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2010-11
Departmental Performance Report

Natural Resources Canada

The original version was signed by
The Honourable Joe Oliver
Minister of Natural Resources

Table of Contents

Minister's Message

Section I: Organizational Overview

• Raison d'être
• Responsibilities
• Strategic Outcome(s) and Program Activity Architecture (PAA)
• Organizational Priorities
• Risk Analysis
• Summary of Performance
• Expenditure Profile
• Estimates by Vote

Section II: Analysis of Program Activities by Strategic Outcome

• Strategic Outcome 1: Economic Competitiveness
  • Program Activity 1.1: Economic Opportunities for Natural Resources
  • Program Activity 1.2: Natural Resource-Based Communities
• Strategic Outcome 2: Environmental Responsibility
  • Program Activity 2.1: Clean Energy
  • Program Activity 2.2: Ecosystem Risk Management
• Strategic Outcome 3: Safety, Security and Stewardship
  • Program Activity 3.1: Adapting to a Changing Climate and Hazards Risk Management
  • Program Activity 3.2: Natural Resources and Landmass Knowledge and Systems
  • Program Activity 3.3: Geomatics Canada Revolving Fund
• Strategic Outcome 4.1: Internal Services
• Delivering on Canada's Economic Plan (EAP)

Section III: Supplementary Information

• Financial Highlights
• Financial Statements
• List of Supplementary Information Tables

Section IV: Other Items of Interest

• Contributions to the Federal Sustainable Development Strategy
• Endnotes

Minister's Message

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.

Section I: Organizational Overview

Raison d’être

Responsibilities

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:

• Atomic Energy of Canada Limited⁶;
  
  
• Two independent regulators: the National Energy Board⁷ and the Canadian Nuclear Safety Commission⁸;
  
  
• Two offshore petroleum boards: the Canada-Newfoundland and Labrador Offshore Petroleum Board⁹ and the Canada-Nova Scotia Offshore Petroleum Board¹⁰;
  
  
• Sustainable Development Technology Canada¹¹, the Energy Supplies Allocation Board¹², and the Northern Pipeline Agency¹³.

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.

Strategic Outcomes and Program Activity Architecture

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:

• Narrow socio-economic and technical measures;
  
  
• Measures of knowledge and innovation¹⁵; and,
  
  
• Service standards.

In cases where the Department is reporting on highly specific outcomes (e.g., data on natural hazards), activity-specific performance targets have been established.

Organizational Priorities

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:

• Exceeded: More than 100 percent of the expected level of performance for the priority identified in the corresponding RPP was achieved during the fiscal year.
  
  
• Met All: 100 percent of the expected level of performance for the priority identified in the corresponding RPP was achieved during the fiscal year.
  
  
• Mostly Met: 80 to 99 percent of the expected level of performance for the priority identified in the corresponding RPP was achieved during the fiscal year.
  
  
• Somewhat Met: 60 to 79 percent of the expected level of performance for the priority identified in the corresponding RPP was achieved during the fiscal year.
  
  

Risk Analysis

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

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.

Summary of Performance

Departmental Overview

Performance by Strategic Outcome

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.

Internal Services

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. 

Expenditure Profile

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.

Departmental Spending Trends

Text Version - Departmental Spending Trends

NRCan’s total actual spending for 2010-11 was $4.357 billion.

• This included $2.103 billion for the statutory programs for the Atlantic Offshore Accords. NRCan receives royalties for offshore oil and gas production and subsequently pays an equal amount to the provinces of Nova Scotia and Newfoundland and Labrador.

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:

• Increased funding to deliver on Canada’s Economic Action Plan (with programs such as ecoENERGY Retrofit Homes and the Clean Energy Fund – see p. 36 for more information on NRCan’s Economic Action Plan programs).
  
  
• Increased funding for other key NRCan programs such as the Pulp and Paper Green Transformation Program.

Estimates by Vote

For information on our organizational votes and/or statutory expenditures, please see the 2010–11 Public Accounts of Canada ⁴⁸ (Volume II) publication.

Voted and Statutory Items ($ millions)

Section II: Analysis of Program Activities by Strategic Outcome

This section provides performance information on the delivery of programs that were critical to the realization of our strategic outcomes and priorities in 2010-11. During the reporting period, NRCan monitored and tracked progress through quarterly reviews, which enabled early detection of problem areas and, wherever possible, the implementation of corrective actions to deliver expected results in accordance to plans, timelines and budgets.

NRCan also updated its performance indicators in order to support improved performance management and decision-making, and provide more accurate and balanced performance information to Parliament and Canadians. As a result, performance indicators in this document differ slightly from those published in the corresponding 2010-11 Report on Plans and Priorities.⁴⁹

More information about these programs and initiatives, as well as supporting evidence from internal evaluation and audit reports, can be found on our website⁵⁰.

Strategic Outcome 1 - Economic Competitiveness

[Text Version Strategic Outcome 1]

NRCan works to contribute to the economic competitiveness of natural resources by:

• Increasing access to new and existing markets by contributing to the reduction of trade barriers and ensuring that regulations are up-to-date;
• Maximizing productivity and decreasing dependency on the sale of traditional products by encouraging natural resources sectors to adopt new technologies and processes and develop new products; and,
• Encouraging investments in the natural resource sectors by decreasing the risk of development and increasing knowledge on opportunities.

Program Activity 1.1: Economic Opportunities for Natural Resources

The program activity contains programs designed to promote innovation, investment, and the enhancement of the competitiveness of Canada's natural resources and related products industries through the provision of know-how and tools, including base geo-science information, along with trade promotion and market acceptance, at home and abroad. This group of programs also delivers policies, regulations and legislative work to manage federal responsibilities associated with Canada's oil and natural gas supply, protecting the critical energy infrastructure, and managing statutory programs for the Atlantic offshore.

Performance Summary and Analysis of Program Activity

The level of investment in Canada’s natural resource sectors is a leading indicator of the natural resource sectors’ competitiveness. This Program Activity includes programs aimed at increasing market access, innovation and investments, three critical dimensions of competitiveness. By reducing trade and policy barriers, promoting Canadian products abroad, optimizing the use of our natural resources, increasing productivity and encouraging investments, NRCan is supporting the competitiveness of our natural resource sectors.

The economic downturn of 2008 and 2009 slowed down growth and investments in natural resources. By mid-2009, however, Canada was showing signs of economic recovery and natural resources have proven to be a strong engine of this growth. In fact, 2010 has witnessed an increase in investments in oil and gas and in mining, with capital and exploration investments increasing more than 10% from the 2009 levels. The forest sector is also showing signs of recovery after years of structural and cyclical shocks. Canada’s natural resources will continue to be key contributors to the country’s economy, and the growing demand for natural resources, coupled with higher commodity prices (oil, mineral and metals), is expected to lead to a positive long term trend in investments in natural resources.

Key achievements in 2010-11 include:

• In support of the forest sector, NRCan’s efforts to diversify export markets for Canadian wood products has helped cushion Canada’s forest sector from what has been a severe contraction over the past few years in its traditional export markets. Programs such as the Canada Wood Export Program⁵¹ and the North American Wood First Initiative⁵² have contributed to the diversification of wood export markets, and have led to an increase in wood exports. Programs such as the Value to Wood Program⁵³ and the Leadership for Environmental Advantage in Forestry have contributed to productivity gains and an increase in the environmental credentials of Canada’s forest products.
  
  
• The Geo-mapping for Energy and Minerals⁵⁴ (GEM) program and the Targeted Geoscience Initiative⁵⁵ have led to the discovery of prospective exploration sites. By reducing the exploration risk, these programs are stimulating new mining and energy exploration and development and encouraging investments in Canada’s natural resources.
  
  
• Finally, through various regulatory, trade promotion, and policy activities, NRCan promoted investment and competitiveness in the oil and gas sector, which is now the highest revenue-generating sector in the Canadian economy.

Lessons Learned

An evaluation⁵⁶ of the Forest Innovation and Forest Research Institutes Initiative was completed in 2010. In particular, it included an assessment of the integration of Canadian forest research institutes into the world’s largest forest research organization, FPInnovations⁵⁷. Findings indicated that these programs are cost-effective, relevant to federal and NRCan priorities, and successful in meeting their expected results. FPInnovations developed a five-year Innovation Strategy in response to a recommendation included in the evaluation to update the long-term research plan for the forest sector in consultation with appropriate stakeholders.

While NRCan’s GEM program was generally successful at ensuring Northerners were involved in all stages of project planning and implementation, improvements were made in 2010-11 to better incorporate community-based knowledge into project planning. Collaborative engagement sessions were held in consultation with regional advisory groups and communities to exchange information and incorporate local knowledge, enhancing program efficiencies and addressing local interests, customs and environmental concerns, such as migration patterns.

