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Western Economic Diversification Canada’s Quarterly Financial Report for the quarter ended June 30, 2021

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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 2021-2022 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, 2021.

Statement of Authorities: Vote 1 – Net Operating Expenditures

Total authorities available for use for fiscal year 2021-2022 are $47.8 million, a net increase of $12.5 million, or 35%, compared to the $35.3 million for 2020-2021. The net increase is explained by:

Total authorities used has increased to $11.8 million for the quarter ended June 30, 2021, compared to $9.8 million at June 30, 2020. The increase of $2.0 million, or 20%, is explained mainly by salary increases to deliver recovery initiatives under the Regional Relief and Recovery Fund, to provide staffing for new transfer payment programming and for restructuring WD to the Pacific and Prairies Economic Development Agencies as announced in Budget 2021.

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 2021-2022 and the authorities used at quarter end and then compares them to fiscal year 2020-2021.

2021-2022

  • $47,771 represents total available for use for the year ending March 31
  • $11,779 represents year-to-date authorities used for the quarter ending June 30

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

 

Statement of Authorities: Vote 5 – Grants and Contributions

Total authorities available for use for fiscal year 2021-2022 are $519.7 million, a net increase of $327.0 million, or 170%, compared to the $192.7 million for 2020-2021. The net increase is explained by:

Total authorities used for the quarter-ended June 30, 2021 increased to $132.4 million, compared to $28.7 million at June 30, 2020. The $103.7 million increase, or 361%, 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 2021-2022 and the authorities used at quarter end and then compares them to fiscal year 2020-2021.

2021-2022

  • $519,724 represents total available for use for the year ending March 31
  • $132,412 represents year-to-date authorities used for the quarter ending June 30

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

Statement of Authorities: Budgetary Statutory Authorities

Budgetary statutory authorities available for use for fiscal year 2021-2022 changed to $5.3 million, a decrease of $298.0 million when compared to the $303.3 million in 2020-2021. The decrease is a result of statutory authorities pursuant to the Public Health Events of National Concern Payments Act received in early 2020-2021 to support businesses and network partners through the COVID-19 pandemic that the department received as Vote 1 and 5 amounts in 2021-2022.

Total authorities used for the quarter-ended June 30, 2021 decreased to $1.2 million, compared to $119.5 million at June 30, 2020. The $118.3 million decrease is explained by transfer payments delivery for payments made under the Public Health Events of National Concern Payments Act in 2020-2021 moved to Vote 5 in 2021-2022.

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 2021-2022 and the authorities used at quarter end and then compares them to fiscal year 2020-2021.

2021-2022
  • $5,333 represents total available for use for the year ending March 31
  • $1,174 represents total used for the quarter ending June 30

2020-2021

  • $303,349 represents total available for use for the year ending March 31
  • $119,524 represents total 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, 2021, were $145.4 million, a decrease of $12.6 million, or 8%, from the $158.0 million at June 30, 2020.

The variance is largely due to:

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, 2021 (in thousands of dollars)
Actual Expenditures Quarter Ended June 30, 2021 (in thousands of dollars)

This pie chart breaks down actual expenditures for the quarter ended June 30, 2021.

  • $132,412 represents actual spending on Transfer Payments, which accounts for 91% of Actual Expenditures quarter ended June 30, 2021
  • $11,069 represents actual spending on Personnel, which accounts for 8% of Actual Expenditures quarter ended June 30, 2021
  • $1,884 represents actual spending on Other operating costs, which accounts for 1% of Actual Expenditures quarter ended June 30, 2021
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 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

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

Budget 2021 will establish a new agency for British Columbia to play an enhanced role as convener, pathfinder, partner, investor, and advisor to support economic development in more communities and help develop businesses to create good jobs that people can rely on. Growing WD into two new separate agencies focused on British Columbia and the Prairies is recognition that economic drivers and conditions are different in each of the two regions, and entrepreneurs, innovators, institutions, and communities have unique needs linked to where they are located.

Funding a new BC-focused agency through $553.1 million over five years, starting in 2021-22, and with $110.6 million ongoing, while existing core program funding from WD will remain to support a new Prairie agency:

On August 6, 2021, the Government of Canada launched Pacific Economic Development Canada (PacifiCan) as the new federal regional economic development agency for British Columbia, and Prairies Economic Development Canada (PrairiesCan) as the new regional economic development agency for businesses and communities in Alberta, Saskatchewan and Manitoba. They will replace WD, which has been serving western Canadians since August 4, 1987.

Sundeep Cheema joined WD as CFO and Executive Director, Finance & Corporate Management, effective May 10, 2021.

Approval by Senior Officials

Approved by:

Original signed by:

________________________
Dylan Jones
Deputy Minister

Edmonton, Canada
Date: August 12, 2021

Original signed by:

________________________
Sundeep Cheema
Chief Financial Officer


Statement of Authorities (unaudited)

Fiscal year 2021-2022 (in thousands of dollars)

Fiscal year 2021-2022 (in thousands of dollars)
Authorities Total available for use for the year ending March 31, 2022* Used during the quarter ended June 30, 2021 Year-to-date used at quarter-end
Vote 1 - Net operating expenditures $47,771 $11,779 $11,779
Vote 5 - Grants and contributions 519,724 132,412 132,412
Budgetary statutory authorities:
  Employee benefit plans
5,333 1,171 1,171
Budgetary statutory authorities:
  Collection agency fees
n/a 3 3
Total authorities $ 528,828 $ 145,365 $ 145,365

 

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

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

 

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal Year 2021-2022 (in thousands of dollars)

Fiscal Year 2021-2022 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2022* Expended during the quarter ended June 30, 2021 Year-to-date used at quarter-end
Personnel $39,386 $11,069 $11,069
Transportation and communications 933 4 4
Information 884 45 45
Professional and special services 7,781 1,413 1,413
Rentals 1,201 194 194
Repair and maintenance 862 0 0
Utilities, materials and supplies 477 8 8
Acquisition of machinery and equipment 1,580 9 9
Transfer payments 519,724 132,412 132,412
Other subsidies and payments 0 211 211
Total net budgetary expenditures $572,828 $145,365 $145,365

 

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

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

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