Quarterly Financial Report for the quarter ended June 30, 2025

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

Table of contents

  1. Introduction
  2. Highlights of fiscal quarter and fiscal year-to-date results
  3. Risks and uncertainties
  4. Significant changes in relation to operations, personnel and programs
  5. Approval by senior officials
  6. Appendix A

1. Introduction

This quarterly financial report should be read in conjunction with the Main Estimates for fiscal year 2025-26. 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. For the purposes of both the Main and Supplementary Estimates, the Department is referred to as the Department of Indigenous Services Canada.

The Department of Indigenous Services Canada (DISC) was first established by Order-in-Council (P.C. 2017-79) on November 30, 2017. The Budget Implementation Act (BIA) of 2019 established Indigenous Services Canada (ISC) with the enactment of the Department of Indigenous Services Act (DISA).

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

1.1 Authority, Mandate and Departmental Results

Indigenous Services Canada (ISC) works collaboratively with partners to improve quality of life and access to high quality services for Indigenous Peoples. Its vision is to support First Nations, Inuit and Métis to design, manage and deliver services to their communities.

The Minister of Indigenous Services is responsible for this organization.

Further details on ISC's authority, mandate and department results can be found in Part roman numeral 2 of the Main Estimates and the Departmental Plan.

1.2 Basis of presentation

This quarterly report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes the Department's spending authorities granted by Parliament, and those used by the Department consistent with the Main Estimates for the 2025-26 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 funds 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 Department 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 an expenditure basis.

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

This section:

As of the first quarter, the Department has total budgetary authorities of $25.3 billion for 2025-26. Indigenous Services Canada (ISC) is composed of the following sectors: Regional Operations (RO), the Education and Social Development Program and Partnerships (ESDPP), Lands and Economic Development (LED), First Nations Child and Family Services (FNCFS), First Nations and Inuit Health Branch (FNIHB) and Internal Services.

Highlights of the fiscal quarter and the year-to-date results (Unaudited)
(In thousands dollars)
Budgetary Authority Authorities available for the year ending Expenditures for Q1 Year-to-date expenditures
March 31, 2026 March 31, 2025 Variance 2025-26 (June 30, 2025) 2024-25 (June 30, 2024) Variance Q1 2025-26 (April 1 to June 30, 2025) Q1 2024-25 (April 1 to June 30, 2024) Variance
Vote 1: Operating Expenditures 4,182,385 2,908,532 1,273,853 752,513 690,293 62,220 752,513 690,293 62,220
Vote 5: Capital Expenditures 6,514 6,386 128 252 326 (74) 252 326 (74)
Vote 10: Grants and Contributions 21,132,537 20,326,678 805,859 5,605,362 7,359,757 (1,754,395) 5,605,362 7,359,757 (1,754,395)
Total 25,321,436 23,241,596 2,079,840 6,358,127 8,050,376 (1,692,249) 6,358,127 8,050,376 (1,692,249)

2.1 Statement of voted authorities

As per the highlights of the fiscal quarter and the year-to-date results table, total budgetary authorities available for use in 2025-26 increased by $2.1 billion from the previous year:

  • Vote 1 authorities increase by $1.3 billion
  • Vote 5 authorities increase by $0.1 million
  • Vote 10 authorities increased by $805 million

Vote 1 Operating expenditures

Operating authorities for the year have increased by $1.3 billion in the first quarter of 2025-26 compared to the same period of the previous year, mainly due to the following:

  • $855 million for Supplementary Health Benefits;
  • $211 million for Jordan's Principle and the Inuit Child First Initiative;
  • $106 million for Child and Family Services;
  • $49 million for Public Health Promotion and Disease Prevention;
  • $15 million for Primary Health Care;
  • $5 million for Community Infrastructure.

Offset by a funding decrease for the following program:

  • $6 million for Income Assistance.

Vote 10 Grants and Contributions

Grants and Contributions authorities for the year have increased by $0.8 billion in the first quarter of 2025-26 compared to the same period of the previous year, mainly due to the following:

  • $448 million for Elementary and Secondary Education;
  • $348 million for Public Health Promotion and Disease Prevention;
  • $263 million for Income Assistance;
  • $98 million for Indigenous Governance and Capacity Supports;
  • $80 million for Supplementary Health Benefits;
  • $79 million for Post-Secondary Education;
  • $74 million for Communities and the Environment;
  • $69 million for Health Systems Support;
  • $63 million for Indigenous Entrepreneurship and Business Development;
  • $43 million for Home and Long-Term Care;
  • $26 million for Safety and Prevention Services;
  • $12 million for Community Economic Development.

Offset by a funding decrease for the following programs:

  • $620 million for Community Infrastructure;
  • $124 million for Primary Health Care;
  • $37 million for Urban Programming for Indigenous Peoples;
  • $13 million for Jordan's Principle and the Inuit Child First Initiative.

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $6.4 billion for the quarter ended June 30, 2025.

Departmental Budgetary Expenditures were $1.7 billion less than the same quarter in 2024-25. As per the Departmental Budgetary Expenditures by Standard Object tables, the decrease for the quarter is mainly due to the changes listed below:

The following table provides a detailed explanation of these changes by standard object (Unaudited)
(In thousands dollars)
Standard Object Changes to Standard Object expenditures Variance between 2025-26 Q1 and 2024-25 Q1 expenditures Variance between 2025-26 year-to-date and 2024-25 year-to-date expenditures
Expenditures:
1-Personnel   3,832 3,832
2-Transportation and communications The increase is due to significant increases in client and inflationary pressure compared to last year. 13,997 13,997
3-Information   277 277
4-Professional and special services The decrease is primarily attributed to internal financial control changes that delayed payments for Jordan's Principle and the Inuit Child First Initiative, partially offset by inflation-related costs in the Supplementary Health Benefits program. (7,120) (7,120)
5-Rentals   (260) (260)
6-Purchased repair and maintenance   (236) (236)
7-Utilities, materials and supplies The increase in Supplementary Health Benefits is due to a timing difference, with a payment made in June instead of July as in the previous year. 53,043 53,043
8-Acquisition of land, buildings and works   0 0
9-Acquisition of machinery and equipment   1,985 1,985
10-Transfer payments See detail below for Transfer Payment ExpendituresTable note * (1,754,395) (1,754,395)
11-Public debt charges   0 0
12-Other subsidies and payments   (1,747) (1,747)
Total gross budgetary expenditures   (1,690,624) (1,690,624)
Less Revenues netted against expenditures
Services and Benefits to Individuals   (1,625) (1,625)
Total Revenues netted against expenditures   (1,625) (1,625)
Total net budgetary expenditures   (1,692,249) (1,692,249)
Table note 1

The overall decrease of $1.7 billion in transfer payment expenditures is mainly due to the following:

Return to table note * referrer

  • $1.3 billion reduction in Community Infrastructure due to a one-time payment for the Northen Ontario Grid Connection Project in 2024-25;
  • $422 million decrease for Jordan’s Principle due to a backlog of group requests and slower processing following the Operational Bulletin implementation;
  • $297 million decrease in Child and Family Services caused by delayed release of frozen funds, which postponed updates to Contribution Agreements;
  • $154 million reduction in the Urban, Rural and Northern Housing Initiative due delayed funding approvals;
  • $85 million decrease in Emergency and Management Assistance program due to delayed funding availability;
  • $11 million reduction in Primary Health Care due to Northern Medical Travel authority discussions.

Offset by increases in:

  • $109 million for Child and Family Services from a rise in Indigenous Governing Bodies with coordination agreements;
  • $100 million for Elementary and Secondary Education program expenditures due to additional funding received through Budget 2024 in order to ensure on reserve continued provincial comparability;
  • $54 million for Health System Support due to increased BC Tripartite expenditures and timing differences in payments this year compared to the same period last year;
  • $54 million for Aboriginal Entrepreneurship Program expansion, including support for Indigenous Women Entrepreneurs and Métis Capital Corporations;
  • $49 million for Income Assistance primarily due to incremental resources received, which allowed transfers to recipients earlier in this fiscal year;
  • $48 million for Post-Secondary Education mainly due to a timing difference of payments compared to the previous fiscal year;
  • $29 million for Public Health Promotion and Disease Prevention program expenditures due to a timing difference of payments compared to the previous fiscal year;
  • $22 million for Communities and Environment mainly due to an increase in the Federal Contaminated Sites Action Plan, the First Nation Land Management and Waste Management initiative;
  • $16 million for Indigenous Governance and Capacity Support primarily due to a timing of payments and an increase in the number of New fiscal Relationship recipients, who receive payments at the beginning of the fiscal year;
  • $14 million for Community Economic Development mainly due toa timing difference of payments related to the support of Indigenous participation in economically sustainable clean energy projects and Tourism;
  • $11 million increase for Safety and Prevention Service mainly due to a timing difference of payments compared to the previous fiscal year.

3. Risks and uncertainties

The 2025–26 Corporate Risk Profile (CRP) outlines the Department’s key risks for the fiscal year. Among these, challenges in implementing complex policy reforms, pressures on health and education systems, limitations in infrastructure funding and design, and the need for improved coordination across jurisdictions continue to significantly impact the Department’s ability to achieve its results. In parallel, financial and operational risks, such as delays in service modernization, outdated internal processes, and limited agility in systems and controls, compounded by a reduction in resources due to decreased government spending, threaten the Department’s capacity to manage growing complexity and demand. Persistent backlogs in financial reporting, coupled with timing issues in supply and allocation, may also delay funding access and undermine the Department’s ability to deliver timely, coordinated, and community-informed services.

The evolving fiscal landscape along with the complexities of discretionary funding, has created difficulties in consistently supporting the essential services that are mandated or legally required, particularly those driven by demand. This situation has introduced key risks prompting various efforts to address and mitigate the uncertainties associated with securing predictable and sustainable funding for the delivery of several of ISC's core services.

The Department delivers its programs and services mainly through transfer payments to Indigenous recipients. Recipients continue to face a range of challenges including population growth, unforeseen cost increases, growing demand for services, labor shortages, and other external factors. These challenges may impact the recipients' abilities to deliver projects or spend as planned, particularly in smaller communities lacking resources to address the loss. Mitigation strategies to address these challenges, such as initiatives to harmonize transfer payment program terms and conditions to improve flexibility, responsiveness, and alignment with community needs.

The Department has implemented an Integrated Risk Management Framework that aims to enhance risk data collection, analysis, and monitoring in support of more informed decision-making. In parallel, the Department is strengthening planning, cash management, and fraud prevention practices, while further integrating risk discussions into governance processes.

ISC remains committed to sound financial management and the responsible stewardship of public funds. The Department’s ability to deliver on its mandate continues to depend on timely access to required authorities and appropriate levels of funding.

4. Significant changes in relation to Operations, Personnel and Programs

5. Approval by senior officials

Approved, as required by the Treasury Board Policy on Financial Management:

Original signed by:

__________________________
Gina Wilson
Deputy Minister, ISC
City: Gatineau (Canada)

Original signed by:

__________________________
Tim Eryou
A/Chief Finances, Results and Delivery Officer
City: Gatineau (Canada)

6. Appendix A

Statement of Authorities (Unaudited)
(In thousands dollars)
Statement of Authorities (Unaudited) Fiscal Year 2025-26 Fiscal Year 2024-25
Total available for use for the year ending March 31, 2026 Used during the quarter ended June 30, 2025 Year to date used at quarter-end Total available for use for the year ending March 31, 2025 Used during the quarter ended June 30, 2024 Year to date used at quarter-end
NS - Non-Statutory Authorities
Vote 1: Operating expenditures 4,051,896 720,568 720,569 2,793,600 663,438 663,438
Vote 5: Capital expenditures 6,514 252 252 6,386 326 326
Vote 10: Grants and Contributions 21,096,068 5,601,429 5,601,429 20,292,736 7,356,146 7,356,146
S- Statutory Authorities: Operating expenditures (Vote 1)
Contributions to employee benefit plan 128,387 32,097 32,097 112,833 26,785 26,785
Court awards–Crown Liability and Proceedings Act       0 0 0
Minister of Indigenous Services Canada – Salary and motor car allowance 102 25 25 99 25 25
Liabilities in respect of loan guarantees made of Indian for Housing and Economic Development 2,000 0 0 2,000 0 0
Other 0 (177) (177) 0 45 45
S- Statutory Authorities: Transfer Payments (Vote 10)
Canada Community – Building Fund – Financial municipal infrastructure 33,169 904 904 31,842 0 0
Indian Annuities Treaty payments 3,300 3,029 3,029 2,100 3,611 3,611
Subtotal Statutory Authorities 166,958 35,878 35,878 148,874 30,466 30,466
Total Authorities 25,321,436 6,358,127 6,358,127 23,241,596 8,050,376 8,050,376
Departmental budgetary expenditures by standard object (Unaudited)
(In thousands dollars)
Expenditures Fiscal Year 2025-26 Fiscal Year 2024-25
Planned expenditures for the year ending March 31, 2026 Expended during the quarter ending June 30, 2025 Year to date used at quarter ended June 30, 2025 Planned expenditures for the year ending March 31, 2025 Expended during the quarter ending June 30, 2024 Year to date used at quarter ended June 30, 2024
1-Personnel 967,620 189,035 189,035 910,593 185,204 185,204
2-Transportation and communications 698,162 112,633 112,633 404,111 98,636 98,636
3-Information 12,436 1,520 1,520 6,492 1,243 1,243
4-Professional and special services 1,564,978 178,743 178,743 985,179 185,863 185,863
5-Rentals 19,466 2,448 2,448 15,914 2,708 2,708
6-Purchased repair and maintenance 6,752 357 357 6,179 593 593
7-Utilities, materials and supplies 958,739 246,787 246,787 625,832 193,744 193,744
8-Acquisition of land, buildings and works 0 0 0 0 0 0
9-Acquisition of machinery and equipment 6,514 15,367 15,367 6,386 13,382 13,382
10-Transfer payments 21,132,537 5,605,363 5,605,363 20,326,678 7,359,757 7,359,757
11-Public debt charges 0 0 0 0 0 0
12-Other subsidies and payments 2,000 8,170 8,170 2,000 9,917 9,917
Total gross budgetary expenditures 25,369,204 6,360,423 6,360,423 23,289,364 8,051,047 8,051,047
Less Revenues netted against expenditures
Revenues netted against expenditures (47,768) (2,296) (2,296) (47,768) (671) (671)
Services and Benefits to Individuals 0 0 0 0 0 0
Total Revenues netted against expenditures (47,768) (2,296) (2,296) (47,768) (671) (671)
Total net budgetary Expenditures 25,321,436 6,358,127 6,358,127 23,241,596 8,050,376 8,050,376

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