Quarterly Financial Report for the quarter ending December 31, 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 fiscal quarter and fiscal year-to-date results

This section:

As of the third quarter, the Department has total budgetary authorities of $26.7 billion for 2025-26. 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), 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 Q3 Year-to-date expenditures
March 31, 2026 March 31, 2025 Variance December 31, 2025 December 31, 2024 Variance December 31, 2025 December 31, 2024 Variance
Vote 1: Operating Expenditures 4,295,263 3,977,580 317,683 979,643 932,527 47,116 2,537,014 2,499,222 37,792
Vote 5: Capital Expenditures 9,515 8,925 590 708 2,037 (1,329) 1,141 3,415 (2,274)
Vote 10: Grants and Contributions 22,369,917 23,829,181 (1,459,264) 4,769,356 3,973,307 796,049 14,487,472 15,416,464 (928,992)
Total 26,674,695 27,815,686 (1,140,991) 5,749,707 4,907,871 841,836 17,025,627 17,919,101 (893,474)

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 decreased by $1.1 billion from the previous year :

  • Vote 1 authorities increased by $318 million
  • Vote 5 authorities increased by $0.06 million
  • Vote 10 authorities decreased by $1.5 billion

Vote 1 Operating expenditures

Operating authorities for the year have increased by $318 million in the third quarter of 2025-26 compared to the same period of the previous year, mainly due to the following :

  • $295 million for Supplementary Health Benefits;
  • $104 million for Jordan's Principle and the Inuit Child First Initiative;
  • $16 million for Community Economic Development;
  • $15 million for Primary Health Care;
  • $9 million for Debt write off.

Offset by a decrease for the following program :

  • $97 million for Child and Family Services;
  • $17 million for Public Health Promotion and Disease Prevention;
  • $8 million for Indigenous Governance and Capacity Supports;
  • $8 million for Income Assistance.

Vote 10 Grants and Contributions

Grants and Contributions authorities for the year have increased by $5.8 billion in the third quarter of 2024-25 compared to the same period of the previous year, mainly due to the following:

Increases of:

  • $692 million for Emergency Management Assistance;
  • $298 million for Elementary and Secondary Education;
  • $97 million for Income Assistance;
  • $82 million for Communities and the Environment;
  • $70 million for Public Health Promotion and Disease Prevention;
  • $32 million for Health Systems Support;
  • $23 million for Supplementary Health Benefits;
  • $11 million for Safety and Prevention Services.

Offset by a decrease for the following programs :

  • $1.3 billion for Community Infrastructure;
  • $700 million for Child and Family Services;
  • $536 million for Jordan's Principle and the Inuit Child First Initiative;
  • $142 million Primary Health Care;
  • $77 million for Urban Programming for Indigenous Peoples;
  • $40 million for Indigenous Governance and Capacity Supports.

2.2 Expenditures analysis by standard object

Departmental Budgetary Expenditures were $5.7 billion for the quarter ended December 31, 2025.

Departmental Budgetary Expenditures were $842 million more than the same quarter in 2024-25. 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 (Unaudited)
(In thousands dollars)
Standard Object Changes to Standard Object expenditures Variance between 2025-26 Q3 and 2024-25 Q3 expenditures Variance between 2025-26 year-to-date and 2024-25 year-to-date expenditures
Expenditures:
1-Personnel   (2,705) (1,891)
2-Transportation and communications The decrease is mainly due to changes in operational requirements and the reassessment of travel requests. (8,854) (5,592)
3-Information   356 474
4-Professional and special services The decrease is mainly due to changes in eligibility requirements for Jordan's Principle. (15,452) (56,833)
5-Rentals   818 671
6-Purchased repair and maintenance   295 149
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. (7,719) 20,168
8-Acquisition of land, buildings and works   0 0
9-Acquisition of machinery and equipment   4,700 8,177
10-Transfer payments See detail below for Transfer Payment ExpendituresTable note 1 796,050 (928,992)
11-Public debt charges   0 0
12-Other subsidies and payments The increase in expenditures is mainly due to the resolution of a legal claim as well as the processing of interdepartmental payments that are still being finalized. 50,442 47,628
Total gross budgetary expenditures   817,931 (916,041)
Less Revenues netted against expenditures   23,905 22,567
Services and Benefits to Individuals   0 0
Total Revenues netted against expenditures   23,905 22,567
Total net budgetary expenditures   841,836 (893,474)
Table note 1

Third quarter transfer payment expenditures increased compared to the same quarter of the previous fiscal year. The increase of $796 million is mainly due to the following:

Program expenditures increase of :

  • $332 million in Community Infrastructure due to funding received earlier this year compared to last year for First Nation Child and Family Services and for Water and Wastewater;
  • $220 million in Child and Family Services due mainly to the timing of funding for the First Nation Child and Family Services prevention stream. Funding was provided early in 2024-25, but is being distributed across the year in 2025-26;
  • $108 million in Elementary and Secondary Education to maintain on reserve continued provincial comparability rates based on K-12 formula;
  • $82 million for Emergency and Management Assistance due to increased Response and Recovery efforts to address the needs in First Nations communities affected by wildfires;
  • $66 million in Public Health Promotion and Disease Prevention, due to additional funding available for the Hardy Settlement, and payments made earlier this fiscal year compared to last year for the Indigenous Early Learning and Child Care Framework;
  • $30 million in Communities and Environment due to increased funding for the Federal Contaminated Sites action plan;
  • $22 million in Income Assistance due to additional funding received for disability and household;
  • $18 million in Safety and Prevention Services due to additional funds for newly opened shelters and transitional homes;
  • $14 million in Primary Health Care due to additional funds for the safety and security of communities’ healthcare facilities;
  • $13 million in Health Systems Support due to increase in funding for British Columbia Tripartite Health center;
  • $12 million in Indigenous Entrepreneur and Business Development due to the expansion of the Aboriginal Entrepreneurship Program which includes support to Indigenous Women Entrepreneurs and the Métis Capital Corporations.

Offset by program expenditure decreases of:

  • $113 million in Jordan’s Principle due to changes in eligibility requirements;
  • $19 million in Post Secondary Education due to a timing difference of payments compared to the previous fiscal year.

Return to table note 1 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 recipient financial reporting, coupled with timing issues in funding 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 pressures may impact the recipients' abilities to deliver projects or spend as planned, particularly in smaller communities with limited resources. ISC has implemented measures to mitigate risks related to unspent funds and late financial reporting by recipients, and work is underway to further address these challenges through initiatives to harmonize transfer payment program terms and conditions, improving 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:

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

 

Original signed by:

Richard Goodyear
Chief Financial 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 December 31, 2025 Year to date used at quarter-end Total available for use for the year ending March 31, 2025 Used during the quarter ended December 31, 2024 Year to date used at quarter-end
NS - Non-Statutory Authorities
Vote 1: Operating expenditures 4,164,774 947,375 2,440,458 3,851,217 899,714 2,412,371
Vote 5: Capital expenditures 9,515 708 1,141 8,925 2,037 3,415
Vote 10: Grants and Contributions 22,333,448 4,764,575 14,471,029 23,795,239 3,963,505 15,392,080
S- Statutory Authorities: Operating expenditures (Vote 1)
Contributions to employee benefit plan 128,387 32,097 96,290 124,264 26,785 80,356
Court awards–Crown Liability and Proceedings Act         5,622 5,622
Minister of Indigenous Services Canada – Salary and motor car allowance 102 20 76 99 25 74
Liabilities in respect of loan guarantees made of Indian for Housing and Economic Development 2,000 0 0 2,000 0 0
Other 0 151 190 0 381 799
S- Statutory Authorities: Transfer Payments (Vote 10)
Canada Community – Building Fund – Financial municipal infrastructure 33,169 4,695 13,946 31,842 9,906 21,014
Indian Annuities Treaty payments 3,300 86 2,497 2,100 (104) 3,370
Subtotal Statutory Authorities 166,958 37,049 112,999 160,305 42,615 111,235
Total Authorities 26,674,695 5,749,707 17,025,627 27,815,686 4,907,871 17,919,101
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 December 31, 2025 Year to date used at quarter ended December 31, 2025 Planned expenditures for the year ending March 31, 2025 Expended during the quarter ending December 31, 2024 Year to date used at quarter ended December 31, 2024
1-Personnel 970,734 261,006 710,248 970,961 263,711 712,139
2-Transportation and communications 701,908 149,361 383,041 575,701 158,215 388,633
3-Information 13,239 3,304 6,611 12,076 2,948 6,137
4-Professional and special services 1,650,718 257,674 648,276 1,549,495 273,126 705,109
5-Rentals 27,320 5,114 11,325 21,300 4,296 10,654
6-Purchased repair and maintenance 7,926 1,128 2,307 7,676 833 2,158
7-Utilities, materials and supplies 959,636 221,892 651,801 886,138 229,611 631,633
8-Acquisition of land, buildings and works 0 0 0 0 0 0
9-Acquisition of machinery and equipment 9,515 20,962 52,821 8,925 16,262 44,644
10-Transfer payments 22,369,917 4,769,357 14,487,472 23,829,182 3,973,307 15,416,464
11-Public debt charges 9,550 0 0 0 0 0
12-Other subsidies and payments 2,000 60,848 76,249 2,000 10,406 28,621
Total gross budgetary expenditures 26,722,463 5,750,646 17,030,151 27,863,454 4,932,715 17,946,192
Less Revenues netted against expenditures
Revenues netted against expenditures (47,768) (939) (4,524) (47,768) (24,844) (27,091)
Total net budgetary Expenditures 26,674,695 5,749,707 17,025,627 27,815,686 4,907,871 17,919,101

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