Commissioner of the Environment and Sustainable Development Comments on the Draft Federal Sustainable Development Strategy

7 June 2010

The Honourable Jim Prentice, P.C., M.P.
Minister of the Environment

Les Terrasses de la Chaudière, North Tower
10 Wellington Street, 28th Floor
Gatineau, Quebec  K1A 0H3

Dear Minister:

I am pleased to provide you with my review and comments on the government’s draft federal sustainable development strategy, entitled Planning for a Sustainable Future: A Federal Sustainable Development Strategy for Canada, Consultation Paper, which I received from Environment Canada on 16 March 2010. I am providing this review and comments according to the duties set out under the Federal Sustainable Development Act of June 2008. (Annex 1 of this document summarizes these duties.)

The observations and comments that follow are based solely on a review of the draft federal sustainable development strategy that Environment Canada provided to me. My colleagues and I spoke with senior officials at Environment Canada to ensure that we correctly understood key points in the draft strategy. However, we did not carry out additional examinations or interviews to determine whether the management systems necessary to actually assess and report progress on the targets and implementation strategies are in place. Therefore, this is not an audit or assurance report.

The following are the key observations from our review of the federal government’s draft sustainable development strategy.

• The development of a federal sustainable development strategy represents an important opportunity to correct a long-standing weakness in the federal government’s approach to sustainable development. The absence of a single or overarching set of sustainable development objectives for the government as a whole was noted in several of our past reports. For the first time, the federal government has produced a draft strategy that proposes a single or overarching set of goals for the entire government. An overarching strategy is welcome both to help set Canada on a sustainable development pathway and to ensure policy coherence.
• The draft strategy emphasizes using the Expenditure Management System (EMS), as well as mechanisms such as the Speech from the Throne, Treasury Board submissions, and memoranda to Cabinet, to improve the transparency and accountability of environmental decision making for Parliament. References in the draft strategy to planning and reporting within the Expenditure Management System are welcome, as are the proposed use of SMART (specific, measurable, achievable, results-oriented, and time-bound) criteria to set targets, and the Canadian Environmental Sustainability Indicators to measure outcomes. However, there are no proposed changes to current EMS requirements or practices, and there is no description of what is expected in relation to environmental decision making, transparency, and accountability, and little detail as to how these objectives will be measured. Therefore, it is unclear how use of the existing EMS, as proposed in the strategy, will make environmental decision making more transparent and accountable to Parliament, as called for in the 2008 Federal Sustainable Development Act.
• We also note that only 10 of the 28 departments and agencies subject to the Federal Sustainable Development Act are referred to in the draft federal strategy in relation to implementation. Section 9(2) of the Act states that the federal sustainable development strategy shall identify the Minister responsible for meeting each target. While each of the 10 departments and agencies mentioned in the draft strategy is responsible for aspects of implementation, none is identified as having overall responsibility for meeting each target, as required by the Act.
• Further, since the draft strategy lists implementation strategies for these 10 departments and agencies, it is not clear what they are expected to include in their own sustainable development strategies, which are required by next year. It is also unclear what is expected of the 18 departments and agencies that are not specifically mentioned in the draft strategy. Given the importance that the draft strategy attaches to government-wide approaches and the Expenditure Management System, and the prominent roles played by the Department of Finance Canada and the Treasury Board of Canada Secretariat in these areas, it is noteworthy that their roles in the draft strategy are not defined. The omission of development-oriented departments and agencies, such as Industry Canada, Foreign Affairs and International Trade Canada, and the economic development agencies, is also noteworthy.
• The need to integrate economic, environmental, and social objectives in decision making is noted in section 5 of the Act as a basic principle of sustainable development. Section 9(1) says that the strategy is to be based on the precautionary principle. The draft strategy does not address either integration or the precautionary principle. We are therefore concerned that the draft strategy represents a departure from the basic principles of sustainable development referenced in the Act and may impede the integration of economic, environmental, and social objectives in decision making.
• We are required to comment on whether the targets and implementation strategies in the draft strategy can be assessed. The Annex to the draft strategy provides a snapshot of the government’s existing goals and targets related to 4 environmental themes—climate change and air quality, water quality and availability, nature, and the environmental footprint of government operations. There are 8 goals, 23 targets, and some 200 existing initiatives listed in the Annex. Based on our review of the targets and implementation strategies, we have determined that approximately 30 percent of the targets and 5 percent of the implementation strategies are time-bound within the first 3-year strategy cycle. Many of the targets and implementation strategies lack specific results expectations, baselines, benchmarks, or performance indicators. In some instances, there are no targets for achieving strategy goals. This will make it difficult for Environment Canada to provide Parliament with a comprehensive and objective assessment of progress on the strategy, as required by the legislation. In our view, while an activity report may be possible, progress toward the goals and targets cannot be objectively assessed based on the information provided in the draft strategy.
• A number of steps, if taken, would improve the final version of the strategy. In addition to ensuring that SMART targets are included for each of the goals in the strategy, it will be important that the final strategy clarify the following:
  • the government’s expectations in relation to environmental decision making, and the specific steps that will be taken to make it more transparent and accountable to Parliament;
  • the roles of the Department of Finance Canada and the Treasury Board of Canada Secretariat in strategy implementation;
  • the significance of the sustainable development principles referred to in section 5 and section 9(1) of the Act and how they will be put into practice in relation to environmental decision making;
  • an explanation of the Canadian Environmental Sustainability Indicators (noted in the draft strategy), which targets and goals they relate to, what will be done to ensure that they provide the data and information necessary to assess progress, and the logic or results chain that connects progress on the implementation strategies with changes in the indicators; and
  • what the government expects of the 18 departments that are subject to the Federal Sustainable Development Act but are not specifically referred to in the federal strategy in relation to its implementation.

In informal discussions with Environment Canada following the release of the draft strategy, we made a number of observations. In a response sent to us based on those informal discussions, the Deputy Minister has provided additional detail on elements of the strategy and made several commitments to address—in consultation with the Treasury Board of Canada Secretariat and the Privy Council Office—our key observations noted in this letter. The Deputy Minister’s response of June 1st, 2010 is attached in Annex 3. We view the details and commitments set out in the response to be a positive development. We look forward to the release of the final strategy, following the conclusion of the public consultation period and final decision by the Minister. I will comment on the final version of the federal strategy in future reports to Parliament.

The remainder of this letter describes the approach used for this review and provides our more detailed observations and comments on the draft federal strategy.

Yours sincerely,

Scott Vaughan
Commissioner of the Environment and
Sustainable Development

Enclosures

c.c.:   

Honourable David Angus, Senator
Chair, Standing Senate Committee on Energy, Environment and Natural Resources

Mr. James Bezan, M.P.
Chair, Standing Committee on Environment and Sustainable Development

Review Approach, Detailed Observations, and Comments on the Draft Federal Sustainable Development Strategy

1. Section 3 of the Federal Sustainable Development Act (the Act) states, “The purpose of this Act is to provide the legal framework for developing and implementing a Federal Sustainable Development Strategy that will make environmental decision-making more transparent and accountable to Parliament.” The Commissioner of the Environment and Sustainable Development is required to review a draft of the federal sustainable development strategy and comment on whether the targets and implementation strategies can be assessed.

2. We reviewed Environment Canada’s draft sustainable development strategy with two main questions in mind. First, does the draft strategy address the provisions of the Act in a way that would make environmental decision making more transparent and accountable to Parliament? And second, can the targets and implementation strategies set forth in the draft strategy be objectively assessed?

3. Considering whether the draft strategy addresses the provisions of the Act, we reviewed the document in light of key sections and sub-sections of the legislation.

4. Considering our second question, we examined the targets and implementation strategies in the draft strategy to determine whether they are specific, measurable, achievable, results-oriented, and time-bound (SMART) such that progress on their implementation could be objectively assessed.

