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Section I - Departmental Overview

Message from the Minister

I am proud and honoured to present this report on the achievements of Agriculture and Agri-Food Canada over the past fiscal year 2006-2007.

While this review covers the important progress for the sector achieved under the watch of my predecessor Minister Strahl, I am committed to building on that strong foundation and helping producers capture new opportunities for profitability.

In my time as Minister,I have certainly been impressed by my portfolio team’s dedication to serving the agriculture and agri-food sector and indeed all Canadians.

Although they have different mandates, the six organizations within the Agriculture and Agri-Food Portfolio – Agriculture and Agri-Food Canada, the Canadian Dairy Commission, the Canadian Food Inspection Agency, the Canadian Grain Commission, Farm Credit Canada and the National Farm Products Council – are working together effectively to build a profitable future for Canadian producers and the other players in the agriculture and agri-food sector.

As Minister, I plan to pursue this course of collaboration with the portfolio, and with governments, industry and Canadians. This will be essential if we are to succeed in achieving long-term prosperity for Canada’s agriculture and agri-food sector.

Every step we take, whether it is developing a policy or a program, we must ask ourselves “How will this help move farmers and indeed the whole value chain forward?”

I will also make it a priority to accent the positives of our great industry, to focus on the exciting potential for production beyond food, including products such as biofuels, new pharmaceuticals and industrial materials.

The Canadian agriculture, agri-food and agri-products sector is a powerful driver of the Canadian and provincial economies. It provides one in eight of our jobs, more than $26 billion a year in exports and accounts for 8.1 per cent of our total gross domestic product.

Over the past year, the Government of Canada has been working hard, in collaboration with the provinces, territories and the agriculture industry, to take concrete action in key areas to support the sector.

Through budgets 2006 and 2007, a total of $4.5 billion in new federal funding was committed.

We invested in science as a key to competitiveness for the sector. More than $500 million was invested to help farmers and rural communities seize new market opportunities in the agricultural bioproducts sector, through biofuels and bioproducts.

Producers suffering from drought and flooding were assisted, as well as low-income farm families.

The Canadian Agricultural Income Stabilization program was replaced with a new suite of programs under development to provide more predictable, responsive and bankable business risk management tools for farmers.

The Government invested $600 million to kick-start producer savings accounts to help producers to address smaller income fluctuations; committed $400 million to help producers address rising costs of production; and doubled the amount of interest-free money available through cash-advance programming, which, as of March 31, 2007, advanced $988.4 million to agricultural producers.

Combined, these investments are helping to advance Canada's agriculture and agri-food sector as a whole in the areas of health, the environment and the bioeconomy. And they are ensuring that the Canadian agriculture and agri-food sector maintains its competitive edge in a rapidly changing world while protecting the health and well-being of Canadians and their environment.

Internationally, we continue to stand up for our producers and processors. We are working hard in the WTO negotiations to achieve the best possible outcome for all of Canadian agriculture, including both export-oriented and supply-managed industries.

Looking ahead, I believe we have a historic window of opportunity for the Canadian agriculture, agri-food and agri-products industry.

The Agricultural Policy Framework expires at the end of this fiscal year. At the same time, several major forces for change are converging on the sector, including expanded global competition and greater consumer awareness and demands.

I am currently working with my provincial and territorial colleagues and the sector to develop a new policy framework and programming for a profitable and innovative agriculture, agri-food and agri-products industry.

Federal, provincial and territorial governments have already agreed on a dynamic new plan for the sector – Growing Forward. Driven by industry, Growing Forward will form the basis for governments to work toward a new agriculture and agri-food policy framework. We will continue to work with the sector to refine our approach.

With new markets, better market access and scientific advances, I am optimistic that the sector can achieve a prosperous and profitable future.

I look forward to working with all stakeholders to make that future happen.

Hon. Gerry Ritz, PC, MP,
Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board

Management Representation Statement

I submit for tabling in Parliament, the 2006-2007 Departmental Performance Report for Agriculture and Agri-Food Canada.

This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2006-2007 Estimates: Reports on Plans and Priorities and Departmental Performance Reports:

• it adheres to the specific reporting requirements outlined in the Treasury Board Secretariat guidance;
• it is based on the department's approved Strategic Outcomes and Program Activity Architecture that were approved by the Treasury Board;
• it presents consistent, comprehensive, balanced, and reliable information;
• it provides a basis of accountability for the results achieved with the resources and authorities entrusted to it; and
• it reports finances based on approved numbers from the Estimates and the Public Accounts of Canada.

Yaprak Baltacioglu
Deputy Minister
Agriculture and Agri-Food Canada

Summary Information

Vision

Agriculture and Agri-Food Canada has a vision of a competitive and innovative agriculture and agri-food sector where partners work together to be the world leader in agriculture and agri-food, meeting domestic and global customer needs while respecting the environment.

Mandate

To this end, AAFC provides policies, programs, information, and technology to achieve its three strategic outcomes:

1. Security of the Food System;
2. Health of the Environment; and
3. Innovation for Growth.

The department's work toward achieving these outcomes is concentrated in the areas of core federal jurisdiction, including supporting agricultural and agri-food productivity and trade, stabilizing farm incomes, conducting research and development, and being responsible for the inspection and regulation of animals and plant-life forms. The department also co-ordinates federal efforts related to rural and co-operative development, and works to enhance the quality of rural life in Canada.

