Quarterly Financial Report for the Quarter Ended June 30, 2024

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 section 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 Energy and Natural Resources.

As an independent regulatory agency and quasi-judicial administrative tribunal, the CNSC has jurisdiction over all non-military 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 2023–24 and 2024–25 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, 2024.

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

n/a	n/a	2024–25 Budgetary authorities to March 31, 2025	2023–24 Budgetary authorities to March 31, 2024	Variance in budgetary authorities	YTD expenditures as at Q1 2024–25	YTD expenditures as at Q1 2023–24	Variance in expenditures
Not Statutory	Vote 1 – Program expenditures	52,421	51,986	435	11,147	9,786	1,361
Statutory	Contributions to employee benefit plans	5,108	5,546	(438)	1,277	1,386	(109)
Statutory	Expenditures pursuant to subsection 21(3) of the NSCA	108,606	101,056	7,550	23,822	20,583	3,239
Statutory	Total statutory authorities	113,714	106,602	7,112	25,099	21,969	3,130
Combined	Total	166,135	158,588	7,547	36,246	31,755	4,491

2.1 Statement of voted and statutory authorities

The CNSC’s total authorities available to spend in 2024–25 as of June 30 have increased by $7.5 million (to $166.1 million) or by 4.8%.

The voted authorities have increased by $0.4 million (to $52.4 million) or by 0.8%.  The increase is due to:

• a $1.2-million year-over-year increase in funding received from Treasury Board Secretariat (TBS) through the Impact Assessment Renewal Initiative for the establishment of a new grants and contributions program, the Indigenous and Stakeholder Capacity Fund, and for an increase in the funding envelope for the existing Participant Funding Program
• a $0.5-million increase from TBS for negotiated salary adjustments
• a $1.3-million decrease as a result of budget reductions announced under the government wide Refocusing Government Spending Initiative

Contributions to employee benefit plans have decreased by $0.4 million (to $5.1 million) or by 7.9% because of a reduction in the rate used by TBS.

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 by $7.5 million (to $108.6 million) or by 7.5% mostly due to negotiated salary increases, including retroactive payments for salaries and wages (the corresponding increase in appropriations funding is expected to be received later in the year).

2.2 Expenditure analysis

As illustrated in the appended statement of authorities table, Q1 expenditures increased by $4.5 million (to $36.2 million) or by 14.1%.  Q1 Vote 1 expenditures increased by $1.4 million (to $11.1 million) or by 13.9%, while expenditures pursuant to subsection 21(3) of the NSCA increased by $3.2 million (to $23.8 million) or by 15.7%.  Contributions to employee benefit decreased by $0.1 million (to $1.3 million) or by 7.9%.

As illustrated in the appended table of departmental budgetary expenditures by standard object, the increase in expenditures of $4.5 million for Q1 and YTD by standard object is mainly due to the following:

• a $1.9-million increase in personnel attributable to new industry projects in addition to economic increases for executives
• a $1.7-million increase in professional and special services attributable to the timing of payments to other departments for information technology services
• a $0.8-million increase in the acquisition of machinery and equipment attributable to the timing of payments for software costs for cloud computing
• $0.1 million net increase in other expenditure categories

3. Risks and uncertainties

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

• continued industry interest in small modular reactors, including the Darlington New Nuclear Project
• 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
• Ontario Power Generation’s plan to extend the life of and potentially refurbish the Pickering Nuclear Generating Station
• potential expansion of the Bruce Nuclear Generating Station

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

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

In April 2024, Peter Elder, Vice-President, Technical Support Branch, and Chief Science Officer, left the CNSC.  Brian Torrie was appointed as Vice President, Technical Support Branch, and Chief Science Officer on an interim basis.

On May 29, 2024, the CNSC signed a new collective agreement with the Nuclear Regulatory (NUREG) Group, effective April 1, 2022 to March 31, 2026.

In June 2024, Michael DeJong, Vice-President, Regulatory Affairs, and Chief Communications Officer, left the CNSC. On June 5, 2024, Colin Moses was appointed to this position effective June 24, 2024.

On June 26, 2024, Pierre Tremblay was appointed by the Governor in Council as the new President and Chief Executive Officer of the CNSC, for a 5-year term effective August 12, 2024.

5. Approval by senior officials

Approved by:

Pierre Tremblay
President and Chief Executive Officer

Stéphane Cyr
Chief Financial Officer
Ottawa, Canada

Appendix

Statement of authorities (unaudited)

Fiscal year 2024–25 (in thousands of dollars)

n/a	Total available for use for the year ending March 31, 2025*	Used during the quarter ended June 30, 2024	YTD used at quarter-end
Vote 1 – Program expenditures	52,421	11,147	11,147
Budgetary statutory authorities	n/a	n/a	n/a
Contributions to employee benefit plans	5,108	1,277	1,277
Expenditures pursuant to subsection 21(3) of the NSCA	108,606	23,822	23,822
Total budgetary authorities	166,135	36,246	36,246
Non-budgetary authorities	-	-	-
Total authorities	166,135	36,246	36,246

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

Fiscal year 2023–24 (in thousands of dollars)

n/a	Total available for use for the year ending March 31, 2024*	Used during the quarter ended June 30, 2023	YTD used at quarter-end
Vote 1 – Program expenditures	51,986	9,786	9,786
Budgetary statutory authorities	n/a	n/a	n/a
Contributions to employee benefit plans	5,546	1,386	1,386
Expenditures pursuant to subsection 21(3) of the NSCA	101,056	20,583	20,583
Total budgetary authorities	158,588	31,755	31,755
Non-budgetary authorities	-	-	-
Total authorities	158,588	31,755	31,755

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

Departmental budgetary expenditures by standard object (unaudited)

Fiscal year 2024–25 (in thousands of dollars)

Expenditure	Planned expenditures for the year ending March 31, 2025*	Expended during the quarter ended June 30, 2024	YTD used at quarter-end
Personnel	125,608	28,549	28,549
Transportation and communications	5,300	1,578	1,578
Information	1,100	101	101
Professional and special services	17,350	3,175	3,175
Rentals	3,000	867	867
Repair and maintenance	3,347	128	128
Utilities, materials and supplies	500	90	90
Acquisition of machinery and equipment	3,000	1,152	1,152
Transfer payments	6,830	611	611
Other subsidies and payments	100	(5)	(5)
Total gross budgetary expenditures	166,135	36,246	36,246
Total revenues netted against expenditures	-	-	-
Total net budgetary expenditures	166,135	36,246	36,246

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

Fiscal year 2023–24 (in thousands of dollars)

Expenditure	Planned expenditures for the year ending March 31, 2024*	Expended during the quarter ended June 30, 2023	YTD used at quarter-end
Personnel	120,160	26,691	26,691
Transportation and communications	5,500	1,421	1,421
Information	1,000	370	370
Professional and special services	18,298	1,517	1,517
Rentals	3,000	672	672
Repair and maintenance	1,500	36	36
Utilities, materials and supplies	400	88	88
Acquisition of machinery and equipment	3,000	368	368
Transfer payments	5,630	590	590
Other subsidies and payments	100	2	2
Total gross budgetary expenditures	158,588	31,755	31,755
Total revenues netted against expenditures	-	-	-
Total net budgetary expenditures	158,588	31,755	31,755

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