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Western Economic Diversification Canada’s Quarterly Financial Report for the quarter ended June 30, 2020

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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 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 2020-2021 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:

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

The following section highlights significant changes to fiscal quarter results as of June 30, 2020.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for use for fiscal year 2020-2021 are $35.3 million, a net decrease of $6.8 million, or -16%, compared to the $42.1 million for 2019-2020. The net decrease is explained by:

Total authorities used has increased to $9.8 million for the quarter ended June 30, 2020, compared to $9.6 million June 30, 2019. The increase of $0.2 million or 2% is explained by salaries increases in 2020 to deliver WD's transfer payment programs including the Regional Relief and Recovery Fund. This is offset by reductions in other operating costs such as travel, professional services and timing differences in ongoing expense accounts.

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 2020-2021 and the authorities used at quarter end and then compares them to fiscal year 2019-2020.

2020-2021

  • $35,262 represents total available for use for the year ending March 31
  • $9,780 represents year-to-date authorities used for the quarter ending June 30

2019-2020

  • $42,103 represents total available for use for the year ending March 31
  • $9,610 represents year-to-date authorities used for the quarter ending June 30

 

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for fiscal year 2020-2021 are $192.7 million, a net decrease of $65.4 million, or -25%, compared to the $258.1 million for 2019-2020. The net increase is explained by:

Total authorities used year-to-date for the quarter-ended June 30, 2020 increased to $28.7 million, compared to $27.2 million at June 30, 2019. The $1.5 million increase, or 6%, 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 2020-2021 and the authorities used at quarter end and then compares them to fiscal year 2019-2020.

2020-2021

  • $192,696 represents total available for use for the year ending March 31
  • $28,705 represents year-to-date authorities used for the quarter ending June 30

2019-2020

  • $258,049 represents total available for use for the year ending March 31
  • $27,167 represents year-to-date authorities used for the quarter ending June 30

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for fiscal year 2020-2021 changed to $303.3 million, an increase of $298.5 million when compared to the $4.8 million in 2019-2020. The increase is a result of additional transfer payments to deliver the Regional Relief and Recovery Fund to support businesses and network partners through the COVID-19 pandemic pursuant to the Public Health Events of National Concern Payments Act.

Total authorities used for the quarter-ended June 30, 2020 increased to $119.5 million, compared to 1.0 million at June 30, 2019. The $118.5 million increase is explained by payments to deliver the Regional Relief and Recovery Fund to support business and network partners through the COVID-19 pandemic.

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 2020-2021 and the authorities used at quarter end and then compares them to fiscal year 2019-2020.

2020-2021
  • $303,349 represents total available for use for the year ending March 31
  • $119,524 represents year-to-date authorities used for the quarter ending June 30

2019-2020

  • $4,806 represents total available for use for the year ending March 31
  • $1,024 represents year-to-date authorities used for the quarter ending June 30

Statement of the Departmental Budgetary Expenditures by Standard Object

Expenditures by standard object for the quarter ended June 30, 2020, were $158.0 million, which reflects an increase of $120.2 million, or 318%, from the $37.8 million at June 30, 2019. The variance is largely due to Regional Relief and Recovery Fund transfer payments, aiming to help western Canadian businesses cope with the financial hardship resulting from COVID-19. 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 June 30, 2020 (in thousands of dollars)
Actual Expenditures Quarter Ended June 30, 2020 (in thousands of dollars)

This pie chart breaks down actual expenditures for the quarter ended June 30, 2020.

  • $147,099 represents actual spending on Transfer Payments, which accounts for 93% of Actual Expenditures quarter ended June 30, 2020
  • $9,447 represents actual spending on Personnel, which accounts for 6% of Actual Expenditures quarter ended June 30, 2020
  • $1,463 represents actual spending on Other operating costs, which accounts for 1% of Actual Expenditures quarter ended June 30, 2020
Actual Expenditures Quarter Ended June 30, 2019 (in thousands of dollars)
Actual Expenditures Quarter Ended June 30, 2019 (in thousands of dollars)

This pie chart breaks down actual expenditures for quarter ended June 30, 2019.

  • $27,167 represents actual spending on Transfer Payments, which accounts for 72% of Actual Expenditures quarter ended June 30, 2019
  • $8,159 represents actual spending on Personnel, which accounts for 22% of Actual Expenditures quarter ended June 30, 2019
  • $2,475 represents actual spending on Other operating costs, which accounts for 6% of Actual Expenditures quarter ended June 30, 2019

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 conducts an annual risk assessment exercise as part of its overall risk management approach. Prior to the COVID 19 pandemic, WD did not identify any significant financial risks from their annual risk assessment.

In response to the COVID-19 pandemic, WD has identified increased enterprise-wide risks including risks to employee physical and mental health, cyber risk, and risks due to the speed of program delivery to get funding to Canadians economically affected by COVID-19 in a timely manner. WD employs risk-based mitigation to reduce risks such as business continuity planning, occupational health and safety planning and people management strategies; a robust system of network systems including encrypted signature, electronic security protocols and mobile equipment to employ remote connectivity; and risk assessments, governance processes, process mapping and segregation of duties when implementing programs.

Significant Changes in Relation to Operations, Personnel and Programs

The COVID-19 pandemic has had significant impacts on businesses, workers and communities across the country and therefore, the Government of Canada created the Regional Relief and Recovery Fund (RRRF) pursuant to the Public Health Events of National Concern Payments Act.

The Fund will help to:

This initiative is implemented by the six Regional Development Agencies, which are familiar with their regions' economic realities and are often the first point of contact for people at the local level.

The COVID-19 pandemic has required the department to utilize system capabilities allowing WD's workforce to resume operations remotely and establish on-going communication protocols using tools such as Microsoft Teams.

Approval by Senior Officials

Approved by:

Original signed by:

________________________
Dylan Jones
Deputy Minister

Edmonton, Canada
Date: August 14, 2020

Original signed by:

________________________
Cathy McLean
Chief Financial Officer


Statement of Authorities (unaudited)

Fiscal year 2020-2021 (in thousands of dollars)

Fiscal year 2020-2021 (in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2021* Used during the quarter ended June 30, 2020 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 35,262 $ 9,780 $ 9,780
Vote 5 - Grants and contributions 192,696 28,705 28,705
Budgetary statutory authorities:
  Employee benefit plans
4,894 1,129 1,129
Budgetary statutory authorities:
  Transfer payments
298,455 118,395 118,395
Total authorities $ 531,307 $ 158,009 $ 158,009

 

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 June 30, 2019 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $ 42,103 $ 9,610 $ 9,610
Vote 5 - Grants and contributions 258,049 27,167 27,167
Budgetary statutory authorities:
  Employee benefit plans
4,806 1,024 1,024
Total authorities $ 304,958 $ 37,801 $ 37,801

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

 

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2020-2021 (in thousands of dollars)

Fiscal Year 2020-2021 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2021* Expended during the quarter ended June 30, 2020 Year-to-date used at quarter-end
Personnel $ 29,233 $ 9,447 $ 9,447
Transportation and communications 2,483 14 14
Information 455 25 25
Professional and special services 5,338 1,216 1,216
Rentals 779 92 92
Repair and maintenance 810 0 0
Utilities, materials and supplies 242 4 4

Acquisition of machinery and equipment

816 2 2
Transfer payments 491,151 147,099 147,099
Other subsidies and payments 0 110 110
Total net budgetary expenditures $ 531,307 $ 158,009 $ 158,009

 

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 June 30, 2019 Year-to-date used at quarter-end
Personnel $ 34,207 $ 8,159 $ 8,159
Transportation and communications 2,630 276 276
Information 351 48 48
Professional and special services 6,761 1,884 1,884
Rentals 1,010 185 185
Repair and maintenance 822 0 0
Utilities, materials and supplies 160 23 23

Acquisition of machinery and equipment

968 12 12
Transfer payments 258,049 27,167 27,167
Other subsidies and payments 0 47 47
Total net budgetary expenditures $ 304,958 $ 37,801 $ 37,801

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

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