Quarterly Financial Report for the Quarter Ended June 30, 2022

Quarterly Financial Report for the Quarter Ended June 30, 2022 (PDF, 10 pages, 359 KB)

Statement outlining results, risks and significant changes in operations, personnel and programs

1. Introduction

This quarterly financial report has been prepared by management, as required by sec 65.1 of the Financial Administration Act, and in the form and manner prescribed by the Treasury Board Secretariat. The report should be read in conjunction with the Main Estimates and Supplementary Estimates.

The report has been reviewed by the Departmental Audit Committee.

1.1 Authority and mandate

The Canadian Nuclear Safety Commission (CNSC) was established on May 31, 2000, with the coming into effect of the Nuclear Safety and Control Act (NSCA). The CNSC is a departmental corporation and reports to Parliament through the Minister of Natural Resources.

As an independent regulatory agency and quasi-judicial administrative tribunal, the CNSC has jurisdiction over all nuclear-related activities and substances in Canada. Its mandate under the NSCA is to:

• regulate the development, production and use of nuclear energy in Canada to protect health, safety and the environment
• regulate the production, possession, use and transport of nuclear substances, and the production, possession and use of prescribed equipment and prescribed information
• implement measures respecting international control of the development, production, transport and use of nuclear energy and substances, including measures respecting the non-proliferation of nuclear weapons and nuclear explosive devices
• disseminate objective scientific, technical and regulatory information concerning the CNSC’s activities, and about how the development, production, possession, transport and use of nuclear substances affect the environment and the health and safety of persons

Further details on the CNSC’s authority, mandate and Departmental Results Framework can be found in the Departmental Plan and the Main Estimates (Part II).

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying statement of authorities table (see appendix) includes the CNSC’s spending authorities granted by Parliament and those used by the CNSC, consistent with the Main Estimates and Supplementary Estimates for both the 2021–22 and 2022–23 fiscal years, as well as transfers from Treasury Board central votes that are approved as at the end of the quarter. 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 monies can be spent by the Government of Canada. Approvals are given through annually approved limits, appropriation acts or legislation in the form of statutory spending authority for specific purposes.

The CNSC 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.

1.3 The CNSC’s financial structure

The CNSC has a structure within which various funding mechanisms are used to deliver its mandate. Most of the CNSC’s funding is received from statutory budgetary authorities, and the balance comes from voted budgetary authorities.

Pursuant to subsection 21(3) of the NSCA, the CNSC has statutory authority to spend during a fiscal year any revenues that it received in the current or previous fiscal year through the conduct of its operations. The revenues received from regulatory fees for licences and applications are charged in accordance with the Canadian Nuclear Safety Commission Cost Recovery Fees Regulations. This authority to spend revenues provides a sustainable and timely funding regime to address the rapid changes in the regulatory oversight workload associated with the Canadian nuclear industry.

The CNSC is also funded through a voted budgetary authority from Parliament (Vote 1 – Program expenditures). The voted authority is used to fund activities and certain types of licensees that, under the Regulations, are not subject to cost recovery. The Regulations state that licensees such as hospitals and universities are exempt from paying fees, as these entities exist for the public good. Additionally, fees are not charged for activities that result from CNSC obligations that do not provide a direct benefit to identifiable licensees. These include activities with respect to Canada’s international obligations (including non-proliferation activities) and public responsibilities (such as emergency management and public information programs), and work done to update the NSCA and associated regulations.

Contributions to employee benefit plans come from statutory budgetary authorities.

2. Highlights of fiscal quarter and fiscal year-to-date results

This section highlights the significant items that contributed to the net change in authorities and actual expenditures for the quarter and year-to-date (YTD) ended June 30, 2022.

Highlights of the fiscal quarter and fiscal year-to-date results ($ thousands)

	2022–23 Budgetary authorities to March 31, 2023	2021–22 Budgetary authorities to March 31, 2022	Variance in budgetary authorities	YTD expenditures as at Q1 2022–23	YTD expenditures as at Q1 2021–22	Variance in expenditures
Vote 1 – Program expenditures	40,818	41,081	(263)	8,924	8,000	924
Statutory:
Contributions to employee benefit plans	4,481	4,417	64	1,120	1,104	16
Expenditures pursuant to subsection 21(3) of the NSCA	98,383	98,251	132	21,400	19,616	1,784
Total statutory authorities	102,864	102,668	196	22,520	28,720	1,800
Total	143,682	143,749	(67)	31,444	28,720	2,724

2.1 Statement of voted and statutory authorities

The CNSC’s total authorities available to spend in 2022–23 as of June 30 have decreased by $0.1 million (to $143.7 million).

The voted authorities have decreased by $0.3 million (to $40.8 million) or by 0.6%. The decrease is due to a transfer to Shared Services Canada for the Enterprise Service Model, for government information technology operations, in addition to reduced temporary funding that was received in 2021–22 from the Treasury Board Secretariat for regulatory capacity funding.

Contributions to employee benefit have increased by $0.1 million (to $4.5 million) or by 1.4%.

The CNSC’s statutory authority for expenditures pursuant to subsection 21(3) of the NSCA is based on expenditures for activities subject to cost recovery fees. This authority increased marginally by $0.1 million (to $98.4 million) or by 0.1%.

2.2 Expenditure analysis

As illustrated in the appended statement of authorities table, Q1 expenditures increased by $2.7 million (to $31.4 million) or by 9.5%. Q1 Vote 1 expenditures increased by $0.9 million (to $8.9 million) or by 11.6%, while expenditures pursuant to subsection 21(3) of the NSCA increased by $1.8 million (to $21.4 million) or by 9.1%.  Contributions to employee benefit plans are unchanged at $1.1 million.

As illustrated in the appended table of departmental budgetary expenditures by standard object, the increase in expenditures of $2.7 million for Q1 and YTD by standard object is mainly due to the following:

• $0.3 million increase in personnel costs as a result of the cumulative impact of retroactive economic increases for executives
• $0.6 million increase in transportation and communications attributable an increase in travels following loosening of COVID-19 travel restrictions
• $1.3 million increase in professional and special services primarily attributable to the timing of payments to other departments for information technology services
• $0.3 million increase in rentals due to the timing of payments for the rental of buildings
• $0.3 million increase in the acquisition of machinery and equipment as a result of increased software costs for cloud computing
• $0.1 million decrease in transfer payments due to timing differences for contributions to the Research and Support Program

3. Risks and uncertainties

The CNSC continues to review its strategic planning framework in response to COVID-19 and to reflect changes taking place in the nuclear sector. It also continues to reflect and anticipate the needs of a changing industry, specifically:

• the fact that Ontario Power Generation’s Pickering Nuclear Generating Station was licensed in 2018 to cease commercial operations in 2024 and to decommission operations throughout the remainder of the licence, up to 2028
• continued industry interest in small modular reactors
• increasing Indigenous consultation and engagement
• projected growth in demand and planned production capacity for medical isotopes
• potential growth in nuclear capacity for net-zero emissions targets

The CNSC assesses the impact of changes on resources continually through formal planning and budgeting processes to ensure agility and sustainability, given COVID-19 and evolving market needs.

4. Significant changes in relation to operations, personnel and programs

On April 7, 2022, Budget 2022 announced $50.7 million in funding, over 5 years, for the CNSC to regulate small modular reactors.  The funding in Budget 2022 will reinforce the CNSC’s efforts to build its capacity to regulate these innovative technologies, perform independent research, and strengthen its ongoing work on international collaboration and regulatory harmonization. This funding has not yet been reflected in the CNSC`s reference levels, since it is pending Treasury Board approval.

5. Approval by senior officials

Approved by:

• Rumina Velshi, President
• Stéphane Cyr, Chief Financial Officer

Ottawa, Canada

Date: August 5, 2022

Appendix

Statement of authorities (unaudited) (in thousands of dollars)

	Fiscal year 2022–23			Fiscal year 2021–22
	Total available for use for the year ending March 31, 2023*	Used during the quarter ended June 30, 2022	YTD used at quarter-end	Total available for use for the year ending March 31, 2022*	Used during the quarter ended June 30, 2021	YTD used at quarter-end
Vote 1 – Program expenditures	40,818	8,924	8,924	41,081	8,000	8,000
Budgetary statutory authorities
Contributions to employee benefit plans	4,481	1,120	1,120	4,417	1,104	1,104
Expenditures pursuant to subsection 21(3) of the NSCA	98,383	21,400	21,400	98,251	19,616	19,616
Total budgetary authorities	143,682	31,444	31,444	143,749	28,720	28,720
Non-budgetary authorities	-	-	-	-	-	-
Total authorities	143,682	31,444	31,444	143,749	28,720	28,720

*Includes only authorities available for use and granted by Parliament at quarter-end

Departmental budgetary expenditures by standard object (unaudited) (in thousands of dollars)

	Fiscal year 2022–23			Fiscal year 2021–22
	Planned expenditures for the year ending March 31, 2023*	Expended during the quarter ended June 30, 2022	YTD used at quarter-end	Planned expenditures for the year ending March 31, 2022*	Expended during the quarter ended June 30, 2021	YTD used at quarter-end
Expenditures
Personnel	109,536	25,311	25,311	109,318	24,958	24,958
Transportation and communications	4,421	677	677	3,582	50	50
Information	1,000	361	361	995	359	359
Professional and special services	17,474	3,151	3,151	17,660	1,845	1,845
Rentals	3,650	864	864	4,088	589	589
Repair and maintenance	1,831	136	136	2,474	128	128
Utilities, materials and supplies	400	76	76	500	75	75
Acquisition of machinery and equipment	3,500	551	551	3,228	279	279
Transfer payments	1,770	292	292	1,770	414	414
Other subsidies and payments	100	25	25	134	23	23
Total gross budgetary expenditures	143,682	31,444	31,444	143,749	28,720	28,720
Total revenues netted against expenditures	-	-	-	-	-	-
Total net budgetary expenditures	143,682	31,444	31,444	143,749	28,720	28,720

*Includes only authorities available for use and granted by Parliament at quarter-end