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Assembly of First Nations Youth Council member Clayton Tootoosis takes part in a rally on Parliament Hill in Ottawa on Dec. 10, 2013.SEAN KILPATRICK/The Canadian Press

As native leaders press the federal government to put as much money, per capita, into First Nations education as the provinces pay to educate other children, one of Canada's top economists says even equal funding would sell native pupils short.

Don Drummond, the former chief economist at Toronto-Dominion Bank who is now a scholar at Queen's University in Kingston, will tell chiefs on Wednesday that reserve schools likely need 20 per cent more money than they are currently getting from Ottawa to deliver the quality of education that is provided to the rest of Canadian children.

The federal Aboriginal Affairs department says it currently spends $1.55-billion annually on First Nations education. And, as the government tries to persuade native leaders to endorse a proposed act that would reform the delivery of native education, Aboriginal Affairs Minister Bernard Valcourt says there will be more funding for K-12 education after the act is passed.

The chiefs, on the other hand, insist that assurances of increased long-term funding must be provided before any education legislation will get their approval. For years they have argued that a cap on core funding for First Nations education, which restricts federal increases to 2 per cent annually, has left their schools falling further and further behind the rest of Canada.

But Mr. Drummond said in an interview Tuesday, he plans to tell native leaders: "Be careful what you ask for. Because you're asking for comparability on the input [money] which won't necessarily give you comparability on the outcome or the objective [educational success]. And that's what we should be focusing on."

There is widespread agreement that the current system is failing. In 2011, the high school graduation rate for people living on reserves was just 35.5, compared to 78 per cent for the population as a whole.

"You would think, without doing very much mathematical computation at all, that (First Nations schools) would require higher than provincial funding because you have much more challenging circumstances on most reserves," he said.

The Assembly of First Nations has said the federal government spends a little over $7,000 per First Nations student – far short of the more than $10,000 that the average province spends per capita to educate children in their schools.

The federal government disputes those figures and says it pays more than $14,000 for every First Nations child in school, which is well above the national average. Mr. Drummond, who was once a senior official in the federal Finance Department, was perplexed by the discrepancy and spent three months trying to figure out where the truth lies. In a paper he will release Wednesday at a chiefs' assembly in Gatineau that was obtained by The Globe, he admits it was an impossible task. There are at least a dozen reasons why the numbers are so dramatically different, said Mr. Drummond, but two stand out.

First, while the core money for schools has been capped, the government has been chipping in various amounts of transitional funding for specific projects, some of it long term, most of it not. The Department of Aboriginal Affairs counts all of those expenditures and its own administrative costs into its total, while native groups do not.

"Neither one seems to be correct," said Mr. Drummond. First Nations are probably right to think of the core funding when they assess how much it will cost them to run their schools in the long term, he said, but some of the transitional funding probably should also be counted.

And second, all of the provinces provide differing levels of per capita funding and each of the more than 600 First Nations obtains different amounts from the federal government, depending on the levels of transitional funding they receive. Which makes it impossible to do meaningful comparisons, he said.

But assessing First Nations schools against provincially funded schools is not comparing apples with apples, said Mr. Drummond, because even rural non-native communities with low average incomes that qualify for extra provincial need-based funding tend to have far better social and economic conditions than the reserves.

Mr. Drummond also said he thinks it would be a "silly idea" for First Nations to do as Mr. Valcourt has urged and sign off on the education act before the funding issue has been settled. That would be signing on the dotted line "with somebody who tricked you 17 years ago," he said.

First Nations were told in 1996 that the cap was a temporary measure to help eliminate a deficit, said Mr. Drummond. "And it's about 17 years that we've had this 2 per cent cap going on in an area that we have had about 4 per cent growth in the student population."

Shawn Atleo, the National Chief of the AFN, is in South Africa to attend a memorial for Nelson Mandela, but he left a video message that was played at the chiefs' meeting in which he said there is no way the federal government can mistake what the First Nations are demanding on education.

Mr. Atleo said he was in Pikangikum in Northwestern Ontario recently and learned that there are 50 children in that community who cannot be accommodated in the kindergarten.

"These are little boys and girls who are looking forward to their very first day of school," he said in a video to the chiefs, "but it's taken away from them because they don't get the same support as other schoolchildren in Canada."

Gord Peters, the Grand Chief of the Association of Iroquois and Allied Indians, who sits on the AFN's education council, said there has been a complete rejection of the legislation being proposed by the government. "It's not an investment in our children," said Mr. Peters. "Start over."