Correctional Service Canada: Quarterly Financial Report, for the quarter ended June 30, 2025

On this page

• 1. Introduction
  • 1.1 Basis of presentation
• 2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results
  • 2.1 Significant changes to authorities
  • 2.2 Explanation of significant variances from previous year expenditures
• 3. Risks and uncertainties
• 4. Significant changes in relation to operations, personnel and programs
• 5. Approvals by senior officials
• 6. Statement of authorities (unaudited)
• 7. Departmental budgetary expenditures by standard object (unaudited)

1. Introduction

This quarterly report has been prepared by management 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. 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 Correctional Service Canada (CSC)’s program activities can be found in Part II of the Main Estimates and the Departmental Plan 2025 to 2026.

1.1 Basis of presentation

This quarterly report has been prepared 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 and Supplementary Estimates (as applicable). 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 $5.0 million.

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

The following graph provides a comparison of the net budgetary authorities and expenditures as of June 30, 2025 and June 30, 2024 for CSC’s combined operating, capital and budgetary statutory authorities.

Figure 1: Highlights of fiscal quarter and fiscal year-to-date (YTD) results

2.1 Significant changes to authorities

As reflected in the Statement of authorities for the period ending June 30, 2025, CSC has seen an increase in total authorities of $691.7 million or 21.8% for the current fiscal year compared to the previous fiscal year.

Table 1: Comparison of net budgetary authorities for the quarters ended June 30, 2025, and June 30, 2024
(in millions of dollars)

Vote 1 - Operating

CSC’s Operating Vote increased by $571.9 million or 21.5% compared to the authorities at the end of June 2024, which is attributed to the net effect of the following significant items:

• an increase of $365.1 million related to funding for class action lawsuits
• an increase of $108.4 million in funding to cover incremental expenditures due to changes in offender population volumes and price fluctuations
• an increase of $61.0 million in funding to stabilize operations related to workplace injuries
• an increase of $29.8 million related to compensation for the funded portion of collective agreement increases
• an increase of $13.4 million related to funding for the operation of the National Satellite Training Academy
• an increase of $11.8 million in funding to continue enhanced cleaning protocols across correctional facilities
• a decrease of $11.8 million related to Refocusing Government Spending
• a decrease of $5.5 million for a transfer to Shared Services Canada for the Microsoft 365 E5 Enterprise Standard

Vote 5 - Capital

CSC’s Capital Vote increased by $74.6 million or 28.4% compared to the authorities at the end of June 2024, which is related to the net effect of the following significant items:

• an increase of $39.5 million in funding for the construction of a Health Centre of Excellence
• an increase of $30.0 million in funding to maintain and repair correctional facilities

Budgetary statutory authorities

CSC’s budgetary statutory authorities increased by $45.1 million or 17.8% compared to June 2024, which is mainly related to the department’s allocation of the employer’s share of the employee benefit plan.

2.2 Explanation of significant variances from previous year expenditures

As reflected in the Statement of authorities for the period ending June 30, 2025, CSC has seen an increase in total net budgetary expenditures of $18.9 million or 2.8% for the current fiscal year compared to the previous fiscal year.

Table 2: Comparison of net budgetary expenditures for the quarters ended June 30, 2025, and June 30, 2024
(in millions of dollars)

Vote 1 - Operating

CSC’s operating expenditures increased by $27.8 million, compared to the first quarter of 2024 to 2025, mainly due to the following:

• personnel expenditures increased by $35.2 million primarily due to the ratification of collective agreements in 2024 to 2025
• rental expenditures decreased by $5.9 million primarily due to a decrease in license / maintenance fees for client software expenditures as a result of the transfer of funding to Shared Services Canada
• utilities, materials and supplies decreased by $5.5 million primarily due to a delay in medical supplies purchases and due to a decrease in the allowance for footwear, which is payable every second year
• other subsidies and payments increased by $4.2 million due to an increase in court ordered payments

Vote 5 – Capital

CSC’s capital expenditures decreased by $22.9 million, compared to the first quarter of 2024 to 2025, mainly due to the following:

• acquisition of land, buildings and works decreased by $13.1 million, mainly due to the prorogation of the federal government, which led to temporary delays in certain activities and projects
• acquisition of machinery and equipment decreased by $9.0 million primarily due to the essential investments in the first quarter of 2024 to 2025

Budgetary statutory expenditures

CSC’s statutory expenditures increased by $14.0 million, compared to the first quarter of 2024 to 2025, mainly due to an increase in expenditures related to the employer’s contributions to the employee benefit plan. This will be adjusted at year-end based on total salary expenditures.

3. Risks and uncertainties

CSC’s specific risks, as outlined in CSC’s Departmental Plan 2025-2026, 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, and the potential loss of support of partners delivering critical services and providing resources for offenders.

CSC will address existing financial challenges and will continue working on a modernization plan over the three-year planning period.

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 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.

Treasury Board of Canada Secretariat has provided CSC with its baseline calculations for the spending reduction targets resulting from the Refocusing Government Spending, for which CSC is working on a multi-year savings plan.

In July 2025, the Government has launched a Comprehensive Expenditure Review (CER). As part of this initiative, departments have been asked to identify savings of 15% of their allocated budget drawn from planned spending in the 2025-26 Main Estimates. The department is currently reviewing and prioritizing its activities to identify potential savings opportunities. The approved government-wide savings reflected will begin to be reflected in the 2026-2027 Main Estimates.

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

There have been no changes to key executives in the first quarter of 2025 to 2026.

5. Approvals by senior officials

Approved by:

Ottawa, Canada
August 19, 2025

6. Statement of authorities (unaudited)

Table 3: Statement of authorities (unaudited, in thousands of dollars) for the fiscal year 2025 to 2026

Table 4: Statement of authorities (unaudited, in thousands of dollars) for the fiscal year 2024 to 2025

7. Departmental budgetary expenditures by standard object (unaudited)

Table 5: Departmental budgetary expenditures by standard object (unaudited, in thousands of dollars) for fiscal year 2025 to 2026

Table 6: Departmental budgetary expenditures by standard object (unaudited, in thousands of dollars) for fiscal year 2024 to 2025