Canadian Heritage’s quarterly financial report for the quarter ended September 30, 2022

On this page

• 1. Introduction
  • 1.1. Authority, mandate and programs
  • 1.2. Basis of presentation
  • 1.3. Canadian Heritage financial structure
• 2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results
  • 2.1. Statement of authorities
  • 2.2. Departmental budgetary expenditures by standard object
• 3. Risks and uncertainties
• 4. Significant changes in relation to operations, personnel and programs
• 5. Approval by senior officials
• Statement of authorities (unaudited)
• Departmental budgetary expenditures by standard object (unaudited)

Alternate format

1. Introduction

This second quarterly financial report should be read in conjunction with the 2022-23 Main Estimates and 2022-23 Supplementary Estimates A (nil for PCH) along with the 2021-22 Main Estimates and Supplementary Estimates A. It has been prepared by management as required by section 65.1 - Quarterly financial reports of the Financial Administration Act and is in the form and manner prescribed by the Treasury Board in accordance with the special purpose financial reporting framework described in the Directive on Accounting Standards: GC 4400 Departmental Quarterly Financial Report. The report has been reviewed by the Departmental Audit Committee.

The quarterly financial report outlines the results, risks and significant changes in operations, personnel and programs and includes financial information tables for the quarter. The purpose of the quarterly financial information tables is to provide a comparison of in-year departmental spending with authorities granted by Parliament, as well as comparative financial information for the preceding year.

1.1. Authority, mandate and programs

The Department of Canadian Heritage and its Portfolio organizations play a vital role in the cultural, civic, and economic life of Canadians. Our policies and programs promote an environment where Canadians can experience dynamic cultural expressions, celebrate our history and heritage, and build strong communities. The Department invests in the future by supporting the arts, our official and indigenous languages and our athletes and the sport system.

Further details on the Department of Canadian Heritage’s (PCH) authority, mandate and programs can be found in the 2022-23 Departmental Plan and the 2022-23 Main Estimates.

1.2. Basis of presentation

This second quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department’s spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates for the 2022-23 fiscal year.

The authority of Parliament is required before money can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts, or through legislation in the form of statutory spending authority for specific purposes.

PCH uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.3. Canadian Heritage financial structure

PCH has a financial structure composed of voted budgetary authorities that include Vote 1 – Operating expenditures and Vote 5 – Grants and Contributions, and Statutory authorities which are composed of contributions to employee benefits plans, Ministers’ Salary and motor car allowances and Statutory Payments for Lieutenant Governors.

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

2.1. Statement of authorities

Please refer to the Statement of Authorities at the end of the report for more information.

PCH’s 2022-23 authorities available for use at the end of September 2022 increased by $293.8 million, from $1,910.9 million in 2021-22 to $2,204.7 million at the end of this quarter. More specifically, the total authorities available for use increased by $278.1 million in Vote 5 - Grants and Contributions, increased by $13.7 million in Vote 1 - Operating expenditures and increased by $2.0 million in Statutory authorities.

To promote recovery from the pandemic for heritage, arts, and sport sectors that contribute so much to the cultural life of Canada, the 2020 and 2021 Fall Economic Statement and Budget 2021 allocated unprecedented investments to Canadian Heritage for a variety of programs. These range from supports to performing arts festivals and community-based cultural events, celebrations and commemorations to support for Canadian musicians, concert venues, producers, and distributors; funding for arts and heritage institutions to help upgrade their facilities to meet public health guidelines; and funding for community sports. In addition, Budget 2021 announced the $300 million Recovery Fund to help restore immediate viability for organizations with pandemic-related financial needs and help them adapt to post-pandemic realities and $200 million Reopening Fund to support local festivals, community cultural events, outdoor theatre performances, heritage celebrations, local museums, amateur sport events, and more, while ensuring events comply with local public health measures. Furthermore, Budget 2021 allocated investments to promote Official Languages and support Indigenous communities in their efforts to reclaim, revitalize, maintain and strengthen Indigenous languages. These measures explain the increase in authorities.

2.2. Departmental budgetary expenditures by standard object

Please refer to the Departmental budgetary expenditures by Standard Object table at the end of report for more information.

Total expenditures during the second quarter of 2022-23 increased by $63.5 million from $358.8 million in 2021-22 to $422.3 million this quarter.

• This increase is mainly explained with transfer payments which increased by $55.0 million, from $299.6 million in 2021-22 to $354.6 million in 2022-23, representing an overall increase of 18%. Here are some important variances by transfer payment program to note:
• Increases in the following transfer payment programs:
  • $59.4 million – Canada Periodical Fund – as mentioned in the first quarter, given the exceptional circumstances brought on by the hardships of the COVID-19 pandemic, efforts were focused on providing urgent support to deliver the Special Measures for Journalists to meet the department’s commitment to help Canadian periodicals as part of the Support of the Recovery of Cultural, Heritage and Sports Organizations announced in Budget 2021. In 2022-23, payments of the Aid to Publisher's stream of the Canada Periodical Fund have been made in the second quarter;
  • $27.5 million – Celebration and Commemoration Program – the increase in expenditures is due to the increased number of events held in 2022-23 as COVID-19 restrictions were lifted. A large portion of the increase is explained by the funding received in 2022-23 as part of the Support of the Reopening of Cultural, Heritage and Sports Organizations affected by COVID-19, announced in Budget 2021;
  • $11.1 million – Sport Support Program – the increase in expenditures is explained by new funding received from Budget 2021 for Indigenous Reconciliation and Strength for Indigenous Women and Girls through Sport for Social Development and Community Sport for All initiatives as well as new funding received for the Recovery for Cultural, Heritage and Sport Organizations affected by COVID-19;
  • 10.9 million – Indigenous and Languages Culture Program – the increase in expenditures is explained by the new funding received from Budget 2021 starting in 2021-22 for the Indigenous communities to reclaim, revitalize, maintain, and strengthen Indigenous languages. The funding levels increase between 2021-22 and 2022-23;
  • $9.7 million – Canada Art Presentation Fund – the increase in expenditures is explained by the funding received in 2022-23 as part of the Support of the Reopening of Cultural, Heritage and Sports Organizations affected by COVID-19, announced in Budget 2021. The increase is partially offset by the sunset of the one-year funding received in 2021-22 from the 2020 Fall Economic Statement for the “Supporting Arts and Live Events Workers in Response to COVID-19” initiative;
  • $9.5 million – Canada Performing Arts Workers Resilience Fund – the Canada Performing Arts Workers Resilience Fund is a new temporary program launched in February 2022 with a one-year funding provided for 2022-23;
  • $5.5 million – Development of Official Languages Communities Program and Enhancement of Official Languages Program – the overall increase in expenditures is due to the timing of payments;
  • $4.8 million – Museum Assistance Program – the increase in expenditures in this quarter is explained by new funding announced in Budget 2022 to support the Viability of Canadian Creative, Cultural and Heritage Organizations with the new Canada Arts and Culture Recovery Program (CACRP) initiative which will be delivered through existing Canadian Heritage programs, namely the Museum Assistance Program; and
  • $3.8 million – Community Support, Multiculturalism and Anti-Racism Initiatives Program and Anti-Racism Action Program – the overall increase in expenditures is mainly due to timing of payments being made earlier in 2022-23 than in 2021-22.
• Partially offset by decreases in the following transfer payment programs:
  • $73.9 million – Canada Media Fund – the decrease in spending is due to timing of payments which are expected in the third quarter of 2022-23; and
  • $17.2 million – Canada Music Fund – the overall decrease is explained by a one-year funding received in 2021-22 from the 2020 Fall Economic Statement for the “Supporting Arts and Live Events Workers in Response to COVID-19” initiative partially offset by an increase in payments for new funding announced in Budget 2022 to support the Viability of Canadian Creative, Cultural and Heritage Organizations with the new Canada Arts and Culture Recovery Program (CACRP) initiative which will be delivered through existing programs, namely the Canada Music Fund.
• The remaining variance of $8.5 million is explained by the increase in expenditure of the standard objects below:
  • Personnel: the $5.0 million increase (from $51.8 million in the second quarter of 2021-22 to $56.8 million in the second quarter of 2022-23) is mainly explained by an increase in the number of employees needed to support the implementation of initiatives resulting from new funding received from Budget 2021;
  • Rental: the $1.0 million increase (from $0.8 million in the second quarter of 2021-22 to $1.8 million in the second quarter of 2022-23) is explained by expenses related to the Canada Day celebrations that were held at official sites in the Canada’s Capital Region;
  • Transportation and communications: the $0.9 million increase (from $0.1 million in the second quarter of 2021-22 to $1.0 million in the second quarter of 2022-23) is mainly explained by the return to a normal course of activities after travel was suspended in 2021-22 and COVID-19 restrictions were lifted in 2022-23;
  • Professional and special services: the $0.8 million increase (from $6.5 million in the second quarter of 2021-22 to $7.3 million in the second quarter of 2022-23) is mainly explained by expenses in Information Technology consultants to advance departmental initiatives and by contracts to support the organization of the Canada Day celebrations; and
  • Information: the $0.5 million increase (from $0.5 million in the second quarter of 2021-22 to $1.0 million in the second quarter of 2022-23) is mainly explained by expenses related to advertising and audiovisual services to support the organization of events and activities such as the Canada Day celebrations in Canada’s Capital Region and Sound and Light Show.

As noted in the table below, PCH has spent 19% of its authorities in the second quarter of 2022-23, which is the same as last year’s consumption.

Expenditures compared to annual authorities (in millions of dollars) - text version

-	2022-23	2021-22
Total available for use	2,205 (100%)	1,911 (100%)
Used during the quarter	422 (19%)	359 (19%)
Year-to-date used	778 (35%)	716 (37%)

3. Risks and uncertainties

There is a risk that with increased expectations and an increasingly mobile workforce, the Department may not be agile enough to effectively support initiatives and projects as they arise, to provide effective service delivery, and to deliver on key priorities.

As the COVID-19 situation continues to evolve, PCH prioritizes the health of its employees and their families and implements the necessary measures to ensure their well-being in addition to efficient internal operations. PCH is actively contributing to public service-wide efforts to address this situation and work to maintain the quality of federal government services. The Department is also diligently monitoring emerging risks and ensures that mitigation measures are readily implemented.

4. Significant changes in relation to operations, personnel and programs

Since the Department’s first quarter of 2022-23, there were changes to Canadian Heritage’s senior management personnel.

Effective October 11, 2022, Gaveen Cadotte has been appointed Assistant Deputy Minister to lead the renewal of Canada’s Anti-Racism strategy and the development of the Action Plan on Combatting Hate.

5. Approval by senior officials

Approved by:

Original signed
Isabelle Mondou, Deputy Minister

Gatineau, Canada
Date: November 22nd, 2022

Original signed
Eric Doiron, Chief Financial Officer

Gatineau, Canada
Date: November 21st, 2022

Statement of authorities (unaudited)

Departmental budgetary expenditures by standard object (unaudited)

©His Majesty the King in Right of Canada, represented by the Minister of Canadian Heritage, 2022.
Catalogue No. CH2-4E-PDF
ISSN 2816-2730