Canadian Heritage’s quarterly financial report for the quarter ended December 31, 2020
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)
1. Introduction
This third quarterly financial report should be read in conjunction with the 2020‑21 Main Estimates, approved supply as of December 14, 2020, the 2020‑21 Supplementary Estimates A & B and related authority granted under the Public Health events of National Concern Payments Act along with the 2019‑20 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 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 2020‑21 Departmental Plan and the 2020‑21 Main Estimates.
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 supply for the 2020‑21 Main Estimates approved as of December 14, 2020, Supplementary Estimates A and B for the 2020‑21 fiscal year and related authority granted under the Public Health Events of National Concern Payments Act.
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, Statutory Payments for Lieutenant‑Governors and Statutory payment for COVID‑19 Emergency Support Fund.
2. Highlights of fiscal quarter and fiscal year‑to‑date (YTD) results
2.1. Statement of authorities
PCH’s 2020‑21 authorities available for use at the end of December 2020 have increased by approximately $441.5 million when compared to the same period in 2019‑20. More specifically, the total available for use increased by $423.6 million in Statutory authorities, increased by $23.6 million in Vote 5 - Grants and Contributions and decreased by $5.7 million in Vote 1 - Operating expenditures.
On May 8, 2020, the Government of Canada announced $500 million for COVID‑19 Emergency Support Fund for Cultural, Heritage and Sport Organizations. These funds are a temporary relief measure to meet the financial needs of cultural, heritage and sport organizations facing significant losses due to COVID‑19, so they can continue to support artists and athletes. The goal of the $500 million in funding is to ensure business continuity for organizations whose viability has been negatively impacted by COVID‑19. The Fund is providing financial support consistent with other assistance measures in place such as the Canada Emergency Business Account. It is administered by Canadian Heritage with the support of its partners. The $500 million was divided between the following organizations: $407.4 million to the Department of Canadian Heritage, $62.8 million to the Canada Council for the Arts and $29.8 million to Telefilm Canada.
On June 25, 2020, the Government of Canada announced an urgent investment to support students and youth impacted by COVID‑19 pursuant to the Public Health Events of National Concern payment Act. In the context of the Youth Employment and Skills Strategy, $15 million was allocated to Canadian Heritage to create up to 1,245 additional job placements and paid internships in various sectors and communities, including Official Language Minority Communities.
Due to the COVID‑19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the fall. In December 2020, Canadian Heritage has received its full supply for the 2020‑21 Main Estimates.
| Items | Vote 1 | Vote 5 | Statutory | Total |
|---|---|---|---|---|
| New funding to establish a COVID‑19 Emergency Support Fund for Cultural, Heritage and Sport Organizations | 0.0 | 0.0 | 407.4 | 407.4 |
| Increase in funding for the Indigenous Languages and Cultures Program for the purpose of preserving, promoting and revitalizing indigenous languages (Budget 2019) | 2.7 | 25.4 | 0.6 | 28.7 |
| Increase in funding for the Canada Media Fund (Budget 2018) | 0.0 | 26.4 | 0.0 | 26.4 |
| Reprofiled funding from 2019‑20 to 2020‑21 for community spaces - infrastructure and teacher recruitment in Francophone minority schools, French immersion and French as a second language programs | 0.0 | 17.9 | 0.0 | 17.9 |
| New funding to establish a COVID‑19 Emergency Support Fund for Youth Employment and Skills Strategy | 0.0 | 0.0 | 15.0 | 15.0 |
| Reprofiled funding from 2019‑20 to 2020‑21 to support minority‑language education in Canada | 0.0 | 9.9 | 0.0 | 9.9 |
| Increase in funding to support Indigenous Youth and Sport (Budget 2017) and Gender equality (Budget 2018) | 0.0 | 3.2 | 0.0 | 3.2 |
| Additional funding to respond to youth‑serving organizations’ increased demand in the Youth Take Charge Program and to expand its reach to a greater number of youths across Canada (off‑cycle) | 0.0 | 2.5 | 0.0 | 2.5 |
| Reprofiled funding from 2019‑20 to 2020‑21 for the Canada Book Fund and from 2018‑19 to 2020‑21 for the Creative Export Strategy for the Frankfurt 2020 Book Fair | 0.0 | 2.3 | 0.0 | 2.3 |
| Overall increase for the transfer of the Youth and LGBTQ2+ Secretariats from the Privy Council Office | 1.5 | 0.0 | 0.2 | 1.7 |
| Other Adjustments | 0.3 | 0.1 | 1.1 | 1.5 |
| One‑time funding sought in 2019‑20 for safe and secure Canada Day 2019 celebrations on Parliament Hill (Off‑cycle) | (1.7) | 0.0 | 0.0 | (1.7) |
| Transfer from the Department of Canadian Heritage to the Department of Crown‑Indigenous Relations and Northern Affairs to support Indigenous languages in the 11 self‑governing Yukon First Nations | 0.0 | (1.9) | 0.0 | (1.9) |
| Decrease in the funding profile for Addressing the Challenges faced by Black Canadians (Budget 2018) | 0.0 | (2.2) | 0.0 | (2.2) |
| Decrease in funding to support the Francophone Digital platform – TV5MONDE (Fall Economic Update 2018) | 0.0 | (4.0) | 0.0 | (4.0) |
| End of funding for the Rideau Hall Foundation as the grant agreement ended in 2019‑20 | 0.0 | (4.9) | 0.0 | (4.9) |
| Decrease in funding for Digital Democracy Project to address online disinformation (Off‑cycle and Budget 2019) | (0.1) | (6.8) | 0.0 | (6.9) |
| Decrease in funding to support the Youth Employment Strategy (Budget 2017 and 2019) | (0.3) | (6.7) | 0.0 | (7.0) |
| End of temporary funding received in 2019‑20 to enable the Harbourfront Centre to begin addressing its capital deficiencies (Off‑cycle) | 0.0 | (7.5) | 0.0 | (7.5) |
| Sunsetting of temporary funding for Strengthening Multiculturalism (Budget 2018) and decrease in funding for the New Anti‑Racism Strategy (Budget 2019) | (5.0) | (11.0) | (0.2) | (16.2) |
| Sunsetting of temporary funding for supporting the Revitalization of Indigenous Languages and Cultures – Toward a Comprehensive Strategy (Budget 2017) | (3.1) | (19.1) | (0.5) | (22.7) |
| Grand Total | (5.7) | 23.6 | 423.6 | 441.5 |
2.2. Departmental budgetary expenditures by standard object
Total expenditures during the third quarter of 2020‑21 have increased by $33.4 million (11%) from $300 million to $333.4 million compared to the same quarter of 2019‑20.
The Vote 5 – Grants and Contributions for the third quarter of 2020‑21 increased by $17.3 million, from $245.7 million to $263 million. This 7% increase is mainly due to the following items:
- $48.5 million – Canada Media Fund: the increase is caused by the timing of payments which were made earlier in 2019‑20 compared to 2020‑21;
- $12.6 million – Development of Official‑Languages Communities program and Enhancement of Official Languages Program: the increase is caused by the funding reprofiles from 2019‑20 to 2020‑21 for the community spaces - infrastructure and teacher recruitment in Francophone minority schools, French immersion and French as a second language programs and to support minority‑language education in Canada;
- $7.8 million – Indigenous Languages and Cultures Program: the increase is caused by the timing of payments which were made earlier in 2020‑21 compared to 2019‑20; and
- $5.3 million – Celebration and Commemoration Program: the increase is caused in part by the funding reprofile from 2019‑20 to 2020‑21 for the Truth and Reconciliation initiative. In addition, due to the pandemic, a number of projects were cancelled for the Celebrate Canada program and funds were reinvested in Truth and Reconciliation initiative.
These increases are partially offset by the following decreases:
- $27.1 million – Canada Book Fund: the decrease in this quarter is explained by PCH’s efforts to disburse funds earlier in 2020‑21 to the creative sector which is still under extreme strain following the COVID‑19 pandemic;
- $9.7 million – Canada Arts Presentation Program: the decrease is caused by the timing of payments which were made in the first two quarters of 2020‑21 compared to 2019‑20;
- $9.2 million – Sport Support Program: the decrease is caused by the cancellation and delay of events in 2020‑21 due to COVID‑19 pandemic;
- $4.9 million – Rideau Hall Foundation: The decrease is explained by the end of the grant funding agreement in 2019‑20 since the foundation has reached the maximum matching funds of $7 million; and
- $4.3 million – Multiculturalism Program: the decrease is caused by the sunsetting of temporary funding for the Strengthening Multiculturalism initiative, reduction in funding for the New Anti‑Racism Strategy (Budget 2019) as well as the decrease in the funding profile for Addressing the Challenges faced by Black Canadians (Budget 2018). Further contributing to the decrease are the constrained opportunities for organizations to plan or hold events due to the COVID‑19 pandemic.
The Statutory Expenditures for the third quarter of 2020‑21 increased by $12.9 million, from $8.5 million to $21.4 million. This increase is mainly due to the funding received for the COVID‑19 Emergency Support Fund to support Cultural, Heritage and Sport organizations and students and youth impacted by COVID‑19. As of December 31, 2020, payments for a total amount of $420.3 million were made of which $14.7 million was disbursed in the third quarter for the following programs:
- $14 million – Sport Support Program;
- $0.5 million – Canada Periodical Fund; and
- $0.2 million – Museum Assistance Program.
The Vote 1 – Operating expenditures for the third quarter of 2020‑21 have increased by $3.2M, from $45.8 to $49M compared to the same quarter of 2019‑20. This 7% increase is mainly due to the net effect of the below items:
- $2.5M increase in Other subsidies and payments expenditures. In the same quarter of 2019‑20, significant efforts were made to process interdepartmental settlements that were pending since previous quarters thus creating a negative balance at the end of the 2019‑20 third quarter. Efforts were made more consistently in 2020‑21;
- $1.6M increase in Acquisition of machinery and equipment expenditures due in part to the purchasing of laptops as part of the evergreen strategy. Also contributing to the increase is the timing of payment for expenditures for the communication network which were higher in 2020‑21 third quarter compared to the same quarter in 2019‑20; and
- $0.9M decrease in revenues credited to the vote collected in this quarter compared to the third quarter of 2019‑20 which increases PCH net expenditures.
These increases are partially offset by:
- $1.1M decrease in Transportation and communications expenditures due to a reduction in travel caused by the COVID‑19 pandemic compared to the third quarter of 2019‑20.
As noted in the table below, PCH has spent 16% of its authorities in the third quarter of 2020‑21, which is similar than last year’s consumption of 19%.
Expenditures compared to annual authorities (in millions of dollars) - text version
| 2020-21 | 2019-20 | |
|---|---|---|
| Total available for use | 2,021 (100%) | 1,579 (100%) |
| Used during the quarter | 333 (16%) | 300 (19%) |
| Year-to-date used | 1,326 (66%) | 967 (61%) |
3. Risks and uncertainties
In the current context, PCH is exposed to heightened operational risks including people risk management as the Department closely monitors the impact of the COVID‑19 crisis. As the situation related to the COVID‑19 virus continues to evolve, PCH’s primary concern remains the health of its employees and their families. Canadian Heritage must also contribute to public service‑wide efforts to address this situation and maintain federal government services. The Department continues to monitor emerging risks and has resumed its regular services since September 21, 2020 with the deactivation of its Business Continuity Plan.
4. Significant changes in relation to operations, personnel and programs
Significant change in operations and programs in the context of COVID‑19 crisis
In March 2020, PCH had activated its Business Continuity Plan. In line with the Treasury Board Secretariat’s Policy on Government Security and mindful of the unique nature of the current COVID‑19 crisis, PCH's list of critical services has been modified to include the ongoing provision of grants and contributions to ensure the economic well‑being of Canadians. Since September 21, 2020, the Canadian Heritage Business Continuity Plan has been deactivated allowing the Department to deliver its critical services while resuming all of its regular services.
The main priority was to keep Canadian Heritage running smoothly while setting up the COVID‑19 Emergency Support Fund. As of December 31, 2020, 99% ($405 million out of $407 million) of the PCH funding to support Cultural, Heritage and Sport Organizations and 100% ($15 million) of the funding to support students and youth impacted by the COVID‑19 was spent. Over 10,000 recipients received funding from PCH, Telefilm Canada and the Canada Council for the Arts in addition to payments made by third‑party organizations to final recipients.
Canadian Heritage had to be flexible and agile in support of Grants and Contributions recipients that were and are still impacted by COVID‑19 (such as cancelled events).
- PCH adjusted funding agreements for grants and contributions to provide flexibility to adjust to situations where the original scope of activities needed to be changed or, in some cases, where activities were cancelled entirely.
- PCH worked to establish a simplified and streamlined process for submitting and processing Emergency Support Funding requests. The process significantly reduced the time it took to process files. Eligible recipients were able to access financial assistance much more quickly than usual.
- In addition, new online application portals were set up for components under the Museums Assistance Program and the Canada Periodical Fund to facilitate and simplify funding request for applicants.
Canadian Heritage also had to be creative and find new ways to effectively deliver on its mandate specifically for annual celebrations and activities in Canada’s Capital Region that create a unique Canadian experience for all, celebrating Canadian identity and diversity. Virtual celebrations showed how PCH could rapidly adapt to the current context.
Significant changes in Personnel
Since the end of the second quarter of 2020‑21, there were changes to Canadian Heritage’s senior management personnel:
- Julie Boyer was appointed Assistant Deputy Minister, Official Languages, Heritage and Regions, effective January 18, 2021;
- Pierre‑Paul Trottier was appointed Executive Director and General Counsel of the legal services, effective February 8, 2021;
- Joëlle Montminy was appointed Senior Assistant Deputy Minister, Cultural Affairs, effective February 22, 2021; and
- Emmanuelle Sajous was appointed Assistant Deputy Minister, Sport, Major Events and Commemorations, effective February 22, 2021.
5. Approval by senior officials
Approved by:
Original signed
Hélène Laurendeau, Deputy Minister
Gatineau, Canada
Date: February 18, 2021
Original signed
Eric Doiron, Chief Financial Officer
Gatineau, Canada
Date: February 16, 2021
Statement of authorities (unaudited)
| Authorities | Total available for use for the year ending March 31, 2021Footnote 1 | Used during the quarter ended December 31, 2020 | Year to date used at quarter-end 2020-21 | Total available for use for the year ending March 31, 2020Footnote 1 | Used during the quarter ended December 31, 2019 | Year to date used at quarter-end 2019-20 |
|---|---|---|---|---|---|---|
| Vote 1 - Operating expenditures | 210,191 | 48,989 | 140,889 | 215,933 | 45,771 | 140,530 |
| Vote 5 - Grants and contributions | 1,359,773 | 263,042 | 744,756 | 1,336,187 | 245,675 | 807,448 |
| Statutory - Contributions to employee benefit plans | 26,333 | 6,250 | 18,750 | 25,073 | 8,121 | 18,272 |
| Statutory - Minister of Canadian Heritage - Salary and motor car allowance | 89 | 23 | 68 | 88 | 22 | 66 |
| Statutory - Minister of State (Minister of Science and Sport) – Salary and motor car allowance | 0 | 0 | 0 | 88 | 0 | 0 |
| Statutory - Minister of State (Minister of Diversity and Inclusion and Youth) - Motor car allowance | 2 | 0 | 0 | 0 | 0 | 0 |
| Statutory - Salaries of the Lieutenant-Governors | 1,196 | 406 | 1,153 | 1,196 | 385 | 1,104 |
| 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 |
| Statutory - COVID-19 Emergency Support Fund - Support for Cultural, Heritage and Sport Organizations | 407,445 | 14,705 | 405,430 | 0 | 0 | 0 |
| Statutory - COVID-19 Emergency Support Fund - Support for Youth Employment and Skills Strategy | 15,000 | 0 | 15,000 | 0 | 0 | 0 |
| Spending of Crown Asset Proceeds | 12 | 0 | 0 | 14 | 0 | 0 |
| Total Budgetary authorities | 2,020,860 | 333,415 | 1,326,046 | 1,579,398 | 299,974 | 967,420 |
| Total authorities | 2,020,860 | 333,415 | 1,326,046 | 1,579,398 | 299,974 | 967,420 |
Departmental budgetary expenditures by standard object (unaudited)
| Expenditures | Total available for use for the year ending March 31, 2021Footnote 1 | Used during the quarter ended December 31, 2020 | Year to date used at quarter-end 2020-21 | Total available for use for the year ending March 31, 2020Footnote 1 | Used during the quarter ended December 31, 2019 | Year to date used at quarter-end 2019-20 |
|---|---|---|---|---|---|---|
| Personnel | 201,388 | 47,782 | 140,823 | 195,725 | 50,163 | 140,401 |
| Transportation and communications | 4,932 | 113 | 419 | 4,611 | 1,245 | 2,936 |
| Information | 2,516 | 308 | 1,141 | 2,140 | 297 | 1,525 |
| Professional and special services | 24,728 | 5,904 | 14,437 | 37,329 | 5,840 | 13,320 |
| Rentals | 4,316 | 696 | 1,963 | 4,095 | 918 | 2,680 |
| Repair and maintenance | 1,304 | 394 | 752 | 879 | 249 | 550 |
| Utilities, materials and supplies | 2,924 | 587 | 1,118 | 2,575 | 650 | 1,509 |
| Acquisition of machinery and equipment | 2,320 | 1,866 | 2,529 | 3,764 | 244 | 994 |
| Transfer payments | 1,783,037 | 277,747 | 1,165,186 | 1,337,006 | 245,675 | 807,448 |
| Other subsidies and payments | 1,427 | 1 | 1,761 | 1,231 | -2,455 | 2,284 |
| Total gross budgetary expenditures | 2,028,892 | 335,398 | 1,330,129 | 1,589,355 | 302,826 | 973,647 |
| Expenditures | Total available for use for the year ending March 31, 2021Footnote 1 | Used during the quarter ended December 31, 2020 | Year to date used at quarter-end 2020-21 | Total available for use for the year ending March 31, 2020Footnote 1 | Used during the quarter ended December 31, 2019 | Year to date used at quarter-end 2019-20 |
|---|---|---|---|---|---|---|
| Revenue credited to the Vote | -8,032 | -1,983 | -4,083 | -9,957 | -2,852 | -6,227 |
| Total Revenues netted against expenditures | -8,032 | -1,983 | -4,083 | -9,957 | -2,852 | -6,227 |
| Total net budgetary expenditures | 2,020,860 | 333,415 | 1,326,046 | 1,579,398 | 299,974 | 967,420 |
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