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Departmental Performance Report: 3
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Secure Social Programs

Canada Pension Plan

Key Plans and Strategies

Passage of CPP reform legislation through Parliament prior to January 1, 1998.

Approval of the investment regulations (by participating provinces and appropriate federal authorities) in 1998.

Establishment of the CPP Investment Board.

Assessment and development of options on Track II issues (i.e. issues not addressed in the last regular CPP review), namely, partial pensions, survivor benefits, credit splitting, CPP coverage, stacking of pensions and Employment Insurance.

The CPP regular review of contribution rates and benefits to begin in 1999.

Appointment of the first Board of Directors of the Canada Pension Plan Investment Board in 1998.

Expected Results

Adoption of investment regulations.

Investment Board in operation and investment of funds in markets.

Development of options for Track II issues in conjunction with provinces; ready for ministerial decision at the next regular review in 1999.

Performance Measures

Passage of the Canada Pension Plan Investment Board Act and regulations.

Appointment of the Board Directors.

Investment of CPP funds in capital markets.

Passage of CPP regulations on a method for the Chief Actuary to calculate ‘steady state’ contribution rates.

Accomplishments

The Canada Pension Plan Investment Board Act received Royal assent in December 1997. Regulations under the Act obtained Governor in Council approval in April, 1999.

Directors of the Board were appointed in October 1998, and were to start work in March 1999. CPP funds were transferred to the Board and invested in capital markets.

Track II issues currently under review. Three federal-provincial meetings were held in 1998.

CPP regulations on ‘steady state’ rates obtained Governor in Council approval in December 1998.

Key Plans and Strategies

Ensure sustainability of Old Age Security (OAS).

Expected Results

Details of the proposal to replace OAS by the Seniors Benefit to be reviewed.

Performance Measures

Sustainable OAS.

Accomplishments

The proposal was reviewed and a decision made to ensure the sustainability of OAS and the Guaranteed Income Supplement (GIS) through continued fiscal prudence rather than implementing the proposed Seniors Benefit.

Key Plans and Strategies

Conduct technical analysis, in particular of recommendations made by the Auditor General.

Consult provincial governments.

Update Equalization formula.

Expected Results

The renewed Equalization program will be in place by April 1, 1999.

Performance Measures

Successful completion of consultations with provinces and of technical analyses.

Passage of legislation updating Equalization payments.

Accomplishments

Legislation passed. Royal Assent was granted to an Act to amend the Federal-Provincial Fiscal Arrangements Act on March 25, 1999. This enactment provides payments for the next five fiscal years (effective April 1, 1999, to March 31, 2004). Special provisions were made for Nunavut to enable the Interim Commissioner to sign a two-year agreement with an option for the new Government of Nunavut to sign the agreement once it has assumed office.

For a complete discussion of the Key Plans and Strategies, Expected Results, Performance Measures, and Accomplishments, reference should be made to the Transfer Payments business line of the Federal-Provincial Transfers Program.

Key Plans and Strategies

Technical analysis of all aspects of territorial financing.

Consultations with Northern parties.

Formula for territorial financing to be updated.

Expected Results

New financial arrangements in place by April 1, 1999.

Performance Measures

Successful completion of consultations with the governments and people of the North.

Conclusion of new agreements with territories.

Accomplishments

New arrangements for Territorial Formula Financing established for a five-year term (running from April 1, 1999, to March 31, 2004). Special provisions were made for Nunavut to enable the Interim Commissioner to sign a two-year agreement with an option for the new Government of Nunavut to sign the agreement once it has assumed office.

For a complete discussion of the Key Plans and Strategies, Expected Results, Performance Measures, and Accomplishments, reference should be made to the Transfer Payments business line of the Federal-Provincial Transfers Program.

Objective

Responsible administration of international financial obligations and subscriptions.

