Future-Oriented Statement of Operations, 2020-2021

POLAR KNOWLEDGE CANADA

Future-Oriented Statement of Operations (Unaudited)
For the year ended March 31 (in dollars)	Forecast results 2019-2020	Planned results 2020-2021
Expenses
Polar Science and Knowledge	15,151,972	17,552,954
Internal Services	17,971,639	15,083,589
Total expenses	33,123,611	32,636,543
Revenues
Lease and use of public property	300,140	300,140
Revenues earned on behalf of Government	(300,140)	(300,140)
Total revenues	-	-
Net cost of operations before government funding and transfers	33,123,611	32,636,543

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.

POLAR KNOWLEDGE CANADA

Notes to Future-Oriented Statements of Operations

For the Year Ending March 31 (Unaudited)

1. Methodology and significant assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2019-20 is based on actual results as at November 30, 2019 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2020-21 fiscal year.

The main assumptions underlying the forecasts are as follows:

• The activities of the organization will evolve following the implementation of the Station;
• Expenses, including the determination of amounts internal and external to the government, are based on past experience. The general historical pattern is expected to continue;
• Revenues were estimated based on the anticipated number of employees to be located in Cambridge Bay and will occupy rental units.

These assumptions are adopted as at November 30, 2019.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2019-20 and for 2020-21, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Future-Oriented Statement of Operations, Polar Knowledge Canada has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on past experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are continually evaluated.

Factors that could lead to material differences between the Future Oriented Statement of Operations and the historical statement of operations include:

• the timing and the amount of acquisitions, transfers and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
• the implementation of new collective agreements;
• economic conditions, which may affect both the amount of revenue earned and the collectability of receivables;
• other changes to the operating budget, such as new initiatives or technical adjustments later in the fiscal year.

After the Departmental Plan is tabled in Parliament, Polar Knowledge Canada will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Results Report.

3. Summary of Significant Accounting Policies

The Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2019-20, and is based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

a) Expenses

Expenses for the department’s operations are recorded when goods are received or services are rendered, including services provided without charge for employer contributions to health and dental insurance plans, which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave, as well as severance benefits, are accrued, and expenses are recorded as the benefits are earned by employees under their terms of employment.

Transfer payments are recorded as expenses when the recipients have met all the eligibility criteria and the transfers are authorized by March 31. In the case of transfers that do not form part of an existing program, the transfers are considered to be authorized when the government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.

Expenses also include amortization of tangible capital assets, which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.

b) Revenues

Revenues from the lease and use of public property are recognized in the period the event giving rise to the revenues occurred.

Revenues that are non-respendable are not available to discharge POLAR’s liabilities. While the President and Chief Executive Officer is expected to maintain accounting control, he has no authority over the disposition of non-respendable revenues. As a result, non respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the entity’s gross revenues.

4. Parliamentary Authorities

POLAR is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to POLAR differs from financial reporting according to generally accepted accounting principles because authorities are based mainly on cash flow requirements. Items recognized in the Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current or future years. Accordingly, POLAR has different net cost of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

a) Reconciliation of net cost of operations to requested authorities:
(in dollars)	Forecast results 2019-2020	Planned results 2020-2021
Net cost of operations before government funding and transfers	33,123,611	32,636,543
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets	(322,491)	(344,928)
Services provided without charge by other government departments	(737,645)	(990,132)
Decrease (increase) in vacation pay and compensatory leave	(160,778)	(214,370)
Decrease (increase) in employee future benefits	(18,372)	(24,496)
Total items affecting net cost of operations but not affecting authorities	(1,239,286)	(1,573,926)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions and improvements to tangible capital assets	175,000	115,000
Increase (decrease) in prepaid expenses	-	-
Total items not affecting net cost of operations but affecting authorities	175,000	115,000
Requested authorities	32,059,325	31,177,617
b) Authorities requested (in dollars)	Forecast results 2019-2020	Planned results 2020-2021
Vote 1 - Program expenditures	30,564,916	29,453,623
Statutory amounts	1,494,409	1,723,994
Requested authorities	32,059,325	31,177,617