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Message from The Minister

As Minister of Agriculture and Agri-Food, and as someone with a lifelong involvement in agriculture, I am pleased to present the 2009-2010 Report on Plans and Priorities for Agriculture and Agri-Food Canada. This report sets out my department's spending plans, priorities and expected results for the agriculture and agri-food industry and for Canadians.

As we move forward into our second mandate, this government remains deeply committed to ensuring the success of the Canadian agriculture and agri-food sector. I was honoured to be reappointed Minister of Agriculture and Agri-Food and I welcome the opportunity to continue my efforts at putting farmers first, and working on behalf of the agriculture sector and all Canadians.

Canada's farmers, farm families and farming communities are the heart of the Canadian agriculture and agri-food industry, contributing to our economy, our prosperity and our way of life as Canadians. All told, this vital sector accounts for eight per cent of our GDP, $142 billion in consumer sales, $35.3 billion in exports, and almost $8.6 billion of Canada's trade surplus. It also provides employment for 12.8 per cent of the Canadian workforce.

To help ensure the agriculture and agri-food sector's ongoing contribution to our economy and society, the Government has already taken action in key areas. We supported the development of biofuels; helped livestock producers weather financial pressures; restored agricultural trade in important markets; stood up for Canada's agriculture interests at the World Trade Organization and in bilateral trade negotiations; introduced a suite of business risk management programs that are responsive and bankable for our producers; and supported strong rural communities and the development of co-operatives through the Rural and Co-operatives Secretariats.

This report describes how we intend to build on these achievements and move ahead.

In July 2008, we signed an historic agreement with Canada's provinces and territories on Growing Forward. Shaped in large part by Canada's agriculture and agri-food sector, Growing Forward is a framework for the future. It will provide $1.8 billion in funding for non-business risk management programs over five years, including the 2008-2009 year, for programs that will help keep our farmers and our sector innovative and competitive. The Growing Forward framework also includes an improved, demand-driven suite of business risk management programs that was launched in April 2008.

Together with other initiatives that complement Growing Forward, we will help ensure a profitable sector through increased emphasis on investment in innovation and through more flexible programs that meet unique regional needs. The new suite of programs will be more bankable, predictable and responsive to meet the needs of producers across Canada.

This report describes how Growing Forward and other programs will take shape over the next three years, contributing to a sector that is more proactive in managing risk, is better positioned to seize emerging opportunities at home and abroad, and contributes to the health and wellbeing of Canadians.

As minister, I have been struck by the uniqueness of the Agriculture and Agri-Food (AAF) portfolio. The six partner organizations that make up the portfolio - Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, Farm Credit Canada, the Canadian Grain Commission, the Canadian Dairy Commission and the National Farm Products Council - serve most of the same stakeholders and have complementary responsibilities. However, what distinguishes the portfolio for me is the sense of shared purpose to strengthen our sector and make it more viable in the long term. It is a common objective that can most effectively be realized by working together as a portfolio.

The collaborative spirit that pervades the AAF Portfolio will be crucial in continuing the progress on Growing Forward. The completion of the Growing Forward multilateral framework marked a major step toward a truly integrated and comprehensive plan focused on competitiveness and innovation, society's priorities and proactive risk management. With the planned launch of new programming under Growing Forward in the coming fiscal year, I am counting on the knowledge and continuing support of the portfolio partners to fulfill the prospects for a more profitable and innovative agriculture and agri-food sector in the future.

Honourable Gerry Ritz, P.C., M.P.,
Minister of Agriculture and Agri-Food
and Minister for the Canadian Wheat Board

Section I - Departmental Overview

Summary Information

Raison d'être

Agriculture and Agri-Food Canada is an economic and science-based department that works to ensure Canada's agriculture, agri-food and agri-based products sector is able to compete in international and domestic markets to derive economic returns to the sector and the Canadian economy as a whole. Through its work, the department strives to help the sector maximize its long-term profitability and competitiveness, while respecting the environment.

Responsibilities

Agriculture and Agri-Food Canada (AAFC) provides information, research and technology, and policies and programs to help Canada's agriculture, agri-food and agri-based products sector increase its environmental sustainability, compete in markets at home and abroad, manage risk, and embrace innovation. Created in 1868, the department today maintains offices and facilities from coast to coast.

The activities of the department extend from the farmer to the consumer, through all phases of production, processing and marketing of agriculture and agri-food products.

The department derives its mandate from the Department of Agriculture and Agri-Food Act, and also administers other Acts for which the minister is responsible, such as the Agricultural Marketing Programs Act and the Farm Improvement and Marketing Cooperatives Loans Act. A full list of these Acts is available at: http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1180107359564&lang=eng.

AAFC also provides the overall leadership and co-ordination on federal rural policies and programs through the Canadian Rural Partnership, and in promoting the economic growth and social development of Canadian society through the development of co-operatives. AAFC also encompasses a special operating agency, the Canadian Pari-Mutuel Agency, which regulates and supervises betting on horse-racing at racetracks across Canada.

The department is also responsible for co-ordinating the collaboration of the organizations within the Agriculture and Agri-Food portfolio, which ensures coherent policy and program development and effective co-operation in meeting challenges on key cross-portfolio issues. In addition to AAFC, the portfolio organizations consist of: the Canadian Dairy Commission; the Canadian Food Inspection Agency; the Canadian Grain Commission; Farm Credit Canada; and the National Farm Products Council. More information on these portfolio organizations is available at: http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1173977418249&lang=e.

The department also supports the minister in his role as Minister for the Canadian Wheat Board.

Strategic Outcomes

To effectively pursue its mandate and make a difference to Canadians, AAFC aims to achieve the following three strategic outcomes:

  1. An environmentally sustainable agriculture, agri-food and agri-based products sector

    AAFC supports an economically and environmentally sustainable agriculture, agri-food and agri-based products sector that ensures proper management of available natural resources and adaptability to changing environmental conditions. Addressing key environmental challenges in Canada including agriculture's impact on water quality and water use, adaptation to the impact of climate change, mitigation of agriculture's greenhouse gas emissions and the exploration of new economic opportunities contribute to a cleaner environment and healthier living conditions for the Canadian public, while enabling the sector to become more profitable.

  2. A competitive agriculture, agri-food and agri-based products sector that proactively manages risk

    Canada's capacity to produce, process and distribute safe, healthy, high-quality and viable agriculture, agri-food and agri-based products is dependent on its ability to proactively manage and minimize risks and to expand domestic and global markets for the sector by meeting and exceeding consumer demands and expectations. Proactive risk management to ensure food safety, market development and responsiveness, and improved regulatory processes contribute directly to the economic stability and prosperity of Canadian farmers and provide greater security for the Canadian public regarding the sector.

  3. An innovative agriculture, agri-food and agri-based products sector

    Sector innovation includes the development and commercialization of value-added agricultural-based products, knowledge-based production systems, processes and technologies, and equipping the sector with improved business and management skills and strategies to capture opportunities and to manage change. Such innovation is vital for ongoing growth and improvement in the productivity, profitability, competitiveness and sustainability of Canada's agriculture, agri-food and agri-based products sector and its rural communities.

Program Activity Architecture

The graphic below displays Agriculture and Agri-Food Canada's program activities and program sub-activities that comprise its Program Activity Architecture (PAA). This PAA reflects how the department allocates and manages its resources and makes progress toward its strategic outcomes.

AAFC's 2009-2010 Program Activity Architecture


Strategic outcomes
An environmentally sustainable agriculture, agri-food and agri-based products sector A competitive agriculture, agri-food and agri-based products sector that proactively manages risk An innovative agriculture, agri-food and agri-based products sector
Environmental Knowledge, Technology, Information and Measurement Business Risk Management Science, Innovation and Adoption
Program Activities 1.
Agri-Environmental Science AgriStability Science Supporting Agricultural Innovation
Agri-Environmental Applications AgriInvest Advancing Canadian Agriculture and Agri-Food
Agri-Environmental Sustainability Assessment AgriRecovery Agri-Innovations
On-Farm Action AgriInsurance EcoAgriculture Biofuels Capital Initiative
Technical Information Transfer Cover Crop Protection Agri-Opportunities
Agri-environmental Risk Assessment Farm Improvement and Marketing Cooperatives Loans Act  
Agri-environmental Risk Assessment Implementation Agriculture Marketing Programs Act
  Private Sector Risk Management Partnership
Food Safety and Biosecurity Risk Management Systems Agri-Business Development
Biosecurity Farm Debt Mediation Service
Food Safety & Biosecurity Science Orchards & Vineyards Transition
Food Safety Systems Business Development
Traceability  
Trade and Market Development Rural and Co-operatives Development
Trade Negotiations and Market Access Rural Development
Market Growth Co-operatives Development
Sector Competitiveness  
Regulatory Efficiency Facilitation Canadian Pari-Mutuel Agency
Minor Use Pesticides  
Health Claims, Novel Foods, and Ingredients
National Farm Products Council
Internal Services


Legend
   Strategic Outcome
   Program Activity
   Program Sub-Activity

AAFC's new PAA was created to more clearly reflect the department's mandate and vision, as well as the increasing importance of the sector's resilience and competitiveness in light of changing consumer demands and global competition. The 2009-2010 PAA embeds the evolution of AAFC's new policy framework, Growing Forward, and aligns clearly with the Government of Canada's outcomes - a Clean and Healthy Environment, Strong Economic Growth, an Innovative and Knowledge-based Economy, and a Fair and Secure Marketplace.


Crosswalk between AAFC's 2008-2009 PAA and 2009-2010 PAA
2009-2010 Net Planned Spending1 ($ millions)
09-10 PAA Environmental Knowledge, Technology, Information and Measurement On-Farm Action Business Risk Management Food Safety and Biosecurity Risk Management Systems Trade and Market Development Regulatory Efficiency Facilitation National Farm Products Council Science, Innovation and Adoption Agri-Business Development Rural and Co-operatives Development Canadian Pari-Mutuel Agency Internal Services3 Total
08-09 PAA                          
Business Risk Management - - 2,081.1 50.4 5.0 - - - - - - 44.2 2,180.7
Food Safety and Food Quality - - - 89.4 - 10.1 - - - - - 22.1 121.6
Markets and International - - - - 92.3 21.2 - 0.3 - - - 28.0 141.9
National Farm Products Council - - - - - - 2.7 - - - - 1.1 3.8
Environment 58.2 120.2 - - - 2.1 - - - - - 89.8 270.4
Innovation and Renewal - 1.0 - - - 3.7 - 314.3 43.5 - - 82.7 445.1
Rural and Co-operatives Secretariats - - - - - - - - - 20.6 - 5.0 25.6
Canadian Pari-Mutuel Agency - - - - - - - - - - (0.0) - (0.0)
Total Department 58.2 121.2 2,081.1 139.8 97.3 37.1 2.7 314.6 43.5 20.6 (0.0) 272.9 3,189.0

1 Planned spending reflects funds already brought into the department's reference levels as well as amounts to be authorized through the Estimates process for 2009-2010 as presented in the Annual Reference Level Update. It also includes adjustments for funding approved in the government fiscal plan, but yet to be brought into the department's reference levels. Planned Spending has not been adjusted to include new information contained in Budget 2009, such as Strategic Review efficiency savings as well as new funding for the AgriFlexibility and Slaughterhouse programs. More information will be provided in the 2009-2010 Supplementary Estimates.

2 Allocations by the 2008-2009 PAA are notional as it has been replaced as of 2009-2010.

3 In accordance with the TBS guidelines, Internal Services are to be presented as a separate program activity beginning in 2009-2010. Internal Services were previously prorated among all other program activities for the purpose of the Estimates Process.

The figures have been rounded to the nearest millions of dollars. Figures that cannot be listed in millions of dollars are shown as 0.0. Due to rounding, figures may not add to the totals shown.

Planning Summary

Financial Resources (Total Net Planned Spending)

The following table provides a summary of the total planned spending for Agriculture and Agri-Food Canada for the next three fiscal years.


Financial Resources 2009-2010 2010-2011 2011-2012
($ millions) 3,189.0 3,235.8 3,097.1

Human Resources

The following table provides a summary of the total planned human resources for Agriculture and Agri-Food Canada for the next three fiscal years.


Human Resources 2009-2010 2010-2011 2011-2012
Full-Time Equivalents (FTEs)1 6,403 6,403 6,403

Planning Summary by Strategic Outcome

The following tables provide a summary of planned performance and spending for each of AAFC's three strategic outcomes.


