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Section II: Analysis of Program Activities by Strategic Outcome

Strategic Outcome

The Department of Finance Canada provides effective economic leadership with a clear focus on one strategic outcome, which all program activities support.

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This section presents the Department's four program activities, their expected results and performance indicators, and the financial and non-financial resources that will be dedicated to each. This section also identifies how the Department plans to meet the expected results.

Program Activity 1.1: Economic and Fiscal Policy Framework

Program Activity 1.1: Economic and Fiscal Policy Framework

Human Resources (FTEs) and Planned Spending ($ thousands)
2011–12		2012–13		2013–14
FTEs	Planned Spending	FTEs	Planned Spending	FTEs	Planned Spending
517	231,374.0	510	61,272.0	510	61,074.0

Program Activity Expected Results	Performance Indicators	Targets
An economic, social and fiscal framework that supports financial stability, sustainable growth, productivity, competitiveness and economic prosperity	Debt-to-GDP ratio	No target. The goal is to compare favourably with G7 counterparts.
	Competitiveness and efficiency of Canada’s tax system	No target. The goal is to continue to propose changes to the tax system that improve incentives to work, save and invest.
	Stability of financial services sector	No target. The long-term goal is to contribute to low and stable interest rates.

Description Summary

This program activity is the primary source of advice and recommendations to the Minister of Finance in exercising his portfolio responsibilities and regarding issues, policies and programs of the Government of Canada related to the areas of economic and social policy, federal-provincial fiscal relations, financial affairs, tax matters, and international trade and finance. The work conducted by this program activity involves extensive research, analysis, and consultation and collaboration with partners in both the public and private sectors to develop a sound and sustainable fiscal and economic framework. It also involves advice and support to the Minister of Finance in exercising his portfolio responsibilities. In addition, it involves the negotiation of agreements and drafting of legislation.

Planning Highlights

Supporting sound economic growth and fiscal management

In 2011–12 the Department of Finance Canada will continue to ensure the effective management of the fiscal framework and will implement the government's plan to bring the budget back to balance over the medium term. This effort includes continuing the systematic review of the government's corporate assets, including enterprise Crown corporations, real property and other holdings. The Department will also continue to identify additional savings following the comprehensive review of government administrative functions and overhead costs.

The Department will continue to work with other departments on the reporting and assessment of Canada's Economic Action Plan.

Improving tax competitiveness, efficiency and fairness

Over the planning period, the Department of Finance Canada will continue to play a central role in supporting the government’s initiatives to ensure a competitive, efficient and fair tax system. This effort will include exploring options for the taxation of corporate groups and continuing to analyze the international tax system to identify opportunities for improving its fairness and competitiveness. The Department will also provide support to the Expert Panel undertaking a review of all federal support for research and development, including the Scientific Research and Experimental Development Tax Incentive Program. 

To maintain the integrity of the tax system, the Department will ensure that the government can proceed with the implementation of anti-avoidance measures announced in Budget 2010. It will also negotiate international tax treaties and tax information exchange agreements to combat tax avoidance and tax evasion. In addition, it will address the backlog of outstanding legislation.

The Department will also support the government in ensuring the appropriateness and integrity of the various benefits and tax assistance provided to individuals through the Income Tax Act, including support for retirement and other savings, families, caregivers, charities, education, and savings and entrepreneurship.

Supporting the government’s economic agenda

In the planning period, the Department of Finance Canada will work toward the implementation of the government’s economic agenda in several economic sectors, including manufacturing, agriculture, fisheries, and forestry, as well as in the areas of energy and the environment, innovation, regional economic development, infrastructure, and defence and public safety.

In addition, the Department will fulfill its central agency role by identifying and analyzing major policy issues and proposals under development in the economic departments, as well as by providing policy advice to the Minister about the financial implications and relevance of proposals to the government’s microeconomic policies. The Department will also continue to oversee Crown corporations under the Minister’s responsibility, including PPP Canada Inc.

Ensuring accessibility, sustainability and effectiveness of federal transfers and social programs

The Department of Finance Canada will manage current and emerging issues related to social policy and major transfer programs to ensure that federal transfers and social programs remain accessible, sustainable and effective for Canadians. Also, in support of the Minister of Finance’s commitment to his provincial and territorial counterparts at their June 2010 meeting in Prince Edward Island, the Department will continue to engage with provincial and territorial officials in preparation for the renewal of major transfers in 2014–15.

Supporting a sound social policy framework

In collaboration with other departments and central agencies, the Department of Finance Canada will continue to work to develop policy proposals that are consistent with, and deliver on, the government’s priorities in areas such as justice and public safety, labour markets, income security and aboriginal issues.

The Department will continue to work with provinces and territories to strengthen the retirement income system. Specifically, the Department will work with provincial and territorial officials to implement Pooled Registered Pension Plans (PRPPs), taking into account the perspectives of employers, employees and those that may offer PRPPs, in developing legislation to implement these plans. The Department will also develop modifications to the tax rules to accommodate PRPPs, with the objective of ensuring that such plans fit within the basic system of rules and limits for Registered Pension Plans and Registered Retirement Savings Plans. In addition, the Department will review the report of the Task Force on Financial Literacy, which will be released in early 2011, and will work collaboratively with the provinces and territories to respond to the recommendations in the report. Finally, the Department will continue to work on options and considerations for a modest, fully funded and phased-in expansion of the Canada Pension Plan. 

Improving efficiency and effectiveness of the financial system

To address issues regarding the competitiveness and efficiency of the Canadian financial system and the effectiveness of financial sector regulatory initiatives, the Department of Finance Canada will continue to assess Canada’s financial framework against key internationally recognized standards to ensure that the Canadian financial sector policy framework fosters confidence and supports stable, efficient and competitive financial services delivery. The Department will continue working toward the establishment of a Canadian securities regulator, strengthening the assessment of systemic risk vulnerabilities and evaluating the resolution framework for large financial institutions.

To refine the existing financial sector frameworks, the Department will continue to work on updating the financial institutions statutes, developing options for an effective national strategy on financial literacy and developing an effective and efficient payment system as well as an effective anti-money laundering policy and laws. The Department will continue to be involved in a partnership with several organizations in Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime, to detect and deter money laundering and financing of terrorist activities.

The Department will also continue to ensure access to financing for individuals and businesses in Canada by monitoring credit conditions, developing a covered bond legislative framework, and formulating an action plan for securitization market reform.

The Department will continue to support work relating to the Financial Action Task Force, the Financial Stability Board, and G7/G8, G10, G20 and other international meetings. It will also continue to lead the negotiation of financial services elements in trade agreements and will advance bilateral relationships.

Supporting global finance and trade environment

In the wake of the global financial crisis and ensuing recession, in 2011–12 the Department of Finance Canada will continue to provide high-quality advice and leadership in international efforts to develop a global framework for strong, sustainable and balanced growth and to help prevent future crises from occurring.

The Department will deliver advice to support Canada’s engagement on international economic cooperation matters in the G7 and G20 and the International Monetary Fund. The Department will also advance innovative financing tools in the international community that balance fiscal restraint with Canada’s support for global development goals.

The Department will continue to work to further liberalize international markets through the conclusion of the World Trade Organization Doha Round of Multilateral Trade Negotiations, and regional and bilateral trade agreements. The Department will also continue to support the competitiveness of Canadian manufacturers with appropriate tariff and customs policies.

Contributing to the Federal Sustainable Development Strategy

A number of tax policies for which the Department of Finance Canada is responsible contribute to the Federal Sustainable Development Strategy. The Strategy's theme of Addressing Climate Change and Air Quality is supported by the accelerated capital allowance for clean energy generation equipment, the Green Levy on certain fuel-inefficient passenger vehicles, and the Public Transit Tax Credit. In addition, the Ecological Gift Program supports the theme of Protecting Nature.

Further details relating to the activities of the Department that support the Federal Sustainable Development Strategy are available on the Department's website.^[6]

Benefits for Canadians

Through sound fiscal management, the government ensures that Canada’s social infrastructure is sustainable over the long term. Returning to balanced budgets will allow the government to invest in areas that are vital to Canada’s long-term growth and to ensure fairness and equity toward future generations by avoiding future tax increases or reductions in government services in the context of an aging population.

The effective design of transfer payment programs providing support for the provinces and territories, and improvements to the social policy framework, contribute to improved public services for Canadians; support the quality of life in Canada's communities; help ensure accessible and quality health care, education, and social safety net programs; and promote equality of opportunity for all citizens.

A sound, efficient and competitive Canadian financial sector will support the savings and investment needs of Canadians.

Canadian leadership and influence on international economic, financial, development, and trade issues contribute to increased financial and economic stability.

Program Activity 1.2: Transfer and Taxation Payment Programs

Program Activity 1.2: Transfer and Taxation Payment Programs

Human Resources (FTE) and Planned Spending ($ thousands)
2011–12		2012–13		2013–14
FTEs*	Planned Spending	FTEs*	Planned Spending	FTEs*	Planned Spending
—	55,002,295.4	—	55,720,453.7	—	58,476,184.7

*Only transfer payments are reflected in this program activity.

Program Activity Expected Results	Performance Indicators	Targets
Design and administration of the provision of payments to Canadian provinces and territories in support of providing their residents with public services, and to international organizations to help promote the economic advancement of developing countries	Regulations amended to reflect changes made to the Equalization program in Budget legislation	According to statutory requirements, or as determined by environment
	Timely provision of information for Government of Canada reports	No target, as materials are generated on an as-needed basis according to environment
	Percentage of reporting requirements met, including reporting to Parliament, the Office of the Auditor General of Canada, internal auditors, the International Monetary Fund and the Organisation for Economic Co-operation and Development, etc.	100% of requests fulfilled on time and in an accurate manner

Description Summary

This program activity administers transfer and taxation payments to provinces and territories, and taxation payments to Aboriginal governments. In accordance with legislation and negotiated agreements, the Department of Finance Canada provides fiscal equalization and support for health and social programs and other shared national priorities. The program activity also covers commitments and agreements with international financial institutions aimed at aiding the economic advancement of developing countries.

Planning Highlights

Fiscal arrangements with provinces and territories

In the context of changing demographics and ongoing uncertainty surrounding the global and domestic economic outlooks, it is important that federal transfers and social programs remain accessible, sustainable and effective for Canadians.

The Department of Finance Canada commits to continue to provide timely, accurate and transparent administration of major transfer programs. It will also provide effective management of transfer programs, including the calculation of entitlements based on formulas established in legislation and regulations, the provision of payments, the provision of information to provincial and territorial officials, including auditors, and the provision of information for Government reports and to federal auditors.

The Department will continue to update legislation and regulations where required, and to enhance the transparency of the federal transfer system.

Improving tax agreements with provinces, territories and Aboriginal governments

The Department of Finance Canada will continue to administer its tax agreements with provinces and territories to ensure accurate and timely information, including the calculation of tax payments.

To support self-government, the Department will also participate in negotiations with Aboriginal governments for new Tax Administration Agreements and will work with provinces and territories to facilitate similar arrangements between them and Indian bands.

Supporting international development

At the international level, Canada will continue to exert international influence in supporting multilateral development banks in fulfilling their renewed mandates, and will ensure that transfer payments to international organizations are processed appropriately and in a timely manner.

Toronto waterfront renewal

In 2011–12, the Department of Finance Canada will continue to be responsible for leading federal participation in the Toronto Waterfront Revitalization Initiative (TWRI), including managing the associated TWRI funding.

Federal participation in the TWRI has been extended by three years to 2013–14 to allow for the completion of the remaining federally funded projects prior to the end of 2011–12, and for the administrative windup of the program by the federal TWRI Secretariat, no later than March 31, 2014.

Benefits for Canadians

The transfer payment programs administered by the Department of Finance Canada provide significant financial support to provincial and territorial governments on an ongoing basis to assist them in the provision of important programs and services.

Agreements with provinces, territories and Aboriginal governments regarding tax payments allow the government to streamline service and reduce compliance and administrative costs for taxpayers by having common forms and a single tax administrator. Tax Administration Agreements with Aboriginal governments also allow the federal government to support self-government by vacating and sharing a negotiated portion of its goods and services tax and personal income tax room with Aboriginal governments and to administer Aboriginal tax regimes.

Sustainable urban development and infrastructure renewal in the Toronto waterfront area create and enhance employment and cultural opportunities for Canadians, and provide positive economic spinoffs while improving the existing environmental conditions.

Program Activity 1.3: Treasury and Financial Affairs

Program Activity 1.3: Treasury and Financial Affairs

Human Resources (FTEs) and Planned Spending ($ Thousands)
2011–12		2012–13		2013–14
FTEs	Planned Spending	FTEs	Planned Spending	FTEs	Planned Spending
25	30,381,000.0	25	33,151,000.0	25	34,154,000.0

 

Program Activity Expected Results	Performance Indicators	Targets
Prudent and cost-effective management of the government’s treasury activities and financial affairs	Achievement of operational and strategic objectives	100% of program line targets achieved
	Control of financial and operational risks	Risk events do not disrupt program operations

Description Summary

This program activity provides direction for Canada's debt management activities, including the funding of interest costs for the debt and service costs for new borrowing. In addition, it manages investments in financial assets needed to establish a prudent liquidity position. This program activity supports the ongoing refinancing of government debt coming to maturity, the execution of the budget plan, and other financial operations of the government, including governance of the borrowing activities of major government-backed entities, such as Crown corporations. This program activity is also responsible for the system of circulating Canadian currency (bank notes and coins) to meet the needs of the economy.

Planning Highlights

Supporting the management of treasury and financial affairs

In the 2011–12 planning period, the Department of Finance Canada will take action to ensure sufficient funding for government debt management operations while providing appropriate flexibility to adapt to changing circumstances, and ensure timely, cost-effective and well-managed funding for Crown corporations.

The Department will ensure effective cost of borrowing for Crown corporations, perform analysis and provide advice to the Minister on the medium-term debt strategy and on the prudential liquidity position of the Government of Canada. The Department will also provide advice on governance arrangements for Crown corporations and on the scope of their activities.

In the area of circulating currency, the Department will support the introduction of new bank notes by the Bank of Canada. The Department will also review and amend its Memorandum of Understanding with the Royal Canadian Mint and will support measures to reduce the cost of coinage.

In conjunction with the Bank of Canada, the Department will continue to oversee the implementation of the Debt Strategy plan announced in Budget 2010 and to manage the Retail Debt Program to support key activities and reduce administrative costs.

Benefits for Canadians

Through its work in managing treasury and financial affairs, the Department of Finance Canada contributes to the Government of Canada's effective debt and other cost management on behalf of Canadians.

An effective system of circulating coinage also ensures efficient trade and commerce across Canada.

Program Activity 1.4: Internal Services

Program Activity 1.4: Internal Services*

Human Resources (FTEs) and Planned Spending ($ millions)
2011–12		2012–13		2013–14
FTEs	Planned Spending	FTEs	Planned Spending	FTEs	Planned Spending
245	42,731.0	245	42,535.0	245	42,533.0

*Measures within this program activity contribute to the Federal Sustainable Development Strategy. For further details, please see http://www.fin.gc.ca/purl/susdev-eng.asp.

Description Summary

This program activity enables the Department of Finance Canada to deliver its management agenda through related activities and resources that support the needs of departmental programs and the organization's corporate obligations. These activities are legal services, public affairs and communications, internal audit and evaluation, and corporate services, which include human resources, financial management, procurement, facilities and asset management, and information management and information technology services.

Planning Highlights

The Department of Finance Canada faces several challenges over the planning period given the significant workload associated with bringing the Budget back to balance and completing the implementation of Canada's Economic Action Plan, as well as effectively managing restraint measures and implementing the recommendations from the review of government administrative functions and overhead costs.

Refining the planning process, management of risks and performance measurement

The government's requirements to continue to improve the integration of business and human resources planning, and considerations of fiscal restraint, will require further refinements of the Department's integrated planning process to ensure that available financial and human resources are deployed to the highest-priority areas. As well, continued government focus on management, accountability and results will require enhanced performance measurement and risk management activities to support effective departmental performance and reporting.

The main objective of the communication strategy contained in the Department's Corporate Risk Profile will be to develop a common understanding of the Department's risk management approach across the organization to ensure that existing and emerging risks are identified and managed within acceptable risk tolerances.

Also, the Department will refine its performance measurement framework to ensure appropriate, accurate, evidence-based and balanced portrayals of departmental performance.

Supporting departmental initiatives

Legal officers will continue to offer quality advisory, drafting, and litigation services in support of departmental initiatives and business priorities. It is expected that particular attention will be focused on matters such as the establishment of the proposed Canadian securities regulator and on the implementation and ongoing administration of various tax policy initiatives, including comprehensive and integrated tax coordination agreements, tax collection agreements, budgets and other measures.

Moreover, the Department of Finance Canada will continue to advance initiatives undertaken in previous years, including the following:

• Developing and implementing a Code of Conduct for the Department that is consistent with the provisions of the Values and Ethics Code for the Public Service, to ensure that departmental employees continue to meet the highest standards of professional ethics and conduct;
• Continuing to administer the Conflict of Interest Code for the Department of Finance and to review mandatory employee submissions;
• Promoting sound management of Access to Information and Privacy requests, including the appropriate handling and protection of personal information and the timely provision of information to Canadians;
• Encouraging innovation, employee development and career aspirations, and the use of both official languages;
• Developing the departmental Evaluation Plan and Risk-Based Audit Plan to support the effective management of the Department;
• Strengthening the integration of departmental business and human resources planning to ensure the optimal deployment of resources to the highest-priority areas;
• Assessing and preparing for implementation of new government-wide policies in financial management;
• Improving the key components of the Departmental Security Program, including the Departmental Business Continuity Planning Program, physical security safeguards, and up-to-date security awareness;
• Ensuring that roles, responsibilities and activities relating to Information Management and Information Technology (IT) are aligned with departmental plans and priorities; and
• Investigating alternative methods of IT service provision to improve service and reduce costs.

Contributing to the Federal Sustainable Development Strategy

The Department of Finance Canada is a participant in the Federal Sustainable Development Strategy. In 2011–12 the Department will contribute to the fourth priority theme area, Shrinking the Environmental Footprint – Beginning with Government, and to other areas related to Greening Government Operations (GGO), through the Internal Services program activity. The Department will contribute to the GGO areas by:

• Integrating environmental considerations into procurement processes and controls;
• Integrating environmental performance into the procurement of information technology, furniture, and other commodities as appropriate;
• Ensuring reuse, recycling, or environmentally sound and secure disposal of surplus materiel;
• Promoting environmentally aware meetings by incorporating environmental considerations into the planning of meetings and events; and
• Monitoring and reporting initiatives such as the reuse and donations of surplus materiel, acquisition cardholder training and green stewardship.

For additional details on the Department's GGO activities, please see the GGO table on the Treasury Board Secretariat of Canada's website.^[7]

Benefits for Canadians

The Department of Finance Canada plays an important role in developing and implementing strong and sustainable advice, policies and programs that will make a difference for Canadians. Efficient and effective internal services support the Department's operational and management priorities to ensure that financial and material resources, which Parliament provides to the Department, are used appropriately and that competent personnel are in place to carry out the Department's mandate. To that end, a strong internal audit capacity will help ensure that the Department is well managed to meet the needs of Canadians. A robust integrated planning, risk management and performance framework will better support planning, reporting and decision-making processes that deliver results to Canadians.

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