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On July 8, the Carney government announced sweeping budget cuts across all departments, totaling 15 per cent over three years. These cuts are also expected to hit Indigenous Services Canada, the federal department responsible for funding essential services for First Nations peoples.

In this time of economic uncertainty, marked by increased defense spending, tariffs, and growing housing and climate crises, some fiscal restraint may seem inevitable. Still, this restraint must respect Canada’s constitutional and human rights obligations.

These across-the-board cuts might seem neutral, but they will have disproportionate and unlawful impacts on First Nations peoples, in violation of the Canadian Charter of Rights and Freedoms and the Canadian Human Rights Act. They are morally indefensible in a country that professes a commitment to reconciliation, and they expose the government to significant legal liabilities that will cost taxpayers far more than any short-term savings.

Real equality is not a discretionary choice, it is the law

Equality is a core Canadian value and a legal obligation. Section 15 of the Charter guarantees the right to equality, while the Canadian Human Rights Act, a quasi-constitutional law, prohibits discrimination in the provision of services, including those provided or funded by the federal government.

Courts and human rights tribunals in Canada have long rejected the notion of formal equality, which treats everyone the same without taking into account different realities. Instead, Canadian law requires substantive equality, a framework that considers the specific needs, histories, and contexts of individuals.

In the case of First Nations peoples, the Canadian Human Rights Tribunal (CHRT) affirmed that substantive equality requires services that respond to their distinct cultural, historical, and geographic needs and circumstances. In other words, discrimination is not only bad public policy. It is also illegal.

Cuts based on race

While most Canadians receive essential public services such as education, health care, and child welfare from provincial governments, these same services are most often funded by the federal government for First Nations peoples.

The Government of Canada has stated that the 15 per cent spending reduction will not apply to transfer payments, recognizing that essential services such as health care, education, and child welfare provided by provincial governments must remain protected. However, this reduction is set to apply to Indigenous Services Canada, which funds these same public services and essential programs for First Nations.

This is not a neutral policy choice. This decision places the burden of austerity directly on First Nations peoples, while sparing the rest of the Canadian population. First Nations communities, already facing increased needs due to the lingering effects of colonization and the often higher costs of delivering services in remote or culturally distinct contexts, are being doubly penalized. The result is a funding cut that is presented as neutral but in fact follows racial lines.

Imagine the outcry if the government announced a 15 per cent cut to services for one racial group but not another, or for francophones but not anglophones. Such a measure would rightly be denounced as discriminatory. And yet that is exactly what we are seeing. Although the policy is presented as neutral, it disproportionately targets First Nations. As Cindy Blackstock has said, it is simply racist fiscal policy.

Canada has already been put on notice

What is particularly unacceptable is that First Nations peoples have already borne – and continue to bear – the burden of chronic underfunding compared to non-Indigenous Canadians. The Canadian Human Rights Tribunal has repeatedly expressed its deep concern about this illegal racial discrimination and has ordered Canada to take steps to end it.

In 2016, for example, the Tribunal found that Canada discriminated against First Nations children in the provision of child welfare services. On average, funding per child was 22 per cent lower than in provincial systems, falling short of even the minimum required to meet formal equality.

Police services are another striking example. In 2022, the CHRT also found that Canada was underfunding public safety in First Nations communities. As documented in the final report of the National Inquiry into Missing and Murdered Indigenous Women and Girls, the consequences of an inadequate, underfunded, and culturally inappropriate policing system can be a matter of life and death.

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These funding gaps are not unique to child welfare or policing. They extend across almost every federal service provided to First Nations: education, housing, health care, income support, job training. The Office of the Auditor General of Canada has documented them repeatedly.

While the Trudeau government did increase funding for First Nations services and programs. But these investments remain insufficient to close the gaps. They fall far short of Canada’s legal obligations to substantive equality, as required by section 15 of the Charter and the Canadian Human Rights Act. Sustained structural reforms are needed to respond to the CHRT orders on child welfare and policing.

This will require more funding, not less. Cutting budgets now will only exacerbate the inequalities that the CHRT has specifically ordered Canada to correct. This is not only illegal and unconstitutional – it exposes the government to potential contempt of court proceedings for failing to comply with binding orders.

The moral and financial costs of neglecting equality

There is a moral imperative for equality. If Canada is serious about its commitment to reconciliation, it cannot continue to knowingly underfund essential services for First Nations peoples. The CHRT has compared the consequences of discrimination in child welfare to the legacy of residential schools: children torn from their families, communities, and cultures.

But even if the moral arguments fail to persuade, the economic arguments should. The CHRT’s historic compensation order led to a $23.3-billion settlement, the largest Canadian history and among the largest in the world. The compensation order was based on the fact that Canada knowingly discriminated against First Nations children for years while aware of both the serious harms caused and the available remedies to prevent them. In other words, equality is a legal obligation. Ignoring it is costly. History shows that failing to act now will once again lead to financial and social consequences that are just as serious, if not worse.

Deepening inequality is not reconciliation

Canada cannot achieve constitutional compliance or respect human rights by cutting essential services only for First Nations. It cannot achieve reconciliation by deepening inequalities. Across-the-board budget cuts may seem fair in theory, but when applied to already inequitable systems, they only entrench injustice.

Instead of disengaging from its responsibilities, Canada must fully embrace them. It must invest in the long-awaited promise of equality for First Nations peoples and stop treating equality as a luxury to be abandoned.