Quarterly Financial Report for the quarter ended December 31, 2019
Management Statement for the Quarter Ending December 31, 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 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 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 December 31, 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: 33.59 million dollars
Year to date results : 22.02 million dollars
First quarter expenditures: 7.7 million dollars
Time period: 2019-2020
Net budgetary authorities: 36.75 million dollars
Year to date results : 24.43 million dollars
First quarter expenditures: 8.67 million dollars
2.1 Statement of Authorities
The CTA’s total authorities available for use in 2019-2020, totalling $36,747,705, have increased by $3,158,420 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 reprofile of $3,522,137 to pay for the cost related to the Government of Canada Workplace 2.0 Fit-up Standards project. In the third quarter of 2018-2019, this amount was reprofiled to 2019-2020. However, at the end of the third quarter of 2019-2020, this amount has not yet been reprofiled to 2020-2021, thus showing an excess of authorities available for use in 2019-2020.
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
Compared to the previous year, total budgetary expenditures recorded in the third quarter have increased by $904,036, from $7,765,118 to $8,669,154, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This increase is mainly attributable to an increase in the Personnel and Acquisition of machinery and equipment expense categories. These increases are offset by a reduction in the Transportation and communications and Information expense categories as explained below:
- The expenditures in the Personnel category have increased by $1,046,189 and is primarily due to the retroactive payment of salaries owed and the increased rates of pay stemming from the renewal of collective agreements. In addition, additional resources were required to address the influx of air travel complaints.
- The expenditures in the Acquisition of machinery and equipment have increased by $62,334 due to the purchase of informatics equipment in order to replace outdated equipment and support the CTA's increasing workload and personnel.
- The expenditures in Transportation and communications and Information categories have decreased by $59,090 and $139,016, 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.
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
The coming into force of the second phase of rights and protections under the Air Passenger Protection Regulations (APPR) on December 15th, 2019 is resulting in further increases in complaints. 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.
During the third quarter of 2019-2020, changes to the CTA senior management personnel were implemented. Mireille Drouin is now Chief Financial Officer of the CTA.
Approval by Senior Officials
Chair and Chief Executive Officer
February 28, 2020
Chief Financial Officer
February 28, 2020
Statement of Authorities (unaudited)
|Total available for use for the year ending March 31, 2020*||Used during the quarter ended December 31, 2020||Year to date used at quarter-end|
|Vote 1 – Program expenditures||33,217,966||7,801,571||21,902,219|
|Budgetary statutory authorities − Employee Benefit Plans||3,529,739||867,583||2,528,538|
|Total available for use for the year ended March 31, 2019*||Used during the quarter ended December 31, 2018||Year to date used at quarter-end|
|Vote 1 – Program expenditures||29,984,495||6,971,746||19,642,199|
|Budgetary statutory authorities − Employee Benefit Plans||3,604,790||793,372||2,380,116|
Departmental Budgetary Expenditures by Standard Object (unaudited)
|Expenditures:||Planned expenditures for the year ending March 31, 2020||Expended during the quarter ended December 31, 2019||Year to date used at quarter-end|
|Transportation and communications||653,046||127,791||356,505|
|Professional and special services||2,789,609||323,478||998,059|
|Repair and maintenance||141,193||24,353||27,798|
|Utilities, materials and supplies||160,466||36,064||60,166|
|Acquisition of land, buildings, and works||3,522,137||-||-|
|Acquisition of machinery and equipment||923,950||229,559||246,261|
|Other subsidies and payments||-||-||13|
|Total net budgetary expenditures||36,747,705||8,669,154||24,430,757|
|Expenditures:||Planned expenditures for the year ending March 31, 2019||Expended during the quarter ended December 31, 2018||Year to date used at quarter-end|
|Transportation and communications||489,689||186,881||527,870|
|Professional and special services||5,049,566||318,493||723,962|
|Repair and maintenance||57,170||248||18,444|
|Utilities, materials and supplies||106,857||46,581||118,487|
|Acquisition of land, building and works||-||-||-|
|Acquisition of machinery and equipment||224,808||167,225||302,096|
|Other subsidies and payments||-||2,465||4,015|
|Total net budgetary expenditures||33,589,285||7,765,118||22,022,315|