Ministerial letter of expectations/statement of priorities
Crown Corporation Issue Note
How can the board of directors of a Crown corporation contribute to and support a ministerial letter of expectations?Footnote 1
Crown corporations are established to fulfill specific mandates but can also play a role in advancing broader government priorities. Some ministers use a letter of expectations to communicate government priorities and expectations to Crown corporations. A letter of expectations provides the responsible minister with the opportunity to feed into the Crown corporation's annual corporate planning process by communicating the government's overarching public policy priorities, broad strategic goals and expectations. Some ministers have found that issuing such a letter can foster effective communications between the government and each Crown corporation on what needs to be accomplished by the corporation and how government expectations can be addressed, having regard to the independence of each Crown corporation in these areas.
In addition to the regular planning and reporting cycle, a number of circumstances may trigger a letter of expectations. Examples include the release of a federal budget, a new government, a Speech from the Throne, the assignment of a new portfolio minister and a major shift in the Canadian economy.
The responsible minister controls the development of the letter but may have discussions with the chairperson or with the entire board of directors of the Crown corporation during the drafting phase. In some portfolios, portfolio department officials may work with officials of the Crown corporation during the early stages of development.
Preliminary consultation and shared dialogue on the draft letter provide a common understanding of both the government's intentions and the corporation's capacity to meet expectations. The final letter of expectations is typically issued as a signed letter from the responsible minister to the chairperson of the Crown corporation's board of directors.
The letter of expectations represents an important and useful communication from the responsible minister to the Crown corporation. The letter may indicate to the corporation considerations that are relevant to the corporate plan approval process.
As the recipient of the letter, it is the chairperson's responsibility to ensure that its contents are communicated to the other members of the board, the Crown corporation's Chief Executive Officer (CEO) and other appropriate senior management. Discussion of the letter can form a key part of the meeting of the board of directors following its receipt. The board of directors should seek clarification if there is any uncertainty regarding the letter's contents.
The board may also decide to include elements of the letter in developing the CEO's performance agreement. Specifically, the letter of expectations can form an integral part of the policy and program commitments for the CEO as outlined in the Performance Management Program for Chief Executive Officers of Crown Corporations guidelines provided by the Privy Council Office.
The chairperson may wish to send a written response to the minister acknowledging receipt of the letter of expectations, including any follow-up actions the Crown corporation plans to take. In some cases, a response from the chairperson may be requested in order to support the minister's own reporting requirements to the prime minister. A written reply to the letter may be particularly relevant where a Crown corporation is not required to submit a corporate plan or where the board thinks the corporation will be challenged in trying to meet the government's expectations.
The board of directors should also consider whether to address the Crown corporation's progress in achieving the government's priorities in the corporation's annual report. The annual report serves the dual purpose of closing off a fiscal year's activities and setting the stage for the next fiscal year. While not obliged to do so, some Crown corporations have opted to disclose the entire content of their letter of expectations and publish it as part of their planning or reporting documentation.
Until a new letter of expectations is issued, the board of directors of the Crown corporation may assume that the previous letter continues to apply to the corporation's planning activities.
The letter of expectations presents a valuable opportunity to engage boards of directors in an effective dialogue with the responsible minister about the government's expectations. Boards of directors should optimize this opportunity to obtain clarity on their responsible minister's stated expectations and priorities, and endeavour to address these in the Crown corporation's planning and reporting processes.
Treasury Board of Canada Secretariat
Government Operations Sector
- TBS Legal Services
- Senior Personnel, Privy Council Office
- Machinery of Government, Privy Council Office
- Portfolio Coordination Secretariat, Agriculture and Agri-Food Canada
- Portfolio Governance, Canadian Heritage
- Portfolio Policy and Governance, Transport Canada
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