Quarterly Financial Report for the quarter ended June 30, 2017

1. Introduction

This quarterly 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 Treasury Board. This quarterly report should be read in conjunction with the 2017–18 Main Estimates Part II (PDF, 1.5 MB) the 2017-18 Supplementary Estimates (A) (PDF, 734 KB) and the 2016–17 Quarterly Financial Report for the quarter ended June 30, 2016.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2017-18 Departmental Plan.

2. 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 2017–18 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

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.

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

In 2017-18, IRCC’s total authorities includes the Main Estimates, items sought through the Supplementary Estimates (A) and minor adjustments related to statutory items.

Significant Changes to Authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2017–18 decreased by approximately $45 million (3%) when compared to the same quarter in 2016–17. This decrease is comprised of:

  • a decrease of $45 million (7%) in Vote 1 – Operating Expenditures
  • an increase of $10 million (53%) in Vote 5 – Capital Expenditures
  • a decrease of $40 million (3%) in Vote 10 – Grants and Contributions
  • an increase of $30 million (27%) in Statutory Authorities.

The most significant changes to the authorities above relate to the reduction of funding levels received for the Government of Canada’s response to the Syrian refugee crisis. The vast majority of this work was completed last year. The sunset of funding for the Labour Market Impact and the International Mobility Initiative under the Temporary Foreign Workers’ Program also contributed to the decrease in authorities.

These reductions were partly offset by funding sought through 2017-18 Supplementary Estimates (A) in order to support higher admission levels for permanent residents as per the 2017 Annual Immigration Levels Plan.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures decrease of $45 million (7%) is explained as follows:

  • Increase of $94 million attributable to:
    • Additional Funding for ($86 million):
      • Higher admission levels for permanent residents as per the 2017 Annual Immigration Levels Plan ($75 million);
      • The continuation of Biometric Expansion screening in Canada’s immigration system ($5 million);
      • The removal of visa requirements for citizens of Mexico ($4 million);
      • The Electronic Travel Authorization expansion to lift visa requirements for certain low-risk travelers from key visa-required markets ($1 million); and
      • Other minor adjustments ($1 million).
    • Transfer increasing IRCC`s Vote 1 – Operating Expenditures ($8 million):
      • Impact of the one-time internal fund transfer in 2016-17 from Operating Expenditures to Capital Expenditures is not recurring ($6 million);
      • Transfer from the Canada Border Services Agency (CBSA) to realign roles and responsibilities between IRCC and CBSA in missions abroad ($1 million); and
      • A one-time transfer made in 2016-17 to Innovation, Science and Economic Development Canada (ISEDC) – Computers for Schools ($1 million) for the Syria initiative which is not recurring.
  • Decrease of $139 million attributable to:
    • Decrease in Funding for ($130 million):
      • The reduction of funding received for the Processing and Settlement of an additional 10,000 Government Assisted Syrian Refugees (GAR) ($38 million)
      • The reduction of funding for the Government’s response to the Syrian Refugee crisis. Funding has decreased as the target of 25,000 refugees was achieved in February 2016 ($23 million);
      • The sun-setting of funding for the Labour Market Impact Assessment (LMIA) and the International Mobility Program (IMP) under the Temporary Foreign Workers’ Program ($28 million);
      • Higher admission levels for permanent residents as per the 2016 Annual Immigration Levels Plan via the 2016-17 Supplementary Estimates (A) ($21 million);
      • The Electronic Travel Authorization Program as the development and implementation of the initiative reached completion in 2016-17 ($9 million);
      • The Ministerial Reviews and Intervention Pilot Program (IIP) received through the 2016-17 Supplementary Estimates (A) ($5 million) which was a temporary in nature;
      • The budget reduction for professional services, travel and advertising ($4 million) as announced in Budget 2016;
      • The reduction of funding for Entry-Exit initiative ($1 million) and
      • The completion of Info-Sharing initiative ($1 million).
    • Transfers decreasing IRCC`s Vote 1 – Operating Expenditures ($9 million):
      • Transferred to Canadian Heritage to reflect the transfer of the Multiculturalism Program ($5 million);
      • Internal transfer for Employee Benefit Plans ($2 million);
      • Transfer to Global Affairs Canada and Shared Services Canada for workload distribution across the overseas network ($2 million).

