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Section II - Analysis of Program Activities by Strategic Outcome

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

A secure food system is one that is profitable and can be relied upon by consumers to provide the products they want and need. Through the Security of the Food System strategic outcome, AAFC, along with its portfolio partners the CFIA, CGC and CDC, aims to ensure Canada can continue to produce, process and distribute safe and reliable food.

Security of the Food System is based on ensuring farmers and food producers have the tools they need to manage business risks, maintaining and enhancing consumer confidence in the safety and quality of Canada's agriculture and agri-food products, and sustaining and expanding access to global markets.

To achieve results under the Security of the Food System strategic outcome in 2007-08, AAFC worked through the departmental program activities of Business Risk Management, Food Safety and Food Quality, and Markets and International. The National Farm Products Council also contributed to this strategic outcome.

Program Activity - Business Risk Management

Enhancing producers' capacity to manage risk, and increasing the sector's viability and profitability

Producers face the same business risks as others - financial, technological, market - but in addition have to deal with many potentially catastrophic risks from weather, pests and diseases. Business Risk Management (BRM) is designed to equip producers with the tools and capacity needed to manage risks and ensure viable and profitable farming operations. Governments across Canada agree that effective BRM programming is crucial to ensuring a more stable and profitable agriculture and agri-food sector. By being able to better mitigate risk, producers can focus on seeking out new opportunities to strengthen their ability to produce safe food and non-food products for Canadians and consumers around the world. This, in turn, helps improve the quality of life for all Canadians.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
1,518.9	2,285.7	2,223.6
Planned FTEs*	Authorities	Actual FTEs
947	N/A	1,168

*Full-Time Equivalents

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used.

Expected Results	Status
Enhanced producers' capacity to manage risk	Met
Increased sector viability and profitability	Met

In 2007-08, Agriculture and Agri-Food Canada measured progress against these expected results, in part, through the following indicators:

Performance Indicators	Progress in 2007-08
Level of variability of farm income over time (Current Canadian Net Cash Income as a % of average of previous five years)	2007	2006	2005	2004	2003
	113 %	92 %	100 %	98 %	90 %
Level of farm income over time (Average Canadian Net Cash Income) ($000)	2007	2006	2005	2004	2003
	35.3	29.3	30.1	28.8	25.6
Level of farm capital investments over time (Average Canadian Farm Net Capital Investment) ($000)	2005	2004	2003	2002	2001
	35.6	35.4	37.6	37.8	36.3

Historically, farm income varies with changing market prices and input costs, and production is often impacted by disease and weather events. Net cash income (NCI) is one measure of farm income and is defined as farm cash receipts (including program payments) less operating expenses, but excluding depreciation and change in the value of on-farm inventories.

NCI for Canadian farmers increased in 2007 to $6.22 billion after falling sharply in 2006 (see Table 1). The 2007 level was two per cent above the previous five-year average (2002-2006), which included the bovine spongiform encephalopathy (BSE) period and years of low grain prices. The target set for business risk management programming is to see net farm income be at least 80 per cent of the previous five-year average; the performance data over the 2003-07 period indicate aggregate net farm income falls within this target.

While net operating costs for producers also increased substantially, producers also experienced higher market receipts. Total market cash receipts from crop and livestock sales increased 12.3 per cent from 2006. Net operating expenses increased by 8.2 per cent in 2007 as input prices, primarily for feed and fertilizers, rose as well.

Livestock receipts increased by only 2.2 per cent, due primarily to declines in revenues from the sales of beef and hogs. Lower receipts for cattle and hog producers were also affected by large increases in operating costs. Rising grain and oilseed prices more than offset low revenues and rising costs experienced by the livestock sector, with crop receipts increasing 24.8 per cent in 2007.

Total government payments, at $4.1 billion in 2007, were 9.5 per cent below the previous five-year average, mainly due to improved prices in the grains and oilseeds sector. Payments amounted to $4.9 billion and $4.5 billion in 2005 and 2006, respectively.

However, in 2007 total federal-provincial government program payments represented 66 per cent of NCI, highlighting the important role government programs are playing in stabilizing producer income and maintaining viability of farming operations. This also allows farmers to invest with greater confidence in new technology which will improve profitability in the long run.

Table 1

Farm Cash Receipts, Expenses and Income, Canada, 2005-2007

	Average			Percent change			Percent change
	2005	2002-06	2006	06/05	06/02-06	2007	07/06	07/02-06
	$ Million	$ Million	$ Million	%	%	$ Million	%	%
Crop Receipts	13,463.7	14,069.0	14,561.5	8	4	18,167.7	25	29
Livestock Receipts	18,296.8	17,523.6	17,814.7	-3	2	18,199.6	2	4
Total Market Receipts	31,760.5	31,592.6	32,376.3	2	2	36,367.3	12	15
Program Payments	4,923.4	4,519.3	4,533.7	-8	0	4,090.5	-10	-9
Total Cash Receipts	36,683.9	36,111.9	36,909.9	1	2	40,457.7	10	12
Net Operating Expenses	30,498.0	30,040.1	31,650.3	4	5	34,237.2	8	14
Net Cash Income	6,185.9	6,071.8	5,259.6	-15	-13	6,220.5	18	2
Realized Net Income	1,697.4	1,641.3	771.4	-55	953	1,674.7	117	2

Source: Statistics Canada, updated estimates on May 26, 2008.

The performance data for the farm capital investment indicator shows the level of net investment remained constant over the 2001-05 period, despite major production and marketing disruptions such as severe drought and BSE (2005 is the last year of available data for farm capital investments). The suite of BRM programs was designed to help producers manage major disruptions such as these by partially off-setting the losses from the market. The fact that overall net investment remained level during these years indicates producers were generally able to continue to replace depreciated assets and invest in new technology, supporting longer-term profitability and viability.

Canadian Agricultural Income Stabilization (CAIS) program

CAIS program - Actual Spending ($ millions) 2007-08	Total BRM - Actual Spending ($ millions - Net) 2007-08
$411	$2,223.6

Note: Other programs and services that contribute to the BRM program activity made up the remainder of BRM actual spending in 2007-08. More information is available in Section III of this DPR.

The CAIS program was one of the government programs in place to help ensure producers had the necessary tools to effectively manage risks by protecting their farming operations from both small and large drops in income. By contributing to stabilized farm income variability, programs like CAIS (and Production Insurance, another key BRM program) helped improve the viability and profitability of the agricultural sector.

Payments are issued under the CAIS program when current-year farm income (production margin), including Production Insurance payments, is less than the average farm income from previous years (reference margin). As CAIS payments are based on tax information, there is a lag in program payment calculations.

In response to a recommendation in the 2007 Office of the Auditor General (OAG) report, work was carried out on the development of targets for the CAIS program. Measureable and meaningful targets were developed for the key indicators and performance data collected in 2007-08 related to the 2005 program year.

The CAIS program covers a significant portion of the agriculture industry with 56 per cent of Canadian producers (including those in the supply-managed sectors) participating in the program. This represents 79.6 per cent of total market revenues for all farms in Canada, exceeding the target of 75 per cent. Of those producers participating in the program, 45.9 per cent received CAIS payments, which contributed to raise producers' program year margin from 63.4 per cent of their reference margin to 87 per cent on average; the target was 80 per cent.

The 2007 Office of the Auditor General report also recommended that AAFC publish payment accuracy rates for the CAIS program. AAFC had established an internal accuracy target of 97 per cent and the table below outlines the department's performance against that target where it delivers the program.

Accuracy of CAIS program payments - by program year
2003	2004	2005	2006
89.8%	93.5%	96.6%	97.5%

The accuracy rate will also be published in annual reports on the CAIS program, and program delivery partners will be encouraged to publish their accuracy of payment rates.

Production Insurance and the CAIS program combined accounted for almost 60 per cent of the $4.1 billion in total government payments made to producers in 2007. Other significant contributors to this total support were the $900-million CAIS Inventory Transition Initiative (CITI), designed to help with the transition to a new inventory valuation methodology to improve CAIS predictability and timeliness, and the $400-million Cost of Production (COP) Payment.

More details on Business Risk Management performance are available online.

Program Activity - Food Safety and Food Quality

Minimizing the risk and impact of food borne hazards on human health, increasing consumer confidence and improving the sector's ability to meet or exceed market requirements for food products

Food Safety and Food Quality provides policy direction, along with programs, services and tools for the industry to maintain Canada's solid international reputation regarding food safety and quality. These include an on-farm food-safety program, traceability initiatives, support for quality-control systems and data-management systems, and research and technology transfer. The Canadian Food Inspection Agency is an active partner in many of these initiatives.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
119.4	98.6	113.3
Planned FTEs*	Authorities	Actual FTEs
466	N/A	680

*Full-Time Equivalents

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used.

Expected Results	Status
Minimized risk and impact of food borne hazards on human health through research and industry-based systems	Met While other federal departments and agencies are responsible for protecting human health, AAFC's policies, programs and services assist the sector in maximizing its long-term profitability and competitiveness, supporting research and industry-based food safety systems that provide greater assurance of food safety outcomes to buyers and markets.
Increased consumer confidence and improved ability of the sector to meet or exceed market requirements for food products	Met More sectors are ready to meet market requirements as they have developed food safety systems - 16 of the 19 eligible commodity organizations are at various stages of the four-phase approach for development of approved on-farm food safety systems. Five commodity organizations had completed the process by the end of the APF period. In addition, 13 of approximately 28 post-farm organizations are at various stages of completion. Assisting producers to adopt food safety systems through financial incentives has supported the training and start-up of implementing such systems. By reducing the up-front cost, the program assists producers in meeting government and buyer demands for verifiable food safety performance, thereby assisting them in maintaining market access and remaining competitive. Generating scientific knowledge and know-how to support the agri-food industry in developing new Canadian products helped the industry to meet consumers' expectations for high-quality and safe foods and to be competitive on national and international markets.
Increased value-added opportunities through the adoption of food safety, food quality and traceability systems	Partially Met No reliable quantifiable data can be identified to determine how AAFC's work contributed to value-added opportunities for the sector; however, strong industry interest in food safety, food quality and traceability systems indicates there may be important market drivers for such systems.

