Archived — Departmental Performance Report—For the period ending March 31, 2012

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Table of contents


How to use this electronic Departmental Performance Report

This electronic Departmental Performance Report (DPR) has been designed to connect Canadians with Government of Canada performance information and is part of a larger Government of Canada initiative that calls for:

  • reporting to Canadians in plain language;
  • providing the information that Canadians need to understand our services and assess our performance; and
  • enabling Canadians through easy-to-navigate Government of Canada performance.

This electronic DPR presents the results of Industry Canada's (IC) strategic outcomes and program activities in 2011–12, compared with the commitments stated in the Department's 2011–12 Report on Plans and Priorities (RPP). It should be noted that for new performance indicators trend information has not been included given that it is unavailable. In our continuing effort to provide Canadians with online access to information and services, we are including web links that provide additional information and highlights. Should you have any comments on this report, please communicate with us via mail, email or fax as listed below:

Name:
Planning, Performance and Reporting Group
Comptrollership and Administration Sector
Industry Canada
Address:
235 Queen Street
2nd Floor, East Tower
Ottawa ON K1A 0H5
Email:
ic.info-info.ic@canada.ca
Fax:
613-957-6543

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Minister's Message

Minister of Industry and Minister of State (Agriculture), Honourable Christian Paradis

The Department of Industry made significant progress on a number of files in 2011–12.

One of the most anticipated announcements by the Department was the release of the policy and technical framework for upcoming spectrum auctions. This, in addition to important changes to the Telecommunications Act to allow greater foreign investment in the telecommunications market, will help bring new mobile technologies and services to Canadians.

To encourage even greater investment in the Canadian economy, the Department introduced a number of targeted improvements to the Investment Canada Act that provide greater transparency and flexibility in enforcement.

And as part of our ongoing support for the digital economy, this past year the Department welcomed the passage of the Copyright Modernization Act, which updated Canada's copyright law for the first time since 1997.

Industry Canada has also worked closely with other members of the Portfolio, as well as key stakeholders, to meet the commitments of the science and technology strategy, in particular, to promote business-led innovation across Canada.

Another key initiative—Canada's Federal Tourism Strategy—was successfully launched, setting out a whole-of-government approach to our forward-looking tourism agenda.

Throughout its work, Industry Canada is guided by three strategic objectives:

  • facilitate an efficient and competitive marketplace;
  • create the conditions for advancements in science, technology, knowledge and innovation; and
  • ensure Canadian businesses and communities are competitive.

As we move forward, the Department will continue to support government priorities while recognizing the need for fiscal restraint and the return to fiscal balance. Through the right mix of strategic investment, marketplace frameworks and modern programs and services, Industry Canada continues to set the conditions for companies to succeed at home and abroad.

It is my pleasure to present the 2011–12 Departmental Performance Report for Industry Canada.

Christian Paradis
Minister of Industry and Minister of State (Agriculture)

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Raison d'être and Responsibilities

Raison d'être

Mission

Industry Canada's mission is to foster a growing, competitive, knowledge-based Canadian economy.

The Department works with Canadians throughout the economy, and in all parts of the country, to improve conditions for investment, improve Canada's innovation performance, increase Canada's share of global trade and build an efficient and competitive marketplace.

Mandate

Industry Canada's mandate is to help make Canadian industry more productive and competitive in the global economy, thus improving the economic and social well-being of Canadians.

The many and varied activities Industry Canada carries out to deliver on its mandate are organized around three interdependent and mutually reinforcing strategic outcomes. Each outcome is linked to a separate key strategy, as outlined below and shown in the adjacent figure.

3 Key Strategies

Description of Figure

This chart illustrates that Industry Canada's three strategic outcomes—the Canadian marketplace is efficient and competitive; science and technology, knowledge, and innovation are effective drivers of a strong Canadian economy; and competitive businesses are drivers of sustainable wealth creation—are driven by and contribute to the Government of Canada's desired outcomes: a fair and secure marketplace; an innovative and knowledge-based economy; strong economic growth; and a strong and mutually beneficial North America. Industry Canada's three strategic outcomes the result of the Department's three key strategies—advancing the marketplace; fostering the knowledge-based economy; and supporting business—which are delivered through various program activities and supported by strategic enablers such as people management, risk management, management accountability and other corporate functions.

The Canadian marketplace is efficient and competitive
Advancing the marketplace

Industry Canada fosters competitiveness by developing and administering economic framework policies that promote competition and innovation; support investment and entrepreneurial activity; and instill consumer, investor and business confidence.

Advancements in science and technology, knowledge, and innovation strengthen the Canadian economy
Fostering the knowledge-based economy

Industry Canada invests in science and technology to generate knowledge and equip Canadians with the skills and training they need to compete and prosper in the global knowledge-based economy. These investments help ensure that discoveries and breakthroughs happen here in Canada and that Canadians can realize the social and economic benefits.

Canadian businesses and communities are competitive
Supporting business

Industry Canada encourages business innovation and productivity because businesses are the organizations that generate jobs and wealth creation. Promoting economic development in communities encourages the development of skills, ideas and opportunities across the country.

Responsibilities

Industry Canada is the Government of Canada's centre of microeconomic policy expertise. The Department's founding legislation, the Department of Industry Act, established the Ministry to foster a growing, competitive and knowledge-based Canadian economy.

Industry Canada is a department with many entities that have distinct mandates, with program activities that are widely diverse and highly dependent on partnerships. Industry Canada works on a broad range of matters related to industry and technology, trade and commerce, science, consumer affairs, corporations and corporate securities, competition and restraint of trade, weights and measures, bankruptcy and insolvency, intellectual property, investment, small business, and tourism.

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Strategic Outcomes and Program Activity Architecture

Strategic Outcomes

This electronic Departmental Performance Report is aligned with Industry Canada's Management, Resources and Results Structure (MRRS). The MRRS provides a standard basis for reporting to parliamentarians and Canadians on the alignment of resources, program activities and results.

Industry Canada's strategic outcomes represent long-term, enduring benefits to the lives of Canadians that reflect our mandate and mission, and are linked to Government of Canada priorities and expected results.

Industry Canada's Program Activity Architecture (PAA) is an inventory of all of its programs. The programs are depicted in a logical and hierarchical relationship to each other and to the strategic outcome to which they contribute. The PAA also provides a framework that links financial and non-financial resources and results to each program activity.

Industry Canada's 2011–12 Program Activity Architecture

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Organizational Priorities

The achievements highlighted below correspond to the organizational priorities set-out in the 2011–12 RPP.

Priority 1:
Advancing the marketplace
Type:
Previously committed to
Strategic Outcome(s):
The Canadian Marketplace is Efficient and Competitive

Ensure marketplace policies help promote competitive markets and instill consumer confidence

  • The Policy and Technical Framework for the Mobile Broadband Services (MBS)—700 MHz Band and Broadband Radio Service (BRS)—2500 MHz Band was released in March 2012. Auctioning of these bands will help support new mobile technologies and services in the Canadian marketplace.
  • Protecting Canadians against abuse of dominance, domestic cartels and false or misleading representations has led to several successful outcomes. As an example, in 2011–12, the Competition Bureau reached an agreement with a Canadian communications service provider to stop making misleading representations about the prices offered for its services and the company was required to pay an administrative penalty of $10 million, the maximum allowed under the Competition Act.
  • Industry Canada continues to develop the regulations required to implement the Fairness at the Pumps Act. Proposed regulations include the establishment of mandatory inspection frequencies in eight sectors (retail petroleum, downstream (or wholesale) petroleum, dairy, retail food, fishing, logging, grain and field crops and mining) under the authority of the Weights and Measures Act. As well, regulations for of administrative monetary penalties will be introduced under the authority of the Electricity and Gas Inspection Act and the Weights and Measures Act.
Priority 2:
Fostering the knowledge-based economy
Type:
Previously committed to
Strategic Outcome(s):
Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy

Foster business innovation

  • The Department supported the expert panel mandated with the Review of Federal Support to Research and Development which resulted in the submission of Innovation Canada: A Call to Action, the expert panel's report to the Government of Canada in October 2011. Industry Canada considered and advised on the recommendations of the expert panel in the context of the government's overall priorities and economic agenda to provide key policy advice towards improving Canada's science, technology and innovation system. Budget 2012 included measures related to many elements of the expert panel's advice including: increasing support for high-growth companies, research collaborations, innovation procurement opportunities, and support to grow venture financing.
  • Industry Canada continued to support the federal government in developing policies, regulations, standards and programs to enable world-class research and development (R&D) on innovative information and communications technologies (ICT). Examples can be found under the program activity Information and Communications Technologies Research and Development.
  • In an effort to encourage R&D and foster collaboration among research institutes, universities, colleges and the private sector, the Department participated in the Canadian Networking Aerospace Project for Europe (CANNAPE) as a Core Group and Steering Committee member to promote R&D collaboration in aerospace between Canadian and European companies and researchers. Industry Canada also organized two workshops (CANNAPE 1st Workshop and CANNAPE 2nd Workshop) bringing together aerospace researchers and other stakeholders to discuss potential partnerships and joint projects.

Invest in science and technology (S&T) to enhance the generation and commercialization of knowledge

  • Industry Canada continued to provide advice and work in collaboration with portfolio partners, other funding organizations and key stakeholders to meet the commitments made in the S&T Strategy: Mobilizing Science and Technology to Canada's Advantage. This was achieved through Industry Canada's participation in the governance of tri-council programs to ensure effectiveness of programs and alignment with objectives of the S&T Strategy.
Priority 3:
Supporting business
Type:
Ongoing
Strategic Outcome(s):
Canadian Businesses and Communities are Competitive

Foster internationally competitive businesses and industries

  • The Department organized and led the delivery of the Roundtable on Innovation, Investment and Global Mandates (PDF, 212 KB, 2 pages), bringing together 35 policy leaders, private-sector executives and academics. Participants shared best practices and gained insights into how firms make investment and product mandate decisions, how Canada fares on key decision drivers, and how governments and the private sector can work together to become more successful in winning national and global mandates.
  • Industry Canada led the development and the launch of the Federal Tourism Strategy (FTS) as a whole-of-government approach involving over 15 other federal departments and agencies.
  • Industry Canada supports the arm's-length Review of Aerospace and Space Programs and Policies launched by the Government of Canada in February 2012. The objective of the Review is to produce concrete, fiscally neutral recommendations on how federal policies and programs can help maximize the competitiveness of Canada's aerospace and space sectors. Industry Canada participates as an observer in five of the Review's six working groups and will be responsible for coordinating advice to the Government of Canada on how to respond to the Review's final report.

Promote business growth, entrepreneurship and community development

Priority 4:
Departmental management
Type:
Ongoing/New
Strategic Outcome(s):
All strategic outcomes

People Management (Ongoing):

  • In 2011–12, Industry Canada was recognized as one of Canada's Top 100 Employers, top 25 family-friendly employer and top 25 national capital region employers for 2011; and received the 2012 Canadian Women in Communications (CWC) Employer Excellence Award (PDF, 44 KB, 2 pages) for Sustainability in Gender Diversity.
  • Industry Canada completed its three-year People Management Strategy in March 2012. As part of this strategy, the Department supported its IC Young Professionals Network (ICYPN); streamlined service delivery for staffing and classification; completed and refined Human Resources (HR) service standards; developed Values and Ethics Expectations and Guidelines for Industry Canada employees; and launched the Leadership Development Roadmap for aspiring executives.
  • In alignment with the Public Service Employee Survey 2008 results on leadership, Industry Canada developed tools for the EX cadre which include: IC Executive Learning Initiative, Talent Management Committees for EX-01, EX-02 and EX-03 level executives, a 360 Degree Feedback Assessment. New development programs were created in response to employee need for career opportunities and development.

Financial Management (Ongoing):

  • Industry Canada built on its existing stewardship and oversight practices to monitor program funding and expenditures. This included conducting comprehensive monthly analyses of trends and forecasting in employee headcount, salary expenditures and non-salary expenditures at both the departmental and sector levels to ensure affordability and sustainability. These analyses were key elements in the decision-making process to ensure the Department delivered programs and services to achieve its mandate and met its priorities.

Internal Audit (Ongoing):

  • The internal audit function at Industry Canada adhered to the approved risk-based plan for 2011–12 and achieved the intended coverage. Monitoring of management actions on audit recommendations provided assurance to senior management and the Departmental Audit Committee and allowed for informed decision making. These activities are core elements of Industry Canada's framework for sound stewardship and management.

Management and Business Communication Tools (New):

  • The Department reviewed its web presence in an effort to provide equal access to persons with disabilities and to improve service. The efforts of the Department exceeded the policy requirements set out in the Standard on Web Accessibility and resulted in a prototype site that proved to be far easier for Canadians to use in finding and understanding Industry Canada programs and services. This prototype and additional enhancements are to be published in 2012–13.
  • The intranet continues to be updated, and the proliferation of wiki users has allowed greater collaboration.

Asset and Material Management (New):

  • The Materiel Management Policy renewal project, which included updating existing policy documents as well as creating new policy and guidance documents to ensure adherence to the Treasury Board Policy Framework for the Management of Assets and Acquired Services, was approved and released. It was disseminated through various communication strategies, including presentations to senior management, a presentation to a departmental Finance and Administration Conference and through emails.
  • The Fleet Management Policy Framework was implemented and continues to be enhanced through the Fleet Management Working Group and training products.

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Risk Analysis

Operating Environment

During the past year, Canada's economic recovery slowly began to take hold, with sustained job growth and economic expansion. In 2011–12, Canadian growth was led by increased domestic demand, driven by household spending. Businesses invested in new machinery and equipment in response to favourable investment conditions. Demand from emerging markets, as well as geopolitical concerns, translated into elevated prices for energy and commodities, while inflation concerns were kept in check. The global environment remained volatile, with continued strong growth in emerging markets accompanied by restructuring and fragile recoveries in advanced economies.

Industry Canada continued to foster the competitiveness of Canada's business environment to ensure that businesses have the tools they need to innovate, grow and prosper over the long term as demonstrated by the activities and results presented in this report. This, combined with the ongoing implementation of Canada's Economic Action Plan (EAP) and engagement with partners and stakeholders, framed Industry Canada's operating context for 2011–12 and played an important role in the Department's delivery of its plans and priorities.

Strategic Review

The 2010 Strategic Review identified $15.8 million in annual savings within Industry Canada by 2014–15, including realigning resources to eliminate duplication, aligning program activities to the Department's core mandate, and ensuring that existing programming focuses on current government priorities. Through Strategic Review, Industry Canada identified reductions in five programs, including reductions to internal services associated with the program adjustments. Further details on the identified reductions are presented on the Results and Performance webpage as well as on the Internal Services webpage.

Risk Management

In 2011–12, Industry Canada took a number of steps to enhance and refine the approach used to identify, prioritize and monitor corporate risks. Risk information was also further integrated with the Department's program activities and strategic outcomes. The Department continued to build internal capacity and expertise around risk management through a variety of outreach activities with other government departments and agencies, as well as enhancing the tools used by senior management to identify and prioritize risks that could affect Industry Canada's ability to achieve its mandate and objectives.

These activities helped form Industry Canada's 2011–12 Corporate Risk Profile (CRP), which was developed in accordance with the Department's Integrated Risk Management Framework. The CRP, which is updated annually, articulates the main corporate risks for the fiscal year and describes their associated mitigation strategies and action plans. The 2011–12 Corporate Risk Profile identified the following four corporate risk categories, which link program and internal service risks to departmental priorities:

  1. Spectrum and Telecommunications Frameworks and Regulations—Addressing the challenges associated with advancing a regulatory and policy framework that supports the continued evolution of the telecommunications and wireless infrastructure in Canada.
  2. Reputational and Stakeholder Expectations—managing expectations and maintaining Industry Canada's reputation among stakeholder groups, the public and media, to effectively deliver on its programs and services.
  3. Organisational adaptability—supporting the department's ability to deliver programs and meet departmental and Government priorities.
  4. Innovation—addressing the potential impacts on the investment and innovation capacity of Canadian industries and their ability to leverage leading-edge research and S&T discoveries, given the current global and financial context.

Details on risks related to specific Program Activities, including mitigation activities and their results, can be found on the Results and Performance webpage under Lessons Learned. Of note during this period is that Industry Canada maintained its rigorous management of risks related to the implementation of its 2009 Economic Action Plan initiatives, which concluded in 2011–12.

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Expenditure Profile and Estimates by Vote

Industry Canada's financial and human resources

The following table presents Industry Canada's total financial and human resources for 2011–12.

Performance Summary Table

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources
($ millions)Footnote 1
Human Resources
(FTEs)Footnote 3
Planned Spending Total AuthoritiesFootnote 2 Actual Spending Planned Actual DifferenceFootnote 4

Footnotes

Footnote 1

Financial Resources represent the sum of the total line for program activities and internal services. The table excludes total authorities and actual spending deemed appropriated to Shared Services Canada.

Return to footnote 1 referrer

Footnote 2

For an explanation of the variance between planned and total authorities, see the tables at the Strategic Outcome level.

Return to footnote 2 referrer

Footnote 3

Human Resources represent the sum of the total line for program activities and internal services. The table excludes actual FTEs deemed appropriated to Shared Services Canada.

Return to footnote 3 referrer

Footnote 4

Due to budgetary restraint measures over the past year, Industry Canada has carefully controlled its headcount and all staffing decisions which resulted in lower-than-planned full-time equivalents (FTEs). Furthermore, 123 employees were transferred to Shared Services Canada, with an effective date of November 15, 2011, resulting in a reduction of 44 FTEs for the year.

Return to footnote 4 referrer

1,407.5 1,745.5 1,446.7 5,649 5,292 357

Departmental Spending Trend ($ millions)

Figure 2: Departmental Spending Trend ($ millions)

Figure 2: Departmental Spending Trend ($ millions)
  2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14
Total Spending 1,363.9 1,228.6 1,278.7 1,144.8 1,116.9 1,445.4 1,131.2
Total Spending + Canada's Economic Action Plan   1,228.6 2,567.6 2,055.0 1,446.7 1,498.0 1,131.2
Total Spending + Sunset Programs 1,363.9 1,228.6 1,278.7 1,144.8 1,116.9 1,527.7 1,186.5

The variances in the Departmental Spending Trend are primarily caused by Budget 2009 initiatives, as shown by the total spending + EAP line.

Canada's Economic Action Plan

Canada's Economic Action Plan 2009 included initiatives which were originally to be completed in two years however the programs listed below received an extension until October 31, 2011.

Financial Resources in 2011–12 ($ millions)
EAP Initiative by Program Activity Total Authorities Total Actual
Program Activity: Science, Technology and Innovation Capacity
Knowledge Infrastructure Program 189.1 185.6
Institute for Quantum Computing 5.0 5.0
Canada Foundation for Innovation 75.0 75.0
Ivey Centre for Health Innovation and Leadership 1.1 1.1
Program Activity: Community Economic Development
Broadband Canada: Connecting Rural Canadians 69.9 63.1
Total 340.0 329.8

Changes to Government Structure

Shared Services Canada was created through an Order in Council on August 17, 2011, which transferred the control and supervision of email, data centre and network services units of 43 departments to the new Department effective November 15, 2011. The impact of this transfer on Industry Canada is detailed below.

2011–12 Financial Resources ($ millions) and 2011–12 Human Resources (FTEs)
2011–12 Financial Resources
($ millions)
2011–12 Human Resources
(FTEs)
  Planned Spending Total AuthoritiesFootnote 5 ActualsFootnote 6   Planned Actual

Footnotes

Footnote 5

Represents authorities appropriated to Shared Services Canada, pursuant to s. 31.1 of the Financial Administration Act and Orders in Council P.C. 2011-0881, P.C. 2011–0877 and P.C. 2011–1297, effective November 15, 2011, which result in a reduction in the appropriation for Industry Canada.

Return to footnote 5 referrer

Footnote 6

Represents expenditures incurred on behalf of Shared Services Canada which result in a reduction in the actual spending of Industry Canada.

Return to footnote 6 referrer

Footnote 7

A total of 123 employees were transferred to Shared Services Canada. With an effective date of November 15, 2011, the FTE utilization represents approximately 5/12 of the fiscal year, or 44 FTEs.

Return to footnote 7 referrer

Net Transfer post Orders in Council (OIC) - 12.7 10.6 Deemed to SSC - 44Footnote 7

Estimates by Vote

For information on organizational votes and/or statutory expenditures, please see the Public Accounts of Canada 2012 (Volume II) publication (PDF, 2.3 MB, 550 pages). An electronic version of the Public Accounts is available on the Public Works and Government Services Canada website.

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Results and Performance by Strategic Outcome

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Results and Performance by Strategic Outcome (continued)

Strategic Outcome 1: The Canadian Marketplace is Efficient and Competitive

Industry Canada strives to achieve an efficient and competitive marketplace by developing and implementing policies that promote competition and support investment and entrepreneurial activity. These include laws and regulations governing intellectual property, bankruptcy and insolvency, competition and restraint of trade, corporations and corporate governance, foreign direct investment, internal trade, weights and measures, consumer affairs, and telecommunications. These policies help the Department in its role of promoting innovation, competition and productivity, and instilling business, investor and consumer confidence. Progress towards achieving this outcome was accomplished in 2011–12 through the following program activities:

  • Marketplace Frameworks and Regulations;
  • Spectrum, Telecommunications and the Online Economy;
  • Consumer Affairs; and
  • Competition Law Enforcement
Figure 3: Distribution of spending by Program Activity under the Strategic Outcome The Canadian Marketplace is Efficient and Competitive.

Figure 3: Distribution of spending by program in the area of the Canadian Marketplace is Efficient and Competitive

Description of Figure : Distribution of spending by program in the area of the Canadian Marketplace is Efficient and Competitive

Figure 3: Distribution of spending by program in the area of the Canadian Marketplace is Efficient and Competitive
Spectrum, Telecommunications and the Online Economy Competition Law Enforcement Marketplace Frameworks and Regulations Consumer Affairs
49% 27% 21% 3%
Updated Legislation

In 2011-12, Bill C-11, the Copyright Modernization Act, was introduced to Parliament and received Royal Assent on June 29, 2012. The Bill balances the needs of creators and consumers and ensures copyright laws are modern, flexible, and align with international standards. It recognizes new mediums to use intellectual property and gives creators the tools required to protect their work and grow their businesses. The Government of Canada also reintroduced amendments to the Personal Information Protection and Electronic Documents Act (PIPEDA) through Bill C-12, Safeguarding Canadians' Personal Information Act. The Bill recognizes that for the digital economy to continue to grow, Canadian consumers and businesses need to be assured that their personal information is protected. PIPEDA sets privacy rules for the collection, use and disclosure of personal information in the course of commercial activities.

Figure 4: Financial Resources.Footnote 8

Figure 4: Financial Resources

Description of Figure : Figure 4: Financial Resources

Figure 4: Financial Resources (in $ Millions)
  2009–10 2010–11 2011–12
Planned 181.3 206.2 198.3
Total Authorities 379.5 357.7 355.8
Actual 206.5 182 185.2

Figure 5: Human ResourcesFootnote 9

Figure 5: Human Resources

Description of Figure

Figure 5: Human Resources (FTEs)
  2009–10 2010–11 2011–12
Planned 3,017 2,941 2,928
Actual 3,006 2,863 2,780

Footnotes

Footnote 8

The Canadian Intellectual Property Office (CIPO) accounts for $158.2 million of the total authority figure. CIPO is an organization within the Department that is funded entirely from the revenues it generates. Total Authorities include the surplus that CIPO has accumulated since its creation in 1994 as well as deferred revenues. The intent is never to spend the surplus in a single year but to draw on it occasionally to fund capital investments or when expenses exceed revenues. The variance between Planned and Actual Spending is a result of net income from operations generated by CIPO being higher than expected and spending on major capital projects being deferred to future years.

Return to footnote 8 referrer

Footnote 9

As employees left the Department through normal attrition, many positions were left vacant in order to facilitate the implementation of budgetary reductions.

Return to footnote 9 referrer


Table: The Canadian Marketplace is Efficient and Competitive
Program Activity 2010–11 Actual Spending
($ millions)
2011–12
($ millions) Footnote 10
Alignment to Government of Canada Outcomes
Main Estimates Planned Spending Total Authorities Actual Spending

Footnotes

Footnote 10

Minor differences are due to rounding. The total authorities and actual spending exclude amounts deemed appropriated to Shared Services Canada.

Return to footnote 10 referrer

Footnote 11

The Canadian Intellectual Property Office (CIPO) accounts for $158.2 million of the total authority figure. CIPO is an organization within the Department that is funded entirely from the revenues it generates. Total Authorities include the surplus that CIPO has accumulated since its creation in 1994 as well as deferred revenues. The intent is never to spend the surplus in a single year but to draw on it occasionally to fund capital investments or when expenses exceed revenues. The variance between Planned and Actual Spending is a result of net income from operations generated by CIPO being higher than expected and spending on major capital projects being deferred to future years.

