Department of Finance Canada Quarterly Financial Report for the quarter ended December 31, 2024 (unaudited)
Table of contents
- 1. Introduction
- 1.1 Authority, Mandate and Program Activities
- 1.2 Basis of Presentation
- 1.3 Department of Finance Canada – Financial Structure
- 2. Highlights of Fiscal Quarter Results
- 2.1 Statement of Authorities
- 2.2 Statement of Departmental Budgetary Expenditures by Standard Object
- 2.3 Non-Budgetary Expenditures
- 3. Risks and Uncertainties
- 4. Significant Changes in Relation to Operations, Personnel and Programs
- 5. Approval by Senior Officials
- 6. Appendix
1. Introduction
This Quarterly Financial Report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Reports. This Quarterly Financial Report should be read in conjunction with the 2024-25 Main Estimates and Supplementary Estimates of the Department of Finance Canada.
This Quarterly Financial Report has not been subject to an external audit or review.
1.1 Authority, Mandate and Program Activities
The Department of Finance Canada (the Department) helps the Government of Canada (the government) develop and implement strong and sustainable economic, fiscal, tax, social, security, international and financial sector policies and programs. It plays an important central agency role, working with other departments to ensure that the government's agenda is carried out and that ministers are supported with high-quality analysis and advice.
The Department's responsibilities include the following:
- Preparing the federal budget and updates of economic and fiscal projections;
- Preparing the Public Accounts of Canada, in cooperation with the Treasury Board of Canada Secretariat and the Receiver General for Canada;
- Developing tax and tariff policy and legislation;
- Managing federal borrowing on financial markets;
- Designing and administering major transfers of federal funds to the provinces and territories;
- Developing financial sector policy and legislation; and
- Representing Canada in various international financial institutions and groups.
The description of the program activities for the Department can be found in Part II of the Main Estimates and the Departmental Plan.
1.2 Basis of Presentation
This Quarterly Financial Report has been prepared by management using an expenditure basis of accounting, and a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. 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 for both fiscal years (2023-24 and 2024-25) as well as transfers from Treasury Board central votes that are approved by the end of the quarter.
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 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.
1.3 Department of Finance Canada – Financial Structure
The Department has three major categories of expenditure authority. These categories are:
- Voted budgetary authorities: Included in this category are the operational expenditures of the Department itself as well as authorized expenditures under grant and contribution programs. These expenditures must be specifically approved by Parliament through an appropriation act.
- Statutory budgetary authorities: Included in this category are expenditure authorities that are granted through an existing Act of Parliament. Further parliamentary approval is not required for expenditures related to statutory amounts and it is within the normal course of business that statutory expenditures may in some cases exceed planned spending estimates.
- Non-budgetary authorities: Included in this category are disbursements made by the Department that do not have a direct budgetary impact on the government. This includes the value of loans initially disbursed to Crown corporations participating in the Crown Borrowing Program.
2. Highlights of Fiscal Quarter Results
The following section highlights the financial results and provides explanations for the fiscal quarter ended December 31, 2024 as compared to the same period last year.
| 2024-25 Authorities as at December 31, 2024 | 2023-24 Authorities as at December 31, 2023 | Variance in Authorities | Expenditures during the quarter ended December 31, 2024 | Expenditures during the quarter ended December 31, 2023 | Variance in Expenditures | |
|---|---|---|---|---|---|---|
| Budgetary Authorities | ||||||
| Vote 1 - Program Expenditures | 150,417 | 428,751 | (278,334) | 33,046 | 316,716 | (283,670) |
| Statutory Authorities | ||||||
| Major transfers to other levels of government | 92,155,664 | 89,682,756 | 2,472,908 | 23,205,436 | 22,185,232 | 1,020,204 |
| Interest on Unmatured Debt and Interest on Other Liabilities | 48,408,000 | 38,550,000 | 9,858,000 | 11,521,478 | 10,799,596 | 721,882 |
| Direct program expenses | 4,253,259 | 3,559,653 | 693,606 | 1,200,293 | 675,784 | 524,509 |
| Total Statutory Authorities | 144,816,923 | 131,792,409 | 13,024,514 | 35,927,207 | 33,660,612 | 2,266,595 |
| Total Budgetary Authorities | 144,967,340 | 132,221,160 | 12,746,180 | 35,960,253 | 33,977,328 | 1,982,925 |
| Non-Budgetary Authorities | 1,933,410 | - | 1,933,410 | 28,305,026 | 16,025,359 | 12,279,667 |
| Total Authorities | 146,900,750 | 132,221,160 | 14,679,590 | 64,265,279 | 50,002,687 | 14,262,592 |
2.1 Statement of Authorities
As per Table 1 – Statement of Authorities (unaudited), the total authorities available for use increased by $14,680 million, as compared to the same quarter in 2023-24, from $132,221 million to $146,901 million.
The following table provides a detailed explanation of the significant changes in the authorities available for use:
| 2024-25 compared to 2023-24 | Change |
|---|---|
| Budgetary Authorities | |
| Vote 1 - Program Expenditures | |
| Decrease in program expenditures largely due to funding provided in the previous year for the nonrecurring conditional transfer of the Hibernia Net Profits Interest and Incidental Net Profits Interest Revenues to Newfoundland and Labrador ($280.2 million) and sunsetting funding for analytical capacity building ($2.5 million). These decreases were partially offset by new capacity funding to implement a range of initiatives to support new and ongoing priorities such as the decarbonization, clean growth and Indigenous economic participation efforts ($1.7 million), improving the ability to address aggressive tax planning schemes ($1.6 million) and advancing the development of a sustainable finance taxonomy that is aligned with reaching net-zero by 2050 ($1.3 million). | (278,334) |
| Sub-total Vote 1 - Program Expenditures | (278,334) |
| Statutory Authorities | |
| Increase in major transfers to other levels of government largely due to payments related to legislated increases in the Canada Health Transfer ($2.7 billion), Fiscal Equalization ($1.3 billion), Canada Social Transfer ($492.5 million), and Territorial Formula Financing ($324.5 million). These increases were partially offset by payments in the previous year in relation to the Canada Health Transfer ($2 billion). | 2,472,908 |
| Increase in direct program expenses mostly due to an increase in authorities related to planned payments to the Canada Infrastructure Bank ($698.4 million), offset by a decrease in the purchase of domestic coinage ($5 million). | 693,606 |
| Increase in interest on unmatured debt ($9 billion) reflecting changes in interest rates and borrowing requirements, and increase in interest on other liabilities ($813 million) due to updated modelling, including revised interest rate assumptions of certain other specified purpose accounts and on superannuation accounts. | 9,858,000 |
| Sub-total Statutory Authorities | 13,024,514 |
| Total Budgetary Authorities | 12,746,180 |
| Non-Budgetary Authorities | |
| Increase in non-budgetary authorities due to a loan to the International Monetary Fund's (IMF) Poverty Reduction and Growth Trust ($1.3 billion), financial assistance to Ukraine through IMF administered accounts ($400 million) and investment in Hybrid Capital issued by the International Bank for Reconstruction and Development ($276 million). | 1,933,410 |
| Total Non-Budgetary Authorities | 1,933,410 |
| Total Authorities | 14,679,590 |
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
As per Table 2 – Departmental budgetary expenditures by Standard Object (unaudited), the total net budgetary expenditures in the third quarter of 2024-25 increased by $1,982.9 million, as compared to the same quarter in 2023-24 largely due to the following:
- Expenditures related to Transfer payments increased by $739.9 million, primarily due to increases in major transfer payments to the provinces and territories ($1,176.8 million). This increase is partially offset by the ($233.2 million)Footnote 1 net reduction in other transfer payments made to Newfoundland and Labrador in 2024-25 compared with the same quarter of 2023-24, and increased recoveries for the Alternative Payments for Standing Programs ($216.4 million).
- Expenditures related to Public debt charges increased by $721.9 million, primarily due to an increase in interest rates and an increase in the stock of debt of approximately $106 billion over the same quarter of the previous year. This increase is partially offset by lower average effective interest rates and lower Consumer Price Index adjustments on Real Return Bonds.
- Expenditures related to Other subsidies and payments increased by $524.6 million, primarily due to payments to the Canada Infrastructure Bank due to heightened demands compared to the previous year ($698.3 million) and unclaimed cheques ($4.3 million). These increases were partially offset by losses in the revaluation of International Monetary Fund (IMF) related accounts ($159 million) and foreign exchange on sovereign loans ($18.8 million) over the previous year.
