Quarterly financial report for the quarter ended June 30, 2023

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’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 Parks Canada’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’s spending authorities granted by Parliament and those used by the Agency consistent with the Main Estimates for the 2023-24 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.

Parks Canada 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, 2023
• provides explanations of significant variances compared with the same period last year

Budgetary Authorities and Expenditures for the first quarter of 2023-24 and 2022-23 ending June 30

Includes annual authorities for use and granted by Parliament at quarter-end.

2.1 Statement of Authorities

Authorities available for use

This quarterly report reflects the funding available for use from the 2023-24 Main Estimates and the 2022-23 unused revenue re-spending authority. The authorities at the same time last year consisted of 2022-23 Main Estimates, the 2022-23 Supplementary Estimates A, and the 2021-22 unused revenue re-spending authority.

At June 30, 2023, Parks Canada’s total authorities available for use for the year ending March 31, 2024, are $266.1 million (or 23%) higher when compared to the same quarter of the previous year (from $1,122.7 million to $1,388.8 million). This increase in authorities is primarily due to the following factors:

• A net increase of $213.0 million in spending authorities related to time-limited funding for infrastructure investments;
• A net increase of $18.0 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 increase of $15.3 million in spending authorities to support disaster relief and restoration efforts through the Hurricane Fiona Recovery Fund;
• A net increase of $11.0 million for the Trans Canada Trail and invest in community trail connections to Rouge National Urban Park; and
• A net increase of $9.6 million in spending authorities to implement the Federal framework to address the legacy of residential schools.

Authorities used during the quarter

In the first quarter of 2023-24, total net budgetary expenditures were $215.1 million compared to $182.9 million reported for the same period in 2022-23, resulting in an increase of $32.2 million (or 18%). The increase in authorities used during the quarter is primarily related to the timing of transfer payments and increased infrastructure investments.

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

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2.2 Budgetary expenditures by standard object (Table 2)

Planned by Standard Object

Total planned expenditures, for the year ending March 31, 2024, are $266.1 million (or 23%) higher compared to the previous year. The increases are mainly observed in Acquisition of lands, buildings and works, repair and maintenance, and professional services planned expenditures, due to increased infrastructure investment funding.

These increases are partially offset by decreases in Transfer payments planned expenditures, largely due to the internal reallocation of contribution funding to the New Parks and Historic Sites Account.

Expended by Standard Object

As per Table 2 (Budgetary Expenditures by Standard Object), the total expended in the first quarter ending June 30, 2023, is $32.2 million (or 18%) higher compared to the previous year.

The major variances are as follows:

• An increase of $11.8 million in Transfer payments due to the timing of payments;
• An increase of $8.7 million in Personnel expenditures due to increase in payroll expenditures for employees; and
• An increase of $6.0 million in Professional and special services related to infrastructure investments.

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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 2023-24:

Environmental Forces Adaptation and Response

Due to the magnitude and rapid pace of environmental changes (e.g., increased incidence of minor weather events such as wildfires), there is a risk that the integrity of ecosystems, cultural resources and infrastructure cannot be protected against these forces which may lead to Parks Canada being unable to deliver its mandate.

Relationships with Indigenous peoples

There is a risk that Parks Canada may not be able to fulfill its obligations to keep in step with evolving jurisprudence to support the Government of Canada’s commitment to implement the United Nations

Declaration on the Rights of Indigenous Peoples Act. Falling short of obligations and the inability to take actions in the spirit of the United Nations Declaration on the Rights of Indigenous Peoples will have a negative impact on relationships with Indigenous peoples, communities, and organizations. These relationships are integral to the management of protected heritage places and to supporting the connection that Indigenous peoples have to these places.

Visitation and relevance to Canadians:

Socioeconomic conditions and other market influences are changing. In order to maintain its relevance to Canadians and visitors, Parks Canada must adapt its programs and services to meet their expectations.

Recruitment and Retention

Canada’s labour market is shrinking, with competitive demand for labour resources across the country. Parks Canada’s ability to attract, retain, and develop employees while maintaining a flexible, high-performing work environment is at risk and could negatively affect operational capacities and the well-being of its employees.

