Quarterly Financial Report, quarter ended December 31, 2018: Environment and Climate Change Canada
Statement outlining results, risks and significant changes in operations, personnel and programs.
Introduction
This third quarterly 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 Treasury Board (TB). This quarterly report should be read in conjunction with the Main Estimates, Budget 2018 and Supplementary Estimates A.
This quarterly report has not been subject to an external audit or review.
Authority, Mandate and Program Activities
Environment and Climate Change Canada (ECCC) is the lead federal department for a wide range of environmental issues. The Department addresses these issues through various actions including the implementation of the Pan-Canadian Framework on Clean Growth and Climate Change; engaging with our strategic partners including provinces, territories and Indigenous peoples; monitoring; science-based research; policy and regulatory development; and, through the enforcement of environmental laws. The Department’s programs focus on minimizing threats to Canadians and their environment from pollution; equipping Canadians to make informed decisions on weather, water and climate conditions; and conserving and restoring Canada’s natural environment.
Under the Department of the Environment Act, the powers, duties and functions of the Minister of Environment and Climate Change extend to matters such as:
- the preservation and enhancement of the quality of the natural environment, including water, air and soil quality, and the coordination of the relevant policies and programs of the Government of Canada;
- renewable resources, including migratory birds and other non-domestic flora and fauna;
- meteorology; and,
- the enforcement of rules and regulations.
A summary description of the ECCC Raison d’être and program activities can be found in Part II of the Main Estimates and the Departmental Plan.
Basis of presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. 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, Supplementary Estimates and the newly created Budget Implementation Vote (BIV), centrally managed by Treasury Board (TB Vote 40) for the 2018 19 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.
The authority of Parliament is required before money 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.
When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.
The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
Highlights of the fiscal quarter and the fiscal year-to-date (YTD) results
Authority analysis
The Statement of Authorities presented in this quarterly financial report (see Table 1) reflects the authorities that were approved as of December 31, 2018. The funding available for use includes the 2018-19 Main Estimates, the newly created BIV, centrally managed by Treasury Board (TB Vote 40), the Supplementary Estimates “A”, the Operating and Capital budget carry-forwards, and the compensation allocations from Treasury Board Secretariat (TBS) for adjustments made to terms and conditions of service employment of the federal public administration for collective agreements. Authorities for Supplementary Estimates “B” will follow later this year.
ECCC’s total available authorities for use for the year ending March 31, 2019 is higher by approximately $537.5M ($1,659.5M - $1,122.0M) when compared to the same quarter of the previous year. This difference is explained by an increase in Vote 1 – Net Operating of $23.4M ($841.1M - $817.7M), in Vote 5 – Capital of $7.4M ($92.0M - $84.6M), in Vote 10 – Grants and Contributions of $501.9M ($633.6M - $131.7M) and in Budgetary Statutory authorities of $4.7M ($92.7M - $88.0M).
Vote 1 – Net Operating authorities
The $23.4M increase compared to last fiscal year in the net Operating authorities is mainly due to the following:
- $28.7M increase related to Protecting Canada’s Nature, Parks & Wilds Spaces;
- $16.4M increase related to the Federal Contaminated Sites Action Plan;
- $11.3M increase related to initiatives supporting Clean Growth and Climate Change;
- $7.3M increase for the Pacific Environment Center Arbitration Award and Rent;
- $7.1M increase related to the impact assessment and regulatory processes;
- $4.3M increase related to an augmentation in the amount carried forward from the previous year to continue work on specific projects;
- $3.9M increase related to the carbon pollution pricing system;
- $2.3M increase related to initiatives associated with the revitalization of meteorological services;
- $2.2M increase related to the Oceans Protection Plan;
- $1.6M increase related to Protecting Marine Life;
- $1.0M increase related to activities Addressing Air Pollution;
- $0.9M increase related to Great Lakes Ecosystem Initiative; and
- $0.6M increase for various other small initiatives;
offset by:
- $30.0M decrease related to the compensation allocations from Treasury Board Secretariat related to the new collective agreements;
- $15.2M decrease related to Contaminated Sediment Remediation Projects;
- $8.0M decrease related to the Species at Risk Act;
- $5.5M internal reallocation of resources to support Grants and Contributions Initiatives;
- $3.1M decrease related to the Federal Infrastructure Initiative; and
- $2.4M decrease related to the World Class Oil Spills Regime.
Vote 5 – Capital authorities
The $7.4M increase compared to last fiscal year in the Capital authorities is mainly due to the following:
- $12.2M increase related to an augmentation in the amount carried forward from the previous year to continue work on specific projects;
- $9.8M increase related to initiatives associated with the revitalization of meteorological services; and
- $0.9M increase related to initiatives supporting Clean Growth and Climate Change;
- $0.7M increase related to Protecting Canada's Nature, Parks & Wilds Spaces;
offset by:
- $9.1M decrease related to the Federal Infrastructure Initiative;
- $4.2M decrease related to the World Class Oil Spills Regime;
- $1.8M decrease related to the National Conservation Plan; and
- $1.1M decrease for various other small initiatives.
Vote 10 – Grants and contributions authorities
The $501.9M increase compared to last fiscal year in the Grants and Contributions authorities is mainly due to the following:
- $463.7M increase related to the Low Carbon Economy Fund;
- $25.5M increase related to Protecting Canada’s Nature, Parks & Wilds Spaces;
- $6.5M increase related to initiatives supporting Clean Growth and Climate Change;
- $5.5M internal reallocation of resources to support Grants and Contributions Initiatives;
- $3.2M increase related to Great Lakes Ecosystem Initiative;
- $1.0M increase related to the impact assessment and regulatory processes; and
- $0.5M increase for various other small initiatives;
offset by:
- $4.0M decrease related to the Species at Risk Act.
Statutory authorities
The $4.7M increase compared to last fiscal year in the Budgetary statutory authorities is mainly due to the following:
- $4.7M increase related to the contributions to Employee Benefit Plans.
Expenditures analysis by authority
Details of expenditures by authority are presented in Tables 1 and 2.
In the third quarter of 2018-19, total budgetary expenditures were $278.3M compared to $281.6M reported for the same period in 2017-18, resulting in a decrease of $3.3M or 1.2%. Year to date expenditures as of December 31, 2018 are $740.5M which represents an increase of $1.1M or 0.1% ($740.5M - $739.4M) compared to the same period in 2017-18.
Vote 1 – Net Operating authorities used during the third quarter of 2018-19 totalled $195.1M, which represents a decrease of $10.1M or 4.9% ($195.1M - $205.2M) compared to the same quarter in 2017-18. This variance is mainly due to a one-time arbitration award paid for the Pacific Environment Centre lease agreement in fiscal year 2017-18 offset by the increase of full-time equivalent employees mainly related to Protecting Canada’s Nature, Parks & Wilds Spaces and Oceans Protection Plan Initiatives. Year to date expenditures also decreased by $16.7M or 2.9% ($561.3M - $578.0M).
This variance is mainly due to a one-time arbitration award paid for the Pacific Environment Centre lease agreement in fiscal year 2017-18.
Vote 5 – Capital authorities used during the third quarter of 2018-19 totalled $23.5M, which represents an increase of $5.2M or 28.4% ($23.5M - $18.3M) compared to the same quarter in 2017-18. Year to date expenditures have also increased by $10.0M or 31.8% ($41.4M - $31.4M) compared to the same period last year. Both increases are mainly attributable to an increase in engineering consulting fees due to the recapitalizing of the Eureka weather station runway project being put on hold in fiscal year 2017-18, offset by a decrease related to the sunsetting of 2016 Federal Infrastructure Initiative.
Vote 10 – Grants and Contributions authorities used during the third quarter of 2018-19 totalled $38.0M, which represents an increase of $1.4M or 3.8% ($38.0M - $36.6M) compared to the same quarter in 2017-18. Year to date expenditures have increased by $6.8M or 10.3% ($72.8M - $66.0M) compared to the same period last year. Both variances are mainly due to new grants and contributions payments for the Assessed Contribution to the Commission for Environmental Cooperation and Freshwater-Great lakes & lake Winnipeg, the timing of payments submitted to International Climate Financing, to Science Horizons Youth Internship and the Natural Areas Conservation Program.
Statutory authorities used during the third quarter of 2018-19 totalled $21.6M, which represents an increase of $0.5M or 2.4% ($21.6M - $21.1M) compared to the same quarter in 2017-18. Year to date expenditures have increased by $1.5M or 2.4% ($64.8M - $63.3M). This variance is mainly due to an increase related to the contributions to Employee Benefit Plans.
Expenditures analysis by Standard Object
Details of expenditures by Standard Object are presented in Tables 3 and 4.
Personnel expenditures have increased by $6.0M or 3.5% ($177.2M - $171.2M) compared to the same quarter last year. This variance is mainly due to the increase of full-time equivalent employees mainly related to Protecting Canada’s Nature, Parks & Wilds Spaces and Oceans Protection Plan Initiatives.Year to date personnel expenditures have decreased by $1.7M or 0.3% ($516.8M - $518.5M) compared to the previous year. This variance is mainly due to the disbursements of salary retroactive payments to indeterminate employees in 2017-18 following the ratification and signing of some collective agreements.
Quarterly and year to date transportation and communication expenditures have increased respectively by $2.3M or 26.4% ($11.0M - $8.7M) and $4.7M or 21.4% ($26.6M - $21.9M) compared to the same quarter last year. Both variances are mainly due to an increase for transportation of products and samples and an increase in travel expenditures by public servant to support ECCC core mandate and stakeholder engagement.
Professional and special services expenditures have increased by $4.0M or 9.2% ($47.6M - $43.6M) compared to the same quarter last year. This variance is mainly due to the timing of payments submitted for legal services provided by Justice Canada. Year to date professional and special services expenditures have increase by $13.8M or 16.1% ($99.7M - $85.9M) compared to the previous year. This variance is mainly due to the timing of payments submitted for legal services provided by Justice Canada and engineering consulting fees for the radar replacement project.
Quarterly and year to date rentals have decreased respectively by $18.8M or 79.0% ($5.0M - $23.8M) and $16.4M or 40.5% ($24.1M - $40.5M) compared to the same quarter last year. Both variances are mainly due to a one-time arbitration award paid for the Pacific Environment Centre lease agreement in fiscal year 2017-18.
Quarterly and year to date repair and maintenance expenditures have decreased respectively by $1.0M or 23.3% ($3.3M - $4.3M) and $3.8M or 31.1% ($8.4M - $12.2M) compared to the same quarter last year. Both variances are mainly attributable to the sunsetting of 2016 Federal Infrastructure Initiative.
Quarterly and year to date acquisition of machinery and equipment expenditures have increased respectively by $1.9M or 42.2% ($6.4M - $4.5M) and $1.1M or 11.3% ($10.8M - $9.7M) compared to the same quarter last year. Both variances are mainly attributable to an increase in purchases and the timing of payments.
Quarterly and year to date transfer payments expenditures have increased respectively by $1.4M or 3.8% ($38.0M - $36.6M) and $6.8M or 10.3% ($72.8M - $66.0M) compared to the same quarter last year. Both variances are mainly due to new grants and contributions payments for the Assessed Contribution to the Commission for Environmental Cooperation and Freshwater-Great lakes & lake Winnipeg, the timing of payments submitted to International Climate Financing, to Science Horizons Youth Internship and the Natural Areas Conservation Program.
Revenues collected have decreased by $0.2M or 1.0% ($20.2M - $20.4M) compared to the same quarter last year. Year to date collections have increased by $4.4M or 9.8% ($49.3M - $44.9M) compared to the previous year. This variance is mainly due to an increase in activities related to the Oil Sands Monitoring Program.
Risks and Uncertainties
ECCC is primarily funded through voted parliamentary spending authorities for operating expenditures, capital expenditures, and transfer payments as well as statutory authorities. The Department is also partially funded through vote-netted revenues. ECCC’s planned spending reflects approved funding by Treasury Board and Parliament.
ECCC’s ability to deliver results for Canadians is influenced by a wide range of internal and external factors such as the increasing frequency of severe weather events, and the expectation to consult and collaborate with federal, provincial, territorial, Indigenous, and other partners to address common environmental challenges. In its financial management, the Department considers these factors and their potential impact related to the department’s financial plan. For example, Budget 2018 provided funding of $130.3 million over five years to complete the modernization of Canada’s weather forecast and severe weather warning systems, and to revitalize water monitoring stations and improve water forecasts. In 2018–19, the Department continues to work to build sustainable populations of species at risk, support and enhance biodiversity across Canada, and expand Canada’s National Wildlife Areas, Migratory Bird Sanctuaries, and protected areas. This work is made possible due to the historic investment of $1.3 billion over five years in nature conservation announced in Budget 2018.
This additional funding represents new financial opportunities for ECCC in delivering on departmental expected outcomes. To ensure effective program delivery, ECCC will secure financial authorities in a timely manner so that program areas are able to quickly ramp up to meet new requirements, and will continue to conduct program monitoring and proactive financial risk management and planning as part of ECCC’s business planning and reporting processes.
Budget 2017 provided significant funding to ECCC in support of various initiatives under the Pan-Canadian Framework on Clean Growth and Climate Change, including the Low Carbon Economy Fund (LCEF). The total available LCEF funding for use in 2018-19 is $473.9M and ECCC anticipates a lapse of Grants and Contributions authorities due to uncertainties regarding provincial/territorial participation. ECCC will work with central agencies to ensure the availability of these funds in future years.
The Government of Canada has implemented a pay system as part of the pay transformation initiative. The implementation of this system has resulted in salary over/underpayments to employees. ECCC has proactively implemented a number of compensating controls to monitor this issue and will continue to monitor and report on the situation in close consultation with Public Services and Procurement Canada and Treasury Board Secretariat.
Significant changes in relation to operations, personnel and programs
No major changes in relation to operations, personnel and programs occurred during the third quarter.
Approved by:
(The original version was signed by)
Stephen Lucas,
Deputy Minister
Gatineau, Canada
Date: 26/02/2019
(The original version was signed by)
Carol Najm,
Chief Financial Officer
Gatineau, Canada
Date: 25/02/2019
Statement of Authorities (unaudited) – Table 1
Authority | Total available for use for the year ending March 31, |
Used during the quarter ended December 31, 2018 | Year to date used at quarter |
---|---|---|---|
841,129 | 195,105 | 561,295 | |
Vote 5 – Capital expenditures | 92,041 | 23,542 | 41,430 |
Vote 10 – Grants and contributions | 633,640 | 38.026 | 72,795 |
Budgetary Statutory – Employee Benefit Plans | 92,642 | 21,590 | 64,771 |
Budgetary Statutory – Minister’s Salary and Motor Car Allowance | 86 | 22 | 65 |
Budgetary Statutory – Spending of proceeds from the disposal of surplus Crown assets |
0 | 8 | 158 |
Total Budgetary authorities | 1,659,538 |
278,293 |
740,514 |
Non-budgetary authorities | - | - | - |
Total authorities | 1,659,538 | 278,293 | 740,514 |
* The Total funding available for use includes the 2018-19 Main Estimates, the Budget Implementation Vote, the Supplementary Estimates “A”, the Operating and Capital budget carry-forwards, and the Compensation Allocations related to the new collective agreements. Authorities for Supplementary Estimates “B” will follow later this year.
