Management Statement of Risks and Significant Changes in Operations, Personnel and Programs (2011-2012, Q3)

For the Quarter Ended December 31, 2011


The Canadian Environmental Assessment Agency (the Agency) 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 Treasury Board under the Treasury Board Accounting Standard (TBAS 1.3). This report should be read in conjunction with the Main Estimates, and Supplementary Estimates.

This report has not been subject to an external audit or review.

The Canadian Environmental Assessment Act (the Act) establishes the requirements for the environmental assessment (EA) of projects, and the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals (the Cabinet Directive) sets out the EA requirements for those types of decisions. The Agency plays key roles in delivering and supporting assessments under the Act and under the Cabinet Directive.

The Act sets out three main types of EA for proposed projects: screenings, comprehensive studies and assessments by review panels. The Agency advises and assists the Minister of the Environment in establishing review panels and supports panels in their work. The Agency conducts most comprehensive studies and manages screenings for major resource projects. For review panels, and for the comprehensive studies and screenings for which it is responsible, the Agency integrates the Government of Canada's Aboriginal consultation activities into the EA process to the greatest extent possible.

The Agency was established in 1994 and is led by the President, who reports directly to the Minister of the Environment. The Agency has its headquarters in Ottawa and regional offices in Halifax, Québec, Toronto, Winnipeg, Edmonton and Vancouver.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency's spending authorities granted by Parliament and those used by the Agency consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2011-2012 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 moneys 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 Agency uses the full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of Fiscal Quarter and Fiscal Year to Date Results

This section highlights the significant items that contributed to the changes in resources available for the year and actual expenditures for the quarter ended December 31.

Figure 1. outlines the net budgetary authorities which represent the resources available for the year as of December 31. These authorities are net amounts of the revenue which is expected to be collected.

Figure 1: Third Quarter Expenditures Compared to Annual Authorities

The Agency's 2011-2012 authorities have increased by approximately $2.1 million from the previous year. The increase is attributable to a reprofile of funding available for transfer payments from the 2010-2011 fiscal year.

The Agency’s year-to-date spending has increased by $0.9 million compared to 2010-2011. This increase is attributable to increases in expenditures of $1.5 million relating to salaries and employee benefit plan, and of $0.5 million relating to transfer payments, and is offset by a $0.5 million decrease in operating costs and a $0.6 million increase in revenues.

Risks and Uncertainties

The Agency is funded through annual appropriations. As a result, its operations are impacted by any changes in funding approved through Parliament. Presently, the Agency has two sunsetting initiatives which expire by the end of fiscal year 2011-2012. The impact is a budget reduction of approximately fourty-three percent. Currently, the Agency is in discussion with central agencies to renew this funding.

Also, the Agency’s expenditures are influenced by the number of environmental assessments conducted during any given fiscal year and is heavily influenced by economic conditions outside the control of the Agency. To offset portions of its expenditures, the Agency has vote-netted authority to recover certain costs from proponents in the conduct of review panels.

In accordance with the Federal Accountability Act (FAA), the Minister is authorized to prescribe by order the charges to be paid by the proponent during the course of an environmental assessment conducted by a review panel.These charges are prescribed in the 1998 Environmental Assessment Review Panel Service Charges Order (the Order).

The current Order only covers approximately seventy percent of all costs incurred by the Agency. A strategy to revise the Order is currently being addressed.

Significant Changes in Relation to Operations, Personnel and Programs

In 2010, amendments to the Act through the Jobs and Economic Growth Act made the Agency legally responsible for the conduct of all comprehensive study environmental assessments except for projects regulated by the Canadian Nuclear Safety Commission and the National Energy Board.

Approved by:

_____Original signed by_____
Elaine Feldman, President
Ottawa, Canada
February 17, 2011

_____Original signed by_____
Richard Gagné, Chief Financial Officer
Ottawa, Canada
February 17, 2011

Statement of Authorities (unaudited)

  Fiscal Year 2011-2012 (in dollars) Fiscal Year 2010-2011 (in dollars)
Total Available for Use for the Year Ending March 31, 2012 Used During the Quarter Ended December 31, 2011 Year to Date Used at Quarter-end Total Available for Use for the Year Ending March 31, 2011 Used During the Quarter Ended December 31, 2010 Year to Date Used at Quarter-end
VOTE 15 – Net Operating Expenditures $ 31,437,645 $ 6,677,273 $ 17,590,561 $ 29,566,260 $ 6,402,050 $ 16,878,936
Statutory Authorities – Employee Benefits $ 2,872,435 $ 718,109 $ 2,154,327 $ 2,654,634 $ 884,878 $ 1,990,976
Total Authorities $ 34,310,080 $ 7,395,382 $ 19,744,888 $ 32,220,894 $ 7,286,928 $ 18,869,912

Agency Budgetary Expenditures by Standard Object (unaudited)

(in dollars) Fiscal Year 2011-2012 Fiscal Year 2010-2011
Planned Expenditures for the Year Ending March 31, 2012 Expended During the Quarter Ended December 31, 2011 Year to Date Used at Quarter-end Planned Expenditures for the Year Ending March 31, 2011 Expended During the Quarter Ended December 31, 2010 Year to Date Used at Quarter-end
Personnel $ 19,893,171 $ 5,910,171 $ 17,103,272 $ 20,369,394 $ 5,415,556 $ 15,651,365
Transportation and Telecommunications $ 3,170,167 $ 336,581 $ 954,349 $ 2,672,948 $ 374,474 $ 988,921
Information $ 752,467 $ 69,337 $ 258,557 $ 296,071 $ 60,253 $ 163,757
Professional Services $ 10,338,281 $ 778,601 $ 2,005,517 $ 10,326,046 $ 1,352,177 $ 2,652,182
Rentals $ 800,037 $ 75,509 $ 242,755 $ 633,503 $ 47,129 $ 234,010
Purchased Repair and Maintenance $ 95,606 $ 8,367 $ 31,024 $ 85,270 $ 820 $ 1,077
Utilities, Materials and Supplies $ 234,179 $ 63,139 $ 175,694 $ 173,600 $ 4,180 $ 100,358
Acquisition of Machinery and Equipment $ 712,172 $ 67,504 $ 111,214 $ 1,050,062 $ 23,344 $ 84,858
Transfer Payments $ 6,315,000 $ 361,872 $ 1,538,567 $ 4,615,000 $ 256,922 $ 1,066,167
Other Expenses $ 0 $ 2,678 $ 20,167 $ 0 $ 1,076 $ 3,838
Total Gross Budgetary Expenditures $ 42,311,080 $ 7,673,759 $ 22,441,116 $ 40,221,894 $ 7,535,931 $ 20,946,533
Less Revenues Netted Against Expenditures
Environmental Assessment and Training Services -$ 8,001,000 -$ 278,377 -$ 2,696,228 -$ 8,001,000 -$ 941,193 -$ 2,076,621
Total Revenues Netted Against Expenditures -$ 8,001,000 -$ 278,377 -$ 2,696,228 -$ 8,001,000 -$ 249,003 -$ 2,076,621
Total Net Budgetary Expenditures $ 34,310,080 $ 7,395,382 $ 19,744,888 $ 32,220,894 $ 7,286,928 $ 18,869,912
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