Quarterly financial report for the quarter ended September 30, 2024

Introduction

This quarterly report has been prepared by management as required by section 65.1 of the Financial Administration Actand in the form and manner prescribed by the Treasury Board. This quarterly report should be read in conjunction with the Main Estimates and Supplementary Estimates.

The Transportation Safety Board of Canada’s (TSB’s) sole objective is to advance air, marine, pipeline and rail transportation safety. This mandate is fulfilled by conducting independent investigations into selected transportation occurrences to identify the causes and contributing factors, and the safety deficiencies evidenced by these occurrences. The TSB makes recommendations to reduce or eliminate any such safety deficiencies and reports publicly on its investigations. The TSB then follows up with stakeholders to ensure that safety actions are taken to reduce risks and improve safety.

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

Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the TSB’s spending authorities granted by Parliament and those used by the department. Authorities include amounts granted through the Main Estimates and Supplementary Estimates (as applicable) for the 2024-25 fiscal year and any respendable revenue earned and available for use to quarter end. 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.

TSB uses the full accrual method of accounting to prepare and present its annual departmental financial statements, which are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

Highlights of fiscal quarter and fiscal-year-to-date results

Statement of Authorities

The TSB’s total authorities available for use increased by $5.2 million between fiscal years 2023-24 and 2024-25. This is mainly due to a timing difference in the receipt of additional funding between fiscal years.  The TSB obtained new funding through Budget 2023, which provided funding for critical TSB operations, most notably the hiring of additional investigators as well as funds for crucial IT investments. Additionally, the TSB received funding for employee salary increases resulting from newly signed and ratified collective bargaining agreements. Although funding for these items were received in both fiscal years, in 2023-24, it was received only in the third quarter, which explains the large difference when comparing second quarter authorities year to year. The Government of Canada’s Refocusing Government Spending initiative also had an impact, although the difference in the amount between years is minor.

Compared to the first quarter, 2024-25 appropriations increased by $1.2 million due to the TSB's operating budget carry forward (OBCF) from previous year being added in the second quarter.

Statement of Departmental Budgetary Expenditures

The department’s year-to-date spending is higher by $1.7 million, or 10% in the current year compared to 2023-24. This variance in expenditures is primarily attributed to increased spending in three key areas: personnel, professional and special services, and the acquisition of machinery and equipment. The majority of this variance is explained by higher salary costs, which are driven by two main factors as described previously: the hiring of new employees funded through funding received in Budget 2023, and salary increases resulting from newly signed and ratified collective bargaining agreements.

The increase in professional and special services spending is largely due to the need for IT project consultants to support the migration of the server-based SharePoint platform to SharePoint Online. This initiative is part of the TSB's broader digital transformation strategy.

Similarly, the increase in expenditures for the acquisition of machinery and equipment is associated with the purchase of servers and software, primarily for cloud-based information storage. This supports the TSB’s commitment to becoming digital-by-default and enhancing its IT infrastructure.

As illustrated in Figure 1, the TSB has spent approximately 48% of its available authorities at the end of the second quarter. This is slightly lower than expected, given that the department's most significant expense is salaries. The TSB's spending is generally expected to be distributed equally throughout the year.

Image

Risks and uncertainties

A continuous risk to the TSB’s financial situation is that expenditures are greatly influenced by the number and complexity of transportation occurrences. A significant transportation accident or a flurry of smaller size occurrences could significantly increase expenditures and result in additional resource pressures that could require the department to seek further funding from Parliament.

As a departmental corporation, the TSB has authority to spend revenues received during the year although such revenues are minimal; on average less than 1% of the department’s funding requirements.

Significant changes in relation to operations, personnel and programs

Budget 2023 introduced new funding for critical TSB operations.  This included funding for the hiring of 22 new full-time equivalents and for crucial IT investments.  In addition, the TSB is also implementing savings measures in line with the Government of Canada’s Refocusing Government Spending initiative.

In relation to operations, TSB employees are currently working in a hybrid work environment in line with the Direction on Prescribed Presence in the Workplace.

There has been no change to the TSB’s programs.

Approval by senior officials

Approved by,                                                              

Yoan Marier
Chair
Gatineau, Canada

James Clarkin, CPA, CMA
Chief Financial Officer
Gatineau, Canada 

Statement of Authorities (unaudited)

Fiscal year 2023-24 ¹

Statement of Expenditures by Standard Object (unaudited)