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• Canada's involvement in the construction chemical weapons destruction facilities in Russia;
• dismantlement of seven nuclear submarines to date, part of an initial commitment to dismantle 12 submarines by the end of FY 2007-08;
• implementation of five physical projects to improve the security of nuclear material in Russia, completion of two projects to recover, secure and store radioactive power sources, and assistance to countries of the former Soviet Union (FSU) for physical protection upgrades and border security, via the International Atomic Energy Agency and the US;
• funding to date over 100 research projects worth approximately $24 million through the International Science and Technology Center (ISTC) in Moscow and the Science and Technology Center in Ukraine (STCU) in Kyiv, involving the redirection of over 2,000 former FSU weapons scientists to peaceful and sustainable research; and
• projects to develop and implement bio-safety/bio-security standards and practices, translate guidelines and manuals, and encouragement of biosafety associations in Russia and the FSU.

• to promote the common welfare by furthering action for the purpose of: raising levels of nutrition and standards of living of the peoples within Member Nations;
• to secure improvements in the efficiency of the production and distribution of all food and agricultural products, including fisheries, marine products, and forestry products; and
• to better the condition of rural populations.

• Rapid, integrated and better coordinated Canadian response to international requirements for short-and medium-term crises prevention, stabilization, peace building and reconstruction;
• Improved Canadian contribution to the mitigation of natural disasters and complex emergencies and restoration of security and indigenous governance capacity;
• Expanded global and regional capacity for peace support operations

The ultimate result of the GPSF and its component programmes is an "Improved Canadian contribution to peace and security and the safety and well being of beneficiaries living in targeted areas."

Description: Grants and Contributions in Aid of Academic Relations in 2006-2007 encompass grants and contributions to academic and education or research related institutions and organizations in support of such activities as:

• Canadian Studies;
• International scholarships and fellowships; and
• international education, including provincial participation in international multilateral activities in the area of education.

These programs support Public Diplomacy strategies throughout the department, by promoting the following:

• a greater knowledge of Canada through research and teaching;
• partnerships within North America and with other regions through academic programming;
• academic networks, student exchanges and conferences related to Canada and Canadian foreign policy interests;
• the Canada US Foundation on Educational Exchange to foster bilateral understanding and dialogue;
• increased international mobility for Canadian academics and students;
• international linkages of Canadian post-secondary institutions;
• international research networks; and
• public discussion of key issues related to Canada and Canadian foreign policy.

They foster stronger partnerships with Canadians, through partnerships with academic institutions, associations, organizations and individuals. They advance Canada's global citizenship and contribute to the effective implementation of Canadian development assistance in the field of human capital development through scholarships and other programs of academic cooperation with developing countries, as well as, in support of objectives related to public diplomacy, peace and security. Their redesign and realignment assist in main streaming public diplomacy within DFAIT, and contribute to realization of departmental priorities.

Objective: To improve knowledge of Canadian issues among key foreign audiences and to increase participation of Canadians and foreigners in the Division's programs.

Strategic Outcome: ADVANCING CANADA'S INTERESTS INTERNATIONALLY: In partnership with Canadians, Canada and its values are projected to the world, its interests are pursued abroad and Canadians are better able to interpret the world.
Results Achieved:

• Networks of well-informed foreign professionals and leaders with sustained interest in Canada were expanded, including via support provided to acquisition of Canadian library materials, access to data bases on Canada, a range of conferences, research activities and teaching on Canada thereby engaging the academic community, business and government in key countries/regions (for example, through the Canadian Studies program in key countries including the US and Mexico, China, India, Brazil, and Russia, etc);
• Links and exchanges between Canadian and foreign partners (academics, researchers, students and young people) were nurtured, including through scholarships which support Canadian university linkages abroad, support for Canadian academics to speak on Canadian issues at international events, awards to foreign academics to developm networks in Canada and pursue joint research interests, study tours and internships by international students as well as by Canadian students abroad and the facilitation of foreign government and other international awards to Canadian students.
• Canadian education excellence was projected abroad through grants to the Council of Ministers of Education Canada for representation of Canada at international education events and federal/provincial cooperation, and through the facilitation of the Edu-Canada unit's strategy to step up education marketing efforts in key countries including USA, Mexico, Brazil, China and India.
• Canada's bilateral objectives in key countries were advanced through grants to education-related activities which facilitated cooperation and dialogue and people-to-people exchanges.

Description: This program aims to achieve the following:

• to create an awareness abroad of Canadian distinctiveness and culture;
• to articulate Canadian attitudes and positions in official, media, business, cultural and educational circles as well as among the public generally;
• to reflect internationally the growing creativity and scope of Canadians; and
• to develop interest in studies exclusively about Canada in institutions of higher learning abroad.

• FILM AND TELEVISION $98,480 for 64 PROMART Grants to Canadian filmmakers. Highlights: Football Country Alberta Ltd. for Bruce McCulloch's "Comeback Season" at the Tribeca Film Festival, New York; Susan Rynard's "Kardia" at the Shanghai International Film Festival
• FILM AND TELEVISION $307,810 for 11 PROMART Grants to Canadian film and television festivals. Highlights: Foreign buyers invited to the Toronto International Film Festival; Festival International du Film sur l'Art, Montreal; Banff World Television Festival; Hot Docs International Documentary Festival, Toronto
• LITERATURE AND PUBLISHING $87,350 for 48 PROMART Grants to Canadian authors and publishers. Highlights: Susan Swan for the Madrid Launch of "What Casanova Told Me"; David Adams Richards for "Meagre Fortune" tour of the United States; Association for the Export of Canadian Books (AECB) to organize Canadian Travelling Trade Collections in China, India, Korea, and Europe
• VISUAL ARTS AND MEDIA $600,300 for 49 PROMART Grants to Canadian artists and galleries. Highlights: Emily Carr Institute for Canadian participation at the Venice Biennale of Architecture; South Alberta Art Gallery exhibition of art by Janet Cardiff and George Bures Miller in Spain and Germany
• FOREIGN POLICY PRIORITIES $294,275 for 20 PROMART Grants for Foreign Policy Priority projects chosen from 81 submissions in a "Regional Challenge Fund" competition among Missions
• PERFORMINGS ARTS -- Dance $737,200 for 30 PROMART Grants -- Highlights: Royal Winnipeg Ballet 12 performances in the United States; Compagnie Marie Chouinard 49 performances in Asia and Europe
• PERFORMINGS ARTS -- Music $817,400 for 58 PROMART Grants -- Highlights: Tafelmusik 15 performances in the United States and Europe; Les violins du Roy 11 performances in the United States
• PERFORMINGS ARTS -- Theatre $859,000 for 36 PROMART Grants -- Highlights: Theatre Smith-Gilmour 22 performances in Taiwan, Singapore and China; Théâtre Sans Fil 41 performances in the United States
• PERFORMINGS ARTS -- Multi-disciplinary $280,200 for 11 PROMART Grants -- Highlights: Cirque Eloize 138 performances in South America, Europe and Asia; Les 7 doigts de la main 133 performances in the United States, Europe and Asia
• PERFORMINGS ARTS -- Festivals $275,000 for 15 PROMART Grants -- Highlights: Foreign buyers invited to the East Coast Music Awards, Charlottetown; Just for Laughs Festival, Montreal; PuSh International Performing Arts Festival, Vancouver; Milk International Children's Festival of the Arts.

Meanwhile, PROMART grants program authority has been extended by the Treasury Board secretariat for the 2007-08 Fiscal Year, while the Cultural Relations Transfer Payment Program is aligned to enhance PROMART's focus on foreign policy priorities.

Significant Audit and Evaluation Findings: The latest external audit of the IAEA Accounts was completed on 30 March 2007, covering the financial period ending 31 December 2006. The German Federal Court of Audit conducted its audit in accordance with the Common Auditing Standards of the Panel of External Auditors of the United Nations, the Specialised Agencies and the International Atomic Energy Agency. Those standards require that the auditors plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The audit included examining, on a test basis, evidence supporting the amounts and disclosures in the Agency's financial statements. The audit also included assessing the accounting principles used and significant estimates made by the Director General, as well as evaluating the overall financial statement presentation. As a result of this examination, the Vice President of the German Federal Court of Audit certified that, in his opinion:

(a) The financial statements reflect properly the recorded financial transactions for the biennium ended 31 December 2006 and present fairly, in all material respects, the Organisation's financial position as at 31 December 2006;

(b) The financial transactions reflected in the statements, which auditors have tested as part of the audit, have in all significant respects been in accordance with the applicable Financial Regulations and Legislative Authority; and

(c) The financial statements have been prepared in accordance with the stated accounting policies and procedures, which were applied on a basis consistent with that of the preceding financial period.

Description: Canada's annual assessed contribution to the ILO, a UN specialized agency, is a legally binding obligation of membership. The purpose of membership is to further the Government of Canada's foreign policy goals related to international labour and social policy issues and provide it with a voice in the international community. For further information, see http://www.ilo.org.

