Quarterly Financial Report for the quarter ended December 31, 2013
This 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 Treasury Board. This quarterly report should be read in conjunction with the Main Estimates, the Supplementary Estimates (A) and (B), the Quarterly Financial Reports for First Quarter – ending June 30th, 2013 and Second Quarter – ending September 30th, 2013 as well as the Canada's Economic Action Plan 2012 (Budget 2012).
A summary description of the Citizenship and Immigration Canada (CIC) programs may be found in Part II of the Main Estimates.
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 (A) and (B) for the 2013–14 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.
As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1st, preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29th, 2012, after the tabling of the Main Estimates on February 28th, 2012. As a result, the measures announced in Budget 2012 could not be reflected in the 2012–13 Main Estimates.
In fiscal year 2012–13, frozen allotments were established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In 2013–14, changes to departmental authorities related to Budget 2012 were reflected in the 2013–14 Main Estimates tabled in Parliament.
Citizenship and Immigration Canada prepares its annual departmental financial statements that are part of the departmental performance reporting process, on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.
As of July 2nd, 2013, the department assumed responsibility for Passport Canada which operates under a revolving fund and is included in the statutory authorities in the accompanying Statement of Authorities. Passport Canada (PPT) is expected to be financially viable, meaning that the full cost of its operations should be equal to its revenues over a business cycle. To support any temporary deficit, PPT has a drawdown authority by which the aggregate of expenditures incurred within the fund may exceed the revenues.
This quarterly report has not been subject to an external audit or review.
2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results
CIC's 2012–13 authorities represent the total Main Estimates, the Supplementary Estimates (A) and (B) and the Operating Budget Carry Forward, whereas 2013–14 includes the amounts in the Main Estimates, the Supplementary Estimates (B) and the Operating Budget Carry Forward. CIC did not request authorities through Supplementary Estimates (A) in 2013–14.
Significant Changes to Authorities
As reflected in the Statement of Authorities, Citizenship and Immigration Canada's total budgetary authorities available for use in fiscal year 2013–14 increased by approximately $154 million (10%), when compared to the same quarter in 2012–13. This is comprised of an increase of $30 million (5%) in Vote 1 – Operating Expenditures, a decrease of $9 million (1%) in Vote 5 – Grants and Contributions and an increase of $133 million in Statutory Authorities.
Vote 1 – Operating Expenditures
The Department's Vote 1 net increase of $30 million or 5% is explained as follows:
- Increases of $82 million related to:
- Funding to continue work on the inclusion of biometrics in the temporary visa stream ($31 million);
- Funding to support the sharing of immigration information with the United States ($13 million);
- Adjustment of funding previously transferred to the Department of Foreign Affairs, Trade and Development Canada for departmental staff at missions abroad ($12 million);
- Funding to implement the Electronic Travel Authorization system, in support of the Perimeter Security and Economic Competitiveness Action Plan ($8 million);
- Funding related to collective agreements ($5 million);
- Paylist Expenditures ($4 million);
- Operating Budget Carry Forward from 2012-13 ($2 million);
- Funding to modernize the immigration system and manage backlogs ($2 million);
- Funding to eliminate the backlog of certain Federal Skilled Worker applications ($2 million);
- Funding to manage immigration cases involving classified information (Security Certificates) ($1 million);
- Funding to support the amendment to the Immigration and Refugee Protection Regulations that removes visa exemptions for citizens of five countries ($1 million); and,
- Funding to support the collection and sharing of entry/exit information under the Perimeter Security and Economic Competitiveness Action Plan ($1 million).
- Decreases of $52 million associated with the following:
- Savings identified as part of the Budget 2012 Spending Review ($21 million);
- Funding for the reform of Canada's refugee determination system ($13 million);
- Temporary Resident Visa for Mexico ($7 million);
- Interim Federal Health Program ($5 million);
- Other transfers and adjustments ($4 million); and,
- Sunsetting of Official Languages Action Plan ($2 million).
Vote 5 – Grants and Contributions (G&C)
The Department's Vote 5 net decrease of $9 million or 1% is explained as follows:
- Increases of $7 million related to:
- Funding to combat human smuggling – Global Assistance of Irregular Migrants (GAIM) ($3 million);
- Funding to the Grant for the Canada-Quebec Accord on Immigration ($2 million); and,
- Internal re-allocation to reduce the amount of new appropriation required ($2 million).
