Public Safety Canada Quarterly Financial Report
For the quarter ended September 30, 2019

Table of Contents

1.0 Introduction

This quarterly financial report for the period ending September 30, 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 September 30, 2019 and September 30, 2018 for the Department’s combined:

Comparison of Budgetary Authorities, Year to Date Expenditures and Quarterly Expenditures as of September 30, 2019 and September 30, 2018 (in thousands of dollars)

Comparison of Budgetary Authorities, Year to Date Expenditures and Quarterly Expenditures as of September 30, 2019 and September 30, 2018 (in thousands of dollars)

Image description

Starting from the left hand side, the “first” column in the graph indicates that the Department authorities are at $983.5 million for fiscal year 2019-20. The year-to-date expenditures of $287.6 million reported at the end of the second quarter of the 2019-20 fiscal year are shown under the “second” column. The expenditures of $195.6 for the period ended September 30, 2019 (i.e. second quarter) are presented under the “third” column.  The “fourth” column in the graph depicts the 2018-19 authorities which were at $1,171.0 million at the end of September 2018. The 2018-19 year-to-date expenditures of $195.9 million are shown under the “fifth” column. The Departments’ actual expenditures incurred in the second quarter of 2018-19 were $111.1 million and are shown under the “sixth” column of the graph.

Note: (1) The 2019-20 Treasury Board (TB) Central Votes include $5.8M for the Operating Budget Carry Forward, $2.5M for TB Vote 5 allotment to the Canadian Red Cross in support of the 2019 flood recovery efforts across Canada 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 September 30, 2019 (Protecting Canada’s Critical Infrastructure from Cyber Threats and Protecting Community Gathering Places from Hate Motivated Crimes). (3) The amount of $65M 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 September 30, 2019, the authorities provided to the Department include Main Estimates, Budget 2019 approved items, TB Central Vote transfers and Statutory Grant. The 2018-19 authorities for the same period included Main Estimates, Budget 2018 approved items, and TB Central Vote transfers. The Statement of Authorities table presents a net decrease of $187.6 million (16.0 percent) compared to those of the same period of the previous year (from $1,171.0 million to $983.5 million).

Operating Expenditures authorities have decreased by $4.0 million (2.7 percent) (from $147.3 million to $143.3 million) mainly due to:

These decreases are offset by the following increases:

Grants and Contributions (G&C) authorities have decreased by $183.7 million (18.2 percent) (from $1,007.9 million to $824.2 million) mainly due to:

These decreases are offset by the following increases:

Budgetary Statutory authorities have increased by $89.4K (0.6 percent) in 2019-20 mostly due to the new Minister of Border Security and Organized Crime Reduction salary and car allowance.

2.2 Significant Variances from Previous Year Expenditures

Year-to-Date Expenditures

For the period ending September 30, 2019, the Departmental Budgetary Expenditures by Standard Object table presents a net increase of $91.7 million (46.8 percent) in Public Safety’s year-to-date (YTD) expenditures compared to the previous year (from $195.9 million to $287.6 million). This increase is mostly due to:

These increases are offset by:

Second Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended September 30, 2019 have increased by $84.5 million (76.0 percent) (from $111.1 million to $195.6 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

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. As at the last update presented in the June 30, 2019 Quarterly Financial Report, there are 66 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. The next update will be presented in December 31st, 2019 Quarterly Financial Report.

Public Safety’s total outstanding share of liability under the DFAA in regards to these 66 events is $2.5 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:

Since the last update presented in the December 31st, 2018 Quarterly Financial Report, the DFAA liability has increased by $100 million from $2.4 billion in the third quarter of 2018-19 to $2.5 billion in the first quarter of 2019-20. Variations in the DFAA liability are mainly attributable to:

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 July 31, 2019 the Prime Minister Justin Trudeau announced changes in the senior ranks of the Public Service. Monik Beauregard became, on August 12, 2019, Associate Deputy Minister of Public Safety Canada. Further to this, Monik Beauregard became acting Deputy Minister on September 12, 2019.

5.0 Approval by Senior Officials

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

Monik Beauregard
A/Deputy Minister
Public Safety Canada
Ottawa (Canada)
Date: November 22, 2019

Patrick Amyot, CPA, CMA
Chief Financial Officer Public Safety Canada
Ottawa (Canada)
Date: November 22, 2019

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 September 30, 2019 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 143,293,915 40,646,692 72,795,691
Vote 5 & Statutory - Grants and Contributions 824,205,353 151,124,707 207,206,568
Employee Benefit Plans (EBP) 15,787,393 3,757,718 7,515,436
Minister's Salary and Motor Car Allowance 175,400 43,750 87,500
TOTAL AUTHORITIES 983,426,061 195,572,867 287,605,195

(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 September 30, 2018 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 147,309,901 32,748,870 62,202,551
Vote 5 - Grants and Contributions 1,007,864,906 74,504,638 125,912,264
Employee Benefit Plans (EBP) 15,787,374 3,871,411 7,742,822
Minister's Salary and Motor Car Allowance 86,000 21,500 43,000
TOTAL AUTHORITIES 1,171,048,181 111,146,419 195,900,637

(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 September 30, 2019 Year to date used at quarter-end
Expenditures:
Personnel 118,637,053 30,555,414 63,006,777
Transportation and communications 3,241,836 779,938 1,440,717
Information 5,111,963 1,105,730 1,540,570
Professional and special services 18,785,985 5,539,135 7,752,348
Rentals 4,924,906 1,383,834 1,965,761
Repair and maintenance 952,037 166,214 173,858
Utilities, material and supplies 1,399,439 109,107 227,628
Acquisition of land, buildings and works 3,456,500 - -
Acquisition of machinery and equipment 3,060,850 1,506,595 1,726,650
Transfer payments 824,205,353 151,124,707 207,206,568
Public debt charges - - -
Other subsidies and payments 2,386,141 3,699,643 4,194,568
Total gross budgetary expenditures 986,162,061 195,970,317 289,235,445
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 397,450 1,630,250
Total net budgetary expenditures 983,462,061 195,572,867 287,605,195

(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 September 30, 2018 Year to date used at quarter-end
Expenditures:
Personnel 119,261,262 28,505,566 58,514,512
Transportation and communications 4,907,300 713,719 1,294,539
Information 4,055,129 711,323 1,068,273
Professional and special services 25,063,959 5,520,655 7,517,210
Rentals 6,575,983 440,010 1,182,193
Repair and maintenance 1,161,310 72,805 107,004
Utilities, material and supplies 1,256,686 115,346 185,514
Acquisition of land, buildings and works - - -
Acquisition of machinery and equipment 3,412,974 361,420 592,763
Transfer payments 1,007,864,906 74,504,638 125,912,264
Public debt charges - - -
Other subsidies and payments 188,672 264,937 833,627
Total gross budgetary expenditures 1,173,748,181 111,210,419 197,207,899
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 64,000 1,307,262
Total net budgetary expenditures 1,171,048,181 111,146,419 195,900,637

(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

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