Four strategic objectives guide the ILO program and budget:

(i) to promote and realize standards and fundamental principles and rights at work;

(ii) to create greater opportunities for women and men to secure decent employment and income;

(iii) to enhance the coverage and effectiveness of social protection for all; and

(iv) to strengthen tripartism and social dialogue.

Results Achieved:

• development and effective supervision of international labour standards and realization of fundamental principles and rights at work;
• targeted action against child labour, giving priority to the urgent elimination of its worst forms;
• contributions to poverty reduction through promotion of coherent economic and social policies that support employment creation;
• assistance to constituents in the development of skills and employability policies and programs for decent work;
• better instruments and tools for policy analysis and formulation that support good governance and the extension of social protections to vulnerable workers;
• strengthened social dialogue on labour and social policy issues at national and international levels; and
• improved organizational effectiveness, transparency and accountability.

Name of Transfer Payment Program: North Atlantic Treaty Organization - Civil Administration (TB #807627)

• The capacity of the Organization of American States to promote democracy in the Americas, a key strategic priority for Canada was increased through the support and participation of Canada in nine electoral observation missions conducted by the OAS (Peru, Colombia, Haiti, Bolivia, Guyana, Nicaragua, Venezuela, St. Lucia, Ecuador) in the Hemisphere.
• Canada's support for the continued engagement of the OAS in Haiti and Colombia contributed to the consolidation and reconstruction in Haiti and the peace process in Colombia.
• Canada's initiative for the adoption of a resolution at the OAS on the promotion and strengthening of democracy, in collaboration with key hemispheric partners such as the United States, Brazil and Chile, strengthens the role of the Organization in this key area.
• The effectiveness of the OAS in addressing hemispheric security-related challenges was increased through the support provided by Canada to the Organization's work in the fight against illicit drugs, trans-national organized crime, and in counter-terrorism.
• Canada supported and hosted activities (workshops) to enhance the OAS' role in the area of mutual legal assistance, thus contributing to strengthening the rule of law in the Americas.
• Canadian leadership and influence at the OAS was reinforced through the hosting of key events such as the Third Inter-American Meeting of Ministers of Culture, in Montreal, November 2006, which promoted cultural diversity in the region, and Canadian participation in the First Inter-American Meeting of Ministers on Sustainable Development, in December 2006.
• Canada's support for the Summit Office of the OAS increases the Organization's capacity to play fully its central and coordinating role among Inter-American Institutions in the context of the Summit of the Americas process, a key forum for the advancement of Canada's balanced agenda in the Hemisphere focussing on democracy, prosperity and security.

Significant Audit and Evaluation Findings: A yearly evaluation of the resources of the OAS General Secretariat is conducted by the Board of External Auditors, an external audit committee in charge of examining the accounts of the General Secretariat, including that of the OAS Regular Fund (to which the member states assessed contribution is devoted).

In its Annual Audit for the year 2006, the Board of External Auditors expressed satisfaction at the improvement of OAS management and the progress made by the Organization in the application of its previous recommendations to improve the Organization's financial situation. Its 2006 reports includes recommendations to continue with modernization efforts, in particular in addressing issues of indirect cost recovery, planning and adapting the OAS system to international accounting standards. Canada is supporting the implementation of these recommendations some of which have already been put in place with the adoption of the Program Budget for 2008.

Description: Canada's annual assessed contribution to the OSCE is an obligation arising out of Canada's commitments as one of the 56 participating states of the organization. Canada's contribution furthers its foreign policy goals by funding programs implemented by the OSCE's institutions and field operations in priority foreign policy areas for Canada related to regional and international security.
The OSCE is a focused regional forum with a comprehensive and cooperative approach to security. Canada's contribution to the organization's unified budget covers the costs associated with the implementation of the organization's work programs and activities in three dimensions: political and military aspects of security; economic and environmental cooperation; and cooperation in humanitarian and other fields. This integrated approach allows the OSCE to make a significant contribution to furthering European security and transatlantic cooperation through non-coercive measures. Canada's contribution also supports stronger partnership with Canadians in developing and implementing Canada's international security policy, through the involvement of members of Parliament in the work of the OSCE Parliamentary Assembly, the deployment of Canadians to OSCE field operations, and the contribution of Canadian experts to the organization.

The OSCE unified budget, based on a programmatic approach, is approved by the OSCE Permanent Council on a yearly basis. The OSCE accounts are subject to an annual report by external auditors as well as an internal oversight annual report that are made available to participating states.

