Quarterly Financial Report for the quarter ended June 30, 2021

Statement outlining results, risks and significant changes in operations, personnel and programs

Table of contents

1. Introduction

This quarterly financial report should be read in conjunction with the Main Estimates for fiscal year 2021-22. It has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. For the purposes of both the Main and Supplementary Estimates, the Department is referred to as the Department of Indigenous Services Canada.

The Department of Indigenous Services Canada (DISC) was first established by Order–in-Council (P.C. 2017-79) on November 30, 2017. The Budget Implementation Act (BIA) of 2019 established Indigenous Services Canada (ISC) with the enactment of the Department of Indigenous Services Act (DISA) and removed DISC from Schedule I.1. For financial reporting purposes this is viewed as a continuation of the work initiated in 2017 and as such, DISC and ISC are considered a continuous entity for the 2021-22 fiscal year.

The quarterly financial report has not been subject to an external audit or review.

1.1 Authority, Mandate and Departmental Results

Indigenous Services Canada (ISC) works collaboratively with partners to improve quality of life and access to high quality services for Indigenous Peoples. Its vision is to support First Nations, Inuit and Métis to design, manage and deliver services to their communities.

The Minister of Indigenous Services is responsible for this organization.

Further details on ISC's authority, mandate and department results can be found in Part II of the Main Estimates and the Departmental Plan.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department's spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates for the 2021-22 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities.

The authority of Parliament is required before money 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.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of the fiscal quarter and the fiscal year-to-date (YTD) results

This section:

As of the first quarter, the Department has total budgetary authorities of $18.9 billion for 2021-22. Indigenous Services Canada (ISC) is composed of the following sectors: Regional Operations (RO), the Education and Social Development Program and Partnerships (ESDPP), Lands and Economic Development (LED), First Nations Child and Family Services (FNCFS), First Nations and Inuit Health Branch (FNIHB) and Internal Services.

Highlights of the fiscal quarter and the year-to-date results (Unaudited)
(In thousands dollars)
  2021-22 Budgetary Authorities to March 31,2022 2020-21 Budgetary Authorities to March 31, 2021 Variance in Budgetary Authorities 2021-22 Q1 Expenditures 2020-21 Q1 Expenditures Variance between 2021-22 Q1 and 2020-21 Q1 Expenditures Year-to-date Expenditures as at Q1 2021-22 (June 30, 2021) Year-to-date Expenditures as at Q1 2020-21 (June 30, 2020) Variance between 2021-22 year-to-date and 2020-21 year-to-date Expenditures
Vote 1: Operating Expenditures 3,466,584 1,484,835 1,981,749 459,178 334,499 124,679 459,178 334,499 124,679
Vote 5: Capital Expenditures 37,227 5,124 32,103 82 408 (326) 82 408 (326)
Vote 10: Grants and Contributions 15,276,153 8,786,647 6,489,506 3,631,846 3,291,036 340,810 3,631,846 3,291,036 340,810
Statutory Authorities 158,962 1,065,155 (906,193) 23,157 422,814 (399,657) 23,157 422,814 (399,657)
Total 18,938,926 11,341,761 7,597,165 4,114,263 4,048,757 65,506 4,114,263 4,048,757 65,506

2.1 Statement of voted and statutory authorities

As per the highlights of the fiscal quarter and the year-to-date results table, total budgetary authorities available for use increased by $7.6 billion from the previous year:

  • Vote 1 authorities increased by $2.0 billion
  • Vote 5 authorities increased by $32 million
  • Vote 10 authorities increased by $6.5 billion
  • Statutory authorities decreased by $906 million

The net increase of $2.0 billion in Operating authority Vote 1 is mainly due to the following:

  • $147 million increase, considering that the authority at the end of Q1 of 2020-21 was lower by $487 million, due to the COVID-19 Pandemic response. Delayed the final approval by Parliament of the Main Estimates, as the full supply for the 2020-21 Main Estimates was not received until December 2020. For 2021-22, full supply was received by the end of June 2021 The increases are related to the following programs
    • $83 million for Public health responses in Indigenous communities (COVID-19);
    • $42 million for Non-Insured Health Benefits;
    • $27 million for Compensation adjustments;
    • $7 million Income Assistance;
    • $7 million for Safe, clean drinking water in First Nation communities;
    • $6 million for Implementation of the Act (Child and Family Services C-92);

    Offset by a funding decrease for the following programs

    • $39 million for Indian Residential Schools Settlement Agreement (Budget 2018];
    • $10 million for Indigenous Infrastructure (Budget 2016, Budget 2017, Budget 2018);
    • $7 million for Enhanced First Nations Education Infrastructure Fund (Budget 2014 and Budget 2016).
  • $1.3 billion increase funding as part of the 2021-22 Supplementary Estimates (A):
    • $1,240 million for out-of-court settlements;
    • $41 million for mental health and wellness (Budget 2021);
    • $39 million for the continuation of public health responses in Indigenous communities (COVID-19) (Budget 2021);
    • $16 million for infrastructure projects in Indigenous communities.

