songhees and Nations descend from seven Lekwungen family groupings; Kakyaakan, Teechamitsa, Whyomilth, Kosampson, Swengwhung, Chilcowitch and Chekonien.

Lekwungen traditional territories range from Cordova Bay west towards Mt. Finlayson to Royal Roads and along the shoreline to Albert Head. The Lekwungen Language is a dialect of Sećoŧen, a Salishan Coast Salish Language.

There are currently 561 registered Songhees Nation Members, 337 of whom reside on New Songhees Indian Reserve #1A, a 148 acre reserve adjacent to the Township of Esquimalt and Town of View Royal.

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Songhees Nation’s election system is currently regulated by the Indian Act. Songhees Nation voters elect a Chief and five Councilors for two year terms.

Chief and Council share their responsibility to govern the Nation equally. All Chief and Council decisions require the approval of a quorum of four

Council Members. Council Meeting Number of Attendance in 2015 Present meetings* Chief Ron Sam 28 28

Councillor Garry Albany 24 26

Councillor Nick Albany 9 12 Councillor Jackie Albany 14 14 Councillor Frank George Sr 22 25 Councillor Karen Tunkara 26 26 Councillor John Rice Jr 25 26

*The number of meetings is adjusted for term of office and for excused absences.

Songhees Nation is a Party to the a series of land purchases in the 1850’s by James Douglas, Chief Factor of Fort Victoria and Governor of the colony of Vancouver Island. Songhees Nation has been engaged in the Modern Treaty Process since 1995 as part of The Te’mexw Treaty Association along with Scianew, Malahat, Nanoose and T'Sou-ke . While the Douglas Treaties addressed land and harvesting rights, the modern comprehensive treaty currently being negotiated between Canada, BC and Te’mexw deals with a wide range of issues that Include governance, land, resources and fiscal matters. An Agreement in Principal was signed on April 9, 2015, bringing the Te’mexw Members to stage five of the BC Treaty Process.

5 GOVERNANCE

SONGHEES CHIEF AND COUNCIL SERVE THE MEMBERSHIP AS LEADERS, VISIONARIES, AMBASSADORS AND ADVOCATES IN THE FOLLOWING WAYS:

Community Engagement  24 Council Meetings held annually and posted in Community Calendar  4 General Band Meetings including an Annual General Meeting  Information meetings, such as Treaty, Membership and Housing  Referendums and Elections  Community Advisory Committees

Exerting Songhees Aboriginal Rights and Treaty Rights  Te’mexw Treaty Agreement in Principle  James Bay Village and Cadboro Bay Reserve Land Claims  Maple Bank Road Specific Claim  IR#1A Boundary Encroachment Court Action  Transport Canada Harbour Divestiture

Protecting and Exerting Songhees Jurisdiction over Land and Resources  Songhees Land Code and land development laws  Property Tax and Assessment Laws  Race Rocks Marine Protection Co-management Agreement  Chatham and Discovery Island Protection and Remediation  Invasive Species Removal Project

Lawmaking and Policy Development  First Nations Lands Management Act Laws  First Nations Financial Management Act Laws  Indian Act Bylaws such as Zoning and Land Use, Traffic Control and Animal Control  Goods and Service Tax Law

Intergovernmental Affairs  Council to Council Engagement with the District of Oak Bay and the Township of Esquimalt  Meetings with Minister of Indigenous and Northern Affairs Canada, BC Minister of Aboriginal Affairs and Reconciliation, Member of Legislative Assembly and Member of Parliament.

Regional and National First Nation Leadership  Assembly of First Nations  British Columbia Assembly of First Nations  British Columbia Union of Indian Chiefs  First Nations Summit

Advisory and Governance Boards  NIL TU O Child and Family Services Society  South Island Wellness Society  Core Area Liquid Waste Management Committee  Greater Victoria Harbour Authority

6 ADMINISTRATION

We strive to provide programs and services which are meaningful, appropriate and contribute to the Wellness of the Songhees Community

The operations of the Songhees Nation are governed by Laws, Bylaws and Policies passed by Songhees Chief and Council under the laws and legislation of Songhees Nation and the Government of Canada.

The Songhees Nation Financial Administration Law, the first such law passed in Canada under the First Nations Fiscal Management Act ensures our operations have sound financial management and that the Nation is accountable to its members, funding agencies and others.

Songhees Nation employs thirty five staff members in Administration and Finance, Operations, Education Services, Health and Social Services and Local Services. Human resource management is guided by The Songhees Nation Personnel Policy, reflecting the values of the Songhees Nation. In 2015, the Songhees Nation Pay-Scale was approved by Chief and Council to establish job classifications, education and experi- ence requirements and pay scales for Songhees Nation employment positions. The pay scale was devel- oped from current national First Nation pay scales for medium sized First Nation organizations as well as applicable industry standards, within the context of the annual human resource budget.

Songhees programs and services operate under funding agreements. Indigenous and Northern Affairs Canada (INAC) is the primary funding agency. Songhees Nation has funding agreements with the First Nations Health Authority, Intertribal Health Authority and the Coast Salish Employment and Training Society. These agreements include provisions which govern eligibility for service, eligible expenditures, limits on funding levels and requirements for reporting. Grant funding has also been received from United Way and the Victoria Foundation.

