Quarterly Financial Report for the quarter ended September 30, 2023

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 2023-24 Main Estimates Part II and the 2022-23 Quarterly Financial Report for the quarter ended September 30, 2022.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2023-24 Departmental Plan.

1.1 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 2023-24 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 Report process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.2 IRCC’s Financial Framework

In order to deliver on its mandate, IRCC is funded through three budgetary mechanisms:

i. Appropriations

• Voted appropriations:
  • Vote 1 – Operating Expenditures;
  • Vote 5 – Capital Expenditures; and
  • Vote 10 – Grants and Contributions (G&C)
• Special Purpose Allotments including the Interim Federal Health Program and the Immigration and Refugee Protection Act’s Division 9.
• Budgetary statutory authorities is comprised of Employee Benefit Plan.

ii. Vote-Netted Revenue (VNR under Vote 1)

• International Experience Canada (IEC) Program

iii. Revolving Fund

• Statutory authorities also includes the Passport Program Revolving Fund.

Additionally, IRCC’s non-budgetary authorities consist of Immigration loans, primarily to resettled refugees (99%) to help defray the cost of their travel to Canada and to their final destination within Canada.

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

The 2023-24 Main Estimates include authorities that were approved up until January 2023. Funding approved afterwards is sought via the Supplementary Estimates process.

In 2023-24, IRCC’s total authorities as at September 30, 2023 include full supply for the Main Estimates and incremental funding provided through the Supplementary Estimates (A) to provide health care services to refugees and asylum seekers under the Interim Federal Health Program and to respond to the crises in Afghanistan and Ukraine.

Total authorities to date also include funding from the 2022-23 Operating and Capital Budget Carry Forward.

Budget 2023 affirmed a commitment to refocus government spending, including spending on travel and professional services. All government departments are being asked to contribute to finding efficiencies and to reduce spending over multiple years in order to refocus funds on critical services to Canadians. IRCC’s budget reductions for 2023-24 totals $20.4 million, whereas the reductions for 2024-25 and onwards will be reflected in upcoming Main Estimates and the 2024-25 IRCC Departmental Plan.

2.1 Significant changes to authorities

The following table shows the total budget available for use by IRCC. Only authorities available for use and granted by Parliament as at September 30, 2023 are included.

IRCC’s total budgetary authorities available for use in fiscal year 2023-24 increased by approximately $656.5 million (15%) compared to the same quarter in 2022-23.

i. Authorities for Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures authorities increased by $745.6 million (42%), which is mainly explained by the following items:

• Incremental funding of $367.7 million to continue providing temporary accommodations and support services to asylum seekers;
• Incremental funding of $202.3 million for the processing activities related to Canada’s commitment to resettle at least 40,000 Afghan nationals;
• Incremental funding of $130.6 million to implement the multi-year Immigration Levels Plans;
• Incremental funding of $94.2 million to proceed with building Canada’s modern, digital, and data-driven migration system announced in Budget 2021;
• Incremental funding of $57.8 million to provide health care services to refugees and asylum seekers under the Interim Federal Health Program;
• Decrease in funding of $110.3 million due to funding fluctuations related to IRCC’s immigration approach to provide the new pathway to facilitate temporary and permanent residence for Ukrainian Nationals and their families; and
• Decrease in funding of $26.2 million related to transfers to Global Affairs Canada to support departmental staff located at missions abroad.

ii. Authorities for Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities decreased by $10.3 million (27%), which is mainly explained by the following item:

• Decrease in funding of $9.6 million due to funding fluctuations related to Canada’s modern, digital, and data-driven migration system announced in Budget 2021.

iii. Authorities for Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions authorities increased by $8.1 million (0%), which is mainly explained by the following items:

• Incremental funding of $203.2 million for Canada’s commitment to resettle at least 40,000 Afghan nationals;
• Incremental funding of $29.7 million for the grant related to the Canada-Quebec Accord on Immigration;
• Decrease in funding of $173.0 million due to the sunset of funding for the provision of financial support to provinces and municipal governments to address interim housing pressures; and
• Decrease in funding of $45.3 million for IRCC’s immigration approach to provide one-time temporary financial support and settlement services to Ukrainian Nationals.

iv. Budgetary Statutory Authorities

The 2023-24 statutory authority level in the second quarter decreased by $86.9 million (37%) compared to 2022-23, which is explained as follows:

• Decrease of $103.4 million in the Passport Program due to an increase in revenues and costs associated with higher demands for passports and travel documents following the lifting of pandemic travel restrictions and the impact of the 10 year passport renewals beginning in 2023-24;
• Decrease of $3.3 million related to other statutory authorities; and
• Increase of $19.7 million for the Employee Benefit Plans as a result of new funding received in Vote 1 – Operating Expenditures.

2.2 Significant changes to departmental budgetary expenditures by standard object

Quarter over quarter analysis

The following table shows IRCC’s budgetary expenditures and revenues netted against expenditures for the second period of the fiscal year, and their comparison with the same quarter of last fiscal year.

Note: Numbers may not add up due to rounding.

The total gross budgetary expenditures during the quarter ending September 30, 2023 increased by $134.8 million (11%) compared to the same quarter in 2022-23, which is mainly explained as follows:

i. Salaries and Employment Benefits have increased by $47.5 million (19%) which is attributable to increases in full-time equivalents to support various initiatives such as the implementation of the multi-year Immigration Levels Plan while supporting the government’s response to the Afghanistan and Ukrainian crises; the building of Canada’s modern, digital, and data-driven migration system; and the modernization of client support services.

ii. Transportation and Communications expenditures have increased by $4.3 million (27%) related to courier services due to an increase in the volume of travel documents seen this quarter compared to the quarter ended September 30, 2022.

iii. Professional and Special Services expenditures have increased by $89.8 million (38%) which is mainly related to an increase in temporary accommodation site costs, security services costs and health care services associated with the increased arrival of asylum claimants; an increase in payments to Employment and Social Development Canada (ESDC) due to delays in invoice processing carried over from the previous period of the 2023-24 fiscal year; an increase in operational costs to support third party Visa Application Centres (VAC) as a result of an increase in demand to support IRCC’s services; and an increase in temporary accommodations to support Ukrainian Nationals.

iv. Rentals expenditures have increased by $66.9 million (221%) which is attributed to a significant increase in temporary accommodation costs in response to the surge of asylum claimants seen in the second quarter of this fiscal year compared to the second quarter of 2022-23.

v. Utilities, Materials and Supplies expenditures have decreased by $10.1 million (65%) which is largely attributable to an oversupply of passport inventories from last fiscal year carrying over into this fiscal year, meaning that less printed materials were needed for the second quarter of 2023-24.

vi. Transfer Payments have decreased by $63.4 million (9%) which is mainly explained by decreased transitional financial assistance to Ukrainians offset by increased income support under the Resettlement Assistance Program; increased payments under the Settlement Program; and an increased payment under the Canada-Québec Accord.

Through the Passport Program and International Experience Canada, IRCC generated $138.6 million and $2.2 million respectively in re-spendable revenues in the second quarter of 2023-24. Overall, this resulted in net budgetary expenditures of $1,230.8 million as of September 30, 2023, compared to $1,143.5 million in the same quarter of 2022-23.

i. Passport re-spendable revenues have increased by $47.3 million (52%) compared to the same quarter in the previous fiscal year, due to a significant increase in passport applications issued in the second quarter of 2023-24 following the return to pre-pandemic levels of demand for travel documents.

ii. International Experience Canada revenues have increased by $0.3 million (14%) compared to the same quarter in the previous fiscal year as a result of an increase in the number of participants for the Program.

Cumulative analysis

The following table shows IRCC’s year-to date budgetary expenditures and revenues netted against expenditures, and their comparison with the same period last fiscal year.

Note: Numbers may not add up due to rounding.

IRCC’s year-to-date gross budgetary expenditures totalled $2,831.3 million in 2023-24, compared to $2,409.7 million in 2022-23, representing an increase of $421.6 million (17%), which is mainly explained by the following:

i. Salaries and Employment Benefits have increased by $91.8 million (19%) which is attributable to increases in full-time equivalents to support various initiatives such as the implementation of the multi-year Immigration Levels Plan while supporting the government’s response to the Afghanistan and Ukrainian crises; the building of Canada’s modern, digital, and data-driven migration system; and the modernization of client support services.

ii. Transportation and Communications expenditures have increased by $8.6 million (34%) related to courier services due to an increase in the volume of travel documents seen this fiscal year compared to the previous fiscal year.

iii. Professional and Special Services expenditures have increased by $160.3 million (39%) which is mainly related to an increase in temporary accommodation site costs, security services costs and health care services associated with the increased arrival of asylum claimants; an increase in the passport delivery services supported by Employment and Social Development Canada (ESDC); an increase in operational costs to support third party Visa Application Centres (VAC) as a result of an increase in demand to support IRCC’s services; and an increase in temporary accommodations to support Ukrainian Nationals.

iv. Rentals expenditures have increased by $134.3 million (276%) which is attributed to a significant increase in temporary accommodation costs in response to the surge of asylum claimants seen so far this fiscal year.

v. Utilities, Materials and Supplies expenditures have decreased by $15.2 million (52%) which is largely attributable to an oversupply of passport inventories from last fiscal year carrying over into this fiscal year.

vi. Transfer Payments have increased by $42.6 million (3%) which is mainly explained by increased payments to local non-profit organizations under the Settlement program due to timing of advance payments; increased income support and assistance to refugees under the Resettlement Assistance Program due to arrivals; and increased payments to Québec under the Canada-Québec Accord. These increases are offset by a decrease of transitional financial assistance to Ukrainians.

Through the Passport Program and International Experience Canada, IRCC generated $263.2 million and $5.0 million respectively in re-spendable revenues by the end of the second quarter of 2023-24. Overall, this resulted in net budgetary expenditures of $2,563.1 million as of September 30, 2023, compared to $2,239.8 million as of September 30, 2022.

i. Passport re-spendable revenues have increased by $98.3 million (60%) compared to the previous fiscal year, due to a significant increase in passport applications issued in the second quarter of 2023-24 following the return to pre-pandemic levels of demand for travel documents.

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, impacts of climate change on migration, the Canadian and global economic, social or political contexts, increasing cyber security threats and shifting migration trends.

Internal or management risks also may present as threats, opportunities or events that may influence the operations and service delivery of the Department. Risks such as system outages or the potential for labour disruptions have a direct impact on IRCC’s ability to deliver on its mandate and are therefore also factored into the Department’s forward thinking and planning.

Given IRCC’s ongoing efforts to review the scope and nature of its mandate and modernize its organization, operations, and service delivery model, the Department will operate in a challenging environment and is expected to continue to maintain pace and focus on the breadth of challenges, innovations and opportunities it seeks to address.

4. Crisis Management

It has become evident that unforeseen negative events can have significant effects on IRCC’s operations. They can affect IRCC directly when they occur in places where its offices and employees are located and may also affect the Department’s clients.

Moreover, the Department continues to facilitate the evacuation of Afghan, Ukraine, and Uyghurs nationals and to help them settle in Canada, and support the implementation of the Sudanese and Americas humanitarian pathways. Adding to these crises, the Department continues to monitor and manage irregular migration crossings at the Canada-US border, as well as an increased demand for services such as passports. While IRCC works towards addressing these emerging priorities, efforts remain in place towards improving its own internal processes and systems through change initiatives.

5. Litigation and Legal

IRCC operates in a very high volume litigation environment which includes complex, high profile and high impact 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

The Honourable Marc Miller was appointed as the new Minister of IRCC on July 26, 2023.

On September 27, 2023, a new organizational structure for the department was announced. This structure will support IRCC’s digital agenda, will pave the way for an immigration system for Canada’s future, and will ensure the constant advancement in client service. Even though IRCC will adopt the new structure starting October 16, 2023, the following changes in personnel were announced:

• Perminder Gill was appointed to the role of Assistant Deputy Minister of IRCC’s new sector, Citizenship & Passport, effective September 25, 2023.
• Murray Jones was appointed to the role of Assistant Deputy Minister of IRCC’s new Sector, Communications, effective September 25, 2023.
• Aiesha Zafar has joined IRCC as Assistant Deputy Minister of the new sector, Migration Integrity, effective September 25, 2023.

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

Approval by Senior Officials

Approved by:

Ottawa, Canada
November 20, 2023

Statement of Authorities

Departmental Budgetary Expenditures by Standard Object (in thousands of dollars)

Note: Numbers may not add up due to rounding.