Quarterly Financial Report – For the quarter ended December 31, 2020

Quarterly Financial Report – For the quarter ended 31 December 2020 [PDF 899 KB]

Statement outlining results, risks and significant changes in operations, personnel and program

Introduction

This quarterly financial report has been prepared by management as required by Section 65.1 of the Financial Administration Act (FAA) and in the form and manner prescribed by the Treasury Board in accordance with the special purpose financial reporting framework described in the Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Reports. It should be read in conjunction with the Main Estimates and Supplementary Estimates. This quarterly report has not been subject to an external audit or review.

 A summary description of the Canada Energy Regulator (CER)’s core responsibilities can be found in Part II of the Main Estimates.

The CER receives its funding through annual Parliamentary authorities.  The majority of expenditures are subsequently recovered from the companies regulated by the CER and the funds are deposited to the Consolidated Revenue Fund of the Government of Canada.

Basis of Presentation

The quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the CER’s spending authorities granted by Parliament, and those used by the CER, consistent with the Main Estimates and Supplementary Estimates (A and B) for the fiscal year ending March 31, 2021. 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 CER uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of the Fiscal Quarter and the Fiscal Year to Date Results

This section highlights any significant items that affected the year-to-date results and/or contributed to the net change in resources available for the year and actual expenditures. It should be read in conjunction with the Statement of Budgetary Authorities and the Departmental Budgetary Expenditures by Standard Object, which can be found at the end of this report.

As reflected in the Statement of Budgetary Authorities and the Departmental Budgetary Expenditures by Standard Object, the department’s total authority available for use in the fiscal year as at December 31, 2020 was $108.71 million, as compared to $68.93 million as at December 31, 2019.

The department’s total budgetary authority used in the quarter ended December 31, 2020 was $66.91 million, as compared to $40.00 million as at December 31, 2019.

On June 21, 2019, Parliament passed Bill C-69, which replaced the National Energy Board Act with the Canadian Energy Regulator Act (CER Act). On August 28, 2019 the CER Act came into force and all revenue, expenses, assets and liabilities of the National Energy Board were transferred to the CER. Since last fiscal year was a partial year beginning August 28, 2019, there are no comparable figures for year-to-date actual expenditures and planned expenditures.

The total budgetary authority used in the year during the third quarter ended December 31, 2020 was $23.67 million, as compared to $21.27 million for the same period last year. The increase of $2.4 million can be attributed to:

  • an increase of $2.94 million in personnel costs mainly due to the timing of processing transactions;
  • an increase of $0.89 million in professional services mainly related to Digital Regulatory Filing Project and Operations Regulatory Compliance Application (ORCA) Enhancement;
  • a decrease of $0.71 million in transportation and communications mainly due to reduced travel costs related COVID-19 health restrictions; and
  • a decrease of $0.72 million mainly due to transfer payment, utilities, and acquisition of machinery and equipment, rental.

Risks and Uncertainties

The CER’s responsibilities are shaped by emerging energy trends and by the proactive consideration of safety, environmental, societal and economic trends that may influence our ability to carry out responsibilities that represent the ever-changing interests and concerns of Canadians. Due to the nature of its mandate, the CER’s expenditures are influenced by planned and unplanned events (internal and external) that create uncertainty in expenditure and resource pressures.

On March 11, 2020, the World Health Organization declared the global pandemic following the outbreak of COVID-19. COVID-19 has created challenges for the Canada Energy Regulator. Responses to the spread of COVID-19 have resulted in a significant increase in economic uncertainty including delays in planned acquisitions or other significant transactions, impact of travel restrictions and human resources challenges. Thanks to sound business continuity planning, the organization was able to maintain business operations even as employees transitioned to working from their homes. This major shift allowed the CER to continue to deliver its mandate without interruption: applications were processed, energy information was compiled, analyzed and released, and communication with the public continued. During this difficult time, Canadian Energy Regulator is monitoring the situation and adopting its operations in order to keep employees and Canadians safe while continuing to deliver the important services.

Oversight of CER-regulated energy infrastructure was maintained as compliance verification activities continued in a modified form in order to reduce in-person contact. The organization identified and pursued administrative flexibilities that would help streamline what was needed from CER-regulated companies – without compromising safety, oversight or environmental monitoring.

The CER continued its engagement with Indigenous Peoples during this time. Concerns were raised by a number of Indigenous communities about pandemic related risks associated with major project construction. The CER recognized the need for additional clarity on company health and safety practices and CER authority and oversight of those practices.

Significant Changes in Relation to Operations, Personnel and Programs

In response to COVID-19 pandemic situation, the CER announced implementation of operational changes. In mid-March 2020, the CER created the Pandemic Advisory Team to provide strategic advice, and central coordination, tracking and reporting on strategic pandemic-related information, issues and decisions. In September, the CER implemented Phase One of Return to Office Plan, which allowed staff in Calgary to return to the office on a voluntary basis. In November, the Phase One of Return to Office Plan was halted due to the enhanced health measures announced by Alberta Government. The majority of the workforce is working remotely until further notice. CER is continuously exploring flexible ways to optimize its operations while remaining committed to assisting communities, companies and individuals.

On December 15, 2020, the Governor in Council, announced the appointment of Mélanie Chartier as a new Commissioner of the CER. Ms. Chartier will begin her term on January 11, 2021 and the appointment is for a period of six years.

There were organizational changes to strengthen alignment with our strategic plan and core responsibilities. The Integrated Energy Information and Analysis (IEIA) Business Unit was split into two separate units:

  • one focused on Energy Information (EI) responsible for the two EI programs: Energy Systems Information and Pipeline Information. The EI unit remains part of Transparency and Strategic Engagement; and
  • the other, a dedicated unit responsible for the Regulatory Framework Program, including leading work on organization-wide regulatory policy. The regulatory framework unit will transfer to the Regulatory area.

Additionally, the Communications and Engagement Business Unit has been restructured to meet the changing demands and priorities of the CER. The Strategic Communications team (formerly Media Relations) was created which brings together internal and external communications, media relations, internal engagement and web, print and graphics services. A new Integration, Planning and Analytics team (formerly Internal Communications Services) was formed, which combines monitoring, measurement, analysis, reporting, planning, communications evaluation and translation services under a single directorate.

Approval by Senior Officials

 

The original version was approved by,


_________________________________
Gitane De Silva
Chief Executive Officer

(Calgary, Canada)
(28 February 2021)

The original version was approved by,


_________________________________
Mark Power, CPA, CGA, CIA, MBA
Chief Financial Officer

STATEMENT OF AUTHORITIES
(unaudited)

Fiscal year 2020-2021 and Fiscal year 2019-2020

(in thousands of dollars)

Fiscal year 2020-2021 Fiscal year 2019-2020
  Planned expenditures for the year ending March 31, 2021Table Note a Expended during the quarter ended December 31, 2020 Year to date used at quarter-end Planned expenditures for the period Aug 28, 2019 to March 31, 2020 Expended during the quarter ended December 31, 2019 Year to date (Aug 28, 2019 to Dec 31, 2019) used at quarter-end

Vote 1- Net Operating expenditures

96,671

21,676

60,827

63,593

18,980

27,950

Statutory Authority

12,035

1,989

6,082

5,337

2,287

3,049

Total Budgetary authorities

108,706

23,665

66,909

68,930

21,267

30,999

Non-budgetary authorities

 

 

 

 

 

 

Total authorities

108,706

23,665

66,909

68,930

21,267

30,999

DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT
(unaudited)

Fiscal year 2020-2021 and Fiscal year 2019-2020

 

Fiscal year 2020-2021

Fiscal year 2019-2020

(in thousands of dollars)

Planned expenditures for the year ending March 31, 2021Table Note a

Expended during the quarter ended December 31, 2020

Year to date used at quarter-end

Planned expenditures for the period Aug 28, 2019 to March 31, 2020

Expended during the quarter ended December 31, 2019

Year to date (Aug 28, 2019 to Dec 31, 2019) used at quarter-end

Expenditures:

Personnel

82,930

19,445

56,443

49,607

16,503

26,127

Transportation and communication

3,590

273

581

3,661

983

996

Information

448

6

10

184

48

48

Professional and special services

16,594

3,370

7,704

10,609

2,478

2,478

Rentals

556

83

411

470

200

200

Repair and maintenance

1,129

127

871

671

19

114

Utilities, material and supplies

511

69

137

449

89

89

Acquisition of land, building

70

58

84

144

Acquisition of machinery and equipment

514

151

261

1,153

455

455

Transfer payments

2,364

73

276

2,072

437

437

Public debt charges

Other subsidies and payments

10

131

(90)

55

55

Total gross budgetary expenditures

108,706

23,665

66,909

68,930

21,267

30,999

Less

 

 

 

 

 

 

Total Revenues netted against expenditures

Total net budgetary expenditures

108,706

23,665

66,909

68,930

21,267

30,999

 

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