Quarterly Financial Report for the quarter ended September 30, 2021
Table of contents
Management Statement for the Quarter Ending September 30, 2021
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, 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
Details: Graph 1
The figure illustrates the Agency's net budgetary authorities and expenditures for the quarter ended September 30, 2021, for fiscal years 2020-2021 and 2021-2022 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: 26,26 million dollars
Year-to-date: 17 million dollars
Second quarter expenditures: 9,13 million dollars
Time period: 2021-2022
Net budgetary authorities: 41,39 million dollars
Year-to-date: 20,30 million dollars
Second quarter expenditures: 10,38 million dollars
2.1 Statement of Authorities
The CTA’s total authorities available for use in 2021-2022, totalling $41,386,395, have increased by $15,125,156 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 September 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 second quarter have increased by $1,257,802, from $9,125,198 to $10,383,000, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This increase is mainly attributable to an increase in the Personnel and Professional and special services expense categories as explained below:
- The expenditures in the Personnel category have increased by $822,264 and is primarily due to the financial impact of the implementation of the Catch-up Clauses in the June 2019 Memorandum of Agreement on Damages caused by the Phoenix Pay System, an increase in Employee Benefit Plan expenditures and the timing of the salary recoveries from other departments completed in this quarter.
- The expenditures in the Professional and special services category have increased by $529,610 and is primarily due to the costs associated with The Government of Canada Workplace 2.0 Fit-up Standards project.
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 approximately 16,000 complaints for processing into 2021-2022. Between the start of 2021-2022 and the end of September 2021, the CTA still received almost 5,000 complaints, despite the lower volumes of air traffic. 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. About 25 percent of the CTA's reference level is temporary, and is scheduled to sunset at the end of 2021-2022. 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.
While the CTA is working as fast as it can to triage and address complaints, it will be clearly impossible to process complaints 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 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.
In addition to the increased demand for dispute resolution, there are growing pressures on the CTA's ability to achieve its objectives, due to a significant increase in its legislative and regulatory responsibilities – the regulatory provisions for which the CTA is responsible for has grown by approximately 370 percent. The CTA has taken steps to modernize and increase the efficiency of its processes, but there is a risk that this is not enough to respond to these ongoing pressures.
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. On August 13, 2021, the Government of Canada announced its intent to require vaccination across the federal public service. To ensure employees are supported during the implementation of the Policy on COVID-19 Vaccination for the Core Public Administration Including the Royal Canadian Mounted Police, which comes in to effect on October 6, 2021, the CTA has disseminated guidance and information related to the vaccine requirement.
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 has 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. During the period covered by this report, the CTA continued to analyze the input received from the consultations held on this matter from January 15 to February 15, 2021.
Approval by Senior Officials
Chair and Chief Executive Officer
November 24, 2021
Chief Financial Officer
November 24, 2021
Statement of Authorities (unaudited)
|Total available for use for the year ending March 31, 2022*||Used during the quarter ended September 30, 2021||Year to date used at quarter-end|
|Vote 1 – Program expenditures||36,780,005||9,231,403||17,994,011|
|Budgetary statutory authorities − Employee Benefit Plans||4,606,390||1,151,597||2,303,194|
|Total available for use for the year ended March 31, 2021*||Used during the quarter ended September 30, 2020||Year to date used at quarter-end|
|Vote 1 – Program expenditures||22,728,794||8,242,087||15,234,581|
|Budgetary statutory authorities − Employee Benefit Plans||3,532,445||883,111||1,766,222|
Departmental Budgetary Expenditures by Standard Object (unaudited)
|Expenditures:||Planned expenditures for the year ending March 31, 2022||Expended during the quarter ended September 30, 2021||Year to date used at quarter-end|
|Transportation and communications||276,332||24,936||43,855|
|Professional and special services||3,338,933||916,632||1,219,327|
|Repair and maintenance||242,198||4,589||12,317|
|Utilities, materials and supplies||96,296||2,937||48,961|
|Acquisition of land, buildings, and works||-||-||-|
|Acquisition of machinery and equipment||451,642||45,965||83,415|
|Other subsidies and payments||24,162||(1,265)||24,162|
|Total net budgetary expenditures||41,386,395||10,383,000||20,297,205|
|Expenditures:||Planned expenditures for the year ending March 31, 2021||Expended during the quarter ended September 30, 2020||Year to date used at quarter-end|
|Transportation and communications||525,791||44,574||53,948|
|Professional and special services||1,910,755||387,022||501,110|
|Repair and maintenance||64,086||1,045||1,183|
|Utilities, materials and supplies||100,850||37,038||78,317|
|Acquisition of land, building and works||-||-||-|
|Acquisition of machinery and equipment||1,190,321||108,509||422,659|
|Other subsidies and payments||-||-||125|
|Total net budgetary expenditures||26,261,239||9,125,198||17,000,803|
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