The Agriculture and Agri-Food Portfolio

The following organizations outside of AAFC's direct governance structure make up what is known as the agriculture and agri-food portfolio:

• the Canadian Dairy Commission (CDC) , which co-ordinates federal and provincial dairy policies and creates a control mechanism for milk production to help stabilize revenues and avoid costly surpluses;
• the Canadian Food Inspection Agency (CFIA) , which seeks to ensure the health of Canadians by safeguarding not just the food supply but also the plants and animals upon which safe and high-quality food depends;
• the Canadian Grain Commission (CGC) , which delivers excellence and innovation in grain quality and quantity assurance, research, and producer protection;
• Farm Credit Canada (FCC) , which enhances rural Canada by providing specialized and personalized business and financial services and products to farming operations, including family farms, and to those businesses in rural Canada, including small- and medium-sized businesses, that are businesses related to farming; and
• the National Farm Products Council (NFPC) , which promotes efficient, competitive Canadian agriculture and helps to improve farm-product marketing between Canadian provinces and territories and international markets.

Of these organizations, only the NFPC reports to Parliament through AAFC. Performance information for the CFIA and CGC is available at: http://www.tbs-sct.gc.ca/est-pre/estimE.asp. For performance information for the CDC and FCC, please contact those organizations directly. Contact information is available in Section IV of this document.

Benefits for Canadians

AAFC's program activities form a cohesive action plan that works for the benefit of all Canadians. Specific benefits include:

• a reliable supply of safe and high-quality agri-food products;
• economic, social and environmental contributions from a competitive and sustainable agriculture and agri-food system;
• enhanced compatibility between nature and agriculture;
• increased opportunities for growth in rural communities; and
• increased international recognition for quality Canadian products and expertise.

How We Report

Agriculture and Agri-Food Canada reports against the new Program Activity Architecture (PAA) in accordance with the Treasury Board Secretariat of Canada's Management of Resources and Results Structure (MRRS). The MRRS provides an inventory of departmental programs and activities and shows their relationship to the department's strategic outcomes.

Beginning with this DPR, the performance of the Rural and Co-operatives Secretariats, as well as the agencies reporting to Parliament through AAFC, will be reported under the appropriate strategic outcome, as per the Departmental Program Activities table on page 4 of the 2006-2007 Report on Plans and Priorities.

AAFC's Program Activity Architecture

Security of the Food System	Health of the Environment	Innovation for Growth
Business Risk Management (BRM)	Environment	Innovation & Renewal
BRM Policy & Strategy	Environment Policy & Strategy	Science Policy & Coordination
Policy Research & Analysis	Policy Planning & Integration	Policy Research & Analysis
Policy Planning & Integration	Environment G&C Programming	Policy Planning & Integration
Canadian Agricultural Income Stabilization	Minor Use Pesticides / Risk Reduction	Advancing Canadian Agriculture and Agri-Food program
Net Income Stabilization Account & Other BRM Program Wind Down	Agri-environmental Science	Renewal Programs
Disaster & Financial Guarantee Programs	National Land and Water Information Service (NLWIS)	Sustainable Production Systems
Production Insurance & Other Risk Management Programs	National Agri-Environmental Services	Bio-Products & Bio-Processes
Food Safety & Food Quality (FSQ)	Environment Programming (Services)	Office of Intellectual Property & Commercialization
Improving Food System Management	Community Pastures Program	Markets & International
Policy Research & Analysis		Policy Research & Analysis
Policy Planning & Integration		Policy Planning & Integration
FSQ Programs		Marketing Policy
FSQ Science		International Trade Agreements (WTO, etc.)
Industry Liaison		Canadian Agriculture & Food International Program
Markets & International		International Science Cooperation
Policy Research & Analysis		Technical Trade
Policy Planning & Integration		International Development
Marketing Policy		Sector Development & Analysis
International Trade Agreements (WTO, etc.)		Branding Management / VCRTs
Canadian Agriculture & Food International Program		Market Access & Market Development
International Science Cooperation		Trade Disputes
Technical Trade		Regional Operations
International Development		Management & Administrative Support
Sector Development & Analysis		Rural & Co-operatives
Branding Management / Value Chain Round Tables		Rural
Market Access & Market Development		Co-operatives
Trade Disputes		Canadian Pari-Mutuel Agency
Regional Operations
Management & Administrative Support
National Farm Products Council

Legend
	Strategic Outcome
	Program Activity
	Program Sub-Activity

Changes in AAFC's PAA since the 2005-06 DPR

The AAFC program activity previously named International Issues has been re-named Markets and International since the publication of the department's last DPR. This did not change the structure of the department's PAA. The table below illustrates the change.

Strategic Outcome	Previous Program Activity	New Program Activity
Security of the Food System	International Issues	Markets and International
Innovation for Growth	International Issues	Markets and International

Financial and Human Resources

2006-2007 Total Financial Resources for Agriculture and Agri-Food Canada

($ millions - net)
Planned Spending	Total Authorities	Actual Spending
3,853.9	3,870.4	3,567.7

2006-2007 Total Human Resources for Agriculture and Agri-Food Canada

($ millions - net)
Planned FTEs	Actual FTEs	Difference
6,257	6,585	328

FTEs = Full-Time Equivalents

Summary of Performance in Relationship to Departmental Program Activities

The following table and narrative section summarizes Agriculture and Agri-Food Canada's performance for fiscal year 2006-07 for each of its program activities and strategic outcomes.

As indicated in the table on page 10, achievements and results under the department's strategic outcomes contribute to and support the Government of Canada's desired outcomes of Strong Economic Growth, An Innovative and Knowledge-Based Economy, A Fair and Secure Marketplace, A Clean and Healthy Environment, and A Prosperous Canada Through Global Commerce.

Summary of Performance in Relationship to Departmental Program Activities

($ millions - net)
Security of the Food System
Program Activities	Type	Planned Spending	Actual Spending	Expected Results and Current Status
Business Risk Management	Ongoing	2,689.2	2,438.5	producers better supported and able to manage business risks increased producer capacity to manage operations (cashflow) throughout the production year increased business planning and skills development among low income farm families increased sector viability and profitability Performance status: Mostly Met
Food Safety and Quality	Ongoing	121.3	66.8	consumers confident about the safety and quality of food produced in Canada exposure to hazards reduced thereby protecting human health industry able to meet or exceed market requirements for agri-food safety and quality, including animal and plant health value-added opportunities for the sector through the adoption of food safety, food quality and traceability systems Performance status: Mostly Met
Markets and International (70%)	Ongoing	79.5	91.8	increased exports of Canadian agriculture and food products increased domestic and foreign investment in Canada's agriculture and food sector increased domestic market share of Canadian agriculture and food products increased influence in the development and application of international rules, technical standards and policies governing the trade of agriculture products Performance status: Mostly Met
National Farm Products Council	Ongoing	2.6	2.5	receipt of draft federal-provincial-territorial agreements by the three national agencies levy collection system in place and progress on a check-off for imports of beef and beef products action plan to respond to proposed changes to the regulatory framework continued implementation of the Government of Canada's Management Accountability Framework and further alignment with the framework Performance status: Met
Total Security of the Food System		2,892.6	2,599.6
Health of the Environment
Environment	Ongoing	331.4	364.4	air: reduced agricultural risks and improved benefits to the health of air and the atmosphere, with key priority areas being particulate emissions, odours, and emissions of gases that contribute to global warming soil: reduced agricultural risks and improved benefits to the health of soils, with key priority areas being soil organic matter and soil erosion caused by water, wind or tillage water: reduced agricultural risks and improved benefits to the health and supply of water, with key priority areas being nutrients, pathogens, pesticides, and water conservation biodiversity: ensured compatibility between biodiversity and agriculture, with key priority areas being habitat availability, species at risk, and reduction of economic damage to agriculture from wildlife Performance status: Met
Total Health of the Environment		331.4	364.4
Innovation for Growth
Innovation and Renewal	Ongoing	572.2	544.3	increased market opportunities for the agriculture and agri-food sector Canadian farmers optimize their businesses through renewal programming and services utilization of advances in value-added research that enable farmers, processors, rural communities, and service providers to differentiate their products and services Science and Innovation Strategy that integrates national science and innovation capacity for the agriculture and agri-food sector utilization of advances in innovative production systems innovation programming strengthened due to enhanced linkages within and between science and innovation community and the agriculture and agri-food value chain utilization by the agriculture and agri-food sector of advances in crop genetic advancement enhanced and integrated approach to Innovation and Renewal Policy Performance status: Mostly Met
Markets and International (30%)	Ongoing	34.1	39.3	increased exports of Canadian agriculture and food products increased domestic and foreign investment in Canada's agriculture and agri-food sector increased domestic market share of Canadian agriculture and food products increased recognition of Canadian products and capabilities Performance status: Mostly Met
Rural and Co-operatives Secretariats	Ongoing	23.7	20.8	a stronger rural voice enhanced capacity for development of rural communities government policies, programs, and services increase opportunities, mitigate barriers and enhance capacity of rural development enhanced capacity for development of co-operatives government policies, programs and services increase opportunities, mitigate barriers and enhance capacity for co-operative development Performance status: Met
Canadian Pari-Mutuel Agency	Ongoing	-	(0.8)	confidence of the betting public in pari-mutuel wagering detection against betting irregularities and performance-affecting drugs in horses determination of the exact order of the finish of a race availability of leading-edge, automated monitoring technologies to agency officers self-sufficient Revolving Fund improved levels of awareness and acceptance of regulations and policies strong federal, provincial and industry partnerships and increased international recognition Performance status: Met
Total Innovation for Growth		630.0	603.7
Total		3,853.9	3,567.7

Note: the figures in the above tables have been rounded to the nearest millions of dollars. For this reason, figures that cannot be listed in millions of dollars are shown as 0.0.

Note: Due to rounding, figures may not add exactly to the totals shown.

Alignment to Government of Canada Outcomes

Government of Canada Outcomes	Agriculture and Agri-Food Canada Strategic Outcomes	Agriculture and Agri-Food Canada Program Activities
Economic: Strong Economic Growth	Security of the Food System: A secure and sustainable agriculture and agri-food system that provides safe and reliable food to meet the needs and preferences of consumers	Business Risk Management
		Food Safety and Quality
		Markets and International
		National Farm Products Council
Economic: An Innovative and Knowledge-Based Economy	Innovation for Growth: An innovative agriculture and agri-food sector that develops food and other agriculture-related products and services in order to capture opportunities in diversified domestic and global markets	Innovation and Renewal
		Rural and Co-operatives Secretariats
Economic: A Fair and Secure Marketplace	Innovation for Growth: An innovative agriculture and agri-food sector that develops food and other agriculture-related products and services in order to capture opportunities in diversified domestic and global markets	Canadian Pari-Mutuel Agency
Economic: A Clean and Healthy Environment	Health of the Environment: An agriculture and agri-food sector that uses environmental resources in a manner that ensures their sustainability for present and future generations	Environment
International: A Prosperous Canada through Global Commerce	Innovation for Growth: An innovative agriculture and agri-food sector that develops food and other agriculture-related products and services in order to capture opportunities in diversified domestic and global markets	Markets and International

Operating Environment

The agriculture and agri-food sector plays an important role in Canada, from both an economic and social perspective. From the farming operations across the country, to the researchers, processors, distributors, retailers, and all those in between, Canada's prosperity, both economically and socially, is directly related to the success of the agriculture and agri-food sector.

The sector generates approximately $130 billion in consumer sales in Canada each year, accounting for roughly eight per cent of the country's GDP. The sector exported almost $28 billion in agriculture and food products in 2006 (almost $32 billion including fish and seafood exports), and contributed almost $7.4 billion to Canada's overall trade surplus. In addition, it employs about two million Canadians, representing one of every eight jobs in the country.

Just as important as the sector's economic contribution is its contribution to Canada's social fabric, including the role it plays in ensuring the well-being and vibrancy of rural and remote communities across the country. Canada's farmers, farm families and farming communities are the heart of Canadian agriculture and agri-food, and AAFC works to ensure the sector has the tools it needs to grow, prosper and be competitive on the world stage. This sectoral prosperity, in turn, is integral to the overall economic and social prosperity of Canada as a whole.

Even with its recognition around the world as a provider of reliable, safe, nutritious, and high-quality food, Canada's agriculture and agri-food sector has the potential for improved performance, competitiveness and profitability. It is poised to tap exciting new opportunities resulting from advances in science and technology to develop innovative food and non-food products. The end result of these advances will be even more diverse and healthier products, as well as environmental benefits, that will further contribute to a better quality of life for all Canadians.

Challenges and Opportunities

The sector faces many challenges each year, often beyond the control of producers. In any given year, these challenges can include production risks such as adverse weather conditions, pests and animal diseases, and market risks such as changing consumer preferences and fluctuating global market conditions. Globalization also introduces competitive risks such as lower-cost competition entering the marketplace while the rising value of the Canadian dollar puts downward pressure on Canadian agricultural exports. Compounding some of these challenges is the fact that producers must always be cognizant of the need to ensure the sustainability of Canada's environmental resources.

However, opportunities exist. For example, the sector may be able to benefit from specific consumer demand for green agri-food products. Also, with a net positive carbon offset balance, Canada's agriculture and agri-food sector can contribute to the country's efforts toward meeting international agreements related to carbon emissions.

Declining farm income

Despite substantial ongoing assistance from government and the continued advances in agricultural technology and productivity, farm income in Canada has consistently declined in recent years. Realized farm income fell from $3.7 billion in 2001 to a record low level of $423 million in 2003, due largely to a combination of short-term production risks such as animal diseases and natural disasters. It has since recovered somewhat, reaching a high of approximately $1.7 billion in 2006.

Production risks

Production risks, from animal diseases to adverse weather conditions to pest infestation, are omnipresent in the agriculture and agri-food sector. As shown by the recent cases of bovine spongiform encephalopathy, avian influenza and plum pox virus, these risks can create chaos for growers and many others in the sector, with potentially devastating financial ramifications. Even when a risk can be somewhat accurately forecast, such as with adverse weather phenomena, its effects on the sector are often largely unavoidable. These risks are inherent to operating in Canada's agriculture and agri-food sector.

Environmental responsibilities

Farmers can play an integral role in creating a cleaner, healthier environment for all Canadians as well as producing healthier food for consumers. One of the primary ways in which they do this is by developing strategies and beneficial management practices (including the uses of reduced risk pest management products, new types of fertilizers, new application methods, or new land management technologies) to effectively reduce pesticide and nutrient leaching and to preserve biodiversity and natural ecosystems. This benefits not only consumers and the environment, but also helps increase the competitiveness of Canadian farmers in the global marketplace.

Additionally, as a contributor of approximately 10 per cent of Canada's greenhouse gas emissions, the agriculture and agri-food sector clearly has a substantial role to play in the Government of Canada's broader environmental health plans. By reducing its emissions of air pollutants and greenhouse gases, the sector can help protect human health and the environment while also taking advantage of opportunities to achieve greater operating efficiencies.

Market and trade conditions

Canada is a net exporter of agricultural and agri-food products, contributing $7.4 billion to the national trade surplus in 2006. The value of these exports has more than doubled since the early 1990s, with exports of value-added agricultural products more than quadrupling over this period. This growth is expected to continue with the emergence of the burgeoning middle class in countries such as China and India.

There is growing competition for market share around the world. Canadian producers are increasingly competing against not only subsidized products from the United States and European Union but also products from emerging countries, such as Brazil, that are increasingly capitalizing on their lower production costs. Add to this the fact that technological advances have boosted productivity growth that outstrips product demand and the result is a supply surplus and an inevitable decline in some commodity prices.

