Details of Transfer Payment Programs

Name of Transfer Payment Program: Canada Newfoundland Offshore Petroleum Board (Statutory)

Start Date: 1985-86

End Date: Perpetuity

Description: NRCan covers 50% of the operating costs of the Canada Newfoundland Offshore Petroleum Board. The Province pays the other 50%. This is done pursuant to provisions of the Canada-Newfoundland Atlantic Accord Implementation Act.

Strategic Outcome: Economic Competitiveness - Natural resource sectors are internationally competitive, economically productive, and contribute to the social well-being of Canadians.

Results Achieved: Provided financial support to the Offshore Board to cover its costs for the management of offshore resources on behalf of Canada and Newfoundland and Labrador.

Program Activity: Economic Opportunities for Natural Resources ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 4.9 6.3 6.8 3.4 3.4 3.4
Total Program Activity(ies) 4.9 6.3 6.8 3.4 3.4 3.4

Comment(s) on Variance(s): Planned spending for 2011-12 did not include the Board’s implementation strategy of the Offshore Safety Helicopter Inquiry’s recommendations.

Audit Completed or Planned: The Board is currently undergoing an OAG audit.

Evaluation Completed or Planned: N/A

Engagement of Applicants and Recipients:

Name of Transfer Payment Program: Clean Energy Fund (Voted)

Start Date: April 23, 2009

End Date: October 31, 2016

Description: Clean energy is energy that is produced, transmitted, distributed and used with low or zero greenhouse gas (GHG) and other air emissions. The Government of Canada has committed that Canada’s total GHG emissions be reduced by 17 percent from 2005 levels by 2020.

In support of these goals, the Clean Energy Fund provides $795 million over five years for the demonstration of promising technologies, including large-scale carbon capture and storage (CCS) projects, and renewable energy and clean energy systems demonstration and research and development (R&D) projects.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved:

Design work has commenced on two large-scale demonstration projects announced in 2009-10; the Shell Quest CCS project and Enhance Energy’s Albert Carbon Trunk Line project. Both projects made significant progress, advancing detailed engineering work and obtaining a number of key regulatory approvals, including completing environmental assessments, to move to the construction phase in 2012-13. These projects are expected to commence operations in 2014 (Enhance) and 2015 (Shell) and result in more than two megatonnes of CO2 emission reduction annually.

In addition, 19 small-scale renewable and clean energy projects are underway. An estimated 735 tonnes of CO2 was determined to have been avoided by the projects in this year. The Clean Energy Fund project located at the University of British Columbia was one of three finalists at 2012 GLOBE sustainable world business summit in the Technology and Innovation and Application category. During the past year, Hydro Québec estimated that its Clean Energy Fund project enabled the savings of 8,800 MWh of electricity and the electric cars in its project travelled 205,000 km saving 12,700 l of gasoline, providing the utility with valuable information on EV recharging technology.

The Clean Energy Fund also supported a range of projects from basic research to pre-demonstration pilot projects that federal departments and agencies carried out in collaboration with provincial; research organizations, universities and the private sector in 2011-12. 56 research projects related to i) Smart Grid, Renewable and Clean Energy, ii) Environmental Challenges Facing Oil Sands Production and the Conversion of Bitumen, iii) Hydrogen and Fuel Cells and iv) CO2 Capture and Storage were conducted.

Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 30 104.3 141.6 146.3 90.6 51
Total Program Activity(ies) 30 104.3 141.6 146.3 90.6 51

Comment(s) on Variance(s): Due to factors that are external to NRCan (e.g. introduction of new federal GHG regulations for coal fired electricity, postponement in securing provincial partner funding and CCS technological uncertainties), there was a delay in finalizing contribution agreements for 3 clean energy demonstration projects. In an effort to remedy the situation, NRCan adjusted reference levels in the ARLU to move $177M from 2011/12 and 2012/13 to 21013/14 and 2014/15. This was done to help mitigate risks and ensure that the contribution agreements can be successfully finalized and projects can be implemented.

Audit Completed or Planned: Fiscal year 2010-11

- Audit of the Clean Energy Fund

Evaluation Completed or Planned: The NRCan 2011-12 to 2015-16 Strategic Evaluation Plan has determined that the evaluation for the Clean Energy Fund will be conducted in fiscal year 2013-14.

Engagement of Applicants and Recipients: The Clean Energy Fund engaged potential applicants to incorporate their input during the design phase of the program in 2009. We do not expect that there will be any further calls for proposals at this time. The Clean Energy Fund continues to engage with recipients via regular, ongoing monitoring of all funded projects.

Name of Transfer Payment Program: Departmental Class Grants and Contributions (Voted)

Start Date: January 31, 2008

End Date: March 31, 2017

Description: Class Grants and Contributions support organizations associated with the research, development and promotion of activities that contribute to departmental objectives.

Strategic Outcome: Economic competitiveness, Environmental Responsibilities, Safety, Security, and Stewardship.

Results Achieved:

GeoMapping for Energy and Minerals (GEM) Program being delivered under the Departmental Class Grants and Contributions Program (DCGCP): Without the public availability of reliable geological information, industry risks either investing in development in areas with low potential for energy and mineral resources or using inappropriate strategies to develop these resources. These risks can affect Canada's ability to attract investment; therefore, in order to attract investment, accessible and reliable geological information is required. The Geo-mapping for Energy and Minerals (GEM) activities provide industry with modern geological information, facilitating industry’s ability to identify areas with potential sources of energy and mineral resources. The activities are focused on updating the geological framework, which identifies the potential areas where certain mineral and energy types could be located, and disseminating this knowledge to all involved stakeholders. This fills the critical information gap in the knowledge base needed to increase exploration investment and facilitate land-use decisions in the territories. GEM outputs, including maps, reports and presentations have resulted in increased private sector exploration effectiveness and success rates in northern Canada leading to the discovery of new significant mineral and energy plays, including the Melville and Cumberland Peninsulas.

Other agreements delivered under the DCGCP: Below are a number of examples of activities that were funded under the DCGCP

– Grants to International Energy Agency (IEA) Operating Agents

NRCan participates in the IEA greenhouse gas (GHG) R&D Programme and the IEA Clean Coal Centre through Grants to those organizations. The outputs of these organizations have strong linkages to NRCan's R&D programs aimed at clean coal and carbon capture and storage, namely: Program on Energy Research and Development (PERD) Portfolio 524, ecoEII Track A and ecoEII Track B. The IEA GHG R&D Programme and the IEA Clean Coal Centre are instrumental in identifying technology gaps, working with collaborators in developing work plans, and participating in an advisory capacity in the subsequent activities. The related knowledge is gained through technology analyses, gap analyses, literature searches, and the like. The information is disseminated to international collaborators through papers, publications, presentations and development and maintenance of databases.

– Contribution towards Hydro Turbines R&D

The main objective of the project was to improve the comprehension and simulation of the flow in low head axial hydraulic turbines by measuring the flow in a model propeller turbine and numerically analyze it for all operating ranges of the turbine. The project involved Université Laval, who has developed a unique laboratory, called Hydraulic Machines Laboratory (LAMH) for studying various hydro and turbine technologies and systems.

– Marine Energy Standards via Canadian standards Association

The purpose of the project was to develop standardized technical specifications for marine energy terminology which would cover wave, tidal and other water current converters. Given the relative new area of marine energy, standardization of terminology has been an important need for industry.

– Innovative Daylighting System via SunCentral Inc

The purpose was to enhance the current design of the Solar Canopy Illumination System (SCIS), install it in 6 locations and monitor the performance to ascertain energy savings and equivalent reduction in greenhouse gas (GHG) emissions. The project involved the development of market strategies to disseminate SCIS data to stakeholders.

The SCIS is an innovative daylighting system applicable to commercial and institutional buildings – in an earlier project, the proof-of-concept stage was successfully completed. This project dealt with field experience and monitoring.

Program Activity: Economic Opportunity for Natural Resources, Natural Resource-based Communities, Clean Energy, Ecosystem Risk Management, Adaptation to Changing Climate and Hazard Risk Management, Natural Resources and Landmass Knowledge. ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Grants 1.9 1.9 2.7 2.5 2.1 0.6
Total Contributions 10 11.8 2.3 9 8.1 (5.8)
Total Program Activity(ies) 11.9 13.7 5 11.5 10.2 (5.2)

Comment(s) on Variance(s): As a mechanism which enables NRCan managers to take advantage of opportunities to provide financial support to projects falling under the departmental mandate but not covered under other transfer payment programs, Class Grant and Contribution actual spending exceeds the planned spending, primarily due to ad hoc opportunities identified as the fiscal year progresses, which are typically funded via cash management.

Audit Completed or Planned: Audit of the GEM program was completed and approved by the Departmental Audit Committee in FY 2012-13.

Evaluation Completed or Planned: Evaluation of entire program is scheduled to be completed during fiscal year 2012-13. Evaluation of the GEM program is currently underway. It will be tabled at the fall 2012 meeting of the Departmental Evaluation Committee.

Engagement of Applicants and Recipients: NRCan engages recipients via, for example regular ongoing monitoring of funded projects.

Name of Transfer Payment Program: ecoENERGY for Biofuels (Voted)

Start Date: April 1, 2008

End Date: March 31, 2017

Description: ecoENERGY for Biofuels supports the production of renewable alternatives to gasoline and diesel and encourages the development of a competitive domestic renewable fuels industry. The program provides an operating incentive to facilities that produce renewable alternatives to gasoline and diesel in Canada, based on production and sales volumes. ecoENERGY for Biofuels will invest up to $1.48 billion over 9 years, starting April 1, 2008, in support of biofuels production in Canada.

The program volume target is 2.5 billion litres of domestic production capacity by December 2012, with a target of 2 billion litres of renewable alternatives to gasoline and 500 million litres of renewable alternatives to diesel. Key changes to the program were approved in 2009 and implemented in 2010. This involved a realignment of the nine-year funding allocation, a new payment regime and a new decision-making methodology.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved: As of March 31, 2012, 30 contribution agreements had been signed. The signed agreements provide sufficient production capacity to allow the program to almost meet the biodiesel (renewable alternatives to diesel) target (494 million litres) by December 2012 but fall short on the ethanol (renewable alternatives to gasoline) target (1807 million litres); however, progress towards these targets, specifically the biodiesel target, is less robust than numbers suggest (as outlined below in explanation of variances).

Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 177.7 147.1 258.2 258.3 156.8 101.4
Total Program Activity(ies) 177.7 147.1 258.2 258.3 156.8 101.4

Comment(s) on Variance(s): While ethanol production is close to its target of two billion litres per year, biodiesel producers are challenged by new market conditions, specifically the lack of domestic demand. Therefore, incentives paid for biodiesel were significantly lower than the annual budget.

Audit Completed or Planned: An Internal Audit of ecoENERGY for Biofuels was completed in 2010-11.

Evaluation Completed or Planned: ecoENERGY for Biofuels was one of several programs and activities that was evaluated in 2011-12 as part of the Alternative Transportation Fuels sub-sub activity within the Energy Efficiency and Alternative Transportation Fuels sub-activity of the Department’s Program Activity Architecture (PAA). The next evaluation is planned for 2016-17.

Engagement of Applicants and Recipients: The deadline for submitting an application to the program was March 31, 2010. The program is no longer accepting applications. The program engages recipients through monthly, semi-annual and annual financial and environmental reporting, progress of construction and commissioning reports, technical and environmental site visits, and recipient audits.

Name of Transfer Payment Program: ecoENERGY for Renewable Power (Voted)

Start Date: April 1, 2007

End Date: March 31, 2011

The program stopped accepting applications in 2011. However, allocated funding will be issued to program participants until 2020-21

Description: The ecoENERGY for Renewable Power program is investing $1.43 billion in transfer payments over 14 years to increase Canada's supply of clean electricity from renewable sources such as wind, biomass, low-impact hydro, and solar photovoltaic. It is intended to help position low-impact renewable energy technologies to make an increased contribution to Canada’s energy supply and thereby contribute to a more sustainable and diversified energy mix. The program offers a production incentive of 1 cent per kilowatt hour for ten years to eligible projects using low impact renewable power projects.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved: 104 contribution agreements were signed by end of fiscal year 2010-11, representing 4458 megawatts (MW) of renewable power capacity and commitments of $1.39 billion over 14 years.

Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 56.7 88.5 143.1 137.8 125.7 17.4
Total Program Activity(ies) 56.7 88.5 143.1 137.8 125.7 17.4

Comment(s) on Variance(s): Given some projects were not able to meet the program deadline of March 31,2011, there was a portion of funds that were unallocated by the program. In addition, some projects produced less renewable energy than expected, which also resulted in lower spending than anticipated.

Audit Completed or Planned: Five recipients were audited for compliance during fiscal year 2011-12. An audit of the Program is underway.

Evaluation Completed or Planned: An evaluation of Renewable Energy initiatives including this program was completed in fiscal year 2010-11.

Engagement of Applicants and Recipients: The program is no longer accepting application. The recipients are required to submit invoices on a quarterly basis and submit annual project reports.

Name of Transfer Payment Program: ecoENERGY Retrofit – Homes (Voted)

Start Date: April 1, 2007

End Date: September 30, 2012

Description: Initiated on April 1, 2007, the four-year, $745-million ecoENERGY Retrofit – Homes program provided federal grants to property owners for improving the energy efficiency of their homes and reducing their home’s impact on the environment. Budget 2011 allocated an additional one-year investment of $400 million to the program.

ecoENERGY Retrofit – Homes used the EnerGuide Rating System to help homeowners make smart energy retrofit decisions for their home. With this system, a certified energy advisor performs a professional evaluation of the energy efficiency characteristics of the house, including a diagnostic test to determine air leakage. The energy advisor prepares a detailed personalized checklist of recommended upgrades for the property owner, including the EnerGuide pre-retrofit energy rating of the house. The checklist shows the recommended, most effective upgrades. The property owner then chooses which upgrades to have done.

Under ecoENERGY Retrofit – Homes, after the retrofit work was completed, the advisor performed a post-retrofit energy evaluation and assigned a new energy-rating label, and the property owner was then entitled to a grant.

