Introduction Highlights of fiscal quarter and fiscal year-to-date results Risks and uncertainties Significant changes related to operations, personnel and programs Statement of authorities (unaudited) Departmental budgetary expenditures by standard object (unaudited)
This Quarterly Financial Report (QFR) has been prepared by management as required by section 65.1 of the
The Natural Sciences and Engineering Research Council of Canada (NSERC) was established in 1978 by the Natural Sciences and Engineering Research Council Act and is a departmental corporation named in Schedule II of the FAA. NSERC’s purpose is to help make Canada a country of discoverers and innovators for the benefit of all Canadians, by supporting post-secondary students and postdoctoral fellows in their advanced studies, funding the research programs of academic researchers, and stimulating partnerships between academia and industry.
Further information on the NSERC mandate and program activities can be found in
Management prepared this quarterly report using an expenditure basis of accounting. The accompanying statement of authorities includes NSERC’s spending authorities granted by Parliament and those used by the agency, consistent with the Main Estimates, Supplementary Estimates (A) and Supplementary Estimates (B) for the fiscal year 2021–22. 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 the Government of Canada can spend money. Approvals are given in the form of annually approved limits through appropriation acts or through legislation in the form of statutory spending authorities for specific purposes.
NSERC uses the full accrual method of accounting to prepare and present its annual financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.
This section highlights the significant items that contributed to the change in resources available for the fiscal year, as well as the actual year-to-date expenditures compared with the previous fiscal year.
The following graph provides a comparison of budgetary authorities available for the full fiscal year and budgetary expenditures by quarter for the fiscal year 2021–22 and the fiscal year 2020–21.
Comparison of budgetary authorities and year-to-date expenditures (thousands of dollars)
As of December 31, 2021, NSERC’s total available authorities for the fiscal year 2021–22 amounted to $1.41 billion. This represents an overall decrease of $117.6 million (7.7%) from the comparative period in the previous year. The major changes in NSERC’s budgetary authorities between the current and previous fiscal years include
- a decrease of $153.4 million statutory COVID-19 funding received only in previous year (2020–21) from the Public Health Events of National Concern Payments Act (PHENCPA)
- an increase of $25.4 million for fundamental research funding, as announced in Budget 2018
- an increase of $22.0 million funding to support applied research partnerships, as announced in Budget 2021
- a decrease of $7.4 million due to transfer out of the Business-led Networks of Centres of Excellence program and Centres of Excellence for Commercialization and Research program to Innovation, Science and Economic Development Canada Strategic Innovation Fund (SIF) program as per Budget 2018 announcement
- an increase of $6.8 million due to an allotment adjustment for compensation
- a decrease of $2.5 million for the Canada Excellence Research Chairs program in accordance with the program's design and delivery schedule as renewed in Budget 2019 and planned for sun-setting by 2026–27
- an increase of $1.9 million for increasing the number of Canada Graduate Scholarship Master’s and Doctoral awards, as well as for expanding paid parental leave as announced in Budget 2019
Year-to-date spending
The following table provides a comparison of cumulative spending by vote for the current and previous fiscal years.
Total budgetary expenditures amounted to $988.3 million at the end of the third quarter of the fiscal year 2021–22, compared to $1,124.5 million reported in the same period in the previous fiscal year.
Grants and scholarships
At the end of the third quarter of 2021–22, the grant and scholarship expenses decreased by $145.1 million, compared to those reported in the same period of the previous fiscal year. The decrease is mainly due to the payments of COVID-19 statutory funding received under PHENCPA to support students and youth affected by the COVID-19 pandemic and to support research institutes and universities in fiscal year 2020–21. PHENCPA funding was only applicable to last fiscal year and was not extended to this fiscal year.
Operating expenditures
Personnel expenditure, which include contributions to employee benefit plans, have increased by $8.3 million compared to the same period of the previous year. The increase is mainly due to the implementation of the new terms and conditions of employment (September 2021) and the related clauses relative to salary increase.
Total non-personnel expenditures as of the third quarter of fiscal year 2021–22 are largely in line with the comparative period of the previous year. There was an increase in acquisition of machinery and equipment expenditures related to the Workplace Renewal project launched during 2020–21 in joint partnership with the Social Sciences and Humanities Research Council (SSHRC). There was also an increase in rental and information expenses due to an increase in IT purchases and software license subscriptions to support the organization in operating remotely. Professional and special services expenses decreased, however, due to lower usage of management consulting services. Please see the Departmental budgetary expenditures by standard object table in section 6 for additional details.
The total authorities used at the end of the third quarter ($988.3 million) of the fiscal year 2021–22 represent 70% of total available authorities ($1.41 billion).
Quarterly spending
The total authorities used during the third quarter of 2021–22 amounted to $320.4 million (23% of the total available authorities; 23% of the total authorities for grant and scholarship programs; and 24% of the total authorities for operating expenditures and employee benefits).
Grants and scholarships
Transfer payments represent 96% of NSERC’s available authorities. Variances in transfer payments stem from the nature of program cycles. During the third quarter of 2021–22, NSERC’s transfer payment expenditures increased by $22.9 million compared to the same quarter of the previous fiscal year. The increase is mainly due to timing differences on payments.
Operating expenditures
Personnel expenditures, which include contributions to employee benefit plans, for the third quarter of fiscal year 2021–22 have increased by $1.6 million compared to the same quarter of the previous year, mainly due to the implementation of the new terms and conditions of employment (September 2021) and related clauses relative to salary increase.
Total non-personnel expenditures for the third quarter of fiscal year 2021–22 have remained in line with expenses incurred during the same period of the previous fiscal year. There was an increase in the acquisition of equipment for the Workplace Renewal project. There was also an increase in rental expenses due to an increase in software license subscriptions to support the organization in operating remotely. Professional and special services expenses decreased due to lower usage of management consulting services. Please see the Departmental budgetary expenditures by standard object table in section 6 for additional details.
NSERC produces an annual Corporate Risk Profile close to the beginning of a new fiscal year that includes corporate risks along with risk mitigation activities. NSERC has linked corporate risk management with its integrated planning process to ensure greater cohesion and executive oversight in the delivery of its mandate.
Senior management closely monitors the top two risks, listed below, to ensure they are continuously mitigated and that the residual risk level is acceptable.
- Aging IT system: There is a risk that if aging software and database systems are not updated, and NSERC does not invest sufficiently in legacy IM/IT systems, these systems will be unable to support existing and new programs.
NSERC has built a number of business capabilities on the MS Dynamics platform to support key tri-agency initiatives such as theCanada Research Chairs and theNew Frontiers in Research Fund , and is now focused on on-boardingDiscovery Horizons andCollege and Community Innovation . NSERC maintains and monitors the platforms closely to ensure ongoing operations and support.
- Resource management: There is a risk that if resources (human, technological and/or financial) are not allocated in an informed, flexible and strategic manner, NSERC may not be able to support its highest priorities and/or emerging needs.
The number of priorities and key commitments identified in the integrated planning process may not be fully funded due to budget and human resource pressures related to key investment projects. In addition, the uncertainty created by the COVID-19 pandemic is still a reality, and mitigation measures have been put in place to ensure that program and corporate organizational priorities are delivered.
As part of our agency’s path to continuously foster a healthy, positive and productive work environment for all employees, NSERC launched the new Office of the Ombuds and Workplace Well-being to support NSERC employees. The Office of the Ombuds and Workplace Well-being provides new in-house informal conflict management and mental health and well-being services.
The NSERC-SSHRC COVID-19 Vaccination Policycame into effect November 8, 2021, requiring all employees to be fully vaccinated, whether they are working remotely or on-site. Full compliance with the policy was required by December 15, 2021. In alignment with this important measure, all supplier personnel (including subcontractor personnel) who access federal government workplaces were required to be fully vaccinated against COVID-19. Full compliance with the policy was required by November 15, 2021.
In October 2021 NSERC launched the
Following the
NSERC, SSHRC and CIHR have harmonized their policy to align more clearly with the Treasury Board Policy on Transfer Payments (PTP) with regard to the eligibility and funding of research projects or programs submitted by applicants who are formally affiliated with a Canadian postsecondary institution, but who are employed by the federal government. The harmonized policy position stipulates that
- if the proposed research falls outside the federal employer’s mandate and will not be performed using federal facilities or resources, it will then be deemed eligible
- if the proposed research falls within the federal employer’s mandate and is performed using federal facilities or resources, it will then be assessed by the agencies and funding may be allocated for support of students only (salaries or stipends and travel costs)
Approved by:
Original signed by
Prof. Alejandro Adem, FRSC
President
Ottawa, Canada
March 1, 2022
Original signed by
Dominique Osterrath
Vice-President and Chief Financial Officer
Statement of authorities (unaudited)
©Her Majesty the Queen in Right of Canada, as represented by the Minister of Industry, 2021.
ISSN 2564-1107