Quarterly Financial Report for the Quarter Ended September 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 September 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 Q2 2024–25	YTD expenditures as at Q2 2023–24	Variance in expenditures
Not Statutory	Vote 1 – Program expenditures	54,254	53,938	316	29,270	21,538	7,732
Statutory	Contributions to employee benefit plans	5,108	5,546	(438)	2,554	2,773	(219)
Statutory	Expenditures pursuant to subsection 21(3) of the NSCA	108,606	101,056	7,550	61,899	44,811	17,088
Statutory	Total statutory authorities	113,714	106,602	7,112	64,453	47,584	16,869
Combined	Total	167,968	160,540	7,428	93,723	69,122	24,601

2.1 Statement of voted and statutory authorities

The CNSC’s total authorities available to spend in 2024–25 as of September 30 have increased by $7.4 million (to $168.0 million) or by 4.6%.

The voted authorities have increased by $0.3 million (to $54.3 million) or by 0.6%. The increase is due to:

• a $1.2 million year-over-year increase in funding received from the Treasury Board Secretariat (TBS) through the Impact Assessment Renewal Initiative for the establishment of a new grants and contributions program called 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
• a $0.1 million decrease in the amount of the operating budget carry-forward

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, Q2 expenditures increased by $20.1 million (to $57.5 million) or 53.8%, and YTD expenditures increased by $24.6 million (to $93.7 million) or 35.6%. Q2 Vote 1 expenditures increased by $6.4 million (to $18.1 million) or 54.2%, and YTD expenditures increased by $7.7 million (to $29.3 million) or 35.9%. Expenditures pursuant to subsection 21(3) of the NSCA increased by $13.8 million (to $38.1 million) or 57.2%, and increased by $17.1 million (to $61.9 million) or 38.1% YTD. Contributions to employee benefit plans decreased by $0.1 million (to $1.3 million) or 7.9%, and by $0.2 million (to $2.5 million) or 7.9% YTD.

As illustrated in the appended table of departmental budgetary expenditures by standard object, the increase in expenditures of $20.1 million for Q2 and the increase of $24.6 million YTD by standard object is mainly due to the following:

• a $21.9 million ($23.7 million YTD) increase in personnel costs attributable to negotiated salary increases (largely due to timing issues because of retroactive payments for 2022–23 and 2023–24) in addition to new industry projects
• a $0.1 million ($0.3 million YTD) increase in rentals due to the timing of payments for the rental of buildings
• a $0.2 million ($0.3 million YTD) increase in repair and maintenance incurred in converting leased office space to GC workplace design standards to facilitate a reduction in the portfolio of leased office space
• a $0.6 million ($1.4 million YTD) increase in the acquisition of machinery and equipment because of increased expenditures for laboratory equipment and for software and hardware for cloud computing
• a $2.6 million ($1.0 million YTD) decrease in professional and special services attributable to the timing of payments to other departments for information technology services
• $0.1 million ($0.1 million YTD) net decrease 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

On August 12, 2024, Pierre Tremblay began a 5-year term as the new President and Chief Executive Officer of the CNSC.

On September 27, 2024, Dean Haslip was appointed as Vice-President, Technical Support, and Chief Science Officer, effective October 21, 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 September 30, 2024	YTD used at quarter-end
Vote 1 – Program expenditures	54,254	18,123	29,270
Budgetary statutory authorities	n/a	n/a	n/a
Contributions to employee benefit plans	5,108	1,277	2,554
Expenditures pursuant to subsection 21(3) of the NSCA	108,606	38,077	61,899
Total budgetary authorities	167,968	57,477	93,723
Non-budgetary authorities	-	-	-
Total authorities	167,968	57,477	93,723

*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 September 30, 2023	YTD used at quarter-end
Vote 1 – Program expenditures	53,938	11,752	21,538
Budgetary statutory authorities	n/a	n/a	n/a
Contributions to employee benefit plans	5,546	1,387	2,773
Expenditures pursuant to subsection 21(3) of the NSCA	101,056	24,228	44,811
Total budgetary authorities	160,540	37,367	69,122
Non-budgetary authorities	-	-	-
Total authorities	160,540	37,367	69,122

*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 September 30, 2024	YTD used at quarter-end
Personnel	127,403	49,289	77,838
Transportation and communications	5,300	1,031	2,609
Information	1,100	353	454
Professional and special services	17,388	4,021	7,196
Rentals	3,000	465	1,332
Repair and maintenance	3,347	492	620
Utilities, materials and supplies	500	137	227
Acquisition of machinery and equipment	3,000	1,084	2,236
Transfer payments	6,830	498	1,109
Other subsidies and payments	100	107	102
Total gross budgetary expenditures	167,968	57,477	93,723
Total revenues netted against expenditures	-	-	-
Total net budgetary expenditures	167,968	57,477	93,723

*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 September 30, 2023	YTD used at quarter-end
Personnel	120,160	27,414	54,105
Transportation and communications	5,827	1,255	2,676
Information	1,060	206	576
Professional and special services	19,386	6,658	8,175
Rentals	3,179	333	1,005
Repair and maintenance	1,589	294	330
Utilities, materials and supplies	424	107	195
Acquisition of machinery and equipment	3,179	438	806
Transfer payments	5,630	646	1,236
Other subsidies and payments	106	16	18
Total gross budgetary expenditures	160,540	37,367	69,122
Total revenues netted against expenditures	-	-	-
Total net budgetary expenditures	160,540	37,367	69,122

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