2020-2021 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 thousands of dollars)
  Forecast results
2019-20
Planned results
2020-21
Expenses
Infectious disease prevention and control $ 239,060 $ 229,452
Health promotion and chronic disease prevention 284,343 286,629
Health security 61,798 59,519
Internal services 115,339 103,286
Expenses incurred on behalf of government (64) (70)
Total expenses 700,476 678,816
Revenues
Sales of goods and services
Rights and privileges 386 242
Services of a non-regulatory nature 14,206 14,203
Interest 8 7
Other 49 61
Revenues earned on behalf of government (529) (389)
Total revenues 14,120 14,124
Net cost of operations before government funding and transfers $ 686,356 $ 664,692

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 2019-20 is based on actual results as at January 24, 2020 and on forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for fiscal year 2020-21.

The main assumptions underlying the forecasts are as follows:

These assumptions are made as at January 24, 2020.

2. Variations and changes to the forecast financial information

In its mandate, the Agency responds to public health events, such as emergencies and outbreaks.  Due to the federal government’s response to the novel coronavirus 2019, results for 2019-20 and/or 2020-21 are likely to differ from the forecast information presented in these statements. 

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:

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 2019-20, 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 thousands of dollars)
  Forecast results
2019-120
Planned results
2020-21
Net cost of operations before government funding and transfers $ 686,356 $ 664,692
Adjustment for items affecting net cost of operations but not affecting
authorities:
Amortization of tangible capital assets (15,653) (15,936)
Loss on disposal of tangible capital assets (132) (48)
Services provided without charge by other government departments (28,361) (27,863)
Increase in vacation pay and compensatory leave (2,244) (2,710)
Decrease in employee future benefits 545 556
Refunds/adjustments of previous years’ expenditures 3,212 2,936
Bad debt expense (76) (81)
Statutory spending authority equivalent to revenues earned 13,413 13,413
Other 65 70
Total items affecting net cost of operations but not affecting authorities (29,231) (29,663)
Adjustment for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 8,157 6,798
Proceeds from disposal of Crown assets 56 61
Total items not affecting net cost of operations but affecting authorities 8,213 6,859
Requested authorities $ 665,338 $ 641,888
(b) Authorities provided/requested (in thousands of dollars)
  Forecast results
2019-20
Planned results
2020-21
Authorities provided/requested
Vote 1: operating expenditures $ 360,399 $ 339,626
Vote 5: capital expenditures 8,157 6,798
Vote 10: grants and contributions 251,478 250,790
Statutory amounts 45,304 44,674
Total authorities provided/requested $ 665,338 $ 641,888
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