Public Safety Canada Quarterly Financial Report for the quarter ended December 31, 2020

Table of Contents

1.0 Introduction

This quarterly financial report for the period ending December 31, 2020 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, Supplementary Estimates (A) and Supplementary Estimates (B).

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 the Deputy Minister.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2020-21 Departmental Plan and the 2020-21 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 for the 2020-21 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, 2020 and December 31, 2019 for the Department’s combined:

Comparison of Budgetary Authorities, Year to Date Expenditures and Quarterly Expenditures as of December 31, 2020 and December 31, 2019

Image description

Starting from the left hand side, the “first” column in the graph indicates that the Department authorities are at $783.8 million for fiscal year 2020-21. The year-to-date expenditures of $443.0 million reported at the end of the third quarter of the 2020-21 fiscal year are shown under the “second” column. The expenditures of $224.2 million for the period ended December 31, 2020 (i.e. third quarter) are presented under the “third” column. The “fourth” column in the graph depicts the 2019-20 authorities which were at $1,016.4 million at the end of December 2019. The 2019-20 year-to-date expenditures of $362.0 million reported at the end of the third quarter of the 2019-20 fiscal year are shown under the “fifth” column. The Departments’ actual expenditures incurred in the third quarter of 2019-20 were $74.4 million and are shown under the “sixth” column of the graph.

Note: (1) The 2020-21 Treasury Board (TB) Central Votes include $5.5M for the Operating Budget Carry Forward and $400 for Compensation Adjustments. (2) The amount of $39.5M included in the authorities column is for a statutory contribution in support of the readiness of the Canadian Red Cross for urgent relief efforts related to COVID-19 pursuant to the Public Health Events of National Concern Payments Act.

2.1 Significant Changes to Authorities

For the period ending December 31, 2020, the authorities provided to the Department include Main Estimates, Supplementary Estimates (A), Supplementary Estimates (B), TB Central Vote transfers and a Statutory Contribution. The 2019-20 authorities for the same period included Main Estimates, Budget 2019 approved items, Supplementary Estimates (A), TB Central Vote transfers and a Statutory Grant. The Statement of Authorities table presents a net decrease of $232.6 million (22.9 percent) compared to those of the same period of the previous year (from $1,016.4 million to $783.8 million).

Operating Expenditures authorities have increased by $1.1 million (0.7 percent) (from $152.1 million to $153.2 million).

Grants and Contributions (G&C) authorities have decreased by $233.3 million (27.5 percent) (from $847.9 million to $614.6 million) primarily attributable to:

These decreases are primarily offset by the following increases:

Budgetary Statutory authorities have decreased by $423.3 thousand (2.6 percent) in 2020-21 primarily attributable to the Minister’s salary and car allowance adjustment related to the departure of Minister Goodale and to the Employee Benefits Plan associated with variances in salary funding levels.

2.2 Significant Variances from Previous Year Expenditures

Year-to-Date Expenditures

For the period ending December 31, 2020, the Departmental Budgetary Expenditures by Standard Object table presents a net increase of $80.9 million (22.4 percent) in Public Safety’s year-to-date (YTD) expenditures compared to the previous year (from $362.0 million to $443.0 million). This increase is primarily attributable to:

These increases are primarily offset by the following decreases:

Third Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended December 31, 2020 have increased by $149.8 million (201.3 percent) (from $74.4 million to $224.2 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

3.0 Risks and Uncertainty

COVID-19

At the onset of the COVID-19 outbreak in March 2020, with the majority of its employees transitioning to working remotely, Public Safety Canada’s (PS) primary focus was to ensure its critical services continued to be delivered. That being said, as time progresses, it has become clear that this disruptive event has not affected the department’s operations and its capacity to continue to deliver on its mandate. While the majority of PS employees are currently working from home, they have demonstrated resiliency and adaptability as they continue to perform their regular work functions. The department established a Pandemic Management Committee to ensure that timely actions are taken, that employees remain well supported, and that decisions are communicated effectively to all staff as the situation continues to evolve.

Disaster Financial Assistance Arrangements

The Disaster Financial Assistance Arrangements (DFAA) contribution program presents a greater level of uncertainty than other 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 60 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 60 events is $2.71 billion, the majority of which is expected to be paid out over the next five years. 

DFAA liability has increased by $30 million from $2.68 billion in the second of 2020-21 to $2.71 billion in the third quarter of 2020-21. Variations in the DFAA liability are mainly attributable to:

The following are the most significant events within Public Safety Canada’s DFAA liability:

Updates to the DFAA liability in result to changes in the estimates of the existing natural disasters are completed and approved twice a year with the last one having been conducted in Summer 2020-21 and reflected in the December 31, 2020 Quarterly Financial Report. The next semi-annual updates will be available and presented in the June 30, 2021 Quarterly Financial Report.

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 November 30, 2020, Talal Dakalbab was appointed Assistant Deputy Minister for the Community Safety and Countering Crime Branch.

On November 30, 2020, Trevor Bhupsingh was appointed Assistant Deputy Minister for the Emergency Management and Programs Branch

On December 7, 2020, the Deputy Minister of Public Safety announced the departure of Todd Cain, Acting Assistant Deputy Minister for the Emergency Management and Programs Branch, effective December 14, 2020.

5.0 Approval by Senior Officials

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

Rob Stewart
Deputy Minister
Public Safety Canada
Ottawa (Canada)

Date: February 18, 2021

Patrick Amyot, CPA, CMA
Chief Financial Officer
Public Safety Canada
Ottawa (Canada)

Date: February 17, 2021

6.0 Statement of Authorities (unaudited)

Fiscal year 2020-21 (in dollars)
  Total available for use for the year ending March 31, 2021(1) Used during the quarter ended December 31, 2020 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 153,217,780 35,265,935 99,951,744
Vote 5 - Grants and Contributions 614,643,511 184,950,320 331,128,244
Employee Benefit Plans (EBP) 15,860,616 3,940,812 11,822,434
Minister's Salary and Motor Car Allowance 89,300 22,300 66,900
TOTAL AUTHORITIES 783,811,207 224,179,367 442,969,322

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

Fiscal year 2019-20 (in dollars)
  Total available for use for the year ended March 31, 2020(1) Used during the quarter ended December 31, 2019 Year to date used at quarter-end
Vote 1 - Net Operating Expenditures 152,081,855 38,992,936 111,788,627
Vote 5 - Grants and Contributions 847,912,447 31,652,872 238,859,440
Employee Benefit Plans (EBP) 16,197,856 3,757,719 11,273,155
Minister's Salary and Motor Car Allowance 175,400 26,579 114,079
TOTAL AUTHORITIES 1,016,367,558 74,430,106 362,035,301

(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 2020-21 (in dollars)
Planned expenditures for the year ending March 31, 2021(1) Expended during the quarter ended December 31, 2020 Year to date used at quarter-end
Expenditures:
Personnel 123,850,606 30,467,678 93,962,441
Transportation and communications 4,110,455 57,349 133,570
Information 5,251,075 450,583 986,244
Professional and special services 24,352,172 5,301,152 12,678,456
Rentals 5,196,470 1,224,913 2,945,609
Repair and maintenance 2,866,753 213,450 266,983
Utilities, material and supplies 610,813 49,906 176,049
Acquisition of land, buildings and works 58,103 - -
Acquisition of machinery and equipment 5,013,346 1,397,130 1,733,453
Transfer payments 614,643,511 184,950,320 331,128,244
Public debt charges - - -
Other subsidies and payments 557,903 281,286 783,198
Total gross budgetary expenditures 786,511,207 224,393,767 444,794,247
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 214,400 1,824,925
Total net budgetary expenditures 783,811,207 224,179,367 442,969,322

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

Fiscal year 2019-20 (in dollars)
Planned expenditures for the year ending March 31, 2020(1) Expended during the quarter ended December 31, 2019 Year to date used at quarter-end
Expenditures:
Personnel 124,737,098 34,788,870 97,795,647
Transportation and communications 3,391,536 1,122,136 2,562,853
Information 5,475,142 264,919 1,805,489
Professional and special services 20,553,920 5,020,865 12,773,213
Rentals 4,994,625 1,089,915 3,055,676
Repair and maintenance 952,037 434,619 608,477
Utilities, material and supplies 1,947,264 131,840 359,468
Acquisition of land, buildings and works 3,456,500 - -
Acquisition of machinery and equipment 3,260,850 357,649 2,084,299
Transfer payments 847,912,447 31,652,872 238,859,440
Public debt charges - - -
Other subsidies and payments 2,386,141 159,231 4,353,799
Total gross budgetary expenditures 1,019,067,558 75,022,916 364,258,361
Less Revenues netted against expenditures:
Interdepartmental Provision of Internal Support Services 2,700,000 592,810 2,223,060
Total net budgetary expenditures 1,016,367,558 74,430,106 362,035,301

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

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