Royal Canadian Mounted Police

Quarterly Financial Report for the Quarter Ended September 30, 2023

Statement outlining results, risks and significant changes in operations, personnel and program

On this page

  1. List of charts
  2. List of tables
  3. List of acronyms and abbreviations
  4. Introduction
  5. Highlights of fiscal quarter and fiscal year-to-date results
  6. Risks and uncertainties
  7. Significant changes in relation to operations, personnel and programs
  8. Annex A: Statement of Authorities (unaudited)
  9. Annex B: Budgetary expenditures by standard object (unaudited)

List of charts

List of tables

List of acronyms and abbreviations

CA
Chartered Accountant
CPA
Chartered Professional Accountant
DNA
Deoxyribonucleic acid
IT
Information technology
RCMP
Royal Canadian Mounted Police

1. Introduction

This quarterly financial 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. The report should be read in conjunction with the Main Estimates for 2023-24. The quarterly report has not been subject to an external audit or review.

Mandate

The Minister of Public Safety is the minister responsible for the Royal Canadian Mounted Police. The responsibilities of the RCMP are set out in section 18 of the Royal Canadian Mounted Police Act. The RCMP's mandate is multi-faceted, it includes preventing and investigating crime; maintaining peace and order; enforcing laws; contributing to national security; ensuring safety of state officials, visiting dignitaries and foreign missions; and providing vital operational support services to other police and law enforcement agencies within Canada and abroad.

Further information on the mandate, roles, responsibilities and programs of the RCMP can be found in the Main Estimates (Part II of Estimates) and the Departmental Plan and Departmental Results Report (Part III of Estimates).

Basis of presentation

This quarterly report has been prepared by management using the expenditure basis of accounting. The accompanying Statement of Authorities includes the RCMP's spending authorities granted by Parliament and those used by the department consistent with the Main Estimates and Supplementary Estimates (A) and allotment adjustments for Operating and Capital carry forwards. 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 money 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.

The RCMP 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 on a cash expenditure basis.

The RCMP is funded through annual appropriations and is, therefore, impacted by any changes in funding approved through Parliament. In addition, it receives a significant portion of funding through vote netted revenue from the provision of policing services to provinces, territories, municipalities and first nations communities, as well as from cost sharing agreements with provinces and territories for the provision of DNA analysis by the RCMP. The RCMP also receives vote netted revenue authorities to bill Parliamentary Protective Service for the provision of security services throughout the Parliamentary precinct and the grounds of Parliament Hill and for the administration of the RCMP's Pension Plan.

The RCMP's authorities are allocated in a number of discrete envelopes with varying sources of funds. A number of Special Purpose Allotments have been created over the years to manage the various programs and/or initiatives.

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

The following section provides financial results and explanations for the quarter ended September 30, 2023 as compared to the quarter ended September 30, 2022. The following graph illustrates the net budgetary authorities and expenditures for the quarter ended September 30, 2023, along with comparative figures for the quarter ended September 30, 2022, for the department's combined Vote 1 - Operating, Vote 5 - Capital, Vote 10 - Grants and Contributions and statutory elements.

Chart 1: Highlights of the fiscal quarter and the fiscal year-to-date

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2023-24 2022-23
Net budgetary authorities $4,814 million $4,393.7 million
Year to date $2,253.4 million $2,417.3 million
Second quarter expenditures to date $813.3 million $1,150.1 million

Significant changes to authorities

For the period ending September 30, 2023, the RCMP has $4,814.0 million in total authorities. This amount includes the Main Estimates, Supplementary Estimates (A), Operating and Capital Carry Forwards and proceeds from the disposal of Crown assets.

As illustrated in the table below, total authorities as at September 30, 2023 increased by $420.3 million compared to the second quarter of fiscal 2022-23.

Table 1: Cumulative variance in authorities available for use in 2023-24 in comparison to 2022-23 (in thousands of dollars) Table 1 footnote 1
Based on the end of the second quarter (September) Total authorities Year over year variance
2023-24 2022-23 Authorities Percentage
Gross operating 5,252,266 4,873,270 378,996 8%
Less: Vote netted revenues 2,032,365 1,771,565 260,800 15%
Vote 1 - Net operating 3,219,901 3,101,705 118,196 4%
Vote 5 - Capital 359,762 336,144 23,618 7%
Vote 10 - Grants and contributions 660,740 428,273 232,467 54%
Total voted authorities 4,240,404 3,866,122 374,282 10%
Pensions and other employee benefits - Members of the Force 483,366 455,479 27,887 6%
Contributions to employee benefit plans (public servants) 84,830 66,826 18,004 27%
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 5,000 5,000 0%
Proceeds from the disposal of Crown assets under the Surplus Crown Assets Act 432 295 137 46%
Total statutory authorities 573,628 527,600 46,028 9%
Total budgetary authorities 4,814,032 4,393,722 420,310 10%

Table 1 footnotes

Table 1 footnote 1

Totals may not add due to rounding.

Return to table 1 footnote 1 referrer

Explanation of changes in voted and statutory authorities

Vote 1 - Gross operating

The organization's Vote 1 increased by $379 million compared to the second quarter of 2022-23, mainly due to:

  • An increase of $260.8 million in Vote Netted Revenues as a result of higher ongoing collections from Contract Policing Partners resulting from the National Police Federation collective bargaining.
  • An increase of $78.5 million in funding for occupational and supplemental health costs for Members as designated under the Royal Canadian Mounted Police Act.
  • An increase of $19.8 million in compensation adjustments for public service employees and members of the RCMP.
  • An increase of $4.9 million in funding related to the organisation's Operating Budget Carry Forward.
  • A net increase of $15.0 related to following projects and initiatives:
    • Increase of $13.5 million for aviation safety and security modernisation initiatives.
    • Increase of $11.5 million in funding to address systemic racism in the RCMP.
    • Increase of $6.3 million in funding for the renewal of the federal framework for the legalization and regulation of cannabis.
    • Increase of $5.8 million in funding to address the Freedom Convoy and Emergencies Act related activities including public inquiries, parliamentary studies, Access to Information requests, criminal or civil proceedings, and conduct security investigations
    • Decrease of $9.7 million in funding for Canada's firearm control framework.
    • Decrease of $9.0 million in funding to provide a national body-worn camera program for frontline. officers to improve public transparency and accountability of the Royal Canadian Mounted Police.
    • Decrease of $3.4 million in funding to other previously approved and new initiatives.

Vote netted revenues

  • The organization's Vote Netted Revenues authority increased by $260.8 million compared to the second quarter of 2022-23 as a result of anticipated higher ongoing collections from Contract Policing Partners resulting from the National Police Federation collective bargaining.

Vote 5 - Gross capital

The organization's Vote 5 increase of $23.6 million, compared to second quarter of 2022-23, mainly due to:

  • An increase of $20.8 million in funding for real property and movable assets, as a result of a reprofile to address supply chain delays.
  • An increase of $11.0 million in funding to implement the National Cybercrime Solution Information Management and Information Technology Project.
  • An increase of $2.2 million in funding related to the organisations Capital Budget Carry Forward
  • A decrease of $7.8 million in funding in support of ensuring security and prosperity in the digital age initiative.
  • A decrease of $2.6 million in funding to other previously approved initiatives.

Vote 10 - Grants and contributions

The organization's Vote 10 increase of $232.5 million, compared to second quarter of 2022-23, mainly due to:

  • A net increase of $229.0 million in funding to compensate members of the Royal Canadian Mounted Police for injuries received in the performance of duty.
  • An increase of $3.1 million in contribution funding to enhance Canada's firearms control framework.
  • An increase of $0.4 million in grant funding to address systemic racism and discrimination in the Royal Canadian Mounted Police.

Statutory (Employee Benefits Plan)

The organization's Employee Benefits Plan authority increased by $46.0 million compared to the second quarter of 2022-23, mainly due to:

  • An increase of $38.7 million in Employee Benefit Plans as a result of changes to collective agreements, changes in the attribution of RCMP members and Public Service Employees costs, as well as changes in their respective rates.
  • An increase of $5.7 million in Public Service Employees and Members of the Force Employee Benefits Plan related to new and previously approved initiatives.
  • An increase of $1.5 million related to Compensation adjustments for public service employees and members of the RCMP.
  • An increase of $0.1 million related to the Proceeds from the Disposal of Crown Assets under the Surplus Crown Assets Act.

Explanation of significant variances from previous year expenditures

As demonstrated in table 2 below, the total year-to-date expenditures, for the period ended September 30, 2023, have decreased by $163.9 million (or 7%) compared to previous year.

Table 2: Expenditure of fiscal quarter (in thousands of dollars) Table 2 footnote 1
Expenditures during the quarter ended September 30, 2023 2023-24 2022-23 Variance Percentage
Vote 1 - Net Operating expenditures 1,603,200 1,831,760 (228,560) (12%)
Vote 5 - Capital expenditures 106,654 83,736 22,918 27%
Vote 10 - Grants and contributions 291,962 290,607 1,355 0%
Budgetary statutory authorities 251,545 211,188 40,357 19%
Total authorities 2,253,362 2,417,291 (163,929) (7%)

Table 2 footnotes

Table 2 footnote 1

Totals may not add due to rounding.

Return to table 2 footnote 1 referrer

The decrease in net budgetary expenditures ($164 million) is mainly due to the timing of revenue collections from Contract Policing Partners ($324.6 million). This decrease is offset by increases in many of the other standard objects ($160.7 million). The majority of the increases are related to higher personnel and employee benefit plan costs as a result of full time equivalents growth coupled with the ratification of new collective bargaining agreements. Additionally, Professional and special services increased as a result of incremental RCMP Member health costs.

The RCMP continues to experience increases in overall expenditures related to the implementation of newly approved initiatives and mandated responsibilities.

Lastly, supply chain issues and the cost of inflation has resulted in a steep rise in the price of goods and services. It is observed that multiple standard objects had significant increases in year-over-year expenditures primarily for these reasons.

Expenditures by standard object at quarter end (in thousands of dollars)

Table 3: Expended by standard object at quarter end (in thousands of dollars) table 3 footnote 1 table 3 footnote 2
Standard objects 2023-24 2022-23 Variance Percentage
Personnel 2,073,921 1,985,791 88,130 4%
Transportation and communications 125,537 112,822 12,715 11%
Information 1,846 1,292 554 43%
Professional and special services 303,807 269,294 34,513 13%
Rentals 61,219 53,231 7,988 15%
Repair and maintenance 44,330 35,179 9,151 26%
Utilities, materials and supplies 82,569 80,213 2,356 3%
Acquisition of land, buildings and works 31,457 35,248 (3,791) (11%)
Acquisition of machinery and equipment 104,770 85,424 19,346 23%
Transfer payments 293,355 292,498 857 0%
Public debt charges 274 292 (18) (6%)
Other subsidies and payments 37,568 48,652 (11,084) (23%)
Total gross budgetary expenditures 3,160,653 2,999,936 160,717 5%
Less: Revenues and other reductions 907,291 582,645 324,646 56%
Total net budgetary expenditures 2,253,362 2,417,291 (163,929) (7%)

Table 3 footnotes

Table 3 footnote 1

Totals may not add due to rounding.

Return to table 3 footnote 1 referrer

Table 3 footnote 2

There is not a direct correlation between total expenditure and revenue trends as expenditures reflect total RCMP, whereas revenues are related primarily to contract policing activities.

Return to table 3 footnote 2 referrer

Expenditure analysis by standard object

Personnel

The increase in expenditures by $88.1 million (or 4%) is attributed to a year-over-year increase in full time equivalents as well as higher pay expenditures for Regular Members and Public Servants. With the ratification of various collective agreements, the RCMP has seen year-over-year increases with regard to personnel expenditures, including associated employee benefits plan expenditures, through the second quarter of the fiscal year 2023-24 in comparison to 2022-23.

Transport and communications

The increase in expenditures by $12.7 million (or 11%) is mainly related to increases in the frequency and overall travel costs, as well as the rise in training costs and the timing of transactions in 2023-24.

Information

The increase in expenditures by $0.55 million (or 43%) is mainly attributed to the printing services for firearms communications regarding recent announcements and an increase in advertising and publication services due to increased effort in recruiting.

Professional and special services

The increase in expenditures by $34.5 million (or 13%) is mainly due to increased Member Health costs and Professional and Contracting services expenditures due to timing of invoice payments.

Rentals

The increase in expenditures by $8.0 million (or 15%) is mainly due to the increased cost of building rentals and the timing of invoices for service level agreements with Public Services and Procurement Canada.

Purchased repair and maintenance

The increase in expenditures by $9.2 million (or 26%) is mainly due to the various life cycle costs for assets, including Heating Ventilation and Air Conditioning, vehicle maintenance and structural repairs.

Acquisition of land, buildings and works

The decrease in expenditures by $3.8 million (or 11%) is mainly due to the timing of payments and the phases related to various capital projects.

Acquisition machinery and equipment

The increase in expenditures by $19.3 million (or 23%) is mainly due to incremental costs for the acquisition of vehicles, and increased costs related to equipment and office expenses, offset by decreases in software and communications equipment acquisitions.

Other subsidies and payments

The decrease in expenditures by $11.1 million (or 23%) is mainly due to the timing differences associated with clearing suspense accounts.

Revenues and other reductions

The increase in Vote netted revenues by $324.6 million (or 56%) is attributable to the timing of collections from contract partners year-over-year. The majority of first quarter invoices were collected by the end of second quarter this fiscal year versus third quarter last fiscal year.

3. Risks and uncertainties

The RCMP's risk environment, as noted in the 2021-24 Corporate Risk Profile, continues to help guide funding decisions. Five risks in particular have been identified with a High-risk rating:

  1. Recruitment, retention and modernized skillsets - the Risk that the RCMP will be unable to adequately attract and retain diverse groups of employees with the appropriate skills, attributes, characteristics and mindset to police the crimes of the future; and
  2. Expanding commitments - Risk that the RCMP's commitments continue to expand without sufficient resources, impeding its ability to deliver on priorities and core services.
  3. IT Infrastructure and Systems - the Risk that the RCMP's IT infrastructure, systems and applications will become increasingly inadequate to support the administrative and operational requirements of the organization.
  4. Technology - Risk that the RCMP may not have the technology to sufficiently combat the changing nature of crime.
  5. Employee wellness - Maximize opportunities to promote and optimize employee wellness as well as support employees who experience stress, trauma or serious injury as a result of the nature of policing work and the environments in which they operate.

Other risks noted in the Corporate Risk Profile are: strategic decision-making; transformation resistance; and, intelligence and information sharing.

Additionally, the operational nature of the RCMP is impacted by inflationary increases to cost of goods and services, and due to the size of the organization these types of increases have significant impacts on expenditures.

Quarterly monitoring of all identified corporate risks and their mitigations is ongoing.

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

By the end of the second quarter, the following change to the senior ranks of the department has occurred:

Rouben Khatchadourian, previously the Vice-President of Strategic Policy for Public Health Agency of Canada, became the Chief Strategic Policy and External Relations Officer for the Royal Canadian Mounted Police.

