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Mission Statement Performance Measurement Indicator Board of Management Department of Finance Communications Office Department/Management Services Division Financial/Administrative Services Information and Technology Services Human Resource Services Management Services Taxation and Fiscal Policy Division Budget Policy and Fiscal Relations Tax Policy New Brunswick Statistics Agency Budget and Financial Management Division Budget Services Financial Management Services Performance Measurement

Treasury and Debt Management Division Financial Policy and Debt Management Treasury Management Trust Fund Administration Revenue Division Organizational Changes Policy and Communication Accounting, Audit and Central Services Account Management System Development and Support Human Resources Management Division Labour Relations Services Program Services Strategic Services Human Resource Information Public Service Employee Benefits Tables Table 1 / Expenditure Status Report by Primary Table 2 / Adjudication totals for Parts I, II and III Table 3 / Competition by Department Table 4 / Pension Plans Table 5 / Insured Benefits Summary

Performance Measurement Indicator

Department of Finance

Goal

Indicator

Target

Results

This means a budgetary surplus over the four-year period is well within reach. A budgetary surplus of $74 million was projected for 1996-1997. The audited financial statements for 1996-1997 show a surplus of $125.4 million which has been applied against the net debt.

Under the four-year fiscal plan, surpluses are projected for each year until 1999-2000. The department is confident that continued hard work and good fiscal management will result in achievement of the overall goal.

Source of Information

Board of Management

The Board of Management is a committee of cabinet established by authority of the Financial Administration Act and is empowered to act on matters concerning:

• financial management, including budget estimates, expenditures, accounts, fees and revenues;
• establishment of the government's multi-year expenditure plan and annual departmental spending targets;
• review of departmental budgets to ensure they are consistent with government policy and expenditure targets;
• development and preparation of the government's annual capital budget;
• administrative policy in the public service;
• the organization of the public service or any portions thereof, and the determination and control of establishments therein;
• human resource management, including training, development of personnel, pay regulation and hours of work;
• determination of the human resource requirements of the public service, and
• collective bargaining in the public service.

In March 1997, the Board of Management comprised the following cabinet ministers:

• Edmond P. Blanchard, Q.C.
  Chair of the Board of Management and Minister of Finance

• Ann Breault
  Minister of Municipalities, Culture and Housing and vice-chair of the Board of Management

• Alan Graham
  Minister of Natural Resources and Energy

• Doug Tyler
  Minister of Agriculture and Rural Development

• Jean-Paul Savoie
  Minister of State for the Regional Development Corporation and Northern Development

• Sheldon Lee
  Minister of Transportation

• Bruce Smith
  Minister of Supply and Services

• Bernard Thériault
  Minister of Fisheries and Aquaculture

• Bernard Richard
  Minister of State for Intergovernmental and Aboriginal Affairs and Acting Minister of Justice and Attorney General

• Georgie Day
  Minister of State for Literacy and Adult Education, and Minister of State for Youth

Department of Finance

March 31, 1997

Communications Office

Department/Management Services Division

Financial/Administrative Services Branch

The branch's 1996-1997 work plan consists of the following key result areas:

• Co-ordination of the budget process for the above noted departments;
• Monitoring of the above departmental budgets;
• Provision of sound accounting and auditing practices;
• Co-ordination of departmental legislative procedures;
• Documentation of government-wide policies and publication of the departmental annual report;
• Provision of central records management, and
• General administration and support services.

Information and Technology Services Branch

During 1996-1997 fiscal year, the branch focused on the following key result areas and related activities:

• Support and Consulting: Assessment of the Year 2000 problem and development of a strategy to correct the systems identified as problematic;
• Information Technology Infrastructure: Evaluation of the department's software needs along with development and implementation of a strategy to upgrade the current infrastructure;
• Electronic Operation: The branch has supported the department in its effort to utilize the Internet as a means to access departmental information by the public and the employees;
• Data Management: Management of various databases to provide the department with better information for decision making, and
• Information and Technology Organization: The branch has been involved in a number of internal and government-wide committees established to improve the management of information and technology.

• Staffing;
• Classification;
• Labour/management issues;
• Performance management;
• Second-language training;
• Training and development;
• Benefits;
• Equal Employment Opportunity Program;
• Employee Assistance Program;
• Employee Suggestion Program, and
• Official languages.

• Co-ordination and facilitation of the transfer of employees to Revenue Canada as a result of the harmonization of sales taxes;
• Transfer staff of Service New Brunswick and revenue offices to New Brunswick Geographic Information Corporation;
• Completion of 15 competitions;
• Reviews of internal classifications;
• The hiring of eight Equal Employment Opportunity candidates;
• Co-ordination of training programs;
• Workplace wellness training;
• Review of the performance management system;
• Redeployment of staff affected by workforce adjustment, and
• General support functions were provided to managers and employees on a continuous basis.

Included in this year's projects are

• Project management support to the tax harmonization project in the Taxation and Fiscal Policy Division, including direct involvement in negotiations, team leadership, and numerous presentations and proposals to government;
• Continuation of the branch's role as the Centre for Quality Service;
• Completion of a review of the New Brunswick Video Lottery Program including recommended actions;
• Continued participation in the development and implementation of a government-wide performance measurement system;
• Continued participation and support to the human resource business transformation project;
• Participation in a multi-departmental committee on the integration of the Privacy Act with the Right to Information Act;
• Strategic and project methodology support to the evolution of the Revenue Management System;
• Representation on the inter-departmental committee on Internet;
• Facilitation and project management support to the Department of Health and Community Services, re: efforts to restructure the Hospital Services Division, and
• Facilitation assistance in a review of the tasks and structure of the Taxation and Fiscal Policy Division.

The division is also responsible for federal-provincial negotiations concerning various agreements, tax issues and the operation of federal grant programs. As well, the division represents the Province's interests through participation in intergovernmental forums, thereby providing a guarantee the Province's financial interests are protected with respect to its taxation and fiscal relations with the Government of Canada. The division ensures those positions are clearly communicated to the federal government as well as to other provinces and departments.

The division has administrative responsibilities concerning personal and corporate income taxes and reciprocal taxation and is responsible for ensuring that provincial legislation reflects government tax and fiscal policy.

Budget Policy and Fiscal Relations Branch

Monitoring the budget and developing and co-ordinating the revenue forecast are also part of the branch's mandate. In addition, the branch forecasts, monitors and analyzes:

• the flow of payments from Canada, concerning personal and corporate income taxes;
• the federal Equalization Program which is an unconditional transfer;
• federal contributions in support of social programs, i.e., the Canada Health and Social Transfer which provides funding for health, post-secondary education, social assistance and services.

The branch was successful in negotiating a final settlement of $6 million in respect of its 1993-1994 fiscal stabilization claim. The fiscal stabilization program is a federally administered program which protects provinces from year-over-year revenue declines, subject to federal definitions.

The branch was involved in negotiations of a major tax reform measure –– the harmonization of the provincial sales tax and the federal Goods and Services Tax. Its primary responsibility was negotiating the allocation formula which will determine the Province's share of revenues collected. In addition, the branch worked with the Tax Policy Branch in the development of the Large Corporations Capital Tax.

The branch also provided the lead in negotiations to reform the Canada Pension Plan (CPP), as well as the CPP consultation process.

In addition, the branch was involved in the development of a comprehensive net debt reduction plan for the Province.

During 1996-1997, the Budget Policy and Fiscal Relations Branch prepared forecasts of provincial revenues monthly, quarterly and for multi-year fiscal framework presentations and the annual budget. The branch also monitored and assessed monthly cash flows of transfer payments and income tax installment payments during the year.

In 1996, the branch completed the drafting and co-ordination of two budget speeches as well as the preparation of a number of other speeches and presentations to communicate the fiscal outlook of New Brunswick both internally and externally.

The branch continues to monitor the current balanced budget legislation requiring an overall budgetary balance over the four-year period 1996-1997 to 1999-2000. Briefing material was prepared for use in review of the Province's fiscal position, and analyses of the federal and provincial budgets were prepared and circulated. The branch compiled data for use by the Premier's Office and other departments as requested.

Tax Policy Branch

The branch conducts an ongoing assessment of the tax climate and tax structure found in each province and in the United States. The branch also continually monitors the competitiveness of the Province's tax system. The branch is involved in negotiations with the federal government and other provinces in the area of tax policy.

During 1996-1997 the branch took the lead role in the Province's negotiation of the harmonization of the provincial sales tax with the federal GST resulting in the signing of the Comprehensive Integrated Tax Co-ordination Agreement and the introduction of the Harmonized Sales Tax Act (HST). The branch also provided the analysis for the new tax reform measure, and developed the consequential amendments for acts affected by the tax reform measure including the Admission and Amusement Tax Act, the All-Terrain Vehicle Act, the Gasoline and Motive Fuel Tax Act, the Motor Vehicle Act, the Real Property Transfer Tax Act, the Revenue Administration Act, and the Roosevelt Campobello International Park Act.

In addition, the branch also provided recommendations regarding various rebates. Under the HST, these rebate programs included: municipalities, charitable organizations and qualifying non-profit organizations, foreign tourists, books, research and development for universities, and the New Home Construction and Home Renovations HST Credit. Other programs instituted include the Film Tax Credit, the Computer Rebate Program and property tax exemption for transportation infrastructure.

The branch is responsible for ensuring that legislation and regulations are prepared in relation to tax measures contained in the annual budget speech. In 1996-1997, in addition to the Harmonized Sales Tax Act, the branch provided research, background and recommendations on a number of other budget measures: the New Brunswick Child Tax Benefit, and the New Brunswick Working Income Supplement provided funding for low-income families with dependent children. These programs are part of the government's efforts to address child poverty. Amendments to the Income Tax Act provided for reductions in personal income tax. The New Brunswick personal income tax rate will be reduced by 10.2% to 57.5% of basic federal tax by Jan. 1, 1999. Another amendment to the Income Tax Act was the introduction of the Large Corporations Capital Tax –– a new corporate tax measure. The Labour Sponsored Venture Capital Tax Credit was revised to parallel changes to the federal tax and the Value-In-Use Property Tax Program, which provides relief of the property tax burden for certain charitable and non-profit organizations, was redesigned to provide additional support for this sector.

In 1996-1997, the Tax Policy Branch continued its participation on a number of interdepartmental and inter-governmental committees.

New Brunswick Statistics Agency

The statistical role of the agency is conducted under the Statistics Act. During the year the agency responded to over 2,355 inquiries, with about one-third coming from outside the Government of New Brunswick. Population and economic statistics were presented in bulletins distributed to provincial government users on a regular basis. Population projections were prepared and socio-economic profiles were assembled for provincial regions. Agency staff provided input to the legislature's select committee on demography and served on its working committee of officials. The agency actively participated in helping to assess the socio-economic impact of the Harmonized Sales Tax on New Brunswick. The agency has a close working relationship with Statistics Canada and represents the Province in federal-provincial discussions of statistical issues through the Federal Provincial Consultative Council on Statistical Policy and its committees.

During the year, the agency continued to follow economic trends in the province and its major export markets and to report on the economic recovery from the 1990-1991 recession. The review of the Province's economic performance in 1996 and the outlook for 1997 were presented in The New Brunswick Economy, 1997 which was tabled Feb. 18, 1997. Economic forecasts were developed throughout the budget planning cycle. The agency reviewed and reported on provincial economic outlooks prepared by other forecasters.

The agency conducted economic impact studies, upon request from provincial departments, using available models such as the provincial forecasting model of the Conference Board of Canada and the input/output tables and the Social Policy Simulation Database/Model from Statistics Canada.

Budget and Financial Management Division

The division is divided into two branches, namely Budget Services and Financial Management Services. Although each branch has been delegated specific responsibilities, the nature of the budget process and financial management initiatives assigned to the division require and encourage an ongoing interchange of staff as well as the use of secondments from other divisions of the department and government.

The divisional goals established for 1996-1997 were met during this period, including the preparation of both the 1997-1998 ordinary and capital account budgets within the parameters established by government. One new Special Operating Agency plan was presented to the Board of Management for approval, and several new net-budgeting accounts were established. In addition, the division assisted various departments with evaluating the financial impact of major program and service delivery changes and advised on the establishment of performance measurement indicators.

Fiscal 1996-1997 was the first year of the four-year period ending in 1999-2000 which requires a balance on all budgetary accounts. To achieve this target, a number of measures were incorporated to reduce expenditures, including the streamlining of government services, while ensuring that basic programs and services remain and are operated as efficiently as possible.

As a result of government's strong commitment to the new four-year fiscal plan, the division began reviewing departmental budget estimates in early September 1996 for presentation to Board of Management. This earlier start to the budget process allowed the government sufficient time to analyze all policy and program measures, and allowed the Board of Management more time to review new performance measurement indicators, which were presented as a supplement to the 1997-1998 Main Estimates.

Public-private partnering is within the scope of Budget and Financial Management Division. This division plays a co-ordinating role in ensuring that financial evaluations are completed for partnering opportunities; participates in the overall evaluation processes, and assists in the finalization of partnership contracts.

Budget Services Branch

• The branch developed and implemented the 1997-1998 budget process for both ordinary and capital accounts, consistent with the government's fiscal plan and the requirements of the Balanced Budget Act.
• The 1997-1998 Main Estimates and Capital Estimates were prepared.
• Based on government's multi-year spending plan, the branch communicated to departments 1998-1999, 1999-2000 and 2000-2001 preliminary budget targets by the middle of February 1997. This process facilitates realistic planning and allows for more orderly implementation of budget decisions.
• The branch monitored implementation of the 1996-1997 ordinary and capital account budgets on behalf of the chair of the Board of Management. For the most part, departments underspent their 1996-1997 expenditure budgets.
• A major objective of the branch is to facilitate sound communications between the Board of Management and line departments by assembling all agenda material and minutes of meetings. The branch places a high priority on advising and assisting departments with submissions to the Board of Management and ensuring that ministers have sufficient information when reviewing an issue.

