Quarterly Financial Report - For the period ending September 30, 2021
Statement outlining results, risks and significant changes in operations, personnel and program
This quarterly financial report (QFR) 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. The report should be read in conjunction with the Main Estimates for 2021-22. The quarterly report has not been subject to an external audit or review.
The Minister of Public Safety is the minister responsible for the Royal Canadian Mounted Police (RCMP). The responsibilities of the RCMP are set out in section 18 of the Royal Canadian Mounted Police Act. The RCMP's mandate is multi-faceted, it includes preventing and investigating crime; maintaining peace and order; enforcing laws; contributing to national security; ensuring safety of state officials, visiting dignitaries and foreign missions; and providing vital operational support services to other police and law enforcement agencies within Canada and abroad.
Further information on the mandate, roles, responsibilities and programs of the RCMP can be found in the Main Estimates (Part II of Estimates) and the Departmental Plan and Departmental Results Report (Part III of Estimates).
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 RCMP's spending authorities granted by Parliament and those used by the department consistent with the Main Estimates and Supplementary Estimates "A". 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.
The RCMP 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 a cash expenditure basis.
2. Highlights of the fiscal quarter and fiscal year-to-date (YTD) results
For the period ending September 30, 2021, the RCMP had $3,808.5 million in total authorities available for use, which represents an increase of $286.7 million (or 8%) when compared at the same quarter in the previous year. The RCMP's authorities have increased in the Operating (Vote 1), Capital (Vote 5) and Grant and Contributions (Vote 10) totalling $400.0 million. These increases are offset by a decrease of $113.4 million in Statutory authorities.
The RCMP's expenditures were $2,266.4 million in the second quarter of the year, representing an increase of $399.5 million (or 21%) from the previous year's second quarter, as shown in Table 1.
|Authorities||2021-22 Authorities as at September 30, 2021||2020-21 Authorities as at September 30, 2020||Variance in authorities||%||Year-to-date expenditures as at September 30, 2021||Year-to-date expenditures as at September 30, 2020||Variance in expenditures||%|
|Vote 1- Net Operating expenditures||2,726,440||2,478,055||248,385||10%||1,654,873||1,369,386||285,487||21%|
|Vote 5 - Capital expenditures||300,401||224,419||75,982||34%||68,562||65,590||2,972||5%|
|Vote 10 - Grants and contributions||425,273||349,604||75,669||22%||303,054||203,917||99,137||49%|
|Budgetary statutory authorities||356,342||469,700||(113,358)||(24%)||239,879||227,999||11,880||5%|
2.1 Statement of authorities
The RCMP's 2021-22 Main Estimates are $76.8 million lower than the 2020-21 Main Estimates mainly due to a decrease in the statutory employee benefits and Grants and Contributions, which are partially offset by increases in the Operating Vote and Capital Vote.
However, as of September 30th, the total authorities available for use in 2021-22 increased by $286.7 million from 2020-21 as a result of the reduced supply of the Main Estimates in the first two quarters of 2020-21. In 2020-21, 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 RCMP received full supply for the 2020-21 Main Estimates in December 2020, whereas in 2021-22, the RCMP received full supply of the Main Estimates by the end of the first quarter. The two charts below show the changes in Authorities by Vote year over year.
