Please note that the deadline for submitting expressions of interest to ISC on the 10-year grant has been extended to July 13, 2018.
Learn about the new 10-year grant funding mechanism available as of April 1, 2019.
- About the 10-year grant
- Eligibility requirements
- If a First Nation government has a certification from the First Nations Financial Management Board, will they automatically be eligible for a 10-year grant?
- How is it different from the current block funding approach?
- Will there be resources available to support capacity development for First Nations who are not currently eligible?
- Will it cover both core and proposal-based funding?
- Will funding from other government departments also be incorporated into the 10-year grant?
- Will the 10-year grant ensure that funding levels are adjusted to meet needs?
About the 10-year grant
The 10-year grant is a funding mechanism that will be made available as early as April 1, 2019 to First Nations that provide a written request and that meet the eligibility requirements. These requirements, co-developed with the Assembly of First Nations (AFN) and the First Nations Financial Management Board (FMB), assess the financial performance and governance of recipients. To continue to receive grant funding, recipients will have to demonstrate that they continue to meet these eligibility requirements during the entire term of the grant.
10-year grants could provide a number of significant benefits, including:
- a 10-year term (most contribution agreements have shorter terms)
- flexibility to allocate, manage and use funding to better accommodate local needs and changing circumstances and priorities
- ability to retain unspent funds
- reduced administrative and reporting burden
Administrative and reporting benefits of the 10-year grant could include:
- reduced administration (no "permissions" needed) as a result of greater flexibility to reallocate funding to fit local needs and priorities
- reduced reporting frequency to Indigenous Services Canada (ISC) and scope (focusing on outcomes and results)
- elimination of compliance-based reporting for programs included in the 10-year grant
- no recipient audits or compliance reviews initiated by ISC for programs funded through a 10-Year Grant
ISC will make the final decision on eligibility, based on the following co-developed approach with the AFN and FMB. Eligibility will be based on the following co-developed approach::
1. Financial administration law
A First Nation government wishing to be eligible for the 10-year grant must have in place a financial administration law. A financial administration law is a set of financial and governance practices that assist a First Nation government in making informed decisions, and can be passed either under the Indian Act or the First Nations Fiscal Management Act. If the First Nation government chooses to pass a financial administration law under the Indian Act rather than under the First Nations Fiscal Management Act, the law must obtain Ministerial approval. Regardless of whether a First Nation chooses to pass the law under the Indian Act or the First Nations Fiscal Management Act, the same standards for the financial administration law will apply. The FMB will provide reports to ISC on whether First Nations have met the eligibility criteria related to the financial administration law. For more information and to see a sample financial administration law, consult the FMB's financial administration law page.
Minimum financial administration law implementation provisions
First Nations applying for the grant would be asked to ensure that certain provisions of their financial administration law are supported by policies and procedures, where required, and have been legally brought into force. More information on the minimal provisions related to the financial administration law can be found on the FMB’s financial administration law page.
2. Financial Performance
A First Nation government’s financial statements for the preceding 5-year period must meet certain financial performance standards as of March 31, 2018. To assist ISC in reaching its determination, the FMB will be asked to provide opinions to ISC on whether First Nation governments meet these standards.
Specifically they must demonstrate:
- an average "fiscal growth ratio" of no lower than minus 5%
- an average "operating margin ratio" of no lower than minus 5%
- an average "asset maintenance ratio" of no lower than 100%
- a weighted average "net debt ratio" of no more than 50%; or a "net debt ratio" for the most recent year of no more than 50% and
- an average "interest expense ratio" of no more than 5%
First Nation governments that express interest in the 10-year grant will be provided with more detailed information on meeting the eligibility requirements based on their unique circumstances. For a First Nation to be eligible for a 10-year grant, it must:
- Provide a written request to be considered for a 10-year grant by July 13, 2018.
- If not already done, create a financial administration law or bylaw under the First Nations Fiscal Management Act or Indian Act, and confirm that that the law is consistent with FMB standards and that minimum implementation standards have been met.
- Provide audited financial statements for the past five years to demonstrate that the financial performance provisions listed above are met.
FMB will provide reports to ISC confirming that First Nations have met eligibility criteria for the 10-Year Grant.
Given that many First Nation governments may not have issued 2018 annual financial statements by July 13, 2018, First Nations are asked to provide these documents no later than July 29, 2018. In the meantime, copies of the 2014 to 2017 annual financial statements can be provided, unless they have been made previously available to ISC.
First Nations that have not confirmed they have met the eligibility criteria by December 14, 2018 may not be among the first group of grant recipients on April 1, 2019. To ensure all First Nations have a chance to access grants over time, ISC will issue annual calls for written requests to be considered for 10-year grants.
If a First Nation government has a certification from the FMB, are they automatically eligible for a 10-year grant?
While the final decision on the eligibility requirements rests with ISC, the FMB will provide reports on the assessment of the First Nation's financial performance and financial administration law against the co-developed eligibility requirements. The requirements for a 10-year grant are aligned with FMB certification standards:
- If a First Nation government has previously obtained a financial performance certificate from the FMB, they must demonstrate that their financial statements for the past five years meet financial performance eligibility requirements as of March 31, 2018.
- If a First Nation government previously developed and enacted a financial administration law approved by the FMB and has brought into force the minimum provision required by FMB standards, the 10-year grant eligibility requirement for enacting a financial administration law will have been met. However, the First Nation will still have to demonstrate that minimum financial administration law provisions have been implemented by September 2020.
- If a First Nation government previously obtained their financial management system certificate from FMB, they will have met and exceeded the eligibility requirement of a financial administration law and minimum provisions for the 10-year grant. They will still have to meet financial performance eligibility requirements as of March 31, 2018.
How is it different from the current block funding approach?
There are some significant differences:
- block funding generally has a five-year term
- block funding is a contribution, not a grant, and as such, it comes with more administrative and reporting requirements
- block funding recipients have to complete unexpended funding plans at the end of the agreement
- block funding generally does not permit program redesign or provide the flexibility to set the standards and levels of service associated with these programs
- block funding recipients are subject to department-initiated recipient audits and compliance reviews
Will there be resources available to support capacity development for First Nations who are not currently eligible?
ISC is examining options to establish First Nation-led capacity development support that First Nation governments can access in order to become eligible for 10-year grants.
Ongoing capacity development is an important objective for all First Nation governments, not just for those hoping to become eligible for 10-year grants. Depending on resources, the levels of funding available to support increased 10-year grant eligibility will need to be balanced against other First Nation government capacity development needs.
Will it cover both core and proposal-based funding?
Core funding refers to program funding that is provided on an on-going basis and is normally formula-based. Proposal-based funding refers to funding that may be provided from time-to-time and requires a successful proposal.
The intention is to cover both but in the immediate term, ISC is exploring approaches to include all current core funding in a 10-year grant. Program reform currently underway at ISC is focused on converting as much of proposal-based funding as possible into core funding.
Will funding from other government departments also be incorporated into the 10-year grant?
This is an objective that will take some time and effort to achieve given the differences in program mandates, objectives and authorities between departments. ISC is working with other departments to identify barriers and to develop approaches to overcome them so that this funding might also be available through the 10-year grant in the future.
Will the 10-year grant ensure that funding levels are adjusted to meet needs?
The 10-year grant is a funding mechanism only. It aims to provide increased funding flexibility and predictability to First Nation governments to address their local needs and priorities. It does not change funding levels or provide increased funding to grant recipients. Funding sufficiency is being discussed separately as part of ongoing work on the new fiscal relationship.
ISC will ensure that all First Nations benefit from the changes to program funding levels regardless of the type of funding agreements they may be in. While co-development proceeds current funding levels will remain and will be applied to a 10-Year Grant. Any future adjustments to program funding escalators will be applicable to 10-Year Grants as they occur.