Quarterly Financial Report – For the quarter ended June 30, 2020

Quarterly Financial Report – For the quarter ended 30 June 2020 [PDF 171 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. This quarterly report has not been subject to an external audit or review.

A summary description of the CER’s core responsibilities can be found in Part II of the Main Estimates.

The Canada Energy Regulator (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 in 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 department’s spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates (as applicable) 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.

When Parliament is dissolved for the purpose of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

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 June 30, 2020 was $79.5 million. The department’s total budgetary authority used in the quarter ended June 30, 2020 was $19.96 million, which was 25% of total authority available for use.

On June 21, 2019, Parliament passed Bill C-69, which replaced the National Energy Board (NEB) Act with the Canadian Energy Regulator (CER) Act. On August 28, the CER Act came into force and all revenue, expenses, assets and liabilities of the NEB were transferred to the CER. Since this is the first fiscal year of CER’s operation, there is no historical comparative data for fiscal year 2020-2021.

Additionally, due to a novel strain of the coronavirus (“COVID-19”) pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the fall. The CER is expected to receive full supply for the 2020-21 Main Estimates in December 2020.

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 Canadian 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 began to identify and pursue 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, 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. The majority of the workforce has worked remotely to preserve the CER’s ability to operate. All international business travel has been suspended and domestic travel is now limited to business critical activities. The CER is continuously exploring flexible ways to optimize its operations while remaining committed to assisting communities, companies and individuals.

As of March 3, 2020, Sandy Lapointe was designated by the Minister of Natural Resources to act as Chief Executive Officer (CEO) of the Canada Energy Regulator after Peter Watson left that role.

On July 2, 2020, the Government of Canada announced the Governor-in-Council appointment of Gitane De Silva as CEO of the CER, following an open and transparent competitive process that was launched in January 2020. Ms. De Silva joined the CER effective August 10, 2020 for a term of five years.

Jean-Denis Charlebois became the Secretary of the Commission on May 25, 2020 for a one-year assignment after Louise George’s retirement.

Approval by Senior Officials

 

The original version was approved by,

_________________________________
Gitane De Silva
Chief Executive Officer

(Calgary, Canada)
(24 August 2020)

The original version was approved by,

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

STATEMENT OF AUTHORITIES
(unaudited)

Fiscal year 2020-2021
(in thousands of dollars) Fiscal year 2020-2021
  Planned expenditures for the year ending March 30, 2021Table Note a Expended during the quarter ended June 30, 2020 Year to date used at quarter-end
Vote 1 – Net Operating expenditures 71,327 17,906 17,906
Statutory Authority 8,222 2,055 2,055
Total Budgetary authorities 79,549 19,961 19,961
Non-budgetary authorities      
Total authorities 79,549 19,961 19,961

DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT
(unaudited)

Fiscal year 2020-2021
  Fiscal year 2020-2021
(in thousands of dollars) Planned expenditures for the year ending March 30, 2021Table Note b Expended during the quarter ended June 30, 2020 Year to date used at quarter-end
Expenditures:
Personnel 63,773 18,214 18,214
Transportation and communications 2,387 69 69
Information 298 1 1
Professional and special services 8,683 1,311 1,311
Rentals 370 2 2
Repair and maintenance 752 121 121
Utilities, materials and supplies 339 17 17
Acquisition of land, buildings and works 70
Acquisition of machinery and equipment 513
Transfer payments 2,364 170 170
Public debt charges
Other subsidies and payments 56 56
Total gross budgetary expenditures 79,549 19,961 19,961
Less      
Total Revenues netted against expenditures
Total net budgetary expenditures 79,549 19,961 19,961
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