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President's Message

I am pleased to present the 2008–09 Departmental Performance Report of the Treasury Board of Canada Secretariat (the Secretariat). This report outlines actions taken to make the government more effective and aligned with the priorities of Canadians—many of whom have been affected by the global economic recession.

The Secretariat can be very proud of its achievements over the past year. It was instrumental in the implementation of Canada's Economic Action Plan—the earliest budget in Canadian history—designed to boost the economy over a 24-month period. Using a number of innovative measures, Secretariat officials put the government in a position to respond quickly and effectively to the needs of Canadian families and businesses, while continuing to ensure accountability and transparency. In just 42 days, Treasury Board ministers reviewed $20 billion in spending authorities. This meant that Canada was able to provide one of the largest and fastest stimulus packages among the G8 countries.

The Secretariat also continued to improve the stewardship of public funds through its Expenditure Management System, which includes strategic reviews of every department on a
4-year cycle. Over the past year, 21 departments and agencies representing approximately 27 per cent of total government program spending took part in the second round of reviews. The savings identified have been redirected to fund Budget 2009 priorities.

Another achievement that involved the close collaboration of several departments was the creation of the new Office of the Chief Human Resources Officer at the Secretariat. The new office combines the functions of the former Canada Public Service Agency with those of the Secretariat that deal with pensions and benefits, labour relations, and compensation. This important restructuring, which will reduce overlap and duplication, is the result of the 2008 horizontal strategic review of the six federal organizations with responsibilities for human resources management. It also follows the recommendations of the second annual report of the Prime Minister's Advisory Committee on the Public Service.

This year, we also concluded and signed 19 collective agreements and accelerated negotiations with 26 of the 27 collective bargaining tables. I am particularly proud of the work we did to update the lengthy, costly, and adversarial complaint-based pay equity regime. Through the Public Sector Equitable Compensation Act, we have set out a rigorous process to ensure that employers address pay equity issues in a timely way.

Through its Web of Rules Action Plan, the Secretariat continued to reduce the unnecessary and ineffective rules, requirements, and processes that constrain public service employees from delivering first class programs and services to Canadians. For example, this year we reduced the reporting burden associated with our human resources policies by 80 per cent.

These initiatives and many others are part of an ongoing commitment to management excellence in the public service of Canada. I look forward to building on these efforts with the dedicated men and women of the Secretariat.

Original signed by

The Honourable Vic Toews, P.C., Q.C., M.P.
President of the Treasury Board

Section I: Departmental Overview

Raison d'être

The Treasury Board of Canada Secretariat (the Secretariat) is the administrative arm of the Treasury Board. As such, it supports Treasury Board ministers and strengthens the way government is managed to better serve Canadians and ensure value-for-money in government spending.

Responsibilities

The Secretariat together with the Canada School of Public Service, the Office of the Commissioner of Lobbying of Canada, and the Office of the Public Sector Integrity Commissioner form the portfolio of organizations that support Treasury Board. Effective March 2, 2009, the Canada Public Service Agency (CPSA) became the Office of the Chief Human Resources Officer^[1] (OCHRO) and is now housed within the Secretariat. A separate Departmental Performance Report for 2008–09 has been published for the former agency and can be found on the Secretariat's website.^[2]

The Secretariat makes recommendations and supports Treasury Board in each of its roles by providing advice on policies, directives, regulations, and program spending that promote sound management of government resources. The Secretariat also provides leadership and guidance to management functions within departments,^[3] while respecting the primary responsibility and accountability of deputy heads in managing their departments and their roles as accounting officers. Through the Office of the Comptroller General of Canada (OCG), the Secretariat is responsible for government-wide direction, leadership, and capacity building for financial management and internal audit. With the creation of the OCHRO, the Secretariat supports people management across the public service, including the management of labour relations, compensation, and pension and benefits policies and programs.

The Secretariat plays three central roles in relation to the various federal departments, agencies, and Crown corporations:

• An oversight role that includes setting policy and standards and reporting on the government's overall management and budgetary performance;
• An enabling role to help departments improve management performance; and
• A leadership role in driving and modelling public sector management.

Secretariat functions have a direct impact on the quality of federal public service management and on how efficiently and effectively government programs and services are delivered.

Strategic outcome and program activity architecture

The diagram below illustrates the strategic outcome, program activities, and program subactivities that make up the Secretariat's program activity architecture (PAA). It represents the core programs and results that contribute to achieving the Secretariat's strategic outcome.

Performance summary

The following tables provide a summary of total Secretariat resources for 2008–09.

2008–09 Financial Resources ($ thousands)

Planned Spending	Total Authorities	Actual Spending
2,050,779	2,860,854	1,959,625

The Secretariat spent approximately $1.9 billion in 2008–09. Most of the variance between planned spending, total authorities, and actual spending can be attributed to the requirement to report unallocated, central government-wide funds under Total Authorities. (For more details, refer to the Expenditure profile section.)

2008–09 Human Resources (full-time equivalent)

Planned[4]	Actual	Difference
1,455	1,512	57

Actual full-time equivalents (FTE) exceeded planned FTEs mainly because the Secretariat took on additional responsibilities in the following areas: interdepartmental computer services, pay equity litigation, and labour relations.

2008–09 Performance Summary Table: Financial Data by Program Activity^[5] ($ thousands)

Program Activity	2007–08 Actual Spending	2008–09				Alignment to Government of Canada Outcomes
		Main Estimates	Planned Spending	Total Authorities	Actual Spending
1. Management Policy Development and Oversight	135,196	136,343	136,137	160,777	153,568	Government Affairs[6]
2. Expenditure Management and Financial Oversight	59,401	49,442	53,622	56,489	51,491
3. Government-wide Funds and Public Service Employer Payments	1,662,001	4,318,161	1,861,020	2,643,588	1,754,566
Total	1,856,598	4,503,946	2,050,779	2,860,854	1,959,625

The above table provides a performance summary of three of the four program activities (PA) for 2008–09. Human and financial resources for Internal Services (PA 4) are allocated across the Secretariat's other PAs in accordance with Treasury Board reporting guidelines.

An increase of 13 per cent in spending for PA 1 is mostly due to increased spending on previously approved initiatives, such as the reconstitution of the OCG, enhancement of the Chief Information Officer Branch, and oversight of government services. Actual spending was less than total authorities because of the reduction in requirements for litigation support and delays in project funding. Although some work was delayed, the Secretariat met most of the commitments outlined in its 2008–09 Report on Plans and Priorities^[7](RPP), and made significant strides in improving government effectiveness.

Actual spending for PA 2 decreased from 2007–08, largely due to the end of dedicated spending for the Budget Office Systems Renewal Project.

As the government's budget office, the Secretariat is allocated resources for government-wide funds and public service employer payments. These activities, described under PA 3, account for most of the variance in the Secretariat's spending. Increases can be mostly attributed to the increased cost of the employee benefit program. (For more details, refer to the Expenditure profile section.)

Progress on departmental priorities

The Secretariat's long-term objective is to achieve its strategic outcome. The importance of this outcome was specifically recognized in the November 19, 2008, Speech from the Throne,^[8] when the Government identified "making government more effective" as one of its key priorities.

To make progress in achieving this strategic outcome, the Secretariat established three departmental priorities in its 2008–09 RPP.^[9] The major accomplishments supporting these priorities are highlighted below. The Secretariat also played a significant role in expediting the implementation of Budget 2009.

Departmental priority 1: Strengthening governance, accountability, and management practices

• The Secretariat's Web of Rules Action Plan, launched in May 2008, made significant progress in reducing unnecessary and ineffective rules and reporting requirements.
• Responsibilities and accountabilities for departmental management practices were further clarified through continued implementation of the Federal Accountability Act (FedAA) and the Secretariat's Policy Suite Renewal Initiative.
• Use of the Management Accountability Framework (MAF) and continued reform in the administration of grants and contributions strengthened management performance across the federal government.
• The coming into force of the Expenditure Restraint Act, part of the Budget Implementation Act, 2009, resulted in significant progress in the negotiation and signing of collective agreements.

