Quarterly financial report for the quarter ended September 30, 2020
This quarterly 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 report should be read in conjunction with the Main Estimates, the Supplementary Estimates and the previous Quarterly Financial Reports.
A summary description of the Parks Canada Agency’s programs can be found in Part II of the Main Estimates, and a detailed description in Part III – Departmental Plans.
This quarterly report has not been subject to an external audit. However, it has been reviewed by the Agency’s Audit Committee.
1.1 Basis of presentation
This quarterly 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 A for the 2020-21 fiscal year. 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 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.
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.
2. Highlights of fiscal quarter and fiscal year to date results
2.1 Statement of Authorities (Table 1)
Authorities available for use
This quarterly report reflects the funding available for use from the 2020-21 Main Estimates, the 2020-21 Supplementary Estimates A and the 2019-20 unused spending authority Footnote 1. The authorities at the same time last year consisted of 2019-20 Main Estimates, authorities received via allocation from Treasury Board Vote 5 - Government Contingencies, and the 2018-19 unused spending authority.
As per Table 1 (Statement of authorities), at September 30, 2020, Parks Canada’s total authorities available for use for the year ending March 31, 2021, are $771.7 million or 36% lower when compared to the same quarter of the previous year (from $2,156.3 million to $1,384.6 million). To note, a reprofile of $502.6 million in the 2019-20 total autorithies of $2,156.3 million was approved afterwards and the related amount was moved from 2019-20 into 2020-21 ($362.6 million) and 2021-22 ($140 million) in order to align the remaining authorities with the multi-year forecasts. Therefore, the net variance between the authorities is $269.1 million or 16% lower. This decrease in authorities is primarily due to the following factors:
- A decrease of $77.4 million in the authorities available for use is due to the reduced supply of the Main Estimates because of the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply. Parks Canada is expected to receive full supply for the 2020-21 Main Estimates in December 2020.
- A net increase in spending authorities related to infrastructure investments -$80.1 million (decrease of $422.5 million adjusted by a reprofile of $502.6 million);
- A decrease in unused spending authorities in 2019-2020 as compared to 2018-2019 - $287.1 million;
- A decrease in spending authorities related to the Youth Employment and Skills Strategy (YESS) - $7.0 million.
In May 2020, Parks Canada received approval from the Treasury Board Secretariat for funding to partially compensate for its expected revenue losses in the first six months of 2020-21 due to the COVID-19 outbreak. This includes only forgone revenues due to a decline in visitation following the temporary suspension of services at Parks Canada sites and gradual and partial reopening, as well as remission of 25% of the annual payments on non-residential leases and licences of occupation for elibigle commercial businesses located in places and lands administered by the Agency.
Authorities used during the quarter
In the second quarter of 2020-21, total net budgetary expenditures were $374.4 million compared to $403.0 million reported for the same period in 2019-20, resulting in a decrease of $28.6 million or 7 percent. The decrease in authorities used during the quarter is primarily related to a decrease in the spending related to the infrastructure investment program and to the impacts of the COVID-19 pandemic on the Agency’s operations.
2.2 Budgetary expenditures by standard object (Table 2)
Planned by standard object
Total planned expenditures for the year ending March 31, 2021, are $771.7 million or 36 percent lower compared to the previous year. This variance is primarily due to a reprofile of $502.6 million from 2019-20 into 2020-21 and 2021-22 that has been approved in order to align the remaining authorities with the multi-year forecasts after the second quarter of 2019-2020. Therefore, the variance between the planned expenditures is a decrease of $269.1 million or 16% lower. The remaing variance is primarily due to the reduced supply of the Main Estimates because of the COVID-19 pandemic, as well as a decrease in unused spending authorities from the previous fiscal year.
Expended by standard object
As per Table 2 (Budgetary expenditures by standard object), the total expended in the second quarter ending September 30, 2020, is $28.6 million or 7 percent lower compared to the previous year. Unlike the first quarter when the Agency faced a marked slowdown in its operational activities due to the temporary suspension of visitor services at all Parks Canada sites in response to the pandemic, the slight decrease in the second quarter noticed across all standard objects is explained by the gradual resumption of the Agency’s operations while respecting the guidance of health authorities for physical distancing.
3. Risks and uncertainties
The Agency undertakes a corporate risk assessment every year to support programs, priority setting and resource allocation. The risk assessment identifies key corporate risks that have the greatest impact on the Agency's ability to deliver its Core Responsibility and achieve Departmental Results. The Agency has identified the following key corporate risks for 2020-21:
Environmental forces adaptation and response:
Due to the magnitude and rapid pace of environmental changes, including climate change, there is a risk that the integrity of ecosystems, cultural resources and infrastructure cannot be maintained or improved which may lead to Parks Canada being unable to deliver its mandate.
Relationships with Indigenous peoples:
If Parks Canada does not allocate the necessary time, effort and investment to build and maintain relationships with Indigenous peoples, there is a risk that the Agency may not be able to fulfill its obligations and deliver on its programs and services, which may result in damaged reputation, increased litigation and challenges meeting conservation targets.
Built asset condition and long-term sustainability:
Due to aging infrastructure, inadequate level of recapitalization and maintenance, climate change and inflationary impacts, there is a risk that Parks Canada will not be able to maintain a sustainable asset portfolio which may result in compromised public safety, loss of irreplaceable cultural heritage, and damage to the Agency’s reputation.
If the Agency does not respond to changing socio-economic conditions and other market influences, there is a risk that Parks Canada’s programs and services may not meet the expectations of Canadians which may lead to a decrease in Agency relevance as measured by a decrease in tourism market share and visitation.
If the Agency does not modernize its corporate and internal services, there is a risk that Parks Canada may not have the capacity, business processes and tools to effectively and efficiently support service delivery and meet government management accountability expectations.
Parks Canada’s priority, as it manages through the pandemic, is the health and safety of its employees, visitors and all Canadians. Parks Canada has and will continue to follow the advice and guidance of public health experts in all decisions; from initial closure of our offices and suspension of visitor access and services and field operations, to the phased resumption of these visitor services and operations. Parks Canada is also taking steps to mitigate the financial impact of the pandemic on holders of leases and licences of occupation.
The pandemic’s has impacted the Agency’s financial situation, particularly its ability to generate revenue, which represents 25% of its on-going operational budget. Funding has already been secured to partially compensate the Agency for revenue shortfalls it experienced for the period of April 1st to September 30, 2020. The Agency is continuing to monitor the potential risk of revenue shortfalls for the last six months of this year and future years and is working with central agencies on strategies to mitigate this risk.
The Agency will also continue to work with Indigenous partners, lessees and operators, local communities and provincial and territorial governments as it manages through the pandemic.
4. Significant changes in relation to operations, personnel and programs
Following the advice of public health experts and taking steps to support the Government of Canada’s efforts to limit the spread of COVID-19, Parks Canada temporarily suspended all visitor services in all national parks, national historic sites and national marine conservation areas across the country effective on Thursday, March 19, 2020. Gradual resumption of some operations at certain national parks, national historic sites, historic waterways, and national marine conservation areas began on June 1, 2020.
5. Approval by senior officials
President & Chief Executive Officer,
November 18, 2020
November 17, 2020
Parks Canada Agency
For the quarter ended September 30, 2020
Statement of Authorities - Table 1
|Fiscal Year 2020-21||(in thousands of dollars)||Total available for use for the year ending March 31, 2021 Footnote *||Used during the quarter ended September 30, 2020||Year to date used at quarter-end|
|Vote 1 - Program expenditures||1,153,026||324,206||492,432|
|Vote 5 - Payments to the New Parks and Historic Sites Account||7,494||0||0|
|Statutory - Contributions to employee benefit plans||54,063||12,222||24,444|
|Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act||169,993||38,029||42,640|
|Total budgetary authorities||1,384,576||374,457||559,516|
|Fiscal Year 2019-20||(in thousands of dollars)||Total available for use for the year ending March 31, 2020 Footnote *||Used during the quarter ended September 30, 2019||Year to date used at quarter-end|
|Vote 1 - Program expenditures||1,914,398||328,281||495,388|
|Vote 5 - Payments to the New Parks and Historic Sites Account||13,423||0||0|
|Statutory - Contributions to employee benefit plans||53,221||13,305||26,610|
|Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act||175,210||61,443||97,337|
|Total budgetary authorities||2,156,252||403,029||619,335|
Parks Canada Agency
For the quarter ended September 30, 2020
Budgetary Expenditures by Standard Object - Table 2
|Fiscal Year 2020-21||(in thousands of dollars)||Planned expenditures for the year ending March 31, 2021 Footnote *||Expended during the quarter ended September 30, 2020||Year to date used at quarter-end|
|Transportation and communications||35,315||1,607||2,581|
|Professional and special services||248,704||40,221||59,792|
|Repair and maintenance||68,469||7,091||11,021|
|Utilities, materials and supplies||111,290||11,148||16,573|
|Acquisition of land, buildings and works||372,163||156,481||195,058|
|Acquisition of machinery and equipment||46,481||3,534||6,931|
|Public debt charges||0||24||49|
|Other subsidies and payments||27,712||10,802||12,014|
|Total budgetary expenditures||1,384,576||374,457||559,516|
|Fiscal Year 2019-20||(in thousands of dollars)||Planned expenditures for the year ending March 31, 2020, Footnote *||Expended during the quarter ended September 30, 2019||Year to date used at quarter-end|
|Transportation and communications||53,990||5,845||10,394|
|Professional and special services||478,309||45,058||64,005|
|Repair and maintenance||73,913||6,089||10,297|
|Utilities, materials and supplies||113,102||14,899||22,807|
|Acquisition of land, buildings and works||852,127||160,960||215,239|
|Acquisition of machinery and equipment||52,410||7,718||10,931|
|Public debt charges||0||38||59|
|Other subsidies and payments||32,740||13,255||14,766|
|Total budgetary expenditures||2,156,252||403,029||619,335|
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