Quarterly Financial Report for the quarter ended December 31, 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 third quarter, the Department has total budgetary authorities of $21.1 billion provided in the Main Estimates and Supplementary Estimates (A) and (B) for fiscal year 2021-22, as well as budget adjustments approved by Treasury Board up to Q3 of 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 Q3 Year-to-date Expenditures
March 31, 2022 March 31, 2021 Variance 2021-22 (December 31, 2021) 2020-21 (December 31, 2020) Variance Q3 2021-22 (April 1 to December 31, 2021) Q3 2020-21 (April 1 to December 31, 2020) Variance
Vote 1: Operating Expenditures 3,842,954 2,272,652 1,570,302 606,178 489,965 116,213 1,639,253 1,291,795 347,458
Vote 5: Capital Expenditures 38,734 8,466 30,268 871 1,373 (502) 2,471 2,143 328
Vote 10: Grants and Contributions 17,010,736 12,212,014 4,798,722 3,533,393 2,595,640 937,753 9,998,625 8,411,317 1,587,308
Statutory Authorities 166,755 1,848,748 (1,681,993) 37,649 456,495 (418,846) 90,384 1,726,282 (1,635,898)
Total 21,059,179 16,341,880 4,717,298 4,178,091 3,543,473 634,618 11,730,733 11,431,537 299,196

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 $4.7 billion from the previous year:

Vote 1 Operating expenditures

Operating authority have increased by $1.6 billion in the third quarter of 2021-22 compared to the same period of the previous year, mainly due to the following:

  • $1,251 million First Nations Child and Family Services;
  • $116 million Clinical and Client Care;
  • $110 million Supplementary Health Benefits;
  • $38 million Communicable Disease Control and Management;
  • $24 million Internal Services;
  • $9 million Mental Wellness;
  • $7 million Other Community Infrastructure and Activities;
  • $5 million Environmental Public Health.

Offset by a funding decrease for the following program:

  • $10 million Child First Initiative - Jordan Principle.

Vote 5 Capital expenditures

Capital authority have increased by $30 million in the third quarter of 2021-22 compared to the same period of the previous year, mainly due to the following:

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

Vote 10 Grants and Contributions

Grants and Contributions authority have increased by $4.8 billion in the third quarter of 2021-22 compared to the same period of the previous year, mainly due to the following:

  • $865 million First Nations Child and Family Services;
  • $536 million Communicable Disease Control and Management;
  • $530 million Education;
  • $513 million Emergency Management Assistance;
  • $488 million Water and Wastewater;
  • $437 million Economic Development Capacity and Readiness;
  • $346 million Other Community Infrastructure and Activities;
  • $340 million Urban Programming for Indigenous Peoples;
  • $325 million Income Assistance;
  • $120 million Mental Wellness;
  • $119 million Education Facilities.
  • $94 million Home and Community Care;
  • $93 million Health Facilities;
  • $74 million Indigenous Governance and Capacity;
  • $61 million Assisted Living;
  • $52 million Supplementary Health Benefits
  • $30 million BC Tripartite Health Governance;

Offset by a funding decrease for the following programs:

  • $227 million Indigenous Entrepreneurship And Business Development;
  • $132 million Child First Initiative - Jordan Principle; Footnote 1

Statutory Authorities

Statutory Authority (Operating and Grants & Contributions) have decreased by $1,7 billion in the third quarter of 2021-22 compared to the same period of the previous year, mainly due to funding pursuant to the Public Health Events of National Concern Payment Act which was received in statutory funding until September 30, 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;
  • $263 million Income Assistance;
  • $237 million Safe Restart in Indigenous communities;
  • $90 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.

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

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $4.2 billion for the quarter ended December 31, 2021.

Departmental Budgetary Expenditures were $635 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 Q3 and 2020-21 Q3 Expenditures (October 1 to December 31, 2021) (1) Variance between 2021-22 year-to-date and 2020-21 Expenditures (April 1 to December 31, 2021)
Expenditures
1-Personnel The increase is mainly due to collective agreement renewals. Additional expenses related to the Clinical and Client Care Transportation Program as well as Communities Infrastructure and Activities Program. 11,522 57,581
2-Transportation and communications The increase is mainly due to the lifting of medical travel restrictions for Non-Insured Health Benefits due to COVID-19 Lockdowns in fiscal year 2020-21 and the increase of the number of paid pre-travel self-isolations that are required before every assignment for Health and Human Resources Program. 30,283 66,295
3-Information   276 614
4-Professional and special services The increase is mainly due to costs incurred from mandatory self-isolation of all personnel and contracted services before accessing communities in respect to pandemic safety measures. The increase is also attributable to Non-Insured Health Benefits Program expenses for Dental and Vision benefits, and to Jordan's Principle individual requests that have been steadily increasing year over year. 22,124 129,888
5-Rentals   1,049 4,454
6-Purchased repair and maintenance   22 (220)
7-Utilities, materials and supplies The increase is mainly due to lifting of COVID-19 restrictions for drugs and medical supplies for Non-Insured Health Benefits program. 19,843 24,693
8-Acquisition of land, buildings and works   104 (11)
9-Acquisition of machinery and equipment   108 (729)
10-Transfer payments Transfer payment expenditures* 525,018 (6,065)
11-Public debt charges   - -
12-Other subsidies and payments   24,524 23,434
Total gross budgetary expenditures   634,873 299,934
Less Revenues netted against expenditures
Services and Benefits to Individuals   (255) (738)
Total Revenues netted against expenditures   (255) (738)
Total net budgetary expenditures   634,618 299,196

*The net increase of $525 million in transfer payment expenditures is mainly due to the following:

