1.1 This policy takes effect on October 1, 2008.
1.1.1 This version of the policy incorporates updates effective April 1, 2012.
1.2 Transitional considerations
1.2.1 Terms and conditions approved before October 1, 2008, remain in effect until the earlier of their expiry date or the date of a decision for continuation or amendment made under this policy.
1.2.2 A funding agreement entered into before October 1, 2008, remains in effect until its expiry date. However, it may be amended by the department with the concurrence of the recipient to reflect the requirements of this policy.
1.2.3 The new policy requirements under paragraphs 6.5.7, 6.5.8 and 6.5.9 of this policy relating to risk management, the engagement of applicants and recipients, and the establishment of departmental service standards apply to all new and continued transfer payment programs approved after March 31, 2010 with earlier adoption encouraged.
This policy applies to departments as defined in section 2 of the Financial Administration Act, unless excluded by specific acts, regulations or Orders in Council.
3.1 Transfer payments are monetary payments, or transfers of goods, services or assets to third parties, including Crown corporations, on the basis of an appropriation. Transfer payments do not result in the acquisition by the Government of Canada of any goods, services or assets.
3.2 Transfer payments represent a large part of the Government of Canada's spending. Their tangible results touch the lives of Canadians and others every day, and cover all sectors of society. Transfer payments include grants, contributions and other transfer payments including those made to other orders of government, international organizations and Aboriginal peoples.
3.3 Transfer payments are one of the government's key instruments in furthering its broad policy objectives and priorities. They enable and engage a wide diversity of skills and resources outside the federal government that are well-placed to further Canadian aims, contribute to building a strong society and a competitive nation that is inclusive and respectful of Canadian values and Canada's linguistic duality.
3.4 Cabinet determines when transfer payment programs are the most appropriate policy instrument. Cabinet also determines the objectives and outcomes to be achieved by means of transfer payments within legislative authorities provided by Parliament.
3.5 Transfer payments are a major commitment of federal government resources. As such, they are subject to periodic spending reviews, such as strategic reviews. These reviews support improved management of the government's resources and their regular alignment with federal priorities and services.
3.6 The government is committed to ensuring that transfer payments are managed in a manner that respects sound stewardship and the highest level of integrity, transparency, and accountability. Moreover, the government is resolved to ensuring that transfer payment programs are designed, delivered and managed in a manner that is fair, accessible and effective for all involved - departments, applicants and recipients - all of whom have important contributions to make in achieving the objectives of the government and in furthering Canadian aims.
3.7 Supporting strengthened accountability for public monies and better results for Canadians, this policy requires that transfer payments be managed in a manner that is sensitive to risks, that strikes an appropriate balance between control and flexibility, and that establishes the right combination of good management practices, streamlined administration and clear requirements for performance.
3.8 This policy sets out clear roles and responsibilities for the Treasury Board, the President of the Treasury Board, the Secretary of the Treasury Board, ministers and deputy heads in the design, delivery and management of transfer payment programs.
3.9 Additional mandatory requirements are set out in directives dealing with grants, contributions and other transfer payments.
3.10 Treasury Board has delegated authority to the President of the Treasury Board to issue, amend or rescind any directive in support of this policy and to approve any exception to the directives as is deemed necessary.
3.11 This policy is issued under subsection 7(1) of the Financial Administration Act.
Definitions to be used in the interpretation of this policy and supporting directives are in the Appendix.
The objective of this policy is to ensure that transfer payment programs are managed with integrity, transparency and accountability in a manner that is sensitive to risks; are citizen- and recipient-focused; and are designed and delivered to address government priorities in achieving results for Canadians.
5.2.1 The expected results of this policy are that:
6.1 The Treasury Board of Canada is responsible for:
6.1.1 Approving the terms and conditions for new transfer payment programs, except when a minister is authorized, including by legislation, to establish those terms and conditions.
6.1.2 Approving amendments of terms and conditions for existing transfer payment programs, except when a minister is authorized under this policy or by legislation, to amend those terms and conditions.
6.1.3 Approving funding agreements in those instances where it is required by Treasury Board or by the directives supporting this policy.
6.1.4 Reviewing the continuation, amendment or termination of transfer payment programs as a result of periodic spending reviews, such as strategic reviews.
6.2 The President of the Treasury Board of Canada is responsible for :
Recommending to Treasury Board that a minister has to seek Treasury Board approval for the continuation, amendment or termination of terms and conditions of any existing transfer payment programs.
6.3 Ministers are responsible for :
6.3.1 Approving the continuation or termination of terms and conditions.
6.3.2 Approving minor amendments of terms and conditions.
6.3.3 Delegating to the deputy head the approval of minor amendments of terms and conditions, when appropriate.
6.3.4 Approving amendments to the following elements of terms and conditions:
6.3.5 Informing the President of the Treasury Board when taking action under paragraph 6.3.4.
6.3.6 Seeking Treasury Board approval for amendments to the following elements of terms and conditions:
6.3.7 Approving, subject to wording of appropriations, an exception to terms and conditions to provide a transfer payment to an individual recipient of an amount up to 25 per cent in excess of the maximum amount authorized by approved terms and conditions.
6.3.8 Approving, on a case-by-case basis, an exception to terms and conditions that requires a recipient to reimburse a repayable contribution, when the funding provided is less than $200,000.
6.3.9 Setting the strategic direction for risk tolerance for departmental transfer payment programs.
6.4 The Secretary of the Treasury Board is responsible for :
6.4.1 Recommending to the President of the Treasury Board, as a result of consultations under paragraph 6.5.4 of this policy or otherwise, that a minister has to seek Treasury Board approval, by or through the responsible minister, for the continuation, amendment or termination of terms and conditions for a transfer payment program.
6.4.2 Providing leadership and support in promoting and facilitating collaboration among departments for government-wide harmonization of transfer payment programs, the standardization of administrative processes, procedures and requirements, and the sharing of best practices. Leadership is also required for the development of the federal practitioner community involved in the design, delivery and management of transfer payment programs.
6.5 Deputy heads are responsible for :
6.5.1 Ensuring that departmental transfer payment programs are, and remain, relevant and effective in meeting departmental and government objectives. The programs are to also be aligned with and support:
6.5.2 Ensuring that a performance measurement strategy is established at the time of program design, and that it is maintained and updated throughout its life cycle, to effectively support an evaluation or review of relevance and effectiveness of each transfer payment program.
6.5.3 Approving minor amendments of terms and conditions when authorized to do so by the minister pursuant to paragraph 6.3.3
6.5.4 Consulting with the Secretary of the Treasury Board when a minister proposes to take action under paragraph 6.3.4.
6.5.5 Ensuring that the results of an evaluation or review of the relevance and effectiveness of each transfer payment program are taken into consideration and that appropriate and timely action is taken and where appropriate, recommend the continuation, amendment or termination of the terms and conditions for these programs.
6.5.6 Ensuring that cost-effective oversight, internal control, performance measurement and reporting systems are in place to support the management of transfer payments.
6.5.7 Ensuring that the administrative requirements on recipients are proportionate to the risk level. In particular, that monitoring, reporting and auditing reflect the risks specific to the program, the value of funding in relation to administrative costs, and the risk profile of the recipient.
6.5.8 Engaging applicants and recipients, when appropriate, to achieve the objective and expected results of this policy through innovative, cost-effective, citizen- and recipient-focused transfer payment programs that are accessible, understandable and useable.
6.5.9 Establishing reasonable and practical departmental service standards for transfer payment programs.
6.5.10 Ensuring, when appropriate, the harmonization of transfer payment programs within the department, and ensuring collaboration with other departments.
6.5.11 Ensuring that opportunities are pursued to standardize the administration of transfer payment processes, procedures and requirements within the department and, to the extent possible, with other departments, to achieve efficiencies in the administration of transfer payment programs for applicants, recipients and the department.
6.5.12 Ensuring public disclosure on the departmental website of any exceptions under paragraphs 6.3.7 and 6.3.8 of this policy that have been approved by the minister within 30 days of the approval date.
6.5.13 Ensuring that transfer payments are not made to a department as defined in section 2 of the Financial Administration Act, nor made to finance the ongoing operating or capital requirements of a federal Crown corporation.
6.5.14 Ensuring, when transfer payment programs support activities that benefit members of both official language communities, that their design and delivery respect the obligations of the Government of Canada as set out in Part VII of the Official Languages Act and that services and benefits are made available in both official languages in compliance with the Official Languages Act.
6.6 Monitoring and reporting requirements
6.6.1 Deputy heads are responsible for:
18.104.22.168 Monitoring compliance with this policy and its supporting directives through periodic audits and other assessments to ensure their effective implementation. Deputy heads are to take corrective action when needed.
22.214.171.124 Establishing a three-year plan that identifies plans for the continuation, amendment or termination of terms and conditions, evaluations or reviews of relevancy and effectiveness to be conducted, and initiatives to engage applicants and recipients. This plan is integrated with the department's Report on Plans and Priorities.
126.96.36.199 Providing other reports as requested by the Secretary of the Treasury Board.
6.6.2 The Secretary of the Treasury Board is responsible for:
188.8.131.52 Monitoring departments' compliance with this policy and its supporting directives.
184.108.40.206 Monitoring cross-governmental harmonization of transfer payment programs and standardization of administrative practices.
220.127.116.11 Recommending that corrective action be taken when a department has not complied with the requirements of this policy or its supporting directives.
18.104.22.168 Establishing a framework for the review of this policy and its supporting directives and ensuring that a review is initiated within five years of the effective date of this policy.
7.1 The deputy head is responsible for investigating and acting when significant issues arise regarding policy compliance. The deputy head is also responsible for ensuring appropriate remedial actions are taken to address these issues.
7.2 If the Secretary of the Treasury Board determines that a department may not have complied with any requirements of this policy or its supporting directives, the Secretary of the Treasury Board may request that the deputy head:
7.3 Consequences of non-compliance with this policy and its supporting directives, or of failure to take corrective actions requested by the Secretary of the Treasury Board, may include recommending to Treasury Board:
Please direct enquiries about this policy to your departmental headquarters. For interpretation of this policy, departmental headquarters should contact:
Financial Management Policy Division
Financial Management and Analysis Sector
Office of the Comptroller General
Treasury Board of Canada Secretariat
300 Laurier Avenue West
Ottawa ON K1A 0R5
For purposes of this policy and its supporting directives, the following definitions apply.