Quarterly Financial Report for the quarter ended June 30, 2017

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 the Treasury Board under the Treasury Board Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Report. 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 Agency is an independent, quasi-judicial tribunal and regulator with the powers of a superior court.

We operate within the context of the large and complex Canadian transportation system.

The Agency exercises its powers through its Members, who are appointed by the Governor-in-Council.

What we do: our three mandates

  • We help ensure that the national transportation system runs efficiently and smoothly in the economic and social interests of all Canadians; including those who work and invest in it; the producers, shippers, travellers and businesses who rely on it; and the communities where it operates.

  • We protect the human right of persons with disabilities to an accessible transportation network.

  • We provide consumer protection for air passengers.

How we do it: our tools

To help advance these mandates, we have three tools at our disposal:

  • Rule-making: We develop and apply ground rules that establish the rights and responsibilities of transportation service providers and users and that level the playing field among competitors. These rules can take the form of binding regulations or less formal guidelines, codes of practice or interpretation notes.

  • Dispute resolution: We resolve disputes that arise between transportation providers on the one hand, and their clients and neighbours on the other, using a range of tools from facilitation and mediation to arbitration and adjudication.

  • Information provision: We provide information on the transportation system, the rights and responsibilities of transportation providers and users, and the Agency's legislation and services.

Further information on the Agency’s mandate, roles, responsibilities and programs can be found in Part III of the estimates – Departmental Plan.

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 (as applicable) for the 2017-2018 fiscal year. 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 money 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The Agency uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. 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
Graph 1 – First quarter net budgetary authorities and expenditures per fiscal year
  • Details: Graph 1

    The figure illustrates the Agency's net budgetary authorities and expenditures for the quarter ending June 30, for fiscal years 2016-2017 and 2017-2018 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: 2016-2017
    Net budgetary authorities: 27.79 million dollars
    Expenditures for the quarter ending June 30: 6.06 million dollars 

    Time period: 2017-2018
    Net budgetary authorities: 30.91 million dollars
    Expenditures for the quarter ending June 30: 5.97 million dollars

2.1 Statement of Authorities

The Agency’s total authorities available for use in 2017-2018, totalling $30,914,166, have increased by $3,122,079 when 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. This increase is primarily due to the approval of a reverse re-profile for Workplace Modernization of $3,522,137 offset by a decrease in Employee Benefit Plans (EBP) and a budget reduction in professional services, advertising and travel.

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 $87,474, from $6,059,124 to $5,971,650, as illustrated in the Departmental Budgetary Expenditures by Standard Object below.  The budgetary expenditures are fairly consistent with those of the previous fiscal year; however, the Agency has reduced its reliance on external professional service providers, which explains the slight decrease in the Professional and Special Services category.

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

Budgetary challenges have been compounded by externally-driven demands.  Much of the Agency's workload is a function of the number of applications brought by clients and stakeholders, whether they are seeking dispute-resolution assistance or regulatory determinations.  In comparison to the first quarter of the previous fiscal year, the Agency has received approximately four times the number of air travel complaints.

Graph 2 – Air Travel Complaints, by quarter
Graph 2 – Air Travel Complaints, by quarter
  • Details: Graph 2

    Graph 2 – Air Travel Complaints, by quarter

     

    2015-2016

    2016-2017

    2017-2018

    Q3 (October-December)

    251

    1070

    N/A

    Q4 (January-March)

    273

    1590

    N/A

    Q1 (April-June)

    N/A

    254

    978

In response to the increased demand, temporary resource decisions have been taken during the annual planning process to address the operational pressure while maintaining core business functions and absorbing new mandates resulting from legislative amendments, government-wide transformation initiatives. The Agency will continue to monitor and decide on resource allocations to address operational pressures and ongoing priorities on a quarterly basis. 

During the first quarter of 2017-18, the Agency has initiated an assessment of its financial situation to identify possible efficiencies and resource needs.

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

Although there have been no significant changes in the nature of the Agency's operations or programs over the last quarter, the Agency continues to face a significant volume of air travel complaints.  This has affected overall operations within the Agency and has created pressures, which the Agency is currently addressing through reallocation of funds and business process improvements.

Approval by Senior Officials

Original signed by:


Scott Streiner
Chair and Chief Executive Officer
Gatineau, Canada
August 28, 2017

Original signed by:


Elizabeth Barker
A/ Chief Financial Officer
Gatineau, Canada
August 28, 2017

Statement of Authorities (unaudited)

Fiscal year 2017-2018
  Total available for use for the year ending March 31, 2018Return to reference * Used during the quarter ended June 30, 2017 Year to date used at quarter-end
Vote 1 – Program expenditures 27,714,765 5,171,801 5,171,801
Budgetary statutory authorities − Employee Benefit Plans 3,199,401 799,850 799,850
Total authorities 30,914,166 5,971,651 5,971,651
Fiscal year 2016-2017
  Total available for use for the year ending March 31, 2017Return to reference * Used during the quarter ended June 30, 2016 Year to date used at quarter-end
Vote 1 – Program expenditures 24,290,330 5,183,685 5,183,685
Budgetary statutory authorities − Employee Benefit Plans 3,501,757 875,439 875,439
Total authorities 27,792,087 6,059,124 6,059,124

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2017-2018
  Planned expenditures for the year ending March 31, 2018 Expended during the quarter ended June 30, 2017 Year to date used at quarter-end
Expenditures:
Personnel 23,577,754 5,630,244 5,630,244
Transportation and communications 416,690 81,493 81,493
Information 338,462 53,685 53,685
Professional and special services 2,034,137 112,492 112,492
Rentals 448,517 44,638 44,638
Repair and maintenance 68,674 26,012 26,012
Utilities, materials and supplies 126,009 20,634 20,634
Acquisition of land, buildings, and works 3,522,137    
Acquisition of machinery and equipment 381,786 2,453 2,453
Other subsidies and payments - - -
Total net budgetary expenditures 30,914,166 5,971,651 5,971,651
Fiscal year 2016-2017
  Planned expenditures for the year ending March 31, 2017 Expended during the quarter ended June 30, 2016 Year to date used at quarter-end
Expenditures:
Personnel 23,860,812 5,690,563 5,690,563
Transportation and communications 548,784 84,979 84,979
Information 410,582 32,144 32,144
Professional and special services 1,808,804 168,927 168,927
Rentals 577,315 56,186 56,186
Repair and maintenance 56,087 1,205 1,205
Utilities, materials and supplies 189,231 15,553 15,553
Acquisition of machinery and equipment 340,472 9,567 9,567
Other subsidies and payments - - -
Total net budgetary expenditures 27,792,087 6,059,124 6,059,124
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