ARCHIVED - Quarterly Financial Report for the quarter ended June 30, 2016 (unaudited)

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Quarterly Financial Report for the quarter ended June 30, 2016 (unaudited) (PDF, 313 KB)

1. Introduction

The Government of Canada uses financial information to support decision making, for policy development, for service delivery and for historical reference. These financial statements have been prepared to respond to these requirements. This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates and Supplementary Estimates (A). The QFR should be read in conjunction with the Main Estimates, Supplementary Estimates (A) as well as Canada's Economic Action Plan (Budget 2012, Budget 2013, Budget 2014, Budget 2015 and Budget 2016). They have been prepared by management as required by section 65.1 of the Financial Administration Act (R.S.C., 1985, c. F-11) and in the form and manner prescribed by the Treasury Board of Canada Secretariat. Although these statements have not been subject to an external audit or review, the National Research Council Canada (NRC) attests that they are an accurate and true reflection of the financial position for the period ended June 30, 2016.

1.1 NRC Mandate

The NRC exists under the National Research Council Act (R.S.C., 1985, c. N-15) and is a Departmental corporation named in Schedule II of the Financial Administration Act (R.S.C., 1985, c. F-11). The mission of the NRC is to work with clients and partners to provide innovation support, strategic research, and scientific and technical services to develop and deploy solutions to meet Canada's current and future industrial and societal needs.

Under the National Research Council Act (R.S.C., 1985, c. N-15), the NRC is responsible for:

  • Undertaking, assisting or promoting scientific and industrial research in fields of importance to Canada;
  • Providing vital scientific and technological services to the research and industrial communities;
  • Investigating standards and methods of measurement;
  • Working on the standardization and certification of scientific and technical apparatus, instruments and materials used or usable by Canadian industry;
  • Operating and administering any astronomical observatories established or maintained by the Government of Canada;
  • Establishing, operating and maintaining a national science library; and
  • Publishing and selling or otherwise distributing such scientific and technical information as the Council deems necessary.

Further details on the NRC's legislative framework, authority, mandate and program activities can be found in Part II of the Main Estimates and the Report on Plans and Priorities.

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 the NRC's spending authorities granted by Parliament and those used by the NRC consistent with the Main Estimates and Supplementary Estimates (A) for 2016-17. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use for spending authorities.

The authority of Parliament is required before moneys can be spent by the Government of Canada. 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 (pursuant to paragraph 5(1)(e) of the National Research Council Act (R.S.C., 1985, c. N-15), the NRC has authority to expend revenues it has received through the conduct of its operations).

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act (R.S.C., 1985, c. F-11) authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government of Canada 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 NRC uses the full accrual method of accounting to prepare and present its annual departmental financial statements which are part of the Departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

This section highlights the items that contributed most significantly to the changes in budgetary authorities for the current fiscal year and to the actual expenditures for the quarter that ended on June 30, 2016 compared with the previous fiscal year. This section should be read in conjunction with the NRC's tables entitled Statement of Authorities and Departmental budgetary expenditures by Standard Object found on the last 2 pages of this report.

2.1 Authorities and Expenditures

The following graph provides a comparison of the budgetary authorities and expenditures as of June 30, 2016 and those as of June 30, 2015.

Comparison of Budgetary Authorities and Expenditures
as of June 30, 2016 and June 30, 2015
(in millions of dollars)

Comparison of Budgetary Authorities and Expenditures. Long description follows.
Long description of the Comparison of Budgetary Authorities and Expenditures
FY 2016‑2017 FY 2015‑2016
Authorities $1,257.5 $1,132.9
Expenditures - Quarter 1 $186.1 $161.7

As shown in the graph above, the NRC's expenditures totalled $186.1M during the first quarter of 2016-17 which represents an increase of $24.4M over the first quarter of 2015-16. Higher expenditures are mainly attributable to the combined increase of $5.3M in operating and statutory revenue expenditures, an increase of $3.5M in capital expenditures as well as an increase of $13.6M in Grants and Contributions. Refer to 2.3 Significant Changes to Budgetary Expenditures for additional details.

2.2 Significant Changes to Authorities

As of June 30, 2016, the authorities were $1,257.5M, representing an increase of $124.6M (11.0%) in comparison to the 2015-16 authorities of the same period. The following table summarizes the significant changes to NRC authorities:

Significant Changes to Authorities (unaudited)
For the year ending March 31, 2016 - As of June 30, 2016
(in millions of dollars)

Vote 1
Operating
Vote 5
Capital
Vote 10
Grants & Contributions
Statutory Revenues Contributions to EBP Total
Authorities – Total available for use for the year ending March 31, 2016 - As of June 30, 2015 1,132.9
2014 Federal Infrastructure Initiative 0.1 50.2 50.3
2016 Federal Infrastructure Initiative (Budget 2016) 0.9 3.3 4.2
Support R&D by small and medium sized firms (IRAP) (Budget 2016) 50.0 50.0
Thirty Meter Telescope Observatory (Budget 2015) 2.3 16.9 19.2
Thirty Meter Telescope Observatory (Reprofile) 15.0 15.0
Canada Accelerator and Incubator Program (Reprofile) 3.7 3.7
TRIUMF 9.2 9.2
Statutory Revenue Carry Forward adjustment 2.1 2.1
Youth Employment Strategy (15.0) (15.0)
Business Innovation Access Program (0.2) (9.8) (10.0)
Support R&D by small and medium sized firms (IRAP) 5.5 (5.5) -
Other (1.7) (2.3) (0.1) (4.1)
Total increase (decrease) in authorities in comparison to prior year 4.6 55.8 62.2 2.1 (0.1) 124.6
Authorities – Total available for use for the year ending March 31, 2017 - As of June 30, 2016 1,257.5

The increase of $124.6M in authorities is explained by the following items:

  • An increase of $50.3M for the 2014 Federal Infrastructure initiative when compared to previous year due to the funding profile of the Initiative;
  • An increase of $4.2M for the 2016 Federal Infrastructure as announced in Budget 2016;
  • An increase of $50.0M to support research and development by small and medium sized firms as announced in Budget 2016;
  • An increase of $19.2M for the Thirty Meter Telescope Observatory when compared to previous year due to the funding profile of the Project;
  • An increase of $18.7M due the reprofiling of funds in the amounts of $15.0M for the Thirty Meter Telescope Observatory and $3.7M for the Canada Accelerator and Incubator Program;
  • An increase of $9.2M for TRIUMF due to the funding profile of the Program;
  • An increase of $2.1M in statutory revenue carry-forward for use in subsequent years following the close of fiscal year 2015-16; offset by
  • A decrease of $15.0M in the Youth Employment Strategy Program due the sunsetting of the 2014 Budget funding;
  • A decrease of $10.0M due to the sunsetting of the Business Innovation Access Program; and
  • A net decrease of $4.1M for various items.

2.3 Significant Changes to Budgetary Expenditures

This section should be read in conjunction with the NRC's tables entitled Statement of Authorities and Departmental budgetary expenditures by Standard Object both located at the end of this report.

2.3.1 Variances in Year-to-date Expenditures

As of June 30, 2016, year-to-date expenditures were $186.1M, representing an increase of $24.4M (15.1%) in comparison to the 2015-16 expenditures of the same period. This increase is mostly attributable to the following items:

  • Combined operating expenditures and statutory revenue expenditure increased by $5.3M compared with the same period of the previous fiscal year. This change is mainly attributable to an increase of $4.6M in personnel expenses and related employee benefits.
  • Capital expenditures increased by $3.5M. The increase is mainly attributable an increase of acquisition of machinery and equipment (special industry machinery, computer equipment as well as research equipment).
  • Transfer payments consisting of Grants & Contributions (G&C) expenditures increased by $13.8M compared with the same period in the previous year. This change is principally attributable to a timing difference and increase of funding of contribution payments to TRIUMF of $10.6M and of contributions to Firms of $4.7M, offset by a decrease in contributions for the Youth Employment Strategy of $1.9M due to the sunsetting of the 2014 Budget funding.

3. Risks and Uncertainties

For the quarter ended June 30, 2016, client engagement and revenue exceeded expectations for FY2015-16 resulting in a decline in NRC's risks and uncertainties around delivering results for clients and Canada. NRC is monitoring and engaging in the development of the Federal Innovation Agenda and looking for opportunities to increase collaboration with other innovation system players. As part of NRC’s emergency preparedness risk management focus, NRC continues to improve IT and security management.

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

NRC is continuing efforts to increase operational efficiencies in the Secure IT environment, and effectively managing leadership transitions (e.g., VP Emerging Technologies, CFO). Resources have been added to strengthen NRC’s environmental stewardship efforts.

No significant changes to programs beyond regular and ongoing course adjustments as part of program progress reviews.

Approved by Senior Officials
Approved by:

Iain Stewart,
President

Gail McLellan, CPA, CMA
Director General, Finance Branch
and Chief Financial Officer (Acting)

Ottawa, Canada
August 24, 2016

5. Statement of Authorities

Statement of Authorities (unaudited)
For the quarter ended June 30, 2016

Fiscal Year 2016‑2017 (in thousands of dollars)

Total available
for use for the
year ending
March 31, 2017Table 1 note 1
Used during
the quarter ended
June 30, 2016
Year to date
used at
quarter-end
Vote 1 - Operating expenditures 401,656 71,647 71,647
Vote 5 - Capital expenditures 112,109 5,417 5,417
Vote 10 - Grants and contributions 369,875 50,697 50,697
Statutory revenue Table 1 note 2 324,566 46,025 46,025
Statutory EBP 49,302 12,323 12,323
Total Budgetary authorities 1,257,508 186,109 186,109

Fiscal Year 2015-2016 (in thousands of dollars)

Total available for
use for the
year ending
March 31, 2016 Table 1 note 1
Used during the
quarter ended
June 30, 2015
Year to date
used at
quarter-end
Vote 1 - Operating expenditures 396,982 71,513 71,513
Vote 5 - Capital expenditures 56,303 1,871 1,871
Vote 10 - Grants and contributions 307,659 36,901 36,901
Statutory revenue Table 1 note 2 322,535 40,863 40,863
Statutory EBP 49,427 10,551 10,551
Total Budgetary authorities 1,132,906 161,699 161,699

Table notes

Table 1 note 1

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

Return to table 1 note 1 referrer

Table 1 note 2

Includes Statutory Revenue available for use in future years pursuant to paragraph 5(1)(e) of the National Research Council Act (R.S.C., 1985, c. N-15).

Return to table 1 note 2 referrer

6. Departmental budgetary expenditures by Standard Object

Departmental budgetary expenditures by Standard Object (unaudited)
For the quarter ended June 30, 2016

Fiscal Year 2016‑2017 (in thousands of dollars)

Planned expenditures
for the year ending
March 31, 2017
Expended
during the
quarter ended
June 30, 2016
Year to date
used at
quarter-end
Expenditures:
Personnel 465,507 98,142 98,142
Transportation and communications 23,846 2,957 2,957
Information 2,730 330 330
Professional and special services 79,209 9,805 9,805
Rentals 9,704 2,106 2,106
Purchased repair and maintenance 31,442 4,167 4,167
Utilities, materials and supplies 64,656 4,829 4,829
Acquisition of land, buildings and works 101,980 3,323 3,323
Acquisition of machinery and equipment 85,958 7,476 7,476
Transfer payments 369,875 50,697 50,697
Other subsidies and payments 22,601 2,277 2,277
Total net budgetary expenditures 1,257,508 186,109 186,109

Fiscal Year 2015‑2016 (in thousands of dollars)

Planned expenditures
for the year ending
March 31, 2016
Expended during
the quarter ended
June 30, 2015
Year to date
used at
quarter-end
Expenditures:
Personnel 464,599 94,158 94,158
Transportation and communications 20,490 2,676 2,676
Information 2,030 336 336
Professional and special services 85,480 7,655 7,655
Rentals 9,359 1,814 1,814
Purchased repair and maintenance 27,616 3,577 3,577
Utilities, materials and supplies 65,151 5,691 5,691
Acquisition of land, buildings and works 31,227 1,393 1,393
Acquisition of machinery and equipment 91,710 5,084 5,084
Transfer payments 307,659 36,901 36,901
Other subsidies and payments 27,585 2,414 2,414
Total net budgetary expenditures 1,132,906 161,699 161,699
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