Quarterly Financial Report, quarter ended September 30, 2023
Statement outlining results, risks and significant changes in operations, personnel and programs
Introduction
This second quarterly 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 Treasury Board (TB). This quarterly report should be read in conjunction with the 2023-24 Main Estimates.
This quarterly report has not been subject to an external audit or review.
Authority, mandate and program activities
Environment and Climate Change Canada (ECCC) leads and supports a wide range of environmental issues, including taking action on clean growth and climate change, pollution, conserving nature, and predicting weather and environmental conditions. The Department addresses these issues through various actions and initiatives including leading Canada’s efforts to transition to a net-zero economy and strengthening resilience to climate change, protecting more of our lands and waters, strengthening protection and recovery for species at risk and their habitats, and providing environmental and weather information to Canadians. To achieve its mandate, the Department works with provinces, territories, Indigenous peoples, civil society, industry, and international partners, and undertakes monitoring, science-based research, policy and regulatory development, and enforcement of environmental laws and regulations.
The Department’s program focus reflects the interdependence between environmental sustainability and economic well-being.
Under the Department of the Environment Act, the powers, duties and functions of the Minister of Environment and Climate Change extend to matters such as:
- the preservation and enhancement of the quality of the natural environment, including water, air and soil quality, and the coordination of the relevant policies and programs of the Government of Canada
- renewable resources, including migratory birds and other non-domestic flora and fauna
- meteorology
- the enforcement of rules and regulations
A summary description of the ECCC Raison d’être and core responsibilities can be found in Part II of the Main Estimates and the Departmental Plan.
Basis of presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the ECCC’s spending authorities granted by Parliament and those used by the Department consistent with the Main Estimates for the 2023‑24 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.
When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed an appropriation for the fiscal year in which it is issued.
The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
Highlights of the fiscal quarter and the fiscal year-to-date (YTD) results
Authority analysis
The Statement of Authorities presented in this quarterly financial report (see Table 1) reflects the authorities that were approved as of September 30, 2023. The funding available for use includes the 2023-24 Main Estimates and allocations from Treasury Board (TB) Central Votes including the Operating and Capital budget carry-forwards and Government-wide Initiatives.
ECCC’s total available authorities for use for the year ending March 31, 2024 is higher by approximately $467.4M ($2,508.1M - $2,040.7M)Footnote 1 when compared to the same quarter of the previous year. This difference is explained by an increase Vote 1 – Net Operating of $15.5M ($1,032.2M - $1,016.7M), Vote 10 – Grants and Contributions of $463.9M ($1,234.2M - $770.3M), in Budgetary Statutory authorities of $3.8M ($112.0M - $108.2M) and by decrease in and Vote 5 – Capital of $15.8M ($129.7M - $145.5M).
Vote 1 – Net Operating authorities
The $15.5M increase compared to last fiscal year in the net Operating authorities is mainly due to the following increases:
- $29.1M related to conserve Canada’s land and freshwater, protect species, advance Indigenous reconciliation and increase access to nature (Enhanced Nature Legacy);
- $21.3M related to the Ocean’s Protection Plan;
- $15.5M for advancing a circular economy for plastics in Canada;
- $11.9M for the implementation of the new Impact Assessment and Regulatory Processes;
- $7.6M related to the Low Carbon Economy Fund (LCEF);
- $6.7M to implement natural climate solutions in Canada;
- $6.0M related to the implementation of the fuel Charge Proceeds Return Program;
- $5.0M related to the Pacific Environment Center (PEC);
- $4.8M related to the Federal Contaminated Sites Action Plan;
- $2.7M related to Climate Change Mitigation;
- $2.3M related to the compensation allocations from Treasury Board for the new collective agreements; and
- $1.2M for various initiatives.
Offset by the following decreases:
- $51.1M to protect Canada’s nature, parks and wild spaces (Nature Legacy), which ended in 2022-23;
- $15.8M related to initiatives associated with the revitalization of Canada’s weather services;
- $14.4M related to a lower amount carried forward from the previous year to continue work on departmental priorities;
- $9.7M to adapt Canada’s weather and water services to climate change;
- $4.8M to establish the Canada Water Agency Transition office; and
- $2.8M for Protecting Marine Life.
