Quarterly Financial Report for the quarter ended June 30, 2020

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 2020-21 Main Estimates Part II (PDF, 1.06 MB) and the 2019-20 Quarterly Financial Report for the quarter ended June 30, 2019.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2020-21 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 2020–21 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. This change, in effect for the remaining duration of the 42nd Parliament, resulted in the government tabling an Interim Estimates by mid-February to support Parliament’s scrutiny of interim supply, and tabling the Main Estimates in April, after the Federal Budget. With the end of this pilot project, tabling of Main Estimates returned to its normal schedule (by March 1) and funding no longer includes announcements made in the Federal Budget.

Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall. Hence, full supply for the 2020-21 Main Estimates is anticipated in December 2020.

In 2020-21, IRCC’s total authorities for the first quarter include two interim supplies for the Main Estimates and incremental funding provided through the Supplementary Estimates A, mainly to support provinces and municipalities for temporary housing with respect to increased volume of asylum claimants, and for information technology systems interoperability under the Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019. Minor adjustments related to statutory items are also a part of IRCC’s total authorities.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2020-21 decreased by approximately $407.3 million (-13%) compared to the same quarter in 2019-20. The net decrease is comprised of:

The most significant changes to authorities available for use mainly consist of a decrease of $221.3 million in authorities available for use as per the Main Estimates. Due to the impacts of the COVID-19 pandemic and the limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period of supply into the Fall, and therefore, delaying full supply for the 2020-21 Main Estimates until December 2020. As at June 30, 2020, IRCC has received two interim supplies for 2020-21.

Changes to authorities also include a decrease of $221.5 million to support provinces and municipalities for the temporary housing with respect to the increased volume of asylum claimants. IRCC received $324 million in the 2019-20 Main Estimates to support provinces and municipalities for the temporary housing with respect to the increased volume of asylum claimants. The unused amount of $102.5 million was carried into 2020-21 through the Supplementary Estimates.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures Authorities net decrease of $94.8 million (-9%) is explained as follows:

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures Authorities net increase of $0.9 million (4%) is explained as follows:

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions Authorities net decrease of $261.2 million (-15%) is explained as follows:

Budgetary Statutory Authorities

The 2020-21 statutory authority level in the first quarter decreased by $52.2 million (-19%) compared to 2019-20 which is primarily explained as follows:

4. 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, IRCC’s total gross budgetary expenditures during the quarter ending June 30, 2020 decreased by $73.4 million (-9%) compared to the same quarter in 2019-20. As described below, this variance is mainly 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, IRCC generated $4.5 million in re-spendable revenues in the first quarter of 2020-21. Overall, this resulted in a net budgetary expenditure of $754.2 million as of June 30, 2020 compared to $751.3 million as of June 30, 2019.

Personnel expenditures have increased by $9.9 million (6%) which is mainly due to increases in salary as a result of all newly signed collective agreements and other compensation-related adjustments.

Transportation and Communications expenditures have decreased by $8.2 million (-94%) which is mainly comprised of $5.5 million in reduced spending related to passport material and postage costs as a result of a lower production volume due to the Government of Canada focused efforts on the COVID-19 pandemic, and $2.3 million for travel related to operational activities.

Professional and Special Services expenditures have decreased by $19.3 million (-23%) which is mainly explained by a decrease in spending towards IRCC’s operational requirements attributable to travel and border restrictions, as well as the postponement of work-site inspections for the International Mobility Program by a partner department as a result of the COVID-19 pandemic. The decrease was offset by an increase of $4.8 million in spending for the Interim Federal Health (IFH) program.

Transfer payments have decreased by $39.4 million (-7%). The decrease is mainly explained by a decrease of $68.1 million in payments to provinces and municipalities for the Interim Housing Assistance Program, a decrease of $5.1 million in payments to refugees through the Resettlement Assistance Program, an increase of $16.1 million in spending for the Canada-Quebec Accord, and an increase of $17.7 million in payments to local non-profit organizations to support the Settlement Program because of previous quarter advances.

Other Subsidies and Payments expenditures have decreased by $12.4 million (-74%) which is mainly due to outstanding Interdepartmental Settlement amounts reported in the same quarter last fiscal year.

Passport re-spendable revenues have decreased by $72.6 million (-94%) compared to the same quarter in the previous year mainly due to the decrease in volumes attributable to the COVID-19 pandemic.

International Experience Canada revenues have decreased by $3.8 million (100%) compared to the same quarter in the previous year due to lower demand for the program as a result of travel and border restrictions to enter Canada related to the COVID-19 pandemic.

5. 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.

As part of its risk mitigation strategy, IRCC is currently monitoring and assessing the impacts of the COVID-19 pandemic on its operations while continuing to work 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 by automating processes enabling the department to maintain operations in the pandemic environment.

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 and may also affect the department’s clients.

As COVID-19 was declared a pandemic in March 2020, it has affected the government’s priorities and operations in the current fiscal year, including IRCC. The impact includes the closure of Canadian borders to all non-essential travel which translates into a decrease in volumes in the Temporary and Permanent Resident streams. As the pandemic continues to evolve, IRCC will continue to closely monitor its impact on its operations and take measures and adopt financial strategies to adapt to the new reality.

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 its operations, commitments, service standards and processing targets.

Litigation and Legal

IRCC operates in a very 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.

6. Significant Changes in Relation to Operations, Personnel and Programs

Effective April 1, 2020, Dr. Harpreet Kochhar, Associate Deputy Minister, Operations Sector, was appointed Associate Deputy Minister of Health Canada and Daniel Mills was appointed to the position Assistant Deputy Minister Operations effective April 27, 2020.

Holly Flowers Code has temporarily assumed the position of Assistant Deputy Minister, Corporate Services since April 27, 2020.

Effective May 11, 2020, Bob Lanouette has been appointed to coordinate planning and efforts for the gradual return of IRCC employees to the workplace as part of the department’s response to the Covid-19 pandemic.

Hughes St-Pierre was appointed as the new Chief Financial officer (CFO) and Comptroller effective May 19, 2020.

Dr. Nicole Giles was appointed as Associate Assistant Deputy Minister, Operations Sector effective June 29, 2020.

There have been no other significant changes in relation to operations, personnel and programs during the quarter ended June 30, 2020.

Approval by Senior Officials

Approved by:

(Original signed by)
Catrina Tapley
Deputy Minister

(Original signed by)
Hughes St-Pierre, MA, CPA, CMA
Chief Financial Officer/
Comptroller

Ottawa, Canada
August 21, 2020

 

Statement of Authorities
(in thousands of dollars) Fiscal Year 2020-21 Fiscal Year 2019-20
Total available for use for the year ending March 31, 2021Footnote 1 Used during the quarter ended June 30, 2020 Year-to-date used at quarter-end Total available for use for the year ending March 31, 2020Footnote 1 Used during the quarter ended June 30, 2019 Year-to-date used at quarter-end
Vote 1 - Operating Expenditures 974,935 186,680 186,680 1,069,741 186,102 186,102
Vote 5 - Capital Expenditures 23,120 2,656 2,656 22,243 2,832 2,832
Vote 10 - Grants and Contributions 1,526,897 498,765 498,765 1,788,066 538,157 538,157
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 81,657 15,266 15,266 89,072 18,626 18,626
Minister's Salary and Motor Car Allowance 89 22 22 88 22 22
Federal Skilled Worker Fees Returned (Terminated Applications) 49 49 49 133 133 133
Immigrant Investor Program and Entrepreneur Program Fees Returned (Terminated Applications) 19 19 19 51 51 51
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 11     20    
Court Awards            
Refunds of Previous Years Revenue 2,198 2,198 2,198 4,980 4,980 4,980
Passport Program Revolving Fund 136,984 48,496 48,496 178,824 354 354
Total Budgetary Authorities 2,745,959 754,151 754,151 3,153,218 751,257 751,257
Non-Budgetary AuthoritiesFootnote 2 44,764 (3,574)Footnote 3 (3,574) 57,314 843Footnote 3 843
total authorities 2,790,723 750,577 750,577 3,210,532 752,100 752,100
Departmental Budgetary Expenditures by Standard Object
(in thousands of dollars) Fiscal Year 2020-21 Fiscal Year 2019-20
Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended June 30, 2020 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended June 30, 2019 Year-to-date used at quarter-end
Expenditures
Personnel 681,222 174,612 174,612 706,201 164,695 164,695
Transportation and Communications 48,284 538 538 50,164 8,705 8,705
Information 8,713 305 305 9,336 788 788
Professional and Special Services 677,634 65,931 65,931 745,781 85,203 85,203
Rentals 26,124 8,359 8,359 32,329 9,080 9,080
Repair and Maintenance 16,306 109 109 8,320 118 118
Utilities, Materials and Supplies 37,331 4,077 4,077 30,180 7,321 7,321
Acquisition of Machinery and Equipment 37,782 1,553 1,553 43,214 1,235 1,235
Transfer Payments 1,526,897 498,765 498,765 1,788,066 538,157 538,157
Other Subsidies and Payments 8,106 4,360 4,360 20,498 16,802 16,802
Total gross budgetary expenditures 3,068,399 758,609 758,609 3,434,089 832,104 832,104
Less Revenues Netted against Expenditures
Passport Program 312,502 4,458 4,458 270,993 77,012 77,012
International Experience CanadaFootnote 1 9,938     9,938 3,835 3,835
Total net budgetary expenditures 2,745,959 754,151 754,151 3,153,218 751,257 751,257
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