Fisheries and Oceans Canada - Quarterly financial report for the quarter ended June 30, 2023

Table of contents

1. Introduction
2. Highlights of fiscal quarter and the fiscal year-to-date (YTD) results
3. Risks and uncertainties
4. Significant changes in relation to operations, personnel and programs
5. Approval by senior officials
6. Appendix

1. Introduction

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.

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.

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 2023-24 Main Estimates.

The authority of Parliament is required before money can be spent by the Government. Approval is given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authority for specific purposes.

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 June 30, 2023, as compared to the same period last year.

2.1 Significant changes in authorities

The total budgetary authorities available for use increased by $124.5 million (3.1%) from the previous fiscal year:

• Vote 1 authorities increased by $65.4 million
• Vote 5 authorities increased by $140.3 million
• Vote 10 authorities decreased by $87.7 million
• Statutory authorities increased $6.5 million

Comparison of net budgetary authorities by vote as at June 30 of fiscal years 2022-23 and 2023-24 (in millions of dollars)

The following table provides a detailed explanation of these changes.

2.2 Significant changes in expenditures

In the first quarter of 2023-24, total budgetary expenditures have increased by $141.9 million (24.7%) compared to the same period in the previous year:

• Vote 1 expenditures increased by $59.3 million
• Vote 5 expenditures increased by $48.6 million
• Vote 10 expenditures increased by $32.3 million
• Statutory payments increased by $1.6 million

Comparison of authorities used by vote during the first quarter of fiscal years 2022-23 and 2023-24 (in millions of dollars)

In the first quarter of 2023-24, total budgetary expenditures amounted to $715.2 million compared to $573.3 million reported in the same quarter of 2022-23, which represents an increase of $141.9 million or 24.7%.

• Vote 1 - Net Operating expenditures (increase of $59.3 million or 15.7%)

  This is primarily due to a timing difference in the reallocation of financial transactions between departments, as well as an increase in personnel expenditures and in fisheries and aquaculture service costs.

• Vote 5 - Capital expenditures (increase of $48.6 million or 41.1%)

  This is primarily due to an increase in construction engineering consulting costs for the Arctic Offshore Patrol Ships, the Offshore Oceanographic Science Vessel and the Polar Icebreaker projects.

• Vote 10 - Grants and Contributions (increase of $32.3 million or 97.7%)

  This increase is mainly attributed to an increase in payments related to Marine Conservation Targets, the Aboriginal Fisheries Strategy and recovery efforts at harbours affected by Hurricane Fiona.

The net increase by standard object is mainly attributed to:

• Personnel (increase of $30.3 million)

  This increase is in line with additional funding provided to the Department which has increased its complement of employees to deliver on the implementation of new programs.

• Professional and Special Services (increase of $54.7 million)

  This is primarily due to an increase in construction engineering consulting costs for the Arctic Offshore Patrol Ships, the Offshore Oceanographic Science Vessel and the Polar Icebreaker projects. In addition, there was an increase in fisheries and aquaculture service costs related to the Great Lakes Fishery Commission.

• Acquisition of Land, Buildings and Works (decrease of $5.3 million)

  The variance is mainly attributed to a decrease in marine installation costs related to various Budget 2021 Small Craft Harbours projects that were completed last year as well as a delay in approvals for new projects this quarter.

• Acquisition of Machinery and Equipment (increase of $17.5 million)

  This variance is mainly attributed to an increase in vessel dry docking and betterment work related to the Vessel Refurbishment Project. In addition, there was an increase in costs associated with the purchase of small crafts as well as the construction of small lifeboats and search and rescue vessels.

• Transfer Payments (increase of $32.3 million)

  This variance is mainly attributed to an increase in payments related to Marine Conservation Targets, the Aboriginal Fisheries Strategy and recovery efforts at harbours affected by Hurricane Fiona.

• Other Subsidies and Payments (increase of $14.1 million)

  This is primarily due to a timing difference in the reallocation of financial transactions between departments.

3. Risks and uncertainties

Fisheries and Oceans Canada operates in a dynamic environment that is affected by a number of factors, including: northern development; navigating waters; climate change; 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 stakeholders needs. The Department maintains a Departmental Risk Profile which assesses corporate strategic risks, which if not managed and mitigated, 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 2023-24 Departmental Plan.

Certain risks would have financial impacts should they materialize such as affecting the timing of transfer payments which lies outside the control of the Department and could require funds to be shifted to future years to meet program requirements. To minimize these impacts, the Department continuously monitors its program funding and expenditures throughout the year.

4. Significant changes in relation to operations, personnel and programs

There were no changes in personnel during the first quarter.

5. Approval by senior officials

Approved by:

6. Appendix

Table 1: Statement of authorities (unaudited)

(in thousands of dollars)

* Includes only Authorities available for use and granted by Parliament at quarter-end.

Table 2: Departmental budgetary expenditures by standard object (unaudited)

(in thousands of dollars)

* Includes only Authorities available for use and granted by Parliament at quarter-end.