Quarterly Financial Report for the quarter ended December 31, 2016
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 2016–17 Main Estimates, the 2016-17 Supplementary Estimates (A), the 2016-17 Supplementary Estimates (B) and the 2015–16 Quarterly Financial Report for the quarter ended December 31, 2015.
A summary description of the Immigration, Refugees and Citizenship Canada (IRCC) 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, Supplementary Estimates (A) and Supplementary Estimates (B) for the 2016–17 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.
Immigration, Refugees and Citizenship 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.
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
In 2016-2017, IRCC’s total authorities includes the Main Estimates, items sought through the Supplementary Estimates (A), the Supplementary Estimates (B), the approved Operating Budget Carry Forward from 2015-16, the reprofile of some initiatives approved by Finance Canada and minor adjustments related to statutory items. It is to be noted that in 2015-2016, IRCC did not have any items being sought through the Supplementary Estimate A process.
Significant Changes to Authorities
As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2016–17 increased by approximately $42 million (2%) when compared to the same quarter in 2015–16. This is comprised of:
- a decrease of $72 million (10%) in Vote 1 – Operating Expenditures
- an increase of $13 million in Vote 5 – Capital Expenditures as it was created on April 1st, 2016
- an increase of $117 million (11%) in Vote 10 – Grants and Contributions
- a decrease of $16 million (18%) in Statutory Authorities.
The most significant variation to the department’s authorities as provided above is the funding received through Supplementary Estimates B in 2015-16 and in 2016-17 to support settlement of 25,000 Syrian refugees, the funding received to expand the government’s commitment for the settlement of an additional 10,000 Government Assisted Syrian Refugees (GAR) and the funding received to reduce processing times and support the increase of Immigration Levels as approved in Budget 2016. Therefore, the Government response to the Syrian refugee crisis as well as Budget 2016 initiatives have a significant impact on the fluctuation of funding available in the year-over-year quarter analysis.
Vote 1 – Operating Expenditures
The Department’s Vote 1 – Operating Expenditures decrease of $72 million (10%) is explained as follows:
- Increases of $116 million attributable to:
Additional Funding of $115 million for:
- The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Syrians ($39 million);
- The Labour Market Impact Assessment/International Mobility program (LMIA/IMP) where 2015-16 funding was not included in the 2015-16 QFR3 as funding was in Supplementary Estimates C ($28 million);
- The reduction of processing times and increase of processing to support increased 2016 levels for immigration ($21 million);
- The Biometric Expansion project to verify the identity of all visa-required travelers seeking entry to Canada ($14 million);
- Operating Budget Carry Forward increase from previous year ($3 million);
- The increase in funding profile related to the processing of Citizenship and Temporary Resident applications to keep up with increased volume demand ($3 million);
- The management and protection of classified information in assessing applications under the Immigration and Refugee Protection Act (IRPA) ($2 million);
- Net impact of approved reprofile within various projects ($2 million);
- New initiatives for the Electronic Travel Authorization expansion project (eTA 2.0) ($1 million);
- The improvement of healthcare for detainees through the National Immigration detention framework ($1 million); and
- Other minor adjustments ($1 million).
Transfer increasing IRCC’s Vote 1 - Operating from:
- The Canada Border Services Agency to reflect the realignment of responsibilities in the International Liaison Network activities (1$ million).
- Decreases of $188 million attributable to:
Decrease of $152 million in Funding for:
- Work that was achieved in relation to the Government’s initial response to the Syrian Refugee Crisis - Settlement of 25,000 Syrians ($143 million)
- The 2015 Pan American and Parapan American games ($3 million);
- The Government Advertising Campaigns ($3 million);
- The completion of Information Sharing initiative ($2 million); and
- The completion of Refugee Reform implementation ($1 million).
Transfers decreasing IRCC’s Vote 1 - Operating totaling $36 million to:
- IRCC’ Vote 5 - Capital, for the creation of IRCC’s Capital Vote as of April 1, 2016 and to fund the development of IRCC’s Grants and Contributions System and other minor capital projects ($18 million);
- The Department of Global Affairs Canada for common services abroad to support staff abroad and overseas’ operations ($11 million);
- The Department of Canadian Heritage for the transfer of responsibility for the Multiculturalism Program following the change in government machinery announced in the fall of 2015 ($5 million);
- The Department of Innovation, Science and Economic Development Canada – Syrian refugee crisis ($1 million); and
- Other - Miscellaneous transfers ($1 million).
Vote 5 – Capital Expenditures
The Department’s Vote 5 – Capital Expenditures net increase of $13 million is explained as follows:
- Increases of $19 million attributable to:
Additional Funding of $1 million for:
- New initiatives for the Electronic Travel Authorization expansion project (eTA 2.0) ($1 million);
Transfers, increasing IRCC’s Vote 5 - Capital from:
- IRCC’ Vote 1 - Operating, via the 2016-17 Main Estimates for the creation of IRCC’s Capital Vote as of April 1, 2016 ($14 million); and
- IRCC’s Vote 1 - Operating, via the 2016-17 Supplementary Estimates A, mainly to fund the development of IRCC’s Grants and Contributions System and other minor capital projects ($4 million).
- Decreases of $6 million attributable to:
- The reprofile approved by Finance Canada to next fiscal year for various capital projects ($6 million), such as Entry Exit or Biometric expansion.
Vote 10 – Grants and Contributions (G&C)
The Department’s Vote 10 – Grants and Contributions net increase of $117 million (11%) is explained as follows:
- Increases of $126 million attributable to:
Additional Funding of $125 million for:
- The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Government Assisted Syrians Refugees ($71 million);
- The implementation of the Government’s response to the Syrian refugee crisis – Settlement of 25,000 Syrians Refugees ($28 million);
- The reduction of processing times and increase of processing to support increased 2016 levels for immigration ($18 million);
- The Grant for the Canada-Quebec Accord on immigration ($5 million); and
- The renewal of the Global Assistance for Irregular Migrants Program ($3 million).
One time transfer, reducing IRCC’S Vote 10 – Grants and Contributions to:
- The National Capital Commission for the Victims of Communism Memorial that happened in 2015-16 ($1 million).
- Decrease of $9 million attributable to:
Transfer, reducing IRCC’S Vote 10 – Grants and Contributions to:
- The Department of Canadian Heritage for the transfer of responsibility for the Multiculturalism Program following the change in government machinery announced in the fall of 2015 ($9 million).
Budgetary Statutory Authorities
The 2016–17 statutory authority level in the third quarter is lower than 2015–16 by $16 million (18%) and is primarily explained as follows:
- Increases of $28 million attributable to:
- Passport program: the increased draw on the fiscal framework is mainly related to a forecasted increase in the Passport Program Modernization initiative spending compared to the previous year ($18 million);
- Adjustments to the employee benefit plans ($6 million); and
- Other minor adjustments ($4 million).
- Decreases of $44 million attributable to:
- The forecasted costs related to the return of fees for certain terminated Federal Skilled Workers applications as this initiative is winding down ($28 million); and
- The forecasted costs related to the return of fees for the termination of Immigrant Investor Program and Entrepreneur Program applications as this initiative is winding down ($16 million).
Significant Changes to Departmental Budgetary Expenditures by Standard Object
Quarter over quarter analysis
As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, the total gross budgetary expenditures have increased by $54 million (11%) from $495 million in 2015-16 to $549 million in 2016-17. In addition, through the Passport Program, IRCC generated $148 million in respendable revenues in the third quarter of 2016-17 compared to $134 million for the same quarter in 2015-16. As a result, this represent a net budgetary expenditure of $401 million as of December 31, 2016 compared to $360 million as of December 31, 2015.
The year-over-year increase of expenditures is mainly attributable to expenditures related to high profile initiatives such as the settlement of 25,000 Syrian refugees, the expanding commitment of the government for an additional 10,000 Government Assisted Syrian refugees and the reduction of processing times and support the increase of Immigration Levels as approved in Budget 2016.
With the exception of Transfer Payments, the remaining operating expenditures have not encountered significant quarter over quarter variances.
Transfer Payments increased by $45 million (19%) compared to the same quarter in the previous year and is mostly due to an increase in resettlement assistance income support payments and to an increase in transfer payments made to non-governmental organizations in relation to the Government’s commitment to the Syrian refugee crisis for which IRCC is the lead department and Budget 2016 initiatives.
As reflected in the Table of Departmental Budgetary Expenditures by Standard Objects, IRCC’s year-to-date gross operating expenditures as of the third quarter were $1.589 billion compared to $1.478 billion as of December 31, 2015, representing an increase of $111 million (8%) from previous year and 64% of the total gross budgetary authorities available for use for the year ending March 31, 2017. This is slightly higher than last year’s expenditures usage rate (61%) at quarter-end. The increased percentage of spending can be explained by increase in Settlement expenditures in response to the Syrian refugee crisis and increased spending in the reduction of processing times and to achieve higher immigration admissions as per the 2016 Annual Immigration Level Plan.
The increase of the year-to-date gross operating expenditures is mainly explained by an increase in Transfer Payments spending of $92 million compared to the previous year-to-date used at quarter-end. This is attributable to an increase of $59 million in the Resettlement Assistance program (RAP) and an increase of $33 million in settlement expenditures, in both cases, it is mainly related to the Syrian Refugees Crisis. In addition, the increase is also explained by an increase of $14 million in Personnel costs, which is attributable to the delivery of Government priorities and commitments as previously stated.
With the exception of the Personnel costs and Transfer payments, the remaining expenditures in other standard objects categories related to operating expenditures, have not encountered significant year-to-date variances.
3. Risks and Uncertainties
IRCC operates in a constantly changing environment. Its strategic directions as well as its policies and operations are influenced by external factors such as emerging events, the Canadian and global economic, social or political contexts and shifting migration trends. At the same time, IRCC continuously works to improve its own internal processes and systems through change initiatives such as the Modernization and experimentation agenda to improve client service.
Unforeseen Events and Natural Disasters
Unforeseen events such as the impact of the civil war in Syria and around the world, natural disasters and other foreign government socio-economic policies, may have significant effects on IRCC’s operations. They can affect IRCC directly when they occur in places where our offices and employees are located.
Additionally, IRCC can also be indirectly affected when the Department is required, for humanitarian or legal reasons, to facilitate travel of foreign nationals or Canadian citizens by processing applications for visas or other necessary documents on an urgent basis.
In conjunction with its national and international partners, IRCC continues to identify, assess, monitor, and proactively implement measures to mitigate risks and minimize the impact they may have on our operations, commitments, service standards and processing targets.
Litigation and Legal
Over the last few years, there has been a significant increase in the numbers of complex and high-profile litigation. Sound management practices are in place to manage all of these challenges and ensure timely delivery of IRCC’s programs and client services.
4. Significant Changes in Relation to Operations, Personnel and Programs
- The Honourable Ahmed Hussen was appointed the Minister of Immigration, Refugees and Citizenship Canada on January 10, 2017
- Paul MacKinnon was appointed to the position of Assistant Deputy Minister of Strategic and Program Policy effective December 12, 2016
- Daniel Mills was appointed in the position of Assistant Deputy Minister and Chief Financial Officer as of October 24, 2016.
On December 10, 2016, the Government of Canada, in collaboration with the United Nations High Commissioner for Refugees and with Canadians, including private sponsors, non-governmental organizations, provincial, territorial and municipal governments, confirmed that it had reached, and even surpassed, its goal with the arrival of 36,300 Syrian refugees. The Government also reiterated its ambition to continue helping in the integration of Syrian refugees as well as refugees from other countries.
There have been no other significant changes in relation to operations, personnel and programs during the quarter ended December 31, 2016.
Approval by Senior Officials
Daniel Mills, CPA, CMA
Assistant Deputy Minister
Chief Financial Officer
Statement of Authorities (in thousands of dollars)
|Fiscal Year 2016-17||Fiscal Year 2015-16|
|Total available for use for the year ending Footnote 1||Used during the quarter ended||Year-to-date used at quarter-end||Total available for use for the year ending Footnote 1||Used during the quarter ended||Year-to-date used at quarter-end|
|Vote 1 - Operating Expenditures||685,806||160,546||422,063||757,839||146,321||390,198|
|Vote 5 - Capital Expenditures||13,278||2,935||7,936||-||-||-|
|Vote 10 - Grants and Contributions||1,210,094||284,950||846,572||1,093,469||239,577||754,296|
|Budgetary Statutory Authorities|
|Contributions to Employee Benefit Plans||69,411||16,194||48,582||63,012||15,170||45,510|
|Minister's Salary and Motor Car Allowance||84||21||56||84||15||57|
|FSW Fees Returned (Terminated Applications)||1,795||686||1,795||29,500||704||339|
|IIP and EN Fees Returned (Terminated Applications)||934||438||934||16,500||3,980||9,556|
|Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets||41||-||-||28||-||-|
|Refunds of Previous Years Revenue||6,616||1,903||6,617||4,024||1,420||4,025|
|Passport Program Revolving Fund||(184,208)||(66,444)||(213,193)||(202,153)||(46,789)||(169,622)|
|Total Budgetary Authorities||1,803,864||401,229||1,121,375||1,762,327||360,406||1,034,383|
|Non-Budgetary AuthoritiesFootnote 2||60,022||7,678Footnote 3||3,423||67,396||2,128||(229)|
Departmental Budgetary Expenditures by Standard Object (in thousands of dollars)
|Fiscal Year 2016-17||Fiscal Year 2015-16|
|Planned expenditures for the year ending March 31, 2017||Expended during the quarter ended December 31, 2016||Year-to-date used at quarter-end||Planned expenditures for the year ending March 31, 2016||Expended during the quarter ended December 31, 2015||Year-to-date used at quarter-end|
|Transportation and Communications||76,290||12,997||36,166||81,769||12,047||36,680|
|Professional and Special Services||498,448||97,223||248,570||390,870||92,619||244,879|
|Repair and Maintenance||6,726||1,517||2,810||5,535||2,307||2,938|
|Utilities, Materials and Supplies||70,877||8,831||23,537||53,591||9,264||24,512|
|Acquisition of Machinery and Equipment||38,753||906||3,134||25,602||1,464||3,465|
|Other Subsidies and Payments||9,363||6,554||14,850||50,610||5,501||14,502|
|Total Gross Budgetary Expenditures||2,480,020||549,284||1,588,799||2,411,637||495,130||1,477,711|
|Less Revenues Netted against Expenditures|
|Passport Program Respendable Revenue||666,218||147,847||460,942||639,372||134,175||435,870|
|Revenue Credited to the Vote||9,938||208||6,482||9,938||549||7,458|
|Total Net Budgetary Expenditures||1,803,864||401,229||1,121,375||1,762,327||360,406||1,034,383|
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