Canadian Food Inspection Agency - Quarterly Financial Report for the quarter ended December 31, 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 Canadian Food Inspection Agency (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 $5.0 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 third quarter of the current and previous fiscal years.

Graph 1. Comparison of total budgetary authorities and expenditures for the quarter ended December 31 for fiscal years 2024 to 2025 and 2023 to 2024 (in thousands of dollars)

Graph 1. Comparison of total budgetary authorities and expenditures for the quarter ended December 31 for fiscal years 2024 to 2025 and 2023 to 2024 (in thousands of dollars) – Text version

Quarter ended December 31	2024 to 2025	2023 to 2024
Total Budgetary Authorities	899,945	929,877
Expenditures for the quarter ended December 31	702,519	716,527

2.1 Significant changes to budgetary authorities

At the end of the third quarter, December 31, 2024 (Q3), the CFIA had $899.9 million of authorities available for spending, as detailed in Table 1. This represents an overall decrease of $29.9 million (-3.2%) 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 5 – Capital expenditures authorities available for spending decreased by $18.5 million (-28.8%) mainly due to the year-over-year variance in funding to build the new Sidney Centre for Plant Health. 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 $9.3 million decrease (-10.1) in EBP is mainly due to the variation in the EBP rate set by the Treasury Board Secretariat. The rate has decreased from 15.2% for the 2023 to 2024 fiscal year to 13.8% for the 2024 to 2025 fiscal year.

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):

• personnel: a decrease of $14.9 million (-2.1%) are mainly due to the sunsetting of funding for Bovine Spongiform Encephalopathy (BSE), Covid Pivot and E-Certification
  • The renewal of BSE funding was announced in B2024
• professional and special services: a decrease of $14.3 million (-14.0%) is mainly due to the year-over-year variance in funding for the new Sidney Center for Plant Health, the sunsetting of funding for Bovine Spongiform Encephalopathy, and reductions related to Refocusing Government Spending
• acquisition of machinery and equipment: a decrease of $10.5 million (-25.1%) is mainly due to the year-over-year variance in funding for the new Sidney Center for Plant Health
• utilities, materials and supplies: an increase of $8.0 million (40.9%) is mainly due to funding for the Foot-and-Mouth Disease (FMD) vaccine bank
• information: an increase of $4.9 million (64.5%) is mainly due to activities related to Securing Market Access

2.2 Significant changes in year-to-date expenditures

At the end of the third quarter for the 2024 to 2025 fiscal year, the CFIA had expenditures of $702.5 million as outlined in Table 2. This represents an overall decrease of $14.0 million (-2.0%) 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.

Compensation payments in Q3 decreased by $37.6 million (-45.7%) compared to the end of the same quarter in 2023 to 2024 mainly due to fewer payments for highly pathogenic avian influenza (HPAI, -$38.3 million). This was offset by payments for chronic wasting disease and potato wart which each increased by $0.4 million as compared to Q3 in the 2023 to 2024 fiscal year. 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.

Spending of revenues increased by $22.7 million (57.8%) mainly due to expenditures incurred for the new Sidney Centre for Plant Health.

Compared to the same quarter in 2023 to 2024, the fluctuations in expenditures are most notable in the following standard objects (see Annex B for the full listing of budgetary expenditures by standard object):

• transfer payments: decrease of $37.4 million (-45.3%) is largely due to reduced payments for HPAI
• personnel: increase of $16.0 million ($3.1%) mainly due to the settlement for the collective bargaining agreements
• professional and special services: increase of $12.5 million (18.3%) is mainly related to expenditures incurred for the new Sidney Centre for Plant Health

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 evolving in a dynamic environment, 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 HPAI outbreaks while preparing for the potential arrival of other diseases such as African swine fever (ASF), FMD, 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.

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.