Quarterly Financial Report for the quarter ended September 30, 2023 (PDF version, 351 KB)
Introduction
Agriculture and Agri-Food Canada (AAFC) is the federal department responsible for the Canadian agriculture and agri-food sector. Agriculture is a shared jurisdiction in Canada, and our department works closely with provincial and territorial governments on the development and delivery of policies and programs. Along with these policies and programs, our research and technology helps farmers, food producers, and processors grow and develop the sector in order to succeed in Canadian and global markets.
Detailed information on Agriculture and Agri-Food Canada's program activities can be found in the Departmental Plan.
This quarterly financial report has been prepared as required by section 65.1 of the Financial Administration Act in the form and manner prescribed by the Treasury Board, and should be read in conjunction with AAFC's 2023-24 Main Estimates and Supplementary Estimates (A).
This report has not been subject to an external audit or review.
Basis of presentation
This quarterly report has been prepared using an expenditure basis of accounting. The accompanying statement of authorities includes the Department's spending authorities granted by Parliament, and those used by the Department consistent with the 2023-24 Main Estimates, as well as the Supplementary Estimates (A) available for use during the 2023-24 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 of Canada. 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.
The Department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
Highlights of fiscal quarter and fiscal year-to-date results
This quarterly financial report reflects the results of the current fiscal period in comparison to the authorities approved by Parliament, as well as budget adjustments approved by Treasury Board up to September 30, 2023.
The following table provides a comparison of total authorities available for use and year-to-date expenditures for the second quarter of the current and previous fiscal year.
| All votes and statutory authorities (in millions of dollars) |
2023-24 | 2022-23 |
|---|---|---|
| Total authorities available for use | 3,489 | 3,453 |
| Total year-to-date expenditures | 723 | 928 |
| Utilization | 21% | 27% |
A. Significant changes to authorities
The following table provides a comparison of authorities by Vote for the second quarter of the current and previous fiscal year.
| Authorities (in millions of dollars) |
2023-24 | 2022-23 | Variances |
|---|---|---|---|
| Vote 1 — Net Operating Authorities | 668 | 637 | 31 |
| Vote 5 — Capital Authorities | 52 | 45 | 6 |
| Vote 10 — Grants and Contributions | 855 | 629 | 226 |
| Budgetary statutory authorities | 1,913 | 2,141 | (228) |
| Total Authorities | 3,489 | 3,453 | 36 |
|
Note: Totals may not add up due to rounding. |
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As of the end of the second quarter of fiscal year 2023-24, authorities of $3,489 million are 1% or $36 million higher than the same quarter last year due to the following changes:
- Statutory funding decreased $228 million due to reductions of $468 million in the Dairy Direct Payment Program (to be renewed this year), $108 million in the Agricultural Disaster Relief Program and $89 million in the AgriStability Program. These decreases were partially offset by an increase of $411 million in the AgriInsurance Program as a result of higher market prices caused by inflation.
- Vote 10 – Grants and Contributions funding increased $226 million for various initiatives. Funding for environment and climate initiatives rose by $108 million, the Supply Management Processing Investment Fund saw an increase of $39 million, and funding to support the Canadian wine industry increased by $32 million.
- Vote 1 – Operating funding rose by $31 million due to increases in funding for the Sustainable Canadian Agricultural Partnership and for climate-related programs.
- Vote 5 – Capital funding increased by $6 million mostly due to a $5-million increase in the capital budget carry forward into 2023-24.
B. Significant changes in year-to-date expenditures
The following table provides spending comparisons by Vote for the second quarter of the current and previous fiscal year.
| Expenditures (in millions of dollars) |
2023-24 | 2022-23 | Variance |
|---|---|---|---|
| Vote 1 — Net Operating expenditures | 316 | 289 | 27 |
| Vote 5 — Capital expenditures | 12 | 18 | (6) |
| Vote 10 — Grants and Contributions expenditures | 153 | 151 | 2 |
| Budgetary statutory expenditures | 242 | 470 | (229) |
| Total Net Budgetary Expenditures | 723 | 928 | (205) |
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Note: Totals may not add up due to rounding. |
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As of the end of the second quarter of fiscal year 2023-24, expenditures of $723 million are 22% or $205 million lower than the same quarter last year due to the following changes:
- Statutory expenditures saw a $229 million reduction mostly due to a $243-million drop in AgriInsurance program payments due to timing and delays for claims received. Fewer claims were received from Alberta, British Columbia and Ontario.
