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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, 1940HANDOUT/Reuters

The Canadian government abandoned an appeal of a controversial court ruling that let the Catholic Church out of its responsibility to raise millions of dollars for aboriginal healing programs, court documents show.

The appeal was dropped just six days after the Trudeau government took office.

The revelation comes in a week when the Liberal government has repeatedly said that it had no options for appeal. It did not mention, however, that an appeal had been commenced and then withdrawn.

The abandonment of the appeal means that a major element of Canada's historic 2007 settlement – the contribution of the Catholic churches, which ran most of the residential schools, to the aboriginal community – was brought to an end by a lone Saskatchewan judge, in an informal hearing called a Request for Directions.

The ruling by Saskatchewan Court of Queen's Bench Justice Neil Gabrielson on July 16 found that the former federal Conservative government had inadvertently released 50 Catholic entities from their contractual responsibility to try to raise up to $25-million for aboriginal healing pro- grams. He ruled that there was a "meeting of the minds" between a federal lawyer, Alexander Gay, and a lawyer for the Catholic entities, Gordon Kuski, on a re-lease from all obligations. He also found that Mr. Gay should be presumed in this dispute to have had the authority to negotiate on be-half of the Canadian government.

Under the former Conservative government, the Justice Department served notice in August that it intended to appeal the ruling. A Liberal government was elected on Oct. 19 and took office on Nov. 4, as the cabinet – including Justice Minister Jody Wilson-Raybould – was sworn in. On Nov. 10, the federal Justice Department formally abandoned the appeal, without giving reasons, in a letter signed by Wayne Schafer, senior counsel for the Attorney-General.

The Liberal government says its Conservative predecessors were the ones who released the church from its obligations under the settlement agreement to try to raise $25-million for healing and reconciliation.

After Justice Gabrielson's decision in July, "officials from the Department of Aboriginal Affairs and Northern Development received a mandate from the former Conservative government to negotiate a settlement with the Catholic entities," a government spokeswoman said in an e-mail on Wednesday evening. "Negotiations began in August 2015 and an agreement of release was signed October 30, 2015. As a result of these negotiations, it was agreed the Protective Notice of Appeal would be withdrawn." In other words, abandoning the appeal was a mere formality.

The Liberal government did not provide The Globe and Mail with a copy of that negotiated agreement of release. Without a copy of that settlement, it is impossible to know if the Liberals were legally able to continue with the appeal, according to Toronto lawyer Kirk Baert, who represented residential school survivors at settlement talks.

"This is an important aspect of the original settlement," he said. "I don't get the logic of withdrawing [the appeal]. They're already at zero in terms of what the Catholics have to do. If you win, you may restore these benefits."

The Conservatives' justice critic, Rob Nicholson, could not be reached for comment.

The Liberals have made a rapprochement with indigenous peoples a centrepiece of their government. "No relationship is more important to me and to Canada than the one with Indigenous Peoples," Prime Minister Justin Trudeau says in the mandate letters given to each of his cabinet ministers.

The 2007 settlement created three obligations for the 50 Catholic entities: pay $29-million in cash to the Aboriginal Healing Foundation; give $25-million in services to aboriginal communities; and use "best efforts" to raise $25-million for additional healing programs. The fundraising fell well short – bringing in just $3.7-million. Justice Gabrielson ruled that, for a payment of $1.2-million, the Catholic entities were to be released from their responsibilities to raise the remainder of the $25-million, and be seen to have completed the other two categories of contributions. (There had been a dispute over deductions from the $29-million that the Catholic entities had been claiming for administrative costs.)

In such a hearing, the judge makes no credibility assessments of witnesses for either side, unlike in a full-blown trial. Appeal courts therefore may find it easier than a trial ruling to overturn. (Appeal courts usually defer to trial judges' credibility assessments.)

Among its grounds for appealing the decision, the federal government said the judge had made an error in law by saying that Mr. Gay had the authority to bind the government to a settlement, and had made "palpable and overriding errors" in assessing the facts relating to the negotiations, public documents on file at the Saskatchewan Court of Appeal show.

Indigenous Affairs Minister Carolyn Bennett said this week that the government would pressure the church into resuming its fundraising efforts and rejected suggestions that the government should make up the shortfall.

University of Alberta law professor Eric Adams, who had no involvement in the case, read the ruling at The Globe's request. He said he was surprised Canada didn't appeal it, because Mr. Gay had indicated throughout his discussions with Mr. Kuski that there were details to be worked out and approvals to be sought before the deal was finalized.

"Part of the calculus in deciding whether to appeal something is the stakes – and the stakes were huge," Prof. Adams added.

Ken Young, a Winnipeg lawyer who spent 10 years in a residential school, has read the ruling of Judge Gabrielson and said he believes the government should have appealed.

Mr. Young said, from his reading of what happened, it does not appear that there was any agreement made by Mr. Gay, on behalf of the government, to allow the Catholic entities to walk away from their fundraising obligations, as found by Judge Gabrielson. "They hung the government lawyer out to dry. I don't know how he is feeling about that."

As for the Catholics making their "best efforts" to raise $25-million for healing and reconciliation, said Mr. Young, the "best efforts" would have meant the Catholic church stepping in and contributing the difference between the $25-million goal and the $3.7-million. "The Catholic Church is a big enough institution to cover what their people and their parishioners couldn't cover."

Grouard-McLennan Archbishop Gérard Pettipas, who chairs the board of the Corporation of Catholic Entities, referred questions Wednesday about whether the church would be willing to do that to Pierre Baribeau, the entities' lawyer.

When asked Tuesday if the fundraising might resume, Mr. Baribeau suggested it would not happen because the various organizations of the church had already been solicited for funds and many were already near bankruptcy.

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