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

• 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.

• 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

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