The inquiry is looking into the circumstances surrounding the death of Phoenix, who was beaten to death in 2005, at the age of five, after suffering abuse and neglect.
Phoenix's biological mother, Samantha Kematch, and Kematch's boyfriend, Karl Wesley McKay, were convicted of first-degree murder in the child's death.
One witness, who cannot be identified under a court-ordered publication ban, had known Kematch since they were teenagers and hung out with her in Winnipeg, the inquiry was told Wednesday.
Kematch had regained custody of Phoenix in 2004, after the child had spent her life in and out of Manitoba's child welfare system.
Took Christmas presents away
The witness testified that Kematch was quick to become angry with Phoenix, even for simple things like getting dirty after playing in the backyard.
The witness testified that Kematch took away all of Phoenix's Christmas presents in 2004 — dumping them at the witness's house — because the child was "bad" and did not deserve them.
At one point, Kematch taught Phoenix to call herself a "f---ing bitch," the witness told the inquiry.
The witness said Kematch was rarely seen with Phoenix. When asked where the little girl was, Kematch said she was "with family" or on the road with McKay, who at the time was a trucker, the inquiry was told.
The witness testified about having concerns that McKay was physically abusing Kematch and may have been sexually abusing Phoenix.
The little girl was wetting the bed and touching herself inappropriately, the witness told the inquiry.
Locked inside bedroom
A second friend of Kematch, who also cannot be identified by court order, testified later on Wednesday about an incident involving the mother.
According to the witness, as they were leaving her Winnipeg apartment one day, Kematch closed the bedroom door and locked it.
Whimpering could be heard behind the locked door, said the witness, who later tried to tell child welfare authorities that the little girl was being locked inside the bedroom.
The inquiry heard the witness was also concerned that Kematch was making statements of a sexual nature to Phoenix, who was four years old at the time.
As with the first witness, the second witness had concerns Phoenix may have been sexually abused by McKay, the inquiry was told.
Contacted child welfare officials
Both witnesses tried to call a child and family services (CFS) agency with an anonymous tip in the winter of 2005, the inquiry was told.
Because the tip was anonymous, officials did not take the concerns seriously, according to the witnesses.
Lawyers for government and CFS agencies questioned whether the witnesses had, in fact, called the agency with those concerns.
The lawyers also questioned if the first witness had specifically stated any concerns about sexual abuse.
Records from an RCMP interview that was later conducted with the first witness indicated there were concerns about Phoenix being alone on the road with McKay, and about Phoenix being locked inside the bedroom.
One of the witnesses testified that another person was later asked to call the CFS agency, and a staff member briefly visited Kematch's home as a result.
Kematch later told the witness she was going to move to a First Nations reserve where no one from CFS could bother her again, the inquiry was told.
Kematch and McKay, along with Phoenix, eventually moved to the Fisher River First Nation, about 150 kilometres north of the city, where Phoenix was beaten, neglected and eventually killed in June 2005.
Her body was not found until nine months later, in March 2006, wrapped in plastic in a shallow grave near the landfill at the reserve.
The inquiry is looking at how CFS officials handled the girl's case and why her death went undiscovered for months.