MONCTON, N.B. - A child welfare advocate is accusing the federal government of failing First Nations when it comes to education, saying that funding military projects and other initiatives should never come at the expense of a young person's future.

"Racial discrimination against children should never be a legitimate fiscal restraint measure," said Cindy Blackstock, director of the First Nations Child and Family Caring Society of Canada, at the annual meeting of the Assembly of First Nations in Moncton today.

"It's our job to make sure that they are not funding fighter jets and other types of projects on the backs of children who just want to go to school."

Blackstock told the crowd gathered at a downtown hotel that all children regardless of their ethnicity deserve clean and safe schools that deliver quality education. But she said that's not the case for aboriginal children.

Peter Penashue, the federal minister of intergovernmental affairs, said Ottawa is making education a priority.

"I think the government of Canada recognizes there's a problem, the Assembly of First Nations recognizes there's a problem, the chiefs right across the country recognize there's a problem with education," Penashue told reporters after sitting in on part of the meeting.

Penashue, the first Innu MP, touted the work of a joint panel on how to improve education for aboriginal children in kindergarten to Grade 12. The panel was launched last month by the assembly and the federal government and aims to find ways to better the education outcomes of First Nations children, about half of whom don't finish high school.

It will be seeking public input on how to design legislation to allow First Nations to pass their own education laws, manage and improve the quality of schooling, and set up regional school roundtables.

Penashue wouldn't commit to more funding for education, saying the panel must complete its work first.

"I think it's a very important review that's taking place — one that serves the Assembly of First Nations right across the country and the government of Canada," he said.

"I think we all recognize that there's a significant amount of dollars that are on the table for education. The problem is we don't really have a full understanding as to why education's not working."

But Blackstock, a member of the Gitsxan First Nation of British Columbia, said there's simply not enough money to go around.

The Assembly of First Nations estimates that each aboriginal child receives $2,000 to $3,000 less in education funding a year than off-reserve children across the country.

Blackstock said some on-reserve schools are dealing with mould growing in their buildings, adding that she's heard of one school that has an infestation of snakes.

"This is not a question of us versus Canadians. We stand with Canadians who believe in equality, fairness and justice," she said.

"There is absolutely no excuse for the type of discrimination that our kids continue to experience."

Chief Gilbert Whiteduck of the Kitigan Zibi Anishinabeg First Nation in Quebec said he believes the education panel has only created more delays. He said aboriginals are watching their language erode and young people drop out of school while federal dollars are being doled out across the country for unrelated projects.

"We hear the minister saying he's not ready to sign a blank cheque," he said. "Well, what kind of cheque is being signed when it comes to the military? What kind of cheque is being signed when it comes to certain regions in Canada?"

National Chief Shawn Atleo told the group — a number of whom were teachers — that work starts with grassroots discussions like the one unfolding in Moncton.

"We take up the mantle of responsibility now ourselves," he said. "And I am, for one, greatly appreciative that if we're going to have strong conversations and push for something to be a national priority that education would be there."

He pointed to Sheila Fraser's final report to Parliament as auditor general, in which she said life on reserves is deteriorating to the point where Ottawa needs to overhaul its funding approach.

The 10-year examination of First Nations policy concluded that education and child welfare — along with adequate housing and clean drinking water — are in an "unacceptable" state, despite a large stack of government recommendations, initiatives and money over the years.

Following the report's release, both Atleo and Aboriginal Affairs Minister John Duncan announced a joint process to develop goals for education, economic development and governance of First Nations.

The aim is to have the process culminate in a summit later this year, which Atleo said could also tackle issues including the Assembly of First Nations' desire to move away from the Indian Act and embark on a more independent relationship with the federal government.

Penashue,after the meeting, said there's consensus within the federal government that aboriginal matters, including education, need to be tackled.

"They're prepared to sit down and make an effort to try to deal with these very difficult issues," he said.

"The only way to inspire meaningful and lasting improvements in quality of life on First Nations is through strategic collaboration."