In 2007-08, Agriculture and Agri-Food Canada measured progress against these expected results, in part, through the following indicators:

Performance Indicators	Progress in 2007-08
Regulatory strategy for priority livestock species animal identification is complete and costs and benefits have been identified	The regulatory strategy for animal identification for the four priority species (cattle, hogs, sheep, and poultry) was developed and is in the process of implementation through the federal-provincial-territorial Traceability Task Team and the Industry Government Advisory Committee on Traceability (IGAC). Mandatory animal identification exists for cattle, sheep and bison and the regulations to the Health of Animals Act are being revised to include mandatory identification for hogs. A poultry identification strategy was created by the poultry industry but has not yet been adopted. Costs and benefits of implementing a national traceability system within three of the priority sectors have been identified.
Livestock movement strategies drafted for priority species	Livestock movement strategies were drafted for the four major species (cattle, hogs, sheep, and poultry) and incorporated into the Industry Government Advisory Committee on Traceability Road Map for livestock traceability as directed.
Number of successfully completed projects that demonstrate traceability	Under the Canadian Food Safety Program, Systems Development (SD) - Traceability, three projects worth $480,560 were completed and three projects worth $372,060 were ongoing for a total of $852,620 in 2007-08, compared to three projects worth $697,160 completed in 2006-07. Under the Canadian Integrated Traceability Program, 17 projects totaling more than $1.3 million were completed. The program began and ended in 2007-08.
Number of Radio-Frequency Identification readers adopted by industry (higher number = more successful)	The number of Canadian Radio-Frequency Identification program applicants increased from 41 in 2006-07 to 335 in 2007-08, an increase of more than 700 per cent. AAFC re-imbursements to applicants for the purchase of radio-frequency readers increased from $41,163 in 2006-07 to $551,713 in 2007-08. The program ended Feb. 15, 2008.

Traceability is the ability to trace a product through all stages of production, processing and distribution. When fully implemented and accompanied by complementary regulatory strategies, a traceability system can enhance emergency management by facilitating rapid response and containment to limit the spread of animal and plant diseases, as well as food-borne illness, thereby reducing the economic, environmental and social impacts of a crisis. It is a key component in supporting and securing Canada's reputation as a supplier of safe and high-quality agriculture and food products.

The performance reported against the above indicators cover, in part, two key programs in the area of traceability: the Canadian Integrated Traceability Program and the Canadian Radio-Frequency Identification Reader Program (CRFID), both of which were part of AAFC's response to BSE issues. These programs assist industry program applicants with the development of traceability programs and the purchase of CRFID Readers, which are crucial to a traceability program.

Traceability

The implementation timeframe for traceability systems did not allow sufficient time for all industry and provincial government stakeholders to respond. Results for the implementation of traceability systems will be more apparent as stakeholders move beyond the planning stages and into concrete actions over the next three years. It is worth noting that the underlying premise of these traceability related initiatives is that they have been industry led and government supported.

While participation in the CRFID program increased dramatically in 2007-08, overall program uptake over the life of the program was lower than anticipated, as implementation of movement reporting as part of traceability systems has not progressed.

Performance Indicator	Progress in 2007-08
Number of successfully completed projects that enhanced Specified Risk Material (SRM) disposal capacity	While there were no successfully completed projects in 2007-08, 216 projects are underway and 135 provincial and 25 federal abattoirs facilities, as well as four Canadian facilities that have SRM rendering capabilities, are receiving funding.

The program aids the cattle and beef industry to comply with the CFIA's enhanced feed ban regulations. Funding is provided to a wide cross-section of industry to support SRM disposal and fund capital expenses to improve immediate and long-term waste disposal infrastructure requirements.

Performance Indicator

Progress in 2007-08

Number of industry-led and government-recognized on-farm food safety process control systems in the various stages (phases) of the Systems Development component

Four projects for $186,128 were approved in 2007-08, compared to 18 for $5,198,378 in 2006-07. It is important to note that these four projects built upon 57 previously approved projects. Systems Development is a four-phase, multi-year approach to food safety. Of these four projects, two (compared to five in 2006-07) were in phase two of the SD process and the other two (compared to eight in 2006-07) were in phase three. There were no projects approved for phase four in 2007-08 (compared to six in 2006-07). No association has yet completed the final stage (part 2) of the Canadian Food Inspection Agency on-farm food safety recognition process.

Funding for on-farm food safety systems has contributed to Hazard Analysis Critical Control Points (HACCP)-based food safety systems. These systems have helped maintain Canada's ability to provide safe food products that meet or exceed domestic and international market requirements.

While the total number of new approved projects and related funding decreased in 2007-08, most on-farm System Development projects are funded on a multi-year basis, resulting in expenditures of approved funding over more than one year. Many associations that wanted to participate in the on-farm food safety element had already been funded in the previous year and had moved on to implementation of their systems under the next component of the Canadian Food Safety and Quality Program.

As such, total expenditures for 23 active SD projects in 2007-08 were $2,707,038, compared to $1,867,003 for 2006-07, an increase of about 45 per cent in actual project expenditures.

It is also important to note that food safety programming is voluntary, and industry uptake is tied to market conditions and buyer requirements. Under the APF, segments of the industry were unprepared to take full advantage of food safety programming because the organizations did not have a mandate for food safety or they did not have the human resource capacity or expertise.

Performance Indicator	Progress in 2007-08
Number of organizations participating in On-Farm Implementation systems	Seven national commodity organizations were being funded under this component in 2007-08. Three new commodity organizations were approved for total funding of $4.4 million in 2007-08, compared to two organizations approved for $596,800 in 2006-07, plus an amending agreement for one organization for $1 million from 2005-06. This represents a funding increase of about 175 per cent for 2007-08.

Funding for projects under the On-Farm Implementation component of the Canadian Food Safety and Quality program helps individual producers implement their national commodity organizations' HACCP-based food safety systems, thereby strengthening the industry's ability to meet and exceed food safety marketing requirements.

Performance Indicator	Progress in 2007-08
Progress of provinces in implementation of Food Safety Initiative activities	Prince Edward Island joined the Food Safety Initiative to bring the total number of participating provinces to seven (B.C., Alberta, Saskatchewan, Manitoba, Ontario, N.S., and P.E.I.). Approved funding increased from $48.9 million in 2006-07 to $50.4 million in 2007-08.

Under the Canadian Food Safety and Quality Program, Food Safety Initiative (FSI) activities are designed to improve Canada's food safety infrastructure by increasing the industry's awareness and knowledge of food safety systems and providing assistance to implement HACCP-based food safety systems in non-federally registered processing plants. This helps strengthen the industry's ability to meet or exceed provincial food safety market requirements.

In 2007-08, all seven participating provinces took part in outreach, implementation and/or research and development activities aimed at improving the food safety infrastructure in non-federally registered processing plants. In 2006-07, six provinces were participating in FSI and were involved in outreach activities, with only three (Alberta, Manitoba and Ontario) involved in implementation.

While FSI is currently not delivered in all provinces, the remaining provinces have expressed interest and future programming will hopefully bring all provinces on board.

Performance Indicator	Progress in 2007-08
Specific performance indicators and targets were not identified in 2007-08, but performance was consistent with the expected level of productivity and, for comparison, exceeded targets for 2008-09.
Number of scientific publications (number of peer-reviewed articles in scientific and technical literature, etc.)	361 scientific externally peer-reviewed articles in scientific journals
Co-operative research (number of signed agreements with industry partners, etc.)	Food Safety and Food Quality Science Team is involved in 357 collaborative research activities, 135 activities were A-base financed and 222 activities were supported by other sources of funds. These include new and ongoing collaborations. The generation of new knowledge along with collaborative work are keys for building innovation capacity and to support the industry needs for growth. AAFC worked closely with various partners from Canada and from other countries including 25 other government institutions, 36 associations, 51 industries and 42 universities.
Technology transfer activities (number of oral communications, posters, reports, press articles, etc.),	188 posters and 101 oral communications 119 reports, 117 posters, 333 oral communications, 200 invited talks, 29 technical transfer activities, 23 press articles, 65 interviews, and 74 other technology transfer publications including flyers, guides, newsletters, etc.
Innovations (number of licenses, royalties, copyrights, patents, etc.)	The research activities contributed to innovation for the food sector and generated 45 Copyright/Declaration of Invention/Licence/Patents/Royalties, 29 gene sequences, 3 improved genetic materials, 104 improved systems/processes/products and 9 new varieties were registered.
Recognition and influence (number of invited presentations, prizes, awards, etc.)	The quality of the science within AAFC for the food sector is well recognized and scientists were involved in 124 editorial and review boards, with 132 participations in national and international scientific associations or expert committees; they contributed to train 117 highly qualified personnel and experts. Scientists have received 11 prizes and awards.

AAFC committed to ensuring science excellence and introduced a rigorous external peer-review and management evaluation process for all research projects submitted. The department focused its efforts on:

• Building a strong science base to make available to Canadians innovative health-enhancing nutritional products: AAFC conducted research activities related to the safety and quality of food as well as nutritional and health attributes of foods produced in Canada. AAFC scientists are gaining a better understanding of how to isolate and characterize these healthy components and how to ensure that they actually impact on the body and contribute to human health. AAFC worked close to the food industry and contributed to developing new products and new processes to meet consumers' expectations for safe and healthier food.
• Improving the safety and security of the food system through the development of predictive safety approaches: Research activities helped provide sound advice to decision and policy makers, while augmenting the understanding of emerging food borne diseases. Activities include research on determining the effect of antimicrobial use in foods, alternative strategies to reduce antibiotic use in animals, improved detection and control of food borne viruses, bacteria and chemical toxicants including mycotoxins, enhanced knowledge of biochemical mechanisms and processes as they affect sensitivity to allergens and development of a comprehensive understanding of microbial interactions during food production from the farm to the plate and the impact of these interactions on the safety of food.
• Developing integrated management strategies throughout the food continuum to enhance food quality and add value to products: The Food Safety and Food Quality Science program helped provide information, research and technologies in support of food safety and quality outcomes.

