The government of Justin Trudeau will appeal a court ruling that found Indigenous youth were “wilfully and recklessly” harmed under national child welfare policies, in a move that could block billions of dollars in compensation.

In September, the Canadian human rights tribunal found that the federal government’s on-reserve child welfare system unfairly discriminated against Indigenous youth, severely underfunding their care.

The tribunal ruled the federal government was required to pay compensation worth $40,000 CAD to each child removed from his or her home – the maximum allowable under the country’s human rights act.

“We agree with the tribunal’s finding that there must be compensation for those who were hurt ... But the question is how to do that. We need to have conversations with partners, conversations with leaders and communities to make sure we’re getting that compensation right,” Trudeau told reporters on Friday – adding that such talks could not take place during the current election campaign.

The ruling could impact more than 50,000 Indigenous children.

The tribunal decision has sharply divided candidates vying for a chance to lead the country on 21 October.

Both Jagmeet Singh, the leader of the New Democratic party, and the Green party’s Elizabeth May pledged to honour the ruling – and compensation – if elected. But the Conservative leader, Andrew Scheer, tied with Trudeau in recent polling, told reporters he would appeal the tribunal’s decision.

“This is a far-reaching decision that has major impacts on multiple levels of government,” said. ”It would be appropriate to have a judicial review.”

Trudeau’s move, which comes only days before the deadline to file an appeal, was met with sharp criticism from child welfare advocates.

“It is the federal government’s discriminatory conduct that needs review and reform – not the legal decision that flagged the problem and ordered the discrimination to stop,” Cindy Blackstock, the executive director of the First Nations Child and Family Caring Society, told the CBC. For years, Blackstock has been fiercely critical of the government’s previous refusals to implement decisions from the tribunal.

“Every party leader must commit to honouring this ruling made by Canada’s own Human Rights Tribunal,” tweeted Perry Bellegarde, the national chief of the Assembly of First Nations. “This is about supporting First Nations children and families, and respecting human rights. It is unconscionable that anyone would oppose this.”

The outgoing parliamentarian Romeo Saganash, who previously said that Trudeau “doesn’t give a fuck” about Indigenous rights in the House of Commons, tweeted his frustration.

“I never want to hear one single Liberal pronounce the word Reconciliation, ever again!”