Impact Assessment Agency of Canada's Quarterly Financial Report for Quarter ended June 30, 2020

From: Impact Assessment Agency of Canada

Statement outlining results, risks and significant changes in operations, personnel and programs

Introduction

The Impact Assessment Agency of Canada’s (the Agency) first quarterly financial statement for the period ended June 30, 2020 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, led by a President who reports directly to the Minister of Environment and Climate Change, has its headquarters in Ottawa and regional offices in St. John’s, Halifax, Quebec City, Toronto, Edmonton, and Vancouver. The Agency's activities are carried out under two core responsibilities: 1) Impact Assessments and 2) Internal Services.

1. Impact Assessments

The Agency delivers high-quality impact assessments that contribute to the informed decision making on major projects, in support of sustainable development. Through its delivery of Impact Assessment (IA), the Agency serves Canadians by looking at both positive and negative environmental, economic, social and health impacts of potential projects. The Agency:

In delivering on its core responsibilities for designated projects, the Agency collaborates with federal departments and agencies with specific expertise to provide information and advice that support the conduct of impact assessments. Where projects are associated with lifecycle regulators such as the Canada Energy Regulator, the Canadian Nuclear Safety Commission and the Offshore Petroleum Boards, the Agency works collaboratively with these partners to draw upon their expert knowledge and ensures that safety, licensing requirements, international obligations, and other key regulatory factors are considered as part of a single, integrated assessment. In accordance with the transitional provisions of Impact Assessment Act (IAA 2019), the Agency is also responsible to continue managing the environmental assessment (EA) of most projects required under the former Canadian Environmental Assessment Act (CEAA 2012).

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 IAA 2019, including the development and issuance of enforceable impact assessment (IA) decision statements.

2. Internal Services

Internal Services are resources that are required to enable Program delivery and are activities provided to meet corporate obligations of the Agency. Internal Services include:

Under IAA 2019, the Agency has an expanded mandate to administer four Grants and Contribution funding programs (Funding Programs):

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 IA 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.

Basis of Presentation

This quarterly report has been prepared by management using the 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 2020-2021 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 funds 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

Due to 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 the fall. As a result, the authorities available for use ($76.48 in 2020-2021) have been reduced by $17.66M due to the reduced supply of the Main Estimates. The Agency is expected to receive full supply for the 2020-2021 Main Estimates before the end of the fiscal year.

Figure 1 outlines the net budgetary authorities ($58.82M in 2020-2021 and $74.18M in 2019-2020), which represent the resources available for the year as at June 30, 2020 net of the revenue that is forecasted to be collected. The Agency’s available authorities, net of revenues, currently represent a decrease of $15.35M from the previous year.

Figure 1: First Quarter Year-to-Date Expenditures Compared to Annual Authorities
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 $2.70M from the previous year ($13.61M in 2020-2021 under IAAC and $10.91M in 2019-2020 under CEAA).

A comparative of net expenditures between the first quarter of 2020-2021 and 2019-2020 should take into account that the increase in expenditures from the previous year was largely due to the anomaly of the establishment of the new Impact Assessment Agency of Canada and the implementation of its expanded mandate in August 2019.

Operating expenditures in personnel increased by $2.52M from the previous year ($11.78M in 2020-2021 and $9.26M in 2019-2020) and transfer payments increased by $593K from the previous year ($1.03M in 2020-2021 and $438K in 2019-2020).

Risks and Uncertainties

The Agency’s expenditures and revenues are influenced by the number of assessments underway during a given fiscal year, and are affected by the economic conditions that are outside the control of the Agency. To off-set a portion of its expenditures, the Agency has vote-netted revenue authority to recover certain incurred costs from proponents in the conduct of assessments 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 grants or contributions participant funding under the four funding programs varies and is unpredictable. A contribution commitment to participant funding may be planned in one year but could be realized across multiple fiscal years depending on the progression of the impact assessment. Unused contribution commitments are carried forward from one year to another and are honoured by the Agency as they materialize.

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

Approval by Senior Officials

Approved by:


David McGovern
President


Simon Brault
Vice-President, Corporate Services and Chief Financial Officer

Ottawa, Canada
August 29, 2020

Statement of Authorities (unaudited)

Fiscal Year 2020-2021 (in dollars)
 

Total available for use for the year ending
March 31, 2021

Used during the quarter ended
June 30, 2020

Year to date used at quarter-end

VOTE 1 - Net Operating Expenditures

$38,782,561

$11,119,479

$11,119,479

VOTE 5 - Grants and Contributions

$14,204,355

$1,031,230

$1,031,230

Statutory Authorities - Employee Benefits

$5,834,174

$1,458,544

$1,458,544

Total Authorities

$58,821,090

$13,609,252

$13,609,252

Fiscal Year 2019-2020 (in dollars)
 

Total available for use for 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

$10,910,812

Agency Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2020-2021 (in dollars)
 

Planned Expenditures for the year ending March 31, 2021

Expended during the quarter ended June 30, 2020

Year to date used at quarter-end

Expenditures

Personnel

$35,399,244

$11,778,194

$11,778,194

Transportation and Telecommunications

$1,371,164

$42,180

$42,180

Information

$324,149

$36,951

$36,951

Professional Services

$3,669,405

$652,906

$652,906

Rentals

$2,927,990

$19,170

$19,170

Purchased Repair and Maintenance

$120,224

$2,497

$2,497

Utilities, materials and supplies

$488,506

$6,071

$6,071

Acquisition of Machinery & Equipment

$1,605,524

$35,108

$35,108

Transfer Payments

$14,204,355

$1,031,230

$1,031,230

Other expenses

$1,710,530

$4,946

$4,946

Total Gross Budgetary Expenditures

$61,821,090

$13,609,252

$13,609,252

Less Revenues netted against Expenditures
Planned Revenues

Panel Reviews

$3,000,000

$-

$-

Total Revenue netted against expenditures

$3,000,000

$-

$-

Total net budgetary expenditures

$58,821,090

$13,609,252

$13,609,252

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

$46,260,993

$9,257,048

$9,257,048

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

Panel Reviews

$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

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

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