Statement outlining results, risks and significant changes in operations, personnel and programs
Introduction
Agriculture and Agri-Food Canada's Quarterly Financial Report should be read in conjunction with the Main Estimates. This report has been prepared as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. As such, it has not been subject to an external audit or review.
Detailed information on Agriculture and Agri-Food Canada's program activities can be found in the Departmental Plan.
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 Main Estimates for the 2019-2020 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 monies 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.
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 (YTD) results
Authorities
Agriculture and Agri-Food Canada's Quarterly Financial Report reflects the results of the 2019-2020 fiscal period ending June 30, 2019, for which full supply of Main Estimates was released on June 25, 2019.
At the end of the first quarter of 2019-2020, Agriculture and Agri-Food Canada had total funding available for use of $2,511.8 million as detailed in Table 1. This amount includes the 2019-2020 Main Estimates of $2,500.0 million, $9.6 million related to proceeds collected from the sale of Crown assets, and $2.3 million for Enhancing Trading Services for Agricultural Exporters. The net decrease of $13.5 million compared to total authorities at the same time in fiscal year 2018-2019 is due to decreases in Budgetary Statutory authorities, Vote 5 Capital authorities, and Vote 10 Grants and Contributions; partially offset by new authority of Vote 15 - A Food Policy for Canada, as well as an increase in Vote 1 Net Operating authorities.
Vote 1 Net Operating authorities as of June 30, 2019 totalled $574.7 million, an increase of $6.2 million from the June 30, 2018 amount of $568.5 million. This increase is mainly due to funding of $11.3 million related to Advancing Agricultural Discovery Science and Innovation Initiative, $4.0 million related to the fact that 2018-2019 included transfers from Vote 1 Operating to Vote 5 Capital, which is not applied in 2019-2020, a $1.6 million in support of Agricultural exporters and standard-setting bodies, and a $1.5 million for A Food Policy for Canada. These increases are partially offset by a reduction of $12.0 million funding that was included in the 2018-2019 Main Estimates to address retroactive bargaining obligations.
Vote 5 Capital authorities at the end of the first quarter of 2019-2020 totalled $40.5 million, a decrease of $14.4 million from the June 30, 2018 amount of $54.9 million. This decrease is primarily due to a reduction of $11.0 million with the sunsetting of the Federal Infrastructure Initiatives, $4.0 million related to the fact that 2018-2019 included transfers from Vote 1 Operating to Vote 5 Capital, which is not applied in 2019-2020; partially offset by an increase of $1.5 million funding in Advancing Agricultural Discovery Science and Innovation Initiative.
Vote 10 Grants and Contributions authority of $419.7 million as of June 30, 2019 reflects a decrease of $5.8 million from $425.5 million at the same time in 2018-2019. This is primarily attributed to a decrease of $11.0 million related to investments in the Dairy sector, and partially offset by a $3.0 million increase in the Agricultural Clean Technology Program and a $2.5 million increase in Living Laboratories Initiatives.
Vote 15 - A Food Policy for Canada is a Budget Implementation Vote in support of a healthier and more sustainable food system for Canada. Total authority for A Food Policy for Canada in 2019-2020 Main Estimates is $19.0 million, $17.1 million has been reprofiled to future years, leaving a balance of $1.9 million in 2019-2020.
Budgetary Statutory authorities available as of June 30, 2019 were $1,459.4 million, a decrease of $17.0 million from the June 30, 2018 amount of $1,476.4 million. This is mainly due to a $17.3 million decrease in the AgriInvest program resulting from program changes.
| Authorities | 2019-2020 | 2018-2019 | Variances | Percent |
|---|---|---|---|---|
| Vote 1 - Net Operating expenditures | 574,688 | 568,454 | 6,234 | 1% |
| Vote 5 - Capital expenditures | 40,505 | 54,888 | (14,383) | (26%) |
| Vote 10 - Grants and Contributions | 419,735 | 425,525 | (5,790) | (1%) |
| Vote 15 - A Food Policy for Canada | 17,486 | - | 17,486 | 100% |
| Budgetary statutory authorities | 1,459,369 | 1,476,391 | (17,022) | (1%) |
| Total Authorities | 2,511,783 | 2,525,258 | (13,475) | (1%) |
| Note: [1] Totals may not add due to rounding. |
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Expenditures
As detailed in Table 2, at the end of the first quarter of 2019-2020, the Department had spent $244.0 million, compared to $179.0 million in the same period in fiscal year 2018-2019, an increase of $65.0 million.
Vote 1 Net Operating expenditures at the end of the first quarter were $153.0 million, 27% of the total available for use of $574.7 million, which is $30.0 million more than expenditures of $123.0 million or 22% of the total available for the same period last fiscal year. The increase of $30.0 million was primarily attributed to a $28.3 million increase due to an accounting entry related to an Other Government Department (OGD) loan that was subsequently reversed.
