ISSN: 2819-0270
On this page
- Introduction
- CFIA mandate
- Highlights of fiscal quarter and fiscal year-to-date
- Risks and uncertainties
- Significant changes in relation to operations, personnel and programs
- Annex A – Statement of authorities (unaudited)
- Annex B – Departmental budgetary expenditures by standard object (unaudited)
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 2023 to 2024 Main Estimates, the 2023 to 2024 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 2023 to 2024 Departmental Plan.
This quarterly report has not been subject to an external audit or review.
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.
The CFIA's legislative mandate is enabled by the Canadian Food Inspection Agency Act, which also enables the agency to administer and enforce other federal statutes, regulations, and the Fees Notice. These statutes and regulations regulate the safety and quality of food sold in Canada and support a sustainable animal and plant resource base. The CFIA shares many of its core responsibilities with other federal departments and agencies, with provincial, territorial and municipal authorities, with private industry, and with other stakeholders.
The CFIA works with its partners to implement food safety measures; manage food, animal and plant risks, incidents and emergencies; and promote the development of food safety and disease control systems to maintain the safety of Canada's high-quality agriculture, agri-food, aquaculture and fishery products. The agency's activities include verifying the compliance of imported products; registering and inspecting establishments; testing food, animals, plants and their related products; and, approving the use of many agricultural inputs.
Additionally, the agency actively participates in international fora for the development of international science-based rules, standards, guidelines and policies. It also participates in the management of sanitary and phytosanitary committees, established under international agreements, and actively promotes the Canadian science-based regulatory system among foreign trading partners. The CFIA negotiates to resolve scientific and technical issues, contributing to market access for Canadian goods. It also provides scientific advice, develops new technologies, provides testing services, and conducts regulatory research.
At the CFIA, decisions are based on high-quality, timely and relevant science. Science informs policy development, and program design and delivery through foresight, advice, risk assessment, the influence of international standards, research and development, and testing.
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 2023 to 2024 Main Estimates, the 2023 to 2024 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 2023 to 2024 fiscal year in June 2023.
When Parliament is dissolved for the purpose of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.
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.
Highlights of fiscal quarter and fiscal year-to-date
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 of these criteria are met, further analysis is always provided. Further analysis is also provided when the dollar value is deemed significant.
Significant changes in the Statement of authorities (Annex A)
Authorities available for use
At the end of the second quarter, September 30, 2023 (Q2), the CFIA had $881.5 million of authorities available for use, as detailed in Table 1. This represents an overall increase of $17.1 million (2.0%) compared to the end of the same quarter in 2022 to 2023. Below is a breakdown of the variance.
| Authorities | 2023 to 2024 | 2022 to 2023 | Variances | % |
|---|---|---|---|---|
| Vote 1 - Operating expenditures, grants, and contributions | 673,899 | 664,490 | 9,409 | 1.4 |
| Vote 5 - Capital expenditures | 54,080 | 50,146 | 3,934 | 7.8 |
| Budgetary statutory authorities | ||||
| Employee benefit plans | 88,005 | 84,278 | 3,727 | 4.4 |
| Compensation payments | 12,500 | 12,500 | 0 | 0.0 |
| Spending of revenues / Other | 53,000 | 53,000 | 0 | 0.0 |
| Total authorities | 881,484 | 864,414 | 17,070 | 2.0 |
Numbers may not add due to rounding.
Compared to the end of the same quarter in 2022 to 2023, the Vote 1 – Operating expenditures, grants, and contribution authorities available for use increased by $9.4 million (1.4%) mainly due to the receipt of funding for building a post pandemic agile workforce and to support long-term digital transformation ($18.4 million), funding for preparedness, prevention and trade continuity in response to African swine fever ($7.0 million), funding to address the current potato wart crisis in Prince Edward Island ($4.8 million), and funding for pet trade ($3.5 million). The increase in funding is partially offset by the sunsetting of funding related to improving food safety (IFS) (-$12.0 million), the Sustainable Canadian Agricultural Partnership framework (-$6.2 million), and securing market access (SMA) (-$5.8 million).
The Vote 5 – Capital expenditures authorities available for use increased mainly due to the re-profile of funding for the Sidney Centre for Plant Health for $5.0 million, which was offset by less capital carry-forward from the previous fiscal year.
The agency expects to receive additional funding via the subsequent Supplementary Estimates during the fiscal year.