Departmental priority 2: Strengthening results-based expenditure management and financial oversight

• The Secretariat responded to the extraordinary economic circumstances experienced in 2008–09 by creating a new, time-limited, central vote in the amount of $3 billion and an accelerated process to review and approve funding for new programs. This was aimed at expediting the implementation of Budget 2009 initiatives in 2009–10.
• Strategic reviews of the programs and spending of 21 departments supported a more rigorous approach to managing resources based on results. The renewal of the Policy on Evaluation will result in a stronger base of evidence to inform program and budget decisions.

Departmental priority 3: Strengthening the internal management of the Secretariat

• The Secretariat advanced oranizational change through its Change Agenda to strengthen strategic leadership, collaboration, and risk management.
• Internal management practices were improved, particularly in priority areas such as evaluation, information technology, and information management.

Contribution of priorities to strategic outcome

In its 2008–09 RPP, the Secretariat identified specific operational priorities to support its three departmental priorities. The following are the key initiatives and results that illustrate progress toward achieving the Secretariat's strategic outcome.

1. Strengthening governance, accountability, and management practices

• Aligned with PA 1: Management Policy Development and Oversight

Operational Priority	Type	Status
1a) Responsibilities and accountabilities are clarified in relation to departmental management practices and expectations.	Ongoing	Mostly met

Continued implementation of the Federal Accountability Act

The FedAA received Royal Assent in December 2006. Since then, the Secretariat has been responsible for implementing certain portions of the FedAA and its accompanying Action Plan. It has also played a coordinating role in overall implementation of the Act, providing departmental briefings to increase understanding of the Act and its implications and updating the FedAA website^[10] for parliamentarians and members of the public to access news and information. As of July 2, 2008, all portions of the Act are in force.

The adoption of amendments to the Lobbying Act and its supporting regulations and the publication of guidance for public office holders were the main achievements in 2008–09. The Office of the Commissioner of Lobbying of Canada was subsequently created to administer the new legislation.

What is the impact? The FedAA has strengthened the Government of Canada's accountability and increased its transparency to Canadians and parliamentarians. Continued implementation of the FedAA supports the government's Management Agenda, which includes streamlining rules and reporting, improving administrative processes, and encouraging innovation and risk-based management.

Untangling the Web of Rules

Unburdening public service employees from complex rules, reporting requirements, and administrative process—the so-called "web of rules"—is critical to delivering better services to Canadians (Speech from the Throne, November 2008). The Web of Rules Action Plan includes over 60 coordinated measures undertaken by different departments to improve how business is done in order to make government more efficient and effective. The Prime Minister's Advisory Committee on the Public Service endorsed the Action Plan in its third report, Achieving Results: Accountability and Action^[11] (February 2009). Achievements include reducing the reporting requirements associated with Treasury Board policies by 25 per cent.

What is the impact? The Secretariat has established clear goals and expectations to ensure that rules are in proportion to the associated risk, to streamline reporting, and to improve administrative processes.Ongoing implementation will further improve management performance and deliver value, while minimizing inefficiency, protecting against major risks, and preserving accountability.

Operational Priority	Type	Status
1b) Management performance is strengthened across government.	Ongoing	Mostly met

Management Accountability Framework^[12]

The Secretariat's integrated instrument for assessing management performance continues to evolve in response to the varying contexts of the 52 departments and agencies assessed. The
2008–09 MAF process introduced a risk-based approach in the area of human resources management. Additional outreach activities were carried out to engage departments: an extended launch was held to clarify the MAF methodology and a conference on leading practices provided an opportunity for departments to share best practices and discuss lessons learned. Improved guidance from the Secretariat contributed to a 50-per-cent reduction in the reporting burden experienced by departments.

What is the impact? Streamlining and improving the MAF process reduced the reporting burden. MAF continues to support departments in their pursuit of management excellence.

