Quarterly Financial Report for the quarter ended September 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 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 second quarter, the Department has total budgetary authorities of $19.0 billion provided in the Main Estimates and Supplementary Estimates (A) for fiscal year 2021-22, as well as budget adjustments approved by Treasury Board up to Q2 of 2021-22 for 2021-22.

Highlights of the fiscal quarter and the year-to-date results (Unaudited)
(In thousands dollars)
Budgetary authority Authorities available for the year ending Expenditures as at Q2 Year-to-date Expenditures
March 31, 2022 March 31, 2021 Variance 2021-22 (September 30, 2021) 2020-21 (September 30, 2020) Variance Q2 2021-22 (April 1 to September 30, 2021) Q2 2020-21 (April 1 to September 30, 2020) Variance
Vote 1: Operating Expenditures 3,500,842 1,524,580 1,976,262 573,897 467,331 106,566 1,033,075 801,830 231,245
Vote 5: Capital Expenditures 38,694 6,758 31,936 1,518 362 1,156 1,600 770 830
Vote 10: Grants and Contributions 15,276,153 8,786,647 6,489,506 2,833,386 2,524,641 308,745 6,465,232 5,815,677 649,555
Statutory Authorities 158,962 1,866,955 (1,707,993) 29,578 846,973 (817,395) 52,735 1,269,787 (1,217,052)
Total 18,974,651 12,184,940 6,789,711 3,438,379 3,839,307 (400,928) 7,552,642 7,888,064 (335,422)
(1) The total Vote 1 expenditures for the quarter ended September 30, 2020 has been updated to reflect a credit of $1,128 to the Statutory item Revenue. The revised expenditure amount for second quarter 2020-21 is $467,331.

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 $6.8 billion from the previous year:

Vote 1 Operating expenditures

The budgetary authorities in 2021-22 has a net increase of $2 billion of which $0,5 billion is the direct result of the delay in approval for the 2020-21 Main Estimates. Assuming timely approval of the Main Estimates in 2020-21, the department's total funding totals would have been $2.0 billion, which is a net increase of $1.5 billion in 2021-2022 over 2020-21.

The net increase of $1.5 billion in Operating authority Vote 1 is mainly due to the following:

  • $1,250 million First Nations Child and Family Services;
  • $105 million Clinical and Client Care;
  • $58 million Supplementary Health Benefits;
  • $39 million Communicable Disease Control and Management;
  • $14 million Internal Services;
  • $7 million Income Assistance;
  • $7 million Other Community Infrastructure and Activities;
  • $5 million Individual Affairs;
  • $5 million Environmental Public Health.

Offset by a funding decrease for the following programs

  • $12 million Child First Initiative - Jordan Principle;
  • $5 million Education Facilities.

Vote 5 Capital expenditures

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

  • $16 million Clinical and Client Care;
  • $15 million Communicable Disease Control and Management.

Vote 10 Grants and Contributions

The budgetary authorities in 2021-22 has a net increase of $6.5 billion of which $2.7 billion is the direct result of the delay in approval for the 2020-21 Main Estimates. Assuming timely approval of the Main Estimates in 2020-21, the department's total funding totals would have been $11.5 billion, which is a net increase of $3.8 billion in 2021-2022 over 2020-21.

The net increase of $3.8 billion in the Grants and Contributions authority is mainly due to the following:

  • $694 million First Nations Child and Family Services;
  • $535 million Communicable Disease Control and Management;
  • $482 million Water and Wastewater;
  • $450 million Emergency Management Assistance;
  • $438 million Education;
  • $438 million Economic Development Capacity and Readiness;
  • $334 million Urban Programming for Indigenous Peoples;
  • $333 million Other Community Infrastructure and Activities;
  • $119 million Mental Wellness;
  • $74 million Indigenous Governance and Capacity;
  • $73 million Assisted Living;
  • $72 million Home and Community Care;
  • $59 million Indigenous Entrepreneurship and Business Development;
  • $57 million Income Assistance;
  • $46 million Health Facilities;
  • $30 million BC Tripartite Health Governance;
  • $25 million Healthy Child Development.

Offset by a funding decrease for the following programs

  • $202 million Child First Initiative - Jordan Principle;
  • $192 million Housing;
  • $131 million Education Facilities.

Statutory Authorities

The net decrease of $1,7 billion in Statutory authority (Operating and Grants & Contributions) is mainly due to funding pursuant to the Public Health Events of National Concern Payment Act which was received in statutory funding until September 30th, 2020. After this date, this funding has been received under the regular Grants and Contribution funding. The net decrease relates to the following:

  • $610 million Indigenous Community;
  • $281 million First Nations and Inuit communities;
  • $270 million Income Assistance;
  • $233 million Safe Restart in Indigenous communities;
  • $106 million Expanded Youth Employment and Job Skills;
  • $83 million Indigenous Mental Wellness;
  • $75 million Urban & Regional Indigenous organization;
  • $75 million Mitigation Measures for Indigenous Businesses;
  • $30 million First Nations Infrastructure.

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $3.4 billion for the quarter ended September 30, 2021.

Departmental Budgetary Expenditures were $401 million lower than the same quarter in 2020-21. As per the Departmental Budgetary Expenditures by Standard Object tables, the decrease 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 Q2 and 2020-21 Q2 Expenditures (July 1 to September 30, 2021) (1) Variance between 2021-22 year-to-date and 2020-21 Expenditures (April 1 to September 30, 2021)
Expenditures:
1-Personnel The increase is mainly due to additional expenses related to collective agreement renewal and Indigenous Services Canada Care Transportation at biweekly intervals rather than monthly for Clinical and Client Care Program. 24,018 46,059
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. 24,320 36,012
3-Information (843) 338
4-Professional and special services The increases are 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. It's also due to an increase in licenses and contract supports, as well as Jordan's Principle individual requests that have been steadily increasing year over year. 53,721 107,764
5-Rentals 2,026 3,405
6-Purchased repair and maintenance 106 (242)
7-Utilities, materials and supplies The decrease is mainly due to the net realignment of expenses between 2020-21 and 2021-22, within the Drugs and medical supplies expenditures for Supplementary Health Benefits program. (11,460) 4,850
8-Acquisition of land, buildings and works (187) (115)
9-Acquisition of machinery and equipment 1,187 (837)
10-Transfer payments Transfer payment expenditures* (480,961) (531,083)
11-Public debt charges 0 0
12-Other subsidies and payments (12,361) (1,090)
Total gross budgetary expenditures (400,434) (334,939)
Less Revenues netted against expenditures
Services and Benefits to Individuals (494) (483)
Total Revenues netted against expenditures (494) (483)
Total net budgetary expenditures (400,928) (335,422)
(1) The total Vote 1 expenditures for the quarter ended September 30, 2020 has been updated to reflect a credit of $1,128 to the Statutory item Revenue. The revised expenditure amount for second quarter 2020-21 is $467,331.

* The net decrease of $481 million in transfer payment expenditures is mainly due to the following:

  • $411 million decrease due to the sun-setting of the Statutory funding for the following programs:
    • $256 million for Income Assistance;
    • $68 million for Indigenous Entrepreneurship and Business Development;
    • $57 million for Urban Programming for Aboriginal Peoples;
    • $30 million for Communicable Disease Control and Management;
  • $58 million decrease for Housing due to the sun-setting of funding in 2020-21 and issues with projects progressing slower than anticipated due to the wildfires, COVID-19 and tendering challenges;
  • $26 million decrease for Self Determined Services due to the newly signed Regional Education Agreement.

Offset by an increase of $48 million for First Nations Child and Family Services due to a new initiative to support the safety and well-being of First Nations children and families living on Reserve and in Yukon.

3. Risks and uncertainties

The Department continues to proactively and systematically manage and respond to risk through rigorous monitoring, review and challenge functions. As such, ISC has embraced an enterprise approach to risk management as a way to identify risks across programs, sectors and regions which may impede the achievement of its objectives and to develop coordinated response measures to ensure the continuity of its operations. Information concerning risk is continuously being collected and shared widely across the Department to gain a holistic picture of the challenges and opportunities it faces and to facilitate the development of synergistic strategies that offer the best treatment of risk at the lowest cost.

The Department's internal and external risk environment has significantly changed since the pandemic. It has created the need for additional 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 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.

Now, as vaccination rates increase and public health restrictions begin to be lifted across Canada, we anticipate a gradual increase in occupancy of ISC's worksites. To prepare for this, the Department has taken a risk management approach to planning for this transition, while taking into account operational requirements as well as health and safety of employees, communities and partners.

Implementing these changes has, however, exposed the Department to new risks and opportunities related to its workplace, workforce and work.

The Department will continue to monitor its risk exposure and take action as needed to mitigate the risk of not achieving anticipated results and to responsibly manage public resources. 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

There have been no significant changes in relation to Operations, Personnel and Programs during the second quarter of fiscal year 2021-22.

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

Philippe Thompson
Chief Finances, Results and Delivery Officer
Date:
City: Gatineau (Canada)

 

6. Appendix

Statement of Authorities (Unaudited)
(In thousands dollars)
Statement of Authorities (Unaudited) Fiscal Year 2021-22 Fiscal Year 2020-21
Total available for use for the year ending March 31, 2022 Used during the quarter ended September 30, 2021 Year to date used at quarter ended September 30, 2021 Total available for use for the year ending March 31, 2021 Used during the quarter ended September 30, 2020 (1) Year to date used at quarter ended September 30, 2020
Vote 1: Operating Expenditures 3,500,842 573,897 1,033,075 1,524,580 467,331 801,830
Vote 5: Capital Expenditures 38,694 1,518 1,600 6,758 362 770
Vote 10: Grants and Contributions 15,276,153 2,833,386 6,465,232 8,786,647 2,524,641 5,815,677
S- Statutory Authorities: Operating expenditures
Contributions to employee benefit plan 94,054 21,369 42,737 80,733 20,183 40,366
Court awards – Crown Liability and Proceedings Act 0 130 341 0 0 0
Minister of Indigenous Services Canada – Salary and motor car allowance 90 22 45 89 23 45
Liabilities in respect of loan guarantees made of 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 28,904 37,993
Other 0 13 631 0 112 1,763
S- Statutory Authorities: Transfer Payments
Canada Community-Building Fund - Financing municipal infrastructure (2) 60,718 7,825 8,623 0 3,530 4,030
Contributions in connection with First Nations Infrastructure 0 0 0 29,684 0 0
Indian Annuities Treaty payments 2,100 219 358 0 30 67
Payments related to Public Health Events of National Concern and income support 0 0 0 1,752,349 794,191 1,185,523
Subtotal Statutory Authorities 158,962 29,758 52,735 1,866,955 846,973 1,269,787
Total Authorities 18,974,651 3,438,379 7,552,642 12,184,940 3,839,307 7,888,064

(1) The total Vote 1 expenditures for the quarter ended September 30, 2020 has been updated to reflect a credit of $1,128 to the Statutory item Revenue. The revised expenditure amount for second quarter 2020-21 is $467,331.

(2) Name change from "Gas Tax Fund - Financing municipal infrastructure" to "Canada Community-Building Fund - Financing municipal infrastructure" following the Budget Implementation Act, 2021, No.1.
Departmental budgetary expenditures by standard object (Unaudited)
(In thousands dollars)
Expenditures Fiscal Year 2021-22 Fiscal Year 2020-21
Planned expenditures for the year ending March 31, 2022 Expended during the quarter ending September 30, 2021 Year to date used at quarter ended September 30, 2021 Planned expenditures for the year ending March 31, 2021 Expended during the quarter ending September 30, 2020 (1) Year to date used at quarter ended September 30, 2020
1-Personnel 718,508 191,003 338,082 532,137 166,985 292,023
2-Transportation and communications 410,234 85,292 136,979 318,678 60,972 100,967
3-Information 3,930 (466) 831 3,147 377 493
4-Professional and special services 740,073 155,419 258,558 566,048 101,698 150,794
5-Rentals 21,100 4,776 8,153 18,328 2,750 4,748
6-Purchased repair and maintenance 7,238 576 846 10,300 470 1,088
7-Utilities, materials and supplies 588,219 157,567 304,027 470,793 169,027 299,177
8-Acquisition of land, buildings and works 477 6 78 2,896 193 193
9-Acquisition of machinery and equipment 38,217 10,034 19,202 10,162 8,847 20,039
10-Transfer payments 15,338,971 2,841,430 6,474,213 10,419,470 3,322,391 7,005,296
11-Public debt charges 0 0 0 0 0 0
12-Other subsidies and payments 1,202,000 (5,636) 14,156 2,000 6,725 15,246
Total gross budgetary expenditures 19,068,967 3,440,001 7,555,125 12,353,959 3,840,435 7,890,064
Less Revenues netted against expenditures
Services and Benefits to Individuals (94,316) (1,622) (2,483) (169,019) (1,128) (2000)
Total Revenues netted against expenditures (94,316) (1,622) (2,483) (169,019) (1,128) (2000)
Total net budgetary Expenditures 18,974,651 3,438,379 7,552,642 12,184,940 3,839,307 7,888,064
(1) The total Vote 1 expenditures for the quarter ended September 30, 2020 has been updated to reflect a credit of $1,128 to the Statutory item Revenue. The revised expenditure amount for second quarter 2020-21 is $467,331.

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