Strategic Outcome 1: An environmentally sustainable agriculture-agri-food and agri-based products sector
Performance Indicators Targets
Soil Quality Agri-Environmental Index* 81 by March 31, 2030
Water Quality Agri-Environmental Index* 81 by March 31, 2030
Air Quality Agri-Environmental Index* 81 by March 31, 2030
Biodiversity Quality Agri-Environmental Index* 81 by March 31, 2030
Program Activity Forecast Spending (Net) 2008-2009 ($ millions)2 Planned Spending (Net) ($ millions)3 Alignment to Government of Canada Outcomes
2009-2010 2010-2011 2011-2012
Environmental Knowledge, Technology, Information and Measurement 69.7 58.2 54.5 53.5 A Clean and Healthy Environment
On-Farm Action 179.5 121.2 120.1 115.5 A Clean and Healthy Environment
Total for SO 1 249.2 179.4 174.6 169.0  

* The indices listed measure agri-environmental progress in each of the four key areas of soil, water, air, and biodiversity. The scale for these indices is: 0-20=Unacceptable; 21-40=Poor; 41-60=Average; 61-80=Good; and 81-100=Desired. A target of 81-100, with a stable or improving trend, represents the desired value for the sector's performance.


Strategic Outcome 2: A competitive agriculture, agri-food and agri-based products sector that proactively manages risk
Performance Indicators Targets
Increase in agriculture and agri-food (includes seafood processing), Gross Domestic Product (GDP), in constant dollars (1997 dollars) 10 per cent by March 31, 2013
Program Activity Forecast Spending (Net) 2008-2009 ($ millions)2 Planned Spending (Net) ($ millions)3 Alignment to Government of Canada Outcomes
2009-2010 2010-2011 2011-2012
Business Risk Management 1,711.0 2,081.1 2,127.6 2,211.2 Strong Economic Growth
Food Safety and Biosecurity Risk Management Systems 115.4 139.8 116.3 74.6 Strong Economic Growth
Trade and Market Development 86.8 97.3 97.6 97.8 Strong Economic Growth
Regulatory Efficiency Facilitation 15.9 37.1 36.1 36.1 Strong Economic Growth
National Farm Products Council 2.8 2.7 2.7 2.7 Strong Economic Growth
Total for SO 2 1,931.8 2,358.1 2,380.3 2,422.4  

 


Strategic Outcome 3: An innovative agriculture, agri-food and agri-based products sector
Performance Indicators Targets
Increase in agriculture Net Value-Added (Value-Added is a Statistics Canada measure of Canadian value-added GDP) 7 per cent by March 31, 2014
Percentage increase in the development of food and other agriculture-derived products and services as measured by 1) revenues from bioproducts and private industry's R&D expenditures in the agri-food sector as measured by the food processing and bioproducts sectors and 2) percentage increase in private industry's R&D expenditures in the agri-food sector as measured by the food processing and bioproducts sectors (Percentage reflects a real increase, after adjustments for inflation) 10 per cent by March 31, 2014
Program Activity Forecast Spending (Net) 2008-2009 ($ millions)2 Planned Spending (Net) ($ millions)3 Alignment to Government of Canada Outcomes
2009-2010 2010-2011 2011-2012
Science, Innovation and Adoption 553.1 314.6 341.1 183.5 An Innovative and Knowledge-based Economy
Agri-Business Development 45.1 43.5 45.6 30.6 An Innovative and Knowledge-based Economy
Rural and Co-operatives Development 19.8 20.6 20.7 20.7 An Innovative and Knowledge-based Economy
Canadian Pari-Mutuel Agency - (0.0) (0.3) (0.3) A Fair and Secure Marketplace
Total for SO 3 617.9 378.6 407.1 234.5  

 


Strategic Outcome: The following Program Activity supports all Strategic Outcomes within this organization
Program Activity Forecast Spending (Net) 2008-2009 ($ millions)2 Planned Spending (Net) ($ millions)3
2009-2010 2010-2011 2011-2012
Internal Services 326.9 272.9 273.8 271.1
Sub-total Planned Spending 3,125.8 3,189.0 3,235.8 3,097.1
Plus: Cost of services received without charge4 64.7 54.9 55.8 54.6
Total Departmental Spending 3,190.5 3,243.9 3,291.7 3,151.6

1 In addition to the FTEs noted above, in 2008-2009 there are 79 FTEs employed by AAFC funded by respendable revenue sources from collaborative research projects with industry, and other activities not funded through AAFC appropriations. Also, 351 FTEs were employed as students. Data for 2009-2010 to 2011-2012 similarly does not make any provision for staff funded through respendable revenue sources or students.

2 Forecast Spending 2008-2009 reflects the authorized funding levels to the end of the fiscal year 2008-2009 (not necessarily forecast expenditures). Allocations by Program Activity are notional as the PAA Structure for 2009-2010 is different than that for 2008-2009.

