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Minister's Message

As Canada’s Minister responsible for the Transport, Infrastructure and Communities Portfolio, I am pleased to present Transport Canada’s Departmental Performance Report for 2010-2011.

Our transportation system has an impact on the lives of Canadians in ways that many may not realize. From the vehicles we drive to the waterways we enjoy; from the trains that carry the goods we buy at local stores to the airplane that flies us to a family reunion, Transport Canada supports a safe, secure, clean and efficient transportation system that Canadians can trust.

Canada’s Economic Action Plan was key to making this country a world leader in the economic recovery following the global economic crisis. For its part, Transport Canada has invested in faster and more reliable passenger rail services, more efficient border crossings, safer bridges and highways, improved airport security and refurbished harbours for small craft. Transport Canada has also accelerated activities under the existing Federal Contaminated Sites Action Plan at the Fort Nelson Airport in British Columbia, and the Halifax Airport Fire Training Area, creating jobs and reducing risks to human health and the environment. From the Peace Bridge in Ontario to the Motor Vehicle Test Centre in Quebec to the Keewatin Railway in Manitoba, projects that matter to Canadians have been completed on time.

We have worked hard to maintain Canada’s strong safety record by making our role in enforcing safety standards clear and by keeping our regulations current. We continue to be a world leader in the development of safety management systems.

Transport Canada has taken steps to keep Canadians safe and secure while travelling. The department worked with the Canadian Air Transport Security Authority to change airport screening procedures to increase passenger convenience and deliver a high level of security. We also continued to work with the United States and the International Civil Aviation Organization to strengthen air cargo security and help ensure the smooth flow of people and goods across borders.

We have adopted strategies that strengthen our international trade and supply chains through our gateways and trade corridors. The result is a more efficient, reliable and seamless trade-related transportation system in Canada. For example, the department continues to reach key milestones in the implementation of the Windsor-Detroit Crossing project, which is vital to Canada’s prosperity.

Transport Canada actively contributes to the Government’s Clean Air Agenda. The department completed, on schedule, two major initiatives that helped protect the environment, health and prosperity of Canadians. The ecotechnology for Vehicles and ecofreight programs helped introduce new clean transportation technologies that can lead to cleaner air for Canadians today and tomorrow.

Together, these initiatives improve our transportation system so that Canadians can continue to use it in their day-to-day lives with confidence.

I am proud of this department’s achievements on behalf of Canadians.

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Section I: Departmental Overview

1.1 Organizational Overview

1.1.1 Raison d’être

Transportation is an essential element of social and economic prosperity. Transport Canada was established to ensure that an effective transportation system provides open market access for natural resources, agricultural products and manufactured goods, and provides support to service industries. A safe and secure system provides reliable and efficient movement of goods and people across the country and around the world. In an environmentally responsible way, it meets the challenges posed by topography and geography, linking communities and reducing the effects of the distance that separates people. These vital roles reflect transportation’s interdependent relationships throughout all sectors of the economy and society.

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

• the highest possible safety and security of life and property, guided by performance-based standards and regulations when necessary;
• the 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

Transport Canada is responsible for the Government of Canada’s transportation policies and programs. The department is responsible for developing regulations, policies and services under the legislative authority of Parliament. The department is required by the Canada Transportation Act to report on the state of the national transportation system. 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 across Canada work together effectively.

Transport Canada is part of the Transport, Infrastructure and Communities Portfolio that includes Transport Canada, Infrastructure Canada, shared governance organizations (e.g. the St. Lawrence Seaway Management Corporation), Crown corporations (e.g. the Great Lakes Pilotage Authority, Canada Post Corporation) and administrative tribunals/agencies (e.g. the Transportation Appeal Tribunal of Canada). Grouping these organizations into one portfolio allows for integrated decision making on transportation issues.

1.2 Summary of Performance

In 2010-2011 Transport Canada made significant progress in ensuring the maintenance and improvement of the Canadian transportation system. Building upon our world-class transportation system, Transport Canada invested $73 million to improve and repair infrastructure, increase safety on Canada’s railways and improve its laboratories and testing facilities, among other priorities. The department continued to implement safety management systems which provide for a strong Canadian safety culture. The Government of Canada also signed a number of international agreements regarding transportation safety and security over the past year.

Through Phase I of Canada's Economic Action Plan, announced in Budget 2009, the department continued to contribute to Canada’s economic recovery. Through the Gateways and Border Crossings initiatives, we have seen infrastructure improvements across the country to enable the fast and efficient movement of goods into the world marketplace. These investments will strengthen Canada's long-term economic competitiveness. Improved infrastructure at airports, ports and railway crossings also provide an immediate and long lasting improvement to the wellbeing of Canadians and international travellers.

1.2.1 Financial Resources

To support its mandate, Transport Canada received and utilized the following resources:

2010-2011 Financial Resources ($ millions)

Planned Spending	Total Authorities	Actual Spending
1,883	1,958	1,288

Note: Variance explanations provided in Section 1.6 Summary Performance Tables by Strategic Outcomes and Internal Services

1.2.2 Human Resources

2010-2011 Human Resources (Full-Time Equivalents)

Planned	Actual	Difference
5,360	5,506	146

1.3 Strategic Outcomes and Program Activity Architecture

In the 2010-2011 Departmental Performance Report, Transport Canada outlines its achieved results against cited objectives in its 2010-2011 Report on Plans and Priorities. This aligns with the Government of Canada’s Policy on Management, Resources and Results Structures that requires the department to collect, manage, and report financial and non-financial information on program objectives, performance and results.

Transport Canada fulfils its mandate, responsibilities and objectives through four strategic outcomes.

Strategic Outcome 1: An efficient transportation system

To promote an efficient transportation system, Transport Canada:

• establishes marketplace frameworks to govern the economic behaviour of transportation sector organizations (e.g. rules for arbitrating disputes between shippers and rail carriers);
• provides leadership for gateways and trade corridor strategies (e.g. Canada's Asia-Pacific Gateway and Corridor Initiative);
• provides stewardship for federal transportation assets;
• partners with provinces, territories, municipal governments and the private sector in transportation infrastructure projects; and
• promotes innovation (e.g. state-of-the-art intelligent transportation systems).

Strategic Outcome 2: A clean transportation system

To promote a clean transportation system, Transport Canada:

• advances the federal government’s Clean Air Agenda in the transportation sector and complements other federal programs designed to reduce air emissions to protect the health of Canadians and the environment for generations to come;
• protects the marine environment and the health of Canadians by reducing the pollution of water from transportation sources; and
• fulfils its responsibilities by working towards a cleaner and healthier environment with regard to its own operations.

Strategic Outcome 3: A safe transportation system

To promote a safe transportation system, Transport Canada:

• develops transportation safety regulations and oversees their implementation (e.g. safety at railway crossings);
• manages programs to:
  • support safety-related investments at small airports;
  • protect navigable waterways;
  • certify and license aircraft, vessels and road vehicles; and
  • provide air transport services that support aviation safety oversight work for federal and municipal clients (e.g. maintenance and operation of Canadian Coast Guard helicopters).

Strategic Outcome 4: A secure transportation system

To promote a secure transportation system, Transport Canada:

• develops policies and programs that respond to emerging security risks and keep Canada competitive (e.g. codes of practice for the rail and transit industry);
• develops and enforces transportation security regulations (e.g. standards for screening passengers at airports); and
• works with international and national partners towards a shared and effective transportation security agenda (e.g. standards for security plans at ports, harmonization of aviation security standards).

You will find details about individual program activity achievements in Section II: Analysis of Program Activity Performance by Strategic Outcome.

Program Activity Architecture

The Program Activity Architecture provides a standard basis for reporting to citizens and Parliament on the alignment of resources, program activities and results. Complementing its departmental performance management and reporting system, the Government of Canada has adopted a whole-of-government framework[1] for reporting to Parliament on progress made as a nation.

Figure 1 illustrates how Transport Canada’s Program Activity Architecture contributes to the broader Government of Canada outcome areas of strong economic growth; an innovative and knowledge-based economy; a clean and healthy environment; a fair and secure marketplace; and a safe and secure Canada. It also includes all program activities that contribute to our four departmental strategic outcomes. The Internal Services program activity, as an enabling function, supports all four strategic outcomes.

Figure 1: Transport Canada Program Activity Architecture

[Text version]

1.4 Contribution of Priorities to Strategic Outcomes

Transport Canada identified nine organizational priorities in its 2010-2011 Report on Plans and Priorities. These priorities addressed emerging and ongoing issues, which further strengthened the department’s approach to integrated decision making. The priorities are as follows:

• improve the effectiveness of safety management systems implementation;
• strengthen aviation security for passengers, workers and air cargo;
• complete the delivery of Canada’s Economic Action Plan to accelerate economic recovery;
• advance the implementation of the three gateway strategies (the Asia-Pacific Gateway and Corridor Initiative, the Continental Gateway and Trade Corridor Strategy, and the Atlantic Gateway and Trade Corridor Strategy) to support economic growth and competitiveness;
• continue to support the government’s Clean Air Agenda;
• develop a departmental approach for continuous improvement in the design, management, and delivery of grants and contributions programs;
• position Transport Canada to contribute to the Government of Canada’s initiatives to improve the federal regulatory system for major projects;
• strengthen the connection between people, resources and portfolio governance to deliver on the department’s priorities and mandate; and
• continue to support the public service renewal priority with a focus on talent management and employee engagement.

