The Catholic Church in Canada is worth billions, a Globe investigation shows. Why are its reparations for residential schools so small?

The Catholic Church in Canada has billions of dollars in assets across the country, a Globe and Mail investigation has found, suggesting it has ample means to help in reparations for Indigenous communities and reconciliation efforts to address the legacy of residential schools and the abuse that thousands of children suffered there.

To investigate its wealth, The Globe and Mail procured tax filings for thousands of Catholic Church organizations from the Canada Revenue Agency, and worked with the research organization Charity Intelligence Canada to arrive at an overall financial picture for the Roman Catholic Church in Canada.

The calculation reveals the vast combined assets of Catholic organizations in the country. In all, 3,446 registered Catholic Church charities – mostly dioceses and parishes – received a total of $886-million in donations in 2019, making them combined the largest charitable organization in the country. All told, 2019 net assets – the sum of cash, investments, property and other holdings, after accounting for liabilities such as debts and loans – are valued at a minimum of $4.1-billion. (The number does not account for the assets of Catholic organizations such as monasteries.)

“These are staggering numbers,” says Kate Bahen, managing director of Charity Intelligence, a registered charity that provides analysis and ratings on the finances and transparency of Canada’s charity sector.

The Catholic Church’s share of a national residential schools settlement reached in 2006, meant to go toward healing and reconciliation efforts, amounted to $29-million in cash, $25-million in church in-kind services, and $25-million from a fundraising campaign. That campaign raised just $3.7-million.

According to Ms. Bahen, donations to the Catholic Church in recent years have been so substantial that about one of every $20 in charitable giving each year goes to Roman Catholic charities.

The Catholic Church has a decentralized structure in Canada, with each diocese operating as an autonomous entity over which a diocesan bishop has authority. As such, it has said that responses on the residential school issue are best left to the local level. The bishops are members of the Canadian Conference of Catholic Bishops, which is the national assembly of bishops, although they are not accountable to the CCCB.

Lawyers representing the church have long cited a lack of funds when it comes to compensation related to residential school survivors. In 2014, the federal government took legal action against the dozens of Catholic organizations that ran the schools, saying they still had outstanding financial obligations at a time when the other churches that ran the schools – United, Anglican and Presbyterian – had met their obligations. A lawyer for various Catholic entities told The Globe in 2016 that many of them were near bankruptcy.

The Catholic Church is facing renewed scrutiny over its role in running a majority of the country’s residential schools, which separated Indigenous children from their families in a system designed to strip them of their language and culture. Discoveries of more than 1,200 probable unmarked graves containing human remains at or near several former residential school sites in Canada over the past few months have sparked outrage and grief. The findings rekindled a discussion on reparations, and what the Catholic Church, which ran most of the schools, could do to make amends.

Along with analyzing the church’s finances, The Globe spoke with more than two dozen experts, including lawyers, scholars, bishops, Indigenous leaders, analysts and residential school survivors, combed through court documents and reports to get a sense of how past settlement deals and court challenges played out, and scrutinized reparation efforts in other countries.

Many Indigenous leaders and members of the Catholic community want a more significant response from the church after the $25-million fundraising campaign came up short. They say they would like to see more substantive funding that could go toward scholarships, healing, language and cultural programs, and investigations into the deaths of children at the schools.

“The waypoint for meaningful reconciliation is to address reparations, reconstruction funding and redress,” said Mary Ellen Turpel-Lafond, a law professor and academic director of the University of British Columbia-based Indian Residential School History and Dialogue Centre. For example, “just the cost of addressing unmarked burials and the investigation of those sites will involve millions of dollars that First Nations communities do not have, and should not be expected to raise to investigate their own genocide.”

Chief Bobby Cameron of the Federation of Sovereign Indigenous Nations in Saskatchewan is calling for a swift response from the Catholic Church to address the intergenerational trauma of residential schools.

“We would like to see immediate action, whether they take it out of their own pockets, or whatever it may be. If the will is there, and the sincerity is there, and the heart is there from the Catholic Church in Canada, they will find a way,” he said.

Given the scale of the harms, he added, a response should be far more than the original $25-million of the fundraising campaign.

“I would say in excess of $500-million. Because there are a lot of survivors and descendants – there are hundreds of thousands of people affected by this. There’s a lot of healing and initiatives [needed] to help our First Nations move forward.”

Canada’s residential schools operated for more than a century, with at least 150,000 First Nations, Métis and Inuit children torn from their homes and forced to attend; many were forbidden to speak their language or practice their culture.

The Truth and Reconciliation Commission (TRC) called it a policy of cultural genocide. The last school closed only a few decades ago, in 1996, the TRC said.

The National Centre for Truth and Reconciliation has documented more than 4,100 children’s deaths at residential schools – many from disease, neglect, malnutrition and abuse – and estimates thousands more died.

By the early 1900s, death rates among children were so high that some officials in the federal government and the Protestant churches wanted to have day schools instead. The plan “foundered for lack of Roman Catholic support,” the commission’s 2015 report said.

Catholic entities ran about 60 per cent of the schools, which were mostly funded by the federal government. The church has faced mounting criticism over its role.

In addition to their failure to raise their share of funds for healing programs, the Catholic entities have also come under fire for not sharing historical records that are crucial to learning the identities of the children who died and their cause of death, nor has the Pope issued a formal, public apology.

The federal government has paid $3.2-billion in individual settlements, and divided an additional $1.9-billion among all survivors as part of the settlement reached in 2006. In a side deal, Catholic entities agreed to three financial obligations: $29-million in cash payments; $25-million worth of “in-kind” services; and to make their best efforts to raise the $25-million for healing projects. Together, the three obligations were “a sweetheart deal for the Catholic Church,” said London, Ont., lawyer Rob Talach, who has represented survivors in clergy abuse lawsuits.

The fundraising campaign took in $3.7-million, just 15 per cent of its goal.

In a 2014 court case in Saskatchewan, federal government lawyers alleged Catholic officials had improperly redirected funds meant for residential school survivors toward legal and administrative fees, The Globe reported last week. After more than a year in court, the judge released the Catholic entities from their remaining settlement obligations.

Some bishops have vowed to restart the fundraising campaign and work toward the $25-million. The Globe asked six bishops for comment. Five were unavailable or didn’t respond. Bishop Thomas Dowd of Sault Ste. Marie, Ont., said he is in favour of a national campaign. The Canadian Conference of Catholic Bishops declined a request to interview its president, Archbishop Richard Gagnon, saying he is unavailable. In an e-mailed response, Archbishop Gagnon did not directly answer questions on past fundraising or whether the church would consider selling assets or allocating permanent funding for healing and reconciliation programs for Indigenous peoples.

In 2019, the most recent year for which data are available, church entities’ revenue – their combined donations, government funding, investment returns and other income sources – amounted to $1.52-billion. That year, they also declared a surplus, or profit, of $110-million.

Only 138 Canadian companies on the Toronto Stock Exchange reported more than the Catholic Church’s revenue in 2019, according to S&P Global Market Intelligence. The church entities’ declared revenue to the Canada Revenue Agency puts them in the company of household names such as Cineplex Inc. and Corus Entertainment Inc., which brought in $1.67-billion and $1.69-billion respectively.

Yet despite the church’s wealth, the figures calculated by Charity Intelligence are still “absolutely” a conservative count, Ms. Bahen said.

They exclude the finances of monasteries and nunneries. They also exclude charities that don’t raise a lot of money or have much property, which aren’t required to submit as detailed a tax filing to the Canada Revenue Agency.

Charity Intelligence’s financial analysis reveals much of the Catholic Church’s assets are locked up in real estate. Land and property holdings alone accounted for $3.3-billion in assets in 2019. But, Ms. Bahen said that figure is also “significantly understated.”

For example, several organizations declare the combined value of their properties to the CRA as $1.

The Archdiocese of Toronto for years has declared $2 in property assets in its charity filings, even for new buildings. But its 2020 audited financial statements, which are available upon request from the CRA, show nearly $940-million in property.

Declaring the value of all its property, including newer buildings, at $2 contravenes accounting standards, according to the archdiocese’s outside auditor – a practice Ms. Bahen said she had never seen before. A note in the audited statements explains that this is done because the archdiocese expects the properties – from parish churches and offices to St. Michael’s Cathedral Basilica – to be used indefinitely.

Neil MacCarthy, a spokesperson for the Archdiocese of Toronto, said the organization stands by its accounting choices. “As stewards of the funds entrusted to the archdiocese by parishioners,” he wrote in an e-mail, “our goal is to sustain the properties that have been funded and developed by the local Catholic community over the past two centuries for their intended use – to gather for worship and offer charitable outreach to the community at large.”

Despite the way many church properties are declared to the CRA, some have netted large sums when sold.

In 2004, the Sisters of Charity of Montreal, known as the Grey Nuns, sold their motherhouse to Concordia University for $18-million. The Archdiocese of Toronto’s 2018 audited financial statements noted it had struck a deal to sell one parish’s real estate to a developer for a minimum of $44-million.

As part of his litigation work, Mr. Talach, the London lawyer, has sometimes examined the books of Catholic organizations across Canada, and said he has been surprised by their wealth – “especially in real estate holdings.”

During one case, Mr. Talach obtained audited financial statements for the Diocese of London, in Ontario. Those statements, which were made public as part of the court proceedings, showed that in 2002, the organization held $99-million in capital assets, including land and buildings.

The fact that Catholic entities managed to raise only $3.7-million for their $25-million best-efforts campaign is “disgraceful and disingenuous,” he says.

“We’re talking about vast wealth, even at the individual diocese level. To say that across the nation they couldn’t come up with [the money] is insulting to anyone with even basic understanding of the operations and the finances of the Catholic Church in Canada.”

The church has found funds for some priorities. In September, 2016 – the year after the residential school fundraising campaign concluded – St. Michael’s Cathedral Basilica reopened in Toronto after a restoration.

The project took five years – overlapping with the seven-year residential school fundraising campaign. The renovation included 13 new statues, a hand-painted ceiling with gold-leafed stars, a new balcony and a custom-built organ with 4,143 pipes – at a cost of $128-million, more than 30 times what was raised for residential school survivors’ healing programs.

As a Catholic, Lorraine Whitman has been to the Vatican several times to attend midnight mass and reaffirm her faith. Ms. Whitman, a member of Glooscap First Nation in Nova Scotia and president of the Native Women’s Association of Canada, has seen the splendour of the cathedrals, and has wondered why that wealth has not been shared to help those who suffered harms from the church.

“I just feel so sickened to know all of the psychological, physical, emotional abuse and traumatization that our Indigenous children have gone through,” she said. “I have seen those beautiful paintings, I have seen all of their collections, all of their treasures that they have. One painting, if that were sold, do you know how far those dollars would go in the healing of our communities?”

It’s difficult to pinpoint the global wealth of the Catholic Church. At the Vatican, the Sistine Chapel and works by Michelangelo, St. Peter’s Basilica and the art in its museums are considered priceless. Last month, the Vatican revealed for the first time that it owns more than 5,000 properties.

In Canada, frustration is growing in the Catholic community over the response from church leaders on residential schools. Petitions and open letters continue to gain signatures – one calling for churches to compensate communities that lost children at the residential schools has more than 40,000 signatures; another by Catholics calling for the church to offer to pay for reinterment of the children’s bodies has 6,500. Some are calling for a boycott of donations, or that the church’s tax-exempt status be revoked.

“There’s a groundswell within the church, to the leaders, who seem a bit more reluctant than many of the members … to say we must meet our commitments, and I’m hoping that there will be some action on that,” said Mayo Moran, a law professor who is provost and vice-chancellor of Trinity College at the University of Toronto.

The Canadian Conference of Catholic Bishops (CCCB), she says, “really need to show more leadership on this. Invite the Pope to come, get that money together, address the records – those are the things that need to be done.” Instead, she characterizes the response so far from the conference as “reluctant.” The CCCB’s main roles are to assist bishops in joint action and co-ordinate charitable initiatives.

In a June interview, The Globe asked the CCCB’s Archbishop Gagnon about the potential for a national fundraising campaign and whether the church would pledge money. At the time, he said local efforts were more appropriate; he said he couldn’t respond to a question on whether the church would contribute funds through assets or cash holdings.

“A lot of Catholics think that’s inadequate,” said Prof. Moran, who is the former chair of the committee that oversaw the compensation process for survivors under the residential schools settlement agreement. “They want their church to step up and do more. It really doesn’t reflect well on the church, unfortunately … I suspect that people believe that they are protecting the church from liability. But my sense is that it’s really undermining the church’s moral legitimacy.

“This is a failure of leadership,” she said.

When asked about overall finances across Canada, Archbishop Gagnon said in the e-mail that CCCB “does not keep a collection of financial statements” for Canadian Catholic charities. He said bishops from many dioceses have indicated interest in local or regional fundraising campaigns, and that it is “encouraged” by the start of fundraising drives in Toronto, Calgary and Saskatchewan.

The CCCB has distanced itself from the residential school issue. Its website notes that each diocese and religious community is corporately and legally responsible for its own actions. “The Catholic Church as a whole in Canada was not associated with the residential schools, nor was the Canadian Conference of Catholic Bishops.”

Bishop Dowd of Sault St. Marie said he would prefer a national fundraising campaign, as it would be an opportunity to build awareness among parishioners, especially new Canadians, and solidarity, and that this should be an ongoing initiative, not a one-off.

He said a “duck and cover” approach amid growing public outrage is not the best response. “I’m not in favour of press releases that sound like they were written in a corporate laboratory,” he said. “I think we need to express our own broken hearts.”

Other countries are grappling with past atrocities, and churches’ role in them. Australia’s Royal Commission into Institutional Responses to Child Sexual Abuse uncovered decades of horrific abuses by Roman Catholic priests. In 2018, an investigation by The Sydney Morning Herald found the church had grossly underestimated its property values in evidence to the commission, which the Herald said raised questions about whether the church was trying to protect assets and minimize compensation to victims. It identified church-owned properties in the state of Victoria alone at about 7 billion Australian dollars ($6.5-billion).

In the United States, a national discussion is under way over reparation proposals for African Americans. In March, the Jesuits – a religious order of the Roman Catholic Church – pledged to raise US$100-million toward reconciliation efforts, to make amends for its role in the enslavement of Black people. In April, the House Judiciary Committee approved legislation to create a commission that will study reparations to the descendants of slaves.

In Canada, several bishops have issued apologies for residential schools, and some religious orders have offered to share historical documents. The United Church of Canada has a policy that a minimum 10 per cent of the proceeds of all property sales go toward reconciliation initiatives, including a healing fund. It has also set aside money each year for reconciliation programs, and said last month it approved $3-million to help finance investigations of unmarked graves at residential schools.

Cora Voyageur still remembers the number that the nuns assigned to her as a nine-year-old at the Holy Angels Indian Residential School in Fort Chipewyan, Alta.: 21. Her sister was No. 19; her youngest sister was No. 45.

She remembers being called “savage,” and the constant fear of beatings. “There was this underlying feeling of unease and anxiety and the idea that you could get whacked at any time,” she said. “You did not feel safe.”

More than five decades later, the residential school survivor, who is a member of the Athabasca Chipewyan First Nation and a sociology professor at the University of Calgary, wonders why substantive responses from Catholic Church leaders are still so tepid, especially given that Catholic entities ran most of the schools. Funding from the church toward, for example, better access to post-secondary education, could have a transformative impact on young Indigenous people, she said.

Funding could also go toward identifying the children in the unmarked graves, and determining how they died. Some entities have recently promised to share documents – after years of requests – but there are still costs associated with collecting and digitizing them, said Raymond Frogner, head of archives at the National Centre for Truth and Reconciliation.

Several entities – such as the Missionary Oblates of Mary Immaculate, a religious order that ran many of the schools – have said they don’t have the funds to do this, and thus far the church has not offered to cover costs. “The Catholic Church itself could surely find some funds to do this of all things, right? If you really want to be accountable, now’s your chance to actually pay for the costs of making these records available,” Mr. Frogner said, adding that about $100,000 would be needed.

Several of the Truth and Reconciliation Commission’s 94 calls to action ask churches to step up. No. 61 says they should work with survivors and Indigenous groups to establish permanent funding for initiatives such as projects for healing, language revitalization and education, and for Indigenous youth to explore their spirituality and self-determination.

Funding for healing programs could also revive a once-powerful Indigenous organization. The Aboriginal Healing Foundation, which existed from 1998 to 2014, was a national Indigenous-led organization dedicated to community-building and healing. The foundation disbursed about $610-million to more than 1,500 programs. It was shut down late in 2014, when the Harper government let its funding lapse.

The foundation was to receive most of the $29-million cash transfer that was among the Catholic Church’s commitments under the residential schools settlement. But the money was hard won, according to Mike DeGagné, president of the national Indigenous charity Indspire and former executive director of the Aboriginal Healing Foundation. When the time came for the Catholic Church to give the foundation the funding, “the phone went absolutely silent,” he said. The foundation had to plead with the church to release its money.

To Mr. DeGagné, organizations such as the foundation are sorely needed today. “On the day that the Aboriginal Healing Foundation closed and all those projects were forced to close down, there were almost 1,000 employees within those programs in communities,” Mr. DeGagné said. “That’s 1,000 employees that were accountants, HR people, directors, counsellors, elders and people who were doing something or being trained.

“What I’d like to see is institution building,” he said. “Indigenous organizations that can make real change.”

Cora Voyageur, the residential school survivor in Alberta, wants to see fulfilling change, and a bold, new direction. “Let’s build a new relationship,” she said. “One based on respect, and equality.”

With a report from David Milstead in Toronto

If you have further information about this story, please e-mail tips@globeandmail.com.Meanwhile, residential-school survivors say it's time for the church to take broader responsibility for its role in past abuses.

Published on August 7, 2021