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Public Services and Procurement Canada
Quarterly Financial Report for the quarter ended December 31, 2024

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1. Introduction

This Quarterly Financial Report (QFR) should be read in conjunction with the Main Estimates and Supplementary Estimates. It has been prepared by management as required under section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Directive on Accounting Standards, GC 4400 departmental Quarterly Financial Report. It has not been subject to an external audit or review.

1.1 Raison d'être

Public Works and Government Services Canada (PWGSC) was established effective June 20, 1996, under the Department of Public Works and Government Services Act. As of November 4, 2015, PWGSC started operating as Public Services and Procurement Canada (PSPC). PSPC plays an important role in the daily operations of the Government of Canada. It supports federal departments and agencies in the achievement of their mandated objectives as their central purchasing agent, real property manager, linguistic authority, treasurer, accountant, pay and pension administrator, and common service provider. PSPC’s mission is to deliver high-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions. Its vision is to excel in government operations.

Further details on the Department's authority, mandate and core responsibilities can be found in the Main Estimates and the Departmental Plan for the fiscal year ending March 31, 2025.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting and a special-purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. The accompanying Table 3: Statement of authorities (unaudited) includes the Department's spending authorities granted by Parliament, and those used by the Department and are consistent with the Main Estimates and Supplementary Estimates for the current fiscal year.

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.

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 Department 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.

1.3 Public Services and Procurement Canada's financial structure

PSPC provides services to many government departments, agencies and Crown corporations through a variety of funding mechanisms. This includes budgetary authorities that are comprised of voted and statutory authorities, as well as non-budgetary authorities. The voted budgetary authorities include operating expenditures, vote-netted revenues and capital expenditures, while the statutory authorities are mainly composed of revolving funds, employee benefit plans and payments in lieu of taxes (PILT). The non-budgetary authorities consist primarily of the Seized property working capital account (the description can be found in paragraph 1.3.4).

PSPC's complex financial structure may result in significant fluctuations in authorities on a quarterly basis, which are due to timing differences that are resolved by year-end. These are summarized in the next 4 paragraphs:

1.3.1 Cost-recovery basis

For the most part, PSPC delivers its services on a cost-recovery basis, generating revenues via revolving fund (the funds) organizations and programs within the operating vote. These organizations and programs are mainly designed to provide services to other government organizations and are expected to recover the cost of their operations through revenues. However, the costs incurred by the funds are usually disbursed prior to invoicing the client, which generally occurs upon completion of a project or after services are rendered, and thus revenues may be collected in a subsequent quarter.

1.3.2 Project management

PSPC manages a variety of real property projects that progress through phases from planning to funding and from procurement to construction. Historical trends have shown that expenditures against these projects are not incurred evenly throughout the year; thus, quarter-to-quarter fluctuations are normal. Such projects include:

1.3.3 Payments in lieu of taxes

PILT issued by PSPC are funded through a statutory vote and paid on behalf of other participating federal departments. Payments are subsequently recovered from the participating departments and are recorded as statutory grants in the Public Accounts of Canada. Timing fluctuations can occur between the payments and the recoveries from the other departments.

1.3.4 Seized property account

PSPC also manages seized property for the Government of Canada pursuant to the Seized Property Management Act. The financial management of this activity is undertaken through the non-budgetary Seized property working capital account. Charged to this account are expenditures and advances made to maintain and manage any seized or restrained property. PSPC recovers its costs from this account once the property owner loses the right to the property and it is disposed of.

2. Highlights of fiscal quarter and fiscal year-to-date results

2.1 Significant changes to authorities

As presented in Table 3: Statement of authorities (unaudited), year-to-date PSPC authorities available for use increased by $481 million as compared to the same quarter of the previous year ($5,679 million in the current fiscal year compared to $5,198 million in the previous fiscal year). The items responsible for the overall increase are outlined in the table below, followed by a description for each variance:

Table 1: Year-over-year variances in authorities available for use (in millions of dollars)
Initiatives Operating Capital Budgetary statutory authorities Total variance
Planning and Investment in PSPC’s Assets Portfolio (19.2) 434.8 (0.2) 415.4
Next Generation Human Resources and Pay Initiative 102.3 0 6.0 108.3
Preliminary activities to support capital projects 64.0 0 3.1 67.1
Card acceptance and Postage 31.9 0 0 31.9
Refocusing Government Spending (39.9) (104.8) (3.5) (148.2)
Other 24.7 0 (18.2) 6.5
Cumulative variance in authorities available for use 163.8 330.0 (12.8) 481.0

Groupings can change between quarters due to materiality of initiatives.

Amounts may not balance with other public documents due to rounding.

Planning and Investment in PSPC’s Assets Portfolio—increase of $415.4 million

The increase is mainly from Budget 2019 approved capital funding, and to align PSPC’s authorities in 2024 to 2025 with its planned expenditures per the Investment Plan (a detailed 5-year plan for investments derived from the PSPC’s Asset Long-Term Strategy and Plans) to enable the implementation of critical infrastructure projects.

Next Generation Human Resources and Pay Initiative—increase of $108.3 million

Funding is for the Human Capital Management (HCM) Feasibility Analysis Project which will inform a final implementation and investment decision regarding the Dayforce HCM solution.

Preliminary activities to support capital projects—increase of $67.1 million

Funding is to deliver non-capitalizable and pre-planning activities under PSPC’s Investment Plan. Pre-planning activities are critical to ensure the efficient use of resources and the attainment of project timelines. Examples of pre-planning activities include feasibility studies, options analysis, investigations (for example, soil conditions), consulting support, pre-tender contracting work, statement of requirements and pre-design activities.

Card acceptance and Postage—increase of $31.9 million

Federal departments and agencies that accept payments via debit or credit cards for delivering goods and services incur transaction fees. Postage fees are incurred for mailing cheques. Both fees are paid centrally by the Receiver General (RG). The increase in funding was mainly due to estimated revenues to be collected by departments and agencies using payment cards and a projected increase in the fees charged by the card brands.

Refocusing Government Spending—decrease of $148.2 million

As announced in Budget 2023, the federal government proposed a reduction in organizations’ spending. PSPC is planning to reduce its spending by $148.2 million in fiscal year 2024 to 2025, by $154.1 million in 2025 to 2026 and by $162.2 million in 2026 to 2027 and ongoing. PSPC will achieve these reductions by reducing targeted operating expenditures.

Other—increase of $6.5 million

The increase is the result of funding variances in various projects and activities such as:

2.2 Significant changes to year-to-date net expenditures

As presented in Table 4: Departmental budgetary expenditures by standard object (unaudited), year-to-date total net budgetary expenditures have increased by $375 million as compared to the same quarter of the previous year ($4,204 million in the current fiscal year compared to $3,829 million in the previous fiscal year).

Table 2: Year-over-year variances in net budgetary expenditures (presented by standard object) (in millions of dollars)
Standard object December 31, 2024 Year-to-date used at quarter end December 31, 2023 Year-to-date used at quarter end Year-over-year variance
Personnel 1,644.3 1,527.0 117.3
Transportation and communications 63.8 49.8 14.0
Information 12.5 9.9 2.6
Professional and special services 1,884.3 1,555.5 328.8
Rentals 981.9 978.2 3.7
Repair and maintenance 817.9 1,128.9 (311.0)
Utilities, materials and supplies 55.1 60.5 (5.4)
Acquisition of land, buildings and works 721.4 533.2 188.2
Acquisition of machinery and equipment 65.4 54.2 11.2
Transfer payments 141.2 162.8 (21.6)
Public debt charges 71.3 78.2 (6.9)
Other subsidies and payments 266.8 265.6 1.2
Revenues netted against expenditures (2,521.6) (2,574.8) 53.2
Total net budgetary expenditures 4,204.3 3,829.0 375.3

Comparative figures have been reclassified to conform to the current year's presentation.

Amounts may not balance with other public documents due to rounding.

The year-over-year net increase of $375.3 million is mainly attributable to:

3. Risks and uncertainties

PSPC integrates risk management principles into business planning, decision-making and organizational processes to minimize negative impacts and maximize opportunities across our diverse range of services and operations. Risk management at PSPC is carried out in accordance with the TBS's Framework for the Management of Risk, Risk and Compliance Process, and PSPC's Integrated Risk Management Framework.

