Quarterly financial report for the quarter ended June 30, 2026
On this page
- Statement outlining results, risks and significant changes in operations, personnel and programs
- Highlights of fiscal quarter results
Statement outlining results, risks and significant changes in operations, personnel and programs
Introduction
This report for the quarter ended June 30, 2026 has been prepared as required by section 65.1 of the Financial Administration Act and in the form and manner prescribed by the Treasury Board. The report has not been subject to an external audit or review and should be read in conjunction with Global Affairs Canada’s (GAC) Main Estimates and Supplementary Estimates for the current fiscal year.
Basis of presentation
This quarterly report has been prepared using an expenditure basis of accounting. 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 accompanying Statement of Authorities includes GAC's spending authorities granted by Parliament, and those used by GAC, consistent with the Main Estimates and Supplementary Estimates (as applicable) for the current 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.
GAC 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 are on an expenditure basis.
Highlights of fiscal quarter results
1. Significant changes to authorities
The following table shows the total budget available for use by GAC, which includes authorities available for use and granted by Parliament as at June 30.
| (in thousands of dollars) | Total available for use for the year ending March 31, 2027 | Total available for use for the year ending March 31, 2026 | Variance | |
|---|---|---|---|---|
| $ | % | |||
| Authorities | ||||
| Vote 1 - Operating expenditures | 2,268,393 | 2,394,364 | (125,971) | (5%) |
| Vote 5 - Capital expenditures | 267,262 | 226,805 | 40,457 | 18% |
| Vote 10 - Grants and contributions | 4,201,038 | 5,286,796 | (1,085,758) | (21%) |
| Vote 15 - Payments of pension, insurance and social security programs for locally-engaged staff | 120,518 | 121,350 | (832) | (1%) |
| Statutory authorities | ||||
| Payments to international financial institutions | 222,414 | 250,405 | (27,991) | (11%) |
| Contributions to employee benefit plans | 167,261 | 156,163 | 11,098 | 7% |
| Other statutory authorities | 3,232 | 2,058 | 1,174 | 57% |
| Total budgetary authorities | 7,250,118 | 8,437,941 | (1,187,823) | (14%) |
i. Authorities for operating expenditures
Authorities for operating expenditures decreased by $126 million or 5%, which is mainly explained by:
- Decrease of $103 million for the funding of the Presidency of the 2025 G7 Summit in Canada;
- Decrease of $17 million for the 2025 World Exposition Osaka; and
- Remaining decrease of $6 million is due to decreases and increases of smaller value.
ii. Authorities for capital expenditures
Authorities for capital expenditures increased by $40 million or 18%, which is mainly explained by:
- Increase of $56 million due to the reinvestment of revenues earned from the sale or transfer of real property in capital projects;
- Increase of $17 million for the grants and contributions transformation initiative;
- These increases were partly offset by a decrease of $30 million in duty of care funding for Canadian missions abroad; and
- Remaining decrease of $3 million is due to decreases and increases of smaller value.
iii. Authorities for grants and contributions
Authorities for grants and contributions decreased by $1,086 million or 21%, which is mainly explained by:
- Decrease of $292 million due to the ongoing comprehensive expenditure review (CER);
- Decrease of $669 million in funding for the following programs and priorities:
- Canada’s International Climate Finance programs;
- International humanitarian assistance priorities;
- Canada's International Biodiversity program; and
- Diversifying Canada’s trade and investment opportunities.
- Decrease of $90 million in funding to help developing countries address the impact of climate change;
- Decrease of $20 million for the grants and contributions transformation initiative; and
- Remaining decrease of $15 million is due to decreases and increases of smaller value.
2. Significant changes to quarterly budgetary expenditures by standard object and by authorities
The following table shows the net budgetary expenditures and authorities used for the quarter ended June 30, 2026 and the comparison for the same period last fiscal year.
| (in thousands of dollars) | April to June 2026-27 | April to June 2025-26 | Variance | |
|---|---|---|---|---|
| $ | % | |||
| Expenditures | ||||
| Salaries and employee benefits | 476,947 | 433,151 | 43,796 | 10% |
| Professional and special services | 75,959 | 72,244 | 3,715 | 5% |
| Rentals | 73,063 | 77,496 | (4,433) | (6%) |
| Transportation and communications | 31,129 | 28,480 | 2,649 | 9% |
| Information | 3,532 | 6,351 | (2,819) | (44%) |
| Repairs and maintenance | 3,882 | 3,442 | 440 | 13% |
| Utilities, materials and supplies | 7,524 | 7,402 | 122 | 2% |
| Acquisition of land, buildings and works | 6,872 | 2,472 | 4,400 | 178% |
| Acquisition of machinery and equipment | 4,745 | 4,296 | 449 | 10% |
| Other | 1,314 | 520 | 794 | 153% |
| Total operating and acquisition | 684,967 | 635,854 | 49,113 | 8% |
| Transfer payments | 957,403 | 1,227,344 | (269,941) | (22%) |
| Total gross budgetary expenditures | 1,642,370 | 1,863,198 | (220,828) | (12%) |
| Revenue credited to the vote | 23,147 | 35,332 | (12,185) | (34%) |
| Total net budgetary expenditures | 1,619,223 | 1,827,866 | (208,643) | (11%) |
| Authorities | ||||
| Vote 1 - Operating expenditures | 564,391 | 524,309 | 40,082 | 8% |
| Vote 5 - Capital expenditures | 33,429 | 16,962 | 16,467 | 97% |
| Vote 10 - Grants and contributions | 586,755 | 919,940 | (333,185) | (36%) |
| Vote 15 - Payments of pension, insurance and social security programs for locally-engaged staff | 21,882 | 19,596 | 2,286 | 12% |
| Statutory authorities | ||||
| Payments to international financial institutions | 130,389 | 153,284 | (22,895) | (15%) |
| Payments to FinDev Canada | 240,100 | 154,000 | 86,100 | 56% |
| Contributions to employee benefit plans | 42,063 | 39,638 | 2,425 | 6% |
| Other statutory authorities | 214 | 137 | 77 | 56% |
| Total budgetary authorities | 1,619,223 | 1,827,866 | (208,643) | (11%) |
i. Operating and acquisition expenditures
Operating and acquisition expenditures increased by $49 million or 8%, which is mainly explained by:
- Increase of $44 million in salaries and employee benefits mainly due to a third payroll on June 30, 2026, whereas there were only two in June 2025;
- Increase of $4 million in the acquisition of land, buildings and works due to construction work at the High Commission of Canada in Barbados; and
- Remaining increase of $1 million is due to increases and decreases of lesser value.
ii. Transfer payments
Transfer payments decreased by $270 million or 22%, which is mainly explained by:
- Decrease of $249 million due to timing differences in payments of grants and contributions to the United Nations and related organizations for international development assistance;
- Decrease of $23 million due to timing differences in the issuance of advances to international financial institutions and to the decrease in the amount of the 17th replenishment for Africain Development Bank Fund; and
- Remaining increase of $2 million is due to increases and decreases of lesser value.
3. Risks and uncertainties
As a federal department delivering a complex mandate in a rapidly changing international environment, GAC is influenced by many factors. These factors include political and security conditions, economic controls, global inflation, social contexts and shifting global trends, including geopolitical dynamics and climate risks.
At any time, the aforementioned factors could affect GAC’s operations, whether domestically or abroad, with the potential for significant impacts including on the safety and security of its personnel at missions. As such, effective risk management is critical to GAC’s ability to deliver results for Canadians. On the operational level, GAC regularly undertakes reviews to examine operational risks and assess the progress and effectiveness of ongoing responses at missions and at headquarters. Risks are managed diligently by program leads, and an agile approach is used to avoid undue risk to program integrity. On the strategic front, the top risks facing GAC are established bi-annually in the Enterprise Risk Profile (ERP). The department is currently developing the 2026–28 ERP, which identifies the principal risks facing GAC over the next two years and outlines corresponding risk response measures. In addition, in support of effective risk management, GAC’s internal audit function provides independent assurance and advisory services to assess the adequacy of risk responses and internal controls. These insights help inform senior management’s understanding of key risks and support continuous improvement in risk mitigation strategies.
The GAC Enterprise Risk Management Strategy guides departmental officials in managing risks that affect strategic plans and priorities. With this approach, GAC’s Strategic Risk Landscape and the ERP serve to identify unique pressures associated with GAC’s operating environment. Work on GAC’s top risks is also incorporated into governance committee agendas to ensure comprehensive, department-wide engagement on key corporate priorities in support of a more agile and responsive department. For a second year, GAC is implementing the Risk and Compliance Process, which is a whole-of-government requirement by Treasury Board Secretariat. In addition to its corporate risks, GAC conducts self-assessments of risk across 13 defined Areas of Focus to support deputy heads in identifying where risks exist as well as related mitigation measures.
GAC continues to be pragmatic and versatile in its management of risks and uncertainties associated with resources. GAC has a five-year investment and procurement plan, which includes a strategy for how risks will be managed throughout the timeframe. To this effect, GAC is preparing to implement measures to address the reductions announced in Budget 2025, beginning in fiscal year 2026-2027. These measures include refocusing advocacy and diplomacy efforts, implementing targeted reforms within the Trade and Investment portfolio, aligning Development, Peace, and Security programming with strategic priorities, and realizing efficiencies across Canada’s mission network. GAC recognizes that workforce adjustment measures will impact how GAC manages its corporate risks. GAC is actively reassessing investment and workplan priorities on several fronts, which includes risk identification and mitigation planning.
GAC has applied a range of measures to manage risks associated with fraud, such as training on awareness and detection. The risk of fraud is also considered in all audit engagements. GAC has finalized a departmental Fraud Risk Management Maturity Assessment and will be starting the implementation of the recommendations. GAC also continues to assess, on a risk basis, its internal controls over financial reporting at headquarters and at missions and reports on its internal controls over financial management, as per the requirements of the Treasury Board Policy on financial management. On the transfer payment programming side, GAC considers both fiduciary and non-fiduciary risks to guide the allocation of grants and contributions, as well as its recipient organizations audit planning. Additionally, when appropriate, GAC continues to strengthen the financial management capacity of partner organizations.
4. Significant changes in operations, personnel and programs
During the quarter, changes occurred in relation to CER to ensure that spending is responsible and cost-effective and delivers results for Canadians.
Approved, as required by the TB Policy on Financial Management:
Arun Thangaraj
Deputy Minister of Foreign Affairs
Shirley Carruthers
Assistant Deputy Minister and Chief Financial Officer
- Date modified:
