Public version of the Terms and Conditions for the International Development Assistance Program

Authorities to Approve the Projects under the International Development Assistance Program

“ Treasury Board has approved increased authorities to approve projects under the International development assistance program to Minister of Development. These authorities are subject to legislation and regulations, and must comply with departmental and central agencies policies and directives.”

Disclaimer

In accordance with section 6.1 of the , departments are required to make public descriptions of all programs, including application processes as well as eligibility requirements and assessment criteria for potential applicants. This document conforms to the directive’s requirements for the International Development Assistance Program. 

This version of the document slightly differs from the original document. In all circumstances, the official document shall prevail.

Table of contents

  1. Effective date
  2. Authority and financial instruments
  3. Transfer payment program
  4. Description of programming classes
  5. Eligible recipients
  6. Eligible expenditures
  7. Total Canadian government funding and stacking limits
  8. Method used to calculate the amount of a grant or a contribution
  9. Maximum amount payable
  10. Cash management and basis of payment
  11. Information required to assess funding applications and criteria for assessment
  12. Information required for financial and performance reporting
  13. Official languages
  14. Redistribution of contributions
  15. Repayable contributions
  16. Intellectual property
  17. Disposal of assets
  18. Other conditions and requirements
  19. References

Appendix A – Definitions

Appendix B – Rationale for exception to the Treasury Board Directive on Transfer Payments

1. Effective date

The terms and conditions for international development assistance (hereinafter the “terms and conditions”) took effect on April 1, 2012. The changes made in the 2017 version of this document reflect the amalgamation of the Canadian International Development Agency and the Department of Foreign Affairs and International Trade, effective as of June 26, 2013. Today, the department is commonly known as ¶¶ÒùÊÓƵ [1], which is also the title used throughout this document.

2. Authority and financial instruments

2.1 Preliminary notes

The purpose of this document is to establish the terms and conditions for ¶¶ÒùÊÓƵ’s (hereinafter also called “the department”) International Development Assistance Program. These terms and conditions address the requirements described in the Treasury Board of Canada Secretariat’s Policy on Transfer Payments as well as the supporting directive, with topics specific to ¶¶ÒùÊÓƵ’s vote wording.

2.2 Grants and contributions vote and budget

The Foreign Affairs, Trade and Development Act establishes the responsibilities relating to international development, poverty reduction and humanitarian assistance. Authorities to make the grants listed in the Government of Canada’s annual Estimates and contributions for international development assistance and other specified purposes are provided by the Appropriation Acts.

The Minister of International Development and La Francophonie has been designated as the lead minister responsible for Canada’s official development assistance. As such, the minister is required, as per the Official Development Assistance Accountability Act, to report the total annual amount spent by relevant Government of Canada ministers providing official development assistance.

2.3 Financial instruments

This section lists the financial instruments that may be used to disburse the International Development Assistance Program grant and contribution funds, which are granted by Parliament through Appropriation Acts. This section also provides information on the context of their use.

When choosing a financial instrument, the following is considered:

  • Grant / contribution agreements are legally binding under domestic law. Recipients are usually private sector firms and Canadian, international or foreign non-governmental organizations.
  • Grant / contribution arrangements create no obligations in public international law and are entered into in good faith by parties that intend to abide by the terms agreed. Recipients are usually well-established international governmental organizations (e.g. United Nations bodies), foreign governments and international organizations.
  • In keeping with the principles of the harmonization of international assistance, funding to multilateral institutions will normally be in the form of grants. Funding may be in the form of contributions on an exceptional basis, taking into consideration ¶¶ÒùÊÓƵ’s institutional relationships with the multilateral system.
  • Multi-year financial instruments may be used.

The choice between a grant and a contribution is determined by the legal status of the recipient and the nature of the investment initiative, as well as the degree of assurance and oversight deemed necessary to achieve the results and safeguard the use of public funds in a manner that is sensitive to risks.

Corporate documentation exists to guide managers in their analysis. Namely, the Business Process Roadmap provides a high-level overview of the different methodologies used to develop, manage, communicate and implement ¶¶ÒùÊÓƵ’s investments in international development assistance. As well, an internal set of fiduciary risk evaluation tools has been developed for assessment at the recipient and the project level. The department has tailored its approach to international development assistance fiduciary risk management to its particular strategic, policy and operational context, and has established criteria under which formal evaluation is mandatory.

2.3.1 Grant funds

a) Grant agreements / arrangements

Grant agreements / arrangements are used when the eligibility criteria and information obtained from the recipient before a payment is issued provide assurance that the grant will be used for the purpose for which it is being provided. Generally, recipients are established organizations with solid financial structures that maintain appropriate resource capacities, have a proven record of accomplishment for delivery of programs or projects, and have risk management and results reporting structures acceptable to ¶¶ÒùÊÓƵ.

Other donor countries are the only countries eligible for grants.

2.3.2 Contribution funds

a) Contribution agreements / arrangements
Contribution agreements / arrangements are conditional transfer payments generally used to contribute to approve proposals from eligible recipients. They are appropriate when the department deems it necessary to monitor progress and results, receive an accounting of the use of funds from the recipient, and have the right to carry out a recipient audit or to request some other type of certification or audit assurance from the recipient. Contribution agreements / arrangements may include specific provisions when the risk associated with the recipient implementing the program or project can be managed by additional oversight.

b) Procurement contracts
The purpose of this section is to set out the particular governance framework for procurement contracts funded with international development assistance contribution funds. This framework differs depending upon the entity that will be the contracting authority.

  1. Contracts by ¶¶ÒùÊÓƵ
    ¶¶ÒùÊÓƵ can enter into Crown procurement contracts as the contracting authority for acquisitions in support of a development initiative or its implementation. Such contracts are entered into either with an executing agency or with a contractor where the acquired goods, services or construction services will be delivered to recipients.
     
    Crown procurement contracts are governed by the Treasury Board Contracting Policy rather than by these terms and conditions. As a result, ¶¶ÒùÊÓƵ must adhere to the Government Contracts Regulations, seek Treasury Board approval when the value of the contract exceeds the thresholds set out in Appendix C of the policy, and manage funds for advance, progress and final payments in accordance with the policy. Consequently, the clauses regarding cash management of contribution agreements/arrangements set forth in these terms and conditions do not apply. More precisely, where an advance payment is issued under a Crown procurement contract, all expenditures incurred by the executing agency or contractor must affect the grants and contributions vote in the fiscal year in which the advance was issued.
     
  2. Contracts by a recipient country or another organization
    The Minister of International Development and La Francophonie can transfer procurement responsibility to a recipient country or another organization [2] , whereby goods, services and/or construction services will be purchased by the recipient country or the organization (as the contracting authority) on behalf of a predefined ultimate entity of the recipient country (including its government).
     
    Such procurement contracting will be subject to the recipient country or the other organization’s own practices and regulations. However, ¶¶ÒùÊÓƵ will have first assured that these practices and regulations are consistent with the principles of the Treasury Board Contracting Policy and the Government Contracts Regulations (particularly fairness, openness and transparency in the bidding and selection process), and that they are in accordance with the anti-corruption provisions for procurement contained in the United Nations Convention Against Corruption, the Organisation for Economic Co-operation and Development Anti-Bribery Convention and the Inter-American Convention Against Corruption. The transfer of procurement responsibility will take place within the context of balancing potential benefits against assessed risks. Appropriate fiduciary risk mitigation measures will be applied, where required.
     
    In exceptional circumstances, the agreement/arrangement entered into with a recipient country may include provisions where the department will pay directly the contractor from whom the recipient country or another organization purchases goods, services and/or construction services.
     
  3. Contracts by an executing agency
    When the Minister of International Development and La Francophonie enters into a contract with an executing agency in support or for the implementation of a development initiative, the following conditions will apply:
    • the contract between the Minister of International Development and La Francophonie and the executing agency constitutes a Crown procurement contract and as such is subject to the Treasury Board Contracting Policy as set out in section 2.3.2(b)(i) of these terms and conditions;/li>
    • this Crown procurement contract will contain provisions requiring the executing agency to conduct any procurement it undertakes for delivery of goods, services or construction services to recipients using procurement practices that are consistent with the principles set out in the Treasury Board Contracting Policy and the Government Contracts Regulations;
    • for any procurement undertaken by the executing agency, either the executing agency, the recipient country, the organization or the ultimate recipient will be the technical authority for the procurement, and as such, has the responsibility for defining the technical specifications of the requirement, the statement of work and evaluation criteria for the bids as they relate to the technical aspects of the requirement. In exceptional circumstances where the department is the technical authority or effectively behaves like the technical authority (while being careful not to establish an “agency relationship”), the Treasury Board Contracting Policy and its attendant regulations and directives will apply.

c) Cooperant agreements
Cooperant agreements are entered into where Canadian public servants (federal and provincial), who will not be part of ¶¶ÒùÊÓƵ’s mission structure, are mobilized to work in a recipient country on a department-funded project. Benefits and allowances under these agreements are regulated and governed by the Technical Assistance Regulations, Part II.

d) Administrative arrangements
Administrative arrangements are entered into where the department collaborates with other government departments, Crown corporations or other levels of Canadian government (provincial, territorial, municipal, etc.) to obtain expertise or capacity to support program delivery. Exceptionally, administrative arrangements may be appropriate to use with multilateral institutions.

e) Letters of agreement
Letters of agreement are used where the department deems appropriate to compensate an individual, organization or institution for the eligible expenditures they will incur (e.g. the travel costs of a volunteer speaker)[3].

3. Transfer payment program

3.1 Purpose and objectives

The objective of the department’s International Development Assistance Program is to reduce poverty for those living in countries where ¶¶ÒùÊÓƵ engages in international development.

This objective is in line with the intent of the Official Development Assistance Accountability Act, which states that expenditures reported to Parliament as official development assistance must contribute to poverty reduction, take into account the perspectives of the poor, and be consistent with international human rights standards. Furthermore, official development assistance may be provided for the purposes of alleviating the effects of a natural or man-made disaster or other emergency occurring outside Canada. The majority of the International Development Assistance Program’s activities are consistent with the Act. However, this transfer payment program does not preclude activities falling outside the scope of the Act.

According to Canadian government policy decisions, programming with respect to the following is inappropriate and, as such, is excluded from these terms and conditions:

  • luxury goods;
  • military equipment and/or supplies (unless for the use by donor military forces to deliver humanitarian aid or perform development services, in which case only incremental costs apply);
  • nuclear technology (unless for peaceful and/or development purposes);
  • grants to recipient countries; and
  • any other assistance as deemed inappropriate in accordance with Canadian government or ¶¶ÒùÊÓƵ policy decisions.

3.2 Program activities, expected results and performance indicators

The following tables illustrate the expected results and related performance indicators for the International Development Assistance Program’s activities.

Program activity: Fragile countries and crisis-affected communities
Expected resultsPerformance indicators
Increased access to essential health services and education by the more vulnerable female and male children and youth in crisis-affected communities.
  • Percentage of under-five children receiving appropriate and timely treatment for malaria and other major diseases.
  • Percentage of vulnerable or crisis-affected girls and boys enrolled in school.
Increased access to income opportunities including jobs and development of micro- and small enterprises, particularly for vulnerable and marginalized women, men and youth.
  • Percentage of economically active women, men and youth employment.
Enhanced responsiveness of humanitarian assistance to address the immediate needs of crises-affected populations.
  • Percentage of Consolidated Appeals funding requirements that are met.

