Policy on Annual Fee and Salary Increases Under Multi-Year Service Contracts and Contribution Agreements for the Delivery of International Development Assistance (Revised August 1st, 2016)

Global Affairs Canada's Policy on Annual Fee and Salary Increases under Multi-Year Service Contracts and Contribution Agreements for the Delivery of International Development Assistance is based on a Treasury Board decision (TBD 811734) made on July 26, 1989, and the Treasury Board Policy on Transfer Payments, whose objective is to ensure sound management and responsible spending of public funds.

I. Service contracts entered into with Global Affairs Canada – Headquarters

Global Affairs Canada has the authority to determine the rate of fee increases for consultants under a service contract for the delivery of International Development Assistance. These increases are determined in accordance with the following principles:

  1. The annual rate of increase is established in accordance with the lower of:
    • a. the Consumer Price Index (CPI) for the past 12 months, as determined by Statistics Canada; or
    • b. the average annual increase for the Public Service salary levels for the same period, as determined by Treasury Board.
  2. The applicable rate of increase is determined by the Grants and Contributions Financial Policy Section and published on August 1st of each year.

For the Consultant to trigger a fee increase, the revised rate (based on the percentage of increase established by Global Affairs Canada) must be submitted to the Global Affairs Canada representative for confirmation prior to submitting an invoice at the revised rate.

The rate specified in a multi-year service contract may be increased annually, on the contract anniversary date. After having obtained Global Affairs Canada’s confirmation of the revised rate, the Consultant will be authorized to apply the revised rate to his invoices. However, this new rate can only be applied to workdays that have not already been invoiced. Global Affairs Canada will not accept a payment request at a revised rate for workdays previously billed at a former rate.

II. Contribution agreements

Global Affairs Canada recognizes as potential allowable expenses salary increases paid to employees of an Organization with which the department has signed a contribution agreement to support the implementation of a project or program.

Where there is a collective agreement in force, or where the board of directors of the Organization has authorized a salary increase applicable to all of the Organization's employees, salaries may be increased in accordance with the collective agreement or the board of directors' decision.

To be eligible expenditures under the contribution agreement, increases shall be reasonable, comparable to market working conditions, and approved by Global Affairs Canada. Namely, this implies they are not meant to reward particular project staff based on their performance or as an incentive for retention of project staff.  These types of increases are the sole responsibility of the Organization.

The salary increase rate must be applied consistently to all employees within the Organization. In certain situations, the Organization may decide that some employees will not receive a salary increase. Should this be the case, the savings related to these measures may not be redirected to reward other employees with higher increases.

This Policy does not apply to organizational restructuring and salary review exercises that the Organization may decide to conduct during the life of a contribution agreement.  Global Affairs Canada will treat such situations on a case by case basis and could decide not to approve the reimbursement of employee salaries at revised rates.

In the absence of a collective agreement, or of a document approved by the board of directors of the Organization and indicating a salary increase applicable to all of the Organization's employees, the rate defined by Global Affairs Canada in accordance with section I. Service contracts entered into with Global Affairs Canada - Headquarters or section III. Service contracts entered into with a Canadian Mission Abroad and salaries of local employees under contribution agreements and the terms and conditions prescribed therein shall apply. Any other salary increase above this rate will not be deemed allowable under the contribution agreement.

Where an Organization must obtain Global Affairs Canada’s approval of salary increases, the Organization shall submit its request in writing prior to the effective date of the collective agreement or the board of directors' decision.

In no case shall salary increases be used to justify a request to increase the budget line item of the contribution agreement.

Sub-contracts entered into by the Organization are not subject to this policy. Annual increases are to be managed as agreed upon by the Organization and the sub-contractor.

III. Service contracts entered into with a Canadian Mission Abroad and salaries of local employees under contribution agreements

The salary of locally engaged staff and local employees, paid in local currency, may be increased annually on the agreement anniversary date up to the CPI of the recipient country for the past 12 months. The application of this rate shall be justified and documented. The Consultant/Organization shall have previously identified the impact on salaries and have received Global Affairs Canada’s approval of salary increases.

Global Affairs Canada will not accept a payment request at a revised rate for workdays previously claimed at a former rate.

Date Modified: