Ottawa’s $40B First Nations child welfare deal torpedoed by Canadian Human Rights Tribunal

A $40-billion dollar First Nations child welfare agreement called “historic” by the federal government is on the verge of falling apart. 

On Tuesday, the Canadian Human Rights Tribunal rejected Ottawa’s $20 billion offer to compensate First Nations children and families harmed by the discriminatory on-reserve child welfare system and other policies designed to help them, according to two sources who have knowledge of the ruling, but were not authorized to speak publicly. 

They said the tribunal said the deal did not meet its criteria because it left some children out and did not guarantee the $40,000 in compensation for each child and caregiver ordered by the human rights body in a landmark ruling.

The federal government announced in January it had reached a $40 billion agreement with the Assembly of First Nations (AFN) to settle two class action lawsuits. The government said it met the terms of the human rights tribunal’s ruling.

The agreement set aside $20 billion for individual compensation and $20 billion for long-term reform of the on-reserve child welfare system.

Now, the federal government’s plan to finalize the $40 billion deal by the end of the year is being derailed.

Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, asked the Canadian Human Rights Tribunal to send the $20 billion compensation deal reached between Ottawa and the Assembly of First Nations back to the drawing board. (Olivia Stefanovich/CBC)

The agreement needed the approval of the Canadian Human Rights Tribunal, which ruled Ottawa’s on-reserve child-welfare system and its health care delivery discriminated against First Nations children. The tribunal ordered $40,000 in compensation to affected children and caregivers.

The federal government lost a challenge of the tribunal’s order before the Federal Court and paused a subsequent appeal pending the approval of a settlement agreement.

With the tribunal’s rejection, it appears Ottawa is headed back to court, continuing a legal battle waged since the First Nations Family and Caring Society —  with the support of the AFN — filed its human rights complaint in 2007.

Final settlement agreement left out children placed outside federally-funded placements

The First Nations child welfare settlement agreement between Ottawa and AFN is the largest in Canadian history.

It covers children and families on-reserve or in the Yukon who were discriminated against from 1991 on — a period 15 years longer than the one covered by the tribunal’s orders.

Under the agreement, every First Nations child who was forcibly removed from their home and put into the on-reserve child welfare system would get a minimum of $40,000 — or more, depending on the severity of harms they experienced.

But Cindy Blackstock, executive director of the Caring Society, asked the tribunal to send the deal back to the negotiating table because it short-changed compensation for some and gave nothing at all to others covered by the tribunal’s ruling.

AFN Regional Chief Cindy Woodhouse, left, and Indigenous Services Minister Patty Hajdu, centre, listen to Crown-Indigenous Relations Minister Marc Miller during a news conference in January when the federal government shared details of an agreement that pledges $40 billion for Indigenous child welfare. (Adrian Wyld/The Canadian Press)

Blackstock, who was not part of the compensation negotiations between the AFN and Ottawa, said the agreement leaves out children who were not in federally-funded child welfare placements.

But the federal government and the AFN disagreed and argued that only children placed in federally-funded placements are eligible for compensation under the tribunal’s orders.

“Any compromises that were made by the AFN were carefully considered, negotiated and discussed,” wrote AFN general counsel Stuart Wuttke in an Oct. 21 letter sent to the tribunal.

“To subject these victims to ongoing delays, and the outright risk to the payment of compensation more generally due to appellate intervention, would be an injustice.”

In 2016, the tribunal found Ottawa discriminated against First Nations children and said Canada’s actions led to “trauma and harm to the highest.”

A man waves an Every Child Matters flag as First Nations drummers sing and drum during a ceremony to mark the National Day for Truth and Reconciliation, at the site of the former St. Mary’s Indian Residential School in Mission, B.C., on Fri. Sept. 30, 2022. (Darryl Dyck/Canadian Press)

In 2019, the tribunal ordered Canada to pay the maximum penalty under the Canadian Human Rights Act — $40,000 to each First Nations child and caregiver affected by the on-reserve foster care system and their parents or grandparents, as long as the children weren’t taken into care because of abuse.

It also ordered Canada to pay $40,000 to each child and caregiver denied essential services under a policy known as Jordan’s Principle.

Instead of paying compensation in the way the orders are worded, the government negotiated a deal with the Assembly of First Nations, which was suing Ottawa for $10 billion to compensate a group of children and families not covered by the tribunal’s orders.

In January 2022, the AFN and the federal government announced a $40 billion settlement agreement to cover the cost of settling a Canadian Human Rights Tribunal order, two class action lawsuits and long-term reform of the Indigenous child welfare system over a five-year period.

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