Establishing a new fiscal relationship

Budget 2018 proposes to invest $188.6 million over 5 years, starting in the 2018 to 2019 fiscal year, to better support First Nations communities, support strong Indigenous institutions, and advance the new fiscal relationship with First Nations. These investments include:

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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 Nations communities.

About the process

With the signing of the Memorandum of Understanding in July 2016 (PDF), 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 Nations chiefs and administrators. Through this engagement, participants were asked to review and provide feedback on options prepared by 3 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.

Since then, Canada and the Assembly of First Nations have been working on a number of proposals made in the report:

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.

Default Prevention and Management Policy

As part of its September 2017 commitment, 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, and informed by ongoing engagement with First Nations partners.

Advisory Committee

The report recommended the creation of an advisory committee to provide further guidance on the development of key areas of the new fiscal relationship. The first committee meeting was on November 14. The members are:

Taking into account regional interests, by April 1, 2019, this committee will provide advice on key new fiscal relationship issues, including recommendations for:

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