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The Honourable James M. Flaherty
Minister of Finance
Section II: Analysis of Program Activities by Strategic Outcome
Section III: Supplementary Information
Section IV: Other Items of Interest
Canada is on the best economic and fiscal footing of any G7 nation, with the lowest debt burden and the highest employment rate in more than 30 years. To maintain our position of strength, we must respond to a complex and fast-changing world. We not only have to do things right; we must also do the right things. We must make sure we have the political will and the comprehensive programs to improve government effectiveness. In Budget 2006, we made reductions in every way the federal government taxes Canadians. We are absolutely committed to balanced budgets, debt reduction, controlled spending, and reducing the regulatory burden on business. |
Canada's economy has been performing well in recent years, but we still face many challenges. To remain at the economic forefront, we introduced a long-term economic plan, Advantage Canada, that will shape Canada's future and improve the quality of life for families, students, workers, and seniors.
Advantage Canada recognizes the government's obligation to manage Canadians' hard-earned tax dollars effectively and efficiently—and we take that responsibility very seriously. To honour that trust, we must be fiscally prudent.
This Report on Plans and Priorities highlights the Department of Finance Canada's key strategies and goals for supporting the government's fiscal and economic priorities.
The Department plays a vital role in helping the government develop the kind of social and economic policies needed for ongoing economic growth and a better quality of life for all Canadians.
It will continue to ensure that government spending is focussed on results and delivers value for taxpayer dollars.
As this Report on Plans and Priorities makes clear, the government will continue to take the steps needed to build an even stronger economy and to make this country a world leader.
I submit for tabling in Parliament the 2007–08 Report on Plans and Priorities (RPP) for the Department of Finance Canada.
This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2007–2008 Estimates: Reports on Plans and Priorities and Departmental Performance Reports.
The paper version was signed by
Rob Wright
Deputy Minister
Department of Finance Canada
The following abbreviations are used in this report:
AML | Anti-money laundering |
ATF | Anti-terrorist financing |
CCA | Capital cost allowance |
CHT | Canada Health Transfer |
CHST | Canada Health and Social Transfer |
CPP | Canada Pension Plan |
CST | Canada Social Transfer |
EBRD | European Bank for Reconstruction and Development |
FATF | Financial Action Task Force on Money Laundering |
FINTRAC | Financial Transactions and Reports Analysis Centre of Canada |
FSAP | Financial Sector Assessment Program |
G7 | Group of 7 leading industrialized countries |
G8 | G7 nations plus Russia |
G20 | The members of the G20 are the finance ministers and central bank governors of 19 countries, plus the European Union |
GDP | Gross domestic product |
GST/HST | Goods and Services Tax / Harmonized Sales Tax |
HIPC | Heavily Indebted Poor Countries |
IAE | International Assistance Envelope |
IDA | International Development Association |
IMF | International Monetary Fund |
OECD | Organisation for Economic Co-operation and Development |
PCMLTFA | Proceeds of Crime (Money Laundering) and Terrorist Financing Act |
PRGF | Poverty Reduction and Growth Facility |
RCM | Royal Canadian Mint |
SDS | Sustainable Development Strategy |
TFF | Territorial Formula Financing |
WTO | World Trade Organization |
Reason for existence: The goal of the Department of Finance Canada is to foster a strong economy, resulting in higher standards of living and an improved quality of life for Canadians. |
2007–08 |
2008–09 |
2009–10 |
75,817,194 |
77,337,194 |
79,261,798 |
2007–08 |
2008–09 |
2009–10 |
798 |
789 |
789 |
Planned Spending ($ thousands) |
||||
Name |
Type |
2007–08 |
2008–09 |
2009–10 |
1. Sound Fiscal Management |
Ongoing |
34,874,916 |
34,824,630 |
34,866,557 |
2. Sustainable Economic Growth |
Ongoing |
39,206 |
38,060 |
38,193 |
3. Sound Social Policy Framework |
Ongoing |
40,345,750 |
41,921,260 |
43,834,463 |
4. Effective International Influence |
Ongoing |
557,323 |
553,244 |
522,585 |
Total Planned Spending |
75,817,194 |
77,337,194 |
79,261,798 |
Expected Results |
Planned Spending |
||||
2007–08 |
2008–09 |
2009–10 |
Contributes to the Following Priority (Priorities) |
||
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government's overall agenda. |
|||||
Tax Policy | Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue | 30,400 | 30,517 | 30,048 | Sound Fiscal Management; Sustainable Economic Growth; Sound Social Policy Framework |
Sound fiscal relationships with provinces, Aboriginal governments, and other countries | 2,288 | 2,297 | 2,262 | Sound Fiscal Management; Sustainable Economic Growth; Sound Social Policy Framework | |
Economic and Fiscal Policy | Transparent fiscal planning and sustainable fiscal policy | 6,229 | 6,253 | 6,253 | Sound Fiscal Management |
Effective analysis of economic performance | 8,778 | 8,812 | 8,812 | Sustainable Economic Growth | |
Financial Sector Policy | Prudent and cost-effective treasury management of the borrowing activities of Crown corporations and the government's investment portfolios | 3,370 | 2,971 | 3,067 | Sound Fiscal Management |
A regulatory framework that promotes a sound, efficient, and competitive Canadian financial sector that serves the needs of individuals, businesses, and the economy | 10,599 | 9,343 | 9,646 | Sustainable Economic Growth | |
A legislative and regulatory framework that ensures the security and viability of federally regulated defined benefit pension plans | 971 | 856 | 883 | Sound Social Policy Framework | |
An effective anti-money laundering (AML) and anti-terrorist financing (ATF) framework | 3,172 | 2,797 | 2,887 | Effective International Influence | |
Economic Development and Corporate Finance | Sound advice to the minister on economic, funding, and policy proposals | 8,289 | 8,321 | 8,321 | Sound Fiscal Management; Sustainable Economic Growth; Sound Social Policy Framework |
Federal-Provincial Relations and Social Policy | A principled framework to restore fiscal balance in Canada | 7,032 | 7,060 | 7,059 | Sound Fiscal Management |
Sound advice to the minister on government social policy priorities | 5,265 | 5,285 | 5,285 | Sound Social Policy Framework | |
International Trade and Finance | Secure access to key markets for Canadian exporters and investors | 6,445 | 6,470 | 6,469 | Sustainable Economic Growth |
Canadian leadership and influence in international forums on international economic, financial, development, and trade finance issues | 9,433 | 9,469 | 9,469 | Effective International Influence | |
Public Debt | Stable low-cost financing for the Government of Canada | 34,597,000 | 34,545,000 | 34,585,000 | Sound Fiscal Management |
A well-functioning market in Government of Canada securities | 100,000 | 100,000 | 100,000 | Sound Fiscal Management | |
Domestic Coinage | A supply of coinage at a reasonable cost | 145,000 | 147,000 | 149,000 | Sound Fiscal Management |
Transfer Payments to Provinces and Territories | Administration of federal transfer payments to the provinces and territories, including Equalization, Territorial Formula Financing, the Canada Health Transfer, and the Canada Social Transfer | 40,328,203 | 41,903,765 | 43,817,109 | Sound Social Policy Framework |
International Financial Organizations | Payments to international organizations and Canadian creditors consistent with our commitments | 544,717 | 540,978 | 510,229 | Effective International Influence |
Total Department of Finance Canada | 75,817,194 | 77,337,194 | 79,261,798 |
Note: The planned spending figures associated with each expected result are estimates based on management representation.
The goal of the Department of Finance Canada is to foster a strong economy, resulting in a higher standard of living and an improved quality of life for all Canadians.
The Department is committed to making a difference for Canadians by helping the Government of Canada develop and implement strong and sustainable economic, fiscal, social, security, and financial sector policies and programs.
The Department serves as the government's primary source of analysis and advice on the economic, fiscal, and tax implications of key government priorities. Its responsibilities include preparing the federal budget, developing tax and tariff policy and legislation, managing federal borrowing on financial markets, administering major transfers of federal funds to the provinces and territories, developing regulatory policy for the country's financial sector, and representing Canada within international financial institutions.
The Department's mission is to support the minister of Finance by providing the best possible analysis and policy advice on economic, fiscal, social, and financial issues; implementing government decisions in a timely and efficient manner; and communicating government decisions in the clearest way possible, within and outside government. Its mission is also to act as an effective conduit for the views of participants in the economy from all parts of Canada and to maintain high-quality support systems and development programs to carry out the Department's functions.
In support of its mission, the Department has one strategic outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government's overall agenda.
Under its Program Activity Architecture, the Department has established 10 program activities to support its strategic outcome:
The Department of Finance Canada is actively involved in the government's policy and legislative agenda, helping develop and implement fiscal, economic, social, and financial policies and programs. The Department is involved in the four policy areas of the Whole-of-Government Framework: economic, social, international, and government affairs. Its responsibilities include preparing the federal budget, developing tax and tariff policy and legislation, managing federal borrowing on financial markets, administering major transfers of funds to provinces and territories, developing regulatory policy for the country's financial sector, and representing Canada in international financial institutions and forums.
The operating environment of the Department is characterized by the following:
An important component of the work conducted by the Department involves consultation and collaboration with partners in both the public and private sectors. Its primary partners and clients include the following:
The Department provides analysis, advice, and recommendations regarding economic, social, federal-provincial, and financial affairs and tax matters. It also provides instructions about how to draft legislation in many of these areas.
The Department acts as the primary sponsor of bills on taxation, federal and provincial/territorial transfers, and financial matters and manages them through the parliamentary process. It also supports the minister of Finance in the fulfillment of his or her parliamentary responsibilities.
The Department supports an expanded program of public information and consultation. This includes responding to requests for information and providing opportunities for Canadians to participate in open, broad-based consultations on key economic, social, fiscal, and tax issues.
The Department plays an active role in encouraging coordination and harmony among all federal initiatives that affect the economy, the financial sector, and financial markets.
The Department develops and administers transfer payments in support of social programs and works with the provinces and territories on fiscal, taxation, financial sector, and other issues of concern to all governments. It also works with these other jurisdictions as joint stewards of the Canada Pension Plan (CPP) to ensure that the CPP remains financially secure and stable.
The Department deals with issues affecting federal financial institutions. It develops the rules and regulations that govern these institutions so they remain safe and sound and are responsive to consumers' needs. The Department also deals on an ongoing basis with a range of market participants, including banks, securities dealers, and investors, in fulfilling its responsibility for managing the public debt and international reserves.
The Department plays a key role in promoting a strong multilateral system of global economic and financial governance. The most important role in this regard is support for the minister's participation in the G7, G8, and G20 processes. The Department also has a lead role in managing the country's activities related to international and financial organizations, such as the International Monetary Fund (IMF), the World Bank, the European Bank for Reconstruction and Development (EBRD), the Financial Action Task Force on Money Laundering (FATF), and the Financial Stability Forum. The Department also plays an important role in other organizations, such as the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization.
The Department plays an important role in negotiating Canada's trade arrangements with other nations and monitoring how those arrangements serve Canada's interests.
The Department plays an active and leading role in representing Canada internationally. The Department supports the minister of Finance's involvement in the G7 process, as well as his involvement in other key ministerial forums, including the G8 and G20 finance ministers' processes, and IMF and World Bank meetings. These and similar processes are important forums for exchanging views and forging consensus on measures to strengthen global economic growth, promote financial stability, and reduce global poverty.
The Department's activities are undertaken in the context of a rapidly integrating, technology-driven global economy. Events that take place far from Canada can have a powerful impact, both adverse and beneficial, on Canada's economy.
