Quarterly Financial Report for the quarter ended September 30, 2022

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 2022-23 Main Estimates Part II and the 2021-22 Quarterly Financial Report for the quarter ended September 30, 2021.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2022-23 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 2022-23 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 Report 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

The 2022-23 Main Estimates include authorities that were approved up until January 2022. Funding approved afterwards is sought via the Supplementary Estimates process.

In 2022-23, IRCC’s total authorities as at September 30, 2022 include full supply for the Main Estimates and incremental funding provided through the Supplementary Estimates (A) to respond to the crises in Afghanistan and Ukraine. The department continues working towards the resettlement of the affected individuals by facilitating their safe passage, flights, temporary accommodations, financial support, etc.

Total authorities to date also include funding from the 2021-22 Operating and Capital Budget Carry Forward and an allocation from Treasury Board Vote 5 – Government Contingencies for Ukraine.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2022-23 increased by approximately $1,160.2 million (34.8%) compared to the same quarter in 2021-22. This increase is comprised of:

• An increase of $435.7 million (32.5%) in Vote 1 – Operating Expenditures
• A decrease of $1.8 million (-4.5%) in Vote 5 – Capital Expenditures
• An increase of $755.0 million (44.7%) in Vote 10 – Grants and Contributions
• A decrease of $28.7 million (-10.9%) in Statutory Authorities

The most significant impact on authorities in the amount of $627.3 million (54.1% of the total increase) is related to funding secured to address crises in Ukraine ($430.3 million) and Afghanistan ($197.0 million).

Changes to authorities also include an increase of $208.8 million for implementing the multi-year immigration levels plans, $173.0 million for the Interim Housing Assistance Program, $83.5 million for Interim Federal Health Program, and $46.8 million for the grant related to the Canada-Quebec Accord on immigration.

Changes to authorities also include funding received through Treasury Board central vote for the 2021-22 Operating and Capital Budget Carry Forward.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures authorities net increase of $435.7 million (32.5%) is explained as follows:

• An increase of $469.9 million attributable to the following items:
  • New funding of $195.1 million for Special Immigration Measures for Ukrainian Nationals;
  • Incremental funding of $87.5 million to implement the multi-year immigration levels plans;
  • Incremental funding of $83.5 million for the Interim Federal Health Program to provide health care services to refugees and asylum seekers;
  • New funding of $43.4 million for the Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada;
  • New funding of $29.9 million for building Canada’s modern, digital, and data-driven migration system announced in Budget 2021;
  • New funding of $17.9 million for Upholding and Improving Client Services announced in Budget 2021;
  • Net transfer of $6.3 million from Global Affairs Canada due to changes in staff located at missions abroad;
  • Incremental funding of $2.6 million for all newly signed collective agreements and other compensation-related adjustments;
  • Increased allocation of $2.6 million through Treasury Board central vote for the Operating Budget Carry Forward; and
  • Other adjustments in the amount of $1.1 million.
• A decrease of $34.2 million attributable to the following items:
  • Reduced funding in the amount of $28.2 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System announced in Budget 2019; and
  • Reduced funding in the amount of $6.0 million for expanding biometrics in Canada’s immigration system.

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures authorities net decrease of $1.8 million (-4.5%) is explained as follows:

• An increase of $1.2 million attributable to the following item:
  • Incremental funding of $1.2 million for Enhancing the Integrity of Canada’s Borders and Asylum System announced in Budget 2019.
• A decrease of $3.0 million attributable to the following items:
  • Reduced funding of $1.8 million due to fluctuations in the funding profile for stabilizing IRCC’s Global Case Management System to set the foundation for future transformation; and
  • Other adjustments in the amount of $1.2 million.

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions authorities net increase of $755.0 million (44.7%) is explained as follows:

• An increase of $759.1 million attributable to the following items:
  • New funding of $227.6 million for Special Immigration Measures for Ukrainian Nationals;
  • New funding of $173.0 million for the grant for the Interim Housing Assistance Program to provide financial support to provinces and municipal governments to address interim housing pressures resulting from increased volumes of asylum claimants entering Canada;
  • New funding of $149.5 million for the Afghanistan resettlement commitment including measures enacted to evacuate and facilitate immigration of Afghan nationals to Canada;
  • Incremental funding of $109.7 million to implement the multi-year Immigration Levels Plans;
  • Incremental funding of $46.8 million for the grant related to the Canada-Quebec Accord on immigration;
  • Incremental funding of $25.6 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System announced in Budget 2019;
  • New funding of $14.5 million for Youth Employment and Skills Strategy;
  • New funding of $10.1 million for the extension of the Racialized Newcomer Women Pilot announced in Budget 2021 measure; and
  • New funding of $2.3 million for Canada’s response to the Venezuelan refugee and migrant crisis in Latin America and the Caribbean Region.
• A decrease of $4.1 million attributable to the following item:
  • Reduced funding of $4.1 million due to the funding ending for the Workforce and Career Pathways for Visible Minority Newcomer Women pilot program. Budget 2018 announced funding over 3 years, starting in 2018-19, to support the employment and career advancement of visible minority newcomer women across Canada.

Budgetary Statutory Authorities

The 2022-23 statutory authority level in the second quarter decreased by $28.7 million (-10.9%) compared to 2021-22 which is explained as follows:

• Decrease of $57.4 million in the Passport Program is due to an anticipated increase in the Passport Program’s revenues with the new 10-year business cycle starting in 2023–24 . The Passport Program operates on a full cost-recovery basis from fees charged for issuing passports and other travel documents. During the 10 year-year business cycle, the Passport Program will generate more revenues in the first half of the cycle than the program requires, which will compensate for the expected reduction in passport demand in the second half of the cycle. The accumulated surplus collected in the preceding years will compensate for future deficits.
• Increased funding of $23.2 million for Employee Benefit Plans as a result of increases in funding levels in Vote 1 – Operating Expenditures; and
• Increased funding of $5.5 million related to other statutory authorities.

4. Significant changes to departmental budgetary expenditures by standard object

Quarter over quarter analysis

Total gross budgetary expenditures during the quarter ending September 30, 2022 increased by $370.6 million (42.8%) compared to the same quarter in 2021-22. As described below, this variance is attributable to changes related to Salaries and Employment Benefits, Transportation and Communications, Professional and Special Services, Rentals, Utilities, Materials and Supplies and Transfer Payments.

Through the Passport Program and International Experience Canada, IRCC generated $91.3 million and $1.9 million respectively in re-spendable revenues in the second quarter of 2022-23. Overall, this resulted in net budgetary expenditures of $1,143.5 million as of September 30, 2022 compared to $822.4 million in the same quarter in 2021-22.

Salaries and Employment Benefits have increased by $30.5 million (14.1%) which is attributable to spending related to the implementation of the multi-year immigration levels plans; Budget 2021 announcements for Upholding and Improving Client Services, and for building Canada’s modern, digital, and data-driven migration system; the Afghanistan resettlement commitment including measures enacted to evacuate and facilitate the immigration of Afghan nationals to Canada; as well as the special immigration measures for Ukrainian Nationals and the provision of transitional financial assistance to foreign nationals facilitated under the Canada-Ukraine Authorization for Emergency Travel.

Transportation and Communications expenditures have increased by $9.4 million (139.0%) which is related to an increase in the volume of travel documents, and in turn expedited services, compared to the quarter ended September 30, 2021. This increase in volume is a result of the lifting of travel and border restrictions and public health measures related to the COVID-19 pandemic. Furthermore, the increase in travel expenditures is attributable to the resumption of travel by the department’s officials to deliver on the government’s commitment to the Ukraine and Afghanistan crises, and to reduce inventory backlogs.

Professional and Special Services expenditures have increased by $70.1 million (41.9%) which is comprised of $32.3 million for passport delivery services supported by Employment and Social Development Canada (ESDC), Global Affairs Canada (GAC) and Shared Services Canada (SSC); $19.2 million in transactions costs related to Visa Application Centers (VAC) such as biometrics as a result of an increase in demand for IRCC’s services; $10.5 million for Interim Lodging Services (ILS) as a result of an increase in temporary accommodation costs associated with the increased arrival of asylum claimants ; and $8.1 million for the Interim Federal Health Program compared to the second quarter in 2021-22 due to the increase in asylum claimants with the lifting of travel and border restrictions and public health measures related to COVID-19.

Rentals expenditures have increased by $22.6 million (295.2%) which is attributed to ILS and an increase in hotel accommodation costs in response to the surge in asylum claimants seen this quarter compared to the same quarter in 2021-22.

Utilities, Materials and Supplies expenditures have increased by $8.8 million (133.0%) which is attributable to an increase in printed materials for the Passport Program as more passport booklets are being printed and mailed due to a higher demand for travel documents.

Transfer Payments have increased by $224.9 million (49.5%) which can be explained by an increase in payments of $129.9 million to refugees under the Resettlement Assistance program (RAP) including $107.6 million to Ukrainian refugees; $89.6 million to local non-profit organizations; and $1.0 million to municipalities under the Settlement and RAP programs to support the increased immigration and refugee arrivals. There is also an increase of $6.7 million in spending for the Canada-Quebec Accord and a decrease of $4.7 million in payments to International Organization for Migration due to the timing of certain grant payments.

Passport re-spendable revenues have increased by $48.6 million (113.5%) compared to the same quarter in the previous fiscal year, due to the increase in application volumes attributable to the lifting of travel and border restrictions introduced to control the spread of COVID-19.

International Experience Canada revenues have increased by $0.9 million (83.0%) compared to the same quarter in the previous fiscal year as a result of the lifting 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 $2,409.7 million in 2022-23 compared to $1,729.7 million in 2021-22, representing an increase of $680.0 million (39.3%). This variance is attributable to changes related to Standard Objects which are a classification of expenditures used by all departments including Salaries and Employment Benefits, Transportation and Communications, Professional and Special Services, Rentals, Utilities, Materials and Supplies and Transfer Payments.

Through the Passport Program and International Experience Canada, IRCC generated $164.9 million and $5.0 million respectively in re-spendable revenues to date in 2022-23. Overall, this resulted in net budgetary expenditures of $2,239.8 million as of September 30, 2022 compared to $1,661.1 million by the end of the same quarter in 2021-22.

Salaries and Employee Benefits have increased by $59.0 million (13.9%) which is attributable to spending related to the implementation of the multi-year immigration levels plans; Budget 2021 announcements for Upholding and Improving Client Services, and for building Canada’s modern, digital, and data-driven migration system; the Afghanistan resettlement commitment including measures enacted to evacuate and facilitate the immigration of Afghan nationals to Canada; as well as the special immigration measures for Ukrainian nationals and the provision of transitional financial assistance to foreign nationals facilitated under the Canada-Ukraine Authorization for Emergency Travel.

Transportation and Communications expenditures have increased by $16.3 million (180.6%) which is related to an increase in courier services due to higher volumes of passports issued, compared to the quarter ended September 30, 2021. This increase in volume of passports is a result of the lifting of travel and border restrictions and public health measures related to the COVID-19 pandemic. Furthermore, the increase in travel expenditures is attributable to the resumption of travel by the department’s officials to deliver on the government’s commitment to the Ukraine and Afghanistan crises, and to reduce inventory backlogs.

Professional and Special Services expenditures have increased by $135.5 million (48.7%) which is comprised of $60.6 million for passport delivery services supported by Employment and Social Development Canada (ESDC) and Global Affairs Canada (GAC) and Shared Services Canada (SSC); $40.2 million in operational costs for the collection of biometrics by our third parties in Visa Application Centers (VAC) as a result of an increase in travelling and entries in Canada; $14.5 million for the Interim Federal Health Program due to the increase in asylum claimants using this program with the lifting of travel and border restrictions and public health measures related to COVID-19; $12.9 million for Interim Lodging Services (ILS) as a result of an increase in temporary accommodation costs and basic necessities of life (e.g. meals and basic health services) associated with the increased arrival of asylum claimants; $3.7 million in legal services as a result of an increase in litigation cases.

Rentals expenditures have increased by $32.8 million (206.6%) which is attributed to ILS and an increase in hotel accommodation costs in response to the surge in asylum claimants seen this fiscal year compared to previous fiscal year. The increase in asylum claimants this fiscal year can be explained by the lifting of travel and border restrictions and public health measures related to COVID-19.

Utilities, Materials and Supplies expenditures have increased by $21.0 million (251.3%) which is attributable to an increase in printed materials for the Passport Program as more passport booklets are being printed and mailed due to a higher demand for travel documents.

Transfer Payments have increased by $409.4 million (42.0%) which is explained by an increase in payments of $258.1 million to refugees under the Resettlement Assistance Program (RAP) including $107.6 million to Ukrainian refugees; $115.1 million to local non-profit organizations; and $1.0 million to municipalities under the Settlement and RAP programs to support the increased immigration and refugee arrivals. There is also an increase of $30.1 million in spending for the Canada-Quebec Accord, and an increase of $2.7 million in payments to International Organization for Migration due to the timing of certain grant payments.

Passport re-spendable revenues have increased by $98.5 million (148.4%) by the end of the second quarter of 2022-23 compared to the same quarter in the previous fiscal year, due to the increase in application volumes attributable to the lifting of travel and border restrictions introduced to control the spread of COVID-19.

International Experience Canada revenues have increased by $2.8 million (124.8%) compared to the same quarter in the previous fiscal year as a result of the lifting of travel and border 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, impacts of climate change on migration, the Canadian and global economic, social or political contexts and shifting migration trends.

As a result of lifting the travel and border restrictions related to the COVID-19 pandemic, the department continues to experience higher demand for services such as passports and settlement of Afghan and Ukraine nationals in Canada. While IRCC works towards addressing these emerging priorities, efforts remain in place towards improving its own internal processes and systems through change initiatives. As such, a modernization and transformation agenda is being implemented to help 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, COVID-19 has affected IRCC’s priorities and operations due to the ongoing closure of the Canadian borders to most non-essential travel in the past two fiscal years. As travel restrictions and health measures are being lifted, IRCC will continue to take the necessary measures and adopt financial strategies to adapt to the evolving pre-pandemic demand for its services.

Moreover, the department continues to facilitate the complex evacuation of Afghan and Ukraine nationals and to help them settle in Canada.

Litigation and Legal

IRCC operates in a very high volume litigation environment which includes complex, high profile and high impact 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

Christiane Fox was appointed as Deputy Minister and Scott Harris was appointed as Associate Deputy Minister effective July 18, 2022 to replace Caroline Xavier who assumed the role of Chief of the Communications Security Establishment effective August 31, 2022.

Arun Thangaraj was appointed as Associate Deputy Minister effective September 6, 2022.

Darcy Pierlot was appointed Chief Information Officer and Assistant Deputy Minister, Digital Strategy, Services, and Innovation (DSSI) on September 15, 2022, replacing Rina Lorello who was appointed Chief Information Officer and Assistant Deputy Minister at Employment and Social Development Canada.

Michèle Kingsley was appointed Assistant Deputy Minister, Operations, as of October 31, 2022 to replace Nicole Giles who assumed the role of Senior Assistant Deputy Minister within the Public Safety portfolio.

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

Approval by Senior Officials

Approved by:

Ottawa, Canada
November 17, 2022

Statement of Authorities

Departmental Budgetary Expenditures by Standard Object