Public Safety Canada Quarterly Financial Report For the quarter ended December 31, 2019

by ahnationtalk on February 26, 202028 Views

1.0 Introduction

This quarterly financial report for the period ending December 31, 2019 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 as well as Investing in the Middle Class (Budget 2019).

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 senior officials.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2019-20 Departmental Plan and the 2019-20 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 Budget 2019 for the 2019-20 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 December 31, 2019 and December 31, 2018 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.

Note: (1) The 2019-20 Treasury Board (TB) Central Votes include $5.9MNote1 for the Operating Budget Carry Forward, $3.0M for Compensation Adjustments, $0.7M for the eligible Paylist Expenditures and $0.1M for the implementation of the Program and Administrative Services (PA) modernization initiative. (2) Main Estimates exclude non-approved Budget Implementation Vote (BIV) items as of December 31, 2019 (Protecting Canada’s Critical Infrastructure from Cyber Threats and Protecting Community Gathering Places from Hate Motivated Crimes). (3) The amount of $65.0M included in the authorities column is for a one-time statutory grant to support Shock Trauma Air Rescue Service (STARS).

2.1 Significant Changes to Authorities

For the period ending December 31, 2019, the authorities provided to the Department include Main Estimates, Budget 2019 approved items, Supplementary Estimates (A), TB Central Vote transfers and Statutory Grant. The 2018-19 authorities for the same period included Main Estimates, Budget 2018 approved items, Supplementary Estimates (A), and TB Central Vote transfers. The Statement of Authorities table presents a net decrease of $143.6 million (12.4 percent) compared to those of the same period of the previous year (from $1,160.0 million to $1,016.4 million).

Operating Expenditures authorities have decreased by $5.5 million (3.5 percent) (from $157.6 million to $152.1 million) mainly due to:

  • A decrease of $8.5 million relating to a transfer to the Communications Security Establishment related to establishing the Canadian Centre for Cyber Security;
  • A decrease of $3.0 million in funding level for Phase II of Canada’s Cyber Security Strategy;
  • A decrease of $2.0 million related to one year funding for the government advertising initiative in 2018-19 Don’t Drive High campaign;
  • A decrease of $1.5 million relating to the completion of the Canada’s 2018 G7 Presidency initiative (horizontal initiative);
  • A decrease of $1.2 million in funding level relating to the implementation of Phase One of the Government Operations Centre (GOC) Accommodations Project (Budget 2016);
  • A decrease of $1.1 million relating to one-year funding for Critical Infrastructure Security (Budget 2018); and
  • A net decrease of $0.6 million for various initiatives of lesser value.

These decreases are offset by the following increases:

  • An increase of $2.6 million in funding to advance the new National Cyber Security Strategy: Canada’s Vision for Security and Prosperity in the Digital Age (Budget 2018);
  • An increase of $2.3 million for the implementation of the Strengthening Canada’s Anti-Money Laundering initiative (Budget 2019);
  • An increase of $2.0 million to establish the Ensuring Better Disaster Management Preparation and Response initiative (Budget 2019);
  • An increase of $1.7 million for the implementation of the Protecting Canada’s National Security initiative (Budget 2019);
  • An increase of $1.5 million to establish the Take Action Against Gun and Gang Violence initiative (horizontal initiative);
  • An increase of $1.3 million for the implementation of the Protecting Children from Sexual Exploitation Online initiative (Budget 2019); and
  • An increase of $1.0 million in support of the Addressing the Opioid Crisis initiative (Budget 2018).

Grants and Contributions (G&C) authorities have decreased by $138.0 million (14.0 percent) (from $985.9 million to $847.9 million) mainly due to:

  • A net decrease of $255.7 million regarding the Disaster Financial Assistance Arrangements (DFAA) program. This is due to a decrease of $410.7 million in funding levels and offset by new funding of $155.0 million (Budget 2019 – Ensuring Better Disaster Management Preparation and Response initiative); and
  • A decrease of $77.5 million relating to the completion of the Canada’s 2018 G7 Presidency initiative (horizontal initiative).

These decreases are offset by the following increases:

  • An increase of $65.0 million for a one-time statutory grant to support Shock Trauma Air Rescue Service (STARS);
  • An increase of $60.4 million for the First Nations Policing Program primarily due to timing of transfers with the RCMP through the supplementary estimates;
  • An increase of $25.0 million for a one-time endowment to support Avalanche Canada;
  • An increase of $12.2 million in funding level to establish the Take Action Against Gun and Gang Violence initiative primarily resulting from a $9.7M reprofile from 2018-19 (horizontal initiative);
  • An increase of $7.9 million in funding level for the implementation of an initiative to build capacity to address drug impaired driving in Canada primarily resulting from a $9.2M reprofile from 2018-19 (horizontal initiative);
  • An increase of $3.3 million for a new initiative to address post-traumatic stress injuries among public safety officers (Budget 2018);
  • An increase of $3.2 million in funding level for the First Nation & Inuit Policing Facilities initiative (horizontal initiative);
  • An increase of $3.1 million for the implementation of the Protecting Children from Sexual Exploitation Online initiative (Budget 2019);
  • An increase of $2.6 million in funding level for the creation of the office for community outreach and countering radicalization to violence (Budget 2016);
  • An increase of $2.5 million for a one-time grant in support of the Canadian Red Cross’ relief recovery efforts in response to the 2019 floods across Canada;
  • An increase of $2.5 million for the implementation of the Human Trafficking Hotline initiative (Budget 2018);
  • An increase of $2.3 million in funding to advance the new National Cyber Security Strategy: Canada’s Vision for Security and Prosperity in the Digital Age (Budget 2018);
  • An increase of $1.5 million for the Canada’s Tobacco Strategy (Budget 2018) (horizontal initiative);
  • An increase of $1.4 million in funding level in support of addressing the needs of vulnerable offenders in the federal correctional system;
  • An increase of $1.0 million in new funding in support of the Strengthening Emergency Readiness in Canada through Public Awareness initiative (Budget 2019 – Ensuring Better Disaster Management Preparation and Response initiative); and
  • A net increase of $1.4 million for other initiatives of lesser value.

Budgetary Statutory authorities have decreased by $154.8K (0.9 percent) in 2019-20 mostly due to Employee Benefits Plan associated with variances in funding levels related to salary authorities.

2.2 Significant Variances from Previous Year Expenditures

Year-to-Date Expenditures

For the period ending December 31, 2019, the Departmental Budgetary Expenditures by Standard Object table presents a net increase of $18.2 million (5.3 percent) in Public Safety’s year-to-date (YTD) expenditures compared to the previous year (from $343.8 million to $362.0 million). This increase is mostly due to:

  • An increase of $65.0 million for a one-time payment of a statutory grant to Shock Trauma Air Rescue Service (STARS);
  • An increase of $25.0 million for a one-time payment to Avalanche Canada;
  • An increase of $23.6 million in payments for the First Nations Policing Program;
  • An increase of $12.5 million in payments for the Take Action Against Gun and Gang Violence initiative;
  • An increase of $8.4 million due to an increase in payments for acting pay and regular salaries resulting from higher staffing levels and, retroactive salary payments following signatures of collective bargaining agreements;
  • An increase of $4.4 million in payments for the Memorial Grant Program for First Responders;
  • An increase 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;
  • An increase of $3.4 million in payments for the First Nation and Inuit Policing Facilities initiative;
  • An increase of $2.5 million for a payment to the Canadian Red Cross to support 2019 floods recovery efforts across Canada;
  • An increase of $2.5 million in payments for the Human Trafficking Hotline;
  • An increase of $1.6 million in payments to address post-traumatic stress injuries among public safety officers;
  • An increase of $1.2 million in payments for professional services;
  • An increase of $1.1 million due to the timing of payments relating to the Heavy Urban Search and Rescue Program;
  • An increase of $1.1 million in payments for the Aboriginal Community Safety Development Contribution Program;
  • An increase of $1.0 million in payments for the Building Capacity to Address Drug Impaired Driving initiative; and
  • A net increase of $2.8 million for other expenditure variances of lesser value.

