Child welfare spending on First Nations will continue to rise without changes: study

A study that looked into government spending on First Nations child welfare says without changes the cost to Canadian taxpayers will continue to increase.

"The structure of the system is not working for children," said Helaina Gaspard, who led the study by the Institute of Fiscal Studies and Democracy at the University of Ottawa.

"The system itself incentivizes, as many know too well, the placement of children in care. It's effectively how funding is unlocked."

The study predicts that without any changes to the current system, with inflation and population alone, the cost to taxpayers will increase by $40 to $140 million by 2021, on top of the $1.3 billion in annual spending on child welfare on First Nations.

Gaspard says those projections don't include the increased costs associated with the downstream effects — such as increased interaction with welfare and justice systems, and increased homelessness that children in care often experience later in life.

"The more you invest at the front end, the less you'll likely have to pay with social and fiscal costs later in life," she said. "Pay now or pay later."

Greater focus on prevention needed

The 375-page study, called Enabling First Nations Children to Thrive, found many First Nations Child and Family Services (FNCFS) agencies are stretched beyond their means and points to systemic issues with poverty, substance abuse issues, and limited access to resources on reserves.

It also lists the impacts of residential schools and the Sixties Scoop as additional challenges within the communities served.

The report was commissioned by the Assembly of First Nations and the Family Caring Society of Canada, stemming from a Canadian Human Rights Tribunal (CHRT) ruling in 2016 that found First Nations children were being discriminated against in the child welfare system.

First Nations were also found to be over-represented within the system, with Manitoba having the highest rate of children in care.

Gaspard says the study found the current system focuses on protective services often at the expense of prevention.

She says money for reunification services or family supports, such as parenting skills, are areas that could help address the root causes of apprehensions.

"You can fund a different outcome," Gaspard said. "You can focus your funding on prevention — stopping the problem before it starts so you're not contributing to a cycle, effectively, of interaction with protection services, and of really lost opportunities for so many kids."

Gaspard says contextual differences on First Nations, including poverty, access to housing, clean water and the internet are also factors that play a role in family dynamics.

'The structure has to change'

The report recommends changes in the way money is transferred to child welfare agencies, specifically a block funding model as opposed to paying per child in care.

"Placing a child in care represents a nearly guaranteed means of unlocking resources required for the child, incentivizing their placement in care," the report says.

It also recommends funds for prevention on a per capita basis for the total population served by the agency, not the number of children it serves, at a rate of $800–$2,500 per person, costing anywhere from $224 million to $708 million per year.

"The structure has to change," Gaspard said.

Gaspard says IT budgets among FNCFS agencies were far below industry standards, and the report recommends a one-time contribution to upgrade infrastructure and technology at a cost of $116 million to $175 million, as well as a dedicated budget for technology improvements.

"Tech spending represents effectiveness and efficiency," she said.

'There is a better way'

The study also identified gaps in the agencies' ability to pay employees, and recommends bringing FNCFS salaries up to provincial levels as well as looking at case complexity to determine reasonable caseload levels and access to professional support and leave for compassion fatigue.

Gaspard says the costs of implementing changes might be higher than current funding models, but the cost of doing nothing will be greater in the long run.

"There are increasing numbers of children in care, and by our projections in the report, the numbers of children in care will increase over time, obviously also increasing the cost of the current system," she said.

"There is a better way to do this, and there is a better way that can help families and support children and support communities as they move forward."