ARCHIVED - Agriculture and Agri-Food Canada

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Section 1 - Departmental Overview

Minister's Message

Canadian farm families are the backbone of this great country, driving our jobs, exports and economic growth and sustaining us with healthy, wholesome and diverse food for our tables.

Since coming to office, this government put farmers first - because when farmers succeed, processors, exporters and retailers succeed, and Canadian farm families produce the highest quality food in the world.

In June 2007, federal, provincial and territorial agriculture ministers agreed in principle on Growing Forward, the new policy framework for Canada's agriculture, agri-food and agri-based products industry.

The vision of Growing Forward is a profitable and innovative agriculture, agri-food and agri-based products industry that seizes opportunities in responding to market demands and contributes to the health and well-being of Canadians.

Discussions leading to Growing Forward were based on the principles of close consultations with producers and productive, respectful relationships with the provinces and territories. In November, federal, provincial and territorial ministers agreed to continue non-business risk management (BRM) programs under the previous policy framework - the Agricultural Policy Framework (APF) - for up to one additional year, starting April 1, 2008. This will make for a smooth transition to Growing Forward, provide certainty to farmers, and enable them to have the voice they deserve in program design. It is worth noting that in July 2008 my provincial and territorial counterparts and I announced $1.3 billion in funding for programs under Growing Forward.

As part of the new policy framework, at the end of 2007 we signed agreements with provincial and territorial governments to replace the Canadian Agricultural Income Stabilization, or CAIS, program with new business risk management programs which are more responsive, predictable and bankable.

The new suite of BRM programs is already providing significant assistance to the livestock sector. From late 2007 through 2008, nearly $1.5 billion in cash payments is expected to flow to livestock producers through existing and new programs. These programs have been designed based on ideas put forward by producers.

In 2007-08, we worked closely with livestock producers to help them weather a 'perfect storm' of pressures on their industry. In February, legislation was passed that made an estimated $3.3 billion available to livestock producers under the Advance Payments Program. As of August 8, 2008, over $300 million has been advanced to livestock producers through the improved emergency and standard advance provisions of the program.

We also announced $50 million for the Cull Breeding Swine Program to assist hog farmers with reducing the supply of breeding stock and adjust to market realities. To date, farmers have received $38 million in 2007-08 under the program, and a further $12 million is expected to be paid in 2008-09. This government is also contributing $76 million over four years to combat disease and enhance prosperity and stability in the hog sector. The first phase of this funding, the $27-million Circovirus Inoculation Program, reimburses eligible farmers up to 50 per cent for diagnostic testing and vaccination of hogs exposed to porcine circovirus-associated diseases (PCVAD2). Funding under this phase began in 2007-08 and will continue in 2008-09.

We supported our producers on the international stage as well, helping our livestock producers sell their high-quality product in markets that had been closed due to Bovine Spongiform Encephalopathy (BSE).

Newly reopened markets such as the United States, Russia, Indonesia, Taiwan, Egypt, Mexico, and other nations are now importing Canadian beef and cattle.

At the World Trade Organization (WTO) agriculture negotiations, we continued to push for an aggressive outcome that will eliminate export subsidies, reduce trade distortion, and provide real and substantial improvements in market access.

While the delay in the completion of the WTO agriculture negotiations is disappointing for Canada, this government remains committed and will continue to advance our interests for the benefit of all Canadian farm families.

In the meantime, this government will continue to work closely with the agriculture industry, including exporters, with a view to creating new opportunities and achieving a fairer international trading environment, including through regional and bilateral initiatives. In 2007-08, we signed agreements with the European Free Trade Association and Peru which will provide real opportunities for our agri-food exporters.

This government supports the interests of our export-oriented and supply managed industries. We have continued to demonstrate our support for supply management through other concrete actions as well. For example, we have taken action under GATT Article 28 to limit imports of low-duty milk protein concentrates through a tariff-rate quota.

We continued to stand up for grain producers, introducing changes to the Canada Grain Act in Bill C-39 that would streamline regulation to reduce costs and improve the competitiveness of the grain sector.

We pressed hard for marketing freedom for Western grain producers by introducing Bill C-46, amendments to the Canadian Wheat Board Act that would clear the way for barley marketing freedom and introduce a requirement respecting commercial dispute resolution. We will continue to fight for marketing choice as the majority of farmers have clearly indicated their desire to have marketing freedom.

We helped farmers find new markets through our balanced approach to biofuels, by investing in programs to help farmers capture new value. Through Bill C-33, which was introduced in December 2007 and received Royal Assent in June 2008, this government is taking steps to regulate the use of biofuels. While 95 per cent of our farmland is still feeding consumers in Canada and around the world, this Bill will create new opportunity for farmers and cleaner-burning fuel for the environment.

The Government of Canada is committed to building a sustainable and environmentally conscious agricultural sector. While working with our provincial and territorial partners, we have helped farmers improve their environmental farming practices. Successful programs - such as the Environmental Farm Planning Initiative - have received an overwhelming amount of support from Canadian farmers.

Today's consumers are increasingly interested in food products containing health-enhancing ingredients. This growing demand provides farmers with new market opportunities for their flax, blueberry, pulse, soy and other crops. Through targeted investments in research areas like functional food and nutraceuticals, this government has helped farmers capture new market opportunities.

Farmers asked for workable, bankable business risk management programs for Canadian farmers, and we delivered.

In late December, we began delivery of $600 million to kickstart new AgriInvest accounts. AgriInvest, one of the new business risk management programs replacing CAIS, gives farmers predictable and bankable support as well as the flexibility to invest for the future or underwrite current income pressures.

Farmers also asked us to strengthen the communities where they live, which are essential to farmers. That's why we're standing up for rural Canada through the great work done by our Rural and Co-operatives Secretariat.