Reform of the administration of grant and contribution programs

In May 2008, the President of the Treasury Board introduced the Government of Canada Action Plan to Reform the Administration of Grant and Contribution Programs^[13] in response to the recommendations of an Independent Blue Ribbon Panel. As part of the Plan, a new Policy on Transfer Payments came into effect on October 1, 2008. A Centre of Expertise on Grant and Contribution Programs was established to guide the reform of management practices and provide leadership and support to departments. The Centre has focussed on working with six departments responsible for over 50 per cent of government grant and contribution funding. Efforts by the Centre include helping these departments implement their individual grant and contribution action plans, hosting 26 information workshops across Canada, and creating a tool for sharing best practices.

What is the impact? Leadership and support was provided for the development and implementation of departmental action plans, resulting in a 10-per-cent reduction in the administrative burden of selected programs. This fulfilled the Government of Canada's commitment to simplify administration, while strengthening accountability in the management of grants and contributions.

2. Strengthening results-based expenditure management and financial oversight

• Aligned with PA 2: Expenditure Management and Financial Oversight

Operational Priority	Type	Status
2a) Results-based management is strengthened, and information on programs and spending is improved to support decision making on resource allocation.	Ongoing	Met all

Strategic review

Strategic reviews are assessments of all direct program spending to ensure management excellence and value-for-money. The four-year review cycle helps departments identify opportunities to redirect funding to higher priorities and better performing programs—those that best meet the needs of Canadians, align with federal responsibilities, and are sustainable over the long-term.

The lessons learned from the 2007 round of reviews, outlined in the 2007–08 Departmental Performance Report (DPR), were incorporated into the planning and execution of the second round. In 2008, 21 departments and agencies successfully completed strategic reviews of their programs and spending and reported the results to Cabinet. Reallocations identified in the 2008 round were $349 million in 2009–10, $449 million in 2010–11, and $586 million in 2011–12, as announced in Budget 2009. This brings the total amount of direct program spending reviewed in the first two years of strategic reviews to 42 per cent.

What is the impact? Savings identified through the strategic review process were reallocated to higher priorities and more effective programs, supporting a more rigorous results-based approach to managing funds.

Renewal of the Policy on Evaluation

The renewed Policy on Evaluation came into effect on April 1, 2009. Its implementation will improve the quality of evaluation results by establishing a standard for evaluations. This includes, for example, providing direction on how to assess value-for-money.A supporting directive and standard were also created. Tools to improve evaluation competencies and capacity across government are under development and will be distributed throughout 2009–10.

What is the impact? The policy will create a comprehensive and reliable evidence base to inform policy and program improvements, expenditure management, Cabinet decision making, and public reporting.

Operational Priority	Type	Status
2b) The government's Expenditure Management System and reporting on financial performance are improved.	Ongoing	Met all

Enhanced Expenditure Management System and improvements to the Estimates process

The Expenditure Management System (EMS) is the framework for developing and implementing the government spending plans that support its priorities. The government receives parliamentary authority to spend public funds through the Estimates and supply process. The Secretariat manages this process by preparing the Main and Supplementary Estimates for tabling in the House of Commons.

The Secretariat continued to enhance the EMS through several initiatives described in this report including strategic reviews, the Policy on Management, Resources and Results Structures, the Policy on Evaluation, and parliamentary reporting.

For the first time in a decade, the initial Supplementary Estimates were approved by parliamentarians in June rather than in December. Additionally, in response to the economic downturn, a new, time-limited central vote (Treasury Board Vote 35^[14]) in the amount of $3 billion was created to facilitate timely implementation of Budget 2009 initiatives in 2009–10.

The Main Estimates and three Supplementary Estimates were presented to Parliament in support of four appropriation acts totalling $83 billion in voted, budgetary requirements.

Improvements in the functionality and usability of the Expenditure Management Information System (EMIS) continued to be made. These included the first execution of the Annual Reference Level Update system, approvals of major changes to departmental PAAs, and implementation of data-gathering features to support strategic reviews.

What is the impact? Presenting Supplementary Estimates to the House of Commons earlier in the year resulted in a better alignment of the Estimates to Budget 2008 and gave departments the opportunity to begin providing programs and services as early as possible in the fiscal year. The creation of Vote 35 allowed departments to begin implementing approved Budget 2009 items as of April 1, 2009, rather than waiting for approval of full supply in June. Improvements to the EMS strengthened results-based management and financial oversight.