Programs and Services are only valuable if they meet the needs and priorities of the Songhees Community. Community involvement is critical to success. Through attendance in programs, constructive feedback and requests for service, community members contribute to the evolution of programs and services.

In 2015 Songhees Staff capacity building included training on Organization Legend Human Resource Management, Microsoft Word and Excel, and Advisory/Committee specialized courses such as lands management and emergency Chief & Council Election preparedness. Songhees cultural ambassadors received media Reporting Relationship training from Royal Roads. Regular staff team building events strengthen relationships and interdepartmental collaboration Supervisory Relationship ∞ ∞ ∞ ∞ while learning new things together. Administrative Support

7 SONGHEES NATION ORGANIZATIONAL STRUCTURE

SONGHEES MEMBERSHIP

SHAREHOLDER FINANCE & AUDIT MEMBERSHIP LONGHOUSE ON BEHALF OF MEMBERSHIP COMMITTEE COMMITTEE COMMITTEE

BOARD OF DIRECTORS FOR EACH ENTITY CHIEF & COUNCIL

SONGHEES OWNED BUSINESSES FINANCE & ADMINISTRATION Lekwungen Development Corporation Administrative Assistant Songhees Nation Investment Corporation EXECUTIVE Senior Accountant Songhees Centre: Gift Shop/Convention DIRECTOR ∞ Accounts Payable Clerk

∞ Accounts Receivable BUSSINESS PARTNERSHIPS Office Manager/Treaty & Registry Clerk Xhamasung Holdings LLP 50% ∞ Receptionist/Registry Clerk Skungeenes Holdings LLP 50% ∞ Bus Drivers Matullia Holdings LLP 50% Skwin’ang’eth Se’las Dev. Corp 33.3% Salish Sea Ind. Services Ltd 25.5% Songhees Seafood & Steam LLP 25% DIRECTOR OF PROGRAMS & SERVICES

DIRECTOR OF HEALTH DIRECTOR OF & SOCIAL SERVICES EDUCATION SERVICES

LOCAL SERVICES Lands Manager ∞ Tax Clerk Local Services Technician Early Childhood Ed. Centre Manager Administrative Assistant Public Works Manager ∞ Infant Toddler Caregiver Social Development Coordinator ∞ Building Service Technician ∞ ECE Workers Community Support Worker ∞ Public Works Labour School Liaison Recreation Coordinator Housing Clerk Student Facilitators Personal Care Attendant Bylaws/Emergency Services Officer Kwum Kwum Lelum Coordinator Homemaker ∞ Security Workers Employment Training Coordinator Youth Worker ∞ Employment Training Assistant

8 LOCAL SERVICES

Housing There are 90 Member residences on New Songhees IR 1A including 37 homes owned by Songhees Nation under the Canada Mortgage and Housing Program and rented to Songhees members. Seven Members have completed their CMHC mortgages and own their homes fully. The Songhees Housing Policy 2015 was introduced in an effort to improve the social housing program. The Nation struggles with substandard homes, overcrowding and funding limitations. Improved Housing is identified as a priority for the Nation. Songhees is working with the First Nation Market Housing Fund to build capacity and improve the housing program.

Bylaws and Enforcement Songhees has nine bylaws under the Indian Act including: • Zoning and Land Use • Nuisance and Disturbance • Traffic and Parking Control • Fire Prevention • Animal Control • Removal of Trespassers • Door to Door Sales • Mobile Home Parks • Aboriginal Trading Licence (Causeway artist permits)

Emergency Preparedness Planning The Bylaw Office coordinates Emergency Response Preparedness, and liaisons with emergency services including the View Royal Fire Department and the RCMP Aboriginal Policing Branch. This year the Nation has invested in emergency management training and emergency supplies.

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Lands Management Songhees Nation exercises jurisdiction over disposition and use of Songhees Reserve Lands under the authority of the First Nations Lands Management Act and the Songhees Land Code.

The Nation receives and registers, leases, subleases and land transfers in the First Nations Land Registry. A Treaty Related Measures project is underway to determine infrastructure easements. The lands management department also oversees an invasive plant removal project.

Property Taxation Under the provisions of the First Nations Fiscal Management Act. The Nation has the authority to collect property tax from taxable interests on Songhees Reserve Lands. There are 662 taxable interests including 653 Residential units (mobile homes, manufactured homes and strata townhomes) 5 Utilities and 6 Businesses. Annual local revenue from Property Taxation generates more than one million dollars for the provision of services such as fire protection, sewer and water and comprehensive services from the Capital Regional District.

Public Works and Capital Works The Public works department was expanded this year with the hiring of a Public Works Manager and Public Works Labourers. The crew focused on brush clearing, drainage ditches, catch basins and yard cleanup. An Inflow and Infiltration study accessed the condition of sewer and water system infrastructure, identifying cross connections and areas for repair. Asset Management assessment and planning is underway. Longhouse renovations were undertaken for structural and fire safety improvements.

Songhees Wellness Centre was awarded LEED Silver by the Canada Green Building Council. The Centre has solar heated water, geothermal heating, natural lighting, electronic car charging and a green cleaning policy among the Green elements of its engineering and design.

