Quarterly Financial Report

Quarterly Financial Report for the Quarter ended September 2011

Introduction

This quarterly financial 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 financial report reflects the results of the current fiscal period in relation to the Main Estimates (and Supplementary Estimates A as applicable) for which full supply was released on June 27th, 2011.

The report should be read in conjunction with the Main Estimates and Supplementary Estimates.

A summary description of the Parks Canada Agency's program activities can be found in Part II of the Main Estimates.

Basis of Presentation

This quarterly financial report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Parks Canada Agency's spending authorities granted by Parliament and those used by the Agency, consistent with the Main Estimates and Supplementary Estimates for the 2011-12 fiscal year. This quarterly financial 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 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 performance reporting process, the Parks Canada Agency prepares its annual audited financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian Generally Accepted Accounting Principles (GAAP) for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

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

This section highlights the significant items that contributed to the net decrease in resources available for the year and actual expenditures for the quarter ended September 30.

The above chart outlines the total authorities available within the Agency as of September 30 of each year, the year-to-date expenditures as well as the expenditures during the quarter.

Significant changes to Authorities

As at September 30, 2011, total authorities available for the year are $183.4 million less than compared to the same quarter of the previous year.

The difference is primarily attributable to the end of funding under the Canada Economic Action Plan (CEAP). The major reductions are:

• $142.6 million for improvements and upgrades to national historic sites and Parks Canada's visitor facilities (CEAP)
  
  
• $16.6 million for the assessment, management and remediation of federal contaminated sites (CEAP)
  
  
• $15 million for upgrading a section of the Trans-Canada Highway from a two-lane undivided highway to a four-lane divided highway in Banff National Park (CEAP and other)
  
  
• $4.5 million for Budget 2010 - Cost containment measures

Significant changes to budgetary expenditures

Expended:
As per the Budgetary Expenditures by Standard Object Table, the total expended in the second quarter ending September 30, 2011 decreased by $45.5 million compared to the previous year, from $248.8 million to $203.3 million. This represents an 18% decrease of expenditures recorded for the same period in 2010-11. The majority of the decrease between 2010-11 and 2011-12 relates to professional & special services, repair & maintenance, acquisition of land, buildings & works and is a result of the end of funding relating to the Canada Economic Action Plan for improvements and upgrades to national historic sites and Parks Canada's visitor facilities. All other expenditures are consistent with prior year spending trends.

Planned:
The decrease in planned expenditures for acquisition of land, buildings and works is also a result of the end of funding related to the Canada Economic Action Plan for improvements and upgrades to national historic sites and Parks Canada's visitor facilities.

Risks and Uncertainties

Parks Canada is primarily funded through voted parliamentary spending authorities appropriated over a 2 year period for program expenditures, including capital expenditures and transfer payments. Also, Parks Canada Agency is partially funded through respendable revenue which originates mainly from entrance and camping fees. These revenues are impacted by economic fluctuations, competition from other parks and cultural attractions and weather conditions. At the end of Quarter 2, the Agency's operational revenues (also referred to as expenditures equivalent to the revenues in the Statement of Authorities Table) were $4.8 million higher than at the same time last fiscal year. This is a result of an increase in Business revenues and to improvements made to revenue recording processes.

The Federal Budget 2010 announced that the operating budgets of departments/agencies would be frozen at their 2010-11 levels for the fiscal years 2011-12 and 2012-13. Parks Canada has put in place the following measures to contain costs:

• A series of interim measures were initially put in place for a 6 month period and have now been extended into 2011-12. The interim measures include: operational cost controls and targeted restrictions on filling vacant positions.
  
  
• The Agency will be monitoring closely its resources to ensure operating costs are contained, and reallocate throughout the year as necessary.

Budget 2011 announced that departmental budgets would be examined through a Strategic and Operating Review. Pursuant to this review, it is expected that future years' budgets will be reduced for fiscal years commencing in 2012-13. However, at this time, the nature and extent of any reductions are not known.

