Archived - Department of Finance Canada Quarterly Financial Report for the quarter ended June 30, 2021 (unaudited)
Table of contents
2. Highlights of Fiscal Quarter Results
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:
- Preparing the federal budget and the Update of Economic and Fiscal Projections;
- Preparing the Annual Financial Report of the Government of Canada and the Public Accounts of Canada, in cooperation with the Treasury Board of Canada Secretariat and the Receiver General for Canada;
- Developing tax and tariff policy and legislation;
- Managing federal borrowing on financial markets;
- Designing and administering major transfers of federal funds to the provinces and territories;
- Developing financial sector policy and legislation; and
- Representing Canada in various international financial institutions and groups.
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:
- Voted budgetary authorities: Included in this category are the operational expenditures of the Department itself as well as authorized expenditures under grant and contribution programs. These expenditures must be specifically approved by Parliament through an appropriation act.
- Statutory budgetary authorities: Included in this category are expenditure authorities that are granted through an existing Act of Parliament. Further parliamentary approval is not required for expenditures related to statutory amounts and it is within the normal course of business that statutory expenditures may, in some cases, exceed planned spending estimates.
- Non-budgetary authorities: Included in this category are disbursements made by the Department that do not have a direct budgetary impact to the Government. This includes the value of loans initially disbursed to Crown corporations participating in the Crown Borrowing Program.
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.
| 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:
| 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:
- Expenditures related to Transfer payments decreased by $1,603.0 million over this period, mainly due to a one-time payment in the previous year to the provinces and territories to support wage increases for low-income essential workers;
- Expenditures related to Public debt charges, which increased by $1,142.1 million primarily due to the Consumer Price Index adjustments on Real Return Bonds and an increase in the average Government of Canada short and long-term bond rates;
- Expenditures related to Other subsidies and payments, which decreased by $8.1 million mostly due to a decrease in the revaluation of International Monetary Fund related accounts, offset by payments to the Canada Infrastructure Bank;
- Expenditures related to Utilities, materials and supplies, which decreased by $2.0 million primarily due to a decrease in the purchase of domestic coinage as a result of decreased demand in the current quarter, as compared to the same quarter in 2020–21; and
- Expenditures related to Personnel, which increased by $1.9 million due to an increase in permanent salaries based on renewed collective agreements and a slight increase in full-time equivalents.
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
| 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 | ||||||
| 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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