Ottawa will appeal court ruling on Indigenous child welfare but says its pursuing a compensation deal

The Canadian government is appealing a Federal Court ruling that upheld a landmark Canadian Human Rights Tribunal ruling on Indigenous child welfare compensation â€" but Ottawa says it's also working with Indigenous groups to reach a compensation agreement by the end of the year.

While a notice of appeal was formally filed by the government on Friday, Ottawa says further legal action will be put on hold while the parties try to strike a deal.

"We will work with the parties to put in place an approach that will best serve the children," Minister of Indigenous Services Patty Hajdu told a news conference.

The government says it is committed to compensating children and families placed in the child welfare system but it has repeatedly contested legal decisions that may compel the government to pay.

Instead, the government says it wants to reach an agreement out of court â€" an option the parties representing children in the case have agreed to explore starting on Monday, Nov. 1.

"We will focus squarely on reaching an agreement outside of court and at the table," Hajdu added.

The government says it wants to reach a deal by December. The First Nations Child and Family Caring Society and Assembly of First Nations (AFN) will take part in the talks.

WATCH | Ministers speak about plan to reach compensation deal

Ministers confirm appeal of Federal Court ruling on Indigenous child welfare5 hours agoMinister of Indigenous Services Patty Hajdu, Minister of Crown-Indigenous Relations Marc Miller and Minister of Justice and Attorney General of Canada David Lametti announced on Friday, Oct. 29 that Ottawa is working with Indigenous groups to reach a compensation agreement by the end of the year. 2:07

"If there is no deal, we're going to go to hearings on an expedited basis. We don't want children to lose out on this time," said Cindy Blackstock, executive director of the First Nations Child and Family Caring Society and one of the key figures squaring off against the federal government.

"We're willing to press pause, but [the government] has agree to an expedited hearing schedule if we get into that room and it looks like [they're] not going to stop the discrimination," she told CBC's Power & Politics.

"While we are disappointed that Canada continues to pursue an appeal, we are encouraged that a deadline will be set to negotiate a settlement of this matter," said RoseAnne Archibald, national chief of the AFN.

In 2019, the tribunal ordered Ottawa to pay $40,000 â€" the maximum allowed under the Canadian Human Rights Act â€" to each child in the on-reserve child welfare system from at least Jan. 1, 2006, to a date to be determined by the tribunal.

The government says it will not discuss financial details of any compensation deal reached outside of court.

"We have put forward a significant financial package," Miller said of the government's plans to both pay children and reform the child welfare system itself. He later said the government has no "intention" to pay children less than $40,000.

Why file an appeal?

In a notice of appeal filed earlier on Friday afternoon, Ottawa requested an order to set aside both the Federal Court decision and the orders issued by the tribunal. The government describes this as a "protective appeal" that will not be pursued while negotiations are taking place.

"People can complain about the appeal that was filed today. We fully understand it. No one wants to be in a position to appeal. But depending on how those discussions go, we're very much prepared to remove it," said Minister of Crown-Indigenous Relations Marc Miller.

The federal government's argument is that the court erred by finding that the tribunal "acted reasonably" in its decision to order monetary compensation for children and families who were placed in the child welfare system.

WATCH | Cindy Blackstock on negotiations with the federal government

Feds pause litigation on Indigenous child welfare case in hopes to reach deal5 hours agoCindy Blackstock, the executive director of the First Nations Child and Family Caring Society and one of the key figures squaring off against the feds, says "if sitting down and talking to them will work, great. If not, we're going to the courtrooms again, because that's where we've been successful." 7:20

"Canada acknowledges the finding of systemic discrimination and does not oppose the general principle that compensation to First Nations individuals who experienced pain and suffering as a result of government misconduct should be provided," the notice of appeal reads.

"Awarding compensation to individuals in the manner ordered by the Tribunal, however, was inconsistent with the nature of the complaint, the evidence, past jurisprudence and the Canadian Human Rights Act."

Tribunal found government discriminated against Indigenous children

In 2016, the tribunal found the federal government discriminated against First Nations children by underfunding the on-reserve child welfare system.

It said Canada paid little attention to the consequences of removing First Nations children from their homes, resulting in "trauma and harm to the highest degree causing pain and suffering."

The tribunal said the parents and grandparents of those children (depending on who was the primary guardian at the time) would also be eligible for compensation, as long as children weren't taken away because of abuse.

The tribunal also directed the federal government to pay $40,000 to each First Nations child, along with their primary guardian, who was denied services or forced to leave home to access services covered by the policy known as Jordan's Principle.

That policy states that the needs of a First Nations child requiring a government service take precedence over jurisdictional disputes over who should pay for it.

Indigenous Services Minister Patty Hajdu says her government is committed to resolving systemic discrimination in the child welfare system. (Sean Kilpatrick/Canadian Press)

The Jordan's Principle portion of the order covers the period from Dec. 12, 2007 â€" when the House of Commons adopted Jordan's Principle â€" to Nov. 2, 2017, when the tribunal ordered Canada to change its definition of Jordan's Principle and review previously denied requests.

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

Some estimates place the number of potentially affected children at about 50,000, with the largest numbers in the Prairies and British Columbia. The ruling also covers First Nation children in Yukon.

Feds argued tribunal went too far

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. 

The decision drew widespread condemnation from First Nations leaders, the NDP, the Green Party and human rights organizations like Amnesty International.

"We need to compensate those who've been harmed, but the question is how to do that," Trudeau said in 2019. 

The federal government took issue with the precedent the tribunal's order set by arguing it did not have jurisdiction to order specific payments in the manner of a class action.

The government also noted 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.

Federal Court dismissed Ottawa's arguments

In his ruling, Federal Court Justice Paul Favel wrote that the tribunal "reasonably exercised its discretion" to "handle a complex case of discrimination to ensure that all issues were sufficiently dealt with and that the issue of compensation was addressed in phases."

Favel wrote that the Attorney General of Canada, who had asked for a judicial review and stay of the order, had "not succeeded in establishing that the compensation decision is unreasonable."

Favel also shared his thoughts on how negotiations can help realize the goal of Indigenous reconciliation.

"In my view, the procedural history of this case has demonstrated that there is, and has been, good will resulting in significant movements toward remedying this unprecedented discrimination," he wrote. 

"However, the good work of the parties is unfinished. The parties must decide whether they will continue to sit beside the trail or move forward in this spirit of reconciliation."

Favel's decision was released the day before the first National Day of Truth and Reconciliation. 

The tribunal directed Ottawa to enter discussions with the First Nations Family Caring Society and the Assembly of First Nations, which filed the original human rights complaint in 2008, to determine the best independent process to distribute the compensation and decide who qualifies.

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