2023-24 Health Canada Future-Oriented Statement of Operations

Health Canada

Future-Oriented Statement of Operations (unaudited)
for the year ending March 31
(in thousands of dollars) Forecast results
2022-23
Planned results
2023-24
Expenses
Health Care Systems $ 3,251,691 $ 2,958,122
Health Protection and Promotion 1,194,575 1,123,264
Internal Services 479,487 352,586
Expenses incurred on behalf of government (97) (116)
Total expenses 4,925,656 4,433,856
Revenues
Sales of goods and services
Services of a regulatory nature 98,362 100,950
Rights and privileges 171,212 170,743
Services of a non-regulatory nature 101,813 105,438
Lease and use of public property 65 56
Revenues from fines 883 638
Interest 771 487
Other 535 504
Revenues earned on behalf of government (100,559) (93,966)
Total revenues 273,082 284,850
Net cost of operations before government funding and transfers $ 4,652,574 $ 4,149,006

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

The information in the forecast results for fiscal year 2022-23 is based on actual results as at December 31, 2022 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2023-24.

The main assumptions underlying the forecasts are as follows:

These assumptions are made as at December 31, 2022.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2022-23 and for 2023-24, 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, Health 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 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:

After the Departmental Plan is tabled in Parliament, Health 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 the Government of Canada's accounting policies in effect for fiscal year 2022-23, 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 and advances, as well as utilization of 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 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 a 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) Forecast results
2022-23
Planned results
2023-24
Net cost of operations before government funding and transfers $ 4,652,574 $ 4,149,006
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (25,701) (25,395)
Gain on disposal of tangible capital assets 535 163
Services provided without charge by other government departments (125,230) (128,357)
Decrease in vacation pay and compensatory leave 8,559 14,217
Decrease in employee future benefits 1,444 1,473
Refunds/adjustments of previous years' expenditures 44,585 10,449
Bad debt expense (241) (299)
Decrease in transfer payment accrual (12) (27)
Decrease in inventory (30,996) -
Amortization of advance payments (88,638) (16,090)
Statutory spending authority equivalent to revenues earned 51,463 51,463
Other 2,955 (991)
Total items affecting net cost of operations but not affecting authorities (161,277) (93,394)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 24,028 27,991
Issuance of advance payments 16,090 16,090
Issuance of salary overpayments 350 350
Issuance of salary advance 183 184
Proceeds from disposal of Crown assets 23 25
Total items not affecting net cost of operations but affecting authorities 40,674 44,640
Requested authorities forecasted to be used $ 4,531,971 $ 4,100,252
b. Authorities provided/requested
(in thousands of dollars) Forecast results
2022-23
Planned results
2023-24
Authorities provided/requested
Vote 1:  operating expenditures $ 1,603,241 $ 1,032,415
Vote 5:  capital expenditures 24,028 27,991
Vote 10:  grants and contributions 2,516,007 2,858,624
Statutory:  COVID 1,789,123 -
Statutory:  Payments related to Canadian Dental Benefit 298,500 -
Other statutory amounts 190,195 181,222
Total authorities provided/requested 6,421,094 4,100,252
Less:  Estimated adjustment to statutory authority (789,123) -
Less:  Estimated unused authorities (1,100,000) -
Requested authorities forecasted to be used $ 4,531,971 $ 4,100,252

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