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TORONTO -- First Nations leaders say they are disappointed by the federal government's decision to appeal a ruling ordering Ottawa to compensate Indigenous children removed from their homes, but will "work together" with officials to reach a resolution.

David Pratt, vice-chief of the Federation of Sovereign Indigenous Nations (FSIN), told Â鶹ӰÊÓ Channel on Saturday that the appeal is "not productive" in working towards reconciliation. Pratt said FSIN's position is that the federal government "needs to fully comply with the tribunal rulings."

"Let's start working to make sure that there's equitable funding for Indigenous children and to just stop the discriminatory practices that continue to be perpetuated by the Government of Canada," Pratt said.

The to uphold a Canadian Human Rights Tribunal (CHRT) order requiring Ottawa compensate First Nations children, but says it plans to resolve the dispute outside of court.

Late Friday evening, the government filed a notice of appeal arguing the Federal Court erred in finding that the CHRT acted "reasonably" by ordering complete compensation for children, their parents, or grandparents for being unnecessarily removed from their communities since 2006.

Moments later, Indigenous Services Minister Patty Hajdu published a statement noting that Ottawa and the Indigenous groups on the other side of the lawsuit have agreed to "sit down immediately" to reach a resolution by December.

The appeal is active, but the government says it will pause the litigation for two months.

The two sides will look to agree on: providing "fair, equitable compensation" to First Nations children on-reserve and in the Yukon who were removed from their homes by child and family services agencies; achieving "long-term reform" of the First Nations and Family Service program; and, delivering funding for the "purchase and/or construction of capital assets" that support the delivery of child and family services.

In 2016, the Canadian Human Rights Tribunal found that Ottawa discriminated against First Nations children by knowingly underfunding child and family services for those living on reserve. Litigants in the case first brought forward in 2007 say this led to thousands of kids being apprehended from their families and enduring abuse in provincial foster care systems.

The tribunal ordered Ottawa to pay $40,000, the maximum the tribunal can award, to each child as well as their parents and grandparents.

In 2019, the federal government asked the Federal Court to dismiss the tribunal's decisions, but it upheld the orders last month. Friday was the final day for the government to file an appeal.

MORE THAN COMPENSATION

Pratt said it is important that the federal government recognize the treatment of Indigenous children within the child welfare system as wrong and go beyond compensation.

"Let's work together to not only compensate those that have been in the system, but also to ensure that our children are receiving the best quality of care and funding and resourcing that they need," he said.

If the federal government is "serious" about its commitment to reconciliation, Pratt said, officials should stop prolonging this process.

"Let's deal with these discriminatory practices, ending them once and for all against Indigenous children in all of Canada," he said.

However, if negotiations fail, Pratt said, the matter will be back in court.

"If things don't go our way, then the government will file their appeal in January, they'll take it back into the courts, and… our lawyers have assured us that we're going to win," Pratt said, adding that the federal government will eventually "exhaust all their legal avenues."

Assembly of First Nations Chief RoseAnne Archibald released a statement Friday night echoing the same sentiment of disappointment, but said the organization is "encouraged that a deadline will be set to negotiate a settlement of this matter."

"Our priority remains to ensure that our children and families are supported to thrive. First Nations children and families have waited far too long for justice and healing. In order to walk the healing path together, Canada must acknowledge the harms that discrimination has had on our children and families. Our collective goal is to ensure that discrimination ends and never happens again," she said.

Archibald told Â鶹ӰÊÓ Channel that compensation for Indigenous children is "just one part of a long-term solution."

"The other part that's extraordinarily important for us is to make sure that discrimination has in fact ended, that we can point to it and say 'this is in fact in the past'," Archibald said in an interview Saturday.

Archibald said it is important that the federal government and First Nations "determine together that discrimination has indeed ended," and, more importantly, that measures are put in place to ensure discrimination doesn't "creep back up into the system."

"This system that First Nations are in… is rife with systemic racism," she said. "So we really have to look at this larger question of how we're going to end discrimination and make sure it doesn't happen again, and that can only be done when you sit down in a true partnership with government."

Archibald said First Nations care for their children as much as other Canadians, and want to ensure they grow up in a "just society" that includes access to clean drinking water, high-standard housing and safe schooling.

"We have a similar vision of happy, healthy children, surrounded by the love and care of their families living in vibrant and safe communities, but First Nations have a lot of catching up to do in order to ensure that equality and equity exists in our communities," she said.

With files from CTVNews.ca's Sarah Turnbull and The Canadian Press