Statement of Authorities (unaudited) – Table 2
Authority | Total available for use for the year ending March 31, |
Used during the quarter ended December 31, 2017 |
Year to date used at quarter |
---|---|---|---|
817,744 | 205,239 | 578,024 | |
Vote 5 – Capital expenditures | 84,575 | 18,314 | 31,376 |
Vote 10 – Grants and contributions | 131,708 | 36,600 | 65,970 |
Budgetary Statutory – Employee Benefit Plans | 87,934 | 21,092 | 63,275 |
Budgetary Statutory – Minister’s Salary and Motor Car Allowance | 84 | 21 | 63 |
Budgetary Statutory – Spending of proceeds from the disposal of surplus Crown assets | 0 |
380 |
700 |
Total Budgetary authorities | 1,122,045 | 281.646 | 739,408 |
Non-budgetary authorities | - | - | - |
Total authorities | 1,122,045 | 281.646 | 739,408 |
* The funding available for use includes the 2017-18 Main Estimates, the Supplementary Estimates “A” and “B”, the Operating and Capital budget carry-forwards, and the Compensation Allocations related to the new collective agreements. Authorities for Supplementary Estimates “C” followed later that year.
Departmental budgetary expenditures by Standard Object (unaudited) – Table 3
Authority | Planned expenditures for the year ending March 31, |
Expended during the quarter ended December 31, 2018 |
Year to date used at quarter end |
---|---|---|---|
Expenditures: | - | - | - |
Personnel | 695,896 | 177,180 | 516,842 |
Transportation and communications | 43,322 | 11,026 | 26,563 |
Information | 6,077 | 1,148 | 2,363 |
Professional and special services | 184,864 | 47,586 | 99,693 |
Rentals | 37,449 | 5,025 | 24,131 |
Repair and maintenance | 24,515 | 3,272 | 8,447 |
Utilities, materials and supplies | 53,104 | 7,528 | 21,687 |
Acquisition of land, buildings and works | 1,251 | 32 | 72 |
Acquisition of machinery and equipment | 56,880 | 6,422 | 10,800 |
Transfer payments | 633,640 | 38,026 | 72,795 |
Other subsidies and payments | 6,359 | 1,297 | 6,380 |
Total gross budgetary expenditures | 1,743,357 | 298,542 | 789,773 |
Less Revenues netted against expenditures: | - | - | - |
Revenues | 83,819 | 20,249 | 49,259 |
Total Revenues netted against expenditures: | 83,819 | 20,249 | 49,259 |
Total net budgetary expenditures | 1,659,538 | 278,293 | 740,514 |
* The Total funding available for use includes the 2018-19 Main Estimates, the Budget Implementation Vote, the Supplementary Estimates “A”, the Operating and Capital budget carry-forwards, and the Compensation Allocations related to the new collective agreements. Authorities for Supplementary Estimates “B” will follow later this year.
Departmental budgetary expenditures by Standard Object (unaudited) – Table 4
Standard Object | Planned expenditures for the year ending March 31, 2018* | Expended during the quarter ended December 31, 2017 | Year to date used at quarter end |
---|---|---|---|
Expenditures: | - | - | - |
Personnel | 693,338 | 171,204 | 518,451 |
Transportation and communications | 39,580 | 8,656 | 21,867 |
Information | 3,621 | 1,397 | 2,544 |
Professional and special services | 178,753 | 43,569 | 85,905 |
Rentals | 34,626 | 23,821 | 40,483 |
Repair and maintenance | 17,002 | 4,336 | 12,230 |
Utilities, materials and supplies | 50,914 | 7,243 | 20,202 |
Acquisition of land, buildings and works | 1,492 | 79 | 161 |
Acquisition of machinery and equipment | 45,628 | 4,548 | 9,652 |
Transfer payments | 131,708 | 36,599 | 65,970 |
Other subsidies and payments | 4,915 | 585 | 6,837 |
Total gross budgetary expenditures | 1,201,577 | 302,037 | 784,302 |
Less Revenues netted against expenditures: | - | - | - |
Revenues | 79,532 | 20,391 | 44,894 |
Total Revenues netted against expenditures: | 79,532 | 20,391 | 44,894 |
Total net budgetary expenditures | 1,122,045 | 281,646 | 739,408 |
* The funding available for use includes the 2017-18 Main Estimates, the Supplementary Estimates “A” and “B”, the Operating and Capital budget carry-forwards, and the Compensation Allocations related to the new collective agreements. Authorities for Supplementary Estimates “C” followed later that year.
Page details
- Date modified: