Quarterly Financial Report: Quarter ended September 30, 2021
Table of contents
1. Introduction
This Quarterly Financial Report should be read in conjunction with the Main Estimates for fiscal year 2021-22 as well as the Supplementary Estimates (A) for fiscal year 2021-22. 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) continues to renew the nation-to-nation, Inuit-Crown, government-to-government relationship between Canada and First Nations, Inuit and Métis; modernize Government of Canada structures to enable Indigenous Peoples to build capacity and support their vision of self-determination; and lead the Government of Canada's work in the North.
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 departmental 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 and Supplementary Estimates for the 2021–22 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.
1.3 General Descriptions
The following descriptions are referred to throughout the report:
- Authority: Approvals from Parliament to spend up to a specific amount.
- Operating (Vote 1 and Statutory):
- Vote 1: Amount approved for the fiscal year for the Department to spend on operating expenditures.
- Statutory: Amount approved through an existing Act of Parliament where additional annual approvals are not required by the Department to access on operating expenditures.
- Capital (Vote 5): Amount approved for the fiscal year for the Department to spend on capital purchases or for the construction of assets.
- Grants and Contributions (Vote 10 and Statutory):
- Vote 10: Amount approved for the fiscal year for the Department as Grants and Contributions transfer payments to recipients.
- Statutory: Amount approved through an existing Act of Parliament where additional annual approvals are not required by the Department to access G&C's funding for recipients.
- Debt Forgiveness (Vote 25): The forgiveness, as referred to in section 24.1 of the Financial Administration Act, of a debt due to Her Majesty in right of Canada.
- Government Contingencies (TB Vote 5): Temporary advances for urgent or unforeseen items that require funding in advance of the next Supplementary Estimates and related Supply bill.
- Operating and Capital Carry Forward: Eligible funds lapsed in the previous fiscal year brought forward to the following year.
- Standard Object (SO): Classification or coding of transactions to permit the reporting of information about the nature of transactions in the Estimates and Public Accounts.
2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results
2.1 Authorities available for use
This section highlights the financial results for the quarter and fiscal year-to date ended September 30, 2021, and provides explanation of variances in authorities available for use compared with the same period last year.
CIRNAC's current total authorities available for use at the end of the second quarter in 2021-22 is $5.8 billion which is comprised of the Department's 2021-22 Main Estimates of $4.7 billion, the 2021-22 Supplementary Estimates (A) of $996.9 million and allotment adjustment of $79.3 million. The most significant part of the allotment adjustment of $79.3 million in the second quarter was to access temporary contingency funding of $65.3 million towards Grants and Contributions.
2.1.1 Highlights of changes in authorities available for use (2021-22 compared to 2020-21)
CIRNAC's current total authorities available for use of $5.8 billion at the end of the second quarter in 2021-22 is $942.5 million higher than the same period in 2020-21 (which was set to $4.8 billion). This is illustrated in Graph 1 below, in the Table 1: Statement of Authorities and in the Table 2: Departmental Budgetary Expenditures by Standard Object.
Text alternative for Graph 1: Comparison of Total Net Budgetary Authorities Available for Use as of September 30, 2021, and September 30, 2020 (in thousands of dollars)
Fiscal Year | Operating1 | Capital | Grants and contributions2 | Debt Forgiveness | Total |
---|---|---|---|---|---|
2021-22 | 2,540,221 | 1,944 | 3,231,065 | 515 | 5,773,745 |
2020-21 | 2,189,804 | 1,738 | 2,639,728 | 0 | 4,831,270 |
Variance | 350,417 | 206 | 591,337 | 515 | 942,475 |
1 The Operating authorities includes both voted authorities (vote 1) and statutory authorities related to operating expenditures. 2 The Capital authorities includes both voted authorities (vote 10) and statutory authorities related to transfer payments. |
The overall increase of $942.5 million is mainly comprised of the following:
- Net increase of $350.4 million in Operating which is mainly attributable to:
- Full authorities granted for the Main Estimates in 2021-22 in comparison to only interim partial authorities granted for Main Estimates as of the comparative quarter of the preceding year (+$125.5 million);
- Increase funding for the Federal Indian Day Schools Settlement Agreement (McLean) (+$258.7 million);
- Increase funding for Northern Abandoned Mines Reclamation Program (+$50.5 million);
- Increase funding for Federal Contaminated Sites Action Plan (+$10.5 million);
- Partially offset by:
- Sunset of Indian Residential School Settlement Agreement (-$49.9 million); and
- Timing of out of court settlements (-$45.0 million).
- Net increase of $591.3 million in Grants and contributions which is mainly attributable to:
- Full authorities granted for the Main Estimates in 2021-22 in comparison to only partial authorities granted for Main Estimates as of the comparative quarter of the preceding year (+$827.0 million);
- Increase in temporary contingency funding for:
- Funding to implement the Cowessess First Nation's child and family services law, "Miyo Pimatisowin Act" (+$25.3 million);
- Funding for Indigenous Infrastructure Project (Budget 2021) (+$40.0 million).
