To ensure that projects proposed for approval, by the sponsoring Minister or, where required, by the Treasury Board can receive informed and effective consideration.
It is government policy that:
This policy applies to departments listed in Schedules I and II of the Financial Administration Act.
The policy applies to projects and to capital, lease and information technology projects as defined in the Glossary of this volume. It applies to all such projects funded in whole or in part by the federal government regardless of the method of acquisition.
The Treasury Board may designate any collection of activities as a capital project for the purposes of this policy.
This policy does not apply to certain project-like activities funded by the federal government through transfer payments (grants or contributions). Treasury Board policies on financing, managing and approving these activities are provided in the Financial Management volume of the Treasury Board Manual.
Treasury Board Secretariat will use the following criteria to assess departmental performance in meeting the objectives of this policy:
This policy is issued under the authority of section 7 of the Financial Administration Act. This policy replaces the project approval portions of Chapter 540 of the Administrative Policy Manual, and TB Circular 1983-25, May 1, 1983, Approval of Capital Projects and Long-term Capital Plans.
This policy should be read with the other chapters in this volume and other policies, particularly those dealing with risk management, materiel management, real property, information technology management, contracting and common services organizations.
For enquiries related to policy interpretations, contact the Executive Director, Procurement and Project Management Policy Directorate, Comptrollership Branch, Treasury Board Secretariat.
For questions about Treasury Board submissions and departmental program matters, departments should contact their analyst within the TBS Program Sectors and, as appropriate, their specialist analyst in the Real Property and Materiel Policy Directorate, or the Chief Information Officer Branch.
Definitions of the terms used in this appendix are provided in the Glossary of this volume.
Departments normally request PPA when the initial project planning and identification phase is completed but before the project definition phase starts. The formal Treasury Board approval process may be tailored to individual projects and departments, depending on the nature of the risks involved in those projects. Departments should plan and coordinate submissions for approvals to minimize administrative overhead.
In providing PPA, Treasury Board ministers agree that a program requirement has been identified and there is adequate justification for meeting that requirement through a particular project. PPA also provides authorization to expend resources to fully define the selected project option.
The PPA submission must be prepared in accordance with the Treasury Board Submissions Guide volume of the Treasury Board Manual and must include information for each section as follows.
1. The proposal must list all authorities being sought from the Treasury Board, and include:
1.1 the cost objective for the project definition phase, which will establish the total amount of funds approved by the Treasury Board for the purposes of defining the project. The cost objective refers to the substantive cost estimate (as defined in Appendix G to this chapter) for the project definition phase and must include such provisions as the costs of employee benefit plans (20 percent of salaries) for all salaries charged to the project and normal contingencies such as for inflation and foreign exchange. For multi-year undertakings, costs must be expressed in both constant and current dollars; and,
1.2 all other objectives that have been deemed by the department, in consultation with the Treasury Board Secretariat, to be sufficiently critical to require specific authority by the Treasury Board.
2. Once approved, these objectives will serve as the project baseline for monitoring by the Treasury Board.
3. This information is included in either the body of the submission or the project brief, when appropriate.
3.1 The background section identifies a program requirement and provides justification that it is directly related to the department's goals and responsibilities and can be addressed through the effective design and implementation of the appropriate project.
3.2. The total project cost estimate provides an indicative estimate (as defined in Appendix G to this chapter) of the total cost and annual cash flow estimate for the overall project.
3.2.1 The indicative estimate will be refined and improved as the project definition phase proceeds.
3.2.2 This estimate is provided to Treasury Board ministers for information and is not in any way approved by the Board. It is an important consideration as to whether or not PPA will be granted and as such, departments should ensure that the estimate is as accurate as possible at the time they request PPA.
3.2.3 Overall project costs as indicated in the PPA submission may differ in the subsequent EPA submission. If, at the time departments request EPA, the estimated project costs significantly exceed the indicative estimates in the PPA submission, the options analysis must be reviewed to ensure that the selected option continues to represent the most cost-effective approach to fulfilling the requirements. An exception to this general concept is that the Treasury Board, as part of the PPA approval, may wish to impose a "cap" or other constraint on the project. This would force the project to use a "design-to-cost" approach during the project definition phase.
3.3 The overall project schedule provides an estimated milestone schedule for the overall project.
3.4 The summary of comprehensive cost-benefit and options analyses provides information on the options the department has considered and the current status of the recommended option at the time of submission. The detailed analysis, normally incorporated into the project brief, must be based on the fully defined statement of requirement and the life-cycle costing of the asset for each option examined. If the detailed analysis is available in a project brief, the submission itself will provide an outline of the options reviewed and justification for the option that has been chosen.
3.5 The risk assessment section provides the results of the risk assessment conducted for the selected option and a separate assessment for the project definition activity when expenditure authority is being sought. The level of detail of the project risk assessment is to be appropriate for the type of the project. Guidance for project risk assessment and management is provided in Appendix C of the Project Management policy, of this volume.
3.6 The project management approach section provides a summary of the proposed management approach. This approach must be consistent with the project management chapters of this volume.
3.7 The outstanding issues section provides an assessment of any current issues and includes proposals for the resolution of all outstanding issues.
3.8 If any of the following objectives are deemed by the department, in consultation with the Treasury Board Secretariat, to be essential to the success of the project, they should be included in the formal proposal:
3.8.1 schedule objective providing the proposed start and completion dates as well as any critical milestone dates for the project definition phase; and,
3.8.2 performance objective defining the proposed major outputs or deliverables for the project definition phase.
3.9 The procurement strategy for the whole project, as detailed in chapters 3-1 and 3-2 of this volume, must be included if appropriate.
4. Other sections may be required in the submission to cover such topics as industrial, regional or other national benefits, administrative requirements, possible international or other agreements and a communications plan.
5. Treasury Board approval of the PPA will be in the form of a decision letter. The letter may include changes to the proposed objectives as well as other direction from the Treasury Board. Proposed deviations from what has been approved by the Treasury Board should be discussed with the Treasury Board Secretariat at the earliest opportunity to assess whether an amended authority is required.
6. The department is accountable to the Treasury Board for meeting the established baseline and any other directions set out in the decision letter. Appropriate internal accountabilities apply for the delivery of all aspects of the project not specifically approved by the Treasury Board.
Definitions of the terms used in this appendix are provided in the Glossary of this volume.
Departments submit for EPA before starting the project implementation phase. For those projects where the Treasury Board has not provided a PPA, the EPA must include all information required for PPA. The formal Treasury Board approval process may be tailored to individual projects and departments, depending on the nature of the risks involved in those projects. Departments should plan and coordinate submissions for approvals to minimize administrative overhead.
The EPA submission is to be prepared in accordance with the Treasury Board Submissions Guide of the Treasury Board Manual and must include information for each section as follows.
1. The proposal must list all the Treasury Board authorities being sought, including approval for implementing a particular project.
2. The proposal must include the cost objective for the project implementation phase.
2.1 The cost objective refers to the substantive estimate (as defined in Appendix G) of the total resources to be approved by the Treasury Board for implementing the project.
2.2 For multi-year undertakings, costs must be expressed both in constant and current dollars and must include, the costs of employee benefit plans (20 percent of salaries) for all salaries charged to the project, the costs for government project management and normal contingencies such as for inflation and foreign exchange.
3. The proposal must also include any other objectives that have been deemed by the department, in consultation with the Treasury Board Secretariat, to be sufficiently critical to require specific authority by the Treasury Board.
4. Once approved, these objectives will serve as a project baseline for monitoring by the Treasury Board.
5. This information is included in either the body of the submission or the project brief, when appropriate.
5.1 The outstanding issues section provides a final assessment of issues that were outstanding at any previous stage of the Treasury Board's consideration of the project, as well as any current issues. It must include proposals for resolving all outstanding issues.
5.2 A section which provides further cost information supporting the cost objective included in the proposal. Project cash flow estimates must be included for information purposes. The cost estimate must include separate line items for major risk factors. This is used to inform the Treasury Board of potential future expenditures that might be difficult to avoid without abandoning the project.
5.3 The formal risk assessment section provides an updated formal risk assessment for the overall project.
5.4 The project management approach provides the Treasury Board with the necessary assurances that the department has appropriate project accountability, control and management systems in place to monitor the project's progress and react to changing circumstances. The definition of these systems must be consistent with the project management policies of this volume.
5.5 A description of agreements which provides full details of agreements for international cooperation, federal-provincial arrangements or agreements with other government departments. The description must distinguish between existing agreements that affect the project and agreements entered into specifically to further the project or required before progress can be made. Copies of agreements and similar documents must accompany the project submission.
5.6 The administrative requirements section describes the possible impact of the project resulting from existing or potential legislation, policy issues that may arise (including procurement policy when relevant), or organizational or procedural changes required for or resulting from the project.
5.7 A communications plan must accompany the submission whenever the project is likely to attract public attention that will require a response from the government.
5.8 A detailed project objectives section. When, in consultation with the Treasury Board Secretariat, any of these objectives are deemed to be sufficiently critical to warrant specific approval and ongoing consideration by the Treasury Board, they should be included in the formal proposal. Possible project objectives include:
5.8.1 a schedule objective, providing the proposed start date, critical schedule dates and completion date of the implementation phase, supported by the planned time-phasing of the work. The schedule takes into account any time required for the contracting process itself;
5.8.2 a performance objective, describing the proposed major outputs or deliverables of the project. If work is to be performed by private contractors, a description of the deliverables and their relationships to subsequent phases of the project must be included;
5.8.3 an industrial and regional benefits objective, describing (when applicable) the proposed industrial benefits to be achieved during the project's implementation. The objective is to be expressed in quantitative terms, as established during procurement review or through other interdepartmental consultations and agreements; and,
5.8.4 other national objectives, describing (when applicable) other agreed objectives to be achieved during the project's implementation. When feasible, these objectives are to be expressed in quantitative terms, as established through interdepartmental consultations and agreements.
5.9 Departments must estimate future ongoing operating and maintenance expenditures directly attributable to the implementation of the project, including grants-in-lieu of taxes. Departments must also indicate a source of funds for these costs. The purpose of providing this information is to ensure that there will be appropriate funding available to operate or maintain the deliverables once the project is completed.
6. Treasury Board approval of the EPA will be in the form of a decision letter. The letter may include changes to the proposed objectives as well as other direction from the Treasury Board. Proposed deviations from what has been approved by the Treasury Board should be discussed with the Treasury Board Secretariat at the earliest opportunity to assess whether an amended authority is required.
7. The department is accountable to the Treasury Board for meeting the objectives and any other directions set out in the decision letter. Appropriate internal accountabilities apply for the delivery of all project objectives not specifically approved by the Treasury Board.
Definitions of the terms used in this appendix are provided in the Glossary of this volume.
When the present value of a project that is predominantly lease-related exceeds the minister's authority level, the department must obtain an LPA before soliciting bids. The LPA effectively combines the PPA and EPA submissions into a single approval process.
The submission must be made early in the planning phase so that realistic options are available to decision makers. It is therefore, similar to a PPA submission. The LPA submission must also contain information based on market prices and clear assumptions regarding likely costs to adapt the leased asset to operational requirements. The formal Treasury Board approval process may be tailored to individual projects and departments, depending on the nature of the risks involved in those projects. Departments should plan and coordinate submissions for approvals to minimize administrative overhead.
The LPA submission is to be prepared in accordance with the Treasury Board Submissions Guide volume of the Treasury Board Manual and must include information for each section as follows.
1. The proposal must list all authorities being sought from the Treasury Board to implement the Lease Project Approval.
2. The proposal must include a substantive cost estimate objective (see Appendix G), for a lease project, of a specific total value.
2.1 The cost objective must include an estimate of the anticipated cost of the lease arrangement. The estimate must include the expected cost per metre squared of usable space and the net present value of the net rental costs of the lease period. It must also include all anticipated costs for construction (fit-up and building improvement), commissioning, design, moving and any other one-time costs associated with bringing the property into inventory. This includes fees, registration costs and any taxes.
2.2 The costs shown in an LPA should be based on market comparable since the actual costs won't be known until a lease is solicited and negotiated.
