Quarter ended September 30, 2022

Polar Knowledge Canada

Quarterly Financial Report

For the Quarter Ended September 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 2022-23 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 2022-23 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 and Supplementary Estimates available for use during the 2022-23 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 second quarter of the current and previous fiscal years for POLAR's combined operating and statutory authorities.

Budgetary Authorities and Budgetary Expenditures

Graph 1: Comparison of budgetary authorities and expenditures for the second quarter ended September 30, 2022, and September 30, 2021.

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Significant Changes to Authorities

As reflected in the Statement of Authorities (Annex 1), for the period ending September 30, 2022, the total budgetary authorities available for use increased by $0.16 million (0.5%) for the current fiscal year compared to the prior year. This change is due to an increase of $0.02 million in statutory authorities (Employee Benefit Plan (EBP)) as well as a slight increase of $0.14 million in Program expenditures.

Significant Changes to Year-to-Date Expenditures

As reflected in the Departmental budgetary expenditures by Standard Object (Annex 2), at the end of the second quarter of 2022-23, total expenditures were $12.22 million, compared to $12.59 million reported for the same period in 2021-22, representing a slight decrease of $0.37 million (-2.9%).

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.

Significant Changes in Relation to Operations, Personnel and Programs

POLAR continues to remain vigilant while embracing the lifting of restrictions related to COVID-19. 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.

Approval by Senior Officials

Approved by,

The original version was signed by

Annex 1

Statement of Authorities (unaudited)

(In thousands of dollars) Fiscal year 2022-23 Fiscal year 2021-22
Total available for use for the year ending March 31, 2023 Used during the quarter ended September 30, 2022 Year to date used at quarter end Total available for use for the year ending March 31, 2022 Used during the quarter ended September 30, 2021 Year to date used at quarter end
Vote 1 - Net operating expenditures 30,985 6,716 11,347 30,844 7,840 11,724
Budgetary statutory authorities 2,479 436 874 2,456 431 862
Total Budgetary authorities 33,464 7,152 12,221 33,300 8,271 12,586

Annex 2

Departmental budgetary expenditures by Standard Object (unaudited)

(In thousands of dollars) Fiscal year 2022-23 Fiscal year 2021-22
Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended September 30, 2022 Year to date used at quarter end Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended September 30, 2021 Year to date used at quarter end
Expenditures
Personnel 13,396 2,640 5,066 11,560 2,540 4,763
Transportation and communications 2,397 588 994 2,215 383 675
Information 114 10 10 344 16 38
Professional and special services 3,766 222 460 3,159 625 761
Rentals 1,717 210 436 1,309 394 620
Repair and maintenance 2,169 713 1,113 3,965 999 1,447
Utilities, materials and supplies 1,255 336 583 1,753 352 512
Acquisition of machinery and equipment 799 87 174 1,144 151 238
Transfer payments 7,796 2,339 3,379 7,796 2,812 3,533
Other subsidies and payments 55 7 6 55 (1) (1)
Total Budgetary expenditures 33,464 7,152 12,221 33,300 8,271 12,586

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