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Century-old federal debt not yet repaid to Indigenous community

University refuses to acknowledge responsibility toward Six Nations

Last week, during a panel titled “Indigenous students at McGill: before and beyond graduation” that was held as part of the Indigenous Awareness Week, McGill graduate and Columbia University anthropology professor Audra Simpson spoke about a little-known aspect of McGill’s legacy: its link to a federal debt owed to the Six Nations of the Grand River Indigenous community.

“The common way of narrating the founding of McGill [is as one of] Canada’s most important and illustrious universities that came into being because of this 1811 endowment from this Scottish so-called merchant from Glasgow, James McGill. In other commemorative accounts […] that [detail] the financial problems of the first forty years of McGill, no mention is made of the crucial transfer of funds from the Six Nations of the Grand River in the 1850s that helped to save McGill from bankruptcy […] in fact, helped the university stay open,” Simpson said.

In the mid-1800s, amidst a financial crisis, the pre-Confederation government of the Province of Canada loaned money to McGill. The government funded the loan with money taken from the Six Nations’ Trust Funds, of which the government was the fiduciary trustee. The transfer of money was made without the permission of the communities of the Six Nations.

While McGill paid back this loan and a subsequent loan by 1881 to the federal government, the government never reimbursed the Six Nations’ Trust Funds. This was discovered by Philip Monture, previously the director of the Land Claims Research Office at the Six Nations of the Grand River.

“I was doing research into the history, and found out the government was misusing funds,” Monture told The Daily in an interview. “Using the Indian Affairs’ own records of their trust funds, we were able to trace the transfer of money to finance McGill [when the university was] near bankruptcy.”

After the discovery, Monture began litigation for the government’s accounting with the funds, which, if returned with interest, would now amount to around $1.7 billion.

Acknowledging that the Canadian federal government cannot afford the amount owed to the Six Nations, Monture has attempted since 1989 to form other arrangements to compensate for the federal government’s failure to repay the debt.

“The Crown at the time was acting as our trustees – to do the best for the beneficiaries of our trust – and they failed,” Monture said. “In reality, they were using any revenues that were created from our lands and our resources to finance the country. We were the only bank in town. They were given the power of fiduciary trust, and they were fraudulent.”

“We tried to set up an arrangement with McGill where we could talk and perhaps set up a subsequent arrangement with Six Nations to be able to give [Six Nations community members] education there,” added Monture. “It was unheard [by McGill].”

Monture hoped the University would at least acknowledge that Six Nations funds saved the University from bankruptcy. “I feel there’s a moral obligation to at least step up to the plate for the people of McGill to at least do something,” he said.

The McGill administration, however, disagreed. “[The loan was contracted] from the government, which was managing Aboriginal lands and proceeds derived from such lands, including rental and sale,” Vice-Principal (Communications and External Relations) Olivier Marcil told The Daily in an email. “McGill University has fully repaid its debts and owes nothing to the Six Nations.”

According to Social Work Academic Associate and Kahnawá:ke community member Michael Loft, there is little pressure or advocacy on this issue from within the McGill community. Loft said that while he had heard quiet musings about the conflict, no one he works with knows much about it, so “there’s no point in squabbling.”

Legal actions unsuccessful

Since McGill contracted the loan from the government, the majority of legal effort in this case has been directed toward the Canadian federal government.

The Six Nations, represented by an elected council, filed a statement of claim in 1995 against Canada and Ontario regarding the Crown’s handling of Six Nations property, money, and other assets before and after the Confederation.
In 2004, the Six Nations council put this action on hold, hoping that discussions with the government would be successful. They were not, and the 1995 litigation was reintroduced in 2009.

“The government of Canada has not made any public statements about this case, stating that these matters are in litigation and cannot be commented on,” Monture told The Daily in an email.

“I think that everyone knows about it – McGill knows about it, the Crown knows about it,” said Monture. “[They’re] denying it and delaying it, saying that ‘Canada should do that,’ and [then] Canada says ‘well, McGill benefitted from that loan.’ Whether it’s paid back, I don’t know. The only thing I know is that we don’t ever see that [money] coming back to Six Nations. We have never seen it come back.”