The federal government has reversed its decision to limit funding allocated for research on the lands of former residential schools.

Indigenous Relations Minister Gary Anandasangaree stated in a release on Friday that the government heard "loud and clear" the concerns of Indigenous leaders and communities.

Communities were previously able to receive up to $3 million annually through the Missing Children Community Support Fund for residential schools, but the government moved to cap funding at $500,000.

Anandasangaree said the government will now raise this cap and remove the planned restrictions on funding, which goes toward locating burial sites at former residential schools and identifying children who never returned.

He stated that the recent changes "did not rise to our official commitment to finding the children."

The Manitoba Chiefs Association was among the groups that condemned the change, with Deputy Grand Chief Betsy Kennedy describing the decision as "not only frustrating, but also disrespectful to survivors and the families affected by the residential school system."

Anandasangaree said in the release on Friday that the government's intention was to fund as many initiatives as possible but that it had made a mistake by not being flexible enough. He said, "Communities know best what is needed to do this important work, on their own terms."

The Manitoba organization stated that the government's retreat represents "an important moment."

They said in a statement on Friday: "The government's acknowledgment of the need for flexibility and responsiveness to the concerns of First Nations communities underscores the importance of dialogue and collaboration in addressing the painful legacy of residential schools."

The community support fund was established in the wake of a report from the Tk'emlups te Secwepemc First Nation in 2021 regarding 215 unmarked graves found on the grounds of a former residential school in Kamloops, British Columbia, which reignited the national conversation about the history and legacy of residential schools.