Indigenous Services, Crown-Indigenous Relations table plans to cut spending

A Manitoba First Nations leader is demanding answers from the federal Indigenous affairs ministersafter their departments tabled plans this month to cut hundreds of millions of dollars in spending,while forecasting a multi-billion-dollar decreaseover three years.

Cathy Merrick, grand chief of the Assembly of Manitoba Chiefs, in a Tuesday statement called it "unacceptable and irresponsible" for the ministers to cut funding when First Nations are already in a constant state of emergency.

According to the latest departmental plans, Indigenous Services Canada and Crown-Indigenous Relations intend to cut a combined $417 million from theirbudgets over three years, targeting bureaucratic inefficiencies, travel, consulting and some grants and contributions.

Meanwhile, Indigenous Services alone forecasts a broader $4.1-billion decrease in spending over the same period, as cash from past budgets runs out, or "sunsets," including for child and family services, infrastructure, Jordan's Principle and the Inuit Child First Initiative.

This means the Trudeau government faces tough choices on whether to renew this money in coming budgets, amid intensified pressure to spend more in other areas like defence and pharmacare.

The Assembly of Manitoba Chiefs, which advocatesfor 62 First Nations, said any cuts will exacerbate already pronounced disparities in health and economic outcomes.

"Cutting federal funding when so many First Nations already struggle to meet their basic human needs is irresponsible and morally reprehensible," said Merrick in the statement.

"This is not reconciliation."

Canada also risks legal liability if it fails to spend the necessary money on child and family services and Jordan's Principle, a program intended to ensure First Nations children can access essential health and social services, the statement added.

Cuts announced in 2023

The $417 million represents the two departments' efforts to help the Trudeau government shave $15.4 billion from budgets government-wide, an initiative announced last year.

The Assembly of Manitoba Chiefs urged Crown-Indigenous Relations Minister Gary Anandasangaree and Indigenous Services Minister Patty Hajdu to provideexplanations for the cuts and be accountable for their implications.

Hajdu previously promisedthe reductions wouldn't impact direct service delivery, which the assembly met with skepticism. The minister's office reiterated the pledge in a statement.

"We committed to no cuts to services, and we're delivering on that," wrote press secretary Jennifer Kozelj.

"We're targeting operational efficiencies, public servant travels and departmental transformation. We will also work in collaboration with Indigenous partners to identify efficiencies in grants and contributions that are not fully utilized."

New Democrat MP Niki Ashton rejected Hajdu's pledge as absurd, when programs are already underfunded and overburdened.

"There's absolutely no way that a half-a-billion-dollar cut in Indigenous Services will not affect front-line services," she said.

"There's just no way. Nobody believes that and I think it's deeply concerning that the Liberals are even expending energy trying to convince us of that."

It may be possible to leave services untouched while cutting travelbut the government will face tough calls when reducing grants and contributions, the federal parliamentary budget officer said.

"It could be advocacy grants and contributions that they will reduce, but the proof will be in the pudding," Yves Giroux told CBC Indigenous.

"I cannot see that many stakeholders being happy with the reduction in the grants and contributions that, presumably, they receive."

Giroux, a neutral, non-partisan official, said the details are too vague to say at this point whether service delivery will or won't suffer.

Infrastructure gap estimated at $425B

Ashton wants Hajdu to reverse the cuts and ensure cash for critical programs like Jordan's Principle is replenished. Indigenous organizations, meanwhile, seek increases in federal cash, in particular for infrastructure.

The Liberals pledged to close the infrastructure gap in Indigenous communities by 2030, which recent estimates found would cost about $425 billion onreserves and in Inuit territories.

The Assembly of First Nations pegged the on-reserve gap at $349.2 billion, while Inuit Tapiriit Kanatami seeks an infusion of $75.1 billion for Northern infrastructure, according to recent reports and pre-budget submissions.

Giroux said the Liberals could always maintain or increase spending on Indigenous issues, even if it's forecasted to decrease, if they borrow more, reduce spending elsewhere or increase taxes. But he noted the Liberal purse is under pressure from elsewhere, making for some tough calls.

The Canadian population is aging, creating increased demand for elderly benefits, while federal health transfer payments to provinces and territories are growing

Public debt charges are forecasted to hit $46.5 billion in the 2024-24 fiscal year, Giroux reported this month. Thatmeans Canada expects to pay more than double Indigenous Services' entire requested budget of $20.9 billion solely on interest for loans.

More money may become available to Indigenous Services throughout the year to ensure it can deliver services, but it won't be easy, the budget officer said.

"There's not that much wiggle room."