To support its work on international economic issues, the Department holds extensive consultations not only within the federal government but also with provincial governments, the private sector, civil society, and the Canadian public.
The Department must manage the financial risks associated with the government's financial assets and liabilities. It must be ready to respond to economic and financial developments by taking prompt and decisive action to mitigate, where appropriate, their effects on the Canadian economy and fiscal framework.
The Department is also committed to ensuring that all of its employees and activities, at the personal, professional, and organizational levels, meet the highest standards of ethical conduct and accountability.
The Internal Audit and Evaluation Division (IAED) is responsible for developing risk-based audit and evaluation plans, as well as for the conduct of internal audit and evaluation engagements that meet professional standards. Internal audits and evaluationsare selected based on potential risks and exposures and areidentified annuallyin the respectiverisk-based audit and evaluation plans, which are approved by the Internal Audit and Evaluation Committee chaired by the deputy minister. The Committee also reviews and approves audit and evaluation reports, and their corresponding management action plans.
The new Treasury Board Policy on Internal Audit came into effect on April 1, 2006, that significantly increases the requirements of deputy heads, audit committees, and internal audit functions in the federal government. In response to the new Policy and additional requirements embedded in the Federal Accountability Act, the Department is undertaking significant efforts to strengthen internal audit capacity and delivery processes. Specifically, IAED has developed a comprehensive three-year plan to implement the structure and activities required to adhere to the Policy. In 2006–07, significant progress was made to develop the internal audit capacity within the Division. IAED will continue to build this capacity to ensure that the Department has a sufficient, competent, and professional internal audit function in place. Regarding program evaluation, a needs assessment review is being undertaken to identify and assess program evaluation requirements for the Department.
The Department has established four key priorities in support of its mission. Figures 1 to 4 summarize the key expected results planned by the Department under each of the four priorities by program activity. Section II provides more details on the expected results, ongoing initiatives, and key commitments for each of the 10 program activities.
A strong economy requires sensible, strong financial management and leadership. Canada's solid macroeconomic framework, which includes transparent fiscal management, underpins healthy economic growth and helps ensure the sustainability of our social safety net. A sound fiscal structure also includes a competitive, efficient, and fair tax system to promote economic growth, create jobs, and boost living standards in a fiscally sustainable manner.
Solid macroeconomic fundamentals have placed Canadians in a good position to capitalize on both domestic and global economic opportunities. This has allowed the government to reduce the public debt burden and, in turn, invest in important economic and social priorities, while also delivering significant tax relief to all Canadians.
The Department of Finance Canada will play a major role in keeping the government focussed on what it does best: improving services and helping build a climate for the overall economy to perform better. The Department will help ensure that spending is responsible, operations are efficient, and results are effective and accountable to taxpayers.
Program Activity |
Expected Results |
Tax Policy |
Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue Sound fiscal relationships with provinces, Aboriginal governments, and other countries |
Economic and Fiscal Policy |
Transparent fiscal planning and sustainable fiscal policy |
Financial Sector Policy |
Prudent and cost-effective treasury management of the borrowing activities of Crown corporations and the government's investment portfolios |
Economic Development and Corporate Finance |
Sound advice to the minister on economic, funding, and policy proposals |
Federal-Provincial Relations and Social Policy |
A principled framework to restore fiscal balance in Canada |
Public Debt |
Stable low-cost financing for the Government of Canada A well-functioning market in Government of Canada securities |
Domestic Coinage |
A supply of coinage at a reasonable cost |
Government plays an important role in ensuring that Canadian people, businesses, and organizations have the advantages they need to succeed on a global scale. Therefore, the Department puts a key focus on sustainable economic growth by developing and implementing policies and programs that provide appropriate support for the drivers of productivity growth: physical, financial, and human capital and innovation.
As a key source of economic advice to the government, the Department helps ensure that the policies and programs adopted create the framework and conditions necessary for sustainable long-term economic growth by supporting physical investment, and research and development and by helping Canadians acquire skills.
Program Activity |
Expected Results |
Tax Policy |
Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue Sound fiscal relationships with provinces, Aboriginal governments, and other countries |
Economic and Fiscal Policy |
Effective analysis of economic performance |
Financial Sector Policy |
A regulatory framework that promotes a sound, efficient, and competitive Canadian financial sector that serves the needs of individuals, businesses, and the economy |
Economic Development and Corporate Finance |
Sound advice to the minister on economic, funding, and policy proposals |
International Trade and Finance |
Secure access to key markets for Canadian exporters and investors |
The Department contributes, through its analysis and advice, to the government's efforts to meet its objectives for the quality of Canada's communities, health care, education, social safety net, and equality of opportunity for all citizens.
The government supports social programs delivered by provinces and territories by means of transfers of resources to provincial and territorial government treasuries. The Canada Health Transfer (CHT) is the primary federal transfer in support of health care, and the Canada Social Transfer (CST) is provided in support of post-secondary education, social assistance, and social services, including early childhood development, and early learning and childcare. Equalization payments enable less prosperous provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces at reasonably comparable levels of taxation. Finally, Territorial Formula Financing (TFF) is the key unconditional transfer to the three territorial governments. The Department administers these transfers and undertakes regular consultations with provinces and territories.
The Department will assist government partnerships with the provinces and the private sector in strategic areas that contribute to strong economies—including primary scientific research, a clean environment, and modern infrastructure.
Program Activity |
Expected Results |
Tax Policy |
Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue Sound fiscal relationships with provinces, Aboriginal governments, and other countries |
Financial Sector Policy |
A legislative and regulatory framework that ensures the security and viability for federally regulated defined benefit pension plans |
Economic Development and Corporate Finance |
Sound advice to the minister on economic, funding, and policy proposals |
Federal-Provincial Relations and Social Policy |
Sound advice to the minister on government social policy priorities |
Transfer Payments to Provinces and Territories |
Administration of federal transfer payments to the provinces and territories, including Equalization, Territorial Formula Financing, the Canada Health Transfer, and the Canada Social Transfer |
Improving and sustaining the living standards and quality of life of Canadians in an increasingly competitive and integrated global economy continue to be key departmental objectives. These include maintaining secure and open borders, working to strengthen global growth and stability, advancing Canada's trade and investment interests, and helping foster development to reduce global poverty.
In representing Canada in a wide range of international economic organizations, the Department contributes to policies and measures to increase global economic growth, promote global financial stability, encourage policies to reduce poverty in developing countries, and advance international standards to prevent abuses to the international financial system, including terrorist financing.
The Department will also assist the government in creating the right economic conditions to encourage Canadian firms to invest and flourish, and to be open to trade and foreign investment so goods, services, and technologies flow freely into Canada and Canadian firms have ready access to foreign markets to compete with the best in the world.
Program Activity |
Expected Results |
Financial Sector Policy |
An effective anti-money laundering (AML) and anti-terrorist financing (ATF) framework |
International Trade and Finance |
Canadian leadership and influence in international forums on international economic, financial, development, and trade finance issues |
International Financial Organizations |
Payments to international organizations and Canadian creditors consistent with our commitments |
Section II provides detailed information on how each of the Department of Finance Canada's 10 program activities supports the Department's strategic outcome and priorities over the reporting period.
The Department has one strategic outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government's overall agenda.
The Department continues to maintain a balanced approach that will ensure a sustainable fiscal structure, encourage a more productive, competitive, and dynamic Canada, and support and sustain Canadian society.
Figure 5 summarizes how each of the Department's 10 program activities is linked to its four priorities.
Program Activities |
Priority 1 Sound Fiscal Management |
Priority 2 Sustainable Economic Growth |
Priority 3 Sound Social Policy Framework |
Priority 4 Effective International Influence |
1 Tax Policy |
√ |
√ |
√ |
|
2. Economic and Fiscal Policy |
√ |
√ |
|
|
3. Financial Sector Policy |
√ |
√ |
√ |
√ |
4. Economic Development and Corporate Finance |
√ |
√ |
√ |
|
5. Federal-Provincial Relations and Social Policy |
√ |
|
√ |
|
6. International Trade and Finance |
|
√ |
|
√ |
7. Public Debt |
√ |
|
|
|
8. Domestic Coinage |
√ |
|
|
|
9. Transfer Payments to Provinces and Territories |
|
|
√ |
|
10. International Financial Organizations |
|
|
|
√ |
The Tax Policy Branch is responsible for the development and evaluation of federal taxation policies and legislation regarding personal and business income tax, sales tax, and excise tax. The Branch provides advice and recommendations for changes to improve the personal, corporate, sales, and excise tax systems while raising the required amount of revenue to finance government priorities. The Branch also provides advice on federal-provincial and federal-Aboriginal tax coordination.
Initiatives include developing tax legislation and negotiating tax treaties, federal-provincial tax collection and reciprocal agreements, federal-Aboriginal tax administration agreements, and tax policy research and evaluation.
2007–08 |
2008–09 |
2009–10 |
32,689 |
32,814 |
32,310 |
2007–08 |
2008–09 |
2009–10 |
244 |
248 |
247 |
The work of the Branch and both its expected results contribute to the following three of the Department's priorities:
The tax system contributes to these priorities by raising sufficient revenues to pay for public services, including social programs (e.g. universal health care, and public safety and security) and strategic investments in areas that promote a more competitive and productive Canadian economy (e.g. education and training, basic scientific research, and infrastructure). At the same time, however, revenues must be raised in a manner that keeps tax burdens and marginal tax rates low to provide incentives to work, save, and invest. Tax revenues must also be raised in a fair manner so that taxpayers in similar circumstances face similar tax treatment, ensuring that the tax burden is shared in accordance with the ability of taxpayers to pay. Where appropriate, the tax system may also be used to pursue specific economic and social objectives, such as savings for post-secondary education, promoting physical activity among children, encouraging research and development, and helping protect the environment.
The Tax Policy Branch will continue to advise the minister of Finance over the 2007–10 planning period on potential measures to further improve the competitiveness, efficiency, and fairness of the tax system in a fiscally sustainable manner. This will include reducing the GST by an additional percentage point starting no later than January 1, 2011, and developing other measures to support implementations of Advantage Canada, the government's strategic long-term economic plan.
The Tax Policy Branch plans to attain the expected result through the following ongoing activities and key commitments.
In order to ensure that the tax system functions efficiently, the federal government works with provinces, Aboriginal governments, and other countries to improve tax policy coordination. It also undertakes ongoing analysis of the impact of both new and existing tax policy initiatives on these jurisdictions.
The Tax Policy Branch plans to attain the expected result through the following ongoing activities and key commitments.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected Results / Performance Measurement |
1. Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue |
2. Sound fiscal relationships with provinces, Aboriginal governments, and other countries |
Performance Indicators |
1.1 Proposals and research to improve the competitiveness, efficiency, and fairness of the personal, corporate, sales, and excise tax systems 1.2 Amount of tax revenue raised |
2.1 Active negotiation of additional tax administration agreements with provincial and Aboriginal governments 2.2 Effective network of tax treaties with other countries 2.3 Effective meetings of the Federal-Provincial Tax Committee |
Data Sources |
Federal budgets, legislation, regulations, press releases, tax treaties, the Department's Marginal Effective Tax Rate models, Public Accounts, tax evaluations, working and research papers, and tax expenditure reports |
Federal-provincial agreements, federal-provincial meetings, federal-Aboriginal agreements, and federal-Aboriginal negotiations |
Frequency |
Annual |
Annual |
Target |
1.1 Proposals in the budget and throughout the year, as required, to implement the government's tax policy agenda and maintain a competitive, effective, and fair tax system 1.2 Collect sufficient tax revenues to pay for public services 1.3 Publication of the tax expenditures and evaluations report 1.4 Two published evaluations per year |
Increased number of tax agreements and tax treaties signed |
Target Date |
Ongoing |
Ongoing |
The Economic and Fiscal Policy Branch is responsible for monitoring and preparing forecasts of Canada's economic and fiscal position, and plays a lead role in the management of the government's fiscal framework. The Branch provides ongoing analysis and advice regarding the government's economic policy framework, its budget planning framework and spending priorities, as well as the fiscal positions of other levels of government and in other countries.
2007–08 |
2008–09 |
2009–10 |
15,007 |
15,065 |
15,064 |
2007–08 |
2008–09 |
2009–10 |
121 |
122 |
122 |
The Branch contributes to sound fiscal management by ensuring that budget planning is carried out in a transparent manner and supports long-term fiscal sustainability. The Economic and Fiscal Update 2006 builds on changes made in Budget 2006 to improve fiscal transparency and accountability of budget planning.
The government's framework will help ensure that fiscal planning is transparent and supports long-term fiscal sustainability.
The Branch will undertake the following ongoing activities and key commitments in support of the expected result.
The Branch contributes to sustainable economic growth through an accurate assessment of current and future economic conditions both in Canada and abroad, an analysis of effective economic policies, and in-depth economic research.
A focus for 2007–08 will be to monitor and assess the implications for the Canadian economy of U.S. economic developments, and of fluctuations in commodity prices and the Canadian dollar. In the longer term, two areas of focus are the implications of the rise of emerging markets and population aging.
An effective assessment of these issues will enable the government to better anticipate potential fiscal constraints arising from future economic conditions and to develop effective policies to promote long-term growth.
The current economic environment is one characterized by issues that are constantly changing, complex, and far-reaching. It is critical that the government understand the strengths and weaknesses of the Canadian economy now and in the future in order to develop economic policies that lead to sustained economic growth. In-depth economic research is also essential to understand and evaluate the interactions and effects of economic developments.
The government benefits from understanding past, ongoing, or proposed reforms in other countries and their implications for the economic and fiscal situation abroad. This understanding will enable the government to develop and implement economic policies that are best suited to promote sustained economic growth in Canada. International cooperation is necessary to understand and provide an accurate assessment of the economic and fiscal conditions around the world.
The Branch plans to attain the expected result through the following ongoing activities and key commitments.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected Results / Performance Measurement |
1. Transparent fiscal planning and sustainable fiscal policy |
2. Effective analysis of economic performance |
Performance Indicators |
1.1 Publication of fiscal projections 1.2 Federal debt as a share of the gross domestic product (GDP) |
Canada's GDP growth relative to the G6 (G7 less Canada) |
Data Sources |
1.1 Federal budget and Economic and Fiscal Update 1.2 Annual Financial Report of the Government of Canada |
IMF World Economic Outlook |
Frequency |
1.1 Twice a year 1.2 Annual |
Semi-annual |
Target |
1.1 Publish two-year and five-year fiscal projections 1.2 Reduce the federal debt-to-GDP ratio to 25% by 2012–13 |
Above-average annual growth rate |
Target Date |
1.1 Ongoing 1.2 March 31, 2013 |
Ongoing |
Under this program activity, the Financial Sector Policy Branch is responsible for providing analysis of Canada's financial services sector and financial markets, as well as developing the legislative and regulatory framework governing federally chartered financial institutions (banks, trust companies, insurance companies, and cooperative credit associations) and federally regulated defined benefit pension plans. The Branch is also responsible for issues related to anti-money laundering and anti-terrorist financing. The Branch also manages the government's cash and official international reserves, and provides support to the minister regarding Crown corporation borrowing.
The Branch is responsible for the public debt and domestic coinage programs. For more information on these programs, see Program Activities 7 and 8, Public Debt and Domestic Coinage.
2007–08 |
2008–09 |
2009–10 |
18,113 |
15,966 |
16,483 |
2007–08 |
2008–09 |
2009–10 |
129 |
116 |
118 |
The focus of Financial Sector Policy Branch activity for 2007–08 will be pursuing improvement to the borrowing framework for major government-backed entities. These activities will, among other things, contribute to reduced debt service costs for the federal government and its agencies.
Under the Financial Administration Act, the minister is responsible for approving borrowing by government entities and ensuring prudent treasury management policies. A 2005 study by an outside consulting firm of the current borrowing framework for major Crown borrowers identified improvements to the existing framework and advised on the potential benefits and costs of a consolidated borrowing framework.
In addition, under the Financial Administration Act and the Currency Act, the minister is responsible for the management of the government's cash and reserve assets. Funds need to be invested with due regard for risk and return. External evaluations of cash management and reserves management conducted in 2006 identified a number of possible enhancements.
The Branch plans to attain the expected result through the following ongoing activities and key commitments.
Ensuring the competitiveness, efficiency, safety, and soundness of Canada's financial sector and ensuring that domestic financial markets function well are necessary to achieving sustainable growth in the Canadian economy. For 2007–08, the focus will be on making progress on more collaborative and efficient securities regulation and enforcement, and on establishing a common securities regulator in Canada, implementing and drafting regulations in the context of the 2006 review of the financial institutions statutes, implementing regulations associated with the new corporate governance legislation for financial institutions, undergoing a planned Financial Sector Assessment Program (FSAP) update by the International Monetary Fund, as a follow-up to the assessment conducted in 1999, and reviewing the mortgage insurance framework.
The Department advises on and develops policy, legislation, and regulations to support a leading-edge financial services sector and domestic capital market to achieve a more productive, competitive, and dynamic economy.
The Branch plans to attain the expected result through the following ongoing actions and key commitments.
A properly designed private pension system, with appropriate incentives for both employers and employees, can contribute to the security and prosperity of Canadian workers and retirees, and support increases in living standards.
The Department will continue to review and assess means to strengthen the legislative and regulatory framework for federally regulated defined benefit pension plans in order to ensure the security and viability of defined benefit pension plans.
The Branch plans to attain the expected result through the following ongoing activity.
The Department is responsible for issues related to anti-money laundering and anti-terrorist financing. The Department's leading role in the global fight against money laundering and terrorist financing contributes to public safety in Canada and worldwide. Until July 2007, the focus will be on the continuing role of the presidency of the Financial Action Task Force (FATF). Presiding over the FATF demonstrates internationally Canada's commitment to remain at the forefront of the global fight against terrorist financing and money laundering. Throughout the year, the focus will be on enhancing Canada's anti-money laundering and anti-terrorist financing regime and establishing the permanent home of the Egmont Secretariat, the group of international financial intelligence units.
The Department is also responsible for the federal government's relations with foreign governments in the area of trade in financial services, namely the administration of Canada's commitments under the North American Free Trade Agreement and the World Trade Organization (WTO) General Agreement on Trade in Services, international trade negotiations related to these agreements, as well as other bilateral and multilateral trade initiatives.
The goal of Canada's AML and ATF regime is to combat money laundering and terrorism financing by providing appropriate tools to law enforcement, while respecting the privacy of Canadians and conforming to international standards.
The Branch plans to attain the expected result through the following ongoing initiatives and key commitments.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected Results / |
1. Prudent and cost-effective treasury management of the borrowing activities of Crown corporations and the government's investment portfolios |
2. A regulatory framework that promotes a sound, efficient, and competitive Canadian financial sector that serves the needs of individuals, businesses, and the economy |
3. An enhanced legislative and regulatory framework for federally regulated defined benefit pension plans |
4. An effective anti-money laundering (AML) and anti-terrorist financing (ATF) framework |
Performance Indicators |
1.1 Crown borrowing costs 1.2 Net returns on liquid asset portfolios 1.3 Amount of exposure to financial risk 1.4 Administrative costs of treasury functions |
Policy, legislative, and regulatory initiatives |
Policy, legislative, and regulatory initiatives |
4.1 Regulations 4.2 International standards and evaluation reports 4.3 Canadian presidency of the Financial Action Task Force on Money Laundering (FATF) 4.4 Establishment of the Egmont Secretariat |
Data Sources |
1.1 Crown annual reports and corporate plans 1.2 Public Accounts, Debt Management Report, Report on the Management of Canada's Official International Reserves 1.3 Debt Management Report, Report on the Management of Canada's Official International Reserves 1.4 Crown and Bank of Canada annual reports |
Legislation, regulations, and publications |
Legislation and regulations |
4.1 Legislation, regulations 4.2 FATF mutual evaluation report 4.3 Report from the outgoing president 4.4 Official announcement of the Secretariat |
Frequency |
Annual |
Legislative and regulatory amendments as needed; securities regulation work on an ongoing basis Financial Sector Assessment Program in (FSAP) 2007 |
Amendments as needed |
4.1 Regulations as needed 4.2 Mutual evaluation roughly every five years 4.3 Presidency is rotated among the FATF members 4.4 One time |
Target |
1.1 Low and stable risk-adjusted costs of borrowing and investing funds 1.2 Positive returns on investment portfolios, net of costs 1.3 Exposure to financial risks within Board- and minister-approved limits 1.4 Overhead costs in line with comparable entities |
2.1 Implement and draft regulations for Bill C-37 2.2 Develop Bill C-57 regulations 2.3 Complete IMF FSAP update 2.4 Develop policies for the review of the mortgage insurance framework |
Develop legislation and regulations as needed |
4.1 Develop regulationsfor the Proceeds of Crime (Money Laundering) and Terrorist Financing Act 4.2 Comply with international standards and the recommendation of the Auditor General of Canada and Treasury Board-mandated evaluation reports 4.3 Deliver the FATF president's work program 4.4 Egmont Secretariat becomes operational |
Target Date |
Ongoing |
2007–08 |
Ongoing |
2007–08 |
Under this program activity, the Economic Development and Corporate Finance Branch is responsible for fulfilling the challenge function of the Department of Finance Canada, including providing policy analysis and advice to the minister on the financial implications of the government's microeconomic policy and programs; for providing proposals for the funding of programs; for developing regional and sectoral policy analysis in the areas of the knowledge-based economy, defence, transportation, public infrastructure, environment, energy and resources, agriculture, fisheries, and privatization; and for advising on corporate restructuring regarding Crown corporation and other corporate holdings. The Branch is also responsible for analysis and advice on other projects, such as the Smart Regulation Initiative.
2007–08 |
2008–09 |
2009–10 |
8,289 |
8,321 |
8,321 |
2007–08 |
2008–09 |
2009–10 |
67 |
68 |
67 |
The work of the Branch and its expected result contribute to the following three of the Department's priorities:
The focus of the Branch's work will be on supporting the government's microeconomic policy, including monitoring world-class research and development, creating a cleaner and healthier environment, strengthening the economic union, and outlining the government's comprehensive plan for infrastructure. The Branch will also advise the minister regarding other departments' funding and policy proposals.
The Branch plans to attain the expected result through the following ongoing activities and key commitments.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected Results / |
1. Sound advice to the minister on economic proposals |
Performance Indicators |
Announcement of measures that advance productivity and economic growth |
Data Sources |
Budget and Economic Update |
Frequency |
Annual |
Target |
Implementation of microeconomic policy directions in the government's economic agenda |
Target Date |
Ongoing |
Under this program activity, the Federal-Provincial Relations and Social Policy Branch has primary responsibility for providing analysis and advice to the minister of Finance on federal-provincial-territorial fiscal arrangements, fiscal and economic relations, and Canadian social policies and programs, such as health care, employment insurance, seniors' benefits, Aboriginal programs, education programs, and cultural programs.
