Unsettling

Today's story about the Cons' use of part of the Indian Residential School Settlement Trust fund for other programs may not seem particularly important on its face. But it's worth noting a few of the broader implications of what the Cons seem to have done.

Note that the discussion below assumes - as seems to be the case from the article - that the Cons have actually pulled money out of the settlement trust fund for use elsewhere, rather than simply failing to put money into the trust fund as originally planned. (Of course, there would certainly be some issues one way or the other.)

If the Cons have indeed taken funds out of the trust, that would seem to signal a complete lack of appreciation for the need to appropriately manage different pools of money. The opposition line so far has focused on the transaction as a "shell game" to shift money from one place to another, and that's undoubtedly an important consideration. But it's the particular pool of money chosen as a source which would seem especially problematic.

I'm not sure whether it's less plausible to think that the Cons could actually not know that a trust fund is supposed to be used solely for the benefit of the trust beneficiaries, or that they could manage not to care where funds come from if they can be diverted to benefit the party's public appearance. But it's hard to see how either could be anything but a clear indictment of the Cons' fitness to handle Canada's public funds.

Second, even if the Cons could paper over such a move at law by passing their supplementary estimates, any withdrawal would still look to be a glaring breach of the federal government's agreement with residential school survivors. The Trust Agreement which forms part of the residential school settlement includes this obligation on the federal government as trustee at 3.1:

The Trustee...agrees to hold...all amounts at any time forming part of the Trust Fund upon the trusts and subject to the terms contained in this Agreement and the Settlement Agreement.

On my reading, that phrase couldn't be much more clear in stating that the federal government promised to hold the trust fund - including all money which was part of it at any time - to be preserved and used for the purposes set out in the Trust Agreement.

Now, it may be that there's some provision tucked into one of the settlement documents which overrides that intention. But on a quick review of the Trust Agreement and the main settlement agreement, I didn't see anything to that effect. (And just so we're clear, the federal government's ability to retain legal ownership of the fund for the purpose of administering the trust wouldn't seem to take any priority over the use for which the money is intended.)

From what I can tell, then, the Cons would seem to have broken their own commitment to a group which already has far too much reason to distrust the federal government. And it's hard to imagine why the Cons would want to keep adding insult to the injury inflicted by residential schools.

In that respect, let's note one final point for now. Under the Trust Agreement, any surplus money in the trust fund would be used for additional Common Experience Payments for residential school survivors, as well as funding for the National Indian Brotherhood Trust Fund and the Inuvialuit Education Foundation. So if the Cons succeed in actually taking money out of the trust fund in the longer term, that's who stands to lose out.

We'll hopefully find out before too long exactly what the circumstances were behind the Cons' diversion of money. And from there we'll see if the story develops legs, whether the federal government will simply quietly repay any amounts withdrawn - or whether the story will get lost in the cacophony that is the federal political scene at the moment.

But this looks like it could be the most disturbing example of Con mismanagement yet. And nobody but the Cons can win out in the long run if it's allowed to pass without some serious scrutiny.