Canadian churches face property seizures in
suits
By GERRY McCARTHY
Special to the National Catholic
Reporter Toronto
The prospect of mainline Christian churches going bankrupt in
North America seems bizarre to many people. But at least two Catholic dioceses
in the United States have warned in recent years that bankruptcy could be in
the offing, and an Anglican diocese in Canada said it has no choice but to
file.
Already the Cariboo diocese in British Columbia has been ordered
to produce a list of its paintings and jewelry. Diocesan officials said liquid
assets are gone and the diocese is facing government seizure of all its
properties, including 73 graveyards, according to recent news reports.
As in the U.S. dioceses of Santa Fe, N.M., and Dallas in recent
years, the financial resources of Canadas four mainstream churches are
under serious threat from lawsuits related to sex abuse claims. In Canada,
thousands of suits have been filed by former Indian boarding school students
claiming sexual, psychological and cultural abuse.
Most of the residential school lawsuits were filed against the
government and didnt name the churches. But the government has drawn the
churches into the process by naming them as third-party defendants.
The Indian boarding schools were owned by the federal government
and operated under contract by the Catholic, Anglican, Presbyterian and United
Churches of Canada until 1969. After that, the schools were run by the
government until the last school closed in 1996.
The schools date to the late 19th century, when the federal
government was looking for ways to carry out its obligations under the
Indian Act to provide education to aboriginal people. The churches
agreed to run a network of about 100 schools. Most were concentrated in the
western provinces of Manitoba, Saskatchewan and British Columbia, though others
were in the Maritimes, Ontario, Quebec and Northern Canada.
The schools operated under an assimilation or
integration policy. Aboriginal students were often forbidden to speak their
native language or learn their traditional arts, dances or religion.
So far, the government is facing some 7,000 lawsuits with
potential liabilities of between 1 to 5 billion in Canadian dollars -- $648
million to $3.2 billion in U.S. currency. The number of lawsuits is expected to
grow to 16,000.
Among other consequences for religious organizations:
- Three provinces of the Missionary Oblates of Mary Immaculate, a
Catholic religious order that ran 57 of the residential schools, are in dire
financial straits as a result of some 2,000 claims against the order, mostly
third-party claims. The Oblates want to hand over to the federal government
most of its property in the province of Manitoba in return for the
governments assuming the orders liability.
- The Catholic Whitehorse diocese in Yukon has averted bankruptcy
but is running on a day-to-day basis, according to Gerry Kelly,
adviser on aboriginal affairs to the Canadian Conference of Catholic Bishops in
Ottawa.
- The Anglican General Synod faces bankruptcy by the summer of
2001.The general synod has paid over $2 million in legal fees since 1999.
- The Anglican QuAppelle diocese in Saskatchewan is
financially threatened.
Other Catholic religious orders that have faced bankruptcy in
Canada include the Christian Brothers, a worldwide teaching order. Although the
Christian Brothers didnt run any residential schools, the order was hit
by 89 criminal charges in the late 1980s and early 1990s related to the
physical and sexual abuse of children in orphanages and schools it operated in
Newfoundland and British Columbia. The order was liquidated under a
Winding-Up and Restructuring Act in 1996 with total claims
estimated at $31 million.
The recent cases in which the government has drawn in churches are
particularly painful for the public because they pit the government against the
churches. The recent demand that the Cariboo diocese turn over a list of its
jewelry prompted a columnist for the Calgary Sun, Paul Johnson, to write that
Prime Minster Jean Chretiens federal government had basically
announced its open season on our nations mainstream
churches.
Doug Tindal, director of information resources for the Anglican
General Synod in Toronto, said the federal government must either seize church
buildings in Cariboo or back off. Theyre properly horrified that
theyre actually going to take over places of worship, he told
NCR.
Tindal admitted the Anglican church has encouraged parishioners to
write to Prime Minister Jean Chretien expressing their concerns about
whats happening in some dioceses. Some letters begin with lines such as,
Your Department of Justice is literally driving my church into
bankruptcy.
With a general election called for Nov. 27, a few political
observers suggested the Chretien government is worried the residential school
lawsuits might become an election issue. When the election was called in late
October, the government held only a slim majority in the House of Commons.
Looking for ways to deal with the growing residential school
crisis, Deputy Prime Minister Herb Gray announced in late October that the
federal government was willing to settle the residential school claims out of
court. Gray explained he was willing to meet with church leaders and
plaintiffs, and discuss the possibility of introducing some kind of system for
national redress.
Jim Flaherty, attorney general and minister for native affairs in
Ontario, said pursuing residential school claims in court doesnt serve
the attempt to heal. Spending millions of dollars on legal fees rather
than on compensating victims seems to be an enormous waste of limited
resources, he explained. If the federal government doesnt
move forward and establish some sort of alternate process for resolution, then
Ill get the other attorneys general of Canada together again for a
meeting on this issue.
But Tony Merchant, a Saskatchewan lawyer whose Merchant Law Group
represents more than half of the residential school plaintiffs in Canada, said
any national redress program must pay compensation to individual victims and
not simply offer money to the wider aboriginal community.
Bishop Jim Cruickshank of Cariboo said he favors a
constructive conversation with the government on the condition that
survivors and victims of the residential schools are properly taken care of in
negotiations.
Cruickshank added that the expected bankruptcy of his diocese has
been painful for him personally. Its heartbreaking, he
explained. These last four years have really been tough. Ive always
spent my life having a vision of dreams for the future, and building things up.
Now Im ending my time as someone helping to dismantle something rather
beautiful.
In the United States, the Catholic Santa Fe diocese in 1996 drew
up bankruptcy papers after reportedly paying out $50 million in sex abuse
claims. Instead of filing, the diocese decided to wipe out the savings of
individual parishes.
Two years later, in Dallas, 11 young men who were awarded $118
million by a jury in a sex abuse trial agreed to settle with the Catholic
diocese for about $30 million after the diocese warned of further litigation
and bankruptcy if efforts were made to seize parish properties. Church
officials said parish and school properties were not owned by the diocese but
were held in trust for parishioners.
A professor of law at the University of Notre Dame, Gerard
Bradley, said its quite possible that a U.S. Catholic diocese
could be forced into bankruptcy. There are good arguments against seizing
churches, he explained. But any kind of favorable treatment of a
diocese facing bankruptcy would raise questions in present law about an
unconstitutional promotion of religion, and a breach of neutrality.
National Catholic Reporter, November 17,
2000
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