Analysis of trends in spending and human resources

Actual expenditures

Departmental spending trend graph ¹⁶

Departmental Spending Trend Graph

Text version

The table below illustrates the departmental spending trend, in dollars, for the period 2011-12 to 2016-17.

	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20
Sunset Programs - Anticipated	0	0	0	36,082	349,973	351,859
Statutory	893,906	401,521	526,862	462,484	570,672	661,636
Voted	1,155,512	933,657	831,137	877,462	557,015	503,947
Total	2,049,419	1,335,179	1,357,999	1,376,029	1,477,660	1,517,442

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¹⁶The Sunset Programs – Anticipated for 2017-18 to 2018-19 mainly reflect announcements in Budget 2017 that are not yet reflected in the Voted level for those years and are subject to Parliamentary approval, and programs that are set to expire for which no Government decision on the program’s future has been made. These are provided to give a more reasonable picture of the future of the Department.

Budgetary performance summary for Programs and Internal Services (dollars)

Programs and Internal Services	2016–17 Main Estimates	2016–17 Planned spending	2017–18 Planned spending	2018–19 Planned spending	2016–17           Total authorities available for use	2016–17 Actual   spending (authorities used)	2015–16          Actual   spending (authorities used)	2014–15 Actual   spending (authorities used)
1.1 Market Access and Diversification	43,993,476	43,993,476	60,190,597	35,202,474	74,012,256	70,738,385	75,927,073	61,566,240
1.2 Innovation for New Products and Processes	96,074,981	96,074,981	109,154,844	39,171,754	111,219,760	97,761,228	93,375,233	71,707,214
1.3 Investments in Natural Resource Sectors	62,900,219	62,900,219	73,163,653	67,873,990	74,761,684	74,593,181	68,270,162	60,589,504
1.4 Statutory Programs – Atlantic Offshorea	743,336,158	743,336,158	408,998,253	521,471,910	473,430,813	473,430,813	347,989,273	837,746,067
2.1 Energy-Efficient Practices and Low-Carbon Energy Sources	183,336,817	183,336,817	183,461,546	137,174,523	213,996,763	177,431,795	211,012,423	291,745,439
2.2 Technology Innovation	115,838,434	115,838,434	219,965,182	81,401,428	148,253,404	148,143,884	143,620,407	151,832,220
2.3 Responsible Natural Resource Management	29,619,508	29,619,508	27,437,623	27,055,064	37,951,209	35,319,980	121,598,627	267,570,932
3.1 Protection for Canadians and Natural Resources	57,808,743	57,808,743	70,418,079	59,079,852	79,900,579	79,879,094	73,709,947	65,692,439
3.2 Landmass Information	75,092,662	75,092,662	49,150,177	45,914,237	93,523,442	74,793,210	74,110,670	78,469,116
Subtotal	1,408,000,998	1,408,000,998	1,201,939,954	1,014,345,232	1,307,049,910	1,232,091,570	1,209,613,815	1,886,919,171
Internal Services	184,517,755	184,517,755	138,006,496	113,341,893	167,923,770	125,907,344	125,564,854	162,499,616
Total	1,592,518,753	1,592,518,753	1,339,946,450	1,127,687,125	1,474,973,680	1,357,998,914	1,335,178,669	2,049,418,787

*a 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.

The overall $235 million difference between the 2016-17 Planned spending of $1,593 million and Actual spending of $1,358 million is attributed to a $118 million reduction in authorities and $117 million in unspent funding.
The $118 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 from the time of forecasts which were done in the fall of 2015; and
• A transfer to Innovation, Science and Economic Development Canada related to the Sustainable Development Technology Fund.

Increases due to:

• Funding received through Supplementary Estimates mainly for Clean Growth and Climate Change, Federal Infrastructure Initiative (FII), Green Infrastructure, Soldier Settlement Board mineral rights, modernization of the National Energy Board, and marine protection program; and
• The receipt of the operating budget carry forward.

The $117 million in unspent funding is explained by the following:

• Funds frozen and not available for spending, as per Budget 2016, related to Professional Services, Advertising and Travel;
• Funding being moved into future years for Investments in Forest Industry Transformation, Oil Spill Response Science Program, UNCLOS, Gunnar Mine Remediation and Soldier Settlement Board;
• Unspent funds being carried forward to next year, mainly to cover unfunded collective bargaining increases and to support FII projects; and
• Unspent funds 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).

Although there are differences, both the preceding graph and table show that 2017-18 Planned spending is similar to 2016-17 Actual expenditures.

For 2017-18 to 2019-20, both the graph and table show lower planned spending than 2016-17 actual expenditures. This is the result of fluctuations in the economic modeling for the Atlantic Offshore Accounts and the scheduled ending, or sunsetting, of existing programs (i.e. Clean Growth and Climate Change, FII, Green Infrastructure, Investments in Forest Industry Transformation, Forest Innovation Program and Expanding Market Opportunities). However, as reflected in the graph, the Department anticipates that some of these programs will be renewed or replaced and spending levels will be more comparable to past years.

For 2014-15, 2015-16 and 2016-17 the figures represent actual expenditures as reported in the Public Accounts. NRCan’s spending profile shows a significant drop in 2015-16 and 2016-17 compared to 2014-15, mainly as a result of the Statutory Atlantic Offshore Accounts, the transfer of responsibility over the Nuclear Legacy Liabilities Program and the Port Hope Area Initiative to Atomic Energy of Canada Limited, and reduced spending pertaining to the ecoENERGY for Biofuels and the ecoENERGY for Renewable Power programs. These reductions were slightly offset by the implementation of the FII.

Actual human resources

Human resources summary for Programs and Internal Services
(full time equivalents)

Programs and Internal Services	2014–15 Actual	2015–16 Actual	2016–17 Forecast	2016–17 Actual	2017–18 Planned	2018–19 Planned
1.1 Market Access and Diversification	250	254	243	277	267	242
1.2 Innovation for New Products and Processes	296	313	296	328	289	255
1.3 Investments in Natural Resource Sectors	398	399	378	422	395	394
1.4 Statutory Programs – Atlantic Offshore*	0	0	0	0	0	0
2.1 Energy-Efficient Practices and Low-Carbon Energy Sources	278	264	101	265	252	162
2.2 Technology Innovation	635	665	516	653	646	539
2.3 Responsible Natural Resource Management	247	244	242	223	186	184
3.1 Protection for Canadians and Natural Resources	478	474	427	435	414	404
3.2 Landmass Information	385	383	408	387	386	378
Subtotal	2,967	2,996	2,611	2,990	2,835	2,558
Internal Services	946	940	936	906	922	882
Total	3,913	3,936	3,547	3,896	3,757	3,440

For 2014-15 and 2015-16, the figures represent actual FTEs as reported in their respective Departmental Results Reports. For 2016-17, the planned FTEs are as per the 2016-17 Departmental Plan and the 2016-17 actual FTEs reflect the actual FTEs for 2016-17.

For 2017-18 and 2018-19, the figures represent total planned FTEs to support NRCan program activities, approved by Treasury Board to support the Departmental strategic outcomes.

The decrease between 2016-17 and 2018-19 is mainly explained by the sunsetting of a number of major initiatives, which were explained in the Budgetary Performance Summary section.

As new initiatives are undertaken, plans for future FTE requirements will be adjusted accordingly.

Expenditures by vote

For information on the Department of Natural Resources Canada’s organizational voted and statutory expenditures, consult the Public Accounts of Canada 2017^xxxviii.

Alignment of spending with the whole-of-government framework

Alignment of 2016-17 actual spending with the whole-of-government framework^xxxix (dollars)

Program	Spending area	Government of Canada activity	2016–17 Actual spending
1.1 Market Access and Diversification	Economic Affairs	Strong Economic Growth	70,738,385
1.2 Innovation for New Products and Processes	Economic Affairs	Strong Economic Growth	97,761,228
1.3 Investment in Natural Resource Sectors	Economic Affairs	Strong Economic Growth	74,593,181
1.4 Statutory Programs – Atlantic Offshore	Economic Affairs	Strong Economic Growth	473,430,813
2.1 Energy-Efficient Practices and Low-Carbon Energy Sources	Economic Affairs	A Clean and Healthy Environment	177,431,795
2.2 Technology Innovation	Economic Affairs	A Clean and Healthy Environment	148,143,884
2.3 Responsible Natural Resource Management	Economic Affairs	A Clean and Healthy Environment	35,319,980
3.1 Protection for Canadians and Natural Resources	Social Affairs	A Safe and Secure Canada	79,879,094
3.2 Landmass Information	Social Affairs	A Safe and Secure Canada	74,793,210

 

Total spending by spending area (dollars)^a

Spending area	Total planned spending	Total actual spending
Economic affairs	1,275,099,593	1,077,419,266
Social affairs	132,901,405	154,672,304
International affairs	--	--
Government affairs	--	--

^a Spending (Planned and Actual) related to the Internal Services are not included in this table.

Financial statements and financial statements highlights

Financial statements

NRCan’s consolidated financial statements (unaudited) for the year ended March 31, 2017, are available on the Departmental website^xl.

Financial statements — highlights

The consolidated financial statements are intended to provide a general overview of the Department’s financial position and operations and should be read in conjunction with NRCan’s consolidated financial statements. 

The consolidated financial statements were prepared using the Government’s accounting policies which are based on Canadian public sector accounting standards and are therefore different from reporting on the use of authorities in other sections. Reconciliation between authorities used and the net cost of operations is set out in Note 3 of the Department’s consolidated financial statements.

Condensed Consolidated Statement of Operations (unaudited) for the year ending March 31, 2017 (dollars)

Financial information	2016–17 Planned resultsa	2016–17 Actual	2015–16 Actual	Difference (2016–17 actual minus 2016–17 planned)	Difference (2016–17 actual minus 2015–16 actual)
Total expensesb	1,637,636,823	1,349,957,088	1,368,087,269	(287,679,735)	(18,130,181)
Total revenues	38,870,446	29,410,248	30,836,347	(9,460,198)	(1,426,099)
Net cost of operations before Government funding and transfers	1,598,766,377	1,320,546,840	1,337,250,922	(278,219,537)	(16,704,082)

^a The 2016-17 Planned Results are derived from the amounts presented in the 2016-17 Consolidated Future-Oriented Statement of Operations^xli and included in NRCan’s 2016-17 Departmental Plan^xxxvii.
^b Transferred operations are included in the 2015-16 total actual expenses, which comprise of $1,243,617,036 in total expense and $124,470,233 in net cost of transferred operations, as it relates to the transferred responsibilities of the Nuclear Legacy Liabilities Program and the Historic Waste Program to Atomic Energy of Canada Limited (AECL), which became effective on September 13, 2015.

Difference between 2016-17 Actual and Planned

For 2016-17, the difference in total actual expenses ($1,350 million) and planned results ($1,638 million) is $288 million, or 18% of overestimated expenses. This is mostly attributable to a $270 million decrease in Atlantic Offshore Statutory programs mainly due to lower offshore royalties than forecasted for the Newfoundland Offshore Petroleum Resource Revenue Fund (largely due to decreased oil prices), which resulted in lower transfer payments to other levels of government.

Difference between 2016-17 and 2015-16 Actuals

Total actual expenses were $1,350 million in 2016-17 compared to $1,368 million in 2015-16 for a net decrease of $18 million, or 1%. This net decrease is mainly explained by:

 

• A $141 million increase in Atlantic Offshore Statutory programs mainly due to an increase in oil production levels compared to 2015-16 actual spending therefore increasing transfer payments to other levels of government; offset by
• A $124 million decrease in total expenses for transferred operations from $124 million in 2015-16 to nil in 2016-17 due to the transfer of responsibilities from the Nuclear Legacy Liabilities Program and the Historic Waste Program to the AECL as of September 2015.

The chart presenting NRCan’s actual expenses by type for 2016-17 is available on the Departmental website.

Condensed Consolidated Statement of Financial Position (unaudited) as at March 31, 2017 (dollars)

Financial Information	2016–17	2015–16	Difference (2016–17 minus 2015–16)
Total net liabilities	405,786,013	432,291,969	(26,505,956)
Total net financial assets	244,655,407	257,773,468	(13,118,061)
Departmental net debt	161,130,606	174,518,501	(13,387,895)
Total non-financial assets	334,766,837	272,387,642	62,379,195
Departmental net financial position	173,636,231	97,869,141	75,767,090

Total net liabilities were $406 million in 2016-17, compared to $432 million in 2015-16, for a net decrease of $26 million or 6%. This variance is mainly attributable to a decrease of $29 million in accounts payable and accrued liabilities due to a $13.1 million decrease related to a payment to settle the Soldier Settlement Board mineral rights and a $12 million decrease in holdbacks under various contribution programs. 

Total net financial assets were $245 million in 2016-17, compared to $258 million in 2015-16, for a net decrease of $13 million or 5%. This variance is attributable to the decrease in the Due from Consolidated Revenue Fund (CRF) of $14 million, which is related to the decrease in accounts payable 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 $334 million in 2016-17, compared to $272 million in 2015-16 for a net increase of $62 million.  This variance is mainly due to the increase in tangible capital assets due to betterments to buildings across Canada under the Federal Infrastructure Initiative.

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