Quarterly Financial Report for the Quarter Ended September 30, 2019
Table of contents
- Introduction
- Highlights of fiscal quarter and fiscal year to date (YTD) results
- Risks and uncertainties
- Significant changes in relation to operations, personnel and programs
- Statement of Authorities (unaudited)
- Departmental budgetary expenditures by Standard Object (unaudited)
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. It should be read in conjunction with the 2019-20 Main Estimates. It has not been subject to an external audit or review nor has it been subject to the approval of the Audit Committee.
1.1 Authority, mandate and programs
The Canadian Institutes of Health Research (CIHR) is the Government of Canada's health research funding agency. It was created in June 2000 by the Canadian Institutes of Health Research Act with a mandate “to excel, according to internationally accepted standards of scientific excellence, in the creation of new knowledge and its translation into improved health for Canadians, more effective health services and products and a strengthened Canadian health care system.”
CIHR invests in high quality health research and health research personnel to help create and apply new knowledge that can improve health outcomes for Canadians, lead to innovative products and services that improve Canada's health care system, and create high quality employment and commercial opportunities. CIHR's Health Research Roadmap II: Capturing Innovation to Produce Better Health and Health Care for Canadians presents CIHR’s vision to capture excellence and accelerate health innovation via three strategic directions, including:
- Promoting excellence, creativity and breadth in health research and knowledge translation;
- Mobilizing health research for transformation and impact; and
- Achieving organizational excellence.
Further details on CIHR’s mandate and programs can be found in Part II of the Main Estimates and the Department Plan.
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 CIHR’s spending authorities granted by Parliament and those used by CIHR, consistent with the Main Estimates for the 2019-20 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 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.
CIHR 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 an expenditure basis.
2. Highlights of fiscal quarter and fiscal year to date (YTD) results
This quarterly financial report reflects the results of the current fiscal period in comparison to the authorities provided in the Main Estimates for fiscal year 2019-20, as well as budget adjustments approved by Treasury Board up to September 30, 2019.
2.1 Financial Highlights – Statement of Authorities (Refer to Section 5)
As of September 30, 2019, total authorities available for use for CIHR have increased by $33.3 million (2.9%) compared to September 30, 2018 as shown in the tables below. The increase to CIHR’s total authorities available is due to:
- $15.3 million increase due to adjustments in the amount of new funding in Budget 2018 to enhance support for health research and for Gairdner Foundation activities;
- $13.0 million increase announced in Budget 2018 for the Canada Research Chairs program;
- $4.1 million of new funding announced in Budget 2019 for Supporting Graduate Students Through Research Scholarships program;
- $3.0 million of new funding announced in Budget 2018 for research into Post-Traumatic Stress Injuries in Public Safety Personnel;
- $2.0 million of new funding announced in Budget 2019 for Paid Parental Leave for Student Researchers;
- $1.5 million increase in funding for retroactive salary increases;
- $1.1 million increase in the operating budget carryforward;
- $0.4 million decrease in funding due to various adjustments and contributions required by Central Agencies;
- $0.8 million decrease in net transfers from other government departments for specific programs and initiatives;
- $1.0 million decrease in funding to support Canadian Drugs and Substance Strategy;
- $1.1 million decrease due to a refund of Canada 150 Chairs Surplus; and
- $3.4 million decrease resulting from CIHR’s participation in tri-agency programs in collaboration with the Natural Sciences and Engineering Research Council (NSERC) and the Social Sciences and Humanities Research Council (SSHRC). Funding for these programs varies by fiscal year as CIHR is allocated funding following each distinct competition depending on the successful applicants’ alignment with CIHR’s health-related mandate. CIHR received less funds in 2019-20 for the Centres of Excellence for Commercialization and Research ($3.5 million) and slightly more for the Canada 150 Chairs ($0.1 million) programs.
Total authorities used as at September 30, 2019 have increased by $57.8 million (10.9%) as compared to the prior fiscal year mainly due to the grant payments towards the newly created programs mentioned above as well as increased personnel costs. CIHR has used 50.0% (46.4% in 2018-19) of its available authorities through the second quarter, a slight increase over previous year’s spending pattern. This is mainly due to the timing of payments made under the Canada Research Chairs, Canada First Research Excellence Fund, and Canada Excellence Research Chairs programs.
| 2019-20 | 2018-19 | Variance | ||||||
|---|---|---|---|---|---|---|---|---|
| Annual Authorities available | Cumulative Authorities used | % used | Annual Authorities available | Cumulative Authorities used | % used | (1) vs (3) | (2) vs (4) | |
| (1) | (2) | (3) | (4) | |||||
| Vote 1 - Operating Expenditures | 59,188 | 28,659 | 48.4% | 56,296 | 26,616 | 47.3% | 5.1% | 7.7% |
| Vote 5 - Grants | 1,113,975 | 557,988 | 50.1% | 1,084,432 | 502,770 | 46.4.% | 2.7% | 11.0% |
| Statutory Authorities | 6,829 | 3,403 | 49.8% | 5,936 | 2,834 | 47.7% | 15.0% | 20.1% |
| Total | 1,179,992 | 590,050 | 50.0% | 1,146,664 | 532,220 | 46.4% | 2.9% | 10.9% |
| 2019-20 | 2018-19 | Variance | ||||||
|---|---|---|---|---|---|---|---|---|
| Annual Authorities available | Q2 Authorities used | % used | Annual Authorities available | Q2 Authorities used | % used | (1) vs (3) | (2) vs (4) | |
| (1) | (2) | (3) | (4) | |||||
| Vote 1 - Operating Expenditures | 59,188 | 15,150 | 25.6% | 56,296 | 13,301 | 23.6% | 5.1% | 13.9% |
| Vote 5 - Grants | 1,113,975 | 360,865 | 32.4% | 1,084,432 | 314,511 | 29.0% | 2.7% | 14.7% |
| Statutory Authorities | 6,829 | 1,701 | 24.9% | 5,936 | 1,417 | 23.9% | 15.0% | 20.0% |
| Total | 1,179,992 | 377,716 | 32.0% | 1,146,664 | 329,229 | 28.7% | 2.9% | 14.7% |
Vote 1 – Operating Expenditures
Total authorities available for use for Vote 1 - Operating expenditures have increased by $2.9 million (5.1%) as at September 30, 2019 as compared to the prior fiscal year as a result of:
- $1.2 million increase due to adjustments in the amount of new funding in Budget 2018 to enhance support for health research and for Gairdner Foundation activities;
- $1.2 million increase in funding for retroactive salary increases;
- $1.1 million increase in the operating budget carryforward;
- $0.2 million of new funding announced in Budget 2018 for research into Post-Traumatic Stress Injuries in Public Safety Personnel;
- $0.2 million of new funding announced in Budget 2019 for Paid Parental Leave for Student Researchers; and
- $1.0 million decrease in operating costs due to a transfer to statutory authorities.
Actual year to date operating expenditures have increased by $2.0 million (7.7%) primarily due to increased Personnel costs, as well as less significant changes in other expenditure types, such as a new health research survey undertaken with Statistics Canada in support of the development of CIHR’s strategic plan.
Authorities used during the second quarter for Vote 1 – Operating Expenditures have increased by $1.8 million (13.9%) as compared to the prior fiscal year. This variance is primarily due to increased salary costs, a new health research survey undertaken with Statistics Canada in support of the development of CIHR’s strategic plan, and the timing of spring peer review meeting which were largely recorded in the first quarter of the previous year.
The percentage of Operating Expenditures authorities used through the second quarter of 2019-20 (48.4%) is approximately consistent with authorities used as at September 30th of the prior fiscal year (47.3%). This is consistent with management expectations given that the most significant type of expenditure in this vote are salary costs, which are distributed equally throughout the fiscal year.
Vote 5 – Grants
Authorities available for use for Vote 5 – Grants at September 30, 2019 are $1,114.0 million and include funding for the following transfer payment programs:
- $981.9 million – Grants for research projects and personnel support
- $43.8 million – Canada First Research Excellence Fund
- $25.3 million – Canada Graduate Scholarships
- $21.7 million – Networks of Centres of Excellence
- $13.2 million – Institute support grants
- $9.7 million – Centres of Excellence for Commercialization and Research
- $8.4 million – Vanier Canada Graduate Scholarships
- $4.2 million – Canada Excellence Research Chairs
- $3.7 million – Canada 150 Research Chairs
- $1.7 million – Business–Led Networks of Centres of Excellence
- $0.4 million – College and Community Innovation Program
Vote 5 – Grants authorities available for use increased by approximately $29.5 million (2.7%) through the second quarter as compared to the prior fiscal year quarter as a result of:
- $14.1 million increase due to adjustments in the amount of new funding in Budget 2018 to enhance support for health research and for Gairdner Foundation activities;
- $13.0 million increase announced in Budget 2018 for the Canada Research Chairs program;
- $4.1 million of new funding announced in Budget 2019 for Supporting Graduate Students Through Research Scholarships program;
- $2.8 million of new funding announced in Budget 2018 for Research into Post-Traumatic Stress Injuries in Public Safety Personnel;
- $1.8 million of new funding announced in Budget 2019 for Paid Parental Leave for Student Researchers;
- $0.8 million decrease in net transfers from other government departments for specific programs and initiatives;
- $1.0 million decrease in funding to support Canadian Drugs and Substance Strategy;
- $1.1 million decrease due to a refund of Canada 150 Chairs Surplus; and
- $3.4 million decrease resulting from CIHR’s participation in tri-agency programs in collaboration with the Natural Sciences and Engineering Research Council (NSERC) and the Social Sciences and Humanities Research Council (SSHRC). Funding for these programs varies by fiscal year as CIHR is allocated funding following each distinct competition depending on the successful applicants’ alignment with CIHR’s health-related mandate. CIHR received less funds in 2019-20 for the Centres of Excellence for Commercialization and Research ($3.5 million) and slightly more for the Canada 150 Chairs ($0.1 million) programs.
Year to date grant expenditures have increased by $55.2 million (11.0%) compared to the prior fiscal year due to increased grant payments resulting from the increased authorities available for use. The percentage of grant authorities used through the second quarter of 2019-20 (50.1%) increased slightly from authorities used at the end of the second quarter of the prior fiscal year (46.4%). This is mainly due to the timing of payments made under the Canada Research Chairs, Canada First Research Excellence Fund, and Canada Excellence Research Chairs programs.
Grant authorities used during the second quarter of 2019-20 have increased by $46.4 million (14.7%) compared to the prior fiscal year due to the increase in authorities available for use as well as the aforementioned timing of payments.
The percentage of Grants authorities used through the second quarter of 2019-20 (50.1%) has increased slightly from authorities used as at September 30th of the prior fiscal year (46.4%). As discussed above, this increase is mainly due to the timing of payments made under the Canada Research Chairs, Canada First Research Excellence Fund, and Canada Excellence Research Chairs programs. Overall spending as at September 30, 2019 is consistent with management expectations.
Statutory Authorities
Budgetary statutory authorities (representing CIHR’s contribution to employee benefit plans) available for use increased marginally year over year by $0.9 million (15.0%). The increase to CIHR’s statutory authorities available is due to:
- $0.6 million increase in funding of statutory items due to various adjustments and contributions required by Central Agencies; and
- $0.3 million increase in funding for benefits relating to retroactive salary increases.
Actual spending for statutory authorities through the second quarter of 2019-20 is 49.8% of the total available authorities for use for the year, which is consistent with management expectations given that this expenditure is distributed equally throughout the fiscal year.
2.2 Financial Highlights – Statement of Departmental Budgetary Expenditures by Standard Object (Refer to Section 6)
As of September 30, 2019, total authorities available for use by CIHR have increased by $33.3 million (2.9%) as compared to the prior fiscal year due to increased funding received. Total authorities used as at September 30, 2019 have increased by $57.8 million (10.9%) as compared to the prior fiscal year. These increases are reflected in Tables 2.2.1 and 2.2.2 (where expenditure types are re-grouped into three categories: Personnel, Other Operating Expenditures and Transfer Payments) for further analysis.
| 2019-20 | 2018-19 | Variance | ||||||
|---|---|---|---|---|---|---|---|---|
| Annual Authorities available | Cumulative Authorities used | % used | Annual Authorities available | Cumulative Authorities used | % used | (1) vs (3) | (2) vs (4) | |
| (1) | (2) | (3) | (4) | |||||
| Personnel | 52,391 | 26,279 | 50.2% | 44,566 | 24,028 | 53.9% | 17.6% | 9.4% |
| Other Operating Expenditures | 13,626 | 5,783 | 42.4% | 17,666 | 5,422 | 30.7% | -22.9% | 6.7% |
| Transfer Payments | 1,113,975 | 557,988 | 50.1% | 1,084,432 | 502,770 | 46.4% | 2.7% | 11.0% |
| Total | 1,179,992 | 590,050 | 50.0% | 1,146,664 | 532,220 | 46.4% | 2.9% | 10.9% |
| 2019-20 | 2018-19 | Variance | ||||||
|---|---|---|---|---|---|---|---|---|
| Annual Authorities available | Q2 Authorities used | % used | Annual Authorities available | Q2 Authorities used | % used | (1) vs (3) | (2) vs (4) | |
| (1) | (2) | (3) | (4) | |||||
| Personnel | 52,391 | 13,393 | 25.6% | 44,566 | 12,390 | 27.8% | 17.6% | 8.1% |
| Other Operating Expenditures | 13,626 | 3,458 | 25.4% | 17,666 | 2,328 | 13.2% | -22.9% | 48.5% |
| Transfer Payments | 1,113,975 | 360,865 | 32.4% | 1,084,432 | 314,511 | 29.0% | 2.7% | 14.7% |
| Total | 1,179,992 | 377,716 | 32.0% | 1,146,664 | 329,229 | 28.7% | 2.9% | 14.7% |
Personnel and Other Operating Expenditures
Authorities available for Personnel Expenditures for the period ended September 30, 2019 have increased by $7.8 million (17.6%) as compared to the prior year. Authorities available for Other Operating Expenditures have decreased by $4.0 million (-22.9%). These variances are due to:
- $1.5 million increase (Personnel) in funding for retroactive salary increases;
- $0.1 million increase (Personnel) and $1.1 increase million (Other) of new funding announced in Budget 2018 in support of fundamental health research;
- $1.0 million increase (Personnel) and $0.1 million increase (Other) in the operating budget carryforward;
- $0.1 million of new funding (Personnel) and another $0.1 million of new funding (Other) announced in Budget 2018 for research into Post-Traumatic Stress Injuries in Public Safety Personnel;
- $0.1 million of new funding (Personnel) and another $0.1 million of new funding (Other) announced in Budget 2019 for Paid Parental Leave for Student Researchers;
- $0.3 million decrease (Personnel) and $0.1 million decrease (Other) due to various adjustments and contributions required by Central Agencies; and
- $5.3 million increase to Personnel and $5.3 million decrease to Other as a result of an internal transfer.
Personnel authorities used year to date increased by $2.3 million (9.4%) as compared to the prior fiscal year and Personnel authorities used during the second quarter increased by $1.0 million (8.1%). The percentage of authorities used for Personnel Expenditures through the second quarter (50.2%) is reasonable for this type of expenditure and is comparable to the prior fiscal year (53.9%).
Other Operating Expenditures used year to date increased by $0.4 million (6.7%) as compared to the prior fiscal year and Other Operating Expenditures used during the second quarter increased by $1.1 million (48.5%) as compared to the prior year. These increases are due to increased salary costs, a new health research survey undertaken with Statistics Canada in support of the development of CIHR’s strategic plan, and the timing of spring peer review meetings which were mostly recorded in the first quarter of the previous year.
Transfer Payments
Authorities available for the period ended September 30, 2019 have increased by $29.5 million (2.7%) over the prior year due primarily to additional health research funding discussed in section 2.1. Authorities used year to date for the quarter ended September 30, 2019 have increased by $55.2 million (11.0%) as discussed in section 2.1. The percentage of grant authorities used through the second quarter of 2019-20 (50.1%) is slightly higher than authorities used as at September 30th of the prior fiscal year (46.4%) as was also discussed in section 2.1.
2.3 Other Non-Financial Highlights
Other non-financial highlights for the second quarter of 2019-20 include:
- On July 16, 2019, the Honourable Ginette Petitpas Taylor, Minister of Health, announced an investment of $100.8 million over 16 years in the Network Environments for Indigenous Health Research Program. It represents the largest single investment by the Government of Canada in Indigenous health research, and will establish a national network of nine centres across the country focused on capacity development, research and knowledge translation centered on Indigenous Peoples.
- On July 18, 2019, the Honourable Ginette Petitpas Taylor, Minister of Health, announced an investment of $32.4 million in sexually transmitted and blood-borne infections (STBBI). This announcement was made during the launch of the Government of Canada’s STBBI Action Plan at the STI & HIV 2019 World Congress in Vancouver, which took place July 14 to 17.
- On July 19, 2019, the Honourable Ginette Petitpas Taylor, Minister of Health, announced an investment of $26.0 million from the Transitions in Care initiative, as well as an additional $6.3 million from partner organizations, to fund teams from across the country to study ways to improve patient outcomes, support the implementation of health innovations, share data, and conduct scientifically driven evaluation. The Government of Canada will contribute $24.0 million through CIHR.
- On September 10 and 11, 2019, Dr. Michael J. Strong, President of CIHR, convened a consensus-building workshop. This workshop brought together CIHR leadership, 150+ health researchers, patient representatives, health charities, health research funders, and representatives of Indigenous communities to collectively identify shared challenges and potential ideas for CIHR’s new strategic plan.
3. Risk and uncertainties
CIHR is funded through voted parliamentary spending authorities and statutory authorities for operating expenditures and transfer payments. As a result, its operations are impacted by any changes to funding approved through Parliament. Delivering programs and services may depend on several risk factors such as economic fluctuations, technological and scientific development, evolving government priorities, and central agency or government-wide initiatives.
CIHR is committed to a disciplined, risk management process in its daily operations. Based on departmental best practices, the Corporate Risk Profile (CRP) is updated bi-annually and provides a proactive response to manage and monitor risks to ensure CIHR’s ability to operationalize its activities, achieve outcomes and deliver on its mandate. CIHR continues to mitigate and monitor the risks identified in its 2019-20 CRP. As part of its mid-year review in October/November, management will assess and report on the current status of risks and mitigation actions.
| Risks | Risk Response Strategy |
|---|---|
Risk 1 - Developing the New Strategic Plan There is a risk that CIHR’s development of a strategic plan to achieve its objectives as defined by the CIHR Act may be hindered by gaps in governance and change management practices. |
|
Risk 2 - Effective Digital Solutions Failure to deliver and support effective digital and security solutions may result in the inability for the organization to deliver on the objectives as defined by the CIHR Act. |
|
Risk 3 - Human Resources Capacity There is a risk that, without proactive strategies and a cohesive organizational design to attract and retain key talent, CIHR will not have the human resource capacity required to deliver on its current programs and services and to respond to future priorities. |
|
4. Significant changes in relation to operations, personnel and programs
- On August 26, 2019 Dr. Michael J. Strong, President of CIHR, announced the appointment of Dr. Christine Chambers as the new Scientific Director of CIHR’s Institute of Human Development, Child and Youth Health. This appointment will be effective January 1, 2020.
Approval by Senior Officials
Approved by:
[original signed by]
Michael J. Strong, MD, FRCPC, FAAN, FCAHS
President
[original signed by]
Dalia Morcos Fraser, CPA, CMA
Chief Financial Officer
Ottawa, Canada
November 29, 2019
| Fiscal year 2019-20 | Fiscal year 2018-19 | |||||
|---|---|---|---|---|---|---|
| (in thousands of dollars) | Total available for use for the year ending March 31, 2020Footnote 1 | Used during the quarter ended September 30, 2019 | Year to date used at quarter-end | Total available for use for the year ended March 31, 2019Footnote 1 | Used during the quarter ended September 30, 2018 | Year to date used at quarter-end |
| Vote 1 – Operating expenditures | 59,188 | 15,150 | 28,659 | 56,296 | 13,301 | 26,616 |
| Vote 5 - Grants | 1,113,975 | 360,865 | 557,988 | 1,084,432 | 314,511 | 502,770 |
| Budgetary statutory authorities – Contributions to employee benefit plans | 6,829 | 1,701 | 3,403 | 5,936 | 1,417 | 2,834 |
| Total budgetary authorities | 1,179,992 | 377,716 | 590,050 | 1,146,664 | 329,229 | 532,220 |
| Fiscal year 2019-20 | Fiscal year 2018-19 | |||||
|---|---|---|---|---|---|---|
| (in thousands of dollars) | Planned expenditures for the year ending March 31, 20201 | Expended during the quarter ended September 30, 2019 | Year to date used at quarter-end | Planned expenditures for the year ending March 31, 20191 | Expended during the quarter ended September 30, 2018 | Year to date used at quarter-end |
| Expenditures: | ||||||
| Personnel | 52,391 | 13,393 | 26,279 | 44,566 | 12,390 | 24,028 |
| Transportation and communications | 4,839 | 1,666 | 2,340 | 6,473 | 584 | 2,084 |
| Information | - | 85 | 188 | 343 | 104 | 197 |
| Professional and special services | 6,139 | 1,644 | 2,076 | 7,814 | 1,062 | 1,700 |
| Rentals | 1,475 | 469 | 950 | 1,763 | 210 | 693 |
| Repair and maintenance | 35 | 6 | 7 | 57 | 91 | 91 |
| Utilities, materials and supplies | 197 | 17 | 20 | 308 | 37 | 39 |
| Acquisition of machinery and equipment | 941 | 70 | 73 | 908 | 343 | 567 |
| Transfer payments | 1,113,975 | 360,865 | 557,988 | 1,084,432 | 314,511 | 502,770 |
| Other subsidies and payments | - | (499) | 129 | - | (103) | 51 |
| Total budgetary expenditures | 1,179,992 | 377,716 | 590,050 | 1,146,664 | 329,229 | 532,220 |
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