Church to be ‘out of cash’ in 2001

Mississauga, Ont.

The national church’s financial situation continues to deteriorate as talks with the federal government about the residential schools crisis move at a disappointingly slow rate and the pace of litigation speeds up, national officers told Council of General Synod.

“A plan may go to Cabinet by early April and we’ll see what kind of mandate (Deputy Prime Minister Herb) Gray gets back from Cabinet. I hope it’s a mandate to negotiate with the individual churches,” General Secretary Jim Boyles told CoGS delegates meeting here in March.

Leaders of the Anglican, Roman Catholic, United and Presbyterian churches have been negotiating with Mr. Gray since last fall, seeking an agreement that would release them from the thousands of lawsuits brought by native people seeking damages for abuse suffered in government-owned, church-operated boarding schools. In most cases, plaintiffs sued the federal government, which then countersued the churches.

“We need some sort of agreement soon with the government that allows us to focus on a program of healing,” said Mr. Boyles, adding that he estimates the church overall is spending $4-$5 million a year on aboriginal work.

Including legal costs connected with the residential schools cases, General Synod experienced a deficit of $1.197 million for the fiscal year ended Dec. 31, 2000, reported treasurer Jim Cullen. Excluding $1.222 million in residential schools costs, revenue actually exceeded expenses by $292,000. However, that was due to a one-time gain resulting from the restructuring of the national church’s annuity portfolio, he said. For the year 2000, total revenues were $10.564 million and expenses were $10.272 million.

Contributions from dioceses, several of which have financial problems due to residential schools cases, were down $345,000 from budget. Mr. Cullen said a major concern is that donations from individual Anglicans are down 30 per cent from last year.

The national church has been liquidating assets to pay legal fees, and those assets stand at about $2.1 million, as of Dec. 31, 2000, Mr. Cullen reported.

Since the church must pay $1 million arising from settlements due to the Lytton residential schools case in British Columbia, and $1 million has been budgeted this year for legal costs, Mr. Cullen noted that time is running short. “We will run out of cash and liquid assets in 2001,” he said.

Given the urgency of the church’s situation, the question of seeking protection from creditors through a restructuring or bankruptcy plan was a major topic of discussion at CoGS.

Mr. Cullen said it was still too soon for the national church to file for protection under the Companies Creditors Arrangement Act (CCAA), which would allow the church to continue operating while it restructures under the direction of a trustee.