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Section II provides detailed information on how each of the Department of Finance Canada's 10 program activities support 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 Presence |
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.
Initiatives include developing tax legislation and negotiating tax treaties, federal-provincial tax collection agreements, federal-Aboriginal tax administration agreements, and tax policy research and evaluation.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
31,742 |
31,537 |
31,784 |
2006–07 |
2007–08 |
2008–09 |
---|---|---|
269 |
275 |
278 |
The work of the Branch contributes to three of the Department's priorities:
1. Sound fiscal management;
2. Sustainable economic growth; and
3. Sound social policy framework.
The tax system contributes to these priorities by raising sufficient revenues to pay for public services, including social programs (for example, universal health care and public safety and security) and strategic investments in areas that promote a more competitive and productive Canadian economy (for example, 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 the physical fitness of children, encouraging research and development, and helping protect the environment.
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.
Recent tax policy initiatives that contribute to achieving the Department's priorities include:
Looking ahead, the Department will continue to advise the government over the 2006–09 planning period on potential measures to further improve the competitiveness, efficiency, and fairness of the tax system in a fiscally sustainable manner, including cutting the GST by an additional percentage point and establishing a meaningful overall marginal effective tax rate advantage over the U.S. Among the other potential policy measures that will be assessed during the planning period are:
The Tax Policy Branch plans to attain the expected result through the following ongoing activities and key commitments.
The Tax Policy Branch plans to attain the expected result through the following ongoing activities and key commitments.
The Tax Policy Branch plans to attain 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 three expected results under this program activity.
Expected Results/
|
1. Competitive, efficient, and fair personal, corporate, sales, and excise tax systems |
2. Improved coordination of the federal tax system with those of provinces, Aboriginal governments, and other countries |
3. High-quality research and evaluation |
Performance Indicators |
1. Proposals to improve the competitiveness, efficiency, and fairness of the personal, corporate, sales, and excise tax systems |
1. Active negotiation of additional tax administration agreements with provincial and Aboriginal governments |
1. Number and effect of research studies and evaluation reports |
2. The amount of tax revenue raised |
2. Effective network of tax treaties with other countries 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 evaluation, and tax expenditure reports |
Federal-provincial agreements, federal-provincial meetings, federal-Aboriginal agreements, and federal-Aboriginal negotiations |
Working papers, models developed, research papers |
Frequency |
Annual |
Annual |
Annual |
Target |
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 |
Increased number of tax agreements signed |
Two published reports per year |
Target Date |
As required |
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.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
14,973 |
14,878 |
14,996 |
2006–07 |
2007–08 |
2008–09 |
---|---|---|
122 |
125 |
126 |
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. In Budget 2006 the government introduced a new budget framework in order to improve fiscal transparency and financial management. This new framework includes:
The government's new framework will help ensure that fiscal planning is transparent and supports long-term fiscal sustainability.
The Department will undertake the following ongoing activities and key commitments in support of the government's expected result.
Effective economic policies that will enable the Canadian economy to perform well despite external economic shocks require an accurate assessment of current and future economic conditions both in Canada and abroad.
A focus for 2006–07 will be to monitor and assess the implications for future Canadian growth prospects of productivity growth, labour adjustment, and the challenges presented by an aging population.
An effective assessment of these issues will enable the government to appreciate potential fiscal constraints arising from future economic conditions and to develop effective policies to sustain long-term growth.
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. Given the constantly changing domestic and international economic environment, there is a need to continuously monitor and forecast the implications of these developments.
The Branch plans to attain the expected result through the following ongoing activity and key commitment.
The current economic environment is one characterized by issues that are both complex and far reaching. In-depth economic research is essential to understand and evaluate the interactions and effects of these issues.
The Branch plans to attain the expected result through the following ongoing activity and key commitments.
International cooperation is necessary to understand and provide an accurate assessment of the economic and fiscal conditions around the world. By participating in international meetings, Canada can coordinate economic policies, when and where it is appropriate, to foster international economic growth and, given the openness of the Canadian economy, improve the growth potential of Canada.
The government benefits from understanding past, ongoing, or proposed reforms in other countries and their implications on 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.
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 results under this program activity.
