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Section I – Overview

The Right Honourable Stephen Harper, Prime Minister of CanadaPrime Minister's Message

The Privy Council Office (PCO) occupies a unique role in Canada’s Public Service. It provides high-quality, non-partisan, professional advice to the Prime Minister and portfolio ministers, ensures the smooth and effective functioning of the government’s day-to-day operations, supports the Cabinet system and leads Public Service Renewal.

Over the past year, the employees of the Privy Council Office have provided significant advice and support in the development and implementation of the Government’s agenda, including our five key priorities as well as Advantage Canada, a long-term plan to help Canadians build a strong economy, Budget 2007, the environment and democratic reform. PCO employees also provided secretariat support and advice for Cabinet committees, including the new Environment and Energy Security Committee, as well as for the management of significant parliamentary issues and high-level international meetings and delegations.

In presenting the 2006-2007 Departmental Performance Report for the Privy Council Office, I provide you with a summary of the achievements of the Privy Council Office in meeting its objectives, as outlined in the 2006-2007 Report on Plans and Priorities. I am also pleased to present the 2006-2007 Departmental Performance Report for the Public Appointments Commission Secretariat, included in this report.

As I report on the ongoing accomplishments of the Privy Council Office and the Public Appointments Commission Secretariat, I would like to thank all the employees who have consistently demonstrated a high level of professionalism and expertise to support Canada’s New Government and all Canadians.

Management Representation Statement

I submit, for tabling in Parliament, the 2006-2007 Departmental Performance Report (DPR) for the Privy Council Office.

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 TBS guidance;
  • it is based on the Department’s approved Program Activity Architecture structure as reflected in its Management, Resources, and Results Structure (MRRS);
  • 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.

Kevin G. Lynch
Clerk of the Privy Council and
Secretary to the Cabinet

Summary Information

Raison d'être

The mandate of the Privy Council Office (PCO) is as follows:


To serve Canada and Canadians by providing the best professional, non-partisan advice and support to the Prime Minister, the ministers within the Prime Minister’s portfolio, and the Cabinet. PCO supports the development of the Government’s policy agenda; coordinates responses to issues facing the Government and the country; and supports the effective operation of Cabinet. As the Head of the Public Service, the Clerk of the Privy Council and Secretary to the Cabinet serves as the principal link between the Prime Minister and the Public Service.

PCO contributes significantly to the implementation of a clearly articulated agenda of Government policy, coordinates timely responses to issues facing the Government and the country, and supports the effective operation of the Cabinet and the government. PCO works to maintain the highest professional and ethical standards in the federal Public Service and to ensure that the Prime Minister and ministers within the Prime Minister’s portfolio receive the best quality, consistent, appropriate and non-partisan policy advice and objective recommendations.

The main roles of PCO are to:

  • provide professional, non-partisan advice to the Prime Minister and other ministers in the Prime Minister’s portfolio, and to Cabinet, on questions of national, intergovernmental and international importance;
  • manage the Cabinet’s decision-making system by challenging and coordinating departmental policy, legislative and communications proposals, conducting policy and communications analysis, and providing secretariat services to the Cabinet and Cabinet committees;
  • provide advice on the appropriate structure and organization of the government and its entities;
  • advance the development of the Government’s agenda across federal departments and agencies and with external stakeholders;
  • help foster a high performing and accountable Public Service for the 21st century;
  • manage the appointment process for senior positions in federal departments, Crown corporations and agencies; and
  • provide administrative support to the Prime Minister’s Office, ministers’ offices within the Prime Minister’s portfolio, commissions of inquiry, task forces and other independent bodies considering matters associated with good governance in Canada.

Resource Summary

PCO is funded through appropriation and statutory votes. Therefore, at year end, any unspent funding lapses and all its revenues (since PCO does not have authority to spend revenues) are reported under the Consolidated Revenue Fund.

Financial Resources (thousands of dollars)


Planned Spending Total Authorities Actual Spending
129,296 148,359 135,561

Human Resources (full-time equivalents)


Planned Authorities Actual
916 945 904

The 2006-2007 Departmental Performance Report (DPR) and financial statements were prepared based on Treasury Board Secretariat reporting requirements for Program Activity Architecture (PAA) and reflect the Management, Resources and Results Structure (MRRS) for PCO. As a result, in the 2006-2007 DPR and financial statements, charges for Corporate Services activities have been distributed among Program Activities. Moreover, services received without charge from other departments have been distributed among Program Activities in the 2006-2007 financial statements only.

Strategic Outcome for 2006-2007


Toward effective government policies and operations, the Privy Council Office ensures that decision making by the Prime Minister and Cabinet is well supported and the institutions of executive government are well supported and maintained.

Overall Departmental Performance

PCO focused on four priorities over the course of the year:

  • Support the Prime Minister in exercising his overall leadership responsibility
  • Improve the management and accountability of government
  • Focus on key policy areas and strengthen medium-term policy planning
  • Strengthen PCO’s internal management practices

PCO supported the Prime Minister in exercising his overall leadership responsibility in a number of key areas, most notably by providing policy and legal advice on the structure and organization of Cabinet, Cabinet committees and Cabinet decision making, including the changes to the Ministry in January 2007; on the creation of a new Cabinet committee; and on the structure and organization of government entities (e.g. the Mental Health Commission, a federal ombudsman for victims of crime and a veterans’ ombudsman). PCO developed and implemented the Government’s democratic reform agenda, worked on the further refinement of the Governor in-Council appointment process, and coordinated the Government of Canada’s security and intelligence activities to support the Prime Minister in his responsibility for the security of Canada and Canadians. PCO support also extended to providing advice and support to the Prime Minister regarding honours and medals, such as United Nations and NATO medals for service performed abroad.

PCO contributed to the improvement of the management and accountability of government by providing the Prime Minister with advice and support in developing and implementing one of the Government’s top priorities, the Federal Accountability Act. This included policy and legal advice on provisions relating to conflict of interest, the appointment of agents of Parliament, ministerial exempt staff, whistleblower elements, elections returning officers, and the Public Appointments Commission as well as guidance for the newly created position of Accounting Officer. PCO also provided the Prime Minister with advice and support on the expected conduct of ministers, secretaries of state and parliamentary secretaries.

Over the course of the year, PCO continued to provide support for key policy areas through its involvement with a multitude of other government and non-governmental organizations on a wide variety of issues that were a high priority for the Government. PCO particularly focused on supporting the Government in the implementation of its five key priorities for Canada. Key aspects of this work are described in Section II under Program Activity Three - Provide Cabinet with sound advice on the development, coordination and implementation of the policy agenda. PCO also supported the Government in effectively communicating its agenda and priorities to Canadians, and ensuring that the Prime Minister and his office understood the views, concerns and priorities of Canadians.

In the area of strengthening internal management practices, PCO made progress in implementing the Public Service Modernization Act, as planned. However, despite increased efforts in the areas of performance measurement, audit and evaluation, and access to information requests, PCO was not able to complete all plans as described in the 2006-2007 Report on Plans and Priorities (RPP). In particular, development of the performance measurement strategy was delayed because of the need to design a new program activity architecture based on the new organizational structure. The establishment of the audit and evaluation infrastructure was delayed due to the decision to adopt a stand-alone function as opposed to the previous plan to share services with other central agencies. Finally, efforts have been made to strengthen capacity to respond to access to information requests, but progress was slower than expected due to a number of factors. Further information on performance in all these areas can be found here.

PCO also continued to deliver its core activities of providing advice and support to the Prime Minister, ministers in his portfolio, Cabinet and Cabinet committees. A reorganization and downsizing, initiated in the last quarter of 2005-2006, was continued during the first quarter of 2006-2007. In order to focus on PCO’s core activities, thereby returning to its traditional central agency role in supporting the Prime Minister, a number of secretariats and teams were reassigned from PCO to departments and agencies with mandates associated with their areas of activity. As a result, the organizations received additional resources and expertise, while PCO was positioned to more effectively carry out its core mandate. The Treasury Board Secretariat, during its annual evaluation of the state of management, based on the Management Accountability Framework, commented that PCO’s performance in this exercise was notable.

