Future-Oriented Statement of Operations (Unaudited) For the Year Ending March 31 (in thousands of dollars)

Forecast results 2018-19 Planned results 2019-20
Expenses
Economic development in Atlantic Canada 256,665 266,832
Internal Services 30,264 29,894
Expenses incurred on behalf of government (19,517) (21,517)
Total expenses 267,412 275,209
Revenues
Revenue from amortization of discount on assistance loans 5,874 9,726
Interest on overdue loans 889 484
Gain on disposal of tangible capital and non-capital assets 13 19
Miscellaneous revenues 4 24
Revenues earned on behalf of government (6,767) (10,234)
Total revenues 13 19
Net cost of operations 267,399 275,190

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

Notes to the Future-Oriented Statement of Operations (Unaudited)

1. Methodology and Significant Assumptions

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

The information in the forecasted results for fiscal year 2018-19 is based on actual results as at November 30, 2018, and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2019-20 fiscal year.

The main assumptions underlying the forecasts are as follows:

These assumptions are adopted as at November 30, 2018, with the exception of possible funding for Steel and Aluminum.

2. Variations and Changes to the Forecast Financial Information

Although every attempt has been made to forecast final results for the remainder of 2018-19 and for 2019-20, 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, the Atlantic Canada Opportunities Agency has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based on historical 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:

After the Departmental Plan is tabled in Parliament, the Agency 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 2017-18, 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

The Department records expenses on an accrual basis.

Transfer payments are recorded as an expense in the year the transfer is authorized and all eligibility criteria have been met by the recipient.

Other expenses are generally recorded when goods are received or services are rendered and include expenses related to personnel, professional and special services, repair and maintenance, utilities, materials and supplies, as well as amortization of tangible capital assets. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments, advances and inventory obsolescence, as well as use of inventories and prepaid expenses, and other are also included in other expenses.

(b) Revenues

Revenues from regulatory fees are recognized in the accounts based on the services provided in the fiscal year.

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenue. These revenues are recognized in the period in which the related expenses are incurred.

Funds that have been received are recorded as deferred revenue, provided the Department has an obligation to other parties for the provision of goods, services or the use of assets in the future.

Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place.

Revenues that are non-respendable are not available to discharge the Department’s liabilities. Although the deputy head is expected to maintain accounting control, he or she 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 Department’s gross revenues.

4. Parliamentary Authorities

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency 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, the Agency 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 thousands of dollars)

  Forecast results 2018-19  Planned results 2019-20
Net cost of operations before government funding and transfers 267,399 275,190
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (198) (340)
Gain on disposal of tangible capital assets 13 19
Services provided without charge by other government departments (8,560) (8,574)
Decrease in vacation pay and compensatory leave 39 (291)
Increase in employee future benefits (349) 27
Conditions met on contributions 13,736 12,544
Total of items affecting net cost of operations but not affecting authorities 4,681 3,385
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 588 25
Assistance loans issued on behalf of government 80,747 74,685
Total of items not affecting net cost of operations but affecting authorities 81,335 74,710
Forecast current year lapse 3,168 3,000
Forecast authorities available 356,583 356,285

(b) Authorities requested (in thousands of dollars)

Forecast results 2018-19 Planned results 2019-20
Authorities requested:
Vote 1 – Operating expenditures 70,477 69,073
Vote 5 – Grants and contributions 277,937 278,664
Statutory amounts – Employee benefit plans 8,169 8,548
Forecast authorities available 356,583 356,285
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