The key risks identified as having a potential financial impact on PSPC's operations are:

3.1 Funding mechanism and coordination

PSPC may be unable to achieve its departmental investment objectives and targets, due to the variety of funding mechanisms employed by the department and the need to have better tools to effectively implement the OnePSPC concept, which may impede on-going relationships with clients and the efficiency and effectiveness of the department’s programs and services. To mitigate this risk, PSPC is taking the following measures, among others:

3.2 Supply and delivery risk

The effective and efficient delivery of major PSPC initiatives may be impeded due to the nature of large-scale and complex work (project scale, complexities, partner dependencies, evolving security requirements) along with current global events (inflation, supply delays and industry capacity limitations) which may affect the department’s credibility with stakeholders. To mitigate this risk, PSPC is taking the following measures, among others:

3.3 Compromised assets

The integrity, safety and accessibility of PSPC real property and infrastructure assets could be compromised by climate change, natural disasters, infrastructure deterioration and original design insufficiencies, as well as human related actions, which may impede the continuity of government operations and the well-being of Canadians. To mitigate this risk, PSPC is taking the following measures, among others:

3.4 Effective delivery

PSPC may encounter delays to achieving full stabilization of pay administration for the Government of Canada because of the sustained increase in intake of HR transactions while facing capacity constraints. Persistent intake growth could further impede efforts to increase stakeholder trust and lessen liabilities to the Government of Canada. To mitigate this risk, PSPC is taking the following measures, among others:

4. Significant changes to operations, personnel and programs

This section highlights significant changes in operations, personnel, and programs during the third quarter of the current fiscal year:

5. Approval by senior officials

Approved by:

Arianne Reza
Deputy Minister
Gatineau, Canada
February 25, 2025

Michael Hammond, CPA
Assistant Deputy Minister and
Chief Financial Officer
Gatineau, Canada
February 19, 2025

6. Appendix

Table 3: Statement of authorities (unaudited)—For the quarter ended December 31, 2024 (in thousands of dollars)
Breakdown by authorities Fiscal year ending March 31, 2025 Fiscal year ending March 31, 2024
Total available for use for the year ending March 31, 2025 table 3 note 1, table 3 note 2 Used during the quarter ended December 31, 2024 Year-to-date used at quarter end Total available for use for the year ending March 31, 2024 table 3 note 1, table 3 note 2 Used during the quarter ended December 31, 2023 Year-to-date used at quarter end
Vote 1
Gross operating expenditures 4,819,511 1,182,173 3,352,942 4,649,797 1,171,607 3,210,793
Vote-netted revenues (1,405,199) (231,840) (818,236) (1,399,243) (418,479) (1,061,404)
Net operating expenditures 3,414,312 950,333 2,534,706 3,250,554 753,128 2,149,389
Vote 5—Capital expenditures 2,055,000 520,953 1,226,864 1,725,029 659,612 1,234,460
Real Property Services Revolving Fund
Gross expenditures 2,451,434 709,015 1,740,541 2,308,780 734,064 1,554,865
Revenues (2,430,634) (680,139) (1,564,594) (2,305,280) (687,989) (1,374,689)
Net expenditures 20,800 28,876 175,947 3,500 46,075 180,176
Translation Bureau Revolving Fund
Gross expenditures 183,945 45,722 122,028 182,525 62,238 138,281
Revenues (178,870) (50,936) (118,814) (174,456) (50,378) (121,055)
Net expenditures 5,075 (5,214) 3,214 8,069 11,860 17,226
Optional Services Revolving Fund
Gross expenditures 15,104 18,568 12,039 15,630 (4,707) 4,778
Revenues (15,208) (11,401) (19,961) (15,815) (3,665) (17,679)
Net expenditures (104) 7,167 (7,922) (185) (8,372) (12,901)
Total of all revolving funds
Gross expenditures 2,650,483 773,305 1,874,608 2,506,935 791,595 1,697,924
Revenues (2,624,712) (742,476) (1,703,369) (2,495,551) (742,032) (1,513,423)
Total revolving fund net expenditures 25,771 30,829 171,239 11,384 49,563 184,501
Other budgetary statutory authorities
Contributions to employee benefit plans 182,732 43,396 130,186 210,156 32,601 97,803
Minister of Public Services and Procurement—Salary and motor car allowance 99 24 74 95 24 72
Refunds of amounts credited to revenues in previous years 0 0 0 0 0 0
Spending of proceeds from the disposal of surplus Crown assets 1,099 1 6 846 1 48
Collection agency fees 2 2 2 0 0 0
Payment in lieu of taxes to municipalities and other taxing authoritiestable 3 note 2 0 (13,568) 141,223 0 (25,359) 162,793
Total other budgetary statutory authorities 183,932 29,855 271,491 211,097 7,267 260,716
Total budgetary authorities 5,679,015 1,531,970 4,204,300 5,198,064 1,469,570 3,829,066
Non-budgetary authorities 0 0 0 0 0 0
Total authorities 5,679,015table 3 note 3 1,531,970 4,204,300 5,198,064table 3 note 3 1,469,570 3,829,066

Table 3 Notes

Table 3 Note 1

Includes only authorities available for use and approved by Parliament at quarter-end. Amounts may not balance with other public documents due to rounding.

Return to table 3 note 1 referrer

Table 3 Note 2

Consistent with the presentation in the Main Estimates, "Total available for use for the year", for both fiscal years ending March 31, 2025 and March 31, 2024, under "PILT", is presented net of planned PILT made to municipalities and the equivalent planned recoveries from other government departments. A description of PILT is provided in section 1.3 Public Services and Procurement Canada's financial structure of this report.

Return to table 3 note 2 referrer

Table 3 Note 3

The total available for use for the year ending March 31, 2025 experienced a net increase of $481 million as compared to the previous fiscal year.

Return to table 3 note 3 referrer
Table 4: Departmental budgetary expenditures by standard object (unaudited)—For the quarter ended December 31, 2024 (in thousands of dollars)
Breakdown by standard object Fiscal year ending March 31, 2025 Fiscal year ending March 31, 2024
Planned expenditures for the year ending March 31, 2025table 4 note 1, table 4 note 2 Expended during the quarter ended December 31, 2024 Year-to-date used at quarter end Planned expenditures for the year ending March 31, 2024table 4 note 1, table 4 note 2 Expended during the quarter ended December 31, 2023 Year-to-date used at quarter end
Expenditures
Personnel 2,127,827 597,826 1,644,335 2,078,914 600,157 1,527,004
Transportation and communications 72,403 26,161 63,760 66,045 19,671 49,862
Information 34,932 4,354 12,542 16,731 4,315 9,855
Professional and special services 2,501,508 783,701 1,884,292 2,574,991 675,204 1,555,535
Rentals 1,344,325 335,786 981,924 1,357,274 326,438 978,221
Repair and maintenance 1,530,312 312,654 817,893 1,193,380 621,031 1,128,887
Utilities, materials and supplies 175,835 32,417 55,057 157,840 15,976 60,511
Acquisition of land, buildings and works 1,190,793 314,967 721,362 963,212 254,792 533,184
Acquisition of machinery and equipment 171,650 26,217 65,377 153,124 29,084 54,216
Transfer paymentstable 4 note 2 0 (13,568) 141,223 0 (25,358) 162,794
Public debt charges 119,632 23,296 71,300 124,808 25,693 78,260
Other subsidies and payments 439,709 62,475 266,840 406,539 83,078 265,564
Total gross budgetary expenditures 9,708,926 2,506,286 6,725,905 9,092,858 2,630,081 6,403,893
Less revenues netted against expenditures
Revolving funds revenues (2,624,712) (742,476) (1,703,369) (2,495,551) (742,032) (1,513,423)
Vote-netted revenues (1,405,199) (231,840) (818,236) (1,399,243) (418,479) (1,061,404)
Total revenues netted against expenditures (4,029,911) (974,316) (2,521,605) (3,894,794) (1,160,511) (2,574,827)
Total net budgetary expenditures 5,679,015 1,531,970 4,204,300table 4 note 3 5,198,064 1,469,570 3,829,066table 4 note 3

Table 4 Notes

Table 4 Note 1

Includes only authorities available for use and approved by Parliament at quarter-end. Amounts may not balance with other public documents due to rounding.

Return to table 4 note 1 referrer

Table 4 Note 2

Consistent with the presentation in the Main Estimates, "Planned expenditures for the year" for both fiscal years ending March 31, 2025 and March 31, 2024, under "Transfer payments", are presented net of planned PILT made to municipalities and the equivalent planned recoveries from other government departments. A description of PILT is provided in section 1.3 Public Services and Procurement Canada's financial structure of this report.

Return to table 4 note 2 referrer

Table 4 Note 3

The year-to-date used at quarter ended December 31, 2024 experienced a net increase of $375 million as compared to the same quarter of the previous fiscal year.

Return to table 4 note 3 referrer

© His Majesty the King in Right of Canada, as represented by the Minister of Public Services and Procurement Canada, 2025

ISSN 2819-2117

Page details

2025-06-27