Archived - Department of Finance Canada Quarterly Financial Report for the quarter ended December 31, 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 fall economic and fiscal update;
- 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 December 31, 2021 as compared to the same period last year.
| 2021-22 Authorities as at December 31, 2021 | 2020-21 Authorities as at December 31, 2020 | Variance in Authorities | Expenditures during the quarter ended December 31, 2021 | Expenditures during the quarter ended December 31, 2020 | Variance in Expenditures | |
|---|---|---|---|---|---|---|
| Budgetary Authorities | ||||||
| Vote 1 - Program Expenditures | 135,686 | 3,426,811 | (3,291,125) | 29,500 | 1,101,858 | (1,072,358) |
| Statutory Authorities | ||||||
| Major transfers to other levels of government | 83,283,291 | 93,232,690 | (9,949,399) | 19,469,354 | 19,137,785 | 331,569 |
| Interest on Unmatured Debt and Interest on Other Liabilities | 21,306,000 | 20,499,000 | 807,000 | 5,704,766 | 5,007,211 | 697,555 |
| Direct program expenses | 4,554,478 | 568,303 | 3,986,175 | 110,448 | 274,554 | (164,106) |
| Total Statutory Authorities | 109,143,769 | 114,299,993 | (5,156,224) | 25,284,568 | 24,419,550 | 865,018 |
| Total Budgetary Authorities | 109,279,455 | 117,726,804 | (8,447,349) | 25,314,068 | 25,521,408 | (207,340) |
| Non-Budgetary Authorities | 2,985,109 | 250,200 | 2,734,909 | 13,388,563 | 11,315,348 | 2,073,215 |
| Total Authorities | 112,264,564 | 117,977,004 | (5,712,440) | 38,702,631 | 36,836,756 | 1,865,875 |
2.1 Statement of Authorities
As per Table 1 – Statement of Authorities (unaudited), the total authorities available for use decreased by $5,712.4 million, as compared to the same quarter in 2020–21, from $117,977.0 million to $112,264.6 million.
The following table provides a detailed explanation of the significant changes in the authorities available for use:
| Budgetary Authorities | Change (thousands of dollars) |
|---|---|
| Vote 1 - Program Expenditures | |
Parliamentary approval was obtained in 2020-21 for measures authorized pursuant to the COVID-19 Emergency Response Act, but not disbursed before the legislative repeal date of September 30, 2020, to ensure funds remained available for additional planned transfers to provinces and territories, such as:
|
(3,161,000) |
| Funding in 2020-21 for the Hibernia Dividend Backed Annuity Agreement Payment. | (109,888) |
| Funding in 2020-21 for a one-time ex gratia payment to Saskatchewan related to the Fiscal Stabilization program. | (18,584) |
| Funding of $12 million in 2020-21 versus funding of $9.65 million in 2021-22 for Government Advertising Programs. | (2,350) |
| Funding in 2021-22 for other various programs. | 697 |
| Sub-total Vote 1 - Program Expenditures | (3,291,125) |
| Statutory Authorities | |
| Decrease in major transfers to other levels of government largely due to payments in 2020-21 for the COVID-19 Safe Restart Agreement, Essential Workers Support Fund, and Safe Return to Class Fund, offset by payments in 2021-22 to the provinces and territories in respect of Canada's COVID-19 Immunization Plan, and payments related to the Canada Health Transfer. | (9,949,399) |
| Increase in direct program expenses mostly due to an increase in authorities related to planned payments to the Canada Infrastructure Bank. | 3,986,175 |
| Increase in interest on unmatured debt offset by a decrease in interest on other liabilities primarily due to higher interest rate expectations of Government of Canada bonds anticipated by private sector economists. | 807,000 |
| Sub-total Statutory Authorities | (5,156,224) |
| Total Budgetary Authorities | (8,447,349) |
| Non-Budgetary Authorities | |
| Increase in non-budgetary authorities mostly due to an increase in authorities for financial assistance to the International Development Association and for the purchase of shares in the Canada Enterprise Emergency Funding Corporation to support the Large Employer Emergency Financing Facility, which provides bridge financing to large Canadian employers affected by the pandemic. | 2,734,909 |
| Total Non-Budgetary Authorities | 2,734,909 |
| Total Authorities | (5,712,440) |
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 third quarter of 2021–22 decreased by $207.3 million, as compared to the same quarter in 2020–21 largely due to the following:
- Expenditures related to Transfer payments decreased by $736.7 million over this period, mainly due to a one-time, voted payment of $1.0 billion in 2020-21 to Alberta to clean up inactive oil and gas wells, offset by increases in statutory transfers to the provinces and territories in 2021-22;
- Expenditures related to Other subsidies and payments decreased by $167.2 million over this period, mostly due to a decrease in the revaluation of International Monetary Fund related accounts, offset by an increase in payments to the Canada Infrastructure Bank; and
- Expenditures related to Public debt charges increased by $697.6 million, primarily due to Consumer Price Index adjustments on Real Return Bonds.
2.3 Non-Budgetary Expenditures
Total net non-budgetary expenditures in the third quarter of 2021–22 increased by $2,073.2 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.
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 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
Darlene Bess vacated the position of Chief Financial Officer, effective October 5, 2021. Christopher Veilleux was appointed to the position, effective December 16, 2021.
Sarah Lawley vacated the position of Assistant Deputy Minister, Consultations and Communications branch, effective November 1, 2021. Alison German was appointed to the position, effective November 8, 2021.
5. Approval by Senior Officials
Approved by:
Michael Sabia, Deputy Minister
Ottawa, Canada
February 28, 2022
Christopher Veilleux CPA, CMA, PMP
Chief Financial Officer
Ottawa, Canada
February 28, 2022
| Fiscal year 2021-2022 | Fiscal year 2020-2021 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2022* |
Used during the quarter ended December 31, 2021 |
Year to date used at quarter-end |
Total available for use for the year ending March 31, 2021* |
Used during the quarter ended December 31, 2020 |
Year to date used at quarter-end |
|
| Budgetary Authorities | ||||||
| Voted authorities | ||||||
Program expenditures |
135,686 | 29,500 | 85,836 | 3,426,811 | 1,101,858 | 1,171,446 |
| Total voted authorities | 135,686 | 29,500 | 85,836 | 3,426,811 | 1,101,858 | 1,171,446 |
| 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 | 32,344,338 | 41,869,693 | 10,467,423 | 31,402,270 |
Canada Social Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) |
15,473,939 | 3,868,484 | 11,605,454 | 15,023,242 | 3,755,810 | 11,267,431 |
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 | - | 1,000,000 | - | - | - |
Payments related to Canada Health Transfer (Section 24.72 - Federal-Provincial Fiscal Arrangements Act) |
4,000,000 | - | 4,000,000 | - | - | - |
Fiscal arrangements |
||||||
Fiscal Equalization (Part I - Federal-Provincial Fiscal Arrangements Act) |
20,910,789 | 5,227,697 | 15,683,092 | 20,572,844 | 5,143,211 | 15,429,633 |
Territorial Financing (Part I.1 - Federal-Provincial Fiscal Arrangements Act) |
4,379,879 | 893,495 | 3,486,383 | 4,180,225 | 852,766 | 3,327,459 |
Statutory Subsidies (Constitution Acts, 1867-1982, and Other Statutory Authorities) |
42,639 | 1,238 | 22,557 | 42,644 | 1,237 | 22,559 |
Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964) |
(1,043,982) | - | (521,991) | (853,724) | - | (516,669) |
Other major transfers |
||||||
Additional Fiscal Equalization Offset Payment to Nova Scotia (Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act) |
130,063 | - | 85,626 | - | - | - |
Alternative Payments for Standing Programs (Part VI - Federal-Provincial Fiscal Arrangements Act) |
(4,735,820) | (1,389,006) | (3,756,916) | (3,937,960) | (1,082,662) | (3,407,456) |
Hibernia Dividend Backed Annuity Agreement (Budget Implementation Act, 2021, No. 1, Part 4, division 14) |
- | 86,000 | 86,000 | - | - | - |
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 | - | 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 | - | 120,000 |
Payment to the Government of Newfoundland and Labrador to support offshore energy sector workers |
- | - | - | - | - | 320,000 |
Payments to the COVID-19 Essential Workers Support Fund (paragraph 60.2(2)b of the Financial Administration Act) |
- | - | - | 2,539,000 | - | 2,539,000 |
Payments to the Safe Restart Agreement pursuant to paragraph 60.2(2)b of the Financial Administration Act |
- | - | - | 12,276,726 | - | 12,276,726 |
Payments to the Safe Return to Class Fund pursuant to paragraph 60.2(2)b of the Financial Administration Act |
- | - | - | 1,000,000 | - | 1,000,000 |
| Total major transfers to other levels of government | 83,283,291 | 19,469,354 | 64,034,543 | 93,232,690 | 19,137,785 | 74,180,953 |
| Interest on Unmatured Debt and Interest on Other Liabilities | ||||||
Interest on Unmatured Debt and Other Public Debt Costs |
16,173,000 | 4,428,934 | 13,506,358 | 15,013,000 | 3,681,956 | 11,325,866 |
Interest on Other Liabilities |
5,133,000 | 1,275,832 | 3,853,228 | 5,486,000 | 1,325,255 | 4,047,955 |
| Total Interest on Unmatured Debt and Interest on Other Liabilities | 21,306,000 | 5,704,766 | 17,359,586 | 20,499,000 | 5,007,211 | 15,373,821 |