|Based on the end of the Second Quarter (September) (in thousands of dollars)||Total authorities available for use||Year over year variance|
|Gross Operating expenditures||4,506,139||4,122,137||384,002||9%|
|Less: Vote Netted Revenues||1,779,699||1,644,082||135,617||8%|
|Vote 1 - Net Operating expenditures||2,726,440||2,478,055||248,385||10%|
|Vote 5 - Capital expenditures||300,401||224,419||75,982||35%|
|Vote 10 - Grants and contributions||425,273||349,604||75,669||22%|
|Total voted authorities||3,452,114||3,052,078||400,036||13%|
|Pensions and other employee benefits - Members of the Force||247,036||373,034||(125,998)||(34%)|
|Contributions to employee benefit plans (public servants)||96,226||82,252||13,974||17%|
|Pensions under the Royal Canadian Mounted Police Pension Continuation Act||6,750||6,750||0||0%|
|Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act||6,330||7,663||(1,333)||(17%)|
|Total statutory authorities||356,342||469,700||(113,358)||(24%)|
|Total budgetary authorities||3,808,456||3,521,778||286,678||8%|
|Expenditure||Year over Year Changes in Authorities by Vote (in Millions of dollars)|
|Vote 1 - Net Operating Expenditures|
|Compensation and modernization adjustment for various Public servants and Civilian members||26.4|
|RCMP's foundational improvements for Federal Policing||12.4|
|Ensuring Security and Prosperity in the Digital age phase II||8.2|
|Creation of the Independent Centre for Harassment Resolution||4.7|
|Other increases related to previously approved initiatives||4.2|
|Funding to strengthen Royal Canadian Mounted Police operations||(18.1)|
|Funding profile change for the class action legal settlement||(24.0)|
|Operation budget carry forward||17.0|
|Amount related to Government delays in receiving full supply||217.6|
|Sub-total Net Operating Expenditures||248.4|
|Vote 5 - Net Capital Expenditures|
|Ensuring Security and Prosperity in the Digital age phase II||8.2|
|RCMP's Foundational Improvements for Federal Policing||2.6|
|Funding profile change for various previously approved initiatives||(1.8)|
|Renewing the radio system for Ontario, Quebec and the National Capital Region||(6.3)|
|Capital Budget Carry Forward||11.0|
|Amount related to Government delays in receiving Full Supply||62.3|
|Sub-total Capital Expenditures||76.0|
|Vote 10 - Grants and Contributions|
|Funding for the grant to compensate members of the RCMP for injuries received in the performance of duty||26.8|
|Amount related to Government delays in receiving Full Supply||48.8|
|Sub-total Grants and Contributions||75.6|
|Increase in Public Service Employees and Members of the Force Employee Benefits Plan related to new and previously approved initiatives||7.9|
|Proceeds from Disposal of Crown Assets||(1.3)|
|Public Service Employees and Members of the Force Employee Benefits Plans related to changes in the effective EBP rate||(119.9)|
For more information on the authority changes that affect the RCMP, we would direct the reader to the RCMP's 2021-22 Main Estimates.
2.2 Statement of Departmental Budgetary Expenditures by Standard Object
Net budgetary expenditures at the end of the second quarter 2021-22 were $399.5 million (or 21%) higher than the previous year. This variance is the result of an increase in gross budgetary expenditures of $255.3 million (or 10%) and a decrease in vote netted revenues of $144.2 million (or 23%) from the previous year.
|Transportation and communications||98,102||74,433||23,669||32%|
|Professional and special services||248,028||203,363||44,665||22%|
|Purchased repair and maintenance||38,439||34,225||4,214||12%|
|Utilities, materials and supplies||65,953||62,026||3,927||6%|
|Acquisition of land, buildings and works||31,627||24,044||7,583||32%|
|Acquisition of machinery and equipment||65,596||78,563||(12,967)||(17%)|
|Public debt charges||308||327||(19)||(6%)|
|Other subsidies and payments||55,781||63,370||(7,589)||(12%)|
|Total gross budgetary expenditures||2,743,593||2,488,316||255,277||10%|
|Less: Revenues and other reductions||477,225||621,424||(144,199)||(23%)|
|Total net budgetary expenditures||2,266,368||1,866,892||399,476||21%|
In 2020-21, the federal and provincial and territorial governments implemented various measures to curb the spread of COVID-19, which resulted in several activities within the RCMP being slowed down or halted at the onset of the pandemic. With restrictions loosening in 2021-22, the RCMP is experiencing an increase in operations, leading to the rise in the overall expenditures. It is observed that multiple standard objects had significant increases in year-over-year expenditures primarily for this reason.
2.2.1 Variance - Personnel
The increase in expenditures by $86.7 million (or 5%) is attributed to higher pay expenditures for Public Service Employees (PSE) and Members of the RCMP. As a number of collective agreements were ratified in the past years, newly implemented rates of pay for various occupational groups increased the overall expenditures. Also, an increase in Member Extra Duty Pay due to increased operational tempo in 2021-22 further increased Personnel expenditures.
2.2.2 Variance - Transportation and Communications
The increase in expenditures by $23.7 million (or 32%) is mainly due to the loosening of pandemic restrictions.
2.2.3 Variance - Information
The decrease in expenditures by $0.26 million (or 20%) is mainly related to one-time expenditures in 2020-21, as the RCMP provided firearm license holders information regarding the announcement by the Government of Canada to banning models and variants of assault-style firearms.
2.2.4 Variance - Professional and special services
The increase in expenditures by $44.7 million (or 22%) is mainly related to increases in health costs and legal services costs related to the increased operational tempo in 2021-22. In addition, delays in staffing within the Information Management and Information Technology area caused an increase in contracting services in an effort to move ahead with projects.
2.2.5 Variance - Rentals
The increase in expenditures by $6.6 million (or 13%) is mainly due to the loosening of pandemic restrictions.
2.2.6 Variance - Purchased repair and maintenance
The increase in expenditures by $4.2 million (or 12%) is mainly due to the loosening of pandemic restrictions.
2.2.7 Variance - Acquisition of land, buildings and works
The increase in expenditures by $7.6 million (or 32%) is mainly due to the increased operational tempo, and an increase of real property projects such as the construction of Pangnirtung detachment and Norway House detachment in Contract Policing jurisdiction, and Depot's Integrated Training Centre project.
2.2.8 Variance – Acquisition of machinery and equipment
The decrease in expenditures by $13.0 million (or 17%) is mainly due to higher expenditures for personal protective equipment (PPE), computer and office equipment in 2020-21, as the RCMP equipped employees with protective gears and with adequate work-from-home environment at the beginning of the pandemic. Also, in 2020-21, there was one-time carbine and armoury parts purchase.
2.2.9 Variance - Transfer payments
The increase in expenditures by $98.7 million (or 48%) is primarily related to an increase in disability pension payments under the Grant to compensate members of the RCMP for injuries received in the performance of duty.
2.2.10 Variance - Other subsidies and payments
The decrease in expenditures by $7.6 million (or 12%) is primarily due to the timing of items being cleared from suspense accounts into other standard objects, as well as decreased claims payments related to the Merlo Davidson Class Action Settlement.
2.2.11 Variance -Revenues and other reductions
The decrease in Vote netted revenues by $144.2 million (or 23%) is primarily due to the timing differences in revenue collections related to Contract Policing.
3. Risks and uncertainties
The Departmental QFR reflects the results of the current fiscal period in relation to the Main Estimates and the Supplementary Estimates (A).
The RCMP is funded through annual appropriations and are, therefore, impacted by any changes in funding approved through Parliament. In addition, it receives a significant portion of funding through vote netted revenue (VNR) from the provision of policing services to provinces, territories, municipalities and first nations communities, as well as from cost sharing agreements with provinces and territories for the provision of DNA analysis by the RCMP. The RCMP also receives VNR authorities to bill Parliamentary Protective Service (PPS) for the provision of security services throughout the Parliamentary precinct and the grounds of Parliament Hill.
On October 6, 2016, the RCMP announced that a settlement agreement had been reached between the RCMP and the plaintiffs in the Merlo and Davidson lawsuits filed on behalf of current and former female regular members, civilian members and public service employees. The settlement agreement was approved by the Federal Court and included an independent claims process with compensation for women working, or having worked, at the RCMP who experienced harassment, bullying or discrimination based on their gender or sexual orientation during their employment from September 16, 1974 until May 30, 2017. The assessment of claims was the responsibility of an Independent Assessor appointed by the Federal Court. Claims were filed between August 12, 2017 and May 22, 2018. As of August 14, 2020, all 3,086 claims that were submitted had been assessed. On November 19, 2020, the Assessor's final report was released that set out his observations and recommendations stemming from his work in assessing claims. All Compensation awards to successful claims in Merlo/Davidson have now been paid.
The Tiller class action concerns women who worked or volunteered in RCMP workplaces but who were not employed by the RCMP (e.g., municipal employees, contractors) and who experienced gender or sexual orientation based harassment and discrimination from RCMP members and employees between September 16, 1974 and July 5, 2019. A settlement that provides for a claims process based on the one used in the Merlo/Davidson settlement was approved by the Federal Court on March 10, 2020. Claims were filed between July 16, 2020 and April 22, 2021. Claims are currently being assessed by the Independent Assessors; as claims are decided, compensation awards are paid to successful claimants in accordance with the terms of the settlement.
On August 6, 2021, the Government of Canada signed an agreement with the National Police Federation (NPF) to establish the first ever collective agreement for RCMP members and reservists. Members and reservists voted in favor and the agreement was ratified. The newly implemented, and retroactive, compensation costs will have a material impact on the 2021-22 expenditures.
In recent years, the RCMP's reference levels have been constrained by government-wide spending reduction exercises which have resulted in significant financial pressures. In order to assess the financial integrity issues faced by the RCMP and serve as the basis for longer term strategic recommendations to the Minister of Public Safety and Emergency Preparedness, a comprehensive resourcing review was initiated in Budget 2016 and completed in May 2017, during which the Treasury Board committed to addressing integrity issues to ensure that the RCMP can deliver mission-critical services to Canadians. The review findings have been assessed and the RCMP returned to Treasury Board with a fulsome Departmental Review in the fall of 2018 that included short, medium and long-term proposals to address its ongoing resourcing issues. Recent announcements identified funding to support and enhance RCMP operations.
4. Significant changes in relation to operations, personnel and programs
In comparison to the second quarter of 2020-21, the operational tempo of certain activities resumed as a result of the loosening of COVID-19 restrictions. The RCMP continues to assess the evolving circumstances of COVID-19 and is adjusting its operations accordingly.
Subsequent to the end of the second quarter, the following changes to the senior ranks of the department have occurred:
Frances McRae, previously the Assistant Deputy Minister for Innovation, Science and Economic Development Canada (ISED) becomes Chief Administrative Officer for the Royal Canadian Mounted Police.
There has been no significant change in relation to programs in the second quarter of 2021-22.
Approved by senior officials
Original signed by
Original signed by
Chief Financial Officer
Annex A: Statement of authorities (unaudited)
|Total available for use for the year ending March 31, 2022Table 5 note 1||Used during the quarter ended September 30, 2021||Year to date used at quarter-end|
|Gross Operating expenditures||4,506,139||1,100,738||2,132,098|
|Less: Vote Netted Revenues||1,779,699||256,719||477,225|
|Vote 1 - Net Operating expenditures||2,726,440||844,019||1,654,873|
|Vote 5 - Capital expenditures||300,401||44,284||68,562|
|Vote 10 - Grants and contributions||425,273||182,499||303,054|
|Pensions and other employee benefits - Members of the Force||247,036||75,567||183,221|
|Contributions to employee benefit plans (public servants)||96,226||24,056||48,113|
|Pensions under the Royal Canadian Mounted Police Pension Continuation Act||6,750||1,094||2,228|
|Refunds of amounts credited to revenues in previous years||0||45||68|
|Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act||6,330||3,513||6,249|
|Total budgetary authorities||3,808,456||1,175,077||2,266,368|
|Total available for use for the year ending March 31, 2021Table 6 note 1||Used during the quarter ended September 30, 2020||Year to date used at quarter-end|
|Gross Operating expenditures||4,122,137||1,040,427||1,990,810|
|Less: Vote Netted Revenues||1,644,082||464,228||621,424|
|Vote 1 - Net Operating expenditures||2,478,055||576,199||1,369,386|
|Vote 5 - Capital expenditures||224,419||50,053||65,590|
|Vote 10 - Grants and contributions||349,604||136,310||203,917|
|Pensions and other employee benefits - Members of the Force||373,034||71,899||178,307|
|Contributions to employee benefit plans (public servants)||82,252||20,334||40,668|
|Pensions under the Royal Canadian Mounted Police Pension Continuation Act||6,750||1,290||2,624|
|Refunds of amounts credited to revenues in previous years||0||41||71|
|Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act||7,663||6,227||6,329|
|Total budgetary authorities||3,521,777||862,353||1,866,892|
Annex B: Budgetary expenditures by standard object (unaudited)
|Planned expenditures for the year ending March 31, 2022||Expended during the quarter ended September 30, 2021||Year to date used at quarter-end|
|Transportation and communications||218,586||44,612||98,102|
|Professional and special services||533,386||142,428||248,028|
|Repair and maintenance||111,549||20,340||38,439|
|Utilities, materials and supplies||158,740||31,730||65,953|
|Acquisition of land, buildings and works||110,780||21,010||31,627|
|Acquisition of machinery and equipment||289,535||35,652||65,596|
|Public debt charges||504||154||308|
|Other subsidies and payments||145,184||35,537||55,781|
|Total gross budgetary expenditures||5,588,154||1,431,796||2,743,593|
|Less Revenues netted against expenditures:|
|Vote Netted Revenues||1,779,699||256,719||477,225|
|Total Revenues netted against expenditures:||1,779,699||256,719||477,225|
|Total net budgetary expenditures||3,808,455||1,175,077||2,266,368|
|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||204,159||34,084||74,433|
|Professional and special services||478,004||131,226||203,363|
|Repair and maintenance||96,812||21,770||34,225|
|Utilities, materials and supplies||144,606||35,315||62,026|
|Acquisition of land, buildings and works||81,899||18,920||24,044|
|Acquisition of machinery and equipment||248,590||48,245||78,563|
|Public debt charges||234||163||327|
|Other subsidies and payments||143,988||14,684||63,370|
|Total gross budgetary expenditures||5,165,860||1,326,581||2,488,316|
|Less Revenues netted against expenditures:|
|Vote Netted Revenues||1,644,082||464,228||621,424|
|Total Revenues netted against expenditures:||1,644,082||464,228||621,424|
|Total net budgetary expenditures||3,521,778||862,353||1,866,892|
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