Quarterly Financial Report for the quarter ended September 30, 2023

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

Table of contents

  1. Introduction
  2. Highlights of fiscal quarter and fiscal year-to-date results
  3. Risks and uncertainties
  4. Significant changes in relation to operations, personnel and programs
  5. Approval by senior officials
  6. Appendix A

1. Introduction

This quarterly financial report should be read in conjunction with the Main Estimates for fiscal year 2023-24. 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 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).

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 2023-24 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 $44.6 billion for 2023-24. 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)
(thousands of dollars)
  Authorities available for the year ending Expenditures as at Q2 Year-to-date expenditures
March 31, 2024 March 31, 2023 Variance 2023-24
(July 1 to September 30, 2023)		 2022-23
(July 1 to September 30, 2022)		 Variance Q2 2023-24
(April 1 to September 30, 2023)		 Q2 2022-23
(April 1 to September 30, 2022)		 Variance
Vote 1: Operating Expenditures 27,092,446 25,759,838 1,332,608 736,423 705,626 30,797 1,307,046 3,183,913 (1,876,867)
Vote 5: Capital Expenditures 7,294 7,215 79 1,048 317 731 1,650 815 835
Vote 10: Grants and Contributions 17,339,700 15,941,618 1,398,082 3,974,487 3,844,136 130,351 8,657,825 7,890,969 766,856
Statutory Authorities 151,852 141,702 10,150 30,445 28,993 1,452 63,410 58,411 4,999
Total 44,591,293 41,850,373 2,740,920 4,742,402 4,579,072 163,330 10,029,930 11,134,108 (1,104,177)

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 $2.7 billion from the previous year:

  • Vote 1 authorities increased by $1.3 billion
  • Vote 5 authorities decreased by $0.08 million
  • Vote 10 authorities increased by $1.4 billion
  • Statutory authorities decreased by $10 million

Vote 1 Operating expenditures

Operating authority has increased by $1.3 billion in the second quarter of 2023-24 compared to the same period of the previous year, mainly due to the following:

  • $1.3 billion for out-of-court settlements;
  • $137 million for Land Natural Resources and Environment Management;
  • $30 million for Communicable Disease;
  • $12 million for Clinical and Client Care;
  • $11 million for Indigenous Governance and Capacity;
  • $6 million for First Nations Child and Family Services;

Offset by a funding decrease for the following programs:

  • $314 million for Non-Insured Health Benefits.

Vote 10 Grants and Contributions

Grants and Contributions authority has increased by $1.4 billion in the second quarter of 2023-24 compared to the same period of the previous year, mainly due to the following:

  • $574 million for First Nations Child and Family Services;
  • $256 million for Housing;
  • $130 million for Mental Wellness;
  • $109 million for Education;
  • $98 million for Emergency Management Assistance Program;
  • $65 million for Income Assistance;
  • $63 million for Assisted Living;
  • $55 million for Family Violence and Prevention;
  • $49 million for Water & Wastewater;
  • $44 million for Healthy child development;
  • $42 million for Economic Development Capacity and Readiness;
  • $29 million for Other Community Infrastructure;
  • $28 million for BC Tripartite Health Governance;
  • $27 million for Urban Programming for Indigenous Peoples;
  • $26 million for Clinical and Client Care.

Offset by a funding decrease for the following programs :

  • $148 million for Education Facilities;
  • $97 million for Legacy of Residential School;
  • $66 million for Medical Travel Costs in Nunavut;
  • $65 million for First Nations Health Benefits.

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $4.7 billion for the quarter ended September 30, 2023.

Departmental Budgetary Expenditures were $163 million higher than the same quarter in 2022-23, as shown in the Departmental Budgetary Expenditures by Standard Object tables in Appendix A. 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)
(thousands of dollars)
Standard Object Changes to Standard Object expenditures Variance between 2023–24 Q2 and 2022–23 Q2 expenditures Variance between 2023–24 year-to-date and 2022–23 year-to-date expenditures
Expenditures:
1-Personnel There are increases in personnel expenditures in order to deliver department programs for Primary Health, Jordan's Principle, Child and Family Services, Indigenous Governance and Capacity and Public Health Promotion and Disease Prevention. 26,368 42,802
2-Transportation and communications The increase is mainly related to Supplementary Health Benefits experiencing significant inflationary pressures and to the increase in requests for Medical and Non-Medical travel for Jordan's Principal. 14,259 37,619
3-Information   (749) (288)
4-Professional and special services The increase is mainly due to the high number of requests for Jordan's Principle and Inuit Child First Initiative this fiscal year over last fiscal year and also significant inflationary pressures for Supplementary Health Benefits. 42,547 29,887
5-Rentals   (803) (155)
6-Purchased repair and maintenance   (154) (233)
7-Utilities, materials and supplies The increase for Supplementary Health Benefits expenditures is due to an extension in drugs and medical supplies as part of product listing agreements. 10,444 28,116
8-Acquisition of land, buildings and works   4 -
9-Acquisition of machinery and equipment   3,056 4,535
10-Transfer payments Transfer payment expendituresTable note * 128,881 766,465
11-Public debt charges   - -
12-Other subsidies and payments The decrease is related to Communities & Environment program for a legal settlement regarding Land, Natural Resources and Environmental Management paid in 2022-23. (60,768) (2,013,076)
Total gross budgetary expenditures   163,083 (1,104,329)
Less Revenues netted against expenditures
Services and Benefits to Individuals   246 151
Total Revenues netted against expenditures   246 151
Total net budgetary expenditures   163,330 (1,104,177)

3. Risks and uncertainties

For 2023-24, ISC is addressing key priorities in service areas linked to advancing health, supporting families, helping build sustainable communities, and supporting Indigenous communities in self-determination. The Department's key risks and the efforts being taken to mitigate them are described in the 2023-24 Departmental Plan, and highlight that a rapidly increasing and evolving Indigenous population, as well as the rising cost of living, building supplies and equipment, educational materials, and more, are having a significant impact on the related risk environment.

The current risk environment is unpredictable and has created the need for additional financial flexibility to allocate funds to the most pressing issues, such as wildfires and emergency health care, while continuing to deliver essential services and programs to address underlying social, economic and health issues in communities.

With respect to Grants and Contributions, the Department continues to undertake risk assessments of new, existing, and reformed programs and general assessments of each recipient to identify areas of risk. Conducting recipient and project audits ensures that recipients have appropriate management, financial and administrative controls in place.

The Department's program spending is mainly comprised of contribution agreements allocated to third party recipients. There are several financial uncertainties associated with ISC's diverse contribution programs which influence spending patterns. Recipients continue to face a range of challenges including unexpected cost increases, increased demand for health and social services, labor shortages, construction and supply delays and other external factors. These uncertainties have a direct impact on recipients' ability to deliver projects or spend as planned, resulting in risks to the Department's ability to meet objectives including closing socio-economic gaps.

ISC is committed to sound stewardship of public funds. Examples include the development of ISC's Integrated Risk Management Framework, the creation of a yearly Corporate Risk Profile and Risk Inventory/Register, increased risk analysis and monitoring, frequent risk discussions at governance committees, the review of ISC's Budget Management Framework, strengthened planning and cash management activities, and increased fraud prevention and detection activities. Risk data is continuously and systematically collected and shared widely to gain a holistic picture of challenges and opportunities and to facilitate the development of the best treatment of risk at the lowest cost.

The Department will continue to monitor risk and take action as needed to mitigate the risk of not achieving objectives 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

5. Approval by senior officials

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

Original signed by

Gina Wilson
Deputy Minister, ISC

Philippe Thompson
Chief Finances, Results and Delivery Officer

6. Appendix A

Statement of Authorities (Unaudited)
(thousands of dollars)
Statement of Authorities (Unaudited) Fiscal Year 2023-24 Fiscal Year 2022-23
Total available for use for the year ending
March 31, 2024		 Used during the quarter ended
September 30, 2023		 Year to date used at quarter ended September 30, 2023 Total available for use for the year ending
March 31, 2023		 Used during the quarter ended
September 30, 2022		 Year to date used at quarter ended September 30, 2022
Vote 1: Operating expenditures 27,092,446 736,423 1,307,046 25,759,838 705,626 3,183,913
Vote 5: Capital expenditures 7,294 1,048 1,650 7,215 317 815
Vote 10: Grants and Contributions 17,339,700 3,974,487 8,657,825 15,941,618 3,844,136 7,890,969
S- Statutory Authorities: Operating expenditures
Contributions to employee benefit plan 115,275 27,922 55,843 106,477 25,145 50,289
Court awards–Crown Liability and Proceedings Act - 24 263 0 0 50
Minister of Indigenous Services Canada – Salary and motor car allowance 95 23 47 93 23 46
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 0 0
Other - 178 207 0 54 584
S- Statutory Authorities: Transfer Payments
Canada Community – Building Fund – Financial municipal infrastructure 32,383 2,916 2,928 31,033 3,230 3,341
Contributions in connection with First Nations Infrastructure - 0 0 0 0 0
Indian Annuities Treaty payments 2,100 (617) 4,122 2,100 541 4,101
Payments related to Public Health Events of National Concern and income support - 0 0 0 0 0
Subtotal Statutory Authorities 151,852 30,445 63,410 141,702 28,993 58,411
Total Authorities 44,591,293 4,742,402 10,029,930 41,850,373 4,579,072 11,134,108
Departmental budgetary expenditures by standard object (Unaudited)
(thousands of dollars)
Expenditures Fiscal Year 2023-24 Fiscal Year 2022-23
Planned expenditures for the year ending March 31, 2024 Expended during the quarter ending September 30, 2023 Year to date used at quarter ended September 30, 2023 Planned expenditures for the year ending March 31, 2023 Expended during the quarter ending September 30, 2022 Year to date used at quarter ended September 30, 2022
1-Personnel 928,109 224,851 387,659 813,524 198,483 344,857
2-Transportation and communications 392,793 117,355 211,183 415,794 103,096 173,564
3-Information 11,072 1,810 3,036 6,611 2,559 3,324
4-Professional and special services 1,938,753 206,080 355,972 1,826,250 163,533 326,085
5-Rentals 24,259 4,687 7,915 20,525 5,490 8,070
6-Purchased repair and maintenance 6,810 746 1,089 5,819 900 1,322
7-Utilities, materials and supplies 608,729 187,687 360,741 822,936 177,243 332,625
8-Acquisition of land, buildings and works 0 0 0 0 (4) 0
9-Acquisition of machinery and equipment 7,294 15,349 26,808 7,215 12,293 22,273
10-Transfer payments 17,374,183 3,976,785 8,664,874 15,974,751 3,847,905 7,898,410
11-Public debt charges 0 0 0 0 0 0
12-Other subsidies and payments 23,347,645 9,054 13,770 22,005,540 69,822 2,026,846
Total gross budgetary expenditures 44,639,646 4,744,403 10,033,047 41,898,965 4,581,320 11,137,376
Less Revenues netted against expenditures
Services and Benefits to Individuals (48,353) (2,002) (3,117) (48,592) (2,248) (3,268)
Total Revenues netted against expenditures (48,353) (2,002) (3,117) (48,592) (2,248) (3,268)
Total net budgetary Expenditures 44,591,293 4,742,402 10,029,930 41,850,373 4,579,072 11,134,108

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