ARCHIVED - Quarterly Financial Report for the quarter ended June 30, 2015

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Table of contents

  1. Introduction
  2. Highlights of fiscal quarter and fiscal Year to Date results
  3. Risks and uncertainties
  4. Significant changes to operations, personnel and programs
  5. Budget 2012 implementation

1. Introduction

This Quarterly Financial Report (QFR) should be read in conjunction with:

It has been prepared by management as required under section 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board Accounting Standard 1.3. It has not been subject to an external audit or review.

1.1 Authority, mandate and program alignment architecture

Public Works and Government Services Canada (PWGSC) plays an important role in the daily operations of the Government of Canada. It supports federal departments and agencies in the achievement of their mandated objectives as their central purchasing agent, real property manager, linguistic authority, treasurer, accountant, and pay and pension administrator. The Department's vision is to excel in government operations, and its strategic outcome and mission are to deliver high-quality, central programs and services that ensure sound stewardship on behalf of Canadians and meet the program needs of federal institutions.

The Department, founded in 1841, was instrumental in the building of our nation's canals, roads and bridges, the Houses of Parliament, post offices and federal buildings across the country. Today, PWGSC has evolved into a sophisticated operational arm of government that employs approximately 12,000 permanent employees working in locations across Canada, with its headquarters in the National Capital Area. PWGSC:

Further details on PWGSC's authority, mandate and programs may be found in the 2015–16 Report on Plans and Priorities.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting also known as modified cash accounting, and a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. The accompanying Statement of Authorities compares PWGSC's spending authorities granted by Parliament to those used by the Department. Information in the Statement of Authorities is consistent with that in the Main Estimates.

The authority of Parliament is required before monies can be spent by the government. Approvals are given in the form of annually approved limits through appropriation acts or through legislation granting statutory spending authority for specific purposes.

PWGSC uses the accrual method of accounting to prepare and present its annual Consolidated Departmental Financial Statements (DFS) that are published in the Departmental Performance Report. However, the spending authorities voted by Parliament remain on a modified cash basis of accounting.

The main difference between the QFR and the DFS is the timing of when revenues and expenses are recognized. The QFR reports revenues only when the money is received and expenses only when the money is paid out. The DFS reports revenues when they are earned and expenses when they are incurred. In the latter case, revenues are recorded even if cash has not been received and expenses are incurred even if cash has not yet been paid out.

1.3 Public Works and Government Services Canada's financial structure

PWGSC provides services to many government departments, agencies and Crown corporations through a variety of funding mechanisms. This includes budgetary authorities that are comprised of voted and statutory authorities, as well as non-budgetary authorities. The voted budgetary authorities include Operating Expenditures, Vote-Netted Revenues and Capital Expenditures, while the statutory authorities are mainly comprised of Revolving Funds, Employee Benefit Plans and Payments in Lieu of Taxes (PILT). The non-budgetary authorities consist primarily of the Seized Property Working Capital Account (see description below).

PWGSC's complex financial structure may result in significant fluctuations in authorities on a quarterly basis which are due to timing differences that are resolved by year end. These are summarized as follows:

2. Highlights of fiscal quarter and fiscal year to date results

2.1 Significant changes to authorities

When compared to the same quarter of the previous year, PWGSC's Authorities Available for Use increased by $277.6 million (2014-15: $2,664.6 million; 2015–16: $2,942.2 million) as reflected in the Table 1 - Statement of authorities (unaudited). Major reasons for the increase are outlined below the table:

Year over year variances in authorities available for use
(in millions of dollars)
Initiative Operating Capital Budgetary statutory authorities Total variances
Operation, maintenance and capital projects for federal accommodation (159.0) 332.8 0.0 173.8
Federal infrastructure 40.4 29.8 0.0 70.2
Cape Breton operations 39.0 0.0 0.1 39.1
Federal Contaminated Sites Action Plan - Phase II 5.4 0.0 0.0 5.4
Collective agreements and Employee Benefit Plan adjustment 2.7 0.0 2.1 4.8
Build in Canada Innovation Program 2.5 0.0 0.0 2.5
Surplus Federal Real Property for Homelessness Initiative 2.0 0.0 0.0 2.0
Deficit Reduction Action Plan (28.8) 0.0 0.0 (28.8)
Other 1.2 6.3 1.1 8.6
Cumulative variance in authorities available for use (94.6) 368.9 3.3 277.6

Groupings can change between quarters due to materiality of initiatives.

Amounts may not balance with other public documents due to rounding.

The net increase of $277.6 million can be explained by:

2.2 Significant changes to year-to-date net expenditures

As presented in the Table 2 - Departmental Budgetary Expenditures by standard object (unaudited), the Total Net Budgetary Expenditures have decreased by $0.3 million when compared to the same quarter of the previous year (2014-15: $870.1 million; 2015–16: $869.8 million).

Overall, total spending at the end of the first quarter represents 30% of annual planned expenditures for 2015–16, which compares to the first quarter of 2014-15 at 33%.

The proportion of actual expenditures in comparison to planned expenditures is consistent with the previous year, in each major expenditure category, with the exception of the Information category. The variance in this category is mainly due to information technology infrastructure costs as part of rehabilitation work on Parliamentary Precinct buildings.

Year over year variances in net expenditures (presented by Standard Object)
(in millions of dollars)
Standard Object 2015–16  Year To Date used at quarter end 2014-15  Year To Date used at quarter end Year Over Year Variance
Information 7.8 1.7 6.1
Professional and special services 185.6 169.3 16.3
Rentals 296.9 340.9 (44.0)
Repair and maintenance 100.3 125.2 (24.9)
Transfer payments 253.9 211.1 42.8
Other subsidies and payments 85.6 108.5 (22.9)
Revenues netted against expenditures (407.3) (428.6) 21.3
Other expenditures 347.0 342.0 5.0
Total net budgetary expenditures 869.8 870.1 (0.3)

The net decrease of $0.3 million is mainly attributable to:

3. Risks and uncertainties

PWGSC integrates risk management principles into business planning, decision-making and organizational processes to minimize negative impacts and maximize opportunities across our diverse range of services and operations. Risk management in PWGSC is carried out in accordance with the Treasury Board Secretariat (TBS) Framework for the Management of Risk, the Management Accountability Framework and the PWGSC Policy on Integrated Risk Management.

The following key risks were identified as having a potential financial impact:

4. Significant changes to operations, personnel and programs

PWGSC did not see any significant changes to its operations, personnel and programs in the first quarter of 2015–16.

5. Budget 2012 implementation

This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs, make it easier for Canadians and businesses to deal with their government, and modernize and reduce the back office functions.

PWGSC is committed to achieving Budget 2012 cumulative and ongoing savings of $177.6 million by 2018-19. Savings of $1.5 million were achieved in 2012-13, $28.1 million in 2013-14 and $85.3 million in 2014-15. For 2015–16, accumulated savings will increase to $114.2 million; savings will increase to $162.0 million in 2016–17 and $163.6 million in 2017-18. These savings support fiscal responsibility and a more effective use of departmental resources. With these changes, and building on progress made in recent years, PWGSC is transforming to better serve its clients through enhanced efficiency and effectiveness, and sound and robust management.

The cumulative savings initiatives for 2015–16, totalling $114.2 million, are in the following areas:

  1. Accommodation and Real Property Services – $66.4 million: Contributing to a more affordable public service by reducing office accommodation costs. This will be achieved by working with departments to recapture real property office space in response to reduced accommodation needs. PWGSC has also developed new real property space standards consistent with leading practices, resulting in a reduction in the total amount of government office space by approximately 10%.
  2. Internal Services – $22.2 million: Achieving savings by concentrating on core functions, streamlining processes and eliminating redundancies and overlap, thereby ensuring value for taxpayer money. Savings will be achieved by:
    • Reducing internal overhead and information technology (IT) applications;
    • Integrating the financial and real property management systems;
    • Rationalizing redundant print services;
    • Modernizing IT infrastructure to reduce costs; and
    • Winding down of the Investigations and Litigation Office.
  3. Receiver General for Canada $17.4 million: Payments made on behalf of the Government of Canada (e.g. employment insurance payments, income tax refunds, Government of Canada pay and pension cheques) which are currently issued as cheques will, over time, be transitioned to direct deposit. As the initiative relies on the active engagement of other federal departments and agencies, PWGSC has developed targeted plans working with federal departments and agencies, as well as financial institutions and associations.
  4. Linguistic Management and Services - $5.3 million: The Canadian Language Sector Enhancement Program ended in 2012-13.
  5. Specialized Programs and Services – $2.9 million: Achieved by optimizing interdepartmental coordination on Greening Government Operations, eliminating print publications, and improving efficiency in government operations.

Approved by:

George Da Pont, Deputy Minister
Public Works and Government Services Canada

Gatineau, Canada
August 28, 2015

Julie Charron, Chief Financial Officer, Acting
Public Works and Government Services Canada

Gatineau, Canada
August 28, 2015

Table 1 - Statement of authorities (unaudited)
For the quarter ended June 30, 2015
(in thousands of dollars)
  Fiscal year 2015–16 Fiscal year 2014-15
Total available for use for the year ending March 31, 2016
  Footnote 1 Footnote 2, Footnote 3
Used during the quarter ended June 30, 2015 Year to date used at quarter end Total available for use for the year ending March 31, 2015
  Footnote 1 Footnote 2
Used during the quarter ended June 30, 2014 Year to date used at quarter end
Vote 1
Gross Operating Expenditures 3,046,662 681,731 681,731 3,088,755 710,611 710,611
Vote-Netted Revenues (1,355,207) (250,560) (250,560) (1,302,683) (264,957) (264,957)
Net Operating Expenditures 1,691,455 431,171 431,171 1,786,072 445,654 445,654
Vote 5 - Capital Expenditures 1,128,864 92,278 92,278 759,964 86,121 86,121
Revolving Fund Authorities
Real Property Services Revolving Fund
Gross Expenditures 1,633,087 184,436 184,436 1,546,128 218,239 218,239
Revenues (1,628,287) (106,498) (106,498) (1,541,528) (121,808) (121,808)
Net Expenditures 4,800 77,938 77,938 4,600 96,431 96,431
Translation Bureau Revolving Fund
Gross Expenditures 156,714 28,241 28,241 161,570 36,979 36,979
Revenues (156,742) (30,576) (30,576) (160,230) (30,310) (30,310)
Net Expenditures (28) (2,335) (2,335) 1,340 6,669 6,669
Optional Services Revolving Fund
Gross Expenditures 168,623 7,343 7,343 139,642 7,432 7,432
Revenues (168,623) (19,639) (19,639) (139,642) (11,473) (11,473)
Net Expenditures 0 (12,296) (12,296) 0 (4,041) (4,041)
Total of All Revolving Funds
Gross Expenditures 1,958,424 220,020 220,020 1,847,340 262,650 262,650
Revenues (1,953,652) (156,713) (156,713) (1,841,400) (163,591) (163,591)
Total Revolving Fund Net Expenditures 4,772 63,307 63,307 5,940 99,059 99,059
Other Budgetary Statutory Authorities
Contributions to employee benefit plans 116,553 29,138 29,138 112,068 28,017 28,017
Minister of PWGSC salary and motor car allowance 82 21 21 80 20 20
Refunds of amounts credited to revenues in previous years 0 0 0 124 124 124
Spending of proceeds from the disposal of surplus Crown assets 437 0 0 352 1 1
Collection agency fees 0 0 0 6 6 6
Payment in lieu of taxes to municipalities and other taxing authorities Footnote 2 0 253,914 253,914 0 211,097 211,097
Total Other Budgetary Statutory Authorities 117,072 283,073 283,073 112,630 239,265 239,265
Total budgetary authorities 2,942,163 869,829 869,829 2,664,606 870,099 870,099
Non-Budgetary Authority
Seized Property Working Capital Account 0 (7,421) (7,421) 0 (7,213) (7,213)
Total authorities 2,942,163 862,408 862,408 2,664,606 862,886 862,886
Table 2 - Departmental Budgetary Expenditures by standard object (unaudited)
For the quarter ended June 30, 2015
(in thousands of dollars)
  Fiscal year 2015–16 Fiscal year 2014-15
Planned expenditures for the year ending March 31, 2016
  Footnote 1 Footnote 2
Expended during the quarter ended June 30, 2015 Year to date used at quarter end
Footnote 4
Planned expenditures for the year ending March 31, 2014 Footnote 1Footnote 2 Expended during the quarter ended June 30, 2014 Year to date used at quarter end
Personnel 1,143,827 274,818 274,818 1,140,230 272,941 272,941
Transportation and Communications 81,135 14,051 14,051 81,428 15,360 15,360
Information 17,749 7,836 7,836 11,107 1,722 1,722
Professional and Special Services 1,621,851 185,588 185,588 1,493,048 169,252 169,252
Rentals 1,021,990 296,926 296,926 939,707 340,856 340,856
Repair and Maintenance 991,932 100,339 100,339 988,157 125,230 125,230
Utilities, Materials and Supplies 277,764 23,247 23,247 242,307 22,678 22,678
Acquisition of land, buildings and works 456,762 28,062 28,062 317,964 26,056 26,056
Acquisition of machinery and equipment 63,715 6,737 6,737 66,560 4,951 4,951
Transfer payments  Footnote 2 0 253,914 253,914 0 211,097 211,097
Other subsidies and payments 574,297 85,584 85,584 528,180 108,504 108,504
Total gross budgetary expenditures 6,251,022 1,277,102 1,277,102 5,808,688 1,298,647 1,298,647
Less revenues netted against expenditures
Revolving Fund Revenues (1,953,652) (156,713) (156,713) (1,841,399) (163,591) (163,591)
Vote-Netted Revenues (1,355,207) (250,560) (250,560) (1,302,683) (264,957) (264,957)
Total revenues netted against expenditures (3,308,859) (407,273) (407,273) (3,144,082) (428,548) (428,548)
Total net budgetary expenditures 2,942,163 869,829 869,829 2,664,606 870,099 870,099


Footnote 1

Includes only Authorities available for use and approved by Parliament at quarter-end. Amounts may not balance with other public documents due to rounding.

Return to first footnote 1 referrer

Footnote 2

Consistent with the presentation in the Main Estimates, "Total available for use for the year" (Table 1) and "Planned expenditures for the year" (Table 2) for both 2015–16 and 2014-15, under "Payments in Lieu of Taxes (PILT)" (Table 1) and "Transfer Payments" (Table 2), are presented net of planned PILT made to municipalities and the equivalent planned recoveries from other government departments. A description of PILT is provided in Section 1.3 of this report.

Return to first footnote 2 referrer

Footnote 3

There is a net increase of $277.6 million in the "Total available for use for the year ending March 31, 2016" when compared to the same quarter for the year ending March 31, 2015.

Return to footnote 3 Referrer

Footnote 4

There is a net decrease of $0.3 million in the "Year to date used at quarter end" of Fiscal year 2015–16 compared to the "Year to date used at quarter end" of Fiscal year 2014-15.

Return to footnote 4 Referrer

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