Quarterly Financial Report for the quarter ended September 30, 2016

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 2016–17 Main Estimates, the 2016-17 Supplementary Estimates (A) and the 2015–16 Quarterly Financial Report for the quarter ended September 30, 2015.

A summary description of the Immigration, Refugees and Citizenship Canada (IRCC) programs may be found in Part II of the Main Estimates (PDF, 1.2 MB).

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 and Supplementary Estimates (A) for the 2016–17 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 moneys 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.

Immigration, Refugees and Citizenship Canada prepares its annual departmental financial statements that are part of the departmental performance reporting process, on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

This quarterly report has not been subject to an external audit or review.

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

In 2016-2017, IRCC’s total authorities includes the Main Estimates, items sought through the Supplementary Estimates (A), the approved Operating Budget Carry Forward from 2015-16 and minor adjustments related to statutory items. It is to be noted that in 2015-2016, IRCC did not have any items being sought through the Supplementary Estimate A process.

Significant Changes to Authorities

As reflected in the Statement of Authorities, IRCC’s total budgetary authorities available for use in fiscal year 2016–17 increased by approximately $381 million (26%) when compared to the same quarter in 2015–16. This is comprised of:

• an increase of $101 million (17%) in Vote 1 – Operating Expenditures
• an increase of $18 million in Vote 5 – Capital Expenditures as it was created on April 1^st, 2016
• an increase of $277 million (28%) in Vote 10 – Grants and Contributions
• a decrease of $16 million (17%) in Statutory Authorities.

The most significant change to the authorities above is the funding received in 2016-17 of $188 million to support settlement of 25,000 Syrian refugees and $140 million to reflect the expanding commitment of the government for an additional 10,000 Government Assisted Syrian Refugees (GAR). Therefore, the Government response to the Syrian refugee crisis represents 86% of the total increases in funding available in the year-over-year quarter analysis.

Vote 1 – Operating Expenditures

The Department’s Vote 1 – Operating Expenditures increase of $101 million (17%) is explained as follows:

• Increases of $138 million attributable to:

  Additional Funding for:

  • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Syrians ($39 million);
  • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of 25,000 Syrians ($28 million);
  • The Labour Market Impact Assessment/International Mobility program (LMIA/IMP) ($28 million);
  • Reduced processing times and to support increased levels for immigration ($21 million);
  • The Biometric Expansion project to verify the identity of all visa-required travelers seeking entry to Canada ($14 million);
  • Operating Budget Carry Forward ($3 million);
  • The processing of Citizenship and Temporary Resident applications to keep up with increased volume demand ($3 million); and
  • The management and protection of classified information in assessing applications under the Immigration and Refugee Protection Act (IRPA) ($2 million).

• Decreases of $37 million attributable to:

  Transfers totaling $27 million to:

  • IRCC Vote 5 for the creation of IRCC’s Capital Vote as of April 1, 2016 ($14 million);
  • The Department of Global Affairs Canada to support missions abroad ($7 million);
  • IRCC Vote 5 mainly to fund the development of IRCC’s Grants and Contributions System and other minor capital projects ($4 million);
  • The Department of Innovation, Science and Economic Development Canada – Syrian refugee crisis ($1 million); and
  • Other - Miscellaneous transfers ($1 million).

  Decrease of $10 million in Funding for:

  • The 2015 Pan American and Parapan American games ($3 million);
  • Government Advertising Campaigns ($3 million);
  • The completion of Information Sharing initiative ($2 million);
  • The completion of Refugee Reform implementation ($1 million); and
  • Other minor adjustments ($1 million).

Vote 5 – Capital Expenditures

The Department’s Vote 5 – Capital Expenditures net increase of $18 million is explained as follows:

• Increases of $18 million attributable to:

  Transfers from:

  • IRCC Vote 1, via the 2016-17 Main Estimates for the creation of IRCC’s Capital Vote as of April 1, 2016 ($14 million); and
  • IRCC Vote 1, via the 2016-17 Supplementary Estimates A mainly to fund the development of IRCC’s Grants and Contributions System and other minor capital projects ($4 million).

Vote 10 – Grants and Contributions (G&C)

The Department’s Vote 10 – Grants and Contributions net increase of $277 million (28%) is explained as follows:

• Increases of $286 million attributable to:

  Additional Funding for ($285 million):

  • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of 25,000 Syrians ($160 million);
  • The implementation of the Government’s response to the Syrian refugee crisis – Settlement of an additional 10,000 Government Supported Syrians Refugees ($99 million);
  • Reduced processing times and to support increased levels for immigration ($18 million);
  • The Grant for the Canada-Quebec Accord on immigration ($5 million); and
  • The renewal of the Global Assistance for Irregular Migrants Program ($3 million).

  One time transfers to:

  • The National Capital Commission for the Victims of Communism Memorial ($1 million).

