IRCC Minister Transition Binder 2023: Financial Review

Issue

• Budget 2023 proposed to reduce spending on consulting, other professional services, and travel by roughly 15% of planned 2023-2024 discretionary spending in these areas. The government will focus on targeting these reductions on professional services, particularly management consulting.
• Budget 2023 proposed to phase in a roughly 3% reduction of eligible spending by departments and agencies by 2026-2027. This will reduce government spending by $7.0B over four years, starting in 2024-2025, and $2.4B ongoing.
• For IRCC, the target for travel and professional [Redacted] reductions of 2023-2024 spending in these areas and is combined with a phased in [Redacted] reduction of global departmental appropriated funding.
• These targets are based on the Department’s appropriated reference levels for 2023-2024 and assumed stable on an ongoing basis, starting in 2026-2027.

State of Play

• Informal communication on targets was provided end of June 2023 and the Department has been liaising with the Treasury Board Secretariat to inform on elements of consideration in the establishments of the targets.
• The Department is working to develop proposals which will inform on strategies and determine impact on IRCC’s mandate delivery for the current and upcoming years.

Key Messages

• A responsive communications approach will be undertaken and the proposals impacts will inform the 2024-2025 Departmental Plan.

Next Steps

• You will be briefed on the proposals being put forward for the department in the coming weeks. Decisions associated with the budget reductions will require your approval by October 2, 2023.

Background

• IRCC is funded via three mechanisms:

I - Appropriation ($4.99B in 2023-2024 to date):

An appropriation is an authority   to pay money out of the Consolidated Revenue Fund (CRF), which specifies the amount that can be lawfully spent and its purpose. Most appropriations are “Voted” and require Parliament’s approval each year, however, certain authorities are considered “Statutory” meaning they have been approved under other statutes and do not require annual approval.

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• Program permanent funding baselines increased substantially throughout previous fiscal years mainly due to funding decisions from 2022-2023 for [Redacted]
• Interim Federal Health Program (IFH) (Vote 1) provides limited, temporary coverage of health care benefits to protected persons and refugees until they are covered by a provincial/territorial health insurance or private insurance program.
• Grants and Contributions provides funding for settlement and resettlement services enabling eligible permanent residents and government-assisted refugees to get the proper support and services to overcome integration barriers. It also includes funding for the Canada-Quebec Accord ($726.9M) as Quebec is responsible for providing reception and integration services to all immigrants in Quebec, including refugees. In exchange, funding, defined by formula, is provided by the federal government to Quebec.

II – Vote-Netted Revenues ($14M):

Net voting is a revenue spending authority whereby Parliament authorizes a department to apply revenues towards expenditures which are directly incurred for specific activities and the net financial requirements are voted one fiscal year at a time. The authority for a net voting operation must be approved each year through the vote wording in the Appropriation Act.

• IRCC is responsible for the International Experience Canada Program which promotes cultural exchanges between Canada and other countries through travel, life and work experience of youth.
• A fee of $161 CAD, adjusted annually by inflation, is charged to participants to offset direct program costs.

III – Revolving Fund – Passport Program:

• Operating on a 10-year business cycle, the Passport Program Revolving Fund is a revenue spending authority.
• The Revolving Fund Act authorizes IRCC’s Minister to spend revenues against Passport Program expenditures. The Deputy Minister, with the support of the Chief Financial Officer, are jointly accountable for the administration of the Revolving Fund. IRCC acts as the banker providing funds to other government departments for the delivery of the program (i.e., Employment and Social Development Canada (ESDC), Global Affairs Canada (GAC)).
• Accumulated surplus available to the program starting in 2023-2024 is $295.5M.
• The Passport Program operates on a full cost-recovery basis supported by revenues. [Redacted]
• The Revolving Fund Act prohibits the program from being in a deficit situation [Redacted]
• IRCC, ESDC and GAC, are looking at strategies to reduce program costs and leverage efficiency gains from the modernization projects in order to support sustainability and continue delivering quality services to Canadians.