Frequently Asked Questions - The Proposed Policy on the Transfer of Capital Moneys Through Section 64(1)(k) of the Indian Act
Q.1. What is the proposed Policy on the Transfer of Capital Moneys Through Section 64(1)(k) of the Indian Act ?
A.1. The proposed Policy on the Transfer of Capital Moneys through Section 64(1)(k) of the Indian Act provides a mechanism for the Government of Canada to provide First Nations with greater control over the administration of their current and future capital moneys once transferred through section 64(1)(k) of the Indian Act. First Nations would have the option to use the new approach or they could continue to have their moneys administered under the Indian Act. The policy outlines the criteria that will be considered in the exercise of Ministerial discretion in regards to the transfer of all current and future capital moneys from the Consolidated Revenue Fund to a trust created by a First Nation for its use and benefit.
Q.2. Why is the Government developing the proposed policy?
A.2. The Government of Canada recognizes the importance of streamlining processes with increased flexibility so that First Nations can leverage economic development opportunities. Enabling First Nations to manage their capital moneys will provide First Nations with the flexibility required to respond to community needs and pursue economic development opportunities.
Q.3. What are the objectives of the proposed policy?
A.3. The policy empowers First Nations by providing another option to gain greater responsibility and control over the management and expenditures of their current and future capital moneys within the current legislative framework.
Q.4. How did the Government develop the proposed policy?
A.4. Since the fall of 2011, Aboriginal Affairs and Northern Development Canada has been working on an initiative to improve the management of Indian moneys. The Department focused on options consistent with First Nations' aspirations for increased flexibility in accessing and managing their capital moneys. Through discussions with both internal and external experts as well as a number of interested First Nations, the most promising approach was considered to be using section 64(1)(k) of the Indian Act.
Q.5. How are capital moneys currently administered?
A.5. First Nation capital moneys are held in the Consolidated Revenue Fund and may only be expended for the benefit of the First Nation as a whole. Pursuant to section 64(1) of the Indian Act, a First Nation may request access to their capital moneys by submitting a Band Council Resolution (BCR).
Q.6. How is this policy different from the First Nations Oil and Gas and Moneys Management Act?
A.6. This policy applies only to the transfer of capital moneys pursuant to Section 64(1)(k) of the Indian Act.
Under the First Nations Oil and Gas and Moneys Management Act, participating First Nations gain control and management over both their capital and revenue moneys.
Q.7. What are the benefits for First Nations that choose to opt into the proposed Policy on the Transfer of Capital Moneys Through Section 64(1)(k) of the Indian Act?
A.7. The benefits for First Nations opting into the policy would include:
- the transfer of authority over capital moneys expenditures from the Minister of Aboriginal Affairs and Northern Development Canada to independent trusts created by First Nations
- more flexibility in the management of their moneys
- quicker access to their moneys
- the ability to invest moneys to enhance the ability of communities to address their current needs and aspirations for the future
- the potential for larger returns on moneys invested
Q.8. Once under this proposed policy, can a First Nation revert back to having the Department manage the capital moneys using the Consolidated Revenue Fund (CRF)?
A.8. No. After a First Nation has taken over the management of its capital moneys under the proposed policy, it will not be possible for them to return to the Indian Act regime.
Q.9. Would this proposed policy be mandatory?
A.9. This policy is optional. First Nations can choose to use this option or continue to have their moneys managed under the Indian Act.
Q.10. Now that the engagement period has ended, what are the next steps? If/when will the proposed policy be implemented?
A.10. The Department is currently reviewing the input gathered. Feedback will be used to shape the proposed policy.