Future-oriented Financial Statements for the year ending March 31, 2014
Table of Contents
- Statement of Management Responsibility
- Future-oriented Statement of Financial Position (Unaudited)
- Future-oriented Statement of Operations and Departmental Financial Position (Unaudited)
- Future-oriented Statement of Change in Departmental Net Debt (Unaudited)
- Future-oriented Statement of Cash Flow (Unaudited)
- Notes to the Future-oriented Financial Statements (Unaudited)
- Authority and objectives
- Methodology and significant assumptions
- Variations and changes to the forecast financial information
- Summary of significant accounting policies
- Parliamentary authorities
- Accounts payable and accrued liabilities
- Employee future benefits
- Other liabilities
- Accounts receivable and advances
- Tangible capital assets
- Contractual obligations
- Contingent liabilities
- Related party transactions
- Segmented Information
- Transfers from other government departments
- Accounting changes
Statement of Management Responsibility
The introduction of Future-oriented Financial Statements is a Parliamentary direction for departments to provide enhanced financial information to external users. Health Canada has prepared a full set of Future-oriented Financial Statements which forecast results for the 2013-14 fiscal year and update 2012-13 projections. Responsibility for the compilation, content and presentation of the Future-oriented Financial Statements for the years ended March 31, 2013 and 2014 and all information contained in this statement rests with Health Canada's management. This future-oriented information has been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards. The Future-oriented Financial Statements and accompanying notes are submitted in Part III of the Estimates (Report on Plans and Priorities), and will be used in the Departmental Performance Report to compare with actual results.
Departmental management is responsible for these Future-oriented Financial Statements, including responsibility for the appropriateness of the forecasts and future projections on which these statements are prepared. These forecasts and future projections are based upon information available and known to management at the time of development. They reflect current business and economic conditions, assume a continuation of current governmental priorities and are consistent with Health Canada's mandate and strategic objectives. Much of the future-oriented financial information uses best estimates, assumptions and judgement to derive forecasts and future projections as at December 31, 2012 and reflect the plans described in the Report on Plans and Priorities while at the same time giving due consideration to materiality. At the time of preparation of this information, management believes these best estimates and assumptions to be reasonable. However, as with any use of best estimates and assumptions, there is a measure of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.
The actual results achieved for the fiscal year covered in the accompanying Future-oriented Financial Statements will vary from the information presented and these variations may be material.
- Glenda Yeates
Deputy Minister
Ottawa, Canada
Date: February 22, 2013 - Jamie Tibbetts
Chief Financial Officer
Ottawa, Canada
Date: February 15, 2013
Future-oriented Statement of Financial Position (Unaudited)
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Liabilities | ||
Accounts payable and accrued liabilities (note 6) | $ 322,669 | $ 311,052 |
Vacation pay and compensatory leave | 37,355 | 35,955 |
Deferred revenue | 1,876 | 1,652 |
Employee future benefits (note 7) | 130,498 | 115,360 |
Other liabilities (note 8) | 440,619 | 357,614 |
Total gross liabilities | 933,017 | 821,633 |
Liabilities held on behalf of Government | ||
Deferred revenue | (33) | (28) |
Total liabilities held on behalf of Government | (33) | (28) |
Total net liabilities | 932,984 | 821,605 |
Financial assets | ||
Due from Consolidated Revenue Fund | 155,565 | 59,303 |
Accounts receivable and advances (note 9) | 42,516 | 42,146 |
Total gross financial assets | 198,081 | 101,449 |
Financial assets held on behalf of Government | ||
Accounts receivable and advances (note 9) | (8,928) | (8,851) |
Total financial assets held on behalf of Government | (8,928) | (8,851) |
Total net financial assets | 189,153 | 92,598 |
Departmental net debt | 743,831 | 729,007 |
Non-financial assets | ||
Tangible capital assets (note 10) | 145,846 | 146,361 |
Total non-financial assets | 145,846 | 146,361 |
Departmental net financial position | $ (597,985) | $ (582,646) |
- Contractual obligations (note 11)
- Contingent liabilities (note 12)
- Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
- The accompanying notes form an integral part of these future-oriented financial statements.
