Canadian Food Inspection Agency - Quarterly Financial Report for the quarter ended June 30, 2024

ISSN: 2819-0270

On this page

• 1. Introduction
  • 1.1 CFIA mandate
  • 1.2 Basis of presentation
• 2. Highlights of fiscal quarter and fiscal year-to-date (YTD) result
  • 2.1 Significant changes to budgetary authorities
  • 2.2 Significant changes in Year-to-date expenditures
• 3. Risks and uncertainties
• 4. Significant changes in relation to operations, personnel and programs
• Annex A – Statement of authorities (unaudited)
• Annex B – Departmental budgetary expenditures by standard object (unaudited)

1. Introduction

This quarterly 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 2024 to 2025 Main Estimates, the 2024 to 2025 Supplementary Estimates and authorities received from Treasury Board central votes. Main and Supplementary Estimates documents can be found on the Government of Canada's Planned government spending webpage.

A summary description of the program activities of the CFIA can be found in the CFIA's 2024 to 2025 Departmental Plan.

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

1.1 CFIA mandate

The Minister of Health is responsible for the CFIA and for the overall direction of the Agency. In addition, the Minister of Agriculture and Agri-Food is responsible for oversight of the Agency's non-food safety agricultural activities, including economic and trade issues, as well as important animal health and plant protection work.

The CFIA is headed by a President, who has the rank and all the powers of a Deputy Head of a Department. The President is also the Chief Executive Officer. The responsibilities of these roles are outlined in the Canadian Food Inspection Agency Act 1997, c.6.

Mitigating risks to food safety is the CFIA's highest priority, and the health and safety of Canadians is the driving force behind the design and development of CFIA programs. The CFIA, in collaboration and partnership with industry, consumers, and federal, provincial and municipal organizations, continues to work towards protecting Canadians from preventable health risks related to food and zoonotic diseases.

In collaboration with its partners in Canada and abroad, the CFIA is applying a One Health approach to many issues encompassed by its mandate. The One Health approach recognizes the interconnectedness of the health of humans, animals, plants, and the environment and that efforts to address serious global health issues benefit from strong coordination and collaboration between professionals in these fields. The one Health approach also benefits from shared resources and investments.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities (Annex A) includes the Agency's spending authorities granted by Parliament and those used by the Agency, consistent with the interim supplies granted for the 2024 to 2025 Main Estimates, the 2024 to 2025 Supplementary Estimates and authorities received from Treasury Board central votes. 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 funding can be spent by the Government. Approvals are given through annual appropriation acts or legislation which provides statutory spending authority for specific purposes. The CFIA was granted its full supply for the 2024 to 2025 fiscal year in June 2024.

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

2. Highlights of fiscal quarter and fiscal year-to-date (YTD) result

In line with previously reported variances in the Departmental Results Report and Quarterly Financial Reports, the CFIA determined that variances which are greater than $5 million and represent more than a 10% change, in budget or expenditures from one year to the next, are deemed significant. When both criteria are met, further analysis is always provided. Further analysis is also provided when the dollar value is deemed significant.

The following graph provides a comparison of total budgetary authorities available for spending and year-to-date expenditures for the first quarter of the current and previous fiscal years.

Graph 1: Comparison of total budgetary authorities and expenditures for the quarter ended June 30 of fiscal years 2024 to 2025 and 2023 to 2024

Comparison of Net Budgetary Authorities and Expenditures for the Quarter Ended June 30 of FY2024 to 2025 and 2023 to 2024 (in thousands of dollars)

Quarter ended June 30	2024 to 2025	2023 to 2024
Total Budgetary Authorities	856,277	857,295
Expenditures for the Quarter Ended June 30	218,629	220,892

2.1 Significant changes to budgetary authorities

At the end of the first quarter, June 30, 2024 (Q1), the CFIA had $856.3 million of authorities available for spending, as detailed in Table 1. This represents an overall decrease of $1.4 (-0.2%) compared to the end of the same quarter in 2023 to 2024. Below is a breakdown of the variance.

Numbers may not add due to rounding.

The Vote 1 - Operating expenditures and grant and contributions authorities increased by $15.1 million (2.3%) attributed to the net effect of the following items:

• An increase of $32.5 million attributed to Collective Bargaining Agreements settlement
• An increase of $11.9 million in funding to maintain and further strengthen food safety measures
• An increase of $11.2 million to establish a foot-and-mouth disease (FMD) vaccine bank for Canada and to develop FMD response plans
• An increase of $10.1 million to deliver initiatives related to Securing Market Access (SMA)

These increases have been partially offset by:

• The reduction of $30 million for the sunsetting of funding to maintain programming which mitigates the public health, animal health and economic risk related to Bovine Spongiform Encephalopathy (BSE). The renewal of BSE funding was announced in B2024. The funding will be allocated to the Agency once the Treasury Board submission is approved
• A decrease of $11.2 million for the refocusing Government spending
• A decrease of 4.8 million for the sunsetting of Potato Wart funding. The renewal of the Potato Wart funding was announced in B2024. The funding will be allocated to the Agency once the Treasury Board submission is approved
• A decrease of $4.3 million due to the year-to- year variance of Covid Pivot funding

The Vote 5 – Capital expenditures authorities available for spending total decreased by $9.6 million mainly due to the year to year variance of funding to build the new Sidney Centre for Plant Health (-$9.6 million). The Agency is implementing a real property strategy, in collaboration with partners, to plan upgrades, seek funding and sustain the facility operations for the current and future program needs.