The net increase of $32 million in Capital authority (Vote 5) is mainly due to the following:

  • $31 million increase funding as part of the 2021-22 Supplementary Estimates (A):
    • $16 million for Funding for the continuation of public health responses in Indigenous communities (COVID-19);
    • $15 million for Funding for the continuation of public health responses in Indigenous communities (COVID-19) (Budget 2021).

The net increase of $6.5 billion in the Grants and Contributions authority (Vote 10) is mainly due to the following:

  • $542 million increase, considering that the authority at the end of Q1 of 2020-21 was lower by $2.7 billion, due to the COVID-19 Pandemic response, delayed the final approval by Parliament of the Main Estimates, as the full supply for the 2020-21 Main Estimates was not received until December 2020. For 2021-22, full supply was received by the end of June 2021. The increases are related to the following programs
    • $499 million for Safe, clean drinking water in First Nation communities;
    • $120 million for Supportive care in Indigenous communities (COVID-19);
    • $105 million for Elementary and Secondary Education as well as Post-Secondary Education Programs, including annual growth;
    • $92 million for Implementation of the Act (Child and Family Services C-92);
    • $47 million for Governance Capacity and Fiscal Relationship Reforms;
    • $44 million for Income Assistance, including annual growth;
    • $43 million for Healthier First Nations and Inuit communities (Budget 2017);
    • $26 million for British Columbia Tripartite Framework Agreement;

    Offset by a funding decrease for the following programs:

    • $369 million for Indigenous Infrastructure (Budget 2016, Budget 2017, Budget 2018);
    • $137 million for Enhanced First Nations Education Infrastructure Fund (Budget 2014 and Budget 2016);
    • $48 million for Indian Residential Schools Settlement Agreement(Budget 2018).
  • $3.3 billion increase funding as part of the 2021-22 Supplementary Estimates (A):
    • $1,050 million for First Nations Child and Family Services, Canadian Human Rights Tribunal orders implementation and non-compliance motion settlement;
    • $760 million for the Indigenous Community Support Fund (COVID-19) (Budget 2021);
    • $423 million for the continuation of public health responses in Indigenous communities(COVID-19) (Budget 2021);
    • $330 million for Indigenous communities affected by disruptions to their revenues which are necessary to support programs and services (COVID-19);
    • $290 million for the operations and maintenance of infrastructure in First Nations communities on reserve (Budget 2021);
    • $209 million for infrastructure projects in Indigenous communities;
    • $187 million to support Indigenous businesses (COVID-19) (Budget 2021).

The net decrease of $906 million in Statutory authority (Operating and Grants & Contributions) is due to:

  • $950 million for the Public Health Events of National Concern Payments Act (Indigenous Communities, Income Assistance, Urban and Indigenous Organizations, Family Violence Prevention, Canada's Initial Response to COVID–19);
  • $30 million for the Contributions in connection with First Nations Infrastructure.

Offset by an increase of $61 million for Canada Community - Building Fund.

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $4.1 billion for the quarter ended June 30, 2021.

Departmental Budgetary Expenditures were $65.5 million higher than the same quarter in 2020-21. As per the Departmental Budgetary Expenditures by Standard Object tables, the increase for the quarter is mainly due to the changes listed below:

