Quarterly Financial Report — For the Quarter Ended September 30, 2020

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

1. Introduction

This quarterly report 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 report should be read in conjunction with the 2020-21 Main Estimates and Supplementary Estimates. This quarterly report has not been subject to an external audit or review.

1.1 Authority, Mandate and Core Responsibility

The Federal Economic Development Agency for Southern Ontario (FedDev Ontario) is mandated to "strengthen southern Ontario's capacity for innovation, economic development and growth."

Details and additional information on FedDev Ontario's authorities, mandate and core responsibility can be found in Part II of the Main Estimates and FedDev Ontario's Departmental Plan for 2020-21.

1.2 Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes FedDev Ontario's spending authorities granted by Parliament and those used by FedDev Ontario, consistent with the Main and Supplementary Estimates for the 2020–21 fiscal year. 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 money 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.

FedDev Ontario uses the full accrual method of accounting to prepare and present its annual financial statements that are part of its performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

1.3 FedDev Ontario's Financial Structure

FedDev Ontario manages its expenditures under two votes:

  • Vote 1 – Net operating expenditures include the Agency's authorities related to personnel costs, operation and maintenance expenditures; and
  • Vote 5 – Grants and contributions include all authorities related to transfer payments.

Expenses under budgetary statutory authorities, for which payments are made under a law previously approved by Parliament and which are not part of the annual appropriations bills, include items such as the Government of Canada's portion of the employee benefit plan.

Of particular note this fiscal year, due to COVID-19, there is a significant increase in authorities and spending under the Public Health Events of National Concern Payments Act as part of the statutory vote.

2. Highlights of Fiscal Quarter and Fiscal Year-to-Date (YTD) Results

This section highlights the significant items that contributed to the net increase or decrease in authorities available for the year and actual expenditures for the quarter ended September 30, 2020.

2.1 Authorities Analysis (Vote 1 – Operating and Vote 5 – Grants and Contributions and Statutory Authorities)

Total authorities available for use and planned expenditures increased to $548.1 million for fiscal 2020–21, compared to $262.7 million for fiscal year 2019–20, as illustrated in the "Budgetary Authorities Available" table.

At present, FedDev Ontario has received $186.4 million (75%) of its Main Estimates funding, an additional $253.7 million in Supplementary Estimates A, and $103.4 million in statutory funding under the Public Health Events of National Concern Payments Act identified in Supplementary Estimates B. The Agency is expected to receive full supply of its allocated Main Estimates (remaining $65.7 million), and Supplementary Estimates B ($85.3 million) in December 2020.

The net increase of $285.4 million relates to:

  • $3.7 million decrease in Vote 1 (Operating Authorities);
  • $36.6 million increase in Vote 5 (Grants and Contributions Authorities); and
  • $252.5 million increase in statutory authorities.
Vote 1 – Operating Authorities

Total Vote 1 Operating Authorities available for use for the year ending March 31, 2021 amount to $26.9 million, compared to $30.5 million for fiscal year 2019-20, which is a net decrease of $3.7 million. The net decrease is due to FedDev Ontario not in receipt of its full supply, which is expected to be released in December 2020.

Vote 5 – Grants and Contributions

Total Vote 5 Grants and Contributions Authorities available for use in 2020–21 is $265.1 million, compared to $228.6 million for fiscal year 2019–20, which is a net increase of $36.6 million. Vote 5 Grants and Contributions Authorities available include $101.5 million, primarily for the Regional Relief and Recovery Fund (RRRF), approved during the Supplementary Estimates A, as well as the interim supply of $163.6 million (75%) of FedDev Ontario's Main Estimates. Full supply, remaining $54.5 million, is expected to be received in December 2020.

Statutory Authorities

Total Statutory Authorities granted for use for the year ending March 31, 2021 amount to $256.1 million, compared to $3.6 million in the previous fiscal of 2019-2020, which is a net increase of $252.5 million. The increase in Statutory Authorities available is attributed to the Regional Relief and Recovery Fund (RRRF) authorities granted to FedDev Ontario as part of the Public Health Events of National Concern Payments Act.

Budgetary Authorities Available
Text version
Budgetary Authorities Available
- Fiscal Year
(in millions of dollars)
2020-21 2019–20
Vote 1 Net Operating Expenditures 26.9 30.5
Vote 5 Grants and Contributions Authorities 265.1 228.6
Statutory Authorities 256.1 3.6
Total 548.1 262.7

* Totals presented may not add up due to rounding

2.2 Expenditure Analysis

Year-to-date expenditures as at September 30, 2020, totaled $272.8 million, an increase of $200.7 million, compared to $72.1 million at the same point in 2019. The increase in spending is primarily attributed to the Regional Relief and Recovery Fund (RRRF) granted to FedDev Ontario as part of the Public Health Events of National Concern Payments Act.

Year To Date Expenditures as at September 30, 2020
Text version
Year To Date Expenditures as at September 30, 2020
  Fiscal Year
(in millions of dollars)
2019–20 2020–21
Vote 1 – Net Operating Expenditures 12.8 14.5
Vote 5 – Grants and Contributions 57.7 110.6
Statutory Authorities 1.8 147.7
Total 72.1 272.8

Budgetary expenditures in the second quarter of 2020–21 totaled $114.6 million, compared to $42.9 million for the same period in 2019-20, as illustrated in the "Second Quarter Budgetary Expenditures" chart. The net increase of $71.7 million can be attributed primarily to increased spending through the Regional Relief and Recovery Fund (RRRF) granted to FedDev Ontario as part of the Public Health Events of National Concern Payments Act.

Vote 1 (Operating Expenditures)

Second quarter expenditures for Vote 1 are $7.8 million compared to $6.7 million for the same period in the previous fiscal year. The overall increase of $1.1 million is related to an increase of $1.3 million (or 20 per cent) in personnel expenditures for delivery of the RRRF and a decrease of $0.2 million (or 97 percent) in expenditures for transportation and telecommunications as a result of reduced spending on travel due to the COVID-19 pandemic.

Expenditures in other standard objects did not see significant fluctuations.

Vote 5 (Grants and Contributions)

Spending on transfer payments though voted authorities was $68.6 million in the second quarter of 2020–21, compared to $35.3 million in the same quarter of 2019-20. The increase in spending is primarily in response to the Regional Relief and Recovery Fund (RRRF) granted to FedDev Ontario as part of the Public Health Events of National Concern Payments Act.

Statutory Authorities

Spending through statutory authorities was $38.1 million in the second quarter of 2020–21, compared to $0.9 million in the same quarter of 2019-20. The increase in spending is attributed to transfer payments made through the Regional Relief and Recovery Fund (RRRF) as part of the Public Health Events of National Concern Payments Act.

(For additional information on expenditures, see the Departmental Budgetary Expenditures by Standard Object table in the Appendix).

Second Quarter Budgetary Expenditures
Text version
Second Quarter Budgetary Expenditures
- Fiscal Year
(in millions of dollars)
2020-21 2019–20
Vote 1 Net Operating Expenditures 7.8 6.7
Vote 5 Grants and Contributions 68.7 35.3
Statutory Expenditures 38.1 0.9
Total 114.6 42.9

* Totals presented may not add up due to rounding.

3. Risks and Uncertainties

As a response to the COVID-19 pandemic, $436.4 million was allocated to FedDev Ontario's Authorities to deliver the Regional Relief and Recovery Fund (RRRF). The RRRF provides financial contributions in the form of interest-free loans to help support fixed operating costs of SMEs, where business revenues have been affected by the COVID-19 pandemic. Given the nature of the FedDev Ontario's operations, it is not anticipated that the COVID-19 outbreak will have a major operating impact on FedDev Ontario.

Of the total $695.5 million proposed for use to FedDev Ontario, $548.1 million is available for use as of the second quarter. FedDev Ontario is expected to receive its full supply for the 2020–21 Main Estimates and remaining Supplementary Estimates B authorities in December 2020.

4. Significant Changes in Relation to Operations, Personnel and Programs

In response to the COVID-19 pandemic, $436.4 million additional funding was allocated to FedDev Ontario's Authorities, to deliver the Regional Relief and Recovery Fund (RRRF). The RRRF provides financial contributions in the form of interest-free loans to help support fixed operating costs of SMEs, where business revenues have been affected by the COVID-19 pandemic.

Approval by Senior Officials


James Meddings
President

Ottawa, Canada


Lisa St-Amour, MBA, CPA, CMA
Chief Financial Officer

Statement of Authorities (unaudited)Footnote 1
(in thousands of dollars)
- Fiscal Year 2020–21 Fiscal Year 2019-20
Total available for use for the year ending March 31, 2021Footnote 2 Used during the quarter ended September 30, 2020 Year to date used at quarter-end Total available for use for the year ending March 31, 2020Footnote 2 Used during the quarter ended September 30, 2019 Year to date used at quarter-end
Vote 1–Net Operating Expenditures 26,858 7,798 14,478 30,519 6,718 12,848
Vote 5–Grants and Contributions 265,138 68,686 110,617 228,565 35,344 57,452
Budgetary statutory authorities: 256,146 38,088 147,742 3,566 882 1,765
Total authorities 548,142 114,572 272,837 262,650 42,944 72,065
Departmental budgetary expenditures by Standard Object (unaudited)Footnote 1
(in thousands of dollars)
Expenditures: Fiscal Year 2020-21 Fiscal Year 2019-20
Adjusted Planned expenditures for the year ending March 31, 2021Footnote 2 Used during the quarter ended September 30, 2020 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2020Footnote 2 Used during the quarter ended September 30, 2019 Year to date used at quarter-end
PersonnelFootnote 3 24,682 7,658 14,603 27,450 6,363 12,804
Transportation and communications 882 6 16 821 218 368
Information 393 28 59 307 47 108
Professional and special services 4,483 851 1,335 5,025 667 977
Rentals 133 116 143 122 131 148
Repair and maintenance 45 - - 71 4 10
Utilities, materials and supplies 89 13 17 83 20 33
Acquisition of land, buildings and works - - - - - -
Acquisition of machinery and equipment 303 22 99 158 151 166
Transfer payments 517,117 105,878 256,568 228,565 35,344 57,452
Other subsidies and payments 15 - -3 48 (1) (1)
Total budgetary expenditures 548,142 114,572 272,837 262,650 42,944 72,065

ISSN 2368-3481