Archived - Departmental Performance Report 2014-2015 - Supplementary Tables

The Federal Sustainable Development Strategy (FSDS) 2013–16 presents the Government of Canada's sustainable development activities, as required by the Federal Sustainable Development Act. In keeping with the objectives of the Act to make environmental decision making more transparent and accountable to Parliament, the Department of Finance Canada supports the implementation of the FSDS through the activities in this supplementary information table.

This Departmental Sustainable Development Strategy presents the results for Theme I – Addressing Climate Change and Air Quality, Theme III – Protecting Nature and Canadians, and Theme IV – Shrinking the Environmental Footprint – Beginning with Government.

The Department of Finance Canada is not responsible for leading a target for Themes I to III of the FSDS 2013–16.

The Department of Finance Canada provides effective economic leadership through its clear focus on one strategic outcome: a strong economy and sound public finances for Canadians. All programs delivered by the Department relate to this strategic outcome. The following implementation strategies related to goals and targets under Themes I and III of the FSDS are all elements of Sub-Program 1.1.1: Taxation (part of Program 1.1: Economic and Fiscal Policy Framework) of the Department's Program Alignment Architecture.

B.1 Theme I – Addressing Climate Change and Air Quality

Goal 1 – Climate Change: In order to mitigate the effects of climate change, reduce greenhouse gas emission levels and adapt to unavoidable impacts.

Target 1.1 – Climate Change Mitigation: Relative to 2005 emission levels, reduce Canada's total greenhouse gas emissions by 17 per cent by 2020.

Goal 2 – Air Pollution: Minimize the threats to air quality so that the air Canadians breathe is clean and supports healthy ecosystems.

Target 2.1 – Outdoor Air Pollutants: Improve outdoor air quality by ensuring compliance with new or amended regulated emission limits by 2020 and thus reducing emissions of air pollutants in support of Air Quality Management System objectives.

• 1. Accelerated capital cost allowance for clean energy generation equipment
• Encourage businesses, through the accelerated capital cost allowance for clean energy generation equipment, to invest in specified equipment that can contribute to a reduction in harmful emissions and to diversification of the energy supply (Implementation Strategies 1.1.38 and 2.1.2).
• The government provides an accelerated capital cost allowance (CCA) for income tax purposes under CCA Class 43.2 (50 per cent per year on a declining balance basis) for businesses that invest in clean energy generation and energy conservation equipment. Class 43.2 includes specified equipment that generates energy by using a renewable energy source (for example, wind, solar and small hydro), using fuels from waste (for example, landfill gas, wood waste and manure) or conserves energy by making efficient use of fossil fuels (for example, high-efficiency cogeneration systems).The provision of an accelerated CCA is an explicit exception to the general practice of setting CCA rates based on the useful life of assets. An accelerated CCA provides a financial benefit by deferring taxation. This incentive for investment is premised on the environmental benefits of low-emission or no-emission energy generation equipment and its ability to displace consumption of fossil fuels.

• i. Relationship between the implementation strategies and the FSDS targets

  To the extent that Class 43.2 encourages incremental investment in clean energy generation and energy conservation equipment, it could have an indirect positive impact on the environment. It could contribute to a reduction in greenhouse gas emissions, pursuant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, pursuant to Target 2.1 – Outdoor Air Pollutants.

  ii. Outline of the non-financial performance information

  Providing a modest financial incentive for investment in clean energy generation and energy conservation equipment provides an incentive for businesses to invest in such equipment.

• 2. Public Transit Tax Credit
• Provide tax relief to Canadians who use public transit regularly, and encourage individuals to make a sustained commitment to using public transit regularly to help reduce traffic congestion, air pollution and greenhouse gas emissions through the public transit tax credit (Implementation Strategies 1.1.20 and 2.1.5).
• The public transit tax credit allows individuals to claim a non-refundable tax credit for the cost of monthly public transit passes or those passes of a longer duration, effective July 1, 2006. The credit was extended in Budget 2007 to electronic fare cards and weekly passes when used on an ongoing basis.

• i. Relationship between the implementation strategies and the FSDS targets

  As stated in Budget 2006, the objective of the public transit tax credit is to encourage individuals to make a sustained commitment to use public transit regularly to help reduce traffic congestion in urban areas and to improve the environment. This measure could contribute to a reduction in greenhouse gas emissions, pursuant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, pursuant to Target 2.1 – Outdoor Air Pollutants.

  ii. Outline of the non-financial performance information

  The public transit tax credit is intended to encourage individuals to make a sustained commitment to public transit use by providing a tax credit for the purchase cost of monthly public transit passes and passes of a longer duration, as well as electronic fare cards and weekly passes when used on an ongoing basis. The Department of Finance Canada conducted an evaluation of the public transit tax credit in 2011 and found that the key conditions for the measure to be effective in increasing public transit use are present. In particular, evidence suggests that the demand for public transit is sensitive to a permanent price reduction and that the benefits of the public transit tax credit have been captured mainly by public transit users, as opposed to transit operators, through coincidental increases in public transit fares. The public transit tax credit evaluation was published in the 2011 edition of the Tax Expenditures and Evaluations report, available on the Department of Finance Canada website.

• 3. Green Levy
• Impose a Green Levy on the most fuel-inefficient passenger vehicles available in Canada (Implementation Strategies 1.1.37 and 2.1.27).
• The Green Levy applies to passenger vehicles with a weighted (55 per cent city and 45 per cent highway) fuel consumption rating of 13 litres or more per 100 kilometres and is imposed at rates ranging from $1,000 to $4,000. The Green Levy is payable by manufacturers or importers of new vehicles delivered after March 19, 2007, and by importers of used vehicles, if the used vehicle was originally put into service (in any jurisdiction) after March 19, 2007. The Canada Revenue Agency and the Canada Border Services Agency are responsible for the administration of the Green Levy and work with manufacturers and importers of vehicles to facilitate its application.

• i. Relationship between the implementation strategies and the FSDS targets

  The Green Levy aims at encouraging clean, sustainable transportation choices by Canadians by discouraging the purchase of certain fuel-inefficient vehicles. This measure could contribute to a reduction in greenhouse gas emissions, pursuant to Target 1.1 – Climate Change Mitigation, and to a reduction in air pollutants, pursuant to Target 2.1 – Outdoor Air Pollutants.

  ii. Outline of the non-financial performance information

  The Green Levy aims to continue discouraging the purchase of fuel-inefficient vehicles and to promote the development and deployment of cleaner transportation technologies.

B.2 Theme III – Protecting Nature and Canadians

Goal 4 – Conserving and Restoring Ecosystems, Wildlife and Habitat, and Protecting Canadians: Resilient ecosystems with healthy wildlife populations, so Canadians can enjoy benefits from natural spaces, resources and ecological services for generations to come.

Target 4.3 – Terrestrial Ecosystems and Habitat Stewardship: Contribute to the proposed national target so that by 2020, at least 17% of terrestrial areas and inland water are conserved through networks of protected areas and other effective area-based conservation measures.

• 4. Ecological Gifts Program
• Maintain the incentives for the protection of Canada's ecologically sensitive land, including habitat used by species at risk, through ongoing tax assistance for donations of ecologically sensitive land under the Ecological Gifts Program (Implementation Strategy 4.3.6).
• Under the Ecological Gifts Program, Canadian landowners may donate ecologically sensitive land, or easements and covenants on such land, to conservation charities to ensure its preservation in perpetuity. Under this program, donors may benefit from the charitable donations tax credit (for individuals) or the charitable donations deduction (for corporations) on the full value of the gifts of ecologically sensitive land. The carry-forward period for donations of ecologically sensitive land, or easements, covenants and servitudes on such land, was recently increased from 5 to 10 years. In addition, capital gains that have accrued on the donated land are eligible for a complete exemption from capital gains tax.
• To protect the public interest, Environment Canada is responsible for certifying:
• the eligibility of recipient charitable organizations
• the ecological sensitivity of the donation
• the fair market value of the donation
• In addition, to ensure the perpetual protection of the donated land, the Income Tax Act imposes special tax liabilities for recipients of ecologically sensitive land if there are any changes in use without the prior authorization of Environment Canada.

• i. Relationship between the implementation strategy and the FSDS targets

  The Ecological Gifts Program is intended to help Canada's landowners and conservation groups in their habitat conservation and protection efforts. In particular, donations of ecologically sensitive land can contribute to the protection of non-park protected habitat, including habitat used by species at risk, pursuant to Target 4.3 – Terrestrial Ecosystems and Habitat Stewardship.

  ii. Outline of the non-financial performance information

  Although the decision to donate ecologically sensitive land is often motivated by non-financial factors, the significant income tax benefits provided through the Ecological Gifts Program provide an incentive to further encourage donations of ecologically sensitive land.

Target 7.2: Green Procurement

As of April 1, 2014, the Government of Canada will continue to take action to embed environmental considerations into public procurement, in accordance with the federal Policy on Green Procurement.

Scope and Context

Environmental considerations are embedded in the Department's procurement. Goods are usually purchased through Public Works and Government Services Canada (PWGSC) standing offers and supply arrangements that include environmental performance specifications. When contracting for services, procurement to pay processes from electronic solicitation and bidding, use of scanning technology to issue contracts, as well as electronic invoicing and payment by direct deposit are embedded in the process.

Performance Measurement

Expected result

Environmentally responsible acquisition, use and disposal of goods and services.

Performance indicator

Performance level achieved

Departmental approach to further the implementation of the Policy on Green Procurement in place as of April 1, 2014.

Achieved as of April 1, 2014

Context: The "Go E" task team and the Enviro Committee were tasked with accelerating the move to paperless processes and other means of further greening government operations. The Enviro Committee has also used digital display panels throughout the Department to promote sound environmental practices and increase awareness.

Performance indicator

Performance level achieved

Number and percentage of procurement and/or materiel management specialists who completed the Canada School of Public Service Green Procurement course (C215) or equivalent, in fiscal year 2014–15.

8
Maintained current level of 100%

Scope: All departmental functional specialists in procurement and materiel management have completed the Green Procurement course.

Performance indicator

Performance level achieved

Number and percentage of managers and functional heads of procurement and materiel whose performance evaluation includes support and contribution toward green procurement, in fiscal year 2014–15.

2
Maintained current level of 100%

Scope: The Director and Team Leader of the Contracting and Procurement Division have performance objectives relating to green procurement activities.

Departmental Green Procurement Target

By March 31, 2017, 90% of purchases of audiovisual equipment will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the equipment.

Scope: Audiovisual equipment (for example, projectors, headsets, digital signage and televisions) purchased by the Department through PWGSC standing offers that include environmental performance specifications is reported. Audiovisual equipment purchased by Shared Services Canada in support of the 90 Elgin fit-up is not reported.

Performance indicator

Performance level achieved

Dollar value of audiovisual equipment purchased that meets the target objective relative to the total dollar value of all audiovisual equipment purchased.

84%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 90% of imaging hardware will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the equipment.

Scope: Imaging hardware (devices that provide scanning, copying and printing capability) purchased through PWGSC standing offers that include environmental performance specifications is reported.

Context: As part of the 2014–15 relocation to 90 Elgin, the Department updated departmental multi-functional devices (MFDs). A contract for a four-year lease of MFDs was executed using the PWGSC standing offer framework that includes environmental considerations.

Performance indicator

Performance level achieved

Dollar value of imaging hardware acquisitions that meet the target objective relative to the total dollar value of all imaging hardware acquired.

100%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 90% of information technology (IT) hardware purchases will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the equipment.

Scope: IT hardware (desktop computers, laptops, tablets and peripherals) purchased through PWGSC standing offers and supply arrangements that include environmental performance specifications is reported.

Context: Purchases totalled $530,000 in fiscal year 2014–15. Of this amount, $502,000 (95%) was for IT hardware purchased through standing offers or supply arrangements.

Performance indicator

Performance level achieved

Dollar value of IT hardware purchases that meet the target objective relative to the total dollar value of all purchases for IT hardware.

95%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 70% of office furniture purchases will include criteria to reduce the environmental impact associated with the production, acquisition, use and/or disposal of the furniture.

Scope: Furniture (chairs, desks, workstations, soft seating and accessories such as monitor arms and keyboard trays) purchased by the Department through PWGSC standing offers that include environmental performance specifications is reported. Furniture purchased by PWGSC in support of the 90 Elgin fit-up is not reported.

Context: Purchases totalled $493,000 in fiscal year 2014–15. Of this amount, $349,000 (71%) was for furniture purchased through standing offers or supply arrangements

PWGSC conducted a review of furniture procurement vehicles during 2014–15. As a result, some product lines were not available through standing offers. The environmental performance specifications for purchases made outside the standing offer framework were consistent with those for standing offer items, whenever feasible.

Performance indicator

Performance level achieved

Dollar value of office furniture purchases that meet the target objective relative to the total dollar value of all office furniture purchases.

71%
On track to achieve

Departmental Green Procurement Target

By March 31, 2017, 95% of copy paper, commercial printing, and/or envelope purchases will contain a minimum of 30% recycled content and be certified to a recognized environmental standard to reduce the environmental impact of production.

Scope: Copy paper.

Context: Copy paper purchases totalled $53,000 in fiscal year 2014–15. All copy paper was purchased through PWGSC standing offers and included 30% post-consumer recycled paper content.

All reports prepared in 2014–15 were available in electronic format only. Therefore, no printing contracts were awarded in 2014–15.

Performance indicator

Performance level achieved

Dollar value of copy paper, commercial printing and/or envelope purchases that meet the target objective relative to the total value of all copy paper, commercial printing and/or envelope purchases.

100%
On track to achieve

Implementation strategy element or best practice

Performance level achieved

7.2.1.5. Leverage common use procurement instruments where available and feasible.

Achieved

Implementation strategy element or best practice

Performance level achieved

Best Practice

7.2.3. Train acquisition cardholders on green procurement.

Context: The Department provides training to cardholders through information sessions and encourages them to incorporate green procurement considerations when making purchasing decisions.

Achieved

Target 7.3: Sustainable Workplace Operations

As of April 1, 2015, the Government of Canada will update and adopt policies and practices to improve the sustainability of its workplace operations.

Performance Measurement

Expected result

Departmental workplace operations have a reduced environmental impact.

Performance indicator

Performance level achieved

An approach to maintain or improve the sustainability of the departmental workplace is in place by March 31, 2015.

Achieved as of March 31, 2015

Context: The "Go E" task team and the Enviro Committee were tasked with developing and promoting sustainable workplace operations. The Department's new building is certified LEED Gold. The use of recycling centres is promoted, and a preliminary waste audit indicated that 62% of waste was being diverted from landfill. The Department also leveraged the move to 90 Elgin to purchase new MFDs.

During this process, the Department significantly reduced the number of print devices in use and achieved an 8:1 employee to printer ratio. Digital display panels are used to promote reduction of paper, and MFD defaults are set to duplex and black and white printing. The Department's Green Meeting Guide is posted on the departmental intranet site, and electronic distribution of documents and use of laptops at meetings are actively promoted. E-waste is reused, whenever possible, through the Computers for Schools program, or if necessary, disposed of in an environmentally conscious manner.

Implementation strategy element or best practice

Performance level achieved

7.3.1.1. Engage employees in greening government operations practices.

Achieved

Implementation strategy element or best practice

Performance level achieved

7.3.1.3. Maintain or improve existing approaches to sustainable workplace practices (i.e., printer ratios, paper usage, and green meetings).

Achieved

Implementation strategy element or best practice

Performance level achieved

7.3.1.5. Select and operate IT and office equipment in a manner that reduces energy consumption and materiel usage.

Achieved

Implementation strategy element or best practice

Performance level achieved

7.3.1.6. Dispose of e-waste in an environmentally sound and secure manner.

Achieved

The Department of Finance Canada's vision for sustainable development—"economic and fiscal policy frameworks and decisions that promote equity and enhance the economic, social and environmental well-being of current and future generations"—is consistent with its mandate to foster a strong economy. The Department's most important contribution to sustainable development lies in the development of advice and policies that ensure fiscal sustainability, that contribute to a high standard of living for future generations, and that help build strong social foundations. Through its work relating to tax policy and financial sector policy and in its central agency role, the Department contributes to efforts to integrate sustainable development considerations into policy making. In addition, the Department sets an example for other organizations through a commitment to sustainable development in its operations.

The Department of Finance Canada has established several goals, supplementary to those included in the FSDS, that focus on key areas where it can contribute to sustainable development. The Department has focused on making specific commitments in areas relating to its core mandate where it is the lead federal department or has a distinct role in areas where other departments have the policy lead. Each goal is accompanied by a set of objectives and commitments the Department has made toward meeting those objectives.

The Department of Finance Canada is the Government of Canada's primary source of analysis and advice on the broad economic and financial affairs of Canada. In addition to preparing the budget, the Department plays an important role in the development and implementation of government policy. As a central agency, the Department provides analysis and advice on the economic merit and fiscal implications of policy and program proposals developed by other government departments. As well, Department of Finance Canada officials serve as members of a broader team of federal officials that review options for, and the implications of, proposals that are presented to Cabinet. Policy development also takes place within the Department on those issues and areas of responsibility that fall within the Department's own mandate, including tax and tariff legislation, major federal transfers to provinces and territories, the legislative and regulatory framework for the financial sector, and representation of Canada within international financial institutions.

As a policy-oriented department, the Department of Finance Canada has limited direct involvement in delivering programs and services to Canadians. Nevertheless, the Department has a clear role to play in contributing to the government's sustainable development efforts. Sustainable development requires the long-term sustainability of the economy, social programs, the environment and natural resources. This requirement is consistent with the basic principle of sustainability as set out in the Federal Sustainable Development Act. Although the Department's mandate is most evidently linked to the economic and social pillars of sustainable development, the Department continuously strives to recognize the implications of its analysis and advice on all aspects of sustainable development, and to take into account the linkages between economic, social and environmental sustainability. In some cases, economic, social and environmental goals can be advanced together. In other cases, trade-offs are needed, but with informed decision making and choices that reflect careful deliberation.

Economic growth is an important aim of sustainable development because it contributes to a high quality of life for Canadians, provides the fiscal capacity for governments to address environmental and social issues, and ensures that the Canadian economy remains strong in the face of long-term challenges, such as an aging population and globalization. For example, population aging will bring future economic and fiscal challenges and put downward pressure on growth in living standards. By taking action now to ensure long-run fiscal sustainability and by identifying effective policies that encourage investment in the drivers of economic growth, such as human capital, physical capital and innovation, the Government can help to ensure a high standard of living for future generations. The Department addresses this challenge through responsible fiscal management, economic policy advice, sound framework policies, such as those related to taxation and the financial sector, and ongoing analysis of Canada's current and long-run economic and fiscal position.

The Department believes that safe, healthy and caring communities that provide all citizens with equal access to opportunities are vital to the creation of a strong, competitive, vibrant and sustainable economy and society. Sustainability in social policy is achieved by working with other departments to identify policies that support investments in people and their communities; working in cooperation and collaboration with other orders of government, which often have the primary responsibility for these policy areas, to ensure policy consistency and, where appropriate, stable and predictable funding; and developing specific policies that support this goal (such as tax and financial sector policies).

Management and accountability

The General Director of the Economic Development and Corporate Finance Branch, the Department of Finance Canada's Sustainable Development Champion, is responsible for coordinating activities and reporting on the Department's contributions to the FSDS and sustainable development more broadly.

The Resources, Energy and Environment Section of the Economic Development and Corporate Finance Branch, under the general direction of the Department's Sustainable Development Champion, coordinates departmental sustainable development management, policy and activities. The main coordination vehicle is the Sustainable Development Working Group (SDWG), which consists of officials from all branches and is chaired by the Chief of the Resources, Energy and Environment Section. The SDWG is responsible for coordinating the implementation of commitments related to sustainable development within the various branches of the Department, and contributes to reporting on plans and progress related to these commitments.

FSDS reporting

Environment Canada's Sustainable Development Office is responsible for preparing government-wide FSDS Progress Reports at least once every three years. The first report was completed in April 2011 and tabled in Parliament in June 2011, and a second report was tabled in February 2013. These reports offer an opportunity to assess progress in implementing the FSDS, to re-evaluate FSDS goals and targets, and to benefit from lessons learned. The Department of Finance Canada contributes to government-wide progress reporting through its participation in the FSDS Assistant Deputy Ministers Committee and the Directors General Committee, which are co-chaired by Environment Canada and Public Works and Government Services Canada.

The Department of Finance Canada evaluates its own contribution towards sustainable development, including activities and initiatives supplementary to those captured in the FSDS, as part of the annual Report on Plans and Priorities and Departmental Performance Report processes. The Department seeks other opportunities to report on progress in meeting its sustainable development objectives to the Sustainable Development Champion and the Departmental Coordinating Committee, a senior committee comprising general directors from each branch within the Department and other senior officials, as required.

During the 2014–15 reporting cycle, the Department of Finance Canada considered the environmental effects of initiatives subject to the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, as part of its decision-making processes. The Department of Finance Canada tracks the number of preliminary scans and full Strategic Environmental Assessments (SEAs) that it completes and has committed to report this information each year in its Departmental Performance Report. In 2014–15, a total of 202 preliminary scans and 4 full SEAs were conducted. Through the SEA process, some proposals were found to have possible positive or negative effects on the 2013–16 FSDS goals and targets in Theme I – Addressing Climate Change and Air Quality; Theme II – Maintaining Water Quality and Availability; and Theme III – Protecting Nature and Canadians.

Additional information on the results of SEAs is available on the Department's public statements website.

• Payments to the International Development Association
• Fiscal Equalization (Part I—Federal-Provincial Fiscal Arrangements Act)
• Territorial Formula Financing (Part I.1—Federal-Provincial Fiscal Arrangements Act)
• Canada Health Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)
• Canada Social Transfer (Part V.1—Federal-Provincial Fiscal Arrangements Act)
• Statutory Subsidies (Constitution Act, 1867; Constitution Act, 1982; and other statutory authorities)
• Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964)
• Alternative Payments for Standing Programs (Part VI—Federal-Provincial Fiscal Arrangements Act)
• Debt Payments on Behalf of Poor Countries to International Organizations Pursuant to section 18(1) of the Economic Recovery Act (stimulus)
• Payment to Provinces regarding Sales Tax Harmonization (Part III.1—Federal-Provincial Fiscal Arrangements Act)
• Additional Fiscal Equalization to Nova Scotia (Part I—Federal-Provincial Fiscal Arrangements Act)
• Additional Fiscal Equalization Offset Payment to Nova Scotia (Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act)
• International Bank for Reconstruction and Development for the Agriculture Advance Market Commitment (Bretton Woods and Related Agreements Act, section 8)
• Incentive for Provinces to Eliminate Taxes on Capital (Part IV—Federal-Provincial Fiscal Arrangements Act)
• Canadian Securities Regulation Regime Transition Office (Canadian Securities Regulation Regime Transition Office Act)
• Establishment of a Canadian Securities Regulation Regime and a Canadian Regulatory Authority (Budget Implementation Act, 2009)
• Fiscal Stabilization (Part II—Federal-Provincial Fiscal Arrangements Act)
• Harbourfront Centre Funding Program (Vote 5)

Name of horizontal initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime

Name of lead department(s): Department of Finance Canada

Federal partner organization(s): Canada's AML/ATF Regime is a horizontal initiative comprising both funded and non-funded partners. The funded partners are the Department of Finance Canada, the Department of Justice Canada, the Public Prosecution Service of Canada (PPSC), the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the Canada Border Services Agency (CBSA), the Canada Revenue Agency (CRA), the Canadian Security Intelligence Service, and the Royal Canadian Mounted Police (RCMP). The non-funded partners are Public Safety Canada, the Office of the Superintendent of Financial Institutions Canada, and Foreign Affairs, Trade and Development Canada.

Non-federal and non-governmental partner(s): Not applicable

Start date of the horizontal initiative: June 2000

End date of the horizontal initiative: Ongoing

Total federal funding allocated (start to end date) (dollars)*: $808,447,199

Funding contributed by non-federal and non-governmental partners (dollars): Not applicable

Description of the horizontal initiative: Canada's AML/ATF Regime was formally established in 2000 as the National Initiative to Combat Money Laundering (NICML), as part of the government's ongoing effort to combat money laundering in Canada. Legislation adopted that year, the Proceeds of Crime (Money Laundering) Act, created a mandatory reporting system for suspicious financial transactions, large cross-border currency transfers, and certain prescribed transactions. The legislation also established FINTRAC to collect and analyze these financial transaction reports and to disclose pertinent information to law enforcement and intelligence agencies. In December 2001, the Proceeds of Crime (Money Laundering) Act was amended to include measures to fight terrorist financing and was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The NICML was expanded and its name was formally changed to "Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime."

The Regime is continually reviewed to ensure that it remains effective, addresses emerging risks, and maintains Canada's international leadership in the fight against money laundering and terrorist financing. Reviews are informed by various evaluations, consultations with industry, assessments of money laundering and terrorist financing risks, as well as international considerations, including the activities of the Financial Action Task Force (FATF) and the actions of G7 partners.

As a result of reviews, changes were made to the PCMLTFA and Canada's AML/ATF Regime over the years. The most significant changes were made following the Parliamentary Reviews of 2005-06 and 2012-13.

Shared outcome(s): To detect and deter money laundering and the financing of terrorist activities and to facilitate the investigation and prosecution of money laundering and terrorist financing offences.

Governance structures: Canada's AML/ATF Regime is a horizontal initiative comprising 11 federal partner organizations, coordinated by the Department of Finance Canada.

An interdepartmental steering committee, led by senior officials and consisting of all partners, provides input and advice on AML/ATF policy. In addition, general advice on Canada's AML/ATF Regime is also provided by the Public/Private Sector Advisory Committee, a broad-based advisory group composed of public and private sector representatives.

Department of Finance Canada: The Department developed a set of legislative amendments to the PCMLTFA that received royal assent in June 2014. The measures strengthened customer due diligence standards; closed gaps in Canada's AML/ATF Regime; improved compliance, monitoring and enforcement; strengthened information sharing in the Regime; and brought into force countermeasures.

The Department also led an assessment of money laundering and terrorist financing risks in Canada and conducted a self-assessment of Canada's Regime against the FATF global AML/ATF standards in preparation for the FATF 2015 mutual evaluation of Canada.

FINTRAC: FINTRAC's financial intelligence was used by police, law enforcement and national security Regime partners in hundreds of money laundering and terrorist financing investigations to confirm existing information and expand the scope of a wide variety of criminal investigations where the origins of the suspected criminal proceeds were linked to drug offences, fraud, tax evasion, customs and excise offences, corruption, human smuggling and trafficking, and other criminal offences.

Given the importance of suspicious transaction reporting to FINTRAC's analysis and financial intelligence, FINTRAC reached out to reporting entities last year to enhance their awareness of their reporting obligations and, more importantly, to strengthen their understanding of what constitutes a useful suspicious transaction report. FINTRAC also refined its methodology for the assessment of compliance related to suspicious transaction reporting and communicated this to reporting entities. As a result of these efforts, suspicious transaction reporting increased by 13 per cent in 2014-15 and the quality of the reports received by FINTRAC improved significantly, strengthening FINTRAC's ability to generate and disclose financial intelligence.

RCMP: The RCMP completed the implementation of the new Federal Policing model where criminal intelligence resources now focus on National Tactical Enforcement Priority investigations and other federal policing priority investigations.

CRA: Compliance Programs Branch: The CRA completed 73 audits based on information contained in FINTRAC disclosures, with total federal income taxes reassessed in the amount of $42,328,998.

CRA: Charities – Public Safety and Anti-Terrorism: With respect to its anti-terrorist financing responsibilities, the CRA's Charities Directorate completed two audits resulting in one compliance agreement and one education letter. In addition, 18 applicant organizations withdrew or abandoned their applications or were denied registration following examination by the Charities Directorate.

The Charities Directorate co-led an update of the FATF Best Practices Paper "Combatting the Abuse of Non-Profit Organisations (Recommendation 8)." In addition, a representative of the Charities Directorate participated as a subject-matter expert at a capacity-building workshop in Bratislava, Slovakia, organized by the Organization for Security and Co-operation in Europe and the United Nations Counter-Terrorism Committee Executive Directorate.

Results achieved by non-federal and non-governmental partners: Not applicable

Comments on variances: Not applicable

Contact information
Ian Wright
Chief, Financial Crimes – Domestic Section
Phone: 613-369-3853

* Canada's AML/ATF Regime is an ongoing horizontal initiative, with no fixed end date. Therefore, allocation amounts include funding up to and including 2014–15 but exclude future funding. Total funding is the sum of the reporting organizations' total allocation amounts.

ER 1.1

The Department of Finance Canada will continue its effective oversight of Canada's AML/ATF Regime. The Department will also focus on the following areas:

• Participating in strategic domestic and international policy development activities that support the government's commitments to the AML/ATF Regime, including continuing work with respect to potential policy changes outlined in the Department's December 2011 consultation paper entitled "Strengthening Canada's AML/ATF Regime"
• Assessing and advising on emerging trends, methods and risks related to money laundering and terrorist financing
• Leading the development of a national AML/ATF risk assessment for Canada
• Leading interdepartmental work in preparation for the next mutual evaluation of Canada under the FATF 4th round mutual evaluation process
• Heading the Canadian delegation to participate as an active member in the FATF and the Asia/Pacific Group on Money Laundering, and participating as a cooperative and supporting nation in the Caribbean Financial Action Task Force and as an observer of the Financial Action Task Force of Latin America (formerly the Financial Action Task Force body of South America Against Money Laundering)
• Continuing to participate in horizontal initiatives related to national security, led by Public Safety Canada

AR 1.1

The Department of Finance Canada continued to support Canada's AML/ATF Regime through coordination activities and AML/ATF policy development.

The Department proposed policies aimed at strengthening Canada's AML/ATF Regime and improving Canada's compliance with international standards, while minimizing the compliance burden. For example, a set of legislative amendments to the PCMLTFA, developed by the Department, received royal assent in June 2014. Consultations on, and policy development of, proposed regulatory amendments needed to enact certain legislative amendments as well as other stand-alone regulatory measures were also undertaken;

The Department assessed and advised on emerging trends, methods and risks related to money laundering and terrorist financing, which included appearances before the Standing Senate Committee on Banking, Trade and Commerce for its study of digital currency and appearances before the House of Commons Standing Committee on Finance for its study on terrorist financing.

In addition, the Department:

• Led the development of a national AML/ATF risk assessment for Canada;
• Led interdepartmental work in preparation for the 2015 mutual evaluation of Canada by the FATF;
• Led the Canadian delegation to the FATF and the Asia/Pacific Group on Money Laundering, and participated as a cooperative and supporting nation in the Caribbean Financial Action Task Force and as an observer of the Financial Action Task Force of Latin America; and
• Provided advice and support for broader national security issues that affect Canada's AML/ATF Regime, including Canada's counter-terrorism strategy.

ER 2.1

The IAG (which is part of the Litigation Branch) and the CLPS of the Department of Justice Canada play a significant role in the AML/ATF Regime. For 2014–15, it is anticipated that the IAG and the CLPS will use the resources they receive to carry out work related to the FATF, including attending FATF−related international meetings, providing advice to AML/ATF Regime partners in relation to the FATF, and participating in interdepartmental work in preparation for the next evaluation of Canada under the FATF's 4th round mutual evaluation process. These tasks may include support and attendance related to the meetings of FATF working groups (for example, the new Policy Development Group, the International Co-operation Review Group, and the Risks, Trends and Methods Group), and FATF-Style Regional Bodies, including the Asia/Pacific Group on Money Laundering, the Caribbean Financial Action Task Force, and the Financial Action Task Force of Latin America. Resources will also be allocated to ensure that the continued involvement of CLPS in policy development relating to money laundering and terrorist financing. Finally, the Human Rights Law Section will continue to participate, as required, with respect to constitutional issues raised in relation to proposed amendments or in the course of prosecutions.

AR 2.1

The Department of Justice Canada, including the CLPS and particularly the Criminal sector of the Litigation Branch, continued operational work involving requests for mutual legal assistance and extradition in support of Canada's AML/ATF Regime. Counsel continued to provide legal advice to the Department of Finance Canada and other AML/ATF Regime partners, and attended FATF meetings. The Department of Justice Canada also played a role in the self-assessment process for the 2015 mutual evaluation of Canada by the FATF. The AML/ATF funds earmarked for the Department of Justice Canada were used solely for Regime-related purposes.

ER 3.1

In 2014–15, the PPSC will continue to provide legal advice and support to the RCMP and other law enforcement agencies during the course of investigations related to the proceeds of crime, money laundering and terrorist financing provisions of the Criminal Code as well as the PCMLTFA, and to undertake prosecutions that arise out of those investigations. In addition, the PPSC will continue to provide AML/ATF Regime–related training to law enforcement personnel and prosecutors, and to support policy development and coordination. Finally, the PPSC will support the work of the FATF, as required.

AR 3.1

The PPSC dealt with a number of new AML/ATF Regime-related charges, including 5,167 related to possession of proceeds of crime, 59 related to money laundering, and 1 related to terrorism financing under the Criminal Code.The PPSC also dealt with 8 charges under the PCMLTFA.

The PPSC provided legal advice on a number of the files involving new charges. Provision of legal advice was recorded in 3 per cent of the possession of proceeds of crime files and in 30 per cent of money laundering files. The PPSC also provided legal advice on the PCMLTFA files that were handled by in-house counsel.

Where required, PPSC counsel provided legal support and training to law enforcement personnel over the course of their investigations. Resources were also dedicated to policy development and coordination to ensure consistency in prosecutorial activities across all regions.

The PPSC also contributed to Canada's submission to the FATF mutual evaluation exercise by producing trend data and analysis pertaining to AML/ATF Regime-related files and charges.

ER 4.1

FINTRAC's Financial Intelligence Program produces trusted and valued financial intelligence products, including tactical case disclosures on suspected money laundering, terrorist activity financing, and other threats to the security of Canada, as well as strategic intelligence such as money laundering and terrorist financing trends reports, country- and group-based financial intelligence assessments, and vulnerability assessments of emerging financial technologies or services. The program's products are relied on, and sought after, by Canadian law enforcement at the federal, provincial and municipal levels; by counterpart agencies and domestic and international intelligence bodies; and by policy and decision makers working to identify emerging issues and vulnerabilities in the AML/ATF Regime.

In 2014–15, FINTRAC will continue to provide its partners, policy makers and other interested parties with relevant and actionable financial intelligence products that contribute to the public safety of Canadians, and to support efforts to disrupt the ability of criminals and terrorist groups that seek to abuse Canada's financial system, while reducing the profit incentive of crime.

AR 4.1

FINTRAC made 1,260 disclosures of actionable financial intelligence to its AML/ATF Regime partners. Of these disclosures, 923 dealt solely with money laundering, 337 dealt solely with terrorism financing and other threats to the security of Canada, and 109 dealt with all these areas.

Sixty-seven per cent of case disclosures were initiated by Voluntary Information Records (VIRs). VIRs are used by FINTRAC's investigative and intelligence partners to identify priority investigations where financial intelligence could make an important contribution. A total of 1,380 VIRs were received by FINTRAC during 2014-15.

FINTRAC produced strategic financial intelligence to provide a wide analytic perspective on existing and emerging issues of interest to the Canadian security and intelligence community, policy and decision makers, international partners and allies, reporting entities and other stakeholders. FINTRAC also regularly engaged with domestic and international partners, providing assessments, briefs and other strategic intelligence in support of the Government of Canada's intelligence priority-setting exercises, the development of AML/ATF policy and regulatory changes, criminal intelligence needs and the Government of Canada's listing process under the Anti-Terrorism Act.

Understanding terrorism financing in the broader national security context has always been a priority for FINTRAC; however, the issue received additional prominence in 2014-15. During the year, FINTRAC worked closely with domestic and international agencies to develop a common understanding of the threat posed by the Islamic State of Iraq and the Levant (ISIL) and the foreign fighter issue, to better inform Canada's ability to respond to it.

ER 4.2

As part of Canada's AML/ATF Regime, FINTRAC seeks to counter money laundering and terrorist financing by improving the compliance behaviours of reporting entities with obligations under Part 1 of the PCMLTFA and the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, which include obligations for reporting, record keeping, identity verification and other requirements.

In 2014–15, FINTRAC will continue to detect and address non-compliance with legislative obligations among reporting entities using a risk-based approach, where compliance activity is undertaken in a manner that is commensurate with the risk of non-compliance. FINTRAC will also continue to support reporting entities and will ensure that they receive timely and accurate responses to their inquiries.

AR 4.2

Compliance examinations continued to be the primary instrument for assessing and enforcing compliance and for ensuring that FINTRAC receives quality and timely reports from reporting entities across Canada. FINTRAC conducted 629 examinations, focusing on more complex and lengthy examinations of larger reporting entities in higher-risk sectors in order to determine how effectively they were fulfilling their compliance obligations. The shift from ensuring that reporting entities have the required measures in place to evaluating the effectiveness of those measures represents an important development in FINTRAC's Compliance Program.

FINTRAC also enhanced its Compliance Program to ensure that the most serious cases of non-compliance are dealt with on a priority basis. The selection of follow-up cases is now based on levels of non-compliance observed in previous examinations and on other risk factors available in FINTRAC's risk-assessment model, which ensures that FINTRAC manages risk, provides a treatment commensurate with the level of non-compliance observed, and effectively uses its resources to follow-up on entities with significant levels of non-compliance.

An Administrative Monetary Penalty (AMP) is the ultimate tool that FINTRAC can apply in a range of remedial actions for improving compliance with the PCMLTFA. If FINTRAC determines that an AMP should be issued, a Notice of Violation (NOV) is sent to the entity, outlining the violation(s) with the PCMLTFA and setting out the penalty amount. FINTRAC issued 16 AMPs in 2014-15. Since the AMP regulations came into force in December 2008, 73 NOVs have been issued, bringing the overall total penalties to $5,117,710. Penalties have been imposed in the following sectors: credit unions/caisses populaires, money services businesses, securities dealers, casinos and real estate.

FINTRAC's Compliance Program responded to numerous enquiries on a broad range of issues, including reporting obligations, access to reporting systems, and registration of money services businesses. FINTRAC also responded to 7,460 general inquiries from reporting entities or their representatives from across the country.

ER 4.3

Not applicable

AR 4.3

FINTRAC operationalized the changes flowing from Economic Action Plan 2014 Act, No. 1, including the authority to disclose financial intelligence to other AML/ATF Regime partners on threats to Canada's security. FINTRAC also collaborated with the Department of Finance Canada on the development of regulations related to a number of other provisions coming into force.

FINTRAC continued to participate in Department of Finance Canada-led Regime-wide initiatives in preparation for the FATF 2015 mutual evaluation of Canada's AML/ATF Regime.

FINTRAC also made a number of significant contributions to broader Regime-wide and government-wide initiatives, including the National Anti-Drug Strategy and Canada's Counter-Terrorism Strategy.

FINTRAC's Internal Services supported the work of the Centre's Financial Intelligence and Compliance Programs by providing effective Communications, Legal Services, Human Resources, Financial Management, Information Management and Technology, and Security.

ER 5.1

As part of the Federal Policing Re-engineering (FPR), Money Laundering resources were pooled with other federal resources and now form part of Federal Serious and Organized Crime (FSOC). The FSOC units include analytical resources. RCMP money laundering investigators remain located in the high-risk locations and, as part of the FSOC units, will continue to detect and deter money laundering activities, and will continue to monitor and assess money laundering intelligence in order to develop proactive investigations.

Partnerships with domestic working partners, international law enforcement and regulatory entities will continue to be developed and leveraged for a holistic enforcement and prevention approach.

AR 5.1

The RCMP`s new Federal Policing model focuses on National Tactical Enforcement Priorities (NTEP) investigations, as well as on other federal policing priority investigations. These investigations are of national interest and address threats presented by either individuals or groups involved in money laundering, terrorist financing and other criminality. Financial criminal intelligence is a key factor in this new policing model.

The RCMP conducted the following successful anti-money laundering investigations:

• The RCMP's Greater Toronto Area (GTA) Financial Crime unit charged 11 individuals after over 150 international investors lost $4.4 million in an alleged elaborate investment scam. The investigation revealed investors funds were never used to get approval of breast cancer scanning machines or to open clinics but instead were laundered or paid out in wages for the benefit for those running the scam. Charges of fraud, money laundering, organized crime offences, and possession of proceeds of crime have been filed. The RCMP was assisted by information from the Ontario Securities Commission, the U.S. Securities and Exchange Commission, and FINTRAC.
• In August 2014, following a nine-month investigation, members of the RCMP in Alberta disrupted a drug-trafficking organization by raiding a Red Deer home and seizing drugs and cash and subsequently restraining various bank accounts (valued at approximately $103,000). Members of the team with expertise in financial investigations were able to gather evidence to support possession of proceeds of crime and money laundering charges in addition to drug-trafficking charges. FINTRAC intelligence was also used in this case.

Under Foreign Affairs, Trade and Development Canada's Anti-Crime Capacity-Building Program, the RCMP provided assistance to government agencies involved in addressing money laundering and terrorist financing in Panama, Jamaica, and Trinidad and Tobago. In Panama, RCMP Money Laundering experts participated in a needs assessment resulting in the development and delivery of two-week courses on AML investigation techniques to Panamanian law enforcement. In Jamaica and Trinidad and Tobago, mentoring was provided, in cooperation with FINTRAC, to review the analysis of financial intelligence, investigative processes, and the policies and procedures of these jurisdictions. Best practices, tools and processes that will enhance domestic and international cooperation in combatting money laundering and terrorist financing were discussed.

ER 5.2

Through the gathering and analysis of financial intelligence, the FPCO, INSETs and NSESs will focus on converting financial criminal intelligence into proactive investigations, thus enhancing the RCMP's ability to detect and deter terrorist financing activities. The FPCO, INSETs and NSESs will continue to work closely with domestic partners to further criminal investigations of terrorist financing and will continue to participate in, and contribute to, international organizations such as the FATF and international law-enforcement working groups on terrorist financing.

AR 5.2

The RCMP's FPCO supports counter-terrorism strategies with respect to terrorist financing, financial intelligence gathering, investigations and enforcement.

The RCMP produced a Criminal Intelligence Report that asserted that the International Relief Fund for the Afflicted and Needy (IRFAN) transferred approximately $14.6 million to various organizations associated with Hamas (a listed terrorist entity) between 2005 and 2009. The report resulted in the listing of IRFAN as a terrorist entity under the Criminal Code. The list allows federal authorities to more easily seize assets and funds of listed groups.

FPCO submitted 75 Voluntary Information Reports to FINTRAC and received approximately 194 terrorist financing-related disclosures from FINTRAC. FPCO also submitted five requests for terrorist-related information to the CRA's Charity Directorate and received seven requests for information from the Directorate.

FPCO continued to provide training to the RCMP and partner agencies. Two ATF courses were delivered to 42 individuals.

FPCO continued to support the FATF. Building on existing partnerships with the Regime's lead department (the Department of Finance Canada) and the other Regime partners, the RCMP participated in seven groups and conferences for practitioners.

The Department of Finance Canada continued to consult with FPCO on FATF-related matters, such as international cooperation, information sharing and related projects.

ER 6.1

The CRA is focusing on the following three key areas: participating in committees and initiatives that aim to manage and strengthen Canada's AML/ATF Regime; continuing to enhance operational relationships with FINTRAC and other AML/ATF Regime partners; and conducting analysis related to money laundering and tax avoidance and evasion, which includes conducting compliance action focused on individuals and entities that are participating in money laundering and terrorist financing activities.

Until March 2013, compliance action on FINTRAC referrals was completed by the Special Enforcement Program (SEP). Because of organizational changes within the CPB, the SEP has been discontinued and its work is now being completed by auditors in the Small and Medium Enterprises Directorate (SMED). The Criminal Investigations Program (CIP) continues to receive and analyze all FINTRAC disclosures for intelligence and potential criminal investigations before referring them to the SMED workload development area.

In 2014–15, the CPB will continue to process all disclosures from FINTRAC on a priority basis. The CPB will thoroughly review all disclosures received from FINTRAC and select for compliance actions those with identifiable tax and collection potential. The projected number of audits will remain at 90 cases, with a projected federal tax recovery of $9,000,000. Given the complexity of the files received from FINTRAC, the lengthy amount of time required to complete these cases, and the organizational changes within the CPB, there may be an impact on the number of audits completed in 2014–15. These factors may also potentially have an impact on the federal tax recovery for these cases.

Information will be gathered from the FINTRAC disclosures and resulting compliance actions for intelligence purposes in an effort to identify trends that could positively impact the quality and success of future compliance actions.

AR 6.1

The CRA attended AML/ATF Regime meetings as well as multiple conferences and meetings involving external law enforcement. The Criminal Investigations Directorate (CID) continued to enhance its operational relationship with FINTRAC through meetings that focused on operational functions, providing feedback and improving the quality of information shared between the two organizations.

CID analyzed all FINTRAC disclosures in an effort to identify trends related to tax avoidance and evasion, with an emphasis on international non-compliance. CID also placed a great emphasis on sending Voluntary Information Records to FINTRAC for most cases that were reviewed or accepted for criminal investigation.

FINTRAC disclosures were also reviewed by CID for potential tax evasion or fraudulent activity. If the disclosure had potential for a criminal investigation, it was referred to one of the six Criminal Investigations Divisions across the country. If the disclosure did not have potential for a criminal investigation, it was forwarded to the SMED or the Offshore Compliance Division (OCD) for civil compliance actions.

CID received and reviewed 119 FINTRAC disclosures between April 1, 2014, and March 31, 2015, an increase of 8 disclosures over the previous year. One hundred and four of these disclosures were referred to the SMED, and 15 were referred to CID.

ER 6.2

The CRA has responsibility for administering the registration system for charities under the Income Tax Act. The existence of a strong regulatory deterrence against terrorist abuse of charities contributes to suppressing the financing of terrorism in Canada and to protecting and preserving the social cohesion and well-being of Canadians. The CRA's regulatory oversight of charities has been strengthened by the enactment of complementary measures under the Charities Registration (Security Information) Act and the PCMLTFA and by changes to the Income Tax Act that authorize broader information sharing between AML and ATF partners. Under these authorities, intelligence provided to the CRA assists in its mandate to protect the integrity of the registration system for charities, and information disclosed by the CRA to its partners can be used for investigative purposes. In 2014–15, the CRA will continue to identify and respond to cases involving possible links to terrorism by improving systems to support decisions and refining risk management tools. The CRA will contribute to the international fight against terrorist financing and bring regulatory actions to the attention of Canadians. The CRA will also continue to collaborate with AML/ATF Regime partners through domestic interdepartmental working groups and internationally through the FATF and the United Nations.

AR 6.2

With respect to its anti-terrorist financing responsibilities, the CRA's Charities Directorate continued its core activities of reviewing applications for charitable registration, monitoring registered charities, carrying out regulatory activities, and exchanging information under legal authorities with Canada's AML/ATF Regime partners.

Specifically, the Directorate:

• Reviewed 3,367 applications for registered charitable status and conducted detailed examinations of 20 applications;
• Performed examination-related functions that resulted in the registration of nine charities, the abandonment of nine applications, the withdrawal of six applications, and the denial of three applications for charitable registration;
• Completed two audits resulting in one compliance agreement and one education letter and worked on nine active audits; and
• Received 51 disclosures from, and made 47 disclosures to, Canada's AML/ATF Regime partners.

Internationally, the Charities Directorate co-led an update of the FATF Best Practices Paper "Combatting the Abuse of Non-Profit Organisations (Recommendation 8)."

A representative of the Charities Directorate participated as a subject-matter expert at a capacity-building workshop in Bratislava, Slovakia, organized by the Organization for Security and Co-operation in Europe and the United Nations Counter-Terrorism Committee Executive Directorate.

ER 7.1

Border services officers (BSOs) maintain the responsibility to enforce the physical cross-border reporting obligation, including the examination of baggage and conveyances, and to question and search individuals for unreported or falsely reported currency and monetary instruments.

BSOs continue to seize currency and monetary instruments if they are not reported and are greater than the reporting threshold. Seized non-reported currency and monetary instruments are forfeited with no terms of release when BSOs suspect that the seized currency or monetary instruments are proceeds of crime or funds for use in terrorist financing activities. In all other instances, the seized amount will be returned upon payment of a penalty. BSOs are trained to recognize various monetary instruments and potential instances of non-compliance.

AR 7.1

BSOs carried out 1522 currency seizures, an increase of 8.87 per cent over the previous year.

The total amount seized was Can$29,635,189.30, an increase of 27.47 per cent over the previous year. Of the seized currency, $3.4 million was forfeited to the Crown as suspected proceeds of crime (78 Level 4 seizures), and penalties for Level 1, 2 and 3 seizures amounted to nearly Can$700,000.

BSOs collected 43,305 Cross-Border Currency and Monetary Instruments Reports from travellers and couriers, an increase of 3.92 per cent over the previous year.

ER 7.2

Recourse is the legislative or administrative mechanism that provides Canadians with a timely, objective, consistent and transparent internal review process intended to determine the correctness of CBSA decisions and actions taken under the PCMLTFA.

AR 7.2

The Recourse Program rendered decisions on 204 actions taken under the PMCLTFA and received 182 requests for appeals of CBSA decisions and actions taken under the PMCLTFA.

ER 7.3

Internal Services:

• Provide functional direction to the regions regarding the administration and enforcement of Part 2 of the PCMLTFA;
• Provide critical strategic planning, priority setting and coordination for the Cross-Border Currency Reporting Program;
• Continue to work closely with other key government departments on matters related to money laundering and terrorist financing; and
• Continue to be involved in international conferences and workshops that require the presence of cross-border law enforcement expertise.

AR 7.3

The Cross-Border Currency Reporting (CBCR) Program continued to provide functional guidance to the regions on the administration and enforcement of Part 2 of the PCMLTFA.

The CBSA continued to participate in the Department of Finance Canada-led Mutual Evaluation Coordination Working Group preparing for the 2015 mutual evaluation of Canada's AML/ATF Regime by the FATF. Key activities included contributing risk assessment subject-matter expertise to the development and production of Canada's inaugural inherent risk assessment of anti-money laundering and anti-terrorist financing; and contributing evidence and case studies to demonstrate the effectiveness of Canada's AML/ATF Regime. These activities led to the inclusion of trade and commercial fraud as a top risk in the new National Risk Assessment.

The CBSA:

• Conducted an internal diagnostic of the CBCR Program and used the findings to identify key program integrity concerns to be addressed on a priority basis in 2015-16 and beyond;
• Received approvals to redesign CBCR Program training for front-line officers in support of efficient administration and enforcement of Part 2 of the PCMLTFA;
• Updated CBSA IT software components to ensure that Cross-Border Currency or Monetary Instruments Reports and seizure reports are successfully transmitted from CBSA to FINTRAC;
• Became a member of the newly formed Public Safety Threat Resourcing Working Group, tasked with coordinating Public Safety Portfolio engagement with the Department of Finance Canada on issues related to Canada's AML/ATF Regime and the 2015 FATF mutual evaluation of Canada, and with developing and coordinating responses to AML/ATF-related issues within the Public Safety Portfolio by identifying program management challenges and possible responses;
• Continued to engage with FINTRAC, Public Safety and foreign government partners on money laundering and terrorist-financing threats to international trade systems, to better understand Canada's risk exposure in this domain;
• Continued research and analysis toward the production of a strategic risk assessment of trade fraud, including trade-based money laundering; and
• Continued to provide FINTRAC with electronic and paper copies of all Cross-Border Currency and Monetary Instrument Reports processed by BSOs, as well as currency seizure information.

Response to parliamentary committees: Not applicable.

Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development):

2014 Spring Report of the Auditor General of Canada, Chapter 3: Aggressive Tax Planning.

• The audit focused on how the Canada Revenue Agency manages the Aggressive Tax Planning (ATP) program and how the Department of Finance Canada responds to requests for legislative changes to address the ATP issues that the Canada Revenue Agency identifies.
• The objectives of the audit were to determine whether the Canada Revenue Agency is protecting the tax revenue base by detecting and correcting this type of non-compliance and deterring the use of ATP; and whether the Department of Finance Canada has appropriate processes in place to provide timely analysis and, where required, legislative drafting regarding ATP issues identified by the Canada Revenue Agency.
• The Department of Finance Canada did not receive any recommendations.

2014 Spring Report of the Auditor General of Canada, Chapter 1: Public Sector Pension Plans.

• The audit focused on the three main public sector pension plans (the public service, the Canadian Forces and the Royal Canadian Mounted Police [RCMP] pension plans).
• The audit examined whether the Treasury Board of Canada Secretariat, the RCMP, National Defence and the Department of Finance Canada, in keeping with their respective responsibilities, considered the relevant information, analyses and scenarios that could affect the plans' costs and thereby impact their sustainability. It also examined whether these entities carried out selected key aspects of their governance and management responsibilities with regard to the pension plans.
• Only one recommendation was directed to the Department of Finance Canada. The Office of the Auditor General of Canada recommended that the Department of Finance Canada, in consultation with the Treasury Board of Canada Secretariat, conclude its assessment on the costs and benefits of funding the pre-2000 pension obligations and present its recommendations to the plan sponsor for consideration.
• The Department agreed. The Department, in collaboration with the Treasury Board of Canada Secretariat, will conclude the assessment in the 2014–15 fiscal year and will take this assessment, along with other relevant information, into consideration when evaluating the funding of the pre-2000 pension obligations.

2014 Fall Report of the Auditor General of Canada, Chapter 5: Support to the Automotive Sector.

• The audit examined whether Industry Canada, the Department of Finance Canada, and Export Development Canada, in fulfilling their respective roles and responsibilities, managed the financial support to the automotive sector in a way that contributed to the viability of the companies and the competitiveness of the sector in Canada.
• The Department of Finance Canada did not receive any recommendations.

Response to external audits conducted by the Public Service Commission of Canada or the Office of the Commissioner of Official Languages: Not applicable.