Quarterly Financial Report

Quarterly financial report for the quarter ended June 30, 2013

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 Secretariat. This report should be read in conjunction with the Main Estimates, the Supplementary Estimates and the previous Quarterly Financial Reports as well as Canada’s Economic Action Plan 2012 (Budget 2012).

A summary description of the Parks Canada Agency’s programs can be found in Part II of the Main Estimates.

This quarterly financial report has not been subject to an external audit. However, it has been reviewed by the Agency Audit Committee.

Basis of Presentation

The quarterly financial report has been prepared using an expenditure basis of accounting (modified cash 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 2013-2014 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 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.

In accordance with Treasury Board accounting policies, the Agency uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the department performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

As Part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year. Budget 2012 was tabled on March 29, 2012 after the tabling of the Main Estimates on February 28, 2012. As a result the measures announced in the Budget 2012 could not be reflected in the 2012-2013 Main Estimates. In 2013-2014, the changes to departmental authorities resulting from Budget 2012 were reflected in the 2013-2014 Main Estimates tabled in Parliament.

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 net decrease in actual expenditures for the quarter ended June 30.

Significant Changes to Statement of Authorities

Authorities available for use:

This first quarterly report, ending June 30, 2013, reflects the authorities that were approved for this period. The funding available for use includes the 2013-2014 Main Estimates and the operating budget carry-forward. As per the Statement of Authorities Table, at June 30, 2013, Parks Canada’s authorities “total available for use for the year ending March 31, 2014”; are $5.5 million lower ($743.7M – $749.1M) when compared to the same quarter of the previous year.

These changes in Authorities are a result of decreases totaling $56.6 million which are offset by increases totaling $51.1 million. The decreases are mainly attributable to a $19.7 million decrease for savings identified as part of the Budget 2012, a $15 million decrease as a result of the planned completion of a section of the Trans-Canada Highway in Banff National Park, a $7.5 million decrease for emergency response funding for natural disasters, a $4.5 million decrease in supporting building the Trans-Canada Trail and a number of small decreases amounting to $9.9 million. The increases are mainly attributable to $47.2 million carried over from 2012-2013 and a number of other small increases amounting to $3.9 million.

Authorities used during the quarter:

In the first quarter of 2013-2014, total budgetary expenditures were $102.0 million compared to $120.6 million reported in the same period of 2012-2013, indicating an $18.6 million decrease for this period.

The decrease in used Authorities represent a decrease of $10.6 million in Vote 20 – Program Expenditures as a result of spending restraint measures put in place, a decrease of $0.8 million for Contributions to Employee Benefits as well as a decrease of $7.2 million in expenditures equivalent to revenues. The latter is a result of timing differences in the recording of revenues due to the implementation of Parks Canada's new Campground Reservation System.

Significant Changes to Budgetary Expenditures by Standard Object

Expended:

As per the Budgetary Expenditures by Standard Object Table, the total expended in the first quarter ending June 30, 2013 decreased by $18.6 million compared to the previous year, from $120.6 million to $102.0 million. This represents a fifteen-percent decrease of recorded expenditures compared to the same period in 2012-2013. Compared to the same period in 2012-2013, the majority of the decrease between 2012-2013 and 2013-2014 relates to expenditures in personnel due to spending restraint measures put in place as well as the impact to our workforce resulting from implementing Budget 2012 savings measures. The other major decrease is in transfer payments and is related to a contribution agreement for the Trans-Canada Trail which terminated last year. All other expenditures are consistent with prior year spending trends.

Planned:

As per the Budgetary Expenditures by Standard Object Table, the total planned expenditures as of the first quarter ending June 30, 2013 decreased by $5.5 million compared to the previous year, from $749.1 million to $743.7 million. This is the net result of increases and decreases detailed in the above section but overall is less than a 1-percent decrease in planned expenditures as compared to the same period in 2012-2013.

Risks and Uncertainties

Parks Canada Agency is partially funded through voted parliamentary spending authorities appropriated over a two-year period for program expenditures, including capital expenditures and transfer payments. Parks Canada is also partially funded through respendable revenue which over 60 percent originates mainly from entrance and camping fees. These revenues are impacted by economic fluctuations, competition from other parks and cultural attractions and weather conditions.

Heavy rains and flooding resulting from a 100-year flood event occurred in Southern Alberta from June 19 to 21, 2013. This caused extensive damage to infrastructure primarily in Banff, Waterton Lakes, Kootenay and Yoho national parks. To date, Parks Canada has incurred or committed almost $12 million for emergency and immediate infrastructure repairs required to reopen highways and ensure public safety. Costs to complete all remaining repairs are not yet fully known.

In accordance with the Directive for Dam Safety Program of Parks Canada Dams and Water-Retaining Structures, the Agency continues to conduct dam safety reviews for the purpose of assessing their overall status, condition, functionality and identifying recapitalization requirements to ensure public safety and compliance with the Canadian Dam Association Standards. The results of the Dam Safety Reviews will inform the capital and human resource investment required to improve dam condition and/or address public safety risks.

