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Section III: Supplementary Information

Organization Chart and Program Activity Architecture

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Table 1: Departmental Planned Spending and Full-time Equivalents

	Forecast Spending 2005–06	Planned Spending 2006–07	Planned Spending 2007–08	Planned Spending 2008–09
	($ thousands)
Tax Policy	30,330	30,865	31,653	31,903
Economic and Fiscal Policy	14,674	14,559	14,933	15,052
Financial Sector Policy1	16,270	20,521	19,332	17,362
Economic Development and Corporate Finance	7,613	7,784	7,982	8,046
Federal-Provincial Relations and Social Policy2	12,452	16,753	12,267	12,365
International Trade and Finance	15,567	15,555	15,959	16,085
Public Debt	35,887,000	34,395,000	34,760,000	34,585,000
Domestic Coinage3	82,200	83,100	80,700	49,000
International Financial Organizations4	1,188,540	725,869	411,469	508,469
Transfer Payments to Provinces and Territories	32,690,873	38,330,000	40,095,000	41,940,000
Budgetary Main Estimates (gross)	69,945,519	73,640,006	75,449,295	77,183,282
International Financial Organizations	108,923	7,471	5,536	3,498
Non-budgetary Main Estimates (gross)	108,923	7,471	5,536	3,498
Less: Respendable revenue	620	400	400	400
Total Main Estimates	70,053,822	73,647,077	75,454,431	77,186,380
Adjustments:
Governor General Special Warrants:
Expert Panel on Equalization and TFF	1,383
Collective Bargaining	4,173
Paylist Shortfalls	3,000
Procurement Savings	(120)
Department of Justice Canada Recovery	(504)
Procurement Savings by Program Activity:
Tax Policy		(207)
Economic and Fiscal Policy		(97)
Financial Sector Policy		(137)
Economic Development and Corporate Finance		(52)
Federal-Provincial Relations and Social Policy		(112)
International Trade and Finance		(104)
Expenditure Review Committee (ERC)	(1,400)
Other Adjustments: Employee Benefits Plan	33
Transfer Payments to Provinces and Territories5	3,993,627
International Financial Organizations6	41,500
Cost of the new Ministry— Regional responsibilities		25	25	25
Advertising campaigns		4,100
Equalization payments		255,428
Territorial formula financing (Data revision)		46,400
Total Adjustments	4,041,691	305,243	25	25
Total Planned Spending	74,095,514	73,952,320	75,454,456	77,186,405
Total Planned Spending	74,095,514	73,952,320	75,454,456	77,186,405
Less: Non-respendable revenue	221,543	185,148	152,679	169,409
Plus: Cost of services received without charge	11,693	13,205	13,339	13,415
Total Departmental Spending	73,885,665	73,780,377	75,315,115	77,030,411
Full-time Equivalents	813	901	901	894

Notes:

1) The increase of $4.3 million in 2006–07 is due to $1.7 million in funding for the Financial Action Task Force Presidency, $1.2 million in redistribution of corporate administration costs, $800 thousand in non-discretionary workload pressure funding, $370 thousand for salary increases related to collective bargaining, and $244 thousand for money laundering policy work.

2) The increase of $4.3 million in 2006–07 is due to $3 million transferred from 2005–06 to 2006–07 for the Expert Panel on Equalization and Territorial Formula Financing. The subsequent decrease of $4.5 million in 2007–08 is due to the sunsetting of the Expert Panel funding and a decrease of $1.5 million in the redistribution of corporate administration costs.

3) The $49 million for Domestic Coinage in fiscal year 2008–09 is based on the 2005–06 forecast and is subject to change.

4) The decrease in 2007–08 is due to a change in timing of debt relief. It is the result of an increase in uncertainty around Ivory Coast's ability to progress through the Heavily Indebted Poor Countries (HIPC) process on a timely basis and thereby receive the associated debt forgiveness.

5) The nearly $4 billion in adjustments in fiscal year 2005–06 to the Federal-Provincial Relations and Social Policy program activity is the result of increased transfer payments to provinces and territories, including Fiscal Equalization, Territorial Formula Financing, and the Canada Health Transfer. These increased financial commitments were made following First Ministers' Meetings in September and October 2004.

6) The $41.5 million adjustment fiscal year 2005–06 to the International Financial Organizations program activity includes the following:

• $17 million in grants for debt payments on behalf of poor countries to International Organizations, consistent with Canada's commitment to the G8-led Multilateral Debt Relief initiative;
• $25 million in a statutory payment to the Exogenous Shocks Facility of the International Monetary Fund (IMF). This item is pending confirmation of an annual surplus for 2005–06 of at least C$2 billion after all initiatives funded pursuant to Bill C-48 are taken into account; and
• $0.5 million reduction to payments to IMF's Poverty Reduction and Growth Facility due to a change in the exchange rate.

Table 2: Resources by Program Activity

2006–07
	Budgetary					Non-budgetary	Totals
Program Activity	Operating	Grants and Contributions	Gross	Revenue	Net	Loans, Investments, and Advances	Total Main Estimates	Adjustments (planned spending not in Main Estimates)	Total Planned Spending
	($ thousands)
Tax Policy	30,865		30,865	(117)	30,748		30,748	994	31,742
Economic and Fiscal Policy	14,559		14,559	(55)	14,504		14,504	469	14,973
Financial Sector Policy	20,521		20,521	(77)	20,444		20,444	661	21,105
Economic Development and Corporate Finance	7,784		7,784	(29)	7,755		7,755	251	8,006
Federal-Provincial Relations and Social Policy	16,753		16,753	(63)	16,690		16,690	539	17,229
International Trade and Finance	15,555		15,555	(59)	15,496		15,496	501	15,997
Public Debt	34,395,000		34,395,000		34,395,000		34,395,000		34,395,000
Domestic Coinage	83,100		83,100		83,100		83,100		83,100
International Financial Organizations		725,869	725,869		725,869	7,471	733,340		733,340
Transfer Payments to Provinces and Territories		38,330,000	38,330,000		38,330,000		38,330,000	301,828	38,631,828
Total	34,584,137	39,055,869	73,640,006	(400)	73,639,606	7,471	73,647,077	305,243	73,952,320

Table 3: Voted and Statutory Items Listed in the Main Estimates

2006–07
Vote or Statutory Item	Truncated Vote or Statutory Wording	Current Main Estimates	Previous Main Estimates
		($ thousands)
1	Operating expenditures1	93,135	84,048
5	Grants and Contributions2	404,200	944,000
10	Pursuant to section 29 of the Financial Administration Act, to authorize the Minister of Finance on behalf of her Majesty in Right of Canada to guarantee payment to the holders of mortgages insured by private insurers approved by the Superintendent of Financial Institutions to sell mortgage insurance in Canada of not more than 90% of the net claims of the holders of the insured mortgages in the event of insolvency or liquidation of the private insurer, subject to the limitation that the aggregate outstanding principal amount of all mortgages covered by the guarantee shall not exceed $200,000,000,000 at any time; and to repeal Vote 16b, Appropriation Act  No. 4, 2003-2004	0	0
(S)	Minister of Finance—salary and motor car allowance	73	70
(S)	Territorial Formula Financing (Part I.1 – Federal-Provincial Fiscal Arrangements Act)3	2,070,000	0
(S)	Payments to the International Development Association4	318,269	239,740
(S)	Payments to the International Monetary Fund's Poverty Reduction and Growth Facility5	3,400	4,800
(S)	Contributions to employee benefit plans	12,429	12,168
(S)	Purchase of Domestic Coinage6	83,100	82,200
(S)	Public Debt—Interest and Other Costs7	34,395,000	35,887,000
(S)	Statutory Subsidies (Constitution Acts, 1867–1982 and other Statutory Authorities)	32,000	32,000
(S)	Fiscal Equalization (Part I, Federal-Provincial Fiscal Arrangements Act)8	11,282,000	9,510,000
(S)	Canada Health Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)9	20,140,000	13,000,000
(S)	Canada Social Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)10	8,500,000	8,225,000
(S)	Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964)11	(699,000)	(611,000)
(S)	Alternative Payments for Standing Programs (Part VI, Federal-Provincial Fiscal Arrangements Act)12	(2,995,000)	(2,765,127)
(L15)	Issuance and Payment of demand notes to the International Development Association	0	0
(S)	Issuance of demand notes to the European Bank for Reconstruction and Development—Capital Subscriptions13	0	9,346
(S)	Payments and encashment of notes issued to the European Bank for Reconstruction and Development—Capital Subscriptions13	7,471	15,577
(S)	Issuance of loans to the International Monetary Fund's Poverty Reduction and Growth Facility13	0	84,000
	Items not required:
-	Transfer Payments to Territorial Governments	0	1,800,000
-	Health Reform Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)	0	3,500,000
	Total Department of Finance Canada	73,647,077	70,053,822

Notes:

1) The increase of $9.1 million or 10.8% in the operating expenditures vote is due to $3 million transferred from 2005–06 to 2006–07 for the Expert Panel on Equalization and Territorial Formula Financing, $1.7 million funding for the presidency of the Financial Action Task Force on money laundering, and $4.3 million for salary increases related to collective bargaining.

