First Nations leaders blast feds for attributing deficit overrun to Indigenous legal claims

First Nations leaders are blasting the federal government and calling for an apology after Ottawa attributed its latest deficit overrun to Indigenous legal claims against the Crown.

On Monday, the minority Liberals tabled their annual fall economic statement in the House of Commons amid a political uproar sparked when the person slated to deliver it abruptly quit, plunging the ruling party into chaos.

Before resigning, former finance minister and deputy prime minister Chrystia Freeland promised to keep the federal deficit at or below $40 billion in 2023-24, but the statement revealed a deficit of $61.9 billion.

The Finance Department attributed the overshoot mainly to a “significant one-time” expense of $16.4 billion for settling Indigenous legal claims — something the grand council chief of the Anishinabek Nation swiftly and strongly condemned.

The comment was “utterly ridiculous” and “harkened back to the colonial mindset to villainize” and scapegoat First Nations, said Linda Debassige in a Tuesday news release.

“This type of slander is utterly shameful when the government said that there is no more important relationship than the one with First Nations.”

Debassige, whose organization advocates for 39 First Nations in Ontario, called it preposterous and a deflection from reality for the Liberal government to explain its deficit by referencing these hard-won settlements.

“They are, in fact, money that is owed from resources taken from our lands which we shared with settler immigrants to our lands,” she said in the news release.

“The Anishinabek Nation calls upon the government to apologize for this statement.”

The Assembly of First Nations, an advocacy organization representing chiefs countrywide, also took exception to the explanation for the deficit.

“These statements are misleading as these claims are a result of Canada failing to meet its obligations to First Nations,” said National Chief Cindy Woodhouse Nepinak in a statement Tuesday.

“Instead of spending resources on legal battles that question our inherent rights, the government must prioritize sustained, targeted investments that will grow the Canadian economy and advance reconciliation.”

The Assembly of Manitoba Chiefs (AMC) said the turmoil and political infighting in the House of Commons both before and after Freeland’s sudden resignation “is not just disruptive — it’s dangerous.”

“It diverts attention from the critical issues affecting the most vulnerable,” said acting grand chief Betsy Kennedy in a news release.

“This government’s failure to address First Nations’ priorities in the fall economic statement is a betrayal of its commitment to reconciliation.”

The tumult in the capital only exacerbates the frustration of First Nations, whose critical needs remain unaddressed amid the political instability, AMC said.

While the economic statement may point to the exponential increase in spending for First Nations over the last 10 years, large amounts are connected to claims won through the courts, the release continued.

The Finance Department responded with an emailed statement.

“The federal government is committed to its work in redressing historical wrongs towards Indigenous Peoples, and recognizes, from a fiscal management perspective, that we must improve how we anticipate and account for claims moving forward,” the department said.

A question of liability

At issue are what are known in accounting as “contingent liabilities.” 

Contingent liabilities are recorded when government lawyers believe Canada is likely to lose in court and the claim has a dollar value attached to it, resulting in a strong probability of future payment, the parliamentary budget officer has said.

The figure is thus Ottawa’s best guess at how much the Crown stands to lose through specific claims, comprehensive land claims and lawsuits, of which the two departments governing Indigenous affairs had about 1,152 against them at this time last year.

CBC Indigenous previously reported these estimated future liabilities owed to Indigenous people have grown nearly sevenfold under Prime Minister Justin Trudeau — to $76 billion in 2023 from $11 billion in 2015 — causing consternation and concern for Parliamentary Budget Officer Yves Giroux.

“As shown in recent years, expenses related to the provision for contingent liabilities can have a large impact on the federal government’s budgetary balance,” Giroux wrote in a July 2024 report.

The contingent liabilities decreased to $56.6 billion in 2024, a drop of more than $20 billion in just one year, according to the 2024 public accounts released Tuesday, a decrease the Finance Department said is “largely due to settlement agreements being reached.”

In other words, it appears the contingent liabilities only encompass probable future payments as claims wind through courts, tribunals and negotiations, not finalized settlements. 

The department won’t say which claims led the government to book $16.4 billion in liabilities.

The expenses for contingent liabilities relate to active litigation and may also be the subject of ongoing negotiations, the department said.