Canada Border Services Agency
Symbol of the Government of Canada

Quarterly Financial Report
For the quarter ended December 31, 2012

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Warning This page has been archived.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, Supplementary Estimates (A) and (B) 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 for the 2012-2013 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 2012-13 Main Estimates.

In fiscal year 2012-2013, frozen allotments will be established by Treasury Board authority in departmental votes to prohibit the spending of funds already identified as savings measures in Budget 2012. In future years, the changes to departmental authorities will be implemented through the Annual Reference Level Update, as approved by Treasury Board, and reflected in the subsequent Main Estimates tabled in Parliament.

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.

The CBSA also operates on the basis of a two-year appropriation, whereby any carry forward amount reported at the end of a fiscal year is available to be used the following year. However, any portion of the carry forward amount 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 December 31, 2012.

Graph 1:

Comparison of Net Budgetary Authorities and Expenditures as of December 31, 2011 and December 31, 2012 (in thousands $)

The above graph shows a comparison between the net budgetary authorities and expenditures for the quarters ending December 31, 2011 and December 31, 2012. The net budgetary authorities for the quarter ending December 31, 2012 were  $1,794,950K, down from $1,846,455K for the same quarter ending in 2011, while the net expenditures for the quarter ending December 31, 2012 were  $362,351K, down from $412,094K for the same quarter ending in 2011.

2.1 Significant Changes to Authorities

For the period ending December 31, 2012, the authorities provided to the CBSA include Main Estimates, Supplementary Estimates (A) and (B), 2011-2012 Carry-Forward and Treasury Board Vote 15 (Collective Agreements) and 30 (Paylist Expenditures). This represents an overall decrease in funding from the same time last year.

As at December 31, 2012, the Statement of Authorities (Table 1) reflects total authorities available of $2,060.1 million, compared to $2,115.6 million at the same quarter last year. The result is a net decrease of $55.5 million in authorities.

