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Shawn Atleo stepped down as national chief of the Assemby of First Nations in Ottawa on Friday, May 2, 2014.

Adrian Wyld/THE CANADIAN PRESS

AFN Chief Shawn Atleo's resignation has unravelled the Conservatives' plans for First Nations education. It's a sign that relations between Ottawa and First Nations, including on resource projects and pipelines, are likely to become even more strained.

Only three months ago, Prime Minister Stephen Harper went to the Blood Tribe reserve in Alberta to announce a "historic agreement" for new legislation on First Nations education, backed with more money.

Last week, Mr. Atleo, the National Chief of the Assembly of First Nations, was essentially pushed out of office for endorsing the bill – in effect, he was accused of being too willing to bend to Ottawa's wishes.

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On Monday, Aboriginal Affairs Minister Bernard Valcourt said the government is putting the bill on hold until the AFN decides whether they are for it or against it. And a lot of chiefs think it's pretty clear which ways it's going: the AFN is going to turn against it.

It may well mark the end of the days when a prime minister thinks they can cut a deal with one national chief.

During last year's Idle No More protests, some chiefs had accused Mr. Atleo of being too willing to play ball with Mr. Harper. His endorsement for the education bill was used by Mr. Atleo's critics to condemn both him and the bill. He was accused of overstepping his role, instead of involving chiefs across the country.

The issue appears to have bloodied the AFN as an institution, with bands demanding direct role in talks with the government. Some think last year's Idle No More protests sparked a demand for broader participation, and less willingness to accept Ottawa's position.

"It started something said Grand Chief Gordon Peters of the Association of Iroquois and Allied Indians "People will become more adamant that their voices be heard."

It seems unlikely, if this First Nations Bill dies, that the Conservatives will be willing to start from scratch in a multi-party negotiation with chiefs across country.

And for Mr. Harper, whose government has ambitions for energy projects and pipelines, it's more than a setback on First Nations education. It suggests a weakening of the "one-stop shop" interlocutor of the AFN, and a hardening of First Nations attitudes to dealing with Ottawa.

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Pretty much everybody on all sides agrees that First Nations education suffers from deep problems. Graduation rates and marks tend to lag behind those in provincial school systems across the country. The schools are chronically underfunded.

The Conservatives have taken several runs at reforms, but have been pushed back several times by objections from First Nations.

In February, Mr. Harper put forward a new bill, requiring certified teachers, a core curriculum that meets provincial standards, and allowing the creation of education authorities, like school boards. And with it, Mr. Harper promised a substantial amount of new money, $1.9-billion, for underfunded schools.

But it also created some powers many chiefs called paternalistic, like the creation of a Joint Council, appointed by the federal minister, to oversee the implementation. It can recommend that poorly-performing schools be taken over.

A fundamental problem, according to Grand Chief Gordon Peters of the Association of Iroquois and Allied Indians, was the way it was done: the PM announced he'd made a deal with the national chief. If Mr. Atleo wanted to negotiate something, he had to take a bigger group of chiefs and First Nations representatives into the talks.

The Conservatives' bill won some "expert: endorsements, but it failed to sell on the ground, among First Nations. In fact, it became lightning rod. It has undone the national chief and weakened the AFN. It suggests deal-making takes many more, diverse players. There's been an undertone that dealing with Mr. Harper means giving in. And that will have implication beyond this bill.

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