We invested in innovation as a cornerstone of competitiveness through programs such as Agri-Opportunities - a $134 million program to help get new agri-based products, processes and services off the drawing board and out in the field, growing opportunities for the industry.

As Minister of Agriculture and Agri-Food, I consider it a privilege to work to address the current issues facing the section, while striving to create opportunities for the long run. Thanks to my farming roots and experience in public life, I know personally what agriculture means to the Canadian economy and the quality of life of our citizens. I am proud of the good people working in the partner organizations in the Agriculture and Agri-Food (AAF) Portfolio - Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, Farm Credit Canada, the Canadian Grain Commission, the Canadian Dairy Commission and the National Farm Products Council. We have a common mission and all share my appreciation for the place of our farmers in the fabric of this nation.

I look forward to working with my colleagues, with producers and with Canadians to build a bright future for this great sector.

Since coming into office, this government has delivered real results for Canadian farmers. Our achievements on Growing Forward are proof of our commitment to realizing a more profitable, innovative and market-driven industry, one that is better able to manage risks and contribute to the health and well-being of Canadians.

Gerry Ritz, P.C., M.P.,
Minister of Agriculture and Agri-Food
and Minister for the Canadian Wheat Board

---

Management Representation Statement

We submit for tabling in Parliament the 2007-08 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 2007-2008 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 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 Public Accounts of Canada.

Yaprak Baltacioglu
Deputy Minister

Liseanne Forand
Associate Deputy Minister

About Agriculture and Agri-Food Canada

Raison d'Être

AAFC is an economic and science-based department that works to ensure Canada's agriculture and agri-food sector is able to compete in international and domestic markets to derive economic returns to the sector and the Canadian economy as a whole. Through its work, the department strives to help the sector maximize its long-term profitability and competitiveness.

The department's work is concentrated in areas of core federal jurisdiction, including supporting agricultural and agri-food productivity and trade, stabilizing farm incomes, and conducting research and development. The minister of agriculture and agri-food is also responsible for co-ordinating federal rural development efforts to enhance the quality of rural life, and for facilitating economic and social development through co-operatives.

With the development and implementation of the joint federal, provincial and territorial Agricultural Policy Framework (APF), governments recognized that a comprehensive and co-ordinated strategy was needed to ensure future profitability, sustainability and competitiveness for Canadian agriculture and agri-food.

The framework provided a stable platform of policies and programs to help the sector meet its challenges, and make the most of its opportunities. It established a new policy direction for governments and industry by enabling a full shift towards a whole-farm approach.

AAFC's program activities, based on the vision-driven APF, form a cohesive action plan which, together with the work of the agriculture and agri-food sector, provides benefits for all Canadians, including:

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

AAFC provides information, research and technology, and policies and programs to achieve three strategic outcomes. These three strategic outcomes are described in the following table.

AAFC's Strategic Outcomes

Strategic Outcome	Description
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
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
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

The Agriculture and Agri-Food Portfolio

In addition to AAFC, there are five other organizations that make up what is known as the agriculture and agri-food portfolio:

• the Canadian Dairy Commission (CDC), which oversees pricing, policy co-ordination and marketing for the Canadian dairy sector;
• the Canadian Food Inspection Agency (CFIA), which delivers all federal inspection services related to food, animal health and plant protection;
• the Canadian Grain Commission (CGC), which is responsible for grain quality and quantity assurance, research, and producer protection;
• Farm Credit Canada (FCC), which delivers financial services to all sectors of agriculture -- primary producers, value-added businesses and suppliers; and
• the National Farm Products Council (NFPC), which supervises the operations of national marketing agencies or promotion and research agencies established under the Farm Products Agencies Act.

The Minister is also responsible for the Canadian Wheat Board (CWB), which markets wheat, durum wheat and barley grown in Western Canada around the world, and the Canadian Pari-Mutuel Agency, which regulates and supervises pari-mutuel betting on horse racing at racetracks across Canada. Additional information about the organization of AAFC is provided in Section IV (Other Items of Interest) of this report.

AAFC's Program Activity Architecture

AAFC's Program Activity Architecture (PAA) provides the basis for reporting to parliamentarians and Canadians on the alignment of its resources, program activities and results. The PAA is an inventory of all programs and activities undertaken by AAFC and explains how the department's program activities contribute to the three previously described strategic outcomes. The PAA also includes corporate functions, or internal services, that support the delivery of AAFC's programs and the achievement of its strategic outcomes. The costs of these services are prorated to the program activities that contribute to AAFC's strategic outcomes. AAFC's PAA is depicted in the following table.

AAFC's 2007-08 Program Activity Architecture

Strategic Outcomes
Security of the Food System	Health of the Environment	Innovation for Growth
Program Activities
Business Risk Management	Environment	Innovation and Renewal
Margin-based Programs Net Income Stabilization Account and Other Business Risk Management Programs Disaster Programs Insurance Programs Financial Guarantee Programs AgriInvest	Direct On-Farm Programming Pest Management Programs Environmental Health Science National Land and Water Information Service Land and Water Stewardship Community Pastures Program	Science Policy and Co-ordination Agriculture Transformation Programs Renewal Programs Sustainable Production Systems Bioproducts and Bioprocesses Office of Intellectual Property and Commercialization Matching Investment Initiative
Food Safety and Food Quality		Markets and International
Food Safety and Food Quality Programs Food Safety and Food Quality Science		International Trade Agreements (WTO, etc.) Canadian Agriculture and Food International Program International Science Co-operation Technical Trade International Capacity Building Sector Development and Analysis Branding Management / Value Chain Round Tables Market Access and Market Development Trade Disputes Regional Operations
Markets and International		Rural and Co-operatives Secretariats
International Trade Agreements (WTO, etc.) Canadian Agriculture and Food International Program International Science Co-operation Technical Trade International Capacity Building Sector Development and Analysis Branding Management / Value Chain Round Tables Market Access and Market Development Trade Disputes Regional Operations		Rural Co-operatives
National Farm Products Council		Canadian Pari-Mutuel Agency
Internal Services
Internal Services (management and oversight, human resources management, financial management, etc.) support all Program Activities and Strategic Outcomes

Alignment to Government of Canada Outcomes

In accordance with the whole-of-government framework, AAFC contributes to Government of Canada outcomes through its strategic outcomes and program activities as shown in the following table.

