Standing Committee on Public Accounts (PACP) Department of Finance Appearance on the Public Accounts of Canada 2024

Department of Finance Significant Balances and Sensitive Transactions

Issue

The information outlined below is disclosed in the 2024 Public Accounts of Canada as a balance and/or transaction for the Department of Finance.

Significant balances: highlighting the foreign exchange account assets and liabilities, and the financial assistance (loan) to the national government of Ukraine.

Sensitive transactions: highlighting topical information disclosed in the Public Accounts of Canada, specifically related to the Department of Finance.

Key points

• Assets in the Foreign Exchange Account increased, while liabilities increased.
• New loans of $2 billion were provided to Ukraine in 2024. The loan remains in good standing.
• Some Department of Finance transactions in the Public Accounts are sensitive, due to public interest (procurement of professional and special services, losses, and Minister's travel expenditures), or the potential dollar value impact to the department (contingent liabilities). The department has controls in place to reduce the risks associated with these transactions. *Sentence redacted*. Details are summarized in the background section.

Background

Foreign exchange accounts (vol I p. 299-312)

The foreign exchange accounts represent the largest component of the official international reserves of the government. In 2024: 

• Foreign exchange account assets increased by $10.7 billion (+5.9%; 2024 - $180.1B; 2023 - $169.4B).
• Foreign exchange account liabilities decreased by $0.1 billion (-0.2%; 2024 - $44.1B; 2023 - $44.2B;).

Financial assistance – National governments (vol 1 p. 334, 341)

In 2024, the government provided $2 billion CAD (2023 - $4.9 billion CAD) in financial assistance in the form of interest-bearing loans to Ukraine. As of March 31, 2024, the outstanding loan balance to the Ukraine was $6.1 billion CAD ($4.3 billion CAD as of March 31, 2023).

Contingent liabilities (vol I p. 428-434)

Guarantees (vol I p. 428-432)

The Department of Finance has two loan guarantees and one insurance program guarantee. As at March 31, 2024, there were no provisions for loss made and all guarantees remained in good standing.

• As of March 25, 2024, the European Bank for Reconstruction and Development's (EBRD) credit facility with Naftogaz has been fully repaid, resulting in Canada's guarantee of the facility no longer being in effect. (2024 - nil; 2023 - $53.5M). Naftogaz is Ukraine's state owned oil and gas company.
• The loan guarantee to the International Bank for Reconstruction and Development (IBRD) for their loan to the Republic of Iraq increased by $1 million (+0.6%; 2024 - $160M; 2023 - $159M) due to changes in the CAD-USD foreign exchange rates.
• The Mortgage or Hypothecary Insurance Protection Program's exposure increased by $7 billion (+2.7%; 2024 - $268.2B; 2023 - $261.2B) based on increases in the outstanding mortgage balances held by insurers under the program.

International organizations – Callable share capital (vol I p. 433)

No new callable share capital was subscribed to during 2024. The balance increased by $19 million (+0.1%, 2024 - $12,991M; 2023 - $12,972M) entirely due to foreign exchange fluctuations as share capital for Multilateral Development Banks are denominated in foreign currencies (USD and EURO).

Losses of public money and property (vol III p. 139-166)

• In 2024, the Department of Finance had losses of public money totalling $2,795 (2023 – $7,753) due to unauthorized use of corporate acquisition cards. The amount recovered during 2024 was $2,295 and the remaining $500 was recovered in 2025. Unauthorized use was either due to compromised cards (amounts fully recovered by the credit card company), or accidental use by employees (recovered from employees via cheque). Consequently, the department has implemented enhanced controls, training, and oversight.
• In 2024, two security badges, one cell phone and one computer was stolen totaling $3,043 (2023 – two cell phone, five computers and one other electronic device value totalling $7,367). For stolen security badges, Security remotely disables access immediately upon discovery. For stolen phones, the department securely wipes data. For stolen computers, the department remotely changes all passwords and monitors to ensure that no unauthorized logins are detected.
• In the normal course of business, there were accidental losses, destruction or damage to: security badges (2024 – 13 valued at $30; 2023 – nil); cell phones (2024 – 12 valued at $13,272; 2023 – 36 valued at $34,295); computers (2024 – 14 valued at $21,057; 2023 – 43 valued at $49,531); and other electronics (2024 – 10 valued at $580; 2023 – 85 valued at $9,365).

Professional and special services (vol III p. 168-175)

Professional and special services operating expenditures for the Department of Finance decreased by 8.2% ($1.3 million) from $15.9 million in 2023 to $14.6 million in 2024.

The most significant variances are as follows:

• A decrease in legal services of -$1.85 million (-32%; 2024 - $3.85M; 2023 - $5.70 million);
• Offset by an increase in information services of $0.3 million (+13.2%; 2024 - $2.7M; 2023 - $2.4 million) and in training and educational services of $0.3 million (24.8%; 2024 - $1.3M; 2023 - $1.0 million).

Minister's Office Expenditures (vol III p. 272-285)

• The office expenditures for the Minister of Finance decreased by $0.1 million (-4%; 2024 - $2.4 million; 2023 - $2.5 million).
• The office expenditures for the Associate Minister of Finance decreased by $0.27 million (-59.6%; 2024 - $0.18M; 2023 - $0.45M). Office expenditures were minimal in 2024 due to the fact the Associate Minister of Finance left the department in July 2023.
• Only expenditures charged to the Department of Finance budget are reported in the department's Public Accounts. Since the Minister's have dual roles, additional expenditures for the Deputy Prime Minister and Minister of Finance were charged to the Privy Council Office (PCO) budget and reported separately. Similarly, additional expenditures for the Minister of Tourism and Associate Minister of Finance were charged to the Innovation, Science and Economic Development Canada (ISED) budget and reported separately.

Travel expenses of ministers and parliamentary secretaries and international travel expenditures of ministers, parliamentary secretaries and ministers' staff (vol III p. 286-293)

• Total travel expenditures of ministers and parliamentary secretaires decreased by -$5,359 (-4.0%) and internation travel expenditures of ministers and parliamentary secretaires decreased by -$35,892 (-14.5%).