Public Safety Canada Quarterly Financial Report for the quarter ended September 30, 2023

1.0 Introduction

This quarterly financial report for the period ending September 30, 2023 has been prepared by management as required by section 65.1 of the Financial Administration Act, in the form and manner prescribed by Treasury Board. The report should be read in conjunction with the Main Estimates.

This quarterly financial report has not been subject to an external audit or review. However, it has been reviewed by the Departmental Audit Committee prior to approval by the Deputy Minister.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2023-24 Departmental Plan and the 2023-24 Main Estimates.

1.1 Basis of Presentation

This quarterly report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities table includes the Department's spending authorities granted by Parliament, or received from Treasury Board Central Votes, and those used by the Department consistent with the Main Estimates for the 2023-24 fiscal year. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet the information needs concerning the use of spending authorities.

The authority of Parliament is required before funds 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.

Public Safety Canada 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, as do the expenditures presented in this report.

2.0 Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

The following graph provides a comparison of the net budgetary authorities and expenditures as of September 30, 2023 and September 30, 2022 for the Department's combined:

• Vote 1: Operating Expenditures;
• Vote 5: Grants and Contributions;
• Statutory Votes:
  • Employee Benefit Plans; and
  • Minister's Salary and Car Allowance.

The net budgetary authorities are $935.6 million (54.5 percent) higher and expenditures to date are $874.9 million (74.6 percent) lower compared to the same period of previous year. These variances are primarily attributable to new funding for the Disaster Financial Assistance Arrangements (DFAA) program based on forecasts from provinces and territories, as well as a decrease in advanced payment requirements related to the DFAA based on the timing of disbursements.

2.1 Significant Changes to Authorities

For the period ending September 30, 2023, the authorities provided to the Department include Main Estimates and TB Central Vote transfers. The 2022-23 authorities for the same period included the Main Estimates, Supplementary Estimates (A) and TB Central Vote transfers. The Statement of Authorities table presents a net increase of $935.6 million (54.5 percent) compared to those of the same period of the previous year (from $1,715.9 million to $2,651.5 million).

Operating Expenditures authorities have decreased by $0.7M (0.3 percent) (from $209.9 million to $209.2 million), which is primarily attributable to:

• A decrease of $15.4 million for the relocation and accommodations of the Government Operations Center (Budget 2016) as a result of the progression of the project;
• A decrease of $4.1 million for the operating budget carry-forward, as a result of a smaller lapse in 2022-23; and
• A decrease of $2.4 million due to the expiry of the funding for the Initiative to Take Action Against Gun and Gang Violence, for which renewal is underway.

These decreases are primarily offset by the following increases:

• An increase of $7.6 million in new funding to support the design and development of the Firearms Buyback Program for prohibited assault style firearms;
• An increase of $5.0 million in additional funding to improve the federal emergency management capacity;
• An increase of $2.3 million in new funding to build Canada's Research Security Capacity;
• An increase of $1.9 million for the renewal of the National Strategy for Protecting Children from Sexual Exploitation Online program; and
• An increase of $1.8 million for the renewal of the Indigenous Community to address the needs of vulnerable offenders in the federal correctional system.

Grants and Contributions (G&C) authorities have increased by $934.4 million (62.8 percent) (from $1,487.4 million to $2,421.8 million), which is primarily attributable to:

• An increase of $801.3 million in new funding related to the Disaster Financial Assistance Arrangements (DFAA) program based on forecasts from provinces and territories for expected disbursements under the DFAA for 2023-24;
• An increase of $67.7 million in funding levels for the First Nations and Inuit Policing Program;
• An increase of $55.5 million in additional funding for the Memorial Grant Program for First Responders;
• An increase of $26.3 million in additional funding for the Building Safer Communities Fund;
• An increase of $16.3 million to matching of donations raised by the Canadian Red Cross in response to the 2021 British Columbia flood and wildfire events; and
• An increase of $14.8 million in funding levels for First Nations and Inuit Policing Facilities program.

These increases are primarily offset by the following expired program:

• A decrease of $75.6 million for the Initiative to Take Action Against Gun and Gang Violence, for which renewal is underway.  

Budgetary Statutory authorities have increased by $1.9 million (10.3 percent) in 2023-24 primarily attributable to the Employee Benefits Plan associated with new salary funding received in Main Estimates.

2.2 Significant Variances from Previous Year Expenditures

Year-to-Date Expenditures

For the period ending September 30, 2023, the Departmental Budgetary Expenditures by Standard Object table presents a net decrease of $874.9 million (74.6 percent) in Public Safety's year-to-date (YTD) expenditures compared to the previous year (from $1,172.7 million to $297.8 million). This decrease is primarily attributable to:

• A decrease of $849.0 million due to a decrease in advanced payment requirements related to natural disasters for the Disaster Financial Assistance Arrangements (DFAA) program. The program is currently projecting a significant surplus as a result of forecasts from provinces and territories. The surplus is expected to be reprofiled into future years;
• A decrease of $33.1 million in support of payments for the Initiative to Take Action Against Gun and Gang Violence; and
• A decrease of $23.3 million in support of payments for the Humanitarian Workforce to respond to COVID-19 and Other Large-Scale Emergencies.

These decreases are primarily offset by the following increases:

• An increase of $15.5 million for personnel expenditures primarily attributable to an increase in staffing requirements to support advancement of the department's agenda; and
• An increase of $8.4 million in support of payments for the Building Safer Communities Fund.

Second Quarter Expenditures

Compared to the previous year, expenditures used during the quarter ended September 30, 2023 have decreased by $777.5 million (78.9 percent) (from $985.1 million to $207.6 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

• Operating expenditures have increased by $10.3 million (22.8 percent) primarily attributable to:
  • Personnel expenditures have increased by $8.5 million, primarily attributable to an increase in staffing requirements to support advancement of the department's agenda; and
  • Other operating expenditures have increased by $2.0 million, primarily attributable to an increase in spending for informatics services.
• Transfer payments expenditures have decreased by $788.3 million (84.3 percent) primarily attributable to:
  • A decrease of $784.4 million due to the timing of payments for the Disaster Financial Assistance Arrangements (DFAA) program. The program is currently projecting a significant surplus as a result of forecasts from provinces and territories. The surplus is expected to be reprofiled into future years;
  • A decrease of $33.1 million due to the timing of payments for the Initiative to Take Action Against Gun and Gang Violence; and
  • A decrease of $23.2 million due to the timing of payments for the Humanitarian Workforce to Respond to COVID-19 and Other Large-Scale Emergencies.

  Primarily offset by the following increases:

  • An increase of $31.4 million due to the timing of payments for the First Nations and Inuit Policing Program;
  • An increase of $7.4 million due to the timing of payments for the Memorial Grant Program for First Responders; and
  • An increase of $7.3 million in support of payments for the Building Safer Communities fund.

3.0 Risks and Uncertainty

Disaster Financial Assistance Arrangements

The Disaster Financial Assistance Arrangements (DFAA) contribution program presents a greater level of uncertainty than other PS grants and contributions programs given that it represents a significant portion of the PS budget and that it is subject to unforeseen events. The DFAA contribution program was established in 1970 to provide a consistent and equitable mechanism for federal sharing of provincial and territorial costs for natural disaster response and recovery where such costs would place an undue burden on a provincial or territorial economy.

There are currently 71 active natural disasters for which Orders in Council (OiC) have been approved, authorizing the provision of federal financial assistance under the DFAA, and for which final payments have not yet been made. Public Safety's total outstanding share of liability under the DFAA with regards to these 71 events is $4.82 billion, the majority of which is expected to be paid out over the next five years.

DFAA liability has slightly decreased by $10 million from $4.83 billion in the first quarter of 2023-24 to $4.82 billion in the second quarter. Variations in the DFAA liability are mainly attributable to:

• Changes for newly approved OiCs, which authorize funding related to recent natural disasters for which provinces and territories require federal sharing of costs;
• Changes in the estimates of the existing natural disasters; and
• Changes for payments issued under the existing obligation.

The following are the most significant events within Public Safety Canada's DFAA liability:

• British Columbia 2021 November Storm ($1.4 billion);
• British Columbia 2021 Flood & Landslides ($581 million);
• British Columbia 2020 Flood & Landslides ($410 million);
• Alberta 2013 June Flood ($410 million);
• Manitoba 2022 Spring Flood ($212 million); and
• Quebec 2019 Spring Flood ($163 million).

Updates to the DFAA liability as a result of changes to the estimates of the existing natural disasters, are completed and approved twice a year with the last update having been conducted in Fall 2023-24 and is reflected in the current Quarterly Financial Report.

Financial impacts of the unprecedented wildfires in several Canadian provinces in 2023 are significant and are presently being estimated. Consequently, they are not reflected in this report.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

On July 26th, 2023, the Prime Minister has named The Honourable Dominic LeBlanc as Minister of Public Safety, Minister Responsible for Democratic Institutions, and Minister of Intergovernmental Affairs.

On July 26th, 2023, the Prime Minister was appointed The Honourable Harjit Sajjan as President of the King's Privy Council, Minister of Emergency Preparedness and Minister for Pacific Economic Development Agency of Canada.

5.0 Approval by Senior Officials

Approved as required by the Policy on Financial Resource Management, Information and Reporting:

6.0 Statement of Authorities (unaudited)

7.0 Departmental budgetary expenditures by Standard Object (unaudited)

Date modified:

2023-11-28