Archived - Variance Analysis Summary: Indigenous and Northern Affairs Canada (INAC) - Financial Statements (Unaudited) - Fiscal Year 2016-2017
Archived information
This Web page has been archived on the Web. Archived information is provided for reference, research or record keeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
Note: Some totals may not fully add up due to rounding.
Table of contents
- Part A – Statement of Financial Position
- FY 2016-2017 Variance Summary – Statement of Financial Position (Unaudited)
- A 1 – Accounts payable and accrued liabilities
- A 2 – Vacation pay and compensatory leave
- A 3 – Trust accounts
- A 4 – Settled claims
- A 5 – Contingent liabilities
- A 6 – Environmental liabilities
- A 7 – Employee future benefits
- A 8 – Due from the Consolidated Revenue Fund
- A 9 – Accounts receivable and advances
- A 10 – Loans and interest receivable
- A 11 – Tangible capital assets
- Part B – Statement of Operations
- Part C – Expenses – Note 20 – Segmented Information
- C 1 – Indigenous People
- C 2 – Claims and Litigation (Transfer Payments)
- C 3 – Provincial/Territorial Governments and Institutions
- C 4 – Industry
- C 5 – Non-Profit Organization
- C 6 – Other
- C 7a – Refunds/Adjustments to Prior Years' Expenditures (Transfer Payments)
- C 7b – Refunds/Adjustments to Prior Years' Expenditures (O&M)
- C 8 – Environmental Liabilities (Transfer Payments)
- C 9 – Claims and Litigation (Operating Expenses)
- C 10 – Professional and Special Services
- C 11 – Court Awards and Other Settlement
- C 12 – Information Services
- C 13 – Other (Operating Expenses)
- C 14 – Environmental Liabilities (Operating Expenses)
- C 15 – Expenses incurred on behalf of Government
- Part D – Revenues – Note 20 – Segmented Information
- Part E - Other
Part A – Statement of Financial Position – Fiscal Year 2016-2017
FY 2016-2017 Variance Summary – Statement of Financial Position (Unaudited)
As at March 31
(in thousands of dollars) | 2017 | 2016 | Year-Over-Year Variance | Explained | Unexplained | Reference | |
---|---|---|---|---|---|---|---|
$ | % | % | % | ||||
Liabilities | |||||||
Accounts payable and accrued liabilities (note 4) | 762,879 | 754,863 | 8,016 | 1% | 1% | 0% | A 1 |
Vacation pay and compensatory leave | 18,954 | 15,157 | 3,797 | 25% | 25% | 0% | A 2 |
Other liabilities (note 5) | 62,049 | 60,458 | 1,591 | 3% | |||
Trust accounts (note 6) | 701,209 | 766,810 | (65,601) | -9% | -9% | 0% | A 3 |
Settled claims (note 7) | 203,950 | 228,117 | (24,167) | -11% | -11% | 0% | A 4 |
Contingent liabilities (note 8) | 15,065,865 | 11,550,744 | 3,515,121 | 30% | 30% | 0% | A 5 |
Environmental liabilities (note 9) | 3,394,399 | 3,765,010 | (370,611) | -10% | -10% | 0% | A 6 |
Employee future benefits (note 10) | 18,042 | 23,956 | (5,914) | -25% | -27% | 2% | A 7 |
Total Liabilities | 20,227,347 | 17,165,115 | 3,062,232 | 18% | |||
Financial Assets | |||||||
Due from the Consolidated Revenue Fund | 1,501,826 | 1,555,701 | (53,875) | -3% | -4% | 1% | A 8 |
Accounts receivable and advances (note 11) | 67,357 | 84,861 | (17,504) | -21% | -15% | -6% | A 9 |
Loans and interest receivable (note 12) | 799,916 | 874,274 | (74,358) | -9% | -9% | 0% | A 10 |
Total gross financial assets | 2,369,099 | 2,514,836 | (145,737) | -6% | |||
Financial assets held on behalf of government | |||||||
Loans and interest receivable (note 12) | (799,916) | (874,274) | 74,358 | -9% | |||
Total financial assets held on behalf of government | (799,916) | (874,274) | 74,358 | -9% | |||
Total net financial assets | 1,569,183 | 1,640,562 | (71,379) | -4% | |||
Departmental net debt | 18,658,164 | 15,524,553 | 3,133,611 | 20% | |||
Non Financial Assets | |||||||
Land held for future claims settlements (Note 13) | 38,847 | 38,847 | - | 0% | |||
Prepaid expenses | 161 | 67 | 94 | 140% | |||
Tangible capital assets (Note 14) | 173,787 | 137,589 | 36,198 | 26% | 26% | 0% | A 11 |
Total non-financial assets | 212,795 | 176,503 | 36,292 | 21% | |||
Departmental net financial position (note 15) | (18,445,369) | (15,348,050) | (3,097,319) | 20% |
A 1 – Accounts payable and accrued liabilities
(Financial Reporting Account 21111, 21112, 21113, 21119, 21128, 21132, 21134, 21151, 21611, 21613, 21614, 21621, 21626, 21627)
(2016-2017 INAC Financial Statements Note 4)
Fiscal Year 2016-2017 | 762,879 |
---|---|
Fiscal Year 2015-2016 | 754,863 |
Variance (+Increase / -Decrease) | 8,016 |
Percentage (+Increase / -Decrease) | 1% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Accounts payables and accrued liabilities increased during 2016-2017 due to the following payable that were recorded during 2016-2017 a remained outstanding at year end:
|
92,930 | 13% |
The overall increase is offset by the settlement of the following payables for grants and contributions established in 2015-16 and previous fiscal years:
|
-84,511 | -12% |
Total Explained | 8,419 | 1% |
Total Unexplained | -403 | 0% |
A 2 – Vacation pay and compensatory leave
(Financial Reporting Account 21411, 21414)
Fiscal Year 2016-2017 | 18,954 |
---|---|
Fiscal Year 2015-2016 | 15,157 |
Variance (+Increase / -Decrease) | 3,797 |
Percentage (+Increase / -Decrease) | 25% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The variance is largely attributed to an increase in the allowance for vacation pay of $3.3M. This is as a result of an increase in unused leave at year end. This can be explained by several factors:
|
3,797 | 25% |
Total Explained | 3,797 | 25% |
Total Unexplained | 0 | 0% |
A 3 – Trust accounts
(Financial Reporting Account 23221, 23222, 23223, 23225)
(2016-2017 INAC Financial Statements Note 6)
