Language selection

Search

Quarterly Financial Report for the quarter ended September 30, 2017

Agriculture and Agri-Food Canada - Quarterly Financial Report for the quarter ended September 30, 2017 (PDF Version, 534 KB)

Statement outlining results, risks and significant changes in operations, personnel and programs

Introduction

Agriculture and Agri-Food Canada's Quarterly Financial Report should be read in conjunction with the Main Estimates, Supplementary Estimates (A) as well as Budget 2017 Building a Strong Middle Class. This report has been prepared as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. As such, it has not been subject to an external audit or review.

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

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 and Supplementary Estimates (A) for the 2017-2018 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 monies 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 results

Authorities

Agriculture and Agri-Food Canada's Quarterly Financial Report reflects the results of the 2017-2018 fiscal period ending September 30, 2017, for which full supply of Main Estimates and Supplementary Estimates (A) were released on June 23, 2017.

At the end of the second quarter of 2017-2018, Agriculture and Agri-Food Canada had total funding available for use of $2,337.7 million as detailed in Table 1. This amount includes the 2017-2018 Main Estimates of $2,251.2 million, the 2017-2018 Supplementary Estimates (A) of $47.5 million, the Operating Budget Carry Forward from 2016-2017 of $29.2 million, and $9.8 million related to proceeds collected from the sale of Crown assets. The net increase of $17.5 million compared to Agriculture and Agri-Food Canada's total authorities at the same time in fiscal year 2016-2017 is mostly due to increases in Vote 10 Grants and Contributions which is partially offset by a decrease in Vote 5 Capital authorities.

Vote 1 Net Operating authorities as of September 30, 2017 totalled $571.0 million, an increase of $3.9 million from the September 30, 2016 amount of $567.1 million. This increase is mainly due to the new funding of $6.0 million in the Dairy Farm Investment Program and the Dairy Processing Investment Fund as well as $2.6 million for supporting genomics, digitization and data mobilization of Agriculture and Agri-Food Canada biological collections. This increase is offset by the decrease of $3.9 million related to the Budget 2016 reduction in Travel, Professional Services and Advertising and other authority adjustments.

Vote 5 Capital authorities at the end of the second quarter of 2017-2018 totalled $75.0 million, a decrease of $13.2 million from the September 30, 2016 amount of $88.2 million. This decrease is mainly due to a reduction of $9.2 million with the ending of the Budget 2014 Federal Infrastructure Initiatives and the $6.2 million Capital Budget Carry Forward from 2015-2016 to 2016-2017. This is offset by a funding increase of $1.5 million for supporting genomics, digitization and data mobilization of AAFC biological collections from Budget 2016.

Vote 10 Grants and Contributions authority of $375.9 million as of September 30, 2017 reflects an increase of $32.6 million from $343.3 million at the same time in 2016-2017.  This is primarily attributed to funding of $37.6 million to implement the Dairy Farm Investment Program and the Dairy Processing Investment Fund, offset by a decrease of $4.5 million for the transfer to Western Economic Diversification in support of the Saskatchewan Canadian Cattlemen's Association project under the Western Diversification Program.

Budgetary Statutory authorities available as at September 30, 2017 were $1,315.7 million, a decrease of $5.9 million from the September 30, 2016 amount of $1,321.6 million. This slight decrease is mainly attributed to an Employee Benefit Plan rate adjustment of $5.0 million.

Graph 1: Comparison of Authorities Available for Use
Description of this image follows in Table 1
Table 1: Authorities Available for Use (In thousands of dollars) [1]
Authorities 2017-2018 2016-2017 Variances Percent
Vote 1 - Net Operating expenditures 571,041 567,141 3,901 1%
Vote 5 - Capital expenditures 74,990 88,174 (13,185) (15%)
Vote 10 - Grants and contributions 375,882 343,252 32,630 10%
Budgetary statutory authorities 1,315,742 1,321,604 (5,862) (0%)
Total Authorities 2,337,655 2,320,170 17,485 1%

Note:

[1] Totals may not add due to rounding.

Expenditures

As detailed in Table 2, at the end of the second quarter of 2017-2018, the Department had spent $540.2 million, compared to $513.8 million for the same period in fiscal year 2016-2017. The increase of $26.4 million is mainly a result of the increase in Vote 1 Net Operating expenditures.

Vote 1 Net Operating expenditures at the end of the second quarter were $265.0 million, 46% of the total available for use of $571.0 million, which is greater than expenditures of $241.2 million or 43% of the total available for the same period last fiscal year. The increase of $23.8 million is primarily due to increased salary expenditures of $29.2 million mainly attributed to retroactive payments due to recently signed collective agreements, offset by a $5.4 million decrease in non-pay operating.

Vote 5 Capital expenditures at the end of the second quarter were $13.3 million or 18% of the total available for use of $75.0 million. For the same period in 2016-2017, expenditures were $19.8 million or 22% of the budget of $88.2 million. The decrease of $6.5 million in capital expenditures is mainly due to decreased spending associated with the ending of the Budget 2014 Federal Infrastructure Initiatives in 2016-2017.

Vote 10 Grants and Contributions expenditures at the end of the second quarter of 2017-2018 were $62.1 million or 17% of the total available for use of $375.9 million. This is not materially different from the same period in 2016-2017 ($58.6 million or 17% of the total available for use of $343.3 million). Historically, the majority of spending on grants and contributions has been in the last half of the fiscal year.

Budgetary Statutory Authorities expenditures at the end of the second quarter of 2017-2018 were $199.9 million compared to $194.2 million for the same period of the previous year. The increase of $5.6 million is mainly caused by an increase of $16.8 million under the AgriInsurance program due to the timing of claims received, offset by decreases of Agristability and AgriInvest program spending for $7.9 million and $4.1 million respectively.

Graph 2: Comparison of Expenditures
Description of this image follows in Table 2
Table 2: Expenditures (In thousands of dollars) [1]
Expenditures 2017-2018 2016-2017 Variance Percent
Vote 1 - Net Operating expenditures 264,993 241,185 23,809 10%
Vote 5 - Capital expenditures 13,271 19,779 (6,508) (33%)
Vote 10 - Grants and contributions 62,084 58,620 3,464 6%
Budgetary statutory authorities 199,855 194,213 5,641 3%
Total Net Budgetary Expenditures 540,203 513,797 26,406 5%
Note:
[1] Totals may not add due to rounding.

Expenditures in Comparison to Authorities

At the end of the second quarter of 2017-2018, the Department had spent $540.2 million (23% of the total funding available for use), compared to $513.8 million for the same period in fiscal year 2016-2017 (22% of the total funding available for use).

Graph 3: Comparison of Total Authorities and Total Net Budgetary Expenditures as of September 30, for fiscal years 2017-2018 and 2016-2017
Description of this image follows

Table 3 presents budgetary expenditures for the first two quarters by standard object. The increase of $26.4 million is a result of increased spending in personnel, transfer payments, and other subsidies and payments offset by decreased spending in Professional and special services. The increase of $27.7 million, or 12% in Personnel is primarily attributed to a $22.2 million increase in collective bargaining retroactive payments and a $2.3 million increase in salaries paid to students. The increase of $11.3 million or 5% in transfer payments is mainly caused by an increase of $16.8 million under the AgriInsurance program due to the timing of claims received, offset by decreases of Agristability and AgriInvest program spending for $7.9 million and $4.1 million respectively. The remaining variance of $6.5 million is mainly caused by the $5.7 million increase in GF2 cost shared programs. The decrease of $14.6 million or 31% in Professional and Special Services is mainly due to reduced spending of $4.9 million for the Swift Current Research Center refit project and $4.2 million for payments in lieu of taxes being reclassified from Professional and Special Services in 2016-2017 to Other Subsidies and Payments in 2017-2018. The remaining variance of $5.5 million is mainly due to decreased spending in consulting services for information technology and telecommunication.  

Agriculture and Agri-Food Canada has total Revenue Spending authority of up to $57.1 million for 2017-2018. The revenue is generated from collaborative research agreements between Agriculture and Agri-Food Canada and third parties, the grazing and breeding activities of the Community Pastures Program, the administration of the AgriStability Program, as well as recoveries for costs related to Internal Support Services provided to other departments. The Department has generated $30.5 million in revenues up to the end of the second quarter of 2017-2018 compared to $30.7 million for the same period last year. The $0.2 million decrease is mainly due to a $2.1 million decrease for Information Technology and Information Management services to other government departments due to the timing of collections, offset by a $1.5 million increase associated with various collaborative agreements.

Table 3: Budgetary Expenditures by Standard Object (In thousands of dollars) [1]
Expenditures 2017-2018 2016-2017 Variance Percent
Personnel 258,954 231,230 27,724 12%
Transportation and communications 5,951 5,710 241 4%
Information 1,758 1,081 677 63%
Professional and special services 33,042 47,599 (14,557) (31%)
Rentals 3,951 3,960 (9) (0%)
Repairs and maintenance 4,244 4,739 (495) (10%)
Utilities, materials and supplies 12,153 13,098 (945) (7%)
Acquisition of land, buildings and works 8,835 10,592 (1,757) (17%)
Acquisition of machinery and equipment 6,523 6,385 138 2%
Transfer payments 229,345 218,025 11,320 5%
Other subsidies and payments 5,931 2,068 3,863 187%
Total Gross Budgetary Expenditures 570,687 544,487 26,200 5%
Less: Revenues netted against expenditures 30,484 30,690 (206) (1%)
Total Net Budgetary Expenditures 540,203 513,797 26,406 5%

Note:

[1] Totals may not add due to rounding.

Risks and Uncertainties

Agriculture and Agri-Food Canada continues to exercise prudent management in delivering its policies and programs. The Department systematically identifies, assesses, monitors, and responds to a variety of corporate, operational, program and project-level internal and external risks and opportunities. These activities are captured within a few tools that are in place, including the Department’s Program Performance Measurement and Risk Management Strategies which identify and monitor ongoing performance measurement, including risk and opportunity monitoring and performance information availability, to effectively support program expenditures. The Department's decision-making capacity is enhanced by effectively embedding risk and opportunity management within its culture, processes, and planning practices. Annually, Agriculture and Agri-Food Canada updates its Corporate Risk Profile to communicate the key risks and opportunities that have the potential to influence departmental priorities, resource allocation, and the achievement of Strategic Outcomes.

Significant changes in relation to operations, personnel and programs

Programs

There are two new AAFC programs that are designed to help the dairy sector begin to adapt to new competition resulting from the Comprehensive Economic and Trade Agreement (CETA). The Dairy Farm Investment Program (DFIP) ($250 million over five years) will help dairy farmers modernize their operations and improve their productivity. The Dairy Processing Investment Fund (DPIF) ($100 million over four years) will support dairy processors as they modernize their facilities and conduct near market activities to introduce new and improved products that will compete with expected imports. The 2017-2018 portion of this funding ($44.9 million) has been reflected in this report.

Approval by Senior Officials
Approved by:

Original signed by
Chris Forbes, Deputy Head
Ottawa, Canada

Original signed by
Pierre Corriveau, Chief Financial Officer

Statement of Authorities (unaudited)
For the quarter ended September 30, 2017
(In thousands of dollars)
Fiscal year 2017-2018 [1] Fiscal year 2016-2017 [1]
Total available for use for the year ending March 31, 2018 [2] Used during the quarter ended September 30, 2017 Year to date used at quarter-end Total available for use for the year ending March 31, 2017 [2] Used during the quarter ended September 30, 2016 Year to date used at quarter-end
Vote 1 - Net Operating expenditures $571,041 $140,927 $264,993 $567,141 $125,335 $241,185
Vote 5 - Capital expenditures 74,990 8,096 13,271 88,174 16,048 19,779
Vote 10 - Grants and contributions 375,882 47,355 62,084 343,252 43,618 58,620
Budgetary statutory authorities [3] 1,315,742 152,322 199,855 1,321,604 147,615 194,213
Total Budgetary authorities 2,337,655 348,700 540,203 2,320,170 332,616 513,797
Total authorities $2,337,655 $348,700 $540,203 $2,320,170 $332,616 $513,797

Notes:

[1] Totals may not add due to rounding.

