Quarterly Financial Report for the quarter ended September 30, 2021

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 2021-22 Main Estimates Part II and the 2020-21 Quarterly Financial Report for the quarter ended September 30, 2020.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2021-22 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 2021-22 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

Due to the COVID-19 pandemic and limited sessions in Spring 2020 for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into Fall 2020. Hence, the 2020-21 Main Estimates included two interim supplies for the quarter ended September 30, 2020 as full supply was granted in December 2020.

The 2021-22 Main Estimates include authorities that were approved up until December 2020. Funding approved afterwards is sought via the Supplementary Estimates process.

In 2021-22, IRCC’s total authorities as at September 30, 2021 include full supply for the Main Estimates and incremental funding provided through the Supplementary Estimates A to support Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019. It also includes funding from the 2020-21 Operating and Capital Budget Carry Forward.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2021-22 increased by approximately $543.1 million (19.5%) compared to the same quarter in 2020-21. This increase is comprised of:

• An increase of $331.2 million (32.8%) in Vote 1 – Operating Expenditures
• An increase of $11.5 million (40.2%) in Vote 5 – Capital Expenditures
• An increase of $163.7 million (10.7%) in Vote 10 – Grants and Contributions
• An increase of $36.7 million (16.3%) in Statutory Authorities

The most significant impact on authorities in the amount of $221.3 million relates to the extension granted by the House of Commons for the study of supply into Fall 2020 due to the COVID-19 pandemic. Hence, the 2020-21 Main Estimates included two interim supplies for the quarter ended September 30, 2020 as full supply was granted in December 2020.

Changes to authorities also include an increase of $169.7 million for the Interim Federal Health Program to provide health care to refugees and asylum seekers, $123.9 million for implementing the multi-year immigration levels plans, $37.7 million to stabilize IRCC’s Global Case Management System to set the foundation for future transformation, and $24.5 million re-profiled from 2020-21 to 2021-22 for Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019. These increases were offset by the sunset of funding in the amount of $19.1 million for Improving Immigration Client Service announced in Budget 2019 and $18.9 million for Helping Travelers Visit Canada announced in Budget 2019.

Changes to authorities also include funding received through Treasury Board central vote for the 2020-21 Operating and Capital Budget Carry Forward.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures authorities’ net increase of $331.2 million (32.8 %) is explained as follows:

• Increases of $374.7 million are mainly comprised of:
  • Incremental funding of $169.7 million for the Interim Federal Health Program to provide health care to refugees and asylum seekers;
  • An amount of $87.8 million related to the extension granted by the House of Commons for the study of supply into Fall 2020 due to the COVID-19 pandemic;
  • Incremental funding of $28 million to deliver the immigration levels plans;
  • Incremental funding of $26.3 million to stabilize IRCC’s Global Case Management System to set the foundation for future transformation;
  • Incremental funding of $21.7 million for all newly signed collective agreements and other compensation-related adjustments;
  • Increase in funding of $12 million due to the realignment of funds from previous years to 2021-22 for expanding biometrics in Canada’s immigration system;
  • Incremental funding of $8.7 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019;
  • Net transfer of $8.7 million received from Global Affairs Canada for adjustments made to costs associated with supporting staff located at missions abroad;
  • Incremental allocation of $7.1 million for the protection of people from unscrupulous immigration and citizenship consultants; and
  • Increased allocation of $4.7 million through Treasury Board central vote for the Operating Budget Carry Forward.
• Decreases of $43.5 million are mainly comprised of:
  • Sunset funding of $19.1 million for Improving Immigration Client Service announced in Budget 2019;
  • Sunset funding of $18.9 million for Helping Travelers Visit Canada announced in Budget 2019;
  • Reduced funding in the amount of $2.0 million due to fluctuations in the funding profile for Canada’s New International Education Strategy announced in Budget 2019; and
  • Other adjustments in the amount of $3.5 million.

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities’ net increase of $11.5 million (40.2%) is explained as follows:

• Increases of $15.4 million are mainly comprised of:
  • Incremental funding of $11.4 million to stabilize IRCC’s Global Case Management System to set the foundation for future transformation; and
  • An amount of $4 million related to the extension granted by the House of Commons for the study of supply into Fall 2020 due to the COVID-19 pandemic.
• Decreases of $3.9 million are mainly comprised of:
  • Reduced funding of $3.7 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019; and
  • Other adjustments in the amount of $0.2 million.

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions authorities’ net increase of $163.7 million (10.7%) is explained as follows:

• Increases of $284.0 million are mainly comprised of:
  • An amount of $129.5 million related to the extension granted by the House of Commons for the study of supply into Fall 2020 due to the COVID-19 pandemic.
  • Incremental funding of $95.9 million to provide settlement and re-settlement services as part of the delivery of the multi-year plans immigration levels plans; and
  • Incremental funding of $58.6 million for the grant related to the Canada-Quebec Accord on immigration.
• Decreases of $120.3 million are mainly comprised of:
  • Sunset of $102.5 million for the support of provinces and municipalities with temporary housing for asylum claimants;
  • Reduced funding of $8.4 million due to fluctuations in the funding profile for Workforce and Career Pathways for Visible Minority Newcomer Women;
  • Reduced funding of $8.3 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019; and
  • Reduced funding of $1.1 million due to fluctuations in the funding profile for the Protection of Vulnerable Women and Girls.

Budgetary Statutory Authorities

The 2021-22 statutory authority level in the second quarter has increased by $36.7 million (16.3 %) compared to 2020-21, which is primarily explained as follows:

• Increase in statutory authority of $30.4 million as a result of a forecasted decrease in revenue for the Passport Program due to fluctuations in passport applications as fewer Canadians are renewing their travel documents in the second half of the 2013-2023 business cycle accentuated by the impact of COVID-19 restrictions;
• $3.8 million for Employee Benefit Plans as a result of an increase in funding levels in Vote 1 – Operating Expenditures and Vote 5 – Capital Expenditures; and
• Increased funding of $2.5 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, 2021 increased by $154.8 million (22%) compared to the same quarter in 2020-21. As described below, this variance is mainly attributable to changes related to Personnel, Professional and Special Services, and Transfer Payments.

Through the Passport Program and International Experience Canada, IRCC generated $42.8 million and $1.1 million respectively in re-spendable revenues in the second quarter of 2021-22. Overall, this resulted in a net budgetary expenditure of $822.4 million as of September 30, 2021 compared to $694.1 million in the same quarter in 2020-21.

Personnel expenditures have increased by $33.2 million (18%) which is mainly attributable to increases in salary as a result of newly signed collective agreements and other compensation-related adjustments as well as spending related to the immigration levels plans, Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019, the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation, and protecting people from unscrupulous immigration and citizenship consultants.

Professional and Special Services expenditures have increased by $63.9 million (62%) which is mainly explained by an increase in spending of $19.9 million for the Interim Federal Health program compared to the second quarter in 2020-21 as a result of the gradual reopening of non-essential services and medical offices as COVID-19 restrictions are lifted; $17.0 million for overseas passport delivery services supported by Global Affairs Canada and Shared Services Canada, as well as transaction costs related to Visa Application Centers (VAC) such as biometrics as a result of an increase in demand for IRCC’s services following the gradual re-opening of the borders; $12.6 million mainly related to an increase in the demand for travel documents processed by ESDC on behalf of IRCC following the gradual re-opening of borders; and finally $11.1 million for consultants to support IT projects including the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation, and Permanent Resident and Citizenship intake tools.

Transfer Payments have increased by $48.2 million (12%) which is mainly explained by an increase in spending of $19.7 million for the Canada-Quebec Accord. The increase is also attributable to higher immigration levels and refugee landings following the gradual re-opening of borders and easing of travel restrictions. As a result, payments have increased by $14.5 million to local non-profit organizations for the Settlement and Resettlement assistance programs, and $10.2 million to United Nations High Commissioner for Refugees and International Organization for Migration.

Passport re-spendable revenues have increased by $25.5 million (148%) compared to the same quarter in the previous fiscal year mainly due to an increase in application volumes with the gradual re-opening of borders and easing of travel restrictions.

International Experience Canada revenues have increased by $1.0 million compared to the same quarter in the previous fiscal year due to the gradual re-opening of the borders and easing of travel restrictions.

Cumulative analysis

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, IRCC’s year-to-date gross operating expenditures were $1,730 million in 2021-22 compared to $1,470 million in 2020-21, representing an increase of $260 million (18%).

Personnel expenditures have increased by $66.5 million (19%) which is mainly attributable to increases in salary as a result of newly signed collective agreements and other compensation-related adjustments, as well as spending related to the immigration levels plans, Enhancing the Integrity of Canada’s Borders and Asylum System initiative announced in Budget 2019, the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation, and protecting people from unscrupulous immigration and citizenship consultants.

Professional and Special Services expenditures have increased by $109.0 million (64%) which is mainly explained by an increase in spending of $36.7 million related to an increase in the demand for travel documents processed by ESDC on behalf of IRCC following the gradual re-opening of the borders; $30.9 million for the Interim Federal Health program compared to the second quarter in 2020-21 as a result of the gradual reopening of non-essential services and medical offices as COVID-19 restrictions are lifted; $21.0 million for overseas passport delivery services supported by Global Affairs Canada and Shared Services Canada, as well as transaction costs related to Visa Application Centers (VAC) such as biometrics as a result of an increase in demand for IRCC’s services following the gradual re-opening of borders; and finally $17.2 million for consultants to support IT projects including the stabilization of IRCC’s Global Case Management System to set the foundation for future transformation, and Permanent Resident and Citizenship intake tools.

Transfer Payments have increased by $71.0 million (8%) which is mainly explained by an increase in spending of $49.0 million for the Canada-Quebec Accord. The increase is also attributable to higher immigration levels and refugee landings following the gradual re-opening of borders and easing of travel restrictions. As a result, payments have increased by $11.3 million to local non-profit organizations for the Settlement and Resettlement assistance programs, and $10.7 million to United Nations High Commissioner for Refugees and International Organization for Migration.

Passport re-spendable revenues have increased by $44.7 million (206%) compared to the same quarter in the previous fiscal year mainly due to an increase in application volumes with the gradual re-opening of borders and easing of travel restrictions.

International Experience Canada revenues have increased by $2.2 million compared to the same quarter in the previous fiscal year due to the gradual re-opening of the borders and easing of travel restrictions.

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.

While all of IRCC’s lines of business have been affected by the COVID-19 pandemic, the Department continues to monitor the impacts on its operations while working towards improving its own internal processes and systems through change initiatives. IRCC is implementing a modernization and transformation agenda that will improve client service and better enable the department to maintain 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.

Since March 2020 up to mid-November 2021, COVID-19 has affected IRCC’s priorities and operations due to the ongoing closure of the Canadian borders to most non-essential travel. Specifically, the closure has resulted in a decrease in volumes in the Temporary and Permanent Resident streams. As travel restrictions are being gradually lifted, IRCC will continue to take the necessary measures and adopt financial strategies to adapt to the situation.

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

Effective August 16, 2021, Scott Jones joined IRCC as the Federal Lead on Proof of Vaccine Credentials and Associate Deputy Minister.

Effective September 7, 2021, the Modernization Sector was created to support the Digital Platform Modernization Phase 3 which was led on an acting capacity by Samantha McDonald until Jason Choueiri’s appointment as the Assistant Deputy Minister as of October 18, 2021.

Effective September 7, 2021, the temporary Afghanistan Task Team was created to strengthen Afghanistan coordination at IRCC which was led by Dr. Nicole Giles, Associate Assistant Deputy Minister, until Jennifer MacIntyre’s appointment as the Assistant Deputy Minister as of November 8, 2021.

There have been no other significant changes in relation to operations, personnel and programs during the quarter ended September 30, 2021.

Approval by Senior Officials

Approved by:

Ottawa, Canada
November 18, 2021

Departmental Budgetary Expenditures by Standard Object