The Canadian federal government is composed of over 175 departments, agencies, Crown corporations, commissions and other organizations.
The mandates of these organizations is usually set out in founding legislation, and the general roles and responsibilities of the organizations can often be inferred from their name, for example, Health Canada and Environment Canada have overall responsibility for the federal role in health and the environment, respectively.
In order to try to manage this large and diverse set of organizations, the federal government has four central agencies: the Prime Minister’s Office, the Privy Council Office, the Treasury Board of Canada Secretariat, and the Department of Finance.
The term “central agency”has no formal definition and does not reflect a definitive classification. Instead, the term is generally used to designate organizations that have a central coordinating role. These organizations work across government departments to provide advice to the prime minister and Cabinet and to ensure policy coherence and coordination on their behalf. Central agencies have either formal or informal authority over other departments and often direct their actions. Line departments, on the other hand, provide services directly to Canadians and do not have the authority or mandate to direct other departments in their operations.
The roles and responsibilities of central agencies, with their coordinating functions, are often not well understood. The goal of this paper is to explain the key roles and responsibilities of each central agency and to discuss issues facing each of them.
Prime Minister’s Office
The Prime Minister’s Office, often referred to as the
PMO, serves the political interests of the prime minister. It is staffed by partisan loyalists who hold their position at the pleasure of the prime minister.
The PMO assists the prime minister in fulfilling his or her roles as a member of Parliament, head of government and leader of a political party.
The size and structure of the PMO change with each prime minister. Originally, the PMO was a small group of exempt political staff who served the prime minister personally. Under Lester Pearson, the PMO had approximately 40 employees, and under Brian Mulroney it had almost 200 employees.
At the dissolution of the 39th Parliament, the PMO had just under 80 employees, and in 2007–2008, it cost $7.6 million.
B. Roles and Responsibilities
The precise role of the PMO depends upon the wishes of the prime minister. Generally, the PMO assists the prime minister by:
- providing advice on priorities, the political implications of policy initiatives, and political strategy and tactics;
- planning and coordinating new policy initiatives of interest to the prime minister;
- monitoring emerging issues;
- organizing the prime minister’s time, travel and scheduling;
- managing communications with the media;
- advising on personnel and appointments;
- screening and responding to correspondence;
- liaising with ministers and their offices, caucus members and the political party machinery across the country; and
- preparing the prime minister for Question Period in the House of Commons and other public engagements.
The PMO does not have statutory authority of its own; instead, it derives its authority from the prime minister, who wields considerable power. The prime minister is responsible for recommending the appointment of ministers, secretaries of state, parliamentary secretaries, deputy ministers, heads of agencies, and other senior public service personnel.
The prime minister also has significant authority as the head of his or her political party. This means that senior PMO staff have a great deal of influence when dealing with ministers, senior public servants or members of the prime minister’s party. However, as these staff members are not elected, there is some debate about whether these individuals wield too much influence and what their appropriate relationship with the public service should be.
Nonetheless, in order to effectively implement the prime minister’s agenda, the PMO must work closely with the Privy Council Office, which is the public service organization that serves the prime minister.
Privy Council Office
The Privy Council Office (PCO) is sometimes called the prime minister’s department because it reports directly to the prime minister.
Unlike the PMO, the PCO is staffed by public servants who offer non-partisan, but politically sensitive, service and advice. The PCO is headed by the Clerk of the Privy Council and Secretary to the Cabinet. The clerk is the head of the public service and is appointed by the prime minister.
The size and structure of the PCO is generally stable, but some changes may be made to suit the needs of the government. For example, the PCO adjusted when, in 1975, the Federal-Provincial Relations Office became a separate department, and again in 1993 when the office was reintegrated into the PCO. Also, if the Cabinet committee structure changes, then PCO must change to best serve that structure.
The PCO’s planned spending for 2009–2010 is just over $133 million, and it has the equivalent of 978 full-time employees.
Many PCO staff members do not spend their careers at the PCO but temporarily rotate into the PCO before returning to work at line departments.
B. Roles and Responsibilities
The PCO has three main roles, each of which will be discussed in turn:
- to provide non-partisan advice to the prime minister and ministers whose functions lie within the prime minister’s portfolio;
- to support the Cabinet decision-making process; and
- to act as the principal link between the prime minister and the public service.
To support the prime minister’s responsibility for the overall policy direction of the government, the PCO assists the prime minister in strategic policy planning, ensuring coordination of the government’s policy objectives, and managing major issues. For example, the PCO assists the prime minister in writing the Speech from the Throne and works closely with the Department of Finance when it prepares the budget to ensure that the budget reflects the priorities of the prime minister and Cabinet.
The PCO provides policy advice to the prime minister in specific areas where direct public service support for the prime minister is required. This includes foreign affairs, defence, national security, and intergovernmental affairs. It may also include other policy issues of particular concern to the prime minister.
The PCO advises the prime minister on machinery-of-government issues (e.g., whether to create new departments or to restructure current ones), governor-in-council appointments (e.g., deputy ministers and heads of agencies) and constitutional matters.
Additionally, the PCO provides support to the other ministers within the prime minister’s portfolio: the Leader of the Government in the Senate, the Leader of the Government in the House of Commons, and the Minister of Intergovernmental Affairs.
2. Support to Cabinet
The PCO acts as the secretariat for Cabinet as a whole and the committees of Cabinet (except Treasury Board, which has a separate secretariat that is discussed below). As the secretariat, the PCO arranges meetings, proposes and circulates agendas, distributes documents, provides advice to committee chairpersons, and records Cabinet minutes and decisions.
The PCO works with departments on their proposals to Cabinet, called Memorandums to Cabinet, or MCs, and transmits subsequent Cabinet decisions to departments. This role means that PCO challenges departmental submissions to Cabinet to ensure that they meet the information needs of Cabinet and submissions are consistent with the government’s overall policy direction. The PCO ensures that all ministers and their officials who ought to be interested in a policy proposal are given an opportunity to consider it in advance and to express their views. The PCO also makes sure that departments coordinate their efforts with respect to issues to be presented to Cabinet that cut across departments.
Once Cabinet has made a decision, the PCO generally does not take an active role in its implementation; putting the decision into effect is left to line departments. The PCO does, though, monitor progress against the government’s broad policy commitments as stated in the Speech from the Throne and other policy statements, such as the budget.
It should be noted that because the PCO is primarily involved in issues that are before Cabinet or are of interest to the prime minister, it tends not to coordinate issues without Cabinet or prime ministerial direction. For example, while issues with respect to Canada’s Aboriginal peoples involve many different departments, the PCO is not responsible for ensuring coordination and collaboration among the many related government programs, unless it is directed to become involved by Cabinet or the prime minister.
In other words, the fact that the PCO is a central agency does not mean that it is centrally involved in all issues.
3. Link to the Public Service
The Clerk of the Privy Council and Secretary to the Cabinet is the head of the public service. As such, he or she is responsible to the prime minister for the overall performance and effective management of the public service. The clerk advances the government’s public service management agenda, provides advice on the appointment of senior public service personnel, serves as the spokesperson for the public service, and prepares an annual report on the state of the public service.
The PCO does not have formal authority over line departments, but its roles in assisting the prime minister and Cabinet give it substantial influence. Line departments must consider the advice of the PCO very carefully because the advice generally reflects the wishes of the prime minister or Cabinet. In addition, because the PCO acts as a gatekeeper for the information that is made available to Cabinet, departments must ensure that their submissions reflect the PCO’s guidance. The PCO often filters or summarizes information provided by departments to ensure that the prime minister and Cabinet have adequate supporting information to make informed decisions.
The PCO strives to maintain an independent, non-partisan perspective that allows it to balance serving successive governments and working closely with the prime minister, the PMO, and Cabinet in order to assist them in implementing their agenda. However, some have questioned how effectively the PCO maintains that balance, asserting that sometimes senior public servants in the PCO become too close to the prime minister of the day and his or her political staff.
Treasury Board of Canada Secretariat
The Treasury Board is a committee of Cabinet composed of the president of the Treasury Board and four other ministers appointed by the prime minister. The Treasury Board is often called the government’s management board and has diverse responsibilities for government administration, as outlined in the Financial Administration Act and other Acts.
The Treasury Board is assisted in fulfilling its responsibilities by a department called the Treasury Board of Canada Secretariat. The Secretariat is headed by the secretary of the Treasury Board, who is the equivalent of a deputy minister. In 2009–2010, the Secretariat has a budget of $2.3 billion ($2.1 billion of this is related to centrally administered funds for public service pensions, benefits and insurance, and $212 million is directly related to the Secretariat’s operations) and the equivalent of 1,714 full-time employees.
The Secretariat also includes the Office of the Comptroller General of Canada, which is responsible for providing government-wide direction and assistance on financial management and internal audit.
B. Roles and Responsibilities
The roles and responsibilities of the Treasury Board and its Secretariat can be grouped into three broad areas, which will be discussed in turn:
- setting management policies and monitoring management performance;
- overseeing expenditure management and performance information; and
- acting as the principal employer of the public service.
1. Management Policies and Performance
The Treasury Board, based on advice from the Secretariat, sets mandatory policies on ministers’ and deputy ministers’ use of their authorities to manage their departments. These policies ensure that there is a government-wide approach to managing selected administrative issues. The Secretariat groups the policies into eight categories: people (human resources); employee compensation; financial management; service delivery; information management and information technology; official languages; governance and expenditure management; and assets and acquired services.
The Secretariat provides departments with advice on the interpretation of policies and supports practitioners in the various policy areas. It also oversees adherence to Treasury Board policies.
The Secretariat monitors management performance through its Management Accountability Framework (MAF). The MAF is a set of management expectations for deputy heads, with associated indicators and measures of performance. Each year, the Secretariat conducts MAF assessments of departments’ success in fulfilling Treasury Board’s expectations and publishes the results of these assessments on its website.
(20) These assessments form a part of the evaluation of deputy ministers’ performance.
2. Expenditure Management
The Treasury Board oversees expenditure management within the federal government. The Treasury Board fulfills this role by reviewing submissions from ministers for funding for policy initiatives, conducting an ongoing review of existing programs, and presenting financial and performance information to Parliament.
On behalf of their departments, ministers submit proposals to the Treasury Board seeking approval to allocate resources to policy initiatives previously approved by Cabinet or included in a
This could include funding for new initiatives or additional funding for existing initiatives.
A submission to the Treasury Board provides detailed information about how the initiative will be funded, how it will be designed and implemented, what results the department expects the initiative to achieve, and how the department will monitor and assess results. The Secretariat reviews and challenges submissions to ensure that they identify a cost-effective use of resources; incorporate appropriate safeguards to protect public funds; identify a suitable program design that conforms with relevant legislation, regulations and Treasury Board management policies; and identify a sound plan to measure and evaluate program performance. The Secretariat also provides advice to the Treasury Board ministers on submissions, including an overview of related issues and recommendations.
The Treasury Board reviews government spending through the Expenditure Management System. A key component of this system is the ongoing review of programs to identify opportunities for reallocations to higher priority programs.
Using financial and performance information supplied by departments, the Treasury Board and its Secretariat examine existing programs to determine whether they are achieving their intended results, are economically and effectively managed, and are appropriately aligned with the government’s priorities and federal responsibilities.
The president of the Treasury Board presents the government’s spending plans, called the Estimates, to Parliament for approval as part of an appropriation bill.
The Secretariat prepares the Main and Supplementary Estimates and provides guidance to departments for the preparation of their Reports on Plans and Priorities (RPPs) and their Departmental Performance Reports (DPRs, which link financial and performance information. In coordination with the Department of Finance Canada, the Secretariat establishes how the Public Accounts, which details the government’s actual spending in the previous fiscal year, should be kept and recorded.
3. Principal Employer
The Treasury Board acts as the principal employer for the federal government. This means that it is responsible for labour relations, collective bargaining, and pension and benefits across the government.
The Secretariat assists the Treasury Board by developing policies on human resources management in such areas as compensation and pay administration, occupational health and safety, and employee entitlements and leave.
In 2003, certain human resources responsibilities, such as human resources planning and accountability, classification, employment equity, values and ethics, and official languages, were moved from the Secretariat to the Canada Public Service Agency. In February 2009, these responsibilities were consolidated back into the Secretariat, under the authority of the Chief Human Resources Officer.
A key issue for the Treasury Board and its secretariat is the degree to which they exercise central control over government administration and spending or provide more discretion and flexibility to departments, what might be called “letting the managers manage.” The Treasury Board has a mandate to ensure appropriate administration and financial management within the federal government, but it needs to balance this with due regard for ministerial responsibility and accountability for departmental administration. Additionally, the need to set general rules and guidelines for administration must be balanced with the ability of managers to have sufficient flexibility to innovate and take risks.
The current model of Treasury Board as a management board is fairly decentralized, and the Secretariat exercises selective oversight based upon risk. However, this has led some to question how effective the Secretariat is at ensuring that departments and agencies adhere to Treasury Board policies and thereby follow good management practices.
The Department of Finance Canada
The Department of Finance Canada reports to the minister of Finance and assists the minister in developing the government’s financial framework in which overall spending takes place, and it advises the minister on fiscal policy. While the Department of Finance does not have the same coordinating role as other central agencies, it is a central actor in virtually all policy decisions, because the allocation of funds from the fiscal framework is almost always required to proceed with a policy initiative.
The Department of Finance is established under the Financial Administration Act and is provided authorities under numerous other Acts, such as the Customs Act, Excise Tax Act, and Income Tax Act.
The department’s total budget in 2009–2010, the department has a budget of approximately $83 million and it has the equivalent of 765 full-time employees.
B. Roles and Responsibilities
The Department of Finance is the federal government’s leading source of economic analysis and advice. It tracks the economic situation of Canada as a whole, of the provinces and of other countries, and it provides advice to the minister of Finance in such diverse areas as fiscal policy, taxation policy, industrial policy, development policy and trade agreements.
The most prominent role of the department is that of assisting the minister in developing the annual budget, which is normally presented to Parliament in late February, although there is no requirement to do so. The budget is a statement of the government’s fiscal plan in light of its current and expected financial situation. It outlines the government’s projected revenues, incorporating any changes in taxation and spending, and announcing new spending plans.
In order to develop the budget, the Department of Finance must undertake a detailed analysis of the country’s current and projected economic and financial condition. Using its analysis, as well as private sector analyses, the department prepares a forecast of the growth rate of the economy.
This forecast guides the department when it predicts the government’s revenues, expenditures and debt requirements for the coming years. In addition, the department must examine the potential effects of proposed government policies on the economy. Within the context of these projections and analyses, the department sets out the government’s fiscal framework, that is, the fiscal room available to consider new tax measures, new spending initiatives or the enhancement of current programs. At the same time, the department sets guidelines for reallocating or reducing spending on programs or transfers to individuals and provinces.
Based upon the Speech from the Throne, policy statements, or priorities of the government, departments develop and submit proposals to the Department of Finance for consideration of inclusion in the budget. Officials at the Department of Finance closely examine the proposals to ensure that departments are being economical and fiscally responsible when making requests for new or additional funding. (The department also reviews proposals that may be recommended for funding and announced outside of the budget.) In addition, the department prepares proposals on taxation policy for the minister of Finance to consider for inclusion in the budget or to be announced when it is deemed appropriate.
The minister of Finance, in close cooperation with the prime minister and supported by the deputy minister of Finance and the Clerk of the Privy Council, decides which proposals to include in the budget. Once measures are announced in the budget, departments must provide detailed submissions for Treasury Board approval in order to receive funding, as discussed above, and then seek Parliament’s approval for funding through the Estimates process.
While the most recognized document prepared by the Department of Finance is the annual budget, the department prepares several other important publications, such as the Annual Financial Report of the Government of Canada, the Fiscal Monitor, and the Economic and Fiscal Update statement.
The Department of Finance is also active in a number of other areas. The department assists the minister in:
- developing tax and tariff policy and legislation;
- managing federal borrowing on financial markets;
- administering major transfers of federal funds to the provinces and territories;
- developing regulatory policy for the country’s financial sector; and
- representing Canada within international financial institutions and groups, such as the International Monetary Fund, the World Bank, and the World Trade Organization.
The Department of Finance maintains a broad socio-economic analytical capacity, conducting studies in such areas as labour economics, industry-specific issues, monetary policy, financial institutions, income security, and productivity.
The Department of Finance has considerable authority and earns its place as a central agency within the federal government through its role in developing the budget. Line departments must go through the Department of Finance in order to be given room within the fiscal framework to launch new spending initiatives or to increase funding to ongoing programs. Efforts to have broader Cabinet involvement in the budget process – the Public Expenditure Management System in the mid-1980s and Program Review in the mid 1990s – appear to have been short-lived, as they involved considerable time, cost and administrative effort.
Consequently, the minister of Finance’s control over the allocation of spending makes him or her one of the most powerful ministers in Cabinet.
The central agencies of the federal government – the Prime Minister’s Office, the Privy Council Office, the Treasury Board of Canada Secretariat and the Department of Finance – play a key role in the federal government’s decision-making processes and administration. They work to ensure policy coordination, good administrative practices, and prudent fiscal management. Their status as central agencies gives them considerable influence and authority, though, with the exception of the Treasury Board Secretariat, this is owing to their proximity to the prime minister and Cabinet or control over the purse strings rather than their having formal authority to direct line departments. Nonetheless, each of these organizations must balance a centralization of control and authority with sufficient flexibility and autonomy to allow line departments to effectively manage issues, innovate and take risks within their domains of responsibility.
Most parliamentarians do not have regular contact with officials from the central agencies, because committees of the Senate and the House of Commons tend to examine the policies and the administration of line departments, rather than those of central agencies. However, if parliamentarians would like to see greater coordination of program design and delivery among departments, have more detailed financial and performance information, or know more about the government’s fiscal policies and decisions, then they may wish to ask central agency officials to more fully explain what their roles are and how they may help parliamentarians access the information needed to effectively hold the government to account.
† Library of Parliament Background Papers provide in-depth studies of policy issues. They feature historical background, current information and references, and many anticipate the emergence of the issues they examine. They are prepared by the Parliamentary Information and Research Service, which carries out research for and provides information and analysis to parliamentarians and Senate and House of Commons committees and parliamentary associations in an objective, impartial manner. [ Return to text ]