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Elections Canada Quarterly Financial Report 2014–2015 – For the quarter ended June 30, 2014

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

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 report should be read in conjunction with the Main Estimates. This quarterly report has not been subject to an external audit or review.

The mandate described in this section does not take into account amendments pursuant to Bill C-23 (Fair Elections Act), which received royal assent on June 19, 2014.

The Office of the Chief Electoral Officer, commonly known as Elections Canada, is an independent, non-partisan agency that reports directly to Parliament. Its mandate is to:

A summary description of the agency’s programs can be found at www.elections.ca/content.aspx?section=res&dir=rep/rpp/rpp2013&document=p2&lang=e.

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the agency's spending authorities granted by Parliament and those used by the agency consistent with the Main Estimates for the 2014–2015 fiscal year. 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 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. With respect to Elections Canada, the Canada Elections Act, the Electoral Boundaries Readjustment Act and the Referendum Act provide for all expenditures, with the exception of salaries of indeterminate employees, which are funded through an annual appropriation. Budgetary statutory authorities amounts presented in the tables below reflect year-to-date expenditures only since statutory authorities are granted as expenditures are incurred.

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.

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

Highlights of fiscal quarter and fiscal year-to-date (YTD) results

During the first quarter of 2014–2015, Elections Canada completed the implementation of the new federal electoral district boundaries, continued its readiness activities for 2015 and conducted by-elections in the electoral districts of Fort McMurray–Athabasca (Alberta), Macleod (Alberta), Scarborough–Agincourt (Ontario) and Trinity–Spadina (Ontario). The agency also continued its projects to improve services to electors, such as modernizing the voter registration system, renewing the Electoral Reminder Program and improving accessibility for electors with disabilities.

First quarter year-over-year variance

In the first quarter of 2014–2015, budgetary expenditures totalled $23.2 million, compared to $24.2 million in the same period of 2013–2014. The net decrease of $1.0 million is mainly explained as follows:

Figure 1 – First Quarter Expenditures Compared to Annual Authorities (Appropriation and Statutory Authority)*

Figure 1

*Annual authorities for statutory funds reflect expenditures for the first quarter only since statutory authorities are granted as expenditures are incurred.

Click here for a textual description of Figure 1.

Risks and uncertainties

The operating budget freeze that was recently announced for the 2014–2015 and 2015–2016 fiscal years, the adoption of Bill C-23 (Fair Elections Act) and the addition of 30 electoral districts may have an impact on Elections Canada's appropriation. The agency is currently assessing the financial impact and ways to address these pressures.

Elections Canada's overall statutory expenditures are guided by the preparations required for the 2015 general election. The work flowing from the two recently published reports to strengthen the integrity of the electoral system and its administration will lead to additional expenditures. In this regard, an important driver is the recent enactment of the electoral reform by the government, which we expect requires the agency to review its operating budget, including its appropriation, in future years.

Elections Canada's expenditures are influenced by the frequency and number of electoral events (general elections, by-elections) and by infrequent exercises such as referendums and the electoral district boundaries readjustment process. Any of these events could significantly change expenditures from one fiscal year to the next.

Significant changes in relation to operations, personnel and programs

Bill C-23, which received royal assent on June 19, 2014, will bring significant changes to Elections Canada's mandate and operations. It will also result in changes to the internal structure of the agency as it shifts toward implementing the new legislation. Notably, the Commissioner of Canada Elections will be transferred to the Office of the Director of Public Prosecutions in the fall of 2014.

In order to follow the spirit of the law and give effect to the new provisions, the agency has decided to bring together programs related to its regulatory functions under a single Deputy Chief Electoral Officer. Mr. Stéphane Perrault will assume responsibility for the new Regulatory Affairs Sector. This sector comprises political financing, electoral integrity, legal services and the new program for guidelines and advance rulings.

Budget 2012 implementation

This section provides an overview of the savings measures announced in Budget 2012 that will be implemented in order to refocus government and programs; make it easier for Canadians and business to deal with their government; and, modernize and reduce the back office.

Elections Canada has responded to the spirit of the federal governmen's deficit reduction action plan. The agency has reduced its annual operating budget by $7.5 million, or 8 percent, starting in 2012–2013. In making these reductions, the agency has not included expenditures that fall outside its annual operating budget – namely, those related to transfer payments required by statute, the delivery of electoral events, the readjustment of electoral boundaries and the relocation of Elections Canada's offices to Gatineau. As the reductions are applied only to the agency's operating budget, reductions in authorities and expenditures are not readily apparent when comparing year over year as a result of fluctuations in non-operating expenditures, timing differences and expenditure trends related to the four-year election cycle.

Elections Canada has applied the budget reductions as follows:

The agency has reduced the budget available to programs for time-limited initiatives. Some examples of initiatives that have been delayed or postponed include the modernization of nomination processes for candidates, the advertising program aimed at youth and readiness activities for referendums.

The agency has also extended the time frame for the development and delivery of various other programs and corporate initiatives.

Approval by senior officials

Marc Mayrand
Chief Electoral Officer of Canada

Hughes St-Pierre, CPA, CMA
Chief Financial and Planning Officer


Gatineau, Canada
August 29, 2014

Table A.1
Elections Canada
Quarterly financial report
For the quarter ended June 30, 2014

Statement of Authorities (unaudited)

 

Fiscal year 2013-2014 (in thousands of dollars)
  Total available for use for the year ending March 31, 2014 1 Used during the quarter ended June 30, 2013 Year to date used at quarter-end
Vote 15 – Program expenditures 2 30,081 7,242 7,242
Statutory authorities      
Electoral expenditures 3 15,355 15,355 15,355
Contributions to employee benefit plans 1,104 1,104 1,104
Expenses under Electoral Boundaries Reajustment Act 384 384 384
Salary of Chief Electoral Officer 74 74 74
Total Statutory authorities 16,917 16,917 16,917
Total authorities 46,998 24,159 24,159

Statement of Authorities (unaudited) (continued)

Fiscal year 2014-2015 (in thousands of dollars)
  Total available for use for the year ending March 31, 2015 1 Used during the quarter ended June 30, 2014 Year to date used at quarter-end
Vote 15 – Program expenditures 2 30,538 8,539 8,539
Statutory authorities      
Electoral expenditures 3 12,914 12,914 12,914
Contributions to employee benefit plans 1,604 1,604 1,604
Expenses under Electoral Boundaries Reajustment Act      
Salary of Chief Electoral Officer 100 100 100
Total Statutory authorities 14,618 14,618 14,618
Total authorities 45,156 23,157 23,157

More information is available in Table A.2

1 Budgetary statutory authorities amounts in the "Total available for use for the year ending March 31, 201x" columns reflect first quarter expenditures only since statutory authorities are granted as expenditures are incurred.

2 Program expenditures is an annual appropriation that funds the salaries of Elections Canada's permanent staff.

3 Under the Statutory authority, Electoral expenditures funds the operating expenditures of the agency and the additional expenditures incurred in preparing and conducting elections, reimbursing election expenses to eligible candidates and parties, and enforcing the Canada Elections Act.



Table A.2
Elections Canada
Quarterly financial report
For the quarter ended June 30, 2014

Fiscal year 2013-2014 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2014 1 Expended during the quarter ended June 30, 2013 Year to date used at quarter-end
Expenditures:
Personnel 2 33,814 10,975 10,975
Transportation and communications 452 452 452
Information 181 181 181
Professional and special services 3,326 3,326 3,326
Rentals 279 279 279
Repair and maintenance 2,403 2,403 2,403
Utilities, materials and supplies 92 92 92
Acquisition of land, buildings and works      
Acquisition of machinery and equipment 80 80 80
Transfer payments 6,368 6,368 6,368
Public debt charges -   -   -  
Other subsidies and payments 3 3 3
Total gross budgetary expenditures 46,998 24,159 24,159
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 46,998 24,159 24,159


Departmental budgetary expenditures by Standard Object (unaudited) (continued)

Fiscal year 2014-2015 (in thousands of dollars)
  Planned expenditures for the year ending March 31, 2015 1 Expended during the quarter ended June 30, 2014 Year to date used at quarter-end
Expenditures:
Personnel 2 35,238 13,239 13,239
Transportation and communications 610 610 610
Information 552 552 552
Professional and special services 3,580 3,580 3,580
Rentals 3,058 3,058 3,058
Repair and maintenance 55 55 55
Utilities, materials and supplies 194 194 194
Acquisition of land, buildings and works -   -   -  
Acquisition of machinery and equipment 242 242 242
Transfer payments 309 309 309
Public debt charges   -   -   -  
Other subsidies and payments 1,318 1,318 1,318
Total gross budgetary expenditures 45,156 23,157 23,157
Less Revenues netted against expenditures:
Revenues -   -   -  
Total Revenues netted against expenditures: -   -   -  
Total net budgetary expenditures 45,156 23,157 23,157

1 Statutory expenditures in the "Planned expenditures for the year ending March 31, 201x" columns reflect first quarter expenditures only since statutory authorities are granted as expenditures are incurred.

2 Personnel expenditures include both Vote 15 – Program expenditures and Budgetary statutory authorities; all other categories of expenditures are solely Budgetary statutory.