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Minister's Message

I am pleased to present Public Works and Government Services Canada’s Departmental Performance Report for the year ending March 31, 2010.

The past year has been a particularly productive one for PWGSC. I am proud of the department’s role in the success of the 2010 Olympic and Paralympic Winter Games. Led by our employees in the Pacific Region, PWGSC provided real property, procurement, translation, information technology, and communications services support for our federal partners, resulting in outstanding feedback, and a valuable contribution to the Winter Games.

We also implemented the first year of PWGSC’s Accelerated Infrastructure Program, under Canada’s Economic Action Plan. Work included the completion of 1,334 projects nationally, including repairs and renovations of Crown-owned buildings and bridges; enhancing accessibility to buildings where federal services are provided; advancing the remediation of contaminated sites; and developing a plan for the future of the Grande-Allée Armoury in Quebec City. With careful planning and execution, the department succeeded in putting to work over 95 percent of its first-year funding, helping to generate jobs for Canadians, maintain economic stability, and improve important infrastructure.

Working with our Parliamentary partners and other stakeholders, our work continued on the rehabilitation and preservation of the Parliamentary Precinct. Good progress was made on a number of major projects to address health and safety concerns, to preserve the architectural heritage of these buildings, and to facilitate the ongoing operations of Parliament.

As an integral component of the Canada First Defence Strategy, we moved forward with improving the efficiency of military procurement through various engagement initiatives. In collaboration with Department of National Defence and Industry Canada, PWGSC engaged the Canadian Association of Defence and Security Industries to conduct consultations with the defence and security industries on ways to further improve military procurement. We also sponsored an industry forum on shipbuilding procurement, which provided input for a new National Shipbuilding Procurement Strategy. The results from these consultations and others are being considered as part of our continued efforts to improve military procurement.

In addition, the Office of Small and Medium Enterprises directly assisted thousands of individuals and businesses through outreach activities aimed at facilitating greater access to federal procurement opportunities. An exciting pilot project, the Canadian Innovation Commercialization Program, was also announced in Budget 2010 to encourage innovation in Canadian industry, and showcase innovative products and services to federal departments.

Important progress was made on our work to transform the administration of pensions throughout the public service, a large and complex IT project which has proceeded on budget and within 60 days of the planned completion date. A second major IT project was launched to modernize the government’s 40-year old pay system, and transform the way in which the services associated with this function are delivered.

We also launched the Canadian Language Sector Enhancement Program to strengthen the capacity of the Canadian Language Sector, and support commitments made by the government in the Roadmap for Canada’s Linguistic Duality 2008-2013: Acting for the Future.

The large and diverse range of PWGSC’s activities, and the professionalism of our employees, ensures an exciting story of performance and accomplishment. I look forward to building on the progress outlined in this report in the service of the government and Canadians.

 

Section I – Departmental Overview

Raison d’être and Responsibilities

Public Works and Government Services Canada (PWGSC) plays a key role in the daily operations of the Government of Canada. We are its principal banker, accountant, central purchasing agent, linguistic service provider and authority, office space portfolio manager and enabler of access to government services online.

Our vision is to excel in government operations by delivering high-quality services and programs that meet the needs of federal organizations and ensure sound stewardship on behalf of Canadians.

The Department, founded in 1841, was instrumental in the building of our nation’s canals, roads and bridges, the Houses of Parliament, post offices and federal buildings across the country. Today, we have evolved into a sophisticated operational arm of government that employs some 14,000 staff working in the National Capital Area and across the country including our five regional offices in Halifax, Montreal, Toronto, Edmonton and Vancouver.

The Department of Public Works and Government Services Act, (1996) established the Department and set out the legal authorities for PWGSC’s services. The act established PWGSC as a common service organization providing government departments, boards and agencies with support services for their programs, including:

• acquisition of goods and services;
• office accommodation and facilities;
• architectural and engineering services;
• construction, maintenance and repair of public works and federal real property; and
• linguistic, information technology, telecommunications, industrial security, consulting and auditing services.

The Minister of PWGSC is also the Receiver General for Canada and has the authority for the administration of services related to benefits, superannuation, pension plans, and the disbursement of pay to federal employees. The Minister is also responsible for maintaining the Public Accounts of Canada.

