Quarterly Financial Report ending December 31, 2016

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, Aboriginal 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 Report on Plans and Priorities, 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 2016-2017 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 2016-2017, the Main Estimates were tabled on February 23, 2016.

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 December 31, 2016, total authorities available for fiscal year 2016-2017 amounted to $56.0M, a $4.8M increase from the same quarter last year.

The increase in authorities is a result of $6.4M in new funding for the Canada 150 Infrastructure Program. offset by $1.3M in reduced funding for the Centre of Northern Innovation in Mining. Funding was also lower for Strategic Investments in Northern Economic Development, Northern Adult Basic Education and the Northern Projects Management Office programs which were renewed in 2016-17 with reduced operating funding compared to the previous years.  

Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total expenditures for the quarter ending December 31, 2016 decreased by $0.5M ($10.9M to $10.4M).

Personnel expenditures were consistent compared to the previous year.

Other operating expenditures decreased by $196K compared to the same period last year. Increased professional services costs were offset by lower travel and rental costs. Variances are related to the timing differences of payments to other government departments.

Year to date transfer payment expenditures were $3.6M lower as of December 31, 2016 compared to the same period last year. The change reflects timing differences of project approvals for the Strategic Investments in Northern Economic Development program (SINED) which makes up almost 50% of contribution funding.

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 2016-17 Report on Plans and Priorities. The risk profile identifies the following key risk areas:

Operational Environment

CanNor monitors expenditures and carries out business planning to ensure that financial risks are mitigated and that program delivery is optimized. Progress is being made to increase the pace of project review and disbursements of contribution programs in order to make the most effective and efficient use of Agency resources.

Approved by:

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

Statement of Authorities (unaudited)

  Fiscal year 2016-2017 Fiscal year 2015-2016
(In thousands of dollars) Total available for use for the year ending
March 31, 2017*
Used during the quarter ended
December 31, 2016
Year-to date used at quarter-end Total available for use for the year ending
March 31, 2016*
Used during the quarter ended
December 31, 2015
Year-to date used at quarter-end
Vote 1 - Net Operating 14,201 3,012 8,836 14,972 3,425 8,078
Vote 5 - Transfer payments 40,187 6,914 8,334 35,001 7,126 11,868
Budgetary statutory authorities 1,638 467 701 1,257 314 943
Total Budgetary authorities 56,026 10,393 17,871 51,230 10,865 20,889
Non-budgetary authorities 0 0 0 0 0 0
Total authorities 56,026 10,393 17,871 51,230 10,865 20,889
* Includes only Authorities available for use and granted by Parliament at quarter-end.

Departmental budgetary expenditures by Standard Object (unaudited)

  Fiscal year 2016-2017 Fiscal year 2015-2016
(In thousands of dollars) Planned expenditures for the year ending March 31, 2017 Used during the quarter ended December 31, 2016 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2016 Used during the quarter ended December 31, 2015 Year-to-date used at quarter-end
Expenditures:
Personnel 10,589 2,623 7,662 9,304 2,687 7,504
Transportation and communications 890 201 369 1,780 284 456
Information 44 3 17 33 4 12
Professional and special services 3,090 453 847 3,699 277 492
Rentals 896 181 596 1,221 470 496
Repair and maintenance 255 4 8 111 1 27
Utilities, materials and supplies 61 12 26 66 15 33
Acquisition of land, buildings and works 0 0 0 15 0 0
Acquisition of machinery and equipment 14 2 12 0 1 1
Transfer payments 40,187 6,914 8,334 35,001 7,126 11,868
Public Debt charges 0 0 0 0 0 0
Other subsidies and payments 0 0 0 0 0 0
Total budgetary expenditures 56,026 10,393 17,871 51,230 10,865 20,889

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