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 Treasury Board, and should be read in conjunction with AAFC's 2020-21 Main Estimates.
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 2020-21 Main Estimates (approved up to June 30, 2020) as well as the Supplementary Estimates A for the 2020-2021 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.
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 June 30, 2020.
The following table provides a comparison of total authorities available for use and year-to-date expenditures for the first quarter of the current and previous fiscal years.
| All votes and statutory authorities (in millions of dollars) |
2020-2021 | 2019-2020 |
|---|---|---|
| Total authorities available for use | 2,605 | 2,512 |
| Total year-to-date expenditures | 284 | 244 |
| Utilization | 11% | 10% |
A. Significant changes to authorities
The following table provides a comparison of authorities by Vote for the first quarter of the current and previous fiscal years.
| Total authorities available for use (in millions of dollars) |
2020-2021 | 2019-2020 | Variance |
|---|---|---|---|
| Vote 1 – Net operating authorities | 425 | 575 | (149) |
| Vote 5 – Capital authorities | 30 | 41 | (11) |
| Vote 10 – Grants and contributions | 431 | 420 | 11 |
| Vote 15 – A Food Policy for Canada | - | 17 | (17) |
| Statutory authorities | 1,719 | 1,459 | 260 |
| Total authorities | 2,605 | 2,512 | 93 |
Note: Totals may not add up due to rounding. |
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Total authorities in fiscal year 2020-2021 were $2,605 million at the end of the first quarter, as compared to $2,512 million at the end of the first quarter of 2019-2020, which represents an increase of $93 million or 4%. This increase is primarily attributable to the following:
- a $260-million increase in statutory authorities, mainly due to the funding of programs related to the COVID-19 pandemic under the Public Health Events of National Concern Payments Act, including the Local Food Infrastructure Fund, the Mandatory Isolation Support for Temporary Foreign Workers Program, the Emergency Processing Fund, and the Surplus Food Rescue Program; and
- a $47-million increase in Vote 10 – Grants and contributions, mainly due to a $20 million transfer from Vote 1 to Vote 10, an authority increase for the Canadian Agricultural Strategic Priorities Program included in Supplementary Estimates A, and the allocation of funding from Vote 15 – A Food Policy for Canada to Vote 10 – Grants and contributions.
This increase is partially offset by the following decreases:
- There was a decrease of $195 million in authorities available for use, caused by the reduced supply (9/12ths for Vote 1 operating and Vote 5 capital authorities, and 11/12ths for Vote 10 grants and contributions) for the Main Estimates. This reduction was due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply; the standing orders of the House of Commons were amended to extend the study period into the Fall. Agriculture and Agri-Food Canada is expected to receive full supply for the 2020-2021 Main Estimates in December 2020. The $195 million decreased supply includes the following components:
- a $149-million decrease in Vote 1 – Net operating authorities;
- a $10-million decrease in Vote 5 – Capital authorities; and
- a $36-million decrease in Vote 10 – Grants and contributions.
- There was a decrease of $17 million in authorities under Vote 15 – A Food Policy for Canada, which was allocated to various other Votes this fiscal year.
B. Significant changes in year-to-date expenditures
The following table provides a comparison of spending by Vote for the first quarter of the current and previous fiscal years.
| Year-to-date expenditures (in millions of dollars) | 2020-2021 | 2019-2020 | Variance |
|---|---|---|---|
| Vote 1 – Net operating expenditures | 132 | 153 | (21) |
| Vote 5 – Capital expenditures | 2 | 1 | 1 |
| Vote 10 – Grants and contributions | 22 | 39 | (17) |
| Vote 15 – A Food Policy for Canada | - | - | - |
| Statutory expenditures | 128 | 51 | 77 |
| Total year-to-date expenditures | 284 | 244 | 40 |
| Note: Totals may not add up due to rounding. |
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At the end of the first quarter of 2020-2021, total expenditures were $284 million, compared to $244 million reported for the same period in 2019-2020, representing an increase of $40 million or 16%. This increase is primarily attributable to the following increases:
- There was a $77-million increase in statutory expenditures, mainly due to increased spending in improving access to food for Canadians, as well as helping companies implement changes to safeguard the health and safety of workers and their families, due to the impacts of the COVID-19 pandemic.
This increase is partially offset by the following decreases:
- There was a $21-million decrease in Vote 1 – Net operating expenditures, mainly due to timing: a revolving loan issued to the Canadian Dairy Commission, which is usually settled before the end of the month, was delayed in June of 2019 (but cleared in July 2019), overstating the operating expenditures for Quarter 1 of 2019-20, compared to the current fiscal year.
- There was a $17-million decrease in Vote 10 – Grants and contributions, mainly related to the Dairy Farm Investment Program primarily due to timing and the Agri-Science Program mainly due to the COVID-19 pandemic (for example recipients having difficulty obtaining capital purchases because of the pandemic).
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 to contribute to more effective delivery and efficient use of resources. In today's environment, uncertainties brought on by the COVID-19 pandemic have required unprecedented measures, programs, and some reprioritization of activities to mitigate related impacts on the sector and the Department.
In addition, providing support to employees and managers who are dealing with pay issues continues to be a priority for Agriculture and Agri-Food Canada.
The Department actively monitors the pay impacts and corresponding salary payment adjustments that result from activities undertaken to resolve these issues.
Significant changes in relation to operations, personnel, and programs
Programs
The following announcements of new or changes to existing programs totalling $412 million were in response to the effects of the COVID-19 pandemic on the Canadian agriculture sector:
- Emergency Processing Fund: $77.5 million in funding was announced to create an Emergency Food Processing Fund to help producers and processors implement any changes required because of the COVID-19 pandemic to ensure the health and safety of workers.
- Support for food banks and local food organizations (under the Local Food Infrastructure Fund): This $100-million emergency fund provides funding to national, regional, and local organizations across Canada serving people and communities that are experiencing food insecurity and have been impacted by the COVID-19 pandemic. Out of this $100-million, $25 million was expended in 2019-20, with the balance of $75 million in funding in 2020-21.
- Surplus Food Rescue Program: $50 million in funding was provided to help organizations serving vulnerable populations acquire and process surplus commodities and food that would otherwise be lost or destroyed, and to help these organizations distribute the surplus commodities and food to populations in need.
- Mandatory Isolation Support for Temporary Foreign Workers Program: $50 million in funding was provided to help farmers, fish harvesters, and all food production and processing employers to offset some of the additional costs of adhering to the mandatory 14-day isolation period required of all workers arriving from abroad.
- Stay of Default – Advance Payments Program: The Prime Minister announced in March 2020 that all eligible farmers with outstanding Advance Payments Program (APP) loans due on or before April 30, 2020, would receive a stay of default, which would provide them with an additional six months to repay the loans.
- AgriRecovery Initiatives: Up to $125 million in funding was provided by the national AgriRecovery initiatives to help producers with the extraordinary additional costs resulting from market disruptions caused by the COVID-19 pandemic. Out of this $125 million, $50 million has been allocated to the Cattle Set Aside Initiative, and $50 million has been allocated to the Hog Recovery Initiative up to date.
- Youth Employment Skills Strategy: $9.2 million was allocated to Agriculture and Agri-Food Canada to fund up to 700 new positions for youth in the agriculture industry. This funding will help the agriculture industry attract young Canadians (aged 15 to 30) to their organizations to help address pandemic-related labour shortages.
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 2020-2021 [1] | Fiscal year 2019-2020 [1] | |||||
|---|---|---|---|---|---|---|
| Total authorities for the year ending March 31, 2021 (2) | Used during the quarter ended June 30, 2020 | Year to date used at quarter-end | Total authorities for the year ending March 31, 2020 | Used during the quarter ended June 30, 2019 | Year to date used at quarter-end | |
| Vote 1 - Net Operating expenditures | $425,372 | $132,236 | $132,236 | $574,688 | $152,972 | $152,972 |
| Vote 5 - Capital expenditures | 29,948 | 1,983 | 1,983 | 40,505 | 1,440 | 1,440 |
| Vote 10 - Grants and contributions | 430,737 | 21,503 | 21,503 | 419,735 | 38,537 | 38,537 |
| Vote 15 - A Food Policy for Canada | - | - | - | 17,486 | - | - |
| Budgetary statutory authorities (3) | 1,719,152 | 127,972 | 127,972 | 1,459,369 | 51,059 | 51,059 |
| Total Budgetary authorities | 2,605,208 | 283,694 | 283,694 | 2,511,784 | 244,008 | 244,008 |
| Total authorities | $2,605,208 | $283,694 | $283,694 | $2,511,784 | $244,008 | $244,008 |
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Notes: (1) Totals may not add up due to rounding. (2) Includes only authorities granted by Parliament at quarter-end. Agriculture and Agri-Food Canada has received a reduced supply as of 2020-2021 Quarter 1. (3) Details on budgetary statutory authorities are included in Appendix A. |
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| Fiscal year 2020-2021 [1] | Fiscal year 2019-2020 [1] | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2021 (2) | Expended during the quarter ended June 30, 2020 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2020 | Expended during the quarter ended June 30, 2019 | Year to date used at quarter-end | |
| Expenditures: | ||||||
| Personnel | $399,439 | $128,343 | $128,343 | $496,580 | $122,796 | $122,796 |
| Transportation and communications | 8,664 | 285 | 285 | 14,865 | 2,505 | 2,505 |
| Information | 5,671 | 587 | 587 | 6,720 | 1,384 | 1,384 |
| Professional and special services | 62,233 | 11,905 | 11,905 | 92,269 | 12,554 | 12,554 |
| Rentals | 4,353 | 2,532 | 2,532 | 6,642 | 2,589 | 2,589 |
| Repair and maintenance | 8,203 | 813 | 813 | 11,058 | 1,390 | 1,390 |
| Utilities, materials and supplies | 27,682 | 3,656 | 3,656 | 39,576 | 5,178 | 5,178 |
| Acquisition of land, buildings and works | 17,881 | 221 | 221 | 27,379 | 96 | 96 |
| Acquisition of machinery and equipment | 34,940 | 1,086 | 1,086 | 38,553 | 2,579 | 2,579 |
| Transfer payments | 2,076,871 | 132,749 | 132,749 | 1,803,969 | 72,626 | 72,626 |
| Other subsidies and payments | 4,881 | 4,610 | 4,610 | 26,680 | 31,510 | 31,510 |
| Total gross budgetary expenditures | 2,650,821 | 286,787 | 286,787 | 2,564,291 | 255,207 | 255,207 |
| Less Revenues netted against expenditures: | ||||||
| Vote-netted revenues | 45,612 | 3,093 | 3,093 | 52,507 | 11,199 | 11,199 |
| Total Revenues netted against expenditures | 45,612 | 3,093 | 3,093 | 52,507 | 11,199 | 11,199 |
| Total net budgetary expenditures | $2,605,208 | $283,694 | $283,694 | $2,511,784 | $244,008 | $244,008 |
Note: |
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Appendix A
| Fiscal year 2020-2021 [1] | Fiscal year 2019-2020 [1] | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2021 | Expended during the quarter ended June 30, 2020 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2020 | Expended during the quarter ended June 30, 2019 | Year to date used at quarter-end | |
| Contributions to employee benefit plans | $65,215 | $16,304 | $16,304 | $65,441 | $16,360 | $16,360 |
| Minister of Agriculture and Agri-Food - Salary and motor car allowance | 89 | 22 | 22 | 88 | 22 | 22 |
| Contribution payments for the AgriStability program | 384,830 | (5,991) | (5,991) | 384,830 | (5,132) | (5,132) |
| Contribution payments for the AgriInsurance program | 623,000 | 7,333 | 7,333 | 623,000 | 14,817 | 14,817 |
| Grant payments for the AgriInvest program | 122,910 | 20,334 | 20,334 | 122,910 | 32,221 | 32,221 |
| Payments in connection with the Agricultural Marketing Programs Act | 90,300 | 1,453 | 1,453 | 65,900 | 4,575 | 4,575 |
| Grant payments for the AgriStability program | 39,320 | 292 | 292 | 39,320 | 15 | 15 |
| Contribution payments for the AgriInvest program | 16,550 | 3,333 | 3,333 | 16,550 | 148 | 148 |
| Loan guarantees under the Canadian Agricultural Loans Act | 13,111 | (76) | (76) | 13,111 | 9 | 9 |
| Contributions in support of the Assistance to the Pork Industry Initiative | - | (5,033) | (5,033) | - | (12,550) | (12,550) |
| 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 | - | (56) | (56) | - | (544) | (544) |
| Refunds of amounts credited to revenues in previous years | - | 1 | 1 | - | - | - |
| Spending of amounts equivalent to proceeds from disposal of surplus moveable Crown assets | 7,713 | 455 | 455 | 9,606 | 1,132 | 1,132 |
| Grant payments for the Canadian Agricultural Income Stabilization Program Inventory Transition Initiative | - | (2) | (2) | - | (5) | (5) |
| Contribution payments for the Canadian Agricultural Income Stabilization Program Inventory Transition Initiative | - | (6) | (6) | - | (9) | (9) |
| Contribution payments for the Local Food Infrastructure Program | 75,000 | 70,400 | 70,400 | - | - | - |
| Contribution payments for the Mandatory Isolation Support for Temporary Foreign Workers Program | 50,000 | 208 | 208 | - | - | - |
| Contribution payments for the Emergency Processing Fund Program | 62,500 | 19,000 | 19,000 | - | - | - |
| Contribution payments related to the Surplus Food Purchase Program | 50,000 | - | - | - | - | - |
| Budgetary statutory authorities | $1,719,152 | $127,972 | $127,972 | $1,459,369 | $51,059 | $51,059 |
Note: |
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