The Liard First Nation has announced layoffs and cutbacks in what's being described as a significant cash-flow problem.

In a press release issued Monday afternoon, Chief Liard McMillan cites several reasons for the first nation's year-end woes.

Fourth-quarter funding won't be available until mid-May, after the federal government receives the year-end financial reports, and first-quarter funding for the 2005-2006 fiscal year won't arrive until mid-April, the press release points out.

The release, however, says the first nation is in a cash-flow problem right now, and must lay off all but essential staff and curtail any unnecessary spending.

'All potential program expenditures are being carefully screened to identify whether or not they are absolutely necessary,' McMillan says in the release.

'We are scouring our funding sources in order to bring back our staff as soon as possible, to secure as much revenue as quickly as possible in order to minimize the impacts.'

According to the release, non-essential staff will be laid off until April 28, and the remaining staff will have their salaries cut by 15-per-cent, which includes wages paid to the chief and councillors.

McMillan was unavailable for further comment this morning.

Celia Asselin, acting regional director general for the Department of Indian and Northern Affairs, said this morning she and her staff have been assured all essential services will be delivered by the first nation.

As an Indian Act band, unlike the Yukon's 10 self-governing first nations, the Liard First Nation is accountable to Ottawa for the bulk of funding it receives to deliver programs the federal government is responsible for providing to Canada's indigenous people.

Asselin said her staff has met with the first nation staff, and will continue to monitor the situation as well as be available should the chief request any assistance.

But to this point, she said, the first nation has not asked for any.

'It is our understanding that the Liard First Nation will continue providing essential services,' Asselin said, noting the chief's commitment in the press release to keep essential staff on the payroll.

The regional director general said her staff have told her that it's their understanding about two-thirds of those employed by the first nation will be laid off.

Asselin explained that under the existing financial arrangement, the first nation is provided annual funding based on a plan they prepare and submit to Ottawa, an arrangement that is subject to an annual audit for verification.

The press release does not explain specifically how the first nation arrived at its financial problems.

It does note the expense of developing a new election process and running last year's elections of the Liard First Nation and the Daylu Dena Council, though it describes the new processes as extremely well done.

It also notes the first nation is owed more than $200,000 in outstanding personal loans.

The practice of issuing personal loans was cancelled last December, the press release points out. The issue of personal loans to members of the first nation first arose when McMillan got into office after the former chief was charged with a criminal offence.

The release says the outstanding fourth-quarter funding from the federal government is estimated at $200,000.

Multi-year funding arrangements with Ottawa that are not yet in place would help do away with the financial crunch the first nation finds itself in, the chief says in the release.

The press release also makes mention of the ongoing dispute the Liard First Nation has with Ottawa regarding the payment of income tax, and how their outstanding bill assessed by Ottawa is now $1.5 million.

As a first nation that has not signed land claim nor self-government agreements, the members of the Liard First Nation should not have to pay the taxes, says the press release. However, it does not mention whether the dispute factored into its current situation.

But it's causing significant problems, says the press release.

The chief says in the release the first nation has significant inventories of natural resources in its traditional territory, which resource companies want to develop.

There is, he added, the possibility of an Alaska Highway natural gas pipeline running through the middle of Kaska territory, 'and we continuously have to operate on crumbs from the table, which is fundamentally wrong,' the chief says.

Ten of the Yukon's 14 first nations have signed land claim and self-government agreements. Negotiations between the federal and territorial governments and the two Kaska first nations Liard, and the Ross River Dena Council broke off three years ago and have not recommenced.

The White River First Nation has yet to vote.

The Carcross-Tagish First Nation will hold a second vote at the end of May, having voted a year ago to reject the land claim and self-government packages. A referendum among its membership last month called for a second vote.