Archived — Quarterly Financial Report — Quarter ended June 30, 2016

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Statement outlining results, risks and significant changes in operations, personnel, and programs


1. Introduction

This quarterly 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 Accounting Standard 1.3. This report should be read in conjunction with the 2016-17 Main Estimates and Supplementary Estimates A. This quarterly report has not been subject to an external audit or review.

Authority, Mandate & Program Activities

As Canada's most populous region — home to more than 12.8 million residents living in 288 communities — southern Ontario is a key contributor to the Canadian economy. The Government of Canada created the Federal Economic Development Agency for Southern Ontario (FedDev Ontario) in 2009 to support economic growth in southern Ontario through the delivery of federal programs and services. FedDev Ontario works with communities, businesses and not-for-profit organizations in southern Ontario to actively promote the region and build a strong foundation of investment and partnerships to help secure Canada's long-term prosperity.

FedDev Ontario works as a co-investor, convener, champion and delivery agent, intentionally directing its resources to activities with the greatest regional impacts. Working in collaboration with organizations and businesses, FedDev Ontario is able to advance innovative technologies and leverage community capacity to develop regionally-based economic solutions.

Further details on FedDev Ontario's authorities, mandate and program activities can be found in the Report on Plans and Priorities and Part II of the Main Estimates.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes FedDev Ontario's spending authorities granted by Parliament and those used by FedDev Ontario—consistent with the Main Estimates and Supplementary Estimates A for the 2016-17 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 moneys 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.

FedDev Ontario uses the full accrual method of accounting to prepare and present its annual financial statements that are part of its performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended June 30, 2016.

2.1 Authorities Analysis

Planned departmental spending in fiscal year 2016-17 totals $256.6 million, a $41.3 million increase over that available at the close of the first quarter in the 2015-16 fiscal year. This comprises a $41.4 million increase in program authorities and a decrease of $0.1 million in operating authorities.

The $41.3 million increase in program authorities is the result of the introduction of funding for the Canada 150 Community Infrastructure Program ($44.4 million), an adjustment to the Southern Ontario Prosperity Initiatives ($3 million decrease and $8.6 million transfer to other government departments), a decrease to the Advanced Manufacturing Fund ($1.0 million) and an additional $9.6 million for the grant for the City of Brantford to support the Brantford Greenwich-Mohawk Brownfield Remediation project.

Figure: Total authorities available for use for the year ending , compared to total authorities available for use for the year ending (in millions of dollars)
Bar chart of Total authorities available for use for the year ending March 31, 2017, compared to total authorities available for use for the year ending March 31, 2016 (in millions of dollars) (the long description is located below the image)
Description of Figure
Total authorities available for use for the year ending March 31, 2017, compared to total authorities available for use for the year ending March 31, 2016 (in millions of dollars)
Type of authorities  Fiscal Year
(in millions of dollars)
2015-16 2016-17
Operating Spending Authorities 29.0 28.9
Program Spending Authorities 186.2 227.7

2.2 Expenditure Analysis

In the first quarter of the 2016-17 fiscal year, total budgetary expenditures were $37.9 million compared to $21.1 million reported in the same period of 2015-16. This represents a year-over-year increase of $16.8 million, or 79.6 percent.

Quarterly spending includes $32.3 million on programs and $5.6 million on operating expenditures. Spending on operating costs decreased slightly by $0.3 million compared to the same period in 2015-16, and program expenditures have increased by $17.0 million.

Statement of Departmental Budgetary Expenditures by Standard Object

The following provides additional analysis of key variances at the Standard Object level.

Used During the Quarter

Spending on transfer payments was $32.3 million in the first quarter of 2016-17, compared to $15.2 million in the same quarter of 2015-16. The increase in transfer payment expenditures is an expected trend as the current suite of programs has committed funding against a portfolio of projects that are now underway, resulting in increased submissions of eligible costs for reimbursement.

Personnel-related expenditures totaled $5.2 million, displaying minimal change from the $5.4 million in the same period in 2015-16. This change is primarily attributed to efficiencies gained through the alignment of all regional development agencies under the Innovation, Science and Economic Development portfolio in the fall of 2015.

During the first quarter of 2016-17, other operating expenditures totaled $433,000, a decrease of $129,000 from the same period in 2015-16. This decrease was primarily driven by decreases in Repair and Maintenance (−$21,000), Acquisition of Machinery and Equipment (−$67,000) and other office fit-up costs attributed to FedDev Ontario's headquarters relocation to Waterloo. Spending on other standard objects displayed non-material changes ranging from (+$8,000 to −$20,000).

3. Risks and Uncertainties

FedDev Ontario maintains a Corporate Risk Profile, which identifies and assesses risks that could impact the objectives of the agency. To minimize potential financial impact, FedDev Ontario maintains a strong system of budgeting, forecasting and internal controls, helping to mitigate financial risks related to the Agency's funding authorities.

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

In Budget 2016, the Government of Canada committed an additional $150 million over two years to the Canada 150 Community Infrastructure Program, doubling the annual contributions from FedDev Ontario to $44.4 million in fiscal years 2016-17 and 2017-18.

Regarding changes in key personnel, Mr. Frank Lofranco was appointed to the role of Vice President, Business Innovation and Community Development on April 4, 2016.

Approval by Senior Officials

Original signed by

space to insert Nancy Horsman' signature
Nancy Horsman
President
Waterloo, Canada

Original signed by

Space to insert Kei Moray's signature
Kei Moray
Acting Chief Financial Officer
Waterloo, Canada

Statement of Authorities (unaudited)

Table: Statement of Authorities (unaudited)
(in thousands of dollars) Fiscal Year 2016-17 Fiscal Year 2015-16
Total available for use for the year ending March 31, 2017Footnote 1 Used during the quarter ended June 30, 2016 Year to date used at quarter-end Total available for use for the year ending March 31, 2016Footnote 1 Used during the quarter ended June 30, 2015 Year to date used at quarter-end
Vote 1—Net Operating Expenditures 25,754 4,814 4,814 25,859 5,123 5,123
Vote 5—Grants and Contributions 227,680 32,259 32,259 186,240 15,214 15,214
Budgetary statutory authorities:
Employee benefit plans 3,214 803 803 3,151 788 788
Minister of State—car allowance - - - 2 1 1
Total budgetary authorities 256,648 37,876 37,876 215,252 21,126 21,126
Non-budgetary authorities - - - - - -
Total authorites 256,648 37,876 37,876 215,252 21,126 21,126

Table 1: Departmental budgetary expenditures by Standard Object (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars) Fiscal Year 2016-17 Fiscal Year 2015-16
Planned expenditures for the year ending March 31, 2017Footnote 1 Used during the quarter ended June 30, 2016 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2016Footnote 1 Used during the quarter ended June 30, 2015 Year to date used at quarter-end
Expenditures:
PersonnelFootnote 2 21,902 5,184 5,184 21,910 5,350 5,350
Transportation and communications 997 90 90 943 110 110
Information 494 24 24 230 34 34
Professional and special services 4,418 283 283 4,458 295 295
Rentals 172 5 5 371 6 6
Repair and maintenance 316 20 20 570 41 41
Utilities, materials and supplies 301 7 7 124 13 13
Acquisition of land, buildings and works 0 0 0 36 0 0
Acquisition of machinery and equipment 350 1 1 349 68 68
Transfer payments 227,680 32,259 32,259 186,240 15,214 15,214
Other subsidies and payments 18 3 3 21 (5) (5)
Total budgetary expenditures 256,648 37,876 37,876 215,252 21,126 21,126
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