Quarterly Financial Report for the period ending September 30, 2022
Statement outlining results, risks and significant changes in operations, personnel and program
On this page
1. Introduction
In this section
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. The report should be read in conjunction with the Main Estimates for 2022-23. The quarterly report has not been subject to an external audit or review.
1.1 Mandate
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. 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 fiscal quarter and fiscal year-to-date results
In this section
- 2.1 Statement of authorities
- 2.2 Statement of departmental budgetary expenditures by standard object
- 2.2.1 Variance - Personnel
- 2.2.2 Variance - Transport and communications
- 2.2.3 Variance - Information
- 2.2.4 Variance - Professional and special services
- 2.2.5 Variance - Utilities, materials and supplies
- 2.2.6 Variance - Acquisition of land, buildings and works
- 2.2.7 Variance - Acquisition machinery and equipment
- 2.2.8 Variance - Other subsidies and payments
- 2.2.9 Variance - Revenues and other reductions
For the period ending September 30, 2022, the RCMP had $4,393.7 million in total authorities available for use, which represents an increase of $585.3 million or (15%) when compared at the same quarter in the previous year. The RCMP's authorities have increased in all Votes: Operating (Vote 1) increased by $375.3 million, Capital (Vote 5) increased by $35.7 million, Grant and Contributions (Vote 10) increased by $3.0 million and Statutory Authorities increased by $171.3 million.
The RCMP's expenditures were $2,417.3 million in the second quarter of the year, representing an increase of $150.9M or 7% from the previous year's second quarter, as shown in Table 1.
| Authorities | 2022-23 authorities as at | 2021-22 authorities as at | Variance in authorities | Percentage (%) | Expenditures during the quarter ended in | Expenditures during the quarter ended in | Variance in expenditures | Percentage (%) |
|---|---|---|---|---|---|---|---|---|
| Vote 1 - Net operating expenditures | 3,101,705 | 2,726,440 | 375,265 | 14% | 1,831,760 | 1,654,873 | 176,887 | 11% |
| Vote 5 - Capital expenditures | 336,144 | 300,401 | 35,743 | 12% | 83,736 | 68,562 | 15,174 | 22% |
| Vote 10 - Grants and contributions | 428,273 | 425,273 | 3,000 | 1% | 290,607 | 303,054 | -12,447 | -4% |
| Budgetary statutory authorities | 527,600 | 356,342 | 171,258 | 48% | 211,188 | 239,879 | -28,691 | -12% |
| Total authorities | 4,393,722 | 3,808,456 | 585,266 | 15% | 2,417,291 | 2,266,368 | 150,923 | 7% |
Table 1 note
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2.1 Statement of authorities
As illustrated in Table 2 below, the total authorities available for use as at September 30, 2022 increased by $585.3 million from the second quarter of fiscal 2021-22.
| Based on the end of the second quarter (September) | Total authorities available for use | Year over year variance | ||
|---|---|---|---|---|
| (in thousands of dollars) | 2022-23 | 2021-22 | Authorities | Percentage |
| Gross operating expenditures | 4,873,270 | 4,506,139 | 367,131 | 8% |
| Less: Vote netted revenues | 1,771,565 | 1,779,699 | (8,134) | 0% |
| Vote 1 - Net operating expenditures | 3,101,705 | 2,726,440 | 375,265 | 14% |
| Vote 5 - Capital expenditures | 336,144 | 300,401 | 35,743 | 12% |
| Vote 10 - Grants and contributions | 428,273 | 425,273 | 3,000 | 1% |
| Total voted authorities | 3,866,122 | 3,452,114 | 414,008 | 12% |
| Pensions and other employee benefits - Members of the force | 455,479 | 247,036 | 208,443 | 84% |
| Contributions to employee benefit plans (public servants) | 66,826 | 96,226 | (29,400) | -31% |
| Pensions under the Royal Canadian Mounted Police Pension Continuation Act | 5,000 | 6,750 | (1,750) | -26% |
| Proceeds from the disposal of crown assets under the Surplus Crown Assets Act | 295 | 6,330 | (6,035) | -95% |
| Statutory authorities | 527,600 | 356,342 | 171,258 | 48% |
| Total budgetary authorities | 4,393,722 | 3,808,456 | 585,266 | 15% |
Table 2 note
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The RCMP's 2022-23 Main Estimates are $794.5 million higher than the 2021-22 Main Estimates mainly due to an increase in the Operating vote, Capital vote and Grants and Contributions vote.
