Public Health Agency of Canada Quarterly Financial Report - For the quarter ended June 30, 2018

Table of contents

• 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
    • Vote 1 - Operating Expenditures
    • Vote 5 - Capital Expenditures
    • Vote 10 - Grants and Contributions (G&C)
  • 2.2 Significant Changes to Expenditures
    • Vote 1 - Operating Expenditures
    • Vote 10 - Grants and Contributions (G&C)
• 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 2018-19 Departmental Plans and the 2018-19 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 2018-19 fiscal year.

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 increase in resources available for the year, as well as a net decrease in actual expenditures for the first quarter of 2018-19, ending June 30, 2018.

The following graph provides a comparison of the net budgetary authorities and expenditures as of June 30, 2017 and June 30, 2018 for the Department's combined Vote 1, Vote 5, Vote 10 and Statutory Votes.

Comparison of Budgetary Authorities and Expenditures as at June 30, 2017 and June 30, 2018 - Text description

Bar chart showing a comparison of the net budgetary authorities and expenditures as of June 30, 2018 and June 30, 2017 for the Agency's combined Vote 1, Vote 5, Vote 10 and Statutory Votes. As at June 30, 2018, PHAC had a total of $663.4 million in authorities available for spending compared to $587.4 million on June 30, 2017. PHAC's expenditures as at June 30, 2018 were $133.6 million compared to $155.1 million on June 30, 2018.

As at June 30, 2018, the Agency had a total of $663.4 million in authorities available for spending compared to $587.4 million on June 30, 2017. The Agency's expenditures as at June 30, 2018 were $133.6 million compared to $155.1 million on June 30, 2017. 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 first quarter of the previous fiscal year, the authorities available for spending for the year have increased by $76.0 million or 14%, from $587.4 million to $663.4 million. This change in authorities is comprised of an increase in Vote 1 - Operating Expenditures ($6.0 million), a decrease in Vote 5 - Capital ($1.3 million) and an increase in Vote 10 - Grants and Contributions ($70.5 million) as well as an increase in Budgetary Statutory Authorities ($0.8 million).

Vote 1 - Operating Expenditures

The Agency's Vote 1 increased by $6.0 million or 2.0%, mainly due to:

• Funding for Adapting to the Impacts of Climate Change;
• Funding related to Government advertising programs;
• Transfer from the Treasury Board Secretariat of Canada to the Public Health Agency of Canada for the Collective Bargaining Agreements;
• Funding for Canada's G7 Presidency in 2018 and hosting the Charlevoix Summit and supporting events;

Offset by:

• A decrease in funding profile to Acquire Medical Countermeasures for Smallpox and Anthrax Preparedness; and
• A decrease in funding from the 2017-18 reprofile for Reinvestment of royalties from intellectual property.

Vote 5 - Capital Expenditures

The Agency's Vote 5 decreased by $1.3 million or 19%, mainly due to:

• A decrease in funding for 2017-18 reprofile of Reinvestment of royalties from intellectual property; and
• A decrease in funding for the 2017-18 reprofile for Ebola Preparedness and Response Initiatives to protect Canadians at home and abroad.

Vote 10 - Grants and Contributions (G&C)

The Agency's Vote 10 increased by $70.5 million or 33%, mainly due to:

• An increase in funding for the Healthy Seniors Pilot Project;
• An increase in funding for Strengthening the Canadian Drugs and Substances Strategy;

Offset by:

• A decrease due to the sunset of funding for the Indigenous Early Learning and Child Care Infrastructure and Programming.

2.2 Significant Changes to Expenditures

The first quarter expenditures decreased by $21.5 million, or 14%, in 2018-19, compared to 2017-18, from $155.1 million to $133.6 million.

This overall increase in spending is mainly due to a:

• 6% decrease in Vote 1 - Operating Expenditures of $3.4 million (from $57.7 million to $54.3 million); and
• 20% decrease in Vote 10 - Grants and Contributions of $18.4 million (from $90.2 million to $71.8 million).

Vote 1 - Operating Expenditures

The Agency's Vote 1 first quarter 2018-19 expenditures decreased by $3.4 million over the same quarter in 2017-18 mainly due to payments made in 2017-18 for Medical Countermeasures for Smallpox and Anthrax Preparedness.

Vote 10 - Grants and Contributions (G&C)

The Agency's Vote 10 first quarter 2018-19 expenditures decreased by $18.4 million over the same quarter in 2017-18 mainly due to the timing of contribution payments in the first quarter.

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. 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:

• Dr. Siddika Mithani, 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)

Public Health Agency of Canada
For the quarter ended June 30, 2018

7.0 Agency Budgetary Expenditures by Standard Object (unaudited)

Public Health Agency of Canada
For the quarter ended June 30, 2018