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Catholic Church in Canada may file for bankruptcy to avoid compensating sex abuse victims.
Dozens of new sexual abuse lawsuits involving priests from the Moncton archdiocese are threatening the financial viability of the church. CBC News found at least 56 lawsuits against the Roman Catholic Church in New Brunswick that are still in front of the courts, and this despite an extensive conciliation process that was conducted a few years ago.
Between 2012 and 2014, the church hired retired judge Michel Bastarache to talk to victims confidentially.
The Moncton archdiocese ended up paying $10.6 million to 109 victims, and the diocese of Bathurst $5.5 million to 90 victims.
It’s estimated victims received between $15,000 and $300,000, depending on the severity of the abuse, how old they were when it started, and how many years it lasted.
What followed were major cutbacks by the church.
In Moncton, diocesan staff was slashed by half, from 19 before 2013 to fewer than 10 now. Only two staff members were kept on full time.
The diocesan centre in Dieppe, which used to be the home of the archbishop, was sold.
Virtually no money is left in the church’s coffers.
“We sold things, and now we’re at a point … we’ve taken all the money that we have,” said Moncton Archbishop Valéry Vienneau.
“We had money — the diocese had money, but doesn’t anymore.”
Financial information from the Canada Revenue Agency reveals the Moncton archdiocese has been operating at a deficit for two of the past four years, and has no declared land or building assets.
Getting insurance to pay is church’s last hope
The church is in the midst of another legal battle, this one against its insurance company — arguing it should be paying some of the damages to sexual abuse victims.
In 2015, the archdiocese of Moncton launched a civil lawsuit against the Co-Operators General insurance company for $4.2 million.
The church argues that during the period it was covered, from 1977 to 1999, the insurance policy included coverage for “bodily injury caused intentionally by, or at the direction of, the archdiocese.”
But the insurers essentially claim the church knew about the abuse and not only did nothing to stop it but also failed in its obligation to tell the insurance company once it became aware.
None of the allegations have been proven in court, and the case has not yet made it to trial. Lawyers on both sides are watching closely what happens with a similar case involving the diocese of Bathurst.
Last year, the Bathurst diocese was denied $3.3 million it was trying to get from Aviva insurance for similar reasons.
But that case is going to appeal in a few months, and Vienneau remains hopeful a judge will rule in the church’s favour in both that case and Moncton’s.
Elsewhere, churches went bankrupt
If not, the Moncton archdiocese might be forced to declare bankruptcy, which other churches, especially in the U.S., have done following sex scandals, explains Vienneau.
“Hopefully, we won’t have to go there, but if we have to … we’ll see,” said Vienneau.
Michel Bastarache thinks the process he led, despite its hefty multimillion-dollar price tag, will prove to have been much less costly to the church than the current civil suits.
“It wasn’t an adversarial process and it wasn’t a difficult process compared to that of a civil suit,” Bastarache said.
Bastarache estimates the money given to the more than 200 victims he spoke to is comparable to what the church would have to pay to deal with only about three civil lawsuits, when all the administrative and judicial costs are counted.
Unless the church can win in court against its insurers, Bastarache thinks it’s unlikely the new alleged victims will ever see any money.
“They wouldn’t be compensated if there was no money available,” he said.
“And to say that the bankruptcy would fix things is, I think, quite improbable. Because there are no assets left except the churches themselves. And I don’t know who would want to buy a church.”
“The next two years will be very determining years,” said Vienneau, who expects it will be some time before the lawsuits with the alleged victims can be settled.