Department of Finance Canada Quarterly Financial Report for the quarter ended June 30, 2021 (unaudited)

Table of contents

1. Introduction

2. Highlights of Fiscal Quarter Results

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 2021–22 Main Estimates and Supplementary Estimates of the Department of Finance Canada.

This 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) helps the Government of Canada develop and implement strong and sustainable economic, fiscal, tax, social, security, international and financial sector policies and programs. It plays an important central agency role, working with other departments to ensure that the Government's agenda is carried out and that ministers are supported with high-quality analysis and advice.

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 (2020–21 and 2021–22) 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 Results

The following section highlights the financial results and provides explanations for the fiscal quarter ended June 30, 2021 as compared to the same period last year.

Highlights of the Fiscal Quarter Results
(thousands of dollars)
2021-22 Authorities as at June 30, 2021 2020-21 Authorities as at June 30, 2020 Variance in Authorities Expenditures during the quarter ended June 30, 2021 Expenditures during the quarter ended June 30, 2020 Variance in Expenditures
Budgetary Authorities
Vote 1 - Program Expenditures
114,495 97,687 16,808 27,788 25,733 2,055
Statutory Authorities
Major transfers to other levels of government
83,153,228 77,543,843 5,609,385 19,872,312 21,435,158 (1,562,846)
Interest on Unmatured Debt and Interest on Other Liabilities
21,306,000 22,836,000 (1,530,000) 5,803,797 4,661,658 1,142,139
Direct program expenses
4,541,478 569,749  3,971,729 145,770 195,885  (50,115)
Total Statutory Authorities
109,000,706 100,949,592 8,051,114 25,821,879 26,292,701 (470,822)
Total Budgetary Authorities 109,115,201 101,047,279 8,067,922 25,849,667 26,318,434 (468,767)
Non-Budgetary Authorities 273,400 250,200 23,200 19,117,726 14,601,070 4,516,656
Total Authorities 109,388,601 101,297,479 8,091,122 44,967,393 40,919,504 4,047,889

2.1 Statement of Authorities

As per Table 1 – Statement of Authorities (unaudited), the total authorities available for use  increased by $8,091.1 million, as compared to the same quarter in 2020–21, from $101,297.5 million to $109,388.6 million.

The following table provides a detailed explanation of the changes in the authorities available for use:

Explanation of changes in authorities available for use
(2021-22 compared to 2020-21)
Budgetary Authorities Change (thousands of dollars)
Vote 1 - Program Expenditures
Increase due to full supply of the 2021-22 Main Estimates funding being received in 2021-22, whereas in 2020-21, only partial supply (75 percent) was received as a result of limited Parliamentary sessions to study supply due to the COVID-19 pandemic. 16,808
Sub-total Vote 1 - Program Expenditures 16,808
Statutory Authorities
Increase in major transfers to other levels of government largely due to measures implemented for the government's legislated growth for the Canada Health Transfer, payments to the provinces and territories in respect of Canada's COVID-19 Immunization Plan, and COVID-19 payments related to the Canada Health Transfer offset by a decrease in one-time payments to the province of Alberta, Saskatchewan and British Columbia to clean up inactive oil and gas wells. 5,609,385
Decrease in interest on unmatured debt and interest on other liabilities primarily due to the downward revision of forecasted short-term and long-term interest rates by private sector economists. (1,530,000)
Increase in direct program expenses mostly due to an increase in authorities related to planned payments to the Canada Infrastructure Bank. 3,971,729
Sub-total Statutory Authorities 8,051,114
Total Budgetary Authorities 8,067,922
Non-Budgetary Authorities  
Increase in non-budgetary authorities mostly due to an increase in authorities for payments to the International Finance Corporation for the purchase of shares offset by a decrease in authorities related to a one-time payment to Alberta's Orphan Well Association in 2020-21. 23,200
Total Non-Budgetary Authorities 23,200
Total Authorities 8,091,122

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

As per Table 2 – Departmental budgetary expenditures by Standard Object (unaudited), the total net budgetary expenditures in the first quarter of 2021–22 decreased by $468.8 million, as compared to the same quarter in 2020–21 largely due to the following:

2.3 Non-Budgetary Expenditures

Total net non-budgetary expenditures in the first quarter of 2021–22 increased by $4,516.7 million, as compared to the same quarter in 2020–21. This is largely due to an increase in the value of loans disbursed to Crown corporations participating in the Crown Borrowing Program, resulting from an increase in business requirements of the participating entities. The increase is also a result of share purchases made in the Canada Enterprise Emergency Funding Corporation to provide a source of funds for the Large Employer Emergency Financing Facility as a result of the COVID-19 pandemic.

