Quarterly financial report for the quarter ended June 30, 2016

1. Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This report should be read in conjunction with the Main Estimates, the Supplementary Estimates and the previous Quarterly Financial Reports.

A summary description of the Parks Canada Agency's programs can be found in Part II of the Main Estimates, and a detailed description in Part III – Report on Plans and Priorities.

This quarterly report has not been subject to an external audit. However, it has been reviewed by the Agency Audit Committee.

1.1 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting (modified cash accounting). The accompanying Statement of Authorities includes the Parks Canada Agency’s spending authorities granted by Parliament and those used by the Agency consistent with the Main Estimates and Supplementary Estimates for the 2016-17 fiscal year. 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 moneys 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.

The Agency uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the department performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year to date results

Budgetary Authorities and Expenditures for the first quarter of 2016-17 and 2015-16 ending June 30

The above chart outlines the total authorities available within the Agency as of June 30 of each year as well as the expenditures during the first quarter. Significant changes to authorities and to expenditure patterns are outlined in the following sections.

2.1 Statement of Authorities (Table 1)

Authorities available for use
This quarterly report reflects the funding available for use from the 2016-17 Main Estimates, the 2015-16 unused spending authority 1 and the 2016-17 Supplementary Estimates A.

As per Table 1 (Statement of Authorities), at June 30, 2016, Parks Canada’s authorities “total available for use for the year ending March 31, 2017” are $259.1 million or 22-percent higher when compared to the same quarter of the previous year (from $1,157.7M to $1,416.8M). The increases in authorities are due to the following factors:

  • $89.8 million increase for the 2015-16 unused spending authority;
  • $84.8 million increase to invest in important federal infrastructure assets across the country, announced in Budget 2015;
  • $78.2 million in additional authorities to revitalize federal infrastructure assets as well as protect nationally significant cultural infrastructure, announced in Budget 2016;
  • $9.9 million increase in Budgetary statutory authorities related to expenditures equivalent to revenues;
  • $7.7 million increase for Rouge National Urban Park following a change in funding profile due to delays in land transfer agreements; and
  • $3.1 million to develop and operate the Wrecks of HMS Erebus and HMS Terror National Historic Site.

These increases are offset by the following decrease in the agency’s spending authorities:

  • $14.4 million for improvements to highways, bridges and dams located in national parks and along historic canals.

Authorities used during the quarter
In the first quarter of 2016-17, total net budgetary expenditures were $175.3 million compared to $140.1 million reported for the same period in 2015-16, resulting in an increase of $35.2 million or 25-percent. The increase in authorities used during the quarter is mostly due to spending on Federal Infrastructure Initiative (Budget 2015).

2.2 Budgetary Expenditures by Standard Object (Table 2)

Planned by Standard Object
Total planned expenditures in the first quarter of 2016-17 are $259.1 million higher compared to the previous year. The variances are mainly reflected as increases in Professional and special services ($105.2M) and in Acquisition of land, buildings and works ($157.9M). This is consistent with the increase in authorities mentioned above since it's mostly related to the Agency's Infrastructure Investments Programs as well as its unused spending authority from the previous fiscal year.

Expended by Standard Object
As per Table 2 (Budgetary Expenditures by Standard Object), the total expended in the first quarter ending June 30, 2016 is $35.2 million or 25-percent higher compared to the previous year. The overall variance can be explained by the following:

Personnel expenditures have increased by $7.2 million, Professional and special services expenditures have increased by $7.8 million and the Acquisition of land buildings and works expenditures have increased by $14.3 million compared to the same quarter last year. This is mainly due to the increase in funding for the Agency's Infrastructure Investments Programs.

Other subsidies and payments have increased by $5.0 million compared to the same quarter last year. This increase is due to a payment of a claim following an arbitral award resulting from a contract dispute.

Transfer payments have decreased by the amount of $3.0 million. This reduction is due to the payment of a onetime grant to the Qikiqtani Inuit Association in the 1st quarter of 2015-16, for the purpose of creating spin-off economic activities related to national parks established in Inuit communities.

All other expenditures are consistent with prior year spending trends.

3. Risks and Uncertainties

Parks Canada’s objectives and Strategic Outcome are influenced by various internal and external factors. The Agency undertakes a risk assessment every year to support decision-making related to priority setting and resource allocation. The risk assessment identifies key risks that have the greatest impact on the Agency’s ability to achieve its Strategic Outcome and expected results. The Agency has identified Environmental Forces Adaptation and Response, Infrastructure Project Delivery, Connecting with Canadians, External Development Pressures and Indigenous Relationships as its key corporate risks for 2016-172. The following are examples of some of the mitigation strategies that Parks Canada is undertaking in order to address these risks:

  • undertaking applicable planning and monitoring to identify potential threats to or at heritage places; continuing to identify best practices to reduce impacts of natural threats to cultural resources, such as shoreline erosion;
  • implementing an Agency project management office to strengthening national project management practices, processes and controls that enable the Agency to achieve effective and prudent project delivery;
  • developing and beginning the implementation of a plan for Parks Canada's participation in federal activities to celebrate the 150th anniversary of Canadian Confederation;
  • continuing to undertake ecological restoration projects as part of the Conservation and Restoration Program to build ecosystem resilience; and
  • Implementing Promising Pathways: A resource guide for strengthening engagement with Indigenous peoples.

4. Significant Changes in Relation to Operations, Personnel and Programs

Effective April 1st, 2016 the following significant changes occurred to operations, programs and personnel;

A new position of Senior Vice-President, Operations, was created to lead the new single and unified Operations Directorate, a focal point for excellence in field operations. The position will be supported by a Vice-President, Operations, and the previous structures of Vice-President, Operations, Eastern Canada, and Vice-President, Operations, Western and Northern Canada ceased to exist.

Thao Pham has joined Parks Canada as the Senior Vice-President, Operations, while Carol Sheedy has moved from her previous role as Vice-President, Operations, Eastern Canada, to the role of Vice-President, Operations.

5. Approval by Senior Officials

Approved by:

Original signed by
Jane Pearse
Acting Chief  Executive Officer, Parks Canada
Gatineau, Canada 
August 25, 2016
Original signed by
Sylvain Michaud
Chief Financial Officer, Parks Canada
Gatineau, Canada
August 23, 2016


  

Parks Canada Agency
For the quarter ended June 30, 2016
Statement of Authorities - Table 1
(Unaudited)
(in thousands of dollars)Fiscal Year 2016-17
Total available for use for the year ending March 31, 2017*Used during the quarter ended June 30, 2016Year to date used at quarter end
Vote 1 - Program expenditures 1,224,473 130,990 130,990
Vote 5 - Payments to the New Parks and Historic Sites Account 500 0 0
Statutory - Contributions to employee benefit plans 53,230 13,209 13,209
Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act 138,591 31,059 31,059
Total Budgetary authorities 1,416,794 175,258 175,258

(in thousands of dollars)Fiscal Year 2015-16
Total available for use for the year ending March 31, 2016*Used during the quarter ended June 30, 2015Year to date used at quarter end
Vote 1 - Program expenditures 976,161 95,415 95,415
Vote 5 - Payments to the New Parks and Historic Sites Account 500 0 0
Statutory - Contributions to employee benefit plans 52,318 11,909 11,909
Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act 128,678 32,730 32,730
Total Budgetary authorities 1,157,657 140,054 140,054

* Includes only Authorities available for use and granted by Parliament at quarter-end


Parks Canada Agency
For the quarter ended June 30, 2016
Budgetary Expenditures by Standard Object - Table 2
(Unaudited)
(in thousands of dollars)Fiscal Year 2016-2017
Planned expenditures for the year ending March 31, 2017*Expended during the quarter ended June 30, 2016Year to date used at quarter end
Expenditures:  
Personnel 375,920 95,602 95,602
Transportation and communications 24,044 3,603 3,603
Information 11,469 1,240 1,240
Professional and special services 261,011 20,428 20,428
Rentals 39,080 2,884 2,884
Repair and maintenance 28,402 2,409 2,409
Utilities, materials and supplies 80,305 6,281 6,281
Acquisition of land, buildings and works 495,850 30,762 30,762
Acquisition of machinery and equipment 61,042 5,188 5,188
Transfer payments 23,658 449 449
Other subsidies and payments 16,013 6,412 6,412
Total budgetary expenditures 1,416,794 175,258 175,258

(in thousands of dollars)Fiscal Year 2015-2016
Planned expenditures for the year ending March 31, 2016*Expended during the quarter ended June 30, 2015Year to date used at quarter end
Expenditures:  
Personnel 374,973 88,413 88,413
Transportation and communications 18,655 2,655 2,655
Information 10,341 1,064 1,064
Professional and special services 155,764 12,659 12,659
Rentals 23,134 2,277 2,277
Repair and maintenance 102,420 2,921 2,921
Utilities, materials and supplies 57,393 5,976 5,976
Acquisition of land, buildings and works 337,931 16,422 16,422
Acquisition of machinery and equipment 41,178 3,481 3,481
Transfer payments 19,058 3,415 3,415
Other subsidies and payments 16,810 771 771
Total budgetary expenditures 1,157,657 140,054 140,054

* Includes only Authorities available for use and granted by Parliament at quarter-end

1 The Parks Canada Agency operates on the basis of a two-year appropriation, whereby any surplus amount reported at the end of a fiscal year is carried forward and is available to be used the following year. However, any portion of the unspent funds not spent will lapse at the end of the two years. The exception being that authorities equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act is not subject to this time limit. This process differs from that of other government departments as they can only claim five percent of their operating vote and twenty percent of their capital vote through the carry forward process each year.

2 The complete list of Corporate risks identified by Parks Canada Agency can be found in Part III – Report on Plans and Priorities.