Section 5 – Government overview

Role of Central Agencies

To exercise their authority, the Prime Minister and the Cabinet are supported both by departments and by three central agencies: the Privy Council Office, the Treasury Board Secretariat, and the Department of Finance. Together, these central agencies contribute to the successful formulation and implementation of government policies and programs. They oversee interdepartmental information sharing, consultation and co ordination. They also provide integrated advice and support to the Prime Minister and the Cabinet on government-wide issues and concerns.

Privy Council Office

The Privy Council Office (PCO) reports directly to the Prime Minister (PM) and is sometimes called the PM's department. Unlike the PM's Office, the PCO is staffed by public servants who offer non partisan service and advice. The PCO is headed by the Clerk of the Privy Council, who is also Secretary to the Cabinet and head of the Public Service.

The PCO does not have formal authority over departments, but its role in assisting the PM and Cabinet give it substantial influence. Departments must consider the advice of the PCO very carefully because the advice generally reflects the wishes of the PM or Cabinet.

The PCO has three main roles:.

1. Provide non partisan advice to the PM

The PCO assists the PM in strategic policy planning, ensures coordination of the government's policy objectives, and manages major issues. For example, the PCO assists the PM in writing the Speech from the Throne and works closely with Finance when it prepares the budget. The PCO provides policy advice in specific areas, including foreign affairs, defence, national security, and intergovernmental affairs, and any other policy issues of particular concern to the PM. The PCO advises the PM on machinery-of-government issues, governor-in-council appointments and constitutional matters.

2. Support to Cabinet

The PCO acts as the secretariat for Cabinet as a whole and the committees of Cabinet (except Treasury Board, which is supported by the Treasury Board Secretariat). The PCO arranges meetings, proposes and circulates agendas, distributes documents, provides advice to committee chairpersons, records Cabinet minutes and decisions, and transmits subsequent Cabinet decisions to departments.

The PCO works with departments on their proposals to Cabinet, called Memorandums to Cabinet, or MCs, challenging departmental submissions to Cabinet to ensure that they meet the information needs of Cabinet and they are consistent with the government's overall policy direction. The PCO makes sure that departments coordinate their efforts with respect to policy proposals or issues that cut across departments, ensuring that all interested ministers and their officials are given an opportunity to express their views.

3. Link between the PM and the Public Service

As head of the public service, the Clerk of the Privy Council is responsible to the PM for the overall performance and effective management of the public service. The Clerk advances the government's public service management agenda, provides advice on the appointment of senior public service personnel, serves as the spokesperson for the public service, and prepares an annual report on the state of the public service.

Treasury Board Secretariat

The Treasury Board Secretariat (TBS) assists the Treasury Board, a Cabinet committee established by law, in fulfilling its responsibilities. The TBS is headed by the Secretary of the Treasury Board, who is a deputy minister. The TBS also includes the Office of the Comptroller General of Canada, which is responsible for providing government-wide direction and assistance on financial management and internal audit.

The Treasury Board is composed of ministers responsible for the management of government expenditure and human resources in the public service. It is comprised of the president of the Treasury Board and four other ministers appointed by the Prime Minister. It is the only permanent sub-committee of Cabinet. The Minister of National Revenue is often a member of the Treasury Board.

While the Department of Finance is responsible for establishing general policy on government revenues and expenditures, the Treasury Board oversees the management of the budget and credits. It also plays a co ordinating role in the preparation of the expenditure budget.

According to the Financial Administration Act, the Treasury Board can deal with any questions concerning financial management, giving it authority over departmental budgets, expenditures, financial commitments, revenue, accounts, personnel management, and all the principles governing the administration of the public service. In sum, the Treasury Board is the employer, expenditure authority and general manager of most of the public service.

CRA's enabling legislation, the Canada Revenue Agency Act, provides that, except for any part of the regulation or requirement relating to financial management, the Agency is not subject to any regulation or requirement established by the Treasury Board under the Financial Administration Act that relates to certain matters. However, CRA policies are typically aligned with Treasury Board policies.

The Agency has authority over all matters relating to:

  • general administrative policy in the Agency;
  • the organization of the Agency;
  • Agency real property and Agency immovables;
  • human resources management, including the determination of the terms and conditions of employment of persons employed by the Agency; and
  • internal audit in the Agency.

The CRA has a separate employer status that gives it its own appointment authority. Persons employed in the CRA must be treated as if they were employees within the meaning of the Public Service Employment Act (PSEA). They are therefore eligible for internal appointment processes that are open to "employees of the public service".

Department of Finance

The Minister of Finance is responsible for the government's macroeconomic policy, including tax policy and tax expenditures. The Department of Finance (Finance) assists the Minister in developing the government's financial framework in which overall spending takes place. As the federal government's leading source of socio economic analysis and advice, it advises the Minister on tax policy, financial sector policy, as well as international trade and finance, and federal-provincial fiscal arrangements. It also conducts studies in such areas as labour economics, industry-specific issues, monetary policy, financial institutions, income security, and productivity. Finance is provided authorities under numerous Acts, such as the Income Tax Act, and the Excise Tax Act.

Finance's most prominent role is assisting the Minister in developing the annual budget. The budget is a statement of the government's fiscal plan in light of its current and expected financial situation. It outlines the government's projected revenues, incorporating any changes in taxation and spending, and announcing new spending plans. Through the Budget exercise, the Minister of Finance establishes a fiscal framework within which the government's expenditure management system can operate effectively.

Finance is also active in a number of other areas. They assist the Minister of Finance in:

  • Developing tax and tariff policy and legislation
  • Managing federal borrowing on financial markets
  • Administering major transfers of federal funds to the provinces and territories
  • Developing regulatory policy for the country's financial sector
  • Representing Canada within international financial institutions and groups, such as the International Monetary Fund, the World Bank, and the World Trade Organization.

Finance is a central actor in virtually all policy decisions, because the allocation of funds from the fiscal framework is almost always required to proceed with a policy initiative. Through close collaboration and consultation, Finance and TBS ensure the cohesion and effectiveness of the decision-making process. These two agencies, through the PCO, provide the PM and Cabinet committees with advice on policy, related funding issues and the economic impact of proposals before Cabinet.

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