These increases are offset by:

  • A decrease of $130.3 million mainly related to advance payment in support of the Red Cross’ efforts for the 2011 Spring flood in Manitoba ($48.3M), the 2016 June Rainstorm in British Columbia ($41.5M) and the 2018 Spring flood in New Brunswick ($39.1M) as part of the DFAA program:
  • A decrease of $6.3 million due to the timing of payments relating to the National Crime Prevention Strategy initiative;
  • A decrease of $3.5 million due to the timing of payments relating to the Biology Casework Analysis program; and
  • A decrease of $1.3 million in professional services expenditures related to communications.

Third Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended December 31, 2019 have decreased by $73.5 million (49.7 percent) (from $147.9 million to $74.4 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

  • Personnel expenditures have increased by $4.5 million.
  • Other operating expenditures have decreased by $2.4 million.
  • Transfer payments expenditures have decreased by $75.2 million (70.4 percent) mainly due to:
    • A decrease of $78.5 million mainly related to an advance payment in support of the Red Cross’ efforts for the 2016 June Rainstorm in British Columbia ($41.5M), the 2017 Spring flood in Manitoba ($17.6M) and the 2017 July Wildfire in British Columbia ($16.9M) as part of the DFAA program;
    • A decrease of $3.5 million due to the timing of payments relating to the Biology Casework Analysis program;
    • A decrease of $1.8 million due to the timing of payments relating to the Memorial Grant Program for First Responders;
    • A decrease of $1.0 million due to the timing of payments of the Canada’s Tobacco Strategy;
    • A decrease of $1.0 million due to the timing of payments relating to the National Crime Prevention Strategy initiative; and
    • A net decrease of $0.7 million for other expenditure variances of lesser value.

    Offset by the following increases:

    • An increase of $3.9 million in payments for the First Nations Policing Program;
    • An increase of $3.6 million in payments for Take Action Against Gun and Gang Violence initiative;
    • An increase of $2.1 million due to the timing of payments relating to the Heavy Urban Search and Rescue Program; and
    • An increase of $1.6 million in payments to address post-traumatic stress injuries among public safety officers.

3.0 Risks and Uncertainty

The Department’s mandate spans from public safety and security, intelligence and national security functions, social interventions for youth-at-risk, to readiness for all manner of emergencies.  The Department is called, on behalf of the Government of Canada, to rapidly respond to emerging threats and ensure the safety and security of Canadians. The Department’s ability to deliver its programs and services is subject to several risk sources, such as the rapidly changing asymmetrical threat environment, its ability to respond to natural or man-made disasters, government priorities, and government-wide or central agency initiatives. To deliver this mandate effectively, the collaboration of many departments and agencies, provincial and territorial governments, international partners, private sector and first responders is required.

Disaster Financial Assistance Arrangements

The Disaster Financial Assistance Arrangements (DFAA) contribution program presents a greater level of uncertainty than other Public Safety Canada (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.

Updates to the DFAA liability are completed twice a year with the last one having been conducted in the fall of 2019 and now reflected in the December 31, 2019 Quarterly Financial Report. As a result of this update, there are now currently 57 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 57 events is $2.3 billion, the majority of which is expected to be paid out over the next five years.

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

  • Alberta 2013 June Flood ($600 million);
  • Manitoba 2011 Spring Flood ($407 million);
  • British Columbia 2017 July Wildfires ($213 million);
  • Quebec 2017 Spring Flood ($120 million); and
  • Manitoba 2014 Rainstorm ($111 million).

Since the last update presented in June 30, 2019 Quarterly Financial Report, the DFAA liability has decreased by $200 million from $2.5 billion in the first quarter of 2019-20 to $2.3 billion in the third quarter of 2019-20. Variations in the DFAA liability are mainly attributable to:

  • Changes in business cases for costs incurred by Provinces and Territories in unusual circumstances and for which the DFAA Guidelines are silent or ambiguous. Such costs could be adjacent to response and recovery efforts and may include temporary housing sites, emergency relief payments to natural disaster evacuees and psychological support services;
  • 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;
  • Changes in funding for disaster mitigation measures that aim to eliminate or reduce the impact and risk of hazards through proactive measures taken before an emergency or disaster occurs; and offset by
  • Changes for payments issued under the existing obligation.

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 November 20, 2019, the Prime Minister Justin Trudeau announced his new Cabinet and the appointment of the Honourable Bill Blair as the new Minister of Public Safety and Emergency Preparedness.

On December 11, 2019, Mr. Rob Stewart was appointed Deputy Minister of Public Safety Canada.

On October 21, 2019, Mr. Dominic Rochon was appointed Senior Assistant Deputy Minister of the National and Cyber Security Branch.

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: February 18, 2020

Patrick Amyot, CPA, CMA
Chief Financial Officer
Public Safety Canada
Ottawa (Canada)
Date: February 18, 2020

6.0 Statement of Authorities (unaudited)

Fiscal year 2019-20 (in dollars)
Total available for use for the year ending March 31, 2020 (1) Used during the quarter ended December 31, 2019 Year to date used at quarter-end
Vote 1 – Net Operating Expenditures 152,081,855 38,992,936 111,788,627
Vote 5 & Statutory – Grants and Contributions 847,912,447 31,652,872 238,859,440
Employee Benefit Plans (EBP) 16,197,856 3,757,719 11,273,155
Minister’s Salary and Motor Car Allowance 175,400 26,579 114,079
TOTAL AUTHORITIES 1,016,367,558 74,430,106 362,035,301
(1) Includes only authorities available for use and granted by Parliament at quarter end.
Fiscal year 2018-19 (in dollars)
Total available for use for the year ended March 31, 2019 (1) Used during the quarter ended December 31, 2018 Year to date used at quarter-end
Vote 1 – Net Operating Expenditures 157,626,299 37,130,823 99,333,374
Vote 5 – Grants and Contributions 985,890,388 106,817,484 232,729,748
Employee Benefit Plans (EBP) 16,356,080 3,871,411 11,614,233
Minister’s Salary and Motor Car Allowance 172,000 57,000 100,000
TOTAL AUTHORITIES 1,160,044,767 147,876,718 343,777,355
(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 2019-20 (in dollars)
Planned expenditures for the year ending March 31, 2020 (1) Expended during the quarter ended December 31, 2019 Year to date used at quarter-end
Expenditures:
Personnel 124,737,098 34,788,870 97,795,647
Transportation and communications 3,391,536 1,122,136 2,562,853
Information 5,475,142 264,919 1,805,489
Professional and special services 20,553,920 5,020,865 12,773,213
Rentals 4,994,625 1,089,915 3,055,676
Repair and maintenance 952,037 434,619 608,477
Utilities, material and supplies 1,947,264 131,840 359,468
Acquisition of land, buildings and works 3,456,500
Acquisition of machinery and equipment 3,260,850 357,649 2,084,299
Transfer payments 847,912,447 31,652,872 238,859,440
Public debt charges
Other subsidies and payments 2,386,141 159,231 4,353,799
Total gross budgetary expenditures 1,019,067,558 75,022,916 364,258,361
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 592,810 2,223,060
Total net budgetary expenditures 1,016,367,558 74,430,106 362,035,301
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.
Fiscal year 2018-19 (in dollars)
Planned expenditures for the year ended March 31, 2019 (1) Expended during the quarter ended December 31, 2018 Year to date used at quarter-end
Expenditures:
Personnel 124,956,235 30,313,062 88,827,574
Transportation and communications 5,105,411 1,197,834 2,492,373
Information 6,096,038 1,962,279 3,030,552
Professional and special services 27,096,000 5,009,077 12,526,287
Rentals 6,575,983 1,724,244 2,906,437
Repair and maintenance 2,004,618 224,365 331,369
Utilities, material and supplies 1,418,448 166,496 352,010
Acquisition of land, buildings and works
Acquisition of machinery and equipment 3,412,974 593,231 1,185,994
Transfer payments 985,890,388 106,817,484 232,729,748
Public debt charges
Other subsidies and payments 188,672 142,246 975,873
Total gross budgetary expenditures 1,162,744,767 148,150,318 345,358,217
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 273,600 1,580,862
Total net budgetary expenditures 1,160,044,767 147,876,718 343,777,355
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

Endnotes

  1. 1The amount for the Operating Budget Carry Forward has been updated to reflect the rounding rules. The amount reported in the Quarterly Financial Report for the quarter ended in September 30, 2019 of $5.8M was not correct.

NT4

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