Department of Finance of Canada

11/26/2021 | Press release | Distributed by Public on 11/26/2021 10:34

Quarterly Financial Report for the quarter ended September 30, 2021 (unaudited)

Table of contents

1. Introduction

2. Highlights of Fiscal Quarter Results

3. Risks and Uncertainties

4. Significant Changes in Relation to Operations, Personnel and Programs

5. Approval by Senior Officials

1. Introduction

This Quarterly Financial Report 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 Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Reports. This Quarterly Financial Report should be read in conjunction with the 2021-22 Main Estimates and Supplementary Estimates of the Department of Finance Canada.

This Quarterly Financial Report has not been subject to an external audit or review.

1.1 Authority, Mandate and Program Activities

The Department of Finance Canada (the department) helps the Government of Canada develop and implement strong and sustainable economic, fiscal, tax, social, security, international and financial sector policies and programs. It plays an important central agency role, working with other departments to ensure that the Government's agenda is carried out and that ministers are supported with high-quality analysis and advice.

The department's responsibilities include the following:

  • Preparing the federal budget and the fall economic and fiscal update;
  • Preparing the Annual Financial Report of the Government of Canada and the Public Accounts of Canada, in cooperation with the Treasury Board of Canada Secretariat and the Receiver General for Canada;
  • Developing tax and tariff policy and legislation;
  • Managing federal borrowing on financial markets;
  • Designing and administering major transfers of federal funds to the provinces and territories;
  • Developing financial sector policy and legislation; and
  • Representing Canada in various international financial institutions and groups.

The description of the program activities for the Department can be found in Part II of the Main Estimates and the Departmental Plan.

1.2 Basis of Presentation

This Quarterly Financial Report has been prepared by management using an expenditure basis of accounting, and a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. 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 both fiscal years (2020-21 and 2021-22) as well as transfers from Treasury Board central votes that are approved by the end of the quarter.

The authority of Parliament is required before monies 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 accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.3 Department of Finance Canada - Financial Structure

The department has three major categories of expenditure authority. These categories are:

  • Voted budgetary authorities: Included in this category are the operational expenditures of the department itself as well as authorized expenditures under grant and contribution programs. These expenditures must be specifically approved by Parliament through an appropriation act.
  • Statutory budgetary authorities: Included in this category are expenditure authorities that are granted through an existing Act of Parliament. Further parliamentary approval is not required for expenditures related to statutory amounts and it is within the normal course of business that statutory expenditures may in some cases, exceed planned spending estimates.
  • Non-budgetary authorities: Included in this category are disbursements made by the department that do not have a direct budgetary impact to the Government. This includes the value of loans initially disbursed to Crown corporations participating in the Crown Borrowing Program.

2. Highlights of Fiscal Quarter Results

The following section highlights the financial results and provides explanations for the fiscal quarter ended September 30, 2021 as compared to the same period last year.

2021-22 Authorities as at September 30, 2021 2020-21 Authorities as at September 30, 2020 Variance in Authorities Expenditures during the quarter ended September 30, 2021 Expenditures during the quarter ended September 30, 2020 Variance in Expenditures
Budgetary Authorities
Vote 1 - Program Expenditures 118,896 101,752 17,144 28,548 43,855 (15,307)
Statutory Authorities
Major transfers to other levels of government 83,153,228 77,543,843 5,609,385 24,692,877 33,608,010 (8,915,133)
Interest on Unmatured Debt and Interest on Other Liabilities 21,306,000 22,836,000 (1,530,000) 5,851,023 5,704,952 146,071
Direct program expenses 4,541,478 569,749 3,971,729 33,684 223,527 (189,843)
Total Statutory Authorities 109,000,706 100,949,592 8,051,114 30,577,584 39,536,489 (8,958,905)
Total Budgetary Authorities 109,119,602 101,051,344 8,068,258 30,606,132 39,580,344 (8,974,212)
Non-Budgetary Authorities 273,400 250,200 23,200 13,459,537 8,974,574 4,484,963
Total Authorities 109,393,002 101,301,544 8,091,458 44,065,669 48,554,918 (4,489,249)

2.1 Statement of Authorities

As per Table 1 - Statement of Authorities (unaudited), the total authorities available for use increased by $8,091.5 million, as compared to the same quarter in 2020-21, from $101,301.5 million to $109,393.0 million.

