Public Safety Canada Quarterly Financial Report
For the quarter ended December 31, 2018

Table of Contents

1.0 Introduction

This quarterly financial report for the period ending December 31, 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 for 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, Supplementary Estimates (A), 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 December 31, 2018 and December 31, 2017 for the Department's combined:

Image description

Starting from the left hand side, the “first” column in the graph indicates that the Department authorities are at $1,160.0 million for fiscal year 2018-19. The year-to-date expenditures of $343.8 million reported at the end of the third quarter of the 2018-19 fiscal year are shown under the “second” column. The expenditures of $147.9 for the period ended December 31, 2018 (i.e. third quarter) are presented under the “third” column. The “fourth” column in the graph depicts the 2017-18 authorities which were at $1,087.8 million at the end of December 2017. The 2017-18 year-to-date expenditures of $479.9 million are shown under the “fifth” column. The Departments’ actual expenditures incurred in the third quarter of 2017-18 were $288.0 million and are shown under the “sixth” column of the graph.

Notes: (1) The 2018-19 TB Central Votes include $3,980K for Budget 2018 authorities, $6,173K for the Operating Budget Carry Forward, $1,468K for the compensation adjustments and $913K for the eligible paylist expenditures. (2) Supplementary Estimates (A) is a negative amount due to transfers out to the Royal Canadian Mounted Police for the First Nations Policing Program.

2.1 Significant Changes to Authorities

For the period ending December 31, 2018, the authorities provided to the Department include Main Estimates, Budget 2018 authorities, Supplementary Estimates (A), and TB Central Vote transfers. The 2017-18 authorities for the same period included Main Estimates, Supplementary Estimates (A) and (B), and TB Central Vote transfers. The Statement of Authorities table presents a net increase of $72.3 million (6.6 percent) compared to those of the same period of the previous year (from $1,087.8 million to $1,160.0 million).

Operating Expenditures authorities have increased by $14.9 million (10.4 percent) (from $142.8 million to $157.6 million) mainly due to:

These increases are offset by the following decreases:

Grants and Contributions (G&C) authorities have increased by $56.1 million (6.0 percent) (from $929.8 million to $985.9 million) mainly due to:

These increases are offset by the following decreases:

Budgetary Statutory authorities have increased by $1.3 million (8.4 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

Year-to-Date Expenditures

For the period ending December 31, 2018, the Departmental Budgetary Expenditures by Standard Object table presents a net decrease of $136.1 million (28.4 percent) in Public Safety's year-to-date (YTD) expenditures compared to the previous year (from $479.9 million to $343.8 million). This decrease is mostly due to:

These decreases are offset by:

Third Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended December 31, 2018 have decreased by $140.2 million (48.7 percent) (from $288.0 million to $147.9 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

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 risk and 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 71 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 71 events is $2.4 billion as of December 31, 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:

The DFAA liability has increased by $334.6 million from $2.06 billion in the second quarter to $2.40 billion in the third quarter. This increase in the DFAA liability was mainly due to several approved adjustments made during the third quarter such as the following increases:

Offset by the following decreases:

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

Budget 2018 announced funding for the Communications Security Establishment (CSE) to create the new Canadian Centre for Cyber Security. On the recommendation of the Prime Minister and in compliance with the Order in Council signed and published on August 23, 2018, Public Safety Canada transferred the control and supervision of the Canadian Cyber Incident Response Centre (CCIRC) to the CSE on October 1, 2018. The financial impacts of the transfer will be reflected in future quarterly financial reports.

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: February 18, 2019

Caroline Weber
Chief Financial Officer and Assistant
Deputy Minister, Corporate Management Branch
Public Safety Canada
Ottawa (Canada)
Date: February 14, 2019

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 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.
Fiscal year 2017-18 (in dollars)
Total available for use for the year ended March 31, 2018(1) Used during the quarter ended December 31, 2017 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 142,764,393 31,604,247 95,465,155
Vote 5 - Grants and Contributions 929,749,169 252,733,275 373,277,592
Employee Benefit Plans (EBP) 15,163,976 3,684,485 11,053,455
Minister's Salary and Motor Car Allowance 84,400 21,150 63,450
TOTAL AUTHORITIES 1,087,761,938 288,043,157 479,859,652

(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 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. 
Fiscal year 2017-18 (in dollars)
Planned expenditures for the year ended March 31, 2018(1) Expended during the quarter ended December 31, 2017 Year to date used at quarter-end
Expenditures:
Personnel 117,631,829 28,681,302 89,955,901
Transportation and communications 4,057,918 875,074 2,011,969
Information 5,002,052 660,939 1,460,665
Professional and special services 22,707,285 4,115,706 9,671,927
Rentals 4,875,420 1,105,603 3,333,135
Repair and maintenance 777,775 131,055 413,493
Utilities, material and supplies 1,444,130 83,566 257,189
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 4,103,509 168,611 840,614
Transfer payments 929,749,169 252,733,275 373,277,592
Public debt charges - - -
Other subsidies and payments 112,850 (96,238) 526,337
Total gross budgetary expenditures 1,090,461,938 288,458,893 481,748,823
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 415,736 1,889,171
Total net budgetary expenditures 1,087,761,938 288,043,157 479,859,652
(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.
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