 

Program activity: Low-income countries
Expected resultsPerformance indicators
Increased sustainable agricultural production by rural poor women, men and youth.
  • Annual production of agricultural goods in targeted regions of ¶¶ÒùÊÓƵ interventions.
  • Rate of adoption by farmers (male/female) of new farming techniques and new crop varieties in targeted regions of ¶¶ÒùÊÓƵ interventions.
Increased health services to mothers, newborns and children under five.
  • Percentage of live births attended by an accredited health professional.
Increased accountability of public and civil institutions to respond to the needs of women, men and children.
  • Average program rating (on a five-point scale) of progress of ¶¶ÒùÊÓƵ low-income countries of focus toward achieving this result.

 

Program activity: Middle-income countries
Expected resultsPerformance indicators
More competitive local economies, especially for micro, small and medium-sized, and women-led enterprises in poorer areas.
  • Level of integration of micro, small, and medium-sized enterprises in local and regional markets per country.
Increased access to quality education for marginalized female and male children and youth, in particular those living in remote communities.
  • Total net enrolment ratio in primary education, both sexes.
Strengthened citizen participation to sustain social and economic progress.
  • Average program rating (on a five-point scale) of progress of ¶¶ÒùÊÓƵ middle-income countries of focus toward achieving this result.

 

Program activity: Global engagement and strategic policy
Expected resultsPerformance indicators
Increased effectiveness of Canadian development cooperation through engagement with, and investment in, multilateral and global organizations, to address humanitarian and development challenges.
  • Progress in global food security, health, education, and employment rates in developing countries.
Increased ability to advance Canada's development priorities in Canada and globally.
  • Evidence of Canadian influence (e.g., G8 summits, Organisation for Economic Co-operation and Development /Development Assistance Committee, the media) in shaping the international development agenda.
  • Coherence between aid and non-aid policies (e.g., foreign, defence, environment and immigration).

 

Program activity: Canadian engagement for development
Expected resultsPerformance indicators
Improved health and education services for marginalized women, men, girls and boys.
  • Ratings (on a five-point scale) of 15-20 representative initiatives of how Canadian partners have helped transform basic service delivery in underserved communities.
Enhanced income opportunities, including rural livelihoods for poor women, men and youth.
  • Ratings (on a five-point scale) of 20 representative initiatives of how Canadian partners have contributed to increased income opportunities and livelihoods for poor women, men, youth in rural and urban areas.
Increased engagement of Canadians as global citizens in international development initiatives.
  • Ratings (on a five-point scale) of at least 5 participants for each of 10 representative partners' initiatives regarding the value of their participation for increasing their engagement and knowledge of international development.

4. Description of programming classes

The programming classes described hereafter constitute the means for attainment of ¶¶ÒùÊÓƵ’s International Development Assistance Program results. More precisely, in order to meet its program objectives, the department has developed three specialized classes of grants and contributions. While each class may be selected as circumstances warrant by the department’s branches, each branch is specialized in the use of a specific class, and, as a result, is considered the primary user due to the nature of their work.

4.1 Bilateral programming class

Bilateral programming, country-to-country, enables the Government of Canada to support recipient countries by:

  • planning and executing international cooperation initiatives, with local governments and organizations; and/or
  • contributing to selected development initiatives, which are planned and implemented by other donor countries and Canadian and international partners, as well as regional and local partners.

Canada’s efforts are negotiated and agreed with the recipient country and are usually documented through a memorandum of understanding or exchange of letters.

In order to provide a rationale and focus for bilateral activities, bilateral programming takes place within the context of a:

  • region or country strategy; and/or
  • regional or country development programming framework.

These documents are developed in accordance with Canadian government policy decisions, the objectives and priorities of ¶¶ÒùÊÓƵ, with the overall management framework of the International Assistance Envelope and taking into account discussions with the recipient country.

For example, support under program-based approaches can be provided through a range of modalities. This aid comprises budget support (general and sector), pooled funds and projects, including technical assistance that could result from dialogue with a recipient country. There are numerous ways of engaging in development cooperation based on the principles of coordinated support for a locally owned development program. These means include national development strategies, sector or thematic programs and organizational programs.

The department may engage individuals or firms under professional service contracts to provide technical assistance services in a recipient country.

¶¶ÒùÊÓƵ may fund education and training for persons from recipient countries. Benefits and allowances paid to these individuals while in Canada are administered in accordance with the Technical Assistance Regulations, Part I.

4.2 Multilateral programming class

Multilateral programming supports sustainable development and humanitarian assistance mainly through multilateral institutions by:

  • providing long-term institutional support to eligible recipients to allow the achievement of development and humanitarian mandates; and
  • providing support to eligible recipients for specific initiatives aligned with Government of Canada priorities.

Multilateral institutions include international financial institutions, United Nations organizations and specialized agencies, global organizations (which often have a thematic focus, such as health or food security), humanitarian organizations, and organizations of the Commonwealth and La Francophonie.

Addressing global challenges requires a robust multilateral system. The multilateral system provides the Canadian International Development Assistance Program with a number of advantages. It provides additional reach by improving the lives of people across a wide range of developing countries and sectors. It helps build consensus, establish global norms and standards and provide intellectual leadership in a number of technical programming areas (e.g. health, agriculture and environment). The multilateral system possesses program delivery expertise particularly in offering coordinated and timely humanitarian assistance and addressing the complex challenges of fragile countries. Finally, the multilateral system can leverage the Government of Canada’s priorities by increasing international programming from other donors in these priority areas.

Multilateral programming takes place within the context of:

  • ¶¶ÒùÊÓƵ’s Multilateral Effectiveness Strategy; and
  • institutional engagement strategies for key multilateral partners.

These documents are developed in accordance with Canadian government policy decisions and the objectives and priorities of ¶¶ÒùÊÓƵ, and with the overall management framework of the International Assistance Envelope.

Multilateral programming is comprised of two distinct sub-classes: multilateral institutional funding and international humanitarian assistance.

4.2.1 Multilateral institutional funding sub-class

The multilateral institutional funding sub-class supports sustainable development and strengthens the effectiveness of the international system through:

  • the provision of long-term institutional support to multilateral development institutions and humanitarian institutions; and
  • the provision of funding for specific global, regional or country-level programs of multilateral institutions and other organizations in support of development goals, where these specific programs or projects are aligned with Government of Canada priorities and integrated into the recipient’s economic and social development objectives.

4.2.2 International humanitarian assistance sub-class

The purpose of the international humanitarian assistance sub-class is to save lives, alleviate human suffering and maintain the human dignity of those affected by conflicts and natural disasters. In response to a humanitarian crisis, financial support may be provided for the delivery of assistance that includes, but is not limited to, food and non-food items, medical care, shelter, water, sanitation, the protection of civilians and assistance to refugees and internally displaced persons, and the deployment of relief supplies and technical experts. In addition, international humanitarian assistance may be used to promote Canadian humanitarian policy priorities.

When specific approval is given by the Minister of International Development and La Francophonie, international humanitarian assistance may be provided in response to a humanitarian crisis in a developing country / territory or a country in transition normally excluded from Canada’s official development assistance.

Programs, projects or activities excluded from this sub-class are:

  • longer-term rehabilitation and reconstruction, except special rehabilitation projects associated with refugees, returnees and displaced persons; and
  • search and rescue operations, independent experts, and transportation costs for unsolicited new or used goods.

4.3 Partnerships with Canadians programming class

Partnerships with Canadians programming represents the International Development Assistance Program’s primary link to the Canadian public, given its main objective is to engage Canadians in international development. Partnerships with Canadians normally consist of investments in partners’ initiatives that reflect the department’s development and public engagement objectives. It involves relationships based on shared objectives, resources and accountability. In most cases, these partners are Canadian civil society organizations, the private sector and publicly funded institutions.

Partnerships with Canadians engage Canadians through support for international development initiatives and through raising awareness, participation and education on international development.

Partnerships with Canadians are comprised of two distinct sub-classes: partners for development and global citizens.

4.3.1 Partners for development sub-class

The partners for development sub-class aims to leverage the development expertise and initiative of Canadians by funding meritorious proposals put forward by Canadian organizations to deliver development results on the ground and contribute to poverty reduction. This sub-class creates enhanced opportunities for small and large development organizations to undertake focused and results-oriented development programming.

The partners for development sub-class provides financial support for development initiatives that are consistent with Canada's official development assistance priorities, policies and objectives. Eligible recipients are typically Canadian civil society organizations, the private sector and publicly funded institutions.

Financial support provided through the partners for development sub-class normally adheres to cost-sharing principles.

¶¶ÒùÊÓƵ reserves the right to limit funding, including institutional support, to a certain percentage of the recipient's revenues.

This sub-class also includes initiatives through which awards are provided to candidates from a recipient country to develop the organizational capacity of the country. Funding provided to, or for, individuals will be in accordance with the Technical Assistance Regulations, Part l.

4.3.2 Global citizens sub-class

The primary objective of the global citizens sub-class is to engage and mobilize Canadians, as global citizens, to participate in international development initiatives. The program focuses on three areas: public awareness, education and knowledge, and youth participation.

The global citizens sub-class showcases results and best practices in international development by: bringing young leaders together; sharing expertise and lessons learned on development challenges and results; engaging Canadians and the people of the recipient country in innovative development initiatives; and linking recipient country partners to Canadian expertise. All global citizens initiatives support communication, education or mobilization activities that proactively encourage and enable the Canadian public to understand, support and become engaged in international development, while emphasizing the importance of Canada’s involvement in the developing world. Projects and programs under the global citizens sub-class will lead to: increased public awareness of international development; increased opportunities for improving knowledge and understanding of international development and its impacts; and increased opportunities for active engagement of Canadians in international development activities.

Authorized activities must conform to the policies and priorities governing Canada’s official development assistance and provide authorized support to initiatives that focus on activities in recipient countries as well as in Canada.

5. Eligible recipients

Recipient eligibility and entitlement criteria established herein are at the class or sub-class level of programming. Where narrower focus is necessary to reflect specific program or project objectives, programming guidelines may be more restrictive.

Excluded from eligibility is any recipient:

  • whose financial position is demonstrably unsound and for which no reasonable risk mitigation strategy in regards of achieving results exists;
  • whose record of accomplishment and/or provided documentation fails to demonstrate their capacity to implement the project;
  • whose objectives or aims are not compatible with Canadian government policy decisions or Canada’s international development assistance objectives; or
  • who has been deemed as ineligible because of ¶¶ÒùÊÓƵ policy decisions.

5.1 Bilateral programming class

Eligible recipients are:

  • all levels of government of recipient countries, including their institutions, organizations and agencies;
  • all levels of government of other donor countries, including their institutions, organizations and agencies;
  • Canadian provincial, territorial and municipal governments, including their institutions, organizations and agencies;
  • entities (including individuals) that have a legal personality recognized in domestic and/or international law, other than all levels of any government, and that are capable of delivering aid activities;
  • community-based organizations and associations in a recipient country, capable of delivering local aid activities; and
  • Crown corporations listed in Section 85 or Part 1 of Schedule III to the Financial Administration Act and their subsidiaries, where funding is for a specific program or project.

5.2 Multilateral programming class

5.2.1 Multilateral institutional funding sub-class

Eligible recipients are:

  • all levels of government of other donor countries, including their institutions, organizations and agencies;
  • entities (including individuals) that have a legal personality recognized in domestic and/or international law, other than all levels of any government, and that are capable of delivering aid activities;
  • international financial institutions as listed in the schedule of the International Development (Financial Institutions) Assistance Act; and
  • Crown corporations, listed in Section 85 or Part 1 of Schedule III to the Financial Administration Act, and their subsidiaries, where funding is for a specific program or project.

