Canada Border Services Agency Quarterly Financial Report:
September 30, 2020

1. Introduction

This Quarterly Financial Report (QFR) has been prepared 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, Canada’s Economic Action Plan 2019 (Budget 2019) and Canada's COVID-19 Economic Response Plan.

Information on the ‘raison d’être’, mandate, role and core responsibilities of the Canada Border Services Agency (CBSA) can be found in Part III Departmental Plan and Part II of the Main Estimates.

The QFR has not been subjected to an external audit or review.

1.1 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying statement of authorities (Table 1) includes the department's spending authorities granted by Parliament, and those used by the department consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2019 to 2020 and 2020 to 2021 fiscal years. 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government 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 department uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental results 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 significant items that contributed to the net increase or decrease in resources available for the year and actual expenditures as of the quarter ended September 30, 2020.

Graph 1: Comparison of net budgetary authorities and expenditures as of September 30, 2019 and September 30, 2020
(in thousands $)

2.1 Significant changes to authorities

For the period ending September 30, 2020, the authorities provided to the CBSA comprise of 9/12th of the 2020 to 2021 Main Estimates, due to changes in the operations of Parliament caused by the COVID-19 pandemic and any unused spending authorities carried forward from the previous fiscal year. The remaining 3/12th of the 2020 to 2021 Main Estimates will be received upon approval of Full Supply by Parliament. For further information about the Agency’s comparison of 12/12th of Main Estimates between fiscal years 2019 to 2020 and 2020 to 2021, please see the CBSA Quarterly Financial Report for the quarter ended June 30, 2020.

The statement of authorities (Table 1) presents a net decrease of $317.2 million or 13.7% in the Agency’s total authorities of $1,995.9 million at September 30, 2020 compared to $2,313.1 million total authorities at the same quarter last year.

This net decrease in the authorities available for use is the result of a decrease in Vote 1 – Operating Expenditures of $339.4 million, an increase in Vote 5 – Capital of $36.5 million and a decrease in Budgetary Statutory Authorities of $14.3 million.

2.2 Explanations of significant variances in expenditures from previous year

As indicated in the statement of authorities (Table 1), the agency’s expenditures for year-to-date, at quarter end September 30, 2020 were $931.6 million, as compared to $918.5 million for year-to-date, quarter ending September 30, 2019. The net increase of $13.0 million^{footnote 1} or 1.4% in expenditures is mainly due to the following items:

• Decrease of $11.7 million or 1.5% in Vote 1 Operating Expenditures year-to-date used at quarter end ($779.0 million versus $790.8 million same time last year)
• Increase of $16.9 million or 52.3% in Vote 5 Capital Expenditures year-to-date used at quarter end ($49.2 million versus $32.3 million same time last year). This increase can mostly be attributed to a $9.8 million increase in expenditures for Information Technology Consultants and a $6.9 million increase in Capital Projects
• Increase of $7.8 million in statutory expenditures

As indicated in the Departmental Budgetary Expenditures by Standard Object (Table 2), the increases by standard object are mainly attributed to:

• Increase of $12.8 million in Personnel due to staffing of regular personnel and offset by a reduction in overtime due to COVID-19
• Increase of $3.6 million in Professional and special services
• Increase of $3.5 million in Acquisition of land, buildings and works due to Capital Projects
• Increase of $3.0 million in Other subsidies and payments
• Increase of $1.4 million in Utilities, materials and supplies which can be attributed to the purchase of Uniforms
• Decrease of $15.0 million in Transportation and communications which can be mainly attributed to a decrease in travel costs and relocation expenses attributed to COVID-19
• Decrease of $1.3 million in Rentals which can be attributed to COVID-19

Graph 2: Comparison of vote netted revenue and revenue collected as of September 30, 2019 and September 30, 2020
(in thousands $)

The planned revenue from the sales of services reflects the Agency’s revenue respending authority. The year-to-date revenue from the charge of services has decreased by $4.3 million or 37.0% due to the COVID-19 pandemic.

3. Risks and uncertainties

The CBSA’s changing operating environment makes the agency particularly susceptible to external drivers that are largely beyond its control. Together, these drivers have the potential to affect the organization’s ability to adhere to its annual financial plan.

The agency is pursuing several large information technology (IT) and physical infrastructure projects. Most are multi-year in nature and represent substantial investments. The COVID-19 pandemic necessitated a re-prioritization of certain agency activities to address pressing matters, which may result in scheduling delays for some projects.

In addition, because the CBSA depends on other government departments and/or external stakeholders for the development and implementation of many of its major projects, scheduling delays are even more likely. As each organization must also manage the repercussions the COVID-19 pandemic is having on its own operations, assisting the CBSA in the advancement of its projects in a timely basis can become challenging due to conflicting priorities.

Beyond the effects of re-prioritization on the way resources are allotted, the COVID-19 pandemic will also likely prompt a need for adjustments to the design of certain projects, which could further delay the execution and delivery of projects and result in funding lapses.

Delays can lead to other challenges as project costing does not always allow for fluctuating costs for materials, commodities and other market rate price changes. Inflation also drives up costs on deferred or delayed projects.

The agency strives to mitigate financial risks by risk-rating its projects, conducting periodic project reviews, and by holding regular budget discussions. Such activities are informed and supported by agency quarterly integrated project reporting processes.

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

4.1 Key senior personnel

There have been no changes to key senior personnel in the second quarter of 2020 to 2021.

4.2 Operations

The COVID-19 pandemic has had continued significant impacts on agency operations. Travel restrictions were in place for the entirety of Q2 at all Canadian international border crossings. Travel of an optional or discretionary nature, including tourism, recreation and entertainment, is covered by these measures across all ports of entry in all modes of transportation: land, marine, air and rail. This has resulted in a dramatic decrease in traveller border volumes.

New safety protocols and procedures have been developed to handle ongoing commercial volumes, continuing non-discretionary travel and to prepare for when discretionary travel resumes. Front line staff reassignments have also occurred to address the increasing volumes seen in the postal and courier streams.

Thousands of non-frontline employees continue to telework in light of the COVID-19 pandemic. This has brought about new methods for communicating and collaborating, and while some limitations exist, the IT infrastructure has largely been able to successfully support this transition.

5. Approval by senior officials

6. Table 1: Statement of authorities (unaudited)

7. Table 2: Departmental budgetary expenditures by standard object, in thousands of dollars (unaudited)

Date modified:

2020-12-09