Financial Performance Certification

Any First Nation seeking to demonstrate financial capacity or performance can request a Financial Performance Certificate from the FNFMB under FNFMB’s Certification licensing agreement.

First Nations scheduled to The First Nations Fiscal Management Act (FMA) and intending to become a borrowing member of the FNFA and seeking long-term financing from them, must obtain a Financial Performance Certificate. In order to obtain this certificate, a First Nation must have a Financial Administration Law (FAL) that meets FNFMB standards (click here to see FAL Approval Services).

The Financial Performance Certification is a point in time assessment of financial condition that is meant under the FMA to be used by First Nations as a qualifying certificate to access a loan from the First Nations Finance Authority (FNFA) – the institution with the mandate to pool First Nation borrowing through the Capital Markets on a similar basis as other governments in Canada. It should be noted that the Financial Performance Certificate is but one criterion that FNFA will use in their determination to provide a loan to a First Nation. The Financial Performance Certificate is not intended to provide the basis for assessing credit worthiness for a particular loan, rather, the assessment evaluates how well a First Nation is using its resources to run its government and provides a signal of overall financial health of a First Nation which can assist users in identifying trends and foreseeable risks that in aggregate provides insight in the First Nations fiscal stewardship.

The basis of the Financial Performance Certification is the C2 – Financial Performance Standards which are comprised of 7 comprehensive financial ratios that are calculated using information reported in the First Nations audited financial statements. To obtain adequate trend analysis, the most recent 5 years audited financial information will be used.

Summary of Financial Performance Ratios

1. Fiscal Growth Rate (FGR): measures financial capacity or risk of overall structural deficit.

2. Liquidity Test Rate (LTR): measures the ability to meet short-term operating obligations.

3. Core Surplus Rate (CSR): measures ability to generate sufficient annual cash flows to maintain operations.

4. Asset Maintenance Ratio (AMR): measures the ability to maintain a sustainable level of capital investment.

5. Net Debt Ratio (NDR): measures debt burden and overall insolvency

6. Budget Performance Rate (BPR): measures the ability to manage and execute budgets

7. Tax Collection Rate (TCR): measures the efficiency and stability in collecting on property taxes.

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Steps for Financial Performance Certification

Where a First Nation is requesting the FNFMB to issue the First Nation a Financial Performance Certificate for purposes of becoming a borrowing member, and or to secure a specific loan from the First Nations Finance Authority, the First Nation should ensure the steps below are completed.

First Nations requesting FNFMB to issue a Financial Performance Certificate for purposes other than to access financing through the FMA, can send an email request to and the FNFMB Certification team will advise on appropriate procedures.

Steps for Financial Performance Certification

1. Become Scheduled to the FMA

2. Financial Performance Orientation

  • The First Nation should understand their objectives for requesting a Financial Performance Certificate and obtain appropriate understanding of the Financial Performance Standards.
  • Upon request, FNFMB can arrange a presentation to Leadership and appropriate First Nation personnel to introduce the Financial Performance standards and concepts.
  • In the first instance it is recommended that the First Nation review the following documents:

3. Informal Review of Financial Performance

  • To initiate an informal review the FNFMB must have received a duly signed Template 3 – Letter of Cooperation for FAL & FP Certification. The letter of Cooperation is non-binding but signifies Chief and Council’s support to move forward with the process and identifies key First Nation personnel in the process.
  • An informal review request can be sent by email ( and should clearly state that the First Nation is requesting an informal Financial Performance Review and must identify the First Nation key personnel for the request and their contact information.
    • FNFMB will respond to the email to discuss the scope of the review and the anticipated timeframe.
  • A copy of each of the most recent 5 years audited financial statements must accompany the informal review request. It is preferred that these documents are attached to the email request, but if not possible the documents can be delivered by Canada Post or by fax (604-925-6662).
  • FNFMB will communicate the results of the Performance Review and if required may request other financial information needed to support the financial performance calculations.

4. Formal Request for a Financial Performance Certificate

  • A First Nation must have a Compliance Approval of their Financial Administration Law or Laws before a Financial Performance Certificate will be issued. (Click here for steps to develop a FAL). The Financial Administration Law development and Financial Performance Certification request can be done concurrently.
  • A formal request is made by submitting the following documents:
    • Band Council Resolution – Requesting Financial Performance Review
  • The procedures and submission requirements mentioned above can also be found in the following document. C1 – Financial Performance Certification Procedures

5. FNFMB Review and Certification

  • FNFMB will conduct a Review of the submitted financial information against FNFMB Financial Performance standards.
  • FNFMB will send a Letter of Notification to the First Nation informing them of the Board decision.
  • The letter of notification will be accompanied with a Review Report that will detail observations and findings in making the determination to issue or not issue a Certificate.
  • First Nations that are in compliance with the Financial Performance Standards will be issued a Financial Performance Certificate.