By ANDY BLATCHFORDThe Canadian Press
Wed., Oct. 10, 2018
OTTAWA—The federal
government’s forthcoming annual public accounts will release a trove of numbers
that will show how much more Ottawa expects to pay to settle billions of
dollars in legal claims made by Indigenous Peoples and their communities.
The
contingent liabilities section in last year’s public accounts estimated Ottawa
would eventually have to pay out total of nearly $20 billion to cover 70
outstanding comprehensive Indigenous land claims, 528 smaller specific claims
and thousands of other cases of litigation, including those related to the
legacy of residential schools.
Assembly of First
Nations National Chief Perry Bellegarde pauses while speaking to a delegate
during the AFN annual general assembly, in Vancouver on Thursday, July 26. The
federal government's forthcoming annual public accounts will release a trove of
numbers that will show how much more Ottawa expects to pay to settle billions
of dollars in legal claims made by Indigenous Peoples and their communities. (DARRYL
DYCK / THE CANADIAN PRESS)
The total
is expected to grow again when the newest documents come out — as it has over
the past several years.
The gradual
climb of the government’s contingent liabilities is raising questions about how
the payments could eventually affect the federal bottom line as each claim is
settled.
A source
with knowledge of the government’s deliberations on Indigenous claims says
Ottawa has grappled internally with how best to account for the climbing
contingent liabilities and how they could ultimately impact the federal books.
The source spoke on condition of anonymity because they were not authorized to
discuss the issue publicly.
In recent
years, the federal public accounts have gradually raised the contingent
liability estimates for each of these types of claims. Combined, the public
accounts pegged them at a combined $18.4 billion in 2016, $16.6 billion in 2015
and less than $14.5 billion in 2014.
The annual
financial documents, which are typically released to the public in October,
define contingent liability as “a potential debt which may become an actual
financial obligation if certain events occur or fail to occur.”
But even
with the steady, year-to-year increases in the public accounts, some observers
believe the government has still underestimated just how much Ottawa could
eventually be on the hook for.
Lawyers who
have spent years representing Indigenous communities in their land claims warn
that Ottawa’s numbers are far too conservative — and could ultimately be at
least four or five times larger.
“It does
seem to me that this is probably a very unrealistic assessment of what their
contingent liability might look like,” said Ron Maurice, managing partner and
co-founder of Maurice Law Barristers & Solicitors in Redwood Meadows, Alta.
“It’s
growing and it’s silently chipping away, and creating a massive debt that at
some point we need to come to terms with.”
Maurice
said one reason the government might be keeping the contingent liabilities
lower than they should be is because it hopes to avoid making a negative
impression with ratings agencies.
He said
recent cases have shown the government has been paying out far greater sums for
compensation after spending years fighting land claims in the courts. In many
cases, he believes Ottawa would have been able to settle for much smaller
amounts and lower legal fees by avoiding a drawn-out process.
For
instance, Maurice pointed to the 2016 decision in a case involving 14
Indigenous communities, including a First Nation that he represented —
Saskatchewan’s Beardy’s and Okemasis.
He said the
group of First Nations was prepared to accept a settlement of $31 million about
10 years ago, but Ottawa argued the value of the claim was about zero. In the
end, he said the court ruled in favour of the communities and ordered Ottawa to
pay them a total of $50 million, including compounded interest.
The
example, if projected onto all of the outstanding claims, raises questions
about the reliability of the government’s figures as well as their risk
management strategies, he said.
Perry
Bellegarde, national chief of the Assembly of First Nations, wants the Auditor
General and other fiscal economists to help gauge just how much of a hit these
claims will be for Ottawa.
“I don’t
exactly know how they’re quantifying that right now,” Bellegarde said of the
federal assessments in a recent roundtable interview with The Canadian Press.
“All I know
is it’s a very big concern and it’s a very legitimate legal concern.”
He said
it’s crucial for the federal government to deal with the outstanding claims as
soon as possible for two main reasons: putting a stop to Ottawa’s ballooning
costs and providing a jolt of economic support for Indigenous communities.
“The sooner
you get it off Canada’s books, the sooner you’re going to have a positive
economic growth within Canada’s economy because First Nations people will have
access to capital. One of the biggest challenges for First Nations people is
lack of access to capital,” said Bellegarde, who noted that delaying the claims
also leads to higher interest payments.
“If you
don’t deal with these claims now, the claim is just going to get bigger and
bigger and bigger.”