Our goal is to manage our business in a way that strengthens accountability and adds value for our clients, and for Canadians. In doing so, PWGSC:

• injects more than $14 billion annually into the Canadian economy through government procurement;
• issues more than 14.5 million federal pay and pension payments to Canadians;
• provides accommodation to parliamentarians and more than 255,000 public servants in 1,800 locations across Canada;
• provides translation and interpretation services for more than 1,800 sessions of Parliament annually, and translates 1.7 million pages of text on behalf of other federal organizations; and
• handles more than $1.99 trillion in cash flow transactions as the Receiver General for Canada.

Strategic Outcomes and Program Activity Architecture

PWGSC’s Program Activity Architecture (PAA), as approved by Treasury Board, supports our strategic outcome which is high-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions. The following table lists the nine program activities that comprise PWGSC’s PAA.

Note: Although it is a program activity of Public Works and Government Services, the Office of Procurement Ombudsman is required to operate in an impartial and independent manner. The details of its operations and performance results are provided in the Procurement Ombudsman's annual report, which is tabled in each House of Parliament following the fiscal year by the Minister of Public Works and Government Services in accordance with legislative requirements.

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Performance Summary

The 2010 Olympic and Paralympic Winter Games provided an opportunity to showcase Canada to the world. Some 31 departments, including PWGSC, partnered to play a significant role in the Games. PWGSC successfully provided essential services such as translation, procurement, real property, IT, and communications services to these federal departments and agencies enabling them to deliver on their Olympic and Paralympic mandates and commitments. The feedback from these groups has been outstanding and the tangible results of our work could be seen on the ground throughout the 2010 Winter Games.

Our 2009-2010 Report on Plans and Priorities set out other commitments for the year, including: improving the efficiency of military and major procurements by streamlining the procurement process; modernizing our pension and pay administration systems; making investments to protect the architectural integrity of the buildings in the Parliamentary Precinct; modernizing our real property business to provide improved services to clients and provide better value for money for taxpayers; working with other federal departments to improve environmental performance in government operations; leading government-wide information technology transformation; helping to ensure security of supply of qualified professionals to meet growing demand for translation and interpretation services; and working to streamline processes for our Industrial Security Program.

In 2009, we made important progress on all these priorities: In procurement, we engaged industry directly for advice on how to improve our approach to marine procurement, which provided input to the National Shipbuilding Procurement Strategy. We worked closely with other government departments to develop a framework of greening government operations targets, performance measures and accountabilities. We undertook projects to accommodate the relocation of Parliamentarians, staff and operational services in the Parliamentary Precinct, and awarded a contract to begin the rehabilitation of the Wellington Building. As well, we developed a Framework and Methodology for IT transformation, and completed Track 1 of the Data Centre Feasibility Study.

Regarding Pension Administration Transformation, we implemented a suite of IT applications to improve client services, designed and developed a new core of pension system components for contributor accounts, and we launched Pay Administration Transformation – a major project to replace the government’s 40-year-old pay system. In July, 2009, we also launched the Canadian Language Sector Enhancement Program that gives effect to the commitments made by the government in the Roadmap for Canada’s Linguistic Duality 2008-2013: Acting for the Future. The program aims to provide support for the development of a skilled Canadian labour force, and strengthen the capacity of the Canadian language sector.

These accomplishments are further detailed in Section 2.

In addition to these accomplishments, over the past fiscal year PWGSC developed a new Client Service Strategy, consisting of six elements: 1) Departmental Service Agreements that identify joint PWGSC-client priorities, and outline the PWGSC services provided to the client department; 2) Service Standards, to improve discipline in measuring our performance; 3) a description of PWGSC’s newest, innovative service offerings; 4) a renewed approach to Client Engagement to ensure early identification and common understanding of the needs and priorities of clients; 5) more effective client satisfaction measurement and follow-up, including a departmental Client Barometer; and 6) a Service Culture component to reinforce a client-oriented service approach in our work.

PWGSC and Canada’s Economic Action Plan

Public Works and Government Services Canada plays an important role in the implementation of Canada’s Economic Action Plan. As a major custodian of Crown-owned assets, the Department accelerated repairs and renovations of Crown-owned infrastructure, increased the accessibility of its buildings, rehabilitated four of its 11 bridges, developed a plan for the future of the Grande-Allée Armoury in Quebec City, advanced the work on many contaminated sites and repaired part of the Alaska Highway. Through our architectural and engineering services we have also assisted other departments in carrying out their projects under Canada’s Economic Action Plan.

