Archived - Departmental Performance Report 2014-2015 - Supplementary Tables

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Departmental Sustainable Development Strategy

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

The Federal Sustainable Development Strategy (FSDS) 2013–16 presents the Government of Canada's sustainable development activities, as required by the Federal Sustainable Development Act. In keeping with the objectives of the Act 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 in this supplementary information table.

This Departmental Sustainable Development Strategy presents the results for Theme I – Addressing Climate Change and Air Quality, Theme III – Protecting Nature and Canadians, and Theme IV – Shrinking the Environmental Footprint – Beginning with Government.

2. Themes I to III: Department- and Agency-Led Targets

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

3. Themes I to 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 III 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 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 conserves energy 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. An 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 a reduction in greenhouse gas emissions, pursuant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, pursuant 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, pursuant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, pursuant 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 and work with manufacturers and importers of vehicles to facilitate its application.

i.    Relationship between the implementation strategies and the FSDS targets

The Green Levy aims 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, pursuant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, pursuant to Target 2.1 – Outdoor Air Pollutants.

ii. Outline of the non-financial performance information

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. The carry-forward period for donations of ecologically sensitive land, or easements, covenants and servitudes on such land, was recently increased from 5 to 10 years. 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
  • 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 – Terrestrial Ecosystems and Habitat Stewardship.

ii. Outline of the non-financial performance information

Although 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: Targets and Implementation Strategies

Goal 7: Waste and Asset Management

Target 7.2: Green Procurement

As of April 1, 2014, the Government of Canada will continue to take action to embed environmental considerations into public procurement, in accordance with the federal Policy on Green Procurement.

Scope and Context

Environmental considerations are embedded in the Department's procurement. Goods are usually purchased through Public Works and Government Services Canada (PWGSC) standing offers and supply arrangements that include environmental performance specifications. When contracting for services, procurement to pay processes from electronic solicitation and bidding, use of scanning technology to issue contracts, as well as electronic invoicing and payment by direct deposit are embedded in the process.

Performance Measurement

Expected result

Environmentally responsible acquisition, use and disposal of goods and services.

Performance indicator
Performance level achieved

Departmental approach to further the implementation of the Policy on Green Procurement in place as of April 1, 2014.

 

 

 

 

Achieved as of April 1, 2014

Context: The "Go E" task team and the Enviro Committee were tasked with accelerating the move to paperless processes and other means of further greening government operations. The Enviro Committee has also used digital display panels throughout the Department to promote sound environmental practices and increase awareness. 

Performance indicator
Performance level achieved

Number and percentage of procurement and/or materiel management specialists who completed the Canada School of Public Service Green Procurement course (C215) or equivalent, in fiscal year 2014–15.

 

 

8
Maintained current level of 100%

Scope: All departmental functional specialists in procurement and materiel management have completed the Green Procurement course.

Performance indicator
Performance level achieved

Number and percentage of managers and functional heads of procurement and materiel whose performance evaluation includes support and contribution toward green procurement, in fiscal year 2014–15.

 

 

2
Maintained current level of 100%

Scope: The Director and Team Leader of the Contracting and Procurement Division have performance objectives relating to green procurement activities.

Departmental Green Procurement Target

By March 31, 2017, 90% of purchases of audiovisual equipment will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the equipment.

Scope: Audiovisual equipment (for example, projectors, headsets, digital signage and televisions) purchased by the Department through PWGSC standing offers that include environmental performance specifications is reported. Audiovisual equipment purchased by Shared Services Canada in support of the 90 Elgin fit-up is not reported. 

Performance indicator
Performance level achieved

Dollar value of audiovisual equipment purchased that meets the target objective relative to the total dollar value of all audiovisual equipment purchased.

84%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 90% of imaging hardware will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the equipment.

Scope: Imaging hardware (devices that provide scanning, copying and printing capability) purchased through PWGSC standing offers that include environmental performance specifications is reported. 

Context: As part of the 2014–15 relocation to 90 Elgin, the Department updated departmental multi-functional devices (MFDs). A contract for a four-year lease of MFDs was executed using the PWGSC standing offer framework that includes environmental considerations.

Performance indicator
Performance level achieved

Dollar value of imaging hardware acquisitions that meet the target objective relative to the total dollar value of all imaging hardware acquired.

100%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 90% of information technology (IT) hardware purchases will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the equipment.

Scope: IT hardware (desktop computers, laptops, tablets and peripherals) purchased through PWGSC standing offers and supply arrangements that include environmental performance specifications is reported.

Context: Purchases totalled $530,000 in fiscal year 2014–15. Of this amount, $502,000 (95%) was for IT hardware purchased through standing offers or supply arrangements.

Performance indicator
Performance level achieved

Dollar value of IT hardware purchases that meet the target objective relative to the total dollar value of all purchases for IT hardware.

95%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 70% of office furniture purchases will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the furniture.

Scope: Furniture (chairs, desks, workstations, soft seating and accessories such as monitor arms and keyboard trays) purchased by the Department through PWGSC standing offers that include environmental performance specifications is reported. Furniture purchased by PWGSC in support of the 90 Elgin fit-up is not reported.

Context: Purchases totalled $493,000 in fiscal year 2014–15. Of this amount, $349,000 (71%) was for furniture purchased through standing offers or supply arrangements

PWGSC conducted a review of furniture procurement vehicles during 2014–15. As a result, some product lines were not available through standing offers. The environmental performance specifications for purchases made outside the standing offer framework were consistent with those for standing offer items, whenever feasible.

Performance indicator
Performance level achieved

Dollar value of office furniture purchases that meet the target objective relative to the total dollar value of all office furniture purchases.

71%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 95% of copy paper, commercial printing, and/or envelope purchases will contain a minimum of 30% recycled content and be certified to a recognized environmental standard to reduce the environmental impact of production.

Scope: Copy paper.

Context: Copy paper purchases totalled $53,000 in fiscal year 2014–15. All copy paper was purchased through PWGSC standing offers and included 30% post-consumer recycled paper content. 

All reports prepared in 2014–15 were available in electronic format only. Therefore, no printing contracts were awarded in 2014–15.

Performance indicator
Performance level achieved

Dollar value of copy paper, commercial printing and/or envelope purchases that meet the target objective relative to the total value of all copy paper, commercial printing and/or envelope purchases.

100%
On track to achieve

Implementation strategy element or best practice
Performance level achieved

7.2.1.5. Leverage common use procurement instruments where available and feasible.

Achieved

Implementation strategy element or best practice
Performance level achieved

Best Practice

7.2.3. Train acquisition cardholders on green procurement.

Context: The Department provides training to cardholders through information sessions and encourages them to incorporate green procurement considerations when making purchasing decisions.

Achieved

Target 7.3: Sustainable Workplace Operations

As of April 1, 2015, the Government of Canada will update and adopt policies and practices to improve the sustainability of its workplace operations.

Performance Measurement

Expected result

Departmental workplace operations have a reduced environmental impact.

Performance indicator
Performance level achieved

An approach to maintain or improve the sustainability of the departmental workplace is in place by March 31, 2015.

 

 

 

 

 

 

 

 

 

 

Achieved as of March 31, 2015

Context: The "Go E" task team and the Enviro Committee were tasked with developing and promoting sustainable workplace operations. The Department's new building is certified LEED Gold. The use of recycling centres is promoted, and a preliminary waste audit indicated that 62% of waste was being diverted from landfill. The Department also leveraged the move to 90 Elgin to purchase new MFDs.

During this process, the Department significantly reduced the number of print devices in use and achieved an 8:1 employee to printer ratio. Digital display panels are used to promote reduction of paper, and MFD defaults are set to duplex and black and white printing. The Department's Green Meeting Guide is posted on the departmental intranet site, and electronic distribution of documents and use of laptops at meetings are actively promoted. E-waste is reused, whenever possible, through the Computers for Schools program, or if necessary, disposed of in an environmentally conscious manner.

Implementation strategy element or best practice
Performance level achieved

7.3.1.1. Engage employees in greening government operations practices.

Achieved

Implementation strategy element or best practice
Performance level achieved

7.3.1.3. Maintain or improve existing approaches to sustainable workplace practices (i.e., printer ratios, paper usage, and green meetings).

Achieved

Implementation strategy element or best practice
Performance level achieved

7.3.1.5. Select and operate IT and office equipment in a manner that reduces energy consumption and materiel usage.

Achieved

Implementation strategy element or best practice
Performance level achieved

7.3.1.6. Dispose of e-waste in an environmentally sound and secure manner.

Achieved

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, that contribute to a high standard of living for future generations, and that help build strong social foundations. Through its work relating to tax policy and financial sector policy and in its central agency role, the Department contributes to efforts to integrate sustainable development considerations into policy making. In addition, the Department sets an example for other organizations through a commitment to sustainable development in its operations.

The Department of Finance Canada has established several goals, supplementary to those included in the FSDS, that 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 government's fiscal plan has achieved a balanced budget. The deficit has been reduced from $55.6 billion in 2009–10 to a $1.9 billion surplus in 2014–15. Initiatives that have helped achieve 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.

Together, these measures and initiatives have put the debt-to-GDP ratio on a downward trend.

As part of the 2014 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 monitor regularly and forecast economic and fiscal performance both in Canada and other countries; to conduct private sector surveys of the Canadian economic outlook; and to 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 an Adjusted Growth Strategy, which includes the key measures from Budget 2015. This strategy will be finalized for the 2015 G20 Leaders' Summit in Antalya, Turkey.
  • 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 provided analysis and advice to support the introduction of tax measures that contributed to the government's agenda to support economic growth and an improved standard of living. This included measures that, for example:
  • supported families through tax relief and increased benefits, as well as through a reduction in the minimum withdrawal factors for Registered Retirement Income Funds to permit seniors to preserve more of their retirement savings to better support their retirement income needs
  • provided manufacturers with a 10-year tax incentive to invest in productivity-enhancing machinery and equipment
  • introduced a reduction in the small business tax rate from its current rate of 11 per cent to 9 per cent by 2019
  • reduced the tax compliance burden through measures such as the two-thirds reduction in the frequency of required remittance payments for the smallest new employers, and the streamlining of remittance requirements for non-resident employers
  • improved the integrity of the tax system and protected the government's revenue base
  • strengthened tax compliance by providing the Canada Revenue Agency with $118.2 million over five years to expand its Underground Economy Specialist Teams, with $25.3 million over five years to expand its activities to combat international tax evasion and aggressive tax avoidance, and with $58.2 million over five years to combat aggressive tax avoidance in Canada by the largest and most complex business entities.
The Department contributed to the signing of tax information exchange agreements (TIEAs) with other countries to fight international tax evasion. During 2014–15, a protocol to update the tax treaty with the United Kingdom came into force; protocols to update tax treaties with Spain, New Zealand, the United Kingdom and Belgium were signed; an information exchange agreement with the United States entered into force, and TIEAs with Brunei, Uruguay and Bahrain came into force.

In addition, the Department released the 2014 edition of the Tax Expenditures and Evaluationsreport. The report provides estimates and projections of tax expenditures related to personal and corporate income taxes and the Goods and Services Tax (GST). The report also includes an evaluation of the federal charitable donation tax credit and a review of evidence on interprovincial tax planning by corporate groups.
  • 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 implemented a number of measures to promote a stable, efficient and competitive financial sector and to 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 government announced its intention to implement a Taxpayer Protection and Bank Recapitalization ("bail-in") regime, which would allow for a failing systemically important bank to be recapitalized and restructured so that it can keep operating, without depositor or taxpayer bail-outs. The Department continued to advance the design of the regime in preparation for the introduction of legislative amendments to implement the regime, with associated regulations and guidelines to follow. The Department also advanced the development of measures to support the growth of smaller institutions.

The government announced its intention to introduce a new financial consumer framework that will consolidate existing financial consumer provisions of the Bank Act to strengthen and modernize Canada's financial consumer protection framework, to respond to the diverse needs of Canadians. The framework will make the consumer protection provisions in the Act more transparent and consistent with regard to banks' dealings with their consumers

The Department implemented changes to the governance of Canada's payments sector through the introduction of legislative amendments to the Canadian Payments Act and the Payment Clearing and Settlement Act, and advanced new regulations made under the Canadian Payments Act. The Department also provided analysis and advice to support the reform of the credit card market in Canada, which led to the Minister of Finance accepting separate and individual voluntary reductions of interchange rates by credit card networks.

As part of Economic Action Plan 2014 Act, No. 2, the Department developed legislative changes that clarified the federal government's role in respect of provincial credit union centrals. These measures improved and clarified the federal regime for credit unions to further strengthen Canada's financial system by ensuring provincial governments appropriately supervise and support their own financial institutions. The Department also developed legislative changes that streamlined the process for multiple provincial credit unions to amalgamate and become one federal institution, reducing a multi-step process into one step.

The Department implemented measures to improve market discipline in, and reduce taxpayer exposure to, the housing sector, including reducing the amount of new guarantees that Canadian Mortgage and Housing Corporation is authorized to provide under its 2014 securitization programs.

The Department supported the government's collaborative efforts to establish a Cooperative Capital Markets Regulatory System. An agreement in principle was signed on September 19, 2013, with British Columbia and Ontario. On July 9, 2014, New Brunswick and Saskatchewan agreed to join the Cooperative System. Prince Edward Island and Yukon also subsequently agreed to join the Cooperative System. On September 8, 2014, the participating jurisdictions confirmed their commitment to the Cooperative System and released draft provincial capital markets legislation and complementary federal legislation for public comment. The Department worked on legislative and regulatory proposals to reinforce the stability of the financial sector, to support retirement savings, to protect Canadian consumers, and to strengthen Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime.

The Department also led the preparation of a comprehensive assessment of the inherent money laundering and terrorist financing risks in Canada, represented Canada at the Financial Action Task Force (FATF), and conducted a self-assessment of Canada's Regime against the FATF's global Anti-Money Laundering/Anti-Terrorist Financing standards in preparation for the FATF's upcoming evaluation of Canada.
  • 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 and accurate payments of CHT and CST amounts to provinces and territories.

Communications activities continued to focus on improving Canadians' understanding of the programs.
  • 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 continued to provide timely and accurate payments of Equalization amounts to Equalization-receiving provinces and TFF amounts to territories.

The Department provided $103.4 million to Quebec under the Fiscal Stabilization program. This payment represented the final determination made in March 2015 of the demand submitted by the Government of Quebec for 1991–92.
  • 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 Start work on the 2013–2015 Canada Pension Plan (CPP) Triennial Review (to be completed by 2015). Federal-Provincial-Territorial Ministers of Finance, the joint stewards of the CPP, are required to review the CPP every three years to ensure that it remains financially sustainable, and to determine whether any changes are required. Department of Finance Canada officials continued to provide advice and analysis to support the 2013–2015 Triennial Review.

In keeping with the government's commitment in Budget 2012, the Department initiated discussions with provincial and territorial officials on the impact of the forthcoming increase in the age of eligibility for Old Age Security on Canada Pension Plan disability and survivor clients.
  • Program 1.1: Economic and Fiscal Policy Framework
  • Sub-Program 1.1.4: Federal-Provincial Relations and Social Policy
  2c.2 Continue to work with provinces and territories to identify ways to help Canadians save more effectively for retirement. The Department continued to collaborate with provinces and territories to pursue the directions outlined at the December 2012 meeting of Federal-Provincial-Territorial Finance Ministers.

Department of Finance Canada officials have undertaken background work to support the 2013–2015 Triennial Review, consistent with the Budget2012 commitment to review the impact of the increase in the age of eligibility for Old Age Security on CPP survivor and disability benefits.

Supported by the Department, the government announced the appointment of Canada's first Financial Literacy Leader on April 15, 2014, and released the National Strategy for Financial Literacy – Count Me In, Canada on June 9, 2015.

The Department also launched online consultations on a voluntary supplement to the CPP.
  • Program 1.1: Economic and Fiscal Policy Framework
  • Sub-Program 1.1.4: Federal-Provincial Relations and Social Policy
  • Sub-Program 1.1.5: Financial Sector 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 conducted research and analysis and evaluated policy proposals concerning environment-related tax measures in consultation with other government departments and stakeholders, including taxpayers, industry associations and environmental organizations.

The Department supported the government in finalizing legislation to implement Budget 2014 measures to expand the accelerated capital cost allowance under Class 43.2 to include water-current energy equipment and a broader range of equipment used to gasify eligible waste. The Department also supported implementation of the   Budget 2014 measure doubling the carry-forward period for donations of ecologically sensitive land to 10 years.
  • 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. Departmental employees attended lectures as part of the Department's regular Speaker Series and the Thomas K. Shoyama Annual Public Policy Lecture.

In November 2014, Dr. Raj Chetty, Bloomberg Professor of Economics at Harvard University, delivered the annual Thomas K. Shoyama Public Policy Lecture. Dr. Chetty's presentation, entitled "Improving Equality of Opportunity: New Evidence and Policy Implications" focused on the issue of social mobility, using income data to measure relative mobility and absolute upward mobility.
  • 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 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 implement-ation 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 held its annual training session on SEAs. Presentations were given by officials from the Department and the Canadian Environmental Assessment Agency.  
  • Program 1.1: Economic and Fiscal Policy Framework
  • Sub-Program 1.1.3: Economic Development Policy
3d: Support implement-ation of Canada's international financing commitment under the Copenhagen Accord. 3d.1 Manage a $350 million climate change-related initiative through the International Finance Corporation. The Department worked 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 2015, the program had funded 15 investment projects and 16 advisory projects. The investment projects received US$128.9 million in program funds that have leveraged US$380 million from IFC's core funding and $598 million from other sources.

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 2015, the Catalyst Fund had raised US$417.75 million from eight investors (including Canada) and made commitments to six investee funds.

The Department continued to report 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. As well, 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 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 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, the Department of Finance Canada's Sustainable Development Champion, is responsible for coordinating activities and reporting on 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 2014–15 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. The Department of Finance Canada tracks the number of preliminary scans and full Strategic Environmental Assessments (SEAs) that it completes and has committed to report this information each year in its Departmental Performance Report. In 2014–15, a total of 202 preliminary scans and 4 full SEAs were conducted. Through the SEA process, some proposals were found to have possible positive or negative effects on the 2013–16 FSDS goals and targets in Theme I – Addressing Climate Change and Air Quality; Theme II – Maintaining Water Quality and Availability; and Theme III – Protecting Nature and Canadians.

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

Details on Transfer Payment Programs of $5 Million or More

General Information

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

Start date: 1960

End date: Ongoing

Description: Statutory commitment 

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.3: Commitments to International Financial Organizations

Description: This program provides direct payments to allow the International Development Association to disburse concessional financing for development projects and programs in the world's poorest countries.

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

Comments on variances: Both the variance between actual and planned spending for 2014–15 and the increase in actual spending from 2013–14 to 2014–15 were due to a change in timing of Canada's annual payments from April to January. This change was not known at the time of the publication of the 2014–15 Report on Plans and Priorities. Canada's annual contribution to the International Development Association has not changed.

Audits completed or planned: Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Internal Audit and Evaluation will conduct an evaluation of Payments to the International Development Association in 2016–17.

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 441,620,000 441,610,000 441,610,000 883,220,000 883,220,000 441,610,000
Total program 441,620,000 441,610,000 441,610,000 883,220,000 883,220,000 441,610,000

General Information

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

Start date: 1957

End date: Ongoing

Description: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

Description: Equalization ensures that less prosperous provinces have sufficient revenue to provide reasonably comparable levels of public services, at reasonably comparable levels of taxation. Equalization payments are unconditional and are determined according to a formula that measures each province's capacity to raise revenue. The annual growth of this program is based on a three-year moving average of nominal growth in gross domestic product (GDP). 

Results achieved: Timely and accurate payments in 2014–15 met all legislative requirements for financial support to provinces.

Comments on variances: The increase in actual spending from 2013–14 to 2014–15 was due to the legislated annual program growth, calculated by multiplying the 2013–14 expenditures by the 3.5 per cent escalator derived using the GDP data available in September 2013.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: With regards to the 2014–15 payments, provincial and territorial finance ministers were informed of the amounts at the December 2013 Finance Ministers' Meeting.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 15,422,503,000 16,105,194,000 16,669,278,000 16,669,278,000 16,669,278,000 0
Total program 15,422,503,000 16,105,194,000 16,669,278,000 16,669,278,000 16,669,278,000 0

General Information

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

Start date: 1985

End date: Ongoing

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

Description: Territorial Formula Financing enables territorial governments to provide services that are comparable to those delivered by provincial governments, taking into account the high costs and unique challenges in the North. Territorial Formula Financing fills the gap between a proxy of each territory's expenditure needs and its capacity to generate revenues.

Results achieved: Timely and accurate payments in 2014–15 met all legislative requirements for financial support to territories.

Comments on variances: The increase in actual spending from 2013–14 to 2014–15 was mainly due to the growth in provincial and territorial spending.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: With regards to the 2014–15 payments, provincial and territorial finance ministers were informed of the amounts at the December 2013 Finance Ministers' Meeting.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 3,110,679,940 3,288,281,700 3,469,215,474 3,469,215,474 3,469,215,474 0
Total program 3,110,679,940 3,288,281,700 3,469,215,474 3,469,215,474 3,469,215,474 0

General Information

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

Start date: 2004

End date: Ongoing

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

Description: This transfer payment to provinces and territories provides funding for health care. Annual funding for the Canada Health Transfer (CHT) has been increasing by 6 per cent per year and will continue to do so until 2016–17, after which it will grow according to a three-year moving average of nominal GDP, with funding guaranteed to increase by at least 3 per cent per year. 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.

Results achieved: Timely and accurate payments in 2014–15 met all legislative requirements for financial support to provinces and territories.

Comments on variances: Actual spending was slightly higher than planned spending because when this program took into account new population data in October 2014, there was also an impact on transition protection payments. Transition protection is additional funding that is provided to mitigate the impact of changing the allocation of this transfer to one based on equal amounts per capita, starting in 2014–15. As well, in March 2015, deductions were made from the 2014–15 CHT under the Canada Health Act.
The increase in actual spending from 2013–14 to 2014–15 was 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 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: With regards to the 2014–15 payments, provincial and territorial finance ministers were informed of the amounts at the December 2013 Finance Ministers' Meeting.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 28,568,644,223 30,282,900,196 32,114,033,000 32,114,006,363 32,114,006,363        (26,637)
Total program 28,568,644,223 30,282,900,196 32,114,033,000 32,114,006,363 32,114,006,363       (26,637) 

General Information

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

Start date: 2004

End date: Ongoing

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

Description: This program provides transfer payments to provinces and territories in support of social assistance and social services, post-secondary education and programs for children. The funds are allocated on an equal per capita basis. Provincial and territorial governments are responsible for designing and delivering programs and are accountable to their citizens and legislatures for outcomes achieved and dollars spent.

Results achieved: Timely and accurate payments in 2014–15 met all legislative requirements for financial support to provinces and territories.

Comments on variances: The increase in actual spending from 2013–14 to 2014–15 was due to the legislated annual 3 per cent escalation of the Canada Social Transfer program.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: With regards to the 2014–15 payments, provincial and territorial finance ministers were informed of the amounts at the December 2013 Finance Ministers' Meeting.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 11,859,486,000 12,215,271,000 12,581,729,000 12,581,729,000 12,581,729,000 0
Total program 11,859,486,000 12,215,271,000 12,581,729,000 12,581,729,000 12,581,729,000 0

General Information

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

Start date: 1867

End date: Ongoing

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

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

Results achieved: Timely and accurate payments in 2014–15 met all legislative requirements for financial support to provinces.

Comments on variances: Both the variance between actual spending and planned spending for 2014–15 and the increase in actual spending from 2013–14 to 2014–15 were due to the inclusion of (higher) updated data for the three provinces (Manitoba, Saskatchewan and Alberta) that have a portion of their payments based on estimated population data. The final computation for 2014–15 was made in December 2014, after the 2014–15 Report on Plans and Priorities had been prepared.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 32,149,329 34,118,831 34,118,831 34,363,164 34,363,164 244,333
Total program 32,149,329 34,118,831 34,118,831 34,363,164 34,363,164 244,333

General Information

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

Start date: 1964

End date: Ongoing

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal arrangements with Provinces and Territories

Description: The Youth Allowances Recovery is a recovery from the Province of Quebec of an income tax point transfer (3 percentage points) that is related to the discontinued Youth Allowances Program.
Since the program for which it received this tax transfer no longer exists, the value of these tax points is reimbursed to the Government of Canada each year.

Results achieved: Timely and accurate payments and recoveries in 2014–15 met all legislative requirements.