In this ever more competitive global market, Canada remains deeply committed to liberalized trade and to use of the World Trade Organization (WTO) as a forum to advance the interests of Canada's agriculture and agri-food sector.

Consumer preferences

Satisfying the evolving needs of consumers is a constant challenge for the sector. Today's consumer has greater product knowledge and easier access to a wider selection of products than at any time in history. Buyers want a greater variety of products and they expect a higher nutritional value in the products they consume. The increased interest from consumers regarding how their food is produced has raised awareness within the sector of the need to adopt common industry standards at the farm and processing levels and continues to provide opportunities for products and food produced in environmentally friendly ways.

Innovation and new markets

Canada's agriculture and agri-food sector has a strong tradition of scientific research and innovation and has demonstrated the ability to adapt to changing market conditions, all key factors in the sector's long-term profitability and competitiveness. By continually working to introduce new products and production efficiencies, and focusing on opportunities to expand into new markets, the sector has the ability to provide increasing social and economic benefits to all Canadians.

The link between agriculture and human health has come into sharper focus in recent years. The role that agriculture, food and nutrition can play in disease prevention and overall wellness has led to a greater concern with food safety and quality, which, in turn, has led to a greater focus on innovative, safe and sustainable modes of production. Agriculture science and innovation will also yield new agricultural management practices that enhance environmental sustainability, and support Canadian farms' and agri-industries' international competitiveness.

The agriculture and agri-food sector also has a central role to play in the Government of Canada's new biofuels strategy as it aims to regulate an annual average of five per cent renewable fuel content in gasoline by 2010, and two per cent in diesel fuel and heating oil by 2012. Indeed, the entire bio-economy holds great promise for Canada's agriculture and agri-food sector as the rise of biotechnology has created a wealth of new value-added possibilities for Canadian producers and processors.

The APF and the next generation of agriculture and agri-food policy

Since 2003, AAFC has worked through the APF to meet many of the challenges in today's agricultural climate and address the needs of Canada's agriculture and agri-food sector.

The APF helped create a national approach to agriculture and agri-food policy. It was designed to help the sector seize opportunities from globalization and increase Canadian competitiveness in markets at home and abroad by becoming the world leader in: meeting burgeoning consumer demands for safe food and environmental stewardship; earning market premiums for high-quality foods; developing innovative products through investments in science; and building market recognition of the quality and value of our products.

With the APF due to expire in March 2008, the department, its portfolio partners and provincial and territorial governments have been working with stakeholders to develop the next generation of agriculture and agri-food policy.

Our Strategic Response

Agriculture and Agri-Food Canada is working with stakeholders to address these challenges and make the most of the opportunities facing the agriculture and agri-food sector. It aims to ensure a strong, vibrant farm sector that provides security of income to families dependent on farming and food security for all Canadians.

In 2006-07, the department continued to support Canadian agriculture and agri-food through the Agricultural Policy Framework (APF), a joint federal, provincial and territorial strategy. The APF provided a more stable platform of policies and programs to enhance the long-term profitability, competitiveness and sustainability of the sector. The implementation of the APF in 2003 established a new policy direction for governments and industry by enabling a full shift towards a whole-farm approach.

Within the framework of agriculture and agri-food policy, the department seeks to achieve results under its three strategic outcomes: 1) Security of the Food System, 2) Health of the Environment and 3) Innovation for Growth. AAFC and its portfolio partners pursue key program activities under each of these three strategic outcomes to advance the agriculture and agri-food agenda and ensure the best quality of life for all Canadians.

The APF is made up of five integrated and complementary elements: (1) Business Risk Management, (2) Food Safety and Quality, (3) Science and Innovation, (4) Environment, and
(5) Renewal. It also includes an international dimension that cuts across each of the five pillars. Policies and programs under all five elements are in place, most in partnership with provincial and territorial governments, and many delivered by stakeholder groups.

The inception of the APF created the need for a more progressive management framework for the department. To meet this need, AAFC has undergone a significant transformation during the past three years. Through realignment of departmental resources and structures, horizontal teams were created, each responsible for one of the elements of the APF. This approach supports multi-disciplinary contributions to broad strategic outcomes and encourages co-operation and teamwork. Within the department, enabling teams support the work of horizontal teams. More information on the structure of the department is available in Section IV of this document.

AAFC works through five key program activities, which contribute toward achieving the three strategic outcomes under which this report is organized. The five program activities are:

• Business Risk Management (BRM) - enhancing producers' capacity to manage risk, and increasing the sector's viability and profitability;
• Food Safety and Food Quality (FSFQ) - minimizing the risk and impact of food-borne hazards on human health, increasing consumer confidence and improving the sector's ability to meet or exceed market requirements for food products;
• Environment - achieving environmental sustainability of the industry by preserving the quality and availability of resources - air, water, soil, and biodiversity - for present and future generations;
• Innovation and Renewal - equipping the industry with new business and management skills, bioproducts, knowledge-based production systems, and strategies to capture opportunities and to manage change; and
• Markets and International - expanding international opportunities for the Canadian agriculture and agri-food sector.

In addition, there are three other program activities that contribute to the achievement of AAFC's strategic outcomes. These are:

• Rural and Co-operatives Secretariats;
• National Farm Products Council; and
• Canadian Pari-Mutuel Agency.

This Departmental Performance Report (DPR) presents the detailed results of the above departmental program activities, reporting against expected results and commitments detailed in the department's 2006-07 Report on Plans and Priorities (RPP).

Ongoing Departmental Priorities by Program Activity Architecture

The tables below summarize AAFC's progress and performance against commitments made in the Department's 2006-2007 RPP . Further details on the program activities under each Strategic Outcome can be found in Section II of this report.

 

 

 

 

 

 

 

Our Management Framework

AAFC conducts its operations with the accountability, transparency and oversight called for in the Federal Accountability Act and Action Plan and associated federal government measures. These measures include streamlining financial management policies, strengthening access to information legislation, reforming the procurement of government contracts, strengthening auditing and accountability within departments, and ensuring a fair, economical and efficient delivery of grants and contribution programs.

The department places a high priority on management excellence and has been actively engaged in the Treasury Board Secretariat's Management Accountability Framework (MAF) since its inception in 2003. It is used by the Government of Canada to assess the performance of departments in key management areas - from financial to people management, from assigning accountabilities to reporting results.

In 2006-2007, the department made considerable progress towards achieving the expectations of the MAF. The major accomplishments are as follows.

Portfolio Management

In 2006-07, AAFC, together with its portfolio partners, continued to implement a portfolio approach to major issues and policies. The ongoing development of the next generation of agriculture and agri-food policy was a turning point for the establishment of a portfolio approach to policy prioritization and design. AAFC worked in close collaboration with its portfolio partners at all stages of the process in 2006-07, demonstrating a commitment to strategic, proactive and inclusive portfolio engagement. This partnership will continue as the department moves towards implementation of the Growing Forward vision.

Accountability

In keeping with enhanced Government of Canada policies designed to ensure sound financial comptrollership within federal departments, AAFC implemented the Chief Financial Officer (CFO) model in 2006-07. The CFO is accountable for managing financial risks within AAFC, understanding the financial implications of decisions before they are taken, reporting on financial results, and protecting against fraud, financial negligence, violation of financial rules or principles, and losses of assets or public money.

AAFC also worked in 2006-07 to meet stringent new internal audit guidelines released by the Comptroller General of Canada. The department's Chief Audit Executive (CAE) is responsible for overseeing and promoting professional conduct of internal audits. The CAE provides independent, objective information and assurance on the effectiveness and adequacy of the department's governance, risk management and control processes, including assessing controls over financial management and financial reporting. The CAE also serves as the Director General of the Evaluation function which is responsible for the evaluation of all departmental programs and activities.

The Office of the Comptroller General audit on financial delegation cited AAFC as having best practices related to financial controls under Section 33 of the Financial Administration Act. In addition, AAFC has initiated a project intended to ensure that the departmental financial statements are auditable. These efforts will result in a strengthening of overall financial controls enhancing the ability of the CFO to meet accountabilities for financial management.

People

AAFC continued in 2006-07 to make progress towards full integration of human resources and business planning. HR plans were developed for 12 departmental branches for 2006-07, each having a three-year horizon. The components of the HR plans articulate and forecast the business needs for each branch and ensure these needs are met through proactive people management strategies. A corporate HR plan was also developed that identified core challenges facing AAFC and documented strategies to ensure the department could successfully achieve its business priorities. Five key action areas were identified through the corporate plan: staffing, official languages, employment equity, learning and development, and succession management.

In conjunction with business planning, considerable progress was made in 2006-07 toward developing tools to operationalize these key areas in a consistent and effective manner across all branches. For example, the operational staffing plan uses generic full-time-employee data extracted from the business planning process as a baseline for forecasting future planned staffing actions. This enables AAFC to ensure all new staffing actions correlate to future business requirements.

Through branch HR Plans, the language training needs of employees were identified to ensure compliance under the Public Service Official Languages Exclusion Approval Order for employees who were appointed through a non-imperative staffing process. The HR plans also take into account the language training needs of the feeders groups. As such, about $1 million per year has been set aside for language training for employees who occupy unilingual positions. By being proactive in our approach to language training, we are increasing the bilingual capacity of the department.

Another important initiative at AAFC is the Aboriginal Student Outreach Program, designed to increase interest and opportunities for Aboriginal students in science and science-related agricultural studies. Further expansion of the program took place in 2006-07. Outreach included expansion of the Aboriginal Student Employment Program (ASEP). This program fosters relationships with Aboriginal communities and adjacent research centres and, more importantly, provides opportunities for education and employment in science for Aboriginal students. In 2006-07, more than 35 Aboriginal students were hired, mostly in research positions, in nine locations across the country.

Linked to ASEP is the Aboriginal 4-H Pilot Projects program, designed to stimulate interest among Aboriginal students not currently participating in ASEP. In 2006-07, a partnership was formed between AAFC and Aboriginal 4-H. The purpose of the project is to have ASEP students employed at research centres link with Aboriginal 4-H youth through various communication channels and events further increasing interest and opportunities for Aboriginal students in science and science-related agricultural studies. AAFC also partnered with Service Canada on the Greenhouse Food Production Agricultural Training and Employment Project. This initiative resulted in the hiring of 13 Aboriginal youth who are training to be certified greenhouse producers. In addition, AAFC collaborated with other science-based departments in supporting efforts of the Canadian Aboriginal Science and Technology Society (CASTS) through the Interdepartmental Working Group on Aboriginals in Science and Technology. AAFC and eight other science-based departments collaborated with CASTS' aim of increasing the representation of Aboriginal people in science and technology education and employment in Canada.

With respect to service delivery, AAFC is at the forefront in the lead-up to the new Public Service Employment Act (PSEA), with policies in place prior to the coming into force of the PSEA, managers having received sub-delegated training and additional training delivered to more than 1,100 employees and managers. AAFC has also optimized collective and pooled staffing to increasingly sophisticated levels of implementation and is maximizing technology to support the implementation of new staffing processes while taking advantage of flexibilities in the new PSEA.

A targeted and strategic marketing and communications campaign was key to the success of the Post Secondary Recruitment Program,, which focused on revamping the image of the department, while resonating with the target audience - graduate and undergraduate students at universities across the country. The challenge in developing the communications materials was promoting AAFC as a workplace with diverse career opportunities, without ignoring its agricultural roots. The campaign slogan, Grow With Us, played on these roots, however the marketing material itself focused on the business of agriculture. A brochure titled Top 5 Reasons to Pursue a Career at AAFC was developed, along with such marketing products as a web site, employee profiles, a recruitment video, and posters. The communications approach and the slogan were popular with potential recruits, and contributed to the overall success of the recruitment strategy, under which 15 universities were visited, and 30 job offers were made to candidates. This exceeded the goal of five universities visited, and 20-22 jobs filled.

The department has also made several advancements within the information management area. These include the implementation of the Nakisa Organization Charting Tool, which assists in day-to-day operational staffing and classification activities; the pilot of the Business Intelligence tool, which focused on automating the production of demographic dashboards and employment equity and official languages metrics; and the deployment of AgriDOCs across the Human Resources Branch, which initiated implementation of the departmental standard for electronic document management systems.

Financial Management

On April 1, 2006, the Financial Matrix Management Model (FMMM) established the basis for an improved financial control framework at AAFC, by putting in place branch financial management in support of results-based management by teams. In the fall of 2006 additional tools were provided to managers in support of FMMM, which integrated financial and results-based information, as part of the 2007-08 departmental business planning and strategic decision making process.

Strategic Planning

In 2006-07, AAFC's strategic planning process addressed all six interdependent components of strategic visioning, business planning, human resource planning, resource prioritization, in-year management, and performance management. However, the results were mixed.

As a consequence, the department identified key areas for improvement, such as realistic multi-year notional allocations, top-down priority setting and clarifying accountabilities, to ensure a more integrated, thorough and flowing process. This is expected to provide better information to be used in informing decision making for the long-term and throughout the upcoming fiscal year.

Emergency Preparedness

The Emergency Management Act states that every Minister is accountable to Parliament for: 1) developing plans for risks that are within or related to their area of responsibility; 2) implementing plans when requested, to support other government departments or provinces and territories; and 3) conducting training and exercises to develop and test plans. As part of its co-ordinating role mandated under the Emergency Management Act, Public Safety Canada is developing the Federal Emergency Response Plan (FERP) which is an all-hazards emergency management response structure, framework and concept of operations for the co-ordination of federal departments and agencies during events impacting on the national interest. It outlines ministerial responsibilities in the form of 14 Emergency Support Functions. Portfolio organizations have also played a key role in the working group on Emergency Preparedness and portfolio organizations are part of current emergency response plans.

Under FERP, the Minister of Agriculture and Agri-Food is responsible for an Emergency Support Function - the co-ordination of agriculture, agri-food and other food related matters - as part of the federal government's response to an event of national interest. This Emergency Support Function is further divided into 13 Emergency Support Activities of which 11 are to be led by AAFC and two are under the leadership of the Canadian Food Inspection Agency.

To fulfill the Minister's emergency management responsibilities in 2006-07, AAFC developed the National Disaster Assistance Framework (NDAF), which focused on the department's emergency support functions. However, the externally focused NDAF did not provide a means to manage an internal emergency. To address this shortcoming, AAFC is revising the NDAF and creating the Emergency Management Framework. This will provide guidance for the management of external national-level emergencies as well as internal emergencies affecting the department's premises and employees. The Emergency Management Framework will also incorporate a Portfolio approach to emergency preparedness. This all-hazards emergency management approach will strengthen the department's ability to provide assistance to provincial, territorial and international agencies and co-ordinate responses to emergencies. The Government Security Policy (GSP) states that all federal departments must establish a business continuity planning program to provide for the continued availability of critical services and assets.

AAFC has been instructed by Public Safety Canada (PSC), in conjunction with the Treasury Board Secretariat, to develop robust and functional Business Continuity Plans (BCPs) that recognize and protect those critical services that are considered to be a priority for Canadians and the agri-food sector. Furthermore, PSC has been specific that AAFC is to develop pandemic influenza emergency plans based on completed, approved and tested departmental BCPs. To this end, in 2006-07 BCPs were completed by all branches for critical services that require recovery within 0-4 hours and 5-24 hours.

Although AAFC is well ahead of most other departments in completing BCPs, challenges still exist. There is a need to renew and clarify the role of senior management in the oversight and completion of BCPs in the department. Also, the BCP process is an evergreen one that requires dedicated staff and resources for long-term success. AAFC continues to work to meet these challenges.

Citizen-focused Service

AAFC is committed to a client-focused approach to service delivery, and achieving measurable improvements in response to client expectations. Guided by the Integrated Service Delivery Strategy, in 2006-07 the department:

• assessed client satisfaction to better understand clients' experiences, channel preferences and improvement priorities. AAFC completed a producer client satisfaction survey using the Common Measurement Tool to establish a series of baseline measures of service satisfaction which can be tracked at regular intervals. The results of this survey will be used to help AAFC monitor its performance, set service delivery priorities and better understand the service experience of producers, as well as provide a road-map for service improvement.
• created an electronic repository of service offerings across the department. This service knowledge base has helped increase understanding of service delivery within the department and can now assist with the identification of areas where further work could be done to enhance the client experience and improve the overall management of services;
• made significant progress in improving its Web presence through the launch of a renovation project for AAFC Online, to integrate AAFC's more than 80 Web sites into a single departmental site, with consistent navigation, look and feel, and renew its content. The new site was created based on client consultation through numerous rounds of focus testing. Recommendations from the focus groups allowed AAFC to tailor the site to its audiences' needs. Major improvements to date are segmenting information based on the primary client groups of the department and their information needs through the creation of “client lanes”, new methods of navigation, improved search functionality and implementing Web best practices such as grouping information by subject, simplified labels and language to make the site more intuitive for users. AAFC has also been piloting new communications methods via the web, for example through the use of an integrated subscription service and audiocasting;
• built the core components of an Enterprise-Wide Data Model, including Common Tombstone (Party and Location, e.g. name and address) and Security. This is a foundation project designed to simplify business processes and improve client satisfaction, by collecting client information once and reusing it. Modelling data elements and their relationships, and implementing the standard use of the model, will convey such benefits as enabling pre-population of forms, simplifying user-initiated changes to personal information, increasing privacy and security through identity management, and allow personalization and customization of service offerings;
• as part of an ongoing effort to enhance access to information, programs and services, strengthened its capacity to provide on-line services by launching My AAFC Account (MAA), to complement the more traditional service channels of telephone, in-person and mail. MAA gives producer clients the ability to conduct the following activities in a secure environment through the integration with the Government of Canada Secure Channel infrastructure:
  • review the personal information they submit to the federally-delivered Canadian Agricultural Income Stabilization (CAIS) administration;
  • check the status of their accounts to find out if their application has been processed and find out when they will receive payments, and;
  • submit their 2006 CAIS Supplementary Form electronically, or have it submitted by a designated representative.

MAA was the first departmental application to implement the new design of the AAFC Web Renovation Project's Common Look and Feel, the consolidation of all departmental Web sites into a single, client-focused Web presence. It is accessible through the Producer Lane of AAFC Online.

My AAFC Account is also a support mechanism for AAFC telephone service representatives to better assist clients through the Winnipeg Contact Centre.

Also in 2006-07, AAFC began implementing a common Grants and Contributions Delivery System with the purchase of commercial off-the-shelf software and implementation services to enhance access to information programs. A Common Business Process Framework for grants and contributions program delivery was developed based on a best practices model and a Key Controls Framework based on the Government of Canada Policy on Transfer Payments. Installation of three programs was initiated as well as integration to the Departmental SAP Financial system. Work is ongoing to implement additional programs, complete the financial system integration and link the system to Secure Channel to provide enhanced security features.

Internal Client Services

In August 2005, Treasury Board approved AAFC's Long-Term Capital Plan (LTCP). The LTCP demonstrated how the department would manage its assets within its approved existing reference levels. The LTCP also included options that, with additional funds, would enable AAFC to address departmental priorities in a timely manner. In 2006 the department was successful in re-directing $10 million into its capital budget for 2006-07, which allowed the acceleration of planned legislative projects and the support of high-priority science projects.

AAFC also continued in 2006-07 to contribute to the Government of Canada's Corporate Administrative Shared Services (CASS) initiative. This initiative aims to the improve effectiveness and efficiency of administrative services by developing government-wide information management and information technology systems, streamlining and standardizing administrative practices and processes, and ensuring access to information for better management of government, and provide the best service and value to Canadians. AAFC has agreed to participate in the CASS Pilot Implementation Project, to evaluate the benefits of a shared services model. As a current provider of financial and human resource systems services to portfolio partners as well as to other departments, AAFC and its clients are uniquely positioned to offer lessons learned and successful practices to the CASS organization.

Information Management

AAFC has developed a long-term comprehensive information management and information technology strategy, known as the IM/IT Strategy, Roadmap and Investment Plan. This strategy identifies the context, business drivers, key targets, recommended approaches, and planning considerations to best use information technology to meet business challenges.

The business priorities of AAFC are refreshed annually through an internal client consultation process. The IM/IT Strategy, Roadmap and Investment Plan helps guide continuing investments in technology and best practices and AAFC's strategic approach to integrated systems and common services.

AAFC has introduced a client-driven IM/IT governance framework, with a view to reviewing and prioritizing IM/IT activities on an annual basis and ensuring investments remain aligned with departmental and government-wide priorities. The results of this exercise are used to update the IM/IT Strategy, Roadmap and Investment Plan. AAFC has undertaken an extensive update of the IM/IT Strategy, Roadmap and Investment Plan (2004-2009) to review and revise the strategy to ensure that it meets evolving departmental and government priorities. The updated strategy will position AAFC IM/IT to better meet the business needs to deliver on the key activities of the new agriculture policy framework.

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