3 Planned spending reflects funds already brought into the department's reference levels as well as amounts to be authorized through the Estimates process (for the 2009-2010 through to 2011-2012 planning years) as presented in the Annual Reference Level Update. It also includes adjustments in future years for funding approved in the government fiscal plan, but yet to be brought into the Department's reference levels. Planned Spending has not been adjusted to include new information contained in Budget 2009, such as Strategic Review efficiency savings as well as new funding for the AgriFlexibility and Slaughterhouse programs. More information will be provided in the 2009-2010 Supplementary Estimates.

4 Cost of services received without charge include accommodation provided by Public Works and Government Services Canada (PWGSC), contributions covering employer's share of employees' insurance premiums and expenditures paid by Treasury Board of Canada Secretariat (TBS), Worker's compensation coverage provided by Human Resources and Social Development Canada (HRSDC) and salary and associated expenditures of legal services provided by the Department of Justice Canada.

The Planned Spending for 2009-2010 is $3,189.0 million compared to $3,125.8 million for 2008-2009, an increase of approximately $63.2 million. This is largely attributable to reprofiling of Action Plan funding.

The figures have been rounded to the nearest millions of dollars. Figures that cannot be listed in millions of dollars are shown as 0.0. Due to rounding, figures may not add to the totals shown.

Contribution of Priorities to Strategic Outcomes

Of primary importance to the Canadian agriculture and agri-food sector is becoming increasingly capable of adapting, innovating and competing in the global arena while at the same time being able to meet evolving domestic demands. As a result, Agriculture and Agri-Food Canada's (AAFC) priorities are focused on areas of importance to industry which will help improve the competitiveness, and hence profitability, of the agriculture and agri-food sector.

There are many activities that can help bring about greater competitiveness for the sector - investments in science and innovation will bring out leading edge products; investments in food safety systems, biosecurity and traceability both minimize disruptions from food safety-related incidents while ensuring that trading partners have confidence in Canadian products; business development and skills development ensure that operational efficiencies are sought and achieved; and effective risk management programs ensure that producers can focus on these broader objectives and minimize the impacts of other disruptions outside regular business practice. Furthermore, because agriculture is a shared federal-provincial-territorial (FPT) jurisdiction, AAFC is implementing these priorities in partnership with provinces and territories.

In 2009-2010, AAFC will implement a range of new and on-going initiatives that support the strategic outcomes. First, AAFC will fully implement Growing Forward, the new FPT policy framework for Canada's agriculture and agri-food sector. Growing Forward is the cornerstone of the FPT relationship for agriculture and agri-food-related programming and ensures that FPT governments work together to address key challenges facing the sector. The framework agreement includes both the suite of business risk management (BRM) programs and a suite of non-business risk management (non-BRM) programs which focus on innovation, business development, environmental issues, regulatory issues, international markets and food safety, biosecurity and traceability. While the suite of BRM programs were launched as of April 1, 2008, the suite of non-BRM programs will roll out beginning April 1, 2009, including programs that are delivered and funded federally as well as a range of cost-shared programs which will be largely delivered by provinces and territories.

In addition, there are other new and on-going priorities which underpin efforts in Growing Forward and are also crucial in improving the overall competitiveness of the sector. Such initiatives include support for biofuels and research in support of innovation to improve competitiveness. The new agricultural flexibility program will help farmers deal with costs of production pressures, promote innovation, ensure environmental sustainability and respond to the market challenges and opportunities across the country. In addition, new investments will be made to strengthen slaughter and meat processing capacity in support of beef, pork and other livestock producers.

Finally, AAFC is committed to delivering on management excellence in order to implement Growing Forward and other programs efficiently and effectively and best achieve results for Canadians. Additional information on these priorities is provided in the following table.


Operational Priorities Type Links to Strategic Outcomes (SO) Description
Note: SOs are described on page 4 of this document
Delivering on Growing Forward Ongoing SO1
SO2
SO3

Why is this a priority?
Growing Forward is the key framework agreement governing federal, provincial and territorial agriculture programs in Canada. It is designed to help ensure a competitive and innovative agriculture and agri-food sector that responds to society's priorities while proactively managing risks.

By implementing programming in a range of areas, the five-year Growing Forward Agreement allows federal, provincial and territorial governments to work in partnership towards common objectives.

Plans for meeting the priority
The Growing Forward Multilateral agreement was endorsed by federal, provincial and territorial Ministers in July 2008. Areas of investment include business risk management programs and a suite of non-business risk management programs which seek to improve the competitiveness of the sector with a focus on innovation, business development, environmental issues, regulatory issues, international markets and food safety, biosecurity and traceability.

AAFC has been working bilaterally with provincial and territorial governments to determine program details for the other cost-shared program elements including environment, food safety, science and innovation - as Growing Forward provides enhanced flexibility for provinces and territories to target investment in each region.

Bilateral negotiations are well underway in each province and territory with the aim of having non-BRM programs launched early in 2009-2010.

Delivering on other Government of Canada priorities Ongoing SO1
SO2
SO3

Why is this a priority?
A competitive agriculture and agri-food sector is important to the federal government. As such a number of key initiatives will complement Growing Forward in improving the competitiveness of the sector.

Plans for meeting the priority
AAFC will continue to put farmers first by exploring new and innovative ways to promote Canadian grain farmers at home and abroad. The department will work towards improving the efficiency of grain marketing to give producers the best choice of value for their grain in a competitive global market.

Another key initiative is supporting the development and expansion of the renewable fuels sector in Canada through the growth of ethanol and biodiesel use, and supporting farmer participation in the evolution of this sector.

Also essential for improving competitiveness is promoting innovation through ongoing investments in science and research to ensure that the sector has greater capacity to bring innovative products to market and improve competitiveness. In this regard, AAFC has been investing to improve the innovation system and accelerate the pace of innovations through specific initiatives such as foresighting, developing science clusters and innovation commercialization centres, accelerating the identification of investment opportunities in agriculture, enhancing on-farm innovation capacity, pathfinding, and targeting government resources to public good science projects.


 


Management Priorities Type Links to Strategic Outcomes (SO)
Note: SOs are described on page 4 of this document
Description
Delivering on management excellence Ongoing SO1
SO2
SO3
Why is this a priority?
Sound management practices, processes and systems, particularly in areas such as human resources and service delivery, are essential to AAFC's ability to deliver its programs and services and achieve its strategic outcomes efficiently and effectively.

Plans for meeting the priority
AAFC will work to align people to priorities by anticipating and supporting staffing needs and operational requirements, being transparent about where work is increasing and where it is decreasing, and helping AAFC employees access new internal opportunities and learning and development programs. The department will support the achievement of the government-wide priorities for public service renewal.

The department will continue to apply a flexible, client-focused approach to service delivery, working to improve delivery from the perspective of those receiving the services.

AAFC will also continue to strengthen its management and accountability in areas such as managing for results, financial management and control, and the review of departmental program spending. Furthermore, the department will be implementing actions to improve its management practices where opportunities have been identified in the Management Accountability Framework assessment, including strengthening internal audit.


An important element in achieving departmental priorities is AAFC's integrated planning process, which involves assessing current and future workforce capacity against evolving business priorities, identifying gaps, developing and implementing strategies to fill those gaps, and monitoring and reporting on progress. This process is guided by AAFC's three-year Integrated Human Resources Plan (updated annually), which articulates the department's business goals and sets out short and longer term people management strategies to ensure that these goals are met. This Plan recognizes that priorities and business requirements constantly evolve and that our people management activities must also be flexible and responsive. Branch-specific plans are developed for AAFC sub-organizations to address their more detailed or unique challenges.

Risk Analysis

Agriculture production carries inherent risk, including weather-related disasters, climate change, pests and disease, barriers to trade and competition for market-share. The impact of global economic uncertainty is hard-felt across the sector. Such risks and uncertainty underline the importance of sound mitigation strategies to prepare for and prevent or limit the impact of potential threats, while strengthening the capacity of the industry to respond and recover, as well as take advantage of new and emerging opportunities.

Agriculture and Agri-Food Canada supports one of Canada's most important industries to help ensure maximum benefits to this country's citizens. The agriculture and agri-food industry is national in scope and incredibly diverse, consisting of large, medium and small enterprises. Its value chain begins at the farm-gate and ends at the consumer plate. It provides both food and non-food commodities, relying upon cutting-edge technologies.

In advancing the Growing Forward policy framework, environmental initiatives identified in this report will not only safeguard and enhance Canada's resource base, but improve the industry's competitive position. Consistent and bankable BRM programs will help provide the kind of economic certainty that fosters investment in innovation. Innovation will lead to advances that further both environmental and business interests.

Several factors are limiting the ability of Canadian producers to compete in the global market. Competition from low-cost suppliers, coupled with more complicated and varied consumer tastes, makes meeting market demands increasingly challenging for the various segments of the value chain.