Program Activity 1.2: Natural Resource-Based Communities

This program activity is targeted to increase Canada's knowledge of the impacts of the resource sectors on communities that have a substantial reliance on resource-based industries and to improve the capacity and knowledge for increasing the number of opportunities through value-added products and services. This group of programs is designed to improve the social well-being of Canadians. It is also about promoting Aboriginal and non-Aboriginal participation, improving skills, capacity and community stability through, for example, the Forest Community Program, the First Nations Forestry Program, and the Mines Ministers federal/provincial and territorial Framework for Action.

Performance Summary and Analysis of Program Activity

Natural resources are central to the economy of many rural communities across Canada, and the natural resource sectors are among the largest private employers of Aboriginal peoples. While recent economic conditions and broader forest sector restructuring have led to job losses, NRCan is working with natural resources-based communities across Canada to help mitigate and alleviate the short term economic effects of forest sector transition and reduced investments in natural resources. This will strengthen the resiliency of natural resource-based communities and increase their capacity to benefit from an evolving natural resource economy. NRCan supports this through:

• The development and implementation of innovative / leading-edge community economic development projects to help ensure long term economic sustainability;
  
  
• Outreach activities in communities to support capacity-building and help create a more positive investment climate; and,
  
  
• The development and dissemination of knowledge and information tools about the natural resource sectors and their contribution to the well-being of communities - including Aboriginal engagement - which helps inform decision-making.

For example, the First Nations Forestry Program⁵⁹ supported partnership projects across Canada in all aspects of sustainable forest management, knowledge and technology transfer, business opportunity facilitation and training support for specialized forestry technical training and work experience. The program successfully leveraged investments from communities and other partners, exceeding the program’s target of generating 1:1 contributions from other funding partners.

The Forest Communities Program⁶⁰ supported more than 100 community-based economic development projects and initiatives at 11 forest community sites across Canada, with projects ranging from innovative bio-energy/biomass research, development and implementation to youth training and skills development initiatives. The program has also been successful in leveraging investments from partners, exceeding its target of generating 1:1 contributions from other funding partners.

NRCan worked with provincial partners and led a collaborative, multi-stakeholder research project to examine the economic, social and environmental performance of the mining sector in Canada. The report that ensued, Mining Sector Performance Report 1998-2008⁶¹, can be used by communities to understand the opportunities, challenges and risks associated with resource development and provides a baseline to measure future progress.

Strategic Outcome 2 - Environmental Responsibility

Text Version - Strategic Outcome 2

NRCan works to ensure that natural resources are developed and used in an environmentally responsible manner by:

• Encouraging and enabling energy consumers and producers to adopt cleaner and more efficient technologies, products, services and practices;
• Encouraging academia, industry and the public sector to research, develop and demonstrate innovative solutions to environmental challenges; and,
• Enabling government departments, regulatory bodies and industry to understand the risks to our environment, assess environmental impacts and protect our resources.

Program Activity 2.1: Clean Energy

The program activity includes the development and delivery of energy science and technology, policies, programs, legislation and regulations to mitigate air emissions and to reduce other environmental impacts associated with energy production and use. One of the major programs includes the suite of initiatives on clean energy announced under the banner of ecoENERGY, which is intended to increase production of low impact renewable energy; encourage and assist Canadians to improve their energy use in all of the major end-use sectors; and to accelerate the development and market readiness of technology solutions to reduce environmental impacts associated with the production and use of energy.

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. 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 Summary and Analysis of Program Activity

In support of energy efficiency, NRCan encouraged and enabled energy consumers and producers to adopt more efficient technologies, products, services and practices. To enable technology innovations, NRCan conducted S&T activities and encouraged academia, industry and the public sector to research, develop and demonstrate innovative solutions to environmental challenges encountered in the natural resource sectors. The objective is to increase energy efficiency, reduce energy costs for Canadians, reduce the emissions of GHGs and other air contaminants and toxic substances arising from energy production, and increase the production and efficient use of renewable energy. In 2010-11, this was achieved through:

• Successful and popular programs under the ecoENERGY Efficiency Initiative (e.g. ecoENERGY Retrofit, ecoENERGY for Buildings and Houses, ecoENERGY for Industry, ecoENERGY for Equipment, ecoENERGY for Fleets and ecoENERGY for Personal Vehicles) which have promoted smarter energy use by Canadians and Canadian firms, thereby reducing GHG emissions. Overall in 2010-11, NRCan’s energy efficiency programming resulted in energy savings of approximately 82 petajoules, which represents a cumulative annual reduction of more than 6 megatonnes of GHG emissions.
  
  
• Other programs under the ecoENERGY banner (e.g. ecoENERGY for Biofuels, ecoENERGY Heat and ecoENERGY Power) have contributed to an increased production of renewable heat and power and increased use of alternative fuels. The renewables programming contributed to reducing GHG emissions by more than four and a half megatonnes in 2010-11. Through the ecoENERGY for Biofuels⁶² program, 31 contribution agreements were signed to both reduce GHG emissions resulting from fuel use and provide new market opportunities for agricultural producers and rural communities. Similarly, with support of the ecoENERGY for Renewable Power program, more than 4,458 megawatts of new renewable power generating capacity will contribute to reducing the GHG emissions resulting from electricity generation and to providing local economic opportunities.
  
  
• Research, Development and Demonstration activities, in part funded through the Clean Energy Fund⁶³, focussed on a limited set of priorities in the areas of clean fossil fuels; clean integrated electricity including clean coal, carbon capture and storage, distributed power generation, next generation nuclear; bio based energy systems; low emission industrial systems; clean transportation systems; and the built environment, several of which encompass renewable energy. Progress on specific projects this year include:
  
  
  • Undertaking the design work on three large-scale Carbon Capture and Storage demonstration projects;
  • Providing expert advice to develop regulations under the Canadian Environmental Protection Act to limit greenhouse gas emissions from coal-fired power plants (final publication is expected in 2011-12); and,
  • Publishing Canada's Electric Vehicle Technology Roadmap⁶⁴, which focuses on the development and adoption of electric vehicles in Canada, while building a robust industry. 
• The development and testing of new materials, such as high-strength steels and magnesium technologies, with a view of increasing energy efficiency and clean air in the automotive and nuclear sectors (through the Vehicle Structural Materials Program ⁶⁵ and the Materials for Nuclear and Conventional Energy Program⁶⁶). In the long term, adoption of new lightweight materials for automotive applications will result in a reduction of GHG emissions (lighter vehicles meaning less energy consumed, and less GHG emitted).
  
  
• The Pulp and Paper Green Transformation Program⁶⁷, which works to improve environmental performance of Canada’s pulp and paper sector. By investing in capital projects with measurable environmental benefits, the Department is contributing to the generation of a significant amount of new renewable energy, improved energy efficiency for the mills and reduced greenhouse gas emissions in mills across Canada. In addition, by improving the environmental performance of Canadian pulp and paper mills, the program enhances the long-run sustainability on which this industry, and the communities in which it operates, depend.

Lessons Learned

NRCan completed a robust assessment ⁶⁸ of the effectiveness of its clean energy and energy efficiency initiatives. Overall it concluded that the programs were relevant, making progress towards achieving their expected results, and that they were consistent with government priorities and NRCan’s mandate to support environmentally-responsible natural resources use and reduce GHGs and other air contaminants. Programs were found to have generated significant GHG reductions, created employment and leveraged investments from the provinces and territories.

Conclusions from the assessment formed the basis for developing the next generation of measures, which were announced as part of the 2011 Federal Budget. Building on lessons learned, improvements were made in the planning and design phase of the new measures, including broader communication and consultation with key stakeholders.

Furthermore, several program-specific evaluations were completed, including in the transportation energy efficiency area. Most of the findings indicated that the programs in this area were relevant and were achieving their expected results. To address recommendations from the evaluation, NRCan clarified its performance measurement strategy to better track its results and ensure proper reporting on outcomes.

In addition, the evaluation⁶⁹ of the NRCan’s renewable energy programs concluded that Wind Power Production Incentive (WPPI) and the ecoENERGY for Renewable Power Program have contributed to the growth of the renewable power industry. The ecoENERGY for Renewable Heat Program may have increased the capacity of the industry to deliver quality renewable heat systems into the Canadian market but the industry remains small, without many of the attributes of a mature industrial sector.

The evaluation⁷⁰ of the Energy Efficiency for Industry, Housing and Buildings initiatives found the ecoENERGY Retrofit – Homes program to be highly effective at expanding or modifying the energy retrofit activities of homeowners, leading to program participants undertaking double the number of retrofits originally planned, with 60% being motivated to undertake further measures outside of the program. The program was found to be relevant and responding to the priorities of government, and had the unintended outcomes of creating jobs in the energy consultant sector and triggering the creation of energy-efficient housing programs in several provinces.