- Increase funding to Housing and Infrastructure Needs of the Governments of Nunavut and the Northwest Territories (+$50.0 million);
- Increase in funding for Nutrition North Canada (+$30.9 million);
- Increase in funding on Self-Government Agreements (+$24.4 million);
- Increase funding to support Recognition of Indigenous Right and Self Determination Tables (+$18.2 million);
- Partially offset by:
- Decrease in funding profile for Specific Claims (-$219.0 million);
- Decrease of one-time funding for initiatives related to the COVID-19 pandemic (-$114.9 million);
- Decrease in funding for Metis Housing strategy (-$51.3 million);
- Net decrease in funding for Northern Abandoned Mines Reclamation Program (-$27.5 million); and
- Decrease in capital transfers for Comprehensive Land Claims (-$15.6 million).
- Creation of a new debt forgiveness vote for the Stoney Nakoda First Nation perpetual loan in the amount of $0.5 million.
2.2 Authorities used and actual expenditures
CIRNAC's total year to date expenditures for the quarter ended on September 30, 2021, was $2.3 billion as compared to $2.1 billion last year for the same period representing an increase of 0.2 billion. This is illustrated in Graph 2 below, in the Table 1: Statement of Authorities and in the Table 2: Departmental Budgetary Expenditures by Standard Object.
Text alternative for Graph 2: Comparison of Net Second Quarter Authorities to date used and expended as of September 30, 2021, and September 30, 2020 (in thousands of dollars)
Fiscal Year | Operating1 | Capital | Grants and contributions2 | Total |
---|---|---|---|---|
2021-22 | 920,064 | 197 | 1,353,269 | 2,273,530 |
2020-21 | 284,509 | 1,285 | 1,783,453 | 2,069,247 |
Variance | 635,555 | -1,088 | -430,184 | 204,283 |
1 The Operating authorities used includes both voted authorities (vote 1) and statutory authorities related to operating expenditures. 2 The Capital authorities used includes both voted authorities (vote 10) and statutory authorities related to transfer payments. |
In 2021-22, CIRNAC spent $920.1 million in Operating compared to $284.5 million in 2020-21, for an increase of $635.6 million mainly due to increased payments on the McLean Indian Day Schools class action (+$650 million).
In 2021-22, CIRNAC spent $1.4 billion in Grants and contributions as compared to $1.8 billion in 2020-21, resulting in a decrease of $430.2 million which is mainly due to:
- decrease of payments on specific claims settlements (-$326 million); and
- decrease of one-time funding for initiatives related to the COVID-19 pandemic (-$114.9 million).
3. Risks and Uncertainties
The Department has in place risk management processes to identify, assess and address strategic and operational risks, including financial risks. Risk mitigation activities are in place or in development to protect the Department from exposure to these risks and the associated financial impacts.
Ongoing internal controls are in place to manage financial risks and the risks to resiliency, including information technology security measures and action plans in response to fraud risk assessments. To supplement current mitigation measures, the Department is also reviewing its existing governance arrangements to identify opportunities to strengthen processes related to oversight, due diligence and direction-setting and redefine and reinforce leadership behaviours that are needed to help foster a more strategic, accountable and results-oriented culture at all levels of the organization.
COVID-19 had a significant disruptive effect on the Department in terms of its workforce, its work environment and its way of doing business. At the same time, the pandemic also presented opportunities to rethink and redesign departmental approaches based on the many lessons learned during the pandemic. For instance, the move to a virtual operation opened up new opportunities for engagement with partners in remote areas that could be expanded to foster better, more efficient partner relationships. The risks arising from the pandemic are currently being managed by the development of CIRNAC's Workplace of the Future Strategy. The Department continues to monitor the impacts of COVID-19 on departmental spending.
