Transparency

Quarterly financial report for the quarter ended September 30, 2016

1. 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 report should be read in conjunction with the Main Estimates, the Supplementary Estimates and the previous Quarterly Financial Reports.

A summary description of the Parks Canada Agency’s programs can be found in Part II of the Main Estimates, and a detailed description in Part III – Report on Plans and Priorities.

This quarterly report has not been subject to an external audit. However, it has been reviewed by the Agency’s Audit Committee.

1.1 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting (modified cash 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 2016-17 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 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.

The Agency uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the department performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year to date results

The above chart outlines the total authorities available within the Agency as of September 30 of each year, the expenditures during the second quarter as well as the year to date expenditures. Significant changes to authorities and to expenditure patterns are outlined in the following sections.

2.1 Statement of Authorities (Table 1)

Authorities available for use
This quarterly report reflects the funding available for use from the 2016-17 Main Estimates, the 2015-16 unused spending authority¹ and the 2016-17 Supplementary Estimates A.

As per Table 1 (Statement of Authorities), at September 30, 2016, Parks Canada’s total authorities available for use for the year ending March 31, 2017 are $259.1 million or 22-percent higher when compared to the same quarter of the previous year (from $1,157.7M to $1,416.8M). The increases in authorities are due to the following factors:

• $89.8 million increase for the 2015-16 unused spending authority;
  
• $84.8 million increase to invest in important federal infrastructure assets across the country, announced in Budget 2015;
  
• $78.2 million in additional authorities to revitalize federal infrastructure assets as well as protect nationally significant cultural infrastructure, announced in Budget 2016;
  
• $9.9 million increase in Budgetary statutory authorities related to expenditures equivalent to revenues;
  
• $7.7 million increase for Rouge National Urban Park following a change in funding profile due to delays in land transfer agreements; and
• $3.1 million to develop and operate the Wrecks of HMS Erebus and HMS Terror National Historic Site.
  

These increases are offset by the following decrease in the agency’s spending authorities:

• $14.4 million for improvements to highways, bridges and dams located in national parks and along historic canals.

Authorities used during the quarter
In the second quarter of 2016-17, total net budgetary expenditures were $321.0 million compared to $262.4 million reported for the same period in 2015-16, resulting in an increase of $58.6 million or 22-percent. The increase in authorities used during the quarter is mostly due to spending on Federal Infrastructure Initiative (Budget 2015) and to a higher number of students employed as part of the Youth Employment Strategy (Budget 2016).

2.2 Budgetary Expenditures by Standard Object (Table 2)

Planned by Standard Object
Total planned expenditures in the second quarter of 2016-17 are $259.1 million higher compared to the previous year. The variance is mainly due to increases in Professional and special services ($105.2M) and in Acquisition of land, buildings and works ($157.9M). This is consistent with the increase in authorities mentioned above related to the Agency's Infrastructure Investments as well as its unused spending authority from the previous fiscal year.

Expended by Standard Object
As per Table 2 (Budgetary Expenditures by Standard Object), the total expended in the second quarter ending September 30, 2016 is $58.6 million or 22-percent higher compared to the previous year. The overall variance can be explained by the following:

Personnel expenditures have increased by $7.4 million compared to the same quarter last year. This is in part due to spending on federal infrastructure assets (Budget 2015) and to a higher number of students employed as part of the Youth Employment Strategy (Budget 2016).

Professional and special services expenditures have increased by $16.7 million and the Acquisition of land, buildings and works expenditures have increased by $35.2 million compared to the same quarter last year. The year to date expenditures had a similar increase. This is mainly due to the increase in funding received to invest in the Agency's infrastructure assets.

Rental expenditures have decreased by $3.2 million compared to the same quarter last year. This is due to rental of aircrafts in support of the 2015 fire season which was one of the most active on record.

Transfer payments have increased by $1.4 million compared to the same quarter last year. This increase is mostly explained by earlier payments compared to the previous year, to support the Trans Canada Trail Foundation’s Fundraising effort.

All other expenditures are consistent with prior year spending trends.

