Manitoba won't appeal ruling that government improperly took $334M from children in care

The Manitoba government says it won't appeal a May ruling that found it improperly kept hundreds of millions of dollars in federal benefits meant for children in care.

"After many years of struggle, the Manitoba government has finally decided to do the right thing," said Assembly of First Nations Regional Chief Cindy Woodhouse in a government news release Thursday.

"I commend the Manitoba government for its decision not to appeal."

A judge ruled that Manitoba's decision to order Child and Family Services agencies to give the money from the children's special allowance to the province, which happened from 2006 to 2019, was unconstitutional and discriminatory against Indigenous and disabled children. 

It's estimated the province improperly took over $334 million — including $251 million from Indigenous Child and Family Services agencies — in benefits.

The federal government's children's special allowance is meant to ensure children in care get the same federal funding that other children get through the Canada child benefit and child disability benefit.

The province has previously argued it deserved the money since it was paying the cost of looking after the children.

Families Minister Rochelle Squires said the province is making amends for mistakes of the past.

She recalled the words of former senator Murray Sinclair who once said "the monster" created in residential schools found a new house in the child-welfare system.

"I think back to the Hon. Murray Sinclair quote many, many times about the need to build a better child welfare system so we can ensure that the legacy of residential school isn't perpetuated in the actions of government today," Squires said.

Listening to children in care

At a May news conference, Indigenous agencies and leadership, including Sinclair, pleaded with the government not to appeal.

Sinclair said appealing the ruling would mean the Manitoba government isn't serious about reconciliation.

On Thursday, Trudy Lavallee, executive director of Animikii Ozoson Child and Family Services, said the province heard the voices of children in care, many of whom are now adults.

"When they took that money from children in care, they were actually stealing the money," she said.

"Essentially, the message was that they're not afforded the right to other services and items that other children in Canada have received," said Lavallee, whose agency serves families living in Winnipeg who have ties to Ontario First Nations.

The clawback started in 2006 under the NDP government. The Progressive Conservatives, elected in 2016, ended the practice after three years, but also tried to ban any legal challenge against Manitoba for shortchanging children in care.

The judge struck down the section of the law preventing legal action. 

The plaintiffs' lawyers will push forward their class-action lawsuit to ensure those who should have received the benefit are compensated. 

Lawyer Shawn Scarcello said the court action will seek to determine the identities of the children who did not receive the allowance, how much they should be paid and the method to recoup their money.

"In my view, all of those children should now receive the [children's special allowance] benefits that were denied to them. Manitoba, if they are acting in good faith, should recognize this as well. Especially so, given that they are not appealing the decision," Scarcello wrote in an email.

Also on Thursday, the government announced the creation of a "collaborative table" to address policy and legislative issues impacting Indigenous peoples.

One responsibility of this group, comprising of Indigenous governments and organizations, will be establishing how Manitoba will make amends for clawing back money from CFS agencies. The value of any remuneration is up for discussion, Squires said.