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Quarterly Financial Report for the Quarter Ended

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Management Statement for the Quarter Ended

1. Introduction

In this section

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 , 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 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.

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

In this section

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 (in millions of dollars)
Authorities Quarterly
Expenditures
Year to Date
Expenditures
Fiscal Year - 537.4 62.4 62.4
Fiscal Year - 573.3 47.1 47.1

Totals may not add up with the Annexes 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 $537.4 million, which represents a decrease of $35.9 million compared to the same period in the previous year.

Significant changes in the authorities
Authorities (in thousands of dollars) - - Variance %
Vote 1 - Operating expenditures 221,482 217,472 4,010 2%
Vote 5 - Capital expenditures 225,848 257,400 (31,552) (12%)
Vote 10 - Grants and contributions 77,912 85,581 (7,669) (9%)
Contributions to employee benefit plans 12,160 12,271 (111) (1%)
Proceeds from disposal of surplus Crown assets 2 581 (579) -100%
Total budgetary authorities 537,404 573,305 (35,901) (6%)

The increase of $4.0 million in Vote 1 – Operating expenditures is mainly explained by the following items:

  • An increase of $2.3 million in salaries.
  • 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 $31.5 million in Vote 5 – Capital expenditures is mainly explained by the following items:

  • A decrease of $34.0 million for Canadarm3 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 $7.7 million in Vote 10 – Grants and Contributions expenditures is mainly explained by the following items:

  • A decrease of $7.3 million for the global program of contributions to support research, awareness and education in space science and technology.

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

Quarterly expenditures as at are $62.4 million and represent an increase of $15.3 million from the same quarter last year.

Expenditures by Vote as at June 30
Expenditures by Vote
(in thousands of dollars)
- - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Vote 1 - Operating expenditures 31,300 31,300 29,204 29,204 2,096 2,096
Vote 5 - Capital expenditures 15,606 15,606 5,848 5,848 9,758 9,758
Vote 10 - Grants and contributions 12,488 12,488 9,223 9,223 3,265 3,265
Contributions to employee benefit plans 3,040 3,040 2,819 2,819 221 221
Spending of proceeds from disposal of surplus Crown assets - - - - - -
Total budgetary expenditures by Vote 62,434 62,434 47,094 47,094 15,340 15,340

The increase of $2.1 million in quarterly and year-to-date expenditures in Vote 1 – Operating Expenses, is primarily due to:

  • An increase in salary expenses following an increase in the number of CSA staff and an increase in the payment schedule related to the Health Beyond project.

The increase of $9.7 million in quarterly and cumulative expenditures in Vote 5 - Capital Expenditures is primarily due to:

  • An increase in the payment schedule for the Canadarm3 project associated with the start of the definition phase.

The increase of $3.2 million in quarterly expenditures and cumulative expenditures in Vote 10 - Grants and Contributions is primarily due to:

  • The variations in the payment schedule to the European Space Agency (ESA) and the exchange rate.
Expenditures by Standard Object as at
Expenditures by Standard Object (in thousands of dollars) - - Variance
Quarterly Year to date Quarterly Year to date Quarterly Year to date
Personnel 24,335 24,335 22,435 22,435 1,900 1,900
Transportation and communications 984 984 431 431 553 553
Information 284 284 141 141 143 143
Professional and special services 22,325 22,325 12,917 12,917 9,408 9,408
Rentals 535 535 646 646 (111) (111)
Repair and maintenance 401 401 529 529 (128) (128)
Utilities, materials and supplies 278 278 282 282 (4) (4)
Acquisition of land, buildings and works - - - - - -
Acquisition of machinery and equipment 798 798 495 495 303 303
Transfer payments 12,488 12,488 9,223 9,223 3,265 3,265
Other subsidies and payments 6 6 (5) (5) 11 11
Total budgetary expenditures by Standard Object 62,434 62,434 47,094 47,094 15,340 15,340

The increase of $1.9 million in quarterly and cumulative expenditures  for Personnel standard object is primarily due to:

  • An increase in salary expenses following an increase in staff within the CSA.

The increase of $9.4 million in quarterly and cumulative expenditures for the Professional and special services standard object is primarily due to:

  • An increase in the payment schedule for the Canadarm3 project associated with the start of the definition phase.

The increase of $3.2 million in quarterly and cumulative expenditures for the Transfer Payments standard object is primarily due to:

  • The variations in the payment schedule to the European Space Agency (ESA) and the exchange rate.

3. Risks and Uncertainties

The year-to-date expenditures for the 1st quarter of - represent 12% of the planned expenditures for the year ending , whereas 25% of the fiscal year has passed. The level of expenditures is higher than it was in the - fiscal year (8%) and lower than the - fiscal year (14%). The current situation presents no concerns. 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. Also, the possibility of a disruption of services or unauthorized disclosure of information resulting from a cybersecurity event poses an additional risk to the agency's operations. These elements translate into 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, as well as cybersecurity risk mitigation measures. 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 been migrated to the Pay Centre, the CSA continues to offer on-site compensation services. The compensation team, whose 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

Since , CSA employees have been working from the workplace a minimum of 2 days a week.

In addition, one important personnel change occurred during the first quarter. Stéphanie Durand was appointed on as the new Vice-President, Space Program Policy, replacing Mary Preville who retired.

Approval by Senior Officials

Approved by,

The original version was signed by Lisa Campbell, President, in Longueuil, Quebec, on .

The original version was signed by Assia Turenne, Acting Chief Financial Officer and Vice President, Corporate Strategy and Innovation, 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

Footnote 2
$
Used during
the quarter
ended

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

Footnote 2
$
Used during
the quarter ended

$
Year to date
used at
quarter-end
$
Vote 1: Operating expenditures 221,482 31,300 31,300 217,472 29,204 29,204
Vote 5: Capital expenditures 225,848 15,606 15,606 257,400 5,848 5,848
Vote 10: Grants and contributions 77,912 12,488 12,488 85,581 9,223 9,223
Contributions to employee
benefit plans
12,160 3,040 3,040 12,271 2,819 2,819
Spending of proceeds from the
disposal of surplus Crown assets
2 - - 581 - -
Total budgetary authorities 537,404 62,434 62,434 573,305 47,094 47,094

Annex 2

CANADIAN SPACE AGENCY
Quarterly Financial Report
For the quarter ended
Departmental budgetary expenditures by Standard Object
(unaudited)
(in thousands of dollars)
Expenditures: 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
$
Personnel 92,163 24,335 24,335 91,130 22,435 22,435
Transportation and communications 9,721 984 984 8,772 431 431
Information 2,513 284 284 2,202 141 141
Professional and special services 336,103 22,325 22,325 365,751 12,917 12,917
Rentals 5,052 535 535 4,644 646 646
Repair and maintenance 4,902 401 401 5,662 529 529
Utilities, materials and supplies 2,330 278 278 1,327 282 282
Acquisition of land, buildings and works 568 - - - - -
Acquisition of machinery and equipment 3,081 798 798 5,643 495 495
Transfer payments 77,912 12,488 12,488 85,581 9,223 9,223
Other subsidies and payments 3,059 6 6 2,593 (5) (5)
Total budgetary expenditures 537,404 62,434 62,434 573,305 47,094 47,094
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