Contributions to Support the Aboriginal Economic Development Strategic Partnerships Initiative
Terms and Conditions
In June of 2009, the Government of Canada released the Federal Framework for Aboriginal Economic Development (the Framework). The Framework provides for a focused, government-wide (whole-of-government) approach to better align federal investments, respond to new and changing economic conditions and lever partnerships in order to address persistent barriers that impede the full participation of Aboriginal people in the Canadian economy.
The Aboriginal Economic Development Strategic Partnerships Initiative (SPI) will assist to align investments under existing federal programming and services. This will be accomplished through the identification and prioritization of key sector specific economic opportunities across the country that would benefit from a whole-of-government approach to investment. The Federal Coordination Committee for Aboriginal Economic Development (FCC), established for the purpose of furthering the objectives of the Framework, will validate and prioritize opportunities for a whole-of-government approach to investment under the SPI.
In order for Aboriginal Canadians to maximize benefits from those prioritized opportunities, stakeholders will collectively identify the needs of communities to enable their full participation in shared priorities. In collaboration with Aboriginal stakeholders, federal partners will develop and implement informed and comprehensive work plans that are responsive to identified needs and that will assist communities in achieving their economic interests in relation to the identified opportunity. This will include the identification of available resources from all partners including existing federal programming. A lead department will be identified to coordinate the development and implementation of the work plan. The program will be specifically targeted to Aboriginal people.
Horizontal Management of the Program
More than twenty federal departments and agencies of the Government of Canada have mandates that include Aboriginal economic development. Existing programs and processes are not conducive to collaboration and do not facilitate the identification of shared priorities. This prevents the federal government from strategically targeting investments in economic opportunities that will maximize benefits for Aboriginal Canadians. Existing programs and processes also require clients to respond to multiple government application and reporting requirements for a single initiative, impeding responsive and timely federal investments and comprehensive performance measurement.
The use of horizontal terms and conditions to support specific opportunities under the Strategic Partnerships Initiative will reduce the need for proponents to prepare multiple applications, enter into separate decision making processes with various departments, and enter into several different funding arrangements each with their own reporting requirements, for participation in a single opportunity.
The purpose of these Terms and Conditions is to establish a horizontal mechanism that allows for the coordination of Government of Canada efforts on Aboriginal economic development initiatives and to set out the policy and criteria for the administration of financial assistance under the Strategic Partnerships Initiative of the Department of Indian Affairs and Northern Development.
The following departments and agencies are the federal Partners that may use these terms and conditions to participate in a Strategic Partnerships Initiative project so long as the initiative respects the department's mandate:
- Department of Agriculture and Agri-Food
- Canadian Northern Economic Development Agency
- Economic Development Agency of Canada for the Regions of Quebec
- Department of Fisheries and Oceans
- Department of Human Resources and Skills Development
- Department of Industry
- Department of Natural Resources
- Federal Economic Development Agency for Southern Ontario
- Office of the Federal Interlocutor
- Parks Canada Agency
- Status of Women Canada
- Western Economic Diversification
- Department of the Environment
- Canadian Environmental Assessment Agency
If the Strategic Partnerships Initiative project fits within a partnering department's mandate, then that department may choose to either: flow their existing resources to recipients following the established governance structure for decision making for the Strategic Partnerships Initiative; flow funding approved under their existing programming to a lead department; or retain their own relationship with recipients and flow funding through their existing programming directly to a client to support a component of a Strategic Partnerships Initiative project.
Where a Partner is the lead department for the purpose of making contributions to a recipient from existing federal programs or under the SPI, a Memorandum of Understanding will be established between the Partners to articulate roles and responsibilities with respect to the management of the project and the financial arrangement including monitoring and reporting requirements.Where applicable, lead departments will develop a single funding agreement using the horizontal terms and conditions to deliver the contribution dollars of all participating departments to the recipient. Lead departments will also be responsible for the collection and dissemination of recipient reports to partnering departments. Partnering departments will maintain responsibility for reviewing the report and accounting for its portion of funding and for reporting through their own Report on Plans and Priorities and Departmental Performance Reporting exercises.
