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Supplementary Document to the Planned Results for 2004-2005
This information would normally be made available at the beginning of a fiscal year. However, for 2004/05 it was delayed due to the prorogation of Parliament. Therefore, some of the matters referred to prospectively herein have already been accomplished or overtaken by other events.
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Target
(2004-06) |
Activities anticipated
within the coming year (04-05) |
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Key Issue 1: Building the Future |
Objective 1a: Maintaining a Healthy Fiscal Climate |
1a.1: Continue to pursue the Government’s
Debt Repayment Plan to ensure the federal debt-to-GDP ratio remains on a
permanent downward track. |
The target of keeping the federal debt-to-GDP
ratio on a steady downward track continues to be a priority for the
Government. According to the fiscal projections in Budget 2004, the
federal debt-to-GDP ratio (accumulated deficit) will fall to 42 per cent
in 2003-04 from 44.2 per cent in 2002-03, and to about 38 per cent for
2005-06. The Government has also set an objective of reducing the
federal-debt-to-GDP ratio to 25 per cent within the next ten years.
This will be achieved by maintaining a prudent approach to financial
management, which includes two-year rolling targets for balanced budgets,
a Contingency Reserve and economic prudence. The Contingency Reserve, if
not needed, is used to reduce the federal debt.
As part of instituting a new management approach in government, Budget 2004 implements $1 billion in annual reallocation from existing spending in 2004-05 and beyond to meet Budget 2003 commitments. As well, the Cabinet Committee on Expenditure Review is examining all programs to identify at least $3 billion annually in savings within four years for reinvestment in the priorities of Canadians while improving government management. The Government is also implementing significant new measures to strengthen financial management and accountability. | | Objective 1b: Building a Stronger Society | 1b.1: Ensure predictable and growing funding for health and social programs. | In support of the 2003 First Ministers’ Accord on Health Care Renewal, the Government of Canada committed to provide a total of $36.8 billion over five years in support of health through transfers and direct spending initiatives. The Department will ensure that planned increases in transfer payments resulting from the Accord are implemented, and in particular that the additional $2 billion for health is provided to provinces wishing to receive the funding in the 2004-05 fiscal year. The Department of Finance has implemented the necessary transfer
increases related to the 2003 Accord and will implement the Budget 2004
commitment to provide additional funding to the Canada Social Transfer for
early learning and childcare and a new Public Health and Immunization
Trust upon passage of the Budget Implementation Act, 2004.
For 2004-05, the Department will ensure that provinces, territories and stakeholders are aware of the growing and predictable nature of the federal funding commitments, and will continue to ensure the effective administration of federal transfers and targeted funding.
The Prime Minister has committed to a meeting of First Ministers to discuss health sustainability within the context of the national agenda in the Summer of 2004, with meetings of Finance Ministers in advance of the First Ministers’ Meeting. The Department will prepare for a Finance Ministers’ meeting on health sustainability and subsequently assist in the preparation for the First Ministers’ Meeting. | 1b.2: Improve the transparency and accountability of federal transfer support to the provinces and territories. | As part of the 2003 First Ministers’ Accord on Health Care Renewal, the Government of Canada committed to restructure the Canada Health and Social Transfer (CHST) to improve the accountability and transparency of federal transfer support for health. Retroactive to April 1, 2004, the Department of Finance will implement
the restructuring of the CHST into:
These new transfers will make the federal contribution to health care and social programs more transparent to Parliament and to Canadians. The Department will improve its communications efforts to ensure Canadians and stakeholders benefit fully from the new transfer structure. | 1b.3: Ensure fiscal disparities are addressed through the Equalization and Territorial Formula Financing (TFF) programs. | The current Equalization program expired on March 31, 2004. Budget 2004 proposes a new Equalization framework to be implemented retroactive to April 1, 2004, replacing the continuation of payments legislation that is currently in place. The new proposal will improve the Equalization program through a number of changes to maintain the integrity of the program and to improve the way it operates. For example, a number of tax bases will be updated, reflecting changes to various provincial tax systems and the availability of new data. These changes will improve the program’s measure of fiscal capacity. The system under which provinces receive Equalization payments will also be modified. This modification will provide provinces with more stable and predictable year-over-year payments. The current Territorial Formula Financing (TFF) Agreements expired on
March 31, 2004. New TFF Agreements are to be implemented retroactive to
April 1, 2004. The new agreements will ensure that territorial governments
have the capacity to provide a level of services comparable to those of
provinces, while addressing the unique challenges and high costs of the
North. In addition, the new arrangements allow the territories to target
their priority areas including health and economic development. |
1b.4: Ensure the retirement income system
remains sustainable and meets seniors’ needs. |
In consultation with the provinces and
territories, the Department will provide analysis, research and advice to
support federal and provincial Finance Ministers’ triennial financial
review of the Canada Pension Plan (CPP), which the CPP legislation
requires that Ministers make "best efforts" to complete by the
end of 2005.
