Ottawa’s land claims program is spiralling out of control

Ottawa paid $7.1B for land claims in 2024-25 alone, raising concern that soaring costs and weak accountability are shortchanging taxpayers

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Ottawa is quietly handing out billions in Indigenous land claims, and the costs are soaring far beyond what most Canadians realize.

A new report from Tom Flanagan, professor emeritus at the University of Calgary and senior fellow at the Fraser Institute, warns the federal government’s specific claims program is spiralling out of control. In the 2024-25 fiscal year alone, Ottawa settled 69 claims worth $7.1 billion. Just a decade earlier, in 2014-15, only 15 claims were settled, at a total cost of $36 million. That’s an increase of nearly 200 times in dollar value.

At the centre of the problem is a 2017 directive from then-justice minister Jody Wilson-Raybould. It told federal lawyers to negotiate settlements instead of contesting Indigenous claims in court. Framed as a conciliatory approach, the directive has instead prevented government lawyers from defending decisions made more than a century ago.

The result is that Ottawa is conceding even weak cases, creating a flood of settlements with little accountability to taxpayers footing the bill.

Many of these cases, often called “cows and plows” claims, involve allegations that Ottawa underpaid bands for livestock, equipment or other provisions promised in historical treaties. At the time, the sums were often just a few hundred dollars. But with decades of compound interest added, those claims have ballooned into multimillion-dollar payouts. Flanagan argues that compensation must be grounded in fairness, not in payouts so large they threaten the public purse.

To restore fairness and accountability, Flanagan’s report lays out a clear path forward:

• Rescind the practice directive that ties the hands of government lawyers in resolving claims from Indigenous bands;
• Recognize that bands have already had more than 50 years to make claims, so it is time to set a date when new claims will not be accepted;
• Ensure that the First Nations Fiscal Transparency Act is enforced; and
• Reject the Assembly of First Nations’ proposal that would substantially increase the number and values of claims.

Flanagan warns that without these changes, the program will continue to expand, putting Canadian taxpayers at greater risk and undermining confidence in the system.

Transparency is central to any fair system, yet here, too, Ottawa has failed. In 2016, the federal government announced that bands would face no penalties for failing to file financial reports. Predictably, compliance has dropped.

By 2024, only 260 of Canada’s roughly 630 bands—just 41 per cent—had submitted reports. If Indigenous governments want recognition as autonomous authorities, they must also meet the same standards of transparency required of provinces, municipalities and school boards. Canadians deserve no less.

Those failures come with a steep price. As of March 31, 2023, the federal government reported $76 billion in outstanding obligations, including costs for pensions, environmental cleanup and legal settlements. More than half—$42.7 billion—was tied to Indigenous land claims. These obligations don’t just sit on the books; they threaten Canada’s broader economic health. Unless Ottawa regains control, the costs will continue to climb, undermining fiscal stability.

The consequences of inaction will be severe. If the country slips into recession under the weight of ballooning obligations, Indigenous communities—many already struggling economically—will be among the hardest hit.

A program meant to deliver justice could end up worsening conditions for the very people it was designed to help.

Canadians want fairness for First Nations. But they also deserve accountability for how billions in tax dollars are spent. Flanagan’s report, Specific Claims: An Out-of-Control Program, gives Ottawa a roadmap to deliver both. The question now is whether the federal government has the courage to act before the costs spiral even further out of control.

Rodney A. Clifton is a professor emeritus at the University of Manitoba and a senior fellow at the Frontier Centre for Public Policy. Along with Mark DeWolf, he is the editor of From Truth Comes Reconciliation: An Assessment of the Truth and Reconciliation Commission Report (2024).