5. The so-called SMART criteria we used for our review are consistent with good management and planning practices set out in past reports of the Office of the Auditor General, as well as with quality and environmental management systems standards established by the International Organization for Standardization (ISO). They are commonly used in strategic planning and performance management and are adopted in the government’s draft strategy. (Annex 2 of this document lists the SMART criteria.)

6. Our review was limited to an examination of the draft strategy that Environment Canada provided to us. We spoke with senior officials at Environment Canada to ensure that we correctly understood key points in the draft strategy. We did not interview other government officials in connection with our review, or carry out examinations of Environment Canada or other federal departments to determine whether they have put in place the management systems necessary to actually monitor and assess progress on the targets in the strategy. Therefore, this is not an audit or assurance report.

7. In the preamble to the draft strategy, the department asks for “guidance from Canadians on the basic structure of a government-wide strategy that will do a better job of incorporating environmental considerations into policy and program decisions in departments and agencies.” Our observations and comments on this are provided in section 3 of this document under “Further comments on the draft strategy.”

Detailed Observations and Comments

Does the draft strategy reflect the legislation?

8. Transparency and accountability. In keeping with section 3 of the Act, the draft strategy indicates that its purpose is to make environmental decision making more transparent and accountable to Parliament.

9. There is a rich literature on good management practices for improving transparency and accountability in environmental decision making, as well as a number of existing government processes for incorporating environmental considerations into policy and program decisions. The draft strategy makes no reference to such processes and practices or what is expected of federal departments and agencies in order to make environmental decision making more transparent and accountable.

10. There is no discussion of what environmental decision making entails or what the government means by transparency, and no mention of how existing decision-making tools, such as the federal environmental assessment process or the Cabinet directive on the environmental assessment of policy, plan, and program proposals, might promote more transparency and accountability.

11. Expenditure management system. The draft strategy presents a list of pre-existing federal government targets and implementation strategies in relation to four environmental themes, and proposes that departments plan and report on the implementation strategies through the Expenditure Management System. It asserts that the government’s existing goals presented in the draft strategy will evolve based on key commitments the government makes in the future.

12. However, there are no proposed improvements to the expenditure management system that might lead to the identification of environmental risks and goals, and there are no proposed improvements to accountability or reporting mechanisms that might compel departments to do anything more, or differently, in relation to environmental decision making and sustainable development, than what they have done in the past.

13. For example, there is no connection made between the listing of environmental initiatives in Annex 1 to the draft strategy and projected or actual government expenditures. Further, there is no discussion of how existing guidance and processes related to considering environmental aspects of policy and program initiatives in Treasury Board submissions or memoranda to Cabinet might be strengthened to enhance the information available to decision makers.

14. Given the importance that the draft strategy attaches to government-wide approaches and the Expenditure Management System, and the prominent roles played by the Department of Finance Canada and the Treasury Board of Canada Secretariat in these matters, for Environment Canada to “move sustainable development considerations to the core of government planning and reporting mechanisms,” it would have to fully engage Finance Canada and the Secretariat in its strategy. It is noteworthy that their roles in the draft strategy are not defined.

15. Responsibilities. We noted that only 10 of the 28 departments and agencies subject to the Federal Sustainable Development Act are specifically referred to in the draft federal strategy in relation to its implementation. While each of those 10 departments and agencies is responsible for aspects of implementation, none is identified as having responsibility for meeting a target, as required under section 9(2) of the Act.

16. Further, since the draft strategy lists implementation strategies for those 10 departments and agencies, it is not clear what they are expected to include in their own strategies, which are required by next year. It is also unclear what is expected of the 18 departments and agencies that are not specifically mentioned in the draft strategy. The omission of development-oriented departments and agencies, such as Industry Canada, Foreign Affairs and International Trade Canada, and the economic development agencies, is also noteworthy in a sustainable development strategy.

17. Reporting. We also noted the reference to the progress report on strategy implementation that is required once every three years under section 7(2) of the Act. Since departments and agencies are already obliged to plan and report annually on existing environmental spending and protection initiatives in the expenditure management system, the departments and agencies will have already reported progress on those activities by the time the government’s first progress report on the sustainable development strategy is due in 2011. It is unclear from the draft strategy that the government’s report on strategy implementation will amount to more than a summary of activities previously reported by departments.

