Annual Service Plan Reports 2004/05 -- Ministry of Finance

Each of the Ministry of Finance's goals and objectives remain consistent with and directly contribute to the achievement of the Government Strategic Plan goal of a "strong and vibrant provincial economy". The ministry's role in contributing to the success of the Government Strategic Plan is illustrated below.

The Ministry of Finance had established five goals in our Service Plan 2004/05 – 2006/07 that guided our activities over the course of the past year. These goals continue to reflect the strategic shifts driven by government's New Era commitments and include:

The following section provides further information on the purpose and intended outcomes associated with each of these goals. A number of high-level objectives are also linked to their respective goals to illustrate progress and performance as the ministry pursued our intended future.

Goal 1: Implementing government's three-year fiscal plan and balancing the budget beginning in 2004/05.

A strong and vibrant provincial economy is a key goal in the government's three-year strategic plan. The ministry assisted government in achieving this goal by maintaining a competitive tax regime and assisting ministries to meet their budget and service plan targets, thereby eliminating the structural deficit and balancing the budget in accordance with the requirements of the Balanced Budget and Ministerial Accountability Act. The ministry also coordinated the management of labour relations policies and practices in the public sector to foster an efficient and effective workforce.

Objectives

1.3 Effective management of public-sector labour relations and human resource strategies.

Objective 1.1: Balance provincial budget annually beginning in 2004/05.

The province eliminated the government's structural deficit and balanced the budget in 2004/05 in accordance with the requirements of the Balanced Budget and Ministerial Accountability Act.

Successfully balancing the provincial budget in 2004/05 represented a significant achievement for government, the ministry and all British Columbians and directly contributed to the achievement of government's three-year strategic plan goal of "A strong and vibrant provincial economy". Looking forward the ministry will continue to work to ensure future budgets are balanced and continue to assist in identifying opportunities to reduce the overall debt burden and improve the province's debt to GDP ratio, which is currently among the lowest of the Canadian provinces.

Core Business: Financial and Economic Performance and Analysis.

Key Strategies

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/03 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Achieve annual targets for provincial budget	$1.299 B deficit	$3.199 B deficit	$1.339 B deficit	Balanced Budget ($100 M surplus)	$2.6 billion surplus	$2.5 billion surplus
Selection Rationale: Government's ability to achieve balanced budgets requires adherence to specific budget targets. Financial and Economic Performance and Analysis (Treasury Board Staff) worked closely with the respective ministries' executives on an on-going basis to monitor progress in meeting the approved spending and revenue targets.
Variance information: Actual results for 2004/05 exceeded the budgeted surplus of $100 million by $2.5 billion. The target was exceeded due to a number of factors including strong economic performance, higher than budgeted commodity prices, increased federal transfer payments and improved net incomes of commercial Crown corporations.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Debt to GDP Ratio (Provincial ranking — Moody's)	2nd Lowest	2nd Lowest	2nd Lowest	In the Lowest 3	2nd Lowest	On Target
Selection Rationale: Maintaining a relatively low taxpayer-supported Debt-to-GDP ratio signifies a healthy balance sheet and means affordable debt levels. Rating agencies rely on this balance-sheet measure as one among a number of important credit rating considerations.
Variance information: The target was exceeded due to reduced debt levels and a relatively strong economy. BC ranked second lowest amongst the provinces led only by Alberta.

Note — See provincial comparisons of Taxpayer supported Debt as a percentage of GDP in Appendix 5.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Debt service costs (Provincial ranking — Moody's)	2nd Lowest	2nd Lowest	2nd Lowest	2nd Lowest	2nd Lowest	On Target
Selection Rationale: A relatively low ratio of taxpayer-supported debt service cost to taxpayer-supported revenues or "interest bite" demonstrates fiscal prudence and an affordable debt burden. Rating agencies rely on this measure as one among a number of important credit rating considerations. For every dollar of revenue that the government collects, Moody's estimated in May 2005 that as of March 31, 2005 approximately 6.0 cents goes towards debt service costs. Moody's cites low interest costs relative to revenue as a positive factor in reviewing the province's financial statements.
Variance information: The target was achieved. BC ranked 2nd lowest in terms of debt service costs as a percentage of revenue among the provinces, led only by Alberta. The province's strong performance was explained by revenues from a strong economy combined with a reduced debt burden and relatively low interest rates.

Note — See provincial comparisons of the Ratio of Taxpayer Supported Debt Service Costs to Taxpayer Supported Revenues in Appendix 5.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Provincial credit rating (Moody's)	Aa2	Aa2	Aa2	Aa2	Aa1	On Target
Selection Rationale: The interest rate paid by the Province when it borrows in the domestic and international capital markets is influenced by the credit ratings supplied by third party agencies. In determining a credit rating, agencies consider the borrower's ability to promptly pay the interest and principal due based upon the borrower's balance sheet and income statement.
Variance information: Moody's Investor Service upgraded BC's rating to Aa1 in March 2005 citing the government's consistent achievement of fiscal targets, reduced debt burden, and tax and regulatory changes that strengthened the economy This is the first time since 1989 that Moody's has increased the province's credit rating, and it moves BC to the second-best rating among the provinces. Two other major credit rating agencies also upgraded the province's credit rating during fiscal 2004/05: Standard & Poor's to AA and Dominion Bond Rating Service to AA.

Objective 1.2: Effective cash and debt management.

In 2004/05, government managed cash flows totaling more than $100 billion. Debt service cost for the total provincial debt in 2004/05 is estimated to be $2.145 billion. Of this amount, $677 million relates to government operating debt. Accordingly, improvement in the oversight and delivery of cash and debt management on behalf of all government and client programs offers an important opportunity to reduce costs and redirect resources to priority services.

Core Business: Treasury.

Key Strategies

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Total cost of provincial debt portfolio versus benchmark	N/A	N/A	Under Development	Exceed Benchmark Performance	Benchmark 4.68% per year Province 4.53% per year	15 basis points
Selection Rationale: The total cost of the portfolio reflects the cumulative effect of all decisions made by Treasury (Debt Management Branch) in managing the provincial debt. Comparison of the performance of the provincial debt portfolio with the Risk Committee's benchmark portfolio provides a measure of the value and effectiveness of the debt management services.
Variance information: The performance of the provincial debt portfolio is largely dependent on two factors: foreign currency exposure and interest rate exposure. With respect to foreign currency exposure, 4.5 per cent of the provincial debt portfolio is composed of Japanese yen liabilities, and the portfolio performed well relative to the benchmark as the Canadian dollar outperformed the yen. With respect to interest rate exposure, the provincial debt portfolio did not perform as well relative to the benchmark, as it held longer-term debt than the benchmark and was unable to take full advantage of falling interest rates. The foreign currency outperformance out-weighed the interest rate underperformance, for a net outperformance of 15 basis points.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Banking costs versus industry and public sector benchmark	N/A	N/A	25% Lower	25% Lower	19% lower than benchmark	6 percentage points lower
Selection Rationale: The Province administers and negotiates fees for approximately 1,300 bank accounts on behalf of numerous public sector organizations. Effective management of these accounts will reduce administrative costs and allow those resources to be dedicated to the delivery of programs and services. The benchmark is based on an independent survey of bank fees paid by similar size organizations for similar services.
Variance information: The provincial government, in common with most institutional clients of financial services, experienced fewer opportunities to reduce costs as long cycles of cost reductions coupled with financial industry restructuring has resulted in a diminished opportunity for savings. Traditional savings resulting from negotiated and discount pricing have been curtailed as financial institutions refine product costing and consolidate back-end processing. Looking to the future, the ministry expects to minimize impact of future pricing increases through an on-going re-tendering of banking business.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Opportunity cost of holding non-zero cash balances	N/A	N/A	<$300k	<$300k	$205,440	$94,560
Selection Rationale: If the Province leaves surplus cash in its bank accounts, it earns less interest than if it placed the surplus in overnight investments. Conversely, if the province is in overdraft, it pays more in overdraft fees than it earns in its short-term investments. On a daily basis, Provincial Treasury tracks anticipated cash flows and closely monitors bank balances, then either invests the surplus to maximize interest earnings or borrows to fund the overdraft to minimize overdraft expenses. However, not all cash flows can be accurately forecast, and the province's bank accounts may be in surplus or overdraft on any given day.
Variance information: Positive performance due to enhanced cash management techniques and careful monitoring of the Province's financial position on a daily basis. Specifically, intelligence on client cash balances was improved through better coordination and communications, and enhancement of the Cash Flow Forecasting System to record the daily cashed cheques specific to each ministry.

