An internal audit of the federal Department of Finance Canada’s policy arm reveals the shifting priorities that have gripped policy-makers since the financial crisis and calls on the branch to focus more on emerging risks and opportunities for financial sector innovation.
Finance Canada published a report on Tuesday detailing the results of an internal audit of its Financial Sector Policy Branch, which spends about $13.3 million annually on various policy issues. The audit, which was carried out between May and October of last year, evaluates the relevance and performance of the branch from fiscal 2010-11 to fiscal 2014-15. Overall, it found the branch to be doing a good job on both counts.
The Finance Canada report highlights the shifting demands that the branch has faced. For example, the branch ramped up its resources in response to the financial crisis, but has since been cutting back. Between fiscal 2008-09 and fiscal 2010-11, operating costs rose by 43%, and staffing (represented as full-time equivalent [FTE] employees) increased by 31%. Since then, operating costs have been reduced by 24% and total branch FTEs are down by 13%; thus, both are now essentially back down to 2008 levels.
The report reveals how policy priorities have shifted within the branch over that time as well. It notes that there was a broad-based increase in staffing in fiscal 2009-10 in response to the global financial crisis; and, that staffing also increased to launch a group to work on a common securities regulator in fiscal 2009-10 as well as the Task Force of Financial Literacy.
In fiscal 2010-11, a new Securities Policy Division was created to support the effort to establish a co-operative national regulator and the necessary legislation. Initially, that group involved eight FTEs, but it jumped to 15 in fiscal 2014-15. At the same time, staffing in the Financial Markets Division dropped to just four FTEs in fiscal 2014-15 from 15 FTEs in fiscal 2009-10. Staffing in most of the other divisions has more or less held steady.