In terms of privatization initiatives, departments have assumed major responsibility for carrying out privatization reviews internally. At the end of 1995-1996, only two initiatives remained incomplete under the formal privatization review process co-ordinated by this division. The first initiative, seedling production, was cancelled in light of efficiencies and downsizing implemented in nurseries, that severely limited the financial benefits of privatization. Documents for the second initiative, the Bas-Caraquet Marine Haulout, were expected to be signed early in 1997.

The development of the Special Operating Agency (SOA) concept continued as part of the work plan within the division during 1996-1997. SOAs are self-contained service units which are carved out of existing departmental structures and are provided with management flexibility to respond quickly to the needs of the user. In exchange for these flexibilities, agencies have specific accountabilities (performance standards and goals) established through approved business plans. One initial business plan, for the establishment of the New Brunswick Safety Code Services, was reviewed and approved during this period. As well, business plans related to established SOAs were also reviewed.

In addition, the branch began work on specific policy issues related to the harmonization of the PST with the GST; development of the Millennium Project (Year 2000); analysis and evaluation for implementation of the Service New Brunswick call centre and the roll-out of the remaining Service New Brunswick centres; exploration of leasing opportunities for computers in the Department of Education, and participation in an accounts receivable review which was carried out by the Office of the Comptroller.

In 1996-1997, financial evaluations also continued on the Provincial Buildings Initiative involving the energy retrofitting of government-owned facilities.

Performance Measurement

Under the first stages of implementation, performance measurement indicators were identified by most departments. In an ongoing effort to improve the system, departments were requested to further clarify their mandates through the identification of their core business areas. Performance indicators were then identified for the majority of the core businesses, and will be completely identified in fiscal 1998-1999.

Performance Measurement - Supplement to the Main Estimates provides all performance measurement indicators and targets identified by various departments, and was tabled by the Minister of Finance in the legislature in December 1996. Through the identification of challenging performance targets, the stage has been set for not only reporting on performance but improving it. Departments will account for the achievement of their targets in their annual reports. (See page 5 of this report.)

Treasury and Debt Management Division

Financial Policy and Debt Management

During 1996-1997, the branch negotiated the sale of two $200-million domestic issues, and one $200-million Euro Canadian dollar issue. The total of these borrowings was $600 million, of which $530 million was for provincial purposes and the remaining $70 million for NB Power.

The branch is responsible for the service of public debt expenditure which is estimated at $596 million for 1996-1997. The major portion of the expenditure is the interest on 201 individual debenture issues. The branch must ensure that the Province complies with the covenants of the issues. During the year, the branch entered into 23 foreign exchange forward contracts totalling approximately $114.8 million to hedge interest and principal payments on foreign-denominated debt.

Two debenture issues totalling $57.6 million were negotiated by the New Brunswick Municipal Finance Corporation. Administration of the corporation involves canvassing the municipalities for borrowing requirements, determining and disbursing each municipality's share of the proceeds of debenture issues, acting as registrar for several debenture issues, obtaining cabinet approval of the Province's guarantee for debenture issues, arranging and attending board meetings and preparing the corporation's annual report.

During the year, the Financial Policy and Debt Management Branch provided advice to the government on matters of a financial nature. The branch also arranged and participated in presentations to rating agencies and prepared the Province's Annual Report on Form 18-K and filed it with the US Securities and Exchange Commission.

Treasury Management

During 1996-1997, receipts totalled approximately $4.5 billion and payments were $4.5 billion. Short-term borrowings averaged $806 million and short-term investments averaged $170 million. In addition, short-term investments of various sinking and trust funds averaged $418 million.

Trust Fund Administration

New Brunswick Investment Management Corporation provides the minister and the board with certain investment advisory and administrative services as specified in various contractual agreements.

The Trust Fund Administration Branch is responsible for advising on trusteeship issues and in turn may rely on the corporation to provide certain services. The branch administers the trustee functions required by legislation, including financial controls, preparation and analysis of financial statements, custody of securities, authorization of payments out of the funds, analysis of pension liabilities and the receipt of sinking fund installments.

Investment policies are developed for 13 funds having a total market value of $2.8 billion as of March 31, 1997. The four Board of Management trusteed funds are managed by external investment counsellors who follow investment policies developed internally. The external counsellors were supervised by the branch.

The Hospital CUPE plan earned 14.2% and the three School District plans each earned 11.2% for the fiscal year which ended Dec. 31, 1996. For the four fiscal years ended Dec. 31, 1996, these funds earned 11.7% and 11.8% respectively.

Revenue Division

Organizational Changes

The harmonized sales tax has had a major impact on the division as a major portion of the division's responsibilities relates to the collection of provincial sales tax. The change will result in the transfer of staff to the federal government and a reallocation of staff within both the division and the department.

Policy and Communication Branch

The mandate of the branch encompasses the following responsibilities:

• Development of policies and procedures in support of the division's operations;
• Provision of expert advice and consultation as it relates to the division's operations;
• Development and stewardship of the division's legislative package;
• Liaison with stakeholders and special interest groups in relation to the division's mandate and operations, and
• Development of tax and regulatory guides and bulletins, tax interpretation, public education, internal training and participation in the preparation of training, development and operational manuals.

The branch also plays a key role in the division's staff support for the Lotteries Commission. The commission is responsible for the development and delivery of provincial gaming policy and regulation, harness racing, video lottery and charitable gaming.

The branch played a supportive role this year in a major review of the video lottery program and will implement its recommendations. The branch was also involved extensively in regional discussions in regards to the harness racing industry which resulted, in part, in the establishment of a Maritime provinces teletheatre operation.

The branch participated in the drafting and preparation of legislative amendments to provide for:

• the implementation of reciprocal agreements with United States jurisdictions for exchange of information relative to the administration and enforcement of taxes and/or fees;
• the simplification of requirements for fuel licensing and reporting;
• the introduction of changes to the exemption status of manufacturers and aquaculturists;
• the introduction of legislative amendments to enable future deregulation under the Gasoline and Motive Fuel Tax Act, the Tobacco Tax Act, the Pari-Mutuel Tax Act and the Revenue Administration Act.

• assisted the Taxation and Fiscal Policy Division with the introduction of a number of legislative changes regarding the Farm Land Identification Program;
• assisted the Taxation and Fiscal Policy Division in developing proposals to reform the property tax treatment of charitable and non-profit organizations, and
• co-ordinated the introduction of Liquor Control Act legislation regarding brew pubs, liquor advertising and the elimination of waiter's licences.

During the fiscal year 1996-1997, 181 tax objections filed under the Revenue Administration Act were reviewed. This figure represents approximately 10% of audit assessments conducted during the period under review. Of these, 17 decisions were appealed and 16 decisions, in turn, were affirmed by the Minister.

The Policy and Communication Branch responded to a multitude of transition issues associated with the Harmonized Sales Tax. In addition to providing assistance to the departmental team with the development and presentation of human resource plans concerning the transfer of staff to the federal government, the branch also contributed towards the following:

• formulation of rules and guidelines for the transition phase;
• implementation of legislative procedures to suspend the Social Services and Education Tax Act, and
• implementation of necessary amendments to the Real Property Tax Act, the Gasoline and Motive Fuel Tax Act, the Tobacco Tax Act, the Revenue Administration Act and the Admissions and Amusement Tax Act.

Accounting, Audit and Central Services Branch

The realigned responsibilities of the branch include the following:

• processing of property and consumption tax payments and reports;
• provision of accounting functions relating to revenue and receivables;
• delivery of a comprehensive tax auditing program;
• processing of all property and consumption tax refunds;
• administration of the low-income property tax allowance program;
• issuance of annual property assessment and tax notices and supplementary notices;
• administration of the International Fuel Tax Agreement;
• issuance of clearances under the Bulk Sales Act, contractor's clearances and tax status reports;
• administration of the federal grant-in-lieu of property tax payments;
• budget monitoring and forecasting for the Revenue Division, and
• records management.

The Tax Audit Section enjoyed its most productive year on record. In excess of 2,000 audits were completed which resulted in approximately $26 million in additional tax revenue being identified. Tax auditors produced a recovery of $800 per hour expended. Information sharing and joint cooperative efforts with Revenue Canada continued to expand and contributed significantly to the overall monitoring of tax compliance and combatting the underground economy.

The Refund Section of the branch processed approximately 23,500 refund claims and refunded in excess of $26 million in tax revenue. Included in these totals were credits granted under the Province's successful "Get Connected" program for home computer purchases. This program ran from Sept. 3, 1996, to Dec. 31, 1996, and 10,369 rebate claims were received resulting in total credits of $2.4 million.

Under the low-income property tax allowance program, 33,022 allowances were granted for a reduction of $6.4 million in property tax revenue.

Account Management Branch

• to provide licensing/registration services for division tax responsibilities, for liquor regulation and for charitable gambling;
• to enforce existing legislation relating to charitable lotteries, liquor, tobacco and fuel taxation and for video lottery, and
• to collect outstanding receivables.

The Account Management Branch is now made up of three sections:

• Licensing and Registration;
• Field Operations (Collections and Compliance), and
• Tax Receivables (including both consumption and property taxes).

The branch has decentralized most of its collection responsibilities to the regional offices. This has increased the level of accountability for collection officers by giving them the ability to either negotiate long-term payment arrangements or to recommend the acceptance or refusal of settlement offers made by debtors. These actions are assisted by head office through a legal action co-ordinator.

An accounts receivable call centre was successfully piloted and integrated into the Account Management Branch. Five representatives contact taxpayers with outstanding property taxes and sales tax delinquencies to remind them of their tax obligations.

A new activity log for compliance inspectors and collection officers was introduced. The system provides for the generation of management reports to ensure that regulations are being enforced in a fair and consistent manner across the province, including the recommendations to enhance the enforcement of regulations which resulted from the video lottery program review.

Linkages with Revenue Canada for the purposes of underground economy initiatives were continued in this fiscal year.

System Development and Support Branch

The branch is committed to working with management and staff through team building, workshops and presentations in order to institute change in the organization effectively and efficiently. It works toward achieving the following goals:

• develop innovative methods of service delivery;
• construct systems that minimize tax loss;
• simplify customer interaction;
• reduce work duplication;
• implement a user-friendly and meaningful information bank;
• activate an effective method of file storage and delivery;
• institute an effective decision-making support system;
• respond to new demands;
• oversee the existing mainframe systems until replaced, and
• work with the directors in determining ongoing technology needs.

• The branch played an active role in the continued enhancement of the Consolidated Registration System.
• An Activity Based Costing (ABC) Model continues to be updated to reflect current costs, activities and staff deployment. This model serves a useful purpose as a management tool as well as understanding the cost of performing functions or offering services.
• The need for better decision support tools was addressed through the design and implementation of various decision support applications (objections and appeals, benchmark data, reports, etc.).
• Assistance was provided in the establishment of a system providing links with New York State regarding the International Fuel Tax Agreement. The branch continues to support the system through addressing its maintenance needs.
• The preliminary analysis/system architecture phase (PA/SA) of the new revenue management system was completed in the summer of 1996. The branch has identified a need for further review in this area.

The mandate for the division is found in the following legislation:

• Financial Administration Act;
• Public Service Labour Relations Act;
• Civil Service Act;
• Expenditure Management Act (1992);
• Pay Equity Act;
• Public Service Superannuation Act;
• Teachers' Pension Act, and
• Members' Superannuation Act.

This branch promotes the development of employee relations that are responsive to the needs of departments, schools, hospitals and their employees while meeting overall government objectives. Responsibility areas of the branch include:

• Negotiation of collective agreements covering all unionized employees in Parts I, II and III of the public service. Training courses in labour relations are provided to line managers and human resource specialists.
• Development and administration of management pay plans and personnel policies for non-bargaining employees of Part II (schools) and Part III (hospital corporations).
• A compensation information and costing service is provided to support the collective bargaining and management compensation determination processes for Parts I, II and III of the public service.
• Development and administration of research systems to support collective bargaining and grievance/ adjudication processes.
• Development and ongoing administration of the Harassment in the Workplace Policy covering all employees in Parts I, II and III of the public service.

Part I, Institutional Services and Care, signed on June 6, 1996;
Part II, Teachers, signed on June 19, 1996;
Part I, Education (Non-Instructional) on June 20, 1996;
Part I, Agriculture*, signed on Dec. 18, 1996 ;
Part I, Veterinarians*, signed on Dec. 18, 1996;
Part I, Engineering and Architecture*, signed on Dec.18, 1996, and
Part I, General Labour and Trades, signed on March 7, 1997.

During the fiscal year, a revised pay structure linking pay increments to individual performance was introduced into four collective agreements. The revised pay structure is similar to the pay structure for non-bargaining employees in Part I of the public service and is also supported by the Hay point rating job evaluation system.

Restructuring of the school system involved the transfer of a number of employees based in school district offices from Part II (schools) to Part I (civil service).

Negotiations were in progress for the following bargaining groups:

Part I, Rehabilitation and Therapy;
Part I, Laboratory and Medical*;
Part I, Engineering and Field *;
Part I, Technical Inspection*;
Part I, General Labour and Trades (Supervisory)*;
Part I, Resource Services;
Part I, Industrial Training and Certification Officers;
Part I, Clerical and Regulatory**;
Part I, Secretarial, Stenographic and Typing**;
Part I, Office, Data Processing and Duplicating Equipment Operation**;
Part I, Court Stenographers, and
Part III, Para Medical Group.

See Table 2 / Adjudication Totals for Parts I, II and III

Program Services Branch

The branch also co-ordinates and implements strategic human resource development initiatives designed to improve employee effectiveness at all organizational levels. There are five additional corporate programs administered by the branch: Equal Employment Opportunity, Employment Equity, Employee Assistance, Official Languages and Workforce Adjustment.

In addition, the branch provides research and development services regarding a variety of public service human resource policy, planning and administration issues.

Compensation/Classification

In connection with converted classification schemes, the branch is also leading the implementation of performance based pay plans. In 1996-1997 two collective agreements were signed containing the revised classification/compensation systems. The concept was also introduced in negotiation with three additional bargaining units.

• During 1996-1997, 505 classification and reclassification transactions were processed. Fifteen classification appeals were heard covering 18 employees.
• The following achievements were identified in addition to the ongoing responsibility of providing advice and other services to client departments:

  Designed a process for the development of benchmark positions for all pay bands.

  Finalized classification/compensation issues related to the transfer of employees from the federal government and from Part II of the public service to Part I.

Staffing

See Table 3 / Competitions by Department

Workforce Adjustment Program

Employee Learning and Development

This year, 1,366 employees participated in 48 corporately sponsored learning events.

Executive Development

Equal Employment Opportunity Program

• Term placements - Fifty-seven candidates received funding against their one-year term positions. Departments were encouraged to make every effort to offer successful candidates regular full-time employment.
• Student Summer Jobs - One hundred and two target group students benefited from career-related summer employment by being employed with the provincial government, municipalities or non-profit organizations.
• Job Creation - Sixty-three individuals received on-the-job training opportunities for periods ranging up to 20 weeks. Useful job skills were developed and some of the trainees were offered extended terms of employment.

Employment Equity

Employee Assistance Program (EAP)

Official Languages

Strategic Services Branch

A series of change initiatives is under way in the following areas of human resource management:

Managing Change

• Developing HR planning capabilities to ensure an appropriately skilled public service workforce for the future;
• Incorporating change management skills and methods in order to meet the challenge for continuous improvement in service delivery, and
• Renewed management development and the acquisition of new skills for HR professionals.

Policy and Legislation

• Deregulation: rationalizing HR rules and cutting red tape, and
• Updating HR policies and legislation to respond to the changing nature of work and employment in the public service.

Administration and Communications Systems

• Streamlining HR processes and systems;
• Using technology to improve access to information, and
• Organizing HR services for optimum efficiency and measuring the value of HR services.

Supporting Employees (A Better Workplace)

• Renewed emphasis on attendance management, including an improved Employee Assistance Program and encouragement of employee wellness strategies;
• Promotion of work/time flexibility and voluntary reduction in work hours for balancing work and personal lives, and
• Implementation of recognition and reward programs.

Human Resource Information Branch

• manage the corporate human resource information system so that the operational and decision support subsystems are fully exploited by the organization;
• evolve the human resource information system by expanding its functionality;
• extend client coverage of the human resource information system;
• ensure the long-term self-sufficiency of the human resource information system, and
• ensure that all corporate payroll functions are performed in a fashion consistent with government policy and federal and provincial legislation.

A number of initiatives were taken which ensured that the system would increasingly be used to support business requirements. These included negotiating a corporate site licence for the decision support software so that more users will have access at a lower cost, modifying the system so that it will administer payments to individuals involved in contract training, and conducting a client satisfaction survey to collect feedback systematically that will allow the branch to further tailor the system to meet user requirements.

During 1996-1997, three new releases of the system were made. These included many new features designed to support the HR and payroll process. Some examples of items in the releases were improvements to the leave tracking system, changes to the security system, the introduction of a "record of employment" capability, support for seniority, and major enhancements to existing employee timesheet functionality.

In addition to these enhancements to the operational system, the decision support system was modified to include the data associated with the operational system changes as well as more data on casual employees and employee leave records.

The technical work was done to enable Part III data to be edited, stored, and used to create a variety of management reports. Also, exploratory technical work was completed that will allow for the implementation of new "graphic user interface" screens in the 1997-1998 fiscal year.

During 1996-1997, the number of registered users of the operational system increased from 368 to 414 and the number of users of the decision support system increased from 110 to 121. Client coverage was also extended as a result of the branch actively supporting the work done in several major departments to delegate HR and payroll activities to line managers. This has increased use of the system and, by year-end, almost 50% of operational system users were located outside of the capital region.

