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Quarterly Financial Report

Quarterly Financial Report - For the Quarter ended September 30th, 2011

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

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 the Treasury Board. This quarterly report should be read in conjunction with the 2011-12 Main Estimates and Supplementary Estimates (A).

The quarterly report has not been subject to an external audit or review.

  • 1.1 Library and Archives Canada’s Mandate

    Library and Archives Canada is a departmental organization within the Department of Canadian Heritage. The Library and Archives of Canada Act came into force in 2004 and created LAC with a mandate to:

    • preserve the documentary heritage of Canada for the benefit of present and future generations;
    • serve as a source of enduring knowledge accessible to all, contributing to the cultural, social, and economic advancement of Canada as a free and democratic society;
    • facilitate in Canada cooperation among the communities involved in the acquisition, preservation, and diffusion of knowledge; and
    • 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 LAC's spending authorities granted by Parliament and those used by the department, consistent with the Main Estimates and Supplementary Estimates (A) for the 2011-2012 fiscal year. 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 moneys 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 remain on an expenditure basis.

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

  • 2.1 Statement of Authorities

    The permanent funding of Library and Archives Canada (LAC) has remained constant at approximately $100 million per fiscal year over the past four years. While LAC has experienced growth in permanent funding for items such as supporting our increased workload resulting from the implementation of the Federal Accountability Act and collective bargaining funding, LAC has also contributed on a permanent basis to government-wide initiatives such as the strategic review exercise to reallocate spending to higher priorities of government, and therefore permanent funding has remained fairly constant. In addition to its permanent funding, LAC has received, in recent fiscal years, funding for temporary projects which explains the increased level of total authorities available for use as at September 30th, $125.702 million in 2010-2011 and $116,723 million in 2011-2012.

    The overall decrease of $8.98 million of total authorities between the two fiscal years, as reflected in the attached Statement of Authorities, is mainly due to the following:

    • An increase of $1.2 million for the conversion of a facility in Gatineau, Quebec as a Collection Storage Facility with a high density shelving system;
    • an increase of $539 thousand for Employee Benefits Plan (statutory);
    • a decrease of $6.4 million for the construction of a preservation facility to safeguard Canada's cellulose nitrate-based documentary heritage;
    • a decrease of $1.6 million to support the modernization of federal laboratories (horizontal item) (Budget 2009);
    • a decrease of $1.07 million received as Operating Budget Carry Forward;
    • a decrease of $901.8 thousand for Cost Containment Measures (Budget 2010); and
    • a decrease of $445.8 thousand for a transfer from Canadian Heritage for film acquisition and preservation activities under the Preservation and Access Component of the Canadian Feature Film Policy which was granted in Supplementary Estimates (A) for 2010-11 fiscal year but will be submitted for approval in the Supplementary Estimates (B) for 2011-12 fiscal year.

2.2 Statement of Departmental Budgetary Expenditures by Standard Object

The year-to-date used amounts as at September 30th are comparable to those of the previous year for the same period. However, a significant difference lies in "personnel" expenditures. This increase of $6.1 million ($39.869 million in 2010-2011 and $45.989 million in 2011-2012) is mainly explained by:

  • an increase of $4.3 million paid to LAC's employees for ratification on severance pay upon renewal of the collective agreement and;
  • an increase of $1.8 million in salary and wages expenditures resulting from negociated collective agreements as well as salary expenditures for the hiring of temporary employees at LAC.

3. Risks and Uncertainties

There are four strategic risks associated with LAC's mandate and strategic outcomes: the risk that essential documentary heritage is not acquired; the risk that documentary heritage is not preserved for future generations; the risk that documentary heritage is not accessible to Canadians; and the risk that Government of Canada information resources are not managed properly. Another operational risk is that following the emergence of new technologies, LAC faces an overabundance of documentary heritage. Modernization initiated by LAC in 2009 is a response to these strategic risks, through which LAC is reviewing all aspects of its business to establish clear policy direction, effective governance, and deliberative decision-making processes.

LAC is financed mainly through parliamentary authorities for its operating expenditures, capital expenditures and grants and contributions expenditures. LAC is also partially funded through specified types of respendable revenue. However, the amount of such revenue is negligible.

This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates and Supplementary Estimates (A) for which full supply was released on June 27, 2011.

Budget 2010 announced that the operating budgets of departments would be frozen at their 2010-2011 levels for the fiscal years 2011-2012 and 2012-2013. Considering that LAC's most significant expenditures are for its personnel, which represents 83% of its entire total operating budget, the announcement to the effect that departments would not receive funding for wage and salary increases resulting from collective agreements, has an important impact on the use of LAC's operating vote. Therefore, because LAC must cover the salary increases of its employees, the organization must use part of its operating vote to fund these increases. LAC has estimated the impact of this government-wide initiative to be approximately $1 million per year and aggregating cumulatively over the next few years.

The modernization initiative will enable LAC to review and implement innovative and realistic processes to achieve its mandate, assess and acquire the documentary heritage regardless of the format, to preserve and to ensure access. In conjunction with this initiative, LAC has implemented a strategic planning initiative to realign resources to meet its mandate and the challenges posed by the emergence of digital technology. The strategy that LAC will adopt will take into account the demographic and economic context of the organization and will take advantage of innovative ways of doing business, such as collaborative arrangements.

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

LAC's modernization initiative seeks to harness the potential of the digital age to serve all Canadians. LAC is currently updating its organizational structure to better respond to the digital environment of the twenty-first century and support the achievement of its strategic priorities.

5. Approval by Senior Officials

Approved by :

 

__________________________________________________________________
Daniel J. Caron, Ph. D.
Deputy Head and Librarian and Archivist of Canada
November 25, 2011

 

__________________________________________
Mark C. Melanson, CGA
Chief Financial Officer
November 24, 2011

Statement of Authorities (unaudited)
(in dollars)
  Fiscal year 2011-2012 Fiscal year 2010-2011
Total available for use for the year ending March 31, 2012 * Used during the quarter ended September 30, 2011 Year to date used at quarter-end Total available for use for the year ending March 31, 2011 * Used during the quarter ended September 30, 2010 Year to date used at quarter-end
Vote 50 - Net Operating Expenditures 94,493,147 27,595,241 49,039,528 102,222,434 22,453,340 41,689,246
Vote 55 - Capital expenditures 10,350,000 0 0 11,997,971 997,550 1,019,748
Budgetary statutory authorities - Contributions to the Employee benefit plans and spending of proceeds from the disposal of surplus Crown Assets 11,880,352 2,938,666 5,877,333 11,481,642 2,823,615 5,627,649
Total Budgetary authorities 116,723,499 30,533,907 54,916,861 125,702,047 26,274,504 48,336,642
Non-budgetary authorities 0 0 0 0 0 0
Total authorities 116,723,499 30,533,907 54,916,861 125,702,047 26,274,504 48,336,642

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


Departmental budgetary expenditures by Standard Object (unaudited)
(in dollars)
  Fiscal year 2011-2012 Fiscal year 2010-2011
Planned expenditures for the year ending
March 31, 2012 *
Expended during the quarter ended
 September 30, 2011
Year to date used
at quarter-end
Planned expenditures for the year ending
March 31, 2011 *
Expended during the quarter ended
 September 30, 2010
Year to date used
at quarter-end
Expenditures:
Personnel 77,058,364 24,269,501 45,989,242 77,193,397 20,938,288 39,869,898
Transportation and communications 2,772,701 592,792 935,702 3,209,834 664,554 1,109,401
Information 888,017 35,547 41,726 1,175,463 34,258 51,470
Professional and special services 13,304,891 2,256,717 3,342,528 15,431,136 1,903,326 3,242,328
Rentals 2,097,457 649,575 1,318,169 1,999,992 328,366 973,322
Repair and maintenance 2,420,109 271,287 442,036 3,706,181 381,778 555,875
Utilities, materials and supplies 3,463,201 382,992 598,308 4,669,971 288,135 462,962
Acquisition of land, buildings and works 10,350,000 0 0 11,997,971 0 0
Acquisition of machinery and equipment 3,172,759 513,714 600,947 5,122,102 703,409 880,981
Transfer payments 1,746,000 1,168,128 1,168,128 1,746,000 1,080,733 1,080,733
Other subsidies and payments 0 471,527 653,475 0 37,398 275,252
Total gross budgetary expenditures 117,273,499 30,611,780 55,090,261 126,252,047 26,360,245 48,502,222
Less Revenues netted against expenditures:            
Respendable revenue 550,000 77,873 173,400 550,000 85,741 165,580
 
Total Revenues netted against expenditures: 550,000 77,873 173,400 550,000 85,741 165,580
Total net budgetary expenditures 116,723,499 30,533,907 54,916,861 125 702 047 26,274,504 48,336,642

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

Quarterly Financial Report