ARCHIVED - NAFTA Secretariat — Canadian Section

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SECTION 1 - DEPARTMENTAL OVERVIEW

1.1 The Minister's Message

The North American Free Trade Agreement (NAFTA) - now in its 16th year - has contributed to significant increases in trade and foreign direct investment in North America. NAFTA has contributed to the competitiveness of the North American region by sharpening the competitive advantages of businesses and increasing the prosperity of our citizens. Canada remains committed to NAFTA as the cornerstone of North American competitiveness.

NAFTA covers a broad range of issues. It provides for the elimination of duties for practically all goods, facilitates the cross-border movement of business persons, addresses certain non-tariff barriers and provides formal mechanisms for resolving disputes. NAFTA created one of the largest free trade areas in the world and has a total market place of some 444 million consumers, with a combined Gross Domestic Product (GDP) of $18.0 trillion in 2008. Prior to the current global economic situation, North American employment levels had climbed 24% between 1993 and 2008, representing a net gain of 40.1 million jobs.

The NAFTA Secretariat is composed of the Canadian Section, the U.S. Section and the Mexican Section. It administers the mechanisms specified under the NAFTA to resolve trade disputes between national industries and/or governments in a timely and impartial manner. Through increasing the quality of the management of international trade dispute settlement processes, the Canadian Section of the NAFTA Secretariat also contributes to the strengthening of Canada's international trade performance. Exporters and investors are far more likely to engage in international commerce when they have access to impartial dispute settlement mechanisms should disagreements arise.

Canada's economic prosperity will continue to be defined by its success in an increasingly integrated international market, especially in North America. With today's global recession, Canada must look forward; we must continue with a renewed commitment to the removal of barriers to the free flow of trade and investment in combination with an effective mechanism to resolve any potential dispute. Under these circumstances, the conditions will be set where Canadians can further excel and where Canada can rise from today's economic downturn under more favourable conditions.

I encourage the Canadian Section of the NAFTA Secretariat to continue its high level of service in the administration of dispute settlement mechanisms of the NAFTA.

1.2 Summary Information

This report begins by briefly describing the purpose of the NAFTA Secretariat, Canadian Section, followed by the Canadian Section's strategic outcome and performance results for the period under review, including financial performance and operating environment. The report then summarizes risks and challenges as well as human and financial resources. The final section provides organizational information on who we are and what we do.

The report reflects the Government of Canada Reporting Principles, which requires departments and agencies to:

• focus on the benefits for Canadians, explain the critical aspects of planning and performance, and set them in context;
• present concise, credible, reliable, and balanced information;
• associate performance with plans, priorities, and expected results, explain changes, and apply lessons learned; and
• link resources to results.

1.2.1 Raison d'être and Responsibilities

The NAFTA Secretariat, Canadian Section is an independent agency created in 1994 under the North American Free Trade Agreement Implementation Act (see Annex A for the full mandate of the Secretariat). Its principle responsibility is to administer the dispute settlement provisions in NAFTA Chapters 19 and 20. It also provides assistance to the Ministerial level Free Trade Commission when required and participates in the Chapter 19 Working Group. The Canadian Section's mandate was expanded in 1997 and again in 2002 to include the administration of dispute settlement provisions in Canada's Free Trade Agreements with Israel, Chile and Costa Rica.

To fulfill its mandate, the Canadian Section must maintain a highly efficient, effective and impartial process for the implementation of dispute settlement provisions under NAFTA and the bilateral Agreements. This is an important contribution to preserving the benefits of free trade for all stakeholders.

The Canadian Section of the NAFTA Secretariat is funded by Parliament through a program expenditures vote. It reports to Parliament, for financial accountability purposes, through the Minister of International Trade.

For more details on the operating context, see the NAFTA Secretariat website at http://www.nafta-sec-alena.org and the Canadian Section website at http://www.nafta-alena.gc.ca/en/view.aspx

1.2.2 Strategic Outcome and Program Activity Architecture (PAA)

The chart below illustrates the NAFTA Secretariat, Canadian Section's strategic outcome supported by its key program activity.

