2026-2027 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 based on government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2025-2026 is based on actual results as at December 31, 2025 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2026-2027.

The main assumptions underlying the forecasts are as follows:

(a) The Agency's activities will remain substantially the same as in the previous year;
(b) 2025-2026 estimated expenses and revenues, including the determination of amounts internal and external to the government, are based on the up-to-date Annual Reference Level Update (ARLU), supplementary estimates, government wide initiatives and carry-forward
(c) 2026-2027 planned expenses and revenues, including the determination of amounts internal and external to the government, are based on the up-to-date Annual Reference Level Update (ARLU) information. Figures for the planned results do not include items such as carry-forward funding.

These assumptions are made as at December 31, 2025.

2. Variations and Changes to the Forecast Financial Information

Although every attempt has been made to forecast final results for the remainder of 2025-2026 and for 2026-2027, 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, Canada Water Agency has made estimates and assumptions about the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are based 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:

(a) the timing and the amount of acquisitions of capital items, which may affect gains, losses and amortization
(b) the implementation of new collective agreements;
(c) economic conditions, which may affect both the amount of revenue earned;
(d) 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, Canada Water 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 Government of Canada's accounting policies in effect for fiscal year 2025-2026, 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
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.
(b) Revenues
Deferred revenue consists of amounts received prior to the provision of goods or services that will be recognized as revenue in a subsequent fiscal year as the performance obligations are met.

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 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 Department is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the department 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 department 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:

(b) Authorities provided/requested: