Canada Border Services Agency Quarterly Financial Report
For the quarter ended September 30, 2017

Table of contents

1. Introduction

This Quarterly Financial Report (QFR) has been prepared 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, Supplementary Estimates A, Canada’s Economic Action Plan 2016 (Budget 2016) and Canada’s Economic Action Plan 2017 (Budget 2017).

A summary description of the Canada Border Services Agency (CBSA) program activities can be found in Part II of the Main Estimates, and a detailed description in Part III-Departmental Plan.

The QFR has not been subject to an external audit or review.

1.1 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities (Table 1) includes the department's spending authorities granted by Parliament, and those used by the department consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2017-2018 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 money 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.

The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

This section highlights the significant items that contributed to the net increase or decrease in resources available for the year and actual expenditures as of the quarter ended September 30, 2017.

Graph 1: Comparison of Net Budgetary Authorities and Expenditures as of September 30, 2016 and September 30, 2017 (in thousands $)

Comparison of Net Budgetary Authorities and Expenditures as of September 30, 2016 and September 30, 2017 (in thousands $)

2.1 Significant Changes to Authorities

For the period ending September 30, 2017, as well as the same period ending last fiscal year, the authorities provided to the CBSA are comprised of the Main Estimates and Supplementary Estimates A and any unused spending authorities carried forward from the previous fiscal year.

The Statement of Authorities (Table 1) presents a net increase of $424.9 million or 24.1% in the Agency’s total authorities of $2,188.7 million at September 30, 2017 compared to $1,763.7 million total authorities at the same quarter last year.

This net increase in the authorities available for use is the result of an increase in Vote 1 – Operating Expenditures of $308.0 million, an increase in Vote 5 – Capital of $118.4 million and a decrease in Budgetary Statutory Authorities of $1.5 million, as detailed below:

Vote 1 – Operating

The Agency's Vote 1 Operating decreased by $308.0 million or 22%, which is mainly attributed to the net effect of the following significant items:

Increases totaling $313.5 million are mainly attributed to:

Decreases totaling $5.5 million as described in the CBSA Quarterly Financial Report for the quarter ended June 30, 2017.

Vote 5 - Capital

The Agency’s Vote 5 Capital increased by $118.4 million or 67.1%, which is mainly attributed to the net effect of the following significant items:

Increases totaling $140.2 million are mainly attributed to:

Decreases totaling $21.8 million as described in the CBSA Quarterly Financial Report for the quarter ended June 30, 2017.

Budgetary Statutory Authorities

The Agency’s Statutory Authority related to the employee benefit plan decreased by $1.5 million, or 0.8% from the previous year. The decrease is mainly due to the annual adjustment in the employee benefit plan rate set by the Treasury Board Secretariat.

2.2 Explanations of Significant Variances in Expenditures from Previous Year

As indicated in the Statement of Authorities (Table 1), the Agency’s expenditures for the quarter ending September 30, 2017 were the same as the quarter ending September 30, 2016 at $434.9 million. The Agency's year-to-date expenditures total $792.5 million as compared to $801.9 million at the same time last year. The decrease of $9.4 million or 1.2% in expenditures is primarily due to the following items:

As indicated in the Departmental Budgetary Expenditures by Standard Object (Table 2), the decreases by standard object are mainly attributed to the following offsetting factors:

The planned revenue from the sales of services reflects the Agency's revenue respending authority. The year-to-date revenue from the sales of services decreased by $0.8 million or 8.7% due to decreases in the Remote Area Border Crossing Permit, the Detector Dog Learning Services and the NEXUS program.

Graph 2: Comparison of Vote Netted Revenue and Revenue collected as of September 30, 2016 and September 30, 2017 (in thousands $)

Comparison of Vote Netted Revenue and Revenue collected as of September 30, 2016 and September 30, 2017 (in thousands $)

3. Risks and Uncertainties

The complexity of the operating environment of the CBSA can be seen in the broad scope of external drivers. Developments in geopolitical relations, in the global economy, in environmental matters, and in human and animal health cascade down into Canada’s trade, immigration, tourism and refugee patterns, affecting volumes and introducing security and facilitation challenges. Continued growth in both global trade and the virtual economy has benefitted legitimate business and criminal enterprises alike, and presents more complexity in managing Canada’s supply chain and physical borders.

Collective bargaining negotiations between the Government of Canada and bargaining agents continue to unfold. The outcome of these negotiations will have implications for all departments including the CBSA.

There has been a substantial number of asylum seekers entering Canada from the United States at CBSA’s ports of entry (POE). The current volume of asylum claimants has impacted the operational and financial capacity of CBSA and its partners. The Agency is currently taking steps to manage the surge of asylum seekers crossing the border, including adjusting its financial capacity and operations to process claimants as quickly as possible without compromising the safety or security of Canadians.

Lastly, the CBSA operates in a rapidly changing border environment with increasingly complex security and immigration demands, changing traveler volumes, higher infrastructure costs and rising trade volumes, all of which contributed to a strain on the Agency’s finances. To ensure it can continue to deliver in this context in a sustainable manner, the CBSA is undertaking a strategic exercise that will: examine its current resource base; fully align its operations to the priorities of the Government and Canadians; and work to ensure the sustainability of those operations for years to come.

In considering these factors, the CBSA has embarked on various initiatives that will allow the organization to be even more efficient and effective in the way it does business through increased efforts to address threats early and facilitate trade and travel. To improve its ability to successfully deliver on its initiatives, the Agency regularly examines its enterprise risk landscape, updates its Enterprise Risk Profile and takes appropriate action to mitigate its top risks and the associated financial impacts. The Agency’s top risks and associated responses are communicated in its Departmental Plan.

4. Significant Changes in Relation to Operations, Personnel and Programs

4.1 Key Senior Personnel

The appointment of Jacqueline Rigg to the position of Vice President, Human Resources Branch who had previously been acting in the position for Jean-Stéphen Piché who was leading the work on CBSA Renewal and has now been appointed as Senior Assistant Deputy Minister of Cultural Affairs at Canadian Heritage.

The acting appointment of Gino Lechasseur as Vice-President of Information, Science and Technology Branch (ISTB) replacing Maurice Chénier who was appointed to the newly created position of Chief Transformation Officer within the Agency.

4.2 Operations

The Agency continues to enhance border security and ensures the facilitation of legitimate travellers and goods with modernizations of and enhancements to security screening procedures, trusted traveller initiatives, immigration detentions, and infrastructure at our Ports of Entry across the country as per the Departmental Plan for 2017-18.

The CBSA also maintains a key role in delivering on the Government of Canada priorities such as supporting the increase in Canada’s immigration levels and the implementation of the Gordie Howe International Bridge project.

4.3 New Programs

The CBSA will adapt and expand operations in order to support Canada’s commitment to process up to 300,000 new immigrants this year in collaboration with partner organizations.

In addition, in recognition of an increasingly complex and rapidly changing border environment, a review of all areas of the Agency is underway with the aim to better position the CBSA to meet current demands and operational realities, and future expectations.

5. Approval by Senior Officials

Approved by:

John Ossowski
President
Ottawa, Canada
Date: November 24, 2017

Christine Walker
Chief Financial Officer
Ottawa, Canada
Date: November 24, 2017

6. Table 1: Statement of Authorities (Unaudited)

Fiscal year 2017-2018
(in thousands of dollars) Total available for use for the year ending March 31, 2018* Used during the quarter ended September 30, 2017 Year-to-date used at quarter end
Vote 1 - Operating Expenditures 1,710,022 367,532 675,651
Vote 5 - Capital Expenditures 294,792 24,622 31,399
Statutory Authority - Contributions to employee benefit plans 183,875 42,668 85,337
Statutory Authority - Refunds of amounts credited to revenues in previous years 0 28 44
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets 0 9 62
Total budgetary authorities 2,188,689 434,859 792,493
Non-budgetary authorities 0 0 0
Total authorities 2,188,689 434,859 792,493

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.
* Includes only Authorities available for use and granted by Parliament at quarter end.

6. Table 1: Statement of Authorities (Unaudited)

Fiscal year 2016-2017
(in thousands of dollars) Total available for use for the year ending March 31, 2017* Used during the quarter ended September 30, 2016 Year-to-date used at quarter end
Vote 1 - Operating Expenditures 1,401,992 369,290 681,556
Vote 5 - Capital Expenditures 176,373 19,319 27,161
Statutory Authority - Contributions to employee benefit plans 185,382 46,178 92,356
Statutory Authority - Refunds of amounts credited to revenues in previous years 0 0 15
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets 0 156 808
Total budgetary authorities 1,763,747 434,943 801,896
Non-budgetary authorities 0 0 0
Total authorities 1,763,747 434,943 801,896

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.
* Includes only Authorities available for use and granted by Parliament at quarter-end.

7. Table 2: Departmental Budgetary Expenditures by Standard Object (Unaudited)

Fiscal year 2017-2018
(in thousands of dollars) Planned expenditures for the year ending March 31, 2018* Expended during the quarter ended September 30, 2017 Year-to-date used at quarter end
Expenditures
Personnel 1,336,979 344,627 658,744
Transportation and communications 77,117 9,479 16,412
Information 4,281 80 217
Professional and special services 390,255 52,630 82,567
Rentals 12,290 1,924 2,547
Repair and maintenance 35,268 5,174 7,517
Utilities, materials and supplies 22,662 3,285 5,188
Acquisition of land, buildings and works 127,956 12,789 14,017
Acquisition of machinery and equipment 165,031 6,457 8,673
Transfer payments 0 0 0
Other subsidies and payments 35,280 3,317 4,764
Total gross budgetary expenditures 2,207,119 439,762 800,646
Less revenues netted against expenditures
Sales of Services 18,430 4,931 8,197
Other Revenue 0 -28 -44
Total revenues netted against expenditures 18,430 4,903 8,153
Total net budgetary expenditures 2,188,689 434,859 792,493

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.
* Includes only Authorities available for use and granted by parliament at quarter-end.

7. Table 2: Departmental Budgetary Expenditures by Standard Object (Unaudited)

Fiscal year 2016-2017
(in thousands of dollars) Planned expenditures for the year ending March 31, 2017 * Expended during the quarter ended September 30, 2016 Year-to-date used at quarter end
Expenditures
Personnel 1,269,562 336,593 651,571
Transportation and communications 61,514 9,384 16,423
Information 1,846 97 296
Professional and special services 278,074 74,976 112,399
Rentals 11,356 1,444 2,393
Repair and maintenance 25,741 5,045 8,049
Utilities, materials and supplies 21,722 2,564 4,519
Acquisition of land, buildings and works 123,333 3,965 4,238
Acquisition of machinery and equipment 80,432 4,460 8,233
Transfer payments 0 0 0
Other subsidies and payments 12,156 2,355 2,739
Total gross budgetary expenditures 1,885,736 440,883 810,860
Less revenues netted against expenditures
Sales of Services 18,430 5,940 8,979
Other Revenue 0 0 -15
Total revenues netted against expenditures 18,430 5,940 8,964
Total net budgetary expenditures 1,867,306 434,943 801,896

Note: Numbers may not add and may not agree with details provided elsewhere due to rounding.
* Includes only Authorities available for use and granted by Parliament at quarter-end.

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