Return to Top of Page

Vote 10 – Operating Expenditures

Increases – $216.5 million:
  • $99.2 million of carry-forward funding from 2011-2012 (2011-12 Carry Forward)
  • $22.1 million to ensure continued and secure border services (Main Estimates)
  • $20.3  million to improve the integrity of the CBSA front-line operations (2012-13 SEB)
  • $11.8 million of conversion factor from 2011-12 (2011-12 SEB)
  • $11.0 million to support the reform of Canada’s refugee determination system (Balanced Refugee Reform Act) (Main Estimates)
  • $8.7 million for Canada Post Corporation (CPC) (2011-12 SEB)
  • $7.0 million for arming the Canada Border Officers at the border and addressing work-alone situations (Main Estimates)
  • $4.5 million for the implementation of the Harmonized Sales Tax (HST) (Main Estimates)
  • $3.9 million to transfer the administration of the federal immovable Property located at Rigaud, Quebec from Public Works and Government Services Canada (PWGSC) to the Minister of Public Safety for the CBSA (Main Estimates) 
  • $3.7 million to address challenges in the management of security inadmissibility cases, protect classified information in immigration proceedings, and remove from Canada inadmissible individuals facing a risk of torture (2012-13 SEB)
  • $3.4 million for Canada’s anti-money laundering initiative (Main Estimates)
  • $3.2 million to develop electronic applications for trusted travellers and traders and to expand NEXUS by nine lanes (2012-13 SEB)
  • $3.0 million transfer with Shared Services Canada (SSC) (2012-13 SEB)
  • $3.0 million for the CBSA Assessment and Revenue Management (CARM) Project to reengineer, streamline, and modernize its revenue and trade processes (2012-13 SEA)
  • $2.8 million to enhance activities, pursuant to Protecting Canada’s Immigration System Act, related to the cessation and vacation of refugee status (2012-13 SEB)
  • $2.3 million to support the sharing of immigration information with the United States (2012-13 SEB)
  • $1.7 million transfer with the Royal Canadian Mounted Police (RCMP) – For administering relevant requirements of the Firearms Act (2012-13 SEA) 
  • $1.5 million to complete the design, development and deployment of biometrics in the temporary resident stream (Main Estimates)
  • $1.1 million for the implementation of the Public Security and Anti-Terrorism funded Marine Security Operations Centers Project (Main Estimates)
  • $0.9 million transfer with the Department of Foreign Affairs and International Trade (DFAIT)- To provide support to departmental staff located at missions abroad (2011-12 SEB)
  • $0.7 million transfer with Citizenship and Immigrations Canada (CIC) – To cover the application development and support of the National Case Management System (2012-13 SEA)
  • $0.2 million to update and streamline processing of postal imports in mail centres and upgrade infrastructure and IT systems (2012-13 SEB)
  • $0.2 million to implement an IT solution to facilitate data transmission with external users and other government departments (2012-13 SEB)
  • $0.2 million to support the amendment to the Immigration and Refugee Protection Regulations that removes visa exemptions for citizens of five countries (2012-13 SEB) 
  • $0.1 million for the 2015 Pan American and Parapan Games (2012-13 SEA)      
Return to Top of Page
The increases are offset by the following decreases – ($235.5 million):
  • $86.1 million transfer to SSC to consolidate the resources and the personnel related to e-mail, data centers and data network activities (Main Estimates)
  • $28.2 million for savings identified as part of Strategic and Operating Review (2012-13 SEB)
  • $28.0 million from Treasury Board (TB) Vote 30 for Paylist Expenditures (includes severance pay, parental benefits, civilian severance pay and termination benefits etc.) (TB Vote 30 – Paylist Expenditures)
  • $22.0 million for costs relating to the mass migrant arrival of the MV Sunsea (2011-12 SEB)
  • $20.5 million for Improving the integrity of the CBSA front-line operations (2011-12 SEB) 
  • $14.5 million for the E-Manifest initiative (Main Estimates)
  • $9.7 million for the ongoing implementation of the Harmonized Sales Tax (HST) initiative  (2011-12 SEB)
  • $4.7 million in contributions to the employee benefit plan due to the rate decrease from 18% to 17.6% (Main Estimates)
  • $4.7 million of conversion factor from 2011-12 (2012-13 SEB)
  • $4.6 million to manage immigration cases involving classified information under Division 9 of the Immigration and Refugee Act (Security Certificates) (Main Estimates)
  • $4.3 million for the implementation of Strategic Review reallocations (Main Estimates)
  • $2.9 million for the Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime (2011-12 SEB)
  • $1.5 million for the Office of the Special Advisor on Human Smuggling and Illegal Migration, and for Short-term Operational Activities to Deter and Prevent Human Smuggling Ventures from Southeast Asia Destined for Canada (2011-12 SEB)
  • $1.5 million for the Temporary Resident Biometrics Project (2011-12 SEB)
  • $1.1 million for the transfer from the Department of National Defence (DND) for public security initiatives (Main Estimates)
  • $0.6 million transfer with DFAT – To provide support to departmental staff located at missions abroad (2012-13 SEB)
  • $0.4 million for the Accounts Receivable Ledger (ARL) project (Main Estimates)
  • $0.2 million transfer with Transport Canada (TC)- For the Commercial Marine Export Examination Mapping Exercise (2011-12 SEB)