2) The decrease of almost $540 million in grants is due to the debt forgiveness for Iraq, Serbia, and Montenegro delivered in fiscal year 2005–06.

3) The Transfer Payments to the Territorial Governments (Vote 10) in Main Estimates 2005–06 became Territorial Formula Financing, a statutory item, in Main Estimates 2006–07. The increase of $270 million or 15% is a result of the October 26, 2004, New Framework for Equalization and the Territorial Formula Financing program.

4) The increase of $78.5 million or 32.8% in statutory payment to the International Development Association (IDA) is due to higher levels of note encashments as per Canada's obligations under the new IDA agreement.

5) A decrease of $1.4 million or 29.2% in payments to IMF's Poverty Reduction and Growth Facility (PRGF) is due to lower obligations to fund IMF's PRGF.

6) The increase of $900,000 or 2.1% in Domestic Coinage reflects the increased funding required to cover the cost to produce and distribute domestic coinage.

7) Public debt charges decreased by $1.49 billion or 4.2% due to a reduction in the stock of interest-bearing debt and a decrease in forecasted interest rates.

8) The increase of $1.77 billion or 18.6% in transfer payments for Fiscal Equalization is a result of the October 26, 2004, New Framework for Equalization and the Territorial Formula Financing program.

9) The increase of $3.6 billion or 22.1% in the Canada Health Transfer represents the legislated amount for Health Transfers as per Budget 2003 and the additional funding announced in the September 2004 10-Year Plan to Strengthen Health Care. It should be noted that the Health Reform Transfer of $3.5 billion in 2005–06 was transferred to the Canada Health Transfer in 2005–06.

10) The increase of $275 million or 3.3% in the Canada Social Transfer represents legislated amount for this transfer.

11) The additional recovery of $88 million or 14.4% in the Youth Allowances Recovery is due to an increase in the amount to be recovered from Quebec. This increase is related to an increase in the value of personal income tax compared with the data used in the 2005–06 Main Estimates.

12) The additional recovery of nearly $230 million or 8.3% is attributable to an increase in the amount recovered from the Quebec. This increase is related to an increase in the value of personal income tax compared with the data used in the
2005–06 Main Estimates.

13) The decrease in the statutory non-budgetary items is consistent with the agreed upon schedule of Canada's payments, encashments, and obligations.

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Table 4: Services Received Without Charge

($ thousands)	2006–07
Accommodation provided by Public Works and Government Services Canada		5,480
Contributions covering employer's share of employees' insurance premiums and expenditures paid by the Treasury Board of Canada Secretariat (excluding revolving funds)		4,906
Workers' compensation coverage provided by Social Development Canada		1
Salary and associated expenditures of legal services provided by the Department of Justice Canada		2,818
Total 2006–07 services received without charge		13,205

Table 5: Loans, Investments, and Advances (Non-budgetary)

	Forecast Spending 2005–06	Planned Spending 2006–07	Planned Spending 2007–08	Planned Spending 2008–09
	($ thousands)
International Financial Organizations
Issuance and Payment of demand notes to the International Development Association	0	0	0	0
Issuance of demand notes to the European Bank for Reconstruction and Development—Capital Subscriptions	9,346	0	0	0
Payments and encashment of notes issued to the European Bank for Reconstruction and Development—Capital Subscriptions	15,577	7,471	5,536	3,498
Issuance of loans to the International Monetary Fund's Poverty Reduction and Growth Facility	84,000	0	0	0
Total	108,923	7,471	5,536	3,498

Table 6: Sources of Respendable and Non-respendable Revenue

Respendable Revenue

	Forecast Revenue 2005–06	Planned Revenue 2006–07	Planned Revenue 2007–08	Planned Revenue 2008–09
	($ thousands)
Tax Policy
Sale of departmental documents	194	117	124	127
Economic and Fiscal Policy
Sale of departmental documents	94	55	58	60
Financial Sector Policy
Sale of departmental documents	104	77	76	69
Economic Development and Corporate Finance
Sale of departmental documents	49	29	31	32
Federal-Provincial Relations and Social Policy
Sale of departmental documents	80	63	48	49
International Trade and Finance
Sale of departmental documents	100	59	63	64
Total Respendable Revenue	620	400	400	400

Non-respendable Revenue

	Forecast Revenue 2005–06	Planned Revenue 2006–07	Planned Revenue 2007–08	Planned Revenue 2008–09
	($ thousands)
Domestic Coinage
Domestic Coinage	221,543	185,148	152,679	169,409
Total Non-respendable Revenue	221,543	185,148	152,679	169,409
Total Respendable and Non-respendable Revenue	222,163	185,548	153,079	169,809

Table 7: Resource Requirement by Branch

	2006-07

	Tax Policy	Economic and Fiscal Policy	Financial Sector Policy	Economic Development and Corporate Finance	Federal-Provincial Relations and Social Policy	International Trade and Finance
	($ thousands)
Tax Policy	31,742
Economic and Fiscal Policy		14,973
Financial Sector Policy			21,105
Economic Development and Corporate Finance				8,006
Federal-Provincial Relations and Social Policy					17,229
International Trade and Finance						15,997
Total	31,742	14,973	21,105	8,006	17,229	15,997

Table 7: Resource Requirement by Branch (cont'd)

	2006-07

	Public Debt	Domestic Coinage	International Financial Organizations	Transfer Payment to Provinces/ Territories	Total Planned Spending
	($ thousands)
Tax Policy					31,742
Economic and Fiscal Policy					14,973
Financial Sector Policy	34,395,000	83,100			34,499,205
Economic Development and Corporate Finance					8,006
Federal-Provincial Relations and Social Policy				38,631,828	38,649,057
International Trade and Finance			733,340		749,337
Total	34,395,000	83,100	733,340	38,631,828	73,952,320

Table 8: Major Regulatory Initiatives

Regulations	Expected Results
Legislation will be introduced to update the financial institutions statutes that sunset in April 2007, and associated regulations will be brought forward to bring the legislation into force.	Legislation/regulations will be developed.
Regulations will be introduced pursuant to the passage of Bill C-57, which updated the corporate governance provisions in the financial institutions statutes.	Regulations will be developed.
Amendments may be made to regulations under the Excise Tax Act (GST/HST and excise taxes), the Air Travellers Security Charge Act, the Excise Act, and the Excise Act, 2001—These acts contain a number of provisions that give regulatory powers to deal with GST/HST, excise tax, and excise duty issues.	Through the use of regulations, the government may propose changes to address some issues in the GST/HST, excise tax, and excise duty systems. Amendments to the regulations are required from time to time to respond to emerging policy and technical issues, including budget-related measures.
The Customs Tariff—The Tariff contains a number of provisions that allow the government to reduce import tariffs and implement Canada's rights and obligations under international agreements and arrangements.	Through the use of orders and regulations, the government may lower tariff rates to improve the competitiveness of Canadian industry and implement international trade agreements and arrangements.
The Income Tax Act and related regulations—The Income Tax Act contains a number of provisions that give regulatory powers to deal with income tax issues.	Through the use of regulations, the government may propose changes to address some issues in the income tax system. Amendments to the regulations are required from time to time to address emerging policy or technical issues, including budget-related measures.
Amendments to the Pension Benefits Standards Act, 1985 and related regulations.	Legislative and regulatory amendments will be brought forward to improve the security of pension plan benefits and ensure the viability of defined benefit pension plans.
Introduction of securities transfer legislation.	Legislation will be brought forward to modernize the securities transfer provisions currently contained in various federal statutes.
Other amendments to the Canada Pension Plan (CPP) and the Canada Pension Plan Investment Board Regulations may be identified during the federal-provincial triennial review of the CPP, which should be completed in 2006.	If changes are agreed to by the federal and provincial governments, regulations will be developed after the completion of the federal-provincial triennial review of the CPP in 2006.
Amendment to the Federal-Provincial Fiscal Arrangements Act.	An enactment to amend the Federal-Provincial Fiscal Arrangements Act to determine the amount of the fiscal equalization payments to eligible provinces and the formula financing payments to each of the territories for the fiscal year beginning on April 1, 2006.
Amendment to the Federal-Provincial Fiscal Arrangements Act.	An enactment to amend the Federal-Provincial Fiscal Arrangements Act to introduce formulas for fiscal equalization payments to eligible provinces and formula financing payments to each of the territories for the fiscal year beginning on April 1, 2007, and beyond.
Budget 2005 proposed to amend regulations made under the Pension Benefits Standards Act, 1985 to remove the requirement that life income funds be used to purchase an annuity when the beneficiary reaches age 80.	Legislation or regulations will be introduced to repeal the requirement to purchase an annuity at age 80.
Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and related regulations.	Legislation or regulations will be introduced to respond to revisions of the recommendations of the Financial Action Task Force on Money Laundering following public consultation and to respond to the recommendations of the Office of the Auditor General of Canada and the evaluation mandated by the Treasury Board.

