ARCHIVED – Quarterly Financial Report for the quarter ended September 30, 2012
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 Main Estimates, the Supplementary Estimates A as well as Canada’s Economic Action Plan 2012 (Budget 2012).
A summary description of the Citizenship and Immigration Canada (CIC) program activities 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 2012–13 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.
As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012. As a result, the measures announced in Budget 2012 could not be reflected in the 2012–13 Main Estimates.
In fiscal year 2012–13, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.
Citizenship and Immigration 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
CIC’s 2011–12 authorities represent the total Main Estimates and the Operating Budget Carry Forward, whereas 2012–13 includes the amounts in the Main Estimates, the Operating Budget Carry Forward and the Supplementary Estimates (A). CIC did not request authorities through Supplementary Estimates (A) in 2011–12.
CIC’s net budgetary expenditures for the quarter ending September 30, 2012 were $387 million compared to $392 million as of September 30, 2011, representing 24% of the total budgetary authorities available for use for the year ending on March 31, 2013; approximately the same percentage (26%) used at quarter-end last year. The Department has therefore been consistent in its spending this quarter versus its authorities provided, compared to the second quarter of the previous fiscal year.
Statement of Authorities: Significant changes
As reflected in the Statement of Authorities, Citizenship and Immigration Canada’s total budgetary authorities available for use in fiscal year 2012–13 at September 30, 2012 are $1,582 million, compared to $1,513 million at September 30, 2011. CIC’s budgetary authorities available for use increased by approximately $69 million, when compared to the same quarter in 2011–12. This is due in large part to a change in the timing of the receipt of funds for a number of initiatives. Funding for the majority of these initiatives was received in Supplementary Estimates B or C for 2011–12 whereas, the funding for 2012–13 has now been included in CIC’s Main Estimates. This has resulted in an increase in authorities available at the end of the second quarter of 2012–13 as compared to the same quarter in 2011–12.
Vote 1 – Operating Expenditures
The Department’s Vote 1 net increase of $42 million or 8% is explained as follows:
- Increases of $86 million to reflect funding approvals:
- Investment in the Biometrics project ($50 million)
- Funding to Modernize the Immigration System and Manage Backlogs ($23 million)
- Funding related to government advertising programs ($5 million)
- Transfer from the Department of Foreign Affairs and International Trade (DFAIT) for the processing of applications under the International Experience Canada Program ($3 million)
- Canada’s Program on Crimes Against Humanity and War Crimes Program ($2 million)
- Operating Budget Carry Forward ($2 million)
- Funding to provide essential federal services for the 2015 Pan Am and Parapan Am Games ($1 million)
- Decreases of $44 million associated with the following:
- Funding transferred to Shared Services Canada for the consolidation of information technology services ($24 million)
- Net reduction of funding for the backlog reduction strategy associated with the reform of Canada’s refugee system ($5 million)
- Reduction due to foregone revenue for Visa lifting ($4 million)
- Internal transfer from non-salary to salary ($4 million)
- Sunsetting of funding to manage immigration cases involving classified information (Security Certificate) ($3 million)
- Additional savings identified as part of the government’s Strategic Review of departmental spending ($2 million)
- Reduction of Temporary Resident Visa for Mexico ($1 million)
- Transfer to Canada Border Services Agency ($1 million)
Vote 5 – Grants and Contributions (G&C)
The Department’s Vote 5 net increase of $19 million or 2% is explained as follows:
- Increases of $27 million to reflect new funding approvals:
- Funding to the Grant for the Canada-Quebec Accord on immigration ($25 million)
- Enhancement of the Resettlement Assistance Program relating to the reform of Canada’s refugee system ($2 million)
- Decreases of $8 million to reflect a reduction of funding:
- Additional savings identified as part of the government’s Strategic Review of departmental spending ($6 million)
- Sunsetting of the Community Historical Recognition Program and other ($2 million)
Budgetary Statutory Authorities
The 2012–13 statutory authorities level in the second quarter is approximately 14% higher than 2011–12. The increase of $8 million is mainly related to the Employee Benefits Plan costs ($4 million), as well as the Refund of previous years’ Revenues ($4 million).
Departmental Budgetary Expenditures by Standard Object: Significant Changes
The increase of $32 million in planned expenditures for personnel is mainly explained by an internal transfer in 2012–13 and future years to more accurately align authorities with actual spending patterns ($20 million). Funding for personnel received for the Biometrics project ($8 million) and for Modernizing the Immigration System and Managing Backlogs ($9 million), is partially offset by the transfer to Shared Services Canada ($7 million).
A realignment of planned expenditures between the standard object Rentals and the standard object Acquisition of Machinery and Equipment was completed in 2012–13, to reflect a more up-to-date spending trend in the Department.
Compared to the previous year, the total of budgetary expenditures in the second quarter, ending September 30, 2012, have decreased by $5 million or 1%, from $392 million to $387 million as per the Table of Departmental Budgetary Expenditures by Standard Object. This difference is for the most part explained by an increase of $18 million under Transfer Payments and a decrease of $19 million under Personnel.
The reduction of $19 million or 16%, in Personnel expenditures is mainly attributable to the cash out of severance entitlements. In 2011–12, $25 million was spent in the second quarter compared to $0.3 million in the same quarter of 2012–13. This reduction is partially offset by an increase in severance pay ($2 million) and the payout of separation benefits under workforce adjustment ($4 million).
The increase of $18 million or 8%, in expenditures for Transfer Payments (Vote 5) is mainly attributable to a timing variance in the payment schedule for the Contribution to provinces ($21 million), compared to the same quarter of 2011–12. An increase in grant payments to Quebec under the Canada-Quebec Accord ($6 million) can also be observed. This increase is partially offset by a decrease in Settlement spending ($8 million) and sunsetting of the Community Historical Recognition Program ($1 million) which is expected due to the reduction in funding within these two programs. Transfer payments expended during the quarter represent 26% of planned transfer payments expenditures at the end of Q2 as opposed to 24% last year at this time.
With respect to the decrease of $5 million in Professional and Special Services expenditures, this is mainly explained by a reformed program that came into effect on June 30, 2012 under the Interim Federal Health Program resulting in lower expenditures in 2012–13 ($8 million). This decrease is offset by an increase in Legal Services ($3 million), due to a new timely billing process introduced by the Department of Justice.
3. Risks and Uncertainties
CIC is funded through annual appropriations. As a result, its operations can be impacted by any changes approved by Parliament. This departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the Main Estimates for which full supply was released on June 29, 2012.
Before intake controls were in place, CIC consistently received more immigration and citizenship applications than could be processed in a year. Over the past few years, CIC has taken concrete measures to tackle this problem, including: limiting Federal Skilled Workers (FSW) application intake to priority occupations; adding caps to the number of new applications; eliminating through process of law most of the remaining FSW applications received before February 27, 2008; and issuing in July 2012 a temporary pause on new FSW applications, excluding candidates with a qualifying job offer or those applying under the PhD stream.
As previously mentioned in the section “Statement of Authorities: Significant Changes”, the Department received funding to embark on an ambitious modernization agenda that aims to provide simpler and more accessible services; continuous, innovative and adaptable operational improvements, as well as robust program integrity and the delivery of quality service at lower costs. Despite all efficiency measures, the increases in demand continue to hinder our ability to effectively keep pace with increased volumes.
Budget 2010 announced that the operating budgets for departments would be frozen at their 2010–11 levels for fiscal years 2011–12 and 2012–13. The area most impacted by this freeze has been personnel costs as they amount to 62% of planned expenditures, excluding transfer payments. The recent wage increases as a result of collective bargaining, must be absorbed within existing budgets. CIC has estimated the impact of this government- initiative to be approximately $5 million in 2012–13. CIC has taken steps to closely manage costs in this area by establishing staffing controls (full-time equivalents) and salary budgets in addition to implementing rigorous monthly monitoring to ensure that annual budgets are respected.
4. Significant changes in relation to operations, personnel and programs
CIC is in the final year of implementing the Strategic Review reduction of $67.6M, of which $59 million came from the national settlement funding. Settlement allocations have more than tripled since 2005–06, and more services are being provided. Realigning settlement funding based mainly on immigrant intake will allow us to advance fairness across the country.
Other savings were found through operating efficiencies including the use of a global technology network to process medical records, web-based applications forms, other services that reduce the use of expensive paper and mail, and that better track applicants as they move through the immigration system.
Shared Services Canada
Effective August 4, 2011, Shared Services Canada (SSC) was created by an Order-in-Council (OIC) under the Financial Administration Act, to standardize and consolidate information technology services in the federal government in order to reduce costs, improve services, and leverage capacity in the public and private sector through pooled resources and greater buying power.
On November 15, 2011, a second set of Orders-in-Council were signed. The Department was required to identify the amounts, by vote, of authorities related to functions transferred to Shared Services Canada. Amounts for future years are addressed in the 2012–13 Annual Reference Level Updates.
A total of $8.3 million was transferred from CIC to SSC in 2011–12 and $23.8 million in 2012–13, including amounts in connection with corporate, administrative and other support for e-mail, networks and data centre services.
5. Budget 2012 Implementation
This section provides an overview of savings measures announced in Budget 2012 that will be implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.
CIC will change the way it operates in Canada and abroad by reducing overhead costs and continuing to streamline operations and program delivery to provide better value for Canadians. In this regard, it will continue to take steps to more efficiently process immigration applications by centralizing more of its visa processing, and by allowing in-Canada applicants to be processed in Canada.
CIC has been moving diligently towards an increasingly integrated, modernized, and centralized working environment. Updated technology, along with a robust program integrity strategy, allows processing to be done anywhere and in a more effective manner, therefore reducing the number of CIC offices needed in Canada and overseas. CIC can continue to do its work with fewer local offices while reducing its overhead costs.
The department has moved from seven regions to five regions. One western region has been created, amalgamating BC, Yukon, Prairies, the Northwest Territories (NWT) and Nunavut. The location of the regional office is Calgary, Alberta. An eastern region amalgamates Québec and the Atlantic provinces. Its regional headquarters is in Montreal with a senior presence in Atlantic Canada. Ontario region, International region, and the Centralized Processing region will remain. Functional guidance and operational performance measurement has been centralized at NHQ. Nineteen small CIC offices in Canada have been closed or consolidated into existing offices, and six visa offices overseas have been closed (Berlin, Tokyo, Dhaka, Kuala Lumpur, Belgrade and Buffalo). Services will be relocated to other offices or moved to on-line services.
As the Government of Canada moves to strengthen national responsibility for the delivery of settlement services across Canada, CIC is resuming management of federally funded settlement programs in BC and Manitoba, bringing these programs in line with every other province and territory outside Quebec. This will create a uniform delivery system for settlement services across Canada, eliminate the transfer for administration of the services, and allow the federal government to manage any unspent funds. It will ensure that immigrants have access to similar levels and types of services regardless of where in Canada they choose to settle.
By reforming the Interim Federal Health Program (IFHP), CIC is ensuring that IFHP beneficiaries do not receive benefits that are more generous than what Canadians receive through taxpayer-funded benefit programs and that the benefits provided through the program continue to protect public health and safety.
While maintaining the overall number of refugees brought to Canada annually, the government is changing the ratio of government–assisted refugees (GAR) to privately sponsored refugees (PSR). The adjustment of the GAR and PSR levels will be implemented as part of the 2013 levels plan. The change in ratio between the GAR and PSR streams will be phased in over three years. In 2013, 300 GAR will be converted to the PSR stream, 500 will be converted in 2014 and the remaining 500 spaces will be converted in 2015.
In the first year of implementation, CIC will achieve Budget 2012 savings of approximately $26.5M ($2.3M Inter-Action Multiculturalism Projects and $24.2M Reform of Interim Federal Health Program). Savings will increase to $59.0M for fiscal year 2013–14; and will result in ongoing savings of $71.2M by 2014–15. Savings for 2012–13 will be reflected later in the fiscal year as initiatives are implemented and corresponding changes to the Department’s total authorities and expenditures are realized.
Information on CIC’s savings included in Budget 2012 by Program Alignment Architecture is available at http://www.cic.gc.ca/english/resources/publications/qfr/2012-supp.asp.
In addition, through the Economic Action Plan 2012, CIC will:
- Realign the Temporary Foreign Worker Program to better meet labour market demands.
- Support further improvements to foreign credential recognition and identify the next set of target occupations beyond 2012.
- Move to an increasingly fast and flexible immigration system where priority focus is on meeting Canada’s labour market needs.
- Return applications and fees to certain federal skilled worker applicants who have been waiting for processing to be completed.
These actions will contribute to making the immigration system truly proactive, fast and flexible in a manner that will be responsive to labour market needs.
Citizenship and Immigration Canada
Quarterly Financial Report
For the quarter ended September 30, 2012
Statement of Authorities (unaudited)
|(in thousands of dollars)||Fiscal Year 2012-2013||Fiscal Year 2011-2012|
|Total available for use for the year ending March 31, 2013 * **||Used during the quarter ended September 30, 2012||Year-to-date used at quarter-end||Total available for use for the year ending March 31, 2012 *||Used during the quarter ended September 30, 2011||Year-to-date used at quarter-end|
|Vote 1 – Operating Expenditures||554,878||122,440||228,181||512,648||148,187||257,121|
|Vote 5 – Grants and Contributions||963,929||248,024||480,350||944,971||229,611||475,742|
|Vote 7 – Debt Write-off||0||0||0||0||0||0|
|Budgetary Statutory Authorities ****||62,798||16,900||34,324||55,035||14,165||28,394|
|Total Budgetary Authorities||1,581,605||387,364||742,855||1,512,654||391,963||761,257|
* Includes only authorities available for use and granted by Parliament at quarter-end
** Total available for use does not reflect measures announced in Budget 2012
*** Represents the net of loans collected and loans issued
**** Budgetary Statutory Authorities consist of $56.84M related to Employee Benefits Plan (EBP); $78K related to the Minister's Salary and Motor Car Allowance; and $5.88M related to Refund of Previous Years' Revenues and others.
Citizenship and Immigration Canada
Quarterly Financial Report
For the quarter ended September 30, 2012
Departmental Budgetary Expenditures by Standard Object (unaudited)
|(in thousands of dollars)||Fiscal Year 2012-2013||Fiscal Year 2011-2012|
|Planned expenditures for the year ending March 31, 2013 *||Expended during the quarter ended September 30, 2012||Year-to-date used at quarter-end||Planned expenditures for the year ending March 31, 2012||Expended during the quarter ended September 30, 2011||Year-to-date used at quarter-end|
|Transportation and Communications||31,599||3,749||6,364||32,214||5,213||9,499|
|Professional and Special Services||135,281||26,939||42,119||129,612||31,977||44,762|
|Repair and maintenance||10,139||307||461||7,128||(28)||806|
|Utilities, Materials and Supplies||10,395||782||1,518||8,793||833||1,745|
|Acquisition of Machinery and Equipment||12,166||489||764||25,027||438||1,119|
|Other Subsidies and Payments||6,137||2,576||6,276||1,775||891||2,894|
|TOTAL NET BUDGETARY EXPENDITURES||1,581,605||387,364||742,855||1,512,654||391,963||761,257|
* Planned expenditures do not reflect measures announced in Budget 2012
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