Quarterly Financial Report for the quarter ending September 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 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 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 second quarter, the Department has total budgetary authorities of $25.4 billion for 2025-26. Indigenous Services Canada (ISC) is composed of the following sectors: Regional Delivery (RD), Strategic Policy and Partnerships (SPP), Infrastructure and Governance (IG), Services to Individuals (SI), Lands and Economic Development (LED), 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 dollars)
Budgetary Authority Authorities available for the year ending Expenditures for Q2 Year-to-date expenditures
March 31, 2026 March 31, 2025 Variance Sept 30, 2025 Sept 30, 2024 Variance Sept 30, 2025 Sept 30, 2024 Variance
Vote 1: Operating Expenditures 4,234,238 2,956,449 1,277,789 804,858 876,401 (71,543) 1,557,371 1,566,695 (9,324)
Vote 5: Capital Expenditures 8,299 8,456 (157) 181 1,053 (872) 433 1,378 (945)
Vote 10: Grants and Contributions 21,132,537 20,326,678 805,859 4,112,753 4,083,400 29,353 9,718,116 11,443,157 (1,725,041)
Total 25,375,074 23,291,583 2,083,491 4,917,792 4,960,854 (43,062) 11,275,920 13,011,230 (1,735,310)

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 decreased by $0.1 million
  • Vote 10 authorities increased by $806 million

Vote 1 Operating expenditures

Operating authorities for the year have increased by $1.3 billion in the second 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;
  • $50 million for Public Health Promotion and Disease Prevention;
  • $17 million for Primary Health Care;
  • $12 million for Internal Services;
  • $6 million for Community Infrastructure;
  • $5 million for Communities and the Environment.

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 $806 million in the second quarter of 2025-26 compared to the same period of the previous year, mainly due to the following:

  • $450 million for Elementary and Secondary Education;
  • $343 million for Public Health Promotion and Disease Prevention;
  • $263 million for Income Assistance;
  • $98 million for Indigenous Governance and Capacity Supports;
  • $83 million for Communities and the Environment;
  • $80 million for Supplementary Health Benefits;
  • $79 million for Post-Secondary Education;
  • $66 million for Health Systems Support;
  • $63 million for Indigenous Entrepreneurship and Business Development;
  • $39 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 :

  • $609 million for Community Infrastructure;
  • $134 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 $4.9 billion for the quarter ended September 30, 2025.

Departmental Budgetary Expenditures were $43 million 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)
Expenditures:
Standard Object Changes to Standard Object expenditures Variance between 2025-26 Q2 and 2024-25 Q2 expenditures Variance between 2025-26 year-to-date and 2024-25 year-to-date expenditures
1-Personnel   (3,017) 814
2-Transportation and communications The quarter-over-quarter decrease is mainly due to changes in operational requirements and the reassessment of travel requests, despite an overall year-to-date expenditures increase in the first quarter. (10,735) 3,262
3-Information   (159) 118
4-Professional and special services The decrease is mainly due to changes in eligibility requirements for Jordan's Principle. (34,261) (41,381)
5-Rentals   113 (147)
6-Purchased repair and maintenance   90 (146)
7-Utilities, materials and supplies The quarter-over-quarter decrease is primarily timing differences in when health benefits payments occur. The first quarter showed an early increase, while the second quarter was lower. Overall demand for the year has increased moderately. (25,155) 27,887
8-Acquisition of land, buildings and works   0 0
9-Acquisition of machinery and equipment   1,492 3,476
10-Transfer payments See detail below for Transfer Payment ExpendituresTable note * 29,353 (1,725,041)
11-Public debt charges   0 0
12-Other subsidies and payments   (1,062) (2,814)
Total gross budgetary expenditures   (43,341) (1,733,972)
Less Revenues netted against expenditures      
Services and Benefits to Individuals   279 (1,338)
Total Revenues netted against expenditures   279 (1,338)
Total net budgetary expenditures   (43,062) (1,735,310)
Table note *

Second quarter transfer payment expenditures increased compared to the same quarter of the previous fiscal year. The increase of $29 million is mainly due to the following:

Program expenditures increase of:

  • $230 million in Community Infrastructure primarily due to funding available earlier this fiscal year compared to last year;
  • $228 million in Child and Family Services due to funding available earlier this fiscal year compared to last year, in addition to an increase in Indigenous Governing Bodies with coordination agreements;
  • $39 million for Emergency and Management Assistance due to pressing needs related wildfires;
  • $25 million in Income Assistance due to incremental resources received, which allowed an increase in transfers to recipients earlier in this fiscal year;
  • $12 million in Safety & Prevention Service mainly due to a difference in the timing of the payments during the fiscal year .

Offset by program expenditure decreases of:

  • $338 million in Jordan's Principle due to changes in eligibility requirements;
  • $45 million in Elementary and Secondary Education due to timing difference of payments compared to the previous fiscal year, since funds were secured earlier in the fiscal year;
  • $35 million in Public Health Promotion and Disease due to expenses made earlier this year compared to the last year.
  • $30 million in Post-Secondary Education due to a timing difference of payments compared to the previous fiscal year ;
  • $28 million in Urban, Rural and Northern Housing Initiative mainly due to timing of payments;
  • $21 million in Supplementary Health Benefits due to payments made earlier this year compared to the last year.

Return to table note * referrer

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 the tightening of the fiscal environment, 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 with limited resources. Mitigation strategies to address these challenges include 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

Effective September 2, 2025, the department underwent a realignment / reorganization, whereby:

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)

Richard Goodyear
Chief Financial Officer
City: Gatineau (Canada)

6. Appendix A

Statement of Authorities (Unaudited)

NS - Non-Statutory Authorities
(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
September 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
September 30, 2024		 Year to date used at quarter-end
Vote 1: Operating expenditures 4,103,749 772,515 1,493,083 2,841,517 849,218 1,512,657
Vote 5: Capital expenditures 8,299 181 433 8,456 1,053 1,378
Vote 10: Grants and Contributions 21,096,068 4,105,024 9,706,454 20,292,736 4,072,429 11,428,575
S- Statutory Authorities: Operating expenditures (Vote 1)
(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
September 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
September 30, 2024		 Year to date used at quarter-end
Contributions to employee benefit plan 128,387 32,096 64,193 112,833 26,786 53,571
Minister of Indigenous Services Canada – Salary and motor car allowance 102 31 56 99 24 49
Liabilities in respect of loan guarantees made of Indian for Housing and Economic Development - 0 0 2,000 0 0
Other 2,000 216 39 0 373 418
S- Statutory Authorities: Transfer Payments (Vote 10)
(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
September 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
September 30, 2024		 Year to date used at quarter-end
Canada Community – Building Fund – Financial municipal infrastructure 33,169 8,347 9,251 31,842 11,108 11,108
Indian Annuities Treaty payments 3,300 (618) 2,411 2,100 (137) 3,474
Subtotal Statutory Authorities 166,958 40,072 75,950 148,874 38,154 68,620
Total Authorities 25,375,074 4,917,792 11,275,920 23,291,583 4,960,854 13,011,230

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
September 30, 2025		 Year to date used at quarter ended
September 30, 2025		 Planned expenditures for the year ending
March 31, 2025		 Expended during the quarter ending
September 30, 2024		 Year to date used at quarter ended
September 30, 2024
1-Personnel 967,620 260,208 449,242 921,647 263,225 448,428
2-Transportation and communications 698,958 121,046 233,680 404,569 131,781 230,418
3-Information 12,961 1,787 3,307 6,958 1,946 3,189
4-Professional and special services 1,608,096 211,859 390,602 1,015,613 246,119 431,983
5-Rentals 25,449 3,763 6,211 20,523 3,650 6,358
6-Purchased repair and maintenance 7,846 822 1,179 6,870 732 1,325
7-Utilities, materials and supplies 959,076 183,121 429,909 626,037 208,277 402,022
8-Acquisition of land, buildings and works 0 0 0 0 0 0
9-Acquisition of machinery and equipment 8,299 16,491 31,858 8,456 14,999 28,382
10-Transfer payments 21,132,537 4,112,753 9,718,116 20,326,679 4,083,400 11,443,157
11-Public debt charges 0 0 0 0 0 0
12-Other subsidies and payments 2,000 7,236 15,401 2,000 8,298 18,215
Total gross budgetary expenditures 25,422,842 4,919,086 11,279,505 23,339,352 4,962,427 13,013,477
Less Revenues netted against expenditures
(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
September 30, 2025		 Year to date used at quarter ended
September 30, 2025		 Planned expenditures for the year ending
March 31, 2025		 Expended during the quarter ending
September 30, 2024		 Year to date used at quarter ended
September 30, 2024
Revenues netted against expenditures (47,768) (1,294) (3,585) (47,769) (1,573) (2,247)
Total net budgetary Expenditures 25,375,074 4,917,792 11,275,920 23,291,583 4,960,854 13,011,230

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