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:
- $127.4 million over two years to directly support First Nations communities in building internal fiscal and administrative capacity, including $87.7 million over two years to:
- ensure that communities under default management are able to move forward on projects that form part of their management action plans
- support pilot projects in order to strengthen governance and community planning capacity in First Nations
- $50 million over five years, and $11 million per year ongoing, to strengthen the First Nations Financial Management Board, the First Nations Finance Authority and the First Nations Tax Commission.
- $2.5 million over three years to support the First Nations Information Governance Centre's design of a national data governance strategy and coordination of efforts to establish regional data governance centres
- $8.7 million over two years to continue and broaden work with First Nations leadership, technical experts, researchers and community representatives on the new fiscal relationship
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.
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:
- eligibility requirements
- the scope of the grant
- the application process
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:
- a new Fiscal Policy Framework to address sufficiency and identify priority funding areas
- revenue generation opportunities for First Nations
- new funding arrangement policies to strengthen the commitment to:
- flexible and predictable funding
- the reduction of reporting burdens
- a shift from program to outcome-based reporting
- the development of First Nations-led tools to replace the General Assessment scoring of First Nations communities
- finalizing a Mutual Accountability Framework aligned with the United Nations Sustainable Development Goals, including key well-being and socio-economic indicators to measure progress in closing gaps
- Signing of a Memorandum of Understanding on a new fiscal relationship with the Assembly of First Nations
- Canada and the National Chief of the Assembly of First Nations announce progress on new fiscal relationship
- Minister Philpott Welcomes Report on a New Fiscal Relationship with First Nations
- A new fiscal relationship: Engagement 2017
- Assembly of First Nations – Fiscal Relations