Indigenous Services routinely fails to spend millions approved for children's programs, document shows

Indigenous Services Canada fails to spend tens of millions of dollars approved for use on two high-demand children's programs — money which then "lapses," or expires, under federal accounting rules, official data show.

Nunavut MP Lori Idlout, who learned of the annual funding lapses at Jordan's Principle and the Inuit Child First Initiative through an order paper question, called the revelation disturbing.

"When I read the order paper response, I was just completely shocked, knowing how huge the need is," said Idlout, the NDP's Indigenous Services critic.

"There are so many stories of First Nations and Inuit children and families being forced to be in poverty, being forced to wait for their services, because Indigenous Services Canada just doesn't seem to care."

In a statement, a spokesperson for the Liberal government said the lapsed cash for both programs didn't disappear but was transferred for use in future years.

"All Inuit CFI [Child First Initiative] and Jordan's Principle funding have always been fully exhausted and allocated for requests," wrote Jennifer Kozelj, press secretary for Indigenous Services Minister Patty Hajdu.

"As both Jordan's Principle and Inuit CFI are request-based initiatives, any funding has been reprofiled and/or additional funding was received for the future."

In general, all unspent government funds expire, or lapse, at the end of the fiscal year, according to the Parliamentary Budget Office. That's because Parliament authorizes spending on a one-year basis for the most part, though departments can carry forward up to five per cent of their annual operating budget.

In 2019-20, Parliament authorized $658.4 million for use on the two children's programs, says the order paper response. Of that, $96.2 million was unspent by fiscal year's end. Next year, $743.6 million was approved for use on the programs, of which $161.5 million went unspent. 

Indigenous Services Canada was authorized to spend $757.7 million in 2021-22, with $99.2 million going unspent. In 2022-23, lawmakers authorized the department to spend $1.12 billion. By the end of the fiscal year, the response says $81.2 million wasn't spent.

That means a combined amount of $438.1 million went unspent over four years. 

Kozelj said funding numbers can change for a few reasons, including unanticipated changes in demand, implementation and the impact of the pandemic, which led to fewer requests for educational and social supports.

Idlout, however, argued the government's consistent failure to spend available money amid persistent child poverty and substandard health-care services "means that reconciliation is just a buzzword for them."

"It just goes to show how much the federal government is failing Inuit and First Nations. We know how much the needs are," she said.

Changes coming

Both programs currently face uncertainty.

Canada was recently ordered to immediately address a backlog of 140,000 unprocessed Jordan's Principle applications, but is challenging the order in court. Idlout, meanwhile, is raising the alarm as funding for the Inuit Child First Initiative will expire completely, or sunset, in spring 2025 unless the government passes a spending bill.

The programs aim to ensure kids can access essential health, social and educational products and services without delay due to jurisdictional squabbling.

Jordan's Principle is named for Jordan River Anderson, a Norway House Cree Nation boy born with multiple disabilities in 1999. Jordan died at age five, having spent his entire life in hospital while Manitoba and Ottawa bickered over who would pay the costs of his home care.

For its part, Indigenous Services Canada has staunchly opposed allegations that it is mismanaging the program.

In a 2024 affidavit filed at the Canadian Human Rights Tribunal, deputy minister Valerie Gideon said the range of approved expenses has shifted considerably over the years, moving away from the original purpose toward economic supports, like groceries and rent.

She argued the backlog was due in part to users misclassifying their requests as urgent. Gideon listed a range of allegedly misclassified requests, including modelling headshots, a snowmobile, a lawn mower, glow sticks, televisions and a zip line kit.

The family of Jordan River Anderson has recently spoken out on the issue, demanding First Nations leadership address the alleged misuse of the program.

"We need some answers. We need a meeting," said Jordan's father Ernest Anderson in a Jan. 28 Facebook video.

The Institute for Fiscal Studies and Democracy forecasts the program could see about 400,000 applications and more than $3 billion in approved funding by 2029-30 at the current rates of increase.

The increased volume led Hajdu to announce operational changes "to make sure requests align with the long-term sustainability of Jordan's Principle" earlier this week.

The changes suggest the department will no longer fund items the department previously classified as economic supports, like home renovations and groceries, nor educational supports Canada says are under provincial or territorial jurisdiction.