Return to footnote 11 referrer

Marketplace Frameworks and Regulations Footnote 11 40.3 56.9 58.3 205.1 39.1 Economic Affairs: A Fair and Secure Marketplace
Spectrum, Telecommunications and the Online Economy 91.0 87.1 87.7 95.6 91.4
Consumer Affairs 5.0 4.6 4.6 5.0 4.8
Competition Law Enforcement 45.6 47.6 47.7 50.2 49.9
Total 182.0 196.1 198.3 355.8 185.2

Summary of Performance

Strategic Outcome 1
The Canadian Marketplace is Efficient and Competitive
Performance Indicators Target 2011–12 Performance

Footnotes

Footnote 12

The indicator is measured by the OECD every five years, with the next update scheduled for 2013. For this indicator, a rank closer to first indicates that policy settings promote competition in areas of the product market where competition is viable more than in other G7 countries.

Return to footnote 12 referrer

Footnote 13

The raw score is based on the unweighted average of the three component domains, state control, barriers to entrepreneurship, and barriers to trade and investment. (Raw score in 2008: 0.96, in 2003: 1.14, in 1998: 1.28).

Return to footnote 13 referrer

Footnote 14

The indicator is measured by the OECD every five years, with the next update scheduled for 2013. For this indicator, a rank closer to first indicates higher barriers to competition. The shift from 11th rank in 2003 to 5th in 2008 indicates that Canada moved from having the 11th-highest barriers to competition among OECD countries to 5th-highest barriers, resulting in a decline in performance.

Return to footnote 14 referrer

Footnote 15

The raw score is based on the unweighted average of the four barriers to competition. The raw score is positioned on a scale from 0–6, where 6 represents higher barriers to competition. (Raw score in 2003: 2.00; and in 2008: 2.09). The decline is in three out of four areas of barriers to competition: legal barriers, barrier to entry in network sectors and barriers to entry in services. The 4th area of barriers to competition is Anti-Trust Exemptions.

Return to footnote 15 referrer

Canada's ranking for Integrated Product Market Regulation (Organisation for Economic Co-operation and Development (OECD) indicator of a country's economy-wide regulatory and market environments) 4th Based on the 2008 measure of the OECD Product Market Regulation (PMR) indicators, Canada was ranked as 3rd in the G7Footnote 12 and 5th in the OECD. Canada has maintained a 3rd place rank in the G7 over the past 3 cycles. Canada has, however, improved its base scores since 1998 in all domainsFootnote 13 reviewed, despite the ranking not changing. This means government policy promotes competition more than in the past.
Canada's ranking for "starting a business" (World Bank Group's Ease of Doing Business index) 3rd Canada's ranking for "starting a business" remained the same as for the previous year. Canada remains the easiest country in the G7 to start a business, and 3rd on the index. Canada is a low-cost environment with only one procedure required to start a business according to the Ease of Doing Business Index, which takes into consideration the requirements for the number of procedures, time required, cost, and amount paid in minimal capital.
Canada's ranking for barriers to competition (OECD assessment of accessibility to the Canadian market) 26th Based on the 2008 measure of the OECD Product Market Regulation (PMR) indicators, Canada was ranked as the 5thFootnote 14 highest barriers to competition, or 26th lowest barriers to competition. In the 2003 PMR report, Canada ranked 11th. Canada's fall in ranking is primarily attributed to increased barriers to entry in services.Footnote 15

Program Activity: Marketplace Frameworks and Regulations

Program Description

Industry Canada is responsible for the oversight and regulation of a number of aspects of the Canadian marketplace including bankruptcy, foreign direct investment, federal incorporation, intellectual property, and trade measurement. To fulfill its mandate, Industry Canada, through this program, delivers sound regulatory regimes and frameworks, which include regulations, policies, procedures and standards, and ensures compliance with these regulatory regimes and frameworks. Overall, the program benefits Canadians by ensuring the integrity of the marketplace.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources
($ millions)Footnote 16
Human Resources
(FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference

Footnotes

Footnote 16

CIPO accounts for $158.2 million of the total authority figure. CIPO is an organization within the Department that is funded entirely from the revenues it generates. Total Authorities include the surplus that CIPO has accumulated since its creation in 1994 as well as deferred revenues. The intent is never to spend the surplus in a single year but to draw on it occasionally to fund capital investments or when expenses exceed revenues. The variance between Planned and Actual Spending is a result of net income from operations generated by CIPO being higher than expected and spending on major capital projects being deferred to future years.

Return to footnote 16 referrer

58.3 205.1 39.1 1,770 1,686 84

Table: Marketplace Frameworks and Regulations
Expected Result Performance Indicator Target Actual Result

Footnotes

Footnote 17

CIPO's performance was 60 percent in 2010–11. The increase is due to a change in measurement methodology and to improvements in performance and updated service standards.

Return to footnote 17 referrer

Legislation, regulations and policy are in place and are administered for Canadian markets. Percentage of cases for which regulatory time frames or service standards are met 80% Industry Canada met or exceeded service standards and/or regulatory timeframes an average of 95% of the time across the five areas in this program, an improvement from 88% the previous year. Individual results were:
  • 92% for Measurement Canada
  • 95.6% for Office of the Superintendent of Bankruptcy
  • 100% for Corporations Canada
  • 99% for Investment Review
  • 90% for Canadian Intellectual Property Office.Footnote 17
Performance Summary and Analysis of Program

With Canadians' and Canadian businesses' interest in mind, Industry Canada focused on improving conditions in the marketplace to modernize governance and implement legislative and regulatory initiatives.

To modernize the governance framework for not-for-profit corporations and allow them to incorporate at the federal level faster, Industry Canada implemented and began administration of the Canada Not-for-profit Corporations Act. This Act provides not-for-profit organizations clearer rules for internal governance, flexibility and adaptability to operate with less regulatory burden.

The Fairness at the Pumps Act received Royal Assent on March 23, 2011. Preliminary consultations on proposed regulatory amendments necessary to implement the Act were held with stakeholders between June and September 2011 focused on proposals for mandatory inspection frequencies and administrative monetary penalties.

In 2011–12, Industry Canada developed regulatory amendments to the intellectual property frameworks in Canada to align them with international intellectual property frameworks and to simplify and clarify associated processes. These amendments, currently under review as part of the regulatory process, will decrease uncertainty for businesses and investors and allow the Canadian Intellectual Property Office (CIPO) to better serve its clients. CIPO also conducted outreach activities in 2011–12 to promote awareness of the benefits of intellectual property. The outreach strategy focused on post-secondary institutions as well as small- and medium-sized enterprises (SMEs) that export. As a result of the outreach activities in the post-secondary sector, 127 intellectual property case studies were delivered in 55 universities and colleges and 12 other organizations, reaching 3,276 participants.

Lessons Learned

In anticipation of the Canada Not-for-profit Corporations Act receiving Royal Assent, it was determined that the existing information technology systems would be insufficient to effectively implement and administer the new provisions of the Act. In response, Industry Canada enhanced the existing information technology system, which was completed and implemented on time.

Program Sub-Activity
Measurement Canada
Description:
Measurement Canada, a special operating agency, ensures the integrity and accuracy of goods and services bought and sold on the basis of measurement in Canada. It protects Canadians against financial loss due to inaccurate measurement and maintains consumer and business confidence in measurement-based financial transactions (trade measurement) by ensuring that devices (e.g., scales, gas pumps, and electricity and natural gas meters) used in Canada meet legislative standards for accuracy and performance. Measurement Canada investigates measurement practices in the Canadian marketplace and compels institutions to take corrective actions when unfair practices are found.
Expected Result Performance Indicator Target Performance Status
Fair and accurate trade measurement in Canada Percentage of marketplace monitoring inspections where devices are found to be measuring accurately 85% Overall, the measurement accuracy compliance of devices inspected remained constant at 2010–11 levels (88%) which exceeded the set target. Certain sectors are improving their measurement accuracy, including retail food, logging, chemical products, scrap metal, mining and livestock/poultry.
Percentage of Measurement Canada product and surveillance audits confirming authorized service providers' competencies to conduct inspections on the agency's behalf 90% 90% of planned product and surveillance audits (including assessments of 374 recognized technicians) were conducted, confirming authorized service providers' competencies to perform inspections on Measurement Canada's behalf.
Program Sub-Activity
Superintendent of Bankruptcy
Description:
In the public interest and for the benefit of investors, lenders and consumers, the Office of the Superintendent of Bankruptcy supervises the administration of estates and matters under the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act. As an integral source of information on Canadian insolvency matters, the Office of the Superintendent of Bankruptcy provides leadership in protecting the integrity of the bankruptcy and insolvency system by maintaining an efficient and effective insolvency regulatory framework, promoting awareness of the rights and responsibilities of the stakeholders, and ensuring trustee and debtor compliance with the legislative and regulatory framework through the supervision of debtors and of trustees administering estates.
Expected Result Performance Indicator Target Performance Status
The integrity of the insolvency system is protected, and estates are supervised and administered in accordance with insolvency legislation. Percentage of trustees with a satisfactory compliance record 85% 93% of trustees had a satisfactory compliance record which exceeded the set target. This is an improvement from the past; 84% of trustees had a satisfactory compliance record in March 2009. Continuous improvement efforts have led to regular increases in satisfactory compliance records, which represents conformity with the legislative and regulatory framework.
Percentage of debtors with surplus income who completed payments to the estate as required 75% 82% of debtors with surplus income completed payments to the estate as required which was greater than the set target. This contributes to the cost of the administration of the bankruptcy, including payments to creditors.
Program Sub-Activity
Corporations Canada
Description:
This program allows Canadians and businesses to incorporate at the federal level in accordance with Canadian laws, such as the Canada Business Corporations Act, the Canada Corporations Act, the Boards of Trade Act and the Canada Cooperative Associations Act, regulations and several corporate laws governing federal companies (with the exception of financial intermediaries). It also issues and registers official documents under the Great Seal of Canada. The program's main lines of business include incorporation and related services (such as amalgamation or corporate charter amendments), the dissolution of corporations, rulings on the use of corporate names, the collection and dissemination of information on federal companies, and compliance and enforcement activities related to the statutes it administers. This program's activities mostly affect Canadian businesses, not-for-profit organizations and other corporate entities.
Expected Result Performance Indicator Target Performance Status
Federally incorporated companies comply with corporate laws and regulations. Percentage of federally incorporated corporations that comply with statutory filing requirements 80% 84% of federally incorporated corporations complied with statutory filing requirements resulting in greater performance than the established target. This is an increase of 2% as compared to 2010–11.
Businesses have timely and reliable access to incorporation information and services. Percentage of published Corporations Canada service standards that are met or exceeded 90% 96% of service standards were met or exceeded, which is the same percentage as 2010–11.
Corporations Canada's key services are available online and delivered to businesses electronically. Percentage of transactions for key services completed online 80% 98% of certificates of incorporation and 93% of results for annual returns were completed online, exceeding the target. This is up 3% and 7% from 2010–11 reflecting the business and legal communities' increased use of online tools over the years. This target will be reviewed in the future.
Program Sub-Activity
Investment Review
Description:
The Investment Canada Act provides for the review of significant investments in Canada by non-Canadians in a manner that encourages investment, economic growth and employment opportunities in Canada and to provide for the review of investments that could be injurious to national security. This program implements the provisions of the Act by ensuring that the Minister of Industry has the information needed to determine whether an investment is likely to be of net benefit to Canada or whether there are reasonable grounds to believe that an investment could be injurious to national security. This is accomplished by processing notifications filed by investors and reviewing transactions to ensure their compliance with the Act.
Expected Result Performance Indicator Target Performance Status
Timely processing of foreign investment notifications and applications filed for review by foreign investors under the Investment Canada Act Median time required to certify notifications 6 days The median time to certify notifications in 2011–12 was 5 days, a decline from 4 days in 2010–11 but the same as the 2009–10 result.
Median time required to process applications 55 days This target was not met as the median time to process applications in 2011–12 was 74 days, a decline from 69 days in 2010–11. This reflects, in part, the larger, more complex and complicated investment transactions under review.
The threshold for the transportation, finance and uranium sectors was increased from $5 million to $312 million in 2009. These smaller investments which require less time to review are no longer subject to review. Also, foreign investors are acquiring larger Canadian business. The average asset value of reviewable investments in 2008–09 was $766 million. This rose to $1.34 billion in 2009–10.
Program Sub-Activity
Intellectual Property
Description:
This program administers Canada's system of intellectual property (IP) rights, namely patents, trademarks, copyrights, industrial designs and integrated circuit topographies. The Canadian Intellectual Property Office (CIPO) grants and registers IP rights, legally recognizing certain endeavours of originality and creativity. It also disseminates information related to these rights to businesses, educational institutions and Canadians. CIPO's role is to ensure that IP contributes to an acceleration of Canadian economic development and that the benefits of the IP system accrue to Canadians. This program is entirely financed through a revolving fund and is fully cost recovered from client fees. Its clients include foreign and Canadian applicants for IP protection, users of IP information and the Canadian business community.
Expected Result Performance Indicator Target Performance Status

Footnotes

Footnote 18

Results presented are for the 2010 calendar year only. Results for 2011 will be presented in next DPR once data is available in late 2012.

Return to footnote 18 referrer

The delivery and quality of intellectual property (IP) services respond to client needs and expectations. Percentage of clients satisfied with the Canadian Intellectual Property Office's services 80% The performance data for this indicator is unavailable.
The National Client Satisfaction Survey (NCSS) was not delivered in 2011-2012 as CIPO was in the process of re-developing its approach to customer engagement to focus on IP owners. As the NCSS was predominantly directed at IP intermediaries, it was decided not to deliver the survey.
Awareness and use of IP by CanadiansFootnote 18 The number of domestic IP filings in Canada 25,131 There were 25,850 domestic IP filings which exceeded the target. This is a 5% increase over the 2009 results.
The number of international Canadian IP filings 28,893 There were 31,703 international Canadian IP filings which was greater than the established target. This represented a 25% increase over the 2009 results.
Due to the decline in global economic activity in 2008 and 2009, international Canadian IP filings decreased by 4% and 15% respectively. However, as global economic activity began to rebound in 2010, so did international Canadian IP filings, which increased by 25%.
Program Sub-Activity
Internal Trade Secretariat
Description:
The Agreement on Internal Trade (AIT) is an intergovernmental trade agreement signed by Canadian first ministers; it came into force in 1995. The purpose of the AIT is to reduce and eliminate, to the extent possible, barriers to the free movement of persons, goods, services and investment within Canada and to establish an open, efficient and stable domestic market. The Internal Trade Secretariat provides administrative and operational support to the Committee on Internal Trade, to its Chair and to other committees or working groups established under the AIT or by the committee. It works closely with government officials to ensure the effective implementation of the AIT. The Secretariat supports the Committee on Internal Trade in preparing the reports, compiling and disseminating information from parties and ensuring appropriate support for the dispute resolution process. As a neutral third party, the Secretariat has facilitated ongoing negotiations to broaden and deepen the scope of the AIT. The work requires close and continuous contact with federal, provincial and territorial governments to facilitate the smooth and effective operation of the committees and working groups. The Secretariat plays an important role in assisting parties to fully implement the AIT, to pursue negotiations mandated by the AIT and to meet their outstanding obligations under the AIT. All parties share the Secretariat's operating costs. The federal government's share of the Secretariat's budget is 50 percent, which is paid by Industry Canada through a grant.
Expected Result Performance Indicator Target Performance Status
The Internal Trade Secretariat (ITS) provides high-quality administrative support to the Committee on Internal Trade in its efforts to strengthen internal trade. Industry Canada helps the ITS achieve these goals through funding and participation in ITS Board of Directors' activities. Stakeholder satisfaction with the ITS's services 8 out of 10 performance rating As no evaluation of the ITS was conducted during the past year, there is no data available for this indicator. The last evaluation of the ITS was conducted in March 2011 and found a 100% approval rating among the stakeholders interviewed.

Program Activity: Spectrum, Telecommunications and the Online Economy

Program Description

This program maximizes the public benefits of radio spectrum by allocating it efficiently and contributes to the orderly evolution of information and communication technologies, telecommunications networks and the online economy. This ensures that Canadians can develop, use and benefit from them domestically and internationally. It achieves this by developing and administering domestic regulations, economic framework policies, procedures and standards that govern Canada's radiocommunication and telecommunications industries and online economy. This program also promotes global telecommunications through the development of international treaties and agreements and helps facilitate international online trade and commerce through participation in international bilateral and multilateral forums.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions) Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
87.7 95.6 91.4 703 672 31
Table: Spectrum, Telecommunications and the Online Economy
Expected Result Performance Indicator Target Actual Results
Canada's radiocommunication and telecommunications infrastructure and online economy are governed by an effective policy and regulatory framework. Number of policies, legislation and regulations developed, updated or reviewed to strengthen the policy and regulatory framework 5 Industry Canada developed, updated or reviewed nine policies, legislation and regulations including foreign investment restrictions in the telecommunications sector, the policy and technical framework for the Mobile Broadband Services (700 MHz) and Broadband Radio Service (2500 MHz), the Moratorium on the assignment of Channel 51 to TV stations and the proposed regulations for the anti-spam legislation.
Performance Summary and Analysis of Program

By delivering on commitments associated with this program activity, Industry Canada has helped advance radiocommunications, telecommunications and regulations to protect the online economy.

During 2011–12, Industry Canada undertook a number of policy, legislative and international actions to support effective and efficient telecommunications industry, spectrum management, and the online economy. The consultations for a policy and technical framework to license spectrum in both the 700 MHz and 2500 MHz bands were completed and the corresponding decisions were published in March 2012. Auctioning these bands will support new mobile services in Canada, as well as promote sustained competition, robust investment and the availability of advance wireless services for all Canadians, including those in rural areas of Canada. Industry Canada also negotiated treaty revisions at the World Radiocommunication Conference resulting in a worldwide regulatory framework to meet the changing needs of spectrum for the next three years and a commitment to study the need for additional spectrum for mobile broadband.

Furthermore, the Department worked to protect the privacy and safety of Canadians in the online marketplace. Industry Canada advanced amendments to the Personal Information Protection and Electronic Documents Act with the tabling of the Safeguarding Canadians' Personal Information Act and consulted on the proposed regulations for the anti-spam legislation. To offer further protection from spam, the Spam Reporting Centre will be hosted by the Canadian Radio-television and Telecommunications Commission (CRTC) and is expected to be operational in 2013.

As a result of the Strategic Review, the Department is focusing on consolidating regional spectrum management teams and adopting best practices across the country in order to allow Industry Canada to increase efficiency without affecting service delivery.

Lessons Learned

Recognizing the growing mobile service demand for spectrum, the Department began developing a multi-year plan to make spectrum available and provide incentives and legislation for its efficient use to ensure demand does not exceed available spectrum. Specifically, the Department undertook a research study into demand for radio spectrum for a variety of services, including mobile broadband. The results of the study were published June 1st, 2012. Finally, as discussed above, Industry Canada published decisions regarding the need for spectrum caps, combined or separate auctions, and the sequence of the auctions for the 700 and 2500 MHz bands, in order to ensure a fair process.

Program Sub-Activity
Spectrum Management and Telecommunications
Description:
The goal of this program is to ensure the orderly and secure evolution of Canada's radio spectrum and telecommunications infrastructure through the development of a coherent regulatory framework, promotion of competition, establishment of sufficient regulation, enforcement of domestic and international requirements, and negotiation and promotion of international standards and treaties. This provides Canadian industries with the favourable conditions they need to develop, introduce and market leading technologies and services. The radio spectrum is a finite resource and can accommodate only a limited number of simultaneous users. Management of the radio spectrum requires careful planning to maximize its value for public and private services. This is achieved through the development and implementation of operational policies, procedures, processes, technical standards and international treaties. The program also provides for an assessed annual contribution to the International Telecommunication Union (ITU), in which Canada participates as a Member State. Canada participates in ITU meetings to influence the Union's direction and decision making in support of Canadian interests. Another goal of this program, which has the lead role for emergency telecommunications in Canada, is to make telecommunications services accessible to Canadians and to ensure that the public derives maximum benefit from their use.
Expected Result Performance Indicator Target Performance Status
Canadians have sufficient access to essential spectrum. Percentage of spectrum requests that are accommodated through licensing 98% 100% of spectrum requests were accommodated through licensing which exceeded the target.
Canadian interests and requirements pertaining to radiocommunications and telecommunications are reflected in international agreements and standards. Percentage of Canadian objectives/proposals represented in international agreements 100% This target was mostly met as at least 90% of Canadian objectives and proposals were represented in international agreements developed in 2011–12. Canada's positions, contained in four contributions, were developed prior to the World Radiocommunications Conference 2012 and were reflected in the conference outcomes and the new regulations, as were the majority of Inter-American Proposals that Canada signed on to. The Mutual Recognition Agreement on Equivalency of Technical Requirements in APEC TEL 44 accepted over 90% of Canadians inputs into the draft agreement.
Telecommunications services are available to first responders in times of emergency. Percentage of telecommunications carriers with emergency management plans 90% More than 90% of carriers had emergency plans in 2011–12, which include plans to mitigate network outages and respond to emergency situations. This performance meets the established target.
Program Sub-Activity
Electronic Commerce
Description:
This program strengthens Canadians' confidence in the marketplace by protecting individual privacy and curbing Internet threats. The successful integration of e-business into the Canadian economy is dependent on the level of trust and confidence businesses and consumers have in the digital environment. This program clarifies marketplace rules through the development of legal and policy frameworks in the areas of privacy protection, online security and appropriate Internet content and removes barriers to the use of e-commerce in conjunction with the private sector. To improve market efficiency, the program promotes the conduct of e-business across all sectors of the economy and helps facilitate online trade and commerce internationally through the sharing of best practices and international benchmarking.
Expected Result Performance Indicator Target Performance Status
The privacy and security of personal information and Internet-based trade and commerce are protected. Percentage of Canadian businesses that are aware of their responsibilities and compliance obligations under Canada's privacy laws 65% The most recent Canadian Businesses and Privacy-Related Issues survey, released in 2010, showed that 78% of businesses surveyed reported a moderate to high awareness of their responsibilities under Canada's privacy laws. This result exceeded the set target.
Percentage of Canadians buying and selling online 15% According to the Canadian Internet Use Survey 2010, 19% of Internet users sold goods or services online compared to 13% of home Internet users who sold goods or services online in 2009. This result exceeded the set target. Note that the survey changed from percentage of home Internet users in 2009 to percentage of Internet users in 2010.
Moreover, 41% of Canadians were buying online in 2010 compared to 39% in 2009.
Percentage of Canadians using the Internet 86% According to the Canadian Internet Use Survey 2010, 80% of Canadians used the Internet, which is the same percentage as 2009 and 7% higher than in 2007.
According to ComScore in 2011, Canadians online spent more time on the Internet than any other country in the world. Canada's internet users spent an average of 45.6 hours a month online, almost double the worldwide average of 24.4 hours. In 2010, Canada's internet users spent an average of 43.5 hours a month online.

Program Activity: Consumer Affairs

Program Description

This program gives consumers a voice in the development of government policies and enables them to be effective marketplace participants. It is part of the Department's consumer affairs role under the Department of Industry Act, which directs the Minister to promote the interests and protection of consumers. Through research on and analysis of marketplace issues, the program supports both policy development and the intergovernmental harmonization of consumer protection rules and measures. It contributes to effective consumer protection through collaboration with provincial and territorial consumer protection agencies under Chapter 8 of the Agreement on Internal Trade and with other governments through the Organisation for Economic Co-operation and Development's Consumer Policy Committee. Industry Canada, through this program, identifies important consumer issues and develops and disseminates consumer information and awareness tools. These consumer protection information products and tools are developed either by the program itself or in collaboration with other consumer protection agencies. Finally, the program provides financial support to not-for-profit consumer and voluntary organizations through the Contributions Program for Non-profit Consumer and Voluntary Organizations. The purpose of this support is to encourage the organizations to reach financial self-sufficiency and to assist them in providing meaningful, evidence-based input to public policy in the consumer interest.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions) Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
4.6 5.0 4.8 23 22 1
Table: Consumer Affairs
Expected Result Performance Indicator Target Performance Status
Citizens and policy-makers are aware of consumer issues in the Canadian marketplace. Number of instances per year where consumer research and/or analysis contributes to consumer policy discussions 3 Consumer research and/or analysis contributed to consumer policy discussions in three instances in 2010–11. Joint research with provincial and territorial governments was carried out regarding approaches for addressing concerns about unfair consumer contract terms as well as best practices in developing administrative monetary penalties for consumer legislation. Industry Canada also examined ways to improve access to university research on consumer interest and to foster effective networking.
Number of visitors accessing information products on websites managed by the Office of Consumer Affairs (OCA) 1.65 million In 2011–12, websites managed by the Office of Consumer Affairs had 1.17 million visitors. This includes visitors to the following websites: the Canadian Consumer Handbook, the Consumer Measures Committee, the Consumer Policy Research Database, ConsumerInformation.ca, the anti-spam website, complaint courier, and the Office of Consumer Affairs website. Demand for the anti-spam website did not reach expected levels, as the launch of the spam reporting centre was delayed.
Number of instances per year where research and analysis performed by consumer organizations supported by the OCA's Contributions Program for Non-Profit Consumer and Voluntary Organizations contribute to policy discussions or media coverage 12 There were 13 instances of research and analysis performed by supported consumer organizations contributing to policy discussions or media coverage. Research was cited 10 times for policy discussions in legislative committees of the Parliament of Canada, in the Legislative Assembly of Ontario, and in the National Assembly of Quebec. There were three instances of significant media coverage related to research reports on mobile premium messaging, retail discounts, and buying local foods.
Performance Summary and Analysis of Program

Industry Canada, throughout 2011–12, has helped ensure that the interests of Canadian consumers were better protected and that consumers had the tools and information required to allow them to make informed decisions.

The Department updated and expanded the Canadian Consumer Handbook to include information on the safe disposal of electronic waste, and on the various types of insurance and insurance coverage available in the Canadian marketplace. Industry Canada also implemented a communications strategy for the new anti-spam legislation, including a website and new information products.

Industry Canada also worked in collaboration with provincial and territorial governments to research best practices in the effective use of administrative monetary penalties in consumer laws, examine standards for more readable public utility bills, develop a more comprehensive recall system, and create consumer education tools to help Canadians build their buying skills.

Lessons Learned

Over the past year and with the passage of anti-spam legislation, clarity was needed to ensure that consumers and businesses understand their rights and responsibilities. Industry Canada has focused on promoting general awareness of the proposed law and helping Canadians learn to protect themselves from spam and other electronic threats.

Program Activity: Competition Law Enforcement

Program Description

The objectives of this program include maintaining and encouraging competition, promoting the efficiency and adaptability of the Canadian economy and protecting competitive markets. This program also ensures that all businesses have equitable opportunities to participate in the Canadian economy, which provides consumers with competitive prices and product choices. The Competition Bureau, an independent law enforcement agency, is responsible for the administration and enforcement of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act. It seeks to ensure that businesses and individuals comply with the legislation under its jurisdiction through negotiated settlements, consent agreements and, where appropriate, the prosecution of anti-competitive conduct through litigated proceedings. It protects competitive markets by detecting, disrupting and deterring anti-competitive conduct. The Competition Bureau also encourages reliance on market forces. It conducts market studies, provides advice to government legislators and policy-makers, and intervenes and/or makes representations before federal and provincial boards, commissions and tribunals to encourage competition as a means of achieving policy or regulatory objectives.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions) Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
47.7 50.2 49.9 432 400 32
Table: Competition Law Enforcement
Expected Result Performance Indicator Target Performance Status
Canadian markets are competitive. Estimated dollar savings per annum to consumers from Competition Bureau actions that stop anti-competitive activity $330 million In 2011–12, Competition Bureau actions resulted in an estimated savings of approximately $910 million to Canadian consumers. This is an improvement from 2010–11, where the result was $484 million total. The increase is a result of large complex and international files with high volumes of commerce.
Approximate percentage of Canada's gross domestic product (GDP) subject to market forces No less than 82% Approximately 82% of Canadian GDP is subject to market forces. The Competition Bureau undertook a study of the Canadian economy, which was adjusted for sectors that are regulated and not under the purview of the Competition Act. There is no change between the current result and the results of the past three years.
Businesses/individuals change their anti-competitive conduct following compliance interventions conducted by the Competition Bureau. Percentage of recidivists Less than 5% Competition Bureau cases resolved during the reporting period did not involve recidivists.
Performance Summary and Analysis of Program

Industry Canada, through the Competition Bureau engaged in enforcement actions targeting abuse of dominance, domestic cartels, false or misleading representations, and timely and effective merger reviews. In 2011–12, two companies were fined a total of $12.5 million, after pleading guilty to criminal charges for fixing the price of polyurethane foam, the first conviction under the amended cartel provisions of the Competition Act. The Bureau also filed an application with the Competition Tribunal to prohibit a proposed joint venture between two airlines that would monopolize important Canada/United States routes, which would have led to increased prices and reduced consumer choice.

In June 2011, the Bureau reached an agreement with a Canadian communications service provider to stop making misleading representations about the prices offered for its services, including home phone, Internet, satellite TV and wireless. The company was required to pay an administrative monetary penalty of $10 million, the maximum allowed under the Competition Act, for hiding additional mandatory fees from consumers in fine print disclaimers.

The Bureau continues to demonstrate effective implementation and enforcement of the 2009 amendments to the Competition Act, with its ongoing efforts in the case before the Competition Tribunal against two credit card companies where price maintenance is alleged.

Lessons Learned

In 2011–12, the Bureau implemented an initiative to actively monitor merger and acquisition transactions in the Canadian marketplace. Driven by the amendments to the Competition Act, this initiative reduced the time for the Bureau to challenge a completed merger from three years to one year. The amendments also put in place an annual indexing mechanism which has increased the minimum transaction value for which parties are required to notify the Bureau of a merger or acquisition. These changes may increase the likelihood of non-notifiable mergers raising substantive competition issues and impact the operating costs of the Bureau through decreased revenues (i.e., fewer notifiable transactions) and increased costs associated with reviewing more non-notifiable transactions. To address the reduced timeframe, the Bureau implemented a new monitoring process to help identify completed transactions that may raise serious competition concerns well before the one-year period expires and allow the Bureau to take appropriate action, where necessary.

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Results and Performance by Strategic Outcome (continued)

Strategic Outcome 2: Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy

Strategic Science and Technology (S&T) investments remain key drivers in the Canadian economy. With the current global and financial context, which could hinder corporations' abilities to sell their products and make program repayments, Industry Canada placed increased focus on firm-level financial analysis to foster innovation and commercialization of new technologies. This is fundamental to improving Canada's overall productivity and enhancing the country's competitiveness, and was accomplished through the following Program Activities:

  • Science, Technology and Innovation Capacity;
  • Information and Communication Technologies Research and Innovation; and
  • Industrial Research and Development Financing
Figure 6: Distribution of spending by Program Activity under the Strategic Outcome Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy

Figure 6: Distribution of spending by Program Activity under the Strategic Outcome Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy

Description of Figure : Distribution of spending by program in the area of Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy

Figure 6: Distribution of spending by program in the area of Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy
Science, Technology and Innovation Capacity Research and Development Financing Information and Communication Technologies Research and Innovation
54% 41% 5%

Figure 7: Financial ResourcesFootnote 19

Figure 7: Financial Resources

Description of Figure : Figure 7: Financial Resources

Figure 7: Financial Resources ($ Millions)
  2009–10 2010–11 2011–12
Planned 652.1 582.7 735.8
Total Authorities 1,805 694.5 906.3
Actual 1,597.6 546.8 818.6

Figure 8: Human ResourcesFootnote 20

Figure 8: Human Resources

Description of Figure

Figure 8: Human Resources (FTEs)
  2009–10 2010–11 2011–12
Planned 683 732 534
Actual 646 649 559

Footnotes

Footnote 19

Economic Action Plan initiatives still in effect in 2011–12 (Knowledge Infrastructure Program, Institute for Quantum Computing, Canada Foundation for Innovation and Ivey Centre for Health Innovation and Leadership) are included in the chart above and are also discussed in a separate section of this report titled Economic Action Plan.

Return to footnote 19 referrer

Footnote 20

The downward trend between fiscal years 2010–11 and 2011–12 is due to realignments between Strategic Outcome 2 and 3. Please refer to Figure 11 to see the offsetting upward trend.

Return to footnote 20 referrer

Table: Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy
Program Activity 2010–11 Actual Spending ($ millions)Footnote 21 2011–12 ($ millions) Alignment to Government of Canada Outcomes
Main Estimates Planned Spending Total Authorities Actual Spending

Footnotes

Footnote 21

Actual Spending includes 2009 Economic Action Plan (EAP) initiatives and is consistent with the Public Accounts. However, the numbers vary from what was published in the 2010–11 Departmental Performance Report, where the numbers for EAP were provided in a separate table.

Return to footnote 21 referrer

Footnote 22

The variance between Planned and Actual Spending is mainly related to deferred funding from the previous year received in Supplementary Estimates 2011–12 for the Knowledge Infrastructure Program to implement the Government of Canada's decision to extend the deadline for key infrastructure programs to October 31, 2011.

Furthermore, total authorities and actual spending exclude amounts deemed appropriated to Shared Services Canada.

Return to footnote 22 referrer

Footnote 23

Additional funding was reallocated in-year to maintain Shirley's Bay Campus infrastructure and operational requirements. The Communications Research Centre also accessed through Supplementary Estimates royalties which had been collected in the previous year from its intellectual property.

Furthermore, total authorities and actual spending exclude amounts deemed appropriated to Shared Services Canada.

Return to footnote 23 referrer

Footnote 24

The variance between planned and actual spending is mainly due to funds unspent in 2011–12 by the Technology Partnerships Canada (TPC)/Strategic Aerospace and Defence Initiative (SADI), Automotive Innovation Fund, and Aerospace Innovation programs. Further details can be found in the Research and Development Financing section of this report.

Return to footnote 24 referrer

Science, Technology and Innovation CapacityFootnote 22 1,068.9 260.7 265.7 445.6 440.8 Economic Affairs: An Innovative and Knowledge-based Economy
Information and Communication Technologies Research and InnovationFootnote 23 46.1 38.2 38.2 46.4 44.9
Research and Development FinancingFootnote 24 247.0 357.3 431.9 414.3 332.9
Total 1,362.0 656.2 735.8 906.3 818.6

Summary of Performance

Strategic Outcome 2
Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy
Performance Indicators Targets 2011–12 Performance
Canada's rank among G7 countries in public performed research and development as a percentage of gross domestic product 1st Canada was 2nd in the G7 in public-performed research and development as a percentage of GDP, which was 0.88% in 2010. While public-performed research spending as a percentage of GDP has remained fairly stable in Canada over the past four years, it has increased in other countries such as Germany, the current first-place country, and France. Increasing portions of GDP are represented in both countries by higher education spending on research and development and government intramural expenditure on research and development while in Canada the figures in both cases have remained stable. Canada remains the 1st-place country in the G7 for higher education spending on research and development.
Canada's rank among G7 countries in business performed research and development as a percentage of gross domestic product 6th Canada was 6th in the G7 in business-performed research and development as a percentage of GDP, with a total of 0.91% of GDP being from this area in 2010. This is a decline from 2009 when 0.99% of GDP was from business-performed research and development and below the average of the previous three years (1.02%).
Canada's labour productivity (real gross domestic product per hour worked) $44.29 Canada's real labour productivity was $45.28 for 2011. This is an improvement of 1.0% from 2010. Real GDP increased, while actual hours per week per job decreased. Increased labour productivity means that, as a whole, Canadians were able to create more economic value with fewer hours of work.

Program: Science, Technology and Innovation Capacity

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy
Program Description

This program supports the Minister of Industry and the Minister of State (Science and Technology) in their science, technology and innovation responsibilities. It sets the strategic direction for the policies and programs that support and stimulate research, development and innovation in Canada. In collaboration with portfolio partners, other government departments and external stakeholders from the private and public sectors, the program fosters an environment that is conducive to innovation and promotes scientific excellence.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions)Footnote 25 Human Resources (FTEs)Footnote 26
Planned Spending Total Authorities Actual Spending Planned Actual Difference

Footnotes

Footnote 25

The variance between planned and actual spending is mainly related to deferred funding totalling $183.0 million from the previous year for the Knowledge Infrastructure Program to implement the Government of Canada's decision to extend the deadline for key infrastructure programs to October 31, 2011.

Return to footnote 25 referrer

Footnote 26

In an effort to better define and improve reporting on the Department's strategic outcomes and program activities, some FTEs previously reported under Internal Services are now being accounted for under Science, Technology and Innovation Capacity, as their work directly supports this program, resulting in the higher actual FTEs.

Return to footnote 26 referrer

265.7 445.6 440.8 69 100 31
Table: Science, Technology and Innovation Capacity
Expected Result Performance Indicator Target Actual Results
Canada's S&T capacity is developed. Canada's rank in federal investment in higher education research and development (HERD) as a percentage of GDP Leadership position in the G7 Canada's government funding of HERD stood at 0.43% of GDP for 2008, putting Canada in 1st place among G7 countries. France and Germany ranked 2nd and 3rd with 0.38% and 0.36%, respectively.
Canada invests in skilled workers to drive innovation. R&D workers in the workforce Year-over-year increase The latest figures on personnel engaged in R&D are for 2009, the first year following the generally accepted start of the global financial crisis. In 2009, the number of R&D personnel in Canada stood at 234,660 FTEs, 7.6% below its 2008 level. The business sector accounts for 64% of Canada's total R&D personnel, and the overall decline witnessed in 2009 is mainly driven by an 11.8% decline in business sector R&D personnel.
Performance Summary and Analysis of Program

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy Industry Canada continued to strengthen the effectiveness of its investments in S&T as outlined in the Government of Canada's S&T Strategy, Mobilizing Science and Technology to Canada's Advantage, by advising on program development. The Department contributed to advancing Canada's knowledge, people and entrepreneurial advantage through contribution agreements with organizations such as Genome Canada, Canada Foundation for Innovation, Canadian Network for the Advancement of Research, Industry and Education (CANARIE). Working in concert with the granting councils and through targeted outreach with stakeholder groups, the Department contributed to supporting scientific excellence in Canada including the social sciences.

The Department also continued to provide secretariat support to the Science, Technology and Innovation Council (STIC), an independent body that provides confidential advice to the Government of Canada, through the Minister of Industry and the Minister of State (Science and Technology). This advice helps inform government decisions on S&T and innovation policies and programs. STIC also produces biannual, public reports that measure Canada's S&T and innovation performance against international standards of excellence.

Private sector investment in R&D in Canada continues to lag behind other countries despite the Government of Canada's considerable investment in business R&D. Industry Canada considered and advised on the recommendations of Innovation Canada: A Call to Action – Expert Panel Report (October 2011) in the context of the government's overall priorities and economic agenda to provide key policy advice towards improving Canada's science, technology and innovation system. Budget 2012 included measures related to many elements of the Expert Panel's advice—including increasing support for high-growth companies, research collaborations, innovation procurement opportunities, and support to grow venture financing.

Lessons Learned

Industry Canada also welcomed and hosted a number of senior officials from various countries, including China, Japan, Finland, the United States and the United Kingdom. These meetings allowed the Department to share success stories of Canada's science, technology and innovation system, and also learn more about how other countries address challenges to better inform policy decisions at home.

Program Sub-Activity
Government Science and Technology Policy Agenda
Description:
This program supports science and technology (S&T) and innovation and aims to improve Canada's research and development capacity and excellence by developing and formulating policy frameworks to position S&T and innovation in the context of broader government policy. It also develops specific policies and programs to support highly qualified people, the direct and indirect costs of higher education research, and research infrastructure. This is accomplished through partnerships with various stakeholders, including other government departments (particularly science-based departments and agencies); through consultation with private sector stakeholders, universities and colleges, and provincial governments; and through international forums and collaborative relationships. This program also supports the activities of the Science, Technology and Innovation Council (STIC). STIC is an independent advisory body that provides the Government of Canada and the Minister with external policy advice on S&T and innovation issues. STIC regularly produces national reports measuring Canada's S&T performance against international standards of excellence. STIC's advice helps inform government policy development and decision making.
Expected Result Performance Indicator Target Performance Status
Consultation and collaboration with the federal science and technology (S&T) community and other key S&T players Number of federal science-based departments and agencies involved in the implementation of the government's science and technology strategy 20 A total of 22 federal science-based departments and agencies are involved in the implementation of the S&T Strategy. The Assistant Deputy Minister Committee on Science and Technology (ADMCST) is the coordinating committee of the S&T Strategy.
The ADMSCT has a broad membership comprised of 30 representatives from 22 science based departments and agencies, as well as central agencies, the granting councils and regional development agencies.
Number of external organizations consulted to advance Canada's S&T agenda 20 Industry Canada met with a total of 20 larger stakeholder organizations to discuss emerging issues and gather knowledge and insights that inform policy advice and advance Canada's S&T agenda.
Larger organizations included portfolio partners, other federal science based departments and agencies, foreign and provincial/territorial governments, higher education associations, heads of major science initiatives, large and small companies in the private sector, and other related stakeholders.
In addition to these larger organizations captured as part of this performance indicator, numerous other consultations occurred on an ad hoc basis, representing a broad spectrum of interests.
Number of S&T Advisory Committee meetings and range of topics discussed 3 The ADMCST met a total of three times in 2011–12.
The focus over the past year has been on specific policy issues of interest to the S&T community including: the Knowledge Infrastructure Program, the approval of proposals from the Council of Canadian Academies, discussions on new models of Open Innovation, the Review of Federal Support to Research and Development in Canada, and the revision of the Implementation Guide–Policy on Title to Intellectual Property Arising Under Crown Procurement Contracts.
Broader understanding of science underpinning S&T policy Number of Council of Canadian Academies reports under way that provide a basis for S&T policy 7 In 2011–12, the Council of Canadian Academies (CCA) worked on a total of 13 assessments within their funding agreement with the Government of Canada. Two of these were published and made available in 2011–12, and four more are expected to be published in 2012–13.
This exceeded the expected target due to the referral of several important assessment topics to the CCA.
Program Sub-Activity
Science and Technology Partnerships
Description:
This program supports the effective and efficient implementation of science and technology programs delivered by the Department and its portfolio partners. This involves working closely with the federal granting agencies within the Industry Portfolio and managing the federal contributions to the Canada Foundation for Innovation, the Canadian Institute for Advanced Research, CANARIE Inc., the Council of Canadian Academies, Genome Canada, the Trudeau Foundation, the Perimeter Institute for Theoretical Physics, Precarn Inc. and three centres of excellence, which are the Brain Research Centre, the Canada School of Energy and Environment, and the Heart and Stroke Foundation Centre for Stroke Recovery.
Expected Result Performance Indicator Target Performance Status

Footnotes

Footnote 27

For every $2 the granting council programs provide, industry and other funders will need to put in $1 worth of cash and/or in-kind contribution.

Return to footnote 27 referrer

Science and technology (S&T) partnerships between industry and academia are created and sustained. Value in dollars of cash and in-kind industrial and other contributions leveraged through granting councils' S&T industry partnership programs for which Industry Canada sits on governance bodies 2:1Footnote 27 The programs attracted a total of $3.20 from other sources for every $2.00 of federal funding largely exceeding the set target.
The target was established based on the programs' performance to date. The programs are newly established (within the last five years), and their performance in attracting contributions was affected by the economic downturn. Now that the economy has improved, the number of companies participating in the programs has increased more than anticipated.
Number of companies involved in granting councils' S&T industry partnership programs for which Industry Canada sits on governance bodies 120 A total of 283 companies were involved in granting council partnership programs in 2011–12. This is greater than the set target.
Federal programs are in place to attract and retain highly qualified students and researchers. Number of students and researchers supported through granting councils' S&T "people advantage" programs for which Industry Canada sits on governance bodies 3,460 A total of 3,343 students and researchers were supported in 2011–12 through the granting councils' "people advantage" programs for which IC sits on the governance bodies. The variance occurred as not all programs were fully subscribed, as some students and researchers may decline awards for a variety of reasons, and the Banting Post–doctoral Fellowship program is still ramping up to its full complement of 140 fellowships per year.

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Program Activity: Information and Communications Technologies Research and Innovation

Program Description

Through the Communications Research Centre (CRC), this program conducts research on advanced telecommunications and information technologies to ensure an independent source of advice for public policy and to support the development of new products and services for the information and communication technologies (ICT) sector. Research projects involve a combination of in-house activities, tasks performed for other government departments on a cost-recovery basis, and partnerships with industrial and academic organizations. The research performed provides insight into future technologies, which assists Industry Canada in developing telecommunications policies, regulations and program delivery; improves other government departments' ICT-related decision making; and closes the innovation gap by transferring new technologies to Canadian industry.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions)Footnote 28 Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference

Footnotes

Footnote 28

Additional funding, totalling $2.9 million was reallocated in-year to maintain Shirley's Bay Campus infrastructure and operational requirements. The Communications Research Centre also accessed through Supplementary Estimates $2.2 million of royalties collected in the previous year from intellectual properties.

Return to footnote 28 referrer

38.2 46.4 44.9 377 370 7
Table: Information and Communication Technologies Research and Innovation
Expected Result Performance Indicators Targets Actual Results
Industry Canada policy-making and program development sectors are made aware of new and emerging communication technologies and are provided with the technical information they need to make well-informed decisions. Number of new and emerging communication technologies for which Communications Research Centre Canada (CRC) has provided advice or input to Industry Canada for the development of policy, standards and regulations and for contributions to international forums (e.g. the International Telecommunication Union, or ITU) 10 new technologies for which advice is sought or for demonstration Advice on 13 new and emerging technologies was provided to policy, regulatory and standards bodies. This provided input to new spectrum auctions, new policies on shared spectrum, studies on interference in existing spectrum to assess the current regulations and demonstrations of how new technologies can impact the efficient use of spectrum. The technologies covered a wide range such as FM-FRS data technology for new public alerting options, Hybrid Broadband Broadcast technologies, Dynamic Spectrum Access and Cognitive radio technologies to new standards for 3D TV and loudness metering.
Canadian government departments and agencies (National Defence, Canadian Radio-television and Telecommunications Commission, Canadian Space Agency) are provided with the information they need to make well-informed decisions on new communication technologies. Level of funding received from other federal government departments to conduct research and testing on communication technologies $7 million A total of $8.3 million was received from other federal government departments, with the majority of funding coming from the Department of National Defence (DND) ($7.1 million) and the Canadian Space Agency (CSA) ($0.82 million). The balance ($0.38 million) resulted from smaller project funding from Public Safety, the Royal Canadian Mounted Police, the National Research Council, Natural Resources Canada, the Canadian Radio and Telecommunication Council, and the Canadian Border Services Agency.
Canadian telecommunications companies realize industrial and economic benefits from CRC intellectual property (IP) and technology transfer. IP revenue and contracting-in money received by CRC $2 million A total of $3.3 million was received in IP revenue and contracting. Of this amount, $1.93 million was received as IP revenue and $1.38 million from contracting revenue for 34 contracts.
The target was exceeded due to successful licensing auctions and the unplanned sale of a number of patents.
Performance Summary and Analysis of Program

CRC's mandate of providing impartial technical advice for policy and regulatory development in 2011–2012 has focused on providing technical assessments as input to the upcoming 700, 2500-4900 MHz auctions, assessing the interference and other impacts of Digital TV broadcasting, and assessing new technologies such as Dynamic Spectrum Access and Cognitive Radio that can have an impact on reducing the congestion in the heavily used bands. As well, CRC continues to develop new technology to support the monitoring and surveillance of new and emerging interference challenges such as Global Positioning System (GPS) Jammers.

CRC continues to support industry and develop innovative technologies to address wireless communication gaps and leads in the development of the next generation of Search and Rescue Satellite Aided Tracking (SARSAT) using Medium Earth Orbit Satellites (MEOSAR) to detect and locate aviators, mariners, and land-based users in distress.

CRC continues to support, via licensed technology, a number of Canadian companies in the area of Software Defined Radio and demonstrated open SmartPhones working over Public Safety networks and licensed a new digital mobile broadcast TV (CRC-DVB Detect) technology. CRC also released the first available Cognitive Radio Networking platform to universities all over the world and partnered with Indian researchers who used that technology to bring broadband WiFi to rural villages in India.

Volume fluctuations have long been a concern for television viewers, but now, with a standardized way to measure loudness and a recommended target loudness level, the volume changes between commercials and programs and between television channels will soon be an irritant of the past. Industry Canada, through the Communications Research Centre (CRC) contributed to the standardization of loudness metering by the International Telecommunication Union—Radiocommunication. The innovative effort has had a great impact on the industry, with key organizations in the broadcast industry continuing to update their recommended practices or regulations to incorporate the use of the meter. This led to the Communications Research Centre (CRC) of Industry Canada (IC) bringing home its third Emmy Award from the U.S. National Academy of Television Arts & Sciences.

Lessons Learned

During 2011–12, CRC reviewed as part of an evaluation its activities in the wireless, multi-media, radio fundamentals and networks areas. The evaluation confirmed and reinforced the validity of its main core R&D areas. Some R&D areas were refocused or aligned with retained research activities, including radio transmission, satellite and broadcast, antenna design, and integrated electronics.

Additionally, to address the aging campus infrastructure, CRC will be reducing its footprint and has strengthened its team responsible for managing infrastructure and buildings, and performed preventative work on the common and highest-risk buildings. It has also created a health and safety portfolio of Campus capital projects focusing on key projects that represent the highest liability for the Department. In addition, in 2011–12, CRC was able to invest an additional $3.7 million in campus improvements over and above its previously planned capital allotment of $1 million.

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Program Activity: Research and Development Financing

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy
Program Description

This program helps Canadian businesses increase research and development (R&D) by supplementing private sector investment in R&D and innovation projects with additional funds in the form of repayable contributions. Agreements normally specify which funding will come from the federal government and which will come from other sources. Projects are chosen based on their impact on the Canadian economy and their potential for maximizing innovation capacity and expertise and for creating and retaining jobs in Canada.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions)Footnote 29 Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference

Footnotes

Footnote 29

The variance between Planned and Actual Spending is mainly due to funds unspent in 2011–12 in three major programs:

  • TPC/Strategic Aerospace and Defence Initiative: The Aerospace and Defence sector was affected again this year by the volatility in the global economy. This resulted in a direct impact on both the number of projects approved by the program and the level of spending on existing projects.
  • Automotive Innovation Fund (AIF): Some automotive companies encountered operational challenges resulting in project activity timelines being revised by $23 million. As well, $5 million in savings as part of the federal government's Strategic Review were identified related to the costs of some activities. The total variance related to AIF is $28 million.
  • The Aerospace Innovation program decreased its expenditures during the years hardest hit by the recession by delaying non-essential spending. This included several project-related expenditures totalling $6 million that could be delayed without impacting the overall program's schedule.

Return to footnote 29 referrer

431.9 414.3 332.9 88 89 1
Table: Research and Development Financing
Expected Result Performance Indicator Target Actual Results

Footnotes

Footnote 30

As of March 31, 2012, SADI had disbursed $379 million (cumulative). Disbursements are tracked against an identified target for TPC on a cumulative basis (over the life of the program). As of March 31, 2012, $3.15 billion (91 percent) was disbursed of the total $3.46 billion of authorized assistance.

Return to footnote 30 referrer

Footnote 31

The target is based on the average of individual targets for Automotive Innovation, SADI and TPC. Automotive Innovation was originally set at $2, but later updated to $5. The target for R&D Financing was not updated and should have been set at $3.

Return to footnote 31 referrer

Investment in leading-edge R&D in targeted Canadian industries Dollar value of disbursements to firms for R&D activities $361.4 million Industry Canada disbursed a total of $327.5 million to firms for R&D activities, including $228.4 million to support innovations in the aerospace and defence sector and $67.1 million in the automotive sectorFootnote 30. This 2011–12 total compares to disbursements of $8.6 million (AIF), $62 million (Aerospace Innovation), and $161.2 million for SADI and TPC in 2010–11. In general, companies identified more cost-effective ways of undertaking eligible activities, including R&D, lowering the result versus the target.
Dollars of investment leveraged per dollar of Industry Canada investments in R&D projects $2.00Footnote 31 A total of $3.59 of private-sector dollars of investment was leveraged by Industry Canada in R&D projects. Across relevant programs, Automotive Innovation leveraged $6.88, SADI leveraged $2.12, and TPC leveraged $1.77 per dollar of Industry Canada investment. The $3.59 leveraged per dollar of Industry Canada investment is an improvement from the previous year's result of $3.19.
Development and commercialization of new and improved products, processes and services Nature and extent of new and improved technologies developed Description of technologies developed and commercialized Investments under SADI and TPC developed and commercialized products, services and processes. For example, recipients developed sonar for submersible use, brought to market products that monitor goods going through global supply chains, and developed an adaptable aircraft speech recognition system.
Performance Summary and Analysis of Program

In 2011–12, the Department has helped increase the capacity of Canadian firms through investments in research and development activities.

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy Industry Canada, through Automotive Innovation Fund (AIF) investments, is contributing towards securing Canada's automotive footprint by fostering innovative automotive R&D in Canada. In 2011–12, two three-year contribution agreements were signed. The first agreement is to assemble more fuel-efficient models, increase overall production, and manufacture battery-electric vehicles. The second agreement is to develop and commercialize products focused on light-weight, renewable materials, and more energy-efficient systems. As part of its Strategic Review, Industry Canada is reducing funding available under the AIF to better align the program with current demand for the types of large-scale research projects eligible for AIF funding.

The Department participated in the Canadian Networking Aeronautics Program for Europe (CANNAPE) to promote R&D collaboration in aerospace between Canadian and European companies and researchers and organized two workshops, one in Europe and one in Canada, to bring together aerospace researchers and other stakeholders to discuss potential partnerships and joint projects.

While some applicants to existing programs placed their proposals on hold due to the impact of the recession, Industry Canada was still able to approve a variety of projects in 2011–12 including one on nanotechnology. This Strategic Aerospace and Defence Initiative (SADI) project, which involves collaboration with graduate-level engineering students from the University of Toronto, will result in the creation of next-generation metal alloys for various industrial, aerospace and defence applications that are more robust and free from toxic beryllium copper.

IC's earlier R&D investments through Technology Partnerships Canada contributed to a variety of products that began to be commercialized in 2011–12. These included a quantum computer processor that can be used for a broad spectrum of information intensive science and engineering applications ranging from biotechnology and nanotechnology to industrial chemistry; and an easy-to-use, adaptable and supportable speech recognition system allowing commercial and military pilots to execute a variety of commands by voice activation.

Lessons Learned

Industry Canada conducted an evaluation of SADI in 2011–12 and found that the program addresses a need for R&D financing in the aerospace and defence industry. Limited project uptake was noted and explained as being mainly due to the global economic recession. The evaluation recommended to improve program awareness, and the Department has since simplified the SADI application process, developed an application template, upgraded the SADI Proposal Development Guide, reduced the time required for application approvals, and developed a SADI Outreach Strategy and Annual Plan.

Industry Canada considers risk management a key component of managing R&D support programs, as it contributes to improved decision-making, better allocation of resources, and ultimately improved benefits for Canadians. For SADI and TPC, the Department developed an integrated risk management approach that captures risk elements at the corporate, program and project levels. A Risk Management Committee meets quarterly to discuss high risk levels and mitigation strategies, and provides a report to the Deputy Minister. Throughout the year, the Department also performed a total of 27 SADI and TPC project audits: five cost audits, 13 revenue audits and nine lobbyist audits. Projects were selected for audit based on a risk analysis of the portfolio, and were assessed for risk using various criteria to determine the materiality and likelihood of non-compliance with their respective contribution agreements. In addition to this, 13 amendments were completed and 105 claims valued at over $169 million were processed.

Program Sub-Activity
Automotive Innovation
Description:
The Automotive Innovation Fund was put in place to support the production of innovative, greener and more fuel-efficient vehicles by contributing to strategic, large-scale research and development (R&D) projects in the automotive sector. It provides support in the form of repayable contributions to automotive-related companies to fund transformative, innovative activities related to automotive engineering, R&D and manufacturing modernization to position the Canadian industry to lead in producing the cars of the future. This program also supports Canada's environmental agenda in advancing R&D and innovation to increase automobile fuel efficiency and reduce greenhouse gases, thereby contributing to meeting the objectives of Canada's Clean Air Agenda and new fuel consumption regulations. Through this program, Industry Canada considers funding proposals that provide for private sector investment in Canada of more than $75 million over five years.
Expected Result Performance Indicator Target Performance Status
Enhanced capacity for the development of innovative, more fuel-efficient technologies in the Canadian automotive industry Number of projects focusing on innovative fuel-efficient technologies and processes 4 A total of four contribution agreements were signed by March 31, 2012.
Leveraged leading-edge research and development in the Canadian automotive industry Dollars of private sector investment leveraged per dollar of Automotive Innovation Fund investment $5.00 A total of $6.88 of private sector R&D investment was leveraged per AIF investment dollar, which represented a total of $528 million on the $67 million disbursed. This was greater than the target set.
Trend information is not available as disbursements and ratios between 2008–09 and 2010–11 are not representative of current and future year results.
Program Sub-Activity
Aerospace Innovation
Description:
This program advances and supports research and development (R&D) in the aerospace industry, encourages and leverages private sector investment, and maintains and enhances the technology base and technological capabilities of Canadian aerospace firms. This program will provide conditionally repayable contributions that support the development of new technologies for the next generation of more fuel-efficient and safe aircraft.
Expected Result Performance Indicator Target Performance Status
Investment in research and development (R&D) and commercialization of new technologies in the Canadian aerospace industry Number of R&D positions maintained and created as a result of this program 1,300 As of December 31, 2011, a total of 1,958 R&D positions had been created since the beginning of the program compared to 1,450 R&D positions as of December 31, 2010.
The scope of the R&D program was broader than expected resulting in approximately 50% more R&D positions maintained and created as a result of this program.
As program projects reach maturity, the number of R&D positions created by this program will begin to slow and eventually decline.
Program Sub-Activity
Strategic Aerospace and Defence Initiative
Description:
The Strategic Aerospace and Defence Initiative (SADI) helps to encourage the development of innovative products and services; enhance the competitiveness of Canadian aerospace and defence (A&D) firms; and foster collaboration among research institutes, universities, colleges and the private sector. SADI is a component of the government's science and technology strategy, which aims to leverage greater private sector research and development investment in Canada. The program acts as a catalyst for new A&D investments by providing repayable contributions to Canadian A&D companies for strategic industrial research and pre-competitive development. SADI accepts applications on an ongoing basis, and projects are selected following a rigorous review of financial, technical and market criteria. The program is financed with funds that were previously allocated to Technology Partnerships Canada (TPC) and repayments received from TPC and SADI projects.
Expected Result Performance Indicator Target Performance Status
Research and development (R&D) investment in innovative and competitive aerospace, defence, space and security firms Dollars of investment leveraged per dollar of Strategic Aerospace and Defence Initiative (SADI) investment $2.00 A total of $2.12 of private sector R&D investment was leveraged per SADI investment dollar, which represented a total of $347.2 million on the $163.7 million disbursed.
The trend over the past three years is improving; in 2010–11 a total of $1.96 of R&D investment was leveraged per SADI investment dollar and in 2009–10 the total of $1.95 in private sector R&D was leveraged per SADI investment dollar.
Collaborative R&D partnerships among aerospace, defence, space and security industries and research institutes, universities, colleges and/or the private sector Percentage of approved assistance tied to projects that have a collaborative element 90% All (100%) of SADI projects have a collaborative element with post-secondary educational institutions.
This has been consistent over the last 3 years.
Program Sub-Activity
Technology Partnerships Canada
Description:
The Technology Partnerships Canada (TPC) program provided repayable contributions to Canadian businesses to support industrial research and pre-competitive development in the aerospace and defence, environmental and life sciences, information and communication technologies, and advanced manufacturing sectors. The program helped leverage research and development investment and produced a wide range of economic, social and environmental benefits for all Canadians. TPC ended on December 31, 2006. Although it no longer takes applications, TPC continues to manage a $3.5-billion portfolio of existing contracted projects. Repayments on these projects are expected until 2035Footnote 32.
Expected Result Performance Indicator Target Performance Status

Footnotes

Footnote 32

The last disbursement on these projects is expected in 2014–15.

Return to footnote 32 referrer

Government investment in research and development (R&D) activities in the aerospace, defence, environmental and enabling technology industries generates other incremental investment from Canadian businesses. Dollars of R&D investment leveraged per dollar of Technology Partnerships Canada investment $2.00 A total of $1.77 of private sector R&D investment was leveraged per TPC investment dollar in 2011–12. As contribution agreements have different sharing ratios (30% on average at the portfolio level), the amount leveraged in a given year fluctuates based on the sharing ratio of individual claims. The lower than target leverage amount for 2011–12 is due to claims paid at a higher sharing ratio than the previous year.

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Results and Performance by Strategic Outcome (continued)

Strategic Outcome 3: Canadian Businesses and Communities Are Competitive

Industry Canada's mandate is to help make Canadian industry more productive and competitive in the global economy. In doing so, the Department collaborated with associations, governments and industry to enhance Canada's industrial capabilities. Industry Canada is also committed to supporting Canadian companies in a variety of ways, and promotes economic development in communities to encourage the development of skills, ideas and opportunities across the country. This was accomplished through the following programs activities:

  • Small Business Research, Advocacy and Services;
  • Industrial Competitiveness and Capacity, and
  • Community Economic Development.
Figure 9: Distribution of spending by Program Activity under the Strategic Outcome Canadian Businesses and Communities are Competitive

Figure 9: Distribution of spending by program in the area of Canadian Businesses and Communities are Competative

Description of Figure : Distribution of spending by program in the area of Canadian Businesses and Communities are Competative

Figure 9: Distribution of spending by program in the area of Canadian Businesses and Communities are Competative
Community Economic Development Small Business Research, Advocacy and Services Industrial Competitiveness and Capacity
52% 34% 14%
Canada's Federal Tourism Strategy

The tourism industry in Canada represents approximately two percent of the country's gross domestic product ($78.8 billion in 2011) and employs more than 600,000 people across all regions of Canada. By 2030, 1.8 billion international trips are expected globally. Recognizing tourism as a key economic driver, the Government of Canada launched Canada's Federal Tourism Strategy in October 2011 to help position Canada's tourism sector for long-term growth and global competitiveness.

The Strategy sets four priority areas: increasing awareness of Canada as a premier tourist destination, facilitating ease of access and movement for travellers while ensuring the safety and integrity of Canada's borders, encouraging product development and investment in Canadian tourism assets and products, and fostering an adequate supply of skills and labour to enhance visitor experiences through quality service and hospitality.

Going forward, the federal government will align its tourism efforts around these four priorities with a goal of increasing the economic value of the tourism sector to $100 billion by 2015 and will release an annual tourism report starting in 2013.

Figure 10: Financial Resources

Figure 10: Financial Resources

Description of Figure : Figure 10: Financial Resources

Figure 10: Financial Resources ($ Millions)
  2009–10 2010–11 2011–12
Planned 297.8 245 329.8
Total Authorities 860.1 270.1 314
Actual 585.8 254.4 291.8

Figure 11: Human Resources Footnote 33

Figure 11: Human Resources

Description of Figure

Figure 11: Human Resources (FTE's)
  2009–10 2010–11 2011–12
Planned 678 505 592
Actual 573 467 542

Footnotes

Footnote 33

The upward trend between fiscal years 2010–11 and 2011–12 is due to realignment between Strategic Outcome 2 and 3. Refer to figure 8 to see the offsetting downward trend.

Return to footnote 33 referrer

Table: Canadian Businesses and Communities Are Competitive
Program Activity 2010–11 Actual Spending ($ millions)Footnote 35 2011–12 ($ millions)Footnote 34 Alignment to Government of Canada Outcomes
Main Estimates Planned Spending Total Authorities Actual Spending

Footnotes

Footnote 34

Minor differences are due to rounding. Total authorities and actual spending exclude amounts deemed appropriated to Shared Services Canada.

Return to footnote 34 referrer

Footnote 35

Actual Spending includes 2009 Economic Action Plan (EAP) initiatives and is consistent with the Public Accounts. However, the numbers vary from what was published in the 2010–11 Departmental Performance Report, where the numbers for EAP were provided in a separate table.

Return to footnote 35 referrer

Footnote 36

The variance between Planned and Actual Spending is mainly due to fewer claims being received under the Canada Small Business Financing Program than anticipated as a result of the economic recovery.

Return to footnote 36 referrer

Footnote 37

The lack of sufficient eligible project proposals received for the Structured Financing Facility program generated a surplus in available funds.

Return to footnote 37 referrer

Small Business Research, Advocacy and Services Footnote 36 111.4 128.6 128.6 102.1 99.0 Economic Affairs: Strong Economic Growth
Industrial Competitiveness and Capacity Footnote 37 92.3 47.1 47.1 47.9 39.6
Community Economic Development 145.6 95.0 154.0 164.0 153.2
Total 349.3 270.7 329.8 314.0 291.8

Summary of Performance

Strategic Outcome 3
Canadian Businesses and Communities Are Competitive
Performance Indicators Targets 2011–12 Performance
Canada's ranking for the "Small- and medium-sized enterprises are efficient by international standards" criterion (IMD-International Institute for Management Development—International's World Competitiveness Yearbook) 17th Canada was 12th on IMD's list in 2011, a considerable improvement compared to the 2010 result (17th) and 3rd in the G7. Survey respondents indicated that they perceive small- and medium-sized businesses as being more efficient by international standards in 2011 than in 2010.
Canada's ranking for the "Large corporations are efficient by international standards" criterion (IMD International's World Competitiveness Yearbook) 32nd Canada's ranking for this indicator was 4th in the G7 in 2011, which is the same as 2010. On IMD's list, Canada was 32nd in 2011, also the same as 2010. However, according to the results of the survey conducted, Canada's large corporations are perceived as being more efficient than they were in 2010.
Ratio of small and medium-sized enterprises in rural versus urban areas (defined by census subdivisions) 1:5.6 The ratio of rural to urban SMEs in Canada is 1:2.33. Calculated with this methodology, the result shows no change from the previous year (1:2.1).

Program Activity: Small Business Research, Advocacy and Services

Program Description

The Department's work in this program area is aimed at enhancing the growth and competitiveness of small business and encouraging entrepreneurship. Through this program activity, Industry Canada raises awareness across government of the challenges facing small businesses; provides knowledge and expertise on small- and medium-sized enterprises (SME) in a number of areas, including statistics, entrepreneurship, financing, innovation and growth firms; recommends policy options; delivers programs that help support SMEs and entrepreneurial activity across Canada; and provides advice and support related to the Business Development Bank of Canada.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions)Footnote 38 Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
128.6 102.1 99.0 123 114 9

Footnotes

Footnote 38

The variance between Planned and Actual Spending is mainly due to forecast payments to lenders for loans under the Canada Small Business Financing Program which were revised downwards in 2011–12 by $41 million due to fewer claims being received than anticipated as a result of the economic recovery and some lenders hitting their Minister's Liability Cap. Furthermore, a payment of $10 million was issued to the Canada Youth Business Foundation resulting from a Budget 2011 announcement.

Return to footnote 38 referrer

Table: Small Business Research, Advocacy and Services
Expected Result Performance Indicator Target Actual Results
Small businesses use government programs, tools and information. Number of small businesses using government programs, tools and information to enhance their growth and competitiveness 2,342,050 2,529,818 small businesses used government programs, tools and information to further enhance their growth and competitiveness. Industry Canada's outreach efforts included promoting its programs for small businesses online and through various awareness activities.
Performance Summary and Analysis of Program

As a result of Industry Canada's efforts, Canadian entrepreneurs and SMEs have contributed to strengthening the Canadian economy. In 2011–12, under the Canada Small Business Financing Program (CSBFP) small businesses received 7,196 loans representing approximately $1 billion.

Industry Canada continued to engage existing and new partners through the Canada Business Network (CBN) to enhance and deliver integrated business information. There was an overall increase of 17.8 percent which resulted in 2.2 million visits over the previous year to the Canada Business website in 2011–12. The CBN also collaborated with current and new partners including the Canadian Federation of Independent Businesses, Service Ontario, the City of Toronto, and the Saskatchewan Economic Development Association to provide better access to relevant business information.

In 2011–12, Industry Canada, through the Small Business Internship Program (SBIP), provided Canadian small businesses with the financial support to hire 400 post-secondary students as interns to assist them in their adoption of e-business strategies. Furthermore, through the Canadian Youth Business Foundation (CYBF) Industry Canada issued 493 loans in 2011–12. This assistance contributes to the growth and competitiveness of small businesses and continues to encourage entrepreneurship among Canadian SMEs.

Industry Canada officials also provided small business policy advice to officials both within Industry Canada and in other government departments. For example, Industry Canada received input from stakeholders as part of the 10-year legislative review of the Business Development Bank of Canada (BDC), which will be used to assess the BDC's current and potential role in key areas such as globalization, innovation and access to financing, and to ensure BDC is well positioned to respond to emerging challenges facing SMEs.

Lessons Learned

In accordance with the Canada Small Business Financing Act, a Comprehensive Review of the CSBFP must be conducted every five years. A Comprehensive Review of the 2004–09 lending period, tabled in Parliament in April 2010, found that the Program continues to be a successful, efficient mechanism for facilitating asset-based debt financing to small businesses. However, the administrative burden and low profitability associated with the Program's design led to declining usage during the period of the review. Program officials are working towards the implementation of measures identified during the review process to modernize the program, reduce the paperwork burden and increase awareness among SMEs.

Program Sub-Activity
Canada Small Business Financing
Description:
The Canada Small Business Financing Program (CSBFP) helps Canadian small and medium-sized enterprises (SME) access financing that would not otherwise be available or would only be available under less favourable terms. It is a loan loss-sharing program in partnership with financial institutions. To be eligible for this program, SMEs must be for-profit businesses with revenues of less than $5 million per year. Under the program, financial institutions can make term loans on real property, leasehold improvements and equipment. In the event that a registered loan defaults, the government pays 85 percent of the net eligible losses. The CSBFP is a national program operating in all provinces and territories.
Expected Result Performance Indicator Target Performance Status
With government support, small and medium-sized enterprises have access to financing that would not otherwise be accessible. Number of loans registered with the program 8,000 A total of 7,196 loans were registered with the program, which is slightly below the target. This is down from 7,466 loans made in 2010–11.
Reasons for the decline in lending volumes include a decrease in the demand for debt financing, increased uses of commercial lines of credit and credit cards by small businesses, some administrative burden on lenders and borrowers using the program, and the impact of some lenders reaching their maximum liability limit on claims paid for a given lending period.
The total number of loans made has decreased over the last three years. Since 2009–10, loans registered have decreased by 4% from 7,534 to 7,196 loans in 2011–12.
Value of loans registered with the program $1 billion The value of loans registered with the program for 2011–12 was $996.3 million. This is down slightly from $1.03 billion in 2010–11.
The value of loans registered under the CSBFP has remained relatively stable at $1 billion over the last three years.
Percentage of loan recipients under the program who would not have obtained a loan otherwise or would have obtained a loan under less favourable conditions 75% The latest CSBFP comprehensive review (2010) indicated that 80–85% of CSBFP borrowers obtained some degree of financial incrementality; an increase ranging from 4.4% to 9.6% as mentioned in the previous comprehensive review tabled in Parliament in 2005. Incrementality studies are performed every five years and therefore no annual trend information is available.
Program Sub-Activity
Canada Business Network
Description:
The Canada Business Network provides existing and potential business entrepreneurs and Canadian small and medium-sized enterprises (SME) with information on relevant federal, provincial and territorial government services, programs and regulations. This information is available on the Internet, by telephone (toll-free), by email and through a network of service centres providing access to business-related publications, directories and electronic databases. This provides SMEs with convenient, one-stop access to government information, programs and services, saving them time and helping them to make well-informed business decisions. Canada Business is managed by four lead departments—Industry Canada, Atlantic Canada Opportunities Agency, Canada Economic Development for Quebec Regions and Western Economic Diversification—in collaboration with the provinces and territories. Each lead department has its own program activity architecture and associated performance measures.
Expected Result Performance Indicator Target Performance Status
Small businesses use government business-related information, programs and services. Number of client visits to the Canada Business website 1.5 million There were 2,197,770 visits to the Canada Business Network website in 2011–12 surpassing the target set for that year. This is an increase of 17.8% over 2010–11.
Industry Canada's continued efforts online and across the CBN have helped improve outreach.
Percentage of clients who can find the information they are looking for on the Canada Business website 50% The online survey was not conducted for fiscal year 2011–12. Resources were diverted to a federal government priority for web accessibility.
Volume of client interactions facilitated by Canada Business Network's regional presence in Ontario 5% increase over 2010–11 volume In 2011–12, there were a total of 967,413 visits to Canada Business Website facilitated by the regional presence in Ontario. The result is only a 3.2% increase in web traffic. During the 2010–11 fiscal year the way Canada Business Ontario tracked its web statistics changed due to concerns that visits from web robots were being included in its numbers. The transition resulted in higher numbers for the first half of the fiscal year until the new program was in place. This new methodology will ensure its statistics have greater accuracy in future reporting.
Program Sub-Activity
Small Business Internship
Description:
The Small Business Internship Program (SBIP) provides small and medium-sized enterprises (SME) with financial support to employ a post-secondary student intern to assist them in their adoption of information and communication technologies (ICT). The program, delivered in collaboration with Canadian small businesses, post-secondary institutions and non-government organizations, offers post-secondary students hands-on experience working on e-commerce projects under the mentorship and coaching of entrepreneurs.
Expected Result Performance Indicator Target Performance Status
Post-secondary students are employed as interns to assist on e-business projects. Number of students who improve ICT skills 400 Of the 400 students hired, 99.6% surveyed found that the program improved their ICT skills.
Small and medium-sized enterprises (SME) undertake e-business projects to improve their use of information and communication technologies (ICT). Number of e-business projects undertaken by SMEs 400 A total of 400 e-business projects were undertaken by SMEs in 2011–12 as a total of 400 students were hired. 81% of the SMEs surveyed indicated an improvement of their ICT skills and knowledge. This is a decrease from the 525 e-business projects created in 2010–11 which had over $1 million in additional funds.
Program Sub-Activity
Small Business Growth and Prosperity
Description:
Through advocacy, evidence-based research and analysis, stakeholder consultations and surveys, this program ensures that the government is better informed on small business issues, including the importance of entrepreneurship and small businesses to Canada's economy, the challenges they face in terms of growth and prosperity, and the strategies for reducing their paperwork burden when complying with government requirements and obligations. This program also supports the Canadian Youth Business Foundation (CYBF), a not-for-profit organization that provides loans and mentorship to young Canadian entrepreneurs who would not typically receive financial assistance from traditional lending institutions.
Expected Result Performance Indicator Target Performance Status

Footnotes

Footnote 39

This may include recommendations from stakeholders on how to reduce the regulatory and paperwork burden and how to improve business access to government programs and information.

Return to footnote 39 referrer

Departmental clients, clients of other government departments and external stakeholders are aware of small business perspective. Number of meetings and outreach events 15 A total of 29 meetings and outreach activities took place during 2011–12. These included meetings with federal/provincial/territorial officials, other government departments and small businesses and entrepreneurs. These also included events such as webinars for entrepreneurs, presentations on the Small Business Branch's research; and roundtables between the Minister of State for Small Business and Tourism, entrepreneurs, business leaders and associates. This represents an increase over the 15 meetings and outreach events held in 2010–11.
The government will obtain information and advice from stakeholders on small business issues, including the regulatory and paperwork burden and access to government programs and information. Number of briefings sent to the responsible minister containing information and advice provided by stakeholders on small business issues 6Footnote 39 Industry Canada prepared nine reports and briefing notes to the Minister of State providing advice and information on small business issues.

Program Activity: Industrial Competitiveness and Capacity

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy
Program Description

This program was put in place to help Canadian industries develop the capacity to adapt to the ever-changing economic landscape, respond appropriately to external shocks, and innovate and compete internationally. Through research and analysis, it develops expertise on Canadian industries and Canada's position in the global economy. The overall goal is to strengthen Canada's industrial capacity by applying this expertise in the development of policy, legislation and regulations and to engage various public and private stakeholders. Departmental officials engage with associations, governments and leading firms to help Canadian industries become more innovative and enter into global value chains, strengthen partnerships both domestically and internationally, attract investment and promote Canadian expertise. Through this program, the Department also invests in private sector initiatives that are aimed at maximizing productivity and facilitating access to capital.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions) Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference

Footnote

Footnote 40

The lack of sufficient eligible project proposals received for the Structured Financing Facility program before the end of the year generated a surplus in available funds of $3.0 million. The remaining variance is due to spending reductions in the industry-specific policy and analysis program primarily related to reduced staffing, including $448,000 in reductions related to Strategic Review.

Return to footnote 40 referrer

47.1 47.9 39.6Footnote 40 305 277 28
Table: Industrial Competitiveness and Capacity
Expected Result Performance Indicator Target Actual Results
Canadian industries have the capacity to prepare for and respond to risks and opportunities in domestic and global markets. Canada's ranking for "Value chain breadth" (indicator 11.05 of the World Economic Forum's Global Competitiveness Report) 33rd or better (based on 2010–11 report) 41st
Canada's numerical score of 4.0 (on a 7 point scale) was down from a score of 4.2 in 2010–11.
Industry Canada continues to deliver programs intended to impact Canada's ranking for "value chain breadth".
Canada's ranking for "Firm-level technology absorption" (indicator 9.02 of the World Economic Forum's Global Competitiveness Report) 22nd or better 29th
Canada's numerical score of 5.6 (on a 7 point scale) was identical to the score achieved in 2010–11.
Industry Canada continues to deliver programs intended to impact Canada's ranking for "firm-level technology absorption".
Industry perspective is considered in policy, legislation, regulations and agreements. Number of collaborative policy projects focused on industry competitiveness and adaptability 46 47 collaborative policy projects were undertaken in 2011–12.
Performance Summary and Analysis of Program

In the fall of 2011, the Government of Canada announced the Federal Tourism Strategy, led by Industry Canada, to implement a whole-of-government approach to enhance the federal government's role as an effective partner with industry and other levels of government in support of an internationally competitive tourism sector.

An arm's-length Review of Aerospace and Space Programs and Policies was launched in February 2012 in close collaboration with industry and the Aerospace Industries Association of Canada. The objective of the review is to provide concrete, fiscally neutral recommendations on how federal policies and programs can help maximize the competitiveness of Canada's aerospace and space sectors.

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy In collaboration with government, industry and academic stakeholders, Industry Canada completed the development phase of the Soldier Systems Technology Roadmap. The Department also worked on the planning and launching of the implementation phase of the roadmap at a multi-stakeholder workshop on June 3, 2011.

Furthermore, Industry Canada continued to assess and analyze various sectors, such as aerospace manufacturing, automotive, information and communication technologies, the pharmaceutical, biopharmaceutical consumer products, and business services in order to understand sector issues and develop comprehensive policy advice to ensure growth and competitiveness in the globalized marketplace.

As part of its Strategic Review, in 2011–12 Industry Canada realigned resources dedicated to developing industrial and related policy analyses to allow the Department to focus on the delivery of strategic advice to Government on business issues and emerging economic situations.

Lessons Learned

Recognizing the level of engagement of other government departments and the success in promoting research-driven departments and agencies in adopting Technology Roadmaps (TRMs), Industry Canada opted to transition Soldier Systems Technology Roadmap (SSTRM) activities to departments that directly benefit from SSTRM applications. This decision ensures a more efficient delivery of TRM expertise while allowing Industry Canada to realign its resources to reflect new priorities.

In many countries, recovery from the recession has been slower than in Canada. This, coupled with the relatively high Canadian dollar, may limit opportunities for Canadian firms to sell their products and invest in key global markets. To address this risk, Industry Canada organized and led the delivery of the Roundtable on Innovation, Investment and Global Mandates. This meeting brought together 35 policy leaders, private-sector executives and academics to share best practices and gain insight to further succeed in global markets.

Program Sub-Activity
Industry-Specific Policy and Analysis
Description:
This program provides both government and industry with intelligence, analysis and advice on industry's capacity to adapt to the continually evolving economic environment. Departmental officials monitor trends and business issues affecting innovation and competitiveness in targeted industries and track international economic and policy developments to determine their effects on Canadian industries. This expertise is used to advise stakeholders on key issues and policies that are relevant to the competitiveness of targeted industries and their positions within globalized markets and value chains. Through this program, the Department brings an industry perspective to government decision making and, in turn, a government perspective back to industry. In collaboration with partners such as industry associations and other government departments, Industry Canada develops value chain studies, research papers, statistical reports and other such products, which are disseminated to enable informed decision making. This program also promotes the adoption and adaptation of new and emerging technologies and skills for business processes and supports strategic research and development, marketing and investment activities.
Expected Result Performance Indicator Target Performance Status

Footnotes

Footnote 41

This includes company and sector profiles, research reports and studies, economic and business analyses and technology roadmaps.

Return to footnote 41 referrer

Government and industry decision makers have access to information on trends and issues affecting the competitiveness of Canadian industries. Percentage of responses to requests from stakeholders for information, advice or expertise on industrial competitiveness 100% Industry Canada responded to 100% of the requests for information, advice and/or expertise from stakeholders in 2011–12. This included requests from other federal departments and agencies, provincial and municipal governments, industry associations and academia.
Number and type of knowledge products developed to analyze trends, risks and opportunities affecting the competitiveness of targeted Canadian industries that were disseminated to stakeholders 350Footnote 41 A total of 521 knowledge products were developed in 2011–12.
Demand for knowledge products exceeded the original estimate due to: specific corporate activities requiring in-depth analysis for senior management; unanticipated ministerial ICT roundtables; and pre-budget consultations which required significant corporate analysis and profiling.
This represents an increase from the 358 knowledge products developed in 2010–11 but is not necessarily representative of a long-term upward trend.
Program Sub-Activity
Shipbuilding Capacity
Description:
This program helps ensure that shipbuilding capacity exists for federal marine procurement and maintenance requirements in keeping with the Buy Canada procurement policy. Eligible products are new vessels and offshore marine structures or existing vessels and offshore marine structures undergoing major refurbishment, conversion or other major modification in Canadian shipyards. Financing is provided to applicants, lenders or lessors, who will receive a non-repayable contribution to reduce the applicant's interest or leasing costs. Subject to limitations, this support can be up to 15 percent of the purchase price paid to the Canadian shipyard for the construction or modification of an eligible vessel or offshore marine structure.
Expected Result Performance Indicator Target Performance Status
Shipbuilders are aware of the program and inform shipowners. Number of shipyards to which letters are sent 6 A total of nine letters were sent to shipyards in 2011–12. As the Structured Facility Financing (SFF) program is sunsetting all efforts were made to contact shipyards, including those with projects with uncertain timelines, to ensure the maximum coverage possible. This led to the program exceeding its performance goal for this indicator.
Number of expressions of interest and number of applications received 8 A total of five expressions of interest or applications were received in 2011–12.
After a one year interruption in the availability of SFF, the resumption of activity is slow due to the long lead times required for ship construction and the limited duration of the SFF program.
Demand for new builds, conversions, refits and modifications in Canadian shipyards Number of contribution agreements approved 4 No agreements were approved in 2011–12. However, one of the inquiries received resulted in an application that was approved in 2012–13.
Program Sub-Activity
Industrial and Regional Benefits
Description:
The Industrial and Regional Benefits (IRB) Policy provides the framework for leveraging federal defence and security procurements to generate long-term industrial and regional development within Canada. The IRB Policy ensures that Canadian companies can derive benefits from federal procurements and their potential to create new business opportunities or investments in research and development, technology commercialization or business development activities. Under the IRB Policy, prime contractors that are awarded major federal defence and security contracts are required to generate new business activity in the Canadian economy in an amount equal to the value of the contract. The investments must be in advanced technology sectors across Canada and can be either directly or indirectly related to the procured item. The IRB Policy is the Canadian version of the industrial participation policies practised in over 100 countries.
Expected Result Performance Indicator Target Performance Status
Prime contractors benefiting from federal procurement contracts reinvest in the Canadian economy. Dollar value of prime contractor investment in the Canadian economy $900 million The dollar value of prime contractor investment in the Canadian economy for 2011–12 was $1.52 billion which greatly exceeded the target for this year.
This value was higher than the $1.23 billion result achieved in 2010–11 and reflects an increase in contracted defence procurements. Expected government procurement contracts with IRB obligations over the coming years mean that the value of IRB activities is likely to continue to increase. The dollar values of prime contractor investment are expected to rise over the next several years as the number of investments increase.
Business relationships are created between Canadian suppliers and prime contractors. Number of transactions that generate relationships between prime contractors and Canadian companies 75 A total of 204 transactions which generated relationships between prime contractors and Canadian companies were reported in 2011–12. The high number of new transactions is related to an increase in the number and size of contracted procurements with IRB obligations.
Industrial and Regional Benefits transactions are reviewed, approved and reported on in a timely manner. From total applications received, percentage of new business transactions that are examined and assessed annually 90% A total of 204 new transactions were received in 2011–12. All were examined and assessed (100%).
This is consistent with the 100% result achieved in 2010–11.

Program Activity: Community Economic Development

Program Description

This program advances the economic development of northern Ontario communities in the same manner that regional development agencies support similar activities in other regions of Canada. Its main goal is to strengthen the northern Ontario economy by providing financial support, through contribution agreements, for economic and community development projects led by the private, not-for-profit and public sectors. This program also helps to increase public access to the Internet, provide schools with greater access to computers, and improve IT skills and learning in community groups and communities across Canada.

Financial Resources ($ millions) and Human Resources (FTEs)
Financial Resources ($ millions) Human Resources (FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
154.0 164.0 153.2 164 151 13
Table: Community Economic Development
Expected Result Performance Indicator Target Actual Result

Footnote

Footnote 42

The target was incorrectly stated in the RPP.

Return to footnote 42 referrer

Targeted businesses and organizations in northern Ontario create economic growth. Number of northern Ontario businesses and organizations created, expanded or maintained 1,445Footnote 42 1,734 northern Ontario businesses and organizations created, expanded or maintained.
Performance Summary and Analysis of Program

Industry Canada through the Federal Economic Development Initiative for Northern Ontario (FedNor) continued to strengthen Northern Ontario communities through the delivery of the Northern Ontario Development Program (NODP), the Community Futures Program (CFP) and the Economic Development Initiative (EDI).

In 2011–12, Industry Canada renewed and refocused the NODP to better serve Northern Ontario businesses and organizations and help create jobs and attract investors. Through FedNor, Industry Canada implemented recommendations of the Community Futures Audit completed in 2010. In 2011–12, FedNor also pursued enhanced trade and Industrial and Regional Benefits (IRB) outreach activities, such as hosting IRB events in Sudbury and Thunder Bay to enhance awareness about IRB and provide an opportunity for Northern Ontario businesses to meet prime contractors and government officials.

The Department also implemented the Computers for Schools Program (CFS), which, in 2011–12, refurbished and delivered 76,955 computers and conducted 17 information sessions across Canada.

Lessons Learned

Industry Canada completed an evaluation of NODP in 2010 which confirmed the continued need for NODP to strengthen and diversify the Northern Ontario economy. The recommendations focused on: improving the measurement of medium- and longer-term outcomes; improving the project approval process to decrease project approval times; developing a more strategic allocation of program resources to core economic development activities; and considering how to increase program impacts on for-profit businesses. FedNor addressed the recommendations of the evaluation by developing and implementing a service improvement plan to streamline the project approval process, reduce approval times and improve client service and access. A new performance measurement strategy is in place, with enhanced measurement of medium- and longer-term outcomes.

In an effort to keep up with Northern Ontario's changing economic climate, NODP priorities were realigned to achieve short- to medium-term measurable results that support the economic development and growth of Northern Ontario communities and businesses. The updated NODP criteria and guidelines are now available publicly through the FedNor website and provide Canadians with comprehensive information about the program.

Program Sub-Activity
Community Futures
Description:
The Community Futures (CF) Program is a national program administered by FedNor in rural northern Ontario and delivered through the regional development agencies in the rest of Canada. The CF Program provides financial support to small and medium-sized enterprises through 24 Community Futures Development Corporations (CFDC) located throughout rural northern Ontario. The program's objectives are to foster economic stability, growth and job creation; help create diversified and competitive local rural economies; and help build sustainable communities. CFDCs are incorporated, not-for-profit, community-based development organizations, each governed by a local, volunteer board of directors. They offer a variety of products and services to support small business growth and community economic development, such as access to capital; strategic community planning and socio-economic development; support for community-based projects and special initiatives; and business information, planning and support services. FedNor provides financial contributions to support the ongoing operations of individual CFDCs through either one- or three-year agreements.
Expected Result Performance Indicator Target Performance Status
Targeted rural northern Ontario businesses create jobs and attract investors. Ratio of funds raised from other sources to federal Community Futures (CF) Program investments 1:1.6 The ratio for 2011–12 was 1:1.8, which is greater than the target.
This represents more than 100% of the expected level of performance. CFDCs were successful in leveraging funds from other sources, including owner's equity and other third party investments. However, this also represents a decrease from the ratio of 1:3.3 achieved in 2010–11.
Number of jobs created in northern Ontario through CF investments 2,121 A total of 1,898 jobs were created in northern Ontario through CF investments in 2011–12.
The level of job creation reflects local economic conditions in communities served by the program.
Program Sub-Activity
Northern Ontario Development
Description:
The Northern Ontario Development Program (NODP) is administered by FedNor. Its mission is to promote growth, economic diversification, job creation, and sustainable, self-reliant communities in northern Ontario through a range of initiatives aimed at improving business access to capital, information and markets. This is achieved by providing financial support, through transfer payments, to small and medium-sized enterprises and not-for-profit organizations, including municipalities, municipal organizations, community development organizations and research institutions, in six priority areas: community economic development, information and communication technologies, innovation, trade and tourism, human capital, and business financing.
Expected Result Performance Indicator TargetFootnote 43 Performance Status

Footnotes

Footnote 43

The target was incorrectly stated in the RPP

Return to footnote 43 referrer

Northern Ontario businesses and organizations create jobs and attract investors. Ratio of funds raised from other sources to Northern Ontario Development Program (NODP) contributions 1:3.0 The ratio for 2011–12 was 1:2.6
FedNor leveraged funds from partners such as, community economic development organizations, businesses, municipalities, the provincial government, industry associations and First Nations.
Number of jobs created in northern Ontario through NODP investments 2,121 A total of 3,043 jobs were created in northern Ontario through NODP investments. This was greater than the target.
Program Sub-Activity
Computers for Schools
Description:
Through this program, surplus computers from federal, provincial and territorial government departments and from private companies and private donors are refurbished through contribution agreements with licensed delivery agents. Once refurbished, they are distributed to schools and not-for-profit learning organizations across Canada. Through a national partnership-based network, the program continues to meet an ongoing demand for computers in Canadian schools and libraries, ensuring that more young Canadians have access to the benefits of a knowledge-based economy and society. This program also supports work experience internships for youth at the post-secondary level. Youth interns with the requisite skills are given the opportunity to work on innovative information and communication technologies projects in the context of computer refurbishment workshop activities. These projects enable participants to develop practical work experience in such areas as computer repair, refurbishment and software testing; to cultivate skills such as teamwork, time management and administration; and to perform other activities related to managing a computer refurbishment workshop.
Expected Result Performance Indicator Target Performance Status
Schools, libraries and not-for-profit learning organizations and Aboriginal communities receive refurbished computers. Number of refurbished computer units delivered annually 65,000 A total of 76,955 computers were distributed as of March 1, 2012.
An increased demand for computers and larger number of computer donations allowed the program to exceed the expected target in 2011–12. It also represents an increase from the 67,684 computers distributed in 2010–11.
Youth interns gain work experience in the information and communication technologies field. Number of youth interns hired in 2011–12 300 A total of 329 youth interns were hired in 2011–12. This represents a decrease from the 403 youth interns hired in 2010–11.
Number of hours worked by youth interns in 2011–12 390,000 The hours worked by youth interns is not available as the database that was to be used to track hours accumulated by hired interns was not in place by April 1, 2011. The CFS National Database is currently in the testing phase and will be implemented starting October 1, 2012, to coincide with the start of a new quarter of the fiscal year.
Program Sub-Activity
Community Access
Description:
The Community Access Program (CAP) provides public access to the Internet, to related information and communication technologies (ICT) and applications, and to skills training, and it delivers public and private sector services and information to Canadians. CAP also provides work experience for up to 1,300 youth annually through placements at CAP sites throughout the country. Youth who have the requisite skills are offered opportunities to work on innovative ICT projects, providing CAP site users with basic training in using the Internet, accessing online government services, developing websites and using other web-related services. This enables the youth interns to develop practical work experience in training and promotion and to cultivate other useful work-related skills such as teamwork, time management and administration. Footnote 44
Expected Result Performance Indicator Target Performance Status

Footnotes

Footnote 44

CAP ended on March 31, 2012. Federal funding will continue to support youth internships at community access sites

Return to footnote 44 referrer

Canadians have public access to the Internet. Number of communities served 1,850 The total number of communities served in 2011–12 was 1,979. This is 7% above the target and is due in part to a review and update of the CAP site list.
CAP has successfully achieved its objectives. Today, approximately 79 percent of Canadians have home Internet access and with smartphones, many Canadians have access to the Internet in their hands.
Youth interns gain work experience in the information and communication technologies field by assisting Community Access Program (CAP) site users. Number of youth interns hired in 2011–12 1,300 A total of 1,345 youth interns were hired in 2011–12. This is a decrease from the 1,836 youth interns hired in 2010–11, when there were 401 additional interns due to one-time top-up funding from the Federal government.
The trend is declining when comparing 2009–10 (1,435 interns) and 2010–11 (1,836 interns).
Number of hours worked by youth interns in 2011–12 662,000 The hours worked by youth interns is not available as the database that was to be used to track hours accumulated by hired interns was not in place by April 1, 2011. The program closed on March 31, 2012 and will not be renewed beyond this date.
Program Sub-Activity
Linguistic Duality and Official Languages
Description:
The Linguistic Duality and Official Languages program is focused on implementing section 41 of the Official Languages Act, which involves the following: 1) ensuring all Industry Canada programs and initiatives take into account the needs of Official Language Minority Communities (OLMC) and serve to enhance their vitality, assist their development, and foster the full recognition and use of both English and French in Canadian society; and 2) managing the horizontal coordination of the $30.5-million Economic Development Initiative (EDI) under the Government of Canada's Roadmap to Linguistic Duality 2008–2013: Acting for the Future. This initiative promotes the development of new business expertise through innovation, economic diversification activities, partnerships and increased support to small businesses. The EDI also promotes the economic benefits of Canada's linguistic duality and the linguistic skills of its human capital. Funding, which not-for-profit organizations receive through transfer payments, supports two priority areas: community strategic planning and business economic development. FedNor is responsible for delivery of the EDI in northern Ontario. The existing Northern Ontario Development Program is the vehicle through which the EDI will be implemented in OLMCs throughout northern Ontario.
Expected Result Performance Indicator Target Performance Status
Industry Canada programs, initiatives and services take into account the presence and needs of Canada's official language minority communities (OLMC) and support Canada's linguistic duality. Percentage of new Industry Canada programs and services that take into account the needs of OLMCs and support Canada's linguistic duality 100% In 2011–12, all new Industry Canada programs and services that needed to perform OL impact analysis used the OL filter to ensure a detailed analysis of the impact and the development of mitigation measures.
This target was also achieved in 2009–10 and 2011–12.
OLMC businesses in northern Ontario create jobs and attract investors. Ratio of funds raised from other sources to Economic Development Initiative (EDI) contributions 1:1.3 The ratio of funds raised from other sources to EDI contributions for 2011–12 is 1:1.2.
This represents 92% of the expected level of performance.
Number of jobs created and maintained in northern Ontario through EDI investments 100 Through EDI investments, a total of 113 jobs were created and maintained in northern Ontario.

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Results and performances by Strategic Outcome (continued)

Internal Services

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy
This image of the letter 'g' above a leaf indicates programming in this area that contributes to the Shrinking the Environmental Footprint – Beginning with Government goal of the Federal Sustainable Development Strategy

Program Description

Internal Services is composed of three groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are Governance and Management Support, Resource Management Services, and Asset Management Services.

Governance and Management Support includes Management and Oversight, Communications and Legal Services. Resource Management Services includes Human Resource Management, Financial Management, Information Management, Information Technology, and Other Administrative Services. Asset Management Services includes Real Property, Materiel and Acquisition.

Internal Services includes only those activities and resources that apply across an organization and not to those provided specifically to a program.

Figure 12: Financial ResourcesFootnote 45

Figure 12: Financial Resources ($ Millions)
Figure 12: Financial Resources ($ Millions)
  2009–10 2010–11 2011–12
Planned 82.9 92.6 143.6
Total Authorities 179 163 169.3
Actual 177.8 161.6 151.1

Figure 13: Human ResourcesFootnote 46

Figure 13: Human Resources (FTEs)
Figure 13: Human Resources (FTEs)
  2009–10 2010–11 2011–12
Planned 895 1,015 1,595
Actual 1,457 1,544 1,411

Footnotes

Footnote 45

In the 2011–12 RPP, the planned spending approach was revised to include the forecasted repayable contributions related to a former contribution program in support of our operational requirements. The previous exclusion of this amount creates an artificial variance in previous years between planned spending and total authorities.

Return to footnote 45 referrer

Footnote 46

2011–12 is the first year where the improvements made to the methodology used to calculate FTEs at Industry Canada was used in both the planning and reporting phases.

Return to footnote 46 referrer

Financial Resources ($millions) and Human Resources (FTEs)
Financial Resources ($ millions)Footnote 47 Human Resources (FTEs)Footnote 48
Program Activity 2010–11 Actual Spending
($ millions)
2011–12 ($ millions) Planned Actual Difference
Main Estimates Planned Spending Total Authorities Actual Spending

Footnotes

Footnote 47

Since 1996, the Department has a funding model whereby it can access up to $66 million in operating funds from repayable contributions of a former contributions program. These operating funds are accessed through Supplementary Estimates based on the amount collected in the previous year. To ensure the timely progress of program activities, Internal Services advances the funds to all other programs and is replenished when Supplementary Estimates are voted.
The total authorities and actual spending exclude amounts deemed appropriated to Shared Services Canada.

Return to first footnote 47 referrer

Footnote 48

Industry Canada has carefully controlled its headcount and all staffing decisions which resulted in lower actual FTEs. There was also a transfer of 123 employees to Shared Services Canada as of November 15, 2011, representing 44 FTEs for the year. The actual FTEs exclude those deemed appropriated to Shared Services Canada.

Return to footnote 48 referrer

Internal Services Total 161.6 93.3 143.6 169.3 151.1 1,595 1,411 184

Performance Summary and Analysis of Program Activity

Long-term financial affordability and prudent financial management have been a key focus of all financial decisions in 2011–12. Industry Canada continues to build on its existing stewardship and oversight practices to monitor program funding and expenditures. This includes conducting comprehensive monthly analyses of trends and forecasting in employee headcount, salary expenditures and non-salary expenditures at both the departmental and sector level to ensure affordability and sustainability. In addition, the Department has a strong Internal Audit function conducting audits to asses the management and internal controls of higher risk activities. Industry Canada also conducts rigorous oversight of major IT and non-IT projects to ensure benefits to Industry Canada and sound project management. These analyses are key elements in the decision-making process to ensure Industry Canada works within its allocated resource levels.

The department worked effectively and collaboratively through the impacts to its operations, management and accountabilities across a range of Internal Services in support of the creation of Shared Services Canada. Significant focus was placed on reviewing IT roles, responsibilities and operational processes following the creation of Shared Services Canada to ensure that IT systems and services continued to be available and reliable and supported sectors in the delivery of IT-enabled projects, most notably a project to optimize printer use and ratios in the department.

The 2009–10 to 2011–12 People Management Strategy for Renewal and Results (PMSRR) concluded in March 2012. Important work was done this year to improve efficiencies in Human Resources (HR) processes, improve leadership development, talent management strategies and support to employees and management. Supporting employees at all levels was improved with the introduction of new tools for the development of executives, with the student engagement initiative, and the creation of new development programs for employees.

Industry Canada reduced hiring and focused on vacancy management to reduce its headcount. Support was provided to managers for their people resources planning through the delivery of planning tools, advice, and work force and demographic analysis.

As part of its Strategic Review, Industry Canada is streamlining communications functions and resources to reduce overlap and duplication.

This image of the letter 'a' above a leaf indicates programming in this area that contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy This image of the letter 'g' above a leaf indicates programming in this area that contributes to the Shrinking the Environmental Footprint – Beginning with Government goal of the Federal Sustainable Development Strategy As a participant in the Federal Sustainable Development Strategy (FSDS), Industry Canada contributes to Greening Government Operations targets through its Internal Services program. In 2011–12, Industry Canada:

  • implemented a Green Building Strategy and Framework to meet the Greening of Government guidelines for reducing greenhouse gas emissions;
  • approved the Implementation Plan for the Disposal of Departmentally Generated Electronic and Electrical Equipment to the target audience in order to dispose of surplus equipment in accordance with the Treasury Board Secretariat's Directive on Disposal of Surplus Materiel and PWGSC's Guideline for the Disposal of Surplus Federal Electronic and Electrical Equipment;
  • exceeded its FSDS target and achieved a 5:1 ratio of employees to printing units and used a communication strategy to reinforce the Green Procurement Policy; and
  • developed a Guide to Green Meetings which is currently in the implementation phase.

Lessons Learned

The Management Accountability Framework (MAF) results for 2011–12 continue to demonstrate an overall improvement of Industry Canada's management practices. Of the 14 areas of management assessed, the department achieved seven strong and seven acceptable ratings. In its final assessment, TBS recognized Industry Canada for improving its management practices while operating in a demanding environment. Industry Canada will continue to advance its management practices to support efficient delivery of programs and services to Canadians.

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Canada's Economic Action Plan

In fiscal year 2011–12, Industry Canada continued to deliver on commitments related to Canada's Economic Action Plan (EAP) 2009. A significant portion of EAP resources was used to support science and technology, knowledge and innovation, which helped position the Canadian economy to excel in the global market. This was achieved through the following EAP initiatives:

Figure 15: Distribution of spending by EAP initiative

Figure 15: Distribution of spending by EAP initiative

Description of Figure : Distribution of spending by EAP initiative

Figure 15: Distribution of spending by EAP initiative
Knowledge Infrastructure Program Canada Foundation for Innovation Broadband Canada: Connecting Rural Canadians Institute Quantum Computing Ivey Center for Health Innovation and Leadership
56.3% 22.7% 19.1% 1.5% 0.3%

Figure 16: Financial ResourcesFootnote 49

Figure 16: Planned and Actual Financial Resources

Description of Figure :Figure 16: Financial Resources

Figure 16: Financial Resources ($ Millions)
  2009–10 2010–11 2011–12
Planned 0 1,322.1 154.7
Total Authorities 1,579.3 1,049.1 340
Actual 1,288.9 910.2 329.8

Figure 17: Human ResourcesFootnote 50

Figure 17: Planned and Actual Human Resources

Description of Figure

Figure 17: Human Resources (FTEs)
  2009–10 2010–11 2011–12
Planned 0 86 50
Actual 100 94 33

Footnotes

Footnote 49

Since the announcement of Canada's Economic Action Plan in the Budget 2009 speech was announced after the tabling of the 2009–10 RPP, there was no Planned Spending or Planned Human Resources associated with EAP for that year. Total Authorities, Planned Spending and Actual Spending associated with EAP increased in 2010–11 because funds for several key initiatives (KIP, Broadband) were deferred to match construction projects' cash requirements. As a result of the Government of Canada's decision to extend the program deadline for key infrastructure programs to October 31, 2011, funding totalling $250.1 million was reprofiled to 2011–12.

Return to footnote 49 referrer

Footnote 50

FTEs related to Canada's Economic Action Plan have reduced as the programs have ended.

Return to footnote 50 referrer

Canada's Economic Action Plan spending for 2011–12
Program 2010–11 Actual Spending
($ millions)
2011–12 ($ millions)
Main Estimates Planned Spending Total AuthoritiesFootnote 51 Actual Spending

Footnotes

Footnote 51

The variance between planned and actual spending is mainly related to deferred funding totalling $183 million from the previous year for the Knowledge Infrastructure Program to implement the Government of Canada's decision to extend the deadline for key infrastructure programs to October 31, 2011.

Return to footnote 51 referrer

Canada's Economic Action Plan Total 910.2 109.8 154.7 340.0 329.8

EAP: Broadband Canada: Connecting Rural Canadians

Program Description

As part of Canada's EAP, funding was provided for the development and implementation of a strategy to extend broadband Internet coverage. By far the largest component of this strategy is the Broadband Canada: Connecting Rural Canadians program. Broadband Internet access is viewed as essential infrastructure for participating in today's economy as it enables citizens, businesses and institutions to access information, services and opportunities that could otherwise be out of reach. Broadband Canada's goal is to encourage the expansion and availability of broadband connectivity to as many currently unserved and underserved households in Canada as possible. The program aims to provide essential infrastructure to Canadians in rural and remote areas, allowing them to participate in the digital economy. Broadband Canada: Connecting Rural Canadians falls under Program Activity: Community, Economic Development.

Financial Resources ($ millions) and Human Resources (FTEs) for Broadband Canada: Connecting Rural Canadians
Financial Resources
($ millions)
Human Resources
(FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
69.9 69.9 63.1 22 19 3
Expected Results and performance indicators for Broadband Canada
Expected Result Performance Indicator Target Actual Results
The Broadband Canada: Connecting Rural Canadians program is expected to expand broadband coverage to as many unserved and underserved households in Canada as possible, beginning in 2009–10. Percentage of projects completed by March 31, 2012 100 percent 67 percent of projects were completed by March 31, 2012.

The program has 84 projects in total. As of March 31, 2012, 56 projects were completed and 181,000 households (or 83 percent of the total program target of 218,000) had broadband access.

On March 31, 2012, scheduled completion dates for the remaining 28 projects were as follows: 12 by May 31, 2012; 11 by June 30, 2012; 3 by July 31, 2012; 1 by August 31, 2012 and 1 by October 1, 2012. The delays encountered were with respect to obtaining the necessary permits and/or land use agreements.

Performance Summary and Analysis of Program

In the 2011–2012 fiscal year, the program moved into project implementation mode and the vast proportion of the project work was completed. In April 2011, 72,000 households had access to the Internet as a result of the program. By March 31, 2012, that number changed to 181,000 households. Thirty site visits were undertaken to monitor implementation, and recipient audits were started.

EAP: Knowledge Infrastructure Program

Program Description

The Knowledge Infrastructure Program (KIP) is an initiative from the EAP aimed at stimulating economies in local communities by accelerating repairs, maintenance and undertaking new construction at post-secondary institutions. This initiative was implemented through contribution agreements with the provinces and territories, and in some cases directly with institutions. External funding from the provinces and territories and recipient institutions was leveraged to complete these projects. KIP falls under Program Activity: Science, Technology and Innovation Capacity.

Financial Resources ($ millions) and Human Resources (FTEs) for Knowledge Infrastructure Program
Financial Resources
($ millions) Footnote 52
Human Resources
(FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference

Footnotes

Footnote 52

The variance between Planned and Actual Spending is mainly related to deferred funding totalling $183.0 million from the previous year for the Knowledge Infrastructure Program to implement the Government of Canada's decision to extend the deadline for key infrastructure programs to October 31, 2011.

Return to footnote 52 referrer

3.7 189.1 185.6 19 14 5
Expected Results and Performance Indicators
Expected Result Performance Indicator Target Actual Results
Knowledge Infrastructure Program:
Provide economic stimulus in local economies across Canada through infrastructure investments at post-secondary institutions
Total value of approved projects at colleges and universities $2 billion by October 31, 2011 The entire budget was allocated in support of 520 renovation, repair and expansion projects in 190 communities covering every province and territory across Canada. These projects enhanced research facilities, expanded training capacity, increased energy efficiency, improved health and safety and supported business incubators.

Performance Summary and Analysis of Program

For each of the 520 projects, key lasting benefits were identified in the following five categories (with many projects generating benefits in more than one category): enhanced research facilities; expanded training capacity; increased energy efficiency; improved health and safety; and supported business incubators.

EAP: Institute for Quantum Computing

Program Description

Funding to the Institute for Quantum Computing (IQC) includes support to build a new facility and to operate the institute (e.g., purchase essential small equipment, recruit and retain highly qualified personnel and support staff, and undertake scientific outreach activities). Located at the University of Waterloo, IQC is a world-class research institute that is devoted to addressing foundational issues in quantum information sciences and technology.

Financial Resources ($ millions) and Human Resources (FTEs) for the Institute for Quantum Computing
Financial Resources
($ millions)
Human Resources
(FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
5.0 5.0 5.0 0 0 0

Performance Summary and Analysis of Program

In February 2009, Treasury Board approved $50 million in funding to IQC. Construction of a new facility for IQC was substantially completed in July 2011. The grand opening for the new Mike and Ophelia Laziridis Quantum Nano Centre was held on September 21, 2012. The Institute will be staffed by 30 world-class faculty members in the field of quantum computing within five years.

EAP: Canada Foundation for Innovation

Program Description

The Canada Foundation for Innovation (CFI) is an independent corporation created by the Government of Canada to fund research infrastructure. CFI's mandate is to strengthen the capacity of Canadian universities, colleges, research hospitals and not-for-profit research institutions to carry out world-class research and technology development that benefits Canadians. CFI falls under Program Activity: Science, Technology and Innovation Capacity.

Financial Resources ($ millions) and Human Resources (FTEs) for the Canada Foundation for Innovation
Financial Resources
($ millions)
Human Resources
(FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
75.0 75.0 75.0 0 0 0

Performance Summary and Analysis of Program

To accelerate investments in leading-edge facilities and equipment, Canada's Economic Action Plan 2009 provided $150 million to top up the funding available for the CFI's 2009 Leading Edge and New Initiatives Funds competition. This competition, which also committed $510 million that had been provided through Budget 2007, resulted in awards for a total of 133 projects at 41 research institutions across Canada. In addition, the Economic Action Plan also provided $600 million for the CFI to launch new competitions. All new competitions have been launched, with funding beginning to flow to recipients in 2012–13.

EAP: Ivey Centre for Health Innovation and Leadership

Program Description

The Ivey Centre for Health Innovation and Leadership prepares health leaders with the skills they need to identify, assess and facilitate the adoption of innovative technologies, systems and processes that our health systems need in order to be sustainable. The Centre addresses health care's "innovation adoption deficit" and the persistent lack of highly trained and skilled leaders and change-agents able to commercialize innovation or effectively implement new systems and management processes both in the private sector and in our publicly funded health care institutions. Ivey Centre for Health Innovation and Leadership falls under Program Activity: Science, Technology and Innovation Capacity.

Financial Resources ($ millions) and Human Resources (FTEs) for the Ivey Centre for Health Innovation and Leadership
Financial Resources
($ millions)
Human Resources
(FTEs)
Planned Spending Total Authorities Actual Spending Planned Actual Difference
1.1 1.1 1.1 0 0 0

Performance Summary and Analysis of Program

In March 2009, Treasury Board approved $5 million in funding to the Ivey Centre for Health Innovation and Leadership (Ivey Centre). The $5 million contribution is to support the following activities and costs: management and administration of the Ivey Centre; identification and execution of Demonstration Projects; and outreach activities, including the Ivey Centre's annual Global Health Innovations Conference and dissemination of knowledge and results generated by the Ivey Centre.

Since 2009, the Ivey Centre has become fully functional with a permanent staff and Advisory Council in place; three demonstration projects have been executed with seven planned for 2012–13; over 20 partnerships with private-sector and not-for-profit partners have been developed; three annual conferences have occurred; and five white papers have been released and disseminated.

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Financial Highlights and Statements

The financial highlights presented within this DPR are intended to serve as a general overview of Industry Canada's financial position and operations. The Department's financial statements can be found on this page.

Financial Highlights

Condensed Statement of Financial Position (unaudited)
as at March 31, 2012
  % Change (in thousands of dollars)
2011–12 2010–11
(Restated)
Total net liabilities 13% 1,169,600 1,037,047
Total net financial assets 36% 450,652 330,213
Departmental net debt 2% 718,948 706,834
Total non-financial assets -4% 94,684 98,334
Departmental net financial position 3% (624,264) (608,500)
Condensed Statement of Operations and Departmental Net Financial Position (unaudited)
For the year ended March 31, 2012
  % Change (in thousands of dollars)
2011–12 2010–11
(Restated)
Total expenses -28% 1,521,625 2,106,064
Total revenues 5% 165,865 157,983
Net cost from continuing operations -30% 1,355,760 1,948,081
Net cost of transferred operations -49% 9,882 19,197
Net cost of operations before government funding and transfers -31% 1,365,642 1,967,278
Departmental net financial position 3% (624,264) (608,500)

Summary of Financial Results

The financial results presented in Industry Canada financial statements are shaped by the three strategic outcomes and associated internal services that aim to help make Canadian industry more productive and competitive in the global economy, thus improving the economic and social well-being of Canadians.

Accounting changes

During the year, the revised Treasury Board Accounting Standard regarding Departmental Financial Statements was issued and adopted by Industry Canada. The main change is that departments must now present a net debt indicator. Net debt represents the difference between a department's net liabilities and net financial assets. The effect of reporting a net debt indicator for departments is that a distinction must be made between amounts on the financial statements which are under the direct control of the Deputy Head and those which are held on behalf of Government. Furthermore, Industry Canada now presents a Statement of Change in Net Debt and no longer presents a Statement of Equity.

Effective November 15, 2011, Industry Canada transferred responsibility for the Email, Data Centre and Network Services Unit and Support Unit to Shared Services Canada in accordance with Order-in-Council P.C. 2011–1297, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, this represents $2.52 million in assets and $1.69 million in liabilities that were transferred to Shared Services Canada on November 15, 2011.

Assets by Type

Figure 18: Assets by Type
Figure 18: Assets by Type
Loans Receivable held on behalf of Government Due from CRF Tangible Capital Assets Accounts Receivable held on behalf of Government Accounts Receivable
50% 39% 8% 2% 1%

Total net financial assets were $451 million for 2011–12, an increase of $120 million (36%), while gross financial assets were $1.02 billion, an increase of $241 million (31%). This increase can be mostly attributed to the $120 million (38%) increase in the Due from Consolidated Revenue Fund account, which is dependant on year-end payable levels in the department and is a representation of the funds the department has access to for discharging its liabilities without requiring further parliamentary approvals. In addition, there was an increase in loan payments made during the year of approximately $112 million which can be partially attributed to the Industrial Technologies Office (ITO), which provides loans through the Strategic Aerospace and Defence Initiative (SADI) program to aerospace and defence (A&D) firms and partially attributed to loans provided under the Automotive Innovation Fund (AIF) to foster innovative automotive R&D in Canada. When these loans become repayable, Industry Canada cannot respend the amounts received without approval from Parliament, therefore, the entire amount of loans is reported as held on behalf of Government and a net loan amount of zero is reported in the departmental financial statements.

Liabilities by Type

Figure 19: Liabilities by Type
Figure 19: Liabilities by Type
Deferred Revenue Held on behalf of Government Accounts Payable and Accrued Liabilities Allowance for Loan Guarantees Other Liabilities Deferred Revenue
73% 15% 7% 3% 2%

Total net liabilities were $1.17 billion for 2011–12, an increase of $133 million (13%), while gross liabilities were $4.37 billion, a decrease of $357 million (8%). Accounts Payable increased $198 million this fiscal year, which can be mainly attributed to timing differences for large grants and contributions payments compared to last year. In addition, deferred revenue decreased by $489 million, much of this decrease is the recognition of radio spectrum licenses sold in the 2GHz range by auctions in prior fiscal years and recognized as revenue over the period of the license resulting in a decrease in gross deferred revenues. These radio licenses are managed by the Spectrum, Telecommunications and the Online Economy program activity. A significant portion (97.3%) of the deferred revenue cannot be respent by Industry Canada and is, therefore, reported as a liability held on behalf of Government, reducing the departmental liabilities by $3.2 billion.

Expenses by Type

Figure 20: Expenses by Type
Figure 20: Expenses by Type
Transfer Payments Salaries and Employee Benefits Other Operating Expenditures
47% 37% 16%

Total expenses were $1.52 billion in 2011–12, a decrease of $584 million (28%). This is largely attributable to a decrease in transfer payment expenses, primarily a $508 million reduction in the Knowledge Infrastructure Program (under the Science, Technology and Innovation Capacity program activity) as final payments of the Economic Action Plan (EAP) are being made. This program was designed to enhance infrastructure to Canadian colleges and universities. Operating expenses for the department have remained in the $800 million dollar range.

Revenues by Type

Figure 21: Revenues by Type
Figure 21: Revenues by Type
Radio Spectrum Licenses earned on behalf of Government Other Sales of Services Other Sales of Services earned on behalf of Government Other Revenues earned on behalf of Government
71% 15% 11% 3%

Total gross revenues were $1.12 billion in 2011–12, a decrease of approximately $6 million (1%), while net revenues were $166 million, an increase of $8 million (5%). The majority of reported revenue in the departmental financial statements is attributed to the recognition of radio spectrum revenue managed by the Spectrum, Telecommunications and the Online Economy program activity. This type of revenue reflects the recognition of Radio spectrum auction license fees received in prior fiscal years, particularly, $4.26 billion received and deferred in 2008–09 for the 2 GHz range. As this revenue cannot be respent by the department it is reported as Revenue earned on behalf of Government, decreasing the gross departmental revenues. Other sales of services represent legislative fees and registrations through organizations such as the Canadian Intellectual Property Office ($145 million), the Office of the Superintendent of Bankruptcy ($48 million), Canada Small Business Financing Program ($54 million), Communications Research Centre ($14 million), Corporations Canada ($13 million), Competition Bureau ($10 million) and Measurement Canada ($1 million). A portion of these revenues (43%) are reported as Revenues earned on behalf of Government. Finally, other revenue earned on behalf of Government includes $25 million in fines collected under the Competition Act by the Competition Bureau.

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Department of Industry (033)

Statement of Management Responsibility Including Internal Control over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2012, and all information contained in these statements rests with the management of Industry Canada. These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of Industry Canada's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in Industry Canada's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that the financial information is reliable; that assets are safeguarded; and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout Industry Canada; and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess the effectiveness of associated key controls and to make necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2012, was completed in accordance with the Policy on Internal Control, and the results and action plans are summarized in Industry Canada's management report on Internal Control over Financial Reporting for the fiscal year ending March 31, 2012.

The effectiveness and adequacy of Industry Canada's system of internal control is reviewed through the work of internal audit staff, who conduct periodic audits of different areas of Industry Canada operations; and by the Departmental Audit Committee, which oversees management's responsibilities for maintaining adequate control systems and the quality of financial reporting, and which is required to review the departmental financial statements with management and all significant accounting estimates and judgments therein and advise the deputy head.

The financial statements of Industry Canada have not been audited.

space to insert signature
Simon Kennedy, Acting Deputy Head
August 28, 2012

Champ de saisie de la signature
Susan Bincoletto, Chief Financial Officer
August 23, 2012

Ottawa, Canada

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Financial Statements

Consolidated Statement of Financial Position (unaudited)
As at March 31
(in thousands of dollars)
  2012   2011
      Restated
(Note 16)

Contractual Obligations (note 11)

Contingent Liabilities (note 12)

The accompanying notes form an integral part of these financial statements.

Liabilities
Accounts payable and accrued liabilities (note 4) $ 635,171   $ 437,258
Vacation pay and compensatory leave 23,938   25,896
Deferred revenue (note 5) 3,286,878   3,775,636
Allowance for loan guarantees (note 12) 314,969   360,023
Employee future benefits (note 6) 71,930   92,252
Other liabilities (note 7) 36,265   34,739
Total gross liabilities 4,369,151   4,725,804
 
Liabilities held on behalf of Government
Deferred revenue (note 5) (3,199,551)   (3,688,757)
Total liabilities held on behalf of Government (3,199,551)   (3,688,757)
 
Total net liabilities 1,169,600   1,037,047
 
Financial assets
Due from the Consolidated Revenue Fund 439,009   318,618
Accounts receivable and advances (note 8) 39,190   41,709
Loans receivable (note 9) 545,691   422,703
Total gross financial assets 1,023,890   783,030
 
Financial assets held on behalf of Government
Accounts receivable and advances (note 8) (27,547)   (30,114)
Loans receivable (note 9) (545,691)   (422,703)
Total financial assets held on behalf of Government (573,238)   (452,817)
 
Total net financial assets 450,652   330,213
       
Departmental net debt 718,948   706,834
 
Non-financial assets
Prepaid expenses 582   555
Tangible capital assets (note 10) 94,102   97,779
Total non-financial assets 94,684   98,334
 
Departmental net financial position $ (624,264)   $ (608,500)

space to insert signature
Simon Kennedy, Acting Deputy Head
August 28, 2012

space to insert signature
Susan Bincoletto, Chief Financial Officer
August 23, 2012

Ottawa, Canada


Consolidated Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31
(in thousands of dollars)
2012   2012   2011
  Planned Results   Restated
(note 16)

Segmented information (note 15)

The accompanying notes are an integral part of these financial statements.

Expenses
The Canadian Marketplace is Efficient and Competitive $ 454,382   $ 422,893   $ 406,396
Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy 523,925   621,297   1,226,794
Canadian Businesses and Communities Are Competitive 293,662   252,057   274,846
Internal Services 174,168   229,741   202,836
Expenses incurred on behalf of Government (6,676)   (4,363)   (4,808)
Total Expenses 1,439,461   1,521,625   2,106,064
 
Revenues
Radio spectrum licenses 757,124   793,005   825,282
Sales of services 277,229   291,419   283,907
Revenue from fines 7,000   25,024   11,188
Amortization of discounts 3,533   8,610   3,776
Other revenue 444   905   1,342
Gain on disposal of assets -   210   275
Revenues earned on behalf of Government (832,559)   (953,308)   (967,787)
Total Revenues 212,771   165,865   157,983
 
Net cost from continuing operations 1,226,690   1,355,760   1,948,081
 
Transferred operations (note 14)
Expenses 8,981   9,882   19,197
Net cost of transferred operations 8,981   9,882   19,197
 
Net Cost of Operations before government funding and transfers 1,235,671   1,365,642   1,967,278
 
Government funding and transfers
Net cash provided by Government 1,141,966   1,141,559   2,319,493
Change in due from the Consolidated Revenue Fund 69,610   120,391   (332,926)
Services provided without charge by other government departments (note 13) 88,486   88,757   88,424
Transfer of assets and liabilities to other government departments (note 14) -   (829)   -
Net cost (revenue) of operations after government funding and transfers (64,391)   15,764   (107,713)
 
Departmental net financial position – Beginning of year (529,968)   (608,500)   (716,213)
           
Departmental net financial position – End of year $ (465,577)   $ (624,264)   $ (608,500)
 

Consolidated Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31
(in thousands of dollars)
  2012   2012   2011
  Planned Results        

The accompanying notes are an integral part of these financial statements.

 
Net cost (revenue) of operations after government funding and transfers $ (64,391)   $ 15,764   $ (107,713)
 
Change due to tangible capital assets
  Acquisition of tangible capital assets 9,299   14,232   13,276
  Amortization of tangible capital assets (12,697)   (14,976)   (15,907)
  Proceeds from disposition of tangible capital assets -   (220)   (258)
  Net (loss) gain on disposal of tangible capital assets including adjustments (1,351)   (195)   401
  Transfer to other government departments -   (2,518)   -
Total change due to tangible capital assets (4,749)   (3,677)   (2,488)
 
Change due to prepaid expenses (19)   27   (470)
 
Net increase (decrease) in departmental net debt (69,159)   12,114   (110,671)
 
Departmental net debt – Beginning of year 633,494   706,834   817,505
 
Departmental net debt – End of year $ 564,335   $ 718,948   $ 706,834

Consolidated Statement of Cash Flows (Unaudited)
For the Year Ended March 31
(in thousands of dollars)
  2012   2011
  Restated
(note 16)

The accompanying notes are an integral part of these financial statements.

Operating activities
  Net cost of operations before government funding and transfers $ 1,365,642   $ 1,967,278
  Non-cash items:      
  Amortization of tangible capital assets (14,976)   (15,907)
  Net (loss) gain on disposal of tangible capital assets (44)   208
  Loss on write-offs of tangible capital assets (571)   -
  Adjustment to tangible capital assets 420   193
  Services provided without charge by other government departments (note 13) (88,757)   (88,424)
 
  Variations in Statement of Financial Position:
  Increase (decrease) in accounts receivable  48   (422)
  Increase (decrease) in prepaid expenses  27   (470)
  Decrease (increase) in accounts payable and accrued liabilities (197,913)   431,586
  Decrease (increase) in vacation pay and compensatory leave 1,958   320
  Decrease (increase) in deferred revenue (448)   2,161
  Decrease (increase) in allowance for loan guarantees  45,054    16,676
  Decrease (increase) in employee future benefits  20,322   (4,765)
  Decrease (increase) in other liabilities (1,526)   (1,959)
  Transfer of liabilities to other government departments (note 14) (1,689)   -
Cash used in operating activities 1,127,547   2,306,475
 
Capital investing activities:
  Acquisitions of tangible capital assets  14,232    13,276
  Proceeds from disposal of tangible capital assets (220)   (258)
Cash used in capital investing activities  14,012    13,018
 
Net cash provided by Government of Canada $ 1,141,559   $ 2,319,493

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

  1. Authority and Objectives

    The authorities for the programs for which Industry Canada is responsible are derived from the Department of Industry Act. Many other acts are under the responsibility of the Minister of Industry, and Treasury Board also defines other specific Industry Canada authorities.

    Industry Canada aims to help make Canadian industry more productive and competitive in the global economy, thus improving the economic and social well-being of Canadians through its three strategic outcomes, which are mutually reinforcing. Fostering competitiveness helps advance the marketplace by developing and administering economic framework policies that promote competition and innovation; support investment and entrepreneurial activity; and instill consumer, investor and business confidence. Investing in science and technology to generate knowledge and equip Canadians with the skills and training they need to compete and prosper in the global, knowledge-based economy helps ensure that discoveries and breakthroughs happen here in Canada, and that Canadians can realize the social and economic benefits. Promoting economic development in communities helps support business by encouraging the development of skills, ideas and opportunities across the country. Taken together, Industry Canada's strategic outcomes support growth in employment, income, productivity and sustainable development in Canada.

    Internal Services are groups of activities and resources that are administered to support the needs of programs and other corporate obligations of Industry Canada. Internal Services include only those activities and resources that apply across Industry Canada, not those provided specifically to a program.

    Industry Canada's activities are delivered at its headquarters in Ottawa as well as in the regions. There are five regional offices with service points located across Canada and an office for FedNor.

    Industry Canada has a number of transfer payment programs through which it provides grants and contributions to recipients in targeted groups and sectors. Each transfer payment program has specific objectives and expected results that support the achievement of Industry Canada's strategic objectives.

  2. Summary of Significant Accounting Policies

    These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from the Canadian public sector accounting standards.

    Significant accounting policies are as follows:

    1. Parliamentary authorities—Industry Canada is financed by the Government of Canada  through Parliamentary authorities. Financial reporting of authorities provided to Industry Canada 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 the 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 Statement of Operations and Departmental Net Financial Position are consistent with the amounts reported in the Future-Oriented Financial Statements included in the 2011–12 Report on Plans and Priorities.

      The future-oriented financial statements for 2011–12 have been restated to reflect the revenue net of non-respendable amounts. This restatement resulted in an $832,559,000 increase in net costs of operations before government funding and transfers. In addition, the future-oriented financial statements have also been reclassified to conform to the current year presentation.

    2. Consolidation—The consolidated financial statements include the accounts of Industry Canada and the Canadian Intellectual Property Office (CIPO) Revolving Fund. The accounts of this sub-entity have been consolidated with those of Industry Canada and all inter-organizational balances and transactions have been eliminated.
    3. Net cash provided by Government—Industry Canada operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by Industry Canada is deposited to the CRF and all cash disbursements made by Industry Canada 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 departments of the Government.
    4. Amounts due from/to the CRF—The amounts are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represents the net amount of cash that Industry Canada is entitled to draw from the CRF without further appropriations to discharge its liabilities.
    5. Revenues
      • Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
      • Funds received from external parties for specified purposes are recorded upon receipt as deferred revenues. These revenues are recognized in the period in which the related expenses are incurred.
      • Funds that have been received are recorded as deferred revenues, provided that Industry Canada has an obligation to other parties for the provision of goods, services or the use of assets in the future.
      • Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.
      • Revenues that are non-respendable are not available to discharge Industry Canada's liabilities. While the Deputy Head is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as the entity's gross revenues.
    6. Expenses
      • 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. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and 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, the employer's contribution to the health and dental insurance plans, workers' compensation costs, and legal services are recorded as operating expenses at their estimated cost.
    7. Employee future benefits
      1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multi-employer pension plan administered by the Government. Industry Canada's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Industry Canada's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
      2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
    8. Accounts and loans receivable—These accounts and loans receivable are stated at the lower of cost and net recoverable value. However, when the terms of the loans are concessionary, such as those provided with a low or no interest clause, they are recorded at their estimated present value. An unamortized discount is used to reduce the carrying value of the loans to amounts that approximate their net realizable value. A portion of the discount is recorded as revenue each year to reflect the change in the present value of outstanding loans. Transfer payments that are unconditionally repayable are recognized as loans receivable. A valuation allowance is recorded for accounts and loans receivable where recovery is considered uncertain.
    9. Allowances for loan guarantees—An allowance for loan guarantees is recorded for potential losses on loan guarantees when it is likely that a payment will be made in the future to honour a guarantee and when the amount of the loss can be reasonably estimated.

      The allowance for losses on outstanding loan guarantees is based on forecasting models developed by program areas.

    10. Prepaid expenses—Prepaid expenses include deferred charges and payments where, pursuant to a contract or contribution agreement, a payment is made before the completion of the work, delivery of the goods or rendering of the service.
    11. 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 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.
    12. Foreign currency transactions—Foreign currency transactions are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect at the year-end. Gains and losses resulting from foreign currency transactions are included in the Statement of Operations and Departmental Net Financial Position.
    13. 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. Industry Canada does not capitalize intangibles; works of art and historical treasures that have cultural, aesthetic or historical value; assets located on Indian Reserves; and museum collections.

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

      Tangible capital assets
      Asset Class Amortization Period
      Buildings 15 to 30 years
      Works and infrastructure 30 years
      Machinery and equipment 3 to 10 years
      Vehicles 5 to 10 years
      Computer hardware 5 to 10 years
      Computer software 3 to 10 years
      Assets under construction Once in service, in accordance with asset type
      Leasehold improvements Lesser of the remaining term of the lease or useful life of the improvement

      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.

    14. Measurement uncertainty—The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, environmental liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could differ significantly from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
  3. Parliamentary Authorities

    Industry Canada receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, Industry Canada has different net results of operations for the year on a government-funding basis than on an accrual-accounting basis. The differences are reconciled in the following tables:

    (a) Reconciliation of net cost of operations to current year authorities used
      2012 2011
        Restated (note 16)
      (in thousands of dollars)
    Net cost of operations before government funding and transfers $ 1,365,642 $ 1,967,278
     
    Adjustments for items affecting net cost of operations but not affecting authorities:  
     
    Repayment of conditionally repayable contributions 134,979 155,096
    Services provided without charge by other government departments (88,757) (88,424)
    Provision for loan guarantees 46,105 17,459
    Bad debts/write-offs/write-down (571) -
    Amortization of tangible capital assets (14,976) (15,907)
    Decrease (increase) in employee future benefits 19,271 (4,765)
    Adjustment of previous year's Accounts Payable 12,419 14,182
    Refund of prior year's expenditures 4,247 6,763
    Transfer payment adjustments - (128,368)
    Increase in accrued liabilities (59,930) (934)
    Increase in vacation pay and compensatory leave 936 (73)
    Net (loss) gain on disposal and write-down of tangible capital assets (44) 208
    Year-end accrual of transfer payments (69,528) 91,900
    Other 150 (951)
    Total items affecting net cost of operations but not affecting authorities (15,699) 46,186
     
    Adjustments for items not affecting net cost of operations but affecting authorities:  
     
    Increase in loans and advances 134,651 80,295
    Revenue available for spending (52,500) (52,431)
    Increase in allowance for vacation and compensatory leave 384 393
    Acquisitions of tangible capital assets 14,232 13,276
    Total items not affecting net cost of operations but affecting authorities 96,767 41,533
     
    Current year authorities used $ 1,446,710 $ 2,054,997
    (b) Authorities provided and used
      2012 2011
      (in thousands of dollars)
    Authorities Provided:
    Vote 1 – Operating expenditures $ 441,380 $ 442,489
    Vote 5 – Capital expenditures 15,611 15,516
    Vote 10 – Grants and contributions 750,346 1,419,804
    Statutory amounts 540,908 656,500
      1,748,245 2,534,309
    Less:
    Authorities available for future years 165,310 160,377
    Lapsed authorities: Operating expenditures 37,615 25,626
      Capital expenditures 1,633 681
      Grants and contributions 96,067 291,828
      Proceeds from the disposal of crown assets 110 -
      Other 800 800
    Current year authorities used $ 1,446,710 $ 2,054,997

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31 (continued)

  1. Accounts Payable and Accrued Liabilities

    The following table presents details of Industry Canada's accounts payable and accrued liabilities:

    Accounts Payable and Accrued Liabilities
      2012 2011
      (in thousands of dollars)
     
    Accounts payable to other government departments and agencies $ 16,698 $ 17,198
    Accounts payable to external parties 384,654 267,144
    Year-end accrual – pending Budget Implementation Act 168,900 150,010
    Accrued salaries and wages 3,732 1,667
    Other external payables 57 39
    Total accounts payable 574,041 436,058
     
    Accrued liabilities 61,130 1,200
     
    Total accounts payable and accrued liabilities $ 635,171 $ 437,258

    In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years starting in 2012–13. As a result, the Department has recorded at March 31, 2012 an obligation for termination benefits for an amount of $31.7 million as part of accrued liabilities to reflect the estimated workforce adjustment costs.

    Accrued liabilities also contain a settlement agreement in the amount of $29 million for a legal matter.

  2. Deferred Revenue

    The majority of Industry Canada's deferred revenues results from the auction of radio licence frequencies. These revenues are recognized over a 10-year period. Another main source of deferred revenues comes from examination requests of intellectual property. These fees are charged in advance and recognized as revenue once the examination is completed.

    Prime Minister's Awards were established to record amounts deposited by external parties to be used in support of the Prime Minister's Awards for Teaching Excellence.

    Deferred Revenue
      2012 2011
        Restated
    (note 16)
      (in thousands of dollars)
     
    Opening balance $3,775,636 $4,376,729
     
    Licence fees received 245,118 207,800
    Licence fees earned 734,324 806,732
      (489,206) (598,932)
     
    Fees for trademarks, patents and copyrights received 25,671 27,740
    Fees for trademarks, patents and copyrights earned 25,037 31,159
      634 (3,419)
     
    Other services of a regulatory nature received 502 203
    Other services of a regulatory nature earned 203 155
      299 48
     
    Prime Minister's awards received 100 100
    Prime Minister's awards disbursed 123 -
      (23) 100
     
    Customer deposits received 76,779 65,312
    Customer deposits disbursed 77,241 64,202
      (462) 1,110
     
    Gross closing balance 3,286,878 3,775,636
     
    Deferred revenues held on behalf of Government (3,199,551) (3,688,757)
     
    Net closing balance $87,327 $86,879

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31 (continued)

  1. Employee Future Benefits
    1. Pension benefits

      Industry Canada's employees participate in the Public Service Pension 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/Quebec Pension Plan benefits and they are indexed to inflation.

      Both the employees and Industry Canada contribute to the cost of the Plan. The 2011–12 expense amounts to $54,268,146 ($56,437,460 in 2010–11), which represents approximately 1.8 times (1.9 times in 2010–11) the contributions by employees.

      Industry Canada's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

    2. Severance benefits

      Industry Canada provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

      As part of the collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid in full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

      Severance benefits
        2012 2011
        (in thousands of dollars)
       
      Accrued benefit obligation – Beginning of year $ 92,252 $ 87,487
       
      Transferred to other government departments (note 14) (1,051) -
       
      Subtotal 91,201 87,487
       
      Expense for the year 13,298 14,149
       
      Benefits paid during the year (32,569) (9,384)
       
      Accrued benefit obligation – End of year $ 71,930 $ 92,252
  2. Other Liabilities

    Other liabilities represent amounts received from third parties to be disbursed for a specified purpose. Activity during the year in these accounts is as follows:

    Other Liabilities
      Opening Balance Receipts Payments Closing Balance
      (in thousands of dollars)
     
    Restitutions under the Competition Act 2 - - 2
    Cost-sharing projects 1,237 611 843 1,005
    Securities in trust and income from securities in trust, Bankruptcy and Insolvency Act (BIA) 83 - - 83
    Contra – Securities in trust (BIA) (31) - - (31)
    Petro Canada Enterprises Inc. unclaimed shares 689 - - 689
    Canada Business Corporations Act (CBCA) 8,985 320 99 9,206
    Unclaimed dividends and undistributed assets (BIA, CBCA) 21,839 2,457 1,065 23,231
    Winding-up and Restructuring Act 1,908 - - 1,908
    Canada/Provinces Business Service Centre 27 400 255 172
    Total other liabilities $ 34,739 $ 3,788 $ 2,262 $ 36,265

    Restitutions under the Competition Act — This account was established to facilitate judgments rendered under Article 52 of the Competition Act, and to account for monies received in trust for restitution and for subsequent payment.

    Cost-sharing Projects — Industry Canada partners with other governments and external organizations to deliver programs and services that contribute to an innovative economy. The account was established to record amounts deposited by these partners.

    Securities in Trust and Income from Securities in Trust, Bankruptcy and Insolvency Act — This account was established to record dividends paid on shares held by a bankrupt stockbroker on behalf of clients. As the shares were not registered in clients' names, dividends are paid to the last registered owner, in this case, the stockbroker. These dividends are forwarded to the Superintendent of Bankruptcy until such time as rightful owners are identified.

    Unclaimed Dividends and Undistributed Assets, Bankruptcy and Insolvency Act — This account represents amounts credited to the Receiver General in accordance with the provisions of the Act, pending distribution to creditors.

    Petro-Canada Enterprises Inc. unclaimed shares — This account was established to record the liability to shareholders who have not presented their shares for payment in accordance with Section 227 of the Canada Business Corporations Act.

    Unclaimed Dividends and Undistributed Assets, Canada Business Corporations Act — This account was established for the purpose of recording liabilities to creditors and shareholders who have not been located. The account is charged when funds are paid to them.

    Winding-up and Restructuring Act — This account records deposits credited to the Receiver General as a result of the final winding-up of the operations of a company, in accordance with sections 138 and 139 of the Winding-up and Restructuring Act, pending distribution to the persons entitled thereto.

    Canada/Provinces Business Service Centre — This account was established to record monies received from provinces under cost-sharing agreements for the Canada-Ontario Business Service Centre.

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31 (continued)

  1. Accounts receivable and advances

    The following table presents details of Industry Canada's accounts receivable and advances balances:

    Accounts receivable and advances
      2012 2011
        Restated
    (note 16)
      (in thousands of dollars)
     
    Receivables from other government departments and agencies $ 12,290 $ 17,691
    Accounts receivable from external parties 26,277 30,820
    Accrued receivables 23,685 18,094
    Other accounts receivables and advances 91 196
    Total external 62,343 66,801
     
    Allowance for doubtful accounts on receivables from external parties (23,153) (25,092)
       
    Gross accounts receivables and advances 39,190 41,709
       
    Accounts receivable held on behalf of Government (27,547) (30,114)
     
    Net accounts receivable $ 11,643 $ 11,595
  2. Loans

    The following table presents details of the Industry Canada's loans and unconditionally repayable contributions:

    Loans
      2012 2011
        Restated
    (note 16)
      (in thousands of dollars)
     
    Enterprise development loans $ 110,000 $ 110,000
    Less: Unamortized discount loans 17,291 20,750
    Net Enterprise development loans 92,709 89,250
     
    Unconditionally repayable contributions 582,462 470,085
    Less: Unamortized discount 128,262 133,414
    Less: Allowance for doubtful loans and advances 1,218 3,218
    Net unconditionally repayable contributions 452,982 333,453
     
    Loans on expired loan guarantees 77,257 97,521
    Less: Allowance for doubtful loans 77,257 97,521
    Net loans on expired loan guarantees - -
     
    Gross loans receivable 545,691 422,703
     
    Loans held on behalf of Government (545,691) (422,703)
     
    Net loans receivable $- $-

    Enterprise development loans — These loans are made to manufacturing, processing or service industries in Canada in order to promote the establishment, improvement, growth, efficiency or international competitiveness of such industries, or to assist them in their financial restructuring. There is one interest-free loan outstanding, which is repayable at maturity on April 1, 2017.

    Unconditionally repayable contributions — Loans have been made to various recipients under several programs managed by Industry Canada, including the Strategic Aerospace Defence Initiative (SADI), Technology Partnerships Canada (TPC), the Defence Industries Productivity Program (DIPP) and the Automotive Innovation Fund (AIF). All have different repayment terms and maturity dates that are included in the individual agreement. The unamortized discount on unconditionally repayable contributions is calculated by applying the 25% rule on an individual loan basis.

    Loans on expired loan guarantees — Industry Canada guarantees loans to small business enterprises under the Small Business Loans Act, the Canada Small Business Financing Act, the Capital Leasing Pilot Project and other loan guarantee payments net of recoveries.

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31 (continued)

  1. Tangible Capital Assets
    Tangible Capital Assets (in thousands of dollars)
    (in thousands of dollars) Cost Accumulated Amortization Net Book Value
    Capital Asset Class Opening balance Acquisitions Adjustments
    Footnote 53
    Disposals and write-offs Closing balance Opening balance Amortization Adjustments
    Footnote 53
    Disposals and write-offs Closing balance 2012 2011

    Footnotes

    Footnote 53

    Adjustments include assets under construction of $ 6,639,079 that were transferred to the other categories upon completion of the assets.

    Return to footnote 53referrer

    Effective November 15, 2011, Industry Canada transferred equipment and computer hardware/software with a net book value of $ 2,518,191 to Shared Services Canada (see note 14).

    Land $ 1,450 $ - $ (9) $ - $ 1,441 $ - $ - $ - $ - $ - $ 1,441 $ 1,450
    Buildings 47,097 - - 151 46,946 24,645 1,809 - 60 26,394 20,552 22,452
    Works and infrastructure 6,291 - 2,409 - 8,700 4,712 590 - - 5,302 3,398 1,579
    Machinery and equipment 69,691 1,673 (490) 5,243 65,631 49,305 3,946 (495) 5,102 47,654 17,977 20,386
    Vehicles 11,713 976 43 1,121 11,611 8,324 1,142 37 1,111 8,392 3,219 3,389
    Computer hardware 54,081 596 (12,712) 8,381 33,584 48,446 1,696 (10,701) 8,277 31,164 2,420 5,635
    Computer software 39,245 10 4,122 1,595 41,782 32,238 4,346 (19) 1,595 34,970 6,812 7,007
    Assets under construction 28,084 10,977 (6,639) 489 31,933 - - - - - 31,933 28,084
    Leasehold Improvements 36,214 - - - 36,214 28,417 1,447 - - 29,864 6,350 7,797
    Total $ 293,866 $ 14,232 $ (13,276) $ 16,980 $ 277,842 $ 196,087 $ 14,976 $ (11,178) $ 16,145 $ 183,740 $ 94,102 $ 97,779

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31 (continued)

  1. Contractual Obligations

    The nature of Industry Canada's activity results in some large multi-year contracts and obligations whereby Industry Canada will be committed to make future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:

    Contractual Obligations
      2013 2014 2015 2016 2017
    and
    thereafter
    Total
      (in thousands of dollars)
     
    Transfer payments $ 631,226 $ 418,078 $ 254,385 $ 156,659 $ 115,241 $ 1,575,589
    Goods and services 116,288 9,288 5,038 3,546 36 134,196
    Total $ 747,514 $ 427,366 $ 259,423 $ 160,205 $ 115,277 $ 1,709,785
  2. Contingent Liabilities

    Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are grouped into two categories as follows:

    1. Claims and litigation

      Claims have been made against Industry Canada in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Industry Canada has recorded an allowance for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to nil (nil in 2010-11) at March 31, 2012.

    2. Loan guarantees

      Industry Canada has guaranteed the following debts:

    Loan guarantees
      Authorized Limit Loan Guarantee Outstanding Balance
      (in thousands of dollars)
     
    Enterprise Development Program $ 1,200,000 $ 212
    Small Business Loans Act (SBLA) 1,838,292 156
    Canada Small Business Financing Act (CSBFA) 1,789,648 703,634
    Capital Leasing Pilot Project 15,661 1,119
    Regional Aircraft Credit Facility 1,500,000 130,207

    An allowance of $314,969,073 has been recorded for estimated losses on outstanding loan guarantees ($360,023,196 in 2010–11). The expenses related to loan guarantees are reported under "Other transfers" in note 15 for segmented Statement of Operations information.

    Enterprise Development Program — Loans are made to Canadian manufacturers and members of the service industry for the purpose of promoting the establishment, growth, efficiency and international competitiveness of Canadian industry. These loans to a person engaged or about to engage in manufacturing, processing or other commercial activity also foster the expansion of Canadian industry and of Canadian trade.

    Small Business Loans Act (SBLA) Program and Canada Small Business Financing Act (CSBFA) Program — Loans are made directly by approved lenders to small business enterprises, providing for sharing of each individual loan loss, if any, on the basis of 85% government, 15% lender, to an aggregate, per lending institution not exceeding the Minister's contingent liability, as stated in Section 5 of the SBLA and Section 6(2) of the CSBFA.

    The authorized limit represents the Crown's maximum liability incurred on the aggregate amount of loans made by the lender starting in April 1993 (SBLA) and April 1999 (CSBFA).

    The outstanding guarantee for loans made starting in April 1993 (SBLA) and April 1999 (CSBFA) is the lesser of the Crown's net liability (authorized limit less claims paid by the Crown) or 85% of the outstanding loan amounts of the lenders.

    Capital Leasing Pilot Project (CLPP) — Capital leases were made directly by approved lessors to small business enterprises, providing for sharing of each individual lease loss, if any, on the basis of 85% government, 15% lessor to an aggregate, per leasing institution, not exceeding the Minister's contingent liability based upon the aggregate amount of leases registered per leasing institution, as stated in Section 7 of the CLPP.

    The authorized limit represents the Crown's maximum liability incurred on the aggregate amount of the capital leases having been entered into or transferred since the period starting in April 2002.

    The outstanding guarantee for capital leases entered into since April 2002 is the lesser of the Crown's net liability or 85% of the outstanding capital lease amounts of the lessors.

    Regional Aircraft Credit Facility — Industry Canada has extended loan guarantees on several Air Canada regional jets. Provisioning from the Canada Account Loss Provisioning Pool has been set aside by Finance Canada, manager of the funds. The loan guarantees began in the summer of 2005.

  3. Related Party Transactions

    Industry Canada is related as a result of common ownership to all Government departments, agencies and Crown Corporations. Industry Canada enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, Industry Canada received services that were obtained without charge from other Government departments as disclosed below.

    1. Common services provided without charge by other government departments

      During the year, Industry Canada received services without charge from certain common service organizations, related to accommodations, legal services, the employer's contribution to the health and dental insurance plans, and workers' compensation coverage. These services provided without charge have been recorded in Industry Canada's Statement of Operations and Departmental Net Financial Position as follows:

      Common services provided without charge by other government departments
        2012 2011
        (in thousands of dollars)
       
      Accommodation $ 56,546 $ 55,713
      Employer's contribution to the health and dental insurance plans 28,021 29,054
      Workers' compensation coverage 432 455
      Legal services 3,758 3,202
      Total $ 88,757 $ 88,424

      The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. 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 costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada, and audit services provided by the Office of the Auditor General, are not included in Industry Canada's Statement of Operations and Departmental Net Financial Position.

    2. Administration of programs on behalf of other government departments

      Under a memorandum of understanding signed with National Defence on December 11, 1997, Industry Canada administers a program called Development, Test, and Evaluation and Technical Services Activities. During the year, Industry Canada incurred expenses of $4,636,778 ($3,510,669 in 2010–11) on behalf of National Defence. These expenses are reflected in the financial statements of National Defence and are not recorded in these financial statements.

    3. Other transactions with related parties
      Other transactions with related parties
        2012 2011
        (in thousands of dollars)
       
      Expenses – Other government departments and agencies $ 122,096 $ 123,773
      Revenues – Other government departments and agencies 18,700 14,401
  4. Transfers from/to other government departments

    Effective November 15, 2011, Industry Canada transferred responsibility for the Email, Data Centre and Network Services Unit and Support Unit to Shared Services Canada in accordance with Order-in-Council P.C 2011-1297, including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, Industry Canada transferred the following assets and liabilities related to the Email, Data Centre and Network Services Unit and Support Unit to Shared Services Canada on November 15, 2011.

    Transfers from/to other government departments
    (in thousands of dollars)  
     
    Assets
    Tangible capital assets (net book value) (note 10) $ 2,518
    Total assets transferred 2,518
     
    Liabilities
    Vacation pay and compensatory leave 638
    Employee future benefits (note 6) 1,051
    Total liabilities transferred 1,689
     
    Adjustment to departmental net financial position $ 829

    In addition, the 2011 comparative figures have been reclassified on the Statement of Operations and Departmental Net Financial Position to present the revenues and expenses of the transferred operations.

    During the transition period, Industry Canada continued to administer the transferred activities on behalf of Share Services Canada. The administered expenses amounted to $10,678,114 for the last year. These expenses are not recorded in these financial statements.

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31 (continued)

  1. Segmented Information

    Presentation by segment is based on Industry Canada's program activity architecture. The presentation by segment is based on the same policies as described in the Summary of Significant Accounting Policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

    Segmented Information
    (in thousands of dollars) The Canadian Marketplace is Efficient and Competitive Advancements in Science and Technology, Knowledge, and Innovation Strengthen the Canadian Economy Canadian Businesses and Communities Are Competitive Internal
    Services
    2012
    Total

     
     
    2011
    Total
    Restated
    (note 16)
    Expenses
    Transfer payments
    Transfers to non-profit organizations $ 2,076 $ 253,315 $ 64,101 $ - $ 319,492 $ 311,564
    Transfers to other levels of government - 232,233 (230) - 232,003 754,446
    Transfer to Industry (4) 45,241 89,499 - 134,736 195,339
    Other transfers 6,345 - 18,933 - 25,278 67,836
     Total transfer payments 8,417 530,789 172,303 - 711,509 1,329,185
     
    Operating expenses
    Salaries and employee benefits 279,520 62,297 61,008 165,263 568,088 553,810
    Professional and special services 41,933 7,271 10,109 26,328 85,641 93,205
    Accommodation 29,140 2,246 3,605 21,555 56,546 55,713
    Damage and other claims against the crown 28,005 - - 330 28,335 986
    Amortization 7,581 4,454 697 2,005 14,737 15,500
    Travel 7,730 1,171 1,490 1,854 12,245 15,326
    Furniture and equipment 3,763 2,750 369 5,057 11,939 10,346
    Rental 9,461 240 184 374 10,259 10,729
    Equipment repair and maintenance 3,437 1,792 142 4,550 9,921 12,106
    Utilities, materials and supplies 2,140 3,310 498 672 6,620 7,547
    Communication 2,216 537 817 1,211 4,781 5,189
    Bad debt expense 5 2,848 1,510 - 4,363 4,808
    Postage 975 82 106 452 1,615 2,743
    Loss on disposal of capital assets 530 220 - 75 825 66
    Other operating expenses (1,960) 1,290 (781) 15 (1,436) (6,387)
    Expenses incurred on behalf of Government (5) (2,848) (1,510) - (4,363) (4,808)
    Total operating expenses 414,471 87,660 78,244 229,741 810,116 776,879
       
    Total expenses 422,888 618,449 250,547 229,741 1,521,625 2,106,064
     
    Revenues  
    Radio spectrum licences 793,005 - - - 793,005 825,282
    Sales of services 218,272 16,532 53,843 2,772 291,419 283,907
    Revenue from fines 25,024 - - - 25,024 11,188
    Amortization of discounts - 5,152 3,458 - 8,610 3,776
    Other revenue 463 290 118 34 905 1,342
    Gains on disposals of assets 155 18 15 22 210 275
    Revenues earned on behalf of Government (886,274) (9,579) (57,419) (36) (953,308) (967,787)
    Total revenues 150,645 12,413 15 2,792 165,865 157,983
     
    Net cost from continuing operations $ 272,243 $ 606,036 $ 250,532 $ 226,949 $ 1,355,760 $ 1,948,081

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Financial Statements (continued)

Notes to the Financial Statements (Unaudited)
For the Year Ended March 31 (continued)

  1. Accounting Changes

    During 2011, amendments were made to Treasury Board Accounting Standard 1.2—Departmental and Agency Financial Statements to improve financial reporting by government departments and agencies. The amendments are effective for financial reporting of fiscal years ending March 31, 2012, and later. The significant changes to Industry Canada's financial statements are described below. These changes have been applied retroactively, and comparative information for 2010–11 has been restated.

    Net debt (calculated as liabilities less financial assets) is now presented in the Statement of Financial Position. Accompanying this change, Industry Canada now presents a Statement of Change in Net Debt and no longer presents a Statement of Equity.

    Revenue and related accounts receivable are now presented net of non-respendable amounts in the Statement of Operations and Departmental Net Financial Position and Statement of Financial Position. The effect of this change was to increase the net cost of operations before government funding and transfers by $953,307,689 for 2012 ($967,786,599 for 2011) and decrease total financial assets by $573,238,918 for 2012 ($452,817,360 for 2011).

    Government funding and transfers, as well as the credit related to services provided without charge by other government departments, are now recognized in the Statement of Operations and Departmental Net Financial Position below "Net cost of operations before government funding and transfers." In previous years, Industry Canada recognized these transactions directly in the Statement of Equity of Canada. The effect of this change was to decrease the net cost of operations after government funding and transfers by $1,349,877,507 for 2012 ($2,074,990,388 for 2011).

    Statement of Financial Position
    (in thousands of dollars) 2011
    As previously stated
    Effect of change 2011
    Restated
    Statement of Financial Position:
    Liabilities held on behalf of Government $ - $ (3,688,757) $ (3,688,757)
    Assets held on behalf of Government - (452,817) (452,817)
    Departmental financial position (3,844,440) 3,235,940 (608,500)
     
    Statement of Operations and Departmental Net Financial Position:  
    Revenues 1,125,770 (967,787) 157,983
     
    Government funding and transfers
    Net cash provided by Government - 2,319,493 2,319,493
    Change in due from Consolidated Revenue Fund - (332,926) (332,926)
    Services provided without charge by other government departments - 88,424 88,424
  2. Comparative information

    Comparative figures have been reclassified to conform to current year's presentation.

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Summary of the Assessment of Effectiveness of the Systems of Internal Control over Financial Reporting and the Action Plan of Industry Canada
For the fiscal year ending March 31, 2012

Annex to the Statement of Management Responsibility Including Internal Control over Financial Reporting

Note to the Reader

With the Treasury Board Policy on Internal Control that became effective April 1, 2009, departments are required to demonstrate the measures they are taking to maintain an effective system of internal control over financial reporting (ICFR).

As part of this policy, departments are expected to conduct annual assessments of their system of ICFR, establish an action plan to address any necessary adjustments, and attach to their Statements of Management Responsibility a summary of their assessment results and action plan.

Effective systems of ICFR aim to achieve reliable financial statements and to provide assurances that:

  • Transactions are appropriately authorized;
  • Financial records are properly maintained;
  • Assets are safeguarded from risks such as waste, abuse, loss, fraud and mismanagement; and
  • Applicable laws, regulations and policies are followed.

It is important to note that the system of ICFR is not designed to eliminate all risks, rather to mitigate risk to a reasonable level with controls that are balanced with, and proportionate to, the risks they aim to mitigate.

It is an ongoing process to identify key risks, to assess the effectiveness of associated key controls and adjust as required, as well as to monitor the system in support of continuous improvement. As a result, the scope, pace and status of departmental assessments of the effectiveness of their system of ICFR will vary from one organization to another based on risks and taking into account their unique circumstances.

1. Introduction

This document is attached to Industry Canada's Statement of Management Responsibility Including Internal Control over Financial Reporting for the fiscal year 2011–12. As required by the Treasury Board Policy on Internal Control, effective April 1, 2009, this third published annex by the department provides summary information on the measures taken by Industry Canada to maintain an effective system of internal control over financial reporting (ICFR). In particular, it provides summary information on the assessments conducted by Industry Canada as at March 31, 2012, including results and related action plans along with some financial highlights pertinent to understanding the control environment unique to Industry Canada.

1.1 Authority, Mandate and Program Activities

Detailed information on Industry Canada's authority, mandate and program activities can be found in the Departmental Performance Report (DPR) and Report on Plans and Priorities (RPP).

1.2 Financial Highlights

Industry Canada's 2011–12 financial highlights can be found in the online version of the DPR. In addition, information can be found in the departmental financial statements (unaudited) and in the Public Accounts of Canada.

  • Total expenses were $1.5 billion. Transfer payments comprise the majority (46.6 percent or $711.5 million) followed by salaries (37.2 percent or $568.1 million).
  • Total revenues were $1.1 billion, largely from the recognition of deferred radio spectrum auction revenue (47.0 percent or $526.4 million) but also including sales of services and to a lesser degree, fines (28.3 percent or $316.4 million).
  • Tangible capital assets comprise 9 percent, or $94.1 million, of total departmental assets.
  • Deferred revenue comprises 75 percent ($3.28 billion) of total liabilities while accounts payable and accrued liabilities comprise 14 percent ($635.2 million) of total liabilities.
  • Industry Canada has five regional offices and an office for FedNor. Each office operates its own finance and accounting function in which operating expenses are initiated, approved and processed.
  • Industry Canada has a number of management information systems (Integrated Financial and Materiel System (IFMS), Contribution Management Information System (CMIS) and Canada Small Business Financing Program (CSBFP)) important to its operations and financial reporting.

1.3 Service Arrangements Relevant to Financial Statements

The Department relies on other organizations for the processing of certain transactions that are recorded in its financial statements:

Key Common Arrangements:

  • Public Works and Government Services Canada (PWGSC) centrally administers the payments of salaries, the procurement of goods and services as per Industry Canada's Delegation of Authority and provides accommodation services.
  • Treasury Board Secretariat provides Industry Canada with information used to calculate various accruals and allowances, such as the accrued severance liability.
  • Human Resources and Skills Development Canada (HRSDC) provides Industry Canada with coverage for workers' compensation.
  • The Department of Justice provides general legal services to Industry Canada along with information necessary for the contingent liability note to the financial statements for inclusion in the Public Accounts.
  • Shared Services Canada (SSC) was created on August 4, 2011 to consolidate, streamline and improve the government's information technology (IT) infrastructure services, specifically email, data centre and network services for 43 federal departments and agencies. Effective November 15, 2011, the responsibility for email, data centre and network services, including associated resources, was transferred from Industry Canada to SSC. The administration and delivery of these services were shared during the 2011–12 transition period while SSC was being established.
1.3.1 Services Provided to other Government Departments

The Department provides the Copyright Board of Canada, the Federal Economic Development Agency for Southern Ontario (FedDev), and Infrastructure Canada with the IFMS platform and support to capture and report all financial transactions. Industry Canada further provides system platform support to FedDev for its CMIS. In addition, Industry Canada also provides administrative support to the Copyright Board of Canada for recording financial transactions in the financial system. Furthermore, Industry Canada offers information technology and/or human resources management services to various departments and agencies, such as the Canada Industrial Relations Board and the Office of the Commissioner of Lobbying of Canada.

1.4 Material Changes in Fiscal-Year 2011–12

During fiscal year 2011–12, the following significant changes to the control environment at Industry Canada took place:

  • As at November 15, 2011, all assets and liabilities associated with the newly created SSC were eliminated from Industry Canada's financial statements. $2.52 million in assets and $1.69 million in liabilities were removed resulting in a net transfer of $829,000 to SSC.
  • In March of 2012, Industry Canada's Deputy Minister appointed a new Chief Financial Officer, Susan Bincoletto.

2. Control Environment of Industry Canada Relative to ICFR

Entity level controls put in place by Industry Canada's Senior Management set the tone from the top to help ensure that staff at all levels understand their roles in maintaining effective systems of ICFR and are well equipped to exercise these responsibilities effectively in support of sound stewardship of public resources and reliable financial reporting.

The purpose of the key components of entity level controls at Industry Canada is to ensure solid governance and effective risk management at the corporate level, as well as the maintenance of other entity level controls to provide effective support to staff by raising awareness and providing appropriate knowledge, skills and tools. The ultimate objective is to manage risks while maintaining a responsive control environment for employees at all levels in support of innovation and continuous improvement. Industry Canada's main entity level controls currently in place and relevant to ICFR are set out below.

2.1 Key Positions, Roles and Responsibilities

Below are the Department's key positions and committees with responsibilities for maintaining and reviewing the effectiveness of its system of ICFR.

Position
Responsibilities
Deputy Head
Industry Canada's Deputy Head, as Accounting Officer, assumes overall responsibility and leadership for the measures taken to maintain an effective system of internal controls.
Chief Financial Officer (CFO)
Industry Canada's CFO reports directly to the Deputy Head and provides leadership for the coordination, coherence and focus on the design and maintenance of an effective and integrated system of ICFR, including its annual assessment.
Senior Departmental Managers
Industry Canada's senior departmental managers in charge of program delivery are responsible for maintaining and reviewing the effectiveness of the system of ICFR that falls within their mandate.
Chief Audit Executive (CAE)
Industry Canada's CAE reports directly to the Deputy Head and provides assurance through periodic internal audits that are instrumental in maintaining an effective system of ICFR.
Departmental Audit Committee (DAC)
The DAC is an advisory committee that provides objective views on Industry Canada's risk management, control and governance frameworks. It is composed of three external members and was established in 2007. As such, it provides views on the system of internal control, including the assessment and action plans.
Management Committee
Management Committee is a committee comprised of the departmental sector heads and is chaired by the Deputy Head. This committee is responsible for promoting management excellence as well as promoting effective people management strategies and the sound stewardship of Industry Canada's resources.

2.2 Key Measures Taken by Industry Canada

Industry Canada's control environment also includes a series of measures to equip its staff to manage risks well through raising awareness, providing appropriate knowledge and tools, as well as developing skills.

Key measures include:

  • An Office of Values and Ethics under the Deputy Head; a senior officer has been appointed as Values and Ethics champion;
  • Industry Canada's code of conduct and values and ethics code are communicated to employees;
  • A division under the CFO dedicated to quality assurance and internal control;
  • Annual performance agreements with clearly identified financial management responsibilities;
  • Training programs and outreach in core areas of financial management;
  • Departmental policies tailored to Industry Canada's control environment;
  • Regularly updated delegated authorities matrices;
  • Documentation of main business processes and related key risk and control points to support the management and oversight of its system of ICFR;
  • IT processing systems to achieve greater security, integrity, efficiency and effectiveness;
  • An executive learning plan for key employees; and
  • Electronic specimen signature cards for delegated financial signing authorities, housed within the departmental financial system.

3. Assessment of Industry Canada's System of ICFR

3.1 Assessment Approach

To satisfy the requirements of the Policy on Internal Control, Industry Canada must be able to maintain an effective system of ICFR with the objective to provide reasonable assurance that:

  • Transactions are appropriately authorized;
  • Financial records are properly maintained;
  • Assets are safeguarded; and
  • Applicable laws, regulations and policies are followed.

This includes assessment of design and operating effectiveness of the system of ICFR leading to ensuring the ongoing monitoring and continuous improvement of the departmental system of ICFR.

Design effectiveness means ensuring that key control points are identified, documented, in place and aligned with the risks (i.e. controls are balanced with and proportionate to the risks they aim to mitigate) and that any remediation is addressed.

Operating effectiveness means that the application of key controls has been tested over a defined period and that any required remediation is addressed.

Ongoing monitoring is a recurring process to assess and sustain the management of internal controls in support of continuous improvement. It involves a systematic risk-based approach where the department has in place a rotational schedule through which operating effectiveness of key controls is assessed and reassessed including design, as required, including making any necessary adjustments.

3.2 Scope of Industry Canada Assessment During Fiscal Year 2011–12

In previous years and as documented in prior annexes, the Department has taken measures to assess its system of ICFR by:

  • documenting and testing the design and operating effectiveness of its key entity (corporate) level controls, general computer controls and business process controls with any remedial actions taken as required.
  • undergoing a successful pilot audit in 2009–10 that confirmed the department's readiness to sustain a controls-based audit.
  • continuing a rotational ongoing monitoring plan which identifies the frequency of testing of key controls for each aspect of ICFR.

In the current fiscal year, Industry Canada has taken measures to assess its system of ICFR by:

  • identifying any new or significantly amended key control areas which required assessment;
  • assessing the design of a new revenue sub-system, Canada Small Business Financing Program (CSBFP);
  • completing the reassessment of entity level controls, general computer controls, grants and contributions, revenues, operating (capital expenditures, financial close and master data for vendors/customers); and
  • monitoring remedial actions taken in response to the findings of prior year assessments and considering the results of recent audits and evaluations.

4. Industry Canada Assessment Results During Fiscal Year 2011–12

The significant findings from the current year assessment are summarized below.

4.1 New or Significantly Amended Key Controls

A new system related to recording revenue for the CSBFP was assessed for its design effectiveness of IT general controls. The assessment concluded that the new system did not meet IT control standards and further assessments are necessary to determine if there is a cost benefit to modifying the system to meet IT general control standards or whether the system-related controls should be tested manually to gain assurance. Manual testing is part of the application testing that requires human input, analysis, or evaluation rather than relying on the inner workings of the system.

Two significant transfer payment programs (Automotive Innovation Fund and Bombardier CSeries) began their assessment for design effectiveness of ICFR during 2011–12 and both are in a position to undergo operating effectiveness testing in 2012–13 as per the plan in section 5.2 below.

4.2 Ongoing Monitoring Program

Industry Canada completed its reassessment of entity level controls, general computer controls, grants and contributions, revenues, operations (capital assets, financial close and master data for vendors/customers) and is in the process of developing action plans. The results from the reassessments were as follows:

Entity Level Controls

Testing of entity level controls showed that Industry Canada continues to maintain strong departmental controls in the areas of overall environment, risk management, information systems and communication, and monitoring.

General Computer Controls

In addition to the CSBFP system (see Section 4.1 above) testing of general computer controls occurred for the departmental enterprise systems (IFMS and CMIS). Overall, the results were positive and both systems showed advancement in controls over change management, an area identified for remediation in prior operating effectiveness testing. The following exceptions were found:

  • Key control issues were found in the area of periodic reviews and timely termination of user access.
  • Minor control issues were found in the area of validations of change management controls. There was a lack of evidence to demonstrate that system changes were tested and monitored.

Industry Canada had planned to test the general computer controls of two additional revenues systems, BIMS (Competition Bureau) and Nucleus (Communications Research Canada), however upon further assessment it was determined that these systems were not robust enough to meet IT Control Standards and they were therefore tested manually through a combination of application and revenues testing.

Revenues

The following revenue processes were tested for internal control compliance: Competition Bureau (including BIMS) and Communications Research Canada (including Nucleus) both mentioned above as well as Corporations Canada, Office of the Superintendent of Bankruptcy, Canada Small Business Financing Program and Spectrum, Information Technologies and Telecommunications.

  • Key control issues were found in the areas of documentation of processes and several gaps in existing processes have been identified.
  • Minor control issues were found in the areas of reconciliations and management review controls.
Grants and Contributions

The following grants and contributions programs were tested for internal control compliance: Knowledge Infrastructure Program, Industrial Technologies Office, National Access Program Directorate, One-time PaymentsFootnote 54 and Broadband Canada: Connecting Rural Canadians.

  • Overall, the results were quite positive with only one minor control issue being found. In the Industrial Technologies Office process, a sub-system not linked to the departmental financial system should have access removed for departed employees in a timelier manner.

The Marquee Tourism Events Program was completed by March 31, 2011 and as a result, had no payments in fiscal year 2011–12. The Structured Financing Facility program was still active but had no payments in fiscal year 2011–12. Therefore, these programs were not subject to testing in 2011–12.

Operating

The following operating processes were tested for internal control compliance: Capital expenditures, financial close and Master data - vendors/customers. Overall, key controls in these processes are functioning as intended, with the following exceptions:

  • Key control issues were found in the Capital expenditure process, particularly with annual reasonability tests and reviews. Key control issues were also found in the Financial close process where a gap was identified between the testing strategy and control objective.
  • Minor control issues were found in the following processes: Capital expenditures, Financial close and Master data – vendors/customers. For example, in the Capital expenditures process, minor segregation of duties issues were identified. For the Financial close process, one of the findings showed improper access rights to key documents. Finally in the Master data – vendors/customers process minor issues included an incomplete process narrative and incomplete supporting documentation.

Management action plans are being developed by process owners based on testing results and recommendations. The action plans will be followed-up on to ensure that remedial actions are taken by management.

5. Industry Canada Action Plan

5.1 Progress During Fiscal Year 2011–12

During 2011–12, Industry Canada began the design assessment for two grants and contributions programs (Automotive Innovation Fund and Bombardier CSeries) which are expected to undergo operating effectiveness testing in 2012–13. In addition, design effectiveness testing was completed for a new revenue system (CSBFP) and remedial action will be explored in the new year. Finally, Industry Canada conducted its ongoing monitoring as per its plan and reports results of this monitoring directly to management:

  • Completed as planned and no remedial actions required—entity level controls;
  • Completed as planned and remedial actions partially commenced:
    • General computer controls: Enterprise systems—IFMS, CMIS; CSBFP.
    • Grants and Contributions: Knowledge Infrastructure Program; Industrial Technologies Office; National Access Program Directorate; One-Time Payments; Broadband Canada: Connecting Rural Canadians.
    • Revenues: Competition Bureau; Corporations Canada; Communications Research Canada; Office of the Superintendent of Bankruptcy; Canada Small Business Financing Program; and Spectrum, Information Technologies and Telecommunications.
    • Operating: Capital assets; Financial close; Master data—vendors/customers;
  • Reevaluated plan and reassessed testing strategy:
    • General computer controls: BIMS (Competition Bureau) and Nucleus (Communications Research Canada) were tested as manual controls during the application and revenues testing
    • Grants and Contributions: Marquee Tourism Events Program completed March 31, 2011 while the Structured Financing Facility program had no payments in fiscal year 2011–12.

In 2012–13, testing will be conducted to follow-up on the remedial actions identified in the management action plans to address both the key and minor control issues identified during this testing.

5.2 Action Plan for the Next Fiscal Year (2012–13) and Subsequent Years

The Department's focus is on ongoing monitoring, having gone through the full assessment cycle in previous years. Action plans from previous years will be followed-up on to ensure that remedial actions have been taken. The ongoing monitoring program also includes training to enhance the awareness and knowledge of internal controls over financial reporting and associated responsibilities across the Department.

Only operating effectiveness testing is conducted in those areas subject to reassessment unless significant amendments have been made to key controls and design effectiveness testing may be necessary.

The table below shows the Department's rotational ongoing monitoring plan over three years. An annual risk-assessment is conducted each year to validate the high risk controls and to adjust the ongoing monitoring plan as required.

Rotational Ongoing Operating Effectiveness Testing for Internal Control over Financial Reporting

Table: Rotational Ongoing Operating Effectiveness Testing for Internal Control over Financial Reporting
  Operating Effectiveness Testing Rotation
Internal Control over Financial Reporting 2012-13 2013-14 2014-15
Entity level
(tested once every 3 years)
Entity-level controls No No Yes
General computer controls
(tested once every 3 fiscal years)
Enterprise systems No No Yes
Canada Small Business Financing Program (CSBFP)
(Revenue system)
No No Yes
Business Processes
Grants and contributions
(tested once each fiscal year)
Knowledge Infrastructure Program Yes Yes Yes
Industrial Technologies Office Yes Yes Yes
National Access Program Directorate Yes Yes Yes
One-Time Payments Yes Yes Yes
Broadband Canada: Connecting Rural Canadians Yes Yes Yes
Automotive Innovation Fund Yes Yes Yes
Bombardier CSeries Yes Yes Yes
Operating
(tested once every 2 fiscal years)
Operating expenditures Yes No Yes
Capital expenditures No Yes No
Financial close & reporting No Yes No
Master data—vendors/customers No Yes No
Payroll Yes No Yes
Revenue
(tested once every 2 fiscal years)
Competition Bureau No Yes No
Corporations Canada No Yes No
Communications Research Canada No Yes No
Office of the Superintendent of Bankruptcy No Yes No
Canada Small Business Financing Program No Yes No
Spectrum, Information Technologies and Telecommunications No Yes No

Footnotes

Footnote 54

The One-time Payments process covers transfer payments such as Genome Canada and Canada Foundation for Innovation.

Return to footnote 54 referrer

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Contribution to the Federal Sustainable Development Strategy

The Federal Sustainable Development Strategy (FSDS) outlines the Government of Canada's commitment to improving the transparency of environmental decision making by articulating its key strategic environmental goals and targets. Industry Canada ensures that consideration of these outcomes is an integral part of its decision-making processes. Industry Canada contributes to the following FSDS themes as denoted by the visual identifiers and associated Program Activities below. These symbols can be found throughout the report and identifies areas where efforts are contributing to the FSDS.

This image of the letter 'a' above a leaf indicates that programming in this area contributes to the Climate Change and Air Quality goal of the Federal Sustainable Development Strategy: Theme I : Adressing climate change and air quality This image of the letter 'g' above a leaf indicates that programming in this area contributes to the goal of the Federal Sustainable Development Strategy: Theme IV: Shrinking the Environmental Footprint - Beginning with Government

These contributions are components of the following Program Activities and are further explained in the Results and Performance section:

During 2011–12, Industry Canada considered the environmental effects of initiatives subject to the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals. The Department also conducted nine Strategic Environmental Assessments (SEA): eight were preliminary scans, and one was a detailed SEA. The program led by Natural Sciences and Engineering Research Council of Canada (NSERC) related to climate change research underwent a detailed SEA and was found to have important positive, indirect effects in addressing the environmental goals and targets in Theme I and Theme II of the Federal Sustainable Development Strategy (Addressing Climate Change and Air Quality, and Maintaining Water Quality and Availability).

Further information on the results of the SEA is available on the Departmental website, which also provides information on Industry Canada's SEA process.

For complete details on the Federal Sustainable Development Strategy please see the website.

For additional details on Industry Canada's activities to support sustainable development, please consult the Industry Canada website.

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