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Section III: Supplementary Information

Organizational Chart

Organizational Chart

Table 1: Comparison of Planned to Actual Spending (Incl. FTEs)

This table offers a comparison of the Main Estimates, Planned Spending, Total Authorities and Actual Spending for the most recently completed fiscal year, as well as historical figures for Actual Spending.

The $35.7 million increase from Main Estimates to Planned Spending is due to anticipated funding for such initiatives as Avian or Pandemic Influenza Preparedness, Funding to the O-Pipon-Na-Piwin Cree Nation, Recognize a Landless Band and Registration of Newfoundland Indians and Non-Insured Health Benefits Program.

The $79.0 million increase from Planned Spending to Total Authorities is due new program initiatives and sustainability funding which is received through Supplementary Estimates.

The $92.6 million decrease between Total Authorities and Actual Spending is mainly the result of:

  • lapse in the Health Council special purpose allotment;
  • delays in Indian Residential Schools Program;
  • delays in the Advertising Special Purpose Allotment;
    • lapse of frozen allotment which includes:
    • Follow-up to the Special Meeting of First Ministers and Aboriginal Leader Reprofile
    • Contributions to the government-wide 2006-2007 $1 billion Spending Restraint Exercise
    • Access to Medicines (Regime)
  • year end adjustments of Department of Justice (DOJ) expenditures.

(millions of dollars)


Program Activities 2004-2005 2005-2006 2006-2007
Actual Spending* Actual Spending Main Estimates Planned Spending (1) Actual Authorities (2) Actual Spending (2)
Health Policy, Planning and Information 385.9 375.1 288.6 288.4 312.6 290.4
Health Products and Foods 261.5 256.9 262.0 262.1 278.2 262.3
Healthy Environments and Consumer Safety 289.9 277.9 290.7 289.9 305.3 294.1
Pest Control Product Regulation 59.3 54.6 51.7 51.6 68.0 62.7
First Nations and Inuit Health 1,820.0 1,927.5 2,082.4 2,119.1 2,126.0 2.088.0
TOTAL 2,816.6 2,892.0 2,975.4 3,011.1 3,090.1 2,997.5
Less: Non-Respendable Revenue -51.3 -19.8 0.0 -8.9 -8.9 -51.8
Plus: Cost of services received without charge** 58.9 85.6 0.0 84.7 84.7 91.9
Net Cost of Department 2,824.2 2,957.8 2,975.4 3,086.9 3,165.9 3,076.6
Full Time Equivalents 8,026 8,544 8,694 8,711 8,708 8,686
1) from the 2006-2007 Report on Plans and Priorities
2) from the 2006-2007 Public Accounts
* These amounts are estimated due to the change in reporting structure from Business Line to Program Activity. However, the total number for the Department is accurate.
** Services received without charge include accommodation provided by PWGSC, the employer's share of employees' insurance premiums, Workers' Compensation coverage provided by Social Development Canada, and services received from the Department of Justice . This table excludes amounts related to the Public Health Agency of Canada (PHAC).

Table 2: Resources by Program Activity

This table reflects how resources are used within Health Canada by appropriation and by program activity.

(millions of dollars)


2006 - 2007
Program Activity Operating Capital Grants Contributions and other Transfer Payments Total Gross Expenditures Less Respendable Revenues Total Net Expenditures
Health Policy, Planning and Information
(Main Estimates) 95.6   57.1 135.9 288.6   288.6
(Planned Spending) 95.4   57.1 135.9 288.4   288.4
(Total Authorities) 125.1   53.2 134.3 312.6   312.6
(Actual Spending) 117.6   43.3 129.5 290.4   290.4
Health Products and Food
(Main Estimates) 291.9 1.4 5.9 4.0 303.2 -41.2 262.0
(Planned Spending) 292.0 1.4 5.9 4.0 303.3 -41.2 262.1
(Total Authorities) 308.5 1.4 5.7 3.8 319.4 -41.2 278.2
(Actual Spending) 292.5 1.2 5.5 3.8 303.0 -40.7 262.3
Healthy Environments and Consumer Safety
(Main Estimates) 260.4 1.0 5.1 39.6 306.1 -15.4 290.7
(Planned Spending) 259.5 1.0 5.1 39.7 305.3 -15.4 289.9
(Total Authorities) 275.6 1.0 5.1 39.0 320.7 -15.4 305.3
(Actual Spending) 262.6 0.8 4.5 38.7 306.6 -12.5 294.1

Resources by Program Activity continued...

(millions of dollars)


2006 - 2007
Program Activity Operating Capital Grants Contributions and other Transfer Payments Total Gross Expenditures Less Respendable Revenues Total Net Expenditures
Pest Control Product Regulation
(Main Estimates) 58.7       58.7 -7.0 51.7
(Planned Spending) 58.6       58.6 -7.0 51.6
(Total Authorities) 75.0       75.0 -7.0 68.0
(Actual Spending) 70.1       70.1 -7.4 62.7
First Nations and Inuit Health
(Main Estimates) 1,144.7 1.5 30.0 911.7 2,087.9 -5.5 2,082.4
(Planned Spending) 1,174.6 1.5 30.0 918.5 2,124.6 -5.5 2,119.1
(Total Authorities) 1.192.8 1.5 30.0 907.2 2,131.5 -5.5 2.162.0
(Actual Spending) 1,163.3 1.3 30.0 896.6 2,091.2 -3.2 2,088.0
TOTAL
(Main Estimates) 1,851.3 3.9 98.1 1,091.2 3,044.5 -69.1 2,975.4
(Planned Spending) 1,880.1 3.9 98.1 1,098.1 3,080.2 -69.1 3,011.1
(Total Authorities) 1,977.0 3.9 94.0 1,084.3 3,159.2 -69.1 3,090.1
(Actual Spending) 1,906.1 3.3 83.3 1,068.6 3,061.3 -63.8 2,997.5

More detailed explanations on all program activities can be found in Section II: Analysis of Performance by Strategic Outcome.

Table 3:Voted and Statutory Items

(millions of dollars)


VOTE 2006-2007
Main Estimates Planned Spending (1) Total Authorities (2) Actual Spending (2)
  Health Canada        
1 Operating expenditures 1,674.5 1,702.9 1,805.4 1,739.6
5 Grants and contributions 1,189.3 1,196.2 1,178.3 1,151.9
(S) Minister's car allowance and salary 0.1 0.1 0.1 0.1
(S) Payments for insured health services & extended health care services - - 0.0 0.0
(S) Spending of proceeds from the disposal of surplus Crown assets - - 0.5 0.1
(S) Refunds from previous year's revenue - - 0.3 0.3
(S) Collection agency fees - - 0.0 0.0
(S) Court awards     0.0 0.0
(S) Contributions to employee benefit plans 111.5 111.9 105.5 105.5
  Total Department 2,975.4 3,011.1 3,090.1 2,997.5

(1) from the 2006-2007 Report on Plans and Priorities
(2) from the 2006-2007 Public Accounts
(S) indicates expenditures the Department is required to make that do not require an appropriation act.

Table 4: Services Received Without Charge

(millions of dollars)


ITEM
2006-2007
Accommodation provided by Public Works and Government Services Canada
34.9
Contributions covering employer's share of employees' insurance premiums and expenditures paid by Treasury Board Secretariat
51.0
Worker's compensation coverage provided by Social Development Canada
0.7
Salary and associated expenditures of legal services provided by the Department of Justice
5.3
Total 2006-2007 Services Received without Charge
91.9

Table 5: Sources of Respendable and Non-Respendable Revenue

Reflected in this table is the collection of respendable revenues by program activity/branch and of nonrespendable revenues by classification and source.

Respendable revenues refer to funds collected for user fees or for recovery of the cost of departmental services. These revenues include those both external and internal to the government, the majority being external.

A variety of respendable revenues are collected including Medical Devices, Radiation Dosimetry, Drug Submission Evaluation, Veterinary Drugs, Pest Management Regulation, Product Safety, hospital revenues resulting from payments for services provided to First Nations and Inuit Health hospitals, which are covered under provincial or territorial plans, and for the sale of drugs and health services for First Nations communities.

Non-respendable revenues are shown by source in order to reflect the information in a useful format. The Department is not allowed to respend these revenues.

(millions of dollars)


Respendable Revenues Actual Revenues 2004-2005 Actual Revenues 2005-2006 2006-2007
Main Estimates Planned Revenue Total Authorities Actual Revenues
Program Activity/Branch
Health Products and Food Health Products and Food Branch 35.1 37.7 41.2 41.2 41.2 40.7
Healthy Environments and Consumer Safety Healthy Environments and Consumer Safety Branch 10.6 12.0 15.4 15.4 15.4 12.5
Pest Control Product Regulation Pest Management Regulatory Agency 6.1 5.9 7.0 7.0 7.0 7.4
First Nations and Inuit Health First Nations and Inuit Health Branch 4.0 3.4 5.5 5.5 5.5 3.2
Total Respendable Revenues 55.8 58.9 69.1 69.1 69.1 63.8

Sources of Respendable and Non-Respendable Revenue continued...

(millions of dollars)


Non-Respendable Revenues Main Classification and Source Actual Revenues 2004-2005 Actual Revenues 2005-2006 2006-2007  
Main Estimates Planned Revenue Total Authorities Actual Revenues
Non-tax revenue:            
Refunds of expenditures 41.8 10.0       40.2
Sales of goods and services 2.5 2.6       3.5
Other fees and charges 6.8 7.0   8.9 8.9 7.9
Proceeds from the disposal of Crown assets 0.2 0.2       0.2
Miscellaneous non-tax revenues 0.0 0.0       0.0
Total Non-Respendable Revenue 51.3 19.8 0.0 8.9 8.9 51.8
Total Revenues 107.1 78.7 69.1 78.0 78.0 115.6
This table excludes amounts related to the Public Health Agency of Canada (PHAC).

Table 6: Resource Requirements by Branch

Comparison of Main Estimates, 2006-2007 (RPP) planned spending and total authorities to actual spending by organization and program activity.

(millions of dollars)


PROGRAM ACTIVITY
ORGANIZATION Health Policy, Planning and Information Health Products and Food Healthy Environments and Consumer Safety Pest Control Product Regulation First Nations and Inuit Health Total
Health Policy
(Main Estimates) 269.7         267.9
(Planned Spending) 269.6         296.6
(Total Authorities) 275.2         275.2
(Actual Spending) 253.8         253.8
Health Products and Food
(Main Estimates)   204.2       204.2
(Planned Spending)   204.2       204.2
(Total Authorities)   225.6       225.6
(Actual Spending)   212.1       212.1
Healthy Environments and Consumer Safety
(Main Estimates)     238.2     238.2
(Planned Spending)     237.5     237.5
(Total Authorities)     243.6     243.6
(Actual Spending)     234.6     234.6
Pest Management Regulatory Agency
(Main Estimates)       40.2   40.2
(Planned Spending)       40.1   40.1
(Total Authorities)       45.1   45.1
(Actual Spending)       40.3   40.3
First Nations and Inuit Health
(Main Estimates)         1,961.0 1,961.0
(Planned Spending)         1,997.9 1,997.9
(Total Authorities)         1,956.2 1,956.2
(Actual Spending)         1,922.2 1,992.2

Resource Requirements by Branch continued...

(millions of dollars)


PROGRAM ACTIVITY
ORGANISATION Health Policy, Planning and Information Health Products and Food Healthy Environments and Consumer Safety Pest Control Product Regulation First Nations and Inuit Health Total
Chief Financial Officer
(Main Estimates) 3.2 9.1 8.5 2.0 16.5 39.3
(Planned Spending) 3.2 9.2 8.6 2.0 16.7 39.7
(Total Authorities) 5.5 5.7 7.9 3.4 17.9 40.4
(Actual Spending) 5.2 5.1 7.3 3.3 16.6 37.5
Corporate Services
(Main Estimates) 7.9 24.5 22.1 4.8 41.6 100.9
(Planned Spending) 7.9 24.3 21.9 4.8 41.3 100.2
(Total Authorities) 17.6 27.7 30.9 10.7 64.7 151.6
(Actual Spending) 17.5 27.4 30.6 10.6 64.2 150.3
Departmental Executive
(Main Estimates) 1.9 6.1 5.5 1.1 15.3 29.9
(Planned Spending) 1.8 6.1 5.6 1.1 15.3 29.9
(Total Authorities) 2.4 1.8 3.0 1.5 6.3 15.0
(Actual Spending) 2.3 1.1 2.4 1.4 5.5 12.7
Public Affairs, Consultation and Regions
(Main Estimates) 5.9 18.1 16.4 3.6 48.0 92.0
(Planned Spending) 5.9 18.1 16.3 3.6 47.9 91.8
(Total Authorities) 11.9 17.4 19.9 7.3 80.9 137.4
(Actual Spending) 11.6 16.6 19.2 7.1 79.5 134.0
Total
(Main Estimates) 288.6 262.0 290.7 51.7 2,082.4 2,975.4
(Planned Spending) 288.4 262.1 289.9 51.6 2,119.1 3,011.1
(Total Authorities) 312.6 278.2 305.3 68.0 2,126.0 3,090.1
(Actual Spending) 290.4 262.3 294.1 62.7 2,088.0 2,997.5
% of Total 9.7% 8.8% 9.8% 2.1% 69.7% 100.0%

Table 7a: User Fees Act


Health Products and Foods Branch (HPFB) 

2006-07

Planning Years

A. User Fees

Fee Type

Fee-setting authority

Date Last Modified

Forecast Revenue ($000)

Actual Revenue ($000)

Full Cost ($000)

Performance Standard

Performance Results

Fiscal Year

Forecast Revenue ($000)

Estimated Full Cost ($000)

Authority to Sell Drugs Fees

Regulatory  (R)

Financial Administration Act (FAA)

Dec.1994

8,039

8,020

27,599

120 calendar days to update the Drug Product Database following notification

96% within 120 calendar days

2007-08

2008-09

2009-10

8,032

18,500

18,962

36,900

37,822

38,768

Certificates of Pharmaceutical Product (Drug Export) Fees

Other (O)

Ministerial authority to enter into contract

May 2000

120

117

386

5 working days to issue certificate

95% certificates issued within 5 working days

2007-08

2008-09

2009-10

117

157

161

157

161

165

 

Drug Establishment Licensing Fees

R

FAA

Dec. 1997

5,141

6,004

8,368

250 calendar days to issue / renew licence

90% licences issued/renewed within 300 calendar days

2007-08

2008-09

2009-10

6,014

13,900

14,247

13,900

14,247

14,603

Drug Master File Fees

O

Ministerial authority to enter into contract

Jan. 1996

150

132

219

30 calendar days

100% within 30 calendar days

2007-08

2008-09

2009-10

133

378

387

378

387

397

Drug Submission Evaluation Fees

R

FAA

Aug. 1995

18,693

21,239

76,129

Review time to first decision (calendar days)

Average review time to first decision (calendar days)

2007-08

2008-09

2009-10

21,273

49,600

50,840

66,200

67,855

69,551

Pharmaceuticals

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NDS: Priority NAS = 180

 193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NDS: NOC-C NAS = 200

184

NDS: NOC-C Clin / C&M = 200

200

NDS: NAS = 300

251

NDS: Clin/C&M=300

252

NDS: Clin only = 300

188

NDS: Comp / C&M = 300

230

ANDS: C&M/Labelling = 180

165

ANDS: Comp/C&M = 180

165

SNDS: Priority Clin Only = 180

156

SNDS: Priority Clin / C&M = 180

131

SNDS: NOC-c Clin/ C&M = 200

199

SNDS: Clin/C&M = 300

281

SNDS: Clin only = 300

250

SNDS: Comp/C&M = 180

224

SNDS: C&M/ Labelling = 180

176

SNDS: Rx to OTC (switch) – no new indication = 180

142

SNDS: Labelling only = 60

39

SANDS: Comp / C&M = 180

180

SANDS: C&M / Labelling = 180

168

SANDS: Labelling only = 60

58

DINA with data = 210

190

DINA form only = 180

149

DIND with data = 210

117

DIND form only = 180

138

Biological Products

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NDS: Priority NAS = 180

274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NDS: Priority Clin/C&M = 180

378

NDS: NOC-C Clin / C&M = 200

185

NDS: NAS = 300

560

NDS: Clin/C&M=300

481

SNDS: Priority Clin Only = 180

175

SNDS: Clin/C&M = 300

381

SNDS: Clin only = 300

408

SNDS: Comp/C&M = 180

379

SNDS: C&M/ Labelling = 180

188

DINB with data = 210

130

DINB form only = 180

10

Medical Device Licence Application Fees

R

FAA

Aug.1998

3,352

3,443

12,348

Time to first decision (calendar days)