Key Results

Accurate and timely payment of international subscriptions and obligations to such organizations as:

• the International Bank for Reconstruction and Development (IBRD)

• the International Development Association (IDA)

• the International Finance Corporation (IFC)

• the Multilateral Investment Guarantee Agency (MIGA)

• the Enhanced Structural Adjustment Facility (ESAF)

• the European Bank for Reconstruction and Development (EBRD)

Accurate and timely payment of grants and contributions under Paris Club multilateral agreements, usually related to debt restructuring and relief.

A Secure Financial Future

Key Plans and Strategies

The government has continued to work with other shareholder governments to promote a broad reform agenda in International Financial Institutions. Such reforms are necessary to ensure that these organizations continue to be able to respond effectively and efficiently to the challenges of globalization.

In keeping with agreements reached as part of the Program Review exercise, the department has been working closely with CIDA to reduce the share of the aid program that is directed to international financial organizations.

The government will probably seek legislative authority to participate in international financial assistance efforts, when necessary, to supplement the resources of the international financial organizations.

Expected Results

The government expects that policy changes currently under way will continue to strengthen the effectiveness of the international financial organizations. It also anticipates that the share of the aid program directed to these organizations will shortly be reduced to 18-to-20 per cent of the International Assistance Envelope.

Performance Measures

Currently being developed.

Accomplishments

To respect the decision to limit contributions to International Financial Organizations as a share of the aid program, Finance, CIDA and Foreign Affairs and International Trade have worked in close co-operation and managed to reduce Canada’s share of recent replenishments of the concessional windows of the International Financial Organizations. These initiatives have helped to lower contributions to International Financial Organizations as a share of the aid program to within 18-to-20 per cent for the past four fiscal years. For 1999-2000, it is expected that contributions to International Financial Organizations will account for about 18 per cent of the budget for international assistance.

Objective

Payment of the production costs for domestic circulating coinage.

Key Result

The payment of production and distribution costs relating to domestic circulating coinage to the Royal Canadian Mint.

A Secure Financial Future

Key Plans and Strategies

Under an arrangement with the Department of Finance Canada, the Royal Canadian Mint manufactures and supplies circulating coinage to enable the Government of Canada to meet the needs of Canadians. The Department of Finance Canada contracts the Mint to produce and distribute the coins that are part of Canada’s currency system.

The current contract expires in 1999-2000. A new contract is being negotiated with the assistance of private-sector consultants with a view to including commercial terms.

To further reduce domestic coinage costs, the Mint will use nickel-plated steel for the 5, 10- and 25-cent pieces. The Mint is adding nickel-plating capacity to its existing production facilities in Winnipeg. The $31- million investment project is under budget and on schedule for the production of nickel-plated coins in 2000.

Expected Results

The supply of all denominations of circulating coinage by the Mint to financial institutions to meet the demands of the Canadian economy.

Performance Measures

Reference should be made to the proposed new commercial-like contract mentioned above.

Objective

Non-budgetary payment to fund Canada’s equity interest in the Hibernia project.

Key Result

The timely contribution of equity to Canada Hibernia Holdings Corporation (CHHC) to fund Canada’s commitment to the Hibernia development project.

A Secure Financial Future

Key Plans and Strategies

To fund Canada’s obligations for the construction and start-up costs to the extent that they cannot be funded out of CHHC’s cash flow.

Expected Results

Beyond 1998–99, there will be no further need for the government to provide funding for its 8.5-per-cent interest in the Hibernia project. CHHC will manage the investment on a commercial basis from cash flow, pending a decision to sell the investment.

Performance Measures

Minimize the government’s funding requirements.

Accomplishments

The government’s funding of its 8.5-per-cent interest in the Hibernia project ceased in 1999. The project interest is now funded from internally generated cash flows.

Objective

Effective and efficient corporate administration.

Key Results

Timely and relevant fiscal and economic information.

Sound legal advice.

Accurate and timely processing of applications under the Access to Information Act and the Privacy Act.

Successful legislative initiatives.

