Public Safety Canada Quarterly Financial Report
For the quarter ended June 30, 2018

Table of contents

1.0 Introduction

This quarterly financial report for the period ending June 30, 2018 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 Equality and Growth a Strong Middle Class (Budget 2018)

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 2018-19 Departmental Plan and the 2018-19 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 2018 for the 2018-19 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 June 30, 2018 and June 30, 2017 for the Department’s combined:

Image description

Budgetary Authorities and Expenditures Comparison

Starting from the left hand side, the “first” column in the graph indicates that the Department authorities are at $1,164.9 million for fiscal year 2018-19. The year-to-date expenditures of $84.8 million reported at the end of the first quarter of the 2018-19 fiscal year are shown under the “second” column.   The “third” column in the graph depicts the 2017-18 authorities which were at $1,057.1 million at the end of June 2017.  The 2017-18 first quarter expenditures of $96.0 million are shown under the “fourth” column. 

Note: The 2018-19 Budget 2018 amounted to $3,127K. Public Safety’s appropriations have increased to $1,164,876K as of June 30, 2018. The 2017-18 SEA was $4,496K.

2.1 Significant Changes to Authorities

For the period ending June 30, 2018, the authorities provided to the Department include Main Estimates and Budget 2018.  The 2017-18 authorities for the same period included Main Estimates and Supplementary Estimates (A).  The Statement of Authorities table presents a net increase of $107.8 million (10.2 percent) compared to those of the same period of the previous year (from $1,057.1 million to $1,164.9 million).

Operating Expenditures authorities have increased by $13.7 million (10.7 percent) (from $127.5 million to $141.1 million) mainly due to:

These increases are offset by the following decreases:

Grants and Contributions (G&C) authorities have increased by $93.3 million (10.2 percent) (from $914.5 million to $1,007.9 million) mainly due to:

These increases are offset by the following decrease:

Budgetary Statutory authorities have increased by $0.8 million (5.2 percent) in 2018-19 mostly as a result of the Employee Benefit Plan (EBP) costs associated with the change in the Department budgetary requirements for salary and EBP.

2.2 Significant Variances from Previous Year Expenditures

First Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended June 30, 2018 have decreased by $11.2 million (11.7 percent) (from $96.0 million to $84.8 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

Offset by the following decreases:

Offset by the following increases:

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.

There are currently 74 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 74 events is $1.96 billion as of June 30, 2018, 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:

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 over and under payments in a timely manner and continues to apply ongoing mitigating controls which were implemented in 2016.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

5.0 Approval by Senior Officials

Approved as required by the Policy on Financial Resource Management, Information and Reporting:

Malcolm Brown
Deputy Minister
Public Safety Canada
Ottawa (Canada)
Date: August 17, 2018

Caroline Weber
Chief Financial Officer and Assistant Deputy Minister
Corporate Management Branch
Public Safety Canada
Ottawa (Canada)
Date: August 15, 2018

6.0 Statement of Authorities (unaudited)

Fiscal year 2018-19 (in dollars)
Total available for use for the year ending March 31, 2019 (1) Used during the quarter ended June 30, 2018 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 141,137,237 29,453,681 29,453,681
Vote 5 - Grants and Contributions 1,007,864,906 51,407,626 51,407,626
Employee Benefit Plans (EBP) 15,787,374 3,871,411 3,871,411
Minister's Salary and Motor Car Allowance 86,400 21,500 21,500
TOTAL AUTHORITIES 1,164,875,517 84,754,218 84,754,218
(1) Includes only authorities available for use and granted by Parliament at quarter end.
Fiscal year 2017-18 (in dollars)
Total available for use for the year ended March 31, 2018 (1) Used during the quarter ended June 30, 2017 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 127,465,602 27,041,546 27,041,546
Vote 5 - Grants and Contributions 914,540,358 65,243,829 65,243,829
Employee Benefit Plans (EBP) 14,999,364 3,684,485 3,684,485
Minister's Salary and Motor Car Allowance 84,400 21,150 21,150
TOTAL AUTHORITIES 1,057,089,724 95,991,010 95,991,010
(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 2018-19 (in dollars)
Planned expenditures for the year ending March 31, 2019(1) Expended during the quarter ended June 30, 2018 Year to date used at quarter-end
Expenditures:
Personnel 119,261,262 30,008,946 30,008,946
Transportation and communications 4,255,650 580,820 580,820
Information 3,504,606 356,950 356,950
Professional and special services 21,676,020 1,996,555 1,996,555
Rentals 5,684,112 742,183 742,183
Repair and maintenance 1,045,102 34,199 34,199
Utilities, material and supplies 1,147,220 70,168 70,168
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 2,947,966 231,343 231,343
Transfer payments 1,007,864,906 51,407,626 51,407,626
Public debt charges - - -
Other subsidies and payments 188,672 568,690 568,690
Total gross budgetary expenditures 1,167,575,517 85,997,480 85,997,480
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal
Support Services
2,700,000 1,243,262 1,243,262
Total net budgetary expenditures 1,164,875,517 84,754,218 84,754,218
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end. 
Fiscal year 2017-18 (in dollars)
Planned expenditures for the year ended March 31, 2018 (1) Expended during the quarter ended June 30, 2017 Year to date used at quarter-end
Expenditures:
Personnel 110,263,117 27,627,242 27,627,242
Transportation and communications 3,625,205 481,736 481,736
Information 1,834,867 226,218 226,218
Professional and special services 19,441,215 1,846,099 1,846,099
Rentals 4,344,385 521,680 521,680
Repair and maintenance 692,756 32,251 32,251
Utilities, material and supplies 1,292,354 75,861 75,861
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 3,654,953 517,260 517,260
Transfer payments 914,540,358 65,243,829 65,243,829
Public debt charges - - -
Other subsidies and payments 100,514 440,085 440,085
Total gross budgetary expenditures 1,059,789,724  97,012,260  97,012,260
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal
Support Services
2,700,000 1,021,250 1,021,250
Total net budgetary expenditures 1,057,089,724 95,991,010 95,991,010
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.
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