II  Departmental Performance

A. Context

The Privy Council Office (PCO) is both the secretariat to the Cabinet and the Department that provides professional, non-partisan advice on priorities and policies to the Prime Minister as the Head of Government.

In providing support to the Prime Minister, PCO is the source of advice on a range of issues such as the Government’s organization, international developments and national security. In terms of these responsibilities, PCO dealt with a number of issues and events during this reporting period. It supported the Prime Minister in the changes to the Ministry in early 2002, including providing advice on the mandates of the new Ministers. It provided advice to the Prime Minister on international issues, including the situations in Afghanistan and in the Middle East. PCO also worked on a number of fronts and in concert with other departments to ensure the smooth operation of the G-8 Summit, hosted by the Prime Minister in Kananaskis in June 2002, with a particular focus on the preparatory policy work needed for a successful Summit.

PCO provides advice to the Prime Minister as the Chair of Cabinet on issues management, liaison with Ministers and communications, and also advises the Chairs of Cabinet committees. PCO assisted the Prime Minister and Committee Chairs in their work on current issues that included matters related to Aboriginal people, energy, anti-terrorism and security.

Over the past year, PCO was tested by a number of difficult challenges, especially the events of September 11^th. PCO’s performance, in the face of the many demands placed on it, underscored its capacity and resilience to respond to the concerns of Canadians in times of crisis and in times of calm. Throughout, it continued to provide professional, non-partisan policy advice and support to the Prime Minister and the Cabinet, while keeping a steady hand on implementing the quality-of-life agenda articulated in the Speech from the Throne in January 2001. Delivering on that agenda, while balancing security needs, remains a significant accomplishment and a continuing challenge.

As Canada faces the future, driven by factors such as globalization, a knowledge-based economy and threats to security, new demands will be placed on PCO. Key to its success will be its ability to provide continued excellence in the public policy advice it provides to the Prime Minister, the Cabinet and the Government.

B. Performance Accomplishments

This section reports on PCO’s performance and accomplishments towards achieving its planned outcomes and fulfilling its annual commitments identified in the 2001-2002 Report on Plans and Priorities, in the context of the departmental resources authorized by Parliament.

PCO serves as the secretariat for the Cabinet and the Prime Minister’s source of non-partisan advice on a broad range of policy and operational issues concerning the management of the Canadian federation. PCO is committed to supporting the Government’s agenda for its third mandate.

To serve Canadians and their elected Government, PCO identified four strategic outcomes for the fiscal year 2001-2002. The following table shows the relationship between these strategic outcomes, PCO’s business lines and the resources used in 2001-2002.

Notes: $ are in thousands of dollars. Full-time equivalents (FTEs) are a measure of human resource consumption based on average levels of employment. FTE factors out the length of time that an employee works during each week by calculating the rate of assigned hours of work.

Throughout 2001-2002, PCO supported the Prime Minister and the Cabinet by providing accurate, sensitive and timely advice on a broad range of social, economic, fiscal, legal, parliamentary, national security, foreign and defence, and federal-provincial-territorial policy issues. In doing so, PCO worked collaboratively with other federal departments and agencies, provincial and territorial governments, the private and voluntary sectors, and international stakeholders.

PCO also provided professional, non-partisan policy advice and appropriate support to the Prime Minister and to the Ministers within the Prime Minister’s portfolio, ensuring the efficient operation of the Cabinet decision-making process in accordance with the principles of responsible government and the Prime Minister’s prerogative, and supported Cabinet discussions by coordinating the timely and informed consideration of new proposals, and overseeing the development of policies consistent with the Government’s agenda. PCO also facilitated substantive discussions of proposed new initiatives, or proposed program or policy changes, discussed in the various Cabinet committees as well as other ad hoc and informal meetings of Ministers.

PCO exercised timely and effective leadership and interdepartmental and central agency coordination on major economic, social and international initiatives by promoting horizontal consultation processes, monitoring interdepartmental activities, facilitating the formulation and integration of new policies and legislation, and promoting best practices and innovation. (For organizational details, refer to the Departmental Overview, in Annex A, page 27)

In planning for the December 2001 Budget, PCO facilitated a priority-setting exercise that helped Ministers identify key spending priorities for the Government. As a result, PCO was able to provide advice to the Prime Minister on the consensus of the Ministers concerning spending priorities and the overarching themes for the Budget. Suggested measures allowed the Government to advance its ongoing agenda and commitments made in the Speech from the Throne, and to respond effectively to the events of September 11^th in the areas of public security and anti-terrorism.

PCO advised the Prime Minister and the Clerk of the Privy Council on issues related to the structure, organization and functioning of government. Most notable during this fiscal year was the planning and preparation for the January 2002 Cabinet shuffle, the most extensive since the current Government first took office in November 1993. PCO provided non-partisan advice concerning changes in the organization and functioning of federal departments, the formation of the Cabinet and its committees, and the distribution of Ministers’ mandates and responsibilities to support the Government’s policy agenda for its third mandate in Parliament. Throughout the fiscal year PCO also provided advice and recommended options for functional organizations and operations to implement many of the Government’s initiatives.

Allowances of Parliamentarians
The Commission to Review Allowances of Parliamentarians was created in January 2001. The Parliament of Canada Act requires the establishment of this Commission after each general election. The Commission makes recommendations and reports to the Governor in Council within six months of its creation, after which their Report is tabled in Parliament.

In the Commission’s Report — Supporting Democracy — released in May 2001 (available on the PCO web site at www.pco-bcp.gc.ca ), the Commissioners recommended that parliamentary compensation be made more transparent and more equitable with compensation for other comparable groups. PCO helped with advice and support to prepare and submit Bill C-28 for parliamentary consideration, to implement the Report’s recommendations, amending the Parliament of Canada Act, the Members of Parliament Retiring Allowances Act, and the Salaries Act. The Bill was passed in June 2001.

SEEKING BALANCE: THE ECONOMY AND THE ENVIRONMENT

PCO provides leadership, interdepartmental coordination and timely advice to enable the Cabinet to consider federal support for economic projects that will create highly-skilled and well-paying jobs for Canadians in various regions of the country. For example, in 2001-2002 PCO was able to identify existing programs to provide federal financial support for Inco’s Voisey’s Bay initiative — that will generate long-term economic benefits for Canadians from the largest undeveloped nickel deposit in the western world. PCO also explored the risks and benefits (including the economic spin-offs) of re-opening the Gaspésia pulp and paper mill in Chandler, Quebec, and concluded that the project presents an opportunity to implement a technologically innovative manufacturing process, creating good jobs in an area facing difficult socio-economic challenges.

Reference Group of Ministers on Energy Issues
Energy issues and major developments in the energy sector are very important for the Canadian economy. The Prime Minister created the Reference Group of Ministers on Energy Issues in March 2001. PCO supported the Prime Minister and the Reference Group by providing strategic advice on the development and advancement of forward-looking, sustainable strategies on a wide range of domestic and North American energy matters — potential on- and off-shore oil and natural gas developments, northern pipelines, new forms of energy production, regulation and tax issues, and partnerships with provinces and other stakeholders.

Amending the Competition Act
The Competition Act is a significant cornerstone of Canada’s business legislation that promotes fair competition in the Canadian marketplace. The Government has adopted an incremental approach to reforming its competition policy — to reflect changes in Canadian business conditions and practices, and to permit timely consultations with stakeholders, including Members of Parliament. Periodic amendments to the Act help to build a more efficient, innovative and competitive Canadian marketplace in the ever-changing global economy.

The most recent set of amendments were introduced on April 4, 2001, in Bill C-23. These changes build on proposals made by Members of Parliament and will ensure better international cooperation with regard to competition matters, and increased protection for Canadians from deceptive marketing practices. Bill C-23 also enhances the scope of activities and streamlines procedures for the Competition Tribunal. Bill C-23 was amended at the report stage (after September 11^th) to protect competition in the Canadian airline industry. PCO worked closely with the Competition Bureau, concerned Ministers and affected departments, and provided leadership to attain a Government of Canada perspective on the proposed amendments, taking into account policy, legislative and legal considerations, and the concerns of the business community and Canadians in general.

Regional Innovation Initiative
In 1999-2000, the Government adopted the Regional Innovation Initiative whereby the National Research Council (NRC) is playing a more active role in supporting local communities in the development of technology-based clusters consistent with each community’s strengths and capacities. By involving the academic sector, researchers, and government and business officials, the Strategy has resulted in the establishment of a number of new centres and/or expanded programs, particularly in Atlantic Canada through the Atlantic Investment Partnership initiative. Throughout the process, PCO worked with the key players, including the federal and provincial governments, the private sector and universities, and provided the NRC with advice on the Cabinet process.

Recognized by the Government as an ongoing economic priority, the December 2001 Budget provided additional resources over a three-year period to invest in leading-edge technologies and to expand the NRC’s Regional Innovation Strategy beyond Atlantic Canada. An early success was the partnership between the Governments of Alberta and Canada to establish the National Institute for Nanotechnology based in Edmonton. PCO worked with the NRC, Industry Canada, the Department of Finance, the Treasury Board Secretariat and Western Economic Diversification Canada to secure an agreement between the two governments, where each would contribute $60 million over five years to this state-of-the-art Institute. Announcements concerning additional programs and technology centres are expected over the course of 2002-2003.

Improving Canada’s Infrastructure
PCO conducted preliminary work with the Office of Infrastructure to develop the program parameters for two new infrastructure programs that received Government approval in 2001-2002, to expand Canada’s existing infrastructure capacity, and to improve system linkages and efficiencies across the different modes of transportation:

• Canada Strategic Infrastructure Fund, that will invest $2 billion in large-scale strategic infrastructure projects that contribute to economic growth and quality of life in Canada; and

• Border Infrastructure Fund, that committed $600 million to deliver on selected obligations under the Canada-U.S. Smart Borders Declaration.

Regulatory Matters
Governments are increasingly called upon to adopt precautionary approaches to address new or emerging risks and to manage issues where there is a lack of scientific certainty. Beginning in November 2001, PCO, in collaboration with a number of other federal departments and agencies, consulted Canadians on proposed guiding principles for applying the Precautionary Approach/Principle to decision-making in Canadian public policy — a framework to describe the guiding principles inherent to practices and policies of the federal government. Ultimately, it would be a lens through which decision-makers and affected parties can assess whether the decision-making process is in keeping with the guiding principles and whether their decisions are in keeping with Canadians’ social and economic values and priorities. Feedback was very constructive and supported a federal principles-based framework that applies the Precautionary Approach/Principle in a science-based, risk management context that will:

• Improve the predictability, credibility and consistency of Canadian public policy development that is adequate, reasonable and cost-effective;

• Support sound federal government decision-making, capitalizing on opportunities while minimizing crises and unnecessary controversies; and

• Increase Canada’s ability to positively influence international standards and applications of the Precautionary Approach.

In fiscal year 2001-2002, PCO briefed the Special Committee of Council in its consideration of a wide range of significant regulatory submissions, including those relating to the implementation of the Anti-Terrorism Act, mechanisms to curtail money laundering and terrorist financing, enhanced air security controls and strengthened protection for Canada’s nuclear facilities.

During the fiscal year PCO also organized a series of learning symposia for the regulatory community, giving participants opportunities to exchange experiences and thoughts on the use of regulations, and to acquire a better appreciation of the challenges faced by their colleagues. For example, Regulation Without Borders, held on March 22, 2002, was a half-day event that brought together individuals from all phases of the regulatory development process — policy analysts, legal staff, inspection and enforcement staff from virtually every department with regulatory authorities, as well as central agency analysts.

Canada’s Environment and Sustainable Development
Environmental issues and sustainable development are important to Canadians. In 2001-2002, PCO coordinated the preparation and submission of new or revised policies for the consideration of the Prime Minister, the Cabinet and Cabinet committees. Topics included air and water quality in Canada (with both a domestic and an international perspective), toxic substances research, children’s environmental health, national parks, and contaminated sites such as the Sydney Tar Ponds.

PCO provided strategic advice to the Prime Minister on climate change, and organized and supported meetings of the Reference Group of Ministers on Climate Change. The work of the Reference Group resulted in the consolidation of Canada’s position for international negotiations and domestic policy options for the Kyoto Protocol, and submission of early action items for funding consideration (for example: the wind energy incentive announced in the December 2001 Budget).

