Northern Pipeline Agency Quarterly Financial Report (unaudited) For the Quarter Ended September 30, 2019
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 2019. 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 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 2019-2020 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 2019-2020 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, 2019, including Main Estimates, and the details presented in this report focus on and compare the second quarter results of 2019-2020 with those of 2018-2019.
2.1 Authorities Available for Use and Planned Spending for the Year
As at September 30, 2019, the Agency has $1,084,070 in authorities available for use in 2019-2020 compared to $493,880 in 2018-2019, representing an increase of $590,190 due mainly to an increase in the funding available for transfer payments should it be needed.
2.2 Authorities Used and Amounts Expended during the Second Quarter
During the second quarter of 2019-2020, the Agency spent $24,217 or 2.2% of the total funding available, compared to $10,842 or 2.2% of the total funding available the same period in 2018-2019, for a net increase of $13,375.
- Personnel expenditures had a minor decrease of $1,925 between the second quarter of 2019-2020 and the second quarter of 2018-2019.
- Professional and special services expenditures increased by $12,144 between the second quarter of 2019-2020 and the second quarter of 2018-2019, mainly due to the timing of an annual invoice payment.
- Rental expenditures increased by $3,156 between the second quarter of 2019-2020 and the second quarter of 2018-2019, due to the timing of invoicing for certain ongoing rental services incurred compared to the second quarter last year.
- No transfer payments were issued in the second quarter of 2019-2020, nor were there payments issued in the second quarter of 2018-2019.
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 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
There were no significant changes to operations, personnel and programs during the second quarter of 2019-2020.
Original signed by:
| Christyne Tremblay Commissioner |
Wayne Marshall Director of Operations |
| November 24, 2019 Ottawa, Canada |
November 24, 18, 2019 Calgary, Canada |
| Budgetary Authorities | Fiscal year 2019-2020 | Fiscal year 2018-2019 | ||||
|---|---|---|---|---|---|---|
| *Total available for use for the year ending March 31, 2020 | Expended during the quarter ended September 30, 2019 | Year-to-date used at quarter-end | *Total available for use for the year ending March 31, 2019 | Expended during the quarter ended September 30, 2018 | Year-to-date used at quarter-end | |
| Net Operating expenditures - Vote 1 | 1,055,000 | 16,950 | 25,382 | 465,000 | 3,622 | 11,921 |
| Statutory Authority - Employee Benefit Plans | 29,070 | 7,267 | 14,535 | 28,880 | 7,220 | 14,440 |
| Total Budgetary Authorities | 1,084,070 | 24,217 | 39,917 | 493,880 | 10,842 | 26,361 |
* Includes only Authorities available for use and granted by Parliament at quarter-end: Main Estimates.
| Expenditures: | Fiscal year 2019-2020 | Fiscal year 2018-2019 | ||||
|---|---|---|---|---|---|---|
| *Planned expenditures for the year ending March 31, 2020 | Expended during the quarter ended September 30, 2019 | Year-to-date used at quarter-end | *Planned expenditures for the year ending March 31, 2019 | Expended during the quarter ended September 30, 2018 | Year-to-date used at quarter-end | |
| Personnel | 219,070 | 10,584 | 24,484 | 218,880 | 12,509 | 26,361 |
| Transportation and communication | 25,000 | - | - | 5,000 | - | - |
| Information | 1,000 | - | - | 500 | - | - |
| Professional and special services | 285,000 | 10,477 | 10,698 | 247,000 | (1,667) | - |
| Rentals | 11,000 | 3,156 | 4,735 | 11,000 | - | - |
| Repair and maintenance | 1,000 | - | - | 500 | - | - |
| Utilities, materials and supplies | 1,000 | - | - | 500 | - | - |
| Acquisition of machinery and equipment | 1,000 | - | - | 500 | - | - |
| Transfer Payments | 540,000 | - | - | 10,000 | - | - |
| Total net budgetary expenditures | 1,084,070 | 24,217 | 39,917 | 493,880 | 10,842 | 26,361 |
* Includes only Authorities available for use and granted by Parliament at quarter-end: Main Estimates.
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