Statement outlining results, risks and significant changes in operations, personnel and programs
1. Introduction
The Government of Canada uses financial information to support decision making, for policy development, for service delivery and for historical reference. These financial statements have been prepared to respond to these requirements. This Departmental Quarterly Financial Report (QFR) reflects the results of the current fiscal period in relation to the Main Estimates and Supplementary Estimates (A). The QFR should be read in conjunction with the Main Estimates and the Federal Budget. They have been prepared by management as required by section 65.1 of the Financial Administration Act (R.S.C., 1985, c. F-11) and in the form and manner prescribed by the Treasury Board of Canada Secretariat. Although these statements have not been subject to an external audit or review, the National Research Council of Canada (NRC) attests that they are an accurate and true reflection of the financial position for the period ended September 30, 2025.
1.1 NRC mandate
The NRC exists under the National Research Council Act (R.S.C., 1985, c. N-15) and is a Departmental corporation named in Schedule II of the Financial Administration Act (R.S.C., 1985, c. F-11). The mission of the NRC is to have an impact by advancing knowledge, applying leading-edge technologies, and working with other innovators to find creative, relevant and sustainable solutions to Canada's current and future economic, social and environmental challenges.
Under the National Research Council Act (R.S.C., 1985, c. N-15), the NRC is responsible for:
- undertaking, assisting or promoting scientific and industrial research in fields of importance to Canada
- providing vital scientific and technological services to the research and industrial communities
- investigating standards and methods of measurement
- working on the standardization and certification of scientific and technical apparatus, instruments and materials used or usable by Canadian industry
- operating and administering any astronomical observatories established or maintained by the Government of Canada
- establishing, operating and maintaining a national science library
- publishing and selling or otherwise distributing such scientific and technical information as the Council deems necessary
Further details on the NRC's legislative framework, authority, mandate and program activities 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 NRC's spending authorities granted by Parliament and those used by the NRC consistent with the Main Estimates for fiscal year 2025 to 2026 and Supplementary Estimates (A) for fiscal year 2025 to 2026. This quarterly report has been prepared using a special purpose financial reporting framework designed to meet financial information needs with respect to the use for spending authorities.
The authority of Parliament is required before moneys can be spent by the Government of Canada. 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 (pursuant to paragraph 5(1)(e) of the National Research Council Act (R.S.C., 1985, c. N-15), the NRC has authority to expend revenues it has received through the conduct of its operations).
The NRC uses the full accrual method of accounting to prepare and present its annual departmental financial statements which are part of the Departmental performance 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 highlights the items that contributed most significantly to the changes in budgetary authorities for the current fiscal year and to the actual expenditures for the quarter that ended on September 30, 2025 compared with the report for the quarter ended September 30, 2024. This section should be read in conjunction with the tables found in section 5 Statement of authorities and section 6 Departmental budgetary expenditures by standard object of this report.
The following graph provides a comparison of the budgetary authorities and expenditures as of September 30, 2025 and those as of September 30, 2024.
Comparison of budgetary authorities and expenditures
as of September 30, 2025 and September 30, 2024
(in millions of dollars)
Long description of the Comparison of budgetary authorities and expenditures
| Budgetary elements | Fiscal year 2025 to 2026 | Fiscal year 2024 to 2025 |
|---|---|---|
| Authorities | $1,999.2 | $1,837.1 |
| Expenditures – Quarter 1 | $320.4 | $307.0 |
| Expenditures – Quarter 2 | $356.1 | $341.4 |
| Expenditures as a percentage of authorities | 33.8% of authorities | 35.3% of authorities |
2.1 Significant changes to authorities
As of September 30, 2025, the NRC's authorities were $1,999.2M, representing an increase of $162.1M (8.8%) in comparison to the 2024 to 2025 authorities of the same period.
The following table provides a detailed explanation of these changes.