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	Business Risk Management Food Safety and Food Quality Markets and International National Farm Products Council
Economic: An Innovative and Knowledge-Based Economy	Innovation for Growth	Innovation and Renewal Rural and Co-operatives Secretariats
Economic: A Fair and Secure Marketplace	Innovation for Growth	Canadian Pari-Mutuel Agency
Economic: A Clean and Healthy Environment	Health of the Environment	Environment
International: A Prosperous Canada through Global Commerce	Innovation for Growth	Markets and International

Summary of Resources and Performance Status

Financial Resources

2007-08
Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
2,754.2	3,541.1	3,438.8

Human Resources

2007-08
Planned FTEs*	Actual FTEs	Difference
6,564	6,702	(138)

*Full-Time Equivalents

Summary of Performance Status

The following summary table shows the department's assessment of its performance in accordance with the departmental priorities and expected results identified in the 2007-2008 Report on Plans and Priorities (RPP). However, the department's 2007-2008 RPP included some performance information that was determined by AAFC and TBS to be at a level (i.e. expected results at the sub-program activity level and lower) that is too low for effective reporting. As part of an ongoing effort to improve public reporting by AAFC, all performance data in this DPR has been aligned with high-level, meaningful expected results at the Program Activity level, based on information from the 2007-2008 RPP. A table detailing this alignment is available online.

Performance Status by Priority

Name	Type	Performance Status
1. Business Risk Management	Ongoing	Met
2. Food Safety and Food Quality	Ongoing	Met
3. Markets and International	Ongoing	Met
4. National Farm Products Council	Ongoing	Met
5. Environment	Ongoing	Met
6. Innovation and Renewal	Ongoing	Met
7. Rural and Co-operatives Secretariats	Ongoing	Met
8. Canadian Pari-Mutuel Agency	Ongoing	Met

Summary of Planned and Actual Spending

($ millions) - Net
Security of the Food System
Program Activities by Strategic Outcome	Type	Planned Spending	Actual Spending	Expected Results and Performance Status
Business Risk Management	Ongoing	1,518.9	2,223.6	enhanced producers' capacity to manage risk increased sector viability and profitability Performance status: Met
Food Safety and Food Quality	Ongoing	119.4	113.3	minimized risk and impact of food-borne hazards on human health increased consumer confidence and improved ability of the sector to meet or exceed market requirements for food products increased value-added opportunities through the adoption of food safety, food quality and traceability systems Performance status: Met
Markets and International (70%)	Ongoing	78.5	80.5	expanded international opportunities for the Canadian agriculture and food sector Performance status: Met
National Farm Products Council	Ongoing	3.8	3.7	agency operations work in the balanced interest of all stakeholders farm products marketed effectively disputes resolved industry and stakeholders informed regarding supply management opportunities for the establishment of new promotion-research agencies pursued efficient, transparent and responsible management Performance status: Met
Total Security of the Food System		1,720.7	2,421.2
Health of the Environment
Environment	Ongoing	308.5	444.5	environmental sustainability of the industry achieved by preserving the quality and availability of resources – air, water, soil, and biodiversity – for present and future generations Performance status: Met
Total Health of the Environment		308.5	444.5
Innovation for Growth
Innovation and Renewal	Ongoing	664.3	511.5	industry equipped with new business and management skills, bioproducts, knowledge-based production systems and strategies to capture opportunities and manage change Performance status: Met
Markets and International (30%)	Ongoing	33.7	34.5	expanded international opportunities for the Canadian agriculture and food sector Performance status: Met
Rural and Co-operatives Secretariats	Ongoing	27.0	28.1	better co-ordination of government policy responses to rural community priorities increased capacity of co-operatives to meet the needs of Canadians government policies, programs and services increase opportunities, mitigate barriers and enhance capacity for co-operative development Performance status: Met
Canadian Pari-Mutuel Agency	Ongoing	-	(0.9)	enhanced capacity to manage risk in pari-mutuel betting, thereby helping to protect the betting public against fraudulent activities Performance status: Met
Total Innovation for Growth		725.0	573.2
Total		2,754.2	3,438.8

The figures in the above tables have been rounded to the nearest millions of dollars.

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

Overall Departmental Performance

Operating Environment and Context

Canada's farmers, farm families and farming communities are the heart of Canadian agriculture and agri-food, and play an important role in Canada, from both an economic and social perspective. The agriculture and agri-food sector, which comprises primary agriculture, food and beverage processing, and distribution, including retail and food service outlets, accounts for approximately eight per cent of the country's Gross Domestic Product. In 2007, it generated $142.2 billion in consumer sales in Canada, exported more than $35.5 billion in agriculture and food products (including seafood), and contributed almost $7.9 billion to Canada's overall trade surplus. It employs about two million Canadians, representing one of every eight jobs in the country.

Ensuring the sector has the tools it needs to continue this contribution is key to maximizing its long-term profitability and competitiveness, while meeting growing market and consumer demands for safe food and environmental stewardship.

Production risks

Agricultural production carries inherent risk and uncertainty. There are several factors posing increasing threats to the ongoing capacity of the sector to produce, including the weather, long-term climate change, pests and disease, increased risk of pandemics affecting both animals and people, and increased competition for land and water for agriculture use.

Such threats underline the importance of focusing on biosecurity and the need to proactively prepare for and prevent the impact of potential threats before they occur, while strengthening the capacity of the sector to respond to and recover from crises when they do.

Market and trade conditions

Canada produces far more agriculture and food products than it consumes. As a result, the agriculture and agri-food sector and the country rely heavily on export markets. Canada has traditionally found great success internationally, based on the quality and diversity of the goods it produces.

Several factors are limiting the ability of Canadian producers to compete in the global market. Competition from low-cost suppliers, coupled with more complicated and varied consumer tastes, makes meeting market demands increasingly challenging for the various segments of the value-chain.

Some factors impacting the Canadian agriculture and food sector now, and that could continue to have an impact in future years, include:

• an increasingly liberalized international trading environment;
• the ongoing impact of the strength of the Canadian dollar on traded commodities and agricultural inputs;
• increased prices for agricultural inputs such as feed, fertilizer and fuel;
• increased competition from low-cost and high-subsidy countries in bulk commodity markets, and a declining market share for some sectors in Canada;
• agricultural and other policies implemented by other countries;
• a domestic labour shortage for on-farm help;
• increased innovation and investment abroad requiring an accelerated pace of innovation for the agriculture and agri-food sector in Canada; and
• an increasing demand from domestic and international consumers for healthy and environmentally sustainable food and related products, with certification playing an increasingly important role for ensuring market access (e.g. organics).

There is a need to continue providing the tools and information necessary to encourage innovation and adaptation that enables the sector to achieve lower costs, penetrate higher-value markets and achieve greater profitability. Given that Canada relies heavily on exports for the success of the sector, governments also need to work to ensure continued access to existing markets and to gain access to new ones.

Consumer preferences and demands

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. In addition, the potential for production beyond food opens new possibilities such as biofuels, industrial materials and other bioproducts.

Food safety is now a prominent consumer concern. Today's integrated markets and highly efficient supply chains mean products are rapidly and widely distributed, a boon for consumers. The downside is that any food safety flaw can have broad and quick repurcussions in the consumer market.

Increasing innovation

To excel in today's global marketplace, Canada must capitalize on its natural endowments as well as its strengths: the skills and knowledge of its people; its research and development capacity; and its strong production and regulatory systems. Segments of the sector are already competing successfully and are at the forefront of innovation, but that competitive success will need to expand to the sector as a whole.

There is a need for continuous investment in innovation in terms of adoption of new technologies, development of business skills, and understanding of market requirements to enable producers and enterprises to develop new competitive products, lower costs, penetrate new markets and achieve greater profitability. The sector also needs to focus on product differentiation and value-added opportunities, such as those associated with the bioeconomy, to build a sustainable competitive advantage.

The entire bio-economy holds great promise for Canada's agriculture and agri-food sector. The decreasing cost of biomass, advances in process technology and new production techniques that maintain yield and protect the environment, allow sustainable mining of biomass as an industrial feedstock. These innovative technologies are driving new industries in Canada that generate bio-energy and bioproducts. The agriculture and agri-food sector will be a major contributor of the biomass needed to fuel this emerging industry.

The Government of Canada's agenda

AAFC's priorities are also linked directly to the broader agenda and policy direction of the Government of Canada, including:

• Advantage Canada;
• the Federal Science and Technology Strategy;
• the Renewable Fuels Strategy; and
• the Speech from the Throne, notably the pillars building a stronger federation, providing effective economic leadership and improving our environment.

Shared jurisdiction

Recognizing the shared jurisdictional nature of agriculture in Canada, it is important that AAFC works closely with provincial and territorial partners to develop effective policies and programs for the sector. Growing Forward will involve continued collaboration among federal, provincial and territorial governments in support of shared priorities for the sector's long-term growth and competitiveness.

In addition, jurisdiction for several factors influencing the competitiveness of the sector, such as international trade and regulatory reform, lies outside of AAFC's mandate. The department works with its portfolio partners and other federal departments to ensure positive outcomes on these and related issues to support the long-term competitiveness and prosperity of the sector.

Some of the information included in this report on federal-provincial-territorial programs has been provided to AAFC by third-party delivery agents.

Overview of Performance

Strategic Outcome - 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

Program Activity - Business Risk Management

Farming in Canada requires a comprehensive and proactive approach to managing risk. Through business risk management (BRM) programming in 2007-08, AAFC, together with provincial and territorial governments and industry, worked to enhance producers' capacity to manage risk, and increase the sector's viability and profitability, contributing to the achievement of the Government of Canada's Strong Economic Growth outcome area.

Under the APF, the Government of Canada agreed to invest $1.1 billion every year for five years in BRM programs that directly assisted farmers in managing business risks, such as those posed by weather, disease and changing market conditions. BRM was based on two core programs: a margin-based program called the Canadian Agricultural Income Stabilization (CAIS) program and Production Insurance (PI). These programs were designed to work together to help producers manage the business risks associated with farming.

In 2007-08, AAFC, together with the provinces, completed the design of a new suite of BRM programs to address concerns identified by producers. Federal, provincial and territorial governments signed agreements in 2007-08 to launch the new suite of BRM programs for the 2007 program year to replace the CAIS program. The suite includes a producer account into which both governments and producers make deposits, and separate income stabilization and disaster components. In addition, federal, provincial and territorial governments are continuing to explore extending coverage under PI to livestock and additional horticulture crops.

The implementation of the Advance Payments Program in 2007-08 resulted in more money being available to farmers in the form of advances of up to $400,000, with the first $100,000 interest-free, to help offset input and crop storage costs. The department also developed recommendations on how the Farm Improvement Marketing and Cooperatives Loan Act could be adapted to better support beginning farmers, intergenerational farm transfers and agricultural co-operatives.

Program Activity - Food Safety and Food Quality

Canadians in general have a high degree of trust in Canada's food regulatory system and are confident that it will protect them from food borne illnesses. At the same time, consumers here and abroad are increasingly seeking more information and greater assurances about the safety, quality and nutritional value of the food they eat. Producers and exporters who can demonstrate a high-calibre food safety regime can use this to establish a competitive edge in global and domestic markets.

In 2007-08 AAFC generated new scientific knowledge through its research programs and provided support to help the agri-food industry integrate this knowledge to develop new competitive products for national and international markets, contributing to the Government of Canada's Strong Economic Growth strategic outcome. The department continued to work with its portfolio partners, such as the CFIA, and other federal organizations, provincial and territorial governments, and producers and processors, to uphold Canada's reputation for food safety, and ensure Canadians and other consumers continue to get the nutritious, high-quality food and food products for which Canada is known. The department also increased its focus on the links between agriculture, agri-food and health.

AAFC continued to work through the Canadian Food Safety and Quality Program to facilitate industry momentum in developing and implementing government-recognized food safety and food quality process control systems throughout the food continuum.

The department also worked with the CFIA to improve the safety and security of the food system through detection, monitoring and control of food hazards and to mitigate risks. It continued to play a lead role in developing scientific support and integrated management strategies to enhance quality and value, while contributing to the traceability of Canada's food products through every link of the chain.

Program Activity - Markets and International

For the sector, continued success in world markets can be further enhanced by international recognition of Canadian actions in food safety, animal and plant health, traceability, environmental stewardship, innovation and investment in new products. Not only will this approach benefit those Canadians earning their livelihoods from agriculture and agri-food, it will further enhance the sector's important contribution to Canada's positive trade balance, for the benefit of all Canadians.

In 2007-08, the Government of Canada continued to consult with provinces and the full range of agriculture and agri-food industry stakeholders about how best to achieve Canada's agricultural trade policy objectives. The department pursued a multi-faceted trade policy agenda, including securing and enhancing market access through trade negotiations at the WTO, advancing the development and implementation of an enhanced regional and bilateral trade agenda and addressing technical market access issues.

Furthermore, AAFC continued its work to advance the implementation of traceability within the agriculture and agri-food system, in collaboration with industry, and worked closely with provinces and the industry to further integrate the Canada Brand Promise into international market development strategies and activities to advance Canada's image in key markets abroad. This work contributed to the achievement of the Government of Canada's Strong Economic Growth strategic outcome.

Program Activity - National Farm Products Council

The National Farm Products Council (NFPC) is a unique quasi-judicial regulatory agency reporting to Parliament through the minister of agriculture and agri-food.

The Farm Products Agencies Act provides for the creation of national marketing agencies and promotion research agencies. The NFPC supervises these agencies by ensuring that they carry on their operations in accordance with the objectives set out in the Act. These agencies are: the Canadian Egg Marketing Agency, the Canadian Turkey Marketing Agency, the Chicken Farmers of Canada, the Canadian Hatching Egg Producers and the Canadian Beef Cattle Research Market Development and Promotion Agency.

Working with the agencies it supervises, the NFPC promotes more effective marketing of farm products in interprovincial and export trade. It also provides comprehensive advice to the minister of agriculture and agri-food and the government on all things relating to the establishment and operation of agencies under the Act.

In 2007-08, NFPC continued overseeing, promoting and strengthening the activities of the five national agencies it supervises in order to ensure that the supply management system for poultry and eggs as well as the check-off system for beef work in the balanced interests of stakeholders, from producers to consumers, contributing to the achievement of the Government of Canada's Strong Economic Growth outcome area.

Strategic Outcome - 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

Program Activity - Environment

In 2007-08, AAFC continued to work with provincial and territorial partners and industry on projects and policies designed to promote sustainable, economically viable and environmentally sound activities from the farm level and up the value chain, providing results under the Government of Canada's A Clean and Healthy Environment strategic outcome. Farmers are increasingly aware of means to promote environmental stewardship in ways that also help to drive down production costs. This work contributed to the achievement of the Government of Canada's goals on environmental sustainability of the sector and improved stewardship of soil, water, air, and biodiversity.

The department continued to support environmental farm plans beneficial management practices through financial and technical assistance, developed a water strategy on sustainable water use in agriculture, and worked to reduce the risks due to pesticides by developing commodity specific strategies and by making available new reduced-risk minor-use products.

The department worked on innovative policy options to achieve environmental goals under the next generation of agriculture and agri-food policy, including a biofuels strategy. It also fostered greater scientific collaboration among partners, and enhanced understanding of protecting the country's bioresources.

Lastly, the environment is an essential element that underpins the Canada Brand. The strong and demonstrable environmental achievements under the APF and being continued under the next generation of agriculture and agri-food policy will help build the value and strength of the Canada Brand. This will enable industry to better position itself globally.

Strategic Outcome - 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 and domestic global markets

Program Activity - Innovation and Renewal

Science generates knowledge on which the sector can build innovations to achieve greater job creation, profitability and competitiveness. Innovation transforms that knowledge into benefits for Canadians. It is the process by which ideas for new and improved products and services to meet Canadians' expectations are developed and commercialized in the marketplace.

Science and innovation are helping Canada become a leader in the bio-economy and application of bioproducts, assisting with new knowledge-based production systems, and developing strategies to capture opportunities and manage change.

In 2007-08, AAFC implemented and further developed its Science & Innovation Strategy by focusing science and innovation investment on national research priorities.

Traditional food and feed markets remain key to Canadian agriculture, but future success for the sector lies in more than food and food products. Significant opportunities for growth also exist for non-food products, such as biomaterials, biomedical products, biohealth products, bioenergy products, biochemicals, and biopharmaceuticals.

AAFC developed and implemented new partnership strategies with other federal departments and provincial, academic and industrial organizations for the benefit of all Canadians. These science partnerships will be promoted by the development and delivery of an outreach program. AAFC, together with its partners, also worked to develop complete innovation chains to transform scientific and technical knowledge and know-how into benefits for Canadians.

