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Students board a bus last month at Pikangikum First Nation.Handout

In a native community in northwestern Ontario known mostly for its high suicide rate, 15 children were told in September that there was no space for them in the local kindergarten.

It's a situation that few Canadian parents would accept. But it is especially tough on the children of Pikangikum who arrive at their Eenchokay Birchstick School speaking only Ojibway and must learn in English, starting in the first grade.

Missing kindergarten deprives Pikangikum children of their "introduction to everything," said Kyle Peters, the community's director of education. "When they hit Grade 1, they are already expected to meet the ministry expectations [in English] and it's hard to do that when they haven't had any preparation."

So school administrators scrambled, creating multiple split classes and taking back some rooms that had been used by a college. A month and a half after classes started, the 15 marked their first day of school.

They were lucky. In previous years, a similar solution could not be found and some children were never allowed through the classroom door.

The problems facing students in Pikangikum start early and do not let up. Many days are missed when the generator breaks down or the water is turned off, sending the children back to homes where poverty and overcrowding are the norm. But Pikangikum is just one of hundreds of native communities coping with the substandard delivery of education.

The First Nations and the federal government are battling over the best way to turn around the dismal outcomes for students on reserves across Canada where, on average, 35.5 per cent of people have graduated from high school.

Back in October, Aboriginal Affairs Minister Bernard Valcourt posted a proposed draft of a First Nation Education Act on his department's website and asked for feedback.

It hasn't been good. Chiefs who attended a meeting in Gatineau this week stood to give the proposed bill their unanimous condemnation.

The legislation describes how reserve schools will be operated and calls for an outside inspector to ensure that standards are met. But, on funding, it promises only that the issue will be addressed in future regulations.

The First Nations, who have seen the increases on the core funding they receive from Ottawa capped at 2 per cent since 1996 – and who argue that the caps mean their students get less and less per capita every year from Ottawa than other Canadian students get from their provincial governments – say funding commitments must be made before they will agree to any new legislation.

Mr. Valcourt said in an open letter to the Assembly of First Nations (AFN) on Friday: "If we are to put in place a legislative framework that provides First Nations control of education, minimum standards and which also takes into account the need for language and culture programming, of course, new funding will be needed to support this system." He has also said that the funding will come after the legislation becomes law.

But economist Don Drummond says the First Nations would be "silly" to endorse the bill if the funding component does not come until later. To do so, he said, "would be to sign to the dotted line with someone who tricked you 17 years ago" into believing the funding cap was a temporary measure.

Gord Peters, the grand chief of the Association of Iroquois and Allied Indians who sits on the AFN's education committee, said the legislation should be ripped up and the government should start again – this time at the negotiating table.

"What we have proposed to them is that we sit down and they talk to us about how we want to move forward," Chief Peters said. And "the fundamental issue is financing."

The proposed bill does "absolutely nothing" for children like those in Pikangikum, Mr. Peters said.

Not only is there no guaranteed increase in the core funding for education, "there's no capital to build new facilities, there's no capital to renovate existing facilities." The government invested an extra $275-million over three years, starting in 2012, to improve school infrastructure on reserves. "But, if you divide that by 633 communities," said Mr. Peters, "it's not a lot of money."

Back in Pikangikum, where more than one-third of the residents are under the age of nine, the problems at the school are unlikely to ease until at least 2016 when a new school, funded by the federal government, is expected to open. The money was promised last year but construction has yet to begin.

In the meantime, said AFN National Chief Shawn Atleo, "there are children with hope in their eyes, asking only for a fair chance to go to school."