Canada Border Services Agency Quarterly Financial Report
For the quarter ended June 30, 2016

Table of contents

1. Introduction

This Quarterly Financial Report (QFR) has been prepared as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates, Supplementary Estimates A, Canada's Economic Action Plan 2015 (Budget 2015) and Canada's Economic Action Plan 2016 (Budget 2016).

A summary description of the Canada Border Services Agency (CBSA) program activities can be found in Part II of the Main Estimates, and a detailed description in Part III – Report on Plans and Priorities.

The QFR has not been subjected to an external audit or review.

1.1 Basis of Presentation

This QFR has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities (Table 1) includes the CBSA's spending authorities granted by Parliament and those used by the Agency, consistent with the 2015-2016 and 2016-2017 Main Estimates and Supplementary Estimates A. This quarterly report has been prepared using a special purpose financing reporting framework designed to meet financial information needs with respect to the use of spending authorities.

Parliamentary spending authority is required before monies can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts or through other legislation providing statutory spending authority for specific purposes.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

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

1.2 Financial Structure

The CBSA has a financial structure composed of voted budgetary authorities that include Vote 1 Operating Expenditures and Vote 5 Capital Expenditures, and statutory authorities that consist mainly of contributions to the employee benefit plans.

In addition, the Agency has the authority from Parliament to expend certain revenues that it receives in a fiscal year through the conduct of its operations to offset expenditures that it incurs in that fiscal year. As a result of this respendable authority, some of the Agency's programs are partially funded through User Fees (e.g., Nexus).

The CBSA operates on the basis of a two-year appropriation, whereby any unused spending authority at the end of a fiscal year is available to be used the following year. Any portion of the spending authority not used at the end of the second year is lapsed.

2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

This section highlights the significant items that contributed to the net increase or decrease in resources available for the year and actual expenditures as of the quarter ended June 30, 2016.

  2015–2016 2016–2017
Net Budgetary Authorities 1,791,341 1,698,637
Expenditures for the quarter ending June 30 374,305 366,953

2.1 Significant Changes to Authorities

For the period ending June 30, 2016, as well as the same period ending last fiscal year, the authorities provided to the CBSA are comprised of the Main Estimates and Supplementary Estimates A.

The Statement of Authorities (Table 1) presents a net decrease of ($92.7 million) or (5.2%) in the Agency's total authorities of $1,698.6 million at June 30, 2016 compared to $1,791.3 million total authorities at the same quarter last year.

This net decrease in the authorities available for use is the result of a decrease in Vote 1 – Operating Expenditures of ($50.5 million), a decrease in Vote 5 – Capital of ($45.0 million) and an increase in Budgetary Statutory Authorities of $2.8 million, as detailed below:

Vote 1 – Operating

The Agency's Vote 1 Operating decreased by ($50.5 million) or (3.6%), which is mainly attributed to the net effect of the following significant items:

Increases totaling $15.8 million are mainly attributed to:

Decreases totaling $66.3 million are mainly attributed to:

Vote 5 - Capital

The Agency's Vote 5 Capital decreased by ($45.0 million) or (23.0%), which is mainly attributed to the net effect of the following significant items:

Increases totaling $32.0 million mainly due to:

Decreases totaling $77.0 million mainly due to:

Budgetary Statutory Authorities

The Agency's Statutory Authority related to the employee benefit plan increased by $2.8 million, or 1.5% from the previous year. The increase is mainly due to the annual adjustment in the employee benefit plan rate set by Treasury Board Secretariat.

2.2 Explanations of Significant Variances in Expenditures from Previous Year

As indicated in the Statement of Authorities (Table 1), the Agency's expenditures for the quarter ending June 30, 2016 were $367.0 million, as compared to $374.3 million for the quarter ending June 30, 2015. The net decrease of ($7.3 million) or (2.0%) in expenditures is mainly due to the following items:

As indicated in the Departmental Budgetary Expenditures by Standard Object (Table 2), the decreases by standard object are mainly attributed to:

The year-to-date revenue from the sales of services is down by $0.2 million or (6.5%) due to the timing in the collection of payments. 

3. Risks and Uncertainties

The complexity of the operating environment of the CBSA can be seen in the broad scope of external drivers. Developments in geopolitical relations, in the global economy, in environmental matters, and in human and animal health cascade down into Canada's trade, immigration, tourism and refugee patterns, affecting volumes and introducing security and facilitation challenges. Continued growth in both global trade and the virtual economy has benefitted legitimate business and criminal enterprises alike, and presents more complexity in managing Canada's supply chain and physical borders.

The CBSA is funded through annual appropriations. As a result, its operations can be impacted by any changes approved by Parliament. There will continue to be ongoing pressure on the CBSA's appropriations as the Government of Canada reviews spending and resource allocations, including the most recent examples:

The recent Budget 2016 announced annual reductions of $221.0 million in professional services, travel and government advertising, starting in 2016-17 for all government. In a continuing effort to reduce administrative cost, the Agency is required to generate operational efficiencies and to realign the allocated budgets to meet the expectations of the government.

Furthermore, in 2014-15 a new round of collective bargaining between the Government and federal public service bargaining agents began. As a result of the 2013 Operating Budget Freeze, the Treasury Board will not allocate funding for wage and salary increases that take effect during the freeze period (in 2014–15 and 2015–16), or for the ongoing impact of those adjustments.

In considering these factors, the CBSA has embarked on various initiatives that will allow the organization to be even more efficient and effective in the way it does business through increased efforts to address threats early and facilitate trade and travel. To improve its ability to successfully deliver on its initiatives, the Agency regularly examines its enterprise risk landscape, updates its Enterprise Risk Profile and takes appropriate action to mitigate its top risks and the associated financial impacts. The Agency's top risks and associated responses are communicated in its Report on Plans and Priorities

4. Significant Changes in Relation to Operations, Personnel and Programs

4.1 Key Senior Personnel

As of June 6, 2016, Jean-Stéphen Piché, Vice-President of the Human Resources Branch will oversee the operations of Corporate Affairs in addition to his current duties on an interim basis. The former Vice-President of Corporate Affairs, Caroline Weber, has undertaken a special project to assist in developing and driving the CBSA's top strategic initiatives.

4.2 Operations

The Agency continues to pursue its Border Modernization agenda, including the expansion of its trusted traveller programs and the modernization of cross-border trade systems and processes.

In addition to these, the Agency will continue to play a key role in welcoming Syrian Refugees to Canada and will continue to revitalize infrastructure at ports of entry across the country.

4.3 New Programs

There have been no new programs introduced in the past fiscal quarter.

5. Approval by Senior Officials

Approved by:

Linda Lizotte-MacPherson
President
Ottawa, Canada
Date: August 26, 2016

Christine Walker,
Chief Financial Officer
Ottawa, Canada
Date: August 24, 2016

6. Table 1: Statement of Authorities (Unaudited)

Fiscal year 2016-2017
(in thousands of dollars)
Total available for use for the year ending March 31, 2017* Used during the quarter ended June 30, 2016 Year-to-date used at quarter end
Vote 1 - Operating Expenditures 1,362,641 312,266 312,266
Vote 5 - Capital Expenditures 150,614 7,842 7,842
Statutory Authority - Contributions to employee benefit plans 185,382 46,178 46,178
Statutory Authority - Refunds of amounts credited to revenues in previous years 0 15 15
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets 0 652 652
Total budgetary authorities 1,698,637 366,953 366,953
Non-budgetary authorities 0 0 0
Total authorities 1,698,637 366,953 366,953

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.

* Includes only Authorities available for use and granted by Parliament at quarter end.

6. Table 1: Statement of Authorities (Unaudited)

Fiscal year 2015-2016
(in thousands of dollars)
  Total available for use for the year ending March 31, 2016* Used during the quarter ended June 30, 2015 Year-to-date used at quarter end
Vote 1 - Operating Expenditures 1,413,103 316,152 316,152
Vote 5 - Capital Expenditures 195,629 12,401 12,401
Statutory Authority - Contributions to employee benefit plans 182,609 45,652 45,652
Statutory Authority - Refunds of amounts credited to revenues in previous years 0 5 5
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets 0 95 95
Total budgetary authorities 1,791,341 374,305 374,305
Non-budgetary authorities 0 0 0
Total authorities 1,791,341 374,305 374,305

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.

* Includes only Authorities available for use and granted by Parliament at quarter end.

7. Table 2: Departmental Budgetary Expenditures by Standard Object (Unaudited)

Fiscal year 2016-2017
(in thousands of dollars)
  Planned expenditures for the year ending March 31, 2017* Expended during the quarter ended June 30, 2016 Year-to-date used at quarter end
Expenditures
Personnel 1,262,636 314,978 314,978
Transportation and communications 43,159 7,039 7,039
Information 2,009 199 199
Professional and special services 206,126 37,423 37,423
Rentals 8,263 949 949
Repair and maintenance 23,186 3,004 3,004
Utilities, materials and supplies 15,458 1,955 1,955
Acquisition of land, buildings and works 70,276 273 273
Acquisition of machinery and equipment 65,470 3,773 3,773
Transfer payments 0 0 0
Other subsidies and payments 20,484 384 384
Total gross budgetary expenditures 1,717,067 369,977 369,977
Less revenues netted against expenditures
Sales of Services 18,430 3,039 3,039
Other Revenue 0 -15 -15
Total revenues netted against expenditures 18,430 3,024 3,024
Total net budgetary expenditures 1,698,637 366,953 366,953

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.

* Includes only Authorities available for use and granted by parliament at quarter-end.

7. Table 2: Departmental Budgetary Expenditures by Standard Object (Unaudited)

Fiscal year 2015-2016
(in thousands of dollars)
  Planned expenditures for the year ending March 31, 2016 * Expended during the quarter ended June 30, 2015 Year-to-date used at quarter end
Expenditures
Personnel 1,269,562 319,014 319,014
Transportation and communications 54,294 6,991 6,991
Information 1,630 107 107
Professional and special services 245,437 40,423 40,423
Rentals 10,023 610 610
Repair and maintenance 22,719 1,927 1,927
Utilities, materials and supplies 19,172 2,551 2,551
Acquisition of land, buildings and works 106,651 2,906 2,906
Acquisition of machinery and equipment 69,553 1,734 1,734
Transfer payments 0 0 0
Other subsidies and payments 10,730 1,289 1,289
Total gross budgetary expenditures 1,809,771 377,552 377,552
Less revenues netted against expenditures
Sales of Services 18,430 3,252 3,252
Other Revenue -5 -5
Total revenues netted against expenditures 18,430 3,247 3,247
Total net budgetary expenditures 1,791,341 374,305 374,305

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.

* Includes only Authorities available for use and granted by Parliament at quarter-end.

 

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