Fisheries and Oceans Canada - Quarterly Financial Report for the quarter ended December 31, 2020
This quarterly financial report has been prepared as required by section 65.1 of the Financial Administration Act. The quarterly report should be read in conjunction with the current year’s Main Estimates, Supplementary Estimates (A), Supplementary Estimates (B) as well as Budget 2019.
This quarterly report has not been subject to an external audit or review.
Further details on Fisheries and Oceans Canada's authority, mandate and programs may be found in the Departmental Plan and the Main Estimates (Part II).
1.1 Basis of Presentation
This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities includes Fisheries and Oceans Canada's spending authorities granted by Parliament and those used by the Department consistent with the 2020-21 Main Estimates, Supplementary Estimates (A), Supplementary Estimates (B) and the Operating and Capital Budget Carry Forwards. 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.
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. With respect to Full Supply of our 2020-21 Main Estimates, receipt was granted on December 14, 2020.
The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
2. Highlights of the Fiscal Quarter and the Fiscal Year-to-Date (YTD) Results
The following section highlights the financial results and provides explanations for the fiscal quarter ended December 31, 2020 as compared to the same period last year.
|2019-20 Authorities as at December 31, 2019||2020-21 Authorities as at December 31, 2020||Variance in Authorities||Expenditures during the quarter ended December 31, 2019||Expenditures during the quarter ended December 31, 2020||Variance in Expenditures|
|Vote 1 – Net Operating expenditures||2,021,216||1,909,061||(112,155)||487,170||444,231||(42,939)|
|Vote 5 – Capital expenditures||1,136,166||1,022,423||(113,743)||190,390||190,382||(8)|
|Vote 10 – Grants and Contributions||376,070||995,164||619,094||37,724||48,087||10,363|
Statement of Voted and Statutory Authorities
Total budgetary authorities available for use increased in 2020-21 from those in 2019-20 by $859.5 million (23.2%). This is the result of an increase in Vote 10 authorities of $619.1 million, an increase in spending authority for forecasted statutory payments of $466.3 million, a decrease in Vote 1 authorities of $112.2 million, and a decrease in Vote 5 authorities of $113.7 million. Amounts displayed in this table represent the achievement of project milestones, planned changes to funding profiles, as well as variances due to the timing that authorities are granted by Parliament. As such, the negative amounts do not represent reductions to program spending.
|Explanation of Changes (2020-21 compared to 2019-20)||Change (thousands of dollars)|
|Vote 1 – Net Operating expenditures|
|Funding for the Big Bar Landslide||19,851|
|Incremental change in the Operating Budget Carry Forward||16,549|
|Funding related to the implementation of fisheries stock provisions and amendment to the Fisheries Act||6,605|
|Funding profile change for the review of major natural resources projects in support of the Major Projects Management Office Initiative||(5,973)|
|Funding profile change to implement a framework for Canadian Leadership on International Oceans||(8,341)|
|Funding profile change to procure icebreakers for the Canadian Coast Guard||(20,029)|
|Funding profile change for the 2018 Budget measure "Renewing Canada’s Network of Small Craft Harbours"||(45,674)|
|Funding profile change to advance reconciliation on Indigenous rights and fisheries issues||(74,811)|
|Other Departmental Adjustments||(332)|
|Sub-total Net Operating expenditures||(112,155)|
|Vote 5 – Capital expenditures|
|Funding for the Canadian Coast Guardʼs fleet recapitalization projects||93,272|
|Funding profile change to maintain mission-critical services to Canadians (e.g. fisheries management activities and maintenance of the fleet for continued safety and security of Canadian waters)||32,112|
|Funding for the Trans Mountain Expansion Project||23,425|
|Funding for the Canadian Coast Guard Commercial Icebreakers||4,968|
|Funding profile change for the succesful completion for federal infrastructure investments||(30,526)|
|Incremental change in the Capital Budget Carry Forward||(66,450)|
|Funding profile change for the 2018 Budget measure "Renewing Canada's Network of Small Craft Harbours"||(81,220)|
|Funding profile change for the Canadian Coast Guard's 2012 fleet renewal projects||(95,965)|
|Other Departmental Adjustments||6,641|
|Sub-total Capital expenditures||(113,743)|
|Vote 10 – Grants and Contributions|
|Funding to advance reconciliation on Indigenous rights and fisheries issues||553,724|
|Funding for the Fisheries Fund Programs||26,164|
|Funding for the Trans Mountain Expansion Project||24,530|
|Funding for the enhancement and expansion of the Indigenous Fisheries Program Suite||7,734|
|Funding for the Indigenous Habitat Participation Program||6,834|
|Funding for self-employed Fish Harvesters affected by COVID-19||6,495|
|Funding profile change for the 2018 Budget measure "Renewing Canada's Network of Small Craft Harbours"||(9,720)|
|Other Departmental Adjustments||3,333|
|Sub-total Grants and Contributions||619,094|
|Payments to support Canada’s fish harvesters pursuant to the Public Health Events of National Concern Payments Act||469,400|
|Other Departmental Adjustments||(3,072)|
|Sub-total Statutory Authorities||466,328|
Authorities Used Analysis
In the third quarter of 2020-21, total budgetary expenditures amounted to $729.8 million compared to $754.3 million reported in the same quarter of 2019-20, which represents a decrease of $24.5 million or 3.3%.
Authorities used in Vote 1, Net Operating expenditures, decreased by $42.9 million compared to the same quarter last year representing a reduction of approximately 8.8% between the two years. This decrease is primarily due to the costs related to the Offshore Fisheries Science Vessels as the project nears completion, as well as decreased travel costs due directly to restrictions from COVID-19. This is partially offset by an increase in costs associated with the rental of towing vessels.
Authorities used in Vote 10, Grants and Contributions expenditures, increased by $10.4 million compared to the same quarter last year representing a 27.5% increase between the two years. The variance is mainly attributed to an increase in spending in the Fisheries Fund programs and the Trans Mountain Expansion project, as well as to the timing of reconciliation agreement and other regular payments.
Statutory authorities used increased by $8.1 million compared to the same quarter last year, representing an increase of approximately 20.7%. The increase is mainly attributed to the Fish Harvester Benefit and Grant Program, enacted pursuant to the Public Health Events of National Concern Payments Act.
Statement of Departmental Budgetary Expenditures by Standard Object
The decrease of $24.5 million in total net budgetary expenditures in the third quarter of 2020-21 as compared to the same quarter in 2019-20 is primarily to the following:
Expenditures related to Transportation and Communication decreased by a total of $12.6 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. The decrease is mainly attributed to the travel restrictions and limitations imposed due to COVID-19.
Expenditures related to Professional and Special Services decreased by a total of $17.7 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. The decrease is primarily due to the costs related to the Offshore Fisheries Science Vessels as the project nears completion. This is offset by an increase in construction and engineering costs for the Offshore Oceanographic Science Vessel and the Arctic Offshore Patrol Ships as well as spending related to the Big Bar landslide project and costs for fisheries aerial surveillance.
Expenditures related to Rentals increased by a total of $5.2 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. This increase is mainly related to costs associated with the rental of towing vessels.
Expenditures related to Repair and Maintenance increased by a total of $3.5 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. The increase is mainly attributed to expenditures for the completion of scheduled refits on Canadian Coast Guard (CCG) vessels.
Expenditures related to Utilities, Materials, and Supplies decreased by a total of $7.6 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. This decrease is primarily related to lower spending on fuel resulting from decreased commodity prices as well as less consumption due to COVID-19.
Expenditures related to the Acquisition of Land, Buildings and Works decreased by a total of $7.7 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. This decrease is mainly attributed to the acquisition of new CCG Search and Rescue stations in 2019-20 as well as an expected decrease in work related to Small Craft Harbours.
Expenditures related to Acquisition of Machinery and Equipment decreased by a total of $4.1 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. The variance is mainly attributed to costs related to the refurbishment of CCG vessels as well as the purchase of a previously leased vessel in 2019-20. This is partially offset by an increase in spending on personal protective equipment related to COVID-19.
Expenditures related to Transfer Payments increased by a total of $10.4 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. The variance is mainly attributed to an increase in spending in the Fisheries Fund programs and the Trans Mountain Expansion project as well as to the timing of reconciliation agreement and other regular payments.
Expenditures related to Other Subsidies and Payments increased by a total of $8.5 million in the third quarter of 2020-21 when compared to the same quarter of 2019-20. The variance is mainly attributed to the processing of payments via Employment and Social Development Canada to support Canada’s Fish Harvesters Benefit Program as well as delays in payments due to COVID-19. This is offset by the allocation of the Interdepartmental Settlement (IS) with other government departments.
3. Risks and Uncertainties
Fisheries and Oceans Canada operates in a dynamic environment that is affected by a number of factors, including: increased northern development; expansion of navigable waters; environmental changes; climate change; severe weather events; demographics; technological advances; changing maritime safety and security demands; and global geopolitical and economic conditions. The Department continues to assess how it conducts its business, provides services and delivers its programs to meet client and stakeholder needs. The Department maintains a Departmental Risk Profile which assesses the most strategic corporate risks, which if not addressed, could impair DFO-CCG’s ability to deliver on its mandate and achieve results under the Department’s core responsibilities. Additional information regarding the Department’s key risk areas is presented in the 2020-21 Departmental Plan.
Certain risks would have financial impacts should they materialize, for example many factors affecting the timing of transfer payments lie outside the control of the Department and could require funds to be shifted to future years. To minimize these impacts, the Department continuously monitors its program funding and expenditures throughout the year.
The COVID-19 pandemic continues to present elements of risks and uncertainties. COVID-19 has affected DFO’s priorities and operations in the current fiscal year due to travel restrictions, quarantine periods and physical distancing requirements. COVID-19 has had an impact on departmental revenues and expenditures, and has added pressures on operations, including the delivery of new programs and management of existing programs. DFO continues to closely monitor the COVID-19 situation, as per the guidance and recommendations of public health officials and experts. As such, it is implementing specific measures and protocols to reduce the spread of the virus and to enable the Department to conduct its operations in the pandemic environment. The Department is committed to delivering on any core commitments that may have been delayed or deferred due to the pandemic. DFO has maintained onsite critical services while most employees continue to work remotely. COVID-19 expenditures also continue to be incurred in order to help protect the health and safety of our employees while continuing to provide essential services to Canadians.
The department continues to address the financial risks associated with Phoenix pay issues through the implementation of new controls and the strengthening of existing ones. To mitigate the impact on its employees, Fisheries and Oceans Canada has a pay support team to help employees whose pay has been impacted and to accelerate urgent matters to the Pay Centre and the Department will continue to work internally and with external stakeholders to resolve any and all issues.
4. Significant changes in relation to operations, personnel and programs
The following changes in personnel were made during the third quarter:
- The appointment of Ms. Alexandra (Alix) Dostal as Assistant Deputy Minister, Aquatic Ecosystems, as of November 16, 2020.
5. Approval by Senior Officials
Original signed by
Timothy Sargent, Deputy Minister
Original signed by
Chief Financial Officer
Statement of Authorities (unaudited)
(in thousands of dollars)
|Fiscal year 2019-20||Fiscal year 2020-21|
|Total available for use for the year ending March 31, 2020*||Used during the quarter ended December 31, 2019||Year to date used at quarter-end||Total available for use for the year ending March 31, 2021*||Used during the quarter ended December 31, 2020||Year to date used at quarter-end|
|Vote 1 – Net Operating expenditures||2,021,216||487,170||1,323,241||1,909,061||444,231||1,218,155|
|Vote 5 – Capital expenditures||1,136,166||190,390||411,118||1,022,423||190,382||410,052|
|Vote 10 – Grants and Contributions||376,070||37,724||109,079||995,164||48,087||117,135|
|Statutory - Contributions to employee benefit plans||165,625||38,888||116,663||162,552||40,131||120,395|
|Statutory - Minister of Fisheries and Oceans – Salary and motor car allowance||88||22||66||89||22||67|
|Statutory - Spending of proceeds from the disposal of surplus Crown assets||0||85||95||0||151||156|
|Statutory – Refunds of amounts credited to revenues in previous years||0||0||2||0||0||0|
|Statutory - Payments to support Canada's fish harvesters pursuant to the Public Health Events of National Concern Payments Act||0||0||0||469,400||6,768||140,906|
|Statutory - Payments to the Canadian Seafood Stabilization Fund pursuant to the Public Health Events of National Concern Payments Act||0||0||0||0||0||0|
|Total Statutory Authorities||165,713||38,995||116,826||632,041||47,072||261,524|
* Includes only Authorities available for use and granted by Parliament at quarter-end.
Departmental Budgetary Expenditures by Standard Object (unaudited)
(in thousands of dollars)
|Fiscal year 2019-20||Fiscal year 2020-21|
|Planned expenditures for the year ending March 31, 2020*||Expended during the quarter ended December 31, 2019||Year to date used at quarter-end||Planned expenditures for the year ending March 31, 2021*||Expended during the quarter ended December 31, 2020||Year to date used at quarter-end|
|Transportation and communications||72,557||26,037||68,255||73,434||13,406||30,266|
|Professional and special services||467,994||151,979||301,467||413,785||134,311||317,432|
|Repair and maintenance||214,543||33,556||96,199||187,656||37,079||85,973|
|Utilities, materials and supplies||110,468||29,776||80,951||103,758||22,188||60,855|
|Acquisition of land, buildings and works||301,769||40,818||95,329||127,006||33,108||64,264|
|Acquisition of machinery and equipment||803,782||98,085||191,258||847,223||94,012||196,121|
|Other subsidies and payments||108,046||6,188||108,258||69,877||14,653||169,075|
|Public Debt Charges||0||0||0||0||28||97|
|Total gross budgetary expenditures||3,739,176||764,334||1,992,069||4,598,700||739,607||2,036,810|
|Less Revenues netted against expenditures:|
|Sales of goods and services||40,011||10,055||31,805||40,011||9,835||29,944|
|Total Revenues netted against expenditures||40,011||10,055||31,805||40,011||9,835||29,944|
|Total net budgetary expenditures||3,699,165||754,279||1,960,264||4,558,689||729,772||2,006,866|
* Includes only Authorities available for use and granted by Parliament at quarter-end.
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