Quarterly Financial Report for the quarter ended September 30, 2013

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 Main Estimates, the Quarterly Financial Reports from fiscal year 2012–13 and Canada's Economic Action Plan 2012 (Budget 2012).

A summary description of the Citizenship and Immigration Canada (CIC) programs 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 for the 2013–14 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 were established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In 2013–14, changes to departmental authorities related to Budget 2012 were reflected in the 2013–14 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 2012–13 authorities represent the total Main Estimates, the Supplementary Estimates (A) and the Operating Budget Carry Forward, whereas 2013–14 includes only the amounts in the Main Estimates. CIC did not request authorities through Supplementary Estimates (A) in 2013–14.

Significant Changes to Authorities

As reflected in the Statement of Authorities, Citizenship and Immigration Canada's total budgetary authorities available for use in fiscal year 2013–14 increased by approximately $80 million (5%), when compared to the same quarter in 2012–13. This is comprised of a decrease of $2 million (0.4%) in Vote 1 – Operating Expenditures, a decrease of $14 million (1%) in Vote 5 – Grants and Contributions and an increase of $96 million in Statutory Authorities.

Vote 1 – Operating Expenditures

The Department's Vote 1 net decrease of $2 million or 0.4% is explained as follows:

  • Increases of $66 million related to:
    • Funding to support the sharing of immigration information with the United States ($20 million)
    • Funding to continue work on the inclusion of biometrics in the temporary visa stream ($19 million)
    • Adjustment of funding previously transferred to the Department of Foreign Affairs, Trade and Development Canada for departmental staff at missions abroad ($15 million)
    • Funding related to collective agreements ($5 million)
    • Funding to manage immigration cases involving classified information (Security Certificate) ($2 million)
    • Funding to eliminate the backlog of certain Federal Skilled Worker applications ($2 million)
    • Funding to modernize the immigration system and manage backlogs ($2 million)
    • Funding to support the amendment to the Immigration and Refugee Protection Regulations that removes visa exemptions for citizens of five countries ($1 million)
  • Decreases of $68 million associated with the following:
    • Operating Budget Carry Forward ($22 million) from 2012-13
    • Savings identified as part of the Budget 2012 Spending Review ($21 million)
    • Funding for the reform of Canada's refugee determination system ($13 million)
    • Temporary Resident Visa for Mexico ($7 million)
    • Other transfers and adjustments ($3 million)
    • Sunsetting of Official Languages Action Plan ($2 million)

Vote 5 – Grants and Contributions (G&C)

The Department's Vote 5 net decrease of $14 million or 1% is explained as follows:

  • Increase of $2 million to reflect the funding to the Grant for the Canada-Quebec Accord on immigration
  • Decreases of $16 million associated with the following:
    • Savings identified as part of the Budget 2012 Spending Review ($12 million)
    • Sunsetting of the Community Historical Recognition Program ($4 million)

Budgetary Statutory Authorities

The 2013–14 statutory authorities level in the second quarter is significantly higher than 2012–13 by $96 million which is mainly related to the return of fees for certain terminated Federal Skilled Worker applications.

Significant Changes to Departmental Budgetary Expenditures by Standard Object

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, compared to the previous year, the total of budgetary expenditures in the second quarter, ending September 30, 2013, have decreased by $9 million or 2%, from $387 million to $378 million. This difference is for the most part explained by a decrease of $25 million under Transfer Payments, an increase of $9 million in Other Subsidies and Payments, a decrease of $3 million in Professional and Special Services and an increase of $6 million in other type of expenditures such as Rentals and Acquisition of Machinery and Equipment.

The decrease of $25 million in expenditures for Transfer Payments (Vote 5) is mainly attributable to the Contribution to provinces ($42 million). No payments were issued to the province of Manitoba in the current second quarter since the agreement with the province ended at the end of March 2013. There was also a timing difference in the payment to the province of British Columbia. The remainder of the variance is due to the spending resulting from the repatriation of settlement services to CIC in Manitoba, coupled with the 2013–2014 implementation and timing of third quarter advance issuance to recipients for the Settlement program.

With respect to the increase of $9 million in Other Subsidies and Payments expenditures, this is mainly explained by an increase in Federal Skilled Worker fees returned in connection with a terminated application.

With respect to the decrease of $3 million in Professional and Special Services expenditures, this is mainly explained by a reduction in Interim Federal Health Program (IFHP) expenditures of $6 million, offset by an increase of $3 million for Informatics, Business, and Legal Services.

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, CIC's year-to-date expenditures as of the second quarter were $757 million compared to $743 million as of September 30, 2012, representing 46% of the total budgetary authorities available for use for the year ending on March 31, 2014; similar percentage (47%) used at quarter-end last year. The Department has therefore been consistent in its spending.

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 20, 2013.

Unforeseen Events and Natural Disasters

Unforeseen events and natural disasters may have significant effects on CIC's operations and reputation. They can affect CIC directly when they occur in places where our offices and employees are located.

As a result of the flooding in Southern Alberta in June 2013, as well as the tragic explosion and fire in Lac-Mégantic in July 2013, passports and other documents belonging to Temporary Residents, Permanent Residents and Canadian Citizens may have been lost, damaged or destroyed. To support affected residents, the Minister approved special measures to waive some fees and other specific requirements for both temporary and permanent residents as well as Canadian Citizens until September 19, 2013 for the flooding and October 5, 2013 for Lac-Mégantic. These special measures include waiving fees for the replacement of: permanent resident cards, Canadian passports, work permits, study permits and visitor records.

Unforeseen events and natural disasters can also affect CIC indirectly when the Department is required, for humanitarian or legal reasons to facilitate travel of foreign nationals or Canadian victims by processing applications for visas or other necessary documents.

Lack of a planned, timely and coordinated response between CIC and our national or international partners in any such event could have serious, negative impacts on our operating activities, program delivery and financial condition. In addition, implementation of response plans can take resources away from planned priorities and activities, thereby diminishing our capacity to deliver on commitments, service standards, processing targets and strategies.

As mitigation strategies, CIC continues to :

  • Improve security, emergency and business continuity plans and practices as they relate to CIC offices and employees; and
  • Review and develop flexible policies and procedures to ensure a timely and coordinated emergency response for unexpected world events that could place extra burden on CIC's program delivery.

Foreign Service Officers – Withdrawal of Service

The Professional Association of Foreign Service Officers (PAFSO) union members, responsible for processing visa applications, walked out of offices in Canada and overseas during Spring and Summer 2013. Contingency plans were in place to ensure all offices remain open and were providing at least a minimum level of service. Priority was placed on urgent humanitarian applications, as well as temporary visas.

On September 26, 2013 the PAFSO announced that a tentative agreement had been reached with the Treasury Board of Canada to end the six-month labour dispute.

4. Significant changes in relation to operations, personnel and programs

Passport Canada

On July 2, accountability for the Passport Program was transferred to the Minister of CIC, with service delivery abroad continuing to be provided by DFATD and service delivery in Canada provided by Service Canada. Over the summer months, some groups at Passport Canada were integrated more directly within CIC and some reporting relationships changed. Work continues to determine how many employees who provide internal services are required to support operational functions transferred to Service Canada, and how many are required to support functions transferred to CIC. The final transfer of employees to Service Canada will take place by April 1, 2014.

International Experience Canada Program

On August 31, 2013, Citizenship and Immigration Canada became responsible for International Experience Canada (IEC), which had previously been the responsibility of the Department of Foreign Affairs, Trade and Development (DFATD).

The IEC program provides opportunities for Canadians and non-Canadians, aged 18-35, to travel and gain work experience in each other's countries for up to two years. These exchanges occur largely through bilateral youth mobility arrangements and agreements Canada has with countries around the world.

The transfer of IEC program will allow the program to better align with government priorities and labour market demands in Canada by linking IEC to other immigration programs and strengthening Canada's strategy to develop its human capital and attract talent.

Moving the program to CIC will provide an opportunity to take advantage of the department's existing expertise in centralized electronic processing of work permits for this program. In addition, CIC will become the one-stop shop for applicants by streamlining the application process for IEC participants at one federal government department. Applicants will not face an interruption in service as a result of the transfer.

On the financial side of this transfer, the revenues and expenditures related to IEC program will be reported in the next Quarterly Financial Report.

Key Senior Personnel

Effective July 16, 2013, Chris Alexander became the Minister of Citizenship and Immigration Canada.

Effective July 16, 2013, Tim Uppal became the Minister of State for Multiculturalism of CIC.

Effective June 24, 2013, Anita Biguzs became the Associate Deputy Minister of the Department. Announced in July, Anita Biguzs became Deputy Minister of the Department effective September 17, 2013.

Effective September 17, 2013, Wilma Vreeswijk became the Associate Deputy Minister of the Department.

Effective November 4, 2013, Tony Matson will become the Associate Deputy Minister, Chief Financial Officer of the Department.

5. Budget 2012 Implementation

This section provides an overview of savings measures announced in Budget 2012 that are being 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.

In the first year of implementation, CIC achieved Budget 2012 savings of $26.5M ($2.3M Inter-Action Multiculturalism Projects and $24.2M Reform of Interim Federal Health Program) in 2012–13. Savings increase to $59.0M for fiscal year 2013–14; and will result in ongoing savings of $71.2M by 2014–15. To achieve these savings, CIC committed to staff reductions. At the same time, we identified certain measures that required the hiring of staff.

Of the reduction of $59.0M for 2013–14, $24.5M savings is attributable to the reform of the Interim Federal Health Program (IFHP). Through this reform, 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. These savings are realized from funding normally accessed through Supplementary Estimates.

For the remaining $34.5M, CIC's authorities in the Main Estimates for 2013–14 have been reduced by the following:

  • $21.0M related to Vote 1 operating expenditures;
  • $11.7M related to Vote 5 contributions; and
  • $1.8M related to statutory employee benefit plan costs.

Following are the savings measures that are being implemented:

Vote 1 – Operating Expenditures ($21 million) and Statutory Employee Benefit Plan Costs ($1.8 million), for a total of $22.8 million

  • $16.7 million – Reducing the number of CIC offices in Canada and overseas by implementing a more integrated, modernized and centralized working environment;
  • $3.5 million – Reducing the number of regional headquarters;
  • $2.0 million – Reductions in back office costs; and
  • $0.6 million – Elimination of subsidies to Provinces and Territories for participation in promotional and recruitment activities associated with the Strategic Plan to Foster Immigration to Francophone Minority Communities.

Vote 5 – Grants and Contributions $11.7 million

  • $5.7 million – Elimination of federal contributions to Provinces and Territories relating to maintenance of Immigration Portals;
  • $3.3 million – Efficiencies through implementation of the modernized settlement program resulting in more coherent and constructive programming;
  • $2.3 million – Reduction of planned spending under the Multiculturalism Program Inter-Action; and
  • $0.4 million – Changing the ratio of government-assisted refugees (GAR) to privately sponsored refugees.

The service impact of Budget 2012 was mitigated through the ongoing modernization of CIC's processing network. This modernization is being achieved through various measures including the deployment of the Global Case Management System to all overseas and in-Canada offices, the ongoing implementation of e-applications, a growing visa application centre network, the centralization of some overseas processing in Canada, and improved online information and tools.

Service levels at CIC are primarily measured through service standards and processing times, which CIC posts and regularly updates on its Web site.

Signature of Deputy Minister Anita Biguzs and Assistant Deputy Minister/Chief Financial Officer, Tony Matson, MBA, CMA, in Ottawa, Canada, dated November 18, 2013.

Statement of Authorities

(in thousands of dollars) Fiscal Year 2013-2014 Fiscal Year 2012-2013
Total available for use for the year ending March 31, 2014Footnote 1 Footnote 2 Used during the quarter ended Footnote 3 September 30, 2013 Year-to-date used at quarter-end Footnote 3 Total available for use for the year ending March 31, 2013 Footnote 1 Used during the quarter ended September 30, 2012 Year-to-date used at quarter-end
Vote 1 - Operating Expenditures 552,535 127,786 231,979 554,878 122,440 228,181
Vote 5 - Grants and Contributions 949,946 223,445 478,305 963,929 248,024 480,350
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 57,360 14,340 28,680 56,839 14,210 28,420
Minister's Salary and Motor Car Allowance 79 29 49 78 19 38
Fees Returned in Connection with a Terminated Application 95,500 8,368 11,549 0 0 0
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 34 0 1 15 0 0
Court Awards 16 12 17 15 2 15
Refunds of Previous Years Revenue 6,231 3,805 6,232 5,851 2,669 5,851
Total Budgetary Authorities 1,661,701 377,785 756,812 1,581,605 387,364 742,855
Non-Budgetary Authorities 70,264 Footnote 4 950 (1,093) 73,377 Footnote 4(2,085) (5,186)
TOTAL AUTHORITIES 1,731,965 378,735 755,719 1,654,982 385,279 737,669

Departmental Budgetary Expenditures by Standard Object

(in thousands of dollars) Fiscal Year 2013-2014 Fiscal Year 2012-2013
Planned expenditures for the year ending March 31, 2014 Footnote 5 Expended during the quarter ended September 30, 2013 Footnote 6 Year-to-date used at quarter-end Footnote 6 Planned expenditures for the year ending March 31, 2013 Expended during the quarter ended September 30, 2012 Year-to-date used at quarter-end
Expenditures
Personnel 387,092 104,727 203,587 380,350 102,768 197,712
Transportation and Communications 29,809 4,544 7,254 31,599 3,749 6,364
Information 9,763 406 826 16,262 623 1,078
Professional and Special Services 143,131 24,027 35,968 135,281 26,939 42,119
Rentals 13,288 4,041 7,052 15,347 1,107 6,213
Repair and Maintenance 7,505 142 205 10,139 307 461
Utilities, Materials and Supplies 8,847 975 1,297 10,395 782 1,518
Acquisition of Machinery and Equipment 8,427 3,557 4,196 12,166 489 764
Transfer Payments 949,946 223,445 478,305 963,929 248,024 480,350
Other Subsidies and Payments 103,893 11,921 18,122 6,137 2,576 6,276
TOTAL NET BUDGETARY EXPENDITURES 1,661,701 377,785 756,812 1,581,605 387,364 742,855
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