• Decreases of $9 million attributable to:

  Transfers to:

  • The Department of Canadian Heritage for the transfer of responsibility for the Multiculturalism Program following the change in government machinery announced in the fall of 2015 ($9 million)

Budgetary Statutory Authorities

The 2016–17 statutory authority level in the second quarter is lower than 2015–16 by $16 million (17%) and is primarily explained as follows:

• Increases of $28 million attributable to:

  • Passport program: the increased draw on the fiscal framework is mainly related to a forecasted increase in the Passport Program Modernization initiative spending compared to the previous year ($18 million);
  • Adjustments to the employee benefit plans ($8 million); and
  • Other minor adjustments ($2 million).

• Decreases of $44 million attributable to:

  • The forecasted costs related to the return of fees for certain terminated Federal Skilled Workers applications as this initiative is winding down ($28 million); and
  • The forecasted costs related to the return of fees for the termination of Immigrant Investor Program and Entrepreneur Program applications as this initiative is winding down ($16 million).

Significant Changes to Departmental Budgetary Expenditures by Standard Object

Quarter over quarter analysis

As reflected in the Table of Departmental Budgetary Expenditures by Standard Object, the total gross budgetary expenditures have increased by $24 million (5%) from $478 million in 2015-16 to $502 million in 2016-17. In addition, through the Passport Program and International Experience Canada, IRCC generated $150 million and $2 million respectively in re-spendable revenues in the second quarter of 2016-17. As a result this represent a net budgetary expenditure of $350 million as of September 30, 2016 compared to $325 million as of September 30, 2015.

The year-over-year increase of expenditures is mainly attributable to expenditures related to high profile initiatives such as the settlement of 25,000 Syrian refugees and the expanding commitment of the government for an additional 10,000 Syrian refugees.

With the exception of Transfer Payments, the remaining operating expenditures have not encountered significant quarter over quarter variances.

Transfer Payments increased by $24 million (10%) compared to the same quarter in the previous year and is mostly due to an increase in resettlement assistance income support payments and to an increase in transfer payments made to non-governmental organizations in relation to the Government’s commitment to the Syrian refugee crisis for which IRCC is the lead department.

Cumulative Analysis

As reflected in the Table of Departmental Budgetary Expenditures by Standard Objects, IRCC’s year-to-date gross operating expenditures as of the second quarter were $1,039 million compared to $983 million as of September 30, 2015, representing an increase of 6% from previous year and 41% of the total budgetary authorities available for use for the year ending March 31, 2017. This is slightly below last year’s expenditures usage rate (46%) at quarter-end. The reduced percentage of spending can be explained by significant additional funding previously received in response to the Syrian refugee crisis.

With the exception of the Transfer payments, the remaining operating expenditures have not encountered significant year-to-date variances.

Transfer Payments increased by $47 million compared to the previous year-to-date used at quarter-end and is due to an increase of $38 million in resettlement assistance income support payments and other transfer made to non-governmental organizations in relation, like mentioned earlier, to the Government’s commitment to the Syrian refugee crisis for which IRCC is the lead department, combined with other small increases in IRCC transfer payments programs.

3. 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. At the same time, IRCC continuously works to improve its own internal processes and systems through change initiatives such as the Modernization agenda to improve client service.

Unforeseen Events and Natural Disasters

Unforeseen events such as the impact of the civil war in Syria and the response of the Canadian government to the crisis 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.

Additionally, IRCC can also be indirectly affected when the Department is required, for humanitarian or legal reasons, to facilitate travel of foreign nationals or Canadian citizens by processing applications for visas or other necessary documents on an urgent basis.

In conjunction with its national and international partners, IRCC continues to identify, assess, monitor, and proactively implement measures to mitigate risks and minimize the impact they may have on our operations, commitments, service standards and processing targets.

Litigation and Legal

Over the last few years, there has been a significant increase in the numbers of complex and high-profile litigation. Sound management practices are in place to manage all of these challenges and ensure timely delivery of IRCC’s programs and client services.

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

David Manicom was appointed in the position of Acting Assistant Deputy Minister of Strategic and Program Policy effective July 22, 2016.

Umit Kiziltan was appointed in the position of Acting Associate Assistant Deputy Minister of Strategic and Program Policy effective August 22, 2016.

On February 27, 2016, the Government fulfilled its commitment to bring 25,000 Syrian refugees to Canada. However, the important work of settlement continues, and will do so for a number of years. The Government expanded its commitment of resettling an additional 10,000 Syrian refugees by December 2016. The Government of Canada is working in collaboration with the United Nations High Commissioner for Refugees and with Canadians, including private sponsors, non-governmental organizations, provincial, territorial and municipal governments to achieve this commitment.

There have been no other significant changes in relation to operations, personnel and programs during the quarter ended September 30, 2016.

Approval by Senior Officials

Approved by:

Ottawa, Canada
November 28, 2016