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Quarterly Financial Report for the quarter ended June 30, 2021 (unaudited) (PDF, 1.14 MB)
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of Canada uses financial information to support decision making, for policy development, for service delivery and for historical reference.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, the Federal Budget (Budget 2016, Budget 2017, Budget 2018, Budget 2019 and Budget 2021) as well as Canada's COVID-19 Economic Response Plan. 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 of Canada (NRC) attests that they are an accurate and true reflection of the financial position for the period ended June 30, 2021.
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 have an impact by advancing knowledge, applying leading-edge technologies, and working with other innovators to find creative, relevant and sustainable solutions to Canada's current and future economic, social and environmental challenges.
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
- 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 Departmental Plan.
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 for 2021-22, 2021-22 Supplementary Estimates (A) and Canada's COVID-19 Economic Response Plan. 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, 2021 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, 2021 and those as of June 30, 2020.
Long description of the Comparison of Budgetary Authorities and Expenditures
(in millions of dollars)
FY 2021-22 | FY 2020-21 | |
---|---|---|
Authorities | $1,579.9 | $1,408.5 |
Expenditures - Quarter 1 | $261.1 | $381.6 |
As shown in the graph above, the NRC's expenditures totalled $261.1M during the first quarter of 2021–22 which represents a decrease of $120.5M over the first quarter of 2020-21. Lower expenditures are attributable to a decrease of $172.5M in other statutory expenses mainly related to the Industrial Research Assistance Program – Innovative Assistance Program which is part of NRC's COVID-19 response, offset mainly by an increase of $30.2M in Grants and Contributions expenditures and an increase of $14.5M in capital expenditures. Refer to 2.3 Significant changes to budgetary expenditures for additional details.
2.2 Significant changes to authorities
As of June 30, 2021, the authorities were $1,579.9M, representing an increase of $171.4M (12.2%) in comparison to the 2020-21 authorities of the same period.
The increase of $171.4M in authorities is mainly explained by the following items:
- In prior year, as at June 30th, 2020, only nine twelfth of NRC's 2020-21 Main Estimates voted appropriations were released. Consequently, $243.1M were not supplied as of prior year Q1 due to amended House of Commons Standing Orders. As of June 30, 2021, the full supply has been released;
- As part of NRC's response to COVID-19, NRC received additional Grants & Contribution funding for the Industrial Research Assistance Program, including $60.0M in additional funding for its Youth Employment Strategy and Skills Program and $41.0M for the Vaccine & Therapeutics Program;
- Increase of $35.7M in funding for the completion of NRC's new Biologics Manufacturing Centre (BMC);
- An increase of $10.9M related to the statutory revenue carry-forward;
- An increase of $6.5M in compensation allocation related to the signing of collective bargaining agreements; offset by
- A decrease of $6.2M for the construction and commissioning of the International Thirty Meter Telescope due to the revised financial profile of the program;
- A decrease of $25.1M in Federal Infrastructure Funding; and
- A decrease of $200.7M in funding of the NRC's response to COVID-19.
