Archived - Sustainable Development Strategy: 
Planned Results for 2003-04

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The Department of Finance's 2001-03 sustainable development strategy (SDS) was released in February 2001. Finance's two key goals in sustainable development for 2001-03 are ensuring intergenerational equity and more fully integrating economic, social and environmental considerations and objectives into policy making. To help focus the Department's efforts on these goals, the 2001-03 SDS identifies four theme areas or key issues upon which to base action over the three years: Building the Future; Integrating the Economy and the Environment; Sustainable Development in the Global Economy; and Greening Operations. The Department's sustainable development action plan sets out a number of objectives and targeted actions for 2001-03 in each of these theme areas. The following table shows the planned results for fiscal year 2003-04 for each targeted action.


Actions for 2001-03

Planned Results for 2003-04

Key Issue: Building the Future

Objective: Maintaining a Healthy Fiscal Climate

Continue to pursue the Government's Debt Repayment Plan to ensure the debt-to-GDP (gross domestic product) ratio remains on a permanent downward track

In the February 2003 federal budget, the Government announced it expected to post balanced budgets or better for 2002-03, 2003-04 and 2004-05. In 2003-04, the debt-to-GDP ratio is expected to fall from 46.5 per cent in 2001-02 to 41.7 per cent, given that the $3 billion Contingency Reserve, if not required to meet unforeseen circumstances, is used to reduce the debt.

Continue implementation of the Government's Five-Year Tax Reduction Plan

As part of the Government's long-term fiscal plan, the $100- billion Five-Year Tax Reduction Plan has been legislated. Most of the measures contained in the Plan have now been implemented.

The 2003 Budget confirmed that the $100 billion Five-Year Tax Reduction Plan would be fully implemented and builds on this plan by enhancing support for Canadian families and communities, and contributing further to a productive and sustainable economy.

Objective: Building a Strong Society

Ensure predictable and growing funding for health and social programs

Implement extended funding arrangement under the Canada Health and Social Transfer (and the new Canada Health Transfer and Canada Social Transfer) and other targeted funds for health reform and medical equipment as set out at the First Ministers' Meeting in February 2003 and confirmed in Budget 2003.

Conduct a mid-term review of the Canada Health and Social Transfer (CHST) in 2003-04 and set a new five-year legislative funding track by the end of 2003-04

First Ministers agreed to the restructuring of the CHST in February 2003. A new five-year funding track for health and social transfers, to be set out in legislation, was confirmed in Budget 2003. Regular federal-provincial/territorial consultations will be held on the CHST and other transfer-related issues.

Ensure fiscal disparities are addressed through the equalization and Territorial Formula Financing programs

In the lead up to program renewal in 2004-05, federal officials will continue their review and consultations with provinces to ensure that the Equalization program continues to meet its objectives. Federal and territorial officials will similarly examine Territorial Formula Financing.

Monitor developments and make adjustments when necessary, or in the context of the Canada Pension Plan (CPP) 2001-03 review, to ensure that the retirement income system remains sustainable and meets seniors' needs

Prepare for the next CPP triennial review 
(2004 - 06)

Bill C-3 is expected to be passed by Parliament early 2003. The Bill proposes to transfer the bond portfolio and operating balance that are currently managed by the federal government to the CPP Investment Board. Consolidating all assets in one professionally managed organisation will allow the CPP Investment Board to determine the best asset mix and investment strategy to enhance rates of return and manage risks for plan members. Bill C-3 completes the investment changes agreed to in 1997 as part of the federal provincial reform package.

The passage of Bill C-3 will bring the 2001-03 triennial review to a close. The review confirms that the Canada Pension Plan is financially sound.

Implement the increases in RPP and RRSP limits announced in Budget 2003. This will strengthen the third pillar of the retirement income system, after the Government secured the two public pillars, namely the CPP and the OAS/GIS.

Prepare the CPP annual report jointly with Human Resources Development Canada.

Objective: Implementing Key Federal Sustainable Development Priorities

In the context of planning for future budgets, work with other federal departments and stakeholders to identify ways to address sustainable development priorities

Worked with other federal departments on options to implement the climate change plan for Canada. Budget 2003 provides funding of $2 billion over five years for climate change measures, including $250 million for Sustainable Development Technology Canada and $50 million for the Canadian Foundation for Climate and Atmospheric Sciences in 2003-04. The remaining $1.7 billion is to be allocated towards other cost-effective measures to reduce greenhouse gas emissions in Canada in such areas as energy efficiency, renewable energy, sustainable transportation and new alternative fuels over the next five years. Budget 2003 also provides $1B over 5 years to address federal contaminated sites; improve air quality; better assess and manage toxic substances; further protect Canada's species at risk; support implementation of Canada's commitments at the World Summit on Sustainable Development; upgrade, maintain and monitor water and waste water systems and reserves; commence the establishment of 10 new national parks and 5 new national marine conservation areas and restore the ecological health of existing parks.

Key Issue: Integrating the Economy and the Environment

Objective: Using the Tax System

Examine areas where the tax system may be having an impact on the longer-term goals of sustainable development

The Department will continue to monitor various aspects of the tax system and consider possible impacts related to the achievement of the Government's sustainable development goals.

The 2001 budget extended the existing intergenerational tax-deferred rollover available for farm property to transfers of commercial woodlots that are operated in accordance with a prescribed forest management plan. Regional consultations with interested stakeholders on the specific criteria for prescribed forest management plans have been completed and draft regulations will be developed, taking into consideration the comments received.

In 2002, the Department carried out consultations with industry to determine whether additional improvements to Capital Cost Allowance Class 43.1 are required. As a result, the 2003 Budget extended Class 43.1 to include qualifying fuel cell equipment, equipment used to convert biomass into bio-oil and certain equipment used to generate heat for use within greenhouse operations. Draft regulations to implement these changes will be prepared. The Department will to monitor developments in renewable and alternative energy technologies.

Assess policy options aimed at levelling the playing field between various economic activities

The Department will continue to pursue a fair, efficient and competitive system for all sectors of the economy.

It will continue to work with officials in other government departments to encourage co-ordination and coherence among federal initiatives that impact the economy and the environment.

Evaluate all environment-related tax proposals received from stakeholders, including those to encourage environmentally positive activities and discourage environmentally negative ones

The Department will evaluate tax proposals put forward by stakeholders on an ongoing basis. As well, the Department will continue to monitor the work of non-governmental organisations, academics and other government departments proposing possible changes to the tax system, including proposals relating to the use of excise levies.

The Department will support the policy priorities of the government for environment and climate change by researching and analyzing the impacts of the tax system and developing policy proposals for consideration by the government.

Objective: Developing Uses of Economic Instruments

Lead further work on the design of a potential greenhouse gas emissions trading system in co-operation with other federal departments, other governments and stakeholders

A domestic emissions trading analysis group was established by the Climate Change Secretariat to conduct and co-ordinate work on emissions trading under the federal-provincial climate change process. Finance participated in work on emissions trading in 2002-03 through its participation in the federal-provincial Domestic Emissions Trading Working Group (DETWG). The DETWG released its report to federal and provincial ministers of energy and the environment in 2002. This analysis was reflected in the federal government's Climate Change Plan for Canada. The government will continue to do further work on key components of the plan, including the design of a DET/covenants system, and Finance will participate in this work. Additionally, the Department will continue to work to assess the tax treatment of permits under a domestic emissions trading system.

Continue to conduct economic research and analysis, including through the use of one of the economic models the Department maintains, to assess the potential costs of a major economic instrument, such as emissions trading, and other policy options to reduce emissions of greenhouse gases

The Department will continue its program of research in these areas in 2003-04.

Participate in an initiative led by the National Round Table on the Environment and the Economy (NRTEE) on ecological fiscal reform (EFR) over 2000-02

The Department will continue to participate in the work of the EFR program.

Monitor and evaluate the use of economic instruments in the Organisation for Economic Co-operation and Development (OECD) countries

The Department will continue to monitor the use of these instruments in other OECD countries.

As necessary, it will participate in and evaluate the work of OECD groups studying the linkages between economic and environmental policies as well as future trends in tax policies with environmental implications.

Objective: Integrated Decision Making - Increasing the Knowledge Base

Participate in the Budget 2000 initiative on environmental and sustainable development indicators led by NRTEE and Environment Canada over 2000-03

Continue to participate in NRTEE's Environmental and Sustainable Development Indicators (ESDIs) Initiative as a member of the Steering Committee until its completion in Spring 2003.

Prepare a case study on different nations' use of assistance for green power to be completed by 2003

Study was completed in December of 2002 and will be distributed within the department in the coming year.

Develop an inventory of economic research on the links between the new economy and the environment beginning in 2001

The centrally-held inventory has been developed and is available on the Department's intranet. It will be continually updated to ensure the most recent articles are included.

Key Issue: Sustainable Development in the Global Economy

Objective: Participating in Negotiating International Environmental Agreements

Assist in the preparation of Canada's approach to international negotiations on climate change

Continue to participate in interdepartmental and stakeholder meetings on developing Canada's approach to climate change.

Support initiatives to enhance the understanding of linkages between multilateral environmental agreements (MEAs) and trade rules

Participate in the development of the Canadian position for multilateral negotiations on the relationship between existing World Trade Organization (WTO) rules and trade obligations set out in MEAs, as called for in the Doha Ministerial Declaration.

Objective: Integrating Environment Into Future Negotiations on Trade and Investment Agreements

Work with the Department of Foreign Affairs and International Trade (DFAIT) on trade and environment linkages in the context of the WTO and possible future trade negotiations

Participate in the development of the Canadian position for multilateral negotiations on trade and the environment, as called for in the Doha Ministerial Declaration.

