Canada Border Services Agency
Symbol of the Government of Canada

Quarterly Financial Report
For the quarter ended June 30, 2013

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

Warning This page has been archived.

Archived Content

Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.


Table of Contents




Return to Top of Page

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 quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates A as well as Canada's Economic Action Plan 2012 (Budget 2012).

A summary description of the Canada Border Services Agency (CBSA) program activities can be found in Part II of the Main Estimates.

1.1 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities include the CBSA's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates A for the 2013-2014 fiscal year.

The authority of Parliament is required before monies 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.

As part of the Parliamentary business of supply, the Main Estimates must be tabled in Parliament on or before March 1 preceding the new fiscal year.  Budget 2012 was tabled in Parliament on March 29, after the tabling of the Main Estimates on February 28, 2012.  As a result the measures announced in the Budget 2012 could not be reflected in the 2012-2013 Main Estimates.

In fiscal year 2012-2013, frozen allotments were established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012.  In 2013-2014, the changes to departmental authorities were reflected in the 2013-2014 Main Estimates tabled in Parliament.

Additional funding was sought by the CBSA through the 2012-2013 Supplementary Estimates B. The department received this additional authority net of the planned savings or other amounts transferred by Treasury Board authority to a frozen allotment.

The CBSA uses the full 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.

The quarterly financial report has not been subjected to an external audit or review.

1.2 CBSA Financial Structure

The CBSA has a financial structure composed mainly of voted budgetary authorities that include Vote 10 – Operating Expenditures and Vote 15 – Capital Expenditures, while the statutory authorities consist of contributions to the employee benefit plan, Court Awards - Crown Liability Act, Refunds of amounts credited to revenues in previous years, Collection agency fees and Spending of proceeds from the disposal of surplus Crown assets.

In addition the Agency also has a small special revenue respending authority for Net Voting. Only the revenues associated with costs incurred within net-voted activities are applied towards these costs. The revenues which are not associated with costs incurred are recorded as non-tax revenue.  In the Agency's case Net Voting is appropriate as some of our programs are partially funded through User Fees (e.g. Nexus)

The CBSA also operates on the basis of a two-year appropriation, whereby any surplus amount reported at the end of a fiscal year is carried forward and is available to be used the following year. However, any portion of the unspent funds not spent at the end of the two years is lost.  This process differs from that of other government departments as they can only claim five percent of their operating vote and twenty percent of their capital vote through the carry forward process each year.

Return to Top of Page

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 resources available for the year and actual expenditures for the quarter ended June 30, 2013.

Graph 1:

Comparison of Net Budgetary Authorities and Expenditures as of June 30, 2012 and June 30, 2013 (in thousands $)

2.1 Significant Changes to Authorities

For the period ending June 30, 2013, the authorities provided to the CBSA are comprised of the Main Estimates only, while authorities at the same time last year consisted of both the Main Estimates and Supplementary Estimates (A).  The Agency is experiencing an overall decrease in funding from the same time last year.

As at June 30, 2013, the Statement of Authorities (Table 1) reflects total authorities available of $1,680.2 million, compared to $1,795.0 million at the same quarter last year.  The result is a net decrease of $114.8 million or 6.8% in authorities.

The Agency has $1,680.2 million of total available funding, with $20.5 million currently frozen and only eligible for spending once the appropriate Treasury Board conditions are met.  Therefore, the total funding available to spend is $1,659.7 million.

The Agency has also experienced an increase of $2.4 million in its Vote Netted Revenues (VNR) from $9.7 million in quarter one of 2012-2013 to $12.1 million at the same time this year.  This is mainly the result of an increase in volumes related to User Fee items.  Increases in revenues are caused by incremental program costs for VNR eligible items and are related to program growth.  Therefore, there is no impact to the overall Agency funding since the increased revenues offset increased program expenditures in Vote 10 Operating Expenditures.     

Return to Top of Page

Vote 10 – Operating Expenditures Increases - $81.1 million

  • $24.1 million to improve the integrity of the CBSA front-line operations;
  • $18.6 million to increase the funding for Shared Infrastructure Platform, which ensures CBSA has a sound information technology (IT) infrastructure that houses and protects IT assets;
  • $6.1 million to increase the funding for arming of Canada Border Officers and addressing work-alone situations;
  • $5.0 million to enhance activities, pursuant to the Protecting Canada's Immigration System Act, related to the cessation and vacation of refugee claims;
  • $4.3 million to address challenges in the management of security inadmissibility cases and in protecting classified information in immigration proceedings;
  • $3.6 million to develop electronic applications for trusted travellers and traders and to expand NEXUS by nine lines – Beyond the Border;
  • $3.2 million for the eligible funding for all new collective bargaining agreements signed between December 10th, 2011 and March 31st 2012;
  • $3.0 million from Shared Services Canada to adjust the amounts as a result of the creation of Shared Services Canada;
  • $3.0 million to reengineer, streamline and modernize its revenue and trade processes;
  • $3.0 million to support the sharing of immigration information with the United States;
  • $1.9 million related to the assessment, management and remediation of federal contaminated sites;
  • $1.4 million for the overall security of Pan American and Parapan American Games;
  • $1.0 million is an increase of the funding to implement the Accounts Receivable Ledger but is offset by a larger amount in Vote 15;
  • $0.7 million to implement an IT solution to facilitate data transmission with external users and other government departments; 
  • $0.7 million from Citizen and Immigration Canada to support National Case Management System (NCMS);
  • $0.4 million to support the amendment to the Immigration and Refugee Protection Act that removes visa exemptions for citizens of five countries;
  • $0.4 million to increase the funding for Air Cargo Security;
  • $0.4 million to decrease the reduction of the Strategic Review; and
  • $0.3 million to implement the Postal Modernization Initiative.
Return to Top of Page

The Vote 10 increases are offset by the following decreases - $182.0 million

  • $72.8 million for Deficit Reduction Action Plan savings measures announced in Budget 2012;
  • $65.0 million for Arming and E-Manifest through the Economic and Fiscal Statement.  This funding will sunset in 2013-2014 as part of a loan repayment schedule;
  • $27.1 million to decrease the funding to implement the Bill C-11, an Act to amend the Immigration and Refugee Protection Act (Balanced Refugee Reform Act) and the Federal Courts Act;
  • $6.7 million to decrease the funding of Data Centre Recovery, which enhances the recovery processes and related technology elements;
  • $3.0 million to implement the CBSA Assessment and Revenue Management (CARM) Project (2012-2013 SEA);
  • $2.0 million in contributions to the employee benefit plan due to the rate decrease  from 17.6% to 17.4%;
  • $1.7 million related to the transfer from the Royal Canadian Mounted Police - For administering relevant requirements of the Firearms Act (2012-2013 SEA); 
  • $1.0 million to decrease the funding to implement the electronic passport;
  • $0.9 million for Contraband Tobacco, the funds will sunset in 2013-2014;
  • $0.7 million related to the transfer from Citizenship and Immigrations Canada -To cover the application development and support of NCMS (2012-2013 SEA); 
  • $0.6 million to decrease the funding to implement approved policy direction to enhance identity management through the use of biometrics in the Temporary Resident Immigration Program;
  • $0.2 million from Transport Canada for the Commercial Marine Export Examination Mapping Exercise, the funding will sunset in 2013-2014;
  • $0.2 million from CBSA to Foreign Affairs and International Trade Canada to provide support to departmental staff located at missions abroad; and
  • $0.1 million from CBSA to Privy Council Office for its Business Transformation and Renewal Secretariat.

Vote 15 – Capital Expenditures Increases - $43.1 million

  • $13.7 million to implement the Postal Modernization Initiative;
  • $12.3 million to reengineer, streamline and modernize its revenue and trade processes;
  • $6.6 million to develop electronic applications for trusted travellers and traders and to expand NEXUS by nine lines – Beyond the Border;
  • $6.3 million is a reprofile from 2011-2012 to 2013-2014 for Detection Technology, which will procure high-valued equipment that will be used to detect illegal goods for seizure; and
  • $4.2 million to support the sharing of immigration information with the United States.
Return to Top of Page

The Vote 15 increases are offset by the following decreases - $57.0 million

  • $15.1 million is a reprofile from 2011-2012 to 2012-2013 for Small Port Replacement;
  • $13.5 million to implement the CBSA Assessment and Revenue Management (CARM) Project (2012-2013 SEA);
  • $10.6 million is a reprofile from 2011-2012 to 2012-2013 for Arming Initiative;
  • $6.4 million is a reprofile from 2011-2012 to 2012-2013 for Account Receivable Ledger, which provides detailed accounting of revenue information devoted to each commercial client;
  • $5.0 million to decrease the funding from Transport Canada to expand the commercial processing facilities at St-Bernard de Lacolle;
  • $4.0 million to decrease the funding to implement the Account Receivable Ledger, which provides detailed accounting of revenue information devoted to each commercial client;
  • $1.7 million to decrease the funding to implement the Bill C-11, an Act to amend the Immigration and Refugee Protection Act (Balanced Refugee Reform Act) and the Federal Courts Act; and
  • $0.4 million to decrease the funding to implement approved policy direction to enhance identity management through the use of biometrics in the Temporary Resident Immigration Program.
  • $0.3 million to decrease the funding for Marine Security.

2.2 Explanations of Significant Variances in Expenditures from Previous Year

The quarter one Departmental Budgetary Expenditures by Standard Object (Table 2) indicates a decrease in expenditures of $4.7 million or 1.3%, $362.4 million in 2012-2013 compared to $357.7 million in 2013-2014. 

The decrease of $4.7 million in acquisition of land, building and works was a result of fewer infrastructure projects this year.

Return to Top of Page

3. Risks and Uncertainties

The CBSA is facing a rapidly changing and complex environment that expects to see an increase in the number of people and goods coming across the border over the next 10 years. While the U.S. will continue to be Canada's most important partner, Canada is diversifying its trading partners and is actively negotiating investment and free trade agreements with other countries. The increase in countries participating in international trade and travel introduced new challenges in protecting Canadians and the supply chain from potential security threats. In considering these factors the CBSA has embarked on business transformation initiatives that will allow the organization to be even more efficient and effective in the way it does business add more agile in dealing with challenges and containing costs.

Budget 2010 Cost Containment Measures have required the CBSA to finance, on a permanent basis, the costs of wage increases resulting from current and future collective agreements negotiated between 2010–2011 and 2012–2013. The ongoing impact of the Budget 2010 Cost Containment Measure has resulted in the realignment of internal funding to offset this new increased Agency pressure.

In recognition of this tightening fiscal environment, the CBSA has taken a more rigorous approach to the management of revenues, expenditures, projects and forecasting and commitment monitoring. These steps began in mid-fiscal year 2009–2010 to address the rapidly changing economic climate. The Agency has introduced more comprehensive monthly analyses of trends and forecasts of full-time equivalents and salary and non-salary expenditures to ensure affordability and sustainability. These measures, along with other budgetary restrictions, have been put in place to mitigate the impact of the operating freeze.

In addition, the CBSA is also in the process of maturing the integrated horizontal program management tables to oversee its business. This is in addition to the organizational view currently in place. There has also been greater attention and focus given to adopting stronger controls and processes surrounding project reporting and monitoring.

The Agency is ensuring that integration exists between the investment plan and business plans, and that risk and complexities are considered when new business initiatives are proposed within the context of these plans.

In 2012 the Agency undertook an update to its 2011 Enterprise Risk Profile (ERP). The aim of the 2012 ERP Status Update was to provide information on changes to the Agency's risk environment, thereby allowing senior management an opportunity to determine if the Agency is still responding appropriately to the risks identified in 2011.

Based on the results of the 2012 ERP Status, four of the 14 ERP risks currently being mitigated had slightly increased (IT Systems, Human Resources, Management of Border Programs, and Organizational Responsiveness), while effective implementation of mitigation activities had reduced the Agency's exposure to two of its risks (Information Management and Targeting). The remaining ERP risks remained at approximately the same level of severity as when they were assessed in 2011.

The increases in risk exposure for the four ERP risks identified above were not significant in nature, and were largely due to external challenges beyond the CBSA's immediate control. These external factors include the implementation of the Deficit Reduction Action Plan (DRAP) and the implementation of the Beyond the Border Action Plan.

Return to Top of Page

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

Key Senior Personnel

There have been changes in senior level personnel, most notably the appointment of new Vice Presidents for Corporate Affairs and Information Science and Technology Branches.

External Reporting

New requirements for the reporting of financial information have been placed on departments as a result of the approval in 2010-2011 of the Policy on Financial Resource Management, Information and Reporting, amendment of the Treasury Board Accounting Standard (TBAS) 1.3, the new Directive on the Management of Travel, Hospitality and Conferences and the Parliamentary Budget Officer requests.

These policies/directives now require departments to produce auditable financial statements, comprehensive Future-Oriented Financial Statements and Quarterly Financial Reports, a comparative annual report on travel, hospitality and conference expenditures and reports on Supplementary Estimates by Program Activity to the Parliamentary Budget Officer. These reports have resulted in more requirements being placed on existing departmental personnel to retrieve, consolidate and produce these documents.

Budget 2012 Implementation

This section provides an overview of the savings measures announced in Budget 2012 that are being implemented in order to refocus government and programs: make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.

The CBSA will achieve Budget 2012 savings of $143.4 million by fiscal year 2014-2015 through efficiency measures by restructuring, modernizing programs and transforming business practices in select areas. With these changes the CBSA will focus on supporting management excellence and accountability across government. In the first year of implementation, the CBSA generated $31.3 million in savings. Those savings increase to $72.8 million in 2013-2014 and will result in ongoing saving of $143.4 million by 2014-2015.

As a result of Budget 2012, the CBSA is implementing its plan to:

  • streamline and simplify its approach to internal services through the use of more technology and less cumbersome processes;
  • optimize programs to get better results at reduced costs;
  • transform programs in order to eliminate red tape, provide better services to Canadians, and reduce costs; and
  • adjust front-line service delivery where adjustments can be made without impacting service levels.

Supplementary data on Budget 2012 savings by program activity is included in Annex A below.

The CBSA achieved its target for 2012-2013 and is on track to fully achieve its savings for 2013 2014, 2014-2015 and ongoing. The CBSA is actively managing the implementation of all initiatives through regular and sustained monitoring, ensuring that the delivery is proceeding on time, on plan, and on budget.

The initiatives under Budget 2012 will further enable the CBSA to focus and align resources to its key priorities and core mandate; meeting current and future security and service requirements to serve Canadians and provide them with a modern, dynamic border.

Impacts of Budget 2012 have been included to date for quarter one and budgets and expenditures have been reduced accordingly.

Annex A

  Planned Savings
Program Activity 2012-13 2013-14 2014-15
& ongoing
  (in thousands of dollars) 
Risk Assessment 5,452 10,168 11,209
Admissibility Determination 7,254 20,469 30,494
Criminal Investigations 15 73 118
Immigration Enforcement 103 1,152 3,432
Secure and Trusted Partnerships 158 327 7,706
Revenue and Trade Management 1,753 3,994 9,816
Recourse 129 302 609
Internal Services 16,415 36,295 80,024
Total for CBSA 31,279 72,780 143,408

 

Return to Top of Page

New Programs

On December 7, 2011, Prime Minister Stephen Harper and U.S. President Barack Obama announced a Canada–U.S. Action Plan in support of last February's Declaration of a Shared Vision for Perimeter Security and Economic Competitiveness (Perimeter Vision). The CBSA will play an instrumental role in implementing the Action Plan; there are ten initiatives that the Agency will lead, another nine in which the Agency plays a key supporting role and nine in which the Agency has an interest.

Although the action plan has been announced, details of all of the individual initiatives have not yet been tabled in Parliament. As such, not all of the Perimeter Vision initiatives have been included in the current Investment Plan to respect Budget confidentiality. As initiatives are approved, they will be incorporated into the CBSA Investment Plan process.

Return to Top of Page

5. Approval by Senior Officials

Approved by:

Luc Portelance
President
Claude Rochette
Chief Financial Officer


Ottawa, Canada
Date: August 29, 2013


Canada Border Services Agency
Quarterly Financial Report
For the quarter ended June 30, 2013

Return to Top of Page

6. Table 1: Statement of Authorities (Unaudited)

  Fiscal Year 2013–2014   Fiscal Year 2012–2013
(in thousands of dollars) Total available for use for the year ending March 31, 2014* Used during the quarter ended June 30, 2013 Year-to-date used at quarter end   Total available for use for the year ending March 31, 2013*,*** Used during the quarter ended June 30, 2012 Year-to-date used at quarter end
Vote 10 – Net Operating Expenditures 1,396,653 308,361 308,361   1,495,283 309,011 309,011
Vote 15 – Capital Expenditures 104,335 4,346 4,346   118,177 7,806 7,806
Statutory Authority - Contributions to employee benefit plans 179,164 44,791 44,791   181,491 45,373 45,373
Statutory Authority - Court Awards - Crown Liability Act 0 0 0   0 50 50
Statutory Authority - Refunds of amounts credited to revenues in previous years 0 15 15   0 27 28
Statutory Authority - Spending of proceeds from the disposal of surplus Crown assets 0 145 145   0 84 84
Total budgetary authorities 1,680,153 357,658 357,658   1,794,950 362,351 362,351
Non-budgetary authorities 0 0 0   0 0 0
Total Authorities 1,680,153 357,658 357,658   1,794,950 362,351 362,351

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

*** Total available for use does not reflect measures announced in Budget 2012.

Canada Border Services Agency
Quarterly Financial Report
For the quarter ended June 30, 2013

Return to Top of Page

7. Table 2: Departmental Budgetary Expenditures by Standard Object (Unaudited)

  Fiscal Year 2013–2014   Fiscal Year 2012–2013
(in thousands of dollars) Planned expenditures for the year ending March 31, 2014 Expended during the quarter ended June 30, 2013 Year-to-date used at quarter end   Planned expenditures for the year ending March 31, 2013* Expended during the quarter ended June 30, 2012 Year-to-date used at quarter end
Expenditures              
Personnel 1,208,843 301,010 301,010   1,221,887 301,175 301,175
Transportation and communications 61,147 7,770 7,770   66,144 9,580 9,580
Information 1,293 476 476   1,620 204 204
Professional and special services 267,230 39,456 39,456   324,977 35,900 35,900
Rentals 8,759 1,728 1,728   9,039 2,324 2,324
Repair and maintenance 24,275 4,449 4,449   24,595 3,802 3,802
Utilities, materials and supplies 20,163 2,211 2,211   20,224 3,645 3,645
Acquisition of land, buildings and works 31,727 337 337   62,413 5,927 5,927
Acquisition of machinery and equipment 60,713 2,474 2,474   46,215 1,422 1,422
Transfer payments 0 0 0   0 0 0
Other subsidies and payments 8,132 -542 -542   27,546 426 426
Total gross budgetary expenditures 1,692,283 359,396 359,396   1,804,660 364,405 364,405
               
Less revenues netted against expenditures              
Sales of Services 12,130 1,726 1,726   9,710 2,081 2,081
Other Revenue 0 -15 -15   0 -27 -27
Total revenues netted against expenditures 12,130 1,711 1,711   9,710 2,054 2,054
Total net budgetary expenditures 1,680,153 357,658 357,658   1,794,950 362,351 362,351

* Planned expenditures do not reflect measures announced in Budget 2012.