Quarterly Financial Report for the quarter ended December 31, 2020

1. Introduction

This 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 Treasury Board. This quarterly report should be read in conjunction with the 2020-21 Main Estimates Part II (PDF, 1.03 MB) and the 2019-20 Quarterly Financial Report for the quarter ended December 31, 2019.

A summary description of Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates and the 2020-21 Departmental Plan.

2. Basis of Presentation

This quarterly report has been prepared by management 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 Main Estimates for the 2020-21 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 to be 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.

3. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

In June 2017, the House of Commons approved a change allowing the Main Estimates to be tabled in Parliament by April 16^th instead of March 1^st. This change, in effect for the remaining duration of the 42^nd Parliament, resulted in the government tabling an Interim Estimates by mid-February to support Parliament’s scrutiny of interim supply, and tabling the Main Estimates in April, after the Federal Budget. With the end of this pilot project, tabling of Main Estimates returned to its normal schedule (by March 1) and funding no longer includes announcements made in the Federal Budget.

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. Full supply for the 2020-21 Main Estimates was granted in December 2020.

In 2020-21, IRCC’s total authorities include the Main Estimates and incremental funding provided through the Supplementary Estimates A and the Supplementary Estimates B, mainly to support provinces and municipalities for temporary housing with respect to the increased volume of asylum claimants in recent years, to implement the 2020 Immigration Levels Plan, to protect people from unscrupulous and fraudulent immigration and citizenship consultants, and for information technology systems interoperability under the Enhancing the Integrity of Canada’s Borders and Asylum System initiative. Total authorities also include funding from the 2019-20 Operating and Capital Budget Carry Forward, and minor adjustments related to statutory items.

Significant changes to authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2020-21 decreased by approximately $39.7 million (-1%) compared to the same quarter in 2019-20. This decrease is comprised of:

• An increase of $21.4 million (2%) in Vote 1 – Operating Expenditures
• An increase of $0.4 million (1%) in Vote 5 – Capital Expenditures
• A decrease of $14.3 million (-1%) in Vote 10 – Grants and Contributions
• A decrease of $47.2 million (-17%) in Statutory Authorities

The most significant changes to authorities available for use include a decrease in funding of $100.5 million to support provinces and municipalities for temporary housing with respect to the increased volume of asylum claimants in recent years. IRCC received $324 million in the 2019-20 Main Estimates and an unused amount of $121 million was carried into 2019-20 through the Supplementary Estimates. In 2020-21, IRCC received $242 million through the Supplementary Estimates B, and an unused amount of $102.5 million was carried into 2020-21 through the Supplementary Estimates A.

This decrease was partly offset by increases in funding received of $119.1 million for immigration levels plans, and $32.9 million for the Interim Federal Health program to provide health care for refugees and asylum seekers.

Changes to authorities also include funding received through Treasury Board central vote for the 2019-20 Operating and Capital Budget Carry Forward.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures Authorities cumulative net increase of $21.4 million (2%) compared to the same quarter in 2019-20 is explained as follows:

• Increases of $65.8 million are mainly comprised of:
  • Incremental funding in the amount of $32.9 million for the Interim Federal Health Program to provide health care to refugees and asylum seekers;
  • Incremental funding in the amount of $13.8 million to implement immigration levels plans;
  • Incremental funding in the amount of $10.0 million to protect people from unscrupulous immigration and citizenship consultants;
  • Incremental funding of $5.3 million to improve immigration client service; and
  • Increased allocation of $3.8 million through Treasury Board central vote for the Operating Budget Carry Forward.
• Decreases of $44.5 million are mainly comprised of:
  • Reduced funding of $18.2 million due to fluctuations in the funding profile for Enhancing the Integrity of Canada’s Borders and Asylum System;
  • Reduced funding in the amount of $6.5 million for expanding biometrics in Canada’s immigration system;
  • Reduced funding in the amount of $6.2 million due to an internal transfer from Vote 5 Capital expenditures to Vote 1 Operating expenditures in 2019-20 only;
  • Net transfer of $3.4 million to Global Affairs Canada and Shared Services Canada to support staff located at missions abroad;
  • Reduced funding of $3.1 million due to a fluctuation in the funding profile for Canada’s New International Education Strategy;
  • Reduced funding of $3.0 million due to fluctuations in the funding profile for Helping Travelers Visit Canada;
  • Reduced funding of $1.8 million for the International Mobility Program; and
  • Other adjustments in the amount of $2.3 million.

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures Authorities net increase of $0.4 million (1%) compared to the same quarter in 2019-20 is explained as follows:

• Increases of $14.4 million are mainly comprised of:
  • Incremental funding of $11.0 million for Enhancing the Integrity of Canada’s Borders and Asylum System;
  • Incremental funding of $2.4 million to protect people from unscrupulous immigration and citizenship consultants; and
  • Incremental funding of $1.0 million for the Entry-Exit initiative.
• Decreases of $14.0 million are mainly comprised of:
  • Reduced funding of $6.5 million for expanding biometrics in Canada’s immigration system;
  • Reduced funding of $3.3 million for the International Mobility Program due to the sunset of investments in IT systems;
  • Reduced funding of $1.3 million due to a fluctuation in the funding profile for immigration levels plans; and
  • Other adjustments in the amount of $2.9 million.

