ADURA
Let's Compare:
The Anishinabek Nation Fiscal Agreement vs Comprehensive Funding Agreements
- Jide Afolabi
With the ratification of the Anishinabek Nation Governance Agreement (ANGA) by your community, funding becomes available through the Anishinabek Nation Fiscal Agreement (ANFA), providing the finances needed to do a good job of law-making and program implementation in the areas of citizenship, language and culture, elections, government operations, adjudication, registry services, freedom of information, and financial administration.
Of course, the ANFA won’t cover all of the programs operated by your First Nation.
So, you’ll be operating under at least two funding arrangements. For most communities, the other arrangement will be through a Comprehensive Funding Agreement (CFA), delivering Indian Act funding.
So, you’ll be operating under at least two funding arrangements. For most communities, the other arrangement will be through a Comprehensive Funding Agreement (CFA), delivering Indian Act funding.
The idea is that over time, as your community approves self-government deals with Canada in more and more areas, the role and coverage of the ANFA will expand while the role and coverage of CFAs become less, or perhaps end entirely.
So, how are the ANFA and CFAs similar, and how do they differ?
What, on fiscal matters, can you expect as your First Nation starts to implement the ANGA?
One thing that is important to note right out the gate is that some of the ways in which the two agreements differ only matter from a “technical” perspective. Others, however, have more tangible consequences.
What, on fiscal matters, can you expect as your First Nation starts to implement the ANGA?
One thing that is important to note right out the gate is that some of the ways in which the two agreements differ only matter from a “technical” perspective. Others, however, have more tangible consequences.
1. Legal Status and Capacity
First off, there is the way CFAs refer to First Nations. This is called “legal status and capacity”.
CFAs will typically refer to each First Nation as “a band as defined in the Indian Act”.
It may be a technical thing but this is basically Canada saying that rather than a First Nation having its own sovereignty, the First Nation is what Canada - through the Indian Act - says it is.
In comparison, the ANFA simply refers to “the First Nations set out in Schedule A of the Anishinabek Nation Governance Agreement”.
CFAs will typically refer to each First Nation as “a band as defined in the Indian Act”.
It may be a technical thing but this is basically Canada saying that rather than a First Nation having its own sovereignty, the First Nation is what Canada - through the Indian Act - says it is.
In comparison, the ANFA simply refers to “the First Nations set out in Schedule A of the Anishinabek Nation Governance Agreement”.
There is no reference to the Indian Act, there is no attempt by Canada to define what a First Nation is - since that is rightly for each First Nation to do on its own.
2. Canada's Role in Designing Programs
Second, there is the role Canada takes beyond funding - that is, in developing the actual programs and services that get funded.
If your First Nation is in the Anishinabek Nation Education Agreement (ANEA), you’ll notice that, beyond funding, Canada no longer takes a role in education programming. That is now the role of the Kinoomaadziwin Education Body (KEB).
A similar thing will happen with governance.
So, while CFAs will say something like “First Nations and the Crown will co-develop” (but of course with Canada having the final word), there is no “co-development” in the ANFA.
Instead, First Nations acting alone or with other First Nations pass their own laws and design and deliver their own programs.
That means, for example, that a program on language revitalization for Anishinaabemowin is now possible.
If your First Nation is in the Anishinabek Nation Education Agreement (ANEA), you’ll notice that, beyond funding, Canada no longer takes a role in education programming. That is now the role of the Kinoomaadziwin Education Body (KEB).
A similar thing will happen with governance.
So, while CFAs will say something like “First Nations and the Crown will co-develop” (but of course with Canada having the final word), there is no “co-development” in the ANFA.
Instead, First Nations acting alone or with other First Nations pass their own laws and design and deliver their own programs.
That means, for example, that a program on language revitalization for Anishinaabemowin is now possible.
Canada simply funds, then gets out of the way so First Nations can take control of their own destinies.
3. Flexibility
It is important that any funding agreement contain provisions that ensure flexibility - so changes can be made to funding if circumstances warrant.
This is one area in which both the ANFA and the CFA are similar, and ultimately, the similarity is good.
CFAs typically allow Canada to adjust funding through what is called a “NOBA” (Notice of Budget Adjustment), and contain a provision to ensure the adjustment will typically not result in a reduction.
The ANFA replaces Canada’s unilateral power to make adjustments with provisions ensuring signatory First Nations can benefit from any general increase that Canada may grant under similar Indian Act funding.
This is one area in which both the ANFA and the CFA are similar, and ultimately, the similarity is good.
CFAs typically allow Canada to adjust funding through what is called a “NOBA” (Notice of Budget Adjustment), and contain a provision to ensure the adjustment will typically not result in a reduction.
The ANFA replaces Canada’s unilateral power to make adjustments with provisions ensuring signatory First Nations can benefit from any general increase that Canada may grant under similar Indian Act funding.
It is obvious they both get the job done.
4. Security of Fiscal Transfers
However, on the question of just how secure fiscal transfers from Canada are overall, the ANFA sits heads and shoulders above CFAs.
As you may know, all federal funding is provided with the condition that it is “subject to appropriation by Parliament”. That is, the government must first collect taxes and Parliament must first pass a budget.
CFAs go one step further and say that if the funding department’s “funding authority” is “modified or cancelled by the Treasury Board of Canada”, then “Canada may adjust or cancel the funding accordingly”. The funding department is, of course, Indigenous Services Canada.
This is a very big stick, and it speaks to the absence of a nation-to-nation relationship. Canada, having cornered all the resources and being in control of the economy, still gets to make the sharing of those resources dependent on its internal “funding authorities”.
As you may know, all federal funding is provided with the condition that it is “subject to appropriation by Parliament”. That is, the government must first collect taxes and Parliament must first pass a budget.
CFAs go one step further and say that if the funding department’s “funding authority” is “modified or cancelled by the Treasury Board of Canada”, then “Canada may adjust or cancel the funding accordingly”. The funding department is, of course, Indigenous Services Canada.
This is a very big stick, and it speaks to the absence of a nation-to-nation relationship. Canada, having cornered all the resources and being in control of the economy, still gets to make the sharing of those resources dependent on its internal “funding authorities”.
The ANFA sweeps away that language, making sure all that is left is the understanding that in a nation-to-nation relationship, the Crown will meet its obligations regardless of the federal government’s internal dynamics or issues.
5. Reporting
There is an interesting difference on the issue of reporting.
Funding amounts in CFAs are typically tied to “reporting guides”, so that apart from reporting audited financial statements, First Nations also report on program operations and delivery.
In comparison, since Canada is not involved in developing programs, a “reporting guide” from Canada is impossible in the context of the ANFA. Instead, the ANFA commits signatory First Nations to a general system of accountability similar to those maintained by other governments.
This, again, emphasizes the nation-to-nation approach in that it treats First Nations like governments (rather than as appendages of Canada through the Indian Act).
Funding amounts in CFAs are typically tied to “reporting guides”, so that apart from reporting audited financial statements, First Nations also report on program operations and delivery.
In comparison, since Canada is not involved in developing programs, a “reporting guide” from Canada is impossible in the context of the ANFA. Instead, the ANFA commits signatory First Nations to a general system of accountability similar to those maintained by other governments.
This, again, emphasizes the nation-to-nation approach in that it treats First Nations like governments (rather than as appendages of Canada through the Indian Act).
Such a system of accountability would include financial reporting, of course, but reporting on the delivery of programs will be based entirely on what signatory First Nations themselves develop, reflective of their own objectives.
6. Set-Off
There is also an interesting difference on the issue of funding hold-backs.
CFAs typically contain provisions that allow Canada to “set-off” funding against other amounts owed by a First Nation.
This may seem fair at first glance, but imagine a scenario in which there is a dispute - Canada claims an amount is owed but the First Nation claims that from its own understanding of the situation the amount is not owed.
A “set-off” provision allows Canada to be judge, jury, and sheriff. Without waiting for any resolution of the dispute, Canada can simply hold-back expected funding to satisfy the debt it believes the First Nation owes.
CFAs typically contain provisions that allow Canada to “set-off” funding against other amounts owed by a First Nation.
This may seem fair at first glance, but imagine a scenario in which there is a dispute - Canada claims an amount is owed but the First Nation claims that from its own understanding of the situation the amount is not owed.
A “set-off” provision allows Canada to be judge, jury, and sheriff. Without waiting for any resolution of the dispute, Canada can simply hold-back expected funding to satisfy the debt it believes the First Nation owes.
In comparison, not only does the ANFA not contain “set-off” provisions, but it also makes clear that First Nations can always retain “unexpended balances” - amounts they don’t spend by the end of any given fiscal year.
7. Impromptu Evaluations
CFAs typically give Canada the power to, within 7 years, carry out an evaluation “of the effectiveness of this Agreement”.
This means Canada can decide at any time within that period to commence either or both of a program and financial audit.
The ANFA includes no such language, which again emphasizes the nation-to-nation nature of the relationship, and also takes into account the fact that all such agreements come up for renewal periodically anyway.
This means Canada can decide at any time within that period to commence either or both of a program and financial audit.
The ANFA includes no such language, which again emphasizes the nation-to-nation nature of the relationship, and also takes into account the fact that all such agreements come up for renewal periodically anyway.
A renewal process would be an ideal time for the parties to respectfully learn from one another, figure out what could be tweaked or adjusted, and ensure things are moving in the right direction.
8. One-Sided Protections
Next, let's look at the way the agreements treat what one could call “standard contract clauses”, like indemnification.
An indemnity is essentially an undertaking provided by each party to a contract, stating that if one party gets in trouble because of something done or not done by the other party, the other party will pick up the tab.
Indemnification clauses in CFAs are generally one sided, giving Canada more protection than a First Nation by, for example, extending that protection to “Ministers, officers, employees, agents, successors and assigns” of Canada.
The indemnification clause in the ANFA gives both sides the same amount of protection.
Another standard clause concerns termination. CFAs would typically say something like “either party may terminate this Agreement by providing notice to the other party stipulating the reason for termination”.
This “unilateral termination” is another big stick held by Canada, that doesn’t take account of the fact that Canada controls the resources and the economy.
An indemnity is essentially an undertaking provided by each party to a contract, stating that if one party gets in trouble because of something done or not done by the other party, the other party will pick up the tab.
Indemnification clauses in CFAs are generally one sided, giving Canada more protection than a First Nation by, for example, extending that protection to “Ministers, officers, employees, agents, successors and assigns” of Canada.
The indemnification clause in the ANFA gives both sides the same amount of protection.
Another standard clause concerns termination. CFAs would typically say something like “either party may terminate this Agreement by providing notice to the other party stipulating the reason for termination”.
This “unilateral termination” is another big stick held by Canada, that doesn’t take account of the fact that Canada controls the resources and the economy.
The ANFA does away with a “unilateral termination” clause entirely, and instead commits both parties to an ongoing fiscal relationship.
9. Bureaucratic Complexity
All of the above is in addition to the fact that, as anyone who has ever administered or managed a CFA can attest, they can be bureaucratically complex - with different rules for different “funding envelopes”.
The ANFA does away with all of that complexity, so that as more and more funding falls into the ANFA the same simple rules will apply - a First Nation can develop its own programs to meet its own needs, and can keep unexpended balances in any fiscal year.