5.2.2 International humanitarian assistance sub-class

Eligible recipients are:

  • all levels of government of other donor countries, including their institutions, organizations and agencies;
  • entities (including individuals) that have a legal personality recognized in domestic and/or international law, other than all levels of any government, and that are capable of delivering aid activities; and
  • community-based organizations and associations in a recipient country, capable of delivering local aid activities.

Consideration for eligibility is based on the possession of:

  • experience, expertise and proven delivery capacity in humanitarian activities; and
  • strong networking, partnership and coordination skills as evidenced by existing relationships with humanitarian stakeholders.

Humanitarian organizations and institutions, in particular, must:

  • abide by the Code of Conduct for the International Red Cross and Red Crescent Movement and Non-Governmental Organizations in Disaster Relief and aspire to meet Sphere’s Humanitarian Charter and Minimum Standards in Disaster Response and/or other internationally recognized benchmarks of program quality; and
  • have organizational codes of conduct consistent with the core principles identified in the Inter-Agency Standing Committee Plan of Action on Protection from Sexual Exploitation and Abuse in Humanitarian Crises.

5.3 Partnerships with Canadians programming class

5.3.1 Partners for development sub-class

Eligible recipients are:

  • Canadian provincial, territorial and municipal governments, including their institutions, organizations and agencies;
  • entities (including individuals) that have a legal personality recognized in domestic and/or international law, other than all levels of any government, and that are capable of delivering aid activities; and
  • Crown corporations listed in Section 85 or Part 1 of Schedule III to the Financial Administration Act and their subsidiaries, where funding is for a specific program or project.

5.3.2 Global citizens sub-class

Eligible recipients are:

  • all levels of government of recipient countries, including their institutions, organizations and agencies;
  • all levels of government of other donor countries, including their institutions, organizations and agencies;
  • Canadian provincial, territorial and municipal governments, including their institutions, organizations and agencies;
  • entities (including individuals) that have a legal personality recognized in domestic and/or international law, other than all levels of any government, and that are capable of delivering aid activities or of delivering information to Canadian audiences on international development issues; and
  • Crown corporations listed in Section 85 or Part 1 of Schedule III to the Financial Administration Act and their subsidiaries, where funding is for a specific program or project.

6. Eligible expenditures

The department may enter into a financial instrument where resulting activities are consistent with the purpose and objectives of its transfer payment program, and are primarily for the benefit of people in the recipient country. More precisely:

  • to assist in planning (e.g. conceptualization, feasibility studies, specifications or design) of programs or projects;
  • to assist the recipient in the implementation of a program or project, which includes strengthening its financial management capacity and ensuring its understanding of the terms and conditions of the agreement/arrangement;
  • to assist in monitoring, evaluation and/or audit of programs or projects;
  • to provide institutional support;
  • to contribute to or fund specific programs or projects submitted to respond to ¶¶ÒùÊÓƵ’s development objectives and Canadian government policy decisions;
  • to contribute to or fund appeals of recipient organizations;
  • to implement program-based approaches.

The recipient’s eligible expenditures will normally consist of the following:

  • cost of goods, such as commodities, and all related shipping or transportation costs;
  • cost of services, such as salaries and benefits and/or specific per diem fees;
  • cost of equipment and related installation or maintenance;
  • cost of overhead expenditures as agreed to by the department; and
  • other actual or reasonable expenses, duly described in the financial instrument.

Moreover, expenses incurred to build or strengthen an eligible recipient’s knowledge of development issues, or to identify development needs and strategies[4], may be charged to the department’s grants and contributions vote where they are primarily for the benefit of people in the recipient country.

Examples of such expenditures incurred by the recipient are:

  • analysis and research for the development of country programs, country / regional programming frameworks, and program and sectoral strategies;
  • knowledge-building activities including policy research and development, information dissemination, and support for recipient country participation in conferences, meetings, training and negotiations;
  • joint initiatives related to sector-wide approaches, trade and development issues;
  • Organisation for Economic Co-operation and Development-Development Assistance Committee studies on international development.

A recipient’s costs to support delivery of a ¶¶ÒùÊÓƵ-funded program or project implicating further distribution of funds to ultimate recipients will be charged against the grants and contributions vote.

Also eligible is an amount under a procurement contract funded from the grants and contributions vote, where such an amount represents best value, established by one of the following:

  • a competitive process;
  • in accordance with normal commercial practices;
  • negotiated standard based on the department’s Guide for Rate Validation in Non-Competitive Service Contracts or reasonable rates for local costs in keeping with local market conditions; or
  • other means deemed appropriate.

7. Total Canadian government funding and stacking limits

7.1 Sources of funding

Canadian government funding[5]under a grant or contribution agreement/arrangement will not exceed one hundred percent (100%) of the total eligible expenditures for a project.

The department also takes into account other sources of funding available to the recipient including funding received from:

  • international development organizations;
  • other donor countries;
  • the recipient country government and its regional institutions;
  • the private sector; and
  • the recipient.

The amount of a proposed grant or contribution must consist of the minimum required to further the attainment of the objectives of the program or project and expected results. For such purposes, ¶¶ÒùÊÓƵ will examine all project proposal budgets before approval and at various points of the project life cycle, to ensure that only necessary funds are made available.

All sources of funding (monetary or in-kind contributions) made toward a project must be considered.

7.2 Recovery of excess funds

At any time during the project life cycle, if it becomes clear that a recipient has received more funding than required to meet the original project objectives, the department will proceed with one or a combination of the following actions:

  • require the recipient to repay the excess of the funds received from ¶¶ÒùÊÓƵ;
  • withhold amounts from any outstanding payment;
  • expand the project to meet further program objectives or other department and/or Government of Canada policy objectives.

8. Method used to calculate the amount of a grant or a contribution

The amount of a grant or contribution consists of the estimated costs necessary to meet the objectives of the project. A project may require entering into several financial instruments[6]. The department uses various tools and resources (e.g. evaluation grids, checklists, internal or external expertise) to determine the amount of each financial instrument.