Objective 1.3: Effective management of public-sector labour relations and human resource strategies.

Compensation costs are a significant component of the provincial budget. Accordingly, effective management of the provincial fiscal plan requires the establishment of appropriate and sustainable compensation levels. Labour market analysis and frameworks are also critical for attracting and retaining those highly-skilled workers that remain critical to the delivery of many public services.

Core Business: Public Sector Employers' Council.

Key Strategies

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Compensation cost changes over 2002/03 compensation base	N/A	$17.43 B	$16.09 B	$16.09 B	$16.023 B	($0.067 B)
Selection Rationale: Incremental changes in compensation cost are an indicator of government's ability to control costs and continue to provide vital services. An understanding of compensation cost changes also provides a basis for comparison with the private sector labour market and the growth of the provincial economy.
Variance information: Lower health sector compensation costs were due to savings from new collective agreements for the Community and Facilities subsectors. Lower Crown corporation compensation costs were due to operations at BC Rail and PNE no longer being part of the provincial public sector. These savings were partially offset by increases in the colleges and institutes and universities sectors due to increased capacity rather than increased collective agreement settlement costs.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Days lost due to labour disruption in the BC Public Sector (per employee over a three-year rolling average)	105% higher than the Canadian average — 0.634 days lost per Public Sector worker	30% higher than the Canadian average — 0.584 days lost per Public Sector worker	5.7% higher than the Canadian average — 0.448 days lost per Public Sector worker	+/-10 % of Canadian average	5.3% higher than the Canadian average — 0.641 days lost per Public Sector Worker	5.3% is within the target of +/-10% of the Canadian average
Selection Rationale: Days lost due to labour disruptions from strikes or lockouts is a measure of the stability of the public sector labour relations climate. A stable public sector labour relations climate contributes to a favourable external analysis of the investment climate of a jurisdiction. These results exclude the federal public sector.
Variance Information: While BC's actual days lost per employee was higher in 2004/05 than in 2003/04 (largely due to a strike in the health sector) the overall Canadian average was also higher.

Goal 2: Creating a tax and regulatory climate that stimulates economic growth.

The Ministry of Finance continues to play a critical role in the development of a healthy investment climate in the province. Specifically, the ministry is responsible for delivering on the government's commitment to establish a competitive tax environment to support business development and investment. Initiatives that the ministry has undertaken to improve the province's business climate include:

In addition to the tax cuts focused on increasing business investment, the ministry has also delivered on the government's promise to reduce personal income taxes and ensure the personal tax burden of British Columbians is among the lowest in the country.

The ministry also supports the government's goal of reducing regulation and red tape, thereby making it easier and more attractive for business to locate and invest in the province. Ministry initiatives include:

Objectives

Objective 2.1: Establish a tax environment that encourages economic growth.

The competitiveness of the taxation environment is a critical consideration for businesses and individuals in deciding whether to invest in the province. Jurisdictions with high tax regimes fail to attract or retain investment. As a result, their economic growth is limited and they forego the resulting additional revenues that sustain government services such as health and education.

Core Business: Financial and Economic Performance and Analysis.

Key Strategy

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Provincial ranking of personal income tax rates for the bottom two tax brackets	Lowest	Lowest	Lowest	Lowest	Lowest	On target
Selection Rationale: This performance measure stems from the Government's New Era commitment to cut the base personal income tax rate to the lowest rate of any province in Canada for the bottom two tax brackets on the first $60,000 of income. Keeping these tax rates low is consistent with the objective of maintaining a competitive tax system that encourages investment and innovation.
Variance Information: This target was achieved.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Provincial ranking of the top personal marginal tax rate	In the Lowest 2	In the Lowest 3	In the Lowest 3	In the Lowest 3	2nd Lowest	On target
Selection Rationale: Comparison of provincial top marginal personal income tax rates is a key component in the decision-making processes of investors, in choosing where to invest, and of firms in choosing where to locate.
Variance Information: This target was achieved.

Objective 2.2: Support business development and investment.

An important mechanism to promote investment and innovation in the province is the creation of an efficient and effective regulatory and policy framework. Unnecessary regulatory requirements increase the cost of doing business in the province resulting in wasted time and effort for both individuals and businesses. Alternatively, streamlined legislative and policy frameworks supported by the electronic delivery of services can improve investor and consumer protection while acting as a driver for further business development and investment.

Core Business: Financial and Corporate Sector Services.

Key Strategy

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Number of regulatory requirements (2004/05 target is a 1/3 reduction from 2001/02 baseline of 41,382)	41,382	34,706 (-16%)	28,194 (-31.9%)	27,700 (-33%)	23,646 (-43%)	(-4,054) 10 percentage points
Selection Rationale: Regulatory burden is a key consideration for individuals and firms considering whether to invest in the Province. Reducing red tape by eliminating unnecessary regulations improves the competitiveness of British Columbia's business environment and contributes to its economic growth. An important indicator of the overall regulatory burden on business is the number of regulatory requirements.
Variance Information: Implementation of the Real Estate Services Act and the Real Estate Development Marketing Act resulted in significant reductions in the ministry's regulatory count.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Per cent annual growth in business registrations	1.7% (43,304)	12.6% (48,767)	5.4% (51,401)	5% (53,622)	4.4% (53,304)	-0.6 percentage points (-318)
Selection Rationale: An increase in the number of businesses operating in the province is an indicator of the Government's success in creating a tax and regulatory climate that stimulates economic growth.
Variance Information: Growth in company registrations was 8%. This was offset by no growth in the registration of partnerships and proprietorships. Registries' data on newly-created partnerships and proprietorships is not complete because such entities do not always register unless required to do so by third parties.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Percentage of company incorporations and registrations filed electronically	71%	77%	84.1%	90%	95%	5%
Selection Rationale: The transfer of paper-based registration and filing to electronic self-service over the Internet improves customer service at reduced costs. Registering parties are able to complete their transactions when they require it, pay for the service and obtain confirmation all in real time. Among the services offered electronically were the incorporation of companies through Corporate Online, beginning in April 2004. This is in addition to the registration of partnerships through OneStop, plus corporate filings, encumbrances (liens) on personal property and ownership and location of manufactured homes in the province, all through BC Online.
Variance Information: The expansion of the Registries' electronic service delivery model, namely Corporate Online and One-Stop resulted in an increase in electronic filings.

Goal 3: Effective and efficient financial and risk management.

The Ministry of Finance continues to be responsible for government's overall financial and risk management framework. This involves the establishment of appropriate legislation, policies, procedures and training and reporting at a corporate level to ensure the province's resources and obligations are appropriately managed in support of effective service delivery. The framework reinforces individual and corporate accountabilities for outcomes, maintains the corporate standards for stewardship of resources, management of liabilities and risk, and the collection and disbursement of public funds.

Key activities included financial, procurement and accounting policy development, internal audit and advisory services, risk management, and compliance monitoring.

Objectives

3.2 Improve the government-wide accountability and responsibility framework for financial and procurement management.

Objective 3.1: Implement a risk-based approach to managing government resources.

Creation of risk-based frameworks that reinforce individual and corporate accountabilities provide opportunities to reduce unnecessary constraints, realize efficiencies and improve outcomes for the ministry and government as a whole. Risk-based practices are adopted only if they can demonstrate consistency with government priorities and add value using an optimal mix of resources and funding.

Core Business: Risk Management; Financial Governance, Accounting and Reporting; and Executive and Support Services.