Future-oriented Statement of Operations and Departmental Financial Position (Unaudited)
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Expenses | ||
A health system responsive to the needs of Canadians | $ 384,403 | $ 352,768 |
Canadians are informed of and protected from health risks associated with food, products, substances and environments, and are informed of the benefits of healthy eating | 701,849 | 659,654 |
First Nations and Inuit communities and individuals receive health services and benefits that are responsive to their needs so as to improve their health status | 2,490,612 | 2,207,751 |
Internal services | 399,806 | 295,995 |
Expenses incurred on behalf of Government | 711 | (730) |
Total expenses | 3,977,381 | 3,515,438 |
Revenues | ||
Sales of goods and services | ||
Services of a regulatory nature | 52,804 | 53,424 |
Rights and privileges | 56,602 | 57,898 |
Services of a non-regulatory nature | 21,767 | 21,869 |
Other | 1 | 2 |
Revenues earned on behalf of government | (18,393) | (17,344) |
Total revenues | 112,781 | 115,849 |
Net cost from continuing operations | 3,864,600 | 3,399,589 |
Transferred operations (note 15) | ||
Expenses | - | 4,523 |
Net cost of transferred operations | - | 4,523 |
Net cost of operations before government funding and transfers | 3,864,600 | 3,404,112 |
Government funding and transfers | ||
Net cash provided by Government | 3,871,553 | 3,385,766 |
Change in due from Consolidated Revenue Fund | (62,325) | (96,262) |
Services provided without charge by other government departments (note 13) | 129,629 | 129,192 |
Transfer of assets and liabilities from other government departments | ||
Hazardous Materials Review Commission (note 15 (a)) | - | 755 |
Public Health Agency (note 15 (b)) | 5,864 | - |
Assisted Human Reproduction Canada (note 15 (c)) | 381 | - |
Net cost of operations after government funding and transfers | (80,502) | (15,339) |
Departmental net financial position - Beginning of year | (678,487) | (597,985) |
Departmental net financial position - End of year | $ (597,985) | $ (582,646) |
- Segmented information (note 14)
- Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
- The accompanying notes form an integral part of these future-oriented financial statements.
Future-oriented Statement of Change in Departmental Net Debt (Unaudited)
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Net cost of operations after government funding and transfers | $ (80,502) | $ (15,339) |
Change due to tangible capital assets | ||
Acquisition of tangible capital assets | 37,350 | 28,641 |
Amortization of tangible capital assets | (25,305) | (26,435) |
Net (loss) or gain on disposal of tangible capital assets including adjustments | (3,187) | (1,691) |
Total change due to tangible capital assets | 8,858 | 515 |
Change due to prepaid expenses | (12,400) | - |
Net increase (decrease) in departmental net debt | (84,044) | (14,824) |
Departmental net debt - Beginning of year | 827,875 | 743,831 |
Departmental net debt - End of year | $ 743,831 | $ 729,007 |
- Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
- The accompanying notes form an integral part of these future-oriented financial statements.
Future-oriented Statement of Cash Flow (Unaudited)
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Operating activities | ||
Net cost of operations before government funding and transfers | $ 3,864,600 | $ 3,404,112 |
Non-cash items: | ||
Amortization of tangible capital assets | (25,305) | (26,435) |
Gain (loss) on disposal of tangible capital assets | (3,187) | (1,691) |
Services provided without charge by other government departments (note 11) | (129,629) | (129,192) |
Variations in Statement of Financial Position: | ||
Decrease (increase) in accounts payable and accrued liabilities | 40,691 | 11,617 |
Decrease (increase) in vacation pay and compensatory leave | 182 | 1,400 |
Decrease (increase) in deferred revenue | 1,733 | 219 |
Decrease (increase) in employee future benefits | 12,719 | 15,138 |
Decrease (increase) in other liabilities | 88,566 | 83,005 |
Increase (decrease) in accounts receivable and advances | 2,478 | (293) |
Increase (decrease) in prepaid expenses | (12,400) | - |
Transfer of liabilities from other government departments | (6,245) | (755) |
Cash used in operating activities | 3,834,203 | 3,357,125 |
Capital investing activities | ||
Acquisition of tangible capital assets | 37,350 | 28,641 |
Cash used in capital investing activities | 37,350 | 28,641 |
Net cash provided by Government of Canada | $ 3,871,553 | $ 3,385,766 |
- Information for the year ending March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.
- The accompanying notes form an integral part of these future-oriented financial statements.
Notes to the Future-oriented Financial Statements (Unaudited)
For the Year Ending March 31, 2014
1. Authority and objectives
The Department of Health was established effective July 12, 1996 under the Department of Health Act to participate in the promotion and preservation of the health of the people of Canada. It is named in Schedule I of the Financial Administration Act and reports through the Minister of Health. Priorities and reporting are aligned under the following strategic outcomes and related program activities:
Strategic Outcome 1: A health system responsive to the needs of Canadians
Canadians expect their governments to provide a health system that meets their needs and that delivers results effectively and efficiently. In addition to ensuring that it meets specific federal responsibilities, such as health services for federal employees and during international events held in Canada, Health Canada works with provincial and territorial governments as well as health organizations and other stakeholder groups to address the health objectives of Canadians. Research and policy analysis, support and funding to test innovations in health service delivery and monitoring of provincial and territorial application of the Canada Health Act all lead to continuing improvement in Canada's health system.
Program Activities
- Canadian health system
- Specialized health services
- Official language minority community development
Strategic Outcome 2: Canadians are informed of and protected from health risks associated with food, products, substances and environments, and are informed of the benefits of healthy eating
This Strategic Outcome seeks to ensure that the food that Canadians eat and products they use are as safe as possible and that threats to health are addressed effectively. It helps increase Canadians' understanding of factors that influence everyone's health such as environmental conditions and nutrition. It helps to limit the use and abuse of tobacco and illicit drugs.
Program Activities
- Health products
- Food safety and nutrition
- Environmental risks to health
- Consumer products safety
- Substance use and abuse
- Radiation protection
- Pesticide safety
Strategic Outcome 3: First Nations and Inuit communities and individuals receive health services and benefits that are responsive to their needs so as to improve their health status
This Strategic Outcome seeks to ensure that First Nations and Inuit living on reserve or in Inuit communities have access to health services as well as a limited range of medically necessary health-related goods and services not provided through private insurance plans, provincial/ territorial health or social programs or other publicly funded programs. It seeks to reduce the gap in health outcomes between First Nations and Inuit and the Canadian population in general.
Program Activities
- First Nations and Inuit primary health care
- Supplementary health benefits for First Nations and Inuit
- Health infrastructure support for First Nations and Inuit
Internal services
Health Canada has a range of internal services. Some, such as financial, administrative, real property, security, human resources, information management and Information Technology, provide the basic infrastructure that enables the Department to function while ensuring compliance to new and existing central agency policies. Other internal services in Health Canada address departmental and Health Portfolio needs such as general communications and policy activities, as well as managing relations with Parliamentarians, the Cabinet system and other government departments and levels of government. An additional set of internal service roles centre on critical departmental and government-wide responsibilities, such as ensuring the best value for Canadians through planning, accountability and tracking performance and results.
2. Methodology and significant assumptions
The future-oriented financial statements have been prepared on the basis of the government priorities and the plans of the Department as described in the Report on Plans and Priorities.
The information in the Estimated Results for fiscal year 2012-13 is based on actual results as at December 31, 2012 and forecasts for the remainder of the fiscal year, which include an estimate of all anticipated and approved funding through Main and Supplementary Estimates. Estimated year end information for 2012-13 is used as the opening position for the 2013-14 fiscal year.
The Planned Results for 2013-14 include approved reference level funding and planned spending amounts for which Treasury Board approval was received no later than February 1, 2013.
The main assumptions are as follows:
- The Department's activities will remain substantially the same as for the previous year.
- Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
- Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.
These assumptions are adopted as at December 31, 2012.
3. Variations and Changes to the Forecast Financial Information
While every attempt has been made to forecast final results for the remainder of 2012-13 and 2013-14, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.
In preparing these future-oriented financial statements, Health 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 financial statements and the historical financial statements include:
- The timing and amounts of acquisition and disposals of property, plant and equipment may affect gains/losses and amortization expense.
- Implementation of new collective agreements.
- Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.
