Quarterly Financial Report for the quarter ended June 30, 2015

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About this publication

Publication author : Canada Economic Development for Quebec regions

Publish date : August 25, 2015

Summary :

CED’s financial report on its spending trends for the first quarter.

Table of Contents

  1. Section 1: Introduction
  2. Section 2: Highlights of Financial and Year-to-Date (YTD) Results
  3. Section 3: Risks and Uncertainties
  4. Section 4: Significant Changes in Relation to Operations, Personnel and Programs
  5. Statement of Authorities (unaudited)
  6. Departmental Budgetary Expenditures by Standard Object (unaudited)

Section 1: Introduction

Canada Economic Development prepared this quarterly financial report as required under subsection 65.1 of the Financial Administrative Act and in the form and manner prescribed by Treasury Board (TB) Accounting Standard 1.3 - Departmental and Agency Quarterly Financial Report.

This quarterly report should be read in conjunction with the 2015-2016 Main Estimates, the Supplementary Estimates, as well as with previous quarterly reports submitted before the current fiscal year.

This document has not been audited by an external auditor or reviewed.

1.1 Authority, mandate and programs

Under the Economic Development Agency of Canada for the Regions of Quebec Act, which entered into force on October 5, 2005, the object of CED is to promote the long-term economic development of the regions of Quebec by giving special attention to those where slow economic growth is prevalent or where opportunities for productive employment are inadequate.

Additional information on CED’s authority, mandate and program activities can be found in the Report on Plans and Priorities and the Main Estimates.

1.2 Basis of presentation

This quarterly report has been prepared by CED using an expenditure basis of accounting and a special purpose financial reporting framework designed to meet financial information needs with respect to spending authorities. The accompanying Statement of Authorities includes CED’s spending authorities granted by Parliament and those used by CED, consistent with the Main Estimates and Supplementary Estimates for the 2015-2016 fiscal year.

The authority of Parliament is required before monies can be spent by the Government. Authorities available for use are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory authority for specific purposes.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

CED uses the full accrual method of accounting to prepare and present its annual departmental financial statements published in the Departmental Performance Report. However, the spending authorities voted by Parliament are always established on an expenditure basis.

1.3 Financial structure of CED

There are two annual appropriations for CED’s expenditures management:

Expenses under budgetary statutory authorities, for which payments are made under a law previously approved by Parliament and which are not parts of the annual appropriations bills, include items such as employer’s portion of the employee benefit plan.

Section 2: Highlights of Financial and Year-to-Date (YTD) Results

This section includes a variety of financial information for the current fiscal year to June 30, 2015, such as budgetary authorities available for the year and expenditures incurred during the first quarter, while establishing comparisons with the first quarter of the previous fiscal year.

The explanation of variances considers that changes of less than 5% have minimal impact on the interpretation of results.

Further details of this financial information are provided in Sections 2.1 and 2.2, and in the tables in the Appendix.

2.1 Analysis of authorities

At the end of the current quarter, CED’s annual authorities totaled $261.1 M.

When the current amount of authorities for the 2015-2016 fiscal year ($261.1 M) is compared with the amount of authorities for the 2014-2015 fiscal year during the same period ($247.8 M), there is a funding variance of $13.3 million. This variance is attributable to the following increases:

The following graph shows the annual budgetary authorities by vote as at June 30 for the current fiscal year, compared with the previous fiscal year.

Graph 1 – Annual Authorities by Appropriation, 2015-2016 Fiscal Year Compared with 2014-2015 Fiscal Year

Graph 1 – Annual Authorities by Appropriation, 2015-2016 Fiscal Year Compared with 2014-2015 Fiscal Year

Graph 1 – Long Description

Analysis of annual budget authorizations by allocation: subdivided into three sections, this graph gives an overview of net available budget authorizations by Vote (1 – Net Operating Expenditures, 5 – Grants and Contributions and Legislative Expenditures) on June 30, 2015, including a comparison with June 30, 2014.

On June 30, 2015, annual authorizations under Vote 1 – Net Operating Expenditures, were $38.3M, vs $37.9M for 2014-2015. Those under Vote 5 – Grants and Contributions, are $218M, whereas they were $205.3M in 2014-2015. Finally, legislative authorizations are $4.8M for 2015-2015 vs $4.6M in 2014-2015.

Vote 1 Authorities - Net Operating Expenditures

There is no significant variance in this item, compared with the previous year.

Vote 5 Authorities - Grants and Contributions

The annual Vote 5 authorities available as at June 30, 2015, compared with the same period in the previous year, show a $12.7 M increase (6.2%).

This increase is essentially attributable to the following:

2.2 Analysis of expenditures

The total amount of CED expenditures recorded during the first quarter of 2015-2016 was $33.5 M, compared with $28.9 M during the same quarter of the previous year. This is a net increase of $4.6 M (14%), compared with the previous fiscal year. This variance is mainly attributable to the following:

The following graph shows expenditures by appropriation as at June 30 for the current fiscal year, compared with the previous fiscal year.

Graph 2 – Expenditures for the first quarter by budget allocation, fiscal 2015-2016 compared to 2014-2015

Expenditures for the first quarter by budget allocation, fiscal 2015-2016 compared to 2014-2015

Graph 2 - Long Description

Analysis of expenditures for the first quarter by budget allocation, fiscal 2015-2016 compared to 2014-2015: subdivided into three sections, namely Vote 1 – Net Operating Expenditures, Vote 5 – Grants and Contributions and legislative authorizations, this graph shows expenditures up to June 30, 2015, including comparison with June 30, 2014.

On June 30, 2015, expenditures under Vote 1 – Net Operating Expenditures, are $7.3M, vs $9M for 2014-2015. Those under Vote 5 – Grants and Contributions, are $25.4M, whereas they were $18.8M in 2014-2015. Finally, legislative expenditures are $0.8M for 2015-2016 vs $1.2M in 2014-2015.

Vote 1 - Net Operating Expenditures

Total net operating expenditures in the first quarter of 2015-2016 were $7.3 M, compared with $9.0 M during the same period in 2014-2015. This $1.7 M decrease (19%) is mainly attributable to personnel expenditures, which were $1.5 M lower.

During the first quarter of 2014-2015, there were expenditures of nearly $1 M under Other Grants and Payments. This is attributable to the one time transition payment for the Government of Canada’s payment in arrears plan.

(For additional information on expenditures, see the Departmental Budgetary Expenditures by Standard Object table in the Appendix.)

Vote 5 - Grants and Contributions

When the total disbursement for Vote 5 - Grants and Contributions during this quarter is compared with the first quarter in 2014-2015, we note a $6.7 M increase in expenditures. This variance is attributable to the fact that there were a greater number of claims and that the average amounts claimed were higher. In addition, about $2.5 M was spent during this quarter on programs such as the Local Investment Initiative, the Lac-Mégantic Economic Recovery Initiative and the Chrysotile Asbestos Program. These programs were less active in 2014-2015 in terms of expenditures ($0.05 M).

(For additional information on expenditures, see the Departmental Budgetary Expenditures by Standard Object table in the Appendix).

Section 3: Risks and Uncertainties

To achieve its outcomes, CED takes a global view of the changing factors that influence its environment and activities, and incorporates these factors into its decision making. By including risk management in its corporate planning, CED is able to implement appropriate risk management strategies to achieve its outcomes.

The main risk for CED’s mandate, which is to promote economic development, is the “economic risk and institutional capacities” directly linked to changes in Quebec and Canada’s economic growth prospects. Moreover, its mandate is also influenced by the availability of funding from other levels of government or the private sector, as well as the potential postponement of investment decisions by small and medium size enterprises (SMEs). To mitigate this risk, CED continually reviews changes in international, national and provincial economic outlooks as well as national and provincial programs.

CED manages the implementation of these mitigation measures in the context of reduced budgetary allocations. It regularly monitors the progress and effectiveness of their implementation through several budgetary review processes and activities along with expenditure analysis and budgetary estimates by organizational unit on a monthly basis.

Section 4: Significant Changes in Relation to Operations, Personnel and Programs

No significant changes in relation to operations and programs have had an impact on the results of this quarter.

Senior management approval

Approved by:

     Original signed by         
Marie Lemay, P.Eng., ing
Deputy Minister / President
Montreal, Canada
On ____________

     Original signed by         
Marc Lemieux, MA, MBA, CPA, CMA
Chief Financial Officer

 

Statement of Authorities (unaudited)

For the quarter ended June 30, 2015
2015-2016 Fiscal Year
(in thousands of dollars)
2014-2015 Fiscal Year
(in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2016* Used during the quarter ended June 30, 2015 Year-to-date used at quarter end Total available for use for the year ending March 31, 2015* Used during the quarter ended June 30, 2014 Year-to-date used at quarter-end
Vote 1 - Net Operating Expenditures 38 267 7 266 7 266 37 908 9 003 9 003
Vote 5 - Grants and Contributions 217 996 25 416 25 416 205 309 18 756 18 756
Total Budgetary Statutory Authorities 4 819 803 803 4 624 1 156 1 156
Non-Budgetary Authorities - - - - - -
Total Authorities 261 082 33 485 33 485 247 841 28 915 28 915

* Includes only Authorities available for use and granted by Parliament at quarter-end.
(An incremental difference in the sum of data may result from rounding.)

Departmental Budgetary Expenditures by Standard Object (unaudited)

For the quarter ended June 30, 2015
2015-2016 Fiscal Year
(in thousands of dollars)
2014-2015 Fiscal Year
(in thousands of dollars)
Expenditures Planned Expenditures for the year ending March 31, 2016* Spent during the quarter ended June 30, 2015 Year-to-date used at quarter end Planned Expenditures for the year ending March 31, 2015* Spent during the quarter ended June 30, 2014 Year-to-date used at quarter end
Personnel 33 506 7 061 7 061 32 648 7 968 7 968
Transport and Communications 1 341 147 147 2 076 208 208
Information 575 19 19 593 28 28
Professional and Special Services 5 556 735 735 4 349 729 729
Leasing 766 25 25 988 208 208
Repair and Maintenance 96 3 3 99 3 3
Utilities, Materials and Supplies 287 24 24 297 24 24
Acquisition of Land, Buildings and Works - - - - - -
Acquisition of Machinery and Equipment 862 22 22 1 384 41 41
Transfer Payments 217 996 25 416 25 416 205 309 18 756 18 756
Other Subsidies and Payments 96 33 33 99 950 950
Total Net Budgetary Expenditures 261 082 33 485 33 485 247 841 28 915 28 915

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

(An incremental difference in the sum of data may result from rounding.)

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