2.3 Non-Budgetary Expenditures
Total net non-budgetary expenditures in the third quarter of 2024-25 increased by $12,279.7 million, as compared to the same quarter in 2023-24. This is primarily due to payments made to the Bank of Canada for the purchase of Canada Mortgage Bonds ($6,956 million), increase in the value of loans disbursed to Crown corporations participating in the Crown Borrowing Program ($3,033.5 million), along with payments for the acquisition of shares in the Canada Growth Fund ($1,910 million) and financial assistance provided to Ukraine through the IMF Administered Account ($400 million). These increases offset a decrease in payments to the IMF Poverty Reduction and Growth Trust ($167 million).
3. Risks and Uncertainties
The most significant risk in the third quarter of 2024-25 continued to be interest rate risk on the Public debt - the risk that future cash flows of the Public debt will fluctuate because of changes in market interest rates. Expenditures related to Public debt charges increased by $721.9 million over the same quarter last year. To help mitigate interest rate risk, the Department's Debt Management Strategy, developed in consultation with market participants, sets out a prudent approach to Public debt management that ensures a balanced debt structure. Interest rate risk and other financial risks are discussed further in the notes to the Department of Finance Canada's Annual Financial Statements.
The Department has also established a risk-based system of internal controls, with a focus on financial risks and the prudent use of public resources. Following the 2023-24 implementation of its updated Internal Control Framework, the Department initiated enhanced monitoring of its financial management and reporting controls. The efficiency and effectiveness of internal controls for managing risks inherent in financial reporting are being assessed and, as of December 31, 2024, no control weaknesses have been identified.
The Department also remained vigilant in preparing for risks, situations, and external events impacting its operating environment. In 2024-25, a review of business continuity plans was initiated. This has led to the development of an updated Business Continuity Plan, now in the final stages of approval, and Business Impact Analysis. This work is aimed at ensuring the Department has an effective security posture and can remain resilient in the face of potential disruptions. The Department also continued to monitor changes to domestic and global economic and social conditions that may have an impact on its work through ongoing cooperation, engagement, and sharing of expertise and best practices with other federal departments and agencies, provincial and territorial governments, as well as stakeholders and international counterparts. These strategies enable the Department, as a central agency, a policy department, and a knowledge-based organization, to mitigate adverse impacts on the government's capacity to advance Canada's domestic and international fiscal, economic, and social policy interests.
4. Significant Changes in Relation to Operations, Personnel and Programs
There are no significant changes to report.
5. Approval by Senior Officials
Approved by:
Chris Forbes, Deputy Minister
Ottawa, Canada
February 26, 2025
Christopher Veilleux CPA, CMA, PMP
Chief Financial Officer
Ottawa, Canada
February 26, 2025
| Fiscal year 2024 - 2025 | Fiscal year 2023 - 2024 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2025* |
Used during the quarter ended December 31, 2024 |
Year to date used at quarter-end |
Total available for use for the year ending March 31, 2024* |
Used during the quarter ended December 31, 2023 |
Year to date used at quarter-end |
|
| Budgetary Authorities | ||||||
| Voted authorities | ||||||
Program expenditures |
150,417 | 33,046 | 104,520 | 428,751 | 316,716 | 382,508 |
| Total voted authorities | 150,417 | 33,046 | 104,520 | 428,751 | 316,716 | 382,508 |
| Statutory authorities | ||||||
| Major transfers to other levels of government | ||||||
Canada Health Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) |
52,080,686 | 13,020,172 | 39,060,515 | 49,420,572 | 12,355,143 | 37,065,429 |
Canada Social Transfer (Part V.1 - Federal-Provincial Fiscal Arrangements Act) |
16,908,791 | 4,227,198 | 12,681,593 | 16,416,302 | 4,104,076 | 12,312,227 |
Payments related to Canada Health Transfer (Sections 24.73 and 24.74 - Federal-Provincial Fiscal Arrangements Act) |
- | - | - | 2,000,000 | - | 2,000,000 |
| Fiscal arrangements | ||||||
Fiscal Equalization (Part I - Federal-Provincial Fiscal Arrangements Act) |
25,252,833 | 6,313,208 | 18,939,625 | 23,963,000 | 5,990,750 | 17,972,250 |
Territorial Financing (Part I.1 - Federal-Provincial Fiscal Arrangements Act) |
5,158,965 | 1,052,429 | 4,106,536 | 4,834,418 | 986,222 | 3,848,197 |
Statutory Subsidies (Constitution Acts, 1867-1982, and Other Statutory Authorities) |
44,586 | 1,237 | 23,699 | 42,639 | 1,237 | 22,557 |
Youth Allowances Recovery (Federal-Provincial Fiscal Revision Act, 1964) |
(1,354,548) | - | (677,274) | (1,293,513) | - | (646,757) |
| Other major transfers | ||||||
Fiscal Stabilization (Part II - Federal-Provincial Fiscal Arrangements Act) |
- | - | - | - | - | 576,511 |
Alternative Payments for Standing Programs (Part VI - Federal-Provincial Fiscal Arrangements Act) |
(6,132,509) | (1,593,712) | (4,659,967) | (5,857,512) | (1,377,292) | (4,306,048) |
Payment to Newfoundland and Labrador related to the Hibernia Dividend Backed Annuity Agreement (Section 200 - Budget Implementation Act, 2021, No.1) |
196,860 | 184,904 | 184,904 | 156,850 | 137,973 | 137,973 |
Payment to the Province of British Columbia pursuant to paragraph 60.2(2)b of the Financial Administration Act to clean up orphan and inactive oil and gas wells |
- | - | - | - | (12,877) | (12,877) |
| Total major transfers to other levels of government | 92,155,664 | 23,205,436 | 69,659,631 | 89,682,756 | 22,185,232 | 68,969,462 |
| Interest on Unmatured Debt and Interest on Other Liabilities | ||||||
Interest on Unmatured Debt |
42,721,000 | 10,100,833 | 32,474,179 | 33,676,000 | 9,296,450 | 26,768,178 |
Other Interest Costs |
5,687,000 | 1,420,645 | 4,415,684 | 4,874,000 | 1,503,146 | 4,542,034 |
| Total Interest on Unmatured Debt and Interest on Other Liabilities | 48,408,000 | 11,521,478 | 36,889,863 | 38,550,000 | 10,799,596 | 31,310,212 |
| Direct program expenses | ||||||
Operating expenses |
||||||
Purchase of Domestic Coinage |
78,000 | 21,867 | 63,275 | 83,000 | 22,406 | 62,004 |
Contributions to Employee Benefit Plans |
16,990 | 3,890 | 11,671 | 16,505 | 3,987 | 11,961 |
Deputy Prime Minister and Minister of Finance – Salary and motor car allowance (Salaries Act and Parliament of Canada Act) |
99 | 26 | 75 | 95 | 25 | 72 |
Minister of Tourism and Associate Minister of Finance – Motor car allowance |
- | - | - | 2 | - | - |
Transfer payments |
||||||
Payments to the International Development Association (Bretton Woods and Related Agreements Act) |
486,916 | - | - | 486,916 | - | - |
Debt payments on behalf of poor countries to International Organizations pursuant to section 18(1) of the Economic Recovery Act |
51,535 | - | - | 51,823 | - | - |
Payments of any amount that is required for the purpose of providing financial assistance, pursuant to section 8.3 of the Bretton Woods and Related Agreements Act |
- | 27 | 55 | - | 208 | 208 |
Grant Contribution to the IMF's Poverty Reduction and Growth Trust (Bretton Woods and Related Agreements Act, Section 8.1(2)) |
- | - | - | - | - | 57,000 |
Other |
||||||
Losses on Foreign Exchange |
- | (146,207) | 4,391 | - | 31,080 | 92,359 |
Payment of Liabilities Previously Recorded as Revenue |
- | 4,358 | 17,195 | - | 26 | 8,085 |
Payments to the Canada Infrastructure Bank (Canada Infrastructure Bank Act) |
3,619,719 | 1,316,332 | 2,353,495 | 2,921,312 | 618,051 | 1,177,761 |
Payment to the Bank of Canada pursuant to section 60.2 of the Financial Administration Act |
- | - | - | - | 1 | 1 |
| Total direct program expenses | 4,253,259 | 1,200,293 | 2,450,157 | 3,559,653 | 675,784 | 1,409,451 |
| Total statutory authorities | 144,816,923 | 35,927,207 | 108,999,651 | 131,792,409 | 33,660,612 | 101,689,125 |
| Total budgetary authorities | 144,967,340 | 35,960,253 | 109,104,171 | 132,221,160 | 33,977,328 | 102,071,633 |
| Non-budgetary authorities | ||||||
Advances to Crown corporations (Gross) |
- | 18,490,215 | 54,918,424 | - | 15,456,690 | 49,310,295 |
Advances pursuant to section 13(1) of the Financial Consumer Agency of Canada Act (Gross) |
- | - | 22,000 | - | - | 20,000 |
Payments under Bretton Woods and Related Agreements Act - International Organizations (Gross) |
- | 213,613 | 275,849 | - | 278,669 | 560,310 |
Financial Assistance to Ukraine through IMF Administered Account (Bretton Woods and Related Agreements Act, Section 8.3) |
400,000 | 400,000 | 400,000 | - | - | - |
Payment for the acquisition of shares in the Canada Growth Fund pursuant to the Fall Economic Statement Implementation Act, 2022 |
- | 2,200,000 | 3,000,000 | - | 290,000 | 290,000 |
Loan to the International Monetary Fund's Poverty Reduction and Growth Trust (Bretton Woods and Related Agreements Act, Section 8.1(1)) |
1,257,410 | 45,239 | 1,299,446 | - | - | - |
Payment to the Bank of Canada to purchase Canada Mortgage Bonds pursuant to paragraph 46(a) of the Financial Administration Act. |
- | 6,955,959 | 21,593,841 | - | - | - |
Advances pursuant to section 50.1(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Gross) |
- | - | 4,000 | - | - | - |
Investment in Hybrid Capital issued by the International Bank for Reconstruction and Development (Bretton Woods and Related Agreements Act, Section 8) |
276,000 | - | - | - | - | - |
| Total non-budgetary authorities | 1,933,410 | 28,305,026 | 81,513,560 | - | 16,025,359 | 50,180,605 |
| Total authorities | 146,900,750 | 64,265,279 | 190,617,731 | 132,221,160 | 50,002,687 | 152,252,238 |
|
* Includes only Authorities available for use and granted by Parliament at quarter-end |
||||||
| Fiscal year 2024 - 2025 | Fiscal year 2023 - 2024 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2025 |
Expended during the quarter ended December 31, 2024 |
Year to date used at quarter-end |
Planned expenditures for the year ending March 31, 2024 |
Expended during the quarter ended December 31, 2023 |
Year to date used at quarter-end |
|
| Expenditures: | ||||||
| Personnel | 136,582 | 30,840 | 100,826 | 134,493 | 33,317 | 97,683 |
| Transportation and communications | 2,518 | 541 | 1,465 | 3,219 | 662 | 1,959 |
| Information | 3,972 | 479 | 1,595 | 2,160 | 359 | 1,369 |
| Professional and special services | 18,563 | 4,584 | 9,632 | 20,353 | 4,761 | 10,016 |
| Rentals | 2,158 | 432 | 1,555 | 1,768 | 241 | 1,426 |
| Repair and maintenance | 855 | 161 | 166 | 580 | 38 | 47 |
| Utilities, materials and supplies | 78,410 | 21,907 | 63,363 | 83,520 | 22,432 | 62,149 |
| Acquisition of land, buildings and works | - | - | - | - | - | - |
| Acquisition of machinery and equipment | 2,522 | 77 | 534 | 2,149 | 599 | 902 |
| Transfer payments | 92,694,115 | 23,205,463 | 69,660,036 | 90,501,696 | 22,465,607 | 69,306,987 |
| Public debt charges | 48,408,000 | 11,521,478 | 36,889,863 | 38,550,000 | 10,799,596 | 31,310,212 |
| Other subsidies and payments | 3,619,795 | 1,174,291 | 2,375,136 | 2,921,372 | 649,717 | 1,278,883 |
| Total gross budgetary expenditures | 144,967,490 | 35,960,253 | 109,104,171 | 132,221,310 | 33,977,329 | 102,071,633 |
| Less Revenues netted against expenditures | 150 | - | - | 150 | - | - |
| Total net budgetary expenditures | 144,967,340 | 35,960,253 | 109,104,171 | 132,221,160 | 33,977,329 | 102,071,633 |
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