Department of Finance Canada Quarterly Financial Report for the quarter ended June 30, 2025 (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 2025-26 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 updates of economic and fiscal projections;
- Preparing 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 (2024-25 and 2025-26) 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 June 30, 2025 as compared to the same period last year.
| 2025-26 Authorities as at June 30, 2025 | 2024-25 Authorities as at June 30, 2024 | Variance in Authorities | Expenditures during the quarter ended June 30, 2025 | Expenditures during the quarter ended June 30, 2024 | Variance in Expenditures | |
|---|---|---|---|---|---|---|
| Budgetary Authorities | ||||||
| Vote 1 - Program Expenditures | 354,794 | 146,528 | 208,266 | 33,178 | 34,754 | (1,576) |
| Statutory Authorities | ||||||
| Major transfers to other levels of government | 96,070,411 | 92,155,664 | 3,914,747 | 24,326,173 | 23,353,092 | 973,081 |
| Interest on Unmatured Debt and Interest on Other Liabilities | 49,060,000 | 48,408,000 | 652,000 | 12,372,379 | 12,623,539 | (251,160) |
| Direct program expenses | 4,354,726 | 4,254,935 | 99,791 | 1,218,710 | 767,070 | 451,640 |
| Total Statutory Authorities | 149,485,137 | 144,818,599 | 4,666,538 | 37,917,262 | 36,743,701 | 1,173,561 |
| Total Budgetary Authorities | 149,839,931 | 144,965,127 | 4,874,804 | 37,950,440 | 36,778,455 | 1,171,985 |
| Non-Budgetary Authorities | - | 1,257,410 | (1,257,410) | 26,534,310 | 29,106,871 | (2,572,561) |
| Total Authorities | 149,839,931 | 146,222,537 | 3,617,394 | 64,484,750 | 65,885,326 | (1,400,576) |
2.1 Statement of Authorities
As per Table 1 – Statement of Authorities (unaudited), the total authorities available for use increased by $3,617 million, as compared to the same quarter in 2024-25, from $146,223 million to $149,840 million.
The following table provides a detailed explanation of the significant changes in the authorities available for use:
| (2025-26 compared to 2024-25) | Change |
|---|---|
| Budgetary Authorities | |
| Vote 1 - Program Expenditures | |
| Increase in program expenditures largely due to funding provided for the nonrecurring conditional transfer of the Hibernia Net Profits Interest and Incidental Net Profits Interest Revenues to Newfoundland and Labrador ($193.8 million), time limited funding for various programs ($13.6 million) and funding for compensation adjustments related to collective bargaining ($1.2 million). | 208,266 |
| Sub-total Vote 1 - Program Expenditures | 208,266 |
| Statutory Authorities | |
| Increase in major transfers to other levels of government largely due to payments related to legislated increases in the Canada Health Transfer ($2.6 billion), Fiscal Equalization ($916.9 million), Canada Social Transfer ($507.3 million), and Territorial Formula Financing ($329.9 million). These increases were partially offset by increased recoveries in 2025-26 related to Alternative Payments for Standing Programs ($391.8 million) and Youth Allowances Recovery ($87.9 million). | 3,914,747 |
| Increase in direct program expenses mostly due to an increase in authorities related to payments to International Bank for Reconstruction and Development - Financial Intermediary Fund for Ukraine ($200 million) and planned payments on behalf of poor countries to International Organizations ($36.7 million), offset by a decrease in authorities related to planned payments to the Canada Infrastructure Bank ($139.5 million). | 99,791 |
| Increase in interest on unmatured debt ($1.1 billion) reflecting changes in interest rates and borrowing requirements, and a decrease in interest on other liabilities ($493 million) due to updated modelling, including revised interest rate assumptions of certain other specified purpose accounts and on superannuation accounts. | 652,000 |
| Sub-total Statutory Authorities | 4,666,538 |
| Total Budgetary Authorities | 4,874,804 |
| Non-Budgetary Authorities | |
| Decrease in non-budgetary authorities due to a loan to the International Monetary Fund's Poverty Reduction and Growth Trust in 2024-25 ($1.3 billion). | (1,257,410) |
| Total Non-Budgetary Authorities | (1,257,410) |
| Total Authorities | 3,617,394 |
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 2025-26 increased by $1,172 million, as compared to the same quarter in 2024-25 largely due to the following:
- Expenditures related to Transfer payments increased by $972.9 million, primarily due to increases in major transfer payments to the provinces and territories ($1,135.1 million). This increase is partially offset by recoveries for the Youth Allowance Recovery and Alternative Payments for Standing Programs ($162 million).
