Quarterly Financial Report ending December 31, 2022

Copyright Board of Canada
Statement outlining results, risks and significant changes in operations, personnel and program
For the Quarter Ended December 31, 2022

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. This quarterly report should be read in conjunction with the Main Estimates.

As an economic regulator, an independent administrative tribunal and a key institution of Canada’s intellectual property ecosystem, the Copyright Board of Canada’s (the “Board”) plays the fundamental role of establishing fair and equitable tariffs and licences while ensuring fairness and timeliness of processes.

The Copyright Act (the “Act”) provides that the Board intervenes in three areas, namely approving tariffs for content whose rights are managed by collective societies, the granting of licences for the use of content for which the right owners cannot be found, and arbitration in the event a collective society and user cannot agree on royalties.

Basis of Presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Board’s spending authorities granted by Parliament and those used by the Board, consistent with the Main Estimates for the 2022-23 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 moneys 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.

As part of the performance reporting process, the Board prepares its annual departmental financial statements on a full accrual basis in accordance with TBS accounting policies, which are based on Canadian generally accepted accounting principles for the public sector. However, the spending authorities voted by Parliament remain on an expenditure basis.

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

Highlights of Fiscal Quarter Results

The total authorities used during the quarter ended December 31, 2022, were $1,089,000, an increase of $231,000 when compared to the same quarter last year. The increase in net budgetary expenditures for the quarter ending December 31, 2022, is a result of increased net operating expenditures and budgetary statutory authorities such as employee benefit plans.

Expenses in personnel increased by $277,000, rentals by $7,000 and by $9,000 in transportation and communication. However, there was a decrease of $55,000 in professional and special services expenditures and a 13% decrease in other subsidies and payments. All of these changes reflect operational needs and unanticipated constraints to planned spending, in part due to restrictions stemming from the pandemic (COVID-19).

Risks and Uncertainties:

The Board’s most significant expenditure is personnel which represents about 70% of its planned expenditures. This implies that whenever an employee departs due to retirement or resignation or that a new employee is hired to replace the departing one, there is a risk of substantial variation in quarterly expenditures. New resources to support the modernization of the Board, by increasing its efficiency and transparency, have also been put in place in the past quarter, in both permanent and temporary capacity. This has an impact on personnel expenditures.

The continued uncertainty of the pandemic situation has impacted operations across the Board, resulting in a reduced measure of control over actual expenditures. Given the small size of its budget, there is an increased risk of lapsed funds, due to the postponement of normal Board activities, new requirements for the return to the workplace initiative (hybrid model) and more judicious forecasting so that funds are available for any potential immediate need due to the pandemic situation. The Board continues to carefully monitor its finances to minimize the impact of this temporary situation and ensure that its resources are fully aligned with its level of operations once the situation stabilizes.

Approval by Senior Officials

Approved by,

Nathalie Théberge Deputy Head
Lara Taylor Chief Financial Officer

Statement of Authorities (unaudited)

  Fiscal Year 2022-2023
(in thousand of dollars) Total available for use for the year ending March 31, 2023* Used during the quarter ended December 31, 2022 Year to date used at quarter-end
Vote 45 - Net Operating expenditures 3,888 988 2,393
Budgetary statutory authorities      
Employee benefit plans 404 101 303
Total authorities 4,292 1,089 2,696
* Includes approved estimates documents as at quarter end.
 
  Fiscal Year 2021-2022
(in thousand of dollars) Total available for use for the year ending March 31, 2022* Used during the quarter ended December 31, 2022 Year to date used at quarter-end
Vote 45 - Net Operating expenditures 4,032 759 2,136
Budgetary statutory authorities      
Employee benefit plans 398 99 299
Total authorities 4,430 858 2,435
* Includes approved estimates documents as at quarter end.
  Variances
(in thousand of dollars) YTD YTD %   Q3 Q3 %
Vote 45 - Net Operating expenditures 257 12%   229 30%
Budgetary statutory authorities          
Employee benefit plans 4 1%   2 2%
Total authorities 261 11%   231 27%
* Includes approved estimates documents as at quarter end.

Table 1: Departmental budgetary expenditures by Standard Object (unaudited)

  Fiscal Year 2022-2023
(in thousand of dollars) Planned expenditures for the year ending March 31, 2023* Expended during the quarter ended December 31, 2022 Year to date used at quarter-end
Expenditures      
Personnel 2,697 956 2,327
Transportation and communications 100 24 35
Information 108 7 20
Professional and special services 650 79 193
Rentals 110 20 53
Repair and maintenance 115 8 8
Utilities, materials and supplies 23 1 4
Acquisition of machinery and equipment 80 5 49
Other subsidies and payments 5 (11) 7
Total net budgetary expenditures 3,888 1,089 2,696
* Includes approved estimates documents as at quarter end.
 
  Fiscal Year 2021-2022
(in thousand of dollars) Planned expenditures for the year ending March 31, 2022* Expended during the quarter ended December 31, 2021 Year to date used at quarter-end
Expenditures      
Personnel 3,088 679 2,049
Transportation and communications 100 15 19
Information 108 9 40
Professional and special services 650 134 259
Rentals 110 13 53
Repair and maintenance 115 - -
Utilities, materials and supplies 23 - 2
Acquisition of machinery and equipment 80 3 5
Other subsidies and payments 5 5 8
Total net budgetary expenditures 4,279 858 2,435
* Includes approved estimates documents as at quarter end.
  Variances
(in thousand of dollars) YTD YTD %   Q3 Q3 %
Expenditures          
Personnel 278 14%   277 41%
Transportation and communications 16 84%   9 60%
Information (20) -50%   (2) -22%
Professional and special services (66) -25%   (55) -41%
Rentals - 0%   7 54%
Repair and maintenance 8 -   8 -
Utilities, materials and supplies 2 100%   1 -
Acquisition of machinery and equipment 44 880%   2 67%
Other subsidies and payments -1 -13%   -16 320%
Total net budgetary expenditures 261 11%   -231 27%
* Includes approved estimates documents as at quarter end.