Statement outlining results, risks and significant changes in operations, personnel and programs
For the quarter ended June 30, 2014 (Revised)

Erratum


Date: September 18, 2014
Location: Departmental budgetary expenditures by Standard Object (unaudited) – Table 2, Planned expenditures for the year ending March 31, 2015, under the Standard Object – Information.
Revision: “Planned expenditures for the year ending March 31, 2015, under the Standard Object - Information $3,992 thousands” replaces “Planned expenditures for the year ending March 31, 2015, under the Standard Object - Information $3,922 thousands”.
Rationale for the revision: Transcription error occurred during the HTLM conversion process.


Introduction

This first 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 the Treasury Board (TB). This quarterly report should be read in conjunction with the Main Estimates.

A summary description of the Environment Canada Raison d’être and program activities can be found in Part II of the Main Estimates.

This quarterly report has not been subject to an external audit or review.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting (modified cash accounting). The accompanying Statement of Authorities includes Environment Canada’s spending authorities granted by Parliament and those used by the Department, consistent with the Main Estimates for the 2014-2015 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 performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

Statement of Authorities (Table 1)

This quarterly report, ending June 30, 2014, reflects the authorities that were approved for this period. The funding available for use includes the 2014-2015 Main Estimates only and will follow through with Supplementary Estimates ¨B¨ and ¨C¨ later this year. Environment Canada’s authorities “Total available for use for the year ending March 31, 2015” is lower by approximately $18.4M ($941.0M - $959.4M)Footnote1 when compared to the same quarter of the previous year. This difference is explained by decreases in Vote 1 - Operating of $14.1M ($687.2M - $701.3M)Footnote1 and in Vote 10 – Grants and Contributions of $10.1M ($107.3M - $117.4M)Footnote1, offset by increases in Budgetary statutory authorities for the Employee Benefit Plan, Minister’s Car Allowance and the Nature Conservancy of Canada of $4.9M ($93.7M - $88.8M)Footnote1 and in Vote 5 – Capital of $0.9M ($52.8M - $51.9M)Footnote1.

The $14.1M net decrease compared to last fiscal year in the Operating authorities is due to the following:

  • $18.4M decrease for savings measures identified as part of Budget 2012;
  • $12.6M decrease due to additional transfers to Shared Services Canada as a result of its creation;
  • $6.4M decrease under the Clean Air Regulatory Agenda;
  • $2.6M decrease related to the assessment, management and remediation of federal contaminated sites;
  • $2.5M decrease related to the Departmental Financial Management System Implementation;
  • $2.2M decrease under the Meteorological Service of Canada to improve Canada’s weather services by ensuring the integrity of Government of Canada’s weather and environmental monitoring;
  • $1.6M decrease for reduced departmental travel identified as part of Budget 2013;
  • $1.5M decrease due to accounting treatment for Migratory Birds Hunting Permit as vote-netted revenues instead of “Third Party advance”;
  • $0.8M decrease under the Genomics Research and Development initiative;
  • $0.7M net decrease from various other smaller adjustments;

offset by:

  • $22.6M increase for the Randle Reef Contaminated Sediment Remediation Project in Hamilton Harbour and the renewal of the Lake Simcoe program as well as year over year changes in funding for the Freshwater initiative;
  • $6.9M increase for the strategy to implement a world class prevention, preparedness and response regime for oil spills; and,
  • $5.7M increase for collective agreements or approved wage increases.

The $0.9M net increase compared to last fiscal year in the Capital authorities is due to the following:

  • $1.6M increase to improve Canada’s weather services by ensuring the integrity of Government of Canada’s weather and environmental monitoring;
  • $0.9M increase for the strategy to implement a world class prevention, preparedness and response regime for oil spills;

offset by:

  • $1.5M decrease for savings measures identified as part of Budget 2012; and,
  • $0.1M net decrease from various other smaller adjustments.

The $10.1M net decrease compared to last fiscal year in the Grants and Contributions authorities is due to the following:

  • $25.0M decrease to the Sustainable Development Technology Canada (SDTC) for the Next Generation Biofuels Fund;
  • $1.7M decrease for savings measures identified as part of Budget 2012;

offset by:

  • $12.5M increase to the SDTC – Sustainable Development Technology Fund;
  • $4.0M increase for the renewal of the Lake Simcoe program as well as year over year changes in funding for the Freshwater initiative; and,
  • $0.1M net increase from various other smaller adjustments.

The $4.9M net increase compared to last fiscal year in the Budgetary statutory authorities is mainly due to the following:

  • $8.8M increase under the Nature Conservancy of Canada;
  • $0.8M net increase from various other smaller adjustments;

  offset by:

  • $4.7M decrease under the Employee Benefit Plan due to a lower rate stipulated by the Treasury Board Secretariat.

Expenditure Analysis

In the first quarter of 2014-2015, total net budgetary expenditures was $219.6M compared to $181.9M reported for the same period in 2013-2014, resulting in an increase of $37.7M (20.7%).

Vote 1 – Operating authorities used during the first quarter of 2014-2015 totaled $174.6M, which represents an increase of $25.8M (17.4%) compared to the same quarter in 2013-2014. The increase is mainly due to a one-time transition payment for implementing salary payment in arrears by the Government of Canada.  

Vote 5 – Capital authorities used during the first quarter of 2014-2015 totaled $2.6M, which represents a decrease of $0.4M (12.7%) compared to the same quarter in 2013-2014.

Vote 10 – Grants and Contributions authorities used during the first quarter of 2014-2015 totaled $12.4M, which represents an increase of $4.8M (62.2%) compared to the same quarter in 2013-2014. This is mainly due to the payment related to the United Nations Environment Program (UNEP) for the Canada’s annual core contribution that was issued earlier this year.

Statutory authorities used during the first quarter of 2014-2015 totaled $30.0M, which represents an increase of $7.4M (32.9%) compared to the same quarter in 2013-2014. This is mainly due to a payment of $8.8M to the Nature Conservancy of Canada that was issued earlier this year.

Statement of Departmental Expenditures by Standard Object (Table 2)  

Total net expenditures for the first quarter, ending June 30, 2014, was $219.6M and is higher by $37.7M (20.7%) in comparison to the same quarter in the previous year.

Personnel expenditures have increased by $5.7M (3.6%) in the first quarter and is mainly explained by higher rates of pay as a result of collective agreements renewed and signed last fiscal year.

Transportation and Communications expenditures have decreased by $1.8M (30.2%) compared to the same quarter last year.  This is mainly attributable to the reduction of travel expenses linked to recent budget reductions.

Rentals expenditures have decreased by $8.3M (81.5%) in the first quarter. This is mainly due to a lease payment for the Pacific Environmental Center that will occur later compared to last fiscal year.

Transfer Payments expenditures have increased by $13.6M (176.9%) in the first quarter. This is mainly due to the contribution payment to the United Nations Environment Program (UNEP) for the Canada’s annual core contribution and the grant payment of $8.8M to the Nature Conservancy of Canada, which were issued earlier this year.

Other subsidies and payments have increased by $19.6M compared to the same quarter last year. This is due to a one-time transition payment for implementing salary payment in arrears by the Government of Canada.

Revenues have decreased by $13.0M (52.8%) compared to the first quarter last year which is mainly attributable to the timing of the collection for various programs.

Risks and Uncertainties

Environment Canada is primarily funded through voted parliamentary spending authorities for operating expenditures, capital expenditures and transfer payments as well as statutory authorities. The Department is also partially funded through vote-netted revenue. Environment Canada's planned spending reflects approved funding by Treasury Board to support the departmental Strategic Outcomes and Programs. In 2014-2015, Environment Canada will continue to contribute to the Government of Canada's plan to return to fiscal balance.

Environment Canada’s objectives and strategic outcomes are influenced by various internal and external factors. Extensive consultations in 2013-14, engaging the risk governance structure, resulted in the development of Environment Canada’s 2014-17 Corporate Risk Profile which is broadly communicated to all employees. The following corporate risks were identified: Delivering Environment Canada Services, Working with Partners/Stakeholders, Workforce Readiness, Managing Information and Regulatory/Legislation.

Environment Canada’s proactively manages risks through ongoing monitoring, with adjustments made to departmental strategies, resources or program objectives to ensure appropriate controls and mitigation measures are applied as required. Environment Canada’s Blueprint 2020 engagement strategies have also been considered in the development of the following key mitigating activities and management actions:

  • Maintaining channels, protocols and agreements to ensure that risks of not being able to deliver Environment Canada services are managed. The viability and readiness of the Business Continuity Plan is tested and training on emergency response is provided.
  • Building and strengthening relations with stakeholders and partners through collaborative planning networks/processes to facilitate better sharing of information, understanding of strategic priorities and potential changes, clarity of roles and responsibilities and more timely mitigating actions as required.
  • Building a capable workforce through training and the promotion of a culture of performance management. Environment Canada will also examine other science-based department strategies to inform Environment Canada’s resourcing model for scientists.
  • Continuing to advance the implementation of protocols and procedures, ongoing communication and provision of relevant training on information management, security, file management, privacy, quality assurance and compliance testing.
  • Maintaining or strengthening relationships with partners and stakeholders, domestically and internationally to share and understand regulatory/legislative expectations.

Risk management continues to be a key activity for the Department. Environment Canada will continue to integrate risk information into priority setting, business and resource planning, performance management and decision making. Risk management practices will continue to be strengthened through capacity building initiatives to foster a culture of responsible and informed risk-taking from senior management to the lowest level.

Significant changes in relation to operations, personnel and programs

On June 20, 2014, the Right Honourable Stephen Harper, Prime Minister of Canada, appointed Michael Martin as the Deputy Minister of the Environment, effective July 2, 2014. 

Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.

Environment Canada will achieve Budget 2012 savings of $53.8 million in fiscal year 2014-15 by streamlining departmental operations through better management and by working with partners as well as by eliminating or reducing programs that do not contribute directly to the Department's core mandate.

Examples of Environment Canada administrative efficiencies to achieve these savings include:

  • Domestic travel between major cities has been reduced and replaced, when possible, using communications technology such as videoconferencing, telepresence and webinars;
  • The overall size of Environment Canada’s vehicle fleet has been reduced with better management of vehicles through their whole life-cycle; and
  • The use of professional services has been reduced.

Examples of reductions to non-core activities in 2014-15 include:

  • Reducing involvement in promoting and compiling information about water use as provincial and municipal governments are responsible for water treatment and use; and,
  • Similarly, duplication in the area of wastewater research will be eliminated where other levels of government and the academic sector have demonstrated capacity.

In the first year of implementation, the Department achieved savings of $13.3 million. Savings of $31.5 million were achieved in 2013-14, and $53.8 million for 2014-15 and ongoing.

There was no incremental funding provided to Environment Canada to complete the work related to the implementation of its Budget 2012 savings measures.

There are no significant financial risks or uncertainties related to the implementation of Environment Canada’s Budget 2012 savings measures. The Department has developed detailed roll-out plans for each of its savings measures and progress against these plans is monitored by departmental senior management on a quarterly basis.

Footnotes

Footnote 1

See Statement of Authorities.

Return to Footnote1


Approved by:

(the original version was signed by)
August 8, 2014


Michael Martin, Deputy Minister
Gatineau, Canada
Date

 

(the original version was signed by)
August 5, 2014


Carol Najm, Chief Financial Officer
Gatineau, Canada
Date

 

Environment Canada
For the quarter ended June 30, 2014
Statement of Authorities (unaudited)
- Table 1
 Fiscal year 2014-20145Fiscal year 2013-2014
(In thousands of dollars)
Total available for use for the year ending March 31, 2015Footnote2a
Used during the quarter ended June 30, 2014
Year to date used at quarter end
Total available for use for the year ending March 31, 2014
Used during the quarter ended
June 30, 2013
Year to date used at quarter end
Vote 1 - Net Operating expenditures
687,165
174,593
174,593
701,255
148,762
148,762
Vote 5 - Capital expenditures
52,789
2,563
2,563
51,922
2,936
2,936
Vote 10 - Grants and contributions
107,286
12,434
12,434
117,353
7,667
7,667
Statutory - Employee Benefits Plan
84,848
21,212
21,212
88,750
22,187
22,187
Statutory - Minister’s Car Allowance
80
20
20
79
20
20
Statutory - Refund of previous years revenue
0
0
0
0
379
379
Statutory - Spending of proceeds from the disposal of surplus Crown assets
0
0
0
0
0
0
Statutory - Nature Conservancy of Canada
8,792
8,792
8,792
0
0
0
Total Budgetary authorities
940,960
219,614
219,614
959,359
181,951
181,951
Non-budgetary authorities
-
-
-
-
-
-
Total authorities
940,960
219,614
219,614
959,359
181,951
181,951
Environment Canada
For the quarter ended June 30, 2014
Departmental budgetary expenditures by Standard Object (unaudited)
- Table 2
 Fiscal year 2014-2015Fiscal year 2013-2014
(In thousands of dollars)
Planned expenditures for the year ending March 31, 2015Footnote2b

Expended during the quarter ended June 30, 2014

Year to date used at quarter end
Planned expenditures for the year ending March 31, 2014
Expended during the quarter ended June 30, 2013
Year to date used at quarter end
Expenditures:
 
Personnel
599,150
163,170
163,170
598,885
157,477
157,477
Transportation and communications
37,577
4,173
4,173
44,183
5,976
5,976
Information
209
209
2,588
208
208
Professional and special services
126,095
12,123
12,123
119,353
12,082
12,082
Rentals
24,957
1,881
1,881
20,967
10,151
10,151
Repair and maintenance
19,920
1,210
1,210
21,666
3,033
3,033
Utilities, materials and supplies
39,287
6,150
6,150
33,076
6,564
6,564
Acquisition of land, buildings and works
1,650
1
1
1,904
23
23
Acquisition of machinery and equipment
52,193
1,182
1,182
60,975
3,041
3,041
Transfer payments
116,079
21,226
21,226
117,354
7,667
7,667
Other subsidies and payments
8,656
19,907
19,907
3,957
325
325
Total gross budgetary expenditures
1,029,556
231,232
231,232
1,024,908
206,547
206,547
Less Revenues netted against expenditures: 
Revenues
88,596
11,618
11,618
65,549
24,596
24,596
Total revenues netted against expenditures
88,596
11,618
11,618
65,549
24,596
24,596
Total net budgetary expenditures
940,960
219,614
219,614
959,359
181,951
181,951

Footnotes

Footnote 2a

* The Total funding available for use includes the 2014-2015 Main Estimates only and will follow through with Supplementary Estimates ¨B¨ and ¨C¨ later this year.

Return to Footnote 2a

Footnotes

Footnote 2b

*The Planned expenditures includes the 2014-2015 Main Estimates only and will follow through with Supplementary Estimates ¨B¨ and ¨C¨ later this year.

Return to Footnote 2b

Footnotes

Footnote 2c

*The Planned expenditures for the year ending March 31, 2015, under the Standard Object - Information has been updated to reflect the correct amount of $3,992 thousands.

Return to Footnote 2c

Date modified: