Quarterly Financial Report For the quarter ended December 31, 2023

Management Statement for the Quarter Ending December 31, 2023

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. It oversees the large and complex Canadian transportation system, essential to Canadians' economic and social well-being.

The Canada Transportation Act includes the National Transportation Policy, which states that competition and market forces are the prime agents in providing viable and effective transportation services. It also states that regulation may be required to meet public policy objectives that cannot be achieved by competition and market forces alone.

The Agency has specific powers assigned to it under this legislation:

1. The Agency is a regulator of modes of transportation under federal jurisdiction. The Agency develops and applies 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 be binding regulations, less formal guidelines, or codes of practice.
2. The Agency is a tribunal that hears and resolves disputes like a court. The Agency resolves disputes between transportation service providers and their clients or neighbours, using various tools from facilitation and mediation to arbitration and adjudication.

The Agency's mandates are:

• To help 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.
• To provide consumer protection for air passengers.
• To protect the human right of persons with disabilities to an accessible transportation network.

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 2023-2024 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 the Fiscal Quarter and the Fiscal Year-to-Date (YTD) Results

2.1 Statement of Authorities

The Agency’s total authorities available for use in 2023-2024, totalling $56,229,508 have increased by $12,616,458 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 in authorities available for use is mainly attributable to two factors:

1. An increase of approximately $10.1 million in temporary funding received in 2023-2024, as announced on March 14, 2023. This increase in temporary funding primarily aims to increase the Agency’s capacity to process air passengers complaints.
2. An increase of approximately $2.3 million in funding received following the renewal of various 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 increased by $3,677,945 from $9,756,937 to $13,434,882, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This increase is mainly attributable to an increase in the personnel expenditure category. As a result of the supplementary temporary funding granted in Budget 2023, the Agency continues to hire personnel primarily to increase its capacity to process air passengers complaints. In addition to the increased staff complement, personnel expenditures are greater in 2023-2024 following the renewal of various collective agreements.

With respect to all other budgetary expenditures by standard object, overall expenditures are similar to those of the previous fiscal year. Any variance is primarily attributable to a timing difference in the period in which the purchases were settled.

3. Risks and Uncertainties

Unpredictability of air travel complaint volumes: In recent years, the Agency has experienced a significant and continuous increase in air travel complaints, with peaks in the volume of complaints during major, widespread disruptions (e.g., due to unexpected passenger volumes, winter storms, IT network outages). Although the Agency has been provided with additional funding in 2023-2024 to deal with more air travel complaints, the volume of incoming complaints is difficult to predict and makes planning for case processing wait times and providing accurate information to the public a challenge.

Implementation of legislative and regulatory changes: The updates to the Canada Transportation Act require the Agency to revise significant aspects of its activities, implement new measures, modify services, regulations, and its internal systems, all in a short period of time. New staff must be hired and trained. Coordination and collaboration with external stakeholders is required, as well as communications with transportation system users and the public in general. Implementation of changes must be executed efficiently, without compromising on-going operations.

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

Effective January 8, 2024, Ruth Dagenais was appointed Chief Financial Officer of the Agency, following Mireille Drouin's departure in September 2023.

There have been no other significant changes in relation to the Agency's operations or programs over the last quarter, except as described in section 3.

Approval by Senior Officials

Approved by:

Statement of Authorities (unaudited)

Departmental Budgetary Expenditures by Standard Object (unaudited)