As a result of the external peer review and evaluation process, 16 duly approved projects were conducted to enhance human health and wellness through food, nutrition and innovative products, 44 projects to enhance the quality of food and the safety of the food system, and 11 projects to enhance security and protection of the food supply.

Security and protection of the food supply is a relatively new area for AAFC's science program. Capacity-building and the acquisition of relevant expertise are the focus at present. Three projects were received for this priority area in 2007-08. For fiscal year 2008-09, scientists will be encouraged to develop and submit new projects in the food supply security area.

Food Safety and Quality Chapter Evaluation

The Food Safety and Quality (FSQ) Chapter evaluation, conducted in July 2007 by an independent third party, noted that while case studies showed some important achievements and successes were made in individual projects funded by Food Safety and Quality, overall progress in the Chapter was limited and slowed relative to the original outcome goals and the emerging market requirements.

FSQ Chapter outcomes were determined to be overly optimistic regarding the industry's state of readiness and the time that would be required to achieve objectives. The evaluation concluded that the APF target of five years for implementation of food safety systems was too optimistic, and that 10 to 15 years would likely be required to accomplish the objectives and outcome goals.

In addition, it was determined that a voluntary approach to system implementation has limitations because associations do not have a mandate to impose the use of food safety systems by their members and do not cover all commodities. Also, some national associations are in the beginning stages of developing the necessary capacity to efficiently and effectively implement food safety systems.

An external panel has reviewed AAFC Food Safety and Quality science and overall was impressed with the quality of science being delivered.

Despite the challenges, there remains ongoing interest in the development and implementation of government recognized on-farm and post-farm HACCP-based systems. In addition, AAFC has put in place a Management Action Plan for addressing the recommendations from the FSQ Chapter evaluation. Some of these changes will be incorporated in Growing Forward, such as the allocation of funding to provinces for program delivery.

More details on Food Safety and Food Quality performance are available online.

Program Activity - Markets and International

Expanding international opportunities for the Canadian agriculture and food sector

Together with portfolio, government and industry partners, AAFC works through the Markets and International program activity to improve and secure market access and achieve a more level playing field in international markets for agriculture and agri-food products. The department promotes and defends the interests of Canadian farmers and agri-food processors in various international trade negotiations and through trade litigation, when necessary. It also monitors and seeks to influence policy developments in key countries, using tools such as trade advocacy, and agri-food specialist positions in selected embassies abroad.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
78.5	78.9	80.5
Planned FTEs*	Authorities	Actual FTEs
555	N/A	487

*Full-Time Equivalents

Note: Markets and International activities under the Security of the Food System Strategic Outcome accounted for 70 per cent of total Markets and International spending and FTEs in 2007-08. The remaining 30 per cent falls under the Innovation for Growth strategic outcome.

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used

Expected Results	Status
Expanded international opportunities for the Canadian agriculture and food sector	Met

In 2007-08, Agriculture and Agri-Food Canada measured progress against these expected results, in part, through the following indicators:

Performance Indicator

Progress in 2007-08

Participation in WTO meetings and analytical leadership to negotiate and preserve favourable market access conditions for Canada's agricultural export interests

Provided analytical leadership within WTO agriculture negotiations Contributed to WTO negotiations analysis, ensuring the current draft text for modalities for the agriculture negotiations reflects Canada's key priorities and ideas Concluded WTO bilateral negotiations with Kazakhstan towards improving access for Canadian agri-food exports to that country Participated in meetings in context of the working party on Russia's accession to WTO

Canada's active participation in the world trading system is a key vehicle to addressing its market access interests. In 2007-08, AAFC managed to advance Canadian negotiating interests in the World Trade Organization (WTO) agriculture negotiations which would ultimately lead to improved market access for key export products such as beef, pork and wheat and would level the playing field through reductions in trade-distorting support and elimination of export subsidies. Canada played an important role in these negotiations in providing analytical leadership within the WTO agriculture negotiations on several complex negotiating issues.

Canada's role has been instrumental in contributing to the progress made so far at the WTO, not only from a Canadian perspective, but also from a global point of view. The current draft text for modalities for the agriculture negotiations (the blueprint for the negotiations) reflects, to a large extent, Canada's key priorities and ideas.

Performance Indicator	Progress in 2007-08
Number of initiatives where objectives were met towards prevention, minimization or resolution of international trade barriers and other irritants through trade advocacy, regional/bilateral negotiations and/or dispute resolution	14 initiatives were undertaken by AAFC that successfully prevented, minimized or resolved international trade barriers and other irritants. AAFC developed, updated and implemented advocacy and engagement strategies for key bilateral issues with the U.S.

The Government of Canada, in the Global Commerce Strategy and the 2007 Budget, committed to enhance the regional and bilateral trade negotiations agenda. Agriculture stakeholders here have pressured AAFC to initiate free-trade agreements with countries where our trading partners, especially the United States, have gained better access than Canada for their agricultural exports.

To this end, in 2007-08 Canada began negotiations with Colombia, Peru and the Dominican Republic, and also launched negotiations with CARICOM (Caribbean Community) and Jordan. Canada concluded negotiations with members of the European Free Trade Association (EFTA), comprised of Switzerland, Iceland, Liechtenstein and Norway, and Peru within the same fiscal year. Negotiations with Korea and several other partners also continued during this period.

The conclusion of the Canada Free Trade Agreement with the EFTA members in 2007-08 represented immediate benefits for Canadian exporters, with more than $5.2 million in annual duty savings for Canadian exports. In addition, the conclusion of a Canada-Peru Free Trade Agreement will result in an estimated duty savings of approximately $20.5 million annually for Canadian exporters.

The U.S. continues to be Canada's largest trading partner by far, accounting for approximately 70 per cent of Canada's agricultural trade. While the majority of Canada's trade with the U.S. is problem free, the bilateral relationship faced some challenges in 2007-08.

During the course of the year, AAFC and its team of agricultural specialists in the United States engaged the U.S. Administration, key members of Congress and other decision-makers and influencers, as part of the department's U.S. advocacy plan. AAFC developed, updated and implemented advocacy and engagement strategies, in consultation with provinces and key stakeholders, for key bilateral issues with the U.S., including post-BSE market access recovery for beef and cattle, U.S. Farm Bill, mandatory country-of-origin labeling (COOL), sugar and sugar beet thick juice, APHIS user fees and market access recovery post discovery of potato cyst nematode (PCN) and avian influenza.

Ministerial missions to the U.S. and Mexico played a key role in advancing Canada's bilateral interests and addressing issues with each of our NAFTA partners.

A Consultative Committee on Agriculture (CCA) has now been established to advance the development of Canada's bilateral relationship with Brazil, with the first meeting taking place in 2007-08. The CCA has proven to be an effective tool for engaging each of our NAFTA partners - the U.S., Mexico and Brazil.

Performance Indicator	Progress in 2007-08
Participation at international fora concerning multilateral technical trade issues	AAFC participated in an increased number of international fora in 2007-08 compared to 2006-07 concerning multilateral technical trade issues.

AAFC continued in 2007-08 to support the objectives of maintaining and expanding market access for Canadian agriculture and agri-food products.

To achieve this, AAFC delivered on its commitment to exert influence in the development and application of international trade rules, technical standards and policies governing trade in agriculture and agri-food products.

At the multilateral level, despite intensive work at the WTO, a final agreement remains elusive due to diverging interests in key areas. At the bilateral level, AAFC helped to ensure stakeholder interests were reflected in a final agreement with Peru, where results provided greater certainty that the use of the term Canadian Rye Whisky would be adequately protected in the Peruvian market.

While obstacles to concluding agreements with Colombia and South Korea were not successfully resolved, intensive work is ongoing and AAFC will continue to participate in discussions to ensure that mutually beneficial results are achieved.

Problems related to the perception and acceptance of innovative products, such as those containing genetically modified organisms (canola, corn and soy, for example) continue to pose challenges to market acceptance of some Canadian commodities in key markets. AAFC will continue to address misperceptions to ensure that international rules are science-based and applied fairly.

Although negotiation of Chapter 9 of the Agreement on Internal Trade was not successfully completed, progress was made and as a result of the options developed resolution is expected over the short term.

Performance Indicator	Progress in 2007-08
Number of new or updated, consensus-based, whole value-chain agreements leading to national standards / guidelines, assurance programs, regulations, and / or audit / enforcement provisions	7 new or updated agreements were implemented.

Trade-distorting subsidies and the emergence of low-cost producing countries are making it difficult for the Canadian agriculture and food industry to compete internationally. To maintain market share while building new markets, industry needs to find new ways to differentiate itself from the competition. Canadian products can be differentiated based on quality attributes supported by government/industry certification systems and national standards or regulations as required by buyers. Under the APF, federal, provincial and territorial governments agreed to participate in food process control systems for quality, developed or to be developed by industry and recognized by government. Consumer and buyer demand for verified quality attributes are growing in importance.

More details on Markets and International performance are available online.

Program Activity - National Farm Products Council

Working with the agencies it supervises, the National Farm Products Council (NFPC) promotes more effective marketing of farm products in interprovincial and export trade. It is also an active proponent of portfolio management by providing 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 Farm Products Agencies Act. The NFPC also maintains relations with provincial governments.

The NFPC also administers the Agricultural Products Marketing Act (APMA) on behalf of Agriculture and Agri-Food Canada.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
3.8	4.4	3.7
Planned FTEs*	Authorities	Actual FTEs
20	N/A	24

*Full-Time Equivalents

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used.

Expected Results	Status
Agency operations work in the balanced interest of all stakeholders	Met
Farm products marketed effectively	Met
Disputes resolved	Met
Industry and stakeholders informed regarding supply management	Met
Opportunities for the establishment of new promotion-research agencies pursued	Met
Efficient, transparent and responsible management	Met

In 2007-08, Agriculture and Agri-Food Canada measured progress against these expected results, in part, through the following indicators (expected results are included in the tables below for clarity):

Agency operations work in the balanced interest of all stakeholders
Performance Indicators	Progress in 2007-08
Completion of a work plan to complete the process, agreed to by agencies, provincial governments and NFPC	Work plan not completed
Number of allocation policies (approval of quota order) reviewed and approved	2 policies reviewed and approved
Number of requests processed	32 requests processed
Level of compliance of agency orders and regulations	100 per cent compliance with the Statutory Instruments Act
Continued efforts and positive progress by the agency to complete the legal framework required to implement a national levy collection system on interprovincial marketing and imports with the Canadian Beef Cattle Research, Market Development and Promotion Agency	70 per cent of provinces participating

Although a work plan was not completed in 2007-08, the Canadian Egg Marketing Agency, Canadian Turkey Marketing Agency and the Canadian Hatching Egg Producers (formerly the Canadian Broiler Hatching Egg Marketing Agency) continue to work on developing their renewed federal-provincial-territorial agreements.

National marketing agency policies and requests are stakeholder-driven. As such, their number varies from one year to the next. While the total number of requests processed may provide information, the year to year variation should not be construed as an indication of increased or decreased performance by the NFPC. As such, comparative data has not been provided for the status of performance against this indicator.

Regarding the national levy collection system, as of 2007-08 seven out of 10 provinces have signed service agreements with the Canadian Beef Cattle Research, Market Development and Promotion Agency for levy collection. Work continues with other provinces to implement the levy system.

Farm products marketed effectively
Performance Indicators	Progress in 2007-08
Participation and quality of relationships with national agencies and industry associations Participation and quality of relationships with provincial government supervisory agencies	NFPC attended 27 National Marketing Agencies and industry association meetings, one conference and 17 provincial agencies meetings, as well as two NAASA meetings

Participation in these meetings and conferences in 2007-08 allowed the NFPC to develop, maintain and improve relationships with industry stakeholders, helping ensure supply-managed farm products are marketed effectively and contribute to the accomplishment of the agency's mandate. Furthermore, these events allowed agency staff to gather information on trends, issues and initiatives that have an impact on agriculture as well as supply management.

Disputes resolved
Performance Indicators	Progress in 2007-08
Effectiveness of the process for managing and facilitating complaints	Active participation of NFPC members resulted in the resolution of two complaints
Feedback from parties	Parties stated they appreciated the active participation of Council members and felt it contributed to the effective resolution of complaints
Self-assessment	Informal self-assessment revealed more direct involvement by Council members is essential to effectively resolve complaints

The NFPC continued to strive toward an improved and refined dispute resolution process in 2007-08, with a view to effectively resolve issues that arise between the National Marketing Agencies and stakeholders. Gathering feedback from parties involved in disputes and conducting self-assessment of the process leads to more credible decisions by Council members.

Industry and stakeholders informed regarding supply management
Performance Indicators	Progress in 2007-08
Quality of communications products and services	Produced four newsletters, one data handbook as well as an annual review. In addition, created a Factsheet outlining its role. The NFPC also restructured its website to ensure continuous compliance with Treasury Board Secretariat guidelines. At this time, performance information on the quality of products is not available. Surveys will be conducted in the future to determine performance in this area.
Number of studies and research projects undertaken externally and internally in collaboration with other departments and agencies relative to supply management, innovation and technology within the industry, discussion forums	The NFPC conducted one internal research project on supply-managed products pricing mechanisms across Canada.
Participation in AAFC working groups on the development of the next generation of agriculture and agri-food policy	Participated in 37 working groups

The various communication products produced by the NFPC in 2007-08 improved the information on supply-management available to industry stakeholders (data handbook), increased awareness of the NFPC's role and activities (factsheet, newsletters), and ensured that this information was provided in the most efficient and clear way possible (web site restructuring).

Agency staff participated in six Portfolio Regulatory Working Group meetings, 24 Portfolio Liaison Committee meetings, three Portfolio DG Committee meetings, one Portfolio Deputy Head retreat and three Portfolio Deputy Head conference calls, including the NFPC's participation in the development of the next generation of agriculture and agri-food policy.

Opportunities for the establishment of new promotion-research agencies pursued
Performance Indicator	Progress in 2007-08
Number of requests for information sessions on the establishment of promotion-research agencies	Three requests generated

Promotion-research agencies created under the Farm Products Agencies Act are funded through a national levy paid by producers and importers of agricultural products. This levy provides a stable and predictable source of funding for these agencies to conduct research activities and increase industry knowledge about consumer preferences, as well as promote their products. These activities can lead to market expansion, increased sales, and the development of new products. Promotion-research agencies are commodity-based, accountable to producers and importers, have a stable base of funding, and promote self-reliance in the agri-food sector.

The number of requests for information sessions on the establishment of promotion-research agencies is stakeholder-driven. Therefore, the variance of information sessions requested year to year should not be construed as an indication of increased or decreased performance by the NFPC. In 2007-08, the Western Grain Research Foundation, Canadian Honey Council, and B.C. Blueberry and B.C. Raspberry Associations requested information sessions.

Efficient, transparent and responsible management
Performance Indicators	Progress in 2007-08
Feedback from Council Chairperson and members on the delivery of secretariat services	87.5 per cent of council members surveyed "very satisfied"
Improved efficiency of the administrative process for orders and regulations	Reviewed administrative procedures to process agency levy orders more efficiently
Implementation of Memoranda of Understanding and Service Level Agreements with AAFC and the Department of Justice	MOUs implemented
Implementation of new policies and systems developed to meet MAF requirements	Collaborated with departmental service providers and completed service-level agreements
Self-assessment of application of sound management practices in keeping with MAF requirements	Performance agreements established for all senior managers

Council members were surveyed in 2007-08 regarding their level of satisfaction with briefing materials, logistics for meetings and processing of expense accounts; 87.5 per cent of respondents said they were "very satisfied."

In collaboration with departmental service providers, the NFPC has been an active player in the implementation of new policies and systems to comply with MAF requirements, including the completion of service-level agreements with corporate service providers to clearly highlight the responsibilities of all stakeholders.

The NFPC developed clearly defined performance agreements for all senior management, including its 2007-08 Business Plan, directly linked to transparent, efficient and responsible management practices.

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

The department has committed a significant amount of resources to a suite of activities and programs aimed at enabling the agriculture and agri-food sector to maintain or increase its profitability while producing safe food and using environmental resources in a manner that ensures their sustainability for present and future generations.

Addressing environmental issues is not new to agriculture. Managing the resources - air, water, soil, biodiversity - that serve as the foundation for this economic sector is a precondition to long-term successful farming. Through its various activities, AAFC provides farmers with access to science-based information and knowledge and direct on-farm programming that enables them to use a more systematic management approach to address environmental risks and identify suitable corrective actions that will be economically viable, even profitable, over time. These actions undertaken by AAFC have had positive and measurable results on the Canadian agricultural landscape as researched by the department's National Agri-Environmental Health Analysis and Reporting Program (NAHARP).

Through the implementation of the APF and its partnership approach with provinces and territories, AAFC has also responded to client expectations of more effective and efficient service delivery. Lessons learned from APF are helping the department design Growing Forward policies and programs that further enable the sector to address environmental priorities.

To achieve results under the strategic outcome Health of the Environment in 2007-08, AAFC worked through the departmental program activity of Environment.

Program Activity - Environment

Achieving environmental sustainability of the industry by preserving the quality and availability of resources - air, water, soil, and biodiversity - for present and future generations

AAFC has a range of activities and initiatives relating to air, water, soil, and biodiversity supporting the agriculture and agri-food sector that contribute to providing Canadian and international consumers with high-quality food and fibre that has been produced using environmentally sound crop and livestock management practices. These initiatives, including research and development functions, significantly contribute towards securing the sustainability of the Canadian agriculture and agri-food sector and the quality of environmental resources for present and future generations.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
308.5	416.7	444.5
Planned FTEs*	Authorities	Actual FTEs
1,987	N/A	2,008

*Full-Time Equivalents

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used.

Expected Result

Status

Environmental sustainability of the industry achieved by preserving the quality and availability of resources - air, water, soil, and biodiversity - for present and future generations

Progress achieved Due to complexity of natural systems and the length of time required for some effects to take place, the expected results are achieved over a period of several years and cannot be measured or quantified every year. Results for the next assessment period (1981 to 2006) will be available in 2009. Environment programming supports the adoption of Beneficial Management Practices. These practices are science-based and have been proven to result in positive changes to the environment when implemented, thus contributing to progress toward the expected result.

In 2007-08, Agriculture and Agri-Food Canada measured progress against this expected result, in part, through the following indicators:

Performance Indicator	Progress in 2007-08
Environmental components included in implementation agreements signed with all provinces and territories	28 continuity agreements for environmental programming were signed with provinces and territories

AAFC's environmental programs enable producers to set priorities for actions which address on-farm environmental concerns, as well as those which serve the public interest.

• Environmental Farm Plans (EFPs) help producers identify environmental risks and opportunities and promote the continuous growth of the stewardship ethic within the agriculture and agri-food industry.
• Incentive-based programs, including the National Farm Stewardship Program (NFSP), Greencover Canada (GC), and the National Water Supply Expansion Program (NWSEP) contribute to the adoption of on-farm beneficial management practices (BMPs) by producers in the management of land, water, air, and biodiversity.

It has been demonstrated through the Farm Environmental Management Survey under the EFP-NFSP program that producers with an EFP are:

• twice as likely (61 per cent compared to 32 per cent) to use soil testing to determine proper fertilizer application rates to meet crop needs and to reduce nutrient runoff;
• twice as likely to use soil testing and nutrient content of manure to determine manure application rates (solid and liquid manure) - reducing the risk of surface and groundwater contamination; and
• more likely to protect and maintain riparian areas.

These actions taken by producers contribute to improvements in the overall health of air, water, soil, and biodiversity resources, and are a direct result of the environmental programming offered through AAFC.

Performance Indicator	Progress in 2007-08
Targets did not exist for 2007-08, but performance was consistent with the expected level of productivity and, for comparison, exceeded targets for 2008-09.
Number of scientific publications (number of peer-reviewed articles in scientific and technical literature, etc.)	Environmental Performance Publications: 330 external peer reviewed articles in scientific journals, 70 books or book chapters, 322 conference proceedings and abstracts, and 143 other non-peer reviewed scientific publications. Bioresource Protection Publications: 90 external peer reviewed articles in scientific journals, 26 books or book chapters, 48 conference proceedings and abstracts, and 39 other non-peer reviewed scientific publications
Co-operative research (number of signed agreements with industry partners, etc).	Environmental Performance Cooperative research: 57 signed cooperative research agreements with industry partners Bioresource Protection Cooperative research: 1 signed cooperative research agreement with industry partners
Technology transfer activities (number of oral communications, posters, reports, press articles, etc.)	Environmental Performance Technology transfer: 119 reports, 117 posters, 333 oral communications, 200 invited talks, 29 technical transfer activities, 23 press articles, 65 interviews, and 74 other technology transfer publications including flyers, guides, and newsletters Bioresource Protection Technology transfer: 25 reports, 26 posters, 29 oral communications, 25 invited talks, 18 technical transfer activities, 14 interviews, and 32 other technology transfer publications including flyers, guides, and newsletters
Innovations (number of licenses, royalties, copyrights, patents, etc.)	Environmental Performance Innovations: 2 licenses, 4 patents, and 194 improved designs, processes, products and systems Bioresource Protection Innovations: 1 copyright and 24 improved designs, processes, genetic material and systems
Recognition and influence (number of invited presentations, prizes, awards, etc.)	Environmental Performance Recognition and influence: 30 awards, 108 international invitations, and 117 regional or national invitations Bioresource Protection Recognition and influence: 7 awards, 32 international invitations, and 27 regional or national invitations

The performance indicators for environmental health research activities include scientific publications, technology transfer, co-operative research, innovations and recognition. These performance indicators contribute to a long-term continuum that goes from innovation and discovery, to the development of new technologies, to implementing Beneficial Management Practices (BMPs) at the farm level, to adoption of these technologies by the sector, to performance measurement and reporting, and ultimately to policy and program analysis and development in an effort to improve environmental sustainability and preserve Canadian resources (air, water, land, and biodiversity).

The expected results specific to the Environmental Health Science program are:

• new knowledge and improved understanding by the scientific community of the interactions and impact of agricultural practices on the environment (soil, water, air, and biodiversity);
• enhanced understanding by the agri-food sector of new and improved BMPs; and
• advanced knowledge of the identity and the behaviour of biological resources leading to increased awareness and understanding of the need and means for bioresource protection by the scientific community and the agri-food sector.

Progress towards these results was achieved through research conducted under two priorities outlined in AAFC's Science and Innovation Strategy: Enhancing Environmental Performance of the Canadian Agricultural System and Enhancing Understanding of Canadian Bioresources and Protection and Conserving their Genetic Diversity. In 2007-08, 74 research projects were initiated after being selected through a stringent evaluation process, including an external peer review to ensure science excellence and a management evaluation to ensure alignment with the priorities of the department and the Government of Canada.

Performance Indicators	Progress in 2007-08
Completion of the National Land and Water Information Service project - Phase 2: Establish Geospatial Environment	Phase 2 was completed in October 2007
Implementation of the National Land and Water Information Service project - Phase 3: National Source for Agri-Environmental Geospatial Information	Phase 3 implementation was on-going through 2007-08 and was combined with Phase 4 (Partner Information Integration) to make better use of overlapping project requirements

Through the completion of the Phase 2 Geospatial Environment component and the ongoing work of Phase 3 and 4, 41 AAFC GIS users now have access to hundreds of AAFC and partner datasets that are now aligned to the new NLWIS technical platform, as well as to accepted national standards for data.

AAFC GIS users and the Canadian public also now have access to increasing amounts of accurate, authoritative data through our partnerships and collaboration successes.

Phase 3 and Phase 4 were combined in a decision made in June 2007 by the NLWIS Major Crown Project Senior Advisory Committee to increase the efficiency of the ongoing building of applications and tools on the technical GIS platform.

NLWIS Audits

Internal and external audits and reviews have given the project the opportunity to realize its full investment by making improvements in the areas of: promoting a shared vision, clear outcomes and best practices for business requirements management; strengthened governance with well defined roles and responsibilities and supporting processes; and rigorous project management including calculating and reporting monthly earned value.

Performance Indicators	Progress in 2007-08
Number of minor use and reduced risk pesticide regulatory submissions made to Health Canada's Pest Management Regulatory Agency	45 minor use pesticide projects completed and submitted to PMRA or registrants in 2007-08 (Target: 40)
Number of crop profiles, risk reduction strategies, research projects and new products, practices or technologies that can be utilized by growers	More than 50 new uses registered on 32 different crops 7 crop profiles updated (Target: 10 - less emphasis was placed on profiles in favour of higher priority strategy work) Continued development of 5 risk reduction strategies (Target: 5); and development of transition strategies in collaboration with PMRA for two pesticides to be withdrawn from the marketplace (Extra activity) Management of 79 projects (including 40 new projects for 2007-08) with 95 per cent (75 of 79) on target and meeting milestones as of March 2008 4 data packages to support registration of biopesticides submitted (Target: 3); and initiation of work on 3 key pest issues for which no current controls are known (Extra activity)

In 2007-08, Canadian growers benefited from improved access to new and effective pest management tools and technologies to protect their investment in the field.

The Pest Management Centre's (PMC) activities are grower-oriented, supporting the introduction of new uses of crop protection products, and focusing on tools which provide a reduced risk to human health and the environment. By improving grower access to these crop protection tools and approaches, the PMC helps Canadian growers respond to the realities of international markets, enabling access to products available to their competitors, and enhancing the competitiveness of the sector globally. At the same time, the activities of the PMC help to provide the tools necessary to adopt more environmentally sustainable pest management practices, thus meeting the expectations of Canadians, and contributing to AAFC's expected result of improved sustainability of the industry by preserving the quality and availability of resources - air, water, soil, and biodiversity.

Performance Indicator	Progress in 2007-08
Governance structure for AAFC water-related activities is operational	Governance structure for AAFC water related activities is operational with a Water Steering Committee and a Water Integration Group
Integrated Water Resource Management partnership developed with Manitoba and Environment Canada as a pilot	A partnership has been developed with Environment Canada in Manitoba and in Saskatchewan with respect to furthering Integrated Water Resource Management. The Manitoba work is focused on Lake Winnipeg, while the Saskatchewan efforts are more generally focused on governance
AAFC becomes significant contributor in federal water policy discussions	AAFC has become a significant contributor to work underway under the auspices of the new ADM Water Policy Committee. AAFC helped developed priorities for action, and will assume a leadership role in the four priority areas for federal action

As a result of progress made in 2007-08, AAFC is now better positioned to address sustainability issues for the agricultural sector related to water, and to demonstrate the department's role to others. Given the complexities of water governance in Canada, clients appreciate the clarity that AAFC has provided regarding its efforts. For example, the AAFC Strategic Water Framework has provided guidance to the horticulture sector, through the Horticulture Value Chain Round Table, in developing its own water strategy.

Water is fundamentally critical to agricultural production, and AAFC's Strategic Water Framework has allowed the department to demonstrate initiative and leadership with respect to the need to better adapt to climate change and the related water cycle impacts. The framework has resulted in better co-ordination and direction of water related activities in the department, and improved communication to serve the sector more effectively. It has provided for effective input into the water aspects of Growing Forward, and prepared the department to be a more significant player in federal water policy development. AAFC's governance structure has been used to coordinate its input into recent federal multi-department water policy discussions and address water related inquiries from clients.

Performance Indicator	Progress in 2007-08
Number of reviewed (i.e. completed) Environmental Farm Plans or Equivalent Agri-Environment Plans	56,700 reviewed Environmental Farm Plans/Equivalent Agri-Environmental Plans have been completed under the APF to date, covering 25 per cent of all farms across Canada and approximately 34 per cent of the agricultural landscape. This represents an increase of 11,100 plans from 2006-07 (45,600)

Environmental Farm Planning (EFP) encourages producers to develop farm plans that identify environmental risks and benefits from their farming operations, and develop an action plan to mitigate the risks.

The process allows producers to set priorities for actions which address on-farm environmental concerns, as well as those which serve the public interest. Producers with a reviewed individual or group EFP are eligible to apply to the National Farm Stewardship Program (NFSP) for technical and financial assistance to implement beneficial management practices (BMPs) identified in their action plan.

The NFSP supports EFPs and the increased knowledge and adoption of on-farm BMPs by producers in the management of land, water, air, and biodiversity.

More details on Environment performance are available online.

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 global markets

Increasingly rapid advances in science and technology mean producers and other agriculture and agri-food sector stakeholders face greater challenges to keep pace. For all players in the sector, operating in the marketplace today requires advanced technology and the latest knowledge to address rapidly changing consumer needs and expectations.

And as farming operations become larger and more complex, both new and established producers need to add to their skills and knowledge, ranging from managing financial and human resources to mastering innovative technologies, products and practices to stay competitive. By acquiring additional skills, adopting new technologies, maximizing efficiencies in operations, or changing product mixes, those who earn their livelihood from Canadian agriculture and agri-food will continue to be profitable and successful.

To achieve results under the Innovation for Growth strategic outcome in 2007-08, AAFC worked through the departmental program activities of Innovation and Renewal and Markets and International. The Rural Secretariat, Co-operatives Secretariat and Canadian Pari-Mutuel Agency also contributed to this strategic outcome.

Program Activity - Innovation and Renewal

Equipping the industry with new business and management skills, bioproducts, knowledge-based production systems, and strategies to capture opportunities and manage change

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
664.3	589.1	511.5
Planned FTEs*	Authorities	Actual FTEs
2,113	N/A	1,934

*Full-Time Equivalents

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used.

Expected Result	Status
Industry equipped with new business and management skills, bioproducts, knowledge-based production systems and strategies to capture opportunities and manage change	Met

In 2007-08, Agriculture and Agri-Food Canada measured progress against this expected result, in part, through the following indicators:

Performance Indicators	Progress in 2007-08
Funded sector-led projects to implement alternative value-added strategies for existing commodities and new products and markets	Provided a total of $8.8 million to 12 commodity associations to help develop and implement new value-added strategies and plans to increase profitability for Canadian producers, processors and other members along the value chain This reflects an increase over the 2006-07 fiscal year, during which a total of $5 million was provided to 10 commodity associations to help develop and implement new value-added strategies and plans to increase profitability for Canadian producers, processors and other members along the value chain Under the Advancing Canadian Agriculture and Agri-Food (ACAAF) program, provided funding for industry-led projects designed to capture value-added and new opportunities by seeking innovative and timely solutions to changing market and consumer demands, and facilitated technology transfer not currently in the marketplace by supporting a range of pre-commercialization activities to help apply knowledge generated through research
Improved collaboration along value chains to identify risks, opportunities and new markets	Provided a total of $10 million to 14 recipients to improve collaboration along value chains through innovation networks, workshops and forums that identified risks, opportunities and new markets to increase profitability of the sector. This is a moderate increase from the $5 million provided to 13 recipients in 2006-07 for collaboration activities held during that year
Funded support for the development and start-up costs for centres of innovation and/or incubators or business mentoring	Provided $1.847 million to accelerate commercial success of bio-based businesses; 44 business-mentoring opportunities with private Canadian companies were initiated, resulting in six companies successfully launching new bio-based products This is an increase from 2006-07 where a total of $0.33 million was provided to recipients to accelerate commercial success of bio-based businesses

The performance indicators above measure the effectiveness of two programs implemented under APF: the Agri-Innovation Program and the Broker Program. The objectives of these programs are:

• to accelerate the rate of identification, assessment, development and adoption of innovation-based products, thereby providing new commercialization opportunities for the agri-food sector; and
• to create and support "broker" organizations and activities working among the agricultural sector, industry, government and universities to identify new strategic innovation opportunities.

In 2007-08, these programs enabled the sector to effectively position its enterprises to respond to emerging challenges, technologies and new market opportunities.

Performance Indicator

Progress in 2007-08

Science and Innovation Strategy research implemented

254 multi-year research projects were submitted for approval in 2007-08, of which 233 were approved and initiated. Of these, 74 are reported under the Environment Program Activity and 71 under the Food Safety and Food Quality program activity. This was the first round conducted under the new Science and Innovation Strategy, and long-term existing projects and new projects were submitted and evaluated against the strategic goals.

AAFC's Science and Innovation Strategy was announced by the minister of agriculture and agri-food in 2006. It identified seven strategic goals for the effective delivery of science and seven national science priorities. These priorities are designed to build a competitive edge for the agriculture and agri-food sector and help it capture the significant growth opportunities that exist for non-food products in the bioeconomy.

Implementation of the strategy focused on ensuring excellence in research and aligning research activities and resources with the national science priorities. The projects reported under this Performance Indicator relate to programs that align with these science priorities.

Research areas under the Sustainable Production Systems program in 2007-08 included: the development of varieties of economically important crops adapted to a changing climate and resistant to diseases and pests; the identification and mitigation of threats with the potential to cause catastrophic losses to crop production; and the reduction of input costs in crop and livestock production through reduced usage of chemicals, energy and labour.

Research areas under the Opportunities from Bioresources program in 2007-08 included: geographic information system (GIS) inventory of agricultural and forestry materials (e.g. straw, manure, grain, mill residues, etc.) for conversion to valuable industrial products and novel food ingredients (e.g. functional foods, bioplastics, biofuels, chemicals, etc.); processes and technologies required to convert biomass into valued products; the identification of genes in agricultural raw materials (crops, animals, soil microbes) that code for useful traits with potential high market value; in co-operation with conversion technology providers, production systems for extracting maximum value from agricultural biomass; and sustainability analysis of production and conversion systems to evaluate the effectiveness of bio-based products systems when the products are used as replacements for non-renewable equivalents.

To ensure excellence in science and alignment with the seven priorities of the department and the Government of Canada, all of the projects referred to underwent a rigorous evaluation process consisting of an external peer review and a management evaluation.

More information on the Science and Innovation Strategy is available online.

Performance Indicators	Progress in 2007-08
Number of domestic and world agri-food research opportunities created	AAFC negotiated 496 research agreements, of which 352 were with Canadian collaborators and 144 were with international collaborators
Increased contribution of bioproducts and value-added agricultural products by agriculture	Results from AAFC research in bioproducts and bioprocesses resulted in the filing of eight patents and five licences (up from one in 2006-07). Protection costs were reduced by 15 per cent compared with the previous year, and the patent portfolio was cut by 7 per cent due to a value-based approach to patent retention decisions. Through the ACAAF program, provided assistance to help industry exploit emerging opportunities in the bioeconomy, including projects that support biotechnology, bioproducts, functional foods and nutraceuticals.

Collaborative projects in 2007-08 increased value for research investments by focusing efforts on industry-led opportunities. In addition, funding of collaborative projects increased research capacity to exploit Canada's natural advantage in biomass by allowing combined efforts of public and private research to explore new economic opportunities.

The systems approach and the broader sustainability criteria adapted to opportunities within this area should ensure that Canada is poised to exploit its biomass resources, water, air, and soil within a defensible, sustainable framework. This framework is anticipated to be essential to prevent non-tariff trade action while maximizing industry opportunities to capture greenhouse gas credits.

Performance Indicators	Progress in 2007-08
Number of biofuels facilities	Three biofuels facilities were approved for a total of $9.6 million in funding under ecoABC.
Value of producers' investments in biofuels facilities	$21,887,305 was invested in biofuels facilities.

The Government of Canada is committed to supporting a strong domestic renewable fuels industry by implementing an integrated federal renewable fuels strategy with four key elements:

1. a regulation to establish demand;
2. programs to support farmer participation in the industry;
3. a production incentive to stimulate domestic production; and
4. programs to accelerate the commercialisation of next-generation technologies.

As part of this strategy, the ecoAgriculture Biofuel Capital Initiative (ecoABC) is increasing farmer participation in the biofuels industry and contributing to the government's biofuels content target in transportation fuels. ecoABC provides repayable contributions to facilities that produce renewable fuels if they have a minimum percentage of farmer investment.

During 2007-08, three projects were approved under ecoABC for a total new production capacity of 194,250,000 litres of biofuel per year. Total producer investment was nearly $22 million with 469 farmers investing in the pr ojects. The ecoABC contribution was approximately $9.6 million, with other governments or federal departments contributing an additional $29 million.

Producers benefit from investments in biofuels facilities in several ways: their investment diversifies their sources of income; as part owners of biofuels facilities they move up the value chain from their position of primary producer, thus extracting more income from their product; and as owners they can have a direct influence on the location of biofuels facilities. Locating such facilities in rural areas broadens the economic base of those areas and stimulates local business. A new market for primary agricultural products means greater diversity of income and thus greater levels of resilience among producers. More diversified skill sets in the industry ensure greater adaptive capacity which also contributes to greater resilience.

Performance Indicator

Progress in 2007-08

Number of biofuels pilot projects funded with successful results and targets met

BOPI, which ended March 31, 2008, provided funding for 42 projects approved in 2007-08 (121 projects over the life of the program). Projects were not required to end by March 31, 2008. As a result many projects have not yet been completed and project outcomes are not yet available. Based on application activity, the initiative has met the demand for this type of support and is producing the needed business plans and feasibility studies.

The Government of Canada has developed the four point Renewable Fuels Strategy to support a national biofuel industry that is competitive and sustainable in the global context. Within the strategy, the Biofuels Opportunities for Producers Initiative (BOPI) provides agricultural producers with an opportunity to participate in the emerging biofuels industry and allows them to potentially capture an opportunity early in the development of a facility.

Projects funded through BOPI help producers capture the information that is required to determine whether or not it is prudent to continue to pursue opportunities in the bio-economy.

Performance Indicator	Progress in 2007-08
Number of research agreements between AAFC and industry	OIPC negotiated 496 agreements with research partners. This represents a slight increase from 490 agreements in 2006-07, indicating continued industry interest in the research undertaken by AAFC.

Collaborative research activity with industry partners (including privately and publicly owned, as well as small- and medium-sized enterprises and large enterprises) represents approximately half of AAFC's science collaborations. The knowledge generated through these collaborations is transformed into licensed technologies.

In 2007-08, AAFC licensed 41 technologies, of which 29 were crop varieties, generating royalty revenue of $4.5 million. This amount has remained stable over the past five years, but as commercial activities related to technology promotion increase, licences and licence revenue are expected to rise.

AAFC has a portfolio of approximately 180 patent technologies. Patent filings in 2007-08 decreased 28 per cent from the previous year, due to financial pressures and the cost associated with patent filings.

Performance Indicator

Progress in 2007-08

Level and use of Renewal programs

8,086 producers applied to Farm Business Assessment in 2007-08 with 6,150 of these applications coming from participants in the Canadian Farm Families Options Program (compared to 5,005 applicants in 2006-07). The Options clients had to meet a Renewal cross compliance requirement (participation in FBA, CASS or equivalent service) to be eligible for a year two income support payment. This increased uptake for Renewal programs in 2007-08. 643 producers applied to the SBPS in 2007-08 (compared to 605 applications in 2006-07). 28 producers applied to the PAVE in 2007-08 (compared to 45 applications in 2006-07). 4,638 producers applied to CASS in 2007-08 (compared to 6,660 applications in 2006-07). 2,951 of these were from participants in the Canadian Farm Families Options Program who needed to participate in a Renewal program to qualify for a year two income support payment. For Advisory Services, of the 8,757 applications received for the three services (FBA, SBPS, PAVE) in 2007-08, 8,709 were approved. For CASS, of the 4,638 applications received in 2007-08, 4,532 applications were approved. $64.1 million was spent by Renewal in 2007-08, significantly above the $27.9 million spent in 2006-07, largely due to the demand from Options participants and also due to the approaching program end-date of March 2008. Clients knew that they should not delay their training activities; this put extra pressure on funding.

Renewal programming helps individual farmers and farm families meet their financial goals by providing them with business information, advice and training. This helps them become more innovative, adopt best practices to improve their competitiveness, and adapt to changing market circumstances.

These programs strengthened the sector's capacity for profitability by: assessing financial costs and returns, refining goals, and identifying strategies to control costs and improve market returns; encouraging innovation by providing information on capturing opportunities from science; and helping the sector respond to emerging challenges and opportunities through training and specialized business planning.

Farmers able to meet their financial goals through improved profitability are more likely to be in a position to contribute to an innovative, adaptable and competitive sector.

More details on Innovation and Renewal performance is available online.

Program Activity - Markets and International

Expanding international opportunities for the Canadian agriculture and agri-food sector

Through its international strategy, AAFC aims to use improvements in food quality, safety and environmental sustainability to maximize global sales for Canadian producers and processors. This strategy is based on certain key principles: leveraging domestic program development to maximize international reputation and market access; linking all research and analytical work to create a comprehensive understanding of market opportunities and challenges; engaging industry continuously and through new relationships to ensure maximum effectiveness of programming; and working closely with portfolio partners, other government departments and provinces and territories to ensure international approaches are cohesive and effective.

The strategic objectives of the international component are two-fold: to achieve greater recognition, at home and abroad, of Canada's capacity to meet the demands for quality in a rapidly changing and highly segmented global market; and to expand the agriculture and agri-food sector's access to foreign markets.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
33.7	33.8	34.5
Planned FTEs*	Authorities	Actual FTEs
238	N/A	209

*Full-Time Equivalents

Note: Markets and International activities under the Innovation for Growth strategic outcome accounted for 30 per cent of total Markets and International spending and FTEs in 2007-08. The remaining 70 per cent falls under the Security of the Food System strategic outcome.

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used.

Expected Result	Status
Expanded international opportunities for the Canadian agriculture and food sector	Met

In 2007-08, AAFC measured progress toward this expected result, in part, through the following indicators:

Performance Indicator

Progress in 2007-08

Change in international market share of Canadian agriculture and food exports

The international market share of Canadian agriculture and agri-food (including seafood) exports stabilized at 3.5 per cent of world exports in 2006 and 2007 (the latest years for which data is available). The value of Canadian agriculture and agri-food exports (including seafood) increased from $32.1 billion to $35.5 billion. The number of markets where Canadian agriculture and food exports were valued at more than $50 million increased to 47 in 2007-08, from 43 in 2006-07. Canada's ranking relative to other countries on a value of exports basis remained unchanged at 4th in the world, behind Brazil, the U.S. and the EU.

Canada enjoyed continued success in international markets in 2007-08 based on the safety, quality and predictability of the country's agriculture and food products. In 2007-08:

• products were exported to 195 countries, a nine per cent increase since 2002;
• the value of agri-food trade exceeded $50 million in 47 countries, and $100 million in 40 countries;
• the number of agriculture and food products exported with harmonized system codes of a value of $50 million or greater (an indicator of the wide range of products exported by Canada) increased from 92 to 100 since 2005; and
• the agri-food and seafood trade surplus accounted for $7.9 billion, or 18 per cent, of Canada's overall trade surplus (2007 calendar year).

Performance Indicators	Progress in 2007-08
Number of communications and marketing tools developed to facilitate integration of branding strategy into stakeholder planning and activities	53 communications and marketing products were developed in 2007-08, an increase from 40 in 2006-07
Number of projects completed to facilitate integration of branding strategy into stakeholder planning and activities	42 projects and outreach meetings supported brand integration. These ranged from work with individual sectors to develop sectoral brands, to outreach with provinces, companies and associations
Number of outreach meetings held and usage agreements signed to facilitate integration of branding strategy into stakeholder planning and activities	71 new stakeholders signed usage agreements in 2007-08. In addition, AAFC helped broker the first co-branding agreement between the Canadian Soybean Exporters Association and a Malaysian soy milk company

The Canada Brand for food and agriculture products is designed to leverage the existing strong image of Canada abroad and link it with the products the sector sells. This differentiates those products in an increasingly competitive global market and contributes to industry success.

Research with consumers and buyers in key international markets provides significant support to industry marketing efforts. It helps to understand the demands of buyers, the predisposition of consumers, the types of information that helps sell the products and the market segments most likely to buy Canadian products. The outreach projects to integrate the brand help industry understand the goals of the brand, how they can leverage the available tools and research, and how the brand architecture can help inform their business strategies.

Performance Indicators	Progress in 2007-08
Industry satisfaction with value chain roundtable (VCRT) meetings	Participation at VCRT meetings in 2007-08 was 85 to 90 per cent. Considering industry contributes 50 per cent of related travel and accommodation costs to attend VCRT meetings, this level of participation is a good indicator of the importance industry attaches to the work of the VCRTs
Number of research projects completed in conjunction with industry to support strategic development	15, including 10 studies that resulted in more informed positions in support of sector competitiveness

Value Chain Roundtables engage more than 180 senior industry representatives of Canadian agri-business with many others participating on more than 30 working groups and issue teams. It is the co-operation among all stakeholders that enabled the following achievements in 2007-08:

• industry-led VCRT recommendations were instrumental to the harmonization of pesticide regulation as well as contributing to other regulatory (e.g. organic standards), policy, and program areas;
• VCRTs have adopted a strategic framework with clearly defined objectives that will capitalize on innovation initiatives within AAFC;
• international consumer and buyer research and benchmarking studies have supported new industry strategies resulting in increased exports;
• VCRTs engaged government departments and agencies at the roundtable and working group levels including: Health Canada, Department of Fisheries and Oceans, the Canadian Food Inspection Agency, Department of Human Resources and Social Development, Transport Canada, and Industry Canada. This two-way communication on a range of regulatory, program and strategic investment subjects helped roundtable members better understand government positions and decision making processes, while communicating industry priorities directly;
• VCRT input contributed to the design of Canada's enhanced feedban to control BSE; and
• VCRT policy priorities have contributed to the development of the national Growing Forward policy.

Performance Indicator	Progress in 2007-08
Number of joint activities carried out to promote Canada as a leader in the development of advanced food technologies and agri-related biotechnologies	78 joint activities were carried out, compared to 64 in 2006-07

In 2007-08, joint promotional efforts with industry were an important factor in fostering growth and innovation in Canadian functional foods and natural health products as they:

• helped disseminate knowledge and expertise;
• increased awareness of the Canadian sector and Canadian science capabilities;
• facilitated industry collaboration; and
• ensured the collection and analysis of market opportunities.

In addition, joint activities with key partners, DFAIT and the provinces helped promote Canada as a leader in advanced food technologies and agri-related biotechnologies. In 2007, AAFC's Investment Secretariat addressed more than 200 different companies and potential investment partners from around the world.

Performance Indicators	Progress in 2007-08
Key markets identify Canada as a preferential North American supplier of ruminants and ruminant products	In 2007-08 Canada gained access in key markets for beef exports (Indonesia, Taiwan and the U.S.) and for certain live cattle exports (Russia, the U.S., Mexico, and Barbados).
Key markets (Korea/Taiwan) previously closed to Canada but open to the U.S. become open	Korea and Taiwan were identified as target markets that were open to U.S. beef exports, but closed to Canadian beef exports. In 2007-08 the Taiwanese market opened to under-30-month boneless beef from Canada; however the Korean market remained closed.
Expansion of range of products eligible for export (SRM-free tallow to China, SRM-free MBM to Indonesia, over 30 month beef, under 30 month and over 30 month bone-in beef, live cattle)	The range of products eligible for export was expanded to include Croatia, Russia, Philippines, Indonesia, and Taiwan.

In 2007-08, AAFC worked to leverage the Specified Risk Material feed ban into market access for ruminants and ruminant products.

Following Taiwan's lifting of its ban on Canadian boneless under-30-month beef in June 2007, Canada exported approximately $2 million in beef products to the country between June and December 2007.

Total export values for ruminant and ruminant products to Taiwan increased significantly to $4.1 million in 2007-08, from $208,000 in 2006-07, while export values for ruminant and ruminant products to Korea increased slightly to $2.243 million in 2007-08, from $2.23 million in 2006-07.

In addition, Croatia issued an export certificate allowing live Canadian cattle to be exported to the country, the Philippines granted access for a full range of beef products according to standards from the World Organization for Animal Health, and Indonesia granted access to semen and meat and bone meal which is derived from materials from which SRM has been removed.

Canada secured access to the U.S. for older cattle born after March 31, 1999, and beef from older cattle, with the implementation of the BSE Second Rule on November 19. The U.S. Ranchers Cattlemen Legal Fund continues to challenge the implementation of this rule, and AAFC led the GOC's amicus submission to the U.S. district court.

Canada also secured access to Mexico for breeding stock in February 2008.

Performance Indicator

Progress in 2007-08

Market development strategies in place for each commodity sector group in AAFC

Market development strategies were put in place for most commodity sector groups. The development of the following strategies is currently in progress: - in consultation with industry stakeholders, a strategy that supports the growth and prosperity of the food industry. During 2007-08, background analysis was updated to reflect current challenges and opportunities facing the sector, consultations were initiated, and potential departmental responses and actions were developed. A food industry competitiveness roundtable will be convened by AAFC in 2008-09 to continue work on this strategy guided by the strategic direction established in Growing Forward; and - a branding architecture for Canadian organic products is nearing completion (priority markets have been identified and a comprehensive market development strategy for Europe and the U.S. is being developed).

Market development strategies were put in place for sectors including blueberries, special crops (pulse, mustard, sunflower and canary seed, and hemp), canola, flax, and wheat. A branding architecture for Canadian organic products was developed to help the sector grab a bigger share of the European and U.S. markets.

AAFC views the development and implementation of market development strategies as a joint industry-government responsibility. Thus, progress in this area is a product of intense co-operation between industry and government that has resulted in highly strategic, sustainable market development strategies for various sectors.

More details on Markets and International performance are available online.

Program Activity - Rural and Co-operatives Secretariats

Under the Rural and Co-operatives program activity, the Rural Secretariat co-ordinates a government-wide approach to rural citizen engagement in support of rural policies and programs, while the Co-operatives Secretariat works across government to promote a better understanding of the co-operative model of enterprise and to ensure policies and programs are inclusive of co-operatives.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
27.0	31.3	28.1
Planned FTEs*	Authorities	Actual FTEs
173	N/A	133

*Full-Time Equivalents

Differences between Planned and Actual FTEs are largely the result of a change in the basis of the allocation by program activity. The planned FTEs, determined at the time of preparing the 2007-08 Report on Plans and Priorities, were not available by Program Activity and a notional allocation had to be used.

Rural Secretariat

Expected Result	Status
Better co-ordination of government policy responses to rural community priorities	Met

In 2007-08, AAFC measured progress toward this expected result, in part, through the following indicators:

Performance Indicators	Progress in 2007-08
Number of interdepartmental activities in one fiscal year	Led three inter-departmental activities: - Establishment of a Resource-based Community Working Group with DFO and NRCan; - Inclusion of "regionalization" and "welcoming communities" as priority study areas for immigration projects undertaken by and with Metropolis and ACOA, DEC and FedNor; and - National report on Canadian rural development activities and progress for the United Nations Commission on Sustainable Development (UNCSD) The Rural Development Network (RDN), involving members from 29 departments, held 18 interdepartmental activities
Number of partnership arrangements with other federal departments, provinces and territories, and other stakeholders	Rural teams: 345 regional initiatives (including learning events, workshops, dialogues and research projects) have been achieved since 2006-07. This increase in activity is in large measure a function of increased Rural Team engagement fostered by filling vacant regional advisor positions. Regional activities are a more effective use of limited resources and generate larger scale results
Creation of research and evidence based knowledge regarding rural Canada, community capacity building and rural development	Contributions to research projects in Government of Canada priority areas: Prairie Immigration study; study on Resource-reliant communities (with NRCan); review of community capacity building impacts of certain activities; and study on a selected community's ability to adapt to climate change. These studies will enable the Government to more effectively target future resources and activities by identifying key programming success factors
Usage of or reference to research and tools	Three Rural and Small Town Canada Bulletins were published, in collaboration with Statistics Canada. These free publications provide in-depth, up-to-date accessible information on specific priority rural issues Analysis of Models Program is underway and will be concluded in 08-09; this analysis will provide evidence-based knowledge that will enable federal departments to better implement effective community development approaches The Community Information Database (CID) has shown continued strong usage (800-1,000 visits per month; this use rate has gradually increased since the database was introduced)

Building on lessons learned from Canadian Rural Partnership (CRP) programming and through consultations with partners, in 2007-08 the Rural Secretariat developed a proposed new CRP that moved from development of a comprehensive knowledge base on rural issues, and building partnerships, to the focused use of partnerships with rural stakeholders and other government partners to enhance the capacity of communities to capture economic opportunities through innovative use of their potential (versus reliance on traditional, often extractive, economic activities) and to derive new value from rural amenities.

There are similarities in the economic challenges facing rural resource-based communities, regardless of whether their primary sector is agriculture, fishing, forestry or mining. During 2007-08, the Rural Secretariat worked with Natural Resources Canada and Fisheries and Oceans Canada to develop a coherent federal policy approach to supporting community economy development in resource based communities. While these have not yet involved specific joint projects, consistency in approach and a sharing of best practices can ensure targeted optimal use of resources in support of community development and effective community development strategies as levers to increased sectoral prosperity.

In 2007-08, the Rural Secretariat strengthened its internal inter-departmental policy network (Rural Development Network) and its links with the National Rural Research Network (academics, governments and Stakeholders working on rural development issues) and Rural Teams networks (federal, provincial and territorial and stakeholder networks in each province or territory) to ensure rural issues are considered in federal policy and program development. These networks have broadened their scope to include rural stakeholders.

The Rural Development Network is an inter-departmental committee of approximately 170 policy members representing 29 federal departments and agencies that acts as a bridge between federal government policy analysts and researchers who are interested in rural affairs, and provides a forum for information-sharing and a virtual collaboration tool as a platform to facilitate a better understanding of rural issues and their integration into policy development in the federal government. It works with the National Rural Research Network (external to government) to enhance knowledge about rural issues to better inform policy making. Bio-economic issues, which are a priority across departments, were the major theme in 2008.

Regional initiatives largely driven by Rural Teams under the Rural Secretariat's leadership contributed to the creation of community development opportunities and the mitigation of barriers to economic development for rural citizens and communities across Canada. These initiatives were driven by the communities' priorities. They engaged 1,614 project partners and leveraged a total of $640,000 financial and in-kind contributions (almost 100 per cent matching).

Co-operatives Secretariat

Expected Results	Status
Increased capacity of co-operatives to meet the needs of Canadians	Met
Government policies, programs and services increase opportunities, mitigate barriers, and enhance capacity for co-operative development	Met

In 2007-08, AAFC measured progress toward these expected results, in part, through the following indicators:

Performance Indicators	Progress in 2007-08
Number of partnerships established and maintained with sectoral organizations, other federal departments and provinces	A network of 20 provincial, regional and sectoral partners were involved in the delivery of the Co-operative Development Initiative (CDI) - Advisory services. A partnership with Statistics Canada and HRSDC was implemented for a co-operatives financing survey to assess the need for and availability of capital for new co-operative enterprises and, if any issues exists, identify the appropriate government response.
Change in available research pertinent to co-operatives and co-operative development	Four case studies were produced, ready for publication. Preliminary analysis of the effectiveness of the 1st phase of CDI - funded innovation project was in progress of being finalized so that future program parameters may be adjusted as appropriate.
Use of or reference to research and tools	The Co-operatives Secretariat annual statistical report on co‑operatives is the only Canadian report of its kind, providing comprehensive, accurate data on the co-op sector for use by the research community and the sector itself.
Number of co-operative initiatives supported by the CDI program	CDI - Advisory Services assisted three new co-operatives and 76 existing co-operatives. CDI - Innovation and Research supported 41 projects (29 in previous year - projects are demand driven, and as the initial funding cycle was coming to an end, many proponents submitted proposals at the last minute). Ag-CDI supported 22 value-added agriculture projects in 2007-08, including eight bio-fuel projects. The 2007-08 reception period for projects was only 5 months - from November 2007 to March 2008.

In 2007-08, partnerships were continued with co-operatives sector national associations and their network of regional and provincial associations, in the delivery of CDI-Advisory Services, which built greater relationships among partners and supported the development of new co-operatives while strengthening existing ones.

During 2007-08, the Co-operatives Secretariat extended Ag-CDI (a targeted ag-specific sub-component of CDI) for two years, enabling continued partnership with the co-operative sector to assist farmers who wanted to explore the co-operative approach to capture new agricultural value-added opportunities, including bio-fuels.

The production of case studies and lessons learned from CDI-Innovation funded projects, as well as the collection of co-operatives statistics, increased knowledge about co‑operative growth opportunities and issues for better informed policy decisions, with a view to enhance co-operatives development to meet the needs of Canadians.

Partnership with Statistics Canada and Human Resources and Social Development Canada in building knowledge of co-operative financing issues will assist in future policy development both within AAFC and across departments. This knowledge will complement work undertaken by Industry Canada as part of their Small and Medium Size Business Financing Survey.

Program Activity - Canadian Pari-Mutuel Agency

The Canadian Pari-Mutuel Agency (CPMA) is a special operating agency within AAFC that regulates and supervises pari-mutuel betting on horse racing at racetracks across Canada.

Planned Spending ($ millions) - Net	Authorities ($ millions) - Net	Actual Spending ($ millions) - Net
-	2.7	(0.9)
Planned FTEs*	Authorities	Actual FTEs
65	N/A	57

*Full-Time Equivalents

Expected Results	Status
Enhanced capacity to manage risk in pari-mutuel betting, thereby helping to protect the betting public against fraudulent activities	Met

In 2007-08, AAFC measured progress toward these expected results, in part, through the following indicators:

Performance Indicators	Progress in 2007-08
Tote tests conducted for all Tote systems	100 per cent of all tote systems approved and operating
Percentage of pari-mutuel pools audited	73,157 of 237,015 (31 per cent) of pari-mutuel pools were audited, exceeding target of 25 per cent
Number of samples analyzed	51,840 samples were collected and analyzed from 30,352 races, meeting the targeted average of 1.7 samples per race
Research projects completed	Long-term research projects remain on schedule

In 2007-08, tote testing and regular auditing of pari-mutuel pools continued to ensure betting systems operate in the manner prescribed by the Pari-Mutuel Betting Supervision Regulations, and that statutory deductions and pay-out prices are calculated accurately.

The CPMA's provision of equine drug control programs at Canadian racetracks creates an effective deterrent to those who would attempt to influence the outcome of a race by administering prohibited substances to race horses.

Long-term research projects will help develop drug detection methodologies for anabolic steroids and blood-doping agents. To this end, the CPMA in 2007-08 continued its research in response to an industry request regarding the controlled use of the anti-bleeding medication furosemide, to determine whether an increase in the allowable dosage would interfere with the ability to detect other prohibited substances.

Performance Indicator	Progress in 2007-08
Key review milestones achieved	Ministerial approval included recommended changes to regulatory framework Justice Canada began development of pre-edited version of draft amendments

Establishing a more efficient and effective regulatory model will ensure the interests of the Canadian public are protected whenever they are betting on horse-racing, without unnecessarily inhibiting the ability of racetrack operators to compete in the broader gaming environment.

More details on Canadian Pari-Mutuel Agency performance are available online.

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