Archived - Departmental Performance Report 2013–14 - Supplementary Tables

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Details on Transfer Payment Programs

Name of transfer payment program: Fiscal Equalization (Part I—Federal-Provincial Fiscal Arrangements Act)

Start date: 1957

End date: Ongoing

Description: Formula-based Equalization payments are made to eligible provincial governments to enable them to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. Equalization payments are unconditional.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to provinces

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12
Actual
Spending
2012–13
Actual
Spending
2013–14
Planned
Spending
2013–14
Total
Authorities
2013–14
Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 14,658.6 15,422.5 16,105.2 16,105.2 16,105.2 0
Total program 14,658.6 15,422.5 16,105.2 16,105.2 16,105.2 0

Comments on variances: The increase in actual spending from 2012–13 to 2013–14 is due to the legislated annual program growth, calculated by multiplying the 2012–13 expenditures by the 4.43 per cent escalator derived using the Gross Domestic Product (GDP) data available in October 2012.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Extensive consultations were held on the renewal of this program prior to the inclusion of the enabling legislation in the Economic Action Plan 2013 Act, No. 1, which received royal assent in June 2013. The regulations governing this program were updated in December 2013 in order to implement the technical changes announced at the December 2012 Finance Ministers' meeting.

Name of transfer payment program: Territorial Formula Financing (Part I.1—Federal-Provincial Fiscal Arrangements Act).

Start date: 1985

End date: Ongoing

Description: Territorial Formula Financing payments are made to all territorial governments and provide the resources they need to deliver services that are comparable to those delivered by provincial governments, taking into account the high costs and unique challenges in the North.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to territories

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 2,876.1 3,110.7 3,288.3 3,288.3 3,288.3 0
Total program 2,876.1 3,110.7 3,288.3 3,288.3 3,288.3 0

Comments on variances: The increase in actual spending from 2012–13 to 2013–14 is largely due to the growth in provincial and territorial spending.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Extensive consultations were held on the renewal of this program prior to the inclusion of the enabling legislation in the Economic Action Plan 2013 Act, No. 1, which received royal assent in June 2013. The regulations governing this program were updated in December 2013 in order to implement the technical changes announced at the December 2012 Finance Ministers' meeting.

Name of transfer payment program: Canada Health Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)

Start date: 2004

End date: Ongoing

Description: In 2013–14, the Canada Health Transfer (CHT) provided equal per capita support for health care through cash and tax transfers to provincial and territorial governments. Starting in 2014–15, the CHT will be provided on an equal per capita cash basis. The CHT supports the government's commitment to maintain the Canada Health Act's national criteria (comprehensiveness, universality, portability, accessibility, and public administration) and prohibitions against user fees and extra-billing.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to provinces and territories

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 26,941.8 28,568.6 30,283.1 30,282.9 30,282.9 0.2
Total program 26,941.8 28,568.6 30,283.1 30,282.9 30,282.9 0.2

Comments on variances: The slight variance between planned spending and actual spending occurred because the planned spending figure does not include the March 2014 refunds and deductions under the Canada Health Act. The increase in actual spending from 2012–13 to 2013–14 is due to the legislated 6 per cent annual escalation of the Canada Health Transfer.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Canada Social Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)

Start date: 2004

End date: Ongoing

Description: The Canada Social Transfer (CST) provides equal per capita cash support to provincial and territorial governments to assist them in financing social programs, post-secondary education, and programs for children. The CST gives provinces and territories the flexibility to allocate payments to those areas according to their own priorities and supports the government's commitment to prohibit minimum residency requirements for social assistance.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to provinces and territories

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 11,514.0 11,859.5 12,215.3 12,215.3 12,215.3 0
Total program 11,514.0 11,859.5 12,215.3 12,215.3 12,215.3 0

Comments on variances: The increase in actual spending from 2012–13 to 2013–14 is due to the legislated annual 3 per cent escalation of the CST program.

Audits completed or planned:The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Statutory Subsidies (Constitution Act, 1867; Constitution Act, 1982; and other statutory authorities)

Start date: 1867

End date: Ongoing

Description: Statutory subsidies provide a source of funding to provinces in accordance with their terms of entry into Confederation.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to provinces

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2012–13 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 32.1 32.1 32.1 34.1 34.1 (2.0)
Total program 32.1 32.1 32.1 34.1 34.1 (2.0)

Comments on variances: The variance between planned spending and actual spending is due to the inclusion of data based on the 2011 Census in the calculation of those Statutory Subsidies that are based on population. This development also accounts for the increase in actual spending from 2012–13 to 2013–14. The data based on the 2011 Census data were released in September 2013, after the 2013–14 Report on Plans and Priorities had been prepared.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964)

Start date: 1964

End date: Ongoing

Description: The Youth Allowances Recovery is a recovery from the Province of Quebec of an additional tax point transfer (three percentage points) above and beyond the Canada Health Transfer and Canada Social Transfer tax point transfers. In the 1960s, Quebec chose to use the federal government's contracting-out arrangements for certain federal-provincial programs. Quebec continues to receive the value of these tax points through its own income tax system and reimburses the Government of Canada for the discontinued programs for which it had received a tax point transfer. Taken together, the Youth Allowances Recovery and the Alternative Payments for Standing Programs are known as the Quebec Abatement. These arrangements ensure that all provinces and territories are treated the same through cash and tax transfers in support of health and social programs.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments and recoveries that met all legislative requirements

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments (709.6) (736.5) (770.3) (763.0) (763.0) (7.3)
Total program (709.6) (736.5) (770.3) (763.0) (763.0) (7.3)

Comments on variances: The variance between planned spending and actual spending is due to prior-year adjustments and to a revised estimate of the 2013–14 recovery, made in March 2014. The recovery for 2013–14 was greater than the recovery for 2012–13 because the value of the estimated tax points was greater in 2013–14.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, conducted by the Department of Finance Canada's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Alternative Payments for Standing Programs (Part VI—Federal-Provincial Fiscal Arrangements Act)

Start date: 1977

End date: Ongoing

Description: The Alternative Payments for Standing Programs is a recovery from the Province of Quebec of an additional tax point transfer (13.5 percentage points) above and beyond the Canada Health Transfer (CHT) and Canada Social Transfer (CST) tax point transfers. In the 1960s, Quebec chose to use the federal government's contracting-out arrangements for certain federal-provincial programs. Since Quebec, like other provinces, receives its full cash entitlement under the CHT and CST, the value of these tax points is reimbursed to the Government of Canada each year. Taken together, the Alternative Payments for Standing Programs and the Youth Allowances Recovery are known as the Quebec Abatement. These arrangements ensure that all provinces and territories are treated the same through cash and tax transfers in support of health and social programs.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments and recoveries that met all legislative requirements

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments (3,219.7) (3,357.0) (3,499.9) (3,459.8) (3,459.8) (40.1)
Total program (3,219.7) (3,357.0) (3,499.9) (3,459.8) (3,459.8) (40.1)

Comments on variances: The variance between planned spending and actual spending is due to prior-year adjustments arising from revisions to prior open years, and to a revised official estimate of the 2013–14 recovery, made in February 2014. The recovery for 2013–14 was greater than the recovery for 2012–13 because the value of the estimated tax points was greater in  2013–14.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Wait Times Reduction Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)

Start date: 2004–05

End date: 2013–14

Description: As part of the 10-Year Plan to Strengthen Health Care, the Government of Canada committed support to the provinces and territories to help reduce wait times in the health care system—primarily in support of human resources and tools to manage wait times. A total of $4.25 billion was provided through a third-party trust fund in 2004 and was notionally allocated over five years, from 2004–05 to 2008–09. This amount was paid in full. From 2009–10 to 2013–14, annual funding of $250  million was provided to the provinces and territories through cash transfer payments.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to provinces and territories

Program: Transfer and Taxation Payment Programs ($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 250.0 250.0 250.0 250.0 250.0 0
Total program 250.0 250.0 250.0 250.0 250.0 0

Comments on variances: Not applicable

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Payment to Ontario Related to the Canada Health Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)

Start date: 2009–10

End date: 2010–11

Description: Direct payments were made to the Government of Ontario to ensure its per capita cash entitlements related to the Canada Health Transfer were the same as those for other provinces receiving Equalization.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to Ontario

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments (18.0) 93.7 0 10.0 10.0 (10.0)
Total program (18.0) 93.7 0 10.0 10.0 (10.0)

Comments on variances: No amount was included in 2013–14 planned spending because the 2013–14 Report on Plans and Priorities was prepared before the amount of the transfer payment was determined in October 2013. The decrease in actual spending from 2012–13 to 2013–14 was due to revised population data from Statistics Canada, and revised personal and corporate income tax data from the Canada Revenue Agency.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned:A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Additional Fiscal Equalization Offset Payment to Nova Scotia (Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act)

Start date: 2011–12

End date: 2019–20

Description: This payment is related to the 2005 Offshore Arrangement between the Government of Canada and the Province of Nova Scotia. The Arrangement guaranteed Nova Scotia that its Equalization payments would not be reduced because of offshore oil and gas revenues that entered the formula. The payment is derived by applying the Equalization formula with and without offshore oil and gas revenues and comparing the resulting Equalization payments.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to Nova Scotia

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 33.7 146.1 89.5 89.5 89.5 0
Total program 33.7 146.1 89.5 89.5 89.5 0

Comments on variances: The decrease in actual spending from 2012–13 to 2013–14 is due to a decrease in Nova Scotia's offshore oil and gas revenues.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Additional Fiscal Equalization to Nova Scotia (Part I—Federal-Provincial Fiscal Arrangements Act)

Start date: 2011–12

End date: 2019–20

Description: This payment (known as the Cumulative Best-of Guarantee or CBO) is related to the 2005 Offshore Arrangement between the Government of Canada and the Province of Nova Scotia. Following the introduction of a new formula for Equalization in 2007, Nova Scotia was guaranteed that on a cumulative basis over the lifetime of the Accord, beginning in 2008–09, the new formula would not reduce its Equalization payments and 2005 Offshore Arrangement payments when compared with the payments the province would have received under the formula that was in place when it signed its 2005 Offshore Arrangement.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Timely and accurate payments that met all legislative requirements for financial support to Nova Scotia

Program: Transfer and Taxation Payment Programs
($ millions)
2010–11 Actual
Spending
2011–12 Actual
Spending
2012–13 Planned
Spending
2012–13 Total
Authorities
2012–13 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 82.7 297.3 245.8 260.3 260.3 (14.5)
Total program 82.7 297.3 245.8 260.3 260.3 (14.5)

Comments on variances: The variance between planned spending and actual spending occurred because the official calculation to determine the amount of the transfer payment was made after the 2013–14 Report on Plans and Priorities was prepared. The decrease in actual spending from 2012–13 to 2013–14 is due to higher growth of combined Equalization and 2005 Offshore Equalization Offset payments in the new formula compared with the formula in place prior to 2007.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: To ensure that the CBO formula could still be calculated according to regulations, and to implement the technical changes announced at the December 2012 Finance Ministers' meeting, minor modifications were made to the regulations governing this payment at the time that the Equalization program regulations were updated in December 2013.

Name of transfer payment program: Additional Fiscal Equalization Payment – Total Transfer Protection (Part I—Federal-Provincial Fiscal Arrangements Act)

Start date: 2010–11

End date: 2013–14

Description: Total Transfer Protection payments, first announced in December 2009 for 2010–11, were extended on a one-year basis for 2011–12, 2012–13, and 2013–14, with the most recent extension announced by the Minister of Finance in December 2012. For 2013–14, the amounts were calculated to prevent declines in major transfers between 2012–13 and 2013–14. Specifically, the Total Transfer Protection payments for 2013–14 were calculated by subtracting the sum of the 2013–14 transfer payments for Equalization, Canada Health Transfer and Canada Social Transfer from the sum of the corresponding 2012–13 transfer payments plus the 2012–13 Transfer Protection payments.

