Canada Revenue Agency Quarterly Financial Report For the quarter ended December 31, 2024

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

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 report should be read in conjunction with the Main Estimates.

Further details on the program activities of the Canada Revenue Agency (CRA) can be found in the 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 the CRA's spending authorities granted by Parliament and those used by the CRA consistent with the Main Estimates for the 2024-2025 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 moneys can be spent by the government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation of statutory spending authority for specific purposes.

The CRA uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

Highlights of the fiscal year-to-date (YTD) results

Figure 1 below reflects the CRA's annual net authorities available for use, as well as the CRA’s YTD expenditures as at December 31, 2024.

The CRA’s annual net authorities and YTD expenditures have increased primarily due to the new Distribution of Fuel Charges to Small Businesses initiative and the Canada Carbon Rebate (CCR). Further analysis of authorities and expenditures is presented below.

Image described below

Title - Figure 1: Annual net authorities and YTD expenditures as at December 31, 2024.

Description: The Agency’s annual authorities available for use as of December 31 and cumulative expenditures for 2023-2024 and 2024‑2025

Figure 1 – details

Figure 1: Annual net authorities and Quarter 3 (Q3) YTD expenditures as at December 31, 2024
Authority/Expenditure	Year	Total Excluding Statutory Authorities	Statutory Authorities	Total
Authorities	2023-2024	$ 5 730 637	$ 10 947 757	$ 16 678 394
Authorities	2024-2025	$ 5 524 135	$ 15 846 227	$ 21 370 362
Expenditures	2023-2024	$ 3 885 388	$ 7 942 204	$ 11 827 592
Expenditures	2024-2025	$ 3 976 031	$ 12 360 096	$ 16 336 127

Note 1: Amounts in Figure 1 may not correspond exactly to amounts listed in the report due to rounding.

Note 2: Statutory authorities include the CCR, Distribution of Fuel Charges – Provinces and Territories, Distribution of Fuel Charges – Farming Businesses, Distribution of Fuel Charges – Small Businesses, Contributions to employee benefit programs, Children’s Special Allowance payments, spending of revenues received, and the Minister’s salary and motor car allowance.

YOY analysis of authorities

This report reflects the results for the current fiscal year in relation to the Main Estimates, authorities available for use from the prior fiscal year and Supplementary Estimates (B). As shown in the summarized table below, the CRA’s total Budgetary Authorities have increased by $4,692M ($4.7B) since the third quarter of 2023-2024, from $16,678M ($16.7B) in 2023-2024, to $21,370M ($21.4B) in 2024-2025.

YOY increase in annual authorithies ($3.2B)

Summarized Statement of Authorities (unaudited) - YOY analysis of authorities
(in millions of dollars)	Total available for use for the year ending March 31, 2025	Total available for use for the year ending March 31, 2024	Variance in budgetary authorities
Budgetary Statutory Authorities	$15,846M	$10,947M	$4,899M
The increase in Budgetary Statutory Authorities is primarily due to the following: Funding for the new distribution of fuel charge proceeds to small businesses initiative, $2,569M An adjustment in the Department of Finance’s estimate of the CCR, and the inclusion of New Brunswick in the federal pollution pricing framework, $2,241M
Gross Vote 1 – Operating Authorities	$5,866M	$6,042M	($176M)
The decrease in Gross Vote 1 Operating Authorities is primarily related to the following: Decrease in authorities available for use from the prior fiscal year ($362M) Decrease in authorities due to the Responsible Government Spending (RGS) reductions announced in Budget 2023 ($58M) Increase in authorities for new measures announced in the Fall Economic Statement and Budget 2024, received through Supplementary Estimates (B), $247M
Vote 5 – Capital Authorities	$143M	$158M	($15M)
The decrease in Vote 5 Capital Authorities is primarily related to the following: Decrease in capital authorities due to a decrease in the vote realignment from the operating vote ($20M) Decrease in authorities related to a previous federal budget measure; Goods and Services Tax/Harmonized Sales Tax (GST/HST) Agile Risk Assessment ($11M) Increase in authorities available for use from the prior year, $16M
Revenue Credited to the Vote (RCV)	($485M)	($469M)	($16M)
The increase in RCV is primarily related to the increased pay rates in the new collective agreements
Total Budgetary Authorities	$21,370M ($21.4B)	$16,678M ($16.7B)	$4,692M ($4.7B)

YOY analysis of expenditures

Expenditures by vote

The YTD third quarter expenditures as at December 31, 2024 have increased by $4,509M ($4.5B) from $11,827M ($11.8B) in 2023-2024, to $16,336M ($16.3B) in 2024-2025, as displayed in the Statement of Authorities. The material components of this YOY change are explained below.

YOY increases in YTD expenditures ($2.6B)

Summarized Statement of Authorities (unaudited) - Expenditures by vote
(in millions of dollars)	YTD expenditures at December 31, 2024	YTD expenditures at December 31, 2023	Variance in YTD expenditures
Budgetary Statutory Authorities	$12,360M	$7,942M	$4,418M
The increase in Budgetary Statutory Authorities is primarily due to the following: Payments made related to the new distribution of fuel charge proceeds to small businesses initiative, $2,391M An increase in the fuel charge proceeds returned through the CCR, due to an increase in the price on carbon pollution and the inclusion of New Brunswick in the federal pollution pricing framework, $2,046M
Net Vote 1 – Operating Expenditures	$3,918M	$3,813M	$105M
The increase in Net Vote 1 Operating Expenditures is primarily related to the following: Salary The increase in salary expenditures is primarily related to: Higher employee pay rates related to the most current collective agreements for all bargaining groups, and the reduction in prior year salaries due to the Public Service Alliance of Canada (PSAC) strike, $182M These effects were partially offset by PSAC retroactive payments made in the prior fiscal year ($131M) Operating and maintenance Increase in the transfer to Revenu Québec for the administration of the GST, $57M Increase related to a full-year software subscription, $13M Decrease in information technology (IT) consultants due to an active effort by the CRA to meet RGS commitments ($17M)
Vote 5 – Capital Expenditures	$58M	$72M	($14M)
The decrease in Vote 5 Capital Expenditures is primarily related to major project investments
Total Budgetary Authorities	$16,336M ($16.3B)	$11,827M ($11.8B)	$4,509M ($4.5B)

Expenditures by standard object

The material variances will be explained in the table below. The transfer payments standard object makes up the majority of the YOY variance in YTD expenditures with the other standard objects making up only a small portion.

Summarized Departmental Budgetary Expenditures by Standard Object (unaudited)
(in millions of dollars)	YTD expenditures at December 31, 2024	YTD expenditures at December 31, 2023	Variance in YTD expenditures
Transfer Payments¹	$11,732M	$7,236M	$4,496M
The increase in Transfer Payments is primarily related to the following: Payments made related to the new distribution of fuel charge proceeds to small businesses initiative, $2,391M An increase in the fuel charge proceeds returned through the CCR, due to an increase in the price on carbon pollution and the inclusion of New Brunswick in the federal pollution pricing framework, $2,046M
Personnel	$4,148M	$4,114M	$34M
The variance explanation noted in the Net Vote 1 salary section is also applicable to the Personnel standard object, in addition to variances in other items, including the Employee Benefit Plan.
Other Standard Objects	$825M	$807M	$18M
$25M increase is related to the professional services standard object: Increase in the transfer to Revenu Québec for the administration of the GST, $57M Decrease in IT consultants due to an active effort by the CRA to meet RGS commitments ($17M) Decrease in IT services from Shared Services Canada due to the timing of billing, which is out of the CRA’s control ($15M) $6M increase in the rentals standard object is primarily related to: Increase due to a full-year software subscription, $13M Decrease due to a lower billing agreement with Public Services and Procurement Canada for the CRA’s annual rent ($7M) $14M decrease in the other subsidies and payments standard object is primarily related to: a court award paid in Period 6 of the previous fiscal year
Revenue Credited to the Vote	($369M)	($330M)	($39M)
Total Budgetary Authorities	$16,336M ($16.3B)	$11,827M ($11.8B)	$4,509M ($4.5B)

Note 1. The transfer payments standard object includes the Children’s Special Allowance payments, CCR payments, Distribution of Fuel Charges – Provinces and Territories, Distribution of Fuel Charges – Farming Businesses, Distribution of Fuel Charges – Small Businesses, Energy Cost Benefit payments and payments to non-profit organizations

Risks and uncertainties

The CRA strives to be a world-class tax and benefits administration that is trusted, fair, and helpful by putting people first. As such, the CRA continually monitors its internal and external environments for events that could affect whether it achieves its strategic priorities and objectives. The Board of Management monitors, and senior management receives, quarterly updates on the CRA’s Corporate Risk Profile, which involves regular monitoring of the entire risk portfolio. The CRA’s key risks and mitigation strategies are outlined in the 2024-2025 Departmental Plan.

The CRA recognizes that all of the key risks identified in the Departmental Plan could have financial impacts should they materialize. The key risks and associated mitigation strategies outlined in the Departmental Plan relate to the CRA’s 2024-2025 strategic priorities, which include the following:

Deliver seamless client experiences and tailored interactions that are digital first
Combat aggressive tax planning and tax evasion
Strengthen security and safeguard privacy
Nurture a high-performing, diverse, and inclusive workforce in a modern, flexible, and accessible workplace

Significant changes in relation to operations, personnel, and programs

As part of Budget 2024, funding was announced related to certain priorities, which the CRA expected to receive later in the fiscal year. However, given the announcement made by the government on January 6, 2025 to prorogue Parliament until March 24, 2025, the funding for these initiatives may not be approved by year-end, which would constrain the CRA’s financial position. Mitigation measures are being implemented to reduce this financial risk.

The CRA’s 2024-2025 contribution to RGS, $58M, includes reductions for travel, professional services, and operating expenditures. In the upcoming years, the CRA is further advancing the assessment and plans for the second phase of RGS, announced in Budget 2024.

Approval by Senior Officials

Approved by:

[original signed by]

________________________

Bob Hamilton, Commissioner

[original signed by]

_____________________________

Hugo Pagé, Chief Financial Officer

Ottawa, Canada

Date:

Statement of Authorities (unaudited) – Fiscal year 2024-2025
(in thousands of dollars)
Category	Total available for use for the year ending March 31, 2025^{table 4 note 1}	Used during the quarter ended December 31, 2024	Year-to-date used at quarter-end
Vote 1 - Operating expenditures
Gross Operating expenditures	5,866,412	1,380,531	4,287,382
Revenues netted against expenditures	(485,700)	(122,990)	(368,972)
Net Vote 1 - Operating expenditures	5,380,712	1,257,541	3,918,410
Vote 5 - Capital expenditures	143,423	21,326	57,621
Budgetary Statutory Authorities
Contributions to employee benefit plans	615,855	142,136	426,409
Children's Special Allowance payments (Children's Special Allowances Act)	396,000	109,741	321,965
Canada Carbon Rebate payments	11,665,000	3,034,298	8,834,251
Spending of revenues received through the conduct of its operations pursuant to section 60 of the Canada Revenue Agency Act	338,773	99,640	206,831
Distribution of Fuel Charges - Provinces and Territories	58,000	18,906	36,980
Distribution of Fuel Charges - Farming Businesses	203,500	26,094	141,837
Distribution of Fuel Charges - Small Businesses	2,569,000	2,391,149	2,391,149
Minister's salary and motor car allowance	99	22	71
Court awards - Tax Court of Canada	-	280	549
Spending proceeds from the disposal of surplus Crown Assets	-	(32)	55
Energy Cost Benefit	-	-	(1)
Refunds of previous years revenue	-	-	-
Total Budgetary Statutory Authorities	15,846,227	5,822,234	12,360,096
Total Budgetary Authorities	21,370,362	7,101,101	16,336,127

This financial table compares the Agency’s total available authorities available as of December 31, expenditures used during the quarter and year-to-date expenditures for fiscal years 2024-2025 and 2023-2024 by voted authority. This table uses parentheses to show negative numbers.

Statement of Authorities (unaudited) – Fiscal year 2023-2024
(in thousands of dollars)
Category	Total available for use for the year ended March 31, 2024^{table 5 note 1}	Used during the quarter ended December 31, 2023	Year-to-date used at quarter-end
Vote 1 - Operating expenditures
Gross Operating expenditures	6,042,076	1,446,587	4,143,696
Revenues netted against expenditures	(469,122)	(110,142)	(330,426)
Net Vote 1 - Operating expenditures	5,572,954	1,336,445	3,813,270
Vote 5 - Capital expenditures	157,683	30,014	72,118
Budgetary Statutory Authorities
Contributions to employee benefit plans	584,983	146,453	439,360
Children's Special Allowance payments (Children's Special Allowances Act)	368,000	100,606	291,417
Canada Carbon Rebate payments	9,424,000	2,525,170	6,788,019
Spending of revenues received through the conduct of its operations pursuant to section 60 of the Canada Revenue Agency Act	357,679	91,659	258,010
Distribution of Fuel and Excess Emission Charges	48,000	19,951	41,761
Return of Fuel Charge Proceeds to Farming Businesses	165,000	12,414	111,129
Minister's salary and motor car allowance	95	24	71
Court awards - Tax Court of Canada	-	502	12,282
Spending proceeds from the disposal of surplus Crown Assets	-	21	77
Energy Cost Benefit	-	-	(1)
Refunds of previous years revenue	-	-	79
Total Budgetary Statutory Authorities	10,947,757	2,896,800	7,942,204
Total Budgetary Authorities	16,678,394	4,263,259	11,827,592

This financial table compares the Agency’s total available authorities available as of December 31, expenditures used during the quarter and year-to-date expenditures for fiscal years 2023-2024 and 2022-2023 by voted authority. This table uses parentheses to show negative numbers.

Departmental Budgetary Expenditures by Standard Object (unaudited)
Fiscal year 2024-2025
(in thousands of dollars)
Category	Planned expenditures for the year ending March 31, 2025	Expended during the quarter ended December 31, 2024	Year-to-date used at quarter-end
Expenditures:
Personnel	5,207,899	1,369,864	4,148,285
Transportation and communications	246,904	19,956	79,090
Information	48,864	5,128	13,998
Professional and special services	967,294	145,512	431,838
Rentals	310,937	80,502	224,409
Purchased repair and maintenance	71,957	16,976	41,187
Utilities, materials, and supplies	44,006	6,884	12,954
Acquisition of machinery and equipment	60,299	(6,804)	16,809
Transfer payments	14,897,544	5,584,856	11,731,654
Other subsidies and payments	358	1,217	4,875
Total Gross Budgetary Expenditures	21,856,062	7,224,091	16,705,099
Less: Revenues netted against expenditures	485,700	122,990	368,972
Total Net Budgetary Expenditures	21,370,362	7,101,101	16,336,127

This financial table compares the Agency’s planned expenditures available as of December 31, expenditures used during the quarter and year-to-date expenditures for fiscal years 2024-2025 and 2023-2024 by standard object. This table uses parentheses to show negative numbers.

Departmental Budgetary Expenditures by Standard Object (unaudited)
Fiscal year 2023-2024
(in thousands of dollars)
Category	Planned expenditures for the year ended March 31, 2024	Expended during the quarter ended December 31, 2023	Year-to-date used at quarter-end
Expenditures:
Personnel	5,085,205	1,447,886	4,114,477
Transportation and communications	305,909	20,360	76,706
Information	58,489	9,402	17,485
Professional and special services	1,136,647	135,716	406,343
Rentals	340,398	67,962	218,309
Purchased repair and maintenance	81,328	12,738	38,509
Utilities, materials, and supplies	52,159	3,097	9,224
Acquisition of machinery and equipment	76,588	13,332	22,679
Transfer payments	10,010,379	2,661,434	7,235,762
Other subsidies and payments	415	1,473	18,525
Total Gross Budgetary Expenditures	17,147,516	4,373,401	12,158,018
Less: Revenues netted against expenditures	469,122	110,142	330,426
Total Net Budgetary Expenditures	16,678,394	4,263,259	11,827,592

This financial table compares the Agency’s planned expenditures available as of December 31, expenditures used during the quarter and year-to-date expenditures for fiscal years 2023-2024 and 2022-2023 by standard object. This table uses parentheses to show negative numbers.

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Date modified:: 2025-02-28

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