Key Strategies

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Annual savings from self-insurance (five-year rolling average)	N/A	$30.1 million	$43.1 million	$35.4 million	$47.5 million	$12.1 million
Selection Rationale: The Ministry of Finance's coordination of public sector self-insurance programs allows the provincial government to cost-effectively retain selected risks rather than transfer them at a premium to third parties. Self-insurance involves government assuming the role of a traditional insurer by investigating, defending and paying claims. Since 1986 self-insurance programs have saved the province more than $600 million. These cost savings allow participating ministries, hospitals, health care agencies, school boards and social service agencies to direct their resources instead to the delivery of core services.
Variance information: Private insurance costs have increased significantly over the past two years, reflecting the cyclical nature of the insurance industry and lower returns on investments. The self-insurance program has not experienced the same cyclical downturn and as a result has generated savings in excess of the target.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Potential average annual benefits realized from utilizing a risk-based approach for post-payment monitoring of expenditures and by management implementing Internal Audit and Advisory Services recommendations	N/A	$5.7 million	$13.8 million	$5.2 million	$24 million	$18.8 million
Selection Rationale: The target is to recover the operational costs of Internal Audit and Advisory Services ($4 million) plus approximately $1.2 million for the activities of post-payment monitoring.
Variance Information: The actual savings vary from year to year, but the potential savings identified in fiscal 2004/05 audits total $22.8 million, plus the savings of $1.2 million from post-payment reviews for a total of $24 million. These potential savings exceed the targeted savings from conducting internal audit reviews by $18.8 million.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Ministry implementation of Enterprise-wide Risk Management (Risk Management Maturity Model Rating - 5 point scale)	N/A	N/A	2	3	3	On target
Selection Rationale: The Risk Management Maturity Model has been selected by Risk Management as the standard cross-government tool for evaluating the implementation of Enterprise-wide Risk Management within an organization. The instrument uses a five-point scale (1 lowest and 5 highest) to explore aspects of: • Organizational Philosophy and Culture • Risk Management Leadership and Commitment • Integration with Other Management Practices and Systems • Risk Management Capabilities • Reporting and Control
Variance Information: High performing organizations with well established risk management regimes have consistently found that the transition to higher levels of maturity requires time and commitment. Over the past year, the ministry has taken a number of steps, including strategic and operational risk assessments and development of the Integrated Planning Framework, to support this transformation and remains on track to achieve its intended outcome of a strong risk-based culture, process and organizational capacity.

Objective 3.2: Improve the government-wide accountability and responsibility framework for financial and procurement management.

The accountability and responsibility framework is a key management control that is increasingly important as risk-management techniques are employed government-wide. It is critical that both financial and program managers are familiar with their responsibilities for effective financial and procurement management.

Core Businesses: Financial and Procurement Governance, Accounting and Reporting.

Key Strategy

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Stakeholders' satisfaction with the policy framework for financial and procurement management	N/A	N/A	Determined Baseline at 44%	Exceed Baseline Performance	60%	16%
Selection Rationale: Government is transitioning from a control framework based on "command and control" to one based on performance measurement and personal accountability for results. This has resulted in a significant reduction (70%) in the volume of core policy related to financial and procurement management. Ensuring that the policy framework provides sufficient guidance to managers while avoiding an overly prescriptive approach is essential. Accordingly, survey results from managers and other stakeholders will provide information for improving the framework and its implementation.
Variance information: 2003/04 actual based on client satisfaction with the financial management policy area only. The procurement policy was only recently established in 2003/04 and it was too soon to survey it. The fiscal 2004/05 actual is an average of the financial policy area (57%) and the procurement policy area (62%) based on the June, 2004 survey. Key areas of improvement include maintaining policy on a timely basis, streamlining processes and providing complete and timely advisory services to ministries.

Goal 4: Comprehensive, timely and transparent financial planning and reporting.

Government adhered to its legislated commitment to fully comply with Generally Accepted Accounting Principles (GAAP) beginning April 1, 2004. British Columbia is a leader among the provinces in this regard. Financial results and updated forecasts as compared to the budget are publicly reported quarterly and annually in accordance with legislated dates. Accounting practices, policies and procedures are developed and maintained in order to support the accuracy, completeness, timeliness and reliability of these reports. Accounting advice and assistance is provided on new initiatives, existing business operations and systems development.

Objectives

4.1 Compliance with statutory reporting and budgeting requirements and with Generally Accepted Accounting Principles (GAAP) in all material respects.

4.2 Increase transparency and accountability for both expenditures and revenues.

Objective 4.1: Compliance with statutory reporting and budgeting requirements and with Generally Accepted Accounting Principles (GAAP) in all material respects.

Generally Accepted Accounting Principles for senior governments form the basis of government's accounting practices. These principles continue to be developed by the Public Sector Accounting Board, requiring that the ministry be cognizant of emerging changes and be able to apply them. The Public Accounts for fiscal 2004/05 are the first set of annual statements that are fully compliant with GAAP and without a reservation by the Auditor General.

Core Business: Financial Governance, Accounting and Reporting; and Financial and Economic Performance and Analysis.

Key Strategies

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Full implementation of GAAP	Partial	Partial	Partial	Full	Full	On target
Selection Rationale: Full implementation of GAAP by 2004/05 meets a legislated requirement in the Budget Transparency and Accountability Act. Implementation places British Columbia among the leading provincial jurisdictions in Canada to be compliant with the standards established by the Public Sector Accounting Board.
Variance Information: GAAP was fully implemented for the 2004/05 Public Accounts issued on June 29, 2005.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Delivery date for annual Public Accounts	July 11, 2002	June 27, 2003	June 29, 2004	June 30, 2005	June 29, 2005	On target
Selection Rationale: Timely release of financial reporting is critical for effective use of the information and helps instill public confidence in government's ability to manage its resources. The Budget Transparency and Accountability Act requires release of the Province's financial statements (Public Accounts) by August 31st, following each March 31st, fiscal year end. While the legislated date is August 31st, the targeted release date is June 30th.
Variance Information: The Public Accounts and the Ministerial Accountability Report required under the Balanced Budget and Ministerial Accountability Act (BBMAA) for fiscal 2003/04 were released on time on June 29, 2004. This is one of the earliest releases of financial information of the provinces reporting.

Objective 4.2: Increase transparency and accountability for both expenditures and revenues.

Government remains committed to demonstrating the value generated by the resources its receives from the public. Establishing the linkages between the Estimates , ministry budgets and the activities of related core business areas are critical for understanding the products and services public funds support. Over the past year, the ministry has played an important role in creating these linkages allowing for on-going evaluations of program cost-effectiveness and potential opportunities for improvement.

Meaningful transparency and accountability also requires that the ministry provide members of the public with timely responses to their inquiries. Frequently, public inquires require the input of specialized areas of the ministry and all public correspondence is treated as a matter of priority.

Core Business: All.

Key Strategies

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Percentage of responses to ministerial correspondence completed within two weeks	15%	40%	29%	80%	22%	58 percentage points
Selection Rationale: Achieving the ministry standard of completing minister's correspondence within a two-week period ensures correspondents receive timely and relevant information.
Variance Information: Due to the nature and complexity of most inquiries and significant workloads across the ministry, during peak periods of the budget development and Public Accounts processes, a significant proportion of the responses to ministerial correspondence did not meet the timeline standard. A review as to how the minister's correspondence can be better managed, and timelines met will be conducted in 2005/06.

Goal 5: A progressive, innovative and knowledgeable workforce.

The ministry recognizes that the accomplishment of each of our ministry goals was dependent upon the continued support and professionalism of a highly skilled and knowledgeable workforce. It was ministry staff that drove the quality and value of the services we provided to our clients, stakeholders and the people of British Columbia.

In keeping with the government's Public Sector Renewal Initiative, the ministry continued to identify opportunities to enhance leadership, support and developmental opportunities for staff.

Proactive and visionary leadership was promoted at all levels of the organization. Employees were actively involved and participated in Human Resource Management Planning activities.

As a result of these efforts, our clients and stakeholders benefited from a progressive, innovative and knowledgeable workforce. The outcomes included efficient, effective staff, with a clear sense of pride and purpose, serving satisfied clients.

Objectives

Objective 5.1: Proactive and visionary leadership.

