A $3.05 billion class action lawsuit has been filed against the federal government for discriminating against First Nations children by "systematically" underfunding on-reserve child welfare services.

The lawsuit, which still needs to be certified to proceed as a class action, was filed Monday with the Federal Court of Canada in Toronto and Montreal.

The lawsuit was filed on behalf of First Nations children affected by on-reserve child welfare services between April 1, 1991, and March 1, 2019.

The two law firms involved in the action, Toronto firm Sotos LLP and Montreal firm Kugler Kandestin LLP, said they could not comment publicly on the court action. The firms said they had given the federal government until 5 p.m. Thursday to respond to a related letter and had committed to not speak with media until after the deadline passed.

The statement of claim alleges that Ottawa knew for years about "severe inadequacies" in its on-reserve First Nations child welfare funding formulas, policies and practices but did nothing.

"The removal of a child from their home causes severe and, in some cases, permanent trauma," said the statement of claim.

None of the allegations in the statement of claim have been proven in court.

Funding incentive to remove children, alleges lawsuit

The statement of claim said Ottawa is directly responsible for the high number of First Nations children in foster care because it underfunded prevention services while tying dollars to the number of First Nations children that were put into care.

"The funding incentive to remove First Nations children from their homes accounts for the staggering number of First Nations children in state care," said the statement of claim.

"There are approximately three times the numbers of First Nations children in state care now than there were in residential schools at their apex in the 1940s."

The statement of claim also alleges that Ottawa failed to follow Jordan's Principle, a legal requirement to place the needs of a First Nations child ahead of jurisdictional disputes over funding for health care and other public services.

Jordan's Principle was named after Jordan River Anderson, a five year-old boy with a complex genetic disorder who died in 2005 while Ottawa and Manitoba argued over who would pay for the child's care.

The lawsuit is seeking compensation for "tens of thousands" of First Nations children "who suffered or died" while waiting for help from services that Ottawa was "legally required to provide" between April 1, 1991 and March 1, 2019.

Many of the lawsuit's allegations against Ottawa are based on the findings of the Canadian Human Rights Tribunal's 2016 ruling which said Ottawa discriminated against First Nations children by underfunding child welfare services on-reserve.

Child welfare bill tabled

Indigenous Services Minister Seamus O'Regan's office said it was aware of the filing and officials are reviewing it.

Since the tribunal ruling, Ottawa has moved to overhaul the First Nations child welfare system and increase funding. In 2018-2019, First Nations Child and Family Services program funding is more than $1.1 billion, according to government data.

Metis National Council Clement Chartier hugs Jane Philpott, then-president of the Treasury Board and Minister of Digital Government, during a news conference on the introduction of Bill C-92, An Act respecting First Nations, Inuit and Métis children, youth and families in Ottawa on Feb. 28. Indigenous Services Minister, Seamus O'Regan, back right, and Natan Obed, president of Inuit Tapiriit Kanatami, look on. (Sean Kilpatrick/Canadian Press)

The Liberal government tabled an Indigenous child welfare bill, Bill C-92, last week which set out how child welfare agencies across the country should handle cases involving Indigenous children.

The bill, which doesn't have much time left on the Parliamentary calendar to pass, also aims to enable Indigenous jurisdiction over child welfare — though opinions are split on whether it truly enables jurisdiction.

Ottawa also says it has been working to implement Jordan's Principle. Between July 2016 and January 2019, Indigenous Services approved 214,000 requests under Jordan's Principle, according to the department's data.

Shuffled between 14 foster homes

The lead plaintiff, Xavier Moushoom, is an Algonquin man from the Lac Simon Anishnabe Nation, Que., who was shuffled through 14 foster homes between the ages of nine and 18.

"By the time he became an adult, Mr. Moushoom had lost his roots, his culture and his language," said the statement of claim.

"Mr. Moushoom suffered from anxiety attacks and developed substance abuse problems he would eventually overcome through his own determination with the help of his community."

Moushoom was born in 1987 in Lac Simon and both his parents attended residential school, said the filing. From 1987 to 1995, Moushoom lived on-reserve with his mother — who battled alcohol abuse — and his brother.

A class action suit was filed Monday against Ottawa over First Nations child welfare services on-reserve. (CBC News)

Moushoom's father also battled with alcohol abuse and sought treatment in Montreal.

While a young child, Moushoom learned his Algonquin language and spoke fluently with his grandmother, said the document.

In 1996, Moushoom and his brother were apprehended and put into separate foster homes.

"To this day, he does not know the reasons for his apprehension," said the statement of claim.

Moushoom was rarely granted access to his mother and family while he was in care and eventually lost his Algonquin language along with cultural ties to his home community, said the filing.

'Stop the harmful practices'

Leading children's advocate Cindy Blackstock, who heads the First Nations Child and Family Caring Society, said this is the third major class action Ottawa has faced over its treatment of First Nations children spanning generations.

Ottawa has already settled with residential school and Sixties Scoop survivors.

"It is time for Canada to stop the harmful practices toward First Nations children by settling this class action," said Blackstock.

Blackstock said Ottawa also needs to finally fully comply with the human rights tribunal ruling, end inequalities to First Nations public services and make required amendments to Bill C-92.

Blackstock said Bill C-92 needs to clearly affirm First Nations jurisdiction and include legally required funding for First Nations child welfare.