Impact Assessment Agency of Canada
Quarterly Financial Report
For the quarter ended June 30, 2026

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

Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. It should be read in conjunction with the Main Estimates.

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

Mandate and program activities

The Impact Assessment Agency of Canada (IAAC) delivers high-quality environmental and impact assessments under the Impact Assessment Act (IAA). Through open and efficient assessment processes, IAAC facilitates the development of designated projects. These assessments identify ways to ensure the environment and Indigenous rights are protected as projects get built. To support needed investment in designated projects, IAAC works closely with other jurisdictions to achieve the goal of “one project, one review.”

Additional information about IAAC’s mandate can be found on its website and additional financial information may be found in IAAC’s 2026–2027 Departmental plan and in the 2026–2027 Main Estimates.

Under its Program inventory, IAAC delivers the Impact Assessment Grants and Contributions Program (its Funding Programs), which includes the:

• Participant Funding Program;
• Indigenous Capacity Support Program;
• Policy Dialogue Program; and
• Research Program.

Basis of presentation

This quarterly report has been prepared by management using the expenditure basis of accounting. The accompanying Statement of Authorities includes IAAC’s spending authorities granted by Parliament, and those used by IAAC consistent with the Main Estimates for the 2026-2027 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, under certain conditions, the preparation of special warrants to be signed by the Governor General authorizing payments to be made out of the Consolidated Revenue Fund. Special warrants are deemed to be an appropriation for the fiscal year in which they are issued.

IAAC 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 the fiscal year-to-date (YTD) results

Text version

This graph contains information related to first quarter year-to-date expenditures compared to annual authorities for fiscal years 2026-2027 and 2025-2026. It presents financial information in dollars using stacked columns.

The graph compares annual authorities and first quarter net expenditures for each fiscal year. Each column is divided into two categories: operating expenditures, net of revenues, and grants and contributions.

The annual authorities available for use ($109.48M in 2026–2027 compared with $115.44M in 2025–2026), representing budgetary expenditures granted by Parliament at quarter-end less the vote-netted revenue IAAC has authority to collect, decreased by $5.96M (5.16%). This decrease is primarily attributable to $7.89M in 2026-2027 expenditure reductions announced in Budget 2025 as part of the Comprehensive Expenditure Review (CER), which were partially offset by $1.94M in funding level adjustments.

The first quarter year-to-date budgetary expenditures, net of revenues, decreased by $4.20M (15.78%) compared with the same period in the previous year, from $26.62M in 2025–2026 to $22.42M in 2026–2027. This decrease is primarily explained by the following:

• Transfer payments (grants and contributions) decreased by $3.25M (53.78%), from $6.05M in 2025-2026 to $2.80M in 2026–2027. The variance reflects differences in the amount and timing of payments between reporting periods, based on the funding requirements and phases of multi-year projects.
• Personnel expenditures decreased slightly by $0.64M (3.52%), from $18.22M in 2025-2026 to $17.58M in 2026–2027. The decrease was mainly due to lower staffing levels.
• Revenues increased by $0.57M, from $0.13M in 2025-2026 to $0.70M in 2026–2027. The increase was largely attributable to new designated projects requiring assessments by review panels. Revenues fluctuate based on the timing, number, and complexity of projects under assessment.

Risks and uncertainties

Legal challenges

IAAC is subject to litigation, the extent and costs of which are uncertain. If applicable, these costs are normally covered by IAAC’s annual appropriations. IAAC mitigates these risks through proactive legal oversight, close monitoring of ongoing cases, and the implementation of sound risk management and governance practices.

Digital modernization

IAAC’s current level of digitization poses a strategic risk to operational efficiency and service delivery, as reliance on manual processes reduces agility, increases the potential for errors, and constrains our ability to leverage data for timely, evidence-based decision-making. IAAC is advancing its digital modernization efforts by strengthening the planning and investment approach for digital initiatives and pursuing opportunities for collaboration and shared solutions across government. While progress is being made, continued modernization remains important to improving operational efficiency, service delivery, and risk mitigation.

Financial sustainability

IAAC operates in an environment of growing operational pressures and ongoing government-wide efforts to identify cost efficiencies, including through the Comprehensive Expenditure Review. While prudent financial management and careful expenditure planning have supported stability, these factors also reduce financial flexibility and can make it more difficult to respond quickly to emerging priorities or unexpected demands. IAAC continues to advance the modernization of its integrated business planning processes to better align resources with strategic priorities. IAAC is also working to optimize its organizational structure and operations to support effective delivery under constrained funding levels. These efforts are intended to strengthen adaptability and mitigate potential impacts of cost management measures on program outcomes or service delivery.

Approved by Senior Officials

Approved by:

Statement of Authorities (unaudited)

 

Budgetary Expenditures by Standard Object (unaudited)