Greater facility for Canadians communicating with the department.

Competent and professional corporate services, which comprise financial, human resources, information technology, security and administrative services.

Key Plans and Strategies

Consultations and Communications

Enhanced departmental capacity to deliver information to Canadians.

Improvements in the use of electronic communications such as the Internet.

A more systematic organization of media relations, consultations and ministerial correspondence.

Corporate Services

Universal Classification System (UCS) implementation.

La Relève.

Financial Information Strategy (FIS) implementation.

Research and evaluation of new technologies to provide business solutions.

Expected Results

Consultations and Communications

More timely and relevant fiscal and economic information.

Greater facility for Canadians to communicate with the department.

Corporate Services

More efficient classification system.

Rejuvenated, skilled workforce.

Implementation of private-sector model of accounting in the Government of Canada.

Business requirements of electronic environment to be met.

Performance Measures

Currently being developed.

Accomplishments

FIS Implementation

Embarked on project planning with ongoing development during 1999-2000 for targeted implementation in 2000-01.

Management of Executive Information System

A new correspondence management system was successfully implemented in the Department of Finance Canada, meeting both Y2K objectives and shared system objectives.

Strike/Demonstration Management

Contingency plans in effect for management of strikes and demonstrations to ensure the safety and security of employees and physical assets.

Access Control and Intrusion Detection System

Controlling software for the above system was updated to be Y2K compliant. This new software now affords a degree of flexibility in the system’s security features, to enable departmental officials to tailor the system to different clients’ needs while retaining system integrity.

La Relève and the Renewal of the Department

Through the PSC’s post-secondary recruitment program, the department recruited 34 university graduates at the master’s and doctoral levels.

The 1998 executive retreat identified the two top human resources priorities for the year: performance management and leadership training.

The department continues to build on the performance management process by providing feedback and developmental opportunities to its employees.

The Leadership Development Program was created to train executives and future executives. It is a five-day learning activity that includes the 360 feedback exercise, one-on-one coaching and the establishment of individual training plans.

Implementation of a Corporate Human Resources Planning Framework

A human resources planning calendar was introduced in the spring of 1999 to support a strategic human resources approach.

A human resources report was presented to the Executive Committee on progress achieved to date on meeting the objectives of La Relève.

The new Performance Management Program for executives was introduced. This allowed strong links between performance agreements and the department’s accountability framework.

A comprehensive demographic profile was developed for the department.

An executive retreat was planned for June 1999 to focus entirely on human resources management.

Implementation of the Revised Classification System and Official Languages Policy

The department continued with the preparatory work necessary to implement the new classification system. Work descriptions have been developed for a majority of positions and employee committees have evaluated a sample of positions that will serve to establish factor weights.

The department’s official languages policy was developed.

Y2K Readiness

Year 2000 progress is being updated on a regular basis. The results represent a continuation of a monitoring process that has been established specifically to provide a more detailed analysis of departmental Year 2000 plans as they relate to the department-wide, mission-critical (DWMC) functions.

The overall completion index for Year 2000 information technology conversion in the department is calculated at 100 per cent.

As for embedded systems, all those systems for which the department is responsible have been tested and, for those areas not compliant, plans have been set up to resolve the problem.

The end-user inventory of individual applications has been completed and is updated weekly. Plans have been established for the end-user environment and applications.

Server and desktop software are kept up to date.

Desktop computers (hardware) have been tested, repaired or replaced as necessary.

B. Public Debt Program

Objective

The statutory funding of interest and service costs of the public debt and the issuing costs of new borrowings, if required.

Objective

The funding of interest and service costs of the public debt and the issuing costs of non-retail debt, if required.

Key Results

The Interest and Other Costs Business Line encompasses accurate, timely payments and cash management.

A Secure Financial Future

Key Plans and Strategies

Maintain a well-functioning market in Government of Canada securities (focus on liquidity and transparency) to achieve lower debt costs, with a particular emphasis on managing the market impact of the downsizing of market debt ? progressive restructuring of domestic debt programs, in consultation with market participants.

Maintain a prudent structure for the debt stock to ensure cost stability under a range of potential interest rate environments.

Maintain active relations with investors and credit rating agencies through the timely distribution of information on Canada’s economic and fiscal outlook.

Maintain prudent levels of cash and Canada’s international reserves to foster orderly conditions in the foreign exchange markets and provide a sound liquidity position.

Manage the government’s foreign currency assets and liabilities prudently, immunize interest rates and currency risks, and minimize cost of carry.

Expected Results

Debt charges not exceeding those projected in the budget, including the contingency reserve, in any given year.

Performance Measures

Fixed/floating ratio -- the target is to have 2/3 of the government’s outstanding market debt in fixed-rate instruments (i.e. those that mature in a time period greater than one year).

An indicator of market efficiency is the trading spread for instruments (i.e. the difference between the yields at which instruments are offered for sale and for purchase); an indicator of market liquidity is total volume of transactions relative to outstanding stock; both as compared to other sovereign borrowers’ markets.

Successful auctions of domestic debt instruments and successful issuance of foreign currency denominated debt.

Accomplishments

Target for 2/3 proportion of debt stock in fixed-rate instruments achieved in 1998–99.

Trading spreads for Government of Canada Treasury Bills and benchmark bonds compare favourably to those of other major sovereign markets, as do the trading volumes for Government of Canada debt instruments.

Auctions of domestic debt continue to be successful, with positive feedback on operations from market participants; also, in 1998, two large foreign currency-denominated bonds were launched -- both were well-received by investors.

Launched pilot bond buy-back program with objective of liquidity maintenance in primary market for Government of Canada bonds.

IDA Code of Conduct (Policy No. 5) approved by Ontario Securities Commission and sent to all member firms.

New rules for auctions of Government of Canada securities implemented in October 1998.

Objective

The provision of funding for the government consistent with its fiscal plan and designed to balance cost, risk and market considerations; maintenance of a reasonable and sustainable retail share of the total federal debt, thereby ensuring a broad investor base for government debt; and the offer of a family of attractive products, thus benefiting all Canadians.

Key Results

Retention and diversification of the product line.

Increased access to products.

Operational efficiencies and prudent budget management.

A Secure Financial Future

Key Plans and Strategies

Establishment of a three-year Product Development Plan outlining CI&S’s product strategy and management of the cost-effectiveness and risk elements of the retail debt portfolio.

Development of a three-year Sales and Distribution Strategy, which includes:

• completion of the new Canada Savings Bonds Payroll Program;

• re-engineering of the current sales force organization; and

• building the commitment of financial institution partners.

Continued implementation of the Information Technology Plan, which includes:

• retail Debt Management System;

• stabilizing the new Canada Savings Bonds Payroll Program System;

• development of an Electronic Commerce Strategy; and

• ongoing cost-effective systems and operations support.

Expansion of marketing and Public Relations (PR) program, including:

• continuity program

• expansion of PR program

Expected Results

The development of a family of new products and enhancements to existing products.

Rollout of the new Canada Savings Bonds Payroll Program System to a larger segment of the remaining companies participating in the new Canada Savings Bonds Program and the canvassing of new companies.

Development of a Sales and Distribution Strategy and reorganization of CI&S’s payroll program sales force.

Business partnerships with financial institutions.

Development of an Electronic Commerce Strategy and implementation of selected components in 1998–99.

Finalization of an agreement with the Bank of Canada to provide ongoing operations and systems support to the Retail Debt Program under a cost-recovery approach.

Building on the Continuity Advertising Program by extending promotional campaigns to support being in the market at least six months of the year (compared to three weeks in 1996) while remaining within approved budget.

Expansion of the PR program by pursuing, for example, increased involvement of CEOs of participating payroll companies and the expansion of a focus on youth.

