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(JOHN MCDONALD / iNFOnews.ca)

OTTAWA - The federal Liberal government showed more solidarity with Canada's First Nations on Friday as it lifted sanctions against indigenous communities that have not complied with a Conservative spending transparency law.

The decision was quickly condemned by the Opposition Tories and the Canadian Taxpayers Federation, which warned that the move would leave First Nations people in the dark about how their elected leaders spend public money.

Indigenous Affairs Minister Carolyn Bennett said her department will stop imposing punitive measures — such as withholding funds — on those communities not in compliance with the First Nations Financial Transparency Act.

Bennett, who described the changes as part of Ottawa's new "nation-to-nation" relationship with indigenous peoples, also said she's suspending court actions against those First Nations not complying with the law.

"Transparency and accountability are paramount to any government, whether it is municipal, provincial, federal or First Nation," she said in a statement.

"We will work in full partnership with First Nations leadership and organizations on the way forward to improve accountability and transparency. This cannot be achieved without the engagement of First Nations and its members."

Under the Act, First Nations are required to publicly disclose audited financial statements and information about the salaries and expenses of chiefs and councillors.

Those failing to do so by July 29 of last year faced escalating consequences ranging from public shaming to court action.

One community, the Onion Lake Cree Nation on the Alberta-Saskatchewan border, took the government to court, unsuccessfully trying to convince the Conservatives to talk with First Nations about their finances.

Bennett said she's hopeful that lifting sanctions will open the door to talks with indigenous communities and help both levels of government to work together.

"These initial steps will enable us to engage in discussions on transparency and accountability that are based on recognition of rights, respect, co-operation, and partnership and that build towards a renewed, nation-to-nation relationship with indigenous peoples."

Aaron Wudrick, the CTF's director, said the move makes no sense.

"A law without consequence for non-compliance is a toothless law," he said. "As such, soon many First Nations people across the country will again be in the dark as to how their elected leaders spend public dollars."

Wudrick noted that the vast majority of First Nations were in compliance with the law both last year and in fiscal 2014-15.

"Suspending enforcement of this law is wrong, and completely undermines the very principles this government claims to be advancing."

Not surprisingly, the Conservatives were also critical, accusing the Liberal government of gutting a federal law without going through proper parliamentary channels.

"For all practical purposes, this is a repeal of the act, being carried out without actually bothering to give members of Parliament any chance to debate it," said indigenous affairs critic Cathy McLeod.

"It is ironic that a law about transparency is being gutted in such a non-transparent way."

Assembly of First Nations National Chief Perry Bellegarde welcomed what he called a "new approach," predicting it would result in "real accountability by all parties."

News from © The Canadian Press, 2015