Ottawa, churches discussing financial terms: government may assume legal costs.

The residential schools crisis has moved closer to resolution with reports that the federal government is considering assuming at least $2 billion in legal costs and that Ottawa is proposing the Anglican Church of Canada pay $95 million over 10 to 15 years.

The figures are "highly speculative," warned Archdeacon Jim Boyles, general secretary of the national church. "The conversations with the government cover a wide range of possibilities," he said in an interview.

However, the reports, which first appeared in the National Post newspaper, were the first indication that negotiations between church and government representatives, which started last fall, are moving toward financial terms.

Deputy Prime Minister Herb Gray and his staff have held discussions with leaders of the Roman Catholic, Anglican, United and Presbyterian churches.

Mr. Gray, in an interview, said the government has not made a formal offer to the churches and the $2 billion figure is a "hypothetical working number, based on assumptions, if the matter was left to the courts."

In an effort to gauge potential liability, the government is estimating that 12 per cent to 15 per cent of the 105,000 surviving students of residential schools are likely to file sexual or physical abuse lawsuits. Using the average sex abuse damage award of about $140,000, the total liability tops $2 billion.

The national office of the Anglican church, called General Synod, has said it is heading toward bankruptcy due to the cost of defending itself against lawsuits brought by those who claim they were abused in government-owned, church-run boarding schools. The schools operated across Canada from the mid-19th century until the 1990s. The Anglican church is named in about 1,600 claims out of a total of about 7,000.

Archdeacon Boyles said he welcomes the direction the talks are taking. "I think if the government is prepared to move in this direction, it would be a good thing for everyone, resulting in faster settlements and allowing the church to do healing work."

Mr. Gray stressed that the protest still has a long way to go, denying a National Post estimate that he would have a proposal to take to Cabinet by the end of February. "Absolutely not," he said. "There are so many elements, such as having the claimants agree to some overall approach." Mr. Gray recently met with an influential aboriginal leader, Matthew Coon Come, national chief of the Assembly of First Nations (AFN). However, AFN doesn't represent claimants and the meeting was in the nature of a briefing, said Mr. Gray. Government officials have begun meeting with claimants' groups and Mr. Gray said he hopes to have another meeting with Mr. Coon Come, but said no date has been set.

The reported proposal would see the government assume the churches' legal defense costs while the churches would contribute to settlements and to counselling.

The Anglican church ran 28 of the 130 residential schools and the National Post story said the government is estimating that Anglican liability could rise to about $478 million. The government would propose covering 80 per cent of that liability, with the church paying 20 per cent, or $95 million.

Church officials would not confirm the figures under discussion. Some church leaders note that even $95 million, to be paid out over 10 to 15 years, is a huge amount of money.

Could the Anglican church raise that much money, especially since it depends upon voluntary contributions? "The figures are astronomical beyond my imagination. The only commitment the church could make (to the government) is to do its best," said Archbishop Tom Morgan, metropolitan of the ecclesiastical province of Rupert's Land and bishop of the diocese of Saskatoon.

Archbishop Morgan attended a briefing of western bishops held in Edmonton by Archdeacon Boyles last January. "My guess is this (the media reports) is a trial balloon (to gauge public reaction)," he added.

Many Anglicans have expressed reluctance, in letters to the Journal and to other church departments, to contribute to legal costs and settlements, but have also expressed concern for victims of abuse at Anglican-run schools.

"If we get to that stage, we would have to undertake to do the best we could to raise funds," Archdeacon Boyles said. "I believe Anglicans would respond generously to healing and reconciliation work with aboriginal people."