• to maintain international peace and security;
• to develop friendly relations among nations;
• to achieve international cooperation in solving international problems; and
• to be a centre for harmonizing the actions of states in the attainment of these common ends.

• universal primary education in all countries by 2015;
• gender disparities in primary and secondary education eliminated or greatly reduced in most member states;
• preparation, launch and implementation of a 10-year UN Literacy Decade and Plan of Action in order to reach the target of achieving a 50% improvement in levels of adult literacy by 2015;
• comprehensive and broad-based HIV/AIDS education and prevention campaigns conducted, particularly among the 15-24 age group in Africa and South Asia;
• impact of HIV/AIDS pandemic on educational capacities assessed;
• a Convention on the Diversity of Cultural Content and Artistic Expression, a Convention Against Doping in Sport;
• a Declaration on Bioethics;
• broadening of public debate on intellectual property and the fair use of works for educational, scientific and cultural purposes; and
• enhanced knowledge to assist in earthquake risk reduction through re-enforcement of regional and worldwide exchange of seismic data.

Results Achieved: DFAIT worked with others internationally to successfully resume full Doha Development Agenda negotiations (in January 2007) and intensified efforts to bring these negotiations to a successful close. The department was a leader in helping to launch the "plurilateral" negotiating modality for services in the WTO, during early 2006. This approach to services negotiations was a key element of the WTO Hong Kong Ministerial Meeting decision. Canada continued to participate actively in the Rules Negotiations to clarify and improve subsidy disciplines and the rules governing anti-dumping and countervail investigations. For example, Canada tabled legal texts on start-up subsidies and public interest procedures.

DFAIT made some further progress on the accession of Russia (particularly through the multilateral process) and successfully brought Vietnam into the WTO on terms that will benefit Canadian goods and services exporters.

Canada participated in all standing and ad hoc meetings of the WTO in 2006 - 2007. These included, inter alia, regular participation in General Council meetings (which deal with institutional and administrative issues that have a strong trade policy component); the Dispute Settlement Body; the Trade Policy Review Body; WTO Informal Ministerial Meetings; Senior Official Meetings; as well as numerous other councils, committees, working parties, and negotiating groups covering the wide range of WTO issues. Other international work by Canada, such as that in the OECD, APEC and the Cairns Group, also supports our work at the WTO.

Overall, Canada participated in WTO Trade Policy Reviews of 19 countries in 2006 - 2007, including the TPRs of China, Japan and the European Communities. The Trade Policy Review is a peer review exercise designed to provide a collective appreciation and understanding of the full range of individual Members' trade policies and practices and their impact on the multilateral trading system.

In March, 2007 Canada was subject to its 8th Trade Policy Review at the WTO. The TPR of Canada provided an opportunity to discuss the evolution of Canadian trade policies and practices since 2003. The TPR led to an open discussion between Canada and its trading partners, confirmed Canada's commitment to the multilateral trading system and illustrated the contribution that sound economic policies an open and transparent trade regime can make to achieving high living standards.

Canada continued to be an active participant in WTO dispute settlement proceedings. Canada was a complainant in four ongoing disputes (U.S. - Continuing Dumping and Subsidy Offset Act of 2000 (Byrd), EC - Measures Affecting the Approval and Marketing of Biotech Products, China - Measures Affecting Imports of Auto Parts, and U.S. - Subsidies and Other Domestic Support for Corn and Other Agricultural Products). Canada was a defendant in three cases (Canada - Grain Corn from the United States (Preliminary Determination of Injury), Canada - Continued Suspension of Obligations in the EC-Hormones Dispute, and Canada - Tax Exemptions and Reductions for Wine and Beer). Disputes involving softwood lumber were either completed or terminated pursuant to the Softwood Lumber Agreement in 2006. Canada was also active as a third party in a number of important disputes, including U.S. - Continued Suspension of Obligations in the EC- Hormones Dispute, EC - Export Subsidies on Sugar and U.S and EC cases on Measures Affecting Trade in Large Civil Aircraft.

Comments on Variance: The difference between Canada's planned spending and actual spending over 2006-07 can be attributed to the following factors:

1. An increase in the WTO budget that has been partially offset by a reduction in Canada's assessed share;
2. Currency fluctuations between the Swiss Franc and the Canadian dollar; and
3. The different dates when TB must be advised of Canada's estimated assessment and the date when the WTO budget is approved. Estimates for 2006-07 were presented to TB in September 2005. The 2007 WTO budget was approved in December 2006.

The approved 2007 WTO budget increased by 0.90% over 2006. Canada's assessed contribution was CHF 6,638,790, based on a 3.678% share or approximately CHF 439,000 less than the initial estimates presented in October 2005.

Contributions are determined according to each member's share of international trade, based on trade in goods, services and intellectual property rights, for the last three years for which data is available. A Member's share will change over time with the entry of new members.

There have been many pressures on WTO operations, especially in furtherance of the ongoing Doha Round negotiations following the 2005 Hong Kong Ministerial Conference. The number of WTO meetings is expected to continue to increase. Continued increases in the use of WTO services and the costs of the Dispute Settlement Body are also expected.

In past years, currency fluctuations have played an important role in the variance between planned and actual spending. They continue to do so. Contributions are paid to the WTO in Swiss Francs (CHF), and as such the cost in Canadian dollars changes depending on the exchange rate. On April 1, 2006, the exchange rate was CHF 1.0 to Cdn $1.1161. By December, when Canada's assessment was paid, CHF 1.0 equalled Cdn $1.0467.

Significant Audit and Evaluation Findings and URL to Last Audit and/or Evaluation: The last report of the external auditor is for the biennium 2004/2005. Their report can be found in WTO document WT/BFA/W/142. The external auditor for the period in question was the Austrian Court of Audit.

The auditors examined the Financial Statements in WTO document WT/BFA/W/128 relating to the financial period 2004 and the Financial Statements in WTO document WT/BFA/W/142 relating to the financial period 2005, both including Statements 1 to 6, Schedules A, B, C, D, E, F, G, H and an Annex. The auditors also examined the Financial Statements on Extra-Budgetary Funds in WTO document WT/BFA/W/143 relating to the financial period 2005 on a sample basis. Their examination included a general review of the accounting procedures and such tests of the accounting records and other supporting evidence, as they considered necessary in the circumstances. As a result of the examination, the auditors provided the opinion that the financial statements, which were prepared in conformity with the accounting policies described in the Annex of WTO documents WT/BFA/W/128 and WT/BFA/W/142 were applied on a basis consistent within the biennium 2004/2005. They presented fairly the financial position of the World Trade Organization as at the end of each of the two financial periods covering the biennium 2004/2005. The financial statements were prepared in accordance with the stated accounting principles. The transactions were in accordance with the Financial Rules and the Financial Regulations set out in WTO documents WT/L/157 and WT/L/156/Rev.1 including further instructions in WT/BFA/W/121 and with legislative authority.

BUDGET EXPENDITURE 2004-2005: Expenditure for the WTO and the Appellate Body Secretariat for 2004 amounted to CHF 158,824,886 equating to a budgetary saving of CHF 2,951,614. These budgetary savings were comprised of CHF 2,624,739 for the WTO Regular Budget and a budgetary surplus of CHF 326,875 for the Appellate Body and its Secretariat.

Expenditure for the WTO and the Appellate Body Secretariat for 2005 amounted to CHF 166,738,076 equating to a budgetary saving of CHF 1,965,324. These budgetary savings were comprised of CHF 1,790,561 for the WTO Regular Budget and a budgetary surplus of CHF 174,763 for Appellate Body and its Secretariat.

SURPLUS ACCOUNT 2004-2005: The Surplus Account for 2004 (Statement 3, document WT/BFA/W/128) showed a deficit amounting to CHF 3,036,427 as at 31 December 2004, due to the opening deficit balance of CHF 6,587,883 on 1 January 2004. This amount was covered from the Working Capital Fund in accordance with WTO Financial Regulation 26.4.

The Surplus Account for 2005 (Statement 3, document WT/BFA/W/142)) showed a deficit amounting to CHF 309,983 as at 31 December 2005, due to the opening deficit balance of CHF 3,036,427 on 1 January 2005. This amount was covered from the Working Capital Fund in accordance with WTO Financial Regulation 26.4.

Name of Transfer Payment Program: World Health Organization (TB #784857)

Results Achieved:

• Enhanced global health security (maintaining a comprehensive outbreak alert and response mechanism supported by new international health regulations; responding rapidly and effectively in crisis situations);
• Accelerated progress toward achieving the Millennium Development Goals (reducing maternal mortality, improving child survival, addressing the global pandemics of HIV/AIDS, tuberculosis and malaria, promoting healthy environments, increasing access to essential medicines);
• Promotion of equity in health (strengthening health systems to reach the poor and disadvantaged); and
• Ensured accountability, by improving organizational effectiveness, transparency and accountability.