Complete text - 2016–17 Departmental Performance Report - Treasury Board of Canada Secretariat

Description

Through the Decision-Making Support and Oversight program, the Treasury Board of Canada Secretariat supports the Treasury Board in its roles as management board of the Government of Canada and as expenditure manager in the government-wide expenditure cycle. The objective is to support the government in promoting value for money and results for Canadians in programs and operations.

The Secretariat achieves program results by providing independent strategic advice, analysis, guidance and oversight of programs, operations, and expenditures. It reviews departmental submissions, provides recommendations to the Treasury Board, and coordinates and reports on the allocation of expenditures across government organizations and programs.

Results

In 2016–17, the Secretariat reviewed approximately:

• 330 Treasury Board submissions
• 500 memoranda to Cabinet and other Cabinet presentations
• 520 Governor in Council submissions

The Secretariat improved the quality of costing estimates in government decision-making by reviewing nearly 100 high-value or high-risk Cabinet documents that covered projects valued at a total of about $47 billion.

The Secretariat performed enhanced due diligence reviews on 86 Treasury Board submissions and 11 memoranda to Cabinet. These reviews resulted in more transparent cost estimates, the rationalization of contingencies and, in some instances, changes in the amounts submitted.

The Secretariat improved the quality of Governor in Council regulatory submissions by:

• reviewing 173 final regulatory submissions that included regulations that would result in $16.6 billion in benefits to Canadians
• ensuring that these submissions complied with the requirements of the Cabinet Directive on Regulatory Management (for example, included input from stakeholder consultations, included a cost-benefit analysis, and were coordinated and aligned with existing regulations)

The Secretariat provided an effective challenge function and even exceeded its target for this indicator, with 91% of deputy heads agreeing that the Secretariat fulfills this role effectively (up from 88% in 2015–16). According to feedback from deputy heads, Secretariat analysts are supportive and accessible, and provide useful advice. Deputy heads suggested, however, that the challenge function could be streamlined.

In 2016–17, the Government of Canada released the Policy on Results, which replaced the Policy on Management, Resources and Results Structures and the Policy on Evaluation. The new policy promotes simpler and more flexible planning and reporting structures; better alignment of resources, priorities, and results; and clearer, more transparent reporting. It also introduces a requirement to provide more information on the expected results of spending proposals. This requirement is aimed at improving the quality of Treasury Board submissions.

The Secretariat provided guidance to the 6 departments that were the first to use the reporting framework set out in the new Policy on Results. The Secretariat also helped organizations build their capacity for evidence-based decision making by, for example, helping them identify effective performance measures.

Steps have been made to improve spending oversight and reporting to Parliament. In 2016–17, 95% of Budget 2016 funding was included in Estimates documents, with 66% of funding included in the first available Estimates document. Parliamentarians will continue to be consulted on options to make the planning, spending and tracking of tax dollars more timely and transparent.

The Secretariat updated the TBS InfoBase to reflect the new departmental planning and reporting structures required under the Policy on Results. Canadians and Parliamentarians can now view graphics that show how resources relate to results. In 2016–17, TBS InfoBase was visited over 35,000 times.

In December 2016, after consulting with experts and practitioners in experimental design both within and outside the federal government, the Secretariat and the Privy Council Office released the Experimentation Direction for Deputy Heads. The direction provides context and guidance for all deputy heads to begin reporting publicly on their current or planned efforts to experiment with new approaches. It also includes a requirement to earmark a percentage of program funds for experimentation.

Since it released the direction, the Secretariat has created tools for experimenting with new approaches, provided guidance to departments and partnered with them on workshops and community-building to strengthen experimentation capacity in the federal government.

The Secretariat also expanded, as a 5-year pilot project, the transfer payment toolkit to enable innovative program delivery, giving government departments new instruments for distributing grants and contributions.

Information on the Secretariat's lower-level programs is available in the TBS InfoBase.

Description

Through the Management Policies Development and Monitoring Program, the Secretariat supports the Treasury Board in its role of establishing principles for sound governance and management by setting government-wide policy direction in targeted areas. The objective is to have a sound management policy framework for the Government of Canada.

The Secretariat achieves program results by communicating clear management expectations to deputy heads and by adopting principles-based and risk-informed approaches to monitoring policy compliance. The Secretariat provides reviews, leads implementation, and supports and monitors policies and departmental performance under several of areas of management. The Secretariat also engages with functional communities and undertakes outreach and monitoring to promote policy compliance and build the capacity of functional communities.

This program is underpinned by legislation such as the Financial Administration Act and the Public Service Employment Act.

Results

The Secretariat supports departments and agencies on implementing more than 200 policy instruments.

In 2016–17, the Secretariat continued to review these policy instruments through the Policy Suite Reset initiative, which aims at developing clearer, more coherent requirements and accountabilities. More time is needed to complete this initiative, but it is having the intended impact. 82% of deputy heads say that policy instruments reviewed so far under the initiative are easier to understand and apply. Deputy heads also say, however, that they would like to receive guidance and communications before they have to implement reset policy instruments.

As part of making government more open and transparent, the Secretariat supported the Treasury Board in implementing the new Policy on Communications and Federal Identity. The policy aims to bring Government of Canada communication practices into line with the digital environment. The Secretariat also implemented a new interim process under which Advertising Standards Canada must review all federal government advertising campaigns that have budgets over $500,000.

The Secretariat also released the Interim Directive on the Administration of the Access to Information Act. This directive eliminated all access to information fees except for the initial $5 application fee. It also confirmed that all Government of Canada information should be available to the public, except in specific situations when it must be protected because of privacy, confidentiality and security.

To improve oversight of public resources and to modernize comptrollership, the Secretariat supported the Treasury Board in implementing:

• the new Policy on Financial Management
  • This policy, through which the Government of Canada seeks to have financial resources that are well managed in the delivery of programs to Canadians and that are safeguarded through balanced controls that enable flexibility and manage risk, consolidates requirements set out in a number of different policy instruments.
• the updated Policy on Internal Audit
  • The objective of this policy is to ensure that the oversight of public resources in the federal public administration is informed by a professional and objective internal audit function that is independent of departmental management.

In 2016–17, the Secretariat and Public Services and Procurement Canada developed a joint procurement modernization work plan. Under the work plan, the 2 organizations aligned their procurement-related activities and created a dashboard to track and report on progress on initiatives. The Secretariat and Public Services and Procurement Canada's Procurement Modernization Integration team began developing a government-wide framework for social procurement. Social procurement involves using federal procurement processes and purchasing power to generate positive social outcomes in addition to delivering goods and services.

As part of improving services for Canadians, the Secretariat launched the Government of Canada Service Strategy in collaboration with several service-oriented departments and agencies. The Strategy has 3 broad goals:

• Client-driven design and delivery, to make sure that services are designed and delivered in ways that meet client needs and preferences across all channels
• Easy online services, to make the digital channel the medium of choice
• Seamless delivery, to connect services through a single window

To support government organizations in their efforts to provide quality, consistent services to Canadians, the Secretariat published a Guideline on Service Management. The guideline supports the requirements of the Policy on Service by outlining key components of good service management.

The Secretariat continued to lead efforts to build the public service workforce of the future, by promoting a healthy, respectful and supportive work environment. These efforts included:

• introducing an online pledge on GCintranet to support mental health in the workplace
• encouraging all federal public service employees to take the online pledge
• posting the list of the deputy ministers who signed the pledge
• creating a Centre of Expertise on Mental Health in the Workplace

The Secretariat also launched the Proudly Serving Canadians web page to celebrate the strength and diversity of Canada's public service. The page promotes public service culture, innovation and employment and is a key recruitment and retention tool for the Government of Canada. In 2016–17, the website received over 26,000 visits.

The Secretariat also committed to working with Employment and Social Development Canada to introduce, by late 2018, legislative reforms for proactive (in other words, employer-initiated) pay equity in the federal public service and in the federally regulated private sector.

In 2016–17, the Secretariat formed the Joint Union/Management Task Force on Diversity and Inclusion in the Public Service. The task force brings together representatives from across the public service and from the public sector bargaining agents. Their aim is to find ways to strengthen diversity and inclusion in the federal government. They are focusing on 4 key areas:

• accountability
• people management
• education and awareness
• diversity lens, an integrated approach

Through a partnership with the Assembly of First Nations, 30 Indigenous post-secondary students were brought to the National Capital Region from across the country in 2016 to work in a variety of departments and agencies under the Indigenous Youth Summer Employment Opportunity pilot. The Secretariat:

• developed the initiative
• provided support to departments and students
• organized learning events and activities
• matched students with mentors
• evaluated the performance of the initiative

The pilot has since expanded to a program that supported 100 students in 27 departments in 2017.

In addition, the Government of Canada announced consultations to review its Official Languages Regulations to better reflect the realities of minority language communities and allow the government to serve Canadians better in the language of their choice.

Information on the Secretariat's lower-level programs is available in the TBS InfoBase.

Description

Through the Government-Wide Program Design and Delivery program, the Secretariat designs and delivers activities, systems, services and operations with, for, or on behalf of other organizations in the Government of Canada. It also establishes a platform for transformational initiatives. The objective is to provide consistent and cost-controlled operations across the Government of Canada.

The Secretariat achieves program results by developing and delivering solutions where whole-of-government leadership is required, or where transformation and standardization can be achieved to improve quality and value for money.

Results

The Secretariat continued to lead the Government-Wide Enabling Functions Transformation Initiative.^{Results Footnote 1} This initiative involves modernizing human resources management and information management and focuses on standardizing and consolidating IT platforms and increasing system functionality. As a result of this initiative, 41 departments have modernized their human resources systems, and 23 departments have modernized their IT systems.

According to deputy heads, the Secretariat needs to:

• strengthen the governance of enterprise-wide systems and operations to better meet clients' needs
• align and coordinate initiatives

The Secretariat will take steps to improve the governance of enterprise-wide systems and operations. It will also build on consultations it has had with user communities to improve how initiatives are designed and implemented.

In 2016–17, the Secretariat led advancements in the area of open government. It released its first set of inventories that were completed under the Directive on Open Government and published on Open.Canada.ca. Canadians can now see both unreleased and released datasets. Over 1,500 new datasets have been identified as eligible for release. In addition to being able to search the inventories on Open.Canada.ca, Canadians can now vote for datasets they would like to access. The Secretariat improved Open.Canada.ca's search features by adding an integrated search that has more filters and more metadata. Canadians now have better access to data and information that is proactively disclosed by departments and agencies. As a result of the Government of Canada's efforts, Canada was ranked second globally in the Web Foundation's Open Data Barometer and was elected to the Open Government Partnership Steering Committee.

The Secretariat established the Centre for Greening Government. The Centre leads the Government of Canada's emissions reduction program and other initiatives to green government. It drives results to make sure the government meets its objectives by:

• tracking and reporting the federal government's emissions centrally
• coordinating efforts across government

In 2016–17, the Centre organized 2 round tables with environmental leaders and published the Government of Canada's Greenhouse Gas Inventory on open data for the first time.

The Secretariat also supported the workforce of the future by negotiating in good faith to reach collective agreements that are fair and reasonable for employees and for Canadians. As of March 31, 2017, 16 tentative settlements were reached in this round of bargaining, covering 85% of the represented employees in the core public administration.

The Secretariat continued the initiative it launched in 2013 to renew the government's classification system to better reflect the current working environment and business requirements. The goal was to update 12 job evaluation standards and 6 qualification standards over the course of the 6-year project.

As of the end of 2016–17, those target were surpassed. The Secretariat has:

• updated 14 job evaluation standards
• reviewed and amended 3 qualification standards
• developed 6 new qualification standards

The Secretariat also modernized the classification and organizational design training curriculum. It updated 3 classroom courses, expanded 1 online learning module and introduced 1 online learning module for managers and human resources advisors in the core public administration.

The Secretariat launched an oversight framework in 2016–17 to monitor the health of the classification program and to ensure the effective management of compensation costs.

The Secretariat also worked on legislation to establish a new labour relations regime for the Royal Canadian Mounted Police.

Throughout 2016–17, the public service continued to be affected by challenges resulting from the implementation of the new Phoenix pay system. In February 2017, the Secretariat created the Human Resources Management Transformation Sector to help address, in collaboration with Public Services and Procurement Canada (PSPC) and other departments and agencies, the difficulties associated with human resources and pay transactions. The Secretariat further supported PSPC by establishing an executive-level union-management consultation committee structure to address pay issues collaboratively. It also established a new claims process. Under this process, a dedicated claims office at the Secretariat is working with departments and agencies to process employees' claims for out-of-pocket expenses resulting from Phoenix pay system issues.

Information on the Secretariat's lower-level programs is available in the TBS InfoBase.

Description

The Government-Wide Funds and Public Service Employer Payments program accounts for funds that are held centrally to supplement other appropriations, from which allocations are made to, or payments and receipts are made on behalf of, other federal organizations. These funds supplement the standard appropriations process and meet certain responsibilities of the Treasury Board as the employer of the core public administration, including employer obligations under the public service pension and benefits plans.

The administration of these funds falls under the Expenditure Analysis and Allocation Management sub-program and the People Management Policy sub-program, but their financial resources are shown separately in the Secretariat's Program Alignment Architecture for visibility and reporting purposes.

Results

In 2016–17, planned spending included about $3.6 billion for government-wide funds. Information on how these funds are allocated over the course of the fiscal year is reported in the annex tables of the Supplementary Estimates and in Section 11, Volume III, of the 2016–17 Public Accounts.

In 2016–17, the Secretariat planned to spend $2.8 billion to meet the Treasury Board's responsibilities as employer. Details on actual spending in this area are provided in the Analysis of trends in spending and human resources section of this report.

The variance between planned and actual spending in this program is mainly attributable to the way that government-wide funds are transferred between the Secretariat and other government organizations. Every year, the Secretariat includes funding in its reference level to be transferred to other government organizations once specific criteria as approved by Treasury Board are met. If these funds are needed, they are transferred to the appropriate department. If they are not needed, the unused balance is returned to the fiscal framework at the end of the fiscal year and is reported as a Secretariat lapse. No actual spending is incurred by the Secretariat under government-wide funds.

Information on the breakdown of spending on government-wide funds and public service employer payments is available on the Secretariat's website.

Description

Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories 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; and Acquisition Services.

Results

In 2016–17, the Secretariat undertook a number of initiatives relating to Internal Services to support the implementation of the Government of Canada's agenda.

The Secretariat continued to implement a results and delivery approach to ensure consistent reporting on the achievement of the President of the Treasury Board's priorities. The Secretariat's Chief Results and Delivery Officer led the implementation efforts, supported by the Results and Delivery Unit. The Secretariat also led by example by being one of the departments to use the new Departmental Results Framework. Also in line with this approach, the Secretariat developed a data strategy to better manage information, to improve internal processes, to support evidence-based policy decision making, and to report internally and externally on performance.

To support an agile workplace and a high-performing workforce, the Secretariat invested in 2 learning and development strategies for its employees:

• the Analyst Learning and Development Strategy Learning Calendar for analysts
• the Administrative Professionals Learning and Development Strategy for administrative and clerical employees

The Secretariat also implemented the New Direction in Staffing.

The Secretariat's EX community continued to strive to keep its "Every Day" commitment to employees in order to support a respectful, fulfilling and productive work environment.

The Secretariat also drafted a Departmental Wellness Action Plan to define what wellness means at the Secretariat and to raise awareness about mental health. The plan includes actions that grew out of a gap analysis, as well as indicators of progress on the action plan. Mechanisms for measuring progress include employee surveys.

The Secretariat continued to empower employees to work more collaboratively by strengthening and promoting digital tools and the Secretariat's open office environment at its primary location. Employees have access to the latest videoconferencing and collaboration technologies, Wi-Fi, a dedicated meeting and training area, and open collaboration areas. The meeting and training facilities opened in October 2015, and usage of them increased from 44.7% in 2015–16 to 46.3% in 2016–17.

Work is continuing on the design and renovation of the Secretariat's second location, 219 Laurier. The goal is to make all Secretariat workplaces open, agile and collaborative.

Actual spending was higher than planned, mainly due to increased charges relating to Shared Services Canada and the rollout of several new IT projects for the Secretariat's analysts. These increased charges were offset by the "reprofiling," or shifting, of $3.3 million from 2016–17 to 2017–18 for phase II of the Workspace Renewal project due to construction delays in fitting up 219 Laurier for the Secretariat's use.

Actual FTEs aligned with planned FTEs.

Budgetary performance summary for Programs and Internal Services (dollars)

The Secretariat’s operating expenditures include salaries, non-salary costs to deliver programs and statutory items related to the employer’s contributions to the Secretariat’s employee benefit plans.

The decrease of $48 million between 2014–15 and 2015–16 actual spending resulted mostly from reduced expenditures in 2015–16 related to the settlement in the White class action lawsuit and a decrease in spending related to the Workspace Renewal Initiative (phase I). Those decreases were partially offset by expenditures incurred to support the Secretariat-led government-wide Enabling Functions Transformation.

The increase of $42.5 million between 2015–16 and 2016–17 is mostly attributed to implementing the Secretariat’s Government of Canada’s Budget 2016 initiatives to make progress on government-wide Enabling Functions Transformation, the plan to enhance access to information, and to develop a client-first service strategy and expand open data across the Government of Canada.

A decrease of $67.7 million between 2016–17 and 2017–18 is mostly attributed to one-time funding received to accelerate the Enabling Functions Transformation, as announced in Budget 2016.

Program expenditures are anticipated to further decrease by $14.9 million from 2017–18 to 2019–20, as phase II of the Workspace Renewal Initiative is expected to be completed with more than 800 Secretariat employees expected to move into their new workspace at 219 Laurier by winter 2018.

Figure 4 - Text version

This bar graph illustrates the Secretariat’s actual spending for the public service employer payments (Vote 20) and various statutory items for fiscal years 2014-15, 2015-16 and 2016-17 and planned spending for fiscal years 2017-18, 2018-19 and 2019-20. Financial figures are presented in dollars along the y axis, increasing by $500 million and ending at $4.5 billion. These are graphed against fiscal years 2014-15 to 2019-20 on the x axis.

For each fiscal year, amounts for the Secretariat’s public service employer payments (Vote 20), statutory items (largely comprised of payments under the Public Service Pension Adjustment Act), and anticipated sunset programs are identified.

No amount is reported in 2014-15 to 2019-20 as sunset programs - anticipated.

In 2014-15, actual spending was $444,049,205 for statutory items and $2,454,311,704 for public service employer payments for a total of $2,898,360,909.

In 2015-16, actual spending was $1,162,005,794 for statutory items and $2,690,624,377 for public service employer payments for a total of $3,852,630,171.

In 2016-17, actual spending was $339,704,346 for statutory items and $2,406,697,551 for public service employer payments for a total of $2,746,401,897.

Planned spending for statutory items will remain the same for fiscal years 2017-18 to 2019-20 in the amount of $340,000,000.

Planned spending for public service employer payments goes from $2,398,570,604 in 2017-18, to $2,396,661,397 in 2018-19, and will remain the same for fiscal years 2019-20.

Total planned spending for public service employer payments goes from $2,738,570,604 in 2017-18, to $2,736,661,397 in 2018-19, and will remain the same for fiscal years 2019-20.

Expenditures for public service employer payments and statutory items represent the employer’s share of contributions required by the insurance plans sponsored by the Government of Canada. These amounts also include statutory items for payments under the Public Service Pension Adjustment Act and employer contributions made under the Public Service Superannuation Act, the Employment Insurance Act and related acts.

The increase of $954 million from 2014–15 to 2015–16 is attributed to statutory items of $718 million, which is largely due to an actuarial adjustment made in relation to the Public Service Superannuation Act, and an increase of $236 million related to public service employer payments to incrementally restore the financial health of the Service Income Security Insurance Plan.

The decrease of $1,106 million from 2015–16 to 2016–17 is largely attributed to the one-time payments made last fiscal year for the actuarial adjustment and the Service Income Security Insurance Plan noted above. These were offset by an increase mainly due to a one-time payment to the Royal Canadian Mounted Police Disability Insurance Plan to eliminate the current deficit and to restore the plan to sound financial health.

Planned spending for fiscal years 2017–18 to 2019–20 is expected to remain mostly unchanged.

In 2017–18, the Secretariat has transitioned from its Strategic Outcome and Program Alignment Architecture, which was required under the previous Policy on Management Resources and Results Structures, to a Departmental Results Framework, which is required under the new Policy on Results. The planned spending for 2017–18 and 2018–19 were prepared as per the Departmental Results Framework and restated to the Program Alignment Architecture for illustration purposes only.

The budgetary performance summary table above provides the following:

• Main Estimates for 2016–17
• Planned spending for 2016–17, as reported in the Secretariat’s 2016–17 Report on Plans and Priorities
• Planned spending for 2017–18 and 2018–19, as reported in the Secretariat’s 2017–18 Departmental Plan (restated as noted above)
• Total Authorities Available for use in 2016–17 which reflects the authorities received to date, including in-year contributions from other government departments (OGDs) for the Enabling Functions Transformation
• Actual spending for 2016–17, 2015–16 and 2014–15 as reported in the Public Accounts

For additional details on planned spending, see the section “Supporting information on lower-level programs” in Supplementary Information.

The Government-Wide Funds and Public Service Employer Payments program is the largest portion of the Secretariat’s planned spending. On average, the Treasury Board approves transfers of approximately 56% of this program’s funding to other federal organizations for items such as government contingencies, government-wide initiatives, compensation requirements, operating and capital budget carry forward, and paylist expenditures (Central Votes 5, 10, 15, 25, 30 and 33). The Secretariat’s total funding available for use is reduced accordingly. The remaining 44% of this program pertains to statutory payments, used to pay the employer’s share of contributions to employee pension plan, and to public service employer payments, used to pay the employer’s share of contributions to employee insurance and benefits plans.

Overall, planned spending is expected to decrease by $45 million by 2018–19, mainly due to the actuarial adjustment referenced above and offset by additional ongoing funding related to the premium rate increase for the Service Income Security Insurance Plan. The decrease is also due to the sunsetting of the Workspace Renewal Initiative (phase II), and the one-time funding received to accelerate the Enabling Functions Transformation, as announced in Budget 2016.

Actual spending decreased by $1,064 million in 2016–17, primarily because of the one-time payments no longer required for the actuarial adjustment and the Service Income Security Insurance Plan. These decreases were offset by an increase in the Secretariat’s operating expenditures used for:

• Budget 2016 initiatives to accelerate the Enabling Functions Transformation, to enhance access to information, to develop a client-first service strategy, and to expand open data
• establishing a Centre for Greening Government at the Secretariat
• the additional claims related to the White class action lawsuit
• the third-party Shared Services Canada resource alignment review
• the transfer of the Regulatory Cooperation Council Secretariat from the Privy Council Office to the Secretariat

As reported in the Secretariat’s 2015–16 Departmental Performance Report, actual spending increased by $906 million from 2014–15 to 2015–16. Most of that increase, $718 million can be attributed to statutory items, largely due to the actuarial adjustment made in relation to the Public Service Superannuation Act discussed above. The rest of the increase, $236 million, related to public service employer payments to incrementally restore the financial health of the Service Income Security Insurance Plan. This plan is providing benefits to an increased number of medically released Canadian Armed Forces members who served in the Afghanistan mission. These increases were offset by a $48-million decrease in the Secretariat’s operating expenditures, mostly related to the sunset of funding received in 2014–15 for the payout of an out-of-court settlement under the White class action lawsuit launched against the Crown in 2014.

a) Government-Wide Funds and Public Service Employer Payments

The Government-Wide Funds and Public Service Employer Payments program accounts for funds that are held centrally to supplement other appropriations, from which allocations are made to, or payments and receipts are made on behalf of, other federal organizations. These funds supplement the standard appropriations process and meet certain responsibilities of the Treasury Board as the employer of the core public administration, including employer obligations under the public service pension and benefits plans.

The administration of these funds falls under the Expenditure Analysis and Allocation Management sub-program and the People Management Policy sub-program, but their financial resources are shown separately in the Secretariat’s Program Alignment Architecture for visibility and reporting purposes.

b) Decision-Making Support and Oversight

Through the Decision-Making Support and Oversight program, the Treasury Board of Canada Secretariat supports the Treasury Board in its roles as management board of the Government of Canada and as expenditure manager in the government-wide expenditure cycle. The objective is to support the government in promoting value for money and results for Canadians in programs and operations.

The Secretariat achieves program results by providing independent strategic advice, analysis, guidance and oversight of programs, operations, and expenditures. It reviews departmental submissions, provides recommendations to the Treasury Board, and coordinates and reports on the allocation of expenditures across government organizations and programs.

c) Management Policies Development and Monitoring

Through the Management Policies Development and Monitoring program, the Secretariat supports the Treasury Board in its role of establishing principles for sound governance and management by setting government-wide policy direction in targeted areas. The objective is to have a sound management policy framework for the Government of Canada.

The Secretariat achieves program results by communicating clear management expectations to deputy heads and by adopting principles-based and risk-informed approaches to monitoring policy compliance. The Secretariat provides reviews, leads implementation, and supports and monitors policies and departmental performance under several of areas of management. The Secretariat also engages with functional communities and undertakes outreach and monitoring to promote policy compliance and build the capacity of functional communities.

This program is underpinned by legislation such as the Financial Administration Act and the Public Service Employment Act.

d) Government-Wide Program Design and Delivery

Through the Government-Wide Program Design and Delivery program, the Secretariat designs and delivers activities, systems, services and operations with, for, or on behalf of other organizations in the Government of Canada. It also establishes a platform for transformational initiatives. The objective is to provide consistent and cost-controlled operations across the Government of Canada.

The Secretariat achieves program results by developing and delivering solutions where whole-of-government leadership is required, or where transformation and standardization can be achieved to improve quality and value for money.

e) Internal services

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. Internal services include only those activities and resources that apply across an organization, and not those provided for a specific program. The groups of activities 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; and Acquisition Services.

a) Parliamentary authorities

The Secretariat is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Secretariat do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament.

Note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the “Expenses” and “Revenues” sections of the Statement of Operations and Departmental Net Financial Position are the amounts reported in the Future-Oriented Statement of Operations included in the 2016–17 Report on Plans and Priorities. Planned results are not presented in the “Government funding and transfers” section of the Statement of Operations and Departmental Net Financial Position and in the Statement of Change in Departmental Net Debt because these amounts were not included in the 2016–17 Report on Plans and Priorities.

b) Net cash provided by government

The Secretariat operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Secretariat is deposited to the CRF, and all cash disbursements made by the Secretariat are paid from the CRF. The net cash provided by government is the difference between all cash receipts and all cash disbursements, including transactions between government departments.

c) Amounts due from or to the Consolidated Revenue Fund (CRF)

Amounts due from or to the Consolidated Revenue Fund (CRF) are the result of timing differences at year-end between the time when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Secretariat is entitled to draw from the CRF without further authorities to discharge its liabilities.

d) Revenues

Revenues are accounted for in the period in which the related transaction or event that gave rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge the Secretariat’s liabilities. While the Secretary is expected to maintain accounting control, she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and, therefore, are presented as a reduction of the entity’s gross revenues.

e) Expenses

Expenses are recorded on an accrual basis:

• Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. Transfer payments that become repayable as a result of the realization of conditions specified in the contribution agreement are recorded as a reduction to transfer payment expenses and are set up as a receivable.
• Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
• Services provided without charge by other government departments for accommodation and legal services are recorded as operating expenses at their estimated cost.

f) Government-wide employee benefits

g) Accounts receivable and advances

Accounts receivable and advances are stated at the lower of cost or net recoverable value. A valuation allowance has been recorded for receivables where recovery is considered uncertain.

Accounts receivable held on behalf of government are presented in these financial statements as the Secretary must maintain accounting control for these items; however, they are later presented as a reduction to the Secretariat’s gross financial assets because the receipt of these receivables cannot be used by the Secretariat to discharge existing liabilities.

h) Contingent liabilities

Contingent liabilities are potential liabilities that may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur and a reasonable estimate of the loss can be made, an estimated liability is accrued, and an expense is recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

i) Tangible capital assets

All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The Secretariat does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use, and are not amortized until they become available for use.

j) Measurement uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of the assets, liabilities, revenues and expenses in the financial statements. At the time of the preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for claims incurred but not yet reported under the public service health and dental care plans, the liability for employee future benefits, and the useful life of tangible capital assets. The actual results could significantly differ from the estimated results. Management’s estimates are reviewed periodically; as adjustments become necessary, they are recorded in the financial statements in the year they become known.

a) Pension benefits

The Secretariat’s employees participate in the Public Service Pension Plan (the Plan), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years, at a rate of 2% per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits, and they are indexed to inflation.

Both the employees and the Secretariat contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Economic Action Plan 2012, employee contributors have been divided into two groups:

1. Group 1 relates to existing Plan members as of December 31, 2012
2. Group 2 relates to members joining the Plan as of January 1, 2013

Each group has a distinct contribution rate. The employer expense in 2017 amounts to $18.8 million ($18.1 million in 2016). For Group 1 members, the expense represents approximately 1.12 times (1.25 times in 2016) the employee contributions; for Group 2 members, it represents approximately 1.08 times (1.24 times in 2016) the employee contributions. Employee contribution rates for both groups are gradually being increased to allow the employee-employer cost-sharing ratio to reach 50:50 by fiscal year 2018.

b) Severance benefits

Severance benefits provided to the Secretariat’s employees were previously based on an employee’s eligibility, years of service and salary at termination of employment. However, since 2011, the accumulation of severance benefits for voluntary departures progressively ceased for substantially all employees. Employees subject to these changes were given the option to be paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits upon departure from the public service. By March 31, 2017, all settlements for immediate cash out were completed. Severance benefits are unfunded and, consequently, the outstanding obligation will be paid from future authorities.

The changes in the obligations during the year were as follows:

Claims and litigations

Claims have been made against the Secretariat in the normal course of operations. These claims include items with pleading amounts and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Claims for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $15 million as at March 31, 2017 ($73 million in 2016). No accrual for these contingent liabilities has been made in these financial statements.

Common services provided without charge by other government departments

The Secretariat received accommodation and legal services from certain common service organizations. These services were provided without charge and have been recorded in the department’s Statement of Operations and Departmental Net Financial Position as follows:

In order to achieve efficiency and cost‑effectiveness and to deliver programs economically to the public, the government has centralized some of its administrative activities. As a result, the government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The cost of these services, such as the payroll and cheque issuance services provided by Public Services and Procurement Canada and the email, network and data centre services and the workplace technology devices provided by Shared Services Canada, are not included in the Secretariat’s Statement of Operations and Departmental Net Financial Position.

b) Common services provided without charge to other government departments

The Secretariat provided services without charge to other government departments for the provision of the employer’s contribution to health, dental and other employee insurance plans and payroll benefits in the amount of $1.8 billion in 2017 (compared with $1.6 billion in 2016).

c) Other transactions with related parties

Expenses and revenues disclosed in (c) exclude common services provided without charge, which have already been disclosed in (a) and (b). The expenses are related to various goods and services and to salary transactions with other departments and agencies. The revenues are mainly related to internal support services and recovery of public service pension administration costs.

a) Main programs

Presentation by segment is based on the Secretariat’s program alignment architecture. This presentation is based on the same accounting policies described in the summary of significant accounting policies in Note 2. The following table presents the expenses incurred and revenues generated for the main programs, by major category of expenses and revenues:

b) Government-wide funds and public service employer payments

The Government of Canada sponsors defined benefit pension plans covering most of its employees. The Secretariat also funds payments to, or in respect of, the following:

• employer’s share of contributions to the Public Service Death Benefit Account
• employer’s share of Canada/Québec Pension Plan contributions and Employment Insurance premiums
• employer’s share of disability and life insurance premiums and related Québec sales tax
• employer’s share of the Québec Parental Insurance Plan premium
• claims and related costs under the Public Service Health Care Plan, Public Service Dental Care Plan and the Pensioners’ Dental Services Plan
• provincial payroll taxes in respect of employees who work in the provinces of Quebec, Ontario, Manitoba, and Newfoundland and Labrador. The payroll tax is levied on employers in each province to help fund their respective health plans
• returns to certain employees of their share of the Employment Insurance premium reduction

Generally, Public Service Pension Plan contributions, Public Service Death Benefit Account contributions, Canada/Québec Pension Plan contributions and Employment Insurance premiums are recovered from all departments, agencies and revolving funds based on salaries and wages incurred. Contributions to health care plans are recovered from certain departments and agencies, and from all revolving funds, based on a percentage of salaries and wages incurred.

The following table presents a breakdown by major category:

2.2.1 Secretariat reliance on other federal government organizations

As a department, the Secretariat relies on other organizations to process certain transactions that are recorded in its financial statements. There are two types of service arrangements, as detailed below: common arrangements used by most departments and specific arrangements used by the Secretariat.

2.2.2 Secretariat reliance on non-governmental service providers

The Secretariat relies on the internal controls of a number of insurance companies (that is, currently Sun Life Assurance Company of Canada, Great West Life Assurance Company, Industrial Alliance and Manulife) which provide specific services to the Secretariat as a government central agency, such as health care plan administration, dental plan administration and insurance services. As external service providers, pursuant to contracts with the Government of Canada, these insurance companies have the authority and responsibility to ensure that these services are managed in accordance with the terms and conditions set out by the Secretariat’s Pensions and Benefits Sector (PBS).

2.2.3 Secretariat services upon which other departments and agencies rely

Other government departments and agencies rely on the Secretariat to process certain transactions and to provide information that impacts their financial statements.