Quarterly Financial Report for the quarter ended December 31, 2022

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 2022-23 Main Estimates Part II and the 2021-22 Quarterly Financial Report for the quarter ended December 31, 2021.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2022-23 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 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.

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 Report 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 2022-23 Main Estimates include authorities that were approved up until January 2022. Funding approved afterwards is sought via the Supplementary Estimates process.

In 2022-23, IRCC’s total authorities as at December 31, 2022 include full supply for the Main Estimates and incremental funding provided through the Supplementary Estimates (A) and (B) to respond to the crises in Afghanistan and Ukraine, to provide asylum seekers with temporary accommodations and support services, to improve processing times and reducing inventory backlogs for many of the Department’s lines of business, to deliver on the 2022 Immigration Levels targets, for the government’s advertising programs, and to increase the reach of Temporary Foreign Worker Program inspections.

Total authorities to date also include funding from the 2021-22 Operating and Capital Budget Carry Forward, a temporary allocation from Treasury Board Vote 5 – Government Contingencies in support of the crisis in Ukraine, and from Treasury Board Vote 15b – Compensation Adjustments.

Significant changes to authorities

The following table shows the total budget available for use by IRCC. Only authorities available for use and granted by Parliament as at December 31, 2022 are included. 

IRCC’s total budgetary authorities available for use in fiscal year 2022-23 increased by approximately $1,975.2 million (53%) compared to the same quarter in 2021-22.

Authorities for Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures authorities increased by $820.1 million (54%), which is mainly explained by the following items:

• New funding of $222.3 million for IRCC’s immigration approach to provide the new pathway to facilitate temporary and permanent residence for Ukrainian Nationals and their families;
• Incremental funding of $170.7 million to provide temporary accommodations and support service to asylum seekers;
• Incremental funding of $168.3 million for the processing activities of the resettlement commitment of Afghan refugees;
• Incremental funding of $98.5 million to implement the multi-year Immigration Levels Plans;
• Incremental funding of $83.5 million in the current funding to provide health care services to refugees and asylum seekers under the Interim Federal Health Program; and
• New funding of $57.6 million to improve processing times and reduce inventory backlogs across many of the Department’s line of business.

Authorities for Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities increased by $8.5 million (20%), which is mainly explained by the following items:

• New funding of $6.1 million to improve processing times and reduce inventory backlogs across many of the Department’s line of business;
• Incremental funding of $3.2 million to stabilize IRCC’s Global Case Management System to set the foundation for future transformation; and
• Decrease in funding of $0.8 million related to other adjustments.

Authorities for Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions authorities increased by $1,153.6 million (62%), which is mainly explained by the following items:

• Incremental funding of $492.4 million for the resettlement commitment of Afghan refugees;
• New funding of $322.6 million for IRCC’s immigration approach to provide one-time temporary financial support and settlement services to Ukrainian Nationals;
• Funding of $173.0 million transferred from fiscal year 2020-21 to 2022-23 to provide financial support to provinces and municipal governments to address interim housing pressures resulting from increased volumes of asylum claimants entering Canada; and
• Incremental funding of $70.5 million to implement the multi-year Immigration Levels Plans.

Budgetary Statutory Authorities

The 2022-23 statutory authority level in the third quarter decreased by $7.1 million (-3%) compared to 2021-22, which is explained as follows:

• A decrease of $57.4 million in the Passport Program due to an anticipated increase in revenues as a result of an increase in the volume of applications for the renewal of the 10 year passport;
• An increase of $45.0 million for the Employee Benefit Plans as a result of new funding received in Vote 1 – Operating Expenditures; and
• An increase of $5.3 million related to other statutory authorities.

4. Significant changes to departmental budgetary expenditures by standard object

Quarter over quarter analysis

The following table shows the budgetary expenditures and revenues netted against expenditure of IRCC for the period and their comparison with the same period last year.

Note: Numbers may not add up due to rounding.

The total gross budgetary expenditures during the quarter ending December 31, 2022 increased by $306.7 million (35%) compared to the same quarter in 2021-22, which is mainly explained as follows:

1. Salaries and Employment Benefits have increased by $37.5 million (17%) which is attributable to increases in full-time equivalents to support various initiatives such as the implementation of the multi-year Immigration Levels Plan while supporting the government’s response to the crises in Afghanistan and Ukraine, and upholding and improving client services.
2. Transportation and Communications expenditures have increased by $13.6 million (233%) which is related to an increase in courier services due to an increase in the volume of travel documents, compared to pandemic context of the quarter ended December 31, 2021. Furthermore, the increase in travel expenditures is attributable to the resumption of travel by the department’s officials for temporary duties or for in-person training.
3. Professional and Special Services expenditures have increased by $32.7 million (17%) which is related to an increase in temporary accommodation, security and health care services associated with the increased arrival of asylum claimants, increase in operational costs for the collection of biometrics by our third parties in Visa Application Centers (VAC) as a result of an increase in travelling and entries in Canada post-pandemic; and an increase in travel and temporary accommodations to support Ukrainian Nationals. These increases were offset by a decrease related to delays in the timing of the receipt of the invoices for passport delivery services supported by Employment and Social Development Canada (ESDC) and Global Affairs Canada (GAC).
4. Rentals expenditures have increased by $36.7 million (421%) which is attributed to an increase in temporary accommodation costs in response to the surge of asylum claimants seen this quarter compared to the same quarter in 2021-22.
5. Utilities, Materials and Supplies expenditures have increased by $4.1 million (48%) which is largely attributable to an increase in printed materials for the Passport Program as more passport booklets are being printed and mailed due to a higher demand for travel documents post-pandemic.
6. Transfer Payments have increased by $181.8 million (44%) which is mainly explained by increased arrivals and support under the multi-year Immigration Levels Plans, including the commitment for Afghan and Ukrainian Nationals. This includes payments to refugees under the Resettlement Assistance program (RAP); to local and National non-profit organizations; and to international organizations. There is also an increase in spending for the Canada-Quebec Accord and for the municipalities of which the Interim Housing Assistance Program and settlement services are included.

Through the Passport Program and International Experience Canada, IRCC generated $114.9 million and $0.8 million respectively in re-spendable revenues in the third quarter of 2022-23. Overall, this resulted in net budgetary expenditures of $1,056.8 million as of December 31, 2022, compared to $811.0 million in the same quarter in 2021-22.

1. Passport re-spendable revenues have increased by $61.5 million (115%) compared to the same quarter in the previous fiscal year, due to the increase in application volumes attributable to the lifting of travel and border restrictions introduced to control the spread of COVID-19.
2. International Experience Canada revenues have decreased by $0.5 million (-37%) compared to the same quarter in the previous fiscal year as a result of the timing of the final Invitation to Apply (ITA) draws which were done in mid-October of the 2022-23 fiscal year compared to November in 2021-22.

Cumulative analysis

The following table shows the budgetary expenditures and revenues netted against expenditure of IRCC for the period and their comparison with the same period last year.

Note: Numbers may not add up due to rounding.

IRCC’s year-to-date gross budgetary expenditures were $3,582.1 million in 2022-23 compared to $2,595.4 million in 2021-22, representing an increase of $986.7 million (38%), which is mainly explained by:

1. Salaries and employee benefits have increased by $96.5 million (15%) which is attributable to increases in full-time equivalents to support various initiatives such as the implementation of the multi-year Immigration Levels Plan while supporting the government’s response to the crises in Afghanistan and Ukraine, and upholding and improving client services.
2. Transportation and Communications expenditures have increased by $29.9 million (201%) which is related to an increase in courier services due to higher volumes of passports issued, compared to the previous fiscal year. Furthermore, the increase in travel expenditures is attributable to the resumption of travel by the department’s officials for temporary duties to deliver on the government’s commitment to the Ukraine and Afghanistan crises, and to attend in-person training.
3. Professional and Special Services expenditures have increased by $168.2 million (36%) which is related to an increase in operational costs for the collection of biometrics by our third parties in Visa Application Centers (VAC) as a result of an increase in travelling and entries in Canada; an increase in the passport delivery services supported by Employment and Social Development Canada (ESDC) and Global Affairs Canada (GAC); an increase in temporary accommodation site costs, security services costs and health care services associated with the increased arrival of asylum claimants; and an increase in travel and temporary accommodation to support Ukrainian Nationals.
4. Rentals expenditures have increased by $69.5 million (283%) which is attributed to an increase in temporary accommodation costs in response to a higher number of asylum claimants seen this fiscal year compared to the previous fiscal year.
5. Utilities, Materials and Supplies expenditures have increased by $25.0 million (148%) which is attributable to an increase in printed materials for the Passport Program as more passport booklets are being printed and mailed due to a higher demand for travel documents.
6. Transfer Payments have increased by $591.2 million (42%) which is mainly explained by increased arrivals and support under the multi-year Immigration Levels Plans, including the commitment for Afghan and Ukrainian Nationals. This includes payments to refugees under the Resettlement Assistance program (RAP); payments to local and National non-profit organizations; and to international organizations. There is also an increase in spending for the Canada-Quebec Accord and for the municipalities of which the Interim Housing Assistance Program and settlement services are included.

Through the Passport Program and International Experience Canada, IRCC generated $279.8 million and $5.8 million respectively in re-spendable revenues to date in 2022-23. Overall, this resulted in net budgetary expenditures of $3,296.5 million as of December 31, 2022, compared to $2,472.2 million by the end of the same quarter in 2021-22.

1. Passport re-spendable revenues have increased by $160.0 million (134%) by the end of the third quarter of 2022-23 compared to the previous fiscal year, due to the increase in application volumes attributable to the lifting of travel and border restrictions introduced to control the spread of COVID-19.
2. International Experience Canada revenues have increased by $2.3 million (66%) compared to the previous fiscal year as a result of the lifting of travel and border 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, impacts of climate change on migration, the Canadian and global economic, social or political contexts and shifting migration trends.

As a result of lifting the travel and border restrictions related to the COVID-19 pandemic, the Department continues to experience higher demand for services such as passports, settlement of Afghan and Ukraine Nationals in Canada, as well as asylum seekers which has placed pressures on all levels of government. While IRCC works towards addressing these emerging priorities, efforts remain in place towards improving its own internal processes and systems through change initiatives. As such, a modernization and transformation agenda is being implemented to help improve client service and better enable the Department to maintain operations in the pandemic environment.

Crisis Management

Some events 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, COVID-19 has affected IRCC’s priorities and operations due to the ongoing closure of the Canadian borders to most non-essential travel in the past two fiscal years. As travel restrictions and health measures are being lifted, IRCC will continue to take the necessary measures and adopt financial strategies to adapt to the evolving pre-pandemic demand for its services.

Moreover, the Department continues to facilitate the complex evacuation of Afghan and Ukraine Nationals and to help them settle in Canada while monitoring the situations for potential interventions related in the Indo-Pacific region, for the Uighurs and for the crisis situation following the earthquake in Turkey. Adding to these crises, the Department continues to monitor and manage increased irregular migration crossings at the Canada-US border.

Litigation and Legal

IRCC operates in a very high volume litigation environment which includes complex, high profile and high impact 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

Michèle Kingsley was appointed Assistant Deputy Minister, Operations, as of October 31, 2022 to replace Nicole Giles who assumed the role of Senior Assistant Deputy Minister within the Public Safety portfolio.

Louise Baird was appointed to the role of Senior Assistant Deputy Minister of IRCC’s new sector, Strategic Immigration Review, effective November 28, 2022.

On December 16, 2022, Holly Flowers Code, Chief Human Resources Officer and Assistant Deputy Minister, Corporate Services Sector (CSS), left IRCC and was appointed Vice President, Human Resources at Canada Border Services Agency. In the interim, Marie-Flore Baptiste will act as Chief Human Resources Officer and Assistant Deputy Minister, Corporate Services Sector until a permanent replacement is named.

On January 23, 2023, Hughes St-Pierre, Chief Financial Officer (CFO) and Assistant Deputy Minister, Finance, Security and Administration (FSA), left IRCC and was appointed CFO and Deputy Chief, Corporate Services with the Communications Security Establishment. In the interim, Julie Chassé will act as CFO and Assistant Deputy Minister, FSA, until a replacement is named.

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

Approval by Senior Officials

Approved by:

Ottawa, Canada
February 22, 2023

Statement of Authorities

Departmental Budgetary Expenditures by Standard Object