[2] Includes only Authorities available for use and 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 September 30, 2017
(In thousands of dollars)
Fiscal year 2017-2018 [1] Fiscal year 2016-2017 [1]
Planned expenditures for the year ending March 31, 2018 Expended during the quarter ended September 30, 2017 Year to date used  at quarter-end 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 $470,488 $139,203 $258,954 $469,887 $117,856 $231,230
Transportation and communications 13,484 3,443 5,951 12,596 3,032 5,710
Information 7,149 526 1,758 5,865 (92) 1,081
Professional and special services 120,295 19,793 33,042 140,545 28,684 47,599
Rentals 3,083 1,236 3,951 4,232 3,285 3,960
Repair and maintenance 19,963 2,586 4,244 22,246 1,642 4,739
Utilities, materials and supplies 52,229 6,692 12,153 59,194 7,075 13,098
Acquisition of land, buildings and works 31,928 5,045 8,835 10,084 9,132 10,592
Acquisition of machinery and equipment 47,851 4,214 6,523 41,160 2,862 6,385
Transfer payments 1,618,306 182,068 229,345 1,585,676 172,820 218,025
Other subsidies and payments 10,012 3,375 5,931 28,630 315 2,068
Total gross budgetary expenditures 2,394,788 368,181 570,687 2,380,116 346,611 544,487
Less Revenues netted against expenditures:
Vote-netted revenues 57,133 19,481 30,484 59,946 13,995 30,690
Total Revenues netted against expenditures 57,133 19,481 30,484 59,946 13,995 30,690
Total net budgetary expenditures $2,337,655 $348,700 $540,203 $2,320,170 $332,616 $513,797

Note:

[1] Totals may not add due to rounding.

Appendix A

Budgetary Statutory Authorities Breakdown (unaudited)
For the quarter ended September 30, 2017
(in thousands of dollars)
Fiscal year 2017-2018 [1] Fiscal year 2016-2017 [1]
Planned expenditures for the year ending March 31, 2018 Expended during the quarter ended September 30, 2017 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2017 Expended during the quarter ended September 30, 2016 Year to date used at quarter-end
Contributions to employee benefit plans $63,449 $15,695 $31,390 $68,412 $17,099 $34,198
Contributions to employee benefit plans (Administrative Tribunals Support Service of Canada) - - - - - -
Minister of Agriculture and Agri-Food - Salary and motor car allowance 84 21 42 84 21 42
Contribution payments for the AgriStability program 219,300 (17,236) (16,168) 219,300 (1,968) (4,612)
Contribution payments for the AgriInsurance program 640,800 97,339 103,344 640,800 74,422 86,531
Grant payments for the AgriInvest program 126,200 50,474 81,491 126,200 51,672 85,815
Payments in connection with the Agricultural Marketing  Programs Act 65,900 10,830 8,153 65,900 4,940 6,176
Grant payments for the AgriStability program 41,000 (949) (1,546) 41,000 (2,762) (5,211)
Contribution payments for the AgriInvest program 17,500 8,464 8,866 17,500 8,219 8,631
Loan guarantees under the Canadian Agricultural Loans Act 13,111 129 126 13,111 (4) (7)
Canadian Cattlemen's Association Legacy Fund - - - - - -
Contributions in support of the Assistance to the Pork Industry Initiative - (14,242) (16,744) - (5,371) (17,806)
Grants to agencies established under the Farm Products Agencies Act 100 - - 100 - -
Contribution payments for the Agricultural Disaster Relief  Program (ADRP)/AgriRecovery 118,513 - - 118,513 287 287
Canadian Pari-Mutuel Agency Revolving Fund - 268 (879) - (173) (1,421)
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 9,784 1,625 2,040 10,684 1,465 1,987
Refunds of amounts credited to revenues in previous years - - - - 3 3
Contributions for agricultural risk management - Enhanced Spring Credit Advance program Business Risk Management - (83) (228) - (189) (243)
Class grant payments for the Transitional Industry Support program - - - - - (3)
Class grant payments for the Farm Income program - 3 3 - - -
Grant payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative - (9) (15) - (17) (21)
Contribution payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative - (7) (20) - (26) (125)
Grants in support of the Grain and Oilseed Payment program - - (1) - - (6)
Grants in support of the Cost of Production Benefit - - - - (2) (2)
Contribution for the Transitional Industry Support Program - - - - - -
Budgetary statutory authorities $1,315,742 $152,321 $199,855 $1,321,604 $147,616 $194,213

Note:
[1] Totals may not add due to rounding.

Report a problem on this page
Please select all that apply:
Date modified: