Archived - Quarterly Financial Report - For the Quarter Ended December 31, 2014
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Introduction
This quarterly 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 Treasury Board. This quarterly report should be read in conjunction with the Main Estimates and Canada's Economic Action Plan 2012 (Budget 2012).
Contributing to the jobs and growth in Canada, the Canadian Northern Economic Development Agency (CanNor) works to develop a diversified, sustainable and dynamic economy across Canada's three territories. It does this by delivering economic development programs, undertaking policy and research, and by collaborating with and aligning the efforts of other federal departments, territorial governments, Aboriginal organizations, and industry. This is particularly the case in resource development through its Northern Projects Management Office (NPMO).
Further details on CanNor's authorities, mandate and program activities may be found in the Report on Plans and Priorities, and in the Main Estimates (Part II).
Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes CanNor's spending authorities granted by Parliament and those used by the Department consistent with the Main Estimates for the 2014-2015 fiscal year. The authority of Parliament is required before moneys 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.
As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. For 2014-2015, the Main Estimates were tabled on February 27, 2014.
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.
As part of the departmental performance reporting process, CanNor prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.
Highlights of fiscal quarter and fiscal year to date (YTD) results
Statement of Authorities
As at December 31, 2014, total authorities available for fiscal year 2014-2015 amounted to $52.5M, this amount is very close to the authorities to date for the same quarter of last year.
Even though the available authorities remained constant, significant funding changes occurred between 2013-14 and 2014-15.
For transfer payments, funding overall decreased by $2M. The sunsetting of the Community Infrastructure Improvement Fund program (CIIF -$3.2M) was partially offset by the first year of the Centre for Northern Innovation in Mining Initiative funding ($976K). The increased contribution funding in 2014-2015 for the renewed Economic Development Initiative (EDI – $80K) and the Northern Adult Basic Education program (NABEP - $98K) make up the difference.
Operating funds increased by $1.8M. This increase is mainly due to the funding for the Northern Projects Management Office (NPMO - $1.9M) which was included in the 2014-15 funding available for use at the end of the quarter but excluded from the 2013-14 funding available at December 31, 2013 because the funding was not approved until Supplementary Estimates C. Other minor adjustments also occurred.
Statement of Departmental Budgetary Expenditures by Standard Object
Compared to the previous year, total budgetary expenditures recorded in the quarter ending December 31, 2014 increased by $761K ($7.3M to $8M) and overall for the nine months decreased by $1.9M ($16.7M to $14.8M). The major changes as explained below are generally due to transfer payments.
Personnel costs in the third quarter and for the year to date are very close to the previous year. Even though salaries have remained relatively constant, it should be noted that the salaries related to NPMO operations have increased but are offset by reduced spending in other branches generally due to turnover.
Operating costs excluding salaries reflected an overall increase in the first nine months of $347K over the previous year. Most reporting objects are consistent between 2013-14 and 2014-15. The largest difference is in Other subsidies and payments which increased by $263K due to the one-time transition payments of $262K for implementing salary payments in arrears.
Transfer payments decreased overall by $2.2M in the first nine months because of timing differences in the disbursement of funds.
Risks and Uncertainties
Business development in the North needs to deal with the complexities related to remote communities, sparse population, dependence on natural resource extraction and associated challenges, such as underdeveloped infrastructure and labour market gaps.
Program delivery in the North therefore requires a strong focus on risk management and mitigation.
The Canadian Northern Economic Development Agency's updated Corporate Risk Profile and revised risk assessment is presented in the 2014-15 Report on Plans and Priorities. The revised risk profile is in direct response to the increasingly dynamic and unique environment in which the Agency operates and is reflective of the Agency's immediate reality.
CanNor has identified the following key risk areas in the 2014-2015 Report on Plans and Priorities:
- Alignment of CanNor Activities with Priorities and Needs
- Organizational alignment of activities, priorities and resources to meet service expectations and organizational priorities.
- Performance Measurement
- Efficient measurement and reporting of program effectiveness.
- Operational Environment
- Reflective of the challenges in delivering economic development programming and regulatory coordination services in the Arctic.
- Relationships with Clients, Partners and Stakeholders
- Establishment and maintenance of enriched relationships with key clients, partners, and stakeholders across governmental jurisdictions, private sector and aboriginal communities.
- Legal, Statutory and Land Claims
- Legislation, regulation, court decisions, major policy initiatives, constitutionally protected comprehensive land claim agreements, as well as First Nations government arrangements.
Further details on these risks and how CanNor plans to manage and mitigate these risks can be found in the Report on Plans and Priorities for the Agency.
CanNor monitors expenditures and carries out business planning to ensure that financial risks are mitigated and that program delivery is optimized. Efforts are underway to increase the pace of project review and disbursements of contribution programs in order to reduce the risk of year-end lapses.
Significant Changes in Relation to Operations, Personnel and Programs
Budget 2012 Implementation
The Canadian Northern Economic Development Agency has achieved total Budget 2012 savings of $2.4M last fiscal year by reducing and optimizing office space, implementing more efficient business processes, reducing program funding to respond to a degree of overlap and duplication, and more closely aligning resources to its core mandate.
New President
On July 2, 2014, Janet King started as the new President of the Canadian Northern Economic Development Agency.
Approved by:
Janet King
President
Ottawa, Canada
February 9, 2015
Yves Robineau CPA, CA
Chief Financial Officer
Statement of Authorities (unaudited)
| Fiscal year 2014-2015 | Fiscal year 2013-2014 | |||||
|---|---|---|---|---|---|---|
| (In thousands of dollars) | Total available for use for the year ending March 31, 2015* |
Used during the quarter ended December 31, 2014 |
Year-to date used at quarter-end | Total available for use for the year ending March 31, 2014* |
Used during the quarter ended December 31, 2013 |
Year-to date used at quarter-end |
| * Includes only Authorities available for use and granted by Parliament at quarter-end. | ||||||
| Vote 1 - Net Operating | 14,589 | 3,125 | 7,992 | 12,746 | 2,783 | 7,713 |
| Vote 5 - Transfer payments | 36,617 | 4,653 | 6,012 | 38,664 | 4,246 | 8,212 |
| Budgetary statutory authorities | 1,255 | 268 | 804 | 1,024 | 256 | 768 |
| Total Budgetary authorities | 52,461 | 8,046 | 14,808 | 52,434 | 7,285 | 16,693 |
| Non-budgetary authorities | 0 | 0 | 0 | 0 | 0 | 0 |
| Total authorities | 52,461 | 8,046 | 14,808 | 52,434 | 7,285 | 16,693 |
Departmental budgetary expenditures by Standard Object (unaudited)
| Fiscal year 2014-2015 | Fiscal year 2013-2014 | |||||
|---|---|---|---|---|---|---|
| (In thousands of dollars) | Planned expenditures for the year ending March 31, 2015 | Used during the quarter ended December 31, 2014 | Year-to-date used at quarter-end | Planned expenditures for the year ending March 31, 2014 | Used during the quarter ended December 31, 2013 | Year-to-date used at quarter-end |
| Expenditures: | ||||||
| Personnel | 9,344 | 2,336 | 7,128 | 7,550 | 2,422 | 7,159 |
| Transportation and communications | 1,918 | 239 | 365 | 1,900 | 152 | 354 |
| Information | 100 | 12 | 22 | 100 | 11 | 25 |
| Professional and special services | 2,550 | 408 | 587 | 2,400 | 340 | 559 |
| Rentals | 1,290 | 320 | 324 | 1,300 | 72 | 310 |
| Repair and maintenance | 145 | 64 | 79 | 70 | 14 | 22 |
| Utilities, materials and supplies | 150 | 15 | 26 | 150 | 32 | 50 |
| Acquisition of land, buildings and works | 0 | 0 | 0 | 100 | 0 | 0 |
| Acquisition of machinery and equipment | 260 | 0 | 3 | 100 | -5 | 1 |
| Transfer payments | 36,617 | 4,652 | 6,011 | 38,664 | 4,246 | 8,212 |
| Public Debt charges | 0 | 0 | 0 | 0 | 0 | 0 |
| Other subsidies and payments | 87 | 0 | 263 | 100 | 1 | 1 |
| Total budgetary expenditures | 52,461 | 8,046 | 14,808 | 52,434 | 7,285 | 16,693 |