Year-to-date expenditures
At the end of the second quarter for the 2023 to 2024 fiscal year, the CFIA had expenditures of $463.9 million as outlined in Table 2. This represents an overall increase of $0.8 million (0.2%) compared to the end of the same quarter for the 2022 to 2023 fiscal year. Below is a breakdown of the variance.
| Expenditures | 2023 to 2024 | 2022 to 2023 | Variances | % |
|---|---|---|---|---|
| Vote 1 - Operating expenditures, grants, and contributions | 327,488 | 330,998 | -3,510 | -1.1 |
| Vote 5 - Capital expenditures | 16,129 | 10,870 | 5,259 | 48.4 |
| Budgetary statutory authorities | ||||
| Employee benefit plans | 42,610 | 42,139 | 471 | 1.1 |
| Compensation payments | 55,615 | 54,092 | 1,523 | 2.8 |
| Spending of revenues / Other | 22,008 | 24,915 | -2,907 | -11.7 |
| Total authorities | 463,850 | 463,014 | 836 | 0.2 |
Numbers may not add due to rounding.
Compared to the same quarter in the previous year, the overall expenditures have remained fairly stable. The 2023 to 2024 Q2 operating expenditures (Vote 1) decreased by $3.5 million (-1.1%) mainly due to decrease in operating costs associated with the highly pathogenic avian influenza (HPAI) and potato wart outbreaks. Elevated spending of $5.3 million (48.4%) in capital expenditures (Vote 5) is due to increased expenditures for the Sidney Centre for Plant Health, and the timing of payments for investment plan projects. The decrease in the spending of revenues is largely due to the timing of payments.
Significant changes in the departmental budgetary expenditures by standard object (Annex B)
Planned expenditures (equivalent to authorities) by standard object
Compared to the same quarter in 2022 to 2023, the $17.1 million increase in authorities is mainly due to increased funding for a number of initiatives as mentioned above.
The increase in authorities more significantly affected the following standard objects:
- Personnel - $13.4 million (2.0%). The increase is mainly due to the receipt of funding for building a post pandemic agile workforce and to support long-term digital transformation
- Acquisition of machinery and equipment - $3.4 million (12.2%)
- Utilities, materials and supplies - $1.6 million (9.7%)
Theses increases are offset by a decrease in transportation and communications of $2.1 million (-22.1%).
Expended during the quarter ended September 30, 2023 and year-to-date expenditures by standard object
Compared to the same quarter in 2022 to 2023, the $6.8 million decrease in expenditures is mainly caused by the following:
- -$3.9 million (-10.4%) in transfer payments mainly due to the timing of payments for HPAI and potato wart
- -$3.3 million (-1.9%) in personnel due to a decreased personnel overtime costs associated with HPAI
- -$1.9 million (-78.2%) in other subsidies and payments
- -$1.5 million (-74.3%) in information services
- -$1.0 million (-27.0%) in transportation and communications
These decreases have been partially offset by the increase in professional services ($4.0 million) and acquisition of machinery and equipment ($1.6 million) mainly due to increased expenditures for the construction of the Sidney Centre for Plant Health.
Risks and uncertainties
This quarterly financial report reflects the results of the current fiscal period in relation to the Main Estimates for 2023 to 2024, the 2023 to 2024 Supplementary Estimates and authorities received from Treasury Board central votes. The agency anticipates receiving further funding in the 2023 to 2024 fiscal year via Supplementary Estimates and Treasury Board Central Votes. In addition to managing the delivery of the agency's programs based on anticipated total spending authorities, the agency faces other financial and non-financial risks and uncertainties. Through science, innovation and evidence-based decision-making, the agency has a solid foundation to continue responding to challenges of the modern world, including a global food supply chain, climate change and emerging diseases.
Post-COVID-19 and emergencies
The CFIA overcame several challenges in the 2022 to 2023 fiscal year while supporting and ensuring the delivery of critical work and services during the COVID-19 pandemic, maintaining the continuity of the food supply chain affected by the war in Ukraine, and facing climate change related emergencies. Extreme weather events such as Hurricane Fiona in the Atlantic provinces, a derecho in Québec and Ontario, floods in Manitoba, record-breaking heat and drought in the West, and wildfires across much of the country were added challenges where the agency had to quickly pivot to modified service delivery models to avoid interruptions or delays of its critical work to support the agri-food industry in Canada. The agency mobilized resources to ensure CFIA inspectors, scientists and veterinarians were on the front-lines, while also adapting through innovation and digitization (for example, virtual inspections, developing import certification and tracking applications).
To further assist in the mitigation of the pandemic, the CFIA activated its business continuity plan in order to prioritize critically important services during the COVID-19 pandemic. These early measures allowed the CFIA to continue to deliver critical services that preserve the integrity of Canada's Food Safety System while safeguarding its animal and plant resource base.
As the CFIA begins to transition to the post COVID-19 environment, critical services for Canadians continue to be monitored and prioritized in order to ensure the safety of its employees and to carry on the delivery of frontline services that safeguard Canada's food system, along with the plant and animal resources on which Canadians depend.
The CFIA operates in an uncertain environment, and in addition to the day-to-day work of CFIA employees, is prepared to respond to new or emerging threats and market pressures resulting from events such as the COVID-19 pandemic, HPAI, potato wart and other high-profile issues.
Through inspections and detection efforts, the CFIA has worked with stakeholders to protect Prince Edward Island's (PEI) high-quality potatoes for Canadians and international trade by preventing, minimizing, and controlling the introduction and spread of potato wart in PEI farms. Although potato wart is not a food safety risk, this pest may result in financial losses for potato farmers, affect exports, and lead to uncertainty in the domestic market. In Budget 2022, the Government of Canada allocated $12 million in funding over 2 years, starting in the 2022 to 2023 fiscal year, to support the CFIA's continued response to potato wart in PEI. With these funds, the CFIA hired additional staff to meet the established target of collecting and analyzing over 35,000 soil samples by March 31, 2023. The agency successfully re-established exports of PEI potatoes to the United States and has continued to engage with international and domestic stakeholders to seek feedback on its Potato Wart Domestic Long Term Management Plan.
The CFIA also continues the response to cases of the HPAI in Canada. HPAI, also called "bird flu", is a viral infection that spreads easily and quickly among birds. Parts of North America, Europe, Asia and Africa are currently seeing bird flu outbreaks. Since HPAI was first detected in Canada in December 2021, 9 provinces have reported cases in domestic poultry flocks, affecting over 7.3 million birds. It directly threatens the Canadian poultry and egg industry, contributing $5.5 billion to the gross domestic product in 2021. The CFIA continues to conduct HPAI surveillance activities to monitor for the disease in domestic and wild bird populations. In the 2022 to 2023 fiscal year, the CFIA launched the HPAI in Wildlife Dashboard. This interactive tool supports the outbreak response and helps Canada uphold international obligations for notification of new findings of HPAI.
As the lead authority for safeguarding the food supply in Canada and for monitoring, controlling and eradicating animal and plant diseases, 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 access to export markets.
The agency has established a dedicated emergency reserve in order 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. While the CFIA is confident that its emergency reserve is generally sufficient to cover the incremental costs related to emergency management on a yearly basis, it is recognized that the exceptional circumstances may drive costs above the funding set aside. The agency will continue to monitor, reallocate resources where possible and seek additional funding through engagement with central agencies.
Sunsetting resources renewal
In 2023 to 2024, funding for Daily Shift Inspection Presence (DSIP) in federally registered meat processing establishments has been renewed and received through Supplementary Estimates A. Funding for IFS and SMA is expected to be received through subsequent Supplementary Estimates. The funding for protecting against bovine spongiform encephalopathy (BSE) will sunset in 2023 to 2024.
The Sidney Centre for Plant Health
As part of the Government's commitment to establishing and maintaining modern federal science infrastructure, Budget 2017 provided $80 million to upgrade the Centre for Plant Health (CPH), located near Sidney, British Columbia. An upgraded, world class plant health research facility will further enhance the safety of Canada's agriculture and agri-food sector, while facilitating the trade and economic growth that benefits all Canadians.
Laboratories Canada and the CFIA continue the advancement of the detailed design of the facility, including network connectivity. The construction of the entire facility is projected to be completed by fall 2024.
The agency has spent a total of $27.7 million on the Sidney Centre for Plant Health as of the end of Q2 2023 to 2024, including $6.1 million in Q2 of 2023 to 2024.
Program risk
The CFIA is responsible for identifying and managing risks to the food supply and the animal and plant resource base which contribute to and are crucial for food safety and a prosperous economy. Across the agency, integrated risk management is an integral part of policy, program design, priority setting, planning, delivery, review and reporting activities.
Integrated risk management is at the core of the CFIA's modernization initiatives. The agency operates in a dynamic and complex risk environment that continues to change rapidly. The sectors that the CFIA regulates are constantly changing their business models and technologies; industry is always developing new and innovative products, and new pathways for risk are emerging.
The CFIA continues to improve its capabilities to manage risk and use resources more effectively by experimenting with new risk intelligence tools. The agency integrates risk information in its planning and operations in order to reduce risk in delivering its mandate and to improve how it mobilizes resources in response to new threats.
The CFIA will continue pursuing a One Health approach to address the complex challenges that can arise at the intersection of human, animal, plant, and environmental health, such as antimicrobial resistance (AMR), HPAI, chronic wasting disease, and other risks exacerbated by climate change. The agency will continue to seek out and share intelligence with numerous domestic and international experts to develop an integrated approach to these and other global issues and diseases. Information on key risks and response strategies are outlined in the CFIA's 2023 to 2024 Departmental Plan.
Significant changes in relation to operations, personnel and programs
Regulatory framework
The CFIA is committed to strengthening Canada's world-class food safety system. On January 15, 2019, the Safe Food for Canadians Regulations (SFCR) came into force. The SFCR improves and strengthens Canada's food safety system, enables industry to innovate, and creates greater market access opportunities for Canadian food products exported abroad.
The SFCR reduces unnecessary administrative burden on businesses by replacing 14 sets of existing regulations with one, and helps maintain and grow market access for Canada's agri-food and agricultural sector. The SFCR is the result of careful, informed policy development supported by extensive consultations with CFIA staff and Canadians across the country. The regulations make our food system even safer by focusing on prevention and allowing for faster removal of unsafe food from the marketplace.
The CFIA is conducting a multi-year structured and comprehensive review of its regulatory frameworks. Regulations that are outcome-based, transparent, and consider industry practices will provide a strong foundation for the delivery of results. The CFIA will advance a number of regulatory proposals in the 2023 to 2024 fiscal year, including priority proposals related to livestock identification and traceability, food compositional standards, cross-border transport biosecurity, and livestock feed.
Personnel
In September 2023, Dr. David Nanang was appointed Vice-President of Science Branch, and Robert Ianiro was appointed the Vice-President of Programs and Policy Branch.
Approved by:
Dr. Harpreet S. Kochhar
President, CFIA
Ottawa (Ontario)
Date: November 29, 2023
Stanley Xu, CPA, CGA
Vice-President, Corporate Management Branch and Chief Financial Officer, CFIA
Ottawa (Ontario)
Date: November 29, 2023
Annex A – Statement of authorities (unaudited)
| - | Fiscal year 2023 to 2024 | Fiscal year 2022 to 2023 | ||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2024Footnote 1 | Used during the quarter ended September 30, 2023 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2023Footnote 1 | Used during the quarter ended September 30, 2022 | Year to date used at quarter-end | |
| Vote 1 - Operating expenditures, grants, and contributions | 673,899 | 165,525 | 327,488 | 664,490 | 169,976 | 330,998 |
| Vote 5 - Capital expenditures | 54,080 | 12,161 | 16,129 | 50,146 | 8,264 | 10,870 |
| Budgetary statutory authorities | ||||||
| Employee benefit plans | 88,005 | 21,305 | 42,610 | 84,278 | 21,069 | 42,139 |
| Compensation payments | 12,500 | 32,926 | 55,615 | 12,500 | 37,132 | 54,092 |
| Spending of revenues | 53,000 | 11,020 | 21,863 | 53,000 | 13,323 | 24,839 |
| Refunds of previous years revenue | 0 | 6 | 128 | 0 | 3 | 75 |
| Collection agency fees | 0 | 0 | 0 | 0 | 0 | 0 |
| Spending of proceeds from the disposal of surplus Crown assets | 0 | 15 | 17 | 0 | 0 | 1 |
| Total budgetary authority | 881,484 | 242,958 | 463,850 | 864,414 | 249,767 | 463,014 |
Numbers may not add due to rounding.
Annex B – Departmental budgetary expenditures by standard object (unaudited)
| - | Fiscal year 2023 to 2024 | Fiscal year 2022 to 2023 | ||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2024Footnote 1 | Used during the quarter ended September 30, 2023 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2023Footnote 1 | Used during the quarter ended September 30, 2022 | Year to date used at quarter-end | |
| Expenditures: | ||||||
| Personnel | 679,312 | 172,597 | 344,605 | 665,910 | 175,945 | 343,932 |
| Transportation and communications | 7,413 | 2,803 | 5,238 | 9,519 | 3,840 | 7,305 |
| Information | 7,095 | 521 | 699 | 6,514 | 2,027 | 2,458 |
| Professional and special services | 92,816 | 20,280 | 36,374 | 92,502 | 16,298 | 31,466 |
| Rentals | 17,103 | 1,020 | 1,762 | 16,977 | 1,542 | 2,080 |
| Repair and maintenance | 11,972 | 2,480 | 3,768 | 12,029 | 2,449 | 3,554 |
| Utilities, materials and supplies | 18,147 | 4,901 | 8,064 | 16,548 | 5,130 | 9,397 |
| Acquisition of land, buildings and works | 0 | 0 | 0 | 0 | 0 | 0 |
| Acquisition of machinery and equipment | 31,509 | 4,549 | 6,454 | 28,084 | 2,969 | 5,245 |
| Transfer payments | 13,500 | 33,276 | 55,965 | 13,714 | 37,132 | 54,092 |
| Other subsidies and payments | 2,617 | 531 | 921 | 2,617 | 2,435 | 3,485 |
| Total gross budgetary expenditures | 881,484 | 242,958 | 463,850 | 864,414 | 249,767 | 463,014 |
Numbers may not add due to rounding.