Quarterly Financial Report for the Quarter Ended December 31, 2023

1.1 Basis of presentation

This report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Treasury Board of Canada Secretariat’s (TBS’s) spending authorities granted by Parliament and those used by TBS, consistent with the Main Estimates, the Supplementary Estimates (A) and the Supplementary Estimates (B) for the fiscal year ending March 31, 2024. This 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.

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

1.2 Raison d’être

TBS is the central agency that acts as the administrative arm of the Treasury Board, a committee of Cabinet. TBS supports the Treasury Board in the following principal roles:

1.3 TBS’s financial structure

TBS manages both departmental and Treasury Board central votes. Its departmental operating expenditures and revenues are managed under Vote 1, Program Expenditures.

This quarterly report highlights the financial results of:

• Vote 1, Program Expenditures, related to the delivery of TBS’s mandate
• Vote 20, Public Service Insurance, provides the employer’s share of group benefit plan coverage costs as part of the Treasury Board’s role as the employer of the core public administration. These plans include the Public Service Health Care Plan, Public Service Dental Care Plan, Pensioners’ Dental Services Plan, Disability Insurance Plan, provincial payroll taxes (British Columbia, Manitoba, Newfoundland and Labrador, Ontario and Quebec), and the Public Service Management Insurance Plan.
• Statutory authorities that cover any residual amounts between the government’s contributions to the various plans and the distribution of these costs to departments

TBS manages 6 different central votes:

• Vote 5, Government Contingencies, supplements other appropriations to provide federal departments and agencies with temporary advances for urgent or unforeseen departmental expenditures between parliamentary supply periods.
• Vote 10, Government-Wide Initiatives, supplements other appropriations to support the implementation of strategic management initiatives across the federal public service.
• Vote 15, Compensation Adjustments, supplements other appropriations to provide funding for adjustments made to terms and conditions of service or employment of the federal public administration as a result of collective bargaining.
• Vote 25, Operating Budget Carry Forward, supplements other appropriations for the carry forward of unused operating funds from the previous fiscal year, up to 5% of the gross operating budget in an organization’s Main Estimates.
• Vote 30, Paylist Requirements, supplements other appropriations to meet legal requirements for the government as employer for items such as parental benefits and severance payments.
• Vote 35, Capital Budget Carry Forward, supplements other appropriations for the carry forward of unused capital funds from the previous fiscal year, up to 20% of an organization’s capital vote.

The funding in these votes is approved by Parliament. Except for Vote 20, funding in central votes is transferred from TBS to individual departments and agencies once specified criteria are met. Like any other department, TBS also receives its own share of appropriations transferred from these votes to its own Vote 1. Unused central vote funding is lapsed.

Expenditures incurred against statutory authorities mainly reflect the government’s obligation to pay the employer’s share of the Public Service Pension Plan, the Canada Pension Plan and the Québec Pension Plan, Employment Insurance premiums and public service death benefits. TBS recovers from other government departments and agencies their share of the employer contributions under the Public Service Superannuation Act, and is subsequently charged by Public Services and Procurement Canada for actual expenditures in the same statutory vote. Adjustments are made at year-end to individual departments’ statutory votes (including those of TBS) for the difference between periodic recoveries and actual expenditures. At year-end, the net effect on TBS’s financial statements will be zero.

Transfer amounts from all central votes mentioned above will be included in the financial reports of the individual recipient departments.

2.1 Statement of voted and statutory authorities

Total budgetary authorities available for use increased by $52.4 million (1.3%) from the previous fiscal year:

• Vote 1 authorities increased by $12.5 million
• Vote 20 authorities increased by $39.1 million
• Statutory authorities increased by $0.7 million

The following table provides a detailed explanation of these changes.

2.2 Statement of departmental budgetary expenditures by standard object

The year-to-date budgetary expenditures, as at December 31, 2023, have increased by $210.3 million (7.1%) when compared to the same period in the previous year:

• Vote 1 expenditures increased by $34.7 million
• Vote 20 expenditures decreased by $81.8 million
• Statutory payments increased by $257.4 million

For the fiscal quarter ended December 31, 2023, budgetary expenditures have decreased by

$208.3 million (14.9%) when compared to the same period in the previous year:

• Vote 1 expenditures increased by $11.8 million
• Vote 20 expenditures decreased by $395.1 million
• Statutory payments increased by $175.0 million

The following table provides a detailed explanation of these changes by vote and by standard object.

Human Resources

There is risk that TBS may have insufficient resources to staff to an organizationally sustainable capacity level to effectively fulfill its mandate, which can propagate into human resource and employee wellbeing issues. TBS is taking actions to attract, develop and retain a skilled and diverse workforce and is committed to employee wellbeing through the prioritization of resources to improve work-life balance, and the promotion of the Wellness Program.

Organizational transformation and change management

There is financial risk linked to TBS’s ability to implement change initiatives because success is dependent on the co-operation, support, and funding levels of other government departments. To mitigate the risk and deliver on its priorities, TBS will build community engagement, leverage existing best practices and target the hiring of qualified employees with the necessary change management skills.

Information technology

There is Information technology (IT) system risk related to the maintenance, upgrade, replacement, and protection against cyber threats that could lead to increased demand on financial resources. TBS is committed to the prioritization of generational investments to update IT systems and has robust tools in place to monitor, detect and neutralize potential cyber threats as quickly as possible.

Financial management

There is financial management risk that the department may not be funded appropriately to deliver on its expected results due to the high volume of priorities and the current financial context of spending reductions. In addition to the Refocusing Government Spending Exercise that was announced as part of Budget 2023, further reductions were announced as part of the 2023 Fall Economic Statement. The financial situation will be regularly monitored to determine how resources will need to be prioritized and needs for incremental funding for new high priority initiatives assessed.

4.1 Operations and programs

In Budget 2023, the government committed to reduce spending by $14.1 billion over the next 5 years, starting in 2023–24, and by $4.1 billion annually after that. In 2023-24, TBS took a targeted approach to reduce its authorities by $3.0 million in travel and professional services in fiscal year 2023-24. These funds have been frozen in 2023-24 reference levels.

4.2 Personnel

On November 3, 2023, the Comptroller General of Canada announced the retirement of Mike Milito, Assistant Comptroller General, and the appointment of Sheri Ostridge in this role, effective December 4, 2023.

On November 17, 2023, the Chief Information Officer announced the departure of Paul Wagner, Deputy Chief Information Officer of Canada, to Employment and Social Development Canada as the Chief Executive Officer of Canadian Digital Service, effective November 13, 2023.

On November 29, 2023, the Prime Minister announced the nomination of Marie-Chantal Girard as the next President of the Public Service Commission of Canada. Marie-Chantal was previously the Senior Assistant Deputy Minister of Employee Relations and Total Compensation Sector at TBS. Carole Bidal assumed the role on an acting basis.

On December 11, 2023, the Deputy Ministers of TBS announced the appointment of Carol McLean as Head of Legal Services, effective December 18, 2023.

On December 20, 2023, the departure of Catherine Luelo, Chief Information Officer of Canada was announced, effective December 31, 2023. Stephen Burt assumed the role of acting Chief Information Officer of Canada, effective December 29, 2023.