Quarterly Financial Report for the quarter ended June 30, 2023

Management Statement for the Quarter Ending June 30, 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 Canadian Transportation Agency (Agency) 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 Agency 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 Agency 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 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 $51,955,153, have increased by $10,508,634 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 the increase in temporary funding (approximately $10.1 million) 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.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

Compared to the previous year, total budgetary expenditures recorded in the first quarter have increased by $635,687 from $8,488,232 to $9,123,919, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This increase is mainly attributable to an increase in the Personnel expenditure category. On March 28, 2023, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, released Budget 2023 which included additional temporary funding for the Agency. Upon this announcement, the Agency was able to initiate its planned staffing actions, thus explaining the higher personnel expenditures in the first quarter of 2023-2024.

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 Agency continues to see an upward trend in its incoming complaint volumes. Over the last year, the Agency experienced a record surge in air passenger complaints – over 42,000, which is almost six times as many as five years ago (7,650 received). The additional funding received in 2023-2024 will allow the Agency to increase its staff complement, make investments in technology to improve its systems and continue its comprehensive review of business processes in order to better serve Canadians. The Agency now has the authority to put in place a cost recovery regime, starting with the processing of air passenger complaints, which should contribute to fund the operations of the Agency when the temporary funding ends in 2025-2026.

On June 22, 2023, Budget Implementation Act, 2023, No.1 (BIA), received Royal Assent and came into force. It modified the Canada Transportation Act to 1) clarify, simplify and strengthen Canada's air passenger protection regime, 2) replace the current process for resolving air travel complaints (which includes an adjudication process by Governor in Council-appointed members) with a more simplified process conducted primarily by Agency employees, and 3) provide the Agency the authority to implement a cost recovery regime. These amendments represent novel and significant undertakings for the Agency that will need to be implemented within a short timeframe.

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

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:

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Statement of Authorities (unaudited)

Fiscal year 2023-2024

	Total available for use for the year ending March 31, 2024*	Used during the quarter ended June 30, 2023	Year to date used at quarter-end
Vote 1 – Program expenditures	44,417,511	8,216,207	8,216,207
Budgetary statutory authorities − Employee Benefit Plans	7,537,642	907,712	907,712
Total authorities	51,955,153	9,123,919	9,123,919

Fiscal year 2022-2023

	Total available for use for the year ended 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	5,596,530	885,397	885,397
Total authorities	41,446,519	8,488,232	8,488,232

Departmental Budgetary Expenditures by Standard Object (unaudited)

Fiscal year 2023-2024

Expenditures:	Planned expenditures for the year ending March 31, 2024	Expended during the quarter ended June 30, 2023	Year to date used at quarter-end
Personnel	45,668,631	8,133,060	8,133,060
Transportation and communications	408,566	89,014	89,014
Information	341,109	113,573	113,573
Professional and special services	3,002,573	359,006	359,006
Rentals	1,514,193	349,115	349,115
Repair and maintenance	94,887	2,433	2,433
Utilities, materials and supplies	424,688	71,876	71,876
Acquisition of machinery and equipment	501,761	7,098	7,098
Other subsidies and payments	(1,255)	(1,255)	(1,255)
Total net budgetary expenditures	51,955,153	9,123,919	9,123,919

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