2.3 For the purposes of the LPA, lease option periods must be excluded from both the cost estimates and authorities being sought. However, full disclosure is to be made to the approving authority of the options that are intended to be sought and that will be considered in the selection or evaluation state. The exercising of options will be treated as a separate project for approval purposes.
2.4 After the receipt of offers, when a lease contracting authority is sought from Treasury Board for approval, the overall project costs from the lease project approval (LPA) submission must be revised, as appropriate, to reflect actual costs. A revised LPA is required if the cost exceeds the original LPA cost or if project costs are no longer consistent with the original purpose and quality level quoted in the LPA.
3. The operating and maintenance costs and property taxes that will be associated with or included in the lease contract, while not part of the project costs, must be provided for information purposes in order to identify the full costs associated with the project.
4. This information may be included in either the body of the submission or in an accompanying investment analysis report.
4.1 The background section identifies the program requirement for the leased space and provides justification that it can be addressed by the proposed project.
4.2 The cost information section demonstrates how the costs (market comparable) were established.
4.3 The timing section indicates the critical milestones for the project, including the timing of lease solicitation, contract approval, fit-up, base requirements and tenancy.
4.4 A summary of the various options must be outlined. This includes both other lease options that could meet the program requirements and other acquisition strategies such as construction by the Crown. The cost and program implications of each option must be noted.
4.5 The assumptions, risks and uncertainties section outlines the assumptions that have been made about the market and the risks and uncertainties inherent in the proposed lease project approach. It should also indicate the steps that have been taken to manage these factors.
4.6 The outstanding issues section provides an outline of any other issues that require resolution before the bid can be solicited or negotiated.
5. Treasury Board approval of the lease project will be in the form of a decision letter. The letter may include changes to the proposed objectives as well as other direction from the Treasury Board. The department is accountable to the Treasury Board for meeting the project objectives and any other directions set out in the decision letter.
The purpose of this appendix is to outline requirements that are particular to submissions for information technology projects.
In general, the information requirements outlined in appendices A and B must be followed, with the modifications noted below.
1. Demonstrated compliance with government-wide strategies: Through appropriate documentation, departments must demonstrate that the proposal satisfies the strategic directions that the government has adopted for information technology. These include:
1.1 Enhancing services through the innovative use of information and technology: There are five major objectives in this area: renewing services and program delivery; investing strategically; building partnerships; building an open architecture and core infrastructure; and distributing computer power to managers and staff;
1.2 Architecture - standards: Departments must have transition plans for conforming to information technology standards as referenced in an open systems environment model that defines a technical framework or architecture for the development of computer and communications systems in the federal government. This model encompasses the strategic directions of Open Systems Interconnection (OSI), Electronic Service; Portability of Applications; and enterprise-wide Open Systems. The technical approach in the project must comply with Treasury Board Information and Technology Standards (TBITS), which should be quoted in procurement requests; and,
1.3 Mandate of the Chief Informatics Officer: All information technology projects must be consistent with government-wide policies, strategies and technology standards. These policies, strategies and standards aim to improve how government deliver services using information technology. They also provide a basis for the development of more efficient administrative processes in government. Functional direction will be provided by the CIO on interdepartmental projects and cross-government initiatives, such as administrative systems and telecommunications. Additionally, the CIO has issued a draft Blueprint for the re-engineering of government service delivery through improved use of information technology.
2. Departmental plans: The approach taken in the project must be consistent with the department's strategies identified in its information management plan. The proposed strategies will protect investments, foster interoperability and allow competition among suppliers.
3. Use of business case methodology: The business-case approach is the required methodology for identifying, justifying and selecting information technology projects for investments. This approach relates specific project proposals to departmental information technology strategies and plans in the context of program priorities and measurable improvements in program performance.
4. Costs: For either PPA or EPA, costs relate to project cost only. All direct costs should be identified, including all departmental resources involved in designing, developing and acquiring software; all implementation aspects (eg. documentation, training, testing and installation), as well as the cost of acquiring the information technology hardware.
5. Project brief: In most instances, a project brief will be required to explain the complexities of the business case and of the systems development. Additional information on the project brief is provided in Appendix F.
6. Human resource strategy: Information technology projects will usually have significant impacts on job requirements, training and staff deployment. The submission must include an analysis of the human resource impact of the proposed project and the departmental strategies for addressing these impacts. Such strategies would normally include a plan for consulting with unions and affected personnel.
7. Other related legislation and policies: Proposed projects must demonstrate compliance with the following:
7.1 Security requirements: These must be reviewed early in the project. For guidance on technical security features, consult Treasury Board Information and Technology Standards (TBITS) 6.6, Security Profile. This profile provides a linkage to the Canadian Government Information Technology (I.T.) Security policy, standards, and guidelines; and, provides guidance on the implementation of secure interoperable systems.
7.2 Information management and privacy: The project must adhere to government policy and departmental practices for information management and the collection and use of personal information.
8. Funds: Departments must provide information on operating and maintenance expenditures covering a five-year period following project implementation. Departments must also indicate a source of funds for these expenditures. The purpose of providing this information is to ensure that there will be appropriate funding available to operate or maintain the deliverables once the project is completed.
Further information on specific requirements for information technology projects may be obtained from the Information Management volume of the Treasury Board Manual or by contacting the Office of Information Management, Systems and Technology.
Note: This is a compilation of authority limits provided specifically by Treasury Board to individual ministers. This compilation is provided for information only.
| Department/Agency | Real Property | Information Technology | All Other Projects | ||
|---|---|---|---|---|---|
| General | Special | New | Replacement | ||
| Agriculture and Agri-Food Canada Prairie Farm Rehabilitation Administration | $5M | $15,000 | $5M | $10M | $1M |
| Canada Customs and Revenue Agency | Exempt | Exempt | Exempt | Exempt | Exempt |
| Canadian Food Inspection Agency | $5M | n/a | $2M | $5M | $1M |
| Canadian Heritage | $1M | n/a | $2M | $5M | $1M |
| Canadian International Development Agency | $1M | n/a | $2M | $5M | $1M |
| Canadian Security Intelligence Service | $1M | n/a | $2M | $5M | $1M |
| Canadian Space Agency | $5M | n/a | $5M | $5M | $5M |
| Citizenship and Immigration Canada | $1M | n/a | $5M | $10M | $1M |
| Correctional Service Canada construction projects | $1M | $18M | $2M | $5M | $3M |
| Department of Foreign Affairs and International Trade (see note)Staff Quarters and Miscellaneous Chanceries - Lease Chanceries - Construction Official Residences | $1M | $30M | $2M | $5M | $1M |
| Environment Canada | $2.5M | n/a | $2M | $5M | $2.5M |
| Fisheries and Oceans Canada | $20M | n/a | $2M | $5M | $20M |
| Health Canada First Nations and Inuit Health Branch | $1M | $2M | $5M | $10M | $1M |
| Human Resources Development Canada | $1M | n/a | $5M | $10M | $1M |
| Indian and Northern Affairs Canada | $15M | n/a | $2M | $5M | $1M |
| Industry Canada | $1M | n/a | $2M | $5M | $1M |
| National Defence construction projects | $1M | $60M | $30M | $30M | $30M |
| National Library of Canada | $1M | n/a | $2M | $5M | $1M |
| National Research Council Canada | $5M | n/a | $2M | $5M | $5M |
| Natural Resources Canada | $5M | n/a | $5M | $10M | $5M |
| Parks Canada New National Parks, National Marine Conservation Areas, National Historic Sites | $10M | $15M | $1M | $3M | $1M |
| Public Works and Government Services Canada office space | $5M | $30M | $2M | $5M | $1M |
| Royal Canadian Mounted Police detachments and subdivisions | $3M | $5M | $5M | $10M | $3M |
| Statistics Canada | $1M | n/a | $5M | $10M | $1M |
| Transport Canada | $15M | n/a | $15M | $15M | $15M |
| Veterans Affairs Canada | $1M | n/a | $2M | $5M | $1M |
| All other departments and agencies | $1M | n/a | $1M | $3M | $1M |
Notes:
1. A project brief must accompany all submissions for Major Crown projects. While a project brief is not always required for other projects, it may be useful for submissions of complex and significant projects. It provides a summary of the full scope of the project, permitting the PPA and EPA documents to be written as succinctly as possible.
2. The project brief includes descriptions of:
2.1 the relationship of the project to the sponsoring department's mandate and programs and to government-wide objectives;
2.2 the scope, cost and other critical objectives that form the project baseline;
2.3 the level of service or capability to be developed or improved and a general description of the end product;
2.4 the results of benefit-cost and option analyses and a description of each option considered. Comparison of options should be based on at least a preliminary asset life-cycle cost estimate for each. Any strategic direction that has been given approval-in-principle or that limits available options should be provided;
2.5 the management approach to the overall project including the following:
2.5.1 the phasing of major work and the approach proposed for managing the project throughout its life;
2.5.2 the proposed timing of reports to the Treasury Board (in the case of Major Crown projects) and future submissions, when required;
2.5.3 the roles of participating departments and of the different units within the department,
2.5.4 the nature and extent of consultation with the Treasury Board Secretariat and other central agencies;
2.5.5 other features of the project that could affect its progress; and,
2.5.6 the options for terminating federal involvement.
2.6 The estimated schedule from the start of project definition to completion of the project. The schedule has appropriate allowances for the time required between the end of project definition and the start of project implementation. It also includes the proposed strategy for soliciting and awarding relevant contracts; and,
2.7 Agreements involving: international cooperation, federal-provincial relations or other government programs, joint federal-provincial undertakings, environmental assessments, reduction of regional disparities, or other national objectives applicable to the project. The description must distinguish between existing agreements that affect the project and agreements entered into specifically to further the project, or required before progress can be made. Drafts of agreements and similar documents should accompany the project brief.
3. Information requirements as identified under "Supporting Documentation" in Appendices A, B and C must also be included in the brief.
1. This appendix is intended to clarify the use of cost estimates in PPA, EPA and LPA submissions.
2. Cost estimates must have a sufficiently high degree of quality and reliability to support Treasury Board's consideration of the project or specific phase of the project. In general, this will be a substantive cost estimate as defined below. Project approval, at either the definition or implementation phase, will include a cost ceiling (or cost objective) for the specified deliverables and timeframe. This establishes the baseline objectives against which the project team and departmental management can reasonably be held accountable.
3. For greater clarity, previous classes of estimates (A, B, C, and D) have been replaced by two types of estimates, substantive and indicative estimates.
4. A substantive estimate is one of high quality and reliability and is based on:
4.1 detailed system and component design, design adaptation, workplans and drawings for components, construction or assembly, and installation. It includes site acquisition, preparation and any special requirements estimates. Contingency funding requirements must be justified based on line-by-line risk assessments, including market factors, industrial capability and labour considerations;
4.2 all significant and identifiable deliverables, as well as the costs of the government's contribution to employee benefit plans (20 percent of all salaries charged to the project);
4.3 all agreed objectives, including those resulting from procurement review; and,
4.4 market assessment, where acquisition is through lease, lease purchase or capital lease. The provisional allowance for fit-up or special tailoring requirements will be subject to review and possible revision at the contract approval stage.
5. When preparing the substantive estimate, the department must consult with appropriate common service organizations and its own operational and maintenance authorities.
6. In some cases, with the agreement of the department, the Treasury Board will use the substantive estimate as a form of a cap or design-to-cost figure.
7. An indicative estimate is an order-of-magnitude estimate that is not sufficiently reliable to warrant Treasury Board approval as a cost objective. It provides a rough cost projection used for budget planning purposes in the early stages of concept development of a project. It is usually based: on an operational statement of requirement (SOR), a market assessment of products and technological availability that would meet the requirement and other considerations such as implementation, life cycle costs and operational savings. The estimate will improve as the department:
7.1 invests in further concept development and prepares the SOR in greater detail;
7.2 identifies levels of risk and the corresponding costs to reduce them;
7.3 carries out a preliminary analysis of sources of supply;
7.4 assesses technological and production readiness; and,
7.5 identifies and refines the activities within the project definition and implementation phases.
8.When developing the estimates, the department must consult with appropriate common service organizations.