Public Safety Canada Quarterly Financial Report For the quarter ended September 30, 2020

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Public Safety Canada Quarterly Financial Report For the quarter ended September 30, 2020

by ahnationtalk on November 27, 202032 Views

1.0 Introduction

This quarterly financial report for the period ending September 30, 2020 has been prepared by management as required by section 65.1 of the Financial Administration Act, in the form and manner prescribed by Treasury Board.  The report should be read in conjunction with the Main Estimates and Supplementary Estimates (A).

This quarterly financial report has not been subject to an external audit or review.  However, it has been reviewed by the Departmental Audit Committee prior to approval by the Deputy Minister.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2020-21 Departmental Plan and the 2020-21 Main Estimates.

1.1 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities table includes the Department’s spending authorities granted by Parliament, or received from Treasury Board Central Votes, and those used by the Department consistent with the Main Estimates for the 2020-21 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet the information needs concerning the use of spending authorities.

The authority of Parliament is required before funds 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.

Public Safety Canada uses the full 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, as do the expenditures presented in this report.

2.0 Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

The following graph provides a comparison of the net budgetary authorities and expenditures as of September 30, 2020 and September 30, 2019 for the Department’s combined:

  • Vote 1: Operating Expenditures;
  • Vote 5 and Statutory: Grants and Contributions;
  • Statutory Votes:
    • Employee Benefit Plans; and
    • Minister’s Salary and Car Allowance.

Reduced supply of the 2020-21 Main Estimates

The department’s authorities as of September 30, 2020 reflect a reduced supply representing 9/12th of the 2020-21 Main Estimates for Votes 1 & 5 compared to the full supply for the same period in 2019-20. This is a result of parliament deferring the tabling of the 2020-21 Main Estimates in order to focus on funding high priority initiatives related to COVID-19.

Comparison of Budgetary Authorities, Year to Date Expenditures and Quarterly Expenditures as of September 30, 2020 and September 30, 2019

Note: (1) Public Safety Canada’s appropriations have decreased to $653.6M as of September 30, 2020.  (2) The amount of $40.7M included in the authorities column is for a statutory contribution in support of the readiness of the Canadian Red Cross for urgent relief efforts related to COVID-19 pursuant to the Public Health Events of National Concern Payments Act.

2.1 Significant Changes to Authorities

For the period ending September 30, 2020, the authorities provided to the Department include 9/12th of the 2020-21 Main Estimates, Supplementary Estimates (A), a TB Central Vote transfer and a Statutory Contribution.  The 2019-20 authorities for the same period included the full 2019-20 Main Estimates supply, Budget 2019 approved items, TB Central Vote transfers and a Statutory Grant.  The Statement of Authorities table presents a net decrease of $329.9 million (33.5 percent) compared to those of the same period of the previous year (from $983.5 million to $653.6 million).

Operating Expenditures authorities have decreased by $29.9 million (20.8 percent) (from $143.3 million to $113.4 million) primarily attributable to:

  • A reduced supply of the 2020‑21 Main Estimates.

Grants and Contributions (G&C) authorities have decreased by $299.9 million (36.4 percent) (from $824.2 million to $524.3 million) primarily attributable to:

  • A decrease of $199.6 million for the Disaster Financial Assistance Arrangements (DFAA) program due to a reprofile of funds from a previous fiscal year into 2019-20, a reduction in funding from a Budget 2019 item and the reduced supply of the 2020-21 Main Estimates;
  • A decrease of $65.0 million for a one-time grant to Shock Trauma Air Rescue Service (STARS) to fund the purchase of five new helicopters;
  • A decrease of $57.1 million relating to the expiry of the National Disaster Mitigation Program (Budget 2014) in 2019-20;
  • A decrease of $32.1 million for the First Nations Policing Program, mainly due to the reduced supply of the 2020-21 Main Estimates; and
  • A decrease of $25.0 million for a one-time endowment in 2019-20 to support Avalanche Canada.

These decreases are primarily offset by the following increases:

  • An increase of $59.3 million in new funding in support of the Canadian Red Cross’s urgent relief efforts related to COVID-19, floods and wildfires; and
  • An increase of $40.7 million for a one-time statutory contribution to the Canadian Red Cross pursuant to the Public Health Events of National Concern Payments Act.

Budgetary Statutory authorities have decreased by $110.2 thousand (0.7 percent) in 2020-21 primarily attributable to the Minister’s salary and car allowance adjustment related to the departure of Minister Goodale.

