Section II: Expenditure Overview

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Actual Expenditures

Budgetary Financial Resources (dollars)

2015–16 Main Estimates	2015–16 Planned Spending	2015–16 Total Authorities Available for Use^{Footnote 1}	2015–16 Actual Spending (authorities used)^{Footnote 2}	Difference (actual minus planned)
147,934,112	147,934,112	214,680,883	144,218,577	(3,715,535)

Human Resources (Full-Time Equivalents [FTEs])

2015–16 Planned	2015–16 Actual	2015–16 Difference (actual minus planned)
718	666	(52)

Budgetary Performance Summary

Budgetary Performance Summary for Program(s) and Internal Services (dollars)

Strategic Outcome(s), Program(s) and Internal Services	2015–16 Main Estimates	2015–16 Planned Spending	2016–17 Planned Spending	2017–18 Planned Spending	2015–16 Total Authorities Available for Use	2015–16 Actual Spending (authorities used)	2014–15 Actual Spending (authorities used)	2013–14 Actual Spending (authorities used)
Regulation and Supervision of Federally Regulated Financial Institutions	78,956,478	78,956,478	80,602,151	82,220,312	78,956,478	76,831,313	79,674,770	75,599,505
Regulation and Supervision of Federally Regulated Private Pension Plans	4,105,818	4,105,818	4,178,274	4,259,335	4,105,818	3,984,053	3,944,690	4,342,314
Subtotal	83,062,296	83,062,296	84,780,425	86,479,647	83,062,296	80,815,366	83,619,460	79,941,819
Actuarial Valuation and Advisory Services	6,130,074	6,130,074	5,710,390	5,778,758	6,130,074	5,443,559	5,092,171	5,209,861
Subtotal	6,130,074	6,130,074	5,710,390	5,778,758	6,130,074	5,443,559	5,092,171	5,209,861
Internal Services Subtotal	58,741,742	58,741,742	59,213,140	58,249,273	58,741,742	57,959,652	57,597,243	65,650,453
Total	147,934,112	147,934,112	149,703,955	150,507,678	147,934,112	144,218,577	146,308,874	150,802,133

OSFI’s 2015-16 actual expenditures were $3.7 million or 2.5% lower than planned due to a higher number of vacant positions and longer periods than anticipated to staff them. OSFI’s total expenditures^{Footnote 3} in the next two years are expected to remain relatively stable, increasing slightly for normal economic and merit adjustments in accordance with collective agreements.

Fluctuations between 2013-14 and 2017-18 are largely due to non-recurring costs. At the program level, the significant changes are as follows:

Year-over-year spending in the Regulation and Supervision of Federally Regulated Financial Institutions program decreased by 3.6% in 2015-16, largely due to a greater number of vacant positions and a one-time payment related to the Government of Canada’s move to an employee compensation model of “pay in arrears” that occurred in 2014-15. Spending in this program is expected to increase by 4.9% in 2016-17 as vacant positions are staffed.
Spending in the Regulation and Supervision of Federally Regulated Private Pension Plans program decreased by 9.2% in 2014-15 due to vacant positions and legal fees incurred in 2013-14. Staffing levels are expected to return to full complement in 2016-17.
Spending in the Actuarial Valuation and Advisory Services decreased by 2.3% in 2014-15 due to the triennial Canada Pension Plan peer review that occurred in 2013-14. Spending in 2015-16 increased by 6.9% with the filling of approved vacant positions and new positions to address incremental work related to actuarial valuations. Expenditures in 2016-17 include costs for the triennial Canada Pension Plan review.
Spending in Internal Services decreased by 12.3% in 2014-15 as a result of non-recurring costs in 2013-14 related to the curtailment of severance benefit plans for unionized employees, investments in OSFI’s Information and Technology Renewal Program, which was completed in 2014-15, and the settlement of a pay equity claim dating from 1987 to 1997 that was previously provisioned for but paid out in 2013-14. The reduction of 1.6% in 2017-18 relates to lower than planned spending on facilities and information technology initiatives. ^{Footnote 4}

Departmental Spending Trend

The graph above represents OSFI’s actual and planned spending from 2013-14 to 2018-19. Statutory expenditures, which are recovered from respendable revenue^{Footnote 5}, represent 99.4% of total expenditures. The remaining 0.6% of OSFI’s spending is funded from a Parliamentary appropriation for actuarial services related to federal public sector pension and benefit plans.

Expenditures by Vote

For information on OSFI’s organizational voted and statutory expenditures, consult the Public Accounts of Canada 2016.

Alignment of Spending With the Whole-of-Government Framework

Alignment of 2015-16 Actual Spending With the Whole-of-Government Framework (dollars)

Program	Spending Area	Government of Canada Outcome	2015–16 Actual Spending
1.1 Regulation and Supervision of Federally Regulated Financial Institutions	Economic Affairs	Strong economic growth	76,831,313
1.2 Regulation and Supervision of Federally Regulated Private Pension Plans	Economic Affairs	Income security and employment for Canadians	3,984,053
2.1 Actuarial Valuation and Advisory Services	Economic Affairs	Income security and employment for Canadians	5,443,559

Total Spending by Spending Area (dollars)

Spending Area	Total Planned Spending	Total Actual Spending
Economic Affairs	89,192,370	86,258,925
Social Affairs	0	0
International Affairs	0	0
Government Affairs	0	0

Financial Statements and Financial Statements Highlights

Financial Statements
The financial statements are included in the 2015-16 Annual Report available on OSFI’s website.

Financial Statements Highlights
Over the course of 2015-16, OSFI continued to operate on a full accrual accounting basis, in accordance with International Financial Reporting Standards.

The tables below provide highlights from OSFI’s Statement of Operations and Statement of Financial Position, as presented in its audited financial statements. As such, there are differences between these tables and those presented in other sections of the Departmental Performance Report, which are prepared on the appropriation (i.e., modified cash) basis of accounting, in accordance with the Guide to the Preparation of Part III of the 2015-16 Estimates. Typically the differences stem from the accounting treatment of capital expenditures and accounts receivable.

Condensed Statement of Operations (unaudited)
For the Year Ended March 31, 2016 (dollars)
Financial Information	2015–16 Planned Results	2015-16 Actual	2014–15 Actual	Difference (2015–16 actual minus 2015–16 planned)	Difference (2015–16 actual minus 2014–15 actual)
Total expenses	150,000,000	143,534,744	144,810,235	(6,465,256)	(1,275,491)
Total revenues	149,054,942	142,589,686	143,865,177	(6,465,256)	(1,275,491)
Net cost of operations before government funding and transfers	(945,058)	(945,058)	(945,058)	0	0

OSFI’s Future-Oriented Statement of Operations is available on OSFI’s website.

OSFI is funded mainly through asset-based, premium-based or membership-based assessments on the financial institutions and private pension plans that it regulates and supervises, and a user-pay program for selected services. OSFI also receives revenues for cost-recovered services and a small parliamentary appropriation for actuarial services relating to public sector employee pension and insurance plans. Overall, on an accrual basis of accounting, OSFI recovered all its expenses for the year.

Total expenses were $143.6 million, a $1.3 million or 0.9% decrease from the previous year, and $6.5 million lower than planned. The year-over-year decrease was primarily attributable to lower professional services costs due to the completion in 2014-15 of OSFI’s Information and Technology Renewal Program. These were partially offset by an increase in office rental costs as a result of additional space to accommodate the previous year’s growth in staff and normal annual escalation of existing lease rates.

Condensed Statement of Financial Position (unaudited)
As at March 31, 2016 (dollars)
Financial Information	2015–16	2014–15	Difference (2015–16 minus 2014–15)
Total net liabilities	45,986,000	46,683,000	(697,000)
Total net financial assets	50,974,000	51,752,000	(778,000)
Departmental net debt	4,988,000	5,069,000	(81,000)
Total non-financial assets	20,000,000	19,919,000	81,000
Departmental net financial position	24,988,000	24,988,000	0

Total net financial assets at the end of 2015-16 were $51.0 million, a decrease of $0.8 million from the previous year. A decrease in trade and other receivables, driven by lower user fees and charges related to financial institutions assigned a stage rating, was partly offset by an increase in the Cash Entitlement account, which represents the amount that OSFI is entitled to withdraw from the Consolidated Revenue Fund without further authority.

Total net liabilities were $46.0 million at the end of 2015-16, which was $0.7 million lower than the previous year. The reduction was driven by a decrease in unearned base assessments, which represent the difference between billed estimates and actual costs incurred for the year, and a decrease in the severance liability as a result of payments to eligible departing employees. These were partly offset by an increase in accrued salaries and benefits, mainly for the estimated economic adjustments for fiscal year 2015-2016 that are expected to become payable once new collective agreements for that year are reached with OSFI’s two unions.

Footnotes

Footnote 1

The difference between Total Authorities Available for Use and Planned Spending represents an available statutory contingency, duly reported in Public Accounts, which is not part of planned spending.

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Footnote 2

The majority of OSFI’s expenditures are recovered via respendable revenue. In order to provide an accurate representation of OSFI’s spending, amounts shown reflect gross expenditures.

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Footnote 3

The cost of new enabling technology to support OSFI’s updated supervisory methodology and processes has not yet been determined and will be reflected in future budgetary estimates.

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Footnote 4

As noted for total expenditures above, the cost of new enabling technology to support OSFI’s updated supervisory methodology and processes has not yet been determined and will be reflected in future budgetary estimates.

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Footnote 5

OSFI is funded mainly through asset-based, premium-based or membership-based assessments on the financial institutions and private pension plans that OSFI regulates and supervises, cost-recovered services, and a user-pay program for selected services.

Return to footnote 5 referrer

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