Canada reaches $31.5 billion deal over Indigenous children put in foster care unnecessarily

TORONTO - Canadian officials said Tuesday they have reached $31.5 billion in agreements in principle with Indigenous groups to compensate First Nations children who were unnecessarily taken from their homes and put into the child welfare system, a major development in a dispute that’s long been a sticking point in Ottawa’s efforts to advance reconciliation with Indigenous people.

Under the agreements, half of the money would go to children and families harmed by an underfunded and discriminatory child welfare system on First Nations reserves and in the Yukon, while the rest would be earmarked over five years for long-term reforms, the Indigenous services ministry said in a statement.

Final details are to be settled between the government and Indigenous advocates over the coming months. A final agreement will be submitted to a federal court and human rights tribunal for approval.

The dispute, which includes a human rights complaint and several class-action lawsuits, has spanned 14 years and several federal governments. Prime Minister Justin Trudeau, who came to power in 2015 vowing to put reconciliation with Indigenous people at the core of his agenda, has drawn criticism for his handling of it.

The dispute dates to 2007 when several Indigenous advocacy groups claimed in a human rights complaint that the federal government’s “inequitable and insufficient” funding of child welfare services on First Nations reserves was discriminatory.

In 2016, the Canadian Human Rights Tribunal agreed with the advocates. The panel said the federal government’s funding formula was based on “flawed assumptions about children in care,” resulting in a system that incentivized the removal of First Nations children from their homes.

“It is only because of their race and/or national or ethnic origin that they suffer the adverse impacts,” the tribunal said in its decision. “. . .Furthermore, these adverse impacts perpetuate the historical disadvantage and trauma suffered by Aboriginal people.”


In 2019, the tribunal ordered the federal government to pay roughly $31,000 to each child unnecessarily removed from their homes since 2006 due to “willful and reckless” discrimination. It said parents and grandparents could also be eligible for compensation.

Advocates say as many as 50,000 children could be covered by the decision.

Trudeau’s government sought a judicial review of the ruling and drew criticism for “fighting Indigenous kids in court.” Canada’s federal court dismissed the government’s application in September, saying that Ottawa failed to establish that the compensation ruling was unreasonable.

The government appealed that decision but said it had “paused” the appeal while it engaged in efforts to reach an out-of-court settlement with the groups instead.

It announced last month it would set aside $31 billion to resolve the dispute but said negotiations were ongoing. The talks were chaired by Murray Sinclair, the former senator who chaired the Truth and Reconciliation Commission that investigated residential schools.

The agreements in principle would compensate First Nations children on reserves and in the Yukon who were removed from their homes between April 1, 1991, and March 31, 2022, as well as their caregivers. The funding set aside for long-term reforms would include money to help support children aging out of the child welfare system and for on-reserve housing.

Canada’s mistreatment of Indigenous people and the intergenerational trauma stemming from its colonial policies drew renewed attention last year when several Indigenous communities said ground-penetrating radar had uncovered evidence of hundreds of unmarked graves on or near the sites of former residential schools.

Beginning in the 19th century, roughly 150,000 Indigenous children were separated from their families - often forcibly - and sent to the government-funded, mostly church-run schools, which operated with the aim of assimilating Indigenous children. The last government-funded school closed in 1997.

A Truth and Reconciliation Commission said in a 2015 report that many children suffered physical, sexual and psychological abuse at the institutions, which punished them for speaking their languages and practicing their traditions in what it said amounted to “cultural genocide.”

The commission documented the deaths of thousands of children at the school but said the figure was probably an undercount, in part because record-keeping was shoddy. Children died from malnutrition, diseases that spread easily in cramped quarters, suicide and escape attempts. Some were buried in unmarked graves.

The federal government apologized for residential schools in 2008. Trudeau has vowed to implement all of the commission’s 94 calls to action, including one to reduce the disproportionate number of Indigenous children in the child welfare system - a situation that a cabinet minister once described as a “humanitarian crisis.”

Roughly 7 percent of children in Canada are Indigenous, but they make up more than 52 percent of children in foster care, according to 2016 census data. Advocates have contended that the child welfare system is effectively a modern version of the residential school system.

In 2019, Trudeau’s government passed a law that sought to affirm and recognize the rights of Indigenous groups to have jurisdiction over child and family care services in their communities. The first agreement with the federal government under the law was signed last year by the Cowessess First Nation in Saskatchewan. It gives the First Nation control over child welfare services and whether children are removed from their homes.

The deal announced Tuesday comes several weeks after Canadian courts approved an agreement between the federal government and Indigenous groups to settle-class action lawsuits to compensate First Nations people lacking clean and reliable drinking water on reserves.