Quarterly Financial Report — Quarter ended June 30, 2017

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 2017–18 Main Estimates. This quarterly report has not been subject to an external audit or review.

1.1 Authority, Mandate and Program Activities

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is mandated to "strengthen southern Ontario's economic capacity for innovation, entrepreneurship and collaboration; and promote the development of a strong and diversified southern Ontario economy.”

Further details on FedDev Ontario's authorities, mandate and program activities can be found in Part II of the Main Estimates and FedDev Ontario's Departmental Plan for 2017-18.

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 FedDev Ontario's spending authorities granted by Parliament and those used by FedDev Ontario—consistent with the Main Estimates for the 2017–18 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.

1.3 FedDev Ontario's Financial Structure

FedDev Ontario manages its expenditures under two votes:

  • Vote 1—Net operating expenditures include the Agency's authorities related to personnel costs, operation and maintenance expenditures; and
  • Vote 5—Grants and contributions include all authorities related to transfer payments.

Expenses under budgetary statutory authorities, for which payments are made under a law previously approved by Parliament and which are not part of the annual appropriations bills, include items such as employer's portion of the employee benefit plan.

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, 2017.

2.1 Authorities Analysis

Total authorities available for use and planned expenditures increased to $269.3 million for fiscal year 2017–18, compared to $256.6 million for fiscal year 2016–17, as illustrated in the "Statement of Authorities" table. The net increase of $12.7 million (or 5 percent) relates to:

  • $1.3 million decrease in Vote 1 (Operating Authorities);
  • $14.5 million increase in Vote 5 (Grants and Contributions Authorities); and
  • $0.5 million decrease in Statutory Authorities.

Vote 1 – Operating Authorities

Total Vote 1 Operating Authorities available for use for the year ending March 31, 2018 amount to $24.4 million; compared to $25.7 million for fiscal year 2016–17. The net decrease of $1.3 million (or 5 percent) in funding is the result of:

  • The sun-setting of authorities transferred to FedDev Ontario for the delivery of the Building Canada Fund ($1.2 million); and
  • Targeted savings identified in Budget 2016 ($0.1 million).

Vote 5 – Grants and Contributions

Total Vote 5 Grants and Contributions Authorities available for use for the year ending March 31, 2018 amount to $242.2 million; compared to $227.7 million for fiscal year 2016–17. The net increase of $14.5 million (or 6 percent) in funding is the result of:

  • An increase of $24.4 million in funding for the Canada 150 Community Infrastructure Program; brought forward from 2016–17;
  • A net decrease of $9.2 million in grants to the City of Brantford to support the Brantford Greenwich-Mohawk Brownfield Remediation project and Mohawk Lake Remediation project.;
  • A decrease of $3 million in funding for the Southern Ontario Prosperity Initiatives, reflecting funding transferred to other departments for strategic projects; and
  • An increase of $2.3 million to the Advanced Manufacturing Fund, re-profiled from previous years.
Budgetary Authorities Available
(in millions of dollars)
Bar chart illustrating budgetary authorities available for use (in millions of dollars) (the long description is located below the image)
Description of Figure
Budgetary authorities available for use
(in millions of dollars)
Type of authority Fiscal Year
2016–17 2017–18
Vote 1 - Net Operating Expenditures 25.7 24.4
Vote 5 - Grants and Contributions 227.7 242.2
Staturtory Authorities 3.2 2.8

2.2 Expenditure Analysis

Budgetary expenditures in the first quarter 2017–18 totaled $39.7 million, compared to $37.9 million for the same period in 2016–17, as illustrated in the "Departmental Budgetary Expenditures by Standard Object" tables. The net increase of $1.8 million (5 percent) relates to:

  • $1 million increase in Vote 1 (Operating) expenditures;
  • $0.9 million increase in Vote 5 (Grants and Contributions) expenditures; and
  • $0.1 million decrease in Statutory expenditures.

Vote 1 (Operating Expenditures)

Quarter 1 expenditures for personnel increased by $0.7 million (or 15 percent) compared to the same period in previous fiscal year. This is primarily a result of retroactive payments made in 2017–18 related to the settlement of public service collective agreements.

Expenditures in other standard objects increased $0.3 million and did not see significant fluctuations, with individual variances ranging between −$2,000 and +$66,000.

Vote 5 (Grants and Contributions)

Spending on transfer payments in the first quarter is on track with previous year results, showing an increase of $0.9 million (or 3 percent).

(For additional information on expenditures, see the Departmental Budgetary Expenditures by Standard Object table in the Appendix.)

First Quarter Budgetary Expenditures
(in millions of dollars)
Bar chart illustrating First Quarter Budgetary Expenditures (in millions of dollars) (the long description is located below the image)
Description of Figure
First Quarter Budgetary Expenditures
(in millions of dollars)
Type of authority Fiscal Year
2016–17 2017–18
Vote 1 - Net Operating Expenditures 4.8 5.8
Vote 5 - Grants and Contributions 32.2 33.1
Staturtory Authorities 0.8 0.7

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.

FedDev Ontario's Departmental Plan for 2017–18 highlights the following key risks to achieving its plans and results, and corresponding risk response strategy: evolving economic context, managing information, and Human Resource management.

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

Susan Chambers was appointed to the role of Vice-President, Business Innovation and Community Development on June 5, 2017.

Approval by Senior Officials

Original signed by

space to insert Alain Beaudoin's signature
Alain Beaudoin
A/ President

Ottawa, Canada

Original signed by

Space to insert Michael Hammond's signature
Michael Hammond, CPA CGA
Chief Financial Officer

Statement of Authorities (unaudited)

Table: Statement of Authorities (unaudited)
(in thousands of dollars) Fiscal Year 2017–18 Fiscal Year 2016–17
Total available for use for the year ending March 31, 2018Footnote 1 Used during the quarter ended June 30, 2017 Year to date used at quarter-end 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
Vote 1–Net Operating Expenditures 24,395 5,847 5,847 25,754 4,814 4,814
Vote 5–Grants and Contributions 242,199 33,128 33,128 227,680 32,259 32,259
Budgetary statutory authorities: 2,755 689 689 3,214 803 803
Total authorites 269,349 39,664 39,664 256,648 37,876 37,876

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

Departmental budgetary expenditures by Standard Object (unaudited)
(in thousands of dollars) Fiscal Year 2017–18 Fiscal Year 2016–17
Planned expenditures for the year ending March 31, 2018Footnote 1 Used during the quarter ended June 30, 2017 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2018Footnote 1 Used during the quarter ended June 30, 2016 Year to date used at quarter-end
Expenditures:
Personnel Footnote 2 20,306 5,947 5,947 21,902 5,184 5,184
Transportation and communications 766 156 156 997 90 90
Information 414 36 36 494 24 24
Professional and special services 5,077 312 312 4,418 283 283
Rentals 167 14 14 172 5 5
Repair and maintenance 168 29 29 316 20 20
Utilities, materials and supplies 107 12 12 301 7 7
Acquisition of land, buildings and works - - - - - -
Acquisition of machinery and equipment 54 29 29 350 1 1
Transfer payments 242,198 33,128 33,128 227,680 32,259 32,259
Other subsidies and payments 92 1 1 18 3 3
Total budgetary expenditures 269,349 39,664 39,664 256,648 37,876 37,876
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