Public Safety Canada Quarterly Financial Report for the quarter ended June 30, 2021

1.0 Introduction

This quarterly financial report for the period ending June 30, 2021 has been prepared by management as required by section 65.1 of the Financial Administration Act, in the form and manner prescribed by Treasury Board. The report should be read in conjunction with the Main Estimates and Supplementary Estimates (A).

This quarterly financial report has not been subject to an external audit or review. However, it has been reviewed by the Departmental Audit Committee prior to approval by the Deputy Minister.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2021-22 Departmental Plan and the 2021-22 Main Estimates.

1.1 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities table includes the Department’s spending authorities granted by Parliament, or received from Treasury Board Central Votes, and those used by the Department consistent with the Main Estimates and the Supplementary Estimates (A) for the 2021-22 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet the information needs concerning the use of spending authorities.

The authority of Parliament is required before funds 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.

Public Safety Canada uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis, as do the expenditures presented in this report.

2.0 Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

The following graph provides a comparison of the net budgetary authorities and expenditures as of June 30, 2021 and June 30, 2020 for the Department’s combined:

• Vote 1: Operating Expenditures;
• Vote 5 and Statutory: Grants and Contributions;
• Statutory Votes:
• Employee Benefit Plans; and
• Minister’s Salary and Car Allowance.

Note: (1) Public Safety Canada’s appropriations have increased to $1,139M as of June 30, 2021. (2) The amount of $40.7M included in the authorities column for 2020-21 is for a statutory contribution in support of the readiness of the Canadian Red Cross for urgent relief efforts related to COVID-19 pursuant to the Public Health Events of National Concern Payments Act. (3) For the period ending June 30, 2020, the authorities provided to the Department include 9/12th of the 2020-21 Main Estimates, Supplementary Estimates (A) and a Statutory Contribution.

2.1 Significant Changes to Authorities

For the period ending June 30, 2021, the authorities provided to the Department include Main Estimates and Supplementary Estimates (A). The 2020-21 authorities for the same period included 9/12th of the 2020-21 Main Estimates, Supplementary Estimates (A) and a Statutory Contribution. The Statement of Authorities table presents a net increase of $491.5 million (75.8 percent) compared to those of the same period of the previous year (from $648.1 million to $1,139.6 million).

Operating Expenditures authorities have increased by $86.1 million (79.7 percent) (from $107.9 million to $194.0 million), which is primarily attributable to:

• A reduced supply (9/12th) ($107.9 million of $162.5 million) of the 2020‑21 Main Estimates, excluding statutory contributions;
• An increase of $32.3 million for relocation and accommodations for the Government Operations Center (Budget 2016); and
• An increase of $8.8 million to develop a buy-back program for assault-style firearms and its associated national social marketing campaign.

Grants and Contributions (G&C) authorities have increased by $403.9 million (77.0 percent) (from $524.3 million to $928.2 million), which is primarily attributable to:

• A reduced supply (9/12th) ($424.3 million of $565.7 million) of the 2020‑21 Main Estimates;
• An increase of $292.0 million for the Disaster Financial Assistance Arrangements (DFAA) program based on forecasts from provinces and territories for expected disbursements under the DFAA for 2021-22; and
• An increase of $20.0 million for the renewal of the National Disaster Mitigation Program.

These increases are primarily offset by the following decrease:

• A decrease of $40.7 million for a one-time statutory contribution to the Canadian Red Cross pursuant to the Public Health Events of National Concern Payments Act.

Budgetary Statutory authorities have increased by $1.6 million (9.9 percent) in 2021-22 primarily attributable to the Employee Benefits Plan associated with new salary funding received in Supplementary Estimates (A).

2.2 Significant Variances from Previous Year Expenditures

First Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended June 30, 2021 have decreased by $31.8 million (23.3 percent) (from $136.0 million to $104.2 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

• Personnel expenditures have increased by $1.5 million.
• Other operating expenditures have increased by $2.5 million.
• Transfer payments expenditures have decreased by $35.3 million (35.3 percent) primarily attributable to:
  • An increase of $5.6 million due to the timing of payments for the Memorial Grant Program for First Responders; and
  • An increase of $5.2 million due to the timing of payments relating to the First Nations Policing Program.

Offset by the following decreases:

• A decrease of $39.5 million for a one-time statutory contribution to the Canadian Red Cross pursuant to the Public Health Events of National Concern Payments Act;
• A decrease of $6.2 million due to the timing of payments for the Take Action Against Gun and Gang Violence initiative.
• A net decrease of $0.5 million for other expenditures variances of lesser value.

3.0 Risks and Uncertainty

COVID-19

At the onset of the COVID-19 outbreak in March 2020, with the majority of its employees transitioning to working remotely, Public Safety Canada’s (PS) primary focus was to ensure its critical services continued to be delivered. That being said, as time progresses, it has become clear that this disruptive event has not affected the department’s operations and its capacity to continue to deliver on its mandate. While the majority of PS employees are currently working from home, they have demonstrated resiliency and adaptability as they continue to perform their regular work functions. The department established a Pandemic Management Committee to ensure that timely actions are taken, that employees remain well supported, and that decisions are communicated effectively to all staff as the situation continues to evolve.

As Canada’s vaccination rate continues to increase, the department is now starting to examine future workplace options to help ensure that PS continues to effectively deliver services to Canadians.

Disaster Financial Assistance Arrangements

The Disaster Financial Assistance Arrangements (DFAA) contribution program presents a greater level of uncertainty than other PS grants and contributions programs given that it represents a significant portion of the PS budget and that it is subject to unforeseen events. The DFAA contribution program was established in 1970 to provide a consistent and equitable mechanism for federal sharing of provincial and territorial costs for natural disaster response and recovery where such costs would place an undue burden on a provincial or territorial economy.

There are currently 61* active natural disasters for which Orders in Council (OiC) have been approved, authorizing the provision of federal financial assistance under the DFAA, and for which final payments have not yet been made. Public Safety’s total outstanding share of liability under the DFAA in regards to these 61 events is $2.55 billion, the majority of which is expected to be paid out over the next five years.

DFAA liability has decreased by $160 million from $2.71 billion in the third quarter of 2020-21 to $2.55 billion in the first quarter of 2021-22. Variations in the DFAA liability are mainly attributable to:

• Changes for newly approved OiC, which authorize funding related to recent natural disasters for which Provinces and Territories require federal sharing of costs;
• Changes for payments issued under the existing obligation; and
• Changes in the estimates of the existing natural disasters.

The following are the most significant events within Public Safety Canada’s DFAA liability:

• Alberta 2013 June Flood ($600 million);
• Manitoba 2011 Spring Flood ($361 million);
• Quebec 2019 Spring Flood ($216 million);
• British Columbia 2017 July Wildfires ($211 million);
• British Columbia 2018 Spring Flood ($145 million); and
• Quebec 2017 Spring Flood ($155 million).

This decrease in funding is based on forecasts from provinces and territories for expected disbursements under the DFAA for 2021-22. Updates to the DFAA liability in result to changes in the estimates of the existing natural disasters are completed and approved twice a year with the last one having been conducted in Winter 2021-22 and reflected in the current Quarterly Financial Report. The next semi-annual updates will be available and presented in the December 31, 2021 Quarterly Financial Report.

*This number does not include 4 OiCs which were approved on June 24, 2021 which would increase the DFAA liability by $0.06 billion. These will be reflected in the Q2 report.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

On April 15, 2021, Patrick Tanguy returned to Public Safety Canada to act as a special advisor to the Deputy Minister.

5.0 Approval by Senior Officials

Approved as required by the Policy on Financial Resource Management, Information and Reporting:

Rob Stewart
Deputy Minister
Public Safety Canada
Ottawa (Canada)

Date: August 25, 2021

Patrick Amyot, CPA, CMA
Chief Financial Officer
Public Safety Canada
Ottawa (Canada)

Date: August 24, 2021

6.0 Statement of Authorities (unaudited)

(1) Includes only authorities available for use and granted by Parliament at quarter end.

(1) Includes only authorities available for use and granted by Parliament at quarter end.

7.0 Departmental budgetary expenditures by Standard Object (unaudited)

(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

(2) Planned expenditures include capital funding for the relocation and accommodations for the Government Operations Center.

(1) Includes only planned expenditures against authorities for use and granted by Parliament at quarter end.

Date modified:

2021-08-27