3. Strengthening the internal management of the Secretariat

• Aligned with PA 4: Internal Services

Operational Priorities	Type	Status
3a) Corporate-enabling strategies are developed and implemented consistent with a more strategic and focussed Secretariat role.	Ongoing	Mostly met
3b) Internal management practices continue to be improved in response to the Secretariat's MAF assessment.	Ongoing	Mostly met

The Secretariat's internal management priorities for 2008–09 and performance on those priorities are discussed in Section II.

Operating environment and risk analysis

The global operating environment is becoming increasingly complex, and the Secretariat must demonstrate flexibility and adaptability.

In 2008–09, the Secretariat played a key role in supporting the implementation of the stimulus initiatives announced in Budget 2009 to respond to the economic downturn.^[15] These initiatives are timely, targeted, and temporary and require accelerated review and approval of billions of dollars over the next two years. The Secretariat applied new procedures to expedite approvals while maintaining due diligence. These include the creation of a fixed-term central vote (Treasury Board Vote 35) and a more flexible approach for Treasury Board submissions. The Secretariat also introduced a robust monitoring and reporting framework to ensure that parliamentarians and Canadians are kept informed about the implementation of Canada's Economic Action Plan.

As well as urgent needs, the Secretariat faces ongoing challenges and is working hard to address them in line with the Clerk of the Privy Council's Public Service Renewal priorities.^[16] Significant progress has been made on the planned mitigation strategies to alleviate skills shortages and high employee turnover and adjust to changing demographics.

The changes to the Secretariat's corporate structure and employee base required attention to ensure a smooth transition. Any organizational change poses short-term challenges. However, these adjustments in human resources and corporate services are expected to result in long-term enhancements for the central HR function and internal services delivery.

The following table presents the key risks and challenges identified in the Secretariat's 2008–09 RPP and the respective mitigation measures that were implemented.

Key risks and challenges	Mitigation measures	Link to program activity
Stakeholder acceptance: The Secretariat is concerned that, in the context of increased parliamentary expectations and decreased public risk tolerance, the ability of departments and agencies to meet management expectations may be compromised, particularly in light of government-wide skill shortages in key functional communities.	Ongoing implementation of the FedAA and clarification of deputy head accountabilities. Reduction by 10 per cent of the administrative burden in select grant and contribution programs in six departments. Centre of Expertise on Grant and Contribution Programs established; new Policy on Transfer Payments came into effect.	Management Policy Development and Oversight
Compliance: The Secretariat is concerned that consequences for policy non-compliance may not be proportional to the public policy implications and, further, that innovation and risk taking within the public service may consequently be undermined.	Development of a framework for managing risk that fosters a culture of smart risk taking to achieve objectives; approval and implementation of the framework are expected in 2009–10. Development and approval of the Framework for the Management of Compliance; roll-out anticipated for 2009–10.	Management Policy Development and Oversight Expenditure Management and Financial Oversight
Human resources: The Secretariat is concerned that, given recent demographic changes, competition for talent, and skill shortages in key areas, it is increasingly difficult to maintain sufficient HR capacity to meet operational requirements and achieve the Secretariat's strategic outcome. This risk is compounded by public service branding issues, rapid employee turnover at the Secretariat, new HR expectations under the Public Service Modernization Act, and the high cost of training and retraining employees.	Implementation of the HR Strategy 2008–11. Senior management committees reviewed study results on employee turnover, which will lead to development of an action plan for 2009–10. Improved integrated business and HR planning is underway, including the development of risk-based HR policies. Ongoing enhancement of post-secondary recruitment and development programs.	Internal Services

In 2008–09, the Secretariat completed a Corporate Risk Profile (CRP) for 2009–10. The process, adapted and improved from lessons learned the previous year, included among other things a robust consultation and communications strategy. The MAF assessment commended the Secretariat on its effort to improve the integration of risk management into its day-to-day business.

