2019-2020 Future-Oriented Statement of Operations

From: Impact Assessment Agency of Canada

Canadian Environmental Assessment Agency
Future-Oriented Statement of Operations (unaudited)
For the Year Ending March 31, 2020
(in dollars)

Forecast results 2018–19 Planned results 2019–20
Expenses
Environmental Assessment Delivery Program 43,242,214 46,054,894
Environmental Assessment Policy Program 7,750,483 22,779,774
Internal Services 10,781,893 11,483,221
Total expenses 61,774,590 80,317,889
Revenues
Environmental Assessment and training services 2,102,713 2,000,000
Miscellaneous revenues 142,624 0
Revenues earned on behalf of government (618,401) 0
Total revenues 1,626,936 2,000,000
Net cost of operations before government funding and transfers 60,147,654 78,317,889

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

The information in the forecast results for fiscal year 2018-2019 is based on actual results as at November 30th, 2018 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2019-2020 fiscal year.

The main assumptions underlying the forecasts are as follows:

  • The Canadian Environmental Assessment Agency’s (the Agency) activities will remain substantially the same as in the previous year;
  • Expenses and revenues, including the determination of amounts internal and external to the government, are based on past experience. Also, the Agency has received extra funding following the Treasury Board submission related to the upcoming implementation of Bill C-69 which will change the mandate of the Agency that will become the Impact Assessment Agency of Canada;
  • Estimated year end information for 2018-2019 is used as the opening position for the 2019-2020 forecasts;
  • As of 2019-2020, the Agency will have a separate vote for Grants and contributions.

These assumptions are made as at January 29, 2019.

In 2019-20, the Agency will be subject to a number of changes based on the potential expansion of its mandate due to Bill C-69, which is still within the parliamentary process.   Current activities and associated costs are on going and are considered in these statements, such as: costs related to the conduct of assessment processes; costs associated with the delivery of non-cost recoverable assessment review panels; and increasing legal and litigation costs. The Agency will continue to develop strategies to manage and/or mitigate financial pressures to respond to fluctuations in activity levels.

2. Variations and changes to forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2018-2019 and for 2019-2020, 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, the Agency 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:

  • the timing and the amount of acquisitions and disposals of equipment which may affect gains, losses and amortization expense;
  • the implementation of new collective agreements;
  • economic conditions, which may affect both the amount of revenue earned and the collectability of receivables;
  • 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, 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 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 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

The Agency records expenses on an accrual basis.

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 Agency’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 considered to be earned on behalf of the Government of Canada and are therefore presented as a reduction of the Agency’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 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 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)

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

Forecast results 2018–19 Planned results 2019–20
Net cost of operations before government funding and transfers 60,769,917 78,317,889
Adjustment for items affecting net cost of operations but not affecting authorities:
Services provided without charge by other government departments (5,800,205) (5,150,138)
Increase in vacation pay and compensatory leave (171,034) 337,052
Decrease in employee future benefits 1,049,169 596,567
Refund of previous years’ expenditures 74,522 73,643
Total items affecting net cost of operations but not affecting authorities (4,847,548) (4,142,876)
Requested authorities 55,922,370 74,175,013

b) Authorities requested (in dollars)

Forecast results 2018–19 Planned results 2019–20
Authorities requested
Vote 1: operating expenditures 50,697,197 53,511,120
Vote 10: Grants and Contributions 0 14,525,184
Statutory amounts 5,225,173 6,138,709
Total authorities requested 55,922,370 74,175,013
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