Annual Report 2008-2009

Research with Impact

[ Table of Contents ]

Financial Statement Discussion and Analysis

Financial Highlights

Analysis

CIHR's growth is almost entirely dependent on increases to its appropriations as approved by Parliament. The 2.0% decrease in parliamentary appropriations (or $19.7 million) in 2008-09 resulted primarily from a decrease to appropriations for the Centres of Excellence for Commercialization and Research (CECR) program. In 2007-08, CIHR received $73.5 million of parliamentary appropriations in support of the launch of the new CECR program, whereas in 2008-09 $4.4 million in appropriations was provided for the CECR program. This decrease to CIHR parliamentary appropriations for the CECR program was partially offset by CIHR receiving increased parliamentary appropriations from the $34 million base budget increase announced in the 2008 Federal Budget, as well as additional 2008-09 appropriations for CIHR in key targeted strategic areas such as the Canada Graduate Scholarships program ($4.8 million), pandemic preparedness research ($3.4 million), HIV/AIDS research ($3.2 million), the National Anti-Drug Strategy ($0.9 million) and Fabry's disease ($0.8 million). CIHR also received approximately $1.5 million more in transfers from other government departments (primarily from the Public Health Agency of Canada (PHAC) and Health Canada) than it did in 2007-08 to fund research projects in key research areas such as Hepatitis C and influenza research.

A reduction in CIHR parliamentary appropriations also resulted in commensurate decreases to its net cost of operations and grant and award expenses. The CIHR net cost of operations decreased by 2.6% (or $26.2 million) in 2008-09 as compared to 2007-08. Grants and Awards expenses in 2008-09 totalled $927.2 million, a decrease of $28.9 million or 3.0% as compared to 2007-08.

The following graphic indicates how 2008-09 Grants and Awards expenses were allocated by program area. Priority is given to funding health research and researchers through open competitions, strategic initiatives and knowledge translation. CIHR also participates with other federal granting agencies (NSERC, SSHRC) in a number of tri-agency programs, including the Canada Research Chairs, the Networks of Centres of Excellence, and the Centres of Excellence for Commercialization and Research.

2008-09 Grants and Awards Expenses*

$927.2 million

2008-09 Grants and Awards Expenses

* Figures do not include refunds of previous years' expenses.

As the graphic indicates, CIHR invests the largest share of its budget on grants and awards through open competitions, enabling individual researchers, or groups of investigators, to pursue research projects in any area of health research. Applications for grants and awards undergo rigorous peer review by committees of experts in the field. This process helps to ensure that only excellent health research proposals that meet internationally accepted standards of excellence are funded by CIHR.

Strategic initiatives comprise the second largest area of grants and awards investments and it targets high priority research areas identified by CIHR's Institutes after broad consultations with stakeholders and partners. These strategic initiatives address emerging health threats and other important health issues of concern to Canadians including areas of health research such as obesity, cancer, vulnerable populations such as youth and aboriginals, pandemic preparedness, HIV/AIDS, or measures to improve the effectiveness of the Canadian health-care system.

Knowledge Translation (KT) is a critical and growing part of CIHR's mandate focused on the synthesis, exchange and ethically sound application of knowledge to accelerate the capture of the benefits of research for Canadians through improved health, more effective services and products and a strengthened health-care system. In 2008-09, grants and awards expenses related directly to Knowledge Translation increased by 16.8%.

As noted earlier, the key business driver for CIHR is being provided parliamentary appropriations by the Federal Government. The table below summarizes the parliamentary appropriations received by CIHR in fiscal year 2008–09:

Summary of Parliamentary Appropriations

(in millions of dollars)

2008-09
Main Estimates
2008-09
Supplementary Estimates
2008-09
Total Appropriations

Operating Expenses
Salaries (including Employee Benefits) 29.7 7.9 37.6
Non-Salary Expenses 17.6 1.1 18.7

Total - Operating Expenditures 47.3 9.0 56.3
Grants and Awards
CIHR ongoing budget 674.4 - 674.4
Canada Research Chairs 103.6 - 103.6
Networks Centres of Excellence 27.5 (1.4) 26.1
HIV/AIDS research initiative 21.2 - 21.2
Canada Graduate Scholarships Program 18.9 0.3 19.2
Institute Support Grants 13.0 - 13.0
Fabry's Disease & Expensive Drugs 12.4 - 12.4
Pandemic Preparedness research initiative 6.4 0.5 6.9
International Polar Year research initiative 3.9 - 3.9
Budget 2008 increase - 29.3 29.3
CECR funding - 4.4 4.4
Business-Led Networks of Centres of Excellence - 1.7

1.7

Other Program Funding - 1.6 1.6

Total - Grants & Awards 881.3 36.4 917.7
Total 2008-09 CIHR Parliamentary Appropriations 928.6 45.4 974.0
Total 2008-09 Authorities Spent 969.4

Total Surplus of Appropriations for 2008-09 4.6

Note: CIHR received a $34 million ongoing budget increase through the 2008 Federal Budget, which as per the table above, was allocated to CIHR's 2008–09 parliamentary appropriations through the Supplementary Estimates. Of that $34 million, $29.3 million was allocated to Vote 25 (Grants) and the remaining $4.7 million was allocated to Vote 20 (Operating Expenses), employee benefits and accommodation charges.

CIHR had a surplus of parliamentary appropriations totalling $4.6 million in 2008–09 as follows:

Vote Surplus Appropriations
20 Operating Expenses $ 3.8 million
25 Grants $ 0.8 million
Total Surplus of Parliamentary Appropriations $ 4.6 million

Risks and Uncertainties

CIHR continuously assesses opportunities, challenges and risks at three levels: strategic, programmatic and corporate. The major risks facing CIHR, as identified by the organization are as follows:

Rising Demand for Research Funding

Variance Analysis

Change in Key Financial Indicators

As evidenced by the table below, CIHR's net cost of operations and grants and awards expenses have decreased slightly in relative proportion to the decreased parliamentary appropriations received by CIHR in 2008–09. Operations and administration expenses increased as compared to 2007–08 due primarily to higher employee salaries and benefits.

(in millions of dollars)

2008–09 2007–08 Increase / (Decrease) % Increase /
(Decrease)
Parliamentary Appropriations 974.0 993.7 (19.7) (2.0 %)
Net Cost of Operations 972.8 999.0 (26.2) (2.6 %)
Grants & Awards Expenses 927.2 956.1 (28.9) (3.0 %)
Operations and Administration Expenses 58.9 55.3 3.6 6.5 %
Salaries and Employee Benefits Expenses 40.6 36.5 4.1 11.2 %

Change in Expenses by Strategic Outcome

(in millions of dollars)

Strategic Outcome 2008–09 2007–08 Increase / (Decrease) % Increase /
(Decrease)
Advances in Health Knowledge 635.3 547.8 87.5 16.0 %
People and Research Capacity 277.0 317.4 (40.4) (12.7 %)
Knowledge Translation and Commercialization 70.9 143.1 (72.2) (50.5 %)
Total Expenses 983.2 1,008.3 (25.1) (2.5 %)

Trend Analysis

CIHR Parliamentary Appropriations

(in millions of dollars)

CIHR Parliamentary Appropriations

CIHR Net Cost of Operations

(in millions of dollars)

CIHR Net Cost of Operations

CIHR Grants and Awards Expenses

(in millions of dollars)

CIHR Grants and Awards Expenses

CIHR Operations and Administration Expenses

(in millions of dollars)

CIHR Operations and Administration Expenses

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