Vote 15 – Capital Expenditures

Increases  – $80.5 million:
  • $15.6 million to ensure continued and secure border services (Main Estimates)
  • $15.1 million for the construction of 3 small ports at Lyleton, Goodland and Coulter in Manitoba (Main Estimates)
  • $13.5 million for the CBSA Assessment and Revenue Management (CARM) Project to reengineer, streamline, and modernize its revenue and trade processes (2012-13 SEA)
  • $9.1 million to develop electronic applications for trusted travellers and traders and to expand NEXUS by nine lanes (2012-13 SEB)
  • $8.8 million to update and streamline processing of postal imports in mail centres and upgrade infrastructure and IT systems (2012-13 SEB)
  • $7.0 million to expand the commercial processing facilities at St-Bernard-de-Lacolle in Quebec (Main Estimates)
  • $4.9 million to support the sharing of immigration information with the United States (2012-13 SEB)
  • $2.1 million to implement an IT solution to facilitate data transmission with external users and other government departments (2012-13 SEB)
  • $2.0 million for the ARL project (Main Estimates)
  • $1.7 million to transfer the administration of the federal immovable Property located at Rigaud, Quebec from PWGSC to the Minister of Public Safety for the Canada Border Services Agency (Main Estimates)
  • $0.5 million to complete the design, development and deployment of biometrics in the temporary resident stream (Main Estimates)
  • $0.2 million for transfer with DFAIT – To provide support to departmental staff located at missions abroad (2011-12 SEB)
Return to Top of Page
The increases are offset by the following decreases – ($117 million):
  • $36.3 million of carry-forward funding from 2011-2012 (2011-12 Carry Forward)
  • $36.0 million for the modernization of three ports of entry in British Columbia (Kingsgate, Pacific Highway, Huntingdon) and one in Ontario (Prescott) which supports the economic recovery plan of the Government (Main Estimates)
  • $15.1 million reprofile from 2011-12 – Small Port Replacement (2012-13 SEB)
  • $9.8 million reprofile from 2011-12 – Arming -Work Alone (2012-13 SEB)
  • $9.1 million for arming the Canada Border Officers at the border and addressing work-alone situations (Main Estimates)
  • $6.0 million to support the reform of Canada’s refugee determination system (Balanced Refugee Reform Act) (Main Estimates)
  • $1.9 million for the Temporary Resident Biometrics Project (2011-12 SEB)
  • $1.6 million for the ongoing implementation of the Harmonized Sales Tax (HST) initiative (2011-12 SEB)
  • $1.2 million for the transfer with DFAIT – To provide support to departmental staff located at missions abroad (2012-13 SEB)

2.2 Explanations of Significant Variances in Expenditures from Previous Year

The quarter three Departmental Budgetary Expenditures by Standard Object (Table 2) indicates a decrease in expenditures of $93.9 million or 23.5% in 2012-2013 compared to 2011-2012, to $399.7 million from $493.6 million.

The most notable variance by standard object for expenses that were incurred in quarter three of last year, but did not occur in quarter three this year are as follows:

  • A decrease of $35.9M in personnel expenditures, reflecting a one-time payout of a severance settlement from a renegotiated collective agreement;
  • A decrease of $35.3M in professional and special services, reflecting IT expenses (e.g. e-mail, data centres and networks and associated internal services) which no longer fall under the CBSA’s mandate, as a result of the introduction of Shared Services Canada;
  • A decrease of $16.9M in acquisition of land building and works, as a result of the completion of the construction of the Rigaud Learning Centre and Prescott Port of Entry; and
  • A decrease of $5.8M in transportation and communication, as a result of a reduction in spending on the Refugee Reform initiative.
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. This will result in more complex threats, risks, and an increased focus on security. 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, 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 is a reduction to base funding which limits the Agency's ability to deliver on other programs and expected results.

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.

The CBSA has also adopted Enterprise Risk Management (ERM) to ensure the Agency implements a consistent, systematic and disciplined approach to managing risks at all levels in and across the Agency.

The CBSA Enterprise Risk Profile (ERP) is a key component of the ERM Program. The ERP identifies and ranks the top risks to the Agency's achievement of its strategic objective. The goal is to strengthen the Agency's resilience to its changing environment by providing senior management with the risk-based information needed to make better-informed decisions.

Nineteen enterprise risks have been identified and organized into two categories: business risks and enabling risks. Business risks are the risks that the Agency is mandated to address on behalf of Canada. Enabling risks are risks to the Agency's ability to deliver on its mandate.

The ERP will be used as a key information source for important Agency decision-making processes such as: integrated business planning, resource allocation and investment planning. As such, the risk response strategies (i.e., the actions that will be taken to mitigate risks) will be incorporated in the 2012-2013 Integrated Business Plans.

Return to Top of Page

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

Key Senior Personnel

There has been a change in senior level personnel, most notably the appointment of a new Chief Financial Officer (CFO) in June, 2012.

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 will be implemented in order to refocus government and programs; make it easier for Canadians and businesses 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 2014-15 through efficiency measures and program reductions that align resources to its core mandate, scaling back where the need is reduced; transforming how it works internally; and by consolidating and streamlining. With these changes the CBSA will focus on supporting management excellence and accountability across government. In the first year of implementation, the CBSA's savings target is $31.3 million. Savings will increase to $72.8 million in 2013-14 and will result in ongoing saving of $143.4 million by 2014-15.

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

  • streamline and simplify our 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.

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

Return to Top of Page

Shared Services Canada

On August 4, 2011, Shared Services Canada (SSC) was created by an Order-in-Council (OIC) under the Financial Administration Act in order to adopt an enterprise-wide approach to e-mail, network and data centre services for the Government of Canada.

