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Canada Border Services Agency: Quarterly Financial Report—For the quarter ended December 31, 2022

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, Canada’s Economic Action Plan 2021 (Budget 2021) and Canada's COVID-19 Economic Response Plan.

Information on the raison d’être, mandate, role and core responsibilities of the Canada Border Services Agency (CBSA) can be found in Part III Departmental Plan and Part II of the Main Estimates.

The QFR has not been subjected to an external audit or review, but has been reviewed internally by the Departmental Audit Committee.

1.1 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying statement of authorities (Table 1) includes the department's spending authorities granted by Parliament, and those used by the department consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2021 to 2022 and 2022 to 2023 fiscal years. 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.

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 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 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 .

Graph 1: Comparison of net budgetary authorities and expenditures as of , and (in thousands $)

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2.1 Significant changes to authorities

For the period ending , the authorities provided to the CBSA comprise the Main Estimates, Supplementary Estimates B, and any unused spending authorities carried forward from the previous fiscal year.

The statement of authorities (Table 1) presents a net increase of $348.2 million or 14.3% of the Agency’s total authorities of $2,785.2 million on , compared to $2,437.0 million total authorities at the same quarter last year.

This net increase in the authorities available for use is the result of an increase in Vote 1 – Operating Expenditures of $250.4 million and an increase in Vote 5 – Capital of $56.5 million.

The Agency’s Statutory Authority related to the employee benefit plan (EBP) increased by $41.3 million, or 21.7% 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 year-to-date, at quarter ended , were $1,767.3 million, as compared to $1,551.8 million for year-to-date, quarter ended . The net increase of $215.4 million or 13.9% in expenditures is mainly due to the following items:

  • Increase of $209.4 million or 15.7% in Vote 1 Operating Expenditures year-to-date used at quarter end. The increase in expenditures is mainly attributed to an increase in personnel expenditures, which are comprised of salary (including impact of newly negotiated collective agreements), overtime and vacation expenses.
  • Decrease of $10.3 million or 13.4% in Vote 5 Capital Expenditures year-to-date used at quarter end. The decrease in expenditures is mainly attributed to a decrease in Facilities Capital Projects.
  • Increase of $16.3 million or 11.4% in statutory expenditures.

As indicated in the departmental budgetary expenditures by standard objects (Table 2), the net increase by standard object is mainly attributed to:

  • Increase of $178.5 million for Personnel due to salaries (including impact of newly negotiated collective agreements), overtime pay, meal allowance and vacation expenses.
  • Increase of $19.7 million for Professional and Special Services can be attributed to a $11.0M increase for information technology consultants and a $8.7M increase in other professional services.
  • Increase of $15.6 million for the Acquisition of machinery and equipment can mainly be attributed to a $4.6M increase in computer equipment, a $3.8M increase in video equipment and a $2.6M increase in laboratory equipment.
  • Increase of $12.7 million for Transportation and Communications can be explained by a $12.0M increase in travel, following the lifting of COVID-19 restrictions.
  • Increase of $7.8 million in revenues netted against the expenditures.
  • Increase of $4.9 million in Repair and Maintenance can mainly be attributed to an increase in computer repairs, hardware & software and an increase in facilities non-capital projects.
  • Increase of $2.3 million in Other Subsidies and Payments mainly due to an increase in claims against the Crown.
  • Decrease of $13.8 million in Acquisition of Land, Buildings and Equipment due to a decrease in facilities capital projects.

Graph 2: Comparison of vote netted revenue and revenue collected as of , and (in thousands $)

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The planned revenue from the sales of services reflects the Agency’s revenue respending authority. The year-to-date revenue from the charge of services has increased by $7.8 million or 77.5% due to the reopening of borders and increased travel after the lifting of COVID-19 restrictions. The increased travel has resulted in higher revenues collected in programs such as Nexus.

3. Risks and uncertainties

The CBSA’s changing operating environment makes the Agency particularly susceptible to external drivers that are largely beyond its control (e.g. COVID-19 impacts). Together, these drivers have the potential to affect the organization’s ability to manage its annual financial plan.

Since the beginning of the year, the annual inflation rate rose significantly to levels not seen in decades. Combined with a very competitive labour market, these factors have heightened the Agency’s exposure to risks that relate to achieving its goals in a timely fashion and within allocated budgets.

For example, the Agency is pursuing several large information technology (IT) and physical infrastructure projects; most are multi-year in nature and represent substantial investments. Because the CBSA depends on other government departments and/or external stakeholders for the development and implementation of many of these projects, any delays due to the impacts associated with the COVID-19 pandemic and workforce availability both within and outside the Agency can have a significant impact on these projects. Even short delays may incur additional costs for materials and market related services.

Despite the easing of health restrictions related to COVID-19 late in the second quarter (both with the return to the office workplace and with the removal of border measures related to the pandemic), workforce availability has remained a challenge. The transition to the Hybrid Work Model, along with the resurgence of other respiratory diseases have impacted labour force availability.

Despite these external factors, the Agency has met key deadlines and deliverables on the majority of its projects, and remains on track to meet the next set of deliverables. The Agency strives to mitigate financial risks by conducting regular reviews, which are informed by the Agency’s quarterly integrated project reporting processes.

4. Significant changes in relation to operations, personnel and programs

4.1 Key senior personnel

Holly Flowers Code was appointed as the new Vice-President of the Human Resources Branch on .

4.2 Operations

On , the Government of Canada removed all COVID-19 entry restrictions, as well as testing, quarantine, and isolation requirements for anyone entering Canada. All travelers, regardless of citizenship, no longer have to:

  • submit public health information through the ArriveCAN app or website
  • provide proof of vaccination
  • undergo pre- or on-arrival testing
  • carry out COVID-19-related quarantine or isolation
  • monitor and report if they develop signs or symptoms of COVID-19 upon arriving to Canada

Also on , as part of the Traveller Modernization initiative, the Agency started to allow travellers to submit their customs and immigration declaration in advance of their arrival at several major airports by using the ArriveCan app (the previous CanBorder eDeclaration app was decommissioned). Since then, the use of the advance CBSA declaration feature in ArriveCan has been expanded to include the Halifax Stanfield International Airport and Quebec City’s Jean Lesage International Airport. Furthermore, Vancouver International Airport launched dedicated express lanes for travellers who submit their customs and immigration information in advance using ArriveCAN. For more information on the costs to develop, operate and maintain the ArriveCAN application, please consult ArriveCAN costs.

5. Approval by senior officials

Approved by:

Erin O'Gorman
President
Ted Gallivan
Executive Vice-President
Ottawa, Canada
Date:

Jonathan Moor
Chief Financial Officer
Ottawa, Canada
Date:

6. Table 1: Statement of authorities (unaudited)

Fiscal year 2022 to 2023
  Total available for use for the year ending Tablenote 1 ($ thousands) Used during the quarter ended ($ thousands) Year-to-date used at quarter end ($ thousands)
Vote 1: Operating expenditures 2,282,786 557,737 1,541,068
Vote 5: Capital expenditures 270,497 30,476 66,329
Statutory authority: Contributions to employee benefit plans 231,921 53,094 159,282
Statutory authority: Refunds of amounts credited to revenues in previous years 0 0 3
Statutory authority: Spending of proceeds from the disposal of surplus Crown assets 0 180 575
Total budgetary authorities 2,785,204 641,487 1,767,257
Non-budgetary authorities 0 0 0
Total authorities 2,785,204 641,487 1,767,257
Fiscal year 2021 to 2022
  Total available for use for the year ending Tablenote 2 ($ thousands) Used during the quarter ended ($ thousands) Year-to-date used at quarter end ($ thousands)
Vote 1: Operating expenditures 2,032,399 450,759 1,331,667
Vote 5: Capital expenditures 214,028 32,193 76,636
Statutory authority: Contributions to employee benefit plans 190,586 47,647 142,940
Statutory authority: Refunds of amounts credited to revenues in previous years 0 17 18
Statutory authority: Spending of proceeds from the disposal of surplus Crown assets 0 519 572
Total budgetary authorities 2,437,013 531,135 1,551,833
Non-budgetary authorities 0 0 0
Total authorities 2,437,013 531,135 1,551,833

7. Table 2: Departmental budgetary expenditures by standard objects (unaudited)

Fiscal year 2022 to 2023
  Amount for the year ending Tablenote 3 ($ thousands) Amount for the quarter ended ($ thousands) Year-to-date at quarter end ($ thousands)
Expenditures
Personnel 1,847,214 465,219 1,353,397
Transportation and communications 58,944 15,113 36,151
Information 2,826 310 1,604
Professional and special services 585,202 118,578 285,049
Rentals 17,022 3,251 7,557
Repair and maintenance 62,194 14,678 26,125
Utilities, materials and supplies 32,997 5,043 12,565
Acquisition of land, buildings and works 40,353 7,524 15,829
Acquisition of machinery and equipment 119,565 19,398 37,655
Transfer payments 0 0 0
Other subsidies and payments 42,917 -602 9,115
Total gross budgetary expeditures 2,809,234 648,512 1,785,047
Less revenues netted against expenditures
Sales of services 24,030 7,025 17,793
Other revenue 0 0 -3
Total revenues netted against expenditures 24,030 7,025 17,790
Total net budgetary expenditures 2,785,204 641,487 1,767,257
Fiscal year 2021 to 2022
  Planned expenditures for the year ending Tablenote 4 ($ thousands) Expended during the quarter ended ($ thousands) Year-to-date used at quarter end ($ thousands)
Expenditures
Personnel 1,714,936 388,077 1,174,941
Transportation and communications 64,127 9,625 23,502
Information 1,831 143 628
Professional and special services 409,330 97,318 265,337
Rentals 14,516 2,855 6,621
Repair and maintenance 36,659 10,833 21,186
Utilities, materials and supplies 20,124 4,659 11,200
Acquisition of land, buildings and works 90,035 11,121 29,610
Acquisition of machinery and equipment 99,990 10,607 22,036
Transfer payments 0 0 0
Other subsidies and payments 9,495 854 6,796
Total gross budgetary expenditure 2,461,043 536,092 1,561,857
Less revenues netted against expenditures
Sales of services 24,030 4,974 10,042
Other revenue 0 -17 -18
Total revenues netted against expenditures 24,030 4,957 10,024
Total net budgetary expenditures 2,437,013 531,135 1,551,833
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