ANNEX A

ADULT LEARNING, LITERACY AND ESSENTIAL SKILLS PROGRAM (ALLESP)

The Call for Proposals is now closed

TERMS AND CONDITIONS FOR CLASS GRANTS CONSOLIDATED REVENUE FUNDS

1. INTRODUCTION

The development of the Government of Canada’s new program framework on adult learning, literacy and other essential skills launches HRSDC’s work to lead a coordinated approach within the department to help reduce non-financial barriers to adult learning and to enhance the development of literacy and essential skills. The new program framework is designed to promote accountable, efficient and effective program delivery. In addition, the new framework will assist HRSD in providing Canadians with the tools they need to thrive and prosper in the workplace, encourage and enable individuals, families and communities to reach their full potential, and finally, maintain the quality of life that Canadians expect.

The integration of the National Literacy Program (NLP), the Office of Learning Technologies (OLT) and the Learning Initiatives Program (LIP) into the Adult Learning, Literacy and Essential Skills Program (ALLESP) will provide a better targeted, more focused approach with greater capacity and improved results measurement.

The ALLESP is supported by a set of terms and conditions for contributions and a set of terms and conditions for grants and leveraged grants. These terms and conditions set out the criteria for provision of financial assistance in support of eligible activities to eligible recipients in the form of class grants and leveraged grants. They also may cover necessary expenses incurred during the planning, organizing and operation of projects.

N.B. The ALLESP provisions are consistent with the Treasury Board Transfer Payment Policy.

2. ALLESP OBJECTIVES

The key objectives of the ALLESP initiative are:

• to promote lifelong learning by reducing non-financial barriers to adult learning; and
• to facilitate the creation of opportunities for Canadians to acquire the learning, literacy and essential skills they need to participate in a knowledge-based economy and society.

3. EXPECTED OUTCOMES FOR THE ALLESP

3.1 The expected immediate outcomes of ALLESP are:

• 1) improved dissemination, transfer and application of knowledge and information;
  
  
• 2) Increased capacity of funding recipients, other stakeholders and end-users; and
  
  
• 3) increased awareness of the benefits of and opportunities for adult learning, literacy and essential skills. Supporting capacity involves funding activities such as the development of a framework for best practices, effective approaches, benchmarks, accountability and assessment tools, and professional development of adult learning, literacy and essential skills practitioners. It enables programs to deliver more effective, higher quality programs.

3.2 The intermediate outcomes for the ALLESP initiative are

• 1) Programming, services and policies that respond to evolving needs and
  
  
• 2) Enhanced opportunities for adult learning, literacy and essential skills.
  
  

3.3 The long term outcome of ALLESP is expected to be the increased participation by Canadians in adult learning, literacy and essential skills.

4. LEGISLATIVE AUTHORITY

The ALLESP is developed under the authority of the Department of Human Resources and Skills Development Act (the Act) which assigns to the Minister of Human Resources and Skills Development (Minister), styled as Minister of Human Resources and Social Development, a broad mandate with respect to matters relating to the development of human resources in Canada. Section 5 of the Act sets out the mandate of the Minister. Subsection 5(1) provides that the “powers, duties and functions of the Minister extend to and include all matters relating to human resources and skills development in Canada over which Parliament has jurisdiction and which are not by law assigned to any other Minister, department, board or agency of the Government of Canada.” Section 7 provides that the “Minister may, in exercising the powers and performing the duties and functions assigned by this Act, establish and implement programs designed to support projects or other activities that contribute to the development of the human resources of Canada and the skills of Canadians”, and that the “Minister may make grants and contributions in support of the programs.” The ALLESP is a program that relates to the mandate of the Minister.

5. TYPE OF FINANCIAL ASSISTANCE

In order for an applicant to be eligible for grant funding or for leveraged grant funding, the following conditions must be satisfied:

Grants and Leveraged Grants

• The proposal must either target adult literacy or target adult literacy as part of a broader objective (e.g. the literacy component of a workforce learning program).
• Must be a member of the voluntary sector.
• The applicant must have a positive track record with the Government of Canada or other funders in terms of financial stewardship and achievement of objectives. Where the applicant has no track record, a grant of no more than $25,000 may apply for an initial agreement.

Grants

• The funding requested must be below $350,000.

Leveraged Grants

• A maximum of $2M over five years applies.
• In the case of leveraged grants, the recipient is required to match the funding on an annual basis for a period of up to five years. Further specifications will be contained in the individual formal agreements.
• Recipients of leveraged grants must be able to provide general audited financial statements on an annual basis.

6. ELIGIBLE ACTIVITIES

Activities which are eligible for funding must be those which:

• a) support the generation, transfer and application of knowledge in adult literacy;
• b) support innovative approaches in adult literacy;
• c) strengthen the capacity of the adult literacy sector; and
• d) promote adult literacy.

7. ELIGIBLE RECIPIENTS

Voluntary sector organizations are the only eligible recipients.

8. ELIGIBLE COSTS

8.1 Eligible costs are:

• I. salaries and wages for permanent or temporary professional, clerical, technical, and administrative services for time spent directly on the project or program and Mandatory Employment Related Costs (MERC);
• II. honoraria;
• III. professional service fees;
• IV. services for administration, accounting and bookkeeping;
• V. rent, normal utilities such as electricity, heat, water and telephone, maintenance of offices and other buildings, and taxes (percent of the cost related to the project);
• VI. supplies and materials, shipping charges, stationery, postage, printing, licenses and other fees;
• VII. travel related to projects or programs. International travel must be specifically authorized;
• VIII. computer services, library expenses, research costs and collection and analysis of statistics;
• IX. advertising the availability of project or program services;
• X. training and professional development for staff;
• XI. other administrative expenses that are agreed to by both parties.

Each agreement will identify eligible costs.

8.2 Payments to a recipient must not exceed the total budget authorized by the agreement, initial or amended.

8.3 Workers’ Compensation: The percentage of the costs related to the project associated with the workers’ compensation actual costs or assessment paid directly to the provincial/territorial workers’ compensation authority on behalf of employers and coordinators for participants or administrative staff are eligible expenditures.

9. MAXIMUM AMOUNT PAYABLE

9.1 The maximum level of financial support per grant recipient will be $349,999. In the case of leveraged grants, a maximum of $2M over five years would apply.

9.2 The maximum duration of an agreement will not exceed five years. The agreement will be subject to on-going review.

10. AGREEMENTS

10.1 Each approved proposal will be the subject of a formal agreement which will specify:

• the type of financial assistance (grant or leveraged grant);
• the obligations of each party;
• the maximum amount of program financial support and cost-sharing arrangements;
• the terms and conditions of payments and payment schedule;
• the type and nature of expenditures considered eligible under the agreement;
• results-based measures designed to assess the success of the project in attaining its objectives;
• duration of funding period and agreement;
• general clauses (such as stacking of assistance, termination, lobbying, conflict of interest, access to information, amendment clauses).

11. APPLICATION REQUIREMENTS

11.1 ALLESP normally considers proposals which are received through the application process as well as those which are unsolicited. Applications for funding must conform to sections 5, 6 and 7 above and, at a minimum, be supported by proposals that:

• are compatible with ALLESP objectives, priorities and criteria;
• state the project objectives, describe the activities to be funded, outline a timeframe, expected results and deliverables;
• demonstrate how the project fills a gap or meets an identified need;
• demonstrate how project outcomes will benefit Canada and Canadians;
• outline how the project will be evaluated and success will be determined;
• outline a dissemination plan for the results of the project;
• attest that the applicant would not be able to undertake the project without the financial assistance of the ALLESP initiative;
• include financial information on costs to be incurred;
• provide basic organizational data;
• demonstrate the capacity and experience to manage the proposed project;
• disclose the involvement of former public servants who are subject to the Post-employment Measures of the Values and Ethics Code for the Public Service, the Conflict of Interest and Post-Employment Code for Public Office Holders, the Conflict of Interest Code for Members of the House of Commons, the Parliament of Canada Act and the Lobbyists Registration Act;
• identify all sources of funding for the proposed activities, including other government programs.

11.2 Applicants shall provide assurance that, where lobbyists are utilized, they are registered pursuant to the Lobbyist Registration Act and that no actual or potential conflict of interest exists nor any contingency fee arrangement.

11.3 Some or all of the following may also be required in the application:

• agreement to acknowledge the financial assistance of the department in a mutually acceptable form;
• verification of the applicant’s eligibility in accordance with the requirements of the Act Respecting the Ministère du Conseil exécutif (L.R.Q., M-30) for the Province of Quebec only;
• verification of funding from partners;
• lobbyists’ Information;
• declaration of Amounts Owing to the Government of Canada;
• other information as may be required.

12. STACKING PROVISION

12.1 The maximum level (stacking limit) of total government assistance (federal, provincial and municipal assistance for the same eligible expenditures) for a project will not exceed 95% of eligible expenditures.

12.2 In the event that actual total government assistance to a recipient exceeds the stacking limit, it will be necessary for the department to adjust its level of assistance (and seek reimbursement, if necessary) so that the stacking limit is not exceeded.

12.3 Potential recipients must disclose other sources of proposed funding, in the application and throughout the duration of the projects.

12.4 Organizations are expected to contribute resources (including cash and/or in-kind) to the project. ALLESP will not provide 100% of the project funding.

13. PAYMENT SCHEDULE

13.1 Verification of the continuing eligibility, entitlement and qualification of a recipient of a grant will be performed, normally prior to making any payment, including an instalment payment. Where warranted, access to or provision of information necessary for such verification will be requested from the recipient as a condition of the grant.

13.2 Any payments that exceed the amount to which the recipient is entitled are debts due to the Crown and must be repaid.

13.3 Grants and leveraged grants are normally paid in instalments to correspond to the cash flow requirements of the recipient. The minimum number of instalment payments is determined according to the total value of the grant as follows:

Minimum Number of Instalments

Total value of annual grant or leveraged grant	Number of instalments
up to $100,000	one
$100,001 - $500,000	two
$500,001 - $1,000,000	four
Over $1,000,000	monthly

13.4 The department is subject to and complies with the Cash Management Policy (section 7.6 of the Policy on Transfer Payments).

14. DELEGATION OF FINANCIAL SIGNING AUTHORITIES

14.1 The final approval of proposals may be delegated by the Minister of Human Resources and Social Development as per HRSDC’s delegation instruments. The Minister may establish advisory or consultative mechanisms to assist in the process.

14.2 Authority to approve, sign or amend a grant or leveraged grant agreement may be delegated by the Minister of Human Resources and Social Development as per HRSDC’s delegation instruments.

14.3 The authority to approve payments under grant agreements and leveraged grant agreements may be delegated by the Minister as per HRSDC’s delegation instruments.

15. COST OF MANAGING ALLESP

The cost of managing and administering the ALLESP will come from existing reference levels.

16. DUE DILIGENCE

Departmental systems, procedures and resources for ensuring due diligence in approving transfer payments and verifying eligibility and entitlement for the management and administration of the program are in place.

17. ACCOUNTABILITY FRAMEWORK

17.1 The logic model and performance measurement and evaluation strategies are key elements of the integrated Results-based Management and Accountability Framework and Risk-based Audit Framework in support of ALLESP’s accountability.

17.2 Formative and summative evaluations will be undertaken prior to program renewal to assess the effectiveness of the program.

18. DURATION OF TERMS AND CONDITIONS

These Terms and Conditions will apply effective April 1, 2006 to March 31, 2011.

19. CANCELLATION OR REDUCTION IN DEPARTMENTAL FUNDING LEVELS

Transfer payments may be reduced or cancelled in the event that funding levels are changed by Parliament.

ANNEX B

ADULT LEARNING, LITERACY AND ESSENTIAL SKILLS PROGRAM (ALLESP)

TERMS AND CONDITIONS FOR CLASS CONTRIBUTIONS CONSOLIDATED REVENUE FUNDS

1. INTRODUCTION

The development of the Government of Canada’s new program framework on adult learning, literacy and other essential skills launches HRSDC’s work to lead a coordinated approach within the department to help reduce non-financial barriers to adult learning and to enhance the development of literacy and essential skills. The new program framework is designed to promote accountable, efficient and effective program delivery. In addition, the new framework will assist HRSD in providing Canadians with the tools they need to thrive and prosper in the workplace, encourage and enable individuals, families and communities to reach their full potential, and finally, maintain the quality of life that Canadians expect.

The integration of the National Literacy Program (NLP), the Office of Learning Technologies (OLT) and the Learning Initiatives Program (LIP) into the Adult Learning, Literacy and Essential Skills Program (ALLESP) will provide a better targeted, more focused approach with greater capacity and improved results measurement.

The ALLESP is supported by a set of terms and conditions for contributions and a set of terms and conditions for grants and leveraged grants. These terms and conditions set out the criteria for provision of financial assistance in support of eligible activities to eligible recipients in the form of class contributions. They also may cover necessary expenses incurred during the planning, organizing and operation of projects.

N.B. The ALLESP provisions are consistent with the Treasury Board Transfer Payment Policy.

2. ALLESP OBJECTIVES

The key objectives of the ALLESP initiative are:

• to promote lifelong learning by reducing non-financial barriers to adult learning; and
• to facilitate the creation of opportunities for Canadians to acquire the learning, literacy and essential skills they need to participate in a knowledge-based economy and society.

3. EXPECTED OUTCOMES FOR THE ALLESP

3.1 The expected immediate outcomes of ALLESP are: 1) improved dissemination, transfer and application of knowledge and information; 2) Increased capacity of funding recipients, other stakeholders and end-users; and 3) increased awareness of the benefits of and opportunities for adult learning, literacy and essential skills. Supporting capacity involves funding activities such as the development of a framework for best practices, effective approaches, benchmarks, accountability and assessment tools, and professional development of adult learning, literacy and essential skills practitioners. It enables programs to deliver more effective, higher quality programs.

3.2 The intermediate outcomes for the ALLESP initiative are 1) Programming, services and policies that respond to evolving needs and 2) Enhanced opportunities for adult learning, literacy and essential skills.

3.3 The long term outcome of ALLESPis expected to be the increased participation by Canadians in adult learning, literacy and essential skills.

4. LEGISLATIVE AUTHORITY

The ALLESP is developed under the authority of the Department of Human Resources and Skills Development Act (HRSDC Act, Sections 5 and 7) which assigns to the Minister of Human Resources and Skills Development, styled as Minister of Human Resources and Social Development, a broad mandate with respect to matters relating to the development of human resources of Canada. Section 5 of the HRSDC Act sets out the mandate of the Minister. Subsection 5(1) provides that the “powers, duties and functions of the Minister extend to and include all matters relating to human resources and skills development in Canada over which Parliament has jurisdiction and which are not by law assigned to any other Minister, department, board or agency of the Government of Canada.” Section 7 provides that the “Minister may, in exercising the powers and performing the duties and functions assigned by this Act, establish and implement programs designed to support projects or other activities that contribute to the development of the human resources of Canada and the skills of Canadians”, and that the “Minister may make grants and contributions in support of the programs.” The ALLESP is a program that relates to the mandate of the Minister.

5. TYPE OF FINANCIAL ASSISTANCE – CLASS CONTRIBUTIONS

An applicant is eligible for contribution funding based on the following:

• For applications that focus on adult learning, literacy and/or essential skills.
• For projects that are conducted in collaboration with other programs, federal departments or other levels of government.

6. ELIGIBLE ACTIVITIES

Activities which are eligible for funding must be those which:

• a) support the generation, transfer and application of knowledge in adult learning, literacy and essential skills;
• b) support innovative approaches in adult learning, literacy and essential skills;
• c) strengthen the capacity of the adult learning, literacy and essential skills sectors; and
• d) promote adult learning, literacy and essential skills.

7. ELIGIBLE RECIPIENTS

Eligible recipients include:

• non-profit organisations;
• professional associations;
• all organizations of the voluntary sector;
• provincial and territorial governments and their organizing bodies;
• provincial/territorial institutions including Crown corporations;
• universities, colleges and other educational and training bodies;
• workplace organizations, including sector councils, unions and business associations;
• international non-profit organizations (e.g. OECD);
• municipalities.

Provincial/territorial government departments and agencies are eligible to receive funding only if specified in a federal-provincial/territorial agreement or Memorandum of Understanding, or specifically approved by the Minister.

8. ELIGIBLE COSTS

8.1 Eligible costs are:

• I. salaries and wages for permanent or temporary professional, clerical, technical, and administrative services for time spent directly on the project or program and Mandatory Employment Related Costs;
• II. honoraria;
• III. professional service fees;
• IV. services for administration, accounting and bookkeeping;
• V. rent, normal utilities such as electricity, heat, water and telephone, maintenance of offices and other buildings, and taxes (% of the cost related to the project);
• VI. supplies and materials, shipping charges, stationery, postage, printing, licenses and other fees;
• VII. travel related to projects or programs. International travel must be specifically authorized;
• VIII. computer services, library expenses, research costs and collection and analysis of statistics;
• IX. advertising the availability of project or program services;
• X. training and professional development for staff;
• XI. other administrative expenses that are agreed to by both parties.

Each agreement will identify eligible costs.

8.2 Capital acquisitions are not eligible. However, learning tools integral to the project or program, including computer hardware and software are eligible. These must be explicitly authorized in the agreement.

8.3 Payments to recipients must not exceed the total budget authorized by the agreement, initial or amended.

8.4 Workers’ Compensation: The percentage of the costs related to the project associated with the workers’ compensation actual costs or assessment paid directly to the provincial/territorial workers’ compensation authority on behalf of employers and coordinators for participants or administrative staff are eligible expenditures.

9. MAXIMUM AMOUNT PAYABLE

9.1 The maximum level of financial support per recipient will not exceed $2M annually.

9.2. For the provincial or territorial governments, financial support will not exceed $5M annually per government.

9.3 The maximum duration of an agreement is five years. The agreement will be subject to on-going review.

10. AGREEMENTS

10.1 Each approved proposal will be the subject of a formal agreement which will contain the provisions indicated in Appendix C of the TB Policy on Transfer Payments.

11. APPLICATION REQUIREMENTS

11.1 ALLESP normally considers proposals which are received through the application process as well as those which are unsolicited. Applications for funding must conform to sections 5, 6 and 7 above and, at a minimum, be supported by proposals that:

• are compatible with ALLESP objectives, priorities and criteria;
• state the project objectives, describe the activities to be funded, outline a timeframe, expected results and deliverables;
• demonstrate how the project fills a gap or meets an identified need;
• demonstrate how project outcomes will benefit Canada and Canadians;
• outline how the project will be evaluated and success will be determined;
• outline a dissemination plan for the results of the project;
• attest that the applicant would not be able to undertake the project without the financial assistance of the ALLESP initiative;
• include financial information on costs to be incurred;
• provide basic organizational data;
• demonstrate the capacity and experience to manage the proposed project;
• disclose the involvement of former public servants who are subject to the Post-employment Measures of the Values and Ethics Code for the Public Service, the Conflict of Interest and Post-Employment Code for Public Office Holders, the Conflict of Interest Code for Members of the House of Commons, the Parliament of Canada Act and the Lobbyists Registration Act;
• identify all sources of funding for the proposed activities, including funding under other government programs.

11.2 Applicants shall provide assurance that, where lobbyists are utilized, they are registered pursuant to the Lobbyist Registration Act and that no actual or potential conflict of interest exists nor any contingency fee arrangement.

11.3 Some or all of the following may also be required in the application:

• Agreement to acknowledge the financial assistance of the department in a form acceptable to the department;
• verification of the applicant’s eligibility in accordance with the requirements of the Act Respecting the Ministère du Conseil exécutif (L.R.Q., M-30) for the Province of Quebec only;
• verification of funding from partners;
• lobbyists’ information;
• declaration of Amounts Owing to the Government of Canada;
• other information as may be required.

12. STACKING PROVISION

12.1 Where the recipient is not a government organization, Total Government Assistance (federal, provincial or municipal) may not exceed 95% of eligible costs. Where the recipient is a provincial / territorial or municipal government, Total Government Assistance (federal, provincial, municipal) may total 100% of eligible costs.

12.2 In the event that actual Total Government Assistance to a recipient exceeds the stacking limit, it will be necessary for the department to adjust its level of assistance (and seek reimbursement, if necessary) so that the stacking limit is not exceeded.

12.3 Potential recipients must disclose other sources of proposed funding, in the application prior to, and at the conclusion of the project.

12.4 Any overpayments, unexpended balances, or disallowed expenditures will be considered debts to the Crown and must be returned to the Government of Canada.

12.5 Potential recipients are expected to contribute resources (including cash and/or in-kind) to the project. ALLESP will not provide 100% of the project funding.

13. PAYMENT SCHEDULE

13.1 Advance payments may be provided, where necessary, in accordance with Treasury Board’s Cash Management Policy on Transfer Payments.

13.2 Any payments that exceed the amount to which the recipient is entitled are debts to the Crown and must be repaid.

13.3 Contributions are normally paid on the basis of achievement of performance objectives or as reimbursement of expenditures incurred. Where advance payments are necessary, they should be limited to the immediate cash requirements of the recipient and not less frequently than the following payment schedule:

Total Value of Annual Contribution According to the Duration of Agreement

Total Value of Annual Contribution	Less than 4 months - Duration of Agreement	Initial Advance - 4 months or longer - Duration of Agreement	Subsequent Advances - 4 months or longer - Duration of Agreement
Up to $24,999	90 %	90 %	N/A
$25,000 - $100,000	90 %	Up to 75%	Quarterly
$100,001 - $250,000	50 %	First quarter	Quarterly
$250,001 - $500,000	50 %	First quarter	Monthly, beginning in 4th month
Over $500,000	Monthly	First month	Monthly

13.4 For agreements of less than 4 months, the schedule represents the maximum percentage that may be paid out initially, with the balance payable monthly or at the end of the agreement. Ten percent (10%) of the total funding amount payable in the last fiscal year for contributions will be withheld until after completion of activities and submission of a final claim, which satisfies all reporting requirements of the agreement.

14. DELEGATION OF FINANCIAL SIGNING AUTHORITIES

14.1 The approval of proposals for applicants may be delegated by the Minister of Human Resources and Social Development as per HRSDC’s delegation instruments. The Minister may establish advisory or consultative mechanisms to assist in the process.

14.2 Authority to approve, sign or amend contribution agreements may be delegated by the Minister of Human Resources and Social Development as per HRSDC’s delegation instruments.

14.3 The authority to approve payments under contribution agreements may be delegated by the Minister as per HRSDC’s delegation instruments.

15. EVALUATION

Projects funded by the ALLESP initiative are subject to evaluation by HRSDC to determine project success in meeting its objectives and its contribution to the achievement of overall program objectives. Details related to ALLESP evaluation activities are outlined in the integrated Results-based Management and Accountability Framework and Risk-based Audit Framework for ALLESP (RMAF-RBAF).

16. AUDIT

Details related to monitoring and audit of contribution agreements are outlined in the integrated RMAF-RBAF (see Annex C).

17. COST OF MANAGING ALLESP

The cost of managing and administering ALLESP will come from existing reference levels.

18. DUE DILIGENCE

Departmental systems, procedures and resources for ensuring due diligence in approving transfer payments and verifying eligibility and entitlement for the management and administration of the program initiative is in place.

19. DISPOSAL OF CAPITAL ASSETS

Any asset purchased through the funding agreement costing $1,000 or more may be disposed of in a manner determined by HRSDC. The governing consideration will be to encourage the continued use of assets in support of the objectives of the program initiative and to ensure that the assets are not redirected for HRSDC’s own use.

20. ACCOUNTABILITY FRAMEWORK

The logic model and performance measurement and evaluation strategies are key elements of the integrated Results-based Management and Accountability Framework and Risk-based Audit Framework in support of ALLESP’s accountability.

21. INTELLECTUAL PROPERTY

Where it is to the advantage of Canadians, and not detrimental to the goals of the recipient, HRSDC will negotiate the shared use of any intellectual property developed by the recipient or through a third party. The rights to use this material will include further use of data for research purposes, publishing the intellectual property on HRSDC’s web site or in printed documents and publications.

22. DURATION OF TERMS AND CONDITIONS

22.1 These Terms and Conditions will apply and payments will be made effective April 1, 2006 until March 31, 2011.

22.2 Formative and summative evaluations will be undertaken prior to program renewal (see Section 15 above).

23. EXEMPTIONS FOR PURPOSES OF HONOURING THE CANADA-QUEBEC PROTOCOLE D’ENTENTE ON LITERACY

23.1 In 2002, a five year Protocole d’entente on literacy was signed with the Government of Quebec. This protocole will terminate on March 31, 2007. As part of the Protocole d’entente, a contribution agreement will be negotiated and signed after March 31, 2006, covering the period September 2006 to March 2007. That contribution agreement will be governed by these present ALLESP terms and conditions for contributions.

23.2 Exemptions are required to honour the Protocole d’entente. These include an exemption permitting a) an annual 80% - 20% two-payment schedule and b) retention or distribution of interest costs reasonably expected to be incurred by the Government of Canada.

23.3 The annual two-payment schedule will have the result of allowing the community organizations in Quebec that receive federal funds as a result of the Protocole d’Entente to receive funding allocations in a manner equitable to other grassroots organizations across Canada who receive modest grants directly from HRSDC. Also, allowing a flexible approach to payments provides an additional tool for the federal government to demonstrate its interest and willingness to continue to work in inter-governmental collaboration. This arrangement will require an exemption from the TBS Cash Management Policy under sections 7.6.1, 7.6.3. and 7.6.4 of the TB Transfer Payment Policy.

23. 4 With the two-payment approach, there will be a small accumulation of interest costs which will be incurred by the Government of Canada. In the interests of intergovernmental relationships, HRSDC will exercise authority to retain or distribute the amount of these interest costs reasonably expected to be incurred by the Government of Canada, in arriving to the amount of the transfer payment. This arrangement will require an exemption to the Cash Management Policy, section 7.6.9. It should be noted that on $1,788,441 the interest amount is $3,251.39 based on a 90 day T Bill on October 19, 2005, as per the TB Transfer Payment Policy.

24. CANCELLATION OR REDUCTION IN DEPARTMENTAL FUNDING LEVELS

Transfer payments may be reduced or cancelled in the event that funding levels are changed by Parliament.