Departmental Performance Report for the period ending March 31, 2012 - Section 2

Section II: Analysis of Program Activities by Strategic Outcomes

2.1 Program Activities and Strategic Outcomes

Infrastructure Canada's Program Activity Architecture (PAA) has three Strategic Outcomes (SO) and 11 program activities in support of its mandate. The information presented in this section is organized according to Infrastructure Canada's PAA structure:

1)  Provinces, territories and municipalities have federal financial support for their infrastructure priorities.

Program Activities:

• Provincial-Territorial Infrastructure Base Fund
• Gas Tax Fund

2)  Funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a cleaner environment and liveable communities is provided.

Program Activities:

• Building Canada Fund-Major Infrastructure Component
• Building Canada Fund-Communities Component
• Canada Strategic Infrastructure Fund
• Green Infrastructure Fund
• Municipal Rural Infrastructure Fund
• Border Infrastructure Fund
• Economic Analysis and Research

3)  Construction-ready infrastructure projects are provided with federal funding support.

Program Activities:

• Infrastructure Stimulus Fund
• Building Canada Fund-Communities Component Top-Up

2.2 Strategic Outcome 1

Provinces, territories and municipalities have federal financial support for their infrastructure priorities.

Under Strategic Outcome 1, the Gas Tax Fund (GTF) and the Provincial-Territorial Infrastructure Base Fund (PT Base) continue to provide stable, predictable funding for jurisdictions and offer them significant flexibility in funding their core infrastructure priorities.

Lessons Learned for Section 2.2

Infrastructure Canada oversees the GTF through a program governance structure which includes federal-provincial-territorial management committees as well as internal multi-level committees. This approach has established the effective, efficient and consistent application of program policies and implementation across the country. Annual workshops provide the opportunity for Infrastructure Canada and GTF signatories to share program-related information, challenges, lessons learned and best practices. In addition to these discussions, the most recent workshop in March 2012 centered on moving towards program permanency.

The annual expenditure reports provided by recipients continue to demonstrate the effectiveness of the GTF in addressing the ongoing infrastructure needs of Canada's cities and communities, a benefit accruing from program design. The Department is continuing to work with partners to develop a streamlined data management system to strengthen the integrity of information and better account for the funds allocated to more than 3,600 municipalities over the past seven years.

An internal audit completed in June 2011 confirmed that the PT Base program's management control framework is adequate and effective. The audit noted examples of good management practices around accountability and risk management. This includes the documentation and communication of roles and responsibilities, eligible investment categories, as well as a risk management approach that is aligned to the design of the program. The audit also included references from stakeholders, which indicated support for this delivery model, highlighting the reduced reporting burden while maintaining an emphasis on compliance over the funding lifecycle.

Overall, these programs have demonstrated their ability to deliver results that support provincial-territorial-municipal priorities while at same time ensuring sound management.

2.2.1 Program Activity: Provincial-Territorial Infrastructure Base Fund

Predictable funding for Provinces and Territories

Program Activity Description: for Section 2.2.1

This program activity provides $175 million in base funding to each province and territory for core infrastructure priorities, balancing the Building Canada Fund's per capita allocations. Capital Plans outline infrastructure initiatives that support priorities in a given jurisdiction within the scope of eligible federal investment categories, including the construction or rehabilitation of infrastructure in most of the project categories eligible under the Building Canada Fund (BCF), including secondary provincial highway infrastructure. While payments are made to provinces and territories, ultimate recipients can also include local and regional governments or private sector bodies. The Fund provides a high degree of flexibility to provinces and territories. Payments are made in advance and provinces and territories may pool, bank, or cash-manage these funds in a manner that will afford them greater flexibility in implementing their Capital Plans. The Provincial-Territorial Infrastructure Base Fund was designed to help restore the fiscal balance while enhancing Canada's public infrastructure system, promoting enhanced competitiveness and productivity of the economy, cleaner air, water and land, and stronger and healthier communities. Federal funding, on a Capital Plan basis, is up to 50 percent in provinces and 75 percent in territories to maximize investment by all orders of government. All provinces and territories benefit from this investment in modern public infrastructure, particularly jurisdictions with smaller populations.

2011-12 Financial Resources (in $ thousands) for Section 2.2.1

Planned Spending	Total Authorities	Actual Spending
347,375	391,125	188,69512

2011-12 Human Resources (full-time equivalents [FTEs]) for Section 2.2.1

Planned	Actual	Difference
2	2	0

Program Activity Table for Section 2.2.1

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Recipient organizations have access to predictable funding from the Provincial-Territorial Infrastructure Base Fund to build and improve Infrastructure.	Actual spending in the last fiscal year as a result of agreements with partners.	Flow all 2011-12 planned spending to program recipients in accordance with program authorities.	$188.7 million (54% of planned spending)
Collaborative partnerships between the federal government and provinces exist as part of the Provincial-Territorial Infrastructure Base Fund so that recipients have access to funds.	Number of agreements signed.	Manage agreements with all 13 provinces and territories to accelerate programs.	13
Infrastructure Canada's funding and negotiations leverage investments in infrastructure by other partners, so that investments in infrastructure are made.	Amount of funding leveraged.	Number of dollars leveraged from other partners meets minimum program requirements in provinces (50% federal share)* and territories (75% federal share)**, to maximize infrastructure investments.	Provinces: 61.7% ($2.4 billion) Territories: 33% ($270.7 million)

* Implies 50% partner share
** Implies 25% partner share

Performance Summary and Analysis of Program Activity for Section 2.2.1

Since most provinces and territories chose to accelerate all or part of their PT Base funding in 2009-10 and 2010-11 as part of the Economic Action Plan, there was limited funding remaining to be committed in 2011-12. In this context, fewer Capital Plans were approved in 2011-12 than in the two previous years.

Overall, three new Capital Plans and two amended plans were approved during the year, committing another $179 million in federal funding to 30 new initiatives and leveraging almost $173 million in funding from other partners, including provinces, territories and municipalities. Also, an additional jurisdiction opted to fully commit the balance of its PT Base funds.

The Fund has committed $2.05 billion in federal investments as of March 31, 2012, representing almost 89 percent of the entire $2.3 billion PT Base allocation. An additional $2.68 billion in funding was leveraged from provincial and territorial partners.

