Quarterly Financial Report ending June 30, 2017

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 the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates.

Contributing to the jobs and growth in Canada, the Canadian Northern Economic Development Agency (CanNor) works to develop a diversified, sustainable and dynamic economy across Canada's three territories. It does this by delivering economic development programs, undertaking policy and research, and by collaborating with and aligning the efforts of other federal departments, territorial governments, Indigenous organizations, and industry. This is particularly the case in resource development through its Northern Projects Management Office (NPMO).

Further details on CanNor's authorities, mandate and program activities may be found in the Departmental Plans, and in the Main Estimates.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes CanNor's spending authorities granted by Parliament and those used by the Agency consistent with the Main Estimates for the 2017-2018 fiscal year. The authority of Parliament is required before moneys 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.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. For 2017-2018, the Main Estimates were tabled on February 23, 2017.

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.

As part of the departmental performance reporting process, CanNor prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. 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

As at June 30, 2017, total authorities available for fiscal year 2017-2018 amounted to $50.1M, a $5.3M decrease from the same quarter last year.

The decrease in authorities is a result of the sunsetting  in 2016-17 of both the Northern Adult Basic Education program for $3.9M and the Centre for Northern Innovation in Mining for $1.1M. The remaining decrease is a result of administrative adjustments.

Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total expenditures for the quarter ending June 30, 2017 increased by $1.6M ($3.5M to $5.1M).

Personnel costs in the first quarter of 2017-2018 increased by $170K compared to previous year values. This reflects the Agency's increasing effort to fill vacant positions as quickly as possible.

Other operating costs increased by $292K over the previous year. The change reflects an increase in public service travel, professional services costs related to program evaluation and acquisition of office furniture following the relocation of the NCR office.

Transfer payment expenditures increased by $1.1M in the first quarter compared to the previous year, reflecting increased efforts to advance the pace of project reviews and disbursements.

Risks and Uncertainties

Business development in the North needs to deal with the complexities related to remote communities, sparse population, dependence on natural resource extraction and associated challenges, such as underdeveloped infrastructure and labour market gaps.

Program delivery in the North therefore requires a strong focus on risk management and mitigation.

The Canadian Northern Economic Development Agency's Corporate Risk Profile and risk assessment is published in its 2017-18 Departmental Plan. The risk profile identifies the following key risk areas:

Approved by:

________________________
Dr. Janet King
President
___________________________
Ross Miller CPA, CMA
Chief Financial Officer

Statement of Authorities (unaudited)

  Fiscal year 2017-2018 Fiscal year 2016-2017
(In thousands of dollars) Total available for use for the year ending
March 31, 2018*
Used during the quarter ended
June 30, 2017
Year-to date used at quarter-end Total available for use for the year ending
March 31, 2017*
Used during the quarter ended
June 30, 2016
Year-to date used at quarter-end
Vote 1 - Net Operating 13,200 2,981 2,981 13,543 2,630 2,630
Vote 5 - Transfer payments 35,500 1,731 1,731 40,187 653 653
Budgetary statutory authorities 1,381 345 345 1,638 234 234
Total Budgetary authorities 50,081 5,057 5,057 55,368 3,517 3,517
Non-budgetary authorities 0 0 0 0 0 0
Total authorities 50,081 5,057 5,057 55,368 3,517 3,517
* Includes only Authorities available for use and granted by Parliament at quarter-end.

Departmental budgetary expenditures by Standard Object (unaudited)

  Fiscal year 2017-2018 Fiscal year 2016-2017
(In thousands of dollars) Planned expenditures for the year ending March 31, 2018 Used during the quarter ended June 30, 2017 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2017 Used during the quarter ended June 30, 2016 Year-to-date used at quarter-end
Expenditures:
Personnel 10,182 2,761 2,761 10,589 2,591 2,591
Transportation and communications 600 136 136 890 76 76
Information 80 2 2 44 0 0
Professional and special services 2,600 252 252 2,432 190 190
Rentals 1,000 5 5 896 3 3
Repair and maintenance 40 36 36 255 0 0
Utilities, materials and supplies 60 4 4 61 4 4
Acquisition of land, buildings and works 0 0 0 14 0 0
Acquisition of machinery and equipment 10 129 129 0 0 0
Transfer payments 35,500 1,731 1,731 40,187 653 653
Public Debt charges 0 0 0 0 0 0
Other subsidies and payments 9 1 1 0 0 0
Total budgetary expenditures 50,081 5,057 5,057 55,368 3,517 3,517

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