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Western Economic Diversification Canada’s Quarterly Financial Report for the quarter ended December 31, 2019

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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. 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 for the 2019-2020 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:

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.

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

The following section highlights significant changes to fiscal quarter results as of December 31, 2019.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for use for fiscal year 2019-2020 are $44.5 million, a net increase of $4.6 million, or 12%, compared to the $39.9 million for 2018-2019. The net increase is explained by:

Total authorities used year-to-date increased to $29.6 million for the quarter ended December 31, 2019, compared to $26.3 million at December 31, 2018. The $3.3 million increase, or 13%, is mainly explained by the increased salary costs to cover various transfer payment programming and retroactive payments from the settlement of various collective bargaining agreements, increases for office and technology fit-ups and offset mainly by savings from workplace 2.0 fit-up costs.

Graph 1 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)

Total Available for Use and Used for Vote 1 (in thousands of dollars)
Total Available for Use and Used for Vote 1 (in thousands of dollars)

This bar graph breaks down total authorities available for use for fiscal year 2019-20 and the authorities used at quarter end and then compares them to fiscal year 2018-19.

2019-2020

  • $44,518 represents total available for use for the year ending March 31
  • $29,642 represents year-to-date authorities used for the quarter ending December 31

2018-2019

  • $39,941 represents total available for use for the year ending March 31
  • $26,323 represents year-to-date authorities used for the quarter ending December 31

 

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for fiscal year 2019-2020 are $261.6 million, a net increase of $61.8 million, or 31%, compared to the $199.8 million for 2018-2019. The net increase is explained by:

Total authorities used year-to-date for the quarter-ended December 31, 2019 decreased to $113.0 million, compared to $124.9 million at December 31, 2018. The $11.9 million decrease, or -10%, is explained by:

Graph 2 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)

Total Available for Use and Used for Vote 5 (in thousands of dollars
Total Available for Use and Used for Vote 5 (in thousands of dollars)

This bar graph breaks down total authorities available for use for fiscal year 2019-20 and the authorities used at quarter end and then compares them to fiscal year 2018-19.

2019-2020

  • $261,549 represents total available for use for the year ending March 31
  • $112,966 represents year-to-date authorities used for the quarter ending December 31

2018-2019

  • $199,763 represents total available for use for the year ending March 31
  • $124,868 represents year-to-date authorities used for the quarter ending December 31

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for fiscal year 2019-2020 changed to $4.8 million, an increase of $0.8 million when compared to the $4.0 million in 2018-2019. The increase is a result of additional salary funding provided through Budget 2018 and Budget 2019 announcements and to incorporate additional funding as the employee benefit plan rate increased to 27%.

There is a slight increase in budgetary statutory authorities used for this reporting period when compared to the previous fiscal year.

Graph 3 illustrates total authorities available for use for the fiscal year, and authorities used at quarter-end.

(in thousands of dollars)

Total Available for Use and Used for Budgetary Statutory Authorities (in thousands of dollars)
Total Available for Use and Used for Budgetary Statutory Authorities (in thousands of dollars)

This bar graph breaks down total authorities available for use for fiscal year 2019-2020 and the authorities used at quarter end and then compares them to fiscal year 2018-2019.

2019-2020
  • $4,806 represents total available for use for the year ending March 31
  • $3,072 represents year-to-date authorities used for the quarter ending December 31

2018-2019

  • $4,047 represents total available for use for the year ending March 31
  • $2,869 represents year-to-date authorities used for the quarter ending December 31

Statement of the Departmental Budgetary Expenditures by Standard Object

Expenditures by standard object for the quarter ended December 31, 2019, were $67.2 million, which reflects an increase of $24.7 million, or 58%, from the $42.5 million at December 31, 2018. This variance is explained by:

Additional information can be found in the Statement of Authorities, Vote 1 and Vote 5 sections above.

Graphs 4 and 5 illustrate actual expenditures for the quarter’s end.

(in thousands of dollars)

Actual Expenditures Quarter Ended December 31, 2019 (in thousands of dollars)
Actual Expenditures Quarter Ended December 31, 2019 (in thousands of dollars)

This pie chart breaks down actual expenditures for the quarter ended December 31, 2019.

  • $54,905 represents actual spending on Transfer Payments, which accounts for 82% of Actual Expenditures quarter ended December 31, 2019
  • $9,631 represents actual spending on Personnel, which accounts for 14% of Actual Expenditures quarter ended December 31, 2019
  • $2,708 represents actual spending on Other operating costs, which accounts for 4% of Actual Expenditures quarter ended December 31, 2019
Actual Expenditures Quarter Ended December 31, 2018 (in thousands of dollars)
Actual Expenditures Quarter Ended December 31, 2018 (in thousands of dollars)

This pie chart breaks down actual expenditures for quarter ended December 31, 2018.

  • $32,462 represents actual spending on Transfer Payments, which accounts for 76% of Actual Expenditures quarter ended December 31, 2018
  • $7,760 represents actual spending on Personnel, which accounts for 18% of Actual Expenditures quarter ended December 31, 2018
  • $2,283 represents actual spending on Other operating costs, which accounts for 6% of Actual Expenditures quarter ended December 31, 2018

Risks and Uncertainties

The department is managing the allocation of resources 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. WD has not identified any significant financial risks from their annual risk assessment.

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.

Significant Changes in Relation to Operations, Personnel and Programs

There are no significant changes in relation to operations, personnel and programs for this reporting period.

Approval by Senior Officials

Approved by:

Original signed by:

________________________
Dylan Jones
Deputy Minister

Edmonton, Canada
Date: February 21, 2020

Original signed by:

________________________
Cathy McLean
Chief Financial Officer


Statement of Authorities (unaudited)

Fiscal year 2019-2020 (in thousands of dollars)

Fiscal year 2019-2020 (in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2020* Used during the quarter ended December 31, 2019 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 44,518 $ 11,315 $ 29,642
Vote 5 - Grants and contributions 261,549 54,905 112,966
Budgetary statutory authorities 4,806 1,024 3,072
Spending of proceeds from the disposal of surplus Crown assets 0 0 0
Total authorities $ 310,873 $ 67,244 $ 145,680

 

Fiscal year 2018-2019 (in thousands of dollars)

Fiscal year 2018-2019 (in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2019* Used during the quarter ended December 31, 2018 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 39,941 $ 9,087 $ 26,323
Vote 5 - Grants and contributions 199,763 32,462 124,868
Budgetary statutory authorities 4,035 956 2,869
Spending of proceeds from the disposal of surplus Crown assets 12 0 0
Total authorities $ 243,751 $ 42,505 $ 154,060

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

 

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2019-2020 (in thousands of dollars)

Fiscal Year 2019-2020 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2020* Expended during the quarter ended December 31, 2019 Year-to-date used at quarter-end
Personnel $ 35,727 $ 9,631 $ 26,205
Transportation and communications 2,815 432 968
Information 375 103 207
Professional and special services 7,238 1,460 3,947
Rentals 1,082 148 483
Repair and maintenance 880 13 34
Utilities, materials and supplies 172 43 120

Acquisition of machinery and equipment

1,036 421 505
Transfer payments 261,548 54,905 112,966
Other subsidies and payments 0 88 245
Total net budgetary expenditures $ 310,873 $ 67,244 $ 145,680

 

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2018-2019 (in thousands of dollars)

Fiscal Year 2018-2019 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2019* Expended during the quarter ended December 31, 2018 Year-to-date used at quarter-end
Personnel $ 30,939 $ 7,760 $ 22,787
Transportation and communications 1,945 444 936
Information 363 58 119
Professional and special services 8,175 1,530 4,073
Rentals 1,078 69 334
Repair and maintenance 519 20 326
Utilities, materials and supplies 158 39 75

Acquisition of machinery and equipment

811 12 68
Transfer payments 199,763 32,462 124,868
Other subsidies and payments 0 111 474
Total net budgetary expenditures $ 243,751 $ 42,505 $ 154,060

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

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