Quarterly Financial Report for the quarter ended June 30, 2019

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 2019-20 Main Estimates Part II (PDF, 1.24 MB) and the 2018-19 Quarterly Financial Report for the quarter ended June 30, 2018.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2019-20 Departmental Plan (PDF, 1.11 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 2019–20 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 2019 Federal Budget priorities to be included in the 2019-20 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 2019-20 fiscal year as announced in the 2019 Federal Budget. Items funded through Budget 2019 are held in a separately managed Budget Implementation Vote (BIV). Through this vote, the Main Estimates included Budget 2019 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 separately until supporting policy and program approvals are in place. After approvals, funds will be transferred to the department’s regular votes.

In 2019-20, IRCC’s total authorities include the Main Estimates, incremental funding from Budget 2019 related to Interim Federal Health Program, Enhancing the Integrity of Canada’s Borders and Asylum system, Improving Immigration Client Service, and Helping Travellers Visit Canada, as well as other minor adjustments related to statutory items.

The introduction of the 10 year passport in July 2013 has an impact on the Passport program as applicants who opted to apply for the 10 year Passport are no longer required to re-apply at the 5 year expiration mark. This has resulted in a reduction of Passport applications, hence a decrease in overall revenue for this program.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2019–20 increased by approximately $778.5 million (33%) compared to the same quarter in 2018–19. This increase is comprised of:

The most significant changes to authorities available for use are related to an increase in funding received to support provinces and municipalities for temporary housing with respect to increased volume of asylum claimants, an increase in funding for Enhancing the Integrity of Canada’s Borders and Asylum System, an increase in funding for Canada-Quebec Accord and funding to support higher admission levels for permanent residents as per the Immigration Levels Plans. There is also an increase due to statutory adjustments related to Passport Program Revolving Fund to offset the impact of the anticipated decrease in revenues that started in 2018-19 and for the remainder of its 10 year business cycle, subsequent to the introduction of the 10-year passport in 2013.

These increases were partly offset by the reduction in the funding profile for the Government’s response to the Syrian Refugee crisis. While processing and resettlement activities have been completed, Syrian refugees continue to have access to settlement services provided by the Department.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures Authorities net increase of $232.7 million (28%) is explained as follows:

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures Authorities net increase of $0.4 million (2%) is explained as follows:

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions Authorities net increase of $431.6 million (32%) is explained as follows:

Budgetary Statutory Authorities

The 2019–20 statutory authority level in the first quarter has increased by $113.6 million (71%) compared to 2018-19 which is primarily explained as follows:

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 30 have increased by $128.6 million (18%) compared to the same quarter in 2018-19. This variance is attributable to changes related to Personnel, Transportation and Communications, Professional and Special Services, Transfer payments and Other Subsidies and Payments expenditures. Through the Passport Program and International Experience Canada, IRCC generated $77.0 million and $3.8 million respectively in re-spendable revenues in the first quarter of 2019-20. This results in a net budgetary expenditure of $751.3 million as of June 30, 2019 compared to $579.1 million as of June 30, 2018.

Personnel expenditures have increased by $13.8 million (9%) which is mainly due to increases in salary funding received for initiatives such as the Protecting Temporary Foreign Workers and the Immigration Levels Plan initiatives. The increase is also due to additional personnel expenditures to keep pace with programs’ growth.

Transportation and Communications expenditures have decreased by $2.1 million (20%) which is mainly due to a decrease in Passport shipping and material costs as a result of the volume decrease in passport applications following the introduction of the 10 year passport in July 2013 allowing applicants to opt for a 10 year expiration instead of 5.

Professional and Special Services expenditures have increased by $4.9 million (6%) which is mainly comprised of $6.4 million for Biometrics transaction costs, $2.2 million for the Interim Federal Health (IFH) program, and $1.7 million related to various IT projects. These increases were partly offset by a decrease of $7.2 million in passport delivery costs incurred by Employment and Social Development Canada (ESDC).

Transfer payments have increased by $116.0 million (27%). The increase is mainly explained by an increase of $68.1 million in spending to support provinces and municipalities for the interim housing of Asylum seekers, an increase of $34.6 million in spending for the Canada-Quebec Accord and a decrease of $10.6 million in spending related to the Syria initiative as the vast majority of this work was completed in previous years. The remaining increase is mostly attributable to higher admission of permanent residents as per Immigration Levels Plans.

Other Subsidies and Payments have decreased by $4.6 million (22%) which is mainly due to a decrease in the outstanding Interdepartmental Settlement amounts.

Passport re-spendable revenues have decreased by $44.4 million (37%) compared to the same quarter in the previous year due largely to the expected volume reductions following the introduction of the 10 year passport.

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 increases in Temporary Resident applications and the management of the influx of asylum seekers 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 transformation 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.

IRCC and partner departments will continue to respond to the influx of asylum seekers crossing between ports of entry. This situation involves multiple departments along with impacts to provinces and municipalities. IRCC and partner departments received funding in 2019-20 Main Estimates and Budget 2019 to help respond to this issue.

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

IRCC operates in a 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

The Prime Minister announced on April 23, 2019 that Deputy Minister, Marta Morgan, would take over as the Deputy Minister at Global Affairs Canada, effective May 6. In the interim, Lori MacDonald Associate Deputy Minister was acting Deputy Minister. The Prime Minister announced on August 7, 2019 that Catrina Tapley will join IRCC as the new Deputy Minister effective August 19.

David Manicom, Assistant Deputy Minister, Settlement and Integration Sector, has left the department as of June 6, 2019.

There have been no other significant changes in relation to operations, personnel and programs during the quarter ended June 30, 2019.

Approval by Senior Officials

Approved by:

(Original signed by)
Lori MacDonald
Acting Deputy Minister

(Original signed by)
Daniel Mills, CPA, CMA
Assistant Deputy Minister
Chief Financial Officer

Ottawa, Canada
August 21, 2019

Statement of Authorities (in thousands of dollars)
(in thousands of dollars) Fiscal Year 2019-20 Fiscal Year 2018-19
Total available for use for the year ending March 31, 2019Footnote 1 Used during the quarter ended
June 30, 2019
Year-to-date used at quarter-end 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
Vote 1 - Operating Expenditures 1,069,741 186,102 186,102 837,010 170,429 170,429
Vote 5 - Capital Expenditures 22,243 2,832 2,832 21,816 3,550 3,550
Vote 10 - Grants and Contributions 1,788,066 538,157 538,157 1,356,449 422,124 422,124
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 89,072 18,626 18,626 70,647 17,214 17,214
Minister's Salary and Motor Car Allowance 88 22 22 86 22 22
FSW Fees Returned (Terminated Applications) 133 133 133 214 214 214
IIP and EN Fees Returned (Terminated Applications) 51 51 51 78 78 78
Spending of Amounts Equivalent to Proceeds from
Disposal of Surplus Moveable Crown Assets
20 - - 13 1 1
Court Awards - - - - - -
Refunds of Previous Years Revenue 4,980 4,980 4,980 2,862 2,862 2,862
Passport Program Revolving Fund 178,824 354 354 85,607 (37,379) (37,379)
Total Budgetary Authorities 3,153,218 751,257 751,257 2,374,782 579,115 579,115
Non-Budgetary AuthoritiesFootnote 2 57,314 843Footnote 3 843 68,017 (3,043)Footnote 3 (3,043)
Total authorities 3,210,532 752,100 752,100 2,442,799 576,072 576,072
Departmental Budgetary Expenditures by Standard Object (in thousands of dollars)
(in thousands of dollars) Fiscal Year 2019-20 Fiscal Year 2018-19
Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended June 30, 2019 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended June 30, 2018 Year-to-date used at quarter-end
Expenditures
Personnel 706,201 164,695 164,695 615,265 150,941 150,941
Transportation and Communications 50,164 8,705 8,705 51,758 10,815 10,815
Information 9,336 788 788 11,443 506 506
Professional and Special Services 745,781 85,203 85,203 598,613 80,286 80,286
Rentals 32,329 9,080 9,080 31,114 9,363 9,363
Repair and Maintenance 8,320 118 118 10,282 675 675
Utilities, Materials and Supplies 30,180 7,321 7,321 31,898 6,397 6,397
Acquisition of Machinery and Equipment 43,214 1,235 1,235 37,270 928 928
Transfer Payments 1,788,066 538,157 538,157 1,356,449 422,124 422,124
Other Subsidies and Payments 20,498 16,802 16,802 25,487 21,423 21,423
Total gross budgetary expenditures 3,434,089 832,104 832,104 2,769,579 703,458 703,458
Less Revenues Netted against Expenditures
Passport Program 270,933 77,012 77,012 384,859 121,365 121,365
International Experience Canada 9,938 3,835 3,835 9,938 2,978 2,978
Total net budgetary expenditures 3,153,218 751,257 751,257 2,374,782 579,115 579,115
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