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 16th instead of March 1st. This change, in effect for the remaining duration of the 42nd 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:

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:

Vote 5 – Capital Expenditures

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

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:

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:

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:

(Original signed by)
Catrina Tapley
Deputy Minister

(Original signed by)
Hughes St-Pierre, MA, CPA, CMA
Chief Financial Officer/
Comptroller

Ottawa, Canada
November 17, 2020

Statement of Authorities (in thousands of dollars)
(in thousands of dollars) Fiscal Year 2020-21 Fiscal Year 2019-20
Total available for use for the year ending March 31, 2021Footnote 1 Used during the quarter ended September 30, 2020 Year-to-date used at quarter-end 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
Vote 1 - Operating Expenditures 1,011,210 209,304 395,984 1,102,417 227,751 413,853
Vote 5 - Capital Expenditures 28,796 3,184 5,840 28,455 5,055 7,887
Vote 10 - Grants and Contributions 1,526,897 405,873 904,638 1,806,586 678,973 1,217,130
Vote 7 - Debt Write-off - - - - - -
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 81,657 25,035 40,301 89,072 18,625 37,251
Minister's Salary and Motor Car Allowance 89 23 45 88 22 44
Federal Skilled Worker Fees Returned (Terminated Applications) 87 38 87 247 114 247
Immigrant Investor Program and Entrepreneur Program Fees Returned (Terminated Applications) 32 13 32 83 32 83
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 16 - - 23 - -
Court Awards - - - 20 20 20
Refunds of Previous Years Revenue 6,527 4,329 6,527 663 1,683 6,663
Passport Program Revolving Fund 136,984 46,278 94,774 178,824 9,040 9,394
Total Budgetary Authorities 2,792,295 694,077 1,448,228 3,212,478 941,315 1,692,572
Non-Budgetary AuthoritiesFootnote 2 46,000 (1,235)Footnote 3 (4,809) 52,370 4,944Footnote 3 5,787
total authorities 2,838,295 692,842 1,443,419 3,264,848 946,259 1,698,359
Departmental Budgetary Expenditures by Standard Object
(in thousands of dollars) Fiscal Year 2020-21 Fiscal Year 2019-20
Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended September 30, 2020 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended September 30, 2019 Year-to-date used at quarter-end
Expenditures
Personnel 681,819 183,635 358,247 709,185 172,195 336,890
Transportation and Communications 51,273 1,315 1,853 53,249 10,390 19,095
Information 9,493 1,329 1,634 10,222 2,175 2,963
Professional and Special Services 708,827 103,381 169,312 770,516 143,534 228,737
Rentals 28,169 4,312 12,671 34,260 5,498 14,578
Repair and Maintenance 16,967 384 493 10,050 681 799
Utilities, Materials and Supplies 38,542 3,645 7,722 31,022 5,595 12,916
Acquisition of Machinery and Equipment 39,162 2,376 3,929 45,228 1,032 2,267
Transfer Payments 1,526,897 405,873 904,638 1,806,586 678,973 1,217,130
Other Subsidies and Payments 13,584 5,124 9,484 23,031 (3,699) 13,103
total gross budgetary expenditures 3,114,733 711,374 1,469,983 3,493,349 1,016,374 1,848,478
Less Revenues Netted against Expenditures
Passport Program 312,502 17,267 21,725 270,933 73,267 150,279
International Experience Canada 9,938 30 30 9,938 1,792 5,627
total net budgetary expenditures 2,792,293 694,077 1,448,228 3,212,478 941,315 1,692,572
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