The following table provides a detailed explanation of the changes in the authorities available for use:

Budgetary Authorities Change (thousands of dollars)
Vote 1 - Program Expenditures
Increase due to full supply of the 2021-22 Main Estimates funding being received in 2021-22, whereas in 2020-21, only partial supply (75 percent) was received as a result of limited Parliamentary sessions to study supply due to the COVID-19 pandemic. 26,368
Funding in 2020-21 for a one-time ex gratia payment to Saskatchewan related to the Fiscal Stabilization program. (18,584)
Funding in 2021-22 for Government Advertising Programs. 5,000
Increases in authorities mostly due to collective agreements and new initiatives to address natural disaster protection gaps and to develop options for a secure financial data framework. 4,360
Sub-total Vote 1 - Program Expenditures 17,144
Statutory Authorities
Increase in major transfers to other levels of government largely due to measures implemented for the government's legislated growth for the Canada Health Transfer, payments to the provinces and territories in respect of Canada's COVID-19 Immunization Plan, and COVID-19 payments related to the Canada Health Transfer offset by a decrease in one-time payments to the province of Alberta, Saskatchewan and British Columbia to clean up inactive oil and gas wells. 5,609,385
Decrease in interest on unmatured debt and interest on other liabilities primarily due to the downward revision of forecasted short-term and long-term interest rates by private sector economists. (1,530,000)
Increase in direct program expenses mostly due to an increase in authorities related to planned payments to the Canada Infrastructure Bank. 3,971,729
Sub-total Statutory Authorities 8,051,114
Total Budgetary Authorities 8,068,258
Non-Budgetary Authorities
Increase in non-budgetary authorities mostly due to an increase in authorities for payments to the International Finance Corporation for the purchase of shares offset by a decrease in authorities related to a one-time payment to Alberta's Orphan Well Association in 2020-21. 23,200
Total Non-Budgetary Authorities 23,200
Total Authorities 8,091,458

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

As per Table 2 - Departmental budgetary expenditures by Standard Object (unaudited), the total net budgetary expenditures in the second quarter of 2021-22 decreased by $8,974.2 million, as compared to the same quarter in 2020-21 largely due to the following:

  • Expenditures related to Transfer payments decreased by $8,915.0 million over this period, mainly due to the previous year's COVID-19 related payments to the provinces and territories to support wage increases for low-income essential workers, Canada's Safe Restart and Safe Return to Class, and one-time payment to clean up inactive oil and gas wells;
  • Expenditures related to Other subsidies and payments, decreased by $197.0 million mostly due to a decrease in the revaluation of International Monetary Fund related accounts, and less payments to the Canada Infrastructure Bank as compared to the same quarter of the previous year;
  • Expenditures related to Information decreased by $8.6 million primarily as a result of payments in the previous year for advertising campaigns related to the COVID-19 Public Health Events of National Concern; and offset by
  • Expenditures related to Public debt charges, increased by $146.1 million primarily due to Consumer Price Index adjustments on Real Return Bonds.

2.3 Non-Budgetary Expenditures

Total net non-budgetary expenditures in the second quarter of 2021-22 increased by $4,485.0 million, as compared to the same quarter in 2020-21. This is largely due to an increase in the value of loans disbursed to Crown corporations participating in the Crown Borrowing Program, resulting from an increase in business requirements of the participating entities. The increase is also a result of share purchases made in the Canada Enterprise Emergency Funding Corporation to provide a source of funds for the Large Employer Emergency Financing Facility as a result of the COVID-19 pandemic.

3. Risks and Uncertainties

The department's Corporate Risk Profile provides a snapshot of the department's key corporate risks. The department monitors its corporate risks and associated risk responses to identify areas of opportunity and to reflect progress made in implementing mitigation strategies.

The impacts of the COVID-19 pandemic continue to be felt globally and the department has played a pivotal role in enabling the government to implement a broad span of support measures as part of Canada's economic response. As the pandemic continues to unfold, the department will monitor departmental risks associated with COVID-19 and ensure mitigation strategies are in place.

4. Significant Changes in Relation to Operations, Personnel and Programs

Andrew Marsland, Senior Assistant Deputy Minister, Tax Policy Branch, retired effective July 6, 2021.

Edward Poznanski, Assistant Deputy Minister, Corporate Services Branch, retired effective July 21, 2021.

Richard Botham, Assistant Deputy Minister, Economic Development and Corporate Finance Branch, retired effective August 7, 2021.

Leah Anderson vacated the position of Assistant Deputy Minister, Financial Sector Policy Branch, effective August 13, 2021. Isabelle Jacques, formerly Assistant Deputy Minister, Law Branch, was appointed to the position, effective August 23, 2021. Jenifer Aitken is currently the Acting Assistant Deputy Minister, Law Branch.

