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Court of Queen’s Bench judge rules Manitoba misused benefits meant for children in foster care

Sides with Indigenous groups who argued the money was misappropriated to reduce province's costs.

PHOTO: A Manitoba judge ruled the province misappropriated child benefits meant for kids in foster care
In what lawyers representing Indigenous child welfare societies and chiefs in Manitoba describe as a “seismic” decision, a Court of Queen’s Bench judge has found Manitoba misappropriated benefits.

Justice James Edmond ruled the government’s actions violated equality rights under the Charter of Rights and Freedoms because Indigenous children make up almost 90 percent of children in care. Disabled children were also affected, he said, because a disability benefit is also included in the federal allowance.

“The evidence establishes a disadvantage resulting from a policy denying a benefit to the claimant group that is not denied to others,” Edmond wrote, describing these children among the “most vulnerable members of our society.”

Following Justice Edmond’s decision, lawyers at Cochrane Saxberg, who represented the 19 groups, said at a news briefing on the ruling that two lawsuits against the province can now move forward. They also say that because of the decision, children in care and former children in care should be paid all the money, estimated at $334 million, that they should have received between 2006 and 2019.

“We’re very happy that someone who has the power, a judge, said this is theft, and it’s going to stop,” said Shawn Scarcello, one of the plaintiffs’ lawyers. The next step will be pushing a related class-action lawsuit forward to compensate those entitled to the benefit.

From 2006 to 2019, the Manitoba government used the Federal Children’s Special Allowance (CSA) payments earmarked for off-reserve First Nation and Metis children in care, as a means, according to the Indigenous groups, to reduce its child welfare funding obligations.

At issue is whether the province was right to force agencies to remit monthly federal funding of $456 to $783 per child to the provincial government. The former NDP government enacted the policy in 2006, which forced agencies to send cheques to the province monthly.

The governing Progressive Conservatives eventually ended the practice in 2019.

The monthly CSA payments equal the maximum Canada Child Benefit payment plus the Child Disability Benefit. The point of the CSA is to provide children who have been removed from their parents and placed in care with the same benefit that all other children (those not in the child welfare system) receive through the Canada Child Benefit and the Child Disability Benefit.

Indigenous child and family service agencies typically apply to the federal government for these funds on behalf of children in their care, consistent with the federal Children’s Special Allowance Act. It states that the funds are to be used exclusively for the care, maintenance, education, training, or advancement of the child in care.

Prior to enacting the policy in 2006, some agencies would put a portion of the federal funds in a trust for children to access when they aged out of the system.

However, the Indigenous groups allege that Manitoba has taken over $334 million intended for children in foster care, 88 percent of whom are First Nation and Metis children. The lawsuits argue that more than $250 million should have gone to Indigenous CFS Agencies.

The two court actions were already in progress, aimed at forcing Manitoba to stop taking the CSA benefits. However, in 2020, Manitoba passed section 231 of its Budget Implementation and Tax Statutes Amendment Act (BITSA), which deemed both legal actions to be dismissed, causing the agencies to take the province to court on the validity of the law.

The province contends that since the government was required to pay for children in care, the federal funding was Manitoba’s to keep. The diverted went into the province’s general revenues. If an agency didn’t remit the payments, it would lose provincial funding.

After hearing arguments in October of 2021, Justice Edmond ruled in a decision released Thursday that Manitoba’s actions and section 231 of BITSA were unconstitutional and that they discriminated against foster children in Manitoba.

The judge also said there was insufficient evidence that Manitoba replaced the federal money it clawed back with its own funding.

“In fact, there is evidence to the contrary,” he wrote.

While the federal government increased its allowance payments every year, Justice Edmond said that the province froze funding rates for many child welfare services between 2012 and 2019.

Indigenous child and family service agencies and others involved in the court action expect that, as a result of the decision, children in care and former children in care will receive all the CSA money they should have gotten between 2006-2019.

“This is a huge victory for First Nation and Metis children in care in Manitoba,” said Stella Bone, Executive Director of West Region Child and Family Services. She added that the 19 groups that fought against the province’s actions “stood up on their behalf, and we won.”

“Many children age out of the system without any resources set aside to help set them up for success in the future,” said Greg Besant, Executive Director of the Metis Child, Family and Community Services Agency.

“The effect of Manitoba’s actions was that children in care funded by Manitoba received less support and opportunities while in care than children in care funded by the Government of Canada.”

There was no immediate reaction from the provincial government.

“I urge the current (Progressive) Conservative government to honour the decision, immediately settle the outstanding remedies, and not appeal the decision,” Cornell McLean, acting grand chief of the Assembly of Manitoba Chiefs, said Thursday.

“I am thankful that the voices of our most vulnerable children have been heard,” said Trudy Lavallee, Executive Director of Animikii Ozoson Child and Family Services. “Manitoba should be ashamed. It is time for our governments to stop litigating against Indigenous children. Reconciliation requires more. Much more.”


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