Transport Canada’s nine organizational priorities relate to one or more strategic outcomes. The department sets and/or revises priorities on an annual basis, informed by environmental scanning and corporate risks. It also aligns these priorities with Government of Canada commitments as stated in the Budget 2009 and the 2009 Speech from the Throne.

We have included the progress achieved for each priority in the following tables. First-time priorities are labelled as "new"; those committed to in the first or second fiscal year prior to this report are "previously committed to"; and older commitments are identified as "ongoing".

Performance Status Legend

Status	Definition
Exceeded	More than 100 percent of the expected level of performance for the priority identified in the corresponding Report on Plans and Priorities was achieved during the fiscal year.
Met All	One hundred percent of the expected level of performance for the priority identified in the corresponding Report on Plans and Priorities was achieved during the fiscal year.
Mostly Met	Eighty to 99 percent of the expected level of performance for the priority identified in the corresponding Report on Plans and Priorities was achieved during the fiscal year.
Somewhat Met	Sixty to 79 percent of the expected level of performance for the priority identified in the corresponding Report on Plans and Priorities was achieved during the fiscal year.
Not Met	Less than 60 percent of the expected level of performance for the priority identified in the corresponding Report on Plans and Priorities was achieved during the fiscal year.
In Progress	The indicator was under review during the 2010-2011fiscal year; therefore performance data is not available at the time of this report.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Improve the effectiveness of safety management systems implementation.	Ongoing	Mostly Met	To promote a safe transportation system
Summary of Accomplishments Conducted a review of the safety management systems regulations, which included consultations on implementation. This review identified several opportunities for improvement, resulting in the development of new training for inspectors in their role as auditors of safety management systems. Established the Inspectorate Advisory Board to the Deputy Minister to explore weaknesses in the implementation of safety management systems and monitor efforts to close identified gaps. Public consultations were held on a regulatory proposal to apply safety management systems regulations to the Canadian domestic fleet not subject to the International Convention for the Safety of Life at Sea (SOLAS), 1974.[2] Larger airports completed their final phase of safety management systems implementation while smaller airports are in the fourth and final phase of implementation. NAV Canada, the Canadian air navigation service provider, also completed all four phases of aviation safety management systems implementation. Work in Progress A review of the Railway Safety Management System Regulations will be considered pending completion of other regulatory priorities, including those resulting from the passage of proposed amendments to the Railway Safety Act. Continue to clarify the department’s roles and responsibilities in carrying out its oversight duties for implementing safety management systems. The Inspectorate Advisory Board to the Deputy Minister will make recommendations to address gaps in inspector training. Implementation of aviation safety management systems for small air operator certificate holders is being delayed to provide additional time to refine procedures, training and guidance material, based on the feedback received by inspectors and industry stakeholders.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Strengthen aviation security for passengers, workers and air cargo.	Previously Committed to	Met All	To promote a secure transportation system
Summary of Accomplishments The Government of Canada completed a review of the Canadian Air Transport Security Authority. The results, announced in February 2011, included recommended changes to airport screening that will increase convenience for the travelling public while maintaining a consistently high level of security. The Government of Canada committed to examining the effectiveness of passenger behaviour observation. The Canadian Air Transport Security Authority developed a program that it began to pilot in January 2011. The Air Cargo Security program has transitioned from a voluntary pilot project to a regulated program as a way to further enhance the reliability and security of the aviation system. Transport Canada led the development of an International Civil Aviation Organization initiative to develop enhanced international standards and approaches that reduce the threat of an attack on commercial aviation related to air cargo. In February 2011, Transport Canada published a notice of intent to reorganize and streamline the Canadian Aviation Security Regulations in the Canada Gazette, Part I.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Complete the delivery of the Economic Action Plan to accelerate the economic recovery.	New	Mostly Met	All Strategic Outcomes
Summary of Accomplishments Completed the majority of the department’s projects under Canada’s Economic Action Plan on time and on budget. These projects included investments in safer, faster and more reliable passenger rail services; improved airport security; safer and more efficient bridges; improved facilities to ensure motor vehicles are safe; more efficient border crossings; and increased protection of the health of Canadians and the environment by the assessment and cleaning of federal contaminated sites. Work in Progess Progress continues on rail safety projects to be implemented over five years. Some delays occurred due to human resources challenges and delays in amending the Railway Safety Act. via Rail continues to make progress on projects that will help modernize passenger rail services in Canada through improvements to passenger rail infrastructure, locomotives, cars, stations and related facilities, and is on schedule to complete the work in 2011-2012.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Advance the implementation of the three gateway strategies (the Asia-Pacific Gateway and Corridor Initiative, the Continental Gateway and Trade Corridor Strategy, and the Atlantic Gateway and Trade Corridor Strategy), including the new bridge crossing for Windsor-Detroit to support economic growth and competitiveness	Ongoing	Mostly Met	To promote an efficient transportation system
