Quarterly Financial Report for the quarter ending June 30, 2026

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

On this page

  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 2026-27. 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 II 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 2026-27 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 $25.0 billion for 2026-27. Indigenous Services Canada (ISC) is composed of the following sectors: Regional Delivery Services (RDS), Infrastructure and Governance (IG), Services to Individuals (SI), Lands and Economic Development (LED), Indian Oil and Gas Canada (IOGC), Children, Families and Learning (CFL), Health and Social Services (HSS), Jordan's Principle and Internal Services.

Highlights of the fiscal quarter and the year-to-date results (Unaudited)
(In thousands of dollars)
Budgetary Authority Authorities available for the year ending Expenditures for Q1 Year-to-date expenditures
March 31, 2027 March 31, 2026 Variance Jun 30, 2026 Jun 30, 2025 Variance Jun 30, 2026 Jun 30, 2025 Variance
Vote 1: Operating Expenditures 3,484,439 4,182,385 (697,946) 773,239 752,513 20,726 773,239 752,513 20,726
Vote 5: Capital Expenditures 6,645 6,514 131 537 252 285 537 252 285
Vote 10: Grants and Contributions 21,503,092 21,132,537 370,555 6,011,102 5,605,362 405,740 6,011,102 5,605,362 405,740
Total 24,994,176 25,321,436 (327,260) 6,784,878 6,358,127 426,751 6,784,878 6,358,127 426,751

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 2026-27 decreased by $327 million from the previous year:

  • Vote 1 authorities decreased by $698 million
  • Vote 5 authorities increased by $0.1 million
  • Vote 10 authorities increased by $371 million

Vote 1 Operating

Operating authorities for the year have decreased by $698 million in the first quarter of 2026-27 compared to the same period of the previous year, mainly due to the following with the remaining variance attributable to several smaller adjustments below the threshold:

Decrease of:

  • $531 million for Supplementary Health Benefits;
  • $147 million for Jordan's Principle and the Inuit Child First Initiative;
  • $7 million for Primary Health care;
  • $5 million for Indigenous Governance and Capacity Supports

Vote 10 Grants and Contributions

Grants and Contributions authorities for the year have increased by $371 million in the first quarter of 2026-27 compared to the same period of the previous year, mainly due to the following:

Increase of:

  • $705 million for Child and Family Services;
  • $153 million for Community Infrastructure;
  • $54 million for Income Assistance;
  • $45 million for Home and Long-Term Care;
  • $43 million for Health Systems Support;
  • $26 million for Community Economic Development;
  • $17 million for Post-Secondary Education;
  • $16 million Primary Health Care;
  • $12 million for Communities and the Environment.

Offset by a funding decrease for the following programs, mainly due to the sunsetting of funding and timing of certain funding renewal:

  • $329 million for Elementary and Secondary Education;
  • $142 million for Urban Programming for Indigenous Peoples;
  • $104 million for Jordan's Principle and the Inuit Child First Initiative,
  • $74 million for Emergency Management;
  • $36 million for Safety and Prevention;
  • $17 million for Indigenous Governance and Capacity Supports.

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $6.8 billion for the quarter ended June 30, 2026.

Departmental Budgetary Expenditures were $427 million more than the same quarter in 2025-26. As per the Departmental Budgetary Expenditures by Standard Object tables, the increase for the quarter is mainly due to the changes listed below:

The following table provides a detailed explanation of these changes by standard object

Expenditures (Unaudited):
(In thousands of dollars)
Standard Object Changes to Standard Object expenditures Variance between 2026-27 Q1 and 2025-26 Q1 expenditures Variance between 2026-27 year-to-date and 2025-26 year-to-date expenditures
1-Personnel The increase is mainly attributable to higher salaries and wages resulting from one additional pay period compared to the prior year. 23,557 23,557
2-Transportation and communications   1,792 1,792
3-Information   331 331
4-Professional and special services The increase is mainly due to a payment made to the Department of Justice in May 2026 whereas this payment was made at Q3 in the previous year. 15,253 15,253
5-Rentals   2,036 2,036
6-Purchased repair and maintenance   83 83
7-Utilities, materials and supplies The decrease is mainly due to the timing of health benefits payments and in the overall demand for the quarter. (19,880) (19,880)
8-Acquisition of land, buildings and works   0 0
9-Acquisition of machinery and equipment   (128) (128)
10-Transfer payments See detail below for Transfer Payment ExpendituresTable note * 405,738 405,738
11-Public debt charges   0 0
12-Other subsidies and payments   (3,246) (3,246)
Total gross budgetary expenditures   425,536 425,536
Revenues netted against expenditures   1,215 1,215
Total net budgetary expenditures   426,751 426,751
Table note *

