Archived - Policy on Investment Planning - Assets and Acquired Services

3.1 Departmental investment planning is the function of allocating and reallocating resources to new and existing assets and acquired services that are essential to program delivery. Departmental investment planning is a key element in achieving value for money and sound stewardship.

Date modified: 2007-06-26

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Note to reader

On June 7, 2007, Treasury Board Ministers approved the Policy on Investment Planning. This policy replaces the Policy on Long-term Capital Plans for departments and agencies listed in Section 2 of the Financial Administration Act. This policy is a significant change in how government carries out investment planning. As a result, Treasury Board Secretariat is adopting a four-year phased implementation approach that will begin with a group of departments that have agreed to participate in an 18-month pilot. Following this pilot, groups of departments will be brought on board so that, by April 1, 2012, departments and agencies will have the systems and processes in place to meet the policy requirements.

1. Effective date

1.1 This policy is effective as of June 7, 2007.

1.2 It replaces the Treasury Board Policy on Long-term Capital Plans.

1.3 The transition period for this policy will begin April 1, 2007 and end April 1, 2012.

2. Application

2.1 This policy applies to all departments as defined in section 2 of the Financial Administration Act, unless specific acts or regulations override it.

3. Context

3.2 Effective investment planning ensures resources are allocated in a manner that clearly supports program outcomes and government priorities, and is characterized as being:

Essential and responsive to government priorities and effective program delivery;
Affordable, productive and financially sustainable;
Reflective of an appropriate balance of risk, benefits and return between the Crown and third parties;
Safe, secure and compliant with relevant laws, regulations and policies, and codes of conduct;
Protective of Canadian heritage and the environment;
Reflective of departmental, portfolio, horizontal and government-wide perspective while taking into account strategic government-wide initiatives, as appropriate.

3.3 Investments in assets and acquired services have significant strategic, public policy, operational, risk and financial implications. Investment planning is founded in an effective regime for planning, decision-making and governance. It underpins a department's ability to manage investments of highest priority and greatest risk to the government.

3.4 Deputy heads are accountable to their minister and to the Treasury Board for the effective management of the investment planning function within their departments. Effective management includes developing a departmental investment plan, exercising oversight in the implementation of the investment decisions and ensuring appropriate, ongoing measurement of investment performance.

3.5 This policy is issued pursuant to section 7 of the Financial Administration Act.

3.6 This policy reflects the principles set out in the Policy Framework for the Management of Assets and Acquired Services and is implemented in conjunction with related Treasury Board policies governing assets and services. These include the Policy on the Management of Projects, the Policy on Managing Procurement, the Policy on Management of Real Property, and the Policy on Management of Materiel.

3.7 Treasury Board has delegated to the Secretary of the Treasury Board of Canada the authority to issue such operational directives, standards and guidelines as necessary to support this policy except with respect to the powers or functions of the President of the Treasury Board or the Secretary of the Treasury Board.

4. Definitions

4.1 Acquired services (services acquis): Services obtained through formal arrangements, such as contracts, memorandum of understanding and letters of agreement, to support internal or external clients or stakeholders in achieving specific outcomes.

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4.2 Assets (actifs): Are tangible and intangible items of value that have a future life beyond one year, whether they are Crown-owned, -leased or accessed through other arrangements.

4.3 Investment (investissement): Is the use of resources with the expectation of a future return, such as an increase in output, income or assets, or the acquisition of knowledge, or capacity.

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Please refer to TBS' Guide to Investment Planning – Assets and Acquires Services for examples of each of the above concepts.

5. Policy statement

5.1 Objective

The objective of this policy is to contribute to the achievement of value for money and sound stewardship in government program delivery through effective investment planning. Effective investment planning should ensure a diligent and rational manner of resource allocation for both existing and new assets, and for acquired services within existing departmental reference levels.

5.2 Expected results

Investment planning supports departmental, portfolio, horizontal and government-wide priorities, considers areas of highest risk, serves program outcomes, and supports sustainable development and broader social and economic objectives.

6. Policy requirements

6.1 Deputy head

Deputy heads are responsible for ensuring that:

6.1.1 Investment planning, in terms of governance, systems and people, is in place and maintained.

6.1.2 Departmental investment planning:

Is influenced by and supports departmental strategic planning;
Incorporates a departmental, portfolio, horizontal and government-wide perspective and takes into account strategic government-wide initiatives;
Is aligned with outcomes as set out in the department's Management Resources and Results Structure and considers areas of greatest risk in achieving departmental objectives;
Is influenced by an assessment of the performance, including cost, and risks of assets, services arrangements and projects;
Considers alternative and innovative options for meeting assets and services requirements, including internal and external delivery models and a range of instruments;
Is within existing reference levels; and
Takes into account the whole-of-life cost of stewardship based on the life cycle of assets and services.

6.1.3 Information systems are in place that support planning, budgeting and accounting for resource allocation and which enable performance measurement and reporting related to the management of departmental investments.

6.1.4 The department's investment plan is submitted every three years to Treasury Board Ministers for approval and addresses those elements described in the Appendix.

