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
  2. Highlights of fiscal quarter and 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

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
    • $10 million for Vote 20, Public Service Insurance
Highlights of the fiscal quarter and the fiscal year‑to‑date results ($ thousands)
  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)
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.

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:

  1. the advancement of various projects and initiatives, such as the Access to Information Phase II, GCPPM, GCFM, Workload Migration and Cloud Enablement, Next Generation HR to Pay, and the Open Government Partnership Global Summit;
  2. an earlier payment of SAP licensing and supporting fees to Public Services and Procurement Canada compared to the previous year; and,
  3. the advancement of work on the implementation of collective agreements and on the allocation of annual leave damages to employees as a result of Phoenix problems.

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. the recovery of expenditures under 3 specific cost-sharing agreements in 2019–20:
    1. a) GCFM project to continue advancement of the SAP digital core configuration;
    2. b) Talent Cloud IT project to create a repository of searchable, pre-assessed and inter-operable talent;
    3. c) GCTools project to implement a suite of government-wide web-based collaborative internal networks; and,
  2. the sunset of funding for the Skills Review initiative received in 2018–19.
-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:

  1. the transfer of the Service Income Security Insurance Plan (SISIP) to the Department of National Defence effective April 1, 2019; and,
  2. a 6-month premium holiday under the Long-Term Disability line of insurance (effective January 1, 2019), for the Public Service Management Insurance Plan (PSMIP).

The decrease is offset by an increase in expenditures due to:

  1. higher costs per service and the increase in the number of members for the Public Service Health Care Plan benefits, including paid claims per member; and,
  2. the introduction of the Employer Health Tax in British Columbia, effective January 1, 2019.
-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:

  1. the implementation of a new premium rate under pensioner contribution rates for Public Service Health Care Plan effective April 1, 2019; and,
  2. the timing of recording vote-netted revenues compared to the previous year.

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

Statement of Authorities (unaudited) (in dollars)
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

Table 4 Note 1

Includes only Authorities available for use and granted by Parliament at quarter-end

Return to table 4 note * referrer

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
Departmental budgetary expenditures by Standard Object (unaudited) (in dollars)
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

Table 5 Note 1

Government-Wide Expenses include Vote 20 and Statutory Authorities (Unallocated employer contributions made under the Public Service Superannuation Act and other retirement acts and the Employment Act (EI); Payments made under the Public Service Pension Adjustment Act; Payments for the pay equity settlement pursuant to section 30 of the Crown Liability and Proceedings Act).

Return to table 5 note * referrer

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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