Quarterly Financial Report for the quarter ended June 30, 2018
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 2018–19 Main Estimates Part II (PDF, 1.79 MB) and the 2017–18 Quarterly Financial Report for the quarter ended June 30, 2017.
A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2018-19 Departmental Plan (PDF, 1.32 MB).
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 2018–19 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
In June 2017, the House of Commons approved a change allowing the Main Estimates to be tabled in Parliament by April 16th instead of March 1st, which allowed the 2018 Federal Budget priorities to be included in the 2018-19 Main Estimates. These changes address the government’s commitment to provide more coherent information to Parliament and to align the Federal Budget and the Estimates.
The Main Estimates present financial requirements for the full 2018-19 fiscal year as announced in the 2018 Federal Budget. Items funded through Budget 2018 are held in a centrally managed Budget Implementation Vote (BIV). Through this vote, the Main Estimates will include 100% of Budget 2018 incremental spending measures, improving Budget-Estimates alignment and eliminating some of the time lag between announcement and implementation of programs. The funds will be held centrally until supporting policy and program approvals are in place. After approvals, funds will be transferred to responsible departments.
In 2018-19, IRCC’s total authorities include the Main Estimates, incremental funding from Budget 2018 related to Irregular Migration and Managing the Canada-US Border and other minor adjustments related to statutory items.
For this quarterly report, no authorities through Supplementary Estimates (A) are included as these will now be tabled in the fall of 2018 following the change outlined above. Note that for 2017-18, authorities through Supplementary Estimates (A) were requested during the first quarter.
Significant Changes to Authorities
As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2018–19 increased by approximately $577 million (32%) when compared to the same quarter in 2017–18. This increase is comprised of:
- an increase of $217 million (35%) in Vote 1 – Operating Expenditures
- a decrease of $6 million (22%) in Vote 5 – Capital Expenditures
- an increase of $125 million (10%) in Vote 10 – Grants and Contributions
- an increase of $241 million (297%) in Statutory Authorities
The most significant changes to the authorities above relate to the increase in funding to support higher admission levels for permanent residents as per the 2017 Immigration Levels Plan and the 2018 Immigration Levels Plan, an increase in Interim Federal Health funding, an increase in Canada-Quebec Accord funding and an increase due to statutory adjustments related to the Passport Canada revolving fund to offset the impact of the anticipated decrease in revenues starting in 2018-19 and for the remainder of the second half of its business cycle, subsequent to the introduction of the 10-year passport in 2013.
These were partly offset by the reduction of funding levels received for the Government of Canada’s response to the Syrian refugee crisis. As processing and resettlement activities are completed, the Department will now focus on Settlement Services to Syrian Refugees which explains the year-over-year reduction in funding related to the Syrian Refugees Crisis.
Vote 1 – Operating Expenditures
The Department’s Vote 1 – Operating Expenditures Authorities increase of $217 million (35%) is explained as follows:
- Increase of $242 million attributable to:
Additional Funding for ($242 million):
- The Interim Federal Health program increase in overall demand due to restauration to pre-2012 parameters and higher volumes ($90 million);
- Higher admission levels for permanent residents as per the 2018 Annual Immigration Levels Plan ($50 million);
- The continuation of Biometric Expansion screening in Canada’s immigration system ($40 million);
- Higher admission levels for permanent residents as per the 2017 Annual Immigration Levels Plan ($16 million);
- The Irregular Migration initiative as set out in the Budget 2018 priorities - Budget Implementation Vote (BIV) ($14 million);
- The Compensation Adjustments related to the settlement of collective agreements ($13 million);
- The Citizenship Revocation Process under the Citizenship Act ($6 million);
- The strengthening of the process for claiming asylum in Canada in order to deter potential abuse by claimants ($5 million);
- The removal of visa requirements for citizens of Mexico ($2 million);
- The Path Forward Temporary Foreign Worker program ; and
- Other Adjustments ($4 million).
- Decrease of $25 million attributable to:
Decrease in Funding for ($10 million):
- The reduction of funding for the Government’s response to the Syrian Refugee crisis ($4 million);
- The processing in Temporary Resident applications due to planned efficiencies ($3 million);
- The management and protection of classified information in assessing applications under the Immigration and Refugee Protection Act (IRPA) ($2 million); and
- The Electronic Travel Authorization Program as the initiative was completed in 2016-17 and has entered its operating phase ($1 million).
