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Quarterly Financial Report For the Quarter Ended September 30, 2020

Agriculture and Agri-Food Canada - Quarterly Financial Report for the quarter ended September 30, 2020 (PDF Version, 902 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 2020-2021 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 (approved up to September 30, 2020) as well as the Supplementary Estimates A, and the 2019-2020 Operating and Capital Budget Carry Forward 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 September 30, 2020.

The following table provides a comparison of total authorities available for use and year-to-date expenditures for the second 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 September 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 2,676 2,549
Total year-to-date expenditures 682 534
Utilization 25% 21%

A. Significant changes to authorities

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

Comparison of total authorities as of September 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 450 601 (151)
Vote 5 – Capital authorities 43 51 (8)
Vote 10 – Grants and contributions 431 420 11
Vote 15 – A Food Policy for Canada - 17 (17)
Statutory authorities 1,752 1,460 292
Total authorities 2,676 2,549 126

Note: Totals may not add up due to rounding.

Total authorities in fiscal year 2020-2021 were $2,676 million at the end of the second quarter, as compared to $2,549 million at the end of the second quarter of 2019-2020, which represents an increase of $126 million or 5%.

Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study Supply, the standing orders of the House of Commons were amended to extend the study period into the Fall. This resulted in a reduced Supply (9/12ths for Vote 1 operating and Vote 5 capital authorities, and 11/12ths for Vote 10 grants and contributions) for the Main Estimates, which caused a decrease of $194 million in authorities available for use. Agriculture and Agri-Food Canada is expected to receive Full Supply in December 2020.

The $126 million or 5% increase in authorities available for use is attributable to the following:

This increase is partially offset by the following :

B. Significant changes in year-to-date expenditures

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

Comparison of year-to-date expenditures for the quarter ended September 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 258 260 (2)
Vote 5 – Capital expenditures 9 6 3
Vote 10 – Grants and contributions 76 86 (9)
Vote 15 – A Food Policy for Canada - - -
Statutory expenditures 338 183 156
Total year-to-date expenditures 682 534 147

Note: Totals may not add up due to rounding.

At the end of the second quarter of 2020-2021, total expenditures were $682 million, compared to $534 million reported for the same period in 2019-2020, representing an increase of $147 million or 28%.

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 totaling $447 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 September 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 September 30, 2020 Year to date used at quarter-end Total authorities for the year ending March 31, 2020 Used during the quarter ended September 30, 2019 Year to date used at quarter-end
Vote 1 - Net Operating expenditures $449,856 $126,249 $258,485 $600,847 $107,197 $260,168
Vote 5 - Capital expenditures 42,555 6,818 8,801 50,645 4,465 5,904
Vote 10 - Grants and contributions 430,737 54,796 76,299 419,735 47,238 85,775
Vote 15 - A Food Policy for Canada - - - 17,486 - -
Budgetary statutory authorities (3) 1,752,401 210,167 338,139 1,460,452 131,514 182,573
Total Budgetary authorities 2,675,550 398,031 681,725 2,549,165 290,413 534,421
Total authorities $2,675,550 $398,031 $681,725 $2,549,165 $290,413 $534,421

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 2.

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

Departmental budgetary expenditures by Standard Object (unaudited)
For the quarter ended September 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 September 30, 2020 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended September 30, 2019 Year to date used at quarter-end
Expenditures:
Personnel $422,575 $129,564 $257,907 $520,634 $128,094 $250,890
Transportation and communications 8,769 475 760 15,075 3,487 5,992
Information 5,740 1,868 2,455 6,817 1,019 2,403
Professional and special services 73,033 21,301 33,206 101,631 20,974 33,528
Rentals 4,405 943 3,475 6,735 1,099 3,688
Repair and maintenance 10,826 2,214 3,027 13,243 2,198 3,588
Utilities, materials and supplies 26,175 4,702 8,358 40,846 6,316 11,494
Acquisition of land, buildings and works 17,881 2,215 2,436 27,379 383 479
Acquisition of machinery and equipment 34,940 3,416 4,502 38,553 4,414 6,993
Transfer payments 2,111,876 247,445 380,194 1,803,969 160,805 233,431
Other subsidies and payments 4,942 1,134 5,744 26,791 (25,892) 5,618
Total gross budgetary expenditures 2,721,158 415,277 702,064 2,601,672 302,897 558,104
Less Revenues netted against expenditures:
Vote-netted revenues 45,612 17,246 20,339 52,507 12,484 23,683
Total Revenues netted against expenditures 45,612 17,246 20,339 52,507 12,484 23,683
Total net budgetary expenditures $2,675,545 $398,031 $681,725 $2,549,165 $290,413 $534,421

Note:

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

(2) Planned expenditures have been adjusted to reflect a reduced Supply received as of Q2.

Appendix A

Budgetary Statutory Authorities Breakdown (unaudited)
For the quarter ended September 30, 2020
(in thousands of dollars)
Fiscal year 2020-2022 [1] Fiscal year 2019-2020 [1]
Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended September 30, 2020 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2020 Expended during the quarter ended September 30, 2019 Year to date used at quarter-end
Contributions to employee benefit plans $65,215 $16,304 $32,608 $65,685 $16,360 $32,720
Minister of Agriculture and Agri-Food - Salary and motor car allowance 89 22 45 88 22 44
Contribution payments for the AgriStability program 384,830 (6,714) (12,705) 384,830 (16,067) (21,200)
Contribution payments for the AgriInsurance program 623,000 32,993 40,326 623,000 54,517 69,334
Grant payments for the AgriInvest program 122,910 44,459 64,793 122,910 49,712 81,934
Payments in connection with the Agricultural Marketing  Programs Act 90,300 7,022 8,474 65,900 13,526 18,101
Grant payments for the AgriStability program 39,320 1,146 1,438 39,320 (106) (92)
Contribution payments for the AgriInvest program 16,550 10,698 14,032 16,550 11,268 11,416
Loan guarantees under the Canadian Agricultural Loans Act 13,111 - (76) 13,111 745 754
Contributions in support of the Assistance to the Pork Industry Initiative - (6,528) (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 - - 118,513 - -
Canadian Pari-Mutuel Agency Revolving Fund - 230 174 - 25 (519)
Refunds of amounts credited to revenues in previous years - - 1 - - -
Spending of amounts equivalent to proceeds from disposal of surplus moveable Crown assets 5,958 962 1,417 10,446 1,540 2,672
Grant payments for the Canadian Agricultural Income Stabilization Program Inventory Transition Initiative - (4) (6)  - (11) (15)
Contribution payments for the Canadian Agricultural Income Stabilization Program Inventory Transition Initiative - - (6) - (17) (26)
Contribution payments for the Local Food Infrastructure Program 75,000 5,164 75,564 - - -
Contribution payments for the Mandatory Isolation Support for Temporary Foreign Workers Program - Federal 48,950 21,423 21,631 - - -
Contribution payments for the Mandatory Isolation Support for Temporary Foreign Workers Program – Cost Shared 1,050 1,048 1,048 - - -
Contribution payments for the Emergency Processing Fund Program 62,500 32,649 51,649 - - -
Contribution payments related to the Surplus Food Purchase Program 50,000 49,293 49,293 - - -
Contributions in support of the Emergency On Farm Support Fund 35,004 - - - - -
Budgetary statutory authorities $1,752,401 $210,167 $ 338,139 $ 1,460,453 $131,514 $182,573

Note:

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

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