- Decreases of $16 million associated with the following:
- Savings identified as part of the Budget 2012 Spending Review ($12 million); and,
- Sunsetting of the Community Historical Recognition Program (CHRP) ($4 million).
Budgetary Statutory Authorities
The 2013–14 statutory authorities level in the third quarter is significantly higher than 2012–13 by $133 million which is mainly related to funding for the return of fees for certain terminated Federal Skilled Worker applications ($63 million) and the anticipated deficit ($70 million), as established by the Department of Foreign Affairs, Trade and Development Canada, for the Passport Canada Revolving Fund, prior to its transfer. The Passport Program was transferred to CIC on July 2nd, 2013 and CIC's Budgetary Statutory Authorities in the third quarter, ending December 31st, 2013, included the authorities associated with that program.
Significant Changes to Departmental Budgetary Expenditures by Standard Object
As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, compared to the previous year, the total net budgetary expenditures in the third quarter, ending December 31st, 2013, have decreased by $50 million or 14%, from $350 million to $300 million. This difference is for the most part explained by:
- an increase in revenues of $138 million in Passport Respendable Revenue;
- an increase of $54 million in Personnel expenditures;
- an increase of $8 million in Other Subsidies and Payments;
- an increase of $2 million in Professional and Special Services;
- a decrease of $4 million under Transfer Payments; and,
- an increase of $27 million in other standard objects related to the integration of the Passport Program.
As previously stated, accountability for the Passport Program was transferred to the Minister of Citizenship and Immigration Canada as of July 2nd 2013. Authorities, as well as expenses and revenues from the date of the transfer, are now included in CIC's financial tables.
For the Passport Program, the third quarter demonstrates expenditures of $83 million as well as revenues of $138 million resulting in a surplus of $55 million in the Revolving Fund of this program.
The increase of $54 million in Personnel expenditures can be mainly explained by the integration of the Passport Program ($47 million) and an increase related to CIC regular business ($7 million). This increase is mainly attributable to newly funded initiatives such as the Perimeter Security and Economic Competitiveness Action Plan, Roadmap for Canada's Official Languages 2013–2018 and an increase in capacity to address projected demand in the Citizenship and Temporary Resident programs.
With respect to the increase of $8 million in Other Subsidies and Payments expenditures, this is mainly explained by two components: an increase in Federal Skilled Worker fees returned in connection with terminated applications ($9 million) and a decrease of previous year's revenue ($1 million) for refunds in all other lines of business.
Professional and Special Services expenditures increased overall by $2 million, which can be explained as follows: an increase of $8 million related to the integration of the Passport Program and a net decrease of $6 million for CIC regular business. The decrease results from a reduction in Legal Services expenditures of $4 million and a reduction in Interim Federal Health Program (IFHP) expenditures of $2 million.
The decrease of $4 million in expenditures for Transfer Payments (Vote 5) is mainly attributable to a timing difference in the monthly payments to the province of British Columbia ($9 million), an increase in spending resulting from the repatriation of settlement services to CIC in Manitoba ($8 million), a decrease due to the sunsetting of CHRP ($1 million) and a decrease due to slightly slower spending in other CIC programs ($2 million).
Other expenditure variances are mainly related to the integration of the Passport Program, with minimal variance derived from CIC's business lines as follows: an increase of $22 million for Utilities, Materials and Supplies (mainly costs for the passport booklet), an increase of $6 million for Rentals, an increase of $5 million for Acquisition of Machinery and Equipment, an increase of $1 million for Information, and a decrease of $6 million for Transportation and Communications, for a total increase of $27 million.
As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, CIC's year-to-date expenditures (less Revenues Netted against Expenditures) at the end of the third quarter were $993 million compared to $1,093 million as of December 31st, 2012. This represents a total net budgetary authority of 57% that is available for use for the year ending on March 31st, 2014. A similar percentage (68%) was used at quarter-end last year. The variance is mainly explained by the integration of the Passport Program.
3. Risks and Uncertainties
CIC is funded through annual appropriations. As a result, its operations can be impacted by any changes approved by Parliament. This departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 20th, 2013.
Unforeseen Events and Natural Disasters
Unforeseen events and natural disasters may have significant effects on CIC's operations and reputation. They can affect CIC directly when they occur in places where our offices and employees are located.