| Direct program expenses | ||||||
Operating expenses |
||||||
Purchase of Domestic Coinage |
84,000 | 26,216 | 65,460 | 84,000 | 23,357 | 66,273 |
Contributions to Employee Benefit Plans |
13,037 | 3,236 | 9,707 | 13,077 | 3,131 | 9,392 |
Deputy Prime Minister and Minister of Finance – Salary and motor car allowance |
91 | 23 | 68 | 89 | (3) | 34 |
Minister of Middle Class Prosperity and Associate Minister of Finance – Motor car allowance |
2 | - | 1 | 2 | - | 1 |
Payments for government advertising programs pursuant to the Public Health Events of National Concern Payments Act |
- | - | - | 10,000 | - | 10,000 |
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 |
Other |
||||||
Losses on Foreign Exchange |
- | 17,114 | 18,953 | - | 228,247 | 519,577 |
Payment of Liabilities Previously Recorded as Revenue |
- | 1,875 | 6,302 | - | 822 | 12,173 |
Payment to the Canada Infrastructure Bank (Canada Infrastructure Bank Act) |
3,967,976 | 61,984 | 176,411 | - | 15,000 | 32,185 |
Payment under subsection 12(2) of the Canadian Commercial Corporation Act to the Canadian Commercial Corporation |
13,000 | - | 13,000 | - | 4,000 | 4,000 |
| Total direct program expenses | 4,554,478 | 110,448 | 289,902 | 568,303 | 274,554 | 693,966 |
| Total statutory authorities | 109,143,769 | 25,284,568 | 81,684,031 | 114,299,993 | 24,419,550 | 90,248,740 |
| Total budgetary authorities | 109,279,455 | 25,314,068 | 81,769,867 | 117,726,804 | 25,521,408 | 91,420,186 |
| 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 | - | 200,000 |
Advances to Crown corporations (Gross) |
- | 13,382,563 | 43,277,826 | - | 11,207,348 | 33,681,523 |
Advances pursuant to section 13(1) of the Financial Consumer Agency of Canada Act (Gross) |
- | 6,000 | 18,000 | - | 8,000 | 11,000 |
Payments under Bretton Woods and Related Agreements Act- International Organizations (Gross) |
- | - | - | - | - | 798,469 |
Payment to the Canada Enterprise Emergency Funding Corporation to purchase shares pursuant to paragraph 60.2(2)(a) of the Financial Administration Act to support the Large Employer Emergency Financing Facility |
2,350,000 | - | 2,670,000 | - | 100,000 | 200,000 |
Payment to the International Finance Corporation for purchase of shares (Bretton Woods and Related Agreements Act, Subsection 8(2)) |
224,400 | - | - | - | - | - |
Financial assistance to the International Development Association (Bretton Woods and Related Agreements Act, Section 8) |
361,709 | - | - | - | - | - |
| Total non-budgetary authorities | 2,985,109 | 13,388,563 | 45,965,826 | 250,200 | 11,315,348 | 34,890,992 |
| Total authorities | 112,264,564 | 38,702,631 | 127,735,693 | 117,977,004 | 36,836,756 | 126,311,178 |
| * 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 December 31, 2021 |
Year to date used at quarter-end |
Planned expenditures for the year ending March 31, 2021 |
Expended during the quarter ended December 31, 2020 |
Year to date used at quarter-end |
|
| Expenditures: | ||||||
Personnel |
103,940 | 26,806 | 81,265 | 102,498 | 27,790 | 78,228 |
Transportation and communications |
2,690 | 289 | 509 | 3,774 | 104 | 238 |
Information |
11,344 | 2,107 | 3,972 | 23,775 | 3,825 | 14,466 |
Professional and special services |
15,510 | 2,193 | 6,632 | 14,820 | 3,796 | 8,056 |
Rentals |
3,081 | 521 | 1,358 | 1,926 | 203 | 756 |
Repair and maintenance |
562 | 12 | 85 | 440 | 19 | 45 |
Utilities, materials and supplies |
84,327 | 26,252 | 65,556 | 84,321 | 23,389 | 66,361 |
Acquisition of land, buildings and works |
- | - | 49 | - | 47 | 47 |
Acquisition of machinery and equipment |
1,864 | 158 | 471 | 3,042 | 88 | 670 |
Transfer payments |
83,769,292 | 19,470,154 | 64,035,626 | 96,974,748 | 20,206,891 | 75,290,390 |
Public debt charges |
21,306,000 | 5,704,766 | 17,359,586 | 20,499,000 | 5,007,211 | 15,373,821 |
Other subsidies and payments |
3,980,995 | 80,810 | 214,758 | 18,610 | 248,045 | 587,108 |
| Total gross budgetary expenditures | 109,279,605 | 25,314,068 | 81,769,867 | 117,726,954 | 25,521,408 | 91,420,186 |
| Less Revenues netted against expenditures | 150 | - | - | 150 | - | - |
| Total net budgetary expenditures | 109,279,455 | 25,314,068 | 81,769,867 | 117,726,804 | 25,521,408 | 91,420,186 |
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