Over the past months, there were an unprecedented number of severe weather events that buried portions of 26 national parks and national historic sites under piles of debris and destroyed or damaged numerous visitor and operational facilities as well as several highways. The magnitude of damage and emergency response work has been and continues to be overwhelming both in respect to costs and timing, as these remedial works must be undertaken at the same time as the visitor season at parks and sites. On September 22, 2011, the Agency was successful in accessing the Treasury Board Management Reserve, to address the most immediate needs.

Parks Canada is responsible for 233 dams and 110 locks that control water levels along its nine historic canals. The replacement value of this infrastructure is estimated at approximately $4 billion. A preliminary vulnerability assessment has recently been carried out and in collaboration with Public Works and Government Services Canada, detailed inspections are now being carried out to determine short-term remedial measures to reduce risks and capital repairs to ensure compliance with safety codes.

Significant Changes in Relation to Operations, Personnel and Programs

Although the Agency delivered on the majority of its Canada Economic Action Plan commitments in 2010-11, the program continues to have a significant impact on operations in 2011-12. The Agency announced a project list that exceeded its Canada Economic Action Plan funding to ensure that it could fully deliver this program commitment. As a result, it is the Agency's intention to continue to deliver on approximately $26 million of announced investments within its existing capital program.

In addition, the Agency continues to deliver on the twinning of the Trans-Canada Highway with an investment of $130 million over the next three years.

Approval by Senior Officials

Approved by:

Statement of Authorities (Unaudited)
	Fiscal Year 2011-2012			Fiscal Year 2010-2011
	Total available for use for the year ending March 31, 2012* (in thousands of dollars)	Used during the quarter ended September 30, 2011 (in thousands of dollars)	Year-to-date used at quarter end (in thousands of dollars)	Total available for use for the year ending March 31, 2011* (in thousands of dollars)	Used during the quarter ended September 30, 2010 (in thousands of dollars)	Year-to-date used at quarter end (in thousands of dollars)
- Vote 25 - Program expenditures	575,531	142,755	244,348	760,678	192,221	298,915
- Vote 30 - Payments to the New Parks and Historic Sites Account	500			500
Budgetory statutory authorities
- Employee benefit plans	47,942	11,986	23,972	46,229	11,557	23,114
- Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act	111,000	48,569	71,319	111,000	44,978	66,554
Total Budgetary Authorities	734,973	203,310	339,639	918,407	248,756	388,583
* Includes authorities available for use and granted by Parliament at quarter-end

 

Budgetary Expenditures by Standard Object (Unaudited)
	Fiscal Year 2011-2012			Fiscal Year 2010-2011
	Planned expenditures for the year ending March 31, 2012* (in thousands of dollars)	Expended during the quarter ended September 30, 2011 (in thousands of dollars)	Year-to-date used at quarter end (in thousands of dollars)	Planned expenditures for the year ending March 31, 2011* (in thousands of dollars)	Expended during the quarter ended September 30, 2010 (in thousands of dollars)	Year-to-date used at quarter end (in thousands of dollars)
Expenditures:
Personnel	338,000	111,282	203,752	338,000	111,437	203,444
Transportation and communications	41,000	6,957	11,185	41,000	5,764	10,498
Information	11,000	2,670	4,172	11,000	2,075	3,267
Professional and special services	149,985	22,718	35,057	159,100	39,972	51,078
Rentals	19,000	5,681	8,270	16,330	5,625	7,701
Repair and maintenance	50,000	24,277	32,269	57,330	37,866	49,281
Utilities, materials and supplies	72,000	10,545	16,560	63,720	10,806	16,997
Acquisition of land, buildings and works	22,726	2,505	3,731	204,157	10,523	11,814
Acquisition of machinery and equipment	13,000	3,761	6,232	10,400	4,590	7,943
Transfer payments	3,262	3,201	4,957	4,370	5,053	6,054
Other subsidies and payments	15,000	9,713	13,454	13,000	15,045	20,505
Total gross budgetary expenditures	734,973	203,310	339,639	918,407	248,756	388,582
* Includes authorities available for use and granted by Parliament at quarter-end