Section II provides detailed information on how each of the Department of
Finance Canada's 10 program activities support the Department's strategic
outcome and priorities over the reporting period.
The Department has one strategic outcome: To create a
fiscal, economic, social, and global advantage for Canada by providing
appropriate policies and sound advice with respect to economic, social, and
financial conditions and to the government's overall agenda.
The Department continues to maintain a balanced approach that will ensure a
sustainable fiscal structure, encourage a more productive, competitive, and
dynamic Canada, and support and sustain Canadian society.
Figure 5 summarizes how each of the Department's 10 program activities is
linked to its four priorities.
Figure 5
Support of Departmental Priorities, by Program Activity
Program Activities
|
Priority 1:
Sound Fiscal Management
|
Priority 2:
Sustainable Economic Growth
|
Priority 3:
Sound Social Policy Framework
|
Priority 4:
Effective International Presence
|
1. Tax Policy
|
√
|
√
|
√
|
|
2. Economic and Fiscal Policy
|
√
|
√
|
|
√
|
3. Financial Sector Policy
|
√
|
√
|
√
|
√
|
4. Economic Development and Corporate Finance
|
√
|
√
|
|
|
5. Federal-Provincial Relations and Social Policy
|
|
|
√
|
|
6. International Trade and Finance
|
|
√
|
|
√
|
7. Public Debt
|
√
|
|
|
|
8. Domestic Coinage
|
√
|
|
|
|
9. Transfer Payments to Provinces and Territories
|
|
|
√
|
|
10. International Financial Organizations
|
|
|
|
√
|
|
The Tax Policy Branch is responsible for the development and evaluation of
federal taxation policies and legislation regarding personal and business income
tax, sales tax, and excise tax. The Branch provides advice and recommendations
for changes to improve the personal, corporate, sales, and excise tax systems
while raising the required amount of revenue to finance government priorities.
Initiatives include developing tax legislation and negotiating tax treaties,
federal-provincial tax collection agreements, federal-Aboriginal tax
administration agreements, and tax policy research and evaluation.
Financial Resources ($ thousands)
2006–07
|
2007–08
|
2008–09
|
31,742
|
31,537
|
31,784
|
Human Resources: FTEs
2006–07
|
2007–08
|
2008–09
|
269
|
275
|
278
|
Priorities
The work of the Branch contributes to three of the Department's priorities:
1. Sound fiscal management;
2. Sustainable economic growth; and
3. Sound social policy framework.
The tax system contributes to these priorities by raising sufficient revenues
to pay for public services, including social programs (for example, universal
health care and public safety and security) and strategic investments in areas
that promote a more competitive and productive Canadian economy (for example,
education and training, basic scientific research, and infrastructure). At the
same time, however, revenues must be raised in a manner that keeps tax burdens
and marginal tax rates low to provide incentives to work, save, and invest. Tax
revenues must also be raised in a fair manner so that taxpayers in similar
circumstances face similar tax treatment, ensuring that the tax burden is shared
in accordance with the ability of taxpayers to pay. Where appropriate, the tax
system may also be used to pursue specific economic and social objectives, such
as savings for post-secondary education, promoting the physical fitness of
children, encouraging research and development, and helping protect the
environment.
In order to ensure that the tax system functions efficiently, the federal
government works with provinces, Aboriginal governments, and other countries to
improve tax policy coordination. It also undertakes ongoing analysis of the
impact of both new and existing tax policy initiatives.
Recent tax policy initiatives that contribute to achieving the Department's
priorities include:
- cutting the goods and services tax (GST) by one percentage
point;
- reducing the general corporate income tax rate, eliminating the
corporate surtax, and accelerating the elimination of the federal capital tax;
- reducing the lowest personal income tax rate to 15.5 per cent
from 16 per cent and increasing the basic personal amount;
- introducing a new $1,000 Canada Employment Credit;
- implementing other targeted personal income tax measures, such
as a new tax deduction for the cost of tools for tradespeople, a new tax credit
for the cost of textbooks, a new children's fitness tax credit, and a tax credit
for the cost of monthly public transit passes;
- negotiating new reciprocal taxation agreements with a number of
provinces;
- signing a number of tax administration agreements with
Aboriginal governments, including a new First Nations Goods and Services Tax
Administration Agreement with the Tlicho First Nation and a new First Nations
Personal Income Tax Agreement with the Nunatsiavut First Nation;
- negotiating and implementing a number of double taxation
conventions with other countries; and
- publishing an evaluation report that helped to inform the
government's strategy to create a meaningful marginal effective tax rate
advantage for business investment, as announced in Budget 2006.
Looking ahead, the Department will continue to advise the government over the
2006–09 planning period on potential measures to further improve the
competitiveness, efficiency, and fairness of the tax system in a fiscally
sustainable manner, including cutting the GST by an additional percentage point
and establishing a meaningful overall marginal effective tax rate advantage over
the U.S. Among the other potential policy measures that will be assessed during
the planning period are:
- improved incentives to work for low-income Canadians, including
an earned income tax credit, such as a working income tax benefit; and
- ways to help parents save for the long-term financial security
of a child with severe disabilities.
Expected results
1. Competitive, efficient, and fair personal, corporate, sales, and
excise tax systems
The Tax Policy Branch plans to attain the expected result through the
following ongoing activities and key commitments.
Ongoing activities
- Provide sound and timely advice, analysis, briefings, and
recommendations to the Minister and senior officials on ways to improve the tax
system, including proposals to make it more attractive for Canadians to work,
save and invest, make the tax system fairer, improve the competitiveness of the
tax system, and support other government priorities;
- Meet and consult with the Canada Revenue Agency, the Department
of Justice Canada, and other government departments as well as external
stakeholders, including tax professionals, business groups, non-governmental
organizations, other jurisdictions, provincial governments and Aboriginal
peoples, and international organizations to listen to their concerns and views,
to discuss and explain the government's policies, and to ensure the effective
functioning of Canada's tax system and implementation of policy changes;
- Conduct consultations with provinces and stakeholders on
various taxation issues;
- Maintain and improve statistical models of the tax system and
contribute to the publication of the annual tax expenditure report;
- Manage the Air Travellers' Security Charge, the Comprehensive
Integrated Tax Coordination Agreement, and the harmonized sales tax provincial
revenue payment mechanism; and
- Assess and manage risks associated with court challenges related to
taxation matters and be prepared to take appropriate actions.
Key commitments
- Identify initiatives for budgets and provide thorough analysis
of these initiatives, including estimates of costs and effects on affected
taxpayers;
- Prepare and draft parts of the budget plan relating to
taxation, the supplementary tax annexes, and other budget products within
deadlines;
- Implement goods and services tax / harmonized sales tax
measures for financial institutions announced in the fall of 2005; and
- Draft high-quality income and sales tax legislation and regulations
to implement government initiatives on a sound and timely basis.
2. Improved coordination of the federal tax system with those of
provinces, Aboriginal governments, and other countries
The Tax Policy Branch plans to attain the expected result through the
following ongoing activities and key commitments.
Ongoing activities
- Review new provincial tax measures administered under the tax
collection agreements;
- Review entities on Schedule A of the reciprocal taxation
agreements;
- Review set-off arrangements with provinces;
- Make methodological improvements to payments under the tax
collection agreements;
- Evaluate and develop options that promote federal-provincial
tax harmonization;
- Manage the First Nation sales tax, the First Nation goods and
services tax, and the First Nation personal income tax payment mechanism;
- Negotiate tax elements related to more than 20 agreements in
principle and seven final comprehensive land claim agreements and self-governing
agreements with Aboriginal peoples;
- Negotiate new First Nations goods and services taxand First
Nations personal income tax agreements with Aboriginal governments;
- Maintain Canada's network of international tax treaties; and
- Seek to obtain tax information exchange agreements with non-treaty
jurisdictions.
Key commitments
- Implement a Corporate Income Tax Collection Agreement with
Ontario consistent with the agreement reached in May 2005;
- Develop long-term sustainable tax policies regarding Aboriginal
self-government and comprehensive land claims;
- Develop negotiation strategies in respect of comprehensive land
claim and self-government agreements;
- Implement a consultation strategy that will reflect the
principles and objectives of the First Nations–Federal Crown Political
Accord on the Recognition and Implementation of First Nation Governments;
and
- Negotiate new and revised tax treaties with other countries, as
appropriate.
3. High-quality research and evaluation
The Tax Policy Branch plans to attain the expected result through the
following ongoing activities and key commitment.
Ongoing activities
- Evaluate various measures in the Canadian tax structure to
ensure that they continue to be relevant, effective, and efficient;
- Improve databases, research tools, and research methodologies
in order to enhance the quality of analysis in the Branch; and
- Increase the use of contract research to broaden scope and improve
timelines.
Key commitment
- Undertake research to support future tax policy initiatives,
including the expanded use of the marginal effective tax rate methodology.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the three expected results under
this program activity.
Expected Results/
Performance Measurement
|
1. Competitive, efficient, and fair personal, corporate, sales, and
excise tax systems
|
2. Improved coordination of the federal tax system with those of
provinces, Aboriginal governments, and other countries
|
3. High-quality research and evaluation
|
Performance Indicators
|
1. Proposals to improve the competitiveness, efficiency, and fairness
of the personal, corporate, sales, and excise tax systems
|
1. Active negotiation of additional tax administration agreements with
provincial and Aboriginal governments
|
1. Number and effect of research studies and evaluation reports
|
|
2. The amount of tax revenue raised
|
2. Effective network of tax treaties with other countries
3. Effective meetings of the Federal-Provincial Tax Committee
|
|
Data Sources
|
Federal budgets, legislation, regulations, press releases, tax
treaties, the Department's Marginal Effective Tax Rate models, Public
Accounts, tax evaluation, and tax expenditure reports
|
Federal-provincial agreements, federal-provincial meetings,
federal-Aboriginal agreements, and federal-Aboriginal negotiations
|
Working papers, models developed, research papers
|
Frequency
|
Annual
|
Annual
|
Annual
|
Target
|
Proposals in the budget and throughout the year, as required, to
implement the government's tax policy agenda and maintain a competitive,
effective, and fair tax system
|
Increased number of tax agreements signed
|
Two published reports per year
|
Target Date
|
As required
|
Ongoing
|
Ongoing
|
|
The Economic and Fiscal Policy Branch is responsible for monitoring and
preparing forecasts of Canada's economic and fiscal position and plays a lead
role in the management of the government's fiscal framework. The Branch provides
ongoing analysis and advice regarding the government's economic policy
framework, its budget planning framework and spending priorities, as well as the
fiscal positions of other levels of government.
Financial Resources ($ thousands)
2006–07
|
2007–08
|
2008–09
|
14,973
|
14,878
|
14,996
|
Human Resources: FTEs
2006–07
|
2007–08
|
2008–09
|
122
|
125
|
126
|
Priorities
Priority 1: Sound fiscal management
The Branch contributes to sound fiscal management by ensuring that budget
planning is carried out in a transparent manner and supports long-term fiscal
sustainability. In Budget 2006 the government introduced a new budget framework
in order to improve fiscal transparency and financial management. This new
framework includes:
- The presentation of economic and fiscal projections over a two-year
time horizon. By focussing the planning period on the near term, where
uncertainties are fewer, the government can reasonably be held to account for
its fiscal plan.
- Restraining the rate of growth of spending to a more sustainable
level and reviewing the Expenditure Management System to ensure that government
programs focus on results and value for money and are consistent with government
priorities and responsibilities.
- A proposal to allocate unplanned surpluses in recognition that
better-than-expected fiscal results may arise. A formal arrangement for sharing
a portion of unplanned surpluses at year-end will allow fiscal risks to be
handled transparently and ensure that the benefits of better-than-expected
fiscal results are shared broadly.
- Reforms to the government's financial reporting, including the
consolidation of several foundations and the presentation of budgeted revenues
and expenses on a gross basis. This will result in transparent presentation of
financial information.
Expected result
1. Transparent fiscal planning and sustainable fiscal policy
The government's new framework will help ensure that fiscal planning is
transparent and supports long-term fiscal sustainability.
The Department will undertake the following ongoing activities and key
commitments in support of the government's expected result.
Ongoing activities
- Continue to monitor and assess fiscal developments, update fiscal
projections, provide fiscal policy analysis and advice, and play a lead role in
the management of the fiscal framework and coordination of the Economic and
Fiscal Update and the annual budget process.
- Provide information on the government's financial position in the
monthly Fiscal Monitor.
- As committed to in the Federal Accountability Action Plan,
provide quarterly updates of fiscal outlook for the current fiscal year.
- Prepare the annual financial report on the government's fiscal
performance for the previous fiscal year.
- Plan for annual debt reduction of $3 billion starting in 2006–07
and reduce the debt-to-GDP ratio to 25 per cent by 2013–14.
Key commitments
- Develop a new approach for allocating unplanned surpluses. In
particular, discuss with provinces and territories the possibility of
introducing legislation authorizing the allocation of a portion of unanticipated
surpluses at fiscal year-end to the CPP and the Quebec Pension Plan.
- Provide support to the review of the government's Expenditure
Management System, which will be led by Treasury Board of Canada Secretariat. To
progress toward more sustainable spending, the President of the Treasury Board
will identify savings of $1 billion for 2006–07 and 2007–08.
Priority 2: Sustainable economic growth
Effective economic policies that will enable the Canadian economy to perform
well despite external economic shocks require an accurate assessment of current
and future economic conditions both in Canada and abroad.
A focus for 2006–07 will be to monitor and assess the implications for
future Canadian growth prospects of productivity growth, labour adjustment, and
the challenges presented by an aging population.
An effective assessment of these issues will enable the government to
appreciate potential fiscal constraints arising from future economic conditions
and to develop effective policies to sustain long-term growth.
Expected results
2. Effective monitoring and forecasting of economic performance
It is critical that the government understand the strengths and weaknesses of
the Canadian economy now and in the future in order to develop economic policies
that lead to sustained economic growth. Given the constantly changing domestic
and international economic environment, there is a need to continuously monitor
and forecast the implications of these developments.
The Branch plans to attain the expected result through the following ongoing
activity and key commitment.
Ongoing activity
- Provide regular briefings to the Minister on major
macroeconomic developments in Canada and abroad as well as inform the public on
key economic developments. This information includes chapters on economic
developments and outlook in the Economic and Fiscal Update and the Budget Plan,
briefing notes to the Minister, and regular documents such as the Economy in
Brief; Canadian and U.S. monthly economic assessments; and periodical monitors
on labour markets, housing markets, business investment, inventory changes,
productivity developments, Canadian financial conditions, the Canada-U.S.
corporate financial situation, interest rate expectations; and commodity price
developments.
Key commitment
- Conduct four private-sector surveys of the Canadian economic outlook
and assess the potential risks to these outlooks.
3. Effective briefing and advice on a wide selection of economic
questions
The current economic environment is one characterized by issues that are both
complex and far reaching. In-depth economic research is essential to understand
and evaluate the interactions and effects of these issues.
The Branch plans to attain the expected result through the following ongoing
activity and key commitments.
Ongoing activity
- Continue to provide regular briefings to the Minister on the
main drivers of productivity growth, labour market developments, and the
economic and fiscal effects of developments such as energy price changes,
exchange rate movements, and population aging. This information includes
briefing notes to the Minister and publications, such as working papers,
analytical notes, and technical notes, and this could also include special
chapters or annexes in the Economic and Fiscal Update or the Budget Plan.
Key commitments
- Update presentations on the determinants of human capital and
productivity; and
- Analyze possible measures to improve Canada's productivity
performance.
Priority 4: Effective international presence
International cooperation is necessary to understand and provide an accurate
assessment of the economic and fiscal conditions around the world. By
participating in international meetings, Canada can coordinate economic
policies, when and where it is appropriate, to foster international economic
growth and, given the openness of the Canadian economy, improve the growth
potential of Canada.
Expected result
4. Understand and contribute to international economic policies and
reforms
The government benefits from understanding past, ongoing, or proposed reforms
in other countries and their implications on the economic and fiscal situation
abroad. This understanding will enable the government to develop and implement
economic policies that are best suited to promote sustained economic growth in
Canada.
The Branch plans to attain the expected result through the following ongoing
activity.
Ongoing activity
- Continue to represent Canada at OECD meetings and to provide
analysis on economic policies proposed by the institution.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the expected results under this
program activity.
Expected Results/Performance Measurement
|
1. Transparent fiscal planning and sustainable fiscal policy
|
2. Effective monitoring and forecasting of economic performance
3. Effective briefing and advice on a wide selection of economic
questions
|
4. Understand and contribute to international economic policies and
reforms
|
Performance Indicators
|
Federal debt as a share of the gross domestic product (GDP)
|
Canada's GDP growth relative to G6 (G7 less Canada)
|
Canada's GDP growth relative to G6 (G7 less Canada)
|
Data Sources
|
Annual Financial Report
|
IMF World Economic Outlook
|
IMF World Economic Outlook
|
Frequency
|
Annual
|
Semi-annual
|
Semi-annual
|
Target
|
Reduce the federal debt-to-GDP ratio to 25 per cent by 2013–14
|
Above-average annual growth rate
|
Above-average annual growth rate
|
Target Date
|
Ongoing
|
Ongoing
|
Ongoing
|
|
Under this program activity, the Financial Sector Policy Branch is
responsible for providing analysis on Canada's financial services sector and
financial markets as well as developing the legislative and regulatory framework
governing federally chartered financial institutions (banks, trust companies,
insurance companies, credit unions, and other financial institutions) and
federally regulated defined benefit pension plans. The Branch also manages the
government's borrowing program and its cash and official international reserves
and provides support to the Minister regarding Crown corporation borrowing.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
21,105
|
19,261
|
17,297
|
Human Resources: FTEs
2006–07
|
2007–08
|
2008–09
|
146
|
144
|
131
|
Priorities
Priority 1: Sound fiscal management
Debt service is the largest spending program of the federal government. The
prudent and effective management of the government's debt is an important
element of the Department's strategy for sound fiscal management. For more
information on debt management, see the following link: http://www.fin.gc.ca/toce/2005/dmr05_e.html.
The focus of Financial Sector Policy Branch activity for 2006–07 will be on
continuing to review and evaluate the effectiveness of debt management and
treasury management frameworks and programs while pursuing improvements to the
borrowing framework for major government-backed entities.
Expected results
1. Stable, low-cost financing for the Government of Canada
The government's operational needs are met through borrowing from capital
markets. The government's debt structure (the mix of fixed- and floating-rate
debt) is managed to ensure that debt costs are kept low and stable over time.
For information on the initiatives under this result, see "Program
Activity 7, Public Debt."
2. A well-functioning market in Government of Canada securities
A well-functioning wholesale market in Government of Canada securities
benefits the government and a wide range of market participants. For the
government as a debt issuer, a well-functioning market attracts investors and
ensures that funding costs are kept low. For market participants, a liquid and
active secondary market in government debt provides credit risk-free assets for
investment portfolios, a pricing benchmark for other instruments, and a primary
tool for hedging risk.
For more information on the initiatives under this result, see "Program
Activity 7, Public Debt."
3. Management of Canada's official international reserves
In conjunction with the Bank of Canada, the Department manages Canada's
official international reserves. This is a portfolio of diversified foreign
currency assets, which is maintained to provide foreign currency liquidity for
the Government of Canada and to provide the funds if required to help promote
orderly conditions for the Canadian dollar in foreign exchange markets. See
http://www.fin.gc.ca/toce/2005/oir05_e.html.
The Branch plans to attain the expected result through the following ongoing
activity.
Ongoing activity
- Work with the Bank of Canada to maintain a target level of reserves
and to pursue the portfolio objectives of maintaining a high standard of
liquidity, preserving capital value, and optimizing return.
Risks and mitigation plans
Operational risks associated with reserves investment are addressed through
the maintenance of effective governance and audit regimes and through business
continuity planning.
4. A sound borrowing framework for Crown entities
Under the Financial Administration Act, the Minister is responsible
for approving the borrowing done by government entities and ensuring prudent
treasury management policies.
A 2005 study by an outside consulting firm of the current borrowing framework
for major Crown borrowers identified improvements to the existing framework and
advised on the potential benefits and costs of a consolidated borrowing
framework. The study is available through the following link: http://www.fin.gc.ca/toce/2005/MFGBE-e.html.
The Branch plans to attain the expected result through the following ongoing
activity and key commitment.
Ongoing activity
- Provide advice on borrowing plan approvals and on ministerial
policies for prudent treasury management.
Key commitment
- Enhance the borrowing framework for major government-backed
borrowers and conduct follow-up analysis of a consolidated borrowing framework,
taking into account the interests of the entities and their stakeholders, market
participants, and the government as shareholder.
Risks and mitigation plans
The Department will work with the borrowers to ensure that improvements to
the borrowing framework are designed and implemented in such a manner as to
achieve operational efficiencies while minimizing exposure to financial and
operational risks for the Government of Canada and the borrower.
5. A supply of coinage at a reasonable cost
The Department of Finance Canada buys coinage from the Royal Canadian Mint
and resells it to financial institutions. The overriding objective is to ensure
the supply of circulating coinage meets the needs of the economy.
For information on the initiatives under this result, see "Program
Activity 8, Domestic Coinage."
Priority 2: Sustainable economic growth
Ensuring the competitiveness, efficiency, safety, and soundness of Canada's
financial sector and ensuring that domestic financial markets function well are
necessary to achieving sustainable growth in the Canadian economy. For 2006–07,
the focus will be on completing the 2006 review of the financial institutions
statutes, implementing regulations associated with the new corporate governance
legislation for financial institutions, preparing for a planned Financial Sector
Assessment Program (FSAP) update by the IMF as a follow up to the assessment
conducted in 1999, and contributing to an enhanced system of securities
regulations in Canada.
Expected result
6. A regulatory framework that promotes the soundness, efficiency,
and competitiveness of Canada's financial sector and serves the needs of
individuals, businesses, and the economy
The Department advises and develops policy, legislation, and regulations to
support a leading-edge financial services sector and domestic capital market to
achieve a more productive, competitive, and dynamic economy.
The Branch plans to attain the expected result through the following ongoing
activity and key commitments.
Ongoing activity
- Conducting policy analysis and providing advice on a broad range of
financial sector issues, including systemic stability, prudential issues,
efficiency and global competitiveness, responsiveness to needs of users
(including consumers and small and medium enterprises (SME)) and financial
services trade.
Key commitments
- Develop legislative proposals for review of financial sector
statutes;
- Develop regulations associated with Bill C-57, An Act to
Amend Certain Acts in Relation to Financial Institutions;
- Develop preparatory work for the IMF FSAP update; and
- Work with the provinces and territories toward a common securities
regulator for Canada.
Risks and mitigation plans
Key commitments generally include legislative initiatives that are subject to
consultations, (including intergovernmental discussion), ministerial and Cabinet
decision making, as well as parliamentary approval. Priorities and plans,
including timelines, are adjusted accordingly.
Priority 3: Sound social policy framework
A properly designed private pension system can contribute to the security of
Canadian workers and retirees and support increases in living standards. The
focus in 2006–07 will be on strengthening the framework for defined benefit
pension plans and providing advice related to the Canada Pension Plan Investment
Board (CPPIB).
Expected results
7. A sound legislative and regulatory framework for federally
regulated defined benefit pension plans
Following up on the public consultation process that commenced in 2005 and
commitments in the 2006 budget, the Department will move forward proposals to
strengthen the legislative and regulatory framework for federally registered
defined benefit pension plans in order to improve the security of pension
benefits and ensure the viability of defined benefit pension plans.
The Branch plans to attain the expected result through the following ongoing
activity and key commitment.
Ongoing activity
- Conduct analysis and research and study domestic and
international trends in order to provide policy advice on pension issues.
Key commitment
- Move forward proposals to strengthen the legislative and regulatory
framework for federally registered defined benefit pension plans in order to
improve the security of pension benefits and ensure the viability of defined
benefit pension plans.
8. Effective framework for investment of CPP funds
The CPPIB invests CPP funds on behalf of more than 16 million contributors
and beneficiaries. The success of the CPPIB in achieving its investment
objectives derives primarily from the soundness of its governance and the
quality of its board. The Minister of Finance is responsible for the CPPIB
legislative framework and for coordinating, on behalf of federal and provincial
governments, the appointment of individuals to the Board.
The Branch plans to attain the expected result through the following ongoing
activity and key commitment.
Ongoing activity
- Provide timely advice on the CPPIB governance, legislation,
regulatory, and reporting issues.
Key commitment
- Contribute to the triennial review of the CPPIB governance and
investment issues.
Risks and mitigation plans
The Chief Actuary, within the Office of the Superintendent of Financial
Institutions Canada, has the statutory responsibility for ensuring the actuarial
soundness of the CPP.
Priority 4: Effective international presence
The Department is responsible for issues related to AML and ATF. The
Department's leading role in the global fight against money laundering and
terrorist financing contributes to public safety in Canada and worldwide. In
2006–07, the focus will be on enhancing Canada's AML and ATF regime,
undergoing a mutual evaluation, and presiding over the FATF.
Expected results
9. A world-class AML and ATF framework
The goal of Canada's AML and ATF regime is to combat money laundering and
terrorist financing by conforming to international standards and providing
appropriate tools to law enforcement while respecting the privacy of Canadians.
The Branch plans to attain the expected result through the following ongoing
activities and key commitments.
Ongoing activities
- Conduct analysis and research and study domestic and
international trends in order to provide policy advice on AML/ATF issues; and
- Coordinate the National Initiative to Combat Money Laundering.
Key commitments
- Support the five-year parliamentary review of the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act;
- Conduct consultations and develop legislation and regulations
to enhance Canada's AML/ATF regime in line with revised international standards;
and
- Prepare the next mutual evaluation of Canada's AML/ATF regime
planned for 2007.
Risks and mitigation plans
Key commitments generally include legislative initiatives that are subject to
consultations (including intergovernmental discussion), ministerial and Cabinet
decision making, as well as parliamentary approval. Priorities and plans,
including timelines, are adjusted accordingly on an ongoing basis.
10. Effective support for Canada's presidency of the FATF
Canada will hold the presidency of the FATF, the key international body
established to address terrorist financing and money laundering, from
July 2006
to June 2007. As president of the FATF, Canada will set out the work program for
the FATF for 2006–07, chair FATF meetings, host a plenary meeting in October
2006 in Vancouver, and represent the FATF at a number of other international
meetings, including meetings of FATF-style regional bodies.
Presiding over the FATF will demonstrate internationally Canada's commitment
to remain at the forefront of the global fight against terrorist financing and
money laundering.
The Branch plans to provide effective support for Canada's presidency of the
FATF through the following ongoing activity and key commitment.
Ongoing activity
- The Financial Sector Division will provide secretariat support for
the Canadian president of the FATF during his tenure.
Key commitment
- Planning, organizing, and hosting a plenary meeting of the FATF for
300 to 400 delegates in Canada.
Risks and mitigation plan
International developments and pressures could force a realignment of FATF
priorities, which could create operational challenges and alter planning
assumptions for the Canadian presidency.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the 10 expected results under
this program activity.
