Quarterly Financial Report for FCAC for the quarter ended December 31, 2019

Introduction

The Quarterly Financial Report (QFR) for the Financial Consumer Agency of Canada (FCAC, or the Agency) 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.

The Financial Consumer Agency of Canada Act (the Act) outlines FCAC’s functions and administration and enforcement powers, and lists the sections of federal laws and regulations under its supervision. A description of its program activities can be found in FCAC’s Business Plan 2019-2020.

The QFR has not been subjected to an external audit or review.

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 as set out in section 13 of the Act. 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 Agency uses the full accrual method of accounting to prepare and present its annual agency financial statements that are part of the departmental results reporting process. However, spending authorities included in this report remain on an expenditure basis.

Highlights of the fiscal quarter and the fiscal year-to-date (YTD) results

Quarterly results

FCAC’s total expenses for the three months ended December 31, 2019 totalled $6,882,039, or 70.3% of its budgeted expenses of $9,786,970 for the period, compared to 81.8% for the same period last year. The variance to budget as at December 31, 2019 of $2,904,931 is primarily due to personnel costs as a result of delays in staffing vacant positions ($1,909,898), underspending in professional services ($594,455) and to timing related to the acquisition of machinery and equipment ($161,039).

When compared to the previous year, FCAC’s total expenses for the three months ended December 31, 2019 of $6,882,039, were $534,715 or 8.4% higher than the same period last year. This increase is mainly due to higher personnel costs of $592,110 as a result of the growth of the Agency, as well as economic and merit increases.   

Year-to-date results

FCAC’s total expenses for the nine months ended December 31, 2019, totalled $21,287,607 or 75.4% of its budgeted expenses of $28,235,584 for the period, compared to 83.3% for the same period last year. The variance to budget of $6,947,977 is primarily due to personnel costs ($5,189,364) resulting from delays in staffing new positions, and lower than planned professional services ($1,910,847).

FCAC’s total expenses for the nine months ended December 31, 2019 of $21,287,607 were $3,487,590 or 19.6% higher than the same period last year. This increase is primarily due to an increase of $1,475,744 in personnel costs, $756,417 in information expenses, $754,082 in professional services expenses, and $277,728 in rentals.

Personnel costs increased by $1,475,744 due to the growth of the Agency, as well as economic and merit increases.

The increase of $756,417 in information costs is related to the advertising campaign “Take Charge of your Finances” (phase two), which focused on debt management.

Professional services costs increased by $754,082 because of the need to temporarily backfill vacant positions.

Rental expenses have increased by $277,728 as a result of the acquisition of additional space required to accommodate the Agency’s growing workforce.

Risks and uncertainties

Enterprise risk management

The environment in which FCAC operates carries an array of risks to the achievement of its mandate and objectives. While many of these challenges are always present, the extent to which they pose a risk to FCAC’s objectives varies, depending on economic and financial conditions, and the financial industry environment and its impact on financial consumers. FCAC’s ability to achieve its mandate depends on the timeliness and effectiveness with which it identifies, evaluates, prioritizes and develops initiatives to address areas where it is most at risk.

Economic, industry and supervisory environment

FCAC operates in a rapidly evolving financial marketplace, including increasingly complex financial products and new technology developed to suit the needs and demands of today’s consumers. This may impede FCAC’s ability to keep pace with this rapid rate of change.

FCAC must continue to assess the impact of these changes and be prepared to act quickly while remaining flexible. FCAC must also stay abreast of new developments and discussions, both domestically and internationally, and leverage resulting opportunities, while managing risks to ensure the continued achievement of its mandate.

Ability to deliver and diversity of external influencers

In advancing key components of its financial literacy program and the national strategy for financial literacy, FCAC relies heavily on a diverse network of partners and stakeholders from the public, private and not-for-profit sectors, and seeks to develop sound, strategic and credible alliances. Each partner and stakeholder may have its own organizational interests and goals, which may differ from those of FCAC. The Agency will continue to cultivate program development partnerships and maintain optimal approaches to ensure common goals are achieved.

Financial risks

Financial risks, primarily liquidity and credit risks, are closely managed and continue to be rated low.

Changes to consumer protection framework

FCAC is continuing to assess the impacts of the amendments provided for in Bill C-86—the Budget Implementation Act, 2018, No. 2 — to the Financial Consumer Agency of Canada Act and the Bank Act that introduce a new financial consumer protection framework and provide the Commissioner with additional enforcement powers. It is also working to implement these changes and make necessary adjustments to its supervisory approach and its structure, resources, systems and processes to ensure that it can be effective in this regard.

Significant changes in operations, personnel and programs

There were no significant changes in Operations, Personnel and Programs during the quarter ended December 31, 2019.

Approved by:

Judith Robertson
Commissioner
Financial Consumer Agency of Canada

Werner Liedtke, CPA, CMA
Chief Financial Officer
Financial Consumer Agency of Canada

February 13, 2020

Statement of authorities (unaudited)

Fiscal year 2019-2020
Authority Total available for use for the year ending March 31, 2020 Used during the quarter ended December 31, 2019 Year-to-date used at quarter end
Payments under Section 13 of the Financial Consumer Agency of Canada Act $38,402,738 $6,881,963 $21,287,371
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 236 76 236
Total authorities $38,402,974 $6,882,039 $21,287,607
Fiscal year 2018-2019
Authority Total available for use for the year ending March 31, 2019 Used during the quarter ended December 31, 2018 Year-to-date used at quarter end
Payments under Section 13 of the Financial Consumer Agency of Canada Act $29,266,795 $6,347,034 $17,799,727
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 509 290 290
Total authorities $29,267,304 $6,347,324 $17,800,017

Note: Totals may not add due to rounding

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2019-2020
Expenditures Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended December 31, 2019 Year-to-date used at quarter end
Personnel $26,007,877 $4,737,481 $14,268,323
Transportation and communications 843,817 155,154 368,096
Information 768,640 99,367 1,358,970
Professional and special services 7,313,521 1,137,571 3,103,935
Rentals 2,043,238 399,767 1,212,004
Repair and maintenance 11,300 86,509 235,055
Utilities, materials and supplies 55,436 9,637 51,564
Acquisition of land, buildings and works 350,000 - -
Acquisition of machinery and equipment 804,045 64,972 612,384
Other subsidies and payments 205,100 191,581 77,278
Total gross budgetary expenditures $38,402,974 $6,882,039 $21,287,607

Note: Totals may not add due to rounding

Fiscal year 2018-2019
Expenditures Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended December 31, 2018 Year-to-date used at quarter end
Personnel $26,104,966 $4,145,371 $12,792,579
Transportation and communications 662,411 178,100 406,711
Information 851,140 528,217 602,553
Professional and special services 4,954,301 886,257 2,349,853
Rentals 1,493,397 337,825 934,276
Repair and maintenance 61,936 334 670
Utilities, materials and supplies 52,509 15,662 46,653
Acquisition of land, buildings and works 350,000 - -
Acquisition of machinery and equipment 616,644 257,259 615,550
Other subsidies and payments 120,000 (1,701) 51,172
Total gross budgetary expenditures $29,267,304 $6,347,324 $17,800,017

Note: Totals may not add due to rounding

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