For additional departments seeking future access to these horizontal terms and conditions, the Minister of Indian Affairs and Northern Development will exercise authority under section 6.3.2 of the Policy on Transfer Payments to add new departments or agencies, as applicable. DIAND will consult with Treasury Board Secretariat when new signatories are to be added and provide written confirmation to the President of Treasury Board confirming the addition. The Minister of the department being granted access to these horizontal terms and conditions will be copied on the correspondence to the President of Treasury Board. DIAND will ensure that all participating departments are provided with updated terms and conditions as required.
2.0 Legal and Policy Authority
- Department of Indian Affairs and Northern Development Act, RSC, 1985, c. I-6, s. 4
- Section 4 of the Department of Agriculture and Agri-Food Act
- Economic Development Agency of Canada for the Regions of Quebec Act (2005, c. 26)
- Department of Canadian Heritage Act (1995, c. 11)
- Department of Fisheries and Oceans Act (R.S., 1985, c. F-15)
- Department of Human Resources and Skills Development Act (2005, c. 34)
- Department of Industry Act (1995, c. 1)
- Department of Natural Resources Act (1994, c. 41)
- Parks Canada Agency Act (1998, c. 31)
- Western Economic Diversification Act (1985, c. 11 (4th Supp.))
- Department of the Environment Act (R.S.C. 1985, c. E-10)
- Canadian Environmental Assessment Act, 2012 (S.C 2012, c. 19, s. 52)
3.0 Purpose, Program Objectives and Expected Results
The Purpose of the Strategic Partnerships Initiative is to enable horizontal coordination of federal investments in Aboriginal economic development including the use of existing program resources to advance shared priorities and where it is deemed appropriate and necessary, resources from the Strategic Partnerships Initiative budget will be used to address gaps which cannot be covered by existing resources.
The identification of priority opportunities for investment as well as the horizontal approach to the processing of applications, project monitoring and reporting will directly advance two key strategic priorities of the New Federal Framework for Aboriginal Economic Development: Forging New and Effective Partnerships and Focusing the Role of Government. In addition, the SPI will further the objectives of the Framework by ensuring:
- opportunities for investments under the SPI are systematically targeted and assessed;
- partners involved in specific SPI projects continue to be engaged throughout the development, implementation and completion of the project;
- the experience and resources of willing partners to take advantage of economic opportunities are brought together to advance SPI projects; and
- clear direction, greater coordination, better collaboration and increased linkages are made among federal initiatives across departments and agencies to advance SPI projects.
The Objective of the Strategic Partnerships Initiative is to increase economic development opportunities for Aboriginal Canadians by stimulating partnerships between federal and non-federal partners within key sectors of the Canadian economy. This is intended to lead to greater participation by Aboriginal Peoples in the Canadian economy through: planned and integrated economic development activities; the identification of economic and business opportunities; investment in economic infrastructure; the creation and expansion of viable businesses; and investments and partnerships in economic and resource opportunities. This strategic approach to making investments in Aboriginal economic development will also lead to the alignment of project planning cycles across the federal government, with the intent of maximizing the results of federal investments and minimizing the duplication of efforts and overlap in federal programming. Further, planned use of existing program resources will facilitate the levering of non-federal investments in projects.
The objective is linked to DIAND's Strategic Outcome - "The Economy". The SPI contributes directly to DIAND Program Activity 4.2 "Community Investment".
The desired results from the SPI include:
- the identification of economic and business opportunities;
- organizational capacity of Aboriginal stakeholders to engage with partners on identified opportunities;
- aligned federal approach to investments in Aboriginal economic development; and
- investments and partnerships in economic and resource opportunities.
Performance indicators for the SPI include:
- the number of economic opportunities identified;
- number and dollar value of arrangements under SPI;
- number of partnerships established;
- total dollar value of projects (and sources of funding levered); and
- number of Aboriginal communities participating in SPI opportunities.
4.1 Eligible Recipients
Eligible Recipients under the SPI include:
- Aboriginal communities;
- Tribal Councils;
- Governments of self-governing First Nations;
- Local governments of Inuit communities;
- Qulliit Nunavut Status of Women Council;
- Aboriginal for profit and not-for-profit corporations, partnerships, associations, co-operatives and institutions which are majority owned and controlled by Aboriginal people; and
- Aboriginal businesses, partnerships and joint ventures.
DIAND or SPI Partners may consider negotiating fixed or flexible contribution funding arrangements with eligible recipients as appropriate.
4.2 Eligible Initiatives and Projects
Eligible projects under the SPI include:
- pre-feasibility and feasibility studies; diagnostic studies; environmental evaluations; information gathering; proposal development; market assessments; strategic, business and financial planning; community economic development planning; negotiations; and research activities;
- organizational capacity for the Aboriginal communities or organizations mandated to lead and/or support the implementation of economic development projects;
- skills development including management and technical training;
- construction, architectural, engineering and project design activities;
- economic infrastructure development; and
- establishment, expansion or modernization of an Aboriginal business or joint venture.
Preference will be given to initiatives for which at least one third of funding (financial and in-kind contributions) is sourced from non-federal project participants.
Ineligible initiatives under the SPI include: community infrastructure development not related to economic development initiatives such as public office buildings, recreation and friendship centres, gaming houses, and public halls; ongoing operating costs of Aboriginal organizations; or other initiatives that do not result in an economic benefit to Aboriginal people.
5.0 Type and Nature of Eligible Expenditures
Federal departments and agencies will collaborate with Aboriginal stakeholders to pursue strategic approaches to investment in identified sector specific economic opportunities to enable Aboriginal Canadians to fully participate in and benefit from those opportunities. In collaboration with Aboriginal stakeholders, federal partners will develop and implement informed and comprehensive strategies that are responsive to identified needs and that will assist communities to achieve their economic interests.
Eligible expenditures will be those that, in the opinion of the Partners, are required to carry out the project.
Eligible expenditures include, but are not limited to: the costs of engaging consultants and other qualified professionals; technical services; training and skills development; costs of infrastructure development including costs related to the planning, design, construction or repair; capital costs; machinery and equipment; operating costs; salaries and wages and benefits; travel, including accommodation, meals, and allowances; conferences, workshops and meetings related to Aboriginal Canadians achieving their economic interests; and any other cost which the Partners deem reasonable and required to complete the project.
6.0 Total Canadian Government Funding and Stacking Limits
The level of funding provided to recipients will be proportionate to the direct economic development benefits that are anticipated to accrue to the recipient and/or the Aboriginal community.
Contributions under these terms and conditions will be determined based on the minimum level required to ensure that the project proceeds in the time-frame, scope and location proposed and that the project furthers the attainment of the stated program objectives and expected results. The assessment of the required level of assistance will take into consideration the total government assistance (federal, provincial and municipal assistance) towards the eligible costs supported by the contribution. This includes assistance such as all grants and contributions being considered, implicit subsidies, forgivable loans, investment tax credits and any other grant or contribution.
The government stacking rule will apply to this program. In no instances will the total government assistance be allowed to exceed the eligible costs. Maximum federal government assistance is 100% of eligible project costs.
All recipients of financial assistance will be required to inform the Minister of any other government (federal, provincial/territorial, municipal) financial assistance received or requested prior to the approval of the contributions. Furthermore, the contribution agreements will contain a continuing disclosure obligation (for the duration of the agreements) concerning other government assistance. Annual financial reporting shall show all sources of funding received.
Contribution agreements will provide for the right of the Minister to reduce the contribution to the extent of any additional government assistance received by the recipient or require the recipient to repay the excess and the amount requested would constitute a debt due to the Crown and will be recovered as such. Failure to disclose the information on other government assistance would constitute a default. Interest charges, as defined in the Interest and Administrative Charges Regulations, will be applied to overdue amounts.
7.0 Method for Determining the Amount of Funding
Contribution amounts related to Strategic Partnerships Initiative projects will be determined at the working group level through the collaborative work planning process involving Aboriginal stakeholders and federal departments. The contribution amounts will be determined based on a due diligence assessment of the reasonable costs to undertake the activities identified in the work plan, the need for federal funding, and the potential benefits to be accrued.
