Contextualization

On January 4, 2022, after several weeks of negotiation, a historic $20 billion agreement-in-principle on compensation and reform of the federal First Nations Child and Family Services (FNCFS) program was reached between Canada, the Assembly of First Nations (AFN), the First Nations Child and Family Caring Society of Canada and other parties with the goal of ending Canada’s discriminatory conduct.

This article provides an overview about the history of this agreement, its contents, and the associated next steps.

Long-standing systemic underfunding of child and family services

The case before the Canadian Human Rights Tribunal (CHRT) began in 2007. In 2016, it was found that Canada systematically discriminates against First Nations children and families. Thus, in its 2019 decision, the CHRT awarded $40,000 to the victims for harm suffered up to 2006.

Subsequently, a class action claim on behalf of Xavier Moushoom was filed in March 2019 for two main reasons:

• To seek compensation commensurate with the level of harm suffered (i.e., more than $40,000 per child).
• To seek compensation dating back to 1991, when the discriminatory underfunding of FNCFS began under Directive 20-1.

In January 2020, the AFN filed its own class action lawsuit, similar to Xavier Moushoom’s class action. The parties then decided to combine their efforts and, in November 2020, mediation was initiated in collaboration with the First Nations Child and Family Caring Society of Canada to resolve two issues, namely compensation and long-term reform of First Nations child and family services and funding.

A year later, the parties entered into mediation outside of the Federal Court process, chaired by the Honourable Murray Sinclair. On December 31, 2021, the agreement-in-principle regarding compensation was signed.

Who will benefit from this agreement?

The groups of people affected by this agreement are:

• First Nations children, ordinarily residing in a community or living in the Yukon, who were removed from their homes and placed in foster care at any time between April 1, 1991 and March 31, 2022.
• First Nations children who were victims of Canada’s violation of Jordan’s Principle at any time between December 12, 2007 and November 2, 2017.
• First Nations children whose equality rights, based on Jordan’s Principle, were violated between April 1, 1991 and December 11, 2007.
• Certain family members of the groups mentioned above.

Additionally, excluding the $20 billion in compensation, it was agreed that:

• Canada will pay all administrative costs to manage the settlement fund, the distribution process and notice to class members.
• Canada will fund mental health and cultural and spiritual support services, such as navigators.
• Canada will pay the costs separately from the settlement fund.
• No money will be returned to the Government of Canada following the claims process.

In addition, discussions are underway to ensure that the interest generated by the settlement fund and the payments to individual claimants will be exempt from federal income tax and that claimants will not have to reimburse or be penalized with respect to social assistance benefits.

What to expect next?

The various parties are currently negotiating and drafting a comprehensive settlement agreement, which must be completed by March 31, 2022. This settlement agreement will determine, among other things, the following elements:

• Who will receive how much and when.
• The administrative and governance structure to manage the funds.
• The claims process for receiving funds and the administrative structure.
• The tax treatment of the settlement fund and payments to claimants.
• The rights of children’s estates to make a claim.

Subsequently, this agreement must be approved by the Federal Court in September 2022.