Department of Finance Canada Quarterly Financial Report for the quarter ended September 30, 2024 (unaudited)
Table of contents
- 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 Results
- 2.1 Statement of Authorities
- 2.2 Statement of Departmental Budgetary Expenditures by Standard Object
- 2.3 Non-Budgetary Expenditures
- 3. Risks and Uncertainties
- 4. Significant Changes in Relation to Operations, Personnel and Programs
- 5. Approval by Senior Officials
- 6. Appendix
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 2024-25 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 (the government) 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 Statement;
- Preparing the Annual Financial Report of the Government of Canada and, in cooperation with the Treasury Board of Canada Secretariat and the Receiver General for Canada, the Public Accounts of 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 (2023-24 and 2024-25) 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 on 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 September 30, 2024 as compared to the same period last year.
| 2024-25 Authorities as at September 30, 2024 | 2023-24 Authorities as at September 30, 2023 | Variance in Authorities | Expenditures during the quarter ended September 30, 2024 | Expenditures during the quarter ended September 30, 2023 | Variance in Expenditures | |
|---|---|---|---|---|---|---|
| Budgetary Authorities | ||||||
| Vote 1 - Program Expenditures | 152,959 | 414,229 | (261,270) | 36,720 | 35,060 | 1,660 |
| Statutory Authorities | ||||||
| Major transfers to other levels of government | 92,155,664 | 87,525,906 | 4,629,758 | 23,101,103 | 21,991,894 | 1,109,209 |
| Interest on Unmatured Debt and Interest on Other Liabilities | 48,408,000 | 38,550,000 | 9,858,000 | 12,744,846 | 10,710,380 | 2,034,466 |
| Direct program expenses | 4,254,935 | 3,559,095 | 695,840 | 482,794 | 244,283 | 238,511 |
| Total Statutory Authorities | 144,818,599 | 129,635,001 | 15,183,598 | 36,328,743 | 32,946,557 | 3,382,186 |
| Total Budgetary Authorities | 144,971,558 | 130,049,230 | 14,922,328 | 36,365,463 | 32,981,617 | 3,383,846 |
| Non-Budgetary Authorities | 1,257,410 | - | 1,257,410 | 24,101,663 | 18,492,326 | 5,609,337 |
| Total Authorities | 146,228,968 | 130,049,230 | 16,179,738 | 60,467,126 | 51,473,943 | 8,993,183 |
2.1 Statement of Authorities
As per Table 1 – Statement of Authorities (unaudited), the total authorities available for use increased by $16,180 million, as compared to the same quarter in 2023-24, from $130,049 million to $146,229 million.
The following table provides a detailed explanation of the significant changes in the authorities available for use:
| 2024-25 compared to 2023-24 | Change |
|---|---|
| Budgetary Authorities | |
| Vote 1 - Program Expenditures | |
| Decrease in program expenditures largely due to funding provided in the previous year for the nonrecurring conditional transfer of the Hibernia Net Profits Interest and Incidental Net Profits Interest Revenues to Newfoundland and Labrador ($280.2 million), sunsetting of time limited funding for various programs ($6.5 million) and reductions for the Refocusing Government Spending Initiative ($1.1 million). These decreases were partially offset by increases in funding to the Indigenous Participant Funding Program ($12 million), funding for various collective agreements ($10 million), funding to support the Financial Sector Legislative Review ($2.8 million) and funding to advance the development of a sustainable finance taxonomy that is aligned with reaching net-zero by 2050 ($1.3 million). | (261,270) |
| Sub-total Vote 1 - Program Expenditures | (261,270) |
| Statutory Authorities | |
| Increase in major transfers to other levels of government largely due to payments related to legislated increases in the Canada Health Transfer ($2.7 billion), Fiscal Equalization ($1.3 billion), Canada Social Transfer ($492.5 million), and Territorial Formula Financing ($324.5 million). These increases were partially offset by increased recoveries in 2024-25 related to Alternative Payments for Standing Programs ($275 million). | 4,629,758 |
| Increase in direct program expenses mostly due to an increase in authorities related to planned payments to the Canada Infrastructure Bank ($698.4 million), offset by a decrease in the purchase of domestic coinage ($2 million). | 695,840 |
| Increase in interest on unmatured debt ($9 billion) reflecting changes in interest rates and borrowing requirements, and increase in interest on other liabilities ($813 million) due to updated modelling, including revised interest rate assumptions of certain other specified purpose accounts and on superannuation accounts. | 9,858,000 |
| Sub-total Statutory Authorities | 15,183,598 |
| Total Budgetary Authorities | 14,922,328 |
| Non-Budgetary Authorities | |
| Increase in non-budgetary authorities due to a loan to the International Monetary Fund's Poverty Reduction and Growth Trust ($1.3 billion). | 1,257,410 |
| Total Non-Budgetary Authorities | 1,257,410 |
| Total Authorities | 16,179,738 |
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 second quarter of 2024-25 increased by $3,383.8 million, as compared to the same quarter in 2023-24 largely due to the following:
- Expenditures related to Public debt charges increased by $2,034.5 million, primarily due to an increase in interest rates and an increase in the stock of debt of approximately $98 billion over the same quarter of the previous year.
