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Quarterly Financial Report for the quarter ended December 31, 2019

Agriculture and Agri-Food Canada - Quarterly Financial Report for the quarter ended December 31, 2019 (PDF Version, 793 KB)

Introduction

Agriculture and Agri-Food Canada is the federal department responsible for the Canadian agriculture and agri-food sector. Agriculture is a shared jurisdiction in Canada, and our department works closely with provincial and territorial governments on the development and delivery of policies and programs. Along with these policies and programs, our research and technology helps farmers and food producers to grow and develop the sector in order to succeed in Canadian and global markets.

Detailed information on Agriculture and Agri-Food Canada’s program activities can be found in the Departmental Plan.

This quarterly financial report has been prepared as required by section 65.1 of the Financial Administration Act in the form and manner prescribed by Treasury Board, and should be read in conjunction with the Main Estimates.

This report has not been subject to an external audit or review.

Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department's spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates for the 2019-2020 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 money 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 Department 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.

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

This quarterly financial report reflects the results of the current fiscal period in comparison to the authorities provided in the Main Estimates for fiscal year 2019-2020, as well as budget adjustments approved by Treasury Board up to December 31, 2019.

The following table provides a comparison of total authorities and year-to-date expenditures for the third quarter of the current and previous fiscal years.

Comparison of Total Authorities and Total Year-to-date Expenditures for the Quarter ended December 31 of fiscal years 2018-2019 and 2019-2020 (in millions of dollars)
All Votes and Statutory (in millions of dollars) 2018-2019 2019-2020
Total Authorities 2,598 2,928
Total Year-to-date Expenditures 1,001 1,519
Utilization 39% 52%

A. Significant Changes to Authorities

The following table provides a comparison of authorities by vote for the third quarter of the current and previous fiscal years.

Comparison of Total Authorities as at December 31 of Fiscal Years 2018-2019 and 2019-2020
Authorities Available
(in millions of dollars)
2018-2019 2019-2020 Variance
Vote 1 – Net Operating authorities 622 612 (11)
Vote 5 - Capital authorities 69 51 (18)
Vote 10 - Grants and Contributions 427 420 (7)
Vote 15 - A Food Policy for Canada - 17 17
Statutory authorities 1,480 1,828 348
Total Authorities 2,598 2,928 330
Note: Totals may not add up due to rounding.

Total authorities in fiscal year 2019-2020 were $2,928 million at the end of the third quarter, as compared to $2,598 million at the end of the third quarter of 2018-2019, which represents an increase of $330 million or 13%. This increase is primarily attributable to the following:

This increase is partially offset by:

B. Significant Changes in Year-to-Date Expenditures

The following table provides a comparison of spending by Vote for the third quarter of the current and previous fiscal years.

Comparison of Year-to-Date Expenditures for the Quarter Ended December 31 of Fiscal Years 2018-2019 and 2019-2020
Year-to-date Expenditures
(in millions of dollars)
2018-2019 2019-2020 Variance
Vote 1 – Net Operating expenditures 386 409 23
Vote 5 - Capital expenditures 23 17 (6)
Vote 10 - Grants and Contributions 99 167 68
Vote 15 - A Food Policy for Canada - - -
Statutory expenditures 494 926 432
Total Year-to-date Expenditures 1,001 1,519 518
Note: Totals may not add up due to rounding.

At the end of the third quarter of 2019-2020, total expenditures were $1,519 million, compared to $1,001 million reported for the same period in 2018-2019, representing an increase of $518 million or 52%. This increase is primarily attributable to the following:

Partially offset by a $6 million decrease in Vote 5 Capital expenditures, primarily as a result of a decrease in renovations related to Major Capital projects.

Risks and Uncertainties

Agriculture and Agri-Food Canada continues to exercise prudent management in delivering its policies and programs. The department has established processes to identify, assess, monitor, and respond to a variety of risks. This facilitates decision making and priority setting and contributes to more effective delivery and efficient use of resources.

In the current environment, supporting employees and managers dealing with pay issues is a top priority for Agriculture and Agri-Food Canada. The department created a Pay Transformation team to proactively mitigate risks and respond to pay issues by providing:

The department actively monitors the pay impacts and corresponding salary payment adjustments resulting from these issue resolution activities.

Significant changes in relation to operations, personnel and programs

Personnel

On December 10, 2019, Brian Gray was appointed to the position of Special Advisor, Indigenous Relations and Gilles Saindon was appointed to the position of Assistant Deputy Minister, Science and Technology Branch.

Programs

Budget 2019 announced A Food Policy for Canada, introducing $134.4 million of new investments over the next five years among Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, and the Canadian Northern Economic Development Agency. Agriculture and Agri-Food Canada was allocated $95 million of this funding to:

The 2018 Fall Economic Statement announced Canada’s Export Diversification Strategy and earmarked new funding ($25 million over five years and $5 million ongoing, beginning in 2024-2025) among Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, and Health Canada. The funding will be spent to enhance federal capacity to ease Canadian agricultural producers’ access to international markets by means such as better engagement with international standard-setting bodies. Agriculture and Agri-Food Canada was allocated $11.6 million over five years ($2.3 million ongoing, beginning in 2024-2025) of this funding to enhance the Agriculture and Food Trade Commissioner Services and accelerate Canada’s expansion into newly accessible markets through free trade agreements.

Approval by Senior Officials
Approved by:

Original signed by
Chris Forbes, Deputy Head
Ottawa, Canada

Original signed by
Christine Walker, Chief Financial Officer
Ottawa, Canada

Statement of Authorities (unaudited)
For the quarter ended December 31, 2019
(in thousands of dollars)
Fiscal year 2019-2020 [1] Fiscal year 2018-2019 [1]
Total authorities for the year ending March 31, 2020 [2] Used during the quarter ended December 31, 2019 Year to date used at quarter-end Total authorities for the year ending March 31, 2019 [2] Used during the quarter ended December 31, 2018 Year to date used at quarter-end
Vote 1 - Net Operating expenditures $611,895 $149,051 $409,219 $622,433 $128,127 $385,994
Vote 5 - Capital expenditures 50,645 11,200 17,104 68,942 13,222 22,856
Vote 10 - Grants and contributions 419,735 80,735 166,510 426,625 56,930 98,501
Vote 15 - A Food Policy for Canada 17,486 - - - - -
Budgetary statutory authorities [3] 1,827,908 743,311 925,884 1,479,857 310,966 493,809
Total Budgetary authorities 2,927,669 984,297 1,518,717 2,597,857 509,245 1,001,160
Total authorities $2,927,669 $984,297 $1,518,717 $2,597,857 $509,245 $1,001,160

Notes:
[1] Totals may not add due to rounding.
[2] Includes only authorities granted by Parliament at quarter-end.
[3] Details on Budgetary statutory authorities are included the table below.

Departmental budgetary expenditures by Standard Object (unaudited)
For the quarter ended December 31, 2019

(In thousands of dollars)
Fiscal year 2019-2020 [1] Fiscal year 2018-2019 [1]
Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended December 31, 2019 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended December 31, 2018 Year to date used at quarter-end
Expenditures:
Personnel $531,683 $134,974 $385,864 $507,134 $119,423 $364,693
Transportation and communications 15,075 3,453 9,445 12,520 3,942 9,725
Information 6,817 1,891 4,294 6,615 1,778 3,888
Professional and special services 101,631 24,406 57,934 112,307 22,784 54,906
Rentals 6,735 1,323 5,011 6,267 942 4,624
Repair and maintenance 13,243 3,933 7,521 14,581 3,826 9,143
Utilities, materials and supplies 41,902 7,227 18,721 44,526 6,194 18,368
Acquisition of land, buildings and works 27,379 1,135 1,614 51,820 6,411 9,945
Acquisition of machinery and equipment 38,553 8,892 15,885 31,053 7,138 13,788
Transfer payments 2,170,369 512,593 746,024 1,828,149 349,675 539,334
Other subsidies and payments [2] 26,791 299,459 305,077 39,953 3,215 13,001
Total gross budgetary expenditures 2,980,176 999,286 1,557,390 2,654,926 525,328 1,041,415
Less Revenues netted against expenditures:
Vote-netted revenues 52,507 14,990 38,673 57,069 16,083 40,255
Total Revenues netted against expenditures 52,507 14,990 38,673 57,069 16,083 40,255
Total net budgetary expenditures $2,927,669 $984,296 $1,518,717 $2,597,857 $509,245 $1,001,160
Note:
[1] Totals may not add due to rounding.
[2] Increase in Other subsidies and payments mainly due to the new one-year $345 million Dairy Direct Payment Program as payments began in December.

Appendix A

Budgetary Statutory Authorities Breakdown (unaudited)
For the quarter ended December 31, 2019

(in thousands of dollars)
Fiscal year 2019-2020 [1] Fiscal year 2018-2019 [1]
Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended December 31, 2019 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2019 Expended during the quarter ended December 31, 2018 Year to date used at quarter-end
Contributions to employee benefit plans $65,685 $16,360 $49,081 $66,321 $16,381 $49,144
Minister of Agriculture and Agri-Food - Salary and motor car allowance 88 22 66 86 22 65
Contribution payments for the AgriStability program 384,830 (1,734) (22,934) 384,830 (7,393) (18,351)
Contribution payments for the AgriInsurance program 623,000 392,509 461,843 623,000 246,068 325,991
Grant payments for the AgriInvest program 122,910 29,981 111,915 138,148 43,206 132,196
Payments in connection with the Agricultural Marketing Programs Act [2] 87,300 7,019 25,120 65,900 4,750 15,899
Grant payments for the AgriStability program 39,320 (207) (299) 39,320 (139) (242)
Contribution payments for the AgriInvest program 16,550 4,293 15,709 18,602 6,117 10,854
Loan guarantees under the Canadian Agricultural Loans Act 13,111 - 754 13,111 (3) (2)
Contributions in support of the Assistance to the Pork Industry Initiative - - (12,550) - - (25,289)
Grants to agencies established under the Farm Products Agencies Act 100 - - 100 - -
Contribution payments for the Agricultural Disaster Relief Program (ADRP)/AgriRecovery 118,513 - - 118,513 - -
Canadian Pari-Mutuel Agency Revolving Fund - 344 (174) - 245 (690)
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 11,501 1,481 4,152 11,926 1,623 4,456
Contributions for agricultural risk management - Enhanced Spring Credit Advance program Business Risk Management - - - - 121 -
Class grant payments for the Transitional Industry Support program - - - - - (2)
Class grant payments for the Farm Income Program - 293,246 293,246 - 5 7
Grant payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative - (2) (17) - (7) (22)
Contribution payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative - - (26) - (21) (200)
Grants in support of the Grain and Oilseed Payment program - (1) (1) - (5) (6)
Grants related to the Dairy Direct Payment Program 345,000 - - - - -
Budgetary statutory authorities $1,827,908 $743,311 $925,884 $1,479,857 $310,968 $493,809
Note:
[1] Totals may not add due to rounding.
[2] Includes $21.4 million of contribution funding received from Supplementary Estimates.
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