SSC was established as part of the PWGSC portfolio to streamline and reduce duplication in the government's IT services. SSC will consolidate the resources and personnel currently supporting e-mail, data centres and networks and associated internal services.

With the approval of the second OIC on November 15, 2011, 27 CBSA employees were transferred to SSC.

The CBSA's authorities were reduced by $89.1 million in two separate installments: $86.1 million transferred in the 2012-2013 Main Estimates and $3.0 million transferred in the 2012-2013 Supplementary Estimates B exercise.

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 has an interest in 28 different Action Plan deliverables spanning each of the 32 initiatives under the four principles. It plays a leading role in ten, has a critical secondary role in a further nine, and minor involvement in a further nine.

As of quarter three the Agency has received $21.8 million through Supplementary Estimates B for the following Beyond the Border initiatives:

  • Funding to develop electronic applications for trusted travellers and traders and to expand NEXUS by nine lanes ($12.3 million);
  • Funding to support the sharing of immigration information with the United States ($7.2 million); and
  • Funding to implement an IT solution to facilitate data transmission with external users and other government departments ($2.3 million).

Although the action plan has been announced, details of the individual initiatives have not yet been tabled in Parliament. As such, the Perimeter Vision initiatives have not 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: March 1, 2013


Canada Border Services Agency
Quarterly Financial Report
For the quarter ended December 31, 2012

Return to Top of Page

6. Table 1: Statement of Authorities (Unaudited)

  Fiscal Year 2012–2013   Fiscal Year 2011–2012
(in thousands of dollars) Total available for use for the year ending March 31, 2013* ** Used during the quarter ended December 31, 2012 Year-to-date used at quarter end   Total available for use for the year ending March 31, 2012* Used during the quarter ended December31, 2011 Year-to-date used at quarter end
Vote 10 – Net Operating Expenditures 1,676,482 338,251 994,739   1,696,053 412,677 1,109,349
Vote 15 – Capital Expenditures 202,162 15,989 39,839   238,671 35,671 69,954
Budgetary statutory authorities     0       0
Employee benefit plans 181,491 45,373 136,119   180,893 45,223 135,669
Other   77 421     64 183
Total budgetary authorities 2,060,134 399,690 1,171,118   2,115,617 493,635 1,315,155

* Includes 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 Activities)
Quarterly Financial Report
For the quarter ended December 31, 2012

Return to Top of Page

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

  Fiscal Year 2012–2013   Fiscal Year 2011–2012
(in thousands of dollars) Planned expenditures for the year ending March 31, 2013* ** Expended during the quarter ended December 31, 2012 Year-to-date used at quarter end   Planned expenditures for the year ending March 31, 2012* Expended during the quarter ended December 31, 2011 Year-to-date used at quarter end
Expenditures              
Personnel 1,284,491 310,784 944,911   1,382,696 346,685 971,829
Transportation and communications 80,840 8,986 32,153   88,719 14,778 39,340
Information 1,980 299 902   3,295 230 729
Professional and special services 397,180 64,024 138,028   444,781 99,314 229,253
Rentals 11,047 1,700 6,395   11,852 1,766 5,440
Repair and maintenance 30,059 4,870 13,655   36,033 4,960 10,373
Utilities, materials and supplies 24,717 4,103 11,574   39,138 4,310 11,172
Acquisition of land, buildings and works 62,413 4,362 19,936   92,171 21,293 43,271
Acquisition of machinery and equipment 143,451 3,649 8,554   31,201 3,421 7,297
Transfer payments 0 0 0   -20,519 0 0
Other subsidies and payments 33,666 378 3,925   15,960 3,092 3,955
Total gross budgetary expenditures 2,069,844 403,155 1,180,033   2,125,327 499,849 1,322,659
               
Less revenues netted against expenditures              
Sales of Services 9,710 3,469 8,978   9,710 6,234 7,582
Other Revenue 0 -4 -63   0 -20 -78
Total revenues netted against expenditures 9,710 3,465 8,915   9,710 6,214 7,504
Total net budgetary expenditures 2,060,134 399,690 1,171,118   2,115,617 493,635 1,315,155

* Includes authorities available for use and granted by Parliament at quarter-end

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