Quarterly Financial Report for the Quarter Ended December 31, 2022
Statement outlining results, risks and significant changes in operations, personnel and program
On this page
- List of tables
- List of acronyms and abbreviations
- Introduction
- Highlights of fiscal quarter and fiscal year-to-date results
- Risks and uncertainties
- Significant changes in relation to operations, personnel and programs
- Annex A: Statement of Authorities (unaudited)
- Annex B: Budgetary expenditures by standard object (unaudited)
List of tables
- Table 1: Summary of fiscal quarter and fiscal year-to-date (in thousands of dollars)
- Table 2: Cumulative variance in authorities available for use in 2022-23 in comparison to 2021-22 (in thousands of dollars)
- Table 3: Year over year changes in authorities (in millions of dollars)
- Table 4: Expended by standard object at quarter end (in thousands of dollars)
- Table 5: Statement of Authorities (unaudited) (in thousands of dollars)
- Table 6: Departmental budgetary expenditures by standard object (unaudited) (in thousands of dollars)
List of acronyms and abbreviations
- CA
- Chartered Accountant
- COVID-19
- Coronavirus disease
- CPA
- Chartered Professional Accountant
- DNA
- Deoxyribonucleic acid
- RCMP
- Royal Canadian Mounted Police
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. 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. 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 and Supplementary Estimates (A) and (B). 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 the fiscal quarter and fiscal year-to-date results
For the period ending December 31, 2022, the RCMP had $4,837.3 million in total authorities available for use, which represents a decrease of $183.2 million or (4%) when compared at the same quarter in the previous year. The RCMP's authorities have decreased in Operating (Vote 1) by $594.9 million. This decrease is partially offset by increases in all other Votes and Statutory Authorities: Capital (Vote 5) increased by $71.4 million, Grant and Contributions (Vote 10) increased by $167.2 million and Statutory Authorities increased by $173.2 million.
The RCMP's expenditures were $3,564.8 million in the third quarter of the year, representing an increase of $95.4 million or 3% from the previous year's third quarter, as shown in Table 1.
| Authorities | 2022-23 authorities as at December 31, 2022 | 2021-22 authorities as at December 31, 2021 | Variance in authorities | Percentage | Expenditures during the quarter ended in December 31, 2022 | Expenditures during the quarter ended in December 31, 2021 | Variance in expenditures | Percentage |
|---|---|---|---|---|---|---|---|---|
| Vote 1- Net operating expenditures | 3,266,651 | 3,861,600 | (594,949) | (15%) | 2,641,983 | 2,572,319 | 69,664 | 3% |
| Vote 5 - Capital expenditures | 372,078 | 300,636 | 71,443 | 24% | 153,904 | 122,265 | 31,639 | 26% |
| Vote 10 - Grants and contributions | 668,925 | 501,740 | 167,186 | 33% | 435,908 | 412,763 | 23,145 | 6% |
| Budgetary statutory authorities | 529,657 | 356,489 | 173,168 | 49% | 332,986 | 362,067 | (29,081) | (8%) |
| Total authorities | 4,837,311 | 5,020,464 | (183,153) | (4%) | 3,564,781 | 3,469,414 | 95,367 | 3% |
Table 1 footnotes
- Table 1 footnote 1
-
Totals may not add due to rounding.
2.1 Statement of Authorities
For the period ending December 31, 2022, the RCMP has $4,837.3 million in total authorities available for use. This amount includes the Main Estimates, Supplementary Estimates (B), Operating Budget Carry Forward, Capital Budget Carry Forward, in-year adjustments including compensation adjustments, paylist reimbursement and proceeds from the disposal of Crown assets.
As illustrated in Table 2 below, total authorities available for use as at December 31st, 2022 decreased by $183.2 million from the third quarter of fiscal 2021-22.
| Based on the end of the third quarter (December) | Total authorities available for use | Year over year variance | ||
|---|---|---|---|---|
| 2022-23 | 2021-22 | Authorities | Percentage | |
| Gross operating expenditures | 5,038,215 | 5,641,299 | (603,083) | (11%) |
| Less: Vote netted revenues | 1,771,565 | 1,779,699 | (8,134) | (0%) |
| Vote 1 - Net operating expenditures | 3,266,651 | 3,861,600 | (594,949) | (15%) |
| Vote 5 - Capital expenditures | 372,078 | 300,636 | 71,443 | 24% |
| Vote 10 - Grants and contributions | 668,925 | 501,740 | 167,186 | 33% |
| Total voted authorities | 4,307,654 | 4,663,975 | (356,321) | (8%) |
| Pensions and other employee benefits - Members of the Force | 456,145 | 247,036 | 209,109 | 85% |
| Contributions to employee benefit plans (public servants) | 68,254 | 96,248 | (27,994) | (29%) |
| 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 | 257 | 6,455 | (6,198) | (96%) |
| Statutory authorities | 529,657 | 356,489 | 173,168 | 49% |
| Total budgetary authorities | 4,837,311 | 5,020,464 | (183,153) | (4%) |
Table 2 footnotes
- Table 2 footnote 1
-
Totals may not add due to rounding.
The decrease of $183.2 million in the year over year authorities available for use in the third quarter of 2022-23, is mainly related to the reduction of $1,076.2 million of in-year and retroactive compensation adjustments received in the third quarter 2021-22 in support of the first ever National Police Federation collective agreement for RCMP members and reservists.
The decrease of $1,076.2 million, is partially offset by year over year increases of $794.5 million in the 2022-23 Main Estimates and $77.6 million in the 2022-23 Supplementary Estimates as well as, increased Capital Budget Carry Forward funding of $25.0 million which is partially offset by a reduction of $6.3 million in the proceeds from disposal of Crown assets.
The 2022-23 Main Estimates increase of $794.5 million, is mainly due to: funding to compensate members of the RCMP for injuries received in the performance of duty ($230.3 million), compensation adjustments in support of the ongoing incremental salary costs associated with the first ever National Police Federation collective agreement for RCMP members and reservists ($218.9 million excluding Employee Benefit Plan), and funding to stabilize and strengthen RCMP core operations ($74.0 million excluding Employee Benefit Plan).
The increase in the Supplementary Estimates of $77.6 million is mainly due to funding for retroactive contribution agreements related to Firearms Act with the province of Quebec.
| 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 Employee Benefit Plan 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 previously 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 | |
| Supplementary estimates "A" year over year changes | (230.3) |
| Supplementary estimates "B" year over year changes | 307.9 |
| Sub-Total supplementary estimates changes | 77.6 |
| In-year changes | |
| Compensation allocation change over prior year | (1,076.2) |
| Proceeds from disposal of Crown assets | (6.3) |
| Capital budget carry forward change over prior year | 25.0 |
| Operational budget carry forward change over prior year | 1.2 |
| Pension administration employee benefits | 0.9 |
| Paylist reimbursement change over prior year | 0.1 |
| Sub-total in year changes | (1,055.3) |
| Total year-over-year changes | (183.2) |
Table 3 footnotes
- Table 3 footnote 1
-
Amounts displayed in this table represent planned changes to funding profiles, as well as variances due to the timing the authorities are granted by Parliament. As such, the negative amounts do not necessarily represent reductions in program spending. The sunsetting programs are up for renewal and do not represent the cancelling of the programs. Totals may not add due to rounding.
For more information on the authority changes that affect the RCMP, we would direct the reader to the RCMP's 2022-23 Main Estimates and 2022-2023 Supplementary Estimates “B”.
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 third quarter 2022-23 were $95.4 million (or 3%) higher than the previous year. This variance is primarily the result of an increase in gross budgetary expenditures of $374.6 million (or 9%), which was offset by an increase in vote netted revenues of $279.3 million (or 33%) from the previous year.
| standard objects | 2022-23 | 2021-22 | Variance | Percentage |
|---|---|---|---|---|
| Personnel | 3,047,170 | 2,813,937 | 233,233 | 8% |
| Transportation and communications | 176,794 | 146,763 | 30,031 | 20% |
| Information | 2,489 | 1,800 | 689 | 38% |
| Professional and special services | 439,260 | 411,938 | 27,322 | 7% |
| Rentals | 106,985 | 111,129 | (4,144) | (4%) |
| Repair and maintenance | 61,124 | 59,934 | 1,190 | 2% |
| Utilities, materials and supplies | 125,829 | 102,951 | 22,878 | 22% |
| Acquisition of land, buildings and works | 59,061 | 49,148 | 9,913 | 20% |
| Acquisition of machinery and equipment | 154,296 | 113,588 | 40,708 | 36% |
| Transfer payments | 438,627 | 416,048 | 22,579 | 5% |
| Public debt charges | 437 | 463 | (26) | (6%) |
| Other subsidies and payments | 68,212 | 77,965 | (9,753) | (13%) |
| Total gross budgetary expenditures | 4,680,284 | 4,305,664 | 374,620 | 9% |
| Less: Revenues and other reductions | 1,115,503 | 836,250 | 279,253 | 33% |
| Total net budgetary expenditures | 3,564,781 | 3,469,414 | 95,367 | 3% |
Table 4 footnotes
- Table 4 footnote 1
-
Totals may not add due to rounding.
- Table 4 footnote 2
-
The gross budgetary expenditures represent all RCMP programs and are not directly correlated to revenue trends as revenues are primarily related to the RCMP contract policing activities.
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 activity, 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 the above noted reasons and as seen below.
2.2.1 Variance - Personnel
The increase in expenditures by $233.2 million (or 8%) is attributed to higher pay expenditures for regular members. On August 6th, 2021, the Government of Canada announced that it had reached an agreement with the National Police Federation 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 has been experiencing material changes with regard to personnel expenditures through the first three quarters of the fiscal year 2022-23 in comparison to 2021-22.
2.2.2 Variance – Transport and communications
The increase in expenditures by $30.0 million (or 20%) is mainly related to the increased operational activity 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 $0.69 million (or 38%) is mainly attributed to the increases in printing services for firearms communications regarding recent announcements and increase in the use of electronic publications.
2.2.4 Variance - Professional and special services
The increase in expenditures by $27.3 million (or 7%) is mainly related to increasing RCMP member health costs, increases in training and education, and increases in legal services due to timing of invoice payments as compared to the same period last year.
2.2.5 Variance - Utilities, materials and supplies
The increase in expenditures by $22.9 million (or 22%) is mainly due to the increase in the cost of fuel and utilities as a result of inflation.
2.2.6 Variance - Acquisition of land, buildings and works
The increase in expenditures by $9.9 million (or 20%) 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 $40.7 million (or 36%) is mainly due to incremental costs for the acquisition of vehicles, software applications, office and computer equipment and radio equipment.
2.2.8 Variance – Transfer payments
The increase in expenditures by $22.6 million (or 5%) is primarily related to an increase in disability pension payments under the Grant to compensate members of the RCMP for injuries received in the performance of duty.
2.2.9 Variance - Other subsidies and payments
The decrease in expenditures by $9.8 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 changes to the Capital Asset Disposal Credits for the organization.
2.2.10 Variance -Revenues and other reductions
The increase in Vote netted revenues by $279.3 million (or 33%) is primarily 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 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 vote netted revenue authorities to bill Parliamentary Protective Service 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 have been created over the years to manage the various programs and/or initiatives. As these Special Purpose Allotments 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 is 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 (for example 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
4.1 Operations
In comparison to the third 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
Subsequent to the end of the second quarter, the following changes to the senior ranks of the department have occurred:
Kathy Thompson, previously the Executive Vice-President for the Public Health Agency of Canada became the Chief Administrative Officer for the Royal Canadian Mounted Police.
Samantha Hazen, previously the Assistant Deputy Minister and Chief Financial Officer for Shared Services Canada became the Chief Financial Officer for the Royal Canadian Mounted Police.
4.3 Programs
There has been no significant change in relation to programs in the third quarter of 2022-23.
4.4 Approved by senior officials
Approved by:
_____________________________
Brenda Lucki, Commissioner
Approved by:
_____________________________
Samantha Hazen, CPA, CA, Chief Financial Officer
Ottawa, Canada
Annex A: Statement of Authorities (unaudited)
| Fiscal year 2022-23 | Fiscal year 2021-22 | |||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2023 table 5 footnote 1 | Used during the quarter ended December 31, 2022 | Year to date used at quarter-end | Total available for use for the year ending March 31, 2022 table 5 footnote 1 | Used during the quarter ended December 31, 2021 | Year-to-date used at quarter-end | |
| Gross operating expenditures | 5,038,215 | 1,343,081 | 3,757,486 | 5,641,299 | 1,276,471 | 3,408,569 |
| Less: vote netted revenues | 1,771,565 | 532,858 | 1,115,503 | 1,779,699 | 359,025 | 836,250 |
| Vote 1 - Net operating expenditures | 3,266,651 | 810,223 | 2,641,983 | 3,861,600 | 917,446 | 2,572,319 |
| Vote 5 - Capital expenditures | 372,078 | 70,168 | 153,904 | 300,636 | 53,703 | 122,265 |
| Vote 10 - Grants and contributions | 668,925 | 145,301 | 435,908 | 501,740 | 109,709 | 412,763 |
| Pensions and other employee benefits - Members of the Force | 456,145 | 104,499 | 280,630 | 247,036 | 97,069 | 280,290 |
| Contributions to employee benefit plans (public servants) | 68,254 | 16,467 | 49,399 | 96,248 | 24,057 | 72,170 |
| Pensions under the Royal Canadian Mounted Police Pension Continuation Act | 5,000 | 828 | 2,719 | 6,750 | 1,056 | 3,284 |
| Refunds of amounts credited to revenues in previous years | 0 | 4 | 12 | 0 | 6 | 74 |
| Proceeds from the disposal of Crown assets under the Surplus Crown Assets Act | 257 | 0 | 226 | 6,455 | 0 | 6,249 |
| Court awards | ||||||
| Statutory authorities | 529,657 | 121,798 | 332,986 | 356,489 | 122,188 | 362,067 |
| Total budgetary authorities | 4,837,311 | 1,147,490 | 3,564,781 | 5,020,465 | 1,203,046 | 3,469,414 |
Table 5 footnotes
- Table 5 footnote 1
-
Includes only authorities available for use and granted by Parliament at quarter-end as well as a statutory authority for proceeds from the disposal of Crown assets.
Annex B: Budgetary expenditures by standard object (unaudited)
| Fiscal year 2022-23 | Fiscal year 2021-22 | |||||
|---|---|---|---|---|---|---|
| Planned expenditures for the year ending March 31, 2023 | Expended during the quarter ended December 31, 2022 | Year-to-date used at quarter-end | Planned expenditures for the year ending March 31, 2022 | Expended during the quarter ended December 31, 2021 | Year-to-date used at quarter-end | |
| Expenditures | ||||||
| Personnel | 3,972,464 | 1,061,379 | 3,047,170 | 4,574,738 | 1,036,190 | 2,813,937 |
| Transportation and communications | 246,680 | 63,972 | 176,794 | 218,805 | 48,661 | 146,763 |
| Information | 3,907 | 1,197 | 2,489 | 3,624 | 762 | 1,800 |
| Professional and special services | 607,022 | 169,966 | 439,260 | 533,915 | 163,910 | 411,938 |
| Rentals | 161,119 | 53,754 | 106,985 | 143,530 | 55,437 | 111,129 |
| Repair and maintenance | 128,995 | 25,945 | 61,124 | 111,655 | 21,495 | 59,934 |
| Utilities, materials and supplies | 179,275 | 45,616 | 125,829 | 158,899 | 36,998 | 102,951 |
| Acquisition of land, buildings and works | 127,757 | 23,813 | 59,061 | 110,871 | 17,521 | 49,148 |
| Acquisition of machinery and equipment | 345,222 | 68,872 | 154,296 | 289,804 | 47,992 | 113,588 |
| Transfer payments | 673,925 | 146,129 | 438,627 | 508,490 | 110,766 | 416,048 |
| Public debt charges | 667 | 145 | 437 | 504 | 155 | 463 |
| Other subsidies and payments | 161,843 | 19,560 | 68,212 | 145,329 | 22,184 | 77,965 |
| Total gross budgetary expenditures | 6,608,876 | 1,680,348 | 4,680,284 | 6,800,164 | 1,562,071 | 4,305,664 |
| Less revenues netted against expenditures | 0 | 0 | 0 | 0 | 0 | 0 |
| Vote netted revenues | 1,771,565 | 532,858 | 1,115,503 | 1,779,699 | 359,025 | 836,250 |
| Total revenues netted against expenditures | 1,771,565 | 532,858 | 1,115,503 | 1,779,699 | 359,025 | 836,250 |
| Total net budgetary expenditures | 4,837,311 | 1,147,490 | 3,564,781 | 5,020,465 | 1,203,046 | 3,469,414 |
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