As the Department signed the only remaining funding agreement in late 2010-11, the objective of concluding agreements with all jurisdictions is now achieved and the program is being fully implemented nationwide.

The Government of Canada flows funding to the jurisdictions once provinces and territories submit (and the federal Minister accepts) Capital Plans and/or Expenditure Reports. Lower than anticipated actual spending in 2011-12 reflected the fact that fewer Capital Plans and Expenditure Reports were submitted and accepted than planned. In some cases, final payments under the program were not made, pending submission of final reports from jurisdictions demonstrating that all of their PT Base initiatives have been completed. Delays in program implementation in one jurisdiction also delayed a payment.

2.2.2 Program Activity: Gas Tax Fund

Stable, Predictable and Long-Term Funding for Municipalities

Program Activity Description: for Section 2.2.2

This program activity provides municipalities with predictable long-term funding coupled with local decision-making to enable them to build and rehabilitate their core public infrastructure. Under this program activity, Canada has entered into Gas Tax Fund Agreements with provinces, territories, the Association of Municipalities of Ontario, the Union of British Columbia Municipalities and the City of Toronto. These agreements establish an accountability framework allowing Canada to flow Gas Tax Fund monies twice a year to signatories which in turn, flow funds to municipal recipients based on an agreed upon allocation formula. For their part, municipal recipients decide which projects to prioritize within established investment categories that contribute to shared national outcomes of cleaner air, cleaner water and reduced greenhouse gas emissions, and increase community capacities to undertake long-term planning. Municipalities can pool, bank and borrow against this funding, providing significant additional financial flexibility. Eligible recipients are required to report annually on their use of funds and their compliance to terms and conditions of the federal-provincial Gas Tax Fund Agreements. Budget 2007 added $8 billion in new funding and extended the Gas Tax Fund from 2010 to 2014, doubling it to $2 billion per year. Budget 2008 announced that the government will make it ongoing.

2011-12 Financial Resources (in $ thousands) for Section 2.2.2

Planned Spending	Total Authorities	Actual Spending
1,975,952	2,329,381	2,206,246

2011-12 Human Resources (FTEs) for Section 2.2.2

Planned	Actual	Difference
15	12	3

Results Achieved for Section 2.2.2

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Recipient organizations have access to stable and predictable funding to build and improve municipal infrastructure.	Amount of federal funding flowed to provinces and territories in 2011-12.	$2 billion	$2.2 billion
	Amount of Gas Tax funding spent by municipalities in 2010-11 on infrastructure.*	$1.4 billion	$985.6 million
	Total amount of Gas Tax funding spent contributing to building municipal infrastructure.**	$5.3 billion	$4.8 billion

* The performance indicator as cited in the 2011-12 RPP showed the "amount spent by municipalities in 2010-11 on infrastructure" and has been revised for clarity.
** The performance indicator as cited in the 2011-12 RPP showed the "total value of municipal infrastructure built in 2010-11" and has been revised for clarity.

Performance Summary and Analysis of Program Activity for Section 2.2.2

During 2011-12, Infrastructure Canada provided provinces, territories and municipalities with stable and predictable Gas Tax funding. This funding continued to help build and improve public infrastructure that contributes to cleaner air, cleaner water and reduced greenhouse gas emissions. On December 15, 2011, funding for the Gas Tax Fund (GTF) was made permanent, allowing municipalities to better plan for long-term investments in local infrastructure, supporting jobs and economic growth.

Throughout the year, Infrastructure Canada worked closely with provinces and territories to resolve outstanding issues with annual expenditure reports. The Department also continued to establish and enhance controls to effectively manage the program, and ensure recipient compliance with existing GTF requirements. The Department provided its annual Gas Tax allocations to partners, and also distributed $231.4 million of previously withheld funding to three jurisdictions (after receiving acceptable outstanding Annual Expenditure Reports). This brought the total amount of 2011-12 funding to more than $2.2 billion, exceeding the performance target.

Since inception in 2005, funding under this program has resulted in new and improved public transit, water, wastewater, solid waste, local roads and bridges, community energy systems and community capacity.

2.3 Strategic Outcome 2

Funding for quality, cost-effective public infrastructure that meets the needs of Canadians in a competitive economy, a cleaner environment and liveable communities is provided.

This Strategic Outcome reflects the Department's longer term infrastructure programs, including targeted programs like the Green Infrastructure Fund and the Building Canada Fund. The Department provides funding to partners for both large- and small-scale projects as well as those with national and regional benefits, and funding is leveraged from partners and invested in the construction, renewal and enhancement of infrastructure in communities across the nation.

Lessons Learned for Section 2.3

Strategic Outcome 2 includes funding for large, complex projects, as well as smaller community projects. It is typical for large-scale infrastructure projects to require a substantial amount of upfront planning, design and procurement. These processes may occur, in whole or in part, after funding commitments are announced. As a result, there is often a time lapse between project announcements and when construction starts and when claims are submitted for reimbursement.

This issue was in part addressed through new streamlined processes for project selection in some of the key programs under this Strategic Outcome. While continuing to identify and mitigate risks to the federal government, the new processes allow for the acceleration of project reviews. This helps to ensure that Government of Canada funding approval processes are not an impediment to project proponents being able to finalize their planning and design and beginning procurement more quickly. This being said, project delays can occur after the project selection and approval process has been completed.

In order to better predict project timelines and to reduce the associated administrative burden, the Department is implementing risk-based approaches to the oversight of projects. A revised monitoring approach for large-scale projects has been implemented to review progress of remaining projects and ensure they are completed within scheduled timelines. Trend analysis of historical spending patterns is also being used to increase the accuracy of annual financial forecasts.

Programs under Strategic Outcome 2 provide funding for infrastructure projects across the country. In the case of smaller-scale projects, the Department has generally administered programs through a highly decentralized delivery model. In order to ensure the effective and consistent application of policies in all jurisdictions, multi-level program governance structures have been put in place with our key partners, including other federal departments as well as provinces and territories.