- Vote 1 – Net Operating expenditures increased $27 million as a result of a $14-million decline in Vote-netted revenues and a $10-million increase in salary costs. The revenue decline was caused by revenues going unrecognized in the second quarter due to processing delays as well as timing of cost recoveries for information technology services to other government departments. The $10-million increase in salaries is mostly due to collective bargaining obligations.
- Vote 5 – Capital expenditures declined $6 million due to decreased spending on retrofit projects for research and development centres that is expected to materialize later in the year.
Risks and uncertainties
Agriculture and Agri-Food Canada continues to exercise prudent management and oversight in implementing its policies and delivering its programs. The Department has established and integrated processes to identify, assess, monitor, and respond to a variety of strategic and operational risks to facilitate decision making and priority setting, and to contribute to more effective delivery and efficient use of resources.
The department continues to remain vigilant and prepare for risks, situations and events impacting its operating environment. Departmental mitigations are in place to manage the risks facing AAFC's people and processes to ensure we can attract, develop and retain a diverse, high performing, qualified workforce (Our People); adapt our processes and workplace in a way that maximizes the benefits of a hybrid workforce and seize opportunities learned from the pandemic (Our Workplace); as well as effectively navigate financial pressures and ensure scarce resources are allocated to areas of greatest importance (Prioritization and Oversight).
Departmental mitigations are also in place to manage longer-term impacts, including those related to technology and infrastructure and external events. These include the ability to effectively prevent, detect, contain or respond to cyber security threats (Cyber Security); ensuring that laboratories and other critical infrastructure can be maintained or recapitalized (Critical Infrastructure); and, ensuring the department can modernize its digital infrastructure in an appropriate or timely enough fashion (Digital Modernization for Data-enabled Services & Decisions). They also include the ability to adequately respond to the climate and environmental threats facing the agricultural sector (Climate and Sustainability); and managing disruptive industry and market crises (Economic and Market Disruption).
AAFC will continue to closely monitor its environment and operations in order to ensure that resources are being managed effectively to deliver expected results and/or to reallocate resources to key priorities, as necessary.
Significant changes in relation to personnel and programs
Personnel
In August 2023, Kimberly Saunders, Chief Audit and Evaluation Executive, left the Department.
In September 2023, Shannon Nix was appointed as the new Assistant Deputy Minister of the Strategic Policy Branch and Suzy McDonald, Associate Deputy Minister, left the Department.
Programs
There have been no significant changes in relation to programs.
Approval by senior officials
Approved by:
Original signed by
Stefanie Beck, Deputy Minister
Ottawa, Canada
Original signed by
Karen Durnford-McIntosh, Acting Chief Financial Officer
Ottawa, Canada
| Fiscal year 2023-24 | Fiscal year 2022-23 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2024Table 1 Footnote 1 | Used during the quarter ended September 30, 2023 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2023Table 1 Footnote 1 | Used during the quarter ended September 30, 2022 | Year to date used at quarter-end | |
| Vote 1 — Net Operating expenditures | 667,819 | 165,512 | 315,944 | 636,706 | 145,616 | 288,884 |
| Vote 5 — Capital expenditures | 51,844 | 8,033 | 11,726 | 45,488 | 12,908 | 17,966 |
| Vote 10 — Grants and contributions | 855,473 | 121,196 | 153,314 | 629,059 | 129,283 | 150,882 |
| Budgetary statutory authorities Table 1 Footnote 2 | 1,913,447 | 203,076 | 241,752 | 2,141,284 | 414,269 | 470,369 |
| Total Budgetary authorities | 3,488,584 | 497,817 | 722,737 | 3,452,537 | 702,076 | 928,101 |
| Total authorities | 3,488,584 | 497,817 | 722,737 | 3,452,537 | 702,076 | 928,101 |
|
Notes: Totals may not add due to rounding. |
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| Fiscal year 2023-24 | Fiscal year 2022-23 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2024 | Expended during the quarter ended September 30, 2023 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2023 | Expended during the quarter ended September 30, 2022 | Year to date used at quarter-end | |
| Expenditures: | ||||||
| Personnel | 586,099 | 148,462 | 281,693 | 558,151 | 140,957 | 278,215 |
| Transportation and communications | 3,961 | 2,206 | 3,851 | 2,757 | 1,622 | 2,571 |
| Information | 12,614 | 944 | 2,293 | 8,924 | 1,361 | 2,259 |
| Professional and special services | 136,180 | 24,537 | 43,090 | 124,521 | 20,645 | 38,580 |
| Rentals | 9,826 | 1,796 | 7,211 | 7,962 | 1,478 | 5,952 |
| Repair and maintenance | 13,220 | 2,553 | 3,818 | 12,037 | 2,362 | 3,782 |
| Utilities, materials and supplies | 53,242 | 8,164 | 14,615 | 38,720 | 8,974 | 15,426 |
| Acquisition of land, buildings and works | 13,174 | 3,265 | 3,305 | 21,935 | 8,365 | 9,951 |
| Acquisition of machinery and equipment | 39,721 | 7,427 | 11,304 | 37,391 | 4,759 | 8,517 |
| Transfer payments | 2,671,177 | 306,883 | 362,082 | 2,691,404 | 524,839 | 584,189 |
| Other subsidies and payments | 9,290 | 1,487 | 3,345 | 8,826 | 5,395 | 6,135 |
| Total gross budgetary expenditures | 3,548,502 | 507,725 | 736,607 | 3,512,627 | 720,757 | 955,578 |
| Less Revenues netted against expenditures: | ||||||
| Vote-netted revenues | 59,918 | 9,908 | 13,870 | 60,090 | 18,681 | 27,477 |
| Total net budgetary expenditures | 3,488,584 | 497,817 | 722,737 | 3,452,537 | 702,076 | 928,101 |
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Note: Totals may not add due to rounding. |
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Annex A
| Fiscal year 2023-24 | Fiscal year 2022-23 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2024 | Expended during the quarter ended September 30, 2023 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2023 | Expended during the quarter ended September 30, 2022 | Year to date used at quarter-end | |
| Contributions to employee benefit plans | 82,485 | 14,701 | 29,403 | 69,319 | 17,220 | 34,441 |
| Minister of Agriculture and Agri-Food — Salary and motor car allowance | 95 | 32 | 47 | 93 | 23 | 46 |
| Contribution payments for the AgriStability program | 339,658 | (3,350) | (14,366) | 434,939 | (4,928) | (14,227) |
| Contribution payments for the AgriInsurance program | 1,033,783 | 97,692 | 102,334 | 623,000 | 321,846 | 345,010 |
| Grant payments for the AgriInvest program | 124,463 | 62,460 | 93,219 | 122,910 | 50,156 | 82,441 |
| Payments in connection with the Agricultural Marketing Programs Act | 113,300 | 28,982 | 31,436 | 109,000 | 4,668 | 3,240 |
| Grant payments for the AgriStability program | 52,063 | - | - | 48,221 | (521) | - |
| Contribution payments for the AgriInvest program | 16,711 | - | - | 16,550 | - | - |
| Loan guarantees under the Canadian Agricultural Loans Act | 13,111 | - | 279 | 13,111 | - | (714) |
| Contributions in support of the Assistance to the Pork Industry Initiative | - | - | (4,034) | - | (85) | (6,863) |
| Grants to agencies established under the Farm Products Agencies Act | 100 | - | - | 100 | - | - |
| Contribution payments for the Agricultural Disaster Relief Program (ADRP)/AgriRecovery | 118,513 | (94) | (94) | 226,513 | 24,430 | 24,433 |
| Contribution payments for the Livestock Price Insurance program (Farm Income Protection Act) | 4,000 | - | - | - | - | - |
| Canadian Pari-Mutuel Agency Revolving Fund | 2,018 | 535 | 333 | 1,209 | 25 | (528) |
| Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets | 13,146 | 2,121 | 3,202 | 8,318 | 1,444 | 3,103 |
| Grant payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative | - | (1) | (4) | - | (3) | (4) |
| Contribution payments for the Canadian Agricultural Income Stabilization program Inventory Transition | - | - | (1) | - | (2) | (2) |
| Grant Payments Related to the Dairy Direct Payment Program | - | - | - | 468,000 | - | - |
| Budgetary statutory authorities | 1,913,447 | 203,076 | 241,752 | 2,141,284 | 414,274 | 470,369 |
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Note: Totals may not add due to rounding. |
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