The ministry actively encouraged leadership at all levels of the organization so that all employees in the ministry were provided with opportunities to develop their expertise and gain the necessary qualifications to perform well in their current positions, and to support individual career goals. This objective recognized that not everyone aspires to advancing to a leadership role, however, employees had opportunities to develop in new and different areas and the ministry supported and encouraged these opportunities.

Core Businesses: All.

Key Strategy

Performance Measures and Results

Note — the performance measure results for 2004/05 are based on an employee engagement survey conducted during November 2004. Therefore, the actions taken during the second half of 2004/05 to improve Human Resource Management are not reflected in the November 2004 survey results.

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Percentage of staff satisfied that leadership learning and development strategies and/or opportunities are available	N/A	49%	55%	70%	49%	-21 percentage points
Selection Rationale: Providing employees with leadership learning and development strategies and/or opportunities offers members of the ministry important avenues for personal and professional development. These opportunities also benefit the ministry through increased staff capacity and retention.
Variance information: Leadership and development strategies have been encouraged and promoted within the Ministry, however, supply of leadership development courses doesn't appear to be meeting the demand. Many employees remain on waiting lists. The Ministry of Finance is working with the BC Public Service Agency to identify staff training requirements and improved delivery opportunities to ensure an adequate supply of courses and opportunities are available.

Objective 5.2: Performance-focused workforce.

The goals, objectives and key strategies outlined in the ministry's annual service plan provided the basis for all of the ministry's work. Accordingly, the creation of linkages between the day-to-day activities of staff and the strategic direction of the ministry were critical for the delivery of effective and results-oriented services. Staff members reaffirmed the importance of that effort. They were provided with detailed information on how their work contributed to the success of the ministry and clarified how their results supported greater job satisfaction and promoted organizational improvement.

Core Businesses: All.

Key Strategies

Performance Measures and Results

Performance Measure

2001/02 Actual

2002/03 Actual

2003/04 Actual

2004/05 Target

2004/05 Actual

2004/05 Variance

Percentage of staff with a current Employee Performance and Development Plan (EPDP)

N/A

23%

67% of managers

100%

58% completed

35% in progress

-7 percentage points

Selection Rationale: Staff EPDP's provide an important linkage between the activities of individuals and the strategic direction of their business unit and the ministry as a whole. Identifying performance expectations within EPDP's also supports greater accountability and improves communication between staff and supervisors. The EPDP exercise also provides staff with opportunities to explore their personal growth and development objectives.

Variance information: The Ministry has promoted EPDP's and provided related training and education for employees and management. Since many staff are going through the EPDP process for the first time, it continues to be a learning process and takes more time.

Objective 5.3: Learning and innovative organization.

Given the pace of change in both the private and public sectors the ministry encouraged a management and operating culture that embraced new ideas and ways of doing business. Members of the ministry were provided with opportunities to accept appropriate levels of risk, to innovate and to change. This cultural shift relied upon open communication with staff, mutual trust and the development of new skills and non-traditional learning opportunities.

Core Businesses: All.

Key Strategy

Performance Measures and Results

Performance Measure	2001/02 Actual	2002/03 Actual	2003/04 Actual	2004/05 Target	2004/05 Actual	2004/05 Variance
Percentage of staff who agree that learning and development opportunities are accessible	N/A	66%	44%	75%	62%	-13%
Selection Rationale: Providing staff with on-going learning and development opportunities will enhance the quality of service and improve staff retention.
Variance information: Training and development opportunities were available, however due to work pressures, some employees either postponed or cancelled their training to meet operational requirements. The Ministry is working with the BC Public Service Agency to expand training offerings with due regard to ministry work cycles around preparation of the budget and public accounts.

Deregulation

The province's three-year deregulation initiative was fully implemented by December 31, 2004. The Ministry of Finance reported a 43 per cent net reduction in regulatory requirements by the end of the 2004/05 fiscal year.

Looking forward, ministries have been asked to look for ways to modernize the regulatory system and, in doing so, maintain a zero net increase in regulatory requirements, based on the new streamlined regulatory requirement count. We will continue to make improvements in our regulations, ensuring that we regulate in the most cost efficient and effective manner possible.