Library and Archives Canada: Quarterly Financial Report for the quarter ended December 31, 2019

1. Introduction

This quarterly report has been prepared by Library and Archives Canada (LAC) as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by Treasury Board. This quarterly report should be read in conjunction with the 2019–2020 Main Estimates and Supplementary Estimates (A).

This quarterly report has not been subject to an independent audit or review.

1.1 Library and Archives Canada's mandate

Under the Library and Archives of Canada Act, LAC's mandate is as follows:

• to preserve the documentary heritage of Canada for the benefit of present and future generations;
• to serve as a source of enduring knowledge accessible to all, contributing to the cultural, social and economic advancement of Canada as a free and democratic society;
• to facilitate in Canada co-operation among communities involved in the acquisition, preservation and diffusion of knowledge; and
• to serve as the continuing memory of the Government of Canada and its institutions.

The Minister of Canadian Heritage is responsible for LAC.

In 2019–2020, LAC began implementing its new 2019–2022 three-year plan, developed following consultations with citizens, employees and partners.

Our strategic priorities for 2019–2022 are the following:

1. We will increase access to our collection and expand opportunities for the public to enhance LAC’s holdings.
2. We will steward responsible growth of the collection and implement safeguards to preserve it for future generations.
3. We will seek out and support collective solutions for a more cohesive and impactful documentary heritage community at home and abroad.

1.2 Basis of presentation

This quarterly report has been prepared by LAC using an expenditure basis of accounting. The accompanying Statement of Authorities includes the spending authorities granted by Parliament, and those used by LAC, consistent with the Main Estimates and Supplementary Estimates (A) 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 monies 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.

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

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

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

2.1 Statement of Authorities

As reflected in the Statement of Authorities below, total authorities available for use as of December 31, 2019 are $171.9 million compared to $128.8 million as of December 31, 2018. The following table provides the detailed list of authorities by fiscal year:

• Table 1 summary

  For each Authority (Vote/Statutory), this table indicates the description of vote or authority, and the dollar figure, for the quarters ended December 31, 2019, and December 31, 2018.

The overall increase of $43.1 million results mainly from the following:

• An increase of $34.2 million mainly for the substantial completion payment for the construction of a new building for the preservation of analog archival holdings in Gatineau; however, based on the progress of the project, this payment is now planned for fiscal year 2022–2023;
• An increase of $4.4 million for the new partnership between Library and Archives Canada and Ottawa Public Library;
• An increase of $3.4 million to support the administration of the Government of Canada’s response to the LGBT (lesbian, gay, bisexual and transgender) Purge Class Action Settlement;
• An increase of $1.6 million for salary adjustments paid in 2019–20 following the ratification of collective agreements; and
• A decrease of $0.5 million for the 2018 federal budget fiscal dividend as well as for the voluntary contribution to the financial management transformation.

2.2 Statement of departmental budgetary expenditures by standard object

As presented in the Statement of Departmental Budgetary Expenditures by Standard Object, the year-to-date expenditures totalled $97.9 million as of December 31, 2019, compared to $84.8 million as of December 31, 2018. The total increase of $13.1 million is mainly explained by the following:

• An increase of $6.3 million ($68.9 million in 2019–2020 compared to $62.6 million in 2018–2019) in expenditures related to personnel, due to hiring staff to support initiatives already underway (such as the preservation of Indigenous languages and cultures, the administration of the Government of Canada’s response to the LGBT Purge Class Action Settlement, the processing of the private archives of the Right Honourable Stephen Harper, collection preparations for the construction of a new building for the preservation of analog archival holdings in Gatineau, and the new partnership between Library and Archives Canada and Ottawa Public Library).  This increase is also due to the retroactive payments, paid in 2019–2020, following the ratification of collective agreements;
• An increase of $3.6 million ($10.5 million in 2019–2020 compared to $6.9 million in 2018–2019) in expenditures for professional and special services mainly for the construction of a new building for the preservation of analog archival holdings in Gatineau and for the management and maintenance of special-purpose buildings;
• A net increase of $2.1 million in departmental expenditures mainly due to the acquisition of specialized equipment for the preservation of documentary heritage, as detailed below:
  • An increase of $1.4 million ($1.9 million in 2019–2020 compared to $0.5 million in 2018–2019) in expenditures related to the acquisition of machinery and equipment;
  • An increase of $0.7 million ($3.4 million in 2019–2020 compared to $2.7 million in 2018–2019) in expenditures related to rentals;
• An increase of $1.4 million ($2.7 million in 2019–2020 compared to $1.3 million in 2018–2019) in expenditures related to transfer payments, mainly due to the Listen, Hear Our Voices initiative to fund Indigenous organizations to help digitize and preserve existing culture and language recording for future generations;
• A net decrease of $0.5 million in departmental expenditures related to the management and maintenance of special-purpose buildings, as detailed below:
  • A decrease of $1.6 million ($4.3 million in 2019–2020 compared to $5.9 million in 2018–2019) in expenditures related to “Other subsidies and payments”;
  • An increase of $1.1 million ($2.8 million in 2019–2020 compared to $1.7 million in 2018–2019) in expenditures related to the acquisition of land, buildings and works.

3. Risks and uncertainties

LAC has developed a Corporate Risk Profile for the 2018–2021 period. This profile describes the organizational risks and strategic impacts that have been identified, as well as the means put in place to mitigate them. An annual review of each mitigation measure allows monitoring of these risks. The following section presents these risks and their context.

1. LAC may not be able to adapt quickly enough to evolving technology, which could affect its ability to meet the needs of its users.
   • At a time when web users expect to find what they are looking for quickly and easily, their needs change as technology advances. LAC must take steps to provide the best customer experience possible. The risk lies mainly in the impact of technological changes, which are still unknown, and in LAC’s ability to adapt quickly.
2. LAC's digital processes may not be seamlessly integrated, which could affect its efficiency.
   • In addition to having to adapt to technological changes, LAC must ensure that the systems and technological solutions put in place to acquire, preserve, manage and make available digital content are sufficiently integrated and compatible with each other. Systems harmonization requires a comprehensive and integrated view of all digital processes as well as sound planning that takes into account the particularities of each operation.

4. Significant changes in relation to operations, personnel and programs

There were no significant changes to the organization’s personnel, activities or programs during the third quarter, which ended on December 31, 2019.

Approval by Senior Officials

Original signed by:

• Table 2 summary

  This table indicates dollar figures for authorities for the fiscal year 2019–2020, including the total available for use for the year ending March 31, 2020; the total used during the quarter ended December 31, 2019; and the total year to date used at quarter-end. Displayed are the dollar figures for fiscal year 2018–2019, including the total available for use for the year ending March 31, 2019; the total used during the quarter ended December 31, 2018; and the total year to date used at quarter-end.

• Table 3 summary

  This table indicates departmental budgetary expenditures. Displayed are the dollar figures for expenditures by standard object, including total gross budgetary expenditures; total gross budgetary expenditures less revenues netted against expenditures; and total net budgetary expenditures for fiscal year 2019–2020. Figures are arranged by total planned expenditures for the year ending March 31, 2020; the total expended during the quarter ended December 31, 2019; and the total year to date used at quarter-end.

  Also displayed are the dollar figures for expenditures by standard object, including total gross budgetary expenditures; total gross budgetary expenditures less revenues netted against expenditures; and total net budgetary expenditures for fiscal year 2018–2019. Figures are arranged by total planned expenditures for the year ending March 31, 2019; the total expended during the quarter ended December 31, 2018; and the total year to date used at quarter-end.