Quarterly Financial Report: Quarter ended September 30, 2022

Table of contents

1.Introduction

This Quarterly Financial Report should be read in conjunction with the Main Estimates for fiscal year 2022-23 as well as the Supplementary Estimates (A) for fiscal year 2022-23. 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 (Table1) 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 2022–23 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.
  • 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 (G&C's) (Vote 10 and Statutory):
    • Vote 10: Amount approved for the fiscal year for the Department as Grants and Contributions (G&C's) transfer payments to recipients.
    • Statutory: Amount approved through an existing Act of Parliament.
  • 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.
  • 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.
  • 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.

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, 2022, and provides an explanation of variances in authorities available for use compared to the same period in the prior year.

CIRNAC's total budgetary authorities available for use at the end of the second quarter in 2022-23 is $7,350.9 million which is comprised of the Department’s 2022-23 Main Estimates of $5,807.6 million, Supplementary Estimates (A) of $1,487.6 million, as well as allotment adjustments of $55.7 million. The allotment adjustment of $55.7 million is composed of $40.0 million in Grants and Contributions that was granted through TB Vote 5, as well as the Operating and Capital Budget Carry Forwards of $15.7 million.

2.1.1 Highlights of changes in authorities available for use (2022-23 compared to 2021-22)

CIRNAC's total budgetary authorities available for use of $7,350.9 million at the end of the second quarter in 2022-23 is $1,577.2 million (27%) higher than the same period in 2021-22 (which was set to $5,773.7 million), and can be mainly attributed to the following:

  • An increase of $2,807.9 million in Grants and Contributions funding, which is mainly attributable to the following:
    • Land claim settlement with the Siksika Nation ($1,300.0 million);
    • Specific Claims Settlement Fund ($752.5 million);
    • Indigenous Infrastructure Project and Housing ($427.0 million);
    • Implementing Canada’s contribution to the National Action Plan: the Federal Pathway – Canada’s Response to Missing and Murdered Indigenous Women and Girls National Inquiry’s Final Report "Reclaiming Power and Place" ($96.5 million).

Partially offset by:

  • A decrease of $1,228.8 million in the Operating budget, mainly attributable to a decrease of $1,375.0 million in funding for the Federal Indian Day Schools Settlement Agreement (McLean).

2.2 Authorities used and actual expenditures

CIRNAC's year to date expenditures for the quarter ended September 30, 2022, was $4,471.7 million compared to $2,273.5 million last year for the same period. This represents an increase of $2,198.2 million (97%). This is illustrated in the graph below.

Comparison of Net Second Quarter Authorities to Date Used and Expended as of September 30, 2022, and September 30, 2021 (in thousands of dollars)
Text alternative for: Comparison of Net Second Quarter Authorities to date used and expended as of September 30, 2022, and September 30, 2021 (in thousands of dollars)
Fiscal Year Operating1 Capital Grants and contributions2 Total
FY 2022-23 1,103,735 60 3,367,889 4,471,684
FY 2021-22 920,064 197 1,353,269 2,273,530
Variance 183,671 -137 2,014,620 2,198,154
1The Operating authorities used include both voted authorities (vote 1) and statutory authorities related to operating expenditures.
2The Grants and Contributions authorities used includes both voted authorities (vote 10) and statutory authorities related to transfer payments.

In 2022-23, CIRNAC spent $1,103.7 million in Operating expenditures as compared to $920.0 million in 2021-22, resulting an increase of $183.7 million that is mainly due to the net increase in payments made for the McLean ($100.0 million), Gottfriedson ($32.0 million) and Sixties Scoop ($19.0 million) class action settlements.

In 2022-23, CIRNAC spent $3,367.9 million in Grants and contributions compared to $1,353.3 million in 2021-22, for an increase of $2,014.6 million mainly due to:

  • $1,503.8 million increase in specific claims settlements (including a large-value settlement of $1,300.0 million to Siksika Nation and $128.0 million to Muskeg Nation)
  • $364.1 million increase in self-government agreement payments, mainly due to inflation and population adjustments;

3. Risks and Uncertainties

The Department has in place risk management processes and oversight mechanisms to identify, assess and address strategic and operational risks, including financial risks and those arising from the pandemic. Risk mitigation activities are in place or in development to protect the Department from exposure to these risks and the associated financial impacts. Internal controls are in place within the Department, and are subject to ongoing monitoring, to effectively manage financial risks.

A substantial portion of CIRNAC’s expenditures represent grants and contributions to Indigenous and northern recipients. CIRNAC receives services from Indigenous Services Canada under a shared services structure with respect to the accounting and payment processing of grants and contributions. Through its shared services, Indigenous Services Canada continues to conduct risk-based recipient and project audits under the applicable terms of funding agreements, as an opportunity to provide assurance on management practices and internal controls in place within funding recipients organizations.

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

In terms of changes in personnel this quarter, Serge Beaudoin departed his position as Assistant Deputy Minister, Northern Affairs Organization, effective July 18, 2022. Consequently, Wayne Walsh was appointed as Acting Assistant Deputy Minister for the Northern Affairs Organization effective June 13, 2022.

In addition, Garima Dwivedi was appointed as Acting Assistant Deputy Minister, Resolution and Partnerships from July 11, 2022 to December 19, 2022.

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 Canada

Date: _______________
City: Gatineau (Canada)

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

Date: _______________
City: Gatineau (Canada)

Table 1: Statement of Authorities (unaudited) for the quarter ended September 30, 2022 (in thousands of dollars)
  Fiscal year 2022-23 Fiscal year 2021-22
Total available for use for the year ending March 31, 2023 * Used during the quarter ended September 30, 2022 Year to date used at quarter-end 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
Vote 1 - Operating expenditures 1,281,594 240,697 470,632 2,514,200 390,541 906,250
Vote 5 - Capital expenditures 547 60 60 1,944 143 197
Vote 10 - Grants and contributions 6,034,857 1,053,342 3,362,688 3,226,939 434,226 1,348,205
Vote 25 - Debt Forgiveness 0 0 0 515 0 0
S - Budgetary statutory authorities - Operating Expenditures:
Contributions to employee benefit plans 27,742 6,226 12,452 23,960 5,760 11,521
Minister of Crown-Indigenous Relations – Salary and motor car allowance 93 23 46 91 22 44
Minister of Northern Affairs – Salary and motor car allowance 93 23 46 91 22 45
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 0 620,559 620,559 0 651 2,204
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 5,201 4,126 0 5,064
Total Budgetary Authorities 7,350,933 1,920,930 4,471,684 5,773,745 831,365 2,273,530
Non-Budgetary Authorities:
Loans to native claimants 25,903 994 994 25,903 920 1,254
Total Non-Budgetary Authorities 25,903 994 994 25,903 920 1,254
Total Authorities 7,376,836 1,921,924 4,472,678 5,799,648 832,285 2,274,784
*Including only Authorities available for use and granted by Parliament at quarter-end. Note: Due to rounding, figures may not add to totals shown.
Table 2: Departmental budgetary expenditures by Standard Object (unaudited) for the quarter ended September 30, 2022 (in thousands of dollars)
  Fiscal year 2022-23 Fiscal year 2021-22
Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended September 30, 2022 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended September 30, 2021 Year to date expended at quarter-end
1. Personnel 207,919 55,722 112,537 186,208 55,537 109,694
2. Transportation and communications 4,242 944 1,253 4,002 508 632
3. Information 6,203 115 124 5,597 862 1,382
4. Professional and special services 423,646 66,286 77,135 337,210 41,267 53,621
5. Rentals 9,525 3,739 3,953 4,524 2,307 2,370
6. Purchased repair and maintenance 2,350 38 57 1,322 146 165
7. Utilities, materials and supplies 1,704 144 197 1,571 158 221
8. Acquisition of land, buildings and works 204 7 7 268 40 40
9. Acquisition of machinery and equipment 343 116 187 1,676 35 122
10. Transfer payments 6,038,983 1,053,342 3,367,889 3,231,065 434,226 1,353,269
11. Public debt charges 0 0 0 0 0 0
12. Other subsidies and payments 688,881 740,477 908,345 2,033,368 303,160 758,895
Total gross budgetary expenditures 7,384,000 1,920,930 4,471,684 5,806,812 838,246 2,280,411
Less: Revenues netted against expenditures
Internal Services (33,067) 0 0 (33,067) (6,882) (6,882)
Total Revenues netted against expenditures (33,067) 0 0 (33,067) (6,882) (6,882)
Total net budgetary expenditures 7,350,933 1,920,930 4,471,684 5,773,745 831,364 2,273,530
Note: Due to rounding, figures may not add to totals shown.

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