Expected
Results/
Performance Measurement
|
1. Stable low-cost financing for the
Government of Canada
|
2. A well-functioning market in
Government of Canada securities
|
3. Management of Canada's official
international reserves
|
4. Improved framework for major
Crown-backed entities
|
5. A supply of coinage at a reasonable
cost
|
Performance Indicators
|
Measures of operational performance (e.g.
interest costs, fixed-floating shares of debt, average term to maturity)
|
Measures of market performance (e.g.
turnover, trading spreads)
|
Measures of operational performance (e.g.
investment returns, risk exposures)
|
Cost-effective borrowing activities and sound
investment practices
|
Regular audit of payments to the Mint for
domestic coinage supply and distribution
|
Data
Sources
|
Fiscal
Monitor; Debt Management Report
|
Debt
Management Report
|
Annual
Report on the Management of Canada's Official International Reserves
|
Annual
Reports, Corporate Plans, quarterly reporting
|
Public
Accounts
|
Frequency
|
Monthly
and Annual
|
Annual
|
Annual
|
Quarterly
and Annual
|
As
required
|
Target
|
Stable,
low-cost financing
|
Liquid
markets for Government of Canada securities
|
Portfolio
objectives attained
|
Minimize
risk-adjusted borrowing costs and ensure prudent and effective treasury
management
|
Efficient
coinage system
|
Target
Date
|
Ongoing
|
Ongoing
|
Ongoing
|
Ongoing
|
Ongoing
|
Performance measurement (continued)
Expected Results/
Performance
Measurement
|
6. A regulatory framework that promotes
the soundness, efficiency, and competitive-ness of Canada's financial sector
|
7. A sound legislative and regulatory framework for federally regulated defined benefit pension plans
|
8. Effective framework for investment of CPP funds
|
9. A world-class AML and ATF framework
|
10. Effective support for Canada's presidency of the FATF
|
Performance
Indicators
|
Policy,
legislative, or regulatory initiatives
|
Policy,
legislative, or regulatory initiatives
|
The CPPIB
investment performance
|
Policy,
legislative, or regulatory initiatives
|
Support
for Canada's FATF presidency
|
Data
Sources
|
Legislation,
regulations, and publications
|
Legislation
or regulations
|
CPPIB
reports
|
Legislation,
regulations, FATF mutual evaluation report
|
Press
releases or other communications for year of Canada's presidency
|
Frequency
|
Legislative
and regulatory amendments, as needed
|
Legislative
and regulatory amendments, as needed
|
Quarterly
|
Amendments
to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(PCMLTFA) and regulations, as needed Mutual evaluation roughly every five
years
|
As
required
|
Under this program activity, the Economic Development and Corporate Finance
Branch is responsible for the following:
- providing policy analysis and advice to the Minister on the
financial implications of the government's microeconomic policy and programs;
- providing proposals for funding of programs;
- developing sectoral and regional policy analysis; and
- advising on corporate restructuring regarding Crown corporations and
other corporate holdings.
To accomplish these tasks, the Branch is organized into the Microeconomic
Policy Analysis Division and the Sectoral Policy Analysis Division.
This program activity involves providing policy advice and analysis in the
areas of knowledge-based economy, defence, transportation, public
infrastructure, environment, energy and resources, agriculture, fisheries,
privatization, and Crown corporations.
At times, issues or files that do not fall directly under other Branch
portfolios are dealt with under this program activity. Current examples include
the New Deal for Cities and Communities and the Smart Regulation Initiative.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
8,006
|
7,953
|
8,016
|
Human Resources: FTEs
2006–07
|
2007–08
|
2008–09
|
70
|
72
|
72
|
Priorities
Priority 1: Sound fiscal management
Expected result
1. Thorough assessment of operating and capital funding related to
economic development and policy proposals
The Branch plans to attain the expected result through the following ongoing
activities.
Ongoing activities
- Assess operating and capital funding for key federal assets and
programs, including contributing to the annual climate change review, and the
efficient allocation of government resources toward national security
initiatives; outputs will include advice to the Minister to support his
participation in Cabinet committees and subcommittees to assist with the
preparation of the budget and economic updates; and
- Fulfill the central agency role of the Department by identifying
major policy issues and proposals under development in the economic departments.
Priority 2: Sustainable economic growth
Expected results
2. Sound advice to the Minister on economic proposals
The Branch plans to attain the expected result through the following ongoing
activity and key commitment.
Ongoing activity
- Provide weekly briefings to the Minister in preparation for
meetings of Cabinet and its committees, the annual budget, and fiscal updates,
as required.
Key commitment
- Provide advice on potential initiatives for budgets in 2006–07,
2007–08, and 2008–09 that implement the government's economic agenda in the
following areas:
- post-secondary education, research, and commercialization;
- support for private sector research and development;
- the Security and Prosperity Partnership of North America;
- improving the regulatory framework;
- world-class gateways;
- promoting energy efficiency and environmental sustainability; and
- strengthening the economic union through work under the Agreement
on Internal Trade.
3. Enhanced productivity and economic growth through other
governmental initiatives
Working in cooperation with central agencies and key line departments, the
Branch will achieve this result through the following ongoing activities and key
commitments.
Ongoing activities
- Consideration of government support for the Mackenzie Gas
Project;
- Ongoing examination of policy and program options related to
the renewal of key government infrastructure programs;
- Development of a made-in-Canada plan to address the issue of
greenhouse gas emissions; and
- Helping to shape regional development policies, sectoral policies
such as agriculture, fisheries, aerospace, and automotive, and policies related
to the New Deal for Cities and Communities.
Outputs will include policy analysis and recommendations for consideration by
the Minister before Cabinet committees and subcommittees and advice to the
Minister to assist the preparation of the budget and fall update.
Key commitment
- Develop new departmental sustainable development strategy for 2007–10.
4. Improved awareness of the requirements and departmental process
for conducting strategic environmental assessments
The Branch will continue to promote awareness throughout the Department of
the need to undertake strategic environmental assessments in accordance with the
2004 Cabinet Directive on the Environmental Assessment of Policy, Plan and
Program Proposals.
The Branch will achieve this result through the following key commitments.
Key commitments
- Request that the Canadian Environmental Assessment Agency
provide a briefing on strategic environmental assessment to the Department's
Sustainable Development Working Group, which would also be open to all officers;
- Provide a subsequent presentation to officials on the strategic
environmental assessment process tailored to the specific role and activities of
the Department; and
- Report to the Departmental Coordinating Committee on the state of
strategic environmental assessment implementation within the Department.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the four expected results under
this program activity.
Expected Results/Performance Measurement
|
1. Thorough assessment of operating and capital funding related to
economic development and policy proposals
|
2. Sound advice to the Minister on economic proposals
|
3. Enhanced productivity and economic growth through other governmental
initiatives
|
4. Improved awareness of the requirements and departmental process for
conducting strategic environmental assessments
|
Performance Indicators
|
Measures of sector-specific cost-effectiveness (e.g. greenhouse gas
reductions, profitability of the agriculture sector)
|
Implementation of microeconomic policy directions in the government's
economic agenda
|
Fiscally responsible plans to implement the initiatives listed above
|
The number of strategic environmental assessments conducted by the
Department will be tracked and monitored
|
Data Sources
|
Various
|
Budget and Economic Update
|
Budget and Economic Update
|
Departmental Inventory
|
Frequency
|
Annual
|
Annual
|
Annual
|
Annual
|
Target
|
Related to each sector
|
Announcement of measures that advance productivity and economic growth
|
Announcement of measures that advance productivity and economic growth
|
Maintain awareness of the departmental strategic environmental
assessment process
|
Target Date
|
Budgets and economic updates in
2006–07,
2007–08, and 2008–09
|
Budgets and economic updates in2006–07,
2007–08, and
2008–09
|
Ongoing, annual activities
|
Ongoing, annual activities
|
|
Under this program activity, the Federal-Provincial Relations and Social
Policy Branch has primary responsibility for providing analysis and advice to
the Minister of Finance on federal-provincial-territorial fiscal arrangements,
fiscal and economic relations, and Canadian social policies and programs, such
as health care, employment insurance, seniors' benefits, Aboriginal programs,
education programs, and cultural programs.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
17,229
|
12,222
|
12,319
|
Human Resources: FTEs
2006–07
|
2007–08
|
2008–09
|
115
|
102
|
103
|
Priorities
Priority 3: Sound social policy framework
The focus for the Branch for 2006–07 will be on the following:
- Restoring fiscal balance; and
- Contributing to the government's social policy priorities.
Expected results
1. Implementation of a new formula for Equalization
and Territorial Formula Financing (TFF)
Equalization and TFF are closely related programs, with the former providing
funding to certain provinces and the latter providing funding to the three
territories.
Since 1957–58, Equalization has been Canada's most important program for
reducing fiscal disparities among provincial governments. Equalization payments
enable provincial governments to provide their residents with public services
that are reasonably comparable to those in other provinces at reasonably
comparable levels of taxation. In 2005–06, $10.9 billion was provided to
recipient provinces and in 2006–07, more than $11.5 billion will be provided.
TFF is the main transfer program from the Government of Canada to the three
territorial governments. Although territorial governments have the authority to
raise revenues by taxation, rentals, and the sale of goods and services, a
significant portion of their financial resources comes from the federal
government through TFF. In 2005–06, $2 billion was provided to territories and
in 2006–07 $2.07 billion will be provided.
Both Equalization and TFF are typically renewed every five years to ensure
the integrity of the formulas upon which payments are based. Data sources and
methodologies are reviewed and improvements made where necessary. The most
recent renewal for Equalization, for the period from 2004–05 to 2008–09,
took place in May 2004. The last renewal for TFF, for the period from 1999–2000
to 2003–04, was in October 1998.
Following these renewals, discussions between the federal, provincial, and
territorial governments in 2004 led to the October 2004 announcement by the
Government of Canada of a new framework for Equalization and TFF.
An important element of the October 2004 announcement was the establishment
of an independent Expert Panel in March 2005 to review Equalization and TFF. The
Panel's mandate was to provide advice on how the legislated levels of
Equalization and TFF should be allocated annually among provinces and
territories. As part of its review, the Panel was, among other things, to:
- evaluate the established methodology for measuring fiscal
disparities among provinces and territories;
- examine alternative approaches (such as those based on
aggregate macroeconomic indicators or expenditure needs);
- review the evolution of fiscal disparities among provinces, and
the costs of providing services in the territories, to help governments and
citizens evaluate the overall level of support for Equalization and TFF; and
- advise on whether the Government of Canada should establish a
permanent independent body to advise it on the allocation of Equalization and
TFF within the framework of legislated levels.
The Expert Panel provided a report to the Minister in June 2006. The report
is available on the Panel's website at http://www.eqtff-pfft.ca/english/index.asp.
The Branch plans to attain the expected result through the following ongoing
activities and key commitments.
Ongoing activities
- Continue to update Equalization and TFF information; and
- Determine payment levels based on legislation.
Key commitments
- Review the recommendations of the Expert Panel;
- Develop advice on new allocation formulas for Equalization and
TFF;
- Undertake consultations with provinces and territories; and
- Prepare legislation and regulatory changes and coordinate with
provinces and territories.
2. Determination of the most appropriate
arrangements for post-secondary education and training
The government made a commitment in the 2006 budget to determine the most
appropriate arrangements for long-term funding commitments for post-secondary
education and training.
Key commitment
- Work with other branches of the Department, central agencies,
government departments, and external stakeholders to ensure timely decisions
with respect to, and implementation of, the commitment to determine funding in
the areas of post-secondary education and training.
3. Effective implementation of government social policy priorities
The Federal-Provincial Relations and Social Policy Branch is responsible
forthe provision of analysis and advice to the Minister of Finance on social
policy issues, including early learning and childcare, post-secondary education,
income security, justice and safety, health and wellness, culture, and
Aboriginal opportunities.
The Branch plans to attain the expected result through the following ongoing
activity and key commitment.
Ongoing activity
- Continue to advise the Minister and senior management on social
policy issues as they arise.
Key commitment
- Work with other branches of the Department, central agencies,
government departments and external stakeholders to ensure timely decisions with
respect to, and implementation of, initiatives and related funding in the areas
of social policy identified by the government as priorities.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the three expected results under
this program activity.
Expected Results/
Performance Measurement
|
1. Implementation of new formula for Equalization and TFF
|
2. Determine the most appropriate arrangements for post-secondary
education and training
|
3. Effective implementation of government social policy priorities
|
Performance Indicators
|
Research, analysis, and advice with respect to Equalization and TFF
Bring forward proposal on renewed programs
|
Bring forward proposal on renewed arrangements
|
Timely implementation of programs related to the government's social
policy priorities
|
Data Sources
|
Various
|
Various
|
Main and Supplementary Estimates for other departments
|
Frequency
|
Ongoing
|
Ongoing
|
Annual
|
Target
|
Timely and accurate research, analysis, and advice
|
Timely decisions with respect to, and implementation of, the commitment
to determine funding in the areas of post-secondary education and training
|
Timely rollout of initiatives and related funding of government social
policy priorities
|
Target Date
|
Ongoing
Proposals for renewal intended to be brought forward by the fall of
2006
|
Proposals for renewal intended to be brought forward by fall of 2006
|
Ongoing
|
|
Under this program activity, the International Trade and Finance Branch:
- Supports the Minister's participation in the G7, G8, and G20
and in international financial institutions;
- Conducts work related to international development assistance,
export finance, and international economic and financial relations;
- Maintains responsibility for the policy management of import
legislation (tariffs and trade remedies); and
- Provides analytical support and policy advice on international trade
and investment matters.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
15,997
|
15,900
|
16,025
|
Human Resources: FTEs
2006–07
|
2007–08
|
2008–09
|
123
|
126
|
128
|
Priorities
Priority 2: Sustainable economic growth
As a highly open economy in an increasingly globalized marketplace, Canada's
economic performance will continue to improve through more open trade and
investment flows and high standard multilateral, regional, and bilateral trade
and investment rules and agreements. Securing access for Canadian exports and
investors to key markets will enhance the competitiveness of domestic industries
and expand commercial opportunities for them.
Expected result
1. Stronger international trading system and more open markets
The Branch will work to improve Canada's overall economic performance through
a stronger international trading system and open markets to enhance
competitiveness of domestic industries and expand access for Canadian exports
and investment in major foreign markets.
The Branch plans to attain the expected result through the following ongoing
activities and key commitments.
Ongoing activities
- Enhance Canadian competitiveness through further progress on a
range of trade facilitation and border efficiency issues with the U.S.,
particularly through the trilateral Security and Prosperity Partnership of North
America;
- Provide support to improve international trade and investment
rules through ongoing negotiations;
- Support Canada's trade and investment interests through the
negotiation of bilateral and regional agreements, particularly in key emerging
markets in the Asia-Pacific, Japan, and India; and
- Manage Canada's import policy regime, tariffs, and trade
remedies with a view to enhancing the overall competitiveness of Canadian
manufacturers to compete in domestic and international markets.
Key commitments
- Pursue ongoing trade and investment agreements in partnership
with other government departments;
- Develop and implement initiatives, in partnership with other
government departments, to enhance access to U.S. markets (under the Security
and Prosperity Partnership initiative); and
- Use Canada's tariff regime as a vehicle to improve competitiveness.
Priority 4: Effective international presence
Expected result
2. Policy positions and proposals that improve prospects for global
economic and financial stability and better financial governance
As an open economy that benefits from a strong multilateral system of global
economic and financial governance, Canada has a strong interest in promoting
initiatives to strengthen the leadership of forums such as the G7 and G20, as
well as in ensuring the credibility and strength of organizations such as the
IMF and World Bank. Canada also has an interest in greater prosperity and
economic and social progress in developing economies.
The Branch plans to attain the expected result through the following ongoing
activities and key commitments.
Ongoing activities
- Continue to support the participation of the Minister and G7
Deputy in the G7, G8, G20, and other international forums, as well as in the
international financial institutions (IFI), by promoting Canadian policy
positions and working to strengthen global economic and financial outcomes;
- Promote Canadian policy positions at the IMF, World Bank, and
the EBRD to strengthen their effectiveness and ability to carry out their
respective mandates; and
- Provide guidance on the funding demands of other government
departments and agencies that are tasked primarily with an international mandate
by providing policy analysis and advice consistent with the government's fiscal
framework.
Key commitments
- Actively contribute to progress in the G7 and G20 finance
ministers' forums on IMF reform issues (including quota reform);
- Organize, host, and promote an important G20 seminar to develop
policy options for a G20 approach to natural resources issues of interest to G20
finance ministers and central banks;
- Maintain the network of finance counsellor positions abroad and
expand it with a new finance counsellor position in Beijing; and
- Work toward more effective implementation of the International
Assistance Envelope to ensure that resource allocation decisions reflect the
government's priorities.
3. Effective international initiatives to strengthen developing
economies
The Branch will contribute to international initiatives to improve outcomes
in the developing economies through effective use of international assistance,
debt relief, and other means and provide payments consistent with the
Department's commitments.
The Branch plans to attain the expected result through the following ongoing
activities and key commitments.
Ongoing activities
- Continue to represent Canada at the Paris Club and implement
multilateral debt rescheduling agreements; and
- Continue to support and provide timely advice to the Minister in
respecting Canadian financial assistance in response to international emergency
relief issues.
Key commitments
- Develop initiatives for more effective use of international
assistance and debt relief; and
- Develop and promote positions that will lead to effective
international disciplines on government support for trade finance.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the three expected results under
this program activity.
Expected Results/
Performance Measurement
|
1. Stronger international trading system and more open markets
|
2. Policy positions and proposals that improve prospects for global
economic and financial stability and better financial governance
|
3. Effective international initiatives to strengthen developing
economies
|
Performance Indicators
|
Progress will be measured through the results of various regional,
multilateral, and bilateral trade and investment negotiations and
initiatives
|
Policies adopted at the IFIs and promoted by the Finance Ministers'
forums
|
Progress will be measured through the results of various bilateral and
multilateral negotiations and initiatives
|
Data Sources
|
Policies and communiqués in international initiatives and negotiations
|
Communiqués and reports of Finance Ministers' forums and IFIs
|
Policies and communiqués in international initiatives and negotiations
|
Frequency
|
Ongoing
|
Periodic
|
Ongoing
|
Target
|
International meetings and negotiations
|
Multiple, depending on forum and issue
|
International meetings and negotiations
|
Target Date
|
Ongoing
|
Ongoing
|
Ongoing
|
|
Under this program activity, the Financial Sector Policy Branch is
responsible for managing the Government of Canada's debt program, including the
statutory funding of interest, the service costs of the public debt, and the
issuing costs of new borrowings.
In addition, the Canada Investment and Savings Agency, a special operating
agency of the Department, seeks to deliver a vibrant, creative, and
cost-effective retail debt program (RDP) that provides value to Canadians,
contributes to a diversified investor base, and ensures Canadians are aware of
and have easy access to Government of Canada securities.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
34,395,000
|
34,760,000
|
34,585,000
|
Human Resources: FTEs
2006–07
|
2007–08
|
2008–09
|
57
|
57
|
57
|
Priorities
Priority 1: Sound fiscal management
Debt service is the largest spending program of the federal government. The
prudent and effective management of the government's debt continues to be an
important element of the Department's strategy for sound fiscal management. The
focus for 2006–07 will be on reviewing and evaluating the effectiveness of
debt management and treasury management frameworks and programs. The Department
also will work to implement changes to the retail debt program to enhance
cost-effectiveness.
Expected results
1. Stable, low-cost financing for the Government of Canada
The government's operational needs are met through borrowing from capital
markets. The government's debt structure (the mix of fixed- and floating-rate
debt) is managed to ensure that debt costs are kept low and stable over time.
The Branch plans to attain the expected result through the following ongoing
activities and key commitments.
Ongoing activities
- Plan and conduct, in collaboration with the Bank of Canada,
debt and cash management operations to meet operational needs; and
- Periodically review funds management frameworks, targets, and
programs to ensure the soundness of governance regimes and the effectiveness of
the management of financial cost and risk.
Key commitment
- Adjust bond and bond buyback programs to continue progress toward
the debt structure target of 60-per-cent fixed-rate debt announced in 2003.
Risks and mitigation plans
Changes to the government's fiscal needs pose strategic and operational
challenges for debt and cash management, which are carried out through the
maintenance of diversified, flexible borrowing programs. Operational risks are
addressed through business continuity planning.
2. A well-functioning market in Government of Canada securities
A well-functioning wholesale market in Government of Canada securities
benefits the government and a wide range of market participants. For the
government as a debt issuer, a well-functioning market attracts investors and
ensures that funding costs are kept low. For market participants, a liquid and
active secondary market in government debt provides credit risk-free assets for
investment portfolios, a pricing benchmark for other instruments, and a primary
tool for hedging risk.
The Branch plans to attain the expected result through the following
initiatives.
Ongoing activities
- Design and implement Government of Canada debt programs to
provide liquidity, transparency, and regularity; and
- Consult regularly with market participants to identify adjustments
to debt programs to maintain well-functioning markets in Government of Canada
securities.
Risks and mitigation plans
Failure to maintain a well-functioning market can affect both the government
and market participants. Risks are managed through the maintenance of strict
auction participation rules, flexibility to adjust issuance, and active market
surveillance.
3. A cost-effective retail debt program
The Canada Investment and Savings Agency plans to attain the expected result
through the following ongoing activities and key commitment.
Ongoing activities
- Improve overall program efficiencies while reducing costs
through careful investment and streamlined administration;
- Work to ensure that Canada Savings Bonds remain relevant to
Canadians; and
- Balance efforts on sales and retention;
Key commitment
- In 2006–07, within the non-certificated payroll program, expand
use of electronics, and leverage back-office system improvements.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the three expected results under
this program activity.
Expected Results/Performance Measurement
|
1. Stable low-cost financing for the Government of Canada
|
2. A well-functioning market in Government of Canada securities
|
3. A cost-effective RDP
|
Performance Indicators
|
Measures of operational performance (e.g. interest costs,
fixed-floating shares of debt, average term to maturity)
|
Measures of market performance (e.g. turnover, trading spreads)
|
RDP budget of $105,045K
|
Data Sources
|
Fiscal Monitor, Debt Management Report
|
Debt Management Report
|
RDP Expenditures
|
Frequency
|
Monthly and annual
|
Annual
|
Annual
|
Target
|
Stable low-cost financing
|
Liquid markets for Government of Canada Securities
|
Manage the RDP within the budget of $105,045K
|
Target Date
|
Ongoing
|
Ongoing
|
March 31, 2007
|
|
Under this program activity, the Financial Sector Policy Branch is
responsible for the payment of the production and distribution costs for
domestic circulating coinage.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
83,100
|
80,700
|
49,000
|
Priorities
Priority 1: Sound fiscal management
The Department of Finance Canada buys coinage from the Royal Canadian Mint
and resells it to financial institutions. The overriding objective is to ensure
that the supply of circulating coinage meets the needs of the economy.
Expected result
1. A supply of coinage at a reasonable cost
The Branch will work to achieve the expected result through the following
ongoing activity and key commitment.
Ongoing activity
- The payment of Mint production and distribution costs for domestic
circulating coinage.
Key commitment
- Implement a new coin production agreement with the Mint containing
terms and business arrangements that promote efficiency and reduce costs to the
government.
Risk and mitigation plans
Market prices of metals used in coinage production are subject to
considerable variation. A new agreement with the Mint will transfer most of the
risk involved in coinage production to the Mint.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the expected result under this
program activity.
Expected Results/
Performance Measurement
|
1. A supply of coinage at a reasonable cost
|
Performance Indicators
|
Regular audit of payments to the Mint for domestic coinage supply and
distribution
|
Data Sources
|
Public accounts
|
Frequency
|
As required
|
Target
|
Efficient coinage system
|
Target Date
|
Ongoing
|
|
Under this program activity, the Federal-Provincial Relations and Social
Policy Branch is primarily responsible for the administration of the major
transfer payments to provinces and territories.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
38,631,828
|
40,095,000
|
41,940,000
|
Priorities
Priority 3: Sound social policy framework
Payments made under the various transfer programs are an important source of
revenue for provincial and territorial governments. In 2006–07, an estimated
$38.8 billion in cash payments will be provided to the provinces and
territories.
Transfer payments take the form of either cash transfers or tax transfers.
Cash transfers are provided as either cash payments to provincial or territorial
finance departments and treasuries or payments to trust funds on behalf of
provinces and territories. As well, the value of the tax transfers provided to
provinces and territories in lieu of cash payments in the 1960s and 1970s is
measured annually since these transfers affect the allocation of cash transfers.
Acts and regulations govern the programs, and the Office of the Auditor General
of Canada audits the payments each year.
The Department administers the following programs: the Equalization program
and the TFF, the CHT, the CST, Alternative Payments for Standing Programs, the
Youth Allowances Recovery program, and statutory subsidies. In addition,
prior-year payments or recoveries for the former Canada Health and Social
Transfer (CHST) and the former Health Reform Transfer continue to be calculated.
The February 2005 Arrangement between the Government of Canada and the
Government of Newfoundland and Labrador on Offshore Revenues and the February
2005 Arrangement between the Government of Canada and the Government of Nova
Scotia on Offshore Revenues are administered by the Department, while Natural
Resources Canada continues to administer Offset Payments to Newfoundland and
Labrador under the Canada-Newfoundland Atlantic Accord Implementation Act.
Expected result
1. Financial support for Canadian provinces and territories to assist
them in providing public services, universally accessible health care services,
post-secondary education, and social assistance
The Branch plans to attain the expected result through the following ongoing
activities and key commitment.
Ongoing activities
- Administration of the transfer programs, including calculation
of entitlements, provision of payments, provision of information for Government
of Canada reports, and provision of information to federal auditors—information
concerning entitlements is provided to provincial and territorial officials,
including auditors;
- Administration of various trust funds, including the five trust
funds totalling $3.3 billion that were established in March 2006 using the
authority of Bill C-48 (pending: contingent on the surplus for 2005–06), the
$4.25-billion Wait Times Reduction Transfer Trust announced in September 2004,
and the $120-million Northern Strategy Trust Fund announced in Budget 2005; and
- Administration of several important loans and deferral arrangements
currently in place, including the Equalization Repayable Floor loan, deferral of
the effects of Census 2001 and 2002 taxation data (Equalization and CHST), and
deferral of the effect of the new residential net capital stock data
(Equalization) on Quebec.
Key commitment
- Implementation of new formulas for Equalization and TFF will be
required. These formulas will be developed following consultations with
provinces and territories. The report of the Expert Panel on Equalization and
TFF, tabled in June 2006, and other recent reports on fiscal federalism,
including the report of the Council of the Federation Advisory Panel on Fiscal
Imbalance, will be important inputs for these consultations.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the expected result under this
program activity.
Expected Result/Performance Measurement
|
1. Financial support for Canadian provinces and territories to assist
them in providing public services, universally accessible health care
services, post-secondary education, and social assistance
|
Performance Indicators
|
Timely and accurate administration of transfer payments
|
Data Sources
|
Public Accounts of Canada
|
Frequency
|
Annual
|
Target
|
Payments must be made according to levels and formulas set out in
legislation
|
Target Date
|
Fiscal year-end
|
|
Under this program activity, the International Trade and Finance Branch is
responsible for the effective administration of Canada's international
commitments associated with Paris Club debt rescheduling agreements and
financial assistance to the International Development Association, the IMF, and
the EBRD.
Financial Resources: ($ thousands)
2006–07
|
2007–08
|
2008–09
|
733,340
|
417,005
|
511,967
|
Priorities
Priority 4: Effective international presence
Expected result
1. Payments to international organizations and Canadian creditors
consistent with the Department's commitments
The Branch will contribute to international initiatives to improve outcomes
in the developing economies through effective use of international assistance,
debt relief, and other means and provide payments consistent with the
Department's commitments.
The Branch plans to attain the expected result through the following ongoing
activity and key commitments.
Ongoing activity
- Provide timely payments, as required, to a wide range of
international financial organizations and Canadian creditors, consistent with
the Department's commitments. Such payments play an important role in mobilizing
resources for poverty reduction in low-income and least-developed countries.
Key commitment
- Ensure timely payments, as required, to a wide range of
international financial organizations.
Performance measurement
The Department plans to apply the following performance measurement approach
in monitoring and measuring performance against the expected result under this
program activity.
Expected Results/Performance Measurement
|
1. Payments to international organizations and Canadian creditors
consistent with the Department's commitments
|
Performance Indicators
|
Timely payments
|
Data Sources
|
Department's financial reporting system
|
Frequency
|
Periodic payments
|
Target
|
Payments made according to a predetermined schedule or within 30 days
of the invoice being received
|
Target Date
|
Ongoing
|
|
|