1. Performance Budgeting in the Government of Canada
7ièmes Rencontres Internationales de la gestion publique – IGPDE et OCDE
Thème: ‘Évaluer les politiques publiques pour améliorer l’action publique’
‘Évaluer une politique, c’est rechercher si les moyens juridiques, administratifs ou financiers mis en œuvre permettent de produire les effets attendus
de cette politique et d’atteindre les objectifs qui lui sont fixés.’ (y compris la validité, l’efficacité, efficience, cohérence)
Apprécier le plus objectivement possible les effets de la politique évaluée sur la société et-ou comprendre son fonctionnement
Aider le commanditaire politique à porter un jugement de valeur sur la politique évaluée
Contribuer pratiquement à l’élaboration de la politique évaluée en éclairant ses différents protagonistes sur le sens, les conditions et les conséquences des leurs actions et décisions
Processus d’apprentissage collectif (bénéficiaires, représentants société civile, usagers)
Décision de poursuite = acte politique, évaluation = contribue
Contexte:
Création récent du Secrétariat d’État à la prospective et è l’évaluation des politiques publiques
Révision générales des politiques publiques – au cœur des réforme de l’État en France
Révisions des programmes
Focalise sur l’examen des résultats sous les aspects de l’équilibre des dépenses publiques et de l’efficience
L’évaluation inclut la prise en compte des besoins sociaux et des attentes des bénéficiaires pour interroger la pertinence des politiques publiques
Qu’elle est la complémentarité des différents dispositifs
Working Party of Senior Budget Officials
OECD-MENA Senior Budget Officials Network
Bruce Stacey, Executive Director, Treasury Board Secretariat
Cairo, Egypt, November 24 – 25, 2008

2. Outline Canadian Context New Expenditure Management System
Foundation – MRRS & Evaluation
Strategic Review Process
Whole of Government Reporting
Lessons Learned 2

3. The Canadian Context

4. Canada is a big country, with a small population, and a decentralized government that delivers services across the world …
This poses unique monitoring and reporting challenges:
35 million people in a vast geographic area
Highly decentralized federation: 10 provinces, 3 territories
Provinces are equal to the federal government and have real power
Hundreds of federal-provincial agreements and transfer payment programs
Over 90 departments & agencies and 46 Crown corporations
Over 300,000 core public servants
Over 1,600 points of service
Diplomatic presence in about 180 countries - Canadian Forces in 17 missions
Over 2500 programs and 350 million transactions per year
(source - Annex – Canada’s Performance)
Canada is a decentralised federation of ten provicnes and three territories;
Provinces are legally the equal to the federal government and have real power
Spheres of responsibility are set out constitually (e.g. health and education are under provincial authority; defence and immigration are federal matters)
The Public Service of Canada is the nation’s largest employer, with 250,000 core federal public service employees;
There are also 220,000 members of the Canadian Forces, the RCMP and Crown corporations (e.g. CBC, Via Rail, Canada Post)
(source: Economic Outlook 2007)
Program expenses to GDP is XXX
Canada’s size and governmental system pose unique challenges for monitoring and reporting:
highly decentralized federation
32,7 million citizens over a vast geographic area
Hundreds of federal-provincial agreements and federal programming (weighted towards transfer payments)
Federal Government comprises over 90 departments & agencies, 46 Crown corporations
Over 250,000 core public servants
Over 1,600 points of service accross Canada
Federal fiscal position remains strong
Ten consecutive federal surpluses ($13.8 billion or 1% of GDP in )
Program Expense-to-GDP is declining since (at about 13% in )
On track to eliminate its total government net debt by 2021 4

5. Federal Spending Overview 2006-2007
Total Expenses $222.2B (Fiscal Year )
Major Transfer Payments $98.1B
Direct Program Spending $90.2B
TB/TBS Focus
Source: Public Accounts of Canada

6. Expenditure Review & Results Agenda in Canada: A History
Federal Accountability Act cyclical evaluation of all transfer payment programs
Management, Resources and Results Structures – regaining detailed program level knowledge
Improved Reporting to Parliament – moving to whole of government planning and reporting
Renewed Evaluation Policy – quality, capacity, credibility, and expansion of coverage
Management Accountability Framework – assessing management performance across government
Canada’s Performance – linking programs to societal performance
Results for Canadians – results-based management as a stated priority of government
Transfer Payment Policy – performance frameworks and evaluations reviewed by TBS
Modern Comptrollership – investment in management practices and controls
Program Review – dealing with a large deficit through major expenditure cuts
Departmental Reporting to Parliament – moving to results-based plans and reports on performance
Planning Reporting and Accountability Structures – unsuccessful try at linking resources to results
First Program Evaluation Policy – government-wide implementation
Today’s Agenda
2000
Mid 90s
Late70’s

7.  EMS Renewal approved in June 2007
Expenditure Management System in Transition
Designed 15 years ago to fight deficit and control new spending
1995: Program Review of the entire spending base
Late 1990s: budget surpluses lead to new spending without an anchor to discipline that spending
Cabinet time focused almost exclusively on new spending
Ad hoc restraint exercises to control spending with no real focus on performance
Governments around the world emphasize outcomes – Australia, U.K., U.S., New Zealand.
Budget 2006 and 2007 committed the government to a new ongoing approach to managing overall spending
 EMS Renewal approved in June 2007

8. The New Expenditure Management System

9. The underlying objectives are management excellence and value for money …
The government wants to deliver high quality services and high value programs at reasonable cost
Expenditure Management System Renewal is changing the way the government operates and aims to ensure:
Aggregate fiscal discipline (i.e. control of overall growth in spending)
Effective allocation of government resources to areas of highest relevance, performance and priority
Efficient and effective program implementation
(source - Annex – Canada’s Performance)
Canada is a decentralised federation of ten provicnes and three territories;
Provinces are legally the equal to the federal government and have real power
Spheres of responsibility are set out constitually (e.g. health and education are under provincial authority; defence and immigration are federal matters)
The Public Service of Canada is the nation’s largest employer, with 250,000 core federal public service employees;
There are also 220,000 members of the Canadian Forces, the RCMP and Crown corporations (e.g. CBC, Via Rail, Canada Post)
(source: Economic Outlook 2007)
Program expenses to GDP is XXX
Canada’s size and governmental system pose unique challenges for monitoring and reporting:
highly decentralized federation
32,7 million citizens over a vast geographic area
Hundreds of federal-provincial agreements and federal programming (weighted towards transfer payments)
Federal Government comprises over 90 departments & agencies, 46 Crown corporations
Over 250,000 core public servants
Over 1,600 points of service accross Canada
Federal fiscal position remains strong
Ten consecutive federal surpluses ($13.8 billion or 1% of GDP in )
Program Expense-to-GDP is declining since (at about 13% in )
On track to eliminate its total government net debt by 2021 9

10. Treasury Board Secretariat
The Expenditure Management System in Canada is decentralized between central agencies, each with specific roles
Finance Department
Ensures aggregate fiscal discipline is maintained by:
Establishing fiscal framework & determining total spending levels
Budget
Privy Council Office
Support elected government in establishing priorities and meeting these through the effective allocation of spending to government priorities by
Supporting Prime Minister & Cabinet Committees
Managing flow of Cabinet business
Facilitating broad Govt policy development
Treasury Board Secretariat
Supports Treasury Board (TB) in effectively allocating spending in manner that ensures operational efficiency and effectiveness by:
Establishing and monitoring adherence to TB management policies (financial & non financial)
Supporting TB approval of detailed operational plans & recommendation of resource appropriations for new programs
Supporting TB determination of resource needs / investment opportunities for existing programs

11. The new System is supported by three pillars
All spending must be managed to transparent results/outcomes
Clear measures
Assessed and evaluated systematically and regularly
Demonstrating value for money
Up-front discipline is applied to new spending proposals to manage spending growth
Include clear measures of success
Demonstrate how the proposal fits with existing spending and results
Provide reallocation options for funding
Strategic Reviews assess existing spending over a four-year cycle to ensure alignment with priorities, and effectiveness, efficiency and economy
Programs expected to demonstrate results in support of priorities
Decision-making to use objective, evidence-based information
A mature performance measurement and reporting infrastructure is already in place
All major departments and agencies
Have internal audit and evaluation units
Produce for Parliament their reports on plans and priorities and departmental performance reports
Are developing outcome frameworks for all their programs
Have started cyclical expenditure reviews
Treasury Board Secretariat
Has a strong policy centre for results-based management
Assesses management performance across government
Produces an annual report called Canada’s Performance
Advises Cabinet and the Department of Finance on potential reallocations based on expenditure reviews
Office of the Auditor General
Produces performance audits of departments and agencies 11