- Expenditures related to Other subsidies and payments increased by $451.1 million, primarily due to losses in the revaluation of International Monetary Fund (IMF) related accounts ($353.8 million), foreign exchange on sovereign loans ($85.6 million) and foreign exchange on cash for collateral/hedging transactions ($73.7 million) over the same quarter of the previous year. These increases were partially offset by decreased payments to the Canada Infrastructure Bank compared to the same quarter of the previous year ($58.8 million).
- Expenditures related to Public debt charges decreased by $251.2 million, primarily due to a decrease in interest rates and Consumer Price Index (CPI), offset with an increase in the stock of debt of approximately $135 billion over the same quarter of the previous year.
2.3 Non-Budgetary Expenditures
Total net non-budgetary expenditures in the first quarter of 2025-26 decreased by $2.6 billion, as compared to the same quarter in 2024-25. This is largely due to a decrease in the value of loans disbursed to Crown corporations participating in the Crown Borrowing Program ($2.6 billion).
3. Risks and Uncertainties
The most significant risk in the first quarter of 2025-26 was interest rate risk on the Public debt - the risk that future cash flows of the Public debt will fluctuate due to changes in market interest rates. Although expenditures on Public debt charges were $251.2 million lower than in the same quarter last year—mainly due to a decrease in interest rates and the Consumer Price Index (CPI)—the overall Public debt increased by approximately $135 billion during that time. As a result, interest rate risk continues to be an area of focus. 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.
The Department has a risk-based system of internal controls focused on financial risks and the prudent use of public resources. Following the 2023–24 implementation of its updated Internal Control Framework, the Department has enhanced monitoring of the efficiency and effectiveness of its financial management and reporting controls. As of June 30, 2025, no control weaknesses have been identified.
The Department continued to strengthen its preparedness for risks and disruptions affecting its operations. Building on the 2024–25 review of business continuity plans, the Department finalized and implemented an updated Business Continuity Plan and Business Impact Analysis. These efforts helped ensure the Department has an effective security posture and can appropriately respond in the face of potential disruptions.
The Department regularly monitors changes in domestic and global economic and social conditions that may have an impact on its work. Recent shifts in U.S. trade policy—including new tariffs on Canadian goods and energy exports—have contributed to heightened economic uncertainty and volatility in international markets. In response, the Department has intensified its monitoring of global and domestic economic conditions and expanded its cooperation, engagement, and sharing of expertise and best practices with federal partners, provinces and territories, stakeholders, and international counterparts. These strategies enable the Department, as a knowledge-based central agency and policy leader, to mitigate adverse impacts on the government's capacity to advance Canada's domestic and international fiscal, economic, and social policy interests in a rapidly evolving global environment.
4. Significant Changes in Relation to Operations, Personnel and Programs
Greg Reade vacated the position of Associate Assistant Deputy Minister, Economic Development and Corporate Finance, and became the Associate Assistant Deputy Minister, Financial Sector Policy Branch, effective April 10, 2025.
Grahame Johnson vacated the position of Assistant Deputy Minister, Financial Sector Policy, on April 14, 2025. Julien Brazeau was appointed Assistant Deputy Minister, Financial Sector Policy, effective April 14, 2025.
Miodrag Jovanovic vacated the position of Assistant Deputy Minister, Tax Policy, and became the Special Advisor in the Deputy Minister's Office, effective June 5, 2025. Maude Lavoie was appointed Assistant Deputy Minister, Tax Policy, effective June 5, 2025, and Karen Hall joined Tax Policy as the Associate Assistant Deputy Minister, effective May 22, 2025.
Suzy McDonald vacated the position of Associate Deputy Minister on June 20, 2025.
Alison O'Leary vacated the position of Assistant Deputy Minister, Federal-Provincial Relations and Social Policy, and was appointed to the position of Associate Deputy Minister, effective June 30, 2025. Mallika Nanduri Bhatt is acting as the Assistant Deputy Minister, Federal-Provincial Relations and Social Policy.
5. Approval by Senior Officials
Approved by:
Chris Forbes, Deputy Minister
Ottawa, Canada
August 28, 2025
Christopher Veilleux CPA, CMA, PMP
Chief Financial Officer
Ottawa, Canada
August 28, 2025
| Fiscal year 2025-2026 | Fiscal year 2024-2025 | ||||||
|---|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2026* |
Used during the quarter ended June 30, 2025 |
Year to date used at quarter-end |
Total available for use for the year ending March 31, 2025* |
Used during the quarter ended June 30, 2024 |
Year to date used at quarter-end |
||
| Budgetary Authorities | |||||||
| Voted authorities | |||||||
Program expenditures |
354,794 | 33,178 | 33,178 | 146,528 | 34,754 | 34,754 | |
| Total voted authorities | 354,794 | 33,178 | 33,178 | 146,528 | 34,754 | 34,754 | |
| Statutory authorities | |||||||
| Major transfers to other levels of government | |||||||
Canada Health Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) |
54,684,720 | 13,671,180 | 13,671,180 | 52,080,686 | 13,020,172 | 13,020,172 | |
Canada Social Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) |
17,416,055 | 4,354,014 | 4,354,014 | 16,908,791 | 4,227,198 | 4,227,198 | |
| Fiscal arrangements | |||||||
Fiscal Equalization (Part I - Federal-Provincial Fiscal Arrangements Act) |
26,169,704 | 6,542,426 | 6,542,426 | 25,252,833 | 6,313,208 | 6,313,208 | |
Territorial Financing (Part I.1 - Federal-Provincial Fiscal Arrangements Act) |
5,488,889 | 2,129,689 | 2,129,689 | 5,158,965 | 2,001,678 | 2,001,678 | |
Statutory Subsidies (Constitution Acts, 1867-1982, and Other Statutory Authorities) |
44,920 | 1,237 | 1,237 | 44,586 | 1,237 | 1,237 | |
Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964) |
(1,442,406) | (726,653) | (726,653) | (1,354,548) | (677,274) | (677,274) | |
| Other major transfers | |||||||
Alternative Payments for Standing Programs (Part VI - Federal-Provincial Fiscal Arrangements Act) |
(6,524,343) | (1,645,720) | (1,645,720) | (6,132,509) | (1,533,127) | (1,533,127) | |
Payment to Newfoundland and Labrador related to the Hibernia Dividend Backed Annuity Agreement (Section 200 - Budget Implementation Act, 2021, No.1) |
232,872 | - | 196,860 | - | - | ||
| Total major transfers to other levels of government | 96,070,411 | 24,326,173 | 24,326,173 | 92,155,664 | 23,353,092 | 23,353,092 | |
| Interest on Unmatured Debt and Interest on Other Liabilities | |||||||
Interest on Unmatured Debt |
43,866,000 | 10,967,172 | 10,967,172 | 42,721,000 | 11,120,109 | 11,120,109 | |
Other Interest Costs |
5,194,000 | 1,405,207 | 1,405,207 | 5,687,000 | 1,503,430 | 1,503,430 | |
| Total Interest on Unmatured Debt and Interest on Other Liabilities | 49,060,000 | 12,372,379 | 12,372,379 | 48,408,000 | 12,623,539 | 12,623,539 | |
| Direct program expenses | |||||||
Operating expenses |
|||||||
Purchase of Domestic Coinage |
81,000 | 20,302 | 20,302 | 81,000 | 20,435 | 20,435 | |
Contributions to Employee Benefit Plans |
18,256 | 4,564 | 4,564 | 15,666 | 3,890 | 3,890 | |
Minister of Finance and National Revenue – Salary and motor car allowance (Salaries Act and Parliament of Canada Act) |
102 | 25 | 25 | 99 | 25 | 25 | |
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 |
88,222 | - | - | 51,535 | - | - | |
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 | 28 | |
Other |
|||||||
Losses on Foreign Exchange |
- | 513,100 | 513,100 | - | 152 | 152 | |
Payment of Liabilities Previously Recorded as Revenue |
- | 930 | 930 | - | 3,906 | 3,906 | |
Payments to the Canada Infrastructure Bank (Canada Infrastructure Bank Act) |
3,480,230 | 679,789 | 679,789 | 3,619,719 | 738,634 | 738,634 | |
Payments to International Bank for Reconstruction and Development - Financial Intermediary Fund for Ukraine (Bretton Woods and Related Agreements Act, subsection 8(1)) |
200,000 | - | - | - | - | - | |
| Total direct program expenses | 4,354,726 | 1,218,710 | 1,218,710 | 4,254,935 | 767,070 | 767,070 | |
| Total statutory authorities | 149,485,137 | 37,917,262 | 37,917,262 | 144,818,599 | 36,743,701 | 36,743,701 | |
| Total budgetary authorities | 149,839,931 | 37,950,440 | 37,950,440 | 144,965,127 | 36,778,455 | 36,778,455 | |
| Non-budgetary authorities | |||||||
Advances to Crown corporations (Gross) |
- | 16,817,191 | 16,817,191 | - | 19,383,192 | 19,383,192 | |
Advances pursuant to section 13(1) of the Financial Consumer Agency of Canada Act (Gross) |
- | 6,000 | 6,000 | - | 14,000 | 14,000 | |
Financial Assistance to Ukraine through the Extraordinary Revenue Acceleration (Bretton Woods and Related Agreements Act, Section 8.3) |
2,300,000 | 2,300,000 | |||||
Payment for the acquisition of shares in the Canada Growth Fund pursuant to the Fall Economic Statement Implementation Act, 2022 |
- | - | - | - | 800,000 | 800,000 | |
Loan to the International Monetary Fund's Poverty Reduction and Growth Trust (Bretton Woods and Related Agreements Act, Section 8.1(1)) |
- | 212,455 | 212,455 | 1,257,410 | 1,254,207 | 1,254,207 | |
Payment to the Bank of Canada to purchase Canada Mortgage Bonds pursuant to paragraph 46(a) of the Financial Administration Act. |
- | 7,193,664 | 7,193,664 | - | 7,651,472 | 7,651,472 | |
Advances pursuant to section 50.1(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Gross) |
- | 5,000 | 5,000 | - | 4,000 | 4,000 | |
| Total non-budgetary authorities | - | 26,534,310 | 26,534,310 | 1,257,410 | 29,106,871 | 29,106,871 | |
| Total authorities | 149,839,931 | 64,484,750 | 64,484,750 | 146,222,537 | 65,885,326 | 65,885,326 | |
|
* Includes only Authorities available for use and granted by Parliament at quarter-end |
|||||||
| Fiscal year 2025-2026 | Fiscal year 2024-2025 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2026 |
Expended during the quarter ended June 30, 2025 |
Year to date used at quarter-end |
Planned expenditures for the year ending March 31, 2025 |
Expended during the quarter ended June 30, 2024 |
Year to date used at quarter-end |
|
| Expenditures: | ||||||
| Personnel | 137,676 | 34,886 | 34,886 | 128,915 | 32,758 | 32,758 |
| Transportation and communications | 2,891 | 494 | 494 | 1,948 | 490 | 490 |
| Information | 2,538 | 381 | 381 | 3,096 | 796 | 796 |
| Professional and special services | 16,114 | 1,075 | 1,075 | 12,962 | 3,587 | 3,587 |
| Rentals | 2,285 | 585 | 585 | 1,367 | 543 | 543 |
| Repair and maintenance | 313 | - | - | 327 | - | - |
| Utilities, materials and supplies | 81,217 | 20,337 | 20,337 | 81,268 | 20,456 | 20,456 |
| Acquisition of land, buildings and works | - | - | - | - | - | - |
| Acquisition of machinery and equipment | 1,679 | 104 | 104 | 1,484 | 47 | 47 |
| Transfer payments | 97,055,062 | 24,326,198 | 24,326,198 | 92,706,115 | 23,353,295 | 23,353,295 |
| Public debt charges | 49,060,000 | 12,372,379 | 12,372,379 | 48,408,000 | 12,623,539 | 12,623,539 |
| Other subsidies and payments | 3,480,306 | 1,194,001 | 1,194,001 | 3,619,795 | 742,944 | 742,944 |
| Total gross budgetary expenditures | 149,840,081 | 37,950,440 | 37,950,440 | 144,965,277 | 36,778,455 | 36,778,455 |
| Less Revenues netted against expenditures | 150 | - | - | 150 | - | - |
| Total net budgetary expenditures | 149,839,931 | 37,950,440 | 37,950,440 | 144,965,127 | 36,778,455 | 36,778,455 |
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