Documents obtained by the CBC show the Department of Aboriginal Affairs spent $200 million below its budget each year in the last five years.
The news comes just days after the Truth and Reconciliation Commission released its findings.
Willie Blackwater, a band councilor with the Gitsegukla First Nation, says he was devastated to hear the news.
"When you hear there are billions of dollars out there that could have been used to address what we need all in one year, I don't know...I'm lost for words," says Blackwater.
Blackwater says 90 per cent of his his Northern B.C. community is on social assistance and they're in dire need of funds for social development and housing.
Ernie Crey, an advisor to the Stó:lō Tribal Council, says he's not surprised. He says the federal government has lost its moral compass.
"To withhold funds from communities that heavily rely on them to offer important services and programming for their community members, it's just unforgivable," said Crey.
The Ministry of Aboriginal affairs says the delay in spending the funds is common and that it often involves negotiations with other parties.
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