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions Authorities net decrease of $14.3 million (-0.7%) compared to the same quarter in 2019-20 is explained as follows:

• Increases of $126.3 million are mainly comprised of:
  • Incremental funding of $105.3 million for immigration levels plans;
  • Incremental funding of $16.3 million for Enhancing the Integrity of Canada’s Borders and Asylum System; and
  • Incremental funding of $4.7 million to support the Official Languages Action Plan.
• Decreases of $140.6 million are mainly comprised of:
  • Reduced funding of $100.5 million to support provinces and municipalities for temporary housing with respect to the increased volume of asylum claimants in recent years. IRCC received $324 million in the 2019-20 Main Estimates and an unused amount of $121 million from 2018-19 was carried into 2019-20 through the Supplementary Estimates. In 2020-21, IRCC received $242 million through the Supplementary Estimates B, and an unused amount of $102.5 million from 2019-20 was carried into 2020-21 through the Supplementary Estimates A;
  • Sunset of $32.2 million for the Government’s response to the Syrian refugee crisis as settlement-focused resources have ended on March 31, 2020;
  • Reduced funding of $7.0 million due to a fluctuation in the funding profile for the Protection of Vulnerable Women and Girls; and
  • Other adjustments in the amount of $0.9 million.

Budgetary Statutory Authorities

The 2020-21 statutory authority level in the third quarter has decreased by $47.2 million (-17%) compared to the same quarter in 2019-20 which is primarily explained as follows:

• Decrease of $41.8 million due to statutory adjustments for the Passport Program revolving fund. The decrease is attributable to the decrease in passport applications, as fewer Canadians are renewing their travel documents in the second half of the 2013-2023 business cycle, resulting in a decrease in overall revenue for this program;
• Reduced funding of $5.2 million for Employee Benefit Plans as a result of a reduction in funding levels in Vote 1 – Operating Expenditures and Vote 5 – Capital Expenditures; and
• Reduced funding of $0.2 million related to other statutory authorities.

4. Significant changes to departmental budgetary expenditures by standard object

Quarter over quarter analysis

As reflected in the Departmental Budgetary Expenditures by Standard Object table, total gross budgetary expenditures during the quarter ending December 31, 2020 decreased by $8.5 million (-1%) compared to the same quarter in 2019-20. As described below, this variance is mainly attributable to changes related to Personnel, Transportation and Communications, Professional and Special Services, Utilities, Materials and Supplies, and Transfer Payments expenditures.

Through the Passport Program, IRCC generated $20 million in re-spendable revenues in the third quarter of 2020-21.

Overall, this resulted in a net budgetary expenditure of $677.7 million as of December 31, 2020 compared to $639.0 million as of December 31, 2019.

Personnel expenditures have increased by $8.2 million (4%) which is mainly attributable to increases in salary as a result of funding for the 2020 Immigration Levels Plan, and for Protecting People from Unscrupulous and Fraudulent Immigration and Citizenship Consultants.

Similar to trends in the previous quarter, Transportation and Communications expenditures have decreased by $8 million (-81%) which is mainly comprised of $3.3 million in reduced spending related to passport shipping costs as a result of a reduction in production volume while the Government of Canada focused efforts on measures to mitigate the impacts of the COVID-19 pandemic, and $4.7 million in reduced spending on travel related to operational activities as a result of travel and border restrictions.

Similar to trends in the previous quarter, Professional and Special Services expenditures have decreased by $57.9 million (-33%) which is mainly explained by a decrease in spending attributable to lower Visa Application Centre (VAC) transaction costs as a result of a decrease in demand for services such as biometrics due to travel and border restrictions, the postponement of work-site inspections for the International Mobility Program by a partner department, as well as a decrease in spending for the Interim Federal Health program attributable to lower arrivals of asylum seekers and government assisted refugees. The decrease was offset by an increase of $3.8 million in spending for consultants to support IT projects.

Utilities, Materials and Supplies expenditures have decreased by $4.5 million (-56%) which is mainly explained by a decrease in spending attributable to lower printed materials for the passport program as less passport booklets are being printed and mailed due to lower demand.

Transfer Payments have increased by $53.6 million (17%) which is mainly explained by an increase of $23 million in payments to provinces and municipalities for the Interim Housing Assistance Program, $8 million in spending for the Canada-Quebec Accord, and $33 million in payments to local non-profit organizations to support the Settlement Program mainly attributable to funding from immigration levels plans. These increases were offset by a decrease of $10.4 million in the Resettlement Assistance Program for payments to refugees as a result of lower landings compared to the same quarter in the previous fiscal year due to maintained border restrictions.

Passport re-spendable revenues have decreased by $47.2 million (-70%) compared to the same quarter in the previous year, mainly due to the decrease in application volumes attributable to travel and border restrictions due to the COVID-19 pandemic.

Cumulative analysis

As reflected in the Departmental Budgetary Expenditures by Standard Object table, IRCC’s year-to-date gross operating expenditures were $2,555 million in 2019-20 compared to $2,168 million in 2020-21 resulting in a decrease of $387 million (-15%).  The cumulative impact is mostly attributable to the net decrease in payments to provinces and municipalities under the Interim Housing Assistance Program, and the decrease in spending resulting from travel and border restrictions due to the COVID-19 pandemic.

Personnel expenditures have increased by $29.6 million (6%) which is mainly attributable to the implementation and incremental increases of various initiatives such as the 2020 Immigration Levels Plan, Protecting People from Unscrupulous and Fraudulent Immigration and Citizenship Consultants, and Budget 2019 measures such as Enhancing the Integrity of Canada’s Borders and Asylum System, Improving Immigration Client Service, and Helping Travellers Visit Canada. Increases are also attributable to additional personnel expenditures due to newly signed collective agreements.

Transportation and Communication expenditures have decreased by $25.2 million (-87%) which is mainly comprised of $13.7 million in reduced spending related to passport shipping costs as a result of a reduction in production volume while the Government of Canada continues to focus its efforts on measures to mitigate the impacts of the COVID-19 pandemic, and $10.7 million for travel related to operational activities as a result of travel and border restrictions.

Professional and Special Services expenditures have decreased by $117.4 million (-29%) due primarily to lower VAC transaction costs as a result of a decrease in demand for services such as biometrics due to travel and border restrictions, the postponement of work-site inspections for the International Mobility Program by a partner department, and a decrease in spending for the Interim Federal Health program attributable to lower arrivals of asylum seekers and government assisted refugees. The decrease was offset by an increase of $7.1 million in spending for consultants to support various IT projects.

Utilities, Materials and Supplies expenditures have decreased by $9.7 million (-46%) which is mainly explained by a decrease in spending attributable to lower printed materials for the passport program as less passport booklets are being printed and mailed due to lower demand.

Transfer payments have decreased by $258.8 million (-17 %) which is mainly explained by a decrease of $316.3 million in payments to provinces and municipalities for the Interim Housing Assistance Program as most recent payment of $23 million for 2020-21 for this program was made in October 2020, and a decrease of $24.9 million in the Resettlement Assistance Program for payments to refugees. These decreases were offset by an increase of $32.2 million in spending for the Canada-Quebec Accord, and an increase of $50.2 million in payments to local non-profit organizations to support the Settlement Program.

Other Subsidies and Payments have decreased by $3.2 million (-23%) which is mainly due to a decrease in the outstanding Interdepartmental Settlement amounts. This decrease was offset by an increase in refunds of revenues from previous years.

Passport re-spendable revenues have decreased by $175.8 million (-81%) compared to the same period in the previous year due to a decrease in application volumes attributable to travel and border restrictions due to the COVID-19 pandemic.

5. Risks and Uncertainties

IRCC operates in a constantly changing environment. Its strategic directions as well as its policies and operations are influenced by external factors such as emerging events, the Canadian and global economic, social or political contexts and shifting migration trends.

As part of its risk mitigation strategy, IRCC continues to monitor the impacts of COVID-19 pandemic on its operations while working towards improving its own internal processes and systems. IRCC is implementing a modernization and transformation agenda that will improve client service and better enable the department to conduct its operations in the pandemic environment.

Unforeseen Events and Natural Disasters

Unforeseen events as well as natural disasters may have significant effects on IRCC’s operations. They can affect IRCC directly when they occur in places where our offices and employees are located and may also affect the department’s clients.

COVID-19 has affected IRCC’s priorities and operations in the current fiscal year due to the ongoing closure of the border to most non-essential travel. Specifically, the closure has resulted in a decrease in volumes in the Temporary and Permanent Resident streams and difficulties in processing these applications due to various disruptions to the domestic and global workforce. As the pandemic situation continues to evolve, IRCC will continue to closely monitor impacts on its operations and adapt financial strategies accordingly.

In the context of humanitarian reasons and/or legal obligations, IRCC is implementing measures to facilitate travel of eligible foreign nationals, permanent residents and Canadian citizens by processing applications for visas or other necessary documents on an urgent basis.

Litigation and Legal

IRCC operates in a very high volume litigation environment which includes complex, high profile and high impact litigation files. Sound management practices are in place to manage all of these challenges in a consistent and coordinated fashion, including consultations with Justice and other partner departments.

6. Significant Changes in Relation to Operations, Personnel and Programs

There have not been significant change in relation to operations, personnel and programs during the quarter ended December 31, 2020.

Approval by Senior Officials

Approved by:

Ottawa, Canada
February 19, 2021