Details on Transfer Payment Programs

Name of Transfer Payment Program: Isotope Technology Acceleration Program (ITAP) (Voted)

Start date: May 31, 2012
End date: March 31, 2016

Description:
The objective of ITAP is to further develop commercial alternatives to existing reactor-based isotope production technologies to improve the security of supply for Canadians, and to support the Government of Canada in exiting the medical isotope business, thereby moving towards a fully market-based supply chain in 2016.

The ITAP, funded through Budget 2012, is a $25 million, conditionally repayable, contribution program over four years (2012-16) to advance the development of alternative isotope production technologies, specifically cyclotron and linear accelerator production of the key medical isotope technetium-99m (Tc-99m).

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

Results achieved:
The program has three contribution agreements for projects led by the University of Alberta (cyclotron), TRIUMF (cyclotron) and Prairie Isotope Production Enterprise (linear accelerator). All projects have completed infrastructure and equipment upgrades, and installation. The two cyclotron projects have demonstrated production of commercial quantities of technetium-99m to supply an urban area. Health and regulatory approvals are being sought for the projects.

Program: 2.2 – Technology Innovation

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	0.0	6.1	8.6	9.0	9.0	-0.4
Total Program	0.0	6.1	8.6	9.0	9.0	-0.4

Comments on variances: 
The variance in planned spending vs. actual spending is attributed to the conversion of $400,000 from Vote 1 (Operating and Monitoring) to Vote 10 (Grants and Contributions). The ITAP Treasury Board submission provided $400,000 in Vote 1 in 2013-14 to support the work of federal laboratories. It also provided NRCan with the appropriate mechanisms to transfer Vote 1 monies to Vote 10. Projects from the ITAP do not require work from federal laboratories and hence the $400,000 in Vote 1 was transferred to Vote 10 for a total of $9.0 million in total authorities.

Audits completed or planned: 
Recipient audits are planned for 2014-15, which is the mid-point of the program.

Evaluations completed or planned: 
The program is currently not on the evaluation plan for the department.

Engagement of applicants and recipients: 
A dedicated website is used to communicate the Government of Canada's action on medical isotope supply. It provides information on the report from the Expert Review Panel on Medical Isotope Production, news releases and other useful links. The website was also used to launch the Request for Project Proposal for the ITAP, including providing details on the scope of the Request, and contact information.

Program administrators engage with recipients on a quarterly and annual basis to obtain progress reports (financial and technical), as outlined in the contribution agreement. A 10% holdback will be used to encourage timely final project reporting. Operating and monitoring funding for the ITAP has been set aside for site visits and recipient audits. NRCan collaborated with Health Canada to hold a workshop to bring together recipients and other stakeholders, particularly representatives of provincial governments.

The Department will continue to engage with recipients throughout the program and for 10 years beyond to monitor for repayability.

Name of Transfer Payment Program: Investing in Canada’s Forest Sector – Forest Innovation Program and Expanding Market Opportunities Program (Voted)

Start date: March 12, 2009
End date: March 31, 2017

Description:

• Forest Innovation Program (FIP) – aims at supporting the goal of sustainable natural resource development by enhancing the long-term economic opportunities for Canada's forest sector through increased investment in forest innovation.
• Expanding Market Opportunities (EMO) – aims at maintaining and growing international wood product markets, expanding wood use in the North American non-residential and mid-rise construction market, and promoting the strong environmental credentials of Canadian forest products.

This transfer payment program does not have any repayable contributions.

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

Results achieved:
Expanding Market Opportunities
The EMO program continued to increase the use of wood in various construction categories (e.g., residential, commercial, and non-residential) both domestically and abroad. Under the offshore component of the Program, exports of Canadian wood products to offshore markets more than doubled (112%) between 2009 and 2013. In 2013-14, proponents continued to build on their successes and have now established a strong presence and Canadian brand recognition in markets such as Japan, China and Korea. They are also making in-roads in emerging markets, such as India and the Middle East. Some specific achievements during 2013-14 included:

• Japan: Canadian wood exports to Japan in 2013 increased 23% over 2012 levels (a 54.8% increase since 2009). Part of this increase is attributed to EMO investments to raise awareness of Canadian wood products in this market. One example is the Ministerial approval of three Canadian shear wall oriented strand board (OSB) applications, which will allow it to compete in new applications, such as post and beam construction. A new publication will be produced in 2014-15 to communicate the benefits of these new systems and the reasons why Japanese builders, architects, building material wholesalers and distributors should specify and use Canadian OSB.
• China: Canadian wood exports to China grew to $1.89 billion in 2013 – a 35% increase from 2012 levels. Part of this increase is attributed to EMO investments to foster greater acceptance of Canadian wood products and knowledge of wood frame construction systems. One example is the expansion of the vocational school program to include 10 new schools, bringing the total cooperating colleges across China to 20. As a result, more than 1,000 students and teachers have been trained on wood-frame construction methods and systems.
• Korea: Provided ongoing training in wood-frame design, building systems, and construction technologies to over 800 Korean students, architects, builders and inspectors. Such training helps ensure future and current professionals involved in the wood-frame construction sector have the latest information to design and build with wood, and cultivate greater acceptance of wood in this market.
• India: Two market studies have confirmed that this market is expected to continue to grow and offer opportunities for Canadian wood product manufacturers. The studies are part of NRCan’s efforts to help Canadian wood product companies establish strategies for entering this emerging wood market. In January 2014, former Natural Resources Minister Joe Oliver underscored this point while in India by announcing an additional $600,000 in support for the FII/NRCan India office for 2014-15. This brings NRCan’s total investment in India to $1.8 million since 2012.
• Middle East: Conducted two market studies in this emerging market: the first was on the remanufacturing and furniture sectors in the Gulf Cooperation Council (GCC) region; the second was on the remanufacturing sector in Turkey. The studies will help Canada’s wood industry establish networks and make in-roads in these emerging markets, which see Canada as source of high-end wood finishes.
• Europe: Exports of Canadian wood pellets to Europe in 2013 increased 36% over 2009 export levels. Wood pellets are an important commodity in Europe, comprising just over 45% of all Canadian wood products exported to this market. Through its support for the Wood Pellet Association of Canada and its participation at various events and forums, EMO is helping to advance the interests of Canadian wood pellet producers in this market. In addition, disaster relief housing is an emerging niche market for Canada’s pre-fabricated home sector, which aims to offer housing solutions following natural disasters. EMO supported a display of Canada’s innovative disaster relief housing solutions at the United Nations’ 2013 World Habitat Day conference held in Geneva.
• EMO also continued to promote the sector’s environmental performance to address market access and regulatory issues in offshore markets. These issues can limit trade in Canadian forest products.
• In addition, through support provided to the WoodWorks! Program in both Canada and the US in 2013-14, EMO helped influence 323 projects to use more wood in structural and interior designs, representing $146.7 million in new wood product sales. Among key achievements:

• Canada:
  • Developed the first technical guide for the design and construction of tall wood structures in Canada. The guide, developed by FPInnovations in partnership with a diverse group of experts, is helping experienced design and construction teams gain greater understanding of building high-rise wood structures in Canada. It includes the latest scientific knowledge of wood-based building systems and was developed in support of the Tall Wood Building Initiative, a joint project of NRCan and the Canadian Wood Council to foster the commercial uptake of tall wood building construction in North America.
  • Continued to position Canada as a world leader in sustainable forest management, as well as provided scientific and technical information, which supported the implementation of the Canadian Boreal Forest Agreement (CBFA). The CBFA, signed in May 2010, is a private agreement between 19 forest companies, who are members of the Forest Products Association of Canada, and seven non-governmental environmental organizations. The Agreement seeks to develop a new model of collaboration among these parties to enable a stronger, more competitive forest industry and a better protected, sustainably managed boreal forest. It also provides export markets with tangible evidence of Canada’s strong environmental record in forestry.

• United States: 
  • Provided training to 12,335 architects, engineers, code officials and others through 131 educational events, such as webinars, workshops, Wood Solutions Fairs, lunch and learn sessions—all designed to promote the use of wood in non-residential and mid-rise applications.

Forest Innovation Program
The Forest Innovation Program continued to help develop and commercialize new technologies for Canada’s forest sector and assist in its ongoing transformation by providing funding support to FPInnovations to facilitate the forest industry’s adoption and deployment of these emerging technologies and processes.

Specific achievements in 2013-14 included:

• Continued development of cellulose filaments (CF). A world-first CF production and demonstration plant that can be scaled up to commercial levels was built at Kruger’s pulp mill in Trois-Rivières, Quebec. Cellulose filaments can be used as reinforcing agents in a variety of next generation products. These include moisture resistant films used in food packaging, greaseproof paper with stringent performance requirements, and stronger paper grades that can be used in tissues, paper towels and printing papers.
• Developed a new thermo-mechanical pulping process, which enables mechanical pulp mills to separate sugars and lignin during the pulping process. These two ingredients can then be used in various new products, including non-woven fabrics, reinforcing rubber, bio-chemicals, and more absorbent hygiene products. This is expected to diversify the forest sector’s revenue streams and help maximize the use of available forest resources. This process is now ready for pilot-scale demonstration.
• Evaluated and implemented a process for optimizing log sorting utilizing simulation software called FPLogCon. Ensuing trials conducted at two veneer mills revealed that sorting logs by diameter before heating can result in a 15 to 20% reduction in log heating time. It can also reduce equipment breakdowns, blade replacements, and energy consumption in veneer manufacturing.
• Designed new wood panel products from veneer, strand, and wood fibre sources. These products, which are designed to provide both structural and thermal insulation properties, can help maintain and possibly expand markets for OSB and plywood, both domestically and abroad. They can also help Canada’s wood sheathing sector recover some of the market share losses it has experienced due to the growing popularity of rigid foam as a form of building insulation.
• Provided scientific and technical information related to expansion into mid-rise construction (i.e. 5- and 6‑storey buildings). Published the Guide for Designing Energy-Efficient Building Enclosures for Wood-Frame Multi-Unit Residential Buildings in Marine to Cold Climate Zones in North America. The guide assists architects, engineers, designers and builders in improving the thermal performance of building enclosures of wood multi-unit residential buildings. It also advances design and construction practices, and material use based on the best knowledge. This can help ensure the durable performance of wood-frame building enclosures that are insulated to higher levels than traditional wood-frame construction. The Guide, which was well received by the design communities in Canada, the US, and South Korea, has been downloaded 8,000 times since its April 2013 release.
• Published information and design guidelines on tools that measure wood floor vibration and sound performance, including on how to improve the sound and vibration performance of wood-based floor systems. This information can reassure designers that the proposed wood-based system or building will provide good vibration and sound transmission performance, two areas often cited as issues of concern in multi-unit construction.
• Developed and refined software models to help the forest industry identify ways to increase the efficiency of mill operations by capturing more waste heat and water. Once identified improvements are implemented at the mill, it is estimated it can produce green power valued at $5.5 million each year from its waste heat recovery. It can also reduce its water consumption by 800,000 m3 per year, or the equivalent of about $150,000 in annual savings.
• Provided hands-on support to small and medium-sized enterprises in the value-added wood products manufacturing sector. FPInnovations industry advisors performed 602 mill visits or assessments, and provided 316 technical interventions or enquiries across Canada.
• Worked in collaboration with forest companies, provinces, academia, and research institutes to apply Enhanced Forest Inventory systems (Canadian Wood Fibre Centre). These systems allow industry to better predict fibre supply attributes to optimize harvesting and mill operations; a forest company that has applied these techniques expects an annual savings of $2.4 million per year.

Program and Sub-Program: 1.1 – Market Access and Diversification and 1.2 – Innovation for New Products and Processes

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	51.5	44.0	37.9	37.9	37.9	0
Total Program	51.5	44.0	37.9	37.9	37.9	0

Comments on variances: 
Program funds were spent according to plans.

Audits completed or planned: 
EMO: In 2013-14, thirteen recipient audits were completed at a cost of $148,930. In 2014-15, eight recipient audits will be undertaken at an estimated cost of $107,000.

FIP: A recipient financial and compliance audit was conducted in 2013-14.

Evaluations completed or planned: 
FIP was evaluated as part of the evaluation of the Forest Innovation sub-program in 2013-14.

Engagement of applicants and recipients: 
Conference calls and webinars were held with EMO program proponents applying for 2013-14 funding, outlining the process for application and eligibility criteria.

Under the FIP, as FPInnovations is the only primary recipient, regular meetings were held between senior FPInnovations and NRCan officials to discuss program strategy and delivery. In addition, NRCan participated on FPInnovations industry/government advisory processes, which align the research program with industry vision and strategy.

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

Start date: June 17, 2010
End date: March 31, 2018

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. The objective will be achieved by investing in innovative technologies that 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 to commercial scales that direct wood fibre and by-products from wood processing into higher value uses, which 1) increase the total revenues available from a log, 2) diversify product lines for the forest industry, stabilizing economic performance, and 3) produce renewable energy and other products that are beneficial to the environment. By providing funding to Canadian forest firms for capital investments in bioenergy or bioproduct industrial processes to advance these technologies towards full, commercial-scale implementation, this Program will broaden and build upon previous investments in forest sector transformation.

This transfer payment program does not have any repayable contributions.

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

Results achieved:
To help foster the creation of a more diverse product mix for the forest sector, the Investment in Forest Industry Transformation (IFIT) program funded two new high-value technologies at forest product facilities. These projects will pioneer some exceptional advances in innovative forest products, such as:

• An unprecedented collaboration to accelerate the commercial production of cellulose filaments from wood pulp to improve traditional paper products and create many other completely new high-value product applications. Cellulose filaments are a revolutionary, chemical-free, renewable and recyclable material that can dramatically improve pulp, paper, bioplastics, adhesives as well as innovative paints and coatings.
• The first commercial-scale plant to recover lignin from its pulp production stream based on patented technology. Lignin, a natural adhesive derived from wood, is a bio-based renewable alternative to some of the glue components used in plywood and wood panel manufacturing and has the potential for a wide variety of other innovative applications.
• Four projects completed by proponents during the year will also yield positive results for the forest industry in Canada. These include the increased production of pulp and high value biochemicals, generation of electricity using biomass-derived waste heat, creating new wood fibre products (e.g., fibre mats used for automobile interior trim parts and erosion control mats), and optimizing mill processes to reduce production costs on commodity products and enhancing quality and performance of goods produced.

All projects funded by the IFIT program have led to the establishment of some new business relations with other sector firms. The collaborations specifically led to direct project participation by bio-chemical production and engineering firms, a horticultural products firm and an advanced wood design and building engineering firm.

When added to the program’s previously existing portfolio of new green energy, bio-chemicals, and bio-composite projects, IFIT is now pioneering a total of 14 new high-value processes, technologies and products at the commercial scale in the Canadian forest product sector.

Program and Sub-Program: 1.2 – Innovation for New Products and Processes

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	17.7	21.7	35.7	35.7	25.6	10.1
Total Program	17.7	21.7	35.7	35.7	25.6	10.1

Comments on variances: 
Three highly innovative projects (2 new, and 1 ongoing) benefited from $25.6 million in federal investments during 2013-14 to support the diversification and transformation of Canada’s forest sector through the production of new bio products and renewable energy. Funds representing $10.1 million were returned to the fiscal framework due to the withdrawal of a large-scale project at the end of the fiscal year.

Audits completed or planned: 
An audit of the IFIT program’s management control framework was conducted in 2012-13. The program was also one of six federal programs selected for audit by the Office of the Auditor General in 2012-13 as part of its review of grant and contribution program reforms. Recipient audits were performed on 50% of the projects funded by the Program by the end of 2013-14.

Evaluations completed or planned: 
An overall multi-program forest innovation evaluation is currently underway and scheduled for completion in 2014-15. Aspects directly concerning the IFIT program were completed in 2013-14.

Engagement of applicants and recipients: 
Program applicants are supported through a dedicated program website, which provides access to program guides, eligibility requirements, and project announcements, as well as program administration contact details. Calls for proposals were widely advertised through public press releases, e-mail distribution lists, and liaison with a wide range of associations, other government departments, and other stakeholders. Selected program recipients are further engaged through regular communication with program administrators, who monitor progress on the achievement of program objectives. During the last year of the program, targeted outreach activities were performed to help communicate program results and highlights to stakeholders.

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.

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

Results achieved:
Since its launch, the ecoENERGY for Biofuels program has signed contribution agreements resulting in production capacity of 1.881 billion litres per year of ethanol against a target of 2 billion litres, and 575 million litres per year of biodiesel against a target of 500 million litres. In 2013-14, 1,660 million litres of ethanol and 125 million litres of biodiesel were produced and sold by proponents.

Program and Sub-Program: 2.1 – Energy-efficient Practices and Lower-carbon Energy Sources

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	156.8	130.0	176.8	169.2	113.7	63.1
Total Program	156.8	130.0	176.8	169.2	113.7	63.1

Comments on variances: 
The variance in planned and actual 2013-14 spending is largely due to the fact that biodiesel producers are not accessing the full amount of incentives possible under their agreements. This is because of a lack of domestic demand for their product. Therefore, many producers have either lowered or ceased production.

Audits completed or planned: 
Recipient audits are conducted every year resulting in each proponent being audited at least once by the end of the program. In 2013-14, 6 recipient audits were completed at a cost of $294,599. Currently, a Request for Proposal is being issued for 12 recipient audits to be completed over the next three fiscal years.

Evaluations completed or planned: 
The next program evaluation will be in 2017-18.

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 regular calls on project process, 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: The program’s authority to enter into contribution agreements ended on March 31, 2011. However, allocated funding will be issued to program participants until 2020-21.

Description:
The ecoENERGY for Renewable Power program is investing $1.4 billion over 14 years to increase Canada's supply of clean electricity from renewable sources such as wind, biomass, low-impact hydro, and solar photovoltaic energy. 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. Payments of the incentive will be paid over a 10-year period to qualifying projects.

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

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

Program and Sub-Program: 2.1 – Energy-efficient Practices and Lower-carbon Energy Sources

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	125.7	127.6	137.9	133.4	127.1	10.8
Total Program	125.7	127.6	137.9	133.4	127.1	10.8

Comments on variances: 
Actual spending was less than planned spending because not all project applicants met the March 31, 2011 deadline for project commissioning. As a result, not all of the funds originally available under the program were allocated. In addition, projects qualifying for the incentive produced less energy than anticipated, resulting in lower actual spending than anticipated.

Audits completed or planned: 
Four recipients were audited during 2013-14.

Evaluations completed or planned: 
An evaluation of Renewable Energy Deployment programs, including this program, is planned for 2014-15.

Engagement of applicants and recipients: 
Applications are no longer accepted for the ecoENERGY for Renewable Power program, as the commitment period ended on March 31, 2011. The department continues to engage with recipients to ensure compliance with the requirements of the contribution agreements.

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

Start date: April 1987
End date: Perpetuity

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

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

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: 1.4 – Statutory Programs — Atlantic Offshore

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	1,059.8	566.1	1,142.1	731.5	731.5	410.6
Total Program	1,059.8	566.1	1,142.1	731.5	731.5	410.6

Comments on variances: 
Variances in this program have no material impact on the department or the government’s fiscal position since the amount of Royalties collected is exactly offset by transfers to the provincial government of Newfoundland and Labrador. Total authorities are based on Royalty forecasts prepared eighteen months prior, assuming stable production and resource prices. During the 2013-14 period, there were significant decreases in production due to unplanned shut-downs of all three of the oil producing platforms, which caused Royalties to be less than the forecast; program spending (i.e., transfers to the provincial government) decreased by an identical amount.

Audits completed or planned: 
In April 2014, the Audit Branch completed an audit of NRCan’s offshore petroleum program. The audit concluded that NRCan has an effective management control framework in place to administer and manage accurate and timely offshore royalty revenues and related transfers.

Evaluations complete 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: 1993-94
End date: Perpetuity

Description:
To make payments to the province of Nova Scotia equivalent to revenue amounts received by Canada in relation to offshore activities in the Canada-Nova Scotia offshore.  

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

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 the Canada-Nova Scotia Petroleum Resources Accord Implementation Act.

Program: 1.4 – Statutory Programs — Atlantic Offshore

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	157.3	55.1	79.3	43.9	43.9	35.4
Total Program	157.3	55.1	79.3	43.9	43.9	35.4

Comments on variances: 
Variances in this program have no material impact on the department or the government’s fiscal position since the amount of Royalties collected is exactly offset by transfers to the provincial government of Nova Scotia. Total authorities are based on Royalty forecasts prepared eighteen months prior, assuming stable production and resource prices. During the 2013-14 period, there were significant decreases in natural gas production due to reductions in facility operating capacity (by 35%) and the average natural gas price being well below the historical average. Together these factors caused Royalties to be less than the forecast; program spending (i.e., transfers to the provincial government) decreased by an identical amount.

Audits completed or planned: 
In April 2014, the Audit Branch completed an audit of NRCan’s offshore petroleum program. The audit concluded that NRCan has an effective management control framework in place to administer and manage accurate and timely royalty revenues and related transfers.

Evaluations completed or planned: 
N/A

Engagement of applicants and recipients: 
N/A

Name of Transfer Payment Program: Nova Scotia Crown Share Adjustment Payments Regulations (Statutory)

Start date: June 1, 2012
End date: Perpetuity

Description:
The Minister of Natural Resources is obliged under sections 246 to 249 of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act (the 'Accord Act') to make Crown Share Adjustment (CSA) payments to the Province of Nova Scotia from the Consolidated Revenue Fund.

The Government of Canada obtained a 25% carried interest in all offshore projects under the National Energy Program (NEP) which was initiated in 1980. The Province of Nova Scotia subsequently negotiated the right to acquire a portion of any federal interest in oil and natural gas projects in the Canada-Nova Scotia offshore area under the 1982 Canada-Nova Scotia Agreement on Offshore Oil and Gas Management and Revenue Sharing (the '1982 Agreement'). The NEP was dismantled after the 1984 federal election but Nova Scotia subsequently negotiated Crown Share Adjustment payment provisions as part of the 1988 Accord Act. These provisions of the Accord Act essentially provide Nova Scotia with an equivalent financial benefit to what it would have achieved had the federal government had an interest and Nova Scotia had been able to exercise its Crown Share right under the 1982 Agreement.

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

Results achieved:
100% of payments have been made in a timely fashion, and no delays are anticipated for the upcoming payments.

Program: 1.4 – Statutory Programs — Atlantic Offshore

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	0.0	57.8	22.5	12.9	12.9	9.6
Total Program	0.0	57.8	22.5	12.9	12.9	9.6

Comments on variances: 
Total authorities are based on production forecasts. In 2013-14, there were unplanned shutdowns of the Sable Energy Project. In addition, natural prices were below both historical and forecasted averages. These two factors resulted in lower Crown Share payments from Canada to the provincial government of Nova Scotia. Nova Scotia confirmed that the amount of Canada’s Crown Share payment for 2013-14 was accurate.

Audits completed or planned: 
In April 2014, the Audit Branch completed an audit of NRCan’s offshore petroleum program, including Crown Share Adjustment Payments. The audit concluded that NRCan has an effective management control framework in place to administer and manage accurate and timely offshore royalty revenues and related transfers.

Evaluations completed or planned: 
N/A

Engagement of applicants and recipients: 
The province of Nova Scotia is involved in the methodology and calculation of the CSA payment and agrees upon the amount of the transfer in advance of the transfer.

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

Start date: April 1, 2002
End date: The program’s authority to enter into contribution agreements ended on March 31, 2007. However, allocated funding will be issued as per signed contribution agreements with program participants until 2016-17.

Description:
The Wind Power Production Incentive (WPPI) Program was set up to help establish wind energy in Canada by providing a financial incentive of about 1 cent per kilowatt-hour produced from the installation of up to 1,000 megawatts (MW) of new wind power capacity in Canada by 2007. Eligible recipients claim payment of the incentive over a 10-year period. The program contributes to the production of new electricity from wind energy projects. The program approved 22 wind projects for a total capacity of 924 MW.

NOTE: The total contribution funding for the program is $324 million, of which $314 million has been committed to wind projects. Actual spending will be spread out over several years until 2016-17. The initial WPPI G&C budget was $254 million and an additional $69.9 million was allocated in 2005-06.

Strategic Outcome: 2 – Natural Resource Sector and Consumers are Environmentally Responsible

Results achieved:
The program managed contribution agreements with 22 wind farms that were commissioned under the program, representing 924 megawatts of wind energy capacity in Canada and about $314 million in contribution funding over 15 years.

Program and Sub-Program: 2.1 – Energy-efficient Practices and Lower-carbon Energy Sources

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	28.4	29.6	25.3	25.3	25.3	0.0
Total Program	28.4	29.6	25.3	25.3	25.3	0.0

Comments on variances: 
N/A

Audits completed or planned: 
One recipient was audited during 2013-14.

Evaluations completed or planned:
An evaluation of Renewable Energy Deployment programs, including this program, is planned for 2014-15.

Engagement of applicants and recipients: 
The Wind Power Production Incentive program no longer accepts applications as the commitment period ended on March 31, 2007. The department continues to engage recipients to ensure compliance with the requirements of the contribution agreements.

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

Start date: April 23, 2009
End date: October 31, 2016

Description:
In support of Canada’s commitment to reduce greenhouse gas (GHG) emissions, the Clean Energy Fund provides $795 million over six years for clean energy demonstration and research and development (R&D), delivered in three components: (1) large-scale carbon capture and storage (CCS) demonstration projects undertaken by external recipients, (2) renewable energy and clean energy demonstration projects undertaken by external recipients, and (3) clean energy R&D to be carried out in federal laboratories.

The Clean Energy Fund was announced as a $1 billion program. In December 2009, in response to unprecedented demand for the ecoENERGY Retrofit Homes program, the Government of Canada allocated $205 million from the Clean Energy Fund to finance up to 120,000 additional home retrofits.

Transfer Payments for Demonstration Projects will not be intended for recipients to generate profits or to increase the value of their business. If a transfer payment leads to a profit, the recipient will be required to repay the transfer payment. The requirements that may trigger repayments are detailed in the contribution agreement, along with the process for repayment.

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

Results achieved:
Total Clean Energy Fund expenditures for 2013-14 were approximately $9.7 million. Projects in progress leveraged an additional $378 million for total investments in clean energy of almost $390 million.

The two large-scale carbon capture projects are underway for a total disbursement of $150.3M. The construction of the Shell Quest project is expected to be completed in 2015. The Enhance Energy’s Alberta Carbon Trunk Line will be fully operational in 2017. In 2013-14, $355 million was leveraged from proponents and collaborators to advance the construction of both projects, which are progressing as planned. It is expected that about 3 megatonnes of CO2 will be captured annually, starting in 2015.These projects will help demonstrate the feasibility of integrated carbon capture and storage schemes in Canada and translate into tangible reductions of CO2 emitted from large industrial point sources, such as oil sands operations and fertilizer plants.

Eighteen small-scale demonstration projects totalling $116.1 million in funding are progressing as planned. Six projects were completed in 2013-14, including among others, a 10 MW wind and storage R&D park on Prince Edward Island, an integrated urban biomass-based heating system in Quebec, and a community-based wind and storage system at a First Nation in Saskatchewan.

The $26.9 million R&D component supporting 56 R&D projects was completed in 2011-12. The final report is now available on the NRCan website.

Program and Sub-Program: 2.2 – Technology Innovation

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	90.6	26.5	116.9	86.9	9.7	107.2
Total Program	90.6	26.5	116.9	86.9	9.7	107.2

Comments on variances: 
The cancellation and delays (resulting in a financial reprofile to future years) of large-scale demonstration projects accounted for the majority of the variance. In addition, a portion is attributable to various slippages in small-scale demonstration agreements.

Audits completed or planned: 
In 2013-14, the program commenced the third audit of the Shell Quest project, and continued activities on the audit of the Enhance Energy’s Alberta Carbon Trunk Line project.

In 2013-14, the program executed nine full audits and one desk audit as a follow-up to the 2012-13 audit results. Seven of the ten audits are complete, with three ongoing. As of the end of 2013-14, all 18 small-scale projects have been audited at least once.

Evaluations completed or planned: 
The Clean Energy Fund was evaluated in 2013-14. The evaluation found that the program was well aligned with the federal government’s priorities, that there was an appropriate and necessary role for the federal government, and that there was an ongoing need for each of the program’s components.

The evaluation also found that the program has been successful in achieving some of its early outcomes. All program components have engaged a wide range of stakeholders from the public, not-for-profit and private sectors and in developing and diffusing knowledge products. The components have also contributed to informing policy advice, decision making, regulation development and the development of codes and standards. The evaluation did note that it was too early to demonstrate success relating to intermediate and longer-term outcomes, as the program is still ongoing.

Engagement of applicants and recipients: 
NRCan solicits project proposals through announcements on its website. There is no current call for proposals and the department does not expect that there will be any further calls.

The program engages recipients through quarterly, annual and end-of-project financial and non-financial reporting, through progress updates on project activities, technical and environmental site visits, and recipient audits.

Name of Transfer Payment Program: ecoENERGY Innovation Initiative (ecoEII) (Voted)

Start date: June 23, 2011
End date: March 31, 2016

Description:
The ecoENERGY Innovation Initiative (ecoEII) supports innovation in the clean energy sector by providing funding for research, development (R&D) and demonstration (collectively, RD&D) projects. It will provide $268 million over five years. The Initiative is integral to supporting the Government of Canada’s commitment to reduce total greenhouse gas (GHG) emissions by 17% from 2005 levels by 2020. It also contributes towards Canadian prosperity and competitiveness.

