Call Letter - 2007-2008 Part II - Main Estimates

DATE: October 5, 2006

TO:       Senior Financial Officers of Departments, Agencies, and Crown Corporations

SUBJECTS:

1. Production of the 2007–2008 Main Estimates:
   • On-line Manuscripts
   • Standard Objects of Expenditure Reports
2. Explanation of Year-Over-Year Resource Changes in Main Estimates (comparison between 2006–2007 and 2007–2008)
3. 2007–2008 Interim Supply Requirements

This letter identifies the key requirements and provides critical dates for the preparation of the above material.

For the purposes of this letter and the attached annexes the word “Department” shall refer to Departments, Agencies and Crown Corporations.

Timelines

All documentation is due at the Treasury Board Secretariat (the Secretariat) within one week of being notified that your on-line material is ready to be reviewed and completed.

If your minister has not signed the Annual Reference Level Update (ARLU) submission, he or she must sign a paper copy of the Main Estimates manuscript and forward it to the Secretariat no later than February 1, 2007 .

In accordance with the House of Commons Standing Order 81(4), Main Estimates must be tabled on or before March 1, 2007.

Access On-line:

The Secretariat will continue to use the Expenditure Management Information System’s (EMIS) application for data collection of Main Estimates information . The use of this application is mandatory.

All departments will be individually notified (via email) once access to the on-line application becomes available.

Departments are to submit their Main Estimates and other related information on-line using the EMIS Publiservice web site at http://www.tbs-sct.gc.ca/emis-sigd/index_e.asp.

Departments that do not have access to the Publiservice web site must contact the EMIS Help Centre by telephone at (613) 948-1901 or by e-mail at .

All users of the on-line application must obtain or renew their Government of Canada digital certificate. Information on how to obtain or renew a certificate can be found in Annex E.

Training

Training for Main Estimates on-line will take place at:

400 Cooper St.,
4 ^th Floor,
Ottawa, Ontario

and is scheduled for the following dates:

Small to medium-sized departments will be invited to complete their Main Estimates online during the last portion of training, only if they have received an email from the Secretariat granting them access to the on-line system and if they have a valid password (see Annex E for further details).

To reserve a place at one of the sessions, please register with the EMIS Help Centre by telephone at (613) 948-1901 or by e-mail at .

Alternative Procedures

In the event that there is a disruption in service and access to the on-line application is unavailable, please contact the EMIS Help Centre by telephone at (613) 948-1901 or by e-mail at .

Instructions on how to complete and submit Main Estimates information on-line are provided in the attached annexes.

Attachments

Annex A : Main Estimates On-line Manuscripts

Annex B: Standard Objects of Expenditure Report and Expenditures Internal to the Government Report

Annex C: Explanation of Year-over-Year Resource Changes for Main Estimates

Annex D: Interim Supply Requirements

Annex E: Government of Canada Digital Certificate

Internet Services

This call letter and the detailed instructions are also available on the Secretariat’s Web site at http://www.tbs-sct.gc.ca/est-pre/estimE.asp.

Mail Services

If required, it is recommended that you send paper copies by messenger service or equivalent to:

Treasury Board of Canada Secretariat Mail and Messenger Services
300 Laurier Avenue West
Level P3 West
Ottawa, Ontario K1A 0R5

To the attention of:

Administrative Assistant
(Mail Stop # 6)
Estimates Production
Expenditure Operations and Estimates Directorate
7 th Floor, East Tower
140 O’Connor Street
Ottawa, Ontario K1A 0R5

Comments

We value your feedback. Please send any comments about these instructions or about the process to:
.

Annex A

MAIN ESTIMATES ON-LINE MANUSCRIPTS

Main Estimates information will continue to be presented using program activities from your approved departmental Program Activity Architecture (PAA), with the exception of the Corporate Services activity.

Corporate Services or its equivalent will not be displayed in Main Estimates; the funds associated with this activity will be attributed among the remaining program activities.

Attribution of corporate service funds will be in accordance with what your organization supplied to the Secretariat as part of your 2007-2008 Annual Reference Level Update (ARLU) submission . See the Preparation of the Annual Reference Level Update letter sent to Senior Financial Officers dated July 18, 2006 which states:

“Although Corporate Services will continue to be identified separately in the Program Activity Architecture (PAA), it will not be displayed in the 2007-2008 Main Estimates. You need to provide to TBS your corporate services allocation to other program activities by dollar amount. This will only be required once your ARLU has been closed. This is a change from previous years.”

Note that, while it is possible for departments to change their attribution from one year to the next, departments should be aware that fluctuations in their program activity totals must be explained. Therefore, it is recommended that a consistent attribution be applied each year.