2007–08 |
2008–09 |
2009–10 |
12,298 |
12,345 |
12,344 |
2007–08 |
2008–09 |
2009–10 |
92 |
93 |
93 |
The focus for the 2007–08 fiscal year will be on implementing a principled framework to restore fiscal balance. In Budget 2006, the government took important first steps to restore fiscal balance. These included tax reductions, new investments, and a commitment to provide funding of $3.3 billion to provinces and territories for shared priorities.
In Budget 2006, the government also committed to bringing forward proposals to restore fiscal balance after undertaking consultations with provinces and territories, academics and experts, and individual Canadians. The government followed through on this commitment. As reported in Advantage Canada (November 2006): "The key message the Government has heard is that Canadians support a system of fiscal arrangements that funds national priorities and redistributes wealth from the more prosperous regions to the less prosperous ones—but that these arrangements must be founded on principles of fairness and predictability." The government intends to table its proposals to restore fiscal balance in Budget 2007.
Canada's government is committed to restoring fiscal balance, in part through the development of a principle-based transfer system, with a clearer delineation of responsibilities among different orders of government and with greater overall efficiency for governments and enhanced accountability for citizens.
The Branch plans to attain the expected result through the following ongoing activities and key commitments.
The focus for the 2007–08 fiscal year will be on contributing to the government's social policy priorities by providing analysis and advice to the minister of Finance and senior government officials on a wide range of social policy issues, including items outlined in Advantage Canada.
The Federal-Provincial Relations and Social Policy Branch is responsible for the provision of analysis and advice to the minister of Finance and senior government officials on social policy issues, including early learning and childcare, post-secondary education, income security, justice and safety, health and wellness, culture, and Aboriginal opportunities.
The Branch plans to attain the expected result through the following ongoing activity and key commitments.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected |
1. Principled framework to restore fiscal balance in Canada |
2. Sound advice to the minister on government social policy priorities |
Performance Indicators |
Implementation of a principle-based transfer system |
Announcement of measures and related funding that advance social policy priorities |
Data Sources |
Transfer agreements |
Budget, and the Economic and Fiscal Update |
Frequency |
Ongoing |
Annual |
Target |
1.1 Timely, accurate implementation of legislative and regulatory changes 1.2 New arrangements for Equalization, TFF, and the CST 1.3 Enhanced accountability and transparency of fiscal arrangements for citizens |
Timely implementation of social policy priorities in the government's agenda |
Target Date |
1.1 Proposals for new framework intended to be brought forward as part of Budget 2007 1.2 New Equalization and TFF legislation to be tabled by spring 2007; new legislation for the CST must be in place by April 2008 1.3 Ongoing |
Ongoing |
Under this program activity, the International Trade and Finance Branch:
2007–08 |
2008–09 |
2009–10 |
15,879 |
15,939 |
15,938 |
2007–08 |
2008–09 |
2009–10 |
118 |
120 |
120 |
As a highly open economy in an increasingly integrated global marketplace, Canada's economic performance and future prosperity depend on trade and investment flows supported by high-standard multilateral, regional, and bilateral trade and investment rules and agreements. Securing access to key markets for Canadian exporters and investors, and reducing tariffs where possible will enhance the competitiveness of domestic industries and expand commercial opportunities for them.
The Branch will work to improve Canada's overall economic performance by building a stronger international trade and investment system that opens markets, enhances competitiveness of domestic industries, and expands access for Canadian exports and investments in major foreign markets.
The Branch plans to attain the expected result through the following ongoing activity and key commitments.
As an open economy that benefits from a strong multilateral system of global economic and financial governance, Canada has a strong interest in promoting initiatives to strengthen the leadership of forums such as the G7 and G20, as well as in ensuring the credibility and strength of organizations such as the IMF and World Bank. In addition, Canada will work with other players in the international community to reduce the risks of international financial and economic instability. Canada also has an interest in greater security, prosperity, and economic and social progress in developing economies.
The Branch seeks to promote Canadian prosperity and economic security by reducing international financial and economic instability. It does this by advancing Canadian leadership in international forums such as the G7 and G20, and by providing policy direction to international financial institutions that is consistent with Canadian interests and policy objectives. This includes contributing to economic and social progress in developing economies, and the development and promotion of initiatives on trade finance issues.
The Branch will also work to support a strong multilateral system of global economic and financial governance by strengthening the leadership of groups such as the G7 and G20, and by ensuring the credibility and strength of organizations such as the IMF and World Bank.
The Branch plans to attain the expected result through the following ongoing activities and key commitments.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected |
1. Secure access to key markets for Canadian exporters and investors |
2. Canadian leadership and influence on international economic, financial, development, and trade finance issues |
Performance Indicators |
Progress will be measured through various domestic, regional, and multilateral trade and investment negotiations and initiatives |
Outcomes of international forums and policy decisions |
Data Sources |
Trade and investment negotiations and agreements |
Results (and communiqués) and agreements from international meetings and negotiations |
Frequency |
Ongoing |
Ongoing |
Target |
Completed negotiations and agreements |
Canadian policy positions and interests are reflected at international meetings and negotiations |
Target Date |
Ongoing |
Ongoing |
Under this program activity, the Financial Sector Policy Branch is responsible for managing the Government of Canada's debt program, including the statutory funding of interest, the service costs of the public debt, and the issuing costs of new borrowings.
2007–08 |
2008–09 |
2009–10 |
34,697,000 |
34,645,000 |
34,685,000 |
2007–08 |
2008–09 |
2009–10 |
28 |
22 |
22 |
Debt service is the largest spending program of the federal government. The prudent and effective management of the government's debt continues to be an important element of the Department's strategy for sound fiscal management. The focus for 2007–08 will be on reviewing and evaluating the effectiveness of debt management and treasury management frameworks and programs. The Department also will work to implement changes to the retail debt program to enhance cost-effectiveness.
The government's operational needs are met through borrowing from capital markets. The government's debt structure (the mix of fixed- and floating-rate debt) is managed to ensure that debt costs are kept low and stable over time.
The Branch plans to attain the expected result through the following ongoing actions and key commitments.
A well-functioning wholesale market in Government of Canada securities benefits the government and a wide range of market participants. For the government as a debt issuer, a well-functioning market attracts investors and ensures that funding costs are kept low. For market participants, a liquid and active secondary market in government debt provides credit-risk-free assets for investment portfolios, a pricing benchmark for other instruments, and a primary tool for hedging risk.
The Branch plans to attain the expected result through the following ongoing activities and commitment.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected Results / Performance Measurement |
1. Stable low-cost financing for the Government of Canada |
2. A well-functioning market in Government of Canada securities |
Performance Indicators |
1.1 Measures of operational performance (e.g. auction statistics) 1.2 Public debt structure |
Measures of market performance (e.g. turnover, trading spreads) |
Data Sources |
1.1 Fiscal Monitor; Debt Management Report 1.2 Annual Financial Report of the Government of Canada and other outcomes summarized in the Debt Management Report |
Debt Management Report |
Frequency |
Monthly; annual |
Annual |
Target |
1.1 Well-contested auctions and operations 1.2 Debt structure target of 60% fixed-rate debt |
Operational measures, in particular operational results reporting times, and secondary market indicators such as volumes and trading spreads that are in line with or better than previous years |
Target Date |
Ongoing |
Ongoing |
Under this program activity, the Financial Sector Policy Branch is responsible for providing advice to the minister on Royal Canadian Mint initiatives and for the payment of the production and distribution costs, in the domain of domestic circulating coinage.
2007–08 |
2008–09 |
2009–10 |
145,000 |
147,000 |
149,000 |
Under the Royal Canadian Mint Act, the minister of Finance is responsible for buying domestic circulating coinage from the Royal Canadian Mint (RCM). The RCM distributes the coins produced to financial institutions on the minister's behalf. The overriding objective is to ensure the supply of circulating coinage meets the needs of the economy. A secondary objective is to ensure that coins are produced at reasonable cost. Coin sales earn seigniorage for the government. Seigniorage is the net revenue derived from the issuing of currency and is the difference between the face value of a coin or bank note and the cost of producing, distributing, and eventually retiring it from circulation.
The Branch will work to achieve the expected result through the following ongoing activities and key commitment.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected results under this program activity.
Expected Results / Performance Measurement |
1. A supply of coinage at a reasonable cost |
Performance Indicators |
1.1 Production and demand for coinage 1.2 Seigniorage earned by the government |
Data Sources |
1.1 Royal Canadian Mint annual report 1.2 Public Accounts |
Frequency |
1.1 Annual 1.2 Annual |
Target |
1.1 Production of coinage meets the demand of the economy 1.2 Reduce costs and increase the amount of seigniorage earned by the government |
Target Date |
Ongoing |
Under this program activity, the Federal-Provincial Relations and Social Policy Branch is primarily responsible for the administration of the major transfer payments to provinces and territories.
2007–08 |
2008–09 |
2009–10 |
40,328,203 |
41,903,765 |
43,817,109 |
The focus for the 2007–08 fiscal year will be administering federal transfers to the provinces and territories, including Equalization, Territorial Formula Financing (TFF), the Canada Health Transfer (CHT), and the Canada Social Transfer (CST).
Payments made under the various transfer programs are an important source of revenue for provincial and territorial governments. In 2007–08, an estimated $40.3 billion in cash payments will be provided to the provinces and territories.
The Branch plans to attain the expected result through the following ongoing activities.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected result under this program activity.
Expected Result / Performance Measurement |
1. Administer federal transfers to the provinces and territories, including Equalization, TFF, CHT, and CST |
Performance Indicators |
Timely and accurate administration of transfer payments |
Data Sources |
Public Accounts of Canada / departmental financial reporting system |
Frequency |
Annual |
Target |
Payments made according to levels and formulas set out in legislation and agreements |
Target Date |
Ongoing |
Under this program activity, the International Trade and Finance Branch is responsible for the effective administration of Canada's international commitments associated with Paris Club debt rescheduling agreements and financial assistance to the International Development Association, the International Monetary Fund, and the European Bank for Reconstruction and Development.
2007–08 |
2008–09 |
2009–10 |
544,717 |
540,978 |
510,229 |
The Branch will contribute to international initiatives to improve outcomes in the developing economies through effective use of international assistance, debt relief, and other means and will provide payments consistent with the Department's commitments.
The Branch plans to attain the expected result through the following ongoing activity.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the expected result under this program activity.
Expected Results / Performance Measurement |
1. Payments to international organizations and Canadian creditors consistent with our commitments |
Performance Indicators |
Timely and accurate payments |
Data Sources |
Public Accounts / departmental financial reporting system |
Frequency |
Periodic |
Target |
Payments made as per agreement and according to pre-determined schedule, or within 30 days of invoice being received |
Target Date |
Ongoing |
2007–08 | |||||
Budgetary | |||||
Operating | Grants | Contributions and Other Transfer Payments |
Gross | Respendable Revenue |
|
($ thousands) | |||||
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government's overall agenda. | |||||
Tax Policy1 |
32,653 | 32,653 | (128) | ||
Economic and |
14,991 | 14,991 | (59) | ||
Financial Sector |
18,093 | 18,093 | (71) | ||
Economic |
8,280 | 8,280 | (32) | ||
Federal- |
12,284 | 12,284 | (48) | ||
International |
15,861 | 15,861 | (62) | ||
Public Debt7 |
34,697,000 | 34,697,000 | |||
Domestic |
145,000 | 145,000 | |||
Transfer |
40,328,203 | 40,328,203 | |||
International |
176,200 | 363,269 | 539,469 | ||
Total |
34,944,162 | 176,200 | 40,691,472 | 75,811,834 | (400) |
2007–08 | |||||
Budgetary
|
Non-budgetary
Loans, |
Total Main Estimates |
Adjustments (planned spending not in Main Estimates) |
Total Planned Spending |
|
($ thousands) | |||||
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government's overall agenda. | |||||
Tax Policy1 |
32,525 | 32,525 | 164 | 32,689 | |
Economic and |
14,932 | 14,932 | 75 | 15,007 | |
Financial Sector |
18,022 | 18,022 | 91 | 18,113 | |
Economic |
8,248 | 8,248 | 41 | 8,289 | |
Federal- |
12,236 | 12,236 | 62 | 12,298 | |
International |
15,799 | 15,799 | 80 | 15,879 | |
Public Debt7 |
34,697,000 | 34,697,000 | 34,697,000 | ||
Domestic |
145,000 | 145,000 | 145,000 | ||
Transfer |
40,328,203 | 40,328,203 | 40,328,203 | ||
International |
539,469 | 5,247 | 544,716 | 1 | 544,717 |
Total |
75,811,434 | 5,247 | 75,816,681 | 512 | 75,817,194 |
1. The program activity Tax Policy contributes to the achievement of all Government of Canada outcomes.
2. The program activity Economic and Fiscal Policy contributes to the achievement of the Government of Canada's "Strong economic growth" outcome.
3. The program activity Financial Sector Policy contributes to the achievement of the Government of Canada's "A fair and secure marketplace" outcome.
4. The program activity Economic Development and Corporate Finance contributes to the achievement of the Government of Canada's "Strong economic growth" outcome.
5. The program activity Federal-Provincial Relations and Social Policy contributes to the achievement of the Government of Canada's "A diverse society that promotes linguistic duality and social inclusion" outcome.
6. The program activity International Trade and Finance contributes to the achievement of the Government of Canada's "A prosperous Canada through global commerce" outcome.
7. The program activity Public Debt contributes to the achievement of all Government of Canada outcomes.
8. The program activity Domestic Coinage contributes to the achievement of all Government of Canada outcomes.
9. The program activity Transfer Payments to Provinces and Territories contributes to the achievement of several of the Government of Canada's outcomes, including the outcomes of "Strong economic growth" and "Healthy Canadians."
10. The program activity International Financial Organizations contributes to the achievement of the Government of Canada's "Global poverty reduction through sustainable development" outcome.
Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
|
($ thousands) |
||||
Tax Policy |
30,865 | 32,653 | 32,945 | 32,438 |
Economic and Fiscal Policy |
14,559 | 14,991 | 15,125 | 15,124 |
Financial Sector Policy1 |
20,521 | 18,093 | 16,030 | 16,549 |
Economic Development and Corporate Finance |
7,784 | 8,280 | 8,354 | 8,354 |
Federal-Provincial Relations and Social Policy2 |
16,753 | 12,284 | 12,394 | 12,393 |
International Trade and Finance |
15,555 | 15,861 | 16,003 | 16,002 |
Public Debt3 |
34,395,000 | 34,697,000 | 34,645,000 | 34,685,000 |
Domestic Coinage4 |
83,100 | 145,000 | 147,000 | 149,000 |
Transfer Payments to Provinces and Territories5 |
38,330,000 | 40,328,203 | 41,903,765 | 43,817,109 |
International Financial Organizations6 |
725,869 | 539,469 | 537,469 | 508,469 |
|
||||
Budgetary Main Estimates (gross) |
73,640,006 | 75,811,834 | 77,334,085 | 79,260,438 |
International Financial Organizations7 |
7,471 | 5,247 | 3,498 | 1,749 |
|
||||
Non-budgetary Main Estimates (gross) |
7,471 | 5,247 | 3,498 | 1,749 |
Less: Respendable revenue |
400 | 400 | 400 | 400 |
|
||||
Total Main Estimates |
73,647,077 | 75,816,681 | 77,337,183 | 79,261,787 |
|
||||
Adjustments |
||||
Procurement Savings |
||||
Tax Policy |
(207) | |||
Economic and Fiscal Policy | (97) | |||
Financial Sector Policy | (137) | |||
Economic Development and Corporate Finance | (52) | |||
Federal-Provincial Relations and Social Policy | (112) | |||
International Trade and Finance | (104) | |||
Supplementary Estimates |
||||
Operating Budget Carry Forward |
4,233 | |||
Advertising campaigns |
4,100 | |||
Cost of New Ministry—Regional Responsibilities |
25 | |||
Transfer to Foreign Affairs and International Trade Canada for Beijing Councillor Position |
(393) | |||
Transfer to the Canadian International Development Agency for Multilateral Debt Initiative8 |
(5,595) | |||
Public Debt—Interest and Other Costs9 |
209,000 | |||
Equalization and Territorial Formula Financing10 |
255,464 | |||
Payments to territories (Data Revisions) |
46,035 | |||
Youth Allowances Recovery11 |
69,000 | |||
Alternative Payments for Standing Programs12 |
125,000 | |||
Domestic Coinage13 |
42,900 | |||
Increase to International Development Association |
1 | |||
Other |
||||
Treasury Board Vote 15 (Collective Bargaining) |
2,186 | |||
Employee Benefit Plan (EBP) |
437 | |||
Payments to International Development Association14 |
1 | |||
Internal Audit15 |
512 | 11 | 11 | |
|
||||
Total Adjustments |
751,683 | 513 | 11 | 11 |
|
||||
Total Planned Spending |
74,398,760 | 75,817,194 | 77,337,194 | 79,261,798 |
|
||||
Total Planned Spending |
74,398,760 | 75,817,194 | 77,337,194 | 79,261,798 |
Less: Non-respendable revenue |
217,840 | 233,517 | 248,766 | 257,518 |
Plus: Cost of Services Received Without Charge |
14,645 | 15,386 | 15,488 | 15,637 |
Total Departmental Spending |
74,195,566 | 75,599,063 | 77,103,916 | 79,019,917 |
|
||||
Full-time Equivalents16 |
811 | 798 | 789 | 789 |
Notes
1. The decrease of $2.4 million in 2007–08 is due to the sunsetting of $1.07 million in funding for the Financial Action Task Force on Money Laundering (FATF) presidency and a decrease of $1.3 million in the redistribution of corporate administration costs.
2. The decrease of $4.5 million in 2007–08 is due to the sunsettting of the Expert Panel on Equalization and Territorial Formula Financing (TFF) of $3 million and a decrease of $1.5 million in the redistribution of corporate administration costs.
3. The change in the public debt charges is due to an increase in forecast short-term interest rates.
4. The increase in Domestic Coinage reflects the increased funding required for the cost to produce and distribute the augmented volume of domestic coinage due to higher demand for coinage from the economy.
5. The increase in the amount of transfer payments is the result of increased transfer payments to provinces and territories, including Fiscal Equalization, TFF, the Canada Health Transfer, and the Canada Social Transfer.
6. The decrease in 2007–08 in the budgetary amount of the International Financial Organizations program activity is due largely to a significant payment for debt for Cameroon, part of the Heavily Indebted Poor Countries process, which was made in 2006–07, but which will not be repeated in 2007–08.
7. The decrease in the non-budgetary amounts for the International Financial Organizations program activity is consistent with the agreed upon schedule of Canada's payments and encashment for the capital subscription of the European Bank for Reconstruction and Development (EBRD).
8. $5.6 million transferred from the Department of Finance Canada's reference level to the Canadian International Development Agency for 2006–07. This represents surplus funds from lower than expected payments under the Multilateral Debt Relief Initiative for 2006–07. The International Assistance Envelope's (IAE)'s management framework supports inter-pool flexibility to ensure that any surplus resources are reallocated to areas of need.
9. Forecasts of public debt charges for 2006–07 increased by $393 million due to an increase in expected short-term interest rates.
10. Budget 2006 provided additional funding to compensate certain provinces and territories for losses, based on updated data.
11. This is a recovery based on tax abatements for the Province of Quebec. The amount of $69 million represents a decrease in the amount to be recovered from Quebec. This decrease is related to a decrease in the value of personal income tax points compared with the data used for Main Estimates 2006–07.
12. This is a recovery from the Province of Quebec for the additional tax point transfers above and beyond the Canada Health Transfer and Canada Social Transfer tax point transfers. The decrease is related to a decrease in the value of personal income tax points compared with the data used for Main Estimates 2006–07.
13. The revised estimate for domestic coinage reflects an increase in private sector demand for coinage.
14. The adjustment is due to a discrepancy with the 2006–07 Main Estimates due to a revised forecast for payments to the International Development Association.
15. The increased funding of $512,000 for internal audit is for the creation of an internal audit committee, as well as for additional personnel and related training to assist in carrying out new requirements flowing from the new Policy on Internal Audit.
16. The decrease in FTEs is largely due to the September 2006 decision to wind down the Canada Investment and Savings Agency (a special operating agency of the Department of Finance Canada).
Vote or Statutory Item |
Truncated Vote or Statutory Wording |
2007–08 |
2006–07 |
($ thousands) |
|||
1 |
Operating expenditures1 |
89,343 | 93,135 |
5 |
Grants and Contributions2 |
221,200 | 404,200 |
(S) |
Minister of Finance—Salary and motor car allowance |
75 | 73 |
(S) |
Territorial Formula Financing (Part I.1—Federal-Provincial Fiscal Arrangements Act)3 |
2,142,450 | 2,070,000 |
(S) |
Payments to the International Development Association |
318,269 | 318,269 |
(S) |
Contributions to employee benefit plans |
12,344 | 12,429 |
(S) |
Purchase of Domestic Coinage4 |
145,000 | 83,100 |
(S) |
Interest and Other Costs5 |
34,697,000 | 34,395,000 |
(S) |
Statutory Subsidies (Constitution Act, 1867-1982, and Other Statutory Authorities) |
32,000 | 32,000 |
(S) |
Fiscal Equalization (Part I—Federal-Provincial Fiscal Arrangements Act)6 |
11,676,353 | 11,282,000 |
(S) |
Canada Health Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)7 |
21,348,400 | 20,140,000 |
(S) |
Canada Social Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)8 |
8,800,000 | 8,500,000 |
(S) |
Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964)9 |
(661,000) | (699,000) |
(S) |
Alternative Payments for Standing Programs (Part VI—Federal-Provincial Fiscal Arrangements Act)10 |
(3,010,000) | (2,995,000) |
Appropriations not required | |||
- | Pursuant to section 29 of the Financial Administration Act, to authorize the Minister on behalf of Her Majesty in Right of Canada to guarantee payment to the holders of mortgages insured by private insurers approved by the Superintendent of Financial Institutions to sell mortgage insurance in Canada of not more than 90% of the net claims of the holders of the insured mortgages in the event of the insolvency or liquidation of the private insurer, subject to the limitation that the aggregate outstanding principal amount of all mortgages covered by the guarantee shall not exceed $100,000,000,000 at any time; and to repeal Vote 16b, Appropriation Act No. 4, 2003-2004 | - | - |
Items not required | |||
- | Payments to International Monetary Fund's Poverty Reduction and Growth Facility11 | - | 3,400 |
Total budgetary | 75,811,434 | 73,639,606 | |
L10 |
Issuance and payment of demand notes to the |
- | - |
(S) |
Payments and encashment of notes issued to the European Bank for Reconstruction and Development—Capital Subscriptions12 |
5,247 | 7,471 |
Total non-budgetary | 5,247 | 7,471 | |
Total Department |
75,816,681 | 73,647,077 |
Notes
1. The decrease of $3.8 million, or 4.1%, in the operating expenditures vote is largely due to the transfer of $391,000 to Foreign Affairs and International Trade Canada for the Finance Councillor Position in Beijing, procurement savings of $710,000, the sunset of $1.07 million in funding for the Financial Action Task Force on Money Laundering (FATF) presidency and $3 million for the Expert Panel on Equalization and Territorial Formula Financing. The Department also received $1.3 million in funding in 2007–08 for compensation for collective bargaining.
