2017-2020 Departmental Sustainable Development Strategy

October 2017

Section 1: Context for the Departmental Sustainable Development Strategy

The 2016–19 Federal Sustainable Development Strategy (FSDS) presents the Government of Canada’s sustainable development goals and targets, as required by the Federal Sustainable Development Act. In keeping with the objectives of the Act to integrate environmental, social and economic considerations into decision-making, and make such decisions more transparent and accountable to Parliament, the Department of Finance Canada supports reaching goals laid out in the FSDS through the activities described in this Departmental Sustainable Development Strategy (DSDS).

Section 2: Sustainable Development in the Department of Finance Canada

The Department of Finance Canada’s primary focus is contributing to a strong economy and sound public finances for Canadians. The Department is the Government of Canada's primary source of analysis and advice on the broad economic and financial affairs of Canada. In addition to preparing the budget, the Department plays an important role in the development and implementation of government policy. As a central agency, the Department provides analysis and advice on the economic merit and fiscal implications of policy and program proposals developed by other government departments. In its central agency capacity, departmental 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 representing Canada within international financial institutions.

As a policy-oriented department, the Department 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, and the environment. 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 dimensions 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.

The Department focuses on using its resources to contribute to a strong economy and sound public finances for Canadians, with emphasis on sound fiscal management, sustainable economic growth, a sound social policy framework, and effective international engagement. Based on the idea that a healthy economy starts with a strong and growing middle class, the Department will remain focused on creating economic opportunities for all Canadians by promoting strong, sustainable growth. Overall, the Department is committed to a more prosperous, inclusive and sustainable economic future. Detailed information on how the Department of Finance Canada will use its resources to contribute to a strong economy and sound public finances is available in the 2017-18 Departmental Plan.

The Department of Finance Canada contributes to the following FSDS goals, including:

FSDS Goal: Low Carbon Government - To advance the commitment, the Department of Finance Canada has targeted actions under the following areas:

Mobilizing employees through the joint “TBS-FIN Green Network”

  • The network consists of employees who have a passion for and are committed to ongoing engagement to promote and facilitate concrete environmentally sustainable choices and actions within the Department. For sustained results, the network will continue to concentrate its efforts on ongoing engagement such as the Green Office Challenge, the Enviro Fair, and seeking to bring behavior change in targeted areas. The results will be reported and celebrated in an eco-friendly fashion.

Modernizing the fleet

  • Reducing carbon intensity by replacing executive vehicles at the end of their life-cycle with electric vehicles, hybrids, or more fuel efficient vehicles.

Promoting modernization of work practices

  • Changing business processes by use of new systems and tools, including WIFI and technology-enabled meeting rooms, to reduce dependency on paper.

Taking action to green procurement

  • Integrating environmental considerations into procurement management processes and controls.
  • Leveraging common-use procurement instruments where available and feasible.
  • Ensuring decision-makers have the necessary training and awareness to support green procurement.
  • Ensuring key officials include contribution to and support for the Government of Canada Policy on Green Procurement objectives in their performance evaluations.

FSDS Goal: Effective Action on Climate Change - A central component of the Pan-Canadian Framework on Clean Growth and Climate Change is the commitment to pricing carbon pollution across the country by 2018. In October 2016, the Government published a benchmark for ensuring that carbon pricing applies to a broad set of emission sources throughout Canada by 2018 with increasing stringency over time. The Government also committed to implement a federal carbon pricing backstop system that will apply in any province or territory that does not have a carbon pricing system in place by 2018 that aligns with the benchmark. To this end, the Government released a technical paper on the federal carbon pricing backstop in May 2017. The Department will be responsible for putting into place the carbon levy component of the federal carbon pricing backstop system.

The Green Levy applies to passenger vehicles with a weighted (55% city and 45% 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.

To support Canada’s commitment to phase out inefficient fossil fuel subsidies, Budget 2017 also announced modifications to the tax treatment of successful oil and gas exploratory drilling and removal of the tax preference that allows small oil and gas companies to reclassify Canadian development expenses as immediately deductible Canadian exploration expenses when they are renounced to flow-through share investors.

FSDS Goal: Clean Energy - An accelerated capital cost allowance (CCA) for income tax purposes is provided under CCA Class 43.2 (50% 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 (e.g., wind, solar and small hydro), using fuels from waste (e.g., landfill gas, wood waste and manure) or conserves energy by making efficient use of fossil fuels (e.g., high efficiency cogeneration systems). Budget 2016 expanded eligibility for accelerated capital cost allowance to include electric vehicle charging stations, and Budget 2017 announced the extension of the accelerated capital cost allowance to a broader range of geothermal projects and expenses, and expansion of the range of geothermal energy project expenses that are eligible as Canadian renewable and conservation expenses, which can be fully deducted in the year incurred.

