Quarterly Financial Report for the quarter ended June 30, 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 – First quarter net budgetary authorities and expenditures per fiscal year.

• Details: Graph 1 – First quarter net budgetary authorities and expenditures per fiscal year.

  The figure illustrates the Agency's net budgetary authorities and expenditures for the quarter ending JUne 30, 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 : 27.65 million dollars
  Expenditures for the quarter ending Juen 30 : 6.95 million dollars 

  Time period : 2015-2016
  Net budgetary authorities : 27.73 million dollars
  Expenditures for the quarter ending June 30 : 6.51 million dollars

2.1 Statement of Authorities

The Canadian Transportation Agency’s total authorities available for use in 2015-2016, totalling $27,733,404, increased slightly 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.

Authorities available for use in Vote 25 – Program expenditures have increased by a total of $82,782 in 2015-2016. This increase is primarily due to an increase in the budgetary statutory authorities relating to employee benefit plans. The rate related to employee benefit plans increased from 16.5 percent in 2014-2015 to 16.8 percent in 2015-2016.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the first quarter decreased by $445,031, from $6,953,508 to $6,508,477, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This decrease is primarily due to the change in Other subsidies and payments as a result of 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, 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 settled.

3. Risks and Uncertainties

The Agency's budget allocation has remained essentially flat for the past nine years. During this time, the Agency has assumed new mandates: implementing regulations for all-inclusive air price advertising, providing new arbitration services for shippers and railway companies on rail level of service, as well as other responsibilities related to the Fair Rail for Grain Farmers Act and the Safe and Accountable Rail Act.

In addition, the Agency is dealing with an ongoing number of air travel complaints, the majority of which are related to consumer protection.  Over the next several years, the Agency's workload in this and other areas may continue to increase.   

At the same time, there is a great deal of change occurring internally. While the Agency has launched initiatives to increase efficiency, reduce back-office costs and enhance service delivery, it faces challenges and risks as it transitions to new shared services arrangements and reengineers its business processes for integration into a new shared case management system. For instance, there is some uncertainty regarding the timing and implementation costs for new shared service arrangements.  Finally, the statutory review of the Canada Transportation Act – the Agency's enabling legislation – will be concluding in December 2015 and could eventually result in the establishment of new responsibilities for the Agency.

As part of the mitigation strategy to deal with rising demands and static resources, the Agency has developed an updated risk management framework to facilitate monitoring and reporting, and will continue to integrate planning, priority setting and financial decision-making in order to strategically manage its workload and mitigate risks.

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:

Scott Streiner

Chairman and Chief Executive Officer

Gatineau, Canada

September 18, 2015

 

Christine Guérette, CPA, CGA

Chief Financial Officer

Gatineau, Canada

September 18, 2015

Statement of Authorities (unaudited)

Fiscal year 2015-2016

	Total available for use for the year ending March 31, 2016Footnote 1	Used during the quarter ended June 30, 2015	Year to date used at quarter-end
Total authorities	27,733,404	6,508,477	6,508,477
Vote 25 – Program expenditures	24,313,366	5,653,467	5,653,467
Budgetary statutory authorities − Employee Benefit Plans	3,420,038	855,010	855,010

Fiscal year 2014-2015

	Total available for use for the year ended March 31, 2015Footnote 2	Used during the quarter ended June 30, 2014	Year to date used at quarter-end
Total authorities	27,650,622	6,953,508	6,953,508
Vote 25 – Program expenditures	24,299,370	6,115,695	6,115,695
Budgetary statutory authorities − Employee Benefit Plans	3,351,252	837,813	837,813

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 June 30, 2015	Year to date used at quarter-end
Total net budgetary expenditures	27,733,404	6,508,477	6,508,477
Expenditures:
Personnel	23,777,409	5,772,214	5,772,214
Transportation and communications	552,235	67,118	67,118
Information	413,163	30,773	30,773
Professional and special services	1,820,178	466,438	466,438
Rentals	580,945	81,436	81,436
Repair and maintenance	56,440	273	273
Utilities, materials and supplies	190,421	25,286	25,286
Acquisition of machinery and equipment	342,613	60,867	60,867
Other subsidies and payments	-	4,072	4,072

Fiscal year 2014-2015

	Planned expenditures for the year ending March 31, 2015	Expended during the quarter ended June 30, 2014	Year to date used at quarter-end
Total net budgetary expenditures	27,650,622	6,953,508	6,953,508
Expenditures:
Personnel	23,661,869	5,638,594	5,638,594
Transportation and communications	495,067	69,426	69,426
Information	487,221	142,852	142,852
Professional and special services	2,127,321	271,849	271,849
Rentals	501,708	116,684	116,684
Repair and maintenance	80,295	2,138	2,138
Utilities, materials and supplies	147,296	16,651	16,651
Acquisition of machinery and equipment	139,802	3,297	3,297
Other subsidies and payments	10,043	692,017	692,017