Budget 2004 proposes clarifying the rules governing CPP employer
contributions and refunds and changing the rules in the case of business
restructurings to allow the successor employer in a business restructuring
to take into account the amounts paid by the predecessor in determining
the amount owed for the balance of the year. This clarification will
ensure harmonization between the CPP and the Quebec Pension Plan with
respect to employer contributions and will reduce the burden of compliance
on employers undergoing a business restructuring.
Budget 2004 proposes allowing for the reinstatement of CPP disability benefits if a former recipient is required to cease working for reasons relating to his or her disability within two years of returning to work. The new proposals will provide greater support for persons with disabilities who take up the challenge of reintegrating into the workforce.
The Department will prepare an annual report on the operations of the CPP, in consultation with the Department of Social Development.
In consultation with the provinces, the Department will undertake a special examination of the CPP Investment Board, as required under section 47(1) of the CPP Investment Board Act, to verify that: assets are properly safeguarded, that its human, physical, and financial resources are managed economically and efficiently, and that its operations are carried out effectively.
The Department will implement the transfer of all CPP assets remaining with the federal government to the CPP Investment Board over a three-year period, following the formal agreement of provincial governments. | | Objective 1c: Implementing Key Federal Environmental Sustainable Development Priorities | 1c.1: In the context of planning for future budgets, work with other federal departments and stakeholders to identify ways to address environmental sustainable development priorities. | Budget 2004 makes significant new investments in support of sustainable development, including: - Investing $4B over ten years in the clean up federal and shared-liability contaminated sites.
- Providing $200 million to Sustainable Development Technology Canada, bringing its total funding level to $550 million. The Budget also broadens the mandate of SDTC to allow it to deliver innovative technology solutions in relation to the full spectrum of sustainable development issues – climate change, clean air, water and soil.
- Using part of the proceeds from the sale of the government’s Petro-Canada shares to increase support for environmental technologies by $800 million between 2006-07 and 2010-11, as new opportunities emerge and priorities are identified.
- Investing $15M over two years to develop and report on environmental indicators that will help ensure that environmental considerations are better integrated into decision-making.
Finance officials will work with other federal Departments on the
implementation of these initiatives and to identify potential future
funding priorities. |
1c.2: Work with other government departments to
evaluate federal horizontal management of water policy. |
The Department will participate in the
development of a framework providing a comprehensive inventory of the
roles and responsibilities of federal departments regarding freshwater
issues. The framework will be used to assess priorities for federal
action. |
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Key Issue 2: Integrating the Economy and the Environment |
Objective 2a: Evaluating the Potential for
and Developing Practical Uses of Economic Instruments |
2a.1: Participate in further work in
cooperation with other federal departments, other governments and
stakeholders on the design of a system of covenants with the large
industrial emitters sector to achieve reductions in their greenhouse gas
emission intensities to help further Canada’s climate change objectives
under the Kyoto Protocol. Additionally, the Department will participate in
work on potential mechanisms to facilitate a domestic and international
permit-trading system. |
The Climate Change Plan for Canada proposes
that large final emitters (LFEs) be required to reduce their GHG emissions
by 55 Mt from their 2010 "business as usual" levels through the
establishment of covenants with a regulatory or financial backstop and a
domestic emissions trading system. Through a process being led by Natural
Resources Canada, Finance has participated, and will continue to
participate, in inter-departmental consultations on the analysis and
design of the LFE system (e.g. addressing competitiveness concerns and
credit for early action) and a domestic and international permit trading
system (e.g. tax and accounting treatment of permits). Legislation is
expected to be tabled in the Fall of 2004. |
2a.2: Continue to participate in the Steering
Committee and as observers at working group levels with the National Round
Table on the Environment and the Economy (NRTEE) on its Ecological Fiscal
Reform program over 2003–2005. |
The Department participates as an ex-officio
member in the NRTEE’s Expert Advisory Group, the steering committee for
their Ecological Fiscal Reform (EFR) program, and sits in as an observer
on various EFR working groups, including the most recent research program
related to EFR and energy. |
2a.3: Continue to undertake analysis and
research concerning the economic and fiscal implications of population
aging. |
Research and analysis on the economic and
fiscal implications of population aging is on-going. Several research
projects are scheduled for completion in 2004-05. Research output will be
shared with other government stakeholders working on population aging and
is likely to be presented in academic forums. |
2a.4: Continue to keep abreast of the emerging
literature related to population aging and its economic and fiscal
impacts; develop and employ analytical tools (such as computable general
equilibrium models, microsimulation models and econometric methods) to
examine impacts associated with population aging and provide analysis of
current and proposed policies. |
The Department will draft a research paper that
provides a summary and analysis of recent studies on population aging in
Canada. It will also develop analytical tools (such as computable general
equilibrium (CGE) and simulation models) for the purposes of examining