2.2 Significant Variances from Previous Year Expenditures

Year-to-Date Expenditures

For the period ending September 30, 2020, the Departmental Budgetary Expenditures by Standard Object table presents a net decrease of $68.8 million (23.8 percent) in Public Safety’s year-to-date (YTD) expenditures compared to the previous year (from $287.6 million to $218.8 million). This increase is primarily attributable to:

  • A decrease of $65.0 million for a one-time payment of a statutory grant to Shock Trauma Air Rescue Service (STARS);
  • A decrease of $25.0 million for a one-time payment to Avalanche Canada; and
  • A decrease of $10.1 million in payments for the First Nations Policing Program.

These decreases are primarily offset by the following increases:

  • An increase of $39.5 million for a one-time statutory contribution to the Canadian Red Cross pursuant to the Public Health Events of National Concern Payments Act; and
  • An increase of $9.7 million in payments for the Disaster Financial Assistance Arrangements (DFAA) program.

Second Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended September 30, 2020 have decreased by $112.8 million (57.7 percent) (from $195.6 million to $82.8 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

  • Personnel expenditures have increased by $0.6 million.
  • Other operating expenditures have decreased by $8.2 million primarily attributable to:
    • A decrease of $3.5 million due to ex-gratia payments in support of the surge in policing costs in Toronto and emergency management measures in Burnaby;
    • A decrease of $1.6 million in payments for professional and special services;
    • A decrease of $1.4 million in payments for the acquisition of machinery and equipment.
  • Transfer payments expenditures have decreased by $104.9 million (69.4 percent) primarily attributable to:
    • A decrease of $65.0 million for a one-time payment of a statutory grant to Shock Trauma Air Rescue Service (STARS);
    • A decrease of $25.0 million for a one-time payment to Avalanche Canada; and
    • A decrease of $17.5 million in payments for the First Nations Policing Program.

These decreases are primarily offset by the following increase:

    • An increase of $9.7 million in payments for the Disaster Financial Assistance Arrangements (DFAA) program.

3.0 Risks and Uncertainty

COVID-19

At the onset of the COVID-19 outbreak, with the majority of its employees transitioning to working remotely, Public Safety Canada (PS) turned its focus to supporting critical services. These disruptive but understandable changes have affected how the department delivers its services, and how quickly it delivers them. Interim measures have been taken to help ensure the Department can continue to deliver on its mandate. While the majority of PS employees are currently working from home, employees have demonstrated resiliency and adaptability as they continue to perform their regular work functions.  The department also established a Pandemic Management Committee to ensure proper actions are taken and communicated across the department to ensure staff remain well supported and provided with needed guidance and as the situation continues to evolve.

Disaster Financial Assistance Arrangements

The Disaster Financial Assistance Arrangements (DFAA) contribution program presents a greater level of uncertainty than other PS grants and contributions programs given that it represents a significant portion of the PS budget and that it is subject to unforeseen events. The DFAA contribution program was established in 1970 to provide a consistent and equitable mechanism for federal sharing of provincial and territorial costs for natural disaster response and recovery where such costs would place an undue burden on a provincial or territorial economy.

There are currently 58 natural disasters for which Orders-in-Council have been approved, authorizing the provision of federal financial assistance under the DFAA, and for which final payments have not yet been made. Public Safety’s total outstanding share of liability under the DFAA in regards to these 58 events is $2.68 billion, the majority of which is expected to be paid out over the next five years.

DFAA liability has increased by $40 million from $2.64 billion in the first quarter of 2020-21 to $2.68 billion in the second quarter of 2020-21. Variations in the DFAA liability are mainly attributable to:

  • Changes for newly approved Orders in Council, which authorize funding related to recent natural disasters for which Provinces and Territories require federal sharing of costs; and
  • Changes for payments issued under the existing obligation.

The following are the most significant events within Public Safety Canada’s DFAA liability:

  • Alberta 2013 June Flood ($600 million);
  • Manitoba 2011 Spring Flood ($412 million);
  • British Columbia 2017 July Wildfires ($213 million);
  • Quebec 2019 Spring Flood ($178 million); and
  • Quebec 2017 Spring Flood ($152 million).

Updates to the DFAA liability in result to changes in the estimates of the existing natural disasters are completed and approved twice a year with the last one having been conducted in Winter 2019-20 and reflected in the June 30, 2020 Quarterly Financial Report. The next semi-annual updates will be available and presented in the December 31, 2020 Quarterly Financial Report.

Phoenix Pay Modernization Project

In April 2016, PS moved to the new Phoenix federal public service pay system. In transitioning to the new pay system, large backlogs and delays at the centralized Pay Centre have led to a significant increase in pay-related issues reported by employees.

To support employees at highest risk, the Department continues to work on a range of issues that falls within the department’s scope of control to support employees who are experiencing difficulties with their pay, including: providing emergency salary advances, analyzing and resolving integration issues between the department’s Human Resource Management System and the Phoenix pay system. Issues affecting PS employees and the measures the Department is able to take to help mitigate them have been discussed with the unions at local and national level management consultation committees. At these meetings, union representatives have been engaged to ensure that employees’ perspectives are shared with Management.

The Department is closely monitoring pay transactions to identify and address pay issues in a timely manner, continues to apply mitigation measures which were implemented in 2016, and is currently assessing the design and operating effectiveness of key payroll controls.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

On October 13, 2020, the Deputy Minister of Public Safety announced the departure of Patrick Tanguy, Senior Assistant Deputy Minister of the Emergency Management and Programs Branch. Todd Cain will provide leadership to Emergency Management and Programs Branch in his continuing role as the acting Assistant Deputy Minister.

5.0 Approval by Senior Officials

Approved as required by the Policy on Financial Resource Management, Information and Reporting:

Rob Stewart
Deputy Minister
Public Safety Canada
Ottawa (Canada)
Date: November 26, 2020

Patrick Amyot, CPA, CMA
Chief Financial Officer
Public Safety Canada
Ottawa (Canada)
Date: November 23, 2020

6.0 Statement of Authorities (unaudited)

Fiscal year 2020-21 (in dollars)
Total available for use for the year ending March 31, 2021 (1) Used during the quarter ended September 30, 2020 Year to date used at quarter-end
Vote 1 – Net Operating Expenditures 113,439,552 32,662,540 64,685,809
Vote 5 & Statutory- Grants and Contributions 524,311,796 46,187,336 146,177,924
Employee Benefit Plans (EBP) 15,763,245 3,940,811 7,881,622
Minister’s Salary and Motor Car Allowance 89,300 22,300 44,600
TOTAL AUTHORITIES 653,603,893 82,812,987 218,789,955
(1) Includes only authorities available for use and granted by Parliament at quarter end.
Fiscal year 2019-20 (in dollars)
Total available for use for the year ended March 31, 2020 (1) Used during the quarter ended September 30, 2019 Year to date used at quarter-end
Vote 1 – Net Operating Expenditures 143,293,915 40,646,692 72,795,691
Vote 5 – Grants and Contributions 824,205,353 151,124,707 207,206,568
Employee Benefit Plans (EBP) 15,787,393 3,757,718 7,515,436
Minister’s Salary and Motor Car Allowance 175,400 43,750 87,500
TOTAL AUTHORITIES 983,462,061 195,572,867 287,605,195
(1) Includes only authorities available for use and granted by Parliament at quarter end.

7.0 Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2020-21 (in dollars)
Planned expenditures for the year ending March 31, 2021 (1) Expended during the quarter ended September 30, 2020 Year to date used at quarter-end
Expenditures:
Personnel 95,405,719 31,167,914 63,494,763
Transportation and communications 3,301,082 51,587 76,221
Information 4,594,916 427,925 535,661
Professional and special services 17,184,694 3,970,682 7,377,304
Rentals 4,173,254 1,422,342 1,720,696
Repair and maintenance 2,302,272 37,676 53,533
Utilities, material and supplies 490,540 87,786 126,143
Acquisition of land, buildings and works 46,661
Acquisition of machinery and equipment 4,044,911 108,510 336,323
Transfer payments 524,311,796 46,187,336 146,177,924
Public debt charges
Other subsidies and payments 448,048 18,829 501,912
Total gross budgetary expenditures 656,303,893 83,480,587 220,400,480
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 667,600 1,610,525
Total net budgetary expenditures 653,603,893 82,812,987 218,789,955
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.
Fiscal year 2019-20 (in dollars)
Planned expenditures for the year ended March 31, 2020 (1) Expended during the quarter ended September 30, 2019 Year to date used at quarter-end
Expenditures:
Personnel 118,637,053 30,555,414 63,006,777
Transportation and communications 3,241,836 779,938 1,440,717
Information 5,111,963 1,105,730 1,540,570
Professional and special services 18,785,985 5,539,135 7,752,348
Rentals 4,924,906 1,383,834 1,965,761
Repair and maintenance 952,037 166,214 173,858
Utilities, material and supplies 1,399,439 109,107 227,628
Acquisition of land, buildings and works 3,456,500
Acquisition of machinery and equipment 3,060,850 1,506,595 1,726,650
Transfer payments 824,205,353 151,124,707 207,206,568
Public debt charges
Other subsidies and payments 2,386,141 3,699,643 4,194,568
Total gross budgetary expenditures 986,162,061 195,970,317 289,235,445
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 397,450 1,630,250
Total net budgetary expenditures 983,462,061 195,572,867 287,605,195
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

NT5

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