2019-2020 Future-Oriented Statement of Operations (Unaudited) Public Health Agency of Canada

Public Health Agency of Canada
Future-Oriented Statement of Operations (unaudited)
for the year ending March 31
(in dollars)
  Forecast results
2018-19
Planned results
2019-20
Expenses
Infectious disease prevention and control $ 219,675,389 $ 224,960,638
Health promotion and chronic disease prevention 328,649,184 263,527,871
Health security 65,975,993 60,080,591
Internal services 115,279,012 105,002,749
Expenses incurred on behalf of government (34,220) (50,272)
Total expenses 729,545,358 653,521,577
Revenues
Sales of goods and services
Rights and privileges 209,508 118,013
Services of a non-regulatory nature 14,111,125 14,107,148
Lease and use of public property 3,125 5,092
Interest 2,285 8,155
Other 52,268 49,183
Revenues earned on behalf of government (390,171) (302,618)
Total revenues 13,988,140 13,984,973
Net cost of operations before government funding and transfers $ 715,557,218 $ 639,536,604

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 2018-19 is based on actual results as at December 31, 2018 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2019-20.

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, 2018.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2018-19 and for 2019-20, 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 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

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 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
2018-19
Planned results
 2019-20
Net cost of operations before government funding and transfers $ 715,557,218 $ 639,536,604
Adjustment for items affecting net cost of operations but not affecting
authorities:
Amortization of tangible capital assets (14,950,600) (14,834,221)
Loss on disposal of tangible capital assets (70,908) (151,410)
Services provided without charge by other government departments (26,364,382) (32,073,588)
Decrease (increase) in vacation pay and compensatory leave 423,844 (211,922)
Decrease in employee future benefits 526,702 537,236
Refund/adjustment of previous years’ expenditures 3,242,223 3,379,569
Bad debt expense (39,827) (58,347)
Statutory spending authority equivalent to revenues earned 13,412,742 13,412,742
Other 33,984 49,998
Total items affecting net cost of operations but not affecting authorities (23,786,222) (29,949,943)
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 7,925,839 7,752,500
Proceeds from disposal of Crown assets 51,934 48,805
Total items not affecting net cost of operations but affecting authorities 7,977,773 7,801,305
Requested authorities $ 699,748,769 $ 617,387,966
(b) Authorities requested (in dollars)
  Forecast results
 2018-19
Planned results
 2019-20
Authorities requested
Vote 1: operating expenditures $ 344,130,846 $ 324,818,303
Vote 5: capital expenditures 7,925,839 7,752,500
Vote 10: grants and contributions 301,388,579 238,443,035
Statutory amounts 46,303,505 46,374,128
Total authorities requested $ 699,748,769 $ 617,387,966
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