Policy on Cost-Sharing for Grant and Non-Repayable Contribution Agreements

Global Affairs Canada
July 2019

1 Objective

1.1 The objective of the Policy on Cost-Sharing for Grant and Non-Repayable Contribution Agreements (“the Policy on Cost-Sharing”) is to provide clarity, transparency and predictability to the application of cost-share requirements for Global Affairs Canada (the Department), its applicants and its recipients.

1.2 The Policy on Cost-Sharing outlines the percentage, types and sources of contributions that the Department will accept as cost-share. It also outlines accountability, assessment, compliance, monitoring and reporting requirements.

2 Application

2.1 The Policy on Cost-Sharing applies to all grantFootnote 1 and non-repayable contribution agreements approved by the Department that are associated with international assistance.

2.2 The policy will not supersede any terms and conditions associated with development, foreign affairs or trade programming.

3 Effective date

3.1 The Policy on Cost-Sharing is effective as of October 1, 2018, and applies to all new applications for funding received on or after April 1, 2019.

3.2 The policy may be reviewed, as required.

4 Parameters

4.1 Types of cost-share

4.1.1 The Policy on Cost-Sharing only allows cost-share contributions, either cash and/or in-kindFootnote 2, that are deemed eligible project costsFootnote 3. Any combination of cash and/or in-kind contributions is acceptable.

4.1.2 The source of the recipient’s cost-share contribution can be from Canadian and/or international sources. In all cases, contributions must come from auditable sources to ensure they can be verified by the Department, as may be required.

4.2 Sources of cost-share

4.2.1 The cost-share contribution can be provided by the recipientFootnote 4 and/or other sources, including other civil society organizations, other donor(s) or international organizations, other country governmentsFootnote 5 , regional institutions or the private sector.

4.2.2 The recipient may receive funds from other sources, including monies raised for child sponsorship, but they must maintain records to substantiate that they have been transparent with their funders that donations could be used as cost-share to support broader international assistance programming. These records must be made available to the Department, upon request.

4.2.3 Funding received from Canadian federal government sources cannot be used toward cost-share contributions.

4.2.4 The contributions of a project’s intended recipients cannot be used to account for the recipient’s cost-share. In the context of this policy, “intended recipients” means the individuals or organizations that directly benefit from the project.

5 Accountability

5.1 The cost-share contribution must be accounted for by the recipient with whom the Department has signed the agreement.

5.2 Eligible cash contributions coming from other sources must flow through the accounts of a signatory to the agreement, unless an adequate rationale has been provided to and accepted by the Department.

6 Percentage

6.1 A minimum rate of 5% cost-share will be required for all international assistance projects, unless stipulated in the terms and conditions of a specific program. Exemptions are outlined in Appendix 2.

6.2 Any exemption that is not already referenced in Appendix 2 must be justified within approval documents on an exceptional basis.

7 Assessment

7.1 The cost-share percentage stipulated in this policy is a minimum threshold. Recipients are encouraged to exceed the minimum, however, as much as possible.

7.2 The applicant will not be awarded funding if it does not include the required minimum cost-share in its application or if it is deemed unable to contribute the minimum cost-share required by the Policy on Cost-Sharing.

7.3 The cost-share contribution must be of fair valueFootnote 6 for either in-kind or cash contributions as opposed to fair market value.

8 Monitoring and reporting

8.1 The recipient must report all cost-share contributionsFootnote 7 from eligible sources.

8.2 The cost-share contributions will be monitored by the Department throughout the project duration.

8.3 The cost-share contributions must be identifiable, verifiable, transparent and auditable during and after the project period.

9 Compliance

9.1 The Department reserves the right to verify, prior to signing the agreement, whether the recipient is in a financial position to contribute the proposed cost-share.

9.2 The Department reserves the right to proceed with one or a combination of actions if the recipient is not contributing the required cost-share and has not provided an adequate justification. These actions include:

  • requiring the recipient to pay the cost-share amount owing;
  • withholding amounts from any payment;
  • terminating the agreement or modifying its terms.

10 DefinitionsFootnote 8

  • Beneficiary (ies): People and organization(s) in the country (ies) that directly benefit from the project.
  • Cost-share: Cash or in-kind contribution, where project costs are shared by the involved parties, according to an agreed-upon formula.
  • Eligible costs: Direct project implementation costs, such as salary and travel costs, which are outlined in the approved budget. Eligible costs depend on the exact nature of the project and can vary from one project to another. Some costs could be deemed non-essential to obtain expected results and would therefore be ineligible for reimbursement.
  • Fair market value: Methodology that includes the notion of profit and is defined as a value determined and agreed upon by two willing parties in a market where competition can be freely exercised.
  • Fair value: Methodology based on a value that can be attributed to a service or asset, excluding profit margin and/or overhead.
  • In-kind contribution: A non-cash contribution provided to the project in the form of goods or services to which a value can be attributed, and that would have been otherwise purchased and paid for during the project life cycle to achieve the results.
  • Recipient: Signatory (ies) to the financial instrument.

Appendix 1: In-Kind Contributions for Grant and Non-Repayable Contribution Agreements

1 Purpose

To provide information and set principles regarding the types and valuation of eligible in-kind contributions.

2 Eligibility

To be accepted and recognized, an in-kind contribution must:

  • be directly related to the implementation of the project (in other words, the good or service would otherwise have been purchased to achieve the desired project results);
  • be offered at no costFootnote 9;
  • be based on the fair valueFootnote 10 as opposed to the fair market value;
  • be identifiable, verifiable and auditable throughout the project life cycle; and
  • not have been paid for by the Department or from other federal government sources.

2.1 Volunteer services

The value attributed to a volunteer’s service must be determined based on the rate of compensation associated with equivalent services under similar working conditions. Where the services are offered as in-kind by the recipient’s employees, the recipient will be required to demonstrate that such employees are on unpaid leave.

2.2 Facilities and assets

Where the recipient’s in-kind contribution is in the form of consumable goods, facilities or assets of a combined value greater than $200,000, the Department must confirm the valuation of the in-kind contribution prior to the signature of the agreement. Below the threshold of $200,000, the in-kind contribution will not be accepted by the Department.

2.3 Loyalty points or equivalent

The use of loyalty points or equivalent for travelling is acceptable provided that the lowest fare rate was used as well as the most direct routing at the time of reservation.

3 Assessment

The organization is responsible to identify, assess and validate its in-kind contributions using the above eligibility criteria. This assessment will be reviewed by the Department on an individual project basis.

Appendix 2: Cost-sharing parameters

Policy on cost sharing is applicable
Project amountCost-share levelGuidance note
>$250,000Footnote 11Minimum 5%Cost-sharing required for project amounts greater than or equal to $250,000.
Policy on Cost-Sharing is NOT applicable
Institutional supportNot applicable because the Department has decided to support the core operations of the recipient, which align with key results or objectives of the Department.
International humanitarian assistanceNot applicable because of the immediate life-saving nature of this type of programming.
Organizations receiving assessed contributions from CanadaNot applicable because assessed contributions are Canada's assessed share of the costs of operations of an international organization of which Canada is a member.
The Policy on Cost-Sharing will not supersede any specific terms and conditions associated with development, foreign affairs and trade programs.


Footnote 1

A grant is an unconditional transfer payment that a recipient does not need to account for or that is not normally subject to audit by the Department. As a result, the recipient will not be required to report on the cost-share for grants.

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Footnote 2

Appendix 1 sets principles related to the types and evaluation of eligible in-kind contributions.

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Footnote 3

See section 10 for the definition of eligible costs. In cases where the proposed cost-share is in the form of debt or equity, eligibility will be determined on a case-by-case basis and therefore be subject to the Department’s approval prior to the signing of the agreement.

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Footnote 4

“The recipient” is used in the singular form, even though in some cases there may be more than one recipient signatory to the agreement.

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Footnote 5

Cost-share contributions cannot come from other country governments that are beneficiaries of the project. See clause 4.2.4.

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Footnote 6

Fair value and fair market value are defined in Definitions. 

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Footnote 7

A grant is an unconditional transfer payment that is not subject to being accounted for by the recipient or normally subject to audit by the Department. As a result, the recipient will not be required to report on the cost-share for grants.

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Footnote 8

The definitions outlined in this document have been tailored for the purpose of the Policy on Cost-Sharing.

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Footnote 9

Where the recipient incurs costs for providing goods or services, the contribution will be deemed monetary and will be valued in accordance with the costs incurred.

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Footnote 10

The definitions of “fair value” and “fair market value” are available in section 10 of the policy.

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Footnote 11

In the case of international development assistance, project amounts above the ministerial authorities in effect must be approved by Treasury Board.

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