Provincial lawyers argue policy to claw back child welfare benefit was constitutionally valid

WINNIPEG -

Provincial lawyers argue Manitoba's policy to claw back federal money meant for children in care was constitutionally valid and not discriminatory.

A four-day civil trial between the province and multiple Indigenous CFS agencies continued in Manitoba's Court of Queen's Bench on Thursday,

The agencies have taken the province to court over the claw backs. They say during a 13-year period between 2006 and 2019, the province took back $335 million of the Children's Special Allowance (CSA) - a monthly federal benefit for children in care.

Provincial lawyer Jim Koch told the court the CFS agencies still received the CSA dollars, though their provincial funding was lowered by an amount equal to the benefit.

"As Manitoba is the sole funder… of provincially funded children, Manitoba took the position that it is entitled to offset its maintenance expenditures by the CSA amount," he said.

The court heard previously that federally funded children in care – those who are Indigenous with a parent living on reserve – received the CSA benefit, while provincially funded children did not.

"Manitoba can't control what Canada does. Canada has chosen to adopt Manitoba's guidelines and then differ them in a significant way in terms of how it treats CSA," Koch said.

"Canada's conduct in that regard doesn't necessarily mean that therefore Manitoba's conduct is discriminatory."

Lawyers for the CFS agencies previously accused the province of using the Budget Implementation and Tax Statutes Amendment Act (BITSA) to retroactively legalize the claw back, and block any legal challenges.

Provincial lawyer Denis Guénette argued BITSA is within the province's ability to legislate.

"We submit it may be unusual, it may appear some people may use the word draconian. But those are policy decisions – legislative policy decisions," he said.

Koch said BITSA created a deemed debt – referred to in the legislation as an overpayment - from the CFS agencies that refused to remit the CSA money – though he said children in care were never targeted.

"The deemed overpayments are targeted towards the agencies. They are not targeted towards caregivers or foster parents, or any other organization," he said.

He added the province recognizes that agencies could have done more if they had received the CSA dollars, but said it is the legislature's job to balance competing interests when it comes to the provincial purse.

The trial is set to continue on Friday.