Report on Performance

Overview of Ministry Goals and Linkage to
Government Strategic Goals

The ministry supports the Five Great Goals by creating a strong economy and balanced budgets; thereby, providing the means to develop excellence in education, promote healthy living, support people at risk, protect our environment and create jobs for British Columbians. The figure below illustrates how the ministry's goals and objectives are aligned with, and contribute to, the success of government's Five Great Goals.

Performance Plan Summary Table

Synopsis of Ministry Performance Measure Results

1 The Five Great Goals are:
1.	Make British Columbia the best educated, most literate jurisdiction on the continent.
2.	Lead the way in North America in healthy living and physical fitness.
3.	Build the best system of support in Canada for persons with disabilities, those with special needs, children at risk, and seniors.
4.	Lead the world in sustainable environmental management, with the best air and water quality, and the best fisheries management, bar none.
5.	Create more jobs per capita than anywhere else in Canada.

Goals, Objectives, Strategies and Performance Measures

Ministry Goal 1

Maintain a balanced budget annually.

The Balanced Budget and Ministerial Accountability Act requires that all provincial budgets must be balanced (i.e., either a positive surplus or zero balance; budget deficits are prohibited). This requirement supports sound fiscal management and is a cornerstone in maintaining confidence in British Columbia's economy as well as providing a stable foundation on which to sustain and enhance the delivery of public services. It supports a strong and vibrant economy and provides the means to develop excellence in education, promote healthy living, support people at risk, protect our environment, and create jobs for British Columbians. Fiscal responsibility today means that the cost of current public services will not be passed on to future generations.

Objective 1. Effective management of government's fiscal plan.

Core Business Area: Financial and Economic Performance.

Development and maintenance of a prudent and resilient fiscal plan is critical to government's ability to balance the provincial budget annually. The ministry plays a critical role in overseeing the fiscal plan and works closely with ministry and other public sector partners to ensure that government's annual and three-year revenue and expenditure targets are met.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. full integration of Crown corporations and the schools, universities, colleges and hospitals (SUCH) sector into the fiscal planning process:

a. the fiscal planning process in 2005/06 included the establishment of revenue and expenditure targets for Crown corporations and SUCH sector agencies.

2. continual update of government's three-year fiscal plan including monitoring and corrective action as required:

a. the ministry prepared a three-year fiscal plan, which government tabled in the Legislature on February 21, 2006. This plan included projected surpluses of $600 million in 2006/07, $400 million in 2007/08 and $150 million in 2008/09.

Performance Measures

Note: See provincial comparison of taxpayer supported debt as a percentage of GDP in Appendix 5.

Note: See table of comparative provincial credit ratings in Appendix 5.

Ministry Goal 2

A tax and regulatory climate that supports a strong and vibrant economy.

The Ministry of Finance plays an essential role in the creation and maintenance of a tax and regulatory climate that supports economic development and employment opportunities. The ministry continuously reviews provincial tax policies, including business tax policies, to ensure the province remains competitive. Since 2001, the ministry has delivered a series of tax reductions targeted to individuals and businesses. These initiatives include a 25 per cent reduction in personal income taxes ensuring individuals in the bottom two-tax brackets now have the lowest personal income tax rates in the country. The province has also introduced an 18 per cent reduction in the general corporate income tax rate, eliminated the capital tax for general corporations and provided an exemption from provincial sales tax for production machinery and equipment. Other more targeted initiatives include property tax relief for small hydroelectric projects and the province's major port operators, new incentives for digital animation and visual effects and an increase in the threshold for the small business tax rate. As a result of these steps, the province's businesses can now rely on a tax environment that allows them to compete and succeed on the international stage while creating jobs at home.

The ministry will continue to reduce unnecessary regulation and red tape in the province to improve the effectiveness of regulatory frameworks and strengthen consumer confidence. The ministry is undertaking a broad review of the Insurance Act, which sets out statutory requirements applying to contracts of life insurance and of property and casualty insurance (such as for fire and liability), other than automobile insurance. Other initiatives include an expansion of e-government that will improve service, expand accessibility and reduce cost.

