Quarterly Financial Report for the Quarter Ended September 30, 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 and the Supplementary Estimates (A) 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, 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. 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 $212.6 million (6.0%) from the previous fiscal year:

• Vote 1 authorities decreased by $2.7 million
• Vote 20 authorities increased by $216.3 million
• Statutory authorities decreased by $1.0 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 September 30, 2023, have increased by $418.6 million (27.0%) when compared to the same period in the previous year:

• Vote 1 expenditures increased by $22.9 million
• Vote 20 expenditures increased by $313.3 million
• Statutory payments increased by $82.4 million

For the fiscal quarter ended September 30, 2023, budgetary expenditures have increased by

$277.4 million (31.0%) when compared to the same period in the previous year:

• Vote 1 expenditures increased by $19.1 million
• Vote 20 expenditures increased by $190.0 million
• Statutory payments increased by $68.3 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. The financial situation will be regularly monitored to determine if resources need to be prioritized, and incremental funding will be requested for new initiatives.

4.1 Programs

On July 26, 2023, her Excellency the Governor General in Council, on the recommendation of the Prime Minister, under paragraph 2‍(a) of the Public Service Rearrangement and Transfer of Duties Act, transferred from the Treasury Board Secretariat to the Department of Employment and Social Development the control and supervision of that portion of the federal public administration in the Treasury Board Secretariat known as the Canadian Digital Service (Orders in Council 2023-0784).

4.2 Personnel

On July 26, 2023, the Prime Minister announced the Cabinet appointment of the Honourable Anita Anand as President of the Treasury Board.