Monitor or participate in the work of the WTO Committee on Trade and Environment (CTE). More specifically, help prepare the report that the CTE has been mandated to submit at the Fifth Session of the Ministerial Conference in 2003.

Work with DFAIT and Industry Canada to promote free trade in the environmental sector and continue to review specific requests to remove tariffs where they are identified as a significant disincentive to the acquisition of environmental technology products

Develop the Canadian position for negotiations as a follow-up to the Doha Ministerial Declaration. The Declaration calls for negotiations on the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.

Objective: Developing Environmental Assessment Guidelines for Export Credit Agencies

Together with DFAIT, actively participate in and contribute to the work of developing common environmental guidelines for export credit agencies at the OECD and at the G-8 level

Canada joins all OECD members, except the US and Turkey, in implementing an agreed framework for the environmental review of projects supported by official export credit agencies. The Department will continue to work with DFAIT and Export Development Canada to ensure sound environmental practices.

Objective: Working With International Financial Institutions (IFIs)

Promote macroeconomic stability in the international financial system and in individual emerging economies

The Department will continue providing policy advice to Canada's Executive Directors at the IFIs on key macroeconomic policy documents. These include country economic assessments under the Article IV and World Bank Country Assistance Strategy (CAS) discussions. Both facilitate an annual examination of the macroeconomic and financial well-being of least developed and developing countries. More broadly, the Department's leadership role in the G-20 (the G-20 includes the World Bank and the International Monetary Fund) involves working towards strengthening the international financial system.

Support the work of IFIs in the development of alternative energy projects

The Department will continue to monitor major policy work by the IFIs in the area of sustainable development. The Department will continue to support the World Bank's alternative energy projects.

Work with IFIs, civil society and other stakeholders to operationalize the Comprehensive Development Framework (CDF) as a practical strategy for promoting long-term sustainable development in poor countries

While the CDF has largely been mainstreamed into the day-to-day operations of the IFIs, certain challenges remain, such as ensuring environmental protection is included in the World Bank's CASs and individual country Poverty Reduction Strategy Papers. The Department will continue to work with all stakeholders to promote long-term sustainable development in an efficient, transparent, cost-conscious and results-based framework.

Expand the focus on sustainable development in the Department's annual reports to Parliament on the Bretton Woods institutions and the European Bank for Reconstruction and Development (EBRD)

The Department's annual reports to Parliament on the Bretton Woods institutions and the EBRD, to be tabled in spring 2003, will continue to emphasize sustainable development, demonstrating Canada's strong support for this issue.

Objective: Increasing Knowledge and Understanding of International Environmental Financial Practices
Participate in upcoming activities and conferences of the United Nations Environment Programme (UNEP) Financial Services Initiatives Pursue initiatives to increase knowledge of socially responsible financial
  • continue to attend UNEP FI conferences and other events on related subjects;
  • continue to play an active role in inter-departmental activities on the issue, as they pertain to the financial sector;
  • work with federal financial institutions in developing their annual Public Accountability Statement.

Key issue: Greening Operations

Objective: Enhancing Awareness of the Environmental Impact of Our Operations

Develop and implement a communications strategy to encourage the adoption of best practices

Communication strategy has been implemented.

Promote Earth Day and Canadian Environment Week

Activities are based on a theme provided by the co-ordinators of these initiatives. The Department will participate in the Commuter Challenge 2003 (a competition among departments comparing the number of employees who opt for alternatives to driving to work) and will host several employee awareness events to promote Earth Day 2003 and Canadian Environment Week 2003.

Objective: Developing Tools and Implementing Programs to Support Best Practices

Review the Department's existing internal environmental programs

Program review process has been completed.

Establish baselines and benchmarks for progress in five areas (solid waste, energy use, fleet management, procurement and toxic substances)

Baselines and benchmarks will be established for Energy Efficiency Awareness, Purchasing Guide, Duplex Photocopying, Side-Saddle Program, Toxic Substances, and Procurement-Related Training.

Develop departmental inventories in key areas for regulated substances

Inventories were developed in key areas for regulated substances.

Promote the use of ethanol-blended fuels for Finance's three vehicles

A glove box list of ethanol fuel service providers has been developed and will be distributed to all fleet drivers in 2003.

Develop a purchasing guide for and provide related training to the relevant departmental employees

A draft purchasing guide has been completed. Training objectives have been assessed and solutions are being developed. Training will be delivered in 2003.

Develop means for selling debt to Canadians electronically

Canada Investment and Savings will enhance electronic access to CANADA SAVINGS BOND (CSB) payroll customers through on-line account enquiry and redemption capabilities, and plans to further streamline access for those who purchase through financial institutions. The 2001 E-campaign pilot, focussed on purchasing CSB's on-line, has been expanded throughout the public sector and is now being offered to private sector organizations.