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December 22, 2001
Lawsuit bankrupts first diocese
Native residential schools case forces one Anglican group under: How many will follow?
Richard Foot
National Post
Six years ago in Kamloops, B.C., a document arrived at the office of Jim Cruickshank, an Anglican bishop, that would alter his career and his outlook forever.
The document was a lawsuit from Floyd Mowatt, a Gitskan native, who was suing the Anglican Church and the federal government for the sexual assaults he suffered as a child at the former St. George's native residential school.
Bishop Cruickshank, who had little contact with lawyers and courts until then, remembers thinking "this might be bigger than what we're able to handle." Yet he never imagined that one day it would destroy the Anglican Diocese of Cariboo, a district of 17 far-flung parishes he supervised across the mountains and river valleys of the B.C. interior.
That day has now come. Bishop Cruickshank will preach his last sermon on Christmas Day at St. Paul's Cathedral in Kamloops. On New Year's Eve, the diocese will cease to operate -- becoming the first church organization to fall as a result of residential school lawsuits, and the first Anglican diocese in the Commonwealth ever sued into financial ruin.
"I'll never forget that moment as long as I live," says Bishop Cruickshank. "Six years ago we were already involved in residential school healing programs and spiritual work, and then the first lawsuit arrived and everything came to a screeching halt."
He spent the ensuing years talking to lawyers, judges and journalists. After decades of trying to build up his church, he has now seen part of it torn down. He is angry, not at the plaintiffs who filed suit, but at the failure of the government to create a system of validating and compensating claims outside the costly court process. "I've lost total confidence in our government," he says. "I'm very disappointed."
Floyd Mowatt, who was awarded an estimated $200,000 in compensation after a long legal battle, has said he couldn't care less if the Diocese of Cariboo dies away. This was the church, after all, that helped run the school where he was abused by a dormitory supervisor, who was later jailed for his crimes.
"I don't know how they think they can get away with this bull," he said last year.
Mr. Mowatt and 14 former students of the St. George's school in Lytton, B.C. have now brought the diocese to its knees. More than 8,000 other natives with lawsuits are threatening to do the same to dozens of similar church organizations.
For most of the 20th century, the Roman Catholic, Anglican, United and Presbyterian Churches helped the federal government operate its native residential schools across the country. Unless Ottawa suddenly changes tack and agrees to limit church liabilities, at least four other Catholic and Anglican groups could become insolvent by the end of 2002.
The national office of the Anglican Church of Canada has about $5-million in remaining assets, alongside projected liabilities of $40-$100-million. The church is dipping into its investment funds to pay legal fees. A new round of court-ordered settlements next year could finish it off.
Elsewhere, the Anglican Diocese of Qu'Appelle in Regina, the Roman Catholic Diocese of Whitehorse, and Manitoba's Missionary Oblates are each on the verge of bankruptcy.
"We've pretty much run out of money," says Father James Fiori, who oversees 71 Oblate priests and brothers in Manitoba. He says residential school litigation is costing his order about $50,000 a month, and without help from Ottawa the organization will be insolvent in the spring.
Sister Marie Zarowny, who represents the Roman Catholic Church in talks with the government, says many organizations would have declared bankruptcy this year, but were waiting to see if the federal cabinet would cap church liabilities in recognition of the services churches provide -- such as healing and counselling work, as well as social services -- in aboriginal communities.
Instead, after almost a year of discussions ordered by Herb Gray, the Deputy Prime Minister, the government continues to insist churches are concealing assets and obscuring their ability to pay. Talks between the two sides have broken down and there are no plans to resume.
Meanwhile, as thousands of lawsuits limp through the courts, and as the government and the churches spend increasing sums on lawyers, the anger of Sister Zarowny rises: "I think the government has handled this very poorly," she says. "I think it's outrageous it's been allowed to get to this point. Mr. Gray said over a year ago he did not want to see any church groups go bankrupt because of these actions, that churches provided a valuable service to the people of Canada. Nothing has been done to prevent that."
If nothing has been done to satisfy churches, it is because the government faces no political pressure to act. The plight of both native plaintiffs and the beleaguered churches has not galvanized the public.
That might change if Christian worshippers were forced to sell their beloved community churches to pay residential school liabilities. But even in the Diocese of Cariboo, where lawsuits have taken the greatest toll, church properties remain intact.
Even though the diocese is shutting down operations, the 9,000 members of its various parishes still have buildings to attend on Sundays. Those parishes have been transferred to the episcopal oversight of another bishop in a neighbouring diocese. They will now operate on their own budgets. On paper, the Cariboo properties are worth about $3-million.
No one knows whether they will ever have to be sold to satisfy creditors. As a co-defendant in the lawsuits, the federal government is one potential creditor that could make claims against the parish assets. Already federal lawyers have added up the value of the various bits of real estate and asked questions about what the local churches own.
In negotiations this year, federal officials also asked churches what kind of "commercial security" they could offer the government as part of any deal to cap church liabilities. The only security most churches can offer are mortgages on their buildings.
It may be politically impossible for the government to take over church buildings, or to stand by and watch as they are sold to pay residential school liabilities. Yet federal cabinet ministers have stated churches must share the burden of feeling some pain in resolving the lawsuits.
So far, no hallowed buildings have been sold, no mortgages have been transferred, and no silver chalices have been auctioned off. There are still no tangible signs that church members are directly affected by the lawsuits. But Bishop Cruickshank insists after the closure of his office, there is shame, anger and sadness in his dying diocese.
"You have no idea how much pain this has caused," he says. "People here love the Diocese of Cariboo. To be told your church abused little children, and now it faces bankruptcy -- to say we haven't felt any pain simply isn't true."