Effective August 16, 2021, the following appointments occurred:

  • Evelyn Dancey, Assistant Deputy Minister, Fiscal Policy Branch;
  • Kent Howie, Assistant Deputy Minister, Crown Investment and Asset Management Branch;
  • Miodrag Jovanovic, Assistant Deputy Minister, and Maude Lavoie, Associate Assistant Deputy Minister, Tax Policy Branch;
  • Michelle Kovacevic, Senior Assistant Deputy Minister, and Alison McDermott, Assistant Deputy Minister, Federal-Provincial Relations and Social Policy;
  • Rhys Mendes, Assistant Deputy Minister, Economic Policy Branch;
  • Glenn Purves, Assistant Deputy Minister, and Sam Millar, Associate Assistant Deputy Minister, Economic Development and Corporate Finance Branch; and
  • Janelle Wright, Assistant Deputy Minister, Corporate Services Branch.

5. Approval by Senior Officials

Approved by:

Michael Sabia, Deputy Minister
Ottawa, Canada
November 25, 2021

John Daley, CPA, CA, CMA, CIA
A/Chief Financial Officer
Ottawa, Canada
November 25, 2021

Fiscal year 2021-2022 Fiscal year 2020-2021
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 June 30, 2020 		Year to date used at
quarter-end
Budgetary Authorities
Voted authorities

Program expenditures

118,896 28,548 56,336 101,752 43,855 69,588
Total voted authorities 118,896 28,548 56,336 101,752 43,855 69,588
Statutory authorities
Major transfers to other levels of government

Canada Health Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act)

43,125,784 10,781,446 21,562,892 41,869,693 10,467,424 20,934,847

Canada Social Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act)

15,473,939 3,868,485 7,736,970 15,023,242 3,755,811 7,511,621

Payments to the provinces and territories in respect of Canada's COVID-19
immunization plan (Subsection 198(2) - Budget Implementation Act, 2021,
No. 1)

1,000,000 1,000,000 1,000,000 - - -

Payments related to Canada Health Transfer (Section 24.72 -
Federal-Provincial Fiscal Arrangements Act)

4,000,000 4,000,000 4,000,000 - - -

Fiscal arrangements

Fiscal Equalization (Part I - Federal-Provincial Fiscal Arrangements Act)

20,910,789 5,227,698 10,455,395 20,572,844 5,143,211 10,286,422

Territorial Financing (Part I.1 - Federal-Provincial Fiscal Arrangements Act)

4,379,879 893,495 2,592,888 4,180,225 852,766 2,474,693

Statutory Subsidies (Constitution Acts, 1867-1982, and Other Statutory Authorities)

42,639 20,082 21,319 42,644 20,084 21,322

Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964)

(1,043,982) - (521,991) (1,024,033) - (516,669)

Other major transfers

Additional Fiscal Equalization Offset Payment to Nova Scotia (Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act)

- 85,626 85,626 - - -

Alternative Payments for Standing Programs (Part VI - Federal-Provincial Fiscal Arrangements Act)

(4,735,820) (1,183,955) (2,367,910) (4,640,772) (1,162,397) (2,324,794)

Payment to the Province of Alberta pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up inactive oil and gas wells**

- - - 1,000,000 - -

Payment to the Province of Saskatchewan pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up orphan and inactive oil and gas wells

- - - 400,000 400,000 400,000

Payment to the Province of British Columbia pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up orphan and inactive oil and gas wells

- - - 120,000 120,000 120,000

Payment to the Government of Newfoundland and Labrador to support offshore energy sector workers

- - - - 320,000 320,000

Payments to the COVID-19 Essential Workers Support Fund (paragraph 60.2(2)b of the Financial Administration Act)

- - - - 414,385 2,539,000

Payments to the Safe Restart Agreement pursuant to paragraph 60.2(2)b of the Financial Administration Act

- - - - 12,276,726 12,276,726

Payments to the Safe Return to Class Fund pursuant to paragraph 60.2(2)b of the Financial Administration Act

- - - - 1,000,000 1,000,000
Total major transfers to other levels of government 83,153,228 24,692,877 44,565,189 77,543,843 33,608,010 55,043,168
Interest on Unmatured Debt and Interest on Other Liabilities

Interest on Unmatured Debt and Other Public Debt Costs

16,173,000 4,571,874 9,077,424 17,352,000 4,360,890 7,643,910

Interest on Other Liabilities

5,133,000 1,279,149 2,577,396 5,484,000 1,344,062 2,722,700
Total Interest on Unmatured Debt and Interest on Other Liabilities 21,306,000 5,851,023 11,654,820 22,836,000 5,704,952 10,366,610
Direct program expenses

Operating expenses

Purchase of Domestic Coinage

84,000 20,956 39,244 86,000 22,609 42,916

Contributions to Employee Benefit Plans

13,037 3,236 6,471 12,523 3,130 6,261

Minister of Finance - Salary and motor car allowance

91 30 45 89 15 37

Minister of Middle Class Prosperity and Associate Minister of Finance - Motor car allowance

2 - 1 2 - 1

Payments for government advertising programs pursuant to the Public Health Events of National Concern Payments Act

- - - 10,000 9,456 10,000

Transfer payments

Payment to the International Development Association (Bretton Woods and Related Agreements Act)

423,240 - - 423,240 - -

Debt payments on behalf of poor countries to International Organizations pursuant to section 18(1) of the Economic Recovery Act

53,132 - - 37,895 - -

Establishment of a Canadian Securities Regulation Regime and Canadian Regulatory Authority (Budget Implementation Act, 2009)

- - - - - 40,331

Other

Losses on Foreign Exchange

- (46,928) 1,839 - 181,776 291,330

Payment of Liabilities Previously Recorded as Revenue

- 2,701 4,427 - 3,856 11,351

Payment to the Canada Infrastructure Bank (Canada Infrastructure Bank Act)

3,967,976 53,689 114,427 - 2,685 17,185

Payment under subsection 12(2) of the Canadian Commercial Corporation Act to the Canadian Commercial Corporation

- - 13,000 - - -
Total direct program expenses 4,541,478 33,684 179,454 569,749 223,527 419,412
Total statutory authorities 109,000,706 30,577,584 56,399,463 100,949,592 39,536,489 65,829,190
Total budgetary authorities 109,119,602 30,606,132 56,455,799 101,051,344 39,580,344 65,898,778
Non-budgetary authorities

Purchase of initial shares pursuant to the Asian Infrastructure Investment Bank Agreement Act

49,000 - - 50,200 - -

Payment to Alberta's Orphan Well Association pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up orphan oil and gas wells

- - - 200,000 200,000 200,000

Advances to Crown corporations (Gross)

- 12,683,537 29,895,263 - 8,671,574 22,474,175

Advances pursuant to section 13(1) of the Financial Consumer Agency of Canada Act (Gross)

- 6,000 12,000 - 3,000 3,000

Payments under Bretton Woods and Related Agreements Act- International Organizations (Gross)

- - - - - 798,469

Payment to the Canada Enterprise Emergency Funding corporation to purchase shares pursuant to paragraph 60.2(2)(a) of the Financial Administration Act to support the Large Employer Emergency Financing Facility

- 770,000 2,670,000 - - -

Payment to the International Finance Corporation for purchase of shares
(Bretton Woods and Related Agreements Act, Subsection 8(2))

224,400 - - - 100,000 100,000
Total non-budgetary authorities 273,400 13,459,537 32,577,263 250,200 8,974,574 23,575,644
Total authorities 109,393,002 44,065,669 89,033,062 101,301,544 48,554,918 89,474,422
* Includes only Authorities available for use and granted by Parliament at quarter-end
** Subsequent to the 2020-21 Supplementary Estimates (A), funding for "Payment to the Province of Alberta pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up inactive oil and gas wells" was included as a voted appropriation in the 2020-21 Supplementary Estimates (B) as the payment was not disbursed before the legislative repeal date of September 30, 2020 for paragraph 60.2(2)b
Fiscal year 2021-2022 Fiscal year 2020-2021
Planned expenditures for the year
ending
March 31, 2022 		Expended during the
quarter ended
Septmeber 30, 2021 		Year to date
used at
quarter-end 		Planned expenditures for the year
ending
March 31, 2021 		Expended during the
quarter ended
Septmeber 30, 2020 		Year to date
used at
quarter-end
Expenditures:
Personnel 101,776 28,169 54,459 77,724 26,060 50,438
Transportation and communications 2,689 166 220 2,756 86 134
Information 6,694 1,151 1,865 11,706 9,779 10,641
Professional and special services 15,129 1,443 4,439 9,080 1,861 4,260
Rentals 3,081 173 837 1,596 105 553
Repair and maintenance 562 50 73 330 26 26
Utilities, materials and supplies 84,327 20,995 39,304 86,241 22,653 42,972
Acquisition of land, buildings and works - 49 49 - - -
Acquisition of machinery and equipment 1,864 235 313 2,417 166 582
Transfer payments 83,629,635 24,693,031 44,565,472 78,005,004 33,608,010 55,083,499
Public debt charges 21,306,000 5,851,023 11,654,820 22,836,000 5,704,952 10,366,610
Other subsidies and payments 3,967,995 9,647 133,948 18,603 206,646 339,063
Total gross budgetary expenditures 109,119,752 30,606,132 56,455,799 101,051,457 39,580,344 65,898,778
Less Revenues netted against expenditures 150 - - 113 - -
Total net budgetary expenditures 109,119,602 30,606,132 56,455,799 101,051,344 39,580,344 65,898,778