Canadian Heritage’s quarterly financial report for the quarter ended December 31, 2025

1. Introduction

This third quarterly financial report should be read in conjunction with the 2025-26 Main Estimates and Supplementary Estimates B along with the 2024-25 Main Estimates and Supplementary Estimates A and B. 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 Departmental Audit Committee has reviewed the report.

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 the 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 2025-26 Departmental Plan and the 2025-26 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 Main Estimates and the Supplementary Estimates B for the 2025-26 fiscal year.

The authority of Parliament is required before the Government can spend money. 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 2025-26 authorities available for use at the end of December 2025 increased by $53.3 million compared to last year (from $2,174.1 million in 2024-25 to $2,227.3 million in 2025-26). More specifically, the total authorities available for use increased by $41.6 million in Vote 5 – Grants and Contributions, increased by $9.7 million in Vote 1 – Operating expenditures and increased by $2.0 million in Statutory authorities.

The increase in authorities, mainly within Grants and Contributions, reflects increased funding to support the hosting of the 2026 FIFA Men’s World Cup and to offer free and low-cost admission to children and youth for participating museums under the Canada Strong Pass initiative.

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.

The total expenditures during the third quarter of 2025-26 decreased by $51.8 million compared to the third quarter of last year, representing a decrease in expenditures of 10.2%.

The decrease in spending for the third quarter is primarily due to a decrease in transfer payments of $52.5 million (from $438.9 million in 2024-25 to $386.4 million in 2025-26). This decline reflects changes in payment schedules.

As shown in the graph below, PCH has spent 21% of its authorities in the third quarter of 2025-26, down slightly from 23% in the same period of 2024-25. Despite this decrease, cumulative expenditures are $204 million higher than last year, largely due to transfer payments issued earlier in 2025-26.

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

-	2025-26	2024-25
Total available for use	2,227 (100%)	2,174 (100%)
Used during the quarter	457 (21%)	509 (23%)
Year-to-date used	1,396 (63%)	1,192 (55%)

3. Risks and uncertainties

In Budget 2023, the government committed to reducing spending. As part of this effort, Canadian Heritage identified spending reductions of $14.4 million for 2024-25, $25.2 million for 2025-26 and $39.7 million for 2026-27 and onward, to support responsible, and cost-effective spending that delivers results for Canadians. More recently, Budget 2025 outlined plans to achieve $13 billion in annual savings by 2028-29 across more than 100 federal organizations through the Comprehensive Expenditure Review. For PCH, this represents $93.1 million in annual savings by 2028-29.

To meet these targets, PCH will adjust its cultural programming over the next three years to better align with the changing needs of recipients and maintain program effectiveness. However, the combined reductions - including reductions to the employee workforce - create a risk that funding delivery could be slowed or disrupted, potentially affecting PCH’s ability to meet the expectations of its recipients and Canadians.

To reduce the risk, PCH will focus on a wide number of efficiencies across the department’s operations, impacting internal services and program administration, such as streamlining operations, leveraging synergies and technology, shifting to digital alternatives, modernizing transfer payment delivery, as well and realigning efforts to core priorities.

PCH remains committed to delivering high-quality, efficient funding programs and to monitoring changing conditions and risks that could affect its work. The department has outlined its key and mitigation strategies for each core responsibility in the 2025-26 Canadian Heritage’s Departmental Plan.

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

On December 1, 2025, the Honourable Marc Miller became the Minister of Canadian Identity and Culture and Minister responsible for Official Languages, replacing the Honourable Steven Guilbault.

Effective December 1, 2025, the Honourable Nathalie Provost, Secretary of State (Nature), reports to the Honourable Julie Dabrusin, Minister of Environment and Climate Change Canada.

On January 12, 2026, Francis Bilodeau was appointed Deputy Minister of Canadian Heritage, replacing Isabelle Mondou.

5. Approval by senior officials

Approved by:

Original signed
Francis Bilodeau, Deputy Minister

Gatineau, Canada
Date: February 20, 2026

Original signed
Véronique Côté, Chief Financial Officer

Gatineau, Canada
Date: February 17, 2026

Statement of authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)

© His Majesty the King in Right of Canada, as represented by the Minister of Canadian Heritage, 2026.
Cat. No. CH2-4E-PDF
ISSN 2816-2730