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Response to Parliamentary Committees and External Audits

Response to Parliamentary Committees

On October 9, 2009 the Minister of Natural Resources presented to the House of Commons the Government's response to the Standing Committee on Natural Resources' report entitled Combining our Energies: Integrated Energy Systems for Canadian Communities that was presented to the House on June 17, 2009. The response addresses each of the report's nine recommendations in detail.

This response can be found online at:

Response to the Office of the Auditor General (OAG)

As a result of the new Audit Policy, the OAG annually sends the Audit Branch all the previous recommendations it has made to NRCan that are not considered completed for an update.  For 2009-10, the department was asked to update and assess the status of previous recommendations.  Responses were provided accordingly by the audited entities and assessed by the Audit Branch according to their responses.  We however, cannot provide assurance on the responses. 

The OAG audits included:

2005 – 04 OAG Chapter 1 –NRCan– Governance and Strategic Management

For more information on this audit, go to  

Recommendation 1.45
OAG recommends that NRCan should develop a corporate strategic plan to ensure that all sectors address key aspects of its legislation and government priorities. To do so, it should implement a systematic strategic planning process across all sectors.

Response: NRCan has continued to steer the development and implementation of corporate-level planning. Working through a DG level task group, a corporate planning network, and the Strategic Planning & Reporting Division, the Departmental Management Committee (DMC) guides the implementation of the Integrated Planning and Reporting (IPR) processes on a consistent basis across the Department. A DG-level committee led the development of a 2010-13 integrated business plan and of the NRCan story. 

Recommendation 1.56
OAG recommended that NRCan should improve its governance processes specifically with respect to mandates, resources, roles, and responsibilities for the managers of horizontal issues; and develop more strategic governance processes promptly to ensure that its strategies and actions are coherent and that they adequately address key aspects of its legislation and government priorities and are effectively monitored.

Response: NRCan has been undergoing a process of departmental renewal, spurred by the need to develop a more collaborative, integrated and results-based organization. The recent strategic assessment review of priority and performance of NRCan programs and improvements to the governance processes has illustrated how the department had been responsive to the government's agenda in recent years.  NRCan has examined its roles to determine where it can best lead and how it can best help Canada harness the full value of all of its assets to build a stronger, more resilient resource economy. 
Recommendation 1.66
OAG recommended that NRCan should determine and obtain the industry information that it needs to support strategic decision making by producing it internally or obtaining it from outside sources.

Response:  Providing decision-makers with the appropriate information, including industry information, has been a major area of focus for NRCan as information and knowledge have always been at the cornerstone of the department's business. Efforts have focused on means to identify what knowledge was required and facilitate its sharing and integration in support to strategic decision making. NRCan’s governance structure and the various tools put in place (wiki, blogs, etc) enable staff to share it.  The various branches of the Science and Policy Integration sector have and will continue to integrate that information through information-sharing products such as the weekly Natural Resource Dashboard, the monthly Economic Monitor, the annual Report on Plans and Priorities, etc or through documents supporting policy or management-related decisions such as decks, briefing notes, TBS submissions, Memorandum to Cabinet.

Recommendation 1.74
OAG recommended that NRCan should document the competencies and capacities of its current workforce, develop a clear understanding of the competencies and capacities that it will need to develop or acquire to replace the large percentage of key staff eligible to retire in the next few years, and develop and implement a human resources plan that aligns the competencies required with future business needs.   

Response: In October 2009, NRCan launched its "one department" integrated business approach to planning and reporting to integrate corporate enablers into one cohesive departmental plan. The integrated business planning process was supported with integrated planning tools, which were completed at the sub-sub activity level.  A governance structure was established to guide the development of the business plan.  NRCan's first integrated business plan was submitted to the Treasury Board Secretariat (TBS) in early March 2010.