The objective of the ecoEII is to advance Canada’s environmental performance and the competitiveness of Canada’s clean tech industry through a comprehensive suite of RD&D activities in the areas of clean energy and energy efficiency. Proposed investments will build on Canada’s strengths and competitive advantage, supporting next generation technologies that target the country’s energy profile and needs, while maximizing future GHG reductions. Activities are in five strategic priority areas: energy efficiency in buildings and communities; clean electricity and renewables; bioenergy; electrification of transportation; and unconventional oil and gas.
The ecoEII has two components: one for Research and Development Projects, and a second for Demonstration Projects. Together, these will support more than 200 projects. The call for submissions is now closed.

For R&D projects, transfer payments will not be repayable. For demonstration projects, it is not expected that transfer payments will lead to recipients’ generating profits or increasing the value of their business. If a transfer payment to a project leads to a profit, the recipient will be required to repay a portion of the profits up to the value of the transfer payment. The requirements that may trigger repayments are detailed in the contribution agreement, along with the process for repayment.

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

Results achieved:
Expected results relate directly to knowledge and technology development. In 2013-14, the program as a whole (including the internal R&D component) allocated more than $53 million, bringing the total spent to date to $124.1 million. The program has already leveraged approximately $116 million from partners, for a total investment of $241 million to date. For the Grants and Contributions component, the initiative is providing almost $119 million in support to 90 external projects over the course of the program. With an anticipated $170 million in total leverage from public and private partners, this represents a total investment of $289 million in clean energy, which will stimulate further growth in innovative energy technologies and in the Canadian economy.

• The demonstration component’s six front-end engineering and design (FEED) studies were all completed by the end of 2013-14. Two of the FEED studies were selected for follow-up demonstration funding. Both of these projects are currently underway.
• Three of the 45 external R&D projects are now complete, notably a project with Alberta Innovates Technology Futures to identify options for CO2 storage in the Athabasca area of Alberta. This project will benefit the oil sands industry by providing characterization and evaluation of the CO2 storage capacity of potential CO2 reservoirs in the area, which will ultimately aim to reduce the oil sands industry’s carbon footprint for many decades to come.

The program is also realizing economic benefits for Canadians by creating jobs and training highly qualified personnel. Employment statistics included the creation of 55 construction, 12 operations and maintenance, and 109 full time research person-years respectively. In addition, more than 52 person years of training of highly qualified personnel in the academic sector was achieved, resulting in a total of 228 full time equivalent jobs created in 2013-14.

Program and Sub-Program: 2.2 – Technology Innovation

($ millions)	2011-12 Actual Spending	2012-13 Actual Spending	2013-14 Planned Spending	2013-14 Total Authorities	2013-14 Actual Spending	Variances
Total Contributions	0.0	15.9	27.9	34.3	34.3	-6.4
Total Program	0.0	15.9	27.9	34.3	34.3	-6.4

Comments on variances: 
With the allocation of funding to the demonstration projects resulting from the successful FEED studies, the program was able to spend more than planned, while staying within the overall program budget.

Audits completed or planned: 
An audit of the program was completed in 2013-14, which found that the program has a management control framework in place to effectively administer and manage the ecoEII program. It also identified opportunities for improvement in the areas of project costing guidance to proponents and long-term planning for programs that take into account the time to set up and administer programs, which the Office of Energy Research and Development is already adopting in its new programs.

Evaluations completed or planned: 
An evaluation of the program is planned in 2014-15.

Engagement of applicants and recipients: 
During the Arrange phase, NRCan engaged key stakeholders through a series of Leaders’ Fora. Through these engagements, the focus of subsequent calls for proposals under the five strategic priorities was refined.

During the Assess phase, very limited interaction occurred with applicants in order to keep the process fair, open and transparent. Only guidance of a very general nature was provided, where clarifications to an Applicant’s Guide that was provided to all applicants were requested. No specific advice or help was provided under any circumstances.

During the Award phase, extensive discussions occurred with proponents to incorporate and address their needs to the extent possible within the framework of ecoEII program terms and conditions and Treasury Board guidelines.

During the Administer phase, regular interaction with proponents is planned. The ecoEII program has implemented regular monitoring meetings with all recipients on a quarterly or semi-annual basis. These are formal meetings in which the progress of the project is discussed. In addition to these formal meetings, the ecoEII program routinely interacts with recipients. These interactions occur on a periodic basis via conference calls. These meetings will be scheduled based on how the project is progressing. On these calls, as well as in the formal meetings, opportunities will exist for the recipient and the ecoEII program administrators to discuss issues and recipient concerns.