First Nations' schools have lower quality teaching, an inferior curriculum and fail to provide proper services for children with special needs — and without further investment these problems could worsen with an expected population spike on reserves, a new federal report warns.

The sweeping performance evaluation carried out for Aboriginal Affairs and Northern Development used a range of methods, including interviews and case studies, surveys, expenditure analysis and a literature review.

In 2010-11, Aboriginal Affairs spent about $1.8 billion for education on reserves, but the report warns that a "significant gap" remains in educational opportunities and outcomes between First Nation and other Canadian students.

Here are some of the report’s key findings:

  • Education opportunities and results are not comparable to off-reserve.
  • Quality of teacher instruction and curriculum is affecting student success.
  • Funding gaps persist, especially in isolated, small population communities.
  • There is a lack of services for special needs students.

Statistics Canada projects the population of children on reserve will increase by about 15 per cent — or about 30,000 children — over the next two decades.

"Among the greatest concerns raised by First Nation interview and case study participants were significant ongoing and projected increases in operational costs relative to available resources," the report reads.

The evaluation also finds serious problems with the ability of First Nation schools to attract and retain teachers and support staff.

The report cautioned that direct comparisons, particularly for finances, were not always possible because different regions sometimes tracked expenditures in different ways.

However, the report noted that expenditures to First Nations for school operations do not appear to account for the much different costs associated with isolation and small population.

The report recommended that Aboriginal Affairs do more research into funding allocation methodologies that are "equitable to provincial approaches, while at the same time accounting for cost realities on reserve."

In its response to the report, the federal government has promised to pump another $100 million over three years for literacy and other education services. It also plans to introduce a First Nation education act and have it in place by September 2014.

Appearing on CBC News Network’s Power & Politics, Conservative MP Chris Alexander, the parliamentary secretary to the minister of national defence, conceded the gaps identified in the report are "unacceptable."  Describing the federal funding envelope as "generous," he said money must be spent more effectively and evenly to yield better results.

Reforms that will come with a new education act and a stronger funding framework will lead to major improvements, he said.

"The consultations that will lead to a new act are going to turn the page to a new era for aboriginal education in this country, and we are very serious about achieving that watershed," he told Power & Politics host Rosemary Barton. "And we’ve made aboriginal education our absolute priority in this portfolio."

Mathieu Ravignat, the NDP’s treasury board critic, said chronic underfunding has led to a host of problems — including "shocking" dropout rates on reserve. Only 41 per cent of First Nation kids graduate from high school, compared with 77 per cent in the broader population. 

Aboriginal leaders must often make tough decisions such as whether to spend money on drinkable water or education, he said.

"I don’t think this government has the knowledge necessary on the ground of the vast challenges that are there right now," he said.

'Clear gaps'

Liberal MP Joyce Murray said while it makes sense to work out long-term solutions, the federal government must act urgently on key fronts.

"There are short-term needs that have been identified a long time ago. There are clear gaps to those rural and remote communities. It’s inequitable funding — the government’s own goal is to have comparability and they know what to do in the short term as well as working in the medium and long term and they are simply refusing to do it," she said. "That is what is unacceptable to me."

The report is based on information from four separate contractors commissioned to delve into various aspects of First Nations education, including KPMG for expenditure analysis, Harris-Decima and Donna Cona Inc. for surveys, interviews and case studies and the University of Ottawa for analysis of literature. It was completed in June 2012 but only recently posted publicly.