Canada Border Services Agency: Quarterly Financial Report—For the quarter ended June 30, 2023

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 2022 to 2023 and 2023 to 2024 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.

2.1 Significant changes to authorities

For the period ending June 30, 2023, the authorities provided to the CBSA are comprised of the Main Estimates.

The statement of authorities (Table 1) presents a net increase of $373.8 million or 15.9% of the Agency's total authorities of $2,717.9 million on June 30, 2023, compared to $2,344.1 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 $349.0 million, an increase in Vote 5 – Capital Expenditures of $9.4 million and an increase in budgetary statutory authorities of $15.4 million, as detailed below.

Vote 1: Operating

The Agency's Vote 1 increased by $349.0 million or 17.8% (excluding the statutory authorities), compared to the same period last fiscal year.

In 2022 to 2023, the Agency received $1,958.6 million as Main Estimates in comparison to the Vote 1 authorities of $2,307.6 million in 2023 to 2024, results in a net increase of $349.0M or 17.8%. The main increases contributing to the changes in operating funding include:

• $124.6 million to Modernize, and sustain travel and trade at Canadian borders
• $57.4 million for Canada's asylum irregular migration system
• $40.9 million in reprofiled funding for various initiatives to future fiscal years
• $32.2 million for Gordie Howe International Bridge (GHIB)
• $25.3 million for the Resettlement of Afghan refugees
• $21.1 million for National guard contracts
• $15.7 million for Irregular migration in the Americas
• $11.0 million in various Transfers
• $8.0 million for Cannabis in Canada
• $5.7 million for Entry-Exit
• $5.5 million for compensation adjustments

The main decreases contributing to the changes in operating funding include:

• $2.0 million reduction for Land Border Crossing Project (LBCP)
• $1.5 million reduction for Drug Impaired Driving (DID)
• $1.2 million reduction for Security Screening Automation (SSA)
• $1.0 million reduction for Canada's Firearms Control Framework

Vote 5: Capital

The Agency's Vote 5 increased by $9.4 million or 5.4% (excluding the statutory authorities), compared to the same period last fiscal year.

In 2022 to 2023, the Agency received $173.1 million as Main Estimates in comparison to the Vote 5 authorities $182.5 million in 2023 to 2024, results in a net increase of $9.4M or 5.4%. The main increases contributing to the changes in capital funding include:

• $39.0 million for Modernize, and sustain travel and trade at Canadian borders
• $14.1 million for Land Border Crossing Project
• $10.3 million for Border Infrastructure (Lacolle)
• $8.8 million for Gordie Howe International Bridge Project (GHIB)

The main decreases contributing to the changes in capital funding include:

• $38.3 million reduction for CBSA Assessment and Revenue Management (CARM)
• $10.4 million reduction for Marine Container Examination Facility (MCEF)
• $6.9 million reduction for Passenger Protect Program
• $6.1 million reduction for Entry Exit
• $5.1 million reduction in reprofiled funding for various initiatives to future fiscal years

Budgetary statutory authorities

The Agency's Statutory Authority related to the employee benefit plan (EBP) increased by $15.4 million, or 7.2% 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 ends June 30, 2023, were $571.3 million, as compared to $524.4 million for year-to-date, quarter ending June 30, 2022. The net increase of $46.9 million or 8.9% in expenditures is mainly due to the following items:

• Increase of $44.6 million or 9.7% in Vote 1 Operating Expenditures year-to-date used at quarter ends. The increase in expenditures is mainly attributed to a $46.4 million increase in Operating expenses, such as shared services for CRA regional service and eManifest, other consulting services for CBSA Assessment and Revenue Management (CARM), computer software for Digital Workplace and Building Protection Services for National Guards Contract. In addition, there is a $18.2 million increase for meal premium and salaries accruals. The increase is offset by a $20.1 million decrease in prepaid legal, property management fees for Port of Entry infrastructure, settlements of claims and an increase of revenues.
• Decrease of $1.2 million or 12.6% in Vote 5 Capital Expenditures year-to-date used at quarter ends. The decrease in expenditures is mainly attributed to expenses for Information Technology Consultants related to ArriveCan.
• Increase of $3.8 million 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 $23.9 million for Professional and special services due to shared services for CRA regional service and eManifest and other consulting services expenses.
• Increase of $19.1 million for Personnel due to meal premium, salaries and pension expenses.
• Increase of $6.0 million in Acquisition of machinery and equipment, for computer software, personal computer equipment, and telecommunications. $3.7 million of the $6.0 million increase is attributed to the project Digital Workplace.
• Increase of $3.9 million for Transportation and Communications due to travel and mobile radios.
• Increase of $0.5 million for Utilities, Materials and Supplies due to miscellaneous materials and supplies and office stationery and supplies.
• Increase of $0.5 million for Information is mainly attributed to communications professional services expenses.
• Increase of $0.4 million in Rental for computer software and buildings.
• Decrease of $2.6 million in Other subsidies and payments which can be mainly attributed to the settlements of damage and other claims against the Crown.
• Decrease of $2.5 million in Repair and Maintenance can be attributed to repair of computer equipment, office furniture and facilities non-capital projects. $1.3 million of the $2.5 million decrease is attributed to the controlled funds for the National Computing Platform.

Graph 2: Comparison of vote netted revenue and revenue collected as of June 30, 2022, and June 30, 2023 (in thousands $)

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 $2.5 million or 71.1% due to the reopening of borders and increased travel after the lifting of COVID-19 restrictions.

4.1 Key senior personnel

Minh Doan, Chief Information Officer and Vice President of the Information, Science and Technology Branch (ISTB), left the Agency on May 1, 2023 to join the Treasury Board Secretariat.

Darryl Vleeming was appointed as the new Chief Information Officer and Vice-President of the Information, Science and Technology Branch (ISTB), effective May 8, 2023.

Shirley Ivan was appointed as Special Advisor to the President and Executive Vice-President on May 1, 2023.

Jacques Cloutier, Special Advisor to the President, retired from the public service and left the Agency on May 26, 2023.

4.2 Operations

With the removal of all travel restrictions due to COVID-19 on October 1, 2022, traveller volumes continue to rise during the 2023 summer travel season, the first one without these restrictions since 2019. To help improve the flow of traffic, on May 23, 2023, the launch of a new Verified Traveller program was announced, which will eventually replace the current Trusted Traveller program. The new program provides eligible travellers (including members of NEXUS and Global Entry) with select benefits at security screening checkpoints, such as keeping laptops, large electronics and compliant liquids and gels in their carry-on, and keeping their shoes, belt and light jacket on. As of June 21, 2023, dedicated Verified Traveller screening lines were in place at select domestic and international checkpoints at the following international airports: Vancouver, Edmonton, Calgary, Winnipeg, Toronto-Pearson, and Montreal-Trudeau.

The Agency was affected by the Public Service Alliance of Canada's strike action between April 19 and May 1, 2023, with the withdrawal of services from the PA, SV, TC, and EB bargaining groups.

The Agency manages a number of significant ongoing Information Technology (IT) projects with a budget over $1 million.