Public Safety Canada Quarterly Financial Report for the quarter ended September 30, 2021

1.0 Introduction

This quarterly financial report for the period ending September 30, 2021 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 2021-22 Departmental Plan and the 2021-22 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 and the Supplementary Estimates (A) for the 2021-22 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, 2021 and September 30, 2020 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.

Comparison of Budgetary Authorities, Year to Date Expenditures and Quarterly Expenditures as of September 30, 2021 and September 30, 2020

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Note: (1) Public Safety Canada’s appropriations have increased to $1,146M as of September 30, 2021. (2) 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) and a Statutory Contribution.

2.1 Significant Changes to Authorities

For the period ending September 30, 2021, the authorities provided to the Department include Main Estimates, Supplementary Estimates (A) and TB Central Vote transfers.  The 2020-21 authorities for the same period included 9/12th of the 2020-21 Main Estimates, Supplementary Estimates (A), Statutory Contribution and TB Central Vote transfers. The Statement of Authorities table presents a net increase of $492.4 million (75.3 percent) compared to those of the same period of the previous year (from $653.6 million to $1,146.0 million).

Operating Expenditures authorities have increased by $87.0 million (76.7 percent) (from $113.4 million to $200.4 million), which is primarily attributable to:

• An increase of $36.0M compared to 2020-21 as a result of the reduced supply granted for the 2020-21 Main Estimates (9/12th) ($107.9 million of $143.9 million);
• An increase of $32.3 million for relocation and accommodations for the Government Operations Center (Budget 2016); and
• An increase of $8.8 million to develop a buy-back program for assault-style firearms and its associated national social marketing campaign.

Grants and Contributions (G&C) authorities have increased by $403.8 million (77.0 percent) (from $524.3 million to $928.2 million), which is primarily attributable to:

• An increase of $141.4M compared to 2020-21 as a result of the reduced supply granted for the 2020-21 Main Estimates (9/12th) ($424.3 million of $565.7 million);
• An increase of $240.8 million for the Disaster Financial Assistance Arrangements (DFAA) program based on forecasts from provinces and territories for expected disbursements under the DFAA for 2021-22; and
• An increase of $20.0 million for the renewal of the National Disaster Mitigation Program.

These increases are primarily offset by the following decrease:

• A decrease 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 increased by $1.6 million (9.9 percent) in 2021-22 primarily attributable to the Employee Benefits Plan associated with new salary funding received in Supplementary Estimates (A).

2.2 Significant Variances from Previous Year Expenditures

Year-to-Date Expenditures

For the period ending September 30, 2021, the Departmental Budgetary Expenditures by Standard Object table presents a net increase of $41.9 million (19.2 percent) in Public Safety’s year-to-date (YTD) expenditures compared to the previous year (from $218.8 million to $260.7 million). This increase is primarily attributable to:

• An increase of $35.6 million due to the timing of payments in support of the Canadian Red Cross’s urgent relief efforts related to COVID-19, floods and wildfires;
• An increase of $16.0 million due to the timing of payments relating to the First Nations Policing Program;
• An increase of $14.7 million due to the timing of payments for the Memorial Grant Program for First Responders; and
• An increase of $11.6 million due to the timing of payments for the Take Action Against Gun and Gang Violence initiative.

These increases primarily offset by the following decrease:

• A decrease of $39.5 million for a one-time statutory contribution in 2020-21 to the Canadian Red Cross pursuant to the Public Health Events of National Concern Payments Act.

Second Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended September 30, 2021 have increased by $73.7 million (89.0 percent) (from $82.8 million to $156.5 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

• Personnel expenditures have increased by $4.6 million, primarily attributable to an increase in salary funding received to support the department’s initiatives.
• Other operating expenditures have increased by $2.7 million, mainly attributable to the timing of payments for government advertising programs.
• Transfer payments expenditures have increased by $66.4 million (143.9 percent) attributable to:
  • An increase of $34.2 million due to the timing of payments in support of the Canadian Red Cross’s urgent relief efforts related to COVID-19, floods and wildfires;
  • An increase of $17.7 million due to the timing of payments for the Take Action Against Gun and Gang Violence initiative;
  • An increase of $10.8 million due to the timing of payments relating to the First Nations Policing Program;
  • An increase of $9.1 million due to the timing of payments for the Memorial Grant Program for First Responders; and
  • A net increase of $0.7 million for other expenditures variances of lesser value.

