Departmental Future-Oriented Statement of Operations 2019 to 2020, Environment and Climate Change Canada

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 Empty
Taking Action on Clean Growth and Climate Change $ 603,190 $ 719,050
Preventing and Managing Pollution 394,345 386,960
Conserving Nature 262,683 318,328
Predicting Weather and Environmental Conditions 291,182 296,319
Internal Services 241,851 235,409
Total expenses 1,793,251 1,956,066
Revenues Empty
Sales of goods and services 82,186 80,974
Other revenues 36,912 38,817
Revenues earned on behalf of Government (9,806) (11,793)
Total revenues 109,292 107,998
Empty
Net cost of operations before government funding and transfers $ 1,683,959 $ 1,848,068

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 departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2018-19 is based on actual results as at December 31, 2018 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2019-20.

The main assumptions underlying the forecasts are as follows:

  1. The department’s activities will remain substantially the same as in the previous year;
  2. 2018-19 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, budget implementation, supplementary estimates and carry-forward funding. The general historical pattern is expected to continue;
  3. 2019-20 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. Figures for the planned results do not include items such as carry-forward funding. The general historical pattern is expected to continue; and
  4. Estimated year end information for 2018-19 is used as the opening position for the 2019-20 forecasts.

These assumptions are made as at December 31, 2018.

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, Environment and Climate Change 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:

  1. the timing and the amount of acquisitions and disposals of property, plant and equipment, which may affect gains, losses and amortization expense;
  2. the implementation of new collective agreements;
  3. economic conditions, which may affect both the amount of revenue earned and the collectability of loan receivables;
  4. interest rates in effect at the time of issue, which will affect the net present value of non-interest-bearing loans; and
  5. 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, Environment and Climate Change 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 Government of Canada's accounting policies in effect for fiscal year 2018-19, 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. Provisions to reflect changes in the value of assets or liabilities, such as provisions for bad debts, loans, investments and advances and inventory obsolescence, as well as utilization of inventories and prepaid expenses, and other are also included in other expenses.

(b) Revenues

Revenues from regulatory fees are recognized 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.

Deferred revenue consists of amounts received in advance of the delivery of goods and rendering of services that will be recognized as revenue in a subsequent fiscal year as it is earned.

Other revenues are recognized in the period the event giving rise to the revenues occurred.

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 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:

(in thousands of dollars) Forcast results
2018-19
Planned results
2019-20
Net cost of operations before government funding and transfers $ 1,683,959 $ 1,848,068
Adjustment for items affecting net cost of operations but not affecting authorities: Empty
Amortization of tangible capital assets (49,677) (55,104)
Services provided without charge by other government departments (103,879) (106,139)
Refunds/adjustments to previous years' expenses 3,845 3,638
Decrease (increase) in accrued liabilities not charged to authorities 9,340 1,532
Decrease (increase) in vacation pay and compensatory leave (1,653) (989)
Decrease (increase) in employee future benefits (698) 371
Decrease (increase) in environmental liabilities 8,313 27,211
Increase (decrease) in inventory 103 0
Total items affecting net cost of operations but not affecting authorities (134,306) (129,480)
Empty
Adjustment for items not affecting net cost of operations but affecting authorities: Empty
Acquisition of tangible capital assets 90,030 82,323
Decrease in lease obligations for tangible capital assets 794 839
Total items not affecting net cost of operations but affecting authorities 90,824 83,162
Empty
Requested authorities $ 1,640,477 $ 1,801,750

(b) Authorities requested:

(in thousands of dollars) Forcast results
for 2018-19
Planned results
for 2019-20
Authorities requested Empty
Vote 1 - Operating expenditures $ 817,272 $ 837,299
Vote 5 - Capital expenditures 90,030 82,323
Vote 10 - Grants and Contributions 640,440 787,559
Statutory amounts 92,735 94,569
Total authorities requested : $ 1,640,477 $ 1,801,750

Requested authorities for the year ending March 31, 2020 are the planned spending amounts presented in the 2019-20 Departmental Plan. Requested authorities for the year ending March 31, 2019 include amounts presented in the 2018-19 Main Estimates, Budget Implementation and Supplementary Estimates (A) and (B) as well as the carry-forward funding.

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