Quarterly Financial Report for the Quarter Ended
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© His Majesty the King in Right of Canada, represented by the Minister of Innovation, Science and Industry,
ISSN: 2564-4262
Management Statement for the Quarter Ended
1. Introduction
In this section
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. It has not been subject to an external audit or review. This quarterly report should be read in conjunction with the - Main EstimatesFootnote 1, the Supplementary Estimates (B) and the - Operating Budget Carry Forward.
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 the departmental 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 , 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 money 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
In this section
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 | Quarterly Expenditures |
Year to Date Expenditures |
|
|---|---|---|---|
| Fiscal Year - | 739.4 | 163.2 | 354.7 |
| Fiscal Year - | 601.7 | 96.2 | 237.1 |
Totals may not add up with the Annexes due to rounding.
2.1 Significant Changes in the Authorities (Total Votes Available for Use) between fiscal years - and -
The total votes available for use as at , is $739.4 million, which represents an increase of $137.7 million compared to the same period in the previous year (23%).
| Authorities (in thousands of dollars) | - | - | Variance | % |
|---|---|---|---|---|
| Vote 1 - Operating expenditures | 266,460 | 228,333 | 38,127 | 17% |
| Vote 5 - Capital expenditures | 378,251 | 283,317 | 94,934 | 34% |
| Vote 10 - Grants and contributions | 79,468 | 77,913 | 1,555 | 2% |
| Contributions to employee benefit plans | 15,153 | 12,160 | 2,993 | 25% |
| Proceeds from disposal of surplus Crown assets | 76 | 7 | 69 | 986% |
| Total budgetary authorities | 739,408 | 601,730 | 137,678 | 23% |
Authorizations related to Vote 1 (operating expenditures)
At , authorizations totalled $266.5 million, compared with $228.3 million at , an increase of $38.1 million (17%).
The increase is mainly explained by the following items:
- An increase of $7.9 million for activities related to the Lunar Exploration Accelerator Program (LEAP) - Food Production and Health in Deep Space project.
- An increase of $6.3 million for activities related to the Lunar Exploration Acceleration Program (LEAP) - Lunar Utility Vehicle (LUV) project.
- An increase of $3.4 million related to the amount of operating budget carry forward received in - which is lower than that received in -.
- An increase of $25.9 million for activities related to the International Space Station (ISS) project.
- An increase of $3.8 million in salaries related to compensation received from Treasury Board for collective agreements.
- A decrease of $9.0 million for the CSA's contribution to the government spending refocusing exercise.
Authorizations related to Vote 5 (capital expenditures)
At , authorizations totalled $378.3 million, compared with $283.3 million at , a significant increase of $94.9 million (34%).
The increase is mainly explained by the following items:
- An increase of $93.9 million in activities related to the Canadarm 3 project, related to the different cash flow requirements of the project.
- A decrease of $2.1 million in activities related to the Quantum Encryption and Science Satellite (QEYSSat) project.
- An increase of $33.4 million in activities related to Gateway Station External Robotic Interfaces (GERI).
- A decrease of $2 million to refocus government spending.
- A decrease of $1.3 million for activities related to the International Space Station (ISS) 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.
Authorizations related to Vote 10 (Grants and contributions)
At , authorizations totalled $79.5 million, compared with $77.9 million at , an increase of $1.6 million (2%).
The increase is mainly explained by the following items:
- An increase of $2 million for the Contribution Program under the Canada-European Space Agency (ESA) Cooperation Agreement.
- A decrease of $0.9 million in the overall grants and contributions program to support research, awareness and education in space science and technology, as CSA's contribution to the government's refocusing exercise.
2.2 Significant Changes in the Quarterly and Year-to-Date Expenditures (Votes Used) between fiscal years - and -
Cumulative expenditures as at , are $354.7 million and represent a cumulative increase of $117.6 million over the same period last year. Quarterly expenditures as at , are $163.2 million and represent an increase of $66.9 million from the same quarter last year.
| Expenditures by Vote (in thousands of dollars) |
- | - | Variance | |||
|---|---|---|---|---|---|---|
| Quarterly | Year to date | Quarterly | Year to date | Quarterly | Year to date | |
| Vote 1 - Operating expenditures | 59,776 | 151,556 | 59,049 | 142,387 | 727 | 9,169 |
| Vote 5 - Capital expenditures | 89,304 | 168,645 | 22,099 | 56,249 | 67,205 | 112,396 |
| Vote 10 - Grants and contributions | 11,051 | 25,402 | 12,039 | 29,345 | (988) | (3,943) |
| Contributions to employee benefit plans | 3,039 | 9,116 | 3,040 | 9,120 | (1) | (4) |
| Spending of proceeds from disposal of surplus Crown assets | - | - | - | - | - | - |
| Total budgetary expenditures by Vote | 163,170 | 354,719 | 96,227 | 237,101 | 66,943 | 117,618 |
Expenditures related to Vote 1 (operating expenditures)
The increase of $0.7 million in quarterly expenses (1%) and of $9.2 million in year-to-date expenditures (6%) are mainly due to variations in the payment schedule for several projects such as the Canadian lunar rover mission. The increase is also explained by higher salary expenses following an increase in the CSA's workforce and the ratification of collective agreements.
Expenditures related to Vote 5 (capital expenditures)
The increase of $67.2 million in quarterly expenses (304%) and of $112.4 million in year-to-date expenditures (200%) were mainly due to variations in the payment schedule for the Canadarm3 project.
Expenditures related to Vote 10 (Grants and contributions)
The decrease of $1 million in quarterly expenses (-8%) and of 4 million in year-to-date expenditures (-13%) are mainly due to variations in the payment schedule of the overall program of grants and contributions supporting research, outreach and education in space science and technology, and payments to the European Space Agency (ESA).
| Expenditures by Standard Object (in thousands of dollars) | - | - | Variance | |||
|---|---|---|---|---|---|---|
| Quarterly | Year to date | Quarterly | Year to date | Quarterly | Year to date | |
| Personnel | 32,122 | 92,063 | 29,861 | 80,578 | 2,261 | 11,485 |
| Transportation and communications | 1,519 | 3,714 | 1,569 | 4,613 | (50) | (899) |
| Information | 579 | 1,069 | 484 | 1,273 | 95 | (204) |
| Professional and special services | 112,707 | 217,164 | 45,528 | 106,849 | 67,179 | 110,315 |
| Rentals | 1,959 | 3,333 | 1,783 | 3,182 | 176 | 151 |
| Repair and maintenance | 1,599 | 6,678 | 2,576 | 4,230 | (977) | 2,448 |
| Utilities, materials and supplies | 444 | 1,039 | 421 | 1,178 | 23 | (139) |
| Acquisition of land, buildings and works | - | - | - | - | - | - |
| Acquisition of machinery and equipment | 1,168 | 2,148 | 1,931 | 3,831 | (763) | (1,683) |
| Transfer payments | 11,051 | 25,402 | 12,039 | 29,345 | (988) | (3,943) |
| Other subsidies and payments | 22 | 2,109 | 35 | 2,022 | (13) | 87 |
| Total budgetary expenditures by Standard Object | 163,170 | 354,719 | 96,227 | 237,101 | 66,943 | 117,618 |
Total CSA expenses reported in the 3rd quarter of - amounted to $163.2 million, compared with $96.2 million for the same period last year. This represents a year-on-year increase of $66.9 million (70%).
Cumulative expenditures as at , totalled $354.7 million, and represent a cumulative increase of $237.1 million over the same period last year. This represents an increase of $117.6 million (50%) this year.
Significant variances, by standard object, are as follows:
- Personnel
-
The increase of $2.3 million in quarterly expenses (8%) and of $11.5 million in year-to-date expenditures (14%) are mainly due to higher salary expenses following an increase in the CSA's workforce and the ratification of collective agreements.
- Professional and special services
-
The increase of $67.2 million in quarterly expenses (148%) and of $110.3 million in year-to-date expenditures (103%) are mainly due to variations in the payment schedule for the Canadarm3 project.
- Repair and maintenance
-
The decrease of $1 million in quarterly expenses (-38%) and an increase of $2.4 million in year-to-date expenditures (58%) are mainly due to major work carried out at our headquarters, the John H. Chapman Space Center.