3. Risks and Uncertainties

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 impacts of the COVID-19 pandemic continue to be felt globally and the Department has played a pivotal role in enabling the government to implement a broad span of support measures as part of the Government of Canada's economic response. As the pandemic continues to unfold, the Department will monitor departmental risks associated with COVID-19 and ensure mitigation strategies are in place.

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

Effective June 1, 2021, Nick Leswick was appointed Associate Deputy Minister of Finance. Mr. Leswick was previously the Assistant Deputy Minister of the Economic and Fiscal Policy Branch at the Department of Finance.

Ava Yaskiel vacated the position of Associate Deputy Minister and G7/G20 & Financial Stability Board Deputy for Canada effective June 28, 2021.

5. Approval by Senior Officials

Approved by:

Nick Leswick for Michael Sabia, Deputy Minister
Ottawa, Canada
August 27, 2021

Darlene Bess, CPA, CA
Chief Financial Officer
Ottawa, Canada
August 27, 2021

Department of Finance Canada
Quarterly Financial Report for the quarter ended June 30, 2021
Table 1 – Statement of Authorities (unaudited)

(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 June 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 June 30, 2020
Year to date used at
quarter-end
Budgetary Authorities
Voted authorities
Vote 1 - Program expenditures
114,495 27,788 27,788 97,687 25,733 25,733
Total voted authorities
114,495 27,788 27,788 97,687 25,733 25,733
Statutory authorities
Major transfers to other levels of government
Canada Health Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act)
43,125,784 10,781,446 10,781,446 41,869,693 10,467,423 10,467,423
Canada Social Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act)
15,473,939 3,868,485 3,868,485 15,023,242 3,755,810 3,755,810
Payments to the provinces and territories in respect of Canada's COVID-19
immunization plan (Subsection 198(2) - Budget Implementation Act, 2021,
No. 1)
1,000,000 - - - - -
Payments related to Canada Health Transfer (Section 24.72 -
Federal-Provincial Fiscal Arrangements Act)
4,000,000 - - - - -
Fiscal arrangements
Fiscal Equalization (Part I - Federal-Provincial Fiscal Arrangements Act)
20,910,789 5,227,697 5,227,697 20,572,844 5,143,211 5,143,211
Territorial Financing (Part I.1 - Federal-Provincial Fiscal Arrangements Act)
4,379,879 1,699,393 1,699,393 4,180,225 1,621,927 1,621,927
Statutory Subsidies (Constitution Acts, 1867-1982, and Other Statutory Authorities)
42,639 1,237 1,237 42,644 1,238 1,238
Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964)
(1,043,982) (521,991) (521,991) (1,024,033) (516,669) (516,669)
Other major transfers
Alternative Payments for Standing Programs (Part VI - Federal-Provincial Fiscal Arrangements Act)
(4,735,820) (1,183,955) (1,183,955) (4,640,772) (1,162,397) (1,162,397)
Payment to the Province of Alberta pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up inactive oil and gas wells
- - - 1,000,000 - -
Payment to the Province of Saskatchewan pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up orphan and inactive oil and gas wells
- - - 400,000 - -
Payment to the Province of British Columbia pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up orphan and inactive oil and gas wells
- - - 120,000 - -
COVID-19 Essential Workers Support Fund (paragraph 60.2(2)b of the Financial Administration Act)
- - - - 2,124,615 2,124,615
Total major transfers to other levels of government 83,153,228 19,872,312 19,872,312 77,543,843 21,435,158 21,435,158
Interest on Unmatured Debt and Interest on Other Liabilities
Interest on Unmatured Debt and Other Public Debt Costs
16,173,000 4,505,550 4,505,550 17,352,000 3,283,020 3,283,020
Interest on Other Liabilities
5,133,000 1,298,247 1,298,247 5,484,000 1,378,638 1,378,638
Total Interest on Unmatured Debt and Interest on Other Liabilities 21,306,000 5,803,797 5,803,797 22,836,000 4,661,658 4,661,658
Direct program expenses
Operating expenses
Purchase of Domestic Coinage
84,000 18,288 18,288 86,000 20,307 20,307
Contributions to Employee Benefit Plans
13,037 3,235 3,235 12,523 3,131 3,131
Minister of Finance - Salary and motor car allowance
91 15 15 89 22 22
Minister of Middle Class Prosperity and Associate Minister of Finance – Motor car allowance
2 1 1 2 1 1

