Quarterly Financial Report ending December 31, 2017

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 Supplementary Estimates (B).

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, Indigenous 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 Departmental Plan, the Main Estimates, and in the Supplementary Estimates (B).

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 and Supplementary Estimates (B) for the 2017-2018 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 2017-2018, the Main Estimates were tabled on February 23, 2017. The Supplementary Estimates (B) were tabled on December 11, 2017.

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 2017-18 Departmental Plan. The risk profile identifies the following key risk areas:

• Limited Economic Diversification – A high degree of reliance on the mining and oil/gas sector results in an increased vulnerability to the cyclical changes in commodity prices.
• Infrastructure deficit – Significant capital and operating costs resulting from a core infrastructure deficit, including connectivity, constrain opportunities for northern economic development, impacting the effectiveness of CanNor's programming.
• Labour Market – Competition within the limited labour pool in the North carries risks for recruitment and retention and impacts the ability of businesses to grow and diversify.
• Short-term Program Renewals – 66% of contribution funding sunsets on March 31, 2018. Short-term (2 year) funding cycles limits CanNor's capacity to make long-term investments.

  Approved by:

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  Dr. Janet King
  President

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  Ross Miller CPA, CMA
  Chief Financial Officer

Statement of Authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)