3. Risks and Uncertainties

Parks Canada’s objectives and Strategic Outcome are influenced by various internal and external factors. The Agency undertakes a risk assessment every year to support decision making related to priority setting and resource allocation. The risk assessment identifies key risks that have the greatest impact on the Agency’s ability to achieve its Strategic Outcome and expected results. The Agency has identified Environmental Forces Adaptation and Response, Infrastructure Project Delivery, Connecting with Canadians, External Development Pressures and Indigenous Relationships as its key corporate risks for 2016-17² . The following are examples of some of the mitigation strategies that Parks Canada is undertaking in order to address these risks:

• undertaking applicable planning and monitoring to identify potential threats to or at heritage places; continuing to identify best practices to reduce impacts of natural threats to cultural resources, such as shoreline erosion;
  
• implementing an Agency project management office to strengthening national project management practices, processes and controls that enable the Agency to achieve effective and prudent project delivery;
  
• developing and beginning the implementation of a plan for Parks Canada's participation in federal activities to celebrate the 150th anniversary of Canadian Confederation;
  
• continuing to undertake ecological restoration projects as part of the Conservation and Restoration Program to build ecosystem resilience; and
  
• Implementing Promising Pathways: A resource guide for strengthening engagement with Indigenous peoples.  

4. Significant Changes in Relation to Operations, Personnel and Programs

There are no significant changes in relation to operations, personnel and programs to report during this quarter.

5. Approval by Senior Officials

Approved by:

 

Parks Canada Agency
For the quarter ended September 30, 2016
Statement of Authorities - Table 1
(Unaudited)

(in thousands of dollars)	Fiscal Year 2016-17
	Total available for use for the year ending March 31, 2017*	Used during the quarter ended September 30, 2016	Year to date used at quarter end
Vote 1 - Program expenditures	1,224,473	245,109	376,099
Vote 5 - Payments to the New Parks and Historic Sites Account	500	0	0
Statutory - Contributions to employee benefit plans	53,230	13,209	26,418
Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act	138,591	62,703	93,762
Total Budgetary authorities	1,416,794	321,021	496,279

(in thousands of dollars)	Fiscal Year 2015-16
	Total available for use for the year ending March 31, 2016*	Used during the quarter ended September 30, 2015	Year to date used at quarter end
Vote 1 - Program expenditures	976,161	195,983	291,398
Vote 5 - Payments to the New Parks and Historic Sites Account	500	0	0
Statutory - Contributions to employee benefit plans	52,318	11,910	23,819
Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act	128,678	54,474	87,204
Total Budgetary authorities	1,157,657	262,367	402,421

* Includes only Authorities available for use and granted by Parliament at quarter-end

Parks Canada Agency
For the quarter ended September 30, 2016
Budgetary Expenditures by Standard Object - Table 2
(Unaudited)

(in thousands of dollars)	Fiscal Year 2016-17
	Planned expenditures for the year ending March 31, 2017*	Expended during the quarter ended September 30, 2016	Year to date used at quarter end
Expenditures:
Personnel	375,920	116,474	212,076
Transportation and communications	24,044	4,700	8,303
Information	11,469	1,648	2,888
Professional and special services	261,011	49,248	69,676
Rentals	39,080	6,912	9,796
Repair and maintenance	28,402	7,267	9,676
Utilities, materials and supplies	80,305	13,411	19,692
Acquisition of land, buildings and works	495,850	102,402	133,164
Acquisition of machinery and equipment	61,042	6,544	11,732
Transfer payments	23,658	2,177	2,626
Other subsidies and payments	16,013	10,238	16,650
Total budgetary expenditures	1,416,794	321,021	496,279

(in thousands of dollars)	Fiscal Year 2015-16
	Planned expenditures for the year ending March 31, 2016*	Expended during the quarter ended September 30, 2015	Year to date used at quarter end
Expenditures:
Personnel	374,973	109,065	197,478
Transportation and communications	18,655	4,196	6,851
Information	10,341	1,886	2,950
Professional and special services	155,764	32,581	45,240
Rentals	23,134	10,121	12,398
Repair and maintenance	102,420	8,867	11,788
Utilities, materials and supplies	57,393	12,481	18,457
Acquisition of land, buildings and works	337,931	67,252	83,674
Acquisition of machinery and equipment	41,178	4,881	8,362
Transfer payments	19,058	790	4,205
Other subsidies and payments	16,810	10,247	11,018
Total budgetary expenditures	1,157,657	262,367	402,421

* Includes only Authorities available for use and granted by Parliament at quarter-end

¹ The Parks Canada Agency operates on the basis of a two-year appropriation, whereby any surplus amount reported at the end of a fiscal year is carried forward and is available to be used the following year. However, any portion of the unspent funds not spent will lapse at the end of the two years. The exception being that authorities equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act is not subject to this time limit. This process differs from that of other government departments as they can only claim five percent of their operating vote and twenty percent of their capital vote through the carry forward process each year.

² The complete list of Corporate risks identified by Parks Canada Agency can be found in Part III – Report on Plans and Priorities.