Quarterly Financial Report for the quarter ended September 30, 2020

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 2020-21 Main Estimates Part II (PDF, 1 MB) and the 2019-20 Quarterly Financial Report for the quarter ended September 30, 2019.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2020-21 Departmental Plan.

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 2020-21 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 16^th instead of March 1^st. This change, in effect for the remaining duration of the 42^nd Parliament, resulted in the government tabling an Interim Estimates by mid-February to support Parliament’s scrutiny of interim supply, and tabling the Main Estimates in April, after the Federal Budget. With the end of this pilot project, tabling of Main Estimates returned to its normal schedule (by March 1) and funding no longer includes announcements made in the Federal Budget.

Due to the impacts of the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into Fall 2020. Hence, full supply for the 2020-21 Main Estimates is anticipated in December 2020.

In 2020-21, IRCC’s total authorities include two interim supplies for the Main Estimates and incremental funding provided through the Supplementary Estimates A, mainly to support provinces and municipalities for temporary housing with respect to increased volume of asylum claimants, and for information technology systems interoperability under the Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019. It also includes funding from the 2019-20 Operating and Capital Budget Carry Forward, and minor adjustments related to statutory items.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2020-21 decreased by approximately $420.2 million (-13%) compared to the same quarter in 2019-20. This decrease is comprised of:

• A decrease of $91.2 million (-8%) in Vote 1 – Operating Expenditures
• An increase of $0.3 million (1%) in Vote 5 – Capital Expenditures
• A decrease of $279.7 million (-16%) in Vote 10 – Grants and Contributions
• A decrease of $49.6 million (-18%) in Statutory Authorities

The most significant changes to authorities available for use mainly consist of a decrease of $221.3 million in the authorities available for use as per the Main Estimates. Due to the impacts of the COVID-19 pandemic and the limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall, and therefore, delaying full supply for the 2020-21 Main Estimates in December 2020.

Changes to authorities also include a decrease of $240 million to support provinces and municipalities for the temporary housing with respect to the increased volume of asylum claimants. IRCC received $324 million in the 2019-20 Main Estimates and an additional $18.5 million through a Treasury Board central vote allocation to support provinces and municipalities for the temporary housing with respect to the increased volume of asylum claimants. The unused amount of $102.5 million was carried into 2020-21 through the first Supplementary Estimates period.

Changes to authorities also include funding received through Treasury Board central vote for the 2019-20 Operating and Capital Budget Carry Forward.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures Authorities net decrease of $91.2 million (-8%) is explained as follows:

• Increases of $56.1 million are mainly comprised of:
  • Incremental funding in the amount of $32.9 million to provide health care to refugees and asylum seekers;
  • Incremental funding in the amount of $7 million for all newly signed collective agreements and other compensation-related adjustments;
  • Incremental funding of $5.3 million to improve Immigration Client Service;
  • Incremental funding of $3.7 million to implement Canada’s New International Education Strategy;
  • Incremental funding of $3.4 million for the continuation of Biometric Expansion screening in Canada’s immigration system; and
  • Increased allocation of $3.8 million through Treasury Board central vote for the Operating Budget Carry Forward.
• Decreases of $147.3 million are mainly comprised of:
  • Reduction of $87.8 million in authorities available for use due to the limited sessions in the spring for Parliament to study supply as a result of the COVID-19 pandemic; IRCC is expected to receive full supply for the 2020-21 Main Estimates in December 2020;
  • Reduced funding of $39.8 million due to fluctuation in funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System;
  • Transfer of $11.3 million to Global Affairs Canada and Shared Services Canada to support staff located at missions abroad;
  • Reduced funding of $3 million due to a fluctuation in the funding profile for Helping Travelers to Visit Canada;
  • Reduced funding of $1.8 million for International Mobility Program due to a fluctuation in the funding profile for program management coordination and internal services functions;
  • Reduced funding of $1.2 million due to a fluctuation in the funding profile for Immigration Levels Plans; and
  • Other adjustments in the amount of $2.4 million.

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures Authorities net increase of $0.3 million (1%) is explained as follows:

• Increases of $13 million are mainly comprised of:
  • Incremental funding of $11.1 million for Enhancing the Integrity of Canada’s Borders and Asylum System;
  • Incremental funding of $1 million for the Entry-Exit initiative; and
  • Incremental funding of $0.9 million for Canada’s New International Education Strategy.
• Decreases of $12.7 million are mainly comprised of:
  • Reduction of $4 million in authorities available for use due to the limited sessions in the spring for Parliament to study supply as a result of the COVID-19 pandemic; full supply for the 2020-21 Main Estimates is anticipated in December 2020;
  • Reduced funding of $3.3 million for International Mobility program due to the sunset of investments in IT systems;
  • Reduced funding of $2.6 million due to a fluctuation in the funding profile for Immigration Levels Plans; and
  • Other adjustments in the amount of $2.8 million.

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions Authorities net decrease of $279.7 million (-16%) is explained as follows:

• Increases of $129.9 million are mainly comprised of:
  • Incremental funding of $76.7 million for the Immigration Levels Plans;
  • Incremental funding of $32.2 million for the grant related to the Canada-Quebec Accord on immigration;
  • Incremental funding of $16.3 million for Enhancing the Integrity of Canada’s Borders and Asylum System; and
  • Incremental funding of $4.7 million to support the Action Plan for Official Languages 2018-2023.
• Decreases of $409.6 million are mainly comprised of:
  • Reduced funding of $240 million to support provinces and municipalities for temporary housing with respect to the increased volume of asylum claimants. IRCC received $324 million in the 2019-20 Main Estimates and $18.5 million through a Treasury Board central vote allocation to support provinces and municipalities for the temporary housing with respect to the increased volume of asylum claimants. The unused amount of $102.5 million was carried into 2020-21 through the Supplementary Estimates;
  • Reduction of $129.4 million in authorities available due to limited sessions in the spring for Parliament to study supply as a result of the impact of the COVID-19 pandemic; full supply for the 2020-21 Main Estimates is anticipated in December 2020;
  • Sunset of $32.2 million for the Government’s response to the Syrian Refugee crisis as settlement-focused resources have ended on March 31, 2020;
  • Reduced funding of $7 million due to a fluctuation in the funding profile for the Protection of Vulnerable Women and Girls; and
  • Other adjustments in the amount of $1 million.

Budgetary Statutory Authorities

The 2020-21 statutory authority level in the first quarter has decreased by $49.6 million (-18%) compared to 2019-20 which is primarily explained as follows:

• Decrease of $41.8 million due to statutory adjustments for the Passport Program revolving fund. The decrease is attributable to the decrease in passport applications, as fewer Canadians are renewing their travel documents in the second half of the 2013-2023 business cycle, resulting in a decrease in overall revenue for this program;
• Reduced funding of $7.4 million for Employee Benefit Plans as a result of a reduction in funding levels in Vote 1 – Operating Expenditures and Vote 5 – Capital Expenditures; and
• Reduced funding of $0.4 million related to other statutory authorities.

4. 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, total gross budgetary expenditures during the quarter ending September 30, 2020 decreased by $305 million (-30%) compared to the same quarter in 2019-20. As described below, this variance is mainly attributable to changes related to Personnel, Transportation and Communications, Professional and Special Services, Transfer Payments and Other Subsidies and Payments expenditures.

Through the Passport Program, IRCC generated $17.3 million in re-spendable revenues in the second quarter of 2020-21. Overall, this resulted in a net budgetary expenditure of $694.1 million as of September 30, 2020 compared to $941.3 million as of September 30, 2019.

Personnel expenditures have increased by $11.4 million (7%) which is mainly attributable to increases in salary as a result of newly signed collective agreements and incremental funding associated with Budget 2019 measures such as Enhancing the Integrity of Canada’s Borders and Asylum System, Improving Immigration Client Service, and Helping Travellers Visit Canada.

Transportation and Communications expenditures have decreased by $9.1 million (-87%) which is mainly comprised of $4.9 million in reduced spending related to passport material, postage costs as a result of a reduction in production volume while the Government of Canada focused efforts on measures to mitigate the impacts of the COVID-19 pandemic, and $4.2 million in reduced spending on travel related to operational activities as a result of travel and border restrictions.

Professional and Special Services expenditures have decreased by $40.2 million (-28%) which is mainly explained by a decrease in spending attributable to lower Visa Application Centre (VAC) transaction costs as a result of a decrease in demand for services such as biometrics due to travel and border restrictions, the postponement of work-site inspections for the International Mobility Program by a partner department, as well as a decrease in spending for the Interim Federal Health (IFH) program attributable to lower arrivals of asylum seekers and government assisted refugees. The decrease was offset by an increase of $2.5 million in spending for consultants to support IT projects.

