Statement outlining results, risks and significant changes in operations, personnel and programs
1. Introduction
This quarterly financial report should be read in conjunction with the Main Estimates and any Supplementary Estimates approved in a given year by the date of this report. 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 Treasury Board (TB). This quarterly financial report has not been subject to an external audit or review.
1.1 Authority, Mandate and Programs
Natural Resources Canada (NRCan) works to improve the quality of life of Canadians by ensuring that our natural resources are developed sustainably, providing a source of jobs, prosperity, and opportunity, while preserving our environment and respecting our communities and Indigenous peoples.
Further details on NRCan’s authority, mandate and programs can be found in Part II of the Main Estimates.
1.2 Basis of Presentation
This quarterly financial report has been prepared by management using an expenditure basis of accounting. The accompanying Statement of Authorities includes NRCan’s spending authorities granted by Parliament, and those used by NRCan are consistent with the Main Estimates, Supplementary Estimates (B), and budget adjustments approved by TB up to December 31, 2025. 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 money 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.
NRCan uses the full accrual method of accounting to prepare and present its annual unaudited 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 Departmental Quarterly Financial Report reflects the results as of December 31, 2025, which include Main Estimates and Supplementary Estimates (B) for which full supply was released as well as TB approved adjustments. The details presented in this report focus on and compare the third quarter results of 2025-2026 with those of 2024-2025.
2.1 Authorities
As per Table 1, presented at the end of this document, and on Graph 1 below, as at December 31, 2025, NRCan has authorities available for use of $5,233.4M compared to $5,860.1M in 2024-2025, for a net decrease of $626.7M or 10.7%.
Text version
| (In millions of dollars) | Fiscal Year 2024-2025 Total available for use for the year ending March 31, 2025 | Fiscal Year 2025-2026 Total available for use for the year ending March 31, 2026 |
|---|---|---|
| Vote 1 - Operating | 957 | 992 |
| Vote 5 - Capital | 59 | 60 |
| Vote 10 - Grants and contributions | 3,011 | 2,658 |
| Statutory | 1,832 | 1,523 |
| Total budgetary authorities | 5,860 | 5,233 |
The decrease of $626.7M in authorities in 2025-2026 compared to 2024-2025 is mainly explained by the decrease within the Vote 10 grants and contributions and Statutory authorities as well as the net effect of smaller fluctuations within Vote 1 operating expenditures and Vote 5 capital expenditures as per the following:
| Total available for use for the year ending March 31, 2025 | 5,860,148 |
| Vote 1 - Operating | |
| UNCLOS - Extended Continental Shelf | 16,100 |
| All other net increases less than $10M individually | 18,959 |
| Sub-total Vote 1 - Operating | 35,059 |
| Vote 5 - Capital | |
| Polar Continental Shelf Program | 7,377 |
| Energy Innovation Program | 3,530 |
| Canadian Data Receiving Infrastructure | (9,000) |
| All other net decreases less than $3M individually | (791) |
| Sub-total Vote 5 - Capital | 1,116 |
| Vote 10 - Grants & Contributions | |
| Critical Minerals | 71,160 |
| Canada Greener Homes Affordability Program (CGHAP) | 44,874 |
| Decarbonization of On-road Transportation - Zero-Emission Vehicle Infrastructure Program | 25,085 |
| The Sustainable Advancement of Canada's Forest Economy | 21,846 |
| Smart Grids | 20,500 |
| Smart Renewables & Electrification Pathways | (190,358) |
| Greener Homes | (183,543) |
| Clean Fuels Fund | (181,115) |
| Electricity Pre-Development | (26,355) |
| All other net increases less than $20M individually | 44,521 |
| Sub-total Vote 10 - Grants & Contributions | (353,385) |
| Statutory | |
| Newfoundland Offshore Petroleum Resources Revenue Fund (Forecasts are revised annually based on projected oil & natural gas production levels, prices, exchange rates and operator's costs) |
(323,328) |
| All other net increases | 13,820 |
| Sub-total Statutory | (309,508) |
| Total decrease from previous year due to year-over-year changes | (626,719) |
| Total available for use for the year ending March 31, 2026 | 5,233,429 |
2.2 Budgetary Expenditures by Standard Object
The spending for the quarter ending December 31, 2025 amounts to $844.9M or 16.1% of total funding available for the fiscal year, compared to $863.3M or 14.7% for the same quarter last year. The decrease of $18.4M in spending is mainly related to a decrease in expenditures for transfer payments in the third quarter of 2025-2026 compared to the same type of expenditures in the third quarter of 2024-2025. Year-to-date spending at the quarter ending December 31, 2025 amounts to $2,441.1M or 46.6% of total funding available for the fiscal year, compared to $2,478.4M or 42.3% for the same period last year. Further analysis has been done on standard objects with significant expenses, as noted in Graph 2 below. Table 2 at the end of this document presents the spending for all standard objects.
Text version
| (In millions of dollars) | Quarter ended June 30 | Quarter ended September 30 | Quarter ended December 31 | |
|---|---|---|---|---|
| Personnel | 2024-2025 |
176 | 175 | 179 |
| 2025-2026 | 179 | 190 | 186 | |
| Professional and special services | 2024-2025 |
25 | 33 | 38 |
| 2025-2026 | 21 | 42 | 32 | |
| Rentals | 2024-2025 |
5 | 5 | 3 |
| 2025-2026 | 4 | 13 | 9 | |
| Transfer payments | 2024-2025 |
482 | 670 | 618 |
| 2025-2026 | 371 | 731 | 594 |
| Standard Object | Explanation | Variance between 2025-2026 and 2024-2025 Q3 expenditures | Variance between 2025-2026 and 2024-2025 YTD expenditures |
|---|---|---|---|
| Personnel | The variance is mainly due to pay increases from collective bargaining settlements, reduced turnover, and the ramp-up of the ForSITE program partially offset by the timing of Other Government Departments salary transfers occurring later this year. | 6,175 | 24,699 |
| Professional and special services | The variance is mainly due to reduced budget and reduced payments related to the Greener Homes Initiative partially offset by increased research related costs for the Forest Innovation and ForSITE. | (6,138) | (1,555) |
| Rentals | The variance is mainly due to the rental of an icebreaker as part of the UNCLOS 2025 Canada-Sweden Arctic Ocean expedition which is in the first year of a three-year expedition. | 5,911 | 13,203 |
| Transfer Payments | The variance is mainly due to a reduction in payments for the Canada Greener Homes Initiative and Smart Renewables and Electrification Pathways program partially offset by increased statutory payments to the province of Newfoundland and Labrador for offshore activity. | (23,729) | (73,170) |
| All Other Standard Objects | Minor increases and decreases within different standard objects. | (6,815) | (7,895) |
| Total Variance | (18,462) | (37,311) | |
3. Risks and Uncertainties
In a time of heightened global risk and uncertainty, NRCan is taking proactive steps to strengthen and secure the sustainable development, responsible use, and economic benefit of Canada’s energy and natural resources. This includes responding to market volatility and trade policy shifts by reducing reliance on single markets, identifying new opportunities to boost Canada’s competitiveness, and opening export pathways in regions such as the Indo‑Pacific and Europe as part of the Government of Canada’s Trade Diversification Efforts. Overall, these ongoing efforts support the Government of Canada’s agenda to position Canadian energy and natural resources as a strategic geopolitical and economic advantage.
NRCan continues to advance initiatives that enhance the economic contribution and competitiveness of the natural resource sectors, while reducing emissions and other adverse environmental impacts. The department collaborates with other government departments, provincial and territorial partners, Indigenous groups, and other stakeholders to build a strong, resilient and sovereign economy for all Canadians. NRCan continues to support national and international actions to address climate change and the increasing impacts of extreme weather events, including by maintaining wildfire and flood maps that identify hazardous areas and support emergency preparedness and rapid response to protect communities, industry, and ecosystems.
Uncertainty continues to affect the global economy, contributing to inflation, supply chain disruptions, and shifting global market dynamics. Canadian GDP rebounded slightly in Q3 (increase of 0.6%), and the employment rate has remained steady. Commodity demand and price uncertainty continue to represent some of the most significant challenges faced by Canadian natural resource sectors, affecting commodities such as crude oil, aluminum, steel, and lumber. Key contributing factors include U.S. tariff policies that are disrupting global trade and impacting Canadian energy and natural resource exports, increased protectionism and a shift from multilateral to bilateral trade agreements, a dynamic global geopolitical environment with ongoing conflicts in the Middle East, South America, and in Ukraine, as well as natural disasters.
In this context, NRCan will continue to focus on proactive risk management, regulatory efficiency, and support for major nation‑building projects that maintain international competitiveness and secure long‑term Canadian prosperity. Additionally, NRCan continues to lead cutting-edge research to inform the sustainable management of natural resources, and to position Canada as a clean and conventional energy superpower. Guided by the principles of inclusion, diversity, equity, and accessibility along with Gender-based Analysis Plus, the department will advance natural resource science and innovative technologies while upholding a commitment to Canadian values of respect for people and the environment.
