Office of Infrastructure of Canada
Quarterly Financial Report for the quarter ended December 31, 2015

Statement outlining results, risks and significant changes in operations, personnel and programs

Erratum

Date: March 29, 2016

Location: Statement of Authorities (unaudited), Used during the quarter ended December 31, 2015.

Revision:

Originally Reported
Used during the Quarter ended
December 31, 2015
Revised
Used during the Quarter ended
December 31, 2015

Vote 1 – Operating expenditures

10,322

19,686

Vote 5 – Capital expenditures

38,466

5,133

Vote 10 – Contributions

186,092

81,569

Budgetary Statutory Authorities

(S) – Contributions to employee benefit plans

4,021

1,392

(S) – Gas Tax Fund

895,216

902,715

(S) – Minister salary and car allowance

-

-

Total

1,134,117

1,010,495

Rationale for the revision: Original amount reported was not correct.

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 and Supplementary Estimates (A).

Infrastructure Canada’s (INFC) 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 priority for the Government of Canada.

Further information on INFC’s mandate, responsibilities, and programs can be found in INFC’s 2015-16 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 INFC’s spending authorities granted by Parliament and those used by INFC consistent with the Main Estimates and Supplementary Estimates for the 2015-16 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 monies 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

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.

Note that this report differs from the 2015-16 Main Estimates with respect to total departmental funding, reflecting the following adjustments since these were tabled: current year Supplementary Estimates (A) funding received, which included operating and capital funding for the New Bridge for the St. Lawrence Corridor (NBSLC) projectFootnote1.

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 Results

This section highlights the significant items that contributed to the change in resources available for use from 2014-15 to 2015-16 and in actual expenditures from December 31, 2014 to December 31, 2015.

Authorities

As shown in the Statement of Authorities, INFC’s total authorities for 2015-16 are $3.7 billion as of the end of Quarter 3 (Q3) and represent a $7.4 million decrease, compared to the same quarter in the prior year. This decrease is primarily related to the following:

  • Operating – a decrease of $5.3 million mostly due to the decreased funding for the NBSLC project for 2015-16 compared to 2014-15.
  • Capital – a decrease of $35 million mostly related to the decreased funding required for the NBSLC project for 2015-16 compared to 2014-15.
  • Contributions (both Voted and Statutory) – an increase of $33.9 million, reflective of an increase in funding levels under the New Building Canada Fund (NBCF).
  • Statutory Contributions to Employee Benefit Plan (EBP) – a decrease of $1.0 million reflects a reduction of the EBP deduction rate for 2015-16 compared to 2014-15.

Graph 1: Comparison of Authorities Available as of December 31, 2015 and December 31, 2014

Graph 1: Bar graph showing the comparison of authorities available for use as of December 31, 2015 and December 31, 2014

Text description of Graph 1

Expenditure Analysis

Expenditures in Q3 were $1.134 billion, compared to $1.226 billion in Q3 of 2014-15, bringing total budgetary expenditures for the year-to-date to $2.537 billion in 2015-16, compared to $2.630 billion in 2014-15. This represents a year-to-date decrease of 3.5%. The source of the relative decrease is demonstrated in the graphs and analysis, by authority category, below.

Graph 2: Comparison of Authorities Used as of December 31, 2015 and December 31, 2014

Graph 2: Bar graph showing the comparison of authorities used year-to-date as of December 31, 2015 and December 31, 2014

Text description of Graph 2

Transfer Payments – Contributions

Year-to-date Contribution (Voted and Statutory) expenditures as of the end of Q3 have decreased by approximately 4.7% or $120 million in comparison to last year due to fewer advances provided to Federal Delivery Partners who deliver projects on the Department’s behalf and reduced expenditures in older sunsetting programs. The Department spent $2.453 billion so far this year compared to $2.573 billion in 2014-15.

