Northern Pipeline Agency Quarterly Financial Report (unaudited) For the Quarter Ended December 31, 2023

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

1. Introduction

This quarterly financial report should be read in conjunction with the Main Estimates and any Supplementary Estimates approved in a given year by the date of this report. It 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. This quarterly financial report has not been subject to an external audit or review.

1.1 Authority, Mandate and Programs

The Northern Pipeline Agency (Agency) was established by the Northern Pipeline Act in 1978 and, in the context of the 1977 Agreement between Canada and the United States of America on Principles Applicable to a Northern Natural Gas Pipeline. The Agency has a mandate to carry out federal responsibilities in respect of the planning and construction of the Canadian portion of the Alaska Natural Gas Pipeline (AHGP). The Agency plays a key role in supporting efficient and expeditious regulatory approval, while ensuring environmental protection and social and economic benefits for Canada.

Further details on the Agency’s authority, mandate and programs are available in Part II of the 2023-24 Main Estimates.

1.2 Basis of Presentation

This quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency’s spending authorities granted by Parliament, and those used by the Agency are consistent with the Main Estimates for the 2023-24 fiscal year for which full supply has been released by Parliament. 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 Agency uses the full accrual method of accounting to prepare and present its annual unaudited 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 the Third Fiscal Quarter and Comparative Results

This Quarterly Financial Report reflects the results as at December 31, 2023, including Main Estimates, and the details presented in this report focus on and compare the third quarter results of 2023-24 with those of 2022-23.

2.1 Authorities Available for Use and Planned Spending for the Year

As at December 31, 2023, the Agency has $572,629, in authorities available for use in 2023-24 compared to $572,250 in 2022-23, representing a slight increase of $379 which includes an increase of $430 related to personnel partially offset by a decrease of $51 related to Professional and special services.

2.2 Authorities Used and Amounts Expended during the Third Quarter and Year-to-Date

During the third quarter of 2023-24, the Agency spent $48,981 or 8.6% of the total funding available, compared to $38,024 or 6.6% of the total funding available for the same period in 2022-23, for a net increase of $10,957. This net increase, compared to the third quarter of last year, is mainly comprised of:

• a decrease in salary costs due to a reduction of staffing levels;
• a decrease in rental costs due to a change of services; and
• an increase in professional and special services due to the timing of invoicing.

As at December 31, 2023, the Agency spent $86,637 or 15.1% of the total funding available, compared to $91,795 or 16.0% of the total funding as at December 31, 2022, for a net decrease of $5,158. This decrease is mainly explained by the reasons noted above.

3. Risks and Uncertainties

In planning for an efficient and effective review and regulation of the project, the Agency must adapt to project developments by the proponent, i.e., to carry out its responsibilities and to make the necessary preparations in concert with the pace of the project’s development.

3.1 Risk Mitigation Framework

The Agency identifies and responds to the pace of the project’s development by continual corporate-level forecasting, tracking and management of issues that could affect or require a response from the Agency. For example, on March 30, 2012, ExxonMobil, ConocoPhillips, BP and TransCanada PipeLines Limited (now TC Energy) announced a work plan to assess liquefied natural gas (LNG) exports from south-central Alaska as an alternative to a natural gas pipeline through Canada. In February 2013, TC Energy notified the Agency that no further work is planned on the AHGP for now, and of their intent to maintain the AHGP assets in Canada. To align with the reduction in the AHGP project activities for the foreseeable future, the Agency has scaled down its operations, while continuing to fulfill Canada’s obligations as set out in the Act.

4. Significant Changes in Relation to Operations, Personnel and Programs

There were no significant changes to operations, personnel and programs during the third quarter of 2023-24.

Approved by:

Original signed by:

Table 1: Statement of Authorities (unaudited) (in dollars)

	Fiscal year 2023-2024				Fiscal year 2022-2023
Budgetary Authorities	Total available for use for the year ending March 31, 2024*	Expended during the quarter ended December 31, 2023	Year-to-date used at quarter-end		Total available for use for the year ending March 31, 2023*	Expended during the quarter ended December 31, 2022	Year-to-date used at quarter-end
Net Operating expenditures - Vote 1	539,949	40,811	62,127		540,000	29,961	67,607
Statutory Authority - Employee Benefit Plans	32,680	8,170	24,510		32,250	8,063	24,188
Total Budgetary Authorities	572,629	48,981	86,637		572,250	38,024	91,795

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

Table 2: Budgetary Expenditures by Standard Object (unaudited) (in dollars)

	Fiscal year 2023-2024				Fiscal year 2022-2023
Expenditures:	Total available for use for the year ending March 31, 2024*	Expended during the quarter ended December 31, 2023	Year-to-date used at quarter-end		Total available for use for the year ending March 31, 2023*	Expended during the quarter ended December 31, 2022	Year-to-date used at quarter-end
Personnel	247,680	17,681	50,146		247,250	20,921	59,287
Transportation and communication	25,000	294	294		25,000	-	-
Information	1,000	-	-		1,000	-	-
Professional and special services	279,949	31,006	31,006		280,000	14,507	24,507
Rentals	12,000	-	5,191		12,000	2,596	7,787
Repair and maintenance	1,000	-	-		1,000	-	214
Utilities, materials and supplies	1,000	-	-		1,000	-	-
Acquisition of machinery and equipment	5,000	-	-		5,000	-	-
Transfer Payments	-	-	-		-	-	-
Other subsidies and payments	-	-	-		-	-	-
Total net budgetary expenditures	572,629	48,981	86,637		572,250	38,024	91,795

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