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It is my pleasure to present the Departmental Performance Report for Natural Resources Canada (NRCan) for the reporting period ending March 2011.
Canada remains well positioned to face global economic challenges, due in part to the strength of its natural resource sectors. The contributions of the energy, mining and forest sectors to Canada’s economy continue to be significant. In 2010, they accounted for 11.3 percent of real gross domestic product (GDP) and directly employed about 755,000 Canadians across the country. In terms of international trade, natural resources represented 53 percent of Canada’s total merchandise exports that same year.
Our Department’s implementation of the Government’s Economic Action Plan (EAP) commitments has helped position the country’s natural resource sectors to create high-paying jobs for Canadians, increase business investment and contribute to overall economic growth. NRCan also continued to promote and accelerate energy efficiency and clean technologies that are providing energy and environmental benefits to Canadians. Our commitment to the sustainable development of our vast energy resources has enhanced our status as a global energy leader.
The mining sector represents an important source of job creation, as Canada maintained its ranking among the largest producers of metals and mineral products. Our commitment to innovation has provided the geoscience knowledge necessary for private sector exploration and investment decisions and contributed to a better understanding of Canada’s North.
We continued to work toward a more effective and efficient regulatory process for major resource projects. The Major Projects Management Office (MPMO) took further steps to strengthen the alignment of federal and provincial regulatory processes, moving closer to the objective of one-project, one-review.
NRCan also helped Canadian wood producers diversify export market opportunities in key economies, including those of China and South Korea. Our investment in transformative technologies supported innovation and new product development that helped improve the environmental performance and competitiveness of Canada’s forest industry and secured a more prosperous future for communities that depend on the forest sector.
In Canada’s North, our geomapping and geoscience capacity contributed to prosperity and job creation for communities and Canada’s sovereignty. The Department also provided expertise to support Canada’s international efforts to extend jurisdiction over our continental shelf.
Guided by its vision to improve the quality of life of Canadians by creating a sustainable resource advantage, NRCan continues its commitment to strengthening Canada’s future.
The Honourable Joe Oliver
P.C., M.P., Eglinton-Lawrence (Ontario)
Minister of Natural Resources
NRCan’s vision is to improve the quality of life of Canadians by creating a sustainable resource advantage. It seeks to fulfill this vision by working to: improve the competitiveness of the natural resource sectors; enable the sustainable development of Canada’s resources; and enhance the safety and security of citizens.
The Minister of Natural Resources is specifically responsible for, or has responsibilities under, more than 30 Acts of Parliament1. The Minister's core powers, duties and functions are set forth in the Department of Natural Resources Act2, the Resources and Technical Surveys Act3, and the Forestry Act4. NRCan also works in areas of shared responsibility with the provinces.
Within the Government of Canada, the Minister of Natural Resources also has responsibilities for the natural resources portfolio5, which includes the following:
To deliver on its responsibilities, NRCan relies on a number of tools. It uses science and technology (S&T) to help address priorities and plan for the future. It develops policies, programs, and regulations that help create a sustainable resource advantage, supporting strong, competitive natural resource sectors that are environmentally and socially responsible. NRCan uses partnerships and international collaboration to help drive progress on natural resources issues that are important to Canadians. More broadly, the Department plays a critical role in Canada’s future, contributing to high-paying jobs, business investment and overall economic growth.
As outlined in its 2010-11 Program Activity Architecture, NRCan managed its program delivery through three Strategic Outcomes and seven Program Activities designed to achieve expected results, support Government of Canada priorities, and deliver benefits to Canadians.
Text Version - Program Activity Architecture
Departmental performance discussed in this report is measured using specific indicators that were developed for the above Strategic Outcomes and Program Activities. In some cases, minor improvements have been made to these indicators (and one new indicator has been added) since the publication of NRCan’s 2010-11 Report on Plans and Priorities14. Descriptions of these changes will appear in the associated endnotes.
At the Strategic Outcome level, NRCan tracks a range of key national macroeconomic and technological indicators that are influenced by departmental programs and activities. At the Program Activity level, performance is assessed against three classes of indicators:
In cases where the Department is reporting on highly specific outcomes (e.g., data on natural hazards), activity-specific performance targets have been established.
NRCan’s 2010-11 Report on Plans and Priorities16 identified seven (7) priorities seen as critical to meeting the Department’s Strategic Outcomes and supporting the Government of Canada’s priorities. Together, these priorities have guided the Department’s policy direction, science and technology initiatives, and program development and delivery. NRCan also successfully delivered on the Government of Canada’s Economic Action Plan17 (see page 36 for details).
The success in delivering each priority is determined by assessing achievements against plans and commitments presented in the 2010-11 Report on Plans and Priorities. The rating criteria provided by the Treasury Board Secretariat are used to establish the status of each priority:
Improving the Performance of the Regulatory System for Project Reviews | Type18: Ongoing |
PAA Linkages: Strategic Outcome 3 |
---|---|---|
Status: Met all | ||
Major resource projects are an important driver of long-term economic growth and job creation for Canada. A federal review process for major resource projects that is timely, predictable, transparent and accountable is critical to the resource sectors’ ability to secure investments for resource development, while maintaining strong environmental protection for Canada. Key achievements for this priority in 2010-11 include:
|
Competitive Resource Sectors | Type Previously Committed |
PAA Linkages: Strategic Outcomes 1, 2 and 3 |
---|---|---|
Status: Met All | ||
The current and future competitiveness of Canada’s natural resource sectors is dependent on their ability to access markets, increase investments and develop innovative products and processes. Competitive sectors mean jobs in Canada and an improved trade balance.
|
Clean Energy | Type: Previously Committed |
PAA Linkages: Strategic Outcomes 1 and 2 |
---|---|---|
Status: Met All | ||
The adoption of energy-efficient products and processes by consumers and industries as well as the development of new technologies are critical to position Canada as a global leader on environmental responsibility, ready to compete in a low-carbon economy.
|
Managing Nuclear Issues | Type: Ongoing |
PAA Linkages: Strategic Outcomes 1 and 2 |
---|---|---|
Status: Met all | ||
Nuclear energy plays a critical role in Canada’s energy mix. Managing nuclear issues rests upon established policy objectives, involving meeting Canada's energy and environmental needs safely, economically and reliably; reducing costs and risks for taxpayers while maximizing returns on Canada's investments in nuclear; and positioning Canada's nuclear industry to seize domestic and global opportunities. Key achievements for this priority in 2010-11 include:
|
Sustainable Resource Development in the North | Type: Ongoing |
PAA Linkages: Strategic Outcomes 1 and 3 |
---|---|---|
Status: Met all | ||
The development of Canada’s North will allow Canadians to realize the vast potential of this region, ensuring prosperity and job creation for Northern communities and strengthening Canada’s sovereignty while creating a sustainable resource future for generations of Canadians. Key achievements for this priority in 2010-11 include:
|
Integrated Management Excellence | Type: Ongoing |
PAA Linkages: Program Activity 4.1 |
---|---|---|
Status: Met all | ||
Timely and cost-effective internal services are critical to support the performance of the overall organization. Overall, NRCan is a well managed organization, as evidenced by the results of the Management Accountability Framework, an assessment by the Treasury Board Secretariat of key management functions in departments. Key achievements for this priority in 2010-11 include:
|
Modernizing Infrastructure and Systems | Type Ongoing |
PAA Linkages: Program Activity 4.1 |
---|---|---|
Status: Met all | ||
NRCan's ability to successfully deliver on its mandate and operational priorities is also dependent upon timely financial information and access to adequate facilities. Key achievements for this priority in 2010-11 include:
|
As a large and diverse organization, NRCan prepares for and manages a wide range of risks and opportunities. The Department identifies and responds to these risks via an Integrated Risk Management Policy Framework, which was updated in 2010-11.
The Policy Framework recognizes that NRCan's ability to achieve its strategic outcomes may be impacted by a range of risks, some of which are outside of its direct control, and sets the scope of risk management measures required. It also identifies a broad range of instruments involved in the management of risk, and specifies the related roles, responsibilities, definitions, and guiding principles.
In 2010-11, the Department managed a wide range of risks, as outlined in its Corporate Risk Profile. Some of these risks are discussed below.
Global Economy
Natural resources provided significant benefits to Canadians in 2010
Source: Statistics Canada
While the global economic outlook remains uncertain, Canada has emerged from the economic downturn in a relatively better position than other G-8 countries, due in part to the country’s large and diverse natural resource endowment and its stable investment climate.
Despite this encouraging outlook for Canada, the uneven and uncertain global growth, notably in the US, remains a key risk for our natural resource sectors, and one that NRCan has been managing in 2010-11.
Canada’s Economic Action Plan (EAP) was directly targeted at supporting and helping Canada’s economy remain strong. NRCan was a key contributor of the EAP, delivering more than $650 million in programs for the natural resource sectors that had a direct impact on Canadians and the Canadian economy (for more details on the performance of NRCan’s EAP programs, see page 36).
To ensure that the EAP programs would be delivered on time and within budget, NRCan put in place robust governance and monitoring systems. During 2010-11, two audits of EAP programs were performed and concluded that the programs were properly managed. All ensuing recommendations were addressed, including those related to the improvement of some aspects of the management controls.
Important, longer-term NRCan programs are also directed toward strengthening the resiliency and competitiveness of the Canadian resource sectors and contribute to supporting the natural resource sectors to mitigate economic uncertainties. These include, for example, the Transformative Technologies Program39 for forest products, the Clean Energy Fund40, the Green Mining Initiative41, and the development and implementation of a whole-of-government strategy to modernize the regulatory system for project reviews.
Capacity Management
NRCan manages several high-profile programs that have a limited lifespan; in 2010-11, the majority of the Department’s programs were of this kind. These sunsetting programs require the Department to manage long-lived capital assets and highly qualified personnel in an environment where funding is time-limited. While this ensures that NRCan’s programs are reviewed on a regular basis and that any new programs are aligned to the government’s priorities, there are risks associated with managing in this context.
NRCan managed these risks by strengthening its management practices to ensure proper planning and responsiveness capacity. For example, in 2010-11 the planning and monitoring functions were strengthened by further integrating human resources planning and by enhancing the process for reviewing financial and non-financial performance information on a quarterly basis. All senior committees were tasked with examining approaches to increase the effectiveness and efficiency of their respective areas and to find opportunities to streamline operations. The objective is to ensure that the Department and its corporate infrastructure remain robust, resilient and flexible. Finally, NRCan worked to ensure the continued relevance of its programs: it received more than $660 million in new funding in the federal Budget 2011.
Program-Specific Risks
NRCan monitored on an ongoing basis the progress of all of its programs, notably through the financial and non-financial quarterly reviews. Particular attention was given to high-risk programs such as the restructuring of Atomic Energy of Canada Limited (AECL). Various steps were taken to manage these risks, including continuing to provide funding to AECL to ensure the safe and reliable operations of its laboratories. In June 2011, an agreement was reached to sell the CANDU Reactor Division, which will dramatically reduce the risks and costs to taxpayers.
Planned Spending | Total Authorities | Actual Spending | |
---|---|---|---|
Program Spending | 2,756.3 | 2,859.7 | 2,253.7 |
Statutory Programs - Atlantic Offshore Accords | 1,696.4 | 2,103.3 | 2,103.3 |
TOTAL | 4,452.7 | 4,963.0 | 4,357.0 |
Planned | Actual | Difference |
---|---|---|
4,571 | 4,630 | 56 |
Performance Indicator42 | Targets | Status | Results |
---|---|---|---|
Canada’s rank of resource-based world trade | Favourable 5-year trend in rank position | Mostly Met |
In 2010, natural resources represented 53% of Canada’s total merchandise exports. This is up from the pre-recession share of 43%. The US remains Canada’s most important trade partner, particularly in energy and forestry. China is now Canada’s 2nd most important trading partner. The Trade Performance Index (TPI) is defined and reported by the International Trade Centre of UNCTAD/WTO. |
Program Activity | 2009-10 Actual Spending ($ millions) |
2010–1143 ($ millions) | Alignment to Government of Canada Outcomes44 | |||
---|---|---|---|---|---|---|
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
1.1 Economic opportunities for natural resources | 274.2 | 248.1 | 248.1 | 263.2 | 248.7 |
Strong Economic Growth |
1.2 Natural resource-based communities | 10.9 | 11.8 | 11.8 | 14.1 | 12.7 | Strong Economic Growth |
Total - Strategic Outcome * | 285.1 | 259.9 | 259.9 | 277.3 | 261.4 |
Performance Indicator | Target | Status | Results |
---|---|---|---|
A. Canada's total annual energy savings due to efficiency.45 | Favourable 5-year trend in Petajoules (PJ) saved | Met All |
The reduction in energy savings from 2006 onwards can be explained in part by the influence of the oil and gas sector, whose energy consumption in this sector has increased from 8% to 22% of industrial energy consumption, and by the economic downturn impact on manufacturing and merchandise transportation. Long term trends (more than 10 years) for energy efficiency in Canada remain positive, with an improvement in energy efficiency of 18% between 1990 and 2008. For more information please see the report Efficiency trends in Canada – 1990-200846. |
B. NRCan’s contribution to advancement of innovative and environmentally responsible resource practices in the resource sector measured by uptake of knowledge, technologies, and demonstration projects. | Favourable long-term trend in number of publications | Met All |
Innovation is critical to improve the environmental performance of the natural resource sectors and of Canada. Furthermore, the environmentally and socially responsible development of natural resources is increasingly seen as a corporate advantage as the world is transitioning to a low-carbon economy. NRCan supports innovation in this area by working with industries and academia to assume parts of the initial Research, Development and Demonstration (RD&D) costs, producing knowledge on innovation that is aligned with the priorities of stakeholders and relieving the natural resource sectors of some of the initial RD&D risks and costs that can sometimes be high. |
Program Activity | 2009-10 Actual Spending ($ millions) |
2010–1147 ($ millions) | Alignment to Government of Canada Outcomes | |||
---|---|---|---|---|---|---|
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
2.1 Clean Energy | 802.5 | 1,926.4 | 1,918.7 | 1,895.2 | 1,329.6 | A Clean and Healthy Environment |
2.2 Ecosystem Risk Management | 156.5 | 194.7 | 205.7 | 203.0 | 198.3 | A Clean and Healthy Environment |
Total – Strategic Outcome 2 | 959.0 | 2,121.1 | 2,124.4 | 2,098.2 | 1,527.9 |
The variance between the planned and actual spending is mainly attributable to the reprofiling of the funding for key programs such as the Pulp and Paper Green Transformation Program and the Clean Energy Fund. Other changes include the reduction of expenditures associated with the Biofuels Producer Incentive Program. These reprofiling have not affected NRCan’s ability to deliver results in 2010-11, as evidenced by the positive performance of its non-financial indicators for Strategic Outcome 2 presented above.
Performance Indicators | Target | Status | Results |
---|---|---|---|
A. Contribution to the safety and security of Canadians, and the effectiveness of federal land stewardship and regulatory processes. | Greater than 90% of landmass and natural hazard data meets timeliness and accessibility standards | Exceeded |
The provision of this information helps other levels of government, including international government bodies, the private sector and professional organizations to prepare for and mitigate natural disasters and make decisions for the effective management of Canada’s natural resources and lands. |
B. Contribution to the safety and security of Canadians, and the effectiveness of federal land stewardship and regulatory processes. | Favourable long-term trend in number of publications | Met All |
NRCan’s scientific activities and the dissemination of knowledge on climate change, forest disturbances, geoscience and adaptation, public safety geoscience, as well as explosives inform decision-making by industry and various levels of government. Risks can be better assessed and mitigation strategies put in place to ensure the safety and security of Canadians (e.g. mitigation and adaptation strategies related to forest pests, forest fires, climate change, earthquakes, tsunamis, etc.). The information is also used to inform decision-making on the stewardship of Canada’s lands, for example Canada’s North. |
Program Activity | 2009-10 Actual Spending ($ millions) |
2010-11 ($ millions) | Alignment to Government of Canada Outcomes | |||
---|---|---|---|---|---|---|
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
|||
3.1 Adapting to a Changing Climate and Hazard Risk Management | 62.9 | 68.6 | 68.6 | 67.6 | 60.8 | An Innovative and Knowledge-based Economy |
3.2 Natural Resource and Landmass Knowledge for Canadians | 113.5 | 103.7 | 103.6 | 98.9 | 95.5 | An Innovative and Knowledge-based Economy |
3.3 Geomatics Canada Revolving Fund | 0.5 | 1.9 (1.9) |
1.9 (1.9) |
7.3 | (0.3) | An Innovative and Knowledge-based Economy |
Total | 176.9 | 172.3 | 172.2 | 173.8 | 156.0 |
Program Activity | 2009-10 Actual Spending ($ millions) |
2010-11 ($ millions) | |||
---|---|---|---|---|---|
Main Estimates |
Planned Spending |
Total Authorities |
Actual Spending |
||
4.1 Internal Services | 306.9 | 223.0 | 223.3 | 310.4 | 308.4 |
The variance between the planned and actual spending can be explained by transfers from departmental programs to internal services as part of the corporate costing model, as well as increased costs associated with the Employee Benefit Plan.
The graph below compares the Department’s three-year spending trend for estimates, planned spending, total authorities and actual spending, as well as for Canada’s Economic Action Plan Initiatives.
Text Version - Departmental Spending Trends
NRCan’s total actual spending for 2010-11 was $4.357 billion.
NRCan’s spending increased from previous years – a $1,068.8 million and $526.4 million increase from 2008-09 and 2009-10 levels respectively. This is attributable to:
For information on our organizational votes and/or statutory expenditures, please see the 2010–11 Public Accounts of Canada 48 (Volume II) publication.
Voted or Statutory Items | Truncated Vote or Statutory Wording | Actual Spending 2008-09 |
Actual Spending 2009-10 |
Main Estimates 2010-11 |
Actual Spending 2010-11 |
---|---|---|---|---|---|
Vote 1 | Operating Expenditures | 719.2 | 869.7 | 805.9 | 819.6 |
Vote 2 | Capital Expenditures | 8.9 | 15.1 | 21.2 | |
Vote 5 | Grants and Contributions | 382.0 | 780.5 | 1 877.6 | 1346.5 |
Statutory | Minister of Natural Resources – Salary and Motor Car Allowance | 0.1 | 0.1 | 0.1 | 0.1 |
Statutory | Contributions to Employee Benefit Plans | 58.3 | 67.1 | 57.6 | 66.1 |
Statutory | Canada-Nova Scotia Development Fund | -- | -- | 0.0 | 0.0 |
Statutory | Infrastructure costs relating to the exploration, development, production or transportation of oil and gas in the offshore area of Nova Scotia | 0.6 | 1.3 | 0.0 | 0.0 |
Statutory | Canada-Newfoundland and Labrador Offshore Petroleum Board | 4.1 | 4.9 | 6.5 | 6.3 |
Statutory | Canada-Nova Scotia Offshore Petroleum Board | 2.8 | 2.2 | 3.4 | 2.2 |
Statutory | Payments to the Nova Scotia Offshore Revenue Account | 577.4 | 109.4 | 295.3 | 225.2 |
Statutory | Payments to the Newfoundland Offshore Petroleum Resource Revenue Fund | 2,351.0 | 1,180.9 | 1,371.2 | 1227.7 |
Statutory | Grant to the Canada Foundation for Sustainable Development | 19.0 | 0.0 | 20.0 | 0.0 |
Statutory | Newfoundland and Labrador Fiscal Equalization Offset Payments | 556.7 | 465.3 | 0.0 | 641.9 |
Statutory | Grants in Support of Energy Costs Assistance Measures | 0.0 | 0.0 | 0.0 | 0.0 |
Statutory | Spending of proceeds from the disposal of Crown Assets | 0.4 | 0.5 | 0.0 | 0.5 |
Statutory | Refund of amounts credited to revenues in previous years | 0.0 | 0.0 | 0.0 | 0.0 |
Statutory | Grant to the University of Calgary, Institute for Sustainable Energy, Environment, and Economy | 5.0 | 0.0 | 0.0 | 0.0 |
Statutory | Geomatics Canada Revolving Fund - Operational expenditures - Respendable revenue |
0.9 | 0.5 | 0.0 | (0.3) |
Total Spending | 4,677.5 | 3,491.3 | 4,452.7 | 4,357.0 |