Establishing a new fiscal relationship

Budget 2018 proposes to invest $188.6 million over five years, starting in 2018–2019, to better support First Nations communities, support strong Indigenous institutions, and advance the new fiscal relationship with First Nations. These investments include:

On this page

The Government of Canada and the Assembly of First Nations are working together to establish a new fiscal relationship that moves towards sufficient, predictable and sustained funding for First Nation communities.

About the process

With the signing of the Memorandum of Understanding in July 2016 (PDF 168 Kb, 1 page), a process was established to achieve this goal, which will be a key step in addressing the disparities and inequities in the socio-economic conditions between First Nations and other Canadians.

From October 11 to November 20, 2017, the Government of Canada and the Assembly of First Nations engaged with First Nation chiefs and administrators. Through this engagement, participants were asked to review and provide feedback on options prepared by three working groups to support a new fiscal relationship. Feedback received on working group options has been incorporated into the report: A new approach: Co-development of a new fiscal relationship between Canada and First Nations .

Canada is also working jointly with 25 self-governing indigenous governments to develop a new self-government fiscal policy framework that will enable these governments to realize the full potential of their agreements.

Grants

The Government of Canada is working with First Nations financial institutions and the Assembly of First Nations on the creation of 10-year grants. The co-development work is focusing on defining key elements of the grant, including:

The 10-year grant is a funding mechanism that is more flexible and allows for greater predictability in funding. This new funding mechanism will allow for the reduction of reporting burdens and a shift from program to outcome-based reporting. The grant recipients would commit to report to their own members on their priorities and targets and in relation to a common set of outcomes aligned with United Nations Sustainable Development Goals‎ as part of a mutual accountability framework. More information regarding the 10-year grant will be provided once available.

Default Prevention and Management Policy

As part of its September 2017 commitment, the Government of Canada will work with First Nations partners to replace the Default Prevention and Management Policy with a new proactive approach that supports capacity development. The new approach will be based on pilot projects currently being conducted with the First Nations Financial Management Board to support First Nations in exiting third party management.

Permanent Advisory Committee

The Government of Canada is working with First Nations partners to move ahead on a number of proposals. This includes establishing a permanent advisory committee to provide further guidance and recommendations on a new fiscal relationship. Taking into account regional interests, this committee would provide advice in areas such as:

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