Impact Assessment Agency of Canada’s Quarterly Financial Report for Quarter ended December 31, 2023

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

Introduction

The Impact Assessment Agency of Canada’s (the Agency) third quarterly financial statement for the period ended December 31, 2023 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 Assessment and 2) Internal Services.

1. Impact Assessment

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 ensure 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), the Agency is also responsible for continuing to manage the environmental assessment (EA) of most projects required under the former Canadian Environmental Assessment Act, 2012 (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 the IAA, including the development and issuance of enforceable 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 Grant 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 2023–2024 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

Figure 1 outlines the net budgetary authorities ($105.38M in 2023–2024 and $84.68M in 2022–2023), which represents the resources available for the year as of December 31, 2023, net of the revenue that is forecasted to be collected. The Agency’s available authorities, net of revenues, currently represent an increase of $20.70M (24.45%) from the previous year. This variance is due to new funding announced in the Fall Economic Statement 2022 (FES 2022) as well as Budget 2023 for the Agency to continue to implement the Impact Assessment Act (IAA) and complete assessments started under the Canadian Environmental Assessment Act, 2012 (CEAA 2012). The Agency also received new funding to implement recently signed collective agreements.

Figure 1: Third Quarter Year-to-Date Expenditures Compared to Annual Authorities (in dollars)

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

Note: Totals may not add due to rounding.

Figure 1 also outlines the Agency’s third quarter year-to-date budgetary expenditures, net of revenues, that have increased by $13.57M (27.85%) from the previous year ($62.27M in 2023–2024 and $48.70M in 2022–2023). This increase is explained by the following:

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 grant or contribution 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 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 costs are normally covered by the Agency’s annual appropriations.

In fiscal year 2023-2024, the Agency was required to undertake work on legislative amendments to respond to a Supreme Court of Canada (the Court) decision. While the Court affirmed there is no doubt that Parliament can enact impact assessment legislation to assess the effects that some major projects pose to the environment, it found that key decision-making provisions under the IAA were not sufficiently focused on matters within federal jurisdiction. As a result, there is no ability to take enforceable decisions under the IAA until amendments are passed to restore constitutionality. The Government provided guidance on the Agency’s interim administration of the IAA in order to provide as much certainty and continuity as possible. The Government also committed to moving quickly to introduce amendments to restore the IAA, at the earliest opportunity in Spring 2024.

Approval by Senior Officials

Approved by:

____________________________________
Terence Hubbard
President

____________________________________
Joelle Raffoul
Vice-President, Corporate Services and Chief Financial Officer

Ottawa, Canada
February 27, 2024

Statement of Authorities (unaudited)

Fiscal Year 2023–2024 (in dollars)
 

Total available for use for the year ending March 31, 2024

Used during the quarter ended December 31, 2023

Year-to-date used at quarter ended December 31, 2023

VOTE 1 - Net operating expenditures

76,351,816

17,100,399

43,715,531

VOTE 5 - Grants and contributions

21,453,903

4,824,130

12,874,341

Statutory Authorities - Employee benefits

7,572,008

1,893,002

5,679,006

Total Authorities

105,377,727

23,817,531

62,268,878

Note: Totals may not add due to rounding.

Fiscal Year 2022-2023 (in dollars)
 

Total available for use for the year ended March 31, 2023

Used during the quarter ended December 31, 2022

Year-to-date used at quarter ended December 31, 2022

VOTE 1 - Net operating expenditures

57,192,392

13,218,609

37,326,566

VOTE 5 - Grants and contributions

21,453,903

3,535,123

6,856,105

Statutory Authorities - Employee benefits

6,028,714

1,507,178

4,521,535

Total Authorities

84,675,009

18,260,910

48,704,206

Note: Totals may not add due to rounding.

Agency Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2023–2024 (in dollars)
  Planned expenditures
for the year ending March 31, 2024
Expended during the quarter ended
December 31, 2023
Year-to-date used at quarter ended
December 31, 2023

Expenditures

Personnel

60,893,906

16,577,057

42,881,052

Transportation and telecommunications

2,282,887

321,023

711,182

Information

959,954

62,520

202,739

Professional services

7,741,686

1,802,404

5,183,039

Rentals

7,647,749

27,540

61,306

Purchased repair and maintenance

57,598

13,944

20,943

Utilities, materials and supplies

253,135

40,927

73,359

Acquisition of machinery & equipment

3,284,253

207,064

816,853

Transfer payments

21,453,903

4,824,130

12,874,341

Other expenses

1,466,406

866

(729)

Total gross budgetary expenditures

106,041,476

23,877,475

62,824,085

Less planned revenues netted against expenditures

Panel reviews

663,749

59,944

555,206

Total net budgetary expenditures

105,377,727

23,817,531

62,268,878

Note 1: Totals may not add due to rounding.

Note 2: The Agency has authority to collect up to $8,001,000 in vote-netted revenue.

Fiscal Year 2022–2023 (in dollars)
  Planned expenditures
for the year ended March 31, 2023
Expended during the quarter ended
December 31, 2022
Year-to-date used at quarter ended
December 31, 2022

Expenditures

Personnel

48,157,882

12,110,385

36,138,150

Transportation and telecommunications

2,823,061

257,301

627,088

Information

934,101

86,216

350,376

Professional services

8,853,679

1,983,884

5,068,196

Rentals

3,754,856

44,477

62,046

Purchased repair and maintenance

11,532

1,545

9,240

Utilities, materials and supplies

281,384

31,418

61,177

Acquisition of machinery & equipment

1,314,661

306,042

417,928

Transfer payments

21,453,903

3,535,123

6,856,105

Other expenses

89,950

1,516

375,752

Total gross budgetary expenditures

87,675,009

18,357,907

49,966,058

Less planned revenues netted against expenditures

Panel reviews

3,000,000

96,997

1,261,852

Total net budgetary expenditures

84,675,009

18,260,910

48,704,206

Note 1: Totals may not add due to rounding.

Note 2: The Agency has authority to collect up to $8,001,000 in vote-netted revenue.

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