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Quarterly Financial Report for the quarter ended September 30, 2024

Statement outlining results, risks and significant changes in operations, personnel and programs.

Quarterly Financial Report for the quarter ended September 30, 2024 [PDF - 581 KB]

Introduction

This second 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 2024-25 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) leads and supports a wide range of environmental issues, including taking action on clean growth and climate change, pollution, conserving nature, and predicting weather and environmental conditions. The Department addresses these issues through various actions and initiatives including leading Canada’s efforts to transition to a net-zero economy and strengthening resilience to climate change, protecting more of our lands and waters, strengthening protection and recovery for species at risk and their habitats, and providing environmental and weather information to Canadians. To achieve its mandate, the Department works with provinces, territories, Indigenous peoples, civil society, industry, and international partners, and undertakes monitoring, science-based research, policy and regulatory development, and 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:

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 ECCC’s spending authorities granted by Parliament and those used by the Department consistent with the Main Estimates for the 2024‑25 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 September 30, 2024. The funding available for use includes the 2024-25 Main Estimates and allocations from Treasury Board (TB) Central Votes including the Operating and Capital budget carry-forwards.

ECCC’s total available authorities for use for the year ending March 31, 2025 is higher by approximately $326.2M ($2,834.3M – $2,508.1M)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 $179.2M ($1,211.4M – $1,032.2M), Vote 10 – Grants and Contributions of $148.2M ($1,382.4M – $1,234.2M), in Budgetary Statutory authorities of $10.4M ($122.4M – $112.0M) and by decrease in and Vote 5 – Capital of $11.6M ($118.1M – $129.7M).

Vote 1 – Net Operating authorities

The $179.2M increase compared to last fiscal year in the net Operating authorities is mainly due to the following increases:

Offset by the following decreases:

Operating Authorities are netted of respendable revenues. Revenues at Environment and Climate Change Canada come from 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.

Vote 5 – Capital authorities

The $11.6M decrease compared to last fiscal year in the Capital authorities is mainly due to the following decreases:

Offset by the following increases:

Vote 10 – Grants and contributions authorities

The $148.2M increase compared to last fiscal year in the Grants and Contributions authorities is mainly due to the following increases:

Offset by the following decreases:

Statutory authorities

The $10.4M increase compared to last fiscal year in the budgetary statutory authorities is due to the following:

Expenditures analysis by vote

Details of expenditures by vote are presented in Tables 1 and 2.

In the second quarter of 2024-25, total budgetary expenditures were $447.8M compared to $364.3M reported for the same period in 2023-24, resulting in an increase of $83.5M. Year-to-date expenditures as of September 30, 2024, were $1,371.6M, which represents an increase of $709.5M ($1,371.6M – $662.1M) compared to the same period in 2023-24.

Vote 1 – Net Operating Authorities used during the second quarter of 2024-25 totalled $292.8M, which represents an increase of $31.0M ($292.8M – $261.8M) compared to the same period last year. Year-to-date expenditures as of September 30, 2024, were $561.2M, which represents an increase of $80.4M ($561.2M – $480.8M) compared to the same period last year. Both variances are mainly due to an increase in personnel and professional and special services expenditures. The quarterly variance is also due to an increase in utilities and materials expenditures, acquisition of machinery and equipment and a decrease of revenues. The year-to-date variance is also due to an increase rental expenditures.

Vote 5 – Capital Authorities used during the second quarter of 2024-25 totalled $30.3M, which represents an increase of $10.1M ($30.3M – $20.2M) compared to the same period last year. Year-to-date expenditures as of September 30, 2024, are $37.1M, which represents an increase of $9.5M ($37.1M – $27.6M) compared to the same period last year. The quarterly variance is mainly due to an increase in personnel expenditures, professional and special services expenditures, utilities and materials expenditures and acquisition of machinery and equipment.

Vote 10 – Grants and Contributions Authorities used during the second quarter of 2024-25 totalled $89.2M, which represents an increase of $35.5M ($89.2M – $53.7M) compared to the same period last year. Year-to-date expenditures as of September 30, 2024, are $706.9M, which represents an increase of $612.4M ($706.9M – $94.5M) compared to the same period last year. Both variances are mainly due to an increase in contributions to protect Canada’s lands and freshwater, strengthen protection and recovery of species at risk, advance reconciliation through Indigenous leadership in conservation and support healthy natural infrastructure and increased access to nature. The year-to-date variance is also due to an up-front contribution payment to the Green Municipal Fund to build strong and resilient communities by reducing the impacts of climate-related disasters, improving health and well-being, protecting and restoring nature and biodiversity, building and maintaining resilient infrastructure and supporting the economy and workers. It is also due to an increase in contribution payments to restore and enhance wetlands, peatlands, and grasslands to store and capture carbon.

