Quarterly financial report for the quarter ended September 30, 2020

Statement outlining results, risks and significant changes in operations, personnel and program

Introduction

This quarterly report was 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. It should be read in conjunction with the OPC Main and Supplementary Estimates.

The OPC’s mandate is overseeing compliance with both the Privacy Act (PA), which covers the personal information-handling practices of federal government institutions, and the Personal Information Protection and Electronic Documents Act (PIPEDA), Canada’s federal private sector privacy law.

Detailed information on the OPC’s authority, mandate and programs can be found in our Departmental Plan (DP) and the Main Estimates.

Basis for Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Office’s spending authorities granted by Parliament and those used by the Office, consistent with the Main Estimates and the Supplementary Estimates (as applicable) for fiscal year 2020-21. 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. (More information)

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.

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 OPC uses full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

This report has not been subject to an external audit or review.

Highlights of fiscal quarter and fiscal year to date (YTD) Results

This section highlights the significant variances between actual expenditures and planned expenditures that affected both the quarter and the year-to-date results, compared to the same period the preceding fiscal year.

Statement of authorities analysis

As reflected in the statement of authorities table, the authorities available for use for the year are $23.1M, which represents 9/12 of the OPC’s 2020-21 Main Estimates amount and the operating budget carry forward. This decrease of $7.4M when compared to 2019-20 in the authorities available for use is due to the reduced supply of the Main Estimates. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall. The OPC is expected to receive full supply for the 2020-21 Main Estimates in December 2020.

The OPC’s expected total authorities available for use for the year 2020-21 are $30.5M, same amount as in 2019-20. As of September 30, 2020, the OPC used $13.3M of its authorities available for use while for the same period in the preceding fiscal year, the OPC had used $11.8M of its authorities available for use. This increase is mainly attributable to the implementation of the Budget 2019 measure and relates more specifically to additional personnel expenditures due to new hiring’s and salary increases following the ratification of collective agreements.

The OPC provides Internal Support Services to other small government departments related to the provision of information technology services. Pursuant to section 29.2 of the Financial Administration Act, Internal Support Services agreements are recorded as revenues.

Budgetary expenditures by standard object analysis

As per the departmental budgetary expenditures by standard object table, the OPC’s quarterly spending has increased by $0.7M or 11.4% compared to the previous year while the year-to-date spending has increased by $1.5M or 12.6% when compared to the same period last fiscal year. These increases are mainly attributable to the implementation of the Budget 2019 measure and relates more specifically to additional personnel expenditures due to new hiring’s and salary increases following the ratification of collective agreements and additional software licenses. However, due to the COVID-19 outbreak, the OPC’s expenditures for travel, exhibits, training, translation and temporary help services have decreased. The OPC’s acquisition of informatics technology equipment have also decreased when compared to the same period last fiscal year.

Risks and Uncertainties

As mentioned in previous quarterly reports, the OPC’s key corporate risks are identified and assessed through its strategic planning process, which includes an environmental scanning exercise and an update of its Corporate Risk Profile. This year again, the Office continues to deal with a challenging operating context, stemming from the growing digital economy. For more information on these challenges, and how the OPC is addressing them, please refer to the section titled Plans at a glance and Operating Context of the OPC’s 2020-21 Departmental Plan.

The outbreak of the Coronavirus disease [“COVID-19”] has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. The duration and impact of the COVID-19 outbreak is still unknown at this time. As a result, it is not possible to estimate reliably the length and severity of the impact on OPC’s financial position and financial results in future periods.

In addition, the OPC continues to take actions to mitigate the issues arising with the implementation of the Phoenix pay system for its employees and to monitor closely any salary payments adjustments that may be required.

Significant changes in relation to operations, personnel and programs

As with other government departments and agencies, the COVID-19 outbreak is creating challenges for the OPC. Despite this, we have remained operational throughout the pandemic while respecting public health guidelines.  Teleworking continues to be very effective for the OPC and staff are able to provide services as usual.

The pandemic has created an increase in activity as the greater use of digital technologies has raised many privacy issues.  Of note, new guidance was produced on Privacy in a Pandemic environment, a framework was developed to assess COVID-19 related initiatives from a privacy perspective, engagement and coordination efforts with Provincial and Territorial counterparts as well as international organizations took place and advisory engagements on multiple federal and private sector COVID-19 initiatives were carried out. Also of note, the number of complaints received so far this year has decreased compared to last year while privacy breaches reported to our Office have increased significantly.

During the last quarter, the Privacy Commissioner of Canada has shared with members of two parliamentary committees his response to an information request on the privacy implications of the Government of Canada’s COVID Alert application and the adequacy of current privacy laws.

No other significant changes related to operations, personnel or programs occurred during the second quarter of 2020-21.

Approval by Senior Officials:

Approved by

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Statement of authorities (unaudited)

For the quarter ended September 30, 2020 (in thousands of dollars)

	Fiscal year 2020-2021			Fiscal year 2019-2020
	Total available for use for the year ending March 31, 2021	Used during the quarter ended September 30, 2020	Year to date used at quarter end	Total available for use for the year ending March 31, 2020	Used during the quarter ended September 30, 2019	Year to date used at quarter end
Program expenditures	20,955	6,062	11,844	28,454	5,450	10,519
Less: Revenues netted against expenditures	(150)	(57)	(57)	(200)	(48)	(48)
Budgetary statutory authority - Employee benefit plan	2,322	774	1,548	2,269	686	1,373
Total budgetary authorities	23,127	6,779	13,335	30,523	6,088	11,844
TOTAL AUTHORITIES	23,127	6,779	13,335	30,523	6,088	11,844

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Departmental budgetary expenditures by standard object (unaudited)

For the quarter ended September 30, 2020 (in thousands of dollars)

	Fiscal year 2020-2021			Fiscal year 2019-2020
	Planned expenditures for the year ending March 31, 2021	Expended during the quarter ended September 30, 2020	Year to date used at quarter end	Planned expenditures for the year ending March 31, 2020	Expended during the quarter ended September 30, 2019	Year to date used at quarter end
Expenditures
Personnel	18,766	5,950	11,469	24,305	4,775	9,457
Transportation and communications	441	58	100	444	127	228
Information	381	14	49	377	92	148
Professional and special services	2,169	603	965	4,065	785	1,176
Rentals	559	63	560	429	57	391
Repair and maintenance	62	3	21	63	23	52
Utilities, materials and supplies	80	44	61	77	22	45
Acquisition of land, buildings and works	-	34	34	-	-	-
Acquisition of machinery and equipment	443	36	38	462	183	234
Transfer payments	375	-	-	500	17	19
Other subsidies and payments *	1	30	93	1	56	143
Total budgetary expenditures	23,277	6,836	13,392	30,723	6,137	11,893
Less: revenues netted against expenditures
Internal Support Services	(150)	(57)	(57)	(200)	(48)	(48)
Total revenues netted against expenditures	(150)	(57)	(57)	(200)	(48)	(48)
TOTAL BUDGETARY EXPENDITURES	23,127	6,779	13,335	30,523	6,088	11,844
* The main purpose of this reporting object is to capture costs that will be transferred to other reporting objects prior to the end of the fiscal year, for example, transactions related to the Government of Canada "corporate acquisition cards" and Interdepartmental Settlements