Vote 5 Capital expenditures at the end of the first quarter were $1.4 million or 4% of the total available for use of $40.5 million, a slight decrease of $0.4 million compared to $1.9 million in 2018-19.
Vote 10 Grants and Contributions expenditures at the end of the first quarter of 2019-2020 were $38.5 million or 9% of the total available for use of $419.7 million, compared to $8.2 million, or 2% of the total available for use for the same period last fiscal year. The increase of $30.3 million is mainly attributed to two factors: a $20.0 million increase in the AgriScience program, the Canadian Agricultural Partnership cost shared program, and the AgriInnovate program, mainly due to 2019-2020 being the second year of implementation of the Canadian Agricultural Partnership, as well as a $9.0 million increase in the Dairy Farm Investment Program due to increased spending in support of the Dairy sector.
Budgetary Statutory Authorities expenditures at the end of the first quarter of 2019-2020 were $51.1 million compared to $46.0 million for the same period of the previous year. The $5.1 million increase is mainly attributed to a $12.7 million decrease in recoveries under the Assistance to the Pork Industry Initiative. This was partially offset by a $5.8 million decrease in the AgriInsurance Program and a $2.2 million decrease in the AgriInvest program due to industry conditions.
| Expenditures | 2019-2020 | 2018-2019 | Variance | Percent |
|---|---|---|---|---|
| Vote 1 - Net Operating expenditures | 152,972 | 122,958 | 30,014 | 24% |
| Vote 5 - Capital expenditures | 1,440 | 1,874 | (434) | (23%) |
| Vote 10 - Grants and Contributions expenditures | 38,537 | 8,191 | 30,346 | 370% |
| Vote 15 - A Food Policy for Canada | - | - | - | 0% |
| Budgetary statutory expenditures | 51,059 | 46,006 | 5,053 | 11% |
| Total Net Budgetary Expenditures | 244,008 | 179,029 | 64,979 | 36% |
| Note: [1] Totals may not add due to rounding. |
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Expenditures in Comparison to Authorities
At the end of the first quarter of 2019-2020, the Department had spent $244.0 million (10% of the total funding available for use), compared to $179.0 million for the same period in fiscal year 2018-2019 (7% of the total funding available for use).
Table 3 presents budgetary expenditures by standard object. Total net budgetary expenditures by standard object have increased by $65.0 million in the first quarter of 2019-2020 compared to the same period last year. The increase of $35.3 million or 95% in Transfer payments is mainly attributed to several offsetting factors: a $20.0 million increase in the AgriScience program, the Canadian Agricultural Partnership cost shared program, and the AgriInnovate program, mainly due to 2019-2020 being the second year implementation of the Canadian Agricultural Partnership, a $12.7 million decrease in recoveries under the Assistance to the Pork Industry Initiative, as well as a $9.0 million increase in Dairy Farm Investment Program due to increased spending in support of the Dairy sector. These increases were partially offset by a $5.8 million decrease in the AgriInsurance Program and a $2.2 million decrease in the AgriInvest program due to industry conditions.
The increase of $27.3 million or 649% in Other Subsidies and Payment is primarily attributed to a $28.3 million increase due to an accounting entry related to an Other Government Department (OGD) loan that was subsequently reversed.
Agriculture and Agri-Food Canada has total Revenue Spending authority of up to $52.5 million for 2019-2020. The revenue is generated from collaborative research agreements between Agriculture and Agri-Food Canada and third parties, the administration of the AgriStability Program, as well as recoveries for costs related to Internal Support Services provided to other departments. The Department has generated $11.2 million in revenues in the first quarter of 2019-2020 compared to $13.4 million for the same period last year. The $2.2 million revenue decrease was primarily attributed to a $2.3 million decrease due to the timing of collections from other government departments for Information Technology services.
| Expenditures | 2019-2020 | 2018-2019 | Variances | Percent |
|---|---|---|---|---|
| Personnel | 122,796 | 122,404 | 392 | 0% |
| Transportation and communications | 2,505 | 2,567 | (62) | (2%) |
| Information | 1,384 | 1,442 | (58) | (4%) |
| Professional and special services | 12,554 | 12,321 | 233 | 2% |
| Rentals | 2,589 | 2,802 | (213) | (8%) |
| Repairs and maintenance | 1,390 | 1,509 | (119) | (8%) |
| Utilities, materials and supplies | 5,178 | 5,296 | (118) | (2%) |
| Acquisition of land, buildings and works | 96 | 431 | (335) | (78%) |
| Acquisition of machinery and equipment | 2,579 | 2,190 | 389 | 18% |
| Transfer payments | 72,626 | 37,283 | 35,343 | 95% |
| Other subsidies and payments | 31,510 | 4,208 | 27,302 | 649% |
| Total Gross Budgetary Expenditures | 255,207 | 192,453 | 62,754 | 33% |
| Less: Revenues netted against expenditures | 11,199 | 13,424 | (2,225) | (17%) |
| Total Net Budgetary Expenditures | 244,008 | 179,029 | 64,979 | 36% |
| Note: [1] Totals may not add due to rounding. | ||||
Risks and Uncertainties
Agriculture and Agri-Food Canada continues to exercise prudent management in delivering its policies and programs. The Department has established processes to identify, assess, monitor, and respond to a variety of risks to facilitate decision making and priority setting, and contribute to more effective delivery and efficient use of resources.
In the current environment, supporting employees and managers dealing with pay issues is a top priority for Agriculture and Agri-Food Canada. The department created a Pay Transformation team to proactively mitigate risks and respond to pay issues through: escalation and pay advisory services; outreach and awareness training; communication support and the provision of emergency salary advances and priority payments in response to financial hardship situations. The department actively monitors the pay impacts and corresponding salary payment adjustments resulting from these issue resolution activities.
Significant changes in relation to operations, personnel and programs
Programs
Budget 2019 announced A Food Policy for Canada, introducing $134.4 million of new investments over the next five years between Agriculture and Agri-Food Canada, Canadian Food Inspection Agency and Canadian Northern Economic Development Agency. Agriculture and Agri-Food Canada was allocated $95 million of this funding to improve food security and access to safe, healthy, and culturally diverse food; to better connect Canadians with and instill pride in Canada's food system and its food, seafood and agriculture products; and to identify innovative ways of reducing food waste in the food processing, grocery retail, and food service sectors.
The 2018 Fall Economic Statement announced Canada's Export Diversification Strategy and earmarked new funding ($25 million over five years and $5 million ongoing, beginning in 2024-2025) between Agriculture and Agri-Food Canada, Canadian Food Inspection Agency and Health Canada to enhance federal capacity to address situations where agricultural producers may be prevented from selling goods in international markets. Agriculture and Agri-Food Canada was allocated $11.6 million over five years ($2.3 million ongoing, beginning in 2024-2025) of this funding to enhance the Agriculture and Food Trade Commissioner Services and to contribute to the work of the International Standard-Setting Bodies.
Approval by Senior Officials
Approved by:
Original signed by
Chris Forbes, Deputy Head
Ottawa, Canada
Original signed by
Christine Walker, Chief Financial Officer
Ottawa, Canada
| Fiscal year 2019-2020 [1] | Fiscal year 2018-2019 [1] | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2020 [2] | Used during the quarter ended June 30, 2019 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2019 [2] | Used during the quarter ended June 30, 2018 | Year to date used at quarter-end | |
| Vote 1 - Net Operating expenditures | $574,688 | $152,972 | $152,972 | $568,454 | $122,958 | $122,958 |
| Vote 5 - Capital expenditures | 40,505 | 1,440 | 1,440 | 54,888 | 1,874 | 1,874 |
| Vote 10 - Grants and contributions | 419,735 | 38,537 | 38,537 | 425,525 | 8,191 | 8,191 |
| Vote 15 - A Food Policy for Canada | 17,486 | - | - | - | - | - |
| Budgetary statutory authorities (3) | 1,459,369 | 51,059 | 51,059 | 1,476,391 | 46,006 | 46,006 |
| Total Budgetary authorities | 2,511,784 | 244,008 | 244,008 | 2,525,259 | 179,029 | 179,029 |
| Total authorities | $2,511,784 | $244,008 | $244,008 | $2,525,259 | $179,029 | $179,029 |
Notes: |
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| Fiscal year 2019-2020 [1] | Fiscal year 2018-2019 [1] | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2020 | Expended during the quarter ended June 30, 2019 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2019 | Expended during the quarter ended June 30, 2018 | Year to date used at quarter-end | |
| Expenditures: | ||||||
| Personnel | $496,580 | $122,796 | $122,796 | $500,315 | $122,404 | $122,404 |
| Transportation and communications | 14,865 | 2,505 | 2,505 | 11,304 | 2,567 | 2,567 |
| Information | 6,720 | 1,384 | 1,384 | 5,956 | 1,442 | 1,442 |
| Professional and special services | 92,269 | 12,554 | 12,554 | 90,784 | 12,321 | 12,321 |
| Rentals | 6,642 | 2,589 | 2,589 | 5,664 | 2,802 | 2,802 |
| Repair and maintenance | 11,058 | 1,390 | 1,390 | 11,369 | 1,509 | 1,509 |
| Utilities, materials and supplies | 39,576 | 5,178 | 5,178 | 38,616 | 5,296 | 5,296 |
| Acquisition of land, buildings and works | 27,379 | 96 | 96 | 51,820 | 431 | 431 |
| Acquisition of machinery and equipment | 38,553 | 2,579 | 2,579 | 31,053 | 2,190 | 2,190 |
| Transfer payments | 1,803,969 | 72,626 | 72,626 | 1,827,049 | 37,283 | 37,283 |
| Other subsidies and payments | 26,680 | 31,510 | 31,510 | 8,399 | 4,208 | 4,208 |
| Total gross budgetary expenditures | 2,564,291 | 255,207 | 255,207 | 2,582,328 | 192,453 | 192,453 |
| Less Revenues netted against expenditures: | ||||||
| Vote-netted revenues | 52,507 | 11,199 | 11,199 | 57,069 | 13,424 | 13,424 |
| Total Revenues netted against expenditures | 52,507 | 11,199 | 11,199 | 57,069 | 13,424 | 13,424 |
| Total net budgetary expenditures | $2,511,784 | $244,008 | $244,008 | $2,525,259 | $179,029 | $179,029 |
| Note: [1] Totals may not add due to rounding. |
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Appendix A
| Fiscal year 2019-2020 [1] | Fiscal year 2018-2019 [1] | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2020 | Expended during the quarter ended June 30, 2019 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2019 | Expended during the quarter ended June 30, 2018 | Year to date used at quarter-end | ||||||||
| Contributions to employee benefit plans | $65,441 | $16,360 | $16,360 | $65,526 | $16,381 | $16,381 | |||||||
| Contributions to employee benefit plans (Administrative Tribunals Support Service of Canada) | - | - | - | - | - | - | |||||||
| Minister of Agriculture and Agri-Food - Salary and motor car allowance | 88 | 22 | 22 | 86 | 22 | 22 | |||||||
| Contribution payments for the AgriStability program | 384,830 | (5,132) | (5,132) | 384,830 | (5,857) | (5,857) | |||||||
| Contribution payments for the AgriInsurance program | 623,000 | 14,817 | 14,817 | 623,000 | 20,658 | 20,658 | |||||||
| Grant payments for the AgriInvest program | 122,910 | 32,221 | 32,221 | 138,148 | 34,461 | 34,461 | |||||||
| Payments in connection with the Agricultural Marketing Programs Act | 65,900 | 4,575 | 4,575 | 65,900 | 5,389 | 5,389 | |||||||
| Grant payments for the AgriStability program | 39,320 | 15 | 15 | 39,320 | (97) | (97) | |||||||
| Contribution payments for the AgriInvest program | 16,550 | 148 | 148 | 18,602 | - | - | |||||||
| Loan guarantees under the Canadian Agricultural Loans Act | 13,111 | 9 | 9 | 13,111 | 9 | 9 | |||||||
| Canadian Cattlemen's Association Legacy Fund | - | - | - | - | - | - | |||||||
| Contributions in support of the Assistance to the Pork Industry Initiative | - | (12,550) | (12,550) | - | (25,210) | (25,210) | |||||||
| Grants to agencies established under the Farm Products Agencies Act | 100 | - | - | 100 | - | - | |||||||
| Contribution payments for the Agricultural Disaster Relief Program (ADRP)/AgriRecovery | 118,513 | - | - | 118,513 | - | - | |||||||
| Canadian Pari-Mutuel Agency Revolving Fund | - | (544) | (544) | - | (781) | (781) | |||||||
| Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets | 9,606 | 1,132 | 1,132 | 9,255 | 1,291 | 1,291 | |||||||
| Refunds of amounts credited to revenues in previous years | - | - | - | - | - | - | |||||||
| Contributions for agricultural risk management - Enhanced Spring Credit Advance program Business Risk Management | - | - | - | - | (89) | (89) | |||||||
| Class grant payments for the Transitional Industry Support program | - | - | - | - | (2) | (2) | |||||||
| Class grant payments for the Farm Income program | - | - | - | - | 2 | 2 | |||||||
| Grant payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative | - | (5) | (5) | - | (9) | (9) | |||||||
| Contribution payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative | - | (9) | (9) | - | (163) | (163) | |||||||
| Grants in support of the Grain and Oilseed Payment program | - | - | - | - | - | - | |||||||
| Grants in support of the Cost of Production Benefit | - | - | - | - | - | - | |||||||
| Contribution for the Transitional Industry Support Program | - | - | - | - | - | ||||||||
| Budgetary statutory authorities | $1,459,369 | $51,059 | $51,059 | $1,476,391 | $46,006 | $46,006 | |||||||
| Note: [1] Totals may not add due to rounding. |
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