Quarterly Financial Report for the quarter ended June 30, 2019

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.

The Canadian Northern Economic Development Agency (CanNor) works with partners to advance economic development in Canada's territories. The Agency supports, invests in and advocates for national, territorial and community level economic development; fosters growth and innovation; contributes to building capacity; and invests in foundational economic development projects in the territories. In addition, through the Northern Projects Management Office the Agency coordinates federal participation in the territorial environmental review processes and maintains the Crown consultation record for major projects.

Further details on CanNor's authorities, mandate and program activities may be found in the Departmental Plan and 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 2019-2020 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.

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

Total authorities available for use for fiscal year 2019-2020 amounted to $64.8 million, a $35.0 million increase compared to 2018-2019. This variance is primarily attributable to the timing of economic development program funding renewal ($19.8 million), and additional funding of $14.7 million announced in Budget 2019.

Statement of Departmental Budgetary Expenditures by Standard Object

Total expenditures by standard object for the quarter ended June 30, 2019, amounted to $7.8 million, an increase of $4.0 million over the $3.8 million reported for the quarter ended June 30, 2018. This variance is primarily attributable to an increase of $3.4 million in transfer payments.

Other subsidies and payments, and rentals increased by $306 thousand and $125 thousand respectively. The increases represent timing differences of when expenditures were incurred, compared to the quarter ended June 30, 2018.

Risks and Uncertainties

While the North presents opportunities for economic development, growth and innovation, factors including its vast and remote geography, lack of infrastructure, connectivity challenges, the cost and access to energy, and shortage of skilled labour all contribute to a challenging operating environment. These factors create additional challenges for businesses and can also prevent Northerners from fully benefiting from economic development opportunities.

CanNor's key risks and response strategies are published in the Departmental Plan:

Approved by:

________________________
Paula Isaak
President

___________________________
Ross Miller CPA, CMA
Chief Financial Officer

Statement of Authorities (unaudited)

(In thousands of dollars)

  Fiscal year 2019-2020 Fiscal year 2018-2019
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 Total available for use for the year ending
March 31, 2019*
Used during the quarter ended
June 30,  2018
Year-to date used at quarter-end
Vote 1 - Net Operating 16,608 3,351 3,351 11,976 2,748 2,748
Vote 5 - Transfer payments 46,354 4,184 4,184 16,650 759 759
Budgetary statutory authorities 1,878 252 252 1,233 308 308
Total authorities 64,840 7,787 7,787 29,860 3,815 3,815
* includes only Authorities available for use and granted by Parliament at quarter-end.

Departmental budgetary expenditures by Standard Object (unaudited)

(In thousands of dollars)

  Fiscal year 2019-2020 Fiscal year 2018-2019
Planned expenditures for the year ending March 31, 2020 Used during the quarter ended June 30, 2019 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2019 Used during the quarter ended June 30, 2018 Year-to-date used at quarter-end
Expenditures:
Personnel 13,120 2,764 2,764 9,346 2,765 2,765
Transportation and communications 729 181 181 527 135 135
Information 97 15 15 70 7 7
Professional and special services 3,159 191 191 2,283 129 129
Rentals 1,239 127 127 878 2 2
Repair and maintenance 45 0 0 35 2 2
Utilities, materials and supplies 73 14 14 53 12 12
Acquisition of machinery and equipment 12 1 1 9 0 0
Transfer payments 46,354 4,184 4,184 16,650 759 759
Other subsidies and payments 12 310 310 9 4 4
Total budgetary expenditures 64,840 7,787 7,787 29,860 3,815 3,815

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