Quarterly Financial Report
For the quarter ended December 31, 2013
Management Statement for the Quarter Ending December 31, 2013 - Revised

Erratum

Date: March 18, 2014

Location: Departmental budgetary expenditures by Standard Object (unaudited) — Planned expenditures for the year ending March 31, 2013, Acquisition of machinery and equipment.

Revision: "Acquisition of machinery and equipment, $873 thousands" replaces "Acquisition of machinery and equipment, $2,873 thousands".

Rationale for the revision: Original amount transcribed into HTML in error.

Location: Departmental budgetary expenditures by Standard Object (unaudited) — Planned expenditures for the year ending March 31, 2013, Total net budgetary expenditures.

Revision: Note that reads "Amounts may not add as shown due to rounding" added at bottom of table "Total Authorities and the Departmental budgetary expenditures by Standard Object (unaudited)".

Rationale for the revision: The additional note will clarify totals not matching due to rounding

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 the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates, as well as Canada's Economic Action Plan 2012 (Budget 2012).

Infrastructure Canada's raison d'être is to lead the Government of Canada's efforts in addressing Canada's public infrastructure challenges. Strong, modern, world-class public infrastructure is a key factor in achieving the Government of Canada's priorities of a stronger economy, a cleaner environment and more prosperous, safer communities.

Further information on Infrastructure Canada's mandate, responsibilities, and programs can be found in the Infrastructure Canada 2013-14 Main Estimates.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Infrastructure Canada spending authorities granted by Parliament and those used by Infrastructure Canada consistent with the Main Estimates for the 2013-14 fiscal year (FY). 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.

Infrastructure 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 part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012.  As a result the measures announced in the Budget 2012 could not be reflected in the 2012-13 Main Estimates.

In fiscal year 2012-13, frozen allotments were established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In 2013-14, the changes to departmental authorities were reflected in the 2013-14 Main Estimates tabled in Parliament.

It should be noted that this quarterly report has not been subject to an external audit or review.

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

This section highlights the significant items that contributed to the change in resources available for use from 2012-13 to 2013-14 and in actual expenditures from the quarter ended December 31, 2012 and the quarter ended December 31, 2013.

In 2013-14, Infrastructure Canada is continuing to implement programs under the existing Building Canada Plan, as well as other existing programs, and is conducting advance planning including the development of parameters for the New Building Canada Plan announced as part of Economic Action Plan 2013. The New Building Canada Plan provides approximately $53 billion over 10 years in new and existing funding to build roads, bridges, subways, commuter rail and other public infrastructure in cooperation with provinces, territories and municipalities including an indexed permanent Gas Tax Fund, $10 billion for a Provincial-Territorial Infrastructure Component (National and Regional Projects and Small Communities Fund) that will support projects of national, regional and local significance in communities across the country, and $4 billion for a National Infrastructure Component that will support investments in projects of national significance.

Figure 1: Expenditures Compared to Annual Authorities (as at December 31st, 2013)

Figure 1 - Bar graph of Expenditures Compared to Annual Authorities (as at December 31st)

As can be seen in Figure 1, in the current year, Infrastructure Canada has $4.2 billion in Total Authorities as of the end of Quarter 3 (Q3), compared to $5.3 billion at Q3 in the prior year, representing a total decrease of approximately 22% or $1.1 billion. This decrease can be explained almost entirely by a net decrease of $1.05 billion in Contribution authorities (Vote 45 2012-13 / Vote 5 2013-14) which is in line with recipients' cash flow requirements. Following consultations with partners, authorities are sought to match the cash requirements of infrastructure projects. As infrastructure projects are being completed, the total authorities sought to match the cash requirements are lower in 2013-14 than they were in 2012-13.

Operating authorities also decreased by 15% or $8.0 million due to:

  • the removal of $3.5 million from Infrastructure Canada's authorities to be held centrally for the provision for accommodation,
  • $5 million in cost savings and operational efficiencies, and
  • Increase of $0.5 million from last year related on the total amount received for the paylist expenditures, operating budget carry forward and the Procurement for the Workplace Technology Device software.

Year to date Contribution expenditures have increased by approximately 13% or $341.6 million in comparison to last year. Significant changes are as follows:

Program Fund Increase/(Decrease) versus Prior Year-to-date
(000's)
% Change
Green Infrastructure Fund 50,392 1040%
Border Infrastructure Fund 36,190 645%
Canada Strategic Infrastructure Fund 165,412 182%
Building Canada Fund — Major Infrastructure Component 366,080 135%
Provincial-Territorial Infrastructure Base Fund (101,857) -69%
  • The increase under the Green Infrastructure Fund was due to an increase in the number of payments made to date in comparison to last year.
  • The increases in the Border Infrastructure Fund, the Building Canada Fund — Major Infrastructure Component as well as the Canada Strategic Infrastructure Fund are the result of advances to Federal Delivery Partners which deliver some infrastructure programs on behalf of Infrastructure Canada. These advances are made in anticipation of expenses being incurred, which were sent earlier this year than last year.
  • A decrease in payments under the Provincial-Territorial Infrastructure Base Fund was due primarily to a large payment to a province in Q3 of 2012-13 which was not required in 2013-14.

In addition, operating expenditures as of December 31 have decreased 14% or $4.4 million compared to the same period during 2012-13.

Although minor in comparison to the overall authorities and spending, there were several notable variances within the Operating vote. The most significant of these is a 78% decrease in Transportation and communication expenditures, largely as a result of reduced travel as Infrastructure Canada focuses on planning for the implementation of new programs under Economic Action Plan 2013. Other subsidies and payments decreased by 76% compared to 2012-13 when a payment for a claim against the Crown was issued. Rental expenditures have decreased by 73%, due to a requirement to transfer the responsibility for the provision of accommodation to Public Works and Government Services Canada and the deferred billing of residual costs above the 13% standard threshold until fiscal year end. Personnel costs continue to be lower than authorities by 7% year to date over the same time period in 2012-13 due to employee turnover.

Notable Changes in Expenditures by Standard Object Increase/(Decrease) versus Prior Year-to-date
(000's)
% Change
Transportation and communications (295) -78%
Other subsides and payments (66) -76%
Rentals (2,423) -73%
Personnel (1,900) -7%

Overall, Infrastructure Canada has spent 71% of its current Total Authorities as of December 31, 2013 compared to 49% at the same point in the prior FY.

Risks and Uncertainties

Infrastructure Canada has no ongoing base level of funding for administration and operating costs. Until 2013-14, its operating requirements have always been funded entirely from infrastructure programs and related administrative costs are confirmed by Treasury Board on an annual basis. In 2013-14, Infrastructure Canada's operating budget has been sourced from the fiscal framework. Infrastructure Canada is working closely with central agencies to secure the necessary funding to deliver existing programs and implement the new programs announced in Canada's Economic Action Plan 2013.

Infrastructure Canada has adopted a revised forecasting method to better assess and estimate the cash flow requirements of its partners to reduce the risk that actual transfer payment expenses will be less than budget and minimize the need to seek authority to re-profile lapsed funds. Nonetheless, because of the varied factors (weather, labour shortages, etc.) which influence the cash flow requirements for major projects and which are beyond the control of Infrastructure Canada and its partners, the risk of lapsed funding remains. To mitigate this risk, Infrastructure Canada maintains constant contact with partners to keep current on cash flow changes and shares best practices to expedite claims processing.

Significant Changes in Relation to Operations, Personnel and Programs

Yazmine Laroche was appointed Associate Deputy Minister, Transport, Infrastructure and Communities on November 25, 2013.

Budget 2012 Implementation

Infrastructure Canada continues ongoing efforts to implement measures announced in Budget 2012 to refocus government and programs, make it easier for Canadians and businesses to deal with their government, modernize and reduce the back office and carefully and thoughtfully exercise budgetary restraint.

Approval by Senior Officials

Approved by:

Original signed by:

Louis Lévesque,
Deputy Head

Date

Su Dazé,
Chief Financial Officer

Date

Signed in Ottawa, Canada, February 28, 2014

Quarterly Financial Report
For the quarter ended December 31, 2013
Statement of Authorities (unaudited)

Fiscal year 2013-2014
(in thousands of dollars)
  Total available for use for the year ending1
March 31, 2014
Used during the quarter ended
December 31, 2013
Year-to-date used at
quarter-end
Vote 1 - Net Operating expenditures 45,848 9,511 26,667
Vote 5 - Contributions 4,102,031 1,415,700 2,902,193
Statutory
(S) - Contributions to employee benefit plans 4,986 1,247 3,740
(S) - Green Infrastructure Fund 0 0 0
Total Budgetary Authorities 4,152,866 1,426,457 2,932,600
Non-budgetary Authorities 0 0 0
Total Authorities 4,152,866 1,426,457 2,932,600

Statement of Authorities (unaudited) (continued)

Fiscal year 2012-2013
(in thousands of dollars)
  Total available for use for the year ending1,2
March 31, 2013
Used during the quarter ended
December 31, 2012
Year to date used at
quarter-end
Vote 40 - Operating expenditures 53,861 10,940 31,111
Vote 45 - Contributions 5,153,951 1,062,716 2,560,588
Statutory
(S) - Contributions to employee benefit programs 4,973 1,243 3,730
(S) - Green Infrastructure Fund 99,418 2,607 3,419
Total Budgetary Authorities 5,312,203 1,077,507 2,598,848
Non-budgetary Authorities 0 0 0
Total Authorities 5,312,203 1,077,507 2,598,848

[1]Includes only Authorities available for use and granted by Parliament at quarter-end.

[2]Total available for use does not reflect measures announced in Budget 2012.

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Quarterly Financial Report
For the quarter ended December 31, 2013
Departmental budgetary expenditures by Standard Object (unaudited)3

Fiscal year 2013-2014
(in thousands of dollars)
  Planned expenditures for the year ending
March 31, 2014
Expended during the quarter ended
December 31, 2013
Year-to-date used at
quarter-end
Expenditures:
Personnel 34,774 8,084 24,221
Transportation and communications 640 26 83
Information 225 47 158
Professional and special services 10,545 1,861 4,959
Rentals 2,530 698 888
Repair and maintenance 12 7 9
Utilities, materials and supplies 99 12 32
Acquisition of land, buildings and works 0 0 0
Acquisition of machinery and equipment 276 17 36
Transfer payments 4,102,031 1,415,700 2,902,193
Public debt charges 0 0 0
Other subsidies and payments 1,734 4 21
Total net budgetary expenditures 4,152,866 1,426,457 2,932,600

Departmental budgetary expenditures by Standard Object (unaudited) (continued)3

Fiscal year 2012-2013
(in thousands of dollars)
  Planned expenditures for the year ending
March 31, 2013
Expended during the quarter ended
December 31, 2012
Year to date used at
quarter-end
Expenditures:
Personnel 33,510 8,818 26,121
Transportation and communications 533 113 377
Information 687 54 202
Professional and special services 10,443 1,765 4,651
Rentals 3,746 1,384 3,311
Repair and maintenance 254 0 2
Utilities, materials and supplies 145 20 48
Acquisition of land, buildings and works 0 0 0
Acquisition of machinery and equipment 873 33 42
Transfer payments 5,253,370 1,065,324 2,564,007
Public debt charges 0 0 0
Other subsidies and payments 8,644 (4) 87
Total net budgetary expenditures 5,312,203 1,077,507 2,598,848

[3]Amounts may not add as shown due to rounding.

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