In Canada’s ecosystem, certain species require special protection because they are deemed to be at risk of extinction. People and their activities often exacerbate the situation, compelling decision-makers to try to strike a balance between conservation and the economic goals of Canadians. As the Government was not able to pass protective legislation on three previous occasions, PCO provided policy advice to the Cabinet on ways to maintain an effective balance in the Government’s new Species at Risk bill, between the members of the House of Commons Standing Committee on the Environment and Sustainable Development, and other parliamentarians and stakeholders. This approach was successful, and the House passed the new bill in June 2002.

PCO ensured that other federal departments understood the importance of sustainable development as part of the Government’s agenda — to improve the quality of life for Canadians — by participating in and supporting the activities of the Sustainable Development Coordinating Committee, the Assistant Deputy Ministers Task Force on Sustainable Development and the Interdepartmental Network on Sustainable Development Strategies. PCO advised the Prime Ministers on his participation in the World Summit on Sustainable Development (South Africa, August 2002), and supported departments in developing Canada’s approach to the Summit.

The current OECD Review of Regulatory Reform in Canada (to be made public by the OECD in November 2002) establishes that Canada is a regulatory leader and innovator, with strong regulatory capacities and a mature and well-functioning regulatory governance system. While the report is largely positive, PCO has taken note of areas where the OECD feels the Canadian approach could be enhanced.

INTERNATIONAL AND INTERGOVERNMENTAL RELATIONS

International Relations and Trade
To support the Prime Minister in his international role as Head of Government for Canada, PCO provided policy advice on all aspects of Canada’s relationships with other countries and international organizations. In 2001-2002 PCO liaised with the Department of Foreign Affairs and International Trade (DFAIT), the Department of National Defence (DND), the Canadian International Development Agency (CIDA) and other departments to coordinate plans to support the Prime Minister in his travels abroad when he visited Australia, Belgium, China, Germany, Italy, Mexico, Russia, Sweden and the United States. PCO also coordinated and developed communications plans and media material for these trips, and PCO staff travelled with the Prime Minister to provide first-hand support and policy advice. In addition, the Prime Minister hosted bilateral meetings with delegations and Heads of State or Government from some 35 countries and international organizations.

In 2001-2002, with the support and advice of PCO, the Prime Minister represented Canada at a number of international summits, including the Third Summit of the Americas (Quebec City - April 2001), the G-8 Summit (Genoa - July 2001), and the World Economic Forum (New York - January 2002). Working with several federal agencies and organizations, and particularly DFAIT, PCO provided leadership and advice for the G-8 Summit, hosted by the Prime Minister in Kananaskis in June 2002, and coordinated the input of committees and other federal organizations. PCO also provided the Prime Minister and other Ministers in the portfolio with policy advice and assistance to prepare for the World Summit on Sustainable Development, in Johannesburg, South Africa, in late August 2002.

PCO was very active in 2001-2002, coordinating federal activities and providing the Prime Minister with strategic policy advice concerning trade disputes on softwood lumber, aircraft financing, and export dairy products. Canada also agreed to provide market access to Least Developed Countries to the Canadian market by eliminating tariffs and quotas on most imports. PCO provided leadership and coordinated the work of several organizations (Natural Resources Canada, Atomic Energy of Canada Limited, the Canadian Environmental Assessment Agency, the Department of Finance and Export Development Canada) to finalize the environmental assessment and to obtain funding approval for the construction of a CANDU nuclear reactor in Cernavoda, Romania.

Federal-Provincial-Territorial Relations
In 2001-2002 PCO provided policy advice and support for meetings between the Prime Minister, the Minister of Intergovernmental Affairs, senior federal officials, and their provincial and territorial counterparts that helped advance the Government’s agenda across Canada and the functioning of the Canadian federation.

Fundamental to supporting Canadian intergovernmental relations, PCO provides well-grounded analysis and strategic advice on fiscal federalism and related economic issues. In collaboration with the Department of Finance, PCO effectively supports the Minister of Intergovernmental Affairs in his relations with Cabinet colleagues and provincial counterparts, and for his parliamentary and public interventions. PCO monitors developments and provides sound and timely advice to allow the Minister to respond to concerns that pertain to equalization and other transfer payments, the fiscal balance between governments in Canada and the pattern of federal spending.

PCO has developed its legal and constitutional capacity to provide advice and support on litigation and policy issues involving all levels of government (federal, provincial, territorial, Aboriginal and municipal), and to facilitate the bilateral reform or amendment of federal legislation, regulations, procedural mechanisms and institutions. PCO coordinated advice and support for Ministers on a constitutional amendment to change the name of the province of Newfoundland to Newfoundland and Labrador, which was adopted by Parliament in 2001 and proclaimed by the Governor General.

PCO actively contributes to the Government’s ongoing efforts to safeguard national unity and enhance understanding of Canadian federalism by monitoring federalism trends both in Canada and around the world. This work is supported by initiatives such as the Forum of Federations and the Federalism and Federations Program of the Social Sciences and Humanities Research Council (SSHRC). Policy development is essential to strengthen the identity and attachment of Canadians to their country, and to promote a better understanding of the nature of contacts and linkages among Canadians.

PCO supports the Assistant Deputy Minister Forum on Managing Intergovernmental Relations. In 2001-2002, PCO facilitated interdepartmental discussions on major federal-provincial-territorial issues, such as health care renewal, alternate dispute resolution, and the review of the Social Union Framework Agreement (SUFA).

To bring a regional perspective to central decision-making, this year PCO enhanced its working relationships with Federal Councils in each region and regional economic development agencies. By developing these closer working relationships, PCO was also able to increase the number and raise the profile of federal activities across Canada.

Review of the Social Union Framework Agreement
The Minister of Intergovernmental Affairs is the federal coordinator for the three-year review of the Social Union Framework Agreement (SUFA), to evaluate progress in implementing the provisions of the Agreement. In 2001-2002, PCO coordinated the review across all departments affected by SUFA. PCO also co-chaired a federal-provincial-territorial working group tasked with conducting a joint review of the Agreement, which included government-to-government discussions and a public consultation component that entailed establishing a web site (www.sufa-review.ca) and conducting three roundtables. PCO also worked with Human Resources Development Canada (HRDC) to develop an Aboriginal consultation process to ensure that the views of Canada’s Aboriginal peoples are reflected in the three-year review.

Official Languages
Recognized as a key component of Canadian unity, the Government considers official languages to be an important policy priority requiring a high profile. The Clerk, in his role as the Head of the Public Service, has also stated that official languages is a key management priority. In the spring of 2001, the Prime Minister explicitly asked the Minister of Intergovernmental Affairs to work on developing an action plan to strengthen the Official Languages Program in Canada, and to chair the Reference Group of Ministers on Official Languages (RGMOL) that includes key Ministers with statutory responsibilities for official languages (Justice Canada, the Treasury Board, and the Department of Canadian Heritage).

PCO continues to provide leadership in the development of official languages policy and to make progress in strengthening interdepartmental capacity. A director of Official Languages was appointed in 2001 to support and assist the Minister of Intergovernmental Affairs with the responsibilities entrusted to him. The Directorate supported the Committee of Deputy Ministers on Official Languages (CDMOL). The Directorate led and coordinated the work of an interdepartmental support committee to advance issues and prepare information for senior officials and Ministers.

The first step taken in the preparation of the Official Languages Action Plan was to identify the key action items, announced in June 2002:

Education – in the minority mother tongue and in the second language;

Development of minority communities – provision of appropriate services in the minority language; and

An exemplary Public Service – to assure the availability of services for Canadians in the official language of their choice.

The Official Languages Directorate supported and facilitated meetings of the Minister of Intergovernmental Affairs with, among others, Government Ministers, the Commissioner of Official Languages, the Fédération des communautés francophones et acadienne du Canada (FCFA), and the Quebec Community Groups Network. At a meeting in the fall of 2001 the Minister met with all provincial ministers responsible for francophone affairs.

PCO’s activities pertaining to the support of the Minister, and interdepartmental leadership and coordination concerning the Official Languages Program, CDMOL and RGMOL will continue in 2002-2003 under the responsibility of a Director General appointed in April. Approval of the detailed Action Plan is expected in the fall with implementation planned for the spring of 2003.

THE SAFETY AND SECURITY OF CANADIANS

In its leadership and coordination role concerning Canadian security issues, PCO continuously monitors social, economic, fiscal, legal, national security and foreign and defence policy issues to identify priorities and provide the best non-partisan advice to the Prime Minister, Ministers and the Cabinet on the impact of these issues on Canada’s security, and the most appropriate policy interventions to ensure the continued safety and security of Canadians. All-source intelligence analysis is prepared regularly to provide information of interest to senior Canadian officials involved in foreign policy formulation. PCO liaises and exchanges views with domestic and foreign departments and agencies involved in intelligence analysis and in strengthening the security of Canadians. Hence PCO is uniquely positioned to provide policy-neutral expert analysis on a wide range of foreign political, economic, strategic and security issues for officials in PCO and other federal departments with international responsibilities.

The Aftermath of September 11^th
The terrorist attacks perpetrated against the United States on September 11, 2001, had a major impact in Canada. In part because of PCO’s ongoing efforts to implement the Government’s agenda prior to September 11^th, the Government was able to act quickly to manage the aftermath of the crisis in Canada — more specifically increasing airport, transportation and border security. The development of a cohesive and integrated Canadian response to security concerns in the face of the new threat environment became a dominant element of the Government’s agenda.

PCO provided advice to the Prime Minister and the Deputy Prime Minister on short- and long-term security issues arising from the September 11^th events, managing the immediate effects of the crisis and developing strategies, policies, legislation and programs to strengthen the ongoing security of Canadians. PCO acted to coordinate the Government’s immediate response activities, both domestic and internationally, including our collaborative efforts with the U.S. on border security.

PCO prepared intelligence reports detailing crisis-related developments, for distribution to senior policy-makers at the federal level in Canada. Over 75 assessments were prepared on issues directly related to the crisis in the period September to December 2001, and heightened coverage continued into 2002. PCO collaborated with the Canadian intelligence community to improve the mechanisms for timely sharing of information. Relations with allied intelligence were reinforced, in part because of increased crisis-related contacts. An increase in the surveillance of the food system was initiated, against the threat of terrorist actions at border points, as well as domestically.

PCO led and coordinated the interdepartmental response to the crisis through the creation of formal co-ordination mechanisms and enhanced direct contact between personnel in different federal departments and agencies. To improve interdepartmental policy capacity on security and related issues, and to support Ministers’ collective decision-making, a security framework was developed under PCO’s leadership with the following objectives:

• Deter, prevent, detect, prosecute and/or remove terrorists from Canada;

• Facilitate Canada-U.S. relations (border, economy); 

• Undertake international counter-terrorism initiatives; and

• Protect critical infrastructure and enhance emergency preparedness.

PCO supported the Government’s security program in Parliament. After events of September 11^th, Parliament provided a national forum for debate, information and scrutiny on the crisis facing Canadians and the world. The Prime Minister and Ministers addressed the House of Commons in over 50 hours of special debates on terrorism and related issues in the fall of 2001. Parliament considered and passed anti-terrorism legislation and legislation to implement commitments in the December 2001 Budget for increased resources to enhance the security of Canadians.

Ad Hoc Cabinet Committee on Public Security and Anti-Terrorism
PCO supported the Prime Minister in his decision to form the Ad Hoc Cabinet Committee on Public Security and Anti-Terrorism (PSAT), with Minister Manley as Chair. PSAT was tasked to develop a Canadian response to the events of September 11^th and to ensure well considered, timely and collective decisions by Ministers on security policy. The Committee reviewed a full range of legislative, policy, program, and communications-related issues relevant to public security and combatting terrorism.

Recommendations were made and approved (as part of the December 2001 Budget) for an immediate programming package for fiscal year 2001-2002 of $280 million for security, intelligence and law enforcement departments and agencies to heighten border security and undertake initiatives to enhance the security of Canadians. PSAT also oversaw the development of a broad range of legislative initiatives to increase security and public safety, in particular Bill C-36, that was proclaimed as the Anti-Terrorism Act. The legislation addresses the challenge of dealing with the sophisticated and trans-border nature of Canada’s capacity to suppress, investigate and incapacitate terrorist activity.

Borders Task Force
Following the events of September 11^th, Minister Manley was named, along with U.S. Homeland Security Director Tom Ridge, to develop a Smart Border Action Plan for the two countries. The Borders Task Force was established within PCO to advise the Deputy Prime Minister, coordinate the efforts of a range of government departments, and liaise with the U.S. Office of Homeland Security in creating a 21^st century border with the United States — to strengthen the security foundation of the border while expediting the flow of low-risk goods and people across it.

The Smart Border Declaration and 30-point action plan were signed on December 12, 2001. The action plan contained commitments to reach agreement on a list of initiatives advanced by Canada to expedite the flow of goods and people, strengthen infrastructure and improve coordination and information sharing. PCO’s coordination with the U.S. Office of Homeland Security was critical in finding mutually agreeable solutions on issues of critical importance to Canadians. Over the course of the year, agreements were reached on the following key items:

Secure flow of people – to expand the NEXUS joint program that allows pre-screened frequent travellers to cross the Canada-U.S. land border expeditiously in both directions; and to agree on the text of a safe-third-country agreement to enhance Canada’s capacity to manage refugee claims;

Secure flow of goods – to launch a joint expedited clearance program called Free and Secure Trade (FAST), to allow exporters and importers to get their goods across the border more quickly and reliably;

Secure infrastructure – announcement of Canada’s investment of $600 million in the Border Infrastructure Fund, and agreement to combine $150 million of the Fund with a matching contribution from the Government of Ontario for improvements to the critical Windsor-Detroit corridor; and

Coordination and enforcement – agreement to expand the number of integrated border enforcement teams to fourteen, and to conduct joint counter-terrorism training exercises that will strengthen the capacities of public safety planners and emergency response personnel.

Stabilizing the Airline Industry
PCO worked closely with Transport Canada and other federal organizations to achieve a timely Government response to issues facing the airline industry following the terrorist attacks on September 11^th. PCO coordinated ministerial meetings to assess the economic and financial impact. Several options designed to stabilize Canada’s airline industry and restore public confidence in the security of air travel were developed and included in advice to the Prime Minister and the Cabinet. The Government was able to move quickly to introduce a number of measures to aid recovery, including indemnification of the aviation sector for war risk liability, and an airline compensation program. Collectively, these measures have had a stabilizing influence on the travel industry, and airline passenger traffic levels have gradually returned to previous levels.

SOCIAL ISSUES

Culture
To take the first step in fulfilling another Government commitment made in the 2001 Speech from the Throne, PCO worked closely with the Department of Canadian Heritage on the development of the cultural package, Tomorrow Starts Today, announced in May 2001. This package promotes the arts and culture in Canada that are instrumental in attracting the talent and investment wanted in our communities to expand tourism and promote Canada and Canadian goods and services abroad. Arts and culture also help Canadians to understand their past, and foster a sense of shared citizenship and social cohesion.

This cultural package posed particular challenges due to the number of existing and new programs involved, and the need to ensure they formed an integrated and coherent whole. The policy development effort was significant, requiring coordination with other federal agencies and extensive interdepartmental collaboration.

Voluntary Sector
PCO’s Voluntary Sector Task Force provides leadership for the Voluntary Sector Initiative (VSI), set up in 1999-2000, with its five-year mandate to strengthen the capacity of the sector to meet the demands of Canadians, and to support voluntarism by improving federal policies, programs and services to Canadians. Senior representatives from across government and the voluntary sector have worked side-by-side in an innovative joint process. The Task Force provided support to the Reference Group of Ministers on the Voluntary Sector, to other senior-level committees overseeing the Initiative on behalf of the Government, and directly or indirectly to other VSI mechanisms.

The most significant achievement of the Initiative during the 2001-2002 period was the acceptance of the Accord Between the Government of Canada and the Voluntary Sector, signed by the Prime Minister and a senior voluntary-sector representative. The Accord provides a framework to continue the bilateral relationship, and commits both parties to a set of principles under which joint work will be undertaken. These commitments have led to the development of two codes of practice — one for funding, and another for policy. Other major accomplishments included:

Canada Survey on Giving, Volunteering and Participating (CSGVP): conducted by Statistics Canada, continues to provide a rich source of data on many aspects of charitable giving, volunteering and participating. It serves as a barometer of voluntary and civic action, and also identifies areas where more in-depth study is needed;

Satellite Account of Non-profit Institutions and Volunteering: maintained by Statistics Canada, the Account will improve our understanding of the economic contribution of the voluntary sector to Canadian society;

Canada Voluntarism Initiative: a new program to strengthen voluntarism, and to collect, analyse and disseminate data to improve our understanding of voluntarism’s impact on Canada’s economic and social well-being; and

United Nations International Year of the Volunteer (calendar year 2001): Canada’s celebration acknowledged the important work of volunteers and encouraged more people to become involved in voluntary service.

Health Care
In 2001-2002, PCO continued to coordinate activities intended to modernize Canada’s health system, and to implement the action plan included in the Health Agreement endorsed by all First Ministers at their meeting in September 2000. The Prime Minister, with the support of PCO, also decided to establish the Commission on the Future of Health Care in Canada in April 2001. Refer to page 24 for additional details.

PCO was instrumental in working with Health Canada on the development of a process for Dispute Avoidance and Resolution of questions relating to the interpretation of the principles in the Canada Health Act, to better resolve any issues that may arise between governments. PCO also ensured appropriate linkages to the dispute avoidance issues being considered as part of the three-year review of the Social Union Framework Agreement (SUFA), and by the Ministerial Council on Social Policy Renewal.

PCO worked with the Canadian Food Inspection Agency to manage a number of crises affecting the health of Canadians (e.g. food recalls and safety issues), and supported Ministers with respect to the health, agricultural, and international trade implications of a private member’s bill, C-287, which proposed a mandatory labelling scheme for foods containing genetically modified ingredients. The mandatory labelling issue was subsequently referred to the Standing Committee on Health.

ABORIGINAL PEOPLE

In 2001-2002, PCO continued to provide strategic policy advice and support to the Prime Minister, the Minister for Intergovernmental Affairs and the Federal Interlocutor for Métis and Non-Status Indians on issues related to the ongoing development of Canada’s Aboriginal policy, and relations with the provinces and territories, and Métis, non-status Indians and other Aboriginal organizations. PCO collaborated with other departments to advance self-government initiatives and land claims. Efforts were particularly focussed on providing advice to Ministers and other departments on the development of draft legislation on First Nations governance and First Nations financial institutions.

PCO supported efforts across government to ensure that Aboriginal people have appropriate and meaningful opportunities to provide input to policy development so that policy outputs better reflect their needs.

PCO coordinated tasks that required the participation of all federal departments dealing directly or indirectly with Aboriginal policy. To ensure their participation and appropriate horizontal collaboration among departments, PCO organized and chaired interdepartmental meetings, working groups and discussions. In providing policy advice to the Prime Minister and Cabinet members on a number of significant Aboriginal issues, horizontal collaboration with other central agencies and federal departments ensured the advice was sound, relevant and added value to facilitate the Cabinet decision-making process.

During the period, PCO provided strategic advice to departments that develop policy affecting Aboriginal initiatives such as First Nations Governance, First Nations Financial Institutes and the First Nations Statistical Institute. PCO also collaborated on other key issues including the devolution of the Government’s land and resource responsibilities in the Northwest Territories, the negotiation of comprehensive land claims, and the development of an Independent Claims Board for Indian Specific Claims to replace the Indian Specific Claims Commission. PCO played a lead role in formulating the Urban Aboriginal Strategy, and administered a small grants and contributions budget under the authority of the Federal Interlocutor for Métis and Non-Status Indians. (For further details, refer to Annex C, Financial Table 7 - Transfer Payments on page 38)

PCO continued to work with other departments to develop strategies for Canada to advance Aboriginal priorities internationally. Advice was provided concerning the participation of Aboriginal people in the G-8 Summit in Quebec City in July 2001 and the World Conference Against Racism in September 2001. PCO also participated in the development of Canada’s negotiating positions in the ongoing drafting of declarations on indigenous rights by the United Nations and the Organization of American States.

Reference Group of Ministers on Aboriginal Policy
PCO supported the creation (in August 2001) and operation of the Reference Group of Ministers on Aboriginal Policy (RGMAP), with the Minister of Intergovernmental Affairs as Chair. PCO provided support to the Minister of Intergovernmental Affairs and the Federal Interlocutor for Métis and Non-Status Indians by ensuring their effective participation in RGMAP discussions, particularly on issues relating to off-reserve Aboriginal people and to the management of federal-provincial-territorial relations. PCO provided advice and analysis for all ministerial members. Specifically, PCO actively participated in a comprehensive review of federal practices with respect to Aboriginal peoples, and played a leading role in developing and recommending feasible and flexible solutions designed to address the varied needs of Aboriginal peoples and their communities.

Atlantic Aboriginal Fisheries
In 2001-2002, PCO continued to advise and support the Prime Minister and the Minister of Fisheries and Oceans on policy priorities and the management of the Government’s long-term strategy for the Aboriginal fishery in the Atlantic region. PCO also coordinated the horizontal consultation processes required for contingency planning in the event that further fisheries disturbances occur, and to respond to the Miramichi Bay Community Relations Panel Report.

The objective of the long-term strategy is to meet federal legal obligations set by the Supreme Court of Canada in its 1999 decisions in Regina vs. Marshall. The decisions require the Government to increase Aboriginal access to the fishery to permit First Nations people to earn a "moderate" livelihood, and to roll treaty and Aboriginal rights issues into a comprehensive claims process. Implementation of the strategy was contentious and required band-by-band negotiations of fisheries agreements. PCO, working with the Department of Fisheries and Oceans, enabled the coordination of government activities that resulted in growing acceptance among stakeholders and peace on the water.

PUBLIC SERVICE REFORM

The Public Service is facing many new challenges — demographic change, high turnover in the next decade, labour shortages, effects of technology and globalization, and the increasing expectations of Canadians for good government and high-quality, fast-paced government services. To meet these challenges, the Public Service must be a competitive employer able to attract, develop and retain the talent necessary to serve Canadians in the 21^st century — a Public Service distinguished by excellence, integrity and adaptability.

In 2001-2002, PCO provided advice to the Prime Minister, the Clerk, and senior officials concerning Public Service reform. PCO supported the Clerk in his role as the Head of the Public Service to ensure leadership and interdepartmental and central agency coordination, on reform initiatives that will modernize the Public Service. This work included the preparation of communications to managers and employees, and the coordination of various meetings and related activities of deputy ministers, other senior federal officials and central agencies.

The human resources management framework governing the Public Service is 35 years old. In April 2001, the Prime Minister created the Task Force on Modernizing Human Resources Management in the Public Service, a small multi-disciplinary team of Public Service experts in the areas of staffing, labour relations, law, machinery, communications and policy development. The Task Force was asked to review the legislative, institutional and policy framework governing the management of human resources in the Public Service of Canada, and to recommend legislative amendments to three Acts (Financial Administration Act, Public Service Employment Act, and Public Service Staff Relations Act) for Cabinet consideration.

An integrated consultation strategy was developed based on four themes (values, staffing, recourse and labour relations), and the Task Force presented stakeholders with models for new staffing and labour relations regimes. Extensive meetings and consultations in the summer of 2001 allowed the Task Force to explain the need for reform to stakeholders. The Task Force has also reviewed the legislation governing human resources management, and researched and considered alternative models being used by provincial governments in Canada and by other countries (Australia, New Zealand and Great Britain).

The Task Force consultations and related discussions among departments led to an increased interdepartmental capacity to address horizontal issues as they are raised. The Task Force continues to engage stakeholders concerning the future of human resource management, to address the changes that will make it a reality, and to contribute to overall efforts to renew the Public Service and deliver high-quality programs and services to all Canadians.

The Clerk, in his Ninth Annual Report to the Prime Minister on the Public Service, dated March 27, 2002, (available on line at www.pco-bcp.gc.ca) outlined the continuing challenges facing the Public Service and what is being done to address them. The importance of leadership and our strong foundation of Public Service values in becoming a more people-centred, modern Public Service top the list.

WORKING SMARTER – CONTINUOUS IMPROVEMENT

PCO is committed to working smarter and serving Canadians better through continuous improvement of its corporate culture and work environment. More effective common services can be achieved by applying new techniques and technologies to implement up-to-date solutions in day-to-day operations. This approach will continue to ensure the most timely and expert administrative, financial, and human resources information and services are available in PCO to support those who need them — the Prime Minister and other Ministers in his portfolio, the Cabinet and Cabinet committees, task forces and commissions of enquiry, and all PCO managers and personnel. These efforts also provide access to the most accurate, comprehensive and current information for all who want or need it, both within and beyond PCO — on PCO’s own internal Intranet, the government-wide Publiservice network, and several public Internet web sites.

Resource Management Highlights
To enhance the availability of meaningful and accurate financial information for managers within PCO, as well as for the Treasury Board, Parliament and the general public, in 2001-2002 efforts were made to ensure that the FreeBalance accounting software originally installed in 1999-2000 continued to meet both internal and government-wide Financial Information Strategy (FIS) requirements. Greater access and more on-line options were accorded to PCO managers and employees, and a departmental user group was established.

As part of the government-wide ongoing Modern Comptrollership initiative, in 2001-2002 PCO successfully implemented new accrual accounting requirements to capture, report and generate PCO opening balances, to capitalize and value all PCO assets, and to update the PCO chart of accounts.

PCO needs a strong, committed and fully representative workforce to provide effective support and knowledgeable advice to the Prime Minister and the Cabinet. In 2001-2002 PCO delivered training to employees and managers about the policy requirements and related tools, options and expected results concerning Employment Equity and Diversity and Workplace Accommodation.

Managers and employees were encouraged to participate in the development of a Human Resources Strategy to address the particular challenges facing PCO — to define organizational priorities and initiatives to meet PCO’s recruitment needs, to support workplace well-being and to foster leadership development. The strategy is being implemented by developing new initiatives in areas such as classification reform, recruitment and retention, continuous learning, labour relations, occupational safety and health, and new human resources management systems.

Management of PCO’s Information Assets
The Records, Document and Information Management System (RDIMS) project initiated in 2000-2001 supports the Working Smarter initiative in PCO by providing modern technological tools for information life-cycle management. RDIMS enhances information sharing and retrieval among information analysts and advisors, ensuring that the Prime Minister, the Clerk, Cabinet committees and others in PCO receive information and advice in a timely and efficient manner. With the successful completion of the initial pilot, this year RDIMS was implemented in the first PCO secretariat, where business processes were modified to incorporate the optimal use of RDIMS.

Efforts were made in 2001-2002 to further the development of PCO’s Intranet and Publiservice sites and their contents:

The PCO Intranet is the key employee access point to electronic information holdings and services. In 2001-2002 new work-sharing tools were implemented and published information from several platforms was transferred, to create an upgraded site that is more conducive to work integration and collaboration; and

Publiservice is the on-line network shared and used by all federal departments and agencies. Applying a one-window strategy, the PCO Publiservice site now makes information more easily accessible to policy analysts and decision-makers in PCO and in other federal government departments. Information is easier to find, the formats for advice and the documents produced using this information are more consistent, and the resources needed to maintain this information are being used more effectively.

Broadening access to more and better information, and providing faster and easier access, means that quality information is readily available to those in PCO who need it to provide advice to the Prime Minister, the Cabinet or other federal officials, or to respond to questions from the public, the media, other governments, and other levels of government. A significant technology enhancement in 2001-2002, PCO now has video conferencing facilities installed in Toronto, and two other sites are under development, to enable ministers who are not in Ottawa to participate fully and securely in Cabinet committee meetings. PCO also provided advice to the commissions and task forces within the portfolio, to help them develop their Internet sites.

PCO is one of 28 core departments included in the federal Government-on-Line (GOL) initiative. PCO’s primary GOL activities in 2001-2002 were:

Prime Minister’s web site (www.pm.gc.ca) – upgraded to deal more effectively with e-mails from the public and requests for congratulatory letters and certificates; and

PCO’s web site (www.pco-bcp.gc.ca) – made compliant with the federal Common Look and Feel initiative.

Information for Canadians
PCO’s primary responsibilities do not require the delivery of services and programs directly to Canadians. However, PCO does provide public information on its Internet web sites and interacts with Canadians through the Prime Minister’s Executive Correspondence Services, and the Access to Information and Privacy Office.

In 2001-2002, PCO reached a milestone — for the first time, over one million items of correspondence were received for the Prime Minister, up from 600,000 the previous year. PCO was able to handle this unprecedented volume and maintain very proactive service and quality standards at no additional cost to the taxpayer. The unprecedented volume during the year was due, in part, to a growing number of organized mail-in campaigns, using both traditional and electronic mail. The terrorist events in the U.S. also caused a marked increase in correspondence from concerned Canadians. Other subjects of interest included the war in Afghanistan, Canada’s immigration policy and the Anti-Terrorism Act, as well as the softwood lumber dispute, Falun Gong, genetically modified food and endangered species.

In 2001-2002, PCO received 299 access to information and privacy (ATIP) requests, down from 375 the previous year. Consultations from other departments (due, in part, to the events of September 11^th) were, however, more numerous, up to 323 from 251 the previous year. Work proceeded to develop a handbook to guide PCO staff when responding to access requests, to write privacy policies for the several web sites maintained by PCO, and to design improved statistical products to report to senior management and to monitor performance concerning ATIP activities.

POLICY RESEARCH INITIATIVE

The Policy Research Initiative (PRI) is an independent organization created in 1996 that receives administrative support from PCO. Its mandate is to promote the development of the strong knowledge base needed to respond to the increasingly complex challenges and opportunities facing Canadians. Typically, its activities cut across departmental, disciplinary and sectoral boundaries. To achieve its objectives, the PRI:

• Facilitates research on medium- and long-term policy issues that cut across the mandate of various federal departments (called horizontal issues); and

• Helps to build a capable, sustainable and diverse capacity for policy development across federal departments.

In 2001-2002 the PRI’s focus was on three horizontal policy research projects that were launched in 2000. Each project was championed by a Deputy Minister and led by an Assistant Deputy Minister. Some 25 federal departments and agencies have been involved in these projects:

North American Linkages – Drawing upon interdepartmental and PRI expertise, a first report has been drafted analysing the current state of knowledge and identifying key questions for further research in eight policy areas. The project team has also collaborated with leading scholars and research institutes in Canada, the U.S. and Mexico in conducting its own research and organizing learning events.

Social Cohesion – Interdepartmental consultations have been conducted to identify central research themes, and groups have been formed to carry out research under these themes. The PRI’s journal, ISUMA, devoted an entire issue to ‘social capital’, featuring articles by Robert Putnam and Michael Woolcock.

Sustainable Development – Interdepartmental research teams continued work on four priority sustainable development topics: sustainable development and governance, environment and trade, corporate social responsibility, and effective management. The fifth research team completed its activities and reported on adaptive management in the autumn of 2001.

The PRI maintains a watching brief on policy issues that have a potential for becoming horizontal projects in the future. Subjects considered in 2001-2002 included genomics, urban issues, and Aboriginal issues. As part of its mandate to develop inter-disciplinary policy research, the PRI also launched an initiative in partnership with Justice Canada, with a focus on instrument choice and tools of governance.

Nearly 900 delegates and speakers participated in the National Policy Research Conference, Bringing Communities Together, in December 2001. About two-thirds of the participants were from the federal Public Service, representing more than 30 departments and agencies. The National Policy Research Awards attracted over 1000 participants to honour and celebrate outstanding Canadian achievements in policy research.

In 2001-2002, the distribution for each of PRI’s major publications, ISUMA: Canadian Journal of Policy Research and Horizons, exceeded 8,000. With its independent editorial board and an academic publisher, ISUMA has the objectivity and analytical quality to support a broad range of policy research perspectives from across Canada. Each issue of Horizons focuses on a different theme, providing readers with a topical overview of current thinking. Both publications are available at www.policyresearch.gc.ca.

The PRI also chairs an interdepartmental working group, the Policy Research Data Group (PRDG), which recommends the allocation of $20 million annually to facilitate the development of data required to carry out research in cross-departmental priority policy areas.

The Trends Project was started in 1998 in partnership with the Social Sciences and Humanities Research Council (SSHRC), producing research on eight theme areas. In 2001, the first two books in the Trends Project series were released: Governing the Environment: Persistent Challenges, Uncertain Innovations; and Who is Afraid of the State? Canada in a World of Multiple Centres of Power. More information on the Trends Project is available at www.policyresearch.gc.ca

In the fall of 2001, the Policy Community Initiative (PCI) was co-located with the PRI because of their complementary objectives. The PCI made a concerted effort to strengthen the capacity of the policy community within the Public Service in order to strengthen the Government’s ability to deliver on its policy agenda. The PCI undertook a number of activities to meet this objective, including research on the risks associated with the choice of various policy instruments, a study on how other jurisdictions (national and international) are assessing policy capacity and implementing strategies to address them, and consultations with senior public servants to solicit their views on what characterizes good policy development and Canada’s capacity in this area.

One PCI activity of particular note is the Policy Research Development Program (PRDP), a program for recruiting highly motivated university graduates with Masters or higher-level degrees. PRDP recruits are placed in a rotational program that combines challenging and policy-relevant work assignments in host organizations (federal departments and non-governmental organizations) with formal training, mentoring, and the prospect of a senior analyst appointment at the end of the three-year training period. In 2001-2002, the Program received over 1,500 applications for only ten designated positions.

COMMISSION ON THE FUTURE OF HEALTH CARE IN CANADA

The Commission on the Future of Health Care in Canada was established in April 2001 under Part I of the Inquiries Act. Roy J. Romanow, Q.C. is the sole Commissioner. PCO provided direct support to Mr. Romanow to set up the Commission’s facilities and to undertake start-up activities. To pursue its mandate in the context of addressing long-term policy issues regarding health care in Canada in the most open and transparent way possible, the Commission’s work was divided into two phases:

• Phase I – focussing on fact-finding which resulted in an interim report tabled in the House of Commons in February 2002 — Shape the Future of Health Care in Canada (available in hard copy or on the Commission’s web site); and

• Phase II – emphasizing a national dialogue with the Canadian public and interested stakeholders on the future of the health care system, with a final report scheduled for release in November 2002.

During the fact-finding phase, the Commission consulted broadly with key health care system stakeholders, and provincial and territorial governments and Aboriginal organizations, to narrow the focus of its research and consultation priorities. In addition to gathering and synthesizing currently available information on health care in Canada and elsewhere, the Commission also sought to identify knowledge gaps and, where necessary and feasible, to commission new research to bridge them. The Commission held policy roundtables to gather international experience, and designed and implemented an academic research program to examine the impact of globalization on health care, and the fiscal arrangements for health care and health human resources, among other topics. One of the important legacies from this Commission will be the advancement of knowledge concerning health care in Canada.

During the dialogue and consultation phase begun in March 2002, the Commission is working collaboratively with a variety of partners to provide concerned Canadians with the opportunity to participate in informed discussions on the future of health care in Canada. Canadians feel a proud attachment to their health care system and view it as a defining element of their citizenship.

The Commission also established a web site (www.healthcarecommission.ca) which provides universal access to a large volume of information and is being more extensively accessed and used than similar sites established previously. Specifically, the web site is:

• A basic information source on the Commission, including all speeches, news releases, etc., that have been issued;

• A catalogue of existing research — recent reports and studies — of interest to potential users, either posted in full or linked to the site;

• A research base; with all research papers commissioned by the Commission available on the site once complete; and

• A means for public contact. Individuals can e-mail the Commission via the web site, complete on-line surveys, etc. The site also provides a telephone number (1-800-793-6161) for information and the Commission’s address for those who may wish to submit written correspondence.

INDIAN SPECIFIC CLAIMS COMMISSION

The Indian Specific Claims Commission plays a quasi-judicial role, providing a means of appeal to review Government decisions on claims made by First Nations. The Commission conducts impartial inquiries in response to a request from a First Nation, when:

• They dispute the decision of the Minister of Indian Affairs and Northern Development to reject their specific claim, or

• They disagree with the compensation criteria used by the Government in negotiating the settlement of their claim.

At the request of the Government or a First Nation, the Commission will also provide or arrange mediation or facilitation regarding claims.

The Commission strives to ensure that adequate mechanisms and processes are in place to enable it to maintain the high quality and impartiality of its services. During 2001-2002, the Commission issued three inquiry reports. Since its creation in 1991, the Commission has completed and reported on 55 inquiries. Of the 55 inquiries, 25 have been accepted for further negotiation or settled. Currently, the Commission is conducting 20 ongoing inquiries.

In 2001-2002, the Commission’s mediation unit provided services for 20 ongoing claims. Of these, eleven were carried out in formal claims negotiations between the First Nations and the Government, while three claims were pursued as pilot projects and six claims are in the planning conference stage. Over the course of the year, a negotiated settlement was reached for one claim and the report issued, while there are informal offers on the table for two others. In total, the mediation unit has participated in approximately 103 meetings concerning these 20 claims.

The Commission considers public education and awareness of claims issues in Canada to be an ongoing priority. The Commission’s Speakers Bureau, launched in 1999, continued its pro-active approach to improve the understanding among Canadians that specific claims issues are based in history, law and policy, and are often complex. Commissioners made numerous presentations about the work of the Commission, concentrating on key issues in the land claims area. Audiences have included service clubs, university and student groups, specific land claims conferences and newspaper editorial boards. Information is also available to the public on the Commission’s web site at www.indianclaims.ca.