2.3.1 Program Activity: Building Canada Fund-Communities Component

Supporting the Infrastructure Needs of Smaller Communities

Program Activity Description: for Section 2.3.1

The Communities Component of the Building Canada Fund program activity provides funding to address the unique infrastructure pressures facing smaller communities, focusing on project investments in communities with populations of less than 100,000. Working in partnership with federal delivery partners and recipients, program funding supports the construction, renewal and enhancement of basic infrastructure priorities such as potable water, wastewater treatment, local roads and other infrastructure needs of small communities. The fund levers additional contributions from other partners by generally providing federal funding of up to one-third of eligible costs. The Building Canada Fund focuses on projects that deliver economic, environmental and social benefits to all Canadians. Priority funding categories for the fund are the core national highway system routes, drinking water, wastewater, public transit and green energy. Other eligible investment priority areas include environmental projects (solid waste management), projects that support economic growth and development (short-line rail and short-sea shipping, connectivity and broadband, tourism, and regional and local airports), as well as projects that contribute to the ongoing development of safe and strong communities (disaster mitigation, culture, sport, local roads and bridges, and brownfield re-development). Funding is used to support public infrastructure owned by provincial, territorial and municipal governments and entities, as well as private industry.¹³

2011-12 Financial Resources (in $ thousands) for Section 2.3.1

Planned Spending	Total Authorities	Actual Spending
323,391	300,850	213,88414

2011-12 Human Resources (FTEs) for Section 2.3.1

Planned	Actual	Difference
15	14	1

Results Achieved for Section 2.3.1

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Federal funding is provided and funding is leveraged from partners and invested in the construction, renewal and enhancement of infrastructure in communities of less than 100,000 residents.	Funding leveraged from partners as a percentage of federal funding.	200%	205%
	Number of projects to start during the period.	40	38
	Value of projects to start during the period.	$72.4 million	$96.3 million
Infrastructure is constructed, renewed and enhanced in communities of less than 100,000 residents.	Number of projects to start during the period.	174	137
	Value of projects to start during the period.	$600 million*	$502.1 million

* The target as cited in the 2011-12 RPP showed the value of $200 million (federal share) and has been corrected to $600 million to reflect the total eligible cost of projects completed, including the leveraged amount from partners.

Performance Summary and Analysis of Program Activity for Section 2.3.1

During 2011-12:

• 137 approved projects valued at $502.1 million were completed
• 38 approved projects worth $96.3 million began construction
• 467 projects worth more than $2.3 billion are still underway

In addition, as a result of available funding from cost savings and projects cancelled by proponents, Infrastructure Canada committed $16.1 million in federal funds to 29 new projects, leveraging an additional $34 million in infrastructure investment. Since the inception of the program in 2007, more than $1 billion of federal funding has been committed generating an additional $2.1 billion (more than doubling committed federal funding) in infrastructure investment. Infrastructure Canada continues to support 14 projects in Quebec funded through the Large Urban Centres Component of the Building Canada Fund through a federal allocation of $200 million. The largest categories of investments are wastewater infrastructure, water infrastructure and local road infrastructure.

2.3.2 Program Activity: Building Canada Fund-Major Infrastructure Component

Supporting Nationally and Regionally Significant Projects

Program Activity Description: for Section 2.3.2

The Major Infrastructure Component of the Building Canada Fund program activity targets larger, strategic infrastructure projects both at the national and regional level. It increases overall investment in public infrastructure and contributes to broad federal objectives of economic growth, a cleaner environment and strong and prosperous communities. The objective is to target two-thirds of the funding to national priorities of water, wastewater, public transit, the core national highway system and green energy. The Major Infrastructure Component has 12 additional eligible categories of investment, and priority projects are identified through discussions with provinces. By providing up to 50 percent federal funding on a cost-shared basis, it levers additional contributions from partners to promote increased investment in strategic infrastructure. Eligible recipients include provinces, local or regional governments, public sector bodies, non-profit organizations and private companies. Projects identified as a priority must be supported by a business case reviewed against key program criteria. Once a project review is completed and a project is approved, funds are delivered through contribution agreements with eligible recipients to reimburse costs incurred. Projects under this program activity contribute to the construction, renewal and/or enhancement of public infrastructure. As part of the Economic Action Plan, the government made a commitment to accelerate funding under the Building Canada plan, and as such, the Department streamlined the federal evaluation and approval of projects under the Building Canada Fund-Major Infrastructure Component, simplifying and developing a more efficient review process to help projects get started sooner.¹⁵

2011-12 Financial Resources (in $ thousands) for Section 2.3.2

Planned Spending	Total Authorities	Actual Spending
1,270,430	1,225,232	759,82816

2011-12 Human Resources (FTEs) for Section 2.3.2

Planned	Actual	Difference
30	32	-2

Results Achieved for Section 2.3.2

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Recipient organizations have access to Building Canada Fund-Major Infrastructure Component funding to build or improve infrastructure.	Number of projects completed/underway.	150*	140
	Value of projects completed/underway.	$21 billion*	$17.4 billion
Infrastructure Canada's funding through the Building Canada Fund-Major Infrastructure Component leverages investments in infrastructure by other partners.	Funding leveraged from partners as a percentage of federal funding.	100%	229%
Funding is directed towards the five national priorities of water, wastewater, core national highway, public transit and green energy infrastructure.	Federal funding committed towards the five national infrastructure priorities as a percentage of all federal funding under the Building Canada Fund-Major Infrastructure Component.	67%	79%

* Cumulative number/value of projects under the program, up to and including March 31, 2012.

Performance Summary and Analysis of Program Activity for Section 2.3.2

During 2011-12, 18 major projects worth approximately $566 million in total eligible costs were completed and 24 major projects with total eligible costs of $1.32 billion started construction. In addition, the Department committed more than $103 million to new projects worth over $377 million during the fiscal year. Program funding is almost completely committed in six of the ten provinces (90 percent to 100 percent committed), and at least 70 percent of every province's allocation is committed.

Overall, the Department has committed approximately $5.61 billion in funding to 147 projects. Including investments by partners, these projects have a value of approximately $18.42 billion in total eligible costs. These infrastructure projects, small and large, improve the quality of life in communities, enhancing the safety and efficiency of road and transit networks, and strengthening the economies in communities across the nation.

