1. Introduction
This Quarterly Financial Report (QFR) has been prepared by management as required by the Federal Economic Development Agency for Northern Ontario (FedNor) under section 65.1 of the Financial Administration Act, in the form and manner prescribed by the Treasury Board.
This report must be read in conjunction with the Main Estimates and Supplementary Estimates (as applicable) for the fiscal year 2023-24. These documents provide a brief description of FedNor’s mandate and programs.
This report has not been subject to an external audit or review.
1.1 Authority, mandate and programs
FedNor was first created as a federal initiative within the Department of Industry in 1987 with a mandate to assist in the expansion and diversification of the economy of Northern Ontario. In fiscal year 2021-22, via Orders in Council dated August 6, 2021, and coming into force on August 12, 2021, transferring from the Department of Industry to the Federal Economic Development Agency for Northern Ontario the control and supervision of that portion of the federal public administration in the Department of Industry known as the Federal Economic Development Initiative for Northern Ontario.
FedNor works to create opportunities for economic growth by helping businesses become more competitive, innovative and productive, by working with diverse communities to develop and diversify local economies, and by championing the strengths of the region.
A summary description of FedNor’s core responsibilities can be found on its external website, as well as in future Departmental Plans.
1.2 Basis of presentation
This quarterly report was prepared by FedNor using an expenditure basis of accounting. The accompanying Statement of Authorities includes the department's spending authorities granted by Parliament, and those used by the department consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2023–24 fiscal year. This 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.
Prior authority from Parliament is required before funds can be spent by the Government. Authorities available for use are given through appropriation acts in the form of annually approved limits, or through legislation in the form of statutory spending authorities for specific purposes.
FedNor uses the full accrual method of accounting to prepare and present its annual financial statements that make up part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
1.3. Financial structure and definitions of the Federal Economic Development Agency for Northern Ontario (FedNor)
The following descriptions are referred to throughout the report:
- Operating (Vote 1): Amount approved for the fiscal year for the department to spend on salary and operating expenditures.
- Grants and contributions (Vote 5): Amount approved for the fiscal year for the department to provide grant and contribution (G&C) funding to prospective recipients.
- Authority: Approvals from Parliament to spend up to a specific amount.
- Employee benefit plan (EBP): The department’s contribution to public service employee benefit plans.
2. Highlights of fiscal quarter and fiscal year-to-date (YTD) results
This section highlights significant changes to the fiscal quarter results as of September 30, 2023. For more details on FedNor’s statement of authorities, see Appendix 6.1: Statement of authorities.
Statement of authorities: Vote 1 – Net operating expenditures
As of September 30, 2023, total authorities available for fiscal year 2023-24 are $16.90 million, compared with $12.91 million as of September 30, 2022. This represents an increase of $3.9 million (30.2%) this year.
The variance consists of a number of items, some of which varied upward, others downward, resulting in a net increase of $3.9 million. The most significant variances are:
- Increase in funding (+$5.2M)
- Standalone agency: $4.6M
- Northern Ontario Development Program: $282K
- Previous fiscal year carry forward: $299K
- Decrease in funding (-$1.2M)
- Tourism Relief Fund: -$695K
- Canada Community Revitalization Fund: -$510K
Vote 1 authorities used year-to-date are $5.31 million at the end of the second quarter this fiscal year, with no significant variance compared to $4.37 million as of September 30, 2022.
Graph 1 illustrates the total authorities available for use for the year, as well as the amount used year-to-date at quarter end.
| (in thousands of dollars) | 2022-2023 | 2023-2024 |
|---|---|---|
| Total authorities available for use |
12,911
|
16,894
|
| Year-to-date authorities used |
4,374
|
5,308
|
Statement of authorities: Vote 5 – Grants and contributions
As of September 30, 2023, total authorities available for fiscal year 2023-24 are $52.73 million, compared with $109.62 million as of September 30, 2022. This represents a decrease of $56.9 million (51.9%) this year.
This variance consists of a number of items, some of which varied upward, others downward, resulting in a net decrease of $56.9 million. The most significant variances are:
- Decrease in funding (- $61.5M)
- Tourism Relief Fund: - $15.0M
- Canada Community Revitalization Fund: - $9.4M
- REGI Top-Up: - $4.1M
- Previous year funding reprofiled into 2022-23: - $18.7M
- Job & Growth Fund: - $3.6M
- Refund of previous year advance: - $9.5M
- Women Entrepreneurship Strategy: - $1.0M
- Other: - $0.2K
- Increase in funding (+$4.6M)
- Northern Ontario Development Program: $4.6M
Total authorities used during the second quarter ended September 30, 2023 were $5.33 million as compared to the $11.52 million for the same period last year. The decrease of $6.19 million can be mainly attributed to the timing of processing claims for payments and a decrease in funding.
Graph 2 illustrates the total authorities available for use for the year, as well as the amount used year-to-date at quarter end.
| (in thousands of dollars) | 2022-2023 | 2023-2024 |
|---|---|---|
| Total authorities available for use |
109,618
|
52,733
|
| Year-to-date authorities used |
31,467
|
16,125
|
3. Risks and uncertainties
FedNor has a Memorandum of Understanding with Innovation, Science and Economic Development Canada (ISED) to continue providing internal services to FedNor, including systems support, information technology support, and security services.
In terms of transfer payment program and transfer payment recipient risk, FedNor transfers funds to recipients each year, while balancing program and recipient risks to deliver on its mandate. FedNor undertakes risk assessments on new, existing and reformed programs, as well as an annual general assessment of each recipient to identify areas of risk. As the majority of grant and contribution funding is being provided through existing programs with well-functioning internal controls, the department continues to seek improvements to enhance those controls as it transitions.
From an internal management perspective, FedNor will continue to monitor, and when required, develop clear mitigation actions towards its financial risks.
4. Significant changes in relation to operations, personnel and programs
There have been no significant changes during the second quarter of the fiscal year 2023-24.
5. Approval of senior officials
The purpose of this section is to provide the approval of senior officials, as required by the Policy on Financial Management, as follows:
Approved by:
Original signed by
Valerie Gideon
President
November 27, 2023
Original signed by
Lisa Furtado CPA, CMA
Chief Financial Officer
November 24, 2023
6. Appendices
6.1 Statement of authorities (unaudited)
| (in thousands of dollars) | Total available for use for the year ending March 31, 2024Footnote * | Used during the quarter ended September 30, 2023 | Year to date used at quarter end |
|---|---|---|---|
| Vote 1 - Operating expenditures |
16,894
|
3,148
|
5,308
|
| Vote 1 - Net operating expenditures |
16,894
|
3,148
|
5,308
|
| Vote 5 - Grants and contributions |
52,733
|
5,334
|
16,125
|
| Total voted authorities |
69,627
|
8,482
|
21,433
|
| Employee benefit plans |
2,032
|
508
|
1,016
|
| Total budgetary statutory authorities |
2,032
|
508
|
1,016
|
| Total authorities |
71,659
|
8,990
|
22,449
|
| (in thousands of dollars) | Total available for use for the year ending March 31, 2023Footnote * | Used during the quarter ended September 30, 2022 | Year to date used at quarter end |
|---|---|---|---|
| Vote 1 - Operating expenditures |
12,911
|
2,456
|
4,374
|
| Vote 1 - Net operating expenditures |
12,911
|
2,456
|
4,374
|
| Vote 5 - Grants and contributions |
109,618
|
11,526
|
31,467
|
| Total voted authorities |
122,529
|
13,982
|
35,841
|
| Employee benefit plans |
1,624
|
541
|
946
|
| Total budgetary statutory authorities |
1,624
|
541
|
946
|
| Total authorities |
124,153
|
14,523
|
36,787
|
6.2 Departmental budgetary expenditures by standard object (unaudited)
| (in thousands of dollars) | Planned expenditures for the year ending March 31, 2024Footnote * | Expended during the quarter ended September 30, 2023 | Year to date used at quarter end |
|---|---|---|---|
| Expenditures: | |||
| Personnel |
15,402
|
2,793
|
5,270
|
| Transportation and communications |
351
|
155
|
202
|
| Information |
1,638
|
62
|
73
|
| Professional and special services |
1,307
|
571
|
695
|
| Rentals |
120
|
2
|
2
|
| Repair and maintenance |
26
|
27
|
30
|
| Utilities, materials and supplies |
5
|
12
|
14
|
| Acquisition of machinery and equipment |
77
|
34
|
38
|
| Transfer payments |
52,733
|
5,334
|
16,125
|
| Total gross budgetary expenditures |
71,659
|
8,990
|
22,449
|
| Total net budgetary expenditures |
71,659
|
8,990
|
22,449
|
| (in thousands of dollars) | Planned expenditures for the year ending March 31, 2023 Footnote * | Expended during the quarter ended September 30, 2022 | Year to date used at quarter end |
|---|---|---|---|
| Expenditures: | |||
| Personnel |
12,779
|
2,807
|
5,062
|
| Transportation and communications |
119
|
27
|
62
|
| Information |
1,052
|
12
|
17
|
| Professional and special services |
332
|
133
|
154
|
| Rentals |
5
|
2
|
2
|
| Repair and maintenance |
165
|
8
|
13
|
| Utilities, materials and supplies |
3
|
4
|
6
|
| Acquisition of machinery and equipment |
80
|
4
|
4
|
| Transfer payments |
109,618
|
11,526
|
31,467
|
| Total gross budgetary expenditures |
124,153
|
14,523
|
36,787
|
| Total net budgetary expenditures |
124,153
|
14,523
|
36,787
|