A Report on Plans and Priorities (2001-02 Estimates) - 2
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Section II: Departmental Overview

1. Mandate, Mission and Client Groups

Mandate

The fundamental purpose of the Department of Finance Canada is to help the government develop and implement economic, social and financial policies and programs that foster strong sustainable growth. In its central agency role, it serves as the government’s primary source of analysis and advice on the economic, fiscal, social and tax implications of key government priorities.

Departmental responsibilities include preparing the federal budget; developing tax and tariff policy and legislation; managing federal borrowing on financial markets; administering major transfers of federal funds to provinces and territories; developing regulatory policy for the country's financial sector; and representing Canada within international financial institutions.

This requires monitoring and researching the performance of the Canadian economy in terms of output and growth; employment and income; price stability and monetary policy; and long-term structural changes. The Department is also concerned with financial market developments, with trade and other international economic matters that bear on Canada’s domestic economic performance, and with competitiveness.

Mission The mission of the Department of Finance Canada is to support the Minister of Finance and the Secretary of State (International Financial Institutions) in carrying out their core functions and statutory responsibilities by providing the best possible analysis and policy advice on economic, social and financial issues; implementing government decisions in a timely and efficient manner; communicating government decisions, in the clearest way possible within and outside government; acting as an effective conduit for the views of participants in the economy from all parts of Canada; and  maintaining high-quality support systems and development programs to carry out these functions.

Client Groups

The Department provides services to the following client groups:

• The Government, Cabinet and the Treasury Board – by providing analysis, advice and recommendations regarding economic, social and financial affairs and tax matters. The Department is also responsible for providing instructions for the drafting of legislation in these areas.
• Parliamentary and Senate committees – by being the primary sponsor of bills on taxation and financial matters and steering them through the parliamentary process.
• Parliament, the public and Canadian interest groups – by supporting an expanded program of public information and consultation. This includes responding to requests for information and providing facts to Canadians on key economic, fiscal and tax issues to facilitate wide participation in a more open, broad-based consultation process.
• Departments, agencies, and Crown corporations – by playing an active role in encouraging co-ordination and harmony among all federal initiatives which affect the economy, the financial sector and financial markets.
• Provincial and territorial governments – by constantly working towards improved co-operation on transfer, fiscal, taxation and financial sector issues to ensure a co-ordinated approach to issues of concern to all governments, and by working with provinces and territories as the joint stewards of the Canada Pension Plan (CPP) to ensure that it remains financially secure and stable.
• Financial market participants – by working with market participants to improve debt management practices and to promote the maintenance of a well-functioning market for Government of Canada securities, and by ensuring that investors in Canadian government debt are well-informed of financial and economic developments.
• International economic and finance community – by developing Canada’s policy with respect to the World Bank, the International Monetary Fund and the European Bank for Reconstruction and Development; by negotiating double taxation treaties with our treaty partners; and by representing Canada in a broad range of official international forums (such as the G-7).
• International trade community – by being responsible for Canada’s economic import policy, including the Customs Tariff, trade remedy legislation and trade in financial services, and by participating in international trade forums (such as the World Trade Organization or WTO) and in related negotiations as they concern trade, import policy, services and investment issues.

2. Departmental Organization

The Department of Finance operates under sections 14–16 of the Financial Administration Act, which provides the Minister with broad responsibility for "the management of the Consolidated Revenue Fund and the supervision, control and direction of all matters relating to the financial affairs of Canada not by law assigned to the Treasury Board or to any other Minister."

2.A Departmental Organization: Lines of Business

Business line objectives and descriptions are presented below for the three departmental programs.

Economic, Social and Financial Policies Program

Policies and Advice Business Line 

Objective:

Appropriate policies and sound advice with respect to economic, social and financial conditions and the government’s agenda.

Description:

• Economic and Fiscal Policy: the domestic and international economic and financial outlook; the government’s overall fiscal framework, expenditure plan and resource allocation; and the government’s overall economic policy framework;
• International Trade and Finance: with specific reference to import tariffs and trade remedies; foreign direct investment; economic co-operation; export financing; international development assistance and international financial relations (including G-7 and G-20);
• Tax Policy: the development and evaluation of federal taxation policies and legislation with respect to income, sales and excise taxes;
• Financial Sector Policy: government debt, cash and reserves management; legislation governing federally regulated financial institutions; transaction approvals; anti-money-laundering initiatives; financial, investment and borrowing issues relating to Crown corporations, departments and agencies; and issues related to financing "the new knowledge-based economy";
• Federal-Provincial Relations and Social Policy: federal-provincial fiscal and economic relations and Canadian social policies and programs;
• Economic Development and Corporate Finance: the economic, fiscal and financial implications of the government’s micro-economic policies and programs, including loans, investments and guarantees of the Crown; proposals for assistance to major projects or corporate restructuring initiatives advanced by the private sector; and the management and, as appropriate, the privatization of Crown corporations and other corporate holdings; and
• Consultations and Communications: communications strategies and initiatives within all aspects of policy development; broad consultations to provide the Minister and Department with public input on policy options.

International Financial Organizations Business Line 

Objective: Responsible administration of international financial obligations and subscriptions.

Description

:

• payments to such organizations as the International Development Association (IDA), the Poverty Reduction and Growth Facility (PRGF), and the European Bank for Reconstruction and Development (EBRD);
• grants and contributions to international debtors under Paris Club;
• through Canada’s governorship and representation on the executive boards of these institutions, works to ensure that resources are used efficiently to promote growth and equitable development in the world economy.

Domestic Coinage Business Line

Objective:

Payment of the production and distribution costs for domestic circulating coinage.

Description:

• payments out of the Consolidated Revenue Fund to the Royal Canadian Mint for the production and distribution of domestic circulating coinage to meet the needs of the Canadian economy;
• coins are sold to financial institutions at face value and the proceeds are deposited in the Consolidated Revenue Fund.

Corporate Administration Business Line 

Objective:

Effective and efficient corporate administration.

Description:

• Appropriate departmental management;
• Strategic communications advice;
• Suitable public affairs support;
• Sound legal advice;
• Effective and efficient financial, human resources, information technology, security and administrative systems and expertise.

Public Debt Program

Interest and Other Costs Business Line

Objective:

The funding of interest and of service costs of the public debt and of the issuing costs of wholesale debt, as necessary; the provision of stable, low cost funding for the government; and the maintenance of a well-functioning market in Government of Canada securities.

Description

:

• management of the government’s borrowing program. (The Department works closely with the Bank of Canada on all aspects of debt management since the Bank acts as official fiscal agent for the federal government in the area of debt operations and provides advice related to overall debt strategy.)

Canada Investment and Savings Business Line 

Objective: The provision of funding for the government consistent with its fiscal plan, and balancing cost, risk and market considerations; maintenance of a reasonable and sustainable retail share of the total federal debt, thereby ensuring a broad investor base for government debt; and the offer of attractive products that benefit all Canadians.

Description:

• the development and marketing of retail debt non-marketable instruments such as Canada Savings Bonds (CSBs) and Canada Premium Bonds (CPBs) directly to Canadians, through employers and in co-operation with financial institutions, by Canada Investment and Savings (a special operating agency reporting to the Deputy Minister of Finance).

Federal-Provincial Transfers Program

Transfer Payments Business Line

Objective:

transfer payments pursuant to statutes with respect to the Canada Health and Social Transfer (CHST), Equalization and other transfers, and pursuant to agreements with respect to Territorial Formula Financing.

Description:

• Canada Health and Social Transfer: payments to provinces are made according to legislation and include both cash and tax transfers.
• Fiscal Equalization: payments to provinces are made according to precise formulas embodied in legislation and regulations.
• Territorial Formula Financing: payments to territorial governments are made according to formulas embodied in federal-territorial agreements.
• Other Transfer Payments: funds are provided to, or recovered from, provincial governments under various statutory authorities.

2.B Departmental Organization: Branch Structure

Six policy branches supported by Consultations and Communications Branch, Law Branch and Corporate Services Branch deliver the above-noted programs, as well as the associated business lines. The organizational structure displayed on the following page shows the positions responsible for each business line.

2.C Departmental Employees

The Department of Finance has a strong culture of professionalism and excellence. We are a knowledge organization, a policy department and a central agency. We have extremely competent and exceptionally committed employees who have joined the Department because they believe that public service is both different and important and that they can make a real contribution to their country.

Of our total workforce, the two largest groups are analysts/economists (52 per cent) and managers (20 per cent). Among the analysts/economists:

• the average age is 35;
• 52 per cent speak both English and French;
• 30 per cent have French as their mother tongue;
• 10 per cent have identified themselves as belonging to a visible minority.

Our people, and the culture and environment in which they work, are our key assets. Our ongoing challenge as an organization is continually to build a workplace that attracts and retains the best and the brightest knowledge workers. Departmental management views comprehensive human resource management as a key on-going priority and is committed to moving forward on our departmental Human Resources Plan.

Program, Business Line and Organization Chart

 

3. Planning Context

The key strategic priority for the Department is to help the government make the decisions that will contribute the most to strong and sustainable economic growth. Such growth will allow both individuals to enjoy sustained increases in living standards and governments to have the resources required to provide high-quality public services.

The Department will make these efforts in the midst of a challenging environment. As was noted in the Speech from the Throne on January 30, 2001, Canada and Canadians are called to compete in a faster-paced, technology-driven world economy; to respond to economic uncertainty among our trading partners; to continue to strengthen the fabric of our society in an era of increasing globalization; and to advance our Canadian interests and values in the international arena.

Canada’s recent economic performance has been impressive. The economy grew at a strong pace in 2000, while the unemployment rate declined to its lowest level in 25 years. At the same time, Canada’s inflation rate over the past five years has averaged 1.7 per cent – well below the average for G-7 countries. All Canadians can take pride in the strong performance of our economy in recent years, but there is no room for complacency. The U.S. economy has slowed more than expected, and uncertainty about future U.S. prospects has increased. This will have an impact on the global economy. In this context, given the improved fundamentals in recent years and the massive tax cuts which took effect on January 1, 2001, Canada is well-positioned to ride through any short-term economic downturn.

4. Departmental Planned Spending

	Forecast Spending  2000–01*	Planned Spending 2001–02	Planned Spending 2002–03
	($ millions)
Budgetary Main Estimates (gross)	64,404.3	68,916.7	70,116.0
Non-Budgetary Main Estimates (gross)†	462.1	24.2	26.3
Less: Respendable revenue	7.1	7.4	7.4
Total Main Estimates	64,859.3	68,933.5	70,134.9
Adjustments	5,459.8	–	–
Net Planned Spending	70,319.1	68,933.5	70,134.9
Less: Non-respendable revenue	198.7	100.8	105.6
Plus: Cost of services received without charge	10.1	11.3	11.4
Net Cost of Program	70,130.5	68,844.0	70,040.7
Full-Time Equivalents	811	793	791
* Reflects best forecast of total planned spending to the end of the fiscal year. † Expenditures decreased from 2000–01 because expenditures related to the International Development Association and the International Monetary Fund’s Poverty Reduction and Growth Facility were reduced. Reference should be made to Table 1 in Section V of this Report for the presentation of Net Planned Spending and Full-Time Equivalents by program and business line.
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