Public Health Agency of Canada quarterly financial report - For the quarter ending December 31, 2019

1.0 Introduction
- 1.1 Authority, Mandate and Program
- 1.2 Basis of Presentation
2.0 Highlights of Fiscal Quarter Results
- 2.1 Significant Changes to Authorities
- 2.2 Significant Changes to Expenditures
3.0 Risks and Uncertainty
4.0 Significant Changes in Relation to Operations, Personnel and Programs
5.0 Approval by Senior Officials
6.0 Statement of Authorities (unaudited)
7.0 Agency Budgetary Expenditures by Standard Object (unaudited)

1.0 Introduction

This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act, in the form and manner prescribed by the Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. This quarterly financial report should be read in conjunction with the Main Estimates and Supplementary Estimates. Please note that this quarterly financial report has not been subject to an external audit or review.

1.1 Authority, Mandate and Program

The Public Health Agency of Canada was created within the federal Health Portfolio in September 2004. The core mandate of the Agency is to deliver on the Government of Canada’s commitment to increase its focus on public health in order to help protect and improve the health and safety of all Canadians and to contribute to strengthening public health capacities across Canada.

The Agency has the responsibility to:

contribute to the prevention of disease and injury, and the promotion of health;
enhance the quality and quantity of surveillance data and expand the knowledge of disease and injury in Canada;
provide federal leadership and accountability in managing national public health events;
strengthen intergovernmental collaboration on public health and facilitate national approaches to public health policy and planning;
serve as a central point for sharing Canada’s expertise with international partners and to translate international knowledge and approaches to inform and support Canada’s public health priorities and programs.

The Agency aims to achieve a strategic outcome of protecting Canadians and empowering them to improve their health by providing strategic policy advice and support to the Minister of Health on a range of Core Responsibilities, including:

Health Promotion and Chronic Disease Prevention;
Infectious Disease Prevention and Control; and
Health Security.

The Agency also delivers a number of grant and contribution programs related to these programs.

Further information on the mandate, roles, responsibilities and program of the Agency can be found in the 2019-20 Departmental Plans and the 2019-20 Main Estimates.

1.2 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities (Section 6.0) includes the Agency’s spending authorities granted by Parliament, or received from Treasury Board Central Votes, and those used by the Agency consistent with the Main Estimates and Supplementary Estimates for the 2019-20 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.

The Agency 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.

2.0 Highlights of Fiscal Quarter Results

This section highlights the significant items that contributed to the net decrease in resources available for the year, as well as a net increase in actual expenditures for the third quarter of 2019-20, ending December 31, 2019.

The following graph provides a comparison of the net budgetary authorities and expenditures as of December 31, 2018 and December 31, 2019 for the Department’s combined Vote 1, Vote 5, Vote 10 and Statutory Votes.

**Comparison of Budgetary Authorities and Expenditures as at December 31, 2018 and December 31, 2019**

As at December 31, 2019, the Agency had a total of $650.3 million in authorities available for spending compared to $697.0 million on December 31, 2018. The Agency’s year-to-date expenditures as at December 31, 2019 were $439.0 million compared to $483.8 million on December 31, 2018. Both authorities and expenditures fluctuate as the year progresses to reflect additional funding received throughout the fiscal year.

2.1 Significant Changes to Authorities

When compared to the third quarter of the previous fiscal year, the authorities available for spending for the year have decreased by $46.7 million or 7 percent, from $697.0 million to $650.3 million. This change in authorities is comprised of an increase in Vote 1 – Operating Expenditures ($6.7 million), an increase in Vote 5 – Capital ($1.2 million) and a decrease in Vote 10 - Grants and Contributions ($55.0 million) as well as an increase in Budgetary Statutory Authorities ($0.4 million).

Vote 1 – Operating Expenditures

The Agency’s Vote 1 increased by $6.7 million or 2 percent, mainly due to:

Funding for the Backup Pandemic Influenza Vaccine Supply;
Funding for the National Dementia Strategy;
Funding for Collective Bargaining Agreements; and
Funding for the reimbursement of eligible paylist expenses.

Offset by:

Sunset of Medical Countermeasures - Smallpox and Anthrax Preparedness funding;
Sunset of the G7 Summit in 2018; and
Sunset of Government advertising programs.

Vote 5 – Capital Expenditures

The Agency’s Vote 5 increased by $1.2 million or 16 percent, mainly due to:

Funding from the Capital Budget Carry Forward.

Vote 10 - Grants and Contributions (G&C)

The Agency’s Vote 10 decreased by $55.0 million or 18 percent, mainly due to:

Sunset of Healthy Seniors Pilot Project in New Brunswick funding; and
A reduction in funding for Brain Health.

Offset by:

Funding for Support for Canadians Affected by Autism Spectrum Disorder;
Funding for Taking Action to Prevent and Address Gender-Based Violence, Harassment and Discrimination;
Funding for Building a Pan-Canadian Suicide Prevention;
Funding for Supporting Canada's Official Languages;
Funding for Indigenous Early Learning and Child Care Transformation Initiative;
A change in funding level for an external transfer to Canadian Institutes of Health Research for the Population Health Intervention Research;
Funding for Addressing the Opioid Crisis; and
Funding for the Drug Overdose Crisis in Canada.

2.2 Significant Changes to Expenditures

The third quarter expenditures increased by $5.5 million, or 4 percent, in 2019-20, compared to 2018-19, from $122.9 million to $128.4 million.

This overall increase in spending is mainly due to a:

15% increase in Vote 1 – Operating Expenditures of $10.9 million (from $70.9 million to $81.8 million);
39% increase in Vote 5 – Capital Expenditures of $0.4 million (from $0.9 million to $1.3 million); and
14% decrease in Vote 10 - Grants and Contributions of $5.9 million (from $41.2 million to $35.3 million).

Vote 1 – Operating Expenditures

The Agency’s third quarter 2019-20 Vote 1 expenditures increased by $10.9 million over the same quarter in 2018-19 mainly due to increased staffing, payment of Collective Bargaining Agreements, purchases of pharmaceutical equipment and the payments for the Pandemic and Influenza Readiness Contract.

Vote 5 – Capital Expenditures

The Agency’s third quarter 2019-20 Vote 5 expenditures increased by $0.4 million over the same quarter in 2018-19 mainly due to the acquisition of computer and lab equipment.

Vote 10 - Grants and Contributions (G&C)

The Agency’s Vote 10 third quarter 2019-20 expenditures decreased by $5.9 million over the same quarter in 2018-19 mainly due to the timing of payments for contributions agreements.

3.0 Risks and Uncertainty

The dominant financial risks faced by the Agency relate to the nature of its mandate and the need to respond to unforeseeable events such as an influenza pandemic or the current 2019 novel coronavirus. Significant surge capacity would need to be activated in these instances.

To manage this financial risk, the Agency continues to strengthen its preparation and responsiveness to public health emergencies and public health capacity. In an emergency situation, the Agency would first consider internal re-allocation of resources in order to address unforeseeable events. The federal government also has systems and processes in place for departments to access funds, should an emergency arise.

4.0 Significant Changes in Relation to Operations, Personnel and Programs

There have been no significant changes in relation to operations, personnel and programs during this quarter.

5.0 Approval by Senior Officials

Approved by:

Tina Namiesniowski, President
Public Health Agency of Canada
Ottawa, Canada
Date:

Carlo Beaudoin, Chief Financial Officer
Public Health Agency of Canada
Ottawa, Canada
Date:

6.0 Statement of Authorities (unaudited)