Summary of Accomplishments Strengthened international partnerships under the Asia-Pacific Gateway and Corridor Initiative and signed two agreements which includes six multimodal infrastructure projects in Western Canada, of which four began construction in 2010-2011. Under the Gateways and Border Crossings Fund, 16 new infrastructure commitments were made to improve the efficiency of the national transportation system. Announced the Atlantic Gateway and Trade Corridor Strategy on March 23, 2011. The value-added gateway policy approach delivered on two priority initiatives with the com-pletion of focused outreach workshops and awareness sessions across the country on Can-ada’s trade and tax advantages, and the announcement of the waiver of the 25-per-cent duty on the import of all general cargo vessels and tankers, as well as ferries longer than 129 metres. Most of the properties needed for the Windsor-Detroit International Crossing’s Canadian border inspection plaza and the bridge have been acquired. The environmental mitigation plan has advanced. The Government of Canada has informed the State of Michigan that Canada is prepared to increase its financial participation in the new Windsor-Detroit border crossing, up to a maximum of US$550 million. This is not a loan, but increased equity into the project. The US$550 million will cover project components in Michigan that would not be funded by the private sector or the United States Government. The Government of Canada would expect repayment from the anticipated toll revenues to be generated from the operation of the new bridge. Work in Progess Work is underway with the governments of Ontario and Quebec, as well as with the private sector, to finalize the Continental Gateway and Trade Corridor Strategy. Value-added gateway initiatives will continue to address complex issues that impact Canada’s attractiveness as a destination for foreign investment and trade activities. Progress is being made to build international partnerships in Asia, Europe and Latin America through engagement and trade missions that align with Canada’s global commerce strategy and ongoing trade negotiations.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Continue to support the government’s Clean Air Agenda.	Previously Committed to	Mostly Met	To promote a clean transportation system
Summary of Accomplishments Work continued on proposed locomotive emissions regulations for criteria air contaminants under the Railway Safety Act that will be aligned with U.S. regulations. Transport Canada held a number of preliminary stakeholder consultations and information sessions. The department contributed to work by the International Civil Aviation Organization that led to the new Assembly Resolution on International Aviation and Climate Change for emissions, adopted by over 190 member states in October 2010. Active engagement with the Committee on Aviation Environmental Protection continued through: participation in the Steering Group; the Working Group tasked with developing a new CO2 standard for airplanes; and the support group responsible for the economic analysis of the eventual proposal; and The lead role in developing a new International Civil Aviation Organization manual to reduce CO2 and other emissions from aircraft operations. Contributed to the development of international standards and recommended practices at the International Maritime Organization to address greenhouse gas and air pollutant emissions from marine shipping sources through regulation, technical measures and market-based measures. Technical standards to reduce greenhouse gas emissions from ships are expected to be adopted by the International Maritime Organization in 2011. The ecotechnology for Vehicles Program and the ecofreight Program ended in 2010-2011 as planned, having provided important support for the introduction of new clean transportation technologies. Work in Progress The department continues to advance the development of air emissions regulations for vessels operating in the North American Emission Control Area and for vessels operating in the Great Lakes and St. Lawrence Seaway System, to be implemented August 2012. A regional working group was established to develop a program to regulate smaller marine diesel engines on vessels operating on coasts and inland waters. The Marine Shore Power Program and the ecomobility Program will be concluded as planned by March 31, 2012.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Develop a departmental approach for the continuous improvement in the design, management and delivery of grants and contributions programs.	New	Mostly Met	All Strategic Outcomes
Summary of Accomplishments Reviewed the department’s approach to grants and contributions programs, and implemented a department-wide process to improve how they are designed and delivered. This process produced numerous new tools, such as: the new Program Excellence Advisory Committee comprised of senior departmental officials to provide strategic advice on best practices to design, implement and deliver programs; new program management approaches, including program and recipient project risk assessment tools that will reduce the administrative burden within the department and on low-risk recipients; and a departmental training program to ensure employees understand the essentials of program design and delivery. Work in Progess Continue to advance the establishment of the Centre of Expertise on Transfer Payments to work with program managers to integrate new approaches and tools into program operations. Continue to integrate the Program Excellence Advisory Committee into the department’s governance structure to ensure alignment with the department’s policies and Performance Measurement Framework. Complete employee training in managing transfer payment programs and provide support to practitioners to enhance their knowledge and understanding of best practices and lessons learned.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Position Transport Canada to contribute to the Government of Canada’s initiatives to improve the federal regulatory system for major projects	New	Exceeded	To promote a clean transportation system
Summary of Accomplishments Assisted in the development government-wide procedures, guidance and project agreements to govern the environmental assessments, aboriginal consultations and regulatory reviews regarding the 71 major resource projects being coordinated through the Major Projects Management Office. Successfully met departmental service commitments related to the environmental assessment and regulatory phases of the Major Projects Management Office’s major resource projects and, in some cases, exceed targets for overall project review timelines. Contributed to the Government of Canada initiatives through the Exclusion List Regulations made permanent in the Canadian Environmental Assessment Act through the March 2010 Jobs and Economic Growth Act. Identified and began implementing a range of regulatory and administrative actions to improve the timeliness and predictability of the department’s regulatory review process.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Strengthen our connection of people, resources and portfolio governance to deliver on priorities and mandate, and streamline administrative processes.	Previously Committed to	Mostly Met	All Strategic Outcomes
Summary of Accomplishments Transport Canada developed and adopted a new executive committee structure that is aligned with the department’s Program Activity Architecture and strategic outcomes. This structure provides a model of management that is integrated with a strategic decision-making process. It sets out the roles, responsibilities and accountabilities for achieving results while maintaining the department’s current organizational structure and the accountabilities for the financial, people management and work environment aspects of program delivery. Through the Working Better at Transport Canada initiative, the department prepared a strategy to pursue more effective and efficient internal processes that reduce the administrative burden. More than 150 suggestions were received from employees and assessed by an evaluation committee. Implemented a number of initiatives to improve information sharing and collaboration internally and between the department and its Crown corporations. The department worked with Crown corporations in developing and carrying out decisions related to their strategic reviews. Work in Progress Continue to implement recommendations for improving portfolio governance in 2011-2012. Continue to implement the Working Better initiative by selecting and implementing a number of employee suggested projects to reduce the "web of rules" at Transport Canada.

Priority	Type	Status	Linkages to Strategic Outcome(s)
Continue to support the public service renewal priority with a focus on talent management and employee engagement.	Previously Committed to	Mostly Met	Internal Services
Summary of Accomplishments Integrated the Executive Talent Management Program with the Executive Performance Management Program. Renewed the Transport Canada Employee Performance Management Program, replacing a policy that dated back to 1991. Developed the StrategYX action plan based on an online employee engagement survey conducted in the fall of 2010,[3] national workshops, and online Idea Plaza suggestions to inform decision-making on how to recruit and retain next generation employees at Transport Canada. Completed a number of Recruitment and Development programs that can now be used to support capacity building, knowledge transfer and employee engagement. Work in Progress The renewal of the Employee Performance Management Program is almost complete. New tools are being developed to foster renewal by encouraging ongoing dialogue between employees and supervisors on contributions, performance, and expected and actual results. The department is developing an implementation plan address the StrategYX action plan recommendations.

1.5 Risk Analysis

Transportation is a part of all social and economic activities. It provides market access to natural resources, agricultural products and manufactured goods, provides support to service industries and links communities. Canada’s multi-modal transportation network includes 38,000 kilometres (km) of important national and regional highways, 21 million registered vehicles, 243,000 km of shoreline, over 49,000 ships, 30,000 aircrafts and 45,000 km of rail. In addition to the inherent risks due to its breadth, risks are introduced into the transportation system by its complex structure, including multiple jurisdictions of government interacting with private-sector stakeholders and consumers. These complexities, as well as changes to the department’s role as a more policy- and partnership-based organization, require Transport Canada to effectively manage risk as it pursues its strategic outcomes.

Risk Analysis Approach

Transport Canada has implemented a strong risk management governance structure outlined in its new Integrated Risk Management Policy that aims to promote the systematic integration of risk management practices to respond to unforeseen events and risks that have been identified in its Corporate Risk Profile.

It has improved the sharing of risk information between strategic, operations, program and project levels through the creation of a Departmental Risk Management Working Group that has representation from all groups and regions. This venue also serves to review, contribute to and promote department-wide integrated risk management initiatives. Further, a Centre of Expertise in Risk Management has been established to provide ongoing support to management and employees in promoting a consistent approach to risk identification, assessment and response.

Key Risk Areas

Through an environmental scan and department-wide consultations, four key risk areas have been identified and assessed in terms of probability and potential impact on the department and reported in the department’s Corporate Risk Profile. The four key risk areas are transportation system efficiency, oversight effectiveness and efficiency, security threat/incident response capability and change management. For each of these key risk areas, Transport Canada has developed risk responses that will be implemented over the next few years.

1. Security/Incident Response Capability

As Canada remains a potential target of terrorists, Transport Canada continues to develop and implement security mitigation strategies. We have adopted a proactive approach that engages relevant internal and external partners and stakeholders while dealing with emerging threats to maintain the safety and security of Canada’s transportation system. For example, Budget 2010 provided the Canadian Air Transport Security Authority and Transport Canada with $1.5 billion over the next five years to strengthen the domestic air transportation system against terrorist attacks and enhance the protection of air travellers. Budget 2010 also provided $95.7 million for the Air Cargo Security program to further enhance preventative and detective measures to deal with emerging threats. This year, Transport Canada had to respond to the discovery of suspicious packages aboard two planes in transit to the United States on October 29, 2010. In response to this event, a threat and risk assessment was immediately conducted in cooperation with other government departments. The results of the threat and risk assessment led to the expansion of the Air Cargo Security program to include in-bound air cargo and a re-profiling of 7% of Aviation Security’s budget. The expansion of the Air Cargo Security program also resulted in the delay and/or cancellation of lower priority activities as well as staffing and contracting actions in order to make the adjustments.

2. Oversight Effectiveness and Efficiency

In a complex environment that includes multiple jurisdictions, growing traffic, competing environmental and economic demands, rapidly evolving technologies and the constant threat of terrorism, it is becoming increasingly challenging to ensure that Transport Canada is well positioned for the oversight of the national transportation system. In response to this risk, the department is reviewing the regulatory framework to ensure it remains current and efficient and that its inspectors and policy makers have the necessary tools and skills development to fulfill their role.

3. Change Management/Managing Transition

The effective management of change, and the pace of change, contributes to Transport Canada’s ability to achieve its strategic outcomes. A key response to this risk is building synergy and cohesion between new governance structures and current functional and regional practices while enabling results-based management. The department has been working on the development of its Integrated Business Plan to better support the achievement of its priorities and strategic outcomes and in strengthening its risk management practices to contribute to its overall performance.

4. Transportation System Efficiency

To ensure that Canada’s transportation network continues to meet the needs of Canadians, the Government of Canada and its partners have made significant investments in transportation infrastructure through strategic gateways and trade corridors and through the Economic Action Plan. Transport Canada continued to take a robust risk management approach to monitoring the delivery of supporting initiatives. Quarterly progress reports are made to the Transport Executive Committee and Departmental Audit Committee, providing risk-based information for timely adjustments to achieve the objectives of Canada’s Economic Action Plan. Further, through its Program Excellence initiative, the department improved the integration of sound risk information when delivering all grants and contribution programs by developing the Transfer Payment Integrated Risk Management Framework, the Project and Recipient Risk Assessment Tool and the risk-based recipient auditing strategy. This initiative reduces the administrative burden within the department and on low-risk recipients.

1.6 Summary of Performance Tables by Strategic Outcome and Internal Services

Strategic Outcome 1: An Efficient Transportation System

Performance Indicators	Targets	2010-11 Performance
Level of productivity of transportation sector	Increase by 2.5 percent to 5 percent relative to 2009 baseline (Productivity Index >113 in 2014)	Most recent figures are from the 2009 calendar year. The productivity of the transportation business sector decreased by 6.2 percent (for-hire trucking was not included, as figures are being updated). This was primarily due to decreased demand caused by the economic recession. Carriers did not adjust inputs enough to offset the decline in output.
Cost level in the transportation sector	Growth in unit costs does not exceed 11 percent over a five-year horizon relative to the 2009 baseline (Cost Index < 111 in 2014)	Unit costs, for the same subset, decreased by 0.5 percent. The reduction was due to much lower fuel prices in 2009 than 2008, but increases in other input prices moderated the overall unit cost decrease.

Program Activity	Actual Spending ($ millions) 2009-2010	Planned Spending ($ millions) 2010-2011				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Transportation Marketplace Frameworks	11	9	9	11	10	A fair and secure marketplace
Gateways and Corridors	156	812	812	805	243	Strong economic growth
Transportation Infrastructure	46	297	310	322	282	Strong economic growth
Transportation Innovation	7	14	14	16	11	An innovative and knowledge-based economy
Total*	220	1 132	1 146	1 154	546

*Due to rounding, columns may not add to the totals shown.

Information on Variances (between Total Authorities and Actual Spending) at the Program Activity Level

Transportation Marketplace Frameworks:  As a result of shifting priorities, work and resources originally planned for this program activity were undertaken by another program activity, Internal Services.

Gateways and Corridors:  The variance of $562 million is partly due to delays in several projects under the Asia-Pacific Gateway and Corridor Initiative that account for $110.9 million of the variance. There were delays related to project design, approval and construction starts, as well as the need to secure additional funding partners, finalize the contribution agreements and, ensure due diligence.

The remainder of the variance, $450M, can be attributed to delays under the Gateways and Border Crossings Fund, as some projects progressed more slowly than anticipated in 2010-2011. Many factors influenced these delays, including severe weather hampering construction, and unanticipated challenges in the design and regulatory approval processes. In addition, lower-than-expected construction costs resulted in lower spending for a few projects. Finally, for certain announced projects, business cases were not received when expected, which delayed the federal due diligence process. These funds have been or will be moved to future years for the completion of projects.

Transportation Infrastructure:  The variance of $40 million is due, in part, to delays in projects resulting from extended negotiations, setbacks in construction caused by adverse weather conditions and/or prolonged environmental assessments. As a result, the department re-profiled $32 million to subsequent fiscal years to align with the recipients’ cashflow needs. The remainder is related to the surplus from 2010-2011 due to various factors.

