Quarterly Financial Report for the quarter ended December 31, 2021

1. Introduction

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 2021-22 Main Estimates Part II and the 2020-21 Quarterly Financial Report for the quarter ended December 31, 2020.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2021-22 Departmental Plan.

2. 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 for the 2021-22 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.

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 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.

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

The 2021-22 Main Estimates include authorities that were approved up until December 2020. Funding approved afterwards is sought via the Supplementary Estimates process.

In 2021-22, IRCC’s total authorities as at December 31, 2021 include full supply for the Main Estimates and incremental funding provided through the Supplementary Estimates A to support Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019, as well as new funding through Supplementary Estimates B mainly for the 2021-2023 Immigration Levels plan, Upholding Client Services and Support announced in Budget 2021, and Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada. Total authorities also include funding from the 2020-21 Operating and Capital Budget Carry Forward.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2021-22 increased by approximately $356.5 million (11%) compared to the same quarter in 2020-21. This variance in the authorities is comprised of:

Changes to authorities include an increase of $169.7 million for Interim Federal Health Program to provide health care to refugees and asylum seekers, $220.0 million for implementing the multi-year immigration levels plans, $169.3 million for Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada, $58.7 million for the grant related to the Canada-Quebec Accord on immigration, $42.3 million to stabilize IRCC's Global Case Management System to set the foundation for future transformation, and $18.0 million to Uphold Client Services and Support announced in Budget 2021. These increases were largely offset by the sunset of funding of $344.5 million for the support of provinces and municipalities with temporary housing for asylum claimants.

Changes to authorities also include funding received through Treasury Board central vote for the 2020-21 Operating and Capital Budget Carry Forward.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures authorities' net increase of $365.3 million (32%) is explained as follows:

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities net increase of $6.0 million (17%) is explained as follows:

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions authorities' net decrease of $66.1 million (-3%) is explained as follows:

Budgetary Statutory Authorities

The 2021-22 statutory authority level in the second quarter has increased by $51.3 million (22 %) compared to 2020-21, which is primarily explained as follows:

4. 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, total gross budgetary expenditures during the quarter ending December 31, 2021 increased by $167.8 million (24%) compared to the same quarter in 2020-21. As described below, this variance is mainly attributable to changes related to Personnel, Professional and Special Services, and Transfer Payments.

Through the Passport Program and International Experience Canada, IRCC generated $53.4 million and $1.3 million respectively in re-spendable revenues in the third quarter of 2021-22. Overall, this resulted in a net budgetary expenditure of $811.0 million as of December 31, 2021 compared to $677.7 million in the same quarter in 2020-21.

Personnel expenditures have increased by $31.3 million (16%) which is mainly attributable to increases in salary as a result of newly signed collective agreements and other compensation-related adjustments, as well as spending related to the implementation of the immigration levels plans, the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation, the Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada, and protecting people from unscrupulous immigration and citizenship consultants.

Professional and Special Services expenditures have increased by $75.4 million (64%) which is mainly explained by an increase in spending of $35.8 million for passport delivery services supported by ESDC, Global Affairs Canada and Shared Services Canada; $13.5 million for the Interim Federal Health program as a result of the gradual re-opening of non-essential services and medical offices as COVID-19 restrictions were being lifted; $9.4 million for consultants to support IT projects including the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation; $8.9 million in legal services as a result of an increase in litigation cases; $4.9 million in transactions costs related to Visa Application Centers (VAC) such as biometrics as a result of an increase in demand for IRCC’s services; and $2.9 million for Interim Lodging Services (ILS) due to an increase in temporary accommodations costs associated with the arrival of asylum claimants following the gradual re-opening of the borders.

Transfer Payments have increased by $47.5 million (13%) which is explained by an increase in spending of $9.6 million for the Canada-Quebec Accord. The increase is also attributable to higher immigration levels and refugee landings following the gradual re-opening of borders and easing of travel restrictions as well as to support Afghanistan refugees’ arrivals. As a result, payments have increased by $41.5 million to local non-profit organizations for the Settlement and Resettlement assistance programs, $13.0 million for assistance to immigrants under the Refugee Assistance Program (RAP) Income Support program, and $5.4 million to United Nations High Commissioner for Refugees and International Organization for Migration under the RAP Grant program. These increases were offset by a decrease of $22.0 million in transfer payments made to municipalities between 2020-21 and 2021-22 under the Interim Housing Assistance Program (IHAP) which expired on March 31, 2021.

Passport re-spendable revenues have increased by $33.4 million (167%) compared to the same quarter in the previous fiscal year mainly due to the increase in application volumes attributable to the gradual re-opening of borders and easing of travel restrictions.

International Experience Canada revenues have increased by $1.1 million compared to the same quarter in the previous fiscal year due to the gradual re-opening of borders and easing of travel restrictions.

Cumulative analysis

As reflected in the Table of Departmental Budgetary Expenditures by standard Object, IRCC’s year-to-date gross operating expenditures were $2,167.8 million in 2020-21 compared to $2,595.4 million in 2021-22, representing an increase of $427.6 million (20%).

Personnel expenditures have increased by $97.8 million (18%) which is mainly attributable to increases in salary as a result of newly signed collective agreements and other compensation-related adjustments, as well as spending related to the implementation of the immigration levels plans, the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation, the Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada, and protecting people from unscrupulous immigration and citizenship consultants.

Professional and Special Services expenditures have increased by $184.3 million (64%) which is mainly explained by an increase in spending of $88.9 million for passport delivery services supported by ESDC, Global Affairs Canada and Shared Services Canada; $44.4 million for the Interim Federal Health program as a result of the gradual re-opening of non-essential services and medical offices as COVID-19 restrictions were being lifted; $26.6 million for consultants to support IT projects including the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation; $9.6 million in transaction costs related to Visa Application Centers (VAC) such as biometrics as a result of an increase in demand for IRCC’s services; $7.6 million for Interim Lodging Services (ILS) due to an increase in temporary accommodations costs associated with the arrival of asylum claimants following the gradual re-opening of the borders; and $7.2 million in legal services as a result of an increase in litigation cases.

Transfer payments have increased by $118.5 million (9%) which is mainly explained by an increase in spending of $58.7 million for the Canada-Quebec Accord. The increase is also attributable to higher immigration levels and refugee landings following the gradual re-opening of borders and easing of travel restrictions, including Afghanistan refugees arrivals. As a result, payments have increased by $48.8 million to local non-profit organizations for the Settlement and Resettlement assistance programs, $17.1 million for assistance to immigrants under the RAP Income Support program, and $16.2 million to United Nations High Commissioner for Refugees and International Organization for Migration under the RAP Grant program. These increases were offset by a decrease of $22.3 million in transfer payments made to municipalities in between 2020-21 and 2021-22 under the Interim Housing Assistance Program (IHAP), which expired on March 31, 2021.

Passport re-spendable revenues have increased by $78.1 million (187%) compared to the same quarter in the previous fiscal year, mainly due to the increase in application volumes with the gradual re-opening of borders and easing of travel restrictions.

International Experience Canada revenues have increased by $3.3 million compared to $0.2 million in the same quarter in the previous fiscal year due to the gradual re-opening of borders and easing of travel restrictions.

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.

While all of IRCC’s lines of business have been affected by the COVID-19 pandemic, the department continues to monitor the impacts on its operations while working towards improving its own internal processes and systems through change initiatives. IRCC is implementing a modernization and transformation agenda that will improve client service and better enable the department to maintain operations in the pandemic environment.

Unforeseen Events and Natural Disasters

Unforeseen events as well as natural disasters 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 and may also affect the department’s clients.

Since March 2020 up until the end of this quarter, public health measures and travel restrictions to control the spread of COVID-19 continue to affect IRCC’s priorities and operations across programs. As restrictions were being gradually lifted, IRCC continued to take the necessary measures and adopt financial strategies to adapt to the situation.

Litigation and Legal

IRCC operates in a very high volume litigation environment which includes complex, high profile and high impact litigation files. Sound management practices are in place to manage all of these challenges in a consistent and coordinated fashion, including consultations with Justice and other partner departments.

5. Significant Changes in Relation to Operations, Personnel and Programs

There have not been changes in relation to operations, personnel and programs during the quarter ended December 31, 2021.

Approval by Senior Officials

Approved by:

(Original signed by)
Catrina Tapley
Deputy Minister

(Original signed by)
Hughes St-Pierre, MA, CPA, CMA
Chief Financial Officer and
Assistant Deputy Minister
Finance, security and Administration

Ottawa, Canada
February 18, 2022

Statement of Authorities

(in thousands of dollars) Fiscal Year 2021-22 Fiscal Year 2020-21
Total available for use for the year ending March 31, 2022Footnote 1 Used during the quarter ended December 31, 2021 Year-to-date used at quarter-end Total available for use for the year ending March 31, 2021Footnote 1 Used during the quarter ended December 31, 2020 Year-to-date used at quarter-end
Vote 1 - Operating Expenditures 1,511,533 311,462 818,305 1,146,202 234,786 630,770
Vote 5 - Capital Expenditures 42,474 4,958 12,859 36,432 4,053 9,893
Vote 10 - Grants and Contributions 1,860,795 416,870 1,392,437 1,926,938 369,326 1,273,964
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 101,581 21,361 64,084 85,027 20,150 60,451
Minister's Salary and Motor Car Allowance 91 23 68 89 22 67
Federal Skilled Worker Fees Returned (Terminated Applications) 86 17 86 115 28 115
Immigrant Investor Program and Entrepreneur Program Fees Returned (Terminated Applications) 17 5 17 46 14 46
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 31 3 4 4 4 4
Court Awards 63 61 63 - - -
Refunds of Previous Years Revenue 12,455 3,395 12,455 8,160 1,633 8,160
Passport Program Revolving Fund 167,385 52,874 171,785 136,984 47,694 142,468
Total Budgetary Authorities 3,696,511 811,029 2,472,163 3,339,997 677,710 2,125,938
Non-Budgetary AuthoritiesFootnote 2 53,889 3,903Footnote 3 (1,293) 48,171 (2,172)Footnote 3 (6,981)
Total authorities 3,750,400 814,932 2,470,870 3,388,168 675,538 2,118,957

Departmental Budgetary Expenditures by Standard Object

(in thousands of dollars) Fiscal Year 2021-22 Fiscal Year 2020-21
Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended December 31, 2021 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended December 31, 2020 Year-to-date used at quarter-end
Expenditures
Personnel 847,658 222,933 647,642 743,747 191,584 549,831
Transportation and Communications 50,532 5,857 14,886 60,015 1,927 3,780
Information 19,390 2,624 4,769 10,181 773 2,407
Professional and Special Services 1,065,471 193,828 472,111 777,932 118,478 287,790
Rentals 33,402 8,717 24,602 30,253 5,863 18,534
Repair and Maintenance 7,018 368 902 18,309 1,346 1,839
Utilities, Materials and Supplies 39,814 8,553 16,894 39,196 3,567 11,289
Acquisition of Machinery and Equipment 43,538 1,745 5,129 40,938 3,358 7,287
Transfer Payments 1,860,795 416,870 1,392,437 1,926,938 369,326 1,273,964
Other Subsidies and Payments 22,951 4,201 16,070 15,699 1,624 11,108
Total gross budgetary expenditures 3,990,569 865,696 2,595,441 3,663,208 697,846 2,167,829
Less Revenues Netted against Expenditures
Passport Program 284,120 53,414 119,803 312,502 19,977 41,702
International Experience Canada 9,938 1,253 3,476 9,938 159 189
Total net budgetary expenditures 3,696,511 811,029 2,472,163 3,340,768 677,710 2,125,938

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