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Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, called the decision a 'turning point for reconciliation' in a statement on Twitter Friday.Sean Kilpatrick/The Canadian Press

The federal government has lost its bid to delay a deadline for compensating First Nations families torn apart by an underfunded child welfare system, as part of a Federal Court decision that looks to ensure children affected receive payments promptly.

The Canadian Human Rights Tribunal had ordered the government to pay $40,000 to all Indigenous children who were inappropriately placed in foster care because of underfunded family services on reserves, as well as to the parents or grandparents who had them taken away. Compensation was also ordered for children who were refused essential services.

The tribunal set a Dec. 10 deadline for the government to submit a payment plan, and has since pushed it back to Jan. 29, 2020. The federal government wanted the court to remove any deadline and give it a chance to come up with a compensation package outside the confines of the order.

Federal Court Justice Paul Favel rejected that request in a ruling released Friday afternoon, saying he saw no need to grant a further extension.

At the same time, Justice Favel did uphold Ottawa’s request for a judicial review of the tribunal’s order, saying it could provide “an incentive” for all parties to reach an agreement on a framework for paying the compensation.

Besides, Justice Favel wrote, the tribunal could take some time to approve a payment program, which could then be challenged in court again, further delaying payment. “Surely this is not a desirable result,” Justice Favel wrote, who also noted all parties in the dispute wanted to “do the right thing.”

The desire to avoid having children and their families wait even longer should “provide an incentive” for everyone to “expedite good-faith discussions with one another,” and hopefully reach a deal the tribunal can approve, he said, adding: “This will not be a wasted exercise.”

Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, called the decision a “turning point for reconciliation” in a statement on Twitter Friday.

“Canada either fully complies with the Tribunal’s rulings [and] ends discrimination in other public services or it continues to fight First Nations children,” said Ms. Blackstock, whose organization filed the original complaint with the tribunal a dozen years ago.

“Whatever choice they make – it is time for Canadians to make them famous for it.”

The September ruling said the federal government “wilfully and recklessly” discriminated against Indigenous children living on-reserve by not properly funding child and family services. As a result, children were sent away from their homes, families and cultural communities.

Had they lived off-reserve, the children would be covered by better-funded provincial systems.

During hearings this week on the federal challenge to the decision, a government lawyer told Justice Favel that the Liberals would compensate children and their families, but wanted to do so without the tribunal order hanging over it.

Ottawa instead wants to pay out through a settlement in a separate, but related, class-action lawsuit filed earlier this year that seeks $6-billion in damages for Indigenous children. That case could cover all victims going back to 1991, while the tribunal order goes back to 2006.

Lawyers for the First Nations Child and Family Caring Society and other parties in the case said nothing stops the government from paying damages awarded by the human-rights tribunal while also extending compensation to other victims.

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