Quarterly Financial Report for the Quarter Ended December 31, 2022

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

On this page

  1. Introduction
  2. Highlights of fiscal year-to-date results
  3. Risks and uncertainties
  4. Significant changes in relation to operations, personnel and programs
  5. Approval by senior officials
  6. Appendix

1. Introduction

In this section

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the manner prescribed by the Treasury Board. The report should be read in conjunction with the Main Estimates, the Supplementary Estimates (A) and the Supplementary Estimates (B).

The report has been reviewed by the Departmental Audit Committee.

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, 2023. 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:

Spending oversight

Review spending proposals and authorities; review existing and proposed government programs for efficiency, effectiveness and relevance; provide information to Parliament and Canadians on government spending.

Administrative leadership

Lead government‑wide initiatives; develop policies and set the strategic direction for government administration related to service delivery, access to government information, and the management of assets, finances, information and technology.

Regulatory oversight

Develop and oversee policies to promote good regulatory practices; review proposed regulations to ensure they adhere to the requirements of government policy; and advance regulatory cooperation across jurisdictions.

Employer

Develop policies and set the strategic direction for people management in the public service; manage total compensation (including pensions and benefits) and labour relations; undertake initiatives to improve performance in support of recruitment and retention.

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, related to the employer’s share of group benefit coverage to employees of the core public service under the various plans listed below
  • 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 seven 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 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.
  • 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. With the exception of 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. Any unused balance from these central votes is returned to the fiscal framework at the end of the year and is reported as TBS’s lapse.

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. Highlights of fiscal year-to-date results

In this section

This section:

  • highlights the financial results for the quarter and fiscal year-to-date ended December 31, 2022
  • provides explanations of variances compared with the same period last year that exceed materiality thresholds of:
    • $1 million for Vote 1, Program Expenditures, and Statutory authorities
    • $10 million for Vote 20, Public Service Insurance
Highlights of the fiscal year-to-date results ($ thousands)
2022–23  Budgetary authorities to March 31, 2023 2021–22 Budgetary authorities to March 31, 2022 Variance in budgetary authorities  Year-to-date expenditures as at Q3 2022–23 (December 31, 2022) Year-to-date expenditures as at Q3 2021–22 (December 31, 2021) Variance between 2022–23 year-to-date and 2021–22 year-to-date expenditures Q3 Expenditures 2022–23 Q3 Expenditures 2021–22 Variance between 2022–23 Q3 and 2021–22 Q3 expenditures 
Vote 1: Program Expenditures 378,068 318,080 59,988 236,761 213,293 23,468 86,974 70,554 16,420
Vote 20: Public Service Insurance 3,732,363 3,048,143 684,220 2,851,317 2,144,504 706,812 1,391,003 844,496 546,507
Statutory authorities 37,256 37,404 -148 -140,143 -224,271 84,128 -81,619 25,419 -107,038
Total 4,147,687 3,403,627 744,060 2,947,935 2,133,526 814,408 1,396,358 940,469 455,889

2.1 Statement of voted and statutory authorities

Total budgetary authorities available for use increased by $744.1 million (21.9%) from the previous fiscal year:

  • Vote 1 authorities increased by $60.0 million
  • Vote 20 authorities increased by $684.2 million
  • Statutory authorities decreased by $0.1 million

The following table provides a detailed explanation of these changes.

Changes to voted and statutory authorities (2022–23 compared with 2021–22) $ thousands
Vote 1: Program Expenditures
Funding for out-of-court settlements 20,275
Compensation adjustments to fund salary increases to meet obligations under new collective agreements 13,329
Net increase in the Operating Budget Carry Forward 9,612
Transfers from various organizations to TBS for innovative approaches to reduce greenhouse gas emissions in government operations 6,508
Funding for the Office of the Chief Information Officer to support the governance and oversight of digital initiatives 5,132
Transfers from various organizations to TBS for the Digital Comptrollership Program 4,564
Funding to support Financial Management Transformation 4,296
Other miscellaneous increases that do not exceed materiality thresholds 4,316
Funding to support the implementation of proactive pay equity in the federal public service (Budget 2019) 3,949
Funding for Access to Information Review and Action Plan (Budget 2021) 3,836
Funding for claims arising from the White Class Action settlement 2,819
Funding for Advancing Core Public Administration Job Classification and Program and Administrative Services (PA) Group Modernization 2,710
Funding for the Centralized Enabling Workplace Fund to create an accessible and inclusive workplace 1,785
Funding to establish the Centre of Expertise for Real Property to improve federal asset management (Budget 2021) 1,602
Funding to enhance the oversight of the Benefits Delivery Modernization Program (Budget 2021) 1,554
Financial Management Transformation initiatives and the Comptrollership Data Strategy 1,128
Funding to implement the Policy on COVID-19 Vaccination for the Core Public Administration Including the Royal Canadian Mounted Police (COVID-19) 1,075
Reduction of transfers from various organizations to support Financial Management Transformation -11,216
Sunset of funding for the Greening Government Fund -5,639
Paylist allocations -2,571
Funding for the Canadian Digital Service to provide critical digital products and services (COVID-19) -1,940
Funding to support the enterprise funding model for government IT services (Budget 2021) -1,794
Sunset of funding for Workload Migration and Cloud Enablement -1,608
Reprofile of the Centralized Enabling Workplace Fund  -1,518
Sunset of funding to foster a diverse and inclusive public service -1,334
Other miscellaneous decreases that do not exceed materiality thresholds -882
Subtotal Vote 1 59,988
Vote 20: Public Service Insurance
Funding for the Royal Canadian Mounted Police Life and Disability Insurance Plan 536,507
Funding for the public service insurance plans and programs 147,377
Other miscellaneous increases that do not exceed materiality thresholds 336
Subtotal Vote 20 684,220
Statutory authorities 
A net decrease in TBS’s share of contributions to employee benefit plans compared to last year is mainly due to various funding received in 2021–22 through Supplementary Estimates A and B and allotment adjustments. -148
Subtotal statutory authorities -148
Total authorities 744,060

2.2 Statement of departmental budgetary expenditures by standard object

The year-to-date budgetary expenditures, as at December 31, 2022, have increased by
$814.4 million (38.2%) compared to the same period in the previous year:

  • Vote 1 expenditures increased by $23.5 million
  • Vote 20 expenditures increased by $706.8 million
  • Statutory payments increased by $84.1 million

For the fiscal quarter ended December 31, 2022, budgetary expenditures have increased by
$455.9 million (48.5%) compared to the same period in the previous year:

  • Vote 1 expenditures increased by $16.4 million
  • Vote 20 expenditures increased by $546.5 million
  • Statutory payments decreased by $107.0 million

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

Standard object Changes to voted and statutory expenditures  Variance between 2022–23 year-to-date and 2021–22 year-to-date expenditures (April 1 to December 31)
($ thousands)
Variance between 2022–23 Q3 and 2021–22 Q3 expenditures (October 1 to December 31)
($ thousands)
Vote 1: Program Expenditures
1 Personnel

The increase in expenditures is due to:

  1. additional full-time-equivalents (FTEs) in the Office of the Chief Information Officer (OCIO) to support the governance and oversight of digital initiatives and play a larger role in supporting the information technology (IT) community
  2. an increase in full-time equivalents (FTEs) to support various initiatives, including the implementation of proactive pay equity in the federal public service (Budget 2021) and the implementation of the policy on COVID-19 vaccination
  3. new funding received for the Canadian Digital Service to further improve how the government delivers digital services to Canadians (Budget 2021)

The increase is partially offset by a decrease in salary expenditures due to:

  1. timing differences in the processing of cost recoveries from other government departments (OGDs) and agencies.
8,338 6,997
4 Professional and special services

The increase in expenditures is mainly due to:

  1. legal services
  2. IT and telecommunication consultants and management consulting services under the Digital Strategy, Planning and Oversight program to support the President’s digital identity platform
8,364 4,897
5 Rentals

The increase in year-to-date expenditures is due to the transfer of the administration of the SAP contract for the Government of Canada (GC) from Public Services and Procurement Canada (PSPC) to TBS. TBS is now responsible for paying the annual support and maintenance fees for SAP licenses used in the GC.

25,921 353
9 Acquisition of machinery and equipment

The increase in expenditures is mainly due to timing differences in the processing of invoices.

91 1,947
12 Other Subsidies and Payments

The variance is mainly attributable to the modernization of the Financial Management Transformation systems program.

The increase is partially offset by an increase in cost recoveries for the Office of the Chief Information Officer (OCIO) Application Modernization program.

6,473 353
Vote-Netted Revenue

The increase in year-to-date vote-netted revenues (VNR) is mainly attributable to the transfer of the administration of the SAP contract for the GC from PSPC to TBS. TBS is now responsible for paying the annual support and maintenance fees for SAP licences used in the GC, and these costs are recovered from OGDs.

The decrease in Q3 VNR is mainly attributable to timing differences for Public Service Superannuation Act cost recovery invoicing compared to the previous year.

