Quarterly Financial Report for the quarter ended June 30, 2013

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 Main Estimates and 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 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 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 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.

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 and the Supplementary Estimates (A), whereas 2013–14 includes only the amounts in the Main Estimates. 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 $100 million (6%), when compared to the same quarter in 2012–13. This is comprised of an increase of $19M (4%) in Vote 1 – Operating Expenditures, a decrease of $14M (1%) in Vote 5 – Grants and Contributions and an increase of $95M in Statutory Authorities.

Vote 1 – Operating Expenditures

The Department’s Vote 1 net increase of $19 million or 4% is explained as follows:

  • Increases of $66 million related to:
    • Funding to support the sharing of immigration information with the United States ($20 million)
    • Funding to continue work on the inclusion of biometrics in the temporary visa stream ($19 million)
    • Adjustment of funding previously transferred to Foreign Affairs and International Trade for departmental staff at missions abroad ($15 million)
    • Funding related to collective agreements ($5 million)
    • Funding to manage immigration cases involving classified information (Security Certificate) ($2 million)
    • Funding to eliminate the backlog of certain Federal Skilled Worker applications ($2 million)
    • Funding to modernize the immigration system and manage backlogs ($2 million)
    • Funding to support the amendment to the Immigration and Refugee Protection Regulations that removes visa exemptions for citizens of five countries ($1 million)
  • Decreases of $47 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)
    • Other transfers and adjustments ($4 million)
    • Sunsetting of Official Languages Action Plan ($2 million)

Vote 5 – Grants and Contributions (G&C)

The Department’s Vote 5 net decrease of $14 million or 1% is explained as follows:

  • Increase of $2 million to reflect the funding to the Grant for the Canada-Quebec Accord on immigration
  • Decreases of $16 million associated with the following:
    • Savings identified as part of the Budget 2012 Spending Review
      ($12 million)
    • Sunsetting of the Community Historical Recognition Program ($4 million)

Budgetary Statutory Authorities

The 2013–14 statutory authorities level in the first quarter is significantly higher than 2012–13 by $95 million which is mainly related to the  return of fees for certain terminated Federal Skilled Worker applications as explained in the changes of budgetary authorities.

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 of budgetary expenditures in the first quarter, ending June 30, 2013, have increased by $24 million or 7%, from $355 million to $379 million.  This difference is for the most part explained by an increase of $23 million under Transfer Payments, a decrease of $3 million in Professional and Special Services and an increase of $4 million in Personnel expenditures.

The increase of $23 million or 10%, in expenditures for Transfer Payments (Vote 5) is mainly attributable to the Contribution to provinces ($17 million). No payments were issued to the province of Manitoba in the current first quarter because the agreement with the province ended at the end of March 2013. There was also a timing difference in the payment to the province of British Columbia. The remainder of the variance is due to the implementation in 2013–2014 of the advance payment process in the Settlement program.

With respect to the decrease of $3 million in Professional and Special Services expenditures, this is mainly explained by a reduction in Interim Federal Health Program (IFHP) expenditures of $6M, offset by an increase of $3 million for Informatics Services, including $2 million for Biometrics project.

The increase of $4 million in Personnel expenditures is mainly attributable to the increase in cash out of severance entitlements in the first quarter of 2013–14, compared to 2012–13.

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, CIC’s net budgetary expenditures for the quarter ending June 30, 2013 were $379 million compared to $355 million as of June 30, 2012, representing 23% of the total budgetary authorities available for use for the year ending on March 31, 2014; the same percentage (23%) used at quarter-end last year.  The Department has therefore been consistent in its spending this quarter versus its authorities provided, compared to the first quarter of the previous fiscal year.

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 20, 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. CIC Calgary office was closed from June 20 to June 28, 2013 due to flooding in Southern Alberta. This may have implications on CIC’s operations. Further information will be provided in the next Quarterly Financial Report.

Unforeseen events and natural disasters can also affect CIC indirectly 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 operating activities, 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.

As mitigation strategies, 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.

4. Significant changes in relation to operations, personnel and programs

Passport Canada

As announced in May 2013, primary responsibility for Passport Canada was moved from the Department of Foreign Affairs and International Trade to Citizenship and Immigration. The move is effective July 2, 2013.