Transfer Payments have decreased by $273.1 million (-40%) which is mainly explained by a decrease of $274.4 million in payments to provinces and municipalities for the Interim Housing Assistance Program, and a decrease of $9.4 million in payments to refugees to support the Resettlement Assistance Program. These decreases were offset by an increase of $8 million in spending for the Canada-Quebec Accord, and $2.7 million in payments to local non-profit organizations to support the Settlement Program because of previous quarter advances.

Other Subsidies and Payments expenditures have increased by $8.8 million (239%) which is mainly due to the outstanding Interdepartmental Settlement amounts reported in the same quarter last fiscal year, as well as an increase in refunds of revenues from previous years.

Passport re-spendable revenues have decreased by $56 million (-76%) compared to the same quarter in the previous year, mainly due to the decrease in application volumes attributable to travel and border restrictions.

International Experience Canada revenues have decreased by $1.8 million (-98%) compared to the same quarter in the previous year as a result of travel and border restrictions.

Cumulative analysis

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, IRCC’s year-to-date gross operating expenditures were $1,848 million in 2019-20 compared to $1,469 million in 2020-21 resulting in a decrease of $378 million (20%).

Personnel expenditures have increased by $21.4 million (6%) which is mainly attributable to increases in salary expenditures associated to Budget 2019 measures such as Enhancing the Integrity of Canada’s Borders and Asylum System, Improving Immigration Client Service, and Helping Travellers Visit Canada, as well as additional personnel expenditures due to newly signed collective agreements.

Transportation and Communication expenditures have decreased by $17.2 million (-90%) which is mainly comprised of $10.4 million in reduced spending related to passport material, postage costs as a result of a reduction in production volume while the Government of Canada focused efforts on measures to mitigate the impacts of the COVID-19 pandemic, and $6.5 million for travel related to operational activities as a result of travel and border restrictions.

Professional and Special Services expenditures have decreased by $59 million (-26%) which is mainly explained by a decrease in spending attributable to lower Visa Application Centre (VAC) transaction costs as a result of a decrease in demand for services such as biometrics due to travel and border restrictions, the postponement of work-site inspections for the International Mobility Program by a partner department, as well as a decrease in spending for the Interim Federal Health (IFH) program attributable to lower arrivals of asylum seekers and government assisted refugees. The decrease was offset by an increase of $2.5 million in spending for consultants to support IT projects.

Transfer payments have decreased by $312.5 million (-26 %) which is mainly explained by a decrease of $342.5 million in payments to provinces and municipalities for the Interim Housing Assistance Program, a decrease of $14.5 million in payments to refugees to support the Resettlement Assistance Program, offset by an increase of $24.1 million in spending for the Canada-Quebec Accord, and an increase of $20.4 million in payments to local non-profit organizations to support the Settlement Program.

Other Subsidies and Payments have decreased by $3.6 million (-28%) which is mainly due to a decrease in the outstanding Interdepartmental Settlement amounts. This decrease was offset by an increase in refunds of revenues from previous years. Passport re-spendable revenues have decreased by $128.6 million (-86%) compared to the same period in the previous year due to a decrease in application volumes attributable to travel and border restrictions.

5. 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.

As part of its risk mitigation strategy, IRCC continues to monitor the impacts of COVID-19 pandemic on its operations while working towards improving its own internal processes and systems. IRCC is implementing a modernization and transformation agenda that will improve client service and better enable the department to conduct its operations in the pandemic environment.

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 and may also affect the department’s clients.

COVID-19 has affected IRCC’s priorities and operations in the current fiscal year due to the ongoing closure of the border to most non-essential travel. Specifically, the closure has resulted in a decrease in volumes in the Temporary and Permanent Resident streams and difficulties in processing these applications due to various disruptions to the domestic and global workforce. As the pandemic situation continues to evolve, IRCC will continue to closely monitor impacts on its operations and adapt financial strategies accordingly.

In the context of humanitarian reasons and/or legal obligations, IRCC is implementing measures to facilitate travel of eligible foreign nationals, permanent residents and Canadian citizens by processing applications for visas or other necessary documents on an urgent basis.

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.

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

There have not been significant changes in relation to operations, personnel and programs during the quarter ended September 30, 2020.

Approval by Senior Officials

Approved by:

Ottawa, Canada
November 17, 2020