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SECTION 1 – OVERVIEW

1.1       The Minister’s Message

The North American Free Trade Agreement (NAFTA) – now in its 14th year – stands as a clear example of success for all three North American partners. In today’s fiercely competitive global landscape, the NAFTA has contributed to sharpen the competitive advantages of businesses, and to the creation of wealth and increased the prosperity of our citizens. 

Under the NAFTA, Canada’s annual merchandise trade with its NAFTA partners has nearly doubled since 1994, reaching $597.2 billion in 2006.  Trade in services has nearly doubled as well (from $46.4 billion in 1994 to $82.7 billion in 2004). There has also been a positive impact on investment.  Total foreign direct investment in Canada reached $448.9 billion in 2006, of which more than 61% came from our NAFTA partners. This enhanced economic activity and production has contributed to the creation of more and better paying jobs for Canadians. 

In the past decade the global business and trade environment has become increasingly complex and competitive, particularly fuelled by the rapidly changing patterns of global value chains and the rise of new and rapidly growing markets. We have to work even more closely together with our North American partners to maximize North American competitiveness and take full advantage of this new environment.

When I met with my NAFTA counterparts on August 14, 2007, we committed to increase market efficiencies, economic growth, prosperity and innovation in all three countries for the benefit of our citizens. We agreed to: develop a work plan which will address the key issues that impact our trade and identify the most effective means to further enhance it; facilitate trade in specific sectors in order to foster stronger more competitive North American value chains; and, conduct an analysis of the free trade agreements that each country has negotiated subsequent to the NAFTA, beginning with those in the western hemisphere.

In 2006-2007, the Canadian Section of the NAFTA Secretariat focussed its efforts on the improvement of its management frameworks, and responding to client’s needs and employee’s learning and development. Significant progress was achieved in these areas by becoming ISO 9001:2000 quality management system certified and by introducing a new Policy on Talent Management.  I encourage the Canadian Section of the NAFTA Secretariat to continue its high level of service in the effective, unbiased and equitable administration of the dispute settlement mechanisms of the NAFTA.

 

 

____________________________________
The Honourable David Emerson
Minister of International Trade

 

1.2       Management Representation Statement

I submit for tabling in Parliament, the 2006-2007 Departmental Performance Report (DPR) for the NAFTA Secretariat, Canadian Section.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part;III of the 2006-2007 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

  • It adheres to the specific reporting requirements outlined in the Treasury Board Secretariat guidance;

  • It is based on the department’s approved Strategic Outcome and Program Activity Architecture structure that was approved by the Treasury Board;

  • It presents consistent, comprehensive, balanced and reliable information;

  • It provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and

  • It reports finances based on approved numbers from the Estimates and the Public Accounts of Canada.




__________________________________________
Françoy Raynauld, Ph.D.
Secretary
NAFTA Secretariat, Canadian Section



_______________________________
Date

1.3       Summary Information

This report demonstrates the Canadian Section’s commitment to sound management practices in the administration of international trade dispute resolution mechanisms. The report emulates the four principles for public reporting set by Treasury Board of Canada Secretariat (TBS). These principles require departments and agencies to:

  • focus on the benefits for Canadians, explain the critical aspects of planning and performance, and set them in context;
  • present credible, reliable, and balanced information;
  • associate performance with plans, priorities, and expected results, explain changes, and apply lessons learned; and
  • link resources to results.

The report begins by briefly describing the purpose of the NAFTA Secretariat, Canadian Section, followed by operating environment, key co-delivery organizations, risks and challenges as well as human and financial resources. Then the report summarizes the Canadian Section’s strategic outcome and performance results for the period under review, including financial performance.  The final section provides organizational information on who we are and what we do.

 1.3.1       Mandate

The NAFTA Secretariat, Canadian Section is an independent agency created in 1994 by an Act of Parliament (the North American Free Trade Agreement Implementation Act). The mandate of the NAFTA Secretariat is to administer the trade dispute resolution mechanisms (see ANNEX A for the mandate of the NAFTA Secretariat).

1.3.2      Operating Framework

The Canadian Section of the NAFTA Secretariat is funded by Parliament through a program expenditures vote.  It operates within the context of Canada’s international trade framework.  

The Canadian Section reports to Parliament, for financial accountability purposes, through the Minister of International Trade (see Section 3.7 – Responsibility Chart).

For more details on the operating context, see the NAFTA Secretariat website at http://www.nafta-sec-alena.org and the Canadian Section website at http://www.nafta-sec-alena.org/canada/index_e.aspx.

 1.3.3      Key Co-Delivery Organizations

The NAFTA Secretariat comprises the Canadian, the United States and the Mexican national sections. Pursuant to Article 1908 of the NAFTA, the involved national sections are required to “act jointly in providing administrative assistance to all panels and committees”.  In light of this, the Canadian Section’s relationship with its counterpart sections in the United States and Mexico is fundamental to its effective performance.

Additionally, the NAFTA Secretariat, Canadian Section is one of many Canadian and NAFTA country organizations involved in international trade matters.  While it operates at arm’s length from other federal and provincial government institutions, it can only succeed in fulfilling its strategic outcome by working with them. Therefore, in fulfillment of its mandate, the NAFTA Secretariat interacts directly with:

  • Foreign Affairs and International Trade Canada;
  • Canada Border Services Agency;
  • Canadian International Trade Tribunal;
  • roster members (list of international trade law experts established by the NAFTA governments to serve as panelists in disputes);
  • panelists (adjudicators of these disputes chosen on a case by case basis by the involved governments);
  • counsel for participants in the disputes, including counsel for investigating authorities (government agencies whose decisions are reviewed by binational panels);
  • representatives of the NAFTA country governments;
  • university academics; and
  • the general public.

Furthermore, the Canadian Section has established memorandums of understanding with other federal government departments for the provision of human resources support services, financial systems, various back-up services and the administration of Public Servants Disclosure Protection Act. Such agreements are currently in place, among others, with Public Works and Government Services Canada, Health Canada, the Military Police Complaint Commission and the Competition Tribunal.

1.3.4      Risks and Challenges

The followings are key environmental factors that could affect the planning and priority setting of the NAFTA Secretariat, Canadian Section: 

1.3.4.1       Tripartite Nature of the NAFTA Secretariat

The NAFTA Secretariat operates in a social context where different legal, linguistic, business and cultural traditions prevail.  Managing the Canadian participation in this tripartite organization must be conducted within the policies and practices of the Canadian Government and also be harmonized with administrative practices of its two partners in the United States and Mexico.  New initiatives (for instance, Government on-Line) often require extensive consultations and negotiation before they can be implemented, as the three sections of the NAFTA Secretariat must give their concurrence.

1.3.4.2       Maintaining Organizational Capability

The success of the NAFTA Secretariat and its credibility as an independent tribunal depend largely on the expertise, professionalism and competence of its employees.  In recent years, we have introduced essential training for employees and managers to ensure they have the knowledge and skills to meet evolving mandatory job requirements, as services offered to our stakeholders increase.  However, as there are few lateral or higher career opportunities within the Secretariat, the retention of key personnel remains a challenge.   

1.3.5      Financial and Human Resources

1.4       Summary of Departmental Performance

In its 2006-2007 Report on Plans and Priorities (RPP), the NAFTA Secretariat, Canadian Section identified six priorities, which were aimed at finding and improving ways to enhance its service delivery (see Sections 2.3.1 to 2.3.6 below).  Overall, substantial progress was achieved against all priorities and with respect to project planning and resource allocation.  Table 1 provides a quick overview of the results achieved during the year under review.

1.5       What the Priorities Mean for Canadians

Canada’s economic growth and prosperity are inextricably linked to access to the NAFTA countries and other markets. As a result, Canadian foreign policy underscores the rules-based international trade dispute settlement systems as a critical part of its trade policy and trade relations.  The NAFTA Secretariat administers relevant international trade dispute processes based on clear and equitable rules.  Therefore, the program activity of the NAFTA Secretariat serves a public interest by providing a timely, unbiased and inexpensive administration of trade dispute resolution processes. Hence, Canadian exporters, importers, producers and investors in goods and service industries directly benefit from a fairer and more predictable operating environment.