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

1. Introduction

This quarterly financial report should be read in conjunction with the Main Estimates and any Supplementary Estimates approved in a given year by the date of this report. It 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 financial report has not been subject to an external audit or review.

1.1 Authority, Mandate and Programs

The Northern Pipeline Agency (Agency) was established by the Northern Pipeline Act in 1978 and, in the context of the 1977 Agreement between Canada and the United States of America on Principles Applicable to a Northern Natural Gas Pipeline. The Agency has a mandate to carry out federal responsibilities in respect of the planning and construction of the Canadian portion of the Alaska Natural Gas Pipeline (AHGP). The Agency plays a key role in supporting efficient and expeditious regulatory approval, while ensuring environmental protection and social and economic benefits for Canada.

Further details on the Agency’s authority, mandate and programs are available in Part II of the 2021-2022 Main Estimates.

1.2 Basis of Presentation

This quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Agency’s spending authorities granted by Parliament, and those used by the Agency are consistent with the Main Estimates for the 2021-22 fiscal year for which full supply has been released by Parliament. 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 Agency uses the full accrual method of accounting to prepare and present its annual unaudited departmental financial statements that are part of the departmental results reporting process. However, the spending authorities voted by Parliament remain on an expenditure basis.

2. Highlights of the Third Fiscal Quarter and Comparative Results

This Quarterly Financial Report reflects the results as at December 31, 2021, including Main Estimates, and the details presented in this report focus on and compare the third quarter results of 2021-22 with those of 2020-21.

2.1 Authorities Available for Use and Planned Spending for the Year

As at December 31, 2021, the Agency has $571,820 in authorities available for use in 2021-22 compared to $1,083,120 in 2020-21, representing a decrease of $511,300. The reduction is mainly as a result of the ending of the transfer payment program as of March 31, 2021.

2.2 Authorities Used and Amounts Expended during the third Quarter

During the third quarter of 2021-22, the Agency spent $36,105 or 6.3% of the total funding available, compared to $33,620 or 3.1% of the total funding available the same period in 2020-21, for a net increase of $2,485. This minor net increase was primarily due to a slight increase in salary costs compared to the third quarter of last year.

3. Risks and Uncertainties

In planning for an efficient and effective review and regulation of the project, the Agency must adapt to project developments by the proponent, i.e., to carry out its responsibilities and to make the necessary preparations in concert with the pace of the project’s development.

3.1 Risk Mitigation Framework

The Agency identifies and responds to the pace of the project’s development by continual corporate-level forecasting, tracking and management of issues that could affect or require a response from the Agency. For example, on March 30, 2012, ExxonMobil, ConocoPhillips, BP and TransCanada PipeLines Limited (now TC Energy) announced a work plan to assess liquefied natural gas (LNG) exports from south-central Alaska as an alternative to a natural gas pipeline through Canada. In February 2013, TC Energy notified the Agency that no further work is planned on the AHGP for now, and of their intent to maintain the AHGP assets in Canada. To align with the reduction in the AHGP project activities for the foreseeable future, the Agency has scaled down its operations, while continuing to fulfill Canada’s obligations as set out in the Act.

4. Significant Changes in Relation to Operations, Personnel and Programs

Subsequent to quarter end, Prime Minister Justin Trudeau announced that effective January 10, 2022, Mr. John Hannaford would become Deputy Minister of Natural Resources Canada, and as a result, the Commissioner for the Agency.

There were no significant impacts arising from the outbreak of the COVID-19 pandemic during the third quarter of 2021-22.

Original signed by:

John F.G. Hannaford
Commissioner

February 28, 2022
Ottawa, Canada

 

Wayne Marshall
Director of Operations

February 9, 2022
Calgary, Canada

Table 1: Statement of Authorities (unaudited) (in dollars)
Budgetary Authorities Fiscal year 2021-22 Fiscal year 2020-2021
Footnote *Total available for use for the year ending March 31, 2022 Used during the quarter ended December 31, 2021 Year-to-date used at quarter-end Footnote *Total available for use for the year ending March 31, 2021 Used during the quarter ended December 31, 2020 Year-to-date used at quarter-end
Net Operating expenditures - Vote 1 540,000 28,150 55,065 1,055,000 26,590 64,798
Statutory Authority - Employee Benefit Plans 31,820 7,955 23,865 28,120 7,030 21,090
Total Budgetary Authorities 571,820 36,105 78,930 1,083,120 33,620 85,888
Table 2: Budgetary Expenditures by Standard Object (unaudited) (in dollars)
Expenditures: Fiscal year 2021-22 Fiscal year 2020-2021
Footnote *Planned expenditures for the year ending March 31, 2022 Expended during the quarter ended December 31, 2021 Year-to-date used at quarter-end Footnote *Planned expenditures for the year ending March 31, 2021 Expended during the quarter ended December 31, 2020 Year-to-date used at quarter-end
Personnel 246,820 23,509 61,143 218,120 21,252 58,785
Transportation and communication 25,000 - - 25,000 - -
Information 1,000 - - 1,000 - -
Professional and special services 280,000 10,000 10,000 280,000 10,000 20,000
Rentals 12,000 2,596 7,787 12,000 2,368 7,103
Repair and maintenance 1,000 - - 1,000 - -
Utilities, materials and supplies 1,000 - - 1,000 - -
Acquisition of machinery and equipment 5,000 - - 5,000 - -
Transfer Payments - - - 540,000 - -
Total net budgetary expenditures 571,820 36,105 78,930 1,083,120 33,620 85,888
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