Quarterly Financial Report for the quarter ended June 30, 2022

Agriculture and Agri-Food Canada Quarterly Financial Report for the quarter ended June 30, 2022 (PDF 859 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 Treasury Board, and should be read in conjunction with AAFC’s 2022-23 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 2022-23 Main Estimates, as well as the Supplementary Estimates (A) available for use during the 2022-23 fiscal years. 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 years-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, 2022.

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.

Comparison of total authorities available for use and total year-to-date expenditures for the quarter ended June 30 of fiscal years 2022-23 and 2021-22
All votes and statutory authorities
(in millions of dollars)
2022-23 2021-22
Total authorities available for use 3,419 3,307
Total year-to-date expenditures 226 211
Utilization 7% 6%

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.

Comparison of total authorities as of June 30 of Fiscal year 2022-23 and 2021-22
Authorities
(in millions of dollars)
2022-23 2021-22 Variances
Vote 1 - Net Operating Authorities 611 621 (10)
Vote 5 - Capital Authorities 39 50 (12)
Vote 10 - Grants and Contributions 629 667 (38)
Budgetary statutory authorities 2,140 1,969 171
Total Authorities 3,419 3,307 112

Note: Totals may not add up due to rounding.

Total authorities in fiscal years 2022-23 were $3,419 million at the end of the first quarter, as compared to $3,307 million at the end of the first quarter of 2021-22, which represents an increase of $112 million or 3%. This increase is attributable to the following:

  • $171 million increase in statutory authorities is primarily due to a $108 million Order in Council for the Agricultural Disaster Relief Program to assist farmers in British Columbia with recovering from the adverse effects of excess rainfall and flooding in 2021. There was also a $57 million statutory forecast increase for the AgriStability program as a result of the amendment that removed the reference margin limit starting in the 2020 program year and ongoing.
  • $38 million decrease in Vote 10 – Grants and contributions is mainly attributable to the winding down of $194 million of COVID-19 pandemic initiatives, the sunsetting of the $54 million Dairy Processing Investment Fund and Dairy Farm Investment Program, as well as a $17 million net decrease in funding for the Youth Employment Skills Strategy program. These decreases were partially offset by a funding increase of $105 million for climate programs, a $78 million funding increase for poultry and egg supply-managed producers and $46 million of new funding in support for the Canadian wine industry.
  • $12 million decrease in Vote 5 Capital authorities is mostly attributable to the $10 million capital funding received from the sale of AAFC’s Regina Research Farm in 2021-22, with the remaining funding decrease associated with various sunsetting programs in 2022-23.
  • $10 million decrease in Vote 1 Net Operating authorities is mostly made up of a $17 million funding decrease associated with the sunsetting of various programs and a $5 million operating budget reduction for travel and information technology services, which was partially offset by $10 million of new funding for climate related initiatives and dairy, poultry and egg supply-managed producers.

B. Significant changes in year-to-date expenditures

The following table provides spending comparisons by Vote for the first quarter of the current and previous fiscal years.

Comparison of year-to-date expenditures for the quarter ended June 30 of Fiscal year 2022-23 and 2021-22
Expenditures
(in millions of dollars)
2022-23 2021-22 Variance
Vote 1 - Net Operating expenditures 143 139 4
Vote 5 - Capital expenditures 5 5 0
Vote 10 - Grants and Contributions expenditures 22 15 7
Budgetary statutory expenditures 56 52 4
Total Net Budgetary Expenditures 226 211 15

Note: Totals may not add up due to rounding.

At the end of the first quarter of 2022-23, total expenditures were $226 million, compared to $211 million reported for the same period in 2021-22, representing an increase of $15 million or 7%. The increase is attributable to the following:

  • $4 million increase in Vote 1- Net Operating expenditures is primarily caused by higher information technology costs related to Microsoft 365 licenses, increased utility expenditures as well as timing difference for various licensing fee payments.
  • $7 million increase in Vote 10 – Grants and Contributions is mainly caused by timing differences for the Poultry and Egg On-Farm Investment Program as funding was received later in the 2021-22 fiscal years.
  • $4 million increase in statutory expenditures mainly due to increased spending in the AgriInsurance program as a result of timing, frequency and materiality of claims received and released, as well as decreased recoveries from the Hog Industry Loan Loss Reserve Program as the program is winding down (to be fully sunset by 2025). These increases are partially offset by a decrease in payments connected to the Agricultural Marketing Programs Act because of the completion of the prior year’s ‘stay of defaults’ and lower interest rates.

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.

As the COVID-19 pandemic is ongoing, AAFC continues to remain vigilant and plan for risk and situations impacting its operating environment, including longer term impacts. To support scientific operations, a significant portion of AAFC’s workforce have been working onsite at research centers throughout Canada. In addition, AAFC is exploring opportunities to transition to hybrid work arrangements, while ensuring to adhere to recommendations of public health officials and experts.

Significant changes in relation to operations, personnel, and programs

Programs

The following are announcements of new programs or changes to existing programs:

  • Wine Sector Support Program: Funding of $166.2 million is being allocated to Agriculture and Agri-Food Canada over two years ($83.2 million in 2022-23 and $83 million in 2023-24). The Fund provides short-term financial support to licensed Canadian wineries as they adapt to ongoing and emerging challenges that impact financial resilience and competitiveness of the wine industry. The program will provide non-repayable grants to wine licensees in Canada based on their production of bulk wine fermented in Canada from domestic and/or imported primary agricultural products.

Approval by Senior Officials
Approved by:

Original signed by
Chris Forbes,
Deputy Head
Ottawa, Canada

Original signed by
Marie-Claude Guérard,
Chief Financial Officer
Ottawa, Canada

Agriculture and Agri-Food Canada
Statement of Authorities (unaudited)
For the quarter ended June 30, 2022

(in thousands of dollars)
  Fiscal year 2022-23Tablenote (1) Fiscal year 2021-22Tablenote (1)
Total available for use for the year ending March 31, 2023Tablenote (2) Used during the quarter ended June 30, 2022 Year to date used  at quarter-end Total available for use for the year ending March 31, 2022Tablenote (2) Used during the quarter ended June 30, 2021 Year to date used at quarter-end
Vote 1 - Net Operating expenditures  $610,755  $143,268  $143,268  $620,752  $139,349  $139,349
Vote  5 - Capital expenditures 38,560 5,058 5,058 50,079 4,590 4,590
Vote 10 - Grants and contributions 629,059 21,599 21,599 666,732 15,075 15,075
Budgetary statutory authoritiesTablenote (3) 2,140,283 56,100 56,100 1,969,398 51,644 51,644
Total Budgetary authorities 3,418,656 226,025 226,025 3,306,962 210,657 210,657
Total authorities  $3,418,656  $226,025  $226,025  $3,306,962  $210,657  $210,657

Tablenotes

Tablenote 1

Totals may not add due to rounding.

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Tablenote 2

Includes only Authorities available for use and granted by Parliament at quarter-end.

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Tablenote 3

Details on Budgetary statutory authorities are included the table below.

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Agriculture and Agri-Food Canada
Departmental Budgetary Expenditures by Standard Object (unaudited)
For the quarter ended June 30, 2022

(in thousands of dollars)
  Fiscal year 2022-23Tablenote 1 Fiscal year 2021-22Tablenote 1
Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended June 30, 2022 Year to date used  at quarter-end Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended June 30, 2021 Year to date used at quarter-end
Expenditures:
Personnel $533,516 $137,259 $137,259 $530,104 $136,719 $136,719
Transportation and communications 2,739 949 949 13,741 600 600
Information 8,861 898 898 10,786 654 654
Professional and special services 120,622 17,935 17,935 112,976 16,108 16,108
Rentals 7,907 4,474 4,474 8,982 2,812 2,812
Repair and maintenance 11,524 1,420 1,420 13,372 1,353 1,353
Utilities, materials and supplies 37,504 6,451 6,451 42,332 5,017 5,017
Acquisition of land, buildings and works 21,935 1,587 1,587 16,659 634 634
Acquisition of machinery and equipment 33,972 3,758 3,758 43,826 3,568 3,568
Transfer payments 2,691,404 59,350 59,350 2,561,267 49,729 49,729
Other subsidies and payments 8,763 740 740 8,682 495 495
Total gross budgetary expenditures 3,478,746 234,821 234,821 3,362,727 217,688 217,688
Less Revenues netted against expenditures:
Vote-netted revenues 60,090 8,796 8,796 55,766 7,031 7,031
Total net budgetary expenditures $3,418,656 $226,025 $226,025 $3,306,962 $210,657 $210,657

Tablenotes

Tablenote 1

Totals may not add due to rounding.

Return to tablenote 1 referrer

Appendix A

Agriculture and Agri-Food Canada
Budgetary Statutory Authorities Breakdown (unaudited)
For the quarter ended June 30, 2022

(in thousands of dollars)
  Fiscal year 2022-23Tablenote (1) Fiscal year 2021-22Tablenote (1)
Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended June 30, 2022 Year to date used  at quarter-end Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended June 30, 2021 Year to date used at quarter-end
Contributions to employee benefit plans $69,319 $17,220 $17,220 $68,728 $16,661 $16,661
Minister of Agriculture and Agri-Food - Salary and motor car allowance 93 23 23 91 23 23
Contribution payments for the AgriStability program 434,939 (9,299) (9,299) 387,230 (11,170) (11,170)
Contribution payments for the AgriInsurance program 623,000 23,163 23,163 623,000 19,054 19,054
Grant payments for the AgriInvest program 122,910 32,285 32,285 122,910 33,804 33,804
Payments in connection with the Agricultural Marketing  Programs Act 109,000 (1,428) (1,428) 104,800 4,617 4,617
Grant payments for the AgriStability program 48,221 521 521 39,320 252 252
Contribution payments for the AgriInvest program 16,550 - - 16,550 - -
Loan guarantees under the Canadian Agricultural Loans Act 13,111 (714) (714) 13,111 228 228
Contributions in support of the Assistance to the Pork Industry Initiative - (6,778) (6,778) - (12,084) (12,084)
Grants to agencies established under the Farm Products Agencies Act 100 - - 100 - -
Contribution payments for the Agricultural Disaster Relief  Program (ADRP)/AgriRecovery 226,513 2 2 118,513 (47) (47)
Canadian Pari-Mutuel Agency Revolving Fund 1,209 (553) (553) - (734) (734)
Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets 7,317 1,659 1,659 6,046 1,013 1,013
Refunds of amounts credited to revenues in previous years - - - - 27 27
Grant payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative - (2) (2) - (1) (1)
Grant Payments Related to the Dairy Direct Payment Program 468,000 - - 469,000 - -
Budgetary statutory authorities $2,140,283 $56,100 $56,100 $1,969,398 $51,644 $51,644

Tablenotes

Tablenote 1

Totals may not add due to rounding.

Return to tablenote 1 referrer