Objective 1. A fair and competitive tax environment.

Core Business Area: Financial and Economic Performance.

The province's ability to develop a strong and vibrant economy is dependent upon having a tax environment that is competitive both nationally and internationally. Jurisdictions with competitive tax regimes and regulatory frameworks are successful in attracting and retaining personal and business investment. Taking advantage of these opportunities enhances economic development and increases the revenues available to support critical government services like health care and education. In addition, a tax system that is perceived to be fair increases the confidence of British Columbians in their government.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. ongoing review of the Province's tax system in comparison to other jurisdictions

a. Budget 2006 included a number of announcements / changes directed at maintaining and improving competitiveness:

i. Enhanced dividend tax credit;

ii. extension of B.C. Mining Flow-Through Share Tax Credit;

iii. extension of enhanced film tax credit rates to 2008;

iv. new provincial sales tax (PST) exemption for services to maintain or modify software;

v. expansion of PST exemption for production machinery and equipment;

vi. increase in motor vehicle surtax threshold to $55,000;

vii. expansion of eligible uses of lower-taxed coloured fuel;

viii. allocation of $90 million over three years for new training and skills development tax credits; and

ix. increase in budget for venture capital programs.

2. analysis of potential reforms to maintain and improve competitiveness

Performance Measures

Objective 2. Efficient and effective financial and corporate regulatory frameworks and services that protect the public interest.

Core Business Area: Financial and Corporate Sector Services and Financial and Economic Performance and Analysis.

An efficient and effective regulatory and policy framework promotes investments and innovation in the Province. Unnecessary regulatory requirements increase the cost of doing business in the province resulting in wasted time and effort for both individuals and businesses. Conversely, streamlined legislative and policy frameworks supported by the electronic delivery of services can achieve the same outcomes while acting as a driver for further business development and investment and continuing to foster consumer confidence.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. updating and implementing new legislative frameworks for streamlined financial and corporate sector regulation

a. the ministry continued its work to complete the new legislative framework for auto insurance, including technical amendments to Bill 93, the Insurance (Motor Vehicle) Amendment Act, 2003 that were passed during Spring 2006 legislative session.

b. in 2005/06, a broad review of the Insurance Act was initiated to modernize legislation that has not been updated for many years. Other provinces have indicated that they will be monitoring our review so that they may consider adopting harmonized provisions. This will be a major contribution to the updating of business framework law in B.C. and Canada.

c. new legislation was passed in the Spring 2006 legislative session to provide limited liability, similar to that available to shareholders of corporations, for investors in publicly traded income trusts. This will bring B.C. into line with Alberta, Manitoba, Ontario and Quebec, all of which have adopted this type of protection for investors in income trusts.

d. following the completion of a number of major policy reviews that were conducted from 2002 to 2004, the ministry also monitored the post-implementation phases of several new or substantially revised pieces of legislation, resulting in technical amendments to the Real Estate Services Act, Real Estate Development Act, Financial Institutions Act, Credit Union Incorporation Act and the Business Corporations Act.

e. legislation was also developed in consultation with other provinces for a uniform Securities Transfer Act based on the Uniform Law Commission's model statute, with consequential amendments to the Personal Property Security Act, Business Corporations Act and other statutes. This legislation, once enacted, will provide a sound legal foundation for the holding and transfer of security instruments, consistent with international recommendations and the legal rules currently in place in the United States.

f. ministry staff continues to monitor issues relating to private pension plans, and is developing strategies to address emerging policy issues.

g. ministry policy and Registries staff played a key role in negotiating terms under the newly ratified Alberta-British Columbia Trade, Investment, and Labour Mobility Agreement to streamline business registration and reporting requirements.

2. expansion of electronic service delivery initiatives

a. more than 98 per cent of estimated companies in British Columbia successfully filed a transition application by the March 28, 2006 deadline, as required under the Business Corporations Act.

b. the Corporate Online system was enhanced to allow for email notification of several filings to reduce the burden on businesses. First introduced in 2004, Corporate Online is nearing its 1,000,000 electronic filing transaction.

c. 96 per cent of partnership and proprietorship applications are now completed electronically through the OneStop Business Registry, up from 73 per cent in 2004. OneStop is now available to businesses and the public online, 24 hours a day and seven days a week, and surpassed the milestone of 100,000 electronic business transactions.

d. OneStop Business Registry added four new business number partners, four new municipal partners and five new service delivery partners.

e. OneStop Business Registry successfully launched the BizPal initiative in partnership with the City of Kamloops, Whitehorse, the Yukon Government, Ontario's Halton Region and the Government of Ontario. Also, OneStop successfully found a permanent business owner for BizPal in the Ministry of Small Business and Revenue and began transition of this program.

Performance Measures

Ministry Goal 3

Effective financial and resource management and reporting.

The Ministry of Finance is responsible for government's overall financial and risk management framework. This involves the establishment of appropriate legislation, policies and procedures and reporting at a corporate level to ensure the Province's resources and obligations are appropriately managed in support of effective service delivery. This framework reinforces individual and corporate accountabilities for outcomes, maintains standards for stewardship of resources, management of liabilities and risk, and the collection and disbursement of public funds. Key activities include financial, procurement and accounting policy development, internal audit and advisory services, risk management, compliance monitoring and financial and economic reporting.

Objective 1. Effective risk-based cash and debt management.

Core Business Area: Treasury.

In 2005/06, government managed cash flows of approximately $100 billion. During the same year, debt service cost for the taxpayer supported debt portfolio was $1.5 billion. Ongoing improvement in the management of these cash and debt activities offers significant opportunities to reduce costs and redirect government resources to priority services.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. development of models and systems to maximize investment returns on surplus cash to minimize borrowing costs and requirements:

a. all three performance measures for cash management services were met. The opportunity cost of holding non-zero cash balances at each major financial institution was $256,249 (target is less than $300,000 annually); accuracy in forecasting consolidated cash position at each major financial institution was 76 per cent (benchmark is minimum 70 per cent accuracy); and, performance of the Province's money market fund as compared to Scotia Capital 30 day-T-Bill Index was matched at 2.6 per cent (target is to meet or outperform the Index).

b. converted to a new business banking platform for cash management and wire payment services (June 2005). The benefits realized include enhanced reporting and online access/viewing capabilities, and flexible payment setup and release options.

2. comprehensive support for credit rating analysis and investor relations activities:

conducted a Fall 2005 investor tour to Toronto and a spring 2006 investor tour to New York, Montreal and Toronto. Following the September Budget Update, the Second Quarterly Update released in November 2005, and the February 2006 Budget, an investor conference call was convened to brief investors on the fiscal and economic status of the Province. Following the February 21, 2006 Budget, day-long meetings were held with each of the three credit rating agencies: Moody's Investors Service, Standard and Poor's and Dominion Bond Rating Service. In March 2006, Standard and Poor's upgraded the Province's credit rating to AA+ from AA.

3. negotiation of banking services for government as a whole:

a. the ministry achieved competitive rates by leveraging economies of scale for banking services. In comparing banking fees charged to the Province against an industry survey (Stewart Associates), the ministry achieved 74 per cent of the industry average rate for general banking fees – 26 per cent lower than market.

b. the ministry migrated to a new debit and credit card processor (TD Merchant Services) and lowered fees payable during a period of increasing average credit card transaction size.

4. use of technological advancements (e.g., e-banking services) to create financial and administrative efficiencies and savings within ministries:

a. implemented nine e-payment services with client ministries in 2005/06, and launched a new refund enhancement for Internet payments, thus ensuring a secure and reliable refund process for credit card transactions.

b. implemented a new state-of-the-art straight-through-processing debt management system, replacing a number of legacy systems and spreadsheets. The new system significantly enhances the ability to manage the portfolio. It also significantly reduces the risk of errors, as data is entered once only, and is stored in a single database.

Performance Measures

Note: See provincial comparison of the ratio of taxpayer supported debt service costs to taxpayer-supported revenue in Appendix 5.

Objective 2. Enhance risk-based management of government's resources.

Core Business Area: Financial Governance, Accounting and Reporting and Risk Management.

Creation of risk-based frameworks that reinforce individual and corporate accountabilities provides opportunities to reduce unnecessary constraints, realize efficiencies and improve outcomes. 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.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. expansion of government's self-insurance program to the broader public sector:

a. transitioned assets of the former British Columbia Buildings Corporation into a self-insured program.

2. assistance with implementation of Enterprise-wide Risk Management (ERM) practices:

a. completed a risk culture survey across government.

b. piloted and implemented an ERM implementation workshop for ministries.

3. risk-based audit planning:

a. a risk-based approach is used in developing all ministry and cross-government corporate audit plans. The Deputy Ministers' Committee on Internal Audit ensures audit resources are focused in the value added areas.

4. oversight of a comprehensive post-payment review system targeting high-risk transactions:

a. a new statistical sampling methodology was implemented in April 2005. The Office of the Comptroller General conducts quarterly reviews of payments to employees and reimbursement of travel expenses. There are also monthly reviews of payments to vendors and, more recently, compliance with procurement policy. Work is underway to develop a system of computer-based, continuous on-going monitoring of controls.

Performance Measures

Objective 3. Transparent and accountable financial and procurement policies and practices.

Core Business Area: Financial Governance, Accounting and Reporting.

Government is undergoing transition to a model that provides program managers with enhanced financial and procurement decision-making abilities within a defined accountability framework. This shift provides managers with additional tools and accountabilities to succeed, and is supported by an updated public sector management frameworks. The ministry plays an important role in the development of these governance frameworks and works closely with other ministries to ensure appropriate clarification of roles, responsibilities and accountabilities.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. review of financial and procurement legislation:

a. work is underway to review and streamline financial management legislation including the Financial Administration Act, Budget Transparency and Accountability Act, Financial Information Act and the Balanced Budget and Ministerial Accountability Act(BBMAA). Amendments to the BBMAA were passed in the Legislature in May 2006.

2. maintenance of a principles-based policy framework:

3. input into the development of training resources:

a. work continues to develop the award-winning Procurement and Contract Management Training program. Thirteen courses of a total syllabus of 20 courses have now been developed and work continues on the balance.

4. training development and delivery were also undertaken for Executive Financial Officers. Work will continue to build training, based on recently updated financial management competencies, for the government financial community ongoing monitoring and reporting on ministries' compliance with the accountability frameworks:

a. the review work conducted by the Payment Review Office (PRO) and Internal Audit provides good measures of compliance. PRO conducts monthly reviews on some types of payments made by government and quarterly reviews on other types.

b. both PRO and Internal Audit conduct reviews on compliance with the procurement policy framework in conjunction with the Procurement Governance Office.

Performance Measures

Objective 4. Meet statutory reporting requirements and comply with GAAP in all material respects.

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

The Budget Transparency and Accountability Act (BTAA) requires that all accounting policies and practices applicable to documents required to be made public under this act (e.g., Budget and Public Accounts), must comply with Generally Accepted Accounting Principles (GAAP). Adherence to GAAP requires monitoring of evolving accounting standards, consistent financial practices across government and full transparency for the use of public funds. This transparency is critical for ensuring that British Columbians and the investment community obtain the information they need to make informed decisions and have confidence in government's finances.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. ongoing monitoring of, and adherence to, GAAP's evolving accounting standards:

a. the Office of the Comptroller General (OCG) consults with organizations that develop accounting standards for senior government and some of our staff volunteered to assist these organizations with their standard setting work. The Province also contributes to private sector GAAP where it could potentially impact government accounting. This fiscal year, OCG has provided comments to standard setting bodies on 10 exposure drafts pertaining to emerging policy.

b. Treasury Board Staff works with the Office of the Comptroller General to ensure Budgets and Quarterly Reports are GAAP-compliant.

