Quarterly Financial Report For the quarter ended December 31, 2022

Management Statement for the Quarter Ending December 31, 2022

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 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 core 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, travellers 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 2022-2023 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

2.1 Statement of Authorities

The CTA’s total authorities available for use in 2022-2023, totalling $43,613,050, have decreased by $1,550,612 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 decrease in authorities available for use 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. This amount was used in 2021-2022 and therefore was not reprofile to 2022-2023. This decrease is offset by an increase of $1,104,810 in temporary funding in order to continue to respond to a higher number of service and accessibility related complaints and an increase in the amount received from Treasury Board Secretariat to fund new collective agreements.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the third quarter have decreased by $930,605 from $10,687,542 to $9,756,937 as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This decrease is mainly attributable to a decrease in the Professional and special services and the Acquisition of machinery and equipment categories as explained below:

• The expenditures in the Professional and special services category have decreased by $522,406 and is primarily due to the costs incurred in the third quarter of 2021-2022 associated with the Government of Canada Workplace 2.0 Fit-up Standards project, as the majority of the work of this project was completed in 2021-2022.
• The expenditures in the Acquisition of machinery and equipment category have decreased by $488,918 and is primarily due to acquisitions of informatics equipment associated with the Government of Canada Workplace 2.0 Fit-up Standards project in 2021-2022.

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 CTA continues to see an upward trend in its incoming complaints volumes – between the start of 2022-2023 and the end of December 2022, the CTA received more than 27,500 complaints, representing an increase of 239% in comparison to the complaints received in the first three quarters of 2021-2022. This upward trend in complaints volume corresponds to the increase in post-pandemic travel and the significant number of flight disruptions and delays seen in Canada's largest airports as transportation service providers are navigating through challenges related to their recovery. This increase in incoming complaints, in excess of previous projections, will result in a further rise in the CTA's backlog of complaints, currently sitting at approximately 33,000 complaints.

The supplemental funding the CTA received through Budget 2022 to help address the number of incoming complaints is for 2022-23 only. This time limited funding has allowed the CTA to maintain its existing processing capacity, while planning and initiating improvements to the complaint management process. The temporary nature of the funding has resulted in high employee turnover and difficulties in recruiting and training new employees.

4. Significant Changes in Relation to Operations, Personnel and Programs

The CTA continues to maintain its normal operations while its employees continue to work remotely and provide service using electronic means. The CTA is facing a unique challenge as employees will return to work in a brand new facility at 60 Laval Street in Gatineau, Québec. As at December 31, 2022, the new facility is ready to accommodate the CTA's staff complement. Employees will officially return to the workplace on January 3, 2023, for which a hybrid work model has been developed.

Approval by Senior Officials

Approved by:

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Statement of Authorities (unaudited)

Fiscal year 2022-2023

	Total available for use for the year ending March 31, 2023*	Used during the quarter ended December 31, 2022	Year to date used at quarter-end
Vote 1 – Program expenditures	38,016,620	8,871,540	24,750,895
Budgetary statutory authorities − Employee Benefit Plans	5,596,430	885,397	2,656,190
Total authorities	43,613,050	9,756,937	27,407,085

Fiscal year 2021-2022

	Total available for use for the year ending March 31, 2022*	Used during the quarter ended December 31, 2021	Year to date used at quarter-end
Vote 1 – Program expenditures	40,557,272	9,535,945	27,529,956
Budgetary statutory authorities − Employee Benefit Plans	4,606,390	1,151,597	3,454,791
Total authorities	45,163,662	10,687,542	30,984,747

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2022-2023

Expenditures:	Planned expenditures for the year ending March 31, 2023	Expended during the quarter ended December 31, 2022	Year to date used at quarter-end
Personnel	35,337,141	8,750,780	24,471,137
Transportation and communications	565,016	105,116	248,761
Information	490,286	16,269	233,155
Professional and special services	4,192,939	446,539	1,227,906
Rentals	2,686,292	408,109	1,095,688
Repair and maintenance	117,952	10,693	21,692
Utilities, materials and supplies	63,698	355	61,979
Acquisition of machinery and equipment	158,228	16,902	45,269
Other subsidies and payments	1,498	2,174	1,498
Total net budgetary expenditures	43,613,050	9,756,937	27,407,085

Fiscal year 2021-2022

Expenditures:	Planned expenditures for the year ending March 31, 2022	Expended during the quarter ended December 31, 2021	Year to date used at quarter-end
Personnel	35,388,828	8,703,615	26,931,990
Transportation and communications	299,427	16,411	60,266
Information	403,655	62,400	213,082
Professional and special services	6,037,693	968,945	2,188,272
Rentals	1,563,259	386,935	873,046
Repair and maintenance	159,632	7,594	19,911
Utilities, materials and supplies	96,312	37,197	86,158
Acquisition of machinery and equipment	1,192,069	505,820	589,235
Other subsidies and payments	22,787	(1,375)	22,787
Total net budgetary expenditures	45,163,662	10,687,542	30,984,747