Quarterly Financial Report for the quarter ended December 31, 2013

Management Statement for the Quarter Ending December 31, 2013

1. Introduction

This quarterly financial 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 Treasury Board under the Treasury Board Accounting Standard (TBAS 1.3). It should be read in conjunction with the Main Estimates, Supplementary Estimates for the current year.

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

1.1 Canadian Transportation Agency Mandate

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.

1.2 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 2013-2014. 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 - Text version: Third quarter net budgetary authorities and expenditures per fiscal yearNote1

2.1 Statement of Authorities

The Canadian Transportation Agency's total authorities available for use in 2013–14, $30.12 million, increased by approximately $1.21 million in comparison with the same quarter of 2012–13, as illustrated in the Statement of Authorities and in the Departmental Budgetary Expenditures by Standard Object. The primary reason for the change is related to the increase in Vote 25 (program expenditures).

Authorities available for use in Vote 25 (program expenditures) have increased by a total of $1.19 million in 2013-14. This increase is mostly related to two factors.  The first factor is an increase of $0.7 million in reimbursement made by the Treasury Board Secretariat in 2013-14 for the payout of severance pay and termination benefits.  The second factor relates to the amounts received for collective agreements.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the third quarter increased by $0.34 million as illustrated in the Budgetary expenditures by Standard Object. Furthermore, the year to date used at quarter-end has increased by $1.48 million compared to the same quarter of 2012-13.

The increase in the year-to-date expenditures is attributable to an increase in personnel expenditures. This increase in personnel expenditures is mainly due to severance and termination benefits paid out ($0.71 million) in accordance with the changes to the terms and conditions of the collective agreements.  In addition, the increase in personnel expenditures includes transitional support measures ($0.47 million) for employees affected by budget reductions paid out, and the balance being mostly made up by the increases in compensation related to the ratification of collective agreements, which includes the compensation increase to the collective agreement for the LA group of the Canadian Transportation Agency.

As for the variance in the third quarter budgetary expenditures, the increase is attributable to the same personnel expenditure items as reported for the year-to-date expenditures in the above paragraph.

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.

In 2013-2014, the Agency faces two principal challenges that will put pressure on its budget resources: implementing an expanded mandate for rail service agreement disputes, and implementing regulations for air services price advertising.  Through effective budget management and achievement of operational efficiencies, the Agency will absorb these new responsibilities within its budget allocation.

At the corporate level, the Agency faces many significant challenges, along with risks related to reengineering business processes to integrate information systems and transitioning to new shared services arrangements.  During this time of change, the Agency must ensure business continuity and maintain stable operations while capitalizing on the benefits of new technologies and more effective and efficient processes.

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

The Agency has, and continues, to re-engineer its business processes and streamlined its internal services to maximize efficiency and effectiveness.  These changes will enable the Agency to re-align its financial resources to address new mandates while still meeting its current regulatory responsibilities.

Approval by Senior Officials

Approved by

Geoffrey C. Hare
Chair and Chief Executive Officer
Gatineau, Canada
February 5, 2014

Linda Harrison
Chief Financial Officer
Gatineau, Canada
February 5, 2014

Statement of Authorities (unaudited)

Fiscal year 2013-2014 (in thousands of dollars)
  Total available for use for the year ending March 31, 2014Note 1 Used during the quarter ended  December 31, 2013 Year to date used at quarter-end
Total authorities 30,123 7,134 21,233
Vote 25 – Program expenditures 26,616 6,257 18,602
Budgetary statutory authorities − Employee Benefit Plans 3,507 877 2,631
Fiscal year 2012-2013 (in thousands of dollars)
  Total available for use for the year ended March 31, 2013 Note 2 Used during the quarter ended  December 31, 2012 Year 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

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2013-2014 (in thousands of dollars)
Expenditures Planned expenditures for the year ending  March 31, 2014 Expended during the quarter ended December 31, 2013 Year to date used  at quarter-end
Personnel 25,024 6,282 19,103
Transportation and communications 542 105 329
Information 301 57 166
Professional and special services 2,826 435 1,091
Rentals 234 173 402
Repair and maintenance 344 8 15
Utilities, materials and supplies 236 43 81
Acquisition of machinery and equipment 541 31 46
Other subsidies and payments 75 0 0
Total net budgetary expenditures 30,123 7,134 21,233
Fiscal year 2012-2013 (in thousands of dollars)
Expenditures Planned expenditures for the year ending March 31, 2013 Expended during the quarter ended  December 31, 2012 Year to date used at quarter-end
Total net budgetary expenditures 28,912 6,792 19,754
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



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