Expected Results/Performance Measurement |
1. Transparent fiscal planning and sustainable fiscal policy |
2. Effective monitoring and forecasting of economic performance3. Effective briefing and advice on a wide selection of economic questions |
4. Understand and contribute to international economic policies and reforms |
Performance Indicators |
Federal debt as a share of the gross domestic product (GDP) |
Canada's GDP growth relative to G6 (G7 less Canada) |
Canada's GDP growth relative to G6 (G7 less Canada) |
Data Sources |
Annual Financial Report |
IMF World Economic Outlook |
IMF World Economic Outlook |
Frequency |
Annual |
Semi-annual |
Semi-annual |
Target |
Reduce the federal debt-to-GDP ratio to 25 per cent by 2013–14 |
Above-average annual growth rate |
Above-average annual growth rate |
Target Date |
Ongoing |
Ongoing |
Ongoing |
|
Under this program activity, the Financial Sector Policy Branch is responsible for providing analysis on 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, credit unions, and other financial institutions) and federally regulated defined benefit pension plans. The Branch also manages the government's borrowing program and its cash and official international reserves and provides support to the Minister regarding Crown corporation borrowing.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
21,105 |
19,261 |
17,297 |
2006–07 |
2007–08 |
2008–09 |
---|---|---|
146 |
144 |
131 |
Debt service is the largest spending program of the federal government. The prudent and effective management of the government's debt is an important element of the Department's strategy for sound fiscal management. For more information on debt management, see the following link: http://www.fin.gc.ca/toce/2005/dmr05_e.html. The focus of Financial Sector Policy Branch activity for 2006–07 will be on continuing to review and evaluate the effectiveness of debt management and treasury management frameworks and programs while pursuing improvements to the borrowing framework for major government-backed entities.
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.
For information on the initiatives under this result, see "Program Activity 7, Public Debt."
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.
For more information on the initiatives under this result, see "Program Activity 7, Public Debt."
In conjunction with the Bank of Canada, the Department manages Canada's official international reserves. This is a portfolio of diversified foreign currency assets, which is maintained to provide foreign currency liquidity for the Government of Canada and to provide the funds if required to help promote orderly conditions for the Canadian dollar in foreign exchange markets. See http://www.fin.gc.ca/toce/2005/oir05_e.html.
The Branch plans to attain the expected result through the following ongoing activity.
Operational risks associated with reserves investment are addressed through the maintenance of effective governance and audit regimes and through business continuity planning.
Under the Financial Administration Act, the Minister is responsible for approving the borrowing done 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. The study is available through the following link: http://www.fin.gc.ca/toce/2005/MFGBE-e.html.
The Branch plans to attain the expected result through the following ongoing activity and key commitment.
The Department will work with the borrowers to ensure that improvements to the borrowing framework are designed and implemented in such a manner as to achieve operational efficiencies while minimizing exposure to financial and operational risks for the Government of Canada and the borrower.
The Department of Finance Canada buys coinage from the Royal Canadian Mint and resells it to financial institutions. The overriding objective is to ensure the supply of circulating coinage meets the needs of the economy.
For information on the initiatives under this result, see "Program Activity 8, Domestic Coinage."
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 2006–07, the focus will be on completing the 2006 review of the financial institutions statutes, implementing regulations associated with the new corporate governance legislation for financial institutions, preparing for a planned Financial Sector Assessment Program (FSAP) update by the IMF as a follow up to the assessment conducted in 1999, and contributing to an enhanced system of securities regulations in Canada.
The Department advises 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 activity and key commitments.
Key commitments generally include legislative initiatives that are subject to consultations, (including intergovernmental discussion), ministerial and Cabinet decision making, as well as parliamentary approval. Priorities and plans, including timelines, are adjusted accordingly.
A properly designed private pension system can contribute to the security of Canadian workers and retirees and support increases in living standards. The focus in 2006–07 will be on strengthening the framework for defined benefit pension plans and providing advice related to the Canada Pension Plan Investment Board (CPPIB).
Following up on the public consultation process that commenced in 2005 and commitments in the 2006 budget, the Department will move forward proposals to strengthen the legislative and regulatory framework for federally registered defined benefit pension plans in order to improve the security of pension benefits and ensure the viability of defined benefit pension plans.
The Branch plans to attain the expected result through the following ongoing activity and key commitment.
The CPPIB invests CPP funds on behalf of more than 16 million contributors and beneficiaries. The success of the CPPIB in achieving its investment objectives derives primarily from the soundness of its governance and the quality of its board. The Minister of Finance is responsible for the CPPIB legislative framework and for coordinating, on behalf of federal and provincial governments, the appointment of individuals to the Board.
The Branch plans to attain the expected result through the following ongoing activity and key commitment.
The Chief Actuary, within the Office of the Superintendent of Financial Institutions Canada, has the statutory responsibility for ensuring the actuarial soundness of the CPP.
The Department is responsible for issues related to AML and ATF. The Department's leading role in the global fight against money laundering and terrorist financing contributes to public safety in Canada and worldwide. In 2006–07, the focus will be on enhancing Canada's AML and ATF regime, undergoing a mutual evaluation, and presiding over the FATF.
The goal of Canada's AML and ATF regime is to combat money laundering and terrorist financing by conforming to international standards and providing appropriate tools to law enforcement while respecting the privacy of Canadians.
The Branch plans to attain the expected result through the following ongoing activities and key commitments.
Key commitments generally include legislative initiatives that are subject to consultations (including intergovernmental discussion), ministerial and Cabinet decision making, as well as parliamentary approval. Priorities and plans, including timelines, are adjusted accordingly on an ongoing basis.
Canada will hold the presidency of the FATF, the key international body
established to address terrorist financing and money laundering, from
July 2006
to June 2007. As president of the FATF, Canada will set out the work program for
the FATF for 2006–07, chair FATF meetings, host a plenary meeting in October
2006 in Vancouver, and represent the FATF at a number of other international
meetings, including meetings of FATF-style regional bodies.
Presiding over the FATF will demonstrate internationally Canada's commitment to remain at the forefront of the global fight against terrorist financing and money laundering.
The Branch plans to provide effective support for Canada's presidency of the FATF through the following ongoing activity and key commitment.
International developments and pressures could force a realignment of FATF priorities, which could create operational challenges and alter planning assumptions for the Canadian presidency.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the 10 expected results under this program activity.
Expected
|
1. Stable low-cost financing for the Government of Canada |
2. A well-functioning market in Government of Canada securities |
3. Management of Canada's official international reserves |
4. Improved framework for major Crown-backed entities |
5. A supply of coinage at a reasonable cost |
Performance Indicators |
Measures of operational performance (e.g. interest costs, fixed-floating shares of debt, average term to maturity) |
Measures of market performance (e.g. turnover, trading spreads) |
Measures of operational performance (e.g. investment returns, risk exposures) |
Cost-effective borrowing activities and sound investment practices |
Regular audit of payments to the Mint for domestic coinage supply and distribution |
Data Sources |
Fiscal Monitor; Debt Management Report |
Debt Management Report |
Annual Report on the Management of Canada's Official International Reserves |
Annual Reports, Corporate Plans, quarterly reporting |
Public Accounts |
Frequency |
Monthly and Annual |
Annual |
Annual |
Quarterly and Annual |
As required |
Target |
Stable, low-cost financing |
Liquid markets for Government of Canada securities |
Portfolio objectives attained |
Minimize risk-adjusted borrowing costs and ensure prudent and effective treasury management |
Efficient coinage system |
Target Date |
Ongoing |
Ongoing |
Ongoing |
Ongoing |
Ongoing |
|
Expected Results/
|
6. A regulatory framework that promotes the soundness, efficiency, and competitive-ness of Canada's financial sector |
7. A sound legislative and regulatory framework for federally regulated defined benefit pension plans |
8. Effective framework for investment of CPP funds |
9. A world-class AML and ATF framework |
10. Effective support for Canada's presidency of the FATF |
Performance Indicators |
Policy, legislative, or regulatory initiatives |
Policy, legislative, or regulatory initiatives |
The CPPIB investment performance |
Policy, legislative, or regulatory initiatives |
Support for Canada's FATF presidency |
Data Sources |
Legislation, regulations, and publications |
Legislation or regulations |
CPPIB reports |
Legislation, regulations, FATF mutual evaluation report |
Press releases or other communications for year of Canada's presidency |
Frequency |
Legislative and regulatory amendments, as needed |
Legislative and regulatory amendments, as needed |
Quarterly |
Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and regulations, as needed Mutual evaluation roughly every five years |
As required |
|
Under this program activity, the Economic Development and Corporate Finance Branch is responsible for the following:
To accomplish these tasks, the Branch is organized into the Microeconomic Policy Analysis Division and the Sectoral Policy Analysis Division.
This program activity involves providing policy advice and analysis in the areas of knowledge-based economy, defence, transportation, public infrastructure, environment, energy and resources, agriculture, fisheries, privatization, and Crown corporations.
At times, issues or files that do not fall directly under other Branch portfolios are dealt with under this program activity. Current examples include the New Deal for Cities and Communities and the Smart Regulation Initiative.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
8,006 |
7,953 |
8,016 |
2006–07 |
2007–08 |
2008–09 |
---|---|---|
70 |
72 |
72 |
The Branch plans to attain the expected result through the following ongoing activities.
The Branch plans to attain the expected result through the following ongoing activity and key commitment.
Working in cooperation with central agencies and key line departments, the Branch will achieve this result through the following ongoing activities and key commitments.
Outputs will include policy analysis and recommendations for consideration by the Minister before Cabinet committees and subcommittees and advice to the Minister to assist the preparation of the budget and fall update.
The Branch will continue to promote awareness throughout the Department of the need to undertake strategic environmental assessments in accordance with the 2004 Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals.
The Branch will achieve this result through the following key commitments.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the four expected results under this program activity.
Expected Results/Performance Measurement |
1. Thorough assessment of operating and capital funding related to economic development and policy proposals |
2. Sound advice to the Minister on economic proposals |
3. Enhanced productivity and economic growth through other governmental initiatives |
4. Improved awareness of the requirements and departmental process for conducting strategic environmental assessments |
Performance Indicators |
Measures of sector-specific cost-effectiveness (e.g. greenhouse gas reductions, profitability of the agriculture sector) |
Implementation of microeconomic policy directions in the government's economic agenda |
Fiscally responsible plans to implement the initiatives listed above |
The number of strategic environmental assessments conducted by the Department will be tracked and monitored |
Data Sources |
Various |
Budget and Economic Update |
Budget and Economic Update |
Departmental Inventory |
Frequency |
Annual |
Annual |
Annual |
Annual |
Target |
Related to each sector |
Announcement of measures that advance productivity and economic growth |
Announcement of measures that advance productivity and economic growth |
Maintain awareness of the departmental strategic environmental assessment process |
Target Date |
Budgets and economic updates in |
Budgets and economic updates in2006–07, |
Ongoing, annual activities |
Ongoing, annual activities |
|
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.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
17,229 |
12,222 |
12,319 |
2006–07 |
2007–08 |
2008–09 |
---|---|---|
115 |
102 |
103 |
The focus for the Branch for 2006–07 will be on the following:
Equalization and TFF are closely related programs, with the former providing funding to certain provinces and the latter providing funding to the three territories.
Since 1957–58, Equalization has been Canada's most important program for reducing fiscal disparities among provincial governments. Equalization payments enable provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces at reasonably comparable levels of taxation. In 2005–06, $10.9 billion was provided to recipient provinces and in 2006–07, more than $11.5 billion will be provided.
TFF is the main transfer program from the Government of Canada to the three territorial governments. Although territorial governments have the authority to raise revenues by taxation, rentals, and the sale of goods and services, a significant portion of their financial resources comes from the federal government through TFF. In 2005–06, $2 billion was provided to territories and in 2006–07 $2.07 billion will be provided.
Both Equalization and TFF are typically renewed every five years to ensure the integrity of the formulas upon which payments are based. Data sources and methodologies are reviewed and improvements made where necessary. The most recent renewal for Equalization, for the period from 2004–05 to 2008–09, took place in May 2004. The last renewal for TFF, for the period from 1999–2000 to 2003–04, was in October 1998.
Following these renewals, discussions between the federal, provincial, and territorial governments in 2004 led to the October 2004 announcement by the Government of Canada of a new framework for Equalization and TFF.