The following table provides a detailed explanation of these changes by standard object (Unaudited)
(In thousands dollars)
Standard Object Changes to Standard Object expenditures Variance between 2021-22 Q1 and 2020-21 Q1 Expenditures (June 30, 2021) Variance between 2021-22 year-to-date and 2020-21 Expenditures (April 1 to June 30, 2021)
Expenditures:
1-Personnel
 The increase is mainly due to additional staffing, collective agreement renewal and Indigenous Services Canada Care Transporting at biweekly intervals rather than monthly for Clinical and Client Care Program 22,041 22,041
2-Transportation and communications
 The Increase is mainly due to the lifting of travel restrictions related to Medical Travel for Non-Insured Health Benefits and the increase of the number of paid pre-travel self-isolations that are required before every assignment for Health and Human Resources Program 11,692 11,692
3-Information
   1,181 1,181
4-Professional and special services
 The increases is mainly due to the lifting of COVID restrictions for Dental, Mental Health and Vision benefits for Non-Insured Health Benefits and the increase of the number of paid pre-travel self-isolations that are required before every assignment for Health and Human Resources Program 54,043 54,043
5-Rentals
   1,379 1,379
6-Purchased repair and maintenance
   (348) (348)
7-Utilities, materials and supplies
 The increase is mainly due to an extra payment from Express Scripts for medical supplies and equipment as well as Pharmacy. It also relates to regular growth. 16,310 16,310
8-Acquisition of land, buildings and works
   72 72
9-Acquisition of machinery and equipment
   (2,024) (2,024)
10-Transfer payments
 Transfer payment expenditures* (50,122) (50,122)
11-Public debt charges
   0 0
12-Other subsidies and payments
   11,271 11,271
Total gross budgetary expenditures
   65,495 65,495
Less Revenues netted against expenditures   0 0
Services and Benefits to Individuals
   11 11
Total Revenues netted against expenditures
   11 11
Total net budgetary expenditures   65,506 65,506

*The net decrease of $50 million in transfer payment expenditures is mainly due to the following:

  • $99 million decrease for Emergency Management Assistance primarily due to the sunsetting of statutory funds related to the Indigenous Community Support Funding measure in response to COVID-19 Pandemic;
  • $61 million decrease for Urban Programming for Aboriginal Peoples due to the sunsetting of statutory funds related to the Indigenous Community Support Funding measure in response to COVID-19 Pandemic;
  • $55 million decrease for Indigenous Entrepreneurship and Business Development due to the sunsetting of statutory funds related to the Indigenous Community Support Funding measure in response to COVID-19 Pandemic;
  • $29 million decrease for Communicable Disease Control Management due to the sunsetting of statutory funds related to the Indigenous Community Support Funding measure in response to COVID-19 Pandemic.

Offset by an increase for:

  • $49 million increase in Fiscal Year 2021-22 for Jordan Principle First Child Initiative due to a delay in Q1 2020-21 in the finalization of contribution agreements.
  • $38 million increase for Communicable Disease Control Management due to additional funding received;
  • $34 million increase for Self Determined Services due to the newly signed Regional Education Agreement (REA);
  • $34 million increase for New Fiscal Relationship due to the fact that more First Nations qualified to receive the 10 Year Grant.

3. Risks and uncertainties

The Department continues to proactively and systematically manage and respond to risk through rigorous monitoring, review and challenge functions. However, the COVID-19 pandemic and the rapidly changing environment continue to highlight risks where the Department requires additional focus and agility. The pandemic has created the need for financial flexibility within the Department to ensure the ability to allocate funds to the most pressing issues, while continuing to deliver services and other programs that are essential to addressing underlying social, economic and health issues in communities. In order to do this, the Department is exploring new ways to ensure the systems used for financial management are robust and remain relevant, such as by renewing the budget management framework and strengthening budget forecasting, planning and cash management activities.

With respect to Grants and Contributions, the Department continues to undertake risk assessments on new, existing, and reformed programs as well as a general assessment of each recipient to identify areas of risk. The conduct of recipient and project audits, under the terms of their funding agreements, provides a further opportunity to ensure that funding recipients have appropriate management, financial and administrative controls in place.

The Department will continue to monitor its risk exposure and take action as needed to mitigate the risk of not achieving anticipated results or to deal with emerging pressures. Achievement of ISC's mandate and delivery of programs remains reliant on timely access to required authorities and appropriate levels of funding.

4. Significant changes in relation to Operations, Personnel and Programs

Significant changes in relation to Operations, Personnel and Programs during the first quarter of fiscal year 2021-22 include:

Effective April 6, 2021, Catherine Lappe was appointed Assistant Deputy Minister, Child and Family Services Reform.

Effective April 19, 2021, Danielle White was appointed Assistant Deputy Minister, Special Advisor to the Deputy Minister for Regional Operations.

Effective April 19, 2021, Patrick Boucher was appointed Senior Assistant Deputy Minister, First Nations and Inuit Health Branch.

5. Approval by senior officials

Approved, as required by the Treasury Board Policy on Financial Management:

 

Original signed by
__________________________
Christiane Fox
Deputy Minister, ISC
Date:
City: Gatineau (Canada)

Original signed by
__________________________
For / Philippe Thompson
Chief Finances, Results and Delivery Officer
Date: August 24, 2021
City: Gatineau (Canada)

6. Appendix

Statement of Authorities (Unaudited)
(In thousands dollars)
  Fiscal Year 2021-22 Fiscal Year 2020-21
  Total available for use for the year ending March 31, 2022 Used during the quarter ended June 30, 2021 Year to date used at quarter ended June 30, 2021 Total available for use for the year ending March 31, 2021 Used during the quarter ended June 30, 2020 Year to date used at quarter ended June 30, 2020
Vote 1: Operating expenditures 3,466,584 459,178 459,178 1,484,835 334,499 334,499
Vote 5: Capital expenditures 37,227 82 82 5,124 408 408
Vote 10: Grants and Contributions 15,276,153 3,631,846 3,631,846 8,786,647 3,291,036 3,291,036
S- Statutory Authorities: Operating expenditures
Contributions to employee benefit plan
 94,054 21,368 21,368 80,733 20,183 20,183
Court awards–Crown Liability and Proceedings Act
 0 211 211 0 0 0
Minister of Indigenous Services Canada – Salary and motor car allowance
 91 23 23 89 22 22
Liabilities in respect of loan guarantees made ot Indian for Housing and Economic Development
 2,000 0 0 2,000 0 0
Payments related to Public Health Events of National Concern and income support
 0 0 0 2,100 9,089 9,089
Other
 0 618 618 0 1,651 1,651
S- Statutory Authorities: Transfer Payments
Gas Tax Fund - Financing municipal infrastructure
 0 798 798 0 500 500
Contributions in connection with First Nations Infrastructure
 0 0 0 29,684 0 0
Indian Annuities Treaty payments
 2,100 139 139 0 37 37
Payments related to Public Health Events of National Concern and income support
 0 0 0 950,548 391,332 391,332
Payments related to Public Health Events of National Concern and income support
 60,718 0 0 0 0 0
Subtotal Statutory Authorities 158,962 23,157 23,157 1,065,155 422,814 422,814
Total Authorities 18,938,926 4,114,263 4,114,263 11,341,761 4,048,757 4,048,757
 
Departmental budgetary expenditures by standard object (Unaudited)
(In thousands dollars)
  Fiscal Year 2021-22 Fiscal Year 2020-21
  Planned expenditures for the year ending March 31, 2022 Expended during the quarter ending June 30, 2021 Year to date used at quarter ended June 30, 2021 Planned expenditures for the year ending March 31, 2021 Expended during the quarter ending June 30, 2020 Year to date used at quarter ended June 30, 2020
Expenditures
1-Personnel
 707,453 147,079 147,079 524,097 125,038 125,038
2-Transportation and communications
 408,838 51,687 51,687 314,564 39,995 39,995
3-Information
 3,452 1,297 1,297 2,360 116 116
4-Professional and special services
 723,302 103,139 103,139 542,971 49,096 49,096
5-Rentals
 17,323 3,377 3,377 12,995 1,998 1,998
6-Purchased repair and maintenance
 6,826 270 270 9,781 618 618
7-Utilities, materials and supplies
 587,850 146,460 146,460 469,669 130,150 130,150
8-Acquisition of land, buildings and works
 0 72 72 2,000 0 0
9-Acquisition of machinery and equipment
 37,227 9,168 9,168 9,424 11,192 11,192
10-Transfer payments
 15,338,971 3,632,783 3,632,783 9,620,918 3,682,905 3,682,905
11-Public debt charges
 0 0 0 0 0 0
12-Other subsidies and payments
 1,202,000 17,792 17,792 2,000 8,521 8,521
Total gross budgetary expenditures
 19,033,242 4,115,124 4,115,124 11,510,780 4,049,629 4,049,629
Less Revenues netted against expenditures
Services and Benefits to Individuals
 (94,316) (861) (861) (169,019) (872) (872)
Total Revenues netted against expenditures
 (94,316) (861) (861) (169,019) (872) (872)
Total net budgetary Expenditures 18,938,926 4,114,263 4,114,263 11,341,761 4,048,757 4,048,757

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