Advocates denounce plan to cut federal Indigenous services budget

Cutting billions of dollars from the Indigenous Services Canada (ISC) budget could worsen the quality of essential programs and may spark lawsuits that would cost Ottawa more money in the long term, some Indigenous advocates say.

The warning comes in response to an internal government email sent last week confirming Prime Minister Mark Carney's Liberal government has asked ISC, like other departments, to cut planned spending by up to 15 per cent over three years.

That's cause for alarm, according to children's advocate Cindy Blackstock, particularly because Carney has said areas like provincial health-care transfers or individual benefits like pensions will be protected but never offered that guarantee for services to Indigenous peoples.

"It really has a smack of almost racist fiscal policy if you're willing to preserve transfers to non-Indigenous governments, but put the ones for First Nations subject to cuts," said Blackstock, executive director of the First Nations Child and Family Caring Society.

"First Nations are already experiencing significant shortfalls in a lot of budget areas and hardships that aren't experienced by others in the country."

CBC Indigenous contacted Finance Minister François-Philippe Champagne's office for a response to this but a spokesperson referred questions to ISC. In a statement last week, ISC said it "remains committed to reconciliation and effective service for Indigenous Peoples."

As for details, in its internal July 8 email the department said the review "will involve difficult decisions that will impact our programs and activities, as well as our workforce."

Blackstock, who has spent years at the Canadian Human Rights Tribunal to reverse chronic federal program underfunding, said direct line services to First Nations seem to be on the chopping block and could present a prime target in the government-wide review.

ISC is the second biggest-spending federal department, with an estimated budget of $25.2 billion this fiscal year, surpassed only by the Department of National Defence. But ISC's planned budget is already forecast to decrease by about $5 billion through 2027-28.

If Ottawa were to cut another 10 per cent from that year's planned budget of $20.1 billion, it could mean another reduction of $2 billion on top of that.

"Those are very devastating numbers," said Lori Idlout, NDP MP for Nunavut and the party's Indigenous Affairs critic.

She said Indigenous Peoples often face already substandard services compared to other Canadians, as well as long delays, greater need, backlogs and other struggles.

"I think what we'll end up seeing is Indigenous Peoples suing the federal government for not meeting its legal obligations," Idlout said.

"And so if these cuts are pursued, I think that it will end up costing the federal government even more, maybe even tenfold, over the long run."

Carney campaigned on a pledge to rein in public spending, but in Idlout's view his Liberals "very much imitate Conservative values," so much so that she's begun heckling them both in the House of Commons as a "Liberal-Conservative coalition."

"These kinds of cuts, if they do happen, will be detrimental. They remind me of the cuts that Stephen Harper had made," she said.

The Assembly of Manitoba Chiefs (AMC), which advocates for 63 First Nations, said the spending cuts present a "troubling contradiction" and a "disturbing truth."

"Canada extracts wealth from our lands and territories, transfers those resources to the provinces, and First Nations are left out entirely," said AMC Grand Chief Kyra Wilson in a statement on Monday.

"We don't see a share of those dollars, then Canada turns around and cuts our program funding to balance its budgets."

Sahir Khan, co-founder and executive vice-president at the Institute of Fiscal Studies and Democracy at the University of Ottawa, said ISC "will be an important part" of the spending review. He noted Carney's priorities of sovereignty and the economy stand in contrast to the Trudeau government's social policy agenda.

"In this context, ISC's actions and choices in the review will have to ensure the federal government's constitutional obligations and court orders arising from them, for example, from the Canadian Human Rights Tribunal, are upheld," he said in an email.

"However, there will be significant pressure on the department to demonstrate that grants and contributions are driving results. Accountability and structure will matter as much as funding levels and maybe more."

There "will be significant pressure on the departmental operating budget" as well, he added. According to its latest plan, ISC has a planned budget for internal services of more than $350 million this year.

In other words, ISC may be pressed to show its programs are having the desired effect. ISC's official mandate involves transferring service delivery responsibilities to First Nations, yet the department has only grown since its creation.