Employment and Social Development Canada Consolidated Future-Oriented Statement of Operations (Unaudited) for the year ending March 31, 2023

Consolidated Future-Oriented Statement of Operations (Unaudited) for the year ending March 31, 2023

Table 1: Consolidated Future-Oriented Statement of Operations (Unaudited) for the year ending March 31, 2023 (in thousands of dollars)
Detail Actual Results 2021 Forecast Results 2022 Planned Results 2023
Expenses
Learning, Skills Development and Employment 129,837,053 68,661,702 37,096,889
Pensions and Benefits 62,237,470 64,731,010 70,511,493
Social Development 2,581,101 4,783,870 6,149,549
Internal Services 1,314,241 1,349,836 1,099,145
Information Delivery and Services for Other Departments 251,070 264,316 278,738
Working Conditions and Workplace Relations 122,495 171,226 148,355
Expenses incurred on behalf of Government (20,478) (3,733) (3,837)
Total expenses 196,322,952 139,958,227 115,280,332
Revenues
Employment Insurance 22,896,548 23,940,900 24,788,700
Recovery of CPP administration costs 523,461 586,684 516,306
Recovery of Other Government Department service delivery costs 208,536 188,747 217,024
Interest on loans receivable 170,618 7,728 8,613
Other 58,110 62,374 59,333
Revenues earned on behalf of Government (484,583) (282,352) (107,922)
Total revenues 23,372,690 24,504,081 25,482,054
Net cost of operations before government funding and transfers 172,950,262 115,454,146 89,798,278

Table notes:

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

1. Authority and objectives

Employment and Social Development Canada (ESDC) is a Department in the core public administration. ESDC is a department named in Schedule I of the Financial Administration Act and reports to Parliament through the Ministers responsible for Employment and Social Development (ESD).

The legislative mandate of ESDC is to improve the standard of living and quality of life of all Canadians by promoting a highly skilled and mobile workforce and an efficient and inclusive labour market, as well as to promote social well‑being and income security.

Acts and Regulations for which ESDC Ministers are responsible include the: Department of Employment and Social Development Act, Old Age Security Act, Employment Insurance Act, Canada Pension Plan, Canada Student Financial Assistance Act, Canada Student Loans Act, Universal Child Care Benefit Act, Canada Disability Savings Act, Canada Education Savings Act, Labour Adjustment Benefits Act, Government Annuities Act, Government Annuities Improvement Act, Civil Service Insurance Act, Public Pensions Reporting Act, Apprentice Loans Act, Federal-Provincial Fiscal Arrangements Act, Canada Labour Code, Government Employees Compensation Act, Canada Emergency Response Benefit Act, Canada Emergency Student Benefits Act, Canada Recovery Benefits Act, Canada Worker Lockdown Benefit Act and, where applicable, related Regulations.

ESDC achieves its objectives through the following core responsibilities: Social Development, Pension and Benefits, Learning, Skills Development and Employment, Working Conditions and Workplace Relations, Information Delivery and Services for Other Departments, and Internal Services. For full descriptions of core responsibilities, see the Departmental Plan.

2. Methodology and significant assumptions

The Consolidated 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 the year 2022 is based on actual results as at November 30, 2021 and on forecasts for the remainder of the year. Forecasts have been made for the planned results for the 2023 year.

The main assumptions underlying the forecasts are as follows:

These assumptions are adopted as of January 7, 2022.

3. Variations and changes to the forecast consolidated financial information

Although every attempt has been made to forecast final results for the remainder of 2022 and for 2023, actual results achieved for both years are likely to differ from the forecast information presented, and this variation could be material.

In preparing this Consolidated Future-Oriented Statement of Operations, ESDC 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.  Due to the COVID-19 pandemic, these estimates will be continually evaluated as the situation evolves.  The full impact of the pandemic is unknown and it will depend on future developments that are uncertain.  ESDC expects that the estimates and assumptions used in the preparation of these financial statements will continue to be affected for the near term.

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

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

4. Summary of significant accounting policies

The Consolidated Future-Oriented Statement of Operations has been prepared using the Government of Canada’s accounting policies in effect for fiscal year 2022, 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) Parliamentary authorities

ESDC is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to ESDC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the future-oriented consolidated statement of operations are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

(b) Consolidation

This Consolidated Future-Oriented Statement of Operations includes the transactions of the Employment Insurance Operating (EIO) Account, a consolidated specified purpose account which includes revenues credited and expenses charged under the Employment Insurance Act and for which the Deputy Minister as Chairperson of the Canada Employment Insurance Commission is accountable. The accounts of the EIO Account have been consolidated with those of ESDC, and all inter-organizational balances and transactions have been eliminated.

The Canada Pension Plan (CPP) is excluded from the ESDC's reporting entity because changes to the CPP require the agreement of two thirds of the provinces and it is therefore not controlled by the Government.

(c) Expenses

Expenses are recorded on an accrual basis:

(d) Revenues

Revenues are recorded on an accrual basis:

5. Parliamentary authorities

ESDC receives most of its funding through annual parliamentary authorities. Items recognized in the Consolidated Future-Oriented Statement of Operations in 1 year may be funded through parliamentary authorities in prior, current or future years. Furthermore, as a consolidated specified purpose account, the EIO Account expenses and revenues recognized in ESDC’s Consolidated Future-Oriented Statement of Operations do not affect parliamentary authorities. Accordingly, ESDC 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:

Table 2: (a) Reconciliation of net cost of operations to requested authorities (in thousands of dollars)
Detail Forecast Results 2022 Planned Results 2023
Net cost of operations before government funding and transfers 115,454,146 89,798,278
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (53,683) (53,683)
Services provided without charge by other government departments (76,827) (66,579)
Decrease in vacation pay 41,248 5,318
Decrease in employee future benefits 3,638 13,671
Bad debt expense (excluding EI) (305,540) (291,221)
Refund of program expenditures 44,309 88,541
Decrease (increase) in accounts payable and accrued liabilities not charged to authorities (167,200) 9,314
Revenue not available for respending 183,616 135,709
Revenue for services provided to Other Government Departments 188,747 217,024
Allowance for the Repayment Assistance Plan for Canada Student Loans (281,177) (278,581)
Net EIO Account transactions (14,213,587) (2,017,540)
Other adjustments 1,186 3,572
Total items affecting net cost of operations but not affecting authorities (14,635,270) (2,234,455)
Adjustments for items not affecting net cost of operations but affecting authorities:
Canada Student and Apprentice Loans forgiveness (48,612) (53,536)
Acquisition of tangible capital assets (101,936) (105,912)
Total items not affecting net cost of operations but affecting authorities: (150,548) (159,448)
Requested authorities forecasted to be used 100,668,328 87,404,375
Table 3: (b) Authorities requested (in thousands of dollars):
Detail Forecast Results 2022 Planned Results 2023
Authorities requested:
Vote 1 – Operating expenditures 1,351,968 1,077,997
Vote 5 – Grants and contributions 5,658,379 10,319,347
Debt write-offs 170,358 0
Statutory amounts 93,487,623 76,007,031
Requested authorities forecasted to be used 100,668,328 87,404,375

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