Grants for the Political Evolution of the Territories, Particularly as it Pertains to Devolution: Terms and Conditions

Table of contents

1. Introduction

Devolution of responsibility to territorial governments has been a long standing priority of the Government of Canada over the past several decades. The devolution of various responsibilities to territorial governments has been a gradual process since 1867. Devolution is a key deliverable under the Governance pillar of Canada's Northern Strategy.

Current devolution discussions pertain to the transfer of lands and resources responsibilities to the Government of the Northwest Territories and Government of Nunavut. This includes respecting Canada's duty under Section 35 of the Constitution Act (Canada), 1982, to consult and where necessary accommodate Aboriginal groups. The completion of devolution for lands and resources will advance the political and economic development of the territories by placing more decision-making in the hands of the territorial governments.

In 2002, 2005, 2010, and 2013 Cabinet authorized mandates to advance the negotiation and conclusion of Northwest Territories Lands and Resources Devolution. In 2002, Cabinet authorized the Minister to commence devolution discussions with the GNWT and the Aboriginal Summit, representing all regional Northwest Territories (NWT) Aboriginal groups. In 2005, Cabinet revised the mandate allowing for an increase in ongoing funds to be sourced from the fiscal framework and authorized payments in the form of grants to the GNWT and to the Aboriginal Parties. In November 2010, Cabinet authorized the Minister to sign an Agreement-in-Principle, which was executed in January 2011. In June 2013, Cabinet authorized the Minister to sign the final Devolution Agreement on behalf of the Government of Canada for implementation on April 1, 2014. Cabinet also approved a revised funding profile to be sourced from a combination of existing A-Base funding and funds previously set aside in the fiscal framework. Cabinet also authorized Justice Canada to draft legislation to give effect to Northwest Territories Lands and Resources Devolution.

In 2008 Cabinet authorized a mandate for the Minister of Indian Affairs and Northern Development to sign the Nunavut Protocol Accord. On September 8, 2008 the Protocol Accord was signed by the Government of Canada, the Government of Nunavut and the Nunavut Tunngavik Incorporated. The mandate authorized a multi phased approach to devolution in Nunavut.

The execution of any devolution Framework Agreement, Protocol Accord, Agreement-in-Principle and or final Devolution Agreement commits Canada to financial and non-financial obligations necessary to accomplish the devolution initiative. In addition, due to its participation in the devolution process, the Government of Canada is obliged to have due respect for any potential duty to consult requirements of Section 35 of the Constitution Act (Canada) 1982.

These mandates all recognize that devolution is key to the political evolution of all three territories. The Department of Indian Affairs and Northern Development is acting on the Cabinet direction to establish this grant authority as the payment instrument to:

Aboriginal Affairs and Northern Development Canada is satisfied that the Government of the Northwest Territories, Government of Nunavut and Aboriginal Groups have been fulfilling the terms and conditions of annual grant and or contribution agreements utilized in the devolution process since the fiscal year 2002-2003 including all accountability requirements as verified by the audits.

Aboriginal Affairs and Northern Development, Canada, the Government of the Northwest, Government of Nunavut and the Aboriginal groups believe that utilizing grant agreements is appropriate to facilitate funding given the government to government relationships involved in devolution discussions. Utilizing grants eliminates unnecessary administrative requirements for all Parties and enables the Parties to better cash manage and plan for the devolution initiative.

The Agreement-in-Principle and final Devolution Agreement clearly outline ongoing and one time funding and transitional activities for the Government of the Northwest Territories and Aboriginal parties, decreasing the possibility of re-allocations of funds to other government priorities. Such would be the case for the Nunavut devolution process. Flexibility is required such that the grant funding keeps pace with the devolution negotiations and implementation, necessary transitional items and respect for Canada's potential duty to consult.

Given the low level of risk and in an effort to increase efficiency and service to Canadians, the Northern Affairs Organization-Department of Indian Affairs and Northern Development developed this Grant Authority consistent with the 2008 Treasury Board Policy on Transfer Payments. The immediate benefits for the Aboriginal Affairs and Northern Development, Canada, the Government of the Northwest Territories, Government of Nunavut and Aboriginal groups include respect for approved grant funding arrangements, operating within the spirit and intent of a devolution Framework Agreement, Protocol Accord, Agreement-in-Principle and Final Agreement and a reduction of the administrative and reporting burdens (a key aspect of the 2008 Policy on Transfer Payments).

2. Legal and Policy Authority

3. Purpose, Program Objectives and Expected Results

The purpose of the grant is to discharge the Government of Canada's financial obligations with respect to its financial commitments in a devolution Framework Agreement / Protocol, AiP, Final Agreement or other initiative to advance the political development and evolution of the territories and support consultations with Aboriginal Groups and other stakeholders necessitated by the devolution process. The objective of the grant is to provide a mechanism through which funds are provided for these purposes. Funding will be provided to recipients to achieve specific objectives in support of the advancement of devolution and political development.

A performance measurement strategy for devolution will include specific performance indicators for grants. For territorial governments and Aboriginal Parties participating directly in negotiations, performance will be linked to the advancement of devolution activities.

This includes the advancement of main table negotiations, participation in working groups, the completion of listed tasks and the number of Parties participating in negotiations. Performance indicators for grants to Aboriginal groups and stakeholders to fund consultations will be based upon the number of groups who participate in consultation activities, including quality of consultation feedback, due diligence, number of issues discussed and level of participation informal meetings.

DIAND would provide the GNWT and eventually the Government of Nunavut grants to pay for DIAND's obligations under a devolution agreement / Agreement-in-Principle. In addition, DIAND may provide grant funding directly to other stakeholders.

The grant allows the GNWT and Aboriginal Groups to undertake activities set out in the AiP and final Devolution Agreement which are necessary in order to ensure a seamless devolution. Grants provided directly to other stakeholders respect Canada's potential duty to consult. This would also be the case for Nunavut once their devolution process advances.

The Grant program will enable DIAND to provide financial support to territorial governments along with Aboriginal and other stakeholders in order to advance devolution of land and resource management to the GNWT and Government of Nunavut.

The activities funded through this grant contribute to program-level outcomes in DIAND's Program Activity Architecture. This grant authority is located in The North Strategic Outcome, within the Northern Governance and People Program Activity, under the Political Development and Intergovernmental Relations Sub Activity. This program contributes to the Governance pillar of Canada's Northern Strategy "through ongoing devolution and self-government negotiations, Canada continues to work with all partners to create practical, innovative and efficient governance models in the North".

The expected result of the program will be "Devolution of land and resource management to Government of Northwest Territories", which will be measured using the performance indicator "Completion of devolution phases in NWT against the five phases devolution process (5-phases process: Protocol, AiP, Final Agreement, Legislation and Implementation)".

4. Eligibility

The GNWT, Government of Nunavut and Aboriginal groups participating in devolution initiatives would be the primary recipients. Other recipients could include stakeholders the Government of Canada agrees to fund in respect of the potential duty to consult.

In respect of either Northwest Territories or Nunavut devolution exercises such recipients may also include regional, community and transboundary Aboriginal Groups, governments, corporations, and other stakeholders. Beneficiaries are the recipients, residents of the territories and all Canadians as governance in the North evolves.

The eligible initiatives and projects include:

5. Type and Nature of Eligible Expenditures

Eligible expenditures include the following:

All expenditures on the activities included in a devolution AiP or final Devolution Agreement. Such activities are included in Chapter 11 of the Northwest Territories AiP (see Appendix C of the Treasury Board Submission).

Canada's share of funding required to support participation in devolution discussions of Northwest Territories and Nunavut Aboriginal groups, governments, corporations or other stakeholders.

Transfers of any and all one time and ongoing funding committed in any Northwest Territories or Nunavut devolution AiP and/or final Devolution Agreement that are not incorporated in the Territorial Formula Financing arrangements. Escalation for such funding, if any, shall be as identified in a devolution AiP and/or final Devolution Agreement.

All expenditures necessary for the Government of Canada to respect its potential duty to consult pursuant to Section 35 of the Constitution. Such may include but is not limited to negotiation/engagement support, chief negotiator(s), legal counsel, research support, policy development, travel, accommodation, meals, meeting facilities and any other expenditures acceptable by Canada. It includes direct expenditures by the Government of Canada and grants transferred to other stakeholders.

Expenditures to any recipient necessary to advance the political evolution of the territories, particularly as they pertain to devolution.

6. Total Canadian Government Funding and Stacking Limits

Stacking limits do not apply as the Department of Indian Affairs and Northern Development provides 100% of the funding to support the Government of Canada's legal obligations for these activities.

7. Method for Determining the Amount of Funding

Pre-Devolution Phase – One Time Funding:

The 2010 Northwest Territories devolution mandate provides that, respectively, the Government of the Northwest Territories (GNWT) to receive $8 million and Aboriginal Parties to receive $2 million in one time transitional funding prior to the effective date of devolution. The timing of these transitional funding transfers would be confirmed during final Devolution Agreement discussions.

For the GNWT, an amount up to $2 million per year in one time transitional funding (for four years) as per the intention to conclude final Devolution Agreement over two years and to implement devolution over an additional two years. This negotiated amount is sufficient to support the GNWT's participation through the legislation and implementation phases of devolution.

For Aboriginal Parties participating in devolution discussions, an amount up to $500,000 per year in one time transitional funding (for four years) to be allocated among all participating Parties is considered appropriate to support participation in the devolution process through the legislation and implementation phases.

Amounts to support Nunavut devolution would be specified in an AiP, Devolution Agreement or similar document at some time in the future.

Post-Devolution Phase – One Time and Ongoing Funding:

The 2010 mandate provides for the Government of the Northwest Territories to receive $18.5 million and for Aboriginal Parties to devolution to receive $2 million in one time transitional funding after the effective date of devolution. The annual allotments of these funds would be finalized in final Devolution Agreement discussions.

