Department of Finance Canada Quarterly Financial Report for the Quarter Ended September 30, 2019 (unaudited)

1. Introduction

1.1 Authority, Mandate and Program Activities
1.2 Basis of Presentation
1.3 Department of Finance Canada – Financial Structure

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

2.1 Authorities Analysis
2.2 Expenditure Analysis

3. Risks and Uncertainties

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

5. Approval by Senior Officials

1. Introduction

This Quarterly Financial 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Reports. This Quarterly Financial Report should be read in conjunction with the Main Estimates and Supplementary Estimates of the Department of Finance Canada.

The Quarterly Financial Report has not been subject to an external audit or review.

1.1 Authority, Mandate and Program Activities

The Department of Finance Canada (the 'Department') provides the Government of Canada with high quality advice on appropriate economic, fiscal, tax, social, security, international and financial sector policies and programs with the goal of strengthening the Canadian economy and maintaining sustainable fiscal policy and social programs.

The Department's responsibilities include the following:

The description of the program activities for the Department can be found in Part II of the Main Estimates and the Departmental Plan.

1.2 Basis of Presentation

This Quarterly Financial Report has been prepared by management using an expenditure basis of accounting, and a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. 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 for both fiscal years as well as transfers from Treasury Board central votes that are approved by the end of the quarter.

The authority of Parliament is required before monies 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.

The Department uses the accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.3 Department of Finance Canada – Financial Structure

The Department has three major categories of expenditure authority. These categories are:

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

This departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the 2019-20 Main Estimates, as well as transfers from Treasury Board Central Votes that were approved by the end of the quarter.

The following graph provides a comparison of budgetary authorities available for the full fiscal year and budgetary expenditures for the first six months of 2018–19 and 2019-20. Non-budgetary authorities related to the value of loans disbursed to Crown corporations participating in the Crown Borrowing Framework are not reflected in the Estimates.

Comparison of Budgetary Authorities and Year to Date Budgetary Expenditures for the Quarter ended September 30 of Fiscal Years 2018-19 and 2019-20

Percentages reflect the utilization of authorities at quarter-end.

Sections 2.1 and 2.2 below highlight the significant items that contributed to the increase in the resources available from 2018-19 to 2019-20 and the increase in actual expenditures as at September 30, 2019 compared to September 30, 2018. Full details on authorities and expenditures can be found in Table 1, Statement of Authorities at the end of this document.

2.1 Authorities Analysis

The following table provides a comparison of cumulative authorities by vote for the current and previous fiscal years.

Comparison of Authorities Available for Use for the Year as at September 30 of Fiscal Years 2018-19 and 2019-20
      Variance
Authorities Available (in millions) 2019-20 2018-19 $ %
Budgetary        
  Voted:        
    Vote 1 - Program Authorities 101.7 100.3 1.4 1.4%
  Statutory:        
    Major transfers to other levels of government 73,584.5 70,438.9 3,145.6 4.5%
    Interest on Unmatured Debt and Interest on Other Liabilities 24,691.0 22,838.0 1,853.0 8.1%
    Direct program expenses 590.1 599.5 (9.4) -1.6%
  Total statutory 98,865.6 93,876.4 4,989.2 5.3%
Total Budgetary authorities 98,967.3 93,976.7 4,990.6 5.3%
Non-Budgetary 51.4 52.3 (0.9) -1.7%
Total authorities 99,018.7 94,029.0 4,989.7 5.3%

2.1.1 Voted Budgetary Authorities

Total 2019–20 Vote 1 program authorities available as at September 30, 2019 are $101.7 million compared to $100.3 million for the same period in 2018–19, representing an increase of $1.4 million, primarily due to the net effect of the following factors:

Total increases were $4.2 million and consist of:

These increases were offset by a decrease of $2.8 million in lapsing funds from 2018-19 that contributed to the operating budget carry forward into 2019-20.

2.1.2 Statutory Budgetary Authorities

Major transfer to other levels of government increased by $3,145.6 million, primarily due to the net effect of the following factors:

Total increases were $3,286.6 million and consist of:

Decreases were $141.0 million and consist of:

Interest on Unmatured Debt and Interest on Other Liabilities increased by $1,853.0 million, due to the net impact of the following factors:

Direct program expenses decreased by $9.4 million, due to the following factors:

These decreases were slightly offset by $0.7 million in increased authorities for various programs.

2.1.3 Non-Budgetary Authorities

Total 2019–20 non-budgetary authorities decreased by $0.9 million, from $52.3 million to $51.4 million, due to the following factor:

2.2 Expenditure Analysis

The following table provides a comparison of Year-to-Date spending as at September 30 by vote for the current and previous fiscal years.

Comparison of Year to Date Expenditures for the Quarter Ended
September 30 of Fiscal Years 2018-19 and 2019-20
      Variance
Year to date expenditures (in millions) 2019-20 2018-19 $ %
Budgetary        
  Voted:        
    Vote 1 - Program Expenditures 48.0 49.8 (1.8) -3.6%
  Statutory:        
    Major transfers to other levels of government 37,042.9 35,615.2 1,427.7 4.0%
    Interest on Unmatured Debt and Interest on Other Liabilities 12,594.4 11,709.0 885.4 7.6%
    Direct program expenses 320.5 97.7 222.8 228.0%
  Sub Total Statutory 49,957.8 47,421.9 2,535.9 5.3%
Total Budgetary expenditures 50,005.8 47,471.7 2,534.1 5.3%
Non-Budgetary 22,546.9 22,003.4 543.5 2.5%
Total year to date expenditures 72,552.7 69,475.1 3,077.6 4.4%

2.2.1 Voted Budgetary Expenditures

Total 2019–20 Vote 1 program expenditures at the end of the second quarter were $48.0 million compared to $49.8 million for the same period in fiscal year 2018–19, representing a decrease of $1.8 million. This decrease is primarily attributable to:

2.2.2 Statutory Budgetary Expenditures

Major transfers to other levels of government increased by $1,427.7 million, primarily due to increases for the following:

The increases above were offset primarily by higher recoveries in the Alternative Payments for Standing Programs, decreases in the Additional Fiscal Equalization to Nova Scotia and higher Youth Allowances Recovery.

Interest on unmatured debt and interest on other liabilities increased by $885.4 million, due to the net impact of the following two factors:

Direct program expenses increased by $222.8 million primarily due to the following factors:

These increases were offset by a decrease of $17.9 million in the losses on foreign exchange, due to the revaluation of International Monetary Fund related accounts.

2.2.3 Non-Budgetary Expenditures

Non-budgetary expenditures at the end of the second quarter of 2019-20 increased by $543.5 million primarily due to the following factors:

These increases were offset by a decrease of $3.8 million in payments under the Bretton Woods and Related Agreements Act – International Organizations (Gross)

Significant Changes on the Departmental Budgetary Expenditures by Standard Object Table

Table 2 located at the end of this report, presents budgetary expenditures by standard object. The main variances of $2,536.4 million in year-to-date expenditures between 2019–20 and 2018-19 by standard object are as follows:

Quarterly Spending

The following table provides a comparison of quarterly spending by vote for the current and previous fiscal years.

Comparison of Quarterly Expenditures for the Second Quarter Ended
September 30 of Fiscal Years 2018-19 and 2019-20
      Variance
Expenditures for the Second Quarter (in millions) 2019-20 2018-19 $ %
Budgetary        
  Voted:        
    Vote 1 - Program Expenditures 23.8 23.9 (0.1) -0.4%
  Statutory:        
    Major transfers to other levels of government 18,350.9 17,696.2 654.7 3.7%
    Interest on Unmatured Debt and Interest on Other Liabilities 5,956.7 5,759.1 197.6 3.4%
    Direct program expenses 24.4 48.5 (24.1) -49.7%
  Sub Total Statutory 24,332.0 23,503.8 828.2 3.5%
Total Budgetary expenditures 24,355.8 23,527.7 828.1 3.5%
Non-Budgetary 10,636.2 10,931.2 (295.0) -2.7%
Total expenditures for the second quarter 34,992.0 34,458.9 533.1 1.5%

Variance explanations of the quarterly spending are in line with year to date variance explanations provided in Section 2.2.

3. Risks and Uncertainties

The complex and horizontal issues of the Department require ongoing discussions, consultations and coordination with central agencies, other departments and governments, and external stakeholders. In this context, the Department maintains high-level engagement and strong collaborative relationships with domestic and international partners to fulfill its commitments and deliver for Canadians.

The Department operates in an environment where the decisions and actions of its employees can have far-reaching impacts on the Canadian public and economy. As a knowledge–based organization, the Department recognizes that its employees are its strength. The Department will continue to focus on providing its employees a healthy and enabling work environment, so that it can attract, develop and retain a diverse and high–performing workforce that is fully committed to the success of the organization.

The Department's Corporate Risk Profile provides a snapshot of the Department's key corporate risks. The Department monitors its corporate risks and associated risk responses to identify areas of opportunity and to reflect progress made in implementing mitigation strategies.

The Department relies on efficient and effective information management (IM) and technology to deliver informed policy advice and operate as an agile and responsive knowledge-based institution, while protecting its highly sensitive institutional information.

Cybersecurity incidents and information technology (IT) failures in supporting systems have been identified as risks that could cause serious disruptions and affect the Department's ability to execute critical government operations, including tax and transfer payments, and public debt-related transactions. A Business Continuity Plan (BCP) is in place to ensure that critical services are maintained in case of a system failure. Further, the Department is committed to building on recent improvements to increase the security posture of its IT infrastructure and ensure the effective protection of its information assets.  

4. Significant Changes in Relation to Operations, Personnel and Programs

There have been no significant changes in relation to operations, personnel, and programs.

5. Approval by Senior Officials

Approved by:

Original signed by
Paul Rochon, Deputy Minister

Original signed by
Darlene Bess, Chief Financial Officer

Ottawa, Canada
November 29, 2019

Department of Finance Canada
Quarterly Financial Report for the quarter ended September 30, 2019
Table 1 - Statement of Authorities (unaudited)
(in thousands of dollars)
Fiscal year 2019-2020 Fiscal year 2018-2019
Total available for use for the
year ending
March 31, 2020* 
Used during the
quarter ended
September 30, 2019
Year to date used at
quarter-end
Total available for use for the
year ending
March 31, 2019*
Used during the
quarter ended
September 30, 2018
Year to date used at
quarter-end
Budgetary Authorities
  Voted authorities
    Program expenditures 101,744 23,807 47,969 100,252 23,954 49,776
  Total voted authorities 101,744 23,807 47,969 100,252 23,954 49,776
  Statutory authorities
  Major transfers to other levels of government
    Canada Health Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) 40,372,636 10,093,159 20,186,318 38,583,703 9,645,926 19,291,852
    Canada Social Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) 14,585,672 3,646,418 7,292,836 14,160,847 3,540,211 7,080,423
    Fiscal arrangements
      Fiscal Equalization (Part I - Federal-Provincial Fiscal Arrangements Act) 19,837,259 4,959,314 9,918,629 18,958,259 4,739,565 9,479,130
      Territorial Financing (Part I.1 - Federal-Provincial Fiscal Arrangement Act) 3,948,403 805,475 2,337,455 3,785,322 772,205 2,240,910
      Statutory Subsidies (Constitution Acts, 1867-1982, and Other Statutory Authorities) 42,484 20,087 21,324 42,356 19,941 21,178
      Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964) (932,853) - (466,427) (909,825) - (454,913)
    Other major transfers
      Additional Fiscal Equalization Offset Payment to Nova Scotia (Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act) 8,227 - - 18,092 - -
      Additional Fiscal Equalization to Nova Scotia (Part I - Federal-Provincial Fiscal Arrangements Act) (72,587) (22,456) (44,912) (113,203) - -
    Alternative Payments for Standing Programs (Part VI - Federal-Provincial Fiscal Arrangements Act) (4,204,769) (1,051,193) (2,102,385) (4,086,656) (1,021,664) (2,043,328)
    Refund of prior year expenditures - (103,000) (103,000) - - -
    Payment under subsection 24(1) of the Financial Administration Act resulting from a remission order issued pursuant to subsection 23(2.1) of that Act - 3,067 3,067 - - -
  Total major transfers to other levels of government 73,584,472 18,350,871 37,042,905 70,438,895 17,696,184 35,615,252
  Interest on Unmatured Debt and Interest on Other Liabilities
    Interest on Unmatured Debt and Other Public Debt Costs 18,684,000 4,459,978 9,554,229 16,591,000 4,183,622 8,518,302
    Interest on Other Liabilities 6,007,000 1,496,711 3,040,124 6,247,000 1,575,498 3,190,719
  Total Interest on Unmatured Debt and Interest on Other Liabilities 24,691,000 5,956,689 12,594,353 22,838,000 5,759,120 11,709,021
  Direct program expenses
    Operating expenses
      Purchase of Domestic Coinage 88,000 30,366 50,343 95,000 25,111 50,584
      Contributions to Employee Benefit Plans 12,364 3,063 6,127 11,628 2,888 5,777
      Minister of Finance - Salary and motor car allowance 88 22 44 86 21 43
    Transfer payments
      Payments to International Development Association 441,620 - - 441,610 - -
      Debt payments on behalf of poor countries to International Organizations pursuant to section 18(1) of the Economic Recovery Act 48,080 - - 51,200 - -
    Other
      Losses on Foreign Exchange - (15,963) 21,710 - 19,657 39,571
      Payment of Liabilities Previously Recorded as Revenue - 1,266 2,169 - 775 1,685
      Payment to the Canada Infrastructure Bank (Canada Infrastructure Bank Act) - 3,138 237,638 - - -
      Payment under subsection 12(2) of the Canadian Commercial Corporation Act to the Canadian Commercial Corporation - 2,500 2,500 - - -
  Total direct program expenses 590,152 24,392 320,531 599,524 48,452 97,660
  Total statutory authorities 98,865,624 24,331,952 49,957,789 93,876,419 23,503,756 47,421,933
Total budgetary authorities 98,967,368 24,355,759 50,005,758 93,976,671 23,527,710 47,471,709
Non-budgetary authorities
  Purchase of initial shares pursuant to the Asian Infrastructure Investment Bank Agreement Act 51,400 - - 52,300 - -
  Advances to Crown corporations (Gross) - 10,616,006 22,518,731 - 10,912,520 21,973,408
  Advances pursuant to section 13(1) of the Financial Consumer Agency of Canada Act (Gross) - - 8,000 - 3,000 6,000
  Payments under Bretton Woods and Related Agreements Act - International Organizations (Gross) - 20,241 20,241 - 15,738 23,991
Total non-budgetary authorities 51,400 10,636,247 22,546,972 52,300 10,931,258 22,003,399
Total authorities 99,018,768 34,992,006 72,552,730 94,028,971 34,458,968 69,475,108
* Includes only Authorities available for use and granted by Parliament at quarter-end.
Department of Finance Canada
Quarterly Financial Report for the quarter ended September 30, 2019
Table 2 - Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars)
  Fiscal year 2019-2020 Fiscal year 2018-2019
Planned expenditures for the year
ending
March 31, 2020
Expended during the
quarter ended
September 30, 2019
Year to date
used at
quarter-end
Planned expenditures for the year
ending
March 31, 2019
Expended during the
quarter ended
Septemebr 30, 2018
Year to date
used at
quarter-end
Expenditures:            
  Personnel 93,202 23,619 45,477 90,320 21,595 43,329
  Transportation and communications 2,547 579 1,271 3,312 784 1,574
  Information 1,839 271 651 1,856 557 919
  Professional and special services 12,303 1,758 3,842 12,064 3,311 5,767
  Rentals 1,885 143 622 1,177 23 1,908
  Repair and maintenance 322 108 120 648 98 110
  Utilities, materials and supplies 88,319 30,424 50,434 95,560 25,230 50,735
  Acquisition of machinery and equipment 1,893 18 62 2,102 66 417
  Transfer payments 74,074,207 18,351,421 37,044,005 70,931,762 17,696,229 35,615,697
  Public debt charges 24,691,000 5,956,689 12,594,353 22,838,000 5,759,120 11,709,021
  Other subsidies and payments 1 (9,271) 264,921 20 20,697 42,232
Total gross budgetary expenditures 98,967,518 24,355,759 50,005,758 93,976,821 23,527,710 47,471,709
Less Revenues netted against expenditures 150 - - 150 - -
Total net budgetary expenditures 98,967,368 24,355,759 50,005,758 93,976,671 23,527,710 47,471,709
Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: