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A group of female students and a nun are seen at Cross Lake Indian Residential School in Cross Lake, Man., in February, 1940Supplied/Reuters

The failure of the Catholic Church's fundraising efforts for aboriginal healing and reconciliation means that other churches involved in the notorious residential schools have been let off the hook for more than $3-million in contributions.

The Catholic fundraising program collected just $3.7-million toward its $25-million goal. This reduced the totals required from the Anglican, United and Presbyterian churches, because each had signed a deal with the federal government that linked their contributions to aboriginal healing to those of the Catholics.

Catholic organizations ran most of the residential schools, and had the largest financial obligations of any church under Canada's 2007 settlement that ended thousands of individual and class-action lawsuits. The federal government spent an estimated $5-billion directly compensating 79,000 survivors.

The Anglican Church was allowed to keep $2.7-million it had raised for healing, and return it to local church communities. A church spokesman said many of those communities set up healing programs with their share of the money. The United Church was allowed to reduce its maximum obligation by $450,000, a church spokesman said. The Presbyterian Church had already put its maximum obligation of $1.3-million toward healing programs and therefore was contractually not in a position to receive anything back. The church says it effectively waived its right to get money back by spending it up front.

About 50 Catholic entities were obliged to use their "best efforts" to raise $25-million for healing and reconciliation. The $25-million was in addition to $29-million in cash for the Aboriginal Healing Foundation and $25-million in services to aboriginal communities.

In an e-mail exchange with The Globe, the government declined to provide a direct answer on what it did to ensure the Catholic groups lived up to their best-efforts promise. "The supervising Courts remain the authority for determining whether the terms of the Indian Residential Schools Settlement Agreement have been met," said spokeswoman Valérie Haché of the Indigenous and Northern Affairs department.

The government says its agreement releasing the Catholics from their financial contributions is confidential, even though a researcher for The Globe and Mail found a draft of it in a public court file at the Saskatchewan Court of Queen's Bench in Regina.

Jonathan Rudin, program director of Aboriginal Legal Services, an Ontario-wide program based in Toronto, said the reduced obligations for the other churches make the government's failure to hold the Catholics to their fundraising obligations "even more egregious. The government should have known this because they negotiated this deal."

Mr. Rudin, who was not involved in the 2007 settlement, was critical of the Catholic Church, and the churches whose obligations were reduced. "If someone says, 'Oh, it's too hard, no one wants to give us money for this,' and that ends it, that doesn't speak much to people's commitment to reconciliation," he said of the Catholic groups. "The same thing goes for the other churches. To rely on what is essentially a loophole and say, 'We're now free from obligations,' again doesn't speak to their real commitment to reconciliation. It's very sad to see this from the churches – particularly the Catholic Church, but the other churches as well."

He added that the Presbyterians deserve credit for saying: "'It doesn't matter that we can legally avoid this responsibility. We know morally we shouldn't.'"

The deal signed by the Anglican Church with the federal government set out that the Anglicans would contribute 19.8572 per cent of the Catholic amount, divided among cash, in-kind services and fundraising. The portion contingent on Catholic fundraising was set at a maximum of $4.964-million, and placed in a holding fund until the Catholic fundraising effort had determined the final amount owed by the Anglican Church. The Catholic shortfall meant the Anglicans were permitted to keep $2.7-million of the $4.964-million.

"They didn't perform above that threshold, so we received permission from the government of Canada to return that money to our entities," Ven. Michael Thompson, the general secretary of the Anglican Church, told The Globe. "And we did that late in 2015."

Many of the dioceses are applying the money that has been returned to their own indigenous projects, Archdeacon Thompson said. The Diocese of Toronto, for instance, received that largest amount from the returned funds, and it is using the money to start an endowment for indigenous ministry. And the Diocese of Central Newfoundland is conducting research on the early relationship between the church and the Beothuk, indigenous people who died out after the arrival of European settlers.

He said the Anglicans began their fundraising efforts immediately after a proposed agreement was reached and, within 90 days, raised far more money than the deal stipulated. Some of the excess was returned to the dioceses. Much of the money raised was from parishioners, but some came from dioceses that liquidated reserves to meet their commitments.

When the Anglican fundraising drive began, Jim Boyles, a former general secretary of the church, "just kept reminding the church that we were talking about the lives of children," Archdeacon Thompson said. "And when you talk to human beings about the lives of children, something really powerful happens."

Stephen Kendall, the principal clerk of General Assembly of the Presbyterian Church, which ran two of the schools, said his church quickly met its fundraising obligation of $1.3-million under the settlement agreement.

"When we provided our contribution to the agreement, we made that contribution as if the full [Catholic] amount were raised," Mr. Kendall said, "and, at the time, we said that we consider this our contribution to the agreement and we didn't expect any refund. So we waived any possible right of refund early on."

The United Church was required to pay a total of $6.9-million, which included $2.2-million that was contingent upon the Catholics reaching their goal of $25-million in fundraising. Of that $2.2-million, they were entitled to keep $450,000 if the Catholics raised less than $20-million.

Phil Fontaine represented the Assembly of First Nations, a national umbrella group of band chiefs, in the negotiation of the settlement, and then took part in the Catholic fundraising campaign. He said that reconciliation is not at risk because of the funding issue.

"The fact that there is this misunderstanding or unresolved issue doesn't compromise in any way the efforts to bring about reconciliation," he said. "Because reconciliation is not simply a matter of money, though it's an important consideration." The survivors' interests were met through financial compensation for abuse, an apology from former prime minister Stephen Harper, the funding of the Aboriginal Healing Foundation and the creation of the Truth and Reconciliation Commission, he said.

"So anyone who suggests that somehow someone is being shortchanged, there's a real misunderstanding here. Not that I would ever suggest to anyone that the money wouldn't be welcome."

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