Quarterly Financial Report: Quarter ended June 30, 2020

Table of contents

1. Introduction

This Quarterly Financial Report should be read in conjunction with the Main Estimates for fiscal year 2020-21. It has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board Policy on Financial Management.

This report has not been subject to an external audit or review.

1.1 Authority, Mandate and Departmental Results

Crown-Indigenous Relations and Northern Affairs Canada (CIRNAC) supports Indigenous Peoples (First Nations, Inuit and Métis) and Northerners in their efforts to:

  • Improve social well-being and economic prosperity;
  • Develop healthier, more sustainable communities; and
  • Participate more fully in Canada's political, social and economic development – to the benefit of all Canadians.

The responsibility for CIRNAC is shared between the Minister of Crown-Indigenous Relations and the Minister of Northern Affairs.

Further details on CIRNAC's authority, mandate and department results can be found in Part II of the Main Estimates and the Departmental Plan.

1.2 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department's spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates for the 2020-21 fiscal year. This quarterly 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.

The Department uses the full accrual accounting method to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

This section highlights the significant items that represent the authorities granted to date for fiscal year 2020-21.

The Department of Crown-Indigenous Relations and Northern Affairs Act established the new department effective July 15, 2019. The new department is responsible for the federal public administration formerly under the Department of Indian Affairs and Northern Development. The 2020-21 Main Estimates are the first Main Estimates for CIRNAC. Crown-Indigenous Relations and Northern Affairs Canada Main Estimates were established at $4,911 million including voted and statutory expenditures.

Appropriation Act No. 3, 2020–21 provides supply for Supplementary Estimates (A) and was approved through a Warrant of the Governor General pursuant to Order in Council P.C. 2020-510, dated June 26, 2020. These Supplementary Estimates (A) granted CIRNAC a total of $879.5 million which is comprised of:

With the inclusion of the supplementary estimates, Crown-Indigenous Relations and Northern Affairs Canada total spending authority is $4,830 million which represent the interim supply. Full supply will be available in December 2020.

3. Risks and Uncertainties

The Department has in place risk management processes to identify, assess and address strategic and operational risks. Risk mitigation activities are in place or in development to protect the Department from exposure to these risks and the associated financial impacts

The rapid pace of change being pursued by the Department, coupled with capacity challenges in internal services puts pressure on the Department's system of internal control. Important controls such as due diligence may therefore be weakened, leading to increased risk of fraud, malfeasance or inappropriate decision-making. This risk is currently being managed by some corporate frameworks (e.g., Public Sector and Crown-Indigenous Relations and Northern Affairs Canada [CIRNAC] codes for values and ethics, departmental fraud risk assessment process), program-specific management control frameworks and program oversight mechanisms and governance.

In addition, there is a risk that there are insufficient controls and coordination in place in the management of common funding agreements between CIRNAC and the Department of Indigenous Services Canada. To mitigate this risk, budget and expenditure trends, particularly for programs with common funding, are monitored closely on a regular basis including formal quarterly reviews that are presented to and discussed by senior management.

Crown-Indigenous Relations and Northern Affairs Canada has yet to receive $954.7 million in authority due to the delay in the supply of the Main Estimates. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall. The Department of Crown-Indigenous Relations and Northern Affairs is expected to receive full supply for the 2020-21 Main Estimates in December 2020.

4. Significant changes in relation to Operations, Personnel and Programs

Operations:

Engagement and negotiation activities have been impacted by COVID-19. Policy engagements have been slowed or delayed as a result of the inability to physically meet with Indigenous groups. The use of virtual meeting technologies has increased to ensure that the department continues to maintain relationships and advance files where possible. Similarly, with negotiations, while initially the pace slowed, tables have largely continued to advance through the use of virtual technologies. In some cases, provincial partners have also had to slow down their participation at tables due to COVID-19. It is anticipated that the intensity of participation in these policy engagements and negotiation tables will increase with the return to in-person meetings.

Personnel changes include:

Maryse Lavigne assumed the position of Director General, Human Resources and Workplace Services, effective March 2020.

5. Approval by Senior Officials

Approved, as required by the Treasury Board Policy on Financial Management:

_________________________
Annie Boudreau, CPA, CA
Chief Finances, Results and Delivery Officer, Crown-Indigenous Relations and Northern Affairs

Date: _______________
City: Gatineau (Canada)

_________________________
Daniel Watson
Deputy Minister, Crown-Indigenous Relations and Northern Affairs

Date: _______________
City: Gatineau (Canada)

Table 1: Statement of Authorities (unaudited)
Fiscal year 2020-21 (in thousands of dollars)
Total available for use for the year ending March 31, 2021 Used during the quarter ended June 30, 2020 Year to date used at quarter-end
Vote 1 - Operating expenditures 2,142,161 54,714 54,714
Vote 5 - Capital expenditures 201 0 0
Vote 10 - Grants and contributions 2,505,140 1,078,644 1,078,644
S - Budgetary statutory authorities - Operating Expenditures:
Contributions to employee benefit plans (EBP)
 26,099 6,525 6,525
Minister of Crown-Indigenous Relations—Salary and motor car allowance
 89 22 22
Minister of Northern Affairs—Salary and motor car allowance
 89 0 0
Payments to comprehensive claim beneficiaries in compensation for resource royalties
 1,866 0 0
Grassy Narrows and Islington Bands Mercury Disability Board
 15 0 0
Other
 0 0 0
S - Budgetary statutory authorities - Transfer Payments:
Grants to Aboriginal organizations designated to receive claim settlement payments pursuant to Comprehensive Land Claim Settlement Acts
 19,688 13,633 13,633
Indian Annuities Treaty payments
 0 0 0
Payments related to Public Health Events of National Concern and income support
 114,900 89,900 89,900
Total Budgetary Authorities 4,810,248 1,243,438 1,243,438
Non-Budgetary Authorities:
Loans to Indigenous claimants
 19,427 0 0
Loans to First Nations in British Columbia for the purpose of supporting their participation in the British Columbia Treaty Commission Process
 0 0 0
Total Non-Budgetary Authorities 19,427 0 0
Total Authorities 4,829,675 1,243,438 1,243,438
Table 2: Departmental budgetary expenditures by Standard Object (unaudited)
Fiscal Year 2020-21 (in thousands of dollars)
Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended June 30, 2020 Year to date used at quarter-end
Expenditures:
1 Personnel
 188,093 49,592 49,592
2 Transportation and communications
 16,972 205 205
3 Information
 5,225 475 475
4 Professional and special services
 237,195 3,437 3,437
5 Rentals
 10,520 36 36
6 Purchased repair and maintenance
 3,422 19 19
7 Utilities, materials and supplies
 3,509 90 90
8 Acquisition of land, buildings and works
 0 0 0
9 Acquisition of machinery and equipment
 201 46 46
10 Transfer payments
 2,639,728 1,182,176 1,182,176
11 Public debt charges
 0 0 0
12 Other subsidies and payments
 1,737,582 7,367 7,367
Total gross budgetary expenditures 4,842,447 1,243,443 1,243,443
Less Revenues netted against expenditures:
Internal Services
 (32,199) (5) (5)
Total Revenues netted against expenditures (32,199) (5) (5)
Total net budgetary expenditures 4,810,248 1,243,438 1,243,438

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