OP-ED: The cost of indigenous reconciliation is out of control
"According to a February 27, 2026, Globe and Mail editorial board opinion piece, the unsustainable financing of indigenous reconciliation is increasingly evident in the last federal budget."
Author: Hymie Rubenstein
According to a February 27, 2026, Globe and Mail editorial board opinion piece, the unsustainable financing of indigenous reconciliation is increasingly evident in the last federal budget, particularly through contingent liabilities related to land claims and associated litigation.
The Globe and Mail piece focuses near all its attention on the lack of clarity attached to reconciliation costs citing a report in 2024 in which the Parliamentary Budget Officer looked at the growing cost of contingent liabilities, and urged parliamentarians to push for more disclosure, noting that “it can at best be challenging, and often nearly impossible,” to follow the money through financial documents.
The Liberal government revealed in its 2024 fall economic statement that it had blown past its deficit target, which was supposed to be at or below $40.1-billion. The update put the deficit at $61.9-billion for the fiscal year that ended March 31, 2024. Most of this overshoot was blamed on one-time costs tied to booking contingent liabilities for indigenous claims. Given the recurring nature of those supposedly one-time costs, this should not have been a surprise.
“Contingent liabilities” are the shifting tally of settlements-to-be in any given year. In the fall budget, the federal government said it is “advancing reconciliation, supporting Indigenous Peoples’ right to self-determination, and addressing historical wrongs and systemic racism” with over $60-billion in spending since 2016.
Contingent liabilities are an opaque accounting measure that does not detail the true cost of modern-day reconciliation why the Globe and Mail argues that, “more transparency would help Canadians understand not only that the bill is coming due, but that each year of delay adds to costs.”
Most of Canada’s constantly shifting contingent liabilities relate to indigenous land claim issues. The country earmarked $54.7-billion for such settlements in fiscal year 2024-25, up from almost $12.6 billion in 2016.
What the Globe and Mail fails to address is whether any of this explosion in spending has substantially enhanced the life chances of on- or off-reserve indigenous people. This surely reflects the left-wing position of the newspaper on minority group social and cultural issues.
None of these assertions should raise eyebrows among those following out-of-control spending on indigenous issues and its general acceptance by the mainstream media.
What objective critics would also note is that such land-based liabilities are only part of massive government spending on what used to be called “the Indian problem.” The 2025 Canadian Federal Budget, for example, outlines significant investments in indigenous communities, with over $9 billion allocated for various initiatives over the next five years, focusing on housing, infrastructure, and water. Key highlights include $2.8 billion for urban, rural, and northern housing, $2.3 billion for water/wastewater projects, and a $10 billion Indigenous Loan Guarantee Programme.
Unknown to most Canadians, “housing, infrastructure, and water” rights were never enshrined in any of 18th or 19th century aboriginal land surrender treaties voluntarily signed with the British and Canadian governments.
Also virtually unknown, the federal government introduced Bill S-2, “An Act to amend the Indian Act (new registration entitlements),” in the Senate in 2025 to make changes to legislation first introduced in 2022, which had died on the order paper due to the 2025 election. The main issue is the repeal of the “second generation cutoff,” which had been legislated in 1985. Those amendments conferred Indian status upon the children of an Indian and a non-Indian, but such children could not transmit Indian status to their own children unless they parented with another Indian. Federal statisticians have estimated that transforming the second-generation rule into the indefinite conferring of Indian status as long as one parent is a registered Indian will increase the number of registered Indians by about 300,000, plus or minus an unknown margin of error, by 2066 (about 17 percent of the 2021 population).
The average cost of the Non-Insured Health Benefits Programme, accounting for inflation, would be about $3,000 per capita by 2066, so an additional 300,000 clients will cost close to a billion dollars. The government estimates approximately 3,500 individuals will be entitled to registration just in the first five years.
Such additional reconciliation efforts are only part of the massive federal spending on indigenous issues carefully documented by Tom Flanagan.
Flanagan argues that the Liberal government has shifted from managing expenditures to “shovelling out money,” with budgets for indigenous non-land issues rising from $11 billion in 2015 to a projected $32 billion-$33 billion by 2025.
Despite this increase, data shows only a modest narrowing of the socio-economic gap between aboriginals and other Canadians. He suggests that improvements in living standards are more likely due to universal, non-targeted programs like the Canada Child Benefit (CCB) rather than direct, targeted spending on indigenous programs.
He points to a surge in lawsuits and specific claims, with $76 billion in liabilities estimated by 2023, noting that the government is choosing to negotiate rather than litigate, creating a cycle of high payouts.
Flanagan also argues the “biggest problem” is a lack of economic opportunity, driven by the remote location of many reserves. He advocates for fostering “community capitalism” through resource extraction, infrastructure development, and encouraging private investment, rather than relying solely on government handouts.
Taking a long-term historical perspective also makes clear that the 1763 Royal Proclamation, the signing of apartheid-like treaties, the enactment of the separatist Indian Act, and other legislation and practices that retarded the absorption of Western European beliefs, values, and practices have made the first settlers of Canada worse off today than they would otherwise be. This can best be seen in contemporary social, economic, and health differentials between indigenous people and other Canadians.
Placed in a comparative national context, indigenous people on- and off-reserve exhibit the lowest incomes; the highest rates of unemployment, non-working population numbers, poverty, welfare dependency, and homelessness; the most inferior housing; the highest rates of infant mortality; the lowest life expectancy; the highest disease and illness rates; the highest school dropout proportion; the highest rates of child apprehension, fostering, and adoption; the highest levels of suicide; the highest rates of sexual abuse; and the highest proportion of single motherhood.
No amount of government handouts will ever change these numbers unless accompanied by the associated removal of the separate legal rights, duties, and responsibilities of indigenous peoples.
Hymie Rubenstein, editor of REAL Indigenous Report, is a retired professor of anthropology at the University of Manitoba and a senior fellow at the Frontier Centre for Public Policy.