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The formal agreement was signed the last day of the federation's three-day conference held here, with Jean Chretien, minister for Indian Affairs and northern development, present for the signing.
The federal government committed itself to an initial expenditure of $500,000 for 1971-72.
The program will be operated under the scrutiny of a five-man executive committee made up of two members each from the FSI and Indian affairs as well as a fifth member from the public at large.
Similar agreements were signed last month with the union of Nova Scotia Indians and in 1969 with the Manitoba Indian Brotherhood.
The federal government will continue to honor Indian treaty rights, Mr. Chretien said
The government will fulfil its obligations in those areas where it has not fully respected the treaties, he told the conference.
The government was waiting for the results of a study on treaty rights being carried out by Indians themselves.
The government was looking forward to meeting with Indians once they were prepared to present their point of view. Although there would be difference, he hoped that by consultation and dialogue a mutually agreeable solution could evolve.
Federation Chief David Ahenakew of Prince Albert said Indians will interpret the treaties to the government in the same way the Queen's representatives interpreted them to the Indians when they were signed years ago.
A resolution calling for treaty Indians living off the reserve to receive the same educational benefits as those on reserves was tabled at the conference.
The resolution was one of approximately a dozen that was adopted by the federation's executive to be forwarded to Indian affairs officials in Ottawa on behalf of bands in the province.
The education resolution asked that all urban treaty Indians receive such benefits as books, tuition, freedom of choice of school allowances and kindergarten classes.
The 213 delegates, representing 64 of the 67 bands in the province, dealt with the resolutions in a brief session late Thursday afternoon, the final day of the FSI three day annual conference.
A resolution from the Black Lake Band called on the government to consider establishing a disaster fund to be used by the Stoney Rapids, Black Lake, Wollaston Lake and Fond Du Lac residents.
The areas were recently fires, destroying the trapping industry, the chief source of livelihood for the people there.
It was requested that the leasing of reserve land dealt with in another of the resolutions, be left to the direction of the band council involved, with Indian affairs officials acting only as advisors.
A call for wallet size treaty cards to replace all other forms of identification, especially medical care cards, was tabled, together with a resolution that urban treaty Indians receive coverage of all medical bills by the Indian affairs department.
The delegates also agreed that the federation's constitution be registered under the Canadian Companies Statute and that any amendments to the constitution be dealt with at next year's conference.
Integration of Indians into white society is, a two-way street, Chief Ahenakew said, adding he does not favor total integration as that means assimilation, which is not what the Indians want.
"White society must learn how to integrate with us and we must learn to integrate with them."
The chief said Indians are not all going to leave the reserve to join white man's society, and he hoped they wouldn't only to end up in end up in urban ghettos.
Chief Ahenakew spoke in an interview after the federation's annual conference.