- 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 Canadian Space Agency's (CSA) mandate 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, which is, a partial accrual method of accounting. The 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 was 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 elements 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 the variations in the available authorities and the 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 - 372.3 71.0 187.0
Fiscal Year - 421.2 84.7 183.1

Totals may not add up due to rounding.

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

The total votes available for use as at is $372.3 million, which represents a decrease of $48.9 million compared to the same period in the previous year.

Authorities (in thousands of dollars) - - Variance %
Vote 1 - Operating expenditures 189,678 179,828 9,850 5%
Vote 5 - Capital expenditures 113,647 175,516 (61,869) (35%)
Vote 10 - Grants and contributions 58,696 56,411 2,285 4%
Contributions to employee benefit plans 10,312 9,463 849 9%
Spending of proceeds from the disposal of surplus Crown assets 5 21 (16) (76%)
Total budgetary authorities 372,338 421,239 (48,901) (12%)

The increase of $9.9 million in Vote 1 - Operating expenditures is mainly explained by the following items:

  • An increase of $9.4 million as a result of additional funding received to extend Canada's participation in the International Space Station (ISS) mission from to .
  • An increase of $2.3 million as a result of funding received from Treasury Board for collective agreements ratification.
  • A decrease of $1.8 million due to different needs according to the progress of Quantum Encryption and Science Satellite (QEYSSat) project related activities.

The decrease of $61.9 million in Vote 5 - Capital expenditures is mainly explained by the following items:

  • A decrease of $54.5 million due to different cash flow requirements for Radarsat Constellation Mission (RCM) project related activities.
  • A decrease of $3.9 million due to different cash flow requirements for Life Science Research System (LSRS) project related activities.
  • A decrease of $2.6 million due to different cash flow requirements for Surface Water & Ocean Topography (SWOT-C) project related activities.
  • An increase of $5.2 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 $2.3 million in Vote 10 - Grants and Contributions expenditures is mainly explained by the following items:

  • An increase of $2.6 million due to different anticipated cash flow requirements for the Contribution Program under the Canada-European Space Agency (ESA) Cooperation Agreement.
  • 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 the Quarterly and Year-to-Date Expenditures (Votes Used) between fiscal years - and -

The quarterly and year-to-date expenditures for the quarter ended are of $71.0 and $187.0 million which represents a quarterly decrease of $13.7 million and a year to date increase of $3.9 million compared to the same period in 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 38,551 103,057 39,009 101,217 (458) 1,840
Vote 5 - Capital expenditures 24,765 55,383 31,385 44,377 (6,620) 11,006
Vote 10 - Grants and contributions 5,137 20,851 11,927 30,385 (6,790) (9,534)
Contributions to employee benefit plans 2,578 7,734 2,365 7,097 213 637
Spending of proceeds from the disposal of surplus Crown assets - - 3 16 (3) (16)
Total budgetary expenditures by Vote 71,031 187,025 84,689 183,092 (13,658) 3,933

The 2019-2020 quarterly and year-to-date expenditures in Vote 1 – Operating expenditures are essentially the same as in - fiscal year.

The decrease of $6.6 million in the quarterly expenditures and the increase of $11.0 million in the year to date expenditures in Vote 5 - Capital expenditures, are mainly explained by the following:

  • Expenditures variations due to the payment schedules for the RADARSAT Constellation Mission (RCM).

The decrease of $6.8 million in the quarterly expenditures and the decrease of $9.5 million in the year to date expenditures in Vote 10 - Grants and contributions, are mainly explained by the following:

  • The variations in the payment schedules to the European Space Agency (ESA).
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 17,695 56,913 19,189 56,368 (1,494) 545
Transportation and communications 1,149 3,188 1,240 3,167 (91) 21
Information 1,674 2,281 1,121 2,528 553 (247)
Professional and special services 23,879 51,817 22,054 48,364 1,825 3,453
Rentals 1,059 2,443 914 1,778 145 665
Repair and maintenance 238 1,116 961 2,617 (723) (1,501)
Utilities, materials and supplies 535 1,910 180 1,126 355 784
Acquisition of land, buildings and works - - 56 93 (56) (93)
Acquisition of machinery and equipment 19,671 44,660 27,022 34,653 (7,351) 10,007
Transfer payments 5,137 20,851 11,927 30,385 (6,790) (9,534)
Other subsidies and payments (6) 1,846 25 2,013 (31) (167)
Total budgetary expenditures by Standard Object 71,031 187,025 84,689 183,092 (13,658) 3,933

The $1.8 million increase in quarterly expenditures and the $3.5 million increase in year to date expenditures for the Professional and special services standard object are primarily due to:

  • The variations in the payment schedules for carrying out contractual activities for the maintenance and operations of the International Space Station (ISS) as well as for Space Technologies activities.

