ARCHIVED - Canada Border Services Agency Quarterly Financial Report
For the quarter ended December 31, 2015
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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 2014 (Budget 2014) and Canada's Economic Action Plan 2015 (Budget 2015).
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.
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 2014-2015 and 2015-2016 Main Estimates and Supplementary Estimates.
Parliamentary spending authority is required before monies can be spent by the Government. Approvals are given in the form of 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.
The QFR has not been subjected to an external audit or review.
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 currently 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. Announced in Budget 2015, the CBSA will transition to a standard one-year appropriation in 2016-2017 in order to create a unified appropriations framework for federal departments and agencies. However, the Department of Finance has confirmed that this Budget 2015 decision has not been approved and will not be implemented in 2016-2017. The Agency has been instructed to maintain the current process until a decision on this matter has been approved.
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 December 31, 2015.
Graph 1 - Comparison of Net Budgetary Authorities and Expenditures as of December 31, 2014 and December 31, 2015 (in thousands $)
The Net Budgetary Authorities are net of Vote Netted Revenue
2014–2015 | 2015–2016 | |||
---|---|---|---|---|
Net Budgetary Authorities | 1,904,037 | 1,885,254 | ||
Expenditures for the quarter ending Dec 31 | 454,942 | 429,086 | ||
Expenditures for the quarter ending Sept 30 | 514,061 | 443,479 | ||
Expenditures for the quarter ending June 30 | 449,211 | 374,304 | ||
Totals | 1,904,037 | 1,418,214 | 1,885,254 | 1,246,869 |
2.1 Significant Changes to Authorities
For the period ending December 31, 2015, the authorities provided to the CBSA are comprised of the Main Estimates, the Supplementary Estimates A, the 2014-2015 unused spending authority, and Treasury Board Vote 30 for Paylist Requirements. Given, the shortened sitting time of Parliament in December, as result of the election, the Treasury Board Secretariat has advised that all items that were to have been sought through Supplementary Estimates B be amalgamated with the new items submitted in Supplementary Estimates C.
For the same period the last fiscal year, the authorities provided to the CBSA were comprised of the Main Estimates, the 2013-2014 unused spending authority, Supplementary Estimates B and Treasury Board Vote 15 for Compensation Adjustments for settled bargaining agreements and severance pay. The Agency did not seek any funding authorities through the 2014-2015 Supplementary Estimates A process and did not receive Treasury Board Vote 30 funding until the fourth quarter.
The Statement of Authorities (Table 1) presents a net decrease of ($18.8 million) or 1.0% in the Agency's total authorities of $1,885.2 million at December 31, 2015 compared to $1,904.0 million total authorities at the same quarter last year.
This net decrease in the authorities available for use is the result of an increase in Vote 1 – Operating Expenditures of $13.9 million, a decrease in Vote 5 – Capital of ($38.7 million) and an increase in Budgetary Statutory Authorities of $6.0 million, as detailed below:
Vote 1 – Operating
The Agency's Vote 1 Operating increased by $13.9 million or 1.0%, which is mainly attributed to the net effect of the following significant items:
Increases totaling $134.2 million mainly due to:
- $59.4 million as described in the CBSA Quarterly Financial Report for the quarter ended June 30, 2015;
- $56.8 million net increase is described in the CBSA Supplementary Estimates (B) for 2014-15; and
- $18.0 million for Treasury Board Vote 30 for CBSA's paylist expenditures was allocated to CBSA in the third quarter of 2015-2016.
Decreases totaling $120.3 million mainly due to:
- $44.2 million as described in the CBSA Quarterly Financial Report for the quarter ended June 30, 2015;
- $45.2 million as described in the CBSA Quarterly Financial Report for the quarter ended September 30, 2015; and
- $30.9 million for Treasury Board Vote 15 for compensation adjustments was allocated to CBSA in the third quarter of 2014-2015.
Vote 5 - Capital
The Agency's Vote 5 Capital decreased by ($38.7 million) or (14.8%), which is mainly attributed to the net effect of the following significant items:
Increases totaling $74.8 million as described in the CBSA Quarterly Financial Report for the quarter ended June 30, 2015;
Decreases totaling $113.5 million due to the reduction in project funding of specific initiatives:
- $41.1 million as described in the CBSA Quarterly Financial Report for the quarter ended June 30, 2015;
- $22.6 million as described in the CBSA Quarterly Financial Report for the quarter ended September 30, 2015; and
- $49.8 million net decrease is described in the CBSA Supplementary Estimates (B) for 2014-15.
Budgetary Statutory Authorities
The Agency's Statutory Authority related to the employee benefit plan increased by $6.0 million, or 3.4% from the previous year.
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 December 31, 2015 was $429.1 million, as compared to $454.9 million for the quarter ending December 31, 2014. The Agency's year-to-date expenditures total $1,246.9 million as compared to $1,418.2 million at the same time last year. The net decrease of ($171.3 million) in expenditures is mostly due to the following items:
- Decrease of $182.8 million or (15.3%) in Vote 1 Operating Expenditures year-to-date used at quarter end ($1,012.4 million versus $1,195.3 million same time last year). The bulk of the difference in spending is attributed to the severance payouts reimbursed in 2014-2015 as a result of the signed collective agreement for Border Services Officers (FB classification) as well as the $38.6 million payment for the Government of Canada's one-time transitional payment made in 2014-2015 for the pay-in-arrears.
- Increase of $6.9 million or 7.7% in Vote 5 Capital Expenditures year-to-date used at quarter end ($97.0 million versus $90.1 million same time last year). The increase in spending is primarily due to assets under construction for buildings, as part of the replacement, expansion and modernization of the port of entry facilities.
- The remaining variance is due to an increase of $4.6 million in statutory expenditures.
As indicated in the Departmental Budgetary Expenditures by Standard Object (Table 2), the decreases by standard object are mainly attributed to:
- A net decrease of ($131.2 million) year-to-date in personnel expenditures mainly due to severance payouts as a result of the signed collective agreement for Border Services Officers (FB classification) in 2014-2015; and
- A decrease of ($38.7 million) year-to-date in other subsidies and payments mainly due to the one-time transition payment for implementing salary payment in arrears by the Government of Canada in 2014-2015.
The planned revenue from the sales of services reflects the Agency's revenue respending authority and it was increased in 2015-2016 by $2.0 million or 12.2% largely due to anticipated volume increases related to programs such as Nexus. The year-to-date revenue from the sales of services is up by $2.1 million or 19.7% due to the timing in the collection of payments and volume increases in the Nexus program.
Graph 2 - Comparison of Vote Netted Revenue and Revenue collected as of December 31, 2014 and December 31, 2015 (in thousands $)
2014–2015 | 2015–2016 | |||
---|---|---|---|---|
Vote Netted Revenue | 16,430 | 18,430 | ||
Revenue collected for the quarter ending Dec 31 | 4,621 | 5,288 | ||
Revenue collected for the quarter ending Sept 30 | 4,024 | 4,468 | ||
Revenue collected for the quarter ending June 30 | 2,220 | 3,253 | ||
Totals | 16,430 | 10,865 | 18,430 | 13,009 |
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.
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. 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
There have been no changes to key senior personnel in the third quarter of 2015-2016.
4.2 Operations
The Agency continues to pursue its Border Modernization agenda, including the implementation of its Beyond the Border Action Plan projects and its engagement with employees and stakeholders on the application of the guiding principles of Blueprint 2020. In addition to these, CBSA will seek funding to replace up to 77 ports of entries across Canada.
The CBSA is also receiving funding for expanding biometrics screening. This investment will see the introduction of new kiosk technology at Canada's major airports that will enhance border management and immigration security. Additional resources were also provided to augment CBSA capacity to work with its security and law-enforcement partners to identify and interdict high-risk travellers.
4.3 New Programs
There have been no new programs introduced in this past fiscal quarter. However, the CBSA has continued to play a key enabling role in the resettlement of 25,000 Syrian refugees and has worked closely with stakeholders to ensure the Government is well positioned to welcome these refugees.
5. Approval by Senior Officials
Approved by:
Linda Lizotte-MacPherson
President
Ottawa, Canada
Date: February 18, 2016
Christine Walker,
Chief Financial Officer
Ottawa, Canada
Date: February 16, 2016
6. Table 1: Statement of Authorities (Unaudited)
Total available for use for the year ending March 31, 2016* | Used during the quarter ended December 31, 2015 | Year-to-date used at quarter end | |
---|---|---|---|
Vote 1 - Operating Expenditures | 1,479,455 | 332,476 | 1,012,421 |
Vote 5 - Capital Expenditures | 223,191 | 50,785 | 97,003 |
Statutory Authority - Contributions to employee benefit plans | 182,608 | 45,652 | 136,956 |
Statutory Authority - Refunds of amounts credited to revenues in previous years | 0 | 0 | 8 |
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets | 0 | 173 | 481 |
Total budgetary authorities | 1,885,254 | 429,086 | 1,246,869 |
Non-budgetary authorities | 0 | 0 | 0 |
Total authorities | 1,885,254 | 429,086 | 1,246,869 |
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.
Total available for use for the year ending March 31, 2015* | Used during the quarter ended December 31, 2014 | Year-to-date used at quarter end | |
---|---|---|---|
Vote 1 - Operating Expenditures | 1,465,571 | 368,656 | 1,195,245 |
Vote 5 - Capital Expenditures | 261,896 | 41,986 | 90,105 |
Statutory Authority - Contributions to employee benefit plans | 176,570 | 44,143 | 132,428 |
Statutory Authority - Refunds of amounts credited to revenues in previous years | 0 | 3 | 140 |
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets | 0 | 154 | 296 |
Total budgetary authorities | 1,904,037 | 454,942 | 1,418,214 |
Non-budgetary authorities | 0 | 0 | 0 |
Total authorities | 1,904,037 | 454,942 | 1,418,214 |
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)
Planned expenditures for the year ending March 31, 2016 * | Expended during the quarter ended December 31, 2015 | Year-to-date used at quarter end |
|
---|---|---|---|
Expenditures | |||
Personnel |
1,287,510 | 330,230 | 989,159 |
Transportation and communications |
61,514 | 10,528 | 27,714 |
Information |
1,846 | 141 | 412 |
Professional and special services |
278,074 | 63,448 | 173,706 |
Rentals |
11,356 | 1,509 | 4,157 |
Repair and maintenance |
25,741 | 3,818 | 10,360 |
Utilities, materials and supplies |
21,722 | 2,992 | 8,244 |
Acquisition of land, buildings and works |
123,333 | 10,993 | 22,398 |
Acquisition of machinery and equipment |
80,432 | 9,181 | 18,624 |
Transfer payments |
- | - | - |
Other subsidies and payments |
12,156 | 1,534 | 5,096 |
Total gross budgetary | 1,903,684 | 434,374 | 1,259,870 |
Less revenues netted against expenditures | |||
Sales of Services |
18,430 | 5,288 | 13,009 |
Other Revenue |
0 | 0 | -8 |
Total revenues netted against expenditures | 18,430 | 5,288 | 13,001 |
Total net budgetary expenditures | 1,885,254 | 429,086 | 1,246,869 |
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.
Planned expenditures for the year ending March 31, 2015 * | Expended during the quarter ended December 31, 2014 | Year-to-date used at quarter end | |
---|---|---|---|
Expenditures | |||
Personnel |
1,279,493 | 340,792 | 1,120,396 |
Transportation and communications |
59,066 | 11,832 | 31,136 |
Information |
1,774 | 206 | 820 |
Professional and special services |
267,048 | 77,631 | 176,592 |
Rentals |
10,907 | 2,169 | 6,580 |
Repair and maintenance |
24,717 | 4,082 | 10,623 |
Utilities, materials and supplies |
20,858 | 3,564 | 9,111 |
Acquisition of land, buildings and works |
69,907 | 10,914 | 16,532 |
Acquisition of machinery and equipment |
175,534 | 6,251 | 13,343 |
Transfer payments |
0 | 0 | 0 |
Other subsidies and payments |
11,163 | 2,119 | 43,806 |
Total gross budgetary expenditures | 1,920,467 | 459,560 | 1,428,939 |
Less revenues netted against expenditures | |||
Sales of Services |
16,430 | 4,621 | 10,865 |
Other Revenue |
0 | -3 | -140 |
Total revenues netted against expenditures | 16,430 | 4,618 | 10,725 |
Total net budgetary expenditures | 1,904,037 | 454,942 | 1,418,214 |
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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