Quarterly Financial Report: Quarter ended December 31, 2020

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.

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 2020-21 Main Estimates were the first Main Estimates for Crown-Indigenous Relations and Northern Affairs Canada, therefore no comparison from previous fiscal year is available. The department's Main Estimates were established at $4,911 million including voted and statutory expenditures.

Appropriation Act No. 3, 2020–21 provided 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 the department a total of $879.5 million comprised of:

• $741.2 million in Vote 1 Operating expenditures for funding for the Federal Indian Day Schools and Sixties Scoop;
• $23.4 million in Vote 10 Grants and contributions for funding measures to support a better future for Canada's North, funding to respond to the National Inquiry into Missing and Murdered Indigenous Women and Girls' Final report and to continue Indigenous Consultation and Capacity Support Activities; and
• $114.9 million in Statutory funding under the Public Health Events of National Concern Payments Act for urgent health care and social support needs in the territories in response to COVID-19, to support temporary enhancements to Nutrition North Canada and to enable the continuation of northern air services supporting essential resupply and medical services in the North.

In the second quarter, the department's overall authorities increased by $21.0 million. This increase was comprised of:

• $19.5 million in Vote 1 and $1.5 million in Vote 5 from the Department Operating and Capital budget carry forward, a Treasury Board centrally managed vote that permits departments to bring forward eligible lapsed funding from a previous fiscal year to the next.

Since the last quarter, Appropriation Act No. 5, 2020–21 provided supply for Supplementary Estimates (B) and was approved through a Warrant of the Governor General pursuant to Order in Council P.C. 2020-1081, dated December 14, 2020. These Supplementary Estimates (B) granted the department a total of $936 million which is comprised of $138 million of funding for new initiatives; reprofiles totaling $790 million; and $8 million of net transfers with other government departments.

The net increase of $936 million is mainly comprised of:

• $109.9 million in Vote 1 Operating expenditures, including funding for a litigation settlement; reprofile funding for the Federal Contaminated Sites Action Plan (North); funding to support Recognition of Indigenous Rights and Self-Determination Tables; and reprofile funding for the Sixties Scoop settlement; and
• $822.2 million in Vote 10 Grants and contributions, including reprofile funding for Specific Claims Settlement Fund; funding to support Recognition of Indigenous Rights and Self-Determination Tables; funding for Interest Payment Relief for First Nation Loans with the First Nations Finance Authority; reprofile funding for New Fiscal Policy Reforms co-developed by Canada and Self-Governing Indigenous governments.

In addition to the Supplementary Estimates (B), the Department received a total amount of $2,800 for compensation-related adjustments due to the late implementation of the collective agreements.

As well, in December 2020, the full supply for Main Estimates 2020-21 was approved bringing the total department authorities to date to $6,747.8 million.

Departmental Budgetary Expenditures were $2,980.3 million for the quarter ended December 31, 2020, which represent 44% of the total authorities to date.

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, capacity challenges in internal services and ensuring oversight during a pandemic 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. These risks are 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.

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

During this quarter there was a change in personnel, namely the appointment of Mary-Luisa Kapelus to the position of Senior Assistant Deputy Minister, Policy and Strategic Direction, effective November 30, 2020. There have been no significant changes in operations and programs.

5. Approval by Senior Officials

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