-26,196 1,632
Other

Miscellaneous expenditures

477 241
Subtotal Vote 1 23,468 16,420
Vote 20: Public Service Insurance
1 Personnel

The increase in expenditures is mainly due to:

  1. an increase in Royal Canadian Mounted Police (RCMP) approved disability claims and related payments, further to the recent signing of the first collective agreement for regular members, which is a key determinant of the amount of a disability benefit payment
  2. higher payroll taxes due to an increase in public service employment, as well as a higher salary base on which payroll taxes are assessed following implementation of certain collective agreements for the public service and the Royal Canadian Mounted Police
  3. an increase in the number of people covered under the Public Service Health Care Plan (PSHCP)
  4. an increase in the use of benefits under the PSHCP and the Public Service Dental Care Plan
724,119 552,698
Vote-Netted Revenue

The increase in VNR is mainly attributable to an increase in the number of people contributing to the PSHCP.

-21,374 -8,324
Other

Miscellaneous expenditures

4,067 2,133
Subtotal Vote 20 706,812 546,507
Statutory expenditures
1 Personnel

The increase in statutory expenditures is mainly attributable to the following:

  1. PSPC charges TBS for the employer’s share of contributions to the Public Service Pension Plan, the Canada Pension Plan, the Québec Pension Plan, the Employment Insurance Plan and the Supplementary Death Benefit Plan. TBS recovers these payments from OGDs and agencies. The increase in Q3 expenditures is mainly due to the timing of the charges and of the recoveries from OGDs and agencies of the employer’s share of contributions to employee benefit plans; however, the net effect on TBS’s financial statements will be zero by year-end.
  2. An increase in TBS’s total monthly employee benefit plan expenditures based on the 2022–23 Statutory Forecasts for Main Estimates.
84,128 -107,038
Subtotal statutory expenditures 84,128 -107,038
Total expenditures 814,408 455,889

3. Risks and uncertainties

TBS must provide leadership across the federal government to fulfill its digital, administrative and employer roles. Such leadership includes:

  • advancing measures to foster a more diverse and inclusive public service
  • advancing digital government to better serve Canadians
  • furthering the Greening Government Strategy
  • bringing forward a coherent and coordinated work strategy for the core public service

These complex, emerging and government-wide initiatives are expected to be completed within short time frames.

Hybrid work model

In spring 2022, TBS launched employee engagement initiatives to help the department understand its employees’ perspectives and lived experiences with regard to remote and hybrid work, and how a hybrid workplace could impact its people, business outcomes, and organizational operations.

While departments and agencies are each unique, the experience of working in the public service or receiving services from it should be the same across the government and across the country. This ensures fairness and equity across workplaces.

The federal public service has adopted a common hybrid work model that will see employees work on site at least 2 to 3 days each week, or 40 to 60% of their regular schedule. This new model applies to all of the core public administration.

While TBS employees and many other public servants have implemented this hybrid model since the summer, this new approach will allow other departments and employees to smoothly transition to a common hybrid model.

Employee wellness

Many workplace factors, including workload pressures and the high rate of employee turnover, present a risk that employees’ physical and mental health will be negatively affected. In addition, there are other risks related to human resources management that include talent scarcity and the ability to retain TBS’s current workforce. These risks could result in increased short-term absenteeism and impede the organization’s ability to meet its objectives. To alleviate these risks, the TBS Wellness Program is available to employees, in addition to other support mechanisms, to:

  • improve resilience
  • manage stress
  • eliminate stigma
  • promote psychological and physical health and wellness

TBS is also taking actions to attract, develop and retain an agile, skilled and diverse workforce by:

  • attracting talent from diverse backgrounds through targeted internal and external hiring
  • developing a skilled and agile workforce to close current and emerging skills gaps
  • retaining talent through employee recognition, opportunities for growth, continuous learning, and ongoing performance and talent management

Information technology capacity

There are risks to information technology (IT) capacity in which a system outage or cyberattack could impede the availability of IT resources, assets and information. In response, TBS became an early adopter of the cloud environment, eliminating its need to depend on the on-premise IT environment managed by Shared Services Canada. TBS has also implemented new collaboration tools to help its workforce be mobile and allow employees to continue to work remotely in case of further pandemic lockdowns.

Financial management

Lastly, there is a financial management risk that the department may not be funded appropriately to deliver on its expected results due to the volume of priorities taken on by TBS and assigned to it. Regular and rigorous financial monitoring will determine the projected financial situation for the current year and its potential impact on future years.

Resources may need to be reallocated to deliver on priority initiatives and TBS-led government-wide projects to ensure they are delivered within scope, on schedule and within budget. TBS will request that all associated funding is received for any incremental work through the fiscal framework and the budget process.

4. Significant changes in relation to operations, personnel and programs

This section chronologically highlights significant changes in operations, personnel and programs of TBS during the third quarter of the fiscal year.

On October 14, 2022, Jen O’Donoughue was appointed as Assistant Secretary, International Affairs, Security and Justice Sector (IASJ).

On October 21, 2022, the Prime Minister announced the appointment of Francis Trudel as Associate Chief Human Resources Officer, Treasury Board of Canada Secretariat, effective October 31, 2022.

On October 21, 2022, the Prime Minister announced the departure of Suzy McDonald, Assistant Secretary of the Social and Cultural Sector, effective October 31, 2022.

5. Approval by senior officials

Approved by:

_____________________________

Graham Flack, Secretary

Ottawa, Canada

Date:

Approved by:

_____________________________

Karen Cahill, Chief Financial Officer

Date:

6. Appendix

Statement of Authorities (unaudited) (in dollars)
Fiscal year 2022–23 Fiscal year 2021–22
Total available for use for the year ending March 31, 2023Footnote * Used during the quarter ended December 31, 2022 Year-to-date used at quarter-endFootnote ** Total available for use for the year ending March 31, 2022Footnote * Used during the quarter ended December 31, 2021 Year-to-date used at quarter-endFootnote **
Vote 1 - Program Expenditures 378,068,057 86,974,022 236,760,521 318,080,109 70,554,264 213,292,698
Vote 20 - Public Service Insurance 3,732,362,861 1,391,003,459 2,851,316,585 3,048,142,739 844,496,109 2,144,504,120
Statutory authorities
A111 - President of the Treasury Board - Salary and motor car allowance
92,500 23,100 69,300 92,500 22,842 69,192
A140 - Contributions to employee benefit plans
37,163,924 8,835,086 26,505,258 37,311,676 7,913,119 23,739,357
A145 - Unallocated employer contributions made under the Public Service Superannuation Act and other retirement acts and the Employment Insurance Act (EI)
-90,476,731 -166,718,026 17,483,249 -248,079,817
A681 - Payments under the Public Service Pension Adjustment Act
7 33
Total statutory authorities 37,256,424 -81,618,545 -140,143,468 37,404,176 25,419,217 -224,271,235
Total authorities 4,147,687,342 1,396,358,936 2,947,933,638 3,403,627,024 940,469,590 2,133,525,583
Departmental budgetary expenditures by Standard Object (unaudited) (in dollars)
Fiscal year 2022–23 Fiscal year 2021–22
Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended December 31, 2022 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended December 31, 2021 Year-to-date used at quarter-end
Expenditures
1 Personnel
4,892,413,172 1,553,565,509 3,468,507,193 4,126,586,233 1,100,908,016 2,651,921,912
2 Transportation and communications
1,909,748 336,880 740,790 3,188,496 218,851 247,881
3 Information
569,270 84,502 373,583 505,456 101,201 469,680
4 Professional and special services
148,184,767 39,146,586 93,927,636 86,622,211 32,569,839 81,101,320
5 Rentals
35,053,745 3,619,928 32,601,699 3,965,692 3,266,626 6,680,897
6 Repair and maintenance
1,813,803 264,558 297,899 2,273,381 74,980 199,082
7 Utilities, materials and supplies
902,606 68,342 158,873 2,189,088 101,610 138,441
9 Acquisition of machinery and equipment
5,887,685 2,342,765 3,391,257 6,288,515 395,751 3,300,467
10 Transfer payments
981,690 8,637 521,637 981,690 52,007 587,026
12 Other subsidies and payments
33,211,572 -3,710,105 -4,834,169 1,115,231 -4,542,504 -10,938,100
Total gross budgetary expenditures 5,120,928,057 1,595,727,602 3,595,686,398 4,233,715,993 1,133,146,377 2,733,708,606
Less revenues netted against expenditures
Vote-Netted Revenues (VNR): Centrally managed items -871,753,847 -196,427,518 -615,143,565 -811,957,101 -188,103,927 -593,769,441
Vote-Netted Revenues (VNR): Program expenditures -101,486,868 -2,941,148 -32,609,195 -18,131,868 -4,572,861 -6,413,581
Total revenues netted against expenditures -973,240,715 -199,368,666 -647,752,760 -830,088,969 -192,676,788 -600,183,022
Total net budgetary expenditures 4,147,687,342 1,396,358,936 2,947,933,638 3,403,627,024 940,469,589 2,133,525,584
Government-wide expenses included aboveFootnote *
1 Personnel
4,636,348,932 1,477,733,092 3,249,435,462 3,892,479,816 1,032,987,440 2,443,683,968
2 Transportation and communications
- 11 2,068 -
4 Professional and special services
4,524,200 17,631,388 44,413,750 4,524,200 15,918,472 39,860,706
10 Transfer payments
- 300,000 500,000 7 301,356
12 Other subsidies and payments
500,000 666,128 3,125,136 186,469 3,493,968
Total 4,641,373,132 1,496,030,619 3,297,276,416 3,897,504,016 1,049,092,388 2,487,339,998
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