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Canada is on the best economic and fiscal footing of any G7 nation, with the lowest debt burden and the highest employment rate in more than 30 years. To maintain our position of strength, we must respond to a complex and fast-changing world. We not only have to do things right; we must also do the right things. We must make sure we have the political will and the comprehensive programs to improve government effectiveness. In Budget 2006, we made reductions in every way the federal government taxes Canadians. We are absolutely committed to balanced budgets, debt reduction, controlled spending, and reducing the regulatory burden on business. |
Canada's economy has been performing well in recent years, but we still face many challenges. To remain at the economic forefront, we introduced a long-term economic plan, Advantage Canada, that will shape Canada's future and improve the quality of life for families, students, workers, and seniors.
Advantage Canada recognizes the government's obligation to manage Canadians' hard-earned tax dollars effectively and efficiently—and we take that responsibility very seriously. To honour that trust, we must be fiscally prudent.
This Report on Plans and Priorities highlights the Department of Finance Canada's key strategies and goals for supporting the government's fiscal and economic priorities.
The Department plays a vital role in helping the government develop the kind of social and economic policies needed for ongoing economic growth and a better quality of life for all Canadians.
It will continue to ensure that government spending is focussed on results and delivers value for taxpayer dollars.
As this Report on Plans and Priorities makes clear, the government will continue to take the steps needed to build an even stronger economy and to make this country a world leader.
I submit for tabling in Parliament the 2007–08 Report on Plans and Priorities (RPP) for the Department of Finance Canada.
This document has been prepared based on the reporting principles contained in the Guide for the Preparation of Part III of the 2007–2008 Estimates: Reports on Plans and Priorities and Departmental Performance Reports.
The paper version was signed by
Rob Wright
Deputy Minister
Department of Finance Canada
The following abbreviations are used in this report:
AML | Anti-money laundering |
ATF | Anti-terrorist financing |
CCA | Capital cost allowance |
CHT | Canada Health Transfer |
CHST | Canada Health and Social Transfer |
CPP | Canada Pension Plan |
CST | Canada Social Transfer |
EBRD | European Bank for Reconstruction and Development |
FATF | Financial Action Task Force on Money Laundering |
FINTRAC | Financial Transactions and Reports Analysis Centre of Canada |
FSAP | Financial Sector Assessment Program |
G7 | Group of 7 leading industrialized countries |
G8 | G7 nations plus Russia |
G20 | The members of the G20 are the finance ministers and central bank governors of 19 countries, plus the European Union |
GDP | Gross domestic product |
GST/HST | Goods and Services Tax / Harmonized Sales Tax |
HIPC | Heavily Indebted Poor Countries |
IAE | International Assistance Envelope |
IDA | International Development Association |
IMF | International Monetary Fund |
OECD | Organisation for Economic Co-operation and Development |
PCMLTFA | Proceeds of Crime (Money Laundering) and Terrorist Financing Act |
PRGF | Poverty Reduction and Growth Facility |
RCM | Royal Canadian Mint |
SDS | Sustainable Development Strategy |
TFF | Territorial Formula Financing |
WTO | World Trade Organization |
Reason for existence: The goal of the Department of Finance Canada is to foster a strong economy, resulting in higher standards of living and an improved quality of life for Canadians. |
2007–08 |
2008–09 |
2009–10 |
75,817,194 |
77,337,194 |
79,261,798 |
2007–08 |
2008–09 |
2009–10 |
798 |
789 |
789 |
Planned Spending ($ thousands) |
||||
Name |
Type |
2007–08 |
2008–09 |
2009–10 |
1. Sound Fiscal Management |
Ongoing |
34,874,916 |
34,824,630 |
34,866,557 |
2. Sustainable Economic Growth |
Ongoing |
39,206 |
38,060 |
38,193 |
3. Sound Social Policy Framework |
Ongoing |
40,345,750 |
41,921,260 |
43,834,463 |
4. Effective International Influence |
Ongoing |
557,323 |
553,244 |
522,585 |
Total Planned Spending |
75,817,194 |
77,337,194 |
79,261,798 |
Expected Results |
Planned Spending |
||||
2007–08 |
2008–09 |
2009–10 |
Contributes to the Following Priority (Priorities) |
||
Strategic Outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government's overall agenda. |
|||||
Tax Policy | Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue | 30,400 | 30,517 | 30,048 | Sound Fiscal Management; Sustainable Economic Growth; Sound Social Policy Framework |
Sound fiscal relationships with provinces, Aboriginal governments, and other countries | 2,288 | 2,297 | 2,262 | Sound Fiscal Management; Sustainable Economic Growth; Sound Social Policy Framework | |
Economic and Fiscal Policy | Transparent fiscal planning and sustainable fiscal policy | 6,229 | 6,253 | 6,253 | Sound Fiscal Management |
Effective analysis of economic performance | 8,778 | 8,812 | 8,812 | Sustainable Economic Growth | |
Financial Sector Policy | Prudent and cost-effective treasury management of the borrowing activities of Crown corporations and the government's investment portfolios | 3,370 | 2,971 | 3,067 | Sound Fiscal Management |