Operating Authorities are netted of respendable revenues. Revenues at Environment and Climate Change Canada come from sales of goods and information products and services of a non-regulatory nature. Major revenue items include, for example: Oil Sands monitoring activities, Ocean disposal permit applications, Hydrometric services, Ocean disposal monitoring fees, and Weather and environmental services.
Vote 5 – Capital authorities
The $15.8M decrease compared to last fiscal year in the Capital authorities is mainly due to the following decreases:
- $17.6M related to initiatives associated with the revitalization of meteorological services;
- $8.4M related to Strong Arctic and Northern Communities; and
- $0.8M for various initiatives.
Offset by the following increases:
- $7.2M to conserve Canada’s land and freshwater, protect species, advance Indigenous reconciliation and increase access to nature (Enhanced Nature Legacy); and
- $3.8M related to a higher amount carried forward from the previous year to continue work on specific projects.
Vote 10 – Grants and contributions authorities
The $463.9M increase compared to last fiscal year in the Grants and Contributions authorities is mainly due to the following increases:
- $364.4M related to the Low Carbon Economy Fund (LCEF);
- $76.8M to conserve Canada’s land and freshwater, protect species, advance Indigenous reconciliation and increase access to nature (Enhanced Nature Legacy);
- $70.7M to implement natural climate solutions in Canada;
- $20.0M related to the British Columbia Old Growth Nature Fund;
- $17.4M related to Canada’s International Climate Finance program;
- $5.0M related to Great Lakes ecosystem initiatives;
- $3.9M related to the Youth Employment and Skills Strategy; and
- $0.9M for various initiatives.
Offset by the following decrease:
- $95.2M to protect Canada’s nature, parks and wild spaces (Nature Legacy).
Statutory authorities
The $3.8M increase compared to last fiscal year in the budgetary statutory authorities is related to the contributions to Employee Benefit Plans.
Expenditures analysis by vote
Details of expenditures by vote are presented in Tables 1 and 2.
In the second quarter of 2023-24, total budgetary expenditures were $364.3M compared to $330.5M reported for the same period in 2022-23, resulting in an increase of $33.8M. Year-to-date expenditures as of September 30, 2023, were $662.0M, which represents an increase of $49.8M ($662.1M - $612.3M) compared to the same period in 2022-23.
Vote 1 – Net Operating Authorities used during the second quarter of 2023-24 totalled $261.8M, which represents an increase of $23.6M ($261.8M - $238.2M) compared to the same period last year. Year-to-date expenditures as of September 30, 2023, were $480.8M, which represents an increase of $28.6M ($480.8M - $452.2M) compared to the same period last year. Both variances are mainly due to an increase in personnel expenditures, offset by an increase in revenues. The year-to-date variance is also due to an increase in utilities and materials, offset by a decrease in rental and acquisition of machinery and equipment.
Vote 5 – Capital Authorities used during the second quarter of 2023-24 totalled $20.2M, which represents a decrease of $0.9M ($20.2M – $21.1M) compared to the same period last year. Year-to-date expenditures as of September 30, 2023, are $27.6M, which represents a decrease of $0.1M ($27.6M - $21.7M) compared to the same period last year.
Vote 10 – Grants and Contributions Authorities used during the second quarter of 2023-24 totalled $53.7M, which represents an increase of $9.6M ($53.7M - $44.1M) compared to the same period last year. Year-to-date expenditures as of September 30, 2023, are $94.5M, which represents an increase of $16.7M ($94.5M - $77.8M) compared to the same period last year. Both variances are mainly due to an increase in contribution payments to strengthen protection and recovery of species at risk and their habitats and to restore and enhance wetlands, peatlands, and grasslands to store and capture carbon. The year-to-date variance is also due to an increase in contribution payments to Canada’s international climate finance.
