Quarterly Financial Report for the quarter ended September 30, 2016

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 2016–17 Main Estimates, the 2016-17 Supplementary Estimates (A) and the 2015–16 Quarterly Financial Report for the quarter ended September 30, 2015.

A summary description of the Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates (PDF, 1.2 MB).

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 2016–17 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.

Immigration, Refugees and Citizenship 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

In 2016-2017, IRCC’s total authorities includes the Main Estimates, items sought through the Supplementary Estimates (A), the approved Operating Budget Carry Forward from 2015-16 and minor adjustments related to statutory items. It is to be noted that in 2015-2016, IRCC did not have any items being sought through the Supplementary Estimate A process.

Significant Changes to Authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2016–17 increased by approximately $381 million (26%) when compared to the same quarter in 2015–16. This is comprised of:

  • an increase of $101 million (17%) in Vote 1 – Operating Expenditures
  • an increase of $18 million in Vote 5 – Capital Expenditures as it was created on April 1st, 2016
  • an increase of $277 million (28%) in Vote 10 – Grants and Contributions
  • a decrease of $16 million (17%) in Statutory Authorities.

The most significant change to the authorities above is the funding received in 2016-17 of $188 million to support settlement of 25,000 Syrian refugees and $140 million to reflect the expanding commitment of the government for an additional 10,000 Government Assisted Syrian Refugees (GAR). Therefore, the Government response to the Syrian refugee crisis represents 86% of the total increases in funding available in the year-over-year quarter analysis.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures increase of $101 million (17%) is explained as follows:

  • Increases of $138 million attributable to:

    Additional Funding for:

    • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Syrians ($39 million);
    • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of 25,000 Syrians ($28 million);
    • The Labour Market Impact Assessment/International Mobility program (LMIA/IMP) ($28 million);
    • Reduced processing times and to support increased levels for immigration ($21 million);
    • The Biometric Expansion project to verify the identity of all visa-required travelers seeking entry to Canada ($14 million);
    • Operating Budget Carry Forward ($3 million);
    • The processing of Citizenship and Temporary Resident applications to keep up with increased volume demand ($3 million); and
    • The management and protection of classified information in assessing applications under the Immigration and Refugee Protection Act (IRPA) ($2 million).
  • Decreases of $37 million attributable to:

    Transfers totaling $27 million to:

    • IRCC Vote 5 for the creation of IRCC’s Capital Vote as of April 1, 2016 ($14 million);
    • The Department of Global Affairs Canada to support missions abroad ($7 million);
    • IRCC Vote 5 mainly to fund the development of IRCC’s Grants and Contributions System and other minor capital projects ($4 million);
    • The Department of Innovation, Science and Economic Development Canada – Syrian refugee crisis ($1 million); and
    • Other - Miscellaneous transfers ($1 million).

    Decrease of $10 million in Funding for:

    • The 2015 Pan American and Parapan American games ($3 million);
    • Government Advertising Campaigns ($3 million);
    • The completion of Information Sharing initiative ($2 million);
    • The completion of Refugee Reform implementation ($1 million); and
    • Other minor adjustments ($1 million).

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures net increase of $18 million is explained as follows:

  • Increases of $18 million attributable to:

    Transfers from:

    • IRCC Vote 1, via the 2016-17 Main Estimates for the creation of IRCC’s Capital Vote as of April 1, 2016 ($14 million); and
    • IRCC Vote 1, via the 2016-17 Supplementary Estimates A mainly to fund the development of IRCC’s Grants and Contributions System and other minor capital projects ($4 million).

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions net increase of $277 million (28%) is explained as follows:

  • Increases of $286 million attributable to:

    Additional Funding for ($285 million):

    • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of 25,000 Syrians ($160 million);
    • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Government Supported Syrians Refugees ($99 million);
    • Reduced processing times and to support increased levels for immigration ($18 million);
    • The Grant for the Canada-Quebec Accord on immigration ($5 million); and
    • The renewal of the Global Assistance for Irregular Migrants Program ($3 million).

    One time transfers to:

    • The National Capital Commission for the Victims of Communism Memorial ($1 million).
  • Decreases of $9 million attributable to:

    Transfers to:

    • The Department of Canadian Heritage for the transfer of responsibility for the Multiculturalism Program following the change in government machinery announced in the fall of 2015 ($9 million)

Budgetary Statutory Authorities

The 2016–17 statutory authority level in the second quarter is lower than 2015–16 by $16 million (17%) and is primarily explained as follows:

  • Increases of $28 million attributable to:

    • Passport program: the increased draw on the fiscal framework is mainly related to a forecasted increase in the Passport Program Modernization initiative spending compared to the previous year ($18 million);
    • Adjustments to the employee benefit plans ($8 million); and
    • Other minor adjustments ($2 million).
  • Decreases of $44 million attributable to:

    • The forecasted costs related to the return of fees for certain terminated Federal Skilled Workers applications as this initiative is winding down ($28 million); and
    • The forecasted costs related to the return of fees for the termination of Immigrant Investor Program and Entrepreneur Program applications as this initiative is winding down ($16 million).

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 have increased by $24 million (5%) from $478 million in 2015-16 to $502 million in 2016-17. In addition, through the Passport Program and International Experience Canada, IRCC generated $150 million and $2 million respectively in re-spendable revenues in the second quarter of 2016-17. As a result this represent a net budgetary expenditure of $350 million as of September 30, 2016 compared to $325 million as of September 30, 2015.

The year-over-year increase of expenditures is mainly attributable to expenditures related to high profile initiatives such as the settlement of 25,000 Syrian refugees and the expanding commitment of the government for an additional 10,000 Syrian refugees.

With the exception of Transfer Payments, the remaining operating expenditures have not encountered significant quarter over quarter variances.

Transfer Payments increased by $24 million (10%) compared to the same quarter in the previous year and is mostly due to an increase in resettlement assistance income support payments and to an increase in transfer payments made to non-governmental organizations in relation to the Government’s commitment to the Syrian refugee crisis for which IRCC is the lead department.

Cumulative Analysis

As reflected in the Table of Departmental Budgetary Expenditures by Standard Objects, IRCC’s year-to-date gross operating expenditures as of the second quarter were $1,039 million compared to $983 million as of September 30, 2015, representing an increase of 6% from previous year and 41% of the total budgetary authorities available for use for the year ending March 31, 2017. This is slightly below last year’s expenditures usage rate (46%) at quarter-end. The reduced percentage of spending can be explained by significant additional funding previously received in response to the Syrian refugee crisis.

With the exception of the Transfer payments, the remaining operating expenditures have not encountered significant year-to-date variances.

Transfer Payments increased by $47 million compared to the previous year-to-date used at quarter-end and is due to an increase of $38 million in resettlement assistance income support payments and other transfer made to non-governmental organizations in relation, like mentioned earlier, to the Government’s commitment to the Syrian refugee crisis for which IRCC is the lead department, combined with other small increases in IRCC transfer payments programs.

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, the Canadian and global economic, social or political contexts and shifting migration trends. At the same time, IRCC continuously works to improve its own internal processes and systems through change initiatives such as the Modernization agenda to improve client service.

Unforeseen Events and Natural Disasters

Unforeseen events such as the impact of the civil war in Syria and the response of the Canadian government to the crisis 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.

Additionally, 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 our operations, commitments, service standards and processing targets.

Litigation and Legal

Over the last few years, there has been a significant increase in the numbers of complex and high-profile litigation. Sound management practices are in place to manage all of these challenges and ensure timely delivery of IRCC’s programs and client services.

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

David Manicom was appointed in the position of Acting Assistant Deputy Minister of Strategic and Program Policy effective July 22, 2016.

Umit Kiziltan was appointed in the position of Acting Associate Assistant Deputy Minister of Strategic and Program Policy effective August 22, 2016.

