Guide to the Preparation of Part III of the
2005-2006 Estimates - Reports on Plans and Priorities and Departmental Performance Reports

Foreword (updated)

Canadians want good governance and they want to know that government programs are well managed. They want greater openness, transparency and accountability. They want to be able to hold Parliament, their government and public sector officials to account for results. Thus, government reporting to Parliament and to the public must become more timely, balanced and useful.

The government’s commitment to improve reporting to Parliament has been ongoing. Numerous requests were received from parliamentarians and Canadians to improve transparency and accountability of government suggest that the mechanisms through which government informs Parliament and Canadians about its financial and non-financial information still require improvement, especially as they affect Parliament’s ability to bring the government to account for its management of public funds.

Past reports from the Office of the Auditor General of Canada (OAG) have been critical of the quality and relevance of the information contained in departmental planning and performance reports. The House of Commons Standing Committee on Government Operations and Estimates also clearly called for greater Treasury Board of Canada Secretariat (Secretariat) involvement in improving and reforming Estimates documents to better support decision making of parliamentarians and the government. As per paragraph 7(1)( c ) of the Financial Administration Act , it is the responsibility of the Secretariat to look after all matters relating to the Estimates. The Estimates consist of:

• Part I – The Government Expense Plan
• Part II – Main Estimates
• Part III – Reports on Plans and Priorities and Departmental Performance Reports; and
• Supplementary Estimates

The departmental guidance for the preparation of the reports on plans and priorities (RPPs) and departmental performance reports (DPRs) was integrated for the reporting cycle 2005-06 to help reinforce the complementarities between the two documents and their parallel reporting requirements. The integrated guidelines should better support departments¹ in providing more consistent information on their plans, priorities, results, and resources in relation to the achievement of their strategic outcomes, which are the long-term benefits departments strive to achieve for Canadians.

The Secretariat continues to modernize its management of government expenditures through the implementation of the Management Resources and Results Structure (MRRS) and its approach to gathering and reporting expenditure performance information through the new Expenditure Management Information System (EMIS), which is under development.

The intention of MRRS is to provide a standard, government-wide approach to planning and managing the relationship between resources and results, while serving as a consistent and enduring foundation for financial and non-financial reporting to Parliament.

Each department will develop its own MRRS, which is comprised of the following:

1. clearly defined strategic outcomes that reflect the department’s mandate and vision and that are linked to government-wide priorities and intended results — they also provide the basis for establishing horizontal linkages between departments;
2. a Program Activity² Architecture (PAA) that:
   1. provides an inventory of the department’s program activities to support executive and departmental decisions;
   2. links program /activities to strategic outcomes;
   3. provides planned and actual information on resources and results for each element and level of the PAA;
   4. enables departments to provide a consistent reporting structure to Parliament;
   5. serves as the basis for resource allocation and reallocation decisions by Parliament, the Treasury Board, and departmental management; and
3. a governance structure that reflects the way the organization is managed and briefly outlines decision-making mechanisms, responsibilities, and accountabilities. The governance structure should clearly reflect how departments manage their diverse program activities to achieve common strategic outcomes and illustrate how departments allocate and reallocate resources to these ends.

EMIS (currently under development) is a centralized information system that will allow the government to integrate financial and non-financial information across departments and agencies. This system is expected to provide the basis for collecting better quality financial and non-financial information, thereby improving the department’s ability to manage and the government’s capacity to account for resources used and decisions made on behalf of Canadians.

Both the MRRS policy and EMIS are consistent with the Management Accountability Framework (MAF), that requires deputy ministers and their executive teams to collect relevant performance information and use it for decision-making purposes, including allocation and reallocation decisions. As such, the PAA and related instruments for reporting to Parliament are key sources of input to assess departmental management and use of performance information through the MAF assessment process.

In shifting the reporting of the Estimates from the previous business line structure to the new PAA, the intent is for reports to more closely reflect what departments do and explain how they manage resources to achieve their strategic outcomes and the departmental priorities they identified for the planning period. It is expected that the RPPs and DPRs, once based on the PAA, will provide more in-depth and systematic information on departmental expenditures and performance that is consistent with each department’s MRRS. This structure should provide parliamentarians and Canadians with the proper tools to enhance their scrutiny of government expenditures.

The PAA structure will be used for the 2005–06 Annual Reference Level Update, the Main Estimates, the RPPs and the DPRs and it will support the expenditure framework’s input into Budget exercise.

The RPPs and DPRs will remain closely linked to the “whole of government framework” used for whole of Government reporting (i.e. Canada’s Performance ). The whole of government framework is designed to improve reporting to Parliament by helping parliamentarians understand overall spending, performance and planning information and high-level priorities of the government.

The whole of government framework groups departmental strategic outcomes and program activities into 13 long-term benefits to Canadians – referred to as “Government of Canada Outcomes” in three broad sectors:

1. Economic
   • strong economic growth;
   • an innovative and knowledge-based economy;
   • income security and employment for Canadians;
   • a fair and secure marketplace; and
   • a clean and healthy environment
2. Social  
   • healthy Canadians with access to quality health care;
   • diverse society that promotes linguistic duality and social inclusion;
   • a vibrant Canadian culture and heritage; and
   • safe and secure communities
3. International
   • a strong and mutually beneficial North American partnership;
   • A prosperous Canada through global commerce;
   • a safe and secure world through international cooperation; and
   • global poverty reduction through sustainable development

In addition to these 13 Government of Canada outcomes, the strategic outcomes and program activities of federal organizations that work across traditional portfolio boundaries by providing support to other departments and agencies, or by contributing to strengthening and modernizing public sector management as a whole (i.e. the Treasury Board of Canada Secretariat, the Public Service Commission of Canada, Statistics Canada, and Public Works and Government Services Canada) should be aligned to:

• Federal organizations that contribute to all Government of Canada outcomes

The alignment of Strategic Outcomes and their corresponding program activities makes it possible to calculate spending by Government of Canada outcome.   For this reason, and to arrive at the correct total for all government spending, a program activity can only be aligned to one Government of Canada outcome. A strategic outcome, however, can contribute to more than one Government of Canada outcome.