Budgetary Statutory Authorities – Budgetary Statutory Authorities used during the second quarter of 2023-24 totalled $28.5M, which represents an increase of $1.5M ($28.5M - $27.0M) compared to the same period last year. Year-to-date expenditures as of September 30, 2023, are $59.2M, which represents an increase of $4.6M ($59.2M - $54.6M) compared to the same period last year. Both variances are mainly due to an increase in contribution to employee benefit plans. The year-to-date variance is also due to an increase in distribution of carbon pollution pricing proceeds and refunds of overpayments from previous years.
Expenditures analysis by Standard Object
Details of expenditures by Standard Object are presented in Tables 3 and 4.
Quarterly and year-to-date personnel expenditures increased by $24.2M ($242.3M - $218.1M) and $33.9M ($464.3M - $430.4M) compared to the same period last year. Both variances are mainly due to an increase in salary wages due to renewed collective agreements.
Quarterly and year-to-date information expenditures decreased by $2.2M ($1.4M - $3.6M) and $2.0M ($2.3M - $4.3M) compared to the same period last year. Both variances are mainly due to the timing of payment of advertising expenses.
Quarterly and year-to-date rental expenditures increased by $1.4M ($6.4M - $5.0M) and $0.1M ($10.2M - $10.1M) compared to the same period last year. The quarterly variance is mainly due to the timing of rental fee payment for the National Wildlife Research Centre office laboratory space at Carleton University.
Quarterly and year-to-date utilities, materials and supplies expenditures decreased by $1.7M ($6.4M - $8.1M) and increased by $0.2M ($13.3M - $13.1M) compared to the same period last year. The quarterly variance is mainly due to the timing of payment of meteorological supplies.
Quarterly and year-to-date acquisition of land, building and works expenditures increased by $2.4M ($2.4M - $0.0M) and $2.5M ($2.6M - $0.1M) compared to the same period last year. The quarterly variance is mainly due to the acquisition of a land in British Columbia to expend the National Wildlife Area and protect more lands.
Quarterly and year-to-date acquisition of machinery and equipment expenditures increased by $0.1M ($5.1M - $5.0M) and decreased by $1.5M ($8.3M - $9.8M) compared to the same period last year. The year-to-date is mainly due to the timing of payment for the acquisition of computer equipment and lab instruments, offset by an increase in the acquisition of vehicles, including electric vehicles, to renew the department’s fleet.
Quarterly and year-to-date transfer payments expenditures increased by $9.6M ($53.7M - $44.1M) and $17.7M ($96.0M - $78.3M) compared to the same quarter last year. Both variances are mainly due to an increase in contribution payments to strengthen protection and recovery of species at risk and their habitats and to restore and enhance wetlands, peatlands, and grasslands to store and capture carbon. The year-to-date variance is also due to an increase in contribution payments to Canada’s international climate finance.
Quarterly and year-to-date revenue collections increased by $2.0M ($10.5M - $8.5M) and $4.2M ($24.7M - $20.5M) compared to the same period last year. Both variances are mainly due to the timing of collections related to hydrometric data and information services as well as for ocean disposal monitoring fees, offset by refunds of overpayments from previous years related to excess emissions charges.
Risks and uncertainties
A wide range of internal and external factors have the potential to affect ECCC’s ability to deliver optimal and timely results for Canadians. The Department considers and addresses three key strategic risks to its financial plan: strategic partnerships; human resources; and capital and technological infrastructure.
The Department’s ability to deliver results for Canadians requires extensive collaboration with strategic partners (federal, provincial, territorial, Indigenous, and international partners, the private and non-profit sectors, and civil society). This reliance can give rise to risks associated with the Department’s external relationships and partnerships if efforts are not well aligned and coordinated in the face of competing priorities, changing political landscapes, resource constraints, and an expanding departmental mandate that includes many high-profile priorities and commitments. To mitigate this risk, the Department has continued to build new relationships and to maintain and improve existing ones by working collaboratively with key partners, including through the implementation of a departmental framework for Indigenous engagement and by participating in the development of a harmonized, government-wide partners engagement approach. ECCC also works with external partners through existing and new governance bodies and continues to explore technological solutions that foster collaboration among them. In addition, the Department promotes sound stewardship of departmental resources through the terms and conditions associated with its grants and contributions programs to leverage partner support, ensure efficient delivery of external funding, and reduce potential lapses.
To fulfill its mandate, ECCC requires diverse, highly qualified, and specialized personnel with various expertise in areas such as meteorological science, data science, scientific and regulatory areas, policy development, transfer payment programs and enabling services. Uncertainties endure in attracting, developing, and retaining these employees due in part to a highly competitive and transforming labour market and to process challenges related to classification, succession planning and staffing. This is compounded by ECCC’s increasingly ambitious policy and program agendas that add to the Department’s workload without necessarily adding new resources. To attract and retain a qualified workforce, ECCC continues to maintain flexibility in providing internal human resources services, to perform sound human resources planning, including by realigning resources to priority files, and to implement talent management initiatives and recruitment strategies targeting key areas.
The Department also relies on its capital and technological infrastructure to achieve its mandate. This infrastructure requires maintenance and ongoing investment to prevent rust-out, stay abreast of technological advancements and ensure functionality in the face of changing and increasingly complex needs. ECCC undertakes capital and technological investment planning to better identify enterprise-wide deficits, prioritize accordingly and secure relevant expertise. At the same time, ECCC continues to invest in expanding partnerships and external collaboration to access data from other providers.
ECCC will continue to closely monitor its operating environment to allocate resources to key priorities and ensure that resources are being managed effectively to deliver optimal and timely results through improved programs, policies, and services.
Significant changes in relation to operations, personnel and programs
The following major changes in relation to operations, personnel and programs occurred during the second quarter:
- In August 2023, Sandra McCardell was appointed Assistant Deputy Minister of the International Affairs Branch;
- In September 2023, Jean-François Tremblay was appointed Deputy Minister of Environment and Climate Change Canada;
Approved by:
(the original version was signed by)
(the original version was signed by)
Jean-François Tremblay
Deputy Minister
Gatineau, Canada
Date: November 20, 2023
Linda Drainville
Chief Financial Officer
Gatineau, Canada
Date: November 10, 2023
Statement of Authorities (unaudited) – Table 1
| - | Total available for use for the year ending March 31, 2024* | Used during the quarter ended September 30, 2023 | Year-to-date used at quarter end |
|---|---|---|---|
| Vote 1 – Net Operating Expenditures | 1,032,230 | 261,857 | 480,821 |
| Vote 5 – Capital Expenditures | 129,735 | 20,195 | 27,590 |
| Vote 10 – Grants and Contributions | 1,234,197 | 53,764 | 94,460 |
| Budgetary Statutory – Employee Benefit Plans | 111,907 | 27,977 | 55,954 |
| Budgetary Statutory – Minister’s Salary and Motor Car Allowance | 95 | 24 | 47 |
| Budgetary Statutory – Distribution of Fuel and Excess Emission Charges | - | - | 1,457 |
| Budgetary Statutory – Refund of previous years revenue | - | 146 | 1,345 |
| Budgetary Statutory – Spending of proceeds from the disposal of surplus Crown assets | - | 372 | 372 |
| Total Budgetary Authorities | 2,508,164 | 364,335 | 662,046 |
| Non-Budgetary Authorities | - | - | - |
| Total Authorities | 2,508,164 | 364,335 | 662,046 |
* The funding available for use includes the 2023-24 Main Estimates, allocations from Treasury Board (TB) Central Votes including the Operating and Capital budget carry-forwards and Government-wide Initiatives.
Totals may not add up due to rounding.
Statement of Authorities (unaudited) – Table 2
| - | Total available for use for the year ending March 31, 2023* | Used during the quarter ended September 30, 2022 | Year-to-date used at quarter end |
|---|---|---|---|
| Vote 1 – Net Operating expenditures | 1,016,738 | 238,242 | 452,226 |
| Vote 5 – Capital expenditures | 145,524 | 21,058 | 27,689 |
| Vote 10 – Grants and contributions | 770,282 | 44,136 | 77,793 |
| Budgetary Statutory – Employee Benefit Plans | 108,101 | 27,025 | 54,051 |
| Budgetary Statutory – Minister’s Salary and Motor Car Allowance | 93 | 23 | 46 |
| Budgetary Statutory – Distribution of Fuel and Excess | - | - | 464 |
| Total Budgetary authorities | 2,040,738 | 330,484 | 612,269 |
| Non-Budgetary authorities | - | - | - |
| Total authorities | 2,040,738 | 330,484 | 612,269 |
* The funding available for use includes the 2022-23 Main Estimates and the Operating and Capital budget carry-forwards.
Totals may not add up due to rounding.
Departmental budgetary expenditures by Standard Object (unaudited) – Table 3
| Expenditures | Planned expenditures for the year ending March 31, 2024* | Expended during the quarter ended September 30, 2023 | Year-to-date used at quarter end |
|---|---|---|---|
| Personnel | 855,994 | 242,253 | 464,316 |
| Transportation and communications | 26,140 | 8,674 | 15,041 |
| Information | 16,383 | 1,380 | 2,252 |
| Professional and special services | 280,745 | 41,728 | 65,928 |
| Rentals | 47,280 | 6,367 | 10,185 |
| Repair and maintenance | 20,248 | 4,031 | 6,283 |
| Utilities, materials and supplies | 44,013 | 6,399 | 13,255 |
| Acquisition of land, buildings and works | 2,314 | 2,387 | 2,549 |
| Acquisition of machinery and equipment | 47,876 | 5,123 | 8,291 |
| Transfer payments | 1,234,197 | 53,764 | 95,917 |
| Public debt charges | 502 | - | - |
| Other subsidies and payments | 7,486 | 2,724 | 2,685 |
| Total gross budgetary expenditures | 2,583,178 | 374,830 | 686,702 |
| Less Revenues netted against expenditures: | |||
| Revenues | 75,014 | 10,495 | 24,656 |
| Total Revenues netted against expenditures: | 75,014 | 10,495 | 24,656 |
| Total net budgetary expenditures | 2,508,164 | 364,335 | 662,046 |
* The planned expenditures include the 2023-24 Main Estimates, allocations from Treasury Board (TB) Central Votes including the Operating and Capital budget carry-forwards and Government-wide Initiatives.
Totals may not add up due to rounding.
Departmental budgetary expenditures by Standard Object (unaudited) – Table 4
| Expenditures | Planned expenditures for the year ending March 31, 2023* | Expended during the quarter ended September 30, 2022 | Year-to-date used at quarter end |
|---|---|---|---|
| Personnel | 829,758 | 218,092 | 430,354 |
| Transportation and communications | 19,036 | 7,361 | 13,610 |
| Information | 9,495 | 3,604 | 4,317 |
| Professional and special services | 271,074 | 41,993 | 65,548 |
| Rentals | 76,261 | 5,003 | 10,052 |
| Repair and maintenance | 26,606 | 3,141 | 4,881 |
| Utilities, materials and supplies | 44,191 | 8,064 | 13,079 |
| Acquisition of land, buildings and works | 1,773 | 32 | 75 |
| Acquisition of machinery and equipment | 58,293 | 4,994 | 9,762 |
| Transfer payments | 770,282 | 44,136 | 78,257 |
| Public debt charges | 577 | - | - |
| Other subsidies and payments | 7,606 | 2,567 | 2,844 |
| Total gross budgetary expenditures | 2,114,952 | 338,987 | 632,779 |
| Less Revenues netted against expenditures: | |||
| Revenues | 74,214 | 8,503 | 20,510 |
| Total Revenues netted against expenditures: | 74,214 | 8,503 | 20,510 |
| Total net budgetary expenditures | 2,040,738 | 330,484 | 612,269 |
* The planned expenditures as of September 30, 2022 are based on funding available for use from the 2022-23 Main Estimates and the Operating and Capital budget carry-forwards.
Totals may not add up due to rounding.
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