As a result of the flooding in Southern Alberta in June 2013, as well as the tragic explosion and fire in Lac-Mégantic in July 2013, passports and other documents belonging to temporary residents, permanent residents and Canadian citizens may have been lost, damaged or destroyed. To support affected residents, the Minister approved special measures to waive some fees and other specific requirements for both temporary and permanent residents as well as Canadian citizens until September 19th, 2013 for the flooding and October 5th, 2013 for Lac-Mégantic. These special measures include waiving fees for the replacement of: permanent resident cards, Canadian passports, work permits, study permits and visitor records.
Unforeseen events and natural disasters can also affect CIC indirectly in instances when the Department is required, for humanitarian or legal reasons, to facilitate travel of foreign nationals or Canadian victims by processing applications for visas or other necessary documents.
Lack of a planned, timely and coordinated response between CIC and our national or international partners in any such event could have serious, negative impacts on our operations, program delivery and financial condition. In addition, implementation of response plans can take resources away from planned priorities and activities, thereby diminishing our capacity to deliver on commitments, service standards, processing targets and strategies.
To mitigate, CIC continues to:
- Improve security, emergency and business continuity plans and practices as they relate to CIC offices and employees; and,
- Review and develop flexible policies and procedures to ensure a timely and coordinated emergency response for unexpected world events that could place extra burden on CIC's program delivery.
Foreign Service Officers – Withdrawal of Service
The Professional Association of Foreign Service Officers (PAFSO) union members, responsible for processing visa applications, walked out of offices in Canada and overseas during Spring and Summer 2013. Contingency plans were in place to ensure all offices remained open and provided a minimum level of service. Processing priority was given to urgent applications with humanitarian considerations, as well as temporary visas.
On September 26th, 2013 the PAFSO announced that a tentative agreement had been reached with the Treasury Board of Canada to end the six-month labour dispute which was signed on December 4th, 2013.
4. Significant changes in relation to operations, personnel and programs
On July 2nd, 2013, responsibility for the Passport Program was transferred to the Minister of CIC, with service delivery abroad continuing to be provided by DFATD and service delivery in Canada provided by Service Canada. Over the summer months, some groups at Passport Canada were integrated directly within CIC. As a result, some reporting relationships changed. Work continues to determine how many employees who provide internal services are required to support operational functions transferred to Service Canada, and how many are required to support functions transferred to CIC. The final transfer of employees to Service Canada will take place by April 1st, 2014.
International Experience Canada Program
On August 31st, 2013, Citizenship and Immigration Canada became responsible for the International Experience Canada (IEC) program, which had previously been the responsibility of the Department of Foreign Affairs, Trade and Development (DFATD).
This program provides opportunities for Canadians and non-Canadians, aged 18-35, to travel and gain work experience in other countries for up to two years. These exchanges occur largely through bilateral youth mobility arrangements and agreements Canada has with countries around the world.
The transfer of the IEC program allows better alignment with government priorities and labour market demands in Canada. Linking IEC to other immigration programs strengthens Canada's strategy to develop its human capital and attract talent.
Moving the program to CIC provides an opportunity to take advantage of the department's existing expertise in centralized electronic processing of work permits for this program. In addition, CIC will become the one-stop shop for applicants by streamlining the application process for IEC participants at one federal government department. As a result of the transfer, there is no interruption in service to applicants.
The IEC program is funded by a net vote structure. Each participant is charged a $150 participation fee, which is being used to process the applications. With the transfer of the program, CIC has sought revenue respending authority, which is expected to be granted upon Royal Assent of the 2013-2014 Supplementary Estimates C.
Key Senior Personnel
Effective December 16th, 2013, Stefanie Beck was appointed Associate Deputy Minister, Corporate Services, for the Department.
5. Budget 2012 Implementation
This section provides an overview of savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.
In fiscal year 2012-13 (the first year of Budget 2012 implementation), CIC achieved savings of $26.5 million: $2.3 million from Inter-Action Multiculturalism Projects and $24.2 million from Interim Federal Health Program (IFHP) reform. Through IFHP reform, CIC is ensuring beneficiaries do not receive benefits that are more generous than what Canadians receive through taxpayer-funded benefit programs and that the benefits provided through the program continue to protect public health and safety.These savings are realized from funding which is normally accessed through Supplementary Estimates.
For fiscal year 2013-14, savings increased to $59.0 million; with $24.5 million attributable to the continued reform of the Interim Federal Health Program (IFHP). For the remaining $34.5 million, CIC's authorities in the Main Estimates for 2013–14 have been reduced as follows:
Vote 1 – Operating Expenditures ($21 million) and Statutory Employee Benefit Plan Costs ($1.8 million), for a total of $22.8 million
- $16.7 million – Reducing the number of CIC offices in Canada and overseas by implementing a more integrated, modernized and centralized working environment;
- $3.5 million – Reducing the number of regional headquarters;
- $2.0 million – Reductions in back office costs; and,
- $0.6 million – Elimination of subsidies to Provinces and Territories for participation in promotional and recruitment activities associated with the Strategic Plan to Foster Immigration to Francophone Minority Communities.
Vote 5 – Grants and Contributions $11.7 million
- $5.7 million – Elimination of federal contributions to Provinces and Territories relating to maintenance of Immigration Portals;
- $3.3 million – Efficiencies through implementation of the modernized settlement program resulting in more coherent and constructive programming;
- $2.3 million – Reduction of planned spending under the Multiculturalism Program Inter-Action; and,
- $0.4 million – Changing the ratio of government-assisted refugees (GAR) to privately sponsored refugees.
The service impact of Budget 2012 was mitigated through the ongoing modernization of CIC's processing network. This modernization is being achieved through various measures including the deployment of the Global Case Management System to all overseas and in-Canada offices, the ongoing implementation of e-applications, a growing visa application centre network, the centralization of some overseas processing in Canada, and improved online information and tools. Service levels at CIC are primarily measured through service standards and processing times, which CIC posts and regularly updates on its Web site.
It is anticipated that by 2014–15, CIC will achieve an ongoing savings of $71.2 million from the IFHP reform and staff reductions.
Statement of Authorities
(in thousands of dollars)
|Fiscal Year 2013-2014||Fiscal Year 2012-2013|
|Total available for use for the year ending March 31, 2014 Footnote 1 Footnote 2||Used during the quarter ended Footnote 3
December 31, 2013
|Year-to-date used at quarter-end Footnote 3||Total available for use for the year ending March 31, 2013 Footnote 1||Used during the quarter ended December 31, 2012||Year-to-date used at quarter-end|
|Vote 1 - Operating Expenditures||605,640||123,077||355,056||576,002||122,826||351,007|
|Vote 5 - Grants and Contributions||952,946||208,048||686,353||961,604||211,570||691,920|
|Vote 9 - Debt Write-off||0||0||0||442||0||0|
|Budgetary Statutory Authorities|
|Contributions to Employee Benefit Plans||58,210||14,340||43,020||56,839||14,202||42,621|
|Minister's Salary and Motor Car Allowance||79||11||60||78||19||58|
|Fees Returned in Connection with a Terminated Application||63,800||9,521||21,070||0||0||0|
|Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets||36||4||5||36||2||2|
|Refunds of Previous Years Revenue||5,701||(531)||5,701||7,753||1,902||7,753|
|Passport Office Revolving Fund||70,373||(54,764)||(118,579)||0||0||0|
|Total Budgetary Authorities||1,756,803||299,708||992,705||1,602,784||350,536||1,093,391|
|Non-Budgetary Authorities||70,528||Footnote 4 (264)||(1,357)||70,960||Footnote 4 2,417||(2,769)|
Departmental Budgetary Expenditures by Standard Object
|(in thousands of dollars)||Fiscal Year 2013-2014||Fiscal Year 2012-2013|
|Planned expenditures for the year ending March 31, 2014Footnote 5||Expended during the quarter ended December 31, 2013Footnote 6||Year-to-date used at quarter-end Footnote 6||Planned expenditures for the year ending March 31, 2013||Expended during the quarter ended December 31, 2012||Year-to-date used at quarter-end|
|Transportation and Communications||70,962||(618)||28,264||32,163||4,884||11,248|
|Professional and Special Services||209,752||29,935||78,635||137,933||28,437||70,556|
|Repair and Maintenance||23,427||411||858||9,260||373||834|
|Utilities, Materials and Supplies||59,788||23,374||18,774||9,524||1,923||3,441|
|Acquisition of Machinery and Equipment||17,133||5,431||10,426||12,712||909||1,673|
|Other Subsidies and Payments||72,467||9,499||27,618||8,500||1,865||8,141|
|TOTAL GROSS BUDGETARY EXPENDITURES||2,050,203||437,500||1,277,520||1,602,784||350,536||1,093,391|
|Less Revenues Netted against Expenditures|
|PPT Respendable Revenue||285,359||137,792||284,815||0||0||0|
|Revenue Credited to the Vote||8,041||0||0||0||0||0|
|TOTAL NET BUDGETARY EXPENDITURES||1,756,803||299,708||992,705||1,602,784||350,536||1,093,391|
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