- Expenditures related to Transfer payments increased by $1,109.4 million, primarily due to increases in major transfer payments to the provinces and territories ($1,178 million). This increase is partially offset by recoveries for the Alternative Payments for Standing Programs ($68.7 million).
- Expenditures related to Other subsidies and payments increased by $238.7 million, primarily due to the revaluation of International Monetary Fund related accounts ($170.8 million) and foreign exchange on sovereign loans ($33.9 million). Additionally, payments to the Canada Infrastructure Bank increased ($32.8 million) due to heightened demands compared to the previous year.
2.3 Non-Budgetary Expenditures
Total net non-budgetary expenditures in the second quarter of 2024-25 increased by $5,609.3 million, as compared to the same quarter in 2023-24. This is primarily due to payments made to the Bank of Canada for the purchase of Canada Mortgage Bonds ($6,986.4 million), along with payments to the International Monetary Fund's (IMF) Resilience and Sustainability Trust ($95.6 million). These increases were partially offset by a decrease in the value of loans disbursed to Crown corporations participating in the Crown Borrowing Program ($1,191.1 million) and a decrease in loans to the IMF's Poverty Reduction and Growth Trust ($281.6 million).
3. Risks and Uncertainties
The most significant risk in the second quarter of 2024-25 remains interest rate risk on the Public debt (the risk that future cash flows of the Public debt will fluctuate because of changes in market interest rates). Expenditures related to Public debt charges increased by $2,034.5 million over the same quarter last year. To help mitigate interest rate risk, the Department's Debt Management Strategy, developed in consultation with market participants, sets out a prudent approach to Public debt management that ensures a balanced debt structure. Interest rate risk and other financial risks are discussed further in the notes to the Department of Finance Canada's Annual Financial Statements.
In May 2024, the Deputy Minister approved the Departmental Security Plan (DSP), which establishes a three-year framework to guide departmental security practices and ensure alignment with organizational priorities. The DSP uses a structured approach to support the effective management of departmental security by defining clear responsibilities, setting measurable goals, and fostering accountability across all branches of the Department. The Department has also undertaken to renew its Business Continuity Plan and Business Impact Analysis to ensure resilience and continuity in the face of potential disruptions.
The Department remains vigilant in preparing for risks, situations, and events impacting its operating environment. We maintain effective security and business continuity plans and monitor changes to domestic and global economic and social conditions. At the same time, we proactively manage related risks through ongoing cooperation, engagement, and sharing of expertise and best practices with other federal departments and agencies, provincial and territorial governments, as well as stakeholders and international counterparts. These strategies enable the Department, as a central agency, a policy department, and a knowledge-based organization, to mitigate adverse impacts on the government's capacity to advance Canada's domestic and international fiscal, economic, and social policy interests.
4. Significant Changes in Relation to Operations, Personnel and Programs
The Economic Development Branch and the Crown Investment and Asset Management Branch merged to form the Economic Development and Corporate Finance Branch, with Sam Millar appointed as the Assistant Deputy Minister.
The Fiscal Policy Branch and Economic Policy Branch merged to create the Economic and Fiscal Policy Branch, with Evelyn Dancey as the Assistant Deputy Minister
These mergers took effect July 2, 2024.
Joe Wild, Senior Advisor to the Deputy Minister in the Office of the Special Representative for the Deputy Minister, retired on August 9, 2024. The functions of and staff reporting to the Special Representative were adopted by the Economic Development and Corporate Finance Branch effective August 12, 2024.
Alison McDermott vacated the position of Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch effective July 17, 2024. Alison O'Leary was appointed to the position effective August 29, 2024.
5. Approval by Senior Officials
Approved by:
Chris Forbes, Deputy Minister
Ottawa, Canada
November 25, 2024
Christopher Veilleux CPA, CMA, PMP
Chief Financial Officer
Ottawa, Canada
November 25, 2024
| Fiscal year 2024-2025 | Fiscal year 2023-2024 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2025* |
Used during the quarter ended September 30, 2024 |
Year to date used at quarter-end |
Total available for use for the year ending March 31, 2024* |
Used during the quarter ended September 30, 2023 |
Year to date used at quarter-end |
|
| Budgetary Authorities | ||||||
| Voted authorities | ||||||
Program expenditures |
152,959 | 36,720 | 71,474 | 414,229 | 35,060 | 65,792 |
| Total voted authorities | 152,959 | 36,720 | 71,474 | 414,229 | 35,060 | 65,792 |
| Statutory authorities | ||||||
| Major transfers to other levels of government | ||||||
Canada Health Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) |
52,080,686 | 13,020,171 | 26,040,343 | 49,420,572 | 12,355,143 | 24,710,286 |
Canada Social Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) |
16,908,791 | 4,227,197 | 8,454,395 | 16,416,302 | 4,104,075 | 8,208,151 |
Payments related to Canada Health Transfer (Sections 24.73 and 24.74 - Federal-Provincial Fiscal Arrangements Act) |
- | - | - | - | - | 2,000,000 |
Fiscal arrangements |
||||||
Fiscal Equalization (Part I - Federal-Provincial Fiscal Arrangements Act) |
25,252,833 | 6,313,209 | 12,626,417 | 23,963,000 | 5,990,750 | 11,981,500 |
Territorial Financing (Part I.1 - Federal-Provincial Fiscal Arrangements Act) |
5,158,965 | 1,052,429 | 3,054,107 | 4,834,418 | 986,221 | 2,861,975 |
Statutory Subsidies (Constitution Acts, 1867-1982, and Other Statutory Authorities) |
44,586 | 21,225 | 22,462 | 42,639 | 20,083 | 21,320 |
Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964) |
(1,354,548) | - | (677,274) | (1,293,513) | - | (646,757) |
Other major transfers |
||||||
Fiscal Stabilization (Part II - Federal-Provincial Fiscal Arrangements Act) |
- | - | - | - | - | 576,511 |
Alternative Payments for Standing Programs (Part VI - Federal-Provincial Fiscal Arrangements Act) |
(6,132,509) | (1,533,128) | (3,066,255) | (5,857,512) | (1,464,378) | (2,928,756) |
Payment to Newfoundland and Labrador related to the Hibernia Dividend Backed Annuity Agreement (Section 200 - Budget Implementation Act, 2021, No.1) |
196,860 | - | - | - | - | - |
| Total major transfers to other levels of government | 92,155,664 | 23,101,103 | 46,454,195 | 87,525,906 | 21,991,894 | 46,784,230 |
| Interest on Unmatured Debt and Interest on Other Liabilities | ||||||
Interest on Unmatured Debt |
42,721,000 | 11,253,237 | 22,373,346 | 33,676,000 | 9,171,539 | 17,471,728 |
Other Interest Costs |
5,687,000 | 1,491,609 | 2,995,039 | 4,874,000 | 1,538,841 | 3,038,888 |
| Total Interest on Unmatured Debt and Interest on Other Liabilities | 48,408,000 | 12,744,846 | 25,368,385 | 38,550,000 | 10,710,380 | 20,510,616 |
| Direct program expenses | ||||||
Operating expenses |
||||||
Purchase of Domestic Coinage |
81,000 | 20,973 | 41,408 | 83,000 | 20,966 | 39,598 |
Contributions to Employee Benefit Plans |
15,666 | 3,891 | 7,781 | 15,947 | 3,987 | 7,974 |
Deputy Prime Minister and Minister of Finance – Salary and motor car allowance (Salaries Act and Parliament of Canada Act) |
99 | 24 | 49 | 95 | 23 | 47 |
Minister of Tourism and Associate Minister of Finance – Motor car allowance |
- | - | - | 2 | - | - |
Transfer payments |
||||||
Payments to the International Development Association (Bretton Woods and Related Agreements Act) |
486,916 | - | - | 486,916 | - | - |
Debt payments on behalf of poor countries to International Organizations pursuant to section 18(1) of the Economic Recovery Act |
51,535 | - | - | 51,823 | - | - |
Payments of any amount that is required for the purpose of providing financial assistance, pursuant to section 8.3 of the Bretton Woods and Related Agreements Act |
- | - | 28 | - | - | - |
Grant Contribution to the IMF's Resilience and Sustainability Trust (Bretton Woods and Related Agreements Act, Section 8.1(2)) |
- | - | - | - | - | 57,000 |
Other |
||||||
Losses on Foreign Exchange |
- | 150,446 | 150,598 | - | (54,285) | 61,279 |
Payment of Liabilities Previously Recorded as Revenue |
- | 8,931 | 12,837 | - | 7,833 | 8,059 |
Payments to the Canada Infrastructure Bank (Canada Infrastructure Bank Act) |
3,619,719 | 298,529 | 1,037,163 | 2,921,312 | 265,759 | 559,710 |
| Total direct program expenses | 4,254,935 | 482,794 | 1,249,864 | 3,559,095 | 244,283 | 733,667 |
| Total statutory authorities | 144,818,599 | 36,328,743 | 73,072,444 | 129,635,001 | 32,946,557 | 68,028,513 |
| Total budgetary authorities | 144,971,558 | 36,365,463 | 73,143,918 | 130,049,230 | 32,981,617 | 68,094,305 |
| Non-budgetary authorities | ||||||
Advances to Crown corporations (Gross) |
- | 17,045,017 | 36,428,209 | - | 18,236,082 | 33,853,605 |
Advances pursuant to section 13(1) of the Financial Consumer Agency of Canada Act (Gross) |
- | 8,000 | 22,000 | - | 8,000 | 20,000 |
Payments under Bretton Woods and Related Agreements Act- International Organizations (Gross) |
- | 62,236 | 62,236 | - | 248,244 | 281,641 |
Payment for the acquisition of shares in the Canada Growth Fund pursuant to the Fall Economic Statement Implementation Act, 2022 |
- | - | 800,000 | - | - | - |
Loan to the International Monetary Fund's Poverty Reduction and Growth Trust (Bretton Woods and Related Agreements Act, Section 8.1(1)) |
1,257,410 | - | 1,254,207 | - | - | - |
Payment to the Bank of Canada to purchase Canada Mortgage Bonds pursuant to paragraph 46(a) of the Financial Administration Act. |
- | 6,986,410 | 14,637,882 | - | - | - |
Advances pursuant to section 50.1(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Gross) |
- | - | 4,000 | - | - | - |
| Total non-budgetary authorities | 1,257,410 | 24,101,663 | 53,208,534 | - | 18,492,326 | 34,155,246 |
| Total authorities | 146,228,968 | 60,467,126 | 126,352,452 | 130,049,230 | 51,473,943 | 102,249,551 |
|
* Includes only Authorities available for use and granted by Parliament at quarter-end |
||||||
| Fiscal year 2024-2025 | Fiscal year 2023-2024 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2025 |
Expended during the quarter ended September 30, 2024 |
Year to date used at quarter-end |
Planned expenditures for the year ending March 31, 2024 |
Expended during the quarter ended September 30, 2023 |
Year to date used at quarter-end |
|
| Expenditures: | ||||||
| Personnel | 128,915 | 37,228 | 69,986 | 121,000 | 35,490 | 64,366 |
| Transportation and communications | 2,045 | 434 | 924 | 2,959 | 707 | 1,297 |
| Information | 3,901 | 320 | 1,116 | 2,230 | 708 | 1,010 |
| Professional and special services | 16,757 | 1,461 | 5,048 | 19,131 | 1,575 | 5,255 |
| Rentals | 2,044 | 580 | 1,123 | 1,797 | 458 | 1,185 |
| Repair and maintenance | 837 | 5 | 5 | 580 | 7 | 9 |
| Utilities, materials and supplies | 81,397 | 21,000 | 41,456 | 83,536 | 21,041 | 39,717 |
| Acquisition of land, buildings and works | - | - | - | - | - | - |
| Acquisition of machinery and equipment | 1,902 | 410 | 457 | 1,929 | 202 | 303 |
| Transfer payments | 92,706,115 | 23,101,278 | 46,454,573 | 88,344,846 | 21,991,894 | 46,841,380 |
| Public debt charges | 48,408,000 | 12,744,846 | 25,368,385 | 38,550,000 | 10,710,380 | 20,510,616 |
| Other subsidies and payments | 3,619,795 | 457,901 | 1,200,845 | 2,921,372 | 219,155 | 629,167 |
| Total gross budgetary expenditures | 144,971,708 | 36,365,463 | 73,143,918 | 130,049,380 | 32,981,617 | 68,094,305 |
| Less Revenues netted against expenditures | 150 | - | - | 150 | - | - |
| Total net budgetary expenditures | 144,971,558 | 36,365,463 | 73,143,918 | 130,049,230 | 32,981,617 | 68,094,305 |
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