Section I: Organizational Expenditure Overview 2016-17

Organizational Profile

Minister: The Honourable Gordon James Carr, P.C., M.P.

Deputy Head: Bob Hamilton

Ministerial Portfolio1:

Year established: 1994

Main legislative authorities:


1 On November 4, 2015, an Order-in-Council designated the Minister of Industry (now the Minister of Innovation, Science and Economic Development) as the Minister for the purposes of the Canada Foundation for Sustainable Development Technology Act. As a result, resources allocated to this organization will be transferred to Innovation, Science and Economic Development Canada, thereby, reducing NRCan financial resources. Until the transfer is complete, NRCan will continue to disburse funds from its reference levels toward both the SDTC’s NextGen Biofuels Fund and the SDTC Tech Fund. These disbursements will remain equally shared between NRCan and Environment and Climate Change Canada (ECCC), with each department reporting its shares in its respective RPP and DPR.

Organizational Context

Raison d’être

NRCan works to improve the quality of life of Canadians by ensuring that our natural resources are developed sustainably, providing a source of jobs, prosperity and opportunity, while preserving our environment and respecting our communities and Indigenous People.

Responsibilities

The Minister of Natural Resources has responsibilities in relation to more than 30 acts of Parliament. The Minister’s core powers, duties and functions are set forth in the Department of Natural Resources Act, the Resources and Technical Surveys Act and the Forestry Act. The Department also works in areas of shared responsibilities with provinces, which include the environment, public safety, economic development, science and technology, and consultations with Indigenous Peoples.

To fulfil its responsibilities, the Department relies on a number of instruments (e.g. policy, regulation, statutory transfers, grants and contributions) and key activities (e.g., science and technology, partnerships and communications).

NRCan has offices and laboratories across the country. About one third of its employees are located in the National Capital Region, with the remainder being distributed from Atlantic Canada, through Quebec and Ontario, to the Western and Pacific Regions and Northern Canada.

Strategic Outcomes and Program Alignment Architecture

Strategic Outcome 1: Canada’s Natural Resource Sectors are Globally Competitive

  • Program 1.1: Market Access and Diversification

    • Sub-Program 1.1.1: Mineral and Metal Markets Access and Diversification

    • Sub-Program 1.1.2: Forest Products Market Access and Diversification

    • Sub-Program 1.1.3: Energy Market Access and Diversification

  • Program 1.2: Innovation for New Products and Processes

    • Sub-Program 1.2.1: Mining Innovation

    • Sub-Program 1.2.2: Forest Sector Innovation

    • Sub-Program 1.2.3: Geospatial Innovation

  • Program 1.3: Investment in Natural Resource Sectors

    • Sub-Program 1.3.1: Mineral Investment

    • Sub-Program 1.3.2: Targeted Geoscience Initiative

    • Sub-program 1.3.3: Geo-Mapping for Energy and Minerals

    • Sub-program 1.3.4: Geoscience for New Energy Supply

    • Sub-program 1.3.5: Major Projects Management Office Initiative

  • Program 1.4: Statutory Programs – Atlantic Offshore

Strategic Outcome 2: Natural Resource Sectors and Consumers are Environmentally Responsible

  • Program 2.1: Energy-Efficient Practices and Lower-Carbon Energy Sources

    • Sub-Program 2.1.1: Renewable Energy Deployment

    • Sub-Program 2.1.2: Support for Clean Energy Decision-Making

    • Sub-Program 2.1.3: Alternative Transportation Fuels

    • Sub-Program 2.1.4: Energy Efficiency

  • Program 2.2: Technology Innovation

    • Sub-Program 2.2.1:  Materials for Energy

    • Sub-Program 2.2.2: Green Mining

    • Sub-Program 2.2.3: Clean Energy Science and Technology

  • Program 2.3: Responsible Natural Resource Management

    • Sub-Program 2.3.1: Forest Ecosystem Science and Application

    • Sub-Program 2.3.2: Groundwater Geoscience

    • Sub-program 2.3.3: Environmental Studies and Assessments

    • Sub-program 2.3.4: Radioactive Waste Management

    • Sub-program 2.3.5: Geospatial Information for Responsible Natural Resource Management

Strategic Outcome 3: Canadians have Information to Manage their Lands and Natural Resources, and are Protected from Related Risks