2. The decrease of $183 million, or 45.3%, in the grants and contributions vote is due largely to a significant payment for debt for Cameroon, part of the Heavily Indebted Poor Countries process, which was made in 2006–07, but which will not be repeated in 2007–08. Grants and contributions amounts can fluctuate appreciably from year to year for two reasons. First, the amounts of debt relief vary from country to country so corresponding payments made on behalf of these countries will change accordingly. Second, the timing of debt treatment can change, as the schedule for debt treatment of a country benefiting from debt relief may change for reasons internal to that country.
3. The increase of $72.5 million, or 3.5%, in the Territorial Formula Financing (TFF) is a result of the October 26, 2004, New Framework for Equalization and the Territorial Formula Financing Program. The New Framework established a level of TFF for 2005–06 of $2 billion and annual increase of 3.5% until 2013–14.
4. The increase of $61.9 million, or 74.5%, in Domestic Coinage reflects the increased funding required for the cost to produce and distribute the augmented volume of domestic coinage due to higher demand for coinage from the economy.
5. Public Debt charges have increased by $302 million, or 0.9%, due to an increase in forecast short-term interest rates.
6. The increase of $394 million, or $3.5%, in transfer payments for Fiscal Equalization is a result of the October 26, 2004, New Framework for Equalization and the Territorial Formula Financing Program. The New Framework established a level for Equalization for 2005–06 of $10.9 billion and an annual increase of 3.5% until 2013–14.
7. The increase of $1.2 billion, or 6%, in the Canada Health Transfer represents the legislated amount for health transfers as per Budget 2003 and the additional funding announced in the September 2004 10-Year Plan to Strengthen Health Care.
8. The increase of $300 million, or 3.5%, in the Canada Social Transfer represents the legislated amount for social transfer. Additional funding was committed for this transfer in Budget 2003 and March 2003.
9. The decrease in the Youth Allowances Recovery of $38 million, or 5.5%, is due to a decrease in the amount to be recovered from Quebec. This decrease is related to a decrease in the value of personal income tax points compared with the data used for the 2006–07 Main Estimates.
10. The increased recovery of $15 million, or 0.5%, in the Alternative Payments for Standing Programs is attributable to an increase in the amount to be received from Quebec. This increase is related to a increase in the value of personal income tax points compared with the data used for the 2006–07 Main Estimates.
11. The decrease of $3.4 million, or 100%, to the payment to the International Monetary Fund's (IMF) Poverty Reduction and Growth Facility (PRGF) is due to lower obligations to fund the IMF's PRGF.
12. The decrease in the payments and encashment of notes to the ERBD of $2.2 million, or 30%, is consistent with the agreed upon schedule of Canada's payments and encashment for the capital subscription of the EBRD.
2007–08 | |
($ thousands) | |
Accommodation provided by Public Works and Government Services Canada |
7,284 |
Contributions covering the employer's share of employees' insurance premiums and expenditures paid by the Treasury Board of Canada Secretariat (excluding revolving funds) |
4,669 |
Salary and associated expenditures of legal services provided by the Department of Justice Canada |
3,432 |
Total 2007–08 Services Received Without Charge |
15,386 |
Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
|
($ thousands) |
||||
International Financial Organizations |
|
|
|
|
Issuance and Payment of demand notes to the International Development Association (IDA)1 |
- |
- |
- |
- |
Issuance of demand notes to the European Bank for Reconstruction and Development (EBRD)—Capital Subscriptions1 |
- |
- |
- |
- |
Payments and encashment of notes issued to the EBRD—Capital Subscriptions2 |
7,471 |
5,247 |
3,498 |
1,749 |
Issuance of loans to the International Monetary Fund's (IMF) Poverty Reduction and Growth Facility (PRGF)1 |
- |
- |
- |
- |
Total |
7,471 |
5,247 |
3,498 |
1,749 |
Notes
1. Zero dollar appropriations are required for parliamentary approval in the Main Estimates of the L15 Vote for the issuance of demand notes to the IDA, and as notification of the statutory issuance of demand notes for the EBRD Capital Subscription and loan to the IMF's PRGF. The encashment of each of these notes is covered under separate statutory payments in the Main Estimates.
2. The decrease in the payments and encashment of notes to the ERBD is consistent with the agreed upon schedule of Canada's payments and encashment for the capital subscription of the EBRD.
Forecast Revenue |
Planned |
Planned Revenue |
Planned |
|
($ thousands) |
||||
Tax Policy |
|
|
|
|
Sale of Departmental Documents |
117 |
128 |
131 |
130 |
Economic and Fiscal Policy |
|
|
|
|
Sale of Departmental Documents |
55 |
59 |
60 |
60 |
Financial Sector Policy |
|
|
|
|
Sale of Departmental Documents |
77 |
71 |
64 |
65 |
Economic Development and Corporate Finance |
|
|
|
|
Sale of Departmental Documents |
29 |
32 |
33 |
33 |
Federal-Provincial Relations and Social Policy |
|
|
|
|
Sale of Departmental Documents |
63 |
48 |
49 |
49 |
International Trade and Finance |
|
|
|
|
Sale of Departmental Documents |
59 |
62 |
63 |
63 |
Total Respendable Revenue |
400 |
400 |
400 |
400 |
Forecast Revenue |
Planned Revenue |
Planned Revenue |
Planned Revenue |
|
($ thousands) |
||||
Domestic Coinage |
||||
Domestic Coinage1 |
217,840 |
233,517 |
248,766 |
257,518 |
Total Non-respendable Revenue |
217,840 |
233,517 |
248,766 |
257,518 |
Total Respendable and |
218,240 |
233,917 |
249,166 |
257,918 |
Note
1. The Domestic Coinage non-respendable revenue represents the face value of the forecast volume of coins that will be sold to financial institutions to meet trade and commerce requirements. The increase in the forecast volume of coins is due to a strong Canadian economy, a strong retail sector, and the inclusion of the Olympic program.
2007-08 | ||||||
Tax Policy |
Economic and Fiscal Policy |
Financial Sector Policy |
Economic Development and Corporate Finance |
Federal- Provincial Relations and Social Policy |
International Trade and Finance |
|
($ thousands) | ||||||
Tax Policy |
32,689 | |||||
Economic and Fiscal Policy |
15,007 | |||||
Financial Sector Policy |
18,113 | |||||
Economic Development and Corporate Finance |
8,289 | |||||
Federal-Provincial Relations and Social Policy |
12,298 | |||||
International Trade and Finance |
15,879 | |||||
Total | 32,689 | 15,007 | 18,113 | 8,289 | 12,298 | 15,879 |
2007-08 | |||||
Public Debt |
Domestic Coinage |
Transfer Payments to Provinces and Territories |
International Financial Organizations |
Total Planned Spending |
|
($ thousands) | |||||
Tax Policy |
32,689 | ||||
Economic and Fiscal Policy |
15,007 | ||||
Financial Sector Policy |
34,697,000 | 145,000 | 34,860,113 | ||
Economic Development and Corporate Finance |
8,289 | ||||
Federal-Provincial Relations and Social Policy |
40,328,203 | 40,340,501 | |||
International Trade and Finance |
544,717 | 560,596 | |||
Total |
34,697,000 | 145,000 | 40,328,203 | 544,717 | 75,817,194 |
Regulations |
Expected Results |
Support consideration by Parliament of Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters, with a view to passage before sunset in April 2007. Associated regulations will also be brought forward to bring the legislation into force. |
Legislation adopted before sunset of existing legislation in April 2007 and regulations developed to update the financial institutions statutes and ensure the efficiency of the regulatory framework that allows for a sound, efficient, and competitive financial sector. |
Regulations are being introduced pursuant to the passage of Bill C-57, which updated the corporate governance provisions in the financial institutions statutes. |
Develop regulations to implement the new corporate governance provisions in the financial institutions statutes. |
Amendments may be made to regulations under Part IX of the Excise Tax Act (GST/HST)—Part IX of the Excise Tax Act contains a number of provisions that give regulatory powers to deal with GST/HST issues. |
Through the use of regulations, the government may propose changes to address some issues in the GST/HST tax system. Amendments to the regulations are required from time to time to respond to emerging policy and technical issues, including budget-related measures. |
Customs Tariff—The Tariff contains a number of provisions that allow the government to respond to the competitive needs of Canadian industry and to enforce Canada's rights and meet its obligations under international agreements and arrangements to which Canada is a party. |
Through the use of orders and regulations, the government will continue to respond to the competitive needs of Canadian industry and will enforce Canada's rights and meet its obligations under international agreements and arrangements. |
Income Tax Act and related regulations—The Income Tax Act contains a number of provisions that give regulatory powers to deal with income tax issues. |
Through the use of regulations, the government may propose changes to address some issues in the income tax system. Amendments to the Regulations are required from time to time to address emerging policy or technical issues, including budget-related measures. |
Orders in Council for the Equalization and the Territorial Formula Financing Program—Federal-Provincial Fiscal Arrangements Act. |
Under current legislation, an Order in Council must be prepared in order to establish payment levels until superseded by Budget 2007 commitments. |
Legislative changes expected as a result of policy changes in Budget 2007 regarding fiscal balance. |
Legislation and regulatory changes will be introduced to implement a principled framework for major federal transfers, reflecting the proposals to restore fiscal balance included in Budget 2007. |
Regulations to establish guidelines for the chief actuary of the Canada Pension Plan (CPP) to calculate the full cost of benefit enrichments or new benefits to the CPP, upon Royal Assent of Bill C-36, which provides for this regulation-making authority. |
This would deliver on a federal-provincial-territorial agreement reached in June 2006 as part of the conclusion of the CPP's triennial review. |
Amend existing regulations relating to the calculation of the default contribution rate to the CPP that provide for rounding of this rate to the nearest cent. This requires a consequential change to Bill C-36. |
This would deliver on a federal-provincial-territorial agreement reached in June 2006 as part of the conclusion of the CPP's triennial review. |
Budget 2005 proposed to amend regulations made under the Pension Benefits Standards Act, 1985 to remove the requirement that life income funds be used to purchase an annuity when the beneficiary reaches age 80. |
Legislation and/or regulations will be introduced to repeal the requirement to purchase an annuity at age 80. |
Amendments to the regulations made pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. |
Regulations will be introduced or amended to respond to the revised Financial Action Task Force recommendations and to respond to the recommendations of the Auditor General of Canada and the Treasury Board-mandated evaluation. |
Over the next three years, the Department of Finance Canada will manage the following transfer payment programs in excess of $5 million:
1. Compensation to Canadian agencies or entities established by an Act of Parliament for reduction of debts of debtor countries
2. Payments to the International Development Association
3. Debt payments on behalf of poor countries to international organizations
4. Fiscal Equalization (Part I, Federal-Provincial Fiscal Arrangements Act)
5. Territorial Formula Financing (Part I.1, Federal-Provincial Fiscal Arrangements Act)
6. Canada Health Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)
7. Canada Social Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)
8. Statutory Subsidies (Constitution Act, 1867, Constitution Act, 1982,and other statutory authorities)
9. Youth Allowances Recovery (Federal-Provincial Revision Act, 1964)
10. Alternative Payments for Standing Programs (Part VI, Federal-Provincial Arrangements Act)
11. Wait Times Reduction Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)
For further information on the above-mentioned transfer payment programs, see http://www.tbs-sct.gc.ca/est-pre/estime.asp.
Name of Transfer Payment Program: Grants and Debt Payments on Behalf of Poor Countries to International Organizations
Start Date: 2005–06
End Date: Ongoing
Description: Payments for Canada’s commitment to the G8-led Multilateral Debt Relief Initiative
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Responsible administration of financial obligations under the Multilateral Debt Relief Initiative
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: International Financial Organizations | ||||
Grants | 45,605 | 51, 200 | 51,200 | 51,200 |
Planned Evaluations: Not applicable
Planned Audits: Audit of the Administrative Controls Over Subscription Payments and International Obligations
Name of Transfer Payment Program: Compensation to Canadian agencies or entities established by an Act of Parliament for reduction of debts of debtor countries
Start Date: 1991–92
End Date: Ongoing
Description: Compensate Export Development Canada (EDC) and the Canadian Wheat Board (CWB) for reduction of debts of debtor countries
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Timely and accurate payments to the EDC and the CWB to compensate for debt relief to debtor countries
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: International Financial Organizations | ||||
Grants | 298,000 | 125,000 | 147,000 | 119,000 |
Contributions | 55,000 | 45,000 | 21,000 | 20,000 |
Total Payments | 353,000 | 170,000 | 168,000 | 139,000 |
Planned Evaluations: Not applicable
Planned Audits: Audit of the Administrative Controls Over Subscription Payments and International Obligations
Name of Transfer Payment Program: Statutory Funding—Payments to the International Development Association (IDA)
Start Date: 1960–61
End Date: Ongoing
Description: Encashment of demand notes to allow the IDA to disburse concessional financing for development projects and programs in the world’s poorest countries
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results:
($ thousands) | Forecast Spending 2006–07* |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: International Financial Organizations | ||||
Other Types of Transfer Payments | 318,270 | 318,270 | 318,280 | 318,280 |
Total Program Activity | 720,275 | 539,470 | 537,480 | 508,480 |
Planned Evaluations: Not applicable
Planned Audits: Audit of the Administrative Controls Over Subscription Payments and International Obligations
* The 2006–07 forecast spending figure includes $3.4 million for payments to the International Monetary Fund’s Poverty Reduction and Growth Facility—Exogenous Shocks Facility Trust.
Name of Transfer Payment Program: Fiscal Equalization (Part I, Federal-Provincial Fiscal Arrangements Act)
Start Date: 1957
End Date: Ongoing
Description: Equalization payments are made to provincial governments based on a formula to enable them to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. Equalization payments are unconditional. In 2006–07, eight provinces received payments under this program.
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Financial support to Canadian provinces to assist them in providing public services
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: Transfer Payments to Provinces and Territories | ||||
Other Types of Transfer Payments | 11,535,600 | 11,676,353 | 12,085,025 | 12,508,001 |
Planned Evaluations: An evaluation of this transfer program is currently underway. This evaluation will take into account the June 2006 report of the expert panel that studied the program. Recent information about the panel is on the Department of Finance Canada website at http://www.fin.gc.ca/news05/05-074e.html.
Planned Audits: An audit of the program is not required at this time.
Name of Transfer Payment Program: Territorial Formula Financing (Part I.1, Federal-Provincial Fiscal Arrangements Act)
Start Date: 1985
End Date: Ongoing
Description: Transfer payments to territorial governments to support their budgetary revenues
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Financial support for Canadian territories to assist them in providing public services
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: Transfer Payments to Provinces and Territories | ||||
Other Types of Transfer Payments | 2,071,864 | 2,142,450 | 2,217,436 | 2,295,046 |
Planned Evaluations: An evaluation of this transfer program is currently underway. This evaluation will take into account the June 2006 report of the expert panel that studied the program. Recent information about the panel is on the Department of Finance Canada website at http://www.fin.gc.ca/news05/05-074e.html.
Planned Audits: An audit of the program is not required at this time.
Name of Transfer Payment Program: Canada Health Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)
Start Date: 2004
End Date: Ongoing
Description: The Canada Health Transfer (CHT) provides equal per capita support for health care through cash and tax transfers to provincial and territorial governments. The CHT supports the government’s commitment to maintain the national criteria and conditions of the Canada Health Act (comprehensiveness, universality, portability, accessibility, and public administration) and the prohibitions against user fees and extra-billing.
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Financial support to Canadian provinces and territories to assist them in providing universally accessible health care services
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: Transfer Payments to Provinces and Territories | ||||
Other Types of Transfer Payments | 20,140,000 | 21,348,400 | 22,629,304 | 23,987,062 |
Planned Evaluations: There are no evaluations planned for this program.
Planned Audits: An audit of the program is not required at this time. An internal audit of the Canada Health and Social Transfer (CHST) was prepared in May 2002 and is available on the Department of Finance Canada website at http://www.fin.gc.ca/toce/2002/audit_transfers-e.html.
Name of Transfer Payment Program: Canada Social Transfer (Part V.1, Federal-Provincial Fiscal Arrangements Act)
Start Date: 2004
End Date: Ongoing
Description: The Canada Social Transfer (CST) provides equal per capita support through cash and tax transfers to provincial and territorial governments to assist them in financing post-secondary education, social assistance, and social services, including early childhood development and early learning, and child care services. The CST gives provinces and territories the flexibility to allocate payments among supported areas according to their own priorities and supports the government’s commitment to prohibit minimum residency requirements for social assistance.
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Financial support for Canadian provinces and territories to assist them in providing post-secondary education, social assistance, and social services, including early childhood development and early learning, and child care
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: Transfer Payments to Provinces and Territories | ||||
Other Types of Transfer Payments | 8,500,000 | 8,800,000 | 8,800,000 | 8,800,000 |
Planned Evaluations: There are no evaluations planned for this program.
Planned Audits: An audit of the program is not required at this time. An internal audit of the Canada Health and Social Transfer (CHST) was prepared in May 2002 and is available on the Department of Finance Canada website at http://www.fin.gc.ca/toce/2002/audit_transfers-e.html.
Name of Transfer Payment Program: Statutory Subsidies (Constitution Act, 1867; Constitution Act, 1982; and other statutory authorities)
Start Date: 1867
End Date: Ongoing
Description: The statutory subsidies provide a source of funding to provinces in accordance with terms of entry into Confederation.
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Financial support to provinces to assist them in providing public services
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: Transfer Payments to Provinces and Territories | ||||
Other Types of Transfer Payments | 32,000 | 32,000 | 32,000 | 32,000 |
Planned Evaluations: There are no evaluations planned for this program.
Planned Audits: An audit of the program is not required at this time.
Name of Transfer Payment Program: Youth Allowances Recovery (Federal-Provincial Revision Act, 1964)
Start Date: 1964
End Date: Ongoing
Description: The Youth Allowances Recovery is a recovery from the Province of Quebec for an additional tax point transfer (three points) above and beyond the Canada Health Transfer and Canada Social Transfer tax point transfer; in the 1960s, Quebec chose to use the federal government’s contracting-out arrangements for certain federal-provincial programs. Taken together, the Alternative Payments for Standing Programs and the Youth Allowances Recovery are known as the "Quebec Abatement."
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Financial support for Quebec to assist that province in providing public services, universally accessible health care services, post-secondary education, and social assistance
($ thousands) | Forecast Spending 2006–07 |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10 |
Program Activity: Transfer Payments to Provinces and Territories | ||||
Other Types of Transfer Payments | -630,000 | -661,000 | -695,000 | -730,000 |
Planned Evaluations: There are no evaluations planned for this program.
Planned Audits: An audit of the program is not required at this time
Name of Transfer Payment Program: Alternative Payments for Standing Programs (Part VI, Federal-Provincial Fiscal Arrangements Act)
Start Date: 1977
End Date: Ongoing
Description: The Alternative Payments for Standing Programs are a recovery from the Province of Quebec for an additional tax point transfer (13.5 points) above and beyond the Canada Health Transfer and Canada Social Transfer tax point transfer; in the 1960s, Quebec chose to use the federal government’s contracting-out arrangements for certain federal-provincial programs. Taken together, the Alternative Payments for Standing Programs and the Youth Allowances Recovery are known as the "Quebec Abatement."
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government’s overall agenda
Expected Results: Financial support for Quebec to assist that province in providing public services, universally accessible health care services, post-secondary education, and social assistance
($ thousands) | Forecast Spending 2006–07 * |
Planned Spending 2007–08 |
Planned Spending 2008–09 |
Planned Spending 2009–10** |
Program Activity: Transfer Payments to Provinces and Territories | ||||
Other Types of Transfer Payments | -2,870,000 | -3,010,000 | -3,165,000 | -3,325,000 |
Total Program Activity: | 38,825,499 | 40,328,203 | 41,903,765 | 43,817,109 |
Planned Evaluations: There are no evaluations planned for this program. | ||||
Planned Audits: An audit of the program is not required at this time. | ||||
TOTAL TPPs | 39,545,774 | 40,867,673 | 42,441,245 | 44,325,589 |
* The total program activity figure for 2006-07 includes $46 million for payments to territorial governments, other than those provided under Territorial Formula Financing (TFF), to support their budgetary revenues. ** The program activity figure for 2009-10 includes $250 million for the Wait Times Reduction Transfer. |
Over the next three years, the Department of Finance Canada will be involved in the following horizontal initiative as the lead department:
1. National Initiative to Combat Money Laundering
For further information on the above-mentioned horizontal initiatives, see http://www.tbs-sct.gc.ca/est-pre/estime.asp.
Horizontal Initiative: Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime—formerly the National Initiative to Combat Money Laundering (NICML)
Lead Department: Department of Finance Canada
Start Date: June 2000
End Date: 2009–10
Total Funding Allocated: $429,006 (thousands)
Description:
The National Initiative to Combat Money Laundering (NICML) was formally established in 2000 as part of the government’s ongoing effort to combat money laundering in Canada. Legislation adopted that year, the Proceeds of Crime (Money Laundering) Act (PCMLA), created a mandatory reporting system for suspicious financial transactions, large cross-border currency transfers, and certain prescribed transactions. The legislation also established the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to collect and analyze these financial transaction reports and to disclose pertinent information to law enforcement and intelligence agencies. In December 2001, the PCMLA was amended to include measures to fight terrorist financing activities and renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
The NICML was expanded and is now known as Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime. In December 2006, Bill C-25 amended the PCMLTFA to ensure Canada’s legislation remains consistent with international anti-money laundering and anti-terrorist financing standards as set out by the Financial Action Task Force (FATF) and is responsive to areas of domestic risk. Amendments include enhanced client identification requirements, the creation of a registration regime for money services businesses, and the establishment of an administrative and monetary penalties regime to deal with lesser infractions of the Act.
Shared outcome(s):
To detect and deter money laundering and the financing of terrorist activities, and to facilitate the investigation and prosecution of money laundering and terrorist financing offences.