12. The Foundation MRRS & Evaluation

13. A common approach to the collection, management, and reporting of performance information is key …
Management, Resources and Results Structure Policy (2005)
Provides detailed information on all government programs
Establishes the same structure for both internal decision-making and external accountability
Helps to link resources and results -- planned and actual
Is being implemented across government 13

14. Sub-Sub Activity Level**
The Program Activity Architecture
Policy requirements for Strategic Outcomes incl:
Performance Measures
Strategic Outcome*
Accountability levels to Parliament (Estimates & Public Accounts)
*require TB approval, incl. major & minor changes
Policy requirements for each program activity element include:
Program title & description
Expected results
Performance measures
Planned & actual spending
Target & actual results
Governance
Program Activities*
Departmental PAA: reflect the inventory of all the programs of a department depicted in their logical relationship to each other and to the SO(s) to which they contribute
**require TBS approval
Sub-Activity Level**
Sub-Sub Activity Level**
Lowest Level programs

15. Department of Heritage 2009-10 Program Activity Architecture
SO1
Canadian cultural content and artistic expressions are created and accessible at home and abroad
SO2
Canadians have a sense of their Canadian Identity
SO3
Canadians participate and excel in sport SO
1. Arts
2. Cultural Industries
3. Heritage
4. Promotion of and Attachment to Canada
5. Engagement and Inclusion
6. Official Languages
7. Sport PA
1.1 Arts Presentation Canada
2.1 Broadcasting Policy
3.1 Museums Assistance Program
4.1 Celebration and Commemoration Program
5.1 Multiculturalism Program
6.1 Development of Official-Languages Communities Program
PSA
7.1 (Sport) Hosting Program
2.2 Canadian Television Fund
1.2 Cultural Spaces Canada
5.2 Action Plan Against Racism
3.2 Canada Traveling Exhibition Indemnification Program
4.2 State Ceremonial and Protocol
2.3 Canadian Feature Film Policy
6.2 Enhancement of Official Languages Program
7.2 Sport Support Program
1.3 Fathers of Confederation Buildings Trust
4.3 International Expositions
5.3 Human Rights Program
2.4 National Training Program in Film & Video Sector
3.3 Canadian Heritage Information Network
5.4 Building Communities through Arts & Heritage
6.3 Official Languages Coordination program
1.4 National Arts Training Contribution Program
4.4 Canadian Studies Program
7.3 Athlete Assistance Program
2.5 Film or Video Production Tax Credits
3.4 Canadian Conservation Institute
5.5 Aboriginal Peoples’ Program
2.6 Canada Music Fund
4.5 Exchanges Canada Program
1.5 Canadian Arts and Heritage Sustainability Program
Federal Secretariat
2.7 Book Publishing Industry Development Program
3.5 Movable Cultural Property Program
5.6 Historical Recognition Program
4.6 Katimavik Program
2.8 Canada Magazine Fund
2.9 Publication Assistance Program
2.10 Canadian Culture Online
2.11 Canada New Media Fund
2.12 Copyright Policy
2.13 Cultural Sector Investment Review
2.14 Trade Routes Program
8. Internal Services
(details being developed by central agencies)
2.15 TV5
2.16 UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions

16. MRRS Well structured information helps decision-making … DEPARTMENTS
Management Tool
Reflects full mapping of programs
Better alignment of resources & priorities
More evidence based reporting
Improve program performance
More logical and consistent basis for interaction
PARLIAMENT
Reporting Tool
Stronger accountability
for spending and results
Common basis for planning and reporting inside and outside
Finance
PCO
Budget
Plan
TBS
Informed decisions on investment choices based on priorities and
value for money
MRRS provides more structured and substantive information to better manage programs and enhance reporting on results
Structured inventory of the organization’s programs
Link programs to resources and results
Common foundation to report in Estimates and Public Accounts
Gradually being used as a basis to develop planning framework & PMA
MRRS provides a strategic framework to help understand the context of an organization’s work and help answer strategic questions such as:
Is this organization delivering outcomes for Canadians with their resources?
Can we deliver more/better outcomes for Canadians?
Is value-for-money being achieved?
Enables the government to tell a more comprehensive story
More in-depth and systematic information on how tax dollars are being spent
Contribute to greater transparency and accountability around management of public funds
MRRS
Policy Objective:
Development of a common, government-wide approach to the collection, management, and reporting of financial and non-financial performance information - to provide an integrated and modern expenditures management framework 16