10 HEALTH AND SOCIAL SERVICES

Community Health and Wellness Programs offer a safe and welcoming environment, encouraging participation in programs to improve the wellbeing of the Songhees Community.

Wellness programs include primary health clinics, pre and post natal care, vaccination clinics, injury prevention training, oral health and chronic disease prevention and management. Primary health clinics held this year include mammogram clinic, chiropractic care and massage clinics.

In 2015 Nurse Practitioner services became available at the Songhees Wellness Centre. Other programs include, homemaking and personal care, counselling, family support, family cooking classes and Parents Group. Family wellness events included community meals, mothers and fathers day bbqs, and Elders Dinners and Cultural Nights sharing arts and crafts and food preservation skills.

Social Development program Income assistance clients have had opportunities to participate in first aid, food safe and basic security training this year. Income assistance clients have also been included in the Songhees Labor Pool. In partnership with IMTARC, GVHA and Wilson Transportation, Songhees hosted a summer employment project to increase work experience, and work place readiness.

Children and Family Support Services for families in the Songhees Community Support Worker, Songhees Social Development Coordinator, Nil,tu,o Child and Family Services, South Island Wellness Society, Ministry for Children and Family Services.

The 39th Annual BC Elders Gathering Hosted by was a highlight of the year for Songhees Elders, staff and volunteers. Elders enjoyed three days of activities, sharing and meals with 2500 delegates from all over the province, building friendships old and new. Songhees Nation was delighted to assist Tsawout Nation with food and beverage management and volunteer support.

11 Songhees Youth programs create opportunities to engage in academic, social and recreational activities for youth of the Songhees Community. In 2015 the Right to Play program was implemented, with a focus on activities for youth grades 5 to 8 to share their opinions and ideas and participate in planning events and intergenerational gatherings.

Recreation Programs Fit Nation facilitated classes: Kickboxing, yoga, chair yoga for elders, walk run club, circuit classes. Community members participated in Saturday Swim Nights and Drop in indoor soccer and badminton programs. The Songhees Wellness Centre’s Fitness Studio draws community members, workers from the dock yard and local residents. Maplebank Canoe Races are a popular event for the community and for those who come to enjoy a weekend of racing, visiting and food venders.

Sports development camps included Hope & Health with the Vancouver Whitecaps and the Iroquois Lacrosse Program.

Hope and Health is an annual event that utilizes soccer to build resilience and connection amongst Aboriginal children and youth. The program is a movement to inspire hope, improve physical, mental, emotional and spiritual health and life conditions for Aboriginal children and youth. Songhees youth participated for the first time this year in Nanaimo, BC along with 400 children from over 25 First Nations. the Iroquois Lacrosse Program was a thrill for Songhees kids as members of Six Nations visited Songhees to share their love of the game with interactive instructional and leadership sessions in indoor Lacrosse.

12 EDUCATION SERVICES

Songhees Preschool provides a safe and supportive environment for children beginning their educational journey with the encouragement of their family and community.

Songhees Daycare offers care for infant & toddler and school age children 8 am to 5pm Monday through Friday. This program benefits parents and caregivers who attend work or school.

The Songhees Nation Local Education Agreement 2015 with the Greater Victoria School District 61 is a five year agreement to improve the success of Songhees students through collaboration, identified objectives, responsibilities and commitments, accountability and measurements of success. The agreement governs tuition payment and allows for employment of a First Nations Student Liaison and two Student Facilitators.

The Celesat Moving Forward Program in collaboration with Camosun College and Esquimalt Nation is a 24 week program for underemployed and social assistance clients. The program includes certificates in WHMIS, First Aid, FoodSafe, World Host, Serving it Right and Cashier Training. Lifeskills, job coaching and work expe- rience to improve employment opportunities for participants.

Songhees Academic Youth Leadership participated in‘ Chopped Songhees’ funded by the Victoria Foundation. Participants received culinary arts training in the Songhees Wellness Centre kitchen. A series of Chopped Songhees evenings featured Venison, Salmon, Duck, Halibut, and Dessert dishes prepared by teams competing to be the Chopped Songhees Winner with a $3000 prize and a life long interest in the culinary arts.

Kwum Kwum Lelum afterschool homework club is a very successful program for elementary and middle school students. Assistance with homework and study is provided by Songhees staff and volunteer tutors from the University of Victoria’s Education department.

13 Skip Dick, Honorary Doctor of Education Bestowed by the University of Victoria, November 2015

Songhees Nation is very proud of Doctor Skip Dick on the achievement of his honorary doctorate of education. Skip is recognized by the University of Victoria for his life long contribution through his work in education and youth athletics. Skip has influenced countless individuals in the Songhees Nation and in communities around the province, impressing upon them the need to “live, speak and work with a good mind and a good heart.” At UVic, his involvement in the Elders’ Voices program has supported students, staff and faculty members. His presence has also been felt at Camosun College, starting from the 1970s, when he was the Aboriginal student counsellor, and in schools across Vancouver Island. Skip co-founded the Victoria Native Friendship Centre, the Victoria T-Bird Soccer Club and, in 1989, he was named Manager of the Year by the BC Lacrosse Association.

Butch Dick, Leadership Victoria Lifetime Achievement Award Bestowed by Victoria Foundation, February 2015

Songhees Nation is also very proud of Butch Dick for the honour he received from the Victoria Foundation. Butch is the first aboriginal elder to receive this honour. “He’s not only a master carver and artist but he is a teacher and mentor with a long history of personal commitment in this area,” said Michele Wilson, who chairs the Leadership Victoria selection committee. In addition to his many years of service in School District 61, Butch is currently Education Liaison for Songhees Nation. He is dedicated to the success of each student. As a Master Carver and Artist Butch is the artist behind many of the Coast Salish carvings on display throughout Greater Victoria. Butch designed the five house posts and totem welcome pole as well as the spindle whorl pavement design which welcome visitors to the Songhees Wellness Centre.

14 ECONOMIC DEVELOPMENT

Salish Sea Industrial Services Ltd provides marine industrial services on Vancouver Island including: dredging, pile driving, water and land based construction, maintenance, restoration and deconstruction, marine safety and marine support.

Salish Sea is registered under the Procurement Strategy for Aboriginal Business. The company is majority aboriginal owned by Songhees Nation and Esquimalt Nation in partnership with Ralmax Contracting Ltd.

Salish Sea provides skilled trades and general labour employment training and placement services for the Victoria BC industrial market area.

Salish Sea Industrial Services Ltd is the BC Aboriginal Business Association, 2014 Joint Venture Award Recipient

Skwin'ang'eth Se'las Development Corporation is a partnership between Songhees Nation and Esquimalt Nation and the Greater Victoria Harbour Authority for the purpose of incubating First Nation Business Entities and building business development capacity for Songhees and Esquimalt Nations. To date Skwin’ang’eth Se’las has hosted an Ideas Fair with a Dragons Den style competition, entrepreneurial training programs, assistance with websites, marketing and business development advice.

15 Songhees Centre Convention Services hosted three weddings in 2015 along with workshops and conventions, high school graduation dinners, corporate banquets, trade shows, Christmas and Halloween Parties and many board meetings, birthday parties, workshops and gatherings .

The Gift Gallery is open 10am to 2pm Monday through Friday and during special events. The Gallery features local arts and crafts, carvings, Knitting, silver, beaded jewelry, prints, art cards, books and Songhees logo gear.

Tourism Development focused on capacity building and cultural sharing including participation in the Oak Bay Arts and Culture Festival with a paddle welcome ceremony. Songhees and Esquimalt Nations, with Aboriginal Tourism BC, The Royal BC Museum and many supporters and partners hosted the 2nd Annual Aboriginal Cultural Festival in June 2015. The festival began with a traditional paddle welcome ceremony and featured traditional foods, dancing and drumming and arts and crafts from around the Province.

The Lekwungen Traditional Dancers represented Songhees Nation at the Esquimalt Light Up Parade, Buccaneer’s Days, Victoria Day Parade, the Oak Bay Arts and Culture Festival and many more events and Celebrations.

Songhees Nation Investment Corporation was created to hold and manage properties acquired through the Incremental Treaty Agreement. The Nation received a land parcel of 0.35 acres in Esquimalt, active lease negotiations ; a 0.25 acre parcel in James Bay and will soon receive 0.10 acre property in Victoria. These lands are held fee simple and are subject to provincial and federal laws, and local government zoning and taxation. A Board of Directors ensures the properties are managed for the benefit of Songhees Nation.

Coming Soon! Songhees Seafood & Steam Food Truck business at Belleville Terminal in partnership with Clipper Navigation Ltd. The Food Truck will open in the Spring of 2016 featuring a modern take on traditional seafood.

16 SONGHEES & ESQUIMALT NATIONS Transport Canada Harbour Divestiture

Songhees and Esquimalt Nations joined Transport Canada in a consultation process regarding the Nations interests in parcels of land and water under divestiture by Transport Canada within the territories of the Lekwungen People.

Esquimalt Nation Chief Andy Thomas and Songhees Nation Late Chief Robert Sam negotiated purchase of three sets of properties, since the process began in 2001. in 2005, Westbay was purchased with a mortgage and Plumper Bay water lot was leased for 20 years. In 2011 the Nations acquired the right to purchase Rock Bay.

Songhees and Esquimalt Nations created Lekwungen and Kosampson Development corporations, respectively, to form the Limited Liability Partnerships, Xhamasung Holdings LLP and Skungeenes Holdings LLP. Matullia Holdings LLP was created for the purpose of joint ownership of the Rock Bay properties.

Transport Canada Divestiture Discussions continue with Songhees and Esquimalt Nations expressing an interest in unceded sea beds, water and land in Lekwungen Traditional Territory,

Westbay Investments Ltd operates an RV park XHAMASUNG HOLDINGS and parking lot on land leased from Xhamasung Holdings LLP which is adjacent to the West Bay LIMITED LIABILITY PARTNERSHIP Marina and Float Home village, also operated by Westbay Investments Ltd. The property includes an 1891 Guardhouse for the Work Point Barracks. The Guardhouse is currently leased to Princess Patricia’s Canadian Light Infantry Cadets.

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SKUNGEENES HOLDINGS LIMITED LIABILITY PARTNERSHIP

Plumper Bay Water Lot A is located adjacent to Songhees and Esquimalt Nation reserves. Skungeenes Holdings LLP has a twenty year lease. The Nations wish to convert the land to reserve under the additions to reserve process. Salish Sea Industrial Services leases a portion of the water lot for a barge facility.

