Quarterly Financial Report for the quarter ended December 31, 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 (YTD) 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 third quarter, the Department has total budgetary authorities of $45.6 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 Q3 Year-to-date expenditures
March 31, 2024 March 31, 2023 Variance 2023-24
(October 1 to December 31, 2023)		 2022-23
(October 1 to December 31, 2022)		 Variance Q3 2023-24
(October 1 to December 31, 2023)		 Q3 2022-23
(October 1 to December 31, 2022)		 Variance
Vote 1: Operating Expenditures 27,482,298 25,913,370 1,568,928 798,761 600,816 197,945 2,105,807 3,784,729 (1,678,922)
Vote 5: Capital Expenditures 10,823 8,817 2,006 1,623 194 1,429 3,273 1,009 2,264
Vote 10: Grants and Contributions 17,971,068 18,000,603 (29,535) 4,148,171 3,708,321 439,850 12,805,996 11,599,290 1,206,706
Statutory Authorities 152,710 149,774 2,936 43,603 34,005 9,598 107,012 92,416 14,596
Total 45,616,898 44,072,563 1,544,335 4,992,158 4,343,336 648,822 15,022,088 15,477,444 (455,356)

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 $1.5 billion from the previous year:

  • Vote 1 authorities increased by $1.6 billion
  • Vote 5 authorities increased by $2 million
  • Vote 10 authorities decreased by $29.5 million
  • Statutory authorities increased by $2.9 million

Vote 1 Operating expenditures

Operating authority has increased by $1.6 billion in the third quarter of 2023-24 compared to the same period of the previous year, mainly due to the following:

  • $1.5 billion for out-of-court settlements;
  • $78 million for Non-Insured Health Benefits;
  • $10 million for Indian Residential Schools Resolution Support;
  • $7 million for Income Assistance;
  • $7 million for Healthy Living;
  • $7 million for Individual Affairs;
  • $6 million for Communicable Disease Control And Management;
  • $6 million for Mental Wellness.

Offset by a funding decrease for the following programs:

  • $9 million for Community Oral Health;
  • $8 million for Sex-based Inequities;
  • $6 million for Clinical and Client Care.

Vote 10 Grants and Contributions

Grants and Contributions authority has decreased by $29.5 million in the third quarter of 2023-24 compared to the same period of the previous year, mainly due to the following:

  • $150 million for Housing;
  • $117 million for Education;
  • $99 million for Urban Programming for Indigenous Peoples;
  • $61 million for Indigenous Governance and Capacity;
  • $59 million for Healthy Child Development;
  • $59 million for First Nation Child & Family Services;
  • $29 million for Other Community Infrastructure & Activities;
  • $28 million for BC Tripartite Health Governance;
  • $26 million for Clinical and Client Care.
  • $21 million for Family Violence Prevention;
  • $15 million for Income Assistance;
  • $13 million for Economic Development Capacity & Readiness.

Offset by a funding decrease for the following programs :

  • $248 million for Education Facilities;
  • $136 million for Emergency Management;
  • $76 million for Legacy of Residential School;
  • $74 million for Communicable Diseases;
  • $70 million for Jordan’s Principle & the Inuit Child First Initiative;
  • $66 million for Medical Travel Costs in Nunavut;
  • $39 million for Water & Wastewater.

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $5 billion for the quarter ended December 31, 2023.

Departmental Budgetary Expenditures were $648 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 Q3 and 2022–23 Q3 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, Indigenous Governance and Capacity and Supplementary Health Benefits. 69,410 112,212
2-Transportation and communications The variance decrease in this fiscal period is mainly related to Supplementary Health Benefits due to the timing of payments while the increase for year-to-date expenditures is mainly related to an increase in requests for Medical and Non-Medical travel for Jordan's Principal. (6,771) 30,848
3-Information   680 392
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. 80,194 110,081
5-Rentals   (1,242) (1,397)
6-Purchased repair and maintenance   (758) (991)
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. 22,407 50,523
8-Acquisition of land, buildings and works   (8) (8)
9-Acquisition of machinery and equipment   3,787 8,322
10-Transfer payments Transfer payment expendituresTable note * 447,142 1,213,606
11-Public debt charges   - -
12-Other subsidies and payments The variance increase in this fiscal period is due to the timing of payments for an Interdepartmental Settlement with Department of Justice while the decrease in year-to-date variance is due to a legal settlement regarding Water & Wastewater paid in Q2 2022-23. 40,379 (1,972,697)
Total gross budgetary expenditures   655,220 (449,109)
Less Revenues netted against expenditures
Indigenous Well-Being and Self-Determination   1,257 1,408
Internal Services   (7,655) (7,655)
Total Revenues netted against expenditures   (6,398) (6,247)
Total net budgetary expenditures   648,822 (455,356)

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

Original signed by

__________________________
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
December 31, 2023		 Year to date used at quarter ended December 31, 2023 Total available for use for the year ending
March 31, 2023		 Used during the quarter ended
December 31, 2022		 Year to date used at quarter ended December 31, 2022
Vote 1: Operating expenditures 27,482,298 798,761 2,105,807 25,913,370 600,816 3,784,729
Vote 5: Capital expenditures 10,823 1,623 3,273 8,817 194 1,009
Vote 10: Grants and Contributions 17,971,068 4,148,171 12,805,996 18,000,603 3,708,321 11,599,290
S- Statutory Authorities: Operating expenditures
Contributions to employee benefit plan 116,133 27,922 83,764 114,548 25,144 75,433
Court awards–Crown Liability and Proceedings Act 0 16 279 0 774 824
Minister of Indigenous Services Canada – Salary and motor car allowance 95 24 71 93 23 69
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 0
Other 0 399 606 0 114 698
S- Statutory Authorities: Transfer Payments
Canada Community – Building Fund – Financial municipal infrastructure 32,383 15,633 18,561 31,033 8,392 11,733
Contributions in connection with First Nations Infrastructure 0 0 0 0 0 0
Indian Annuities Treaty payments 2,100 (391) 3,731 2,100 (442) 3,659
Payments related to Public Health Events of National Concern and income support 0 0 0 0 0 0
Subtotal Statutory Authorities 152,710 43,603 107,012 149,774 34,005 92,416
Total Authorities 45,616,898 4,992,158 15,022,088 44,072,563 4,343,336 15,477,444
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 December 31, 2023 Year to date used at quarter ended December 31, 2023 Planned expenditures for the year ending March 31, 2023 Expended during the quarter ending December 31, 2022 Year to date used at quarter ended December 31, 2022
1-Personnel 995,406 257,004 644,663 863,375 187,594 532,451
2-Transportation and communications 487,354 102,586 313,769 423,230 109,357 282,921
3-Information 10,383 2,998 6,034 7,392 2,318 5,642
4-Professional and special services 2,006,123 253,510 609,482 1,921,263 173,316 499,401
5-Rentals 15,911 3,128 11,043 24,230 4,370 12,440
6-Purchased repair and maintenance 5,322 799 1,888 7,420 1,557 2,879
7-Utilities, materials and supplies 780,734 164,115 524,856 833,654 141,708 474,333
8-Acquisition of land, buildings and works 0 0 0 0 8 8
9-Acquisition of machinery and equipment 10,823 14,828 41,636 8,817 11,041 33,314
10-Transfer payments 17,374,183 4,163,414 12,828,288 18,033,736 3,716,272 11,614,682
11-Public debt charges 631,367 0 0 0 0 0
12-Other subsidies and payments 23,347,645 38,750 52,520 22,005,540 (1,629) 2,025,217
Total gross budgetary expenditures 45,665,251 5,001,132 15,034,179 44,128,655 4,345,912 15,483,288
Less Revenues netted against expenditures
Indigenous Well-Being and Self-Determination (5,450) (1,319) (4,436) (56,092) (2,576) (5,844)
Internal Services (42,903) (7,655) (7,655) 0 0 0
Total Revenues netted against expenditures (48,353) (8,974) (12,091) (56,092) (2,576) (5,844)
Total net budgetary Expenditures 45,616,898 4,992,158 15,022,088 44,072,563 4,343,336 15,477,444

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