Comments on variances: The variance between actual spending and planned spending for 2014–15 was due to prior-year adjustments and to a revised estimate of the 2014–15 recovery, made in March 2015. The recovery for 2014–15 was greater than the recovery for 2013–14 because the value of the estimated tax points was greater in 2014–15.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments (736,513,992) (762,975,225) (815,902,000) (767,147,511) (767,147,511) 48,754,489
Total program (736,513,992) (762,975,225) (815,902,000) (767,147,511) (767,147,511) 48,754,489

General Information

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

Start date: 1977

End date: Ongoing

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

Description: In the 1960s, Quebec was the only province that opted to receive a tax point transfer in lieu of the federal cash support being given to provinces for certain social programs such as hospital insurance and social welfare. The federal income taxes paid by Quebec residents were lowered by 13.5 percentage points, and Quebec income taxes were increased by an equivalent amount. Today, those social programs are supported by the major federal transfers paid to provinces and territories. Since Quebec's major transfer payments are calculated in the same way as those of the other provinces and the province's tax revenues continue to be augmented by the tax point transfer in lieu of federal cash support, the value of the tax point transfer is recovered from the province's transfer payments to ensure consistent treatment across the country.

Results achieved: Timely and accurate payments and recoveries in 2014–15 met all legislative requirements

Comments on variances: The variance between actual spending and planned spending was due to prior-year adjustments resulting from revisions to the estimated value of federal tax points for prior open years, and to a revised official estimate of the 2014–15 recovery, made in February 2015. The recovery for 2014–15 was greater than the recovery for 2013–14 because the value of the estimated tax points was greater in 2014–15.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments (3,357,025,000) (3,459,827,000) (3,702,944,000) (3,466,658,000) (3,466,658,000) 236,286,000
Total program (3,357,025,000) (3,459,827,000) (3,702,944,000) (3,466,658,000) (3,466,658,000) 236,286,000

General Information

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

Fiscal year for terms and conditions: 201011

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.3: Commitments to International Financial Organizations

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

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

Comments on variances: Not applicable

Audits completed or planned: Not applicable

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 51,200,000 51,200,000 51,200,000 51,200,000 51,200,000 0
Total program 51,200,000 51,200,000 51,200,000 51,200,000 51,200,000 0

General Information

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

Start date: 2010

End date: 2014

Fiscal year for terms and conditions: 2009–10

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

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 (GST). 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 (HST) 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).

Results achieved: Harmonization of provincial sales taxes with the GST

Comments on variances: The variance between 2014–15 actual and planned spending was due to the $319.8 million that was returned by British Columbia during 2014–15 as part of its exit from the HST. The decrease in payments between 2013–14 and 2014–15 was in accordance with the schedule of assistance payments agreed to by Quebec and Prince Edward Island under their sales tax harmonization agreements. Final payments to these provinces were made in 2013–14, and thus no payments were made during 2014–15.

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 2015–16.

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 GST. The agreements provide for the rights and obligations of the parties.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 438,200,000 1,161,200,000 0 (319,800,000) (319,800,000) (319,800,000)
Total program 438,200,000 1,161,200,000 0 (319,800,000) (319,800,000) (319,800,000)

General Information

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

Start date: 2008–09

End date: 2019–20

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal arrangements with Provinces and Territories

Description: Additional Fiscal Equalization payments to Nova Scotia are related to its 2005 Offshore Arrangement. In Budget 2007, the Government of Canada introduced a new formula for Equalization (the current formula). Nova Scotia was guaranteed that the new formula would not reduce the sum of its Equalization payments and 2005 Equalization offset payments when compared with what the province would have received under the formula that was in place when it signed the 2005 Offshore Arrangement. 

Results achieved: Timely and accurate payments in 2014–15 met all legislative requirements for financial support to Nova Scotia.

Comments on variances: Actual spending was higher than planned spending because the official calculation to determine the amount of the transfer payment was made after the 2014–15 Report on Plans and Priorities was prepared.
The decrease in actual spending from 2013–14 to 2014–15 was due to higher growth of combined Equalization and 2005 Offshore Equalization Offset payments in the new formula, compared with the formula that was in place before 2007.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 297,317,000 260,257,000 138.275,000 131,184,000 131,184,000 (7,091,000)
Total program 297,317,000 260,257,000 138.275,000 131,184,000 131,184,000 (7,091,000)

General Information

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: 2005–06

End date: 2019–20

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal arrangements with Provinces and Territories

Description: Additional Fiscal Equalization Offset payments to Nova Scotia are related to its 2005 Offshore Arrangement. In 2005, the Government of Canada signed offshore arrangements with Nova Scotia and Newfoundland and Labrador. These arrangements guaranteed that Equalization payments for those provinces would not be reduced because of offshore oil and gas revenues that entered the Equalization formula. These Arrangements were in place for the eight-year period 2004–05 to 2011–12, and Nova Scotia qualified for an extension of its Arrangement for another eight-year period (2012–13 to 2019–20). 

Results achieved: Timely and accurate payments in 2014–15 met all legislative requirements for financial support to Nova Scotia.

Comments on variances: The decrease in actual spending from 2013–14 to 2014–15 was 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 2014–15 financial audit, to be completed in the second quarter of 2015–16. Internal Audit and Evaluation conducted the Audit of the Control Framework for Transfer Payments in 2014–15.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 146,059,000 89,461,000 64,481,000 64,481,000   64,481,000 0
Total program 146,059,000 89,461,000 64,481,000 64,481,000 64,481,000 0

General Information

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

Fiscal year for terms and conditions: 2012–13

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.3: Commitments to International Financial Organizations

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.

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

Comments on variances: Not applicable

Audits completed or planned: Not applicable

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 9,000,000 10,000,000 10,000,000 10,000,000 10,000,000 0
Total program 9,000,000 10,000,000 10,000,000 10,000,000 10,000,000 0

General Information

Name of transfer payment program: Incentive for Provinces to Eliminate Taxes on Capital  (Part IV—Federal-Provincial Fiscal Arrangements Act)

Start date: 2007–08

End date: 2010–11

Fiscal year for terms and conditions: 2007–08

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal Arrangements with Provinces and Territories

Description: A financial incentive to encourage provinces to eliminate provincial capital taxes or restructure an existing capital tax on financial institutions into a minimum tax.

Results achieved: All provinces' general capital taxes were eliminated as of July 2012, which has strengthened Canada's business tax advantage and increased the competitiveness of businesses.

Comments on variances: Because no information was provided by the eligible provinces at the time the 2014–15 Main Estimates were prepared, it was not possible to determine whether any payments would be made in 2014–15. Two requests for payments were subsequently received, and the payments were made in 2014–15.
The variation in actual payments reflects the temporary nature of the incentive, which applies to revenues forgone between March 18, 2007, and January 1, 2011, and the timing of provincial requests. The payments in 2014–15 represent final and preliminary payments to two provinces for revenues forgone in fiscal years 2008–09 to 2010–11.

Audits completed or planned: Not applicable

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Federal transfer payments related to the elimination of provincial capital taxes are determined under Part IV of the Federal-Provincial Fiscal Arrangements Act. The framework for compensation was legislated on December 14, 2007.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 5,486,000 1,405,000 0 95,042,000 95,042,000 95,042,000
Total program 5,486,000 1,405,000 0 95,042,000 95,042,000 95,042,000

General Information

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

Start date: 2009–10

End date: Ongoing

Fiscal year for terms and conditions: 2013–14

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

Link to department's Program Alignment Architecture: Sub-Program 1.1.5: Financial Sector Policy

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 toward strengthening the regulation of Canada's capital markets.
The Canadian Securities Regulation Regime Transition Office continued to work with Ontario, British Columbia, Saskatchewan, New Brunswick, Prince Edward Island, Yukon and Canada to support the implementation of the Cooperative Capital Markets Regulatory System (Cooperative System).

Results achieved: Consistent with its governing statute, the Canadian Securities Regulation Regime Transition Office carried out its purpose by working toward the signing of the Memorandum of Agreement Regarding the Cooperative Capital Markets Regulatory System; by contributing to the draft provincial capital markets legislation and complementary federal legislation that were released for public comment; and by leading the development of draft regulations under the provincial capital markets legislation.

Comments on variances: For 2014–15, the Government of Canada expected to provide the Canadian Securities Regulation Regime Transition Office with $9.1 million to assist in the establishment of the Cooperative System. However, the Canadian Securities Regulation Regime Transition Office submitted its business plan and a $53.1 million funding request to the Minister of Finance after the 2014–15 Main Estimates were tabled in Parliament.

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 worked closely with the Canadian Securities Regulation Regime Transition Office to develop and implement the Office's business plan, to review strategic priorities, and to develop deliverables.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants        0          0      0      0      0      0
Total contributions        0     4,200,000      0      0      0      0
Total other types of transfer payments        0   10,000,000 9,100,000 53,100,000 53,100,000 44,000,000
Total program        0   14,200,000 9,100,000 53,100,000 53,100,000 44,000,000

General Information

Name of transfer payment program: Establishment of a Canadian Securities Regulation Regime and a Canadian Regulatory Authority (Budget Implementation Act, 2009)  

Start date: 2009–10

End date: Ongoing

Fiscal year for terms and conditions: 2014–15

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

Link to department's Program Alignment Architecture: Sub-Program 1.1.5: Financial Sector Policy

Description: Under the Memorandum of Agreement Regarding the Cooperative Capital Markets Regulatory System, the Government of Canada committed to make payments to participating provinces and territories that will lose net revenue as a result of the transition to the Cooperative Capital Markets Regulatory System (Cooperative System).

Results achieved: An Agreement in Principle to Move Towards a Cooperative Capital Markets Regulatory System was signed on September 19, 2013, by British Columbia, Ontario and Canada. On July 9, 2014, the governments of New Brunswick and Saskatchewan signed an amended agreement in principle under which they agreed to join the Cooperative System. Prince Edward Island and Yukon also subsequently agreed to join the Cooperative System.
On September 8, 2014, the participating jurisdictions confirmed their commitment to the Cooperative System by signing a Memorandum of Agreement accompanied by draft provincial capital markets legislation and complementary federal legislation that were released for public comment.

Comments on variances: At the time the 2014–15 Report on Plans and Priorities was prepared, no provinces or territories eligible for transition funding had yet joined the Cooperative System; thus no amount was included in planned spending. The $169 million expenditure in 2014–15 represents payments made to Saskatchewan, New Brunswick, Prince Edward Island and Yukon to support the transition to the Cooperative System.

Audits completed or planned: Not applicable

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: The Department of Finance is in regular contact with all participating jurisdictions through various work streams established to implement the transition to the Cooperative System.

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 0 0 0 169,000,000 169,000,000 169,000,000
Total program 0 0 0 169,000,000 169,000,000 169,000,000

General Information

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

Start date: 2014–15

End date: 2014–15

Fiscal year for terms and conditions: Statutory commitment

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.1: Fiscal arrangements with Provinces and Territories

Description: The Fiscal Stabilization program protects provincial governments from sharp year-over-year declines in the sum of their own-source and Equalization revenues, which result from extraordinary economic downturns.

Results achieved: Not applicable

Comments on variances: The 2014–15 Fiscal Stabilization payment represented the final determination made in March 2015 of the demand submitted by the Government of Quebec for 1991–92. This final determination was made after the 2014–15 Report on Plans and Priorities was prepared.
Actual spending increased from 2013–14 to 2014–15 because no Stabilization payments were made in 2013–14.

Audits completed or planned: The Office of the Auditor General of Canada is conducting its 2014–15 financial audit, to be completed in the second quarter of 2015–16.

Evaluations completed or planned: Not applicable

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions 0 0 0 0 0 0
Total other types of transfer payments 0 0 0 103,400,000 103,400,000 103,400,000
Total program 0 0 0 103,400,000 103,400,000 103,400,000

General Information

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

Start date: March 2006

End date: March 31, 2016

Fiscal year for terms and conditions: 2011–12

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

Link to department's Program Alignment Architecture: Sub-Program 1.2.4: Receipts from and Payments to Individuals and Organizations

Description: The primary objective of the Harbourfront Centre Funding Program is to provide operational funding support to Harbourfront Centre until March 31, 2016. The support assists Harbourfront Centre in covering its fixed operational costs. The funding program also facilitates Harbourfront Centre's ability to leverage funding from other levels of government and to pursue other revenue-generating strategies that allow the organization to provide the general public with continued access to cultural, recreational, and educational programs and activities held in Toronto's waterfront area.

Results achieved: Harbourfront Centre received $5 million in funding (for administrative and operational costs), which allowed it to leverage funding from other sources to generate revenue. This enabled Harbourfront Centre to remain open and to provide community and cultural programming for the general public on Toronto's waterfront.

Comments on variances: Not applicable

Audits completed or planned: Not applicable

Evaluations completed or planned: Internal Audit and Evaluation conducted the Evaluation of the Harbourfront Centre Funding Program in 2014–15.

Engagement of applicants and recipients: Not applicable

Performance Information
(dollars)
Type of Transfer Payment 2012–13
Actual Spending
2013–14
Actual Spending
2014–15
Planned Spending
2014–15
Total Authorities
available for use
2014–15
Actual Spending
(authorities used)
Variance
(2014–15
actual minus
2014–15 planned)
Total grants 0 0 0 0 0 0
Total contributions   5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 0
Total other types of transfer payments 0 0 0 0 0 0
Total program   5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 0

Horizontal Initiatives

General Information

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

Federal partner organization(s): Canada's AML/ATF Regime is a horizontal initiative comprising 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), the Financial Transactions and Reports Analysis Centre of Canada (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 Canada, and Foreign Affairs, Trade and Development Canada.

Non-federal and non-governmental partner(s): Not applicable

Start date of the horizontal initiative: June 2000

End date of the horizontal initiative: Ongoing

Total federal funding allocated (start to end date) (dollars)*: $808,447,199

Funding contributed by non-federal and non-governmental partners (dollars): Not applicable

Description of the horizontal initiative: Canada's AML/ATF Regime was formally established in 2000 as the National Initiative to Combat Money Laundering (NICML), as part of the 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 FINTRAC to collect and analyze these 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 and was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The NICML was expanded and its name was formally changed to "Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime."

The Regime is continually reviewed to ensure that it remains effective, addresses emerging risks, and maintains Canada's international leadership in the fight against money laundering and terrorist financing. Reviews are informed by various evaluations, consultations with industry, assessments of money laundering and terrorist financing risks, as well as international considerations, including the activities of the Financial Action Task Force (FATF) and the actions of G7 partners.

As a result of reviews, changes were made to the PCMLTFA and Canada's AML/ATF Regime over the years. The most significant changes were made following the Parliamentary Reviews of 2005-06 and 2012-13.

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 structures: Canada's AML/ATF Regime is a horizontal initiative comprising 11 federal partner organizations, coordinated by the Department of Finance Canada.

An interdepartmental steering committee, led by senior officials and consisting of all partners, provides input and advice on AML/ATF policy. In addition, general advice on Canada's AML/ATF Regime is also provided by the Public/Private Sector Advisory Committee, a broad-based advisory group composed of public and private sector representatives.

Performance highlights

Department of Finance Canada: The Department developed a set of legislative amendments to the PCMLTFA that received royal assent in June 2014. The measures strengthened customer due diligence standards; closed gaps in Canada's AML/ATF Regime; improved compliance, monitoring and enforcement; strengthened information sharing in the Regime; and brought into force countermeasures. 

The Department also led an assessment of money laundering and terrorist financing risks in Canada and conducted a self-assessment of Canada's Regime against the FATF global AML/ATF standards in preparation for the FATF 2015 mutual evaluation of Canada.

FINTRAC: FINTRAC's financial intelligence was used by police, law enforcement and national security Regime partners in hundreds of money laundering and terrorist financing investigations to confirm existing information and expand the scope of a wide variety of criminal investigations where the origins of the suspected criminal proceeds were linked to drug offences, fraud, tax evasion, customs and excise offences, corruption, human smuggling and trafficking, and other criminal offences.

Given the importance of suspicious transaction reporting to FINTRAC's analysis and financial intelligence, FINTRAC reached out to reporting entities last year to enhance their awareness of their reporting obligations and, more importantly, to strengthen their understanding of what constitutes a useful suspicious transaction report. FINTRAC also refined its methodology for the assessment of compliance related to suspicious transaction reporting and communicated this to reporting entities. As a result of these efforts, suspicious transaction reporting increased by 13 per cent in 2014-15 and the quality of the reports received by FINTRAC improved significantly, strengthening FINTRAC's ability to generate and disclose financial intelligence.

RCMP: The RCMP completed the implementation of the new Federal Policing model where criminal intelligence resources now focus on National Tactical Enforcement Priority investigations and other federal policing priority investigations.

CRA: Compliance Programs Branch: The CRA completed 73 audits based on information contained in FINTRAC disclosures, with total federal income taxes reassessed in the amount of $42,328,998.

CRA: Charities – Public Safety and Anti-Terrorism: With respect to its anti-terrorist financing responsibilities, the CRA's Charities Directorate completed two audits resulting in one compliance agreement and one education letter. In addition, 18 applicant organizations withdrew or abandoned their applications or were denied registration following examination by the Charities Directorate.

The Charities Directorate co-led an update of the FATF Best Practices Paper "Combatting the Abuse of Non-Profit Organisations (Recommendation 8)." In addition, a representative of the Charities Directorate participated as a subject-matter expert at a capacity-building workshop in Bratislava, Slovakia, organized by the Organization for Security and Co-operation in Europe and the United Nations Counter-Terrorism Committee Executive Directorate.

Results achieved by non-federal and non-governmental partners: Not applicable

Comments on variances: Not applicable

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

* Canada's AML/ATF Regime is an ongoing horizontal initiative, with no fixed end date. Therefore, allocation amounts include funding up to and including 2014–15 but exclude future funding. Total funding is the sum of the reporting organizations' total allocation amounts.

Performance Information
Federal organizations Link to department's Program Alignment Architecture Contributing programs and activities Total allocation (from start to end date) (dollars) 2014–15 Planned spending (dollars) 2014–15 Actual spending (dollars) 2014–15 Expected results 2014–15 Actual results against targets
Department of Finance Canada Financial Sector Policy Policy Development and Oversight of AML/ATF Regime 3,660,000 244,000 244,000 ER 1.1 AR 1.1
Department of Justice Canada Justice Policies, Laws and Programs Criminal Law Policy Section (CLPS) and International Assistance Group (IAG) 7,500,000 100,000 Not applicable‡ ER 2.1 AR 2.1
PPSC Drug, National Security and Northern Prosecutions Program Drug, National Security and Northern Prosecutions Program 16,865,680 2,108,210 6,423,386 ER 3.1 AR 3.1
FINTRAC Financial Intelligence Program Financial Intelligence Program 491,136,286 18,614,878§ 17,349,555 ER 4.1 AR 4.1
FINTRAC Compliance Program Compliance Program   18,710,422 18,018,977 ER 4.2 AR 4.2
FINTRAC Internal Services Internal Services   6,360,839 7,358,355 ER 4.3 AR 4.3
RCMP Federal Policing Money Laundering Units 101,145,050 6,985,050 6,985,050 ER 5.1 AR 5.1
RCMP Federal Policing Federal Policing Criminal Operations (FPCO) /  Integrated National Security Enforcement Teams (INSETS) and National Security Enforcement Sections (NSESs)  47,719,600 5,045,400 5,045,401 ER 5.2 AR 5.2
CRA Compliance Programs Branch (CPB) Canada's AML/ATF Regime 30,817,000 2,200,000 2,165,482 ER 6.1 AR 6.1
CRA Charities – Public Safety and Anti-Terrorism Combatting Terrorist Resourcing Through Charities 27,600,000 4,100,000 4,080,962 ER 6.2 AR 6.2
CBSA Admissibility Determination Highway  Mode Air Mode Rail Mode Marine Mode Postal Courier Low Value Shipment 82,003,583 2,695,551 2,695,551 ER 7.1 AR 7.1
CBSA Recourse Recourse   286,379 286,379 ER 7.2 AR 7.2
CBSA Internal Services AML/ATF Regime   1,159,184 1,159,184 ER 7.3 AR 7.3
Total for all federal organizations# 808,447,199 68,609,913 71,812,282 Not applicable
This amount includes funding provided to the Department of Justice Canada before the creation of the PPSC. Since 2007–08, total funding provided to the Department of Justice Canada has been $0.7 million.
The Department of Justice Canada, since it started reporting separately from the PPSC in 2007–08, has reported receiving $0.1 million in AML/ATF Regime funding. The Department of Justice Canada no longer accounts for AML/ATF Regime funding separately from its core mandate (A-base) funding and therefore will no longer report on Regime funding. Nonetheless, the Department will continue to support the Regime as it has been since its inception by providing, as part of its core mandate, legal services to the Regime partners.
§ FINTRAC's total allocation and planned spending differ from that given in the 2014-15 Report on Plans and Priorities because of adjustments to its funding authorities (for example, additional funding received through Supplementary Estimates, transfers to Shared Services Canada, and Employee Benefit Plan contribution changes), and include a component for Internal Services.
The RCMP fully spent its annual funding appropriation in support of the stated objectives of Canada's AML/ATF Regime. In addition, the RCMP incurred expenditures beyond the reported appropriation as a result of its efforts to support the broader mandate of this horizontal initiative.
# Total funding is the sum of the reporting organizations' total allocation amounts.

ER 1.1

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 AML/ATF Regime, including continuing work with respect to potential policy changes outlined in the Department's December 2011 consultation paper entitled "Strengthening Canada's AML/ATF Regime"
  • Assessing and advising on emerging trends, methods and risks related to money laundering and terrorist financing
  • Leading the development of a national AML/ATF risk assessment for Canada
  • Leading interdepartmental work in preparation for the next mutual evaluation of Canada under the FATF 4th round mutual evaluation process
  • Heading the Canadian delegation to participate as an active member in the FATF and the Asia/Pacific Group on Money Laundering, and participating as a cooperative and supporting nation in the Caribbean Financial Action Task Force and as an observer of the Financial Action Task Force of Latin America (formerly the Financial Action Task Force body of South America Against Money Laundering)
  • Continuing to participate in horizontal initiatives related to national security, led by Public Safety Canada

AR 1.1

The Department of Finance Canada continued to support Canada's AML/ATF Regime through coordination activities and AML/ATF policy development.

The Department proposed policies aimed at strengthening Canada's AML/ATF Regime and improving Canada's compliance with international standards, while minimizing the compliance burden. For example, a set of legislative amendments to the PCMLTFA, developed by the Department, received royal assent in June 2014. Consultations on, and policy development of, proposed regulatory amendments needed to enact certain legislative amendments as well as other stand-alone regulatory measures were also undertaken;

The Department assessed and advised on emerging trends, methods and risks related to money laundering and terrorist financing, which included appearances before the Standing Senate Committee on Banking, Trade and Commerce for its study of digital currency and appearances before the House of Commons Standing Committee on Finance for its study on terrorist financing.

In addition, the Department:

  • Led the development of a national AML/ATF risk assessment for Canada;
  • Led interdepartmental work in preparation for the 2015 mutual evaluation of Canada by the  FATF;
  • Led the Canadian delegation to the FATF and the Asia/Pacific Group on Money Laundering, and participated as a cooperative and supporting nation in the Caribbean Financial Action Task Force and as an observer of the Financial Action Task Force of Latin America; and
  • Provided advice and support for broader national security issues that affect Canada's AML/ATF Regime, including Canada's counter-terrorism strategy.

ER 2.1

The IAG (which is part of the Litigation Branch) and the CLPS of the Department of Justice Canada play a significant role in the AML/ATF Regime. For 2014–15, 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, providing advice to AML/ATF Regime partners in relation to the FATF, and participating in interdepartmental work in preparation for the next evaluation of Canada under the FATF's 4th round mutual evaluation process. These tasks may include support and attendance related to the meetings of FATF working groups (for example, the new Policy Development Group, the International Co-operation Review Group, and the Risks, Trends and Methods Group), and FATF-Style Regional Bodies, including the Asia/Pacific Group on Money Laundering, the Caribbean Financial Action Task Force, and the Financial Action Task Force of Latin America. Resources will also be allocated to ensure that the continued involvement of CLPS 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.

AR 2.1

The Department of Justice Canada, including the CLPS and particularly the Criminal sector of the Litigation Branch, continued 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 FATF meetings. The Department of Justice Canada also played a role in the self-assessment process for the 2015 mutual evaluation of Canada by the FATF. The AML/ATF funds earmarked for the Department of Justice Canada were used solely for Regime-related purposes.

ER 3.1

In 2014–15, the PPSC will continue to provide legal advice and support to the RCMP and other law enforcement agencies during 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 AML/ATF 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.

AR 3.1

The PPSC dealt with a number of new AML/ATF Regime-related charges, including 5,167 related to possession of proceeds of crime, 59 related to money laundering, and 1 related to terrorism financing under the Criminal Code.The PPSC also dealt with 8 charges under the PCMLTFA.

The PPSC provided legal advice on a number of the files involving new charges. Provision of legal advice was recorded in 3 per cent of the possession of proceeds of crime files and in 30 per cent of money laundering files. The PPSC also provided legal advice on the PCMLTFA files that were handled by in-house counsel.

Where required, PPSC counsel provided legal support and training to law enforcement personnel over the course of their investigations. Resources were also dedicated to policy development and coordination to ensure consistency in prosecutorial activities across all regions.

The PPSC also contributed to Canada's submission to the FATF mutual evaluation exercise by producing trend data and analysis pertaining to AML/ATF Regime-related files and charges.

ER 4.1

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 2014–15, FINTRAC will continue to provide its partners, policy makers and other interested parties with relevant and actionable financial intelligence products that contribute to the public safety of Canadians, and to 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. 

AR 4.1

FINTRAC made 1,260 disclosures of actionable financial intelligence to its AML/ATF Regime partners. Of these disclosures, 923 dealt solely with money laundering, 337 dealt solely with terrorism financing and other threats to the security of Canada, and 109 dealt with all these areas.

Sixty-seven per cent of case disclosures were initiated by Voluntary Information Records (VIRs). VIRs are used by FINTRAC's investigative and intelligence partners to identify priority investigations where financial intelligence could make an important contribution. A total of 1,380 VIRs were received by FINTRAC during 2014-15.

FINTRAC produced strategic financial intelligence to provide a wide analytic perspective on existing and emerging issues of interest to the Canadian security and intelligence community, policy and decision makers, international partners and allies, reporting entities and other stakeholders. FINTRAC also regularly engaged with domestic and international partners, providing assessments, briefs and other strategic intelligence in support of the Government of Canada's intelligence priority-setting exercises, the development of AML/ATF policy and regulatory changes, criminal intelligence needs and the Government of Canada's listing process under the Anti-Terrorism Act.

Understanding terrorism financing in the broader national security context has always been a priority for FINTRAC; however, the issue received additional prominence in 2014-15. During the year, FINTRAC worked closely with domestic and international agencies to develop a common understanding of the threat posed by the Islamic State of Iraq and the Levant (ISIL) and the foreign fighter issue, to better inform Canada's ability to respond to it.

ER 4.2

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.

In 2014–15, 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 will ensure that they receive timely and accurate responses to their inquiries.

AR 4.2

Compliance examinations continued to be the primary instrument for assessing and enforcing compliance and for ensuring that FINTRAC receives quality and timely reports from reporting entities across Canada. FINTRAC conducted 629 examinations, focusing on more complex and lengthy examinations of larger reporting entities in higher-risk sectors in order to determine how effectively they were fulfilling their compliance obligations. The shift from ensuring that reporting entities have the required measures in place to evaluating the effectiveness of those measures represents an important development in FINTRAC's Compliance Program.

FINTRAC also enhanced its Compliance Program to ensure that the most serious cases of non-compliance are dealt with on a priority basis. The selection of follow-up cases is now based on levels of non-compliance observed in previous examinations and on other risk factors available in FINTRAC's risk-assessment model, which ensures that FINTRAC manages risk, provides a treatment commensurate with the level of non-compliance observed, and effectively uses its resources to follow-up on entities with significant levels of non-compliance. 

An Administrative Monetary Penalty (AMP) is the ultimate tool that FINTRAC can apply in a range of remedial actions for improving compliance with the PCMLTFA. If FINTRAC determines that an AMP should be issued, a Notice of Violation (NOV) is sent to the entity, outlining the violation(s) with the PCMLTFA and setting out the penalty amount. FINTRAC issued 16 AMPs in 2014-15. Since the AMP regulations came into force in December 2008, 73 NOVs have been issued, bringing the overall total penalties to $5,117,710. Penalties have been imposed in the following sectors: credit unions/caisses populaires, money services businesses, securities dealers, casinos and real estate. 

FINTRAC's Compliance Program responded to numerous enquiries on a broad range of issues, including reporting obligations, access to reporting systems, and registration of money services businesses. FINTRAC also responded to 7,460 general inquiries from reporting entities or their representatives from across the country.

ER 4.3

Not applicable

AR 4.3

FINTRAC operationalized the changes flowing from Economic Action Plan 2014 Act, No. 1, including the authority to disclose financial intelligence to other AML/ATF Regime partners on threats to Canada's security. FINTRAC also collaborated with the Department of Finance Canada on the development of regulations related to a number of other provisions coming into force.

FINTRAC continued to participate in Department of Finance Canada-led Regime-wide initiatives in preparation for the FATF 2015 mutual evaluation of Canada's AML/ATF Regime.

FINTRAC also made a number of significant contributions to broader Regime-wide and government-wide initiatives, including the National Anti-Drug Strategy and Canada's Counter-Terrorism Strategy.

FINTRAC's Internal Services supported the work of the Centre's Financial Intelligence and Compliance Programs by providing effective Communications, Legal Services, Human Resources, Financial Management, Information Management and Technology, and Security.

ER 5.1

As part of the Federal Policing Re-engineering (FPR), Money Laundering resources were pooled with other federal resources and now form part of Federal Serious and Organized Crime (FSOC). The FSOC units include analytical resources. RCMP money laundering investigators remain located in the high-risk locations and, as part of the FSOC units, will continue to detect and deter money laundering activities, and will continue to monitor and assess money laundering intelligence in order to develop 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.

AR 5.1

The RCMP`s new Federal Policing model focuses on National Tactical Enforcement Priorities (NTEP) investigations, as well as on other federal policing priority investigations. These investigations are of national interest and address threats presented by either individuals or groups involved in money laundering, terrorist financing and other criminality. Financial criminal intelligence is a key factor in this new policing model.

The RCMP conducted the following successful anti-money laundering investigations:

  • The RCMP's Greater Toronto Area (GTA) Financial Crime unit charged 11 individuals after over 150 international investors lost $4.4 million in an alleged elaborate investment scam. The investigation revealed investors funds were never used to get approval of breast cancer scanning machines or to open clinics but instead were laundered or paid out in wages for the benefit for those running the scam. Charges of fraud, money laundering, organized crime offences, and possession of proceeds of crime have been filed. The RCMP was assisted by information from the Ontario Securities Commission, the U.S. Securities and Exchange Commission, and FINTRAC.
  • In August 2014, following a nine-month investigation, members of the RCMP in Alberta disrupted a drug-trafficking organization by raiding a Red Deer home and seizing drugs and cash and subsequently restraining various bank accounts (valued at approximately $103,000). Members of the team with expertise in financial investigations were able to gather evidence to support possession of proceeds of crime and money laundering charges in addition to drug-trafficking charges. FINTRAC intelligence was also used in this case.

Under Foreign Affairs, Trade and Development Canada's Anti-Crime Capacity-Building Program, the RCMP provided assistance to government agencies involved in addressing money laundering and terrorist financing in Panama, Jamaica, and Trinidad and Tobago. In Panama, RCMP Money Laundering experts participated in a needs assessment resulting in the development and delivery of two-week courses on AML investigation techniques to Panamanian law enforcement. In Jamaica and Trinidad and Tobago, mentoring was provided, in cooperation with FINTRAC, to review the analysis of financial intelligence, investigative processes, and the policies and procedures of these jurisdictions. Best practices, tools and processes that will enhance domestic and international cooperation in combatting money laundering and terrorist financing were discussed.

ER 5.2

Through the gathering and analysis of financial intelligence, the FPCO, INSETs and NSESs will focus on converting financial criminal intelligence into proactive investigations, thus enhancing the RCMP's ability to detect and deter terrorist financing activities. The FPCO, INSETs and NSESs will continue to work closely with domestic partners to further criminal investigations of terrorist financing and will continue to participate in, and contribute to, international organizations such as the FATF and international law-enforcement working groups on terrorist financing.

AR 5.2

The RCMP's FPCO supports counter-terrorism strategies with respect to terrorist financing, financial intelligence gathering, investigations and enforcement.

The RCMP produced a Criminal Intelligence Report that asserted that the International Relief Fund for the Afflicted and Needy (IRFAN) transferred approximately $14.6 million to various organizations associated with Hamas (a listed terrorist entity) between 2005 and 2009. The report resulted in the listing of IRFAN as a terrorist entity under the Criminal Code. The list allows federal authorities to more easily seize assets and funds of listed groups.

FPCO submitted 75 Voluntary Information Reports to FINTRAC and received approximately 194 terrorist financing-related disclosures from FINTRAC. FPCO also submitted five requests for terrorist-related information to the CRA's Charity Directorate and received seven requests for information from the Directorate.

FPCO continued to provide training to the RCMP and partner agencies. Two ATF courses were delivered to 42 individuals.

FPCO continued to support the FATF. Building on existing partnerships with the Regime's lead department (the Department of Finance Canada) and the other Regime partners, the RCMP participated in seven groups and conferences for practitioners.

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

ER 6.1

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 AML/ATF 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.

Until March 2013, 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 its work is now being completed by auditors in the Small and Medium Enterprises Directorate (SMED). The Criminal Investigations Program (CIP) continues to receive and analyze all FINTRAC disclosures for intelligence and potential criminal investigations before referring them to the SMED workload development area.

In 2014–15, the CPB will continue to process all disclosures from FINTRAC on a priority basis. The 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 the CPB, there may be an impact on the number of audits completed in 2014–15. These factors may also potentially have an impact on 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.

AR 6.1

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

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

FINTRAC disclosures were also reviewed by 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 disclosure did not have potential for a criminal investigation, it was forwarded to the SMED or the Offshore Compliance Division (OCD) for civil compliance actions.

CID received and reviewed 119 FINTRAC disclosures between April 1, 2014, and March 31, 2015, an increase of 8 disclosures over the previous year. One hundred and four of these disclosures were referred to the SMED, and 15 were referred to CID.  

ER 6.2

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 CRA's 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 AML and ATF partners. 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 to its partners can be used for investigative purposes. In 2014–15, the CRA will continue to identify and respond to cases involving possible links to terrorism by improving systems to support decisions and refining risk management tools. The CRA will contribute to the international fight against terrorist financing and bring regulatory actions to the attention of Canadians. The CRA will also continue to collaborate with AML/ATF Regime partners through domestic interdepartmental working groups and internationally through the FATF and the United Nations.

AR 6.2

With respect to its 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 3,367 applications for registered charitable status and conducted detailed examinations of 20 applications;
  • Performed examination-related functions that resulted in the registration of nine charities, the abandonment of nine applications, the withdrawal of six applications, and the denial of three applications for charitable registration;
  • Completed two audits resulting in one compliance agreement and one education letter and worked on nine active audits; and
  • Received 51 disclosures from, and made 47 disclosures to, Canada's AML/ATF Regime partners.

Internationally, the Charities Directorate co-led an update of the FATF Best Practices Paper "Combatting the Abuse of Non-Profit Organisations (Recommendation 8)."

A representative of the Charities Directorate participated as a subject-matter expert at a capacity-building workshop in Bratislava, Slovakia, organized by the Organization for Security and Co-operation in Europe and the United Nations Counter-Terrorism Committee Executive Directorate.

ER 7.1

Border services officers (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.

AR 7.1

BSOs carried out 1522 currency seizures, an increase of 8.87 per cent over the previous year.

The total amount seized was Can$29,635,189.30, an increase of 27.47 per cent over the previous year. Of the seized currency, $3.4 million was forfeited to the Crown as suspected proceeds of crime (78 Level 4 seizures), and penalties for Level 1, 2 and 3 seizures amounted to nearly Can$700,000.

BSOs collected 43,305 Cross-Border Currency and Monetary Instruments Reports from travellers and couriers, an increase of 3.92 per cent over the previous year.

ER 7.2

Recourse is the legislative or administrative mechanism that provides Canadians with a timely, objective, consistent and transparent internal review process intended to determine the correctness of CBSA decisions and actions taken under the PCMLTFA.

AR 7.2

The Recourse Program rendered decisions on 204 actions taken under the PMCLTFA and received 182 requests for appeals of CBSA decisions and actions taken under the PMCLTFA.

ER 7.3

Internal Services:

  • 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 Program;
  • Continue to work closely with other key government departments on matters related to money laundering and terrorist financing; and
  • Continue to be involved in international conferences and workshops that require the presence of cross-border law enforcement expertise.

AR 7.3

The Cross-Border Currency Reporting (CBCR) Program continued to provide functional guidance to the regions on the administration and enforcement of Part 2 of the PCMLTFA.

The CBSA continued to participate in the Department of Finance Canada-led Mutual Evaluation Coordination Working Group preparing for the 2015 mutual evaluation of Canada's AML/ATF Regime by the FATF. Key activities included contributing risk assessment subject-matter expertise to the development and production of Canada's inaugural inherent risk assessment of anti-money laundering and anti-terrorist financing; and contributing evidence and case studies to demonstrate the effectiveness of Canada's AML/ATF Regime. These activities led to the inclusion of trade and commercial fraud as a top risk in the new National Risk Assessment.

The CBSA:

  • Conducted an internal diagnostic of the CBCR Program and used the findings to identify key program integrity concerns to be addressed on a priority basis in 2015-16 and beyond;
  • Received approvals to redesign CBCR Program training for front-line officers in support of efficient administration and enforcement of Part 2 of the PCMLTFA;
  • Updated CBSA IT software components to ensure that Cross-Border Currency or Monetary Instruments Reports and seizure reports are successfully transmitted from CBSA to FINTRAC;
  • Became a member of the newly formed Public Safety Threat Resourcing Working Group, tasked with coordinating Public Safety Portfolio engagement with the Department of Finance Canada on issues related to Canada's AML/ATF Regime and the 2015 FATF mutual evaluation of Canada, and with developing and coordinating responses to AML/ATF-related issues within the Public Safety Portfolio by identifying program management challenges and possible responses;
  • Continued to engage with FINTRAC, Public Safety and foreign government partners on money laundering and terrorist-financing threats to international trade systems, to better understand Canada's risk exposure in this domain;
  • Continued research and analysis toward the production of a strategic risk assessment of trade fraud, including trade-based money laundering; and
  • Continued to provide FINTRAC with electronic and paper copies of all Cross-Border Currency and Monetary Instrument Reports processed by BSOs, as well as currency seizure information.

Internal Audits and Evaluations

Internal Audits Completed in 2014–15
Title of Internal Audit Internal Audit Type Completion Date
Audit of Acquisition Cards Internal controls December 2014
Audit of the Control Framework for Transfer Payments Internal controls December 2014
Evaluations in Progress or Completed in 2014–15
Link to Department's Program Alignment Architecture Title of the Evaluation Status Deputy Head Approval Date
1.1.2 Economic and Fiscal Policy, Planning and Forecasting Evaluation of the Economic and Fiscal Policy Branch In progress May 2015
1.2.4 Receipts From and Payments to Individuals and Organizations Harbourfront Centre Funding Program Evaluation Report Completed December 2014
1.3.1 Federal Debt Management Evaluation of the Retail Debt Program In progress May 2015
Internal Services Evaluation of the Advanced Policy Analyst Program Completed March 2015

Response to Parliamentary Committees and External Audits

Response to parliamentary committees: Not applicable.

Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development):

The audit focused on how the Canada Revenue Agency manages the Aggressive Tax Planning (ATP) program and how the Department of Finance Canada responds to requests for legislative changes to address the ATP issues that the Canada Revenue Agency identifies.

The objectives of the audit were to determine whether the Canada Revenue Agency is protecting the tax revenue base by detecting and correcting this type of non-compliance and deterring the use of ATP; and whether the Department of Finance Canada has appropriate processes in place to provide timely analysis and, where required, legislative drafting regarding ATP issues identified by the Canada Revenue Agency.

The Department of Finance Canada did not receive any recommendations.

The audit focused on the three main public sector pension plans (the public service, the Canadian Forces and the Royal Canadian Mounted Police [RCMP] pension plans).

The audit examined whether the Treasury Board of Canada Secretariat, the RCMP, National Defence and the Department of Finance Canada, in keeping with their respective responsibilities, considered the relevant information, analyses and scenarios that could affect the plans' costs and thereby impact their sustainability. It also examined whether these entities carried out selected key aspects of their governance and management responsibilities with regard to the pension plans.

Only one recommendation was directed to the Department of Finance Canada. The Office of the Auditor General of Canada recommended that the Department of Finance Canada, in consultation with the Treasury Board of Canada Secretariat, conclude its assessment on the costs and benefits of funding the pre-2000 pension obligations and present its recommendations to the plan sponsor for consideration.

The Department agreed. The Department, in collaboration with the Treasury Board of Canada Secretariat, will conclude the assessment in the 2014–15 fiscal year and will take this assessment, along with other relevant information, into consideration when evaluating the funding of the pre-2000 pension obligations.   

The audit examined whether Industry Canada, the Department of Finance Canada, and Export Development Canada, in fulfilling their respective roles and responsibilities, managed the financial support to the automotive sector in a way that contributed to the viability of the companies and the competitiveness of the sector in Canada.

The Department of Finance Canada did not receive any recommendations.

Response to external audits conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages: Not applicable.