Along with ecoENERGY Retrofit – Homes, 12 of 13 provinces and territories offered complementary incentive programs. Five of these continue to offer incentive programs, making ongoing use of NRCan’s EnerGuide Rating System and its national infrastructure (file processing, quality assurance, technical support, software, etc.), as do emerging programs from utilities and municipalities.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved: The 2011/12 renewal of the ecoENERGY Retrofit – Homes program reached its target of 250,000 registrants, and provided incentives to eligible homeowners to make their homes more energy efficient and reduce their energy related expenses. The renewed program will achieve energy savings of approximately over 4 PJ per year.

Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Grants 267.9 355.1 N/A 386.6 198 N/A
Total Contributions - - - - - -
Total Program Activity(ies) 267.9 355.1 N/A 386.6 198 N/A

Comment(s) on Variance(s): N/A

Audit Completed or Planned: Audit of Specific Controls Pertaining to the ecoENERGY Retrofit Homes Program

Audit of ecoENERGY Retrofit – Homes Program (2010)

Evaluation Completed or Planned: Evaluation of Energy Efficiency for Industry, Housing and Buildings (2010)

Engagement of Applicants and Recipients: The deadline for homeowners to complete eligible retrofits was March 31, 2012.

Participating homeowners were engaged through NRCan certified energy advisors. Energy advisors created a customized upgrade recommendation report as part of a pre-retrofit evaluation using an NRCan software application, and submitted the grant application to NRCan on behalf of the homeowner.

Homeowners could access general program information from the web and could communicate directly with program staff to help resolve payment issues.

Name of Transfer Payment Program: ecoENERGY Technology Initiative (Voted)

Start Date: April 1, 2007

End Date: March 31, 2013

Description: The ecoENERGY Technology Initiative is a $230 million investment in science and technology by the Government of Canada to accelerate the development and market readiness of technology solutions in clean energy. This initiative is directed towards increasing clean energy supplies, reducing energy waste, and reducing pollution from conventional energy.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved: The ecoENERGY Technology Initiative has a demonstration and an R&D component. To date, the program funded 3 separate demonstration components: (1) Carbon Capture & Storage (CCS) (10 projects); (2) Transportation (9 projects); and (3) Equilibrium buildings jointly funded with Canada Mortgage and Housing Corporation (6 projects). Highlights for the CCS demonstration component are as follows:

  • Husky Oil Operations Ltd has started operation at their Lloydminster, Saskatchewan upgrading facility and has started capturing CO2 at the rate of 100,000 tonnes of CO2 /yr. The CO2 will be sequestered in depleted oil wells located in Lashburn and Tangleflags, SK.
  • Enhance Energy Inc. has completed Front End Engineering and Design (FEED) studies and is moving ahead to implement the $1.2B Alberta Carbon Trunk Line (ACTL) project to enable the transportation of CO2 gathered in the Alberta Industrial Heartland to oil reservoirs in central Alberta.
  • As part of the contribution agreement with Transalta Corporation, FEED studies were completed for project Pioneer, a proposed integrated CCS project in the area of coal fired electricity. The results of the FEED studies add to the knowledge base for regulatory development and technology application as pertains to CCS in the coal fired electricity sector.
  • The SaskPower Carbon Capture Test Facility commenced detailed engineering and concluded a $60M partnership agreement with Hitachi, the first of three expected strategic partners.
  • The $41M IEAGHG Weyburn-Midale CO2 Monitoring and Storage Project, funded by the program, will be completed by December 2012. The key deliverable will be a Best Practices Manual, scheduled for publication in September 2012. More results will be disseminated through various publications and conference presentations.
In addition to the above, significant progress has been made in advancing demonstration projects in the other 2 components of the program and in supporting R&D projects in 8 key technology areas.
Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 28.5 48.6 48.1 50.2 41.5 6.6
Total Program Activity(ies) 28.5 48.6 48.1 50.2 41.5 6.6

Comment(s) on Variance(s): Two projects with key stakeholders (industrial and provincial) proceeded with a reduced scope due to unforeseen factors resulting in a surplus.

Audit Completed or Planned: Fiscal year 2011-12 Audit of the ecoENERGY Technology Initiative

Evaluation Completed or Planned: Recently completed as part of the following portfolio evaluations:

The NRCan 2011-12 to 2015-16 Strategic Evaluation Plan has determined that the evaluation for the remaining portfolio evaluations will be conducted as follows:

Fiscal year 2011-12: - Energy S&T: Clean Energy Systems for Industry will be published in 2012-13 - Energy S&T: Sustainable Bioenergy will be published in 2012-13

Fiscal Year 2012-13 - Energy S&T: Clean Energy Systems for Buildings and Communities - Energy S&T: Clean Transportation Energy

Engagement of Applicants and Recipients: Natural Resources Canada solicited project proposals through announcements on its web site. We do not expect that there will be any further calls.

The ecoENERGY Technology Initiative engages with recipients, on a regular and ongoing basis, through technical and financial reporting, including recipient audits. Our interaction with recipients is also an opportunity to identify ways of improving the design and delivery of future clean energy technology development programs.