Expenditure profile

The Secretariat spent a total of $1.96 billion toward achieving its strategic outcome, an increase in actual spending of $103 million from 2007–08.

Of the total, 11 per cent represents expenditures for the Secretariat's operations. The remainder relates to funds for public service employer payments that the Secretariat manages centrally on the government's behalf.

Most of the increase in spending over the last year is for public service insurance ($93 million), which falls under PA 3. The increase can largely be attributed to a growth in the number of employees in the public service and the increased costs of health care insurance plans.

The following table identifies the parliamentary appropriations by vote that constitute the Secretariat's funding.

Voted and Statutory Items ($ thousands)

Vote # or Statutory Item (S)	Truncated Vote or Statutory Wording	2006–07 Actual Spending	2007–08 Actual Spending	2008–09 Main Estimates	2008–09 Total Authorities	2008–09 Actual Spending
1	Program expenditures 1	156,963	176,482	165,237	196,338	184,209
2	Grants and contributions 2	34,700	322	0	0	0
5	Government contingencies 3	0	0	750,000	651,565	0
10	Government-wide initiatives 3	0	0	7,141	7,141	0
15	Compensation adjustments 3	0	0	0	0	0
20	Public service insurance 4	1,525,831	1,652,784	1,861,000	1,862,944	1,745,993
25	Operating budget carry forward 3		0	1,200,000	113,426	0
30	Paylist requirements 3		0	500,000	0	0
(S)	Contributions to employee benefit plans	14,689	17,632	20,472	20,835	20,835
(S)	President of the Treasury Board—Salary and motor car allowance	73	74	76	76	76
(S)	Payments under the Public Service Pension Adjustment Act	15	4	20	3	3
(S)	Payments for the pay equity settlement pursuant to section 30 of the Crown Liability and Proceedings Act5	1,584	197	0	-972	-972
(S)	Unallocated employer contributions made under the Public Service Superannuation Act and other retirement acts and the Employment Insurance Act	10,557	9,098	0	9,481	9,481
(S)	Spending of proceeds from the disposal of surplus Crown assets	0	0	0	16	0
(S)	Court awards	0	5	0	0	0
Total		1,744,412	1,856,598	4,503,946	2,860,853	1,959,625
1. The Secretariat's program expenditures, including employee benefits programs, are rising by 5.6 per cent due to increased personnel costs that result from collective agreement increases, new program funding, and increased staffing of vacant positions for previously approved initiatives. The $12 million lapse in Vote 1 is attributable to funding that was required to lapse regarding an internal audit project that was not implemented and a reduction in public opinion research expenditures; litigation funding that was not required; delays in the ramping up of new projects, and slippage in anticipated contract activity. 2. Elimination in 2008–09 of Vote 2, Grants and contributions. The Toronto Waterfront Revitalization Initiative has been transferred to Environment Canada in accordance with changes in the machinery of government announced on January 4, 2007. Consequently, Vote 2 has been eliminated. There is no longer a requirement for the Secretariat to hold a distinct vote for grants and contributions, given that its planned contributions are less than $5 million (i.e., planned contributions are $200,000). 3. Central votes are transferred to departments and agencies to provide for miscellaneous, urgent, or unforeseen expenditures, implementation of government-wide initiatives, operating budget carry forward, and coverage of paylist shortfalls. These funds have been approved in the Main Estimates. They are not spent within the Secretariat but are transferred to other government departments, if required; if there is no requirement, these funds lapse. 4. The largest part of actual expenditures (about 90 per cent) is in Vote 20, Public service insurance. The increases are related to government-wide growth in the wage envelope as well as to increases in medical costs. This vote covers payment of the employer's contribution to pension and insurance plans, unemployment insurance, and other related expenses. 5. Miscellaneous special payments to facilitate retroactive pay equity settlements. The negative amount represents the refund of a payment from the previous year that was not required.

The Secretariat's spending has increased from the 2007–08 fiscal year mainly because of the following: the increased cost of government-wide public service insurance programs; increased costs at the Secretariat due to collective agreements; and a growth in human resources to support new and existing programs within the Secretariat.

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