First quarter transfer payment expenditures increased compared to the same quarter of the previous fiscal year. The increase of $406 million is mainly due to the following with the remaining variance attributable to several smaller adjustments below the threshold:

Program expenditures increase of:

  • $249 million in Community Infrastructure due to the prorogation period and the caretaker convention at the beginning of the previous fiscal year, during which budget expenditures were restricted to essential and critical payments only;
  • $47 million in Health Systems Support due to the increase in funding received for the First Nation Health Authority (FNHA) as well as timing of payments related to the Indigenous Health Equity Fund, which were made earlier in the current fiscal year than in the prior fiscal year;
  • $46 million in Public Health Promotion and Disease Prevention, due to payments made earlier this fiscal year compared to last year for the Indigenous Early Learning and Child Care Framework and Childhood Compensation;
  • $45 million in Elementary and Secondary Education that aligns with the program's annual growth, including the core escalator and additional funding provided through the Spring Economic Statement;
  • $30 million in Income Assistance mainly due to the earlier timing of payments in the New Fiscal Relationship (NFR) compared to the previous fiscal year;
  • $27 million in Emergency and Management Assistance (EMAP) due to higher cash flow requirements early in 2026–27, driven by the timing of response and recovery activities;
  • $20 million in Home and Long-term Care due to top-up funding provided through Budget 2025, as well as the earlier timing of payments in both the Contribution Program and the New Fiscal Relationship compared to the previous fiscal year;
  • $19 million in Supplementary Health Benefits due to earlier contribution agreement payments in 2026–27, primarily related to the establishment of agreements made earlier in the fiscal year compared to 2025-26;
  • $15 million in Primary Health Care due to the earlier timing of payments in the current fiscal year compared to the previous fiscal year. Payment delays in the prior year resulted in funding being disbursed later in the fiscal year;
  • $10 million in Post Secondary Education due to the New Fiscal Relationship (NFR) grant escalator, which includes annual growth of approximately $8 million in the program's core funding.

Offset by program expenditure decreases of:

  • $103 million in Child and Family Services expenditures is primarily due to the timing of payments, with some planned expenditures to be processed in subsequent quarters;
  • $12 million in Urban Programming for Indigenous Peoples mainly due to difference in timing of payments and lower initial funding resulting from sunsetting initiatives;
  • $10 million in Safety and Prevention Services due to the sunsetting of the Pathways program in 2025-26.

Return to table note * referrer

3. Risks and uncertainties

The 2026-27 Corporate Risk Profile (CRP) outlines the key risks to the achievement of Indigenous Services Canada's (ISC) departmental results for the fiscal year. These risks reflect persistent systemic pressures, growing demand for services, and the increasing complexity of ISC's mandate.

Across service areas, the CRP highlights significant pressures on program integrity, including demand driven initiatives without allocation based funding models, time limited investments, outdated program designs, and chronic underfunding relative to population growth, inflation, and rising service standards. These underlying challenges continue to exacerbate risks, creating uncertainty in planning and delivery. To help address these pressures, program areas are advancing a range of actions, including strengthening governance and control frameworks, clarifying operational parameters, exploring technology enhancements, and reviewing funding approaches to better align formulas with actual service needs and cost drivers.

Demand driven programs, such as Jordan's Principle, face ongoing uncertainty in forecasting, cash management, and sustaining service levels within fixed funding authorities. Similar pressures affect other core services where cost growth and complexity outpace available resources. The CRP also notes that persistent backlogs in recipient audited financial statements may delay funding access for communities and complicate ISC's ability to manage financial risk, ensure compliance, and support timely program delivery. These backlogs contribute to year end forecasting challenges and timing issues in funding supply and allocation.

The CRP further identifies pressures impacting the achievement of departmental results including workforce constraints, aging community infrastructure, and rising emergency and operational costs. These factors increase financial exposure, particularly where overtime, surge staffing, medical travel, or urgent repairs are required to maintain essential services. Mitigation efforts underway include work to improve infrastructure program design, strengthen emergency management coordination, and enhance tools and processes that support more timely, consistent, and comparable service delivery during multi hazard and climate related events.

Department-wide challenges in data quality, IM/IT systems, and internal processes also affect financial management by limiting the timeliness and precision of forecasting, performance monitoring, and the alignment of resources with departmental priorities.

A tightening fiscal environment further amplifies these risks. Many programs are facing rising demand and expanding legal or policy obligations without corresponding increases in funding, creating uncertainty in sustaining essential services and meeting commitments. In response, ISC continues to strengthen planning, cash management, and financial oversight to support responsible stewardship of public funds.

The Department's ability to deliver on its mandate remains closely tied to timely access to authorities, predictable funding, and continued efforts to align resources with departmental priorities.

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

Michelle Kovacevic
Deputy Minister, ISC
City: Gatineau (Canada)

Bill Kroll, CPA, CMA
Chief Financial Officer
City: Gatineau (Canada)

6. Appendix A

Statement of Authorities (Unaudited)
(In thousands of dollars)

NS - Non-Statutory Authorities
Statement of Authorities (Unaudited) Fiscal Year 2026-27 Fiscal Year 2025-26
Total available for use for the year ending March 31, 2027 Used during the quarter ended June 30, 2026 Year to date used at quarter-end 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
Vote 1: Operating expenditures 3,341,561 740,411 740,411 4,051,896 720,568 720,568
Vote 5: Capital expenditures 6,645 537 537 6,514 252 252
Vote 10: Grants and Contributions 21,466,623 6,006,616 6,006,616 21,096,068 5,601,429 5,601,429
S- Statutory Authorities: Operating expenditures (Vote 1)
Statement of Authorities (Unaudited) Fiscal Year 2026-27 Fiscal Year 2025-26
Total available for use for the year ending March 31, 2027 Used during the quarter ended June 30, 2026 Year to date used at quarter-end 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
Contributions to employee benefit plan 140,772 32,802 32,802 128,387 32,097 32,097
Court awards - Crown Liability and Proceedings Act 0 0 0 0 0 0
Minister of Indigenous Services Canada – Salary and motor car allowance 106 26 26 102 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 0 0 0 (177) (177)
S- Statutory Authorities: Transfer Payments (Vote 10)
Statement of Authorities (Unaudited) Fiscal Year 2026-27 Fiscal Year 2025-26
Total available for use for the year ending March 31, 2027 Used during the quarter ended June 30, 2026 Year to date used at quarter-end 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
Canada Community – Building Fund – Financial municipal infrastructure 33,169 1,750 1,750 33,169 904 904
Indian Annuities Treaty payments 3,300 2,736 2,736 3,300 3,029 3,029
Subtotal Statutory Authorities 179,347 37,314 37,314 166,958 35,878 35,878
Total Authorities 24,994,176 6,784,878 6,784,878 25,321,436 6,358,127 6,358,127
Departmental budgetary expenditures by standard object (Unaudited)
(In thousands of dollars)
Expenditures Fiscal Year 2026-27 Fiscal Year 2025-26
Planned expenditures for the year ending March 31, 2027 Expended during the quarter ending June 30, 2026 Year to date used at quarter ended June 30, 2026 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
1-Personnel 976,352 212,592 212,592 967,620 189,035 189,035
2-Transportation and communications 561,347 114,425 114,425 698,162 112,633 112,633
3-Information 11,899 1,851 1,851 12,436 1,520 1,520
4-Professional and special services 1,263,228 193,996 193,996 1,564,978 178,743 178,743
5-Rentals 17,637 4,484 4,484 19,466 2,448 2,448
6-Purchased repair and maintenance 5,531 440 440 6,752 357 357
7-Utilities, materials and supplies 695,844 226,907 226,907 958,739 246,787 246,787
8-Acquisition of land, buildings and works 0 0 0      
9-Acquisition of machinery and equipment 6,645 15,239 15,239 6,514 15,367 15,367
10-Transfer payments 21,503,092 6,011,101 6,011,101 21,132,537 5,605,363 5,605,363
11-Public debt charges 0 0 0      
12-Other subsidies and payments 2,000 4,924 4,924 2,000 8,170 8,170
Total gross budgetary expenditures 25,043,575 6,785,959 6,785,959 25,369,204 6,360,423 6,360,423
Less Revenues netted against expenditures
(In thousands of dollars)
Expenditures Fiscal Year 2026-27 Fiscal Year 2025-26
Planned expenditures for the year ending March 31, 2027 Expended during the quarter ending June 30, 2026 Year to date used at quarter ended June 30, 2026 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
Revenues netted against expenditures (49,399) (1,081) (1,081) (47,768) (2,296) (2,296)
Total net budgetary Expenditures 24,994,176 6,784,878 6,784,878 25,321,436 6,358,127 6,358,127

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