Some of these factors impacting the Canadian agriculture and agri-food sector now, and that could continue to have an impact in future years, include: an increasingly liberalized international trading environment; the impact of the volatility of the Canadian dollar on traded commodities and agricultural inputs; cost pressures for agricultural inputs such as feed, fertilizer and fuel; increased competition from low-cost and high-subsidy countries in bulk commodity markets, and a declining market share for some sectors in Canada; agricultural and other policies implemented by other countries; an increasing demand from domestic and international consumers for healthy and environmentally sustainable food and related products, with certification playing an increasingly important role for ensuring market access.

There is a need to continue providing the tools necessary to encourage adaptation that enables the sector to achieve lower costs, penetrate higher-value markets and achieve greater profitability. Given that Canada relies heavily on exports for the success of the sector, governments also need to work to ensure continued access to existing markets and to gain access to new ones, to protect and provide opportunity to producers.

AAFC's mandate to promote the competitiveness of the sector relies on other areas of jurisdiction, such as international trade and regulatory reform. The department works with its portfolio partners and other federal departments to ensure positive outcomes on these and related issues to support the long-term competitiveness and prosperity of the sector. Against this backdrop, with a multiplicity of interests and pressures brought to bear, AAFC must effectively manage risk to make progress on its priorities. This report describes how the department intends to spend resources to address environmental, competitive and innovative challenges to achieve that progress in an integrated manner.

Program delivery is an essential part of AAFC as the department continues to deliver complex programs in its shared jurisdiction with other governments. Managing in a shared jurisdiction such as agriculture, with a multiplicity of service delivery points and multiple responsibility centres, presents challenges in maintaining consistent service standards and uniform access to programming. The department has mitigation strategies in place or planned, including the implementation of a compliance audit plan and follow-up on recommendations, and enhanced program oversight and governance.

Systems and technology are integral to program delivery, as well as to the support of the management of internal operations. AAFC has substantial controls in place to mitigate systems and technology risks, including a comprehensive technology and architecture framework.

The department recognizes the importance of maintaining a productive, principled, sustainable, and adaptable work environment, including ensuring sufficient human resource capacity to meet current and future priorities and objectives. Key among the mitigation strategies is the Integrated Business Planning Process to determine the short-, medium- and long-term skill sets required by AAFC to deliver on its priorities. In addition, the department has strategies in place ensure capital projects are clearly aligned with program priorities, and to manage risks to its infrastructure across the country.

On a broader level, a catastrophic crisis caused by weather or disease outbreak is a significant risk for the sector. Mitigation strategies include the Deputy Minister Directive and Policy on Emergency Management that will help ensure the department's efforts compliment those of the Canadian Food Inspection Agency, the Emergency Management Policy, and Industry Emergency Preparedness Activities, including Emergency Response Plans and Industry Pandemic Planning.

Expenditure Profile

AAFC departmental spending varies from year to year in response to the circumstances in the agriculture and agri-food industry. AAFC programming responds to industry and economic factors in support of this vital part of our economy. Much of AAFC's programming is statutory and therefore fluctuates to meet the demands and requirements of agriculture producers.

The figure below illustrates AAFC's spending trend from 2005-2006 to 2011-2012, which reflects the variability of the departmental spending and demonstrates how AAFC's programming responds to the needs of the agriculture and agri-food sector.

AAFC Spending trend graphic

Over the period 2005-2006 to 2011-2012, Actual/Planned Spending varies from a low of $3.1 billion in 2011-2012 to a high of $3.49 billion in 2006-2007, a variation of 12.8 per cent.

AAFC's overall spending in 2006-2007 was relatively higher than other years primarily as a result of the 2006 Federal Budget announcement of $1.5 billion to assist farmers in the transition to more effective programming for farm income stabilization and disaster relief. Included in this was $900 million for the Canadian Agricultural Income Stabilization Inventory Transition Initiative (CITI).

2007-2008 spending included the Budget 2007 $1 billion funding for the Cost of Production and AgriInvest Kickstart programs. Forecast Spending for 2008-2009 (which represents authorized funding, as spending figures will not be available until the close of the fiscal year) is relatively less since the Budget 2007 $1 billion was one-time funding in 2007-2008 only. However, this is offset by funding for other programs, including the Tobacco Transition Program.

Notes:

1 Actual spending represents the actual expenditures incurred during the respective fiscal year, as reported in Public Accounts less Non-respendable Revenue, which include such items as refunds of previous years' expenditures, proceeds from the sales of Crown Assets, privileges, licenses and permits.

2 Forecast Spending reflects the authorized funding levels to the end of the fiscal year (not necessarily forecast expenditures).

3 Planned spending reflects funds already brought into the department's reference levels as well as amounts to be authorized through the Estimates process as presented in the Annual Reference Level Update. It also includes adjustments in future years for funding approved in the government fiscal plan but yet to be brought into the department's reference levels. Planned Spending has not been adjusted to include new information contained in Budget 2009, such as Strategic Review efficiency savings as well as new funding for the AgriFlexibility and Slaughterhouse programs. More information will be provided in the 2009-2010 Supplementary Estimates.

Actual, Forecast and Planned Spending amounts all exclude Services Received without charge.

Voted and Statutory Items

This table illustrates voted and statutory items as displayed in the AAFC Ministry Summary Table within the 2008-2009 and 2009-2010 Main Estimates.


($ millions)
Vote or Statutory Item Truncated Vote or Statutory Wording Main Estimates 2008-2009 Main Estimates 2009-2010
1 Operating Expenditures 530.8 657.9
5 Capital Expenditures 32.0 34.0
10 Grants and Contributions 379.0 417.0
15 Pursuant to Section 29 of the Financial Administration Act, to authorize the Minister of Agriculture and Agri-Food, on behalf of Her Majesty in right of Canada, in accordance with terms and conditions approved by the Minister of Finance, to guarantee payments of an amount not exceeding, at any one time, in aggregate, the sum of $1,500,000,000 payable in respect of cash advances provided by producer organizations, the Canadian Wheat Board and other lenders under the Spring Credit Advance Program and $1,500,000,000 payable in respect of cash advances provided by producer organizations, the Canadian Wheat Board and other lenders under the Enhanced Spring Credit Advance Program. 0.0 0.0
20 Pursuant to Section 29 of the Financial Administration Act, to authorize the Minister of Agriculture and Agri-Food, on behalf of Her Majesty in right of Canada, in accordance with terms and conditions approved by the Minister of Finance, to guarantee payments of amounts not exceeding, at any time, in aggregate, the sum of $140,000,000 payable in respect of Line of Credit Agreements to be entered into by Farm Credit Canada for the purpose of the renewed (2003) National Biomass Ethanol Program. 0.0 0.0
(S) Contributions Payments for the AgriInsurance Program 388.7 440.6
(S) Contribution Payments for the AgriStability Program 655.2 369.2
(S) Grant Payments for the AgriStability Program - 225.1
(S) Payments in connection with the Agricultural Marketing Programs Act 137.5 165.0
(S) Grant Payments for the AgriInvest Program - 139.4
(S) Grant Payments for the Agricultural Disaster Relief Program / AgriRecovery - 54.2
(S) Contribution Payments for the Agricultural Disaster Relief Program / AgriRecovery 108.4 54.2
(S) Contribution Payments for the AgriInvest Program 159.5 20.1
(S) Canadian Cattlemen's Association Legacy Fund 5.0 5.0
(S) Loan guarantees under the Farm Improvement and Marketing Cooperatives Loans Act 4.0 4.0
(S) Grants to agencies established under the Farm Products Agencies Act 0.2 0.2
(S) Contributions in support of the AgriInvest Cost of Production Element 100.0 -
(S) Contributions to employee benefit plans 69.2 63.7
(S) Minister of Agriculture and Agri-Food - Salary and motor car allowance 0.1 0.1
(S) Canadian Pari-Mutuel Agency Revolving Fund - (0.0)
Total Department 2,569.6 2,649.6

The Main Estimates for 2009-2010 are $2,649.6 million compared to $2,569.6 million for 2008-2009, an increase of $80 million. The increase is mainly attributable to increased funding for the roll-out of the new Growing Forward framework, AgriInsurance and the Agricultural Marketing Programs Act offset by a decrease for AgriStability and the fact that AgriInvest Cost of Production was in transition from being listed as a Statutory program in 2008-2009 to a Voted program in 2009-2010. As it had not been approved as such in time for inclusion in Main Estimates, it could not be listed. Funding associated with this, however, is included in Planned Spending figures reported in subsequent tables in this document.

The figures have been rounded to the nearest millions of dollars. Figures that cannot be listed in millions of dollars are shown as 0.0. Due to rounding, figures may not add to the totals shown.