The variance of $209.2 million between the year over year increase in Main Estimates, and the year over year increase in authorities available for use in the second quarter of 2022-23, is mainly due to a timing difference in the receipt of $230.3 million in funding for payments under the Grant to compensate members of the RCMP for injuries received in the performance of duty.
In 2021-22, the RCMP received incremental funding for the Grant to compensate members of the RCMP for injuries received in the performance of duty through Supplementary Estimates "A", whereas the same amount was included in the 2022-23 Main Estimates. Additionally, the RCMP received $26.2 million in additional carry forwards ($25.0 million in operating and $1.2 million in capital), $0.9 million incremental Employee Benefits Plan authorities as part of the Pension Administration approval, and lastly $6.0 million of authorities related to Proceeds from the Disposal of Crown Assets was lower than the prior year.
| Main estimates changes | |
|---|---|
| Compensation for regular members | 305.4 |
| Funding to compensate members of the RCMP for injuries received in the performance of duty | 230.3 |
| Funding to strengthen Royal Canadian Mounted Police operations | 84.3 |
| Public service employees and members of the force employee benefits plans related to changes in the effective EBP rate | 69.9 |
| National body-worn camera program for frontline officers to improve public transparency and accountability of the RCMP | 63.6 |
| Enhancements to Canada's firearm control framework | 40.1 |
| Renewal of the international peacekeeping and peace operations program | 34.5 |
| Other increases related to previosuly approved initiatives | 18.5 |
| Government-wide travel reductions | (16.1) |
| Sunsetting of the legalization and regulation of cannabis initiative | (16.0) |
| Transfer to Shared Services Canada for government information technology operations | (13.7) |
| Sunsetting of the delivering better service for air travellers initiative | (4.5) |
| Decrease in funding requirements of the RCMP Pension Continuation Act grant to realign funding more closely to annual expenditures | (1.8) |
| Sub-total main estimates changes | 794.5 |
| Supplementary estimates | |
| Funding to compensate members of the RCMP for injuries received in the performance of duty (received in Supplementary Estimates "A" in 2021-22) | (230.3) |
| Sub-Total supplementary estimates changes | (230.3) |
| In-year changes | |
| Pension administration employee benefits | 0.9 |
| Proceeds from disposal of crown assets | (6.0) |
| Operational budget carry forward change over prior year | 1.2 |
| Capital budget carry forward change over prior year | 25.0 |
| Sub-total in year changes | 21.1 |
| Total year-over-year changes | 585.3 |
Table 3 note
| |
For more information on the authority changes that affect the RCMP, we would direct the reader to the RCMP's 2022-23 Main Estimates.
2.2 Statement of departmental budgetary expenditures by standard object
As demonstrated in Table 4 below, Net Expenditures by standard objects at the end of the second quarter 2022-23 were $150.9 million (or 7%) higher than the previous year. This variance is primarily the result of an increase in gross budgetary expenditures of $256.3 million (or 9%), which was offset by an increase in vote netted revenues of $105.4 million (or 22%) from the previous year.
| Standard objects | 2022-2023 | 2021-2022 | Variance | Percentage (%) |
|---|---|---|---|---|
| Personnel | 1,985,791 | 1,777,747 | 208,044 | 12% |
| Transportation and communications | 112,822 | 98,102 | 14,720 | 15% |
| Information | 1,292 | 1,038 | 254 | 25% |
| Professional and special services | 269,294 | 248,028 | 21,266 | 9% |
| Rentals | 53,231 | 55,692 | (2,461) | (4%) |
| Purchased repair and maintenance | 35,179 | 38,439 | (3,260) | (8%) |
| Utilities, materials and supplies | 80,213 | 65,953 | 14,260 | 22% |
| Acquisition of land, buildings and works | 35,248 | 31,627 | 3,621 | 11% |
| Acquisition of machinery and equipment | 85,424 | 65,596 | 19,828 | 30% |
| Transfer payments | 292,498 | 305,282 | (12,784) | (4%) |
| Public debt charges | 292 | 308 | (16) | (5%) |
| Other subsidies and payments | 48,652 | 55,781 | (7,129) | (13%) |
| Total gross budgetary expenditures | 2,999,936 | 2,743,593 | 256,343 | 9% |
| Less: Revenues and other reductions | 582,645 | 477,225 | 105,420 | 22% |
| Total net budgetary expenditures | 2,417,291 | 2,266,368 | 150,923 | 7% |
Table 4 note
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As federal and provincial and territorial governments continue to loosen COVID-19 related restrictions through 2022-23, the RCMP continues to experience increases in operational tempo, contributing to the rise in the overall expenditures. Additionally, supply chain issues and the cost of inflation has seen a steep rise in the price of goods and services. It is observed that multiple standard objects had significant increases in year-over-year expenditures primarily for these reasons.
2.2.1 Variance - Personnel
The increase in expenditures by $208.0 million (or 12%) is attributed to higher pay expenditures for Regular Members. On August 6, 2021, the Government of Canada announced that it had reached an agreement with the National Police Federation (NPF) to establish the first ever collective agreement for RCMP members and reservists. As anticipated, with the ratification of the National Police Federation collective agreement the RCMP will experience material changes with regard to personnel expenditures in 2022-23 in comparison to 2021-22 (through the first three quarters of the fiscal year).
2.2.2 Variance - Transport and communications
The increase in expenditures by $14.7 million (or 15%) is mainly related to the increased operational tempo and rise in training and travel costs in 2022-23, which was partially offset by net decreases in transfers and relocations.
2.2.3 Variance - Information
The increase in expenditures by $0.3 million (or 25%) is mainly attributed to the increases in printing services for firearms communications regarding recent announcements, in addition to visual aid costs related to Constable Heidi Stevenson's memorial services in Nova Scotia.
2.2.4 Variance - Professional and special services
The increase in expenditures by $21.3 million (or 9%) is mainly related to increasing RCMP member health costs, and increases in legal services provided by the Department of Justice.
2.2.5 Variance - Utilities, materials and supplies
The increase in expenditures by $14.3 million (or 22%) is mainly due to the increase in the cost of fuel.
2.2.6 Variance - Acquisition of land, buildings and works
The increase in expenditures by $3.6 million (or 11%) is mainly due to an increase of real property projects in support of Contract Policing.
2.2.7 Variance - Acquisition machinery and equipment
The increase in expenditures by $19.8 million (or 30%) is mainly due to incremental costs for the acquisition of vehicles and software applications.
2.2.8 Variance - Other subsidies and payments
The decrease in expenditures by $7.1 million (or 13%) is primarily due to the timing of items being cleared from suspense accounts into other standard objects such as legal services, as well as decreased claims payments related to the Tiller Class Action Settlement. This decrease is partially offset by increases to the Capital Asset Disposal Credits for the organization.
2.2.9 Variance - Revenues and other reductions
The increase in Vote netted revenues by $105.4 million (or 22%) is primarily due to the timing differences in revenue collections, and increases related to the ratification of the National Police Federation collective agreement and its impacts on revenue collections.
3. Risks and uncertainties
The departmental Quarterly Financial Report reflects the results of the current fiscal period in relation to the Main Estimates.
The RCMP is funded through annual appropriations and is, 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 and for the administration of the RCMP's Pension Plan.
The RCMP's authorities are allocated in a number of discrete envelopes with varying sources of funds. A number of Special Purpose Allotments (SPAs) have been created over the years to manage the various programs and/or initiatives. As these SPAs cannot be used for purposes other than prescribed by Government, this limits the RCMP's ability to address in-year and long-term pressures.
The operational nature of the RCMP does not preclude the organization from being impacted by inflationary increases to cost of goods and services, and due to the size of the organization these types of increases will have significant impacts on expenditures.
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 claimants 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. On June 9, 2022, the Assessors' final report was released that set out their observations and recommendations stemming from their work in assessing claims. All Compensation awards to successful claimants have now been paid in accordance with the terms of the settlement.
4. Significant changes in relation to operations, personnel and programs
In this section
4.1 Operations
In comparison to the second quarter of 2021-22, certain activities resumed as a result of the loosened COVID-19 restrictions. The RCMP continues to assess the evolving circumstances of COVID-19 and is adjusting its operations accordingly. Additionally, supply chain issues and the increased cost of inflation have had a significant impact on the price of goods and services. This in turn has caused increases to overall expenditures.
4.2 Personnel
There has been no significant change in relation to personnel in the second quarter of 2022-23.
4.3 Programs
There has been no significant change in relation to programs in the second quarter of 2022-23.
Approval by senior officials
Approved by:
_____________________________
Brenda Lucki, Commissioner
Approved by:
_____________________________
Greg Hall, Acting Chief Financial Officer
Ottawa, Canada
5. Annex A: Statement of authorities (unaudited)
| Fiscal year 2022-23 | Fiscal year 2021-22 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending annex A note * | Used during the quarter ended | Year to date used at quarter-end | Total available for use for the year ending annex A note * | Used during the quarter ended | Year-to-date used at quarter-end | |
| Gross operating expenditures | 4,873,270 | 1,226,356 | 2,414,405 | 4,506,139 | 1,100,738 | 2,132,098 |
| Less: vote netted revenues | 1,771,565 | 383,839 | 582,645 | 1,779,699 | 256,719 | 477,225 |
| Vote 1 - Net operating expenditures | 3,101,705 | 842,517 | 1,831,760 | 2,726,440 | 844,019 | 1,654,873 |
| Vote 5 - Capital expenditures | 336,144 | 56,298 | 83,736 | 300,401 | 44,284 | 68,562 |
| Vote 10 - Grants and contributions | 428,273 | 145,412 | 290,607 | 425,273 | 182,499 | 303,054 |
| Pensions and other employee benefits - Members of the force | 455,479 | 88,288 | 176,131 | 247,036 | 75,567 | 183,221 |
| Contributions to employee benefit plans (public servants) | 66,826 | 16,466 | 32,932 | 96,226 | 24,056 | 48,113 |
| Pensions under the Royal Canadian Mounted Police Pension Continuation Act | 5,000 | 907 | 1,891 | 6,750 | 1,094 | 2,228 |
| Refunds of amounts credited to revenues in previous years | 0 | 6 | 8 | 0 | 45 | 68 |
| Proceeds from the disposal of crown assets under the Surplus Crown Assets Act | 295 | 226 | 226 | 6,330 | 3,513 | 6,249 |
| Court awards | 0 annex A note ** | 0 annex A note ** | 0 annex A note ** | 0 annex A note ** | 0 annex A note ** | 0 annex A note ** |
| Statutory authorities | 527,600 | 105,893 | 211,188 | 356,342 | 104,275 | 239,879 |
| Total budgetary authorities | 4,393,722 | 1,150,120 | 2,417,291 | 3,808,456 | 1,175,077 | 2,266,368 |
Annex A note
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6. Annex B: Budgetary expenditures by standard object (unaudited)
| Fiscal year 2022-23 | Fiscal year 2021-22 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending | Expended during the quarter ended | Year-to-date used at quarter-end | Planned expenditures for the year ending | Expended during the quarter ended | Year-to-date used at quarter-end | |
| Expenditures | ||||||
| Personnel | 3,906,864 | 1,007,720 | 1,985,791 | 3,440,860 | 883,602 | 1,777,747 |
| Transportation and communications | 230,931 | 55,049 | 112,822 | 218,586 | 44,612 | 98,102 |
| Information | 3,659 | 854 | 1,292 | 3,620 | 638 | 1,038 |
| Professional and special services | 567,273 | 131,439 | 269,294 | 533,386 | 142,428 | 248,028 |
| Rentals | 150,832 | 26,933 | 53,231 | 143,387 | 32,500 | 55,692 |
| Repair and maintenance | 119,398 | 19,879 | 35,179 | 111,549 | 20,340 | 38,439 |
| Utilities, materials and supplies | 167,836 | 41,618 | 80,213 | 158,740 | 31,730 | 65,953 |
| Acquisition of land, buildings and works | 115,219 | 20,382 | 35,248 | 110,780 | 21,010 | 31,627 |
| Acquisition of machinery and equipment | 317,913 | 49,632 | 85,424 | 289,535 | 35,652 | 65,596 |
| Transfer payments | 433,273 | 146,319 | 292,498 | 432,023 | 183,593 | 305,282 |
| Public debt charges | 624 | 146 | 292 | 504 | 154 | 308 |
| Other subsidies and payments | 151,465 | 33,988 | 48,652 | 145,184 | 35,537 | 55,781 |
| Total gross budgetary expenditures | 6,165,287 | 1,533,959 | 2,999,936 | 5,588,154 | 1,431,796 | 2,743,593 |
| Less revenues netted against expenditures | 0 | 0 | 0 | 0 | 0 | 0 |
| Vote netted revenues | 1,771,565 | 383,839 | 582,645 | 1,779,699 | 256,719 | 477,225 |
| Total gross budgetary expenditures | 1,771,565 | 383,839 | 582,645 | 1,779,699 | 256,719 | 477,225 |
| Total net budgetary expenditures | 4,393,722 | 1,150,120 | 2,417,291 | 3,808,455 | 1,175,077 | 2,266,368 |
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