Quarterly Financial Report for the quarter ended June 30, 2020
Management Statement for the Quarter Ending June 30, 2020
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 2020-2021 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 June 30, for fiscal year 2019-2020 and 2021-2021 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: 2019-2020
Net budgetary authorities: 35.42 million dollars
First quarter expenditures: 7.63 million dollars
Time period: 2020-2021
Net budgetary authorities: 24.93 million dollars
First quarter expenditures: 7.88 million dollars
2.1 Statement of Authorities
The CTA’s total authorities available for use in 2020-2021, totalling $24,925,283, have decreased by $10,490,717 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 the authorities available for use is due to the reduced supply of the Main Estimates. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall. The CTA is expected to receive full supply for the 2020-2021 Main Estimates in December 2020.
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
Compared to the previous year, total budgetary expenditures recorded in the first quarter have increased by $247,151, from $7,628,454 to $7,875,605, 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 expenses categories. These increases are offset by a reduction in the Transportation and communications and Professional and special services expense categories as explained below:
- The expenditures in the Personnel category have increased by $160,450 and is primarily due to the additional resources required to address the continued influx of air travel complaints from 2019-2020.
- The expenditures in the Acquisition of machinery and equipment have increased by $329,925 due to the purchase of informatics equipment in order to replace outdated equipment and support flexible work arrangement for CTA's workforce, including telework.
- The expenditures in the Transportation and communications category have decreased by $87,634 and is primarily due to the COVID-19 travel restrictions.
- The expenditures in the Professional and special services category have decreased by $211,939 and 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 in 2019-2020.
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 has resulted in significant increases in the number of complaints received. At the close of 2019-20, a total of 13,467 complaints were carried forward for processing into 2020-21. There is a risk that the CTA will not be able to process accumulated backlog without additional resources and staff.
In light of the COVID-19 pandemic, the air industry has limited its operations, and cancelled many flights to align with government-issued travel limitations worldwide and a steep decrease in passengers wishing to fly. With the imminent gradual return in flights, it is imperative that the CTA has sufficient capacity, as the lack thereof would undermine the intent of the APPR.
4. Significant Changes in Relation to Operations, Personnel and Programs
During these difficult times, the CTA continues to maintain its normal operations while its employees practice social distancing. The CTA's dedicated employees are working remotely and are available through electronic means to provide service. However, it should be noted that the CTA temporarily paused all dispute resolution activities involving air carriers between March 13 and June 30, 2020, to permit them to focus on immediate and urgent operational demands such as the repatriation of Canadians stranded abroad, issued temporary exemptions to certain APPR provisions to give carriers additional flexibility to adjust flight schedules as global air travel was thrown into chaos by the COVID-19 pandemic and related travel restrictions and delayed the coming-into-force of a number of targeted provisions of the Air Transportation for Persons with Disabilities Regulations (ATPDR) until January 1, 2021.
Approval by Senior Officials
Chair and Chief Executive Officer
August 25, 2020
Chief Financial Officer
August 26, 2020
Statement of Authorities (unaudited)
|Total available for use for the year ending March 31, 2021 *||Used during the quarter ended June 30, 2020||Year to date used at quarter-end|
|Vote 1 – Program expenditures||21,392,838||6,992,494||6,992,494|
|Budgetary statutory authorities − Employee Benefit Plans||3,532,445||883,111||883,111|
|Total available for use for the year ended March 31, 2020 *||Used during the quarter ended June 30, 2019||Year to date used at quarter-end|
|Vote 1 – Program expenditures||31,886,261||6,835,082||6,835,082|
|Budgetary statutory authorities − Employee Benefit Plans||3,529,739||793,372||793,372|
Departmental Budgetary Expenditures by Standard Object (unaudited)
|Expenditures:||Planned expenditures for the year ending March 31, 2021||Expended during the quarter ended June 30, 2020||Year to date used at quarter-end|
|Transportation and communications||525,791||9,374||9,374|
|Professional and special services||574,799||96,523||96,523|
|Repair and maintenance||64,086||138||138|
|Utilities, materials and supplies||100,850||41,279||41,279|
|Acquisition of land, buildings, and works||-||-||-|
|Acquisition of machinery and equipment||1,190,321||331,715||331,715|
|Other subsidies and payments||-||125||125|
|Total net budgetary expenditures||24,925,283||7,875,605||7,875,605|
|Expenditures:||Planned expenditures for the year ending March 31, 2020||Expended during the quarter ended June 30, 2019||Year to date used at quarter-end|
|Transportation and communications||653,046||97,008||97,008|
|Professional and special services||3,110,533||308,462||308,462|
|Repair and maintenance||141,193||383||383|
|Utilities, materials and supplies||160,466||15,328||15,328|
|Acquisition of land, building and works||3,522,137||-||-|
|Acquisition of machinery and equipment||223,950||1,790||1,790|
|Other subsidies and payments||-||13||13|
|Total net budgetary expenditures||35,416,000||7,628,454||7,628,454|