Quarterly Financial Report: For the quarter ended June 30, 2018
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, 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 and 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 2018-2019 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.
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 June 30, 2018, total authorities available for fiscal year 2018-2019 amounted to $29.9M, a $20.2M decrease from the same quarter last year.
This decrease in funding is primarily attributable to the sunsetting of $19.8 million for the Strategic Investments in Northern Economic Development Program which was renewed in Budget 2018, and $6.4 million for the Canada 150 Community Infrastructure Program. These decreases are partially offset by an increase of $4.9 million in funding for renewal of the Northern Adult Basic Education Program.
Statement of Departmental Budgetary Expenditures by Standard Object
Compared to the previous year, total expenditures for the quarter ending June 30, 2018 decreased by $1.3M ($5.1M to $3.8M).
Transfer payment expenditures decreased by $972K in the first quarter compared to the previous year. The change is primarily attributable to the sunsetting of the Strategic Investments in Northern Economic Development and Canada 150 Community Infrastructure Programs.
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.
CanNor’s Corporate Risk Profile and risk assessment is published in its 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.
Approved by:
Virginia Poter
A/President
Ross Miller CPA, CMA
Chief Financial Officer
Statement of Authorities (unaudited)
| Fiscal year 2018-2019 | Fiscal year 2017-2018 | |||||
|---|---|---|---|---|---|---|
| (In thousands of dollars) | Total available for use for the year ending March 31, 2019* |
Used during the quarter ended June 30, 2018 |
Year-to date used at quarter-end | Total available for use for the year ending March 31, 2018* |
Used during the quarter ended June 30, 2017 |
Year-to date used at quarter-end |
| Vote 1 - Net Operating | 11,976 | 2,748 | 2,748 | 13,200 | 2,981 | 2,981 |
| Vote 5 - Transfer payments | 16,650 | 759 | 759 | 35,500 | 1,731 | 1,731 |
| Budgetary statutory authorities | 1,233 | 308 | 308 | 1,381 | 345 | 345 |
| Total authorities | 29,860 | 3,815 | 3,815 | 50,081 | 5,057 | 5,057 |
| * includes only Authorities available for use and granted by Parliament at quarter-end. | ||||||
Departmental budgetary expenditures by Standard Object (unaudited)
| Fiscal year 2018-2019 | Fiscal year 2017-2018 | |||||
|---|---|---|---|---|---|---|
| (In thousands of dollars) | Planned expenditures for the year ending March 31, 2019 | Used during the quarter ended June 30, 2018 | Year-to-date used at quarter-end | Planned expenditures for the year ending March 31, 2018 | Used during the quarter ended June 30, 2017 | Year-to-date used at quarter-end |
| Expenditures: | ||||||
| Personnel | 9,346 | 2,765 | 2,765 | 10,182 | 2,761 | 2,761 |
| Transportation and communications | 527 | 135 | 135 | 600 | 136 | 136 |
| Information | 70 | 7 | 7 | 80 | 2 | 2 |
| Professional and special services | 2,283 | 129 | 129 | 2,600 | 252 | 252 |
| Rentals | 878 | 2 | 2 | 1,000 | 5 | 5 |
| Repair and maintenance | 35 | 2 | 2 | 40 | 36 | 36 |
| Utilities, materials and supplies | 53 | 12 | 12 | 60 | 4 | 4 |
| Acquisition of machinery and equipment | 9 | 0 | 0 | 10 | 129 | 129 |
| Transfer payments | 16,650 | 759 | 759 | 35,500 | 1,731 | 1,731 |
| Other subsidies and payments | 9 | 4 | 4 | 9 | 1 | 1 |
| Total budgetary expenditures | 29,860 | 3,815 | 3,815 | 50,081 | 5,057 | 5,057 |