Legal clocks are ticking for Ottawa, AFN following tribunal’s refusal to declare compensation order fulfilled

Brett Forester · CBC News · Posted: Nov 18, 2022 4:00 AM ET | Last Updated: November 18

The Assembly of First Nations hasn’t ruled out taking the Canadian Human Rights Tribunal to court over its rejection of a multi-billion-dollar proposed class-action settlement with the federal Liberals, who refuse to say whether they’re planning a legal challenge as the deadline to file one nears.

“We haven’t ruled out anything,” said Cindy Woodhouse, AFN regional chief for Manitoba, when asked Thursday if the assembly is mulling a court challenge.

“We have our First Nations technicians and our First Nations legal people coming together to pull all options together and put them on the table: Where do we go from here?”

The deal, announced in January and signed in June, pledged $20 billion to victims of the chronically underfunded First Nations child-welfare system, but the entire pact was “conditional” on the tribunal declaring a pre-existing compensation order from 2019 fulfilled.

Since that didn’t happen, the settlement is now on life support — and while the deal could be re-negotiated and re-signed, another way for Canada and the AFN to try and revive it is through judicial review.

Anyone directly affected by a federal tribunal order or decision can challenge that decision through judicial review “within 30 days after the time the decision or order was first communicated,” according to Canada’s Federal Court.

Since the human rights tribunal first communicated its decision in a letter dated Oct. 24, that would give either Canada, the AFN or the First Nations Child and Family Caring Society and its executive director Cindy Blackstock until next week to file one.

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Cabinet ministers have been tight-lipped about Ottawa’s plans. A spokesperson for Justice Minister David Lametti referred questions to Indigenous Services Minister Patty Hajdu, whose office declined to comment on the prospect of judicial review, saying a determination about next steps had not been made.

If a review is filed, the case could ultimately go to the Federal Court of Appeal and the Supreme Court of Canada — but that’s not the only possibility.

Appeal court awaits update on separate challenge

Canada also has a separate, “protective” challenge to the tribunal’s compensation order on hold at the Federal Court of Appeal, which it can re-activate at any time.

The clock is ticking on that case, too, the court registry shows. The appeal will remain on hold for 45 days following the tribunal decision, at which point Ottawa must provide an update, the court’s most recent order says.

That gives Canada until the first week of December to decide what to do there.

While the AFN and Canada co-operated to seek the tribunal’s approval for the class action settlement, the national advocacy organization vigorously opposed Ottawa’s bid to overturn the compensation order.

Woodhouse said negotiation is still the preferred route in every case, even if litigation is once again on the table.

“All parties need to come together and work this out. We have 300,000 First Nations people that are waiting for compensation — and waiting, more importantly, for fixing a really broken system,” she said.

“Every day that we wait, more kids get taken into care and more damage is done to First Nations people.”

Tribunal’s compensation order still stands

The case dates to 2007 when the AFN and Blackstock lodged a complaint with the Canadian Human Rights Commission alleging Ottawa had racially discriminated against First Nations children for years by knowingly underfunding the child-welfare system on reserves and in the Yukon.

In a landmark 2016 decision, the tribunal found Canada’s funding practices were racist and constituted systematic human rights violations.

The tribunal said this racial discrimination was “wilful and reckless” in 2019 when it issued its now-contested order for Canada to pay the statutory maximum of $40,000 to each victim and certain family members.

The Justice Department deployed one of its top litigators in a bid to quash that order through judicial review last year, but failed. That’s when Canada filed its currently on-hold “protective” appeal.

As a result, the compensation order still technically stands, and Blackstock’s society urged the tribunal to preserve the order’s integrity after AFN and Canada requested a modification.

The non-partisan parliamentary budget office estimates it may cost up to $15 billion for Canada to obey that order, as originally issued, and compensate those victims.

If Canada does try again to overturn that ruling, however, it too could wind up at the Supreme Court.

Class action could go to trial

Meanwhile, if the settlement can’t be renegotiated — and if no judicial review is filed or is filed and fails — the class-action lawsuit could go to trial, say court filings obtained by CBC News.

Lead plaintiff Xavier Moushoom, a survivor of the child-welfare system from the Lac Simon Anishnabe Nation in Quebec, filed the case in 2019. The AFN filed its suit a year later, and they soon joined forces and now proceed as one.

Class counsel, anticipating success at the tribunal, submitted a motion in early September urging the Federal Court to approve the settlement deal. In it, they say a trial would be fraught with uncertainty and risk, particularly for the plaintiffs.

“Like many First Nations class proceedings, the plaintiffs face evidentiary hurdles in proving historical or semi-historical wrongs,” they say in written arguments.

“Many harms were suffered decades ago, while the now-adult class members were children. In the case of more recent discrimination, the plaintiffs are still youths, and face the concomitant difficulties in gathering evidence from minors.”

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Canada could always succeed in quashing the compensation order, and there’s no guarantee a successful trial could win damages topping $20 billion, the filings add. But even so, if the settlement does fall apart, they say they’re willing to proceed to trial.

The $20-billion class-action settlement is separate from a $20-billion deal on long-term reform. This second deal does not form any part of the current litigation.