NRCan also completed an audit⁷¹ of the Pulp and Paper Green Transformation Program, which concluded that the program’s management and control were operating well. Recommendations were made to implement the Program's recipient audit strategy and formally develop and promulgate service standards. NRCan responded to this recommendation by completing the Program recipient audit strategy and establishing service standards that have been communicated to proponents.

Program Activity 2.2: Ecosystem Risk Management

The program activity includes programs that help to understand the risks to our environment. A major program is the National Forest Inventory, which is designed to provide information to provinces, territories, other collaborators and the public on the state of Canada’s forests, demonstrating how forest attributes are changing over time through an internet application.

Performance Summary and Analysis of Program Activity

NRCan contributed to risk management for natural resource ecosystems and human health by creating and disseminating knowledge that is critical to decision-making on environmental stewardship, conservation and protection. This contributed to the health and quality of life of Canadians, as well as the sustainability of their natural resources. NRCan achieves this by:

• Contributing to federal environmental assessment and reporting processes, including the provision of geoscience and mining S&T knowledge and expertise to ensure that environmental impacts are identified and mitigated on major resource project environmental assessments.
  
  
• Partnering with key stakeholders to protect ecosystems through the advancement of green mining technologies and the Green Mining Initiative.
  
  
• Advancing Canada’s forest-related interests relative to the United Nations Framework Convention on Climate Change⁷³ by, for example, further developing and applying the Carbon Budget Model⁷⁴, which is now being used both within Canada and internationally to monitor and forecast changes in forest carbon at the national and sub-national level.
  
  
• Mapping and assessing key aquifers in Canada to support the responsible development of Canada’s natural resources and inform decision-making on groundwater management issues.
  
  
• Ensuring waste management, environmental restoration, and decommissioning priorities at AECL sites through the Nuclear Legacy Liabilities Program⁷⁵, which aims to safely and cost-effectively reduce legacy liabilities and associated risks at these sites. 

Lessons Learned

An audit⁷⁶ of the Nuclear Legacy Liabilities Program was completed. Overall it was found that the program was well managed and well controlled. Opportunities for improvement were noted in the areas of public consultations and reporting requirements. To address this, NRCan completed public consultations and began work with AECL to streamline reporting and strengthen program management.

Strategic Outcome 3 - Safety, Security and Stewardship

Text Version - Strategic Outcome 3

NRCan works to ensure the safety and security of Canadians and the stewardship of their natural resources by:

• Enabling the government, communities and the private sector to reduce the risks from natural and man-made hazards by providing regulation and knowledge, fulfilling legislated responsibilities, and ensuring capacity;
• Providing clearly-defined legal boundaries, a robust property system framework, authoritative geographic infrastructure and fundamental geospatial information on Canada’s landmass in order to support the Canadian public and stakeholders in location-based decision-making; and,
• Provide oversight of major natural resource projects, including proper environmental protection.

Program Activity 3.1: Adapting to a Changing Climate and Hazards Risk Management

The program activity provides geoscience and geospatial information that contributes to the reduction of risks from natural hazards, such as earthquakes, tsunamis and flood, as well as hazards arising from human activities, and works with front-line responders to provide geographical information in the event of an emergency. The program activity also provides information that will help Canadians mitigate and adapt to the effects of a changing climate and administers and enforces the Explosives Act.

Performance Summary and Analysis of Program Activity

NRCan contributed to the increase of scientific knowledge on explosives, climate change adaptation and natural hazard risk management, contributing to the safety and security of Canadians and the effectiveness of the stewardship of our land and resources. NRCan accomplished this by:

• Supporting the collaboration of key decision-makers across Canada in assessing the impacts, risks and opportunities of climate change on Canada’s forests and lands. This information is used to develop mitigation and adaptation strategies with partners and stakeholders. The Regional Adaptation Collaborative⁸⁰ Program, for example, facilitates the development of region-specific adaptation policies and strategies, and brings together provincial and territorial agencies representing different climate-sensitive policy areas.
  
  
• Developing strategies, in collaboration with partners, for the management and mitigation of forest disturbances including wildland fires (through the enhanced Canadian Forest Fire Danger Rating System⁸¹) and pests (through the National Forest Pest Strategy⁸²).
  
  
• Continuing to update Canada’s explosives regulations to reflect modern industrial practices (with an expected publication date in late 2011 or early 2012).
  
  
• Providing natural hazard data that informs Canadians and technical specialists of important geophysical parameters, with a view of improving the understanding and management of hazards arising from natural causes, such as earthquakes, and potential interferences with power transmission and telecommunications due to solar storms.
  
  
• Publishing the results of its scientific activities and ensuring the dissemination of knowledge on explosives, climate change adaptation and natural hazard risk management. NRCan’s scientific output in these areas was more often cited than the world average, outlining the Department’s scientific impact, as reported in a study conducted by Science-Metrix in 2011.

Lessons Learned

NRCan completed an evaluation⁸³ of the Explosives Safety and Security Branch. Most of the findings revealed that the Branch is achieving its expected results and has demonstrated a high level of effectiveness and efficiency. Recommendations were made to improve performance measurement and to establish strategic partnerships with respect to the security-related aspects of the Branch’s mandate. To address this, the Branch developed a Performance Measurement Framework and established a formal partnership with Defence Research Development Canada to improve cooperation between the two organizations on security-related issues.

NRCan also completed an evaluation⁸⁴ of various programs relating to the mitigation of forest disturbances including the National Forest Pest Strategy Program. Overall, findings indicated that the programs are being delivered in an efficient manner and are achieving expected results. Recommendations were made to address attrition of scientific staff and fill research gaps in order to update decision-making tools. NRCan has recognized the need to fill these gaps and ensure the dissemination and exchange of knowledge with its various stakeholders, which it will address through the development of a revised Strategic Plan for Forest Disturbances.

A report⁸⁵ to Parliament by the Commissioner of the Environment and Sustainable Development examined the ability of various departments, including NRCan, to adapt to climate change impacts. Impacts are most evident in Canada’s North where, for example, thawing permafrost is affecting the stability of roads, buildings, pipelines, and other infrastructure. Recommendations were made for departments to identify the adaptation measures necessary to respond to climate change risks within their areas of responsibility, based on an assessment of risks. NRCan undertook a Climate Change Sensitivity Assessment in 2009 and 2010 and continues to monitor risks and changes on an ongoing basis.

Program Activity 3.2: Natural Resources and Landmass Knowledge and Systems

This program activity carries out the Minister's obligation to provide a property rights infrastructure on all lands for which the Department has this responsibility, along with the provision and access to accurate and precise geographic information on the Canadian landmass. The program activity also includes the Major Projects Management Office which, along with other programs, provides relevant accurate, timely and accessible knowledge with a view to increasing collaborative efforts with other jurisdictions in key areas (i.e. regulatory efficiency) to generate improved approaches to shared issues and lead significant benefits to advance the interests of the natural resources sector both domestically and at the international level.

Performance Indicators	Target	Status	Results
A. NRCan's contribution to the development and security of Canada through advancements in landmass knowledge and systems.	Favourable long-term trend in number of publications	Met All	Over the most recent four-year period for which data are comparable (2006-2009), NRCan's production of peer-reviewed scientific and technical papers these areas has increased by 64%, from 47 to 77 publications. NRCan’s scientific expertise in this area is well known and recognized around the world: its publications are more often cited than the world average (as reported in a study commissioned by NRCan from Science-Metrix). Furthermore, the knowledge produced is used to support various location-based applications (such as GPS) and decision-making (such as the preparation of Canada’s submission to UNCLOS).
B. NRCan's contribution to the development and security of Canada through advancements in boundary management, surveys and supporting systems for secure land tenure of Canada Lands.	Fulfilling on-demand requirements	Met All	The Department met the requirements of Canada Lands Survey System86 and remote sensing imagery (RADARSAT)87 (there is no quantitative target because variations in demand are beyond NRCan’s control). The outputs of these programs and activities are used by Aboriginal groups, land management specialists, other government departments and Canadians in support of sustainable land use management.
C. Effective management of the federal regulatory process for major natural resource projects as measured by adherence to target timelines and service standards by all federal departments and agencies.	Greater than 80% of active or completed MPMO projects are within eight weeks of target timeline	Met All	NRCan met its target of 80% for active and/or completed projects that were on time or within eight weeks of their target timelines. Over that period, NRCan managed the federal review process for 70 projects – a 24% increase from the previous year. Effective and efficient project reviews are critical to ensure the responsible development of Canada’s natural resources and lands, including strong environmental protection.