The mandate and AiP provides for the transfer of ongoing annual funding after the effective date of devolution in the amounts of $65.3 million annually to the Government of the Northwest Territories and $3 million annually to Aboriginal Parties to the final Devolution Agreement.

Amounts to support Nunavut devolution would be specified in an Agreement-in-Principle, Devolution Agreement or similar document at some time in the future.

General requirements applicable to both devolutions:

In the event the above amounts are changed in the final Devolution Agreement, grant payments will be adjusted to accommodate and reflect such circumstances.

Grants are to be adjusted based on provisions for any escalation of the annual ongoing funding to the GNWT, the Government of Nunavut or Aboriginal Parties to a final Devolution Agreement.

Care will be taken to ensure that funding keeps pace with progress on the initiative or project and the allocations are sufficient to cover all potential Aboriginal signatories to the final Devolution Agreement.

Funding to support participation of Aboriginal Groups in a devolution process will be as agreed-to by the Governments of Canada and either the Northwest Territories or Nunavut Government and the participating Northwest Territories regional or community Aboriginal groups or participating Nunavut Aboriginal groups.

In the coming years, DIAND would likely gain Cabinet approval for Nunavut Devolution to proceed further. Such a mandate would provide further clarification and funding levels towards Nunavut Devolution. Grant payments to any recipient in respect of Nunavut devolution are as identified in such a mandate and/or in any devolution agreement or as agreed to by Canada and the Government of Nunavut.

Funding to respect Canada's potential duty to consult or for the political evolution of the territories, including Nunavut devolution, will be determined on a case specific basis during the devolution process.

8. Maximum Amount Payable

Pre-Devolution Phase – One Time Funding:

Under this Grant program, the maximum amount payable per eligible recipient, in any one fiscal year prior to the effective date of devolution, is $10 million dollars annually. This amount may vary where amounts payable annually will align with levels negotiated between Canada and the respective territorial government. This amount is necessary particularly if devolution is to proceed one year sooner than currently targeted.

Post-Devolution Phase – One Time and Ongoing Funding:

The maximum amount of ongoing funding payable per eligible recipient in any one fiscal year after the effective date of devolution is $75 million dollars annually. This amount may vary where amounts payable annually will align with levels negotiated between Canada and the respective territorial government. This applies to either one time or ongoing funding identified in a devolution agreement.

The ongoing annual amounts may be adjusted after the effective date of devolution by any escalator included in a Devolution Agreement. This is not a factor for the funds requested in this submission and may need to be addressed at such time as a final Devolution Agreement is approved and implemented.

9. Basis on Which Payments will be Made

DIAND will enter into a Grant Agreement with each recipient ranging in duration from annual to five years.

The Grant Agreement will contain the following Terms and Conditions:

  1. Program Objectives;
  2. Eligible Expenditures;
  3. Basis and timing of payments: The DIAND reviews the Expenditure Plans and, if it is accepted, subsequently establishes the monthly payment schedule;
  4. Accountability Requirement.

10. Application Requirements and Assessment Criteria

No special application is required. The Department of Indian Affairs and Northern Development deems the Government of the Northwest Territories, Government of Nunavut, Aboriginal Groups and other recipients to have applied for this grant through their participation in the devolution processes and or discussions for the Government of Canada's potential duty to consult. Funding will be provided to the Government of the Northwest Territories, Government of Nunavut or any other recipient based on a devolution Agreement-in-Principle, Final Devolution Agreement, or as agreed to during devolution discussions.

11. Due Diligence and Reporting

Performance Measurement Strategies are being developed for all programs, consistent with the requirements in the Policy on Transfer Payments, as part of the phased-in approach to implement the renewed Policy on Transfer Payments.

No specific reporting requirements are necessary for this grant. The Parties' continued participation in devolution or consultation processes is sufficient to justify their receipt of continued funding.

Results will be measured against the performance indicators noted in section two of these terms and conditions.

12. Official Languages

Where a program supports activities that may be delivered to members of either official language community, access to services from the recipient will be provided in both official languages where there is significant demand and Part IV of the Official Languages Act is applicable. In addition, the department will ensure that the design and the delivery of programs respect the obligations of the Government of Canada as set out in Part VII of the Official Languages Act.

The AiP commits the GNWT to provide members of the public with communications and service in an official language of the NWT in accordance with the territorial Official Languages Act. As these languages include both English and French, no significant official languages issues are expected for the new transfer payment program as a result of approval of the AiP.

13. Intellectual Property

Where a grant is provided for the development of material in which copyright subsists, conditions for shared rights will be set out in the funding agreement.

14. Other Terms and Conditions

The continuation for these Terms and Conditions would be identified in the Departmental Plan for Transfer Payment Programs.

Multi year and or single year grant agreements would be utilized depending on circumstances on the relevant devolution file at the time funding is approved.

The Department of Indian Affairs and Northern Development may request information from the recipient from time to time that is deemed necessary to demonstrate progress towards completing the devolution initiative.

Recipients will demonstrate their eligibility for grants through proactive participation in the devolution process. No other such information will be requested from recipients to demonstrate eligibility criteria.

Date modified: