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Minister’s Message

As Canada’s Minister of Transport and Infrastructure, I am pleased to submit Infrastructure Canada’s Departmental Performance Report for the period ending March 31, 2009.

In Canada’s Economic Action Plan, this government acknowledged the important role infrastructure holds in stimulating and rebuilding the Canadian economy. Along with accelerating billions of dollars in existing infrastructure funding, the Government of Canada’s plan provides $12 billion in new infrastructure investments over the next two years – when the Canadian economy needs it most. Provinces, territories and municipalities are matching much of the federal funding allowing us to support more projects and create more jobs.

The Government of Canada has demonstrated a commitment to create jobs and speed up funding by getting projects approved sooner and shovels in the ground faster. Through Canada’s Economic Action Plan, a $4 billion Infrastructure Stimulus Fund was established for construction-ready infrastructure projects, as well as a $1 billion Green Infrastructure Fund, which focuses on eco-friendly priorities and sustainable energy infrastructure. In addition, the Government of Canada has delivered on its five-point action plan to accelerate the seven-year Building Canada Plan, and committed an additional $500 million to the Communities Component, a program which targets projects in communities with populations of fewer than 100,000 people.

This government has continued to make key infrastructure investments and is accelerating infrastructure funding. In addition to the projects currently underway across the country, the new, accelerated and enhanced funds announced in Budget 2009 will stimulate the economy, create jobs, cut red tape, reduce duplication and streamline the approval process to speed up the start of infrastructure projects.

In pursuing this, we build on consultations I held with provincial and territorial counterparts last December and January, as well as with the municipal sector. Our work on the Economic Action Plan also moves forward from the progress outlined in this Report on investing our earlier and unprecedented $33 billion commitment to infrastructure.

The Honourable John Baird, P.C., M.P.
Minister of Transport, Infrastructure and Communities

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Section I: Departmental Overview

1.1 Summary Information

1.1.1 Raison d’être

Infrastructure Canada is responsible for federal efforts to enhance Canada’s public infrastructure through strategic investments, key partnerships, sound policies and research. The department exists to ensure that Canadians benefit from world-class public infrastructure.

1.1.2 Responsibilities

Infrastructure Canada was established in 2002 in order to lead the Government of Canada’s efforts in addressing the infrastructure challenges of the country. Since then, the organization has evolved to become a centre of expertise for issues related to infrastructure in cities, communities and regions across Canada. Infrastructure Canada is part of the Transport, Infrastructure and Communities Portfolio¹ (http://www.infc.gc.ca/department/ticp-eng.html), which addresses several key challenges facing Canada, in particular, those relating to our country’s economic growth, the state of the environment, and the safety and prosperity of our communities.

During 2008-2009, the Government of Canada committed to accelerate its efforts on the largest long-term infrastructure development program in over half a century, the $33 billion Building Canada Plan. In addition, on January 27, 2009, the government announced a new Economic Action Plan, providing significant new funding. Both of these important developments required Infrastructure Canada to rise above and beyond the goals that had been established for the year.

In late 2008, to address the challenges of the emerging global economic downturn, the Government of Canada engaged with provinces, territories, the municipal sector and other stakeholders to cut red tape and put spending under the Building Canada Plan on the fast track. In December 2008, the Minister of Transport, Infrastructure and Communities launched national infrastructure consultations with provincial, territorial, and municipal leaders to find ways to accelerate project approvals. During these meetings, the Minister and his counterparts discussed how they could cut red tape and provide funding sooner to get shovels in the ground in the 2009 and 2010 construction seasons. The result was a five-point action plan for the Building Canada Plan. Then, through Budget 2009, the Government of Canada took additional extraordinary and unprecedented action to stimulate the economy. The Minister of Transport, Infrastructure and Communities, through Infrastructure Canada, was charged with $5.5 billion in new stimulus spending to create jobs through investment in shovel-ready infrastructure projects, beginning in 2009-2010.

1.1.3 Strategic Outcome and Program Activity Architecture (PAA)

Infrastructure Canada’s strategic outcome was changed in May 2008 to better comply with the new Management, Resources and Results Structure (MRRS) Policy, and to better reflect current infrastructure priorities. This outcome is reflected in the 2009-2010 Report on Plans and Priorities (RPP), and will be used in the 2009-2010 Departmental Performance Report (DPR).

However, in support of its mandate, during the reporting period of 2008-2009, Infrastructure Canada had this Strategic Outcome, which was approved in July 2006:

Improving the sustainability of our cities and communities and Canada’s local, regional and national public infrastructure to enhance the economic, social, cultural and environmental quality of life of Canadians.

Three program activities supported this strategic outcome:

Infrastructure Investments: Consisted of all infrastructure programs delivered through transfer payments as well as the related program management and monitoring functions. This activity contributed to the construction, renewal and enhancement of public infrastructure in Canada and built capacity for addressing infrastructure issues in partnership with others.

