Office of Infrastructure of Canada
Quarterly Financial Report for the quarter ended September 30, 2017
Statement outlining results, risks and significant changes in operations, personnel and programs
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 and Supplementary Estimates (A), as well as Budget 2017.
The key to building Canada for the 21st century is a strategic and collaborative long-term infrastructure plan that builds economically vibrant, strategically planned, sustainable and inclusive communities. Infrastructure Canada (INFC) works closely with all orders of government and other partners to enable investments in social, green, public transit and other core public infrastructure, as well as trade and transportation infrastructure.
Further information on INFC's mandate, responsibilities, and programs can be found in INFC's 2017-18 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 INFC's spending authorities granted by Parliament and those used by INFC consistent with the Main Estimates and Supplementary Estimates for the 2017-18 fiscal year (FY). 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 monies 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.
INFC 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.
In the past, INFC has worked in collaboration with other federal departments and agencies to deliver some of its transfer payment programs (collectively known as federal delivery partners). For certain programs, funding flows as advances to a federal delivery partner, who in turn manages claims from ultimate recipients on behalf of INFC.
During the first quarter of 2017-18, the only federal delivery partner for certain sunsetting programs was Transport Canada.
It should be noted that this quarterly report has not been subject to an external audit or review.
Highlights of Fiscal Quarter and Fiscal Year-to-Date Results
This section highlights the significant items that contributed to the change in resources available for use from 2016-17 to 2017-18 and in actual expenditures as at September 30, 2016 and as at September 30, 2017.
Authorities
Graph 1: Comparison of Authorities Available as at September 30, 2017 and September 30, 2016.
As shown in the Statement of Authorities, INFC's total authorities available for 2017-18 are $7.042 billion as of the end of Quarter 2 (Q2) and represent a $1.737 billion increase compared to the same quarter in the prior year. This increase is summarized in the table below:
Total authorities as of September 30, 2017 |
Increase/(Decrease) versus |
% Change versus prior year |
|---|---|---|
Contributions (Voted and Statutory) |
1,286,511 |
25% |
Capital Expenditures |
446,649 |
439% |
Operating Expenditures |
4,699 |
4% |
Contributions to Employee Benefit Plan |
(675) |
(10%) |
The sources of significant year-over-year changes are as follows:
- Contributions (both Voted and Statutory) – The increase is due to an increase in authority levels for existing programs, mainly the Phase 1 Investing in Canada Plan.
- Capital Expenditures – The increase is primarily related to authority levels for the New Champlain Bridge Corridor project, specifically for a milestone payment that is anticipated during 2017-18.
Expenditure Analysis
Expenditures at the end of Q2 were $1.330 billion, compared to $1.442 billion reported in the same period of 2016-17, representing a decrease of 7.8% between the two years. The source of the relative decrease is demonstrated in the tables, graphs and analysis below.
Graph 2: Comparison of Total Expenditure as of September 30, 2017 and September 30, 2016.
Year-to-date expenditures |
Increase/(Decrease) Versus Prior Year-to-date (000's) |
% Change versus prior year |
|---|---|---|
Operating Expenditures |
11,239 |
49% |
Contributions to Employee Benefit Plan |
116 |
4% |
Capital Expenditures |
(606) |
(10%) |
Contributions (Voted and Statutory) |
(122,606) |
(9%) |
Capital
The increase is related to the capitalization of certain costs related to the New Champlain Bridge Corridor, compared to last year.
The sources of significant year-over-year changes are as follows:
Operating Expenditures
Further details are provided later in this report, by standard object.
Contributions (Voted and Statutory)
Year-to-date Contributions (Voted and Statutory) expenditures as of the end of Q2 have decreased in comparison to last year.
Graph 3: Comparison of Contribution Expenditures (Voted and Statutory) as of September 30, 2017 and September 30, 2016.
Significant changes in year-to-date contribution expenditures between September 2017 and September 2016 are as follows:
Program Fund |
Increase/(Decrease) versus Prior Year-to-date |
% Change versus prior year |
|---|---|---|
New Building Canada Fund – Provincial-Territorial Infrastructure Component - Small Communities Fund (NBCF-PTIC-SCF) |
27,475 |
363% |
Inuvik to Tuktoyaktuk Highway Fund |
(33,000) |
(84%) |
Building Canada Fund – Major Infrastructure Component (BCF-MIC) |
(144,166) |
(56%) |
Net change in expenditures of all other contribution programs not specifically listed above |
27,085 |
|
The sources of the significant year-over-year changes in program expenditures are summarized as follows:
- NBCF-PTIC-SCF - This increase relates to a relative increase in claims as more projects are approved and claims are received.
- Inuvik to Tuktoyaktuk Highway Fund - The decrease is related to advancing progress of the project. Payments for the project are milestone based.
- BCF-MIC - This is an older program. The primary reason for the reduction is overall claims being lower compared to the same period last year.
- Net change – This is the net increase in contribution expenditures for nine other contribution programs where the individual program funds do not have a significant year-over-year change.
Departmental Budgetary Expenditures by Standard Object
The planned Departmental Budgetary Expenditures by Standard Object are set out in the table at the end of this report. Aggregate year-to-date expenditures in 2017-18 decreased by $111.9 million, compared with the same quarter last year. The largest dollar change was a reduction in Transfer Payments as explained above.
A breakdown of variances in year-to-date spending by standard object is below:
Changes to Expenditures by Standard Object |
Increase/(Decrease) versus Prior Year-to-date (000's) |
% Change versus prior year |
|---|---|---|
Professional Services and Special Services |
8,655 |
92% |
Personnel |
3,086 |
16% |
Rentals |
170 |
27% |
Transportation and Communications |
118 |
50% |
Repair and Maintenance |
9 |
1% |
Utilities, materials and supplies |
(8) |
(16%) |
Information |
(34) |
(15%) |
Other Subsidies and Payments |
(206) |
(67%) |
Acquisition of Machinery and Equipment |
(209) |
(91%) |
Acquisition of land, buildings and works |
(831) |
(81%) |
Transfer Payments |
(122,606) |
(9%) |
The source of significant year-over-year changes is summarized as follows:
- Professional and Special Services – Mostly due to an increase in costs related to a Memorandum of Understanding with the National Research Council of Canada for the update and development of Canada's Building Codes, standards and tools with the goal of achieving resilient and sustainable buildings and infrastructure.
- Transportation and Communications – Increase is due to an increase in travel.
- Acquisition of land, buildings and works – Decrease is related to land acquisition for the New Champlain Bridge Corridor and the Gordie Howe International Bridge projects that occurred last year.
- Transfer payment - Details are provided above.
Overall, Infrastructure Canada has spent 18.9% of its current Total Authorities as of September 30, 2017, compared with 27.2% at the end of Q2 of the previous fiscal year.
Risks and Uncertainties
In most cases, INFC funds projects via a Contribution Agreement or Integrated Bilateral Agreement between Canada and a Provincial/Territorial (PT) government. Those PT governments enter into their own agreements with municipalities, who are ultimately responsible for project management and construction of the infrastructure.
Most of INFC's programs are designed to flow federal funds to PTs after they have submitted their claims for actual costs incurred by a project. Only once INFC receives a claim can the funding flow to the PT in order to pay the federal share. It should be noted that the pace of the claims submitted to INFC does not match the economic activity on a project as spending can happen long before claims are received. For this reason, INFC relies on PTs and other partners to submit claims in a timely manner.
There are a variety of reasons that can explain the timing of claims being submitted, which in turn contribute to a variance between planned spending and actual spending profile. There is often a time lag between when the project was approved or announced to the actual start date of construction as infrastructure projects typically require a significant amount of upfront planning, design and procurement. Even after construction has started, sometimes project delays due to factors beyond the control of funding recipients such as, inclement weather or weather events, may delay the submission of claims. In other cases, partners may not have an immediate need or urgency to submit claims due to the financial planning within their own jurisdictions. In general, INFC encourages PTs to submit claims in a timely manner to ensure the flow of funding as planned. Parliamentary authority to spend typically expires at the end of the fiscal year. When claims are not submitted as expected in a given fiscal year as planned, INFC seeks to reprofile the authorities so that the funding committed to specific projects continues to be available in future years.
Over the last 18 months the department has been in a state of transformation. The introduction of new programs and responsibilities has resulted in structural changes to better support the delivery of new business lines, as well as required the department to move to more specialized skills and experience necessary for key positions. INFC is working to ensure it attracts and retains employees with the skill sets and experience necessary to fulfil the department's evolving mandate.
Significant Changes in Relation to Operations, Personnel and Programs
On September 25, 2017, Kelly Gillis replaced Jean-François Tremblay as Deputy Minister of Infrastructure and Communities.
On October 2, 2017, David Murchison became the new Assistant Deputy Minister, Policy and Results Branch.
Approval by Senior Officials
Approved by:
Original signed by:
Kelly Gillis,
Deputy Head
Darlene Boileau,
Chief Financial Officer
Signed at Ottawa, Canada.
Quarterly Financial Report
For the quarter ended September 30, 2017
Statement of Authorities (unaudited)
Fiscal year 2017-2018
Total available for use for the year ending March 31, 2018 |
Used during the quarter ended September 30, 2017 |
Year to date used at quarter-end |
|
|---|---|---|---|
Vote 1 – Operating expenditures |
132,420 |
24,366 |
34,089 |
Vote 5 – Capital expenditures |
548,223 |
3,893 |
5,699 |
Vote 10 – Contributions |
4,282,964 |
171,909 |
251,236 |
Budgetary Statutory Authorities |
|||
(S) – Contributions to employee benefit plans |
6,106 |
1,527 |
3,053 |
(S) – Gas Tax Fund |
2,071,933 |
1,035,966 |
1,035,966 |
(S) – Minister salary and car allowance |
84 |
21 |
42 |
Total Budgetary authorities |
7,041,730 |
1,237,682 |
1,330,085 |
Non-budgetary authorities |
- |
- |
- |
Total authorities |
7,041,730 |
1,237,682 |
1,330,085 |
Statement of Authorities (unaudited) (continued)
Fiscal year 2016-2017
Total available for use for the year ending March 31, 2017 |
Used during the quarter ended September 30, 2016 |
Year to date used at quarter-end |
|
|---|---|---|---|
Vote 1 – Operating expenditures |
127,721 |
11,860 |
22,871 |
Vote 5 – Capital expenditures |
101,575 |
5,331 |
6,304 |
Vote 10 – Contributions |
2,996,453 |
216,233 |
373,841 |
Budgetary Statutory Authorities |
|||
(S) – Contributions to employee benefit plans |
6,781 |
1,468 |
2,937 |
(S) – Gas Tax Fund |
2,071,933 |
1,035,967 |
1,035,967 |
(S) – Minister salary and car allowance |
84 |
14 |
21 |
Total Budgetary authorities |
5,304,547 |
1,270,873 |
1,441,941 |
Non-budgetary authorities |
- |
- |
- |
Total authorities |
5,304,547 |
1,270,873 |
1,441,941 |
Download
If the following document is not accessible to you, please contact info@infc.gc.ca for assistance.
- Statement of Authorities (Size: 13.36 KB) (PDF version)
Help on accessing alternative formats, such as PDF, PPT and ZIP files, can be obtained in the alternate format help section.
Quarterly Financial Report
For the quarter ended September 30, 2017
Departmental budgetary expenditures by Standard Object (unaudited)
Fiscal year 2017-2018
Planned expenditures for the year ending March 31, 2018 |
Expended during the quarter ended September 30, 2017 |
Year to date used at quarter-end |
|
|---|---|---|---|
Expenditures: |
|||
Personnel |
45,278 |
12,824 |
22,229 |
Transportation and communications |
1,165 |
181 |
355 |
Information |
558 |
72 |
198 |
Professional and special services |
603,918 |
15,188 |
18,113 |
Rentals |
3,514 |
740 |
797 |
Repair and maintenance |
2,005 |
518 |
836 |
Utilities, materials and supplies |
404 |
24 |
42 |
Acquisition of land, buildings and works |
- |
191 |
191 |
Acquisition of machinery and equipment |
2,575 |
16 |
22 |
Transfer payments |
6,382,146 |
1,207,875 |
1,287,202 |
Public debt charges |
- |
- |
- |
Other subsidies and payments |
167 |
53 |
100 |
Total net budgetary expenditures |
7,041,730 |
1,237,682 |
1,330,085 |
Departmental budgetary expenditures by Standard Object (unaudited) (continued)
Fiscal year 2016-2017
Planned expenditures for the year ending March 31, 2017 |
Expended during the quarter ended September 30, 2016 |
Year to date used at quarter-end |
|
|---|---|---|---|
Expenditures: |
|||
Personnel |
45,553 |
9,720 |
19,143 |
Transportation and communications |
911 |
132 |
237 |
Information |
470 |
145 |
232 |
Professional and special services |
135,638 |
6,506 |
9,458 |
Rentals |
2,944 |
237 |
627 |
Repair and maintenance |
1,057 |
557 |
827 |
Utilities, materials and supplies |
267 |
28 |
50 |
Acquisition of land, buildings and works |
47,824 |
980 |
1,022 |
Acquisition of machinery and equipment |
1,274 |
58 |
231 |
Transfer payments |
5,068,385 |
1,252,200 |
1,409,808 |
Public debt charges |
- |
- |
- |
Other subsidies and payments |
224 |
310 |
306 |
Total net budgetary expenditures |
5,304,547 |
1,270,873 |
1,441,941 |
Download
If the following document is not accessible to you, please contact info@infc.gc.ca for assistance.
- Departmental Budgetary Expenditures by Standard Object (Size: 14.00 KB) (PDF version)
Help on accessing alternative formats, such as PDF, PPT and ZIP files, can be obtained in the alternate format help section.
- Date modified: