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OTTAWA — The federal government is appealing a ruling ordering Ottawa to pay First Nations children removed from their homes, but theparties have agreed to sit down starting Monday in hopes they can reach a financial settlement outside of court. 

The government filed the notice of appeal late Friday before the Federal Court of Appeal closed, along with its legal window to do so. 

Many Canadians, Indigenous leaders, parliamentarians and advocates were watching for what the government would do, as the case has been seen by some as a test of the Liberals' commitment to reconciliation. 

In 2016, the Canadian Human Rights Tribunal found Ottawa discriminated against First Nations children by knowingly underfunding child and family services for those living on reserve.

Litigants in the case first brought forward in 2007, say this led to thousands of kids being apprehended from their families and enduring abuse and suffering in provincial foster care systems.

The tribunal said each First Nations child, along with their parents or grandparents, who were separated because of this chronic underfunding were eligible to receive $40,000 in federal compensation, which was the maximum amount it could award.

It has been estimated some 54,000 children and their families could qualify, meaning Ottawa could be on the hook to pay more than $2 billion. 

The tribunal also ruled that the criteria needed to be expanded so more First Nations children could be eligible for Jordan's Principle, a rule designed to ensure jurisdictional disputes over who pays for what doesn't prevent kids from accessing government services. 

In 2019, the federal government asked the Federal Court to dismiss the tribunal's decisions. Part of its arguments, according to a court summary, was awarding individual compensation meant there needed to be proof of individual harm.

The Federal Court upheld the orders last month and Friday was the final day for the government to file an appeal.

In a joint statement Friday after the appeal was filed, Indigenous Services Minister Patty Hajdu, Crown-Indigenous Relations Minister Marc Miller and Justice Minister David Lametti said the parties "have agreed to pause litigation" on the tribunal's decision.

"We have agreed to sit down immediately and work towards reaching a global resolution by December on outstanding issues that have been the subject of litigation," the statement said.

"This means that while Canada filed what is known as a protective appeal of the Federal Court decision … the appeal will be on hold and the focus will be squarely on reaching an agreement outside of court and at the table."

The parties to the case are the federal government, the First Nations Child and Family Caring Society and the Assembly of First Nations.

Cindy Blackstock, executive director of the First Nations Child and Family Caring Society, said in an interview she was disappointed by the federal government's appeal.

She said the pause for talks would focus on making child and family services "equitable," to ensure the federal government increases funding for First Nations families.

"We will not negotiate under any circumstances a reduction in the compensation," she said.

National Chief RoseAnne Archibald of the Assembly of First Nations said in a statement that while discouraged by another appeal, "we are encouraged that a deadline will be set to negotiate a settlement on this matter."

Deputy Grand Chief Bobby Narcisse of the Nishnawbe Aski Nation, which represents First Nations in northern Ontario and is also a party to the case, called the process frustrating.

The ministers' statement added that in addition to fair compensation for those who have been harmed, the government is also committing to significant investments to address long-term reform of First Nations child and family services.

At a news conference Friday evening, Miller said there was no intention to reduce any amounts paid to children who were removed from their homes, but acknowledged those fighting for compensation are skeptical.

"Trust is thin," he said. "I can't guarantee success on this, but I can guarantee you we'll do our utmost."

Miller said there is no simple answer as to why Ottawa doesn't just pay victims the money awarded by the tribunal. 

He said if the government implemented the orders as is, members of other class-action lawsuits representing other groups of First Nations children would not receive compensation, and that the matter crosses into different jurisdictions.

"We could implement the (tribunal's) orders, as written, tomorrow," he said. "It would not fix the system which continues to be broken. It would advance very little on long-term reform."

"We are juggling very, very complex legal files and when people lawyer up, people get dug in."

He said the government is putting "a very significant financial package" forward to pay children who have suffered harm while in child-welfare systems, including those behind other class actions. He said he cannot disclose the specific amount but the government knows that proper compensation would amount to "billions of dollars."

Asked directly whether each First Nations child, their parents and grandparents impacted by the system would receive $40,000 each, he repeated that the details of the package were private. 

"There are children who are entitled to more than $40,000, that's clear," he added later in the news conference. 

Miller said the talks have the potential to be "messy," but he added: "Messy is good. That's where we figure things out."

NDP Leader Jagmeet Singh said it was "deeply disappointing" but sadly not surprising that the Liberal government decided to appeal the ruling.

"For the past six years, Justin Trudeau has said nice things about reconciliation, but unfortunately, at every opportunity, he fails to back that up with meaningful action," Singh said in a statement.

In the notice of appeal, the government says Canada acknowledges the finding of systemic discrimination and does not oppose the general principle that First Nations individuals who experienced pain and suffering as a result of government misconduct should be compensated.

"Awarding compensation to individuals in the manner ordered by the Tribunal, however, was inconsistent with the nature of the complaint, the evidence, past jurisprudence and the Canadian Human Rights Act," it says.

This report by The Canadian Press was first published Oct. 29, 2021.

— with files from Marie Woolf

Stephanie Taylor, The Canadian Press