Fiscal Year 2016-2017 | 701,209 |
---|---|
Fiscal Year 2015-2016 | 766,810 |
Variance (+Increase / -Decrease) | -65,601 |
Percentage (+Increase / -Decrease) | -9% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The balances of the Indian Band Funds, Indian Savings Accounts and Indian Estates Accounts comprise the Indian Moneys Trust Accounts. Changes in the balances result from total receipts credited to the accounts minus total disbursements made during the year. | ||
The Indian Band Funds account decreased in 2016-17 by $65.2M due to disbursements of Band Funds that exceeded receipt of funds; receipts in 2015-2016 totaled $968M as compared to $132M in 2016-2017. The reduction in receipts is due in large part to a significant downturn in the oil and gas industry impacting Alberta and Saskatchewan. | -65,216 | -9% |
Total Explained | -65,216 | -9% |
Total Unexplained | -385 | 0% |
A 4 – Settled claims
(Financial Reporting Account 24114)
(2016-2017 INAC Financial Statements Note 7)
Fiscal Year 2016-2017 | 203,950 |
---|---|
Fiscal Year 2015-2016 | 228,117 |
Variance (+Increase / -Decrease) | -24,167 |
Percentage (+Increase / -Decrease) | -11% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Payments for settled claims are generally made over a number of years. The settled claims liability represents the present value of the future scheduled claim payments of all outstanding settled claims. The total decrease in the liability is due to:
|
-24,167 | -11% |
Total Explained | -24,167 | -11% |
Total Unexplained | 0 | 0% |
A 5 – Contingent liabilities
(Financial Reporting Account 21433)
(2016-2017 INAC Financial Statements Note 8)
Fiscal Year 2016-2017 | 15,065,865 |
---|---|
Fiscal Year 2015-2016 | 11,550,744 |
Variance (+Increase / -Decrease) | 3,515,121 |
Percentage (+Increase / -Decrease) | 30% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Litigation The majority of this increase is due to the combination of the following:
|
2,144,777 | 18% |
Specific Claims (including claims filed at Specific Claim Tribunal) The increase in balance can be explained by:
|
779,266 | 7% |
Special Claims: The increase of $551M is as a result of the settlement of two claims ($130M) and the addition of new claims ($681M). |
551,056 | 5% |
Comprehensive Claims:
|
118,203 | 1% |
Indian Residential School Claims The decrease is as a result of decisions issued and settlements achieved for 1,871 claims during the year. In addition, there was an increase in the zero dollar award rate which results in a lower estimated liability. |
-78,186 | -1% |
Total Explained | 3,515,116 | 30% |
Total Unexplained | 5 | 0% |
A 6 – Environmental liabilities
(Financial Reporting Account 24141)
(2016-2017 INAC Financial Statement Note 9)
Fiscal Year 2016-2017 | 3,394,399 |
---|---|
Fiscal Year 2015-2016 | 3,765,010 |
Variance (+Increase / -Decrease) | -370,611 |
Percentage (+Increase / -Decrease) | -10% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
During 2016-2017, there was a decrease of the liability in the Northern region of $267M resulting from a combination of the following:
|
-266,816 | -7% |
During 2016-2017 there was a decrease of liability in the Southern region resulting from a combination of the following:
|
-106,850 | -3% |
Total Explained | -373,666 | -10% |
Total Unexplained | 3,055 | 0% |
A 7 – Employee future benefits
(Financial Reporting Account 21415)
(2016-2017 INAC Financial Statements Note 10)
Fiscal Year 2016-2017 | 18,042 |
---|---|
Fiscal Year 2015-2016 | 23,956 |
Variance (+Increase / -Decrease) | -5,914 |
Percentage (+Increase / -Decrease) | -25% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Employee Severance Benefit Liability is based on a calculation promulgated by the Office of the Comptroller General of Canada. The decrease in the liability is due to a combination of the following:
|
-6,497 | -27% |
Total Explained | -6,497 | -27% |
Total Unexplained | 583 | 2% |
A 8 – Due from the Consolidated Revenue Fund
(Financial Reporting Account 11242, 13314, 13315, 13392, 13396, 21111, 21112, 21113, 21119, 21128, 21132, 21134, 21151, 21611, 21613, 23211, 23213, 23214, 23221, 23222, 23223, 23225, 23441, 23442)
Fiscal Year 2016-2017 | 1,501,826 |
---|---|
Fiscal Year 2015-2016 | 1,555,701 |
Variance (+Increase / -Decrease) | -53,875 |
Percentage (+Increase / -Decrease) | -3% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Decrease in Accounts Receivable of $17M (see A9 for explanation) | 17,504 | 1% |
Decrease in Trust Accounts of $65M (see A3 for explanation) | - 65,216 | - 4% |
Decrease in Accounts Payable of $8M (see A1 for an explanation) | - 8,016 | -1% |
Total Explained | -55,728 | - 4% |
Total Unexplained | 1,853 | 1% |
A 9 – Accounts receivable and advances
(Financial Reporting Account 11123, 11125, 11129, 11221, 11231, 11233, 11237, 11242, 13314, 13315, 13319, 13396)
(2016-2017 INAC Financial Statements Note 11)
Fiscal Year 2016-2017 | 67,357 |
---|---|
Fiscal Year 2015-2016 | 84,861 |
Variance (+Increase / -Decrease) | -17,504 |
Percentage (+Increase / -Decrease) | -21% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Accounts receivables
|
-19,521 | -23% |
Salary overpayments There was an increase of $7.4M due to salary overpayments due to on-going Phoenix pay system issues. |
7,431 | 9% |
Total Explained | -12,090 | -15% |
Total Unexplained | -5,414 | -6% |
A 10 – Loans and interest receivable
(FRA 11234, 11239, 1333X, 13379, 1338X, 13391, 13399, 13439)
(2016-2017 INAC Financial Statement Note 12)
Fiscal Year 2016-2017 | 799,916 |
---|---|
Fiscal Year 2015-2016 | 874,274 |
Variance (+Increase / -Decrease) | -74,358 |
Percentage (+Increase / -Decrease) | -9% |
Direct loans portfolio
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Principal – As more First Nations are in negotiation stages rather than repayment stages, loan issued outnumber loan repayments. Loans receivable increased for First Nations in British Columbia by $14M and for Native Claimants by $4M because we issued more payments in 2016-2017 as compared to 2015-2016. |
19,203 | 2% |
Interest receivable- Interest receivable increased due to one additional claim reaching an agreement in principal stage and therefore becoming interest bearing. In addition, loans are being issued at a higher rate than they are being repaid. |
427 | 0% |
Allowance for doubtful loans and interest receivable- The allowance for doubtful loans increased significantly from 2015-2016 after it was determined that the collectability of $91.2M of loans receivable is not reasonably assured. |
-91,231 | -10% |
Subtotal direct loans portfolio | -71,601 | -9% |
Defaulted guaranteed loans portfolio
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Principal- The decline in the principal balance is attributed to the write-off of ten loans pertaining to the On-reserve Housing, Indian Economic Guarantee and Farm Credit Canada (other defaulted guaranteed loans) loan guarantee programs which resulted in a reduction of $0.8M. The remaining decline is as a result of repayments. |
-1,611 | 0% |
Interest receivable- The increase in interest is explained by accrued interest of $3.8M that was recorded in 2016-2017 as compared to $1.5M in 2015-2016. The large increase is explained by a correction that was done in 2015-2016 which resulted in a downward adjustment to correct an interest overstatement. This was offset by the write-off of the interest portion of ten loans which resulted in a reduction of $2.9M as well as repayments of $.8M during the year. |
763 | 0% |
Allowance- The allowance for doubtful guaranteed loans increased from 2015-2016 after it was determined that the collectability of $5.5M of loans receivable is not reasonably assured. This was offset by the write-off of $3.7M of loans during 2016-2017. |
- 1,909 | 0% |
Subtotal defaulted guaranteed loans | -2,757 | 0% |
Total Explained | -74,358 | -9% |
Total Unexplained | 0 | 0% |
A 11 – Tangible capital assets
(Financial Reporting Account 161XX, 163XX, and 514XX)
(2016-2017 INAC Financial Statement Note 14)
Fiscal Year 2016-2017 | 173,787 |
---|---|
Fiscal Year 2015-2016 | 137,589 |
Variance (+Increase / -Decrease) | 36,198 |
Percentage (+Increase / -Decrease) | 26% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The increase is mainly due to the capitalization of additional expenditures for buildings in progress of construction related to the Canadian High Artic Research Station Project. | 36,304 | 26% |
Total Explained | 36,304 | 26% |
Total Unexplained | -106 | 0% |
Part B – Statement of Operations
B 1 – Statement of Operations – 2016-2017 versus 2015-2016
For the Year Ended March 31
(in thousands of dollars) | 2017 | 2016 | Year-Over-Year Variance | |
---|---|---|---|---|
$ | % | |||
Expenses | ||||
People | 6,298,697 | 3,672,644 | 2 626 053 | 72% |
Government | 3,440,247 | 2,781,954 | 658,293 | 23% |
Land and Economy | 2,217,674 | 1,961,920 | 255,754 | 13% |
North | 73,309 | 866,819 | (793,510) | -92% |
Internal Services | 318,591 | 308,854 | 9,737 | 3% |
Expenses incurred on behalf of Government | (96,870) | (15,877) | (80,993) | 510% |
Total expenses | 12,251,648 | 9,576,314 | 2 675 334 | 28% |
Revenues | ||||
Resource royalties | 852 | 17,821 | (16,969) | -95% |
Norman Wells project profits | - | 10,471 | (10,471) | -100% |
Interest on loans | 5,952 | 3,829 | 2,123 | 55% |
Miscellaneous | 5,343 | 2,968 | 2,375 | 80% |
Finance and administrative services | 2,264 | 2,448 | (184) | -8% |
Leases and rentals | 977 | 1,445 | (468) | -32% |
Revenues earned on behalf of Government | (11,202) | (35,681) | 24,479 | -69% |
Total revenues | 4,186 | 3,301 | 885 | 27% |
Net cost from continuing operations | 12,247,462 | 9,573,013 | 2,674,449 | 28% |
Highlights of Major Variances – Statement of Operations
2016-2017 versus 2015-2016
Expenses
There was a significant increase to the Department's strategic outcomes from 2015-2016 to 2016-2017. No material adjustments were made to the strategic outcomes during the year. The explanation of individual variances grouped by strategic outcomes can be found in the expense variance summaries in Part C.
People
This variance is primarily explained by the increase in the operating expense related to the provision of contingent liabilities (see C9 – Claims and litigation) which was slightly offset by a decrease in court awards and other settlements (see C11- Court awards and other settlements).
Government
The increase is attributed to the transfer payments to Indigenous peoples (see C1 – Indigenous peoples (transfer payment)), as well as the increase in claims and litigation related Comprehensive and Specific claims (see C9 – Claims and litigation).
Land and Economy
The variance is attributed to an increase in transfer payments to Indigenous peoples (see C1 – Indigenous peoples (transfer payment)). This is as a result of Budget 2016 funding to support the delivery of on-reserve housing, waste water management and other infrastructure as well as funding for additional investment in First Nation elementary and secondary education.
North
The decrease is explained by the change in the provision for environmental liabilities in the Northern Region (see C8 – Environmental Liabilities (transfer payments) and C14 – Environmental Liabilities (Operating Expenses)).