- Further changes to the operating budget through additional new initiatives or technical adjustments later in the year. Given the demand driven nature of certain programs, particularly related to First Nations and Inuit Non-insured Health Benefits, the 2013-14 planned spending amounts do not include portions of funding over the Non-insured Health Benefits A-base funding, which are subject to the annual government assessments and budget considerations.
Once the Report on Plans and Priorities is presented, Health Canada will not be updating the forecasts for any changes to appropriations or forecast financial information made in ensuring supplementary estimates. Variances will be explained in the Departmental Performance Report.
4. Summary of significant accounting policies
These financial statements have been prepared using the Government's accounting policies stated below, 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) Parliamentary authorities
The Department of Health 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. Consequently, items recognized in the Statement of Financial Position and the Statement of Operations and Departmental Net Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.
(b) Net cash provided by Government
The Department operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the Department is deposited to the CRF and all cash disbursements made by the Department are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements, including transactions between departments of the Government.
(c) Amounts due from the Consolidated Revenue Fund
Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Department is entitled to draw from the CRF without further authorities to discharge its liabilities.
(d) 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 Department Head (DH) 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.
(e) Expenses
Expenses are recorded on the accrual basis:
- Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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 statements. 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.
- Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment;
- Services provided without charge by other government departments for accommodation, employer contributions to health and dental insurance plans, legal services and workers' compensation are recorded as operating expenses at their estimated cost.
(f) Employee future benefits
- Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The Department's contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. The Department's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
- Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
g) Accounts receivable
Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.
(h) Contingent liabilities
Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the future-oriented financial statements.
(i) Environmental liabilities
Environmental liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. Based on management's best estimates, a liability is accrued and an expense recorded when the contamination occurs or when the Department becomes aware of the contamination and is obligated, or is likely to be obligated to incur such costs. If the likelihood of the Department's obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the costs are disclosed as contingent liabilities in the notes to the future-oriented financial statements.
(j) Tangible capital assets
All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Health Canada does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.
Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:
Asset class | Sub-asset class | Amortization period |
---|---|---|
Buildings | Buildings | 25 years |
Works and infrastructure | Works and infrastructure | 25 years |
Leasehold improvements | Leasehold improvements | Lease term, max. 40 years |
Machinery and equipment | Machinery and equipment | 8-12 years |
Computer equipment | 3-5 years | |
Computer software | 3 years | |
In-house developed software | 5 years | |
Other equipment | 5-12 years | |
Vehicles | Motor vehicles | 4-7 years |
Other vehicles | 10 years | |
Assets under construction | Buildings in progress of construction Engineering works in progress of construction Work in progress for software Other construction or work in progress |
Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use. |
(k) Measurement uncertainty
The preparation of these future-oriented financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, environmental liabilities, the liability for employee future benefits, the allowance for doubtful accounts and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the future-oriented financial statements in the year they become known.
5. Parliamentary authorities
Health Canada receives most of its funding through annual parliamentary authorities. Items recognized in the Future-oriented Statement of Financial Position and the Future-oriented Statement of Operations and Departmental Net Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. These differences are reconciled in the following tables:
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Net cost of operations before government funding and transfers | $ 3,864,600 | $ 3,404,112 |
Adjustments for items affecting net cost of operations but not affecting authorities: | ||
Amortization of tangible capital assets | (25,305) | (26,435) |
Services provided without charge by other government departments | (129,629) | (129,192) |
Decrease (increase) in vacation pay and compensatory leave | 182 | 1,400 |
Decrease (increase) in employee future benefits | 12,719 | 15,138 |
Refund/adjustment of previous year's expenditures | 32,086 | 31,712 |
Bad debt expense | 3,386 | (3,477) |
Other | (13,342) | (20,950) |
Total items affecting net cost of operations but not affecting authorities | 3,744,697 | 3,272,308 |
Adjustments for items not affecting net cost of operations but affecting authorities: | ||
Acquisitions of tangible capital assets | 37,350 | 28,641 |
Net change to accountable advances | 1 | - |
Total items not affecting net cost of operations but affecting authorities | 37,351 | 28,641 |
Current year authorities used | $ 3,782,048 | $ 3,300,949 |
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Authorities provided: | ||
Vote 1 - Operating expenditures | $ 2,086,460 | $ 1,723,425 |
Vote 5 - Capital expenditures | 37,350 | 28,641 |
Vote 10 - Grants and contributions | 1,523,290 | 1,422,714 |
Statutory amounts | 134,948 | 126,169 |
Current year authorities used | $ 3,782,048 | $ 3,300,949 |
6. Accounts payable and accrued liabilities
The following table presents details of Health Canada's accounts payable and accrued liabilities:
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Accounts payable - external parties | $ 148,293 | $148,672 |
Accounts payable - other government departments and agencies | 23,246 | 17,778 |
Total accounts payable | 171,539 | 166,450 |
Accrued liabilities | 151,130 | 144,602 |
Total accounts payable and accrued liabilities | $ 322,669 | $ 311,052 |
In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the three fiscal years starting in 2012-13. As a result, the Department recorded at March 31, 2012 an obligation for termination benefits for an amount of $65.1 million as part of accrued liabilities to reflect the estimated workforce adjustment costs.
