Archived: Departmental Results Report 2016 to 2017, Department of Environment, chapter 6

Analysis of trends in spending and human resources

Actual expenditures

Departmental spending trend graph

The following chart depicts the departmental spending trend over a six-year period. For fiscal years 2014–15, 2015–16 and 2016–17, the amounts shown represent the actual expenditures as reported in the Public Accounts. For fiscal year 2017–18, 2018–19 and 2019–20, the planned spending represents the planned budgetary and statutory expenditures as presented in the 2017–18 Departmental Plan.

Environment and Climate Change Canada's actual spending for 2016–17 was $1,005.9 million, a year-over-year increase of $55.0 million, (5.8%) from the 2015-16 actual spending. This increase is mainly due to increased spending for temporary initiatives such as the contribution to the Canada Foundation for Sustainable Development Technology, International Climate Financing, Youth Employment Strategy, the Contaminated Sediment Remediation projects, the Revitalization of Canada’s Weather Radar Network and 2016 Federal Infrastructure Initiative.

See the 2015–16 Departmental Performance Report (DPR) for additional details on year-over-year actual spending variances between 2014–15 and 2015–16.

For 2017–18 to 2019–20, the figures represent total planned spending for the fiscal year, which reflects approved funding by Treasury Board to support the Departmental strategic outcomes.  Planned spending in Voted authorities from 2017–18 to 2019–20 is declining, mainly as a result of reduced funding profile for major initiatives and sunsetting program, including the following:

Major initiatives sunsetting in 2017–18:

• Lake Simcoe/South-Eastern Georgian Bay Clean-Up Fund;
• Great Lake Nutrient Initiative; and
• Lake Winnipeg Basin Initiative.

Major initiatives sunsetting in 2018–19:

• Horizontal Management Framework for Addressing Air Pollution;
• Horizontal Management Framework for Clean Growth and Climate Change;
• Species at Risk Act Program; and
• Federal Infrastructure Budget 2016 announcements.

Major initiatives sunsetting in 2019–20:

• National Conservation Plan; and
• Action Plan on Clean Water.

Statutory authorities from 2017–18 to 2019–20 are fairly stable from one year to the other.

The Sunset Programs – Anticipated for 2017–18 to 2019–20 mostly reflect announcements in Budget 2016 and/or Budget 2017 that are not yet reflected in voted reference levels for those years but are provided to give a more complete picture of the planned spending of the Department.

See the 2017–18 Departmental Plan (DP) for additional details on year-over-year planned spending variances between 2017–18 and 2019–20.

Budgetary performance summary for Programs and Internal Services (dollars)

The 2016–17 Total authorities available for use includes all items approved through the Estimates processes for fiscal year 2016–17. The overall variance of $156.5 million between the 2016–17 Total authorities available for use ($1,058.6 million) and the 2016–17 planned spending ($902.1 million) is mainly attributed to an increase in authorities following the Budget 2016 announcements related to the following initiatives:

• Addressing Air Pollution;
• Clean Growth and Climate Change;
• Federal Contaminated Sites Action Plan;
• Great Lakes Ecosystem;
• Revitalize Canada’s Weather Radar Network;
• Inuit Impact and Benefit Agreement; and
• Youth Employment Strategy.

The overall $52.7 million variance between the 2016–17 Total authorities available for use ($1,058.6 million) and 2016–17 Actual spending ($1,005.9 million) is explained by the following:

• Funding being moved into future years for the Action Plan on Clean Water, the Revitalization of Canada’s Weather Services, the World Class Tanker Safety System South of 60° and the Federal Infrastructure Initiative;
• Unspent funds in the Operating vote being carried forward to 2017–18 to provide the Department with additional flexibility its requires to fund pressures and address strategic investments; and
• Unspent funds in the Capital vote being carried forward to next year to continue implementing activities mainly related to the Federal Infrastructure Initiative.

The overall $54.9 million increase between the 2015–16 Actual spending of $951.0 million and the 2016–17 Actual spending of $1,005.9 million is mainly due to the following variances in funding:

• Strategic Outcome 1: The actual spending for 2016–17 is higher than the actual spending for 2015–16 mainly due to additional funding received throughout the year for the Youth Employment Strategy, the Great Lakes Ecosystem and the Contaminated Sediment Remediation Projects initiatives. These increases have been offset by the realignment of the Pacific Environment Centre lease expenditures to the Internal Services.
•  Strategic Outcome 2: The actual spending for 2016–17 is lower than the actual spending for 2015–16 mainly due to decreases in spending as a result of the completion of the Ensuring the Integrity of Government of Canada’s Weather and Environmental Monitoring and Supercomputing Infrastructure Initiative and the Pan American Games in 2015–16. These decreases have been offset by an increase due to additional funding received for the Revitalize Canada’s Weather Radar Network initiative.
• Strategic Outcome 3: The actual spending for 2016–17 is higher than the actual spending for 2015–16 mainly due to new funding received for Addressing Air Pollution, Clean Growth and Climate Change, World Class Tanker Safety System South of 60° and Federal Contaminated Sites Action Plan initiatives. The increase is also due to the payment of a contribution for the Canada Foundation for Sustainable Development Technology.
• Internal Services: The actual spending for 2016–17 is higher than the actual spending for 2015–16 mainly due to the realignment of the Pacific Environment Centre lease expenditures from Program 1.2 - Water Resources to Real Property.
  

Actual human resources

Human resources summary for Programs and Internal Services (full-time equivalents)

The variance between actual and planned full-time equivalents (FTE) is mainly due to management's efforts to stabilize and control future salary requirements through personnel departures and delays in staffing vacant positions, and resources being realigned from initial plans in order to meet program needs.

Expenditures by vote

For information on Environment and Climate Change Canada’s organizational votes and statutory expenditures, please consult the Public Accounts of Canada 2017.

Alignment of spending with the whole-of-government framework

Alignment of 2016–17 actual spending with the whole-of-government framework (dollars)

Total spending by spending area (dollars)

Financial statements and financial statements highlights

Financial statements

The financial highlights offer an overview of Environment and Climate Change Canada’s Statement of Operations and Departmental Net Financial Position.

The Unaudited Financial Statements are prepared on an accrual basis, in accordance with Government’s accounting policies, which are based on Canadian Public Sector Accounting Standards (PSAS). This differs from appropriation-based reporting, which is used to prepare the “Actual Expenditure” of the Analysis of trends in spending and human resources section of this report. As such, this section is prepared on a modified cash basis, and not an accrual basis.  Reconciliation between Parliamentary Appropriations used (modified cash basis) and the Net Cost of Operations (accrual basis) is set out in Note 2 and 3 of the Unaudited Financial Statements.

The Environment and Climate Change Canada’s financial Statements unaudited for the year ended March 31, 2017, are available on the departmental website.

Financial statements highlights

Expenses by Strategic Outcomes

Total departmental expenses by Strategic Outcomes amounted to $1,189.5 million for 2016–17 ($1,132.4 million for 2015–16).  The increase of $57.1 million or 5 percent is mostly due to increased spending for temporary initiatives such as the contribution to the Canada Foundation for Sustainable Development Technology, International Climate Financing, Youth Employment Strategy, the Contaminated Sediment Remediation projects, the Revitalization of Canada’s Weather Radar Network and 2016 Federal Infrastructure Initiative.

See Note 16 of the Departmental Financial Statements for further breakdown of expenditures – Segmented information by Standard Objects and Strategic Outcomes.

Revenues by Type

Total revenues amounted to $85.4 million for 2016–17 ($84.8 million for 2015–16). This amount excludes $11 million earned on behalf of Government. The majority of the revenue in 2016–17 is derived from Environment and Climate Change Canada’s sales of goods and information products and services of a non-regulatory nature. Major revenue items include for example: Oil Sands monitoring activities, Ocean disposal permit applications, Hydrometric services, Ocean disposal monitoring fees and Weather and environmental services.

Liabilities by type

Total liabilities were $402.1 million at the end of 2016–17. This represents an increase of $35.6 million or 10 percent from the previous year’s total liabilities of $366.5 million. The accounts payable and accrued liabilities and environmental liabilities represent the largest component of liabilities at $336.8 million (83.8 percent of total liabilities) in 2016–17.

The increase in Environment and Climate Change Canada’s total net liabilities valuation is mainly attributable to the Environmental Liabilities. The closing liability as at March 31, 2017 is an increase of $57 million compared to March 31, 2016. This is mainly due to the implementation of more rigorous decontamination regulations in British Columbia. Environment and Climate Change Canada has reviewed its remediation costs for the PEC site and has increased its estimate by $70 million.

See Notes 4 to 8 and Notes 12 and 13 of the Departmental Financial Statements for more details – Accounts payable and accrued liabilities; Deferred revenue; Lease obligation for tangible capital assets; Employee future benefits; Environmental liabilities; Contractual obligations; Contingent liabilities.

Assets by Type

Total net financial assets ($158.5 million) and non-financial assets ($412.8 million), together valued at $571.3 million, have increased by $30.7 million or 5.7 percent in 2016–17.  The tangible capital assets continue to represent the largest component of assets at $382.9 million (67 percent of total assets) in 2016–17.

The increase in Environment and Climate Change Canada’s total net assets valuation is mainly attributable to inventory that has increased by $13.5 million mostly due to more purchases made for Meteorological supplies (5.4 million), radar equipment (4.2 million) and computer equipment (2.6 million).

See Notes 9 to 11 of the Departmental Financial Statements for more details – Accounts receivable and advances; Inventory; Tangible Capital Assets.