Quarterly Financial Report – For the quarter ended June 30, 2021

Quarterly Financial Report – For the quarter ended 30 June 2021 [PDF 200 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 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, 2022. 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.

Planned expenditures analysis

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 ending March 31, 2022 is $108.09 million, as compared to $79.55 million as at March 31, 2021. The increase of $28.54 million is due to:

  • an increase of $29.54 million mainly related to Budget 2020 funding to stabilize CER’s operations, and improve its ability to interpret and make data available digitally to Canadians;
  • a decrease of $2.23 million related to 2020-21 employee benefit plan; and
  • an increase of $1.23 million related to compensation allocation as a result of adjustments made to terms and conditions of service or employment of the federal public administration.

Actual expenditures analysis

As reflected in the Departmental Budgetary Expenditures by Standard Object, the department’s actual expenditures in the first quarter of this fiscal year are $24.54 million, as compared to $19.96 million same period last year. The increase of $4.58 million in actual expenditures is due to:

  • an increase of $2.75 million in personnel expenditures as compared to the same quarter last year, primarily due to cash out on pay in lieu of annual leave, employee benefit plan and new hiring related to Budget 2020;
  • an increase of $1.28 million in professional services mainly related to Budget 2020 funding to stabilize CER’s operations, and improve its ability to interpret and make data available digitally to Canadians, SAP Implementation Project, and
  • a net increase of $0.55 million mainly related to Microsoft licensing for server and Cisco teleconference.

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.

The COVID-19 pandemic continued to have an impact throughout the world for the entire 2020-21 fiscal year. For the CER, this meant that its staff would serve the public every day from about 500 locations across Canada, working from kitchen tables, makeshift home offices and in the field with additional safety protocols and gear. Thanks to an enormous team effort and solid business continuity planning, CER business operations continued uninterrupted throughout the entire year.

Every single day, CER staff got the job done: applications were reviewed, engagement with Indigenous peoples and stakeholders continued, and energy trends were compiled, analyzed and released to the public.

Oversight of CER-regulated energy infrastructure also continued in 2021-22, as the CER adapted how it conducted its compliance verification activities - including inspections - to protect the health and safety of CER staff, regulated companies, and all those it works closely with. As the CER considered COVID-19 a hazard that companies needed to identify and manage, the organization worked to verify that companies were taking all steps required to protect their workers from the impacts caused by the pandemic.

Most importantly, all of this work and these modified processes are carried out without compromising safety, oversight or environmental monitoring.

The Commission of the Canada Energy Regulator also adjusted a number of its adjudicative processes to replace in-person meetings with alternative formats, such as written or virtual proceedings. This allowed the Commission to continue to conduct processes that are fair, timely, transparent and accessible, while also respecting public health measures.

Significant Changes in Relation to Operations, Personnel and Programs

In response to COVID-19 pandemic situation, the CER announced implementation of operational changes. As of July 19, 2021, the CER will begin a flexible and volunteer return to the office in Calgary for the rest of the summer. Eastern and Pacific regional offices will follow suit in September in keeping with local guidelines.

During the first quarter, GIC appointed three individuals to the Board of Directors of the Canada Energy Regulator:

Karen Leibovici joined the Board of Directors effective June 17, 2021, for a 5-year term.

François Tanguay joined the Board of Directors effective May 11, 2021, for a 3-year term.

Karim Mahmud joined the Board of Directors effective May 11, 2021, for a 3-year term.

Approval by Senior Officials

 

The original version was approved by,

_________________________________
Gitane De Silva
Chief Executive Officer

Calgary, Canada
27 August 2021

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 2021-2022 Fiscal year 2020-2021
  Planned expenditures for the year ending March 31, 2022Table Note a Expended during the quarter ended June 30, 2021 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2021Table Note a Expended during the quarter ended June 30, 2020 Year to date used at quarter-end
Vote 1 – Net Operating expenditures 97,322 21,842 21,842 71,327 17,906 17,906
Statutory Authority 10,771 2,693 2,693 8,222 2,055 2,055
Total Budgetary authorities 108,093 24,535 24,535 79,549 19,961 19,961
Non-budgetary authorities            
Total authorities 108,093 24,535 24,535 79,549 19,961 19,961

DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT
(unaudited)

Fiscal year 2021-2022
  Fiscal year 2021-2022 Fiscal year 2020-2021
(in thousands of dollars) Planned expenditures for the year ending March 31, 2022Table Note b Expended during the quarter ended June 30, 2021 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2021Table Note b Expended during the quarter ended June 30, 2020 Year to date used at quarter-end
Expenditures:
Personnel 83,548 20,965 20,965 63,773 18,214 18,214
Transportation and communications 3,916 245 245 2,387 69 69
Information 428 30 30 298 1 1
Professional and special services 14,452 2,594 2,594 8,683 1,311 1,311
Rentals 572 208 208 370 2 2
Repair and maintenance 1,138 304 304 752 121 121
Utilities, materials and supplies 604 16 16 339 17 17
Acquisition of land, buildings and works 132 70
Acquisition of machinery and equipment 939 30 30 513
Transfer payments 2,364 68 68 2,364 170 170
Public debt charges  
Other subsidies and payments 75 75 56 56
Total gross budgetary expenditures 108,093 24,535 24,535 79,549 19,961 19,961
Less            
Total Revenues netted against expenditures
Total net budgetary expenditures 108,093 24,535 24,535 79,549 19,961 19,961
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