17. Evaluation information is important but there are challenges to getting it …
Quality, timeliness and strategic focus issues hinder systematic use of evaluation to support decision-making:
often small programs - not strategic
about 10% of spending each year - too low
take too long and difficult to understand
can be self serving when funded by program managers
Capacity issues have made it difficult to deliver
Need more trained evaluators
Need consistent competencies for managers and staff
Definition of the evaluation “product” same as 20 years ago - may need a new sort of product 17

18. Rebuilding evaluation requires focused attention …
Strategic reviews require credible information on the relevance and performance of government programs … and evaluation is a key source
Objectives of evaluation policy renewal:
Improve the information base for strategic reviews - increased focus on value for money (relevance and program performance)
Comprehensive coverage of programs through a regular and systematic cycle
Improved credibility through agreed upon standards, flexible tools for evaluation and neutrality of the evaluation function
Improved quality by having the right capacities, people and systems
Continuous learning and improvement - stronger Treasury Board capacity to lead the function, monitor capacity and use evaluation information
New Evaluation Policy will require comprehensive evaluation coverage (100% of large departments) of all direct program spending over a 5 year cycle
Federal Accountability Act requires 100% coverage of all Grant and Contributions
A mature performance measurement and reporting infrastructure is already in place
All major departments and agencies
Have internal audit and evaluation units
Produce for Parliament their reports on plans and priorities and departmental performance reports
Are developing outcome frameworks for all their programs
Have started cyclical expenditure reviews
Treasury Board Secretariat
Has a strong policy centre for results-based management
Assesses management performance across government
Produces an annual report called Canada’s Performance
Advises Cabinet and the Department of Finance on potential reallocations based on expenditure reviews
Office of the Auditor General
Produces performance audits of departments and agencies 18

19. Strategic Reviews

20. Strategic reviews are program-based and results-informed
All direct program spending reviewed - 25% each year
Treasury Board and its Secretariat set terms of reference:
Comprehensiveness – assessment of mandate, departmental objectives, program effectiveness, efficiency and alignment to government priorities
Reallocation proposals – options for program reductions or eliminations to reallocate to government priorities and support overall spending control
Reinvestment proposals – options to better support government priorities
Departments review the relevance and performance of their spending, identify lowest performing/priority 5% of programs, seek outside expert advice and report to the Treasury Board
Privy Council Office identifies review departments every year and assesses, with Treasury Board and the Department of Finance, the departmental proposals 20

21. Strategic Reviews – Scope and Key Elements
Departmental Strategic Reviews to answer specific questions in key areas:
Government Priority, Federal Role, Relevance (i.e. continued prog. need)
Performance (effectiveness, efficiency, value for money)
Management Performance
Departmental Strategic Reviews to be conducted using the following key elements
Analytical Framework: The department’s Program Activity Architecture
Information Sources: Evaluations, Audits, Management Accountability Framework assessments, Auditor General Reports, and other reports
Reporting Requirements: Outlined in the Terms of Reference
Steering Committee: A departmental steering committee to be established with ex officio membership from TBS
External Advice: Expert outside advice to be involved on each Review to ensure neutrality and credibility

22. Strategic Reviews –Conditions for Success
Sufficient time for deliberative process
Ministerial engagement throughout the Review process
Clear and strategic alignment of programs and results (value of a strong Program Activity Architecture)
Comprehensive assessment of all programs (100%)-not focussing only on 5%
Early involvement of senior management team – policy, communications, and corporate services
Multiple lines of evidence – evaluations, audits, benchmarking, international comparisons
Overview portion of the Strategic Review should tell a compelling departmental story
Arm’s length expert advice as effective challenge to proposals and alternatives
Our lessons learned post mortem tried to examine “conditions for success”.
Key lessons learned and CSF included:
Sufficient time is needed for a deliberative process
Serious ministerial engagement is key to ensure proposals put forth can be considered as part of Budget planning, and defended in the eye of the public. Ministers need to be engaged early ( demonstrate ownership, presentation matters)
A clear and strategic alignment of programs and results facilitates the Review process and makes the results more meaningful. A strong Program Activity Architecture was key.

23. The first reviews (2007) generated significant savings but also demonstrated a need to improve the quality of results information …
Seventeen organizations reviewed their programs in 2007
Ministers examined $13.6B, about 15 per cent of direct program spending
$386 million per year was identified as presenting opportunity to:
Increase efficiency and effectiveness: Change the way the Government delivers programs and services
Focus on core roles: Ensure that services are delivered by those best positioned to do so
Meet the priorities of Canadians: Align federal activities with the needs and priorities of Canadians and eliminate programs that are no longer necessary
Savings were redirected to fund new initiatives, both within departments and to broader spending priorities in Budget 2008 23

24. Public Reporting

25. Key Parliamentary Reports
Main Estimates
Part I: Government Expense Plan
Part II: Main Estimates (in support of the Appropriation Act)
Part IIIs
Reports on Plans and Priorities (RPPs), support committees in reviewing supply
Departmental Performance Reports (DPRs), actual achievements against the expected results in the RPP
Supplementary Estimates
Usually two per year 25

26. Parliamentary Reports cont.
RPP Overview for Parliamentarians
helps parliamentarians and their staff to navigate through the 91 RPPs ( )
provides a whole-of-government view of planned spending
Canada’s Performance
Provides an overview of and helps parliamentarians and their staff navigate through the 90 DPRs ( )
Public Accounts
In three volumes, covering financial performance for most recently completed fiscal year 26

27. Whole-of-Government Reporting

28. Whole of Government Framework28

29. RPP Overview for Parliamentarians
Searches may be customized by spending area and by organization 29

30. Slide on Layered approach
Layered Reporting allows a continuous “drill down” from the most aggregate to the most detailed …
Slide on Layered approach
Economic Affairs
Social Affairs
International Affairs
Government Affairs
Spending Areas (4)
Whole-of- Government – Layer
Aggregate information on Spending and on Plans and Performance in:
Whole-of-Government Overview for RPPs
Canada’s Performance
Healthy Canadians
Safe and Secure Communities
Diverse Society
Canadian Culture/Heritage
Government of Canada Outcome areas (13)
Citizenship and Immigration RPP
Maximum Contribution to the Economy…
Successful Integration of Newcomers…
Reflection of Canadian Values…
Departmental – Layer
High-level departmental information on:
Spending, Planning and Performance Indicators
in concise RPPs and DPRs (30 pages or less)
SOs
Integration Program
Citizenship Program
PAs
Comprehensive, Layered, Continuous:
User is able to continuously drill down from the Whole of Government level to detailed financial and non-financial information at the lowest level of the PAA
Electronic – Layer
Detailed information on specific programs and policies
Links to databases and useful policy documents SA
SSA
Expected and actual results
Expected and actual resources
Indicators and targets
Supplementary information (i.e. sustainable development strategies, audits and evaluations)

31. What lessons have we learned (#1)?
Need persistent effort to build capacity - will take time
Political leadership
Have a plan but experiment and adapt:
Central agency leadership
Know program base
Identify measures and collect the data
Evaluation capacity means investment
Use the information for decision-making in the department
Use the same information to improve reporting
Linking performance information to reporting was helpful – but linking it to decision-making in the budget process has been critical
Don’t wait for perfection
Cabinet Ministers, both at TB and at P&P, unanimously concluded that it is critically important that reviews be pursued on an ongoing basis.
They found that reviews provide better management and fiscal results relative to past exercises. – some Ministers were skeptical at the beginning
They also found that reviews provided a good opportunity for Ministers to gain a solid understanding of the business of their organizations.
Cabinet Ministers also found reviews to be effective in identifying duplication, inefficiencies and ineffectiveness, and helped to identify change strategies to address those issues. 31

32. What are the lessons learned (#2)?
This is cultural change: expect resistance - go for small wins - communicate - acknowledge risks - adapt - build trust
Rewards and sanctions are important - gaming
Put elected and non-elected officials on the same information base:
Make it relevant for decision-making
Better management and fiscal results
Sound understanding of the business
Ministerial engagement important
Have realistic expectations - under promise, over deliver 32

33. Annexes and Background Material

34. Annex A - Links to Further Information
TBS website:
Management Accountability Framework (MAF):
Tools and Resources for Parliamentarians:
Whole-of-Government Planning and Performance:
Management, Resources and Results Structure (MRRS) Policy:
Results-based Management:
Audit and Evaluation Database:
Canada’s Performance :
Guidelines for preparing RPPs and DPRs:
Performance Reporting: Good Practices Handbook: 34