Recommendation 1.96
OAG recommended that NRCan should develop plans and improve its risk analyses to deal with its responsibilities in emergency situations. In particular, NRCan should develop, in co-ordination with other key stakeholders, emergency plans in the areas where it is required to respond to civil emergencies, particularly where it has the lead federal role; and re-examine its risk assessment guidance and apply risk assessment processes consistently across its five operational sectors, including applying a more coherent analysis of the economic impact of potential threats.

Response: Following Public Safety endorsement, NRCan has transitioned from Civil Emergency Plans to a new suite of Emergency Management Plans which came into force on October 1, 2009.  Selected plans were exercised and tested in the series of exercises leading to the Vancouver Olympics Games (Ex SILVER and Ex GOLD).  Exercises requirements are captured in the Emergency Management Planning Directive and are scheduled on a regular basis.

Recommendation 1.111
OAG recommended that NRCan should improve its performance measurement framework and reporting to provide parliamentarians with better information on the results and outcomes of its programs. In particular, it should develop a systematic process for linking performance targets at the corporate level with business plans; and improve its performance reports by including an analysis of its legislated mandate, linking the Department's priorities to government priorities and rationalizing its assessment of its performance against various frameworks.

Response: The 2009-10 strategic review assessment identified improvements required to performance indicators at the strategic outcome and program activity levels.  The department moved quickly and refined its Program Activity Architecture and developed a series of new performance indicators for 2010-11.  A systematic initiative for continuous improvement of the NRCan Performance Measurement Framework is now embedded in the NRCan's annual planning cycle.  Each fall, the department has the opportunity to review its performance indicators at the sub activity levels. 

2006 – 09 CESD Chapter 1 – Managing the Federal Approach to Climate Change

For more information on this audit, go to

Recommendation 1.44
It was recommended that NRCan should ensure that the model, data and results from the 2005 memorandum of understanding with the automotive industry are independently verified and that the results of the publication are reported publicly.

Response: NRCan is has identified an independent third-party to perform a verification of the accounting model used to measure auto industry’s progress against the first interim target established in the memorandum of understanding, and the contracting process is underway. The report on the 2007 interim goal is expected to be released by the end of the 2009/10 fiscal year.
Recommendation 1.45
It was recommended that in any future voluntary agreements, NRCan should establish requirements similar to those found in Environment Canada’s 2001 Policy Framework for Environmental Performance Agreements. While the automotive industry agreement addresses many of these requirements, at a minimum, such future agreements should include
-senior-level commitment by involved parties,
-clearly identified environmental objectives,
-baseline levels measured at the beginning of the agreement,
-clear targets with timelines,
-meaningful performance measures,
-clearly defined roles and responsibilities for all parties,
-consequences for failing to meet targets and incentives for achieving them,
-periodic public reporting requirements,
-provision for regular credible verification, and
-regular evaluation of the agreement to determine progress and options for implementing corrective action, where necessary.

Response: No such voluntary agreements have been established by the OEE since the last update. Obsolete here means N/A.

2006 – 09 CESD Chapter 2 – Adapting to the Impacts of Climate Change

For more information on this audit, go to

Recommendation 2.56
It was recommended that NRCan work with other federal departments and agencies to produce or use information needed for adaptation efforts and with other levels of government and stakeholders, Environment Canada and NRCan should identify and fill gaps in the needed information, including results of impacts and adaptation research and results from climate science; and identify the demand for initiatives that provide decision makers with access to information and technical expertise on adaptation tailored to their needs. Based on that work, they should strengthen existing initiatives and establish others, as required.

Response: As of March 2010, NRCan has signed contribution agreements to implement Regional Adaptation Collaboratives in 5 regions covering all of southern Canada.  NRCan expects to have arrangements in place for the North by May 2010.

2006 – 09 CESD Chapter 3 – Reducing Greenhouse Gases Emitted During Energy Production and Consumption

For more information on this audit, go to

Recommendation 3.27
It was recommended that NRCan should lead the development of a wind power strategy for Canada, in collaboration with the provinces and wind industry. The strategy should provide a vision for wind power in Canada and identify what governments will do to support it, and over what timeframe.