A regulatory framework that promotes a sound, efficient, and competitive Canadian financial sector that serves the needs of individuals, businesses, and the economy | 10,599 | 9,343 | 9,646 | Sustainable Economic Growth | |
A legislative and regulatory framework that ensures the security and viability of federally regulated defined benefit pension plans | 971 | 856 | 883 | Sound Social Policy Framework | |
An effective anti-money laundering (AML) and anti-terrorist financing (ATF) framework | 3,172 | 2,797 | 2,887 | Effective International Influence | |
Economic Development and Corporate Finance | Sound advice to the minister on economic, funding, and policy proposals | 8,289 | 8,321 | 8,321 | Sound Fiscal Management; Sustainable Economic Growth; Sound Social Policy Framework |
Federal-Provincial Relations and Social Policy | A principled framework to restore fiscal balance in Canada | 7,032 | 7,060 | 7,059 | Sound Fiscal Management |
Sound advice to the minister on government social policy priorities | 5,265 | 5,285 | 5,285 | Sound Social Policy Framework | |
International Trade and Finance | Secure access to key markets for Canadian exporters and investors | 6,445 | 6,470 | 6,469 | Sustainable Economic Growth |
Canadian leadership and influence in international forums on international economic, financial, development, and trade finance issues | 9,433 | 9,469 | 9,469 | Effective International Influence | |
Public Debt | Stable low-cost financing for the Government of Canada | 34,597,000 | 34,545,000 | 34,585,000 | Sound Fiscal Management |
A well-functioning market in Government of Canada securities | 100,000 | 100,000 | 100,000 | Sound Fiscal Management | |
Domestic Coinage | A supply of coinage at a reasonable cost | 145,000 | 147,000 | 149,000 | Sound Fiscal Management |
Transfer Payments to Provinces and Territories | Administration of federal transfer payments to the provinces and territories, including Equalization, Territorial Formula Financing, the Canada Health Transfer, and the Canada Social Transfer | 40,328,203 | 41,903,765 | 43,817,109 | Sound Social Policy Framework |
International Financial Organizations | Payments to international organizations and Canadian creditors consistent with our commitments | 544,717 | 540,978 | 510,229 | Effective International Influence |
Total Department of Finance Canada | 75,817,194 | 77,337,194 | 79,261,798 |
Note: The planned spending figures associated with each expected result are estimates based on management representation.
The goal of the Department of Finance Canada is to foster a strong economy, resulting in a higher standard of living and an improved quality of life for all Canadians.
The Department is committed to making a difference for Canadians by helping the Government of Canada develop and implement strong and sustainable economic, fiscal, social, security, and financial sector policies and programs.
The Department serves as the government's primary source of analysis and advice on the economic, fiscal, and tax implications of key government priorities. Its responsibilities include preparing the federal budget, developing tax and tariff policy and legislation, managing federal borrowing on financial markets, administering major transfers of federal funds to the provinces and territories, developing regulatory policy for the country's financial sector, and representing Canada within international financial institutions.
The Department's mission is to support the minister of Finance by providing the best possible analysis and policy advice on economic, fiscal, social, and financial issues; implementing government decisions in a timely and efficient manner; and communicating government decisions in the clearest way possible, within and outside government. Its mission is also to act as an effective conduit for the views of participants in the economy from all parts of Canada and to maintain high-quality support systems and development programs to carry out the Department's functions.
In support of its mission, the Department has one strategic outcome: To create a fiscal, economic, social, and global advantage for Canada by providing appropriate policies and sound advice with respect to economic, social, and financial conditions and to the government's overall agenda.
Under its Program Activity Architecture, the Department has established 10 program activities to support its strategic outcome:
The Department of Finance Canada is actively involved in the government's policy and legislative agenda, helping develop and implement fiscal, economic, social, and financial policies and programs. The Department is involved in the four policy areas of the Whole-of-Government Framework: economic, social, international, and government affairs. Its responsibilities include preparing the federal budget, developing tax and tariff policy and legislation, managing federal borrowing on financial markets, administering major transfers of funds to provinces and territories, developing regulatory policy for the country's financial sector, and representing Canada in international financial institutions and forums.
The operating environment of the Department is characterized by the following:
An important component of the work conducted by the Department involves consultation and collaboration with partners in both the public and private sectors. Its primary partners and clients include the following:
The Department provides analysis, advice, and recommendations regarding economic, social, federal-provincial, and financial affairs and tax matters. It also provides instructions about how to draft legislation in many of these areas.
The Department acts as the primary sponsor of bills on taxation, federal and provincial/territorial transfers, and financial matters and manages them through the parliamentary process. It also supports the minister of Finance in the fulfillment of his or her parliamentary responsibilities.
The Department supports an expanded program of public information and consultation. This includes responding to requests for information and providing opportunities for Canadians to participate in open, broad-based consultations on key economic, social, fiscal, and tax issues.
The Department plays an active role in encouraging coordination and harmony among all federal initiatives that affect the economy, the financial sector, and financial markets.
The Department develops and administers transfer payments in support of social programs and works with the provinces and territories on fiscal, taxation, financial sector, and other issues of concern to all governments. It also works with these other jurisdictions as joint stewards of the Canada Pension Plan (CPP) to ensure that the CPP remains financially secure and stable.
The Department deals with issues affecting federal financial institutions. It develops the rules and regulations that govern these institutions so they remain safe and sound and are responsive to consumers' needs. The Department also deals on an ongoing basis with a range of market participants, including banks, securities dealers, and investors, in fulfilling its responsibility for managing the public debt and international reserves.
The Department plays a key role in promoting a strong multilateral system of global economic and financial governance. The most important role in this regard is support for the minister's participation in the G7, G8, and G20 processes. The Department also has a lead role in managing the country's activities related to international and financial organizations, such as the International Monetary Fund (IMF), the World Bank, the European Bank for Reconstruction and Development (EBRD), the Financial Action Task Force on Money Laundering (FATF), and the Financial Stability Forum. The Department also plays an important role in other organizations, such as the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization.
The Department plays an important role in negotiating Canada's trade arrangements with other nations and monitoring how those arrangements serve Canada's interests.
The Department plays an active and leading role in representing Canada internationally. The Department supports the minister of Finance's involvement in the G7 process, as well as his involvement in other key ministerial forums, including the G8 and G20 finance ministers' processes, and IMF and World Bank meetings. These and similar processes are important forums for exchanging views and forging consensus on measures to strengthen global economic growth, promote financial stability, and reduce global poverty.
The Department's activities are undertaken in the context of a rapidly integrating, technology-driven global economy. Events that take place far from Canada can have a powerful impact, both adverse and beneficial, on Canada's economy.
To support its work on international economic issues, the Department holds extensive consultations not only within the federal government but also with provincial governments, the private sector, civil society, and the Canadian public.
The Department must manage the financial risks associated with the government's financial assets and liabilities. It must be ready to respond to economic and financial developments by taking prompt and decisive action to mitigate, where appropriate, their effects on the Canadian economy and fiscal framework.
The Department is also committed to ensuring that all of its employees and activities, at the personal, professional, and organizational levels, meet the highest standards of ethical conduct and accountability.
The Internal Audit and Evaluation Division (IAED) is responsible for developing risk-based audit and evaluation plans, as well as for the conduct of internal audit and evaluation engagements that meet professional standards. Internal audits and evaluationsare selected based on potential risks and exposures and areidentified annuallyin the respectiverisk-based audit and evaluation plans, which are approved by the Internal Audit and Evaluation Committee chaired by the deputy minister. The Committee also reviews and approves audit and evaluation reports, and their corresponding management action plans.
The new Treasury Board Policy on Internal Audit came into effect on April 1, 2006, that significantly increases the requirements of deputy heads, audit committees, and internal audit functions in the federal government. In response to the new Policy and additional requirements embedded in the Federal Accountability Act, the Department is undertaking significant efforts to strengthen internal audit capacity and delivery processes. Specifically, IAED has developed a comprehensive three-year plan to implement the structure and activities required to adhere to the Policy. In 2006–07, significant progress was made to develop the internal audit capacity within the Division. IAED will continue to build this capacity to ensure that the Department has a sufficient, competent, and professional internal audit function in place. Regarding program evaluation, a needs assessment review is being undertaken to identify and assess program evaluation requirements for the Department.
The Department has established four key priorities in support of its mission. Figures 1 to 4 summarize the key expected results planned by the Department under each of the four priorities by program activity. Section II provides more details on the expected results, ongoing initiatives, and key commitments for each of the 10 program activities.
A strong economy requires sensible, strong financial management and leadership. Canada's solid macroeconomic framework, which includes transparent fiscal management, underpins healthy economic growth and helps ensure the sustainability of our social safety net. A sound fiscal structure also includes a competitive, efficient, and fair tax system to promote economic growth, create jobs, and boost living standards in a fiscally sustainable manner.
Solid macroeconomic fundamentals have placed Canadians in a good position to capitalize on both domestic and global economic opportunities. This has allowed the government to reduce the public debt burden and, in turn, invest in important economic and social priorities, while also delivering significant tax relief to all Canadians.
The Department of Finance Canada will play a major role in keeping the government focussed on what it does best: improving services and helping build a climate for the overall economy to perform better. The Department will help ensure that spending is responsible, operations are efficient, and results are effective and accountable to taxpayers.
Program Activity |
Expected Results |
Tax Policy |
Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue Sound fiscal relationships with provinces, Aboriginal governments, and other countries |
Economic and Fiscal Policy |
Transparent fiscal planning and sustainable fiscal policy |
Financial Sector Policy |
Prudent and cost-effective treasury management of the borrowing activities of Crown corporations and the government's investment portfolios |
Economic Development and Corporate Finance |
Sound advice to the minister on economic, funding, and policy proposals |
Federal-Provincial Relations and Social Policy |
A principled framework to restore fiscal balance in Canada |
Public Debt |
Stable low-cost financing for the Government of Canada A well-functioning market in Government of Canada securities |
Domestic Coinage |
A supply of coinage at a reasonable cost |
Government plays an important role in ensuring that Canadian people, businesses, and organizations have the advantages they need to succeed on a global scale. Therefore, the Department puts a key focus on sustainable economic growth by developing and implementing policies and programs that provide appropriate support for the drivers of productivity growth: physical, financial, and human capital and innovation.
As a key source of economic advice to the government, the Department helps ensure that the policies and programs adopted create the framework and conditions necessary for sustainable long-term economic growth by supporting physical investment, and research and development and by helping Canadians acquire skills.
Program Activity |
Expected Results |
Tax Policy |
Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue Sound fiscal relationships with provinces, Aboriginal governments, and other countries |
Economic and Fiscal Policy |
Effective analysis of economic performance |
Financial Sector Policy |
A regulatory framework that promotes a sound, efficient, and competitive Canadian financial sector that serves the needs of individuals, businesses, and the economy |
Economic Development and Corporate Finance |
Sound advice to the minister on economic, funding, and policy proposals |
International Trade and Finance |
Secure access to key markets for Canadian exporters and investors |
The Department contributes, through its analysis and advice, to the government's efforts to meet its objectives for the quality of Canada's communities, health care, education, social safety net, and equality of opportunity for all citizens.
The government supports social programs delivered by provinces and territories by means of transfers of resources to provincial and territorial government treasuries. The Canada Health Transfer (CHT) is the primary federal transfer in support of health care, and the Canada Social Transfer (CST) is provided in support of post-secondary education, social assistance, and social services, including early childhood development, and early learning and childcare. Equalization payments enable less prosperous provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces at reasonably comparable levels of taxation. Finally, Territorial Formula Financing (TFF) is the key unconditional transfer to the three territorial governments. The Department administers these transfers and undertakes regular consultations with provinces and territories.
The Department will assist government partnerships with the provinces and the private sector in strategic areas that contribute to strong economies—including primary scientific research, a clean environment, and modern infrastructure.
Program Activity |
Expected Results |
Tax Policy |
Improving the fairness, efficiency, and competitiveness of the personal, corporate, sales, and excise tax systems while raising the required amount of tax revenue Sound fiscal relationships with provinces, Aboriginal governments, and other countries |
Financial Sector Policy |
A legislative and regulatory framework that ensures the security and viability for federally regulated defined benefit pension plans |
Economic Development and Corporate Finance |
Sound advice to the minister on economic, funding, and policy proposals |
Federal-Provincial Relations and Social Policy |
Sound advice to the minister on government social policy priorities |
Transfer Payments to Provinces and Territories |
Administration of federal transfer payments to the provinces and territories, including Equalization, Territorial Formula Financing, the Canada Health Transfer, and the Canada Social Transfer |
Improving and sustaining the living standards and quality of life of Canadians in an increasingly competitive and integrated global economy continue to be key departmental objectives. These include maintaining secure and open borders, working to strengthen global growth and stability, advancing Canada's trade and investment interests, and helping foster development to reduce global poverty.
In representing Canada in a wide range of international economic organizations, the Department contributes to policies and measures to increase global economic growth, promote global financial stability, encourage policies to reduce poverty in developing countries, and advance international standards to prevent abuses to the international financial system, including terrorist financing.
The Department will also assist the government in creating the right economic conditions to encourage Canadian firms to invest and flourish, and to be open to trade and foreign investment so goods, services, and technologies flow freely into Canada and Canadian firms have ready access to foreign markets to compete with the best in the world.
Program Activity |
Expected Results |
Financial Sector Policy |
An effective anti-money laundering (AML) and anti-terrorist financing (ATF) framework |
International Trade and Finance |
Canadian leadership and influence in international forums on international economic, financial, development, and trade finance issues |
International Financial Organizations |
Payments to international organizations and Canadian creditors consistent with our commitments |