Time to first decision (calendar days)

2007-08

2008-09

2009-10

3,449

7,200

7,380

9,600

9,840

10,086

Class II = 15 (process)

13

Class II amendment = 15

11

Class III = 75

52

Class III amendment = 75

38

Class IV = 90

62

Class IV amendment = 90

49

Fees for Right to Sell a Licensed Medical Device

R

FAA

Aug. 1998

1,730

1,790

9,437

20 calendar days from deadline for receipt of annual notification to update the Medical Devices Active License Listing (MDALL) database

100% within 20 calendar days

2007-08

2008-09

2009-10

1,793

6,300

6,457

12,700

13,017

13,342

Medical Device Establishment Licensing Fees

R

FAA

Jan 2000

2,163

2,104

4,037

120 calendar days to issue / renew licence

90% licences issued/renewed  within 120 calendar days

2007-08

2008-09

2009-10

2,107

13,900

14,247

13,900

14,247

14,603

Veterinary Drug Evaluation Fees

R

FAA

Mar. 1996

776

769

6,859

Review time to first decision (calendar days)

Average review time to first decision (calendar days)

2007-08

2008-09

2009-10

770

789

809

 

6, 480

6,642

6,808

 

NDS = 300

671

SNDS = 240

539

SABNDS = 240

295

Admin = 90

134

DIN = 120

195

NC = 90

177

IND/ESC = 60

58

Labels = 45

28

Emergency Drug Release = 2

90+% within 2 days

Subtotal (R)

 

 

 

39,894

43,369

144,778

 

 

2007-08

2008-09

2009-10

43,438

110,189

112,937

159,680

163,670

167,761

Subtotal (O)

     

270

249

605

   

2007-08

2008-09

2009-10

250

535

548

535

548

562

Total

     

40,164

43,618

145,383

   

2007-08

2008-09

2009-10

43,688

110,724

113,485

160,215

164,218

168,323

Acronyms

NDS: New Drug Submission

SNDS: Supplemental New Drug Submission

ANDS/ABNDS: Abbreviated New Drug Submission

SANDS/SABNDS: Supplemental Abbreviated New Drug Submission

DIN: Drug Identification Number Application

INDS: Investigational New Drug Submission

ESC: Experimental Studies Certificate

NC: Notifiable Change

NAS: New Active Substance

OTC: Over the Counter

Rx: Prescription

Clin: Clinuical

Comp: Comparative Bio, Clinical or Pharmacodynamic

C&M: Chemistry and Manufacturing

NOC-C: Notice of Compliance with Conditions

Detailed performance targets

Forecast and actual revenue are reported on a modified cash accounting basis.

Costing information was developed using the Program Activity Architecture coding structure as directed through Treasury Board.

Under the Cost Recovery Initiative, HPFB is in the process of implementing a revised cost recovery framework, including revised fees and service standards; target for implementation is 2008-2009.


 


 Pest Management Regulatory Agency (PMRA) 

2006–07

Planning Years

A. User Fee

Fee Type

Fee-setting
Authority

Date Last
Modified

Forecast Revenue
($000)

Actual Revenue
($000)

Full Cost
($000)

Performance
Standard

Performance Results

Fiscal Year

Forecast Revenue
($000)

Estimated Full Cost
($000)

Fees to be paid for Pest Control Product Application Examination Service

Regulatory (R)

Pest Control Products Act (PCPA)

April 1997

2,637

3,825

32,246

Target is 90% of submissions in all categories to be processed within time shown.

Category A
Standard - 550 days User Request Minor Use Registration (URMUR) - 365 days Joint Reviews - variable Reduced risk - variable

Category B
Standard/priority - 365 days Reduced risk - variable

Category C
Standard - 180 or 225 days

Category D
Standard - variable

Category E
Standard - variable

*Includes deviations from Management of Submission Policy

Category A = 94%

Category B = 94%

Category C = 86%

Category D (Minor Use only) = 79%

Category E = 50%

2007-08

2008-09

2009-10

8,000

8,000

8,000

58,200

54,100

56,900

Fees to be paid for the right or privilege to manufacture or sell a pest control product in Canada and for establishing a Maximum Residue Limit in relation to a pest control product.

R

Financial Adminis-
tration Act (FAA)

 

April 1997

5,353

4674.45

37,854

All stakeholders have been consulted on the proposed service standard for invoicing clients

 

No objection and based on that, 100% of all fees for the right or privilege to manufacture or sell a pest control product in Canada have been invoiced by April 30th of the fiscal year

 

 

 

 

 

 

 

TOTAL

7,990

TOTAL

8,499

 

TOTAL

70,100

 

 

 

 

Sub-Total

2007–08

$8,000

Sub-Total

2008–09

$8,000

Sub-Total

2009–10

$8,000

TOTAL:

24,000

2007–08

$58,200

2008–09

$54,100

2009-10

$56,900

TOTAL:

169,200


 


 Corporate Services Branch

2006-07

Planning Years

User Fee  Fee Type  Fee Setting  Authority Date Last Modified

Forecast Revenue ($000)

Actual Revenue ($000)

Full Cost ($000)

Performance Standard

 Performance Results1

 Fiscal Year

Forecast Revenue ($000)

Estimated Full Cost ($000)

Fees charged for the processing of access requests filed under the Access to Information Act (ATIA)

Other products and services (O) 

 Access to Information Act 

1992

 $20.93

$12.1

$1,366

 

Response provided within 30 days following receipt of request; the response time may be extended pursuant to section 9 of the ATIA. Notice of extension to be sent within 30 days after receipt of request.

The Access to Information Act provides fuller details

 

Of the 2,017 requests, 1,643 (81.5%) requests were completed during the 2006–2007 reporting period.

 

The Department was able to respond within 30 days or less in 626 (38.1%) of completed cases. Response times for the remaining cases were 280 (17.0%) within

31 days to 60 days, 400 (24.3%) within 61 to 120 days, and 337 (20.5%) in 121 or more days.

2007-08

2008-09

2009-10

$13.00

$13.00

            $13.00

See note 2 under Section C – Other Information

$1,400

$1,400

$1,400

Section Note3 under Section C – Other Information

 Sub-Total  (R)

Sub-Total (O)

 

 

 

 

$0

$12.1

$0

$1,366

 

 

2007-08
2008-09
2009-10

$13.00

$13.00

$13.00

$1,400

$1,400

$1,400

 Total                   $39.00 $4,200
Date Last Modified: NA
1. Projection based on actual revenue received during FY 2006-07.Due to the nature and varying complexity of ATI requests, it is unknown what fees may be applicable until a request is processed. Under certain circumstances, fees may be waived.
2. Estimated direct cost associated with ATI requests.

Table 7b, 8 and 9

For detailed information on Policy on Service Standards for External Fees (Table 7b), Major Regulatory Initiatives (Table 8) and Details on Project Spending (Table 9), please visit the following website: http://www.tbs-sct.gc.ca/rma/dpr2/06-07/index_e.asp.

Table 10a: Summary of Transfer Payments by Program Activity

This table reflects the break down of Transfer Payments (Grants and Contributions) by Program Activity. For more details refer to Table 10(b).

(millions of dollars)


Program Activities 2004-2005 2005-2006 2006-2007
Actual Spending Actual Spending Main Estimates Planned Spending Total Authorities Actual Spending
Grants
Health Policy, Planning and Information 50.7 54.6 57.1 57.1 53.2 43.3
Health Products and Foods 5.4 5.5 5.9 5.9 5.7 5.5
Healthy Environments and Consumer Safety 1.5 1.2 5.1 5.1 5.1 4.5
First Nations and Inuit Health 0.0 30.0 30.0 30.0 30.0 30.0
TOTAL GRANTS 57.6 91.3 98.1 98.1 94.0 83.3
Contributions
Health Policy, Planning and Information 222.8 236.3 135.9 135.9 134.3 129.5
Health Products and Foods 0.4 4.1 4.0 4.0 3.8 3.8
Healthy Environments and Consumer Safety 35.8 42.3 39.6 39.7 39.0 38.7
First Nations and Inuit Health 858.9 826.8 911.7 918.5 907.2 896.6
TOTAL CONTRIBUTIONS 1,118.0 1,109.5 1,091.2 1,098.1 1,084.3 1,068.6
TOTAL TRANSFER PAYMENTS 1,175.6 1,200.8 1,189.3 1,196.2 1,178.3 1,151.9

This table excludes amounts related to the Public Health Agency of Canada (PHAC).

The increase in First Nations and Inuit Health Grant expenditures is due to funding for the Territorial Health Access Fund and Operational Secretariat and the Territorial Medical Travel Fund.

The decrease in Health Policy, Planning and Information contributions is largely due to the reduction for the Primary Health Care Transition Fund.


Table 10b: Details on Transfer Payment Programs (TPPs)

HEALTH POLICY, PLANNING AND INFORMATION

  • Grant to Health Council of Canada
  • Grant to Canadian Agency for Drugs and Technologies in Health
  • Grant to Canadian Patient Safety Institute
  • Contributions Program to improve access to health services for official language minority communities
  • Health Care Strategies and Policy Contribution Program
  • Contributions for the Primary Health Care Transition Fund

HEALTH PRODUCTS AND FOOD

  • Grant to Canadian Blood Services: Blood Safety and Effectiveness and Research and Development

HEALTHY ENVIRONMENTS AND CONSUMER SAFETY

  • Alcohol and Drug Treatment and Rehabilitation Contribution Program
  • Drug Strategy Community Initiatives Fund
  • Contributions in support of the Federal Tobacco Control Strategy

FIRST NATIONS AND INUIT HEALTH

  • Nunavut Medical Travel Fund
  • Grant to Government ofYukon for theTerritorial Health
    Access Fund and Operational Secretariat
  • Contributions for First Nations and Inuit Health Benefits
  • Payments to Aboriginal Health Institute/Centre for advancement of Aboriginal peoples' health
  • Contributions for First Nations and Inuit Health Facilities and Capital Program
  • Contributions for First Nations and Inuit Community Programs
  • Payments to Indian bands, associations or groups for control and provision of health services
  • Contributions for First Nations and Inuit Health Governance and Infrastructure Support
  • Contributions for Bigstone Non-Insured Health Benefits Pilot Project
  • Contributions for First Nations and Inuit Health Protection
  • Contributions for First Nations and Inuit Primary Health Care

Supplementary information on Transfer Payment Programs

Table 11: Conditional Grants (Foundations)

Canadian Health Services Research Foundation (CHSRF)
Canada Health Infoway Inc. ( Infoway )
Canadian Institute for Health Information (CIHI)

Supplementary information on Conditional Grants (Foundations)

Table 12: Financial Statements

Statement of Management Responsibility

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2007 and all information contained in these statements rests with Health Canada's management.  These financial statements have been prepared by management in accordance with accounting standards issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector.  

Management is responsible for the integrity and objectivity of the information in these financial statements.  Some of the information in the financial statements is based on management’s best estimates and judgment and gives due consideration to materiality.  To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of Health Canada’s financial transactions.  Financial information submitted to the Public Accounts of Canada and included in Health Canada's Departmental Performance Report is consistent with these financial statements.

Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. 

Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout Health Canada.

Management is supported by the Departmental Audit and Evaluation Committee, which provides assurance on risk management strategy and practices, management control frameworks and practices, policy and program effectiveness and improvement, and other information used for decision-making and reporting. The Committee oversees internal audit and evaluation activities and approves the department audit and evaluation plan.  It also reviews the results of audits and evaluations as well as management responses and action plans developed to address related recommendations.  The Committee membership is comprised of the Deputy Minister or the Associate Deputy Minister, the Assistant Deputy Ministers or their alternates, a Regional Director General, a representative from the Audit and Accountability Bureau and the Director of the Evaluation Division.  A representative from the Office of the Auditor General participates as an observer. The financial statements of Health Canada have not been audited.

Suzanne Vinet
Acting Deputy Minister
Ottawa, Canada
Date: August 9, 2007

Marcel Nouvet
Interim Chief Financial Officer
Ottawa, Canada
Date: August 9, 2007

Statement of Operations (unaudited)

For the year ended March 31

(in thousands of dollars)


  2007 2006
Expenses First Nations and Inuit Health Health Policy, Planning and Information Health Products and Food Healthy Environments and Consumer Safety Pest Control Product Regulation Total Total
Transfer payments 909,281 594,917 9,198 42,245                  -    1,555,641 1,191,194
Contingent Liability Expenses (2,504) 1,023,476                  -    (20) (150) 1,020,802 (12)
Salaries and wages 272,447 57,700 243,436 178,198 53,405 805,186 783,529
Utilities, material and supplies 412,826 2,492 16,457 17,677 2,513 451,965 401,801
Professional and special services 294,187 42,168 40,259 47,432 6,926 430,972 387,867
Travel- Non-Insured Health Patient 122,676                   -                     -                     -                     -    122,676 112,713
Accommodation 19,347 3,735 14,964 10,756 3,421 52,223 50,198
Purchased repair and maintenance 14,705 2,965 9,271 9,101 2,028 38,070 42,570
Travel and relocation 20,654 2,816 5,235 7,602 830 37,137 38,748
Information 8,529 1,951 4,574 10,913 1,017 26,984 14,716
Communications 10,983 1,330 4,668 4,943 849 22,773 18,442
Amortization 7,136 3 6,967 6,754 274 21,134 22,492
Rentals 1,521 933 869 857 197 4,377 4,356
Bad debts 249 54 143 144 33 623                    -   
Other (181) 43 189 278 19 348 4,216
  2,091,856 1,734,583 356,230 336,880 71,362 4,590,911 3,072,830
Revenues
Sales of goods and services              
Services of a regulatory nature 19                   -    22,324 47 3,364 25,754 21,364
Rights and privileges 21                   -    17,123 52 4,112 21,308 21,206
Services of a non-regulatory nature 4,446                   -    365 12,368 53 17,232 16,946
Lease and Use of Public Property 416                   -    2 4 1 423 448
Revenues from fines                  -                     -                     -    2,348                  -    2,348 2,759
Interest 127                   -    573 318 255 1,273 320
Other 1,809 5 3,200 1,745 1,258 8,017 7,245
  6,838 5 43,587 16,882 9,043 76,355 70,288
               
Net cost of operations 2,085,018 1,734,578 312,643 319,998 62,319 4,514,556 3,002,542
The accompanying notes are an integral part of the financial statementss

Statement of Financial Position (unaudited)

As at March 31


(in thousands of dollars) 2007 2006
Assets
Financial assets
Accounts receivable and advances (Note 4) 33,472 27,360
  33,472 27,360
Non-financial assets
Prepaid expenses 2 -
Tangible capital assets (Note 5) 108,116 109,824
  108,118 109,824
  141,590 137,184
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities 395,377 402,718
Vacation pay and compensatory leave 39,055 37,205
Deferred revenue 3,683 4,944
Employee severance benefits (Note 6) 134,294 122,332
Other liabilities (Note 7) 1,461,712 10,684
  2,034,121 577,883
Equity of Canada (1,892,531) (440,699)
  141,590 137,184
Contingent Liabilities (Note 8)
Contractual Obligations (Note 9)
The accompanying notes are an integral part of the financial statements

Statement of Equity (unaudited)

For the year ended March 31


(in thousands of dollars) 2007 2006
Equity of Canada, beginning of year (440,699) (615,016)
Net cost of operations (4,514,556) (3,002,542)
Current year appropriations used (Note 3) 2,997,550 2,891,980
Revenue not available for spending (12,597) (11,234)
Change in net position in the Consolidated Revenue Fund  (Note 3) (14,173) 210,538
Services provided without charge by other government departments (Note 10) 91,944 85,575
Equity of Canada, end of year (1,892,531) (440,699)
The accompanying notes are an integral part of the financial statements     

Statement of Cash Flow (unaudited)

For the year ended March 31


(in thousands of dollars) 2007 2006
Operating transactions
Net cost of operations 4,514,556 3,002,542
Non-cash items:    
Amortization of tangible capital assets (Note 5) (21,134) (22,492)
Gain (loss) on disposal of capital and non-capital assets (31) 1,003
Services provided without charge by other government departments (Note 10) (91,944) (85,575)
Variations in Statement of Financial Position:    
Increase (decrease) in accounts receivable, advances and prepaids 6,114 (27,964)
Decrease (increase) in liabilities (1,456,238) 215,995
Cash used by Operating Activities 2,951,323 3,083,509
Capital investment activities
Acquisitions of tangible capital assets   (Note 5) 19,542 7,894
Proceeds on disposal of tangible capital assets (85) (119)
Cash used by Investment Activities 19,457 7,775
Financing Activities
Net cash provided by Government of Canada (2,970,780) (3,091,284)
Cash used by Financing Activities (2,970,780) (3,091,284)
     
The accompanying notes are an integral part of the financial statements

Notes to the Financial Statements (unaudited)

1. Authority and purpose

The Department of Health was established effective July 12, 1996 under the Department of Health Act to participate in the promotion and preservation of the health of the people of Canada. It is named in Schedule I of the Financial Administration Act and reports through the Minister of Health. Priorities and reporting are aligned under the following program activities:

First Nations and Inuit Health

The First Nations and Inuit Health program activity objectives include improving health outcomes; ensuring availability of, and access to, quality health services; and supporting greater control of the health system by First Nations and Inuit. Together with First Nations and Inuit, the First Nations and Inuit Health Branch through its regional offices, delivers public health and community health programs on-reserve, these include environmental health and communicable and non-communicable disease prevention, and provision of primary health care services through nursing stations and community health centres in remote and/or isolated communities to supplement and support the services that provincial, territorial and regional health authorities provide. The First Nations and Inuit Health program activity also supports targeted health promotion programs for Aboriginal people, regardless of residency (e.g. Aboriginal Diabetes Initiative) as well as counselling, addictions and mental wellness services. The Non-Insured Health Benefits coverage of drug, dental care, vision care, medical supplies and equipment, short-term crisis intervention mental health services, and medical transportation is available to all registered Indians and recognized Inuit in Canada, regardless of residency.

Health Policy, Planning and Information

The Health Policy, Planning and Information program activity provides advice and support to the Minister, the departmental executives and to program branches in the areas of policy development, intergovernmental and international affairs, strategic planning, program delivery and review and the administration of the Canada Health Act . It also contributes to improved health outcomes for Canadians by promoting the increased and more effective use of information and communications technologies; by improving access to reliable health information; by providing policy research and analysis to support evidence-based decision-making; by working with official language minority communities and others to improve access to health services in the official language of choice; and by taking into account Canadians' privacy expectations with respect to health information.

Health Products and Food

Health Canada is responsible for a broad range of health protection and promotion activities that affect the everyday lives of Canadians. As the federal authority responsible for the regulation of health products and food, Health Products and Food Branch evaluates and monitors the safety, quality and effectiveness of thousands of drugs (human and veterinary), vaccines, blood and blood products, biologics and genetic therapies, medical devices and natural health products, as well as the safety of the foods Canadians eat. It also provides useful information about risks and benefits related to health products and food so that Canadians can make informed decisions about their health and well-being. Ongoing regulatory responsibilities span the life cycle of health products and food, from clinical trials to surveillance, compliance and enforcement. The branch is also facing challenges associated with rapid advances in technology and scientific breakthroughs that have resulted in the growth of an unprecedented number of biologics, genetic therapies and vaccines and genetically modified and other novel foods. These challenges are met by drawing on sound science and effective risk management in evidence-based decision-making. These disciplines are integrated into daily operations, and together with the branch health promotion activities, they enable timely access to safe and effective health products and food for Canadians.

Healthy Environments and Consumer Safety

Under this Program Activity, Health Canada addresses many elements of day-to-day living that have an impact on the health of Canadians. These include drinking water safety, air quality, radiation exposure, substance use and abuse (including alcohol), consumer product safety, tobacco and second hand smoke, workplace health, and chemicals in the workplace and in the environment. Health Canada is also engaged in other health and safety related activities, including the Government's public safety and anti-terrorism initiatives, inspection of food and potable water for the travelling public, and health contingency planning for visiting foreign dignitaries. The broad national mandate flows from legislation including the Food and Drugs Act, the Controlled Drugs and Substances Act, the Hazardous Products Act, the Radiation Emitting Devices Act, the Canadian Environmental Protection Act, the Tobacco Act and others. Results are delivered through partnerships and by an active presence throughout every region of the country.

Pest Control Product Regulation

To help prevent unacceptable risks to people and the environment, Health Canada regulates the importation, sale and use of pesticides under the federal authority of the Pest Control Products Act (PCPA ) and Regulations. The scope of work is extensive with more than 5,000 registered pesticides - including herbicides, insecticides, fungicides, antimicrobial agents, pool chemicals, microbials, material and wood preservatives, animal and insect repellents as well as insect and rodent-controlling devices. Ongoing regulatory responsibilities constitute the majority of the work under this program activity. Using internationally accepted approaches and protocols; Health Canada conducts science-based health, environmental and value assessments. Pesticides are registered only if the health and environmental risks are considered acceptable, and if the product is effective. Health Canada sets maximum pesticide residue limits for food commodities under the Food and Drugs Act . Older pesticides are re-evaluated to determine if their use continues to be acceptable under current scientific approaches. Health Canada facilitates, encourages and maximizes compliance with the PCPA and the conditions of registration and also develops and promotes the use of sustainable pest management practices and products in cooperation with stakeholders.

The Department is responsible for the administration and enforcement of the following statutes and/or regulations, for which the Minister of Health is responsible for the Department and remains accountable to Parliament: Canada Health Act, Canadian Centre on Substance Abuse Act, Canadian Environmental Protection Act, Controlled Drugs and Substance Act, Department of Health Act, Fitness and Amateur Sport Act, Food and Drugs Act, Hazardous Materials Information Review Act, Hazardous Products Act, Patent Act, Pest Control Products Act, Pesticide Residue Compensation Act, Quarantine Act, Queen Elizabeth II Canadian Research Fund Act, Radiation Emitting Devices Act, Tobacco Act, and the Human Assisted Reproduction Act.

2. Significant accounting policies

The financial statements have been prepared in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector. Significant accounting policies are as follows:

(a) Parliamentary appropriations

The Department of Health is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the department do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.

(b) Net Cash Provided by Government

The department operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by the department is deposited to the CRF and all cash disbursements made by the department are paid from the CRF. Net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

(c) Change in net position in the Consolidated Revenue Fund

The change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by Government and appropriations used in a year, excluding the amount of non respendable revenue recorded by the department. It results from timing differences between when a transaction affects appropriations and when it is processed through the CRF.

(d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues. Types of revenues collected include medical devices, radiation dosimetry, drug submission evaluation, veterinary drugs, pest management regulation, product safety, hospital revenues resulting from payments for services provided to First Nations and Inuit Health hospitals, which are covered under provincial or territorial plans, and for the sale of drugs and health services for First Nations communities. Revenues that have been received but not yet earned are disclosed as deferred revenues.

(e) Expenses

Expenses are recorded on the accrual basis:

  • Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements;
  • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement;
  • Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
  • Services provided without charge by other government departments for accommodation, the employer’s contribution to the health and dental insurance plans, salary and associated expenditures of legal services and the worker's compensation coverage are recorded as operating expenses at their estimated cost.
(f) Accounts receivable

Accounts receivables are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.

(g) Employee future benefits
  • Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The department's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the department to make contributions for any actuarial deficiencies of the Plan.
  • Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
(h) Contingent liabilities

Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(i) Environmental liabilities

Environmental liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the department becomes aware of the contamination and is obligated, or is likely to be obligated to incur such costs. If the likelihood of the department's obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in the notes to the financial statements.

(j) Tangible Capital Assets

All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Health Canada does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, immovable assets located on Indian Reserves and museum collections.

Amortization of capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:


Asset class Sub-asset class Amortization Period
Buildings Buildings 25 years
Works and infrastructure Works and infrastructure 25 years
Leasehold improvements Leasehold improvements Lease term, max. 40 years
Machinery and equipment Machinery and equipment 8-12 years
Computer equipment 3-5 years
Computer software 3 years
Other equipment 10-12 years
Vehicles Motor Vehicles 4-7 years
Other Vehicles 10 years

(k) Prepaid expenses

Prepaid expenses include prepayments of operating expenses and transfer payments. Prepaid transfer payments consist of contributions advanced to recipients as of March 31 for which it is known that the costs will be incurred by the recipient in the subsequent fiscal year and the amount can be readily determined based on available information.

(l) Measurement uncertainty

The preparation of these financial statements in accordance with accounting policies issued by the Treasury Board of Canada which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, environmental liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary appropriations

Health Canada receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Department has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences between net cost of operations and appropriations are reconciled in the following tables.

(a) Reconciliation of net cost of operations to current year appropriations used:


(in thousands of dollars) 2007 2006
Net cost of operations 4,514,556 3,002,542
Adjustments for items affecting net cost of operations but not affecting appropriations:
Add (Less):
Services provided without charge by other government departments (91,944) (85,575)
Amortization (21,134) (22,492)
Employee severance benefits (11,961) (21,856)
Refund/adjustment of previous year's expenditures 40,390 17,224
Revenue not available for spending 12,597 11,234
Allowance for Bad Debt (623) 0
Justice Canada legal fees (11,785) (10,488)
Vacation pay and compensatory leave (1,918) (2,736)
Adjustments to previous years revenues 0 0
Adjustments to opening balances 0 0
Other increase in liabilities (see Note 7) (1,450,202) (3,751)
  (1,536,580) (118,440)
Adjustments for items not affecting net cost of operations but affecting appropriations:
Add (Less):
Acquisitions of tangible capital assets 19,542 7,894
Net change to accountable advances 32 (16)
Change in Prepaid Expense 0 0
Suspense accounts (should be zero at year end) 0 0
  19,574 7,878
Current year appropriations used 2,997,550 2,891,980

(b) Appropriations provided and used:


(in thousands of dollars) Appropriations Provided
  2007 2006
Operating expenditures - Vote 1 1 805 445 1 601 715
Grants and Contributions - Vote 5 1 178 285 1 247 709
Statutory Amounts 106 333 109 688
Less:
Appropriation available for future years (235) (238)
Lapsed appropriations (92,278) (66,894)
Current year appropriations used 2,997,550 2,891,980

(c) Reconciliation of net cash provided by Government to current year appropriations used


(in thousands of dollars) 2007 2006
Net cash provided by Government 2,970,780 3,091,284
Revenue not available for spending 12,597 11,234
Change in net position in the Consolidated Revenue Fund
Refund/reversal of previous year's expenses 40,390 17,224
Justice Canada legal fees (11,785) (10,488)
Variation in accounts receivable and advance (6,112) 27,832
Variation in accounts payable and accrued liabilities (7,341) (238,830)
Other (979) (6,276)
  14,173 (210,538)
Current year appropriations used 2,997,550 2,891,980

4. Accounts receivable and advances

Health Canada records receivables from three main sources. As of March 31, amounts due under each of these categories are as follows:


(in thousands of dollars) 2007 2006
Receivables from External Parties 21,623 21,269
Receivables from Other Government Departments 13,992 8,870
Employee Advances 106 75
Gross receivables 35,721 30,214
Less: Allowance for doubtful accounts on external receivables (2,249) (2,854)
Net accounts receivable and advances 33,472 27,360

5. Tangible capital assets

(in thousands of dollars)


Capital assets Opening
Balance
Acquisitions Disposals/
write-downs/
adjustments
Closing
Balance
Land 1,181 - - 1,181
Buildings 127,106 653 - 127,759
Works and infrastructure 0 0 0 0
Leasehold improvements 19,277 - (4) 19,273
Machinery and equipment 106,102 13,105 (469) 118,738
Computer equipment 38,434 3,241 (316) 41,359
Computer software 4,346 464 0 4,810
Other equipment 5,431 199 1 5,631
Machinery and equipment 154,313 17,008 (783) 170,538
Motor Vehicles 18,870 1,881 (1,030) 19,721
Other Vehicles 1,416 0 0 1,416
Vehicles 20,286 1,881 (1,030) 21,137
  322,163 19,542 (1,817) 339,888
Accumulated
amortization
Opening
Balance
Current year
amortization
Disposals/
write-downs/
adjustments
Closing
Balance
(in thousands of dollars)
Buildings 76,549 5,164 (1) 81,712
Works and infrastructure 0 0 0 0
Leasehold improvements 13,835 3,494 - 17,329
Machinery and equipment 73,808 6,240 (467) 79,581
Computer equipment 29,206 3,502 (294) 32,414
Computer software 3,834 295 0 4,129
Other equipment 2,673 553 1 3,227
Machinery and equipment 109,521 10,588 (758) 119,351
Motor Vehicles 12,207 1,750 (941) 13,016
Other Vehicles 227 138 (1) 364
Vehicles 12,434 1,888 (942) 13,380
  212,339 21,134 (1,701) 231,772
Tangible capital assets net book value Opening
Balance
    Closing
Balance
(in thousands of dollars)
Land 1,181     1,181
Buildings 50,557     46,047
Works and infrastructure 0     0
Leasehold improvements 5,442     1,944
Machinery and equipment 44,792     51,187
Vehicles 7,852     7,757
  109,824     108,116
Amortization expense for the year ended March 31, 2007 is $21,134 (2006 - $22,492).

6. Employee benefits

(a) Pension benefits

The department's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Qubec Pension Plans benefits and they are indexed to inflation.

Both the employees and the department contribute to the cost of the Plan. The current and previous year expenses, which represent approximately 2.2 times (2.6 in 2005-06) the contributions by employees, amount to:


(in thousands of dollars) 2007 2006
Expense for the year 77,728 80,743
  77,728 80,743

The department's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance benefits

The department provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:


(in thousands of dollars) 2007 2006
Accrued benefit obligation, beginning of year 122,332 100,476
Expense for the year 18,296 30,517
Benefits paid during the year (6,334) (8,661)
Accrued benefit obligation, end of year 134,294 122,332

7. Other liabilities

(a) Pension benefits

Other liabilities include allowances and contingencies reflecting $1.023 billion for Hepatitis C litigations and two statutory grants amounting to $430 million as announced in the Budget 2007; (Bill C-52 : $400 million to Canada Health Infoway to support the development of electronic health records and $30 million to Rick Hansen Foundation for the Spinal Cord Injury Transitional Research Network).

8. Contingent liabilities

(a) Contaminated sites

Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the department is obligated or likely to be obligated to incur such costs. Health Canada has identified sites where such action is possible and for which a liability has been recorded.


  2007 2006
Approximate number of sites for which a liability has been recorded 5 14
(in thousands of dollars)
Liability recorded for contaminated sites 3,197 3,646

Health Canada’s ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued in the year in which they become known.

(b) Claims and litigation

In the normal course of its operations, Health Canada becomes involved in various legal actions. Legal proceedings for claims totalling approximately $10,811,022,000 ($10,798,354,000 in 2006) were still pending at March 31, 2007. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded on the department’s financial statements.

9. Contractual obligations

The nature of Health Canada's activity results in multi-year contracts and obligations whereby the Department will be committed to make some future payments. Significant contractual obligations that can be reasonably estimated are as follows:


(in thousands of dollars) Transfer payments Non-Insured Health
Benefits
Total
2007-08 126,000 22,000 148,000
2008-09 97,000 31,000 128,000
2009-10 96,000 20,000 116,000
2010-11 58,000 - 58,000
2011-12 and thereafter 50,000 - 50,000
Total 427,000 73,000 500,000

10. Related party transactions

The department is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The department enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the department received services which were obtained without charge from other Government departments as presented in part (a).

(a) Services provided without charge by other government departments:

During the year the department received without charge from other departments, accommodation, legal fees, worker's compensation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the department's Statement of Operations as follows:


(in thousands of dollars) 2007 2006
Accommodation 34,914 34,481
Employer's contribution to the health and dental insurance plans 50,980 48,176
Worker's compensation costs 711 879
Legal services 5,339 2,039
  91,944 85,575

The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the department's Statement of Operations.

(b) Payables outstanding at year-end with related parties:

(in thousands of dollars) 2007 2006
Accounts payable to other government departments and agencies 18,941 20,508

11. Comparative information

Comparative figures have been reclassified to conform to the current year’s presentation.

12. Subsequent events

On December 14, 2006, the Government and Class Counsel reached a settlement for those Canadians who contracted hepatitis C from the blood system before January 1, 1986 and between July 2, 1990 and September 28, 1998. Under the terms of the agreement, the Government set aside about $1 billion in a special settlement fund which is reflected in the present financial statements. On June 8, 2007, Provincial Superior Courts approved the Settlement and the settlement funds will be transferred to the appointed trustee in the upcoming fiscal year.

Table 13: Responses to Parliamentary Committees, and Audits and Evaluations


Response to Parliamentary Committee

Standing Committee on Health

Report #3 “Silicone Gel-filled Breast Implants: Areas of Concern” - tabled September 18, 2006

Committee members heard testimony on the issue of silicone gel-filled breast implants. Witnesses included officials from Health Canada and the Public Health Agency of Canada; former members of Health Canada's Expert Advisory Panel on Breast Implants, Dr. Mitchell Brown and Dr. Paula Chidwick; and Dr. Diana Zuckerman, President of the National Research Center for Women and Families in the United States. Based on the evidence provided by these witnesses, the Committee identified key concerns regarding silicone gel-filled breast implants relating to several areas including safety assessments, special access, informed consent and post-approval surveillance. The Committee acknowledges that these recommendations may require changes to the Medical Devices Regulations and/or other supporting documents. In its response, the Department recognizes the importance of each of the recommendations and the underlying concerns. Health Canada has considered each recommendation carefully and prepared a response to the concerns and advice contained in the Committee's report. The Government's response and actions are in line with the Committee's recommendations.

Government Response (tabled January 17, 2007)



Responses to the Auditor General of Canada, including to the Commissioner of the Environmentand Sustainable Development (CESD)

The Auditor General's (AG's) May 2006 Status Report included Chapter 5 - Management of Programs for First Nations. In this follow-up audit, the AG examined the progress of Health Canada and four other federal organizations in implementing 37 recommendations made between 2000 and 2003 on First Nations issues. The recommendations were included in chapters that covered housing on reserves, economic development, third-party intervention, health care, the food mail program, comprehensive land claims, and reporting requirements for First Nations. The AG also identified factors that appear to have been critical in successfully implementing the recommendations.

In its response, the Government agreed that the seven factors identified by the AG were important and that where satisfactory progress has been made on the AG's recommendations, one or more of these factors were present. In addition, the Government noted that these factors constitute an increasingly important part of its approach for the broader Aboriginal agenda. The Government noted that resolving Aboriginal issues remains an extremely difficult challenge, characterized by complex jurisdictional issues. Major reform is complex, requiring phased implementation and the establishment of strong governance and accountability measures in First Nations communities. Nevertheless, the Government will continue to take the critical factors into account when developing approaches aimed at securing a better future for Aboriginal peoples.

The AG's November 2006 Annual Report included Chapter 8 - Allocating Funds to Regulatory Programs -Health Canada. The AG examined both the process by which Health Canada decides what resources to allocate to each of its branches, as well as the information used as the basis for resource allocation. In particular, the AG examined how branches allocate resources to three regulatory programs (product safety, drug products and medical devices), and assessed the impact of the Department's resource allocation process on its ability to carry out its regulatory responsibilities in these areas. The audit focused on fiscal years 2003-2004 and 2004-2005.

The AG recommended improvements in several areas, including the operational plans for each of the three Health Canada regulatory programs; various aspects of the related resource allocation process, including the establishment of user fees; and the ongoing measurement of and reporting on performance.

Health Canada is progressing in the implementation of all the AG recommendations. For example, the Department has strengthened operational planning through the launching of a combined strategic and operational planning process that includes performance measures, indicators and measurable targets, as well as decisions on resource allocations. The completion date for implementing the new process is fiscal year 2007-2008.

In addition, Health Canada recently approved a new cost recovery strategy and framework for all its user fees programs, including drugs and medical devices, in order to align with the Treasury Board Policy on Service Standards for External Fees and to develop a full costing model. Work on the cost recovery strategy and framework is expected to be completed by March 31, 2008.

Building on stakeholder consultations in 2005, Health Canada is renewing its cost-recovery regime for drugs and medical devices in accordance with the Treasury Board policy and the User Fees Act. Health Canada has launched consultations with stakeholders in 2006-2007 with a goal to complete the work over the next two fiscal years (2007-2008 and 2008-2009).

The AG's November 2006 Annual Report also included Chapter 10 - Award and Management of a Health Benefits Contract: Public Works and Government Services Canada and Health Canada. Health Canada is responsible for providing non-insured health benefits such as drugs and medical supplies to eligible First Nations and Inuit people. In 1997, Public Works and Government Services Canada (PWGSC) awarded a contract to First Canadian Health Management Corporation Inc. to provide claim processing services for Health Canada's Non-Insured Health Benefits (NIHB) program. The AG assessed whether PWGSC complied with the government's contracting policy when it awarded the contract and whether Health Canada exercised adequate control over public funds spent on the program.

Two of the AG's recommendations were addressed to Health Canada - one related to compliance with sections 33 and 34 of the Financial Administration Act, and the other related to the clarity of the Department's Delegation of Financial Signing Authorities document. As a result of additional audit work conducted between January and September 2006, the AG confirmed that Health Canada had resolved both of these issues.



External Audits or Evaluations

Government-wide audits affecting Health Canada conducted by the Auditor General:

May 2006 Status Report:

  • Chapter 1 - Managing Government: Financial Information
  • Chapter 5 - Management of Programs for First Nations

Section III • Supplementary Information Responses to Parliamentary Committees, and Audits and Evaluations (continued)

November 2006 Annual Report:

  • Chapter 8 - Allocating Funds to Regulatory Programs-Health Canada
  • Chapter 10 - Award and Management of a Health Benefits Contract: Public Works and Government Services Canada and Health Canada

February 2007 Status Report:

  • Chapter 1 - Advertising and Public Opinion Research

Government-wide audits affecting Health Canada conducted by the Commissioner of the Environment and Sustainable Development (CESD) - September 2006 Annual Report:

  • Chapter 2 - Adapting to the Impacts of Climate Change
  • Chapter 4 - Sustainable Development Strategies
  • Chapter 5 - Environmental Petitions

Audits conducted by the Commissioner of Official Languages (COL):

  • Audit of service to the public conducted in summer 2006 on 37 institutions, including Health Canada. The results were published in the COL's Annual Report in May 2007. The performance of 24 HC offices in relation to service to the public was examined and recorded under one of the thirteen COL criteria in the 2006-2007 annual HC report card. The annual report refers to this audit and a recommendation regarding the 37 institutions.
  • Audit of direct health care services delivered by four federal institutions, including Health Canada. The report that came out of this audit was published in July 2007. It contains six recommendations relating to HC and may be consulted.
  • The Office of the Commissioner of Official Languages (OCOL) used the results of the 2005 Public Service Employee Survey to evaluate the level of satisfaction of minority personnel working in areas designated bilingual for purposes of language of work. The results are pre sented in the report card of the institutions evaluated, in Chapter 4 of the annual report.

Audits conducted by the Canada Public Service Agency (CPSA - formerly PSHRMAC):

  • The Canada Public Service Agency presented the preliminary report on its audit of communications with the public and of service to the public in both official languages in four Health Canada offices-three in Alberta and one in Ontario. The final report has not yet been delivered.
  • Audit of service to the public in both official languages: Three Health Canada service points in British Columbia were the subject of this audit done by the Agency in 2005. In 2006, a departmental action plan addressing the three recommendations was sent to the CPSA.

The audit report is available at this location



Internal Audits or Evaluations

Internal Audits completed by Health Canada in 2006-07

Evaluations completed by Health Canada in 2006-07

  • Bovine Spongiform Encephalopathy I and II Initiatives - Formative Evaluation
  • Building Public Confidence in Pesticide Regulation and Improving Access to Pest Management Products Horizontal Initiative - Formative Evaluation of the Horizontal Initiative
  • Canada's Drug Strategy - Interim Year-Two Risk-Based Evaluation
  • Canada Prenatal Nutrition Program - First Nations and Inuit Health Branch - Evaluation Report
  • Federal Tobacco Control Strategy - Summative Evaluation of the First Five Years 2001-2006
  • Health Canada's Evaluation and Performance Measurement Functions, Review of Natural Health Products Research Program - Formative Evaluation
  • Synthesis of Findings of 2005-2006 Health Canada Evaluations Departmental Audit and Evaluation Committee approved Evaluation Reports

Link to Treasury Board of Canada Secretariat Audit and Evaluation Database



Implementation of the Federal Accountability Act and Treasury Board's 2006 Internal Audit Policy

The Federal Accountability Act, which was granted Royal Assent in December 2006, creates, for the first time, a legislative requirement for deputy heads to establish and adequately resource departmental audit functions. This Act provides a legislative basis for the Audit and Accountability Bureau's (AAB) actions to implement Treasury Board's 2006 Internal Audit Policy, which took effect on April 1, 2006.

AAB has continued to prepare for the implementation of Treasury Board's 2006 Internal Audit Policy:

  • implementation of the new independent Departmental Audit Committee, with external membership, is planned for 2007-08;
  • expanded audit requirements of the Office of the Comptroller General (OCG)have been incorporated into the Health Canada Multi-Year Risk-Based Audit Plan;
  • AAB has developed an Audit Charter, the AAB Code of Conduct, and performance and stakeholder management frameworks;
  • AAB has established comprehensive audit and quality assurance processes;
  • a follow-up process is in place for tracking progress on the implementation of audit recommendations;
  • AAB has hired 23 additional staff including qualified audit professionals;
  • a memorandum of understanding was established that sets out the framework under which AAB will conduct audits of grants and contributions programs in all Health Canada branches; and
  • AAB continues to be active in the various OCG Internal Audit Working Groups.

Table 14: Sustainable Development


Key goals, objectives, and / or long-term targets of the SDS

Health Canada's 2004-2007 Sustainable Development Strategy is comprised of three themes:

  1. Helping to create healthy social and physical environments;
  2. Integrating sustainable development into departmental decision making and management processes; and
  3. Minimizing the environmental and health effects of the Departments's physical operations and activities.

Under each theme are various objectives and targets. During 2006-2007 progress was made in all three areas.



How key goals, objectives, and / or long-term targets help us achieve our strategic outcomes

Health Canada has four Strategic Outcomes as set out in the 2007-08 RPP:

  1. A strengthened knowledge base to address health and health care priorities;
  2. Access to safe and effective health products and food and information for healthy choices;
  3. Reduced health and environmental risks from products and substances and safer living and workingenvironments; and
  4. Better health outcomes and reduction of health inequalities between First Nations and Inuit and other Canadians.

Targets established under theme one directly support all four Strategic Outcomes. Targets under theme two also support the full range of outcomes, although primarily by strengthening the knowledge base and, in turn, management and decision making practices. Theme three supports the greening of HC operations and activities.



Targets and Progress

Health Canada has been successful in meeting most of the commitments it set out to achieve in SDS III, and has identified activities that were integrated into SDS IV to support the completion of the remainder of SDS III targets. For detailed progress information on each specific target of SDS III, see Health Canada's Sustainable Development Strategy 2004-2007: Becoming the Change We Wish to See Final Report on Accomplishments 2004-2007. To obtain a copy of this report please contact the Office of Sustainable Development, Health Canada, at osd@hc-sc.gc.ca or (613)954-3859.

Theme 1 Accomplishments

The objectives and targets under this theme focussed on accelerating the creation of social and physical conditions that maintain and enhance population health.

Some of our key accomplishments in 2006-2007 to address these priorities included:

Health Canada successfully met its targets related to drinking water quality in Canada through development of Drinking Water Guidelines (target 1.1.1) in partnership with federal, provincial and territorial departments of health and environment, the development of a national protocol for addressing water-borne contamination and illness events, revising the Procedure Manual for Safe Drinking Water in First Nations Communities South of 60 and developing a risk assessment tool for drinking water in First Nations communities.

Health Canada worked with other federal departments to determine the vulnerability of Canadians to climate change impacts through selected case studies, methods development and literature review (target 1.1.4). A synthesis report has been developed and the final version is planned for release in November 2007.

Health Canada developed and updated science-based guidelines and standards to improve the safety of the food supply and reduce food-borne illness (target 1.1.5), The Department also began implementation of the Aboriginal Health Transition Fund to devise new ways to improve, integrate and adapt health services to better meet the needs of all Aboriginal peoples (target 1.2.2).

Significant progress was realized by the Pest Management Regulatory Agency (PMRA) in re-evaluating registered products to ensure they meet current safety standards. Proposed regulatory decisions were published for 14 pesticide active ingredients, while regulatory decisions were finalized and published for 17 pesticide active ingredients. In collaboration with Agriculture and Agri-Food Canada, PMRA constructed a website to report on risk reduction projects for priority crops (target 1.1.7).

Theme 2 Accomplishments

The objectives and targets under Theme 2 were designed to broaden Health Canada employees' knowledge of sustainable development issues and provide practical tools for integrating SD into all decision-making, programs, and policies. Work continues on integrating SD into the planning processes at the Departmental, Branch, Regional and Agency levels, to ensure that SD is not considered an “add-on” to overall operations.

Efforts in SDS III 2004-2007 focused on development and delivery of Sustainable Development (SD) training and communication tools to new and existing HC employees in order to raise awareness and improve integration of SD (targets 2.1.1 & 2.1.2). Over 200 staff were trained in Strategic Environmental Assessment (SEA) preparation and their responsibilities under the Cabinet Directive on SEAs. Health Canada completed a detailed SEA on the Government's Chemicals Management Plan.

Health Canada has drafted an SD Policy Lens, which will undergo a pilot test in 2007, with the aim of improving SD considerations embedded in policies, plans and programs.

Theme 3 Accomplishments

The objectives under this theme strengthened Health Canada's commitment to decrease adverse environmental impacts resulting from the Department's operations and to promote our social responsibility in communities with Health Canada facilities.

Targets focused on greening of government operations and included providing more information to assist managers and employees when they conduct their daily activities and operations, through the production of two departmental guidebooks: Making a Difference in Our Facilities and Our Environment: A Guide on Environmental Management Best Practices for Health Canada and Agency Facilities; and Making a Difference: A Departmental Guidebook on Pollution Prevention for Health Canada and Agency Employees (targets 3.1.1 & 3.2.1). Health Canada continued to follow up, implement and report on recommendations outlined in its guidebook to improve the management of environmental impacts at its laboratories and health facilities as part of its Environmental Management System (target 3.1.3).

Best practices and initiatives on SD were implemented in the regions including practising zero-waste catering, supporting fair trade products, using photocopy and printer paper with at least 30 percent post-consumer content, and green procurement (target 3.2.3).



Adjustments
In April 2006 the federal government launched a new policy on Green Procurement. This policy encourages the selection of goods and services that are the least likely to have a negative impact on the environment during their entire 'life cycle' (production, usage and disposal). Health Canada has begun implementing this policy across the department by collecting baseline information, communicating the policy and tools available to assist employees to implement the policy and by including specific Green Procurement targets into SDS IV. The Department will continue to report progress annually toward implementing this policy.

Health Canada considers the SDS to be a living document that evolves over time in response to emerging opportunities and to formal recommendations and audits. Although considerable progress was made in reaching the objectives and targets in SDS III, two targets (1.1.5 and 2.1.5) were carried over to the next strategy, SDS IV, as they were not fully met within the 2004-2007 period.

SDS III had a stronger performance management framework than previous strategies. A generic example results chain was developed to outline the logic and expected outcomes for SDS III, and measure performance against indicators. However, while some targets fit well within the results chain, others did not. To address performance measurement issues in SDS IV, a concerted effort was placed on ensuring targets are “SMART”: Supportive of strategic themes and specific; Measureable; Action-oriented and achievable; Resourced (i.e. human and fiscal allocations) and relevant; Time-bound by deadlines and/or criteria. This will ensure a simple and accountable system of measuring progress. Each objective and target is associated with a clear and measurable indicator which will provide a reliable estimate and whether the target has been reached.


Table 15 and 16

Detailed information on Procurement and Contracting (Table 15) and Service Improvements (Table 16)

Table 17: Horizontal Initiatives


Name of Horizonatal Initiative
  1. Canada's Drug Strategy
  2. Federal Tobacco Control Strategy
  3. Federal Strategy on Early Childhood Development for First Nations and Other Aboriginal Children
  4. Building Public Confidence in Pesticide Regulation and Improving Access to Pest Management Products
  5. Mental Health Support Program

Supplementary information on Horizontal Initiatives


Table 18: Travel Policies


Comparison to the TBS Special Travel Authorities
Health Canada follows and uses the TBS Special Travel Authority Parameters.


Comparison to the TBS Travel Directive Rates and Allowances
Health Canada follows and uses the TBS Travel Directive Rates and Allowances.

Table 19: Storage Tanks

Supplementary information on storage tanks can be found here.