Fiscal Relations

It’s time for a new relationship between First Nations and Canada, and that includes a new fiscal relationship. 

First Nations are seeking long-term sufficient, predictable and sustainable funding to support their citizens and build strong communities and strong nations. 

First Nations have been struggling under a 2% cap on annual funding increases for two decades. The cap did not keep pace with inflation or the needs of the fastest growing population in the country, forcing First Nations to try and do more and more with less and less. The result is a growing gap in the quality of life between First Nations people and Canada. This has not been good for First Nations or Canada. It was not consistent with the original nation-to-nation relationship based on partnership, mutual respect, mutual recognition and sharing. 

It’s time for a new, better approach. AFN National Chief Perry Bellegarde is working to close the gap in the quality of life between First Nations people and Canada, eliminating the funding gap, and establishing a new fiscal relationship with equitable escalators for ongoing funding.

At the AFN Special Chiefs Assembly in December 2015, Prime Minister Trudeau echoed this goal, saying: “It’s time for a new fiscal relationship with First Nations that gives your communities sufficient, predictable and sustained funding. This is a promise we made and a promise we will keep.” AFN resolution 70/2015 mandates the AFN “to establish a new fiscal framework and identify funding and programs to close the gap.” 

At the 2016 AFN Annual General Assembly, National Chief Bellegarde and INAC Minister Carolyn Bennett signed a Memorandum of Understanding (MOU) for a Fiscal Relations Working Group. 

Under the MOU, the AFN and INAC will examine options for a new fiscal relationship that will identify what “sufficient” funding means. It is not only about removing the 2% cap. It is about meeting real needs now and in the future. It is about changing the way financial allocations are determined. It means looking at the most effective and efficient ways for transferring funds to allow for strategic planning and getting results on the ground. It means addressing how First Nations governments deliver accountability to their citizens. It means ways to measure whether the gap is closing and how quickly that is happening. It means looking at all these areas and more. 

Through this work, a report and options for next steps will be presented to Chiefs-in-Assembly for review and further direction. Any recommendations from this work will not be binding. 

This page provides background and updates on this work.

Assembly of First Nations