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2016 federal budget

Prime Minister Justin Trudeau in Question Period on Monday, March 21, 2016.Adrian Wyld/The Canadian Press

Prime Minister Justin Trudeau is promising Tuesday's budget will deliver "historic investments" to improve the lives of Canada's indigenous people – funding that will amount to billions of dollars, The Globe and Mail has learned.

The money will be directed toward education, housing, child welfare and water quality, especially for First Nations living on reserves, officials say.

"These are things that we are making a priority," Mr. Trudeau told the House of Commons on Monday. "Tomorrow's budget will feature historic investments in First Nations and indigenous Canadians right across the country to begin to make it right, [which] we have not done for so many decades in this place, in this building."

The focus on aboriginal issues will be a key part of a budget aimed at launching a decade of unprecedented spending on infrastructure across the country. Mr. Trudeau is moving ahead with plans to spend billions on new sewers, roads, transit, affordable housing and energy improvements as part of a stimulus package to boost Canada's longer term prospects for economic growth.

"What the Prime Minister said is huge. It will go a long way to close the big gap in our living standards … and it shows our lobbying has paid off," Assembly of First Nations National Chief Perry Bellegarde said in an interview.

Aboriginal leaders and mayors say they have been impressed with the level of consultation in the runup to the budget, raising expectations that long-standing requests will be granted Tuesday.

Senior officials would not provide The Globe with details of the exact amount of money in the budget for First Nations, but they said it will be in the billions of dollars spread over a number of years.

During the election, Mr. Trudeau made sweeping commitments to the country's indigenous people, including a promise to end boil-water advisories on reserves and remove the 2-per-cent cap on annual funding increases for reserve programs and services. The budget will act on these promises, officials say.

A source said the budget is also expected to close the funding gap on child welfare that could amount to an additional $200-million annually. In January, the government opted not to appeal a ruling by the Canadian Human Rights tribunal that found Ottawa had failed to provide First Nations children with the same level of welfare services that exist elsewhere.

The Liberal platform promised to spend an additional $1.7-billion over four years on indigenous issues in addition to previous pledges made under the Conservatives. However, the Liberals recently claimed that $1.25-billion promised by the previous government had been secretly devoted to other issues. It is not clear how this will be addressed in the budget. But some of the money to improve drinking water on reserves is expected to come from promised national funding for green infrastructure.

Expectations are high among First Nations that Mr. Trudeau will mark an end to years of budget-day disappointments. Over the past month, Finance Minister Bill Morneau has held several private meetings with Mr. Bellegarde and top officials from the AFN to discuss the funding needs for on- and off-reserve First Nations. Mr. Bellegarde also met top officials from the Prime Minister's Office and five ministers, including Infrastructure Minister Amarjeet Sohi and Indigenous and Northern Affairs Minister Carolyn Bennett.

"To remove the 2-per-cent cap, to give us clean water and to spend more on education are the kind of investments that will pay off for our people and the country," Mr. Bellegarde said. He pointed to a study by the Centre for Living Standards that projected the economic payoff of educating and employing aboriginal people in the work force would result in an estimated $36.5-billion increase in GDP by 2026 and a $12-billion reduction in government spending on First Nations programs.

The Prime Minister has promised to reset Canada's relationship with its indigenous people. He named former B.C. regional chief Jody Wilson-Raybould as Justice Minister and Hunter Tootoo, an Inuk from Rankin Inlet, as Fisheries Minister.

As for municipal leaders, Toronto Mayor John Tory said he's been impressed with the number of questions and phone calls that have come from Mr. Sohi, the Infrastructure Minister, and other federal officials.

"One of the reasons that we can be optimistic, I think – big cities, and cities generally in Canada – is because they have done such a thorough job of consulting us," he told The Globe and Mail. "They want to get a true sense of what our needs are and what's going to help the most, both in terms of putting people to work in the short term – which they're very concerned about – but also in terms of beginning the process of building up this infrastructure in the cities. It really does lead you to believe they wouldn't have spent all that time consulting had they not been intending to do something quite meaningful."