Strategic outcome: A strong economy and sound public finances for Canadians

Results Achieved: Timely and accurate payments that met all legislative requirements for financial support to provinces

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 952.1 679.7 0 55.8 55.8 (55.8)
Total program 952.1 679.7 0 55.8 55.8 (55.8)

Comments on variances: No amount was included in 2013–14 planned spending because the 2013–14 Report on Plans and Priorities was prepared before the payment was legislated in the Economic Action Plan 2013 Act, No.1, which was given royal assent in June 2013. The decrease in actual spending from 2012–13 to 2013–14 was due to the annual escalation of the major transfer payments, which in turn resulted in a reduced need for the Total Transfer Protection payment.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15. An internal audit of the Control Framework for the Transfer Payments Process, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2014–15.

Evaluations completed or planned: A program evaluation of the Federal-Provincial Relations Division, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Not applicable

Name of transfer payment program: Payment to Provinces Regarding Sales Tax Harmonization (Part III.1—Federal-Provincial Fiscal Arrangements Act)

Start date: 2010

End date: 2014

Description: The Government of Canada entered into Comprehensive Integrated Tax Coordination Agreements (CITCAs) with Ontario, British Columbia, Quebec, and Prince Edward Island following the decisions of these provinces to harmonize their provincial sales taxes with the federal Goods and Services Tax. As part of the CITCAs, the federal government agreed to make assistance payments to these provinces.

Following a referendum, British Columbia exited the Harmonized Sales Tax on April 1, 2013. British Columbia is repaying the $1.599 billion in assistance that it received, at $319.8 million per year over a five-year period (2011–12 to 2015–16).

Strategic outcome: A strong economy and sound public finances for Canadians

Results Achieved: Harmonization of provincial sales taxes with the Goods and Services Tax

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 1,560.2 438.2 1,481.0 1,161.2 1,161.2 (319.8)
Total program 1,560.2 438.2 1,481.0 1,161.2 1,161.2 319.8

Comments on variances: The difference between planned spending and actual spending for 2013–14 is due to the $319.8 million that was returned by British Columbia during 2013–14 as part of its exit from the harmonized value-added tax framework. The increase in payments between 2012–13 and 2013–14 is in accordance with the schedule of assistance payments agreed to with Quebec and Prince Edward Island under their sales tax harmonization agreements. The $1,161.2 million in actual spending for 2013–14 represents the $1,467 million and $14 million in payments to Quebec and Prince Edward Island respectively, minus the return of payments by British Columbia as part of its exit from the harmonized value-added tax framework.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its annual financial audit, to be completed in the second quarter of 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: CITCAs were signed with provinces that harmonized their provincial sales taxes with the federal Goods and Services Tax. The agreements provide for the rights and obligations of the parties.

Name of transfer payment program: Debt Payments on Behalf of Poor Countries to International Organizations Pursuant to section 18(1) of the Economic Recovery Act (stimulus)

Start date: 2010

End date: 2054

Description: Payments for Canada's commitment to the G8-led Multilateral Debt Relief Initiative

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Payments to international organizations were consistent with the Government of Canada's commitments under the Multilateral Debt Relief Initiative

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 51.2 51.2 51.2 51.2 51.2 0
Total program 51.2 51.2 51.2 51.2 51.2 0

Comments on variances: Not applicable

Audits completed or planned: Not applicable

Audits completed or planned: A program evaluation of the International Trade and Finance Branch, to be conducted by the Department's Internal Audit and Evaluation Division, is scheduled for 2016.

Engagement of applicants and recipients: Recipients were engaged through the biennial consultations on the Official Development Assistance Accountability Act.

Name of transfer payment program: Harbourfront Centre Funding Program (Vote 5)

Start date: March 2006

End date: March 31, 2016

Description: The primary objective of the Harbourfront Centre Funding Program (HCFP) is to provide operational funding support to Harbourfront Centre to cover its fixed operational costs. The program also facilitates the leveraging of funding from other levels of government, and the pursuit of other revenue-generating strategies that allow Harbourfront Centre to provide the general public with continued access to cultural, recreational, and educational programs and activities in Toronto's waterfront area.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Harbourfront Centre received $5 million in funding for administrative and operational costs, helping the organization to leverage funding from other sources and to pursue revenue-generating strategies. Accordingly, the organization continued its operations, providing community and cultural programming for the general public in Toronto's waterfront area.

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 7.0 5.0 5.0 5.0 5.0 0
Total other types of transfer payments 0 0 0 0 0 0
Total program 7.0 5.0 5.0 5.0 5.0 0

Comments on variances: Not applicable

Audits completed or planned: Not applicable

Evaluations completed or planned: The Internal Audit and Evaluation Division conducted an evaluation of the HCFP in 2013–14, which is currently being finalized.

Engagement of applicants and recipients: The most recent HCFP contribution agreement included a requirement for Harbourfront Centre to submit a sustainability strategy, providing a business plan for the organization to increase its revenues, sponsorships, and private sector donations. Frequent discussions have taken place with Harbourfront Centre regarding the strategy, and an external consultant was hired to provide expert advice to the organization on its development.

Name of transfer payment program: Payments to the International Development Association

Start date: 1960

End date: Ongoing

Description: This program provides encashment of demand notes to allow the International Development Association (IDA) to disburse concessional financing for development projects and programs in the world's poorest countries.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Payments were consistent with the Government of Canada's commitments

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 384.3 441.6 441.6 441.6 441.6 0
Total program 384.3 441.6 441.6 441.6 441.6 0

Comments on variances: Not applicable

Audits completed or planned: Not applicable

Evaluations completed or planned: An evaluation of Canada's payments to the IDA, to be conducted by the Department's Internal Audit and Evaluation Division is scheduled for 2016.

Engagement of applicants and recipients: Applicants and recipients were engaged through spring and annual meetings of the World Bank Group, IDA replenishment negotiations, and the biennial consultations on the Official Development Assistance Accountability Act.

Name of transfer payment program: International Bank for Reconstruction and Development for the Agriculture Advance Market Commitment (Bretton Woods and Related Agreements Act, section 8)

Start date: 2010–11

End date: 2014–15

Description: AgResults (formerly the Agriculture Advance Commitment) bridges the gap between public and private investment in the agricultural sector in support of global food security through the use of pull mechanisms, such as advance market commitments, which make payments once results are achieved.

Strategic outcome: A strong economy and sound public finances for Canadians

Results Achieved:Payments were timely, accurate, and consistent with the Government of Canada's commitments for financial support to AgResults

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 9.0 10.0 10.0 10.0 10.0 0
Total program 9.0 10.0 10.0 10.0 10.0 0

Comments on variances: Not applicable

Audits completed or planned: An audit of Financial Commitments to the World Bank, including payments made in the context of AgResults, conducted by the Department of Finance Canada's Internal Audit and Evaluation Division, was completed in 2013–14.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Applicants and recipients were engaged through semi-annual meetings of the AgResults Steering Committee and through project-specific site visits.

Name of transfer payment program: Canadian Securities Regulation Regime Transition Office (Canadian Securities Regulation Regime Transition Office Act)

Start date: 2009–10

End date: 2014–15

Description: Budget Implementation Act, 2013 extended the mandate of the Canadian Securities Regulation Regime Transition Office to ensure that its resources remained available as work continued to strengthen the regulation of Canada's capital markets.

Following the September 19, 2013, agreement between British Columbia, Ontario and Canada to establish a cooperative capital market regulatory system, the Canadian Securities Regulation Regime Transition Office has worked to support the transition toward the Cooperative Capital Markets Regulatory System.  These funds have been used to finance the Office's operations.

Strategic outcome: A strong economy and sound public finances for Canadians

Results achieved: Consistent with the Agreement in Principle between British Columbia, Ontario and Canada, the Canadian Securities Regulation Regime Transition Office has continued to carry out its purpose, including supporting work toward the execution of a memorandum of agreement by each participating jurisdiction, the publication of initial draft regulations for the cooperative legislation for public comment, the execution of securities regulatory body integration agreements, and the enactment of uniform provincial legislation and complementary federal legislation, culminating in the expected launch of the Cooperative Capital Markets Regulator by fall 2015.

Program: Transfer and Taxation Payment Programs
($ millions)
2011–12 Actual
Spending
2012–13 Actual
Spending
2013–14 Planned
Spending
2013–14 Total
Authorities
2013–14 Actual
Spending
Variance
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 4.2 4.2 (4.2)
Total other types of transfer payments 14.3 0 0 10.0 10.0 (10.0)
Total program 14.3 0 0 14.2 14.2 (14.2)

Comments on variances: At the time the 2013–14 Report on Plans and Priorities was prepared, the Canadian Securities Regulation Regime Transition Office was subject to a statutory dissolution date of July 12, 2013. Because the Office had sufficient funding on hand to conclude its mandate, no new funding was forecast to be transferred in 2013–14. However, the Office’s governing statute was amended through Economic Act Plan 2013 Act, No. 1, which received royal assent on June 26, 2013. The amendments to the Canadian Securities Regulation Regime Transition Office Act removed the Office’s statutory dissolution date and provided authority for the Governor in Council to dissolve the Office on the recommendation of the Minister of Finance. In order for the Office to continue operations under this new mandate, it required additional funding, which was provided through a contribution agreement ($4.2 million) and through the Office’s statutory funding authority ($10 million) over the balance of 2013–14.

Audits completed or planned: Under section 15 of the Canadian Securities Regulation Regime Transition Office Act, the accounts and financial transactions of the Canadian Securities Regulation Regime Transition Office must be audited annually by the Auditor General of Canada. The audited financial statements of the Office are included in its annual report, which is tabled in Parliament.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: The Department of Finance Canada is in continuous contact with the Canadian Securities Regulation Regime Transition Office (e.g., weekly conference calls, daily emails, and face-to-face meetings as necessary) to consult on the development and implementation of the Office’s business plan, review strategic priorities, and collaborate on the execution of deliverables.

Departmental Sustainable Development Strategy

1. Overview of the Federal Government's Approach to Sustainable Development

The Federal Sustainable Development Strategy (FSDS) 2013–16, tabled on November 4, 2013, guides the Government of Canada's sustainable development activities, as required by the Federal Sustainable Development Act (FSDA). In keeping with the objective of the FSDA, to make environmental decision making more transparent and accountable to Parliament, the Department of Finance Canada supports the implementation of the FSDS through the activities found in this departmental strategy.

Accordingly, this Departmental Sustainable Development Strategy (DSDS) presents the results for commitments for Theme I – Addressing Climate Change and Air Quality and Theme III – Protecting Nature and Canadians, within the context of the 2013–16 FSDS. This DSDS also provides the results for Theme IV – Shrinking the Environmental Footprint – Beginning with Government, based on the 2010–13 FSDS.

2. Themes I–III: Department–Led Targets

The Department of Finance is not responsible for leading a target for Themes I to III of the FSDS 2013–16.

3. Themes I–III: Implementation Strategies

A. Linkage of the Department's Implementation Strategies to the Program Alignment Architecture

The Department of Finance Canada provides effective economic leadership through its clear focus on one strategic outcome: a strong economy and sound public finances for Canadians. All programs delivered by the Department relate to this strategic outcome. The following implementation strategies related to goals and targets under Themes I and I+II of the FSDS are all elements of Sub-Program 1.1.1: Taxation (part of Program 1.1: Economic and Fiscal Policy Framework) of the Department's Program Alignment Architecture.

B. Department's Implementation Strategies

B.1 Theme I – Addressing Climate Change and Air Quality

Goal 1 – Climate Change: In order to mitigate the effects of climate change, reduce greenhouse gas emission levels and adapt to unavoidable impacts.

Target 1.1 – Climate Change Mitigation: Relative to 2005 emission levels, reduce Canada's total greenhouse gas emissions by 17 per cent by 2020.

Goal 2 – Air Pollution: Minimize the threats to air quality so that the air Canadians breathe is clean and supports healthy ecosystems.

Target 2.1 – Outdoor Air Pollutants: Improve outdoor air quality by ensuring compliance with new or amended regulated emission limits by 2020 and thus reducing emissions of air pollutants in support of Air Quality Management System objectives.

1. Accelerated capital cost allowance for clean energy generation equipment

Encourage businesses, through the accelerated capital cost allowance for clean energy generation equipment, to invest in specified equipment that can contribute to a reduction in harmful emissions and to diversification of the energy supply (Implementation Strategies 1.1.38 and 2.1.2).

The government provides an accelerated capital cost allowance (CCA) for income tax purposes under CCA Class 43.2 (50 per cent per year on a declining balance basis) for businesses that invest in clean energy generation and energy conservation equipment. Class 43.2 includes specified equipment that generates or conserves energy by using a renewable energy source (for example, wind, solar and small hydro), using fuels from waste (for example, landfill gas, wood waste and manure) or by making efficient use of fossil fuels (for example, high-efficiency cogeneration systems).

The provision of an accelerated CCA is an explicit exception to the general practice of setting CCA rates based on the useful life of assets. Accelerated CCA provides a financial benefit by deferring taxation. This incentive for investment is premised on the environmental benefits of low-emission or no-emission energy generation equipment and its ability to displace consumption of fossil fuels.

i. Relationship between the implementation strategies and the FSDS targets

To the extent that Class 43.2 encourages incremental investment in clean energy generation and energy conservation equipment, it could have an indirect positive impact on the environment. It could contribute to reduction in greenhouse gas emissions, which is relevant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, which is relevant to Target 2.1 – Outdoor Air Pollutants.

ii. Outline of the non-financial performance information

Providing a modest financial incentive for investment in clean energy generation and energy conservation equipment provides an incentive for businesses to invest in such equipment.

2. Public Transit Tax Credit

Provide tax relief to Canadians who use public transit regularly, and encourage individuals to make a sustained commitment to using public transit regularly to help reduce traffic congestion, air pollution and greenhouse gas emissions through the public transit tax credit (Implementation Strategies 1.1.20 and 2.1.5).

The public transit tax credit allows individuals to claim a non-refundable tax credit for the cost of monthly public transit passes or those passes of a longer duration, effective July 1, 2006. The credit was extended in Budget 2007 to electronic fare cards and weekly passes when used on an ongoing basis.

i. Relationship between the implementation strategies and the FSDS targets

As stated in Budget 2006, the objective of the public transit tax credit is to encourage individuals to make a sustained commitment to use public transit regularly to help reduce traffic congestion in urban areas and to improve the environment. This measure could contribute to a reduction in greenhouse gas emissions, which is relevant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, which is relevant to Target 2.1 – Outdoor Air Pollutants.

ii.   Outline of the non-financial performance information

The public transit tax credit is intended to encourage individuals to make a sustained commitment to public transit use by providing a tax credit for the purchase cost of monthly public transit passes and passes of a longer duration, as well as electronic fare cards and weekly passes when used on an ongoing basis. The Department of Finance Canada conducted an evaluation of the public transit tax credit in 2011 and found that the key conditions for the measure to be effective in increasing public transit use are present. In particular, evidence suggests that the demand for public transit is sensitive to a permanent price reduction and that the benefits of the public transit tax credit have been captured mainly by public transit users, as opposed to transit operators, through coincidental increases in public transit fares. The public transit tax credit evaluation was published in the 2011 edition of the Tax Expenditures and Evaluations report, available on the Department of Finance Canada website.

3. Green Levy

Impose a Green Levy on the most fuel-inefficient passenger vehicles available in Canada (Implementation Strategies 1.1.37 and 2.1.27).

The Green Levy applies to passenger vehicles with a weighted (55 per cent city and 45 per cent highway) fuel consumption rating of 13 litres or more per 100 kilometres and is imposed at rates ranging from $1,000 to $4,000. The Green Levy is payable by manufacturers or importers of new vehicles delivered after March 19, 2007, and by importers of used vehicles, if the used vehicle was originally put into service (in any jurisdiction) after March 19, 2007. The Canada Revenue Agency and the Canada Border Services Agency are responsible for the administration of the Green Levy, working with manufacturers and importers of vehicles to facilitate its application.

i.  Relationship between the implementation strategies and the FSDS targets

The Green Levy is aimed at encouraging clean, sustainable transportation choices by Canadians by discouraging the purchase of certain fuel-inefficient vehicles. This measure could contribute to a reduction in greenhouse gas emissions, which is relevant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, which is relevant to Target 2.1 – Outdoor Air Pollutants.

ii.   Outline of the non-financial performance information

The Green Levy was introduced as part of the government's comprehensive, results-oriented ecoACTION plan which aimed at promoting clean, sustainable transportation choices for Canadians. In particular, the Green Levy aims to continue discouraging the purchase of fuel-inefficient vehicles and to promote the development and deployment of cleaner transportation technologies.

B.2 Theme III – Protecting Nature and Canadians

Goal 4 – Conserving and Restoring Ecosystems, Wildlife and Habitat, and Protecting Canadians: Resilient ecosystems with healthy wildlife populations, so Canadians can enjoy benefits from natural spaces, resources and ecological services for generations to come.

Target 4.3 – Terrestrial Ecosystems and Habitat Stewardship: Contribute to the proposed national target so that by 2020, at least 17% of terrestrial areas and inland water are conserved through networks of protected areas and other effective area-based conservation measures.

4.   Ecological Gifts Program

Maintain the incentives for the protection of Canada's ecologically-sensitive land, including habitat used by species at risk, through ongoing tax assistance for donations of ecologically sensitive land under the Ecological Gifts Program (Implementation Strategy 4.3.6).

Under the Ecological Gifts Program, Canadian landowners may donate ecologically sensitive land, or easements and covenants on such land, to conservation charities to ensure its preservation in perpetuity. Under this program, donors may benefit from the charitable donations tax credit (for individuals) or the charitable donations deduction (for corporations) on the full value of the gifts of ecologically sensitive land. In addition, capital gains that have accrued on the donated land are eligible for a complete exemption from capital gains tax.

To protect the public interest, Environment Canada is responsible for certifying:

  • The eligibility of recipient charitable organizations;
  • The ecological sensitivity of the donation; and
  • The fair market value of the donation.

In addition, to ensure the perpetual protection of the donated land, the Income Tax Act imposes special tax liabilities for recipients of ecologically sensitive land if there are any changes in use without the prior authorization of Environment Canada.

i. Relationship between the implementation strategy and the FSDS targets

The Ecological Gifts Program is intended to help Canada's landowners and conservation groups in their habitat conservation and protection efforts. In particular, donations of ecologically sensitive land can contribute to the protection of non-park protected habitat, including habitat used by species at risk, pursuant to Target 4.3.6 of the FSDS.

ii. Outline of the non-financial performance information

While the decision to donate ecologically sensitive land is often motivated by non-financial factors, the significant income tax benefits provided through the Ecological Gifts Program provide an incentive to further encourage donations of ecologically sensitive land.

4. Theme IV: Implementation Strategies

Surplus Electronic and Electrical Equipment Target

By March 31, 2014, each department will reuse or recycle all surplus electronic and electrical equipment (EEE) in an environmentally sound and secure manner. (Target 8.6 from 2010–13 FSDS)
Performance Measure Performance Status
Target status Achieved
Existence of an implementation plan for the disposal of all departmentally generated EEE. Yes
Total number of departmental locations with an EEE implementation plan fully implemented, expressed as a percentage of all locations, by the end of the given fiscal year. 100%

Strategies and/or Comments

  1. Scope: The Department's sole recycling facility, located at 140 O'Connor Street, Ottawa, Ontario.
  2. Processes: Disposal of electronic and electrical equipment is carried out in accordance with the Treasury Board Directive on Disposal of Surplus Materiel and the Public Works and Government Services Canada Guideline for the Disposal of Federal Surplus Electronic and Electrical Equipment.
  3. Continuous improvement: A departmental guide on the disposal of surplus electronic and electrical equipment has been developed, and procedures are being documented.

Printing Unit Reduction Target

By March 31, 2013, each department will achieve an 8:1 average ratio of office employees to printing units. Departments will apply the target where building occupancy levels, security considerations, and space configuration allow. (Target 8.7 from 2010–13 FSDS)
Performance Measure Performance Status
Target status Opportunity for Improvement
Ratio of departmental office employees to printing units in fiscal year 2010–11, where building occupancy levels, security considerations and space configuration allow. 2.2:1
Ratio of departmental office employees to printing units at the end of the given fiscal year, where building occupancy levels, security considerations and space configuration allow. 5.3:1

Strategies and/or Comments

  1. Definition: The Department of Finance Canada has defined a printing unit as stand-alone and network printers as well as multi-functional devices (copiers).
  2. Scope: Desktop scanners and faxes were excluded since fax and scanning functionality in copiers is not operational for security reasons. Printing units supporting other security requirements, such as the separate print infrastructure required to support the secure network environment, were also excluded.
  3. Number of printing units: The number of printing units was determined by the Information Management and Technology Directorate, based on the number of devices connected to the Department's networks.

    Number of employees: The number of employees for reporting purposes is 776, which is the number of employees working at L'Esplanade Laurier. This number was determined in consultation with Human Resources specialists.
  4. Processes: Printers and copiers are centrally managed to reduce purchases of printing units. The number of printing units in use will be optimized during the Department's move to 90 Elgin Street in 2014–15, resulting in an employee-printer ratio greater than 8:1. During this process, stand-alone and network printers supporting the secure network will also be optimized.

Paper Consumption Target

By March 31, 2014, each department will reduce internal paper consumption per office employee by 20%. Each department will establish a baseline between 2005–06 and 2011–12, and an applicable scope. (Target 8.8 from 2010–13 FSDS)
Performance Measure Performance Status
Target status Opportunity for Improvement
Number of sheets of internal office paper purchased or consumed per office employee in the selected baseline year, according to the departmental scope. 10,246 (2012–13)
Cumulative reduction (or increase) in paper consumption per office employee in the given fiscal year, expressed as a percentage, relative to the selected baseline year. 8,999 (Reduction of 12%)

Strategies and/or Comments

  1. Scope: All photocopy and printer paper consumption is included in the baseline count.
  2. Number of employees: The number of employees for reporting purposes is 776, which is the number of employees working at L'Esplanade Laurier. This number was determined in consultation with Human Resources specialists.
  3. Method of determining paper baseline: The baseline was established in 2012–13, based on the number of sheets of paper purchased.
  4. Processes: All paper is purchased through the Public Works and Government Services Canada (PWGSC) Green Standing Offer for paper.
  5. Communications and continuous improvement: In consultation with departmental communications specialists, developed communications aimed at increasing employee awareness of paper reduction practices.
  6. Links: The print optimization and paper reduction targets are closely linked. For example, new print infrastructure is defaulted to duplex printing to reduce paper usage.
  7. Reporting: Paper reduction targets are reported on annually.

Green Meetings Target

By March 31, 2012, each department will adopt a guide for greening meetings. (Target 8.9 from 2010–13 FSDS)
Performance Measure Performance Status
Target status Achieved
Presence of a green meetings guide. Yes

Strategies and/or Comments

  1. Scope: Meetings held within or by the Department of Finance Canada.
  2. Processes: The Green Meetings Guide is posted on the Department's intranet and is intended to increase employee awareness of ways to reduce the environmental impacts of meetings.
  3. Communications and continuous improvement: In consultation with departmental communications specialists, developed communications aimed at increasing employee awareness of green meeting practices.

Green Procurement Targets

As of April 1, 2011, each department will establish at least three SMART green procurement targets to reduce environmental impacts. (Target 8.10 from 2010–13 FSDS)

1. By March 31, 2014, 70% of contracts for services and/or contracting processes will include environmental considerations.
Performance Measure Performance Status
Target status Achieved
Percentage of service contracts or processes with environmental criteria relative to the total number of service contracts awarded. 100%

Strategies and/or Comments

  1. Scope: Departmental service contracts over $10,000. The environmental criteria in these contracts are consistent with PWGSC Guideline for Green Services Procurement.
  2. Performance: Most of the Department of Finance Canada's service contracts focus on consultation, advice and report preparation. Because only a small number of environmental considerations may be relevant, the Department has focused on the greening of contracting processes to reduce the environmental impact of its contracting activity, as follows:
  • All bid solicitations are transmitted electronically.
  • Bid solicitation documents incorporate environmental considerations.
  • Bidders are instructed to submit bids electronically.
  • Contract documents are printed using the duplex printing option on paper with 30 per cent post-consumer recycled content, and then circulated electronically for signatures using scanning technology, to reduce paper consumption.
  • Suppliers are encouraged to submit invoices electronically. A direct-deposit pilot project is underway, eliminating the requirement to print and distribute cheques.
  • Departmental managers are encouraged to minimize contractor travel by using video and telephone conferencing, and to correspond electronically whenever possible.
  1. Processes: The Department uses PWGSC's consolidated procurement instruments as required, including commodities such as temporary help services, information technology (IT) professional services, and printing and publishing.
  2. Reporting: The Department plans to establish procedures to track and report on all service contracts, not only those contracts against PWGSC procurement instruments.
2. By March 31, 2014, 90% of IT hardware purchases will continue to be environmentally preferred models.
Performance Measure Performance Status
Target status Achieved
Percentage of IT hardware purchases that meet the target relative to the total IT hardware purchases. 100%

Strategies and/or Comments

  1. Scope: Desktop and notebook computers.
  2. Processes: The Department of Finance Canada uses PWGSC's mandatory consolidated procurement instruments to acquire IT hardware whenever possible. Of the Department’s total acquisitions in 2013–14, 88 per cent (representing 99 per cent of the value) were made through these instruments. Because of specific performance requirements, a small number of acquisitions were made outside the standing offer framework. The environmental characteristics of these acquisitions were similar to those of IT hardware available on standing offers.
3. By March 31, 2014, 90% of furniture purchases will continue to be environmentally preferred models.
Performance Measure Performance Status
Target status Achieved
Percentage of furniture purchases meeting the target relative to the total percentage of all furniture purchases. 100%

Strategies and/or Comments

  1. Scope: Chairs, cabinets, shelving, and panel and desk systems.
  2. Processes: The Department of Finance Canada uses PWGSC's mandatory consolidated procurement instruments to purchase furniture whenever possible. Of the Department's total purchases in 2013–14, 82 per cent (representing 79 per cent of the value) were made through these instruments. Because of specific performance requirements, a small number of acquisitions were made outside the standing offer framework. The environmental characteristics of these acquisitions were similar to those of furniture available on standing offers.
  3. Reporting: The Department tracks and reports on progress toward the target.

As of April 1, 2011, each department will establish SMART targets for training, employee performance evaluations, and management processes and controls, as they pertain to procurement decision making. (Target 8.11 from 2010–13 FSDS)

Training for select employees

By March 31, 2014, 95% of functional specialists in procurement or materiel management will have green procurement training through the CSPS course C215 or in-house equivalent.
Performance Measure Performance Status
Target status Achieved
Percent of functional specialists in procurement or materiel management with formal green procurement training relative to the total number of functional specialists of procurement or materiel management deemed as requiring training. 100%

Strategies and/or Comments

  1. Scope: All departmental functional specialists in procurement or materiel management complete green procurement training offered by the Canada School of Public Service (CSPS).
  2. Processes: The Department uses CSPS course C215 or an in-house alternative and an appropriate delivery method.
  3. Comments: New functional specialists in procurement or materiel management must complete CSPS C215 within one year of joining the Department.

Management processes and controls

By March 31, 2014, 50% of all identified procurement processes and controls will ensure environmental performance considerations are integrated in the procurement process.
Performance Measure Performance Status
Target status Achieved
Percentage of identified procurement processes and controls with environmental performance considerations integrated relative to the total number of identified procurement processes and controls. 100%

Strategies and/or Comments

  1. Scope: Environmental considerations are applied to all departmental contracts.
  2. Processes: Environmental considerations are integrated into all procurement processes from planning through contract award. Measures include the following:
  • Contracting in the Department is centralized; contracting and procurement transactions are reviewed and carried out by procurement specialists who have completed training on green procurement offered by the Canada School of Public Service. Acquisition cardholders also receive green procurement training.  
  • The Department has developed green procurement checklists for goods and services to aid procurement specialists in promoting the inclusion of environmental considerations in contracts.
  • In developing contracting strategies, the Department recommends the use of PWGSC's mandatory consolidated procurement instruments (which include environmental criteria) for much of its procurement. 
  • Request forms for contracts prompt for environmental considerations, and any contract requests that include a travel component require an additional checklist that includes environmental considerations.
  • The departmental Request for Proposal templates include environmental considerations in all bid solicitations for services.
  1. Communications and continuous improvement: Contracting and procurement specialists promote the inclusion of environmental considerations into departmental contracting activity.

Reporting on the Purchase of Offset Credits

Mandatory reporting on the purchase of greenhouse gas emissions offset credits, according to thePolicy Framework for Offsetting Greenhouse Gas Emissions from Major International Events
Performance Measure Performance Status
Quantity of emissions offset in the given fiscal year. N/A

Strategies and/or Comments

  1. The Department of Finance Canada did not purchase offset credits in 2013–14.

Voluntary Reporting on Any Other Greening Government Operations Initiative

The Department will reuse its surplus office supplies and equipment internally by encouraging reuse within the department. Unused surplus will be donated to non-profit organizations in the NCR or disposed of in an environmentally conscious manner.
Performance Measure Performance Status
Quantity of skids of supplies reused and sent to non-profit organizations On Track

Strategies and/or Comments

Materiel Management staff continued to collect surplus supplies in the Department. Surplus supplies were sorted and made available for reuse within the Department. Goods that were surplus to the Department's needs were disposed of either through GCSurplus or were donated to registered charities.

By March 31, 2014, 7.5% of Finance employees will be members of the Finance Green Citizenship Network
Performance Measure Performance Status
Percentage of employees who are members of the Finance Green Citizenship Network 2.5%

Strategies and/or Comments

The Department's Green Citizenship Network promotes environmental stewardship and sustainable practices within the Department. During Environment Week, the Department hosted an “Enviro Fair.” Environment-themed kiosks were set up at L'Esplanade Laurier to promote awareness of environmental initiatives and products for personal and business use. The Green Citizenship Network was also promoted. In addition, the Department used its intranet site to promote grassroots action during Environment Week, Earth Day and Earth Hour. The move into a new building at 90 Elgin Street in 2014–15 will bring opportunities to promote and increase employee participation in environmental initiatives.

5. Additional Departmental Sustainable Development Activities and Initiatives

The Department of Finance Canada's vision for sustainable development—"economic and fiscal policy frameworks and decisions that promote equity and enhance the economic, social and environmental well-being of current and future generations"—is consistent with its mandate to foster a strong economy. The Department's most important contribution to sustainable development lies in the development of advice and policies that ensure fiscal sustainability, contribute to a high standard of living for future generations, and help build strong social foundations. Through its work relating to tax policy and financial sector policy and in its central agency role, the Department can contribute to efforts to integrate sustainable development considerations into policy making. In addition, the Department can set an example for other organizations through a commitment to sustainable development in its operations.

The Department has established several goals, supplementary to those included in the FSDS, which focus on key areas where it can contribute to sustainable development. The Department has focused on making specific commitments in areas relating to its core mandate where it is the lead federal department or has a distinct role in areas where other departments have the policy lead. Each goal is accompanied by a set of objectives and commitments the Department has made toward meeting those objectives.

Goal 1: Fiscal Sustainability and a High Standard of Living for Future Generations
Objectives Targets Results Achieved Linkage to Program Alignment Architecture
1a: Promote fiscal sustainability. 1a.1 Return to balanced budgets and ensure the federal debt-to-GDP ratio is back on a downward path. The plan to return to balanced budgets in 2015 is on track. The deficit has been reduced from $55.6 billion in 2009–10 to $5.2 billion in 2013–14 and a surplus is expected in 2015–16. Initiatives that have helped achieved this result include targeted departmental spending reductions, a government-wide operating budget freeze, and better alignment of federal employee compensation with that offered by other public and private sector employers. These spending reduction measures have been augmented by initiatives designed to protect and improve the integrity, fairness and neutrality of the tax system.

These actions are expected to put the debt-to-GDP ratio on a downward path that will achieve the Government of Canada's commitment to reduce the federal debt-to-GDP ratio to 25 per cent by 2021.

As part of its latest fall Update of Economic and Fiscal Projections, the Department presented an update of its long-term fiscal sustainability analysis. This analysis confirmed that recent government actions would, under reasonable assumptions, be sufficient to ensure the long-term sustainability of federal public finances.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.2: Economic and Fiscal Policy, Planning, and Forecasting
1b: Monitor long-run economic and fiscal issues and prospects. 1b.1 Understand the long-run economic and fiscal implications of ongoing domestic and global developments. The Department of Finance Canada continued to regularly monitor and forecast economic and fiscal performance both in Canada and other countries; conduct private sector surveys of the Canadian economic outlook; and undertake analytical research on a range of topics related to the performance of the Canadian economy, the standard of living, productivity and the challenges associated with population aging. Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.2: Economic and Fiscal Policy, Planning, and Forecasting
  1b.2 Show leadership in discussions on the global economy and promote sustainable growth around the world. Through the Department of Finance Canada, Canada continued to co‑chair the Working Group on the G20 Framework for Strong, Sustainable, and Balanced Growth—an international leadership role it has shared with India since 2009.

As part of Canada’s G20 commitments, the Department is preparing a comprehensive Growth Strategy that will help create jobs and increase growth in Canada. This strategy will be finalized for the 2014 G20 Leaders Summit in Brisbane, Australia.

The Department continued to support Canada’s leadership role in promoting global financial and economic stability, while building a durable foundation to support jobs and growth both in Canada and abroad.

The Department, along with the Bank of Canada and the Office of the Superintendent of Financial Institutions Canada, continued to represent Canada at the Financial Stability Board and advocated for Canadian positions on key issues, including the implementation of international standards, the policy framework for systemically important financial institutions, key attributes of effective resolution regimes, and improvements to the resilience of financial market infrastructure.  
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.6: International Trade and Finance
1c: Develop and support policies and measures that promote the long-run sustainability of Canada’s economy. 1c.1 Provide analysis and advice to the Minister in support of a tax system that raises revenues in an economically efficient, fair and simple manner that is conducive to economic growth and improved standards of living. The Department of Finance Canada provided analysis and advice to support the announcement of tax measures in Economic Action Plan 2014 that contribute to the government's agenda to support economic growth and an improved standard of living, for example:
  • Reducing the tax compliance burden through measures such as revising remittance thresholds for employer source deductions, and streamlining the application and notice process for the Goods and Services Tax / Harmonized Sales Tax (GST/HST) Credit;
  • Improving the integrity of the tax system through several measures, including a package of measures to address international aggressive tax avoidance. These measures include ensuring that financial institutions cannot avoid paying Canadian tax through the use of certain insurance arrangements involving their foreign affiliates, and ensuring that Canadian taxpayers that are not part of a Canadian financial institution group cannot avoid Canadian tax by treating their foreign affiliates as financial institutions; 
  • Introducing a number of measures to strengthen tax compliance.  This includes giving the Minister of National Revenue the discretionary authority to register and assign a GST/HST registration number where a person fails to comply with the requirement to register; and
  • Supporting families and communities by announcing new tax measures, such as increasing the Adoption Expense Tax Credit, expanding health-related tax relief under the GST/HST and income tax systems to better reflect the health care needs of Canadians, and doubling the carry‑forward period for donations of ecologically sensitive land.
  The Department of Finance Canada has contributed to the signing of tax information exchange agreements with other countries to fight international tax evasion. During 2013–14, Canada signed new tax information exchange agreements with Bahrain, the British Virgin Islands and Brunei. Of particular note, in February 2014, Canada signed an intergovernmental agreement with the United States for the enhanced exchange of tax information under the Canada-U.S. Tax Convention. Canada also ratified the Convention on Mutual Administrative Assistance in Tax Matters.

In addition, the Department of Finance Canada released the 2013 edition of the Tax Expenditures and Evaluations report. The report provides estimates and projections of tax expenditures related to personal and corporate income taxes and the GST. The report also includes a statistical perspective on flow-through shares and provides an overview of the taxation of small businesses in Canada. 
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.1: Taxation
  1c.2 Support financial stability and maintain the safety and soundness of the financial system. The Department of Finance Canada implemented a number of measures to promote a stable, efficient and competitive financial sector and ensure that domestic financial markets function well.

The Department made significant progress in a number of priority financial sector areas, including support of progress internationally and domestically on implementing G20 commitments related to financial stability—notably, ending too-big-to fail, improving over-the-counter derivative clearing, and building resilient financial institutions.

The Department conducted high-quality research and analysis and evaluated policy proposals related to a variety of issues, including means to improve market discipline in, and reduce taxpayer exposure to, the housing sector; the establishment of a bail-in regime to support the recapitalization of a non‑viable bank; the governance of the payments system; and measures to support the growth of smaller institutions.

The Department implemented measures to improve market discipline in, and reduce taxpayer exposure to, the housing sector, including the introduction of guarantee fees that Canadian Mortgage and Housing Corporation (CMHC) will be required to pay to the government to compensate for mortgage insurance risks, and a reduction in the amount of new guarantees that CMHC is authorized to provide under its 2014 securitization programs.

The Department also supported the government’s collaborative efforts with the governments of British Columbia and Ontario to jointly establish a Cooperative Capital Markets Regulatory System.

The Department also worked on legislative and regulatory proposals to reinforce the stability of the financial sector and strengthen Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime, support retirement savings, and protect Canadian consumers.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.5: Financial Sector Policy

 

Goal 2: Strong Social Foundations
Objectives Targets Results Achieved Linkage to Program Alignment Architecture
2a: Ensure stable and predictable funding for health and social programs. 2a.1 Provide timely and accurate payment of Canada Health Transfer (CHT) and Canada Social Transfer (CST) amounts. The Department of Finance Canada continued to provide timely, accurate payments of CHT and CST amounts to provinces and territories.

In addition to growing funding for the CHT and CST, $56 million was provided through one-time payments to ensure that provinces were protected from any decline in their total transfers (CHT, CST and Equalization) in 2013-14, in recognition of the short-term challenges faced by provinces as Canada emerged from the global recession.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.4: Federal-Provincial Relations and Social Policy
2b: Reduce fiscal disparities through Equalization and Territorial Formula Financing programs. 2b.1 Address fiscal disparities with timely and accurate payment of Equalization and Territorial Formula Financing (TFF) transfer amounts. The Department of Finance Canada continued to provide timely, accurate payments of Equalization amounts to Equalization-receiving provinces and Territorial Formula Financing (TFF) amounts to territories.
The Department also completed the legislative renewal of the Equalization and the TFF programs, and implemented these changes in the determination of Equalization and TFF payments for 2014–15.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.4: Federal-Provincial Relations and Social Policy
2c: Ensure the sustainability of the retirement income system. 2c.1 Implement legislative and regulatory changes resulting from the 2010−2012 Triennial Review of the Canada Pension Plan (CPP). As part of the 2010−2012 Triennial Review, Finance Ministers agreed to a number of technical amendments to the CPP legislation and to the CPP Investment Board regulations. The amendments were enacted as part of the Jobs and Growth Act 2012, which received Royal Assent on December 14, 2012.  Some of the amendments required the formal approval of the provinces (Orders in Council from at least two-thirds of the provinces having in the aggregate not less than two-thirds of the population).  This consent has been obtained and the amendments will be brought into force at the earliest opportunity.    Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.4: Federal-Provincial Relations and Social Policy
  2c.2 Start work on the 2013−2015 Canada Pension Plan Triennial Review (to be completed by 2015). Department of Finance Canada officials have undertaken background work to support the 2013-2015 Triennial Review, consistent with the Economic Action Plan 2012 commitment to review the impact of the increase in the age of eligibility for the Old Age Security program on CPP survivor and disability benefits. Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.4: Federal-Provincial Relations and Social Policy
  2c.3 Continue to work with provinces and territories to identify ways to help Canadians save more effectively for retirement. The Department of Finance Canada encouraged provinces and territories to pass enabling legislation for Pooled Registered Pension Plans in order to provide a new, accessible, large-scale and low-cost pension option to employers, employees and the self-employed.

The Department moved forward on a key recommendation of the Task Force on Financial Literacy and, in April 2014, appointed the first Financial Literacy Leader. The Financial Literacy Leader will exercise national leadership and will work with partners from the federal, provincial, private and non-profit sectors to strengthen the financial literacy of Canadians.

Consistent with directions from Finance Ministers at their December 2012 meeting, Department of Finance Canada officials worked with provincial and territorial officials, as well as with other federal departments, to prepare analysis on options for a modest CPP expansion, including options for economic triggers that would ensure that an increase in contributions would not negatively impact the economic recovery.  This work was presented to the Finance Ministers at their December 2013 meeting.   
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.5: Financial Sector Policy

Sub-Program 1.1.4: Federal-Provincial Relations and Social Policy

 

Goal 3: Integrating Sustainable Development Considerations into Policy Making
Objectives Targets Results Achieved Linkage to Program Alignment Architecture
3a: Evaluate the potential for the use of economic instruments as a policy tool for addressing environmental issues. 3a.1 Evaluate potential changes to the tax system that could contribute to the Government’s environmental objectives, including tax proposals received from stakeholders. The Department of Finance Canada continued to evaluate and research proposals concerning environment-related tax measures in consultation with other government departments and stakeholders, including taxpayers, industry associations and environmental organizations.

Analysis conducted included work supporting the announcement in Economic Action Plan 2014 of an expansion of the accelerated capital cost allowance (CCA) for clean energy generation equipment under Class 43.2 to include water-current energy equipment and a broader range of equipment used to gasify eligible waste.

In addition, Economic Action Plan 2014 announced the doubling of the carry‑forward period for donations of ecologically sensitive land to 10 years, as recommended by the House of Commons Standing Committee on Finance in its February 2013 report, Tax Incentives for Charitable Giving in Canada.

The Department supported the government in finalizing legislation implementing Economic Action Plan 2013 measures to phase out the accelerated CCA for capital assets used in new mines and major mine expansions and to reduce the rate at which pre‑production mine development expenses may be deducted for tax purposes. These measures helped support the G20 commitment to rationalize and phase out over the medium term inefficient fossil fuel subsidies. The Department also supported implementation of the Economic Action Plan 2013 measure to expand the accelerated CCA under Class 43.2 to include a broader range of biogas production equipment and equipment used to treat gases from waste.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.1: Taxation
3b: Increased knowledge and awareness of environmental and broader sustainable development issues within the department. 3b.1 Organize at least one speaker annually on an issue related to sustainable development. In 2013–14, Department of Finance Canada employees had the opportunity to attend lectures as part of the Department's regular Speaker Series and the Thomas K. Shoyama Annual Public Policy Lecture.

In May 2014, Mr. Gary Doer, Ambassador of Canada to the United States, gave a presentation to departmental employees on “The View From Washington.” Ambassador Doer’s presentation focused on a number of issues, including Canada-U.S. cooperation on trade, energy, water protection and climate change.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.3: Economic Development Policy
  3b.2 Conduct research and analysis on environmental and natural resource issues. The Department has continued efforts to improve its environmental and natural resource knowledge base by conducting research and analysis. Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.3: Economic Development Policy  
3c: Effective implementation of the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals. 3c.1 Organize an information session for Department of Finance Canada employees on Strategic Environmental Assessment (SEA). The Department of Finance Canada held its annual training session on Strategic Environmental Assessments. Presentations were given by the Resources, Energy and Environment Section, Economic Development and Corporate Finance Branch, Department of Finance Canada and the Canadian Environmental Assessment Agency.

A separate briefing on Strategic Environmental Assessments was also provided to departmental branch coordinators for the Economic Action Plan 2014 process.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.3: Economic Development Policy
3d: Support implementation of Canada's international financing commitment under the Copenhagen Accord. 3d.1 Deliver $350 million in climate change-related financing through the International Finance Corporation. The Department of Finance Canada is working with the International Finance Corporation (IFC) to implement the IFC-Canada Climate Change Program. The program promotes private sector financing of clean energy projects through the use of concessional funds to catalyze investments in renewable low-carbon technologies. As of March 2014, the program had funded 12 investment projects and 13 advisory projects. The investment projects received US$100 million in program funds that have leveraged US$377 million from IFC’s core funding, and US$474 million in private sector investment in developing countries.

In addition to its concessional finance portfolio, the program committed US$76.5 million to the IFC Catalyst Fund in January 2013. The Catalyst Fund is a fund of funds managed by the IFC Asset Management Company to provide growth capital to companies whose business activities contribute to addressing climate change. As of March 2014, the Catalyst Fund had raised US$397 million from six investors (including Canada) and made commitments to four investee funds.

The Department of Finance Canada reports on this initiative through existing Government of Canada reporting on Official Development Assistance, International Climate Change efforts, and on the operations of the Bretton Woods and Related Agreements Act.
Program 1.1: Economic and Fiscal Policy Framework

Sub-Program 1.1.6: International Trade and Finance
6. Sustainable Development Management System

The Department of Finance Canada is the Government of Canada's primary source of analysis and advice on the broad economic and financial affairs of Canada. In addition to preparing the budget, the Department plays an important role in the development and implementation of government policy. As a central agency, the Department provides analysis and advice on the economic merit and fiscal implications of policy and program proposals developed by other government departments. In addition, Department of Finance Canada officials serve as members of a broader team of federal officials that review options for, and the implications of, proposals that are presented to Cabinet. Policy development also takes place within the Department on those issues and areas of responsibility that fall within the Department's own mandate, including tax and tariff legislation, major federal transfers to provinces and territories, the legislative and regulatory framework for the financial sector, and representation of Canada within international financial institutions.

As a policy-oriented department, the Department of Finance Canada has limited direct involvement in delivering programs and services to Canadians. Nevertheless, the Department has a clear role to play in contributing to the government's sustainable development efforts. Sustainable development requires the long-term sustainability of the economy, social programs, the environment and natural resources. This requirement is consistent with the basic principle of sustainability as set out in the Federal Sustainable Development Act. Although the Department's mandate is most evidently linked to the economic and social pillars of sustainable development, the Department continuously strives to recognize the implications of its analysis and advice on all aspects of sustainable development, and to take into account the linkages between economic, social and environmental sustainability. In some cases, economic, social and environmental goals can be advanced together. In other cases, trade-offs are needed, but with informed decision making and choices that reflect careful deliberation.

Economic growth is an important aim of sustainable development because it contributes to a high quality of life for Canadians, provides the fiscal capacity for governments to address environmental and social issues, and ensures that the Canadian economy remains strong in the face of long-term challenges, such as an aging population and globalization. For example, population aging will bring future economic and fiscal challenges and put downward pressure on growth in living standards. By taking action now to ensure long-run fiscal sustainability, and by identifying effective policies that encourage investment in the drivers of economic growth, such as human capital, physical capital and innovation, the government can help to ensure a high standard of living for future generations. The Department of Finance Canada addresses this challenge through responsible fiscal management, economic policy advice, sound framework policies, such as those related to taxation and the financial sector, and ongoing analysis of Canada's current and long-run economic and fiscal position.

The Department believes that safe, healthy and caring communities that provide all citizens with equal access to opportunities are vital to the creation of a strong, competitive, vibrant and sustainable economy and society. Sustainability in social policy is achieved by working with partners in other departments to identify policies that support investments in people and their communities; working in cooperation and collaboration with other orders of government, which often have the primary responsibility for these policy areas, to ensure policy consistency and, where appropriate, stable and predictable funding; and developing specific policies that support this goal (such as tax and financial sector policies).

Management and accountability

The General Director of the Economic Development and Corporate Finance Branch is the Department of Finance Canada's sustainable development champion, and is responsible for coordinating activities and reporting with respect to the Department's contributions to the FSDS and sustainable development more broadly.

The Resources, Energy and Environment Section of the Economic Development and Corporate Finance Branch, under the general direction of the Department's sustainable development champion, coordinates departmental sustainable development management, policy and activities. The main coordination vehicle is the Sustainable Development Working Group (SDWG), which consists of officials from all branches and is chaired by the Chief of the Resources, Energy and Environment Section. The SDWG is responsible for coordinating the implementation of commitments related to sustainable development within the various branches of the Department, and contributes to reporting on plans and progress related to these commitments.

FSDS reporting

Environment Canada's Sustainable Development Office is responsible for preparing government-wide FSDS Progress Reports at least once every three years. The first report was completed in April 2011 and tabled in Parliament in June 2011, and a second report was tabled in February 2013. These reports offer an opportunity to assess progress in implementing the FSDS, to re-evaluate FSDS goals and targets, and to benefit from lessons learned. The Department of Finance Canada contributes to government-wide progress reporting through its participation in the FSDS Assistant Deputy Ministers Committee and the Directors General Committee, which are co-chaired by Environment Canada and Public Works and Government Services Canada.

The Department of Finance Canada evaluates its own contribution towards sustainable development, including activities and initiatives supplementary to those captured in the FSDS, as part of the annual Report on Plans and Priorities and Departmental Performance Report processes. The Department seeks other opportunities to report on progress in meeting its sustainable development objectives to the sustainable development champion and the Departmental Coordinating Committee, a senior committee comprising general directors from each branch within the Department and other senior officials, as required.

7. Strategic Environmental Assessment

During the 2013–14 reporting cycle, the Department of Finance Canada considered the environmental effects of initiatives subject to the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, as part of its decision-making processes. Through the strategic environmental assessment (SEA) process, some proposals were found to have possible positive or negative effects on the 2013–16 FSDS goals and targets in Themes I – Addressing Climate Change and Air Quality; II – Maintaining Water Quality and Availability; and III – Protecting Nature and Canadians.

Additional information on the results of SEAs is available on the Department's public statements website.

Horizontal Initiatives

Name of horizontal initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime

Name of lead department(s): Department of Finance Canada

Lead department PAA Program: Economic and Fiscal Policy Framework

Start date: June 2000

End date: Ongoing

Total federal funding allocation (from start date to end date): $742.6  millioni

Description of the horizontal initiative (including funding agreement): Canada's AML/ATF Regime was formally established in 2000 as the National Initiative to Combat Money Laundering (NICML), as part of the federal government's ongoing effort to combat money laundering in Canada. Legislation adopted that year, the Proceeds of Crime (Money Laundering) Act, created a mandatory reporting system for suspicious financial transactions, large cross-border currency transfers, and certain prescribed transactions. The legislation also established the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to collect and analyze financial transaction reports and to disclose pertinent information to law enforcement and intelligence agencies. In December 2001, the Proceeds of Crime (Money Laundering) Act was amended to include measures to fight terrorist financing activities, and was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

The NICML was expanded and its name formally changed to Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime. In December 2006, Bill C-25 amended the PCMLTFA to further align Canada's legislation with the international AML/ATF standards established by the Financial Action Task Force (FATF) and to respond to areas of domestic risk. The amendments included enhanced client identification requirements, the creation of a registration regime for money services businesses, and the establishment of an administrative monetary penalties regime to deal with lesser infractions of the PCMLTFA.

Shared outcome(s): To detect and deter money laundering and the financing of terrorist activities and to facilitate the investigation and prosecution of money laundering and terrorist financing offences.

Governance structure(s): Canada's AML/ATF Regime is a horizontal initiative composed of both funded and non-funded partners. The funded partners are the Department of Finance Canada, the Department of Justice Canada, the Public Prosecution Service of Canada (PPSC), FINTRAC, the Canada Border Services Agency (CBSA), the Canada Revenue Agency (CRA), the Canadian Security Intelligence Service, and the Royal Canadian Mounted Police (RCMP); the non-funded partners are Public Safety Canada, the Office of the Superintendent of Financial Institutions (OSFI), and Foreign Affairs, Trade and Development Canada. An interdepartmental Assistant Deputy Minister-level group and working group, consisting of all partners and led by the Department of Finance Canada, has been established to direct and coordinate the government's efforts to combat money laundering and terrorist financing activities. In addition, the Department also chairs a Public/Private Sector Advisory Committee, a broad-based advisory committee composed of public and private sector representatives who provide general guidance for Canada's AML/ATF Regime.

Performance highlights: The Department of Finance Canada supported the Government's commitments to Canada's AML/ATF Regime, including the final publication, in January 2013 in Part II of the Canada Gazette, of amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations. These amendments, which pertain to ascertaining identity, came into force in February 2014.

The PPSC dealt with a number of new AML/ATF Regime-related charges, including 7,121 related to the possession of proceeds of crime and 66 related to money laundering under the Criminal Code, and 16 charges under the PCMLTFA.

FINTRAC produced 1,143 case disclosures of financial intelligence.

The CRA completed 30 audits based on information in FINTRAC disclosures, with total federal income taxes and Goods and Services Tax or Harmonized Sales Tax reassessed in the amount of $3,558,129.

Regarding the CRA's anti-terrorist financing responsibilities, the CRA's Charities Directorate revoked the registration of one charity. In addition, 22 applicant organizations withdrew or abandoned their applications following examination by the Directorate. The Charities Directorate also co-led an international typologies project on behalf of the FATF, resulting in the publication of the report Risk of Terrorist Abuse in Non-Profit Organisations.

The CBSA performed 1,398 seizures under the PCMLTFA, totalling over $23 million.

The RCMP completed the implementation of a new Federal Policing model, which provides greater accountability through national oversight and governance for all priority investigations involving money laundering, terrorist financing and related predicate offences. As part of the oversight, Federal Policing Criminal Operations (FPCO) worked closely with the Canadian security and intelligence community and RCMP divisions across Canada to ensure full and comprehensive knowledge of ongoing priorities relating to money laundering and terrorist financing investigations, including their intricacies and inherent challenges. The approach involves:

Money Laundering Investigations

Strategically located in high-risk centres, RCMP Money Laundering investigators detect and deter money laundering activities. Investigators monitor and assess money laundering intelligence in order to develop proactive investigations. Partnerships with domestic and international law enforcement and regulatory agencies are developed and leveraged for a holistic enforcement and prevention approach.

Terrorist Financing Investigations

Through the gathering and analysis of financial intelligence, the FPCO focuses on converting financial criminal intelligence into proactive investigations for the Integrated National Security Enforcement Teams and National Security Enforcement Sections, thus enhancing the ability to detect and deter terrorist financing activities. The FPCO continues to work closely with domestic partners to further criminal investigations of terrorist financing and participates and contributes to international forums such as the FATF and international law-enforcement working groups on terrorist financing.

Being Strategically Focused

Federal Policing Services works with national and international partners to combat money laundering and terrorist financing by actively participating in the FATF and the Asia Pacific Group on Money Laundering (APGML). The FATF and the APGML ensure that their member countries adhere to the FATF's AML/ATF standards. Federal Policing Services works toward adherence to the new FATF international standards for combatting money laundering and terrorist financing and contributes to FATF and APGML law enforcement expertise. The contribution is an additional indication of the RCMP's commitment to fighting money laundering and terrorist financing at the national and international levels, ensuring that Canada and other APGML and ATF member countries have an effective AML/ATF regime, which includes a robust law enforcement agency that can investigate money laundering, terrorist financing and related predicate offences.

Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime
        2013–14
($ millions)
       
Federal partners PAA Programs Contributing activities/programs Total allocation (from start date to end date)
($ millions)
Planned spending Actual spending Expected results Contributing activity/ program results
(using specific indicators)
Department of Finance Canada Financial Sector Policy Policy Development and Oversight of Anti-Money Laundering and Anti-Terrorist Financing Regime $3.9 $0.3 $0.3 The Department of Finance Canada will continue its effective oversight of Canada's AML/ATF Regime. The Department will also focus on the following areas:
  • Participating in strategic domestic and international policy development activities that support the government's commitments to the Regime, including continuing work with respect to potential policy changes outlined in the Department's December 2011 consultation paper entitled “Strengthening Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime;”
  • Assessing the findings of the five-year Parliamentary Review of the PCMLTFA;
  • Leading an interdepartmental working group to better assess Canada's money laundering and terrorist financing risks;
  • Heading the Canadian delegation to participate as an active member in the FATF and the APGML, as a Cooperative and Supporting Nation to the Caribbean Financial Action Task Force, and as an observer on the “GAFISUD,” the Financial Action Task Force body of South America Against Money Laundering; and
  • Continued participation in horizontal initiatives related to national security, led by Public Safety Canada.
The Department of Finance Canada continued its effective oversight of Canada's AML/ATF Regime. The Department:
  • Participated in strategic domestic and international policy development activities that support the government's commitments to the AML/ATF Regime, including the tabling of amendments to the PCMLTFA in the Economic Action Plan 2014 Act, No. 1, to strengthen the PCMLTFA. These amendments addressed strengthening customer due diligence standards; closing gaps; improving compliance, monitoring and enforcement; strengthening information sharing; and implementing countermeasures;
  • Assessed the findings of the five-year Parliamentary Review of the PCMLTFA and fully considered these findings in the development of proposed amendments pursued through Economic Action Plan 2014;
  • Led an interdepartmental working group that is developing a comprehensive, whole-of-government approach to better identify, assess and understand Canada's money laundering and terrorist financing risks. The working group made important progress in developing the risk assessment methodology and in preparing the content that will be used to inform the risk assessment;
  • Led the Canadian delegation at the Plenary meetings of the FATF and regional bodies. Canada was removed from the FATF mutual evaluation follow-up process as a result of the significant action it has taken in recent years to address the deficiencies identified in its 2008 mutual evaluation report.  Canada played a critical role in helping to finalize the procedures that will support the next round of FATF mutual evaluations. Canada also actively contributed to the peer reviews of other countries, including high-risk jurisdictions that have strategic deficiencies in their AML/AFT regimes. Canada’s contribution helped to strengthen the global AML/ATF network by imposing peer pressure on countries to make the necessary legal and operational improvements to strengthen their regimes to better combat money laundering and terrorist financing.   
  • Continued to participate in Public Safety-led horizontal initiatives related to national security, including the development and implementation of the counter-terrorism strategy and to the process that lists terrorist entities in support of countering terrorism and its financing.
Department of Justice Canada Justice policies, laws and programs Criminal Law Policy Section (CLPS) and International Assistance Group (IAG) $7.4 $0.1 $0.1 The IAG and the CLPS (which is part of the Justice Litigation Branch) play a significant role in the AML/ATF Regime. For 2013–14, it is anticipated that the IAG and the CLPS will use the resources they receive to carry out work related to the FATF, including attending FATF-related international meetings and providing advice on the FATF to Canadian Regime partners. These tasks may include support and attendance of the meetings of the subgroups of the FATF, for example, the Working Group on Evaluation and Implementation, and FATF-Style Regional Bodies, including the Caribbean Financial Action Task Force, the APGML and the GAFISUD. Resources will also be allocated to ensure that the CLPS's continued involvement in policy development relating to money laundering and terrorist financing. Finally, the Human Rights Law Section will continue to participate, as required, with respect to constitutional issues raised in relation to proposed amendments or in the course of prosecutions. The Department of Justice Canada, including the CLPS and particularly the Criminal sector of the Litigation Branch, continued to do operational work involving requests for Mutual Legal Assistance and extradition in support of Canada's AML/ATF Regime. Counsel continued to provide legal advice to the Department of Finance Canada and other AML/ATF Regime partners, and attended a number of FATF meetings. The Department of Justice Canada also played a role in the self-assessment process for the FATF Canada Mutual Assessment. The AML/ATF funds earmarked for the Department of Justice Canada were used solely for Regime-related purposes.
PPSC Drug, Criminal Code and terrorism prosecution program Drug, Criminal Code and terrorism prosecution program $14.8 $2.1 $5.3 For 2013–14, the PPSC will continue to provide legal advice and support to the RCMP and other law enforcement agencies over the course of investigations related to the proceeds of crime, money laundering and terrorist financing provisions of the Criminal Code as well as the PCMLTFA, and to undertake prosecutions that arise out of those investigations. In addition, the PPSC will continue to provide Regime-related training to law enforcement personnel and prosecutors, and to support policy development and coordination. Finally, the PPSC will support the work of the FATF, as required.

The PPSC dealt with a number of new AML/ATF Regime-related charges, including 7,121 related to the possession of proceeds of crime and 66 related to money laundering under the Criminal Code, and 16 charges under the PCMLTFA. There were no charges related to the terrorism financing provisions of the Criminal Code during 2013–14.

Provision of pre-charge legal advice was recorded by in-house counsel in 4,475 (6 per cent) of the possession of proceeds of crime files, 22 (57 per cent) of the money laundering files, and 5 (71 per cent) of the PCMLTFA files that these new charges represent.* 

PPSC counsel also provided both formal and ad hoc training to law enforcement personnel during investigations. Resources were dedicated to policy development and coordination to ensure consistency in prosecution-related services across all regions. Finally, the PPSC produced data for the FATF's upcoming evaluation of partner regimes.

FINTRAC** Financial Intelligence Program Financial Intelligence Program $447.9 $18.9 $18.1

FINTRAC's Financial Intelligence Program produces trusted and valued financial intelligence products, including tactical case disclosures on suspected money laundering, terrorist activity financing and other threats to the security of Canada, as well as strategic intelligence such as money laundering and terrorist financing trends reports, country and group-based financial intelligence assessments, and vulnerability assessments of emerging financial technologies or services. The program's products are relied on and sought after by Canadian law enforcement at the federal, provincial and municipal levels, by counterpart agencies and domestic and international intelligence bodies, and by policy and decision makers working to identify emerging issues and vulnerabilities in the AML/ATF Regime.

In 2013–14, FINTRAC will continue to provide its partners, policy makers and other interested parties with timely and relevant financial intelligence products that contribute to the public safety of Canadians, and support efforts to disrupt the ability of criminals and terrorist groups that seek to abuse Canada's financial system while reducing the profit incentive of crime.

FINTRAC produced 1,143 case disclosures of financial intelligence; of these, 845 were related to money laundering, 234 were related to terrorist activity financing and other threats to the security of Canada, and 64 were related to all three areas.

During the year, 72 per cent of case disclosures were initiated by voluntary information records (VIRs). VIRs are used by FINTRAC's investigative and intelligence partners to signal priority investigations where financial intelligence could make an important contribution. A total of 1,320 VIRs were received by FINTRAC.

FINTRAC also provided assessments, briefs and other strategic intelligence to the national security community, domestic law enforcement and other regime partners in support of Government of Canada intelligence priorities, criminal intelligence needs, the 2013 Public Report on the Terrorist Threat to Canada, Canada's Counter-Terrorism Strategy, and the development of a National Risk Assessment for Canada’s AML/ATF Regime.

  Compliance Program Compliance Program   $18.9 $18.1

As part of Canada's AML/ATF Regime, FINTRAC seeks to counter money laundering and terrorist financing by improving the compliance behaviours of reporting entities with obligations under Part 1 of the PCMLTFA and the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, which include obligations for reporting, record keeping, identity verification and other requirements.

For 2013–14, FINTRAC will continue to detect and address non-compliance with legislative obligations among reporting entities using a risk-based approach where compliance activity is undertaken in a manner that is commensurate with the risk of non-compliance.  FINTRAC will also continue to support reporting entities and ensure they receive timely and accurate responses to their inquiries.

Compliance examinations continued to be a key activity in assessing and enforcing compliance and ensuring high-quality reports from reporting entities. January 2014 marked the 10th anniversary of FINTRAC's first compliance examination. During the year, FINTRAC conducted 1,126 examinations, bringing the total number of compliance examinations to 6,082 since the program's inception.

Where cases of significant and very significant non-compliance were identified following an examination, tailored, proportionate and timely enforcement actions were taken. These actions could include either a follow-up examination to assess improvement in the level of compliance or the issuance of an administrative monetary penalty (AMP) to encourage change in non-compliant behaviour. In 2013–14, FINTRAC issued 16 AMPs. Since the AMP Regulations came into force in December 2008, FINTRAC has issued 57 penalties, totalling over $4.7 million.

FINTRAC's Compliance Program also responded to numerous enquiries on a broad range of issues, including reporting obligations, access to reporting systems, and the registration of money services businesses. Throughout the year, FINTRAC responded to 5,075 external enquiries and 298 policy interpretation requests to clarify FINTRAC's expectation for the application of the appropriate sections of the PCMLTFA and its Regulations.

  Internal Services Internal Services   $6.7 $6.9 Not applicable

Internal Services provided input to the Department of Finance Canada for amendments to the PCMLTFA; the proposed amendments received royal assent in June 2014.

Internal Services continued to participate in the Department of Finance Canada-led Mutual Evaluation Coordination Working Group, preparing for the mutual evaluation of Canada’s AML/ATF Regime by the FATF in 2015. Key activities included contributions of evidence to demonstrate the effectiveness of Canada's AML/ATF Regime.

Internal Services supported the work of FINTRAC's Financial Intelligence and Compliance Programs by providing key corporate services.

RCMP Federal Policing Money Laundering Units $94.2 $7.0 $4.2 Strategically located in high-risk locations, RCMP Money Laundering investigators will continue to detect and deter money laundering activities. Investigators will continue to monitor and assess money laundering intelligence for the purpose of development into proactive investigations. Partnerships with domestic working partners, international law enforcement and regulatory entities will continue to be developed and leveraged for a holistic enforcement and prevention approach.

The RCMP completed the implementation of a new Federal Policing model where criminal intelligence resources focus on National Tactical Enforcement Priorities investigations, as well as other federal policing priority investigations. These investigations are of national interest and relate to threats presented by individuals or groups involved in money laundering, terrorist financing and other criminality. Financial criminal intelligence is a key factor in the new policing model. The contribution of criminal intelligence to these types of investigations provides the criminal intelligence support services in the field units.

Successful RCMP anti-money laundering investigations included the following:

a. Project ENUTSHELL was an agent-driven investigation started in 2013, targeting two money services businesses (MSBs) (Pacific Cambio Coin & Currency and Safe Benyamin Fortune Jewellers Ltd). The MSBs were used to facilitate the transnational movement of money on behalf of Mexican Cartel groups and Iranian government officials. On March 18, 2014, the PPSC approved charges against the owner of Pacific Cambio Coin & Currency for failing to provide a Large Cash Transaction Report to FINTRAC and failing to ascertain the identity of a client.

b. Project ORAJA began in 2012 as a result of information received from a pilot project headed by the Canadian Bankers Association. The investigation targeted a multi-faceted Eastern European Criminal Organization (Romanian and Hungarian) committing financial crime and human trafficking in order to fund their criminal organization. Information revealed that millions of dollars had been lost through fraudulent social assistance payments, stolen cheques and bank-related frauds. A November 2013 joint operation (RCMP, Ontario Provincial Police, and CBSA) resulted in the execution of multiple search warrants and the arrest of several individuals. The accused were charged with fraud over $5,000, possession of identity information, and possession of property obtained by crime.

    FPCO $42.6 $5.0 $3.0 Through the gathering and analysis of financial intelligence, the FPCO will focus on converting financial criminal intelligence into proactive investigations for RCMP Divisional Investigative Units, thus enhancing the ability to detect and deter terrorist financing activities. The FPCO will continue to work closely with domestic partners to further criminal investigations of terrorist financing and will participate and contribute to international forums such as the FATF and international law-enforcement working groups on terrorist financing.

he FPCO supported counter-terrorism strategies involving terrorist financing, financial intelligence gathering, investigations and enforcement.

The FPCO submitted 79 Voluntary Information Records to FINTRAC.

The FPCO received approximately 179 terrorist financing-related disclosures from FINTRAC.

The FPCO submitted 17 requests for terrorist-related information to the CRA's Charity Directorate.

The FPCO received 8 requests for information from the CRA's Charity Directorate.

The FPCO continued to provide training to the RCMP and partner agencies. In 2013–14, one ATF course was delivered, in which 29 candidates received training.

The FPCO continued to support the FATF and the APGML. Building on existing partnerships with the lead department (Department of Finance Canada) and its partners, the RCMP participated in five practitioners groups and conferences.

The Department of Finance Canada continued to consult with the FPCO on FATF-related matters, such as international cooperation, information sharing and related projects.

CRA Compliance Programs Branch (CPB) Canada's AML/ATF Regime $30.4 $2.2 $2.2

The CRA is focusing on the following three key areas: participating in committees and initiatives that aim to manage and strengthen Canada's AML/ATF Regime; continuing to enhance operational relationships with FINTRAC and other Regime partners; and conducting analysis related to money laundering and tax avoidance and evasion, which includes conducting compliance action focused on individuals and entities that are participating in money laundering and terrorist financing activities.

In previous years, compliance action on FINTRAC referrals was completed by the Special Enforcement Program (SEP). Because of organizational changes within the CPB, the SEP has been discontinued and this work will now be completed by auditors within the Small and Medium Enterprises Directorate (SMED). The Criminal Investigations Program will continue to receive and analyze all FINTRAC disclosures for intelligence and potential criminal investigations before referring them to the SMED workload development area.

In 2013–14, CPB will continue to process all disclosures from FINTRAC on a priority basis. CPB will thoroughly review all disclosures received from FINTRAC and select for compliance actions those with identifiable tax and collection potential. The projected number of audits will remain at 90 cases, with a projected federal tax recovery of $9,000,000.  Given the complexity of the files received from FINTRAC, the lengthy amount of time required to complete these cases and the organizational changes within CPB, there may be an impact on the number of audits completed in 2013–14. These factors may also potentially impact the federal tax recovery for these cases.

Information will be gathered from the FINTRAC disclosures and resulting compliance actions for intelligence purposes in an effort to identify trends that could positively impact the quality and success of future compliance actions.

The CRA participated in AML/ATF Regime committee meetings as well as in multiple conferences with external law enforcement. The Criminal Investigations Directorate (CID) continued to enhance its operational relationship with FINTRAC through meetings that focused on operational functions and improving the quality of information shared between the two organizations.

During the year, the CID analyzed all FINTRAC disclosures in an effort to identify trends related to tax avoidance and evasion, with an emphasis on international non-compliance. The CID also placed a greater emphasis on sending Voluntary Information Records to FINTRAC for most cases that are reviewed and/or accepted for criminal investigation.

FINTRAC disclosures were reviewed by the CID for potential tax evasion or fraudulent activity. If the disclosure had potential for a criminal investigation, it was referred to one of the six Criminal Investigations Divisions across the country. If the file did not have potential for a criminal investigation, it was forwarded to the SMED or the Offshore Compliance Division for civil compliance actions.

The CID received and reviewed 111 FINTRAC disclosures during 2013–14, which represents a decrease of 23 disclosures compared with the previous year. The majority of these disclosures were referred to the SMED. Of the 111 disclosures, 23 were referred to the CID for review. Four of these disclosures are currently in the preliminary investigation stage for consideration of criminal tax evasion charges.

In 2013–14, the functional responsibility for the FINTRAC audit workload changed within the CRA. In this transitional year, opening audit inventory of FINTRAC files was atypically low. In addition, almost one third of the FINTRAC disclosures received during 2013–14 could not be audited due to unassessed or unfiled tax returns. As a result, the CRA completed 30 audits based on information in FINTRAC disclosures, with total federal income taxes and Goods and Services Tax or Harmonized Sales Tax reassessed in the amount of $3,558,129.

  Charities – Public Safety and Anti-Terrorism Combatting Terrorist Resourcing Through Charities $23.5 $4.1 $4.1 The CRA has responsibility for administering the registration system for charities under the Income Tax Act. The existence of a strong regulatory deterrence against terrorist abuse of charities contributes to suppressing the financing of terrorism in Canada and to protecting and preserving the social cohesion and well-being of Canadians. The regulatory oversight of charities has been strengthened by the enactment of complementary measures under the Charities Registration (Security Information) Act and the PCMLTFA and by changes to the Income Tax Act that authorize broader information sharing between anti-money laundering and anti-terrorist financing agencies. Under these authorities, intelligence provided to the CRA assists in its mandate to protect the integrity of the registration system for charities, and information disclosed by the CRA can be used for investigative purposes. In 2013–14, the CRA will continue to consolidate its capacity to identify and respond to cases involving possible links to terrorism by improving systems to support decisions, refining risk management tools, contributing to the international fight against money laundering and terrorist financing and bringing regulatory actions to the attention of Canadians.

Regarding the CRA's anti-terrorist financing responsibilities, the CRA's Charities Directorate continued its core activities of reviewing applications for charitable registration, monitoring registered charities, carrying out regulatory activities, and exchanging information under legal authorities with Canada's AML/ATF Regime partners.

Specifically, the Directorate:

  • Reviewed 2,864 applications for registered charitable status and conducted detailed examinations of 28 applications;
  • Performed examination-related functions that resulted in the abandonment of 16 applications and the withdrawal of six applications for charitable registration;
  • Revoked the registration of one charity and worked on nine active audits;
  • Received 51 disclosures from, and made 35 disclosures to, Canada's AML/ATF Regime partners.

Internationally, the CRA's Charities Directorate co-led an FATF typologies project that analyzed case studies from numerous countries to identify the risk of terrorist abuse in non-profit organizations. The associated report Risk of Terrorist Abuse in Non-Profit Organisations was adopted by the FATF Plenary.

CBSA Risk Assessment AML/ATF Regime $77.9 $1.5 2.0

Continue to be involved in tactical and strategic analysis and assessments of intelligence related to money laundering and terrorist financing activities.

Participate in joint forces operations with the RCMP and other government departments. Several specific operations exemplify the high level of cooperation between Regime partners and related international agencies. As part of the CBSA's 2012–13 priority of modernizing its business processes, the Agency will shift the focus of outbound currency activities through a risk-management process focusing on high-risk countries. This new approach will ensure the safety and security of Canadians while allowing the CBSA to continue its outbound activities without dedicated teams.

The CBSA provided regular methodological guidance and other risk-oriented, subject-matter expertise toward the creation of the first-ever national risk assessment on money laundering and terrorist financing. The completed risk assessment and its corresponding mitigation plan will entrench the transition away from dedicated outbound currency teams.

The CBSA provided information and intelligence in support of a major law enforcement intelligence probe involving possible misuse of Canada's trade system.

Outbound currency seizures by Border Services Officers (BSOs) increased in 2013–14. BSOs performed 1,398 currency seizures totalling $23,248,858.15, a 20 per cent increase from 2012–13.

  Admissibility Determination AML/ATF Regime   $1.5 1.7

BSOs maintain the responsibility to enforce the physical cross-border reporting obligation, including the examination of baggage and conveyances, and to question and search individuals for unreported or falsely reported currency and monetary instruments.

BSOs continue to seize currency and monetary instruments if they are not reported and are greater than the reporting threshold. Seized non-reported currency and monetary instruments are forfeited with no terms of release when BSOs suspect that the seized currency or monetary instruments are proceeds of crime or funds for use in terrorist financing activities. In all other instances, the seized amount will be returned upon payment of a penalty. BSOs are trained to recognize various monetary instruments and potential instances of non-compliance.

BSOs collected 41,670 Cross-Border Currency and Monetary Instruments Reports from travellers and couriers.

The CBSA and the Canadian Air Transport Security Authority strengthened their working relationship in order to identify possible outbound movements of currency and monetary instruments at Class 1 airports.

  Internal Services AML/ATF Regime   $1.6 $1.4

Provide functional direction to the regions regarding the administration and enforcement of Part 2 of the PCMLTFA.

Provide critical strategic planning, priority setting and coordination for the Cross-Border Currency Reporting (CBCR) Program.

Continue to work closely with other key government departments on matters related to money laundering and terrorist financing.

Continue to be involved in international conferences and workshops that require the presence of cross-border law enforcement expertise.

The CBSA began consultations with other key government departments on matters relating to trade fraud as a conduit for money laundering and terrorist financing activities.

The CBSA continued to participate in the Department of Finance Canada-led Mutual Evaluation Coordination Working Group, preparing for the mutual evaluation of Canada's AML/ATF Regime by the FATF in 2015. Key activities included contributions of evidence to demonstrate the effectiveness of Canada's AML/ATF Regime.

The CBSA conducted a program audit of Cross-Border Currency Reporting operations at Vancouver and Toronto International Airports.

The CBSA provided input to the Department of Finance Canada for amendments to the PCMLTFA; the proposed amendments received royal assent in June 2014.

The CBSA provided functional guidance to the regions regarding the administration and enforcement of Part 2 of the PCMLTFA.

The CBSA provided program and policy guidance to the CBSA Recourse Directorate for cases facing judicial review.

The CBSA provided FINTRAC with electronic and paper copies of all Cross-Border Currency and Monetary Instrument Reports processed by BSOs, as well as currency seizure information.

Total     $742.6*** $69.9 $67.4    
* The number of files against which legal advice was recorded was significantly lower in 2013–14 because of a change in timekeeping protocols.
** FINTRAC's Total Allocation and Planned Spending differ from what was presented in the 2013–14 Report on Plans and Priorities; they have been adjusted to reflect changes to FINTRAC's funding authorities (e.g., transfer to Shared Services Canada as well as changes to Employee Benefit Plan contributions), and include a component for Internal Services. Internal Services spending had previously been included in the Financial Intelligence and Compliance program spending, but has been broken out to provide further transparency and accountability regarding AML/ATF spending.
*** The total amount allocated includes funding for certain partners in Canada’s AML/ATF Regime that are exempt from reporting.

Comments on variances: For the CBSA, actual spending was higher than planned due to continued focus on the program, as a direct result of the successes the regions were having in finding unreported currency, particularly the outbound currency. The budget for Cross-Border Currency Reporting signage was not spent in 2013–14 as CBSA branding has been undergoing a transformation. The budget set aside for the procurement of currency scanners was not spent as Public Works and Government Services Canada was unable to complete the contracting process before the end of 2013–14. The currency scanners were procured and delivered in July 2014.

As noted in Chapter 5 of the 2011 June Status Report of the Auditor General of Canada, the RCMP had to reallocate funding internally from all programs in order to meet the increased demands for National Policing Services. Furthermore, various Federal and Protective policing priorities have created additional requirements to reallocate funding and resources.

Results achieved by non-federal partners (if applicable): Not applicable

Contact information:

Ian Wright
Chief, Financial Crimes – Domestic
Phone: 613-369-3853

Internal Audits and Evaluations

Internal Audits (current reporting period)
Name of internal audit Internal audit type Status Completion date
Audit of the Control Framework for Domestic Debt Internal Control Completed December 2013
Audit of the Control Framework for Foreign Debt Internal Control Completed December 2013
Audit of Travel and Hospitality Internal Control Completed December 2013
Audit of Financial Commitments to the World Bank Internal Control Completed December 2013
Evaluations (current reporting period)
Name of evaluation Program Status Completion date
Evaluation of the Crown Borrowing Program Treasury and Financial Affairs Completed May 2013
Evaluation of the Research and Policy Initiatives Assistance Program Transfer and Taxation Payment Programs Completed August 2013
Evaluation of the Toronto Waterfront Revitalization Initiative Transfer and Taxation Payment Programs Completed December 2013
Evaluation of the Harbourfront Centre Funding Program Harbourfront Centre Funding Program In progress December 2014
Evaluation of the Retail Debt Program Treasury and Financial Affairs In progress December 2014

Response to Parliamentary Committees and External Audits

Response to parliamentary committees
Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development)
External audits conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages

Sources of Respendable and Non-Respendable Revenue

Respendable revenue consists of certain non-tax revenues where authorities from Parliament have been received to finance directly related expenditures.

Respendable Revenue
      2013–14 ($ millions)
     
Program 2011–12 Actual
($ millions)
2012–13 Actual
($ millions)
Main
Estimates
Planned
Revenue
Total
Authorities
Actual
Internal Services            
Provision of internal services to other organizations 0.2 0.1 0.4 0.4 0.4 0.1

Total Respendable Revenue 0.2 0.1 0.4 0.4 0.4 0.1

Non-respendable revenue consists of all non–tax revenue that has been credited to the Consolidated Revenue Fund.

Non-Respendable Revenue
      2013–14 ($ millions)
     
Program 2011–12 Actual ($ millions) 2012–13 Actual ($ millions) Planned
Revenue
Actual
Economic and Fiscal Policy Framework        
Economic Development Policy        
Sundries 0.3 0.0 0.0 0.0
Federal-Provincial Relations and Social Policy        
Federal-provincial fiscal arrangements 0.1 0.1 0.1 0.1
Financial Sector Policy        
Guarantee fees1 2.1 5.4 4.4 7.7
 
Subtotal 2.5 5.5 4.5 7.8
Transfer and Taxation Payment Programs        
Commitments to International Financial Organizations        
International Monetary Fund – Poverty Reduction and Growth Facility 1.0 0.5 0.7 1.1
International Finance Corporation – Global Trade Liquidity Program 3.5 0.1 0.0 0.2
Receipts from and Payments to Individuals and Organizations        
Financial Consumer Agency of Canada 0.1 0.0 0.0 0.0
Sale of real property to Canada Lands Company Limited 4.8 0.0 3.0 0.0
Guarantee fees1 8.3 11.2 14.9 23.5
 
Subtotal 17.7 11.8 18.6 24.8
Treasury and Financial Affairs        
Federal Debt Management  
Chartered banks 23.4 23.8 19.8 26.5
Unclaimed balances received from the Bank of Canada in respect of chartered banks 0.4 0.3 0.3 0.4
Transfer from matured debt outstanding 0.8 13.9 1.2 11.0
Public Works and Government  Services Canada - Consulting and Audit Canada Revolving Fund 0.1 0.0 0.1 0.0
Major Federal-Backed Entities Borrowing        
Interest revenue – Canada Mortgage and Housing Corporation Loan2 1,962.8 1,889.4 1,371.8 1,368.5
Interest revenue – Farm Credit Canada Loan 196.5 221.8 220.7 227.8
Interest revenue – Business Development Bank of Canada Loan 111.2 119.5 118.9 128.8
Prudential Liquidity and Reserves System        
Short-term deposits 66.7 90.4 88.9 84.1
Receiver General balance at the Bank of Canada3 25.6 108.4 187.8 219.9
International reserves held in the Exchange Fund Account – Transfer of profits4 1,672.2 1,400.6 1,193.3 1,504.8
International Monetary Fund –Subscriptions – Transfer of profits 7.1 2.1 2.6 2.6
International Monetary Fund – General Resources Account – Transfer of profits 3.9 1.3 1.5 1.4
Transfer from the following accounts, which were unclaimed or outstanding for ten years or more – Outstanding Interest Account – Unclaimed cheques 40.9 39.8 38.0 40.3
Domestic Currency System        
Domestic coinage5 106.7 120.2 130.8 85.0
 
Subtotal 4,218.3 4,031.5 3,375.7 3,701.1
Internal Services        
Refunds of previous years’ expenditures 0.2 0.1 0.0 0.2
Adjustments to prior year’s payables 0.0 0.2 0.0 0.8
Sales of goods and services - Rights and privileges 0.1 0.1 0.1 0.1
 
Subtotal 0.3 0.4 0.1 1.1

Total Non-Respendable Revenue 4,238.8 4,049.2 3,398.9 3,734.8
1 The increase in guarantee fees relates to new guarantee fee arrangements introduced during the year.
2 The decrease in interest revenue relates to lower levels of loans outstanding during the year.
3 The increase relates to higher levels of deposit on hand with the Bank of Canada.
4 The increase relates to foreign exchange fluctuation experienced during the year.
5 The decrease in domestic coinage is due to lower overall demand for coinage.