On February 27, 2016, the Government fulfilled its commitment to bring 25,000 Syrian refugees to Canada. However, the important work of settlement continues, and will do so for a number of years. The Government expanded its commitment of resettling an additional 10,000 Syrian refugees by December 2016. The Government of Canada is working in collaboration with the United Nations High Commissioner for Refugees and with Canadians, including private sponsors, non-governmental organizations, provincial, territorial and municipal governments to achieve this commitment.

There have been no other significant changes in relation to operations, personnel and programs during the quarter ended September 30, 2016.

Approval by Senior Officials

Approved by:

Marta Morgan
Deputy Minister

Daniel Mills, CPA, CMA
Acting Assistant Deputy Minister
Chief Financial Officer

Ottawa, Canada
November 28, 2016

Statement of Authorities
Authorities
(in thousands of dollars)
Fiscal Year 2016-17 Fiscal Year 2015-16
Total available for use for the year ending March 31, 2017Table 1 footnote 1 Used during the quarter ended September 30, 2016 Year-to-date used at quarter-end Total available for use for the year ending March 31, 2016Table 1 footnote 1 Used during the quarter ended September 30, 2015 Year-to-date used at quarter-end
Vote 1 - Operating Expenditures 690,460 138,901 261,517 589,324 125,146 243,879
Vote 5 - Capital Expenditures 18,181 3,457 5,001 - - -
Vote 10 - Grants and Contributions 1,270,833 256,861 561,622 993,529 232,615 514,719
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 69,192 16,194 32,388 60,680 15,170 30,340
Minister’s Salary and Motor Car Allowance 84 28 35 84 21 42
FSW Fees Returned (Terminated Applications) 1,109 521 1,109 29,500 263 (365)
IIP and EN Fees Returned (Terminated Applications) 496 384 496 16,500 2,883 5,576
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 32 - - 25 - -
Court Awards 13 - 13 16 12 16
Refunds of Previous Years Revenue 4,714 2,048 4,714 2,605 939 2,605
Passport Program Revolving Fund (184,208) (68,854) (146,749) (202,153) (51,614) (122,833)
Total Budgetary Authorities 1,870,906 349,540 720,146 1,490,110 325,435 673,979
Non-Budgetary AuthoritiesTable 1 footnote 2 67,700 (2,725)Table 1 footnote 3 (4,255) 69,524 (1,073) (2,357)
Total Authorities 1,938,606 346,815 715,891 1,559,634 324,362 671,622
Departmental Budgetary Expenditures by Standard Object
Expenditures
(in thousands of dollars)
Fiscal Year 2016-17 Fiscal Year 2015-16
Planned expenditures for the year ending March 31, 2017 Expended during the quarter ended September 30, 2016 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2016 Expended during the quarter ended September 30, 2015 Year-to-date used at quarter-end
Expenditures
Personnel 545,127 131,714 260,938 508,815 125,140 250,484
Transportation and Communications 75,785 12,407 23,169 74,110 12,928 24,633
Information 8,313 520 1,757 8,810 741 1,805
Professional and Special Services 505,161 84,602 151,347 396,048 88,279 152,260
Rentals 18,514 3,896 14,159 26,031 3,543 11,801
Repair and Maintenance 6,874 1,019 1,293 5,790 377 631
Utilities, Materials and Supplies 71,256 6,139 14,706 51,396 8,110 15,248
Acquisition of Machinery and Equipment 38,864 1,613 2,228 25,709 1,115 2,001
Transfer Payments 1,270,833 256,861 561,622 993,529 232,615 514,719
Other Subsidies and Payments 6,335 2,712 8,296 49,182 4,733 9,001
Total Gross Budgetary Expenditures 2,547,062 501,483 1,039,515 2,139,420 477,581 982,583
Less Revenues Netted against Expenditures
Passport Program Respendable Revenue 666,218 149,976 313,095 639,372 150,289 301,695
Revenue Credited to the Vote 9,938 1,967 6,274 9,938 1,857 6,909
Total Net Budgetary Expenditures 1,870,906 349,540 720,146 1,490,110 325,435 673,979
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