Quarterly Financial Report for the quarter ended September 30, 2019

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 2019-20 Main Estimates Part II (PDF, 1.2 MB) and the 2018-19 Quarterly Financial Report for the quarter ended September 30, 2018.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in the 2019-20 Departmental Plan (PDF, 1.1 MB)

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 2019–20 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, which allowed the 2019 Federal Budget priorities to be included in the 2019-20 Main Estimates. These changes address the government’s commitment to provide more coherent information to Parliament and to align the Federal Budget and the Estimates.

The Main Estimates present financial requirements for the full 2019-20 fiscal year as announced in the 2019 Federal Budget. Items funded through Budget 2019 are held in a separately managed Budget Implementation Vote (BIV). Through this vote, the Main Estimates included Budget 2019 incremental spending measures, improving Budget-Estimates alignment and eliminating some of the time lag between announcement and implementation of programs. The funds will be held separately until supporting policy and program approvals are in place. After approvals, funds will be transferred to the department’s regular votes.

In 2019-20, IRCC’s total authorities include the Main Estimates, incremental funding from Budget 2019 related to Interim Federal Health Program, Enhancing the Integrity of Canada’s Borders and Asylum system, Improving Immigration Client Service, and Helping Travellers Visit Canada. It also includes funding from Treasury Board Vote 5 – Government Contingencies for Interim Housing Assistance Program, funding from the 2018-19 Operating and Capital Budget carry forward and other minor adjustments related to statutory items. IRCC did not request supply through the Governor General Special Warrants process.

The introduction of the 10 year passport in July 2013 has an impact on the Passport program as applicants who opted to apply for the 10 year Passport are no longer required to re-apply at the 5 year expiration mark. This has resulted in a reduction of Passport applications, hence a decrease in overall revenue for this program.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s Total Budgetary Authorities available for use in fiscal year 2019–20 increased by approximately $811.5 million (34%) compared to the same quarter in 2018–19. This increase is comprised of:

The most significant changes to authorities available for use are related to increases in funding received to support provinces and municipalities for temporary housing with respect to increased volume of asylum claimants, for Enhancing the Integrity of Canada’s Borders and Asylum System, for the Canada-Quebec Accord and to support higher admission levels for permanent residents as per the Immigration Levels Plans. There is also an increase due to statutory adjustments related to Passport Program Revolving Fund to offset the impact of the anticipated decrease in revenues that started in 2018-19 and for the remainder of its 10 year business cycle, subsequent to the introduction of the 10-year passport in 2013.

These increases were partly offset by the reduction in the funding profile for the Government’s response to the Syrian Refugee crisis. While processing and resettlement activities have been completed, Syrian refugees continue to have access to settlement services provided by the Department.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures Authorities net increase of $240.7 million (28%) is explained as follows:

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures Authorities net increase of $6.6 million (30%) is explained as follows:

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions Authorities net increase of $450.2 million (33%) is explained as follows:

Budgetary Statutory Authorities

The 2019–20 statutory authority level in the second quarter has increased by $114.0 million (71%) compared to 2018-19 which is primarily explained as follows:

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 during the quarter ending September 30 has increased by $386.8 million (61%) compared to the same quarter in 2018-19. This variance is mainly attributable to changes related to Professional and Special Services and Transfer payments. Through the Passport Program and International Experience Canada, IRCC generated $73.3 million and $1.8 million respectively in re-spendable revenues in the second quarter of 2019-20. This results in a net budgetary expenditure of $941.3 million as of September 30, 2019 compared to $541.5 million as of September 30, 2018.

Professional and Special Services expenditures have increased by $44.4 million (45%) which is mainly comprised of $19.0 million for the Interim Federal Health (IFH) program and $17.7 million for Biometrics transaction costs.

Transfer payments have increased by $340.7 million (101%). The increase is mainly explained by an increase of $260.4 million in spending to support provinces and municipalities for the interim housing of Asylum seekers, an increase of $17.3 million in spending for the Canada-Quebec Accord, an increase of $53.9 million in payments and advances to local non-profit organizations to support the Settlement and Resettlement Assistance Programs  and a decrease of $3.7M related to the Syria initiative as the vast majority of this work was completed in previous years.  The remaining increase is mostly attributed to higher admission or permanent residents as per Immigration Levels Plans.

Passport re-spendable revenues have decreased by $13.6 million (16%) compared to the same quarter in the previous year due largely to the expected volume reductions following the introduction of the 10 year passport.

Cumulative analysis

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, IRCC’s year-to-date gross operating expenditures were $1,333 million in 2018-19 compared to $1,848 million in 2019-20 for an increase of $515 million (39%).

Personnel expenditures have increased by $18.9 million (6%) which is mainly due to increases in salary funding received for initiatives such as the Protection of Temporary Foreign Workers, the Immigration Levels Plan as well as Budget 2019 items. The increase is also due to additional personnel expenditures to keep pace with programs’ growth.

Professional and Special Services expenditures have increased by $49.3 million (27%) which is mainly comprised of of $24.2 million for Biometrics transaction costs and $20.9 million for the Interim Federal Health (IFH) program.

Transfer payments have increased by $456.7 (60%). The increase is mainly explained by an increase of $328.5 million in spending to support provinces and municipalities for the interim housing of Asylum seekers, an increase in $51.9 million in spending for the Canada-Quebec Accord, an increase of $57.6 million in payments and advances to local non-profit organizations to support the Settlement and Resettlement Assistance Programs and a decrease of $14.3M related to the Syria initiative as the vast majority of this work was completed in previous years.  The remaining increase is mostly attributed to higher admission or permanent residents as per Immigration Levels Plans.

Other Subsidies and Payments have decreased by $8.5 million (39%) is mainly due to a decrease in the outstanding Interdepartmental Settlement amounts.

Passport re-spendable revenues have decreased by $57.9 million (28%) compared to the same period in the previous year due largely to the expected volume reductions following the introduction of the 10 year passport.

4. 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. For IRCC, continued increases in Temporary Resident applications and the management of the influx of asylum seekers are priorities that are closely monitored.

As part of its risk mitigation strategy, IRCC is continuously working 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.

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.

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.

IRCC and partner departments will continue to respond to the influx of asylum seekers crossing between ports of entry. This situation involves multiple departments along with impacts to provinces and municipalities. IRCC and partner departments received funding in 2019-20 Main Estimates and Budget 2019 to help respond to this issue.

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

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.

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

As per the Prime Minister announcement made on August 7th, 2019, Catrina Tapley was appointed to the position of Deputy Minister effective August 19, 2019.

Natasha Kim was appointed to the position of Associate Assistant Deputy Minister, Strategic and Program Policy Sector effective August 5, 2019.

Fraser Valentine was appointed to the position of Assistant Deputy Minister, Settlement and Integration effective August 21, 2019.

Paul MacKinnon, Assistant Deputy Minister Strategic and Program Policy left his functions following his appointment as the Executive Vice-President of the Canada Border Services Agency (CBSA) effective August 6, 2019.

There have been no other significant changes in relation to operations, personnel and programs during the quarter ended September 30, 2019.

Approval by Senior Officials

Approved by:

(Original signed by)
Catrina Tapley
Deputy Minister

(Original signed by)
Daniel Mills, CPA, CMA
Assistant Deputy Minister
Chief Financial Officer

Ottawa, Canada
November 20, 2019

 

Statement of Authorities (in thousands of dollars)
(in thousands of dollars) Fiscal Year 2019-20 Fiscal Year 2018-19
Total available for use for the year ending March 31, 2020Footnote 1 Used during the quarter ended September 30, 2019 Year-to-date used at quarter-end Total available for use for the year ending March 31, 2019Footnote 1 Used during the quarter ended September 30, 2018 Year-to-date used at quarter-end
Vote 1 - Operating Expenditures 1,102,417 227,751 413,853 861,711 196,126 366,555
Vote 5 - Capital Expenditures 28,455 5,055 7,887 21,816 5,339 8,889
Vote 10 - Grants and Contributions 1,806,586 678,973 1,217,130 1,356,436 338,285 760,409
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 89,072 18,625 37,251 70,647 17,214 34,428
Minister's Salary and Motor Car Allowance 88 22 44 86 21 43
FSW Fees Returned (Terminated Applications) 247 114 247 364 150 364
IIP and EN Fees Returned (Terminated Applications) 83 32 83 151 73 151
Spending of Amounts Equivalent to Proceeds from
Disposal of Surplus Moveable Crown Assets
23 - - 25 1 2
Court Awards 20 20 20 5 5 5
Refunds of Previous Years Revenue 6,663 1,683 6,663 4,090 1,228 4,090
Passport Program Revolving Fund 178,824 9,040 9,394 85,607 (16,979) - 54,358
Total Budgetary Authorities 3,212,478 941,315 1,692,572 2,400,938 541,463 1,120,578
Non-Budgetary AuthoritiesFootnote 2 52,370 4,944Footnote 3 5,787 68,017 5,132Footnote 3 2,089
Total authorities 3,264,848 946,259 1,698,359 2,468,955 546,595 1,122,667
Departmental Budgetary Expenditures by Standard Object (in thousands of dollars)
(in thousands of dollars) Fiscal Year 2019-20 Fiscal Year 2018-19
Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended September 30, 2019 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended September 30, 2018 Year-to-date used at quarter-end
Expenditures
Personnel 709,185 172,195 336,890 633,280 167,029 317,970
Transportation and Communications 53,249 10,390 19,095 52,613 10,096 20,911
Information 10,222 2,175 2,963 11,659 1,104 1,610
Professional and Special Services 770,516 143,534 228,737 602,467 99,136 179,422
Rentals 34,260 5,498 14,578 31,781 3,513 12,876
Repair and Maintenance 10,050 681 799 10,491 1,483 2,158
Utilities, Materials and Supplies 31,022 5,595 12,916 32,126 5,457 11,854
Acquisition of Machinery and Equipment 45,228 1,032 2,267 37,665 3,274 4,202
Transfer Payments 1,806,586 678,973 1,217,130 1,356,436 338,285 760,409
Other Subsidies and Payments 23,031 (3,699) 13,103 27,217 222 21,645
Total gross budgetary expenditures 3,493,349 1,016,374 1,848,478 2,795,735 629,599 1,333,057
Less Revenues Netted against Expenditures
Passport Program 270,933 73,267 150,279 384,859 86,833 208,198
International Experience Canada 9,938 1,792 5,627 9,938 1,303 4,281
Total net budgetary expenditures 3,212,478 941,315 1,692,572 2,400,938 541,463 1,120,578
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