Canadian Heritage’s quarterly financial report for the quarter ended December 31, 2019
On this page
- 1. Introduction
- 2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results
- 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)
This third quarterly financial report should be read in conjunction with the 2019-20 Main Estimates, Budget Implementation Vote items and Supplementary Estimates A approved as of December 31, 2019 along with 2018-19 Main Estimates, Budget Implementation vote items 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 GC4400 policy instrument. The third quarterly report has not been subject to an external audit or review.
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 (PCH) 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.
1.2. Basis of presentation
This third 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, Budget Implementation Vote items and Supplementary Estimates approved as of December 31, 2019 for the 2019-20 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
PCH’s 2019-20 authorities available for use at the end of the third quarter have increased by approximately $220.9 million when compared to the same quarter of 2018-19. More specifically, the total available for use increased by $209.0 million in Vote 5 - Grants and Contributions, $10.8 million in Vote 1 - Operating expenditures and $1.1 million in Statutory authorities.
The following table provides details on the changes in authorities observed from 2018-19 to 2019-20 at the end of the third quarter:
|Items||Vote 1||Vote 5||Statutory||Total|
|Funding for the Action Plan for Official Languages (2018-2023) (Budget 2018) and to support minority language education in Canada||6.4||78.4||0.1||84.9|
|Funding for Strengthening Multiculturalism (Budget 2018), for the New Anti-Racism Strategy temporary funding (Budget 2019) and to address the Challenges faced by Black Canadians (Budget 2018)||9.4||25.7||0.6||35.7|
|New funding to support Artists, Cultural Events and Commemorations (Budget 2019)||1.3||34.1||0.1||35.5|
|Funding to successfully launch new initiatives for social development in Indigenous communities (Budget 2018), Gender equality (Budget 2018) and Ensuring a Safe and Healthy Sport System (Budget 2019)||1.4||24.3||0.2||25.9|
|New funding to support the implementation of the Indigenous Languages Act (Budget 2019)||0.4||14.6||0.1||15.1|
|New funding for Digital Democracy Project to address online disinformation||1.9||9.4||0.3||11.6|
|New funding to support local journalism (Budget 2018)||0.0||10.0||0.0||10.0|
|New funding to support the Harbourfront Centre||0.0||7.5||0.0||7.5|
|New funding to support the Francophone Digital platform – TV5MONDE||0.1||6.0||0.0||6.1|
|Funding for the Rideau Hall foundation||0.0||4.9||0.0||4.9|
|New funding for Canadians with Visual Impairments and other print disabilities to support Canada's independent publishing industry to increase the production of accessible reading materials (Budget 2019)||0.3||4.0||0.1||4.4|
|Funding to support the preparation of the 2026 FIFA World Cup||0.0||2.5||0.0||2.5|
|Decrease in funding for the Grants and Contributions Modernization Project||(4.3)||0.0||0.0||(4.3)|
|Decrease in funding compared to 2018-19 Operating Budget Carry Forward||(5.4)||0.0||0.0||(5.4)|
|Sunsetting of funds to support the bid to host the 2026 Olympic and Paralympic Winter Games||(0.6)||(13.0)||0.0||(13.6)|
2.2. Departmental budgetary expenditures by standard object
Total expenditures for the third quarter of 2019-20 have increased by $49.1M (20%) from $250.8M to $299.9M compared to the same quarter of 2018-19.
The Vote 5 – Grants and Contributions expenditures for the third quarter of 2019-20 increased by $46.0M, from $199.7M to $245.7M. This 23% increase is mainly due to the following items:
- $14.4M – Sport Support Program: the increase is in part explained by the new funding to launch the following initiatives:
- Social development in Indigenous communities;
- Gender equality;
- Ensuring a safe and healthy sport system for Canadian;
and also to the timing of payments which were more significant in 2019-20 third quarter compared to the same quarter in 2018-19;
- $9.7M increase mainly caused by the new funding to enhance support for Artists, Cultural Events and Commemorations:
- $3.0M – Canada Arts Presentation Fund;
- $4.8M – Canada Music Fund;
- $1.9M – Building Communities through Arts & Heritage;
- $8.1M – Harbourfront Center: the increase is caused by the new funding to enable the Harbourfront Centre to begin addressing its capital deficiencies and by the timing of payments which were more significant in 2019-20 third quarter compared to the same quarter in 2018-19;
- $6.4M – Multiculturalism Program: the increase is mainly caused by the new funding to strengthen Multiculturalism and to address the Challenges faced by Black Canadians;
- $4.9M – Canada Media Fund: the increase is mainly caused by the anticipated funding for Investing in Canadian Content;
- $4.9M – Rideau Hall Foundation: the increase is due to the timing of the recording of payment related to this grant in 2019-20. This expense was recorded in the fourth quarter in 2018-19.
- $4.6M – Development of Official Languages Communities Program: the increase is mainly caused by the timing of payments which were more significant in 2019-20 third quarter compared to the same quarter in 2018-19;
- $4.2M – TV5: the increase is mainly caused by the new funding to support the creation, development and launch of a Francophone digital platform with TV5Monde public broadcasters;
- $3.9M – Canada Cultural Spaces Fund: the increase is mainly due to the timing of payments which were more significant in 2019-20 third quarter compared to the same quarter in 2018-19;
- $2.9M – Indigenous Languages and Cultures Program: the increase is mainly due to new funding to support the Indigenous Languages Act.
Partially offset by:
- $15.3M – Enhancement of Official Languages Program: the decrease is mainly caused by the timing of payments which were less significant in 2019-20 third quarter compared to the same quarter in 2018-19 even though the year-to-date expenditures are higher compared to 2018-19;
- $4.9M – Hosting Program: the decrease is mainly caused by the sunsetting funds to support the bid to host the 2026 Olympic and Paralympic Winter Games.
The Vote 1 – Operating expenditures for the third quarter of 2019-20 have decreased by $1.1M, from $46.9M to $45.8M compared to the same quarter of 2018-19. This 2% decrease is mainly due to the net effect of the below items:
- $5.0M increase in Personnel expenditures is mainly due to less salary recovery in this quarter compared to 2018-19, to the disbursements of retroactive salary payments as well as the overall increase in regular salary costs for employees following the ratification of collective agreements and to new funding announced in Budget 2019.
Partially offset by:
- $4.9M decrease in Other subsidies and payments expenditures since the interdepartmental settlement payments were processed sooner in the 2019-20 third quarter compared to the same quarter in 2018-19;
- $0.6 million increase in revenues credited to the vote collected in this quarter compared to the third quarter of 2018-19, which decreases PCH net expenditures.
Statutory Expenditures for the third quarter of 2019-20 have increased by $4.2M from $4.3M to $8.5M compared to the same quarter of 2018-19. This 98% increase is mainly due to the timing of the recording of payments related to contributions to employee benefit plans in 2019-20. These expenses were recorded in the last quarter in 2018-19.
As noted in the table below, PCH has spent 19.0% ($300.0M) of its authorities in the third quarter of 2019-20, which is similar, in percentage, to last year’s consumption of 18.5% ($250.8M).
Expenditures compared to annual authorities (in millions of dollars) – text version
|Total available for use||1,579 (100.0%)||1,359 (100.0%)|
|Used during the quarter||300 (19.0%)||251 (18.5%)|
|Year-to-date used||967 (61.3%)||830 (61.1%)|
3. Risks and uncertainties
Canadian Heritage continues to operate in a time of change. The standardization and consolidation of processes, as part of the government-wide initiatives such as Financial Management Transformation (FMT) initiative, requires the analysis of financial and non-financial risks and the implementation of adequate internal controls and other risk mitigation strategies to ensure effective and efficient processes in order to support strong management oversight.
The Government of Canada has implemented a new pay system in 2015 as part of the pay transformation initiative. Since its implementation, Phoenix has experienced issues—under and over payments to employees—which Public Services and Procurement Canada (PSPC) is working hard to resolve. In order to mitigate against this impact, PCH has issued emergency salary advances to affected employees. Further, the department has strengthened and invested in its Internal Services, in particular in the human Resources and Financial Management branches in order to better support PCH employees. PCH has also put controls in place to monitor this risk and will monitor the situation closely in consultation with PSPC and Treasury Board Secretariat.
4. Significant changes in relation to operations, personnel and programs
On November 20, 2019, the Right Honourable Justin Trudeau, Prime Minister of Canada appointed the Honourable Steven Guilbeault as the new Minister of Canadian Heritage, supported by the Honourable Bardish Chagger, as the new Minister of Diversity and Inclusion and Youth. The Honourable Mélanie Joly was also appointed Minister of Economic Development and Official Languages.
Changes to the machinery of government which had an impact on the Department were also implemented by the new government as of November 20, 2019:
- The Youth and the LGBTQ2+ Secretariats were transferred from the Privy Council Office.
Further, since the second quarter of 2019-20, there were changes to Canadian Heritage’s senior management personnel:
Gina Wilson was appointed Senior Associate Deputy Minister of Diversity, Inclusion and Youth, effective January 27, 2020. Joëlle Montminy becomes Assistant Deputy Minister, Sport, Major Events, Commemorations and Portfolio Affairs, effective February 10, 2020. Finally, Lise Laneville was nominated Ombudsman and Director of the Office of Values and Ethics effective November 12, 2019.
5. Approval by senior officials
Hélène Laurendeau, Deputy Minister
Date: February 19, 2020
Eric Doiron, Chief Financial Officer
Date: February 19, 2020
Statement of authorities (unaudited)
|Authorities||Total available for use for the year ending March 31, 2020 Table 3 note 1||Used during the quarter ended December 31, 2019||Year to date used at quarter-end 2019-20||Total available for use for the year ending March 31, 2019Table 3 note 1||Used during the quarter ended December 31, 2018||Year to date used at quarter-end 2018-19|
|Vote 1 - Operating expenditures||215,933||45,771||140,530||205,146||46,862||141,023|
|Vote 5 - Grants and contributions||1,336,187||245,675||807,448||1,127,167||199,650||672,070|
|Statutory - Contributions to employee benefit plans||25,073||8,121||18,272||24,107||3,929||15,713|
|Statutory - Minister of Canadian Heritage - Salary and motor car allowance||88||22||66||86||7||57|
|Statutory - Minister of State (Minister of Sport and Persons with Disabilities) - Motor car allowance||88||0||0||2||0||0|
|Statutory - Salaries of the Lieutenant Governors||1,196||385||1,104||1,196||362||1,092|
|Statutory - Payments under the Lieutenant Governors Superannuation Act (R.S.C., 1985, c. L-8)||637||0||0||637||0||0|
|Statutory - Supplementary Retirement Benefits - Former Lieutenant Governors||182||0||0||182||0||0|
|Spending of Crown Asset Proceeds||14||0||0||20||0||0|
|Total Budgetary authorities||1,579,398||299,974||967,420||1,358,543||250,810||829,955|
Table 3 notes
Departmental budgetary expenditures by standard object (unaudited)
|Expenditures||Total available for use for the year ending March 31, 2020Table 4 note 1||Used during the quarter ended December 31, 2019||Year to date used at quarter-end 2019-20||Total available for use for the year ending March 31, 2019Table 4 note 1||Used during the quarter ended December 31, 2018||Year to date used at quarter-end 2018-19|
|Transportation and communications||4,611||1,245||2,936||3,810||1,232||3,097|
|Professional and special services||37,329||5,840||13,320||27,078||6,017||15,087|
|Repair and maintenance||879||249||550||871||393||651|
|Utilities, materials and supplies||2,575||650||1,509||3,708||715||1,710|
|Acquisition of machinery and equipment||3,764||244||994||6,347||347||1,808|
|Other subsidies and payments||1,231||-2,455||2,284||1,708||2,448||6,638|
|Total gross budgetary expenditures||1,589,355||302,826||973,647||1,368,500||253,118||835,442|
Table 4 notes
|Expenditures||Total available for use for the year ending March 31, 2020Table 5 note 1||Used during the quarter ended December 31, 2019||Year to date used at quarter-end 2019-20||Total available for use for the year ending March 31, 2019Table 5 note 1||Used during the quarter ended December 31, 2018||Year to date used at quarter-end 2018-19|
|Revenue credited to the Vote||-9,957||-2,852||-6,227||-9,957||-2,308||-5,487|
|Total Revenues netted against expenditures||-9,957||-2,852||-6,227||-9,957||-2,308||-5,487|
|Total net budgetary expenditures||1,579,398||299,974||967,420||1,358,543||250,810||829,955|
Table 5 notes
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