In addition, the Department continues to monitor the risk that there be insufficient controls and coordination in place in the management of common funding agreements between CIRNAC and the Department of Indigenous Services Canada. To mitigate any risks pertaining to common funding agreements with the Department of Indigenous Services Canada budget and expenditure trends 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 departure of Annie Boudreau from her position as Chief, Finances, Results and Delivery Officer, effective September 4, 2021. Consequently, Jean-François Talbot assumed the position of interim, Chief Finances, Results and Delivery Officer until the permanent appointment of Darlene Bess, effective October 12, 2021. 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:
____________________________
Darlene Bess, FCPA, FCA
Chief Finances, Results and Delivery Officer, Crown-Indigenous Relations and Northern Affairs
Date: _______________
City: Gatineau (Canada)
_________________________
Daniel Quan-Watson
Deputy Minister, Crown-Indigenous Relations and Northern Affairs
Date: _______________
City: Gatineau (Canada)
Fiscal year 2021-22 | Fiscal year 2020-21 | |||||
---|---|---|---|---|---|---|
Total available for use for the year ending March 31, 2022* | Used during the quarter ended September 30, 2021 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2021* | Used during the quarter ended September 30, 2020 | Year to date used at quarter-end | |
Vote 1 - Operating expenditures | 2,514,200 | 390,541 | 906,250 | 2,161,646 | 216,461 | 271,175 |
Vote 5 - Capital expenditures | 1,944 | 143 | 197 | 1,738 | 1,285 | 1,285 |
Vote 10 - Grants and contributions | 3,226,939 | 434,226 | 1,348,205 | 2,505,140 | 576,276 | 1.654,920 |
Vote 25 - Debt Forgiveness | 515 | 0 | 0 | 0 | 0 | 0 |
S - Budgetary statutory authorities - Operating Expenditures: | ||||||
Contributions to employee benefit plans | 23,960 | 5,760 | 11,521 | 26,099 | 6,525 | 13,050 |
Minister of Crown-Indigenous Relations – Salary and motor car allowance | 91 | 22 | 44 | 89 | 22 | 44 |
Minister of Northern Affairs – Salary and motor car allowance | 91 | 22 | 45 | 89 | 0 | 0 |
Payments to comprehensive claim beneficiaries in compensation for resource royalties | 1,866 | 0 | 0 | 1,866 | 0 | 0 |
Grassy Narrows and Islington Bands Mercury Disability Board | 15 | 0 | 0 | 15 | 0 | 0 |
Other | 0 | 651 | 2,204 | 0 | 240 | 240 |
S - Budgetary statutory authorities - Transfer Payments: | ||||||
Grants to Aboriginal organizations designated to receive claim settlement payments pursuant to Comprehensive Land Claim Settlement Acts | 4,126 | 0 | 5,064 | 19,688 | 0 | 13,633 |
Payments related to Public Health Events of National Concern and income support | 0 | 0 | 0 | 114,900 | 25,000 | 114,900 |
Total Budgetary Authorities | 5,773,745 | 831,365 | 2,273,530 | 4,831,270 | 825,809 | 2,069,247 |
Non-Budgetary Authorities: | ||||||
Loans to native claimants | 25,903 | 920 | 1,254 | 19,427 | 0 | 0 |
Total Non-Budgetary Authorities | 25,903 | 920 | 1,254 | 19,427 | 0 | 0 |
Total Authorities | 5,799,648 | 832,285 | 2,274,784 | 4,850,697 | 825,809 | 2,069,247 |
* Including only authorities available for use and granted by Parliament at quarter-end. Note: Due to rounding, figures may not add to totals shown. |
Fiscal year 2021-22 | Fiscal year 2020-21 | |||||
---|---|---|---|---|---|---|
Planned expenditures for the year ending March 31, 2022 | Expended during the quarter ended September 30, 2021 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2021 | Expended during the quarter ended September 30, 2020 | Year to date used at quarter-end | |
Expenditures: | ||||||
1. Personnel | 186,208 | 55,537 | 109,694 | 188,093 | 48,506 | 98,098 |
2. Transportation and communications | 4,002 | 508 | 632 | 18,167 | 324 | 529 |
3. Information | 5,597 | 862 | 1,382 | 5,593 | 670 | 1,145 |
4. Professional and special services | 337,210 | 41,267 | 53,621 | 253,890 | 59,681 | 63,118 |
5. Rentals | 4,524 | 2,307 | 2,370 | 11,260 | 97 | 133 |
6. Purchased repair and maintenance | 1,322 | 146 | 165 | 3,662 | 75 | 94 |
7. Utilities, materials and supplies | 1,571 | 158 | 221 | 3,756 | 119 | 209 |
8. Acquisition of land, buildings and works | 268 | 40 | 40 | 1,537 | 1,235 | 1,235 |
9. Acquisition of machinery and equipment | 1,676 | 35 | 122 | 201 | 181 | 227 |
10. Transfer payments | 3,231,065 | 434,226 | 1,353,269 | 2,639,728 | 601,277 | 1,783,453 |
11. Public debt charges | 0 | 0 | 0 | 0 | 0 | 0 |
12. Other subsidies and payments | 2,033,368 | 303,160 | 758,895 | 1,737,582 | 113,644 | 121,011 |
Total gross budgetary expenditures | 5,806,812 | 838,246 | 2,280,411 | 4,863,469 | 825,809 | 2,069,252 |
Less: Revenues netted against expenditures | ||||||
Internal Services | (33,067) | (6,882) | (6,882) | (32,199) | 0 | (5) |
Total Revenues netted against expenditures | (33,067) | (6,882) | (6,882) | (32,199) | 0 | (5) |
Total net budgetary expenditures | 5,773,745 | 831,364 | 2,273,530 | 4,831,270 | 825,809 | 2,069,247 |
Note: Due to rounding, figures may not add to totals shown. |