  • Program 3.1: Protection for Canadians and Natural Resources

    • Sub-Program 3.1.1: Explosives Safety and Security

    • Sub-Program 3.1.2: Materials and Certification for Safety and Security

    • Sub-Program 3.1.3: Forest Disturbances Science and Application

    • Sub-Program 3.1.4: Climate Change Adaptation

    • Sub-Program 3.1.5: Geohazards and Public Safety

  • Program 3.2: Landmass Information

    • Sub-Program 3.2.1: Essential Geographic Information

    • Sub-Program 3.2.2: Canada’s Legal Boundaries

    • Sub-Program 3.2.3: Polar Continental Shelf Logistics Support

    • Sub-Program 3.2.4: United Nations Convention on the Law of the Sea

  • Program 4.1: Internal Services

Organizational Priorities

For 2016-17, the Department’s focus will be on the five key commitments laid out in the Prime Minister’s mandate letter (available here) to the Minister of Natural Resources:  


2The start date for these initiatives is 2015-16. Target end dates will be established based on engagement with partners and stakeholders, and Cabinet discussions.

NRCan also delivers results for Canadians on its legislative mandate (described here) and a range of important issues including:

  • Working with partners to restore public confidence in developing and bringing natural resources to market;
  • Innovating to optimize resource potential and to support Canada’s transition to a low-carbon economy;
  • Leveraging NRCan’s expertise to maintain public safety and security; and
  • Enabling NRCan to be a high-performing organization that is innovative and collaborative in delivering on its mandate.

Further details are available in Section II: Analysis of Programs by Strategic Outcome.

Risk and Opportunity Analysis

Natural resources are key contributors to Canada’s economic performance, directly and indirectly accounting for about 20% of Canada’s nominal gross domestic product (GDP). The sector is a key source of jobs across Canada, directly and indirectly accounting for 1.8 million jobs. Valued at $259 billion in 2014, natural resources account for approximately half of Canada’s merchandise exports.

Natural resources are highly-traded commodities and, in most cases, prices are set by global markets. Energy, mineral and metal prices have declined recently, generally as result of oversupply in global markets.

  • Global prices for crude oil and liquefied natural gas prices have fallen by over 50% since June 2014.
  • Mineral & metal prices have been on a downward trend since 2011.

These price changes have created challenges for Canada’s natural resource sector. For example, investment has declined considerably, resulting in significant layoffs. Given the importance of natural resources in Canada’s economy, a slowdown has spillover effects on national, provincial and territorial economies.

Looking ahead, commodity prices are expected to remain low in the near term and rise to 2020 and beyond. Of note, despite low oil prices, Canadian production is forecast to grow as projects currently under construction continue to move ahead.

Through its policies, regulations and programs, NRCan (on behalf the Government of Canada) works with various stakeholders to help mitigate these effects, inform Canadians, and ensure policy choices are based on a complete understanding.

Planned Expenditures

Budgetary Financial Resources (dollars)

2016-17
Main Estimates

2016-17
Planned Spending

2017-18
Planned Spending

2018-19
Planned Spending

1,592,518,753

1,592,518,753

1,420,420,537

1,417,806,350

Information on changes from 2016-17 to 2018-19 can be found in the narrative following the Budgetary Planning Summary for Strategic Outcomes and Programs Table.

 

Human Resources (Full-time equivalents [FTEs])

2016-17

2017-18

2018-19

3547

3454

3435

FTEs are extracted from the financial system and meet the following definition as set out by Treasury Board Secretariat: A measure of the extent to which an employee represents a full person-year charged against a departmental budget. Full-time equivalents are calculated as a ratio of assigned hours of work to scheduled hours of work. Scheduled hours of work are set out in collective agreements.

 

Budgetary Planning Summary for Strategic Outcome(s) and Program(s) (dollars)

Strategic Outcome(s), Program(s) and Internal Services

2013–14
Expenditures

2014–15
Expenditures

2015–16
Forecast Spending

2016–17
Main Estimates

2016–17
Planned Spending

2017–18
Planned Spending

2018–19
Planned Spending

Strategic Outcome 1: Canada’s Natural Resource Sectors are Globally Competitive

1.1 Market Access and Diversification

59,733,334

61,566,240

64,060,351

43,993,476

43,993,476

28,361,877

28,353,543

1.2 Innovation for New Products and Processes

94,093,063

71,707,214

86,490,553

96,074,981

96,074,981

55,536,596

33,047,172

1.3 Investment in Natural Resources Sectors

65,333,593

60,589,504

59,959,471

62,900,219

62,900,219

65,272,906

62,740,438

1.4 Statutory Programs – Atlantic Offshore *

795,884,721

837,746,067

489,183,203

743,336,158

743,336,158

761,960,697

806,240,682

Subtotal

1,015,044,711

1,031,609,025

699,693,578

946,304,834

946,304,834

911,132,076

930,381,835

Strategic Outcome 2: Natural Resource Sectors and Consumers are Environmentally Responsible

2.1 Energy-efficient Practices and Lower-carbon Energy Sources

314,652,883

291,745,439

214,551,934

183,336,817

183,336,817

133,361,992

120,560,992

2.2 Technology Innovation

155,738,548

151,832,220

126,793,222

115,838,434

115,838,434

108,270,795

104,315,546

2.3 Responsible Natural Resources Management

282,047,031

267,570,932

114,957,220

29,619,508

29,619,508

28,958,607

28,959,115

Subtotal

752,438,462

711,148,591

456,302,376

328,794,759

328,794,759

270,591,394

253,835,653

Strategic Outcome 3: Canadians have Information to Manage their Lands and Natural Resources, and are Protected from Related Risks

3.1 Protection for Canadians and Natural Resources

65,535,095

65,692,439

63,176,272

57,808,743

57,808,743

49,858,500

48,894,225

3.2 Landmass Information

73,828,231

78,469,116

75,953,499

75,092,662

75,092,662

51,156,481

47,898,096

Subtotal

139,363,326

144,161,555

139,129,771

132,901,405

132,901,405

101,014,981

96,792,321

Internal Services Subtotal

184,198,094

162,499,616

191,428,122

184,517,755

184,517,755

137,682,086

136,796,541

Total

2,091,044,593

2,049,418,787

1,486,553,847

1,592,518,753

1,592,518,753

1,420,420,537

1,417,806,350

*Statutory Programs – Atlantic Offshore: As per the various Atlantic Offshore Accords, the  Government of Canada receives royalties for offshore oil and gas production and subsequently pays an equal amount to the provinces of Nova Scotia and Newfoundland and Labrador.

Planned spending declines by $174.7 million, or 11%, from 2016-17 to 2018-19. This is mainly attributable to:

  • A decline in funding profile for several programs, the most significant of which are:
    • ecoENERGY for Renewable Power;
    • Sustainable Development Technology Canada for Sustainable Development Tech Fund3;
    • Enhancing National Earthquake Monitoring; and,
    • United Nations Convention on the Law of the Sea (UNCLOS) – Mapping the North Pole.
  • The sunsetting of some programs or initiatives in 2016-17 or 2017-18, the most significant of which are:
    • Federal Infrastructure;
    • Forest Innovation and Expanding Market Opportunities;
    • Investments in Forest Industry Transformation; and,
    • ecoENERGY for Biofuels.
  • These decreases are partially offset by an increase under the Offshore Atlantic Accords, specifically related to agreements between the Government of Canada and the province of Newfoundland and Labrador. As the majority of payments are related to revenue, the planned spending trend fluctuates depending on a number of factors such as expected production and pricing levels.

Government decisions on the renewal of sunsetting programs would be reflected in the Department’s future Budget exercises and Estimates documents.

For the explanation on variances in actual expenditures and forecasted spending between 2013-14 and 2015-16, please refer to the analysis included in the Departmental Spending Trend Graph section that follows.


3On November 4, 2015, an Order-in-Council designated the Minister of Industry (now the Minister of Innovation, Science and Economic Development) as the Minister for the purposes of the Canada Foundation for Sustainable Development Technology Act. As a result, resources allocated to this organization will be transferred to Innovation, Science and Economic Development Canada, thereby, reducing NRCan financial resources. The above financial table does not reflect this reduction. Until the transfer is complete, NRCan will continue to disburse funds from its reference levels toward both the SDTC’s NextGen Biofuels Fund and the SDTC Tech Fund. These disbursements will remain equally shared between NRCan and ECCC, with each department reporting its shares in its respective RPP and DPR.

Alignment of Spending With the Whole-of-Government Framework

Alignment of 2016-17 Planned Spending With the Whole-of-Government FrameworkFootnote [x] (dollars)

Strategic Outcome

Program

Spending Area

Government of
Canada Outcome

2016-17 
Planned Spending

1. Canada’s Natural Resource Sectors are Globally Competitive 1.1 Market Access and Diversification Economic Affairs Strong Economic Growth 43,993,476
1.2 Innovation for New Products and Processes Economic Affairs Strong Economic Growth 96,074,981
1.3 Investment in Natural Resources Sectors Economic Affairs Strong Economic Growth 62,900,219
1.4 Statutory Programs – Atlantic Offshore Economic Affairs Strong Economic Growth 743,336,158
2. Natural Resource Sectors and Consumers are Environmentally Responsible 2.1 Energy-efficient Practices and Lower-carbon Energy Sources Economic Affairs A Clean and Healthy Environment 183,336,817
2.2 Technology Innovation Economic Affairs A Clean and Healthy Environment 115,838,434
2.3 Responsible Natural Resources Management Economic Affairs A Clean and Healthy Environment 29,619,508
3. Canadians have Information to Manage their Lands and Natural Resources, and are Protected from Related Risks 3.1 Protection for Canadians and Natural Resources Social Affairs A Safe and Secure Canada 57,808,743
3.2 Landmass Information Social Affairs A Safe and Secure Canada 75,092,662

Total Spending by Spending Area (dollars)

Spending Area Total Planned Spending
Economic affairs 1,275,099,593
Social affairs 132,901,405
International affairs -
Government affairs -

Departmental Spending Trend

Departmental Spending Trend Graph

Departmental Spending Trend Graph

 
Text Version

Departmental Spending Trend Graph

The table below illustrates the departmental spending trend, in dollars, for the period 2013-14 to 2018-19.
  2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
Sunset Programs - Anticipated 0 0 0 73,423 145, 665 120, 093
Statutory 875,351 893,906 557,741 796,717 814,225 858,139
Voted 1,233,694 1,155,512 928,813 795,802 606,196 559,667
Total 2,091,045 2,049,419 1,486,554 1,665,941 1,566,086 1,537,900
 

For fiscal year 2013-14 and 2014-15, spending represents the actual expenditures as reported in the Public Accounts. For fiscal year 2015-16, spending represents forecasted expenditures as of the end of November 2015. For the period 2016-17 to 2018-19, spending reflects approved funding by Treasury Board to support the departmental strategic outcomes as well as anticipated renewals of some programs sunsetting during this period. Anticipated renewals are included in order to give a more reasonable picture of the future of the department, however these are subject to government’s decisions to extend, reduce or enhance funding. Outcomes of such decisions will be reflected in the Department’s future budget exercises and Estimates documents. The figures for anticipated renewals are not included in any other tables within this document.

As indicated in the chart above, NRCan’s forecasted spending for 2015-16 is $1,487 million, a decrease of $604 million, or 29%, from 2013-14 spending of $2,091 million. This decrease is mainly due to:

  • A decrease in statutory payments pursuant to the Atlantic Offshore Petroleum Accord Acts. Under these Acts, the revenues (e.g., royalties) from offshore resources are collected by the Receiver General for Canada. Once collected, NRCan transfers a like amount to Newfoundland and Labrador or Nova Scotia. Royalty revenues, in particular, are a function of variables such as international crude oil prices and offshore oil and natural gas production and costs that fluctuate depending on global commodity markets. Correspondingly, the transfers are subject to equivalent variations in any given period.
     
  • New initiative which began in 2015-16:
    • Federal Infrastructure
  • A decrease in program spending:
    • Nuclear Legacy Liabilities Program4
    • Port Hope Area Initiative5
    • Medical Isotopes
    • Windpower Production Incentive
    • ecoENERGY for Biofuels
    • Forest Innovation and Expanding Market Opportunities
  • The sunsetting of the following programs in 2014-15:
    • Clean Energy Fund
    • Satellite Stations Revitalization

As indicated in the Budgetary Planning Summary for Strategic Outcome(s) and Program(s) financial table, NRCan’s planned spending for 2016-17 is $1,593 million, an increase of $106 million, or 7%, from 2015-16 forecasted spending of $1,487 million. This increase is mainly due to an increase in statutory offshore payments offset by the transfer of responsibility of the Nuclear Legacy Liabilities Program and Port Hope Area Initiative to AECL and slightly offset by the sunsetting and year-over-year variability in the funding profile of various programs.

For the explanation on variances in planned spending between 2016-17 and 2018-19, please refer to the analysis included in the previous Planned Expenditures section.

Estimates by Vote

For information on NRCan’s organizational appropriations, consult the 2016-17 Main Estimates on the Treasury Board of Canada Secretariat website.Footnote [xi]


4While the funding profile of the Nuclear Legacy Liabilities Program and Port Hope Area Initiative have been decreasing, a government decision has rendered the transfer of responsibility over these programs to AECL; therefore, the reference levels for these initiatives will be completely transferred to AECL as of fiscal year 2016-17.

5 Idem.