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This 2013–14 Report on Plans and Priorities summarizes the Department of Finance Canada's priorities for addressing the challenges and opportunities facing our economy in the coming year.

The Canadian economy continues to perform well in a world of elevated uncertainty. The World Economic Forum rated Canada's banking system as the world's soundest for the fifth year in a row, and Forbes magazine has consistently ranked Canada as one of the very best places in the world to do business, in its annual review of global economies. The International Monetary Fund (IMF) and the Organisation for Co-operation and Development have forecast that Canada will be among the G7 nations that will experience the strongest economic growth during 2013–14, and in October 2012, the head of the IMF said that measures taken to protect Canada's economy should be a model for other countries trying to fix their financial systems.

The overarching operational priority for 2013–14 remains the return to balanced budgets over the medium term. To ensure that the Canadian economy continues to grow and remain stable, the Department will continue to focus on four operational priorities.

The first priority, sound fiscal management, will ensure the effective management of the fiscal framework, including the implementation of expenditure review measures announced in Budget 2012 and the promotion of economically sound and fiscally responsible actions. An effective, credible fiscal framework contributes to a sound and stable macroeconomic environment, helps raise revenue to support investments in Canadian social and economic priorities, and gives the government flexibility to deal with unforeseen economic and fiscal developments.

The second priority, sustainable economic growth, focuses on the Department's leadership role in developing sound macroeconomic, tax and structural policies; promoting competitiveness and business innovation; and supporting a competitive, efficient, safe and sound financial sector.

The third priority, sound social policy framework, involves managing current and emerging pressures related to social policy and transfer payment programs to ensure that these programs are sustainable and effective for all Canadians. In support of this objective, the Department will work toward implementing the 2014–15 renewal of the Equalization and Territorial Formula Financing programs and will follow through on commitments made on pension innovation.

The fourth priority, effective international engagement, focuses on working actively with key economic partners on bilateral, regional and multilateral issues to leverage Canada's strengths and promote Canadian trade and investment interests. This effort includes fostering innovative and effective aid policies, to reduce global poverty, and working toward a more stable and secure international financial system.

This report provides key details about the Department's plans to support these priorities, ensuring that Canada remains on track toward a sustainable economic recovery.

The Report on Plans and Priorities is a key ministerial accountability document to Parliament in which the Department of Finance Canada's expenditure plans are outlined. The report provides details over a three-year period on the Department's priorities, plans and expected results, including links to related resource requirements. The report also discusses how the Department plans to make progress toward its strategic outcome through its programs.

The Department of Finance Canada contributes to a strong economy and sound public finances for Canadians. It does so by monitoring developments in Canada and around the world to provide first-rate analysis and advice to the Government of Canada and by developing and implementing fiscal and economic policies that support the economic and social goals of Canada and its people. The Department also plays a central role in ensuring that government spending is focused on results and delivers value for taxpayer dollars. The Department interacts extensively with other federal organizations and acts as an effective conduit for the views of participants in the economy from all parts of Canada.

Created in 1867, the Department of Finance Canada was one of the original departments of the Government of Canada and had as its primary functions bookkeeping, administering the collection and disbursement of public monies, and servicing the national debt. Today, the Department helps the Government of Canada develop and implement strong and sustainable economic, fiscal, tax, social, security, international and financial sector policies and programs. It plays an important central agency role, working with other departments to ensure that the government's agenda is carried out and that ministers are supported with high-quality analysis and advice.

The Department's responsibilities include the following:

• Preparing the federal Budget and the Update of Economic and Fiscal Projections;
• Preparing the Annual Financial Report of the Government of Canada and, in cooperation with the Treasury Board of Canada Secretariat and the Receiver General for Canada, the Public Accounts of Canada;
• Developing tax and tariff policy and legislation;
• Managing federal borrowing on financial markets;
• Designing and administering major transfers of federal funds to the provinces and territories;
• Developing financial sector policy and legislation; and
• Representing Canada in various international financial institutions and organizations.

The Minister of Finance is accountable for ensuring that his responsibilities are fulfilled both within his portfolio and with respect to the authorities assigned through legislation. The Minister has direct responsibility for a number of acts and is assigned specific responsibilities in other acts that are under the responsibility of other ministers.

The Department of Finance Canada provides effective economic leadership, with a clear focus on one strategic outcome, which expresses a long-term and enduring benefit for Canadians:

• A strong economy and sound public finances for Canadians.

The Report on Plans and Priorities describes how plans and commitments for 2013–14 are linked to the Department's Program Alignment Architecture (PAA), for which expected results and performance indicators were developed as part of the performance measurement framework.

The PAA provides an overview of how all of the programs and sub-programs contribute to the Department's strategic outcome.

The Department has four programs, each of which consists of a varying number of sub-programs. The four programs are Economic and Fiscal Policy Framework, Transfer and Taxation Payment Programs, Treasury and Financial Affairs, and Internal Services.

The Economic and Fiscal Policy Framework program is the primary source of advice and recommendations to the Minister of Finance on issues, policies and programs of the Government of Canada in the areas of economic, fiscal and social policy; federal-provincial relations; financial affairs; taxation; and international trade and finance.

The Transfer and Taxation Payment Programs program supports provinces and territories with funding for health and social programs. Through transfer payments, this program enables less prosperous provincial governments to provide their residents with public services that are reasonably comparable to those in other provinces, at reasonably comparable levels of taxation, and provides territorial governments with funding to support public services, in recognition of the higher cost of providing programs and services in the North. This program also includes the collection and remittance of provincial, territorial and Aboriginal taxes under tax collection and administration agreements.

The Treasury and Financial Affairs program manages debt operations and other financial operations of the Government of Canada.

The Internal Services program includes a number of functions and resources that support the Department as a whole in achieving its strategic outcome. In doing so, it cuts across all departmental programs identified in the PAA and supports each program within the PAA.

The Department's PAA is presented in the following graphic.

[Department's Program Alignment Architecture – Text version]

The overarching priority of the Department of Finance Canada for 2013–14 is to manage the return to balanced budgets over the medium term. In doing so, the Department will focus on four operational priorities and two management priorities. The four operational priorities focus on ways to improve value for money in the Department's program base. The two management priorities focus on improving the Department's management practices in the areas of human resources, financial management and information management. These priorities and their associated initiatives represent the Department's plan of action for advancing its strategic outcome. Each priority supports the Department's strategic outcome, which is aligned to the broader government-wide outcomes.

Private sector economists expect moderate growth in the Canadian economy, as growth in domestic demand is expected to be moderated by a fragile global recovery and the related near- to medium-term risks. In particular, uncertainty stems from ongoing concerns about the U.S. federal government's fiscal position, although the U.S. economy is showing signs of improvement, as well as the ongoing banking and sovereign debt sustainability issues in Europe. In addition, any potential slowdown in the major emerging market economies could affect the Canadian economy owing to weaker commodity prices and exports and slower global growth. Domestically, the key risk continues to be elevated household debt.

The Department of Finance Canada remains committed to ensuring a strong economy and sound public finances for Canadians. In meeting this commitment, the Department is exposed to a broad range of risks. Effective risk management is therefore critical to its ability to deliver results for Canadians, and the Department has put in place mechanisms to systematically identify and manage its corporate risks, notably policy, people and relationships, infrastructure and process risks.

In particular, the Department will continue to manage the economic volatility risks by ensuring it has in place the infrastructure, resources and authorities needed to respond to an evolving economic and financial sector environment. The Department will also manage the increased requirement for coordinated international decision making, to deal with uncertain world economic conditions and to support the soundness of the global financial system. At the same time, the Department will continue to ensure that responsible financial sector agencies take effective coordinated action to support the soundness, integrity and reputation of the Canadian financial system.

While implementing the 2012 expenditure review measures, the Department also recognizes that as a knowledge-based organization, its continued success depends on attracting, developing and retaining a highly skilled and adaptable workforce. The Department will continue to focus on strategic recruitment, cost-effective training and development initiatives, performance management and staff retention as a successful way of achieving desired outcomes.

Given the nature of its mandate, the Department requires a reliable and secure information technology (IT) infrastructure. In light of the prevalence of IT security incidents in both public and private sectors and the anticipated move of the Department's operations to another location, the Department, in collaboration with Shared Services Canada, will continue to strengthen its IT and information management (IM) infrastructure according to best practices, including continued improvements to the secure computer network environment and strengthened IM practices.

The financial resources presented in the following table represent the total funds available to the Department of Finance Canada to deliver its mandate. They are composed of statutory votes and voted amounts.

The following table summarizes the total planned human resources for the Department for the next three fiscal years. Human resources are presented as the number of full-time equivalents (FTEs).

The tables below list the Department's strategic outcome and programs and the associated financial resources.

For the 2013–14 fiscal year, the Department of Finance Canada plans to spend $87.6 billion, to meet the expected results of its programs and to contribute to its strategic outcome. The figures below illustrate the Department's spending trend by program from 2009–10 to 2015–16.

[Graphic 1 - Text version]

Spending in the Economic and Fiscal Policy Framework program includes departmental operating expenditures and employee benefits.

The decrease in 2010–11 actual expenditures and the subsequent increase in 2011–12 actual expenditures are mainly due to the Canadian Millennium Scholarship Foundation ($121.3 million). The foundation was dissolved in 2010–11, and the residual amount of the original payment made in 1998–99 was credited to the Consolidated Revenue Fund in 2010–11.

The decrease in 2012–13 forecast spending is mainly due to the expiry of time-limited funding related to the third payment to the Canadian Securities Regulation Regime Transition Office, made in 2011–12 under section 14 of the Canadian Securities Regulation Regime Transition Office Act.

The decrease in 2013–14 planned spending is mainly due to the expiry of time-limited funding related to various initiatives, including the government's advertising program; personal income tax initiatives; corporate finance and asset management; the working group responsible for steering the G20 Framework for Strong, Sustainable and Balanced Growth; technical issues related to the Goods and Services Tax (GST); maintaining the strength of Canada's financial system; and the savings measures announced in Budget 2012. The subsequent decrease in 2014–15 relates to the government's advertising program.

Spending in the Transfer and Taxation Payment Programs program includes transfer payments to provinces and territories and transfers to international financial institutions for the purposes of debt relief, and financial and technical assistance to developing countries. In addition, the program also includes the administration of provincial, territorial and Aboriginal taxes under tax collection and administration agreements.

The increase from actual to forecast and planned spending is mainly due to increased transfer payments for the Canada Health Transfer, the Canada Social Transfer, Fiscal Equalization, and Territorial Formula Financing. Fiscal Equalization and Territorial Formula Financing are forecast to grow as legislated until 2013–14. Territorial Formula Financing will grow in line with its legislated funding framework, and the Equalization program will grow in line with the economy. The Canada Health Transfer will grow by 6 per cent annually until 2016–17, and the Canada Social Transfer will grow by 3 per cent annually. Payments to provinces related to sales tax harmonization increase in 2013–14 according to the harmonization agreement reached with the Government of Quebec. These increases were offset by a decrease of $220 million in payments for Vote 5 Grants and Contributions, owing to the cessation of payments to Export Development Canada for debt relief via the Paris Club.

Spending in the Treasury and Financial Affairs program includes loans to Crown corporations, interest and other costs related to the public debt, and expenditures related to domestic coinage.

In Budget 2007, the government announced that the domestic borrowing needs of Farm Credit Canada, the Business Development Bank of Canada, and Canada Mortgage and Housing Corporation would be met through direct lending beginning April 1, 2008. Actual expenditures reflect the initial disbursement of loans to these organizations of $116.4 billion, $76.1 billion, and $63.4 billion in 2009–10, 2010–11, and 2011–12 respectively. These loans are fully recoverable by the Government of Canada. The gross borrowing requirements of Crown corporations are driven by the need to match the term and structure of the borrowing requirements of their clients. These activities are influenced by current and expectations of future economic conditions and can vary greatly over a short period of time. Accordingly, there is no planned spending forecast presented in the Report on Plans and Priorities for 2012–13 and subsequent years for direct lending to these Crown corporations.

Interest and other costs related to the public debt consist of interest on unmatured debt and other interest costs and vary depending on changes to debt levels and interest rates. Actual expenditures reflect interest on unmatured debt costs of $16.6 billion, $17.7 billion and $18.4 billion, in 2009–10, 2010–11 and 2011–12 respectively. Forecast spending includes an amount of $17.8 billion in 2012–13 and $18.4 billion in 2013–14.

Actual expenditures also reflect other interest costs of $10.4 billion, $10.2 billion and $9.5 billion, in 2009–10, 2010–11 and 2011–12 respectively. Forecast spending includes an amount of $9.1 billion in 2012–13 and $8.7 billion in 2013–14.

Costs for the production and distribution of domestic coinage vary according to demand, metal composition, production volumes and distribution. These costs were $133 million, $102 million and $114 million, in 2009–10, 2010–11 and 2011–12 respectively. Costs are forecast at $120 million in 2012–13 and $127 million in 2013–14. This projected increase reflects the factors noted previously as well as temporary costs related to the phasing out of the penny.

[Graphic 4 - Text version]

The Internal Services program involves a group of related activities and resources that support programs and other corporate obligations of the Department of Finance Canada.

Spending for the Internal Services program primarily includes operating expenditures and employee benefits. The decrease in forecast spending in 2012–13 is mainly due to the transfer of funding to Shared Services Canada and to time-limited funding of various initiatives, such as the funding to support Finance Canada's corporate information management and information technology. The slight increase in 2013–14 and 2014–15 and the subsequent decrease in 2015–16 are mainly due to the time-limited funding for the Department's move to a new building in 2014. In addition, there is a slight decrease related to the consolidation of pay services to Public Works and Government Services Canada's Centre of Excellence.

For information on the Department's organizational appropriations, please see the 2013–14 Main Estimates publication.

The Federal Sustainable Development Strategy (FSDS) outlines the Government of Canada's commitment to improving the transparency of environmental decision making by articulating its key strategic environmental goals and targets.

The Department of Finance Canada ensures that consideration of these outcomes is an integral part of its decision-making processes. In particular, through the federal Strategic Environmental Assessment (SEA) process, any new policy, plan, or program initiative includes an analysis of its impact on attaining the FSDS goals and targets. The results of detailed SEAs are made public when an initiative is announced, and include the impacts on achieving FSDS goals and targets.

The Department contributes to Theme I: Addressing Climate Change and Air Quality; Theme III: Protecting Nature; and Theme IV: Shrinking the Environmental Footprint – Beginning with Government, as denoted by the visual identifiers below.

These contributions are components of the following programs and are further explained in Section II:

• Economic and Fiscal Policy Framework; and
• Internal Services.

For additional details on the Department of Finance Canada's activities to support sustainable development, please see Section II of this report and the Department's website. For complete details on the Strategy, please see the Federal Sustainable Development Strategy website.

The Government of Canada will be consulting the public in 2013–14 regarding the second three-year cycle of the FSDS (2013–16). The 2013–16 FSDS will be finalized in 2013–14. It will be presented as part of year-end performance reporting for 2013–14.

Section II presents the Department of Finance Canada plans for the four programs, the programs' expected results and associated performance indicators, as well as the financial and non-financial resources that will be dedicated to each program over the planning period. The plans will ensure that progress is made toward achieving the strategic outcome.

The Department of Finance Canada provides effective economic leadership with a clear focus on one strategic outcome, which all programs support.

[Strategic Outcome and Programs - Text version]

This program is the primary source of advice and recommendations to the Minister of Finance on issues, policies and programs of the Government of Canada related to the areas of economic, fiscal and social policy; federal-provincial relations; financial affairs; taxation; and international trade and finance. The work conducted by this program involves extensive research, analysis, and consultation and collaboration with partners in both the public and private sectors, including the Cabinet and the Treasury Board; Parliament and parliamentary committees; the public and Canadian interest groups; departments, agencies and Crown corporations; provincial and territorial governments; financial market participants; the international economic and finance community; and the international trade community. In addition, this program includes policy advice on the development of Memoranda to Cabinet, negotiation of agreements, drafting of legislation and sponsoring of bills through the parliamentary process, which are subsequently administered by other programs within the Department and by other government departments and agencies. The aim of this program is to create a sound and sustainable fiscal and economic framework that will generate sufficient revenues and provide for the management of expenditures in line with the Budget Plan and financial operations of the Government of Canada.

Supporting prudent economic and fiscal management

The Department of Finance Canada will continue to ensure the effective management of the fiscal framework, including the government's plan to support economic growth and job creation, while managing the return to balanced budgets over the medium term by supporting the implementation of the measures announced in Budgets 2010, 2011 and 2012. The plans include the implementation of the government's 2012 departmental spending review measures, and completing the implementation of earlier strategic review decisions.

To prepare the government's annual budget and estimate the size of the budget balance, the Department needs to assess and make recommendations on numerous proposals for new program spending emanating from line departments and the private sector. In that context, the Department will continue to fulfill a challenge function in managing funding requirements of other departments and agencies, and support the development of policy proposals that are economically sound and fiscally responsible. In doing so, the Department will contribute to ensuring that proposals considered by Cabinet are accurately costed and will provide advice to the Minister of Finance in the context of budget priority-setting in support of the government's plan to return to balanced budgets over the medium term.

The Department will assess Canada's current and future economic conditions to formulate first-rate economic policy advice and to provide the basis for accurate fiscal planning. The activities will include regular monitoring and forecasting of Canada's and other countries' economic performance, monitoring emerging global economic risks, conducting private sector surveys of the Canadian economic outlook, and analytical research on a range of topics that relate to the performance of the Canadian economy, standard of living, public finances, productivity and the challenges associated with population aging.

Improving the competitiveness, efficiency, fairness, and simplicity of the tax system

Improvements to the competitiveness, efficiency, fairness and simplicity of Canada's tax system provide a basis for Canadians and Canadian businesses to realize their full potential, thereby encouraging investment, promoting economic growth and increasing Canadians' standard of living. These improvements also strengthen Canadians' confidence in the tax system.

The Department of Finance Canada will continue to develop analysis and evaluate options aimed at achieving a personal income tax system that enhances growth and living standards, building on efforts since 2006 to create a sustainable low-tax environment.

In addition, the Department will continue to work closely with the provinces and territories to achieve common goals, including enhancing the competitiveness of Canada's business tax system, improving incentives to work, and improving the overall efficiency and simplicity of the tax system. The Department will continue to work with the Government of Quebec on the implementation of the Canada-Quebec Comprehensive Integrated Tax Coordination Agreement (CITCA) and with the Government of Prince Edward Island (PEI), to carry out any remaining requirements stemming from the implementation of the Canada-PEI CITCA.

At the international level, the Department will continue to monitor corporate income tax reductions and other corporate tax changes by Canada's key competitors, to evaluate and provide advice on the relative competitiveness of Canada's statutory and effective tax rates. The Department will also continue to analyze the international tax system to look for opportunities to improve its fairness and competitiveness, including in relation to issues identified by the Advisory Panel on Canada's System of International Taxation. As well, the Department will contribute to the G20 initiative to rationalize fossil fuel subsidies by phasing out inefficient fossil fuel subsidies over the medium term. The Department will also continue to negotiate international tax treaties and tax information and exchange agreements with other countries, to further the policies put forward in Budget 2007 concerning tax information exchange, and the international consensus reached at the G20 and the Organisation for Economic Co-operation and Development, to use tax information exchange to combat tax avoidance and tax evasion.

To improve the integrity of the tax system and protect the government's revenue base, the Department will continue to identify and analyze options to address aggressive tax planning and ensure tax fairness. The Department will also continue the work to identify emerging areas of aggressive tax avoidance through regular consultations with the Canada Revenue Agency.

Supporting the Government of Canada's economic agenda

The Department of Finance Canada will work toward the implementation of the government's economic agenda in several economic sectors, including manufacturing, transportation, agriculture, fisheries, information and communications technologies, and forestry; as well as in the areas of energy and the environment, small business financing, venture capital, research and development, commercialization, regional economic development, infrastructure, defence and public safety. In particular, the Department will play a key role in supporting the implementation of the Venture Capital Action Plan, announced on January 14, 2013. The Venture Capital Action Plan is a comprehensive action plan for deploying $400 million in new capital to improve access to venture capital financing by high-growth companies so that they have the capital they need to create jobs and growth.

To support Canada's long-term economic growth, the Department will also continue to advance the government's agenda to strengthen Canada's workforce and to make Canada's labour market more adaptable through supporting access to skills and training; a fast, flexible economic immigration system; and increased participation of under-represented groups. This work will also support the development and attraction of highly qualified personnel, a key component in improving Canada's innovation and productivity performance. Furthermore, the Department will continue to lead the systematic review of the government's corporate assets, including enterprise Crown corporations, real property and other holdings.

Ensuring effective social policies and sustainable transfer programs

The Department of Finance Canada will continue to collaborate with other departments and central agencies to review policy proposals that are consistent with, and deliver on, the government's priorities in areas such as labour markets, Aboriginal issues, justice, public safety, health, and income security. Consistent with the commitments made at the Crown-First Nations Gathering on January 24, 2012, the Department will participate in the working group with First Nations, Aboriginal Affairs and Northern Development Canada, and other relevant departments, which was established to review the structure of financial arrangements between the federal government and First Nations, until the completion of this work.

Budget 2012 announced that the age of eligibility for Old Age Security (OAS) will gradually be increased from 65 to 67, starting in April 2023, with full implementation by 2029. The Department will deliver on the commitment made in Budget 2012 to discuss the impact of the increase in age of eligibility for OAS on the Canada Pension Plan (CPP) disability and survivor benefits with provinces and territories, which are joint stewards of the CPP, in the course of the next CPP Triennial Review.

The Department will continue discussions with the provinces and territories on the implementation of the renewal of the Equalization and Territorial Formula Financing programs. The focus is on implementing the technical aspects of these programs and ensuring that the required legislation and regulations are in place for 2014–15. Equalization payments are made to eligible provincial governments in fulfillment of the constitutional commitment to ensure that provincial governments have sufficient revenues to provide reasonably comparable levels of public services at reasonably comparable levels of taxation. The Territorial Formula Financing program achieves the same objective for all three territories, recognizing the unique circumstances in the North.

Promoting a stable, efficient and competitive financial sector

The Department of Finance Canada will assess Canada's financial sector framework against key internationally recognized and emerging standards, ensuring that the Canadian financial sector policy framework fosters confidence and supports stable, efficient and competitive financial services delivery in support of strong, sustainable growth in the Canadian economy. In that context, the Department will continue to engage with the International Monetary Fund concerning the 2013 Financial Sector Assessment Program Update for Canada, which will assess Canada's regulatory framework against key international banking, insurance and securities supervision standards.

In addition, the Department will pursue efforts with the Financial Stability Board (FSB), including its member jurisdictions and international standard-setting bodies, to implement the G20 financial sector reform agenda and to strengthen the resilience of the global financial system. The Department's areas of focus with respect to the G20 reform agenda will include an assessment of the Canadian resolution framework against the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions; the development of an approach to implement Canada's commitment with respect to central clearing of over-the-counter derivatives and the assessment of the implications of foreign rule making; and participation in the periodic thematic and country-specific peer reviews of the FSB Standing Committee on Standards Implementation concerning the implementation of financial sector standards and policies.

The Department will continue to refine the existing financial sector frameworks by reviewing the legislative and regulatory frameworks governing federally regulated financial institutions to ensure that they support a stable and efficient financial services sector that meets the needs of Canadians. Work in this area will include:

• Continued monitoring of the housing finance system, with the aim of managing the government's risk exposure to, and increasing market discipline in, the mortgage market;
• Supporting Canada Mortgage and Housing Corporation in the administration of the legislative framework for covered bonds;
• Developing negotiation strategies for the financial sector component of bilateral and multilateral trade agreements;
• Reforming the Canadian payments system through updates to the Code of Conduct for the Credit and Debit Card Industry in Canada, to address mobile payments and by reviewing the governance of the payments sector; and
• Reviewing the effectiveness of Canada's anti-money laundering and anti-terrorist financing regulatory regime, in response to the review of the Standing Senate Committee on Banking, Trade and Commerce on the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, and recommending enhancements as needed.

The Department will continue to promote the effective and efficient provision of financial services in Canada. It will continue to work with the provinces and territories to implement the framework for Pooled Registered Pension Plans and will examine the sustainability of individual pension plans. The Department will also continue to develop financial literacy initiatives and will modernize the financial consumer protection framework. Finally, the Department is continuing to consult with the provinces and territories, many of which have reaffirmed their interest in working on a cooperative basis with the federal government toward a common securities regulator.

Supporting global finance and trade

The Department of Finance Canada will support Canada's pursuit of greater prosperity and global stability through engagement in international economic cooperation forums, including the G7 and the G20, the International Monetary Fund, the World Bank, the Organisation for Economic Co-operation and Development, and the Asia-Pacific Economic Cooperation forum. In particular, the Department will continue to provide international leadership by co-chairing the G20 Working Group responsible for steering the Framework for Strong, Sustainable and Balanced Growth, which guides and enhances international policy coordination.

The Department will provide financial management advice and advance innovative financing tools in the area of international development, balancing fiscal restraint with Canada's support for global development goals. The Department will continue to evaluate the impact of tariffs on Canadian businesses and consumers and recommend tariff relief to enhance Canadian competitiveness. Finally, the Department will continue to advance Canada's trade policy framework in a manner that encourages trade growth, including supporting trade negotiations, both multilaterally under the World Trade Organization, and bilaterally and regionally, with priority countries.

The Department of Finance Canada's mandate includes the supervision, control and direction of all matters relating to the financial affairs of Canada that are not by law assigned to the Treasury Board or any other Minister. This program includes the administration and payment of transfers to provinces and territories, including fiscal equalization, the Canada Health Transfer and the Canada Social Transfer, in support of health and social programs. In addition, it includes the administration of taxation payments to provinces and territories as well as to Aboriginal governments in accordance with legislation and negotiated agreements. Also included in this program are commitments and agreements with international financial organizations aimed at supporting the economic advancement of developing countries. In addition, from time to time, the federal government will enter into agreements or enact legislation to respond to unforeseen pressures. These commitments can result in payments, generally statutory transfer payments, to a variety of recipients, including individuals, organizations, and other levels of government.

Supporting fiscal arrangements with provinces and territories

In the context of an aging population and slowing labour force growth, and ongoing uncertainty surrounding the global and domestic outlooks, it is important that federal transfers and social programs be sustainable and effective for Canadians.

To support fiscal arrangements with provinces and territories, the Department of Finance Canada will update regulations and legislation related to major transfer payment programs, to ensure that the administration of these programs remains timely, accurate and transparent. Furthermore, the Department will continue to improve modeling capacity when possible, and undertake further refinements of the data used in calculating major transfer entitlements, to support the effective management of transfer payment programs.

The Department will also continue to improve the transparency of the federal transfer payment system and continue to engage with the provinces and territories on the implementation of the 2014–15 legislative renewal of the Equalization and the Territorial Formula Financing Program.

Ensuring that tax agreements with provinces, territories and Aboriginal governments meet policy and administrative objectives

The Department will continue to work to enhance the application and administration of its tax agreements with provinces, territories and Aboriginal governments. This will include continuing to ensure that payments are aligned with the terms and conditions of the existing agreements so that they are accurate and timely.

The Department will also participate in negotiations with Aboriginal governments in respect of new tax administration agreements, and work with the provinces and territories to facilitate similar arrangements between interested provinces and territories and Aboriginal governments.

Supporting international development

The Department of Finance Canada will deliver on the Government of Canada's commitments to support international financial institutions and multilateral development banks in fulfilling their poverty reduction mandates in line with Canadian objectives. These objectives include strengthening governance and accountability and helping to ensure sustainable and inclusive global economic growth.

Supporting sustainable urban development and infrastructure renewal

With respect to the Toronto Waterfront Revitalization Initiative (TWRI), the Department of Finance Canada will oversee the completion of federally funded projects and the administrative wind-down of the TWRI program, to be terminated by March 31, 2014. The Department will also manage the Harbourfront Centre Funding Program, which has been renewed for five years until 2015–16, to support the economic, social and cultural development of the Toronto waterfront.

This program contributes to the Government of Canada's effective debt and other cost management on behalf of Canadians. It provides direction for Canada's debt management activities, including the funding of interest costs for the debt and service costs for new borrowings. In addition, the program manages investments in financial assets needed to establish a prudent liquidity position. This program supports the ongoing refinancing of government debt coming to maturity, the execution of the budget plan, and other financial operations of the government, including governance of the borrowing activities of major government-backed entities, such as Crown corporations. This program is also responsible for the system of circulating Canadian currency (bank notes and coins), to ensure efficient trade and commerce across Canada.

Managing Treasury and Financial Affairs

In 2013–14, the Department of Finance Canada will continue to take actions to ensure sufficient funding from government debt management operations while providing appropriate flexibility to adapt to changing circumstances, and ensure timely, cost-effective and well-managed funding for Crown corporations.

The Department will continue to monitor developments in Canadian capital markets and to implement the federal government's debt management strategy for 2013–14, continuing to manage rollover and refinancing risk and reporting, using key metrics to measure progress. In collaboration with the Bank of Canada, the Department will continue to implement the funding and investment plan to increase the government's liquidity position under the new prudential liquidity plan. The objective of the prudential liquidity plan is to safeguard the government's ability to meet payment obligations in situations where normal access to funding markets may be disrupted or delayed. The Department will also continue to work with the Bank of Canada on the implementation of the recommendations from an external study and internal work on the asset allocation framework of the Exchange Fund Account. Moreover, the Department will work with Crown corporations and market participants to effectively manage operations and provide advice on prudent debt management strategy.

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

Sound financial and human resources management in an environment of budgetary restraint

The Department of Finance Canada will continue to implement spending review decisions announced in Budget 2012, decisions which aim to refocus government and programs, making it easier for Canadians and businesses to deal with their government, and modernize and reduce the back office. Furthermore, the Department will continue to implement the departmental approach in support of the excellence agenda outlined in the Clerk of the Privy Council's Nineteenth Annual Report to the Prime Minister on Public Service Renewal.

The Department will continue to focus its efforts on developing and implementing strategic recruitment, employee development, performance management and retention strategies, including:

• Monitoring and reporting on the Corporate Human Resources Plan targets biannually using a well-defined performance measurement framework, including the monitoring of employment equity targets;
• Continuing to implement the renewed performance management program for non-EX employees, to provide a strengthened performance appraisal and feedback process in support of a high-performing workforce and the management of emerging talent; and
• Pursuing initiatives such as the university recruitment campaign, improved resource monitoring and operational planning tools, taking full advantage of the flexibilities provided by development programs for the Economics and Social Science Services; Personnel Administration; and Audit, Commerce and Purchasing groups, to encourage retention and additional cost-effective training and development offerings.

The Department will also strengthen the well-being and wellness of employees by ensuring the full implementation of the 2011 Public Service Employee Survey (PSES) Action Plan. In particular, it will continue to monitor the deliverables, adjusting the approach as needed, and prepare for the next PSES in 2014–15.

With respect to financial management, the Department will manage its spending review commitments while ensuring the maximum use of financial resources through continuing client engagement, increasing financial management accountability for results, and streamlined reporting requirements.

While continuing to implement and monitor progress on government-wide financial management policies and reports, the Department will begin work on implementation of Public Sector Accounting Standards for Foreign Currency Translation and Financial Instruments, both applicable to the Department for the first time, effective April 1, 2015.

Ensuring the availability of information management and information technology services, aligned with the plans and priorities of the Department

The Department of Finance Canada will continue to improve its information management (IM) and information technology (IT) infrastructure and services, to manage security concerns in a manner that addresses both security and work environment requirements. The Department will also be updating its IM and IT Strategic Plan, first, to strengthen information management practices and work toward full implementation in 2015 of the Treasury Board Directive on Recordkeeping, and second, to ensure that the department's employees continue to have the environment, tools and technical capacity to be effective and efficient by offering services in partnership with Shared Services Canada.

Supporting departmental initiatives

The Department of Finance Canada will continue to make available to Canadians key budgetary information, error-free and in real time, through the development and delivery of a variety of communications strategies and products. This includes continuing efforts to build on the new mobile and tablet-friendly versions of the budget, reflecting the shift from print to electronic publishing. The Department will continue to provide timely responses to media enquiries and correspondence, allowing for an enhanced understanding by Canadians of budgetary measures designed to support strong, sustainable and balanced economic growth and Canada's strong economic credentials and leadership on the world stage.

The Department's legal officers will provide legal support and expertise on a wide range of issues related to the Department's plans and priorities. For example, they will provide legal advice on a variety of tax matters concerning First Nations and will support federal government efforts to optimize Canada's tax systems. They will also provide litigation support on a range of important cases, including tax and tax-related litigation; constitutional issues related to Parliament's jurisdiction over banking, trade and commerce; the constitutional challenges to the Expenditure Restraint Act; and challenges to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act,initiated by the Federation of Law Societies of Canada.

The Department will continue to exercise sound management and decision making in responding to requests under the Access to Information Act and the Privacy Act, to meet statutory obligations under these acts. The Department will also continue to support a strong values and ethics culture and promote the highest standards of ethical conduct by administering, interpreting and providing guidance on the Department of Finance Code of Conduct, the Values and Ethics Code for the Public Sector and the Treasury Board Policy on Conflict of Interest and Post-Employment.Employees will also be provided with information and avenues to make disclosures of wrongdoing without fear of reprisal.

The Department is a participant in the Federal Sustainable Development Strategy (FSDS) and contributes to the targets for Greening Government Operations through the Internal Services program. The Department contributes to the following target areas of Theme IV: Shrinking the Environmental Footprint – Beginning with Government of the FSDS:

• Green Procurement;
• E-waste;
• Printing Units;
• Paper Consumption; and
• Green Meetings.

For additional details on the Department's Greening Government Operations activities, please see the List of Supplementary Information Tables in Section III.

The Department of Finance Canada's future-oriented statement of financial position is an integral component of the completed set of future-oriented financial statements. This statement, along with the complete set of future-oriented financial statements, is published exclusively on the Department's website.

All electronic supplementary information tables found in the 2013–14 Reports on Plans and Priorities can be found on the Department of Finance Canada website.

• Details on Transfer Payment Programs;
• Greening Government Operations;
• Horizontal Initiatives;
• Sources of Respendable and Non-Respendable Revenue;
• Upcoming Internal Audits and Evaluations over the next three fiscal years.

The tax system can be used to achieve public policy objectives through the application of special measures such as low tax rates, exemptions, deductions, deferrals and credits. The Department of Finance Canada publishes cost estimates and projections for these measures annually in the Tax Expenditures and Evaluations publication. The tax measures presented in the Tax Expenditures and Evaluations publication are the sole responsibility of the Minister of Finance.

Department of Finance Canada
19th floor, East Tower
140 O'Connor Street
Ottawa, Ontario K1A 0G5

Phone: 613-992-1573
Facsimile: 613-943-0938
TTY: 613-995-1455
Email: finpub@fin.gc.ca

Media Enquiries:
613-996-8080

Comments or questions regarding Department of Finance Canada
publications and budget documents:
Email: finpub@fin.gc.ca

^[1] Effective April 1, 2012, the Treasury Board of Canada Secretariat updated the terms used to describe the inventory of programs undertaken by departments. The term “Program Activity Architecture” is now known as “Program Alignment Architecture (PAA).” Some adjustments have been made to the Department of Finance Canada's PAA for 2013–14. What used to be a number of separate entries under the sub-program “Fiscal Arrangements with Provinces and Territories” now directly encompasses all the relevant expenditures in a single entry. In addition, the Toronto Waterfront Revitalization Initiative and the Harbourfront Centre Funding Program are now reported under the sub-program titled “Receipts from and Payments to Individuals and Organizations.” These changes only affect how program expenditures are categorized.

^[2] Type is defined as follows: previously committed to—committed to in the first or second fiscal year prior to the subject year of the report; ongoing—committed to at least three fiscal years prior to the subject year of the report; and new—newly committed to in the reporting year of the Report on Plans and Priorities or the Departmental Performance Report.

^[3] Significant variances in spending amounts are explained in the “Expenditure Profile” section.

^[4] Measures within this program contribute to Theme I: Addressing Climate Change and Air Quality, and Theme III: Protecting Nature, of the Federal Sustainable Development Strategy. These measures are the accelerated capital cost allowance for clean energy generation equipment, the Green Levy on certain fuel-inefficient passenger vehicles, the Public Transit Tax Credit, and the Ecological Gift Program. For details on the Department of Finance Canada's activities to support sustainable development, please visit the Department's website.

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