Name of Transfer Payment Program: Implementation of the Adaptation Theme in Support of Canada’s Clean Air Agenda (Voted)

Start Date: April 1, 2008

End Date: March 31, 2013

Description: The objectives of the program are to generate and effectively deliver knowledge and information needed to understand the range of risks and opportunities from a changing climate; and effectively inform and engage decision-makers across a range of social and economic sectors that have responsibilities to adapt.

Strategic Outcome: Safety, Security and Stewardship - Natural resource knowledge, landmass knowledge and management systems strengthen the safety and security of Canadians and the stewardship of Canada’s natural resources and lands

Results Achieved:

In Fiscal Year 2011-12, the program delivered new case studies, tools and reports, increasing the availability of resources for decision-making. Work also started on products that will provide “one-stop” access to information. For instance, the new on-line compendium of water and adaptation information will help decision-makers access the latest information on all aspects of water resources management in a changing climate.

The Regional Adaptation Collaboratives (RACs) delivered 27 workshops and conference sessions that brought together decision makers from all levels of government and the private sector to share knowledge and expertise to advance adaptation decision-making in 15 issues including water management, community planning, infrastructure, forest management, and mining. In addition, work continued on a wide range of products that will be delivered in FY 2012-13.

The collaboration, information and recommendations from the RAC projects continued to contribute to the development of policies including: - provincial requirements for adaptation in Municipal Climate Change Plans in Nova Scotia - adaptation plans to address floods and droughts in Saskatchewan and other provinces - British Columbia’s sea dike guidelines

The bulk of the results from the RAC projects will be delivered in FY 2012-13.

Program Activity: Adapting to a changing climate and hazard risk management ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 4.2 8.5 11.0 11.0 10.8 0.2
Total Program Activity(ies) 4.2 8.5 11.0 11.0 10.8 0.2

Comment(s) on Variance(s): The variance was due to slower than planned spending in several large, multi-partner projects.

Audit Completed or Planned: None

Evaluation Completed or Planned: The Program was evaluated in FY 2010-11. The next evaluation is scheduled for FY 2015-16.

Engagement of Applicants and Recipients: Engagement expanded from a focus on provincial governments, communities, and professional associations to include stronger participation from the private sector, particularly in the natural resource sectors.

Name of Transfer Payment Program: Investments in Forest Industry Transformation (IFIT) (Voted)

Start Date: June 17, 2010

End Date: March 31, 2014

Description: The objective of Investments in Forest Industry Transformation is to support forest industry transformation that will make the forest industry more economically viable and environmentally sustainable by investing in innovative technologies. These investments will lead to a more diverse, higher-value product mix including bioenergy and renewable power, as well as biomaterials, biochemicals, and next generation building products.

The Program will fund innovative projects implementing transformative technologies at the pilot or first commercial scale that direct wood fibre, and by-products from wood processing, into higher-value uses. Such projects will increase the total value generated from wood fibre, diversify product lines for the forest industry, and produce new bio-products or renewable energies. By providing funding to Canadian forest firms for capital investments to advance new technologies towards full, commercial-scale implementation, this Program will broaden and build upon previous departmental investments in forest sector transformation.

Strategic Outcome: Economic Competitiveness – Natural resource sectors are internationally competitive, economically productive, and contribute to the social well-being of Canadians.

Results Achieved: IFIT’s second Call for Proposals was held in Summer/Fall 2011, attracting almost 60 applications from companies across Canada. Four contribution agreements were signed this fiscal year, resulting in more than $17M in federal investments in innovative technologies at one new, and three modified, forest product facilities. These projects will produce new bioproducts, including advanced biocomposites and bioenergy, while maximizing the value obtained from each unit of wood fibre harvested. Additional projects will be assessed and funded in the coming fiscal years to disburse remaining program funds.

Program Activity: Economic Opportunities for Natural Resources ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions - 6.6 23.4 40.2 17.7 5.7
Total Program Activity(ies) - 6.6 23.4 40.2 17.7 5.7

Comment(s) on Variance(s): As a result of departmental cash management within this vote in 2010-11, the total authority for the program in the 2011-12 fiscal year was $40.2M in contributions. Of this, $20M was re-profiled to the remaining two years of the program through the Annual Reference Level Update (ARLU) process, and $17.7M was invested in 4 highly innovative projects at Canadian forest products facilities.

Audit Completed or Planned: A program audit is currently underway and scheduled for completion in 2012-13.

Evaluation Completed or Planned: A program evaluation is planned for completion during the 2013-14 fiscal year.

Engagement of Applicants and Recipients: Examples of applicant and recipient engagement include: public webinars held during both Calls for Proposals to discuss application requirements and evaluation criteria (nine webinars in ENG/FR with over 300 participants); publicly available communications materials and press releases to inform stakeholders of Calls for Proposals and project announcements; and, ongoing interaction with recipients over the life of their projects.

Name of Transfer Payment Program: Non-reactor-based Isotope Supply Contribution Program (NISP) (Voted)

Start Date: May 13, 2010

End Date: March 31, 2013

Description: The NISP is a $35-million program for research, development and demonstration (RD&D) to establish the feasibility of cyclotron and linear accelerator-based production of the key medical isotope technetium-99m.

It was designed to help diversify sources and improve security of supply, eliminate reliance on highly enriched uranium – a weapons grade material – substantially reduce the amount of generated radioactive waste, and move towards a sustainable market-based supply chain for technetium-99m.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved:

All NISP-funded projects have achieved satisfactory research and infrastructure milestones. They have also successfully demonstrated small-scale production of technetium-99m, and have initiated discussions with Health Canada on product purity and regulatory requirements. Because of the NISP projects, the technical viability of cyclotron and linear accelerator technologies is more certain.

Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions - 10.2 17.4 20.1 20.1 (2.7)
Total Program Activity(ies) - 10.2 17.4 20.1 20.1 (2.7)

Comment(s) on Variance(s):

The Treasury Board Submission provided $17,400,000 in Vote 10 (Grants and Contributions) for contribution payments and $4,068,000 in Vote 1 (Operating and Maintenance) to support work from federal laboratories in proponent-led projects in the 2011-12 fiscal year.

A competitive Request for Project Proposals process was used to award funding, and it was determined that the actual amount of funding to federal laboratories needed for 2011-12 was $300,000. The remaining Vote 1 funds were transferred to Vote 10 for use in funding work by non-federal proponents.

Audit Completed or Planned:

NRCan applies a risk-based approach in the management of the Program.

Within NRCan, the Departmental Audit Committee considered the NISP to be a low audit priority. The NISP was not selected to be included in the Risk-Based Audit Plans due to the timeframe of the program and funding levels.

A recipient audit was identified and completed during the fiscal year

Evaluation Completed or Planned: No evaluations were planned given the two-year sunsetting nature of the NISP; the long-term nature of research; and limited evaluation resources. It was neither practical nor cost-efficient to undertake an evaluation.

Engagement of Applicants and Recipients:

A total of nine project proposals were received and four projects were selected for funding.

More than 30 partnerships and collaborations were formed as a result of the program. 33 technical publications were generated and more than 54 presentations were developed and given at workshops and conferences.

A two-day NISP workshop was held in Fall 2011 that attracted over 50 participants including project researchers and participants from industry.

Name of Transfer Payment Program: Payments to the Newfoundland Offshore Petroleum Resource Revenue Fund (Statutory)

Start Date: 1987

End Date: Perpetuity

Description: To make payments to the province of NL equivalent to the revenue amounts received by Canada in relation to Newfoundland offshore oil and gas activities.

Strategic Outcome: Economic Competitiveness - Natural resource sectors are internationally competitive, economically productive, and contribute to the social well-being of Canadians.

Results Achieved: The transfer to the Province of an amount equivalent to the amounts received by Canada in relation to oil and gas activity in the Canada-Newfoundland and Labrador offshore area was completed in a timely manner, as set out in Sections 97, 214 and 217 of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act.

Program Activity: Economic Opportunities for Natural Resources ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 1180.9 1227.8 1424.0 1059.8 1059.8 364.2
Total Program Activity(ies) 1180.9 1227.8 1424.0 1059.8 1059.8 364.2

Comment(s) on Variance(s): The forecast for planned spending 2011-12 predicted higher oil prices and production.

Audit Completed or Planned: An audit of Nova Scotia and Newfoundland Statutory Transfers was completed for fiscal year 2008-09. Additionally, Office of the Auditor General (OAG) conducts annual audits of these statutory transfers.

Evaluation Completed or Planned: N/A

Engagement of Applicants and Recipients: N/A

Name of Transfer Payment Program: Payments to the Nova Scotia Offshore Revenue Account (Statutory)

Start Date: 1988

End Date: Perpetuity

Description: To make payments to the province equivalent to amounts received by Canada in relation to offshore activities in accordance with provisions of the Canada Nova Scotia Offshore Petroleum Resource Accord Implementation Act.

Strategic Outcome: Economic Competitiveness -Natural resource sectors are internationally competitive, economically productive, and contribute to the social well-being of Canadians.

Results Achieved: The transfer to the Province of an amount equivalent to the amounts received by Canada in relation to oil and gas activity in the Canada-Nova Scotia offshore area was completed in a timely manner, as set out in Sections 99, 219 and 222 of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act.

Program Activity: Economic Opportunities for Natural Resources ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 109.4 225.2 179.7 157.3 157.3 22.4
Total Program Activity(ies) 109.4 225.2 179.7 157.3 157.3 22.4

Comment(s) on Variance(s): The forecast for planned spending 2011-12 was completed prior to the decline of natural gas prices. Also, production of the Deep Panuke Offshore Gas Development Project was anticipated to start earlier.

