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Canada Border Services Agency: Quarterly Financial Report—For the quarter ended September 30, 2022

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1. Introduction

This Quarterly Financial Report (QFR) has been prepared as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates, Canada's Economic Action Plan 2021 (Budget 2021) and Canada's COVID-19 Economic Response Plan.

Information on the 'raison d'être', mandate, role and core responsibilities of the Canada Border Services Agency (CBSA) can be found in Part III Departmental Plan and Part II of the Main Estimates.

The QFR has not been subjected to an external audit or review, but has been reviewed internally by the Departmental Audit Committee.

1.1 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying statement of authorities (Table 1) includes the department's spending authorities granted by Parliament, and those used by the department consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2021 to 2022 and 2022 to 2023 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the consolidated revenue fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

The department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results

This section highlights the significant items that contributed to the net increase or decrease in resources available for the year and actual expenditures as of the quarter ended .

graph1
Image description

Graph 1: Comparison of net budgetary authorities and expenditures as of and
(in thousands $)

  2021 to 2022 2022 to 2023
Net budgetary authorities 2,406,080 2,523,152
Expenditures for the quarter ending September 30 554,323 601,353
Expenditures for the quarter ending June 30 466,375 524,417
Total expenditures to date 1,020,698 1,125,770

2.1 Significant changes to authorities

For the period ending , the authorities provided to the CBSA comprise the Main Estimates, and Treasury Board (TB) approved Budget 2021 measures and any unused spending authorities carried forward from the previous fiscal year.

The Statement of authorities (Table 1) presents a net increase of $117.1 million or 4.9% of the agency's total authorities of $2,523.2 million on compared to $2,406.1 million total authorities at the same quarter last year.

This net increase in the authorities available for use is the result of an increase in Vote 1 – Operating Expenditures of $88.7 million and an increase in Vote 5 – Capital of $6.6 million.

The agency's Statutory Authority related to the employee benefit plan (EBP) increased by $21.8 million, or 11.4% from the previous year.

2.2 Explanations of significant variances in expenditures from previous year

As indicated in the statement of authorities (Table 1), the agency's expenditures for year-to-date, at quarter ended were $1,125.8 million, as compared to $1,020.7 million for year-to-date, quarter ended . The net increase of $105.1 million or 10.3% in expenditures is mainly due to the following items:

  • Increase of $102.4 million or 11.6% in Vote 1 Operating Expenditures year-to-date used at quarter end. The increase in expenditures is mainly attributed to an increase for various salaries, overtime and vacation expenses.
  • Decrease of $8.6 million or 19.3% in Vote 5 Capital Expenditures year-to-date used at quarter end. The decrease in expenditures is mainly attributed to a $10.2 million decrease in Facilities Capital Projects which is offset by an increase in Laboratory and Equipment and Parts expenditures (Laboratory and Medical Equipment and Parts account).
  • Increase of $10.9 million or 11.4% in statutory expenditures

As indicated in the departmental budgetary expenditures by standard objects (Table 2), the net increase by standard object is mainly attributed to:

  • Increase of $101.3 million for Personnel due to vacation expenses, salaries and overtime pay
  • Increase of $7.2 million for Transportation and Communications due to travel
  • Increase of $6.8 million in Acquisition of machinery and equipment for telecommunications and personal computer equipment and image/video equipment
  • Increase of $3.8 million in Other subsidies and payments which can be mainly attributed to a settlement of a claim against the Crown
  • Increase of $1.1 million in Repair and Maintenance can be attributed to office furniture and other equipment repairs and maintenance, facilities non-capital projects and repair of computer equipment
  • Decrease of $10.2 million in Acquisition of land, buildings and equipment related to Facilities Capital Projects
graph2
Image description

Graph 2: Comparison of vote netted revenue and revenue collected as of and
(in thousands $)

  2021 to 2022 2022 to 2023
Vote netted revenue 24,030 24,030
Revenue collected for the quarter ending September 30 3,808 7,181
Revenue collected for the quarter ending June 30 1,260 3,587
Total revenue collected to date 5,068 10,768

The planned revenue from the sales of services reflects the agency’s revenue respending authority. The year-to-date revenue from the charge of services has increased by $5.7 million or 112.5% due to the reopening of borders and increased travel after the lifting of COVID-19 restrictions. The increased travel has resulted in higher regular revenues collected in programs such as Nexus.

3. Risks and uncertainties

The CBSA's changing operating environment makes the agency particularly susceptible to external drivers that are largely beyond its control (e.g. supply chain delays). Together, these drivers have the potential to affect the organization's ability to adhere to its annual financial plan.

Since the beginning of the year, the annual inflation rate rose significantly to levels not seen in decades. Combined with a very competitive labour market, these factors heightened the agency's exposure to risks that relate to achieving its goals in a timely fashion and within allocated budgets.

Furthermore, despite the easing of health restrictions related to COVID-19 in the second quarter, workforce availability remained a challenge. The transition to a Hybrid Work Model and the self-isolation rules in force exacerbated the effects on labour force availability to complete major projects on time, though at a lesser extent than in the first quarter.

For example, the agency is pursuing several large information technology (IT) and physical infrastructure projects; most are multi-year in nature and represent substantial investments. Because the CBSA depends on other government departments and/or external stakeholders for the development and implementation of many of these projects, any delays due to the COVID-19 pandemic or workforce availability both within and outside the agency can have a significant impact on the budgets for major projects. Even short delays may incur considerable additional costs for materials commodities and other market rate priced services.

Despite these conditions, the agency has met key deadlines and deliverables on many of the major projects currently underway and is on track for the next set of deliverables. The agency strives to mitigate financial risks by risk-rating its projects, conducting periodic project reviews, and by holding regular budget discussions. Such activities are informed and supported by the agency's quarterly integrated project reporting processes.

4. Significant changes in relation to operations, personnel and programs

4.1 Key senior personnel

Erin O’Gorman was appointed as President of the Canada Border Services Agency on . She previously served as Associate Secretary of the Treasury Board.

Scott Harris, Vice-President of the Intelligence and Enforcement Branch (IEB), was named as Associate Deputy Minister at Immigration, Refugee and Citizenship Canada on .

Aaron McCrorie was appointed as the new Vice-President of IEB on . He previously served as Associate Assistant Deputy Minister of Safety and Security at Transport Canada.

Kelly Bélanger was appointed as Deputy Chief Information Officer on . She previously served as Director General of the Projects and Service Management Directorate in the Information, Science and Technology Branch in ISTB.

Andrew Francis was appointed as Associate Vice-President of the Finance and Corporate Management Branch (FCMB) on . He previously served as Deputy Chief Financial Officer and Director General of the Planning and Resource Management Directorate in FCMB.

Louise Youdale, Vice-President of the Human Resources Branch (HRB), retired on . Gloria Haché, Director General of Training and Development in HRB, was named as acting vice-president of HRB on a short term basis.

4.2 Operations

On , the Government of Canada announced the removal of all COVID-19 entry restrictions, as well as testing, quarantine, and isolation requirements for anyone entering Canada. Effective , all travellers, regardless of citizenship, no longer have to:

  • submit public health information through the ArriveCAN app or website
  • provide proof of vaccination
  • undergo pre- or on-arrival testing
  • carry out COVID-19-related quarantine or isolation and
  • monitor and report if they develop signs or symptoms of COVID-19 upon arriving to Canada

Also on , the CBSA resumed border services at 55 small airports. The Agency had been gradually resuming border services at those airports affected by the temporary measures put in place as a result of COVID-19.

On , as part of the Traveller Modernization initiative, the Agency launched the Advance CBSA Declaration feature within ArriveCAN, which allows travellers to submit their customs and immigration declaration in advance of their arrival at several major airports in Canada. As a result, the Agency decommissioned the CanBorder eDeclaration app on the same date. For more information on the costs to develop, operate and maintain the ArriveCAN application, please consult ArriveCAN costs.

5. Approval by senior officials

Approved by:

Erin O'Gorman
President
Ted Gallivan
Executive Vice-President
Ottawa, Canada
Date:

Jonathan Moor
Chief Financial Officer
Ottawa, Canada
Date:

6. Table 1: Statement of authorities (unaudited)

Fiscal year 2022 to 2023, in thousands of dollars
  Total available for use for the year ending Tablenote 1 Used during the quarter ended Year-to-date used at quarter end
Vote 1: Operating expenditures 2,094,004 522,141 983,331
Vote 5: Capital expenditures 216,772 25,802 35,853
Statutory authority: Contributions to employee benefit plans 212,376 53,094 106,188
Statutory authority: Refunds of amounts credited to revenues in previous years 0 0 3
Statutory authority: Spending of proceeds from the disposal of surplus Crown assets 0 316 395
Total budgetary authorities 2,523,152 601,353 1,125,770
Non-budgetary authorities 0 0 0
Total authorities 2,523,152 601,353 1,125,770
Fiscal year 2021 to 2022, in thousands of dollars
  Total available for use for the year ending Tablenote 2 Used during the quarter ended Year-to-date used at quarter end
Vote 1: Operating expenditures 2,005,297 483,011 880,908
Vote 5: Capital expenditures 210,197 23,623 44,443
Statutory authority: Contributions to employee benefit plans 190,586 47,646 95,293
Statutory authority: Refunds of amounts credited to revenues in previous years 0 0 1
Statutory authority: Spending of proceeds from the disposal of surplus Crown assets 0 43 53
Total budgetary authorities 2,406,080 554,323 1,020,698
Non-budgetary authorities 0 0 0
Total authorities 2,406,080 554,323 1,020,698

7. Table 2: Departmental budgetary expenditures by standard object (unaudited)

Fiscal year 2022 to 2023, in thousands of dollars
  Planned expenditures for the year ending Tablenote 3 Expended during the quarter ended Year-to-date used at quarter end
Expenditures
Personnel 1,733,311 446,431 888,178
Transportation and communications 54,919 12,622 21,038
Information 2,111 539 1,294
Professional and special services 542,628 111,091 166,471
Rentals 6,586 2,784 4,306
Repair and maintenance 54,482 6,630 11,447
Utilities, materials and supplies 26,674 4,230 7,522
Acquisition of land, buildings and works 39,126 7,698 8,305
Acquisition of machinery and equipment 75,072 13,280 18,257
Transfer payments 0 0 0
Other subsidies and payments 12,273 3,229 9,717
Total gross budgetary expeditures 2,547,182 608,534 1,136,535
Less revenues netted against expenditures
Sales of services 24,030 7,181 10,768
Other revenue 0 0 -3
Total revenues netted against expenditures 24,030 7,181 10,765
Total net budgetary expenditures 2,523,152 601,353 1,125,770
Fiscal year 2021 to 2022, in thousands of dollars
  Planned expenditures for the year ending Tablenote 4 Expended during the quarter ended Year-to-date used at quarter end
Expenditures
Personnel 1,696,380 401,283 786,864
Transportation and communications 64,127 8,787 13,877
Information 1,831 278 485
Professional and special services 396,953 112,477 168,019
Rentals 14,516 2,556 3,766
Repair and maintenance 36,659 6,455 10,353
Utilities, materials and supplies 20,124 3,678 6,541
Acquisition of land, buildings and works 90,035 9,425 18,489
Acquisition of machinery and equipment 99,990 8,505 11,429
Transfer payments 0 0 0
Other subsidies and payments 9,495 0 5,942
Total gross budgetary expenditure 2,430,110 558,131 1,025,765
Less revenues netted against expenditures
Sales of services 24,030 3,808 5,068
Other revenue 0 0 -1
Total revenues netted against expenditures 24,030 3,808 5,067
Total net budgetary expenditures 2,406,080 554,323 1,020,698

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