Internal Services
The increase is explained by an augmentation in expenditures for professional and special services (see C10- Professional and special services).
Revenue
Variance analysis for revenue is provided in Part D "Revenue – Note 20 Segmented Information".
B 2 – Statement of Operations – Actual versus Planned
For the Year Ended March 31
(in thousands of dollars) | 2017 Actual |
2016 Planned |
Variance (Actual versus Planned) | |
---|---|---|---|---|
$ | % | |||
Expenses | ||||
People | 6,298,697 | 3,634,071 | 2,664,626 | 73% |
Government | 3,440,247 | 1,251,647 | 2,188,600 | 175% |
Land and Economy | 2,217,674 | 1,498,860 | 718,814 | 48% |
North | 73,309 | 116,033 | (42,724) | -37% |
Internal Services | 318,591 | 253,041 | 65,550 | 26% |
Expenses incurred on behalf of Government | (96,870) | 6,394 | (103,264) | -1,615% |
Total expenses | 12,251,648 | 6,760,046 | 5,491,602 | 81 % |
Revenues | ||||
Resource royalties | 852 | 2,000 | (1,148) | -57% |
Norman Wells project | - | 67,465 | (67,465) | -100% |
Interest on loans | 5,952 | 5,845 | 107 | 2% |
Miscellaneous | 5,343 | 4,152 | 1,191 | 29% |
Finance and administrative services | 2,264 | 1,654 | 610 | 37% |
Leases and rentals | 977 | 537 | 440 | 82% |
Revenues earned on behalf of Government | (11,202) | (79,428) | 68,226 | -86% |
Total revenues | 4,186 | 2,225 | 1,961 | 88% |
Net cost from continuing operations | 12,247,462 | 6,757,821 | 5,489,641 | 81 % |
Highlights of Major Variances – Statement of Operations
Actual versus Planned
2017 Planned Results
The forecasted financial information for 2016-2017 only included amounts presented in the 2016-2017 Reports on Plans and Priorities. 2016-2017 Supplementary Estimates C and the 2016 Budget funding were not included in the 2016-2017 forecast.
In addition, accruals for new contingent liabilities for claims and litigations and environmental liabilities were excluded from the forecast as they could not be reasonably foreseen or quantified.
Expenses
People
The variance between actual and planned can be explained by the increase in the provision for claims and litigation (see C9 – Claims and litigations).
Government
The variance between the actual and planned is due to the fact that the program was expecting a decrease in the provision for claims and litigation for specific claims and comprehensive claims but it ended up increasing (see C9 – Claims and litigations). In addition, the increase to the provision for doubtful direct loans contributed to this variance (see A10- Loans and Interest Receivable). In addition, the increase in transfer payments to Indigenous people provided in Budget 2016 caused a large variance.
Land and Economy
The variance between actual and planned can be explained by the increase in 2016-2017 in the contingent liabilities (see C9 – Claims and Litigations) and an increase in transfer payments as per Budget 2016.
North
The variance is largely attributed to an decrease in accrued environmental liabilities recorded for the northern regions while a decrease was forecasted for remediation of existing contaminated sites (see C8 – Environmental Liabilities (Transfer Payments) and C14 – Environmental Liabilities (Operating Expenses)).
Internal Services
The variance is largely attributed to the variance between actual and forecasted Operating expenditures for professional services and legal fees.
Revenue
Resource Royalties
The variance is largely attributed to the decrease in mining royalties as a result of the Northwest Territories (NWT) devolution (see D1 - Resource Royalties). The forecast was based on an estimate for audit adjustments from previous year filings which were lower than expected.
Norman Wells Project Profits
The variance is attributed to the Norman Wells Project which is not currently producing crude oil due to the decommissioning of Enbridge Line 21 (see D2 - Norman Wells Project Profits). This was not considered in the forecast.
Finances and administrative services
The variance between the planned and actual 2016-2017 revenue is explained by lower than expected revenues for human resources services and information technology services.
Lease and rentals
The variance between the planned and actual 2016-2017 Lease and rentals revenue is largely as a result of the Northwest Territories devolution.
Part C – Expenses – Note 20 – Segmented Information
As at March 31
(in thousands of dollars) | 2017 | 2016 | Year-Over-Year Variance | Explained | Unexplained | Reference | |
---|---|---|---|---|---|---|---|
$ | % | % | % | ||||
Transfer Payments | |||||||
Indigenous peoples | 7,086,759 | 5,413,818 | 1,672,941 | 31% | 24% | 7% | C 1 |
Claims and litigation | 1,448,525 | 1,161,582 | 286,943 | 25% | 25% | 0% | C 2 |
Provincial/territorial governments and institutions | 968,887 | 980,821 | (11,934) | -1% | -1% | 0% | C 3 |
Industry | 88,047 | 76,507 | 11,540 | 15% | 13% | 2% | C 4 |
Non-Profit Organizations | 67,452 | 55,881 | 11,571 | 21% | 18% | 3% | C 5 |
Other | 903 | 660 | 243 | 37% | 37% | 0% | C 6 |
Refunds/adjustments on prior years expenditures | (34,709) | (48,785) | 14,076 | -29% | -28% | -1% | C 7a) |
Environmental liabilities | (271,873) | 398,200 | (670,073) | -168% | -168% | 0% | C 8 |
Total Transfer Payments | 9,353,991 | 8,038,684 | 1,315,307 | 16% | |||
Operating Expenses | |||||||
Claims and litigation | 2,066,591 | (248,251) | 2,314,842 | 932% | 932% | 0% | C 9 |
Salaries and employee future benefits | 460,098 | 469,447 | (9,349) | -2% | |||
Professional and special services | 195,302 | 212,789 | (17,487) | -8% | -9% | 1% | C10 |
Court awards and other settlements | 177,145 | 552,206 | (375,061) | -68% | -68% | 0% | C 11 |
Legal services | 79,718 | 77,713 | 2,005 | 3% | |||
Accommodations | 35,221 | 36,217 | (996) | -3% | |||
Travel and relocation | 22,279 | 24,877 | (2,598) | -10% | |||
Rentals of buildings and machinery | 17,583 | 16,498 | 1,085 | 7% | |||
Amortization | 10,436 | 10,129 | 307 | 3% | |||
Bad debt | 7,437 | 7,510 | (73) | -1% | |||
