Millions of dollars that were supposed to go to Canadian residential school survivors as part of a 2005 settlement were reportedly spent by the Catholic Church on lawyers, fundraising, administration costs and unapproved loans.

At least 150,000 indigenous children were forced to attend some 140 residential schools across the country, which were funded by the federal government and run by churches. The children had been forcibly taken from their families in order to strip them of their cultural identity.

Under the Indian Residential Schools Settlement Agreement (IRSSA) between the Canadian federal government, indigenous representatives and the various church bodies that operated the schools, more than Can$3 billion (US$2.4 billion) has been paid to compensate survivors, as of March 2021.

While the other churches have apparently paid their amounts-due in full, the Catholic Church has failed to meet its quota. Besides being required to make a lump cash payment of Can$29 million (US$23.2 million) and provide Can$25 million (US$ 20 million) of “in-kind services,” the church was to give its “best efforts” to raise Can$25 million (US$20 million) for survivors.

The church had claimed to have paid most of the cash amount and fulfilled its “in-kind services” commitment. In 2015, it invoked the “best efforts” clause in court where a judge absolved it of the legal obligation to pay the remaining unpaid sum of $21 million (US$16.8 million) from that fundraising campaign.

In recent weeks, it has emerged that the church was able to raise around $300 million (US$240 million) for construction and renovation projects during the same time period that it claimed it could only raise a total of $3.9 million (US$3.1 million) for residential school survivors.

Now, court documents accessed by CBC news reportedly contradict the church’s claims. A federal government “factum” document that summarized the evidence from the 2015 court case pointed to “a large number of serious accounting discrepancies that are alarming to Canada.”

The church had also not filed its mandatory annual financial statements to the government until 2012 – five years after IRSSA went into effect in 2007, according to the documents seen by the CBC.

From the Can$29-million cash payment, some $2.7 million (US$2.1 million) was reportedly paid to lawyers and an additional $2.3 million (US$1.84 million) was spent on administration expenses – something no other church group claimed.

As well, Can$1.6 million (US$1.28 million) was claimed as donations made to projects related to indigenous issues. These projects were not covered in the approval process and no explanation or invoices have reportedly been provided to back these claims.

The church’s accountant testified that it had provided the Can$25 million of “in-kind services” but he had admitted that he relied only on “minutes of meetings” supplied by church officials.

As for the Can$25-million fundraising campaign that eventually only raised $3.9 million, the accountant told the court that many donations came with a “string attached” that instructed him on where to put the money. This was, again, apparently contrary to the agreement.

Federal government lawyers had also asked the judge to declare the church had not fulfilled its obligations and order an independent review of the expenses, among other recommendations.

However, ahead of the 2015 hearing on the case, the judge approved a controversial $1.2 million (US$962,418) church buyout proposal and the case was closed without it having to justify any expenditure.

Court officials recently declined to make that 2015 court document public. The Federation of Sovereign Indigenous Nations, which represents First Nations communities in Saskatchewan province, claimed this refusal was an example of “systemic racism.”


A Canadian Conference of Catholic Bishops (CCCB) official told CBC news that it is “committed to continue engaging and listening” but declined to comment on the issue.

In recent months, more than 1,000 unmarked graves believed to belong to indigenous children have been found at former residential school sites across the country. The discoveries have prompted public anger over the failure of government and church bodies to properly address what has been termed as a “cultural genocide.”

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