Main Estimates material must be completed and submitted (in both official language s) to the Secretariat using the Expenditure Management Information System (EMIS) at http://www.tbs-sct.gc.ca/emis-sigd/index_e.asp.

Departments that do not have access to the Publiservice web site must contact the EMIS Help Centre by telephone at (613) 948-1901 or by e-mail at .

All departments will be notified by the Secretariat (via e-mail) once their manuscripts are ready to be reviewed and/or completed on-line.

Once you submit your Main Estimates to the Secretariat , you will no longer be able to edit information. However, you can continue to view and print your Main Estimates data.

If your minister has not signed your ARLU submission , he or she must sign the Main Estimates manuscripts. Departments are to print a paper copy of the on-line material, obtain the minister’s signature, and forward the original signed package to the Secretariat no later than February 1, 2007.

Since departments submit their Main Estimates on-line, it will no longer be necessary for you to verify paper page proofs. As a result, departments will be notified (by e-mail) once their Main Estimates manuscripts have been finalized and are ready for publishing. At this stage, the vote numbering will be final and departments can view their final information on-line.

When the Senior Financial Officer (SFO) receives the final notification (by e-mail), he or she must confirm acceptance within two days of receipt, indicating that the Main Estimates data is correct and providing assurance that, if any major changes have been made since the 2007–2008 ARLU submission, the minister has been duly informed. Confirmation can be made by responding to the e-mail or by fax to
Estelle Purdy at (613) 954-1060.

Textual Information

Departments can review and amend their text on-line to reflect the following:

• any editorial changes, which may consist of grammatical corrections, the correction of misspelled words, or the updating of name changes previously approved by legislation or Cabinet;
• proposed vote wording changes—departments are to consult their legal services on proposed vote wording changes before submitting these to the Secretariat; all changes must be made in the proposed schedule to the appropriation bill.

Departments should note that the Department of Justice Canada carries out an annual vote wording review and, as a result, some departments may have minor changes made to their vote wording. These changes have already been reflected in the manuscripts and should not be modified. Any questions concerning the changes should be directed to your program analyst.

• Statutory references (e.g. R.S.C. 1985, c. F-11) must be added or updated in the Statutory Items in Main Estimates table.
• Any other textual input errors must be corrected.

Numeric Information

Certain sections of the Main Estimates manuscripts are completely or partially populated from your ARLU submission. In some cases, numeric totals have been inserted and cannot be changed. Should you wish to revise a total that cannot be changed, please contact your program analyst.

General Information

Caution: Coding symbols may appear anywhere in the on-line manuscripts or be inserted by you. These symbols should not be altered because they are linked to formatting commands. For example:

<N>             indicates a non-breaking space (this is used when a word and/or figure is not to be extended to another line, e.g. a postal code: K1A<N>5A6)

<I>       start italic type

<D>      end italic type

<B>      start bold type

<D>      end bold type

<R>       indicates that this is the end of the line

<$I        starts an index entry

>           ends an index entry

Submission to the Secretariat

Once you have completed your review and updated your Main Estimates information on-line, you need only submit the information to the Secretariat .

Once the Main Estimates data has been submitted, departments will no longer be able to edit the information on-line. However, you can continue to view and print the Main Estimates information.

Should you need to send paper copies to the Secretariat, we recommend that you send your material by messenger service or equivalent to:

Treasury Board of Canada Secretariat
Mail and Messenger Services
300 Laurier Avenue West
Level P3 West
Ottawa, Ontario K1A 0R5

To the attention of:

Administrative Assistant
(Mail Stop # 6)
Estimates Production
Expenditure Operations and
   Estimates Directorate
7th Floor, East Tower
140 O’Connor Street
Ottawa, Ontario K1A 0R5

Annex B

STANDARD OBJECTS OF EXPENDITURE REPORT AND EXPENDITURES INTERNAL TO THE GOVERNMENT REPORT

As part of submitting your Main Estimates manuscripts you must include two standard object reports ( Standard Objects of Expenditure Report and Expenditures Internal to the Government Report).  

Standard Objects of Expenditure Report

The purpose of this report is to provide a budgetary (voted and statutory) breakdown of standard objects of expenditure.

Please note that the grand totals (both voted and statutory) have been inserted using information provided through the ARLU and reflect the same numeric value as your Main Estimates manuscripts. Therefore, your standard object detail must add to these totals.

Insert an amount for each standard object in the voted, statutory, and total columns.

Please ensure that machinery and equipment, and attachments and accessories for such machinery costing less than $1,000, which were formerly included under Standard Object (7), are included in Standard Object (9).

For additional information, please refer to the December 10, 1998, information bulletin issued by the Government Accounting Policy Branch.

Budgetary payments to Crown corporations are always reported against Standard Object (12)―Other Subsidies and Payments.

Explanation of Standard Object (1) Terms

Because Standard Object (1) is broken down into subcomponents, the following explanations may be of assistance in extracting the required information from your ARLU reference levels to complete this report.

(1) Personnel

Salaries and wages : This refers to the amount identified in the Personnel operating input factors from the 2007–2008 ARLU reference level. It should be displayed under the voted column.

Note: Salaries associated with revolving funds must be displayed under the statutory column.

Contributions to Employee Benefit Plans (EBP) : For most departments and agencies, a separate entry representing EBP is required. EBP funds must be displayed under the statutory column.

Capital Salaries and Wages :  This refers to any personnel costs included in the “capital” input factor identified in the ARLU. This should be displayed under the voted column.

Expenditures Internal to the Government Report

This report provides an estimate of your department’s transactions with other government entities. The information provided is not in addition to the standard objects of expenditure report but part of it . It is also recognized that the data provided will be tentative. Crown corporations are not required to complete this table.

To begin, you may wish to use the internal transactions breakdown reported or sent to Public Works and Government Services Canada for the purposes of the 2006–2007 Public Accounts, along with adjustments that take into account any known significant changes.

This data will be accumulated on-line by department but will be displayed in the Main Estimates on a government-wide basis at the gross expenditure level as a supplementary entry in the “Budgetary Main Estimates by Standard Object of Expenditure” table.

Annex C

EXPLANATION OF YEAR-OVER-YEAR RESOURCE CHANGES

As part of submitting your Main Estimates manuscripts, you must include explanations for the change in the 2007-2008 Main Estimates over the Main Estimates approved for 2006-2007.   These explanations are used to prepare news releases and Part I of the Main Estimates, entitled The Government Expense Plan.   The explanations you provide also serve to address any questions that the Senate Committee on National Finance may have for the President of the Treasury Board or Treasury Board officials who appear before the Committee after Main Estimates are tabled.   It is therefore important that these explanations be consistent with those you may prepare for your own Minister’s appearance before any parliamentary standing committee.

Potential changes to the presentation of Part I of the Estimates may require additional information from departments.   The Secretariat will be sending out further instructions regarding this, if required.

Since year-over-year variances are cumulative and can represent the impact of successive Annual Reference Level Update (ARLU) adjustments, you will need to examine not only the changes approved through the recently completed 2007-2008 ARLU, but also those approved through two previous ARLUs (2005-2006 ARLU and 2006-2007 ARLU.   The past two ARLUs impact on the year-over-year change in 2007-2008 over 2006-2007 only to the extent that any changes in those two ARLUs had a different impact in 2007-2008 than in 2006-2007.   Without reference to all three ARLUs, it will be impossible for you to correctly identify the items that explain the year-over-year change.   Funding approved through the Supplementary Estimates has no impact on the year-over-year change in Main Estimates.

The Main Estimates on-line system produces a table that identifies variances of three types:

1. non-budgetary variance (loans, investments and advances)
   
2. variance by Program Activity
   
3. budgetary variance by expenditure category (i.e. operating - which includes EBP, capital, grants, contributions and other transfer payments, revenue credited to the vote)

It is particularly important to describe significant changes in non-budgetary expenditures appropriately since the information you provide will be highlighted in news releases and background information related to the tabling of Main Estimates as well as in The Government Expense Plan.

Your explanations of variances by Program Activity and by expenditure category should be consistent (refer to the same items), except where the explanation involves a reallocation from one program activity to another or from one expenditure category to another.   For example, if your explanation of variance in grants includes a $10 million increase related to a new initiative, one would expect to see that same initiative mentioned in the explanation of variance for one or more Program Activities.   On the other hand, if the $10 million increase in grants had been funded through a transfer from contributions in an ARLU, one would expect to see it as part of an explanation of variance in both the grants expenditure category (an increase) and the contributions and other transfer payments expenditure category (a decrease), but not necessarily in the Explanation of variance by Program Activity (unless it came from contributions in one Program Activity and into grants in another Program Activity).

The explanations of variance should include all changes of one million dollars or more.   It is understood that application of this threshold may well result in explanations that do not total the amount of the variance.   The explanations should describe the nature of the change in a complete though succinct manner, using the official name of initiatives, without the use of acronyms.   Explanations of increases should be listed first, in descending order, followed by decreases.   References to legislation should display the name in italics.   Examples of explanations of variances that provide the appropriate information follow:

(part of an explanation of a variance in contributions)

• An increase of $8.1M for the Official Languages Program to reflect the renewal of the Program.   Funding was originally provided in 2003 for implementing an action plan for official languages with the accent on minority-language education and second-language instruction and promoting the development of the French-speaking and English-speaking minorities and access to services in their own language in various fields, and health in particular.

• The reallocation of resources from the Support to Communities program activity to the Support to Business program activity does not mean that support to communities is being reduced.   Rather, the Corporation anticipates that many community projects can likely be funded by ACOA through one of its community-oriented programs such as the Strategic Community Investment Fund or the new Innovative Community Fund, thereby freeing up resources that can be directed to commercial projects under the Support to Business program activity.   The organization typically assesses each project proposal, identifies whether or not the project is eligible for funding from one of the existing ACOA programs, and if not, then funds the non-commercial project itself. The result is that a smaller proportional share of the organization’s projects ends up being community-related because many of those needs are being met first through ACOA programs.

• An increase of $9.1M in the International Security program activity to enhance security at Canadian missions abroad through such measures as hiring new security guards, expanding the alarm system network and updating and expanding the Department’s secure communications networks;   (this explanation would also appear as part of the explanations of variances in operating and capital expenditures, since there was both an operating and a capital component)

 Annex D

INTERIM SUPPLY REQUIREMENTS

Parliamentary supply procedures call for the introduction of an interim supply bill in early March to cover financial requirements during the first three months of the new fiscal year until full supply can be obtained in June 2007.

All departments, agencies, and Crown corporations must submit an interim supply requirement, whether it be a confirmation that you are seeking the normal requirement (3/12ths) or that you are requesting additional proportions.

Each vote requiring additional proportions or twelfths beyond the normal 3/12 ths must be supported by an explanation (in both official languages). You are reminded that 11/12 ths is the maximum number of proportions that can be obtained through interim supply.

The call for additional proportions is generally due to an extra-ordinary need for cash and as a result operating votes are less likely to require additional proportions than capital or grants and contribution votes.   Accordingly the following explanation samples are more capital or grant and contribution oriented.

Explanations

Each explanation should consist of no more than one or two paragraphs . The following samples of explanation notes may be used in the preparation of your submission. These examples may be revised or supplemented as required.

Sample explanations:

• To provide for payments to territorial governments in accordance with the agreed financial arrangements.
  
• To cover the cost of completing the construction of an administration building in Manitoba. This project was originally scheduled for completion in early fall but will now be completed in late summer, due to greater than expected progress being made during the spring months. As a result, the construction contract should be paid before we receive full supply and incur interest costs.
  
• To provide for the payment of $313,160 of the $400,000 included in the Estimates for payment of research grants. It is customary to pay these grants to the various universities once the awards have been made by the University Grants Committee, which usually meets in early spring.

Note that additional proportions can be requested only for items that are included in the Main Estimates and that your requirement and explanation(s) are due at the same time as your Main Estimates manuscripts.

Annex E

Government of Canada Digital Certificate

Departments, agencies, and Crown corporations are required to submit their
2007-2008 Main Estimates manuscripts and other related documentation on-line via the Expenditure Management Information System (EMIS) Publiservice Web site at http://www.tbs-sct.gc.ca/emis-sigd/index_e.asp.

Departments, agencies, and Crown corporations that do not have access to Publiservice web site must contact the EMIS Help Centre by telephone at (613) 948-1901 or by e-mail at emis-sigd@tbs-sct.gc.ca.

All users of the Main Estimates on-line application must be in possession of a Government of Canada digital certificate (PKI certificate).

Renewal of PKI certificates

Users who currently have a PKI certificate and have utilized it recently (i.e. the 2007-2008 ARLU exercise) can continue to use it to access the Main Estimates on-line. Users who had a PKI certificate from last year and have not had an opportunity to utilize it this year, should try to log into the system to ensure that it is still valid.   Normally PKI certificates expire after 6 months of inactivity. If the PKI certificate is invalid, please contact the EMIS Help Centre for assistance.

New PKI Certificates

New users must contact the EMIS Help Centre to obtain a valid user name and password.   Users located in the National Capital Region (NCR) must make the request through the EMIS Help Centre by telephone at (613) 948-1901 or by e-mail at .

Users outside the NCR must contact their departmental/agency security division Local Registration Authority (LRA) for the cost and process associated with obtaining a digital certificate. Departments that do not have an LRA must contact the EMIS Help Centrefor assistance.  

New users are advised to contact the EMIS Help Centre as soon as possible, as a minimum of 48 hours will be required to generate a digital certificate, user name and password.