Future-Oriented Statement of Operations (Unaudited) For the Year Ended March 31, 2015

(in thousands of dollars) Estimated
Results
2014–15
Planned
Results
2015–16
Expenses
Public health infrastructure 154,023 132,511
Health promotion and disease prevention 364,848 305,704
Health security 64,461 61,841
Internal services 107,297 99,284
Total expenses 690,629 599,340
Revenues
Sales of goods and services
Rights and privileges 47 50
Services of a non-regulatory nature 14,611 14,612
Lease and use of public property 17 17
Interest 9 9
Other 49 4
Revenues earned on behalf of Government (139) (98)
Total revenues 14,594 14,594
Net cost of operations 676,035 584,746

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

Notes to the Future-Oriented Statement of Operations (Unaudited)
For the Year Ended March 31, 2015

1. Methodology and Significant Assumptions

The future-oriented statement of operations has been prepared on the basis of government priorities and the plans of the Agency as described in the Report on Plans and Priorities.

The information in the estimated results for fiscal year 2014–15 is based on the actual results as at November 30, 2014, and on forecasts for the remainder of the fiscal year.  Forecasts have been made for the planned results for the 2015–16 fiscal year.

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 historical experience. The general historical pattern is expected to continue.
  • Estimated results for 2014–15 are used as the opening position for the planned results for 2015–16.

These assumptions are adopted as at November 30, 2014.

2. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2014–15 and for 2015–16, actual results achieved for both fiscal years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this future-oriented financial statement of operations, the Agency 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:

  • The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense. 
  • Implementation of new collective agreements.
  • Economic conditions may affect the amount of revenue earned.
  • Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Agency will not be updating the forecasts for any changes to appropriations or forecast financial information 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 using the Government’s accounting policies that came into effect for the 2014–15 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:

  1. Expenses - Expenses are recorded on an accrual basis:
    • Expenses for the Agency’s operations are recorded when goods are received or services are rendered, including services provided without charge 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 as the benefits are earned by employees under their respective terms of employment.
    • Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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 statements. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.
    • Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, provision for valuation on loans, investments 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.
  2. Revenues:
    • 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. While the deputy head is expected to maintain accounting control, he or she 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 as a reduction of the entity's gross revenues.

4. Parliamentary authorities

The Agency receives most of its funding through annual parliamentary authorities.  Financial reporting of authorities provided to the Agency 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 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) Estimated
2014–15
Planned
2015–16
Net cost of operations 676,035 584,747
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets (12,993) (12,877)
Loss on disposal of tangible capital assets (254) 0
Services provided without charge by other government departments (23,611) (22,991)
Decrease in vacation pay and compensatory leave 218 422
Decrease in employee future benefits 719 40
Decrease in accounts payable and accrued liabilities not charged to authorities 472 0
Refund/adjustment of prior years' expenditures 4,272 3,988
Statutory spending authority equivalent to revenues earned 14,070 14,070
Other (50) (4)
Total items affecting net cost of operations but not affecting authorities (17,157) (17,352)
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisition of tangible capital assets 8,303 6,163
Proceeds from disposal of Crown assets 44 0
Total items not affecting net cost of operations but affecting authorities 8,347 6,163
Requested Authorities 667,225 573,558
(b) Authorities requested
(in thousands of dollars) Estimated
2014–15
Planned
2015–16
Authorities requested:
Vote 1 – Operating expenditures 365,669 323,546
Vote 5 – Capital expenditures 8,760 6,163
Vote 10 – Grants and contributions 249,584 199,999
Statutory amounts 43,670 43,850
Less:
Lapsed: Capital (458) 0
Requested Authorities 667,225 573,558

The Requested Authorities include lapses and increased amounts for expenditures related to the statutory amounts and paylist requirements that were not included in the 2014–15 Forecast Spending and 2015–16 Planned Spending for the Report on Plans and Priorities.

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