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Uncertainty clouds fate of $40B First Nations child welfare agreement

The fate of the $40 billion First Nations child welfare settlement agreement is up in the air after the Canadian Human Rights Tribunal questioned whether the terms of the deal meet the conditions of its pivotal discrimination ruling.

Canadian Human Rights Tribunal asks whether children placed in kinship care should be part of agreement

The fate of the $40 billion First Nations child welfare settlement agreement is up in the air after the Canadian Human Rights Tribunal questioned whether the terms of the deal meet the conditions of its pivotal discrimination ruling.

At issue is whether the individuals covered by a $20 billion portion of the deal — which was finalized by Ottawa, the Assembly of First Nations (AFN) and class action lawyers last July — are the same individuals the tribunal said should be compensated for the discrimination they suffered.

"It would be great if this settlement could work, if possible, especially that it is First Nations-led," the tribunal wrote in a Sept. 21 letter to the parties following two days of hearings.

"But I also see a major issue."

WATCH | The long wait for compensation

'It's irresponsible for people to try and step in the way of this'

2 hours ago

Duration 0:18

Assembly of First Nations Manitoba Regional Chief Cindy Woodhouse explains why she believes the settlement agreement should pass.

In the letter, the human rights panel asked whether there is a "possibility that the agreement was negotiated based on a premise that departed from the tribunal's findings and orders."

That question is delaying by weeks the implementation of the compensation plan agreed upon by the federal government and the AFN. It could also put the entire settlement — the largest in Canadian history — in jeopardy.

Before compensation can be paid out through the deal, the tribunal has to decide whether the agreement is too narrow because it leaves out children who were not in federally-funded child welfare placements.

Those children were removed from their homes, families and communities and put into "kinship care" — meaning they were placed with extended family or family friends.

'Everything is in a standstill'

In its letter to the parties, the human rights panel said it's not prepared to make a "quick decision sacrificing sound decision-making."

The tribunal will release its decision to the parties once its panel completes its ruling. That ruling is expected sometime after Oct.12 — the final deadline for Ottawa and AFN to respond to the tribunal's questions.

"I'm kind of appalled because everything is in a standstill," said Zach Trout, a father from Cross Lake First Nation in Manitoba who was one of the lead plaintiffs in a class action lawsuit that became part of the settlement agreement.

"We are the ones who have suffered for far too long. Still today, we still suffer."

Trout filed a lawsuit in 2021 against Ottawa for failing to provide proper health support for his two children, Sanaye and Jacob, who suffered from a rare neurological disorder called Batten disease. Both children died before age 10.

"I can still see the tears in their eyes," said Trout, who quit his job to help his wife provide 24-hour care for their children.

"To be turned down on so many things, it's pretty sad."

Worrisome for AFN

The First Nations Child and Family Caring Society of Canada argued that the settlement agreement does depart from the tribunal's orders. The society, whose executive director Cindy Blackstock initiated the human rights complaint in 2007, said children in kinship care should be included.

But the federal government and the AFN say only children placed in federally-funded placements are eligible for compensation.

"It's very frustrating that this legal wrangling is happening because now First Nations people are the ones who are having to wait yet again," said Cindy Woodhouse, the Assembly of First Nations Manitoba regional chief who holds the AFN portfolio on social development.

WATCH | AFN Manitoba regional chief urges tribunal to approve agreement

Why one plaintiff wants to see the deal passed

2 hours ago

Duration 0:37

Ashley Bach, who was removed from her home, family and community shortly after birth, explains why she wants the settlement agreement to pass.

The AFN entered into negotiations with the federal government after it filed a lawsuit in 2020 seeking compensation for victims excluded from the tribunal's orders.

The settlement agreement covers children and family members dating from the time Ottawa's funding formula for First Nations child welfare took effect in 1991, while the tribunal's orders only cover children and families affected from 2006 onward.

The AFN entered into negotiations with Canada after it filed a lawsuit in 2020 seeking compensation for victims excluded from the tribunal's orders from 1991 onward. The tribunal's orders covered children and families affected starting in 2006.

Tens of thousands of children and family members affected by the on-reserve child welfare system and denied essential services from 1991 on could be eligible for compensation under the final settlement agreement.

The $40 billion deal sets aside $20 billion for compensation and another $20 billion for long-term reform of the on-reserve child welfare system.

Ottawa and the AFN need the human rights panel to approve the $20 billion compensation package before they can seek final approval from the Federal Court to move forward with $20 billion in long-term reforms by the end of the year.

If the parties miss that end-of-year deadline, the money could be taken back by the Treasury Board into general government revenue.

"I urge people who are trying to oppose it, trying to stop it, to please think of the children and think of First Nations people," Woodhouse said.

"It's very worrisome that if we don't have a deal by December 31 … this could collapse."

Major changes to settlement agreement unlikely

Blackstock said Canada could renegotiate the clause in the agreement that says it needs the tribunal's approval — and start rolling out the money right away.

"We saw them turn around CERB (the Canada Emergency Response Benefit) cheques in a matter of days," she said. "They should be doing that here too, no excuse."

But no matter what the tribunal does, there's a still chance the case could be tied up in the courts.

The Caring Society, for instance, could seek a judicial review of the tribunal's decision. Blackstock said she has to see what the panel says before pursuing that.

Canada appealed last year's Federal Court ruling upholding the tribunal's orders and could continue the challenge if the tribunal refuses its settlement agreement.

Sources involved in both sides of the negotiations, who weren't authorized to speak publicly, tell CBC News that while adjustments could be made to the agreement, they're not likely to be major ones.

But the federal government said that if the tribunal clears the deal, it's prepared to drop its appeal.

"We're not out of the woods yet at all, but it is something that is ongoing and we'll always be there to — especially with Indigenous children in mind — to make sure that this system serves them well," said Crown-Indigenous Relations Minister Marc Miller.

Compensation to help youth reconnect

In 2016, the tribunal found Canada racially discriminated against First Nations children on reserve and in the Yukon in a systematic way — by underfunding the First Nations Child and Family Services Program and by encouraging the removal of children from their homes, family and communities instead of providing adequate funding for preventative services.

It also found the narrow definition and inadequate implementation of the policy called Jordan's Principle — which stipulates that First Nation children must be able to access care and support when they need it, without delay or denial — resulted in service gaps, delays and service denials for children and their families.

The tribunal then ordered Canada to cease the discrimination until it could implement long-term reform. It also ordered Canada to provide $40,000 in compensation to each affected individual.

The settlement agreement doesn't guarantee $40,000 to every single complainant, but it promises a base of $40,000 or more to each child removed from their homes, families and communities.

WATCH | Why the deal falls short for Cindy Blackstock

'No such exclusion'

2 hours ago

Duration 0:21

Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, says First Nations children placed in kinship care should not be excluded from compensation.

Ashley Bach said she didn't know the name of her nation when she was growing up with her adopted family in British Columbia — not until she received a status card when she applied to university in her late teens.

"I assumed that it was normal to not know what your First Nation was," Bach said. "Since going on to university, I know that's not normal and it's really not OK."

Bach said the compensation would help her visit her home community of Mishkeegogamang First Nation in northern Ontario.

"That's the goal — reconnecting with my First Nation by quite literally going and visiting, and meeting people and making those connections that I should've had throughout my entire life," said Bach, one of the plaintiffs in the AFN lawsuit that became part of the settlement.

"I should've grown up there with my [biological] family and the rest of my community members."

Bach said she hopes the settlement agreement is passed as soon as possible to help young people who, like her, are waiting to learn when they will be compensated.

"I spend a lot of time thinking about all the people who are going to be impacted by this," Bach said.

"There's over 200,000 people who are going to be impacted by the entire final settlement agreement, so it's a lot. It's a huge responsibility and it's a huge weight to be carried."


Olivia Stefanovich

Senior reporter

Olivia Stefanovich is a senior reporter for CBC's Parliamentary Bureau based in Ottawa. She previously worked in Toronto, Saskatchewan and northern Ontario. Connect with her on Twitter at @CBCOlivia. Story tips welcome: olivia.stefanovich@cbc.ca.

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