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Quarterly Financial Report

Quarterly Financial Report - For the Quarter ended December 31st, 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) and (B).

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) and (B) 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 December 31st, $128.098 million in 2010-2011 and $124.058 million in 2011-2012.

    The overall decrease of $4.04 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 $5.6 million for the reimbursement of eligible paylist expenditures to support the requirement to make immediate payments for severance pay and termination benefits due to revisions to specified collective agreements
    • 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 $1 million received from Canadian Heritage to provide Canadians with free online access to authoritative content on Canadian history and civics, though the use, reproduction, adaptation and communication of the entire contents of the Dictionary of Canadian Biography via an intellectual property licensing agreement with the Universities of Toronto and Laval. This transfer has been allocated in the 2010-2011 Supplementary Estimates (B); and
    • a decrease of $901.8 thousand for Cost Containment Measures (Budget 2010).
2.2 Statement of Departmental Budgetary Expenditures by Standard Object

The year-to-date used amounts as at December 31st are comparable to those of the previous year for the same period except for the following variances:

A significant difference lies in « personnel » expenditures. This increase of $7.383 million ($60.680 million in 2010-2011 and $68.064 million in 2011-2012) is mainly explained by:

  • an increase of $5.013 million paid to LAC's employees for ratification on severance pay upon renewal of the collective agreement and;
  • an increase of $2.370 million in salary and wages expenditures resulting from negociated collective agreements as well as salary expenditures for the hiring of temporary employees at LAC.
In 2010-2011, several expenditures were related to the construction of a preservation facility to safeguard Canada's cellulose nitrate-based documentary heritage. This project was completed in 2010-2011, which explains the decrease in expenditures for the "Acquisitions of land, buildings and works" of $1.107 million ($1.204 million in 2010-2011 and $97.4 thousand in 2011-2012) and for the "Acquisition of machinery and equipment" of $1.069 million ($2.052 million in 2010-2011 and $982.5 thousand in 2011-2012).

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.

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, 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 and Chair, Heads of Federal Agencies
February 29, 2012

 

__________________________________________
Mark C. Melanson, CGA
Chief Financial Officer
February 27, 2012

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 December 31, 2011 Year to date used at quarter-end Total available for use for the year ending March 31, 2011 * Used during the quarter ended December 31, 2010 Year to date used at quarter-end
Vote 50 - Net Operating Expenditures 101,752,332 22,453,118 71,492,646 104,602,814 23,253,871 64,943,116
Vote 55 - Capital expenditures 10,350,000 97,452 97,452 11,997,971 1,219,162 2,238,910
Budgetary statutory authorities - Contributions to the Employee benefit plans and spending of proceeds from the disposal of surplus Crown Assets 11,955,849 3,060,362 8,937,695 11,497,663 2,804,034 8,431,683
Total Budgetary authorities 124,058,181 25,610,932 80,527,793 128,098,448 27,277,067 75,613,709
Non-budgetary authorities 0 0 0 0 0 0
Total authorities 124,058,181 25,610,932 80,527,793 128,098,448 27,277,067 75,613,709

* 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 December 31, 2011 Year to date used at quarter-end Planned expenditures for the year ending March 31, 2011 *
Expended during the quarter ended December 31, 2010 Year to date used at quarter-end
Expenditures:
Personnel 83,871,744 22,074,829 68,064,071 78,573,776 20,810,938 60,680,836
Transportation and communications 2,772,701 464,094 1,399,796 3,209,834 638,787 1,748,188
Information 888,017 72,052 113,778 1,175,463 27,849 79,319
Professional and special services 13,314,007 1,931,934 5,274,462 15,581,137 1,896,164 5,138,492
Rentals 2,135,206 156,698 1,474,867 2,008,003 154,259 1,127,581
Repair and maintenance 2,420,109 329,336 771,372 3,706,181 341,732 897,607
Utilities, materials and supplies 3,937,638 315,806 914,114 4,669,971 391,042 854,004
Acquisition of land, buildings and works 10,350,000 97,452 97,452 11,997,971 1,204,508 1,204,508
Acquisition of machinery and equipment 3,172,759 381,586 982,533 5,980,112 1,171,141 2,052,122
Transfer payments 1,746,000 27,523 1,195,651 1,746,000 0 1,080,733
Other subsidies and payments 0 -176,276 477,199 0 714,945 990,197
Total gross budgetary expenditures 124,608,181 25,675,034 80,765,295 128,648,448 27,351,365 75,853,587
Less Revenues netted against expenditures:            
Respendable revenue 550,000 64,102 237,502 550,000 74,298 239,878
 
Total Revenues netted against expenditures: 550,000 64,102 237,502 550,000 74,298 239,878
Total net budgetary expenditures 124,058,181 25,610,932 80,527,793 128,098,448 27,277,067 75,613,709

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

Quarterly Financial Report