The following table summarizes the significant changes to NRC authorities:
Vote 1 Operating |
Vote 5 Capital |
Vote 10 Grants & Contributions |
Statutory Revenues | Contributions to EBP | Statutory - Other | Total | |
---|---|---|---|---|---|---|---|
Authorities - Total available for use for the year ending March 31, 2021 - As of June 30, 2020 | 1,408.5 | ||||||
Supply Adjustment (2020-21 Main Estimates) | 113.7 | 14.1 | 115.3 | - | - | - | 243.1 |
IRAP Youth Employment Skills Strategy | 1.0 | - | 60.0 | - | 0.1 | - | 61.1 |
IRAP Vaccines & Theraputics | - | - | 41.0 | - | - | - | 41.0 |
Royalmount Bio-Manufacturing | 13.8 | 20.0 | - | - | 1.9 | - | 35.7 |
Statutory Revenue Carryforward Adjustment | - | - | - | 10.9 | - | - | 10.9 |
Compensation Allocation | 6.5 | - | - | - | - | - | 6.5 |
Other | (6.2) | 9.2 | 1.8 | - | 0.3 | - | 5.1 |
Thiry Meter Telescope Observatory | - | - | (6.2) | - | - | - | (6.2) |
Federal Infrastructure | - | (25.1) | - | - | - | - | (25.1) |
National Research Council of Canada - COVID-19 Response Funding | (5.6) | 0.2 | 70.1 | - | (0.4) | (265.0) | (200.7) |
Total increase (decrease) in authorities in comparison to prior year | 123.2 | 18.4 | 282.0 | 10.9 | 1.9 | (265.0) | 171.4 |
Authorities - Total available for use for the year ending March 31, 2022 - As of June 30, 2021 | 1,579.9 |
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, 2021, year-to-date expenditures were $261.1M, representing a decrease of $120.5M (31.6%) in comparison to the 2020-21 expenditures of the same period. This decrease is mostly attributable to the following items:
- Other statutory expenses for transfer payments associated to NRC's COVID-19 response decreased by $172.5M for Industrial Research Assistance Program – Innovative Assistance Program;
- Transfer payments consisting of Grants and Contributions (G&C) expenditures increased by $30.2M compared with the same period in the previous year. This change is principally attributable to an increase of TRIUMF Contributions of $17.0M, an increase of IRAP Contributions to Firms of $8.0M, and an increase in IRAP's Youth Employment Program Contributions by $1.6M; and
- Capital expenditures increased by $14.5M compared with the same period of the previous fiscal year. This change is mainly attributable to an increase in the acquisition of land, buildings and works of $16.3M, offset by a decrease in the acquisition of machinery and equipment of $2.1M.
3. Risks and uncertainties
In the first quarter, the NRC updated its Corporate Risk and Issues Profile to reflect the organization's evolving risk context, including implications from the COVID-19 pandemic. The profile is focused on the following risks: collaboration management, financial stability, the protection of information assets and expanded access to highly qualified personnel (an opportunity to be capitalized on). The profile also includes mitigation strategies meant to address ongoing NRC issues, such as IT infrastructure and workplace wellness.
The most significant amendment to the profile was expanding the action plan for the protection of information assets risk to include cyber and physical security considerations, with targeted mitigation activities centred on ensuring NRC security. Efforts are underway to assess and secure the NRC's research IM/IT environment, while ensuring non-sensitive and collaborative research can occur in an agile manner.
4. Significant changes in relation to operations, personnel and programs
In April, all NRC senior executives signed a Commitment of Action toward a Diverse, Inclusive and Anti-Racist NRC, a pledge that confirms a personal and collective commitment to learn, reflect and take steps to drive positive and enduring change. The NRC recognizes that diversity fuels innovation and endeavours to be a workforce that is representative and inclusive of the people we serve.
The NRC appointed a new Chief Information Officer and Director General of the Knowledge, Information, and Technology Services Branch on April 26. Philippe Johnston brings along extensive experience in secure networks, cyber defense and service digitization from his roles at Transport Canada, Social Sciences and Humanities Research Council, Natural Science and Engineering Research Council, and the Treasury Board Secretariat.
April 27 marked the official launch of Mentoring@theNRC. This new mentorship program, open to all NRC employees across the country, will enable connections between mentors and mentees on a range of topics including career development, managing work-life balance, and acquiring new leadership skills. The "all NRC" program leveraged key learnings from the success of the NRC's mentorship pilot program focused on women in STEM in NRC Quebec offices.
On June 22, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, announced the completion of the construction phase for the NRC's new Biologics Manufacturing Centre (BMC) in Montréal, Quebec. A project that would normally take two years or more to complete, the BMC was constructed in just 10 months – one month ahead of schedule. The BMC is a critical piece of the Canadian biomanufacturing value chain, with the goal of a more resilient Canada.
