Quarterly Financial Report for the quarter ended September 30, 2019

2019-2020

Table of Contents

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

1. Introduction

This quarterly financial report (QFR) 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.  This QFR should be read in conjunction with the Main Estimates.  It has not been subject to an external audit or review.

A summary description of the Canadian Radio-television and Telecommunications Commission (CRTC) Raison d’être and core responsibilities can be found in Part II of the Main Estimates

2. Basis of Presentation

This QFR has been prepared by management using an expenditure basis of accounting.  The accompanying Statement of Authorities includes the CRTC’s spending authorities granted by Parliament and those used by the department consistent with the Main Estimates for both the 2018-19 and the 2019-20 fiscal years. 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 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 purposes 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 CRTC uses the modified accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process.  However, the spending authorities voted by Parliament remain on an expenditure basis.

In this QFR, only those revenues netted against expenditures (i.e. respendable revenue) are being reported. All other revenue that is designated as non-respendable revenue is not reported in the quarterly financial reports, but will be reported annually in the Public Accounts of Canada and in the CRTC’s Departmental Results Report (DRR).

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

The CRTC is financed in part by the Government of Canada through Parliamentary authorities (e.g. Statutory Vote for Employee Benefit Plans (EBP), Budgetary Vote for the Anti-spam Legislation activities and for the Voter Contact Registry). The balance is financed by vote-netted fees it collects from the broadcasting, telecommunications and telemarketing industries.

Vote-netting is a means of funding selected programs or activities wherein Parliament authorizes a department to apply revenues collected from fee payers towards costs directly incurred for specific activities. The CRTC has the authority to use a portion of: a) the Part I licence fees collected from broadcasters; b) the annual telecommunications fees collected from telecommunications carriers; and c) the unsolicited telecommunications fees collected from telemarketers to finance the costs it incurs in discharging its statutory responsibilities under the Broadcasting Act and Telecommunications Act (i.e. respendable revenue). The balance of these three fees recovers the costs for items funded through budgetary authorities (e.g. EBP) and costs incurred by other government departments on the CRTC's behalf and are classified as non-respendable revenue.

The majority of the CRTC’s vote-netted revenue for the year is collected within the first two quarters of each fiscal year.  As a result, it is expected that the CRTC quarterly financial reports will always show the net operating expenditures in a credit position.  Further details on CRTC fees and revenues can be found in the 2019-20 Departmental Plan in the supplementary information section entitled “Future-Oriented Statement of Operations”.

Authorities

To date in 2019-20, there is a net increase in budgetary authorities of $3.77 million compared to the authorities granted in the 2018-19 Main Estimates.  Factors contributing to the net increase include:

Increases

Decreases

Expenditures

The CRTC’s spending for the second quarter ended September 30, 2019 is higher compared to the previous fiscal year.  Year-to-date total gross budgetary expenditures for 2019-20 are up ($4.37 million) over the previous fiscal year.  The main reason for this difference in spending is an increase of $2.92 million in expenditures attributable to salary related items and an increase of $1.45 million in expenditures attributable to non-salary related items.

4. Risks and Uncertainties

The estimated telemarketing and regulatory costs and revenue target for unsolicited telecommunications fees, the CRTC’s National Do Not Call List (DNCL), total $3.3 million per year.  A public notice of these amounts was issued in CRTC Compliance and Enforcement Orders 2018-164 for 2018-19 and 2019-208 for 2019-20.

5. Significant changes in relation to operations, personnel and programs

There have been no significant changes in relation to operations, personnel and programs over the past year.  

6. Approval by Senior Officials

Approved by:


Ian Scott
Chairperson and Chief Executive Officer
Gatineau, Canada
Date: November 14, 2019


Claude Doucet, CPA, CGA
Chief Financial Officer
Gatineau, Canada
Date: November 13, 2019

Statement of Authorities (unaudited)

Fiscal year 2019-20 (in thousands of dollars)
Total available for use for the year ending March 31, 2020* Used during the quarter ended
September 30, 2019
Year to date used at quarter-end
Vote 1 – Program expenditures 68,642 15,242 29,010
Less:  Revenues netted against expenditures (61,292) 0 (60,507)
Net Vote 1 – Program expenditures 7,350 15,242 (31,497)
Vote 5 – Protecting Canada’s Critical Infrastructure from Cyber Threats 2,545 0 0
Statutory authorities – EBP 8,075 2,019 4,038
Total Budgetary Authorities 17,970 17,261 (27,459)

* Only includes Authorities available for use and granted by Parliament at quarter-end.

Fiscal year 2018-19 (in thousands of dollars)
Total available for use for the year ending March 31, 2019* Used during the quarter ended
September 30, 2018
Year to date used at quarter-end
Vote 1 – Program expenditures 57,147 12,614 25,421
Less:  Revenues netted against expenditures (49,449) (660) (48,283)
Net Vote 1 – Program expenditures 7,698 11,954 (22,862)
Statutory authorities – EBP 6,505 1,626 3,252
Total Budgetary Authorities 14,203 13,580 (19,610)

* Only includes Authorities available for use and granted by Parliament at quarter-end.

Departmental budgetary expenditures by Standard Object (unaudited)

Fiscal year 2019-20 (in thousands of dollars)
Planned expenditures for the
year ending
March 31, 2020
Used during the quarter ended
September 30, 2019
Year to date used at quarter-end
Expenditures:
Personnel (including EBP) 61,922 14,321 28,331
Transportation and communications 1,909 344 695
Information 1,576 496 761
Professional and special services 7,086 1,018 1,614
Rentals 1,258 327 757
Repair and maintenance 276 135 207
Utilities, materials and supplies 472 111 135
Acquisition of machinery and equipment 2,214 508 547
Other subsidies and payments* 2,549 1 1
   Total gross budgetary expenditures 79,262 17,261 33,048
Less: revenues netted against expenditures   
Revenues (Part I Broadcasting licence fees, Telecommunications fees and Unsolicited telecommunications fees) (61,292) 0 (60,507)
Total revenues netted against expenditures (61,292) 0 (60,507)
TOTAL NET BUDGETARY EXPENDITURES 17,970 17,261 (27,459)

*Detailed allocations of new Budget funding for Protecting Canada’s Critical Infrastructure from Cyber Threats to core responsibilities are not yet available.

Fiscal year 2018-19 (in thousands of dollars)
Planned expenditures for the
year ending
March 31, 2019
Used during the quarter ended September 30, 2018 Year to date used at quarter-end
Expenditures: 
Personnel (including EBP) 49,301 12,745 25,412
Transportation and communications 2,217 300 591
Information 1,719 82 407
Professional and special services 5,792 754 1,291
Rentals 1,310 201 440
Repair and maintenance 605 28 79
Utilities, materials and supplies 455 36 69
Acquisition of machinery and equipment 2,250 98 384
Other subsidies and payments 3 (4) 0
Total gross budgetary expenditures 63,652 14,240 28,673
Less: revenues netted against expenditures
Revenues (Part I Broadcasting licence fees, Telecommunications fees, and Unsolicited telecommunications fees) (49,449) (660) (48,283)
Total revenues netted against expenditures (49,449) (660) (48,283)
TOTAL NET BUDGETARY EXPENDITURES 14,203 13,580 (19,610)
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