Employee Benefit Plan (EBP) – total $6.9 million decrease in EBP is mainly due to the variation of EBP rate set by TBS. The rate has reduced from 15.2% to 13.8% for fiscal year 2024-25.

The fluctuations in authorities available for spending are most notable in the following standard objects (see Annex B for the full listing of budgetary authorities by standard object):

• Professional and special services: a decrease of $19.1 million (-21.6%) are mainly due to the year to year variance of funding for Sidney Center for Plant Health, sunsetting of funding for BSE, and for the reductions related to Refocusing Government Spending
• Personnel: an increase of $9.6 million (1.4%) mainly due to funding for salary increase as per Collective Bargaining Agreements settlement, which was offset by sunsetting of funding for BSE and reduction related to Refocusing Government Spending
• Utilities, materials and supplies: an increasing of $8.6 million ($47.4%) are mainly due to the funding for FMD vaccine bank
• Information: an increase of $5.1 million ($84%) is mainly due to activities related to SMA
• Transportation and communications: a decrease of $4.5 million (-49%) are mainly caused by the sunsetting of funding for BSE, and reductions related to Refocusing Government Spending

The Agency expects to receive additional funding via the subsequent Supplementary Estimates during the fiscal year.

2.2 Significant changes in year-to-date expenditures

At the end of the first quarter for the 2024 to 2025 fiscal year, the CFIA had expenditures of $218.6 million as outlined in Table 2. This represents an overall decrease of $2.3 million (-1%) compared to the end of the same quarter for the 2023 to 2024 fiscal year. Below is a breakdown of the variance.

Numbers may not add due to rounding.

Compared to the same quarter in the previous year, the Q1 operating expenditures (Vote 1) increased by $2.2 million (1.4%) mainly due to:

• Increased personnel costs associated with collective bargaining agreement settlements

Decreased spending of $1.3 million (-31.7%) in capital expenditures (Vote 5) is mainly due to the timing of payments for investment plan projects.

Compensation payments in Q1 decreased by $3 million (-13%) compared to the end of the same quarter in 2023 to 2024 mainly due to the less payments for highly pathogenic avian influenza (HPAI, -$4.8 million). This was offset by payments for chronic wasting disease and potato wart which increased by $1.1 million and $0.8 million respectively in comparison to Q1 in 2023 to 2024. Since compensation payments are statutory in nature, the Agency is within its authority to incur expenditures as required. These authorities will be adjusted at year-end to the equivalent of all expenditures related to compensation payments.

Compared to the same quarter in 2023 to 2024, the fluctuation in expenditures is mainly caused by the following Standard Object (see Annex B for the full listing of budgetary expenditures by standard object):

• Personnel: $5.9 million (3.4%) increases are mainly due to the settlement for the collective bargaining agreements
• Professional and Special Services: decrease of $3.1 million (-19.4%) in professional and special services are mainly due to decreased payments associated with HPAI

3. Risks and uncertainties

The agency operates in a dynamic and complex risk environment impacted by shifts in the global trading environment, climate change, and the need to manage multiple concurrent emergencies. The sectors that the CFIA regulates are also changing dynamic, as their business models and technologies change, and new and innovative products are developed.

In addition to the day-to-day work of CFIA employees safeguarding food, plants and animals, and facilitating trade, the CFIA continues to actively address highly pathogenic avian influenza (HPAI) outbreaks while preparing for the potential arrival of other diseases such as African swine fever (ASF), foot-and-mouth disease, and high-profile food safety recalls. The CFIA also supports the Government of Canada's priorities, such as taking a One Health approach on issues like antimicrobial resistance, zoonotic illness, detection of new plant pests, such as oak wilt, and climate change.

The delivery of the CFIA's core responsibility enhances the health and well-being of Canada's people, environment, and economy. These actions, alongside an ongoing modernization of the regulatory framework, help maintain prosperity for Canadians and support good governance for Canada, by preserving the health of Canada's plant and animal resource base in the face of serious threats.

As the lead authority for safeguarding Canada's food system and the plant and animal resources on which we depend and supporting the Canadian economy through the trade of Canadian goods, the agency must respond with prompt action above and beyond normal business activities when these temporary situations arise in order to safeguard Canadians and maintain or gain access to export markets.

The CFIA works to proactively identify and manage hazards that threaten the health of Canada's people, animals, plants, and the vitality of key Canadian industries. Using surveillance and various scientific methods, including sampling, laboratory testing, and modelling, the CFIA assesses potential risks to help target its resources to the areas where they can deliver the greatest benefit. This information also enables the CFIA to respond more efficiently when serious risks are detected. The agency has established a dedicated emergency reserve to manage the incremental response costs associated with emergencies. This is reviewed every year as part of the agency's planning process and is subject to ongoing monitoring.

4. Significant changes in relation to operations, personnel and programs

There have been no other significant changes in relation to operations, personnel and programs during this quarter.

Approved by:

Annex A - Statement of authorities (unaudited)

Numbers may not add due to rounding.

Annex B - Departmental budgetary expenditures by standard object (unaudited)

Numbers may not add due to rounding.