Graph 3: Comparison of Authorities used for Contributions (Voted and Statutory) as of December 31, 2015 and December 31, 2014

Graph 3: Bar graph showing the comparison of authorities used for Contributions (Voted and Statutory) during the quarter, as well as year-to-date, as of December 31, 2015 and December 31, 2014

Text description of Graph 3

Significant changes in year-to-date Contributions (Voted and Statutory) between December 2014 and December 2015 were as follows:

Program Fund

Increase / (Decrease)
Versus Prior Year-to-Date

$ Change
(000's)

% Change

Border Infrastructure Fund

(2,217)

(28)

Canada Strategic Infrastructure Fund

(68,264)

(63)

Green Infrastructure Fund

(6,907)

(49)

Municipal Rural Infrastructure Fund

(10,000)

(100)

National Recreational Trails Program

(3,000)

(60)

New Building Canada Fund – Provincial- Territorial Infrastructure Component –National and Regional Projects

8,706

100

New Building Canada Fund – Provincial- Territorial Infrastructure Component –Small Communities Fund

1,157

100

Provincial-Territorial Infrastructure Base Fund

(12,500)

(100)

  • Expenditures under the Border Infrastructure Fund have decreased due to fewer advances to Federal Delivery Partners for anticipated expenditures.
  • The decrease in expenditures under the Canada Strategic Infrastructure Fund reflects fewer advances to Federal Delivery Partners due to a lower amount of anticipated expenditures.
  • The decrease in expenditures under the Green Infrastructure Fund reflects fewer payments being processed compared to the same time in 2014-15.
  • The decrease in Municipal Rural Infrastructure Fund spending reflects that there have been no expenditures in 2015-16 since the program ended in 2014-2015.
  • Expenditures for the National Recreational Trails Program have decreased since Q3 last year due to the timing of payments processed in 2015-16.
  • The increase in expenditures under the New Building Canada Fund – Provincial-Territorial Infrastructure Component – Small Communities Fund as of Q3 in 2015-16 reflects the first payments to be processed for this new program.
  • The increase in expenditures under the New Building Canada Fund – Provincial-Territorial Infrastructure Component –National and Regional Projects as of Q3 in 2015-16 reflects the first payments to be processed for this new program.
  • The decrease in expenditures for the Provincial-Territorial Infrastructure Base Fund is due to the timing of payments.

Operating Expenditures

Authorities used for Operating Expenditures as of December 31, 2015 have decreased 26% or $14.5 million compared to the same period in 2014-15. Further details are provided later in this report.

Graph 4: Comparison of Authorities Used for Operating Vote as of December 31, 2015 and December 31, 2014

Graph 4 - Bar graph showing the comparison of authorities used for operating vote during the quarter, as well a year-to-date, as of December 31, 2015 and December 31, 2014

Text description for Graph 4

Contributions to Employee Benefit Plan

During the current fiscal year-to-date, INFC has made $3.9 million more in payments to Employee Benefit Plans because of an increased number of full time equivalents compared to 2014-15. This is the result of the transfer of employees from Transport Canada to Infrastructure Canada for the NBSLC project, who were at INFC for only part of 2014-15.

Capital

During the current year-to-date, INFC has incurred $38 million in capital expenditures compared to no capital expenditures during the same period in 2014-2015. This is mainly the result of acquisition of land, buildings and works related to the NBSLC project.

Departmental Budgetary Expenditures by Standard Object

The planned Departmental Budgetary Expenditures by Standard Object are set out in the table at the end of this report. Aggregate year-to-date expenditures in 2015-16 decreased by $92 million, compared with the same period last year, primarily due to Transfer Payments as explained above. Although minor in proportion to the overall authorities and spending, there were also some material variances in spending by standard object within the Operating vote.

Material Variances to Expenditures by Standard Object

Increase / (Decrease)
Versus Prior Year-to-Date

$ Change
(000's)

% Change

Personnel

5,356

23

Transportation and Communications

(27)

(6)

Information

11

6

Professional and Special Services

2,595

9

Rentals

(111)

(12)

Repairs and Maintenance

905

5,324

Acquisition of Land, Buildings and Works

20,662

100

Acquisition of Machinery and Equipment

(446)

(75)

Transfer Payment

(120,290)

(5)

Other Subsidies and Payments

(1,030)

(93)

  • Personnel expenditures were up approximately 23% or $5.4 million year-to-date in 2015-16 compared to 2014-15. This increase is primarily related to the transfer of employees from Transport Canada to Infrastructure Canada for the NBSLC project who were at INFC for only part of 2014-15.
  • The variance in Transportation and Communications is largely related to a decrease in travel compared to 2014-15.
  • The increase in Information expenses is mainly due to a cost increase for media monitoring.
  • The variance in Professional and Special Services is a result of more specialized services, such as engineering consultants in construction, being used for the implementation of the NBSLC project.
  • The variation in Rentals is due to decreased expenditures for software license fees and application development.
  • The variation in Repairs and Maintenance is due to increased expenditures related to the NBSLC project.
  • The variation in Land, Buildings and Works relates to the purchase and capitalization of land related to the NBSLC project.
  • The decrease in Acquisition of Machinery and Equipment can be explained by more equipment purchased in 2014-15 for the NBSLC project such as furniture, storage cabinets and specialized printers.
  • The decrease in expenditures in the Other Subsidies and Payments category is reflective of the one-time transition payment in 2014-15 for the implementation of salary payment in arrears by the Government of Canada.

Overall, Infrastructure Canada has spent 69% of its current Total Authorities as of December 31, 2015 compared to 71% at the same point in the prior year.

Risks and Uncertainties

There are challenges from several sources impacting the ability of the Department to deliver on current programs, the NBCF and future programs. The ten-year operating funding stream is the highest in the first three years and then declines. Infrastructure programs are contingent on the execution by provincial, territorial and municipal partners for timely delivery, cost-sharing and joint project management. These factors could lead to delays in submissions, approvals and provision of timely infrastructure funding, creating the possibility that the pattern of funding approved may not reflect the actual pattern of work. INFC continues to review NBCF project proposals and is working diligently with its stakeholders on implementing the existing agreements for the NBCF. The Department is also ensuring that it has in place strategies, plans and resources to effectively deliver new and current programs.

Following the swearing-in of a new government in November 2015, responsibility for the Windsor-Detroit Bridge Authority (WDBA) was transferred to the Minister of Infrastructure and Communities. The WDBA is a federal Crown corporation responsible for the procurement process for the design, construction, operation and maintenance for the new publicly-owned Gordie Howe International Bridge between Windsor, Ontario and Detroit, Michigan through a public-private partnership. The Minister of Infrastructure and Communities was also designated as the Minister responsible for federal matters relating to the Toronto Waterfront Revitalization Initiative (TWRI). INFC is currently studying the potential impact of these changes on departmental operations and finances.

The integrity of the Champlain Bridge could be compromised earlier than expected, leading to its complete or partial closing before the planned new bridge is in service. This could result in significant overtime, pressure on capacity, securing approvals to move money to earlier years in the fiscal framework and re-shifting some priorities. To address these risks, the Department is relying on the Jacques Cartier and Champlain Bridges Incorporated’s (JCCBI) extensive project plan that covers the repair, maintenance and operation of its structures. JCCBI was allocated funding for 2014-2019 through Budget 2014 and other sources to support its comprehensive project plan that covers the repairs, maintenance and operation of all structures under its responsibility, including the Champlain Bridge. Further, there are working groups and interdepartmental teams who will be regularly monitoring the project timeliness.

The number of current and future large scale whole-of-government initiatives (i.e. projects like Email Transformation Initiative, transition to MyGCHR, data centre consolidation, new pay system, direct deposit initiative, financial management transformation, the new shared travel system, migration of web sites to Canada.ca, and preparation for moving to GCDocs document management) may impact the Department’s ability to react quickly and nimbly to other internal business pressures that require timely support services and solutions, and ongoing service availability. The focus of the risk responses is to ensure departmental readiness for current and new infrastructure programs and the continued delivery of timely IMIT, HR, Finance and other enabling services.

Significant Changes in Relation to Operations, Personnel and Programs

On November 4, 2015, Minister Sohi was sworn-in as the new Minister of Infrastructure and Communities.

Following the swearing-in of the new government, responsibility for the WDBA, a federal Crown corporation, was transferred to the Minister of Infrastructure and Communities. The Minister of Infrastructure and Communities was also designated as the Minister responsible for federal matters relating to the TWRI.

Approval by Senior Officials

Approved by:

Original signed by:

Jean-François Tremblay,
Deputy Head Officer

Date February 29

Darlene Boileau,
Chief Financial Officer

Date

Signed in Ottawa, Canada, February 29, 2016

Quarterly Financial Report
For the quarter ended December 31, 2015
Statement of Authorities (unaudited)
Fiscal year 2015-2016

(in thousands of dollars)
  Total available for use
for the year ending
March 31, 2016
Used during the
quarter ended
December 31, 2015
Year to date used at
quarter-end
Vote 1 – Operating expenditures 69,797 19,686 41,592
Vote 5 – Capital expenditures 59,007 5,133 38,466
Vote 10 – Contributions 1,569,895 81,569 571,171
Budgetary Statutory Authorities      
(S) – Contributions to employee benefit plans 5,568 1,392 4,176
(S) – Gas Tax Fund 1,973,269 902,715 1,881,850
(S) – Minister salary and car allowance 82 0 0
Total Budgetary authorities 3,677,618 1,010,495 2,537,255
Non-budgetary authorities 0 0 0
Total authorities 3,677,618 1,010,495 2,537,255

Statement of Authorities (unaudited) (continued)
Fiscal year 2014-2015

(in thousands of dollars)
  Total available for
use for the year ending
March 31, 2015
Used during the
quarter ended
December 31, 2014
Year-to-date
used at
quarter-end
Vote 1 – Operating expenditures 75,065 24,823 56,093
Vote 5 – Capital expenditures 94,037 0 0
Vote 10 – Contributions 1,535,992 284,750 669,830
Budgetary Statutory Authorities      
(S) – Contributions to employee benefit plans 6,543 77 232
(S) – Gas Tax Fund 1,973,269 916,847 1,903,481
(S) – Minister salary and car allowance 80 0 0
Total Budgetary authorities 3,684,986 1,226,497 2,629,636
Non-budgetary authorities 0 0 0
Total authorities 3,684,986 1,226,497 2,629,636

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Quarterly Financial Report
For the quarter ended December 31, 2015
Departmental budgetary expenditures by Standard Object (unaudited)
Fiscal year 2015-2016

(in thousands of dollars)
  Planned expenditures
for the year ending
March 31, 2016
Expended during the
quarter ended
December 31, 2015
Year to date
used at
quarter-end
Expenditures:
Personnel 38,791 9,622 28,288
Transportation and communications 705 176 411
Information 407 34 193
Professional and special services 40,763 14,880 32,636
Rentals 1,182 300 839
Repair and maintenance 1,741 526 922
Utilities, materials and supplies 463 23 57
Acquisition of land, buildings and works 49,955 615 20,662
Acquisition of machinery and equipment 407 28 147
Transfer payments 3,543,164 984,284 2,453,021
Public debt charges 0 0 0
Other subsidies and payments 40 7 79
Total gross budgetary expenditures 3,677,618 1,010,495 2,537,255
Total net budgetary expenditures 3,677,618 1,010,495 2,537,255

Departmental budgetary expenditures by Standard Object (unaudited) (continued)
Fiscal year 2014-2015

(in thousands of dollars)
  Planned expenditures
for the year ending
March 31, 2015
Expended during the
quarter ended
December 31, 2014
Year-to-date
used at
quarter-end
Expenditures:
Personnel 39,727 9,176 22,932
Transportation and communications 990 260 438
Information 425 55 182
Professional and special services 62,459 14,403 30,041
Rentals 9,593 498 950
Repair and maintenance 61 3 17
Utilities, materials and supplies 174 17 63
Acquisition of land, buildings and works 61,600 0 0
Acquisition of machinery and equipment 511 370 593
Transfer payments 3,509,263 1,201,597 2,573,311
Public debt charges 0 0 0
Other subsidies and payments 183 118 1,109
Total gross budgetary expenditures 3,684,986 1,226,497 2,629,636
Total net budgetary expenditures 3,684,986 1,226,497 2,629,636

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Footnotes

Footnote 1

The project is also commonly referred to as the New Champlain Bridge Corridor Project.

Return to Footnote 1

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