Quarterly Financial Report for the quarter ended December 31, 2015

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About this publication

Publication author : Canada Economic Development for Quebec regions

Publish date : February 25, 2016

Summary :

Financial report of the Agency on its spending trends for the third 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

This quarterly financial report has been prepared by Canada Economic Development for Quebec Regions (CED), as required by subsection 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board Accounting Standard 1.3 – Departmental and Agency Quarterly Financial Report.

This quarterly report should be read in conjunction with the 2015-2016 Main Estimates and the quarterly reports preceding the current fiscal year.

This report has not been subject to an external audit or review.

1.1 Authority, mandate and program activities

Under the Economic Development Agency of Canada for the Regions of Quebec Act, which came into effect on October 5, 2005, CED’s mission 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.

Further details on CED’s authority, mandate and program activities can be found in the Report on Plans and Priorities and in 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 framework designed to meet financial information needs with respect to spending authorities. Appendix 5.1, Statement of authorities, includes CED’s spending authorities granted by Parliament and used by CED in a manner that is consistent with the Main Estimates for the 2015-2016 fiscal year.

The prior authorization of Parliament is required before funds 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.

1.3 CED financial structure

CED manages its expenditures under two annual votes:

Costs under statutory authorities, which represent payments made under legislation approved previously by Parliament and which are not part of the annual appropriation bills, include such items as the employer’s share of the employee benefits plan.

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

This section provides various financial information for the current fiscal year up to December 31, 2015, including authorities available for the year and expenditures made during the third quarter, compared with the previous fiscal year.

The explanations of variances in the amounts are based on the premise that discrepancies of less than 5% have a minimal impact on the interpretation of the results.

Subsections 2.1 and 2.2, as well as the tables in the appendices, provide the details of this financial information.

2.1 Analysis of authorities

At the end of the second quarter, CED’s annual authorities totalled $263 million. The level of available authority remains the same in the third quarter.

When we compare the current authorities for fiscal year 2015-2016 ($263 million) to the authorities during the same period in 2014-2015 ($257.1 million), we see a slight increase of $5.9 million in funding for this year. This increase can be broken down into the following: a decrease of $0.1 million in Vote 1 expenditures (net operating expenditures), an increase of $5.8 million in Vote 5 expenditures (grants and contributions) and an increase of $0.2 million in budgetary statutory authorities.

The following graph illustrates the annual budgetary authorities by appropriation as at September 30, 2015, and as at December 31, 2015, compared with the same periods during the previous fiscal year.

Graph 1 - Annual budgetary authorities by appropriation as at September 30, 2015, and as at December 31, fiscal year 2015-2016, compared with 2014-2015

Graph 1 - Annual budgetary authorities by appropriation as at September 30, 2015, and as at December 31, fiscal year 2015–2016, compared with 2014–2015

Graph 1 – Long Description

Annual budgetary authorities by appropriation as at September 30, 2015, and as at December 31, fiscal year 2015-2016, compared with 2014-2015 (long description):

Analysis of annual budgetary authorities by appropriation: Subdivided into three sections, this graph provides an overview of net available budget authorities by appropriation (Vote 1—net operating expenditures, Vote 5—grants and contributions, and statutory authorities) as at September 30, 2015 and as at December 31, 2015, including a comparison with September 30 and December 31, 2014.

As at December 31, 2015, Vote 1 authorities (net operating expenditures) totalled $40.2M, compared with $40.3M in 2014; Vote 5 authorities (grants and contributions) $218.0M compared with $212.2M in 2014; and statutory authorities $4.8M, compared with $4.6M in 2014-2015.

As at September 30, 2015, Vote 1 authorities (net operating expenditures) totalled $40.2M, compared with $37.9M in 2014; Vote 5 authorities (grants and contributions) $218.0M, compared with $205.3M in 2014; and statutory authorities $4.8M, compared with $4.6M in 2014-2015.

Vote 1 authorities (net operating expenditures)

Authorities as at December 31, 2015, are identical to those as at September 30, 2015. A non-significant difference of $0.1 million is observed when authorities as at December 31, 2014, are compared with those from 2015.

Vote 5 authorities (grants and contributions)

Authorities did not fluctuate between the second and third quarters of 2015-2016.

As at December 31, 2014, the available annual Vote 5 authorities totalled $212.2 million. The equivalent amount as at December 31, 2015, ($218.0 million) represents an increase of $5.8 million (3.0%). This difference is not considered significant.

2.2 Analysis of expenditures

Total CED expenditures recorded during the third quarter of 2015-2016 totalled $58.9 million, compared to $45.9 million for the same period last year. This represents a net increase of $13.0 million (28%) compared with the previous fiscal year. This difference is explained by an increase of $0.4 million in Vote 1 (net operating expenditures) and legislative expenditures and an increase of $12.6 million in Vote 5 expenditures (grants and contributions).

The total year-to-date expenditures as at December 31, 2015, were $142.4 million, compared with $121.5 million for the same period last year (17% increase this year). This difference can be explained by the following:

The following graph illustrates the third-quarter and year-to-date expenditures per vote, compared with the previous fiscal year.

Graph 2 – Third quarter and year to date expenditures as at December 31 by appropriation, fiscal year 2015-2016, compared with 2014-2015

Third quarter and year to date expenditures as at December 31 by appropriation, fiscal year 2015–2016, compared with 2014–2015

Graph 2 - Long Description

Analysis of third quarter and year to date expenditures as at December 31 by appropriation, for fiscal year 2015-2016, compared with 2014-2015: Subdivided into three sections (Vote 1—net operating expenditures, Vote 5—grants and contributions, and statutory authorities).

For the third quarter 2015-2016, Vote 1 authorities (net operating expenditures) totalled $9.0M, compared with $8.6M in 2014-2015; year to date Vote 5 authorities (grants and contributions) $48.7M, compared with $36.1M in 2014-2015; and year to date statutory authorities $3.6M, compared with $3.5M in 2014-2015.

As at December 31, 2015, year to date Vote 1 authorities (net operating expenditures) totalled $25.5M, compared with $26.4M in 2014-2015; year to date Vote 5 authorities (grants and contributions) $113.3M, compared with $91.6M in 2014-2015; and year to date statutory authorities $3.6M, compared with $3.5M in 2014-2015.

Vote 1 expenditures (net operating expenditures)

The net operating expenditures for the third quarter of 2015-2016 totalled $9.0 million, compared with $8.6 million for the same period in 2014-2015. This represents an increase of $0.4 million (4.0%). The difference is therefore not significant.

The year-to-date expenditures recorded in 2015-2016 totalled $25.5 million compared with $26.4 million in 2014-2015, i.e., 4 % less this year. In the first quarter of 2014-2015, the Government of Canada made a one-time transition payment as part of the implementation of the arrears pay system, entailing an expenditure of close to $1 million.

(For further details on these expenditures, see Appendix 5.2, Departmental budgetary expenditures by standard object).

Vote 5 expenditures (grants and contributions)

With regard to Vote 5, the expenditures made this quarter ($48.7 million) when compared to those made during the third quarter of 2014-2015 ($36.1 million), show an increase in expenditures of $12.6 million (35%). This increase is attributable to the rate at which clients submitted their claims.

The year-to-date expenditures for 2015-2016 increased by $21.7 million (24%), compared with the previous fiscal year. This increase can be explained by the fact that some initiatives have been more active in 2015-2016 (e.g., Local Investment Initiative and Canadian initiative for the economic diversification of communities reliant on chrysotile). There were also more claims in 2015-2016 and the average amount per claim was higher.

(For further details on these expenditures, see Appendix 5.2, Departmental budgetary expenditures by standard object).

Section 3: Risks and Uncertainties

To achieve its results, CED needs to have an overview of the changing factors that have a marked impact on its environment and activities, and must integrate these factors into its decision-making. Integrating risk management into departmental planning allows CED to implement appropriate risk management strategies in order to achieve results.

Since CED has a mandate to promote economic development, its main risk « economic risk and institutional capacity » is directly related to changes in the economic growth outlook for Quebec and Canada. Its mandate is also influenced by the supply of funding from other levels of government and the private sector, as well as by the potential postponement of investment decisions by SMEs. To mitigate this risk, CED continually monitors changes in provincial, national and international economic environments as well as provincial and national programs.

CED regularly monitors the progress and effectiveness of risk mitigation strategies, through a number of budget review processes and activities, and by analyzing expenditures and budget forecasts 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 impacted this quarter’s results.

Approval by senior officials

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


On                               

 

Statement of Authorities (unaudited)

For the quarter ended December 31, 2015
Fiscal year 2015-2016
(in thousands of dollars)
Fiscal year 2014-2015
(in thousands of dollars)
Total available for use for the year ending March 31, 2016* Used during the quarter ended December 31, 2015 Year-to-date used at quarter end Total available for use for the year ending March 31, 2015* Used during the quarter ended December 31, 2015 Year-to-date used at quarter-end
Vote 1 – Net operating expenditures 40,162 9,024 25,498 40,300 8,638 26,446
Vote 5 – Grants and contributions 217,996 48,667 113,296 212,168 36,070 91,596
Total budgetary statutory authorities 4,819 1,205 3,615 4,624 1,156 3,468
Non-budgetary authorities - - - - - -
Total authorities 262,978 58,895 142,409 257,092 45,865 121,510

* 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 December 31, 2015
  Fiscal year 2015-2016
(in thousands of dollars)
Fiscal year 2014-2015
(in thousands of dollars)
  Planned expenditures for the year ending March 31 2016* Expended during the quarter ended December 31, 2015 Year-to-date used at quarter end Planned expenditures for the year ending March 31 2015* Expended during the quarter ended December 31, 2014 Year-to-date used at quarter end
Staff 33,506 8,548 24,647 32,846 8,119 24,607
Transport and communication 1,607 229 624 2,103 195 637
Information 689 26 90 593 72 159
Professional and special services 6,656 1,246 3,014 4,604 1,240 2,917
Leasing 918 38 341 988 62 302
Repair and maintenance 115 5 14 99 6 15
Utilities, materials and supplies 344 32 92 301 28 85
Acquisition of land, buildings and works 0 0 0 0 0 0
Acquisition of machinery and equipment 1,033 103 269 1,409 53 213
Transfer Payments 217,996 48,667 113,296 212,168 36,070 91,596
Other subsidies and payments 115 1 24 1,981 18 978
Total net budgetary expenditures 262,978 58,895 142,409 257,092 45,865 121,510

* 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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