Information services | 7,142 | 9,306 | (2,164) | -23% | -24% | 1% | C12 |
Machinery and equipment | 3,907 | 3,912 | (5) | 0% | |||
Utilities, materials and supplies | 3,685 | 3,340 | 345 | 10% | |||
Transportation and telecommunications | 1,692 | 2,357 | (665) | -28% | |||
Repair and maintenance | 1,623 | 4,386 | (2,763) | -63% | |||
Other | 5,225 | 9,875 | (4,650) | -47% | -45% | -2% | C13 |
Environmental liabilities | (98,739) | 366,463 | (465,202) | -127% | -127% | 0% | C14 |
Expenses incurred on behalf of government | (96,870) | (15,877) | (80,993) | 510% | 510% | 0% | C 15 |
Refunds/adjustments to prior year expenditures | (1,818) | (5,267) | 3,449 | -65% | -61% | -4% | C 7b) |
Total Operating Expenses | 2,897,657 | 1,537,630 | 1,360,027 | 88% | |||
Total Expenses | 12,251,648 | 9,576,314 | 2,675,334 | 28% |
C 1 – Indigenous People
(Financial Reporting Account 51171, 51118)
Fiscal Year 2016-2017 | 7,086,759 |
---|---|
Fiscal Year 2015-2016 | 5,413,818 |
Variance (+Increase / -Decrease) | 1,672,941 |
Percentage (+Increase / -Decrease) | 31% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The increase in transfer payments to Indigenous People is mainly due to an augmentation in funding as provided in Budget 2016 to:
|
795,291 | 15% |
The increase can be explained by various settlements for special and specific claims in 2016-17 related to First Nations rights and interests. | 393,096 | 7% |
The increase can also be explained by an increase in the expense related to provision for doubtful direct loans. The provision for direct loans issued to support negotiation for comprehensive lands claims increased after it was determined that the collectability of over $90M of loans was not reasonably assured. | 82,104 | 2% |
Total Explained | 1,270,491 | 24% |
Total Unexplained | 402,450 | 7% |
C 2 – Claims and Litigation (Transfer Payments)
(Financial Reporting Account 51171)
(2016-17 INAC Financial Statements Note 8)
Fiscal Year 2016-2017 | 1,448,525 |
---|---|
Fiscal Year 2015-2016 | 1,161,582 |
Variance (+Increase / -Decrease) | 286,943 |
Percentage (+Increase / -Decrease) | 25% |
Explanation of Major Variances |
---|
This expense represents the increase in the Provision for Claims and Litigation for specific claims, special claims and comprehensive claims. The annual expense for 2016-2017 has increased in comparison with the annual expense for 2015-16. The provision for claims increased mainly due to an increase in the provision for Comprehensive Land Claims (+$118M) which is due to the inflationary changes and population increases as well as an increase of four financial mandates which was partially offset by one settlement ($61M). The Specific Claims provision increased by $779M due to new claims with a likely status that were added to the inventory (+$577M), changes in valuation due to claims progressing through the process and changes in typology for an increase of (+$778M) which was partially offset by the settlement of 18 claims ($248M) as well as the removal of 28 claims ($327M). In addition, the Special Claims provision increased by $551M due to three new likely claims added to the special claims (+681M) which was partially offset by the settlement of two claims ($130M). |
C 3 – Provincial/Territorial Governments and Institutions
(Financial Reporting Account 51139)
Fiscal Year 2016-2017 | 968,887 |
---|---|
Fiscal Year 2015-2016 | 980,821 |
Variance (+Increase / -Decrease) | -11,934 |
Percentage (+Increase / -Decrease) | -1% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The decrease is mainly due a decline in funding for the Emergency Management Assistance Program (EMAP, specifically for the suppression of wildfires on reserve lands in Saskatchewan $15.8M and Alberta $5.9M. The funding is dependent on the occurrence of natural disasters, which varies annually. | -21,755 | -2% |
In addition, the overall decrease was caused by a reduction of financing to the Quebec Ministry of Finance for capital projects (i.e. schools) for the Cree, Kativik and Naskapis school boards. Based on the funding agreement, the Ministry of Québec contributes to these capital projects on a cost sharing basis. There were less expenditures in 2016-2017 as compared to 2015-2016 which resulted in a decrease of transfer payments as a result. | -5,220 | -1% |
The overall decrease was offset by an increase in funding to implement comprehensive land claims and self-government agreements with the Nanatsiavut government, which varies based on the projected Inuit population as well as the price index. | 5,517 | 1% |
The increase in funding which was provided in-part in Budget 2016 to better support shelters serving victims of family violence living in First Nations communities also contributed to the offsetting amount. | 9,341 | 1% |
Total Explained | -12,117 | -1% |
Total Unexplained | 183 | 0% |
C 4 – Industry
(Financial Reporting Account 51171)
Fiscal Year 2016-2017 | 88,047 |
---|---|
Fiscal Year 2015-2016 | 76,507 |
Variance (+Increase / -Decrease) | 11,540 |
Percentage (+Increase / -Decrease) | 15% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The increase can be explained by:
|
10,386 | 13% |
Total Explained | 10,386 | 13% |
Total Unexplained | 1,154 | 2% |
C 5 – Non-Profit Organization
(Financial Reporting Account 51179)
Fiscal Year 2016-2017 | 67,452 |
---|---|
Fiscal Year 2015-2016 | 55,881 |
Variance (+Increase / -Decrease) | 11,571 |
Percentage (+Increase / -Decrease) | 21% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The increase in transfer payment to Non-Profit Organizations in 2016-17 is mainly due to an increase in funding provided to the Canadian Red Cross Society for emergency assistance because of a rise in the number of emergencies (e.g. evacuation of the Chemawawin Cree Nation due to a wildfire and Long Plain Band due to tornados) in First Nation communities. | 8,321 | 15% |
Funding provided to the Centre Intégré increased during 2016-2017 due to a rise in the daily remuneration rate (i.e. +40%) paid to foster families hosting young person's starting January 1st, 2016. | 6,872 | 12% |
The overall increase was offset by a decrease in funding provided to Northern Waterworks after the completion of a major capital infrastructure project related to First Nations Water and Wastewater Action Plan. |
-2,324 | -4% |
Funding provided to NAV Canada for emergency accommodation facilities to host First Nation evacuees also decreased as INAC had sufficient accommodations from other more northern host municipalities. |
-3,088 | -6% |
Total Explained | 9,781 | 18% |
Total Unexplained | 1,790 | 3% |
C 6 – Other
(Financial Reporting Account 51119)
Fiscal Year 2016-2017 | 903 |
---|---|
Fiscal Year 2015-2016 | 660 |
Variance (+Increase / -Decrease) | 243 |
Percentage (+Increase / -Decrease) | 37% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The increase is due to a rise in transfer payments related to the following:
|
243 | 37% |
Total Explained | 243 | 37% |
Total Unexplained | 0 | 0% |
C 7a – Refunds/Adjustments to Prior Years' Expenditures (Transfer Payments)
(Financial Reporting Account 51118, 51119, 51139, 51159, 51171, 51179)
Fiscal Year 2016-2017* | -34,709 |
---|---|
Fiscal Year 2015-2016* | -48,785 |
Variance (+Increase / -Decrease) | 14,076 |
Percentage (+Increase / -Decrease) | -29% |
* The amounts for both fiscal years have been adjusted to include refunds/adjustments to G&C PAYEs, which were incorrectly mapped under Refunds/Adjustment to Prior Years' Expenditures (O&M). |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The decrease is mainly due to more recoveries recorded in 2015-16 as compared to 2016-17 for transfer payments paid to various recipients in previous years', resulting from ineligible expenditures and/or unexpended funding. This is consistent with the amount of accounts receivable setup for overpayments. | 13,780 | -28% |
Total Explained | 13,780 | -28% |
Total Unexplained | 296 | -1% |
C 7b – Refunds/Adjustments to Prior Years' Expenditures (O&M)
(Financial Reporting Account 51311, 51321 and 51726)
Fiscal Year 2016-2017* | -1,818 |
---|---|
Fiscal Year 2015-2016* | -5,267 |
Variance (+Increase / -Decrease) | 3,449 |
Percentage (+Increase / -Decrease) | - 65% |
* The amounts for both fiscal years have been adjusted to remove refunds/adjustments to G&C PAYEs, which were incorrectly mapped under Refunds/Adjustment to Prior Years' Expenditures (O&M). |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The decrease was mainly due to more recoveries from external $1.3M and other government departments $1.3M in 2015-16. | 2,649 | -50% |
In addition, a higher amount of payables at year-end for salaries and wages were cleared during 2015-16 related to unused and/or surplus amounts established in 2014-15 as compared to the amount of payables at year-end cleared during 2016-2017. | 583 | -11% |
Total Explained | 3,232 | -61% |
Total Unexplained | 217 | -4% |
C 8 – Environmental Liabilities (Transfer Payments)
(Financial Reporting Account 51171)
(2016-2017 INAC Financial Statement Note 9)
Fiscal Year 2016-2017 | -271,873 |
---|---|
Fiscal Year 2015-2016 | 398,200 |
Variance (+Increase / -Decrease) | -670,073 |
Percentage (+Increase / -Decrease) | -168% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The variance represents the change in the environmental liability and corresponding expense that is allocated to transfer payment expenses. | ||
Southern Region: In 2015-2016, a statistical model (Golder model) was developed to estimate the liability for unassessed sites based on historical costs of contaminated sites with similar functions. As a result, in 2015-2016, a liability estimate and a corresponding expense of $217M was recorded for 991 unassessed sites. In 2016-2017, the liability for unassessed sites decreased by $91.5M to $126.4M for 1,195 sites. In addition, in 2015-2016, a liability of $2M was recorded for six unassessed based on an extrapolation. In 2016-2017, there was no additional expense related to these sites. In addition, a net decrease of $13.3M of the environmental liability is due to:
|
-347,731 | -87% |
Northern Region: The expenses of ($165M) is related to the following:
|
-322,342 | -81% |
Total Explained | -670,073 | -168% |
Total Unexplained | 0 | 0% |
C 9 – Claims and Litigation (Operating Expenses)
(Financial Reporting Account 51171)
(2016-17 INAC Financial Statements Note 8)
Fiscal Year 2016-2017 | 2,066,591 |
---|---|
Fiscal Year 2015-2016 | -248,251 |
Variance (+Increase / -Decrease) | 2,314,842 |
Percentage (+Increase / -Decrease) | 932% |
Explanation of Major Variances |
---|
The expense represents the change in the Provision for Claims and Litigation. The provision includes litigation claims, non-litigation claims and Indian Residential Schools Claims. The annual expense for 2016-2017 has increased significantly as compared to the annual expense for 2015-16. The provision for litigation claims increased by $2,145M. During 2016-2017, $2,617M in new legal risk assessment for claims were added to the inventory which was partially offset by the settlement or removal of eight claims that decreased the provision by $472M. In addition, the provision for Indian Residential Schools Claims (IRS) decreased by $78M in 2016-17 due 1,871 claims that were resolved and an increase in the zero dollar award rate which results in a lower estimated liability. In 2015-2016, the expense allocated to operating expenses was decreased by $248M. Therefore, the total variance between 2015-16 and 2016-17 is $2,315M. |
C 10 – Professional and Special Services
(Financial Reporting Account 51321)
Fiscal Year 2016-2017 | 195,302 |
---|---|
Fiscal Year 2015-2016 | 212,789 |
Variance (+Increase / -Decrease) | -17,487 |
Percentage (+Increase / -Decrease) | -8% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The decrease is due to a decline in expenditures for adjudicator services of $8.9M, as a result of fewer hearings for claims related to the Independent Assessment Process (IAP), which is currently winding-down. | -8,892 | -4% |
Due to the completion of the Truth and Reconciliation Commission of Canada in December 2015, expenditures for other professional services for document disclosure activities decreased by approximately $7.2M. | -7,192 | -3% |
The completion of remediation work for contaminated mining sites in the North West Territories resulted in a net decrease of engineering and architectural expenditures in the amount of $11M. | -11,021 | -5% |
The decrease in professional and special services was offset primarily by an increase in expenditures for management consulting services of approximately $3M for activities such as asset management, infrastructure and capacity, and resources management. | 3,074 | 1% |
Scientific and research services for site monitoring and assessments related to northern land, resources, and environmental management increased by $1,5M, whereas research contracts for aboriginal rights and interests, governance and management support, and residential schools resolution programs increased by $1.6M. | 3,089 | 1% |
Business services related to accounting and audit, other government department acquisition services, and storage and warehousing services increased by $2.4M. | 2,380 | 1% |
Total Explained | -18,562 | -9% |
Total Unexplained | 1,075 | 1% |
C 11 – Court Awards and Other Settlement
(Financial Reporting Account 51722)
Fiscal Year 2016-2017 | 177,145 |
---|---|
Fiscal Year 2015-2016 | 552,206 |
Variance (+Increase / -Decrease) | -375,061 |
Percentage (+Increase / -Decrease) | -68% |
Explanation of Major Variances |
---|
The 2016-2017 net decrease in the Court Awards and Other Settlements of $375M is due to the following:
|
C 12 – Information Services
(Financial Reporting Account 51321)
Fiscal Year 2016-2017 | 7,142 |
---|---|
Fiscal Year 2015-2016 | 9,306 |
Variance (+Increase / -Decrease) | -2,164 |
Percentage (+Increase / -Decrease) | -23% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The overall Information Services Expenditures decreased in 2016-17. | ||
The majority of variance is related to a decline in expenditures for the Indian Residential Schools Resolution Health Support Program crisis line. | -2,221 | -24% |
Total Explained | -2,221 | -24% |
Total Unexplained | 57 | -1% |
C 13 – Other (Operating Expenses)
(Financial Reporting Account 51192, 51321, 51511, 51631, 51635, 51711, 51726, 51729, 51733)
Fiscal Year 2016-2017 | 5,225 |
---|---|
Fiscal Year 2015-2016 | 9,875 |
Variance (+Increase / -Decrease) | -4,650 |
Percentage (+Increase / -Decrease) | -47% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
|
-4,437 | -45% |
Total Explained | -4,437 | -45% |
Total Unexplained | -213 | -2% |
C 14 – Environmental Liabilities (Operating Expenses)
(Financial Reporting Account 51321)
(2016-2017 INAC Financial Statement Note 9)
Fiscal Year 2016-2017 | -98,739 |
---|---|
Fiscal Year 2015-2016 | 366,463 |
Variance (+Increase / -Decrease) | -465,202 |
Percentage (+Increase / -Decrease) | -127% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
This represents the change in the environmental liability balance and corresponding expense which is allocated to operating expenses. The operating expenses of $98.7M in 2016-2017 is as a result of the following:
|
-465,202 | -127% |
Total Explained | -465,202 | -127% |
Total Unexplained | 0 | 0% |
C 15 – Expenses incurred on behalf of Government
(Financial Reporting Account 51732, 51171; Authority F152)
Fiscal Year 2016-2017 | -96,870 |
---|---|
Fiscal Year 2015-2016 | -15,877 |
Variance (+Increase / -Decrease) | -80,993 |
Percentage (+Increase / -Decrease) | 510% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Expenses incurred on behalf of Government are a line item within the Statement of Operations as per the government reporting standards. INAC does not hold the account within its financial reporting system and it is reported only for presentation purposes.
Expenses incurred on behalf of Government are an offset to the gross expenses and are calculated from the INAC's bad debt expenses related to loans and interest receivable (assets held on behalf of government). When bad debt expenses increase, the expenses incurred on behalf of Government decrease. If the bad debt expenses decrease, the expenses incurred on behalf of Government increase. |
||
Direct Loans - in 2016-2017, there was a significant increase in the expense related to the provision for direct loans. The provision for direct loans issued to support negotiation for comprehensive lands claims increased after it was determined that the collectability of $91.2M of loans receivable was not reasonably assured. In 2015-2016, the expense for this item was $9.1M. | - 82,104 | 517% |
Guaranteed Loans - The bad debt expense related to guaranteed loans was lower than in 2015-2016 as a result of $6.7M of loans meeting the criteria for bad debt during 2015-2016. During 2016-2017, an additional $5.6M in loans were assessed as uncollectible and recorded as such, however this amount was lower than in the previous year. | 1,111 | -7% |
Total Explained | -80,993 | 510% |
Total Unexplained | 0 | 0% |
Part D – Revenues – Note 20 – Segmented Information (Unaudited)
As at March 31
(in thousands of dollars) | 2017 | 2016 | Year-Over-Year Variance | Explained | Unexplained | Reference | |
---|---|---|---|---|---|---|---|
$ | % | % | % | ||||
Revenues | |||||||
Resource royalties | 852 | 17,821 | (16,969) | -95% | -95% | 0% | D1 |
Norman Wells project profits | - | 10,471 | (10,471) | -100% | -100% | 0% | D2 |
Interest on loans | 5,952 | 3,829 | 2,123 | 55% | 56% | -1% | D3 |
Miscellaneous | 5,343 | 2,968 | 2,375 | 80% | |||
Leases and rentals | 977 | 1,445 | (468) | -32% | |||
Finance and administrative services | 2,264 | 2,448 | (184) | -8% | -8% | 0% | D4 |
Revenues earned on behalf of Government | (11,202) | (35,681) | 24,479 | -69% | -70% | 1% | D5 |
Total Revenues | 4,186 | 3,301 | 885 | 27% | |||
NOTE: Revenues earned on behalf of Government |
|||||||
All revenues, except "Finance and administrative services" and "Gain on sale of crown assets", are included in Revenues earned on behalf of Government. |
D 1 – Resource Royalties
(Financial Reporting Account 42311)
Fiscal Year 2016-2017 | 852 |
---|---|
Fiscal Year 2015-2016 | 17,821 |
Variance (+Increase / -Decrease) | -16,969 |
Percentage (+Increase / -Decrease) | -95% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The resource royalty decreased by $16.9M in oil and gas as a result of the Northwest Territories (NWT) devolution. | -16,969 | -95% |
Total Explained | -16,969 | -95% |
Total Unexplained | 0 | 0% |
D 2 – Norman Wells Project Profits
(Financial Reporting Account 42129)
Fiscal Year 2016-2017 | 0 |
---|---|
Fiscal Year 2015-2016 | 10,471 |
Variance (+Increase / -Decrease) | -10,471 |
Percentage (+Increase / -Decrease) | -100% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
The Norman Wells Project is not currently producing due to the decommissioning of Enbridge Line 21. No royalties are due from the project. | -10,471 | -100% |
Total Explained | -10,471 | -100% |
Total Unexplained | 0 | 0% |
D 3 – Interest on Loans
(Financial Reporting Account 42129)
Fiscal Year 2016-2017 | 5,952 |
---|---|
Fiscal Year 2015-2016 | 3,829 |
Variance (+Increase / -Decrease) | 2,123 |
Percentage (+Increase / -Decrease) | 55% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
INAC's interest revenue is obtained from direct loans and defaulted guaranteed loans. In fiscal year 2016-2017, the increase of interest revenue was mainly from defaulted guaranteed loan program and the explanation is as below. |
||
Defaulted guaranteed loans: Interest revenue increased significantly as compared to 2015-2016 due to a large correction that was done in 2015-16 which corrected an overstatement. |
2,178 | 57% |
Direct Loans: The interest on the Native Claimants loans program decreased by $414 K because of the ongoing settled claims repayment resulting in a reduction of the principal amount. Consequently, the interest charged on these loans decreases accordingly. In addition, the interest on loans issued to support First Nations participating in the British Columbia Treaty Commission increased by $359 K. This is because the one loan became payable in 2016 and began accruing interest. The total effect on interest revenue is a reduction of $55 K. |
-55 | -1% |
Total Explained | 2,123 | 56% |
Total Unexplained | 0 | -1% |
D 4 – Finance and administrative services
(Financial Reporting Account 42320)
Fiscal Year 2016-2017 | 2,264 |
---|---|
Fiscal Year 2015-2016 | 2,448 |
Variance (+Increase / -Decrease) | -184 |
Percentage (+Increase / -Decrease) | -8% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Information technology services: The decrease is a result of a decline in revenues received from the Public Health Agency of Canada and Health Canada related to services for the Grants and Contribution Information Management System. |
-252 | -10% |
Human resources management services: The increase of $67K is related to an increase in the number of demands for conflict resolution with Public Prosecution Services of Canada and an increase in the number of participants to the Aboriginal Leadership Development Initiative. |
67 | 3% |
Total Explained | -185 | -8% |
Total Unexplained | 1 | 0% |
D 5 – Revenues earned on behalf of Government
(Financial Reporting Account 42129, 42312, 42314, 42315, 42319, 42541, 42631, 42711, 42719, 42733, 42129, 42311, 42312, 42314, 42541, 42719, 42311)
Fiscal Year 2016-2017 | -11,202 |
---|---|
Fiscal Year 2015-2016 | -35,681 |
Variance (+Increase / -Decrease) | 24,479 |
Percentage (+Increase / -Decrease) | -69% |
Explanation of Major Variances | Variance $ | Variance % |
---|---|---|
Revenues earned on behalf of Government are a line item within the Statement of Operations as per the government reporting standards. Though maintaining accounting control, INAC has no authority regarding their disposition. Revenues earned on behalf of Government are an offset to the gross revenues and are reported only for presentation purposes. The majority of the variance related to Resource royalties and Norman Wells project profits. |
||
Resource royalties The decline in revenues for resource royalties is a result of the NWT devolution. As of April 2014, the government of Northwest Territories collected royalties on behalf of INAC. According to devolution agreement, INAC will not collect resource royalties in the future. |
17,269 | -48% |
Norman Wells project profits The revenue collected from Norman Wells project dropped to zero in 2016-2017 as a result of the decommissioning of the Enbridge pipeline. |
10,471 | - 29% |
Guarantee deposits The increase in the guarantee deposits was mainly because Nunavut region received a land security deposit with the amount of $2.49M. |
-2,488 | 7% |
Total Explained | 25,252 | -70% |
Total Unexplained | -773 | 1% |
Part E - Other
E 1 – Parliamentary Authorities – Budgetary Authorities Provided and Used
(2016-2017 INAC Financial Statement Note 3b)
Current Year Authorities Provided | 9,514,746 |
---|---|
Current Year Authorities Used | 9,132,505 |
Authorities Available for Future Years | 34,412 |
Lapsed Amount | 347,829 |
Percentage Lapsed | 4% |
Explanation of Lapsed Amount | Lapsed $ | Lapsed % |
---|---|---|
Funds deferred from 2016-17 to future years for various initiatives to be used for the same intended purposes (note some are still in the approval process). Major items include:
|
317,869 | 4% |
Budget Carryforwards
|
17,029 | 0% |
Remaining Balance
|
9,593 | 0% |
Subtotal | 347,369 | 4% |
Net Lapse * | 460 | 0% |
Notes: * The above information is current as of July 28, 2017. It is subject to change as the re-profile requests have not all been approved by the Department of Finance at this time. Should some of these requests be refused, the result could be a corresponding increase in the net lapse. |