FSDS Goal: Sustainably Managed Lands and Forests - 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. Donations of ecologically sensitive land, or easements, covenants and servitudes on such land can be carried forward for tax purposes up 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 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 and Climate Change Canada.

Section 3: Commitments for the Department of Finance Canada

Low-Carbon Government: The Government of Canada leads by example by making its operations low-carbon
Responsible Minister: All ministers
Low-Carbon Government

FSDS target(s)
FSDS Contributing Action(s) Corresponding departmental
action(s)
Contribution by each departmental action to the FSDS goal and target Starting point(s) where available, and your choice of performance indicators for departmental actions Program(s) in which the departmental actions will occur
Reduce GHG emissions from federal government buildings and fleets by 40% below 2005 levels by 2030, with an aspiration to achieve this reduction by 2025 Improve the energy efficiency of our buildings/operations The Department of Finance Canada is a tenant in a LEED Gold certified building that was built to the latest design approaches and building technologies for sustainable development. The Department actively works with Public Services and Procurement Canada, the building owner and co-tenant, to promote and support ongoing greening of building operations leading to a reduction in GHG emissions. GHG emissions are reported by Public Services and Procurement Canada. Internal Services
  Modernize our fleet Reduce carbon intensity by replacing executive vehicles at the end of their life-cycle with electric vehicles, hybrids, or more fuel efficient vehicles.

Promote behavior change – e.g. anti-idling campaigns, driver training.

Promoting fleet infrastructure - e.g. charging stations.
Replacing executive vehicles with new electric, hybrid or more fuel efficient vehicles will contribute to GHG reductions.

Drivers of executive vehicles will be advised of anti-idling recommendations to encourage reductions in GHG emissions.
The Department has two executive vehicles that will be replaced when they reach the end of their life-cycle.

The Department has charging stations for electric vehicles available in the parking garage.
Internal Services
  Support the transition to a low-carbon economy through green procurement Integrate environmental considerations into procurement management purchasing decisions, processes and controls.

Ensure decisions-makers have the necessary training and awareness to support green procurement.

Ensure key officials include contribution to and support for the Government of Canada Policy on Green Procurement objectives in their performance evaluations.
The Department will continue to reduce GHG emissions by incorporating environmental considerations into its purchasing decisions. Environmental considerations are embedded in the Department’s procurement activities. Goods are usually purchased through Public Services and Procurement Canada (PSPC) or Shared Services Canada (SSC) 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. Of all supplier payments, 90% are made via direct deposit.

The Director of the Corporate Administrative Services Division and the Team Leader of the Procurement and Materiel Management Division will have performance objectives supporting green procurement activities.
  • Target: 100%
Departmental functional specialists in procurement and material management will complete the Green Procurement course.
  • Target: 100%
The Department will use common-use procurement instruments for IT hardware purchases (desktops, computers, laptops and tablets).
  • Target: 90%
The Department will purchase copy paper, commercial printing, and/or envelopes containing a minimum of 30% recycled content and be certified to a recognized environmental standard to reduce the environmental impact of its production.
  • Target: 90%
Internal Services
  Promote sustainable travel practices Promoting the use of the Department’s video conferencing, teleconference and telepresence facilities.

Supporting and promoting sustainable commuting options for employee travel to work such as walking, cycling, public transit and car pools.
Actions taken to reduce travel or switch to less GHG intensive modes of transportation will reduce GHG emissions.   Internal Services
  Promote sustainable workplace operation Increase the waste diverted from landfill through the promotion and use of recycling centres and composting programs.

Engage employees in greening government operations practices.

Maintain or improve existing approaches to sustainable workplace practices (printer ratios, paper usage, and green meetings).
  Use digital display panels to communicate tips and facts to employees to promote sustainable workplace operations.

Co-host the building’s annual Enviro Fair promoting sustainable practices in the office and home.
Internal Services
Effective Action on Climate Change: A low-carbon economy contributes to limiting global average temperature rise to well below two degrees Celsius and supports efforts to limit the increase to 1.5 degrees Celsius
Responsible Minister: Minister of Environment and Climate Change; supported by a whole-of-government approach to implementation
Effective Action on Climate Change FSDS target(s) FSDS Contributing Action(s) Corresponding departmental
action(s)
Contribution by each departmental action to the FSDS goal and target Starting point(s) where available, and your choice of performance indicators for departmental actions Program(s) in which the departmental actions will occur
By 2030, reduce Canada’s total GHG emissions by 30%, relative to 2005 emission levels Support voluntary action to reduce GHG emissions and adapt to climate change Support the Government of Canada’s commitment that carbon pricing be implemented in all provinces and territories by 2018, starting by putting into place the carbon levy component of the federal carbon pricing backstop system that will apply to provinces and territories that do not introduce carbon pricing systems that meet the federal benchmark. The federal carbon pricing backstop system will ensure that carbon pricing is implemented in all provinces and territories in 2018 and thus encourage the use of clean technologies which can reduce the amount of GHG emissions emitted. Starting point: The Government released a technical paper on the carbon pricing backstop in May 2017.

Target(s)/performance indicator(s): Legislation is in place in 2018 that would enable the carbon levy component of the federal carbon pricing backstop to be implemented in provinces and territories as necessary.
1.1.: Economic and Fiscal Policy Framework
  Support voluntary action to reduce GHG emissions and adapt to climate change Continue to impose a Green Levy on certain fuel-inefficient passenger vehicles sold in Canada. The Green Levy encourages the development, production and purchase of more fuel efficient vehicles by making it more expensive to buy less fuel efficient vehicles. Starting point: The Green Levy raised revenues of around $9 million in 2015-2016.

Target(s)/performance indicator(s): Performance will be evaluated in terms of the revenues generated by the Green Levy each year (these revenues will tend to decline over time if the levy helps incentivize consumers to purchase fewer fuel-inefficient vehicles).
1.1.: Economic and Fiscal Policy Framework

 

Clean Energy: All Canadians have access to affordable, reliable and sustainable energy
Responsible Minister: Minister of Natural Resources
Clean Energy FSDS target(s) FSDS Contributing Action(s) Corresponding departmental
action(s)
Contribution by each departmental action to the FSDS goal and target Starting point(s) where available, and your choice of performance indicators for departmental actions Program(s) in which the departmental actions will occur
By 2030, 90% and in the long term, 100% of Canada’s electricity is generated from renewable and non-emitting sources Support voluntary action to reduce GHG and air pollutant emissions through clean energy generation and consumption Provide an incentive for investment in clean energy equipment available through the accelerated capital cost allowance for clean energy and energy conservation equipment (Class 43.1/43.2). The accelerated capital cost allowance for clean energy generation makes investment in clean energy generation equipment less expensive by providing a tax incentive. Starting point: A tax incentive for clean energy generation equipment has been in place since 1976.

Target(s)/performance indicator(s): Performance will be evaluated on the basis of the amount of new investment in Class 43.1/43.2 equipment relative to previous years.
1.1.: Economic and Fiscal Policy Framework

 

Sustainably Managed Lands and Forests: Lands and forests support biodiversity and provide a variety of ecosystem services for generations to come
Responsible Minister: Minister of Environment and Climate Change; Minister of Natural Resources
Sustainably Managed Lands and Forests FSDS target(s) FSDS Contributing Action(s) Corresponding departmental
action(s)
Contribution by each departmental action to the FSDS goal and target Starting point(s) where available, and your choice of performance indicators for departmental actions Program(s) in which the departmental actions will occur
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 Conserve natural spaces 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, and the continued protection of land which has been donated. The Ecological Gifts Program encourages the conservation of ecologically sensitive land by providing a tax incentive for the donation of such land. Starting point: To measure our success in conserving ecologically-sensitive land, we track the area protected by the Ecological Gifts Program. As of March 2016, 179,466 hectares of land were under protection.

Target(s)/performance indicator(s): Performance will be evaluated on the basis of the amount of increase to the total cumulative land area that is conserved under the Ecological Gifts Program.
1.1.: Economic and Fiscal Policy Framework
  Conserve natural spaces Support the passage by Parliament of the Budget 2017 Ecological Gifts measures. These measures would strengthen the protection of ecologically sensitive land and expand slightly the types of gifts that could be made under the program. Target performance indicator: Passage of the legislation. 1.1.: Economic and Fiscal Policy Framework

Section 4: Integrating sustainable development

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 wellbeing 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 will continue to ensure that its decision-making process includes consideration of FSDS goals and targets through its strategic environmental assessment (SEA) process. An SEA for policy, plan or program proposals includes an analysis of the impacts of the given proposal on the environment, including on FSDS goals and targets.

Public statements on the results of the Department of Finance Canada’s assessments are released when an initiative that has undergone a detailed SEA is announced (see here). The purpose of the public statement is to demonstrate that the environmental effects, including the impacts on achieving the FSDS goals and targets, of the approved policy, plan or program have been considered during proposal development and decision-making.