Quarterly Financial Report

Polar Knowledge Canada

Quarterly Financial Report

For the quarter ended June 30, 2022

Introduction

This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act, in the form and manner prescribed by the Treasury Board. This quarterly financial report should be read in conjunction with the 2022-2023 Main Estimates. This quarterly financial report has not been subject to an external audit or review.

Polar Knowledge Canada (POLAR) was created pursuant to the Canadian High Arctic Research Station Act (CHARS) which came into force on June 1, 2015. POLAR’s mandate is to:

Further information on the mandate, roles, responsibilities, and programs of POLAR can be found by accessing the 2022-2023 Departmental Plan.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying statement of authorities includes POLAR's spending authorities granted by Parliament and those used by POLAR, consistent with the Main Estimates for the 2022-2023 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 money 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.

POLAR uses the full accrual method of accounting to prepare and present its annual departmental 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 the fiscal quarter and fiscal year-to-date (YTD) results

The following graph provides a comparison of the total budgetary authorities and year to date expenditures for the first quarter of the current and previous fiscal years for POLAR’s combined operating and statutory authorities.

Budgetary Authorities and Budgetary Expenditures

This graph is described in the following paragraph

Significant Changes to Authorities

As reflected in the Statement of Authorities (Annex 1), for the period ending June 30, 2022, the total budgetary authorities available for use increased by $0.149 million (0.5%) for the current fiscal year compared to the prior year. This change is due to an increase of $0.023 million in statutory authorities (Employee Benefit Plan) as well as a slight increase of $0.126 million in Program expenditures.

Significant Changes to Year-to-Date Expenditures

When compared to the previous fiscal year, the first quarter budgetary expenditures increased by $0.8 million (18.6%). As reflected in the Departmental budgetary expenditures by Standard Object (Annex 2), the expenditures increased from $4.3 million in 2021-22 to $5.1 million in 2022-23 which is primarily due to the following:

Risks and Uncertainties

POLAR has identified key risks to the achievement of results related to its core responsibility, which are as follows:

Relationship and Reputational Risks – Much of POLAR’s operations and planned activities rely on collaboration and partnerships with other federal organizations, northern and Indigenous organizations and communities, and academia. These relationships include specific obligations outlined in treaties and self-government agreements; signed memoranda of understanding with Indigenous organizations; service agreements with other federal organizations; and others.

There is a risk that POLAR will be unable to complete planned activities due to internal capacity challenges or dependency on inputs from other organizations over which POLAR has limited control. As POLAR prepares to take over the custodianship of Canadian High Arctic Research Station infrastructure, this includes the risk of being unable to fully operationalize the research station without adequate long-term funding. Should this risk materialize, important partners, particularly Indigenous groups, and communities, may perceive POLAR as not fulfilling its commitments.

POLAR will mitigate these relationships and reputational risks by:

Pandemic-Related Risks - As the world moves past the crisis phase of the pandemic, there is becoming a more balanced and sustainable approach to the long-term management of COVID-19. However, with the reduction/removal of restrictions, there is a continued risk that increased health and safety measures could be reimplemented which could prevent POLAR from completing activities or fulfilling commitments planned for 2022-23.

POLAR will mitigate these pandemic related risks by:

Significant Changes in Relation to Operations, Personnel and Programs

On April 19, 2022, Ms. Suzanne Kerr was appointed Executive Director, Corporate Services and Chief Financial Officer.

The lifting of certain restrictions related to COVID-19 has allowed the resumption of several activities. Despite the renewed ability to travel and conduct in-person activities, and the reopening of Canadian High Arctic Research Station to researchers and visitors, the COVID-19 pandemic continues to create challenges notably as it relates to procurement and supply chain issues. POLAR will monitor the situation while adhering to public health guidelines.

Approval by Senior Officials

Approved by,

The original version was signed by

STATEMENT OF AUTHORITIES (unaudited)

(In thousands of dollars) Fiscal year 2022-2023 Fiscal year 2021-2022
Total available for use for the year ending March 31, 2023 Used during the quarter ended Year to date used at quarter end Total available for use for the year ending March 31, 2022 Used during the quarter ended Year to date used at quarter end
Vote 1 - Net operating expenditures 29,887 4,631 4,631 29,761 3,884 3,884
Budgetary statutory authorities 2,479 438 438 2,456 431 431
Total Budgetary authorities 32,366 5,069 5,069 32,217 4,315 4,315

Departmental budgetary expenditures by Standard Object (unaudited)

(In thousands of dollars) Fiscal year 2022-2023 Fiscal year 2021-2022
Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended June 30, 2022 Year to date used at quarter end Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended June 30, 2021 Year to date used at quarter end
Expenditures
Personnel 13,396 2,426 2,426 13,372 2,223 2,223
Transportation and communications 2,181 406 406 1,848 292 292
Information 104 - - 322 22 22
Professional and special services 3,428 238 238 2,495 136 136
Rentals 1,563 226 226 1,452 226 226
Repair and maintenance 1,974 400 400 2,847 448 448
Utilities, materials and supplies 1,143 247 247 1,817 160 160
Acquisition of machinery and equipment 727 87 87 213 87 87
Transfer payments 7,796 1,040 1,040 7,796 721 721
Other subsidies and payments 55 (1) (1) 55 - -
Total Budgetary expenditures 32,366 5,069 5,069 32,217 4,315 4,315

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