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Quarterly financial report for the quarter ended December 31, 2023
(unaudited)

ISSN 2817-2949
Cat. No. FD3-3E-PDF

1. Introduction

This quarterly report 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 in the Directive on Accounting Standards, GC 4400 Departmental Quarterly Financial Reports. This Quarterly Financial Report should be read in conjunction with the 2023–24 Main Estimates for the Financial Transactions and Reports Analysis Center of Canada (FINTRAC).

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

1.1. Authority, mandate and program activities

FINTRAC (the Centre) is Canada's financial intelligence unit and anti-money laundering and anti-terrorist financing regulator. The Centre assists in the detection, prevention and deterrence of money laundering and the financing of terrorist activities. FINTRAC's financial intelligence and compliance functions are a unique contribution to the safety of Canadians and the integrity of Canada's financial system.

FINTRAC acts at arm's length and is independent from the police services, law enforcement agencies and other entities to which it is authorized to disclose financial intelligence. It reports to the Minister of Finance, who is in turn accountable to Parliament for the activities of the Centre. FINTRAC's headquarters in Ottawa, with regional offices located in Montréal, Toronto, and Vancouver.

FINTRAC was established by, and operates within the ambit of, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations. The Centre is one of several domestic partners in Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime, which is led by the Department of Finance.

FINTRAC fulfills its mandate by engaging in the following activities:

In addition, FINTRAC is part of the Egmont Group, an international network of financial intelligence units that collaborate and exchange information to combat money laundering and terrorist activity financing. FINTRAC also contributes to other multilateral fora such as the Financial Action Task Force (FATF), the Asia-Pacific Group on Money Laundering (APG) and the Caribbean Financial Action Task Force (CFATF), participating in international policy making and the provision of technical assistance to other FIUs.

The description of the program activities for the Centre can be found in Part II of the 2023–24 Main Estimates and in the 2023–24 Departmental Plan.

1.2. Basis of presentation

This Quarterly Financial Report has been prepared by management, using an expenditure basis of accounting, and a special purpose financial reporting framework designed to meet financial information needs with respect to the use of spending authorities. The accompanying Statement of Authorities includes the Centre's spending authorities granted by Parliament and those used by the Department, consistent with the Main Estimates and Supplementary Estimates for both fiscal years as well as transfers from Treasury Board central votes that are approved by the end of the quarter.

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.

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

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

This departmental quarterly financial report reflects the results of the current fiscal period. The following graph provides a comparison of budgetary and statutory authorities available for the first three months of 2023–24 compared to 2022–23.

Comparison of Authorities by Fiscal Year ($M). Budgetary Authorities 88.1 in 2022-23, 87.2 in 2023-24. Statutory Authorities 9.1 in 2022-23 and 8.4 in 2023-24.

2.1. Authorities analysis

The following table provides a comparison of cumulative authorities by vote for the current and previous fiscal year.

Comparison of cumulative authorities available for use as at December 31
Authorities available
($ thousands)
2023–24 2022–23 Variance ($) Variance (%)
Budgetary
Voted
Vote 1 – Program authorities 87,162 88,080 -918 -1%
Statutory
Employee benefits plan 8,399 9,053 -654 -7%
Total budgetary authorities 95,561 97,133 -1,572 -2%
Non-budgetary 0 0 0 0%
Total authoritiesFootnote 1 $95,561 $97,133 ($1,572) -2%

2.1.1. Voted budgetary authorities

The total Vote 1 – Program Authorities available as at December 31, 2023 are $87.2 million compared to $88.1 million for the same period in 2022–23. This represents a decrease of $0.9 million or -1%.

2.1.2. Statutory budgetary authorities

The total statutory authorities available as at December 31, 2023 are $8.4 million compared to $9.1 million for the same period in 2022–23. This represents a decrease of $0.7 million or -7%.

2.2. Expenditure analysis

The following table provides a comparison of year-to-date spending as at December 31st by Vote for the current and previous fiscal years.

Comparison of cumulative expenditures as at December 31
Year-to-date expenditures
($ thousands)
2023–24 2022–23 Variance
($)
Variance
(%)
Budgetary
Voted
Vote 1 – Program expenditures 57,753 50,351 7,402 15%
Statutory
Employee benefits plan 6,299 4,463 1,836 41%
Total budgetary expenditures 64,052 54,813 9,239 17%
Non-budgetary 0 0 0 0%
Total year-to-date expendituresFootnote 2 $64,052 $54,813 $9,239 17%

2.2.1. Voted budgetary expenditures

Total voted expenditures at December 31, 2023 were $57.8 million in 2023–24 compared to $50.4 million in 2022–23, an increase of $7.4 million or 15%. The net increase is the result of the following variances in expenditure categories:

2.2.2. Statutory budgetary expenditures

Statutory expenditures in the first three quarters increased by $1.8 million or 41%, from $4.5 million during 2022–23 to $6.3 million in 2023–24. This variance is mainly due to an increase in personnel expenditures related to Budget 2022 to fund additional program requirements to further strengthen Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime, as well as economic increases.

3. Risks and uncertainties

As Canada's financial intelligence unit and a partner in Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime, FINTRAC operates in a dynamic, constantly changing environment. In seeking to identify risks and opportunities proactively, FINTRAC must anticipate and assess internal and external risk factors that can affect the design and delivery of its programs and the achievement of its strategic objectives. Additionally, FINTRAC must identify factors and risks that could adversely affect its ability to manage its resources effectively.

FINTRAC maintains a Corporate Risk Profile (CRP) to identify and manage its key corporate risks. The development of the CRP is a self-assessment process to identify, validate and measure risks where action or intervention can improve results or prevent harm. Senior level committees review the CRP regularly and the business planning process identifies activities to mitigate the risks. The objective of the CRP is to create information that FINTRAC managers and decision makers can use when planning and setting priorities.

3.1. Risk factors and mitigation

One area of risk identified in FINTRAC's CRP relates to the Centre's risk that legacy IM/IT hardware and software capacity will limit FINTRAC's ability to achieve its objectives. FINTRAC depends on a sophisticated information technology infrastructure to receive, store and secure over 30 million new financial transaction reports every year. FINTRAC's systems support the heavily technology-enabled Compliance Framework, allowing businesses to submit financial transaction reports, facilitating the tracking and recording of compliance, and enabling businesses to meet their legislative and regulatory obligations. At the same time, this infrastructure allows intelligence analysts to filter the information, analyze it and generate actionable financial intelligence for Canada's police, law enforcement and national security agencies. This is only possible with modern systems that can manage the high volume of information, make the connections and produce the needed results, all in real-time or close to it.

To address the risks related to legacy IM/IT hardware and software capacity, the Centre is engaged in a broad multi-year modernization effort underpinned by its long-term Digital Strategy. With the support of significant new funding in Budget 2022, the Centre is focused on upgrading its information technology systems in order to keep pace with the rapid technological innovation taking place in the financial sector and all sectors around the world. FINTRAC's Digital Strategy is focused on ensuring the organization is able to leverage new and emerging technology, add business value, improve performance, enhance digital services, enrich the user experience and explore modern new ways to deliver on the Centre's mandate.

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

4.1. Key personnel changes

There were no key personnel changes in the third quarter of fiscal year 2023–24.

5. Approval by senior officials

Approved by:

Jean-François Savard, Acting Chief Financial Officer (A/CFO)
Date: February 29, 2024

Sarah Paquet, Director and Chief Executive Officer
Date: February 29, 2024


STATEMENT OF AUTHORITIES (unaudited)
For the quarter ended December 31, 2023
(in thousands of dollars)
  Fiscal year 2023–24 Fiscal year 2022–23
Total available for use for the year ending March 31, 2024 Footnote 3 Used during the quarter ended December 31, 2023 Year-to-date used at quarter-end Total available for use for the year ending March 31, 2023Footnote 4 Used during the quarter ended December 31, 2022 Year-to-date used at quarter-end
Budgetary authorities
Vote 1 – Program expenditures 87,162 19,597 57,753 88,080 18,172 50,351
Budgetary statutory authorities
Contributions to employee benefit plans 8,399 2,100 6,299 9,053 2,231 4,463
Total budgetary authorities 95,561 21,696 64,052 97,133 20,403 54,813
Non-budgetary authorities 0 0 0 0 0 0
Total authorities Footnote 5 95,561 21,696 64,052 97,133 20,403 54,813
DEPARTMENTAL BUDGETARY EXPENDITURES BY STANDARD OBJECT (unaudited)
For the quarter ended December 31, 2023
(in thousands of dollars)
Expenditures Fiscal year 2023–24 Fiscal year 2022–23
Planned expenditures for the year ending March 31, 2024 Expended during the quarter ended December 31, 2023 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended
December 31, 2022
Year-to-date used at quarter-end
Personnel 66,977 15,578 50,142 52,382 15,159 42,035
Transportation and communications 919 236 1,228 1,042 743 978
Information 872 386 796 452 99 821
Professional and special services 6,176 1,724 5,226 10,958 1,902 4,607
Rentals 7,767 3,341 4,805 7,291 1,447 4,409
Repair and maintenance 573 122 692 570 227 596
Utilities, materials and supplies 204 57 157 278 102 220
Acquisition of land, buildings and works 0 0 0 0 0 0
Acquisition of machinery and equipment 12,068 164 886 4,088 737 1,148
Transfer payments 0 0 0 0 0 0
Other subsidiaries and payments 3 88 122 16 -12 2
Total budgetary expenditures Footnote 6 95,561 21,696 64,052 77,076 20,403 54,813
Date Modified: