2016-2017 Future-oriented Financial Statements

Canadian Environmental Assessment Agency
Future-Oriented Statement of Operations (Unaudited)
For the Year Ending March 31, 2017
(in dollars)

Forecast Results
2015 -16
Planned Results
2016 -17
Environmental Assessment Delivery Program 26,025,601 29,313,192
Environmental Assessment Policy Program 5,018,577 4,743,327
Internal Services 6,386,724 6,058,524
Total expenses 37,430,902 40,115,043
Environmental assessment and training services 1,156,224 4,500,000
Miscellaneous revenues 0 0
Total revenues 1,156,224 4,500,000
Net Cost of operations before government funding and transfers 36,274,678 35,615,043

The accompanying notes form an integral part of the Future-Oriented Statement of Operations.

1. Methodology and Significant Assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of the government priorities and the Canadian Environmental Assessment Agency’s (the Agency) plans as described in the Report on Plans and Priorities.

The information in the forecast results for fiscal year 2015-2016 is based on actual results as at September 30, 2015, and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2016-2017 fiscal year.

The main assumptions are as follows:

  1. The Agency’s activities will remain substantially the same as in the previous year;
  2. 2015 -2016 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 information and supplementary estimates. It does not include the reimbursement of collective agreements and carry-forwards. The normal historical pattern is expected to continue;
  3. 2016 -2017 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 information. The normal historical pattern is expected to continue; and
  4. Estimated year end information for 2015-2016 is used as the opening position for the 2016-2017 forecasts.

These assumptions are adopted as at September 30, 2015.

In 2016-17, the Agency will be subject to a number of additional financial pressures including: costs related to the review of environmental assessment processes; costs associated with the delivery of non-cost recoverable environmental assessment review panels; increasing legal and litigation costs; and potential accommodation relocation costs due to the expiry of a number of office leases. Due to the uncertainties associated with these items, these costs have not been reflected in the planned spending. The Agency will develop strategies to manage these pressures as details and timing of these activities become clearer.

2. Variations and Changes to Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2015-2016 and for 2016-2017, 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, the Agency 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 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 the following:

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense.
  2. Implementation of new collective agreements.
  3. Economic conditions may affect both the amount of revenue earned and the collectability of loan receivables.
  4. Interest rates in effect at the time of issue will affect the net present value of non-interest bearing loans.
  5. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Agency 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 the government’s accounting policies that came into effect for the 2015-2016 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 Agency’s operations are recorded when goods are received or services rendered, including services provided without charges for accommodation, employer 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 employments.

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 that 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 Agency has 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 Agency'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 to the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

4. Parliamentary Authorities

The Agency is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to the Agency does not parallel financial reporting according to generally accepted accounting principles because 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 Agency 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 dollars):
Forecast Results
2015 -16
Planned Results
2016 -17
Net cost of operations before government funding and transfers 36,274,678 35,615,043
Adjustments for items affecting net cost of operations but not affecting authorities
  Amortization of tangible capital assets (22,089) (22,089)
  Services provided without charge by other government departments (4,676,005) (4,689,456)
  (Increase) Decrease for vacation pay and compensatory leave (184,731) 0
  (Increase) Decrease for employee future benefits 247,472 7,537
  (Increase) Decrease in accrued liabilities not charged to authorities 0 0
Forecast current year lapse Table Note 1 600,000 0
Total items affecting net cost of operations but not affecting authorities (4,035,353) (4,704,008)
Adjustment for items not affecting net cost of operations but affecting authorities 0 0
Requested authorities 32,239,325 30,911,035

Table Notes

Table Note 1

EBP frozen allotment of 20% following a conversion from Operations Sub-Allotment to Personnel Sub-Allotment

Return to table note 1  referrer

b) Authorities requested (in dollars)
Forecast Results
2015 -16h
Planned Results
2016 -17h
Authorities requested:
Vote 1 – Operating expenditures 29,156,074 27,512,578
Statutory amounts 3,083,251 3,398,457
Requested Authorities 32,239,325 30,911,035
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