6.1.5 Treasury Board Secretariat (TBS) is consulted in determining the appropriate investments to include in the plan.

6.1.6 A departmental investment plan is developed within existing reference levels and complies with the Treasury Board Standard for Organizational Project Management Capacity; and the Standard for Project Complexity and Risk.

6.1.7 TBS is advised, in a timely manner, of any significant deviations from approved investment plans. If requested by TBS, the departmental plan must be revised, updated and resubmitted for Treasury Board Ministers' approval.

6.1.8 Key federal stakeholders are informed of the department's planned investments including, but not limited to, central agencies, relevant socio-economic departments and common service providers.

6.2 Monitoring and reporting requirements

6.2.1 Deputy heads are responsible for monitoring and reporting on investment planning within their department. More specifically, deputy heads are responsible for ensuring that:

Performance relative to the obligations under this policy is measured and documented.
The effectiveness of the investment-planning regime is reviewed on an ongoing basis, consistent with the department's risk-based audit planning.
The implementation of departmental investment plans, approvals and resourcing decisions is monitored.
Investment planning is appropriately reflected in the Reports on Plans and Priorities and Departmental Performance Reports.

6.2.2 The Treasury Board Secretariat is responsible for:

Assessing each department's performance in the management of its investment planning. TBS does this through ongoing dialogue and committee work with departments, as well as by reviewing departmental investment plans and submissions. The Secretariat also takes note of audits and reviews conducted by departments or the Auditor General of Canada.
Reviewing the effectiveness of the policy at the five-year mark of its implementation and ensuring that an evaluation is conducted when supported by a risk-based analysis.

7. Consequences

7.1 Based on the assessment of departmental planning performance, Treasury Board Secretariat will make appropriate recommendations to the deputy head of a department or to Treasury Board Ministers that could include such measures as imposing, changing, increasing or withholding departmental expenditure authority.

8. References

Legislation

Financial Administration Act

Further information

Treasury Board Secretariat will maintain up-to-date information on best practices on its website. Additional background information supporting the implementation of the policy will also be available on the Treasury Board Secretariat's website.

9. Enquiries

Please direct enquiries about this policy to your department's headquarters. For interpretation of this policy, departmental headquarters should contact:

Investment, Project Management and Procurement Policy Division
Treasury Board Secretariat
300 Laurier Ave. West
Ottawa ON K1A 0R5
E-mail: cmp@tbs-sct.gc.ca
Telephone: 613-957-2487
Fax: 613-957-2405

Appendix – Content of Investment Plans

The departmental investment plan is a high-level strategic document that defines the direction, capacity and commitments of a department with respect to its investment in assets and acquired services. The plan must clearly set out departmental priorities and strategies for the upcoming five-year period, and outline a three-year investment function that meets the needs of the department within available resources.

The investment plan must demonstrate that a strong regime for planning, decision-making and governance exists, which is the basis for Treasury Board approval of a department's expenditure authority. Departments need to demonstrate investment planning capacity and the risk and complexity of investment-based projects within the investment period.

A good investment plan must, at a minimum, cover the following representative categories of information.

Introduction

A series of statements addressing the purpose, scope and objectives of planned investments.

Departmental context

An explanation of the department's mandate, including relevant historical data, and the contribution of investments and acquired services to program outcomes.
High-level profile of the existing portfolios of assets and acquired services in support of program activity, including asset value and an assessment of responsiveness to requirements (i.e., issues, risks and opportunities).

Direction, Capacity and Commitment

An assessment of previously planned investments against intended results, including an overview of lessons learned, challenges to and opportunities for improving elements of the investment planning framework and organizational planning and resourcing capacity.
Demonstration of the planning framework, including: governance structures and processes for planning, approving and resourcing investments; priority determination criteria and process; integration of information systems; and a description of controls and monitoring regime.
Description of the planning cycle, including linkage to the department's strategic planning.
The presentation of key departmental priorities and strategies over a five-year investment horizon demonstrating consideration of portfolio, horizontal and government-wide objectives and priorities, as well as a clear link to departmental program activities and outcomes.
An explanation of the department's risk management approach to investment planning, including the identification of areas of greatest risk to program integrity, risk mitigation strategies and residual risk.

Descriptive information is provided on planned investments with elaboration for those investments in assets or acquired services deemed to have significant strategic, public policy, operational, risk and financial implications for the department. Each planned investment, at a minimum, outlines: the total estimated cost of the investment, investment or procurement strategies, and opportunities for achieving broader government objectives. Project investments need to be consistent with the Standard for Organizational Project Management Capacity and the Standard for Project Complexity and Risk.

Information on the impacts of the proposed investment function is included and should detail:

The existing portfolios of assets and services, addressing performance improvement, as well as gaps, trade-offs and residual risks;
The intended, broader short-, middle- and long-term ability of the department to achieve outputs and outcomes; and
External clients and stakeholders, other government departments, and the federal government as a whole.

An overview of relevant financial information that covers the department's planned allocation and reallocation of existing reference levels to refresh and sustain existing assets and services is required. The overview is also required to fund new investments. The financial information is to be presented from the most appropriate perspectives including, but not limited to, by investment class and by program activity.