The $1.5 million decrease in year to date expenditures for the Repair and maintenance standard object is primarily due to:

  • A variation in the payment schedules related to the building infrastructure project for the David Florida Laboratory (DFL).

The $7.4 million decrease in quarterly expenditures and the $10.0 million increase in year to date expenditures for the Acquisition of machinery and equipment standard object are primarily due to:

  • The variations in the payment schedules for the RADARSAT Constellation Mission (RCM).

The $6.8 million decrease in quarterly expenditures and the $9.5 million decrease in year to date expenditures for the Transfer payments standard object are primarily due to:

  • The variations in the payment schedules to the European Space Agency (ESA).

3. Risks and Uncertainties

The year-to-date expenditures for the 3rd quarter of - represent 50% of the authorities whereas 75% of the fiscal year has passed. The level of expenditures is slightly higher than it was in the - fiscal year (43%) and in the - fiscal year (45%). This situation presents no concerns since the cumulative expenditures will be restored at year-end when the accruals are recorded, in accordance with 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 in space must be carried out in partnership with other spacefaring nations, using innovative and cost-efficient technologies. 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 increases.

Risks also arise from the Canada / European Space Agency (ESA) Cooperation Agreement. They include variations in amounts payable resulting from 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 these risks, the CSA regularly reviews its project portfolio, activity plans, schedules and financial management strategies to adjust to changes brought on by the space programs of its key partners (National Aeronautics and Space Administration (NASA), ESA and other space agencies). In addition, rigorous project management practices are in place. These initiatives allow the CSA to track and report on the progress of its commitments, to assess the effectiveness of its work, and to align its resources with its priorities.

Furthermore, the CSA manages its financial risks and uncertainties related to Phoenix by adopting risk mitigating strategies. There are a number of actions that the CSA has taken to date to help stabilize the pay system, and to ensure that the employees are being paid accurately and on time. As one of the departments whose accounts have not yet been migrated to the Pay Centre, the CSA continues to offer on-site compensation services. The compensation team, who's size fluctuates to meet demand, monitors closely for payroll inaccuracies and communicates directly with employees to provide clarifications and to take, when needed, swift actions to rectify issues. 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, the staff in Finance regularly performs 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 1
$
Used during the quarter ended

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

Table note 1
$
Used during the quarter ended

$
Year to date
used at
quarter-end
$
Vote 1: Operating expenditures 189,678 38,551 103,057 179,828 39,009 101,217
Vote 5: Capital expenditures 113,647 24,765 55,383 175,516 31,385 44,377
Vote 10: Grants and contributions 58,696 5,137 20,851 56,411 11,927 30,385
Contributions to employee benefit plans 10,312 2,578 7,734 9,463 2,365 7,097
Spending of proceeds from the disposal of surplus Crown assets 5 - - 21 3 16
Total budgetary authorities 372,338 71,031 187,025 421,239 84,689 183,092

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

$
Expended
during the
quarter ended

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

$
Expended
during the
quarter ended
$
Year to date
used at
quarter-end
$
Expenditures:
Personnel 80,134 17,695 56,913 73 ,019 19,189 56,368
Transportation and communications 4,281 1,149 3,188 5,180 1,240 3,167
Information 1,824 1,674 2,281 3,101 1,121 2,528
Professional and special services 164,465 23,879 51,817 138,547 22,054 48,364
Rentals 2,983 1,059 2,443 1,841 914 1,778
Repair and maintenance 3,379 238 1,116 1,441 961 2,617
Utilities, materials and supplies 1,702 535 1,910 1,742 180 1,126
Acquisition of land, buildings and works 650 - - 4,032 56 93
Acquisition of machinery and equipment 51,177 19,671 44,660 129,190 27,022 34,653
Transfer payments 58,696 5,137 20,851 56,411 11,927 30,385
Other subsidies and payments 3,047 (6) 1,846 6,735 25 2,013
Total budgetary expenditures 372,338 71,031 187,025 421,239 84,689 183,092
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