Through Renewal programming, AAFC helped foster continuous learning within the sector and helped ensure producers have access to the skills, knowledge and tools and business planning required to assess their situations, refine their goals, develop plans to capitalize on new opportunities, and increase farm profitability. This work contributed to the achievement of the Government of Canada's An Innovative and Knowledge-Based Economy strategic outcome.

Program Activity - Markets and International

In 2007-08, AAFC continued to implement its branding strategy, designed to build on the sector's strengths and on Canada's reputation as a supplier of safe and high-quality food and food products by promoting recognition of our food safety, animal and plant health, and traceability systems and our commitment to environmental conservation. The department worked closely with the sector to implement this strategy, and develop other long-term strategies designed to bring increased market success to the sector.

The department worked to strengthen international market and development relationships, and implement international market engagement, international development and international scientific co-operation strategies, to help the sector continue to take advantage of new and existing export opportunities.

This work contributed to the Government of Canada's A Prosperous Canada through Global Commerce outcome area.

Program Activity - Rural and Co-operatives Secretariats

Rural

It takes an entire network of rural communities in Canada to support a resource-based sector like agriculture; without those communities the huge contributions of the sector would be reduced. To ensure the sector remains strong, rural issues and priorities must receive due attention and consideration when policies, programs and legislation are developed.

The Canadian Rural Partnership, created in 1997, is administered by AAFC's Rural Secretariat. Through the Secretariat in 2007-08 AAFC co-ordinated a government-wide approach to rural citizen engagement in support of rural policy and program development and implementation, through partnership initiatives among federal departments and agencies, other levels of government and rural stakeholders.

Co-operatives

Co-operatives have historically been an important model for community development and one of the cornerstones of local economies across Canada. Today, with combined assets of over $225 billion and 155,000 employees, co-operatives help Canadians meet their social and economic needs in areas such as retail, banking, housing and service operatives, credit unions, and caisses populaires across the country, engaging 70,000 volunteers providing services and products to over 11 million Canadians.

In 2007-08, AAFC's Co-operatives Secretariat worked to ensure co-operatives are considered in government policies and programs. The Secretariat also provided assistance and advice to groups that want to start new co-operatives or needed help to manage existing ones.

The department's work in Rural and Co-operatives provided results under the Government of Canada's An Innovative and Knowledge-Based Economy strategic outcome.

Program Activity - Canadian Pari-Mutuel Agency

Section 204 of the Criminal Code of Canada designates the minister of agriculture and agri-food as the individual responsible for the policy and regulatory functions pertaining to pari-mutuel wagering on horse races. This function is delivered through the Canadian Pari-Mutuel Agency (CPMA), a special operating agency within AAFC.

In 2007-08, the CPMA oversaw betting activity conducted by Canadian horse-racing associations to ensure they operated in the manner prescribed by the Pari-Mutuel Betting Supervision Regulations, and that statutory deductions and pay-out prices were calculated accurately. Through equine drug control programs, the Agency also continued to maintain an effective barrier to those who would attempt to influence the outcome of a race by administering prohibited substances to race horses. This work contributed to the achievement of the Government of Canada's An Innovative and Knowledge-Based Economy strategic outcome.

Furthermore, the Agency continued to develop proposals for modernizing the regulatory framework by which the conduct of pari-mutuel betting is supervised in Canada. Such a model will advance the key principles of improved efficiency and effectiveness, as described in the Cabinet Directive for Streamlining Regulations.

Growing Forward - A New Strategic Response

With the APF set to expire in March 2008, AAFC, its portfolio partners and provincial and territorial governments worked with stakeholders to develop Growing Forward, Canada's new policy framework for the agriculture, agri-food and agri-based products industry. Agreement in principle on the new framework was announced by federal, provincial and territorial agriculture ministers in June 2007, setting the stage for the signing of a federal-provincial-territorial framework agreement in 2008-09.

Growing Forward builds on the best of the APF, while also addressing the lessons learned from the previous policy framework. It builds on the ideas put forward during an extensive consultation process, including meetings held with a range of stakeholders from across Canada in May 2007 and February 2008. The Growing Forward vision is a profitable innovative industry that seizes opportunities in responding to market demands and contributes to the health and well-being of Canadians.

Our Management Priorities

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 new 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.

AAFC is also responding to the new Management, Resources and Results Structure (MRRS), which supports a common, government-wide approach to the collection, management and reporting of financial and non-financial performance information. The MRRS provides departments with the flexibility and discretion they need to design and manage their programs in a manner that best achieves results for Canadians. Through the MRRS, management and accountability, in accordance with the Management Accountability Framework (MAF), will be reinforced at AAFC.

Through its management priorities, AAFC aimed to meet and exceed expectations under the MAF and strengthen its accountability regime for 2007-08 and beyond.

People

In the Fourteenth Annual Report to the Prime Minister (2007), the Clerk of the Privy Council identified Public Service Renewal as a government-wide focus, with emphasis on the following priorities: Human Resources (HR) Planning; Recruitment; Employee Development; and Enabling Infrastructure. These Renewal priorities are cornerstones of AAFC's human resources strategies and activities.

Over the past few years, AAFC's HR management function has evolved, and will continue to evolve, from the traditional reactive, transaction-based model to one premised on a systematic, integrated approach.

HR planning is the foundation for building and sustaining capacity. The corporate HR Plan for 2007-09 articulates the department's business goals and aims to ensure that these goals are met through proactive people management strategies.

Recruitment strategies are based on current and projected program and operational requirements. Recruiting for careers - not just jobs - puts the right people in the right place at the right time and ensures the department has the people capacity to deliver on its commitments. AAFC is one of the top employers of post secondary students in the Public Service. In 2007-08, the department hired 775 students; 62 students have accepted our offer of permanent employment since April 1, 2007 (exceeding our commitment of 60).