Service and Digital

With the rapid pace of changes in technology and the expectations of service users, there is a risk that Parks Canada may not be able to provide modern services and safeguard data and information without continual investment in aging IT infrastructure, digital solutions, cybersecurity, and reviews of its IM/IT services. This may impact the health and safety of visitors, result in the loss of revenue, and the inability of Parks Canada to adequately deliver on its mandate.

Built asset condition and long-term sustainability

There is a risk that a sustainable asset portfolio will not be maintained due to aging infrastructure, inadequate levels of recapitalization and maintenance, and climate change and inflationary impacts. As a result, public safety and access may be compromised, cultural heritage may be lost, and Parks Canada’s reputation may be damaged.

Business innovation

There is a risk that Parks Canada may not have adequate capacity, business processes, and tools if it does not modernize its corporate and internal services. As a result, Parks Canada may not have the foundational services required to effectively and efficiently support program and service delivery.

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 will not have the cultural competencies and perspectives needed to serve all Canadians, and will not be able to build and maintain a healthy workplace, which may result in impacts on programs and services, and damage its reputation.

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

There are no significant changes in relation to operations, personnel and programs to report during this quarter.

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5. Approval by senior officials

Approved by:

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Parks Canada
For the quarter ended June 30, 2023
Statement of Authorities - Table 1
(Unaudited)

(in thousands of dollars)	Fiscal Year 2023-24			Fiscal Year 2022-23
	Total available for use for the year ending March 31, 2024 (1)	Used during the quarter ended June 30, 2023	Year to date used at quarter-end	Total available for use for the year ending March 31, 2023 (1), (2)	Used during the quarter ended June 30, 2022	Year to date used at quarter-end
Vote 1 - Operating expenditures, grants and contributions	663,383	128,690	128,690	642,841	114,968	114,968
Vote 5 – Capital expenditures	331,076	26,911	26,911	144,193	20,921	20,921
Vote 10 - Payments to the New Parks and Historic Sites Account	81,304	0	0	21,258	0	0
Statutory - Contributions to employee benefit plans	63,250	15,812	15,812	63,855	14,275	14,275
Statutory - Expenditures equivalent to revenues resulting from the conduct of operations pursuant to section 20 of the Parks Canada Agency Act	249,757	43,697	43,697	250,522	32,745	32,745
Total budgetary authorities	1,388,770	215,110	215,110	1,122,669	182,909	182,909

Notes:

1. Includes only Authorities available for use and granted by Parliament at quarter-end.
2. Starting in 2022-23, Parks Canada has a separate vote for capital expenditures. Prior to that, capital expenditures were included under one vote entitled Vote 1 Program expenditures.

Parks Canada
For the quarter ended June 30, 2023
Budgetary Expenditures by Standard Object - Table 2
(Unaudited)

Expenditures (in thousands of dollars)	Fiscal Year 2023-24			Fiscal Year 2022-23
	Planned expenditures for the year ending March 31, 2024 (1)	Expended during the quarter ended June 30, 2023	Year to date used at quarter-end	Planned expenditures for the year ending March 31, 2023 (1)	Expended during the quarter ended June 30, 2022	Year to date used at quarter-end
Personnel	479,366	136,650	136,650	469,542	127,915	127,915
Transportation and communications	12,981	4,314	4,314	17,405	3,525	3,525
Information	13,808	3,438	3,438	13,105	2,449	2,449
Professional and special services	155,260	19,678	19,678	138,576	13,650	13,650
Rentals	29,452	3,788	3,788	27,187	3,153	3,153
Repair and maintenance	60,724	2,899	2,899	27,707	1,870	1,870
Utilities, materials and supplies	95,599	9,391	9,391	90,736	7,982	7,982
Acquisition of land, buildings and works	304,678	16,422	16,422	165,447	15,111	15,111
Acquisition of machinery and equipment	43,586	4,337	4,337	35,765	4,793	4,793
Transfer payments	88,777	13,849	13,849	105,590	2,059	2,059
Public debt charges	0	14	14	0	17	17
Other subsidies and payments	104,539	330	330	31,609	385	385
Total budgetary expenditures	1,388,770	215,110	215,110	1,122,669	182,909	182,909

Notes:

1. Includes only Authorities available for use and granted by Parliament at quarter-end.