Public Safety Canada Quarterly Financial Report for the quarter ended June 30, 2022

1.0 Introduction

This quarterly financial report for the period ending June 30, 2022 has been prepared by management as required by section 65.1 of the Financial Administration Act, in the form and manner prescribed by Treasury Board. The report should be read in conjunction with the Main Estimates and Supplementary Estimates (A).

This quarterly financial report has not been subject to an external audit or review. However, it has been reviewed by the Departmental Audit Committee prior to approval by the Deputy Minister.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2022-23 Departmental Plan and the 2022-23 Main Estimates.

1.1 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities table includes the Department's spending authorities granted by Parliament, or received from Treasury Board Central Votes, and those used by the Department consistent with the Main Estimates and the Supplementary Estimates (A) for the 2022-23 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet the information needs concerning the use of spending authorities.

The authority of Parliament is required before funds 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.

Public Safety Canada 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, as do the expenditures presented in this report.

2.0 Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

The following graph provides a comparison of the net budgetary authorities and expenditures as of June 30, 2022 and June 30, 2021 for the Department's combined:

• Vote 1: Operating Expenditures;
• Vote 5 and Statutory: Grants and Contributions;
• Statutory Votes:
• Employee Benefit Plans; and
• Minister's Salary and Car Allowance.

Image description

Budgetary Authorities and Expenditures Comparison

Starting from the left hand side, the "first" column in the graph indicates that the Department authorities are at $1,707.1 million for fiscal year 2022-23. The year-to-date expenditures of $187.6 million reported at the end of the first quarter of the 2022-23 fiscal year are shown under the "second" column. The "third" column in the graph depicts the 2022-23 authorities which were at $1,139.6 million at the end of June 2021. The 2021-22 year-to-date expenditures of $104.2 million reported at the end of the first quarter of the 2021-22 fiscal year are shown under the "forth" column.

2.1 Significant Changes to Authorities

For the period ending June 30, 2022, the authorities provided to the Department include Main Estimates and Supplementary Estimates (A). The 2021-22 authorities for the same period included the Main Estimates and Supplementary Estimates (A). The Statement of Authorities table presents a net increase of $567.5 million (49.8 percent) compared to those of the same period of the previous year (from $1,139.6 million to $1,707.1 million).

Operating Expenditures authorities have increased by $7.1 million (3.7 percent) (from $194.0 million to $201.1 million), which is primarily attributable to:

• An increase of $6.1 million for relocation and accommodations for the Government Operations Center (Budget 2016);
• An increase of $6.0 million in additional funding for the First Nations and Inuit Policing Program;
• An increase of $3.8 million for the renewal of the Aboriginal Community Safety Planning Initiative; and
• An increase of $2.0 million in new funding to establish the Building Safer Communities Fund.

These increases are primarily offset by the following expired programs for which renewal plans are underway:

• A decrease of $8.8 million for the buy-back program for assault-style firearms and a national social marketing campaign; and
• A decrease of $2.2 million for the National Strategy for Protecting Children from Sexual Exploitation Online program.

Grants and Contributions (G&C) authorities have increased by $559.2 million (60.2 percent) (from $928.2 million to $1,487.4 million), which is primarily attributable to:

• An increase of $477.9 million for new funding for the Disaster Financial Assistance Arrangements (DFAA) program based on forecasts from provinces and territories for expected disbursements under the DFAA for 2022-23;
• An increase of $91.8 million in additional funding for the First Nations and Inuit Policing Program;
• An increase of $58.8 million in new funding for the Building Safer Communities Fund;
• An increase of $14.3 million in additional funding for the Initiative to Take Action Against Gun and Gang program; and
• An increase of $11.3 for new funding for the First Nation and Inuit policing facilities program.

These increases are primarily offset by the following decrease:

• A decrease of $35.0 million for the expiry of the funding to support the Canadian Red Cross's urgent relief efforts (COVID-19);
• A decrease of $35.0 million for the expiry of the funding for the Safe Restart Agreement for federal investments in testing, contact tracing and data management (COVID-19); and
• An decrease of $20.0 million for the expiry of the funding for the National Disaster Mitigation Program, which is in the process of being renewed.

Budgetary Statutory authorities have increased by $1.2 million (6.8 percent) in 2022-23 primarily attributable to the Employee Benefits Plan associated with new salary funding received in Main Estimates.

2.2 Significant Variances from Previous Year Expenditures

First Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended June 30, 2022 have increased by $83.4 million (80.0 percent) (from $104.2 million to $187.6 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

• Personnel expenditures have increased by $4.1 million, primarily attributable to an increase in salary funding received to support the department's initiatives.
• Other operating expenditures have increased by $1.7 million primarily attributable to IT professional Services.
• Transfer payments expenditures have increased by $76.5 million (118.2 percent) primarily attributable to:
  • An increase of $64.6 million due to the timing of payments for the Disaster Financial Assistance Arrangements (DFAA) program;
  • An increase of $8.8 million due to the timing of payments for the Memorial Grant Program for First Responders; and
  • An increase of $7.4 million due to the timing of payments for the First Nations and Inuit Policing Program.

Primarily offset by the following decrease:

• A decrease of $3.8 million due to the timing of payments for the contribution in Support of the Safer Communities Initiative.

3.0 Risks and Uncertainty

Disaster Financial Assistance Arrangements

The Disaster Financial Assistance Arrangements (DFAA) contribution program presents a greater level of uncertainty than other PS grants and contributions programs given that it represents a significant portion of the PS budget and that it is subject to unforeseen events. The DFAA contribution program was established in 1970 to provide a consistent and equitable mechanism for federal sharing of provincial and territorial costs for natural disaster response and recovery where such costs would place an undue burden on a provincial or territorial economy.

There are currently 63 active natural disasters for which Orders in Council (OiC) have been approved, authorizing the provision of federal financial assistance under the DFAA, and for which final payments have not yet been made. Public Safety's total outstanding share of liability under the DFAA with regards to these 63 events is $7.17 billion, the majority of which is expected to be paid out over the next five years.

DFAA liability has increased by $4.5 billion from $2.67 billion in the third quarter of 2021-22 to $7.17 billion in the first quarter of 2022-23. Variations in the DFAA liability are mainly attributable to:

• Changes for newly approved OiCs, which authorize funding related to recent natural disasters for which provinces and territories require federal sharing of costs;
• Changes in the estimates of the existing natural disasters; and,
• Changes for payments issued under the existing obligation.

The following are the most significant events within Public Safety Canada's DFAA liability:

• British Columbia 2021 November Storm ($3.5 billion);
• British Columbia 2021 Flood & Landslides ($956 million);
• Manitoba 2011 Spring Flood ($525 million);
• Alberta 2013 June Flood ($496 million);
• British Columbia 2021 Wildfires ($208 million); and,
• Quebec 2019 Spring Flood ($208 million).

Updates to the DFAA liability as a result of changes to the estimates of the existing natural disasters, are completed and approved twice a year with the last update having been conducted in winter 2021-22 and is reflected in the current Quarterly Financial Report.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

On May 13, 2022, Jill Wherrett retired from Public Safety Canada's role as Assistant Deputy Minister of the Portfolio Affairs and Communications Branch.

On June 20, 2022, Tricia Geddes was appointed Associate Deputy Minister of Public Safety.

On June 27, 2022, Sébastien Aubertin-Giguère was appointed as the Associate Assistant Deputy Minister for the National and Cyber Security Branch.

5.0 Approval by Senior Officials

Approved as required by the Policy on Financial Resource Management, Information and Reporting:

6.0 Statement of Authorities (unaudited)

7.0 Departmental budgetary expenditures by Standard Object (unaudited)

Date modified:

2022-08-29