In addition to our regular volume of work, PWGSC delivered a high volume of projects in a short time frame with an increased requirement for oversight and reporting. PWGSC used its existing networks, good business practices and heightened reporting and monitoring processes to address this challenge and to ensure value for money received from the Economic Action Plan expenditures.

PWGSC EAP Performance: Year 1

Financial Measure	Target	Actuals
% of $237 million budget spent	95%	95.9% (1,623 projects initiated; 1,334 completed)

Performance, Financial and Human Resource Summary

(in millions of dollars)

Program Activity	2008-2009 Actual Spending	2009-10
		Main Estimates	Planned Spending	Total Authorities	Actual Spending*
Acquisitions	146.0	110.4	110.4	145.6	135.7
Accommodation and Real Property Assets Management	1,727.4	1,674.5	2,157.3	2,205.9	1,875.5
Receiver General for Canada	115.0	131.2	131.2	132.4	113.9
Information Technology Infrastructure Services	1.3	14.4	14.4	28.4	6.6
Federal Pay and Pension Administration	41.9	31.6	31.6	46.1	43.6
Linguistic Management and Services	68.5	62.7	70.2	79.3	65.5
Specialized Programs and Services	76.9	87.3	87.3	109.1	99.9
Procurement Ombudsman	3.7	4.3	4.3	4.7	4.0
Internal Services	278.7	271.1	269.6	353.1	322.5
DEPARTMENT TOTAL	2,459.4	2,387.5	2,876.3	3,104.6	2,667.2
Less: Non-respendable Revenues	68.8	30.4	30.4	79.1	79.1
Plus: Cost of service received without charge	57.0	N/A	N/A	N/A	N/A
NET COST OF DEPARTMENT	2,447.6	2,357.1	2,845.9	3,025.5	2,588.1
Human Resources			March 31, 2009	March 31, 2010	Difference
Full-Time Equivalents (FTEs)**			13,928.0	13,656.5	(271.5)

* Note: Actual expenditures according to current year parliamentary authorities used.

** The variance between planned and reported FTE figures for PWGSC’s Program Activities is due in part to changes in the way PWGSC tracks and reports on FTEs. For 2009-2010, PWGSC ceased using its financial system to report on FTEs and introduced a new methodology based on Active Population counts produced by our human resources system. This has affected the comparability of FTE information at the departmental level between fiscal years. The discrepency between the FTEs planned for the department overall for 2009-2010, and the actuals reported, is less than 1.9%. For additional details on the variance in FTE figures, please see Section 2 of this report. It should be noted that planned figures are forecasts, whereas actuals are based on Active Population counts. Fluctuations in FTEs do not necessarily align with fluctuations in spending.

Contribution of Priorities to Strategic Outcome

PWGSC’s program activities, which support federal departments and agencies, are aligned to the Government Affairs spending area of the Treasury Board Secretariat’s reporting framework (see Whole of Government Framework in Canada’s Performance 2009-2010). Specifically, the Government of Canada Outcome Area, supported by the Procurement Ombudsman is "a transparent, accountable and responsive federal government" while our other program activities "support well-managed and efficient government operations."

PWGSC’s strategic outcome is "high quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions." Our efforts in support of this outcome include the 14 key operational and management priorities described in the following table, which are also reflected in many of the program activity planning highlights in Section 2 of this report. The performance status for each priority aligns with commitments made in the 2009-2010 Report on Plans and Priorities which can be found at:
http://www.tbs-sct.gc.ca/rpp/2009-2010/inst/svc/svc01-eng.asp#s1b

OPERATIONAL PRIORITIES	Type	Program Activity	Description and Performance Status
Military and Major Procurement	Ongoing	Acquisitions	In 2009, the Government of Canada launched a number of initiatives to engage industry directly as part of its efforts to further streamline acquisition processes and improve the efficiency of military and major procurements. Government’s ongoing efforts to consult with industry earlier and more often in the procurement process (for example, sharing draft documents, Industry Days and industry consultation such as a forum held with representatives from the shipbuilding industry, and the Canadian Association of Defence and Security Industries consultations on military procurement) provides the Government with a more comprehensive understanding of industrial capacity and capability. It also provides industry with the opportunity to provide input in the development of comprehensive and viable options for future procurement. In addition, PWGSC engaged and worked with industry through Canada’s Economic Action Plan, which provided $175 million to the Canadian Coast Guard to purchase 98 new boats and to repair and refit 40 existing large vessels. Several contracts have been awarded as a result of competitive processes, and work is underway in shipyards across Canada. The investment through Canada’s Economic Action Plan provided important stimulus to the economy, facilitated the creation of jobs and enabled advancing these Coast Guard projects from a planning timeline of a decade to implementation within two years. Status: Met all
Procurement Renewal (Modernization)	Ongoing	Acquisitions	Building on the new business model for the Acquisitions Program, PWGSC supported client departments maximizing their authorities when purchasing low dollar value items and goods and services provided through Standing Offers and Supply Arrangements. PWGSC also improved existing tools and advanced new projects to modernize and streamline procurement and to improve self-serve opportunities. Improvements included enhancements to the Standing Offer Index and the Spend Management system as well as receiving approval for the Common Business Number Hub to establish a single registration for suppliers wishing to do business with the Government of Canada. A new Buy and Sell web site is under development to provide a single gateway to both suppliers and client departments, beginning in fall 2010. There has also been ongoing work to streamline and automate the procurement process as well as work to rationalize e-services for clients. The challenges for this large undertaking will be project management and stewardship of resources. A baseline client satisfaction survey was completed in 2009. An action plan to respond was developed and is being implemented, including our commitment to establish robust service standards and measures. We recognize that achieving our goals in this area will require sustained focus and effort. Status: Met all
Real Property Modernization	Ongoing	Accommodation and Real Property Assets Management	PWGSC continued to modernize its real property business in tandem with rigorously delivering the Government of Canada’s Economic Action Plan by employing best-in-class management practice in all areas of our business. Investment strategies were developed to enhance our portfolio management, and our employee relationships were bolstered through a robust engagement initiative. Mechanisms to improve our service delivery capacity through third party delivery arrangements were explored as was the acquisition of industry standard real estate processes supported by a fully integrated real estate solution, known as the Real Property Business and Systems Transformation (RPBST) project. This integrated solution, which will replace 22 legacy systems, will reduce operational costs, improve business reporting, and result in better decision-making. The integrated real estate solution, to be known as NOVUS, will also be made available for use to other departments in order to help the modernization of their real property processes and systems on an optional basis. A Request for Proposals (RFP) to supply this requirement was launched in 2008 with a stronger than expected industry response. During the bid evaluation phase however, issues were identified that led to a decision to cancel the RFP and re-tender. A competitive RFP process is underway and a contract award is now expected by May 2011. Status: Mostly met
Greening of Government	Ongoing	Specialized Programs and Services	PWGSC worked closely with other government departments to develop a framework of greening government operations targets, performance measures, and accountabilities in the areas of greenhouse gas emissions reductions, green procurement, sustainable buildings, disposal of electronic waste, managed print, paper consumption and green meetings. Status: Met all
Parliamentary Precinct Project (Long Term Vision and Plan)	Ongoing	Accommodation and Real Property Assets Management	PWGSC continues to develop and implement projects under the Long Term Vision and Plan (LTVP) and has initiated and completed projects for the relocation of Parliamentarians, their staff and operational support services from Parliament Hill to off-site locations. This work included the completion of a food production facility, initiation of the construction of the Rideau Committee Rooms (funded through the Accelerated Infrastructure Program) and several fit-ups of and moves of Parliamentary offices at various locations. In addition, a contract was awarded to begin the rehabilitation of the Wellington building, which, when fully restored, will enable the East Block to be emptied and rehabilitated. PWGSC has also committed to working with stakeholders to strengthen the governance structure that oversees the implementation of the LTVP. Status: Met all
Information Technology Shared Services	Ongoing	Information Technology Infrastructure Services	PWGSC is committed to delivering a consistent set of government-wide information technology infrastructure products and services to enable government departments to deliver on their priorities. In partnership with several departments and agencies, PWGSC has developed and piloted several new products and services such as the collaboration services with Health Canada, the web-based records and documents management service with the Department of Justice, and the shared metropolitan area network services with DFAIT. PWGSC is leading a government-wide information technology (IT) transformation as part of the IT Shared Services (ITSS) initiative, including shared enterprise network, data centre consolidation, IT security, and managed desktop services. In leading the ITSS initiative, PWGSC engages client departments and agencies in the development of new technologies that contribute to service renewal and addres their operational needs. With a wide variety of technologies in use across the government of Canada, PWGSC is faced with the challenge of ensuring the ‘right fit’ between the client and the pilot projects that are undertaken. It is also faced with the challenge of ensuring that all our services continue to be relevant and cost effective. In an effort to mitigate and overcome these challenges, PWGSC works directly with client departments and agencies to gain a clear understanding of their needs and ensure a good fit with the products and services in existence or being piloted. PWGSC is also reviewing its IM/IT catalogue of products and services in an effort to make it more business oriented and user-friendly. Status: Met all
Pension Administration Transformation	Ongoing	Federal Pay and Pension Administration	In June 2007, PWGSC received approval for the Transformation of Pension Administration to replace outdated systems infrastructure and centralize the delivery of pension services within PWGSC in Shediac, New Brunswick. By leveraging the capabilities of the new technology, the project will enable the realization of cost efficiencies, introduce new modern web-based services and enhance the reliability of client services. The project is now halfway through its implementation phase and will be completed in 2011-2012, within 60 days of the planned completion date. In 2009-2010, the project completed the implementation of a suite of IT applications related to client services, notably the case management, workflow and workload management, and document imaging was fully integrated to the new pension solution. Design and development of the new core pension system components for contributor accounts have been completed and are undergoing thorough testing. As well, PWGSC completed the centralization of two services this fiscal year, bringing the total to eight. Only four services remain to be centralized. Status: Met all
Pay Administration Transformation	Ongoing	Federal Pay and Pension Administration	PWGSC’s Transformation of Pay Administration Initiative was launched in October 2009, after receiving approval to begin the preliminary phase of transformation including a new service delivery model across government. Through replacement of the system and modernization of the processes, we will improve efficiency and generate significant government-wide operational savings, notably through increased web self-service for managers and employees. In 2009-2010, PWGSC completed a Business Case, determined substantive costs and defined project activities. We conducted a Request for Information procurement process, completed the documentation for a Request for Proposals, firmed up business processes and a concept of operations, and began consultations with departments. The new service delivery model for pay administration is still being reviewed. Status: Mostly Met
Translation Renewal	Ongoing	Linguistic Management and Services	To renew its workforce, PWGSC’s Translation Bureau continues to offer practicums to university students, carry out post-secondary recruitment activities and operate its in-house learning program. However, recruitment of interpreters is a challenge as the number of graduates is low. To address the growing scarcity of qualified language resources in Canada, PWGSC put in place the Canadian Language Sector Enhancement Program following the announcement of the Federal Government of the Roadmap for Canada’s Linguistic Duality 2008-2013, which will provide support for the development of a skilled labour force and strengthen the capacity of the Canadian language sector. To manage retirements, the Bureau is also incorporating language technologies into its operating procedures to increase productivity and optimize operating costs. The Bureau will require long-term funding to continue providing linguistic services to Parliament and to recruit the highly skilled human resources needed to handle the workload and to meet the new operational requirements of this institution. Status: Met all
Industrial Security Program	Ongoing	Specialized Programs and Services	The Industrial Security Program supported PWGSC’s Accelerated Infrastructure Program (AIP) by processing Security Requirements Checklists, security clearing contractor organizations and provided security screening of their employees within agreed-upon processing times. We were able to expedite processing times by streamlining some processes. We also engaged our partners to identify solutions for a more efficient and effective process for government and the private sector, consulting them on our performance measures, service standards and business transformation plans. In supporting the AIP, the Industrial Security Program was able to accelerate some processes and will determine if any modifications can be used for future activities. Status: Met all

For ongoing priorities "Mostly Met" or "Met All" refers to the status of related activities that were planned for 2009-2010.

MANAGEMENT PRIORITIES	Type	Program Activity	Description and Performance Status
Workforce for the Future	Ongoing	Internal Services	As reflected in the updated PWGSC Integrated Human Resources Management Plan for 2009-2012, PWGSC remains focused on getting the fundamentals right for effective people management and supporting Public Service Renewal. The department has developed a people management model to help operationalise Treasury Board Secretariat’s People Management Drivers and has made significant progress in the areas of recruitment and development and have also been successful in employee retention. We have introduced a comprehensive set of change management tools and an associated learning strategy in support of both its existing change management framework and its commitment to building an effective change management capability. PWGSC senior management remains committed to maintaining a healthy, productive and safe workplace by addressing employee feedback from the Public Service Employee Survey. Status: Met all
System Renewal Support to Fundamentals Agenda	Ongoing	Internal Services	To strengthen PWGSC’s management fundamentals, PWGSC successfully met its commitments in a number of key areas: Strengthened budget management discipline; SIGMA-SAP system reporting; Internal Control implementation; Demonstration of effective financial management via Public Accounts “A” rating; and Development of a PWGSC Integrated Investment Plan. PWGSC’s strengthened budget management discipline was accomplished via enhanced monthly financial monitoring, a renewed budget management framework, and stronger accountabilities. The Finance Branch also continued to advance a new financial system within PWGSC and delivered critical statutory reporting for 2009-2010 within the prescribed Treasury Board and Receiver General quality and timelines. As part of the CFO Model, significant progress was made in the implementation of a system of internal control over financial reporting. The Department maintained an "A" rating on its Public Accounts, which reflects the soundness and rigour of PWGSC’s financial information processes. Furthermore, significant progress was made in the development of a Departmental Integrated Investment Plan and an Information Technology Investment Plan that are designed to improve the financial management of PWGSC’s procurement and capital funds. Overall, PWGSC received a green MAF rating for exercising strong leadership in the effectiveness of financial management and control. Status: Met all
Organizational Excellence	Ongoing	Internal Services	PWGSC is continuing to redesign key processes to consistently produce and deliver programs and services that meet or exceed client requirements, comply with legislative, regulatory and policy requirements, and respect established standards. To date, more than 40 projects were undertaken and results are being finalized. Benefits include the establishment of best practices, improved quality assurance and controls, and updated/consistent procedures. These benefits have contributed to improved client and supplier services. Status: Mostly met
Risk Management	Ongoing	Internal Services	While continuing to refine the existing tools, PWGSC has developed additional risk management tools and mechanisms to support departmental programs and priorities—including the AIP—to identify, monitor, report and manage risks. A proactive approach will place quality management at the front end of risk management and use a control risk assessment methodology. The Corporate Risk Profile is regularly updated to identify and assess key corporate-level internal risks and aid in developing departmental risk response strategies. PWGSC has launched the departmental operational risk profile to deal with, in part, the residual risks. Status: Met all

PWGSC’s nine program activities contribute to our strategic outcome. The results for this indicator were calculated based on the achievement of expected results for each Program Activity. For further details on how each Program Activity met its expected results, please see Section 2 of this report.

Strategic Outcome	Performance Indicator	Target	Achievement Date	Results
High-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions.	Percentage of programs and services that meet their expected results, including service levels and published standards.	95%	March 31, 2010	84.2%

Risk Analysis

PWGSC has tailored its risk management program to our strategic and operational context. Our risk management principles and practices guide us toward a risk-smart culture that uses risk analysis to inform business planning, decision-making and organizational processes.

The PWGSC Integrated Risk Management Policy was our cornerstone for establishing a formal departmental risk management framework and the direction for risk management at all levels in the organization. The Corporate, Branch, Regional and Operational Risk Profiles are seminal documents used for identifying and managing risks associated with the Department’s commitments and priorities. PWGSC developed and implemented standardized tools for assessing procurement risks; risk frameworks such as the ones established for the Accelerated Infrastructure Program and the environmental services; and training and a risk management guide to hone skills and further develop capacity in risk management. PWGSC also provided functional advice and guidance to assist in assessing risks in key departmental initiatives such as pension modernization.

Given fiscal constraints and strategic review, the continued application of the risk management program will assist PWGSC in realising greater efficiencies and cost savings as well as improving performance, enhancing transparency and leveraging opportunities.

Risks for PWGSC in 2009-2010 identified from the existing Corporate Risk Profile (CRP) and recent Operational Risk Profile (ORP) are as follows:

• A shortage of qualified human resources (due to high levels of retirees not being re-staffed, skills shortages in specific areas and difficulty in retaining existing staff) in areas key to PWGSC operations.
• Ability of IM/IT infrastructure to provide adequate information for decision making.

The Corporate Integrated Risk Management Framework is being revised to address the complex operating environment of our business. We are instituting specific policies and guidelines for assessing risk related to acquisitions and national projects for real property. We are also adopting best practices in risk management as developed by the International Standards Organization.

Expenditure Profile

Fluctuations in Main Estimates are the result of new and terminated funding for departmental initiatives. The net reduction for 2008-2009 can be linked to the transfer of funding to the Canada Revenue Agency for office accommodation (offset by additional vote-netted revenue authorities) and the net increase in 2009-2010 is attributable to the rehabilitation of aging engineering assets.

Under Budget 2009, and in support of Canada’s Economic Action Plan, PWGSC’s Accelerated Infrastructure Program (AIP) received investment funding of $432.5 million over two years, as well as $52.5 million to support the delivery of PWGSC’s AIP, and other government departments’ Economic Action plan initiatives. An amount of $237.3 million was allocated to 2009-2010 for AIP project Funding as well as $22.9 million for implementation costs. From this amount, $227.5 million was spent on the AIP Project along with $17.6 million on implementation costs. In total, this amounts to 9.2 percent of total actual departmental expenditures.

Planned Spending represents Main Estimates, and funds earmarked in the Fiscal Framework for initiatives approved after Main Estimates, plus Budget announcements. Planned Spending becomes Authorities once Treasury Board submissions and other transfers are approved.

The major variances between Authorities and Actuals (lapse) for all years are mainly due to delays caused by uncontrollable and unpredictable factors, such as market fluctuations, delays in the tendering process, changes in the plans and specifications, internal capacity issues- all having an impact on the delivery of repair and fit up projects in both of Real Property accommodation and capital projects. These delays resulted in funding being reallocated to future years. In 2008-2009, the department reacted to the 2008 economic crisis with self imposed restraints addressing uncertainties so as to remain within its authorities. These expenditure restraint measures generated efficiencies and savings.

There has been an increased analysis of our lapses in 2009-2010. Due to the department’s significant dependency on revenues, it maintains contingency funding in the event that revenues do not materialize. Similarly, the department establishes contingencies for significant projects in the event that risks materialize. These funds lapsed as the risks did not materialize. Forecasting accuracy remains a challenge, and will be addressed in a special review.

Good business management, including obtaining lower than forecast bids and successful lease negotiations also contributed to our lapse. Finally, the funding cycle for our capital vote is not aligned with the multi-year nature of its projects, and the department is trying to address this with the central agencies.

PWGSC Spending Trend

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Voted and Statutory (S) Items
2009-2010 (in millions of dollars)

Vote or Statutory Item	Vote or Statutory Wording	Total Main Estimates	Total Planned Spending*	Total Main Authorities**	Actual Spending
1	Operating expenditures	1,947.5	2,164.1	2,550.6	2,221.9
5	Capital expenditures	349.1	621.4	426.9	357.3
(S)	Minister of Public Works and Government Services – Salary and motor car allowance	0.1	0.1	0.1	0.1
(S)	Contributions to employee benefit plans	78.4	78.4	112.7	112.7
(S)	Real Property Services Revolving Fund	10.0	10.0	10.0	(18.0)
(S)	Real Property Disposition Revolving Fund	(5.2)	(5.2)	(9.8)	(5.0)
(S)	Optional Services Revolving Fund	—	—	—	(0.5)
(S)	Telecommunications and Informatics Common Services Revolving Fund	6.1	6.1	9.1	(5.8)
(S)	Consulting and Audit Canada Revolving Fund	(3.6)	(3.6)	(3.6)	—
(S)	Translation Bureau Revolving Fund	5.1	5.1	5.1	1.1
(S)	Defence Production Revolving Fund	—	—	—	—
(S)	Payment in lieu of taxes to municipalities and other taxing authorities	—	—	1.1	1.1
(S)	Refunds of amounts credited to revenue in previous years	—	—	2.1	2.1
(S)	Spending of proceeds from the disposal of surplus Crown assets	—	—	0.3	0.2
DEPARTMENTAL TOTAL		2,387.5	2,876.4	3,104.6	2,667.2

Amounts in parentheses represent a surplus (revenues exceed expenditures)

* Note 1: Total Planned Spending is the amount included in the department’s 2009-2010 Report on Plans and Priorities and indicates amounts planned at the beginning of the year.

** Note 2: Total Authorities include the 2009-2010 Main Estimates plus Supplementary Estimates, transfers from Treasury Board Votes (15 – Compensation Adjustments; 25 – Operating Budget Carry Forward; 30 – Paylist Requirements; 35 – Budget Implementation Initiatives)

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