Quarterly financial report for the quarter ended June 30, 2022

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 Main Estimates, the Supplementary Estimates and the previous Quarterly Financial Reports.

A summary description of the Parks Canada Agency’s programs can be found in Part II of the Main Estimates, and a detailed description in Part III – Departmental Plans.

This quarterly report has not been subject to an external audit. However, it has been reviewed by the Agency's Audit Committee.

1.1 Basis of presentation

This quarterly report has been prepared using an expenditure basis of accounting (modified cash accounting). The accompanying Statement of Authorities includes the Parks Canada Agency’s spending authorities granted by Parliament and those used by the Agency consistent with the Main Estimates and Supplementary Estimates A for the 2022-23 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 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.

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

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

This section:

• highlights the financial results for the quarter and fiscal year-to-date ended June 30, 2022
• provides explanations of significant variances compared with the same period last year

2.1 Statement of Authorities (Table 1)

Authorities available for use

This quarterly report reflects the funding available for use from the 2022-23 Main Estimates, the 2022-23 Supplementary Estimates A, and the 2021-22 unused revenue re-spending authority. The authorities at the same time last year consisted of 2021-22 Main Estimates, the 2021-22 Supplementary Estimates A, and the 2020-21 unused spending authority^{Footnote 1}

At June 30, 2022, Parks Canada’s total authorities available for use for the year ending March 31, 2023, are $273.9 million or 20% lower when compared to the same quarter of the previous year (from $1,396.5 million to $1,122.7 million). This decrease in authorities is primarily due to the following factors:

• A net decrease of $276.7 million in spending authorities related to time-limited funding for infrastructure investments;
• An increase of $96.6 million in spending authorities related to the Enhanced Nature Legacy initiative to conserve Canada’s lands and freshwater, protect species, advance Indigenous reconciliation and increase access to nature;
• A net decrease of $121.5 million resulting from the variation in carry forward of unused spending authority from previous year as well as the timing of the approval of the carry forward.

Authorities used during the quarter

In the first quarter of 2022-23, total net budgetary expenditures were $182.9 million compared to $203.1 million reported for the same period in 2021-22, resulting in a decrease of $20.2 million or 10 percent. The decrease in authorities used during the quarter is primarily related to reduced infrastructure investments, the timing of Transfer payments, as well as, additional retroactive salary payments that were made in the first quarter of last fiscal year.

Table 1 provides information on the authorities available for use and used during this quarter.

2.2 Budgetary expenditures by standard object (Table 2)

Planned by standard object

Total planned expenditures, for the year ending March 31, 2023, are $273.9 million (or 20%) lower compared to the previous year. The decreases are mainly observed in Acquisition of land, buildings and works and professional services planned expenditures, due to reduced infrastructure investment funding.

These decreases are partially offset by increases in Transfer payments planned expenditures, largely due to additional grants and contribution funding received for the Enhanced Nature Legacy initiative.

Expended by standard object

As per Table 2 (Budgetary expenditures by standard object), the total expended in the first quarter ending June 30, 2022, is $20.2 million (or 10 percent) lower compared to the previous year.

The variances is primarily attributed to the following:

• a decrease of $10.6 million in Acquisition of land, buildings and works expenditures related to reduced infrastructure investments funding;
• a decrease of $4.5 million in Personnel expenditures when compared to the additional retroactive salary payments that were made during the first quarter of the previous fiscal year (2021-22); and
• a decrease of $4.1 million in Transfer payments due to the timing of payments.

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3. Risks and uncertainties

Parks Canada undertakes a corporate risk assessment every year to support programs, priority setting and resource allocation. The risk assessment identifies key corporate risks that have the greatest impact on the organisation’s ability to deliver its Core Responsibility and achieve Departmental Results. Parks Canada has identified the following key corporate risks for 2022-23:

Environmental forces adaptation and response:

Due to the magnitude and rapid pace of environmental changes, including climate change, there is a risk that the integrity of ecosystems, cultural resources and infrastructure cannot be maintained or improved which may lead to Parks Canada being unable to deliver its mandate.

Relationships with Indigenous peoples:

If Parks Canada does not allocate the necessary time, effort and investment to build and maintain relationships with Indigenous peoples, there is a risk that the Agency may not be able to fulfill its obligations and deliver on its programs and services, which may result in damaged reputation, increased litigation and challenges meeting conservation targets.

Built asset condition and long-term sustainability:

Due to aging infrastructure, inadequate level of recapitalization and maintenance, climate change and inflationary impacts, there is a risk that Parks Canada will not be able to maintain a sustainable asset portfolio which may result in compromised public safety, loss of irreplaceable cultural heritage, and damage to the Agency’s reputation.

Competitive position:

If Parks Canada does not respond to changing socio-economic conditions and other market influences, there is a risk that Parks Canada’s programs and services may not meet the expectations of Canadians which may lead to a decrease in Agency relevance as measured by a decrease in tourism market share and visitation.

Business Innovation:

If the Agency does not modernize its corporate and internal services, there is a risk that the organization may not have the capacity, business processes and tools to effectively and efficiently support service delivery and meet government management accountability expectations.

Workforce, Equity, Accessibility, Inclusion and Diversity, and Well-Being

If Parks Canada fails to foster an inclusive and barrier-free work environment that reflects Canada’s diverse population, there is a risk that it may no longer be an employer of choice and will lack the perspective needed to serve all Canadians, which may result in impacts on programs and services, and damage the Parks Canada’s reputation.

COVID-19 pandemic:

The pandemic situation is evolving and public health restrictions are easing across the country. Parks Canada’s priority remains the health and safety of its employees, visitors and all Canadians. Parks Canada continues to monitor the situation with a view to being ready, as appropriate, to adjust operations in accordance with public health guidance.

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

Réa McKay has joined the Parks Canada Agency effective April 25, 2022 as the new Vice President, Human Resources & Employee Wellness, replacing Line Lamothe who retired from the federal public service.

Starting this fiscal year, Parks Canada transitioned from one parliamentary vote (or envelope) to two votes (Vote 1: operating expenditures, grants and contributions and Vote 5: capital expenditures). In the past, capital expenditures were included under one vote entitled “program expenditures”. Parks Canada is a major assets holder and incurs significant capital expenditures as part of its normal business. The change towards a separate vote aligns Parks Canada’s vote structure with other similar organizations.

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5. Approval by senior officials

Approved by:

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Parks Canada Agency
For the quarter ended June 30
Statement of Authorities - Table 1
(Unaudited)

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Parks Canada Agency
For the quarter ended June 30
Budgetary Expenditures by Standard Object - Table 2
(Unaudited)