$736 million increase due to the following:

  • $202 million for Emergency Management Assistance due to the unpredictable nature of emergencies and the need to have cash on hand to support active evacuations and other urgent events.
  • $157 million for First Nations Child and Family Services due to the implementation of the Canadian Human Rights Tribunal Order for Communities not served by a First Nations Child and Family Services Agency as well as the implementation of the Act respecting First Nations, Inuit and Metis children, youth and families.
  • $143 million for Urban Programing for Indigenous Peoples. Fiscal year 2021-22 funding for COVID-19 pandemic is disbursed under the Voted Authority as opposed to fiscal year 2020-21 where it was in large part disbursed under the Statutory Authority.
  • $116 million for Economic Development Capacity and Readiness due to the new initiative in 2021-22 that supports community-owned businesses who have a significant decline in own-source revenues as a result of the COVID-19 pandemic.
  • $49 million for Home and Community Care due to the lifting of COVID-19 restrictions.
  • $44 million for Income Assistance. Fiscal year 2021-22 funding for COVID-19 pandemic is disbursed under the Voted Authority as opposed to fiscal year 2020-21 where is was in large part disbursed under the Statutory Authority.
  • $25 million for Non-Insured Health Benefits due to an increase in Medical Transportation related to multiple Special Purpose Allotment proposals for vans, rate increases and boarding homes being approved across various regions.

Offset by a net decrease of $257 million due to the sun setting of the Statutory funding for the following programs:

  • $106 million for Emergency Management Assistance
  • $52 million for Urban Programing for Indigenous Peoples
  • $35 million for Health Facilities
  • $32 million for Other Community Infrastructure and Activities
  • $32 million for Healthy Child Development.

3. Risks and uncertainties

The Department has developed a Corporate Risk Profile which includes the top risks that the Department may encounter. However, risks are not static. As such, the Department continues to proactively and systematically manage and respond to risk through rigorous monitoring, review and challenge functions. 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.

The Department has undertaken a risk management approach to planning for different initiatives, such as the eventual and gradual increase in occupancy of ISC's worksites, which takes 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

Significant changes in relation to Operations, Personnel and Programs during the third quarter of fiscal year 2020-21 include:

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)
  Fiscal Year 2021-22 Fiscal Year 2020-21
Total available for use for the year ending March 31, 2022 Used during the quarter ended December 31, 2021 Year to date used at quarter ended December 31, 2021 Total available for use for the year ending March 31, 2021 Used during the quarter ended December 31, 2020 Year to date used at quarter ended December 31, 2020
Vote 1: Operating expenditures 3,842,954 606,178 1,639,253 2,272,652 489,965 1,291,795
Vote 5: Capital expenditures 38,734 871 2,471 8,466 1,373 2,143
Vote 10: Grants and Contributions 17,010,736 3,533,393 9,998,625 12,212,014 2,595,640 8,411,317
S- Statutory Authorities: Operating expenditures
Contributions to employee benefit plan 101,847 21,369 64,106 81,767 20,184 60,550
Court awards – Crown Liability and Proceedings Act   244 585   231 231
Minister of Indigenous Services Canada – Salary and motor car allowance 91 23 68 89 22 67
Liabilities in respect of loan guarantees made of Indian for Housing and Economic Development 2000     2,000    
Payments related to Public Health Events of National Concern and income support       0 7,455 45,448
Other   170 801   26 1,789
S- Statutory Authorities: Transfer Payments
Canada Community-Building Fund - Financing municipal infrastructure (1) 60,718 15,770 24,393   8,507 12,537
Contributions in connection with First Nations Infrastructure       29,684    
Indian Annuities Treaty payments 2,100 73 431 2,100 149 216
Payments related to Public Health Events of National Concern and income support       1,733,108 419,921 1,605,444
Subtotal Statutory Authorities 166,755 37,649 90,384 1,848,748 456,495 1,726,282
Total Authorities 21,059,179 4,178,091 11,730,733 16,341,880 3,543,473 11,431,537
(1) 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 December 31, 2021 Year to date used at quarter ended December 31, 2021 Planned expenditures for the year ending March 31, 2021 Expended during the quarter ending December 31, 2020 Year to date used at quarter ended December 31, 2020
1-Personnel 760,900 169,305 507,387 661,770 157,783 449,806
2-Transportation and communications 485,479 101,137 238,116 464,715 70,854 171,821
3-Information 4,149 708 1,539 4,065 432 925
4-Professional and special services 849,506 167,022 425,580 781,863 144,898 295,692
5-Rentals 22,380 4,299 12,452 23,249 3,250 7,998
6-Purchased repair and maintenance 7,441 629 1,475 5,817 607 1,695
7-Utilities, materials and supplies 709,353 139,060 443,087 694,147 119,217 418,394
8-Acquisition of land, buildings and works 0 175 253 2,896 71 264
9-Acquisition of machinery and equipment 38,734 11,735 30,937 12,627 11,627 31,666
10-Transfer payments 17,073,553 3,549,236 10,023,449 13,919,090 3,024,218 10,029,514
11-Public debt charges 0          
12-Other subsidies and payments 1,202,000 35,943 50,099 2,000 11,419 26,665
Total gross budgetary expenditures 21,153,495 4,179,249 11,734,374 16,572,239 3,544,376 11,434,440
Less Revenues netted against expenditures
Services and Benefits to Individuals (94,316) (1,158) (3,641) (230,359) (903) (2,903)
Total Revenues netted against expenditures (94,316) (1,158) (3,641) (230,359) (903) (2,903)
Total net budgetary Expenditures 21,059,179 4,178,091 11,730,733 16,341,880 3,543,473 11,431,537

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