The federal government is obliged to turn over its archival records on Indian residential schools to the Truth and Reconciliation Commission, an Ontario court decided Thursday.

In his decision, Justice Stephen Goudge said the obligation to provide the materials is clear from the settlement agreement that established the commission.

"The plain meaning of the language is straightforward," Goudge said. "It is to provide all relevant documents to the TRC."

The decision comes in an increasingly acrimonious dispute between Ottawa and the commission over millions of government documents the commission says it needs to fulfil its core mandate.

'The court's answers to the commission's reference will ensure that the dark chapter in Canadian history that is the residential school story will never be forgotten'—Julian Falconer, lawyer for the commission

The government maintained it had no obligation to provide the records in Library and Archives Canada.

The commission, under Justice Murray Sinclair, argued Ottawa's intransigence would make it impossible to complete its work on budget as required by July 1, 2014.

"We're grateful to be able to continue the commission's work of gathering and protecting for future generations documents that are relevant to the history of the Indian residential schools," Sinclair said in a statement.

"We especially acknowledge the clarity of Justice Goudge's decision."

Part of the commission's mandate is to help in a process of reconciliation, while yet another is the "creation of a legacy" that includes collection of records, taking statements from those involved, and classifying and preserving the materials.

"Canada's documents, wherever they were held, would have been understood as a very important historical resource for this purpose," Goudge said.

Aboriginal Affairs Minister John Duncan said the government was reviewing the decision.

"The decision is anything but clear-cut," Duncan told the House of Commons during question period Wednesday. "The discussion in terms of relevant documents is left somewhat open by the judge. We believe that we've been meeting the spirit and intent [of the agreement], but if there is a slightly different interpretation we will meet the spirit and intent of the judge's decision."

150,000 native kids sent to schools

The residential schools system, which ran from the 1870s until the 1990s, saw about 150,000 native kids taken from their families and sent to church-run schools under a deliberate policy of "civilizing" First Nations.

Many students were physically, mentally and sexually abused. Some committed suicide. Mortality rates reached 50 per cent at some schools.

In the 1990s, thousands of victims sued the churches that ran the schools and the Canadian government. The $1.9-billion settlement of that suit in 2007 prompted an apology from Prime Minister Stephen Harper and the creation of the commission.

In its submissions to the court, the commission argued the Canadian government was trying to renege on its legal deal with Aboriginal Peoples because sticking to the terms would cost too much.

Commissioners Marie Wilson, from left, Justice Murray Sinclair and Chief Wilton Littlechild released an interim report last February. The commission must wrap up its work by July, 2014. (Darryl Dyck/Canadian Press)

Lawyer Julian Falconer, who represented the commission, called it a "truly landmark" judgment.

"The court's answers to the commission's reference will ensure that the dark chapter in Canadian history that is the residential school story will never be forgotten," Falconer said.

In opposing the court application, the federal government argued the commission had no legal standing to take the matter to court.

It also maintained its only obligation was to throw open the doors to the Library and Archives Canada to commission researchers.

Goudge disagreed on both counts.

"While Canada is not obliged to turn over its originals, it is required to compile all relevant documents in an organized manner for review by the TRC," the justice said.

Goudge also weighed in on the dispute over what constitutes "relevant" documents, saying not every document that mentions residential schools is key to the commission's mandate.

An evaluation of relevance is context specific and the obligation on the government to produce documents must be reasonable.

"Suffice it to say that Canada's obligation ... is to provide the documents in its possession or control that are reasonably required to assist the TRC to tell the story of the legacy of Indian residential schools," Goudge said.