Quarterly Financial Report for the quarter ended June 30, 2022

Management Statement for the Quarter Ending June 30, 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 $41,446,519, have increased by $1,104,211 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 primarily attributable to an increase in the Employee Benefit Plans (EBP) budgetary statutory authorities granted by Parliament.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the first quarter have decreased by $1,425,973, from $9,914,205 to $8,488,232, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This decrease is mainly attributable to a decrease in the Personnel expenditure category. As the CTA only received temporary funding to address its operational pressures, staffing actions have been primarily determinate and casual in nature. With sunsetting funds in 2021-2022, these determinate and casual appointments could not be renewed. On April 7, 2022, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released Budget 2022 which included additional temporary funding for the CTA. Only upon this announcement was the CTA able to resume its determinate and casual staffing actions, thus explaining the lower personnel expenditures in the first quarter of 2022-2023.

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 is seeing an upward trend in its incoming complaints volumes – between the start of 2022-2023 and the end of June 2022, the CTA received approximately 4,400 complaints in those three months alone. This upward trend in complaints volume is in line with the significant number of flight disruptions and delays seen in Canada's largest airports. Pursuant to the Air Passenger Protection Regulations (APPR), Canadians are looking to the CTA to seek remedies following unsuccessful attempts at seeking compensation from transportation service providers. This increase in incoming complaints, in excess of previous projections, will result in a further rise in the CTA's backlog of complaints (i.e., more complaints will be carried forward at the end of this year than in previous years).

The supplemental funding the CTA received through Budget 2022 to help address the number of incoming complaints was for 2022-23 only. This time limited funding has allowed the CTA to maintain existing processing capacity, while also identifying potential areas for process improvements moving forward. The temporary nature of the funding has resulted in high employee turnover and increased efforts dedicated to 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. However, as at June 30, 2022, the new facility is still not in a position to accommodate the CTA's staff complement. It is expected that the facility will only be ready to welcome CTA employees in fall 2022.

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 June 30, 2022	Year to date used at quarter-end
Vote 1 – Program expenditures	35,850,089	7,602,835	7,602,835
Budgetary statutory authorities − Employee Benefit Plans	5,596,430	885,397	885,397
Total authorities	41,446,519	8,488,232	8,488,232

Fiscal year 2021-2022

	Total available for use for the year ended 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

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 June 30, 2022	Year to date used at quarter-end
Personnel	36,936,720	7,714,717	7,714,717
Transportation and communications	446,815	55,137	55,137
Information	247,685	101,589	101,589
Professional and special services	2,020,824	331,434	331,434
Rentals	1,545,098	249,352	249,352
Repair and maintenance	75,268	-	-
Utilities, materials and supplies	89,596	32,668	32,668
Acquisition of machinery and equipment	86,603	5,425	5,425
Other subsidies and payments	(2,090)	(2,090)	(2,090)
Total net budgetary expenditures	41,446,519	8,488,232	8,488,232

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 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