Court reviews details of $530-M CFS settlement

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This article was published 05/09/2024 (409 days ago), so information in it may no longer be current.

An “extraordinary” $530-million settlement compensating every child affected by the province clawing back federal funds for kids in care — more than 80 per cent of whom are Indigenous — could see them getting paid by the end of the year.

The Court of King’s Bench began hearing details Thursday of a comprehensive class-action settlement agreement.

“This week’s hearings are a pivotal step towards justice and long-awaited compensation to the First Nations children who were wrongfully denied support,” Assembly of Manitoba Chiefs Grand Chief Cathy Merrick said in a news release.

The deal aims to recoup the federal children’s special allowance that was diverted from children in care to the province from 2005 to 2019, totalling an estimated $335 million.

The NDP government had child-welfare agencies remit the federal benefit to the province in 2005, saying it was in compliance with the law because it was providing services to children in care.

The Progressive Conservative government put an end to the practice in 2019. One year later, it passed legislation to prevent children in care from suing the province to get the money back. The province was taken to court over it.

Justice James Edmond ruled in 2022 that the province violated the Charter of Rights and Freedoms by denying a benefit to the claimant group — among “the most vulnerable members of our society” — that is not denied to others.

The 260-page proposed settlement includes interest, damages from discrimination, and legal and administrative costs.

“We’re righting a historic wrong here,” Premier Wab Kinew said at an unrelated news conference Thursday.

Kinew said it’s the collective responsibility of Manitoba to help ensure kids from the child-welfare system can get on a good path.

“With the settlement moving ahead, I hope that folks can get access to resources that are deserved,” he said.

The settlement requires an apology by the minister of families, currently Nahanni Fontaine, in a public sitting of the Manitoba Legislative Assembly.

“Every single person who qualifies for this settlement, I hope that you can access financial resources, and I hope that you can use that in a way that improves your life,” Kinew said.

“Maybe it’s to go to school, put a down payment on a home or to just help you keep your head above water during this time of inflation and interest rates.”

The settlement has been endorsed by the AMC, the Southern Chiefs’ Organization, Manitoba Keewatinowi Okimakanak and the Manitoba Métis Federation. The parties to the class action are seeking its approval by Justice Alain Huberdeau.

“The judge has one job — that is to either agree the settlement is reasonable and fair and in the best interest of class members, or say it isn’t and reject it,” lawyer Kris Saxberg of Cochrane Saxberg LLP said. He expects the deal will be approved.

“This agreement is pretty special, and it is unopposed — not a single person objected to it or opted out,” Saxberg said in an interview in advance of the court hearing.

He called the agreement, which includes detailed information about how and when eligible class members can expect payment from the settlement fund, “extraordinary.”

Those eligible for a settlement should be able to start filling out claim forms in early December, with payments flowing soon after to those who are now adults, Saxberg said. Before that happens, the legal process requires a 30-day appeal period, if the judge accepts the agreement. The court also has to approve a settlement administrator receiving information from the child-welfare agencies about the claimants that is confidential, Saxberg said.

The children who lost their $541-per-month federal allowance might receive anywhere from $150 for those who were in care less than a month to around $80,000, he said.

“There’s a huge chunk of children who are in care of the agencies, and that money will go in trust and be invested till those children reach the age of majority. Then, they will be able to access their money,” Saxberg said. “The money belongs to the children, not the agency.”

Adults can initially receive 85 per cent of the lump sum to which they’re entitled.

“Then, once it’s determined how many people came forward and what amount of money is left over, a second payment will be made that will, on a pro rata basis, split up any money that is left over because some claimants didn’t make a claim or couldn’t be located,” Saxberg said.

“The second top-up is to make sure we can distribute all the settlement money.”

Several options and resources regarding how they receive their payments are available to claimants, the lawyer said.

If an agency is aware of an eligible claimant “particularly vulnerable to exploitation,” they can go to court to ask that the money go into a trust, Saxberg said.

“Every situation has to be dealt with on its own,” he said.

— with files from Maggie Macintosh

carol.sanders@freepress.mb.ca