Table 9: Details of Transfer Payments Programs

Over the next three years, the Department of Finance Canada will manage the following transfer payment programs in excess of $5 million:

2006–07 to 2008–09

1. Compensation to Canadian agencies or entities established by an Act of Parliament for reduction of debts of debtor countries.

2. Payments to the International Development Association

3. Debt payments on behalf of poor countries to international organizations

4. Fiscal Equalization (Part I, Federal-Provincial Fiscal Arrangements Act)

5. Territorial Financing (Part I.1, Federal-Provincial Fiscal Arrangements Act)

6. Canada Health Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)

7. Canada Social Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)

8. Statutory Subsidies (Constitution Acts, 1867–1982 and other statutory authorities)

9. Youth Allowances Recovery (Federal-Provincial Revision Act, 1964)

10. Alternative Payments for Standing Programs (Part VI, Federal-Provincial Arrangements Act)

Further information on the above mentioned transfer payments could be found at http://www.tbs-sct.gc.ca/rpp/2006-2007/info/tpp-ppt-eng.asp.

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Table 10: Horizontal Initiatives

Over the next three years, the Department of Finance Canada will be involved in the following horizontal initiative as the lead department:

2006–07 to 2008–09

1. National Initiative to Combat Money Laundering

Supplementary information on horizontal initiatives can be found at http://www.tbs-sct.gc.ca/est-pre/20062007/p3a-eng.asp.

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Table 11: Sustainable Development Strategy

"Sustainable development" is defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs, and it is a key commitment of all federal departments. In 1995, the Auditor General Actwas amended to require each department to prepare and update a sustainable development strategy (SDS). These strategies are tabled in the House of Commons, and the Commissioner of the Environment and Sustainable Development monitors the progress toward their implementation.

An SDS is intended to outline a department's goals and action plans for integrating sustainable development into its policies, programs, and operations over three-year planning periods. The first Department of Finance Canada SDS, which was tabled in the House of Commons in 1997, helped to show how the federal government's fiscal and economic plans contributed to sustainable development in Canada, outlined the Department's approach and contribution to international sustainable development issues, and showed how the Department would improve environmental performance in its operations.

The Department's updated SDS for 2001–03 built on the 1997 strategy and the progress achieved by the Department and the government in promoting sustainable development. Like its first strategy, the Department's 2001–03 strategy focussed on those areas where the Department can make unique and important contributions to sustainable development in Canada and around the world. The Department's updated strategy for 2004–06 was completed in December 2003. It built upon the solid foundation provided by the previous two versions. The Department's 1998–2000, 2001–03, and 2004–06 strategies can be found at http://www.fin.gc.ca/purl/susdev-e.html.

The Department of Finance Canada confirmed two key goals in its 2004–06 SDS: to promote intergenerational equity through effective fiscal management and to continually strive to more fully integrate economic, social, and environmental considerations and objectives into policy making. To help focus on these goals, the 2004–06 SDS identifies four themes or key issues on which to base departmental actions over the next three years: Building the Future, Integrating the Economy and the Environment, Integrating Sustainable Development into the Global Economy, and Greening Operations. The Department's action plan for sustainable development sets out a number of objectives and targeted actions in each of these four areas over the planning period.

Over the coming year, the Department of Finance Canada will continue to improve its awareness-raising of the departmental process for fulfilling obligations under the Cabinet Directive on Strategic Environmental Assessment and will implement its other commitments as the 2004–06 SDS draws to a close.

A detailed outline of the Department's objectives, actions, and planned results in its sustainable development strategy in 2006–07 is available at http://www.fin.gc.ca/purl/susdev-e.html.

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Table 12: Internal Audits and Evaluations

The Internal Audit and Evaluation Committee of the Department of Finance of Canada approved the audits and projects mentioned below to be completed during the planning period.

Internal audits:

• Audit of Administrative Controls over International Obligations and Subscription Payments
• Audit of Administrative Controls over Financial Debt Instruments: Foreign Debt Portfolio and Foreign Currency Asset Reserves
• Audit of Accounts Payable
• Audit of Translation and Editing Services

Other Projects:

• Updating of the Internal Audit Risk Assessment and Three-year Audit Plan

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