Quarterly Financial Report for the quarter ended September 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 – Second quarter net budgetary authorities and expenditures per fiscal year

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

    The figure illustrates the Agency's net budgetary authorities and expenditures for the quarter ending September 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 : 28.86 million dollars
    Expenditures for the quarter ending September 30 : 6.44 million dollars 

    Time period : 2015-2016
    Net budgetary authorities : 28.90 million dollars
    Expenditures for the quarter ending September 30 : 6.83 million dollars

2.1 Statement of Authorities

The Canadian Transportation Agency’s total authorities available for use in 2015-2016, totalling $28,897,300, 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 1 – Program expenditures have increased by a total of $39,012 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 second quarter increased by $384,501, from $6,443,607 to $6,828,108, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This increase is primarily due to the timing of the budget approval in fiscal year 2015-2016. The budget related to operating expenditures was approved earlier than in the previous year, allowing the responsibility centre managers to initiate their projects earlier in the fiscal year. This will ensure that expenditures are incurred in a consistent manner over the course of the year.

The 2015-2016 year-to-date budgetary expenditures recorded in the second quarter in the other subsidies and payments category have decreased by $698,757 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 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:

  • implementing regulations to enable the traveling public to easily determine the total advertised air price and to promote fair competition between advertisers in the air travel industry;
  • expanding authority to ensure the availability of air carriers’ terms and conditions of carriage on their website and at their business offices;
  • providing new arbitration services for shippers and railway companies on rail level of service;
  • 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; and
  • 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 compensation for the costs of responding to fires related to 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. 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

November 25, 2015

 

Jacqueline Bannister

A/Chief Financial Officer

Gatineau, Canada

November 25, 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 September 30, 2015 Year to date used at quarter-end
Total authorities 28,897,300 6,828,108 13,336,585
Vote 1 – Program expenditures 25,477,262 5,973,098 11,626,565
Budgetary statutory authorities − Employee Benefit Plans 3,420,038 855,010 1,710,020
Fiscal year 2014-2015
  Total available for use for the year ended March 31, 2015Footnote 2 Used during the quarter ended September 30, 2014 Year to date used at quarter-end
Total authorities 28,858,288 6,443,607 13,397,330
Vote 1 – Program expenditures 25,507,036 5,605,794 11,721,704
Budgetary statutory authorities − Employee Benefit Plans 3,351,252 837,813 1,675,626

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
September 30, 2015
Year to date used at quarter-end
 Total net budgetary expenditures 28,897,300 6,828,108 13,336,585
Expenditures:      
 Personnel 23,777,409 5,861,212 11,633,426
 Transportation and communications 552,235 131,053 198,171
 Information 413,163 51,265 82,038
 Professional and special services 2,984,074 632,105 1,098,543
 Rentals 580,945 88,942 170,378
 Repair and maintenance 56,440 19,941 20,214
 Utilities, materials and supplies 190,421 33,175 58,461
 Acquisition of machinery and equipment 342,613 10,415 71,282
 Other subsidies and payments - - 4,072
Fiscal year 2014-2015
  Planned expenditures for the year ending
March 31, 2015
Expended during the quarter ended
September 30, 2014
Year to date used at quarter-end
 Total net budgetary expenditures 28,858,288 6,443,607 13,397,330
Expenditures:      
 Personnel 23,661,869 5,748,245 11,387,678
 Transportation and communications 495,067 144,646 213,282
 Information 487,221 113,458 256,603
 Professional and special services 3,334,987 347,314 619,001
 Rentals 501,708 37,652 154,336
 Repair and maintenance 80,295 12,087 14,225
 Utilities, materials and supplies 147,296 26,104 42,790
 Acquisition of machinery and equipment 139,802 3,289 6,586
 Other subsidies and payments 10,043 10,812 702,829
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