Governance structure(s):
Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is a horizontal initiative comprised of both funded and non-funded partners. The funded partners include the Department of Finance Canada, the Department of Justice Canada, the Public Prosecution Service of Canada, FINTRAC, the Canada Border Services Agency (CBSA)—Immigration and Customs, the Canada Revenue Agency (CRA), and the Royal Canadian Mounted Police (RCMP); non-funded partners include Public Safety and Emergency Preparedness Canada (PSEPC), the Office of the Superintendent of Financial Institutions (OSFI), and the Canadian Security Intelligence Service (CSIS). An interdepartmental ADM-level group and working group, consisting of all partners and led by the Department of Finance Canada, has been established to direct and coordinate the government’s efforts to combat money laundering and terrorist financing activities.
Federal Partners Involved in Each Program | Name of Program | Total Allocation ($ thousands) |
Planned Spending for 2007–08 ($ thousands) |
Expected Results for 2007–08 |
---|---|---|---|---|
Department of Finance Canada | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 3,000 | 300 |
1. Consultations with public and private sector stakeholders to refine regulatory proposals.
2. Published regulations pursuant to the amended PCMLTFA. 3. Finalizing of the FATF mutual evaluation of the anti-money laundering and anti-terrorist financing regime. 4. Effective oversight of Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime. 5. Support for the 2006–07 Canadian presidency of the FATF. |
Department of Justice Canada | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 9,300 | 100 | The Criminal Division of the Department of Justice Canada plays a significant role in the regime. For 2007–08, it is anticipated that the Criminal Division will use the resources it receives to carry out work related to the FATF, including attending FATF-related international meetings, which will total five (5) over the relevant period. Attendance at the meetings is of particular importance during 2007, as Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is being evaluated this year against the FATF’s 40+9 recommendations and our presence is necessary to ensure proper discussions of the Canadian evaluation report. In addition, the Criminal Division will be the relevant authority to respond to all legal issues that develop out of that evaluation. Resources will also be allocated to ensure the Criminal Division’s continued involvement in policy development relating to money laundering and terrorist financing. Finally, the Human Rights Law Section will receive money to deal with any ancillary constitutional issue raised during the prosecutions. |
Public Prosecution Service of Canada | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 6,900 | 2,300 | The Public Prosecution Service of Canada (PPSC) plays a significant role in the regime. For 2007–08, it is anticipated that information provided to law enforcement by FINTRAC will result in more prosecutorial legal advice being provided to law enforcement. It will also result in additional charges being laid for money laundering and terrorist financing offences and thus result in an increased workload for prosecutors. The PPSC also has responsibilities related to the PCMLTFA. The planned work includes applications for Production Orders, increases in border seizure and forfeiture work associated with suspected proceeds of crime, and prosecutions related to offences created within the Act. In addition, resources will be used to provide training to law enforcement personnel and prosecutors and for the development and coordination of policy as it relates to money laundering and terrorist financing. Finally, PPSC resources will carry out work related to the FATF, including attending the FATF international meeting. |
FINTRAC | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 266,591 | 38,595 |
Technology-driven financial intelligence analysis and case disclosures that are widely used by law enforcement and intelligence agencies with a program that fosters compliance by the reporting entities.
Implementation of amendments contained in Bill C-25. |
CBSA | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 55,952 | 7,525,826 | The CBSA is responsible for administering Part 2 of the PCMLTFA, "Reporting of Currency and Monetary Instruments." The Cross-Border Currency Reporting (CBCR) Program requires that travellers report the importation and exportation of currency and monetary instruments equal to or greater than CAD$10,000. Part 2 also provides for the enforcement element of the CBCR Program, which includes conducting searches, questioning individuals, and seizing non-reported or falsely reported currency and suspected proceeds of crime. |
CRA | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 8,800 | 2,200 | Projected number of audits is 105, with a projected federal tax recovery of $8,956,905. |
RCMP (Money Laundering Units) | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 57,103 | 7,978 |
Enhanced national and international opportunities for the detection and investigation of money laundering activities.
Development of FINTRAC disclosures, as well as other intelligence, to a point where resources from Integrated Proceeds of Crime Units or elsewhere in the RCMP could then be directed towards investigations in an effort to increase seizures. Increased resource level in Canada’s three major urban centres (Vancouver, Toronto, and Montreal) to help build up the investigative capacity in those centres to conduct investigations on leads related to Canada’s anti-money laundering regime. |
RCMP (Anti-Terrorist Financing Team) | Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime | 21,360 | 5,340 | Through the gathering and analysis of financial intelligence, the Anti-Terrorist Financing Team will focus on converting that intelligence into proactive investigations, thus enhancing our ability to detect and deter terrorist financing activities. |
Total | 429,006 | 52,899 |
Results to be achieved by non-federal partners (if applicable): Not applicable
Contact:
Lynn Hemmings, Chief
Financial Crimes Section
613-992-0553
Approved by:
Serge Dupont, Assistant Deputy Minister
Financial Sector Policy Branch
613-995-5798
Date Approved:
February 15, 2007
Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime, Allocation by Year ($ thousands)
Dept./Agency | 2000–01 | 2001–02 | 2002–03 | 2003–04 | 2004–05 | 2005–06 | 2006–07 | 2007–08 | 2008–09 | 2009–10 | Total |
---|---|---|---|---|---|---|---|---|---|---|---|
Department of Finance Canada | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 300 | 3,000 |
Department of Justice Canada | 600 | 1,200 | 1,200 | 1,200 | 1,200 | 1,200 | 2,400 | 100 | 100 | 100 | 9,300 |
Public Prosecution Service of Canada | 2,300 | 2,300 | 2,300 | 6,900 | |||||||
FINTRAC | 17,985 | 25,468 | 26,820 | 22,081 | 21,406 | 22,562 | 27,387 | 38,595 | 32,634 | 31,654 | 266,591 |
CBSA1 | 4,298 | 4,298 | 4,298 | 4,298 | 4,298 | 4,298 | 7,589 | 7,525 | 7,525 | 7,525 | 55,952 |
CRA | 2,200 | 2,200 | 2,200 | 2,200 | 8,800 | ||||||
RCMP (Anti-Terrorist Financing Team) | 5,340 | 5,340 | 5,340 | 5,340 | 21,360 | ||||||
RCMP (Anti-Money Laundering Units) | 2,600 | 4,900 | 4,900 | 4,900 | 4,900 | 4,900 | 7,683 | 7,978 | 7,171 | 7,171 | 57,103 |
Total Allocation | 25,783 | 36,166 | 37,518 | 32,779 | 32,104 | 33,260 | 52,899 | 64,338 | 57,570 | 56,590 | 429,006 |
1 Funding from 2000 to 2006 was for the former Canada Customs and Revenue Agency, and Citizenship and Immigration Canada. |
"Sustainable development" is defined as development that meets the needs of the present without compromising the ability of future generations to meet their own needs, and it is a key commitment of all federal departments. In 1995, the Auditor General Act was amended to require each department to prepare and update a sustainable development strategy (SDS). These strategies are tabled in the House of Commons, and the Commissioner of the Environment and Sustainable Development monitors the progress toward their implementation.
An SDS is intended to outline a department's goals and action plans for integrating sustainable development into its policies, programs, and operations over three-year planning periods.
The Department of Finance Canada's Sustainable Development Strategy (SDS) for the period of 2007–09 is the department's third update of its original SDS tabled in Parliament in December 1997. The 2007–09 SDS builds upon the foundation of previous strategies, including key achievements in debt reduction, evaluating environmental tax proposals, strategic environmental assessment, and green stewardship. The Department's 1998–2000, 2001–03, 2004–06, and 2007–09 strategies can be found at http://www.fin.gc.ca/purl/susdev-e.html.
The Department's vision for sustainable development is "Economic and fiscal policy frameworks and decisions that promote equity and enhance the economic, social, and environmental well-being of current and future generations." It highlights the long-term ideal that the Department will strive to achieve. For the 2007–09 SDS, the Department has set out five long-term goals that focus on key areas where it can contribute, within its mandate, to sustainable development: (1) fiscal sustainability and a high standard of living for future generations; (2) strong social foundations; (3) integration of sustainable development considerations into policy making; (4) integration of sustainable development considerations into the economy; and (5) demonstration of the Department's commitment to sustainable development in operations.
Under each of these five goals, the Department's action plan for sustainable development sets out a number of objectives and targeted actions over the planning period. In undertaking these actions over the next three years, the Department recognizes that fully achieving sustainable development will take time and continued effort. This requires a long-term strategic approach, while continuing to commit to short-term actions that make progress toward the departmental vision for sustainable development.
A detailed outline of the Department's objectives, actions, and planned results in its SDS in 2007–08 is available at http://www.fin.gc.ca/purl/susdev-e.html.
Internal audits will be undertaken as required under a three-year risk-based audit plan being developed and that is to be approved by the Internal Audit and Evaluation Committee in early 2007–08.
Development of a risk-based evaluation plan is planned for 2007–08 that will identify evaluation requirements for 2007–08, 2008–09, and 2009–10.
1. Name of Internal Audit / Evaluation |
2. Audit Type / Evaluation Type |
3. Status |
4. Expected Completion Date |
5. Electronic Link to Report |
Audit of Administrative Controls over the Foreign Debt Portfolio and Foreign Currency Asset Reserves |
Assurance |
Completed |
||
6. Electronic Link to Internal Audit and Evaluation Plan: Not Applicable |
As part of a branch-wide business transformation initiative, the Corporate Services Branch (CSB) has initiated a review of all its functional activities (Financial Management, Human Resources Management, Information Management/Information Technology, Procurement, Facilities Management, Audit, and Security services). This review was launched in September 2006. The purpose of the review is to build CSB's capability and capacity to deliver integrated corporate services to its clients. Through the business transformation exercise, CSB will:
This business transformation is being designed to achieve the following results for CSB clients:
The business transformation of the Corporate Services Branch is designed to increase the Branch's ability to support the Department's programs in meeting their commitments and aligning their results to the strategic direction of the Department and the government.
Annual Financial Report of the Government of Canada and Fiscal Reference Tables
Annual Report to Parliament on the Operations of the Exchange Fund Account
Canada Investment and Savings Annual Report
Debt Management Report
Debt Management Strategy
Departmental Performance Report
Economic and Fiscal Update
Economy in Brief—Quarterly
Federal budget
Fiscal Monitor—Monthly
Government of Canada Securities—Quarterly
Report on Operations under the Bretton Woods and Related Agreements Act
Report on Operations under the European Bank for Reconstruction and Development Agreement Act
Report on Plans and Priorities
Sustainable Development Strategy
Tax Expenditures and Evaluations
Note
The reports listed above are available on the Department of Finance Canada website at http://www.fin.gc.ca, with the exception of the annual report for Canada Investment and Savings, which is available at http://www.csb.gc.ca.
Home page: http://www.fin.gc.ca
Email messages for the Minister of Finance, the Honourable James M. Flaherty, P.C., M.P: jflaherty@fin.gc.ca
Comments or questions regarding the information on the Department of Finance Canada website:
Consultations and Communications Branch
Department of Finance Canada
140 O'Connor Street
Ottawa ON K1A 0G5
Canada
Telephone: 613-992-1753
Email: consultcomm@fin.gc.ca
Printed copies of Department of Finance Canada publications:
Distribution Centre
Department of Finance Canada
140 O'Connor Street
Ottawa ON K1A 0G5
Canada
Telephone: 613-995-2855
Fax: 613-996-0518