Performance Summary and Analysis of Program Activity

NRCan’s programs provide clearly defined legal boundaries, a robust property system framework, authoritative geographical infrastructure and fundamental geospatial information on Canada’s landmass. These frameworks and information are essential to the Canadian economy, environment and standard of living. Equally important is NRCan’s work to improve the performance of the federal regulatory system. This was achieved in 2010-11 by:

• Providing accurate and accessible geographicinformation⁸⁸ to facilitate land tenure and boundary management. For example, by working with the United States Geological Survey, NRCan rendered accessible online current and historic (as far back as 1984) LANDSAT⁸⁹ imagery, free of charge. This information will enable a more comprehensive analysis of Canada’s lands and coastlines for a variety of economic, environmental and social development activities.
  
  
• Mapping and surveying the Arctic seabed to support Canada’s submission to extendits continental shelf beyond the customary 200 nautical miles, as per the United Nations Convention on theLaw of the Sea (UNCLOS). Data collection is proceeding on schedule and current funding levels are projected to be fully adequate.
  
  
• Overseeing major resource project reviews (through the Major Projects Management Office⁹⁰)to strengthen accountability and ensure transparent and timely project reviews as well as implementing system-wide improvements to facilitate investments for resource development while maintaining strong environmental protection. In particular, efforts were made this year to:
  
  
  • Develop a whole-of-government strategy to modernize the regulatory review process for natural resource projects;
    
    
  • Support the implementation of targeted amendments to the Canadian Environmental Assessment Act⁹¹ that have resulted in simpler, clearer review processes that improve environmental protection and provide greater certainty to industry;
    
    
  • Create new Participant Funding Programs for the National Energy Board and Canadian Nuclear Safety Commission that allow for more timely and meaningful engagement of the public and Aboriginal groups;
    
    
  • Implement additional policy and operational measures to align the Crown’s Aboriginal consultations activities with the Government of Canada’s Updated Guidelines for Federal Officials on Aboriginal Consultation and Accommodation⁹²; and,
    
    
  • Advancing two pilot projects (the Line Creek Coal Mine Expansion⁹³ and the Northwest Transmission projects) with the province of British Columbia to help identify opportunities to improve the integration of federal and provincial review processes.

Lessons Learned

An evaluation⁹⁴ of NRCan’s national geographic databases was completed. Findings indicated that most of the database components have achieved their intended outcomes and performance targets. Recommendations were made to develop a strategy to implement a comprehensive rights management system (marine cadastre) for offshore Canada Lands. To address this, NRCan is currently performing a feasibility study and stakeholder consultations, which are expected to be completed in March 2012.

NRCan also completed an evaluation⁹⁵ of GeoConnections (Phase II). Findings indicated that the program has made progress towards achieving its expected results. Recommendations were made to ensure that the local expertise currently being developed by the program can be sustained and transferred to a broader federal and/or provincial-territorial (FPT) level. To address this, NRCan has ensured that future GeoConnections initiatives will involve the coordination of FPT organizations that support the transfer of knowledge.

Program Activity 3.3: : Geomatics Canada Revolving Fund

The Geomatics Canada Revolving Fund was established under Appropriation Act No. 3 in 1993-94. The fund allows Geomatics Canada to shift the costs from taxpayers at large to specific users who benefit directly from the goods and services provided. This revenue retention mechanism gives Geomatics Canada the ability to recover full costs from Canadian customers and the freedom to charge market prices for international clients. It presents the opportunity to provide an increasing volume of products and services in response to the needs of Canadian clients as well as supporting the Canadian geomatics industry through the knowledge and expertise necessary to be competitive in the international market. As part of the Revolving Fund, NRCan produces accurate aeronautical charts and publications for NavCanada as an essential contribution to the safety and security of the traveling public and Canadians.

* Actual spending for Geomatics Canada Revolving Fund was a surplus of $0.3M

Performance Indicators	Target	Status	Results
A. Percentage rate of service and production costs fully recovered96	Full cost recovery.	Met All	For 2010-2011, NRCan has met its target as a result of the continued success of the Satellite line of business and a successful transition to a new mapping business model. From 2007 to 2010, Geomatics Canada Revolving Fund invested its accumulated surplus to implement a more cost-effective and efficient service and product delivery model.

Program Activity 4.1: Internal Services

This program activity regroups three sub-activities which assist NRCan in delivering on its mandate and priorities: governance and management support, resource management services, and asset management services. The key to the effectiveness and efficiency of this program activity has been the ability of internal services to adjust and respond to evolving business priorities and requirements. This has allowed the Department to better align its priorities to those of Canadians, its activities to its priorities, and its resources to its activities. It has also increased its capacity to monitor the financial and non-financial performance of its activities and programs.

In 2010-11, the Department established four medium-term corporate priorities: Asserting our policy leadership, Mobilizing our science, Transforming our business and Growing our human capital. These will ensure that the Department focuses on developing its capacity, responsiveness and resilience to maximize its contribution to the Government of Canada and to Canadians.

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.

Delivering on Canada's Economic Action Plan (EAP)

NRCan received funding for new and expanded initiatives to deliver on Canada’s EAP, as part of Budget 2009. Total funding received for 2010-11 for EAP initiatives was $657.5 million, of which the Department spent $625.5 million, or 97 percent. EAP initiatives, along with their respective budget and expenditures as of March 31, 2011, are presented below.

Section III: Supplementary Information

Financial Highlights

Total assets have increased by $291 million. A new Treasury Board requirement to report the Due from the Consolidated Revenue Fund (CRF) on the financial statements results in an increase of $183 million and represents cash which the Department is entitled to draw from without further appropriations to discharge its liabilities. $117 million of the increase is attributable to changes to the tangible capital assets, due to a new asset in the form of a capital lease of a building, as well as building betterments associated with the Accelerated Infrastructure Program. In addition, there is an increase of $43 million in transfer payment prepayments. There has been a decrease of $57 million in accounts receivable and inventories. Total liabilities have increased by $961 million. The increase is mainly attributable to the increase in the environmental liability of $756 million, due to revised estimated costs related to the management and remediation of contaminated sites. There is also an increase of $144 million in accounts payable to external parties. In addition, NRCan entered into a capital lease agreement for a building which has resulted in a lease obligation of $78 million.

The Net Cost of Operations increased by $1.5 billion from the previous fiscal year. Expenses increased by $1.7 billion. This increase is primarily within the transfer payment programs (increase of $920 million). Payments from statutory authorities, such as the Newfoundland Fiscal Equalization Offset Payments, the Newfoundland Offshore Petroleum Resource Revenue Fund, the Nova Scotia Offshore Revenue Account, as well as contribution programs such as the Pulp and Paper Green Transformation Program, the Clean Energy Fund, and the Forest Sector Initiative have increased in 2010-11. In addition, the environmental liability expense increased by $756 million. Revenues have increased by $179 million. This is due to an increase in revenues from rights and privileges of $58 million, related to offshore programs in Nova Scotia and Newfoundland and Labrador. Fluctuations in these programs are attributable to the increase in the rate of production and in the value of crude oil. As well, interest revenues have increased by $118 million due to an increase in the Net Profit Interest revenues from the Hibernia Offshore Oil project.

The following chart presents a distribution of Natural Resources Canada’s total expenses in 2010-11 by program activity. Total expenses amounted to $5,095,610,000.

Expenses - Where Funds Go

Text Version - Expenses - Where Funds Go

The Condensed statement of Financial Position, complete NRCan financial statements, and that of the Geomatics Canada Revolving Fund can be found on Natural Resources Canada's¹⁰⁵ website.

Financial Statements

NRCan’s financial statements for 2010-11 are available online at: http://www.nrcan.gc.ca/com/resoress/dprrmr/dprrmr-eng.php?acr=56

List of Supplementary Information Tables

• Sources of Respendable and Non-Respendable Revenue
  
  
• User Fees / External Fees
  
  
• Details of Transfer Payment Programs (TPP)
  
  
• Up-Front, Multi-Year Funding
  
  
• Horizontal Initiative – Improving the Performance of the Federal Regulatory System for Major Natural Resource Projects
  
  
• Green Procurement
  
  
• Response to Parliamentary Committees and External Audits
  
  
• Internal Audits and Evaluations

These tables can be found on the Treasury Board Secretariat’s website¹⁰⁶.

Section IV: Other Items of Interest

Contributions to the Federal Sustainable Development Strategy

The first Federal Sustainable Development Strategy (FSDS) was tabled in Parliament in October 2010. In accordance with the Federal Sustainable Development Act, NRCan developed a Departmental Sustainable Development Strategy that identified its contributions to the FSDS. The departmental strategy has been fully integrated into NRCan’s 2011-12 Report on Plans and Priorities (RPP) and will be fully integrated into the 2011-12 Departmental Performance Report (DPR).

For the 2010-11 DPR, NRCan committed to report on programs that were contributing to the FSDS but that ended as of March 31, 2011. This information is available on NRCan’s sustainable development website ¹⁰⁷.

Endnotes