OTTAWA, Ontario — The federal government is suing Catholic entities involved in the Indian Residential Schools Settlement Agreement over $1.5 million in contested funds.

Archbishop Gerard Pettipas of Grouard-McLennan, Alberta, who chairs the board of the Corporation of Catholic Entities Party to the Indian Residential Schools Settlement, said the entities had requested mediation and binding arbitration over the contested funds, "but the federal government said, 'No, we are going to court and let the court settle this.'"

The corporation represents dozens of Catholic entities, either dioceses or religious orders, that ran Indian residential schools for the Canadian government. An estimated 100,000 aboriginal children passed through these schools, which were abolished in the 1990s. They were established and paid for by the Canadian government in the late 1800s, but were administered by church organizations of several religions.

Residents of the schools said they suffered forced acculturation and, in some cases, physical and sexual abuse.

The Indian Residential Schools Settlement Agreement of 2006 was signed, among others, by representatives of the Canadian government, the Assembly of First Nations and Inuit leaders, and leaders of the Catholic, Anglican, Presbyterian and United Churches. Catholic entities were responsible for 79 million Canadian dollars.

Catholic agencies agreed to come up with CA$29 million in cash by 2011 for healing and reconciliation programs for those impacted by residential schools and CA$25 million of "in-kind services," such as counseling programs or help for children with fetal alcohol syndrome. They also were to also raise an additional CA$25 million.

Some of the $29 million portion was mitigated by pay-outs in lawsuits settled before the residential schools agreement was signed. Archbishop Pettipas said about $8.5 million had been paid out in previous court settlements, leaving the corporation responsible for $20.5 million.

Of that money, the corporation of Catholic entities understood it was to pay 80 percent to the Aboriginal Healing Foundation and 20 percent to other programs chosen by the church, the archbishop said. Church leaders chose to fund the Returning to Spirit program, a Catholic program focused on reconciliation and spiritual healing for aboriginal people affected by the residential schools.

Also under the settlement agreement, the entities were allowed to apply to the federal government for a mitigation of the $20.5 million they owed "if those expenses came out greater than the interest we would make on our money," Archbishop Pettipas explained.

Expenses did come out to be more than the interest, he said, and Catholic entities requested the amount be lowered. The government conceded some expenses, but "there is a remaining amount of $1.5 million that is in dispute," he said.

Archbishop Pettipas also expressed frustration with the Canada-wide campaign to try to raise the final $25 million.

"It is evident to us now we are not going to meet that goal," he said.

"It's a 'best-efforts' campaign," he said. "We're supposed to exercise our best efforts. We could contend we have exercised our best efforts. Short of a miracle, I don't think we're going to be able to make it.

"The advice we got was that the public sector, businesses and industry would be better positioned to help us reach this goal than the Catholic sitting in the pew," he said, but added, "We got practically nothing from the business sector."

Another strategy was to take up a collection in the dioceses of Canada. Some dioceses made a contribution without holding a collection. A collection in a number of dioceses in early December to coincide with the Feast of Our Lady of Guadalupe raised "about $1 million for the best-efforts fundraising campaign."

"Out of $25 million, that's not, shall we say, enough," Archbishop Pettipas said. "It's been a struggle."