Archived - Supplementary document to the 2009-10 Departmental Performance Report (DPR) regarding implementation of the 2007-09 Sustainable Development Strategy (SDS)

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The Department of Finance’s 2007-09 Sustainable Development Strategy (SDS) was released in November 2006. The Department's vision for sustainable development is "Economic and fiscal policy frameworks and decisions that promote equity and enhance the economic, social, and environmental well-being of current and future generations." It highlights the long-term ideal that the Department will strive to achieve. To help focus the Department’s efforts, the 2007–09 SDS sets out five long-term goals that focus on key areas where the Department can contribute, within its mandate, to sustainable development: (1) fiscal sustainability and a high standard of living for future generations; (2) strong social foundations; (3) integration of sustainable development considerations into policy making; (4) integration of sustainable development considerations into the economy; and (5) demonstration of the Department's commitment to sustainable development in operations.

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Goal 1: Fiscal Sustainability and a High Standard of Living for Future Generations
Objective Target Results Achieved in 2009-10
1a: Promote fiscal sustainability by reducing Canada’s debt burden 1a.1: Eliminate Canada’s total government net debt by 2021 at the latest. For its part, the federal government will continue to target annual federal debt reduction of $3 billion and is committed to reducing the federal debt-to-GDP ratio to 25 per cent by 2012–13. From 2005-06 to 2007-08, the federal government reduced its debt by nearly $37 billion and the debt-to-GDP ratio fell from 38.3 per cent in 2004-05 to 29.0 per cent in 2008-09.
In response to the large and synchronized global recession that began in late 2008, the government launched the Economic Action Plan in Budget 2009.
The stimulus measures included in the Plan, along with lower revenues and higher EI spending that resulted from the recession, led to a budgetary deficit for 2009-10 and an increase in the debt-to-GDP ratio.
However, Budget 2010 set out a 3-point plan for returning to balance over the medium term. Under this plan, and in particular reflecting the fact that temporary stimulus measures are set to expire by the end of 2010-11, it is projected that the debt-to-GDP ratio will resume its downward trend.
1b: Keep abreast of long-run economic and fiscal issues and prospects 1b.1: Conduct research and analysis concerning the economic and fiscal implications of population aging and other long-term economic challenges. The Department continued to monitor Canada’s economic and fiscal performance and the implications associated with the aging of the population.
1b.2: Conduct analysis of the sustainability of Canada’s fiscal position, including that of the provinces and territories. The Department continued its analysis and research on Canada’s long-run fiscal position. The Department maintained its internal long-run projection models and continued to assess the long-run economic and fiscal challenges in Canada.
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 on possible changes to Canada’s tax system to ensure it supports a competitive and productive economy. In 2009-10, the Department provided analysis and advice to support the introduction of significant tax measures that advance the Government’s Advantage Canada agenda and build on major tax reductions since 2006. These measures encourage the investment and job creation necessary to increase productivity, reduce unemployment, and improve living standards for Canadians on an ongoing basis.
Canada now has an overall tax rate on new business investment that is substantially lower than that in any other G7 country.
The Department also conducted analysis that was integral to a number of tax policy and other actions in Budget 2010 that allow businesses to focus on improving their productivity and competitiveness, including:
  • improving Canada’s international tax system to attract new investment;
  • making the tax system fairer by closing tax loopholes; and
  • reducing red tape for businesses.
In addition, the Department’s analysis included actions to improve the fairness and efficiency of the personal income tax system. In particular, a number of measures were introduced to improve the integrity of the system, including measures to strengthen the tax treatment of employee stock option benefits and better target the Medical Expense Tax Credit to its intended purpose.
The Department also released the 2009 Tax Expenditures and Evaluations Report. The report contained a study entitled An International Comparison of Tax Assistance for Investment in Research and Development (R&D).
Goal 2: Strong Social Foundations
Objective Target Results Achieved in 2009-10
2a: Ensure stable and predictable funding for health and social programs 2a.1: Implement a new legislative funding framework for the Canada Social Transfer (CST).

This target was met in 2007-08.
Budget 2007 put the Canada Social Transfer on a long-term, predictable, growing path ensuring stable funding for social programs:

  • funding framework legislated through 2013-14;
  • cash levels increased for 2007-08 and 2008-09;
  • automatic 3 per cent escalator applies as of 2009-10;
  • cash allocated on an equal per capita basis; and
  • notional allocations provided for social programs, post-secondary education and programs for children to increase transparency of federal support.
In 2007-08, the Department prepared and implemented required legislative and regulatory changes, reflecting Budget 2007 commitments. The Department worked with provinces and territories to ensure smooth implementation of the changes.
In 2009-10, changes were made to the Canada Health Transfer (CHT) to ensure all Equalization-receiving provinces receive the same per capita CHT cash. These changes were legislated in the Budget Implementation Act, 2009.
In 2009-10, the Department focused on providing timely, accurate payments to provinces and territories. Communications activities continued in 2009-10 to improve awareness and understanding of the program.
2b: Reduce fiscal disparities through Equalization and Territorial Formula Financing (TFF) programs 2b.1: New formulas for Equalization and TFF will be developed in consultation with provincial and territorial governments. This target was met in 2007-08.
Further, the Department worked with provinces and territories to ensure smooth implementation of the changes.
Budget 2007 implemented a strengthened Equalization program to reduce fiscal disparities that reflects the following:
  • a formula-based, simplified program;
  • a higher, 10-province standard; and
  • legislated through 2013-14.
Budget 2007 also returned TFF to a formula-based approach that recognizes the different circumstances in each of the three territories, and provides improved incentives to encourage territorial economic development. The TFF program is also legislated through 2013-14.
In 2007-08, the Department prepared and implemented required legislative and regulatory changes, reflecting Budget 2007 commitments and the recommendations of the Expert Panel on Equalization and TFF.
In 2009-10, additional changes were made to the Equalization program through the Budget Implementation Act, 2009 to ensure sustainability and fairness. Specifically:
  • the program was legislated to grow in line with the economy;
  • a new fiscal capacity cap was applied to ensure that receiving provinces will continue to get a fair net fiscal benefit from their resources; and
  • transition payments were provided for 2009-10 to ensure that the payments to provinces qualifying for Equalization in 2009-10 were no lower than the amounts they received in the previous year.
In 2009-10, the Department continued to work with the provinces to ensure smooth implementation of these changes.
The Department focused on providing timely, accurate payments to provinces and territories. Communications activities continued in 2009-10 to improve awareness and understanding of the programs.
2c: Ensure the sustainability of the retirement income system 2c.1: Complete the next Canada Pension Plan triennial review. As part of the 2007-09 Triennial Review of the Canada Pension Plan (CPP), Finance Ministers unanimously agreed to a number of changes to modernize the Plan to better reflect the way Canadians live, work and retire. The implementation of the changes is on track and will be in force starting at the beginning of 2011.
At the June 14, 2010 Finance Ministers meeting, the federal and provincial Ministers of Finance agreed to continue working on options that would see a modest increase to defined benefits in the Canada Pension Plan. Any increase would be modest, phased-in and fully funded. They also agreed to move forward on pension innovation and financial literacy.
Ministers have mandated officials to work collaboratively on technical and implementation issues and to complete this work by this fall for the next Finance Minister’s meeting.
Goal 3: Integrating Sustainable Development Considerations into Policy Making
Objective Target Results Achieved in 2009-10
3a: Evaluate the potential for the use of economic instruments as a policy tool for addressing environmental issues 3a.1: Examine potential changes to the tax system to assist the Government in meeting its environmental objectives, including proposals received from responsible policy departments and external stakeholders. The Department continued to evaluate research and proposals concerning potential environment-related tax measures in consultation with other departments and stakeholders, including taxpayers, industry associations, and environmental organizations.
Analysis conducted during the year included work supporting the announcement in Budget 2010 of an expansion of the accelerated capital cost allowance (CCA) for clean energy generation equipment under Class 43.2 to include:
  • heat recovery equipment used in a broader range of applications; and
  • distribution equipment used in district energy systems that rely primarily on ground source heat pumps, active solar systems or heat recovery equipment.
The Department developed draft legislation to enact these changes and released revised draft legislation to implement changes to CCA Class 43.2 announced in Budget 2008.
As announced in Budget 2009, the Department conducted consultations on a potential tax incentive for assets used in carbon capture and storage. As indicated in Budget 2010, the Government will continue to monitor the development of this important technology and assess the best policy approach. The current focus is on direct funding through initiatives like the Clean Energy Fund.
The Department also provided analysis and advice supporting Canada’s participation in the G20 initiative on rationalization of inefficient fossil fuel subsidies that encourage wasteful consumption and in OECD discussions on tax treatment of emissions trading.
3a.2: Update the Catalogue of Federal, Provincial and Territorial Taxes on Energy Consumption and Transportation in Canada. The Department has suspended plans to update the catalogue. The catalogue would have no direct environmental impact. The information is generally already publicly available from various federal and provincial sources and the cost of consolidating and publishing it would be high relative to any potential benefit.
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. On May 12, 2009, Jeffrey D. Sachs, Director of the Earth Institute at Columbia University, delivered the Thomas K. Shoyama Annual Public Policy Lecture to the Department. Dr. Sachs’ lecture was entitled “International Financial Reforms for Sustainable Development.”
On January 20, 2010, as part of the Departmental Speaker Series, former President and CEO of the Ontario Teachers’ Pension Plan Claude Lamoureux delivered a lecture to Finance Canada employees on the sustainability of Canada’s pension and retirement systems. Mr. Lamoureux’s lecture was entitled “Pensions: Is There a Future?”
3b.2: Develop “tip sheet” for employees on sustainable development. To improve understanding of sustainable development, a “tip sheet” for employees on sustainable development was developed in the summer of 2007 and posted on the Department’s internal website, InfoSite, in December 2007.
The Department has also participated in the government-wide effort to develop a Federal Sustainable Development Strategy, in accordance with the Federal Sustainable Development Act. The Federal Strategy was tabled in the Senate and House of Commons in October 2010.
3b.3: Conduct research and analysis on environmental and natural resource issues. The Department has continued efforts to improve its environmental and natural resource knowledge base by conducting research and analysis on issues such as emissions trading and carbon dioxide capture and storage.
3c: Effective implementation of the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals 3c.1: Review the departmental process for implementing the Cabinet directive. The Department conducted an internal review on the Department’s procedures for conducting Strategic Environmental Assessments (SEAs) in the Spring and Summer of 2007. The findings and recommendations from the review were approved by the Departmental Coordinating Committee in October 2007. The main recommendation, to reorganize and streamline the Department’s SEA questionnaire and related guidance, was implemented by November 2007.
The Department participated in the development of an approach for linking SEA practices to the goals and targets of the Federal Sustainable Development Strategy.
3c.2: Develop web page for Department of Finance public statements on SEA. A web page has been developed for public statements on SEAs. It has been accessible from the public Finance website since May 2008. The web page is updated periodically with information on completed full SEAs.
The following is a link to the web page:
Goal 4: Integrating Sustainable Development Considerations Into the Economy
Objective Target Results Achieved in 2009-10
4a: Encourage high quality reporting on corporate social responsibility in the Public Accountability Statements. 4a.1: Maintain and broaden the dialogue with stakeholders In response to the financial markets’ turmoil, the Department of Finance Canada has been focussed on strengthening the financial sector, to see to its continued integrity, soundness and competitiveness, and protecting consumers. As such, interactions and engagements with stakeholders have reflected these priorities.
4a.2: Participate in domestic and international conferences/seminars related to CSR.
Goal 5: Demonstrating the Department’s Commitment to Sustainable Development in Operations
Objective Target Results Achieved in 2009-10
5a: Reduced energy use. 5a.1: Energy conservation program – Decrease greenhouse gas (GHG) emissions by 5 per cent in L’Esplanade Laurier based on fiscal year 2005-06 baseline through the development and implementation of an energy conservation plan and awareness campaign to explore and facilitate energy efficiency opportunities for L’Esplanade Laurier and other occupied buildings. The Department of Finance has worked with Public Works and Government Services Canada (PWGSC) to replace the T40 fluorescent lighting at L’Esplanade Laurier for a more efficient T8 fluorescent lighting. As well, an energy audit conducted by the Green Citizenship Network and an awareness campaign have aided in achieving a 7 per cent reduction in energy use at L’Esplanade Laurier, which exceeds the target.
5b: Improved solid waste management. 5b.1: Update recycling program at L’Esplanade Laurier – Divert 75 per cent of waste through the redesign and implementation of an updated recycling program, including improvement to take-back and hazardous materials programs. A baseline studying in 2006 established the Department’s waste diversion rate at 51 per cent. The recycling program in L’Esplanade Laurier Building was improved and awareness and communications campaigns ensued. A waste audit conducted in 2008 showed an 81 per cent waste diversion rate. This is one of the best waste diversion rates in a federal facility.
The Department also led the development and implementation of recycling signage subsequently adopted by PWGSC for use in federal facilities.
5b.2: Composting program – Develop and implement a composting program. Opportunities could include hand paper towels and food waste. A composting program for hand paper towels and pulverized paper was implemented, which contributed to achieve a waste diversion rate of 81 per cent.
The Department initiated one of the first composting programs (hand paper towels) in a federal building.
5c: Improved environmental performance of departmental vehicles. 5c.1: Reduce GHG emissions – Will reduce GHG emissions per vehicle kilometre from the departmental fleet by 15 per cent based on 2005-06 fleet composition baseline. The Department achieved a 16 per cent reduction in per vehicle km emissions, extended the life of the vehicles by one year and reduced the fleet from three to two vehicles.
5c.2: Maximize use of ethanol – 90 per cent of gasoline purchased for federal road vehicles will be ethanol-blended. The Department continues to encourage the purchase of ethanol-blended fuels for the Department’s two executive vehicles. However, ethanol-blended fuels are not widely available and usage was not as high as anticipated. Tracking fuel type purchased continues to be a challenge depending on vendor used.
5c.3: Green and defensive driver training – All drivers will be provided green and defensive driver training. The Department achieved a 100 per cent training rate for drivers.
5d: Green procurement 5d.1: Green procurement tracking – will adjust procurement tracking and reporting to include green procurement (collaboratively with a number of departments and agencies). The Department is quantifying its green procurement through the use of a mandatory Green Procurement Field that is integrated into the Department’s Integrated Finance and Material Management System (SAP). The Department led this inter-departmental initiative.
  5d.2: Multi-function document manager pilot program – Develop a pilot for equipment that would reduce the need for a separate networked photocopier, printer, colour printer and scanner (and possibly fax machine). A pilot program was implemented and was TBS-specific. In the Department of Finance Canada, while no specific pilot was undertaken, the use of multi-functional devices was encouraged. In 2006, none of the devices were networked for multi-functionality and we have since converted 18 of 64 or 28 per cent to multi-functional capabilities.
  5d.3: Green furniture purchases – Corporate Services Branch will increase purchases of green office furniture from 2005-06 levels by 50 per cent where and whenever new fit-up opportunities exist, and where current design configuration permits. In 2008, the Office of the Auditor General (OAG) – Commissioner of the Environment and Sustainable Development (CESD) conducted an audit of the Department of Finance on this target. The audit confirmed that the Department had incorporated environmental considerations into 100 per cent of furniture purchases.
The Department developed and implemented an environmentally responsible green nameplate that is also integrated into the TBS Federal Identity Program manual.
  5d.4: Develop and deliver green procurement training to 100 per cent of materiel managers and procurement staff by 2008, as well as 60 per cent of acquisition cardholders by 2009. The Department achieved a 100 per cent training rate for procurement and materiel management officers. For the acquisition cardholders, we achieved a 54 per cent training rate by 2008. We do not have data available for 2009-2010. However, the Department will be holding a training session in the fall of 2010 for the acquisition cardholders.
5e: Green Citizenship 5e.1: Green Citizenship Network (GCN) – Corporate Services Branch will establish ongoing support for the GCN, increase the GCN membership by 25 per cent and improve opportunities for employee participation in grassroots environmental activities. Membership in the Green Citizenship Network membership increased from 4 members in 2007 to 62 members in 2009-10, therefore exceeding the 25 per cent target.
5f: Improved environmental management 5f.1: Environmental Management System (EMS) – Corporate Services Branch will develop and implement an EMS for the Department of Finance, the Treasury Board Secretariat and the Public Service Human Resources Management Agency of Canada, in collaboration with the Public Service Commission of Canada. An EMS was developed and implemented as a shared Corporate Services delivery model. The EMS is being realigned to the department’s dedicated services delivery.