- Transfer payments
-
The decrease of $1.0 million in quarterly expenses (-8%) and of 3.9 million in year-to-date expenditures (-13%) are mainly due to variations in the payment schedule of the overall program of grants and contributions supporting research, outreach and education in space science and technology, and payments to the European Space Agency (ESA).
3. Risks and Uncertainties
The year-to-date expenditures for the 3rd quarter of - represent 48% of the planned expenditures for the year ending , whereas 75% of the fiscal year has passed. The level of expenditure is higher than it was in the - fiscal year (39%) and also higher than the - fiscal year (41%). The current situation presents no concerns. 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 space-faring nations, using innovative 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. Also, the possibility of a disruption of services or unauthorized disclosure of information resulting from a cybersecurity event poses an additional risk to the CSA's operations. These elements translate into 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, as well as cybersecurity risk mitigation measures. 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 been migrated to the Pay Centre, the CSA continues to offer on-site compensation services. The compensation team, whose 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 have been no significant changes to operations, personnel and programs during the third quarter of -.
Approval by Senior Officials
Approved by,
The original version was signed by Lisa Campbell, President, in Longueuil, Quebec, on .
The original version was signed by Josée Saint-Marseille, Acting Vice President, Corporate Strategy and Innovation and Chief Financial Officer, in Longueuil, Quebec, on .
Annex 1
| Authorities | Fiscal Year - | Fiscal Year - | ||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending Footnote 2 $ |
Used during the quarter ended $ |
Year to date used at quarter-end $ |
Total available for use for the year ending Footnote 2 $ |
Used during the quarter ended $ |
Year to date used at quarter-end $ |
|
| Vote 1: Operating expenditures | 266,460 | 59,776 | 151,556 | 228,333 | 59,049 | 142,387 |
| Vote 5: Capital expenditures | 378,251 | 89,304 | 168,645 | 283,317 | 22,099 | 56,249 |
| Vote 10: Grants and contributions | 79,468 | 11,051 | 25,402 | 77,913 | 12,039 | 29,345 |
| Contributions to employee benefit plans |
15,153 | 3,039 | 9,116 | 12,160 | 3,040 | 9,120 |
| Spending of proceeds from the disposal of surplus Crown assets |
76 | - | - | 7 | - | - |
| Total budgetary authorities | 739,408 | 163,170 | 354,719 | 601,730 | 96,227 | 237,101 |
Annex 2
| Expenditures: | Fiscal Year - | Fiscal Year - | ||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending Footnote 2 $ |
Used during the quarter ended $ |
Year to date used at quarter-end $ |
Planned expenditures for the year ending Footnote 2 $ |
Used during the quarter ended $ |
Year to date used at quarter-end $ |
|
| Personnel | 122,275 | 32,122 | 92,063 | 100,089 | 29,861 | 80,578 |
| Transportation and communications | 8,866 | 1,519 | 3,714 | 9,721 | 1,569 | 4,613 |
| Information | 2,246 | 579 | 1,069 | 2,513 | 484 | 1,273 |
| Professional and special services | 503,080 | 112,707 | 217,164 | 380,343 | 45,528 | 106,849 |
| Rentals | 4,084 | 1,959 | 3,333 | 5,052 | 1,783 | 3,182 |
| Repair and maintenance | 8,750 | 1,599 | 6,678 | 9,750 | 2,576 | 4,230 |
| Utilities, materials and supplies | 1,556 | 444 | 1,039 | 2,330 | 421 | 1,178 |
| Acquisition of land, buildings and works | 269 | - | - | 568 | - | - |
| Acquisition of machinery and equipment | 6,253 | 1,168 | 2,148 | 10,392 | 1,931 | 3,831 |
| Transfer payments | 79,468 | 11,051 | 25,402 | 77,913 | 12,039 | 29,345 |
| Other subsidies and payments | 2,561 | 22 | 2,109 | 3,059 | 35 | 2,022 |
| Total budgetary expenditures | 739,408 | 163,170 | 354,719 | 601,730 | 96,227 | 237,101 |