7. Employee future benefits
(a) Pension benefits
The Department's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2% per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.
Both the employees and the Department contribute to the cost of the Plan. The current and previous year expenses, which represent approximately 1.8 times (1.9 times in 2012-13) the contributions by employees, amount to:
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Expense for the year | $ 97,028 | $ 90,716 |
The Department's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the future-oriented financial statements of the Government of Canada, as the Plan's sponsor.
(b) Severance benefits
The Department provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.
As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.
Information about the severance benefits, measured as at March 31, is as follows:
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Accrued benefit obligation - Beginning of year | $ 143,217 | $ 130,498 |
Transferred to other government department | 4,588 | 456 |
Subtotal | 147,805 | 130,954 |
Expense for the year | 2,056 | 9,776 |
Benefits paid during the year | (19,363) | (25,370) |
Accrued benefit obligation - End of year | $ 130,498 | $ 115,360 |
8. Other liabilities
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Canada Health Infoway Inc. | $ 399,954 | $ 316,657 |
Other | 40,665 | 40,957 |
Total other liabilities | $ 440,619 | $ 357,614 |
Budget 2007 announced an allocation of $400.0 million to Canada Health Infoway Inc. and an additional allocation of $500.0 million to Canada Health Infoway Inc. was announced in Budget 2009. Of these authorities $500.1 million has been disbursed to date. We project addition disbursements of $89.4 million in 2012-13 and $83.3 million in 2013-14.
The remaining other liabilities include amounts for contingent liabilities of $33.0 million and amounts for Specified Purpose Accounts: Collaborative research projects; miscellaneous federal/provincial projects; and World Health Organization.
9. Accounts receivable and advances
Health Canada records receivables from three main sources. As of March 31, amounts due under each of these categories are as follows:
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Accounts receivable - external parties | $ 41,688 | $ 44,498 |
Accounts receivable - other government departments and agencies | 7,656 | 7,952 |
Employee advances | 100 | 102 |
Subtotal | 49,444 | 52,552 |
Allowance for doubtful accounts on receivables from external parties | (6,928) | (10,406) |
Gross accounts receivable and advances | 42,516 | 42,146 |
Accounts receivable held on behalf of Government | (8,928) | (8,851) |
Net accounts receivable and advances | $ 33,588 | $ 33,295 |
10. Tangible capital assets
Capital assets | Opening Balance | Acquisitions | Disposals/ write-downs |
Transfers and adjustments | Closing Balance |
---|---|---|---|---|---|
Land | 1,177 | - | - | - | 1,177 |
Buildings | 136,262 | 4,281 | - | 5,649 | 146,192 |
Works and infrastructure | 1,539 | - | - | (102) | 1,437 |
Leasehold improvements | 28,081 | - | - | 1,625 | 29,706 |
Machinery and equipment | 197,117 | 11,685 | - | 6,366 | 215,168 |
Vehicles | 18,940 | 2,078 | - | (10) | 21,008 |
Assets under construction | 30,381 | 10,597 | - | (15,219) | 25,759 |
Total | $ 413,497 | $ 28,641 | $ - | $ (1,691) | 440,447 |
Accumulated amortization | Opening Balance | Current year amortization | Disposals/ write-downs |
Transfers and adjustments | Closing Balance |
---|---|---|---|---|---|
Buildings | 110,218 | 5,255 | - | - | 115,473 |
Works and infrastructure | 245 | 70 | - | - | 315 |
Leasehold improvements | 21,053 | 725 | - | - | 21,778 |
Machinery and equipment | 123,852 | 18,410 | - | - | 142,262 |
Vehicles | 12,283 | 1,975 | - | - | 14,258 |
Total | $ 267,651 | $ 26,435 | $ - | $ - | $ 294,086 |
Tangible capital assets net book value | Net Book Value 2013 | Net change Acquisitions and Amortization | Net change Disposals / write-downs | Net change Transfers and adjustments | Net Book Value 2014 |
---|---|---|---|---|---|
Land | 1,177 | - | - | - | 1,177 |
Buildings | 26,044 | (974) | - | 5,649 | 30,719 |
Works and infrastructure | 1,294 | (70) | - | (102) | 1,122 |
Leasehold improvements | 7,028 | (725) | - | 1,625 | 7,928 |
Machinery and equipment | 73,265 | (6,725) | - | 6,366 | 72,906 |
Vehicles | 6,657 | 103 | - | (10) | 6,750 |
Asset under construction | 30,381 | 10,597 | - | (15,219) | 25,759 |
Total | $ 145,846 | $ 2,206 | $ - | $ (1,691) | $ 146,361 |
Transfers from assets under construction represent assets that were put into use in the year and have been transferred to the other capital asset classes as applicable.
11. Contractual obligations
The nature of Health Canada's activities can result in multi-year contracts and obligations whereby the Department will be obligated to make some future payments in order to carry out its transfer payment programs or when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
Fiscal year | Transfer payments | Non-insured health benefits | Total |
---|---|---|---|
2013-14 | 202,972 | 23,000 | 225,972 |
2014-15 | 176,972 | 16,000 | 192,972 |
2015-16 | 145,972 | - | 145,972 |
2016-17 and thereafter | 212,000 | - | 212,000 |
Total | $ 737,916 | $ 39,000 | $ 776,916 |
12. Contingent liabilities
Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown. They are grouped into two categories as follows:
(a) Contaminated sites
Liabilities are accrued to record the estimated costs related to the management and remediation of contaminated sites where the Department is obligated or likely to be obligated to incur such costs. Health Canada has identified sites where such action is possible and for which a liability has been recorded.
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Approximate number of sites for which a liability has been recorded | 1 | 1 |
Liability recorded for contaminated sites (in thousands of dollars) | $ 167 | $ 167 |
Health Canada's ongoing efforts to assess contaminated sites may result in additional environmental liabilities related to newly identified sites, or changes in the assessments or intended use of existing sites. These liabilities will be accrued by the Department in the year in which they become likely and are reasonably estimable.
(b) Claims and litigation
Claims have been made against the Department in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. The Department has recorded an allowance for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $0.2 million in 2013-14 ($0.2 million in 2012-13).
13. Related party transactions
The Department is related as a result of common ownership to all government departments, agencies, and Crown Corporations. The Department enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the Department received common services which were obtained without charge from other government departments as disclosed below.
(a) Common services provided without charge by other government departments
During the year, the Department received services without charge from certain common service organizations, related to accommodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the Department's Statement of Operations and Departmental Net Financial Position as follows:
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Employer's contribution to the health and dental insurance plans | $ 68,266 | $ 68,108 |
Accommodation | 57,516 | 57,499 |
Legal services | 3,316 | 3,079 |
Worker's compensation | 531 | 506 |
Total | $ 129,629 | $ 129,192 |
The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included in the Department's Future-oriented Statement of Operations and Departmental Net Financial Position.
(b) Other transactions with related parties
Component | Estimated Results 2013 |
Planned Results 2014 |
---|---|---|
Accounts receivable - other government departments and agencies | $ 7,656 | $ 7,952 |
Accounts payable - other government departments and agencies | 23,246 | 17,778 |
Expenses - other government departments and agencies | 33,588 | 33,295 |
Revenues - other government departments and agencies | (33) | (28) |
Expenses and revenues disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).
14. Segmented information
Component | Estimated Results 2013 |
Planned Results 2014 |
||||
---|---|---|---|---|---|---|
Total | A health system responsive to the needs of Canadians | Canadians are informed of and protected from health risks associated with food, products, substances and environments, and are informed of the benefits of healthy eating | First Nations and Inuit communities and individuals receive health services and benefits that are responsive to their needs so as to improve their health status | Internal services | Total | |
Expenses | ||||||
Transfer payments | $ 1,504,574 | $ 282,754 | 34,437 | $ 1,085,426 | $ - | $ 1,402,617 |
Salaries and employee benefits | 984,141 | 55,491 | 462,514 | 191,529 | 196,060 | 905,594 |
Utilities, materials and supplies | 543,458 | 618 | 21,251 | 407,541 | 12,341 | 441,751 |
Professional and special services | 554,328 | 8,208 | 79,315 | 319,178 | 30,300 | 437,001 |
Travel non-insured health patients | 195,218 | - | - | 158,087 | - | 158,087 |
Accommodation | 59,383 | 3,499 | 29,592 | 10,873 | 15,719 | 59,683 |
Travel and relocation | 47,564 | 1,435 | 9,977 | 25,757 | 3,931 | 41,100 |
Amortization of tangible capital assets | 25,305 | 254 | 8,953 | 3,861 | 13,367 | 26,435 |
Purchased repair and maintenance | 18,727 | 130 | 3,373 | 1,364 | 8,808 | 13,675 |
Information services | 21,526 | 140 | 6,316 | 1,326 | 2,944 | 10,726 |
Rentals | 16,826 | 119 | 2,054 | 812 | 7,020 | 10,005 |
Communications | 7,559 | 141 | 1,613 | 2,495 | 1,353 | 5,602 |
Bad debts | (3,386) | - | - | - | 3,477 | 3,477 |
Other | 1,447 | (21) | 259 | (498) | 675 | 415 |
Expenses incurred on behalf of Government | 711 | - | - | - | (730) | (730) |
Total expenses | 3,977,381 | 352,768 | 659,654 | 2,207,751 | 295,265 | 3,515,438 |
Revenues | ||||||
Sales of goods and services: | ||||||
Services of a regulatory nature | 52,804 | - | 53,072 | - | 353 | 53,424 |
Rights and privileges | 56,602 | - | 49,345 | - | 8,553 | 57,898 |
Services of a non-regulatory nature | 21,767 | 8,304 | 8,110 | 5,450 | 4 | 21,869 |
Other | 1 | - | 2 | - | - | 2 |
Revenues earned on behalf of Government | (18,393) | (1,081) | (14,393) | (710) | (1,160) | (17,344) |
Total revenues | 112,781 | 7,223 | 96,136 | 4,740 | 7,750 | 115,849 |
Net cost from continuing operations | $ 3,864,600 | $ 345,545 | $ 563,518 | $ 2,203,011 | $ 287,515 | $ 3,399,589 |
15. Transfers from other government departments
- Effective April 1, 2013, the Department will be transferred the powers and functions of the Hazardous Materials Information Review Commission in accordance with section 298 of the Jobs and Growth Act, 2012 (Bill C-45), including the stewardship responsibility for the assets and liabilities related to the program. Accordingly, the Department will receive the following assets and liabilities from the Hazardous Materials Information Review Commission on April 1, 2013:
- Effective June 30, 2012, the control and supervision of portions of the federal public administration were transferred between the Department and the Public Health Agency of Canada in accordance with paragraph 2(a) of the Public Service Rearrangement and Transfer of Duties Act and Orders in Council P.C. 2012-0950 and P.C. 2012-0965. Accordingly, the Department received the following liabilities from the Public Health Agency of Canada on June 30, 2012:
- Effective September 30, 2012, the Department was transferred the residual federal functions from Assisted Human Reproduction Canada pursuant to Order in Council P.C. 2012-1136 when subsection 713(2) and sections 721 to 723, 726 and 741 to 751 of the Jobs, Growth and Long-term Prosperity Act came into force. Accordingly, the Department received the following liabilities from Assisted Human Reproduction Canada on September 30, 2012:
16. Accounting Changes
Effective April 1, 2012, the Department adopted the new accounting standard for Government transfers, under which prepaid expenses for transfer payments are no longer recorded.
The change in accounting policy was accounted for prospectively and as a result, the remaining balance was recorded as an expense during 2012-13.
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