Frequently Asked Questions

1. What is the Expenditure Management system?
2. What are strategic reviews?
3. Who must conduct strategic reviews?
4. What is the process of strategic review?
5. Do all organizations have to identify 5% of their total spending?
6. What programs are reviewed through this process?
7. What is direct program spending and major statutory programs spending?
8. Does the Strategic Review process make use of advisers external to the Government?
9. How are the results of the reviews made available to the public?
10. Aren't strategic reviews just another way of cutting programs?
11. How does the government track results of strategic reviews?
12. What is the impact of strategic reviews on Public Service jobs?

1- What is the Expenditure Management System?

The Expenditure Management System, implemented in 2007, is the framework for developing and implementing the government's spending plans, and encompasses a number of elements and activities (e.g. planning, evaluation, etc.) that guide decisions on the allocation of resources.

Its various elements provide the information necessary to support the development of spending plans, the Government's priority setting process, fiscal and budget decisions, and the translation of those decisions into resource allocations for government programs.

The Government introduced a new expenditure management system in 2007 as part of an ongoing commitment to better manage government spending. This system ensures value for money for all government spending. A key pillar of this system is the ongoing assessment of all direct program spending, or strategic reviews.

2- What are strategic reviews?

In 2007, the Government of Canada introduced a new expenditure management system in order to better manage Government spending. Under this system, all government programs are put through a rigorous evaluation process called "strategic review."

The objective is simple: ensure that every tax dollar delivers results for Canadians and provides value for money.

One important element of this initiative is the regular review of the direct program spending by every department and agency on a four-year cycle, referred to as the Strategic Review Process. In this way, federal organizations are better able to:

• Increase efficiencies and effectiveness: programs deliver real results for Canadians and provide value for money.
• Focus on core roles: programs and services be aligned with the federal role and must be delivered by those best positioned to do so.
• Meet the priorities of Canadians: programs focus on the needs and priorities of Canadians.

As a result of their review, federal organizations identify reallocation proposals from programs that do not meet the above criteria.

Strategic review results are announced through the annual budget. By the end of this first four-year cycle, 98% of direct program spending will have been reviewed.

3- Who must conduct strategic reviews?

Federal organizations, including departments, agencies and Crown corporations that receive appropriations (public money) from Parliament, are required to undertake a strategic review of their direct program spending and the operating costs of their major statutory programs on a cyclical basis.

4- What is the process of strategic reviews?

Once they have completed a comprehensive review of all of their programs, organizations are required to identify a total of five percent of their program spending from their lower performing, lower priority programs.  These funds are proposed for reallocation to higher priorities.

Strategic reviews are done at the same time every year in order to put recommendations forward for consideration as part of the Government of Canada's annual budget planning process.  

Savings achieved through strategic reviews are redirected to Budget priorities to better meet the needs of Canadians.

5 - Do all organizations have to identify 5% of their total spending?

All organizations are required to identify reallocation options totalling 5% from their lowest-priority, lowest-performing program spending.

Organizations can identify more potential savings in order to provide a greater range of options.

6 - What programs are reviewed through this process?

Organizations review 100 percent of their direct program spending and the operating costs of their major statutory programs.

7 - What is direct program spending and major statutory programs spending?

Direct program spending is the cost of programs delivered by the federal government and consists of operating and capital spending as well as subsidies and transfer payments, such as Grants and Contributions made to provinces and territories.

Major statutory programs consist of the major transfers to other levels of Government, such as the Canada Health Transfer, the Canada Social Transfer, Fiscal Equalization, Territorial Financing, the Cities and Communities program, Youth Allowances Recovery, and Alternative Payments for Standing Programs Equalization.

They also include the major transfers to individuals, such as Elderly Benefits (including Old Age Security, the Guaranteed Income Supplement, and Spousal Allowances), Children's Benefits (including the Canada Child Tax Benefit and the Universal Child Care Benefit), and Employment Insurance benefits.

Although major statutory programs are not subject to strategic review, their operating costs are reviewed through this process.

8 - Does the Strategic Review process make use of advisors external to the Government?

Yes. Each organization is required to seek advice from arm's length external advisors to get a third party perspective on the process and its results.

9 - How are the results of the review made available to the public?

The final results of the annual Strategic Review process are announced in the federal budget of the following year. Results for the 2007 reviews were announced in Budget 2008, the 2008 reviews results were announced in Budget 2009 and results from the 2009 round of strategic reviews were announced in Budget 2010.

As with prior rounds, results from the 2010 strategic reviews were announced in Budget 2011.

10 - Aren't strategic reviews just another way of cutting programs?

Strategic reviews are about sound management of program spending and ensuring every government program is achieving results for Canadians.

As a result of their review, each federal organization identifies reallocation proposals from programs that do not deliver results for Canadians.  These savings are reinvested in Budget priorities.

Strategic reviews are one of the many steps the Government has taken since 2006 to keep spending focused on the priorities of Canadians and to ensure value for money.

11- How does the government track results of strategic reviews?

Each department is responsible for its strategic review process.

Every year, the strategic review results are published in the Government's Budget.

The information related to these decisions is incorporated into documents such as Reports on Plans and Priorities as well as Departmental Performance Reports, which are presented to Parliament annually.

12- What is the impact of strategic reviews on Public Service jobs?

Any impact on jobs is manageable through attrition and workforce adjustment agreements.