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- Quarterly Financial Report for the Quarter Ended

Canadian Space Agency
-

Quarterly Financial Report
For the Quarter Ended

Management Statement
for the Quarter Ended

1. 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 should be read in conjunction with the - Main EstimatesFootnote 1.

1.1 Mandate and Program Activities

The Canadian Space Agency's (CSA) mandate is to promote the peaceful use and development of space, to advance the knowledge of space through science and to ensure that space science and technologies provide social and economic benefits for Canadians.

More information is available on the CSA's mandate and on departemental results framework in the - Departmental PlanFootnote 1.

1.2 Basis of Presentation

This quarterly financial report (QFR) has been prepared by management using an expenditure basis of accounting. The Statement of Authorities annexed to this report includes the CSA's spending authorities granted by Parliament and those used by the CSA, consistent with the Main Estimates and Supplementary estimates voted as at June 30 for fiscal year - compared to -. This QFR 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 CSA uses the full accrual method of accounting to prepare and present its annual financial statements, which are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis, which is, a partial accrual method of accounting. The partial accrual method of accounting includes disbursements as well as some accruals for salaries and salary allowances.

This QFR report has not been subject to an external audit. However, it was reviewed by the members of the CSA Audit Committee, who are satisfied with its presentation and content.

2. Highlights of the Quarterly Financial Results

This section highlights the significant elements that contributed to the changes to the authorities available for the fiscal year, as well as to the quarterly and year-to-date expenditures for the quarter ended .

The following graph provides an overview of the variations in the available authorities and the expenditures. Additional details on these variations are provided in sections 2.1 and 2.2 as well as in the appended annexes.

Authorities available for use and expenditures as at June 30 (in millions of dollars)
Authorities Quarterly
Expenditures
Year to Date
Expenditures
Fiscal Year - 329.0 58.4 58.4
Fiscal Year - 348.9 41.9 41.9

Totals may not add up due to rounding.

2.1 Significant Changes in Authorities (Total Vote Available for Use) between fiscal - and -

The total votes available for use as at is $329.0 million, which represents a decrease of $19.9 million compared to the same period in the previous year.

Authorities (in thousands of dollars) - - Variance %
Vote 1 - Operating expenditures 181,394 170,770 10,624 6%
Vote 5 - Capital expenditures 78,547 112,229 (33,682) (30%)
Vote 10 - Grants and contributions 58,696 56,411 2,285 4%
Contributions to employee benefit plans 10,312 9,463 849 9%
Spending of proceeds from the disposal of surplus Crown assets 2 20 (18) (89%)
Total budgetary authorities 328,951 348,893 (19,942) (6%)

The increase of $10.6 million in Vote 1 - Operating expenditures is mainly explained by the following items:

  • An increase of $9.4 million as a result of additional funding received to extend Canada's participation in the International Space Station (ISS) mission from to .
  • An increase of $1.1 million as a result of funding received from Treasury Board for collective agreements ratification.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

The decrease of $33.7 million in Vote 5 - Capital expenditures is mainly explained by the following items:

  • A decrease of $27.4 million due to different cash flow requirements for Radarsat Constellation Mission (RCM) project related activities.
  • A decrease of $3.9 million due to different cash flow requirements for Life Science Research System (LSRS) project related activities.
  • A decrease of $2.6 million due to different cash flow requirements for Surface Water & Ocean Topography (SWOT-C) project related activities.
  • An increase of $7.8 million due to additional funding obtained for Quantum Encryption and Science Satellite (QEYSSat) project.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

The increase of $2.3 million in Vote 10 - Grants and Contributions expenditures is mainly explained by the following items:

  • An increase of $2.6 million due to different anticipated cash flow requirements for the Contribution Program under the Canada-European Space Agency (ESA) Cooperation Agreement.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

2.2 Significant Changes in Quarterly and Year-to-Date Expenditures (Votes Used) between fiscal - and -

The quarterly and year-to-date expenditures for the quarter ended are of $58.4 million which represents a quarterly and a year to date increase of $16.5 million compared to the same period in the previous year.

Expenditures by Vote as at June 30
Expenditures by Vote
(in thousands of dollars)
- - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Vote 1 - Operating expenditures 26,166 26,166 23,496 23,496 2,670 2,670
Vote 5 - Capital expenditures 21,750 21,750 2,692 2,692 19,058 19,058
Vote 10 - Grants and contributions 7,920 7,920 13,340 13,340 (5,420) (5,420)
Contributions to employee benefit plans 2,578 2,578 2,366 2,366 212 212
Spending of proceeds from the disposal of surplus Crown assets - - 6 6 (6) (6)
Total budgetary expenditures by Vote 58,414 58,414 41,900 41,900 16,514 16,514

The increase of $2.7 million in the quarterly and year to date expenditures in Vote 1 – Operating expenditures, is mainly explained by the following:

  • The variations in the payment schedules for carrying out contractual activities for the maintenance and operations of the International Space Station (ISS).

The increase of $19.1 million in the quarterly and year to date expenditures in Vote 5 - Capital expenditures, is mainly explained by the following:

  • The variations in the payment schedules for the RADARSAT Constellation Mission (RCM).

The decrease of $5.4 million in the quarterly and year to date expenditures in Vote 10 – Grants and contributions, is mainly explained by the following:

  • The variations in the payment schedules to the European Space Agency (ESA).
Expenditures by Standard Object as at June 30
Expenditures by Standard Object (in thousands of dollars) - - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Personnel 19,797 19,797 18,882 18,882 915 915
Transportation and communications 983 983 796 796 187 187
Information 432 432 561 561 (129) (129)
Professional and special services 8,382 8,382 4,304 4,304 4,078 4,078
Rentals 255 255 285 285 (30) (30)
Repair and maintenance 222 222 609 609 (387) (387)
Utilities, materials and supplies 763 763 604 604 159 159
Acquisition of land, buildings and works - - - - - -
Acquisition of machinery and equipment 19,655 19,655 554 554 19,101 19,101
Transfer payments 7,920 7,920 13,352 13,352 (5,432) (5,432)
Other subsidies and payment 5 5 1,953 1,953 (1,948) (1,948)
Total budgetary expenditures by Standard Object 58,414 58,414 41,900 41,900 16,514 16,514

The $4.1 million increase in the quarterly expenditures and year to date expenditures for the Professional and special services standard object is primarily due to:

  • The variations in the payment schedules for carrying out contractual activities for the maintenance and operations of the International Space Station (ISS).

The $19.1 million increase in the quarterly expenditures and year to date expenditures for the Acquisition of machinery and equipment standard object is primarily due to:

  • The variations in the payment schedules for the RADARSAT Constellation Mission (RCM).

The $5.4 million decrease in the quarterly and year to date expenditures for the Transfer payments standard object is primarily due to:

  • The variations in the payment schedules to the European Space Agency (ESA).

The $1.9 million decrease in the quarterly and year to date expenditures for the Other subsidies and payments standard object is primarily due to:

  • A variation in the payment schedules for the Payments in Lieu of Taxes Program (PILT).

3. Risks and Uncertainties

The year-to-date expenditures for the 1st quarter of - represent 18% of the authorities whereas 25% of the fiscal year has passed. The level of expenditures is slightly higher than it was in the - fiscal year (12%) and is similar to the expenditure level in - (19%) which represents no concerns. The situation concerning the cumulative expenditures will be restored at year-end when the accruals are recorded, in accordance with the full accrual method of accounting, combined with the deferral of budgets to the following year.

The specific nature of the Canadian Space Program confronts the CSA with issues related to the advanced technologies used in space missions as well as the international aspect of some projects. For Canada, activities in space must be carried out in partnership with other spacefaring nations, using innovative and cost-efficient technologies. The international nature and technical challenges associated with developing and implementing disruptive technologies, in collaboration with multiple partners, generate risks in the delivery of projects, and, therefore financial risks associated with the use of funds such as the deferral of funds and costs increases.

Risks also arise from the Canada / European Space Agency (ESA) Cooperation Agreement. They include variations in amounts payable resulting from changes in the Gross National Product (GNP) statistics, the fluctuation of the Canadian dollar against the euro (exchange rate), inflation and the enforcement of the ESA's industrial policy. These risks have an impact on both costs and cash flow profiles.

To mitigate these risks, the CSA regularly reviews its project portfolio, activity plans, schedules and financial management strategies to adjust to changes brought on by the space programs of its key partners (National Aeronautics and Space Administration (NASA), ESA and other space agencies). In addition, rigorous project management practices are in place. These initiatives allow the CSA to track and report on the progress of its commitments, to assess the effectiveness of its work, and to align its resources with its priorities.

Furthermore, the CSA manages its financial risks and uncertainties related to Phoenix by adopting risk mitigating strategies. There are a number of actions that the CSA has taken to date to help stabilize the pay system, and to ensure that the employees are being paid accurately and on time. As one of the departments whose accounts have not yet been migrated to the Pay Centre, the CSA continues to offer on-site compensation services. The compensation team, who's size fluctuates to meet demand, monitors closely for payroll inaccuracies and communicates directly with employees to provide clarifications and to take, when needed, swift actions to rectify issues. The team also participates actively in various working groups and other forums led by Treasury Board Secretariat (TBS) and/or Public Services and Procurement Canada (PSPC). Beyond this, the staff in Finance regularly performs salary reconciliations to monitor and correct expense variances.

4. Significant Changes in Relation to Operations, Personnel and Programs

There were no significant changes in operations, personnel and programs, in the first quarter of -.

Approval by Senior Officials

Approved by,

The original version was signed by Sylvain Laporte, President, in Longueuil, Quebec, on .

The original version was signed by Jean-Claude Piedboeuf, B. Ing., Ph.D., Chief Financial Officer, in Longueuil, Quebec, on .

Annex 1

Canadian Space Agency
Quarterly Financial Report
For the quarter ended
Statement of Authorities
(unaudited)
(in thousands of dollars)
Fiscal Year - Fiscal Year -
Total available for use for the year ending

Table note 2
$
Used during the quarter ended

$
Year to date
used at
quarter-end
$
Total available for use for the year ending

Table note 2
$
Used during the quarter ended

$
Year to date
used at
quarter-end
$
Vote 1: Operating expenditures 181,394 26,166 26,166 170,770 23,496 23,496
Vote 5: Capital expenditures 78,547 21,750 21,750 112,229 2,692 2,692
Vote 10: Grants and contributions 58,696 7,920 7,920 56,411 13,340 13,340
Contributions to employee benefit plans 10,312 2,578 2,578 9,463 2,366 2,366
Spending of proceeds from the disposal of surplus Crown assets 2 - - 20 6 6
Total budgetary authorities 328,951 58,414 58,414 348,893 41,900 41,900

Annex 2

Canadian Space Agency
Quarterly Financial Report
For the quarter ended
Departmental budgetary expenditures by Standard Object
(unaudited)
(in thousands of dollars)
Fiscal Year - Fiscal Year -
Planned expenditures for the year ending

$
Expended
during the
quarter ended

$
Year to date
used at
quarter-end
$
Planned expenditures for the year ending

$
Expended
during the
quarter ended
$
Year to date
used at
quarter-end
$
Expenditures:
Personnel 77,708 19,797 19,797 71,722 18,882 18,882
Transportation and communications 4,281 983 983 5,180 796 796
Information 1,824 432 432 3,199 561 561
Professional and special services 144,238 8,382 8,382 178,034 4,304 4,304
Rentals 2,983 255 255 1,841 285 285
Repair and maintenance 3,379 222 222 1,441 609 609
Utilities, materials and supplies 1,702 763 763 1,742 604 604
Acquisition of land, buildings and works 650 - - 50 - -
Acquisition of machinery and equipment 30,443 19,655 19,655 22,538 554 554
Transfer payments 58,696 7,920 7,920 56,411 13,352 13,352
Other subsidies and payments 3,047 5 5 6,735 1,953 1,953
Total budgetary expenditures 328,951 58,414 58,414 348,893 41,900 41,900
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