Quarterly Financial Report for the quarter ended December 31, 2012

Management Statement for the Quarter Ending December 31, 2012

1. Introduction

The Canadian Transportation Agency is an independent, quasi-judicial tribunal and economic regulator. It makes decisions and determinations on a wide range of matters involving air, rail and marine modes of transportation under the authority of Parliament, as set out in the Canada Transportation Act and other legislation.

Our mandate includes:

  • Economic regulation, to provide approvals, issue licences, permits and certificates of fitness, and make decisions on a wide range of matters involving federal air, rail and marine transportation.
  • Dispute resolution, to resolve complaints about federal transportation services, rates, fees and charges.
  • Accessibility, to ensure Canada’s national transportation system is accessible to all persons, particularly those with disabilities.

Further information on the mandate, roles, responsibilities and programs of the Agency can be found in Part III of the Main Estimates.

This quarterly financial report:

  • should be read in conjunction with the Main Estimates and the Supplementary Estimates, if applicable;
  • 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; and
  • has not been subject to an external audit or review.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency’s spending authorities granted by Parliament and those used by the Agency, consistent with the Main Estimates and Supplementary Estimates for 2012-2013. 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.

As part of the departmental performance reporting process, the Agency prepares its annual departmental financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

Graph 1 - Third quarter net budgetary authorities, text version available via link below.

Graph 1 - Text version: Third quarter net budgetary authorities and expenditures per fiscal year

Statement of Authorities

The Canadian Transportation Agency’s total authorities available for use in 2012–13, $28.91 million, decreased by approximately $1.2 million in comparison with the same quarter of 2011–12, as illustrated in the Statement of Authorities and in Table 1: Departmental Budgetary Expenditures by Standard Object. The primary reason for the change is related to the decrease in Vote 25 (program expenditures).

Authorities available for use in Vote 25 (program expenditures) have decreased by a total of $1.1 million in 2012-13. This decrease is mostly related to a reduction of $1.5 million in the reimbursement done by the Treasury Board Secretariat in 2012-13 for the payout of severance pay and termination benefits to some employees, offset by an increase of $0.4 million in 2012-13 for the Operating Budget Carry forward.

Statement of Departmental Budgetary Expenditures by Standard Object

As at December 31, 2012, the expenditures for the quarter ended December 31, 2012, has decreased by $0.39 million compared to the same quarter of the previous fiscal year, as shown in Graph 1.  Furthermore, the year to date used at quarter-end has decreased by $1.55 million compared to the same quarter of 2011-12.

This decrease in both the expenditures for the quarter and the year to date used at quarter-end is mainly attributed to a decrease in personnel expenditures. This decrease in personnel expenditures is mainly due to severance and termination benefits paid out in the second and third quarter of 2011-12.

3. Risks and Uncertainties

The Agency is funded through voted parliamentary spending authorities and statutory authorities for operating expenditures. Delivering departmental programs and services may depend on several risk factors such as economic and political fluctuations, managing new mandates, resource reductions and constraints, technological evolution, government priorities, and central agency or government-wide initiatives.

The Agency is a demand-driven organization with a mandate dependent upon fulfilling service expectations of Canadians with respect to transportation issues. Therefore, changes within the external environment, government policies and the legislative mandate related to transport have an impact on the Agency’s operating environment.

This Departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the Main Estimates and Supplementary Estimates A.  Supplementary Estimates A include the reimbursement of the payout of severance pay and termination benefits for the period between April 1 and July 31, 2012.  The Agency is anticipating additional expenditures related to these payouts until the end of the fiscal year, and consequently would be reimbursed for those funds by Treasury Board Secretariat.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-2011 levels for the fiscal years 2011-2012 and 2012-2013. Given that over 80 percent of the Agency’s budget is spent on its payroll, significant focus has been placed on careful budget and human resource management.  The Agency faces two new challenges that will put pressure on its budget resources: implementing an expanded mandate for rail service agreement disputes and implementation of regulations for air services price advertising.   Through effective budget management, the Agency will absorb these new responsibilities within its budget allocation.  The Agency continues to focus on managing its priorities, and included several measures to achieve greater efficiencies, reduce operating costs, and to manage our resources responsibly and effectively.

To address its risks, the Agency will pursue the following actions and mitigation strategies:

  • Participating in legislative and regulation change processes;
  • Actively monitoring transport industry events and communications to understand evolving transportation trends and relevant policy developments;
  • Analyzing client satisfaction survey results to identify changes in expectations, understand service delivery concerns, and adjust to client needs;
  • Monitoring, gathering and sharing information about changes to government policy or central agency directives (e.g., performance and financial reporting, shared services, human resources);
  • Participating in the shared services review led by Treasury Board Secretariat and Public Works and Government Services Canada;
  • Effectively managing human and financial resources by implementing the Agency’s HR Plan for recruitment and retention, and by using an active vacancy management approach;
  • Reallocating resources when there are increases in demand on service, including for new mandates; and
  • Addressing and implementing internal audit recommendations made by the Office of the Comptroller General.

4. Significant changes in relation to operations, personnel and programs

There have been no significant changes in relation to operations, personnel and programs over the last year.

Approval by Senior Officials

Approved by

Geoffrey C. Hare
Chair and Chief Executive Officer
Gatineau, Canada
February 25, 2013

Linda Harrison
Chief Financial Officer
Gatineau, Canada
February 25, 2013

Statement of Authorities (unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Total available for use for the year ending March 31, 2013Note 1Used during the quarter ended December 31, 2012Year to date used at quarter-end
Total authorities 28,912 6,792 19,754
Vote 25 – Program expenditures 25,428 5,921 17,141
Budgetary statutory authorities − Employee Benefit Plans 3,484 871 2,613
Fiscal year 2011-2012 (in thousands of dollars)
  Total available for use for the year ended March 31, 2012Note 2Used during the quarter ended December 31, 2011Year to date used at quarter-end
Total authorities 30,120 7,184 21,301
Vote 25 – Program expenditures 26,554 6,293 18,627
Budgetary statutory authorities − Employee Benefit Plans 3,566 891 2,674

Departmental budgetary expenditures by Standard Object(unaudited)

Fiscal year 2012-2013 (in thousands of dollars)
  Planned expenditures for the year ending  March 31, 2013Expended during the quarter ended December 31, 2012Year to date used  at quarter-end
Total net budgetary expenditures 28,912 6,792 19,754
Expenditures:
Personnel 23,725 5,899 17,542
Transportation and communications 631 185 420
Information 301 110 197
Professional and special services 3,334 328 842
Rentals 214 150 389
Repair and maintenance 353 15 22
Utilities, materials and supplies 246 58 143
Acquisition of machinery and equipment 101 45 197
Other subsidies and payments 7 2 2
Fiscal year 2011-2012 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2012Expended during the quarter ended December 31, 2011Year to date used at quarter-end
Total net budgetary expenditures 30,120 7,184 21,301
Expenditures:
Personnel 25,306 6,305 19,049
Transportation and communications 595 128 373
Information 274 47 118
Professional and special services 2,819 464 952
Rentals 140 61 154
Repair and maintenance 252 51 282
Utilities, materials and supplies 216 52 137
Acquisition of machinery and equipment 518 73 93
Other subsidies and payments 0 3 143
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