Quarterly Financial Report for the quarter ended September 30, 2020
Management Statement for the Quarter Ending September 30, 2020
This quarterly financial 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 under the Treasury Board Directive on Accounting Standards: GC 4400 Departmental Quarterly Financial Report. It should be read in conjunction with the Main Estimates and Supplementary Estimates for the current year.
The quarterly report has not been subject to an external audit or review.
1.1 Canadian Transportation Agency Mandate
The Canadian Transportation Agency (CTA) is an independent, quasi-judicial tribunal and regulator that has, with respect to all matters necessary for the exercise of its jurisdiction, all the powers of a superior court. The CTA has three mandates:
- It helps ensure that the national transportation system runs efficiently and smoothly in the interests of all Canadians: those who work and invest in it; the producers, shippers, travelers and businesses who rely on it; and the communities where it operates.
- It protects the human right of persons with disabilities to an accessible transportation network.
- It provides consumer protection for air passengers.
To help advance these mandates, the CTA has three tools at its disposal:
- Rule-making: It develops and enforces ground rules that establish the rights and responsibilities of transportation service providers and users and that level the playing field among competitors. These rules can take the form of binding regulations or less formal guidelines, codes of practice or interpretation notes.
- Dispute resolution: It resolves disputes that arise between transportation providers on the one hand, and their clients and neighbours on the other, using a range of tools from facilitation and mediation to arbitration and adjudication.
- Information provision: It provides information on the transportation system, the rights and responsibilities of transportation providers and users, and its legislation and services.
Further information on the CTA’s mandate, roles, responsibilities and programs can be found in Part III of the Estimates – Departmental Plan.
1.2 Basis of Presentation
This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the CTA's spending authorities granted by Parliament, and those used by the CTA consistent with the Main Estimates and Supplementary Estimates (as applicable) for the 2020-2021 fiscal year. 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 money can be spent by the Government. Approvals are given in the form of annually approved limits through appropriation acts, or through legislation in the form of statutory spending authority for specific purposes.
When Parliament is dissolved for the purposes 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 CTA uses the full accrual method of accounting to prepare and present its annual departmental 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 the Fiscal Quarter and the Fiscal Year-to-Date (YTD) Results
Details: Graph 1
The figure illustrates the Agency's net budgetary authorities and expenditures for the quarter ended September 30, for fiscal years 2019-2020 and 2020-2021 where budgetary authorities and expenditures, in millions of dollars, is shown on the vertical axis and time period, in fiscal years, is shown on the horizontal axis.
Time period: 2019-2020
Net budgetary authorities: 36,05 million dollars
Year to date results : 15,76 million dollars
First quarter expenditures: 8,13 million dollars
Time period: 2020-2021
Net budgetary authorities: 26,26 million dollars
Year to date results : 17,00 million dollars
First quarter expenditures: 9,13 million dollars
2.1 Statement of Authorities
The CTA’s total authorities available for use in 2020-2021, totalling $26,261,239, have decreased by $9,785,920 when compared to the same period in the previous fiscal year as illustrated in the Statement of Authorities and in the Departmental Budgetary Expenditures by Standard Object below. This decrease in the authorities available for use is due to the reduced supply of the Main Estimates. Due to the COVID-19 pandemic and limited sessions in the spring for Parliament to study supply, the Standing Orders of the House of Commons were amended to extend the study period into the Fall. The CTA is expected to receive full supply for the 2020-2021 Main Estimates in December 2020.
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
Compared to the previous year, total budgetary expenditures recorded in the second quarter have increased by $992,049, from $8,133,149 to $9,125,198, as illustrated in the Departmental Budgetary Expenditures by Standard Object below. This expenditure increase is mainly attributable to an increase in the Personnel and Acquisition of machinery and equipment categories. These increases are offset by a reduction in the Transportation and communications category as explained below:
- The expenditures in the Personnel category have increased by $1,011,246 and is primarily due to the additional resources required to address the continued influx of air travel complaints.
- The expenditures in the Acquisition of machinery and equipment have increased by $93,597 due to the purchase of informatics equipment in order to replace outdated equipment and support flexible work arrangement for CTA's workforce, including telework.
- The expenditures in the Transportation and communications category have decreased by $87,132 and is primarily due to the COVID-19 travel restrictions.
With respect to all other budgetary expenditures by Standard Object, overall expenditures are similar to those of the previous fiscal year. Any difference is primarily attributable to the period in which the purchases were settled.
3. Risks and Uncertainties
Since the coming into force of the second phase of rights and protections under the Air Passenger Protection Regulations (APPR) on December 15th, 2019, the CTA has received an unprecedented number of complaints. At the close of 2019-20, a total of 13,467 complaints were carried forward for processing into 2020-21. In addition to this, since the mass disruption of air travel beginning in mid-March as a result of the COVID-19 pandemic, the CTA has received approximately another 10,000 complaints. By comparison, 826 complaints were filed in 2015, 3,367 in 2016, 5,565 in 2017, 7,650 in 2018 and 19,392 in 2019. This is a 23-fold growth in volumes over 5 years and would be challenging for any organization.
While the CTA has received temporary funding increases from Parliament in response to this situation, it mostly had to handle these pressures through process efficiencies and long hours of hard work. Without a permanent funding strategy, there is a risk the CTA will not be able to effectively deliver its mandate of consumer protection for air passengers. As CTA resources are stretched thin to accommodate this burgeoning caseload, its capacity will be eroded in its other core mandate areas, protecting the rights of persons with disabilities and promoting the efficiency of the national transportation network.
As travel begins to ramp up again, the CTA's ability to deliver timely dispute resolution services to Canadians will depend on having a stable funding profile.
4. Significant Changes in Relation to Operations, Personnel and Programs
During these difficult times, the CTA continues to maintain its normal operations while its employees practice social distancing. The CTA's dedicated employees are working remotely and are available through electronic means to provide service.
Although there have not been any significant changes to CTA programs as a result of COVID-19, the CTA did issue temporary adjustments to certain APPR provisions to give carriers additional flexibility to adjust flight schedules as global air travel was thrown into chaos by the COVID-19 pandemic and related travel restrictions. As of June 30, 2020, these temporary adjustments have ended and all requirements of the APPR are now applicable. However, the CTA has granted air carriers an extension to the required timeline to respond to passenger requests for compensation.
In addition to this, due to the severe operational and financial disruptions to the transportation sector caused by COVID-19, the CTA delayed the coming-into-force of a number of targeted provisions of the Air Transportation for Persons with Disabilities Regulations (ATPDR) until January 1, 2021. Most provisions of the ATPDR – over 200 – came into force, as planned, on June 25, 2020.
Approval by Senior Officials
Chair and Chief Executive Officer
November 25, 2020
Chief Financial Officer
November 25, 2020
Statement of Authorities (unaudited)
|Total available for use for the year ending March 31, 2021*||Used during the quarter ended September 30, 2020||Year to date used at quarter-end|
|Vote 1 – Program expenditures||22,728,794||8,242,087||15,234,581|
|Budgetary statutory authorities − Employee Benefit Plans||3,532,445||883,111||1,766,222|
|Total available for use for the year ended March 31, 2020*||Used during the quarter ended September 30, 2019||Year to date used at quarter-end|
|Vote 1 – Program expenditures||32,517,420||7,265,566||14,100,648|
|Budgetary statutory authorities − Employee Benefit Plans||3,529,739||867,583||1,660,955|
Departmental Budgetary Expenditures by Standard Object (unaudited)
|Expenditures:||Planned expenditures for the year ending March 31, 2021||Expended during the quarter ended September 30, 2020||Year to date used at quarter-end|
|Transportation and communications||525,791||44,574||53,948|
|Professional and special services||1,910,755||387,022||501,110|
|Repair and maintenance||64,086||1,045||1,183|
|Utilities, materials and supplies||100,850||37,038||78,317|
|Acquisition of land, buildings, and works||-||-||-|
|Acquisition of machinery and equipment||1,190,321||108,509||422,659|
|Other subsidies and payments||-||-||125|
|Total net budgetary expenditures||26,261,239||9,125,198||17,000,803|
|Expenditures:||Planned expenditures for the year ending March 31, 2020||Expended during the quarter ended September 30, 2019||Year to date used at quarter-end|
|Transportation and communications||653,046||131,706||228,714|
|Professional and special services||3,689,609||366,118||674,580|
|Repair and maintenance||141,193||3,063||3,446|
|Utilities, materials and supplies||160,466||8,774||24,102|
|Acquisition of land, building and works||3,522,137||-||-|
|Acquisition of machinery and equipment||223,950||14,912||16,702|
|Other subsidies and payments||-||-||13|
|Total net budgetary expenditures||36,047,159||8,133,149||15,761,603|