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures net increase of $10 million (53%) is explained as follows:

  • Increase of $16 million attributable to:
    • Additional Funding ($16 million) for:
      • The continuation of Biometric Expansion screening in Canada’s immigration system ($10 million);
      • Higher admission levels for permanent residents as per the 2017 Annual Immigration Levels Plan via the 2017-18 Supplementary Estimates A ($4 million); and
      • Impact resulting from reprofiling of funds to 2017-18 for the Entry Exit Project ($2 million).
  • Decrease of $6 million attributable to:
    • Transfer decreasing IRCC`s Vote 5 – Capital ($6 million):
      • Impact of amounts transferred internally in 2016-17 from Operating Expenditures to Capital Expenditures that was not required in 2017-18 ($6 million).

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions net decrease of $40 million (3%) is explained as follows:

  • Increase of $94 million attributable to:
    • Additional Funding ($94 million) for:
      • Higher admission levels for permanent residents as per the 2017 Annual Immigration Levels Plan via the 2017-18 Supplementary Estimates (A) ($61 million); and
      • The grant related to the Canada-Quebec Accord on immigration ($33 million).
  • Decrease of $134 million attributable to:
    • Decreased Funding ($ 134 million) for:
      • The reduction of funding received for the settlement of an additional 10,000 Government Assisted Syrian Refugees (GAR) ($68 million); and
      • The reduction of funding for the Government’s response to the Syrian Refugee crisis. Funding has decreased as the target of 25,000 refugees was achieved in February 2016 ($66 million).

      As processing and resettlement activities are completed, the Department will now focus on Settlement Services to Syrian Refugees which explains the year-over-year reduction in funding.

Budgetary Statutory Authorities

The 2017–18 statutory authority level in the first quarter is higher than 2016–17 by $30 million (27%) and is primarily explained as follows:

  • Increase of $33 million attributable to:
    • Passport program: Increase largely related to an anticipated net decrease in its in-year surplus as a result of volume reductions ($33 million).
  • Decrease of $3 million attributable to:
    • Adjustments to Employee Benefit Plans ($3 million)

Significant Changes to Departmental Budgetary Expenditures by Standard Object

Quarter over quarter analysis

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, the total gross budgetary expenditures have increased by $62 million (12%) from $538 million in 2016-17 to $600 million in 2017-18. This increase is mainly related to Transfer Payments ($52 million). In addition, through the Passport Program and International Experience Canada, IRCC generated $162 million and $2 million respectively in re-spendable revenues in the first quarter of 2017-18, which is consistent with previous year. Accordingly, this represents a net budgetary expenditure of $435 million as of June 30, 2017 compared to $370 million as of June 30, 2016.

With the exception of Professional and Special Services, and Transfer Payments, the remaining operating expenditures have not encountered significant quarter over quarter variances.

Variance in Professional and Specials Services results in an increase of $6 million (8%) compared to the same quarter in the previous year and is mainly explained by an increase in Interim Federal Health (IFH) program spending and in passport delivery costs performed by Employment and Social Development Canada (ESDC).

Transfer Payments increased by $52 million (17%) compared to the same quarter in the previous year and is mostly due to early payments made to service provider organizations for Refugee Programs and earlier advances for expenditures in future quarters.

4. Risks and Uncertainties

IRCC operates in a constantly changing environment. Its strategic directions as well as its policies and operations are influenced by external factors such as emerging events, the Canadian and global economic, social or political contexts and shifting migration trends. At the same time, IRCC continuously works to improve its own internal processes and systems through change initiatives such as the Modernization and experimentation agenda to improve client service.

Unforeseen Events and Natural Disasters

Unforeseen events such as the impact of the civil war in Syria and the response of the Canadian government to the crisis as well as natural disasters may have significant effects on IRCC’s operations. They can affect IRCC directly when they occur in places where our offices and employees are located.

Additionally, IRCC can also be indirectly affected when the Department is required, for humanitarian or legal reasons, to facilitate travel of foreign nationals or Canadian citizens by processing applications for visas or other necessary documents on an urgent basis.

In conjunction with its national and international partners, IRCC continues to identify, assess, monitor, and proactively implement measures to mitigate risks and minimize the impact they may have on our operations, commitments, service standards and processing targets.

Litigation and Legal

Over the last few years, there has been a significant increase in the numbers of complex and high-profile litigation. Sound management practices are in place to manage all of these challenges and ensure timely delivery of IRCC's programs and client services.

5. Significant Changes in Relation to Operations, Personnel and Programs

There have been no significant changes in relation to operations, personnel and programs during the quarter ended June 30, 2017.

Under the Policy on Results, the IRCC Departmental Results Framework was approved by Treasury Board on June 5, 2017. This framework replaces the Program Activity Architecture and will be in effect as of April 1, 2018.

Approval by Senior Officials

Approved by:

Marta Morgan
Deputy Minister

Daniel Mills, CPA, CMA
Assistant Deputy Minister
Chief Financial Officer

Ottawa, Canada
August 24, 2017

Statement of Authorities (in thousands of dollars)

Fiscal Year 2017-18 Fiscal Year 2016-17
Total available for use for the year ending Footnote 1 Used during the quarter ended Year-to-date used at quarter-end Total available for use for the year ending Footnote 1 Used during the quarter ended Year-to-date used at quarter-end
Vote 1 - Operating Expenditures 620,431 128,505 128,505 664,963 122,615 122,615
Vote 5 - Capital Expenditures 27,876 1,736 1,736 18,181 1,544 1,544
Vote 10 - Grants and Contributions 1,231,051 357,024 357,024 1,270,833 304,761 304,761
Budgetary Statutory Authorities
Contributions to Employee Benefit Plans 65,780 14,673 14,673 69,192 16,194 16,194
Minister's Salary and Motor Car Allowance 84 - - 84 7 7
FSW Fees Returned (Terminated Applications) 187 187 187 588 588 588
IIP and EN Fees Returned (Terminated Applications) 149 149 149 112 112 112
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 18 - - 30 - -
Court Awards - - - 13 13 13
Refunds of Previous Years Revenue 3,706 3,706 3,706 2,666 2,666 2,666
Passport Program Revolving Fund (151,038) (70,697) (70,697) (184,208) (77,895) (77,895)
Total Budgetary Authorities 1,798,244 435,283 435,283 1,842,454 370,605 370,605
Non-Budgetary AuthoritiesFootnote 2 64,096 (2,545)Footnote 3 (2,545) 64,975 (1,284) (1,284)
Total Authorities 1,862,340 432,738 432,738 1,907,429 369,321 369,321

Departmental Budgetary Expenditures by Standard Object (in thousands of dollars)

Fiscal Year 2017-18 Fiscal Year 2016-17
Planned expenditures for the year ending Expended during the quarter ended Year-to-date used at quarter-end Planned expenditures for the year ending Expended during the quarter ended Year-to-date used at quarter-end
Expenditures
Personnel 574,348 133,612 133,612 528,358 129,223 129,223
Transportation and Communications 57,675 12,257 12,257 74,935 10,762 10,762
Information 4,500 800 800 7,989 1,237 1,237
Professional and Special Services 445,976 72,268 72,268 499,111 66,745 66,745
Rentals 12,647 9,782 9,782 17,897 10,263 10,263
Repair and Maintenance 6,794 125 125 6,669 274 274
Utilities, Materials and Supplies 51,872 8,670 8,670 71,039 8,567 8,567
Acquisition of Machinery and Equipment 28,602 222 222 38,400 615 615
Transfer Payments 1,231,051 357,024 357,024 1,270,833 304,761 304,761
Other Subsidies and Payments 4,042 5,240 5,240 3,379 5,584 5,584
Total Gross Budgetary Expenditures 2,417,509 600,001 600,001 2,518,610 538,031 538,031
Less Revenues Netted against Expenditures
Passport Program 609,327 162,460 162,460 666,218 163,119 163,119
International Experience Canada 9,938 2,257 2,257 9,938 4,307 4,307
Total Net Budgetary Expenditures 1,798,244 435,283 435,283 1,842,454 370,605 370,605
Date Modified: