Quarterly Financial Report

Quarterly financial report for the quarter ended June 2011

Introduction

This quarterly financial report has been prepared by management as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board.

This quarterly financial report reflects the results of the current fiscal period in relation to the Main Estimates (and Supplementary Estimates A as applicable) for which full supply was released on June 27th, 2011.

The report should be read in conjunction with the Main Estimates and Supplementary Estimates.

A summary description of the Parks Canada Agency's program activities can be found in Part II of the Main Estimates.

Basis of Presentation

This quarterly financial report has been prepared using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Parks Canada Agency's spending authorities granted by Parliament and those used by the Agency, consistent with the Main Estimates and Supplementary Estimates for the 2011-12 fiscal year. This quarterly financial 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 moneys 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.

As part of the performance reporting process, the Parks Canada Agency prepares its annual audited financial statements on a full accrual basis in accordance with Treasury Board accounting policies, which are based on Canadian Generally Accepted Accounting Principles (GAAP) for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

The quarterly financial report has not been subject to an external audit or review.

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

This section highlights the significant items that contributed to the net decrease in resources available for the year and actual expenditures for the quarter ended June 30.

Significant Changes to Authorities

As at June 30, 2011, total authorities available for the year are $183.4 million less compared to the same quarter of the previous year.

The difference is primarily attributable to the end of funding under the Canada Economic Action Plan (CEAP). The major reductions are:

• $142.6 million for improvements and upgrades to national historic sites and Parks Canada's visitor facilities (CEAP)
• $16.6 million for the assessment, management and remediation of federal contaminated sites (CEAP)
• $15 million for upgrading a section of the Trans-Canada Highway from a two-lane undivided highway to a four-lane divided highway in Banff National Park (CEAP and other)
• $4.5 million for Budget 2010 - Cost containment measures

Significant Changes to Budgetary Expenditures

Expended:
As per the table Budgetary Expenditures by Standard Object, the total expended in the first quarter ending June 30, 2011 decreased by $3.5 million compared to previous year, from $139.8 million to $136.3 million. This represents a 2% decrease of expenditures recorded for the same period in 2010-2011. The majority of the decrease relates to repair and maintenance and is a result of the end of funding related to the Canada Economic Action Plan for improvements and upgrades to national historic sites and Parks Canada's visitor facilities. All other expenditures by standard object are consistent with prior year spending trends.

Planned :
The decrease in planned expenditures for acquisition of land, buildings and works is also a result of the end of funding related to the Canada Economic Action Plan for improvements and upgrades to national historic sites and Parks Canada's visitor facilities.

Risks and Uncertainties

Parks Canada is primarily funded through voted parliamentary spending authorities appropriated over a 2 year period for program expenditures, including capital expenditures and transfer payments. Also, Parks Canada Agency is partially funded through respendable revenue which originates mainly from entrance and camping fees. These revenues are impacted by economic fluctuations, competition from other parks and cultural attractions and weather conditions.

The Federal Budget 2010 announced that the operating budgets of departments/agencies would be frozen at their 2010-2011 levels for the fiscal years 2011-2012 and 2012-2013. Parks Canada has put in place the following measures to contain costs:

• A series of interim measures were initially put in place for a 6 month period and have now been extended into 2011-2012. The interim measures include: operational cost controls and targeted restrictions on filling vacant positions.
• The Agency will be monitoring closely its resources to ensure operating costs are contained, and reallocate throughout the year as necessary.

Budget 2011 announced that departmental budgets would be examined through a Strategic and Operating Review. Pursuant to this review, it is expected that future years' budgets will be reduced for fiscal years commencing in 2012-13. However, at this time, the nature and extent of any reductions are not known.

Over the past months, there were an unprecedented number of severe weather events that buried portions of 26 national parks and national historic sites under piles of debris and destroyed or damaged numerous visitor and operational facilities as well as several highways. The magnitude of damage and emergency response work has been and continues to be overwhelming both in respect to costs and timing, as these remedial works, must be undertaken at the same time as the visitor season at parks and sites.

Parks Canada is responsible for 233 dams and 110 locks that control water levels along its nine historic canals. The replacement value of this infrastructure is approximately $4 billion. A preliminary vulnerability assessment has recently been carried out and in collaboration with PWGSC, detailed inspections are now being carried out to determine short-term remedial measures to reduce risks and capital repairs to ensure compliance with safety codes.

Significant Changes in Relation to Operations, Personnel and Programs

Although the Agency delivered on the majority of its Canada Economic Action Plan commitments in 2010-11, the program continues to have a significant impact on operations in 2011-12. The Agency announced a project list that exceeded its Canada Economic Action Plan funding to ensure that it could fully deliver the Canada Economic Action Plan program commitment. As a result, the Agency will continue to deliver on approximately $26 million announced investments within its capital program to enhance visitor's facilities in the form of building repairs and renovations as well as improvements to bridges and canals.

In addition, the Agency continues to deliver on the twinning of the Trans-Canada Highway with an investment of $90 million in 2011-12.

Approval by Senior Officials

Approved by:

Statement of Authorities (Unaudited) (in thousands of dollars)
	Fiscal Year 2011-2012			Fiscal Year 2010-2011
	Total available for use for the year ending March 31, 2012*	Used during the quarter ended June 30, 2011	Year to date used at quarter end	Total available for use for the year ending March 31, 2011*	Used during the quarter ended June 30, 2010	Year to date used at quarter end
- Vote 25 - Program expenditures	575,531	101,593	101,593	760,678	106,694	106,694
- Vote 30 - Payments to the New Parks and Historic Sites Account	500	0	0	500	0	0
Budgetary statutory authorities
- Employee benefit plans	47,942	11,986	11,986	46,229	11,557	11,557
- Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act	111,000	22,750	22,750	111,000	21,576	21,576
Total Budgetary authorities	734,973	136,329	136,329	918,407	139,827	139,827
* Includes only authorities available for use and granted by Parliament at quarter-end

 

Budgetary Expenditures by Standard Object (Unaudited) (in thousands of dollars)
	Fiscal Year 2011-2012			Fiscal Year 2010-2011
Expenditures:	Planned expenditures for the year ending March 31, 2012*	Expended during the quarter ended June 30, 2011	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2011*	Expended during the quarter ended June 30, 2010	Year to date used at quarter end
Personnel	338,000	92,470	92,470	338,000	92,007	92,007
Transportation and communications	41,000	4,228	4,228	41,000	4,735	4,735
Information	11,000	1,502	1,502	11,000	1,192	1,192
Professional and special services	149,985	12,339	12,339	159,100	11,106	11,106
Rentals	19,000	2,589	2,589	16,330	2,076	2,076
Repair and maintenance	50,000	7,992	7,992	57,330	11,415	11,415
Utilities, materials and supplies	72,000	6,015	6,015	63,720	6,191	6,191
Acquisition of land, buildings and works	22,726	1,226	1,226	204,157	1,291	1,291
Acquisition of machinery and equipment	13,000	2,471	2,471	10,400	3,353	3,353
Transfer payments	3,262	1,756	1,756	4,370	1,001	1,001
Other subsidies and payments	15,000	3,741	3,741	13,000	5,460	5,460
Total budgetary expenditures	734,973	136,329	136,329	918,407	139,827	139,827
* Includes only authorities available for use and granted by Parliament at quarter-end