Canadian Churches Face Property Seizures in Suits

Article excerpt

Cariboo diocese told to produce list of paintings, jewelry

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 faring 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 Canada's 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 didn't 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 government's assuming the order's 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 Qu'Appelle 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 didn't 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. …