Quarterly Financial Report for the quarter ended December 31, 2015

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 2015-2016. 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 2014-2015 and 2015-2016 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: 2014-2015
Net budgetary authorities: 28.91 million dollars
Expenditures for the quarter ending December 31: 6.36 million dollars 

Time period: 2015-2016
Net budgetary authorities: 28.90 million dollars
Expenditures for the quarter ending December 31: 7.00 million dollars

2.1 Statement of Authorities

The Canadian Transportation Agency’s total authorities available for use in 2015-2016, totalling $28,898,984, have remained consistent compared to the same period in the previous fiscal year, as illustrated in the Statement of Authorities and in the Departmental Budgetary Expenditures by Standard Object below.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

In comparison to the previous year, total budgetary expenditures recorded in the third quarter as well as the year-to-date budgetary expenditures at the end of the quarter of fiscal year 2015-2016 are greater than fiscal year 2014-2015. The increases in the Personnel and Professional and special services expenditure categories are primarily responsible. Improved operational strategies have been implemented at the beginning of fiscal year 2015-2016 which have contributed to:

  • The development and ongoing monitoring of the Human Resources plan and staffing strategies as well as the availability of human resources advisors. This has helped decrease the length of time positions are vacant in the organization.
  • The early approval of the operating expenditures budget allowed the responsibility centre managers to initiate their projects earlier in the fiscal year. This has ensured that expenditures were incurred in a consistent manner over the course of the year.

However, the 2015-2016 year-to-date budgetary expenditures recorded in the third quarter in the Other subsidies and payments category have decreased compared to the same period in the previous fiscal year. This decrease is due to the one-time transition payment for the Government of Canada's implementation of salary payments in arrears that occurred in 2014-2015.

With respect to all other budgetary expenditures by Standard Object, overall expenditures are similar to those of the previous fiscal year. Any difference is primarily attributable to the period in which the purchases were settled.

3. Risks and Uncertainties

The Agency's budget allocation has remained essentially flat for the past decade. During this time, the Agency has assumed new mandates including:

  • enhanced powers regarding railway line transfers and discontinuance, and net salvage value determinations
  • formalized authority to mediate and arbitrate various types of disputes, including new arbitration services for shippers and railway companies on rail level of service, including developing new regulations
  • authority to resolve rail noise and vibration complaints
  • implementing and administering regulations to enable the travelling public to easily determine the total advertised air price and to promote fair competition between advertisers in the air travel industry
  • expanded authority regarding air carriers' communication and application of their terms and conditions of carriage
  • authority to resolve disputes related to the provision of public passenger services using federal railway companies' lines or other assets
  • carrying out responsibilities related to the Fair Rail for Grain Farmers Act, including providing advice on the amount of grain to be moved in Western Canada and developing new regulations
  • carrying out responsibilities related to the Safe and Accountable Rail Act, including applying more stringent rail insurance requirements and handling applications by provinces and municipalities seeking reimbursement of expenses reasonably incurred in responding to fires resulting from rail operations.

In addition, the Agency is dealing with an increasing number of air travel complaints, the majority of which are related to consumer protection.

The Agency has taken steps to increase efficiency, reduce back-office costs and enhance service delivery, but faces challenges and risks as it transitions to new shared services arrangements. While a small degree of budgetary flexibility exists to reinforce capacity in key areas, major initiatives such as the adoption and integration of the Government of Canada's new shared case management system cannot be fully funded from existing resources.

Finally, the recommendations coming from the statutory review of the Canada Transportation Act - the Agency's enabling legislation - may eventually result in legislative changes and new mandates for the Agency. Given its tight budgetary situation, the Agency would face significant difficulties if incremental resources were not provided to support the implementation of new responsibilities.

As part of the mitigation strategy to deal with rising demands and static resources, the Agency's risk management framework and corporate risk profile have been updated to facilitate monitoring and reporting. In addition, the Agency will continue to integrate planning, priority setting and financial decision-making in order to strategically manage its workload and mitigate risks.

Finally, the Agency will realign its organizational structure and streamline business processes to maximize synergies and focus resources on delivery.

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 quarter.

Approval by Senior Officials

Approved by:

Original signed by:


Scott Streiner
Chairman and Chief Executive Officer
Gatineau, Canada
February 29, 2016

Original signed by:


Jacqueline Bannister
A/Chief Financial Officer
Gatineau, Canadar
February 29, 2016

 

Statement of Authorities (unaudited)

Fiscal year 2015-2016
  Total available for use for the year ending March 31, 2016Return to reference 1 Used during the quarter ended December 31, 2015 Year to date used at quarter-end
Total authorities 28,898,984 6,997,870 20,334,455
Vote 1 – Program expenditures 25,478,946 6,142,860 17,769,425
Budgetary statutory authorities − Employee Benefit Plans 3,420,038 855,010 2,565,030
Fiscal year 2014-2015
  Total available for use for the year ended March 31, 2015Return to reference 2 Used during the quarter ended December 31, 2014 Year to date used at quarter-end
Total authorities 28,905,042 6,360,141 19,757,471
Vote 1 – 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

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2015-2016
  Planned expenditures for the year ending
March 31, 2016
Expended during the quarter ended
December 31, 2015
Year to date used at quarter-end
 Total net budgetary expenditures 28,898,984 6,997,870 20,334,455
Expenditures:      
 Personnel 23,779,093 6,112,457 17,745,883
 Transportation and communications 552,235 126,823 324,994
 Information 413,163 39,998 122,036
 Professional and special services 2,984,074 470,478 1,569,021
 Rentals 580,945 159,085 329,463
 Repair and maintenance 56,440 9,720 29,934
 Utilities, materials and supplies 190,421 45,717 104,178
 Acquisition of machinery and equipment 342,613 28,318 99,600
 Other subsidies and payments - 5,274 9,346
Fiscal year 2014-2015
  Planned expenditures for the year ending
March 31, 2015
Expended during the quarter ended
December 31, 2014
Year to date used at quarter-end
 Total net budgetary expenditures 28,905,042 6,360,141 19,757,471
Expenditures:      
 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
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