In order to ensure the long-term viability of the system, a number of tasks were completed during the fiscal year including the implementation of the system on a new mainframe computer and the initial investigation of Intranet access options. In addition, as in the past, several system training events were presented to operational and decision support HRIS users. During the past year, a number of internal re-engineering projects were started including the design of a new change request management system, a system monitoring project and a new timesheet for branch staff.

As in the previous year, the corporate payroll group ensured that the payroll process for Part I employees and pensioners conformed with all federal and provincial legislation and policy. In achieving this outcome, the branch maintained control tables, administered the taxable benefits program, monitored payroll discrepancy reports and resolved issues, ensured that all payroll accounting functions were done consistent with established accounting practice, completed all tax and fiscal year-end functions, remitted source deductions to the federal government, unions and benefit providers, and prepared a variety of reports including the employee portions of the public accounts.

Public Service Employee Benefits Branch

The branch's mission was modified to the following: "To ensure that employee benefit programs meet the needs of employees and employers within the public sector."

PSEBB fulfills its mission by carrying out the management and administration of legislated and contractual pension plans and selected insured benefit programs for employees under Parts I, II, III, and IV of the Public Service, as well as some quasi-public organizations. This management and administration includes special or short-term programs such as early retirement programs for Parts I, II and III of the public service. Table 4 provides statistical information for the various pension plans for which the branch is responsible and Table 5 provides similar details for the various insured benefit programs.

See Table 4 / Pension Plans and
Table 5 / Insured Benefits Summary

PSEBB staff work in an advisory capacity with pension committees and the Standing Committee on Insured Benefits (SCIB) and co-ordinate the activities of these committees. The branch also works with other sections of the department toward successful collective bargaining resolution.

During the fiscal year, a major restructuring of the Long-Term Disability Plan's financial arrangement resulted in the plan being changed to a self-insured basis, under an Administrative Services Only (ASO) relationship with numerous service providers. In lieu of significant proposed premium rate increases, this was the only acceptable alternative, thus avoiding termination of the Long-Term Disability Program. Efforts continue to be directed toward development of an employee attendance management policy with consistent procedural guidelines and development of a formal policy applicable to all parts of the public service.

The development and testing teams for Release 4/5 of the Pensions and Insured Benefits Administration (PIBA) system attained their objective of implementing the first phase of this release by April 1997. There are three other phases which will be released over May and June 1997. After June 1997, the development of PIBA is complete and full implementation will reach into 1998.

The conversion to PIBA of individual pensionable service histories for members of the Provincial Court Act, Members' Superannuation, Teachers' and the Public Service Superannuation (Part 1) pension plans is complete. Conversion of data for management members of the school district pension plan was completed before the plan wound down in September 1996. Conversion of the data for employees of hospitals in the Province is scheduled for completion in 1998. Employers are assisted by branch personnel in attaining this critical functionality.

The imaging system which was implemented in January 1996 was refined by the support team responding to user suggestions and needs with improvements in document management and retrieval. The system continues to evolve and integration with other systems is being explored.

Both PIBA development and imaging system changes continue to be guided by a steering committee, comprised of various public sector union representatives and representatives of certain government departments.

Most pension plans experienced amendments throughout the year. Due to negotiations, changes such as those required by the Federal Income Tax Act and provisions to meet the spirit of the Pension Benefits Act were arrived at through consultations. These changes will flow over to the next fiscal year.

Table 1

	Budget ($000)	4th Quarter ($000)	Variance ($000) over (under)
Personal Services	18,114.5	13,634.7	(4,479.8)
Other Services	6,131.9	5,500.9	(631.0)
Materials and Supplies	463.6	308.8	(154.8)
Property and Equipment	130.5	657.1	526.6
Contributions and Grants	5.8	2.0	(3.8)
Debt and Other Charges	5.2	0.1	(5.1)
Contracts and Projects	(2,634.9)	(2,489.1)	145.8
TOTAL	*22,216.6	17,614.5	(4,602.1)

*This figure includes a freeze of funds in the amount of 4,140.0, that relates to the transfer of Service New Brunswick to NBGIC. The net surplus is (462.1). The department successfully achieved this level of fiscal restraint by reviewing operations and improving efficiency.

Table 2

*Includes one reference to Judicial Review

** Includes three references to Judicial Review

Table 3

Competitions by Department (1)

April 1, 1996 to March 31, 1997

(1) Responsibility for the activity has been delegated to each department

(2) Does not include seasonal and term appointment competitions

Table 4

Table 5 (continued)