Quarterly financial report for the quarter ended December 31, 2023

ISSN 2369-7938

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 Main Estimates and Supplementary Estimates.

The Transportation Safety Board of Canada’s (TSB’s) sole objective is to advance air, marine, pipeline and rail transportation safety. This mandate is fulfilled by conducting independent investigations into selected transportation occurrences to identify the causes and contributing factors, and the safety deficiencies evidenced by these occurrences. The TSB makes recommendations to reduce or eliminate any such safety deficiencies and reports publicly on its investigations. The TSB then follows up with stakeholders to ensure that safety actions are taken to reduce risks and improve safety.

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

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the TSB’s spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main Estimates and Supplementary Estimates (as applicable) for the 2023-24 fiscal year and any respendable revenue earned and available for use to quarter end. 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 moneys 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.

TSB uses the full accrual method of accounting to prepare and present its annual departmental financial statements, which 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 Results

Statement of Authorities

The TSB’s total authorities available for use increased by $5.7 million between fiscal years 2023-24 and 2022-23. This variance is primarily explained by additional funding of $2.6 million received for salary increases as a result of collective agreements for retroactive years and 2023–24, as well as new funding of $4.4 million received in Budget 2023 for critical operational requirements. Offsetting this increase is the Laboratories Canada program funding of $0.6 million that was received in 2022-23 but was not received for the current fiscal year. For 2023-24, a new funding structure was agreed upon whereby the TSB would not receive upfront authorities for the Laboratories Canada program, but rather a reimbursement of expenditures. In addition, there was a decrease of 0.3 million related to the Budget 2023 Refocusing Government Spending initiative. The remaining difference is mainly due to fluctuations in the Employee Benefit Plan (EBP) percentage, which is a rate set annually by the Treasury Board Secretariat. 

Compared to the second quarter, appropriations increased by 7.0 million due to the new funding received this quarter for collective agreement and Budget 2023 critical operational requirements as detailed above.

Statement of Departmental Budgetary Expenditures

The department’s year-to-date expenditures have increased by $2.4 million or 9% in the current year compared to 2022-23. The variance in expenditures is primarily attributable to increased spending in four categories: personnel, transportation and communications, professional and special services, and repair and maintenance. The discrepancy in the personnel category is linked to higher salary expenditures as a result of signed and ratified collective agreements. The increase in transportation and communications is mainly due to the TSB participating in the investigation of a major occurrence earlier this year. The increase in professional and special services compared to the preceding fiscal year is due to the TSB's need for IT project consultants. This requirement arises in the context of facilitating the migration of the server-based SharePoint platform to SharePoint Online aligning with the organization’s strategic digital transformation objectives. These projects were approved early in the fiscal year. The variance in repair and maintenance is due to a delay in invoicing of services received last year from Public Services and Procurement Canada for maintenance of our laboratory facilities.

As illustrated in Figure 1, the TSB has spent approximately 65% of its available authorities at the end of the third quarter. This is below what would normally be expected, given that the department's most significant expense is salaries and is generally distributed equally throughout the year. The low spending rate is mainly as result of the new Budget 2023 funding received for critical operational requirements, most of which was for hiring of new employees. However, the late timing of the receipt of funds as well as delays in creating new positions and staffing have caused a significant variance to occur.

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Risks and Uncertainties

A continuous risk to the TSB’s financial situation is that expenditures are greatly influenced by the number and complexity of transportation occurrences. A significant transportation accident or a flurry of smaller size occurrences could significantly increase expenditures and result in additional resource pressures that could require the department to seek further funding from Parliament.

As a departmental corporation, the TSB has authority to spend revenues received during the year although such revenues are minimal; on average less than 1% of the department’s funding requirements.

Significant Changes in Relation to Operations, Personnel and Programs

In relation to operations, TSB employees are currently working in a hybrid work environment in line with the Direction on Prescribed Presence in the Workplace.

There has been no change to the TSB’s programs.

Approval by Senior Officials

Statement of Authorities (unaudited)

Statement of Expenditures by Standard Object (unaudited)