FIRST READING: The unprecedented expansion of federal Indigenous spending

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TOP STORY

As Canada limps into a potentially multi-billion-dollar crisis involving outstanding Aboriginal land claims, it comes just as federal spending on “Indigenous priorities” has already reached all-time highs.

As recently as 2024, the federal government was spending twice as much on Indigenous priorities as it was on the military. In fact, an explosion in Indigenous spending is largely responsible for the unexpected 2024 budget deficit that led to the ouster of then prime minister Justin Trudeau.

When the Liberals first took power in 2015, their own estimates showed that total federal government spending on what they deemed “Indigenous priorities” was about $11 billion.

Within 10 years, this had nearly tripled. By 2024, internal Department of Finance estimates were showing that planned “investments in Indigenous Priorities” were set to hit $32 billion. This was the number cited in a recent story by David Frum in The Atlantic critiquing Canadian reconciliation policy as an “unresisted political revolution.”

But the true figure is even higher, with Indigenous expenditures recently surging to more than double that of the Department of Defence.

A breakdown by the website Canada Spends notes that in fiscal year 2024, 12.25 per cent of all federal monies were spent by one of two federal agencies: Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada.

This was compared to just 6.71 per cent spent on the military.

In 2023/2024, Crown-Indigenous Relations and Northern Affairs Canada reported “actual expenditures” of $16.3 billion. Indigenous Services Canada, in turn, posted “actual expenditures” of $46.5 billion. Together, it came to $62.8 billion for the year.

In the most recent census, 1.8 million Canadians self-identified as Indigenous, although this represented a range of everyone from Inuit to on-reserve First Nations to Canadians of Métis heritage.

If $62.8 billion was to be divided equally among the 1.8 million, however, it would come to about $35,000 per person.

According to Canada Spends, Canada cumulatively spent a total of $243.8 billion on Indigenous priorities between 2014 and 2024, with much of that being due to the expansion of Indigenous spending under the Liberal government.

For context, if Canada had kept to the spending levels of 2014, even when adjusting for inflation the decade-long total would have come to about $145 billion.

The difference of $99 billion is roughly equivalent to the annual GDP of Manitoba. Put another way, it would take Manitoba’s entire annual economic activity just to cover the increase in federal Indigenous spending since 2014.

The massive expansion of federal spending on Indigenous priorities hasn’t been a secret. In fact, it’s been an explicit line item in multiple budgetary and policy documents. The last budget tabled under Trudeau, for instance, wrote that “spending on Indigenous priorities has increased significantly.”

All the extra spending has been coming from two basic directions.

First, a generalized increase in all manner of grants and transfer payments, as well as a new latticework of federal programs on everything from Indigenous languages to mental health supports to shellfish harvesting and funding to locate burial sites at former residential schools.

For example, the National Inquiry into Missing and Murdered Indigenous Women and Girls was alone budgeted at $2.2 billion over five years.

Meanwhile, the Liberal campaign promise to lift on-reserve boil-water advisories had cost $6.3 billion as of 2024. While 150 advisories have been lifted over the length of the program, 39 remain in effect.

The second major driver of heightened Indigenous spending has been an unprecedented surge in land claims and other settlements.

The largest of these was a court-ordered $23.34 billion settlement agreed in 2023 to compensate decades of underfunded on-reserve child welfare services.

The Liberal government has also been very active in settling land claims and otherwise “providing compensation for past harms of colonialism.”

Between just 2020 and 2025, Ottawa paid out $15.1 billion to resolve 229 of what it calls “specific claims.” Essentially, First Nations grievances against Ottawa for not meeting treaty obligations, often in relation to the administration of land.

The most recent, struck just before Christmas, saw $713.8 million paid to Saskatchewan’s James Smith Cree Nation — along with two other bands — to “address several past wrongs” including the misallocation of reserve land.

In late 2024, Ottawa’s Fall Economic Update would post a surprise federal deficit of $62 billion — way higher than the $40 billion that had been originally forecast. This overage precipitated the resignation of deputy prime minister Chrystia Freeland, and, ultimately, the caucus revolt that led to the early 2025 resignation of Trudeau.

According to the update’s own text, the unexpected deficit was mostly due to “significant unexpected expenses related to Indigenous contingent liabilities.” The total for those “significant unexpected expenses” came to $16.4 billion, roughly three quarters of the unexpected overrun.

While much of the eight and nine-figure compensation agreements of recent years were struck with minimal public notice, the issue of Indigenous land claims was recently thrust to the front of public awareness with the B.C. Supreme Court ruling in Cowichan Tribes v. Canada.

The decision ceded a large chunk of privately owned land in Richmond, B.C., to the Cowichan Tribes First Nation.

Justice Barbara Young’s declaration that Aboriginal title superceded private property rights also opened the door to similar rulings being made across Canada, potentially affecting billions of dollars of private real estate.

Although Cowichan Tribes have said they have no interest in seizing the properties of affected homeowners, in an October statement they said they were seeking “reconciliation of the Crown granted fee simple interests.”

B.C. Premier David Eby has said he intends to appeal the ruling, and in December offered $150 million in loan guarantees to affected homeowners.

IN OTHER NEWS

In a year-end interview, Prime Minister Mark Carney claimed that the two Conservatives who crossed the floor into his caucus in the final months of 2025 did so entirely of their own volition and that his party had done nothing to convince them. “They came to us,” he told Global News.

The claim was dubious as soon as he said it, if only for the fact that one of those floor-crossers, Chris D’Entremont, was already on record as saying that the Liberals had tried for years to lure him over to their benches.

And now the claim is even more dubious given that an NDPer and a Conservative have now revealed failed Liberal attempts to goad them into ditching their own parties.

Lori Idlout, the NDP MP for Nunavut, told CBC this week that she’d been approached by Liberal Party representatives about a potential floor-crossing. And on Monday, Scott Anderson, the Conservative MP for the B.C. riding of Vernon—Lake Country—Monashee, revealed the Liberals had tried the same with him. “It’ll be a cold day in Hell before I even consider betraying my constituents,” he wrote in a Facebook post.

First Reading is a Canadian politics newsletter curated by the National Post’s own Tristin Hopper. To get an early version sent directly to your inbox, sign up here.