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Quarterly Financial Report for the quarter ended June 30, 2020

Agriculture and Agri-Food Canada - Quarterly Financial Report for the quarter ended June 30, 2020 (PDF Version, 851 KB)

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 2020-21 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 2020-21 Main Estimates (approved up to June 30, 2020) as well as the Supplementary Estimates A for 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 June 30, 2020.

The following table provides a comparison of total authorities available for use and year-to-date expenditures for the first 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 June 30 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 2,605 2,512
Total year-to-date expenditures 284 244
Utilization 11% 10%

A. Significant changes to authorities

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

Comparison of total authorities as of June 30 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 425 575 (149)
Vote 5 – Capital authorities 30 41 (11)
Vote 10 – Grants and contributions 431 420 11
Vote 15 – A Food Policy for Canada - 17 (17)
Statutory authorities 1,719 1,459 260
Total authorities 2,605 2,512 93

Note: Totals may not add up due to rounding.

Total authorities in fiscal year 2020-2021 were $2,605 million at the end of the first quarter, as compared to $2,512 million at the end of the first quarter of 2019-2020, which represents an increase of $93 million or 4%. This increase is primarily attributable to the following:

This increase is partially offset by the following decreases:

B. Significant changes in year-to-date expenditures

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

Comparison of year-to-date expenditures for the quarter ended June 30 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 132 153 (21)
Vote 5 – Capital expenditures 2 1 1
Vote 10 – Grants and contributions 22 39 (17)
Vote 15 – A Food Policy for Canada - - -
Statutory expenditures 128 51 77
Total year-to-date expenditures 284 244 40

Note: Totals may not add up due to rounding.

At the end of the first quarter of 2020-2021, total expenditures were $284 million, compared to $244 million reported for the same period in 2019-2020, representing an increase of $40 million or 16%. This increase is primarily attributable to the following increases:

This increase is partially offset by the following decreases:

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.

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

Programs

The following announcements of new or changes to existing programs totalling $412 million were in response to the effects of the COVID-19 pandemic on the Canadian agriculture sector:

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 June 30, 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 June 30, 2020 Year to date used at quarter-end Total authorities for the year ending March 31, 2020 Used during the quarter ended June 30, 2019 Year to date used at quarter-end
Vote 1 - Net Operating expenditures $425,372 $132,236 $132,236 $574,688 $152,972 $152,972
Vote 5 - Capital expenditures 29,948 1,983 1,983 40,505 1,440 1,440
Vote 10 - Grants and contributions 430,737 21,503 21,503 419,735 38,537 38,537
Vote 15 - A Food Policy for Canada - - - 17,486 - -
Budgetary statutory authorities (3) 1,719,152 127,972 127,972 1,459,369 51,059 51,059
Total Budgetary authorities 2,605,208 283,694 283,694 2,511,784 244,008 244,008
Total authorities $2,605,208 $283,694 $283,694 $2,511,784 $244,008 $244,008

Notes:

(1) Totals may not add up due to rounding.

(2) Includes only authorities granted by Parliament at quarter-end. Agriculture and Agri-Food Canada has received a reduced supply as of 2020-2021 Quarter 1.

(3) Details on budgetary statutory authorities are included in Appendix A.

Departmental budgetary expenditures by Standard Object (unaudited)
For the quarter ended June 30, 2020

(In thousands of dollars)
Fiscal year 2020-2021 [1] Fiscal year 2019-2020 [1]
Planned expenditures for the year ending March 31, 2021 (2) Expended during the quarter ended June 30, 2020 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended June 30, 2019 Year to date used at quarter-end
Expenditures:
Personnel $399,439 $128,343 $128,343 $496,580 $122,796 $122,796
Transportation and communications 8,664 285 285 14,865 2,505 2,505
Information 5,671 587 587 6,720 1,384 1,384
Professional and special services 62,233 11,905 11,905 92,269 12,554 12,554
Rentals 4,353 2,532 2,532 6,642 2,589 2,589
Repair and maintenance 8,203 813 813 11,058 1,390 1,390
Utilities, materials and supplies 27,682 3,656 3,656 39,576 5,178 5,178
Acquisition of land, buildings and works 17,881 221 221 27,379 96 96
Acquisition of machinery and equipment 34,940 1,086 1,086 38,553 2,579 2,579
Transfer payments 2,076,871 132,749 132,749 1,803,969 72,626 72,626
Other subsidies and payments 4,881 4,610 4,610 26,680 31,510 31,510
Total gross budgetary expenditures 2,650,821 286,787 286,787 2,564,291 255,207 255,207
Less Revenues netted against expenditures:
Vote-netted revenues 45,612 3,093 3,093 52,507 11,199 11,199
Total Revenues netted against expenditures 45,612 3,093 3,093 52,507 11,199 11,199
Total net budgetary expenditures $2,605,208 $283,694 $283,694 $2,511,784 $244,008 $244,008

Note:
(1) Totals may not add up due to rounding.
(2) Planned expenditures have been adjusted to reflect a reduced supply received as of Q1.

Appendix A

Budgetary Statutory Authorities Breakdown (unaudited)
For the quarter ended June 30, 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 June 30, 2020 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended June 30, 2019 Year to date used at quarter-end
Contributions to employee benefit plans $65,215 $16,304 $16,304 $65,441 $16,360 $16,360
Minister of Agriculture and Agri-Food - Salary and motor car allowance 89 22 22 88 22 22
Contribution payments for the AgriStability program 384,830 (5,991) (5,991) 384,830 (5,132) (5,132)
Contribution payments for the AgriInsurance program 623,000 7,333 7,333 623,000 14,817 14,817
Grant payments for the AgriInvest program 122,910 20,334 20,334 122,910 32,221 32,221
Payments in connection with the Agricultural Marketing  Programs Act 90,300 1,453 1,453 65,900 4,575 4,575
Grant payments for the AgriStability program 39,320 292 292 39,320 15 15
Contribution payments for the AgriInvest program 16,550 3,333 3,333 16,550 148 148
Loan guarantees under the Canadian Agricultural Loans Act 13,111 (76) (76) 13,111 9 9
Contributions in support of the Assistance to the Pork Industry Initiative - (5,033) (5,033) - (12,550) (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 - - 118,513 - -
Canadian Pari-Mutuel Agency Revolving Fund - (56) (56) - (544) (544)
Refunds of amounts credited to revenues in previous years - 1 1 - - -
Spending of amounts equivalent to proceeds from disposal of surplus moveable Crown assets 7,713 455 455 9,606 1,132 1,132
Grant payments for the Canadian Agricultural Income Stabilization Program Inventory Transition Initiative - (2) (2) - (5) (5)
Contribution payments for the Canadian Agricultural Income Stabilization Program Inventory Transition Initiative - (6) (6) - (9) (9)
Contribution payments for the Local Food Infrastructure Program 75,000 70,400 70,400 - - -
Contribution payments for the Mandatory Isolation Support for Temporary Foreign Workers Program 50,000 208 208 - - -
Contribution payments for the Emergency Processing Fund Program 62,500 19,000 19,000 - - -
Contribution payments related to the Surplus Food Purchase Program 50,000 - - - - -
Budgetary statutory authorities $1,719,152 $127,972 $127,972 $1,459,369  $51,059 $51,059

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

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