18. While compiling a listing of existing environmental targets and activities and presenting them in the draft strategy may make it easier for parliamentarians to see what the government plans to do on certain issues, it is not the same thing as making environmental decision making more transparent and accountable.

19. In addition, since we already audit significant federal environmental programs and activities and we report to Parliament on how well they are being managed, auditing 28 departmental and agency sustainable development strategies consisting of those same programs and activities, as we are required to do under the Act, would seem of questionable value in improving accountability to Parliament.

20. It is difficult to see how this strategy, as currently drafted, would make environmental decision making more transparent and accountable to Parliament.

Can the targets and implementation strategies be assessed?

21. Annex 1 to the draft strategy includes a set of tables listing 8 goals, 23 targets, and 204 implementation strategies organized under 4 environmental themes.

22. We examined the documented targets and implementation strategies to determine whether they are specific, measurable, achievable, results-oriented, and time-bound (SMART) such that progress on implementation of the draft strategy could be objectively assessed.

23. We did not examine whether Environment Canada has developed systems and procedures to actually monitor progress on implementation of the federal sustainable development strategy, as it is required to do under section 7(1) of the Act.

24. We carried out this aspect of our review with two additional considerations in mind:

• that sustainable development involves a long-term commitment;
• that this strategy is the first in a continuing series of three-year plans for achieving sustainable development that the Minister must develop, according to section 9(1) of the Act.

25. In view of these considerations, we expected the government would set out a series of long-term goals for sustainable development linked to interim targets and implementation strategies that could be used to gauge progress in the first three-year strategy period.

26. As expected, the strategy contains long-term goals with time frames extending beyond the first three-year strategy period. In the majority of cases, the goals are linked to targets and implementation strategies. However, we noted that no targets were provided for several goals in the draft strategy.

27. In relation to the theme Addressing Climate Change and Air Quality, the strategy indicates that targets to support goal two—clean air for Canadians to breathe and to support healthy ecosystems—are under development, in consultation with provinces and stakeholders. Therefore there are no targets in the draft strategy in relation to this goal.

28. As well, no targets are presented in the draft strategy in relation to the fourth theme—Shrinking the Environmental Footprint of Government Operations, and there are no targets or implementation strategies related to making environmental decision making more transparent and accountable using the expenditure management system, which is the stated purpose of the draft strategy.

29. We also noted that the draft strategy refers to the role that the Canadian Environmental Sustainability Indicators are expected to play, asserting that “they will furnish half of the required indicators for assessing progress across the strategy’s targets.” However, no specifics are provided about the Canadian Environmental Sustainability Indicators. It is not clear from the draft strategy what they are, which targets they relate to, or how changes in the indicators can be attributed to progress on the implementation strategies.

30. Regarding the water quality goal in the draft strategy, Environment Canada’s April 2009 report on the Canadian Environmental Sustainability Indicators notes that there is no national network of water quality monitoring sites designed specifically for the purpose of reporting the state of Canada’s water quality. It further indicates that existing water quality monitoring sites do not comprehensively cover all geographic areas across Canada with potential water quality issues or problems.

31. Regarding the goal of reducing greenhouse gas (GHG) emission levels to mitigate the impacts of climate change, we reported in spring 2009 that Environment Canada has no monitoring system capable of tracking actual GHG emission reductions relative to each of the policy measures found in the government’s climate change plans.

32. There would appear, therefore, to be significant gaps in the government’s current capacity to objectively assess progress on targets set out in the strategy.

33. In our review of the targets and implementation strategies, the time-bound element of the SMART criteria is the most straightforward. To satisfy this criterion, a completion date for accomplishing the target or implementation strategy must be specified. We began our review by determining how many of the targets and implementation strategies satisfied this criterion.

34. Of the 23 targets set forth in the draft strategy, we determined that 14, or about 60 percent, are time-bound. We noted that the time frame for achieving 7 of those 14 targets extends beyond the 3-year period for this strategy and in 4 cases extends beyond the next 3 strategy periods.

