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- Quarterly Financial Report for the Quarter Ended

Canadian Space Agency
-

Quarterly Financial Report
For the Quarter Ended

Management Statement
for the Quarter Ended

1. Introduction

This quarterly financial 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 financial report should be read in conjunction with the - Main EstimatesFootnote 1.

1.1 Mandate and Program Activities

The mandate of the Canadian Space Agency (CSA) is to promote the peaceful use and development of space, to advance the knowledge of space through science and to ensure that space science and technologies provide social and economic benefits for Canadians.

More information is available on the CSA's mandate and on the departmental results framework in the - Departmental PlanFootnote 1.

1.2 Basis of Presentation

This quarterly financial report (QFR) has been prepared by management using an expenditure basis of accounting. The Statement of Authorities annexed to this report includes the CSA's spending authorities granted by Parliament and those used by the CSA, consistent with the Main Estimates and Supplementary estimates voted as at December 31 for fiscal year - compared to -. This QFR 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 moneys 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.

The CSA uses the full accrual method of accounting to prepare and present its annual financial statements, which are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis, that is, a partial accrual method of accounting. Partial accrual method of accounting includes disbursements as well as some accruals for salaries and salary allowances.

This QFR report has not been subject to an external audit. However, it has been reviewed by the members of the CSA Audit Committee, who are satisfied with its presentation and content.

2. Highlights of the Quarterly Financial Results

This section highlights the significant factors that contributed to the changes to the authorities available for the fiscal year, as well as to the quarterly and year-to-date expenditures for the quarter ended .

The following graph provides an overview of variations in available authorities and expenditures. Additional details on these variations are provided in sections 2.1 and 2.2 as well as in the appended annexes.

Authorities available for use and expenditures as at December 31 (in millions of dollars)
Authorities Quarterly
Expenditures
Year to Date
Expenditures
Fiscal Year - 421.2 84.7 183.1
Fiscal Year - 419.7 73.9 189.3

Totals may not add up due to rounding.

2.1 Significant Changes in Authorities (Total Vote Available for Use) between fiscal - and -.

The total vote available for use as at is $421.2 million, and represents a increase of $1.6 million compared to the same period of the previous year.

Authorities (in thousands of dollars) - - Variance %
Vote 1 - Operating expenditures 179,828 180,678 (850) (0%)
Vote 5 - Capital expenditures 175,516 168,666 6,850 4%
Vote 10 - Grants and contributions 56,411 60,966 (4,555) (7%)
Contributions to employee benefit plans 9,463 9,328 135 1%
Spending of proceeds from the disposal of surplus Crown assets 21 30 (9) (30%)
Total budgetary authorities 421,239 419,668 1,571 0%

The decrease of $1.0 million in Vote 1 - Operating expenditures is mainly explained by the following items:

  • An increase of $6.5 million due to additional funding received to extend Canada's participation in the International Space Station (ISS) mission from to .
  • A decrease of $3.1 million between - and - because the Operating Vote carry forward from - to - was less significant than the carry forward from - to -.
  • A decrease of $2.0 million due to a budgetary transfer from the Operating Vote to the Grants and contributions Vote for the Space technologies development program.
  • An increase of $1.8 million due to additional funding obtained for Quantum Encryption and Science Satellite (QEYSSat) project.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

The increase of $6.9 million in Vote 5 - Capital expenditures is mainly explained by the following items:

  • An increase of $14.5 million between - and - because the Capital Vote carry forward from - to - was more significant than the carry forward from - to -.
  • A decrease of $7.5 million due to the end of the additional funding obtained for items in Budget related to the security enhancement at John H. Chapman Space Center as well as the purchase and installation of absorber material for the David Florida Laboratory (DFL) Anechoic Chamber.
  • A decrease of $4.4 million compared to the previous year due to the end of the additional funding obtained for the David Florida Laboratory (DFL) infrastructure and corresponding equipment to maintain its space capabilities and improve compliance with applicable building codes and standards.
  • An increase of $2.6 million due to additional funding obtained for Quantum Encryption and Science Satellite (QEYSSat) project.
  • An increase of $2.6 million due to different cash flow requirements for Surface Water & Ocean Topography (SWOT-C) project related activities.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

The decrease of $4.6 million in Vote 10 - Grants and Contributions expenditures is mainly explained by the following items:

  • A decrease of $5.0 million over the same period last year, due to the funding profile of the additional funding obtained in the Budget for the Contribution Program under the Canada-European Space Agency Cooperation Agreement for the Advanced Research in Telecommunications Systems (ARTES) program.
  • An increase of $2.0 million due to a budgetary transfer from the Operating Vote to the Grants and contributions Vote for the Space technologies development program.
  • The residual difference consists of multiple variations inherent to the Canadian Space Program (CSP) Resource Management. They result from the fact that budgetary requirements by vote are not linear from one year to the next, requiring vote transfers or fund carry forwards to another fiscal year.

2.2 Significant Changes in Quarterly and Year-to-Date Expenditures (Votes Used) between fiscal - and -

Quarterly and year-to-date expenditures for the quarter ended are of $84.7 and $183.1 million and represent a quarterly increase of $10.7 million and a year to date decrease of $6.3 million compared to the same period of the previous year.

Expenditures by Vote as at December 31
Expenditures by Vote
(in thousands of dollars)
- - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Vote 1 - Operating expenditures 39,009 101,217 42,993 103,742 (3,984) (2,525)
Vote 5 - Capital expenditures 31,385 44,377 22,322 61,778 9,063 (17,401)
Vote 10 - Grants and contributions 11,927 30,385 6,336 16,931 5,591 13,454
Contributions to employee benefit plans 2,365 7,097 2,289 6,867 76 230
Spending of proceeds from the disposal of surplus Crown assets 3 16 3 24 - (8)
Total budgetary expenditures by Vote 84,689 183,092 73,943 189,342 10,746 (6,250)

The decrease of $4.0 and $2.5 million in the quarterly and year to date expenditures in Vote 1 – Operating expenditures, is mainly explained by the following:

  • A decrease in expenses due to variations in the payment schedules for carrying out activities such as: Space Exploration, Space Technologies Development Program, Earth Observation Government Related Initiatives as well as the maintenance and operations of the David Florida Laboratory (DFL) building infrastructure.
  • A decrease in salary expenses, including retroactive payments, due to the ratification of collective agreements in -.

The increase of $9.1 million in the quarterly expenditures and the decrease of $17.4 million in the year to date expenditures in Vote 5 - Capital expenditures, is mainly explained by the following:

  • The variations in the payment schedules for carrying out activities such as: the RADARSAT Constellation Mission (RCM), projects in support of the International Space Station (ISS) as well as the building infrastructure maintenance projects for the David Florida Laboratory (DFL) and for the John H. Chapman Space Centre (JHCSC).

The increase of $5.6 and $13.5 million in the quarterly and year to date expenditures in Vote 10 – Grants and contributions, is mainly explained by the following:

  • The variations in the payment schedules to the European Space Agency (ESA) as well as the Class Grant Program to Support Research, Awareness and Learning in Space Science and Technology.
Expenditures by Standard Object as at December 31
Expenditures by Standard Object (in thousands of dollars) - - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Personnel 19,189 56,368 20,987 57,421 (1,798) (1,053)
Transportation and communications 1,240 3,167 1,279 2,920 (39) 247
Information 1,121 2,528 643 2,032 478 496
Professional and special services 22,054 48,364 23,678 51,105 (1,624) (2,741)
Rentals 914 1,778 1,029 2,192 (115) (414)
Repair and maintenance 961 2,617 5,578 7,853 (4,617) (5,236)
Utilities, materials and supplies 180 1,126 527 1,299 (347) (173)
Acquisition of land, buildings and works 56 93 - - 56 93
Acquisition of machinery and equipment 27,022 34,653 13,832 45,523 13,190 (10,870)
Transfer payments 11,927 30,385 6,336 16,931 5,591 13,454
Other subsidies and payments 25 2,013 54 2,066 (29) (53)
Total budgetary expenditures by Standard Object 84,689 183,092 73,943 189,342 10,746 (6,250)

The $1.8 and 1.1 million decreases in quarterly expenditures and year to date expenditures for the Professional and special services standard object is primarily due to:

  • The variations in salary expenses, including retroactive payments, due to the ratification of collective agreements in -.

The $1.6 and 2.7 million decreases in quarterly expenditures and year to date expenditures for the Professional and special services standard object is primarily due to:

  • The variations in the payment schedules for carrying out activities such as: the RADARSAT Constellation Mission (RCM), projects in support of the International Space Station (ISS), the Space Technologies Development Program as well as the Earth Observation Government Related Initiatives.

The $4.6 and 5.2 million decreases in quarterly expenditures and year to date expenditures for the Professional and special services standard object is primarily due to:

  • The variations in the payment schedule related to the building infrastructure maintenance projects for the David Florida Laboratory (DFL) and for the John H. Chapman Space Centre (JHCSC).

The $13.2 million increase in quarterly expenditures and the $10.9 million decrease in year to date expenditures for the Acquisition of machinery and equipment standard object is primarily due to:

  • The variations in the payment schedules related to the RADARSAT Constellation Mission (RCM) as well as projects in support of the International Space Station (ISS) and the building infrastructure maintenance projects for the John H. Chapman Space Centre (JHCSC).

The $5.6 and 13.5 million increases in quarterly and year to date expenditures for the Transfer payments standard object is primarily due to:

  • The variations in the payment schedules to the European Space Agency (ESA) as well as the Class Grant Program to Support Research, Awareness and Learning in Space Science and Technology.

3. Risks and Uncertainties

The year-to-date expenditures for the 3rd quarter of - represent 43% of authorities whereas 75% of fiscal year has passed. The level of expenditure is similar to the - fiscal year (45%) and the - fiscal year (46%) and represents no concerns. The situation concerning the cumulative expenditures will be restored at fiscal year-end when the accruals will be recorded, according to the full accrual method of accounting, combined with the deferral of budgets to the following year.

The specific nature of the Canadian Space Program confronts the CSA with issues related to the advanced technologies used in space missions as well as the international aspect of some projects. For Canada, activities are often carried out in partnership with other spacefaring nations, to share the costs and leverage capabilities. The international nature and technical challenges associated with developing and implementing disruptive technologies, in collaboration with multiple partners, generate risks in the delivery of projects and therefore financial risks associated with the use of funds such as the deferral of funds and costs increase.

Risks also arise from the Canada / European Space Agency (ESA) Cooperation Agreement such as, variations in amounts payable caused by changes in the Gross National Product (GNP) statistics, the fluctuation of the Canadian dollar against the euro (exchange rate), inflation and the enforcement of the ESA's industrial policy. These risks have an impact on both costs and cash flow profiles.

To mitigate all of these risks, the CSA regularly reviews its project portfolio, activity plans, schedules and financial management strategies to adjust to changes brought on by space programs of its key partners (National Aeronautics and Space Administration (NASA), ESA and other space agencies). In addition, the CSA implemented a new investment governance and monitoring framework and rigorous project management practices are in place. These initiatives allow the CSA to track and report on the progress of its commitments, assess the effectiveness of its work, and align its resources with priorities.

Furthermore, CSA manages its financial risks and uncertainties related to Phoenix by adopting risk mitigation strategies. There are a number of actions that CSA has taken to date to help stabilize the pay system, and ensure that employees are paid accurately and on time. As one of the departments whose accounts have not yet migrated to the Pay Centre, compensation services remain on site. The compensation team, which fluctuates to meet demand, monitors closely for payroll inaccuracies and communicates directly with employees to provide clarification and to take swift action to rectify issues, if needed. The team also participates actively in various working groups and other forums led by Treasury Board Secretariat (TBS) and/or Public Services and Procurement Canada (PSPC). Beyond this, Finance staff regularly perform salary reconciliations to monitor and correct expense variances.

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

There were no significant changes in operations, personnel and programs, in the third quarter of -.

Approval by Senior Officials

Approved by,

The original version was signed by Sylvain Laporte, President, in Longueuil, Quebec, on .

The original version was signed by Jean-Claude Piedboeuf, B. Ing., Ph.D., Chief Financial Officer, in Longueuil, Quebec, on .

Annex 1

Canadian Space Agency
Quarterly Financial Report
For the quarter ended
Statement of Authorities
(unaudited)
(in thousands of dollars)
Fiscal Year - Fiscal Year -
Total available
for use for
the year ending

Table note 2
$
Used during
the quarter
ended

$
Year to date
used at
quarter-end
$
Total available
for use for
the year ending

Table note 2
$
Used during
the quarter
ended

$
Year to date
used at
quarter-end
$
Vote 1: Operating expenditures 179,828 39,009 101,217 180,678 42,993 103,742
Vote 5: Capital expenditures 175,516 31,385 44,377 168,666 22,322 61,778
Vote 10: Grants and contributions 56,411 11,927 30,385 60,966 6,336 16,931
Contributions to employee benefit plans 9,463 2,365 7,097 9,328 2,289 6,867
Spending of proceeds from the disposal of surplus Crown assets 21 3 16 30 3 24
Total budgetary authorities 421,239 84,689 183,092 419,668 73,943 189,342

Annex 2

Canadian Space Agency
Quarterly Financial Report
For the quarter ended
Departmental budgetary expenditures by Standard Object
(unaudited)
(in thousands of dollars)
Fiscal Year - Fiscal Year -
Planned
expenditures
for the
year ending

$
Used
during the
quarter ended

$
Year to date
used at
quarter-end
$
Planned
expenditures
for the
year ending

$
Used
during the
quarter ended

$
Year to date
used at
quarter-end
$
Expenditures:
Personnel 73,019 19,189 56,368 70,109 20,987 57,421
Transportation and communications 5,180 1,240 3,167 5,015 1,279 2,920
Information 3,101 1,121 2,528 3,165 643 2,032
Professional and special services 138,547 22,054 48,364 139,311 23,678 51,105
Rentals 1,841 914 1,778 3,480 1,029 2,192
Repair and maintenance 1,441 961 2,617 7,573 5,578 7,853
Utilities, materials and supplies 1,742 180 1,126 1,924 527 1,299
Acquisition of land, buildings and works 4,032 56 93 - - -
Acquisition of machinery and equipment 129,190 27,022 34,653 121,082 13,832 45,523
Transfer payments 56,411 11,927 30,385 60,966 6,336 16,931
Other subsidies and payments 6,735 25 2,013 7,043 54 2,066
Total budgetary expenditures 421,239 84,689 183,092 419,668 73,943 189,342
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