8.0 Maximum Amount Payable
The maximum contribution to an eligible Recipient for a project will not exceed 100% of the eligible project costs and may not exceed $10 million.
9.0 Basis on Which Payments will be Made
Payments will be made based on the achievement of pre-determined performance expectations or milestones and/or documented claims for reasonable eligible costs incurred, to be submitted by the recipient not more frequently than monthly.
Where payment is based on a claim for costs incurred, each claim is to be accompanied by a brief report of the work completed and details of all costs being claimed and shall be substantiated by such documents as are satisfactory to the lead Partner.
A holdback of a portion of any payment under a contribution funding arrangement will be realized when deemed appropriate based on the risk of non-performance or overpayment.
Where it is essential to the achievement of the program objectives and specifically provided for in the funding arrangement, advance payments may be made in accordance with the cash management provisions of the Directive on Transfer Payments.
The final payment will be made only after the lead Partner is satisfied that the Recipient has met all the requirements of the contribution funding arrangement, and on receipt and acceptance of a final report(s) and/or financial statement(s).
Where DIAND is the lead department, and for the cases in which the recipient is a First Nation or Tribal Council, DIAND funding arrangements do not have explicit hold back provisions. Instead, recipients are to be advised in the funding arrangement that DIAND may withhold funding otherwise payable for non-receipt of annual audited financial statements and other reports.
10.0 Application Requirements and Assessment Criteria
10.1 Application Requirements:
Recipients will be required to submit sufficient information to determine that they are eligible recipients as well as any information required to assess the recipient and/or the project against the program assessment criteria. This includes:
- full name and description of the applicant;
- information on the financial situation of the applicant;
- a description of the management and organizational capacity of the applicant;
- a detailed description of the proposed project and description of activities to be undertaken;
- relevant documentation related to any partnership arrangements and commitments;
- timelines for the project;
- a cost forecast of the project as well as details of financing, including all sources of funding for the project;
- anticipated economic benefits of the project, including expected outcomes and proposed performance measures; and
- any other information considered necessary by the federal Partners.
In some cases, additional information may be required, which may include:
- a strategic or business plan that addresses: uses of funds; identification and justification of costs; management capacity; business organization; worker capacity; suppliers; provision for unexpected contingencies; products and services, markets and sales plans; revenues, expenses and profit expectations; documentation related to legal structure, ownership and control of the business; and documentation related to the business's equity gap;
- a plan that addresses project design;
- demonstration of compliance with laws and regulations;
- environmental effects and proposed mitigation measures; and
- land tenure requirements.
These criteria will be communicated to recipients collectively by federal partners. This will enable the recipient to make only one application to all federal partners that will address all relevant application requirements. A lead department will distribute the application to partnering departments as required.
10.2 Assessment Criteria:
Types and levels of assistance will be commensurate with the assessment of the risk involved, the resources of the recipient and the benefit to the Aboriginal community. Assistance will generally be determined on the basis that the amount and level are the minimum required to ensure that the project proceeds and is keeping with the forecast benefits to the recipient and/or Aboriginal community.
Requests for assistance will also be assessed on the basis of their relevance to the objectives of the SPI. Assistance will be provided only to those initiatives that would not otherwise proceed in the proposed location, proposed scope, or proposed time without such assistance.
The following assessment criteria will be used as appropriate and relevant to determine the need, the amount and level, and the type of assistance to be offered:
- the project or activity has the potential for generating net economic benefit to Aboriginal people in Canada;
- the demonstrated management capacity and business expertise of the eligible recipient in relation to the project;
- the ability of the eligible recipient to obtain financing for the project;
- the amount of any federal, provincial or municipal assistance or tax credit that is likely to be relevant to the project;
- the resources of the eligible recipient that could reasonably be expected to be contributed to the project;
- the recipient has demonstrated that the assistance is necessary to ensure that the project or activity proceeds with the desired scope and timing in the desired location;
- the impact of the proposed project on the environment;
- the relationship of the project to federal government national and regional economic strategies and priorities; and
- any other criteria that the federal Partners may deem appropriate.
11.0 Due Diligence and Reporting
The Recipient will be requested to submit data, schedules, plans and reports in sufficient detail to enable the federal Partners to:
- assess the progress of the project;
- carry out the post-completion monitoring called for in the funding arrangement; and
- evaluate the effectiveness of the contributions.
A monitoring plan will be developed for each project funded under the Strategic Partnerships Initiative. The purpose of the monitoring plan will be to provide periodic information regarding the progress of the initiative against the milestones proposed in the strategy and to identify unanticipated risks or impediments to achieving intended results. The proposed level of monitoring will correspond to the level of risk associated with the project.
A federal lead will be identified for each of the specific opportunities to oversee the advancement of the strategy, its implementation and coordination of the federal departments and agencies. The federal lead will also undertake the role of reporting on the achievement of key milestones and outcomes identified in the strategy to other Partners.
Reporting requirements will be determined, on a project basis, collectively by the partners. Progress and financial reports will be required at a minimum on an annual basis by recipients of Strategic Partnerships Initiative funding. Recipients will also be required to submit a final report at the conclusion of a project, for review and acceptance by the lead department in consultation with the participating departments in accordance with the terms of the funding arrangements.
Where reporting information will be shared by a number of departments, a clause will be added to the contribution funding arrangement to ensure that the recipient agrees to the sharing of information among partners.
12.0 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.
13.0 Intellectual Property
Where a contribution is provided for the development of material in which copyright subsists, conditions for shared rights will be set out in the funding agreement.
14.0 Repayable Contributions
The objective of SPI as set out in section 3 is to increase economic development opportunities for Aboriginal Canadians by stimulating partnerships between federal and non-federal partners within key sectors of the Canadian economy. Notwithstanding the above, profits may ultimately accrue and this may be beyond the primary intent of the initiative. Where a commercial entity is the recipient of a contribution under this program, and where generation of profits is expected or likely to occur, the contribution will be partially or fully repaid, depending on the outcome of the project. Contribution agreements will contain the amount of the repayment, the terms of repayment, and a description of the processes to be used to monitor funding agreements under which repayments are due.
Contributions to commercial entities will normally be conditionally repayable. Repayment is provisional upon specific conditions occurring or being met. The amount to be repaid is to be commensurate with benefits which accrue to the recipient from the project.
Specifically, the amount to be repaid will be based on success factors such as the achievement of sales forecasts, the expected return on investment, the recipient's financial position and ability to repay.
Where due diligence indicates that the commercial entity's ability to repay the contribution is not dependent on the achievement of the success factors of the project, the contribution will be unconditionally repayable. Unconditionally repayable contributions are those which must be repaid, in part or in full, irrespective of the benefits resulting from the project.
The establishment of a repayment period will be based on such factors as the useful life of the funded assets, the duration of the project, the period during which the recipient will realize the benefits of the project, and the recipient's financial position and ability to repay.
The terms of repayment are to be based on a fixed time schedule with due consideration to any seasonal nature of a recipient's operation with provisions for full repayment by a specified due date, not exceed a period of 10 years from the project's completion date.
Recipients may be exempt from the requirement to repay a contribution when one or more of the following apply:
- the contribution is less than $100,000 and the administrative burden of repayable contributions is not justified;
- the recipient is a not-for-profit organization;
- the benefits from the contribution accrue broadly rather than directly to the recipient; and
- the recipient is an Aboriginal controlled business whose articles of incorporation do not permit dividends to be paid or distributed to shareholders.
The Department's corporate finance systems will be used to assist in with the verification of invoice dates, appropriate follow-up on overdue accounts, viability reviews, collections or rescheduling decisions, and the handling of defaulted accounts.
15.0 Redistribution of Contributions
Where a recipient delegates authority or further distributes contribution funding to an agency or a third party (such as an authority, board, committee, or other entity authorized to act on behalf of the recipient), the recipient shall remain liable to the Department for the performance of its obligations under the funding agreement. Neither the objectives of the programs and services nor the expectations of transparent, fair and equitable services shall be compromised by any delegation or redistribution of contribution funding.
Recipients have full independence in the selection of such third parties and will not be acting as an agent of the government in making distributions.
16.0 Other Terms and Conditions
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