impacts associated with population aging. These and other tools facilitate
analysis of current and proposed policies. Research output will be shared
with other government stakeholders working on population aging and is
likely to be presented in academic forums. |
2a.5: Continue to evaluate research concerning
environment-related tax measures. Assess the potential of proposals
received from stakeholders for using the tax system to assist the
Government in meeting its environmental objectives, with specific emphasis
on the relative effectiveness of tax measures compared to other
instruments that may be available within the context of the Government’s
other fiscal and policy objectives. |
The Department will continue to evaluate
research and proposals concerning environment-related tax measures. As one
example of the ongoing work, the Department will continue to review
stakeholder submissions regarding potential modifications to Class 43.1,
which prescribes certain renewable energy and energy efficiency equipment
that qualifies for accelerated tax depreciation. In addition, to provide
overall context, the Department will develop and issue a framework setting
out the general parameters and criteria that guide the Department in the
assessment of proposals to use the tax system to achieve sustainable
development objectives. |
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Objective 2b: Increasing the Knowledge Base
Through Integrated Decision Making |
2b.1: Continue to maintain awareness of the
departmental process for implementing the 1999 Cabinet Directive on the
Environmental Assessment of Policy, Plan and Program Proposals (Strategic
Environmental Assessment). |
As part of the annual Strategic Environmental
Assessment (SEA) awareness-raising activities, the Department will:
- request that the Canadian Environmental Assessment Agency (CEAA)
provide a briefing on SEA to the Department’s Sustainable
Development Working Group (SDWG) and other interested Departmental
officials;
- give a presentation to officials on the internal SEA process;
- present a report to the Departmental Coordinating Committee on the
state of SEA implementation within the Department;
- provide an overview of Departmental SEA procedures to Canadian
Environmental Assessment Agency (CEAA) staff for their consideration
and comments; and,
- develop a method to include material on SEA in the orientation
material for new employees.
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2b.2: Conduct research and analysis on
environmental and natural resource issues. |
Within the Economic Development Branch,
research will be targeted at nascent environmental and natural resource
policy issues and made available within the Department. Past research has
contributed to a better understanding of key environmental policy issues
at both the senior and officer levels within the Department.
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Key Issue 3: Integrating Sustainable Development in the Global Economy |
Objective 3a: Participating in Negotiating
International Environmental Agreements |
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3a.1: Support initiatives to enhance the
understanding of linkages between Multilateral Environmental Agreements
and trade rules. |
The Committee on Trade and Environment (CTE) of
the World Trade Organization (WTO) is scheduled to meet on three occasions
during 2004. Finance officials will participate in the development of the
Canadian position for these meetings. |
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3a.2: Collaborate with other government
departments on Canada’s ongoing approach to international negotiations
and activities on climate change, focusing primarily on economic and
fiscal issues under negotiation. |
The first Conference of the Parties to the
Framework Convention on Climate Change was held in 1995; the Kyoto
Protocol was signed by Canada in 1997 and ratified in 2002. The Department
of Finance will continue to assist with the analysis and development of
considerations for Canada’s approach to international climate change
negotiations – for example, in relation to the 10th
Conference of the Parties, which will be held in Argentina in late 2004,
and discussions on the second commitment period, which are due to begin in
2005. The Department’s focus will be on the analysis of economic and
fiscal implications of issues under consideration. |
3b: Integrating the
Environment Into Future Negotiations on Trade and Investment Agreements |
3b.1: In conjunction with the
Department of Foreign Affairs and International Trade (DFAIT), examine
trade and environment linkages in the context of the World Trade
Organization and trade negotiations. |
The Department will continue to
participate in the Environmental Assessment of Trade Negotiations Steering
Committee chaired by the Department of Foreign Affairs. It is anticipated
that an Initial Environmental Assessment Report of the Proposed
Canada-Singapore Free Trade Agreement will be released during the
2004-2005 fiscal year. |
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3b.2: With DFAIT and Industry Canada, strive to promote
free trade in the environmental sector and continue to review specific
requests to remove tariffs unilaterally where they are identified as a
significant disincentive to the acquisition of environmental technology
products. |
The Department will continue to actively support the
reduction or elimination of tariff and non-tariff barriers on
environmental goods and services in the WTO Doha round. In this regard,
Finance will participate in the development of Canadian submissions to the
WTO Committee on Trade and Environment. |
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Objective 3c: Involving International
Financial Institutions |
3c.1: Work with other donor governments during
the 14th replenishment of the World Bank/International
Development Association’s (IDA14) financing for the world’s poorest
countries to ensure that sustainable development issues remain high
priorities (the replenishment negotiations are expected to begin in early
2004, with the three-year replenishment period to become effective in July
2005). |
It is anticipated that Canada will actively
participate in the IDA14 replenishment negotiations (the first of at least
four IDA14 donor replenishment meetings convened February 18-20, 2004).
In advance of the first replenishment meeting, the Department consulted
with the Canadian International Development Agency (CIDA), the Department
of Foreign Affairs (DFA) and the Department of International Trade (DIT)
to establish a negotiating position that stresses sustainable development
as an operational priority for IDA14. The Department will conduct
additional consultations with CIDA and DFA/DIT as the replenishment
negotiations proceed, and will work on a Canadian strategy for engaging
other IDA14 donors in raising the profile of sustainable development
issues. |
3c.2: Undertake consultations in 2004 with
interested Canadian non-governmental organizations to exchange views on
how best to support sustainable development within the IDA14 negotiations
and within the international financial institutions more broadly. |
The Department will seek the views of
interested non-governmental organizations (NGOs) on sustainable
development and other policy issues through consultations at the official’s
level in advance of individual IDA14 replenishment negotiation meetings.
It will also organize consultations between the Minister of Finance and
interested NGOs on broader development issues, including the promotion of
sustainable development by international financial institutions. |
3c.3: Work with the Executive Boards of the
World Bank and European Bank for Reconstruction and Development to support
operations that promote sustainable development. |
The Department will use its regular
consultations with the Executive Directors’ offices to stress the
priority of sustainable development issues at these two institutions. It
will also offer specific guidance to the Executive Directors on policy and
certain specific projects as they come forward to the Executive Boards for
review and approval. |
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Objective 3d: Increasing knowledge and understanding of
the relationship between financial services and international
environmental practices |
3d.1: Participate in upcoming events such as
the annual United Nations Environment Program (UNEP) Finance Initiative
Global Roundtable and other corporate social responsibility events. |
The Department will continue to attend
conferences and events that increase our knowledge of international
environmental practices as they relate to the financial sector. For
example, the Financial Sector Policy Branch was in attendance at the
Pensions Summit on "Strategies to Build Sustainability into Pension
Plans" in April 2004 and will attend the 2004 Corporate Social
Responsibility Conference in May 2004, both organized by the Conference
Board of Canada. |
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Objective 3e: Maintaining a dialogue with federal
financial institutions on sustainable development with a view to
continually improving the annual Public Accountability Statements |
3e.1: Maintain open dialogue with
representatives of financial institutions on Public Accountability
Statements. |
The Department will hold discussions with
financial institutions to determine areas for improvements regarding the
second round of Public Accountability Statements (PAS) to be produced
during the first half of 2004. In this regard, the Financial Sector Policy
Branch plans to meet with financial institutions this summer, as it did
during the fall 2002, when financial institutions were developing their
first round of PAS. |
Objective 3f: Informing and educating others interested
in sustainable development on the merits of the Public Accountability
Statements |
3f.1: Participate in various interdepartmental
and external events. |
The Department will respond to any requests for
information stemming from the presentation made on PAS at the United
Nations Environment Programme Finance Initiative (UNEP FI) Global
Roundtable in Tokyo in October 2003.
The Department will continue to provide input on sustainable
development initiatives pertaining to financial institutions taking place
within other government departments.
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Key Issue 4: Greening Operations |
Objective 4a: Enhancing awareness of the
environmental impacts of our operations and encouraging employee and
management adoption of best practices |
4a.1: Increase the proportion of employees
participating in the ongoing promotion of SD principles in the workplace
to 20 per cent by 2006.[1] |
The Department will develop a Green Citizenship
Network to directly engage employees in departmental greening initiatives.
It will also develop and implement awareness modules for best practices
for procurement and facilities management, and continue to promote Earth
Day and Environment Week with a variety of interactive displays and events
– with the objective of raising participation to 15% by December 31,
2004. |
4a.2: Increase the number of requests for
materials on greening initiatives, policies and achievements by 30 per
cent by 2006.[2] |
The Department will revise the "Greening
the Office" Web page, creating a virtual resource centre for
employees to access greening information – with the objective of
increasing the number of requests by 10%. |
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Objective4b: Developing tools and guides and
maintaining existing programs to support the implementation of best
practices |
4b.1: Develop a tracking system to determine
the baseline and benchmarks for the recommendation of environmentally
preferred products and services by 2006. |
The Department will provide green procurement
training and determine methods of tracking green purchases by December 31,
2004, in partnership with Public Works and Government Services Canada |
4b.2: Develop and implement a strategy to
reduce resource consumption by 2005. |
The Department will consult with stakeholders
and investigate opportunities to reduce resource consumption. |
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1 From a 12-per-cent baseline of employees who participated in a Finance-endorsed event in 2003. [Return]
2 From a baseline of 1,300 requests for information on the Greening the Office intranet site in 2002–03. [Return]
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