Approved by senior officials
Approved by:
Mitch Davies
President
Dale MacMillan
Vice-President, Corporate Services and Chief Financial Officer
Ottawa, Canada
5. Statement of Authorities (unaudited)
For the quarter ended June 30, 2021
Total available for use for the year ending March 31, 2022 Table 2 note 1 |
Used during the quarter ended June 30, 2021 |
Year to date used at quarter-end | |
---|---|---|---|
Vote 1 - Operating expenditures | 484,741 | 107,309 | 107,309 |
Vote 5 - Capital expenditures | 81,720 | 22,390 | 22,390 |
Vote 10 - Grants and contributions | 647,864 | 84,916 | 94,916 |
Statutory revenue Table 2 note 2 | 299,821 | 30,054 | 30,054 |
Statutory EBP | 65,717 | 16,399 | 16,399 |
Statutory - Other Table 2 note 3 | - | - | - |
Total Budgetary authorities | 1,579,863 | 261,068 | 261,068 |
Total available for use for the year ending March 31, 2021 Table 3 note 1 |
Used during the quarter ended June 30, 2020 |
Year to date used at quarter-end | |
---|---|---|---|
Vote 1 - Operating expenditures | 361,641 | 104,312 | 104,312 |
Vote 5 - Capital expenditures | 63,300 | 7,926 | 7,926 |
Vote 10 - Grants and contributions | 365,852 | 54,717 | 54,717 |
Statutory revenue Table 3 note 2 | 288,920 | 26,398 | 26,398 |
Statutory EBP | 63,784 | 15,751 | 15,751 |
Statutory revenue Table 3 note 3 | 265,000 | 172,535 | 172,535 |
Total Budgetary authorities | 1,408,497 | 381,639 | 381,639 |
Table notes
- Table note 1
-
Includes only Authorities available for use and granted by Parliament at quarter-end.
- Table 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).
- Table note 3
-
Includes payments pursuant to section 2 of the Public Health Events of National Concern Payments Act and the Canada Emergency Response Benefit Act.
6. Departmental budgetary expenditures by Standard Object (unaudited)
For the quarter ended June 30, 2021
Total available for use for the year ending March 31, 2022 Table 4 note 1 |
Used during the quarter ended June 30, 2021 |
Year to date used at quarter-end | |
---|---|---|---|
Expenditures: | |||
Personnel | 509,277 | 127,805 | 127,805 |
Transportation and communications | 26,705 | 278 | 278 |
Information | 2,872 | 129 | 129 |
Professional and special services | 117,555 | 8,930 | 8,930 |
Rentals | 17,021 | 3,835 | 3,835 |
Purchased repair and maintenance | 31,137 | 3,028 | 3,028 |
Utilities, materials and supplies | 70,261 | 4,782 | 4,782 |
Acquisition of land, buildings and works | 38,783 | 17,610 | 17,610 |
Acquisition of machinery and equipment | 87,241 | 7,499 | 7,499 |
Transfer payments | 647,864 | 84,916 | 84,916 |
Other subsidies and payments | 31,147 | 2,256 | 2,256 |
Total net budgetary expenditures | 1,579,863 | 261,068 | 261,068 |
Total available for use for the year ending March 31, 2021 Table 5 note 1 |
Used during the quarter ended June 30, 2020 |
Year to date used at quarter-end | |
---|---|---|---|
Expenditures: | |||
Personnel | 385,952 | 122,101 | 122,101 |
Transportation and communications | 25,649 | 213 | 213 |
Information | 3,882 | 200 | 200 |
Professional and special services | 94,554 | 8,582 | 8,582 |
Rentals | 18,803 | 2,198 | 2,198 |
Purchased repair and maintenance | 24,783 | 2,115 | 2,115 |
Utilities, materials and supplies | 88,080 | 3,962 | 3,962 |
Acquisition of land, buildings and works | 49,915 | 1,897 | 1,897 |
Acquisition of machinery and equipment | 46,798 | 11,746 | 11,746 |
Transfer payments | 630,852 | 227,252 | 227,252 |
Other subsidies and payments | 39,229 | 1,373 | 1,373 |
Total net budgetary expenditures | 1,408,497 | 381,639 | 381,639 |