Quarterly financial report, for the quarter ended September 30, 2021

Table of Contents


This quarterly report has been prepared by management of Correctional Service of Canada (CSC) as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates, Supplementary Estimates and the Quarterly Financial Report for the quarter ended June 30, 2021. This report has not been subject to an external audit or review.

The purpose of the federal correctional system, as defined by law, is to contribute to the maintenance of a just, peaceful and safe society by carrying out sentences imposed by courts through the safe and humane custody and supervision of offenders; and by assisting the rehabilitation of offenders and their safe reintegration into the community as law-abiding citizens through the provision of programs in penitentiaries and in the community (Corrections and Conditional Release Act, s.3). A summary description of CSC’s program activities can be found in Part II of the Main Estimates and the Departmental Plan 2021-2022.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes CSC’s spending authorities granted by Parliament and those used by the organization, consistent with the Main Estimates for the 2021-2022 fiscal year for which the interim supply was released on March 31, 2021Footnote 1 and the full supply was released June 24, 2021Footnote 2. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money can be spent by the Department. 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.

CSC 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 a cash expenditure basis.

CSC has an active Revolving Fund (CORCAN) that is included in the statutory authorities of the enclosed Statement of Authorities. CORCAN's purpose is to aid in the safe reintegration of offenders into Canadian society by providing employment and training opportunities to offenders incarcerated in federal penitentiaries and, for brief periods, after they are released into the community. CORCAN has a continuing non-lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund (CRF) for working capital, capital acquisitions and temporary financing of accumulated operating deficits, the total of which is not to exceed $20.0 million at any time. Through Supplementary Estimates (A), 2020–2021Footnote 3, this limit was increased from a previous amount of $5.0 million. This increase was requested as a consequence of reduced sales and operations resulting from the COVID-19 pandemic. The limit will gradually decrease until fiscal year 2025-26, at which point it will return to the original $5.0 million threshold.

CSC also has a Vote Netted Revenue (VNR) authority in place, currently only being utilised for transactions with the Parole Board of Canada (PBC). The total VNR authority for 2021-22 is $3.9 million, which allows CSC to bill PBC for information management and information technology services on a full incremental cost recovery basis. Throughout this report, the VNR authorities are netted with CSC’s vote 1 operating authorities.

Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results

The following graph provides a comparison of the total budgetary authorities and net budgetary expenditures as of September 30, 2021 and September 30, 2020 for CSC’s combined operating, capital and budgetary statutory authorities.

Budgetary Authorities and Net Budgetary Expenditures

This graph depicts the budgetary authorities as $2,931,068 thousand and the year to date net budgetary expenditures as $1,293,094 thousand for the second quarter ending September 30, 2021. In 2020-2021, the budgetary authorities were $2,628,342 thousand for the second quarter ending September 30, 2020 and the year to date net budgetary expenditures were $1,206,541 thousand.

Significant Changes to Authorities

As reflected in the Statement of Authorities for the period ending September 30, 2021, CSC has seen an increase in total authorities of $302.7 million or 11.5% for the current fiscal year compared to the previous fiscal year.

Operating Vote

CSC’s Operating Vote increased by $258.8 millionFootnote 4 or 11.8% compared to the authorities at the end of September 2020, which is attributed to the net effect of the following items:

Capital Vote

CSC’s Capital Vote increased by $18.0 million or 8.6% compared to the authorities at the end of September 2020, which is related to an increase in the Capital Budget Carry Forward.

Budgetary Statutory Authorities

CSC’s budgetary statutory authorities increased by $25.9 million or 11.7% compared to September 2020, which is related to:

Explanation of Significant Variances from Previous Year Expenditures

Compared with the previous fiscal year, the total year to date net budgetary expenditures increased by $86.6 million or 7.2% mainly due to the following factors:



