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Tom Flanagan is Professor Emeritus of Political Science at the University of Calgary and a Senior Fellow of the Fraser Institute. He is the author of a new study on the cost of reconciliation.

During the 2015 federal election campaign, Liberal Leader Justin Trudeau proposed a “Reconciliation Framework” for dealing with Indigenous issues. After becoming prime minister, he re-emphasized that “no relationship is more important to our government and to Canada than the one with Indigenous peoples.” Noble sentiments, to be sure, but taxpayers are entitled to know more. How much will it cost, and will it achieve an essential objective – raising the standard of living of First Nations?

The government has divided the former department of Indigenous and Northern Affairs Canada into two new departments: Crown-Indigenous Relations, and Northern Affairs Canada and Indigenous Services Canada. This bureaucratic reorganization accompanied by the transfer and renaming of programs makes it difficult for the public to get a clear idea of the growth in budgetary spending. However, Assembly of First Nations National Chief Perry Bellegarde estimates that the increase is in the range of 20 per cent, $16.5-billion over seven years, starting with fiscal 2016-17, the first Liberal budget.

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Many other large expenditures will have to be added to these budgetary estimates. To mention three big-ticket items: Bill S-3, which relaxes criteria for getting on the Indian Register, will cost $71-million in one-time administrative costs, and $407-million per year according to a study by the Parliamentary Budget Office. The government has started to negotiate Métis land claims, which could easily lead to an outlay of $1-billion or more, based on the value of land and scrip distributed in the 19th century. And the government, together with the Assembly of First Nations, is revisiting the specific-claims process. The previous Conservative government set aside $250-million a year for 10 years for new specific-claims settlements, and it is hard to believe the Liberals will do less.

Then there are the compensatory payments to individuals for historic injustices. The total for residential schools payments initiated by the previous government will come close to $6-billion when all claims are settled and administrative costs are counted. A new class-action claim is also under way for cultural loss by the survivors of Indian day schools. It is too early to predict what the cost may be, but it is likely that the government will not offer much resistance to the claim. The payout for cultural loss in the “Sixties Scoop” class action (adoption of Indigenous children by non-Indigenous parents), which this government has accepted, will be $750-million plus administrative costs. There is also a class-action suit for survivors of Indian hospitals set up in the 1940s and 1950s, mainly to combat the tuberculosis plague that was killing so many Indigenous people at the time. The complainants’ lawyers are asking for $1.1-billion, and the government has offered to negotiate a settlement. Future class actions over grievances as yet unidentified are also bound to arise given the success of past litigation.

Canadians would not begrudge these mounting expenses if they actually achieved the objective of bringing the living standards of Indigenous people up to those of other Canadians, but that is unlikely to happen. Extensive research on both sides of the 49th parallel shows that the Native American tribes and Canadian First Nations who achieve a higher standard of living do so by getting involved in the marketplace and generating income for themselves – “own-source revenue” in the vocabulary of Indigenous affairs.

Unfortunately, “own-source revenue” plays little role in the government’s Reconciliation Framework; the term does not even appear in federal budget documents. Yet genuine long-term prosperity for Indigenous people will have to come from own-source revenue as part of their self-determination.

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