Significant Changes in Relation to Operations, Personnel and Programs

A new organizational structure was established bringing together historic canals from three separate Field Units into a single structure. This is intended to foster a coherent management vision, a stronger profile within Parks Canada, and increased internal exchange of specialized knowledge.

As a result of this change, the national historic sites and national parks responsibilities of the former three separate Field Units have been merged and will be delivered through two restructured Field Units: Georgian Bay and Eastern Ontario Field Unit and the La Mauricie and Western Quebec Field Unit.

Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 of $6.0 million for 2012-2013, $19.7 million for 2013-2014 and $29.2 million for 2014-2015.

These savings are being achieved through efficiencies and streamlining of operations within Parks Canada while the Agency continues to emphasize quality delivery to Canadians. In addition, the Agency is absorbing salary increases as announced in Budget 2010, as well as inflation.

The following are the major elements being implemented:

• Streamlining and consolidating technical and professional services.
  
  
• Aligning the seasonality of our workforce to reflect visitor usage patterns of Canada’s Parks.

On October 18, 2012, the government announced the navigation season on canals for 2013 to provide a workable schedule going forward while minimizing the impact on the local economies and visitors.

Parks Canada has implemented national human resources strategies to maintain internal networks and focus on attracting, retaining and engaging its workforce. This is aimed at ensuring that Parks Canada’s professional and dedicated workforce continues to provide quality services and programs to Canadians.

Approval by Senior Officials

Approved by:

Statement of Authorities (Unaudited)
(in thousands of dollars)	Fiscal Year 2013-2014
	Total available for use for the year ending March 31, 2014*	Used during the quarter ended June 30, 2013	Year-to-date used at quarter end
- Vote 20 - Program expenditures	583 600	70 162	70 162
- Vote 25 - Payments to the New Parks and Historic Sites Account	500	0	0
Budgetary statutory authorities
- Employee benefit plans	48 593	12 148	12 148
- Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act	111 000	19 690	19 690
Total Budgetary Authorities	743 692	102 000	102 000
* Includes authorities available for use and granted by Parliament at quarter-end ** Total available for use does not reflect measures announced in Budget 2012

Statement of Authorities (Unaudited)
(in thousands of dollars)	Fiscal Year 2012-2013
	Total available for use for the year ending March 31, 2013**	Used during the quarter ended June 30, 2012	Year-to-date used at quarter end
- Vote 20 - Program expenditures	585 879	80 768	80 768
- Vote 25 - Payments to the New Parks and Historic Sites Account	500	0	0
Budgetary statutory authorities
- Employee benefit plans	51 763	12 941	12 941
- Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act	111 000	26 863	26 863
Total Budgetary Authorities	749 142	120 572	120 572
* Includes authorities available for use and granted by Parliament at quarter-end ** Total available for use does not reflect measures announced in Budget 2012

Budgetary Expenditures by Standard Object (Unaudited)
(in thousands of dollars)	Fiscal Year 2013-2014
	Planned expenditures for the year ending March 31, 2014*	Expended during the quarter ended June 30, 2013	Year-to-date used at quarter end
Expenditures:
Personnel	327 860	76 613	76 613
Transportation and communications	19 000	2 404	2 404
Information	13 009	1 206	1 206
Professional and special services	122 121	6 707	6 707
Rentals	19 815	1 819	1 819
Repair and maintenance	97 080	2 655	2 655
Utilities, materials and supplies	47 655	5 727	5 727
Acquisition of land, buildings and works	21 514	210	210
Acquisition of machinery and equipment	31 857	1 941	1 941
Transfer payments	10 093	820	820
Other subsidies and payments	33 688	1 897	1 897
Total gross budgetary expenditures	743 692	102 000	102 000
* Includes authorities available for use and granted by Parliament at quarter-end ** Total available for use does not reflect measures announced in Budget 2012

Budgetary Expenditures by Standard Object (Unaudited)
(in thousands of dollars)	Fiscal Year 2012-2013
	Planned expenditures for the year ending March 31, 2013**	Expended during the quarter ended Jun 30, 2012	Year-to-date used at quarter end
Expenditures:
Personnel	376 286	90 853	90 853
Transportation and communications	19 000	2 041	2 041
Information	12 000	1 547	1 547
Professional and special services	103 036	6 550	6 550
Rentals	15 000	2 233	2 233
Repair and maintenance	94 000	5 781	5 781
Utilities, materials and supplies	44 000	5 781	5 781
Acquisition of land, buildings and works	23 000	367	367
Acquisition of machinery and equipment	23 000	1 983	1 983
Transfer payments	13 820	2 323	2 323
Other subsidies and payments	26 000	1 113	1 113
Total gross budgetary expenditures	749 142	120 572	120 572
* Includes authorities available for use and granted by Parliament at quarter-end ** Total available for use does not reflect measures announced in Budget 2012