Transportation Innovation: A number of variables linked to developing and managing research partnerships contributed to the approximately $5-million variance for this program activity during 2010-2011. More than half the total, approximately $2.6 million, in Security and Prosperity Partnership funding was re-profiled due, in part, to delays in securing Treasury Board approval of the program’s terms and conditions. Other factors include delays in reaching funding agreements with recipients, and research partners’ focus on stimulus funding that left limited resources, both financial and personnel, to access the available Security and Prosperity Partnership funding.

Strategic Outcome 2: A Clean Transportation System

Performance Indicators	Targets	2010-11 Performance
Level of greenhouse gas emissions from the transportation sector measured in tonnes of CO2 equivalent, pollutant emissions and discharges from the transportation sector	Greenhouse gas emission levels from the transportation sector consistent with Government of Canada targets	Transportation greenhouse gas emissions remained relatively unchanged in 2008 as compared to 2007 (around 171 mega tonnes of CO2 equivalent in both 2008[4] and 2007).
Level of compliance with applicable laws, regulations and guidelines	Full compliance with applicable laws, regulations and guidelines	Transport Canada was in compliance with applicable environmental legislation, regulations and guidelines, and did not receive any contravention notices.

Program Activity	2009-2010 Actual Spending ($ millions)	2010-11 ($ millions)				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Clean Air from Transportation	19	23	23	19	17	A clean and healthy environment
Clean Water from Transportation	10	6	6	7	8	A clean and healthy environment
Environmental Stewardship	38	70	70	59	40	A clean and healthy environment
Total*	67	99	99	85	65

*Due to rounding, columns may not add to the totals shown.

Information on Variances (between Total Authorities and Actual Spending) at the Program Activity Level

Clean Air from Transportation:  Some freight projects were delayed due to negotiation with proponents or re-scoped to reduce costs as a result of the economic downturn; lack of uptake of funding available to provinces under the National Harmonization Initiative for the Trucking Industry Program; the cancellation of funding rounds for the Moving on Sustainable Transportation program and the ecomobility Program; and staffing and project delays.

Clean Water from Transportation:  The variance of $1 million is mainly due to Transport Canada’s decision to continue the delivery of the National Aerial Surveillance Program.

Environmental Stewardship of Transportation:  The variance of $19 million is due to a $7.4 million surplus of Federal Contaminated Sites Action Plan funding that was accelerated under Canada’s Economic Action Plan. The surplus reflects more cost-effective remedial approaches and lower-than-expected tender prices. In addition, an $11.7 million surplus of funding not related to Canada’s Economic Action Plan is due primarily to project delays. Additional investigative work was required before remediation could proceed.

Strategic Outcome 3: A Safe Transportation System

Performance Indicators	Targets	2010-11 Performance
Number/rate of accidents or fatalities by mode	Maintain or improve accident/fatality rates by mode, based on each mode’s strategic objectives	Compared with the preceding five-year average, current accident/fatality rates were maintained or improved in aviation, marine, rail and road. There was a 4-per-cent increase in reported accidents and there were zero deaths in the transportation of dangerous goods. Additional information can be found in the Transportation in Canada 2010 report.
Percentage of respondents to a national survey reporting confidence in the safety of the transportation system	Maintain or improve public confidence in the safety of transportation, based on the strategic objectives of each mode	No surveys were conducted in 2010-2011. This indicator is currently under review.

Program Activity	Actual Spending ($ millions) 2009-2010	Planned Spending ($ millions) 2010-2011				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Aviation Safety	231	240	240	253	211	Safe and secure Canada
Marine Safety	82	74	74	84	83	Safe and secure Canada
Rail Safety	37	36	36	34	31	Safe and secure Canada
Road Safety	30	40	40	42	42	Safe and secure Canada
Transportation of Dangerous Goods	14	14	14	14	14	Safe and secure Canada
Total	394	405	405	428	381

*Due to rounding, columns may not add to the totals shown.

Information on Variances (between Total Authorities and Actual Spending) at the Program Activity Level

Aviation Safety:  The variance of $42 million is due to the delay in the approval of the Airports Capital Assistance Program; contracting delays related to capital projects; increased revenue related to Transport Canada’s participation in the Louisiana Oil Spill Response Project; and staffing delays.

Rail Safety:  The variance of $3.0 million is due to delays in completing Grade Crossing Improvement and Closure projects; staffing; and completing amendments to the Railway Safety Act.

Strategic Outcome 4: A Secure Transportation System

Performance Indicators	Targets	2010-11 Performance
Number of adjustments made to the Canadian Regulatory Framework to achieve international acceptance	Two adjustments or less to the Canadian Regulatory Framework to achieve international acceptance	Two adjustments were made to the Canadian Regulatory Framework to improve aviation security in the area of air cargo.
Percentage of Canadians reporting to confident in the security of the transportation system	Maintain or improve confidence in the security of the transportation system, based on the strategic objectives of each mode	No public confidence data for the security of the transportation system were gathered in 2010. However, a Marine Industry Stakeholder survey was completed in 2010-2011 in which 93 percent of stakeholders agreed that a Marine Security program is needed in Canada. Stakeholders further agreed that their organizations were prepared to detect and prevent marine threats and incidents (79 percent), and to respond and recover (93 percent).

Program Activity	Actual Spending ($ millions) 2009-2010	2010-11 ($ millions)				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Aviation Security	71	29	29	49	43	Safe and secure communities
Marine Security	32	21	21	21	20	Safe and secure communities
Surface and Intermodal Security	12	6	7	7	7	Safe and secure communities
Total	115	56	57	77	70

*Due to rounding, columns may not add to the totals shown.

Information on Variances (between Total Authorities and Actual Spending) at the Program Activity Level

Aviation Security:  The variance of $6.0 million is a result of postponing several activities (including regulatory consultations, airport security assessments, and two technology test beds) due to the need to respond to the discovery of suspicious packages aboard two planes in transit to the United States on October 29, 2010. Timelines and activities were adjusted to quickly respond to this incident in an effective and efficient manner to protect the security of Canadians.

Marine Security:  The variance is related primarily to transfers to other departments that did not take place during Supplementary Estimates "C" — $120,000 in the Marine Security Coordination Fund and $442,000 for the Coastal Marine Security Operations Centre. The remaining amount relates to delays to the opening of the Great Lakes Marine Security Operations Centre because of staffing issues.

Internal Services

Performance Indicators	Targets	2010-2011 Performance
Not applicable	Not applicable	Internal Services has no performance indicators to report on for the 2010-2011 reporting year. Indicator currently under development.

Program Activity	Actual Spending ($ millions) 2009-2010	2010-11 ($ millions)
		Main Estimates	Planned Spending	Total Authorities	Actual Spending	Alignment to Government of Canada Outcomes
Internal Services	217	175	177	212	227

*Due to rounding, columns may not add to the totals shown.

Information on Variances (Between Total Authorities and Actual Spending)

The variance is attributed to extraordinary salaries, such as maternity and severance pay, not being refunded in time from the Treasury Board because of Parliament’s dissolution before the end of the fiscal year ($6.8 million). The balance of the surplus is due to internal reallocations within Transport Canada and realignments across strategic outcomes.

1.7 Expenditure Profile

1.7.1 Departmental Spending Trend

Figure 1 shows Transport Canada’s expenditures (planned, authorized and actual) from 2008-2009 to 2010-2011. The difference in actual spending, from $1,040 million in 2008-2009 to $1,288 million in 2010-2011, is due primarily to a change in the method of accounting for Airport Authorities lease payments. The change, however, does not impact the overall gross amount available to spend by the department.[5] The increase in actual spending is also attributed to major initiatives within the department over the same period, such as the Asia-Pacific Gateway and Corridor Initiative, and the Gateways and Border Crossings Fund. Although mostly in an upward trend over the past three years, there was a decrease in spending, due mainly to sunsetting of the ecoAUTO Rebate program.

Figure 1: Spending Trend for Transport Canada

[Text version]

Canada’s Economic Action Plan

The following table identifies the department’s initiatives and funding under Canada’s Economic Action Plan. Information on progress for these initiatives is found in Section II under each program activity.

Spending on Canada’s Economic Action Plan Initiatives

Initiative	Authorized Spending ($ millions)
	2009-2010	2010-2011	2011-2012	2012-2013	2013-2014	Total
Blue Water and Peace Bridges	3.3	11.2				14.5
Remote Passenger Rail Services	4.5	3.4				7.9
Accelerating Federal Contaminated Sites Action Plan	13.0	35.5				48.5
Rail Safety Initiatives	11.3	14.1	14.4	14.3	14.3	68.4
Modernization of Federal Laboratories	4.5	9.7				14.2
Security Plans	2.7					2.7
Air Cargo Security Program	11.0					11.0
Promoting Energy Development in Canada’s North	2.9					2.9
Total	53.2	73.9	14.4	14.3	14.3	170.0

*Based on original allocation as per Treasury Board. Includes Employee Benefits Plan.

Note: Due to rounding, column totals shown may not be exact. As with all financial information in the Departmental Performance Report, the figures exclude funding that does not come to the department (e.g. accommodation). Authorized spending is based on the original allocations as per the Treasury Board’s decision.

1.7.2 Voted and Statutory Items

See the Public Accounts of Canada for 2010-2011 (Volume II) for information on Transport Canada’s organizational votes and/or statutory expenditures.

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