Quarterly Financial Report For the quarter ended June 30, 2025 (unaudited)

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of Canada uses financial information to support decision making, for policy development, for service delivery and for historical reference.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 June 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. 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).

When Parliament is dissolved for the purposes of a general election, section 30 of the Financial Administration Act (R.S.C., 1985, c. F-11) authorizes the Governor General, under certain conditions, to issue a special warrant authorizing the Government of Canada to withdraw funds from the Consolidated Revenue Fund. A special warrant is deemed to be an appropriation for the fiscal year in which it is issued.

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 June 30, 2025 compared with the report for the quarter ended June 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 June 30, 2025 and those as of June 30, 2024.

Long description of the Comparison of budgetary authorities and expenditures

(in millions of dollars)

Budgetary elements	Fiscal year 2025 to 2026	Fiscal year 2024 to 2025
Authorities	$1,975.3	$1,798.0
Expenditures – Quarter 1	$320.4	$307.0
Expenditures as a percentage of authorities	16.2% of authorities	17.1% of authorities

2.1 Significant changes to authorities

As of June 30, 2025, the NRC's authorities were $1,975.3M, representing an increase of $177.3M (10.0%) in comparison to the 2024 to 2025 authorities of the same period.

The following table provides a detailed explanation of these changes.

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 June 30, 2025, year-to-date expenditures were $320.4M, representing an increase of $13.4M in comparison to the 2024 to 2025 expenditures for the same period (April 1 to June 30). The following table provides a detailed explanation of these changes by standard object (in millions of dollars).

3. Risks and uncertainties

In fiscal year 2024 to 2025, the NRC identified key risks stemming from several factors, including aging infrastructure, economic uncertainty, potential cyberattacks, and challenges in talent attraction and retention.

To mitigate the risks associated with aging infrastructure, the NRC initiated its first wave of facility projects and established a systematic process to prioritize future investments in buildings and facilities. In response to economic uncertainty, the NRC assessed the potential financial impacts, monitored the impact on NRC operations, and collaborated with central agencies and other government departments to support greater use of Canadian goods and services.

Recognizing that cyber security is a constant priority, the NRC completed a comprehensive Cyber Security Event Management Plan and enhanced employee training to bolster cyber security awareness, along with continued efforts focused on strengthening the NRC's systems. To address talent attraction and retention challenges, the NRC is executing an ongoing Talent Attraction Strategy, underpinned by a compelling employer value proposition.

4. Significant changes in relation to operations, personnel and programs

Following the transfer of Sustainable Development Technology Canada staff to the NRC in February 2025, the NRC Industrial Research Assistance Program (NRC IRAP) launched a new Clean Technology stream in fiscal year 2025 to 2026 to offer support to Canadian SMEs that are developing, demonstrating and commercializing clean technologies.

In April 2025, President Davies announced the retirement of the NRC's Vice-President of the Office of Facilities Renewal Management, François Cordeau. In NRC IRAP, a new Associate Vice-President role was created to reflect the program's expanded mandate, including the recent launch of the Clean Technology program. Laural Porth-Jones was appointed to the role and now oversees the Division Services, Client Enablement and Governance, and Clean Technologies teams.

In May 2025, President Davies visited the Canadian Space Agency (CSA) to renew the longstanding 10-year Memorandum of Understanding between the NRC and the CSA. This renewed agreement strengthens collaboration on aerospace and space research, supporting Canada's space ambitions and long-term industrial development. The NRC and the CSA will continue working together to develop cutting-edge technologies that drive discovery and benefit Canadians.

Approved by senior officials

Approved by:

Ottawa, Canada

5. Statement of authorities (unaudited)

For the quarter ended June 30, 2025

6. Departmental budgetary expenditures by standard object (unaudited)

For the quarter ended June 30, 2025