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ARCHIVED - RPP 2006-2007
National Energy Board

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Analysis by Program Activity

Strategic Outcome

Safety, security, environmental protection and economic benefits through regulation of pipelines, power lines, trade and energy development within NEB jurisdiction.

Program Activity Name: Energy Regulation and Advice

Financial Resources: (million $)

2006-2007 2007-2008 2008-2009
37.9 38.5 38.5

Human Resources:

2006-2007 2007-2008 2008-2009
305.1 FTEs 307.6 FTEs 307.6 FTEs

The NEB’s main business is energy regulation and the provision of energy market information.  The companies that are regulated by the Board create wealth for Canadians through the transport of oil, natural gas and natural gas liquids, and through the export of hydrocarbons and electricity.  As a regulatory agency, the Board’s role is to help create a framework that allows these economic activities to occur when they are in the public interest.

The Energy Regulation and Advice activity is achieved through the following five goals.

Goal 1 - NEB-regulated facilities and activities are safe and secure, and are perceived to be so.

Financial Resources: (million $)

2006-2007 2007-2008 2008-2009
5.9 6.0 6.0

The NEB’s commitment to safety and security encompasses the full lifecycle of energy projects within its jurisdiction.  The NEB's involvement with the safety of a project begins when a company files an application to construct and operate a pipeline, processing plant or power line.  Each application is reviewed from a safety perspective to ensure the project or other facility complies with safety regulations at every stage.

During construction, NEB inspectors address safety by verifying compliance with regulations and approval conditions, and with emergency response plans.  Once the facility is operating, the NEB is concerned about its ongoing safety, including compliance with occupational safety regulations, security, integrity, damage prevention, and emergency response and contingency plans.  The NEB ensures the safety of operating facilities by conducting inspections, investigating safety-related incidents and ruptures, and conducting management system audits.

The sections of the Public Safety Act, 2002 (Bill C-7) amending the NEB Act came into force on 20 April 2005 (through an Order of the Governor General in Council).  The amendments provide the NEB with clear legislative authority for the security of pipelines and international power lines.  The NEB has amended its corporate purpose statement to include the word security to reflect the amendments made to the NEB Act.  The NEB will use information gathered through Pipeline Security Management Assessments conducted in 2004-2005 to develop appropriate security management initiatives.  Security has been integrated into the NEB’s safety performance measures to reflect its expected addition to the NEB’s mandate.

The safety risks associated with facilities and activities regulated by the NEB are managed through competent design, construction, operation and maintenance practices.  The NEB plays a significant role in safety and security by ensuring a regulatory framework is in place that encourages companies to maintain or improve their safety and security performance.  The Board ensures that safety and security risks associated with construction and operation of regulated facilities are identified and managed by pipeline companies.

Performance Measures

  • Number of fatalities per year
  • Number of pipeline ruptures and incidents per year
  • Public perception of safety
  • Number and significance of security infractions

It has been determined that Goal 1 (addressing safety and security) and Goal 2 (addressing the environment) are linked goals, each with its own focus.  For this reason the objectives of the two goals are identical and will therefore be stated once.  Goals 1 and 2 will focus on the following objectives over the planning period.


The NEB has a fully operational integrated compliance system enabling effective risk-based decision-making related to safety, security and environmental protection.

The aim of the NEB's priority to develop an integrated compliance system is to better integrate its application, audit and inspection processes and to optimise the use of resources in the delivery of its mandate.  The integrated compliance initiative will incorporate an improved prioritisation tool for conduct of the NEB inspection and audit programs.  Using risk-based tools, inspections and audits will be focused on facilities and companies that will benefit the most from an NEB inspection or audit. Elements of the initial stages of the integrated compliance program include the application of safety and compliance components; the development of influence diagrams and data components for socio-economic matters, lands and security; and the development of action plans to address compliance issues with emergency management, security management, and unauthorized right of way activities.

Ultimately, the NEB will have tools and resources in place that optimise regulatory oversight, efficiency, and effectiveness throughout the lifecycle of regulated facilities.

The NEB, in partnership with federal and provincial/territorial agencies, has in place harmonized environmental assessment processes.

To achieve regulatory streamlining, the NEB is working with other regulatory agencies and government departments to develop environmental assessment harmonization agreements in order to minimize duplication of efforts and to ensure that the regulatory process meets expectations.   In conjunction with the CEA Agency, the NEB will explore mechanisms such as substitution that allow for effective, single-window environmental and regulatory assessments of NEB-regulated projects.  The Board continues to work to ensure it is well positioned along with its regulatory partners to address emerging issues and future applications.

The NEB has in place mechanisms to collect and disseminate best practices and ensure continual improvement in the design, construction and operation of regulated facilities.

The NEB promotes the complementary goals of safety and environmental protection throughout the lifecycle of projects within its jurisdiction.  Each application is assessed from a safety and security, and environmental perspective to ensure the project will be constructed and operated in an appropriate manner.   This is followed by inspection and monitoring of approved projects during construction and operation, auditing of safety and environmental protection programs, and investigation of reportable incidents.  As the number of facilities nearing the end of their lifespan increases, the NEB will increasingly be called upon to ensure that the abandonment of facilities is done so that safety and environmental protection are maintained.

The NEB’s full lifecycle responsibilities mean that it collects a significant amount of information on the safety and environmental performance of its regulated companies.  This lifecycle responsibility also provides the Board with ongoing, practical lessons about safety and environmental best practices which the NEB applies internally. 

The NEB influences the use of new technology by raising awareness through meetings, partnerships, consultation and communication with industry.  The NEB continues to consult with industry and interested parties to identify opportunities for improvement in areas such as emergency and security management through participation in the Canada Standards Association.  The Board will continue to expand its public reporting to include pipeline integrity, environmental performance indicators, safety and security, and environmental protection and assessment best practices.  The Board also continues to seek new forums for communication and sharing these learnings.

Goal 2 - NEB-regulated facilities are built and operated in a manner that protects the environment and respects the rights of those affected.

Financial Resources: (million $)

2006-2007 2007-2008 2008-2009
4.8 4.9 4.9

Goal 2 expresses the NEB's commitment to protect the environment and respect the rights of those affected by the construction and operation of regulated facilities and activities.  The NEB promotes environmental protection throughout the lifecycle of a project, starting with environmental and socio-economic assessment of proposed projects at the application stage, inspection and monitoring of approved projects during construction and operation, auditing environmental protection programs, investigating spills and releases, and ensuring that the abandonment of projects is carried out properly to protect the environment.

The NEB has worked diligently within the complex and dynamic regulatory framework in which environmental assessments are conducted.  This includes the challenge of navigating environmental assessments through overlapping jurisdictions and different legislative Acts (notably the NEB Act, the COGO Act and the recently amended CEA Act), coordinating with other regulatory agencies and conducting environmental assessments and regulatory processes that are increasingly complex and technically demanding.  To address this, the NEB continues to work with other regulatory agencies, including the CEA Agency, federal departments, provinces and Northwest Territory Boards to improve Environmental Assessment and the coordination of regulatory processes to improve quality, transparency, timeliness and consistency.

As part of the Goal 2 mandate to respect the rights of those affected, the NEB requires regulated companies to engage those people potentially affected by proposed projects.  The NEB also ensures that interested parties can become involved in the NEB hearing process.  Following project approval, the NEB actively follows up on issues brought forward by landowners, and if necessary acts as a facilitator between landowners and companies to ensure issues are resolved.

The construction and operation of facilities within the NEB’s jurisdiction have the potential to adversely impact the environment and the rights of those affected by an NEB‑regulated project.  The NEB has in place and will continue to improve regulations, policies, tools, and procedures that efficiently and effectively ensure that its regulated facilities are designed, built and operated so that the environment is protected and the rights of individuals are respected.

Performance Measures

  • Percent of environmental conditions that achieve their desired end results (DER)
  • Number of major releases[3] into the environment per year


The same objectives apply to Goal 2 as applied in Goal 1.  Please refer to Goal 1 objectives for a description.

Goal 3 - Canadians benefit from efficient energy infrastructure and markets.

Financial Resources: (million $)

2006-2007 2007-2008 2008-2009
10.3 9.5 9.5

The Board strives to ensure that Canadians benefit from efficient energy infrastructure and markets.  The Board contributes to this goal through two main mechanisms: regulatory decisions around the construction and operation of energy infrastructure, and the provision of energy market information.

Pipeline infrastructure is essential to carry energy products from producers to Canadian consumers and export markets.  The NEB-regulated pipeline system carried over $100 billion in oil, oil products, natural gas and natural gas liquids in the last year.  The pipeline structure provides enormous economic benefits to Canadians by transporting these products in a safe and environmentally responsible manner.

Investment in pipeline infrastructure is important to meet the needs of Canadians for energy and can present risk to the investor given the long lead time before the investment is recovered.  Investors require some certainty with respect to the regulatory process and regulatory timelines and reasonable returns on investment.

The Board enables the development of responsible infrastructurethrough efficient and responsive regulatory processes.  The NEB works to provide a transparent and predictable regulatory system in keeping with the federal government’s smart regulation strategy and the NEB’s commitment to goal-oriented regulation.  

The Board is also responsible for ensuring that appropriate tolls and tariffs are in place on pipelines.  The Board strives to promote efficient outcomes that meet the requirements of shippers, while providing energy companies a fair return on capital invested.  The Board has encouraged shippers and pipelines to negotiate as many issues as they can in order to reduce regulatory costs and to avoid adversarial public hearings.  However, the Board recognizes that for negotiations to be fair, there has to be reasonable access to information to enable fair outcomes.  Hence, the Board regularly conducts financial audits of individual pipeline companies, and publishes information on shipper satisfaction and the overall working of the hydrocarbon transportation system.  The Board also monitors financial indicators to assure itself that pipelines have adequate financial strength to effectively carry on business and invest in needed pipeline infrastructure.

The Board monitors energy markets and provides Canadians with a broad suite of information and analysis.  One of the key enablers for improving the efficiency of energy markets is the availability of objective, timely and accurate information.  The Board is in a position to supply decision makers (e.g. individuals, corporations, politicians, tribunals) with market information.  The Board regularly consults with industry and interested Canadians and analyzes regional, national and international energy markets to determine the implications and issues facing Canadians.  The Board works to ensure that energy exports do not occur to the detriment of Canadian energy users by satisfying itself that Canadians have access to domestically produced energy on terms and conditions at least as favourable as those available to export buyers.  The Board also advises the Minister of key energy market developments and provides recommendations from time to time.

Performance Measures

  • Evidence that the Board’s regulatory processes are efficient and effective
  • Evidence that Canadian energy and transportation markets are working well
  • Evidence that advice and information products benefit Canadians

Goal 3 will focus on the following objectives over the planning period.


NEB regulatory processes are efficient, seamless and responsive.

The Board is working to provide clear regulatory rules and efficient processes so that projects found to be in the public interest can proceed on a timely basis.  The NEB has adopted a quality management system to improve its processes by supporting greater transparency and clear accountabilities, all of which contribute to the Board’s ability to enable positive outcomes for Canadians.  The Board is improving its regulatory framework to provide a clear integrated statement of the underlying philosophy and principles, strategies (e.g. goal-oriented regulation), guidance, regulations, and tools to achieve its mandate.  This work will be fundamental to identifying further process efficiencies.

The Board will continue to develop and implement current regulatory efficiency initiatives and tools, such as the smart regulation strategy and lead agency solutions.  The NEB will also continue to develop approaches that enable processes to be adapted to the needs of each case, that are as efficient and flexible as possible, and that incorporate a risk-based management approach.  The Board continues to pursue efforts to implement a goal-oriented approach to regulation as it reviews and updates its regulations and guidelines.  Current projects include the Damage Prevention Regulations, the Canada Oil and Gas Diving Regulations, the Canada Oil and Gas Drilling and Production Regulations and the Submerged Pipeline Regulations.

In response to the need to provide for an appropriate regulatory regime in the North, the Board will be providing recommendations to modernize relevant legislation.  The Board will work with the legislation process owners—INAC and NRCan—to develop a plan to provide recommended revisions to modernize the CPR Act and the COGO Act.  These recommendations will address the provision of regulatory processes suited to the circumstances and nature of production in the North. 

Policy-makers, industry and the Canadian public are better informed on regulatory and related energy matters.

The NEB collects and analyses information about Canadian energy markets through regulatory processes and market monitoring in order to support the Board’s regulatory program and to provide public information to support better decisions by policy makers, industry and the public.  The Board currently produces a number of publications, statistical reports and speeches that address aspects of all the major energy commodities including oil, natural gas, natural gas liquids and electricity. 

The Board will continue to produce Energy Market Assessments to provide Canadians with updates on developments and key issues in specific energy markets.  In addition to providing analysis and observations, the Board will seek to draw attention to policy choices and, where appropriate, provide recommendations for action.  In addition the Board will continue to improve its website to ensure that all Canadians have access to timely information and data on energy prices and key energy market developments. 

In order to better meet stakeholder needs and support informed decision-making, the NEB is developing a suite of differentiated products and communications services for its energy market analysis and observations.   These include media briefings on energy market reports, targeted correspondence, speaking opportunities, and participating in energy related discussions.  The Board will also respond to or create opportunities to promote discussion of issues affecting Canada’s energy future (e.g. conferences, roundtables, speeches, discussion papers).

As part of the Board’s next study of Canada’s long-term energy supply and demand, it will undertake a cross-country consultation with key stakeholders.  The Energy Futures Report will integrate the analysis of energy sector markets undertaken at the Board into a single “all energy” market analysis and outlook.  It provides a link between the short-term and the long-term analysis undertaken by the NEB. 

The NEB is proactive in providing fair outcomes for stakeholders regarding infrastructure investments.

Both investors and interested parties require clarity and predictability around regulatory review processes.  The NEB is continually working to improve this clarity and to this end will be updating the financial portion of its Filing Manual.  The NEB is beginning work to implement an integrated compliance approach to its toll and tariff regulatory program.  This will ensure that there is an integrated approach to the regulation of tolls and tariffs, including clear identification of outcomes, monitoring of success and a systematic mechanism for improvement of processes.

The Board continues to monitor financial markets and consult with pipelines and representatives of the investment community to ensure that pipelines continue to be financially viable.  The Board will assess the functioning of the hydrocarbon system and will continue to report publicly on its findings.

Goal 4 - The NEB fulfils its mandate with the benefit of effective public engagement

Financial Resources: (million $)

2006-2007 2007-2008 2008-2009
2.2 2.2 2.2

Throughout its history, the Board has provided opportunities for the public to participate in the regulatory decision-making process.  In recent years, the scope of these opportunities has grown to include broad consultation on new processes, an increased number of meetings and hearings in affected communities, and a wider range of tools for the public to access information about the NEB’s operations.  This trend of increased participation has occurred in government decision-making at all levels.

Effective citizen engagement requires a commitment by all stakeholders for open, honest and transparent communication.  Parties affected by proposed projects have much at stake and in order to make decisions in the public interest it is critical that the NEB ensures appropriate public engagement.

The quasi-judicial nature of NEB hearings assures fairness and transparency, but can initially be somewhat overwhelming for Canadians not accustomed to tribunal or judicial processes.  Simplified processes, information sessions, Internet accessible regulatory documents and Appropriate Dispute Resolution[4] are methods being used by the Board to address this issue. 

The absence of funding for individuals who wish to participate as intervenors during NEB public hearing processes may be a deterrent in some cases; the NEB is seeking to address this issue.  Hearing participants, and landowners in particular, have argued that this lack of support puts them at a disadvantage during specific hearings as many cannot afford to hire technical experts or lawyers to represent them or take unpaid leave to participate.

By offering opportunities for interested Canadians to be effectively engaged, NEB processes become more accessible to a broad range of stakeholders.  These deliberations will be enriched by having involvement from a broad spectrum of perspectives and ideas.

Performance Measures

  • Stakeholders are involved effectively in the Board’s public processes

Goal 4 will focus on the following objectives over the planning period.


Engagement and communication practices for NEB matters meet the needs of stakeholders.

Stakeholder expectations of regulators have risen in recent years and the NEB is responding to this change.  Canadians are expecting openness, transparency, responsiveness, efficiency and accountability from departments and agencies that are put in place to govern and regulate in the public interest.  Key to providing efficient regulatory processes and practices is enabling all parties impacted by projects that are before the Board for approval to provide input.

The NEB is continuing its work to develop a range of approaches to improve engagement and communication.  A framework is being developed to implement effective engagement and communication practices.  This includes the development of tools to help assess each situation and choose the best approach for that case.  Following on last year’s progress, the NEB will engage key stakeholders to strengthen relationships, will refine public engagement approaches to improve responsiveness, and will continue to offer options such as Appropriate Dispute Resolution as effective tools.  Public and aboriginal engagement plans, including objectives and measures, and follow-up satisfaction surveys will be implemented.  The NEB also promotes engagement best practices of regulated companies; the NEB cannot fulfil its mandate without the cooperation and efforts of regulated companies to build effective consultation programs. 

In the area of aboriginal consultation and engagement, the NEB will assess needs and implement updated processes and systems.  The NEB will consult on, clarify and communicate processes and expectations for aboriginal consultation within NEB processes.  Results of aboriginal consultation initiatives will be evaluated and changes will be made as appropriate over the following years.  Based on work started in 2005, new options for effectively incorporating aboriginal interests in NEB processes will be explored.  Measures for reviewing aboriginal consultation will be developed and aboriginal engagement initiatives will be reviewed to ensure they align with aboriginal consultation needs. 

To support improved engagement and communication, the NEB is providing better access to regulatory and energy information through an updated NEB Internet site.  The Board’s Internet site is the preferred point of contact for many of our stakeholders.  Communication improvement features of the NEB Internet site include a plain language overview that informs Canadians about who we are and what we do, an expanded e-filing system for applicants and intervenors, and an enhanced Commodities Tracking System.

The NEB pursues participant funding in support of harmonized processes.

NEB public proceedings involve a wide range of stakeholders affected by energy infrastructure.  NEB stakeholders include landowners, the general public, aboriginal communities, non-governmental organizations, and energy producers, shippers, distributors and users.   Presently, the NEB is able to provide participant funding only for landowners participating in detailed route hearings, under s. 39 of the NEB Act.  Funding for participation is not available for project assessments under Part III (construction and operation of pipelines) and Part IV (tolls and tariffs) of the NEB Act.  Participant funding is a service widely considered to be a prerequisite for fair, open public access to quasi-judicial and other regulatory processes.  Other Canadian regulatory tribunals (e.g. British Columbia Utility Commission, Alberta Energy and Utilities Board, Ontario Energy Board, Régie de l’énergie du Québec, Canadian Radio-television and Telecommunications Commission) have programs to support participation in their proceedings.  Public participants in federal environmental assessments (panel reviews, comprehensive studies) are entitled to participant funding though the CEA Agency.  The NEB will evaluate options and develop an action plan to address participant funding.  This will include approaches to harmonize processes for federal environmental assessments. Options reviewed will include types of participants and processes eligible for funding; details of cost recovery mechanisms (e.g. whether participant costs are charged to the applicant or shared by all regulated companies); and applicability to northern and frontier regulatory processes under the COGO Act.

Goal 5 - The NEB delivers quality outcomes through innovative leadership and effective processes.

Financial Resources: (million $)

2006-2007 2007-2008 2008-2009
14.7 15.9 15.9

The purpose of Goal 5 is to emphasize the importance of leadership and management accountabilities in order to support the creation and sustainability of a high performance organization that delivers on its commitments.  This goal is about sound business management and effective decision-making.

The NEB’s core work includes, but is not limited to: processing of oil, gas, electricity, commodity, and exploration and development applications within the NEB’s mandate; safe, secure, economic, and environmentally sound construction and operation of approved projects; provision of energy and energy market advice; and support of these activities through human resources, financial, facilities and assets, communication, and information technology infrastructure and systems.  Appropriate elements of the government-wide Modern Comptrollership, including sound risk management practices and integration of financial and non-financial information, have been incorporated into the above core work.  Core work utilizes approximately 80 percent of NEB resources.

An important focus for the NEB over the next planning period will be to address the challenge of recruiting, developing and retaining the technical and analytical expertise that is essential to delivering on expected business results.   In a highly competitive employment market, and at a time of high demand for expertise throughout the energy sector, the NEB has identified ensuring the capacity to deliver on its mandate as a critical issue over the next planning period.

The NEB is continuing to implement an ISO-standard quality management system (QMS) as part of our commitment to remain a respected leader in energy regulation. The business environment has been changing rapidly in recent years with the move toward goal-oriented regulation and the Government of Canada’s smart regulation strategy, and the shifts these entail.  A QMS will assist the NEB in establishing a culture of continuous improvement and ensure consistency in direction and results.   Service level agreements are under development for regulatory processes and corporate service functions.  We will evaluate our efficiency through a comparison of per capita cost of regulation for selected jurisdictions. 

The NEB continues to enhance its performance management system in order to foster a results-based culture of excellence.   Other performance and leadership tools include regular employee opinion surveys to gather information on employee satisfaction; a Leaders Forum to support information and knowledge exchange; and the development of a leadership model and competencies. 

Performance Measures

  • Evidence that the Board’s processes are efficient and effective
  • Employee satisfaction
  • Per capita cost of regulation
  • Progress against planned activities

Goal 5 will focus on the following objectives over the planning period.


The NEB has the necessary capacity to fulfil its mandate.

The period covered by the NEB’s current People Strategy will be a time of great change and challenge, both outside and inside the NEB.  Staff will face increasing demands as a result of globalization, shifts in resource supply and technology changes.  Leaders will be required to implement a results-based approach emphasizing innovation, accountability and risk taking, while dealing with an increasingly diverse workforce.  The NEB will experience intense competition for a smaller pool of knowledgeable, competent employees required to carry out its mandate.  

The NEB is currently in an environment where it must compete with the responsiveness of the private sector in offering competitive wages and benefits.  The rate of attrition due to industry’s active recruitment within the energy sector, and due to impending retirements means that retaining staff at mid and senior levels will become increasingly important to our success.

To meet these challenges, the NEB requires strong leadership, a sustained commitment to creating a highly desirable workplace for all qualified candidates, and an on-going long-term strategy to ensure that the organization has the necessary capacity to fulfil its mandate..

The NEB has created a People Strategy that outlines its long-term needs and approach for recruiting and retaining qualified employees. A first step in implementing this strategy is the assessment of competencies and identification of capacity gaps within the planning horizon, including bilingual capability and appropriate representation.  This will support succession planning and strategies to help ensure capacity to meet the organization’s mandate.

The NEB lives a results-based culture of excellence.

The NEB is committed to demonstrating excellence in all aspects of its work.  In addition to following the Government of Canada’s management direction for accountable government that is responsive to the needs of Canadians, the NEB invests in people, processes, systems and information needs to improve results. 

The NEB has implemented an employee performance management system based on competencies and the delivery of results through a full spectrum performance assessment.  The NEB will implement a scheduled performance management system that links accountabilities with the organization’s priorities.  In order to realize success, accountability statements will be refined and well communicated throughout the organization.  The performance management system is designed to provide employees with feedback to improve on performance through competency assessment and development plans. 

The NEB will continue to place an emphasis on leadership and management accountabilities that support the creation of a high performance organization that delivers on its commitments.  The NEB has focused on creating an organizational culture that demands leadership of all employees, in order to meet the requirement of a high degree of agility and adaptability for today’s work environment.  Investments in learning and development continue to be an important priority for the NEB. 

As part of ongoing culture change the NEB has revitalized its organizational values.  These values reinforce the focus on results and performance.  Implementation of these revised values will be a priority in this planning cycle.

The NEB has a fully operational quality management system.

Since January 2004, the NEB has been working toward the design and implementation of a QMS consistent with the ISO 9001-2000 standard.   An effective QMS will help the organization achieve all of its goals more efficiently.  The documentation of key business processes and associated performance measures will assist our employees in delivering improved service on a consistent basis to our clients. The QMS will influence a number of other strategic projects at the NEB, such as smart regulation, stakeholder-based planning, goal-oriented regulation, integrated compliance, records renewal program and the development of information technology solutions.   

Through QMS, the NEB’s processes and controlling documentation to facilitate repeatable processes have been documented and assessed.  An improved planning process has been implemented, and work has started to improve the measure and improve processes at the NEB.   Further work is required to complete the planned QMS implementation, including ensuring that all major processes and critical processes meet audit standards.  Communication and change management tools are being developed to support an environment of continual improvement throughout the organization. 

Records and information management policies, practices and technology systems will be improved to better support the quality management system and reflect records management systems consistent with those prescribed by the Government of Canada.

All of these activities advance progress toward a results-based culture of excellence.  Through working to address capacity issues, effective leadership, a continual improvement quality management system, and efficient utilization of resources aligned with corporate priorities, the NEB will continue to deliver quality outcomes in meeting its mandate.