Aboriginal Affairs and Northern Development Canada - Future-Oriented Statement of Operations for the Year Ending March 31, 2015

Table of contents

Future-Oriented Statement of Operations (Unaudited)
For the year ended March 31

(in thousands of dollars)

  Estimated
Results
2014
Planned
Results
2015
Expenses
tab1-c 3,698,633 3,615,556
Government 2,121,112 1,811,253
Land and Economy 1,422,405 1,456,886
Internal Services 431,668 273,305
North 52,878 86,256
Expenses incurred on behalf of Government (4,720) (4,612)
Total expenses 7,721,976 7,238,644
Revenues
Norman Wells project profits 103,440 98,268
Resource royalties 33,633 49,629
Interest on loans 5,955 5,955
Miscellaneous 3,780 3,777
Leases and rentals 776 724
Finance and administrative services 750 710
Revenues earned on behalf of Government (146,865) (157,351)
Total revenues 1,469 1,712
Net cost of operations 7,720,507 7,236,932

The accompanying notes form an integral part of the future-oriented statement of operations.

Notes to the Future-Oriented Financial Statements (Unaudited)
For the Year Ended March 31

1. Methodology and Significant Assumptions

The future-oriented statement of operations has been prepared on the basis of the government priorities and the plans of the department as described in the RPP.

The information in the estimated results for fiscal year 2013-14 is based on actual results as at December 31, 2013 and forecasts for the remainder of the fiscal year. Forecasts have been made for the planned results for the 2014-15 fiscal year.

The main assumptions are as follows:

  1. AANDC's activities will remain substantially the same as the previous year.
  2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience. The general historical pattern is expected to continue.
  3. Accruals for new contingent liabilities and new environmental liabilities cannot be reasonably foreseen or quantified and have therefore been excluded from the forecast.
  4. Allowances for uncollectibility are based on historical experience. The general historical pattern is expected to continue.

These assumptions are adopted as of December 31, 2013.

2. Variations and changes to the forecast financial information

While every attempt has been made to accurately forecast final results for the remainder of 2013-14 and for 2014-15, actual results achieved for both years will vary from the forecast information presented, and this variation may be material.

In preparing the future-oriented statement of operations AANDC has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the future-oriented statement of operations and the historical statement of operations include:
  1. The timing and amounts of acquisitions and disposals of tangible capital assets, which would affect gains/losses and amortization expense.
  2. The implementation of new collective agreements, which would affect salaries and employee future benefits.
  3. Interest rates, which would affect the net present value of settled claims.
  4. Economic conditions, which would affect the amount of revenue earned and the collectibility of loans receivable.
  5. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year, which would affect forecasted expenditures.

Once the RPP is presented, AANDC will not be updating the forecast for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

3. Summary of significant accounting policies

The future-oriented statement of operations has been prepared in accordance with the Government's accounting policies that came into effect for the 2011-12 fiscal year, which are 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 recorded on an accrual basis. Expenses for the Department operations are recorded when goods are received or services are rendered including services provided without charges for accommodation, employee contributions to health and dental insurance plans, legal services and worker's compensation which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave as well as severance benefits are accrued and expenses are recorded as the benefits are earned by employees under their respective terms of employment.

Transfer payments are recorded as expenses when the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement or, in the case of transactions which do not form part of an existing program, when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statement.

Expenses include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable and provisions for valuation on loans and advances, or liabilities, including contingent liabilities and environmental liabilities to the extent the future event is likely to occur and a reasonable estimate can be made.

Expenses also include amortization of tangible capital assets which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset.

b) Revenues – Revenues from regulatory fees are recognized in the accounts based on the services provided in the year. Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenues takes place.

Revenues that are non-respendable are not available to discharge AANDC's liabilities. While the Deputy Minister 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 therefore presented in reduction of AANDC's gross revenues.

4. Parliamentary authorities

AANDC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to AANDC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based 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 Department 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 authorities requested

(in thousands of dollars)

  Estimated
Results
2014
Planned
Results
2015
Net cost of operations 7,720,507 7,236,932
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (6,394) (7,164)
Gain (loss) on disposal of tangible capital assets 719 1,002
Transfer of land held for future claim settlements (328) (179)
Services provided without charge by other government departments (92,691) (81,630)
Bad debt expense (not incurred on behalf of government) (1,493) (1,958)
Decrease (increase) in vacation pay and compensatory leave (1,040) 2,425
Decrease (increase) in liability for settled claims 84,260 131,856
Decrease (increase) in provision for claims and litigation 509,484 506,812
Decrease (increase) in environmental liabilities 357,884 182,868
Decrease (increase) in employee future benefits 10,385 2,596
Decrease (increase) in accrued liabilities not charged to authorities 3,236 100
Refunds/adjustments to prior years' expenditures 64,616 63,342
Total items affecting net cost of operations but not affecting authorities 928,638 800,070
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 22,300 11,973
Acquisition of land held for future claims settlements 970 5,000
Total items not affecting net cost of operations but affecting authorities 23,270 16,973
Authorities requested 8,672,415 8,053,975

 

b) Authorities requested

(in thousands of dollars)
  Estimated
Results
2014
Planned
Results
2015
Authorities requested
Vote 1 – Operating expenditures 1,478,741 1,215,376
Vote 5 – Capital expenditures 14,166 5,695
Vote 10 – Grants and Contributions 7,011,939 6,654,153
Statutory amounts 167,569 178,751
Total requested authorities 8,672,415 8,053,975

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

Forecast authorities requested for the year ending March 31, 2015 are the planned spending amounts presented in the 2014-15 RPP. Estimated authorities requested for the year ending March 31, 2014 include amounts presented in the 2013-14 Main Estimates and Supplementary Estimates (A) and (B), planned for presentation in Supplementary Estimates (C) and estimates of amounts to be allocated at year-end from Treasury Board central votes.

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