Strategic Outcome	A highly efficient, impartial and rules-based international trade dispute resolution process that benefits Canadian exporters to NAFTA countries, as well as NAFTA country exporters doing business in Canada
Program Activity	Administration of International Trade Dispute Settlement Mechanisms

1.2.3 Financial and Human Resources

Total Financial Resources ($ 000)

2008-2009
Planned Spending	Authorities	Actual Spending
$3,004	$3,089	$1,578

Total Human Resources (FTEs)

2008-2009
Planned	Actual	Difference
13	11	-2

1.2.4 Performance Summary

The tables below show planned and actual spending by our key program activity. It also indicates how each operational priority performed in achieving expected results and the link to the agency's only strategic outcome.

Strategic Outcome: A highly efficient, impartial and rules-based international trade dispute resolution process that benefits Canadian exporters to NAFTA countries, as well as NAFTA country exporters doing business in Canada
Performance Indicators	Targets	2008-09 Performance
Perception of institutional independence and increased confidence by participants in the integrity of the dispute settlement process	At least 80 % or more of the clients are satisfied that the NAFTA Secretariat, Canadian Section, administered the dispute settlement provisions in a manner that ensures unbiased administrative processes, equity and fairness	There were no cases filed in Canada during the year under review. As a result, the client satisfaction monitoring survey could not be carried out

 

Program Activity	2007-08 Actual Spending ($, 000)	2008-09 Main Estimates ($, 000)	2008-09 Planned Spending ($, 000)	2008-09 Total Authorities ($, 000)	2008-09 Actual Spending ($, 000)	Alignment to Government of Canada Outcome
Administration of International Trade Dispute Settlement Mechanisms	1,618	3,004	3,004	3,089	1,578	A Strong and Mutually Beneficial North American Partnership
Total	1,618	3,004	3,004	3,089	1,578

1.2.5 Contribution of Priorities to Strategic Outcome

Operational Priorities	Type	Status	Linkages to Strategic Outcome
1. Effective administrative support to panels and committees to ensure efficient and effective dispute settlement processes	Ongoing	Successfully met	A highly efficient, impartial and rules-based international trade dispute resolution process that benefits Canadian exporters to NAFTA countries, as well as NAFTA country exporters doing business in Canada
2. Foster better collaboration with delivery partners in the administration of trade disputes	Ongoing	Successfully met	Same
Management Priorities	Type	Status	Linkages to Strategic Outcome
3. Continuous improvement of information management	Ongoing	Partially met	Same
4. Increased human resources management to ensure the development of a professional workforce	Ongoing	Successfully met	Same
5. Review of sustainability of the infrastructure to meet information technology and physical assets needs	New	Successfully met	Same
6. Strategic Plan and an Integrated Business and Human Resources Plan	New	Successfully met	Same

1.2.6 Risk Analysis - Operating Environment

The NAFTA Secretariat operates in a context where different legal, linguistic, business and cultural traditions prevail. Managing the Canadian participation in this tripartite organization must be conducted within the policies and practices of the Canadian Government and also be harmonized with administrative practices of its U.S. and Mexican partners. New initiatives often require extensive consultations and negotiation before they can be implemented. In light of this, maintaining close working relationships with its counterpart sections in the United States and Mexico is fundamental to the Canadian Section's effective performance.

1.2.7 Expenditure Profile

The expenditure profile of the Canadian Section can vary from year-to-year and future spending trends are difficult to predict. This is because the costs associated with delivery of its program fluctuate with the number of dispute settlement cases that are filed. In 2008-09, the number of cases involving Canada was much fewer than previous caseload years.

The government is nevertheless required under NAFTA and Canadian legislation to maintain the dispute settlement system and be ready for new cases as they arise. This includes management of the web-enabled dispute settlement case registry system and the NAFTA Secretariat website, both of which are the responsibility of the Canadian Section on behalf of the Secretariat, as well as the provision of information to governments and the public on an ongoing basis. The corporate expenses associated with the management of the agency itself are ongoing.

The figure below shows the Canadian Section's spending trends from 2005-06 to 2008-09.

Spending Trend ($, 000)

1.2.8 Voted and Statutory Items ($, 000)

Vote or Statutory Item	Truncated Vote or Statutory Wording	2006-2007 Actual Spending	2006-2007 Actual Spending	2008-2009 Actual Spending	2008-2009 Actual Spending
45	Program Expenditures	1,377	1,524	2,814	1,464
(S)	Contributions to Employee Benefit Plans (EBP)	134	94	190	114
	Total	1,511	1,618	3,004	1,578

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