Northern Pipeline Agency Quarterly Financial Report (unaudited) For the Quarter Ended December 31, 2020

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 2020-2021 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 2020-2021 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, 2020, including Main Estimates, and the details presented in this report focus on and compare the third quarter results of 2020-2021 with those of 2019-2020.

2.1 Authorities Available for Use and Planned Spending for the Year

As at December 31, 2020, the Agency has $1,083,120 in authorities available for use in 2020-2021 compared to $1,084,070 in 2019-2020, representing a small decrease of $950.

2.2 Authorities Used and Amounts Expended during the third Quarter

During the third quarter of 2020-2021, the Agency spent $33,620 or 3.1% of the total funding available, compared to $25,739 or 2.4% of the total funding available the same period in 2019-2020, for a net increase of $7,881. This net increase was primarily due to increase in salary costs compared to the third quarter of last year.

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 2020-2021.

There were no significant impacts arising from the outbreak of the COVID-19 pandemic during the third quarter of 2020-2021.

Approved by:

Original signed by

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

Budgetary Authorities	Fiscal year 2020-2021			Fiscal year 2019-2020
	*Total available for use for the year ending March 31, 2021	Used during the quarter ended December 31, 2020	Year-to-date used at quarter-end	*Total available for use for the year ending March 31, 2020	Used during the quarter endedDecember 31, 2019	Year-to-date used at quarter-end
Operating expenditures - Vote 1	1,055,000	26,590	64,798	1,055,000	18,471	43,853
Statutory Authority - Employee Benefit Plans	28,120	7,030	21,090	29,070	7,268	21,803
Total Budgetary Authorities	1,083,120	33,620	85,888	1,084,070	25,739	65,656

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

Expenditures:	Fiscal year 2020-2021			Fiscal year 2019-2020
	*Planned expenditures for the year ending March 31, 2021	Expended during the quarter ended December 31, 2020	Year-to-date used at quarter-end	*Planned expenditures for the year ending March 31, 2020	Expended during the quarter ended December 31, 2019	Year-to-date used at quarter-end
Personnel	218,120	21,252	58,785	219,070	14,213	38,697
Transportation and communication	25,000		-	25,000		-
Information	1,000		-	1,000		-
Professional and special services	280,000	10,000	20,000	285,000	9,157	19,855
Rentals	12,000	2,368	7,103	11,000	2,369	7,104
Repair and maintenance	1,000		-	1,000		-
Utilities, materials and supplies	1,000		-	1,000		-
Acquisition of machinery and equipment	5,000		-	1,000		-
Transfer Payments	540,000		-	540,000		-
Total net budgetary expenditures	1,083,120	33,620	85,888	1,084,070	25,739	65,656

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