Library and Archives Canada – Quarterly Financial Report

For the quarter ended September 30, 2016

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

1. Introduction

This quarterly report has been prepared by Library and Archives Canada (LAC) as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board. This quarterly report should be read in conjunction with the 2016-2017 Main Estimates and Supplementary Estimates (A).

This quarterly report has not been subject to an independent audit or review.

1.1 Library and Archives Canada's mandate

Library and Archives Canada is a departmental agency within the Canadian Heritage Portfolio. Created in 2004 under the Library and Archives of Canada Act, its mandate is as follows:

• to preserve the documentary heritage of Canada for the benefit of present and future generations;
• to be a source of enduring knowledge accessible to all, contributing to the cultural, social and economic advancement of Canada as a free and democratic society;
• to facilitate in Canada co-operation among communities involved in the acquisition, preservation and diffusion of knowledge; and
• to serve as the continuing memory of the Government of Canada and its institutions.

1.2 Basis of presentation

This quarterly report has been prepared by LAC using an expenditure basis of accounting. The accompanying Statement of Authorities includes the spending authorities granted by Parliament and those used by LAC, consistent with the Main Estimates and Supplementary Estimates (A) for the 2016-2017 fiscal year. It has been prepared using a special-purpose financial reporting framework designed to meet financial information needs regarding the use of spending authorities.

The authority of Parliament is required before monies 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

LAC uses the full accrual method of accounting to prepare and present its annual departmental financial statements that are part of the departmental performance reporting process. However, the spending authorities voted by Parliament are still prepared on an expenditure basis.

2. Highlights of fiscal quarter and fiscal year to date (YTD) results

2.1 Statement of Authorities

As reflected in the Statement of Authorities below, total authorities available for use as of September 30 are $121.6 million in 2016-2017, and $96.7 million in 2015-2016. The following table presents the detailed list of authorities by fiscal year:

Table 1: Statement of Authorities

(in dollars)

For each Authority (Vote/Statutory), this table indicates the authority code, description of vote or authority, and the dollar figure, for the quarters ended September 30, 2016, and September 30, 2015.

The overall increase of $24.8 million results from the following:

• An increase of $23.9 million further to a government decision to transfer permanent funds from Public Services and Procurement Canada (PSPC), so as to consolidate and transfer administration of our special-purpose storage facilities, while supporting our long-term infrastructure strategy. As of 2016-2017, LAC is responsible for costs associated with the management and maintenance of its special-purpose storage facilities, previously under the responsibility of PSPC;
• An increase of $1.0 million in operating budget carry-forward and capital budget carry-forward.

In addition, revenue credited to the vote decreased by $1.2 million. This decrease was due to the fact that the interdepartmental memorandum of understanding between LAC and Aboriginal Affairs and Northern Development Canada (aimed at providing the Truth and Reconciliation Commission of Canada with all government records on residential schools under the custody and control of LAC) ended on March 31, 2016. The revenue credited to the vote authority had been granted to LAC to cover 2015-2016 expenditures.

2.2 Statement of departmental budgetary expenditures by standard object

As presented in the Statement of departmental budgetary expenditures by standard object, the year-to-date expenditures total $52.1 million as of September 30, 2016, and $42.9 million as of September 30, 2015. The total increase of $9.2 million is mainly explained by:

• An increase of $6.1 million ($6.4 million in 2016-2017 compared with $0.3 million in 2015-2016) in “Other Subsidies and Payments” expenditures, as a result of expenditures incurred for payments in lieu of taxes payable to PSPC for our special-purpose buildings, previously under the responsibility of PSPC.
• An increase of $2.2 million ($2.3 million in 2016-2017 compared with $0.1 million in 2015-2016) in expenditures for “Repair and Maintenance” attributable to expenditures incurred for the management and maintenance of our special-purpose buildings, previously under the responsibility of PSPC.
• An increase of $1.3 million ($1.3 million in 2016-2017 compared with $0.01 million in 2015-2016) in “Transfer Payments” expenditures associated with the Documentary Heritage Communities Program, which were incurred during the first quarter of 2016-2017, but later in the 2015-2016 year.
• A decrease of $1.1 million ($37.0 million in 2016-2017 compared with $38.1 million in 2015-2016) in “Personnel” expenditures, attributable to expenditures incurred in 2015-2016 with regard to the interdepartmental memorandum of understanding between LAC and Aboriginal Affairs and Northern Development Canada (aimed at providing the Truth and Reconciliation Commission of Canada with all government records on residential schools under the custody and control of LAC). This memorandum of understanding ended on March 31, 2016.

