Public Safety Canada Quarterly Financial Report
For the quarter ended June 30, 2020

Table of Contents

1.0 Introduction

This quarterly financial report for the period ending June 30, 2020 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 and Supplementary Estimates (A).

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 senior officials.

Information on the mandate, roles, responsibilities and programs of Public Safety Canada can be found in the 2020-21 Departmental Plan and the 2020-21 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 2020-21 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 June 30, 2020 and June 30, 2019 for the Department’s combined:

Reduced supply of the 2020-21 Main Estimates

The department’s authorities as of June 30, 2020 reflect a reduced supply representing 9/12th of the 2020-21 Main Estimates for Votes 1 & 5 compared to the full supply for the same period in 2019-20. This is a result of parliament deferring the tabling of the 2020-21 Main Estimates in order to focus on funding high priority initiatives and primarily as a result of COVID-19.

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Budgetary Authorities and Expenditures Comparison

Starting from the left hand side, the “first” column in the graph indicates that the Department authorities are at $648.1 million for fiscal year 2020-21. The year-to-date expenditures of $136.0 million reported at the end of the first quarter of the 2020-21 fiscal year are shown under the “second” column. The “third” column in the graph depicts the 2019-20 authorities which were at $912.5 million at the end of June 2019. The 2019-20 first quarter expenditures of $92.0 million are shown under the “fourth” column.

Note: (1) Public Safety Canada’s appropriations have decreased to $648,105K as of June 30, 2020. (2) The amount of $40.7M included in the authorities column is for a statutory contribution in support of the readiness of the Canadian Red Cross for urgent relief efforts related to COVID-19 pursuant to the Public Health Events of National Concern Payments Act.

2.1 Significant Changes to Authorities

For the period ending June 30, 2020, the authorities provided to the Department include 9/12th of the 2020-21 Main Estimates, Supplementary Estimates (A) and a Statutory Contribution.  The 2019-20 authorities for the same period included the full 2019-20 Main Estimates supply and Budget 2019 approved items.  The Statement of Authorities table presents a net decrease of $264.4 million (29.0 percent) compared to those of the same period of the previous year (from $912.5 million to $648.1 million).    

Operating Expenditures authorities have decreased by $29.4 million (21.4 percent) (from $137.3 million to $107.9 million) mainly due to:

Offset by the following increase:

Grants and Contributions (G&C) authorities have decreased by $234.9 million (30.9 percent) (from $759.2 million to $524.3 million) mainly due to:

These decreases are offset by the following increases:

Budgetary Statutory authorities have decreased by $110.2 thousand (0.7 percent) in 2020-21 mostly due to the Minister’s salary and car allowance adjustment related to the departure of the Minister of Border Security and Organized Crime Reduction.

2.2 Significant Variances from Previous Year Expenditures

First Quarter Expenditures
Compared to the previous year, expenditures used during the quarter ended June 30, 2020 have increased by $43.9 million (47.7 percent) (from $92.0 million to $135.9 million) as reflected in the Departmental Budgetary Expenditures by Standard Object table.

      Offset by the following decreases:

3.0 Risks and Uncertainty


At the onset of the COVID-19 outbreak, with the majority of its employees transitioning to working remotely, Public Safety Canada (PS) turned its focus to supporting critical services. These disruptive but understandable changes have affected how the department delivers its services, and how quickly it delivers them. Interim measures have been taken to help ensure the Department can continue to deliver on its mandate. While the majority of PS employees are currently working from home, employees have demonstrated resiliency and adaptability as they continue to perform their regular work functions.  The department also established a Pandemic Management Committee to ensure proper actions are taken and communicated across the department to ensure staff remain well supported and provided with needed guidance and as the situation continues to evolve. 

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.

Updates to the DFAA liability are completed twice a year with the last one having been conducted in the Winter of 2019-20 and now reflected in the June 30, 2020 Quarterly Financial Report. As a result of this update, there are now currently 58 natural disasters for which Orders-in-Council 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 in regards to these 58 events is $2.6 billion, the majority of which is expected to be paid out over the next five years.

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

Since the last update presented in the December 31, 2019 Quarterly Financial Report, the DFAA liability has increased by $300 million from $2.3 billion in the third quarter of 2019-20 to $2.6 billion in the first quarter of 2020-21. Variations in the DFAA liability are mainly attributable to:

Phoenix Pay Modernization Project

In April 2016, PS moved to the new Phoenix federal public service pay system. In transitioning to the new pay system, large backlogs and delays at the centralized Pay Centre have led to a significant increase in pay-related issues reported by employees.

To support employees at highest risk, the Department continues to work on a range of issues that falls within the department’s scope of control to support employees who are experiencing difficulties with their pay, including: providing emergency salary advances, analyzing and resolving integration issues between the department’s Human Resource Management System and the Phoenix pay system. Issues affecting PS employees and the measures the Department is able to take to help mitigate them have been discussed with the unions at local and national level management consultation committees. At these meetings, union representatives have been engaged to ensure that employees’ perspectives are shared with Management.  

The Department is closely monitoring pay transactions to identify and address pay issues in a timely manner, continues to apply mitigation measures which were implemented in 2016, and is currently assessing the design and operating effectiveness of key payroll controls.

4.0 Significant Changes in Relation to Operations, Programs and Personnel

On April 15, 2020, Patrick Tanguy was appointed Senior Assistant Deputy Minister of Emergency Management and Programs Branch.

On April 20, 2020, Todd Cain was appointed Assistant Deputy Minister of Emergency Management and Programs Branch.

On June 15, 2020, Miranda Shepherd was appointed Director General of Internal Audit and Evaluation Directorate.

5.0 Approval by Senior Officials

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

Rob Stewart
Deputy Minister
Public Safety Canada
Ottawa (Canada)
Date: August 26, 2020

Patrick Amyot, CPA, CMA
Chief Financial Officer
Public Safety Canada
Ottawa (Canada)
Date: August 26, 2020

6.0 Statement of Authorities (unaudited)

7.0 Departmental budgetary expenditures by Standard Object (unaudited)

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