| Initiative | Operating (vote 1) | Capital (vote 5) | Grants and contributions (vote 10) | Budgetary statutory authorities | Total variances |
|---|---|---|---|---|---|
| Funding for the transition of Sustainable Development Technology Canada employees and programming to the NRC | 13.5 | 0.0 | 92.6 | 2.6 | 108.6 |
| Funding for the modernization of the NRC facilities to support economic growth and government priorities as presented in the Fall Economic Statement 2022 | 0.6 | 24.1 | 0.0 | 0.0 | 24.7 |
| Funding for the Artificial Intelligence Assist Program | 1.5 | 0.0 | 18.2 | 0.3 | 20.0 |
| Transfer from Public Health Agency of Canada to support biologics manufacturing in Canada | 8.0 | 0.0 | 10.0 | 0.0 | 18.0 |
| Funding for salary increases due to collective bargaining | 14.2 | 0.0 | 0.0 | 2.4 | 16.6 |
| Increase in the NRC's statutory revenue carry-forward | 0.0 | 0.0 | 0.0 | 10.2 | 10.2 |
| Funding for TRIUMF | 0.0 | 0.0 | 10.1 | 0.0 | 10.1 |
| Funding for Canada's membership in the Square Kilometre Array Observatory | (10.3) | 0.0 | 6.2 | 0.0 | (4.1) |
| Budget 2023 Refocusing Government Spending | (3.3) | 0.0 | (5.8) | (0.9) | (10.0) |
| Transfer to Health Emergency Readiness Canada | 0.0 | 0.0 | (10.0) | 0.0 | (10.0) |
| Operating and Capital Budget Carry-Forward | (4.7) | (10.5) | 0.0 | 0.0 | (15.2) |
| Sunset of funding received for the revitalization of the Canadian Photonics Fabrication Centre | (1.5) | (20.0) | 0.0 | (0.3) | (21.8) |
| All other funding changes | (2.1) | 1.9 | 8.7 | 6.6 | 15.1 |
| Cumulative variance in authorities available for use | 15.8 | (4.6) | 130.0 | 20.9 | 162.1 |
2.2 Significant changes to budgetary expenditures
This section should be read in conjunction with the NRC's tables entitled Statement of authorities and Departmental budgetary expenditures by standard object both located at the end of this report.
2.2.1 Variances in year-to-date expenditures
As of September 30, 2025, year-to-date expenditures were $676.5M, representing an increase of $28.1M in comparison to the 2024 to 2025 expenditures for the same period. The quarter-to-date expenditures were $356.1M, representing an increase of $14.7M in comparison to the 2024 to 2025 expenditures for the same period (July 1 to September 30). The following table provides a detailed explanation of these changes by standard object (in millions of dollars).
| Standard object | Changes to expenditures | Variance between 2025 to 2026 year-to-date and 2024 to 2025 year-to-date expenditures | Variance between 2025 to 2026 Q2 and 2024 to 2025 Q2 expenditures |
|---|---|---|---|
| Personnel | The majority of the increase in year-to-date expenditures is mainly due to ratification of collective bargaining and the increased costs of the Clean Technology program. The majority of the increase in Q2 expenditures is temporary, attributable to the timing of retroactive payments following the ratification of collective bargaining. | 17.2 | 30.5 |
| Acquisition of land, buildings and works | The increase in year-to-date and Q2 expenditures is primarily a result of capital projects to modernize NRC facilities. | 10.1 | 5.6 |
| Transfer payments | The decrease in Q2 expenditures is mainly due to the timing of the TRIUMF contributions compared to the previous year. | (0.2) | (21.2) |
| All other | Miscellaneous program delivery cost increases across several standard objects | 1.0 | (0.2) |
| Total variance in expenditures | 28.1 | 14.7 | |
3. Risks and uncertainties
In the fiscal year 2025-2026, the NRC identified key risks stemming from several factors including talent attraction and retention, aging infrastructure, economic challenges, potential short-term supply chain realignment due to geopolitical tensions, and potential cyberattacks.
To address talent attraction and retention challenges, the NRC is implementing its long-term Talent Attraction Strategy, anchored by an employer value proposition. To mitigate the risks associated with aging infrastructure, the first wave of facility renewal projects is currently in the delivery phase.
In response to economic uncertainty, the NRC assessed potential financial impacts, and is monitoring the impact on NRC operations. Cyber security continues to require sustained attention and the NRC completed and implemented a comprehensive Cyber Security Event Management Plan and enhanced employee training to increase awareness and reinforce best practices.
4. Significant changes in relation to operations, personnel and programs
In July 2025, President Mitch Davies announced upcoming changes to realign the NRC's corporate and program functions to improve integration, efficiency and service delivery, and better align with program and industry needs. These changes took effect in October 2025 and included streamlining divisions, creating a new Chief Information Office, and making adjustments in Corporate Services, Human Resources, and the Office of the Secretary General. This streamlined structure is intended to identify opportunities for operational efficiencies and cost savings, and reinforce NRC research and innovation priorities to continue delivering results for Canadians and value for Canada.
The NRC signed a Memorandum of Understanding with NATO's Defence Innovation Accelerator for the North Atlantic (DIANA) in July 2025, establishing 5 NRC research facilities as official DIANA test centres: the Canadian Photonics Fabrication Centre, the 1.5 m Trisonic Wind Tunnel, the Climatic Testing Facility, the Machine Vision Laboratory and the Ocean Engineering Facilities. This partnership strengthens Canada's role in advancing global defence innovation, underscores the government's commitment to NATO and builds on the NRC's longstanding support to Canada's defence sector.
Also in July 2025, President Davies announced the retirement of Alexandra Dagger, Director General of the Office of Audit and Evaluation. Following a competitive selection process, Rebecca Hart was appointed as her successor, bringing extensive experience from her previous role as Director of Performance Measurement and Accountability Reporting. In addition, NRC Vice-President of Business and Professional Services and Office of Facilities Renewal Management Maria Aubrey announced her retirement from the NRC in fall 2025, marking the conclusion of a decade of senior leadership roles at the NRC.
Approved by senior officials
Approved by:
Mitch Davies
President
Karen Cahill
Vice-President, Corporate Services and Chief Financial Officer
Ottawa, Canada
5. Statement of authorities (unaudited)
For the quarter ended September 30, 2025
| Budgetary authorities | Total available for use for the year ending March 31, 2026 Table note * | Used during the quarter ended September 30, 2025 | Year to date used at quarter-end |
|---|---|---|---|
| Vote 1 - Operating expenditures | 618,690 | 171,110 | 299,359 |
| Vote 5 - Capital expenditures | 166,158 | 26,786 | 40,795 |
| Vote 10 - Grants and contributions | 740,629 | 120,077 | 223,566 |
| Statutory revenue Table note ** | 395,082 | 18,458 | 73,431 |
| Statutory EBP | 78,662 | 19,665 | 39,331 |
| Total budgetary authorities | 1,999,221 | 356,096 | 676,482 |
| Budgetary authorities | Total available for use for the year ending March 31, 2025 Table note * | Used during the quarter ended September 30, 2024 | Year to date used at quarter-end |
|---|---|---|---|
| Vote 1 - Operating expenditures | 602,752 | 130,733 | 292,071 |
| Vote 5 - Capital expenditures | 170,770 | 21,637 | 32,738 |
| Vote 10 - Grants and contributions | 610,697 | 141,244 | 223,731 |
| Statutory revenue Table note ** | 384,861 | 30,820 | 65,883 |
| Statutory EBP | 67,999 | 17,000 | 33,999 |
| Total Budgetary authorities | 1,837,079 | 341,434 | 648,422 |
6. Departmental budgetary expenditures by standard object (unaudited)
For the quarter ended September 30, 2025
| Budgetary expenditures | Total available for use for the year ending March 31, 2026 Table note * | Used during the quarter ended September 30, 2025 | Year to date used at quarter-end |
|---|---|---|---|
| Personnel | 592,792 | 156,508 | 314,757 |
| Transportation and communications | 27,577 | 3,329 | 6,864 |
| Information | 2,737 | 371 | 525 |
| Professional and special services | 167,096 | 24,217 | 40,894 |
| Rentals | 27,962 | 4,185 | 8,770 |
| Purchased repair and maintenance | 43,342 | 5,943 | 10,263 |
| Utilities, materials and supplies | 78,737 | 7,992 | 17,073 |
| Acquisition of land, buildings and works | 74,509 | 12,416 | 18,154 |
| Acquisition of machinery and equipment | 217,801 | 16,486 | 26,836 |
| Transfer payments | 740,629 | 120,077 | 223,566 |
| Other subsidies and payments | 26,039 | 4,572 | 8,780 |
| Total net budgetary expenditures | 1,999,221 | 356,096 | 676,482 |
| Bugetary expenditures | Total available for use for the year ending March 31, 2025 Table note * | Used during the quarter ended September 30, 2024 | Year to date used at quarter-end |
|---|---|---|---|
| Personnel | 560,745 | 126,030 | 297,533 |
| Transportation and communications | 18,545 | 3,868 | 7,556 |
| Information | 2,198 | 751 | 1,054 |
| Professional and special services | 151,704 | 22,369 | 36,953 |
| Rentals | 28,409 | 3,796 | 7,319 |
| Purchased repair and maintenance | 45,418 | 6,669 | 10,575 |
| Utilities, materials and supplies | 87,571 | 9,202 | 16,572 |
| Acquisition of land, buildings and works | 116,956 | 6,779 | 8,063 |
| Acquisition of machinery and equipment | 178,849 | 15,955 | 29,663 |
| Transfer payments | 610,697 | 141,244 | 223,731 |
| Other subsidies and payments | 35,987 | 4,771 | 9,403 |
| Total net budgetary expenditures | 1,837,079 | 341,434 | 648,422 |