Prior to entry into a financial instrument, which will result in an expenditure of public funds, the funding decision must be analyzed and clearly documented. The depth of analysis carried out should be appropriate for the dollar value and complexity of the project and related risks.

9. Maximum amount payable

The department operates under unpredictable situations and all of the International Development Assistance Program’s grants and contributions are governed by this single set of terms and conditions. This makes it difficult to reasonably determine the maximum amount payable to a recipient annually or in total, or the maximum payable with respect to any initiative or project. For such reasons, in February 2009, an exception[7]to the Treasury Board Directive on Transfer Payments for grants and contributions program was granted.

10. Cash management and basis of payment

The Minister of International Development and La Francophonie holds an exception to clauses 6.4.2 and 6.4.4 of the Treasury Board Directive on Transfer Payments, which allows:

  • to issue single payments rather than make instalments for grants in excess of $250,000; and
  • to make advance payments of contributions covering the department’s share of expected eligible expenditures to be incurred by the recipient beyond the month of April of the following fiscal year.

10.1 Grant agreements / arrangements

Instalments or single payments of grants may be made. Generally, the decision will be in light of the fiduciary risk assessment both at the recipient and project level. Under exceptional circumstances, such as a pressing emergency due to humanitarian crisis, single payments will be made to ensure efficient program delivery, notwithstanding fiduciary risk assessment.

10.2 Contribution agreements / arrangements

10.2.1 Advance payments

Advance payments of contributions may be made if it is clear that undertaking a project would result in considerable cash flow issues for the recipient. Allocation of advance payments will be based on the estimated cash flow requirements of the recipient as agreed to by the department.

Where advance payments are deemed necessary, the period covered by the advance and the frequency of reporting required from the recipient are established based on the department’s evaluation of the fiduciary risk both at the recipient and project level.

10.2.2 Progress payments and final payments

Generally, progress payments and/or final payments of contributions are made to recipients based on reimbursement of eligible expenditures and/or achievement of pre-determined performance expectations or milestones in accordance with the provisions set out in the agreement/arrangement. Where it is cost-efficient, the department may use a costing formula. For example, to establish the value of specific program / project implementation costs, thus ensuring fairness to recipients through consistency, pre-defined travel allowances and kilometric rates established by participating bargaining agents and public service employers are used as references. ¶¶ÒùÊÓƵ may also use internally established rates based on its analysis of historical costs for similar initiatives, for instance, those of recipients or other donor countries.

Performance expectations, milestones and/or costing formulas are initiative-specific and are determined upon assessment of the application for funding or project conception.

Payment is made upon satisfactory completion of identified activities and/or once costs have been incurred by the recipient and accepted by the department as being eligible expenditures.

10.2.3 Holdback

The department will retain up to 15% of the total value of a contribution agreement / arrangement when such action is deemed appropriate based on the nature of the investment and fiduciary risk assessment. The holdback is paid following receipt, from the recipient, of final accounting of the contribution and acceptance by the department of the final report as specified in the contribution agreement / arrangement. As a condition to release a holdback or final payment, recipients are also required to certify that all financial obligations to subcontractors, employees and suppliers in respect to ¶¶ÒùÊÓƵ’s contribution have been fully discharged.

11. Information required to assess funding applications and criteria for assessment

11.1 Information required

In general, applicants are required to submit:

  • documents demonstrating that it has legal personality;
  • governance documents (e.g. corporate governance guidelines, annual reports, codes of conduct, organizational chart);
  • the most recent financial statements (e.g. annual statements, preferably audited as per generally accepted auditing standards);
  • the detailed proposal (multi-year, where appropriate);
  • an estimated budget (multi-year, where applicable);
  • prior experience relating to the proposal; and
  • supplementary information deemed essential to properly evaluate the proposal and the applicant (e.g. associates or affiliates, information required to meet Canadian regulatory requirements, tax exemption information, or citizenship of individuals).

The department might also require applicants to submit additional information for the purpose of its evaluation of the fiduciary risk both at the recipient and project level. Specifically, eight core risk factors are assessed:

Recipient level

  • Governance and stability;
  • Results performance prior history;
  • Financial viability; and
  • Corruption and fraud.

Project level

  • Capacity of local responsibility centres / local offices / project implementation units (including trust funds, decentralized funds and local office structures);
  • Procurement capacity;
  • Complexity; and
  • Materiality.

11.2 Criteria for assessment

In addition to being eligible[8]for funding, the applicant must:

  • demonstrate a satisfactory history of, or appropriate capacity for, delivery of development assistance;
  • have management and financial capability;
  • have acceptable risk management and results reporting; and
  • meet the standards for relevant ¶¶ÒùÊÓƵ policies and guidelines.

The above criteria must also be used to validate whether recipients of grants are still eligible for such transfer payments.

Assessment criteria include the following:

  • comparative advantages of funding the applicant to achieve ¶¶ÒùÊÓƵ’s goals, objectives, results and program and/or sectoral interests;
  • the applicant’s capacity to meet ¶¶ÒùÊÓƵ’s priorities;
  • internal management practices (e.g. open and transparent governance, reliable practices in finance, management and procurement);
  • reporting capacity as it relates to the use of ¶¶ÒùÊÓƵ funds and/or funds from other donors;
  • capacity to work with government, institutions or organizations of a recipient country;
  • results of recent evaluations;
  • leverage or contribution of the applicant;
  • ways expected results are to be measured and reported;
  • financial and other risks; and
  • project administrative cost (direct and indirect) in relation to the implementation cost.

Review committees, which include working level advisors (e.g. thematic and sector specialists), undertake the assessment and formulate recommendations to the appropriate management level holding approval authorities according to the internal delegation instrument.

12. Information required for financial and performance reporting

12.1 Grant agreements / arrangements

Reporting from recipients on results achieved will normally consist of the recipient’s standard annual report. Notwithstanding, ¶¶ÒùÊÓƵ may also require the recipient to submit a narrative report (that may include disbursement status) on a particular program.

12.2 Contribution agreements / arrangements

Progress of the recipient in achieving the project objectives and results as well as otherwise fulfilling the conditions of the contribution agreement / arrangement are monitored regularly as part of due diligence.

Reporting must be sufficient to:

  • account for the use of funding and support payments;
  • demonstrate whether the obligations and objectives are met; and
  • support the department’s accountability and performance measurement requirements.

Frequency of reporting is established in compliance with departmental policies and defined in the contribution agreement / arrangement.

Financial monitoring provides ongoing assurance that reimbursements claimed by recipients are based on eligible expenses actually incurred for project-related activities. The department requires reporting on all expenditures.

Performance monitoring tracks progress using selected indicators. If results are not being realized as intended, decisions will be taken as appropriate to the specific project.

13. Official languages

The department is committed to respecting its obligations under the Official Languages Act. Specifically, ¶¶ÒùÊÓƵ provides the following bilingual services to facilitate access to both linguistic communities:

  • application forms are available in both official languages on the ¶¶ÒùÊÓƵ public website;
  • general programming information and any notice, advertisement or other related matter are available in both official languages; and
  • applicants can communicate with and receive services in the official language of their choice.

Where applicable, ¶¶ÒùÊÓƵ will also ensure that recipients respect the spirit and intent of the Act and that communications with and services to the public in Canada are provided in both official languages, in accordance with the spirit and intent of Part IV and Part VII of the Act.

14. Redistribution of contributions

Where funds are to be further distributed, ¶¶ÒùÊÓƵ will ensure that the initial recipient or executing agency has independence in the choice of ultimate recipients, with minimal guidance from the department, and will not be acting as an agent of the government in making these distributions. Provisions to this effect will be included in the financial instrument.

15. Repayable contributions

Contributions made under these terms and conditions are non-repayable. Where the department enters into a contribution agreement with for-profit organizations, it is not intended to allow the recipient to generate profits or increase the value of the business.

16. Intellectual property

For any work created for the needs of an ultimate recipient under a contribution agreement, ¶¶ÒùÊÓƵ requires a licence or an assignment of rights to any recipient designated by ¶¶ÒùÊÓƵ as well as a licence to ¶¶ÒùÊÓƵ for proposals pertaining to the design, conceptualization, planning or implementation of the project or program, the implementation plan and work plans, narrative, financial and technical reports and any other subject-matter used to define or manage the project or program.

For any work created as part of a procurement contract, ¶¶ÒùÊÓƵ will comply with the provisions of the Treasury Board Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts.

17. Disposal of assets

Where it is planned to acquire assets as part of a contribution agreement / arrangement or a procurement contract, it will be specified in the financial instrument that ¶¶ÒùÊÓƵ must approve the asset disposal plan, although these assets must never be the property of the Crown.

18. Other conditions and requirements

¶¶ÒùÊÓƵ assesses whether funding would trigger any obligation under the Canadian Environmental Assessment Act. Where applicable, the appropriate form is completed and included as part of the approval documentation.

19. References

  • (Justice—administrated by Treasury Board)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Department of Justice Canada)
  • (Treasury Board)
  • (Treasury Board)
  • (Treasury Board—administrated by Innovation, Science and Economic Development Canada)
  • (Treasury Board)

Appendix A – Definitions

Advance payment (paiement anticipé) – Payment, specifically provided under an agreement/arrangement that is made prior to the fulfilment of the performance obligations, as stipulated in the agreement/arrangement, that demonstrates that the criteria are met to justify the payment. An advance payment of contribution is not an accountable advance in the context of Section 38 of the Financial Administration Act and of the Accountable Advance Regulations.

Agency relationship (relation d’agence) - A consensual relationship created by contract or by law where one party, the principal, grants authority to another party, the agent, to act on behalf of and under the control of the principal to deal with a third party. An agency relationship is fiduciary in nature and the actions and words of an agent exchanged with a third party bind the principal.

Appeal (appel) - A tool used by aid organizations to plan, coordinate, fund, implement and monitor their activities in major sudden onset and/or complex emergencies that require a system-wide humanitarian response.

Applicant (demandeur) - Is an entity that has applied for a transfer payment.

Country in transition (pays en transition) - A country that is not eligible for official development assistance under the Organisation for Economic Co-operation and Development / Development Assistance Committee lists, but in which ¶¶ÒùÊÓƵ engages in international development.

Developing country or territory (pays ou territoire en développement) - A country or territory that is eligible for official development assistance under the Organisation for Economic Co-operation and Development / Development Assistance Committee lists.

Executing agency (agence d’exécution) - An entity contracted by ¶¶ÒùÊÓƵ or the recipient country to support and/or implement a development initiative that is funded from the grants and contributions vote.

Fiduciary risk (risque fiduciaire) - The risk that funds may not be used for their intended purposes, may not be properly accounted for; and/or, goods and services delivered are not commensurate with funds transferred.

Fiscal year (exercice financier) - The period beginning on April 1 in one year and ending on March 31 in the next year, or if agreed to by ¶¶ÒùÊÓƵ and stipulated in the financial instrument, the recipient’s fiscal year.

Fragile countries (pays fragiles) - Countries that face particularly severe development challenges with complex national and regional contexts given weak institutional capacity, poor governance, political instability, and ongoing violence or a legacy of past conflict.

In-kind contribution (contribution en nature) - A contribution provided by the recipient to the project in the form of goods or services to which a dollar value can be attributed, that would otherwise be purchased and paid for by the recipient to achieve the project results. The cost of goods and services contributed in-kind must be eligible under the agreement/arrangement and must be recorded at a fair value, as agreed to by ¶¶ÒùÊÓƵ.

