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Sandwiched between emotional testimony from aboriginals who say Ottawa is taking a heartless approach to compensating residential-school victims, Deputy Prime Minister Anne McLellan told a Commons committee that the government's "groundbreaking" program is working well.

Ms. McLellan, who is responsible for residential schools, urged MPs on the Commons aboriginal committee to give the government's alternative dispute-resolution system, launched in 2003, a chance.

The minister said she is costing a proposal from the Assembly of First Nations to compensate all former students of residential schools for loss of language and culture, but expressed concerns about the approach.

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Currently, the government compensates only those who can prove they suffered physical or sexual abuse at the schools, and Ms. McLellan said loss of culture is not a "recognized legal cause of action" in Canada.

In responding to questions about the merits of a lump-sum payment, Ms. McLellan said any new plan must require natives to prove their claims. "Otherwise, I'd be before another committee responding to an auditor-general's report."

Opposition MPs lashed out at the minister, pointing out that previous testimony from former students and organizations, such as the Canadian Bar Association, shows that the government's plan does not work, and that far more is being spent on bureaucracy than payouts.

MPs further challenged Ms. McLellan's characterization of the program as holistic, pointing to testimony last week from 88-year-old Flora Merrick. The resident of Manitoba's Long Plain First Nation told MPs that the government is appealing her $1,500 award under its resolution system on the grounds that her tale of physical and psychological abuse was in line with "acceptable standards of the day."

Ms. McLellan declined comment on Ms. Merrick's case but said the fact that Ottawa is receiving 16 to 17 applications a week from natives looking for an alternative to the courts shows Ottawa's approach works. The minister said 2,000 of 13,500 claims have been resolved.

Assembly of First Nations National Chief Phil Fontaine challenged Ms. McLellan's numbers.

Mr. Fontaine, who says he experienced physical and sexual abuse in the schools, said 87,000 former students are alive, but only 27 claims have been settled under the alternative dispute-resolution process.

The AFN estimates that about four former students die a week, and the current system would take 53 years to resolve all cases.

Calling it the "most disgraceful, harmful, racist experiment ever conducted in our history," the normally subdued chief struggled to discuss the topic and brought an elder with him to hold his shoulders as he delivered his remarks.

"I know what over 150,000 of my people lived through, and I resent the need for us to tell our heart-wrenching stories over and over again in order to convince you of their truth.

"I resent being told that Canada can't afford to pay survivors the compensation we are owed," Mr. Fontaine told MPs.

After the meeting, Mr. Fontaine declined to comment on most of Ms. McLellan's testimony but said he is pleased the minister is open to discussing the AFN's recommendations.

Conservative MP Jim Prentice said Ms. McLellan appears to be the only person who thinks the government's plan works.

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"What we have heard as a committee has moved us, appalled us and shamed us," Mr. Prentice said. "This system is inhumane and is not working."

Other opposition MPs offered similar comments, including Tory MP Gary Lunn, who said Ms. Merrick's story of being locked in a dark room for two weeks because she tried to attend her mother's funeral was the most moving testimony he had heard in his seven years as an MP.

The committee plans to issue a report in the coming weeks on the adequacy of the government's approach to residential schools compensation. New Democrat MP Pat Martin has put forward a motion calling on the committee to endorse the AFN report's recommendations.

The AFN estimates that the government's current plan would cost at least $5.5-billion over 30 years, with only 29 per cent being paid to former students.

The organization said its plan would cost at least $4.3-billion over two years, with 93 per cent of the money going to former students.

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