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Quarterly Financial Report For the Quarter Ended December 31, 2020

Agriculture and Agri-Food Canada - Quarterly Financial Report for the quarter ended December 31, 2020 (PDF Version, 1.1 MB)

Introduction

Agriculture and Agri-Food Canada (AAFC) 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, food producers, and processors 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 AAFC's 2020-2021 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 2020-2021 Main Estimates, as well as the Supplementary Estimates A, Supplementary Estimates B, and the 2019-2020 Operating and Capital Budget Carry Forwards available for use during the 2020-2021 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 results

This quarterly financial report reflects the results of the current fiscal period in comparison to the authorities approved by Parliament, as well as budget adjustments approved by Treasury Board up to December 31, 2020.

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

Comparison of total authorities available for use and total year-to-date expenditures for the quarter ended December 31 of fiscal years 2020-2021 and 2019-2020 (in millions of dollars)
All votes and statutory authorities (in millions of dollars) 2020-2021 2019-2020
Total authorities available for use 3,490 2,928
Total year-to-date expenditures 1,433 1,519
Utilization 41% 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 of December 31 of fiscal years 2020-2021 and 2019-2020
Total authorities available for use
(in millions of dollars)
2020-2021 2019-2020 Variance
Vote 1 – Net operating authorities 590 612 (22)
Vote 5 – Capital authorities 53 51 2
Vote 10 – Grants and contributions 601 420 181
Vote 15 – A Food Policy for Canada - 17 (17)
Statutory authorities 2,247 1,828 419
Total authorities 3,490 2,928 562

Note: Totals may not add up due to rounding.

Total authorities in fiscal year 2020-2021 were $3,490 million at the end of the third quarter, as compared to $2,928 million at the end of the third quarter of 2019-2020, which represents an increase of $562 million or 19%.

The statutory authorities increase of $419 million is mainly due to:

The $181 million increase in Vote 10 – Grants and contributions is attributable to:

These increases are partially offset by the following:

B. Significant changes in year-to-date expenditures

The following table provides spending comparisons 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 2020-2021 and 2019-2020
Year-to-date expenditures (in millions of dollars) 2020-2021 2019-2020 Variance
Vote 1 – Net operating expenditures 403 409 (6)
Vote 5 – Capital expenditures 19 17 2
Vote 10 – Grants and contributions 160 167 (7)
Vote 15 – A Food Policy for Canada - - -
Statutory expenditures 851 926 (75)
Total year-to-date expenditures 1,433 1,519 (85)

Note: Totals may not add up due to rounding.

At the end of the third quarter of 2020-2021, total expenditures were $1,433 million, compared to $1,519 million reported for the same period in 2019-2020, representing a decrease of $85 million or 6%.

The bulk of the change in year-to-date spending was a $75 million net decrease in statutory expenditures composed of:

In addition, there was a net decrease of $7 million in Vote 10 – Grants and contributions as projects in non-COVID-19 programs were delayed as a result of the pandemic. This decrease was partially offset by increased spending for the Canadian Agricultural Partnership cost-shared program and the new COVID-19 programs.

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 to facilitate decision making and priority setting, and to contribute to more effective delivery and efficient use of resources.

In today’s environment, uncertainties brought on by the COVID-19 pandemic have required unprecedented measures, programs, and some reprioritization of activities to mitigate related impacts on the sector and the Department. Over the course of the third quarter, the second wave of the pandemic hit, providing further evidence that this context, its risks and impact on AAFC’s operating environment would be longer lasting than originally perceived. As a result, AAFC is presently leveraging this perspective to inform planning in the context of longer pandemic impacts.

In addition, providing support to employees and managers who are dealing with pay issues continues to be a priority for Agriculture and Agri-Food Canada.

The Department actively monitors the pay impacts and corresponding salary payment adjustments that result from activities undertaken to resolve these issues.

Significant changes in relation to operations, personnel, and programs

Personnel

On October 19, 2020 Vidya ShankarNarayan was appointed as the Chief Information Officer and Assistant Deputy Minister of the Information Systems Branch.

Programs

The following announcements of new programs or changes to existing programs were in response to the effects of the COVID-19 pandemic on the Canadian agriculture sector:

The following are announcements of new programs or changes to existing programs which were not in response to COVID:

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, 2020
(in thousands of dollars)
Fiscal year 2020-2021 [1] Fiscal year 2019-2020 [1]
Total authorities for the year ending March 31, 2021 (2) Used during the quarter ended December 31, 2020 Year to date used at quarter-end Total authorities for the year ending March 31, 2020 Used during the quarter ended December 31, 2019 Year to date used at quarter-end
Vote 1 – Net operating expenditures $589,509 $144,699 $403,184 $611,895 $149,051 $409,219
Vote 5 – Capital expenditures 52,567 10,181 18,982 50,645 11,200 17,104
Vote 10 – Grants and contributions 600,936 83,554 159,854 419,735 80,735 166,510
Vote 15 – A Food Policy for Canada - - - 17,486 - -
Budgetary statutory authorities[2] 2,246,775 513,150 851,289 1,827,908 743,311 925,884
Total budgetary authorities 3,489,787 751,584 1,433,309 2,927,669 984,297 1,518,717
Total authorities $3,489,787 $751,584 $1,433,309 $2,927,669 $984,297 $1,518,717

Notes
1. Totals may not add up due to rounding.

2. Details on budgetary statutory authorities are included in Appendix A.

Departmental budgetary expenditures by Standard Object (unaudited)
For the quarter ended December 31, 2020

(In thousands of dollars)
Fiscal year 2020-2021 [1] Fiscal year 2019-2020 [1]
Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended December 31, 2020 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended December 31, 2019 Year to date used at quarter-end
Expenditures:
Personnel $532,737 $126,389 $384,296 $531,683 $134,974 $385,864
Transportation and communications 11,406 568 1,328 15,075 3,453 9,445
Information 7,453 2,169 4,624 6,817 1,891 4,294
Professional and special services 91,005 26,562 59,768 101,631 24,406 57,934
Rentals 5,720 1,643 5,118 6,735 1,323 5,011
Repair and maintenance 13,381 2,912 5,939 13,243 3,933 7,521
Utilities, materials and supplies 33,782 7,396 15,754 41,902 7,227 18,721
Acquisition of land, buildings and works 23,872 4,303 6,739 27,379 1,135 1,614
Acquisition of machinery and equipment 46,575 6,684 11,186 38,553 8,892 15,885
Transfer payments 2,775,070 578,981 959,175 2,170,369 512,593 746,024
Other subsidies and payments 6,473 3,181 8,925 26,791 299,459 305,077
Total gross budgetary expenditures 3,547,474 760,788 1,462,852 2,980,176 999,286 1,557,390
Less revenues netted against expenditures
Vote-netted revenues 57,687 9,204 29,543 52,507 14,990 38,673
Total revenues netted against expenditures 57,687 9,204 29,543 52,507 14,990 38,673
Total net budgetary expenditures $3,489,787 $751,584 $1,433,309 $2,927,669 $984,296 $1,518,717

Note:
1. Totals may not add up due to rounding.

Appendix A

Budgetary Statutory Authorities Breakdown (unaudited)
For the quarter ended December 31, 2020
(in thousands of dollars)
Fiscal year 2020-2021 [1] Fiscal year 2019-2020 [1]
Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended December 31, 2020 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended December 31, 2019 Year to date used at quarter-end
Contributions to employee benefit plans $65,215 $16,304 $48,912 $ 65,685 $16,360 $49,081
Minister of Agriculture and Agri-Food - Salary and motor car allowance 89 22 67 88 22 66
Contribution payments for the AgriStability program 384,830 5,158 (7,547) 384,830 (1,734) (22,934)
Contribution payments for the AgriInsurance program 623,000 352,269 392,595 623,000 392,509 461,843
Grant payments for the AgriInvest program 122,910 43,639 108,431 122,910 29,981 111,915
Payments in connection with the Agricultural Marketing Programs Act 90,300 4,710 13,185 87,300 7,019 25,120
Grant payments for the AgriStability program 39,320 1,725 3,163 39,320 (207) (299)
Contribution payments for the AgriInvest program 16,550 5,268 19,300 16,550 4,293 15,709
Loan guarantees under the Canadian Agricultural Loans Act 13,111 - (76) 13,111 - 754
Contributions in support of the Assistance to the Pork Industry Initiative - - (11,560) - - (12,550)
Grants to agencies established under the Farm Products Agencies Act 100 - - 100 - -
Contribution payments for the Agricultural Disaster Relief Program (ADRP)/AgriRecovery 118,513 2,209 2,209 118,513 - -
Canadian Pari-Mutuel Agency Revolving Fund  - 334 509 - 344 (174)
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 7,336 1,039 2,456 11,501 1,481 4,152
Refunds of amounts credited to revenues in previous years  - 23 24 - - -
Class grant payments for the Farm Income program  -  -  -  - 293,246 293,246
Grant payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative - (1) (7) - (2) (17)
Contribution payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative - (1) (7) - - (26)
Grants in support of the Grain and Oilseed Payment program  -  -  - - (1) (1)
Grant Payments Related to the Dairy Direct Payment Program 468,000 - - 345,000 - -
Contribution payments for the Local Food Infrastructure Program 125,000 49,436 125,000 - - -
Contribution payments for the Mandatory Isolation Support for Temporary Foreign Worker program 48,950 14,196 35,827 - - -
Contribution payments for the Mandatory Isolation Support for Temporary Foreign Worker program - Cost Shared 1,050 - 1,048 - - -
Contribution payments for the Emergency Processing Fund program 62,500 10,851 62,500 - - -
Contribution payments for the Surplus Food Purchase program 50,000 (750) 48,543 - - -
Contributions in support of the On Farm Support Program 5,000 5,000 5,000 - - -
Contribution Payments in Support of the Youth Skills and Employment Program 5,000 1,718 1,718 - - -
Budgetary statutory authorities $2,246,775 $513,150 $851,289 $1,827,908 $743,311 $925,884
Note
1. Totals may not add due to rounding.
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