Human rights tribunal says Indigenous Services minister, AFN misled public on $20B child welfare deal

Indigenous Services Minister Patty Hajdu and the Assembly of First Nations misled the public by not disclosing the fact that their $20-billion child welfare compensation deal left out some victims and reduced payments for others, says the Canadian Human Rights Tribunal.

The tribunal came to that conclusion in a Dec. 20 ruling obtained by CBC News that expands on its reasons for rejecting the child welfare agreement.

Last October, the tribunal concluded that the deal failed to ensure that each First Nations child and caregiver entitled to compensation under its human rights orders would receive $40,000 — even though Hajdu told the public that was the baseline for compensation.

When the final settlement agreement between Ottawa and the Assembly of First Nations (AFN) was first announced last January, Hajdu said that "$40,000 is the floor and there may be circumstances where people are entitled to more."

In its Dec. 20 ruling, the tribunal said the minister's statement left the impression the deal offered enhanced compensation.

"Nowhere does the minister say this may not be the case for all the victims/survivors who form part of the tribunal's orders," the ruling said.

"This is still a misleading statement."

In a statement sent to CBC News, Hajdu's office didn't specifically address the tribunal's criticism but said the government's position has not changed.

"We'll continue to work together with parties to deliver compensation to those who are entitled to it, and this includes a $40,000 floor for those in the removed child class," the statement said.

Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, said Ottawa has a habit in its public communications of ignoring the agreement's fine print.

"The government wasn't telling the whole truth," said Blackstock, who filed the original human rights complaint with the AFN against Canada in 2007.

"That does a disservice to the public."

The tribunal also criticized the AFN for not informing victims that they may see their payments reduced or receive nothing at all.

"This is clearly misleading and lacking in transparency," the ruling said.

Ottawa trying to 'hide' behind AFN: tribunal

The ruling concluded Ottawa and the AFN ignored the "grave injustice" of leaving out victims in a push to finalize the $20-billion settlement.

It said Canada is trying to "shield itself" from some tribunal orders by "hiding behind the fact" that the AFN made compromises.

"This is only occurring because Canada placed a cap on compensation," the ruling said.

"While the amount of compensation is impressive, what is more impressive is the length and breadth of Canada's systemic racial discrimination over decades, impacting hundreds of thousands of victims who deserve compensation."

The tribunal identified four main deviations from its orders in the agreement. It said the agreement:

• Leaves out First Nations children placed in non-federally funded child welfare placements
• Leaves out deceased parents and grandparents
• Offers less compensation to caregivers
• May offer less compensation to victims who were denied essential services under a federal policy known as Jordan's Principle.

Canada argued victims of non-federally funded placements were not part of the orders — but the tribunal said it never limited Canada's liability based on whether a child's placement was funded by Indigenous Services Canada.

'Dangerous precedent' for human rights system

The tribunal said approving the settlement would be an "absurd interpretation" of the Canadian Human Rights Act and would undermine its ability to protect human rights. The tribunal said it would allow respondents, like Canada, to avoid liability in the future by reaching agreements outside the tribunal's jurisdiction.

"The potential for setting a dangerous precedent is significant and could have widespread impacts on the human rights system," the ruling said.

In 2019, the tribunal issued orders telling Ottawa to pay the maximum penalty under the Canadian Human Rights Act — $40,000 to each First Nations child and caregiver who was harmed by the on-reserve child welfare system or was denied essential services.

It covers all First Nations children placed in the foster care system from Jan. 1, 2006, to a date to be determined by the tribunal.

The Jordan's Principle portion of the orders covers the period from Dec. 12, 2007 — when the House of Commons adopted the federal policy — to Nov. 2, 2017, when the tribunal directed the federal government to change its definition of Jordan's Principle and review previously denied requests.

The orders, which have been upheld by the Federal Court, stem from a landmark 2016 tribunal ruling that found Canada racially discriminated against First Nations children on-reserve and in the Yukon by underfunding on-reserve child welfare systems and failing to provide adequate prevention services.

There are more Indigenous children in the foster care system now than at the height of the residential school era.

First Nations, Inuit and Métis children account for 53.8 per cent of all children in foster care, according to Statistics Canada's 2021 census.

The settlement finalized between Ottawa and the AFN on July 4 accounts for half of a $40-billion-dollar pool Ottawa set aside for reparations and long-term reform of the on-reserve foster care system.

Minister hopes money will be released in 2023

Compensation was supposed to start flowing in 2023. Crown-Indigenous Relations Minister Marc Miller told CBC News he's optimistic that can still happen 

"I certainly hope so," Miller said. "I don't like the fact that people are waiting."

Miller said the government is willing to continue negotiations with parties to release funds, "hopefully outside a judicial process."

AFN Manitoba Regional Chief Cindy Woodhouse, who is the lead negotiator for the assembly, said the government is open to talks about adding more money.

"As my boys say in hockey, you've got the puck right there and you just have to score,'' said Woodhouse, who added work will continue through the holidays.

"We're at that goal line."

The agreement aims to satisfy the tribunal's compensation orders, along with two class-action lawsuits, by pushing back the date covered by compensation to April 1991, expanding eligibility to about 56,000 more individuals.

But the tribunal is worried the agreement applies a "class action lens" to compensation and found the opt-out period from compensation is too short.

"This is not healthy reconciliation," the tribunal said.

Mohsen Seddigh, counsel for those class-action lawsuits, said the tribunal's full reasons will help parties find a resolution.

"We are doing everything that we can in collaboration with all parties to get there," Seddigh said.

What's next

In its ruling, the tribunal said the agreement can be approved if it's amended to fully satisfy the tribunal's orders — or the parties can remove the requirement for the tribunal's approval.

This would allow the federal government to settle its class action lawsuits and pay compensation in early 2023. But the government would still have to comply with the tribunal's compensation orders, which it is currently fighting in court.

The AFN also filed a judicial review. Woodhouse said it will be re-evaluated at an executive meeting in January.

The government was supposed to finalize its $20-billion plan to reform the on-reserve child welfare system by the end of 2022. Blackstock said that won't happen.

She said she troubled by the fact the government, which is facing 20 legal orders to address ongoing discrimination, is offering $19.8 billion over five years with no certainty about what will happen afterwards.

"I will not be satisfied with a five-year deal," Blackstock said. "We can't trust them to do the right thing in year six and beyond."