2. adoption of technology to improve the reporting processes:

a. the Office of the Comptroller General has several years of experience in using Caseware for preparation of the Public Accounts. The Office of the Comptroller General continues to refine the use of this software, and build reporting templates to make it easier to accumulate data from B.C. government reporting entities and assemble the Public Accounts.

3. working with the Auditor General and the Accounting Policy Advisory Committee (APAC) on accounting and reporting issues:

a. the Office of the Comptroller General meets regularly throughout the year with Auditor General staff, and with increasing frequency as annual Public Accounts preparation gets underway. This is a useful process to better understand the position of each organization and avoid problem areas.

b. the APAC meets about four times annually or as required to discuss government accounting policy and GAAP issues. Their input provides government with an external non-binding view of issues.

4. greater fiscal planning integration with the SUCH sector:

a. the Office of the Comptroller General works closely with its SUCH Sector partners with respect to quarterly and annual financial reporting. Work continues on developing and improving reporting templates to help streamline preparation of the financial reports and statements.

Performance Measures

Objective 5. Crown corporations are publicly accountable to taxpayers both in the delivery of their programs and services and in fiscal management.

Core Business Area: Crown Agencies Secretariat

1. A Crown corporation is an organization that is established by the provincial government that is outside of a ministry. Crown corporations are accountable to the government through a Responsible Minister; and have assigned/delegated authority and responsibility from government, or otherwise have statutory authority and responsibility to perform specified functions or services. An effective governance system will aid both government and Crown corporations by ensuring Crown corporations focus on the activities necessary to fulfill their mandates while at the same time ensure they are being managed in the best interests of public stakeholders and government.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. ensuring an effective framework for government's management of its Crown corporations in British Columbia:

a. issued a summary of the Crown Agency Accountability System on CAS website.

2. clearly outlining government's expectations of Crown corporations through Shareholder's Letters of Expectations:

a. Developed an updated template for Shareholder's Letters of Expectation and coordinated development of new letters (see results below) and renewal of existing letters.

3. providing input on cross-Crown corporation policy issues:

a. Policy issues included responses to reports by the Auditor General and initiatives from the Public Sector Accounting Board on performance reporting.

4. hosting workshops for Crown corporation and ministry staff on governance and performance planning and reporting and hosting Chief Financial Officer forums for all Crown corporations to promote best practices:

a. Hosted senior officials from the New Zealand Crown Company Monitoring and Advisory Unit and the UK Shareholder Executive and arranged meetings with Crown Agency and government staff to disseminate best practices;

b. Hosted a joint Crown Agency-Government Forum to discuss governance, reporting and budget issues.

5. publishing on the government website Crown corporation Shareholder's Letters of Expectations, signed off by Ministers Responsible and the Board Chairs of Crown corporation:

a. Shareholder Letters for all but two Crown corporations and posted on the Crown Agencies Secretariat website.

Performance Measures

Objective 6. Effective management of public sector labour relations and human resource strategy.

Core Business Area: Public Sector Employers' Council

1. Public sector labour costs comprise a significant portion of the provincial budget. Accordingly, effective management of the Province's fiscal plan requires the establishment of appropriate and sustainable compensation levels. Labour market analysis and frameworks are also critical for attracting and retaining highly skilled workers critical to the delivery of many public services.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. maintenance of a compensation and bargaining mandate framework that incorporates fiscal goals, policy, program decisions, and labour market considerations".

a. The ministry set out a $6 billion, multi-year negotiating framework to guide public sector labour agreements. As of March 31, 2006 negotiators reached 55 agreements covering 75 per cent of British Columbia's 308,000 public sector workers. All agreements extended four years or more in duration and the vast majority received ratification approvals in excess of 90 per cent. Major components include:

• $1 billion as an incentive to reach new agreements before the expiry of current agreements;
• $4.7 billion over four year (2006/07 – 2009/10) for annual compensation increases; and
• up to $300 million dividend in 2009/10 for agreements that extend to March 31, 2010 or later, subject to the surplus exceeding $150 million.

2. A long-term strategy for effective management of labour relations that addresses shortages of critical skilled occupations in the public sector is also underway.

Performance Measures

Ministry Goal 4

A leader in innovative business and people practices.

The ministry recognizes its dependence upon the continued support and professionalism of our highly-skilled and knowledgeable workforce. Ultimately, it is our staff that drives the quality and value of the services we provide to our clients, stakeholders and the people of British Columbia. Over the coming years, the ministry will pursue additional opportunities to provide its employees with the support, recognition and opportunities required.

Core Business Area: All.

Objective 1. Performance Focused Workforce.

Core Business Area: All.

The ministry works closely with its staff throughout the year to provide them with information on strategic priorities and how their work contributes to the success of the organization overall. Staff have reaffirmed that this communication clarifies expected results, supports organizational improvement and provides greater job satisfaction.

Strategies

In 2005/06 the following key strategies were used to achieve the objective:

1. regularly scheduled Community Conversations involving all members of the ministry

a. a number of community conversations were held with ministry staff.

2. employee participation in ministry human resource planning initiatives

a. the Corporate Planning Secretariat developed the Ministry Human Resources Plan with employee input

3. integration of planning and reporting processes

a. the Corporate Planning Secretariat was convened in November 2005 and this group undertook all planning and reporting activities for the ministry. Activities have resulted in a more integrated Business Plan for 2006/07, as well as a more effective planning calendar.

b. the 2006/07 Human Resources plan was integrated into the ministry's overall Business Plan, and staff throughout the ministry were engaged in developing objectives, strategies and actions through Community Conversations and their Corporate Planning Secretariat representatives.

4. ongoing reviews of the linkages between the Service Plan and operational activities

5. the ministry is also working to develop personal Employee Performance and Development Plans (EPDP) tailored to the position and developmental interests of each employee

a. a tailored EPDP pilot was implemented in ministry, and will be considered for expanded implementation within the ministry.

Performance Measures

Objective 2. Learning and Innovative Organization.

Core Business Area: All.

Government's move to a model focused on flexibility, evidence-based risk taking, and accountability for results, requires the support of a knowledgeable and innovate workforce. Members of the ministry have embraced this shift and have fostered a culture characterized by performance and receptiveness to change. In order to build upon our past success, the ministry will actively encourage the development of new skills based on formal and non-traditional learning opportunities and mutual trust.

Strategies

In 2005/06 the following key strategies, with the noted results, were used to achieve the objective:

1. identification of critical competencies and targeted skill sets

a. a workforce planning exercise identified critical positions. This work will continue in 2006/07.

b. a skills development inventory, mentoring program and orientation program were rolled out.

2. improved communication of, and access to, developmental opportunities (internship programs, career pathing, mentoring, rewards and recognition programs, development opportunities and critical skills training)

a. the ministry supported staff in attending a variety of leadership development and training courses and programs. A ministry-specific leadership program is being considered for 2006/07.

b. ministry employees participated in a large number of Temporary Assignments, which promote cross-ministry learning and development.

c. informal learning and development opportunities, such as lunch and learns and cross-divisional sharing sessions, were offered.

d. the Graduate Development Program was established for Treasury Board Staff.

3. flexibility in accommodating interested staff.

Performance Measures

Deregulation

The Ministry of Finance's regulatory reduction rate reached 43 per cent with the implementation of the Real Estate Services Act and Real Estate Development Marketing Act on January 1, 2005.

The ministry's June 2004 baseline figure has been changed from 25,423 to 25,581 to reflect errors and omissions in the original regulatory count as well as the reassignment of statutes to different ministries following the May 2005 election. As of May 2006 the Ministry of Finance has realized a further 7.5 per cent regulatory reduction to 22,171 largely due to further changes to the Financial Institutions Act.

Over the next two years, all legislative initiatives will be monitored to ensure that the policies are effective and allow industry, the public, and government to operate in an improved environment of "smart regulation".