# Archived - Supplementary Document to the Department's 2005-06 Report on Plans and Priorities (RPP) Regarding Implementation of the 2004-06 Sustainable Development Strategy (SDS)

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 TargetServices - InfoSite (2004-06) Activities anticipated within the coming year (05-06) 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 target of keeping the federal debt-to-GDP ratio on a steady downward track continues to be a priority for the Government. According to the fiscal projections in Budget 2005, the federal debt-to-GDP ratio (accumulated deficit) will fall to 38.8 per cent in 2004-05 from 41.1 per cent in 2003-04, and to about 37.0 per cent for 2005-06. The Government has also set an objective of reducing the federal-debt-to-GDP ratio to 25 per cent within the next ten years. This will be achieved by maintaining a prudent approach to financial management, which includes an annual target of a balanced budget or better, a Contingency Reserve, and economic prudence. The Contingency Reserve, if not needed, is used to reduce the federal debt. As well, the Expenditure Review Committee (ERC) was established with a mandate to conduct a fundamental review of all programs and expenditures. The government's goal is to identify $12 billion in savings over a five-year time frame. These savings are intended for reinvestment in the priorities of Canadians. Most savings will be detailed in Budget 2005. Objective 1b: Building a Stronger Society 1b.1: Ensure predictable and growing funding for health and social programs. The Department will work to ensure that the planned increases in transfer payments resulting from the 10-year Action Plan to Strengthen Health Care agreed to by First Ministers in September 2004 will be implemented, upon passage of legislation. These transfers and supporting targeted funding measures are designed to accelerate the reform of the health care system in order to ensure its sustainability over the long-term. 1b.2: Improve the transparency and accountability of federal transfer support to the provinces and territories. As agreed to by First Ministers at the February 2003 First Ministers' Meeting, the Canada Health and Social Transfer (CHST) was restructured into two new block transfers effective April 1, 2004: a Canada Health Transfer (CHT) in support of health; and a Canada Social Transfer (CST) in support of post-secondary education, social assistance and social services, including early childhood development, and early learning and child care services. Creating distinct transfers for health and other social spending will provide Canadians with greater information on the federal government's long-term contribution to both health care and other social programs. Therefore, this target has been achieved. 1b.3: Ensure fiscal disparities are addressed through the equalization and Territorial Formula Financing programs. The Department will implement the new Equalization and TFF frameworks as agreed to by First Ministers in October 2004. In addition, the Government will launch a review of both Equalization and TFF by an independent panel of experts. This panel will report back its advice to the Government by the end of 2005. The Government is committed to having any changes in allocation for 2006-07 and future years in place by April 1, 2006. The Department will work to ensure this commitment is met. 1b.4: Ensure the retirement income system remains sustainable and meets seniors' needs. The Department will provide supporting policy analysis to federal and provincial finance ministers to ensure timely completion of the triennial financial review of the CPP. The CPP legislation requires that ministers make "best efforts" to complete the review by the end of 2005. The Department will prepare the annual report on the operations of the Canada Pension Plan in consultation with the Department of Social Development. The Department will also implement the first of two increases in the maximum monthly Old Age Security Guaranteed Income Supplement for single seniors, senior couples and near senior spouses, partners, or survivors of GIS recipients (i.e., recipients of the Allowance and the Allowance for the Survivor benefits) on January 1, 2006 as announced in the 2005 Budget. As well, the Department will implement the transfer of all CPP assets remaining with the federal government to the CPP Investment Board over a three-year period following 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. Departmental officials will also work closely with other departments in implementing previous budget measures, such as the$1 billion announced in Budget 2005 for an innovative Clean Fund to further stimulate cost-effective action to reduce greenhouse gas emissions. 1c.2: Work with other government departments to evaluate federal horizontal management of water policy. Building upon key water priorities that were identified last year by relevant federal departments and agencies, Departmental officials will participate in ongoing policy discussions on federal management of water policy.
 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 will participate in inter-departmental consultations relating to the development of a regulatory framework for large final emitters. Finance officials will also participate in interdepartmental discussions on mechanisms to facilitate emissions trading and other forms of market-based compliance options. 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 nearing completion, and NRTEE will incorporate future EFR research into its other research programs. The Department will continue to participate in NRTEE Steering Committees as appropriate. As announced in Budget 2005, the Government has asked NRTEE to develop options for a revenue neutral vehicle 'feebate' and to consult and make recommendations to the Government for the next federal budget. The Department will work with NRTEE and other parties and provide advice to the Minister on the follow-up to NRTEE's recommendations. 2a.3: Continue to undertake analysis and research concerning the economic and fiscal implications of population aging. Research and analysis on the economic and fiscal implications of aging is ongoing. Several research projects on aging will either be started and/or completed over this period. Subject topics to be explored include, among other things, the relationship between the age distribution of the population and productivity and the impact of public and private pensions on work incentive. Research output will be shared with other government stakeholders working on population aging and 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. Officials from the Economic and Fiscal Policy Branch will 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. This is consistent with the Government's commitment in Budget 2005 to actively consider opportunities to use the tax system to support environmental objectives, in areas where it would be an appropriate instrument. The publication of the "Framework for Evaluation of Environmental Tax Proposals" in Annex 4 to the 2005 Budget Plan fulfils the Department's commitment in the 2004-06 Sustainable Development Strategy to make public such a framework. This document 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. Following the enhancement in Budget 2005 of incentives for investment in efficient and renewable energy generation through accelerated capital cost allowance (Class 43.1), the Department will continue to review other equipment for potential inclusion in this measure. As announced in Budget 2005, the Government has asked NRTEE to develop options for a revenue neutral vehicle 'feebate' and to consult and make recommendations to the Government for the next federal budget. The Department will work with NRTEE and other parties and provide advice to the Minister on the follow-up to NRTEE's recommendations. The Department will also monitor the take-up under the capital region transit authorities' Transit Pass Program to help the Government identify the most cost-effective way of encouraging public transit use. 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 2 years, the Department will: request that CEAA provide a briefing on SEA to the Department's Sustainable Development Working Group (SDWG), which would also open to all officers; 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 will examine its current system to determine if any potential areas of improvement exist. 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.