Learning and development is another area where the department has renewed its focus and investment. Learning plans, learning programs and performance management all support effective HR Planning by identifying employee development needs and opportunities. AAFC is in the midst of putting in place an online performance management and learning plan system to accurately report on the number and quality of performance agreements and learning plans.

Notable improvements have been made to the department's enabling infrastructure. For instance, the introduction of Express Lane Staffing, a web-enabled portal for managers to submit staffing requests to HR, has significantly streamlined staffing processes, reducing overall time from request to offer by 50 per cent. This model is being adopted by other departments and was singled out by the Clerk as a government-wide best practice. Significant investment was also made in upgrading the department's Human Resources information management system, to comply with new reporting requirements and improve AAFC's capability to monitor progress through clearly defined business process documentation and accountabilities. The department also introduced a new electronic pay processing system that is integrated with other HR functions and eliminates the need for paper documentation.

In 2007-08, the department introduced an Official Languages Accountability Framework titled Embracing Official Languages - Official Languages @ AAFC is Everyone's Business. The Framework outlines the basis and elements for managing the department's obligations under the various parts of the Official Languages Act and the appropriate responsibility centres within AAFC that are accountable.

The accountability framework is a priority for AAFC. It will ensure the department embraces official languages and is compliant with its obligations as set out in the Official Languages Act by: monitoring and reporting on accountabilities; communicating the official languages environment/landscape; focusing on our performance objectives and results; embracing official languages responsibilities; and driving cultural change.

Financial Management and Strategic Planning

AAFC improved its Financial Management, as reflected in the 2007-08 MAF assessment, in which TBS recognized the department's progress and noted sound practices are in place to support commitment control policies, transfer payment management, accounts verification and receivables management. In addition, internal reporting was identified as timely and comprehensive.

The department continues to implement the Chief Financial Officer (CFO) model. A Corporate Analysis and Attestation Unit has been created to assist the CFO in the attestation function of all funding proposals. The internal audit function has been strengthened with the implementation of an External Audit Committee. The AAFC Audit Committee meets on a quarterly basis and provides independent advice to the Deputy Minister on the department's governance, risk management practices and controls. It also provides oversight of core areas of control and accountability and advises the Deputy Minister of opportunities to strengthen capacity and performance of the department's Internal Audit function and other areas key to good governance, including values and ethics and accountability reporting.

Improvements have been made in the area of financial budgeting and forecasting. Multi-year, integrated planning and budgeting is underway which supports more longer-term, strategic decision-making. In addition, changes in governance have led to improved financial management accountability for branch heads over their respective financial resources and collectively senior management is working to ensure that resources are directed to fund departmental priorities.

In 2007-08, AAFC's integrated business plans included human resources, information management, information technology, communications and executive performance agreements and were directly aligned with the department's strategic outcomes and Program Activity Architecture. The department reviews its strategic outcomes and Program Activity Architecture annually to ensure it continues to accurately reflect the mandate and vision of the department, while continuously improving the clarity and understanding. In 2007-08, AAFC completed an approved performance measurement framework (PMF) with corresponding targets. This PMF will be updated annually to reflect changes in the department, improvements from lessons learned and current developments in the area of results-based measurement.

Internal Client Services

Over the last year, AAFC continued to support the Government of Canada's Corporate Administrative Shared Services (CASS) initiative, including working closely with Central Agencies and other early adopter departments on an initial scoping for an Information Technology (IT) system that could be shared by others; on emerging Government of Canada HR processes; on designing a Government of Canada IT configuration that met operational needs and emerging processes; and on sharing lessons learned with other early adopters and with CASS.

In addition, AAFC has been sharing its IT expertise and upgrade lessons with interested organizations outside of the early adopters. Moreover it has made transition materials available to the cluster of other departments that have implemented similar IT solutions for their HR operations.

AAFC and the HR organizations in all of these departments and others continue to work together on standardizing HR business processes under the coordination of CPSA, as well as on sharing and aligning other HR tools that are not currently available within their core IT systems. These efforts are continuing in parallel to CASS activities.

In 2007-08, the Internal Service Standards project was linked with the External Service Standard initiative to ensure cohesion, completeness, integration and useful internal service standards. AAFC continues to work to establish consistent, measurable and realistic internal service standards in consultation with its clients. Existing internal service standards are being reviewed in light of the current operating environment; and areas without service standards will be analyzed to determine the appropriate service standards. Benchmarking, process mapping and other tools will be used to establish service standards in new areas.

Following TBS policy, AAFC developed a five-year Long Term Capital Plan (LTCP), setting out the department's direction and funding plan for the management of its capital assets over the five-year period from 2005-06 to 2009-10. The LTCP allows AAFC to retain or acquire only essential assets required to deliver programs efficiently, and manage its existing asset base while making appropriate changes to it with the resources that are available. It also provides a rationale for proposed expenditures and project approvals. The department's capital planning processes are fully integrated with the management of the programs served by the assets. Strategic priorities for capital projects are determined through consultation with program management.AAFC uses a rigorous and fully transparent annual priority ranking process.

The department is continuing to manage its new headquarters project within federal standards and in partnership with the CFIA and Public Works and Government Services Canada. Move-in will commence in 2008-09.

Information Management and Technology

Information Management (IM) and Information Technology (IT) are crucial enablers in the design and delivery of departmental programs, products and services, the support of departmental operations and decision making, and in doing business electronically with clients, stakeholders, employees and managers in a cost effective and efficient manner.

AAFC has established four strategic priorities for its IM and IT activities:

• Service to clients - Effective delivery of client-centered programs, services and information (e.g. Business Risk Management Service Delivery, National Land and Water Information Service);
• Advancing Information Management Culture - A pervasive culture for leveraging, sharing, managing information with associated competencies (e.g. data and record management);
• Enabling the Department to Function as an Enterprise - Effective support for enterprise management systems (e.g. corporate systems); and
• Management of IM & IT Assets - Sound management of information and technology assets (e.g. investment plan, business model).

In 2007-08, AAFC adopted an IM & IT strategic framework and began implementation of an integrated IM & IT business model to provide a structured, enterprise-wide approach for planning and investment. The model recognizes the value and the criticality of a modern functioning IM & IT infrastructure linking investments with departmental strategic directions and priorities. A key component of implementing the model is an enhanced governance structure where departmental assistant deputy ministers collectively make decisions on IM and IT assets.

AAFC also advanced the IM agenda by having a solid document and records management infrastructure, increasing education of the Privacy Act, initiating strategic discussions on managing program data, facilitating ongoing modernization and exploitation of the Internet, and implementing collaboration tools.

An IM and IT human resources strategy was also initiated to ensure skills and competencies match the work being done. An aspect of the human resource management is staff learning and development plans, with more than 90 per cent of IM and IT staff having a learning plan.

Corporate Management

The Emergency Management Act states that every minister is accountable to Parliament to: to i) identify the risks that are within or related to his or her area of responsibility, including those related to critical infrastructure, ii) prepare emergency management plans in respect of those risks, iii) maintain, test and implement those plans; and iv) conduct exercises and training in relation to those plans.

To this end, AAFC, with its portfolio partners, has developed the National Disaster Assistance Framework, to better manage and co-ordinate the sector-wide response to emergencies.

AAFC is also working collaboratively with the agri-food industry and other federal departments and agencies on advancing the National Strategy and Action Plan for Critical Infrastructure, and on pandemic planning for the agri-food sector.

Audit and Evaluation

In 2007-08, AAFC continued to implement the 2006 Internal Audit Policy, as required by the Federal Accountability Act. The Deputy Minister established an AAFC audit committee; it is a full maturity model with an external chair and all external members.

A multi-year (2008-09 through 2010-11) risk-based internal audit plan was developed for review by the external audit committee in April 2008.

Also in 2007-08, four "chapter evaluations" and two program evaluations were completed and approved by the Departmental Audit and Evaluation Committee: Chapter Evaluation of Business Risk Management Programs, Chapter Evaluation of Science and Innovation, Chapter Evaluation of Food Safety and Quality, Chapter Evaluation of Environment, and evaluations of Province-based Programs and Production Insurance. The evaluations provide performance information to support development of the next generation of agriculture and agri-food policy and other strategic initiatives.

Portfolio Collaboration

AAFC, together with its Agriculture and Agri-Food (AAF) Portfolio partners, continues to take an integrated approach to addressing major issues that cross organizational responsibilities and achieving effective policy development. For example, AAFC, along with the rest of the Portfolio, engaged in developing, and is now implementing, the Growing Forward multilateral framework.

Since 2001, AAF Portfolio coordination has advanced progressively, with particular emphasis on sharing information and expertise, collaborating on policy and program development and consolidating advice on cross-cutting issues. While fully respecting the individual organizations' legislated accountability requirements and mandates, these efforts have, in turn, translated into continued adoption of portfolio management best practices.

As well, AAFC, together with its Portfolio partners, has continued to strengthen its approach to annual planning and reporting to realize greater coherence among the organizations, while meeting the requirements of good corporate governance, transparency and management accountability.

Client-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 2007-08 the department:

• clarified that it respects client preferences for wrtitten and/or verbal communications and provided evidence of how service standards are communicated using these channels;
• for nine programs or services client satisfaction was measured through a specific survey or through the AAFC producer survey. In one additional case a measure of client satisfaction was done during an industry session;
• took remedial actions to correct failure points regarding Common Look and Feel (CLF) 1.1. In February 2008, 30.7 per cent of failures have been resolved. AAFC has an implementation plan for CLF2; and
• in response to an extensive audit by the Office of the Commissioner of Official Languages, drafted an Action Plan proposing actions such as: an awareness campaign; an Accountability Framework that describes roles and responsibilities; and others such as the distribution of Government of Canada pocket translator to all 6,630 AAFC employees; an AAFC Policy on Communications With and Services to the Public; and a presentation to AAFC's regional employees on their obligations to provide services in both official languages.

AAFC made significant progress in promoting citizen confidence in government, producing high levels of client satisfaction, demonstrating value for money to taxpayers and contributing to the achievement of public policy goals.

Service Standards

AAFC developed a strategy to implement service standards across all departmental programs which will fulfill the Government of Canada accountability requirements (including: Management Accountability Framework, Citizen Centred Service Component, User Fees Act, the Blue Ribbon Panel on Gs&Cs Recommendations and the forthcoming Policy on Service). Many standards can now be found on the AAFC web and results against standards are either communicated on the web or during meetings.

Client Satisfaction

AAFC developed a strategy to implement Client Satisfaction surveys based on the Common Measurement Tool (CMT) and will include all departmental programs over a three-year cycle. Implementation is targeted to begin in 2008-09. AAFC has measured client satisfaction through several means such as industry sessions, a complaint and redress mechanism and the the CMT ACAAF survey and AAFC Producer survey.

Plans were also developed to incorporate Service Standards and Client Satisfaction Surveys horizontally across the department, which will provide information to guide strategic plans and future activities to enhance departmental service. In addition, results of Service Standards and Client Satisfaction Surveys are being used to inform decision-making, enhance program management and better respond to client needs.

Service Inventory & Content Management

Through the development of a Federal Provincial Territorial Service Inventory, AAFC and its partners will have access to information on programs and services through an effective, easy to use electronic repository. It is hoped that this tool will aid in ensuring that Canadians have access to all federal, provincial and territorial programs and services through a "no wrong door" approach.

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