The Clerk, as Head of the Public Service, has identified public service renewal as one of the key priorities for the government over the next few years and committed to a continuing process of change and renewal that will take the Public Service well into the new century. The ultimate goal of this broad process of renewal is excellence in the support of Canada’s government, excellence in the delivery of programs and services, and excellence in regulation and policy development. A number of activities occurred over the past year to support this commitment, and are detailed in Section II under Program Activity Four - As its head, the Clerk leads the Public Service in effectively supporting Cabinet and serving Canadians.

The performance summary presented in the chart below lists PCO’s major priorities and expected results, together with the resources associated with each priority.

Summary of Performance in Relationship to PCO’s Priorities


Priorities Program Activity1 Expected Result Status 2006-2007
(thousands of dollars)
Planned Spending Total Authorities Actual Spending
Support the Prime Minister in exercising his overall leadership responsibility

Ongoing
A.1 Cabinet decision making and legislative agenda are supported Success-fully met 32,143 37,601 41,127
A.2 The Prime Minister and ministers receive information and sound advice in support of decision making
Improve the managementand accountability of government

Ongoing
A.2 The Prime Minister and ministers receive informed and sound advice in support of decision making

Success-fully met

10,445 11,513 9,567
A.4 The overall development of the Public Service is fostered
Focus on key policy areas and strengthen medium-term policy planning

Ongoing
A.1 Cabinet decision making and legislative agenda are supported

Success-fully met

61,297 59,644 51,893
A.2 The Prime Minister and ministers receive informed and sound advice in support of decision making
A.3 Cabinet receives informed and sound advice on the development and implementation of the policy agenda
A.4 The overall development of the Public Service is fostered
Strengthen PCO’s internal management practices

Ongoing
A.1-A.5 The Prime Minister’s Office and the offices of the portfolio ministers receive appropriate financial and administrative support Ongoing3 12,647 26,442 21,162
A.6 Commissions of inquiry receive appropriate support
All other PCO activities2 -     12,764 13,159 11,812
Total PCO Planned Spending       129,296 148,359 135,561

  1. Program Activity Descriptions
    A.1 Support for Cabinet decision making and legislative agenda
    A.2 Advice to the Prime Minister and ministers on issues, policies, machinery and appointments
    A.3 Provide Cabinet with sound advice on the development, coordination and implementation of the policy agenda
    A.4 As its head, the Clerk leads the Public Service in effectively supporting Cabinet and serving Canadians
    A.5 Provide the Prime Minister’s Office and the offices of the portfolio ministers with financial and administrative support
    A.6 Provide commissions of inquiry with appropriate administrative support
  2. PCO is reporting only on key departmental priorities in this DPR. Therefore, the category “All other PCO activities” includes the direct costs of all remaining functions related to the Prime Minister’s Office and ministers’ offices. These costs relate to salaries and wages ($8.9 million), other operating expenditures ($1.1 million), and employee benefit plans and other statutory items ($1.8 million).
  3. It is difficult to assign a single rating of met or not met because this priority includes 4 plans that are very different in nature (i.e. performance measurement, audit and evaluation, Public Service Modernization Act, and Access to Information and Privacy requests) and all plans have a different performance status. (Further information is available. See Strengthen Internal Management Practices).

Working Environment and Context

PCO’s priorities depended in large part on the Government’s agenda and were influenced by a variety of external and internal drivers, which are described below.

Addressing government-wide priorities
PCO works to ensure government-wide focus on the key priorities. During 2006-2007, PCO supported the implementation of the Government’s agenda: the 2006 budget that controlled spending, lowered taxes and made strategic investments; crime and safety initiatives and legislative reform; accountability and democratic reform; international leadership; and the environment. PCO also supported the newly created Cabinet Committee on the Environment and Energy Security.
Public expectations for increased government accountability

Canadians expect their government to provide effective, efficient and timely services. At the same time, they expect their government to make sound decisions, to be transparent and to account for the use of their taxes.

Recent years have seen an erosion of trust and confidence in government, which has resulted in clear demands from Canadians for more accountability and transparency and has led to an unprecedented focus on improving management performance. It is critical, however, to ensure that the initiatives put in place to strengthen accountability are balanced with the need to ensure an environment that encourages innovation.

With the implementation of the Federal Accountability Act and associated Action Plan, the Government began a major transformation of its accountability to Canadians. The implementation of the Act will bring increased discipline to government operations and lead to strengthened confidence of Canadians in their government and in public institutions.

Accelerating technological shifts

With technological shifts and advances, new tools are available that not only increase the expectations of Canadians for information and services but also create an expectation for speedy decisions, immediate responses from government, transparency in government operations, and public engagement in decision making. These changes will require a public service that is flexible, agile, innovative and focused on excellence.

Complexity of issues

Although the priorities of the Government are clear and focused, the business of governing in a modern society is inevitably complex. Canada is an immense, regionally varied country with two official languages, an important Aboriginal population and a rapidly changing population mix because of immigration. There is also increased interdependence among governments and a convergence of sectors that are changing relationships and policy design, such as issues related to climate change, competitiveness, biotechnology, border security and others. As well, decision makers are faced with varying pressures, constantly evolving international circumstances, budget limits and often conflicting and competing demands and expectations. Finally, the Government faces a minority situation in both the House of Commons and the Senate. To deal with this level of complexity, PCO must support integration within the federal government community, and encourage teamwork within and across departments and agencies.

Societal and demographic changes

The federal Public Service is impacted by societal and demographic changes that are reshaping the face of Canada. The median age of the Canadian population has risen steadily since 1966, reaching 39.5 years in 2006. According to the 2006 Census, the 65-and-over population made up a record 13.7 percent of the total population of Canada in 2006. Never before has Canada had so many persons aged 80 years and over (1.2 million in 2006). With the baby boomers aging and fewer young people in the working-age population, the potential exists for shortages in certain occupations. For example, 33.5 percent of federal public servants will be eligible to retire by March 2009.

Canada is becoming more ethnically and culturally diverse. Between 1981 and 2001, there was a threefold increase in the number of individuals who identified themselves as visible minorities. Moreover, between 1996 and 2001, the visible minority population grew at a rate six times faster than the total population.

An excellent public service is marked by a diversity of linguistic, geographical and cultural views in order to represent Canadian society. It is also enhanced by knowledge of the demographic changes that are occurring in Canadian society. To this end, PCO is supporting the public service renewal priority both across government and within PCO itself.

Challenges and risks

The responsibility of PCO to support the Prime Minister and Cabinet and provide leadership for the Public Service means it must be capable of operating 24 hours a day and seven days a week. There are many reasons why government must be prepared to respond to any exigency, ranging from natural disasters (e.g. ice storms) to accidents (e.g. power interruptions) to deliberate actions (e.g. terrorism). Consequently, efforts are underway in the area of emergency preparedness to continually improve PCO’s capacity to provide support and advice, regardless of the situation.

To fulfill its role of providing sound policy advice and support to the Prime Minister and the Cabinet, PCO relies extensively on its ability to attract, recruit and retain high-calibre policy analysts and advisors with specific subject-matter expertise who possess the experience, knowledge, analytical capability, ability to work under pressure and, above all, the dedication to provide exceptional quality. Due to the workforce demographic and the high-pressure nature of the work, PCO, like many departments and agencies, is challenged to fully staff its organization and, therefore, is turning its efforts to strategic human resources planning to address this situation. Because of risks associated with loss of corporate memory due to retention challenges, PCO also focuses on developing strong capabilities in information, records and library management to support staff in providing advice and recommendations.

Alignment of PCO’s Outcome with Government of Canada Outcomes

Canada’s Performance Report to Parliament describes the federal government’s contribution to Canada’s performance as a nation by providing an overview of how individual departments and agencies contribute to broader, government-wide outcomes in the following key policy areas: economic affairs, social affairs, international affairs and government affairs (federal organizations that support all departments and agencies).

PCO’s strategic outcome is aligned with the Government of Canada outcome number four: “Government Affairs.” PCO plays an important, supportive role to ensure a whole-of-government approach and integrated response to issues that affect Canadians. It works across portfolio boundaries and helps other government departments and agencies meet their responsibilities, deliver on their core mandates and, ultimately, serve Canadians better.