Quarterly Financial Report for the quarter ended December 31, 2021
- Basis of presentation
- Highlights of fiscal quarter and fiscal year to date results
- Risks and uncertainties
- Significant changes in relation to operations, personnel and programs
- Approval by senior officials
Statement outlining results, risks and significant changes in operations, personnel and program
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 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.
To date in 2021-22, there is a net decrease in budgetary authorities of $26.53 million compared to the authorities granted in the 2020-21 Main Estimates. Factors contributing to the net decrease include:
- An increase of $3.16 million in program spending for activities related to the implementation of Bill C-10.
- An increase of $1.03 million in re-profiled funding for Les Terrasses de la Chaudière complex makeover and the Government of Canada Financial Management (GCFM) project.
- An increase of $0.39 million related to salary compensation and collective agreements.
- An increase of $0.38 million related to the operating portion from the Operating Budget Carry-Forward (OBCF).
- A decrease of $26.42 million for the COVID-19 Support for the Broadcasting Industry Measure.
- A decrease of $5.07 million in statutory authorities related to EBP.
The CRTC’s spending for the third quarter ended December 31, 2021 is higher compared to the third quarter of the previous fiscal year. Year-to-date total gross budgetary expenditures for 2021-22 are up $4.13 million over the previous fiscal year. The main reason for this difference in spending is an increase of $2.67 million in expenditures attributable to salary related items and an increase of $1.46 million to expenditures attributable to non-salary related items. These increases are primarily attributable to salary expenditures for preliminary work related to the amendments to the Broadcasting Act and increases to non-salary related items such as Professional and special services ($1.16 million) and the processing of all other categories of expenditures ($0.30 million).
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.
The CRTC establishes its unsolicited telecommunications fees on an annual basis at levels anticipated to fully recover its approved investigations and enforcement operating costs, however there could be a revenue shortfall if fewer than expected telemarketers subscribed and paid their fees for access to the National DNCL. It is noted that, compared to the same quarter of the previous year, the amount collected to date is slightly lower. However, 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.
Of note, if the amount collected exceed the regulatory costs, as per section 4(3) of the Unsolicited Telecommunications Fees Regulations, the amount in excess will be refunded to telemarketers accordingly.
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
Chairperson and Chief Executive Officer
Date: February 8, 2022
Claude Doucet, CPA, CGA
Chief Financial Officer
Date: February 7, 2022
Statement of Authorities (unaudited)
|Total available for use for the year ending March 31, 2022Footnote 1||Used during the quarter ended December 31, 2021||Year to date used at quarter-end|
|Vote 1 – Program expenditures||72,269||15,528||48,259|
|Less: Revenues netted against expenditures||(59,241)||(651)||(58,392)|
|Net Vote 1 – Program expenditures||13,028||14,877||(10,133)|
|Statutory authorities – EBP||8,472||1,977||5,931|
|Total Budgetary Authorities||21,500||16,854||(4,202)|
|Total available for use for the year ending March 31, 2021Footnote 1||Used during the quarter ended December 31, 2020||Year to date used at quarter-end|
|Vote 1 – Program expenditures||92,790||14,807||44,249|
|Less: Revenues netted against expendituresFootnote 2||(58,302)||(561)||(31,947)|
|Net Vote 1 – Program expenditures||34,488||14,246||12,302|
|Statutory authorities – EBP||13,540||1,936||5,807|
|Total Budgetary Authorities||48,028||16,182||18,109|
Departmental budgetary expenditures by Standard Object (unaudited)
|Planned expenditures for the year ending March 31, 2022||Used during the quarter ended December 31, 2021||Year to date used at quarter-end|
|Personnel (including EBP contributions)||64,519||15,447||47,615|
|Transportation and communications||1,541||167||450|
|Professional and special services||7,787||1,217||3,582|
|Repair and maintenance||693||6||60|
|Utilities, materials and supplies||259||23||64|
|Acquisition of machinery and equipment||1,038||192||369|
|Other subsidies and payments||5||0||16|
|Total gross budgetary expenditures||80,741||17,505||54,190|
|Less: revenues netted against expenditures|
|Revenues (Part I Broadcasting licence fees, Telecommunications fees and Unsolicited telecommunications fees)||(59,241)||(651)||(58,392)|
|Total revenues netted against expenditures||(59,241)||(651)||(58,392)|
|Total Net Budgetary Expenditures||21,500||16,854||(4,202)|
|Planned expenditures for the year ending March 31, 2021||Used during the quarter ended December 31, 2020||Year to date used at quarter-end|
|Personnel (including EBP contributions)||67,826||14,775||44,940|
|Transportation and communications||1,635||187||454|
|Professional and special services||6,240||1,205||2,419|
|Repair and maintenance||442||53||207|
|Utilities, materials and supplies||375||40||82|
|Acquisition of machinery and equipment||1,687||200||468|
|Other subsidies and payments||4||0||0|
|Total gross budgetary expenditures||81,196||16,743||50,056|
|Less: revenues netted against expenditures|
|Revenues (Part I Broadcasting licence feesFootnote 3, Telecommunications fees, and Unsolicited telecommunications fees)||(33,168)||(561)||(31,947)|
|Total revenues netted against expenditures||(33,168)||(561)||(31,947)|
|Total Net Budgetary Expenditures||48,028||16,182||18,109|
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