Quarterly Financial Report ending June 30, 2016

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.

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.

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 Agency consistent with the Main Estimates for the 2016-2017 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 2016-2017, the Main Estimates were tabled on February 23, 2016.

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

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 Corporate Risk Profile and risk assessment is published in its 2016-17 Report on Plans and Priorities.  The risk profile identifies the following key risk areas:

Operational Environment

• CanNor's ability to advance economic development in the North is affected by external factors, as described below, that are beyond the Agency's direct control. These factors can affect the economic climate and hinder the Agency from being able to fully advance on its strategic objectives.
• Limited operational capacity of northern stakeholders can also hamper their ability to fully utilize contribution funding. 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.
• External Factors - while each territory and region is unique, economic development throughout the North is challenging due to a sparse and widely distributed population, cyclical downturns due to a dependence on natural resource extraction, an infrastructure deficit, reliance on high energy costs and labour-market challenges.  

CanNor monitors expenditures and carries out business planning to ensure that financial risks are mitigated and that program delivery is optimized.  Progress is being made to increase the pace of project review and disbursements of contribution programs in order to make the most effective and efficient use of Agency resources.

Approved by:

Statement of Authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)