Payments for government advertising programs pursuant to the Public Health Events of National Concern Payments Act

- - - 10,000 544 544
Transfer payments
Payment to the International Development Association (Bretton Woods and Related Agreements Act)
423,240 - - 423,240 - -
Debt payments on behalf of poor countries to International Organizations pursuant to section 18(1) of the Economic Recovery Act
53,132 - - 37,895 - -
Establishment of a Canadian Securities Regulation Regime and Canadian Regulatory Authority (Budget Implementation Act, 2009)
- - - - 40,331 40,331
Other
Losses on Foreign Exchange
- 48,767 48,767 - 109,554 109,554
Payment of Liabilities Previously Recorded as Revenue
- 1,726 1,726 - 7,495 7,495
Payment to the Canada Infrastructure Bank (Canada Infrastructure Bank Act)
3,967,976 60,738 60,738 - 14,500 14,500
Payment under subsection 12(2) of the Canadian Commercial Corporation Act to the Canadian Commercial Corporation
- 13,000 13,000 - - -
Total direct program expenses
4,541,478 145,770 145,770 569,749 195,885 195,885
Total statutory authorities
109,000,706 25,821,879 25,821,879 100,949,592 26,292,701 26,292,701
Total budgetary authorities 109,115,201 25,849,667 25,849,667 101,047,279 26,318,434 26,318,434
Non-budgetary authorities
Purchase of initial shares pursuant to the Asian Infrastructure Investment Bank Agreement Act
49,000 - - 50,200 - -
Payment to Alberta’s Orphan Well Association pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up orphan oil and gas wells
- - - 200,000 - -
Advances to Crown corporations (Gross)
- 17,211,726 17,211,726 - 13,802,601 13,802,601
Advances pursuant to section 13(1) of the Financial Consumer Agency of Canada Act (Gross)
- 6,000 6,000 - - -
Payments under Bretton Woods and Related Agreements Act- International Organizations (Gross)
- - - - 798,469 798,469
Purchase shares of the Canada Enterprise Emergency Funding Corporation pursuant to paragraph 60.2(2)(a)(i) of the Financial Administration Act
- 1,900,000 1,900,000 - - -
Payment to the International Finance Corporation for purchase of shares
(Bretton Woods and Related Agreements Act, Subsection 8(2))
224,400 - - - - -
Total non-budgetary authorities 273,400 19,117,726 19,117,726 250,200 14,601,070 14,601,070
Total authorities 109,388,601 44,967,393 44,967,393 101,297,479 40,919,504 40,919,504
* Includes only Authorities available for use and granted by Parliament at quarter-end
Department of Finance Canada
Quarterly Financial Report for the quarter ended June 30, 2021
Table 2 - Departmental budgetary expenditures by Standard Object (unaudited)

(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
June 30, 2021
Year to date
used at
quarter-end
Planned expenditures for the year
ending
March 31, 2021
Expended during the
quarter ended
June 30, 2020
Year to date
used at
quarter-end
Expenditures:
Personnel
100,931 26,290 26,290 76,074 24,378 24,378
Transportation and communications
3,339 54 54 2,756 48 48
Information
6,694 714 714 11,706 862 862
Professional and special services
13,128 2,996 2,996 8,476 2,399 2,399
Rentals
1,655 664 664 992 448 448
Repair and maintenance
562 23 23 330 - -
Utilities, materials and supplies
84,327 18,309 18,309 86,241 20,319 20,319
Acquisition of land, buildings and works
- - - - - -
Acquisition of machinery and equipment
1,085 78 78 1,210 416 416
Transfer payments
83,629,635 19,872,441 19,872,441 78,005,004 21,475,489 21,475,489
Public debt charges
21,306,000 5,803,797 5,803,797 22,836,000 4,661,658 4,661,658
Other subsidies and payments
3,967,995 124,301 124,301 18,603 132,417 132,417
Total gross budgetary expenditures 109,115,351 25,849,667 25,849,667 101,047,392 26,318,434 26,318,434
Less Revenues netted against expenditures 150 - - 113 - -
Total net budgetary expenditures 109,115,201 25,849,667 25,849,667 101,047,279 26,318,434 26,318,434
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