Section II: Expenditure Overview

Actual Expenditures

Budgetary Financial Resources (dollars)

2015–16
Main Estimates

2015–16
Planned Spending

2015–16
Total Authorities
Available for Use

2015–16
Actual Spending
(authorities used)

Difference
(actual minus planned)

2,214,476,711

2,214,476,711

1,715,634,089

1,335,178,669

(879,298,042)

Human Resources (Full-Time Equivalents [FTEs])

2015–16
Planned

2015–16
Actual

2015–16
Difference
(actual minus planned)

3,832

3,936

104

Budgetary Performance Summary

Budgetary Performance Summary for Programs and Internal Services (dollars)

Programs and Internal Services

2015–16
Main Estimates

2015–16
Planned Spending

2016–17
Planned Spending

2017–18
Planned Spending

2015–16
Total Authorities Available for Use

2015–16
Actual Spending (authorities used)

2014–15
Actual Spending (authorities used)

2013–14
Actual Spending (authorities used)

1.1 Market Access and Diversification

48,685,006

48,685,006

43,993,476

28,361,877

90,964,090

75,927,073

61,566,240

59,733,334

1.2 Innovation for New Products and Processes

83,438,001

83,438,001

96,074,981

55,536,596

92,394,682

93,375,233

71,707,214

94,093,063

1.3 Investments in Natural Resource Sectors

54,230,114

54,230,114

62,900,219

65,272,906

67,692,074

68,270,162

60,589,504

65,333,593

1.4 Statutory Programs – Atlantic Offshore*

1,181,938,140

1,181,938,140

743,336,158

761,960,697

347,989,273

347,989,273

837,746,067

795,884,721

2.1 Energy-Efficient Practices and Lower-Carbon Energy Sources

253,978,461

253,978,461

183,336,817

133,361,992

258,837,128

211,012,423

291,745,439

314,652,883

2.2 Technology Innovation

126,472,078

126,472,078

115,838,434

108,270,795

143,292,764

143,620,407

151,832,220

155,738,548

2.3 Responsible Natural Resource Management

193,117,981

193,117,981

29,619,508

28,958,607

410,119,888

121,598,627

267,570,932

282,047,031

3.1 Protection for Canadians and Natural Resources

58,672,639

58,672,639

57,808,743

49,858,500

73,440,885

73,709,947

65,692,439

65,535,095

3.2 Landmass Information

71,155,143

71,155,143

75,092,662

51,156,481

83,529,098

74,110,670

78,469,116

73,828,231

Internal Services

142,789,148

142,789,148

184,517,755

137,682,086

147,374,207

125,564,854

162,499,616

184,198,094

Total

2,214,476,711

2,214,476,711

1,592,518,753

1,420,420,537

1,715,634,089

1,335,178,669

2,049,418,787

2,091,044,593

* Statutory Programs — Atlantic Offshore: As per the various Atlantic Offshore Accords, the Government of Canada receives royalties for offshore oil and gas production and subsequently pays an equal amount to the provinces of Nova Scotia and Newfoundland and Labrador.

Departmental Spending Trend

The overall $879 million difference between the 2015-16 Planned Spending of $2,214 million and actual spending of $1,335 million is attributed to a $499 million reduction in authorities and $380 million in unspent funding.

The $499 million reduction in authorities is explained by the following:

Decreases due to:

  • Reduced authority for statutory payments under the Atlantic Offshore Accord Acts due to reduced oil prices, lower currency exchange rate (CAD/USD) and, reduced commodity prices and production in the offshore area; and,
  • Various transfers to other government departments.

Increases due to:

  • Additional funding received through Supplementary Estimates for the Nuclear Legacy Liabilities Program (NLLP), the Federal Infrastructure Initiative, the renewal of the Targeted Geoscience Initiative, the Soldier Settlement Board mineral rights, defining the outer limits of Canada’s continental shelf in the Arctic Ocean, and the renewal of the Major Project Management Office (MPMO) horizontal initiative;
  • Various transfers from other government departments; and,
  • The receipt of the operating budget carry forward.

The $380 million in unspent funding is explained by the following:

  • Funds frozen and not available for spending as a result of a government decision to implement the restructuring of AECL’s nuclear laboratories by transferring the funding and responsibilities related to NLLP and the Port Hope Area Initiative (PHAI) from NRCan to AECL;
  • Funding being moved into future years for the Gunnar Mine Remediation;
  • Unspent funds in the Operating vote being carried forward to next year, mainly to cover unfunded collective bargaining increases;
  • Unspent funds in the Capital vote being carried forward to next year, mainly for the Federal Infrastructure Initiative; and
  • Unspent funds in the Grants and Contributions vote, mainly pertaining to the ecoENERGY for Biofuels program (due to lower than anticipated production by biofuel companies) and the ecoENERGY Renewable Power program (due to lower incentive payouts based on lower production levels).

Departmental Spending Trend

Departmental Spending Trend Graph

Departmental Spending Trend Graph

 

Text version
The table below illustrates the departmental spending trend, in dollars, for the period 2011-12 to 2016-17.
  2013-14 2014-15 2015-16 2016-17 2017-18 2018-10
Sunset Programs - Anticipated 0 0 0 132,062 367,842 38,133
Statutory 847,351 893,906 401,521 796,717 814,225 858,139
Voted 1,243,694 1,155,512 933,657 795,802 606,196 559,667
Total 2,091,045 2,049,419 1,335,179 1,724,581 1,788,263 1,455,939
 

For 2013-14, 2014-15 and 2015-16, the figures represent actual expenditures as reported in the Public Accounts. NRCan’s spending profile remains steady from 2013-14 to 2014-15 and drops significantly in 2015-16, mainly as a result of the Statutory Atlantic Offshore Accounts, the transfer of responsibility over NLLP and PHAI to AECL and reduced spending pertaining to the ecoENERGY for Biofuels and the ecoENERGY Renewable Power programs, as well as less severance pay costs recovered from Treasury Board (TB). These reductions were slightly offset by the implementation of the Federal Infrastructure Initiative.

When comparing planned spending to actual expenditures, costs recovered from TB are recorded as an expense by the Department even though they were not part of the Department’s Planned Spending. These costs include parental benefits, severance pay, and vacation credits payable upon termination; they apply throughout Section III of this document and they contribute, in part, to the financial variance between the actual expenditures and planned spending.

The increase between 2015-16 actual expenditures and 2016-17 planned spending is mainly attributed to the Statutory Atlantic Offshore Accounts projected increase; offset by the transfer of responsibility over NLLP and PHAI and the sunsetting of the clean energy envelope.

For 2016-17 to 2018-19, the figures represent total planned spending for the fiscal year, which reflects approved funding by TB to support the Departmental strategic outcomes. Planned spending in Voted authorities from 2016-17 to 2018-19 is declining, mainly as a result of reduced funding profile for major initiatives (e.g., ecoENERGY for Renewable Power), and sunsetting programs, including the following:

Major initiatives sunsetting in 2016-17 are:

  • Federal Infrastructure Budget 2015 announcement;
  • Forest Innovation Program and Expanding Market Opportunities, which were extended to 2017-18 through Budget 2015 but funding has not yet been included in planned spending for 2017-18;
  • ecoENERGY for Biofuels; and
  • Wind Power Production Incentive.

Major initiatives sunsetting in 2017-18 are:

  • Investments in Forest Industry Transformation; and
  • World Class Prevention, Preparedness and Response Regime.

Statutory authorities from 2016-17 to 2018-19 are likely to increase, mainly as a result of the Atlantic Offshore Accounts. Statutory payment obligations under these accords are largely driven by oil and gas prices, production levels and anticipated corporate income taxes related to offshore operations. The increase was based on the Department's economic modeling forecasts prepared in the fall of 2015 when the 2016-17 Report on Plans and Priorities was developed.

The Sunset Programs Anticipated for 2016-17 to 2018-19 mostly reflect announcements in Budget 2015 or Budget 2016 that are not yet reflected in voted level for those years but are provided to give a more reasonable picture of the future of the Department.

Expenditures by Vote

For information on NRCan’s organizational voted and statutory expenditures, consult the Public Accounts of Canada 2016.xiii

Alignment of Spending With the Whole-of-Government Framework

Alignment of 2015-16 Actual Spending With the Whole-of-Government Framework xiv(dollars)

Program

Spending Area

Government of Canada Outcome

2015–16
Actual Spending

1.1 Market Access and Diversification

Economic Affairs

Strong Economic Growth

75,927,073

1.2 Innovation for New Products and Processes

Economic Affairs

Strong Economic Growth

93,375,233

1.3 Investment in Natural Resource Sectors

Economic Affairs

Strong Economic Growth

68,270,162

1.4 Statutory Programs – Atlantic Offshore

Economic Affairs

Strong Economic Growth

347,989,273

2.1 Energy-Efficient Practices and Lower-Carbon Energy Sources

Economic Affairs

A Clean and Healthy Environment

211,012,423

2.2 Technology Innovation

Economic Affairs

A Clean and Healthy Environment

143,620,407

2.3 Responsible Natural Resource Management

Economic Affairs

A Clean and Healthy Environment

121,598,627

3.1 Protection for Canadians and Natural Resources

Social Affairs

A Safe and Secure Canada

73,709,947

3.2 Landmass Information

Social Affairs

A Safe and Secure Canada

74,110,670

Total Spending by Spending Area (dollars)

Spending Area

Total Planned Spending

Total Actual Spending

Economic affairs

-

1,061,793,198

Social affairs

-

147,820,617

International affairs

-

-

Government affairs

-

-

Financial Statements and Financial Statements Highlights

Financial Statements

The Department’s consolidated financial statements are available on the NRCan website.xv

Financial Statements Highlights

The financial statements highlights are intended to provide a general overview of the Department’s operations and financial position.

The financial statement highlights presented in this section are drawn from NRCan’s consolidated financial statements and have been prepared in accordance with Treasury Board accounting policies, which are based on Canadian public sector accounting standards and are therefore different from reporting on the use of authorities, reflected in Section I and II of this report. Reconciliation between the net cost of operations and the authorities used is set out in Note 3 of the Department’s consolidated financial statements.

Condensed Statement of Operations (unaudited)
For the Year Ended March 31, 2016 (dollars)

Financial Information

2015–16
Planned
Results

2015–16
Actual

2014–15
Actual

Difference (2015–16 actual minus 2015–16 planned)

Difference (2015–16 actual minus 2014–15 actual)

Total expenses

2,190,166,694

1,373,162,269

2,100,576,784

(817,004,425)

(727,414,515)

Total revenues

35,079,370

30,836,347

25,896,040

(4,243,023)

4,940,307

Net cost of operations before government funding and transfers

2,155,087,324

1,342,325,922

2,074,680,744

(812,761,402)

(732,354,822)

*Transferred operations are included in the total expenses as it relates to the transferred responsibilities of the NLLP and the Historic Waste Program to AECL which became effective on September 13, 2015.

The 2015-16 Planned Results are derived from the amounts presented in the Department’s 2015-16 Consolidated Future-Oriented Statement of Operations xv and included in NRCan’s 2015-16 Report on Plans and Priorities. The planned results were based on several assumptions and information known at that time.

Total expenses between 2015-16 actual of $1,373 million and 2015-16 planned results of $2,190 million represent $817 million, or 37 percent of overestimated expenses. This is mainly attributable to a $847 million decrease in Atlantic Offshore Statutory programs in continuing operations mainly due to decreased oil prices, lower production levels and a lower currency rate.

The planned net revenues of $35 million were based on historical data. The actual net revenues were $31 million in 2015-16 compared to $26 million in 2014-15, for a net increase of $5 million.

Difference between 2015-16 and 2014-15 actuals

Total expenses were $1,373 million in 2015-16 compare to $2,101 million in 2014-15 for a net decrease of $727 million, or 53 percent. This net decrease is mainly explained by:

  • A $513 million decrease in Atlantic Offshore Statutory Programs mainly due to decreased oil prices, lower production levels and lower currency rate and a $79 million decrease in ecoENERGY for Biofuels Program under Energy-Efficient Practices and Lower Carbon Energy Sources as a result of terminated projects and proponents producing less.
  • A $105 million decrease in total expenses for transferred operations from $124 million in 2015-16 to $229 million in 2014-15 is due to the transfer of responsibilities from NLLP and the Historic Waste Program to the AECL as of September 2015. Therefore 2015-16 had only 6 months of operating costs compared to 12 months in 2014-15.

The chart presenting NRCan’s actual expenses by type for 2016 is available on the NRCan website.

Condensed Statement of Financial Position (unaudited)
As at March 31, 2016 (dollars)

Financial Information

2015–16

2014–15

Difference
(2015–16 minus
2014–15)

Total net liabilities

432,291,969

1,579,823,467

(1,147,531,498)

Total net financial assets

257,773,468

378,181,969

(120,408,501)

Departmental net debt

174,518,501

1,201,641,498

(1,027,122,997)

Total non-financial assets

272,387,642

267,355,166

;5,032,476

Departmental net financial position

97,869,141

(934,286,332)

1,032,155,473

Total net liabilities were $432 million in 2015-16, compared to $1,580 million in 2014-15, for a decrease of $1,148 million or 73 percent. This variance is mainly attributable to:

  • A decrease of $984 million in environmental liabilities and a $40 million in accounts payable and accrued liabilities related to the transfer to the AECL for the NLLP and the Historic Waste Program; and
  • A decrease of $120 million in accounts payable and accrued liabilities mainly explained by a decrease of $47 million related to transfer payments under the Atlantic Offshore Statutory Programs.

Total net financial assets were $258 million in 2015-16, compared to $378 million in 2014-15, for a net decrease of $120 million or 32 percent. This variance is attributable to the decrease in the account Due from Consolidated Revenue Fund (CRF) of $120 million, which represents the net amount of cash the Department is entitled to draw from the CRF without further appropriations.  The decrease is mainly due to the decrease in accounts payable and accrued liabilities at year-end.

The overall difference between the total net liabilities and total net financial assets are then reflected in the Departmental net debt.

Total non-financial assets, which include prepayments, inventory and tangible capital assets were $272 million in 2015-16, compared to $267 million in 2014-15 for a net increase of $5 million.  This variance is mainly due to the increase in tangible capital assets due to additional funding received for the Federal Infrastructure Initiative offset by a decrease in prepayments due to the transfer of responsibilities of the NLLP to AECL.

The total non-financial assets are then subtracted from the Departmental net debt to reflect the Departmental net financial position