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 the first year of implementation, CIC achieved Budget 2012 savings of $26.5M ($2.3M Inter-Action Multiculturalism Projects and $24.2M Reform of Interim Federal Health Program).  Savings increase to $59.0M for fiscal year 2013–14; and will result in ongoing savings of $71.2M by 2014–15. To achieve these savings, CIC committed to staff reductions. At the same time, we identified certain measures that required the hiring of staff.  The net result was an increase of 24 Full Time Equivalents in 2014–15 and ongoing. 

Of the reduction of $59.0M for 2013–14, $24.5M savings is attributable to the reform of the Interim Federal Health Program (IFHP). Through this reform, CIC is ensuring that IFHP 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 normally accessed through Supplementary Estimates.

For the remaining $34.5M, CIC’s authorities in the Main Estimates for 2013–14 have been reduced by the following:

  • $21.0M related to Vote 1 operating expenditures;
  • $11.7M related to Vote 5 contributions; and
  • $1.8M related to statutory employee benefit plan costs.

Following are the savings measures that are being implemented:

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.

Approved by: 

Signatures of Neil Yeates, Deputy Minister and Amipal Manchanda, Assistant Deputy Minister, Chief Financial Officer, in Ottawa, Canada, Date – August 14, 2013

Statement of Authorities (unaudited)

(in thousands of dollars) Fiscal Year 2013-2014 Fiscal Year 2012-2013
Total available for use for the year ending March 31, 2014 * Used during the quarter ended June 30, 2013 Year-to-date used at quarter-end Total available for use for the year ending March 31, 2013 * Used during the quarter ended June 30, 2012 Year-to-date used at quarter-end
Vote 1 – Operating Expenditures 552,535 104,193 104,193 533,161 105,741 105,741
Vote 5 – Grants and Contributions 949,946 254,860 254,860 963,929 232,326 232,326
Budgetary Statutory Authorities            
Contributions to Employee Benefit Plans 57,360 14,340 14,340 56,839 14,210 14,210
Minister's Salary and Motor Car Allowance 79 20 20 78 19 19
Fees Returned in Connection with a Terminated Application 95,500 3,181 3,181 0 0 0
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 31 1 1 15 0 0
Court Awards 5 5 5 13 13 13
Refunds of Previous Years Revenue 2,427 2,427 2,427 3,182 3,182 3,182
Total Budgetary Authorities 1,657,883 379,027 379,027 1,557,217 355,491 355,491
Non-Budgetary Authorities 71,214 **(2,043) (2,043) 71,292 **(3,101) (3,101)
TOTAL AUTHORITIES 1,729,097 376,984 376,984 1,628,509 352,390 352,390

* Includes only authorities available for use and granted by Parliament at quarter-end

** Represents the net of loans collected and loans issued

Departmental Budgetary Expenditures by Standard Object (unaudited)

(in thousands of dollars) Fiscal Year 2013-2014 Fiscal Year 2012-2013
Planned expenditures for the year ending March 31, 2014 Expended during the quarter ended June 30, 2013 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2013 Expended during the quarter ended June 30, 2012 Year-to-date used at quarter-end
Personnel 387,092 98,860 98,860 380,350 94,944 94,944
Transportation and Communications 29,809 2,710 2,710 27,841 2,615 2,615
Information 9,763 420 420 15,031 455 455
Professional and Special Services 143,131 11,941 11,941 123,619 15,180 15,180
Rentals 13,288 3,011 3,011 13,672 5,106 5,106
Repair and maintenance 7,505 63 63 9,193 154 154
Utilities, Materials and Supplies 8,847 322 322 9,279 736 736
Acquisition of Machinery and Equipment 8,426 639 639 11,108 275 275
Transfer Payments 949,946 254,860 254,860 963,929 232,326 232,326
Other Subsidies and Payments 100,076 6,201 6,201 3,195 3,700 3,700
TOTAL NET BUDGETARY EXPENDITURES 1,657,883 379,027 379,027 1,557,217 355,491 355,491
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