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Minister's Message

As Canada’s Minister of Transport, I am pleased to present Transport Canada’s Departmental Performance Report for 2008-09.

Transportation touches most Canadians every day, and generates nearly 12 per cent of Canada’s Gross Domestic Product. Each year it accounts for 1.8 billion passenger trips and moves over $1 trillion worth of goods to market. Canada needs a safe, secure, efficient and clean transportation system that works well. This is good for the people who use it, and good for our economy, helping us to compete in challenging global markets.

That is why in 2008-09, we delivered. We delivered a wide range of programs. We spent significant time and effort to streamline programs and legislation to support Canada’s Economic Action Plan. And over the next five years, we will be investing almost one billion dollars in the country’s roads, bridges, border crossings and transit systems. In 2008-09 Transport Canada also:

• supported technology research and innovation;
• took action to reduce transport-related emissions, through regulations and programs;
• took steps to improve the liability and compensation regime for pollution damages caused by marine oil spills;
• conducted environmental assessments, cleaned up contaminated sites, detected marine pollution incidents and increased the environmental sustainability of Transport Canada’s lands, facilities and operations;
• advanced Canada’s performance-based approach to reducing transportation safety risks and security threats, and promoted a ‘safety and security culture’ in the transportation industry;
• managed contribution funding programs that help the motor vehicle, rail and urban transit and marine sectors address operational safety and security concerns;
• introduced in Parliament, amendments to the Transportation of Dangerous Goods Act and the Arctic Waters Pollution Prevention Act;
• worked with international partners to make sure that our policies, programs, legislation and regulations are strengthened, better aligned and harmonized
  in a way that reduces trade barriers; and
• increased aviation security by reviewing the aviation security framework, testing new ways of screening air cargo, and enhancing passenger assessment.

Transport Canada is proud of what it has accomplished with the cooperation of our many partners in industry and government, both here and abroad, and looks forward to meeting the challenges of the future.

The original version was signed by

John Baird, P.C., M.P.
Minister of Transport

SECTION I – DEPARTMENTAL OVERVIEW

1.1 Summary Information

1.1.1 Raison d’être

Transport Canada is responsible for the Government of Canada’s transportation policies and programs. The department has the added responsibility, under the Canada Transportation Act, to monitor the ongoing health of the national transportation system. As such, while not directly responsible for all aspects or modes of transportation, the department plays a leadership role to ensure that all parts of the transportation system work together effectively.

The department’s vision of a sustainable transportation system is one that integrates and balances social, economic and environmental objectives. Our vision is guided by the following principles:

• highest practicable safety and security of life and property – guided by performance-based standards and regulations when necessary;
• efficient movement of people and goods to support economic prosperity and a sustainable quality of life – based on competitive markets and targeted use of regulation and government funding; and
• respect for the environmental legacy of future generations of Canadians – guided by environmental assessment and planning processes in transportation decisions and selective use of regulation and government funding.

1.1.2 Responsibilities

In February 2006, Transport Canada became part of the Transport, Infrastructure and Communities portfolio, which also includes Infrastructure Canada, three agencies operating at arm's length from the department, 16 Crown corporations (e.g. VIA Rail, Marine Atlantic) and over 40 shared-governance organizations (e.g. Port of Montreal, Vancouver International Airport). The creation of this portfolio has provided an unprecedented opportunity to integrate transportation policies and infrastructure funding programs (e.g. $2.1 billion for gateways and border crossings). Under this Portfolio, the Minister heads a complex organizational structure, and is responsible for administering over 60 statutes.

1.1.3 Strategic Outcomes and Program Activity Architecture

Text version for Figure 1

1.1.4 2007-2008 and 2008-2009 Program Activity Crosswalk

Transport Canada modified the program activities from 2007-08 to 2008-09, as outlined in the 2008-09 Report on Plans and Priorities. Only the titles of the program activities changed, as illustrated in the table below. This had no impact on financial resources allocated to each program activity.

Figure 2: Program Activity Architecture Crosswalk

	2008-09
($ thousands)	Transportation Policy Development and Infrastructure Programs	Transportation Safety and Security	Sustainable Transportation Development and the Environment
2007-08
Policies, Programs and Infrastructure in support of a market-based framework	521,681
Policies, Rulemaking, Monitoring and Outreach in support of a safe and secure transportation system		612,696
Policies and Programs in support of Sustainable Development			201,931

It should be noted that Transport Canada completely restructured its Program Activity Architecture in 2008-09 which is reflected in the 2009-10 Report on Plans and Priorities. Consistent with the Treasury Board guidelines, for the purposes of this report, Transport Canada is reporting against the structure that was used in the 2008-09 Report on Plans and Priorities.

1.2 Performance Summary

To support its mandate, Transport Canada was assigned the following resources:

1.2.1 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
1,336	1,463	1,040

1.2.2 Human Resources (Full-Time Equivalents)

Planned	Actual	Difference
5,155	5,165	10

1.2.3 Summary Tables by Strategic Outcomes

Strategic Outcome 1: An efficient transportation system that contributes to Canada’s economic growth and trade objectives

Performance Indicators	Expected Results
Productivity of the transportation system Price and service levels Financial viability of the components of the system	Long-term sustainable funding and accountability framework for transportation infrastructure Strengthened international competitiveness Legislative/policy frameworks that support free market forces with targeted government intervention
2008-09 Performance
Took steps towards long-term sustainable funding for transportation infrastructure by signing over $1 billion worth of agreements with provinces, municipalities and territories to provide funding for current needs and to address future demand. Improved the air transportation industry’s international competitiveness by amending the Canada Transportation Act and concluding a new air transport agreement with the European Union and by negotiating new or expanded bilateral agreements with five other countries. Increased the international competitiveness of Canada’s national ports by amending the Canada Marine Act and introducing targeted policies that provide ports with more business opportunities and facilitate port amalgamation. Made progress towards increasing the overall efficiency of the transportation system by supporting/funding transportation research and innovation to help the transportation sector develop and deploy new technologies.

($ millions)

Program Activity 1	2007-08 Actual Spending	2008-09				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Transportation Policy Development and Infrastructure Programs	124	218	522	507	200	A fair and secure marketplace Strong economic growth

The variance of $307 million between Total Authorities and Actual Spending was primarily the result of reduced spending in the following contribution programs during the year:

• Gateways and Border Crossings Fund of $204 million;
• Asia Pacific Gateway and Corridor Transportation Infrastructure Fund of $45 million;
• Port Divestiture Fund of $33 million; as well as
• several other minor program variances of $9 million.

The remaining variance of $16 million was primarily the result of staffing delays and various capital project delays.

Strategic Outcome 2: A safe and secure transportation system that contributes to Canada’s social development and security objectives

Performance Indicators	Expected Results
Level of public confidence Accident/incident rates relative to increase in traffic Fatality rates relative to accident/incident rates Progress in implementing safety and security management systems	Continuous improvement in transportation safety and security Public confidence in Canadian transportation safety and security
2008-09 Performance
Improved Canada’s transportation safety and security regimes through continued implementation of a performance-based approach to reducing risks and threats, and the continued development of a ‘safety and security culture’ across the transportation industry. Continued contribution programs that help stakeholders strengthen motor vehicle, marine, rail and urban transit safety and security. Strengthened and modernized Canada’s safety and security regulatory frameworks and reduced barriers with international trading partners through improved harmonization of policies and programs. Increased aviation security through the review of the aviation security framework, the testing of new screening methods for air cargo and enhanced passenger assessments. Decreased the accident rates in the aviation, marine, rail and road transportation modes in 2008, despite an increase in overall traffic. The number of fatalities in all four modes also decreased compared to 20072 levels.

($ millions)

Program Activity 1	2007-08 Actual Spending	2008-09				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Transportation Safety and Security	566	613	613	672	629	A safe and secure Canada

The variance of $43 million was primarily the result of:

• the ending of the Transit Security Contribution under the Passenger Rail and Urban Transit Security Contribution Program for $10 million;
• implementation delays in the Marine Security Contribution Program of $7 million; as well as
• several other minor program variances totalling $3 million.

The remaining variance of $23 million was primarily the result of staffing delays and various capital project delays.

Strategic Outcome 3: An environmentally responsible transportation system that contributes to Canada’s sustainable development objectives

Performance Indicators	Expected Results
Percentage of Sustainable Development Strategy Targets Levels of air pollution and GHG emissions from transport Number of marine pollution incidents detected Number of Transport Canada contaminated sites remediated Number of project environmental assessments completed	Increased environmental sustainability of Canada’s transportation system and Transport Canada’s operations
2008-09 Performance
Laid the foundation for future emissions reductions in the transportation sector through ongoing voluntary agreements with industry, consultations on proposed new regulations, and through programs outlined in the ecotransport Strategy. Improved the liability and compensation regime for pollution damages caused by marine oil spills through amendments to the Marine Liability Act introduced in Parliament. Continued to protect the natural environment by conducting environmental assessments, remediating contaminated sites and detecting pollution from marine incidents. Increased knowledge, awareness and engagement in green transportation through guidelines, toolkits, reports, workshops, conferences, awards, webinars, and website presentations.

($ millions)

Program Activity 1	2007-08 Actual Spending	2008-09				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Sustainable Transportation Development and the Environment	146	202	202	283	210	A clean and healthy environment Strong economic growth

Lower spending in some programs generated a variance of $73 million during 2008-09, the most significant portion attributable to the sunsetting of the ecoAUTO rebate program on March 31, 2009, which created a variance of $49 million, as well as small variances in other programs totalling $8 million. The remaining variance of $16 million was primarily the result of staffing delays.

1.3 Risk Analysis

The transportation sector touches almost all Canadians. It accounts for nearly 12 per cent of Canada’s Gross Domestic Product. Each year it accounts for over 1.8 billion passenger trips and moves over $1 trillion worth of goods to market.

The way Transport Canada performs and delivers services is influenced by Canada’s changing social, economic and political landscape, by international trends and by our strong partnerships with a broad range of institutions and organizations.

Key factors that affect the department’s performance and decision-making process include:

Globalization. Globalization is transforming Canada’s manufacturing processes and trade patterns. It calls for rapid access to and from Canadian markets and a systems-based approach to reduce congestion and increase capacity at several key gateways and land border points. This approach positions Canada as an efficient, reliable transportation choice to connect North America to the world. Shifts in the global economy are also creating opportunities both internationally and in Canada’s North.

The Environment. Canadians are becoming more concerned about the environment and expect all levels of government to protect their environment and health. The transportation sector is responsible for about 27 per cent of all greenhouse gas emissions in Canada. Addressing this issue is a challenge since there are many different pollution sources and cooperation and buy-in is required among different levels of government and international partners as well as among transportation providers and consumers.

Safety and Security. A safe and secure transportation system is vital to Canada’s economic competitiveness, standard of living and relationships with global trading partners. Increased safety depends on a strong, systemic safety culture and more accountability from transportation sector operators. Canada is still viewed as a target for potential terrorists attacks and Transport Canada must respond to the security concerns
of our trading partners, while keeping security policies from becoming trade barriers.

The Economy. The past year saw record increases in the price of crude oil per barrel, which in turn affected retail fuel prices for all modes of transport. Then a dramatic worldwide recession and financial market crisis made prices drop and the economy slow down. The economic slowdown in the U.S. and other key trading partners reduced demand for Canadian exports, which caused a sharp drop in prices for Canadian commodities. This directly impacted the transportation sector, since transportation is a derived demand.

Governance Pressures. Transport Canada completed its strategic review in 2008-09, identifying ways to streamline its operations, realign its activities and transform its organization to deliver better results for Canadians. A corporate risk profile was also completed, which supported the executive team’s decisions related to internal audit planning and other types of integrated business planning.

1.4 Contribution of Priorities to Strategic Outcomes

Program Priority 1: Market-based policy framework (Ongoing)
Policy/legislative frameworks that improve transportation services by allowing transportation activities to adapt, innovate and remain competitive.

Linkage to Strategic Outcome: An efficient transportation system that contributes to Canada’s growth and trade objectives.

Priority Status: Mostly Met

Transport Canada:

• amended the Canada Marine Act and implemented targeted policies that provide Canada Port Authorities with a wider array of business opportunities.
• amended the Canada Transportation Act and negotiated new or expanded existing international agreements, which create new opportunities for air carriers and airports and provide travellers and shippers more choices for destinations and routes.

Program Priority 2: Infrastructure, gateways and trade corridors (Ongoing)
Transport Canada is responsible for the implementation of the Gateways and Border Crossings Fund and the Asia-Pacific Gateway and Corridor Initiative, components of the $33 billion Building Canada Plan.

Linkage to Strategic Outcome: An efficient transportation system that contributes to Canada’s growth and trade objectives.

Priority Status: Mostly Met

Transport Canada signed contribution agreements worth over $1 billion of federal funding to support major transportation projects across Canada, one of which was
co-signed with Infrastructure Canada. The agreements included:

• $622 million under the Building Canada Fund for the Toronto York Spadina Subway Extension;
• $5 million under the Canada Strategic Infrastructure Fund;
• $54.5 million under the Gateways and Border Crossing Fund; and
• $379 million under the Asia Pacific Gateway and Corridor Initiative.

In addition to these contribution agreements, eight transportation infrastructure proposals totalling $413.5 million were announced in 2008-09 under the Gateways and Border Crossings Fund.

Program Priority 3: Innovation (Ongoing)
Transport Canada will continue to accelerate research, development, deployment and integration of Intelligent Transportation Systems.

Linkage to Strategic Outcome: An efficient transportation system that contributes to Canada’s growth and trade objectives.

Priority Status: Mostly Met

New transportation research and development and deployment projects were undertaken to enhance the transportation sector’s ability to develop and deploy new technologies:

• $3.8 million was disbursed and 25 projects were completed; and
• the Intelligent Transportation Systems Architecture for Canada was updated to reflect new technologies and services; and
• a new tool for its use and application by transportation stakeholders was developed.

Program Priority 4: Strengthened security policies and programs (Ongoing)
Strengthened security policies and programs that address emerging issues in the security environment of Canadian and international transportation.

Linkage to Strategic Outcome: A safe and secure transportation system that contributes to Canada’s social development and security objectives.

Priority Status: Mostly Met

Transport Canada:

• enhanced security through new and ongoing aviation, air cargo, marine ports and facilities and transit programs;
• improved emergency preparedness through various training exercises;
• strengthened the air passenger assessment system to better protect the travelling public; and
• enabled better information sharing with industry and other federal partners.

Program Priority 5: Streamlined regulations (Ongoing)
Streamlined safety and security regulations that support the Government’s commitment to protect and advance the public interest through a more effective, efficient and accountable regulatory system.

Linkage to Strategic Outcome: A safe and secure transportation system that contributes to Canada’s social development and security objectives.

Priority Status: Mostly Met

Transport Canada made progress towards improving harmonization and streamlining regulations and standards related to:

• marine and road safety;
• marine security;
• pilot licensing and training;
• transportation of dangerous goods; and
• approval processes for major works affecting navigation.

Program Priority 6: Safety and security management systems (Ongoing)
Safety and security management systems that effect cultural shift towards a systematic understanding and management of risk and threats.

Linkage to Strategic Outcome: A safe and secure transportation system that contributes to Canada’s social development and security objectives

Priority Status: Mostly Met

Working with government and industry partners, progress was made towards implementing safety and security management systems through formal and informal consultation, and education and awareness sessions. Safety and security research activities to increase the understanding of risks and threats across modes of transportation continue.

Other results included:

• safety management systems regulations are now in effect at Canada's ten major airports, and the remaining 312 regional airports are in the initial certification stage;
• audits were conducted at federally regulated railways on existing safety management regulations and a stakeholders’ working group was created to address the Railway Safety Act Review Panel recommendations; and
• guidelines and tools were produced to support safety management systems implementation in the marine industry.

Program Priority 7: Climate change and Clear Air (Ongoing)
Policies and programs designed to reduce greenhouse gas emissions and improve air quality by addressing smog, particulate matter and other air pollution issues that adversely affect the health of Canadians.

Linkage to Strategic Outcome: An environmentally responsible transportation system that contributes to Canada’s sustainable development objectives.

Priority Status: Mostly Met

Transport Canada supported international efforts in the aviation and marine sectors to develop standards and recommended practices for reducing greenhouse gas emissions and air pollutants. For the rail sector, the department began work on the development of emissions regulations. Transport Canada also:

• delivered a suite of programs under the ecotransport Strategy that will reduce greenhouse gas and air pollutant emissions throughout the system;
• completed the two-year ecoAUTO Rebate Program, which distributed over
  $190 million in rebates for the purchase of approximately 170,000 high-efficiency
  and alternate fuel vehicles; and
• committed $19.7 million to projects that implement emission reduction technology and practices in the freight, urban and vehicle sectors.

Program Priority 8: Environmental Assessments (Ongoing)
Environmental assessment ensures that departmental policies, programs and projects take environmental impacts into consideration at the planning stage.