Audit Completed or Planned: An audit of Nova Scotia and Newfoundland Statutory Transfers was completed for fiscal year 2008-09. Additionally, Office of the Auditor General (OAG) conducts annual audits of these statutory transfers.

Evaluation Completed or Planned: N/A

Engagement of Applicants and Recipients:

Name of Transfer Payment Program: The Investing in Canada’s Forest Sector Initiative (Voted)

Start Date: March 12, 2009

End Date: March 31, 2017

Description: The Investing in Canada’s Forest Sector initiative consists of two main objectives: 1. Promoting Forest Innovation and Investment - support the goal of sustainable natural resources development by enhancing the long-term economic opportunities for Canada's forest sector as a product of increased investment in forest innovation.

2. Expanding Market Opportunities - maintain and grow international wood product markets; expand wood use in the North American non-residential construction market; and improve product opportunities for value added wood manufacturers.

Strategic Outcome: Economic Competitiveness - Natural resource sectors are internationally competitive, economically productive, and contribute to the social well-being of Canadians.

Results Achieved:Promoting Forest Innovation and Investment:

To help develop and commercialize new technologies for Canada’s forest sector and assist in its on-going transformation, research under the Transformative Technologies Program (TTP) continues to develop new products and technologies and to supporting the forest industry’s adaptation, and deployment of these emerging technologies and processes. Examples include:

    • FPInnovations developed and identified potential consumer product applications of a new primary forest product, nanocrystalline cellulose (NCC). CelluForce was created as a joint venture between FPInnovations and Domtar Inc. to commercially produce NCC at a demonstration scale leading to industry adoptions expected to generate new revenue streams for the Canadian Forest Industry beyond its traditional customer base.
    • An FPInnovations technology: FPInterface-BiOS, was used in numerous biomass assessments and bio-pathways studies across Canada (Alberta, Saskatchewan, Ontario, and Quebec), giving the Canadian Forest Industry a new comprehensive tool for biomass use operational planning, budgeting and net value analysis.
    • FPInnovations adapted European Cross Laminated Timber (CLT) for Canadian species and wrote and published the CLT Handbook, which provides architects and engineers with detailed technical information for both installation and use. CLT provides an important opportunity for large volumes of wood to be used in mid-rise residential and commercial buildings.
    • Research results enabled British Columbia to be the first province in Canada to include 6-storey platform-frame wood construction in their laws and regulations (2010-11). In 2011-12 Canada and the Provinces of Ontario and Quebec started the process of implementing 6-storey wood construction into their building laws and regulations.
    • In Ontario, enhanced inventory on Tembec Inc.’s Romeo Malette Forest is allowing the construction of more efficient and environmentally sound forest road systems, generating an estimated savings of $400K annually. Accurate information on tree size and product potential is allowing the company to move the right-sized wood to the right mill, saving more than $2M / year.
    • In British Columbia and Alberta, West Fraser Timber Co. Ltd. is using enhanced inventory for the 989,000‐ha Hinton Forest Management Area. The company has succeeded in effectively and inexpensively processing the enhanced information derived from remote sensing and localizing the information with greater precision than traditional inventory. The enhanced inventory system provides more accurate information on tree height and volume and new variables that measure wood properties.

Expanding Market Opportunities: In 2011-12, the Canada Wood Export Program (CWEP) continued to successfully expand demand for Canadian wood products in emerging offshore markets. For example, between 2010 and 2011, Canadian wood exports to China rose by 74% to $1.45 billion, while exports to South Korea increased by 40% to $202 million.

Natural Resources Canada also entered into a Memorandum of Understanding (MOU) on Eco-Cities with China's Ministry of Housing and Urban-Rural Development (MOHURD). The MOU, signed in March 2012, stresses further cooperation with Canada on developing eco-cities technology, with a focus on areas such as the use of wood in multi-storey buildings, green building evaluation systems, renewable and alternative energy, energy-efficient building systems, lifecycle assessment

The North American Wood First Initiative influenced the use of wood in 352 non-residential construction projects in Canada and the United States. These projects had an estimated wood sales value of $256 million. In addition, the initiative provided training to nearly 21,000 architects, engineers and builders to educate them on the opportunities and benefits of using wood in non-residential applications.

Program Activity: Economic Opportunities for Natural Resources ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 54.7 95.4 N/A 51.6 51.5 N/A
Total Program Activity(ies) 54.7 95.4 N/A 51.6 51.5 N/A

Comment(s) on Variance(s): N/A

Audit Completed or Planned: An audit of eight of the fifteen projects under the Pilot Scale Demonstration Program was completed. The audit concluded that the projects were all compliant with the terms of the Contribution Agreements. Seven audits of proponents commissioned by NRCan were completed under the Expanding Market Opportunities Program. The recommended actions were of a minor nature and appropriate corrective measures were put in place. The audits examined the fiscal year 2010-11.

Evaluation Completed or Planned: An evaluation of the Transformative Technologies and Pilot Scale Demonstration programs is projected for 2013-14.

The evaluation of the Wood Demonstrations Initiative was completed in February 2012.

Engagement of Applicants and Recipients: N/A

Name of Transfer Payment Program: The Pulp and Paper Green Transformation Program (Voted)

Start Date: July 30, 2009

End Date: March 31, 2012

Description: The objective of the “Pulp and Paper Green Transformation Program” is to improve the environmental performance of Canada’s pulp and paper industry, which in turn will contribute to the environmental, and hence commercial, sustainability of the pulp and paper industry.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved: In the final year of the PPGTP, contribution agreements were signed with 15 pulp and paper companies across Canada to fund 21 projects. Over the duration of the program, contribution agreements were signed, with 26 pulp and paper companies, worth over $950 million. Through these agreements, the program provided funding for 98 projects that are having direct positive environmental, economic and social benefits on recipient mills and the 38 communities across Canada that they sustain. These include support for 14,000 jobs, improved air quality, and lower fossil fuel consumption and greenhouse gas emissions.

PPGTP projects are expected to generate 2.7 million megawatt hours (MWh) of renewable energy (electricity and steam) per year. Improvements to the energy efficiency of mills are together expected to save 8.4 million GJ of energy per year.

The program’s environmental achievements have significantly exceeded initial expectations and have had a profound positive impact on the sustainability of the Canadian forest sector. The improvements in energy efficiency and substituting other fuels for fossil fuels in mill processes are expected to directly reduce greenhouse gas (GHG) emissions by Canadian mills by 543 000 tonnes per year (t/yr). Other benefits of these projects include reduced mill emissions of sulphur dioxide (SO2), total reduced sulphur (TRS) and total particulate matter.

Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 48.7 388.5 538.6 519.6 513.9 24.7
Total Program Activity(ies) 48.7 388.5 538.6 519.6 513.9 24.7

Comment(s) on Variance(s): Of the $1-billion in total program funding, the PPGTP allocated just over $950 million in credits to pulp and paper companies, the remainder being program operating costs and reserves for year-to-year cash management. Departmental cash management within this vote resulted in a net authority of $519.6M for this fiscal year, of which $513.9M was disbursed through project contributions. $5.7 million was lapsed, which was within the boundaries of the program’s cash management reserves

Audit Completed or Planned: NRCan’s Risk-based Audit Plan for 2010-11 included an audit of the PPGTP which concluded that the Program’s management control framework is “operating well”.

Evaluation Completed or Planned: An evaluation was planned during 2012-13 as a part of the Department’s Risk Based Evaluation Plan and is currently underway.

Engagement of Applicants and Recipients: Working together with recipients, NRCan has publicly announced the project details and environmental benefits of 80 PPGTP projects representing $840M, at mills and/or other forestry events across Canada. Twenty-two of these projects, totalling $76M were announced in 2011-12

The Pulp and Paper Green Transformation Program’s Report On Results, developed with input from recipients, will be publicly launched in Fall 2012.

Name of Transfer Payment Program: Wind Power Production Incentive Program (Voted)

Start Date: April 1, 2002

End Date: March 31, 2007

Note: The program stopped accepting applications in 2007. However, allocated funding will be issued to program participants until 2016-17.

Description: The WPPI Program was set up to establish wind energy as a full-fledged competitor in the electricity market by providing a financial incentive of about 1 cent per each kilowatt-hour produced from the installation of 1,000 MW of new wind power capacity in Canada by 2007. Eligible recipients claim payment of the incentive over a 10-year period. The initial WPPI G&C budget was $255 million and an additional $69.9 million was allocated in 2005-06 to allow the program to continue to support the development of new wind farms.

Strategic Outcome: Environmental Responsibility - Canada is a world leader on environmental responsibility in the development and use of natural resources.

Results Achieved: 22 wind farms were commissioned under the program, representing 924 megawatts of wind energy capacity in Canada and about $315 million in contribution funding over 15 years.

Program Activity: Clean Energy ($ millions)
  2009-10 Actual Spending 2010-11 Actual Spending 2011-12 Planned Spending 2011-12 Total Authorities 2011-12 Actual Spending Variances
Total Contributions 28 26.4 32.7 28.7 28.4 4.3
Total Program Activity(ies) 28 26.4 32.7 28.7 28.4 4.3

Comment(s) on Variance(s): Wind farms supported under the program produced less energy than expected. This resulted in reduced lower payments to producers under the provisions of contribution agreements.

Audit Completed or Planned: No audits of project were undertaken during fiscal year 2011-12.

Evaluation Completed or Planned: An evaluation of Renewable Energy, including this program, was completed in fiscal year 2010-11.

Engagement of Applicants and Recipients: The program is no longer accepting applications. The recipients are required to submit invoices on a quarterly basis and submit annual performance reports.