TORONTO - The Canadian government cannot be allowed to renege on a legal deal with its aboriginal people simply because sticking to the terms would cost too much, an Ontario court heard Thursday.

At issue, a lawyer for the Truth and Reconciliation Commission said, is the government's refusal to organize and turn over millions of records related to what he called "the highest level of human tragedy" — the Indian residential school system.

Those records, lawyer Julian Falconer told Justice Stephen Goudge, go to the commission's core mandate of creating a comprehensive and lasting account of the shameful century of abuse.

"One day the light switch went on that this was a really expensive obligation, so history gets changed," Falconer said. "It's all about money."

The commission is asking the courts to clarify the government's obligations under the multibillion-dollar settlement reached in 2007 with victims of the Indian residential school system.

Terms of the settlement included creation of the truth commission now led by Justice Murray Sinclair.

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.

"This was always meant to create a sense of preservation about the past that wasn't simply about having to trust the agent of oppression," Falconer said.

At first, the federal government repeatedly acknowledged its legal obligation to give relevant records in its possession — as many as five million of them — to the commission.

While Ottawa has turned over about one million documents to date, 23 of 24 government departments have now refused to provide the materials and millions of records remain outstanding.

"Pure and simple, that can't be right," Falconer told Ontario Superior Court.

"You can't have a sharing of common experiences when you take a big piece of the story and control it when you weren't meant to."

The commission worries that Ottawa's intransigence will make it impossible to complete its work as required by July 1, 2014, and within budget.

Goudge repeatedly asked what documents are "relevant," and about the limits of Ottawa's legal duty to provide them.

Falconer said the obligation was to provide enough documents to allow the commission to create a "reasonable" record.

"It can't be a shadow of what is a reasonable record," he said. "The limit can't be decided on Canada's whim because the obligation became inconvenient."

Some estimates peg the cost of organizing and turning over the records at more than $100 million — far in excess of the commission's budget.

The Indian residential school system, which ran from the 1870s until the 1990s, saw about 150,000 aboriginal children 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 suits were settled in 2007 and the Truth and Reconciliation Commission was set up. A national research centre was also to be set up as a permanent archive.

Earlier Thursday, a government lawyer argued the commission had no authority to take its case to court given that it is simply a "department" of government.

Nothing in the settlement gave the commission the capacity to conduct litigation "on behalf of the Crown or against the Crown," Catherine Coughlan said, adding that would be the exclusive purview of the attorney general.

The lawyer also said the commission was not a separate legal entity and had no legal personality.

"It is not a commission of inquiry," Coughlan said. "It is expressly prohibited by its terms against acting as an inquiry."

Before the proceedings got underway, aboriginal elder Vernon Nelson shared a prayer, with the judge's blessing.

The hearings continue into Friday.

Note to readers: This is a corrected story. A previous version misspelled Coughlan's first name.

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ABORIGINAL PROTESTS: FROM OKA TO CALEDONIA
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  • Oka Crisis

    Canadian soldier Patrick Cloutier and Saskatchewan Native Brad Laroque alias "Freddy Kruger" come face to face in a tense standoff at the Kahnesatake reserve in Oka, Quebec, Saturday September 1, 1990. Twenty plus years after an armed standoff at Oka laid Canada's often difficult relationship with its native peoples bare in international headlines, the bitterly contested land remains in legal limbo. (THE CANADIAN PRESS/Shaney Komulainen)

  • Oka Crisis

    A warrior raises his weapon as he stands on an overturned police vehicle blocking a highway at the Kahnesetake reserve near Oka, Quebec July 11, 1990 after a police assault to remove Mohawk barriers failed. Twenty plus years after an armed standoff at Oka laid Canada's often difficult relationship with its native peoples bare in international headlines, the bitterly contested land remains in legal limbo. (THE CANADIAN PRESS/Tom Hanson)

  • Oka Crisis

    A Quebec Metis places a stick with an eagle feather tied to it into the barrel of a machine gun mounted on an army armored vehicle at Oka Thursday, Aug. 23, 1990. The vehicle was one of two positioned a few metres away from the barricade causing a breakdown in negotiations. Twenty plus years after an armed standoff at Oka laid Canada's often difficult relationship with its native peoples bare in international headlines, the bitterly contested land remains in legal limbo. (THE CANADIAN PRESS/Bill Grimshaw)

  • Oka Crisis

    A Mohawk Indian winds up to punch a soldier during a fight that took place on the Khanawake reserve on Montreal's south shore in 1990. The army broke up the fight by shooting into the air. Twenty plus years after an armed standoff at Oka laid Canada's often difficult relationship with its native peoples bare in international headlines, the bitterly contested land remains in legal limbo. (CP PHOTO)

  • Ipperwash

    Two aboriginal protesters man a barricade near the entrance to Ipperwash Provincial Park, near Ipperwash Beach, Ont., on Sept. 7, 1995. (CP PHOTO)

  • Ipperwash

    Ken Wolf, 9, walks away from a graffiti-covered smoldering car near the entrance to the Ipperwash Provincial Park in this September 7, 1995 photo. A group of aboriginal protesters were occupying the park and nearby military base. (CP PHOTO)

  • Caledonia Protests

    Caledonian activist Gary McHale (right) is confronted by a Six Nations Protester as he attempts to lead members of Canadian Advocates for Charter Equality (CANACE) in carrying a makeshift monument to Six Nations land in Caledonia, Ont., on Sunday February 27, 2011. CANACE claim inequality in treatment for Caledonian residents from Ontario Provincial Police compared to that of the Six Nation population. They planned to plant a monument of six nation property to demand an apology from the OPP, but were turned back by protesters. THE CANADIAN PRESS/Chris Young

  • Caledonia Protests

    First Nations people of the Grand River Territory stand with protest signs as they force the redirection of the Vancover 2010 Olympic Torch Relay from entering The Six Nations land Monday, December 21, 2009 near Caledonia, Ontario. The Olympic torch's journey across Canada was forced to take a detour in the face of aboriginal opposition to the Games, with an Ontario First Nation rerouting its relay amid a protest from a splinter group in the community. (THE CANADIAN PRESS/Dave Chidley)

  • Caledonia Protests

    Six Nations protesters guard the front entrance of a housing development in Hagersville, Ont., just south of the 15-month aboriginal occupation at Caledonia on Wednesday, May 23, 2007. The protest was peaceful. (CP PHOTO/Nathan Denette)

  • Caledonia Protests

    Mohawk protestors block a road near the railway tracks near Marysville, Ont. with a bus and a bonfire Friday April 21, 2006. The natives showed their support to fellow natives in Caledonia, Ont. where they were in a stand off with police regarding land claims.(CP PHOTO/Jonathan Hayward)