Linkage to Strategic Outcome: An environmentally responsible transportation system that contributes to Canada’s sustainable development objectives

Priority Status: Met All

Transport Canada conducted 829 project environmental assessments as required by the Canadian Environmental Assessment Act and territorial land claim agreements; and identified measures to prevent, minimize, or manage adverse environmental effects. The department also conducted 88 strategic environmental assessments to identify potential impacts of proposed departmental policy, plans and programs.

Management Priority 1: People (Ongoing)
Focus on people management priorities identified in the departmental Integrated People Management Strategy, implementation of the Public Service Renewal Action Plans, pro-active staffing solutions and strengthening linguistic duality in Transport’s Canada’s services and the workplace, including employee development.

Linkage to Strategic Outcome: Linked to each departmental strategic outcome.

Priority Status: Met All

Transport Canada developed an Integrated People Management Strategy and National Staffing Strategy to address human capital needs, based on the updated National Human Resources Plan. Other results include having:

• recruited 120 post-secondary graduates – more than the target of 89;
• reached a 17.5 per cent visible minorities rate – more than the target of 12 per cent;
• played a leadership role in organizing the public service-wide Halifax Career Fair to strengthen the Public Service Brand;
• built capacity in known shortage areas through leadership and career language developmental programs;
• took a talent management approach that provides employees with a variety
  of leadership opportunities;
• automated staffing, document classification and application procedures
  (these systems are now being used by two other federal organizations); and
• made progress towards introducing an automated learning management system that will improve how the department manages employee development.

Management Priority 2: Values and Ethics (Ongoing)
Further integrate values and ethics in management practices and strengthen oversight by promoting a one-stop shop for advisory services, developing a learning strategy, informing employees of the Public Servants Disclosure Protection Act, and initiating work on a departmental Code of Conduct.

Linkage to Strategic Outcome: Linked to each departmental strategic outcome.

Priority Status: Met All

Transport Canada:

• created a departmental Values and Ethics Advisory Committee as a key component of senior management governance;
• developed a corporate Values and Ethics Plan that supports the Values and Ethics Result Framework and is tailored to the department’s mandate as a regulatory department; and
• developed a departmental Values and Ethics Risk Profile and tools.

Management Priority 3: Governance and Stewardship (Ongoing)
Develop new Program Activity Architecture and enhanced Performance Measurement Framework; Implement strengthened planning and reporting function to support effective decision-making, priority setting and resource allocation.

Linkage to Strategic Outcome: Linked to each departmental strategic outcome.

Priority Status: Met All

The advisory and decision-making capacity of Transport Canada’s executive team was enhanced because the department:

• restructured its Program Activity Architecture for 2009-2010;
• introduced a completed Performance Measurement Framework;
• established a senior executive integrated planning committee; and
• established a planning council.

1.5 Expenditure Profile

1.5.1 Departmental Spending Trend

Spending Trend for Transport Canada

Figure 1.5.1 shows Transport Canada’s expenditures (planned, authorized and actuals) from 2005-2006 to 2008-2009. The trend shows a gradual increase in actual spending from $702 million in 2006-2007, to $1,040 million in 2008-2009. The increased spending over this period is attributable to some of the department’s major initiatives including the ecoauto Rebate Program, the Asia Pacific Gateway Corridor Initiative, and the Gateways and Border Crossings Fund.

1.5.2 Voted and Statutory Items

This table shows the voted items Parliament approved through the Main Estimates with its supply bills. The statutory items are displayed for information purposes only.

($ millions)

Vote # or Statutory Item (S) 3	Truncated Vote or Statutory Wording	2006-07 Actual Spending	2007-08 Actual Spending	2008-09 Main Estimates	2008-09 Actual Spending
Vote 1	Operating expenditures	254	304	315	357
Vote 5	Capital expenditures	71	73	78	66
Vote 10	Grants and contributions	231	316	472	443
(S)	Contributions to employee benefit plans	64	66	67	67
(S)	Northumberland Strait Crossing subsidy payment under the Northumberland Strait Crossing Act	54	55	55	56
(S)	Payments in respect of St. Lawrence Seaway agreements under the Canada Marine Act	24	19	42	44
(S)	Payments to Canadian National Railway Company in respect of the termination of the collection of tolls on the Victoria Bridge, Montreal and for rehabilitation work on the roadway portion of the Bridge	2	3	3	3
(S)	Spending proceeds from the disposal of surplus Crown assets	1			3
Total 4 Department		702	836	1,032	1,040

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