2018-2019 Future-Oriented Statement of Operations (Unaudited) Public Health Agency of Canada

Cost of operations before government funding and transfers

For the year ending March 31
(Amounts shown in dollars)

Forecast Results 2017-2018 Planned Results 2018-2019
Expenses
Infectious Disease Prevention and Control $ 199,677,975 $ 211,500,173
Health Promotion and Chronic Disease Prevention 252,340,765 238,234,339
Health Security 88,472,870 61,748,016
Internal Services 115,751,459 107,143,812
Expenses incurred on behalf of Government (14,202) (32,183)
Total expenses 656,228,867 618,594,157
Revenues
Sales of goods and services
Rights and Privileges 109,902 66,596
Services of a non-regulatory nature 14,056,722 14,063,283
Lease and use of public property 30,944 38,764
Interest 9,279 8,802
Other 44,783 33,394
Revenues earned on behalf of Government (269,984) (241,138)
Total revenues 13,981,646 13,969,701
Net cost of operations before government funding and transfers $ 642,247,221 $ 604,624,456

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 the Public Health Agency of Canada's (the Agency) plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2017-18 is based on actual results as at December 31, 2017 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2018-19.

The main assumptions underlying the forecasts are as follows:

  • The Agency's 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. The general historical pattern is expected to continue.

These assumptions are made as at December 31, 2017.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2017-18 and for 2018-19, 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 property, plant and equipment, which may affect gains, losses and amortization expense;
  • the implementation of new collective agreements;
  • economic conditions, which may affect the amount of revenue earned; and
  • 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 2017-18, which 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 and advances, as well as utilization of prepaid expenses, and other are also included in other expenses.

(b) Revenues

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 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 Agency's liabilities. Although the deputy head is expected to maintain accounting control, 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 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)
Forecast Results 2017-2018 Planned Results 2018-2019
Net cost of operations before government funding and transfers $ 642,247,221 $ 604,624,456
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (14,042,426) (14,024,496)
Loss on disposal of tangible capital assets (91,218) (102,084)
Services provided without charge by other government departments (25,486,166) (24,288,672)
Decrease (increase) in vacation pay and compensatory leave 280,168 (33,362)
Decrease in employee future benefits 248,437 253,406
Refund/adjustment of prior years' expenditures 3,581,287 3,483,124
Bad debt expense (20,355) (40,835)
Statutory spending authority equivalent to revenues earned 13,412,742 13,412,742
Other 14,915 32,334
Total items affecting net cost of operations but not affecting authorities (22,102,616) (21,307,843)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 8,097,293 5,862,750
Proceeds from disposal of tangible capital assets 44,491 33,109
Total items not affecting net cost of operations but affecting authorities 8,141,784 5,895,859
Requested authorities $ 628,286,389 $ 589,212,472
(b) Authorities requested (in dollars)
Forecast Results 2017-2018 Planned Results 2018-2019
Authorities requested:
Vote 1 - Operating expenditures $ 353,990,750 $ 327,486,691
Vote 5 - Capital expenditures 8,097,293 5,862,750
Vote 10 - Grants and contributions 222,672,480 211,843,231
Statutory amounts 43,525,866 44,019,800
Total Requested authorities $ 628,286,389 $ 589,212,472
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