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How the residential schools deal got done

By David Wilson

Early last autumn, on swearing-in day for Governor General Michaelle Jean, Rev. David MacDonald bumped into Deputy Prime Minister Anne McLellan on Parliament Hill.

"She asked me how I was doing," recalls MacDonald, the United Church's Ottawa point-man for residential school issues. "And I told her not very well."

MacDonald says he complained to McLellan about the fact that the government and Roman Catholic organizations weren't speaking amid multi-party efforts to strike a deal to compensate approximately 80,000 Natives who were forced to attend residential schools owned by the federal government and run by the churches. Catholic organizations ran the vast majority of them and have been named in more than two-thirds of the 12,500 lawsuits launched by former students who say they were abused.

MacDonald says he asked, "`How can we have a national deal without the Catholics?'"

McLellan, he says, promised to speak to senior government officials.

Eight weeks later, the government caught nearly everyone off guard when it announced that former Supreme Court justice Hon. Frank Iacobucci and Assembly of First Nations (AFN) Grand Chief Phil Fontaine had brokered the biggest compensation agreement ever in Canada. The multi-billion-dollar agreement in principle would compensate all surviving students of residential schools and improve out-of-court settlement procedures for former students pursuing physical and sexual abuse claims. It will also fund healing projects nationwide and begin a truth and reconciliation process so Canadians can come to grips with what Justice Minister Irwin Cotler calls "the most disgraceful, harmful and racist act in our history."

Getting there required a combination of hard bargaining on an unheard-of scale for Canadian churches, shifting political winds, goodwill -- and chance. Rod Donlevy, the Saskatoon lawyer who negotiated for the Catholics, believes MacDonald's encounter with the deputy prime minister may have been the turning point. "David's push," he says, "was a tremendous help."

* * *

The negotiations led by Iacobucci were in need of a push last fall. Comprehensive settlement talks under way between the government, the AFN, plaintiffs' lawyers and churches had been making headway throughout the summer, but progress on the central issue of financial compensation -- and how much the churches should contribute to the pot -- was handicapped by the absence of the Catholics from negotiations.

The Canadian Conference of Catholic Bishops had steadfastly resisted talking about a comprehensive settlement with Ottawa, insisting it was Catholic organizations, not the denomination, that ran residential schools. In May 2004, 41 Catholic religious orders and dioceses began separate talks with the government. But negotiations broke down last spring. By then, the Catholic groups had put $54 million on the table -- $29 million in cash and $25 million in non-cash, "in-kind" commitments such as program costs -- for healing and reconciliation efforts. None of it was directed at the $126 million the government estimated was the Catholics' share of liability for abuse claims.

Throughout the summer, the Catholics appeared periodically at the multi-party talks led by Iacobucci. But by late August their place at the negotiating table was empty. Donlevy says his clients wanted to negotiate around their existing proposal, while Iacobucci insisted his mandate was only to discuss it as part of the overall process.

The Catholics' absence was a worry for everyone. Looming behind a political accord between Ottawa and the AFN last spring were several class action lawsuits, including one from the AFN, launched on behalf of all former residential school students and their families, seeking compensation for alleged wrongs that went far beyond physical and sexual abuse to include systemic harms such as loss of, culture, language, family and community. One class action in Ontario had already been certified and another was waiting in the wings; certification would depend on the progress of talks toward the comprehensive settlement envisioned by the political accord.

If the class actions went ahead, they would be hideously expensive and take years to resolve; residential school survivors are said to be dying at a rate of three or four a day.

Although Iacobucci's deadline was this coming March, the political clock was ticking too. The minority Liberals were faltering, and no one could be sure the settlement process would survive a change in government. Both the AFN and the Liberals would be stronger going into November's first minister's conference on Aboriginal affairs with a deal in hand.

The Catholics' place at the negotiating table was still vacant, and Donlevy says government officials weren't returning his phone calls, when David MacDonald and Anne McLellan crossed paths on Parliament Hill. Shortly afterwards, says Donlevy, the deputy minister in charge of the government's residential schools resolution effort gave him a call. Donlevy believes MacDonald had convinced McLellan the Catholic package "wasn't a fly-by-night proposal."

In October, the Catholic organizations made a little noise themselves, publicly demanding a response from the government. By early November, government officials and Catholic negotiators had broken their silence. By the middle of the month they were negotiating in earnest under Iacobucci's guidance, with the Catholics committing to raise another $20 million to add to the $54 million in their previous proposal.

The final countdown to the agreement began when Iacobucci summoned representatives from the churches to a meeting in Toronto on Thursday, Nov. 17. The United Church's representatives arrived to find their Catholic counterparts in the meeting room. "We were not aware that conversations had resumed with the Catholics," says Rev. Jamie Scott, the United Church's senior adviser for residential schools.

Ellie Johnson, the Anglican Church of Canada's acting general secretary during the talks last fall, was attending a meeting of the Anglican governing council that began the same day. "I sent an e-mail to Mr. Iacobucci that night," she says, "and told him that Anglicans across the country were being asked to pray for a good outcome."

By the next day, it appeared as if those prayers had been heard. "It was clear as of Friday night that they were trying for an agreement," says Scott.

For all the stops and starts and detours along the way, the home stretch appears to have been surprisingly smooth. "I don't think I've ever seen as much goodwill as I saw on the part of Frank Iacobucci and Phil Fontaine," says Catholic lawyer Rod Donlevy.

Donlevy says that when the deal was finally clinched in the early hours of Monday, Nov. 21, "it was a truly profound moment. There were 50 people in that room and all of them were very emotional."

He adds: "If ever there was a spirit in a room, that was it."

"It was definitely not another day at the office," says Alex Pettingill, the Toronto lawyer who represented the United Church.

* * *

In the end, the Catholics agreed in principle to contribute $79 million, or about 60 percent of what the government said they owed, to the comprehensive settlement.

But the bargaining isn't entirely over. In 2003, Ottawa signed a deal with the Anglican Church of Canada to cap the Anglicans' liability for lawsuits at $25 million; the cap matched the government's estimate of what the church would owe for its share of settling some 2,000 claims. The deal contained a provision that allows the church to re-open the agreement if the government reached more favourable terms with another denomination. Ottawa had clearly done so with the Catholics. Using 60 percent as a benchmark, the Anglican obligation under the new deal drops to about $15 million.

Ellie Johnson says the church has already raised $16 million under the terms of the first agreement. But the Anglicans' final obligation won't be known until "in-kind" payments are defined and factored into the formula. During the talks, in-kind contributions were loosely understood to include healing- and reconciliation-related costs to churches, ranging from photocopying to staff time to the cost of holding healing events and running healing programs. In-kind contributions amount to almost one-quarter of the obligation agreed to by the Catholics. The same proportion will apply to the Anglicans, as well as the other churches.

The Presbyterian Church in Canada also signed a liability-cap deal in 2003, limiting their liability to $2.1 million. That agreement will also be re-negotiated under the new benchmarks.

The United Church went into the talks with no liability cap. By last fall it had paid out more than $6 million in judgments and settlements. The Iacobucci deal commits it to a contribution of $6.42 million -- 60 percent of its estimated $10.9-million liability -- of which $2.17 million is earmarked as in-kind payments. The deal gives the church the option of paying all the in-kind portion in cash. Scott says the church may have, in effect, already done so by paying more in cash settlements and judgments to date than its cash obligations under the deal.

Scott says the church "will not look to the government for reimbursement for overpayment." And it retains the right to make contributions over and above the agreed-to amounts -- to healing initiatives, for example, outside the agreement. While the agreement may technically limit the church's financial obligations, "the United Church considers it has a moral obligation to the original [$10.9- million] estimate," says Scott.

The agreement-in-principle provides "common experience payments" of $10,000 to every person who attended a residential school; they will also receive $3,000 for every year they were there. Former students over 65 can apply for an immediate $8,000 advance. Former students are free to pursue physical or sexual abuse claims under a revised dispute resolution process and still receive common experience compensation. But anyone who accepts a payment releases the government from liability for the kind of systemic wrongs alleged in the class action lawsuits. The lawyers' consortiums that would have pushed the class actions through the courts will be paid up to $40 million each.

* * *

Courts in seven provinces have to approve the deal before it can come into effect. The five-year, $60-million truth and reconciliation process -- into which the United Church has had major input since former AFN grand chief Georges Erasmus appealed to the 2003 General Council -- still needs refining. So does the method for making payments to former students. And the outcome of the federal election could change everything. The ink was barely dry on the agreement when the Liberal minority government fell. "Not many hard discussions take place during an election campaign," observes MacDonald.

* * *

Officially, the United Church views the Iacobucci agreement as another step in a long road toward right relations with Canada's First Nations. "Much healing work needs to be done," says Scott. But the church can take some satisfaction in knowing that the stakeholder that mattered most in the negotiations -- the AFN, representing tens of thousands of aging, wounded survivors -- saw the agreement as a step in the right direction.

"This certainly is fair and just," said Phil Fontaine, himself a survivor of residential school abuse. "We believe this will finally close the chapter on this tragic part of our history."

Author's photo
David Wilson is the editor-publisher of The Observer.
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