Archived: Departmental Future-Oriented Statement of Operations 2014-15, Environment and Climate Change Canada

 

For the year ending March 31
(in thousands of dollars)
Estimated Results
2014
Planned Results
2015
Expenses   
Conservation of Canada's Natural Environment  $ 338,457  $ 343,194 
Weather Information  236,826  243,667 
Threats from Pollution Minimized  332,226  385,832 
Internal Services  228,077  215,473 
Total Expenses  1,135,586  1,188,166 
Revenues   
Sales of goods and services  103,822  93,808 
Other revenues  8,304  8,524 
Revenues earned on behalf of Government  (13,840)  (13,737) 
Total Revenues  98,286  88,595 
 
NET COST OF OPERATIONS  $ 1,037,300  $ 1,099,571 

The accompanying notes form an integral part of these financial statements.

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 departmental plans as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2013-14 is based on actual results as at December 31, 2013 and on forecasts for the remainder of the fiscal year.  Forecasts have been made for the planned results for the 2014-15 fiscal year.

The main assumptions underlying the forecasts are as follows:

(a) The Department’s activities will remain substantially the same as for the previous year;

(b) 2013-14 estimated expenses and revenues, including the determination of amounts internal and external to the government, are based on historical data and trends, up-to-date Annual Reference Level Update (ARLU) information and supplementary estimates. It does not include the reimbursement of collective agreements and the carry-forwards. The general historical pattern is expected to continue;

(c) 2014-15 planned expenses and revenues, including the determination of amounts internal and external to the government, are based on historical data and trends and up-to-date Annual Reference Level Update (ARLU) information. The general historical pattern is expected to continue;

(d) Estimated year end information for 2013-14 is used as the opening position for the 2014-15 forecasts.

These assumptions are adopted as at January 3, 2014.

2.  Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2013-14 and for 2014-15, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this future-oriented statement of operations, Environment Canada has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

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 amount of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense;

(b) Implementation of new collective agreements;

(c) Economic conditions may affect the amount of revenue earned;

(d) Further changes to the operating budget through additional new initiatives or technical adjustments later in the year;

(e) Deficit reduction action plan measures.

Once the Report on Plans and Priorities is presented, Environment 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 Performance Report.

3. Summary of Significant Accounting Policies

The future-oriented statement of operations has been prepared using Government’s accounting policies that came into effect forthe 2011-12 fiscal year which are 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 are recorded on an accrual basis. Expenses for the Department's operations are recorded when goods are received or services are rendered including services provided without charges for accommodation, employee contributions to health and dental insurance plans, legal services and worker’s compensation 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 respective terms of employment.

Transfer payments are recorded as expenses when the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement or, in the case of transactions which do not form part of an existing program, 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 statement. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, provision for valuation on loans, investments and advances and inventory obsolescence or liabilities, including contingent liabilities and environmental liabilities to the extent the future event is likely to occur and a reasonable estimate can be made.

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 regulatory fees are recognized in the accounts based on the services provided in the 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. While the Deputy Head is expected to maintain accounting control, he or she has no authority regarding 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 in reduction of the entity'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 do not parallel financial reporting according to generally accepted accounting principles  since  authorities  are  primarily  based  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 authorities requested:

(in thousands of dollars) Estimated Results
2014
Planned Results
2015
Net cost of operations  $ 1,037,300  $ 1,099,571 
Adjustments for items affecting net cost of operations but not affecting authorities:  
Services provided without charge by other government departments (100,133)  (98,373) 
Decrease in liabilities related to the workforce adjustment  1,800  500 
Increase in environmental liabilities   (13,057)  (15,518) 
Expenses related to court awards   (609)  (608) 
Expenses related to deferred revenue  (3,380)  (3,549) 
Decrease in vacation pay and compensatory leave   3,722  1,192 
Decrease in employee future benefits   35,236  11,565 
Adjustments for prior years Payable At Year End   2,990  3,144 
Refunds of previous years' expenditures   1,178  1,257 
Amortization of tangible capital assets  (40,110)  (41,745) 
Total items affecting net cost of operations but not affecting authorities  (112,363)  (142,135) 
 
Adjustments for items not affecting net cost of operations but affecting appropriations:    
Acquisition of tangible capital assets  52,116  52,789 
Capital lease payments  604  638 
Acquisition of inventory  444  643 
Total items not affecting net cost of operations but affecting authorities  53,164  54,070 
 
Requested authorities  $ 978,101  $ 1,011,506 

(b) Authorities requested:

(in thousands of dollars) Estimated Results
2014
Planned Results
2015
Authorities requested   
Vote 1 - Operating expenditures   $ 697,001  $ 687,165 
Vote 5 - Capital expenditures   52,116  52,789 
Vote 10 - Grants and Contributions 119,599  186,625 
Statutory amounts  109,385  84,927 
Requested authorities  $ 978,101 $ 1,011,506 

Forecast authorities requested for the year ending March 31, 2015 are the planned spending amounts presented in the 2014-15 Report on Plans and Priorities. Estimated authorities requested for the year ending March 31, 2014 include amounts presented in the 2013-14 Main Estimates and Supplementary Estimates (A) and (B) and amounts planned for presentation in Supplementary Estimates (C); it does not include the reimbursement of collective agreements and the carry-forwards.

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