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Members of an order of Roman Catholic priests want Ottawa to assume their liability for abuse claims in the residential-schools scandal. In exchange, they would turn over several million dollars worth of real estate and other assets, lawyers and church officials revealed yesterday.

"The reason is simple," said Rev. Jean-Paul Isabelle, provincial superior of the Missionary Oblates of Mary Immaculate of Manitoba. "The way things are going now, we'd be drained just paying for the lawyers. By the time we get to compensating the real victims, there'll be nothing left for them."

The order faces 2,000 lawsuits and estimates its potential liability at $90-million in Saskatchewan alone. Two recent cases in Saskatchewan were settled for $100,000 each, not counting punitive damages.

The proposal, believed to be the first of its kind in Canada, has yet to receive a formal response from federal litigators and power-brokers, said Rheal Teffaine, the Winnipeg lawyer who represents the Manitoba, Saskatchewan and Northwestern Ontario Oblates. Mr. Teffaine presented the proposal to the federal Justice Department with an audit of the Oblates' assets earlier this year.

Father Isabelle said just 79 Oblates are left in the Manitoba, Saskatchewan and Northwestern Ontario region. Their average age is 72. Six were administrators in 11 church-run residential schools for aboriginals. The Oblates ran 57 schools, mostly in Western Canada. So far, the priests, who have taken a vow of poverty, have spent more than $1-million defending their order against the 2,000 lawsuits brought by former students in the three provinces who allege sexual, emotional, and physical abuse by Oblates and their staff.

Residential schools existed in Canada from the 1880s until the early 1970s for the purpose of vocational training and assimilation of aboriginal children into society.

"Let justice take place," Father Isabelle said, noting that the residential schools were created by the federal government, and that the churches, including Oblate missionaries, were contracted to run them. At the Oblates' request, Mr. Teffaine has drafted a "shared compensation" proposal that would prevent costly and time-consuming court cases. The proposal would assign almost all of the Oblates' real-estate and investment assets, estimated to be worth "several million dollars," to the Crown.

The assets include residences where Oblate clergy live, a bank account and other investments.

Under their proposal, the Oblates would retain some assets so the few who are still alive can be cared for. There are six Oblate jurisdictions, or "provinces," in Canada, with almost 600 members.

In exchange, the federal government would protect the Oblates against future lawsuits associated with the residential schools. The Oblates propose establishing a tribunal to determine the legitimacy of the claims against the order. The transfer of Oblates' assets to the federal government would become part of a compensation package shared equally by the victims.

A British Columbia judge ruled in 1998 that both Ottawa and the Catholic Church were "vicariously liable" for abuse in the schools. And so the federal government has begun third-party legal action against the churches in the residential-school suits filed against Ottawa.

The cost of defending the lawsuits, not counting any future settlement, will almost certainly bankrupt some parishes, religious orders and dioceses.

Recently, officials of the Anglican Church, Canada's third-largest religious organization with 2.2-million members, announced that the general synod, the church's national head office in Toronto, will be bankrupt by next year should the legal battles continue.

In addition to the suits against the Oblates, nearly 7,000 lawsuits are in the works against Ottawa and the Anglican, United, Catholic and Presbyterian churches, which also administered schools.

The federal cabinet is considering a proposal to offer the churches financial aid in settling the cases.

After the Royal Commission on Aboriginal Peoples called in 1996 for a public inquiry into residential schools, Jane Stewart, then federal minister of Indian Affairs, announced a $350-million healing fund and said the Canadian government was "deeply sorry" for those who "suffered the tragedy of the residential schools."

Father Isabelle said he blames lawyers for the astounding number of lawsuits. (Some 105,000 natives went through residential schools). "The lawyers have been out soliciting claims against us," he said. "The rights of many of my men are being trampled here as well. They don't seem to have any rights."

He said the federal government must accept greater responsibility for residential schools.

"They hired, they fired," he said. "We had responsibility, yes. We ran the schools. But we were doing it for the government who wanted to assimilate the native children. This was a bad thing as we see now, and as missionaries we were complicit in this."

Some of the claims are specious, he suggested. Some former students are claiming compensation because they say they received a poor education.

If the proposal to Ottawa is rejected, defending the Oblates in the lawsuits could take another 10 years, he said. Legal fees will exhaust the Oblates' assets long before then, and the victims will receive nothing, he added.

"I am the Superior of the Missionary Oblates of Mary Immaculate," Father Isabelle said. "I'm not the Superior of the Royal Mint of Canada."

In a brief to federal lawyers in Ottawa, Mr. Teffaine suggested an "eminent" third party be assigned to mediate an out-of-court settlement with the residential-school victims. He said the Oblates, an order that was founded in France in 1816 and started the University of Ottawa and St. Paul's University in Ottawa, would submit to an independent review of their assets for the purpose of assigning them to the federal government.

"[The Oblates]are facing in excess of 900 claims in Saskatchewan alone," he said in the brief. Two suits were recently settled for about $100,000 each, excluding punitive damages. "This suggests an overall liability of $90-million on the Saskatchewan claims alone. Even discounting that figure by 50 per cent [for invalid claims and claims of lesser magnitude]it becomes clearly obvious that the contingent exposure is many times greater than the net worth of the [Oblates]"

Mr. Teffaine said the assets, once transferred to the taxpayers of Canada, could then be distributed evenly among legitimate victims, to be determined by a third party. This way, the early settlements will not dissipate the order's assets, leaving nothing for the rest.

"These people have taken a vow of poverty," he said. "That means the order is bound to look after them in their old age and until death. So they will need a little bit of money for that. Beyond that, they are saying, 'Here it is.' "

As an entity, Mr. Teffaine said, the Roman Catholic Church in Canada is protected from bankruptcy because it has no national organization. Rather, it is made up of separate legal entities such as the Manitoba Oblates. "There is nothing sue-able called the Catholic Church, despite attempts to try and pierce the corporate veil," Mr. Teffaine said. "It could be that more than one Oblate province will go bankrupt as a result of this."

The Anglican Church, on the other hand, is governed in Canada by a general synod and is facing bankruptcy.

Lawyer William Percy, who is acting for about 60 former residential students in Manitoba, has said he favours the settlement method being proposed by the Oblates.