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Northern Pipeline Agency Quarterly Financial Report (unaudited) For the Quarter Ended September 30, 2018

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, as well as Canada’s Budget 2018. 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 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 (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 Highway 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 2018-2019 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 2018-2019 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 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 Second Fiscal Quarter and Comparative Results

This Quarterly Financial Report reflects the results as at September 30, 2018, including Main Estimates, and the details presented in this report focus on and compare the second quarter results of 2018-2019 with those of 2017-2018.

2.1 Authorities Available for Use and Planned Spending for the Year

As at September 30, 2018, the Agency has $493,880 in authorities available for use in 2018-2019 compared to $494,830 in 2017-2018, representing a slight decrease of $950 due to lower employee benefit plan costs.

2.2 Authorities Used and Amounts Expended during the Second Quarter

During the second quarter of 2018-2019, the Agency spent $10,842 or 2% of the total funding available, compared to $15,333 or 3% of the total funding available the same period in 2017-2018, for a net decrease of $4,491. The key differences are as follows:

  • Personnel expenditures increased by $1,912 between the second quarter of 2018-2019 and second quarter of 2017-2018, due to salary wage increases as per the collective bargaining settlements, offset by the decreased cost of the employee benefit plans.
  • Professional and special services expenditures decreased by $1,667 between the second quarter of 2018-2019 and the second quarter of 2017-2018, due to the timing of invoicing for certain ongoing professional and special services incurred compared to the second quarter last year.
  • Rental expenditures decreased by $4,736 between the second quarter of 2018-2019 and second quarter of 2017-2018, due to the timing of invoicing for certain ongoing rental services incurred compared to the second quarter last year.
  • No contribution funds were issued in the second quarter of 2018-2019, nor were there funds issued in the second quarter of 2017-2018.

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 (TCPL) 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, TCPL notified the Agency that no further work is planned on the AHGP for now, and of their intentions 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

The appointment of the Honourable Amarjeet Sohi as Minister of Natural Resources and responsible for the management and direction of the Agency occurred in the second quarter of 2018-2019.

Original signed by:

Christyne Tremblay                     
Commissioner

November 27, 2018
Ottawa, Canada
Wayne Marshall
Director of Operations
 

November 13, 2018
Calgary, Canada

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

  Fiscal year 2018-2019 Fiscal year 2017-2018
*Total available for use for the year ending
March 31, 2019
Used during the quarter ended
September 30, 2018
Year-to-date used at
quarter-end
**Total available for use for the year ending
March 31, 2018
Used during the quarter ended
September 30, 2017
Year-to-date used at
quarter-end
Budgetary Authorities
Net Operating expenditures - Vote 1 465,000 3,622 11,921 465,000 7,875 14,812
Statutory Authority - Employee Benefit Plans 28,880 7,220 14,440 29,830 7,458 14,915
Total Budgetary Authorities 493,880 10,842 26,361 494,830 15,333 29,727

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

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

  Fiscal year 2018-2019 Fiscal year 2017-2018
*Planned expenditures for the year ending
March 31, 2019
Expended during the quarter ended
September 30, 2018
Year-to-date used at
quarter-end
**Planned expenditures for the year ending
March 31, 2018
Expended during the quarter ended
September 30, 2017
Year-to-date used at quarter-end
Expenditures:
Personnel 218,880 12,509 26,361 219,830 10,597 24,334
Transportation and communications 5,000 - - 5,000 - -
Information 500 - - 500 - -
Professional and special services 247,000 (1,667) - 248,000 - 657
Rentals 11,000 - - 10,000 4,736 4,736
Repair and maintenance 500 - - 500 - -
Utilities, materials and supplies   500 - - 500 - -
Acquisition of machinery and equipment 500 - - 500 - -
Transfer Payments 10,000 - - 10,000 - -
Total net budgetary expenditures 493,880 10,842 26,361 494,830 15,333 27,727

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

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