Response: NRCan developed a discussion paper entitled Towards an Enabling Wind Energy Policy Framework in Canada which was the subject of consultations with industry, utilities, environmental groups and provinces in Ottawa and Montreal over the course of 2008. In 2009, NRCan completed the development of a Wind Technology Roadmap, an industry-led report that identifies key issues for wind energy development in Canada and makes recommendations for government and industry. Through the Discussion paper and the Technology Roadmap, NRCan is continuing to support the development of a vision for wind power in Canada.

Recommendation 3.32
It was recommended that NRCan should complete the evaluation of the Wind Power Production Incentive that it committed to in 2002. It should also complete a thorough economic analysis to clarify the extent to which the economics of wind power are changing across Canada and whether there are implications for this program.

Response: NRCan has developed a comprehensive financial model to assess levelized unit cost of wind energy, the impacts of the ecoENERGY for Renewable power program incentive and federal tax measures on the economics of wind power. The model and its results have been the subject of consultations with other Departments and the Wind Energy Industry. The evaluation of the WPPI Program started in 2009 and it is expected to be completed in April 2010.

Recommendation 3.61
It was recommended that NRCan, on behalf of the Government of Canada should make clear to Parliament by the end of 2006 how and to what degree the country will reduce greenhouse gas emissions in the oil and gas sector, both in the immediate and longer term. At the same time, NRCan should develop a corresponding implementation plan.

Response: NRCan recognizes the importance of addressing greenhouse gas emissions in the oil and gas sector. The Government has aligned its GHG reduction target with that of the US, committing to reduce Canada's GHG emissions by 17 percent from 2005 levels by 2020.
Environment Canada (EC) is the lead department for the implementation of the Government's plan to address GHG emissions. NRCan has been engaged in the development of Canada's climate change agenda and will continue to work with EC officials on policy issues related to GHG emissions in the oil and gas sector.

Recommendation 3.66
It was recommended that NRCan should ensure that clear and concrete greenhouse gas reduction targets are established for each of its programs funded for this purpose. The Department should provide clear and detailed information to Parliament about the performance of its programs compared with greenhouse gas emission targets, and the costs incurred.

Response: Estimates of GHG emissions reductions achieved and expenses incurred by NRCan's ecoENERGY programs are reported through the annual Clean Air Agenda Horizontal Performance Reports, which are submitted to Parliament as part of Environment Canada's Departmental Performance Report.  As well, NRCan's programs are included in the Government's annual Climate Change Plan for the Purposes of the Kyoto Protocol Implementation Act, which provides updates on each program's expected emissions reductions during the 2008-2012 period. 

Recommendation 3.68
It was recommended that NRCan should establish consistent practices for financial management and reporting of authorized funding and spending at the program level.

Response: To ensure effective interdepartmental management of clean air initiatives, NRCan is participating with 8 federal departments in the Horizontal Management Accountability and Reporting Framework (HMARF) for the Clean Air Agenda. The HMARF (approved by the Treasury Board on April 3, 2008) establishes consistent practices for the management and reporting of financial information at the program level. In particular, the HMARF provides an integrated view of CAA resources traceable to sources of funds, including allocations from the fiscal framework, and linked to results. NRCan's financial management and reporting practices are aligned with the requirements established under HMARF. For instance, NRCan reports annually on program-level spending through the CAA Horizontal Performance Report, and on planned spending through the CAA Horizontal Report on Plans and Priorities.

For further information, please contact NRCan’s Internal Audit Branch.

KPMG audit of the Geomatics Canada Revolving Fund
KPMG opined that the financial statements present fairly, in all material respects, the financial position of the GCRF as of March 31, 2009, and the results of its operations and the changes in its financial position for the year then ended in accordance with the accounting principles for revolving funds of the Government of Canada. This is the fifteenth consecutive year since the inception of the GCRF that external auditors have issued an unqualified opinion on the financial statements of the Fund.