Management Statement of Risks and Significant Changes in Operations, Personnel and Programs (2019-2020, Q1)

For Quarter ended June 30, 2019

Introduction

The Canadian Environmental Assessment Agency’s (the Agency) first quarterly financial statement report for the period ended June 30, 2019 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 under the Directive on Accounting Standards. It should be read in conjunction with the Main Estimates and Supplementary Estimates for the current year.

This report has not been subject to an external audit or review.

The Agency is the responsible authority for all projects subject to the Canadian Environmental Assessment Act, 2012 (CEAA 2012) except for those that are regulated by the National Energy Board or the Canadian Nuclear Safety Commission. In accordance with the transitional provisions of CEAA 2012, the Agency is also responsible for managing the environmental assessment (EA) of most projects that are required to be completed under the former Canadian Environmental Assessment Act.

In addition, the Agency advises and assists the Minister of Environment and Climate Change in establishing review panels and supports panels in their work. It also supports the Minister in fulfilling responsibilities under CEAA 2012, including the development and issuance of enforceable EA decision statements.

The Agency administers a Participant Funding Program that supports individuals, not-for-profit organizations, and Indigenous groups participating in federal EAs.

The Agency also has responsibilities for reviewing projects of a federal nature under the environmental and social protection regimes set out in sections 22 and 23 of the 1975 James Bay and Northern Quebec Agreement. The President of the Agency is designated by Order-in-Council as the federal administrator of these processes.

The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals establishes a self-assessment process for conducting a strategic EA of a policy, plan or program proposal. The Agency supports the Minister of Environment and Climate Change in promoting the application of the Cabinet Directive and provides training and guidance for federal authorities.

The Agency's activities are carried out under two core responsibilities: Environmental Assessments and Internal Services.

The Agency provides high-quality assessments of environmental effects to support government decision making. Environmental assessments ensure that adverse environmental effects are considered in a precautionary manner to maintain a healthy environment and to promote sustainable development.

Internal Services are those groups of related activities and resources that the federal government considers to be services in support of Programs and/or required to meet corporate obligations of an organization. Internal Services are:

The Agency was established in 1994 and is led by a President, who reports directly to the Minister of Environment and Climate Change. It has its headquarters in Ottawa and regional offices in St. John’s, Halifax, Quebec City, Toronto, Edmonton, and Vancouver.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency's spending authorities granted by Parliament and those used by the Agency consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2019-2020 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 moneys 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 Agency uses the full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of fiscal quarter and fiscal year-to-date (YTD) results

Figure 1 outlines the net budgetary authorities ($74,175,013 in 2019-2020 and $33,629,775 in 2018-2019), which represent the resources available for the year as at June 30, 2019 net of the revenue that is forecasted to be collected. Within those resources, a separate budgetary vote for Grants and Contributions was established in 2019-2020 to include new Grants and Contributions funding received to support the implementation of the Impact Assessment Agency of Canada. The Agency’s available authorities, net of revenues, increased by $40.55M from the previous year to support the implementation of the Impact Assessment Agency of Canada.

Figure 1 : First Quarter Year-to-Date Expenditures Compared to Annual Authorities

 

Figure 1 also outlines the Agency’s first quarter year-to-date budgetary expenditures net of revenues that have increased by $2.26M from the previous year ($10,910,813 in 2019-2020 and $8,650,959 in 2018-2019).

Risks and Uncertainties

The Agency’s expenditures and revenues are influenced by the number of EAs underway during any given fiscal year and with the number of EAs influenced by economic conditions outside the control of the Agency. To off-set portions of its expenditures, the Agency has vote-netted authority to recover certain costs from proponents in the conduct of EAs by review panels. The timing of revenue collection is uncertain and may impact the Agency’s overall financial results.

In addition, the timing of requests for participant funding for consultation varies and is unpredictable. A commitment to participant funding may be planned in one year but could be realized across multiple fiscal years depending on the progression of the environmental assessment. Unused commitments are carried forward from one year to another and are honoured by the Agency as they become due.

The Agency is also subject to litigation, the extent and costs are uncertain and are normally covered by the Agency’s annual appropriations.

Significant Changes in Relation to Operations, Personnel and Programs

The Government of Canada passed legislation in June 2019 to establish the Impact Assessment Agency of Canada, which will complete EAs underway and the Agency will transition from conducting EAs to Impact Assessments.

Approval by Senior Officials

Approved by:

Ron Hallman
President

Alan Kerr, CPA, CMA
Vice-President, Corporate Services and Chief Financial Officer

Ottawa, Canada
August 27, 2019

Statement of Authorities (unaudited)

Fiscal Year 2019-2020 (in dollars)
  Total available
for use the year ending March 31, 2020
Used during the quarter ended
June 30, 2019
Year to date used at quarter-end
VOTE 1 - Net Operating Expenditures $ 53,511,120 $ 8,938,034 $ 8,938,034
VOTE 5 - Grants and Contributions $ 14,525,184 $ 438,102 $ 438,102
Statutory Authorities - Employee Benefits $ 6,138,709 $ 1,534,677 $ 1,534,677
Total Authorities $ 74,175,013 $ 10,910,813 $ 10,910,813
Fiscal Year 2018-2019 (in dollars)
  Total available for
use for the year ending
March 31, 2019
Used during
the quarter ended
June 30, 2018
Year to date used
at quarter-end
VOTE 1 - Net Operating Expenditures $ 30,232,320 $ 7,787,857 $ 7,787,857
Statutory Authorities - Employee Benefits $ 3,397,455 $ 863,102 $ 863,102
Total Authorities $ 33,629,775 $ 8,650,959 $ 8,650,959

Agency Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2019-2020 (in dollars)
  Planned Expenditures for the year ending
March 31, 2020
Expended during the quarter ended
June 30, 2019
Year to date used at quarter-end
Expenditures
Personnel  $ 46,260,992  $ 9,257,047  $ 9,257,047
Transportation and Telecommunications  $ 1,967,865  $ 359,266  $ 359,266
Information  $ 391,434  $ 119,161  $ 119,161
Professional Services  $ 6,864,485  $ 824,719  $ 824,719
Rentals  $ 4,962,442  $ 57,223  $ 57,223
Purchased Repair and Maintenance  $ 8,556  $ 90  $ 90
Utilities, materials and supplies  $ 213,898  $ 28,694  $ 28,694
Acquisition of Machinery & Equipment  $ 1,306,919  $ 68,116  $ 68,116
Transfer Payments  $ 14,525,184  $ 438,102  $ 438,102
Other expenses  $ 973,238  $ 14  $ 14
Total Gross Budgetary Expenditures  $ 77,475,013  $ 11,152,432  $ 11,152,432
Less Revenues netted against Expenditures
Planned Revenues (Note 1)
Environmental assessment and training services -$ 3,300,000 -$ 241,619 -$ 241,619
Total Revenue netted against expenditures -$ 3,300,000 -$ 241,619 -$ 241,619
Total net budgetary expenditures  $ 74,175,013  $ 10,910,813  $ 10,910,813
Fiscal Year 2018-2019 (in dollars)
  Planned Expenditures
for the year ending March 31, 2019
Expended during the quarter ended
June 30, 2018
Year to date used at quarter-end
Expenditures 
Personnel  $ 25,749,131  $ 7,332,330  $ 7,332,330
Transportation and Telecommunications  $ 1,027,331  $ 200,856  $ 200,856
Information  $ 204,350  $ 44,931  $ 44,931
Professional Services  $ 2,036,805  $ 407,136  $ 407,136
Rentals  $ 2,590,661  $ 54,515  $ 54,515
Purchased Repair and Maintenance  $ 4,467  $ 256  $ 256
Utilities, materials and supplies  $ 111,666  $ 16,693  $ 16,693
Acquisition of Machinery & Equipment  $ 682,282  $ 18,092  $ 18,092
Transfer Payments  $ 4,715,000  $ 810,546  $ 810,546
Other expenses  $ 508,082  $ 1,068  $ 1,068
Total Gross Budgetary Expenditures  $ 37,629,775  $ 8,886,423  $ 8,886,423
Less Revenues netted against Expenditures 
Planned Revenues (Note 1)
Environmental assessment and training services -$ 4,000,000 -$ 235,464 -$ 235,464
Total Revenue netted against expenditures -$ 4,000,000 -$ 235,464 -$ 235,464
Total net budgetary expenditures  $ 33,629,775  $ 8,650,959  $ 8,650,959

Note 1: The Agency has authority to collect up to $8,001,000 in vote-netted revenue

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