Health Canada Quarterly Financial Report - For the quarter ended September 30, 2022

Table of Contents

Introduction

Health Canada is the federal department responsible for helping Canadians maintain and improve their health. In keeping with the Department's commitment to making this country's population among the healthiest in the world as measured by longevity, lifestyle and effective use of the public health care system, its main responsibilities are as a regulator, a service provider, a catalyst for innovation, a funder, and an information provider. Health Canada administers the Canada Health Act which embodies national principles to ensure a universal and equitable publicly-funded health care system. A summary of Health Canada's programs may be found in Part II of the Main Estimates.

This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act in the form and manner prescribed by the Treasury Board, and should be read in conjunction with the Main Estimates and Supplementary Estimates A.

This quarterly report has not been subject 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 Department's spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates and Supplementary 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.

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 Fiscal Quarter and Fiscal Year-to-Date Results

This quarterly financial report reflects the results of the current fiscal period in comparison to the authorities provided in the Main Estimates and Supplementary Estimates A for fiscal year 2022-23, as well as budget adjustments approved by Treasury Board up to September 30, 2022.

A. Significant Changes to Authorities

The following graph provides a comparison of net budgetary authorities available for spending at the end of each quarter of the current and previous fiscal years.

Figure 1. Comparison of Net Budgetary Authorities as at June 30 and September 30 of Fiscal Years 2021-22 and 2022-23 (in millions of dollars)

Figure 1. Comparison of Net Budgetary Authorities as at June 30 and September 30 of Fiscal Years 2021-22 and 2022-23 (in millions of dollars). Text description follows.
Figure 1 - Text Description

Bar chart showing a comparison of net budgetary authorities as at June 30 and September 30 of fiscal years 2021-22 and 2022-23 in millions of dollars.

2021-22 Authorities available as at June 30 = 4,869; 2021-22 Authorities available as at September 30 = 4,924; 2022-23 Authorities available as at June 30 = 5,687; 2022-23 Authorities available as at September 30 = 5,758.

The following table provides a comparison of total authorities available by vote at the end of the second quarter of the current and previous fiscal years.

Comparison of Authorities Available for Spending for the Year as at September 30 of Fiscal Years 2021-22 and 2022-23
Authorities available
(in millions of dollars)
2021-22 2022-23 Variance
Vote 1 – Operating expenditures 1,344 1,281 (63)
Vote 5 – Capital expenditures 20 21 1
Vote 10 – Grants and contributions 3,374 2,502 (872)
Statutory 186 1,954 1,768
Total authorities 4,924 5,758 834

Authorities available for spending in fiscal year 2022-23 were $5,758 million at the end of the second quarter as compared with $4,924 million at the end of the second quarter of 2021-22, representing a net increase of $834 million, or 17%.  This variance is primarily attributable to the following increases:

These increases in authorities are partially offset by the following decreases:

The fluctuations in authorities available for spending are most notable in the following standard objects:  Utilities, materials and supplies; Transfer payments; Professional and special services; and Personnel.  Fluctuations are also noted in authorities for revenues netted against expenditures for Rights and privileges.

B. Significant Changes in Year-to-Date Expenditures

The following graph provides a comparison of net budgetary authorities and year-to-date spending by quarter for the current and previous fiscal years.

Figure 2. Comparison of Net Budgetary Authorities and Year-to-Date Expenditures for the Quarters Ended June 30 and September 30 of Fiscal Years 2021-22 and 2022-23 (in millions of dollars)

Figure 2. Comparison of Net Budgetary Authorities and Year-to-Date Expenditures for the Quarters Ended June 30 and September 30 of Fiscal Years 2021-22 and 2022-23 (in millions of dollars). Text description follows.
Figure 2 - Text Description

Bar chart showing a comparison of net budgetary authorities and year-to-date expenditures for the quarters ended June 30 and September 30 of fiscal years 2021-22 and 2022-23 in millions of dollars.

2021-22 Net budgetary authorities = 4,924; 2021-22 Year-to-date expenditures to June 30 = 1,120; 2021-22 Year-to-date expenditures to September 30 = 1,695; 2022-23 Net budgetary authorities = 5,758; 2022-23 Year-to-date expenditures to June 30 = 554; 2022-23 Year-to-date expenditures to September 30 = 1,376.

The following table provides a comparison of year-to-date spending by vote at the end of the second quarter of the current and previous fiscal years.

Comparison of Year-to-Date Expenditures for the Quarter Ended September 30 of Fiscal Years 2021-22 and 2022-23
Year-to-date expenditures
(in millions of dollars)
2021-22 2022-23 Variance
Vote 1 – Operating expenditures 473 478 5
Vote 5 – Capital expenditures 1 2 1
Vote 10 – Grants and contributions 1,125 246 (879)
Statutory 96 650 554
Total year-to-date expenditures 1,695 1,376 (319)

At the end of the second quarter of 2022-23, total budgetary expenditures were $1,376 million compared with $1,695 million reported for the same period of 2021-22, representing a decrease of $319 million, or 19%.

There was a decrease in Vote 10 – Grants and contributions year-to-date expenditures of $879 million or 78% primarily as a result of the following offsetting factors:

Statutory year-to-date expenditures have increased by $554 million or 579% from $96 million in 2021-22 to $650 million in 2022-23, primarily as a result of the following factors:

C. Quarterly Variances

The following graph presents a comparison of quarterly spending by quarter and by fiscal year.

Figure 3. Comparison of Quarterly Expenditures for the Quarters Ended June 30 and September 30 of Fiscal Years 2021-22 and 2022-23 (in millions of dollars)

Figure 3. Comparison of Quarterly Expenditures for the Quarters Ended June 30 and September 30 of Fiscal Years 2021-22 and 2022-23 (in millions of dollars). Text description follows.
Figure 3 - Text Description

Bar chart showing a comparison of quarterly expenditures for the quarters ended June 30 and September 30 of fiscal years 2021-22 and 2022-23 in millions of dollars.

2021-22 Expenditures for the quarter ended June 30 = 1,120; 2021-22 Expenditures for the quarter ended September 30 = 575; 2022-23 Expenditures for the quarter ended June 30 = 554; 2022-23 Expenditures for the quarter ended September 30 = 821.

Expenditures in the second quarter of fiscal year 2022-23 were $821 million compared with $575 million for the second quarter of 2021-22, representing an increase of $246 million or 43% in quarterly spending.

The increase in quarterly spending is primarily due to the following factors:

Risks and Uncertainties

Health Canada operates in a complex and dynamic environment, facing several challenges as it works to deliver results for Canadians. Many of these challenges – such as the COVID-19 pandemic, global supply chain issues, and the opioid overdose crisis – are beyond the sole control of the Department and involve working collaboratively with federal partners, provinces and territories, Indigenous organizations, industry and international regulators.

Health Canada regulates health products and controlled substances and supports innovation and information sharing in Canada's health system to help Canadians maintain and improve their health. The Department also provides national leadership to foster sustainable health care systems that ensure access for Canadians to appropriate and effective health care. Health Canada's priorities continue to focus on how government investments can protect the health and safety of Canadians. As such, there are corporate and program risks related to the rapid delivery of government commitments, programs and services.

Health Canada uses a risk management framework and tools, and maintains a comprehensive and up-to-date Corporate Risk Profile, to support risk-based decision-making. The Department closely monitors its environment and operations to manage its corporate risks, ensures appropriate mitigation strategies are in place, and allocates and reallocates resources, as required. Sound risk management also supports effective service delivery, better project management, an increase in value for money, and ultimately better results for Canadians.

The Department manages risks and uncertainty through effective engagement across the organization with agile and sound governance structures, as well as long-term planning. The executive-level committee on Finance, Investment Projects and Transformation recommends overall direction for financial management and control, and ensures alignment of investments with departmental strategies and transformation initiatives.

As we emerge from the pandemic, Health Canada will closely monitor departmental risks associated with COVID-19, as well as its environment and operations, ensure appropriate mitigation strategies are in place, and effectively deliver results.

Significant Changes in Relation to Operations, Personnel and Programs

There have been no significant changes in relation to operations, personnel and programs during this quarter.

Approved by:

Original signed by Stephen Lucas
Stephen Lucas
Deputy Minister
Ottawa, Canada
Date:  November 16, 2022

Original signed by Serena Francis
Serena Francis
Assistant Deputy Minister and Chief Financial Officer
Ottawa, Canada
Date:  November 15, 2022

Statement of Authorities (unaudited)

Fiscal year 2022-23 (in thousands of dollars)
Authority Total available for use for the year ending
March 31, 2023Table 3 footnote *
Used during the quarter ended
September 30, 2022
Year-to-date used at quarter-end
Vote 1 – Operating expenditures 1,281,077 298,814 477,416
Vote 5 – Capital expenditures 21,366 1,851 2,360
Vote 10 – Grants and contributions 2,501,521 99,824 246,235
(S) Contributions to employee benefit plans 112,317 28,079 56,158
(S) Minister of Health – Salary and motor car allowance 93 46 92
(S) Collection agency fees 46 21 46
(S) Spending of proceeds from the disposal of surplus Crown assets 567 313 447
(S) Spending of revenues pursuant to section 4.2 of the Department of Health Act 51,463 15,666 20,366
(S) Payments for expenses in relation to COVID-19 tests 1,789,123 376,770 572,550
Total authorities 5,757,573 821,384 1,375,670

(S) – Statutory Vote

Fiscal year 2021-22 (in thousands of dollars)
Authority Total available for use for the year ending
March 31, 2022Table 4 footnote *
Used during the quarter ended
September 30, 2021
Year-to-date used at quarter-end
Vote 1 – Operating expenditures 1,343,500 281,801 473,203
Vote 5 – Capital expenditures 20,272 739 1,044
Vote 10 – Grants and contributions 3,374,407 232,367 1,125,117
(S) Contributions to employee benefit plans 133,758 28,438 56,876
(S) Minister of Health – Salary and motor car allowance 90 22 45
(S) Collection agency fees 2 1 2
(S) Spending of proceeds from the disposal of surplus Crown assets 148 - -
(S) Spending of revenues pursuant to section 4.2 of the Department of Health Act 51,463 31,838 38,811
Total authorities 4,923,640 575,206 1,695,098

(S) – Statutory Vote

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2022-23 (in thousands of dollars)
Standard Object Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended September 30, 2022 Year-to-date used at quarter-end
Expenditures:
Personnel 888,152 283,309 489,614
Transportation and communications 7,069 1,780 2,667
Information 27,443 5,171 6,980
Professional and special services 140,115 69,790 117,033
Rentals 13,517 7,367 11,893
Repair and maintenance 9,774 2,888 5,053
Utilities, materials and supplies 2,351,976 376,891 570,183
Acquisition of land, buildings and works 2,575 44 69
Acquisition of machinery and equipment 28,616 4,530 10,083
Transfer payments 2,501,521 99,824 246,235
Other subsidies and payments 3,967 2,361 3,589
Total gross budgetary expenditures 5,974,725 853,955 1,463,399
Less revenues netted against expenditures:
Rights and privileges 55,297 1,415 6,603
Services of a non-regulatory nature 31,815 14,287 16,723
Services of a regulatory nature 124,341 16,869 64,403
Services to other government departments 5,699 - -
Total revenues netted against expenditures 217,152 32,571 87,729
Total net budgetary expenditures 5,757,573 821,384 1,375,670
Fiscal year 2021-22 (in thousands of dollars)
Standard Object Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended September 30, 2021 Year-to-date used at quarter-end
Expenditures:
Personnel 1,024,378 274,066 477,621
Transportation and communications 19,043 2,808 3,606
Information 34,830 22,503 31,607
Professional and special services 562,737 60,180 97,762
Rentals 16,062 7,180 12,232
Repair and maintenance 28,104 2,842 4,662
Utilities, materials and supplies 19,837 10,535 24,355
Acquisition of land, buildings and works 3,056 127 396
Acquisition of machinery and equipment 26,548 3,058 6,015
Transfer payments 3,374,407 232,366 1,125,116
Other subsidies and payments 12,437 3,780 5,175
Total gross budgetary expenditures 5,121,439 619,445 1,788,547
Less revenues netted against expenditures:
Rights and privileges 45,064 1,756 6,684
Services of a non-regulatory nature 30,802 14,523 17,313
Services of a regulatory nature 116,234 27,960 69,452
Other fees and charges 5,699 - -
Total revenues netted against expenditures 197,799 44,239 93,449
Total net budgetary expenditures 4,923,640 575,206 1,695,098

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