In 2011, Songhees and Esquimalt Nations entered into an agreement with Transport Canada to MATULLIA HOLDINGS purchase Rock Bay lots J10, J11 and J12 once LIMITED LIABILITY PARTNERSHIP remediation of the Rock Bay Harbour is complete.

As of December 2015, the site is under consideration for a regional sewage treatment plant. The Nations embrace this idea as an opportunity to address a longstanding environmental concern for the benefit of the land and water and all people.

An adjacent BC Hydro remediation project is surrounded by a First Nation mural series completed at the Wellness Centre.

18 FINANCE AND AUDIT COMMITTEE The Finance and Audit Committee provides community oversite of the financial administration of the Nation. The Committee reviews and recommends for approval, the draft annual budget, quarterly and annual financial statements and monitors the financial performance of the Nation. The Committee is comprised of; three community members, Florence Dick, Perry Dick and Maggie Charlie, two council members Chair Karen Dick-Tunkara, Vice Chair John Rice, Jr and practicing Accountant in good standing, Doug Crowder . Staff serve as resources for the committee. The committee proudly serves the membership.

19 SONGHEES FIRST NATION CONSOLIDATED STATEMENT OF FINANCIAL POSITION March 31, 2015

Financial Assets 2015 2014 Cash 2,898,136 2,272,874 Cash – Restricted, Note 7 178,753 160,819 Accounts Receivable 1,846,879 1,419,342 Investment in Mutual Funds 4,000,977 4,936,102 Investment in Shares 25 25 Trust Funds 13,869 14,996 8,938,639 8,804,158 Liabilities Accounts Payable 2,032,306 2,054,967 Deferred Revenue 60,000 - Reserves 1,287,299 866,382 Debt, Note 5 19,440,031 19,934,018 22,819,636 22,855,367

Net Financial Assets (Net Debt) (13,880,997) (14,051,209)

Non-Financial Assets Tangible Capital Assets, Note 3 32,790,405 33,625,620 Inventory 38,070 - Prepaid Expenses 181,405 224,611 33,009,880 33,850,231

Accumulated Surplus, Note 8 19,128,883 19,799,022

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SONGHEES FIRST NATION CONSOLIDATED STATEMENT OF OPERATIONS For the Year Ended March 31, 2015

REVENUES Budget 2015 2014

Aboriginal Affairs and Northern Development Canada 3,611,472 3,837,630 3,693,031 Prior Year AANDC - 23,305 - First Nations Health Authority 270,493 280,428 265,682

Canada Mortgage and Housing Corporation 41,623 41,623 42,235

Coast Salish Employment and Training Society 118,434 119,284 105,542

Local Revenue (Property Taxation) 1,101,532 1,206,321 1,127,385 Other, including Own Source Revenues 3,425,153 4,289,365 6,629,997

8,568,707 9,797,956 11,863,872

EXPENDITURES

Governance and Administration 955,671 855,585 817,797 Lands Management 199,120 264,146 315,014

Infrastructure and Public Works 1,902,739 2,349,409 257,606

Education Services and Tuition Payments 2,028,978 1,872,781 2,034,078

Health Services 372,851 485,198 316,947 Songhees Nation Projects 2,449,017 2,562,616 1,229,778 James Bay Trust Funded Activities - legal and other 67,472 65,695 100,135

Social Development (Income Assistance) 1,329,650 597,162 859,588

Treaty Treaty Association 31,721 42,206 31,277 Local Revenue Expenditures (Services to taxpayers) 1,101,532 1,206,321 2,602,385 Social Housing Operations (CMHC) 151,123 152,742 150,611

Ottawa Trust Fund 1,315 2,657 1,347

10,591,189 10,456,518 8,716,563

ANNUAL SURPLUS/(DEFICIT) BEFORE OTHER (2,022,482) (658,562) 3,147,309

OTHER Contributed surplus (255,971) 10,665,331 Transfers (to) Trusts/Reserves 244,394 (3,879,773)

ANNUAL SURPLUS/(DEFICIT) (670,139) 9,932,867

ACCUMULATED SURPLUS, BEGINNING OF YEAR 19,799,022 9,866,155

ACCUMULATED SURPLUS, END OF YEAR $19,128,883 $19,799,022

The accompanying notes and supplementary schedules are an integral part of these consolidated financial statements.

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SONGHEES FIRST NATION CONSOLIDATED STATEMENT OF CHANGE IN NET DEBT For the year ended March 31, 2015

2015 2014

Annual Surplus (Deficit) - Operations (658,562) 3,147,309 Annual Surplus - Other (contributed surplus/trusts/reserves (11,577) 6,785,558

Acquisition of Tangible Capital Assets (62,287) (11,929,691) Amortization of Tangible Capital Assets charged against Capital Fund and Social Housing Fund 423,614 160,006 Amortization of Tangible Capital Assets charged against Operations Fund 473,888 - 165,076 (1,836,818)

Acquisition of Prepaid Expenses (181,405) (126,151) Use of Prepaid Expenses 224,611 - Acquisition of Inventory (38,070) - Change in Net Financial Assets/Net Debt 170,212 (1,962,969) Net Debt, at beginning of year (14,051,209) (12,088,240)

Net Debt, end of year (13,880,997) (14,051,209)

The accompanying notes and supplementary schedules are an integral part of these consolidated financial statements.

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SONGHEES FIRST NATION CONSOLIDATED STATEMENT OF CASH FLOW For the Year Ended March 31, 2015

OPERATING ACTIVITIES 2015 2014 Excess (Deficiency) of Revenues over Expenditures (658,562) 3,147,309 Adjustment – Deficit from Capital Project capitalized - 111,323

Items not requiring a current outlay of cash:

- Amortization 897,502 160,006

Change in Non-Cash items:

- (Increase) Decrease in Restricted Cash (17,934) (20,131) - (Increase) Decrease in Accounts Receivable (427,537) 1,249,666 - (Increase) Decrease in Prepaid Expenses 43,206 (126,151) - (Increase) Decrease in Inventory (38,070) - - Increase (Decrease) in Accounts Payable (22,661) (885,662)

- Increase (Decrease) in Replacement Reserves 420,917 658,257

- Increase (Decrease) in Deferred Revenue 60,000 (920,235)

256,861 3,374,382 FINANCING ACTIVITIES Increase (Decrease) in Contributed Surplus (255,971) 7,072,921 (Increase) Decrease of Investments 935,100 (2,961,460) Increase (Repayment) of Long-term Debt (493,987) 6,098,272

185,142 10,209,733

INVESTING ACTIVITIES

Increase (Decrease) in Trust Funds 1,368 - (Increase) Decrease in Local Revenue Funds 244,178 (1,287,346) (Increase) Decrease in Capital Assets (62,287) (11,929,691) 183,259 (13,217,037)

INCREASE (DECREASE) IN CASH DURING YEAR 625,262 367,078

CASH – Beginning of year 2,272,874 1,905,796

CASH – End of year 2,898,136 2,272,874

The accompanying notes and supplementary schedules are an integral part of these consolidated financial statements.

23 SONGHEES FIRST NATION NOTES TO THE FINANCIAL STATEMENTS March 31, 2015

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES These Summary Financial Statements have been prepared in accordance with generally accepted accounting principles for the public sector as recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants.

The Songhees First Nation reporting entity includes the Songhees First Nation government and all related entities that are controlled by the First Nation.

a) Fund Accounting Songhees First Nation uses fund accounting procedures which result in a self-balancing set of accounts for each fund established by legal, contractual or voluntary actions. The various funds have been amalgamated for the purpose of presentation in the Summary Financial Statements.

b) Reporting Entity and Principles of Financial Reporting The reporting entity includes the Songhees First Nation government and all related entities whichare accountable to the First Nation and are either owned or controlled by the First Nation.

These financial statements consolidate the assets, liabilities and results of operations for the following entities which use accounting principles which lend themselves to consolidation: - Songhees First Nation Government Operations and Local Revenue (Taxation) - Songhees First Nation Trust Funds - Songhees First Nation Social Housing Program - Songhees First Nation Controlled Entities

All inter-entity balances have been eliminated on consolidation, but in order to present the results of operations for each specific fund, transactions amongst funds have not necessary been eliminated on the individual schedules.

c) Asset Classification Assets are classified as either financial or non-financial. Financial assets are assets that could be used to discharge existing liabilities or finance future operations. Non-financial assets are acquired, constructed or developed assets that do not provide resources to discharge existing liabilities but are employed to deliver government services, may be consumed in normal operations and are not for resale. Non-financial assets include tangible capital assets, prepaid expenses and inventories of supplies.

d) Cash Cash includes cash on hand and balances with banks net of bank overdraft.

e) Tangible Capital Assets Tangible capital assets include acquired, built, developed and improved tangible capital assets, whose useful life extends beyond one year and which are intended to be used on an on-going basis for producing goods or delivering services.

Tangible capital assets are reported at net book value. Contributions received specifically to assist in the acquisition of tangible capital assets are reported as deferred revenue and amortized to income at the same rate as the related asset.

Certain assets which have historical or cultural value, including works of art, historical documents and historical and cultural artefacts, are not recognized as tangible capital assets. Assets under construction are not amortized until the asset is available to be put into service; interest on debt during construction is capitalized.

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f) Amortization Tangible capital assets are amortized over their expected useful life using the straight-line method at the following rates: General Housing 5% Buildings and improvements 4%/5% General equipment 20% Infrastructure 4% Docks 5% Boats 15% Automotive 30% In the year of acquisition, 50% of the normal amortization is recorded. Social Housing assets acquired under CMHC sponsored housing programs are amortized at a rate equivalent to annual principal reduction in related long term debt, as required for CMHC reporting purposes.

g) Net Debt The First Nation’s financial statements are presented so as to highlight net debt as the measurement of financial position. The net debt of the First Nation is determined by its liabilities less its financial assets. Net debt is comprised of two components, non-financial and accumulated surplus.

h) Revenue Recognition All revenue is recorded on the accrual basis whereby amounts received or recorded as receivable but not earned by the end of the fiscal year are recorded as deferred revenue. Funding received under the terms of contribution agreements with the federal government is recognized as revenue once eligibility criteria have been met. Funding is recorded as deferred revenue if it has been restricted by the federal government for a stated purpose, such as a specific program or the purchase of tangible capital assets. Deferred revenue is recognized in revenue over time as the recognition criteria are met.

i) Measurement Uncertainty In preparing financial statements for the government of Songhees First Nation, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the year. Significant areas of estimation include allowance for doubtful accounts, estimated useful lives of tangible capital assets, impairment of long-lived assets, accrued liabilities, and disclosure of contingencies. Actual results could differ from those estimates.

j) Financial Instruments Songhees First Nation’s financial instrument consists of cash, accounts receivable, accounts payable and accrued liabilities. Unless otherwise noted, it is management’s opinion that Songhees First Nation is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values, unless otherwise noted.

2. ECONOMIC DEPENDENCE The government of Songhees First Nation receives a major portion of its revenue from Aboriginal Affairs and Northern Development Canada. The nature and extent of this revenue is of such significance that the First Nation is economically dependent on this source of revenue.

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3. TANGIBLE CAPITAL ASSETS

Cost Accumulated Net Book Net Book Amortization Value 2015 Value 2014

OPERATING Float 58,638 45,437 13,201 16,133 Oceangoing canoes/Zodiac Boat 26,405 26,405 - - 1500D Admirals - triple wide mobile 102,229 86,218 16,011 21,121 1500E Admirals - double wide mobile 56,000 26,600 29,400 32,200 Band Owned Housing 148,049 55,338 92,711 100,111 Preschool addition 381,312 162,060 219,252 238,319 Van 19,293 19,293 - - Wellness Centre Office Equipment 115,082 91,426 23,656 - Off Reserve Properties 3,245,422 - 3,245,422 3,245,422 4,152,430 512,777 3,639,653 3,653,306

LOCAL REVENUE Infrastructure 583,766 233,505 350,261 372,153 Building 94,290 49,679 44,611 49,299 Playground 97,600 50,020 47,580 52,460 Tractor/backhoe 69,000 69,000 - - Trailer 182,572 118,794 63,778 73,480 Truck 30,424 30,424 - 2,325 General equipment 39,535 39,535 - - Boat - Zodiac 9,000 4,050 4,950 6,975 1,106,187 595,007 511,180 556,692

CMHC 1,456,690 510,046 946,644 1,006,491

WELLNESS CENTRE Building 27,064,889 541,297 26,523,592 27,064,889 Equipment and Fixtures 1,054,528 210,906 843,622 1,029,528 Artwork 118,275 - 118,275 118,275 Carvings 207,439 - 207,439 196,439 28,445,131 752,203 27,692,928 28,409,131

TOTAL 35,160,438 2,370,033 32,790,405 33,625,620

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4. TRUST FUNDS

Ottawa Trust Account Opening Balance Additions Withdrawals 2015 2014

Revenue 1,344 1,315 2,657 2 1,344

Capital 219 - - 219 219

Fund Total 1,563 1,315 2,657 221 1,563

The Ottawa Trust Accounts arise from monies derived from capital or revenue sources as outlined in Section 62 of the Indian Act. These funds are held in trust in the Consolidated Revenue Fund of the Government of Canada. The management of these funds is primarily governed by Section 63 to 69 of the Indian Act.

Highway Burning Trust Fund 2015 2014 Balance as of March 31

The Highway Burning Trust Fund is a fund being jointly held by Songhees Nation and Esquimalt Nation. Only Songhees Nation’s 50% portion is reflected on the financial statements.

James Bay Village Trust Fund 2015 2014

Balance as of March 31 11,281,038 11,001,582

James Bay Village Trust Fund consist of funds received for the James Bay Settlement which are being held in trust and administered by the Nation and BMO Trust. The trust fund has not been included in the consolidated financial statement and has not been included as part of the operations of the Nation.

5. LONG-TERM DEBT

2015 2014 A fixed rate business mortgage from Van City Credit Union of $13,5000,000 for 13,1369,961 13,500,000 the Songhees Wellness Centre repayable monthly $69,910 blended at 3.85% and secured by own source revenue (currently FNGST)

Less portion due within one year 335,368 322,561 12,804,323 13,177,439

2015 2014 A Promissory Note payable to First Nations Finance Authority, $5,264,000 for 5,193,607 5,264,000 the Songhees Wellness Centre repayable yearly at $93,857 principal, plus inter- est at 3.79%, commencing June 26, 2015, amortized over 30 years; with a ten year term, expiring June 26, 2024. This loan forms part of the first Debenture Bond Issue under the First Nations Fiscal Management Act. Less portion due within one year 93,857 - 5,099,750 5,264,000

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Canada Mortgage and Housing Corporation Mortgages, secured by AANDC 2015 2014 ministerial guarantees and first mortgages on twenty-four social housing units.

- Loan #153-52495002, repayable @ $1,379/month, 1.62% interest 78,194 93,352 - Loan #193-62409001, repayable @ $1,534/month, 1.82% interest 233,326 246,925 - Loan #193-62409002 repayable @ $3,420/month, 1.53% interest 635,124 666,214 Total 946,644 1,006,491 Less: portion due within one year 61,198 59,376 885,446 947,115 $19,440,031 $19,934,018

Principal repayments required over the next five years: 2016 $493,901 2018 $523,458 2020 $557,914 2017 $508,402 2019 $539,093

2015 2014 Loan payable to All Nations Trust, for construction of #5 Maple Bank, secured 160,089 163,527 by AANDC ministerial guarantee, repayable @ $983/month, including interest at 5.25% Less portion due within year 3,477 3,289 156,612 160,238

6. SOCIAL HOUSING RESERVES a) Replacement Reserve Under the terms of the agreement with CMHC, a replacement reserve is maintained to provide for future asset replacement. These funds, along with accumulated interest, must be held in a separate bank account. Use of these funds is restricted to expenditures approved by CMHC.

b) Subsidy Surplus Reserve Under the terms of the agreement with CMHC, express federal assistance payments received may be retained in a subsidy surplus reserve up to a maximum of $500 per unit. These funds, along with accumulated interest, must be held in a separate bank account. The funds in this account may only be used to meet future subsidy requirements.

c) Operating Reserve Under the terms of the agreement with CMHC (Section 95, Post 1997 on Reserve Program), any surplus revenue will be retained within an Operating Reserve. These funds, along with accumulated interest, must be held in a separate bank account. Use of these funds is restricted to ongoing operating costs of housing projects committed under the Post 1997 On Reserve Program.

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7. RESTRICTED CASH

2015 2014

Comprised of the following: - Band Housing Reserve Funds 9,626 9,575

- CMHC Reserve Funds 169,127 151,244

178,753 160,819

8. ACCUMULATED SURPLUS / (DEFICIT)

2015 2014

Represented by: - Operations Surplus 3,416,365 4,074,928

- Trust Funds 13,648 13,431 - Local Revenue (Property Taxation) 346,397 102,219

- Contributed Surplus Operations 13,352,473 13,608,444

19,128,883 19,799,022

9. CONTINGENT LIABILITIES a) Restricted (set) unexpended surpluses can be recovered by the funding agency. b) The Nation has Ministerial Guarantees for loan balances outstanding. The contingent liability as at year-end amounts to $1,282,825 as per confirmation provided by AANDC c) The Nation commenced a law suit against the governments of Canada and British Columbia claiming damages for breach of treaty rights. The action remains outstanding. The action may result in a substantial judgment in favour of the Nation, or there is a possibility that the action may be dismissed and the Nation will be liable for the Court costs of both governments. Specific amounts related to the above have yet to be identified.

10. WEST BAY MARINA ACQUISITION On May 9, 2005, Songhees First Nation entered into a purchase agreement with Her Majesty the Queen in the Right of Canada to purchase curtain lands in Esquimalt for $1,880,000.The purchase was facilitated by the use of Xhamasung Holdings LLP which has two partners, Kosapsum Development Corporation ( shareholder) and Lekwungen Development Corporation (Songhees First Nation shareholder). The purchase was financed by a down payment of $42,720 and annual payments of $42,720 for 15 years and a balloon payment at the end of term for $1,937,699. Interest is charged at 4.94% per year.

11. LOAN TO SALISH SEA INDUSTRIAL MARINE SERVICES LTD. Songhees Nation has a 25.5% interest (bare trust) in Salish Sea Industrial Marine Services Ltd. It is a corporation that provides industrial marine and construction services as well as a First Nations employment programs. Songhees Nation has provided the following loan: 2015 2014 Loan receivable 350,000 350,000

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12. INVESTMENT IN FIRST NATION CONROLLED ENTITIES

Lekwungen Development Corp. 2015 2014

- advances to Xhamasung Holdings LLP 77,692 76,873

- membership equity (net assets) 51,958 6,641 Total 129,650 83,514

Unaudited financial information Assets Liabilities Revenue Net Income

Year ended March 31, 2015 129,649 77,692 46,135 45,317

Songhees Nation Investment Corp. 2015 2014

- advances 38,373 (1,103) - share capital 1 1

- equity (loss) (39,416) 1,102

Total (1,042) -

Unaudited financial information Assets Liabilities Revenue Net Income Year ended March 31, 2015 1,809,001 39,416 21,277 (40,518)

13. COMPARATIVE FIGURES Prior year’s comparative amounts have been reclassified where necessary to conform to the current year’s presentation.

14. SEGMENTED INCOME STATEMENT The Segmented Disclosure statement forms part of the Notes to the Financial Statements.

30 ANNEX A SCHEDULE OF REMUNERATION AND EXPENSES PAID TO ELECTED OFFICIALS FOR THE YEAR ENDED MARCH 31, 2015

Number of Name of individual Title Remuneration $ Expenses $ Total $ Months Ron Sam Chief 12 28,700 4,590 33,290 Garry Albany Councillor 12 33,200 5,917 39,117 Nick Albany Councillor 12 25,850 161 26,011 Frank George Councillor 12 26,900 1,521 28,421 John Rice Jr. Councillor 12 29,366 5,501 34,867 Karen Tunkara Councillor 12 26,450 242 26,692

1. The number of months during the fiscal year that the individual was on Council. 2. Remuneration means any salaries, wages, commissions, bonuses, fees, honoraria, dividends, and any other monetary benefits other than the reimbursement of expenses and non-monetary benefits.

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