Transfers decreasing IRCC’s Vote 1 – Operating Expenditures ($15 million):
- Transfer to Global Affairs Canada and Shared Services Canada to support staff across the overseas network ($10 million); and
- Internal Vote Transfer - Vote 1 to Vote 5 for Capital Projects ($5 million).
Vote 5 – Capital Expenditures
The Department’s Vote 5 – Capital Expenditures Authorities net decrease of $6 million (22%) is explained as follows:
- Increase of $11 million attributable to additional funding for:
Increase in Funding for ($6 million):
- Higher admission levels for permanent residents as per the 2018 Annual Immigration Levels Plan ($6 million); and
Transfers increasing IRCC`s Vote 5 - Capital Expenditures ($5 million):
- Internal Vote Transfer - Vote 1 to Vote 5 for Capital Projects ($5 million).
- Decrease of $17 million attributable to lower IT system investment requirements for:
- The Biometric Expansion project to verify the identity of all visa required travelers seeking entry to Canada ($13 million);
- The Entry-Exit initiative ($3 million); and
- The admission levels for permanent residents as per the 2017 Annual Immigration Levels Plan ($1 million).
Vote 10 – Grants and Contributions (G&C)
The Department’s Vote 10 – Grants and Contributions Authorities net increase of $125 million (10%) is explained as follows:
- Increase of $181 million attributable to additional funding for:
- The grant related to the Canada-Quebec Accord on immigration ($112 million);
- Higher admission levels for permanent residents as per the 2017 Annual Immigration Levels Plan ($55 million);
- Higher admission levels for permanent residents as per the 2018 Annual Immigration Levels Plan ($9 million); and
- The Survivors of Daesh, including Yazidi women and girls ($5 million).
- Decrease of $56 million attributable to decrease in funding for:
- The Government’s response to the Syrian Refugee crisis as processing and resettlement activities have been completed, the Department continues to focus on Settlement Services to Syrian Refugees which explains the year-over-year reduction in funding related to the Syrian Refugees Crisis. ($53 million) ; and
- The Global Assistance for Irregular Migrants (GAIM) program ($3 million).
Budgetary Statutory Authorities
The 2018–19 statutory authority level in the first quarter is higher than 2017–18 by $241 million (297%) and is primarily explained as follows:
- Increase of $242 million mainly attributable to:
- Increase due to statutory adjustments for the Passport Program revolving fund to offset anticipated revenue shortfall where in-year expenses are projected to be higher than in-year revenues as the Program enters the second half of its business cycle. This shortfall is funded from accumulated surpluses since the introduction of the 10-year passport in 2013 ($237 million); and
- Adjustments to Employee Benefit Plans ($5 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 during the quarter ending June 30th have increased by $103.5 million (17%) from $600 million in 2017-18 to $703.5 million in 2018-19. This increase mainly stems from changes related to Personnel, Professional and Special Services, Transfer payments and Other Subsidies and Payments expenditures. Through the Passport Program and International Experience Canada, IRCC generated $121.4 million and $3 million respectively in re-spendable revenues in the first quarter of 2018-19. This represents a net budgetary expenditure of $579.1 million as of June 30, 2018 compared to $435.3 million as of June 30, 2017.
Personnel expenditures increased by $17.3 million (13%) and is mainly the result of collective agreements having been finalized in the second quarter of last year, which resulted in an overall increase in employee salaries. The increase is also attributable to the higher admission levels from the 2017 and 2018 Levels Plan for permanent residents as well as other initiatives such as the irregular migration files which required additional resources to support IRCC commitments.
Professional and Special Services increased by $8 million (11%) and is mainly explained by a timing difference in the Department of Justice’s invoicing of $5.4 million as well as an increase of $2.5 million in Interim Federal Health (IFH) program spending.
Transfer payments increased by $65.1 million (18%). The increase is mainly explained by an increase of $56 million in spending for the Canada-Quebec Accord grant program. There was an increase of $10.9 million in spending attributable to the higher admission levels from the 2017 and 2018 Levels Plan for permanent residents. This was partly offset by a decrease of $2.1 million in spending related to the Syria initiative as the vast majority of this work was completed in previous years.
Other Subsidies and Payments increased by $16.2 million (309%) and is mainly due to Interdepartmental Settlement amounts not cleared at this first quarter end. $8 million of this amount was cleared in the second quarter and another $8 million will be cleared shortly once MOU details are confirmed by Shared Services Canada.
Passport re-spendable revenue have decreased by $41.1 million (25%) compared to the same quarter in the previous year and it is due largely to volume reduction.
4. 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. For IRCC, continued increase in Temporary Resident applications and the management of the influx of the irregular migrants at the Canada-US border are priorities that are closely monitored.
As part of its risk mitigation strategy, IRCC is continuously working towards improving its own internal processes and systems through change initiatives such as the modernization and experimentation agenda with the objective to improve client service.
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.
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.
This summer, IRCC and partner departments will continue to respond to the influx of asylum seekers crossing between port of entry. This situation involves multiple departments along with impacts to provinces and municipalities. IRCC and partner departments received funding in Budget 2018 to help respond to this issue. The Department continues to monitor the situation to determine its overall impact on its financial situation.
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 several years, there has been a significant increase in the volume 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.
5. Significant Changes in Relation to Operations, Personnel and Programs
There have been no other significant changes in relation to operations, personnel and programs during the quarter ended June 30, 2018.
Under the Policy on Results, the IRCC Departmental Results Framework was approved by Treasury Board on June 5, 2017. This framework replaces the Program Activity Architecture and has been in effect as of April 1, 2018.
Approval by Senior Officials
Daniel Mills, CPA, CMA
Assistant Deputy Minister
Chief Financial Officer
August 21, 2018
Statement of Authorities (in thousands of dollars)
|Fiscal Year 2018-19||Fiscal Year 2017-18|
|Total available for use for the year ending March 31, 2019Footnote 1||Used during the quarter ended
June 30, 2018
|Year-to-date used at quarter-end||Total available for use for the year ending March 31, 2018Footnote 1||Used during the quarter ended
June 30, 2017
|Year-to-date used at quarter-end|
|Vote 1 - Operating Expenditures||837,010||170,429||170,429||620,431||128,505||128,505|
|Vote 5 - Capital Expenditures||21,816||3,550||3,550||27,876||1,736||1,736|
|Vote 10 - Grants and Contributions||1,356,449||422,124||422,124||1,231,051||357,024||357,024|
|Budgetary Statutory Authorities|
|Contributions to Employee Benefit Plans||70,647||17,214||17,214||65,780||14,673||14,673|
|Minister's Salary and Motor Car Allowance||86||22||22||84||-||-|
|FSW Fees Returned (Terminated Applications)||214||214||214||187||187||187|
|IIP and EN Fees Returned (Terminated Applications)||78||78||78||149||149||149|
|Spending of Amounts Equivalent to Proceeds from
Disposal of Surplus Moveable Crown Assets
|Refunds of Previous Years Revenue||2,862||2,862||2,862||3,706||3,706||3,706|
|Passport Program Revolving Fund||85,607||(37,379)||(37,379)||(151,038)||(70,697)||(70,697)|
|Total Budgetary Authorities||2,374,782||579,115||579,115||1,798,244||435,283||435,283|
|Non-Budgetary AuthoritiesFootnote 2||68,017||(3,043)Footnote 3||(3,043)||64,096||(2,545)||(2,545)|
Departmental Budgetary Expenditures by Standard Object (in thousands of dollars)
|Fiscal Year 2018-19||Fiscal Year 2017-18|
|Planned expenditures for the year ending March 31, 2019||Expended during the quarter ended June 30, 2018||Year-to-date used at quarter-end||Planned expenditures for the year ending March 31, 2018||Expended during the quarter ended June 30, 2017||Year-to-date used at quarter-end|
|Transportation and Communications||51,758||10,815||10,815||57,675||12,257||12,257|
|Professional and Special Services||598,613||80,286||80,286||445,976||72,268||72,268|
|Repair and Maintenance||10,282||675||675||6,794||125||125|
|Utilities, Materials and Supplies||31,898||6,397||6,397||51,872||8,670||8,670|
|Acquisition of Machinery and Equipment||37,270||928||928||28,602||222||222|
|Other Subsidies and Payments||25,487||21,423||21,423||4,042||5,240||5,240|
|Total gross budgetary expenditures||2,769,579||703,458||703,458||2,417,509||600,001||600,001|
|Less Revenues Netted against Expenditures|
|International Experience Canada||9,938||2,978||2,978||9,938||2,257||2,257|
|Total net budgetary expenditures||2,374,782||579,115||579,115||1,798,244||435,283||435,283|
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