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Quarterly Financial Report

Quarterly financial report for the quarter ended December 31, 2013

Introduction

This quarterly financial 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 Secretariat. This report should be read in conjunction with the Main Estimates, the Supplementary Estimates and the previous Quarterly Financial Reports as well as Canada's Economic Action Plan 2012 (Budget 2012).

A summary description of the Parks Canada Agency's programs can be found in Part II of the Main Estimates.

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

Basis of Presentation

The quarterly financial 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 2013-2014 fiscal year. This quarterly financial 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 funds 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.

In accordance with Treasury Board accounting policies, 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.

As Part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year.  Budget 2012 was tabled on March 29, 2012 after the tabling of the Main Estimates on February 28, 2012.  As a result the measures announced in the Budget 2012 could not be reflected in the 2012-2013 Main Estimates. In 2013-2014, the changes to departmental authorities resulting from Budget 2012 were reflected in the 2013-2014 Main Estimates tabled in Parliament.

Additional funding was sought by Parks Canada through 2013-2014 Supplementary Estimates B. The department received this additional authority net of the planned savings or other amounts transferred by Treasury Board authority to a frozen allotment.

Highlights of fiscal quarter and fiscal year to date (YTD) results

This section highlights the significant items that contributed to the net increase in resources available for the year and net increase in actual expenditures for the quarter ended December 31.

Budgetary Authorities and Expenditures Graph

The above chart outlines the total authorities available within the Agency as of December 31 of each year, the year to date expenditures as well as the expenditures during the quarter. Further analysis is provided below.

Significant Changes to Statement of Authorities

Authorities available for use:
This third quarterly report, ending December 31, 2013, reflects the authorities that were approved for this period. The funding available for use includes the 2013-2014 Main Estimates, the carry-forward and Supplementary Estimates B. As per the Statement of Authorities Table, at December 31, 2013, Parks Canada's authorities "total available for use for the year ending March 31, 2014" are $48.9 million (6.4%) higher when compared to the same quarter of the previous year.

These changes in Authorities are a result of increases totaling $119.0 million which are offset by decreases totaling $70.1 million. The increases are mainly attributable to $47.2 million carried over from 2012-2013, $28.7 million for non-recurring salary benefits, $18.9 million for urgent improvements to highways and bridges in national parks, $17.0 million to develop and operate Rouge National Urban Park, $3.0 million to recapitalize dams and locks along the Trent-Severn Waterways and a number of other small increases amounting to $4.2 million. The decreases are mainly attributable to a $19.7 million decrease for savings identified as part of the Budget 2012, a $15 million decrease as a result of the planned completion of a section of the Trans-Canada Highway in Banff National Park, an $11.6 million reimbursement to Transport Canada after the completion of the Trans-Canada Highway Twinning project in Banff National Park, a $7.5 million decrease in funding for emergency response to natural disasters, a $4.5 million decrease supporting the building of the Trans-Canada Trail, and a number of small decreases amounting to $11.8 million.

Authorities used during the quarter:
In the third quarter of 2013-2014, total budgetary expenditures were $186.5 million compared to $147.0 million reported in the same period of 2012-2013, indicating a $39.5 million (26.9%) increase for this period.

Authorities used in Vote 20 – Program expenditures during the third quarter of 2013-2014 increased by $31.6 million compared to the same quarter last year.

Statutory Authorities used during the third quarter of 2013-2014 show a $3.3 million increase in Contributions to Employee Benefit Plans and an increase of $4.6 million in expenditures equivalent to revenues.

Year to date used:
The year-to-date total budgetary expenditures were $485.3 million compared to $465.2 million reported at the same time last year, indicating a $20.1 million (4.3%) increase. This variance is mostly due to non-recurring salary benefits paid out as well as increased spending to repair extensive damage to infrastructure, as a result of heavy rains flood that occurred in Southern Alberta, and to expenditures in high risk assets.  These increases are offset by decreased spending resulting from the spending restraint measures put in place as well as the impact to our workforce following the implementation of Budget 2012 savings measures.

Significant Changes to Budgetary Expenditures by Standard Object

Expended:
As per the Budgetary Expenditures by Standard Object Table, the total expended in the third quarter ending December 31, 2013 increased by $39.5 million compared to the previous year. This difference can be explained by the following:

Personnel expenditures have increased in the third quarter by $13.4 million compared to the previous year however the year to date expenditures have decreased by $4.0 million. This is mainly due to the decrease in salary and wages expenditures resulting from the spending restraint measures put in place as well as the impact to our workforce following the implementation of Budget 2012 savings measures.  These decreases are offset by the payment of non-recurring salary benefits (i.e. severance pay) made during the third quarter of 2013-14.

The Professional and Special Services and the Repair and Maintenance expenditures have noticeably increased in the third quarter and in the year-end to date, when compared to previous fiscal year. These increases mostly relate to expenditures in high risk assets which involve projects requiring engineering consulting services such as bridges and roads and to costs for immediate repairs to infrastructure to ensure public safety following the severe flooding in Southern Alberta which occurred from June 19 to 21, 2013.

Expenditures related to Other Subsidies and Payments have increased in the third quarter by $4.7 million and by $2.0M for the year-end to date, these differences are mainly attributable to expenditures related to the expansion of the Nahanni National Park located in the southwest corner of the Northwest Territories.  

Transfer Payments expenditures have decreased in the third quarter and in the year-to-date when compared to the previous year by $1.3 million and $4.5 million respectively. This is mainly attributable to a contribution agreement for Canada's fast start financing commitments under the Copenhagen Accord, and to the Trans-Canada Trail contribution that both ended last fiscal year.

All other expenditures are consistent with prior year spending trends.

Planned:
As per the Budgetary Expenditures by Standard Object Table, the total planned expenditures in the third quarter ending December 31, 2013 increased by $48.9 million compared to the previous year, from $767.3 million to $816.2 million. The items contributing to this increase are detailed in the Authorities available for use section above.

Risks and Uncertainties

Parks Canada Agency is funded at 78 percent through voted parliamentary spending authorities appropriated over a two-year period and at 22 percent through respendable revenue of which 60 percent originate from entrance and camping fees. These revenues are impacted by economic fluctuations, competition from other parks and cultural attractions, and weather conditions.    

Built assets (e.g. highways, bridges, dams, historic sites etc.) are continuing to deteriorate with the result that almost half of the Agency's built assets are in currently classified as being in poor to very poor condition. Incorporating key recommendations from an independent third-party review of the results of Parks Canada's 2012 internal national asset review, and by carrying out a strategic asset assessment will enable the Agency to focus resources on highest priority investment requirements and maximize program delivery.

Significant Changes in Relation to Operations, Personnel and Programs

There are no significant changes in relation to operations, personnel and programs to report during this quarter.

Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 of $6.0 million for 2012-2013, $19.7 million for 2013-2014 and $29.2 million for 2014-2015.

These savings are being achieved through efficiencies and streamlining of operations within Parks Canada while the Agency continues to emphasize quality delivery to Canadians.  In addition, the Agency is absorbing salary increases as announced in Budget 2010, as well as inflation.

The following are the major elements being implemented:

  • Streamlining and consolidating technical and professional services.
  • Aligning the seasonality of our workforce to reflect visitor usage patterns of Canada's Parks.

Parks Canada has implemented national human resources strategies to maintain internal networks and focus on attracting, retaining and engaging its workforce. This is aimed at ensuring that Parks Canada's professional and dedicated workforce continues to provide quality services and programs to Canadians.

Approval by Senior Officials

Approved by:

Alan Latourelle
Chief Executive Officer, Parks Canada
Date: February 19, 2014
Maria Stevens
Chief Financial Officer, Parks Canada
Date: February 14, 2014



Statement of Authorities (Unaudited)
(in thousands of dollars) Fiscal Year 2013-2014
Total available for use for the year ending March 31, 2014* Used during the quarter ended December 31, 2013 Year-to-date used at quarter end
- Vote 20 - Program expenditures 655,685 139,252 348,526
- Vote 25 - Payments to the New Parks and Historic Sites Account 500 0 0
Budgetary statutory authorities  
- Contributions to Employee benefit plans 48,987 16,198 40,494
- Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act 111,000 31,084 96,283
Total Budgetary Authorities 816,172 186,534 485,303
* Includes only authorities available for use and granted by Parliament at quarter-end
** Total available for use does not reflect measures announced in Budget 2012


Statement of Authorities (Unaudited)
(in thousands of dollars) Fiscal Year 2012-2013
Total available for use for the year ending March 31, 2013** Used during the quarter ended December 31, 2012 Year-to-date used at quarter end
- Vote 20 - Program expenditures 604,018 107,630 328,252
- Vote 25 - Payments to the New Parks and Historic Sites Account 500 0 0
Budgetary statutory authorities  
- Contributions to Employee benefit plans 51,763 12,941 38,823
- Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act 111,000 26,460 98,104
Total Budgetary Authorities 767,281 147,031 465,179
* Includes only authorities available for use and granted by Parliament at quarter-end
** Total available for use does not reflect measures announced in Budget 2012




Budgetary Expenditures by Standard Object (Unaudited)
(in thousands of dollars) Fiscal Year 2013-2014
Planned expenditures for the year ending March 31, 2014* Expended during the quarter ended December 31, 2013 Year-to-date used at quarter end
Expenditures:
Personnel 377,060 100,417 296,145
Transportation and communications 19,546 3,592 9,982
Information 13,467 1,079 3,856
Professional and special services 126,168 26,472 56,139
Rentals 20,760 3,072 10,373
Repair and maintenance 91,305 26,591 50,621
Utilities, materials and supplies 48,530 9,655 24,981
Acquisition of land, buildings and works 44,367 3,416 4,629
Acquisition of machinery and equipment 31,046 4,495 10,439
Transfer payments 10,394 1,074 3,260
Other subsidies and payments 33,529 6,671 14,878
Total budgetary expenditures 816,172 186,534 485,303
* Includes only authorities available for use and granted by Parliament at quarter-end
** Total available for use does not reflect measures announced in Budget 2012
Budgetary Expenditures by Standard Object (Unaudited)
(in thousands of dollars) Fiscal Year 2012-2013
Planned expenditures for the year ending March 31, 2013** Expended during the quarter ended December 31, 2012 Year-to-date used at quarter end
Expenditures:
Personnel 394,437 86,954 300,122
Transportation and communications 19,000 3,600 8,783
Information 12,000 1,730 4,989
Professional and special services 103,024 20,698 44,013
Rentals 15,000 2,645 12,063
Repair and maintenance 94,000 15,482 42,545
Utilities, materials and supplies 44,000 7,766 22,802
Acquisition of land, buildings and works 23,000 606 1,533
Acquisition of machinery and equipment 23,000 3,190 7,682
Transfer payments 13,820 2,377 7,748
Other subsidies and payments 26,000 1,983 12,899
Total budgetary expenditures 767,281 147,031 465,179
* Includes only authorities available for use and granted by Parliament at quarter-end
** Total available for use does not reflect measures announced in Budget 2012