Establishing a new fiscal relationship
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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 predictable, flexible and sufficient funding for First Nations communities.
About the process
With the signing of the Memorandum of Understanding in July 2016, a process was established to work towards a new fiscal relationship, which will be a key step in addressing the disparities and inequities in the socio-economic conditions between First Nations and other people in Canada.
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 was 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:
- The New Fiscal Relationship Grant
- replacing the Default Prevention and Management Policy
- developing a mutual accountability framework
- establishing an advisory committee on fiscal relations
Separate process for self-governing groups
Canada is also working jointly with 25 self-governing Indigenous governments to co-develop fiscal policy approaches to support self-government.
These co-developed fiscal policy approaches form Canada's collaborative self-government fiscal policy. This policy:
- only applies to Indigenous groups with self-government arrangements
- replaces, and takes precedence, over other existing federal policies for groups to which it applies
This separate process is coordinated by Crown-Indigenous Relations and Northern Affairs Canada and self-governing Indigenous governments.
The work on both the new fiscal relationship with First Nations under the Indian Act and on Canada's fiscal policy approach to self-government occurs separately. Neither process precludes the work of the other. For more information, visit:
Default Prevention and Management Policy
As part of its September 2017 commitment, Canada is working with First Nations partners to replace the Default Prevention and Management Policy and develop a new approach that supports capacity development for First Nations governments with the greatest governance capacity challenges. The new approach will be part of ongoing co-developed governance modernization efforts informed by ongoing engagement with First Nations partners, including the Assembly of First Nations, the First Nations Financial Management Board and AFOA Canada.
As of June 1, 2023, ISC no longer applies the first two levels of the Default Prevention and Management Policy, Recipient-Managed and Recipient-Appointed Advisor. This is an important step in the process to repeal the policy. The third level of default management, known as Third-Party Funding Agreement Management, remains as a last resort, applied only in rare circumstances when all efforts to ensure the continued delivery of programs and services to community members have been exhausted.
Assembly of First Nations-Indigenous Services Canada Joint Advisory Committee on Fiscal Relations
The report A new approach: Co-development of a new fiscal relationship between Canada and First Nations recommended the creation of an advisory committee to provide further guidance on the development of key areas of the new fiscal relationship. As a result, the Joint Advisory Committee on Fiscal Relations was created in 2018. This committee was mandated to provide advice to the National Chief of the Assembly of First Nations and the Minister of Indigenous Services on a new fiscal relationship between First Nations and the Government of Canada. The committee had a fixed term that ended in March 2020. In June 2019, the committee released its report, titled Honouring our Ancestors by Trailblazing a Path to the Future. The report creates a whole of government framework with 24 recommendations to help advance a new fiscal relationship between First Nations and Canada.
Related links
- 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