Quarterly Financial Report, quarter ended June 30, 2022: Environment and Climate Change Canada
Statement outlining results, risks and significant changes in operations, personnel and programs
Introduction
This first 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 2022-23 Main Estimates.
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, including taking action on clean growth and climate change. The Department is also engaged in activities aimed at preventing and managing pollution, conserving nature, and predicting weather and environmental conditions. 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 and regulations.
The Department’s program focus reflects the interdependence between environmental sustainability and economic well-being.
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
- the enforcement of rules and regulations
A summary description of the ECCC Raison d’être and core responsibilities 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 for the 2022‑23 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 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 June 30, 2022. The funding available for use includes the 2022-23 Main Estimates.
ECCC’s total available authorities for use for the year ending March 31, 2023 is higher by approximately $169.9M ($1,968.2M - $1,798.3M)Footnote 1 when compared to the same quarter of the previous year. This difference is explained by an increase in Vote 1 – Net Operating of $64.2M ($969.2M - $905.0M), in Vote 5 – Capital of $15.0M ($120.5M - $105.5M), in Vote 10 – Grants and Contributions of $84.5M ($770.3M – $685.8M) and in Budgetary Statutory authorities of $6.2M ($108.2M - $102.0M).
Vote 1 – Net Operating authorities
The $64.2M increase compared to last fiscal year in the net Operating authorities is mainly due to the following:
- $40.3M increase to conserve Canada’s land and freshwater, protect species, advance Indigenous reconciliation and increase access to nature;
- $9.7M increase related to carbon pollution pricing proceeds return;
- $9.4M increase to reduce greenhouse gas emissions in the transportation and methane waste sectors;
- $7.7M increase to support climate change policy capacity;
- $5.7M increase related to the compensation allocations from Treasury Board for the new collective agreements;
- $5.0M increase related to strong arctic and northern communities;
- $4.8M increase to establish the Canada Water Agency Transition Office;
- $3.6M increase to implement natural climate solutions in Canada;
- $3.4M increase related to the Federal Contaminated Sites Action Plan;
- $3.4M increase related to Climate Lens initiative;
- $3.3M increase related to wildfire and flood preparedness and response capacity;
- $3.1M increase to implement Canada’s new marine conservation targets;
- $3.1M increase to address imminent threats to wood bison herds;
- $2.9M increase to modernize the enforcement of environmental laws and regulations;
- $2.9M increase related to the Wood Buffalo National Park World Heritage Site Action Plan;
- $0.3M increase related to various other initiatives.
Offset by:
- $8.2M decrease related to Great Lakes ecosystem initiatives;
- $6.5M decrease related to travel allocations;
- $6.3M decrease related to the Low Carbon Economy Fund (LCEF);
- $6.2M decrease related to the National Zero Plastic Waste Strategy;
- $5.1M decrease related to the Oceans Protection Plan;
- $4.5M decrease related to a transfer of ongoing funds to Shared Services Canada to further centralize Enterprise Services given the move to IT standardization of user-based services;
- $4.2M decrease to develop the federal carbon pollution pricing system; and
- $3.4M decrease to adapt Canada’s weather and water services to climate change.
Vote 5 – Capital authorities
The $15.0M increase compared to last fiscal year in the Capital authorities is mainly due to the following:
- $4.7M increase to safeguard the continuous operation of the Dr. Neil Trivett Global Atmosphere Watch Observatory in Alert, Nunavut;
- $4.2M increase to conserve Canada’s land and freshwater, protect species, advance Indigenous reconciliation and increase access to nature;
- $2.1M increase related to strong arctic and northern communities;
- $2.0M increase to reduce greenhouse gas emissions in the transportation and methane waste sectors;
- $1.4M increase related to initiatives associated with the revitalization of meteorological services; and
- $1.3M increase to address Canadian data receiving infrastructure for the Space-Based Earth Observation Network.
Offset by:
- $0.7M decrease related to various other initiatives.
Vote 10 – Grants and contributions authorities
The $84.5M increase compared to last fiscal year in the Grants and Contributions authorities is mainly due to the following:
- $185.7M increase to conserve Canadaʼs land and freshwater, protect species, advance Indigenous reconciliation and increase access to nature;
- $28.0M increase related to Canada’s International Climate Finance; and
- $25.3M increase to implement natural climate solutions in Canada.
Offset by:
- $130.2M decrease related to the Low Carbon Economy Fund;
- $23.7M decrease related to the Youth Employment and Skills Strategy; and
- $0.6M decrease for various other initiatives.
Statutory authorities
The $6.2M increase compared to last fiscal year in the budgetary statutory authorities is mainly due to the following:
- $6.2M increase related to the contributions to Employee Benefit Plans.
Expenditures analysis by vote
Details of expenditures by vote are presented in Tables 1 and 2.
In the first quarter of 2022-23, total budgetary expenditures were $281.8M compared to $260.9M reported for the same period in 2021-22, resulting in an increase of $20.9M.
Vote 1 – Net Operating authorities used during the first quarter of 2022-23 totalled $214.0M, which represents an increase of $12.2M ($214.0M - $201.8M) compared to the same period last year. This variance is mainly due to an increase in personnel, rentals and acquisition of computer equipment.
Vote 5 – Capital authorities used during the first quarter of 2022-23 totalled $6.6M, which represents a decrease of $0.9M ($6.6M – $7.5M) compared to the same period last year.
Vote 10 – Grants and Contributions authorities used during the first quarter of 2022-23 totalled $33.7M, which represents an increase of $6.3M ($33.7M - $27.4M) compared to the same period last year. The variance is mainly due to an increase in funding available for initiatives related to Canada’s International Climate Finance Program and to implement natural climate solutions in Canada.
Budgetary Statutory - Statutory authorities used during the first quarter of 2022-23 totalled $27.5M, which represents an increase of $3.3M ($27.5M - $24.2M) compared to the same period last year, mainly due to an increase in contribution 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 $10.7M ($212.3M - $201.6M) compared to the same period last year. The variance is mainly due to the increase of permanent salaries based on collective agreements and to the increase related to conserve Canadaʼs land and freshwater, protect species, advance Indigenous reconciliation and increase access to nature and to carbon pollution pricing proceeds return initiatives.
Transportation and communications expenditures have increased by $4.2M ($6.2M - $2.0M) compared to the same period last year. The variance is mainly due to an increase in travel expenditures and to an increase in expenditures related to the timing of payment for telecommunication service agreements with Shared Services Canada.
Rentals expenditures have increased by $1.0M ($5.0M - $4.0M) compared to the same period last year. The variance is mainly due to an increase in the cost of aircraft rental related to various field work activities that had been delayed or suspended during the last two years.
Acquisition of machinery and equipment expenditures have increased by $2.6M ($4.8M - $2.2M) compared to the same period last year. The variance is mainly due to the timing in payment for the acquisition of computer equipment and the timing of acquisition of lab instruments related to a return to pre-pandemic needs.
Transfer payments expenditures have increased by $6.7M ($34.1M - $27.4M) compared to the same quarter last year. The variance is mainly due to an increase in funding available for initiatives for Canada’s International Climate Finance Program and implement natural climate solutions in Canada.
Revenue collections have increased by $4.2M ($12.0M - $7.8M) compared to the same period last year. The variance is mainly due to the timing of collection related to meteorological services provided to NAV Canada and to 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, 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.
The Department addresses environmental challenges in a horizontal and collaborative environment, characterized by shared jurisdiction, various domestic and international partnerships, and increasing expectations for co-development of environmental solutions with Indigenous peoples. As a science-based department, ECCC’s operations are highly complex, requiring access to unique skill sets, leading-edge and sustainable infrastructure, and data.
In this context, a wide range of internal and external factors has the potential to affect ECCC’s ability to deliver optimal and timely results for Canadians. This includes but is not limited to the multiplicity of new and evolving priorities and commitments, the COVID-19 and post-pandemic related challenges and uncertainties, the evolving policy and legal landscape, the rising importance of climate change, the need for nature-based solutions, as well as the necessity to keep pace with technological advancements. With regards to financial management, the Department considers and addresses these factors and their potential impacts on the Department’s financial plan.
The Department’s ability to deliver results for Canadians on clean growth and climate change required extensive collaboration with federal, provincial, territorial, Indigenous, and international partners, as well as the private and non-profit sectors and civil society, to address common uncertainties in this area. Among other things, the Department continued to work collaboratively with key partners in implementing and building on the Pan-Canadian Framework on Clean Growth and Climate Change (PCF), as well as supporting strengthened Canada’s climate plan engagement efforts as part of A Healthy Environment and a Healthy Economy. In addition, ECCC is continuing to support the Government of Canada’s efforts to adapt to the impacts of changing climatic realities. ECCC is committed to designing and implementing programs to not only account for climate change impacts, but also the risks that could impede ECCC to deliver on their mandates in an effective and efficient manner.
Partnerships are the Departments key determinant to deliver antipollution programming. Traditionally this is achieved by extensive collaboration with various partners, such as businesses, non-governmental organizations, Indigenous communities, municipalities, provinces, territories and other countries. To effectively prevent and manage pollution across Canada, the Department addressed several uncertainties regarding the development and implementation of environmental standards, guidelines, regulations and other risk management instruments to reduce releases and monitor levels of contaminants in air, water and soil, and to promote and enforce compliance with environmental laws and regulations. Moreover, as provincial and community restrictions continue to evolve, limitations to fieldwork and laboratory analysis could negatively affect the Department’s ability to generate and leverage data used for the development and implementation of environmental standards, guidelines and regulations.
The effective management and leveraging of information assets is critical to the Department’s ability to conserve nature. COVID-19 restrictions impeded collaboration with external partners, the technical fieldwork needed to monitor wildlife populations, and the establishment of protected and conserved areas. A partnership has been built by the Canada Nature Fund to progress toward achieving Canada’s biodiversity targets for conserving land and inland waters, and advance the protection and recovery of species at risk. ECCC continued to leverage its scientific data and Indigenous knowledge systems, as well as adapt its approaches and programming to climate change and enforcement of legislation that facilitates conservation. ECCC has been proceeding with the implementation of the distinctions-based Indigenous Guardians Pilot Program with Indigenous peoples.
The Department relies on its capital and technological infrastructure to achieve its mandate and deliver mission-critical weather services. This infrastructure required maintenance and ongoing investment was implemented to prevent rust-out and to ensure the functionality in the face of changing and increasingly complex needs. However, the Department’s ability to ensure a timely delivery of world-class meteorological, environmental and hydrological information could be hampered by their ability to access collect, share and analyze this complex data. In response to these uncertainties, ECCC will continue to develop and implement new strategies to enhance data governance and transparency, empower people, promote a data culture, and foster an enabling data structure. Furthermore, ECCC plans to enhance its capital and technological planning to improve upon the assessment of enterprise-wide deficits, priorities and funding for areas of need.
ECCC will continue to closely monitor its operating environment in order to reallocate resources to key priorities and ensure that resources are being managed effectively to deliver optimal and timely results through improved programs, policies and services.
Significant changes in relation to operations, personnel and programs
No significant changes in relation to operations, personnel and programs to report during the first quarter of 2022-23.
Approved by:
(the original version was signed by Paul Halucha in replacement of)
T. Christine Hogan,
Deputy Minister
Gatineau, Canada
Date: August 9, 2022
(the original version was signed by)
Linda Drainville,
Chief Financial Officer
Gatineau, Canada
Date: August 3, 2022
Statement of Authorities (unaudited) – Table 1
- | Total available for use for the year ending March 31, 2023* | Used during the quarter ended June 30, 2022 | Year to date used at quarter end |
---|---|---|---|
Vote 1 – Net Operating expenditures | 969,251 | 213,982 | 213,982 |
Vote 5 – Capital expenditures | 120,490 | 6,631 | 6,631 |
Vote 10 – Grants and contributions | 770,282 | 33,657 | 33,657 |
Budgetary Statutory – Employee Benefit Plans | 108,101 | 27,026 | 27,026 |
Budgetary Statutory – Minister’s Salary and Motor Car Allowance | 93 | 23 | 23 |
Budgetary Statutory – Distribution of Fuel and Excess | 0 | 464 | 464 |
Total Budgetary authorities | 1,968,217 | 281,783 | 281,783 |
Non-Budgetary authorities | 0 | - | - |
Total authorities | 1,968,217 | 281,783 | 281,783 |
* The funding available for use includes the 2022-23 Main Estimates.
Statement of Authorities (unaudited) – Table 2
- | Total available for use for the year ending March 31, 2022* | Used during the quarter ended June 30, 2021 | Year to date used at quarter end |
---|---|---|---|
Vote 1 – Net Operating expenditures | 904,989 | 201,788 | 201,788 |
Vote 5 – Capital expenditures | 105,551 | 7,481 | 7,481 |
Vote 10 – Grants and contributions | 685,762 | 27,366 | 27,366 |
Budgetary Statutory – Employee Benefit Plans | 101,864 | 24,193 | 24,193 |
Budgetary Statutory – Minister’s Salary and Motor Car Allowance | 91 | 23 | 23 |
Total Budgetary authorities | 1,798,257 | 260,851 | 260,851 |
Non-Budgetary authorities | - | - | - |
Total authorities | 1,798,257 | 260,851 | 260,851 |
* The funding available for use includes the 2021-22 Main Estimates and the Supplementary Estimates A.
Departmental budgetary expenditures by Standard Object (unaudited) – Table 3
Expenditures | Planned expenditures for the year ending March 31, 2023* | Expended during the quarter ended June 30, 2022 | Year to date used at quarter end |
---|---|---|---|
Personnel | 828,870 | 212,262 | 212,262 |
Transportation and communications | 16,576 | 6,249 | 6,249 |
Information | 8,254 | 713 | 713 |
Professional and special services | 232,461 | 23,554 | 23,554 |
Rentals | 66,564 | 5,047 | 5,047 |
Repair and maintenance | 22,902 | 1,740 | 1,740 |
Utilities, materials and supplies | 38,201 | 5,015 | 5,015 |
Acquisition of land, buildings and works | 1,536 | 43 | 43 |
Acquisition of machinery and equipment | 49,642 | 4,769 | 4,769 |
Transfer payments | 770,282 | 34,121 | 34,121 |
Public debt charges | 504 | 0 | 0 |
Other subsidies and payments | 6,639 | 277 | 277 |
Total gross budgetary expenditures | 2,042,431 | 293,790 | 293,790 |
Less Revenues netted against expenditures: | |||
Revenues | 74,214 | 12,007 | 12,007 |
Total Revenues netted against expenditures: | 74,214 | 12,007 | 12,007 |
Total net budgetary expenditures | 1,968,217 | 281,783 | 281,783 |
* The planned expenditures available for use include the 2022-23 Main Estimates.
Departmental budgetary expenditures by Standard Object (unaudited) – Table 4
Expenditures | Planned expenditures for the year ending March 31, 2022* | Expended during the quarter ended June 30, 2021 | Year to date used at quarter end |
---|---|---|---|
Personnel | 774,676 | 201,580 | 201,580 |
Transportation and communications | 45,591 | 1,993 | 1,993 |
Information | 8,154 | 762 | 762 |
Professional and special services | 221,976 | 24,048 | 24,048 |
Rentals | 32,246 | 3,950 | 3,950 |
Repair and maintenance | 18,400 | 1,479 | 1,479 |
Utilities, materials and supplies | 41,152 | 5,121 | 5,121 |
Acquisition of land, buildings and works | 1,855 | 79 | 79 |
Acquisition of machinery and equipment | 36,272 | 2,200 | 2,200 |
Transfer payments | 685,762 | 27,366 | 27,366 |
Public debt charges | 509 | 0 | 0 |
Other subsidies and payments | 7,423 | 60 | 60 |
Total gross budgetary expenditures | 1,874,016 | 268,638 | 268,638 |
Less Revenues netted against expenditures: | |||
Revenues | 75,759 | 7,787 | 7,787 |
Total Revenues netted against expenditures: | 75,759 | 7,787 | 7,787 |
Total net budgetary expenditures | 1,798,257 | 260,851 | 260,851 |
* The funding available for use includes the 2021-22 Main Estimates and the Supplementary Estimates A.
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