Impact Assessment Agency of Canada's Quarterly Financial Report for Quarter ended September 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) second quarterly financial statement for the period ended September 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 ($76.48M in 2020-2021) have been reduced by $15.24M 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 ($61.24M in 2020-2021 and $74.21M in 2019-2020), which represent the resources available for the year as at September 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 $12.97M from the previous year, which is a result of reduced supply of the Main Estimates mentioned above. The variance between the Agency’s authorities from the first quarter of 2020-21 to the second quarter of 2020-21 is due to the approval and allocation of $2.42M in Operational Budget Carry Forward during the second quarter.

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

Figure 1 also outlines the Agency’s second quarter year-to-date budgetary expenditures net of revenues that have increased by $3.75M from the previous year ($28.68M in 2020-2021 under IAAC and $24.94M in 2019-2020 under CEAA).

In August 2019, the Agency transformed itself from the Canadian Environmental Assessment Agency to the current Impact Assessment Agency of Canada. The Agency has grown to meet this larger mandate. As a result, operating expenditures in personnel increased by $3.93M from the previous year ($23.27M in 2020-2021 and $19.34M in 2019-2020) and transfer payments increased by $1.05M from the previous year ($2.74M in 2020-2021 and $1.69M 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 honored 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

November 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
September 30, 2020

Year to date used at quarter-end

VOTE 1 - Net Operating Expenditures

$ 41,204,299

$ 11,904,662

$ 23,024,142

VOTE 5 - Grants and Contributions

$ 14,204,355

$ 1,710,276

$ 2,741,506

Statutory Authorities - Employee Benefits

$ 5,834,174

$ 1,458,544

$ 2,917,087

Total Authorities

$ 61,242,828

$ 15,073,482

$ 28,682,735

Fiscal Year 2019-2020 (in dollars)
 

Total available for use for the year ending
March 31, 2020

Used during the quarter ended
September 30, 2019

Year to date used at quarter-end

VOTE 1 - Net Operating Expenditures

$ 53,550,637

$ 12,052,756

$ 21,714,674

VOTE 5 - Grants and Contributions

$ 14,525,184

$ 438,102

$ 1,686,997

Statutory Authorities - Employee Benefits

$ 6,138,709

$ 1,534,677

$ 1,534,677

Total Authorities

$ 74,214,530

$ 14,025,535

$ 24,936,347

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
September 30, 2020

Year to date used at quarter-end

Expenditures

Personnel

$ 37,820,981

$ 11,491,745

$ 23,269,939

Transportation and Telecommunications

$ 1,371,164

$ 64,416

$ 106,596

Information

$ 324,149

$ 61,303

$ 98,254

Professional Services

$ 3,669,405

$ 1,559,020

$ 2,211,925

Rentals

$ 2,927,990

$ 26,239

$ 45,409

Purchased Repair and Maintenance

$ 120,224

$ 1,059

$ 3,556

Utilities, materials and supplies

$ 488,506

$ 27,197

$ 33,269

Acquisition of Machinery & Equipment

$ 1,605,524

$ 183,492

$ 218,600

Transfer Payments

$ 14,204,355

$ 1,710,276

$ 2,741,506

Other expenses

$ 1,710,530

-$ 5,592

-$ 646

Total Gross Budgetary Expenditures

$ 64,242,828

$ 15,119,155

$ 28,728,408

Less Revenues netted against Expenditures

Planned Revenues

Panel Reviews

$ 3,000,000

$ 45,673

$ 45,673

Total Revenue netted against expenditures

$ 3,000,000

$ 45,673

$ 45,673

Total net budgetary expenditures

$ 61,242,828

$ 15,073,482

$ 28,682,735

Fiscal Year 2019-2020 (in dollars)
 

Planned Expenditures for the year ending
March 31, 2020

Expended during the quarter ended
September 30, 2019

Year to date used at quarter-end

Expenditures

Personnel

$ 46,297,720

$ 10,084,878

$ 19,341,925

Transportation and Telecommunications

$ 1,968,122

$ 493,231

$ 852,497

Information

$ 391,485

$ 255,141

$ 374,302

Professional Services

$ 6,865,994

$ 2,475,981

$ 3,300,700

Rentals

$ 4,963,089

$ 87,715

$ 144,939

Purchased Repair and Maintenance

$ 8,557

$ 300

$ 390

Utilities, materials and supplies

$ 213,926

$ 68,161

$ 96,856

Acquisition of Machinery & Equipment

$ 1,307,089

$ 397,451

$ 465,567

Transfer Payments

$ 14,525,184

$ 1,248,895

$ 1,686,997

Other expenses

$ 973,364

-$ 2,731

-$ 2,717

Total Gross Budgetary Expenditures

$ 77,514,530

$ 15,109,022

$ 26,261,456

Less Revenues netted against Expenditures

Planned Revenues

Panel Reviews

$ 3,300,000

$ 1,083,487

$ 1,325,107

Total Revenue netted against expenditures

$ 3,300,000

$ 1,083,487

$ 1,325,107

Total net budgetary expenditures

$ 74,214,530

$ 14,025,535

$ 24,936,349

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

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