Ottawa moves to resolve crisis: (Herb) Gray says bankrupt churches not desirable.

Prime Minister Jean Chretien wants to solve the Native residential schools crisis in a way that does not involve bankrupting churches, says Deputy Prime Minister Herb Gray.

Mr. Chretien has directed Mr. Gray to discuss with church leaders possible solutions to the crisis -- the most positive sign yet for the churches since lawsuits began to be filed, the bulk of them in the past four years.

"The Prime Minister considers it important to work actively to try to resolve the matter ... It is not the intent or desire of the federal government to force church organizations into bankruptcy," said Mr. Gray in an interview with the Anglican Journal. "We do recognize the role the churches play as social institutions in our society," he added.

Mr. Gray is one of Canada's senior politicians and a Liberal Party elder statesman. Since first elected to the Commons in 1962, he has held about half a dozen Cabinet portfolios and served briefly as Leader of the Opposition after the resignation of John Turner.

Archdeacon Jim Boyles, general secretary of the Anglican Church of Canada, along with representatives of the Roman Catholic, United, and Presbyterian churches, held two meetings with Mr. Gray this fall.

"I am hopeful," Mr. Boyles said in an interview.

Participants are discussing whether Justice Department officials will stop bringing churches in as defendants in suits filed by former students alleging abuse at the schools, but there has been "no commitment on that regard," said Brian Thorpe, senior adviser with the residential schools steering committee of the United Church of Canada.

Mr. Gray said that in about three-quarters of the cases filed, churches were named as defendants by the plaintiffs, but churches have been saying they haven't been named in most cases but have been joined to civil suits as third parties by the government.

Mr. Boyles has said that Ottawa, not Native litigants, is forcing General Synod into bankruptcy.

"We are focusing on finding a solution outside litigation ... there are a whole lot of things being discussed," said Mr. Gray in the interview with the Journal. He declined to give specifics.

However, Justice Department officials in British Columbia have made a proposal to the Diocese of Cariboo, which has said it is nearly out of operating resources due to lawsuits and a judgment over proven sexual abuse at a residential school in Lytton. At a recent diocesan synod, Cariboo directed its bishop and executive council to wrap up the diocese's affairs in the next year.

The Lytton judgment last year found the Anglican church 60 per cent liable and the government 40 per cent liable in that case and ordered the defendants to pay damages. The precise amount of damages has not been made public.

"The government is saying if you contribute $500,000, we'll pay the rest of your share, or we'll get the rest from General Synod," said Mr. Boyles. It was the first indication that the government is considering capping the church's liability in residential school cases.

General Synod has also said it will run out of funds next year due to the cost of legal defence. This year, it cut both staff and its operating expenses in order to balance its 2000 budget.

Also under discussion with the federal government are alternative dispute resolution projects, which seek to resolve cases without resorting to a formal court process. The government wants churches to share the cost of ADR equally, but the churches want the government to bear a greater share of the cost.

Mr. Boyles also reiterated that the Anglican church wants "justice for people whose lives have been damaged," and Native leaders are expressing concern about the talks with Mr. Gray.

Matthew Coon Come, the recently elected Chief of the Assembly of First Nations, requested a meeting with Mr. Gray, Mr. Boyles told a recent meeting of the House of Bishops, "and we support that."

He added, "We don't want to repeat the last 100 years of church and government making decisions that are then imposed on aboriginal people."

At the House of Bishops meeting, lawyers for General Synod briefed the bishops on litigation, but that part of the meeting was closed to the public and media.

The election call in mid-October took Mr. Gray away from the talks with the churches, but a third meeting was to be held during the campaign with Scott Clarke, one of Mr. Gray's senior advisers.

Meanwhile, Mr. Boyles said Canadian Anglicans have responded to a General Synod request that they write politicians asking for a quick, humane resolution to the crisis. The letter-writing campaign has had "an effect in raising awareness," he said.

He also noted that many clergy around the country have met with their local members of Parliament to alert them to the crisis.

On the other hand, General Synod took the view in the recent federal election campaign that church members should not raise residential schools issues at all-candidates meetings. A memo by Mr. Boyles said no useful purpose would be served by turning residential schools into a partisan issue.

About 6,000 plaintiffs are now involved in lawsuits against the government and four churches over sexual and physical abuse suffered by Native students in a national system of boarding schools that existed from the mid-19th century to the mid-twentieth century.

Some suits also allege cultural abuse, saying that Natives were cut off from their culture and forced to conform to white society.