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ACCOUNTABILITY
STATEMENT
This Business Plan
for the three years commencing April 1, 2004 was prepared under
my direction in accordance with the Government Accountability
Act and the government’s accounting policies. All of the government’s
policy decisions as at Februay 27, 2004 with material economic or
fiscal implications of which I am aware have been considered in
preparing the Business Plan.
The Ministry’s priorities
outlined in the Business Plan were developed in the context of the
government’s business and fiscal plans. I am committed to achieving
the planned results laid out in this Business Plan.
[original
signed]
Greg Melchin, Minister
of Revenue
March 2, 2004
the
ministry
The
Ministry of Revenue includes the Department of Revenue, Alberta
Securities Commission, a provincial corporation and the following
five regulated funds: Alberta Heritage Savings Trust Fund, Alberta
Heritage Foundation for Medical Research Endowment Fund, Alberta
Heritage Scholarship Fund, Alberta Heritage Science and Engineering
Research Endowment Fund and Alberta Risk Management Fund.
The Department
has five main areas: Tax and Revenue Administration, Investment
Management, Risk Management, Investment Administration, and Policy
and Strategic Planning. The Alberta Securities Commission is the
regulatory agency responsible for overseeing the capital market
in Alberta.
Revenue is responsible
for managing the investments of the Province of Alberta, developing
tax and revenue policy within the province, administering tax programs
and minimizing the risk of loss of public assets.
LINK
TO THE GOVERNMENT STRATEGIC BUSINESS PLAN
The
following table identifies where the Ministry Business Plan supports
the Goals and Opportunities of the Government of Alberta Strategic
Business Plan.
VISION
A
province where government revenue policy and administration reflect
the values of Albertans, balance present and future needs, and contribute
to a stable environment for the generation of wealth for all Albertans.
MISSION
To
provide prudent and innovative revenue, investment and risk management
and to regulate and foster capital markets in Alberta.
CORE
BUSINESSES
Core
Business 1: Long-term Revenue and Investment Policy
Goal
1 - A revenue structure that meets Alberta's needs and is consistent
with Albertans’ values
Goal 2 - Investment policies that will provide the greatest financial
returns for current and future generations of Albertans
Core
Business 2: Manage Revenue Programs
Goal
3 - Revenues due to the province are collected fairly, efficiently
and effectively
Goal 4 - Excellence in client service
Core
Business 3: Manage and Invest Financial Assets
Goal
5 - Superior investment returns subject to client-defined objectives
and policies
Goal 6 - Excellence in client service
Goal 7 - An
effective investment management organization
Core
Business 4: Manage Risk Associated with Liability Exposure and Loss
of Public Assets
Goal
8 - Proactively managed risk
Core
Business 5: Regulate and Foster Alberta's Capital Market
Goal
9 - An effective, efficient and streamlined securities regulatory
system
SIGNIFICANT
OPPORTUNITIES AND CHALLENGES
Volatile
capital markets have a direct impact on the income of government
investment funds. If markets are weak for extended periods the solvency
of pension plans can be affected over the long term, and endowment
funds must review their expenditure plans for sustainability.
Economic conditions
can also impact the growth and volatility of tax and other revenue
sources, so revenue needs must be managed. In addition, non-compliance
by taxpayers can lead to revenue loss.
In managing
liability exposure and the risk of loss of public assets, the Ministry
must balance its mix of insurance and self-insurance, and the costs
and risks the government must bear in executing this responsibility.
The Ministry
faces challenges in regulating and fostering Alberta's capital market.
Investor protection has to be balanced with the ability of firms
to raise capital. It is also necessary to guard against unnecessary
duplication of regulation to ensure capital formation in Canada
is not adversely affected, while preserving the ability to respond
to regional needs.
STRATEGIC
PRIORITIES 2004-07
Through
the Ministry’s review of external and internal challenges,
the strategic priorities described below have been identified. These
are in addition to the important ongoing core activities of the
Ministry.
| 1.
Revenue Management Framework
Linkage: Goal 1
|
Continue
development of a revenue management framework to contribute
to sound strategic decision-making about Alberta's long-term
revenue structure and policy. |
| 2.
Endowment Fund
Linkage: Goals 1 and 2
|
Strengthen
the Alberta Heritage Savings Trust Fund and other government
endowment funds. |
| 3.
Investment Organization
Linkage: Goals 5, 6 and 7
|
Develop
Alberta Investment Management to better meet the needs of investment
clients including government endowment funds and public sector
pension funds. |
| 4.
Securities Regulation
Linkage: Goals 9 and 10
|
Lead
and actively promote the development and implementation of an
efficient and cost-effective interprovincial system of securities
regulation. |
| 5.
Tax Administration
Linkage: Goals 3 and 4
|
Identify
and address program areas where there is high risk of non-compliance. |
CORE
BUSINESSES, GOALS, STRATEGIES AND MEASURES
CORE
BUSINESS ONE: Long-Term Revenue and Investment Policy
GOAL
1: A revenue structure that meets Alberta's needs and is consistent
with Albertans' values
What
it means
The
Government needs to ensure that its revenue structure maximizes
productivity and wealth generation, while providing adequate funds
for the services that Albertans expect. Through a revenue management
framework, revenue and investment policies will be designed to maximize
productivity and wealth generation while preserving and enhancing
the quality of life for Albertans. In exercising its leadership
role for this initiative, Revenue will continue to monitor Alberta's
revenue competitiveness in a national and international context.
The department will also work with stakeholders to review revenue
policy issues on an ongoing basis.
Strategies
- Develop
and maintain a revenue management framework including long-term
revenue projections and analysis of Alberta's revenue sources.
- Work
with other ministries to develop and implement long-term revenue
strategies.
