The Liberal government led by Justin Trudeau is challenging a landmark human rights ruling to compensate apprehended First Nations children harmed by the on-reserve child welfare system and under-funded child and family services.

The Attorney General of Canada filed with the Federal Court today an application for a judicial review and for a stay of the ruling — just two weeks before the federal election and days before the Oct. 7 deadline for filing an appeal.

The Canadian Human Rights Tribunal ordered the federal government on Sept. 6 to pay $40,000 — the maximum allowed under the Canadian Human Rights Act — to each child taken from homes and communities under the on-reserve child welfare system from Jan. 1, 2006, to a date to be determined by the tribunal.

The ruling also directed Ottawa to compensate some of the parents and grandparents of children who were apprehended.

The decision could leave the federal government on the hook for billions of dollars in compensation.

Trudeau said he is not challenging the tribunal's conclusion that compensation should be awarded.

"We need to compensate those who've been harmed, but the question is how to do that," Trudeau said in Saint-Anaclet, Que., Friday. "We need to have conversations with partners, we need to have conversations with communities, with leaders to make sure we're getting that compensation right. Those are conversations that we cannot have during a writ period."

But that's not what his government's application says.

It calls for an order setting aside the tribunal's decision and dismissing the claim for monetary compensation. In the absence of such an order, the federal government is asking for an order setting aside the tribunal's decision and referring the matter back to the tribunal for review in accordance with directions set by the Federal Court.

Ottawa rejects premise that discrimination is ongoing

The application says Canada acknowledges the finding of systematic discrimination and does not oppose the principle of compensating First Nations individuals affected by a discriminatory funding model — but it argues the compensation ordered by the tribunal to kids, their parents and grandparents is inconsistent with the nature of the complaint and the evidence presented.

In its reasons for finding the tribunal erred, the federal government also takes issue with the determination that discrimination with Canada's funding for child and family services on-reserve and in the Yukon is ongoing.

And it raises concerns with giving the tribunal the jurisdiction to accept compensation payments and establishing new categories of persons who may receive it.

Cindy Blackstock is the executive director of the First Nations Child and Family Caring Society, which filed the original complaint against Ottawa with the Assembly of First Nations in 2007. (CBC)

"They're asking for a full quashing of the tribunal's order," said Cindy Blackstock, the executive director of the First Nations Child and Family Caring Society, which is one of the organizations that brought forward the initial complaint to the tribunal.

"It's really disappointing. It really suggests to me that Canada continues to not accept responsibility for its conduct as resulting in the unnecessary family separations of First Nations children in levels far higher than at residential schools and, in some cases, the deaths of children."

Feds say they need more time

Trudeau said the tribunal's decision, which was handed down shortly before the election kicked off, called for the completion of a plan for compensation by Dec. 10. He said the current election campaign renders that timetable unrealistic, given the need to hold discussions with the provinces, territories and indigenous communities.

The tribunal ordered Ottawa to enter discussions with the First Nations Family Caring Society and the Assembly of First Nations — which filed the initial human rights complaint in 2007 — to determine the best independent process to distribute the compensation and decide who qualifies.

In a statement released by his office, Indigenous Services Minister Seamus O'Regan said the government agrees affected individuals should be compensated — but it wants time to "address important questions and considerations such as who is to be compensated and the role of the Tribunal."

"In order to give us both clarity on the ruling and time to have these conversations with our partners, which are not possible during an election, we are seeking a judicial review and stay," says the statement.

National Chief of the Assembly of First Nations Perry Bellegarde calls the Trudeau government's move extremely disappointing. (Canadian Press/Stephen MacGillivray)

Conservative Leader Andrew Scheer said on Thursday that he would seek a judicial review if he was prime minister.

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

NDP and Greens would offer full compensation

Scheer has not said specifically what a Conservative government would do with this file if it forms government after Oct. 21.

NDP Leader Jagmeet Singh and Green Party Leader Elizabeth May have both said they would offer compensation at the level ordered by the tribunal.

Singh characterized the Trudeau government's action today as a moral failure.

"I want to call out Mr. Trudeau and his government for making the wrong decision today," Singh said.

"It's clear there are two Mr. Trudeaus: one that talks about the importance of Indigenous relationships and the other that takes Indigenous kids to court."

Perry Bellegarde, national chief of the Assembly of First Nations, is calling on every party leader to commit to honouring the ruling, and said he's deeply disappointed by today's move from the Liberals.

"This is beyond unacceptable," Bellegarde said in a statement.

"To appeal this CHRT ruling, which was meant to provide a measure of justice for First Nations children in care, is hurtful and unjust."

Some estimates place the number of potentially affected children at about 50,000, with the largest numbers in the Prairies and British Columbia. The ruling also covers First Nation children in the Yukon territory.

Effect on the election

If the federal government needed more time, it could have gone to the tribunal or the Federal Court to ask for an extension, says one expert.

"Make no mistake about it," said Mary Ellen Turpel-Lafond, a lawyer and former child and youth advocate for British Columbia.

"This wasn't about creating space for discussions. This was seeking to quash the decision."

The federal government could have been negotiated compensation with victims of discrimination as far back as 2016, according to Turpel-Lafond.

She wants the party that forms the next government to work out a new path for First Nation children and families.

"It's a difficult day to see this kind of a stand taken by the Government of Canada," Turpel-Laford said. "The better move in the spirit of reconciliation would've been to sit down with the parties and work on how to go forward."

Liberal Leader Justin Trudeau waves to supporters as he boards his campaign bus in Richmond Hill, Ont., on Oct. 1. (Ryan Remiorz/The Canadian Press)

Trudeau benefited from a big turnout by Indigenous voters in the 2015 election, and he made reconciliation a top priority.

"When he came into power, honestly, I thought, 'wow, we're finally going to some justice for these kids and we won't have to fight anymore,'" Blackstock said.

"But sadly that's not been the case."

Recent surveys, including a poll conducted on behalf of CBC News before the fresh court challenge, indicate the Liberals may have lost a lot of that support.

Blackstock said voters should consider where all political parties stand on the ruling when they head to the ballot box.

"I find Canadians really are wanting to see First Nation children being treated fairly and justly," Blackstock said.

"I think they're [Canadians] way out in front of the political parties in many ways on this."