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:

Decreases totaling $120.3 million mainly due to:

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:

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)

Fiscal year 2015-2016
(in thousands of dollars)

  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.

Fiscal year 2014-2015
(in thousands of dollars)

  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)

Fiscal year 2015-2016
(in thousands of dollars)

  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.

Fiscal year 2014-2015
(in thousands of dollars)

  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
-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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