Performance Measures

Total retail debt as a percentage of total Government of Canada market debt.

Percentage of non-marketable retail debt portfolio (CPBs) sold in form other than non-registered fully liquid CSBs.

Gross sales of non-marketable retail debt.

Management within budget.

In 1998–99, CI&S continued its steady progress with respect to:

Retention and Diversification of the Retail Debt Portfolio

CI&S was successful in maintaining a reasonable share of retail debt holdings as a percentage of total Government of Canada market debt, at approximately 23 per cent in 1998-99.

Contributing to this positive outcome were the introduction of the less cashable Canada Premium Bond (CPB), a new bond offering a higher rate of interest, but with annual cashability and a six consecutive month sales period pilot, compared to four months in 1997–98 and three weeks in 1996–97. This was also the first time in over 50 years that two retail debt products were on sale at the same time -- the original Canada Savings Bond (CSB) and the new CPB, each with their own RRSP and RRIF option available.

More specifically, gross sales of the two bonds were $5.1 billion, with 50 per cent of total sales in the new CPB. Annualized sales through the Payroll Savings Program are estimated at $1.4 billion. Registered holdings in the Canada RRSP and RRIF also increased by about 25 per cent in the past year to $330 million. These sales numbers compare favourably to last year’s sales, meeting retention and diversification targets for the retail debt portfolio.

Rollout of the New Canada Savings Bonds Payroll Program

Continued progress was made in this second year of implementation of the new Canada Payroll Savings Bonds Program. About 50 per cent of payroll sales during the fall 1998 payroll campaign were generated from the new payroll program. Employer sponsors continue to provide positive reviews regarding the up to 70-per-cent reduction in administrative workload with the new system, while purchases per employee have increased by about 7 per cent compared to the original program. Furthermore, some companies returned to the Payroll Program, including Daimler Chrysler Canada Inc. after an eight-year absence.

Development of a Sales and Distribution Strategy and Enhanced Business Partnerships with Financial Institutions

In 1998-99, CI&S completed, in collaboration with a private-sector firm, a long-term Sales and Distribution Strategy to be implemented gradually over the next few years. In 1998-99, CI&S started the reorganization of its current payroll program sales force by restructuring sales force compensation and providing increased sales support and training. Furthermore, a small team was assigned to work on building business partnerships with financial institutions.

Development of an Electronic Commerce Strategy and Building on the Retail Debt Technology Infrastructure

In 1998–99, CI&S completed an Electronic Commerce Strategy to determine priorities in this area for the next three years in order to promote on-line transactions and communications with customers. CI&S, in collaboration with the Bank of Canada, also continued to set in place a solid technology foundation in support of the retail debt program. Among the major accomplishments in 1998-99 were the completion of the Retail Debt Management System (the new CSB register) and an enhancement to the New Canada Savings Bonds Payroll Program System to ensure adequate support for the conversion to the new payroll program. It is worthy of note that the Bank of Canada, together with CI&S, were awarded a Distinction ’98  Gold Medal (Government Technology Exhibition and Conference) in recognition of the successful implementation of the New Canada Savings Bonds Payroll Program System.

Cost Recovery and Service Agreement with the Bank of Canada

CI&S continued negotiations with the Bank of Canada with regard to systems and operations support provided by the Bank to the retail debt program. Major inroads were made with regard to the Bank moving towards a more predictive and consumption-based cost accounting model to recover from CI&S the Bank’s costs related to providing services to the retail debt program.

Expansion of CI&S’s Integrated Marketing Program

CI&S’s innovative approach to integrated marketing -- under the theme of "New Canada Savings Bonds: You’re on solid ground" -- continued to show positive results, which also allowed the Agency to support a longer sales period with a minimal increase in the marketing budget (through internal reallocation of funds). This trend was also apparent in the latest research results indicating that more people now think CSBs are for people like them. Furthermore, CI&S’s two television commercials won Mobius advertising awards in Chicago in the fall of 1998 (achieved second place in the financial institutions’ category out of 5,000 entries from 37 countries).

Among the most notable unpaid marketing efforts was the nomination, on a volunteer basis, of Mr. Lynton R. Wilson, Chairman of the Board of BCE Inc., as the inaugural National Campaign Chair of the new Canada Savings Bonds Payroll Program. This was a new initiative that will become an integral part of the program’s success with corporate Canada.

C. Federal-Provincial Transfers Program

Objective

Transfer payments pursuant to statutes with respect to the Canada Health and Social Transfer, Equalization to provinces and territories and other transfers, and pursuant to agreements with respect to Territorial Formula Financing.

C.1 Transfer Payments Business Line

Key Results

Accurate and timely transfer payments pursuant to statutes and agreements with respect to:

Canada Health and Social Transfer (CHST)

Which provides funds to provinces in support of health, post-secondary education and social assistance to ensure the maintenance of the Canada Health Act and access to social assistance without minimum residency requirements. The 1999 budget provided an additional $11.5 billion specifically for health care over the next five years and accelerated the progression to an equal per capita entitlement.

Fiscal Equalization

Which provides transfer payments to provinces with lower fiscal capacity so that they can provide reasonably comparable levels of services at reasonably comparable levels of taxation. The department consulted with provinces to prepare for the renewal of Equalization legislation effective April 1, 1999.

Territorial Formula Financing

To ensure that territorial governments have the financial resources to provide a full range of public services in the North. The department concluded consultations for the establishment of financial arrangements for the new territory of Nunavut in 1999, as well as the renewal of financial arrangements with the other territories.

Other Transfers Such As:

• Statutory Subsidies – which are unconditional payments, established by the Terms of Confederation and under subsequent arrangements as new provinces entered Confederation, payable in perpetuity.

• Youth Allowances Recovery – which represents the recovery from Quebec of that portion of the special tax abatement to the province in respect of the now-defunct Youth Allowances program.

• Alternative Payments for Standing Programs – which is an arrangement whereby, in lieu of direct cash transfers for standing programs, the federal government reduces federal personal income tax rates in Quebec. This special tax abatement is subtracted from cash entitlements otherwise payable under the Fiscal Arrangements Act.

• Grant to the Province of Newfoundland and Labrador – which is a series of statutory payments to be made to the Province of Newfoundland and Labrador pursuant to the Newfoundland Additional Financial Assistance Act.

Secure Social Programs

Territorial Formula Financing (TFF)

Key Plans and Strategies

In order to establish new financing arrangements, the department is involved in extensive analysis of all technical aspects of the TFF formula.

This technical work is undertaken in the context of intensive consultations on financing arrangements within a structure of federal-territorial officials committees. Given the special circumstances of the current renewal of TFF resulting from the creation of a new territory, a multipartite committee of federal and territorial officials and stakeholders has been set up to consult on specific financing issues arising from the division of the Northwest Territories.

The department, while fully responsible for financing arrangements with the territories, consults regularly with Indian and Northern Affairs Canada, which has program responsibilities in the North.

Expected Results

Under the current Territorial Formula Financing agreements, it is expected that, in 1999–2000, the federal government will transfer close to $1.3 billion to the three territorial governments.

The department anticipated establishing new financing arrangements with Yukon, the Government of the Northwest Territories, and the Interim Commissioner for Nunavut in 1998–99. Funding for Nunavut and the Northwest Territories will include reasonable ongoing incremental costs due to the creation of the new territory.

Performance Measures

Extensive consultations with the governments and people of the North, ensuring funding stability and predictability for these governments were concluded.

New financing agreements with the three territories to be put in place.

Accomplishments

New arrangements for TFF established for a five-year term: from April 1, 1999, to March 31, 2004. Special provisions were made for Nunavut to enable the Interim Commissioner to sign a two-year agreement with an option for the new Government of Nunavut to sign the agreement once it has assumed office.

As a result of these new agreements, TFF funds are expected to increase by close to $300 million over the next five years, from $1.3 billion in 1999–2000 to $1.6 billion in 2003–04.

Equalization

Key Plans and Strategies

Equalization payments are calculated according to a formula set out in federal legislation. Provinces with revenue-raising capacity below a standard receive Equalization transfers from the federal government to bring their per capita fiscal capacity up to the standard. The standard measures the fiscal capacity of the five ‘middle income’ provinces  Quebec, Ontario, Manitoba, Saskatchewan and British Columbia. The standard in
1998–99 is $5,472.

Equalization renewal discussions involve an in-depth review of a number of technical aspects of the formula, including the treatment of provincial sales tax revenues, resource tax revenues and revenues from lotteries and other gaming activities. The department also conducted analyses of other aspects of the program, some of which, such as the treatment of user fees and the design of the Equalization ceiling and floors, were the subjects of specific recommendations by the Auditor General in a recent comprehensive audit of the program.

Ongoing consultations with provinces are an integral part of the management of the Equalization program. Permanent federal-provincial committees of officials meet regularly and intensify their efforts during the two-year period preceding each renewal of the legislation.

The department is working with Statistics Canada to improve data used in the Equalization formula and, in particular, to take full advantage of the Project to Improve Provincial Economic Statistics currently under way at Statistics Canada.

Expected Results

New Equalization legislation will be tabled in 1998–99 and regulations will be drafted to give effect to changes to the program. Improvements in the Equalization formula’s measurement of provincial and municipal fiscal capacities are expected, in particular in the areas of sales tax, lottery revenues, property tax and payroll taxes, thus responding to the recommendations made by the Auditor General.

Performance Measures

Successful completion of consultations with provinces and of technical analyses.

Passage of legislation renewing the Equalization program for five years.

Accomplishments

Legislation passed. Royal Assent was granted to an Act to amend the Federal-Provincial Fiscal Arrangements Act on March 25, 1999. This enactment provides payments for the next five fiscal years, putting Equalization and other major transfer programs on a common five-year basis. (See chart on p. 53.)

Equalization payments forecast to be $9.3 billion in 1999-2000. Over the next five-year arrangement, Equalization will provide a projected $50 billion to provinces, $5 billion more than they received under the previous five-year arrangement.

Canada Health and Social Transfer (CHST)/Strengthening Health Care

Key Plans and Strategies

To increase federal support for health care, post-secondary education and social assistance and services by implementing a floor of $12.5 billion for the cash portion of the CHST.

Expected Results

As a result of the planned increase in the CHST cash floor, provinces will be getting higher federal support for the provision of health care and social programs. Over the period from 1997-98 to 2002–03, the higher cash floor will increase CHST transfers to provinces by some $7.0 billion. (See chart on p. 53.)

Performance Measures

Passage of legislation.

Analyses of the economic, fiscal, financial and other implications of changes to the social security system and of social policy in general.

Accomplishments

Passage of legislation implementing the 1998 budget and an increase of the cash floor from $11.0 billion to $12.5 billion.

1999 budget measures included an additional $11.5 billion to the CHST specifically for health care. CHST payments to provinces forecast to be $28.4 billion in 1999–2000, increasing to $31.4 billion in 2003-04. The budget also allowed for the gradual elimination of disparities in the way the CHST is allocated across provinces. Beginning in 2001-02, all provinces will receive identical per capita CHST entitlements, providing equal support for health and other social services to all Canadians. Royal Assent was granted on June 17, 1999, to an Act to implement certain provisions of the budget to implement these measures.

Beyond transfers to provinces, the department worked closely with Health Canada to develop proposals for new or enhanced health programs announced in the 1999 budget. The budget provided close to $1.4 billion over three years to improve health information systems, promote health-related research and innovation, improve First Nations and Inuit health services, and enhance preventive programming.

Equalization Results

Canada Health and Social Transfer (CHST)

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