Offset by the following decrease:

• • A decrease of $6.1 million due to the timing of payments for the Disaster Financial Assistance Arrangements (DFAA) program.

3.0 Risks and Uncertainty

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 64 active natural disasters for which Orders in Council (OiC) 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 64 events is $2.60 billion, the majority of which is expected to be paid out over the next five years.

DFAA liability has increased by $47 million from $2.55 billion in the first quarter of 2021-22 to $2.60* billion in the second quarter of 2021-22. Variations in the DFAA liability are mainly attributable to:

• Changes for newly approved OiC, 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 ($361 million);
• Quebec 2019 Spring Flood ($216 million)
• British Columbia 2017 July Wildfires ($211 million); and
• Quebec 2017 Spring Flood ($155 million).

This decrease in funding is based on forecasts from provinces and territories for expected disbursements under the DFAA for 2021-22. 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 Summer 2021-22 and will be reflected in the December 31, 2021 Quarterly Financial Report .

* This figure does not include the semi-annual changes in the estimates for existing DFAA events. These updates will be reflected in the Q3 report.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

On July 8, 2021, the Deputy Minister announced changes in the Community Safety and Countering Crime Branch. To support advancement of the Cabinet decision to co-develop legislation that recognizes First Nations policing as an essential service, a Task Force will be launched and dedicated to advancing this work in partnership with Indigenous Services Canada. This task force is being led on an interim basis by ADM Patrick Tanguy.

On August 11, 2021, Monik Beauregard, the Associate Deputy Minister, announced her departure for retirement. Her replacement is anticipated to be announced by the end of the calendar year.

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 16, 2021

Patrick Amyot, CPA, CMA
Chief Financial Officer
Public Safety Canada
Ottawa (Canada)

Date: November 16, 2021

6.0 Statement of Authorities (unaudited)

Fiscal year 2021-22 (in dollars)

	Total available for use for the year ending March 31, 2022(1)	Used during the quarter ended September 30, 2021	Year to date used at quarter-end
Vote 1 – Net Operating Expenditures	200,426,284	39,876,527	75,396,597
Vote 5 – Grants and Contributions	928,170,860	112,631,491	177,337,300
Employee Benefit Plans (EBP)	17,323,729	3,982,357	7,964,715
Minister’s Salary and Motor Car Allowance	90,500	22,675	45,350
TOTAL AUTHORITIES	1,146,011,373	156,513,050	260,743,962

(1) Includes only authorities available for use and granted by Parliament at quarter end.

Fiscal year 2020-21 (in dollars)

	Total available for use for the year ended March 31, 2021(1)	Used during the quarter ended September 30, 2021	Year to date used at quarter-end
Vote 1 – Net Operating Expenditures	113,439,552	32,662,540	64,685,809
Vote 5 – 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.

7.0 Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2021-22 (in dollars)

	Planned expenditures for the year ending March 31, 2022(1)	Expended during the quarter ended September 30, 2021	Year to date used at quarter-end
Expenditures:
Personnel	136,960,020	35,781,605	69,347,192
Transportation and communications	3,593,085	84,663	123,902
Information	5,177,048	1,940,063	2,149,017
Professional and special services	27,884,982	4,689,827	9,564,057
Rentals	5,305,293	1,119,584	2,681,732
Repair and maintenance	1,894,754	95,654	100,495
Utilities, material and supplies	530,734	84,263	98,836
Acquisition of land, buildings and works (2)	32,412,671	–	–
Acquisition of machinery and equipment	3,854,187	251,122	284,210
Transfer payments	928,170,860	112,631,491	177,337,300
Public debt charges	–	–	–
Other subsidies and payments	2,927,739	490,778	818,356
Total gross budgetary expenditures	1,148,711,373	157,169,050	262,505,097
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services	2,700,000	656,000	1,761,135
Total net budgetary expenditures	1,146,011,373	156,513,050	260,743,962

(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

(2) Planned expenditures include capital funding for the relocation and accommodations for the Government Operations Center.

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.

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