Quarterly Financial Report for the quarter ended September 30, 2021

2021-2022

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’s (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 2020-21 and the 2021-22 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 Canada’s 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 the 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. That balance is 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 2021-22 Departmental Plan, in the supplementary information section entitled “Future-Oriented Condensed Statement of Operations.”

The outbreak of the Coronavirus disease (“COVID-19”) has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally, resulting in an economic slowdown. The duration and impact of the COVID-19 outbreak are unknown at this time.

Authorities

To date in 2021-22, there is a net decrease in budgetary authorities of $21.80 million compared to the authorities granted in the 2020-21 Main Estimates.  Factors contributing to the net decrease include:

Increases

Decreases

Expenditures

The CRTC’s spending for the second quarter ended September 30, 2021 is higher compared to the second quarter of the previous fiscal year.  Year-to-date total gross budgetary expenditures for 2021-22 are up $3.37 million over the previous fiscal year.  The main reason for this difference in spending is an increase in expenditures attributable to salary-related items and professional and special services.

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 2020-149 for 2020-21 and 2021-202 for 2021-22.

Due to the economic impact of the COVID-19 quarantine protocols, revenues for 2020-21 were moderately below anticipated levels when compared to the previous year. However, there are already indications that revenues are returning to anticipated levels for the current fiscal year. The CRTC still anticipates collecting 100% of the required $3.3 million budgetary authority to support the CRTC’s National DNCL investigation and enforcement activities for 2021-22, as outlined in paragraph 4 of Compliance and Enforcement Order 2021-202.

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 15, 2021


Claude Doucet, CPA, CGA
Chief Financial Officer
Gatineau, Canada
Date: November 9, 2021

Statement of Authorities (unaudited)

Statement of Authorities (unaudited) - Fiscal year 2021-22 (in thousands of dollars)
Total available for use for the year ending March 31, 2022Footnote 1 Used during the quarter ended September 30, 2021 Year to date used at quarter-end
Vote 1 – Program expenditures 71,746 16,843 32,731
Less:  Revenues netted against expenditures (59,103) (660) (57,741)
Net Vote 1 – Program expenditures 12,643 16,183 (25,010)
Statutory authorities – EBP 8,472 1,977 3,954
Total Budgetary Authorities 21,115 18,160 (21,056)
Statement of Authorities (unaudited) - Fiscal year 2020-21 (in thousands of dollars)
Total available for use for the year ending March 31, 2021Footnote 1 Used during the quarter ended September 30, 2020 Year to date used at quarter-end
Vote 1 – Program expenditures 88,340 15,100 29,442
Less:  Revenues netted against expendituresFootnote 2 (58,302) (467) (31,386)
Net Vote 1 – Program expenditures 30,038 14,633 (1,944)
Statutory authorities – EBP 12,873 1,935 3,871
Total Budgetary Authorities 42,911 16,568 1,927

Departmental budgetary expenditures by Standard Object (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited) -Fiscal year 2021-22 (in thousands of dollars)
Planned expenditures for the year ending March 31, 2022 Used during the quarter ended September 30, 2021 Year to date used at quarter-end
Expenditures:
Personnel (including EBP contributions) 63,996 16,213 32,168
Transportation and communications 1,541 160 283
Information 3,212 633 921
Professional and special services 7,787 1,416 2,365
Rentals 1,687 231 660
Repair and maintenance 693 23 54
Utilities, materials and supplies 259 34 41
Acquisition of machinery and equipment 1,038 94 177
Other subsidies and payments 5 16 16
Total gross budgetary expenditures 80,218 18,820 36,685
Less: revenues netted against expenditures
Revenues (Part I Broadcasting licence fees, Telecommunications fees and Unsolicited telecommunications fees) (59,103) (660) (57,741)
Total revenues netted against expenditures (59,103) (660) (57,741)
Total Net Budgetary Expenditures 21,115 18,160 (21,056)
Departmental budgetary expenditures by Standard Object (unaudited) -Fiscal year 2020-21 (in thousands of dollars)
Planned expenditures for the year ending March 31, 2021 Used during the quarter ended September 30, 2020 Year to date used at quarter-end
Expenditures:
Personnel (including EBP contributions) 61,977 15,263 30,165
Transportation and communications 1,733 118 267
Information 1,401 62 380
Professional and special services 5,493 906 1,214
Rentals 1,191 292 823
Repair and maintenance 357 111 154
Utilities, materials and supplies 298 40 42
Acquisition of machinery and equipment 1,429 243 268
Other subsidies and payments 4 0 0
Total gross budgetary expenditures 73,883 17,035 33,313
Less: revenues netted against expenditures
Revenues (Part I Broadcasting licence fees,Footnote 2 Telecommunications fees, and Unsolicited telecommunications fees) (58,302) (467) (31,386)
Total revenues netted against expenditures (58,302) (467) (31,386)
Total Net Budgetary Expenditures 15,581 16,568 1,927
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