Quarterly Financial Report for the quarter ended June 30, 2016

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 2016–17 Main Estimates, the 2016-17 Supplementary Estimates (A) and the 2015–16 Quarterly Financial Report for the quarter ended June 30, 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 and Supplementary Estimates (A) 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) 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 $376 million (26%) when compared to the same quarter in 2015–16. This is comprised of:

  • an increase of $98 million (17%) in Vote 1 – Operating Expenditures
  • an increase of $18 million (100%) in Vote 5 – Capital Expenditures
  • an increase of $277 million (28%) in Vote 10 – Grants and Contributions
  • a decrease of $18 million (19%) in Statutory Authorities.

The most significant change to the authorities above is the funding received in 2016-17 of $188 million to support settlement of 25,000 Syrian refugees and $140 million to reflect the expanding commitment of the government for an additional 10,000 Syrian refugees.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures increase of $98 million (17%) is explained as follows:

  • Increases of $135 million attributable to:
    • Additional Funding for:
      • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Syrians ($39 million);
      • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of 25,000 Syrians ($28 million);
      • The Labour Market Impact Assessment/International Mobility program (LMIA/IMP) ($28 million);
      • Reduced processing times and to support increased levels for immigration ($21 million);
      • The Biometric Expansion project to verify the identity of all visa-required travelers seeking entry to Canada ($14 million);
      • The processing of Citizenship and Temporary Resident applications to keep up with increased volume demand ($3 million); and
      • The management and protection of classified information in assessing applications under the Immigration and Refugee Protection Act (IRPA) ($2 million).
  • Decreases of $37 million associated attributable to:
    • Transfers to:
      • IRCC Vote 5 for the creation of IRCC’s Capital Vote as of April 1, 2016 ($14 million);
      • The Department of Global Affairs Canada to support missions abroad ($7 million);
      • IRCC Vote 5 mainly to fund the development of  IRCC’s Grants and Contributions System and other minor capital projects ($4 million);
      • The Department of Innovation, Science and Economic Development Canada – Syrian refugee crisis ($1 million); and
      • Other - Miscellaneous transfers ($1 million).
    • Decrease Funding for:
      • The 2015 Pan American and Parapan American games ($3 million);
      • Government Advertising Campaigns ($3 million);
      • The completion of Information Sharing initiative ($2 million);
      • The completion of Refugee Reform implementation ($1 million); and
      • Other minor adjustments ($1 million).

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures net increase of $18 million is explained as follows:

  • Increases of $18 million associated with the following:
    • Transfers from:
      • IRCC Vote 1, via the 2016-17 Main Estimates for the creation of IRCC’s Capital Vote as of April 1, 2016 ($14 million); and
      • IRCC Vote 1, 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).

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions net increase of $277 million (28%) is explained as follows:

  • Increases of $286 million associated attributable to:
    • Additional Funding for ($285 million):
      • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of 25,000 Syrians ($160 million);
      • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Syrians ($99 million);
      • Reduced processing times and to support increased 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 transfers to:
      • The National Capital Commission for the Victims of Communism Memorial ($1 million).
  • Decreases of $9 million attributable to:
    • Transfers 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 first quarter is lower than 2015–16 by $18 million (19%) and is primarily explained as follows:

  • Increases of $27 million associated with the following:
    • 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 ($8 million); and
    • Other minor adjustments ($1 million).
  • Decreases of $45 million associated with the following:
    • The forecasted costs related to the return of fees for certain terminated Federal Skilled Workers applications as this initiative is winding down ($29 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 $33 million (7%) from $505 million in 2015-16 to $538 million in 2016-17. In addition, through the Passport Program and International Experience Canada, IRCC generated $163 million and $4 million respectively in re-spendable revenues in the first quarter of 2016-17. As a result this represent a net budgetary expenditure of $371 million as of June 30, 2016 compared to $349 million as of June 30, 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 and the expanding commitment of the government for an additional 10,000 Syrian refugees.

With the exception of Rentals, Transfer Payments and Passport Resendable Revenue, the remaining operating expenditures have not encountered significant quarter over quarter variances.

Rentals increased by $2 million (24%) compared to the same quarter in the previous year. It is mainly explained by a slight increase in license and maintenance fees for client software and in office rental, which are both coded under the Rental category in the Government chart of accounts.

Transfer Payments increased by $23 million (8%) 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.

Passport re-spendable revenue increased by $12 million (8%) compared to the same quarter in the previous year and it is due to a slight increase in volume.  However, the bulk of the increase ($9 million) is a result of a timing difference for an adjustment that was not reflected in the first quarter of this fiscal year but instead reflected in the second quarter. This resulted in a variance of $9 million in revenue for the first quarter of this fiscal year when compared to the same quarter in the previous year.

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 agenda to improve client service.

Unforeseen Events and Natural Disasters

Unforeseen events such as the impact of the civil war in Syria and the response of the Canadian government to the crisis 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.

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

Marta Morgan was appointed Deputy Minister of Immigration, Refugees and Citizenship Canada effective June 27, 2016.

Daniel Mills was appointed in the position of Acting Assistant Deputy Minister/Chief Financial Officer effective July 18, 2016.

On February 27, 2016, the Government fulfilled its commitment to bring 25,000 Syrian refugees to Canada. However, the important work of settlement continues, and will do so for a number of years. The Government expanded its commitment of resettling an additional 10,000 Syrian refugees by December 2016. The Government of Canada is working in collaboration with the United Nations High Commissioner for Refugees and with Canadians, including private sponsors, non-governmental organizations, provincial, territorial and municipal governments to achieve this commitment.

Approval by Senior Officials

Approved by:

Marta Morgan
Deputy Minister

Daniel Mills, CPA, CMA
Acting Assistant Deputy Minister
Chief Financial Officer

Ottawa, Canada
August 24, 2016

Statement of Authorities

Authorities
(in thousands of dollars)
Fiscal Year 2016-17 Fiscal Year 2015-16
Total available for use for the year ending March 31, 2017Table 1 footnote 1 Used during the quarter ended
June 30, 2016
Year-to-date used at quarter-end Total available for use for the year ending March 31, 2016Table 1 footnote 1 Used during the quarter ended
June 30, 2015
Year-to-date used at quarter-end
Vote 1 - Operating Expenditures 664,963 122,616 122,616 566,527 118,732 118,732
Vote 5 - Capital Expenditures 18,181 1,544 1,544 - - -
Vote 10 - Grants and Contributions 1,270,833 304,761 304,761 993,529 282,104 282,104
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 69,192 16,194 16,194 60,680 15,170 15,170
Minister's Salary and Motor Car Allowance 84 7 7 84 21 21
FSW Fees Returned (Terminated Applications) 588 588 588 29,500 (628) (628)
IIP and EN Fees Returned (Terminated Applications) 112 112 112 16,500 2,693 2,693
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 30 - - 12 - -
Court Awards 13 13 13 4 4 4
Refunds of Previous Years Revenue 2,666 2,666 2,666 1,666 1,666 1,666
Passport Program Revolving Fund (184,208) (77,895) (77,895) (202,153) (71,219) (71,219)
Total Budgetary Authorities 1,842,454 370,606 370,606 1,466,349 348,543 348,543
Non-Budgetary AuthoritiesTable 1 footnote 2 64,975 (1,530)Table 1 footnote 3 (1,530) 68,451 (1,284) (1,284)
Total Authorities 1,907,429 369,076 369,076 1,534,800 347,259 347,259

Departmental Budgetary Expenditures by Standard Object

Expenditures
(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 June 30, 2016 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2016 Expended during the quarter ended June 30, 2015 Year-to-date used at quarter-end
Expenditures
Personnel 528,358 129,224 129,224 492,331 125,343 125,343
Transportation and Communications 74,935 10,762 10,762 73,304 11,705 11,705
Information 7,989 1,237 1,237 8,489 1,064 1,064
Professional and Special Services 499,111 66,745 66,745 392,524 63,981 63,981
Rentals 17,897 10,263 10,263 25,522 8,258 8,258
Repair and Maintenance 6,669 274 274 5,705 254 254
Utilities, Materials and Supplies 71,039 8,567 8,567 51,166 7,138 7,138
Acquisition of Machinery and Equipment 38,400 615 615 25,387 886 886
Transfer Payments 1,270,833 304,761 304,761 993,529 282,104 282,104
Other Subsidies and Payments 3,379 5,584 5,584 47,702 4,268 4,268
Total Gross Budgetary Expenditures 2,518,610 538,032 538,032 2,115,659 505,001 505,001
Less Revenues Netted against Expenditures
Passport Program Respendable Revenue 666,218 163,119 163,119 639,372 151,406 151,406
Revenue Credited to the Vote 9,938 4,307 4,307 9,938 5,052 5,052
Total Net Budgetary Expenditures 1,842,454 370,606 370,606 1,466,349 348,543 348,543
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