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:

• An increase of $365.3 million (32%) in Vote 1 – Operating Expenditures
• An increase of $6.0 million (17%) in Vote 5 – Capital Expenditures
• A decrease of $66.1 million (-3%) in Vote 10 – Grants and Contributions
• An increase of $51.3 million (22%) in Statutory Authorities

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:

• Increases of $418.5 million are mainly comprised of:
  • Incremental funding of $169.7 million for the Interim Federal Health Program to provide health care to refugees and asylum seekers;
  • Incremental funding of $78.7 million to implement the immigration levels plans;
  • New funding of $69.9 million for Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada;
  • Incremental funding of $30.9 million to stabilize IRCC’s Global Case Management System to set the foundation for future transformation;
  • Incremental funding of $23.7 million for all newly signed collective agreements and other compensation-related adjustments;
  • New funding of $18.0 million to Uphold Client Services and Support announced in Budget 2021;
  • Increased funding of $12.0 million due to the realignment of funds from previous years to 2021-22 for expanding biometrics in Canada’s immigration system;
  • Net transfer of $10.9 million from Global Affairs Canada for adjustments made to costs associated with supporting staff located at missions abroad; and
  • Increased allocation of $4.7 million through Treasury Board central vote for the Operating Budget Carry Forward.
• Decreases of $53.2 million are mainly comprised of:
  • Sunset funding of $19.1 million for Improving Immigration Client Service announced in Budget 2019;
  • Sunset funding of $18.9 million for Helping Travelers Visit Canada announced in Budget 2019;
  • Reduced funding in the amount of $12.9 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019;
  • Reduced funding in the amount of $2.0 million due to fluctuations in the funding profile for Canada’s New International Education Strategy announced in Budget 2019; and
  • Other adjustments in the amount of $0.3 million.

Vote 5 – Capital Expenditures

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

• Increase of $11.4 million is related to:
  • Incremental funding of $11.4 million to stabilize IRCC’s Global Case Management System to set the foundation for future transformation.
• Decreases of $5.4 million are mainly comprised of:
  • Reduced funding in the amount of $3.7 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019; and
  • Other adjustments in the amount of $1.7 million.

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:

• Increases of $296.2 million are mainly comprised of:
  • Incremental funding of $141.3 million to provide settlement and re-settlement services as part of the implementation of the multi-year immigration levels plans;
  • New funding of $96.2 million for Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada; and
  • Incremental funding of $58.7 million for the grant related to the Canada-Quebec Accord on immigration.
• Decreases of $362.3 million are mainly comprised of:
  • Sunset funding of $344.5 million for the support of provinces and municipalities with temporary housing for asylum claimants;
  • Reduced funding of $8.5 million due to fluctuations in the funding profile for Workforce and Career Pathways for Visible Minority Newcomer Women;
  • Reduced funding of $8.2 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019; and
  • Reduced funding of $1.1 million due to fluctuations in the funding profile for the Protection of Vulnerable Women and Girls.

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:

• Increase in statutory authority of $30.4 million as a result of a forecasted decrease in revenue for the Passport Program due to fluctuations in passport applications as fewer Canadians are renewing their travel documents in the second half of the 2013–2023 business cycle accentuated by the impact of COVID-19 restrictions;
• $16.6 million for Employee Benefit Plans as a result of an increase in funding levels in Vote 1 – Operating Expenditures and Vote 5 – Capital Expenditures; and
• Increased funding of $4.3 million related to other statutory authorities.

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:

Ottawa, Canada
February 18, 2022

Statement of Authorities

Departmental Budgetary Expenditures by Standard Object