(in millions of dollars)
Organizational Budgetary Expenditures Year Over Year Quarter Over Quarter
Total Net Budgetary Expenditures 2020-2021 1,206.5 653.3
Total Net Budgetary Expenditures 2021-2022 1,293.1 710.6
Variance 86.6 57.3
Explanation of Variances by Standard Object
Personnel 97.8 62.8
Transportation and communications 1.6 1.0
Professional and special services 34.5 21.1
Rentals 5.0 0.3
Repair and maintenance (1.8) (2.3)
Utilities, materials and supplies (36.3) (21.6)
Acquisition of land, buildings and works 10.7 7.7
Acquisition of machinery and equipment (2.1) (3.5)
Other subsidies and payments (16.0) (5.8)
Vote Netted Revenue (2.3) (2.3)
CORCAN revenues (4.5) (0.1)
Total 86.6 57.3

Risks and Uncertainties

CSC’s Departmental Plan 2021-2022 identifies the current risk environment and CSC’s key risk areas to the achievement of its strategic outcomes.

CSC secured permanent integrity funding in 2019-20 to maintain operations after completing its Comprehensive Review. In the short term, CSC is focused on maintaining operations during and in the aftermath of the COVID-19 pandemic. CSC will address existing financial challenges, and will continue working on a modernization plan over the three-year planning period. During 2020-21, CSC stabilized its existing Departmental Financial Management System (DFMS) using an Oracle technical upgrade, and in 2021-22 will continue to advance plans for the future modernization of the DFMS through a SAP hosting solution.

CSC continues to experience ongoing issues related to the Phoenix Pay System. Given the complexity of our workforce coupled with the operational nature of our organization, CSC has experienced a significantly high number of pay related issues. CSC is continuously working internally and with external stakeholders to resolve these issues.

CSC’s specific risks, as outlined in CSC’s Departmental Plan 2021-2022, are the increasingly complex and diverse profile of the offender population, the maintenance of required levels of operational safety and security in institutions and the community, the inability to implement its mandate and ensure the financial sustainability and modernization of the organization, the potential loss of support of partners delivering critical services and providing resources for offenders, the maintenance of public confidence in the federal correctional system, and the maintenance of a safe, secure, healthy, respectful, and collaborative working environment as established by its legal and policy obligations, mission, and values statement.

CSC has put in place risk mitigation strategies to address the stated risks. The integrated approach allows CSC to handle risk-related challenges, ensure operational sustainability to fulfill its mandate.

Significant Changes in Relation to Operations, Personnel and Programs

Since the beginning of the pandemic, Correctional Service Canada (CSC) has implemented rigorous infection prevention and control measures at its sites. By the end of the second quarter of 2021-2022, there were no active cases of COVID-19 among the inmate population in any of CSC’s institutions. Over 82% of the inmate population has had at least one dose of the vaccine and more than 76% are fully vaccinated. Since the situation has stabilized, CSC is gradually resuming inmate visits with appropriate public health measures in place.

Having seen no new COVID-19 cases during this second quarter of 2021-22 and a successful vaccination campaign within correctional facilities, working groups have been put in place and are developing plans to resume activities at CSC. These plans will ensure we make evidence-based decisions, put in place the proper safeguards, and determine exactly how any return to a new normal will roll-out.

Furthermore, CSC will adopt a phased and gradual restoration of interventions, programs and services approach, ensuring there are appropriate measures in place to limit health and safety risks, while supporting public safety efforts. CSC will adjust restrictions in adherence with national, provincial and local public health authorities.

A current challenge facing CSC is to understand the full impact of the COVID-19 Vaccination Guidelines for Federal Employees, which has the potential to lead to cost savings for the department, but may also result in increased personnel spending and possible significant delays with capital spending plans. Further information will be known on this topic in the coming weeks and financial risks will need to be mitigated.

CSC’s Special Operating Agency (SOA), CORCAN, operates a revolving fund with authority to spend its revenues. Due to the resulting measures around COVID-19, CORCAN could not operate under normal conditions. Consequently, CORCAN’s drawdown limit increased to $20.0M following Treasury Board approval. This limit will gradually decrease until fiscal year 2025-26, at which point it will return to the original $5.0 million threshold.

CSC received significant investments via the Fall Economic Statement (2018) to enhance mental health services for offenders, and support amendments to transform federal corrections, specifically in support of Bill C-83. Bill C-83 "An Act to amend the Corrections and Conditional Release Act and another Act" received Royal Assent on June 21, 2019. The amendments eliminate administrative and disciplinary segregation, and introduce a new correctional model including the use of structured intervention units (SIUs) for inmates who cannot be managed safely within a mainstream inmate population. CSC has started and is continuing the process of making the necessary infrastructure changes, developing policies, and hiring and training staff to operate the SIUs. Funding for these initiatives gradually increases over a period of five years and stabilizes in fiscal year 2024-2025.

There have been no changes to key senior personnel in the second quarter of 2021-2022.

Statement of Authorities (unaudited)

(in thousands of dollars)
Fiscal year 2021-2022 Fiscal year 2020-2021
Total available for use for the year ending March 31, 2022* Used during the quarter ended September 30, 2021 Year to date used at quarter-end Total available for use for the year ending March 31, 2021* Used during the quarter ended September 30, 2020 Year to date used at quarter-end
Vote 1 - Operating expenditures
Gross operating expenditures 2,460,213 632,115 1,145,788 2,197,516 588,547 1,081,428
Vote-netted revenues (3,943) (2,348) (2,348) - - -
Net operating expenditures 2,456,270 629,767 1,143,440 2,197,516 588,547 1,081,428
Vote 5 - Capital expenditures 227,457 26,302 37,300 209,427 16,250 23,435
Budgetary statutory authorities
CORCAN gross expenditures 108,388 22,535 43,571 124,334 22,352 40,305
CORCAN revenues (106,106) (29,043) (53,359) (124,334) (28,934) (48,804)
CORCAN net expenditures 2,282 (6,508) (9,788) - (6,582) (8,499)
Spending of proceeds from disposal of surplus Crown assets 813 19 19 1,046 - -
Contributions to employee benefits plans 244,246 61,061 122,123 220,353 55,089 110,177
245,059 61,080 122,142 221,399 55,089 110,177
Total budgetary authorities 2,931,068 710,641 1,293,094 2,628,342 653,304 1,206,541
Non-budgetary authorities 45 - - 45 - (1)
Total authorities 2,931,113 710,641 1,293,094 2,628,387 653,304 1,206,540

More information is available on the following page.

* Includes only Authorities available for use and granted by Parliament at quarter-end.

Note: CORCAN’s available drawdown authority at the end of September 2021 was $20.0M, of which none was used, leaving a residual balance available of 20.0M. In comparison, at the end of September 2020, CORCAN’s drawdown authority was $20.0M, of which $2.6M was utilized, and $17.4M of funding was available.

Organizational budgetary expenditures by Standard Object (unaudited)

(in thousands of dollars)
Fiscal year 2021-2022 Fiscal year 2020-2021
Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended September 30, 2021 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended September 30, 2020 Year to date used at quarter-end
Personnel 1,972,480 511,813 996,321 1,789,368 448,994 898,494
Transportation and communications 13,546 4,700 7,135 29,374 3,679 5,497
Information 273 96 143 835 62 89
Professional and special services 407,467 119,270 178,898 404,691 98,140 144,392
Rentals 25,992 9,379 16,780 23,665 9,019 11,815
Purchased repair and maintenance 23,691 5,609 8,385 29,727 7,861 10,145
Utilities, materials and supplies 217,252 31,657 54,608 163,221 53,278 90,892
Acquisition of land, buildings and works* 107,265 14,464 19,377 169,428 6,705 8,631
Acquisition of machinery and equipment* 116,305 5,522 10,874 36,345 9,048 12,998
Transfer payments 120 19 19 120 115 115
Other subsidies and payments 156,726 39,503 56,261 105,902 45,337 72,277
Total gross budgetary expenditures 3,041,117 742,032 1,348,801 2,752,676 682,238 1,255,345
Less revenues netted against expenditures
Vote netted revenue (3,943) (2,348) (2,348) - - -
CORCAN (106,106) (29,043) (53,359) (124,334) (28,934) (48,804)
Total revenues netted against expenditures (110,049) (31,391) (55,707) (124,334) (28,934) (48,804)
Total net budgetary expenditures 2,931,068 710,641 1,293,094 2,628,342 653,304 1,206,541

* These are mainly Vote 5 (Capital) expenditures.

Page details

Date modified: