Archived - Operating context and key risks

Global economic activity is strengthening, after two consecutive years of deceleration. Most G7 countries have been expanding faster than their trend growth rates, and growth in emerging market economies remains solid. However, medium-term risks continue to loom. In particular, pressures from changing demographics, weak investment and productivity growth, lower oil and commodity prices, increasing household indebtedness, as well as risks from rising protectionism will continue to influence the Department of Finance Canada’s planned results and priorities in 2018–19.

The Department will continue its efforts to grow and diversify international trade. Liberalization is increasingly being accomplished through bilateral and regional trade agreements rather than multilateral trade agreements. Canada will continue its efforts to promote openness and trade, especially within North America, Asia and South America. In addition, there will be continued efforts to strengthen the competitiveness of Canadian manufacturers through trade, tariff and border policies.

The Department will manage preparations for Canada’s 2018 Presidency of the G7, providing an opportunity to play a leadership role on themes such as macroeconomic co-ordination, global growth, and shared prosperity and development. The Department will also need to respond to current and emerging economic, social, fiscal, tax and financial sector policy issues in a way that contributes to the sound management of Canada’s economy. The Department will continue to foster international economic policy coordination, contribute to international efforts to mitigate and prevent economic crises, and manage the allocation of scarce fiscal resources.

The complex and horizontal issues with which the Department is concerned require ongoing discussions, consultations and coordination with central agencies, other departments and governments, and external stakeholders. In this context, the Department of Finance Canada will need to maintain high-level engagement and strong collaborative relationships with domestic and international partners to fulfill its commitments and deliver for Canadians.

The Department operates in an environment where the decisions and actions of its employees can have far-reaching impacts on the Canadian public and economy. As a knowledge–based organization, the Department recognizes that its employees are its strength. The Department will continue to focus on providing its employees with a healthy and enabling work environment, so that it can attract, develop and retain a diverse and high–performing workforce that is fully committed to the success of the organization.

At the Department of Finance Canada, the term “risk” refers to the effect of uncertainty on our objectives and expected results. Whether a risk stems from the corporate management or the policy agenda, once identified and assessed, the risk is managed. The Department’s risk management process involves careful consideration of the external and internal environments, as well as attention to stakeholders through communications and consultations.

Risk management is implemented through the Integrated Planning Process, and the Department addresses uncertainty and possible exposure to risks by identifying key potential events or circumstances and by estimating their likelihood and impact. Risk analysis is used to develop mitigation strategies aimed at reducing or preventing any impairment of the Department’s objectives and at seizing opportunities to ensure their achievement.

Consistent with the Department’s Corporate Risk Profile, the following table describes three of the top departmental risks that may have an impact on planned results for 2018–19, and presents the Department’s risk response strategies to mitigate these risks.