Policy, Knowledge and Partnership Development: Consisted of activities undertaken in policy development, knowledge, research and analysis, and partnership development. This activity developed policies based on research, strengthened information base, and strong partnerships to address existing and emerging challenges and opportunities.

Internal Services: This program activity promoted excellence in program and corporate management in support of Infrastructure Canada’s priorities. Internal services consisted of Governance and Management Support (management and oversight, communications and legal), Resource Management Services (human resource mana-gement, financial management, information management and technology, travel and other administrative services) and Asset Management Services (real property, materiel and acquisition).

Figure 1: Infrastructure Canada Program Activity Architecture

1.1.4 Change of Strategic Outcome and Program Activity Architecture (PAA)

In the 2008-2009 Report on Plans and Priorities, it was stated that Infrastructure Canada planned to modify its strategic outcome in 2008-2009 to better comply with the new Management, Resources and Results Structure (MRRS) Policy and to better reflect current infrastructure priorities. Accordingly, in May 2008, Infrastructure Canada changed its strategic outcome to:

Quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a clean environment and liveable communities.

This strategic outcome reflects the long-term and enduring benefits to Canadians that stem from Infrastructure Canada’s mandate, vision and mission. It focuses on the area of direct influence on investments in quality and cost-effective public infrastructure, and represents a clear end-state for the department to strive towards. Under this new strategic outcome, Infrastructure Canada also revised its Program Activity Architecture structure in the Fall of 2008. The new PAA is composed of the following five program activities: Targeted Project-Based Infrastructure Funding, Provincial-Territorial Infrastructure Base Fund, Gas Tax Fund, Knowledge and Research and Internal Services.

In January 2009, Canada’s Economic Action Plan introduced new programs and priorities to Infrastructure Canada’s mandate, which have also become a component of the department’s planning and program framework.

The new infrastructure initiatives in the Economic Action Plan complement existing measures and are geared towards immediate economic benefits such as short-term job creation and short-term economic activity. The department is revising its existing PAA to reflect its role in implementing the Economic Action Plan.

1.2 Performance Summary

For Infrastructure Canada, 2008-2009 has been a year of significant achievement. The department has greatly exceeded the requirements of the business plan that had been established in 2007-2008. The government has achieved the goal it set in the Fall 2008, namely, to accelerate existing programs. As a result, in 2008-2009, Infrastructure Canada announced hundreds of new projects across the country under the Building Canada Plan. Above and beyond this, the department also took fast and effective action to develop new funding programs worth $5.5 billion in Spring 2009, in readiness for the 2009 construction season. Infrastructure Canada works in partnership with municipal, provincial, territorial and private planning, building sector and partners which are responsible for planning, building and rehabilitating public infrastructure.

1.2.1 Financial and Human Resources

Infrastructure Canada’s financial and human resources information over the reporting period are summarized in Tables 1 and 2.

Table 1: 2008-2009 Financial Resources (Net Cost of Programs in $ thousands)

Planned Spending	Total Authorities	Actual Spending
2,910,254	3,350,720	2,279,846

Table 2: 2008-2009 Human Resources (Full-Time Equivalents-FTE)

Planned	Actual	Difference
257	231	26

1.2.2 Program Activities by Strategic Outcome and Actual Spending

Table 3 summarizes the achieved results of the three main program activities, the actual spending under each activity as well as the alignment of these activities to the Government of Canada outcomes. The overall expected results for these program activities are improved and increased stock of core public infrastructure and improved quality of life and economic opportunities for Canadians.

Table 3: Performance Summary (Program Activities by Strategic Outcome)

Strategic Outcome: Improving the sustainability of our cities and communities and Canada’s local, regional and national public infrastructure to enhance the economic, social, cultural and environmental quality of life of Canadians. In May 2008, the Strategic Outcome was changed to: Quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a clean environment and liveable communities.
Performance Indicators	Targets	2008-2009 Performance
Under Development.	Under Development.	Under Development.

(in $ thousands)

Program Activity	2007-2008 Actual Spending	2008-2009				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
Program Activity 1: Infrastructure Investments	1,942,054	2,425,856	2,879,031	3,319,894	2,252,038	Strong Economic Growth
Program Activity 2: Policy, Knowledge and Partnership Development	12,714	12,220	12,220	8,819	8,199	Innovative and Knowledge-Based Economy
Program Activity 3: Internal Services		17,461	17,461	22,007	19,609
Total	1,954,768	2,455,537	2,910,254	3,350,720	2,279,846

Program Activity 1 (Infrastructure Investments), contributes to the Government of Canada’s Strong Economic Growth outcome area. By supporting modern public infrastructure, Infrastructure Canada promotes the growth and competitiveness of Canada’s economy, for example, by facilitating the flow of goods and people, promoting inter-provincial and international trade through gateways and corridors, supporting tourism and increasing the use of e-commerce.

Program Activity 2 (Policy, Knowledge and Partnership Development), contributes to the Government of Canada’s Innovative and Knowledge-Based Economy outcome area. Infrastructure Canada supports innovation and progress to deliver world-class public infrastructure and address priority infra-structure knowledge gaps through research, capacity-building and strong partnerships. Based on cooperation with other federal departments and agencies, partner organizations in the private sector and other jurisdictions, its work strengthens the information base for decision-making and improves understanding of how sound public infrastructure choices can help Canadians adapt and respond to emerging economic, environmental and social challenges. It also supports innovation and efficiency in the management, design, construction and maintenance of infrastructure and measures the effectiveness of programs and infrastructure investments.

Program Activity 3 (Internal Services), promotes excellence in program and corporate management in support of Infrastructure Canada’s priorities. Internal services consist of Governance and Management Support (management and oversight, communications and legal services), Resource Management Services (human resources management, financial management, information management and technology, travel and other administrative services), and Assets Management Services (real property, materiel and acquisitions).

For more information about the Government of Canada’s four broad Spending Areas and the corresponding 13 Outcomes, visit: http://www.tbs-sct.gc.ca/ppg-cpr/Home-Accueil-eng.aspx.

Table 4: Contribution of Operational Priority 1 to Strategic Outcome

Operational Priorities	Type2	Status	Linkages to Strategic Outcome(s)
Priority 1: Delivery and Accelerating key elements of the Building Canada Plan, and the Economic Action Plan.	Priority 1 is new. It represents the fact that Infrastructure Canada is responsible for key elements of the Building Canada Plan, the government’s new comprehensive, long-term plan to modernize Canada’s public infrastructure.	Met all expected results. In 2008-2009, Priority 1 activities were expanded to include also accelerating spending under the Building Canada Plan, which was only one aspect of the Economic Action Plan. In the second half of 2008-2009, the department: Undertook consultations with provinces, terrirories and municipalities to develop a five part action plan to accelerate funding; Streamlined funding criteria application processes, environmental assessment processes; and Worked with partners to identify and approve projects more quickly. In addition, in Budget 2009, under the Economic Action Plan the Government of Canada also committed to rolling out new infrastructure spending initiatives for provincial, territorial and municipal infrastructure included in Budget 2009, to renew infrastructure and to create jobs. Infrastructure Canada has the lead on the Infrastructure Stimulus Fund (ISF), the Green Infrastructure Fund (GIF), the $500 million Top-Up to the Building Canada Communities Component, the accelerated funding under the Provincial Territorial Base Fund and the National Recreation Trails. The department secured all the policy and program approvals for all initiatives before March 31, 2009, so that roll-out could begin as quickly as possible.	Delivering key elements of the Building Canada Plan, which has been accelerated, as well as new infrastructure initiatives for provincial, territorial and municipal infrastructure under the Economic Action Plan support the development and renewal of world-class modern infrastructure, as well as the creation of jobs.

Table 5: Contribution of Management Priority 2 to Strategic Outcome

Management Priorities	Type3	Status	Linkages to Strategic Outcome(s)
Priority 2: Managing the previous suite of infrastructure programs	Priority 2 is an ongoing priority, to ensure the sound management of infrastructure investments and sunsetting programs.	Met all expected results. In support of this priority, in 2008-2009 Infrastructure Canada has: Continued with the sound administration of the funding programs in cooperation with its federal delivery partners, including following up on program audit reports where recommendations for corrective actions are required; and Continued working with the provinces and territories to determine the projects to receive remaining uncommitted funds under the Canada Strategic Infrastructure Fund (CSIF) and the Municipal Rural Infrastructure Fund (MRIF).	Infrastructure Canada has continued to manage and leverage five established infrastructure investment funds to improve the state of Canada’s public infrastructure and, in turn, enhance the economic, social, cultural and environmental quality of life of Canadians. The department continues to work in a coordinated manner with other federal departments and agencies, provincial, territorial and municipal governments, and First Nations, in delivering the following funds, which are scheduled to wind down (sunset) over the next several years, i.e., the Infrastructure Canada Program (ICP), the Municipal Rural Infrastructure Fund (MRIF), the Canada Strategic Infrastructure Fund (CSIF), the Border Infrastructure Fund (BIF) and the Public Transit Fund (PTF). The department continues the sound administration of the funding programs in cooperation with its federal delivery partners, including following up on program audit reports where recommendations for corrective actions are required, complete management responses on mid-term evaluations where required, and continues to work with the provinces and territories to determine projects to receive remaining uncommitted funds under the CSIF and MRIF.

1.3 Risk Analysis

Throughout 2008-2009, the Canadian economy faced extraordinary challenges as a result of global financial volatility. Given the current economic circumstances, Infrastructure Canada has implemented measures aimed at reducing duplication, streamlining federal processes, fast tracking project approvals and accelerating funding under the Building Canada Plan and the new infrastructure funds announced in Budget 2009, in partnership with provincial, territorial and municipal governments. This effort includes the identification of specific projects in each jurisdiction that could be advanced to begin construction in the next two years.

The Government of Canada’s ability to accelerate infrastructure funding is largely dependent on the ability of provinces, territories and municipalities to identify projects that are ready for construction and can be fast-tracked, and to match accelerated federal funding where cost-sharing is required. Accelerating infrastructure funding also depends on the success of regulatory streamlining measures, particularly for federal environmental assessment requirements. Infrastructure Canada has worked closely with its partners to overcome approval and implementation barriers on a sustained basis.

1.4 Expenditure Profile

1.4.1 Departmental Spending Trends

Figure 2 represents Infrastructure Canada’s spending trends from 2004-2005 to 2008-2009.

Figure 2: Departmental Spending Trend

Departmental spending is increasing as spending on existing programs flows, and as new programs are created. In 2008-2009, Infrastructure Canada spent a record $2.3 billion on infrastructure investments in Canada under new and sunsetting programs. New funding programs were also announced in Budget 2009, but funding for these programs became available only as of April 1, 2009.

1.4.2 Variations in Program Spending Trends

Infrastructure Canada flowed a record amount of funding in 2008-2009 to provinces, territories and municipalities to support public infrastructure projects. Through a suite of transfer payment programs, the department supports quality, cost-effective public infrastructure investments across Canada. Program design recognizes the provincial, territorial and municipal responsibility for a majority of public infrastructure, and Infrastructure Canada’s participation as a funding partner. The department is not responsible for the management of infrastructure projects, but rather for the reimbur-sement of eligible expenses submitted by recipient project managers (for contributions programs), or in the case of other transfer payment programs, it provides stable base funding to provinces, territories and municipalities under the terms of signed agreements.

Public infrastructure projects are often large and complex, with complicated engineering and approval requirements, and significant variations in project cash requirements. Infrastructure Canada’s ability to predict the timing of its program spending is heavily influenced by its partners. Provinces, territories and municipalities are in turn subject to changes in planning and approval timelines, as well as construction delays. The challenges of designing, negotiating and implementing new program and project funding agreements which involve multiple partners and multiple orders of government also contribute to an often significant variation in spending forecasts.

The inherent difficulty of forecasting annual spending requirements for Infrastructure Canada’s programs was recognized during initial program design. It was further recognized that once funding agreements are concluded with recipients, it is not practical or desirable to limit federal project funding to a specific sum per fiscal year, regardless of changes in cash flow requirements. For this reason, the Department of Finance and Treasury Board Secretariat normally re-profile any unused program funds to future years, to meet the revised cash flow projections of recipients and to match the expenses by provinces, territories and municipalities. When program appropriations are not used, i.e., lapsed in a given fiscal year, the department regularly re-submits amounts to Parliament for re-approval, to meet ongoing program obligations as required. In this way, unused program funding is re-profiled to future years and will be available to provincial, territorial and municipal governments as infrastructure projects move forward.

The $1.1 billion of unspent 2008-2009 authorities has been re-profiled to future years. Terms and conditions of agreements and payment schedules have been amended as required, in order to extend timelines and allow applicants to complete their approved projects. Infrastructure Canada continues to work with its partners and central agencies to better match its planned spending and program delivery requirements.

1.4.3 Voted and Statutory Items

Table 6: Voted and Statutory Items Listed in Main Estimates (in $ thousands)

Vote # or Statutory Item (S)	Truncated Vote or Statutory Wording	2006-2007 Actual Spending	2007-2008 Actual Spending	2008-2009 Main Estimates	2008-2009 Actual Spending
50	Operating expenditures	32,593	35,177	37,530	36,637
55	Grants and contributions	1,414,680	1,917,009	2,414,778	2,240,257
(S)	Contributions to employee benefit plans	2,451	2,582	3,229	2,952
(S)	Payment to the Public Transit Fund	19,112
	Total	1,468,836	1,954,768	2,455,537	2,279,846

Infrastructure Canada’s budget for contributions has increased significantly from 2008-2009 to 2009-2010. This is due primarily to new funding received for the Building Canada Fund (BCF) and the doubling of the Gas Tax Fund (GTF). The Main Estimates can be accessed at: http://www.tbs-sct.gc.ca/est-pre/20092010/p2-eng.asp.

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