Canadian Heritage’s quarterly financial report for the quarter ended September 30, 2021
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 second quarterly financial report should be read in conjunction with the 2021-22 Main Estimates, and the 2021-22 Supplementary Estimates A along with the 2020-21 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 second 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 2021-22 Departmental Plan and the 2021-22 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 and Supplementary Estimates A for the 2021-22 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 Departmental budgetary expenditures by Standard Object table at the end of report for more information.
PCH’s 2021-22 authorities available for use at the end of September 2021 have increased by approximately $105.7 million when compared to the same period in 2020-21. More specifically, the total available for use increased by $462.3 million in Vote 5 - Grants and Contributions, increased by $65.4 million in Vote 1 - Operating expenditures and decreased by $422.0 million in Statutory authorities.
In Budget 2021, the Government of Canada committed $1.9 billion to help support the arts, culture, heritage, and sport sectors and reflect Canada’s diversity. On June 28, the Minister of Canadian Heritage presented the key components for the Department:
- The Recovery Fund for Arts, Culture, and Heritage and Sport sectors will leverage existing programs to provide $300 million over two years to organizations that are still struggling due to the pandemic. Within the $300 million, $75 million will be disbursed by Portfolio organizations. It will provide organizations and individuals with the financial means to help build organizational resilience and pursue business innovation and transformation. This will also contribute to advancing equity, diversity, and inclusion in these sectors, as well as greening activities.
- The Reopening Fund will provide $200 million over two years through existing programming to help Canada’s festivals, cultural events, outdoor theatre performances, heritage celebrations, local museums, amateur sport events and more. It will support organizations and projects that deliver in-person experiences or events that draw visitors to our communities. Within the $200 million, $35 million will be disbursed by Portfolio organizations.
The Recovery and Reopening funds allow for continued post-pandemic efforts in the recovery for Cultural, Heritage and Sport Organizations from the exceptional Emergency Support Funds received in Statutory authorities in 2020-21, which explains the substantive variation in Statutory Authorities.
| Items | Vote 1 | Vote 5 | Statutory | Total |
|---|---|---|---|---|
| New funding for Arts, Culture, Heritage and Sport Recovery Fund and Reopening Fund for Events and In-person Experiences (Budget 2021) | 0.0 | 250.0 | 0.0 | 250.0 |
| Increase in the authorities available for use in 2021-22 compared to 2020-21 due to 2020-21 full supply being delayed to December 2020 | 50.8 | 108.7 | 0.0 | 159.5 |
| New funding to support arts and live events workers in response to the pandemic (COVID-19) (horizontal item) (Fall Economic Statement - 2020) | 1.3 | 63.3 | 0.2 | 64.8 |
| Increase in the Indigenous Languages and Cultures Program for the purpose of preserving, promoting and revitalizing indigenous languages (Budget 2019) | 0.0 | 27.5 | 0.0 | 27.5 |
| Net increase in funding to expand Canadian Heritage’s Community Support, Multiculturalism and Anti-Racism Initiatives Program and its Anti-Racism Action Program (Budget 2018, Budget 2019 and Fall Economic Statement - 2020) | 1.8 | 20.6 | 0.7 | 23.1 |
| New funding for Youth Employment and Skills Strategy (horizontal item) (Fall Economic Statement - 2020) | 0.5 | 15.8 | 0.1 | 16.4 |
| Recovery and Reopening Fund - TB Vote 5 access for Canada Periodical Fund | 0.0 | 10.0 | 0.0 | 10.0 |
| Increase for negotiated salary adjustments for various groups | 6.1 | 0.0 | 1.6 | 7.7 |
| Increase in funding to support the modernization and construction of community educational Infrastructures in the provinces and territories for the Official Languages Program (Budget 2017) | 0.0 | 4.0 | 0.0 | 4.0 |
| New funding to support a post census survey of official language minority communities (Budget 2020) | 3.2 | 0.0 | 0.0 | 3.2 |
| Operating Budget Carry Forward (Variance) | 2.6 | 0.0 | (1.3) | 1.3 |
| Other Adjustments | 0.1 | (0.8) | (0.8) | (1.5) |
| Sunsetting of 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 | 0.0 | (2.5) | 0.0 | (2.5) |
| End of the two-year funding for Expanding Support for Artists and Cultural Events, National Day for Truth and Reconciliation and 50th anniversary of the decriminalization of homosexuality in Canada (Budget 2019) | (1.0) | (34.3) | (0.1) | (35.4) |
| Funding received in 2020-21 only to establish a COVID-19 Emergency Support Fund for Cultural, Heritage and Sport Organizations, students and youth impacted by COVID-19 | 0.0 | 0.0 | (422.4) | (422.4) |
| Grand Total | 65.4 | 462.3 | (422.0) | 105.7 |
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 2021-22 have decreased by $132.9 million (27%) from $491.7 million to $358.8 million compared to the same quarter of 2020-21. The overall decrease is explained by the following items:
- The transfer payments for the second quarter of 2021-22 have decreased by $137.9 million, from $437.5 million to $299.6 million. This 31.5% decrease is mainly due to the net effect of the below items:
- A reduction of $242.5 million due to sunsetting of the one-time funding received for the COVID-19 Emergency Support Fund to support Cultural, Heritage and Sport organizations impacted by COVID-19; and
- A reduction of $7.9 million for the Development of Official Languages Communities Program and Enhancement of Official Languages Program: the decrease is mainly due to the timing of payments which were made earlier in 2021-22 compared to 2020-21.
- Partially offset by increases in the following programs:
- $30.8 million – Canada Media Fund – the increase is mainly explained by the program returning to a regular course of activities compared to the second quarter of 2020-21, where at that time, the pandemic affected the production levels (health and safety measures, shut-downs, protocols, etc.) which had a corresponding impact on the Canada Media Fund expenditures;
- $18.7 million – Sport Support Program – the increase is mainly explained by the program returning to a regular course of activities compared to the second quarter of 2020-21, where the pandemic forced the cancellation of many sporting competitions;
- $11.5 million – Canada Arts Presentation Fund – the overall net increase is due to new funding to support arts and live events workers in response to the pandemic (Fall Economic Statement – 2020) and the timing of payments;
- $10.2 million – Indigenous Languages and Cultures Program – the overall net increase is explained by an increase in the funding profile for Indigenous communities in their efforts to reclaim, revitalize, maintain, and strengthen Indigenous Languages (Budget 2019) as well as new funding (Budget 2021);
- $10.0 million – Canada Periodical Fund - the increase is due to new funding received to promote recovery from the pandemic Arts, Culture, Heritage and Sport sectors;
- $9.9 million – Canada Music Fund – the increase is due to new funding to support arts and live events workers in response to the pandemic (Fall Economic Statement – 2020), new funding to support Canada's artists and live music sector and Canada as guest of honour at the 2021 Frankfurt book fair (COVID-19) (Budget 2021), partially offset by timing of payments in regular funds;
- $6.4 million – Museum Assistance Program – the increase is due to new funding for Young Canada Works received through the Youth Employment and Skills Strategy (Fall Economic Statement 2020) and an increase in requests from Young Canada Works-Heritage delivery organizations for summer employment and various internships; and
- $4.8 million – Indigenous Screen Office – the increase is due to new funding approved for the Indigenous Screen Office Program.
- Personnel: the $5.0 million increase in Personnel expenditures (from $46.8 million in the second quarter of 2020-21 to $51.8 million in the second quarter of 2021-22) is explained by an increase in employees resulting from new funding received from the Fall Economic Statement 2020 and new funding announced in Budget 2021. The increase is also a result of additional compensation for issues related to the Phoenix payroll system and late implementation of the collective agreements;
- Professional and special services: the $1.0 million increase in Professional and special services (from $5.5 million in the second quarter of 2020-21 to $6.5 million in the second quarter of 2021-22) is in part due to Canada’s participation as the Guest of Honour at the 2021 Frankfurt Book Fair partially offset by the timing of payments for legal services and research services which started in the first quarter of 2021-22 compared to the second quarter of 2020-21;
- Acquisition of machinery and equipment: the $0.4 million decrease in Acquisition of machinery and equipment (from $0.5 million in the second quarter of 2020-21 to $0.1 million in the second quarter of 2021-22) due in part by the increased effort in the second quarter of 2020-21 to continue the renewal of laptop equipment considering the department’s migration to Microsoft 365. Also contributing to the decrease in the second quarter of 2021-22 is the acquisition in the second quarter of 2020-21 of renewed sound equipment for the Sound and Light Show;
- Revenue credited to the Vote: the $0.3 million increase in revenues credited to the vote (from $1.5 million in the second quarter of 2020-21 to $1.8 million in the second quarter of 2021-22) collected by Canadian Audio-Visual productions in this quarter compared to the second quarter of 2020-21 explained by the industry fully recovering after COVID-19 which had a significant impact in 2020-21 on the film and television industry which resulted in fewer productions and, consequently, fewer tax credit claims. This decreases PCH net expenditures; and
- Other subsidies and payments: the $0.3 million decrease in Other subsidies and payments (from $0.9 million in the second quarter of 2020-21 to $0.6 million in the second quarter of 2021-22) mainly explained by a more timely process of the interdepartmental settlement transactions.
As noted in the table below, PCH has spent 18.8% of its authorities in the second quarter of 2021-22, which is lower than last year’s consumption of 27.2%.
Expenditures compared to annual authorities (in millions of dollars) - text version
| 2021-22 | 2020-21 | |
|---|---|---|
| Total available for use | 1,911 (100%) | 1,805 (100%) |
| Used during the quarter | 359 (19%) | 492 (27%) |
| Year-to-date used | 716 (37%) | 993 (55%) |
3. Risks and uncertainties
In the current context, PCH is exposed to heightened operational risks including people risk management as the Department still 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.
4. Significant changes in relation to operations, personnel and programs
Since the Department’s first quarter of 2021-22, there were changes to Canadian Heritage’s senior management personnel.
Effective October 18, 2021, Thomas Owen Ripley has been appointed as the Associate Assistant Deputy Minister in the Cultural Affairs sector to assist the Senior Assistant Deputy Minister, Cultural Affairs, in leading key files, to help the Department of Canadian Heritage deliver on several major government priorities, including complex policy and legislative reform.
5. Approval by senior officials
Approved by:
Original signed
Isabelle Mondou, Deputy Minister
Gatineau, Canada
Date: November 19, 2021
Original signed
Eric Doiron, Chief Financial Officer
Gatineau, Canada
Date: November 18, 2021
Statement of authorities (unaudited)
| Authorities | Total available for use for the year ending March 31, 2022Footnote 1 | Used during the quarter ended September 30, 2021 | Year to date used at quarter-end 2021-22 | Total available for use for the year ending March 31, 2021Footnote 1 | Used during the quarter ended September 30, 2020 | Year to date used at quarter-end 2020-21 |
|---|---|---|---|---|---|---|
| Vote 1 - Operating expenditures | 223,584 | 52,364 | 106,873 | 158,187 | 47,566 | 91,901 |
| Vote 5 - Grants and contributions | 1,658,339 | 299,609 | 595,149 | 1,196,067 | 195,037 | 481,715 |
| Statutory - Contributions to employee benefit plans | 26,787 | 6,424 | 12,848 | 26,333 | 6,250 | 12,500 |
| Statutory - Minister of Canadian Heritage - Salary and motor car allowance | 91 | 23 | 46 | 89 | 23 | 46 |
| Statutory - Minister of State (Minister of Diversity and Inclusion and Youth) - Motor car allowance | 2 | 0 | 0 | 2 | 0 | 0 |
| Statutory - Salaries of the Lieutenant Governors | 1,196 | 404 | 808 | 1,196 | 368 | 747 |
| 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 | 0 | 0 | 0 | 422,445 | 242,503 | 405,725 |
| Spending of Crown Asset Proceeds | 48 | 0 | 0 | 12 | 0 | 0 |
| Total Budgetary authorities | 1,910,866 | 358,824 | 715,724 | 1,805,150 | 491,747 | 992,634 |
| Total authorities | 1,910,866 | 358,824 | 715,724 | 1,805,150 | 491,747 | 992,634 |
Departmental budgetary expenditures by standard object (unaudited)
| Expenditures | Total available for use for the year ending March 31, 2022Footnote 1 | Used during the quarter ended September 30, 2021 | Year to date used at quarter-end 2021-22 | Total available for use for the year ending March 31, 2021Footnote 1 | Used during the quarter ended September 30, 2020 | Year to date used at quarter-end 2020-21 |
|---|---|---|---|---|---|---|
| Personnel | 213,708 | 51,782 | 103,769 | 159,247 | 46,825 | 93,042 |
| Transportation and communications | 2,512 | 162 | 216 | 3,699 | 66 | 306 |
| Information | 2,753 | 492 | 816 | 1,887 | 619 | 833 |
| Professional and special services | 24,940 | 6,541 | 13,531 | 17,789 | 5,547 | 8,533 |
| Rentals | 4,338 | 801 | 2,418 | 3,237 | 686 | 1,267 |
| Repair and maintenance | 1,316 | 226 | 358 | 978 | 258 | 357 |
| Utilities, materials and supplies | 3,090 | 410 | 570 | 2,193 | 404 | 531 |
| Acquisition of machinery and equipment | 6,501 | 41 | 295 | 1,743 | 452 | 664 |
| Transfer payments | 1,659,158 | 299,609 | 595,148 | 1,619,331 | 437,540 | 887,440 |
| Other subsidies and payments | 1,208 | 564 | 1,512 | 1,070 | 856 | 1,762 |
| Total gross budgetary expenditures | 1,919,524 | 360,628 | 718,633 | 1,811,174 | 493,253 | 994,735 |
| Expenditures | Total available for use for the year ending March 31, 2022Footnote 1 | Used during the quarter ended September 30, 2021 | Year to date used at quarter-end 2021-22 | Total available for use for the year ending March 31, 2021Footnote 1 | Used during the quarter ended September 30, 2020 | Year to date used at quarter-end 2020-21 |
|---|---|---|---|---|---|---|
| Revenue credited to the Vote | -8,658 | -1,804 | -2,909 | -6,024 | -1,506 | -2,101 |
| Total Revenues netted against expenditures | -8,658 | -1,804 | -2,909 | -6,024 | -1,506 | -2,101 |
| Total net budgetary expenditures | 1,910,866 | 358,824 | 715,724 | 1,805,150 | 491,747 | 992,634 |