Quarterly Financial Report for the quarter ended December 31, 2014

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 and 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 within the federal transportation system 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 2014-2015. 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 and expenditures per fiscal year
Graph 1 – Third quarter net budgetary authorities and expenditures per fiscal year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Details: Graph 1 – Third quarter net budgetary authorities and expenditures per fiscal year

The figure illustrates the Agency's net budgetary authorities and expenditures for the quarter ending December 31, for fiscal years 2013-2014 and 2014-2015 where budgetary authorities and expenditures, in millions of dollars, is shown on the vertical axis and time period, in fiscal years, is shown on the horizontal axis.

Time period : 2013-2014
Net budgetary authorities : 30.12 million dollars
Expenditures for the quarter ending December 31 : 7.13 million dollars 

Time period : 2014-2015
Net budgetary authorities : 28.91 million dollars
Expenditures for the quarter ending December 31 : 6.36 million dollars

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.1 Statement of Authorities

The Canadian Transportation Agency's total authorities available for use in 2014-2015 of $28,905,042 have decreased by $1,218,478 compared to the same quarter in 2013-2014, as illustrated in the Statement of Authorities and in the Departmental Budgetary Expenditures by Standard Object below.

This decrease is attributed primarily to two factors. The first is a decrease in reimbursement made by the Treasury Board Secretariat for expenditures relating to the payout of severance pay and termination benefits. The second is a decrease in the budgetary statutory authorities relating to employee benefit plans. The rate related to employee benefit plans decreased from 17.4 percent in 2013-2014 to 16.5 percent in 2014-2015.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the third quarter decreased by $773,671, from $7,133,812 to $6,360,141, as illustrated in the Departmental Budgetary Expenditures by Standard Object below.

Personnel expenditures decreased by $529,629 as a result of a decrease in expenditures relating to payouts for severance pay, termination benefits and retroactive salaries. In 2014-2015 and in future years, there will be a significant decrease in payouts for severance pay and termination benefits as these payments have in most part been issued in fiscal years 2012-2013 and 2013-2014.

Non-salary expenditures decreased by $244,042 and this decrease is primarily attributable to the Professional and Special Services category as a result of an initial investment in the development of a new shared case management system in 2013-2014. With respect to other Departmental Budgetary Expenditures by Standard Object, we anticipated overall expenditures to be similar to those of the previous fiscal year.  Any difference is primarily attributable to the period in which the purchases were completed.

Finally, the amount of year-to-date use at quarter end in Other subsidies and payments totaling $712,420 is largely due to a one-time transition payment for implementing salary payment in arrears by the Government of Canada.

3. Risks and Uncertainties

In 2014-2015, the Agency faces a number of challenges that will put pressure on its budget resources. For the next two years, the Agency will be required to absorb any increases in collective agreement payments without any additional funding from the centre. In addition, the Agency launched its new 2014-2017 Strategic Plan, which comprises a number of major projects to transform and implement increased efficiencies, including a new shared case management system, which will require significant investment.

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

The Agency continues to explore and implement initiatives to leverage technology to increase its efficiency and reduce the administrative costs associated with its back-office functions, such as human resources, finance and records management. Going forward, however, there is uncertainty about the timing of the consolidation of back-office systems, including the cost to be absorbed by departments and agencies to support its implementation. As a result, the Agency continues to monitor its risk exposure and participate in Government of Canada community meetings to stay abreast of any developments in this area.

The Agency also continues to focus on enhancing succession planning and knowledge transfer. Taking its workforce profile information into consideration, the Agency is identifying workforce management priorities that focus on current and future business needs and will need to continue to design human resources strategies to address them efficiently and effectively.

In recent months, the Agency was asked to take on additional mandates related to transportation legislation, both of which have been absorbed without additional funding. The Fair Rail Freight Service Act (Bill C-52) amended the Canada Transportation Act to allow shippers to request arbitration if no agreement can be reached with a railway company on service levels. Moreover, the Agency was given the authority to decide on objections from the railways.

In addition, the Fair Rail for Grain Farmers Act (Bill C-30) gives the Agency the authority to extend the interswitching distance limits beyond what is currently in legislation, order railway companies to compensate any shippers adversely affected for any expenses that they incurred as a result of the railway company's failure to fulfill its service obligations, and apply administrative monetary penalties that will be used to enforce railway company compliance with arbitration decisions.

As the Agency's budget allocation has remained essentially flat for the past eight years, these ongoing challenges bring with them the risk that the Agency may not have sufficient funds to ensure that high-priority and ongoing Agency objectives are met on time.

As a mitigation strategy, the Agency will continue to implement stronger linkages between planning and priority-setting and related financial decision-making to realign its resources to manage these challenges and meet its regulatory responsibilities.  In addition, the Agency will continue to monitor and report on these initiatives to enable early identification of areas requiring attention and ensure that resources are being used efficiently and effectively.

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

Sam Barone

Acting Chair and CEO

Gatineau, Canada

February 20, 2015

 

Christine Guérette, CPA, CGA

Chief Financial Officer

Gatineau, Canada

February 20, 2015

Statement of Authorities (unaudited)

Fiscal year 2014-2015
  Total available for use for the year ending March 31, 2015 Note 1 Used during the quarter ended December 31, 2014 Year to date used at quarter-end
Vote 25 – Program expenditures 25,553,790 5,522,328 17,244,032
Budgetary statutory authorities − Employee Benefit Plans 3,351,252 837,813 2,513,439
Total authorities 28,905,042 6,360,141 19,757,471
Fiscal year 2013-2014
  Total available for use for the year ended March 31, 2014 Note 2 Used during the quarter ended December 31, 2013 Year to date used at   quarter-end
Vote 25 – Program expenditures 26,616,320 6,256,912 18,602,434
Budgetary statutory authorities − Employee Benefit Plans 3,507,200 876,900 2,630,500
Total authorities 30,123,520 7,133,812 21,232,934

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2014-2015
Expenditures Planned expenditures for the year ending March 31, 2015 Expended during the quarter ended     December 31, 2014 Year to date used at quarter-end
Personnel 23,708,623 5,752,616 17,140,294
Transportation and communications 495,067 123,818 337,100
Information 487,221 59,271 315,874
Professional and special services 3,334,987 225,036 844,037
Rentals 501,708 120,432 274,768
Repair and maintenance 80,295 2,399 16,624
Utilities, materials and supplies 147,296 59,045 101,835
Acquisition of machinery and equipment 139,802 7,933 14,519
Other subsidies and payments 10,043 9,591 712,420
Total net budgetary expenditures 28,905,042 6,360,141 19,757,471
Fiscal year 2013-2014
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 25,023,321 6,282,245 19,103,142
Transportation and communications 541,986 104,501 328,621
Information 301,418 57,150 166,209
Professional and special services 2,826,158 435,033 1,091,168
Rentals 234,212 173,002 401,805
Repair and maintenance 343,914 8,215 14,931
Utilities, materials and supplies 236,381 42,566 80,746
Acquisition of machinery and equipment 541,243 31,100 46,312
Other subsidies and payments 74,887 0 0
Total net budgetary expenditures 30,123,520 7,133,812 21,232,934
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