Quarterly Financial Report for the quarter ended September 30, 2019
Management Statement for the Quarter Ending September 30, 2019
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 Canadian Transportation Agency (CTA) is an independent, quasi-judicial tribunal and regulator that has, with respect to all matters necessary for the exercise of its jurisdiction, all the powers of a superior court. The CTA has three mandates:
- It helps ensure that the national transportation system runs efficiently and smoothly in the interests of all Canadians: those who work and invest in it; the producers, shippers, travelers and businesses who rely on it; and the communities where it operates.
- It protects the human right of persons with disabilities to an accessible transportation network.
- It provides consumer protection for air passengers.
To help advance these mandates, the CTA has three tools at its disposal:
- Rule-making: It develops and enforces 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: It resolves 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: It provides information on the transportation system, the rights and responsibilities of transportation providers and users, and its legislation and services.
Further information on the CTA’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 CTA's spending authorities granted by Parliament, and those used by the CTA consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2019-2020 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 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 CTA 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 the Fiscal Quarter and the 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 2018-2019 and 2019-2020 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: 2018-2019
Net budgetary authorities: 34.76 million dollars
Year to date results : 14.26 million dollars
First quarter expenditures: 7.56 million dollars
Time period: 2019-2020
Net budgetary authorities: 36.05 million dollars
Year to date results : 15.76 million dollars
First quarter expenditures: 8.13 million dollars
2.1 Statement of Authorities
The CTA’s total authorities available for use in 2019-2020, totalling $36,047,159, have increased by $1,283,531 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 attributable to the timing of funds received. In 2018-2019, the CTA received new funding to implement legislative and regulatory changes related to Canada's freight rail system, as announced in the 2017 Fall Economic Statement. This funding was only received in the third quarter of 2018-2019, through Supplementary Estimates A. However, in 2019-2020, this funding was included in the Main Estimates and therefore was received in the first quarter of 2019-2020. This represents an increase of $1,828,417. In addition to this, in the first quarter of 2019-2020, the CTA received new funding totalling $446,385 as part of the Accessible Canada initiative, following the coming into force of the Accessible Canada Act on June 21, 2019. These increases are offset by the decrease in funding to support the CTA's modernization ($727,077), as announced in Budget 2018 and a reduction in the operating budget carry forward ($361,172).
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
Compared to the previous year, total budgetary expenditures recorded in the second quarter have increased by $575,605, from $7,557,544 to $8,133,149, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This increase is mainly attributable to an increase in the Personnel, Professional and special services and Rentals expense categories. These increases are offset by a reduction in the Transportation and communications, Information and Acquisition of machinery and equipment expense categories as explained below:
- The expenditures in the Personnel category have increased by $608,216. This increase is primarily due to the financial impact of the signing of several collective agreements and the timing of the salary recoveries from other departments completed in this quarter.
- The expenditures in the Professional and special services category have increased by $113,733. This increase is primarily attributable to the period in which the purchases were settled as well as the development of new online products such as an air passenger protection microsite and online complaint forms to help passengers navigate their rights, following the coming into force of CTA's new Air Passenger Protection Regulations (APPR) on July 15, 2019.
- The expenditures in the Rentals category have increased by $95,760. This increase is primarily attributable to the period in which the purchases were settled.
- The expenditures in Transportation and communications and Information categories have decreased by $122,750 and $30,240, respectively, over the previous year. In 2018-2019, there was an increase in these expenditure categories due to the CTA's consultations with the travelling public, the airline industry, consumer rights groups, and other interested parties to develop new air passenger protection regulations, following the coming into force of the Transportation Modernization Act on May 23, 2018.
- The expenditures in the Acquisition of machinery and equipment have decreased by $65,905 due to the purchase of informatics equipment in 2018-2019.
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
As reported in previous quarters, the recent coming into force of the Air Passenger Protection Regulations and the Accessible Canada Act are resulting in increases in complaints, particularly those related to air travel and accessibility. Over the last fiscal years, the CTA has relied on temporary funding, combined with short-term internal reallocations to deliver on its expanded mandate.
4. Significant Changes in Relation to Operations, Personnel and Programs
There have been no significant changes in the nature of the CTA's operations or programs over the last quarter.
Approval by Senior Officials
Chair and Chief Executive Officer
November 27, 2019
Manon Fillion CPA, CA
Chief Financial Officer
November 27, 2019
Statement of Authorities (unaudited)
|Total available for use for the year ending March 31, 2020*||Used during the quarter ended September 30, 2019||Year to date used at quarter-end|
|Vote 1 – Program expenditures||32,517,420||7,265,566||14,100,648|
|Budgetary statutory authorities − Employee Benefit Plans||3,529,739||867,583||1,660,955|
|Total available for use for the year ended March 31, 2019*||Used during the quarter ended September 30, 2018||Year to date used at quarter-end|
|Vote 1 – Program expenditures||31,424,357||6,764,172||12,670,453|
|Budgetary statutory authorities − Employee Benefit Plans||3,339,271||793,372||1,586,744|
Departmental Budgetary Expenditures by Standard Object (unaudited)
|Expenditures:||Planned expenditures for the year ending March 31, 2020||Expended during the quarter ended September 30, 2019||Year to date used at quarter-end|
|Transportation and communications||653,046||131,706||228,714|
|Professional and special services||3,689,609||366,118||674,580|
|Repair and maintenance||141,193||3,063||3,446|
|Utilities, materials and supplies||160,466||8,774||24,102|
|Acquisition of land, buildings, and works||3,522,137||-||-|
|Acquisition of machinery and equipment||223,950||14,912||16,702|
|Other subsidies and payments||-||-||13|
|Total net budgetary expenditures||36,047,159||8,133,149||15,761,603|
|Expenditures:||Planned expenditures for the year ending March 31, 2019||Expended during the quarter ended September 30, 2018||Year to date used at quarter-end|
|Transportation and communications||489,689||254,456||340,989|
|Professional and special services||4,682,688||252,385||405,469|
|Repair and maintenance||57,170||1,669||18,196|
|Utilities, materials and supplies||106,857||33,006||71,906|
|Acquisition of land, building and works||3,522,137||-||-|
|Acquisition of machinery and equipment||224,808||80,817||134,871|
|Other subsidies and payments||-||371||1,550|
|Total net budgetary expenditures||34,763,628||7,557,544||14,257,197|