On July 8, the Carney government announced significant spending reductions—15 per cent across all federal departments over three years. Among the departments affected is Indigenous Services Canada, which funds crucial services for First Nations communities.
While budgetary restraint may seem justified amid economic uncertainty, surging defence spending, and national crises in housing and climate, it must still align with Canada’s constitutional and human rights obligations. Blanket cuts may appear neutral but have discriminatory effects, particularly on First Nations peoples whose essential services are federally funded, unlike those for most Canadians, which fall under provincial jurisdiction.
The government has stated that transfer payments to provinces will be protected, ensuring continued support for public services like education and health care for most Canadians. However, these same services for First Nations are funded by the federal government and are not similarly shielded from cuts. As a result, essential services for First Nations communities will face reductions, while the same services provided to other Canadians by the provinces will remain untouched, effectively creating a two-tiered system in which First Nations people bear the brunt of austerity while others are spared.
This approach runs counter to Canada’s legal framework. Sec. 15 of the Charter guarantees equality rights, and the Canadian Human Rights Act prohibits discrimination in federally regulated services. Canadian law does not allow treating everyone identically when their realities differ. Instead, it requires substantive equality. This means services that account for distinct cultural, historical, and geographic contexts.
The Canadian Human Rights Tribunal (CHRT) has repeatedly ruled that the federal government’s failure to meet this standard amounts to racial discrimination. In 2016, it found Canada had underfunded First Nations child welfare services by approximately 22 per cent compared to provincial systems. More recently, in 2022, the CHRT concluded that Canada had failed to provide adequate and culturally appropriate policing in First Nations communities, findings echoed by the National Inquiry into Missing and Murdered Indigenous Women and Girls.
These funding inequities are systemic and extend to nearly every federal service offered to First Nations peoples, from education and housing to health care and job training. Despite recent investments by the federal government, funding remains insufficient to close long-standing gaps.
Instead of narrowing disparities, these new cuts threaten to widen them, putting Canada in direct violation of binding CHRT orders. Beyond being unlawful and unconstitutional, this could expose the government to further legal action, including potential contempt of court.
There are both moral and economic costs to this approach. If reconciliation is to be more than rhetoric, the government must stop chronically underfunding First Nations services. The harms of unequal treatment are not theoretical. The CHRT has compared the impact of discrimination in child welfare to the trauma of residential schools: children removed from families and communities, with lifelong consequences.
Moreover, ignoring legal responsibilities comes at a high price. The CHRT’s compensation order, which led to a $23.3-billion settlement for victims—the largest in Canadian history—was the result of Canada’s wilful and reckless discrimination against First Nations children. If the government repeats its discriminatory conduct, taxpayers could once again be on the hook for more payouts.
In short, cutting services that are already under-resourced is not fiscally prudent; it is legally indefensible and socially destructive. True reconciliation requires investment, not withdrawal. Canada cannot meet its constitutional obligations—or its moral ones—by slashing support to the very communities it has pledged to support.
Anne Levesque is a human rights lawyer, law professor, and advocate for substantive equality. She holds the Gorden Henderson Chair on Human Rights at the University of Ottawa where her work focuses on advancing minority rights, addressing systemic discrimination, and improving access to justice. With nearly two decades of experience working alongside equality-seeking communities, she bridges research, advocacy, and legal action to combat discrimination in Canada.
The Hill Times