Hymie Rubenstein, editor of REAL Indigenous Report, is a retired professor of anthropology at the University of Manitoba and a senior fellow at the Frontier Centre for Public Policy.An October 22 Fraser Institute report, Compensation for Past Treatment of Indigenous People, authored by Tom Flanagan and Nathaniel Li, shows that “Over the past 50 years — but primarily since 2017, Ottawa has paid out more than an estimated $110 billion to First Nations for lawsuit and class action settlements.”“Most Canadians are not aware of the enormous payments Ottawa has made to First Nations to settle legal claims and class action lawsuits,” said Tom Flanagan, a Fraser Institute senior fellow.The study also found that between 1974-75 and 2025-26, Ottawa paid out $29.4 billion to Indian bands to settle specific claims — essentially those cases where the court ruled the federal government had violated treaty rights or the Indian Act in the past.Crucially, the number and value of claims settled increased significantly starting in 2017-18 and peaked in 2024-25, when 69 claims were settled for a total of $7.3 billion that year alone.But specific claims are only one form of legal compensation for Indian bands.Increasingly, class actions and other litigation based on claims of mistreatment or rights violations have been brought against the federal government, including for Indian Residential School attendance, the “sixties scoop” adoption process, safe drinking water, and more.Settling class action suits has cost Ottawa an estimated $83.2 billion since 2007.“Because Ottawa’s compensatory payments are for historical wrongs, the number of Claims — and the amount taxpayers need to pay — should be going down, not up, but that is not the case,” Flanagan said.“The significant amount of money that the federal government has paid out, particularly in recent years, acts as an incentive to attract even more legal claims and class action lawsuits to be filed. This all begs the question of whether or not these efforts are improving the well-being of indigenous populations in Canada,” Flanagan asks..As shown below, the answer ranges between very little and not at all.Flanagan could also have asked whether these disbursements are sustainable if they continue at the same accelerated rate.Also worrying is the lack of transparency around these payments, coupled with the government’s lackadaisical efforts to verify indigenous status, both of which raise concerns about the long-term financial burden on our debt-ridden country.Making matters even worse, the socio-economic gap between indigenous and non-indigenous Canadians has not significantly improved, suggesting that targeted programs may be more a problem than a solution.According to a February 27 Globe and Mail editorial board opinion piece, the unsustainable financing of indigenous reconciliation is increasingly evident in the last federal budget, particularly through contingent liabilities related to land claims and associated litigation.The Globe and Mail piece focused nearly all its attention on the lack of clarity attached to reconciliation costs, citing a report in 2024 in which the Parliamentary Budget Officer looked at the growing cost of contingent liabilities — the shifting tally of settlements-to-be in any given year — and urged parliamentarians to push for more disclosure, noting that “it can at best be challenging, and often nearly impossible,” to follow the money through financial documents.The Liberal government revealed in its 2024 fall economic statement that it had blown past its deficit target, which was supposed to be at or below $40.1 billion. The update put the deficit at $61.9 billion for the fiscal year that ended March 31, 2024. Most of this overshoot was blamed on one-time costs tied to booking contingent liabilities for indigenous claims. Given the recurring nature of those supposedly one-time costs, this should not have been a surprise.Most of Canada’s constantly shifting contingent liabilities relate to indigenous land claim issues. The country earmarked $54.7 billion for such settlements in fiscal year 2024-25, up from almost $12.6 billion in 2016.None of these figures should raise eyebrows among those following out-of-control spending on indigenous issues and its general acceptance by the mainstream media.Objective critics would also note that such land-based liabilities are only part of massive government spending on what used to be called “the Indian problem.” The 2025 Canadian federal budget, for example, outlines significant spending on indigenous communities, with over $9 billion allocated for various initiatives over the next five years, focusing on housing, infrastructure, and water. Key highlights include $2.8 billion for urban, rural, and northern housing, $2.3 billion for water/wastewater projects, and a $10 billion Indigenous Loan Guarantee Program..Unknown to most Canadians, “housing, infrastructure, and water” rights were never enshrined in any of the Aboriginal land surrender treaties voluntarily signed with the British and Canadian governments during the nineteenth and twentieth centuries.Also virtually unknown, the federal government introduced Bill S-2, An Act to amend the Indian Act (new registration entitlements), in the Senate in 2025 to make changes to legislation first introduced in 2022, which had died on the order paper due to the 2025 election. The main issue is the repeal of the “second generation cutoff,” which had been legislated in 1985. Those amendments conferred Indian status upon the children of an Indian and a non-Indian, but such children could not transmit Indian status to their own children unless they parented with another Indian. Federal statisticians estimate that changing the second-generation rule to indefinitely confer Indian status as long as one parent is a registered Indian would increase the number of registered Indians by about 300,000, plus or minus an unknown margin of error, by 2066 (about 17% of the 2021 population).The average cost of the Non-Insured Health Benefits Program, accounting for inflation, would be about $3,000 per capita by 2066, so an additional 300,000 clients will cost close to a billion dollars. The government estimates approximately 3,500 individuals will be entitled to registration just in the first five years.Such additional reconciliation efforts are only part of the massive federal spending on indigenous issues carefully documented elsewhere by Flanagan where he argued that the Liberal government has shifted from managing expenditures to “shovelling out money,” with budgets for indigenous non-land issues rising from $11 billion in 2015 to a projected $32-$33 billion by 2025.As for his question of “whether or not these efforts are improving the well-being of indigenous populations in Canada,” data shows only a modest narrowing of the socio-economic gap between Aboriginal people and other Canadians. But even this reduction may be deceptive: Flanagan has suggested that improvements in living standards are more likely due to universal, non-targeted programs like the Canada Child Benefit (CCB) rather than direct, targeted spending on indigenous programs.He has also pointed to a surge in lawsuits and specific claims, with $76 billion in liabilities estimated by 2023, noting that the government is choosing to negotiate rather than litigate, creating a cycle of high payouts..Moreover, Flanagan has opined that the “biggest problem” is a lack of economic opportunity, driven by the remote location of many reserves. To address this deficiency, he advocates fostering “community capitalism” through resource extraction, infrastructure development, and private investment, rather than relying solely on government handouts.My own position is that a long-term historical perspective makes it clear that the British-imposed 1763 Royal Proclamation, the signing of apartheid treaties, the enactment of the separatist Indian Act, the racist enshrinement of special indigenous rights in the 1982 Constitution, the adoption of the balkanizing United Nations Declaration on the Rights of Indigenous Peoples Act in 2021, and other legislation and practices that retarded the full absorption of Western European beliefs, values, and practices have made the first settlers of Canada worse off today than they would otherwise be.This is best seen in contemporary social, economic, and health differentials between indigenous people and other Canadians.Placed in a comparative national context, indigenous people on- and off-reserve exhibit the lowest incomes; the highest rates of unemployment, non-working population numbers, poverty, welfare dependency, and homelessness; the most inferior housing; the highest rates of infant mortality; the lowest life expectancy; the highest disease and illness rates; the highest school dropout proportion; the highest rates of child apprehension, fostering, and adoption; the highest levels of suicide; the highest rates of sexual abuse; and the highest proportion of single motherhood.Government handouts only maintain or exacerbate these problems, rendering them morally bankrupt.Full socio-economic equality with other Canadians will never be achieved unless accompanied by the removal of the preferential and divisive legal rights and privileges of indigenous peoples.Hymie Rubenstein, editor of REAL Indigenous Report, is a retired professor of anthropology at the University of Manitoba and a senior fellow at the Frontier Centre for Public Policy.
