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Archived - Supplementary Document to the Department's 2006-07 Report on Plans and Priorities (RPP) Regarding Implementation of the 2004-06 Sustainable Development Strategy (SDS)

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This information would normally be made available at the beginning of a fiscal year. However, for 2006/07 it was delayed due to the prorogation of Parliament. Therefore, some of the matters referred to prospectively herein may have already been accomplished or overtaken by other events.


Target (2004-06) Activities anticipated within the coming year (06-07)

Key Issue 1: Building the Future

Objective 1a: Maintaining a Healthy Fiscal Climate
1a.1: Continue to pursue the Government's Debt Repayment Plan to ensure the federal debt-to-GDP (gross domestic product) ratio remains on a permanent downward track. The Government is committed to keeping the federal debt-to-GDP ratio on a downward track. Budget 2006 introduced a new objective of reducing the debt-to-GDP ratio to 25 per cent by 2013-14. The Government will plan on annual debt reduction of $3 billion in order to achieve this objective.

In 2005-06, the federal debt-to-GDP ratio was 35.1 per cent, down from its 2004-05 level of 38.3 per cent. In 2006-07, the federal debt-to-GDP ratio is projected to fall to 33.3 per cent.


Objective 1b: Building a Stronger Society
1b.1: Ensure predictable and growing funding for health and social programs. The Government of Canada made a commitment in Budget 2006 to bring forward key proposals on a new approach to long-term funding support for post-secondary education and training.

The Government will engage in consultations with its provincial-territorial counterparts, academics and experts and Canadians to determine the most appropriate arrangements for long-term, stable and predictable funding for PSE and training. Following the consultation process, the Department will work closely with the Department of Human Resources and Social Development to provide timely advice with respect to the commitment to determine a new approach to long-term funding in the areas of post-secondary education and training.

The Department will continue to implement the 10-Year Plan to Strengthen Health Care, which provides an additional $1.1 billion in cash transfers in 2006-07, over 2005-06 funding levels, in support of provincial-territorial health systems.

The Department will also work to ensure that all provinces and territories receive the planned funding provided through the third-party trusts established on March 31, 2006, under the authority of Bill C-48, An Act to authorize the Minister of Finance to make certain payments, contingent on final financial results for 2005-06. Appropriate funding will flow once the final financial results for 2005-06 are known, likely in September 2006.

1b.2: Improve the transparency and accountability of federal transfer support to the provinces and territories. As part of the 2003 First Ministers' Accord on Health Care Renewal, the Canada Health and Social Transfer was restructured into two new transfers effective April 1, 2004: The Canada Health Transfer, a dedicated transfer in support of health, and the Canada Social Transfer, a block transfer in support of post-secondary education, social assistance and social services, including early childhood development and early learning and child care.

Creating distinct transfers for health and other social spending provides Canadians with greater information on the federal government's long-term contribution to both health care and other social programs.

1b.3: Ensure fiscal disparities are addressed through the equalization and Territorial Formula Financing programs. The Department will implement the 2006-07 allocations for Equalization and TFF announced in Budget 2006.

Renewed and strengthened Equalization and Territorial Formula Financing (TFF) programs, which will be developed following consultations with provinces and territories will be implemented. The report of the Expert Panel on Equalization and TFF, tabled in June 2006, and other recent reports on fiscal federalism, including the report of the Council of the Federation's Advisory Panel on Fiscal Imbalance, will be important inputs. The Department will consult with provincial and territorial governments. Details to be confirmed in Budget 2007.

The Department will also prepare the necessary legislation and regulatory changes required to implement the new Equalization and TFF formulas.

The goal is to establish a principle-based approach to the Equalization and TFF programs that will provide provinces and territories with long-term certainty regarding their payments starting in fiscal year 2007-08.

1b.4: Ensure the retirement income system remains sustainable and meets seniors' needs. Completion of the triennial financial review of the CPP. The Department will work to implement any changes.

The Department will prepare the annual report on the operations of the Canada Pension Plan in consultation with the Department of Social Development.

Finally, the Department will complete the transfer over a three-year period of all CPP assets remaining with the federal government to the CPP Investment Board as per the formal accord of provincial governments.


Objective 1c: Implementing Key Federal Environmental Sustainable Development Priorities
1c.1: In the context of planning for future budgets, work with other federal departments and stakeholders to identify ways to address environmental sustainable development priorities. The Department will continue to participate in discussions with stakeholders and other federal departments at the earliest possible stages of budget planning. For instance, the Department will continue to meet with environmental non-governmental organizations, such as the Green Budget Coalition.
1c.2: Work with other government departments to evaluate federal horizontal management of water policy. A draft Federal Water Framework was developed in 2004 for working-level use among federal officials. The Framework provides a diagnostic of water-related issues in Canada, maps out the roles and responsibilities of federal departments regarding freshwater, and identifies priority areas for further attention in both a national and a global context. The Framework will be used to better understand and organize the roles of at least 19 federal departments and inform improvements to the Government's collective management of water policy. The Department of Finance was involved in inter-departmental meetings to develop the Framework.

Further development of the Framework is on hold, pending the development of other broader policy frameworks at Environment Canada. The Department of Finance will use the Framework as a tool for analyzing any immediate water-related policy developments, and will participate in future efforts to further develop the Framework.


Key Issue 2: Integrating the Economy and the Environment

Objective 2a: Evaluating the Potential for and Developing Practical Uses of Economic Instruments
2a.1: Participate in further work in cooperation with other federal departments, other governments and stakeholders on the design of a system of covenants with the large industrial emitters sector to achieve reductions in their greenhouse gas emission intensities to help further Canada's climate change objectives under the Kyoto Protocol. Additionally, the Department will participate in work on potential mechanisms to facilitate a domestic and international permit-trading system. Finance officials from the Economic Development and Corporate Finance branch will:
  • participate in ongoing interdepartmental discussions on the design of various market elements and brief internally on developments
  • provide feedback to departments on proposed design elements
  • provide analysis and advice to the Minister on proposals to be considered by Cabinet
2a.2: Continue to participate in the Steering Committee and as observers at working group levels with the National Round Table on the Environment and the Economy on its Ecological Fiscal Reform program over 2003-2005. Officials from the Economic Development and Corporate Finance (EDCF) Branch have participated in the NRTEE's Expert Advisory Group, a steering committee for the Ecological Fiscal Reform (EFR) program, and have acted as observers on various EFR working groups, including the most recent research program related to EFR and energy. The EFR and energy research program is now concluded and released its State of the Debate report on August 18, 2005. NRTEE will incorporate future EFR research into its other research programs. The Department will continue to participate in NRTEE Steering Committees as appropriate.
2a.3: Continue to undertake analysis and research concerning the economic and fiscal implications of population aging. Research on the economic and fiscal implications of population aging is ongoing. This includes for instance, research regarding the impact of population aging on labour market growth. One strand of research will focus on understanding the labour force participation patterns of currently under-represented groups in the labour force, such as recent immigrants and older workers, and assess the implications of increasing their labour force attachment on the employment-to-population ratio and ultimately living standards. Moreover, the research agenda on productivity and its drivers will continue, as productivity will become the main source of living standards improvements in years to come. Research output will be shared with other government stakeholders working on population aging and is likely to be presented in academic forums.
2a.4: Continue to keep abreast of the emerging literature related to population aging and its economic and fiscal impacts; develop and employ analytical tools (such as computable general equilibrium models, microsimulation models and econometric methods) to examine impacts associated with population aging and provide analysis of current and proposed policies. Ongoing efforts are made to keep abreast of the emerging literature related to population aging and develop and employ analytical tools (such as computable general equilibrium (CGE) models, simulation models and econometric techniques) for the purposes of examining the impacts associated with population aging. Research output will be shared with other government stakeholders working on population aging and is likely to be presented in academic forums.
2a.5: Continue to evaluate research concerning environment-related tax measures. Assess the potential of proposals received from stakeholders for using the tax system to assist the Government in meeting its environmental objectives, with specific emphasis on the relative effectiveness of tax measures compared to other instruments that may be available within the context of the Government's other fiscal and policy objectives. The Department will continue to evaluate research and proposals concerning potential environment-related tax measures in consultation with other government departments and stakeholders, including taxpayers, industry associations and environmental organizations. The "Framework for Evaluation of Environmental Tax Proposals," published in Annex 4 to the 2005 Budget Plan, will facilitate dialogue by setting out general policy considerations that may be taken into account in the assessment of potential tax measures aimed at furthering environmental goals.

