Western Economic Diversification Canada
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Western Economic Diversification Canada’s Quarterly Financial Report for the quarter ended September 30, 2017

Statement Outlining Results, Risks and Significant Changes in Operations, Personnel and Programs


Introduction

This quarterly financial report should be read in conjunction with the Main Estimates and Supplementary Estimates (A). It has been prepared by management as required by section 65.1 of the Financial Administration Act (FAA) and in the form and manner prescribed by the Treasury Board. This quarterly report has not been subject to an external audit or review.

Authority, Mandate and Program Activities

Western Economic Diversification Canada (WD) is mandated to "promote the development and diversification of the economy of Western Canada and to advance the interests of the West in national economic policy, program and project development and implementation."

The Departmental Plan and Main Estimates provide further information on WD's authority, mandate and program activities.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the department's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates (A) for the 2017-2018 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 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.

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.

Financial Structure

WD manages its expenditures under two votes:

  • Vote 1 – Net operating expenditures include salary, and other operating costs (e.g., transportation and communications; professional and special services).
  • Vote 5 – Grants and contributions include all transfer payments.

Budgetary statutory authorities represent payments made under legislation approved by Parliament, and include items such as the Government of Canada's share of employee benefit plans and other minor items.

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Highlights of Fiscal Quarter and Fiscal Year to Date (YTD) Results

The following section highlights significant changes to fiscal quarter results as of September 30, 2017.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for use for fiscal year 2017-2018 are $37.5 million, a net increase of $0.8 million, or 2%, compared to the $36.7 million for 2016-2017. The net increase is explained by:

  • $1.1 million increase to cover retroactive pay for new collective bargaining agreements;
  • $0.3 million increase to deliver the Drywall Anti-Dumping Duty Relief Program; and
  • $0.6 million net decrease for the delivery of programs on behalf of Infrastructure Canada, for Budget 2016 reductions in professional services, travel and advertising, and other minor adjustments.

Total authorities used year-to-date increased to $17.3 million for the quarter ended September 30, 2017, compared to $16.0 million at September 30, 2016. The increase of $1.3 million, or 8%, is mainly explained by the increase in salary costs to cover retroactive payments from the settlement of various collective bargaining agreements.

Text Version(Link 1): Graph 1 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)
This bar graph breaks down total authorities available for use for fiscal year 2017-18 and compares them to fiscal year 2016-17

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for fiscal year 2017-2018 are $173.2 million, a net increase of $14.2 million, or 9%, compared to the $159.0 million for 2016-2017. The net increase is explained by:

  • $11.6 million increase to fund the Drywall Anti-Dumping Duty Relief Program;
  • $4.5 million increase in funding transferred from Agriculture and Agri-Food Canada;
  • $1.4 million decrease related to the timing difference for reinvestment of receipts from repayable contributions; and
  • $0.5 million net decrease for the Rick Hansen Foundation and other minor cash flow adjustments.

Total authorities used year-to-date for the quarter-ended September 30, 2017 increased to $39.1 million, compared to $33.9 million at September 30, 2016. The $5.2 million increase, or 15%, is mainly explained by reimbursements under the Drywall Anti-Dumping Duty Relief Program, Canada 150 Community Infrastructure Program and timing differences in the processing of claims for reimbursement under various other transfer payment programs.

Text Version(Link 2): Graph 2 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)
This bar graph breaks down total authorities available for use for fiscal year 2017-18 and compares them to fiscal year 2016-17.

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for fiscal year 2017-2018 have decreased by $0.3 million, or 7%, to $3.8 million compared to 2016-2017. The decrease is due to the regular yearly adjustments to the employee benefit plan to correctly reflect planned requirements.

There are no significant variances in budgetary statutory authorities used for this reporting period when compared to the previous fiscal year.

Text Version(Link 3): Graph 3 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)
This bar graph breaks down total authorities available for use for fiscal year 2017-18 and compares them to fiscal year 2016-17.

Statement of the Departmental Budgetary Expenditures by Standard Object

Expenditures by standard object for the quarter ended September 30, 2017, were $28.4 million, which reflects an increase of $2.7 million, or 10%, from the $25.7 million at September 30, 2016. This variance relates mainly to claims paid under the Drywall Anti-Dumping Duty Relief Program and the Canada 150 Community Infrastructure Program; retroactive salary payments; and timing differences in the processing of claims for reimbursement under various other transfer payment programs. Additional information can be found in the Statement of Authorities, Vote 1 and Vote 5 sections above.

Text Version(Link 4): Graphs 4 and 5 illustrate actual expenditures for the quarter-end.

(in thousands of dollars)
This pie chart breaks down actual expenditures for quarter ended September 30, 2017.This pie chart breaks down actual expenditures for the quarter ended September 30, 2016.

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Risks and Uncertainties

The department is managing the allocation of resources for items announced in Budget 2017 within a well-defined framework of accountabilities, policies and procedures including a system of budgets, reporting and other internal controls to manage within available resources and Parliamentary authorities. WD also conducts an annual risk assessment exercise as part of its overall risk management approach. For the 2017-18 risk assessment, no significant financial risks were identified.

The department maintains financial management processes to ensure effective budget management. Processes are in place to assess the impact of project timing fluctuations and the process for forecasting multi-year funding requirements. The decision-making process facilitates the re-allocation of financial resources to priority initiatives.

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Significant Changes in Relation to Operations, Personnel and Programs

The Drywall Anti-Dumping Duty Relief Program provides drywall contractors and builders in Western and Northern Canada with compensation for elevated drywall costs due to anti-dumping duties imposed on imported drywall from the United States. Additionally the Program supports homeowners in the Regional Municipality of Wood Buffalo whose homes were severely damaged or destroyed by the 2016 wildfires, and are now facing higher rebuilding costs. This grant program began taking applications on May 1, 2017.

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Approval by Senior Officials

Approved by:

 

 

Original signed by:

Dylan Jones
Deputy Minister
Original signed by:

Kathryn Mattern
A/Chief Financial Officer

 

Edmonton, Canada
Date: November 15, 2017


 

Statement of Authorities (unaudited)

Authorities  Fiscal year 2017-2018 (in thousands of dollars)
Total available for use for the year ending March 31, 2018* Used during the quarter ended 
September 30, 2017
Year to date used at quarter-end
Vote 1 - Net operating expenditures $  37,472 $  8,828 $  17,335
Vote 5 – Grants and contributions 173,158 18,614 39,073
Budgetary statutory authorities 3,751 925 1,850
Spending of proceeds from the disposal of surplus Crown assets 16 - -
Total authorities $214,397 $28,367 $58,258

 

Authorities  Fiscal year 2016-2017 (in thousands of dollars)
Total available for use for the year ending March 31, 2017* Used during the quarter ended 
September 30, 2016
Year to date used at quarter-end
Vote 1 - Net operating expenditures $  36,720 $  8,214 $  16,038
Vote 5 – Grants and contributions 158,960 16,437 33,846
Budgetary statutory authorities 4,088 1,022 2,044
Spending of proceeds from the disposal of surplus Crown assets 2 - -
Total authorities $199,770 $25,673 $51,928

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

 

Departmental Budgetary Expenditures by Standard Object (unaudited)

Expenditures Fiscal year 2017-2018 (in thousands of dollars)
Planned expenditures for the year ending March 31, 2018* Expended during the quarter ended September 30, 2017 Year to date used at quarter-end
Personnel $  28,675 $  8,568 $  16,385
Transportation and communications 1,664 194 370
Information 426 60 81
Professional and special services 7,469 827 2,026
Rentals 1,206 111 194
Repair and maintenance 432 25 26
Utilities, materials and supplies 318 22 34
Acquisition of machinery and equipment 1,049 13 42
Transfer payments 173,158 18,614 39,073
Other subsidies and payments (67) 27
Total net budgetary expenditures $214,397 $28,367 $58,258

 

Expenditures Fiscal year 2016–17 (in thousands of dollars)
Planned expenditures for the year ending March 31, 2017*

Expended during the quarter ended September 30, 2016

Year to date used at quarter-end
Personnel $  27,856 $  7,417 $  14,605
Transportation and communications 1,398 225 428
Information 372 76 88
Professional and special services 8,007 1,061 2,224
Rentals 1,869 320 373
Repair and maintenance 43 169 170
Utilities, materials and supplies 263 21 29
Acquisition of machinery and equipment 1,002 121 128
Transfer payments 158,960 16,437 33,846
Other subsidies and payments (174) 37
Total net budgetary expenditures $199,770 $25,673 $51,928

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