Quarterly financial report for the quarter ended December 31, 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 and B 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, the 2020-21 Supplementary Estimates B, and the 2019-20 unused spending authorityFootnote 1. The authorities at the same time last year consisted of 2019-20 Main Estimates, the 2019-20 Supplementary Estimates A, 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 December 31, 2020, Parks Canada’s total authorities available for use for the year ending March 31, 2021, are $669.6 million or 31% lower when compared to the same quarter of the previous year (from $2,177.6 million to $1,508.0 million). To note, a reprofile of $502.6 million in the 2019-20 total authorities of $2,177.6 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 $167.0 million or 10% lower. This net variance in authorities is primarily due to the following factors:
- A decrease in unused spending authorities in 2019-20 (included in the opening balance of the 2020-21 authorities) as compared to 2018-19 (included in the opening balance of the 2019-20 authorities) - $287.1 million; this decrease impacted mainly the spending authorities related to infrastructure investments with a decrease of $228.8 million out of the decrease of $287.1 million.
- A decrease in spending authorities related to the Youth Employment and Skills Strategy (YESS) - $7.0 million;
- 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).
- An increase of $35.4 million in spending authorities related to revenue replacement funding to address revenue decreases due to COVID-19 impacts such as reduced visitation. This funding allocation, which is an up to amount depending on actual revenue decreases, was required in order to sustain operations the period of April 1 to September 30, 2020.
In December 2020, Parks Canada received a second approval from the Treasury Board Secretariat for funding to partially address its expected revenue losses for the last six months of 2020-21 due to COVID-19 impacts. This approval covers only forgone revenues due to a decline in visitation following the temporary suspension of services at Parks Canada sites.
Authorities used during the quarter
In the third quarter of 2020-21, total net budgetary expenditures were $311.9 million compared to $404.3 million reported for the same period in 2019-20, resulting in a decrease of $92.4 million or 23 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 $669.6 million or 31 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 third quarter of 2019-20. Therefore, the variance between the planned expenditures is a decrease of $167.0 million or 10% lower. The remaining variance is primarily due to a decrease in unused spending authorities from the previous fiscal year, as well as a decrease in spending authorities related to the Youth Employment and Skills Strategy (YESS) offset by a second approval from the Treasury Board Secretariat for funding to partially compensate for the Agency’s expected revenue decreases for the first six months of 2020-21 due to the COVID-19 outbreak.
Expended by standard object
As per Table 2 (Budgetary expenditures by standard object), the total expended in the third quarter ending December 31, 2020, is $92.4 million or 23 percent lower compared to the previous year. The overall decrease is explained by the adapted Agency’s operations whereby not all sites could be opened in order to respect the guidance of health authorities such as physical distancing. The following are areas where most significant decreases were noticed:
Compared to the same quarter last year, expenditures in Acquisition of land, buildings and work have decreased by $42.1 million or 24% and in Professional and special services have decreased by $22.5 million or 39%. These decreases in the third quarter are primarily due to the completion of several infrastructure investments projects in 2019-20. Also, with varying levels of provincial/territorial safety practices and restrictions in place due to the COVID-19, infrastructure projects experienced delays. All construction activities were subject to change due to the evolving situation related to COVID-19.
In addition, transfer payments have also decreased by $19.5 million or 75% compared to the same quarter of last year. This decrease is primarily due to grant payments in 2019-20 for the establishment and development of Thaidene Nëné National Park Reserve and Tallurutiup Imanga National Marine Conservation Area. Mainly, the pandemic has caused delays that prevents the recipients to implement projects, financed by transfer payments, at the same pace as planned.
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 continues to follow public health measures (social distancing, restriction on indoor and group activities, travel restrictions) and to monitor efforts to flatten the curve and progress regarding vaccinations with a view to being ready, as appropriate, to adjust 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 has impacted the Agency’s financial situation, particularly its ability to generate revenue, which represents 25% of its on-going operational budget. Funding has been secured to partially compensate the Agency for revenue shortfalls it experienced for this current fiscal year. The Agency is continuing to monitor the potential risk of revenue decreases for the remaining of the fiscal year and is working with central agencies on strategies to mitigate this risk for 2021-22.
The Agency is and will 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 historic sites, national parks, and national marine conservation areas across the country effective on Thursday, March 19, 2020. Gradual resumption of some operations at certain national historic sites, national parks, historic waterways, and national marine conservation areas began on June 1, 2020. The pandemic continues to have impacts on Parks Canda’s operations and the Agency continues to manage COVID-19 risks for visitors and employees, and to address uncertainty by continually adapting visitor services and operations so that Canadians can safely enjoy the wellness benefits of access to the outdoors.
Stephen Van Dine, Vice President, Strategic Planning & Investment, has left the Parks Canada Agency during the month of October 2020. David Millar occupied the position on an interim basis. On December 8, 2020, it was announced that Rima Hamoui was appointed to the position of Vice President, Strategic Policy and Planning, effective January 4, 2021. Effective the same date, the Strategic Policy & Investment Directorate has been renamed the Strategic Policy and Planning Directorate.
5. Approval by senior officials
President & Chief Executive Officer,
February 19, 2021
February 16, 2021
Parks Canada Agency
For the quarter ended December 31, 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 December 31, 2020||Year to date used at quarter-end|
|Vote 1 - Program expenditures||1,273,890||273,752||766,184|
|Vote 5 - Payments to the New Parks and Historic Sites Account||9,992||0||0|
|Statutory - Contributions to employee benefit plans||54,153||12,222||36,666|
|Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act||169,993||25,907||68,547|
|Total budgetary authorities||1,508,028||311,881||871,397|
|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 December 31, 2019||Year to date used at quarter-end|
|Vote 1 - Program expenditures||1,935,067||356,043||851,431|
|Vote 5 - Payments to the New Parks and Historic Sites Account||13,423||0||0|
|Statutory - Contributions to employee benefit plans||53,927||13,305||39,915|
|Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act||175,210||34,976||132,313|
|Total budgetary authorities||2,177,627||404,324||1,023,659|
Parks Canada Agency
For the quarter ended December 31, 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 December 31, 2020||Year to date used at quarter-end|
|Transportation and communications||37,109||2,791||5,372|
|Professional and special services||268,385||35,808||95,600|
|Repair and maintenance||71,206||7,926||18,947|
|Utilities, materials and supplies||115,889||10,786||27,359|
|Acquisition of land, buildings and works||419,434||131,101||326,159|
|Acquisition of machinery and equipment||49,248||5,084||12,015|
|Public debt charges||0||23||72|
|Other subsidies and payments||30,229||1,312||13,326|
|Total budgetary expenditures||1,508,028||311,881||871,397|
|Fiscal Year 2019-20||(in thousands of dollars)||Planned expenditures for the year ending March 31, 2020, Footnote *||Expended during the quarter ended December 31, 2019||Year to date used at quarter-end|
|Transportation and communications||54,421||6,496||16.890|
|Professional and special services||478,917||58,286||122,291|
|Repair and maintenance||74,104||6,009||16,306|
|Utilities, materials and supplies||113,628||14,078||36,885|
|Acquisition of land, buildings and works||855,299||173,229||388,468|
|Acquisition of machinery and equipment||53,085||7,116||18,047|
|Public debt charges||0||27||86|
|Other subsidies and payments||32,740||(216)||14,550|
|Total budgetary expenditures||2,177,627||404,324||1,023,659|
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