International Assistance Envelope (enveloppe de l’aide internationale) - Within the context of fiscal planning, the International Assistance Envelope is Canada’s main instrument for coordinating its international assistance, including official development assistance. The International Assistance Envelope funds ¶¶ÒùÊÓƵ’s International Development Assistance Program as well as international assistance components of other government departments.

Low-income / middle-income countries (pays à faible revenu / revenu intermédiaire) - Countries struggling with pervasive poverty or facing specific challenges in attaining self-reliance. Classification of a country’s economy is based on its Gross National Income per capita according to World Bank thresholds.

Pooled funds (mise en commun de fonds) - A financing mechanism for development assistance negotiated amongst donors and with the recipient country. Pooled funding involves donor oversight upon release of funds to the recipient and in terms of financial reporting, specific to the contributions made. Initiatives involving grants to a trust fund of a multilateral or regional organization and initiatives involving grants or contributions to or from another donor (delegated cooperation) are forms of pooled funding.

Program/project (programme/projet) – An initiative or a group of activities for which approval has been obtained which may result in one or more financial instruments being entered into. For the purpose of this document, the terms “program” and “project” are synonyms. Nevertheless, in the broader context, the International Development Assistance Program is a single “program” which is governed by these terms and conditions.

Recipient (bénéficiaire) - Is an entity that either has been authorized to receive or has received a transfer payment. In these terms and conditions, the terms “initial recipient” and “ultimate recipient” may be used to distinguish actors taking part in the transfer payment process.

Recipient country (pays bénéficiaire) - Developing countries or territories as well as countries in transition. The term “recipient country” does not include other donor countries.

Repayable contributions (contributions remboursables) - Contributions issued under a transfer payment program for which the terms and conditions or a Treasury Board Decision clearly establish:

  • whether these contributions are to be unconditionally repayable or if repayment is to be conditional;
  • the events or circumstances that will trigger repayment obligations;
  • the factors that will determine the amount of the repayment; and
  • the terms of repayment, namely the timing of repayments and the details on any interest charges that apply to overdue payments.

Transfer payment (paiement de transfert) - Is a monetary payment, or a transfer of goods, services or assets made, on the basis of an appropriation, to a third party, including a Crown corporation, that does not result in the acquisition by the Government of Canada of any goods, services or assets. Transfer payments under the International Development Assistance Program are categorized as grants or contributions and do not include investments, loans or loan guarantees.

Appendix B – Rationale for exception to the Treasury Board Directive on Transfer Payments

Historically, ¶¶ÒùÊÓƵ has demonstrated that its International Development Assistance Program objectives would be compromised by certain requirements of the Treasury Board Policy on Transfer Payments published in June 2000, namely clauses 7.6.1 to 7.6.6 inclusively and 8.3.3. The Minister of International Cooperation deemed it essential to seek an exception to the aforementioned clauses which was granted on March 22, 2007.

In October 2008, a revised Treasury Board policy and supporting directive on transfer payments came into effect. Equivalent provisions under the Treasury Board Directive on Transfer Payments are included in sections 6.4.2 and 6.4.4.

The rationale for this exception is provided below:

  • Pursuant to Canada’s efforts to reach the Millennium Development Goals by improving aid harmonization and effectiveness, Canada has agreed in the past, and continues, to accept common procedures and reporting in order to avoid burdening multilateral institutions with complicated, transaction-heavy and donor-specific requirements.
  • Donors have agreed to harmonize their planning, monitoring and reporting with the capacities and systems of their partners. This was essential to reducing the administrative burden of the partners while helping them improve their capacity to manage and account for the use of resources. Frequency of payments is dependent on the recipient’s cash flow requirements, the harmonized practices of other donors and the assessment of the risks involved.
  • Frequency of reporting provisions will be adapted to the recipient’s systems and processes. ¶¶ÒùÊÓƵ cannot expect reporting on its contribution separately from reporting provided to other donors because its resources are combined with those of other donors. The donor community generally accepts biannual or annual payments and reports.
  • The local ownership principle of aid effectiveness demands that development strategies, if they are to be sustainable, must be developed by recipient countries and reflect their priorities. Local ownership has come to mean ownership of development programs not only by governments, but also by civil society, such as regional and local non-governmental organizations, private sector firms and community-based organizations. The wide array of donor practices for delivering development assistance generates unproductive transaction costs for recipient countries and draws down on their limited capacity as they try to comply with the different administrative requirements of donors.

To provide a timely and effective Canadian response to conflicts and natural disasters in recipient countries, single sum grant payments, rather than instalment payments are made. To this effect, the benefits accrued from Canada’s reputation among the multilateral institutions and from Canada’s ability to respond efficiently to disasters more than offset any costs associated with lost interest on any portion of the payment paid in advance of need.

 

[1] The Canadian International Development Agency was established in 1968 by an order-in-council as a department of the Government of Canada. It amalgamated with the Department of Foreign Affairs, Trade and Development with the Royal Assent of Bill C-60 on June 26, 2013.  Although the department’s applied title since November 2015 has been ¶¶ÒùÊÓƵ, this change has not yet received Royal Assent. Therefore, the department’s legal title remains Department of Foreign Affairs, Trade and Development, as listed in Schedule I of the Financial Administration Act.

[2] Examples of other organizations are international organizations such as the United Nations Development Programme or Crown corporations such as the Canadian Commercial Corporation.  

[3] Neither purchase of goods or services, nor transfer of funds to support a program, a project or an organization.

[4] In collaboration with international and multilateral institutions, other donor countries and/or with eligible recipients.

[5] Includes federal, provincial, territorial and municipal funding.

[6] Section 2.3 describes the ¶¶ÒùÊÓƵ’s financial instruments.

[7] The exception to waive this requirement related to the Directive on Transfer Payments’ Appendix D, clause 8; Appendix E, clause 8; Appendix I, clause 5 and Appendix J, Part 2, clause 7.

[8] Refer to Section 5 for recipient eligibility and entitlement criteria.