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 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 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, 2022.
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) |
2022-23 | 2021-22 |
|---|---|---|
| Total authorities available for use | 3,453 | 3,734 |
| Total year-to-date expenditures | 928 | 652 |
| Utilization | 27% | 17% |
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) |
2022-23 | 2021-22 | Variances |
|---|---|---|---|
| Vote 1 - Net Operating Authorities | 637 | 642 | (5) |
| Vote 5 - Capital Authorities | 45 | 56 | (10) |
| Vote 10 - Grants and Contributions | 629 | 667 | (38) |
| Budgetary statutory authorities | 2,141 | 2,370 | (229) |
| Total Authorities | 3,453 | 3,734 | (282) |
|
Note: Totals may not add up due to rounding. |
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Total authorities in fiscal year 2022-23 were $3,453 million at the end of the second quarter, as compared to $3,734 million at the end of the second quarter of 2021-22, which represents a decrease of $282 million or 8%. This decrease is attributable to the following:
- $229 million decrease in statutory authorities is primarily due to $292 million received in 2021-22 for the Agricultural Disaster Relief Program to assist farmers in British Columbia with recovering from the adverse effects of excess rainfall and flooding. This decrease was partially offset by an increase of $57 million 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.
- $10 million decrease in Vote 5 Capital authorities is mostly attributable to the one-time $10 million capital funding received from the sale of AAFC’s Regina Research Farm in 2021-22.
- $5 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. This decrease was mostly offset by $15 million of funding increases for climate initiatives, the Operating Budget Carry Forward, and funding for 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 second quarter of the current and previous fiscal year.
| Expenditures (in millions of dollars) |
2022-23 | 2021-22 | Variance |
|---|---|---|---|
| Vote 1 - Net Operating expenditures | 289 | 288 | 1 |
| Vote 5 - Capital expenditures | 18 | 11 | 7 |
| Vote 10 - Grants and Contributions expenditures | 151 | 72 | 79 |
| Budgetary statutory expenditures | 470 | 281 | 190 |
| Total Net Budgetary Expenditures | 928 | 652 | 277 |
|
Note: Totals may not add up due to rounding. |
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At the end of the second quarter of 2022-23, total expenditures were $928 million, compared to $652 million reported for the same period in 2021-22, representing an increase of $277 million or 42%. The increase is attributable to the following:
- $190 million increase in statutory expenditures mainly due to increased spending in the AgriInsurance program ($184 million) due to increased insurance premiums associated with higher commodity prices.
- $79 million increase in Vote 10 – Grants and Contributions is mainly caused by a $61 million increase in Agricultural Climate Solutions – On-Farm Stream and a $22 million increase in the Poultry and Egg On-Farm Investment Program due to timing differences as funding was received later in the 2021-22 fiscal year for both of these programs.
- $7 million increase in Vote 5 – Capital expenditures due to timing of payments for retrofit expenditures at the St-John’s and Kentville Research and Development Centres.
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 has been working on-site at research centers throughout Canada. In addition, AAFC is exploring opportunities to transition to hybrid work arrangements, while adhering to recommendations of public health officials and experts.
Approval by senior officials
Approved by:
Original signed by
Suzy McDonald,
Acting Deputy Minister
Ottawa, Canada
Original signed by
Marie-Claude Guérard,
Chief Financial Officer
Ottawa, Canada
| Fiscal year 2022-23Table 1 Footnote 1 | Fiscal year 2021-22Table 1 Footnote 1 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2023Table 1 Footnote 2 | Used during the quarter ended September 30, 2022 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2022Table 1 Footnote 2 | Used during the quarter ended September 30, 2021 | Year to date used at quarter-end | |
| Vote 1 - Net Operating expenditures | $636,706 | $145,616 | $288,884 | $641,706 | $148,461 | $287,810 |
| Vote 5 - Capital expenditures | 45,488 | 12,908 | 17,966 | 55,521 | 6,476 | 11,066 |
| Vote 10 - Grants and contributions | 629,059 | 129,283 | 150,882 | 666,732 | 56,777 | 71,852 |
| Budgetary statutory authoritiesTable 1 Footnote 3 | 2,141,284 | 414,269 | 470,369 | 2,370,416 | 229,189 | 280,833 |
| Total Budgetary authorities | 3,452,537 | 702,076 | 928,101 | 3,734,376 | 440,904 | 651,562 |
| Total authorities | $3,452,537 | $702,076 | $928,101 | $3,734,376 | $440,904 | $651,562 |
| Fiscal year 2022-23Table 2 Footnote 1 | Fiscal year 2021-22 Table 2 Footnote 1 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2023 | Expended during the quarter ended September 30, 2022 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2022 | Expended during the quarter ended September 30, 2021 | Year to date used at quarter-end | |
| Expenditures: | ||||||
| Personnel | $558,151 | $140,957 | $278,215 | $548,890 | $140,777 | $277,496 |
| Transportation and communications | 2,757 | 1,622 | 2,571 | 13,888 | 709 | 1,308 |
| Information | 8,924 | 1,361 | 2,259 | 10,902 | 1,195 | 1,849 |
| Professional and special services | 124,521 | 20,645 | 38,580 | 116,518 | 22,016 | 38,124 |
| Rentals | 7,962 | 1,478 | 5,952 | 9,078 | 832 | 3,645 |
| Repair and maintenance | 12,037 | 2,362 | 3,782 | 14,108 | 2,408 | 3,761 |
| Utilities, materials and supplies | 38,720 | 8,974 | 15,426 | 43,743 | 6,741 | 11,758 |
| Acquisition of land, buildings and works | 21,935 | 8,365 | 9,951 | 16,659 | 2,458 | 3,093 |
| Acquisition of machinery and equipment | 37,391 | 4,759 | 8,517 | 46,311 | 3,514 | 7,082 |
| Transfer payments | 2,691,404 | 524,839 | 584,189 | 2,961,267 | 267,623 | 317,352 |
| Other subsidies and payments | 8,826 | 5,395 | 6,135 | 8,777 | 6,366 | 6,861 |
| Total gross budgetary expenditures | 3,512,627 | 720,757 | 955,578 | 3,790,141 | 454,638 | 672,327 |
| Less Revenues netted against expenditures: | ||||||
| Vote-netted revenues | 60,900 | 18,681 | 27,477 | 55,766 | 13,734 | 20,765 |
| Total net budgetary expenditures | $3,452,537 | $702,076 | $928,101 | $3,734,376 | $440,904 | $651,562 |
Appendix A
| Fiscal year 2022-23 Footnote 1 | Fiscal year 2021-22 Footnote 1 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2023 | Expended during the quarter ended September 30, 2022 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 2022 | Expended during the quarter ended September 30, 2021 | Year to date used at quarter-end | |
| Contributions to employee benefit plans | $69,319 | $17,220 | $34,441 | $68,728 | $16,661 | $33,321 |
| Minister of Agriculture and Agri-Food - Salary and motor car allowance | 93 | 23 | 46 | 91 | 23 | 45 |
| Contribution payments for the AgriStability program | 434,939 | (4,928) | (14,227) | 387,230 | 426 | (10,743) |
| Contribution payments for the AgriInsurance program | 623,000 | 321,846 | 345,010 | 623,000 | 141,979 | 161,033 |
| Grant payments for the AgriInvest program | 122,910 | 50,156 | 82,441 | 122,910 | 48,568 | 82,372 |
| Payments in connection with the Agricultural Marketing Programs Act | 109,000 | 4,668 | 3,240 | 104,800 | 6,477 | 11,095 |
| Grant payments for the AgriStability program | 48,221 | (521) | - | 39,320 | 706 | 957 |
| Contribution payments for the AgriInvest program | 16,550 | - | - | 16,550 | 5,017 | 5,017 |
| Loan guarantees under the Canadian Agricultural Loans Act | 13,111 | - | (714) | 13,111 | (286) | (57) |
| Contributions in support of the Assistance to the Pork Industry Initiative | - | (85) | (6,863) | - | - | (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 | 24,430 | 24,433 | 518,513 | 7,965 | 7,919 |
| Canadian Pari-Mutuel Agency Revolving Fund | 1,209 | 25 | (528) | - | 575 | (159) |
| Spending of Amounts Equivalent to Proceeds from Disposal of Surplus Moveable Crown Assets | 8,318 | 1,444 | 3,103 | 7,064 | 1,086 | 2,099 |
| Refunds of amounts credited to revenues in previous years | - | - | - | - | - | 27 |
| Grant payments for the Canadian Agricultural Income Stabilization program Inventory Transition Initiative | - | (3) | (4) | - | (4) | (5) |
| Contribution payments for the Canadian Agricultural Income Stabilization program Inventory Transition | - | (2) | (2) | - | (4) | (4) |
| Grant Payments Related to the Dairy Direct Payment Program | 468,000 | - | - | 469,000 | - | - |
| Budgetary statutory authorities | $2,141,284 | $414,274 | $470,375 | $2,370,416 | $229,189 | $280,833 |