Ottawa releases early details of landmark $40B First Nations child welfare agreement

The federal government and First Nations leaders have struck a historic $40 billion agreement-in-principle to compensate young people harmed by Canada’s discriminatory child welfare system while reforming the system that tore First Nations children from their communities for decades.

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

If approved, the financial settlement would be the largest of its kind in Canadian history. The parties have until March 31 to finalize the agreement.

“First Nations from across Canada have had to work very hard for this day to provide redress for monumental wrongs against First Nation children. Wrongs fuelled by an inherently biased system,” said Assembly of First Nations Manitoba Regional Chief Cindy Woodhouse during a news conference in Ottawa.

Woodhouse said that, instead of giving First Nations “help with food, clothing or shelter,” the government’s approach to child welfare funnelled Indigenous children into the foster care system.

Compensation will be made available to First Nations children on-reserve and in the Yukon who were removed from their homes between April 1, 1991 and March 31, 2022.

Compensation will also be made available to those affected by what the government called its “narrow definition” of Jordan’s Principle, used between Dec. 12, 2007 and Nov. 2, 2017. Compensation is being extended to children who did not receive an essential public service or faced delays in accessing such services between April 1, 1991 and Dec. 11, 2007.

The federal government says it will share additional details of the agreement so that prospective applicants can know whether they qualify. The AFN estimates that more than 200,000 children and youth could be eligible.

WATCH | Indigenous services minister discusses new child welfare agreement on CBC’s Power & Politics

It’s not clear yet when payments will be made or exactly how much each recipient will be paid.

The Canadian Human Rights Tribunal ruled in 2016 that $40,000 should be paid to each First Nations child unnecessarily placed in foster care.

“Our expectation is that $40,000 is the floor and there may be circumstances where people are entitled to more,” said Indigenous Services Minister Patty Hajdu.

The First Nations Child and Family Caring Society, the Assembly of First Nations (AFN) and lawyers for several related class action lawsuits completed negotiations with the federal government late the night of Dec. 31, after two months of intense talks.

‘A plan for the future’

Some parents and caregivers also will be eligible for compensation.

The $20 billion dedicated to long-term reform of the child welfare system will be distributed over a period of five years, the government said.

“Today is about a plan for the future, with First Nations defining and determining a path forward grounded in our rights and the common goal to have our children succeed,” said Woodhouse.

Hajdu praised First Nations leaders for their decades of advocacy on behalf of children and Indigenous communities.

“No compensation amount can make up for the trauma people have experienced, but these agreements-in-principle acknowledge to survivors and their families the harm and pain caused by the discrimination in funding and services,” Hajdu said.

Parties have until end of March to hammer out details

If the deal is finalized, some aspects of the agreement would kick in as early as April 1, according to two sources with knowledge of the negotiations. CBC is not naming them because they are not authorized to speak publicly about the agreement.

Those details include a commitment from Ottawa to launch an independent review of how Indigenous Services Canada treats First Nations children. The parties involved in the negotiations are to appoint a committee of experts within 60 days of the Canadian Human Rights Tribunal (CHRT) deciding whether to approve the agreement in principle.

The federal government is to give $2,500 annually over five years to each member of all 630 First Nations for various services to prevent child apprehensions, such as mental health and cultural supports, and to address multi-generational trauma lingering from residential schools and the on-reserve child welfare system. The money is to be given to their community agencies, not to the individuals themselves.

WATCH | Cindy Blackstock on the $40 billion agreement

Ottawa also has agreed to provide support to youths aged out of care between the ages of 18 and 25, including those who are in that age bracket now. They will be eligible for services to help them find housing, improve their financial literacy and learn life skills, such as cooking.

Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, told CBC News she hopes the agreement will provide a “roadmap” to satisfy the Canadian Human Rights Tribunal (CHRT) order to end discrimination against First Nations children.

“No child’s life is better today than it was yesterday because of these words on paper,” Blackstock said. “We have to see the government actually deliver this stuff.”

The agreement must be approved by the CHRT and the Federal Court before it is finalized.

The CHRT ordered Canada to compensate any child who has been in the care of the on-reserve child welfare system at any point between Jan. 1, 2006, and whenever the tribunal decides discrimination against First Nations kids has ceased.

If approved, the agreement could end a 15-year legal battle and provide compensation for tens of thousands of people.

A final agreement is expected to be approved in late 2022.

How it started

The First Nations Child and Family Caring Society and the Assembly of First Nations filed a complaint under the Canadian Human Rights Act in 2007 alleging the federal government discriminated against First Nations children by underfunding the on-reserve child welfare system and by not complying with Jordan’s Principle — a policy that states the needs of a First Nations child requiring a government service take precedence over jurisdictional disputes over who pays for it.

In 2016, the Canadian Human Rights Tribunal found the federal government discriminated against First Nations children and said Canada’s actions led to “trauma and harm to the highest degree, causing pain and suffering.”

The tribunal ordered Ottawa to pay $40,000 — the maximum allowed under the Canadian Human Rights Act — to each child affected by the on-reserve child welfare system, along with their primary guardians, as long as the children weren’t taken into foster care because of abuse.

It also directed the federal government to pay $40,000 each to all First Nations children, along with their primary guardians, who were denied services or forced to leave home to access services covered by Jordan’s Principle from Dec. 12, 2007 — when the House of Commons adopted the policy  — to Nov. 2, 2017, when the tribunal ordered Canada to change its definition of Jordan’s Principle and review previously denied requests.

“This $40,000 is not a lot of money for a lost childhood, but it’s some recognition to them and hopefully it provides a little foothold for them to have a brighter future,” Blackstock said.

The order also stated compensation must be paid to the estates of deceased individuals who would have been eligible for compensation.

In the fall of 2019, the federal government submitted an application to the Federal Court to set aside the tribunal’s order and dismiss the claim for compensation. That decision was widely condemned by First Nations leaders, the NDP, the Green Party and human rights organizations like Amnesty International.

The government said at the time that it did not oppose compensation. It argued that the tribunal did not have jurisdiction to order specific compensation amounts in the manner of a class action lawsuit.

“The issue here is not whether the discrimination … existed … Canada has accepted that result,” said Sony Perron, the associate deputy minister of Indigenous Services Canada (ISC), in an affidavit filed with the Federal Court.

“The issue … is that the tribunal has issued a sweeping decision that will significantly impact ISC (Indigenous Services Canada) and Crown-Indigenous relations and that raises important questions of public policy that only cabinet can decide.”

The government also took issue with the fact that the order would award the same amount of money to someone who spent one day in care as it would to someone who spent an entire childhood there.

In September 2021, the Federal Court dismissed the government’s judicial review application.

In his ruling — released on the eve of the first National Day of Truth and Reconciliation — Justice Paul Favel said negotiations could help realize the goal of reconciliation and would be “the preferred outcome for both Indigenous people and Canada.”

One month later, the government announced it intended to appeal the decision, but would put litigation on hold as it entered negotiations mediated by former senator Murray Sinclair, who chaired the Truth and Reconciliation Commission.

While the talks resulted in an agreement-in-principle, the federal government will not drop its Federal Court appeal until the agreement is approved.