The Department will continue to review potential modifications to the accelerated tax depreciation provisions for efficient and renewable energy generation equipment (Class 43.1/43.2) and eligibility for flow-through share financing for Canadian Renewable and Conservation Expenses (CRCE). Discussion will be undertaken with responsible policy departments where they identify the tax system as a potentially effective tool to meet particular environmental objectives of the government.


Objective 2b: Increasing the Knowledge Base Through Integrated Decision Making
2b.1: Continue to maintain awareness of the departmental process for implementing the 1999 Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals (Strategic Environmental Assessment). As part of annual SEA awareness-raising activities, which have been in place for over 3 years, the Department will:
  • request that CEAA provide a briefing on SEA to the Department's Sustainable Development Working Group (SDWG), which would also be open to all officers within the Department;
  • after the briefing by CEAA, give a subsequent presentation to officials on the SEA process tailored to the specific role and activities of the Department; and,
  • make a report to the Departmental Coordinating Committee on the state of SEA implementation within the Department.

As well, the Government of Canada response to the 2004 report of the Commissioner of the Environment and Sustainable Development committed to ensuring that appropriate management systems are put in place by December 2005. In light of this, the Department has put in place a number of improvements to its SEA management regime. The Department will continue in the coming year to refine its improved SEA management approach through, for example:

  • continuing to issue quarterly SEA tracking requests to Assistant Deputy Ministers of each branch;
  • making improvements to the electronic inventory of departmental SEAs; and,
  • encouraging officials to enrol in more detailed SEA training courses offered by CEAA.
2b.2: Conduct research and analysis on environmental and natural resource issues. Research will continue to be targeted towards upcoming environmental and natural resource policy concerns. This research will be made available within the department through, for example, seminar-style presentations.

Key Issue 3: Integrating Sustainable Development in the Global Economy

Objective 3a: Participating in Negotiating International Environmental Agreements
3a.1: Support initiatives to enhance the understanding of linkages between Multilateral Environmental Agreements and trade rules. Finance officials will continue to participate in the development of the Canadian position for Canada's participation in the work of the Committee on Trade and Environment (CTE) of the World Trade Organization (WTO).

Objective 3b: Integrating the Environment Into Future Negotiations on Trade and Investment Agreements
3b.1: In conjunction with the Department of Foreign Affairs and International Trade (DFAIT), examine trade and environment linkages in the context of the World Trade Organization and trade negotiations. Continue to participate in the Environmental Assessment of trade and investment agreements in order to identify the economic effects of the agreement and likely related environmental impacts. The framework applies to bilateral, regional and multilateral agreements and is overseen by the Trade Negotiations Steering Committee, chaired by DFAIT.
3b.2: With DFAIT and Industry Canada, strive to promote free trade in the environmental sector and continue to review specific requests to remove tariffs unilaterally where they are identified as a significant disincentive to the acquisition of environmental technology products. The Department continues to actively support the reduction or elimination of tariff and non-tariff barriers on environmental goods and services in the WTO Doha round. In the context of negotiations of the WTO, we will continue to promote trade and environment linkages in conjunction with DFAIT and other government departments.

Objective 3c: Involving International Financial Institutions
3c.1: Work with other donor governments during the 14th replenishment of the World Bank/International Development Association's (IDA14) financing for the world's poorest countries to ensure that sustainable development issues remain high priorities (the replenishment negotiations that began in early 2004, became effective in July 2005). The Department will ensure that our financial obligation to IDA-14 is fulfilled, allowing IDA to implement the sustainable development priorities that were identified during the replenishment negotiations.

The IDA14 mid-term review will provide an opportunity to assess supported programs and projects against long-term environmental and social sustainability goals.

Under the Multilateral Debt Relief Initiative (MDRI), Canada will contribute its share of the costs to cancel 100% of debts owed to the IMF, IDA and the African Development Fund by countries that complete the Heavily Indebted Poor Countries Initiative. This can free up domestic resources for sustainable development expenditures. Canada met its entire financial obligation to the IMF last year, and will be ensuring that our financial obligations to IDA and the ADF will be fulfilled in 2006-07.

3c.2: Undertake consultations in 2004 with interested Canadian non-governmental organizations to exchange views on how best to support sustainable development within the IDA14 negotiations and within the international financial institutions more broadly. The Department will continue to consult with interested Canadian non-governmental organizations on how best to support sustainable development at the international financial institutions. This will include consultations with interested Canadian non-governmental organizations to discuss, at the time of its mid-term review, IDA's progress in supporting sustainable development within the IDA14 period.
3c.3: Work with the Executive Boards of the World Bank and European Bank for Reconstruction and Development to support operations that promote sustainable development. The Department, in consultation with other departments, will continue to support the International Financial Institutions in their mission to evaluate existing financing mechanisms and the possible introduction of new ones in support of encouraging access to sustainable and affordable energy in the poorest countries.

The Department will participate in the first review of the European Bank for Reconstruction and Development's current Environmental Policy in 2006-07 in order to assess how it could better support the Bank's efforts to promote sustainable development. The Department will also support the Bank's efforts to develop a new energy efficiency and climate change initiative.


Objective 3d: Increasing knowledge and understanding of the relationship between financial services and international environmental practices
3d.1: Participate in upcoming events such as the annual UNEP Finance Initiative Global Roundtable and other corporate social responsibility events. The Department will continue to attend conferences and events that increase our knowledge of international environmental practices as they relate to the financial sector. Examples may include the Globe 2006, organized by the Globe Foundation of Canada and the Triple-Bottom Line Investing (TBLI) conference.

Objective 3e: Maintaining a dialogue with federal financial institutions on sustainable development and corporate social responsibility with a view to continually improving the annual Public Accountability Statements
3e.1: Maintain open dialogue with representatives of financial institutions on Public Accountability Statements. The Department will continue to monitor Canadian financial institutions reporting under the legislative requirement for annual Public Accountability Statements, particularly with regards to corporate social responsibility issues. The Department will also follow up on the dialogue initiated in recent years and support financial institutions in their SD reporting activities.

Objective 3f: Informing and educating others interested in sustainable development on the merits of the Public Accountability Statements
3f.1: Participate in various interdepartmental and external events. The Department will provide input on sustainable development/corporate social responsibility initiatives pertaining to financial institutions and participate in interdepartmental consultations and meetings, as they occur.

Key Issue 4: Greening Operations

Objective 4a: Enhancing awareness of the environmental impacts of our operations and encouraging employee and management adoption of best practices
4a.1: Increase the proportion of employees participating in the ongoing promotion of SD principles in the workplace to 20 per cent by 2006.[1] The Green Citizenship Network (GCN) established in the Fall of 2004 through Finance, TBS, PSHRMAC and PSC support, has contributed to a number of environmental projects in the workplace. Work is ongoing to increase the capacity of the GCN to provide employees with more opportunity to engage in grassroots greening activities in their workspaces. A quarterly meeting will be held in the Fall to put forth a name change to Green Stewardship Network (GSN), will introduce the Ambassador Program (toolkit for grassroots greening initiatives), and will review the SDS and EMS greening proposals.

The Department will promote an Energy Efficiency and a Transportation event in the fall to further encourage sustainable ridership as well as home and office energy efficiency improvements with a variety of interactive displays, events and seminars.

4a.2: Increase the number of requests for materials on greening initiatives, policies and achievements by 30 per cent by 2006.[2] The Department will further expand the newly revised greening the office section of the InfoSite (intranet), and improve it as a venue to promote greening initiatives within the Department.

Objective 4b: Developing tools and guides and maintaining existing programs to support the implementation of best practices
4b.1: Develop a tracking system to determine the baseline and benchmarks for the recommendation of environmentally preferred products and services by 2006. The TBS Contracting Policy Notice 2006-1 - Policy on Green Procurement is now in effect. The department partnered with PWGSC to develop and deliver a green procurement training course for the department's acquisition card holders. The Department's Integrated Financial Management System (IFMS) was modified to track and record green purchases. Additional tools and support may have to be developed to increase both compliance and record-keeping as it relates to green purchases.
4b.2: Develop and implement a strategy to reduce resource consumption by 2005. A resource consumption strategy was developed which focused on reducing the department's use of energy, paper and its production of solid waste. This item is now considered completed.

Some concrete results include 800,000 less sheets of paper used, reduced hand paper towel use measures but no net energy consumption reductions have been perceived by the 2005 calendar year.


1. From a 12-per-cent baseline of employees who participated in a Finance-endorsed event in 2003.[Return]

2. From a baseline of 1,300 requests for information on the Greening the Office intranet site in 2002-03.[Return]