An important element of the October 2004 announcement was the establishment of an independent Expert Panel in March 2005 to review Equalization and TFF. The Panel's mandate was to provide advice on how the legislated levels of Equalization and TFF should be allocated annually among provinces and territories. As part of its review, the Panel was, among other things, to:
The Expert Panel provided a report to the Minister in June 2006. The report is available on the Panel's website at http://www.eqtff-pfft.ca/english/index.asp. The Branch plans to attain the expected result through the following ongoing activities and key commitments.
The government made a commitment in the 2006 budget to determine the most appropriate arrangements for long-term funding commitments for post-secondary education and training.
The Federal-Provincial Relations and Social Policy Branch is responsible forthe provision of analysis and advice to the Minister of Finance 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 commitment.
The Department plans to apply the following performance measurement approach in monitoring and measuring performance against the three expected results under this program activity.
Expected Results/
|
1. Implementation of new formula for Equalization and TFF |
2. Determine the most appropriate arrangements for post-secondary education and training |
3. Effective implementation of government social policy priorities |
Performance Indicators |
Research, analysis, and advice with respect to Equalization and TFF Bring forward proposal on renewed programs |
Bring forward proposal on renewed arrangements |
Timely implementation of programs related to the government's social policy priorities |
Data Sources |
Various |
Various |
Main and Supplementary Estimates for other departments |
Frequency |
Ongoing |
Ongoing |
Annual |
Target |
Timely and accurate research, analysis, and advice |
Timely decisions with respect to, and implementation of, the commitment to determine funding in the areas of post-secondary education and training |
Timely rollout of initiatives and related funding of government social policy priorities |
Target Date |
Ongoing Proposals for renewal intended to be brought forward by the fall of 2006 |
Proposals for renewal intended to be brought forward by fall of 2006 |
Ongoing |
|
Under this program activity, the International Trade and Finance Branch:
2006–07 |
2007–08 |
2008–09 |
---|---|---|
15,997 |
15,900 |
16,025 |
2006–07 |
2007–08 |
2008–09 |
---|---|---|
123 |
126 |
128 |
As a highly open economy in an increasingly globalized marketplace, Canada's economic performance will continue to improve through more open trade and investment flows and high standard multilateral, regional, and bilateral trade and investment rules and agreements. Securing access for Canadian exports and investors to key markets will enhance the competitiveness of domestic industries and expand commercial opportunities for them.
The Branch will work to improve Canada's overall economic performance through a stronger international trading system and open markets to enhance competitiveness of domestic industries and expand access for Canadian exports and investment in major foreign markets.
The Branch plans to attain the expected result through the following ongoing activities 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. Canada also has an interest in greater prosperity and economic and social progress in developing economies.
The Branch plans to attain the expected result through the following ongoing activities and key commitments.
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 provide payments consistent with the Department's commitments.
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 three expected results under this program activity.
Expected Results/
|
1. Stronger international trading system and more open markets |
2. Policy positions and proposals that improve prospects for global economic and financial stability and better financial governance |
3. Effective international initiatives to strengthen developing economies |
Performance Indicators |
Progress will be measured through the results of various regional, multilateral, and bilateral trade and investment negotiations and initiatives |
Policies adopted at the IFIs and promoted by the Finance Ministers' forums |
Progress will be measured through the results of various bilateral and multilateral negotiations and initiatives |
Data Sources |
Policies and communiqués in international initiatives and negotiations |
Communiqués and reports of Finance Ministers' forums and IFIs |
Policies and communiqués in international initiatives and negotiations |
Frequency |
Ongoing |
Periodic |
Ongoing |
Target |
International meetings and negotiations |
Multiple, depending on forum and issue |
International meetings and negotiations |
Target Date |
Ongoing |
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.
In addition, the Canada Investment and Savings Agency, a special operating agency of the Department, seeks to deliver a vibrant, creative, and cost-effective retail debt program (RDP) that provides value to Canadians, contributes to a diversified investor base, and ensures Canadians are aware of and have easy access to Government of Canada securities.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
34,395,000 |
34,760,000 |
34,585,000 |
2006–07 |
2007–08 |
2008–09 |
---|---|---|
57 |
57 |
57 |
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 2006–07 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 activities and key commitments.
Changes to the government's fiscal needs pose strategic and operational challenges for debt and cash management, which are carried out through the maintenance of diversified, flexible borrowing programs. Operational risks are addressed through business continuity planning.
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 initiatives.
Failure to maintain a well-functioning market can affect both the government and market participants. Risks are managed through the maintenance of strict auction participation rules, flexibility to adjust issuance, and active market surveillance.
The Canada Investment and Savings Agency plans to attain 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 three 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 |
3. A cost-effective RDP |
Performance Indicators |
Measures of operational performance (e.g. interest costs, fixed-floating shares of debt, average term to maturity) |
Measures of market performance (e.g. turnover, trading spreads) |
RDP budget of $105,045K |
Data Sources |
Fiscal Monitor, Debt Management Report |
Debt Management Report |
RDP Expenditures |
Frequency |
Monthly and annual |
Annual |
Annual |
Target |
Stable low-cost financing |
Liquid markets for Government of Canada Securities |
Manage the RDP within the budget of $105,045K |
Target Date |
Ongoing |
Ongoing |
March 31, 2007 |
|
Under this program activity, the Financial Sector Policy Branch is responsible for the payment of the production and distribution costs for domestic circulating coinage.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
83,100 |
80,700 |
49,000 |
The Department of Finance Canada buys coinage from the Royal Canadian Mint and resells it to financial institutions. The overriding objective is to ensure that the supply of circulating coinage meets the needs of the economy.
The Branch will work to achieve the expected result through the following ongoing activity and key commitment.
Market prices of metals used in coinage production are subject to considerable variation. A new agreement with the Mint will transfer most of the risk involved in coinage production to the Mint.
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/
|
1. A supply of coinage at a reasonable cost |
Performance Indicators |
Regular audit of payments to the Mint for domestic coinage supply and distribution |
Data Sources |
Public accounts |
Frequency |
As required |
Target |
Efficient coinage system |
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.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
38,631,828 |
40,095,000 |
41,940,000 |
Payments made under the various transfer programs are an important source of revenue for provincial and territorial governments. In 2006–07, an estimated $38.8 billion in cash payments will be provided to the provinces and territories.
Transfer payments take the form of either cash transfers or tax transfers. Cash transfers are provided as either cash payments to provincial or territorial finance departments and treasuries or payments to trust funds on behalf of provinces and territories. As well, the value of the tax transfers provided to provinces and territories in lieu of cash payments in the 1960s and 1970s is measured annually since these transfers affect the allocation of cash transfers. Acts and regulations govern the programs, and the Office of the Auditor General of Canada audits the payments each year.
The Department administers the following programs: the Equalization program and the TFF, the CHT, the CST, Alternative Payments for Standing Programs, the Youth Allowances Recovery program, and statutory subsidies. In addition, prior-year payments or recoveries for the former Canada Health and Social Transfer (CHST) and the former Health Reform Transfer continue to be calculated. The February 2005 Arrangement between the Government of Canada and the Government of Newfoundland and Labrador on Offshore Revenues and the February 2005 Arrangement between the Government of Canada and the Government of Nova Scotia on Offshore Revenues are administered by the Department, while Natural Resources Canada continues to administer Offset Payments to Newfoundland and Labrador under the Canada-Newfoundland Atlantic Accord Implementation Act.
The Branch plans to attain 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 result under this program activity.
Expected Result/Performance Measurement |
1. Financial support for Canadian provinces and territories to assist them in providing public services, universally accessible health care services, post-secondary education, and social assistance |
Performance Indicators |
Timely and accurate administration of transfer payments |
Data Sources |
Public Accounts of Canada |
Frequency |
Annual |
Target |
Payments must be made according to levels and formulas set out in legislation |
Target Date |
Fiscal year-end |
|
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 IMF, and the EBRD.
2006–07 |
2007–08 |
2008–09 |
---|---|---|
733,340 |
417,005 |
511,967 |
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 provide payments consistent with the Department's commitments.
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 result under this program activity.
Expected Results/Performance Measurement |
1. Payments to international organizations and Canadian creditors consistent with the Department's commitments |
Performance Indicators |
Timely payments |
Data Sources |
Department's financial reporting system |
Frequency |
Periodic payments |
Target |
Payments made according to a predetermined schedule or within 30 days of the invoice being received |
Target Date |
Ongoing |
|