Placemat - Evaluation of the new fiscal relationship grant

Relevance

1. The NFR Grand is largely aligned with federal government and First Nations priorities related to increased self-determination of First Nations due to its enhance predictability and flexibility of funding.

Effectiveness & Efficiency

2. The NFR Grant eligibility criteria and process are considered by most groups to be appropriate but pose challenges for some First Nations.
3. While the NFR Grant escalator has provided over $100M in additional program funding (by 2024-25), several limitations were identified with the escalator design.
4. Many Grant First Nations have increase their financial administration capacity through their involvement in the NFR Grant.
5. Some Grant First Nations have used the flexibility of the NFR Grant to adapt, create, and expand programs and services to better meet the needs of their First Nations particularly due to their ability to retain funds, reduced reporting to ISC, improved financial controls, and ability to receive advance funds on April 1.
6. ISC communication and relationships with Grant Fitst Nations have seen both improvements and ongoing challenges under the NFR Grant.
7. The NFR Grant aimed to shift away form compliance-based reporting to ISC, and accountability under the Grant is meant to primarily from First Nations governments to their own citizens. It is unclear if Grant First Nations have increased their accountability to their members.
8. Capacity shortfalls limit the adoption, implementation, and impact of the NFR Grant.
9. While most Grant First Nations leaders and administrators view the NFR Grant positively, caution is warranted given ongoing challenges, including unknown member perspectives and ISC's evolving oversight role.

Recommendation 1:

In collaboration with other departmental governance capacity-building initiatives, develop options for funding to support First Nations, including with additional financial governance capacity, to adopt and implement the Grant.

Action 1.a) In collaboration with Indigenous partners, ISC will develop a method for estimating costs to meet and maintain Grant eligibility requirements.

Action 1.b) In collaboration with Governance Modernization and other capacity building initiatives, ISC will seek to leverage funding from existing programs and other initiatives aimed at supporting First Nations governance capacity and/or develop options to establish dedicated funding supports to adopt and implement the Grant.

Recommendation 2:

Enhance First Nations' awareness and understanding of the NFR Grant and its processes.

2.1. Work with First Nations, the AFN, FMB, and other Indigenous-led organizations to develop and deliver more training for First Nations in adopting and implementing a FAL and in fully leveraging the NFR Grant flexibility to design and delver programs.

Action 2.1 a) In collaboration with Indigenous partners, a toolkit will be developed to increase recipients' awareness and understanding of financial administration law elements, as well as the NFR Grant's flexibility benefits and reporting requirements.

Action 2.1 b) In collaboration with Indigenous partners, annual training will be made available to NFR Grant recipients on the FAL implementation requirements.

2.2. Enhance training of regional ISC staff on the reporting requirements, processes and flexibility options with the NFR Grant, particularly among those with direct contact with First Nations and/or those whose programs or initiatives are or could be implicated in the Grant, to ensure accurate and consistent communication with First Nations partners.

Action 2.2 b) Enhance training of regional ISC staff on the reporting requirements, processes and flexibility options with the NFR Grant, particularly among those with direct contact with First Nations and/or those whose programs or initiatives are or could be implicated in the Grant, to ensure accurate and consistent communication with First Nations partners.

2.3. Improve coordination of the NFR with other self-determination initiatives, such as self-government, education transformation, and health transformation, to ensure Indigenous partners are aware of the options available, how these initiatives compare and work together.

Action 2.3a) ISC will work with program sectors and CIRNAC on communication materials and practices that outline the various self-determination initiative options and how they intersect, to ensure partners are able to make informed choices.

Recommendation 3

Extend Grant benefits to more programs and communities.

3.1. Accelerate review of other programs within – and possibly beyond – ISC for potential inclusion in the NFR Grant.

Action 3.1. a) ISC will develop a methodology and complete an analysis of ISC programs to determine which are a good fit for potential inclusion in the Grant.

Action 3.1 b) ISC will develop a toolkit to help ISC program sectors prepare funding for potential inclusion in the Grant.

3.2. Develop recommendations for how beneficial features of the Grant (i.e., financial flexibility, April 1 disbursements, retained funding at year end, predictable escalators, renewal provisions, longer agreements of up to 10 years) could be extended to non-Grant recipients and programs to support the progress of all First Nations towards self-determination.

Action 3.2. a) In collaboration with Indigenous partners, ISC will develop a scoping paper that explores potential options for consideration, including costing analysis, for supporting self-determination of all First Nations by expanding access to funding approaches that provide long-term predictability, flexibility, and responsiveness to cost drivers. This study would elaborate a spectrum of potential options for consideration ranging from review of contribution programs, expansion of grant or NFR-Grant authorities, and other funding models including statutory approaches.

Recommendation 4

In collaboration with First Nations partners, review the escalator formula and update is as appropriate to better reflect cost drivers, and work across sectors and with CIRNAC towards better alignment of funding escalators.

Action 4.a) In collaboration with Indigenous partners, ISC will review population growth measures to determine if they adequately reflect both the differing cost realties of providing services to on- and off-reserve populations and develop options for alternative escalator measures for the growth of First Nations' population.

Action 4. b) In collaboration with Indigenous partners, and CIRNAC, ISC will review inflation measures to determine if they adequately reflect both the differing cost realities of rural and remote communities and the inflation differences across provinces and territories, and if appropriate, develop options to update the Grant escalator.

Action 4. c) In collaboration with CIRNAC, ISC will review and compare the similarities and differences between NFR Grant and self-government escalation methodologies, and if appropriate, develop options to update the Grand escalator.

Recommendation 5

Continue efforts to co-develop an approach to mutual accountability in the context of the NFR Grant, in order to clarify governance roles, strengthen community-level transparency, and advance the Grant's core objective of supporting self-determination.

Action 5.a) In collaboration with Indigenous partners, ISC will develop elements of a mutual accountability relationships and deliverables, including for the NFR Grant.