Quarterly financial report for the quarter ended June 30, 2024

© His Majesty the King in Right of Canada, as represented by the Canadian Radio-television and Telecommunications Commission, 2024

Catalogue No. BC91-14E-PDF
ISSN 2564-4475

2024-25

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 2023-24 and the 2024-25 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 Anti-Spam Legislation activities and for the Voter Contact Registry). The balance is financed by revenues collected from the broadcasting, telecommunications and telemarketing industries.

Parliament has authorized the CRTC to use a portion of these revenues to fund expenditures it incurs to meet its statutory responsibilities under the Broadcasting Act and Telecommunications Act (i.e. respendable revenue).  The remaining balance of these revenues is classified as non-respendable revenue and is used to fund costs incurred by other government departments on the CRTC's behalf, including employee benefits.

The majority of the CRTC’s vote-netted revenue is collected within the first two quarters of each fiscal year.  As a result, the CRTC’s first quarter net operating expenditures are in a credit position. Further details on CRTC fees and revenues can be found in the 2024-25 Departmental Plan in the supplementary information section entitled “Future-Oriented Statement of Operations”.

Authorities

To date in 2024-25, there is a net increase in spending authorities of $12.2 million compared to 2023-24.  This net change is mainly attributable to an increase in vote-netted revenues of $14.0 million and a decrease in budgetary authorities of $1.8 million

Vote-netted revenues increased by $14.0 million as a result of the coming into force of the Online Streaming Act (C-11) and the Broadcasting Fees Regulations, which increased the scope of broadcasting-related regulatory activities, and the ratification of various collective agreements during fiscal year 2023-24 which increased salary rates.

Budgetary authorities decreased by $1.8 million following the sunset of temporary funding which had been approved up to 2023-24 for the implementation of the amendments to the Broadcasting Act (C-11).

Expenditures

The CRTC’s spending for the first quarter ending June 30, 2024, is higher compared to the previous fiscal year by $2.4 million. This variance is due to an increase of $3.5 million in personnel costs, mainly due to an increase of employees compared to last year quarter, offset by a decrease of $1.1 million in other operating costs. The decrease in operating costs during the first quarter can be attributed mostly to a $0.5 million reduction in rental which include Public Hearing equipment and in timing of payment for licence fees, and to a $0.3 million reduction in acquisition and equipment due to fewer purchases of furniture and fixtures.

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 2023-143 for 2023-24 and 2024-144 for 2024-25.

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, should the CRTC not collect the required $3.3 million budget, measures will be taken internally to account for the shortfall while still maintaining the CRTC’s National DNCL investigation and enforcement activities for 2024-25.

Of note, if the amount collected exceeds 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 are no significant changes to report.

6. Approval by senior officials

Approved by:

Statement of Authorities (unaudited)

Departmental budgetary expenditures by Standard Object (unaudited)

Date modified:

2024-08-27