35. Seven of the 23 targets in the draft strategy, or about 30 percent, are scheduled to be achieved within the first 3-year strategy period. However, in our judgment, none of those 7 targets satisfies all of the other elements of the SMART criteria so that they could be objectively assessed.

36. The implementation strategies are the continuing activities of departments in relation to existing environmental commitments such as, for example, conducting and disseminating research, ensuring compliance with environmental legislation, and providing advice and support. Of the 204 implementation strategies, 10 or approximately 5 percent are scheduled to be completed within the 3-year time frame for the strategy. In many cases, performance expectations for the implementation strategies are not sufficiently specific, measureable, results-oriented, or time-bound to allow an objective assessment of performance.

37. While it is evident that the individual implementation strategies are expected to contribute to the related target, it is not always clear how they contribute, whether some are relatively more important than others in achieving results or whether the government places more priority on some than others.

38. The limited number of targets and implementation strategies that are time-bound within the first three-year strategy cycle and the absence, in many cases, of specified performance expectations, baselines, benchmarks, or indicators will make it extremely difficult for Environment Canada to provide a comprehensive and objective assessment of progress in relation to this strategy, as required by the Act. In our view, while an activity report may be possible, progress toward the goals and targets cannot be objectively assessed based on the information provided in the draft strategy.

Further comments on the draft strategy

39. As the draft strategy rightly points out, sustainable development does not lend itself to quick fixes. A number of steps might be taken for the final version of the federal strategy to allow an objective assessment of progress.

40. First, given that the overall purpose of the strategy is to make environmental decision making more transparent and accountable to Parliament, the final strategy needs to clarify the government’s expectations in relation to environmental decision making and provide specifics on the steps that will be taken to make it more transparent and accountable to Parliament. SMART targets and implementation strategies are needed for this key component, as well as performance indicators or standards that will clarify expectations for environmental decision making and transparency, and allow those responsible for assessing progress to know when expected actions have been taken and results achieved.

41. Second, given that the Canadian Environmental Sustainability Indicators are expected to furnish half of the information necessary to assess progress on the strategy, it will be important to clarify what the indicators are, which targets and goals they relate to, and the logic or results chain that connects progress on the implementation strategies with changes in the indicators.

42. Third, there is insufficient information in the strategy as drafted to know whether gaps will be addressed in the ability of existing environmental monitoring systems and the Canadian Environmental Sustainability Indicators to provide the necessary data and performance information. Targets and implementation strategies for identifying and closing such gaps would be a first step in establishing the capacity to monitor and assess progress on the targets and goals in the strategy.

43. Finally, to assess overall progress on the strategy, as required under the Act, it will be important that this strategy clearly define what is to be accomplished in the first three-year strategy period, and ensure that those expectations are reflected in SMART targets and implementation strategies that can be objectively assessed.

44. Integrated decision making and the precautionary principle. In the preamble to the draft strategy, the government asks for “guidance from Canadians on the basic structure of a government-wide strategy that will do a better job of incorporating environmental considerations into policy and program decisions in departments and agencies.”

45. Section 5 of the Federal Sustainable Development Act is a useful starting point for guidance. It states, “The Government of Canada accepts the basic principle that sustainable development is based on an ecologically efficient use of natural, social and economic resources and acknowledges the need to integrate environmental, economic and social factors in the making of all decisions by government.” Section 9 of the Act states that the strategy is to be based on the precautionary principle.

46. In our view, the reference to “environmental decision-making,” in section 3, taken within the overall context of the Act, requires first, a description of environmental decision making, including how the sustainable development principles referred to in sections 5 and 9 will be put into practice, and second, specifics on the steps that will be taken to make environmental decision making more transparent and accountable to Parliament.

47. While the draft strategy states that a sustainable economy would require that environmental considerations inform every decision made, there is no description of how integrated decision making would be put into practice and only passing references to the precautionary principle. We are therefore concerned that the draft strategy as currently structured represents a departure from the basic principles of sustainable development referenced in the Act and may impede the integration of economic, environmental, and social objectives in decision making.

48. In its groundbreaking 1987 report Our Common Future, the World Commission on Environment and Development noted that “approaches to environment policy can be broadly characterized in two ways. One, characterized as the ‘standard agenda’ reflects an approach to environmental policy, laws and institutions that focus on environmental effects. The second reflects an approach concentrating on the policies that are the sources of those effects. These two approaches represent distinctively different ways of looking both at the issues and at the institutions that manage them.”

49. In its 1995 response to the first report of the House of Commons Standing Committee on the Environment and Sustainable Development, the government indicated that existing government policies, programs, laws, and regulations need to be reviewed for their consistency with sustainable development and with international commitments in the area of sustainable development. It also said that evaluations—both independent and internal—of new policies, programs, laws, and regulations for their consistency with sustainable development must be an integral part of their development.

50. Such a review, together with immediate and concrete measures to strengthen transparency and accountability in relation to environmental evaluations of policy, plan, and program proposals, could identify significant opportunities for incorporating environmental considerations into federal policies, laws, and programs. This approach could yield a more comprehensive set of sustainable development goals and targets for the federal government as a whole in time for the next strategy due in 2013.

Annex 1

Summary of Key Duties and Obligations Found In the Federal Sustainable Development Act

The Government

Under the Federal Sustainable Development Act of June 2008, the Minister of the Environment is required to prepare a federal sustainable development strategy based on the precautionary principle. The Act states that the federal sustainable development strategy “shall set out federal sustainable development goals, and targets and an implementation strategy for meeting each target and identify the minister responsible for meeting each target.” The Minister of the Environment is also obliged under the Act to table a progress report on strategy implementation in Parliament at least once every three years.

The Commissioner of the Environment and Sustainable Development

Three specific obligations are established under the Act for the Commissioner of the Environment and Sustainable Development. The Commissioner is required to

• review a draft of the federal sustainable development strategy and comment on whether the targets and implementation strategies can be assessed;
• report annually to the House of Commons on the extent to which the 28 federal government departments and agencies subject to the Act have contributed to meeting the targets set out in the federal sustainable development strategy and have met the objectives and implemented the plans set out in their own sustainable development strategies; and
• examine the progress report required every three years under section 7(2) of the Act in order to assess the fairness of the information contained in the report with respect to the progress of the federal government in implementing and meeting the targets of the federal sustainable development strategy.

Annex 2

Review of the Draft Federal Sustainable Development Strategy SMART Criteria

Specific

• Specific targets are clear, well-defined, and not ambiguous; the reader is able to identify what aspect of performance is being reported.
• Specific targets identify the target group who is to benefit from the results. 
• The extent of the results to be achieved is specified.
• Specific targets are understandable. The context is explained and there is no ambiguity in direction (for example, increase, decrease, maintain).
• Specific targets may include a scope description, which includes details of what is not included.

Measurable and Meaningful

• Measurable targets allow one to know when work has been completed and that the expected result has been attained.
• Measurable targets allow comparison over time or with other organizations, activities, or standards.
• Meaningful targets are aligned with implementation strategies and higher goals, and they are attributable to activities.

Achievable (relates to implementation strategies)

• Achievable targets ensure that the human and financial resources and tools necessary to achieve expected results are in place. (Are the human and financial resources necessary to achieve the targets specified in the implementation strategies?)
• Achievable targets ensure that it is feasible to get timely data and that if the objective is not achieved those responsible cannot reasonably point the finger elsewhere. (Do the implementation strategies for the targets specify performance indicators required to monitor progress, how the necessary data will be obtained or its source?)

Result-Oriented

• The results of government programs include the products and services provided by government programs and the benefits and other effects that they produce.
• Results-oriented targets focus more on the benefits and effects to be achieved for Canadians and society than on the related activities and outputs that contribute to their achievement.

Time-Bound

• The time frame for achieving the results is stated.
• Descriptions of targets should specify what is required by when. This may also include details of delivery, stating (if relevant) when milestones are to be completed.

Annex 3

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