Future-Oriented Statement of Operations for the year ending March 31, 2022

Shared Services Canada - Future-Oriented Statement of Operations (unaudited) for the year ending March 31 (in thousands of dollars)
  Forecast results 2020-21 Planned results 2021-22
Expenses
Common Government of Canada IT Operations 2,999,203 2,489,634
Internal Services 280,028 259,843
Total expenses 3,279,231 2,749,477
Revenues
Sale of goods and services 785,547 676,547
Miscellaneous revenues 453 386
Revenues earned on behalf of Government (11,565) (11,568)
Total revenues 774,435 665,365
Net cost of operations before government funding and transfers 2,504,796 2,084,112

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

Notes to the Future-Oriented Statement of Operations (unaudited) for the year ending March 31

1. Methodology and significant assumptions

The Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Departmental Plan.

The information in the forecast results for fiscal year 2020-21 has been calculated on the basis of available departmental authorities, considering this, actual expenditures and revenues are expected to be higher, aligned with actual revenues collected. Forecasts have been made for the planned results for fiscal year 2021-22.

The main assumptions underlying the forecasts are as follows:

These assumptions were adopted as at January 22, 2021.

2. Variations and changes to the forecast financial information

Although every attempt has been made to forecast final results for the remainder of 2020-21 and for 2021 22, 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, Shared Services Canada (SSC) 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, SSC 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 2020-21, 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

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 provision for bad debts, as well as utilization of prepaid expenses, and other are also included in expenses.

b) Revenues

Revenues are recognized in the period the event giving rise to the revenues occurs.

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.

Revenues that are non-respendable are not available to discharge SSC’s liabilities. While the President is expected to maintain accounting control, he has no authority regarding 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 in reduction of SSC’s gross revenues.

4. Parliamentary authorities

SSC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to SSC 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, SSC 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 2020-21 Planned results 2021-22
Net cost of operations before government funding and transfers 2,504,796 2,084,112
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (396,653) (420,498)
Net loss on disposal of tangible capital assets including adjustments (116) (114)
Services provided without charge by other government departments (115,393) (112,533)
Decrease (increase) in vacation pay and compensatory leave (1,829) 9,688
Decrease (increase) in employee future benefits (965) 1,928
Refunds and adjustments to previous years’ expenses 11,349 11,304
Other 435 366
Total items affecting net cost of operations but not affecting authorities (503,172) (509,859)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets 511,320 279,982
Payments on lease obligations for tangible capital assets 60,062 45,672
Payments on obligation under public private partnership 3,500 3,630
Increase (decrease) in prepaid expenses (34,581) 4,518
Total items not affecting net cost of operations but affecting authorities 540,301 333,802
Requested authorities forecasted to be used 2,541,925 1,908,055
b) Authorities provided/requested (in thousands of dollars)
  Forecast results 2020-21 Planned results 2021-22
Authorities provided/requested:
Vote 1 – Operating expenditures 1,963,605 1,603,401
Vote 5 – Capital expenditures 468,320 209,982
Statutory amounts 110,000 94,672
Requested authorities forecasted to be used 2,541,925 1,908,055
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