2.3.3 Program Activity: Green Infrastructure Fund

Investing in Environmental Infrastructure

Program Activity Description: for Section 2.3.3

This program activity provides funding for public infrastructure projects that promote cleaner air, reduced greenhouse gas emissions, and cleaner land and water. Project categories include wastewater infrastructure, green energy generation infrastructure, green energy transmission infrastructure, solid waste infrastructure and carbon transmission and storage infrastructure. The objective of the Green Infrastructure Fund (GIF) is to improve the quality of the environment and to support a more sustainable economy over the long-term. The GIF provides up to 50 percent of eligible project costs to promote increased investment in infrastructure, in support of a more sustainable economy. Funding is provided on a cost-shared basis to provinces, territories, local or regional governments, public sector bodies, other eligible non-profit organizations and private sector companies, either alone or in partnership with a province, territory or a government body. Projects are assessed against criteria such as eligibility, leveraging financial investments and project benefits.

2011-12 Financial Resources (in $ thousands) for Section 2.3.3

Planned Spending	Total Authorities	Actual Spending
431,084	390,712	30,27417

2011-12 Human Resources (FTEs) for Section 2.3.3

Planned	Actual	Difference
15	12	3

Results Achieved for Section 2.3.3

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Recipient organizations (target groups) of the Green Infrastructure Fund have access to funds to build or improve infrastructure.	Number of projects completed/underway.	18*	11
	Value of projects completed/underway.	$1.91 billion*	$963 million
	Amount of federal funding committed on projects.	$626.97 million	$617.1 million
Infrastructure Canada's funding and negotiations leverage investments by other partners in infrastructure.	Funding leveraged from partners as a percentage of federal funding.	100%	178%

* Cumulative number/value of projects to be completed/underway under the program, up to and including March 31, 2012. In 2011-12, the City of Saint John, New Brunswick, informed the Department that they would no longer be proceeding with their announced district energy project. This brings the total to 17 announced projects under the program.

Performance Summary and Analysis of Program Activity for Section 2.3.3

In 2011-12, Infrastructure Canada focussed on project approvals and the negotiation of funding agreements. By March 31, 2012, a total of eleven projects were underway, with total eligible costs valued at more than $963 million. The combined federal contribution to these projects is $373 million, including investments by partners of approximately $590 million.

Overall, more than $617 million has been committed to 17 announced projects. Including investments by partners, these projects have a value of more than $1.7 billion in total eligible costs.

In keeping with the Government of Canada's commitment to address priority initiatives within the current Fiscal Framework, the Government of Canada has made a policy decision to transfer $169.98 million from the GIF to other federal departments to support high-priority initiatives. These reallocations are being considered by Parliament through a combination of Main Estimates and Supplementary Estimates as the funding is required.¹⁸ The proposed transfers, and amounts that have been approved by Parliament, including those approved in the 2012-13 Main Estimates, are as follows:

Natural Resources Canada

Transfer Out – Forestry Industry Transformation Program	$100 million
Approved by Parliament – prior to 2012-13	$50 million
2012-13 Main Estimates	$25 million
Balance to be transferred out in a future Estimates process	$25 million

Economic Development Agency of Canada for the Regions of Quebec

Transfer Out – Temporary Initiative for the Strengthening of Quebec's Forest Economies	$30 million
Approved by Parliament – prior to 2012-13	$15 million
2012-13 Main Estimates	$15 million

Transfer Out – Natural Gas Pipeline between Vallée Jonction and Thetford Mines	$18.15 million
2012-13 Main Estimates	$14.50 million
Balance to be transferred out in a future Estimates process	$3.65 million

Aboriginal Affairs and Northern Development Canada

Transfer Out – Beaufort Regional Environmental Assessment	$21.83 million19
Approved by Parliament – prior to 2012-13	$5.45 million
2012-13 Main Estimates	$7.34 million
Balance to be transferred out in a future Estimates process	$9.04 million

In addition, $45 million in unallocated funds from the GIF was removed from departmental reference levels, as part of the 2010 Strategic Review process, and made available for other Government of Canada priorities. This was approved in Budget 2011, and will be included in future Estimates processes, subject to Parliamentary approval.

As well, in the 2012-13 Main Estimates, $58.7 million was approved and reallocated from the GIF as a source of funds for the operating requirements of the Department. No approved projects have been cancelled or otherwise affected as a result of these reallocations.

Infrastructure Canada will continue to work closely with provinces and territories to identify priorities for the remaining funds from the proposals that have already been submitted.

2.3.4 Program Activity: Canada Strategic Infrastructure Fund

Supporting Large-Scale Projects

Program Activity Description: for Section 2.3.4

This program activity provides funding to support large-scale projects in areas that are vital to sustaining economic growth and enhancing the quality of life of Canadians. It supports infrastructure projects in the categories of highways and railways, local transportation, tourism or urban development, water or sewage and broadband (telecommunications connectivity). Investments are made in cooperation with the provinces, territories, municipalities and the private sector to support the construction, renewal and/or enhancement of public infrastructure to build infrastructure capacity in partnership with recipients. The Canada Strategic Infrastructure Fund (CSIF) levers additional contributions from other partners by providing up to 50 percent of funded costs for eligible projects. The CSIF benefits Canadians by promoting the safer and faster movement of people and goods on Canada's transportation systems, reduced greenhouse gas emissions and pollutants, increased economic activity and innovative technologies.²⁰

2011-12 Financial Resources (in $ thousands) for Section 2.3.4

Planned Spending	Total Authorities	Actual Spending
378,791	480,998	188,38221

2011-12 Human Resources (FTEs) for Section 2.3.4

Planned	Actual	Difference
6	7	-1

Results Achieved for Section 2.3.4

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Federal funding is provided and funding is leveraged from partners and invested in the construction, renewal and enhancement of public infrastructure that contributes to economic prosperity at both regional and national levels.	Funding leveraged from partners as a percentage of federal funding.	100%	188%
Public infrastructure is constructed, renewed and enhanced.	Number of approved projects completed.	49*	43
	Value of approved projects completed.	$9.7 billion*	$6.2 billion

* Cumulative number/value of projects to be completed under the program, up to and including March 31, 2012. The target as cited in the 2011-12 RPP showed 51 projects and has been corrected to 49 projects to reflect the amalgamation of Manitoba Floodway Phase I, II and III into a single project.

Performance Summary and Analysis of Program Activity for Section 2.3.4

During 2011-12, with the help of its Federal Delivery Partners, the Department continued to monitor the progress of projects. Four projects worth $253.3 million were completed by project proponents during the period. This is fewer than the forecasted amount with delays caused by inclement weather and technical and other construction-related issues.

Since the inception of the program, Infrastructure Canada has committed more than $4.4 billion in federal funding to 75 projects, generating about $8.4 billion in investment from funding partners. The largest categories of investments in terms of the number of funded projects are highway/rail infrastructure, urban development and water/sewage treatment infrastructure. So far, 43 projects have been completed under the program, improving infrastructure across the country.

2.3.5 Program Activity: Municipal Rural Infrastructure Fund

Supporting Smaller-Scale Municipal Projects

Program Activity Description: for Section 2.3.5

This program activity provides funding for smaller-scale municipal infrastructure projects designed to promote and improve quality of life in both urban and rural communities. At least 80 percent of funding under the Municipal Rural Infrastructure Fund (MRIF) has been dedicated to municipalities with a population of less than 250,000. Eligible project categories under this fund include water and wastewater treatment, and cultural and recreation projects for smaller communities. In May 2007, the Government of Canada announced an additional $200 million for the initial $1 billion program. For most projects, the MRIF provides up to one-third federal funding for eligible projects, thereby promoting increased infrastructure investments. Projects funded under this program activity contribute to the construction, renewal and/or enhancement of public infrastructure, improving and increasing the stock of core public infrastructure. The program aims to promote sustainable economic growth, innovation and healthy communities.²²

2011-12 Financial Resources (in $ thousands) for Section 2.3.5

Planned Spending	Total Authorities	Actual Spending
47,226	128,348	88,043

2011-12 Human Resources (FTEs) for Section 2.3.5

Planned	Actual	Difference
6	4	2

Results Achieved for Section 2.3.5

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Federal funding is provided and funding is leveraged from partners and invested in the construction, renewal and enhancement of public infrastructure projects in both urban and rural communities.	Funding leveraged from partners as a percentage of federal funding.	200%*	253%
Public infrastructure is constructed, renewed and enhanced.	Number of approved projects completed.	1,669**	1,617
	Value of approved projects completed.	$3.5 billion**	$2.5 billion

* The target as cited in the 2011-12 RPP showed 100% and has been corrected to reflect the cost-sharing provisions under the MRIF.
** Cumulative number/value of projects to be completed under the program, up to and including March 31, 2012.

Performance Summary and Analysis of Program Activity for Section 2.3.5

During 2011-12, with the help of its Federal Delivery Partners, the Department continued to monitor the progress of projects, with 67 projects valued at $220 million completed during the period. This brings the total number of completed projects to 1,617, with a total value of $2.5 billion. Improved forecasting and better coordination between Infrastructure Canada and Federal Delivery Partners have helped the Department meet its planned targets for project completions.

Since the inception of the program, Infrastructure Canada has committed more than $991 million in federal funding to 1,938 projects generating an additional $2.5 billion in investments from funding partners. The largest categories of investments in terms of the number funded projects are municipal capacity building and water infrastructure.

2.3.6 Border Infrastructure Fund

Improving Canada's Border Crossings

Program Activity Description: for Section 2.3.6

This program activity provides funding for investments in physical infrastructure capacity and intelligent transportation systems at surface border crossings between Canada and the United States, as well as several other crossing points in Canada. These investments help to reduce congestion and support the implementation of the Smart Borders Action Plan, and to enhance safety and security at border crossings. The Border Infrastructure Fund (BIF) is critical to Canada's growing economic and trade relationship with the United States. Announced in 2001, the Fund provides up to 50 percent of funding for eligible project costs. Projects under this program activity are carried out in partnership with funding recipients and include the construction, renewal and/or enhancement of public infrastructure to enhance border surface capacity. The BIF benefits Canadians by reducing border crossing times for trucks and cars travelling between Canada and the United States, and more efficient movement of goods, thereby contributing to increased trade and production, increased safety and security and improved Canada-United States relations.²³

2011-12 Financial Resources (in $ thousands) for Section 2.3.6

Planned Spending	Total Authorities	Actual Spending
51,738	44,355	35,042

2011-12 Human Resources (FTEs) for Section 2.3.6

Planned	Actual	Difference
1	1	0

Results Achieved for Section 2.3.6

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Federal funding is provided and funding is leveraged from partners and invested in the enhancement of infrastructure at Canada-United States border crossing points.	Funding leveraged from partners as a percentage of federal funding.	100%	133%
Public infrastructure at Canada-United States border crossing points is constructed, renewed and enhanced.	Number of approved projects completed.	8*	8
	Value of approved projects completed.	$1.1 billion	$317.1 million

* Cumulative number/value of projects to be completed under the program, up to and including March 31, 2012.

Performance Summary and Analysis of Program Activity for Section 2.3.6

As of March 31, 2012, eight projects under the BIF have been completed, representing 100 percent of the planned target. The total value of projects completed by project proponents was lower than the target as a large project encountered delays and was not completed by year end as forecast. Typically, project delays occur as a result of inclement weather, technical, and other construction-related complexities that cause numerous construction delays. In addition, actual spending lags behind the actual rate of construction of projects since recipients are only reimbursed once claims are submitted, even though eligible expenditures may have already been incurred.

Since the inception of the program, the federal government has announced support for 13 border improvement infrastructure projects, generating $1.2 billion in infrastructure investment from its partners.

2.3.7 Program Activity: Economic Analysis and Research

Supporting Delivery and Management of Infrastructure Programs

Program Activity Description: for Section 2.3.7

This program activity helps to ensure that Canada's infrastructure investment priorities and activities include the building, connecting and sharing of applied knowledge and research on infrastructure issues, projects and programs. It targets key gaps in infrastructure knowledge and information, promotes the development of an enhanced evidence base for sound decision making at all levels of government, and contributes to improved measurement of the impacts of infrastructure policy and investment decisions. This program activity supports strategic research capacity and knowledge generation and applications at the national level, as well as cooperation with other levels of government in addressing their unique research and capacity-building needs. It levers research resources and expertise across various levels of government and stakeholder groups to address the infrastructure challenges and proposed solutions for Canada's economy, environment and community.²⁴

2011-12 Financial Resources (in $ thousands) for Section 2.3.7

Planned Spending	Total Authorities	Actual Spending
10,817	1,956	3,143

2011-12 Human Resources (FTEs) for Section 2.3.7

Planned	Actual	Difference
17	28	-11

Results Achieved for Section 2.3.7

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Leveraging of research resources across various levels of government and stakeholders so that knowledge on infrastructure improves.	Funding leveraged from partners as a percentage of federal funding.	Programs under this program activity have not yet been launched. Therefore, no target has been set.	N/A

Performance Summary and Analysis of Program Activity for Section 2.3.7

In Budget 2011, and reiterated in Budget 2012, the Government of Canada committed to work with provinces, territories, Canada's municipal sector, and stakeholders to develop a long-term plan for public infrastructure that extends beyond the expiry of the Building Canada plan in 2014. Given the importance of this commitment and the timelines to engage on the issue, a significant increase was needed in the amount of financial and human resources allocated for this program activity.

As the lead department on the development of a long-term infrastructure plan, in 2011-12 Infrastructure Canada began engaging provinces, territories, the Federation of Canadian Municipalities and other stakeholders to inform the plan's development. Funds were spent under the Economic Analysis and Research program activity to support the long-term plan engagement process that was launched on November 30, 2011. This inclusive process has been managed in three overlapping phases.

Phases 1 and 2 are about reviewing the accomplishments and benefits of past infrastructure investments and building the knowledge to support the development of the new long-term plan. Under Phase 1, Infrastructure Canada officials worked with partners and stakeholders to demonstrate how joint infrastructure investments have supported a stronger economy, a cleaner environment and prosperous communities. As part of Phase 2, Infrastructure Canada has been working with partners and stakeholders, leading experts, and academics to build the technical knowledge that will inform and guide the development of the plan. A large part of this work is focused on the themes of the economy, environment, stronger communities, infrastructure financing, and planning and sustainability.

The efforts under the first two phases of the engagement process laid the foundation for discussions with provinces and territories, as well as other partners and stakeholders at the ministerial and official's levels, undertaken in the first half of fiscal year 2012-13.

In 2011-12, Infrastructure Canada did not fund any feasibility studies under the Feasibility and Planning Studies program.

2.4 Strategic Outcome 3

Construction-ready infrastructure projects are provided with federal funding.

The development and implementation of the Infrastructure Stimulus Fund (ISF) and the Building Canada Fund-Communities Component Top-Up were key contributions towards Canada's Economic Action Plan (EAP). By delivering timely, targeted and temporary funding for construction-ready projects across the country, these funds provided stimulus to the Canadian economy when it was needed most.

Lessons Learned for Section 2.4

The successful implementation of programming under Strategic Outcome 3 has provided valuable lessons in how to deliver a program targeted at stimulating the economy under tight timelines. While a formal program evaluation of EAP programs is underway, preliminary lessons learned include:

• streamlined application and environmental assessment processes supported rapid project approval, with key responsibilities of partners defined in Contribution Agreements;
• implementation of a risk-based monitoring strategy that included quarterly or bi-monthly reporting, invoice verification, targeted on-site visits and project compliance audits assured strong program management;
• implementation of a process to quickly and carefully process claims, ensuring only eligible costs were reimbursed proved effective; and
• flow of federal funding was slower than planned due to delays in receiving claims from proponents (however, amounts paid tend to lag the economic impact of fiscal stimulus since payments are typically made when claims are received, after work has occurred and eligible costs incurred).

In its second audit of Canada's Economic Action Plan (2011 Fall Report of the Auditor General), the interim Auditor General found that Infrastructure Canada had monitored the progress and spending of ISF projects and made appropriate adjustments in a number of cases, including extending deadlines for project completion. In addition, the Office of the Auditor General acknowledged that the fund "largely achieved the Economic Action Plan objective to spend federal funding, in a timely manner."

2.4.1 Program Activity: Infrastructure Stimulus Fund

Stimulating the Economy in Tough Times

Program Activity Description: for Section 2.4.1

This program activity is intended to accelerate and increase the number of provincial, territorial and municipal infrastructure projects, as well as infrastructure projects submitted by not-for-profit and for-profit entities. It focuses on the rehabilitation of existing assets and new infrastructure projects that can be materially completed by March 31, 2011.²⁵ Categories include water, wastewater, public transit, solid waste management, highways, roads, culture, community centers and services, temporary shelter infrastructure, parks and trails, rail and port infrastructure. As part of the Economic Action Plan, the Infrastructure Stimulus Fund helps to provide timely, targeted and short-term stimulus to the Canadian economy by increasing the total amount of construction activity in Canada during 2008-09, 2009-10 and 2010-11 through the funding of projects, and by leveraging funding of other levels of government and the private sector. The Infrastructure Stimulus Fund is designed as a broad and flexible program to include both new infrastructure and rehabilitation of existing assets. By providing up to 50 percent federal funding to projects that can be materially completed by March 2011, the Fund levers funding from other partners.²⁶

2011-12 Financial Resources (in $ thousands) for Section 2.4.1

Planned Spending27	Total Authorities	Actual Spending
2,400	803,140	634,927

2011-12 Human Resources (FTEs) for Section 2.4.1

Planned	Actual	Difference
24	33	-9

Results Achieved for Section 2.4.1

Program Activity Expected Results	Performance Indicators	Targets	Actual Results
Construction-ready infrastructure projects are provided with timely and temporary federal funding support by the Infrastructure Stimulus Fund in order to contribute to government-wide objectives of the Economic Action Plan (EAP).	Amount of eligible costs incurred.	95% of eligible costs incurred by October 31, 2011	97%
	Percentage of projects that are substantially completed by the end of program, out of total number of projects approved.	95% of approved EAP projects are substantially completed	98%
Expedited federal funding is provided and funding is leveraged from partners and invested in the short-term construction, renewal and enhancement of infrastructure.	Funding leveraged from partners as a percentage of federal funding.	100%	150%

Performance Summary and Analysis of Program Activity for Section 2.4.1

During 2011-12 Infrastructure Canada worked closely with provincial, territorial, municipal, and other partners as they worked towards the completion of the final 1,277 projects, representing $1.9 billion of federal commitments with an additional $3.4 billion in infrastructure investments leveraged from our partners. This brings the total number of substantially completed projects to 3,973 with a federal share of more than $3.4 billion by March 31, 2012.

By extending the deadline for an additional construction season, the Canadian economy benefitted from stimulus funding without additional government spending beyond the original commitments. To ensure fairness, all projects were eligible to apply for an extension, and those projects that met the criteria were allowed to be completed by the extended deadline with federal support. Throughout the year, the Government of Canada remained committed to timely completion of stimulus projects, while preparing to return to a balanced budget. Through the Infrastructure Stimulus Fund, the Government, generated close to $6 billion in infrastructure investments from non-federal partners, for an overall total $10 billion infrastructure investment.

2.4.2 Program Activity: Building Canada Fund-Communities Component Top-Up

Supporting the Infrastructure Needs of Smaller Communities

Program Activity Description: for Section 2.4.2

This program activity provides additional funding in the amount of $500 million (added to the Building Canada Fund-Communities Component program activity funding) to fund additional infrastructure projects in communities with populations of less than 100,000. The additional top-up funds were initiated given the economic recession and followed Budget 2009 (Economic Action Plan) and the government's decision to accelerate infrastructure funding and provide short-term economic stimulus. As part of the Economic Action Plan, the Top-Up to the Building Canada Fund-Communities Component provided an additional $500 million to be spent in the 2009-10 to 2010-11 fiscal years, in jurisdictions that have fully committed all of their regular Communities Component of the Building Canada Fund. The funds are to be allocated to projects that can be materially completed by March 31, 2011.²⁸ Projects are selected through the same process as the Building Canada Fund-Communities Component program activity.²⁹

2011-12 Financial Resources (in $ thousands) for Section 2.4.2

Planned Spending30	Total Authorities	Actual Spending
0	163,000	136,122

2011-12 Human Resources (FTEs) for Section 2.4.2

Planned	Actual	Difference
0	2	-2

Results Achieved for Section 2.4.2

Program Activity Expected Results	Performance Indicators	Targets	Performance Status
Construction-ready infrastructure projects are provided with timely and temporary federal funding support by the Building Canada Fund-Communities Component Top-Up in order to contribute to government-wide objectives of the Economic Action Plan (EAP).	Amount of eligible costs incurred.	95% of eligible costs incurred by October 31, 2011	95%
	Percentage of projects that are substantially completed by the end of program, out of total number of projects approved.	95% of approved EAP projects are substantially completed	97%
Funding leveraged from partners, as a percentage of federal funding, for the construction, renewal and enhancement of infrastructure in communities of less than 100,000 residents.	Funding leveraged from partners as a percentage of federal funding.	200%	215%

Performance Summary and Analysis of Program Activity for Section 2.4.2

During 2011-12, Infrastructure Canada worked closely with Federal Delivery Partners and provinces as project proponents completed the final 261 projects. These projects represented $337.9 million of federal commitments, and leveraged an additional $735.8 million in infrastructure investments from partners.

By extending the deadline for an additional construction season, the Canadian economy benefitted from stimulus funding without additional government spending beyond the original commitments. Proponents that met the criteria for an extension were allowed to complete projects by the extended deadline with federal support. Throughout the year, the Government of Canada remained committed to timely completion of stimulus projects, while preparing to return to a balanced budget. Overall, 526 projects were completed, with a federal investments of $446.9 million, and close to $1 billion in additional investments from partners by March 31, 2012.

2.4.3 Summary of Program Spending under the Economic Action Plan

In order to provide additional flexibility to partners – provinces, territories and municipalities – a one-time extension of the completion deadline, from March 31, 2011 to October 31, 2011, was announced for projects under the Infrastructure Stimulus Fund and the Building Canada Fund Communities Component Top-Up. In 2011-12, the Department continued to work with partners to complete projects, and to begin the winding down of these programs. In total, over 97 percent (4,569) of approved Economic Action Plan projects were completed by March 31, 2012. Projects under these stimulus programs were completed within the federally approved funding limits, and in some instances came in under budget. As a result of the extension, more than $801 million in stimulus spending was incurred by the Department in 2011-12.

2009-10 thru 2011-12 Financial Resources Final Summary for Programs under the Economic Action Plan (in $ thousands)

Economic Action Plan (EAP) Programs	2009-10 EAP Spending	2010-11 EAP Spending	2011-12 EAP Spending31	Total EAP Spending32 (2009-10 to 2011-12)
Infrastructure Stimulus Fund	493,129	2,482,489	634,927	3,610,545
Building Canada Fund-Communities Component Top-Up	30,745	303,739	136,122	470,606
Green Infrastructure Fund	5,760	35,430	30,27433	71,464
National Recreational Trails	25,10034	-	-	25,100
Provincial-Territorial Infrastructure Base Fund	179,383	158,109	-	337,492
Total EAP Spending	734,117	2,979,767	801,323	4,515,207

2.5 Program Activity: Internal Services Program Activity

Program Activity Description: for Section 2.5

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight (Risk Management, Internal Audit and Evaluation) Services, Communications Services and Legal Services, Human Resources Management Services, Financial Management Services, Information Management Services, Information Technology Services, Real Property Services, Material Services, Acquisition Services, and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

2011-12 Financial Resources (in $ thousands) for Section 2.5

Planned Spending	Total Authorities	Actual Spending
41,969	45,219	55,52535

2011-12 Human Resources (FTEs) for Section 2.5

Planned	Actual	Difference
199	210	-11

Program Activity Results Achieved for Section 2.5

Internal Audit:

During 2011-12, the Department:

• Provided, based on the approved departmental Audit Plan, various assurance, advisory and consulting services to support senior management in reaching departmental objectives – with a particular emphasis on claims processing and close-out procedures of EAP programs, along with testing of controls in corporate areas. (For a full list of engagements, please refer to the Supplementary Information Tables);
• Enhanced the process to follow up on outstanding audit recommendations and assessment of management action plan implementations, and reported findings to the Departmental Audit Committee and the Deputy Minister; and
• Continued the implementation of a quality assurance and improvement program to cover major aspects of the internal audit function, and successfully monitored the effectiveness and formalization of audit methodology. The Function successfully passed an external practice inspection in 2011.

Evaluation:

During 2011-12, the Department:

• Strengthened the foundation for the evaluation function by developing standard operating procedures for conducting studies, including the development of a practice manual; and by improving the process for assessing the progress of management action plan implementation by adopting a new, more rigorous approach for following up on recommendations;
• Developed a revised Five-Year Evaluation Plan (2012-17) to guide evaluation work in the Department. The Plan is expected to be approved in the second quarter of 2012-13;
• Completed Infrastructure Canada's Second Annual Report on Performance Measurement;
• Continued to support performance measurement by helping develop performance measurement strategies; and
• Carried out two major evaluations: the evaluation of the Provincial-Territorial Infrastructure Base Fund is completed and is expected to be approved in the second quarter of 2012-13. The evaluation of Infrastructure Canada's Economic Action Plan (EAP) Initiatives, including the Infrastructure Stimulus Program, the Building Canada Fund Communities Component Top-Up and National Recreational Trails, is completed and is expected to be approved in the second quarter of 2012-13.

For additional information on Evaluation activities please refer to the Supplementary Information Tables.

Corporate Planning and Risk Management:

During 2011-12, the Department:

• Ensured that the Corporate Risk Profile adequately reflected the risks associated with Economic Action Plan initiatives, and that progress in implementing mitigation measures re-assessing risk placement were reported to the Departmental Management Committee (DMC); and
• Initiated a new integrated corporate planning cycle, including risk management, strategic priority setting and budget alignment, as well as a new streamlined business planning and reporting process.

Communications:

During 2011-12, the Department:

• Continued to tell Canadians and stakeholders the story of federal infrastructure investments, activities and results, nationally and locally. Specifically, the Department:
  • Launched the process to work with stakeholders to develop a new Long-Term Infrastructure Plan;
  • Completed more than 260 media announcements;
  • Responded to 137 enquiries from the media and 1,203 from the public;
  • Created a new infrastructure.gc.ca website with easy-to-find information about Infrastructure Canada's programs and projects;
  • Published close to 100 new stories about projects across Canada on its Internet site at Infrastructure Canada and in various reports; and
  • Promoted Infrastructure Canada programs to about 8,000 delegates through information booths at five major conferences.

Access to Information:

During 2011-12, the Department:

• Delivered an increasing level of Access to Information and Privacy Act (ATIP) services. Specifically, the Department:
  • Received 58 percent more requests and processed 55 percent more requests as compared to the previous year;
  • Responded to 80 percent of requests within statutory time limits as prescribed by the Act, despite the significant increase in volume;
  • Completed ATIP awareness sessions throughout the Department;
  • Increased internal capacity by hiring two full-time indeterminate positions; and
  • Submitted annual statistical reports, reports to Parliament prior to tabling deadlines, and updates to the Department's Info Source descriptions.

Information Management (IM) and Information Technology (IT):

During 2011-12, the Department:

• Continued the development and support of information technology and services, including refining the Shared Information Management System for Infrastructure (SIMSI) database. Specifically, this technology:
  • Supported the effective close-out of the Infrastructure Stimulus Fund;
  • Contributed to more efficient project monitoring under the Building Canada Fund-Major Infrastructure Component; and
  • Facilitated budget adjustments for Building Canada Fund-Communities Component projects.
• Completed an initial analysis and planning for a streamlined Enterprise Data Warehouse to improve horizontal reporting and reduce operational costs;
• Continued the development of an electronic documents and records management system (EDRMS) for Infrastructure Canada to ensure alignment with the Government of Canada's common GCDocs-based EDRMS initiative; and
• Supported the streamlining of website content, to ensure the website was compliant with new accessibility standards.

Financial Management:

During 2011-12, the Department:

• Enhanced the timeliness and functionality of internal financial reporting systems by:
  • Increasing the automation of monthly corporate financial reports;
  • Expanding the use of the Department's Financial Planning and Analysis Application system for tracking and reporting on financial commitments at the program and project levels; and
  • Implementing a new Salary Resource Management System database for planning and forecasting the Department's salary requirements.
• Provided secretariat support and advice to the Project Review Panel for the review of infrastructure projects;
• Developed and implemented new and enhanced controls and service levels for accounting operations and external financial reporting functions, including production of quarterly financial reports;
• Strengthened overall internal financial management capacity through training, staffing vacant positions, and implementing new internal controls; and
• Continued to improve overall administration by reviewing and revising its general administrative controls and procedures.

People Management:

During 2011-12, the Department:

• Delivered on its Integrated Business and Human Resources Plan (IBHRP) and people management strategies to support a flexible and adaptable workforce, employee development and growth, and employee engagement;
• Continued to promote and foster a positive, healthy and inclusive workplace by providing employees with learning opportunities and recognition for their accomplishments;
• Ensured that recruitment reflected Canada's diversity, by clearly identifying the need for diversity in recruitment efforts, and identifying employment equity as an organizational requirement for appointment processes;
• Ensured the Department's culture continued to embrace diversity and a bilingual work environment by investing in language training for employees, and actively encouraging all employees to work in the language of their choice and to act as role models for each other;
• Developed, implemented and communicated a departmental Code of Conduct to support Values and Ethics initiatives and guide employees in maintaining and enhancing public confidence in the integrity of the public service;
• Continued to implement Infrastructure Canada's Learning Strategy, which is designed to promote a strong learning culture, better coordinate and communicate activities and resources, and provide targeted, relevant and innovative learning opportunities; and
• Supported Public Service Renewal and improved People Management.

2.6 Impacts on Financial and Human Resources Resulting from the Establishment of Shared Services Canada

The following are tables on Financial and Human Resources data that show the resources that were transferred to Shared Services Canada (SCC) and the expenditures incurred on behalf of SCC.

2011-12 Financial Resources (in $ millions) for Section 2.6

	Planned Spending	Total Authorities*
Net transfer post Orders in Council (OIC)** to Shared Services Canada (SCC)	Not Applicable	1.6

* Pursuant to section 31.1 of the Financial Administration Act and Orders in Council P.C. 2011-0881, P.C. 2011-0877 and P.C. 2011-1297, this amount was deemed to have been appropriated to SCC, which resulted in a reduction in the appropriation for Infrastructure Canada.

** Total authorities, as presented in the "2011–12 Financial Resources" table (and other relevant tables) in the "Summary of Performance" section, is the net of any transfers to SCC. Actual spending does not include expenditures incurred on behalf of SCC as of the OIC date.

2011-12 Human Resources (FTEs) for Section 2.6

	Planned	Actual
Deemed to SCC	Not Applicable	Not Applicable