3. Risks and uncertainties

LAC has formalized its practices and developed a corporate risk profile in order to identify strategic and corporate risks, evaluate their potential consequences and impacts, and develop measures to reduce these risks. In its risk profile, LAC targets four strategic risks that may have a direct impact on the fulfillment of its mandate. These risks, the description of their context, and the strategies put forth to mitigate them are presented in the section that follows.

Key risks

1. Risk that Canadian documentary heritage of national interest is not acquired
Given the ever-increasing quantity of information created via new technologies and the speed at which this information can disappear, LAC runs the risk of not acquiring all Canadian documentary heritage of national interest. The scope of its mandate is such that LAC may be unable to identify all the content that should be acquired.

2. Risk that documentary heritage is not preserved
LAC must ensure the integrity and long-term accessibility of the documentary resources acquired. The integrity of the material can be compromised by a variety of external risk factors, such as deterioration over time and with use, and the obsolescence of the technologies needed to consult a format that is outdated. The loss of technical expertise and the lack of space providing adequate storage conditions are considered internal risk factors.

3. Risk that documentary heritage is not accessible
Despite technological advances, much of LAC's collection is on paper or other analogue media. The time and effort needed to process the collection to make it discoverable and make it available online are such that LAC must target its efforts to quickly provide access to the material that is of greatest interest to its clients.

4. Risk that Government of Canada institutions do not use regulatory instruments and recordkeeping tools developed by LAC
The quantity of information created in the government on a daily basis poses a considerable challenge when it comes to identifying records that have business, legal or historical value. Proactive management of government information is therefore essential; it ensures the government's accountability and the best use of information.

The strategic risks translate into corporate risks that may have an impact on LAC’s operations. Corporate risks are identified and assessed by LAC’s senior officials and managers. They are reviewed in depth every three years and they are validated every year to maintain relevance.

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

As stated in our 2016–2019 Three-Year Plan, to manage service delivery and enhance our public profile, we have established priorities focused on high-quality services provided by expert, professional staff and supported by networking partnerships:

1. Library and Archives Canada is an institution fully dedicated to serving all its clients: government institutions, donors, academics, researchers, archivists, librarians, students, genealogists and the general public.
2. Library and Archives Canada is an institution which, drawing on the strength of its staff, is at the leading edge of archival and library science and new technologies.
3. Library and Archives Canada is an institution proactively engaged with national and international networks in an open and inclusive way.
4. Library and Archives Canada is an institution with prominent public visibility that highlights the value of its collection and services.

Approval by Senior Officials

Table 2: Statement of Authorities (unaudited)

(in dollars)

This table indicates dollar figures for authorities for the fiscal year 2016-2017, including the total available for use for the year ending March 31, 2017; the total used during the quarter ended September 30, 2016; and the total year to date used at quarter-end. Displayed are the dollar figures for fiscal year 2015-2016, including the total available for use for the year ending March 31, 2016; the total used during the quarter ended September 30, 2015; and the total year to date used at quarter-end.

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

Table 3: Departmental budgetary expenditures by standard object (unaudited)

(in dollars)

This table indicates departmental budgetary expenditures. Displayed are the dollar figures for expenditures by standard object; total gross budgetary expenditures; total gross budgetary expenditures less revenues netted against expenditures; and total net budgetary expenditures for fiscal year 2016-2017; numbers are arranged by total planned expenditures for the year ending March 31, 2017; the total expended during the quarter ended September 30, 2016; and the total year to date used at quarter-end.

Displayed are the dollar figures for expenditures by standard object; total gross budgetary expenditures; total gross budgetary expenditures less revenues netted against expenditures; and total net budgetary expenditures for fiscal year 2015-2016; numbers are arranged by total planned expenditures for the year ending March 31, 2016; the total expended during the quarter ended September 30, 2015; and the total year to date used at quarter-end.

• Table 3 - text version

  Departmental Budgetary Expenditures by Standard Object (unaudited)
  (in dollars)

  Expenditures:

  Personnel
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 68,243,232
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 18,611,579
  Fiscal year 2016-2017: Year to date used at quarter-end: 39,967,876
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 68,330,703
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 19,151,046
  Fiscal year 2015-2016: Year to date used at quarter-end: 38,137,877

  Transportation and communications
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017:1,210,245
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 227,915
  Fiscal year 2016-2017: Year to date used at quarter-end: 436,771
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 1,756,624
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 221,398
  Fiscal year 2015-2016: Year to date used at quarter-end: 398,720

  Information
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 160,106
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 169,610
  Fiscal year 2016-2017: Year to date used at quarter-end: 233,508
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 292,771
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 29,575
  Fiscal year 2015-2016: Year to date used at quarter-end: 55,571

  Professional and special services
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 28,030,538
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 1,206,408
  Fiscal year 2016-2017: Year to date used at quarter-end: 2,107,195
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 15,516,845
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 1,459,295
  Fiscal year 2015-2016: Year to date used at quarter-end: 2,013,857

  Rentals
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 2,705,725
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 754,467
  Fiscal year 2016-2017: Year to date used at quarter-end: 1,794,342
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 2,955,015
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 600,761
  Fiscal year 2015-2016: Year to date used at quarter-end: 1,613,936

  Repair and maintenance
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 12,569,266
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 1,037,584
  Fiscal year 2016-2017: Year to date used at quarter-end: 2,308,542
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 1,756,624
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 106,541
  Fiscal year 2015-2016: Year to date used at quarter-end: 120,977

  Utilities, materials and supplies
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 1,244,863
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 176,859
  Fiscal year 2016-2017: Year to date used at quarter-end: 350,307
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 3,247,785
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 73,411
  Fiscal year 2015-2016: Year to date used at quarter-end: 214,963

  Acquisition of land, buildings and works
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 0
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 0
  Fiscal year 2016-2017: Year to date used at quarter-end: 0
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 830,000
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 0
  Fiscal year 2015-2016: Year to date used at quarter-end: 0

  Acquisition of machinery and equipment
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 434,555
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 245,889
  Fiscal year 2016-2017: Year to date used at quarter-end: 274,122
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 3,513,247
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 371,451
  Fiscal year 2015-2016: Year to date used at quarter-end: 565,748
  
  Transfer payments
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 1,536,000
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 110,819
  Fiscal year 2016-2017: Year to date used at quarter-end: 1,305,134
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 36,000
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 11,478
  Fiscal year 2015-2016: Year to date used at quarter-end: 11,478

  Other subsidies and payments
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 6,014,673
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 5,836,803
  Fiscal year 2016-2017: Year to date used at quarter-end: 6,404,322
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 292,771
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 80,302
  Fiscal year 2015-2016: Year to date used at quarter-end: 291,062
  
  Total gross budgetary expenditures
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 122,149,203
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 28,377,933
  Fiscal year 2016-2017: Year to date used at quarter-end: 52,182,119
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 98,528,385
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 22,105,258
  Fiscal year 2015-2016: Year to date used at quarter-end: 43,424,189

  Less Revenues netted against expenditures:
  
  Respendable revenue
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 550,000
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 44,003
  Fiscal year 2016-2017: Year to date used at quarter-end: 72,684
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 1,779,000
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 511,080
  Fiscal year 2015-2016: Year to date used at quarter-end: 550,715

  Total Revenues netted against expenditures:
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 550,000 
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 44,003
  Fiscal year 2016-2017: Year to date used at quarter-end: 72,684
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 1,779,000
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 511,080
  Fiscal year 2015-2016: Year to date used at quarter-end: 550,715

  Total net budgetary expenditures
  Fiscal year 2016-2017: Planned expenditures for the year ending March 31, 2017: 121,599,203
  Fiscal year 2016-2017: Expended during the quarter ended September 30, 2016: 28,333,930
  Fiscal year 2016-2017: Year to date used at quarter-end: 52,109,435
  Fiscal year 2015-2016: Planned expenditures for the year ending March 31, 2016: 96,749,385
  Fiscal year 2015-2016: Expended during the quarter ended September 30, 2015: 21,594,178
  Fiscal year 2015-2016: Year to date used at quarter-end: 42,873,474