Quarterly Financial Report for the quarter ended June 30, 2021

Table of contents

Management Statement for the Quarter Ending June 30, 2021

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 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 2021-2022 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

Graph 1 – First quarter net budgetary authorities and expenditures per fiscal year
Graph 1 – First quarter net budgetary authorities and expenditures per fiscal year
Details: Graph 1

The figure illustrates the Agency's net budgetary authorities and expenditures for the quarter ended December 31, for fiscal years 2019-2020 and 2020-2021 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: 2020-2021
Net budgetary authorities: 24,93 million dollars
First quarter expenditures: 7,88 million dollars

Time period: 2021-2022
Net budgetary authorities: 40,34 million dollars
First quarter expenditures: 9,91 million dollars

2.1 Statement of Authorities

The CTA’s total authorities available for use in 2021-2022, totalling $40,342,308, have increased by $15,417,025 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 the authorities available for use is primarily due to two (2) significant items. Firstly, due to the COVID-19 pandemic and limited sessions in the spring of 2020-2021 for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall of 2020-2021. Therefore, the CTA only received 75% of the 2020-2021 Main Estimates as at June 30, 2020. Secondly, in 2021-2022, the CTA received $9,362,627 in temporary funding in order to continue to respond to a higher number of service and accessibility related complaints, as announced in the 2020 Economic and Fiscal Snapshot.

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 $2,038,600, from $7,875,605 to $9,914,205, 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 Acquisition of machinery and equipment expense category as explained below:

  • The expenditures in the Personnel category have increased by $1,938,976 and is primarily due to the additional resources required to address the continued influx of air travel complaints.
  • The expenditures in the Professional and special services category have increased by $206,172 and is primarily due to the costs associated with The Government of Canada Workplace 2.0 Fit-up Standards project as well as the period in which certain purchases were settled.
  • The expenditures in the Rentals category have increased by $129,677 and is primarily attributable to an increase in software licences as a result of the increase in human resources as well as the period in which certain purchases were settled.
  • The expenditures in the Acquisition of machinery and equipment category have decreased by $294,265 due to the purchase of informatics equipment in the first quarter of 2020-2021 in order to replace outdated equipment and support flexible work arrangement for CTA's workforce, including telework.

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

Between the time the Air Passenger Protection Regulations (APPR) fully came into force on December 15, 2019, and the start of the pandemic three months later, the CTA received an unprecedented number of complaints: over 11,200 in those three months alone. By comparison, 826 complaints were filed in 2015, 3,367 in 2016, 5,565 in 2017, 7,650 in 2018 and 19,392 in 2019. This is a 23-fold growth in volumes over 5 years and would be challenging for any organization. By the end of 2020-2021, the CTA received 13,275 complaints and carried over 16,000 complaints for processing into 2021-2022. While the CTA has received temporary funding increases from Parliament in response to this situation, it mostly had to handle these pressures through reprioritization of resources, substantial productivity gains, and long hours of hard work. Without increased ongoing and consistent funding, there is a risk the CTA will not be able to effectively deliver its mandate of consumer protection for air passengers.

In addition, while the CTA is working as fast as it can to triage and address complaints, these will not be addressed according to the CTA's service standards, without sufficient funded capacity, thereby affecting Canadians' ability to access justice in a timely manner. This also affects the CTA's credibility and ability to provide remedies as intended. As CTA resources are stretched thin to accommodate this burgeoning caseload, its capacity will be eroded in its other core mandate areas: protecting the rights of persons with disabilities and promoting the efficiency of the national transportation network.

As travel begins to ramp up again, the CTA's ability to deliver timely dispute resolution services to Canadians will depend on having adequate and predictable funding.

A significant number of federal employees, including the CTA's, have been working from home since March 2020, in light of the health and safety risks associated with the COVID-19 pandemic. As vaccinations rates increase and restrictions begin to ease, there is a general level of uncertainty regarding the eventual return to in-person work. In addition, the CTA is facing unique challenges, as employees will return to work in a brand new facility at 60 Laval Street in Gatineau, Québec. In response to this uncertainty, the CTA is focusing its efforts on change management, and is consulting its employees on an ongoing basis to seek feedback on future work-site arrangements. These consultations are being completed in an effort to minimize employees' concerns around the return to work and the future work-site. To ensure employees are supported during the transition period, the CTA will continue to prioritize employee mental health and wellness.

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 almost all working remotely and provide service using electronic means.

Although there have not been any significant changes to CTA programs as a result of COVID-19, the CTA did issue temporary adjustments to certain APPR provisions, which ended on June 30, 2020, to ensure that airlines had sufficient flexibility to adjust flight schedules as global air travel was thrown into chaos by the COVID-19 pandemic and related travel restrictions.

Following the termination date of these exemptions, airlines requested that the CTA reinstate and extend exemptions to some compensation and rebooking provisions of the APPR. After a consultation period between December 11, 2020 and January 29, 2021, the CTA issued a determination on April 16, 2021, denying all the requested exemptions on the basis that the APPR's critical passenger protections should only be temporarily adjusted in extraordinary circumstances and that while these existed during the early stages of the pandemic, this was no longer the case, notwithstanding the serious challenges facing carriers.

The CTA has also received requests from transportation service providers seeking temporary exemptions from some provisions of the Air Transportation for Persons with Disabilities Regulations (ATPDR) due to the impacts of COVID-19. The CTA held consultations on this matter from January 15 to February 15, 2021, and is currently analyzing the results.

Finally, France Pégeot was appointed Chair and Chief Executive Officer of the CTA on June 1, 2021.

Approval by Senior Officials

Approved by:


France Pégeot
Chair and Chief Executive Officer
Gatineau, Canada
August 16, 2021

 


Mireille Drouin
Chief Financial Officer
Gatineau, Canada
August 16, 2021


Statement of Authorities (unaudited)

Fiscal year 2021-2022
  Total available for use for the year ending March 31, 2022* Used during the quarter ended June 30, 2021 Year to date used at quarter-end
Vote 1 – Program expenditures 35,735,918 8,762,608 8,762,608
Budgetary statutory authorities − Employee Benefit Plans 4,606,390 1,151,597 1,151,597
Total authorities 40,342,308 9,914,205 9,914,205
Fiscal year 2020-2021
  Total available for use for the year ended 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 authorities 24,925,283 7,875,605 7,875,605

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2021-2022
Expenditures: Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended June 30, 2021 Year to date used at quarter-end
Personnel 30,478,231 9,116,118 9,116,118
Transportation and communications 410,306 18,919 18,919
Information 400,732 75,163 75,163
Professional and special services 6,722,383 302,695 302,695
Rentals 821,524 284,681 284,681
Repair and maintenance 676,495 7,728 7,728
Utilities, materials and supplies 174,229 46,024 46,024
Acquisition of land, buildings, and works - - -
Acquisition of machinery and equipment 631,462 37,450 37,450
Other subsidies and payments 26,946 25,427 25,427
Total net budgetary expenditures 40,342,308 9,914,205 9,914,205
Fiscal year 2020-2021
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
Personnel 21,329,276 7,177,142 7,177,142
Transportation and communications 525,791 9,374 9,374
Information 532,571 64,305 64,305
Professional and special services 574,799 96,523 96,523
Rentals 607,589 155,004 155,004
Repair and maintenance 64,086 138 138
Utilities, materials and supplies 100,850 41,279 41,279
Acquisition of land, building 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
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