- Strengthen
the Alberta Heritage Savings Trust Fund and other endowment funds.
- Monitor
Alberta's revenue competitiveness in a national and international
context.
- As
affordable, complete implementation of the Business Tax Plan to
reduce the general corporate income tax rate from 11.5% to 8%.
Performance
Measures
GOAL
2: Investment policies that will provide the greatest financial
returns for current and future generations of Albertans
What
it means
Prudent
approaches to savings, including appropriate distributions of income,
are an important aspect of a sustainable future. Investment policies,
such as how much to invest in equities versus bonds, are the major
determinants of an investment fund's performance over time. Alberta
Revenue is responsible for the investment policies of the Alberta
Heritage Savings Trust Fund, and other government endowment funds.
Strategies
- As affordable,
ensure that the Alberta Heritage Savings Trust Fund grows with
inflation over time.
- Work with
other ministries and foundations on spending rules for other endowment
funds.
- Develop and
implement a rigorous analytical framework for determining asset
allocation policies.
- Develop a
framework to diversify risk and enhance expected returns of the
Heritage Fund and other endowment funds.
Performance
Measures
CORE
BUSINESS TWO: Manage Revenue Programs
GOAL
3: Revenues due to the province are collected fairly, efficiently
and effectively
What
it means
The Department of
Revenue through the Tax and Revenue Administration Division (TRA)
collects revenue owing to the Province, administers provincial tax
laws, makes payments of refunds and rebates and provides information
to stakeholders, taxpayers and claimants. Collecting revenues fairly
means that all taxpayers and claimants are treated with respect;
efficiently means that the Department of Revenue provides excellent
value for money spent; and effectively means that revenue losses
due to tax evasion are minimized. As part of its responsibilities,
TRA provides expertise to other ministries on initiatives with revenue
implications. The department also provides support to taxpayers
to ensure returns are submitted accurately the first time.
Strategies
- Implement
tax changes included in Alberta's tax plan.
- Identify
and address program areas where there is high risk of non-compliance.
Performance
Measures
GOAL
4 : Excellence
in client service
What
it means
Albertans
expect top-notch service from the tax administration. Excellence
in client service means understanding and then meeting or exceeding
client expectations. It is important that clients are satisfied
with our administration of tax and rebate programs and are able
to provide feedback on areas where improvements can be made.
Strategies
- Implement
e-business solutions to improve client service.
- Consult
with Albertans through surveys and meetings to determine service
expectations.
- Work with
Canada Customs and Revenue Agency and provinces to harmonize
tax programs and processes.
Performance
Measures
CORE
BUSINESS THREE: Manage and Invest Financial Assets
GOAL
5: Superior investment returns subject to client-defined objectives
and policies
What
it means
Once clients
have determined investment policies, Alberta Investment Management
can enhance returns relative to the returns that would be earned
on a passively invested portfolio (e.g. Canadian equities invested
in the S&P/TSX index).
Strategies
- Develop
innovative strategies to enhance investment product returns.
- Develop
the capability, and innovative strategies, to enhance returns
at the total fund level.
- Implement
an improved risk management framework.
- Develop
techniques to implement tactical market decisions quickly.
Performance
Measures
GOAL
6: Excellence in client service
What
it means
Driven by
a client focus, Alberta Investment Management strives to be innovative
and to exceed expectations. Investment clients are asked to provide
their input to long-term plans and to identify new business opportunities.
Alberta Investment Management will continue to provide strategic
support to help clients set investment objectives, policies and
risk guidelines.
Strategies
- Improve
timeliness and quality of market intelligence and client-related
research.
- Improve
information delivery mechanisms to be more timely and flexible,
such as electronic service delivery.
Performance
Measures
GOAL
7: An effective investment management organization
What
it means
Alberta
Investment Management strives to be among the best public sector
investment organizations. By enhancing processes and utilizing industry
best practices, Alberta Investment Management provides a value added
and cost-effective investment service for clients.
Strategies
- Improve
the technology platform including enhancing data integration,
risk measurement and implementing a straight through processing
environment to keep pace with evolving industry standards.
- Strengthen
the governance of the investment organization.
Performance
Measures
CORE
BUSINESS FOUR: Manage
Risk Associated with Liability Exposure and Loss of Public Assets
GOAL
8: Proactively managed risk
What
it means
The
Risk Management and Insurance Division (RMI) administers a program
to protect, secure and preserve public assets against risk of significant
accidental loss. RMI provides services to ministries to help them
identify, measure, control and finance their risk. The program serves
all entities subject to the Financial Administration Act. RMI also
administers a program of self-insurance and purchased insurance.
Strategies
- Work with
Justice and other ministries on innovative strategies to resolve
claims against the Crown.
- Assist
Finance in the development of an enterprise risk management
framework.
- Advise
on risk allocation with private sector partners.
- Implement
new technology to improve claims management.
Performance
Measures
CORE
BUSINESS FIVE: Regulate and Foster Alberta's Capital Market
GOAL
9: An effective, efficient and streamlined securities regulatory
system
What
it means
An effective,
efficient and streamlined securities regulatory framework is key
to a strong and vibrant economy. It assists in the development of
strong national and local capital markets and promotes the interests
of both issuers seeking capital and investors providing that capital
through their investment dollars.
Strategies
- Lead and
actively promote the development and implementation of an efficient
and cost effective interprovincial system of securities regulation.
- Lead the
development of highly harmonized securities legislation that
could be adopted across Canada.
- Ensure
that market regulation meets the specific needs of Alberta firms
and investors.
- Work with
other ministries to develop strategies to increase opportunities
for Alberta firms and investors.
Performance
Measures
EXPENSE
BY CORE BUSINESS
MINISTRY
STATEMENT OF OPERATIONS 
CONSOLIDATED
NET OPERATING RESULT
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