Approved by senior officials

Approved by:

_____________________________

Mike Duheme, Commissioner

Approved by:

_____________________________

Samantha Hazen, CPA, CA, Chief Financial Officer

Ottawa, Canada

Annex A: Statement of Authorities (unaudited)

Table 4: Statement of Authorities (unaudited) (in thousands of dollars)
Fiscal year 2023-24 Fiscal year 2022-23
Total available for use for the year ending March 31, 2024 Table 4 footnote 1 Used during the quarter ended September 30, 2023 Year to date used at quarter-end Total available for use for the year ending March 31, 2023 Table 4 footnote 1 Used during the quarter ended September 30, 2022 Year-to-date used at quarter-end
Gross operating expenditures 5,252,266 1,296,721 2,510,519 4,873,270 1,226,356 2,414,405
Less: vote netted revenues 2,032,365 800,729 907,318 1,771,565 383,839 582,645
Vote 1 - Net operating expenditures 3,219,901 495,992 1,603,201 3,101,705 842,517 1,831,760
Vote 5 - Capital expenditures 359,762 64,688 106,654 336,144 56,298 83,736
Vote 10 - Grants and contributions 660,740 146,152 291,962 428,273 145,412 290,607
Pensions and other employee benefits - Members of the Force 483,366 84,872 207,967 455,479 88,288 176,131
Contributions to employee benefit plans (public servants) 84,830 20,883 41,766 66,826 16,466 32,932
Pensions under the Royal Canadian Mounted Police Pension Continuation Act 5,000 682 1,392 5,000 907 1,891
Refunds of amounts credited to revenues in previous years 0 27 28 0 6 8
Proceeds from the disposal of Crown assets under the Surplus Crown Assets Act 432 0 392 295 226 226
Court awards 0 0 0 0 0 0
Statutory authorities 573,628 106,464 251,545 527,600 105,893 211,188
Total budgetary authorities 4,814,032 813,296 2,253,362 4,393,722 1,150,120 2,417,291

Table 4 footnotes

Table 4 footnote 1

Includes only authorities available for use and granted by Parliament at quarter-end as well as a statutory authority for proceeds from the disposal of Crown assets.

Return to table 4 footnote 1 referrer

Annex B: Budgetary expenditures by standard object (unaudited)

Table 5: Departmental budgetary expenditures by standard object (unaudited) (in thousands of dollars)
Fiscal year 2023-24 Fiscal year 2022-23
Planned expenditures for the year ending March 31, 2024 Expended during the quarter ended September 30, 2023 Year-to-date used at quarter-end Planned expenditures for the year ending March 31, 2023 Expended during the quarter ended September 30, 2022 Year-to-date used at quarter-end
Expenditures
Personnel 4,245,899 1,040,913 2,073,921 3,906,864 1,007,720 1,985,791
Transportation and communications 243,175 58,637 125,537 230,931 55,049 112,822
Information 4,163 1,002 1,846 3,659 854 1,292
Professional and special services 595,115 156,526 303,807 567,273 131,439 269,294
Rentals 160,032 33,365 61,219 150,832 26,933 53,231
Repair and maintenance 125,413 26,272 44,330 119,398 19,879 35,179
Utilities, materials and supplies 176,701 44,771 82,569 167,836 41,618 80,213
Acquisition of land, buildings and works 127,305 20,977 31,457 115,219 20,382 35,248
Acquisition of machinery and equipment 337,360 61,427 104,770 317,913 49,632 85,424
Transfer payments 665,740 146,835 293,355 433,273 146,319 292,498
Public debt charges 985 137 274 624 146 292
Other subsidies and payments 164,506 23,137 37,568 151,465 33,988 48,652
Total gross budgetary expenditures 6,846,396 1,613,999 3,160,653 6,165,287 1,533,959 2,999,936
Less revenues netted against expenditures 0 0 0 0 0 0
Vote netted revenues 2,032,365 800,703 907,291 1,771,565 383,839 582,645
Total revenues netted against expenditures 2,032,365 800,703 907,291 1,771,565 383,839 582,645
Total net budgetary expenditures 4,814,032 813,296 2,253,362 4,393,722 1,150,120 2,417,291
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