Budgetary Statutory Authorities – Budgetary Statutory Authorities used during the second quarter of 2024-25 totalled $35.4M, which represents an increase of $6.9M ($35.4M – $28.5M) compared to the same period last year. Year-to-date expenditures as of September 30, 2024, are $66.4M, which represents an increase of $7.2M ($66.4M – $59.2M) compared to the same period last year. Both variances are mainly due to an increase in contribution to employee benefit plans. The quarterly variance is also due to an increase in distribution of carbon pollution pricing proceeds.

Expenditures analysis by Standard Object

Details of expenditures by Standard Object are presented in Tables 3 and 4.

Quarterly and year-to-date personnel expenditures increased by $27.4M ($269.7M – $242.3M) and $73.6M ($537.9M – $464.3M) compared to the same period last year. Both variances are mainly due to an increase in salary wages due to renewed collective agreements.

Quarterly and year-to-date professional and special services expenditures increased by $6.7M ($48.4M – $41.7M) and $8.9M ($74.8M –$65.9M) compared to the same period last year. Both variances are mainly due to the timing of payment of expenditures related to remediation of contaminated sites, offset by a decrease in engineering consulting fees related to initiatives associated with the revitalization of meteorological services. The quarterly variance is also due to an increase in engineering consulting fees related to work done to the Dr. Neil Trivett Global Atmosphere Watch Observatory in Nunavut and in other business services related to the holding of the fourth session of the Intergovernmental Negotiating Committee on Plastic Pollution (INC-4) in April 2024.

Quarterly and year-to-date rental expenditures decreased by $0.3M ($6.1M – $6.4M) and increased by $1.6M ($11.8M – $10.2M) compared to the same period last year. The quarterly variance is mainly due to the timing of rental fee payment for the National Wildlife Research Centre office laboratory space at Carleton University, offset by an increase in the cost related to charter flights. The year-to-date variance is mainly due to the holding of the INC-4 in April 2024.

Quarterly and year-to-date utilities, materials and supplies expenditures increased by $3.3M ($9.7M – $6.4M) and $2.3M ($15.6M – $13.3M) compared to the same period last year. Both variances are mainly due to the timing of payment of meteorological supplies.

Quarterly and year-to-date acquisition of machinery and equipment expenditures increased by $3.6M ($8.7M – $5.1M) and $4.6M ($12.9M – $8.3M) compared to the same period last year. The quarterly variance is mainly due to the timing of payment for the acquisition of computer equipment and lab instruments.

Quarterly and year-to-date transfer payments expenditures increased by $39.6M ($93.4M – $53.8M) and $615.0M ($711.0M – $96.0M) compared to the same quarter last year. Both variances are mainly due to an increase in contributions to protect Canada’s lands and freshwater, strengthen protection and recovery of species at risk, advance reconciliation through Indigenous leadership in conservation and support healthy natural infrastructure and increased access to nature. The year-to-date variance is also due to an up-front contribution payment to the Green Municipal Fund to build strong and resilient communities by reducing the impacts of climate-related disasters, improving health and well-being, protecting and restoring nature and biodiversity, building and maintaining resilient infrastructure and supporting the economy and workers. It is also due to an increase in contribution payments to restore and enhance wetlands, peatlands, and grasslands to store and capture carbon.

Quarterly and year-to-date revenue collections decreased by $2.0M ($8.5M – $10.5M) and $2.0M ($22.7M – $24.7M) compared to the same period last year. Both variances are mainly due to the timing of collections related to hydrometric data and information services and to the Oil Sands Monitoring program.

Risks and Uncertainties

A wide range of internal and external factors have the potential to affect ECCC’s ability to deliver optimal and timely results for Canadians. As part of its financial management, the Department considers and addresses numerous risks: Stakeholders Relationships; Federal, Provincial and Territorial (FPTs) Relationships and Partnerships; Indigenous Relationships and Partnerships; Management Practices; Grants and Contributions (G&Cs); People; Technological and Digital Infrastructure; Physical Infrastructure; and Information for Decision-making and Oversight.

To pursue the delivery of results for Canadians, the Department works in close collaboration with a wide array of strategic stakeholders and partners, including but not limited to environmental non-governmental organizations, international partners, FPTs, and Indigenous partners. The achievement of shared objectives can be in jeopardy if efforts are not well aligned and coordinated. The changing and diverse expectations of stakeholders and partners must also be managed against a backdrop of competing priorities. This is further complicated by changing political and legislative landscapes, resource constraints, and an expanding departmental mandate that includes many high-profile commitments. To ensure the Department’s priorities are well coordinated with those of its stakeholders and partners, ECCC continues to develop and build important relationships, including by working diligently to harmonize its engagement activities, especially when dealing with the same partners on multiple issues. ECCC also works with external stakeholders and partners through existing and new governance bodies and continues to explore technological solutions that foster collaboration.

The growing mandate that ECCC has experienced in recent years raises concerns about the need to improve management practices, including those related to G&C programs. Without these improvements, the Department may struggle to adapt, allocate resources, or demonstrate value for money. To address this, efforts are underway to assess and standardize program and service control practices, structures and tools. This includes the Department’s efforts to promote sound stewardship of departmental resources through the terms and conditions associated with its G&C programs to leverage partner support, ensure efficient delivery of external funding, and reduce potential lapses.

To fulfill its mandate, ECCC also requires diverse, highly qualified, and specialized personnel with expertise in various areas, such as science and regulations, data management, policy development, and transfer payment programs. Uncertainties endure in attracting, developing, and retaining staff and leaders with appropriate skillsets due in part to a highly competitive and transforming labour market and to challenges with the internal processes and enabling frameworks related to people management. This is compounded by ECCC’s expanding workloads and changes that contribute to increased change fatigue, and undermine employee well-being, productivity, and commitment. To attract and retain a qualified workforce, ECCC continues to maintain flexibility in providing internal human resources services, to perform sound human resources planning, and to support the health and wellness of employees.

In addition, there is a growing gap between the digital and technological tools needed to enable the Department’s mandate and the quality and resilience of its current digital and technological infrastructure. This is due to challenges in aligning departmental operations with bold government-wide digital visions, and to a variety of factors contributing to infrastructure erosion, rust-out and reduced resiliency, including a rapidly changing profile of climate risk. Canada also faces persistent and increasingly sophisticated malicious cyber campaigns that threaten the public sector. To address these risks, ECCC undertakes technological and digital investment planning to proactively identify deficits and determine priorities and funding needs in these areas. It also continues to monitor, analyze and adapt cyber security measures.

The Department’s ability to sustain its programming and commitments is also closely linked to the condition of its physical infrastructure. This infrastructure requires maintenance and ongoing investment to prevent rust-out and ensure functionality in the face of changing and increasingly complex needs. This is especially true given the increasing frequency of extreme weather-related events, such as catastrophic floods, droughts, and wildfires that can threaten ECCC’s critical infrastructure and lead to increased costs for maintenance, operation or replacement. The Department helps protect its assets and avoid service disruptions through rigorous capital investment planning, infrastructure life-cycle management, and business continuity planning. It also continues to assess climate risks to ECCC’s critical and high-value assets, and to implement its Departmental Climate Change Adaptation Plan.

The Department’s effective governance and decision-making depend on its ability to efficiently access, manage, analyze, and share increasingly large and complex amounts of data. To address uncertainties in this area, ECCC continues to invest in information management systems, infrastructure, tools, and personnel to support the appropriate management of information and seamless data mining, inter-operability, and sharing. At the same time, ECCC sustains strong lines of communication and is actively engaged in expanding partnerships and external collaboration to leverage existing sources of scientific data for the collective advancement of critical environmental efforts.

ECCC will continue to closely monitor its operating environment to allocate 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

The following major changes in relation to operations, personnel and programs occurred during the second quarter:

Approved by:

(the original version was signed by)

(the original version was signed by)

Jean-François Tremblay
Deputy Minister
Gatineau, Canada
Date: November 29, 2024

Linda Drainville
Chief Financial Officer
Gatineau, Canada
Date: November 20, 2024

Statement of Authorities (unaudited) – Table 1

Fiscal year 2024-25 (in thousands of dollars)
-

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

Vote 1 – Net Operating Expenditures

1,211,397

292,802

561,227

Vote 5 – Capital Expenditures

118,080

30,327

37,119

Vote 10 – Grants and Contributions

1,382,418

89,251

706,858

Budgetary Statutory – Employee Benefit Plans

122,274

30,569

61,137

Budgetary Statutory – Minister’s Salary and Motor Car Allowance

99

25

50

Budgetary Statutory – Distribution of Fuel and Excess Emission Charges

-

4,102

4,102

Budgetary Statutory – Refund of previous years revenue

-

760

1,124

Budgetary Statutory – Spending of proceeds from the disposal of surplus Crown assets

-

6

6

Total Budgetary Authorities

2,834,268

447,842

1,371,623

Non-Budgetary Authorities

-

-

-

Total Authorities

2,834,268

447,842

1,371,623

* The funding available for use includes the 2024-25 Main Estimates and the allocations from Treasury Board (TB) Central Votes including the Operating and Capital budget carry-forwards.

Statement of Authorities (unaudited) – Table 2

Fiscal year 2023-24 (in thousands of dollars)
-

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

Vote 1 – Net Operating Expenditures

1,032,230

261,857

480,821

Vote 5 – Capital Expenditures

129,735

20,195

27,590

Vote 10 – Grants and Contributions

1,234,197

53,764

94,460

Budgetary Statutory – Employee Benefit Plans

111,907

27,977

55,954

Budgetary Statutory – Minister’s Salary and Motor Car Allowance

95

24

47

Budgetary Statutory – Distribution of Fuel and Excess Emission Charges

-

-

1,457

Budgetary Statutory – Refund of previous years revenue

-

146

1,345

Budgetary Statutory – Spending of proceeds from the disposal of surplus Crown assets

-

372

372

Total Budgetary Authorities

2,508,164

364,335

662,046

Non-Budgetary Authorities

-

-

-

Total Authorities

2,508,164

364,335

662,046

* The funding available for use includes the 2023-24 Main Estimates, allocations from Treasury Board (TB) Central Votes including the Operating and Capital budget carry-forwards and Government-wide Initiatives.

Departmental budgetary expenditures by Standard Object (unaudited) – Table 3

Fiscal year 2024-25 (in thousands of dollars)

Expenditures

Planned expenditures for the year ending
March 31, 2025*

Expended during the quarter ended
September 30, 2024

Year-to-date used at quarter end

Personnel

1,032,050

269,711

537,879

Transportation and communications

36,994

9,181

15,579

Information

14,955

1,248

2,505

Professional and special services

243,055

48,419

74,782

Rentals

53,959

6,094

11,768

Repair and maintenance

21,894

4,873

7,168

Utilities, materials and supplies

56,112

9,695

15,563

Acquisition of land, buildings and works

1,811

2,231

2,445

Acquisition of machinery and equipment

59,070

8,674

12,848

Transfer payments

1,382,418

93,353

710,961

Public debt charges

326

-

-

Other subsidies and payments

6,179

2,832

2,804

Total gross budgetary expenditures

2,908,823

456,311

1,394,300

Less Revenues netted against expenditures:

Revenues

74,555

8,469

22,677

Total Revenues netted against expenditures:

74,555

8,469

22,677

Total net budgetary expenditures

2,834,268

447,842

1,371,623

* The planned expenditures include the 2024-25 Main Estimates, allocations from Treasury Board (TB) Central Votes including the Operating and Capital budget carry-forwards. 

Departmental budgetary expenditures by Standard Object (unaudited) – Table 4

Fiscal year 2023-24 (in thousands of dollars)

Expenditures

Planned expenditures for the year ending
March 31, 2024*

Expended during the quarter ended
September 30, 2023

Year-to-date used at quarter end

Personnel

855,994

242,253

464,316

Transportation and communications

26,140

8,674

15,041

Information

16,383

1,380

2,252

Professional and special services

280,745

41,728

65,928

Rentals

47,280

6,367

10,185

Repair and maintenance

20,248

4,031

6,283

Utilities, materials and supplies

44,013

6,399

13,255

Acquisition of land, buildings and works

2,314

2,387

2,549

Acquisition of machinery and equipment

47,876

5,123

8,291

Transfer payments

1,234,197

53,764

95,917

Public debt charges

502

-

-

Other subsidies and payments

7,486

2,724

2,685

Total gross budgetary expenditures

2,583,178

374,830

686,702

Less Revenues netted against expenditures:

Revenues

75,014

10,495

24,656

Total Revenues netted against expenditures:

75,014

10,495

24,656

Total net budgetary expenditures

2,508,164

364,335

662,046

* The planned expenditures include the 2023-24 Main Estimates, allocations from Treasury Board (TB) Central Votes  including the Operating and Capital budget carry-forwards and Government-wide Initiatives.

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