NRCan remains committed to reconciliation by strengthening Indigenous partnerships and supporting economic reconciliation in natural resource sectors. This includes implementing action plan measures under the United Nations Declaration on the Rights of Indigenous Peoples Act (UNDA), building meaningful relationships and collaborative partnerships with Indigenous organizations and communities, and delivering funding to increase the participation of Indigenous peoples in natural resource development. These efforts support active and meaningful reconciliation, and aim to increase the capacity of Indigenous peoples to participate in natural resource development and major projects, in support of the government’s Build Canada agenda.
To keep pace in the rapidly evolving digital world, the department will advance work to implement an integrated plan to respond to Canada’s Digital Ambition. NRCan has developed an AI Strategy to support responsible adoption of artificial intelligence, consistent with TBS expectations. Investments in AI, cybersecurity, research, innovation, and workforce upskilling will help modernize and secure NRCan’s digital services. Strengthening cybersecurity remains a top priority as threats grow more sophisticated, ensuring NRCan can protect its data and continue delivering key programs and services for Canadians. Following the GC Enterprise Cyber Security Strategy, NRCan has adopted a modernized operating model centered on risk-based decision-making and defence. This approach bolsters our departmental resilience by safeguarding the confidentiality and availability of our digital services in a rapidly evolving threat landscape.
NRCan continues to strengthen its risk management capabilities and effectiveness, to better support decision‑making, coordination, and priority setting. An increased capacity to recognize and understand challenges also supports more efficient delivery of the department’s mandate and core responsibilities. The integration of consistent risk management methodologies across departmental risk processes ensures well-coordinated mitigation actions are informed by up-to-date assessments of risk information to effectively prioritize actions under fiscal restraint. This includes implementing mitigation strategies to manage potential upcoming financial and operational risks associated with Workforce Adjustments, ensuring that cost‑containment efforts do not result in increased downstream pressures, reduced service quality, or unintended impacts on timely and effective service delivery to Canadians.
As outlined in the 2023-2026 Corporate Risk Profile (CRP), the Department is monitoring the following six strategic risks and three operational risks:
Strategic risks
- External Engagement
- Policy, Funding Authority
- Federal Alignment
- Regulatory Regime
- Reconciliation
- Inclusion, Diversity, Equity and Accessibility
Operational risks
- Cyber Security
- Workplace Wellness
- Corporate Service Delivery
Strategic risks affect the department’s ability to deliver on its mandate, while operational risks relate to the efficiency of internal activities. With the current CRP expiring in spring 2026, NRCan is developing its 2027–30 CRP to ensure departmental risks remain accurate and reflective of the evolving operating environment. Q3 observations and ongoing changes, as outlined above, have informed the development of the 2027-30 CRP and departmental responses, supporting business continuity and strategic future planning. NRCan will closely and routinely monitor and update these key corporate risks to inform leadership on risk status, and identify if further action is required, while continuing to support Canadians and our natural resource sectors in 2025-26, and beyond.
4. Significant Changes in Relation to Operations, Personnel, Programs
The following significant changes occurred during the third quarter of 2025-2026:
- In early December, further to the passing of Budget 2025 and the Comprehensive Expenditure Review conducted over the summer months, the department began to implement reduction decisions. In total, NRCan plans to reduce approximately 807 positions by 2028-29.
- On December 19th, it was announced that Greg Orencsak would be assuming the role of NRCan Deputy Minister in the new year, replacing Michael Vandergrift.
No other significant change in relation to operations, personnel or programs occurred during the third quarter of 2025-2026.
Original signed by:
Greg Orencsak
Deputy Minister
Date signed
February 18, 2026
Ottawa, Canada
Original signed by:
Francis Brisson
Chief Financial Officer
Date signed
February 16, 2026
Ottawa, Canada
| (in thousands of dollars) | Fiscal Year 2025-2026 | Fiscal Year 2024-2025 | ||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2026* | Expended 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** | Expended during the quarter ended December 31, 2024 |
Year-to-date used at quarter-end | |
| Vote 1 - Net Operating Expenditures | 992,137 | 213,949 | 656,383 | 957,079 | 218,164 | 635,299 |
| Vote 5 - Capital Expenditures | 60,333 | 14,923 | 22,977 | 59,217 | 8,890 | 18,445 |
| Vote 10 - Grants and Contributions | 2,657,998 | 291,161 | 613,641 | 3,011,383 | 367,922 | 1,201,267 |
| Statutory Payments | ||||||
| Minister of Natural Resources – Salary and motor car allowance | 102 | 25 | 77 | 99 | 25 | 74 |
| Contributions to employee benefit plans | 86,294 | 21,565 | 64,696 | 74,496 | 18,168 | 54,504 |
| Contribution to the Canada/Newfoundland Offshore Petroleum Board | 14,028 | 3,507 | 10,634 | 12,915 | 3,507 | 10,000 |
| Contribution to the Canada/Nova Scotia Offshore Petroleum Board | 4,156 | 984 | 4,101 | 2,716 | 739 | 2,151 |
| Payments to the Nova Scotia Offshore Revenue Account | - | - | 1 | - | - | 14 |
| Payments to the Newfoundland Offshore Petroleum Resource Revenue Fund | 1,418,651 | 298,634 | 1,068,489 | 1,741,979 | 245,868 | 556,625 |
| Climate Action Support | - | - | - | - | (21) | (21) |
| Geomatics Canada Revolving Fund | (270) | - | - | 264 | - | - |
| Spending of amounts equivalent to proceeds from disposal of surplus moveable crown assets | - | 129 | 129 | - | 76 | 81 |
| Total Statutory Payments | 1,522,961 | 324,844 | 1,148,127 | 1,832,469 | 268,362 | 623,428 |
| Total Budgetary Authorities | 5,233,429 | 844,877 | 2,441,128 | 5,860,148 | 863,338 | 2,478,439 |
* Total available for use includes only authorities available for use and granted by Parliament at quarter-end through the Main Estimates and Supplementary Estimates (B), for which full supply was released, as well as TB approved adjustments.
** Total available for use includes only authorities available for use and granted by Parliament at quarter-end through the Main Estimate and Supplementary Estimates (A) and (B), for which full supply was released, as well as TB approved adjustments.
| (in thousands of dollars) | Fiscal Year 2025-2026 | Fiscal Year 2024-2025 | ||||
|---|---|---|---|---|---|---|
| Total available for use for the year ending March 31, 2026* | Expended 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** | Expended during the quarter ended December 31, 2024 |
Year-to-date used at quarter-end | |
| Budgetary Expenditures: | ||||||
| Personnel | 674,191 | 185,831 | 555,061 | 635,353 | 179,656 | 530,362 |
| Transportation and communication | 24,537 | 4,121 | 11,900 | 18,280 | 5,632 | 14,151 |
| Information | 31,696 | 2,952 | 11,153 | 30,727 | 6,167 | 12,883 |
| Professional and special services | 249,867 | 31,521 | 94,723 | 235,836 | 37,659 | 96,278 |
| Rentals | 30,353 | 9,159 | 26,124 | 44,088 | 3,248 | 12,921 |
| Repair and maintenance | 9,976 | 691 | 2,157 | 11,950 | 673 | 2,008 |
| Utilities, materials and supplies | 45,941 | 4,672 | 13,052 | 49,130 | 5,174 | 14,175 |
| Acquisition of land, buildings and works | 16,478 | 8,696 | 12,784 | 8,868 | 2,562 | 5,377 |
| Acquisition of machinery and equipment | 79,082 | 5,318 | 19,415 | 80,573 | 9,062 | 21,636 |
| Transfer payments | 4,094,833 | 594,286 | 1,696,866 | 4,768,993 | 618,015 | 1,770,036 |
| Other subsidies and payments | 13,205 | 4,321 | 12,996 | 13,191 | (1,062) | 10,929 |
| Total Budgetary Expenditures | 5,270,159 | 851,568 | 2,456,230 | 5,896,989 | 866,786 | 2,490,756 |
| Less: Total Revenues Netted Against Expenditures | 36,730 | 6,691 | 15,102 | 36,841 | 3,448 | 12,317 |
| Total Net Budgetary Expenditures | 5,233,429 | 844,877 | 2,441,128 | 5,860,148 | 863,338 | 2,478,439 |
* Total available for use includes only authorities available for use and granted by Parliament at quarter-end through the Main Estimates and Supplementary Estimates (B), for which full supply was released, as well as TB approved adjustments.
** Total available for use includes only authorities available for use and granted by Parliament at quarter-end through the Main Estimate and Supplementary Estimates (A) and (B) , for which full supply was released, as well as TB approved adjustments.