Treasury Board of Canada Secretariat’s Quarterly Financial Report for the Quarter Ended September 30, 2019
Statement outlining results, risks and significant changes in operations, personnel and programs
On this page
1. Introduction
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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, as well as Budget Plan 2017, Budget Plan 2018 and Budget Plan 2019.
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 for the fiscal year ending . 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 above
- 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 7 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 (Manitoba, Newfoundland and Labrador, Ontario and Québec), 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.
Transfer amounts from all other central votes mentioned above will be included in the financial reports of the individual recipient departments.
2. Highlights of fiscal quarter and fiscal year-to-date results
This section:
- highlights the financial results for the quarter and fiscal year-to-date ended
- 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 votes
- $10 million for Vote 20, Public Service Insurance
| 2019–20 Budgetary authorities to | 2018–19 Budgetary authorities to | Variance in budgetary authorities | Year‑to‑date expenditures as at Q2 2019–20 () |
Year‑to‑date expenditures as at Q2 2018–19 () |
Variance between 2019–20 year‑to‑date and 2018–19 year‑to‑date expenditures | Q2 Expenditures 2019–20 | Q2 Expenditures 2018–19 | Variance between 2019–20 Q2 and 2018–19 Q2 expenditures | |
|---|---|---|---|---|---|---|---|---|---|
| Vote 1: Program expenditures | 299,663 | 254,808 | 44,855 | 141,142 | 116,095 | 25,047 | 70,480 | 55,736 | 14,744 |
| Vote 20: Public Service Insurance | 2,667,910 | 2,952,919 | -285,009 | 1,211,639 | 1,299,722 | -88,083 | 571,960 | 630,305 | -58,345 |
| Statutory authorities | 33,498 | 368,675 | -335,177 | -152,601 | -87,534 | -65,067 | -121,321 | -97,455 | -23,866 |
| Total | 3,001,071 | 3,576,402 | -575,331 | 1,200,180 | 1,328,283 | -128,103 | 521,119 | 588,586 | -67,467 |
2.1 Statement of voted and statutory authorities
Total budgetary authorities available for use decreased by $575.3 million (16.1%) from the previous fiscal year:
- Vote 1 authorities increased by $44.9 million
- Vote 20 authorities decreased by $285.0 million
- statutory authorities decreased by $335.2 million
The following table provides a detailed explanation of these changes.
| Changes to voted and statutory authorities (2019–20 compared with 2018–19) | $ thousands |
|---|---|
| Vote 1: Program Expenditures | |
| Funding for the stabilization of the Government of Canada’s pay system (Budget 2019) | 20,665 |
| Funding from contributing departments and agencies to support the Government of Canada Financial and Material Management solution project (GCFM) | 9,387 |
| Funding from contributing departments and agencies to establish the Greening Government Fund | 5,352 |
| Funding to support the Public Service Centre on Diversity, Inclusion and Wellness (Budget 2018) | 3,949 |
| Third year of funding for the Canadian Digital Service to develop digital mobile applications to improve ways in which Canadians access government services | 2,982 |
| Funding to support the Workload Migration and Cloud Enablement initiative to migrate from older data centres into more secure modern data centres or cloud solutions (Budget 2018) | 2,500 |
| Second year of funding to support the Regulatory Reviews (Budget 2018) | 2,017 |
| Funding for Placing Evidence at the Centre of Program Evaluation and Design (Budget 2018) | 1,715 |
| Funding to support the implementation of the Proactive Pay Equity in the Federal Public Service (Budget 2019) | 1,549 |
| Funding to support the Open Government Partnership Global Summit (Budget 2018) | 983 |
| Sunsetting funding for the Web Renewal initiative to consolidate departmental websites into the Canada.ca website | -2,425 |
| Decrease of funding for the Access to Information initiative | -1,639 |
| Funding reduction for the TBS share of the contribution to Shared Services Canada (Budget 2018) | -1,084 |
| Other miscellaneous decreases | -1,096 |
| Subtotal Vote 1 | 44,855 |
| Vote 20: Public Service Insurance | |
| Funding to implement the Public Service Dental Plan amendments as a result of an arbitral decision (Budget 2019) | 11,000 |
| Transfer of the Service Income Security Insurance Plan from the Treasury Board of Canada Secretriat to the Department of National Defence | -253,458 |
| Decrease of funding for the Public Service Insurance (Budget 2018) | -42,551 |
| Subtotal Vote 20 | -285,009 |
| Statutory authorities | |
| An increase to TBS’s share of contributions to employee benefit plans (EBPs) related to the increase in salary funding received in 2019-20 | 4,821 |
| Increase of Minister salary and car allowance | 2 |
| A decrease in Employer contributions to the Public Service Superannuation Act, other Retirement Acts and the Employment Insurance Act, as a result of the elimination of the special annual payment to the Public Service Pension Fund account | -340,000 |
| Subtotal statutory authorities | -335,177 |
| Total authorities | -575,331 |
2.2 Statement of departmental budgetary expenditures by standard object
The year-to-date budgetary expenditures, as at decreased by $128.1 million (9.6%) compared to the same period in the previous year:
- Vote 1 expenditures increased by $25.1 million
- Vote 20 expenditures decreased by $88.1 million
- statutory payments decreased by $65.1 million
For the fiscal quarter ended , budgetary expenditures have decreased by $67.5 million (11.5%) compared to the same period in the previous year:
- Vote 1 expenditures increased by $14.7 million
- Vote 20 expenditures decreased by $58.3 million
- statutory payments decreased by $23.9 million
The following table provides a detailed explanation of these changes by standard object.
| Standard object | Changes to voted and statutory expenditures | Variance between 2019–20 year‑to‑date and 2018–19 year‑to‑date expenditures (April 1 to September 30) | Variance between 2019–20 Q2 and 2018–19 Q2 expenditures (July 1 to September 30) |
|---|---|---|---|
| Vote 1: Program expenditures ($ thousand) | |||
| 1 Personnel | The increase in expenditures is due to additional staff hired to work on the following projects and initiatives: Regulatory Reviews, Canadian Digital Service, Centre for Regulatory Innovation, Government of Canada Financial and Material Management (GCFM), Stabilization of the Government of Canada's pay system, Government of Canada Project and Portfolio Management (GCPPM), Centre for Wellness Inclusion and Diversity, Advancing Gender Equality, Next Generation HR to Pay, Open Government Partnership Global Summit, and Talent Cloud. | 11,815 | 7,437 |
| 4 Professional Services |
The increase is due to:
Note that the increase between years would have been higher if the 2018–19 expenditures had not been overstated. As indicated in the 2018–19 Q1 QFR and the 2019–20 Q1 QFR, an interdepartmental settlement invoice of $1.8 million was charged in error to TBS in June 2018 and was reversed in July 2018. |
10,970 | 7,997 |
| 9 Construction and/or Acquisition of Machinery | The increase is due to the purchase of the following: computers (as part of the departmental replacement strategy); Microsoft Visio project licence; and Office 365, in anticipation of the move to the Cloud solution. | 1,717 | 529 |
| 12 Other Subsidies and Payments |
The decrease compared to last year is mainly due to:
|
-1,006 | -1,935 |
| Other | Miscellaneous expenditures | 1,551 | 717 |
| Subtotal Vote 1 | 25,047 | 14,745 | |
| Vote 20: Public Service Insurance | |||
| 1 Personnel |
The decrease of expenditures is due to:
The decrease is offset by an increase in expenditures due to:
|
-35,613 | -57,003 |
| 46 Vote-netted revenue |
The increase in year‑to‑date vote-netted revenues have in turn reduced the expenditures and is mainly attributable to:
The decrease in Q2 vote-netted revenues have in turn increased the expenditures is mainly due to the timing of recording vote-netted revenues compared to the previous year. |
-44,866 | 650 |
| Other | Miscellaneous expenditures | -7,604 | -1,992 |
| Subtotal Vote 20 | -88,083 | -58,345 | |
| Statutory expenditures | |||
| 1 Personnel | 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 other government departments and agencies. The decrease in Q2 and year‑to‑date expenditures is mainly due to the timing of recoveries from other government departments 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. | -65,067 | -23,867 |
| Subtotal statutory expenditures | -65,067 | -23,867 | |
| Total expenditures | -128,103 | -67,467 | |
3. Risks and uncertainties
TBS is mandated to deliver on a number of complex priorities within short timeframes and with constrained financial resources. This results in workload pressures combined with expectations for quality and timely advice. As such, TBS must continually plan for, and respond to, changes in its operating environment.
TBS is also playing an increasingly prominent role in delivering government-wide initiatives. Leading these initiatives is a challenge, particularly given the requirement to implement transformational changes in an organization as large and complex as the federal government. In particular, problems with the Phoenix pay system continue to affect employees and the government’s ability to pay them accurately and on time. Phoenix problems also continue to impact labour relations, talent management, and employee wellness. TBS continues to work with internal and external stakeholders on various fronts to address these issues and work toward solutions and resolution.
TBS recognizes the workload pressures created by the number and complexity of priority initiatives. It will continue to focus on providing its employees a healthy and enabling work environment so that it can attract, develop and retain a diverse and high-performing workforce that is fully committed to the success of the organization.
In 2019–20, TBS will continue to closely monitor its environment and operations in order to reallocate resources to key priorities and to ensure that resources are being managed effectively to deliver results.
4. Significant changes in relation to operations, personnel and programs
There have been no significant changes in relation to operations, personnel and programs for the quarter ended .
5. Approval by senior officials
Approved by:
Peter Wallace, Secretary
Karen Cahill, Chief Financial Officer
Ottawa, Canada
Date:
6. Appendix
| Fiscal year 2019–2020 | Fiscal year 2018–2019 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending table 4 note * | Used during the quarter ended | Year to date used at quarter-end | Total available for use for the year ending table 4 note * | Used during the quarter ended | Year to date used at quarter‑end | |
Table 4 Note
|
||||||
| Vote 1 - Program Expenditures | 299,663,491 | 70,480,371 | 141,142,349 | 254,807,787 | 55,735,763 | 116,095,333 |
| Vote 20 - Public Service Insurance | 2,667,910,100 | 571,960,095 | 1,211,638,717 | 2,952,919,397 | 630,304,687 | 1,299,721,941 |
| Statutory Authorities | ||||||
|
A111 - President of the Treasury Board - Salary and motor car allowance
|
87,700 | 25,112 | 46,987 | 86,000 | 21,500 | 43,000 |
|
A140 - Contributions to employee benefit plans
|
33,410,613 | 7,506,467 | 15,012,934 | 28,589,290 | 6,974,326 | 13,948,652 |
|
A145 - Unallocated employer contributions made under the PSSA and other retirement acts and the Employment Act (EI)
|
0 | -128,853,008 | -167,661,114 | 340,000,000 | -104,450,741 | -101,525,955 |
|
A681 - Payments under the Public Service Pension Adjustment Act
|
0 | 13 | 26 | 0 | 13 | 26 |
| Total Statutory Authorities | 33,498,313 | -121,321,416 | -152,601,167 | 368,675,290 | -97,454,902 | -87,534,277 |
| Total authorities | 3,001,071,904 | 521,119,050 | 1,200,179,899 | 3,576,402,474 | 588,585,548 | 1,328,282,997 |
| Fiscal year 2019–2020 | Fiscal year 2018–2019 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending table 5 note * | Expended during the quarter ended | Year to date used at quarter-end | Planned expenditures for the year ending table 5 note * | Expended during the quarter ended | Year to date used at quarter-end | |
Table 5 Note
|
||||||
| Expenditures: | ||||||
|
1 Personnel
|
3,645,084,862 | 668,931,737 | 1,491,465,492 | 4,184,368,600 | 742,364,462 | 1,580,330,455 |
|
2 Transportation and communications
|
2,366,543 | 602,693 | 1,128,033 | 2,559,558 | 571,122 | 983,824 |
|
3 Information
|
356,455 | 94,721 | 211,551 | 270,753 | 59,028 | 128,620 |
|
4 Professional and special services
|
78,300,653 | 26,295,030 | 49,349,506 | 69,694,200 | 19,002,180 | 39,204,093 |
|
5 Rentals
|
3,337,244 | 604,201 | 1,547,206 | 2,413,611 | 444,719 | 729,427 |
|
6 Repair and maintenance
|
2,766,845 | 314,400 | 328,964 | 1,186,319 | 20,587 | 26,184 |
|
7 Utilities, materials and supplies
|
1,176,501 | 186,006 | 267,919 | 621,683 | 201,166 | 356,599 |
|
9 Acquisition of machinery and equipment
|
5,075,096 | 2,022,247 | 4,616,939 | 3,975,085 | 1,492,908 | 2,900,283 |
|
10 Transfer payments
|
981,690 | 1,299 | 440,211 | 981,690 | 13 | 350,026 |
|
12 Other subsidies and payments
|
6,823,373 | -3,099,076 | -1,302,006 | 488,982 | 45,818 | 299,420 |
| Total gross budgetary expenditures | 3,746,269,262 | 695,953,258 | 1,548,053,815 | 4,266,560,482 | 764,202,003 | 1,625,308,931 |
| Less Revenues netted against expenditures: | ||||||
|
Vote Netted Revenues (VNR) - Centrally managed items
|
-731,911,799 | -173,714,297 | -346,754,005 | -676,711,799 | -174,272,593 | -295,682,071 |
|
Vote Netted Revenues (VNR) - Program expenditures
|
-13,285,559 | -1,119,911 | -1,119,911 | -13,446,208 | -1,343,862 | -1,343,863 |
|
Total Revenues netted against expenditures
|
-745,197,358 | -174,834,208 | -347,873,916 | -690,158,007 | -175,616,455 | -297,025,934 |
| Total net budgetary expenditures | 3,001,071,904 | 521,119,050 | 1,200,179,899 | 3,576,402,474 | 588,585,548 | 1,328,282,997 |
| Government-Wide Expenses included abovetable 5 note * | ||||||
|
1 Personnel
|
3,411,577,899 | 606,402,452 | 1,369,682,873 | 3,626,887,196 | 687,808,067 | 1,471,430,745 |
|
2 Transportation and communications
|
0 | 9,324 | 16,047 | 0 | 3,303 | 3,966 |
|
3 Information
|
0 | 9,466 | 10,341 | 0 | 2,250 | 2,250 |
|
4 Professional and special services
|
2,244,000 | 10,949,529 | 19,175,795 | 2,244,000 | 11,653,638 | 19,999,931 |
|
10 Transfer payments
|
500,000 | 1,299 | 351,312 | 500,000 | 13 | 350,026 |
|
12 Other subsidies and payments
|
0 | -550,673 | 1,495,266 | 0 | 659,281 | 2,091,166 |
| Total | 3,414,321,899 | 616,821,397 | 1,390,731,634 | 3,629,631,196 | 700,126,552 | 1,493,878,084 |
© Her Majesty the Queen in Right of Canada, represented by the President of the Treasury Board, 2019,
ISSN: 2561-1852
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