Canada Border Services Agency: Quarterly Financial Report — For the quarter ended June 30, 2024

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 for the 2023 to 2024 and 2024 to 2025 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 Government departments. 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, 2024, the authorities provided to the CBSA comprise the Main Estimates, and any unused spending authorities carried forward from the previous fiscal year.

The statement of authorities (Table 1) presents a net increase of $90.3 million or 3.3% of the Agency’s total authorities of $2,808.2 million on June 30, 2024, compared to $2,717.9 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 $41.9 million, an increase in Vote 5 — Capital Expenditures of $61.1 million and a decrease in budgetary statutory authorities of $12.7 million, as detailed below.

Vote 1: Operating

The Agency’s Vote 1 increased by $41.9 million or 1.8% (excluding the statutory authorities), compared to the same period last fiscal year. The increase is attributed to the net effect of the following significant items:

• $120.7 million increase due to the timing of receiving the carry forward of unused spending authorities; and
• $78.8 million net decreases in Main Estimates.
  • The main increases contributing to the changes in operating funding include:
    • $42.6M for Compensation adjustments
    • $17.7M for Temporary Resident Processing
    • $16.9M for Strengthening the Front Line Capacity
    • $12.2M for Gordie Howe International Bridge (GHIB)
    • $7.4M for Immigration Levels Plan
    • $2.7M for Implementation of Canada's Indo-Pacific Strategy
    • $1.4M for National Security Intelligence Review
    • $0.8M for Canada’s Trade Remedy System
    • $0.5M for National Guards Contracts
    • $0.3M for Modernize, & sustain travel and trade at Canadian borders
    • $0.2M for Funding to Replace Large-Scale Imaging Equipment
  • The main decreases contributing to the changes in operating funding include:
    • $74.0M reduction for Canada’s asylum irregular migration system
    • $50.1M reduction in Base funding, mainly related to the Refocusing Government Spending exercise
    • $26.5M reduction for Reprofiled funding for various initiatives to future fiscal years
    • $12.8M reduction for Various Transfers
    • $7.6M reduction for Resettlement of Afghan refugees
    • $3.0M reduction for Safe Third Party Country Agreement
    • $2.0M reduction for Ukrainian Nationals
    • $1.9M reduction for Security Screening Automation (SSA) Project
    • $1.2M reduction for Cross Border Currency Reporting (CBCR) automation
    • $1.1M reduction for Guns and Gangs (G&G)
    • $0.5M reduction for Opioids
    • $0.4M reduction for Trade Fraud/Trade Based Money Laundering
    • $0.3M reduction for Canada’s Firearm Control Framework
    • $0.1M reduction for Land Border Crossing Project (LBCP)

Vote 5: Capital

The Agency’s Vote 5 increased by $61.1 million or 33.5% (excluding the statutory authorities), compared to the same period last fiscal year. The increase is attributed to the net effect of the following significant items:

• $37.9 million in increase due to the timing of receiving the carry forward of unused spending authorities; and
• $23.2 million net increases in Main Estimates.
  • The main increases contributing to the changes in capital funding include:
    • $27.5M for Reprofiled funding for various initiatives to future fiscal years
    • $17.6M for Land Border Crossing Project (LBCP)
    • $6.2M for Border Infrastructure (Lacolle)
    • $6.0M for Funding to Replace Large-Scale Imaging Equipment
    • $1.6M in Base funding
  • The main decreases contributing to the changes in capital funding include:
    • $17.2M reduction for Gordie Howe International Bridge (GHIB)
    • $11.5M reduction for Modernize, & sustain travel and trade at Canadian borders
    • $2.3M reduction for Security Screening Automation (SSA) Project
    • $2.1M reduction for Canada’s asylum irregular migration system
    • $1.1M reduction for Safe Third Party Country Agreement
    • $1.0M reduction for Marine Container Examination Facility (MCEF)
    • $0.4M reduction for Guns and Gangs (G&G)

Budgetary statutory authorities

The Agency’s Statutory Authority related to the employee benefit plan (EBP) decreased by $12.7 million, or 5.6% from the previous year, due to an EBP adjustment set by the Treasury Board.

2.2 Explanations of significant variances in expenditures from previous year

As indicated in the statement of authorities (Table 1), the Agency’s year-to-date expenditures, at quarter end June 30, 2024, were $553.9 million, compared to $571.3 million for year-to-date, quarter ending June 30, 2023. The net decrease of $17.4 million or 3.0% in expenditures is mainly due to the following items:

• Decrease of $16.2 million or 3.2% in Vote 1 Operating Expenditures. The decrease in expenditures is mainly attributed to increase in salaries and meal premiums and an increase for prepaid legal services offseted by decrease in Operating expenses
• Increase of $1.7 million or 19.4% in Vote 5 Capital Expenditures, mainly attributed to expenses for facilities capital projects, such as Port of Entry Infrastructure and Land border crossing project
• Decrease of $2.9 million in statutory expenditures

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

• Increase of $20.8 million for Personnel due to salaries and meal premiums. Salaries were increased due to the newly negotiated collective agreements for the following groups: Public Service Alliance of Canada (PSAC), Information Technology (IT), Executive (EX) and Financial Management (FI)
• Decrease of $29.7 million for Professional and special services, which can be mainly attributed to reductions in IT shared services, IT consultants, other consulting services and building protection services
• Decrease of $6.4 million for Acquisition of machinery and equipment, which is related to computer software and equipment, office furniture and fixtures and image/video equipment expenses

Graph 2: Comparison of vote netted revenue budget and revenue collected as of June 30, 2023, and June 30, 2024 (in thousands $)

The planned revenue from the sales of services reflects the Agency’s revenue respending authority. The year-to-date revenue from services has increased by $1.0 million or 16.4% due to the reopening of borders and increased travel after the lifting of COVID-19 restrictions. The increased travel has resulted in higher regular revenues collected in programs such as Nexus.

4.1 Key senior personnel

Darryl Vleeming, Vice President of the Information, Science and Technology Branch (ISTB) and Chief Information Officer, left the Agency on June 10, 2024. His replacement, Peter Littlefield, was announced on June 20.

New Vice President of the Travellers Branch, Rob Chambers, was announced June 20. He replaced Denis Vinette who retired on January 19, 2024.

4.2 Operations

The CBSA Assessment and Revenue Management (CARM) system was launched internally on May 13, 2024 as planned to advance the Agency’s compliance and enforcement efforts, as well as assume the responsibility for the administration of import-export program accounts, a role previously held by the Canada Revenue Agency (CRA). The Order in Council that brings CARM into force was amended to reflect the launch of CARM for external clients on October 21, 2024.

On June 10, the mid-span connection of the Gordie Howe International Bridge was completed. As it is now possible to cross the Canada-U.S. border on the bridge, border services officers began to utilize a temporary port of entry to facilitate the movement of workers and materials at the construction site which effectively became an international zone with the completion of the mid-span connection.

The Government of Canada and the Public Service Alliance of Canada reached a tentative agreement for the Border Services group (FB) on June 11, 2024, averting a potential strike.

The CBSA invests in a number of information technology (IT) projects as part of its transformation agenda towards creating a more modernized organization. Please find enclosed a list of key IT projects with a budget over $1 million.